/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/120926.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, September 26, 2012, Vol. 16, No. 268 Headlines 1220 SOUTH OCEAN: Dan Swanson Development in Chapter 11 1220 SOUTH OCEAN: Case Summary & 2 Largest Unsecured Creditors 360 GLOBAL: Files 5-Year-Old Quarterly Report 5TH AVENUE PARTNERS: Can Employ Thomson Reuters as Tax Consultant ABSOLUTE FUND: Targeted With Involuntary Chapter 7 ADS WASTE: Moody's Affirms 'B2' CFR/PDR; Outlook Stable AES EASTERN: To Sell Shuttered Power Plants for $2 Million ALION SCIENCE: Moody's Cuts CFR to 'Caa2'; Outlook Remains Neg. ALLIED SYSTEMS: Wants to Implement Key Employee Retention Plan AMERICAN AIRLINES: Delays Pile Up Amid Standoff With Pilots AMERICAN AIRLINES: Wins Squabble With Revenue Bond Trustee ARCAPITA BANK: Trolling for Lender With $500,000 in Bait ASSOCIATED ESTATES: Moody's Raises Debt Shelf Rating From (P)Ba1 ATP OIL & GAS: Receives Final Approval for New Senior Financing AXION INTERNATIONAL: MLTM Owns 21.8% Equity Stake as of Sept. 11 B & T OLSON: Can Use KB Cash Collateral Through Plan Confirmation B & T OLSON: Can Access Opus Bank Cash Collateral Until Nov. 15 BEALL CORPORATION: 100-Year Old Portland Truck Maker in Ch. 11 BERNARD L. MADOFF: Trustee Argues Morrison Won't Nix Foreign Suits BREITBURN ENERGY: Moody's Rates $200-Mil. Sr. Unsec. Notes 'B3' BREITBURN ENERGY: S&P Keeps 'B' Rating on Senior Unsecured Notes CAPITOL BANCORP: Says ValStone Is Potential Equity Investor CASELLA WASTE: Moody's Affirms 'B3' CFR & Rates Sr. Notes 'Caa1' CONNACHER OIL: S&P Affirms 'B' Corp. Credit Rating; Outlook Neg. CONSOLIDATION SERVICES: Leland Value in Q3 2011 Form 10-Q Revised CROSS BORDER: Had $475,200 Net Income in Second Quarter DELTEK INC: S&P Lowers CCR to 'B' on LBO; Outlook Stable DEWEY & LEBOEUF: Ex-Partners' $71M Clawback Deal Remains in Limbo DICKINSON THEATRES: Files for Chapter 11 Bankruptcy Protection DIGITAL DOMAIN: Brown Rudnick, Sullivan Hazeltine Represent Panel DIGITAL DOMAIN: Beijing Galloping & Reliance Submit Winning Bid DVORKIN HOLDINGS: Court Okays Springer Brown as Counsel DVORKIN HOLDINGS: FirstMerit Seeks Chapter 11 Trustee EDIETS.COM INC: Leases Pompano Beach, Florida Office Space ELPIDA MEMORY: Asks for Retroactive Approval of $192MM Loan EXECUTIVE CENTER: Platinum Courtyard Seeks to Foreclose FRONTIER COMMS: Note Offering Has No Impact on 'Ba2' CFR - Moody's FRONTIER COMMS: S&P Says 'BB' Rating on Senior Notes Is Unchanged FRONTIER COMMS: Fitch Keeps 'BB+' Rating on $200MM Notes Offering GETTY PETROLEUM: ConocoPhillips Seeks Permission to Examine Sites GRACE BAPTIST: Case Summary & 7 Unsecured Creditors GRAY TELEVISION: S&P Affirms 'B' Corporate Credit Rating GRAY TELEVISION: Moody's Raises CFR to 'B3' & Rates Notes 'Caa2' GUAM POWER: Moody's Upgrades Sub. Revenue Bond Rating to 'Ba1' H&M OIL: Exclusivity Ends Oct. 12 Absent Chapter 11 Plan HARBORSIDE 17: Chapter 11 Case Dismissed Due to Lack of Insurance HEMCON MEDICAL: Court Approves Moss Adams as Accountants INDIANAPOLIS DOWNS: Hearing on $500MM Sale to Centaur Oct. 19 INNER CITY: Asks Court to Dismiss Shareholder Suit Over IP Sale INTERNATIONAL WIRE: Moody's Affirms 'B2' CFR/PDR; Outlook Stable INTERNATIONAL WIRE: S&P Affirms 'B+' Corporate Credit Rating JACKSON GREEN: Chapter 11 Reorganization Case Dismissed K-V PHARMACEUTICAL: Hologic Issue Has Nov. 11 Hearing KINGFISHER AIRLINES: Lenders to Meet Soon for Debt Talks LAZY DAYS: Advisory Opinions for State Court Judges Prohibited LEAP WIRELESS: S&P Rates Proposed $400-Million Term Loan 'B+' LEAP WIRELESS: Moody's Rates $400-Mil. Term Loan B Offering 'Ba2' LEE'S FORD: Hires Venters for General Litigation Matters LEHMAN BROTHERS: Sues Ford Global Treasury for $7.8 Million LEHMAN BROTHERS: Barclays Seeks Sanctions v. Puerto Rican Bank LEHMAN BROTHERS: Aussie Unit Held Liable to 3 Towns LEHMAN BROTHERS: $5.9-Bil. in Claims Traded in August & July LYMAN LUMBER: Court OKs Colliers Int'l as Marketing Assistant MEDIA GENERAL: Warren Buffett Owns 17% Class A Shares MEDICURE INC: Board Approves 15-to-1 Share Consolidation MF GLOBAL: Ch. 11 Trustee Files $8.4MM Suit Against Breakwater MF GLOBAL: Parent's Unpaid Fees Rise to $39.2 Million MILTON HOSPITAL: S&P Holds 'BB-' Rating on $32.5MM Series D Bonds MONEY TREE: Consumer Privacy Ombudsman Appointed MONEY TREE: Chapter 11 Trustee Fires KCC as Claims Agent MOORE SORRENTO: Reorganization Plan Declared Effective NATIONS ENERGY: Case Summary & Largest Unsecured Creditor NEW ENGLAND BUILDING: Court OKs King Real Estate as Broker NEWPAGE CORP: Reports 'Substantial Progress' on Plan Talks NIFTUS LLC: Hearing on DIP Financing Continued Until Oct. 17 NIP COMPANY: Amends Schedules of Assets and Liabilities NIP COMPANY: RCG Files Schedules of Assets and Liabilities NORTHSTAR AEROSPACE: Wants to Reject CBA With Unions NORTHSTAR AEROSPACE: Grant Thorton Approved as Tax Advisors OCEANSIDE YACHT: Withdraws Motion for Cash Collateral Access OLDE PRAIRIE BLOCK: Returns to Ch. 11, Owes $71MM to CenterPoint OLDE PRAIRIE BLOCK: Case Summary & 20 Largest Unsecured Creditors OXLEY DEVELOPMENT: Taps Paul Reece Marr as Bankruptcy Counsel PACIFIC THOMAS: Amends List of 20 Largest Unsecured Creditors PATRIOT COAL: Wants Out of Coal Sales Deals With Parent PEREGRINE FINANCIAL: Trustee Wins Nod to Return $123M to Customers PLY GEM: S&P Affirms 'B-' Corp. Credit Rating; Outlook Positive PLY GEM: Moody's Rates $160-Mil. Senior Unsecured Notes 'Caa3' PROTEONOMIX INC: Amends Q2 2012 Quarterly Report QUALITY STORES: Circuits Split on Whether Severance Pay Is Wages REDDY ICE: Settles Ice Price-Fixing Claims for $750,000 RG STEEL: Taps ASK LLP to Collect on Accounts Receivable RG STEEL: Taps Hilco IP to Market Internet Protocol Numbers RITZ CAMERA: To Shut Down Store in Old Town Alexandria RR DONNELLEY: Fitch Downgrades IDR to 'BB'; Outlook Still Negative S&P CONVERYORS: Files for Chapter 11 Bankruptcy Protection SAAB CARS: Court Orders Ally to Turn Over Loan Documents SECOND CHANCE: Reaches $3.6 Million Deal in FCA Suit SHAMROCK-HOSTMARK: Can Use Lender's Cash Collateral Until Oct. 31 SHAMROCK-HOSTMARK: Files Schedules of Assets and Liabilities SHINER CHEMICALS: Bankruptcy Judge Closes Chapter 11 Case SOLYNDRA LLC: Plant Slated for Mid-November Bankruptcy Sale SOLYNDRA LLC: To Pay Part of $13 Million Ex-Landlord Claim SOUTHERN FOREST: Amends Schedules of Assets and Liabilities SOUTHERN GRAPHICS: Moody's Assigns 'B2' CFR; Outlook Stable SP NEWSPRINT: Changes Company Name Following Sale of Assets SPIRIT FINANCE: To Issue 3.1MM Common Shares Under Incentive Plan ST. IGNACE, MI: Fitch Downgrades Rating on Tax Bonds to 'BB' TELLICO LANDING: Chapter 11 Reorganization Case Dismissed THINKFILM LLC: Judge May Dismiss Bergstein's Law Firm Suit TRIZETTO GROUP: S&P Affirms 'B' CCR; Outlook Stable UNIVERSAL HEALTH: S&P 'BB+' Rating Unaffected by Upsizing of Loan UNIVERSAL HEALTH: Fitch Puts 'BB+' Rating on New $900MM Term Loan VALENCE TECHNOLOGY: Designates Steve Grimshaw as Consultant VALENCE TECHNOLOGY: Committee Wants to Retain BPR as Counsel VALENCE TECHNOLOGY: Has Interim OK to Obtain $5-Mil. DIP Financing VENTANA 20/20: Files List of 20 Largest Unsecured Creditors VOX TOWER: Case Summary & 2 Unsecured Creditors WASHINGTON MUTUAL: Oregon Seeks $29 Million in Back Taxes WESTCLIFFE PROPERTY: Case Summary & 4 Unsecured Creditors WHITTON CORP: Affiliate South Tech's Bankruptcy Case Dismissed WOLVERINE WORLD: Moody's Rates $375-Million Senior Notes 'B2' WOLVERINE WORLD: S&P Rates $375MM Senior Unsecured Notes 'B+' ZBB ENERGY: Baker Tilly Raises Going Concern Doubt * 8th Circ. Tosses $13MM Suit Over UnitedHealth Intermediary * 'Stripping Off' Under Water Lien Barred in Chapter 7 * Fifth Circuit Allows Narrow Bankrupt Homeowner Class * Lawyer Sanctioned for Bad Faith in Claim Objections * Cohen & Grigsby Appoints C. Tillapaugh as Director of Recruiting * Upcoming Meetings, Conferences and Seminars ********* 1220 SOUTH OCEAN: Dan Swanson Development in Chapter 11 ------------------------------------------------------- 1220 South Ocean Boulevard, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Fla. Case No. 12-32609) in its home-town in West Palm Beach, Florida. The Debtor disclosed $74 million in total assets and $41.5 million in liabilities as of Sept. 7, 2012. According to http://1220southocean.com/1220 South Ocean is a French-inspired waterfront estate homes and resort located in Palm Beach. Owned by real estate developer Dan Swanson, president of Addison Development, 1220 South Ocean sits on 2.5 private and secure acres of land, has 20,000 square feet of living plus an additional 7,000 square feet of loggias, garages & guest house. The resort is located four miles to Palm Beach International Airport. Mr. Swanson other developments include the Phipps Estates in Palm Beach and Addison Estates at the Boca Hotel. Kenneth S. Rappaport, Esq., in Boca Raton, Florida, serves as counsel to the Debtor. Paul Brinkmann at South Florida Business Journal reports the "French-inspired" mansion was recently listed by Corcoran Group for $74 million. According to the report, loans for the home construction came from TD Bank at $16 million and $5.2 million, and from New Providence Capital at $5.3 million and $1 million. 1220 SOUTH OCEAN: Case Summary & 2 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: 1220 South Ocean Boulevard, LLC 215 5 Street, Suite 100 West Palm Beach, FL 33401 Bankruptcy Case No.: 12-32609 Chapter 11 Petition Date: September 21, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Erik P. Kimball Debtor's Counsel: Kenneth S. Rappaport, Esq. RAPPAPORT OSBORNE & RAPPAPORT PL 1300 N. Federal Highway, #203 Boca Raton, FL 33432 Tel: (561) 368-2200 E-mail: rappaport@kennethrappaportlawoffice.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Dan E Swanson, manager. Debtor's List of Its Two Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Mitchell B. Kirschner, P.A. Trade Debt $17,735 1515 N. Federal Highway, Suite 314 Boca Raton, FL 33432 Kaufman Rossin & Co PA Trade Debt $6,000 2699 S. Bayshore Drive Miami, FL 33133 360 GLOBAL: Files 5-Year-Old Quarterly Report --------------------------------------------- 360 Global Investments filed on Sept. 19, 2012, its quarterly report on Form 10-Q for the third quarter ended Sept. 30, 2007. 360 Global plans to complete its SEC filings (among other filings and reports) as soon as practical taking into account the general economic climate. The Company reported a net loss of $4.5 million on $4.8 million of revenues for the period, compared with net income of $12.6 million on $4.9 million of revenues for the third quarter ended Sept. 30, 2006. The Company's balance sheet at Sept. 30, 2007, showed $41.2 million in total assets, $84.0 million in total liabilities, and a stockholders' deficit of $42.8 million. A copy of the Form 10-Q is available at http://is.gd/IdAy3V About 360 Global 360 Global Investments, formerly 360 Global Wine Company, is a publicly traded investment holding company that has invested in a number of diverse business activities and that has targeted a number of industries for future investment. 360 Global is domiciled in the state of Nevada and its corporate headquarters are located in Los Angeles, Calif. 360 Global Wine Company, Inc., filed for Chapter 11 protection (Bankr. D. Nev. Case No. 07-50205) on March 7, 2007. On Dec. 12, 2008, 360 Global's Disclosure Statement and Plan of Reorganization was confirmed by United States Bankruptcy Court for the District of Nevada. A copy of Global Plan is available for free at http://is.gd/pAf3bR 5TH AVENUE PARTNERS: Can Employ Thomson Reuters as Tax Consultant ----------------------------------------------------------------- The Bankruptcy Court has authorized 5th Avenue Partners LLC to employ Thomson Reuters (Property Tax Services) Inc. as its property tax consultant. The Firm will render these types of professional services: A. Assist the Debtor with filing an annual appeal for each property for the open tax years and, as reasonably determined by the Firm, to protect the administrative rights of the Debtor; B. Review supplemental tax bills for second generation tenant improvements, new construction reporting and rehabilitation costs and, if warranted and directed by the Debtor, assist the Debtor in filing an appeal; C. Review the assessor's appraisal records to determine the accuracy and methodology used in assessing the value of each property; D. As reasonably determined by the Firm, conduct a site inspection, gather market information, and interview appropriate personnel; E. For selected property, complete a property tax valuation analysis as of the lien date, which will set forth the assessment issues; F. Upon completion of the property tax valuation analysis, if directed by the Debtor, to assist in the Debtor's meeting with representatives of the assessing jurisdictions to help the Debtor explain the positions taken or conclusions reached; G. If the assessing jurisdiction does not agree with the Debtor's suggested assessed value, if directed by the Debtor, assist the Debtor with the appeal to the appropriate assessment appeals board, to the extent permitted by law, regulations, rules and applicable professional standards; and H. Manage the formal appeal process by providing expert testimony, if appropriate In consideration for providing services related to the appeal of the Debtor's real property assessments for the 2010 and 2011 tax years, Thomson Reuters will be compensated 25% of any property tax savings and interest received as a result of assessment reductions among property for the 2010 and 2011 tax years or through Dec. 31, 2012, but not more than $25,000 per tax year. The Debtor assured the Court that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About 5th Avenue Partners Newport Beach, California-based 5th Avenue Partners owns and operates the Se San Diego hotel located in San Diego, California's financial district. The hotel has 184 guestrooms, a 5,500-square- foot spa, a restaurant, rooftop bar and lounge, 20,000 square feet of banquet space and meeting rooms, an outdoor rooftop pool, fitness center and 23 unsold condominium units. 5th Avenue also owns next to the Se San Diego hotel building a 31,000-square-foot building, which it leases to the House of Blues music club. 5th Avenue Partners, LLC, filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 10-18667) on June 25, 2010. Marc J. Winthrop, Esq., at Winthrop Couchot PC, in Newport Beach, California, serves as counsel to the Debtor. Blitz Lee & Company serves as its accountant. Richard M. Kipperman was appointed as chief restructuring officer. The Company estimated assets at $10 million to $50 million and debts at $50 million to $100 million. The Official Committee of Unsecured Creditors tapped Baker & McKenzie LLP as counsel. ABSOLUTE FUND: Targeted With Involuntary Chapter 7 -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Absolute Fund LP, which was involved in what the Securities and Exchange Commission called a "Ponzi-like" scheme, was the target of an involuntary Chapter 7 bankruptcy petition filed on Sept. 21 in Manhattan. According to the report, the SEC filed suit for violation of securities laws on May 24 in U.S. District Court in Manhattan against affiliates Absolute Fund Advisors LLC, Absolute Fund Management LLC and the companies' principal Jason J. Konior. With consent from Mr. Konior and the companies, the district judge entered an injunction the same day prohibiting violation of securities laws and freezing the companies' assets. The SEC alleged in its complaint that Absolute obtained about $11 million from the sale of limited partnerships in Absolute Fund LP. Rather than investing the money as promised, the money was used to "pay redemptions of earlier investments" and for payments to Mr. Konior, the SEC said in the complaint. According to the Bloomberg report, the SEC said in the complaint that Mr. Konior over a space of nine years was employed by 17 different securities firms, where "numerous customer complaints were filed." Three creditors with $1.5 million in claims filed an involuntary Chapter 7 petition against the fund (Bankr. S.D.N.Y. Case No. 12-13986) on Sept. 21. ADS WASTE: Moody's Affirms 'B2' CFR/PDR; Outlook Stable ------------------------------------------------------- Moody's Investors Service has affirmed the ratings, including a B2 corporate family rating, of ADS Waste Holdings, Inc., following revision of the planned initial debt amounts and structure of the leveraged transaction that will combine Veolia ES Solid Waste, Inc., Advanced Disposal Services, Inc. (Ba3, rating under review) and Interstate Waste Services (unrated). The beginning debt load will be $100 million less (about 4% less) than originally expected due to an enlarged equity component. The planned senior unsecured notes will be $550 million versus the $800 million originally envisioned, while the first lien term loan is now planned at $1.8 billion versus the previous $1.65 billion amount. The revised financing plan does not sufficiently change the company's profile to warrant any rating changes, although Loss Given Default assessments pursuant to Moody's Loss Given Default Methodology have been slightly modified. Ratings affirmed: Corporate Family, B2 Probability of Default, B2 $300 million first lien revolver due 2017, B1, LGD3, to 37% from 33% $1,800 million first lien term loan due 2019, B1, LGD3, to 37% from 33% $550 million senior unsecured notes due 2020, Caa1, LGD5, to 89% from 86% Rating Outlook, Stable The transaction's initial financial leverage (debt to EBITDA low 6x range, Moody's adjusted) is high for the rating but should decline as synergies permit earnings growth and debt reduction. The business combination will result in a collection/disposal property network that should yield EBITDA margin in the upper 20% range. The rating outlook is stable reflecting the revolver's large size (initially undrawn with roughly $70 million in letters of credit), and a $53 million cash funded restructuring reserve planned from deal proceeds. These liquidity sources should offer sufficient financial flexibility to achieve cost reduction targets. 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 2014 seems unlikely or if EBITDA to interest remains below 2x. A weakened liquidity profile, such as from tightening covenant compliance headroom or sustained dependence on the revolver, would also negatively pressure the rating. 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. AES EASTERN: To Sell Shuttered Power Plants for $2 Million ---------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that AES Eastern Energy LP on Wednesday announced a deal to sell its four non-operational power plants and other related assets to a subsidiary of DSA Services Inc. for $2.25 million, a move that will allow the company to submit a Chapter 11 plan and complete its liquidation. About AES Eastern Ithaca, New York-based AES Eastern Energy, L.P., either directly or indirectly, control six coal-fired electric generating plants located in New York State. Currently, the Debtors actively operate two of the six power plants and sell the electricity generated by those plants into the New York wholesale power market to utilities and other intermediaries under short-term agreements or directly in the spot market. AES Eastern Energy and 13 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 11-14138 through 11-14151) on Dec. 30, 2011. Lawyers at Weil, Gotshal & Manges LLP and Richards, Layton & Finger, P.A., are legal counsel to AES Eastern Energy and affiliates. Barclays Capital is serving as investment banker and financial advisor. Kurtzman Carson Consultants is the claims and noticing agent. AES Eastern Energy estimated $100 million to $500 million in assets and $500 million to $1 billion in debts. The petition was signed by Peter Norgeot, general manager. Gregory A. Horowith, Esq., and Robert T. Schmidt, Esq., at Kramer, Levin, Naftalis & Frankel LLP; and William T. Bowden, Esq., Benjamin W. Keenan, Esq., and Karen B. Skomorucha, Esq., at Ashby & Geddes, P.A., serve as counsel to the Creditors Committee. FTI Consulting Inc. is the financial advisor. The TCR reported on April 13, 2012, that AES Eastern received permission from the bankruptcy judge in Delaware to sell the two operating facilities to secured creditors in exchange for debt. At a court hearing in Wilmington, Judge Kevin Carey signed off on the sale, which rids the AES Corp. unit of its only operating power plants, located in Cayuga and Somerset, N.Y., Bankruptcy Law360 said. ALION SCIENCE: Moody's Cuts CFR to 'Caa2'; Outlook Remains Neg. --------------------------------------------------------------- Moody's Investors Service has lowered the ratings of Alion Science and Technology Corporation including its Corporate Family Rating ("CFR") to Caa2 from Caa1 due to the high likelihood that the company will need do a debt refinancing over the next twelve to eighteen months. The speculative grade liquidity ("SGL") rating is unchanged at SGL-3. The ratings outlook remains negative. The following ratings were downgraded (with updated LGD assessments): Corporate Family Rating, to Caa2 from Caa1 Probability of Default Rating, to Caa2 from Caa1 $310 million senior secured notes due 2014, to B3 (LGD-3, 32%) from B2 (LGD-3, 32%) $243 million unsecured notes due 2015, to Caa3 (LGD-5, 82%) from Caa2 (LGD-5, 82%) The following ratings were affirmed: $35 million senior secured revolving credit facility due 2014, at B1 (LGD-1, 3%) Speculative grade liquidity, at SGL-3 RATINGS RATIONALE The CFR downgrade to Caa2 is largely driven by the company's still weak operating performance, cash generation and interest coverage as well as the need to address its entire debt structure in the 2014-2015 time period. In addition, the company continues to service a high debt burden with PIK interest accruing on a portion of its secured debt. Alion's Caa2 corporate family rating reflects the company's continued high leverage and weak interest coverage that are not anticipated to improve meaningfully in the near-term with uncertainty also regarding future defense budget outlays and level of possible contract funding delays. The ratings incorporate the high probability of a refinancing to address sizable 2014-2015 debt maturities with credit metrics expected to remain within the Caa rating category. Positively, Alion's work with the Department of the Navy (expected to be less affected by budget cutbacks than the Army) which accounts for over half its revenue base does provide a degree of revenue and EBITDA generation sustainability. Alion continues to have a healthy backlog and adequate liquidity profile. Alion's adequate liquidity profile, denoted by the SGL-3 liquidity rating, is supported by expected continued moderate cash levels on the balance sheet ($7.8 million at June 30, 2012), anticipated moderately positive free cash flow generation on a rolling twelve month basis and a largely undrawn facility at quarter-end with minimal usage on an intra-quarter basis. At June 30, 2012, Alion reported no drawings under its revolver. Covenant headroom is expected to remain tight. Although covenant headroom has increased over the last twelve months due to an increase in absolute EBITDA, the steeper minimum EBITDA threshold requirements at 2012 year-end and subsequent step up to $65.5 million by December 31, 2013 will likely lower headroom. If the company were to lose access to its revolver due to noncompliance with covenants as a result of lower than anticipated 2013 EBITDA generation, the SGL rating would be lowered to SGL-4. The negative outlook reflects Alion's very high leverage compounded by the upcoming difficult DoD budget environment and the need to address its capital structure. The ratings consider that current liquidity sources are not expected to be sufficient to meet the maturity of the company's entire debt structure coming due in the 2014-2015 time period. Ratings could be lowered if revenue growth and margin improvement do not materialize, resulting in the failure to improve credit metrics and liquidity. A meaningful deterioration in free cash flow generation would likely result in a downgrade. The rating outlook could be changed to stable if the company grows revenues and profitability in 2013, improves liquidity by generating double digit free cash flow and expands headroom under financial covenants. The ratings could be upgraded if the company substantially improves its liquidity position and achieves sustained growth in credit metrics such that debt to EBITDA and EBIT/interest approach 6.0 times and 1.0 times, respectively. The principal methodology used in rating Alion Science and Technology Corporation was the Global Aerospace and Defense Industry Methodology published in June 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. Alion Science and Technology Corporation is an employee-owned company that provides scientific research, development, and engineering services related to national defense, homeland security, and energy and environmental analysis. Particular areas of expertise include naval architecture and engineering, defense operations, modeling and simulation, technology integration, information technology and wireless communications, energy and environmental services. Revenue for the last twelve months ended June 30, 2012 totaled $790 million. ALLIED SYSTEMS: Wants to Implement Key Employee Retention Plan -------------------------------------------------------------- Allied Systems Holdings, Inc., asks the Bankruptcy Court for entry of an order authorizing the Debtors to implement a Key Employee Retention Plan. Since the commencement of the Debtors' Chapter 11 Cases, the Debtors have lost a number of employees at various locations in the U.S. and Canada. The Debtors are already short staffed, and given the uncertainties that come with any Chapter 11 case, the potential loss of additional key employees is substantial and would be detrimental to the Debtors' reorganization efforts. As such, the Debtors seek to implement a retention plan to stem the tide of further employee attrition during the pendency of these Chapter 11 Cases. The non-insider employees that would be covered by the Retention Plan are critical to the functioning of the Debtors' ongoing operations. Accordingly, if these key employees begin a mass exodus, the Debtors' operations will be significantly impaired which could have catastrophic consequences for the Debtors' reorganization efforts. In order to avoid this harm, the Debtors have determined that it is necessary to implement the Retention Plan for these key employees. The Retention Plan is intended to cover 79 key non-insider employees that work for various of the Debtor entities in both the U.S. and Canada. Participants in the Retention Plan will receive a lump sum bonus payment equivalent to 15% of such participant's Annual Base Salary to the extent that each participant remains in the Debtors' employ (a) through and including the Effective Date of a Chapter 11 Plan, or (b) the participant incurs a Qualifying Termination of Employment prior to that time. A Qualifying Termination of Employment includes by reason of the death or Disability of the participant, by reason of a Partial Sale of the Debtors' business or a termination of the participant's employment without cause. The Debtors estimate that the aggregate potential payout under the Retention Plan is $799,523.95. A copy of the Key Employee Retention Plan is available for free at http://bankrupt.com/misc/ALLIEDSYSTEMS_kerp.pdf About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. AMERICAN AIRLINES: Delays Pile Up Amid Standoff With Pilots ----------------------------------------------------------- Susan Carey at Dow Jones' Daily Bankruptcy Review reports that American Airlines continued to rack up flight delays and cancellations, blaming a dispute with its pilots union. The Allied Pilots Association (APA) representing the 10,000 pilots who fly for American Airlines scheduled a public demonstration Sept. 25 in Boston Logan International Airport signifying American Airlines' pilots determination to secure a contract commensurate with their status as professional aviators for a major U.S. carrier. APA noted that American Airlines management recently received bankruptcy court approval to reject the APA-American Airlines Collective Bargaining Agreement. APA said that management is now unilaterally implementing new terms of employment that adversely affect pilots' working conditions, compensation and retirement security. APA believes management is using Chapter 11 bankruptcy to extract far more value from the pilots than what's needed to successfully restructure American Airlines. 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 Squabble With Revenue Bond Trustee ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp., the parent company of American Airlines Inc., won't be forced to start a lawsuit next month with holders and indenture trustees for nine issues of special facility revenue bonds related to the Dallas-Fort Worth airport. According to the report, Manufacturers & Traders Trust Co., the indenture trustee for the special facility bonds, filed papers in August telling the U.S. bankruptcy judge in New York that there is a potential dispute on the question of whether bondholders have two claims, one on the bonds and another on a guarantee of the bonds by another AMR entity. The indenture trustee wanted the bankruptcy judge to compel AMR to file any objection to the claims by Oct. 19. AMR countered by saying that no one creditor has the right to mandate the order in which a bankrupt company chooses to object to thousands of filed claims. The report relates that the judge agreed with AMR and declined to force immediate commencement of an objection to claims on the bonds. The judge's formal order was signed on Sept. 21. The pilots' union filed a motion at the end of the week asking the bankruptcy judge to freeze implementation of his Sept. 5 order allowing the airline to make changes in the pilots' contract. According to the report, the union says it's likely to win on appeal and that allowing the airline to implement "dramatic changes" in the contract can't be remedied if the appeal succeeds. The union describes the issues on appeal as including the question of whether a bankruptcy court can set aside a contract that already terminated by its terms, as was the case with the pilots' contract. Earlier this year, the AMR judge concluded that he has ability to mandate changes in an expired union contract. The report notes that in the reorganization of Hostess Brands Inc. in White Plains, New York, the bankruptcy judge ruled this year that he lacks the ability to modify an expired union contract. AMR customers continued to experience cancellations and flight delays as pilots took what a union spokesman said was a conservative approach to allowing aircraft to fly with mechanical problems. The flight delays began after AMR began implementing court-authorized changes in the pilots' contract. 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). ARCAPITA BANK: Trolling for Lender With $500,000 in Bait -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Bahrainian investment bank Arcapita Bank BSC is on the prowl for financing to continue the reorganization begun in March. According to the report, to entice lenders into negotiating a financing package, the bankruptcy court in New York authorized paying a prospective lender as much as $500,000 in expense reimbursement. Arcapita said financing is complex and novel because there has been no previous Chapter 11 reorganization in compliance with Islamic Shariah financing regulations. When seeking approval for expense reimbursement, Arcapita said it was hoping that financing would be arranged in time for approval in early October. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., later filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group has roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ASSOCIATED ESTATES: Moody's Raises Debt Shelf Rating From (P)Ba1 ---------------------------------------------------------------- Moody's Investors Service has upgraded Associated Estates'(AEC) senior unsecured debt shelf rating to (P)Baa3 from (P)Ba1. The rating outlook is stable. The rating upgrade reflects the multifamily REIT's improved portfolio composition, continued earnings strength, and maintenance of modest leverage as it continues to grow. Moody's ratings and stable outlook reflects Moody's expectation that strong operating performance will continue to drive improvement in AEC's key credit metrics, particularly Net Debt/EBITDA. Moody's also expects the REIT will continue its efforts to increase the size of its unencumbered asset pool, while maintaining modest overall leverage. RATINGS RATIONALE Moody's notes that Associated Estates has improved its asset quality over the past several years, executing a substantial amount of acquisitions and dispositions that have reduced the average age of its portfolio and increased its presence in higher- growth markets like the Northern Virginia/DC metro area, Dallas, and, more recently, Raleigh-Durham. The REIT still has a large presence in the Midwest (41% of 2Q12 NOI), but even as these assets have a lower-growth profile they also provide an important component of stability to the REIT's cash flows as evidenced by their performance during the recent recession. With multifamily fundamentals now favorable, Associated Estates recorded 5.5% same- community NOI growth in 2Q12 and Moody's expects continued solid growth through at least 2013. This growth should translate into continued improvement in key credit metrics like fixed charge coverage and Net Debt/EBITDA. The (P)Baa3 rating reflects Moody's expectation that Associated Estates will continue to decrease its reliance on secured financing and increase the size of its unencumbered asset pool. Secured debt was modestly high at 29% of gross assets as of 2Q12, but has declined from 37% at YE10 and 51% at YE09. Moody's expects the REIT will further decrease secured leverage over the next few years via the acquisition of unencumbered assets and refinancing a large portion of upcoming secured debt maturities with other sources of capital. Associated Estates has no debt maturities remaining in 2012 and $150 million of maturities in 2013. The REIT's liquidity is supported by its $350 million unsecured credit facility (matures in 2016), which had $75 million drawn as of 2Q12. Associated Estates' key credit challenges remain its small size, still high geographic concentration in certain Midwest sub- markets, and modestly high secured debt levels. In addition, leverage is still high as measured on a Net Debt/EBITDA basis and EBITDA margins remain lower than many of its multifamily peers, partially a function of its size. Moody's indicated that a rating upgrade would be difficult in the intermediate term, but would likely reflect Net Debt/EBITDA closer to 6.0x, secured debt below 15% of gross assets, gross assets closer to $3.5 billion, and maintenance of sound operating performance with fixed charge coverage above 2.8x on a sustained basis. The ratings would likely be downgraded should fixed charge coverage fall below 2.2x, Net Debt/EBITDA rise above 9x, or secured leverage increase above 35% of gross assets, all on a sustained basis. The following ratings were raised with a stable outlook: Associated Estates Realty Corporation - senior unsecured debt shelf to (P)Baa3 from (P)Ba1; preferred stock shelf to (P)Ba2 from (P)Ba3. Moody's last rating action for Associated Estates Realty Corporation was on March 22, 2012, when the ratings were affirmed with a positive outlook. Associated Estates Realty Corporation is a multifamily real estate investment trust headquartered in Richmond Heights, Ohio. The REIT's portfolio consists of 53 properties located in ten states. The principal methodology used in this rating was Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. ATP OIL & GAS: Receives Final Approval for New Senior Financing --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that ATP Oil & Gas Corp. received final approval on Sept. 20 for secured financing that includes $250 million in new borrowing power plus conversion of about $365 million in pre- bankruptcy secured debt into a post-bankruptcy obligation. The report relates the new financing is being provided by some of the same lenders owed $365 million on a first-lien loan where Credit Suisse AG serves as agent. The new loan comes in ahead of the existing second-lien debt. The Company's second-lien notes traded on Sept. 21 for 22.25 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes traded at 29.625 cents on Aug. 17, the day of the Chapter 11 filing in Houston. ATP reported a net loss of $145.1 million in the first quarter on revenue of $146.6 million. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. ATP reported a net loss of $145.1 million in the first quarter on revenue of $146.6 million. Income from operations in the quarter was $11.8 million. For 2011, the net loss was $210.5 million on revenue of $687.2 million. An official committee of unsecured creditors has been appointed in the case. AXION INTERNATIONAL: MLTM Owns 21.8% Equity Stake as of Sept. 11 ---------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, MLTM Lending, LLC, disclosed that as of Sept. 11, 2012, it beneficially owns 7,317,218 shares of common stock of Axion International Holdings, Inc., representing 21.8% of the shares outstanding. ML Dynasty Trust beneficially owns 6,585,496 common shares as of Sept. 11. A copy of the filing is available for free at http://is.gd/G8UyKf About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. RBSM LLP, in New York, the auditor, issued a going concern qualification each in the Company's financial statements for the years ended Dec. 31, 2010, and 2011. RBSM LLP noted that the Company has incurred significant operating losses in current year and also in the past. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern, it said. Axion International reported a net loss of $9.93 for the 12 months ended Dec. 31, 2011, compared with a net loss of $7.10 million for the 12 months ended Sept. 30, 2010. The Company's balance sheet at June 30, 2012, showed $7.68 million in total assets, $7.80 million in total liabilities, $5.80 million in 10% convertible preferred stock, and a $5.91 million total stockholders' deficit. B & T OLSON: Can Use KB Cash Collateral Through Plan Confirmation ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington authorized in a third interim order B & T Olson Family LLC to use lease income from various commercial properties (which constitute as cash collateral of Key Bank) through the effective date of a plan confirmation, pursuant to a budget. As reported in the TCR on May 22, 2012, three banks assert an interest in the cash collateral on account of prepetition secured loans: Amount Owed Lender Prepetition ------ ----------- Opus Bank, successor to Cascade Bank $11,855,002 Union Bank, successor to Frontier Bank $1,177,397 Key Bank $2,177,524 As adequate protection, the third interim Order provides that Key Bank will continue to hold, and is granted, on an interim basis, a replacement lien encumbering leases and subleases entered into following the Petition Date, and the rents generated from those leases and subleases. To the extent the interests of Key Bank are not adequately protected by the interim replacement liens and other provisions of the third interim order, Key Bank will retain their right to seek allowance of a claim under Section 507(b) of the Bankruptcy Code. The Debtor's use of Key Bank's cash collateral will terminate automatically upon either (i) the conversion of the bankruptcy case to one under Chapter 7 of the Bankruptcy Code or (ii) the appointment of a Chapter 11 trustee. About B&T Olson Family Based in Snohomish, Washington, B&T Olson Family LLC filed for Chapter 11 protection (Bankr. W.D. Wash. Case No. 12-14352) on April 26, 2012, in Seattle on April 26, 2012. B&T Olson disclosed $18.3 million in assets and $17.5 million in assets in its schedules. The Debtor owns six properties in Lake Stevens, Stanwood, and Camano Island, Washington. Four properties worth $16 million secure $12 million of debt to Opus Bank. Brett T. Olson and Christina L. Olson own the Debtors. Judge Karen A. Overstreet oversees the case. James L. Day, Esq., and Katriana L. Samiljan, Esq., at Bush Strout & Kornfeld LLP, serve as the Debtor's counsel. Opus Bank is represented by Brian C. Free, Esq., and Amit D. Ranade, Esq., at Hillis Clark Martin & Peterson P.S. B & T OLSON: Can Access Opus Bank Cash Collateral Until Nov. 15 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington authorized in a third interim order B & T Olson Family LLC to use lease income from various commercial properties that constitute as cash collateral of Opus Bank. The order allows the Debtor to use cash collateral through the earlier of Nov. 15, 2012, or the effective date of a confirmed plan of reorganization, pursuant to a budget. Opus Bank has filed a proof of claim asserting a total outstanding balance on its loans of approximately $12,138,910 as of the Petition Date. As adequate protection, the third interim Order provides that Opus Bank will continue to hold, and is granted, on an interim basis, a replacement lien encumbering leases and subleases entered into following the Petition Date, and the rents generated from those leases and subleases. As additional adequate protection, the Debtor will pay to the Bank the cash payments set forth in the budget. To the extent the interests of Opus Bank are not adequately protected by the interim replacement liens and other provisions of the third interim order, Opus Bank will retain their right to seek allowance of a claim under Bankruptcy Code Section 507(b). The Debtor's use of Opus Bank's cash collateral will terminate automatically upon either (i) the conversion of the bankruptcy case to one under Chapter 7 of the Bankruptcy Code or (ii) the appointment of a Chapter 11 trustee. About B&T Olson Family Based in Snohomish, Washington, B&T Olson Family LLC filed for Chapter 11 protection (Bankr. W.D. Wash. Case No. 12-14352) on April 26, 2012, in Seattle on April 26, 2012. B&T Olson disclosed $18.3 million in assets and $17.5 million in assets in its schedules. The Debtor owns six properties in Lake Stevens, Stanwood, and Camano Island, Washington. Four properties worth $16 million secure $12 million of debt to Opus Bank. Brett T. Olson and Christina L. Olson own the Debtors. Judge Karen A. Overstreet oversees the case. James L. Day, Esq., and Katriana L. Samiljan, Esq., at Bush Strout & Kornfeld LLP, serve as the Debtor's counsel. Opus Bank is represented by Brian C. Free, Esq., and Amit D. Ranade, Esq., at Hillis Clark Martin & Peterson P.S. BEALL CORPORATION: 100-Year Old Portland Truck Maker in Ch. 11 -------------------------------------------------------------- Beall Corporation filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 12-37291) on Sept. 24, estimating at least $10 million in assets and liabilities. Headquartered in Portland, Beall is a manufacturer of lightweight, efficient, and durable tanker trucks, trailers and related products. Founded in 1905, the Debtor has four factories and nine sale branches across the U.S. The Debtor has 285 employees, with an average weekly payroll of $300,000. Beall on the petition date filed motions to pay prepetition wages and benefits, provide adequate protection to utility companies and use cash collateral. There's an expedited hearing on the first day motions on Sept. 27, 2012 at 10:00 a.m. before Judge Elizabeth L. Perris. The Debtor said it needs to obtain court approval of its first-day motions in order to continue to conduct its business in the ordinary course and to pay its postpetition obligations as and when they become due. The Debtor has tapped Tonkon Torp LLP as counsel. BERNARD L. MADOFF: Trustee Argues Morrison Won't Nix Foreign Suits ------------------------------------------------------------------ Max Stendahl at Bankruptcy Law360 reports that the trustee for Bernard L. Madoff's defunct firm told a New York federal judge Friday that he has the right to sue foreign entities that allegedly received Ponzi scheme proceeds, arguing the U.S. Supreme Court's landmark Morrison ruling did not doom 60 such cases. 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. BREITBURN ENERGY: Moody's Rates $200-Mil. Sr. Unsec. Notes 'B3' --------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to BreitBurn Energy Partners L.P.'s proposed $200 million senior unsecured notes due 2022. The notes are an add-on to the company's $250 million senior unsecured notes due 2022 that were issued in January 2012. The proceeds will be used to repay borrowings under the revolving credit facility. The rating outlook is stable. RATINGS RATIONALE "BreitBurn's B1 Corporate Family Rating (CFR) reflects its long- lived, predominately proved developed reserve base, balanced exposure to oil and natural gas production and relatively low leverage on proved reserves," stated Michael Somogyi, Moody's Vice President -- Senior Analyst. Furthermore, "BreitBurn's predictable production profile and active hedging strategy provides for greater certainty in balancing the funding of development capex and distributions consistent with its MLP corporate finance model." The company recently completed three acquisitions totaling $313 million, funded primarily through revolver borrowings. They acquired 5.9 million barrels of oil equivalent (BOE) of proved reserves in Wyoming from Legacy Energy, Inc. for $93 million in June 2012 and acquired 9.5 million BOE of proved reserves in the Permian Basin from Element Petroleum, LP and CrownRock, LP for a combined $220 million in July 2012. The debt taken on from these acquisitions significantly increased BreitBurn's leverage profile. However, as demonstrated in the past, management is prone to issuing equity to support its growth, most recently completing an equity offering in September 2012 which brought in $204 million of cash. Moody's estimates BreitBurn's pro-forma leverage on production and PD reserves, post-acquisition and bond issuance, to be approximately $35,000/BOE and $5.7/BOE respectively. Their leverage on production is relatively high compared to other B1 peers; however, it is counter-balanced by a stable and predictable production profile that allows the company to hedge its forecasted production out many years, with over 75% hedged in both 2012 and 2013, and 65-70% for 2014 and 2015. Hedging provides stability of future cash flows and allows for reinvestment, distributions, debt service and capital raise requirements to be anticipated with more precision. The B3 rating on the proposed $200 million senior notes reflects both the overall probability of default of BreitBurn, to which Moody's assigns a PDR of B1, and a loss given default of LGD 5 (76%). The company has a $1.5 billion senior secured revolving credit facility with a borrowing base of $850 million. Post- offering, the borrowing base will be reduced to $800 million. BreitBurn also has $250 million of senior notes due 2022 and $305 million of senior notes due 2020. Both the new and existing senior notes are unsecured and therefore subordinated to the senior secured credit facility's potential priority claim to the company's assets. The size of the potential senior secured claims relative to the unsecured notes outstanding results in the senior notes being notched two ratings below the B1 CFR under Moody's Loss Given Default Methodology. The principal methodology used in rating BreitBurn was the Independent Exploration and Production (E&P) Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the US, Canada, and EMEA published in June 2009. BreitBurn Energy Partners L.P. is an independent exploration and production master limited partnership headquartered in Los Angeles, California. BREITBURN ENERGY: S&P Keeps 'B' Rating on Senior Unsecured Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services said the 'B' rating on BreitBurn Energy Partners' senior unsecured notes due 2022 would remain unchanged following the company's plan to add $200 million. This brings the total issue amount to $450 million. "The recovery rating on the note remains '5', indicating our expectation of modest (10% to 30%) recovery for lenders in the event of default. BreitBurn plans to use the proceeds to refinance borrowings under its credit facility," S&P said. The ratings on Los Angeles-based oil and gas property developer BreitBurn reflect S&P's assessment of the company's "vulnerable" business risk and "aggressive" financial risk. The ratings incorporate the company's relatively small asset base and production levels, some geographic concentration (about 50% of its total proved reserves are in Michigan), and modest organic growth prospects from its mature asset base. The ratings also take into account its acquisitive strategy as a master limited partnership (MLP) that focuses on maintaining its dividend and its relatively high cost structure compared with other exploration and production (E&P) companies. These risks are adequately mitigated at the rating level by a significant hedge book over the next few years that should help offset natural gas and oil price volatility, a large concentration of proved developed reserves in its asset base, long-lived reserves, and diversity between oil and gas. RATINGS LIST BreitBurn Energy Partners Corporate credit rating B+/Stable/-- $450 mil senior unsecured notes due 2022 B Recovery rating 5 CAPITOL BANCORP: Says ValStone Is Potential Equity Investor ----------------------------------------------------------- Rachel Feintzeig at Dow Jones' DBR Small Cap reports that ValStone Asset Management LLC is mulling a potential transaction with Capitol Bancorp Ltd., the Michigan bank-holding company that's hoping to emerge from bankruptcy protection next month. About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. A hearing will be held on Sept. 18, 2012, at 10:30 a.m. to consider confirmation of Capitol Bancorp's prepackaged Chapter 11 plan of reorganization. CASELLA WASTE: Moody's Affirms 'B3' CFR & Rates Sr. Notes 'Caa1' ---------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to the planned senior subordinated add-on notes of Casella Waste Systems, Inc., and affirmed the B3 corporate family and probability of default ratings. The actions were predicated on the success of the company's planned refinancing of a portion of its debt through capital markets transactions. The Caa2 rating for the company's existing subordinated notes and Caa1 rating for its Solid Waste Revenue bonds were affirmed, but Moody's noted that the ratings could each be raised, to Caa1 for the subordinated notes and B2 for the Solid Waste Revenue bonds, due to the potential for the proposed refinancing to reduce loss severity for those instruments in the event of default. No action was taken on the company's B3 rated second lien notes as the rating is anticipated to be withdrawn if the notes are redeemed as part of the planned refinancing. The rating outlook for Casella remains negative. RATINGS RATIONALE The B3 CFR rating is driven by Casella's below average EBITDA margin (about 20% for Casella per Moody's adjustments vs. 27% average for peers for the most latest twelve months), high leverage (over 6x on Moody's adjusted basis), regional concentration, and small size. The company has implemented a 100 basis point general and administrative cost savings plan. In addition, the company signed an agreement to sell its Maine Energy waste-to-fuel plant, thereby removing this cash flow draining asset and modestly improving overall margins. The planned sale of additional subordinated bonds (at net interest rates measurably lower than existing debt), new equity, and a revolver draw, will fund the tender of the second lien bonds as well as modestly reduce balance sheet leverage, improve interest coverage, and aid the company's efforts to approach break-even results. The Caa1 rating on the planned subordinated notes reflects their expected recovery in a default scenario following the refinancing of the structurally senior second lien bonds with subordinated notes. Moody's anticipates upgrading the rating on the outstanding subordinated notes to Caa1 and the rating on the Solid Waste Revenue bonds to B2, as well as withdrawing its rating on the second lien notes if the proposed refinancing is completed as expected. Successful closure of the planned capital markets transactions, completion of the sale of Maine Energy, and measurable margin improvement could result in a change in the outlook to stable over the next six months. In the short term, failure of the planned debt and equity transactions, and over the coming months, failure to improve operating performance and raise sufficient funds to retire the second lien bonds, could result in downward rating momentum. The company's revolver has an accelerated maturity date in March 2014 if the second lien bonds remain outstanding and refinancing initiatives could become more challenging in a weakening economic environment. Moody's notes the company has insufficient internally generated funds to repay revolver cash drawing ($84 million as of July 2012). The principal methodology used in rating Casella Waste Systems was the Solid Waste Management Industry Methodology published in Februrary 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. Casella, based in Rutland Vt., collects and disposes of municipal solid and construction waste, specialty waste primarily from energy drilling activities, and collects, processes and sells recyclable waste. Revenue for the twelve months ending July 2012 was $475 million. CONNACHER OIL: S&P Affirms 'B' Corp. Credit Rating; Outlook Neg. ---------------------------------------------------------------- Standard & Poor's Rating Services revised its outlook on Calgary, Alta.-based oil and gas producer Connacher Oil And Gas Ltd. to negative from stable. At the same time, Standard & Poor's affirmed its 'B' long-term corporate credit rating and 'BB-' issue-level debt ratings on the company's US$550 million and C$350 million second-lien debt. "The recovery rating on the two debt issues is unchanged at '1', which indicates our expectation of very high (90%-100%) recovery under our simulated default scenario," S&P said. "Standard & Poor's acknowledges that Connacher's liquidity position has strengthened materially as a result of the sale of its conventional oil and gas assets and Montana-based 9,500 barrel-per-day refinery. We believe net proceeds, pro forma availability under its revolving credit facility, and forecast funds from operations (FFO) should be sufficient to fund the company's expected spending through year-end 2013," S&P said. "Despite the improved liquidity, the outlook revision reflects our view that Connacher's existing operations are not able to generate sufficient FFO to internally fund its minimum required maintenance capital," said Standard & Poor's credit analyst Michelle Dathorne. "In our opinion, the company will need to secure external funding, ideally through the completion of its strategic review process, to ensure the ongoing viability of its existing operations as well as continue developing its Great Divide oil sands properties," Ms. Dathorne added. "The ratings on Connacher reflect Standard & Poor's views of the company's high full-cycle cost structure, weak expected FFO generation, and highly leveraged balance sheet. In our view, these factors hamper the company's ability to fully realize the organic growth potential inherent in its large oil sands resource base. We believe that somewhat mitigating these weaknesses are Connacher's large oil sands resource base, the good visibility to long-term drill-bit-related production growth, and the potential for strong operating cash flows if the company achieves better economies of scale, which we believe is possible with a larger production base," S&P said. "Pro forma its announced asset sales, Connacher's business operations will focus solely on the development of its steam- assisted gravity drainage (SAGD) properties. The company's assets now consist of its wholly owned in-situ bitumen resources in northeast Alberta," S&P said. "The negative outlook reflects our opinion that Connacher's internal cash flow generation is not sufficient to sustain its current operations. Without the liquidity enhancement from the sale of its conventional oil and gas assets and refinery (announced in third-quarter 2012), we do not believe the company would be able to fully fund its ongoing financing and maintenance capital spending requirements. Although we believe Connacher's cash resources, pro forma the asset sales, should allow the company to fund its announced capital spending through year-end 2013, its liquidity position will begin to deteriorate within the next 12 months if it cannot secure external equity funding to sustain its current operations and continue expanding its multiphase steam-assisted gravity drainage project. We believe the liquidity position will deteriorate more rapidly in the second half of 2013, if the company cannot find a joint venture partner or purchaser before this time. As a result, we would lower the ratings in 2013. Given Connacher's cash flow profile relative to its financing and maintenance capital spending requirements, a positive rating action will not occur without a transformative transaction occurring during our forecast period," S&P said. CONSOLIDATION SERVICES: Leland Value in Q3 2011 Form 10-Q Revised ----------------------------------------------------------------- Consolidation Services, Inc., has restated its quarterly report on Form 10-Q for the three and nine months ended Sept. 30, 2011, to properly reflect the valuation of the acquisition of the Leland partnerships based upon an oil and gas reserve valuation of $4.3 million. The acquisition of the Leland partnerships were originally recorded on April 2, 2010, at a valuation of $15,267,204 based on the fair value of the common stock consideration and goodwill was recorded for $10,912,035 in connection with the acquisition. Immediately following the acquisition, the Company recorded an impairment of the goodwill. The consolidated financial statements have been restated for all periods from the date of acquisition to Sept. 30, 2011, to eliminate the initial valuation and subsequent impairment of goodwill. The consolidated financial statements have also been restated to reflect additional accrued compensation of the Company's Chief Executive Officer for the three and nine months ended Sept. 30, 2011 of $45,000 and $135,000, respectively. The consolidated financial statements have also been restated for Sept. 30, 2010, to reflect the adjustment to depreciation, depletion, and amortization that was previously recorded for the excess valuation of properties at $98,740 and reduced to $50,986. The consolidated financial statements have also been restated to reflect the authorization of preferred stock which none has been issued or outstanding as of Sept. 30, 2011. The consolidated financial statements have also been restated for the period ended Sept. 30, 2011, in response to comments received from Securities and Exchange Commission to furnish predecessor financial statements of the combined Leland partnerships (the "Predecessor"), in accordance with Regulation S-X 8-02 by including financial statements of the Predecessor for the period from Jan. 1, 2010, through April 1, 2010, and the period from April 2, 2010, through Sept. 30, 2010. The total effect of the adjustments described above for the three and nine months ended Sept. 30, 2011, was an increase in the net loss of $45,000 and $135,000, respectively, an increase in total liabilities of $135,000, a decrease in additional paid in capital of $10,912,035 and a decrease in accumulated deficit of $10,777,035. The Company reported a net loss of $159,307 on $74,846 of oil and gas revenues for the three months ended Sept. 30, 2011, compared with a net loss of $492,224 on $70,861 of oil and gas revenues for the same period ended Sept. 30, 2010. For the nine months ended Sept. 30, 2011, the Company had a net loss of $1.1 million on $239,973 of oil and gas revenues, compared with a net loss of $2.1 million on $137,836 of oil and gas revenues for the same period ended Sept. 30, 2010. The Company's balance sheet at Sept. 30, 2011, showed $5.2 million in total assets, $540,764 in total liabilities, and stockholders' equity of $4.7 million. The Company sustained losses from operations for the nine months ended Sept. 30, 2011, of $1.1 million. Further, the Company has inadequate working capital to maintain or develop its operations, and is dependent upon funds from lenders, investors and the support of certain stockholders. "These factors raise substantial doubt about the ability of the Company to continue as a going concern." A copy of the Form 10-Q/A is available at http://is.gd/UedD8a Las Vegas, Nev.-based Consolidation Services, Inc., is engaged in the acquisition, development and exploitation of domestic natural resources including mining and timber. The Company's current operations consist of owning and operating oil and gas properties in Kentucky and Tennessee. CROSS BORDER: Had $475,200 Net Income in Second Quarter ------------------------------------------------------- Cross Border Resources, Inc., filed its quarterly report on Form 10-Q, reporting net income of $475,252 on $4.1 million of total revenues and gains for the three months ended June 30, 2012, compared with a net loss of $66,597 on $1.5 million of total revenues and gains for the same period last year. "During the 2012 Quarter, we recognized a gain of $1.44 million, which represents the combination of $72,282 in net realized hedge settlements received for the difference between the hedged price and the market price in closed months, and $1.37 million non-cash mark to market gain on the remaining term of our crude oil fixed price swaps. This compares with a 2011 Quarter gain of $75,857, which included net realized hedge settlements paid of $727 for the difference between the hedged price and the market price." For the six months ended June 30, 2012, the Company had net income of $1.2 million on $7.8 million of total revenues and gains, compared with a net loss of $221,513 on $3.1 million of total revenues and gains for the same period of 2011. "During the YTD 2012 period, we recognized a gain of $961,911, which is the combination of $20,866 of net realized hedge settlements received for the difference between the hedged price and the market price in closed months, and a $941,045 non-cash mark to market gain on the remaining term of our crude oil fixed price swaps. This compares with a YTD 2011 gain of $106,123, which is net of included realized hedge settlements paid for the difference between the hedged price and the market price of $727." The Company's balance sheet at June 30, 2012, showed $37.4 million in total assets, $18.3 million in total liabilities, and stockholders' equity of $19.1 million. According to the regulatory filing, at June 30, 2012, the Company had a working capital deficit of $2,352,063 and outstanding debt of $12,240,408. Because of the working capital deficit, the Company was not in compliance with the covenants of its line of credit with Texas Capital Bank. On Aug. 22, 2012, TCB agreed to a waiver of the covenant violations for a period of one year. Of the outstanding debt, $367,309 is due Sept. 30, 2012, under an unsecured promissory note payable to Green Shoe Investments, Ltd, and $396,969 is due Sept. 30, 2012, under an unsecured promissory note payable to Little Bay Consulting, SA. "The Company currently does not have sufficient funds to repay these obligations. The Company is exploring available financing options, including the sale of debt, equity, or assets. The Company sold its Wolfberry assets for $2,250,000. The closing date of the sale was Aug. 16, 2012. If the Company is unable to finance its operations on acceptable terms or at all, its business, financial condition and results of operations may be materially and adversely affected. As a result of the working capital deficiency, there is substantial doubt regarding the Company's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/d7HRB1 Dallas, Tex.-based Cross Border Resources, Inc., is an independent natural gas and oil company engaged in the exploration, development, exploitation, and acquisition of natural gas and oil reserves in North America. The Company's primary area of focus is the State of New Mexico, particularly southeastern New Mexico. DELTEK INC: S&P Lowers CCR to 'B' on LBO; Outlook Stable -------------------------------------------------------- Standard & Poor's Ratings Services removed the ratings on Herndon, Va.-based Deltek Inc. from CreditWatch with negative implications, and lowered its corporate credit rating to 'B' from 'BB-'. "We placed the ratings on CreditWatch on Aug. 28, 2012. The outlook is stable," S&P said. "The downgrade reflects less favorable financial metrics, including a decrease in projected free cash flow and an increase to June 30, 2012 leverage to around 9x pro forma (adjusted for operating leases, but excluding potential cost synergies) for the prospective LBO, which will add about $500 million of incremental debt to the company's capital structure," S&P said. "At the same time, we assigned our 'B+' issue-level rating and '2' recovery rating to the company's proposed $455 million first-lien credit facility, consisting of a $425 million term loan and a $30 million revolving credit facility. The '2' recovery rating indicates our expectations for substantial (70%-90%) recovery for lenders in the event of a payment default. We also assigned our 'CCC+' issue-level rating and '6' recovery rating to the company's proposed $225 million second-lien term loan. The '6' recovery rating indicates our expectations for negligible (0%-10%) recovery for lenders in the event of a payment default," S&P said. "Ratings will be subject to final review of loan and equity term sheet documentation. We expect the existing debt to be refinanced completely through a combination of new debt proceeds and new sponsor equity. We will withdraw the ratings on the existing debt once the proposed transaction funds and closes," S&P said. The ratings on Deltek reflect the company's "weak" business risk profile and "highly leveraged" financial risk profile. The business risk incorporates the company's meaningful position in the Project and Portfolio Management (PPM) software market and improved product, vertical, and geographic diversity, but also its limited scale and modest position in the overall enterprise resource planning (ERP) market, stiff competition from larger players, and potential for the company's core end markets to experience low growth over the near term. "The financial risk profile is distinguished by its very high leverage and diminished cash flow generation following the LBO," said Standard & Poor's credit analyst Alfred Bonfantini. "Our near-term ratings assumptions include: low- to mid-single-digit revenue growth, led by the Information Solutions segment and certain segments of the professionals services space, and recurring maintenance revenue; EBITDA margins improving to the mid-20% area because of realized synergies and cost reductions; and leverage declining to the high-7x area by fiscal year-end 2012 and just under 7x by the end of 2013," S&P said. "The outlook is stable. We believe that the company's largely recurring revenue base, enhanced product and end market diversification, and improved margins will provide for consistent revenue growth and cash flows and allow the company to de-leverage somewhat over the near term. An upgrade is unlikely over the near term given very high initial leverage levels and the modest expected improvement in financial metrics over the coming year," S&P said. "We could lower the rating over the next year if a weakening in revenue and EBITDA margins (below 20%) occurs because of contraction in the company's European end markets and sharp declines in the GovCon space due to large-scale budget cuts, and causes leverage to be sustained above 8.5x," S&P said. DEWEY & LEBOEUF: Ex-Partners' $71M Clawback Deal Remains in Limbo ----------------------------------------------------------------- Bankruptcy Law360 reports that a bankruptcy judge held a hearing Thursday but adjourned for the day without ruling whether to grant Dewey & LeBoeuf's Aug. 29 motion seeking approval for a proposed partnership contribution plan, or PCP. Megan Leonhardt at Bankruptcy Law360 reports that Judge Martin Glenn again on Friday kept Dewey & LeBoeuf attorneys formerly with the firm and creditors in suspense after he held off approving or rejecting a proposed $71.5 million clawback deal with onetime partners. Judge Glenn took the issue of approval on the proposed partner contribution plan under submission after nearly seven hours of arguments by the plan's supporters and objectors, according to Bankruptcy Law360. 444 Settling Partners As reported in the Sept. 21, 2012 edition of the TCR, Dewey & Leboeuf filed with the Court a schedule of the 444 ex-partners of the defunct firm who agreed to return money to avoid litigation. To recall, Dewey & Leboeuf at the end of August filed with the U.S. Bankruptcy Court for the Southern District of New York a motion seeking approval of a $71.5 million settlement with former attorneys of the Debtor that would shield former attorneys from potential clawback litigation. The settlements represent about 80% of the $89 million the firm was seeking to recover from all former partners. A copy of the schedule of the 444 participating partners and their respective partner contribution amounts is available for free at: http://bankrupt.com/misc/dewey.doc497-1.pdf About Dewey & LeBoeuf New York-based law firm Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf was formed by the 2007 merger of Dewey Ballantine LLP and LeBoeuf, Lamb, Greene & MacRae LLP. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. DICKINSON THEATRES: Files for Chapter 11 Bankruptcy Protection -------------------------------------------------------------- Paul Koepp at Kansas City Business Journal reports Dickinson Theatres Inc. has filed for Chapter 11 bankruptcy in an attempt to reorganize, and plans to close at least four locations, including its Blue Springs 8 Theatre. The report says the Company disclosed assets of about $2.2 million and liabilities of more than $7.6 million. Secured claims amount to a little more than $5 million, including $2.2 million in mortgages with Lee's Summit-based First Community Bank. The filing says Dickinson had gross income of $38.3 million during the year that ended May 31. It also indicates the Company has been undergoing an income tax audit by the Internal Revenue Service. "This is an unfortunate but necessary step driven by the general economy and movie industry trends," the report quotes Paul Hoffmann, Esq., of Stinson Morrison Hecker LLP, who represents the company in its bankruptcy, as saying. He said the company hopes to have its reorganization plan confirmed by the bankruptcy court by Thanksgiving. Dickinson Theatres Inc. has 210 screens in 18 locations throughout seven states. Six theaters are in the Kansas City area. DIGITAL DOMAIN: Brown Rudnick, Sullivan Hazeltine Represent Panel ----------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, last week appointed a three-member official committee of unsecured creditors in the Chapter 11 case of Digital Domain Media Group, Inc., and its debtor-affiliates. The notice of appointment was dated Sept. 18, just three days ahead of a scheduled auction of the Debtor's assets and six days prior to the Sept. 24 court hearing to consider approval of the sale. The Committee members are: 1. Minh-Tam Frye 1986 SW GRanello Terr. Port St. Lucie, FL 34953 Tel: 772-267-1813 2. Straticon, LLC Attn: John Colmar PO Box 588 Richland, MI 49083 Tel: 269-629-5936 Fax: 269-629-3134 3. Leighton Security Management, Inc. Attn: Stephen G. Leighton PO Box 308 Stuart, FL 34995 Tel: 772-220-9400 The Committee has tapped as bankruptcy counsel: William D. Sullivan, Esq. Seth S. Brostoff, Esq. SULLIVAN HAZELTINE ALLINSON LLC 901 North Market Street, Suite 1300 Wilmington, DE 19801 Tel: (302) 428-8191 Fax: (302) 428-8195 - and - H. Jeffrey Schwartz, Esq. Bennett S. Silverberg BROWN RUDNICK LLP Seven Times Square New York, NY 10036 Telephone: (212) 209-4800 E-mail: jschwartz@brownrudnick.com Bsilverberg@brownrudnick.com 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. An official committee of unsecured creditors has been appointed in the case. DIGITAL DOMAIN: Beijing Galloping & Reliance Submit Winning Bid --------------------------------------------------------------- Digital Domain Media Group, Inc. disclosed that a joint venture, led by Galloping Horse America, LLC, in partnership with Reliance MediaWorks (USA), Inc., submitted the winning bid to acquire the visual effects, Mothership Media and certain other businesses and assets of Digital Domain Productions, Inc. and subsidiaries for $30.2 million at a Sept. 21, 2012 auction in New York. The sale is subject to execution of an asset purchase agreement and Bankruptcy Court approval, the hearing for which is currently scheduled for Sept. 24, 2012. Galloping Horse-Reliance will acquire all assets constituting the businesses of Digital Domain and Mothership -- feature film and advertising visual effects, commercial production and virtual humans, studios in California and Vancouver, BC, Canada and a co- production stake in the feature film Ender's Game. Pursuant to section 363 of the Bankruptcy Code, Galloping Horse - Reliance will acquire these assets free and clear of all claims and encumbrances, with the proceeds going to the bankruptcy estate. The businesses will continue to operate in the normal course of business, with the joint venture assuming ownership upon Court approval. Ivy Zhong, vice chairman and managing director of Beijing Galloping Horse Film Co., Ltd., said, "Digital Domain is a legend in the industry, known for its world-class quality of work and creative talent. We are thrilled to have found a partner in Reliance MediaWorks that is as committed as we are to ensuring Digital Domain's continued excellence and success." Venkatesh Roddam, chief executive officer, Film & Media Services, Reliance MediaWorks, said, "We have had a wonderful working relationship with Digital Domain over the years and we could not be happier to take it further through the joint Galloping Horse - Reliance acquisition. We are looking forward to working with Digital Domain employees and customers to make the operation better and stronger." Beijing Galloping Horse and Reliance MediaWorks have a combined enterprise value of more than $25 billion, complementary offerings and presence in multiple worldwide geographies strategic to the entertainment industry. Galloping Horse--Reliance gives Digital Domain, a multi-Academy Award(R)-winning digital production studio long established as a pioneer in high-quality visual effects, strong infrastructure and significant financial support. Galloping Horse America holds a 70% stake with Reliance MediaWorks holding a 30% stake in the Digital Domain joint venture. China eCapital served as the exclusive financial advisor to Galloping Horse and its affiliated parties in this transaction. "This is a great day for Digital Domain," said Digital Domain Chief Executive Officer Ed Ulbrich. "Our new partners have incredible strength and reach in the global entertainment marketplace. They are powerful strategic partners that understand our business and our clients' business. Their support enables us to continue creating the highest quality entertainment and advertising and puts us in the strongest financial position that Digital Domain has ever been in. We are grateful to all of the bidders and couldn't be more pleased with this outcome." As previously disclosed, Searchlight Capital Partners had submitted a stalking horse bid for the Digital Domain and Mothership assets in the amount of $15 million. Under the Bankruptcy Code DDMG was required to engage in the process of seeking the highest and best bid for these assets in accordance with the bid procedures approved by the Court. "We are so pleased that the visual effects businesses will be continued under the strong financial and strategic ownership of Galloping Horse and Reliance. This represents a wonderful outcome for the business, its studio and advertiser customers and partners and valued employees, and for the Digital Domain Chapter 11 estate. Many are to be thanked for their incredible efforts to achieve this milestone," said Mike Katzenstein, DDMG, Chief Restructuring Officer. "I would also like to recognize Searchlight Capital for agreeing to be the stalking horse bidder in the auction. I am certain that their commitment to the company under the most urgent of circumstances, helped save the business and allowed for the robust auction that led to this result." $21.7 Million Hike in Price Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Digital Domain Media Group Inc. conducted an auction and saw the purchase price for its assets increase to $36.7 million from the opening bid of $15 million by the conclusion of the auction at midnight on Sept. 21. According to the report, the winning bidder for the provider of visual effects for the movie industry was a joint venture between Galloping Horse America LLC, an affiliate of Beijing Galloping Horse Co., and an affiliate of Reliance Capital Ltd., based in Mumbai. The bid included $3.6 million to cure defaults on contracts and $2.9 million in reimbursement of payroll costs. The official creditors' committee supports the sale, although the panel said in a bankruptcy court filing that the price might have been higher had there been more time to market the business. The committee said there were "some moments of disarray" in the auction. Ultimately, the price was fair, the committee said, given the "extraordinary circumstances." There was a hearing scheduled Sept. 24 in U.S. Bankruptcy Court in Delaware for approval of the sale. The report notes the original $15 million bid was from Searchlight Capital Partners LP. Searchlight participated in the auction along with four other bidders, according to a court filing. According to Dow Jones' Daily Bankruptcy Review, Digital Domain intends to close the deal by the end of the week. About Mothership Media Mothership is a force of talented directors who create advertising, entertainment and brand experiences. The company takes projects from start to finish using whatever approach works best for the story being told, from live action to full-scale digital production and anything in between. A subsidiary of Digital Domain, Mothership has all of the resources, artists and technologists of the legendary digital powerhouse at our fingertips, so its directors can create whatever they envision; from TV commercials to video game marketing to integrated campaigns that roll out across platforms and virtual performers. About Beijing Galloping Beijing Galloping Horse Film Co., Ltd. is a leading company in the film and TV industry in China. With nearly 20 years of industry experience, Galloping Horse is actively engaged in film and television financing, production, distribution, as well as advertising and magazine publishing. Recently, it has added cinema construction, new media and animated content production, as well as talent management into its growing business portfolio. Galloping Horse has earned itself a high reputation in the Chinese media industry by producing contents that are both critically acclaimed and commercially successful. The company has signed exclusive deals with some of the most prominent producers, directors and writers in China, including John Woo (first look), Zhang Yibai, Ning Hao, Liu Heng, Lu Wei, etc. This strategy gives Galloping Horse a competitive advantage over other players. About Reliance MediaWorks Reliance MediaWorks Limited is a film and entertainment services company and a member of the Reliance Group. 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. DVORKIN HOLDINGS: Court Okays Springer Brown as Counsel ------------------------------------------------------- Dvorkin Holdings, LLC, obtained approval from the U.S. Bankruptcy Court to employ Michael J. Davis and the firm of Springer, Brown, Covey, Gaertner & Davis LLC as its attorneys. Springer Brown will: 1. consult with the Debtor concerning its powers and duties as debtor in possession, the continued operation of its business and the Debtor's management of the financial and legal affairs of its estate; 2. consult with the Debtor and with other professionals concerning the negotiation, formulation, preparation, and prosecution of a Chapter 11 plan and disclosure statement; 3. confer and negotiate with the Debtor's creditors, other parties in interest, and their respective attorneys and other professionals concerning the Debtor's financial affairs and property, Chapter 11 plans, claims, liens, and other aspects of the case; 4. appear in court on behalf of the Debtor when required, and will prepare, file and serve such applications, motions, complaints, notices, orders, reports, and other documents and pleadings as may be necessary in connection with this case; and 5. provide the Debtor other services as it may request and which may be necessary in the circumstances. The individuals presently designated to represent the Debtor and their hourly rates are: Professional Hourly Rate ------------ ----------- Michael J. Davis, Esq. $375 Thomas E. Springer, Esq. $375 Elizabeth A. Bates, Esq. $375 Joshua D. Greene, Exq. $285 Springer Brown has received a $50,000 retainer for services in connection with the Debtor's Chapter 11 case prior to the filing of the case. To the best of the Debtor's knowledge, information and belief, the attorneys at Springer Brown are "disinterested persons" within the meaning of 11 U.S.C. Section 101(14) of the Bankruptcy Code. About Dvorkin Holdings Dvorkin Holdings, LLC, a holding company that has interests in 40 non-debtor entities, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-31336) in Chicago on Aug. 7, 2012. The Debtor estimated assets of at least $10 million and debts of up to $10 million. Bankruptcy Judge Jack B. Schmetterer oversees the case. Michael J. Davis, Esq., at Springer, Brown, Covey, Gaetner & Davis, in Wheaton, Illinois, serves as counsel. The petition was signed by Loran Eatman, vice president of DH-EK Management Corp. DVORKIN HOLDINGS: FirstMerit Seeks Chapter 11 Trustee ----------------------------------------------------- FirstMerit Bank, N.A., late last month filed a motion asking the U.S. Bankruptcy Court to order the appointment of a chapter 11 trustee in the bankruptcy case of Dvorkin Holdings, LLC. According to FirstMerit Bank, the Debtor's statement of financial affairs makes clear the Debtor's assets have been misappropriated to members of the Dvorkin family. Section 7 of the SOFA lists four separate gifts having been made to members of the Dvorkin family in 2011 and 2012 in the aggregate sum of $35,139. FirstMerit supports and joins in the motion of Stephen G. Wolfe, of the Office of the U.S. Trustee, for a Chapter 11 trustee to take over the Debtor's estates. The U.S. Trustee filed the motion Aug. 24. In its own Motion, First Merit said there are substantial reasons to believe that neither the Debtor nor the Debtor's manager is able to fulfill their fiduciary duties to FirstMerit or the other creditors of the estate. The primary reason, according to FirstMerit, is the ongoing ownership interest and control of the Debtor and the Debtor's Manager by members of the Dvorkin family. This continuing interest and control of the Dvorkins in the Debtor and its manager raises serious questions as to whether the Debtor or its Manager are able to fulfill duties to the estate or its creditors, according to the bank. FirstMerit is represented by: Forrest B. Lammiman, Esq. David L. Kane, Esq. Steven R. Rogovin, Esq. MELTZER, PURTILL & STELLE LLC 300 Sotuh Wacker Drive, Suite 3500 Chicago, IL 60606 Tel: (312) 987-9900 Fax: (312) 987-9854 About Dvorkin Holdings Dvorkin Holdings, LLC, a holding company that has interests in 40 non-debtor entities, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-31336) in Chicago on Aug. 7, 2012. The Debtor estimated assets of at least $10 million and debts of up to $10 million. Bankruptcy Judge Jack B. Schmetterer oversees the case. Michael J. Davis, Esq., at Springer, Brown, Covey, Gaetner & Davis, in Wheaton, Illinois, serves as counsel. The petition was signed by Loran Eatman, vice president of DH-EK Management Corp. EDIETS.COM INC: Leases Pompano Beach, Florida Office Space ---------------------------------------------------------- eDiets.com, Inc., entered into a Lease Agreement with 555 Andrews LLC, on Sept. 18, 2012, under which the Company leased 8,777 square feet of office space for a period of one year for use as its principal executive offices. The Premises are located at 555 SW 12th Avenue, Suite 210, in Pompano Beach, Florida. A copy of the Lease Agreement is available for free at http://is.gd/YnSBDH About eDiets eDiets.com, Inc. is a leading provider of personalized nutrition, fitness and weight-loss programs. eDiets currently features its award-winning, fresh-prepared diet meal delivery service as one of the more than 20 popular diet plans sold directly to members on its flagship site, http://www.eDiets.com Following the 2011 results, Ernst & Young LLP, in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses, was not able to meet its debt obligations in the current year and has a working capital deficiency. The Company's balance sheet at June 30, 2012, showed $1.99 million in total assets, $4.26 million in total liabilities, all current, and a $2.26 million total stockholders' deficit. Bankruptcy Warning On Aug. 10, 2012, the Company entered into a letter of intent with As Seen On TV, Inc., a direct response marketing company, whereby ASTV agreed to acquire all of the Company's outstanding shares of common stock in exchange for 16,185,392 newly issued shares of ASTV common stock, representing an acquisition price of approximately $0.80 per share of the Company's common stock. Under the Letter of Intent, all of the Company's other outstanding securities exercisable or exchangeable for, or convertible into, the Company's capital stock would be deemed converted into, and exchanged for securities of ASTV on an as converted basis immediately prior to the record date of the acquisition. Both before and after consummation of the transactions described in the Letter of Intent, and if those transactions are never consummated, the continuation of the Company's business is dependent upon raising additional financial support. "In light of our results of operations, management has and intends to continue to evaluate various possibilities to the extent these possibilities do not conflict with our obligations under the Letter of Intent," the Company said in its quarterly report for the period ended June 30, 2012. "These possibilities include: raising additional capital through the issuance of common or preferred stock, securities convertible into common stock, or secured or unsecured debt, selling one or more lines of business, or all or a portion of the our assets, entering into a business combination, reducing or eliminating operations, liquidating assets, or seeking relief through a filing under the U.S. Bankruptcy Code." ELPIDA MEMORY: Asks for Retroactive Approval of $192MM Loan ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Japan's Elpida Memory Inc. wants the U.S. Bankruptcy Court in Delaware to give retroactive approval of a JPY15 billion ($192.6 million) loan that was made in April and secured in part with assets belonging to affiliates located in the U.S. According to the report, U.S.-based bondholders filed their own papers on Sept. 19 asking the bankruptcy judge in Delaware to set up a formal process enhancing the flow of information from Japan to the U.S. Two days later, Elpida filed its papers seeking approval for the loan. In papers filed Sept. 21, Elpida explained how the Tokyo-based company needed financing to conduct the reorganization begun in Japan in February. Elpida said all potential lenders required liens on assets located in the U.S., including assets belonging to Elpida Memory (USA), Inc. The report relates that Elpida scheduled an Oct. 24 hearing in bankruptcy court for approval of the lien on U.S. assets. On Sept. 19, U.S. bondholders filed papers asking the bankruptcy court on an emergency basis to appoint a court representative to remedy the "present inadequacy of the information flow" from Elpida's principal bankruptcy court in Japan. The day before, the bondholders won a partial victory when the bankruptcy judge in Delaware ruled that Elpida can't sell or transfer U.S. assets outside of the ordinary course of business without giving 21 days' notice to the bondholders. The bondholders said in last week's court filing that the "lack of information has at times been glaring." Elpida contends there is no emergency requiring an expedited hearing on providing information from Japan. The Bloomberg report discloses that the bondholders' activities in the U.S. court follow opposition to Elpida's sale to Micron Technology Inc. The bondholders argued in an August court filing that the proposed sale to Boise, Idaho-based Micron for an estimated $1.8 billion at present value is for substantially less than Elpida's liquidation value. The ad hoc bondholder group is composed of Linden Advisors LP, LIM Advisors, Owl Creek Asset Management LP, and Taconic Capital Advisors LP. Elpida's filing in Japan was that country's largest in two years. Peg Brickley at Dow Jones' Daily Bankruptcy Review reports that Elpida Memory revealed that it pledged all its U.S. assets as security for a $190 million bankruptcy loan approved as part of its restructuring in Japan. About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. After semiconductor prices plunged, Japan's largest maker of DRAM chips filed for bankruptcy in February with liabilities of 448 billion yen ($5.6 billion) after losing money for five quarters. Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed for corporate reorganization proceedings in Tokyo District Court on Feb. 27, 2012. The Tokyo District Court immediately rendered a temporary restraining order to restrain creditors from demanding repayment of debt or exercising their rights with respect to the company's assets absent prior court order. Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo Court as Supervisor and Examiner in the case. Elpida Memory Inc. sought the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Yuko Sakamoto, as foreign representative, filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10947) for Elpida on March 19, 2012. EXECUTIVE CENTER: Platinum Courtyard Seeks to Foreclose ------------------------------------------------------- Platinum Courtyard LLC, as secured creditor, asks the Bankruptcy Court for relief from automatic stay to take possession of real estate property from Executive Center of Simi Valley LLC. Platinum Properties is the holder of a loan, originally made by Washington Mutual Bank to the Debtor on Aug. 8, 2008. The loan is secured by real estate property in Agoura Hills, Calif., with two office buildings. The loan matured on Sept. 1, 2011, and is all due and payable. Lewis R. Landau, Esq., at Dykema Gossett LLP, representing Platinum Courtyard, tells the Court that Platinum Courtyard's interest in the collateral is not protected by an adequate equity cushion. Mr. Landau contends the fair market value of the Property is declining and payments are not being made to Movant sufficient to protect Movant's interest against that decline. The total claim as of Aug. 1, 2012, is $14.02 million. The Debtor has no equity in the Property and it is not necessary to an effective reorganization. Executive Center of Simi Valley LLC, which operates the Agoura Hills Corporate Center, filed for Chapter 11 (Bankr. C.D. Calif. Case No. 12-11527) on Feb. 16, 2012. Judge Victoria S. Kaufman presides over the case. Janet A. Lawson, Esq., in Ventura, California, serves as the Debtor's counsel. The Debtor scheduled $29,576,254 in assets and $19,093,382 in debts. The petition was signed by Arnold A. Klein, managing partner. FRONTIER COMMS: Note Offering Has No Impact on 'Ba2' CFR - Moody's ------------------------------------------------------------------ Moody's Investors Service said the Ba2 corporate family rating of Frontier Communications Corporation is unchanged following the company's proposed note offering to increase the size of its recently launched $600 million 7.125% senior unsecured notes due 2023 to $800 million. The instrument ratings on the company's senior unsecured notes also remain unchanged at Ba2 (LGD4-56%). The additional proceeds will be used to redeem existing debt and for general corporate purposes. RATINGS RATIONALE The principal methodology used in rating Frontier Communications was the Global Telecommunications Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. FRONTIER COMMS: S&P Says 'BB' Rating on Senior Notes Is Unchanged ----------------------------------------------------------------- Standard & Poor's Ratings Services said its issue-level rating on Stamford, Conn.-based incumbent telephone company Frontier Communications Corp.'s 7.125% senior notes due 2023 is unchanged. The company is proposing to tack $200 million onto its existing $600 million senior notes, for an aggregate of $800 million. The issue-level rating is 'BB' and the recovery rating is '3', which indicates expectations for meaningful (50% to 70%) recovery in the event of payment default. The company intends to use proceeds from the notes to repay existing debt. "The 'BB' corporate credit on Frontier is unchanged and the outlook is negative. The rating reflects a 'weak' business risk profile and 'significant' financial risk profile. Key business risk factors include significant competitive pressures from wireless carriers and incumbent cable operators, the latter of which are bundling telephone with data and video services and are increasingly targeting smaller business customers. As a result, the company continues to lose high-margin voice access lines, which totaled 7.6% in the second quarter of 2012, year over year," S&P said. "Our 'significant' financial risk assessment is based on Frontier's leverage of about 3.7x as of June 30, 2012 and what we consider to be a shareholder-oriented financial policy. Despite some modest improvement in operating trends and the company's intentions to pay down some of its upcoming maturities with cash and free operating cash flow (FOCF), we believe that it will be difficult for Frontier to improve key credit measures over the next few years because of secular industry declines and lower subsidy revenue. Moreover, even though Frontier generates solid FOCF, over 55% is consumed by its common dividend. We could lower the ratings over the next year if operating and financial performance does not show meaningful improvement such that leverage declines to 3.5x by the end of 2012 and is on a trajectory to improve to 3x over the longer term," S&P said. RATINGS LIST Frontier Communications Corp. Corporate Credit Rating BB/Negative/-- $800 mil 7.125% senior nts due 2023 BB Recovery Rating 3 FRONTIER COMMS: Fitch Keeps 'BB+' Rating on $200MM Notes Offering ----------------------------------------------------------------- Fitch Ratings will maintain the 'BB+' rating on Frontier Communications Corporation's (Frontier) (NASDAQ: FTR) latest offering of $200 million of 7.125% senior unsecured notes due 2023. The notes are being issued as additional notes under the indenture governing its issuance of $600 million of 7.125% senior unsecured notes in August 2012, previously rated 'BB+'. Frontier will use the proceeds for debt reduction or general corporate purposes. Fitch's Issuer Default Rating (IDR) for Frontier is 'BB+'. The Rating Outlook is Stable. Frontier's 'BB+' IDR reflects the meaningful improvement in its credit profile following the acquisition of access lines in 14 states from Verizon on July 1, 2010. Frontier has articulated a long-term leverage target of approximately 2.5x. The company is still above this target, as gross debt-to-EBITDA for the last 12 months ending June 30, 2012 was 3.4x. In 2012, Fitch expects leverage to improve to 3.3x, pro forma for the repayment of a $523 million maturity in mid-January 2013. Fitch believes Frontier's 47% dividend reduction in February 2012 affirms management's commitment to improving its longer-term leverage metrics. The reduction is expected to save $348 million on an annual basis. Ongoing competitive pressures are also factored into the ratings of Frontier. Its operations are showing a slow and relatively stable rate of decline as a result of competitive pressures and technological substitution; the sluggish economy is also having an effect. The marketing of additional services -- including high- speed data -- as well as cost controls have been mitigating the effect of access line losses to cable operators and wireless providers. Recently announced regulatory reforms are not expected to have a significant impact on the company in the near term. Frontier has ample liquidity which is derived from its cash balances, its $750 million revolving credit facility, and, on a forward basis, free cash flow (FCF). At June 30, 2012, Frontier had $410 million in cash and an additional $106 million of restricted cash was available to fund certain capital expenditures. Over the last 12 months, FCF after dividends was approximately $98 million. FCF in the period was pressured by the timing of working capital needs due to the system conversion and broadband build-out as well as integration and accelerated broadband capital spending. As a result of the effect of the dividend reduction in 2012, Fitch expects FCF to improve materially, given the lower dividend will reduce dividend requirements by $348 million annually. Fitch expects 2012 FCF to be in a range of $360 million to $400 million after dividends and integration expenses. FCF expectations reflect Frontier's capital spending guidance of $725 million to $775 million plus integration capital spending of $40 million. Capital spending is expected to decline by $100 million in 2013 as the broadband expansion is completed. Liquidity is provided by a $750 million senior unsecured credit facility, which is in place until Jan. 1, 2014. The $750 million facility is available for general corporate purposes but may not be used to fund dividend payments. The main financial covenant in the revolving credit facility requires the maintenance of a net debt-to-EBITDA level of 4.5x or less during the entire period. Net debt is defined as total debt less cash exceeding $50 million. Frontier has $65 million of principal payments due in 2012, $581 million in 2013 and $258 million in 2014. Fitch expects the company to use cash balances and FCF to repay the 2013 and 2014 maturities. The company's $40 million unsecured letter of credit facility matures Sept. 20, 2013. The facility has no financial ratio covenants, and other negative covenants are similar to those in its revolving credit facility. A letter of credit was issued to the West Virginia Public Service Commission to guarantee capital expenditure commitments in the state with respect to the acquisition of the Verizon lines. What Could Trigger a Rating Action A positive rating action could occur if: -- Fitch does not expect a positive rating action to take place in the next 12 to 18 months. Longer-term leverage would need to be at or below 2.5x, the dividend payout would need to be below 55%, and revenues would have to demonstrate sustainable growth before a positive rating action would be considered. A negative rating action could occur if: -- The company's leverage metrics do not improve to 3.2x or below by year-end 2013 and if the company does not show continued progress in growing revenues from business and data services. GETTY PETROLEUM: ConocoPhillips Seeks Permission to Examine Sites ----------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that ConocoPhillips Co., as predecessor to a number of Getty Petroleum Marketing Inc.'s properties, asked a New York bankruptcy judge Thursday to allow it to conduct an investigation into the Debtor, citing concerns over the environmental condition of the sites. According to Bankruptcy Law360, the Company is asking U.S. Bankruptcy Judge Shelley C. Chapman for permission to conduct a Rule 2004 examination in relation to the 317 sites it transferred to GPMI in 2004, citing evidence that the debtor's indemnity obligations with respect to the sites has been breached. About Getty Petroleum A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing markets gasoline, hydraulic fluids, and lubricating oils through a network of gas stations owned and operated by franchise holders. A former subsidiary of Russian oil giant LUKOIL, the company operates in the Mid-Atlantic and Northeastern US states. Getty Petroleum Marketing's primary asset is the more than 800 gas stations in the Mid-Atlantic states which are located on properties owned by Getty Realty. After scaling back the company's operations to cut debt, in 2011 LUKOIL sold Getty Petroleum Marketing to investment firm Cambridge Petroleum Holding for an undisclosed price. Getty Petroleum and three affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on Dec. 5, 2011. Judge Shelley C. Chapman presides over the case. Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq., and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New York, N.Y., serve as the Debtors' counsel. Ross, Rosenthal & Company, LLP, serves as accountants for the Debtors. Getty Petroleum Marketing, Inc., disclosed $46.6 million in assets and $316.8 million in liabilities as of the Petition Date. The petition was signed by Bjorn Q. Aaserod, chief executive officer and chairman of the board. The Official Committee of Unsecured Creditors is represented by Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North America, LLC, serves as the Committee's financial advisors. GRACE BAPTIST: Case Summary & 7 Unsecured Creditors --------------------------------------------------- Debtor: The Grace Baptist Church of Cutler Ridge, Florida, Inc. dba Grace Baptist Church 19301 SW 127th Avenue Miami, FL 33177 Bankruptcy Case No.: 12-32462 Chapter 11 Petition Date: September 20, 2012 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: James H. Fierberg, Esq. RICE PUGATCH ROBINSON & SCHILLER, P.A. 101 NE 3 Avenue, #1800 Ft Lauderdale, FL 33301 Tel: (954) 462-8000 E-mail: ecf.fierberg@rprslaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 A copy of the Company's list of its seven unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb12-32462.pdf The petition was signed by Chester F. Mulligan, president/director. GRAY TELEVISION: S&P Affirms 'B' Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services assigned Gray Television Inc.'s proposed $40 million revolving credit facility due 2015 its 'BB-' issue-level rating with a recovery rating of '1', indicating its expectation of very high (90% to 100%) recovery for lenders in the event of a payment default. "At the same time, we assigned the proposed $625 million senior secured term loan B due 2019 our 'B' issue-level rating with a recovery rating of '3' (50% to 70% recovery expectation). The revolver is notched higher than the term loan B because it could have a first priority, first-out feature," S&P said. "We also assigned Gray Television Inc.'s proposed $250 million senior unsecured notes due 2020 our 'CCC+' issue-level rating with a recovery rating of '6' (0% to 10% recovery expectation)," S&P said. "The company plans to use the proceeds from the proposed notes and credit facility and cash balance ($28 million as of June 30, 2012) to refinance the company's existing debt (consisting of $365 million 10.5% senior secured second-lien notes due 2015 and a $460.6 million senior secured term loan B) and redeem the series D preferred stock ($22.6 million outstanding). As a result of the transaction, adjusted leverage will increase to 7.4x debt to last- 12-month EBITDA from 7.2x. We will withdraw our ratings on the existing debt when the transaction closes and that debt is repaid," S&P said. "In addition, we are affirming the 'B' corporate credit rating on Gray. The rating outlook is stable," S&P said. "Our ratings on Atlanta, Ga.-based TV broadcaster Gray reflect the company's high debt leverage and weak discretionary cash flow, both of which we expect will persist," said Standard & Poor's credit analyst Naveen Sarma. "The stable rating outlook reflects our expectation that Gray will maintain lease-adjusted debt to average trailing-eight-quarter EBITDA below 7.5x. Pro forma for the proposed transaction, leverage, on an average trailing-eight-quarter basis, will be 7x. We also expect the company to generate modest positive discretionary cash flow in 2012," S&P said. "Our rating on Gray also reflects our assessment of the company's business risk profile as 'fair' and its financial risk profile as 'highly leveraged,' based on our criteria. We view Gray's business risk profile as 'fair' because of its relatively good EBITDA margin compared with peers', despite a lack of adequate critical mass and its concentration in small-to-midsize TV markets. Factors in our assessment of Gray's financial risk profile as 'highly leveraged' include its weak EBITDA coverage of interest, high debt leverage, and minimal discretionary cash flow. The company's debt to average trailing-eight-quarter EBITDA of 7x and funds from operations to debt of 5.2%--both pro forma for the proposed transaction--are in line with Standard & Poor's financial risk indicative ratios of greater than 5x and less than 12% for a 'highly leveraged' financial risk profile," S&P said. GRAY TELEVISION: Moody's Raises CFR to 'B3' & Rates Notes 'Caa2' ---------------------------------------------------------------- Moody's Investors Service upgraded Gray Television, Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating (PDR) each to B3 from Caa1. Moody's also assigned a Caa2, LGD5 -- 87% rating to the proposed $250 million senior unsecured notes used to tender a portion of the existing 10.5% second lien notes. The upgrades reflect Moody's expectations for the company to benefit from strong political revenue demand through November 2012 resulting in improved credit metrics combined with management's commitment to reduce leverage. In addition, Moody's affirmed the SGL -- 2 Speculative Grade Liquidity (SGL) Rating and changed the outlook to stable from positive. Upgraded: Issuer: Gray Television, Inc. Corporate Family Rating: Upgraded to B3 from Caa1 Probability of Default Rating: Upgraded to B3 from Caa1 Assigned: Issuer: Gray Television, Inc. NEW $250 million Sr Unsecured Notes: Assigned Caa2, LGD5 -- 87% Affirmed: Issuer: Gray Television, Inc. existing $40 million 1st lien sr sec revolver: Affirmed B2, LGD2 -- 26% existing 1st lien sr sec term loan B ($460.6 million outstanding): Affirmed B2, LGD2 -- 26% Speculative Grade Liquidity (SGL) Rating: Affirmed SGL -- 2 Outlook Actions: Issuer: Gray Television, Inc. Outlook, Changed to Stable from Positive RATINGS RATIONALE Gray's B3 Corporate Family Rating reflects high leverage with a 2-year average debt-to-EBITDA ratio of 6.9x estimated for September 30, 2012 (including Moody's standard adjustments) and pro forma for the proposed refinancing. Although leverage remains high, the upgrade of the CFR was driven by improving debt-to- EBITDA ratios and the proposed refinancing which will extend at least a portion of 2014-2015 maturities and reduce annual interest expense. Gray continues to benefit from strong demand for political advertising during election years, most recently resulting in markedly higher EBITDA growth for the remainder of 2012 and 2-year average debt-to-EBITDA ratios estimated at 6.8x - 6.9x for FYE2012 compared to 7.6x at the end of 2011. Moody's expects leverage to improve to less than 6.5x over the next 12 to 18 months with 2-year average free cash flow-to-debt ratios of at least 3% - 4%. Ratings incorporate Moody's expectations that total revenues will decline in the low double-digit percentage range in 2013 due to the absence of significant political ad spending only partially offset by low single-digit growth in core ad revenues and expected increases in retransmission fees. Ratings are supported by Gray's longstanding track record for #1 and #2 ranked positions in 29 of 30 markets and good EBITDA margins (including Moody's standard adjustments) reflecting its top ranked local news programming that captures a significant share of market revenues, its relatively low syndicated program costs, and expected cash flow benefits from growing retransmission revenues (net of retrans sharing or reverse compensation). Gray's television stations and associated digital properties also benefit from its strategy of operating stations in university markets (17 collegiate markets) and/or state capitals (8 state capitals) which generally have more stable economies; however, Moody's believes the volatile nature of the company's earnings due to its relatively high level of political revenues increases risks related to unexpected changes in regulations governing political campaign spending. Moody's believes it is critical that Gray continue to focus on reducing debt balances including unfunded pension liabilities, especially during even numbered years, to achieve operating and financial flexibility as well as to absorb risks related to media fragmentation and reliance on political advertising. Ratings incorporate Moody's expectations for good liquidity. The stable outlook incorporates Moody's expectation that Gray will generate strong political revenue through the first half of November and that EBITDA for 2012 will increase at least 40% above 2011 levels resulting in 2-year average debt-to-EBITDA leverage of 6.9x or less (including Moody's standard adjustments) with further improvement over the rating horizon from expected stable demand for core, non-political advertising. The outlook incorporates Moody's view that the company will maintain good liquidity with the majority of free cash flow being applied to reduce debt balances. To the extent performance tracks management's plan through the end of 2013, the outlook includes the potential for dividends to be reinstated and funded from a portion of free cash flow. Ratings could be downgraded if operating performance falls below expectations or if debt financed acquisitions or shareholder distributions result in 2-year average debt-to-EBITDA ratios increasing above 7.0x. Deterioration in liquidity, including negative free cash flow or inability to refinance near term debt maturities, could also result in a downgrade. Ratings could be upgraded if Gray's core revenue and EBITDA continue to grow, supported by an improving economic environment, and free cash flow is applied to debt repayment resulting in 2-year average debt-to- EBITDA ratios being sustained below 6.0x (including Moody's standard adjustments) with expectations for further improvement. Gray would also need to maintain good liquidity, including free cash flow-to-debt ratios in the mid-single digit percentage range on a 2-year average basis. The principal methodology used in rating Gray Television 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. Gray Television, Inc., headquartered in Atlanta, GA, is a television broadcaster that owns 36 primary television stations serving 30 mid-sized markets plus 40 digital second channels. Network affiliations for primary stations include 17 CBS, 10 NBC, 8 ABC and 1 FOX station. The company operates stations ranked #1 or #2 in 29 of 30 markets. Gray is publicly traded and the shares are widely held with J. Mack Robinson or affiliates owning approximately 3.1% of common shares. The dual class equity structure provides J. Mack Robinson or affiliates with 39.4% of voting control. The company recorded total revenues of approximately $337 million for the 12 months ended June 30, 2012. GUAM POWER: Moody's Upgrades Sub. Revenue Bond Rating to 'Ba1' -------------------------------------------------------------- Moody's Investors Service has assigned a Baa3 rating to the 2012 Series A Bonds to be issued by the Guam Power Authority (GPA). At the same time, the ratings of the existing revenue bonds have been upgraded from Ba1 to Baa3, and the existing subordinate revenue bonds have been upgraded from Ba2 to Ba1. The rating outlook is stable. Issue: Revenue Bonds, 2012 Series A; Rating: Baa3; Sale Amount: $370,000,000; Expected Sale Date: 10/5/2012; Rating Description: Revenue: Government Enterprise SUMMARY RATING RATIONALE The rating of GPA's Revenue Bonds reflects its dominant market position as the sole provider of electricity to a diversified customer base comprising residential, business and government customers including both the Government of Guam as well as the U.S. Navy. The rating upgrade reflects improved financial performance, as measured by debt service coverage levels and liquidity held in the form of days cash on hand. The rating upgrade also reflects approval of multi-year rate increase requests and the signing of a new long term power supply contract with the U.S. Navy, GPA's largest customer. Outlook The rating outlook is stable, reflecting the certainty of rates over the next few years as well as GPA's improved operational profile. What could move the rating -- UP The rating could be upgraded if the financial profile materially improves and GPA's resource mix gains greater diversity. What could move the rating -- DOWN The rating could be downgraded if GPA's financial profile deteriorates such that debt service coverage, inclusive of all debt and lease obligations, falls below 1.1x on a consistent basis. The principal methodology used in this rating was U.S. Public Power Electric Utilities With Generation Ownership Exposure published in November 2011. H&M OIL: Exclusivity Ends Oct. 12 Absent Chapter 11 Plan -------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas extended to Oct. 12, 2012, H&M Oil & Gas, LLC, et al.'s exclusive period to file a plan of reorganization. If the Debtors file a plan of reorganization on or before Oct. 12, 2012, then the period under which only the Debtors may solicit votes on the plan and confirm the plan is extended to 60 days from filing of any such proposed plan. If the Debtors, however, either (i) fail to file a plan of reorganization by Oct. 12, 2012; or (ii) fail to confirm any proposed plan of reorganization within 60 days of filing such plan, than the exclusive periods terminate as to lender Prospect Capital Corporation, owed $88.8 million, without further order of the Court. About H&M Oil H&M Oil & Gas, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-32785) in its hometown Dallas on April 30, 2012. Another entity, Anglo-American Petroleum Corp. (Case No. 12-32786) simultaneously filed for Chapter 11. H&M Oil disclosed $297,119,773 in assets and $77,463,479 in liabilities as of the Chapter 11 filing. H&M Oil & Gas is an oil and gas production and development company. H&M, through its operating company, H&M Resources LLC, is focused on developing its leases in the Permian basin and Texas panhandle. Dallas, Texas-based Anglo-American Petroleum -- http://www.angloamericanpetroleum.com/-- is the holding corporation for H&M Oil. Judge Barbara J. Houser presides over the case. The Debtors are represented by Keith William Harvey, Esq., at Anderson Tobin PLLC, in Dallas. Lain Faulkner & Co., PC, serves as financial adviser. Prospect Capital Corporation, the Debtors' lone secured creditor, is represented in the case by Timothy A. Davidson II, Esq., and Joseph P. Rovira, Esq., at Andrews Kurth LLP. The U.S. Trustee has not appointed a creditors' committee. HARBORSIDE 17: Chapter 11 Case Dismissed Due to Lack of Insurance ----------------------------------------------------------------- The Hon. J. Rich Leonard of the Bankruptcy Court for the Eastern District of North Carolina has granted the motion of Bankruptcy Administrator Marjorie K. Lynch for dismissal of Harborside 17 Partners LLC's Chapter 11 case for failure to procure insurance coverage. Judge Leonard previously entered an Order commanding the Debtor to meet all the requirements of 11 U.S.C. Section 521 and Local Bankruptcy Rule 4002-1(b), as well as all reasonable demands of the Bankruptcy Administrator. The Court's order further states that failure to comply with the order may result in dismissal or conversion of the case. The Bankruptcy Administrator submits the Debtor does not have any property or general liability insurance on its property. This lack of insurance exposes the estate to potential losses should an unfortunate event occur. Orlando, Florida-based Harborside 17 Partners, LLC, filed a bare- bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04512) in Wilson, North Carolina on June 18, 2012. The Debtor owns a marina, clubhouse, and yacht club located on approximately 9.94 acres of land, located at 111-B Street, Bridgeton, North Carolina. According to the schedules, the property is worth $31.99 million and secures a $15.98 million debt. The Debtor also holds a 100% interest in Bridgeton Harbor Management, LLC. A copy of the schedules filed with the petition is available at http://bankrupt.com/misc/nceb12-04512.pdf Judge J. Rich Leonard presides over the case. Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A. Amy Bissette has been assigned as case manager. The petition was signed by Daniel R. Robison, manager of JUSA Management, LLC, manager. HEMCON MEDICAL: Court Approves Moss Adams as Accountants -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized HemCon Medical Technologies, Inc., to employ Moss Adams LLP as accountants. As reported in the Troubled Company Reporter on July 24, 2012, Moss Adams is expected to: -- prepare monthly 2015 reports; -- review and prepare tax returns; -- provide the estate with accounting, advisory and tax advice; -- assist the Debtor in the preparation of a plan of reorganization and disclosure statement; and -- assist the Debtor with any other tax or accounting matters that the Debtor may require. The Debtor will hire Moss Adams based on its hourly rates and reimburse its necessary out-of-pocket expenses. The Moss Adams professionals who will be primarily responsible for providing services and their current billing rates are: Joe Karas Partner $390 Todd Wall Partner $390 Joe Sullivan Senior Manager $300 Eric Balentine Senior Manager $300 The firm attests that it is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. About HemCon Medical Technologies Portland, Oregon-based HemCon Medical Technologies Inc., fdba HemCon, Inc. filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 12-32652) on April 10, 2012, estimating up to $50 million in assets and liabilities. Founded in 2001, HemCon -- http://www.hemcon.com/-- is a diversified medical technology company that develops, manufactures and markets innovative wound care, anti-microbial and oral care products for the military, emergency medical, surgical, dental and over-the-counter markets. HemCon has subsidiaries in the United Kingdom and Europe. The bankruptcy filing comes after an en banc decision by the U.S. Court of Appeals for the Federal Circuit on March 15, 2012, which affirmed an award of $34.2 million in damages to Marine Polymer Technologies Inc. in a patent infringement case initiated in 2006. HemCon's European subsidiary is not subject to the Chapter 11 proceedings. Judge Elizabeth L. Perris presides over the case. Attorneys at Tonkon Torp LLP represent the Debtor. The petition was signed by Nick Hart, CFO. Robert D. Miller Jr., U.S. Trustee for Region 18 appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of HemCon Medical Technologies, Inc. The Committee has appointed Marine Polymer as its chair. INDIANAPOLIS DOWNS: Hearing on $500MM Sale to Centaur Oct. 19 ------------------------------------------------------------- BankruptcyData.com reports that Indianapolis Downs filed with the U.S. Bankruptcy Court a motion for approval to sell substantially all of the Debtors' assets free and clear to Centaur for $500,000,001. The motion explains that despite the fact that Centaur initially withdrew its bid, the Debtors continued to discuss a possible bid with Centaur. On Sept. 6, 2012, Centaur submitted a revised bid, which was modified following negotiations with the Debtors and representatives of the Ad Hoc Second Lien Committee, pursuant to which Centaur would acquire the Assets in exchange for $500,000,001 plus assumption of certain liabilities. After proper notice, the Debtors commenced an auction on Sept. 6, 2012. In advance of the auction, the Debtors, the representatives of the Ad Hoc Second Lien Committee and Centaur continued to negotiate the terms of the Centaur bid. However, despite significant negotiations, the Debtors, the Ad Hoc Second Lien Committee and Centaur were unable to agree on the material terms of the Centaur bid prior to the commencement of the auction; therefore, the Debtors continued the auction to September 12, 2012 to provide the parties additional time to negotiate the terms of the Centaur bid. On September 12, 2012, the Debtors recommenced the auction; however, prior to, and during the auction, the Debtors, the Ad Hoc Second Lien Committee and Centaur continued to negotiate certain aspects of the Centaur bid. Thus, the Debtors once again continued the Auction to Sept. 14, 2012. Upon the recommencement of the auction, Centaur submitted a revised bid in the amount of $500,000,001 and containing terms which the Debtors in the exercise of their business judgment determined were the highest and best bid at the auction. Fortress objected to the sale to Centaur at the auction, and expressly reserved all of its rights to challenge: (i) the Debtors' acceptance of the Centaur Bid as a Qualified Bid; (ii) the Debtors' ability to consummate a sale based on the Centaur bid, and approve the Plan based upon the Centaur bid; and (iii) the propriety of the Auction and any other actions in connection with the Auction or the prosecution of the Sale Transaction." The Court scheduled an Oct. 19, 2012, hearing on the motion. About Indianapolis Downs Indianapolis Downs LLC operates Indiana Live -- http://www.indianalivecasino.com/-- a combined race track and casino at a state-of-the-art 283 acre Shelbyville, Indiana site. It also operates two satellite wagering facilities in Evansville and Clarksville, Indiana. Total revenue for 2010 was $270 million, representing an 8.7% increase in 2009. The casino captured 53% of the Indianapolis market share. In July 2001, Indianapolis Downs was granted a permit to conduct a horse track operation in Shelvyville, Indiana, and started operating the track in 2002. It was granted permission to operate the casino at the racetrack operation in May 2007. The casino began operations in July 2010. Indianapolis Downs and subsidiary, Indianapolis Downs Capital Corp., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 11-11046) in Wilmington, Delaware, on April 7, 2011. Indianapolis Downs estimated $500 million to $1 billion in assets and up to $500 million in debt as of the Chapter 11 filing. According to a court filing, the Debtor owes $98,125,000 on a first lien debt. It also owes $375 million on secured notes and $72.6 million on subordinated notes. Matthew L. Hinker, Esq., Scott D. Cousins, Esq., and Victoria Watson Counihan, Esq., at Greenberg Traurig, LLP in Wilmington, Delaware, have been tapped as counsel to the Debtors. Christopher A. Ward, Esq., at Polsinelli Shughart PC, in Wilmington, Delaware, is the conflicts counsel. Lazard Freres & Co. LLC is the investment banker. Bose Mckinney & Evans LLP and Bose Public Affairs Group LLC serve as special counsel. Kobi Partners, LLC, is the restructuring services provider. Epiq Bankruptcy Solutions is the claims and notice agent. INNER CITY: Asks Court to Dismiss Shareholder Suit Over IP Sale --------------------------------------------------------------- Eric Hornbeck at Bankruptcy Law360 reports that Inner City Broadcasting Corp. urged a New York state judge Thursday to toss a litigious shareholder's complaints over Inner City's bankrupt radio subsidiary's plans to sell some of its trademarks and other intellectual property, calling the allegations hard to follow. About Inner City On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INTERNATIONAL WIRE: Moody's Affirms 'B2' CFR/PDR; Outlook Stable ---------------------------------------------------------------- Moody's Investors Service affirmed International Wire Group Holdings, Inc.'s B2 corporate family rating and B2 probability of default rating. International Wire Group Holdings, Inc. is the parent of International Wire Group, Inc. (collectively referred to as "International Wire"). Moody's also assigned a B3 rating to International Wire Group, Inc.'s proposed $250 million senior secured notes due 2017. The ratings outlook remains stable. As part of the notes issuance, the company plans to amend the asset-based revolving credit facility (unrated), increasing the commitment size to $175 million from $150 million and extending the maturity until 2017. Proceeds from the proposed senior secured notes and amended revolving credit facility will be used to redeem the existing senior secured notes and senior PIK toggle notes, and fund an approximately $60 million distribution or share buyback. The ratings affirmation reflects Moody's view that International Wire's credit profile remains appropriate for the B2 ratings category even as the proposed transaction increases pro forma financial leverage almost a full-turn to 4.2 times from 3.3 times as of June 30, 2012 (including Moody's adjustments). The following summarizes the ratings activity Ratings assigned: International Wire Group, Inc. Proposed $250 million senior secured notes due 2017 at B3 (LGD5, 72%) Ratings affirmed: International Wire Group Holdings, Inc. Corporate family rating at B2 Probability of default rating at B2 Rating affirmed and to be withdrawn at transaction closing: International Wire Group Holdings, Inc. Senior PIK toggle notes due 2015 at Caa1 International Wire Group, Inc. Senior secured notes due 2015 at B3 RATINGS RATIONALE International Wire's B2 corporate family rating reflects its modest scale, aggressive financial policy given the magnitude of the proposed distribution or share buyback (on top of the $60 million and $100 million that was paid in 2010 and 2011, respectively) as well as plans to initiate a common dividend, and exposure to cyclical end-markets as evidenced by a significant contraction in product volumes that occurred during the recession. Notwithstanding these concerns, the rating reflects Moody's expectation that debt to EBITDA will decline below 4.0 times over the next 12 to 18 months, EBITA to interest will remain above 2.0 times, and free cash flow will remain modestly positive despite the planned common dividend. The rating also derives support from the company's established position in niche copper wire markets, the counter-cyclical nature of its cash flows, and the likelihood that an improved economic environment should translate into continued volume growth over the near-term. The stable outlook reflects Moody's expectation that International Wire will sustain organic revenue and earnings growth and apply excess cash flow to debt reduction. The ratings could be upgraded if the company organically grows its scale and earnings and does not materially increase debt levels such that leverage is sustainably reduced below 3.0 times while maintaining a conservative financial policy with respect to shareholder enhancement activities and acquisitions. The ratings could be downgraded if a deterioration in end-market conditions causes debt to EBITDA to increase above 5.0 times and/or if EBITA to interest declines below 1.5 times. Sustained negative free cash flow, a material debt-financed acquisition, or another distribution or share buyback could also pressure the ratings. The ratings are subject to the conclusion of the transactions, as proposed, and Moody's review of final documentation. The principal methodology used in rating International Wire Group, Inc. was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Camden, New York, International Wire Group, Inc. manufactures and markets wire products, including bare and tin- plated copper wire, engineered products and high performance conductors, for other wire suppliers, distributors and original equipment manufacturers. The company recorded revenues of approximately $813 million through the twelve months ended June 30, 2012. INTERNATIONAL WIRE: S&P Affirms 'B+' Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Camden, N.Y.-based International Wire Group Holdings Inc. The outlook is stable. "At the same time, we assigned our 'B' issue-level rating (one notch below the corporate credit rating) to the proposed $250 million senior secured notes of International Wire Group Inc., a subsidiary of International Wire Group Holdings Inc. The recovery rating on the notes is '5', indicating our expectation for modest (10% to 30%) recovery in the event of payment default," S&P said. "The rating affirmation follows International Wire Group Holdings' announcement that it intends to issue $250 million new senior secured notes due 2017," said credit analyst Megan Johnston. "Despite higher pro forma debt balances, as book debt will increase to about $285 million by year-end 2012, we believe credit metrics will remain in line with the current rating." "The stable rating outlook reflects our expectation that leverage will remain between 3x and 4x in 2012 and 2013, as International Wire Group Holdings' end markets hold firm in a gradually improving economy. In our view, this will cause higher sales volumes to offset weaker pricing for its products. We would lower our rating if leverage climbs to and remains above 4x for a sustained period of time. In our view, the company's relatively small size and scope, as well as the less transparent operating strategy and financial policy inherent with private equity-owned firms, will preclude an upgrade over the next 12 months," S&P said. JACKSON GREEN: Chapter 11 Reorganization Case Dismissed ------------------------------------------------------- Hon. Thomas S. Utschig of the U.S. Bankruptcy Court for the Western District of Wisconsin dismissed the Chapter 11 case of Jackson Green LLC upon the withdrawal of the U.S. Trustee's objection. As reported in the Troubled Company Reporter on Aug. 1, 2012, Patrick S. Layng, the U.S. Trustee for Region 11, notified the Court that he has withdrawn his motion to convert the Chapter 11 case of Jackson Green, LLC, to one under Chapter 7 of the Bankruptcy Code. The U.S. Trustee has also withdrawn his objection to the Debtor's motion to dismiss case. On June 4, the Debtor objected to the U.S. Trustee's motion saying that it voluntarily requested for the case dismissal because the real estate and collateral of Wells Fargo Bank N.A., were transferred in the 11 U.S.C. Sec. 363 sale to Wells Fargo, and that there is no need for a Chapter 7 bankruptcy. Wells Fargo is trustee for the registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass- Through Certificates, Series 2006-C4. About Jackson Green Based in Minocqua, Wisconsin, Jackson Green LLC owns a commercial office building and parking lot in Chicago. Jackson Green originally filed for Chapter 11 bankruptcy (Bankr. W.D. Wis. Case No. 09-10099) on Jan. 9, 2009. The Court confirmed the Debtor's chapter 11 plan on May 18, 2010. Jackson Green returned to bankruptcy (Bankr. W.D. Wis. Case No. 11-14038) on June 23, 2011. Judge Thomas S. Utschig presides over the so-called Chapter 22 case. The Law Office of Terrence J. Byrne serves as the Debtor's Chapter 22 counsel. In its schedules, the Debtor disclosed $25.2 million in assets and $22.8 million in liabilities. Secured lender Wells Fargo is represented by lawyers at Foley & Lardner LLP. The United States Trustee said a committee under 11 U.S.C. Sec. 1102 has not been appointed because an insufficient number of persons holding unsecured claims against Jackson Green have expressed interest in serving on a committee. K-V PHARMACEUTICAL: Hologic Issue Has Nov. 11 Hearing ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that K-V Pharmaceutical Co., which reported a $4.l million operating loss in August, could lose the bankruptcy reorganization entirely depending on the outcome of a Nov. 11 hearing with Hologic Inc. K-V's main business is the sale of Makena, a drug reducing the risk of premature birth. Bloomberg notes KV neither invented nor patented Makena, but agreed to pay Hologic nearly $200 million for "orphan drug" status -- and seven years of market exclusivity -- for the rights to sell the branded drug. The FDA granted the approval to Hologic, which presented the application and argued for the drug based on medical research sponsored by the National Institutes of Health. KV helped finance the application for approval. Hologic sold the Makena business to K-V in 2008 and is owed about $95 million plus royalties. Bloomberg says, though Hologic has a lien on the drug, KV argues that the marketing rights is worth more than remaining debt owed to Hologic. The report relates that early this month, Hologic filed papers in U.S. Bankruptcy Court in Manhattan seeking a modification of the automatic stay. If Hologic were to prevail, it would take back the right to distribute the drug. K-V, the official creditors' committee, and an ad hoc group of holders of senior secured notes all filed papers opposing Hologic. There will be a preliminary hearing on Sept. 27, followed by a final hearing Nov. 13. Not having received payments, Hologic wants to take back marketing rights because less than six years remains on the exclusive right to market the drug. The report relates that K-V contends the drug is worth more than the remaining debt owed Hologic. K-V also contests Hologic's claim that that the lien extends to accounts receivable and inventory of the drug. Liabilities include $455.6 million in long-term debt, including $225 million on the first lien senior secured notes due in 2015 and $200 million on 2.5% contingent convertible subordinated notes due 2033. The first-lien notes traded on Sept. 21 for 34.625 cents on the dollar, down from 48.24 cents on July 11, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The subordinated notes traded on Aug. 27 for 1.9 cents on the dollar, according to Trace. 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. KINGFISHER AIRLINES: Lenders to Meet Soon for Debt Talks -------------------------------------------------------- Nupur Acharya at Dow Jones' DBR Small Cap reports that banks which have lent money to Kingfisher Airlines Ltd. are scheduled to meet its owners soon for another round of debt talks, a State Bank of India executive said. About Kingfisher Airlines Headquartered in Mumbai, India, Kingfisher Airlines -- http://www.flykingfisher.com/-- formerly known as Deccan Aviation Ltd., serves about 35 domestic destinations with a fleet of more than 40 aircraft, including Airbus jets and ATR 72 turboprops. It maintains bases in major cities such as Delhi and Mumbai. * * * Kingfisher Airlines lost money six years in a row, accumulating net debt of INR77.2 billion (US$1.74 billion) as of March 2010, according to data compiled by Bloomberg. As reported in the Troubled Company Reporter-Asia Pacific on Sept. 5, 2012, The Times of India said Kingfisher Airlines has now been given a reality check by its auditors in the company's annual report 2011-12. The company had current liabilities, including borrowings and trade payables of INR8,436 crore, against current assets of INR1,618.8 crore at the end of March 2012. According to TOI, the Vijay Mallya-promoted company has defaulted in repayment of loans to banks and financial institutions, for which several lenders have had to take a hit by setting aside more funds, with overdues estimated at nearly INR800 crore at the end of March 2012. LAZY DAYS: Advisory Opinions for State Court Judges Prohibited -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a bankruptcy judge in Delaware erred in reopening a Chapter 11 case to write an opinion for use in a state court lawsuit over the ability to exercise a purchase option in a lease. According to the report, the case involved Lazy Days' R.V. Center Inc., which confirmed a prepackaged Chapter 11 plan in 2009 in less than five weeks. After confirmation, there were two lawsuits in state court over the ability to exercise a purchase option. The report relates that one year after confirmation, the successor to the bankrupt company filed papers in bankruptcy court to clarify the right to exercise a purchase option contained in a lease for real property. The bankruptcy judge reopened the closed Chapter 11 case and ruled it was proper to interpret the confirmation order and enforce a provision that was "central" to the "plan and confirmation order." On appeal, U.S. District Judge Richard G. Andrews reversed the bankruptcy court Sept. 24, ruling it was an abuse of discretion to reopen the case. The report notes that Judge Andrews relied on a 2007 opinion from the U.S. Court of Appeals in Philadelphia called In re Martin's Aquarium. The case stands for the proposition that the effect of an order in subsequent litigation is normally decided by the court in the later lawsuit. The Bloomberg report discloses that Judge Andrews quoted part of the Martin's decision as saying that a bankruptcy court "should not provide advisory opinions for state court litigants." The case is I-4 Land Holdings Ltd. v. Lazy Days' RV Center Inc. (In re Lazy Days' RV Center Inc.), 11-626, U.S. District Court, District of Delaware (Wilmington). About Lazy Days' R.V. Founded in 1976, Lazydays(R) -- http://www.BetterLazydays.com/-- considers itself the largest single-site RV dealership in North America. Lazy Days' was acquired by Bruckmann Rosser Sherrill & Co. II LP in May 2004 in a $217 million transaction. The company has one mobile home and recreational vehicle sales and service center on 126 acres near Tampa, Florida. Lazy Days' R.V. Center Inc. filed for Chapter 11 on Nov. 5 (Bankr. D. Del. Case No. 09-13911). The Company's legal advisor is Kirkland & Ellis LLP and its financial advisor is Macquarie Capital (USA) Inc. Lazy Days' RV Center Inc. completed its financial restructuring and Wayzata Investment Partners LLC became majority and controlling shareholder of the company in December 2009. LEAP WIRELESS: S&P Rates Proposed $400-Million Term Loan 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating and '1' recovery rating to Leap Wireless International Inc.'s proposed $400 million term loan, which will be issued by subsidiary Cricket Communications Inc. The '1' recovery rating denotes very high (90%-100%) recovery prospects in the event of a payment default. The term loan will rank equally with Cricket's existing $1.1 billion of senior secured notes. The company said it will use proceeds to refinance $300 million of senior unsecured notes at Cricket due in 2015. "At the same time, we revised the recovery rating on the unsecured notes at Cricket to '4' from '3'. The '4' recovery rating denotes our expectations for average recovery (30%-50%) in the event of a payment default. The issue-level rating on the unsecured notes remains 'B-'," S&P said. "Parent Leap Wireless' corporate credit rating remains 'B-' with a stable outlook, and all other issue-level ratings remain unchanged. We project a modest increase in leverage due to the proposed financing and debt repayment, to about 6.5x pro forma as of June 30, 2012, but this remains consistent with our financial risk assessment of 'highly leveraged,'" S&P said. RATINGS LIST Leap Wireless International Inc. Corporate Credit Rating B-/Stable/-- New Ratings Cricket Communications Inc. $400 mil. term loan B+ Recovery Rating 1 Ratings Unchanged; Recovery Rating Revised To From Cricket Communications Inc. Senior unsecured notes B- B- Recovery Rating 4 3 LEAP WIRELESS: Moody's Rates $400-Mil. Term Loan B Offering 'Ba2' ----------------------------------------------------------------- Moody's Investors Service has assigned a Ba2 rating to Leap Wireless International Inc.'s proposed $400 million term loan B offering. The debt will be issued by Leap's wholly owned subsidiary, Cricket Communications, Inc. ("Cricket") and will be used to pay down Cricket's $300 million unsecured notes due 2015, with the remaining cash to be used for general corporate purposes. Moody's has also changed Leap's outlook to stable from negative reflecting Moody's belief that very recent strategic and operational changes will be successful in improving margins and eventually turning the business free cash flow positive. Moody's has taken the following rating actions: Issuer: Leap Wireless International, Inc. Corporate Family Rating -- B2, unchanged Probability of Default Rating -- B2, unchanged Speculative Grade Liquidity Rating -- SGL-1, unchanged Outlook -- Stable, from Negative Senior Unsecured Convertible Notes due 2014 -- Caa1, LGD6 (95%), unchanged Issuer: Cricket Communications, Inc. Assignments: Term Loan B due 2019, Assigned a rating of Ba2, LGD2 (17%) Outlook -- Stable, from Negative Senior Secured Notes due 2016 -- Ba2, LGD2 (17%) from Ba2, LGD2 (15%) Senior Unsecured Notes due 2015 -- B3, LGD5 (70%) from B3, LGD4 (67%) Senior Unsecured Notes due 2020 -- B3, LGD5 (70%) from B3, LGD4 (67%) RATINGS RATIONALE Leap's B2 Corporate Family Rating ("CFR") CFR reflects the Company's weak competitive position, small scale, high leverage and long period of inconsistent operating performance. The U.S. wireless industry is dominated by the large national operators since this is a business where size matters. "And, with every person in the country who wants a cell phone having one, the challenges associated with carving out a profitable niche business will become more difficult for Leap over time," stated Dennis Saputo, Moody's senior vice-president. Moody's projects that Leap will lose about 180,000 subscribers in 2012. Management has taken several actions that Moody's expects will increase margins and provide a clearer path to eventual free cash flow generation. In addition to various product offering enhancements and pricing changes, the Company is significantly reducing spending on national retail outlets, focusing instead on a smaller number of more effective channels. "We view this development as positive since we have long believed that the Company didn't have the operational breadth to support a profitable national strategy," continued Mr. Saputo. Leap also realizes that handset device selection is a pivotal deciding factor in attracting and retaining customers. To address that, Leap became the first prepaid carrier to offer the iPhone in June of this year, and also has emphasized more offerings of quality mid-to-high end smartphones. And, the Company expects to offer 3 4G LTE devices by year-end 2012. Although these higher-end smartphones come with large subsidies, Moody's believes that these devices will result in margin expansion since they lead to better customer retention and require higher ARPU smartphone plans. Moody's also believes that Leap's Muve Music offering is a unique offering that offers the Company the opportunity to differentiate its services. Leap has also made changes to its network modernization plans in order to improve profitability and capital efficiency. And, although management has reduced capital spending guidance by 13% for year-end 2012, the Company expects to deploy 4G LTE across approximately 21 million covered POPs by year-end 2012 and anticipates covering at least two-thirds of its network footprint over the next two to three years. Leap is investing heavily on its 4G LTE network in order to remain competitive and lower operating costs. Consequently, we expect capital spending will average above 15% of revenues over the next couple of years. "Moody's believes this reduced investment plan will still result in negative free cash flow until year-end 2014 at which time we expect the Company will become free cash flow positive," concluded Saputo. The $400 million term loan B due 2019 is rated Ba2 (LGD-2, 17%), due to its secured status and pari passu ranking to the Company's $1.1 billion senior secured notes due 2016 (also rated Ba2, LGD-2, 17%). Finally, while Leap is weakly positioned within the B2 category, the rating derives substantial support from a strong liquidity profile and the Company's valuable spectrum assets. The rating could be lowered if Leap's strategic changes fail to realize the anticipated benefits. Specifically, if leverage were to rise towards 6.0x debt-to-EBITDA (which we believe would happen if churn doesn't decrease and market share doesn't stabilize within a couple of quarters) the rating would come under pressure. A rating upgrade would result if leverage were likely to remain below 5.0x on a sustainable basis. The principal methodology used in rating Leap Wireless was the Global Telecommunications Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. LEE'S FORD: Hires Venters for General Litigation Matters -------------------------------------------------------- Lee's Ford Dock Inc. sought and obtained approval from the U.S. Bankruptcy Court to employ Venters Law Office as special counsel to advise and assist it in connection with the prosecution and defense of general litigation matters, including the collection of unpaid boat slip rental fees, and any other specific matters in connection therewith. The firm's current hourly rate is $150 per hour, which rates are adjusted periodically. The firm does not presently hold a prepetition retainer. Lee's Ford Dock currently owes an outstanding balance of $180 to the firm for services rendered prepetition. The firm intends to seek allowance of this amount as an allowed unsecured claim. The Debtors have filed a cash collateral budget that proposes monthly "carve-out" payments of an amount to be determined, payable into the firm's escrow account to be held pending further Court orders. Joseph B. Venters, Esq., attests the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Lee's Ford Dock Inc. Lee's Ford Dock Inc., Hamilton Brokerage LLC, Hamilton Capital LLC, Lee's Ford Hotels LLC, Lee's Ford Woods LLC, and Top Shelf Marine Sales Inc., filed for Chapter 11 bankruptcy (Bankr. E.D. Ky. Case Nos. 12-60818 to 12-60823) on July 4, 2008. The Debtors collectively operate as "Lee's Ford Resort & Marina" -- http://www.leesfordmarina.com/-- which consists of a boat dock, lodging facilities, the Harbor Restaurant & Tavern, a retail store, and a boat brokerage business and Web site located at http://www.buyaboat.neton Lake Cumberland in Nancy, Kentucky. Hamilton Brokerage LLC and Hamilton Capital LLC are not actively involved in the Debtors' operations, but are holding companies set up as part of the structure of the original purchase transactions which began in 2003. The Debtors' revenues were adversely impacted by the lowering of the water level of Lake Cumberland in January 2007 to allow for repairs to Wolf Creek Dam. The Debtors were forced to incur extraordinary costs to relocate the Dock and related facilities in accordance with the new water level. DelCotto Law Group PLLC serves as the Debtors' counsel. In its petition, Lee's Ford Dock estimated $10 million to $50 million in assets and debt. The petition was signed by James D. Hamilton, president. Mr. Hamilton has been designated as the individual responsible for performing the duties of the Debtors. LEHMAN BROTHERS: Sues Ford Global Treasury for $7.8 Million ----------------------------------------------------------- Ford Global Treasury Inc. was sued by Lehman Brothers Holdings Inc., which seeks payment of $7.8 million. In a 17-page complaint, Lehman accused Ford Global of breach of contract when it terminated its foreign currency trading transactions with Lehman Brothers Commercial Corp. Ford Global terminated the transactions after the Lehman unit filed for bankruptcy protection in 2008. Lehman also seeks court declaration that the defendant "willfully" violated the automatic stay, an injunction that halts actions by creditors against a company in bankruptcy protection. The case is Lehman Brothers Holdings Inc. v. Ford Global Treasury Inc., 12-01877, U.S. Bankruptcy Court, Southern District of New York (Manhattan). 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: Barclays Seeks Sanctions v. Puerto Rican Bank -------------------------------------------------------------- Barclays Capital Inc. has filed a motion for civil contempt sanctions against Firstbank Puerto Rico for violating a bankruptcy court order, which approved the sale of Lehman Brothers Holdings Inc.'s North American broker-dealer business to the bank in 2008. The court documents were filed under seal in accordance with the confidentiality stipulation dated April 5, 2011 between Barclays and Firstbank. Firstbank filed a lawsuit against Barclays seeking the return of securities it posted with Lehman's special financing unit to secure certain obligations under a derivatives deal. After Lehman filed for bankruptcy protection, Barclays acquired the collateral pursuant to the 2008 sale order. 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: Aussie Unit Held Liable to 3 Towns --------------------------------------------------- A federal judge has ruled that Lehman Brothers Holdings Inc.'s Australian unit must repay three towns that invested in failed securities backed by U.S. subprime mortgages, Bloomberg News reported. According to the report, Federal Court Justice Steven Rares said the Lehman unit "engaged in misleading and deceptive conduct," and "is liable to compensate the councils for their losses." The three Australian towns that invested A$37.3 million ($39 million) in securities sold by Grange Securities Ltd. sued in 2009 to recover their losses. Grange, which was bought by Lehman, invested the towns' money in securities whose value collapsed along with the U.S. housing market, according to the report. The Lehman unit also faces a lawsuit from a group of 72 councils, charities, churches and private investors. The plaintiffs, which seek to recover $248 million, alleged the company breached contracts and fiduciary duties, and engaged in misleading and negligent conduct. They claimed the company did not inform them of the risks involved with investing in complex financial products known as synthetic collateralized debt obligations (SCDOs), according to a report by Herald Sun. Judge Rares did not make an order on the amount of damages and instead will hear submissions on the matter on November 5, the Herald Sun reported. 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: $5.9-Bil. in Claims Traded in August & July ------------------------------------------------------------ Trading of claims filed against the Chapter 11 estate of Lehman Brothers Holdings Inc. continues to increase for the months of July and August 2012. More than 700 claims valued at roughly $5.9 billion traded during the two months, an increase from the around 600 claims valued at $3.4 billion that were traded during the months of May and June. For this year, claims against Lehman that changed hands totaled $17.8 billion. Since Sept. 15, 2008, when the financial institution sought bankruptcy protection, more than $90 billion in Lehman claims have traded, according to Jacqueline Palank of DowJones' Daily Bankruptcy Review. For the period July 2011 to July 2012 alone, 13,281 claims with a total amount of $41.146 billion filed in Lehman's bankruptcy cases changed hands, according to an earlier report. SecondMarket pointed out that in August, there were a few large- scale transfers in Lehman, including: -- a $1 billion claim bought by Lehman Brothers Special Financing Inc., an LHBI subsidiary, from 7th Ave, Inc. -- a $441 million claim bought by Wells Fargo from OMX Timber Finance Investments II, LLC; and -- more than 30 claims with a face value of over $400 million traded by Deutsche Bank. 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. LYMAN LUMBER: Court OKs Colliers Int'l as Marketing Assistant ------------------------------------------------------------- Lyman Holding Company, et al., have sought and obtained approval from the U.S. Bankruptcy Court to employ Welsh Companies, LLC, doing business as Colliers International/Minneapolis - St. Paul, including brokers Ted Gonsior and Andy Heieie, to represent or assist the Debtors in marketing, locating a buyer for, and negotiating the sale of a property owned by the Debtors. The real property is located in Cottage Grove, Minnesota owned by Debtor 300 LYLC, Inc., formerly Lyman Lumber Company, and consisting of raw land on which a railroad siding has been built. If the property is sold at the $5,903,251 asking price stated in the listing agreement, Colliers would receive a 5% commission for a sale without a buyer's agent and a 7% commission for a sale with a buyer's agent, which commission would be shared between Colliers and the buyer's agent. In the event the property is transferred to the secured lender prior to the expiration of the listing agreement, the agreement will terminate and the Debtors will pay Colliers $5,000 if the property is transferred before Jan. 27, 2013, and $10,000 if the property is transferred after that date. William Wardwell, executive vice president of Colliers, attests the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Lyman Lumber Lyman Lumber Company sells building supplies, such as framing beams, roofing materials, siding and drywall to residential builders. The 113-year old company and several affiliates sought Chapter 11 petition (Bankr. D. Minn. Lead Case No. 11-45190) on Aug. 4, 2011. Judge Dennis O'Brien presides over the cases. Lyman Lumber estimated $50 million to $100 million in assets and $100 million to $500 million in debts. The petition was signed by James E. Hurd, president and chief executive officer. The affiliates that filed for Chapter 11 are: Lyman Holding Company; Automated Building Components, Inc.; Building Material Wholesalers; Carpentry Contractors Corp.; Construction Mortgage Investors Co.; Lyman Development Co.; Lyman Lumber of Wisconsin, Inc.; Lyman properties LLC; Mid-America Cedar, Inc.; Woodinville Lumber, Inc.; and Woodinville Construction Services LLC. Cynthia A. Moyer, Esq., Douglas W. Kassebaum, Esq., James L. Baillie, Esq., and Sarah M. Gibbs, Esq., at Fredrikson & Bryon, P.A., serve as bankruptcy counsel. BGA Management, LLC d/b/a Alliance Management, developed and executed a sale process and marketing strategy for the Debtors' assets. The Official Committee of Unsecured Creditors of Lyman Lumber Company tapped Fafinsky, Mark & Johnson, P.A., as its counsel. Alliance Management is the financial and turnaround consultant. When they filed for bankruptcy, the Debtors had in hand a term sheet with SP Asset Management, LLC, a unit of Steel Partners Holdings L.P., to serve as stalking horse bidder for the assets of the Debtors. New York City-based Steel Partners is a diversified holding company that owns and operates businesses in a variety of industries. MEDIA GENERAL: Warren Buffett Owns 17% Class A Shares ----------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Warren E. Buffett and Berkshire Hathaway Inc. disclosed that as of Sept. 20, 2012, they beneficially own 4,646,220 shares of Class A common stock of Media General, Inc., representing 17% of Class A shares outstanding. Mr. Buffett serves as the Chairman of the Board of Directors and Chief Executive Officer of Berkshire. Mr. Buffett previously reported beneficial ownership of 4,646,220 Class A shares as of May 24, 2012. On Sept. 20, 2012, pursuant to the nomination by Berkshire under Section 2.3 of the Shareholders Agreement, Media General's Board of Directors appointed Wyndam Robertson to serve on the Board of Directors until the next annual shareholder meeting for the general election of directors. Also, on Sept. 24, 2012, Berkshire exercised the Warrants and received, upon surrender of the Warrants and payment of the exercise price per share of $0.01 set forth in the Warrant Agreement, 4,646,220 shares of Class A Common Stock of the Company. A copy of the amended filing is available for free at http://is.gd/MXBMJi About Media General Richmond, Virginia-based Media General Inc. (NYSE: MEG) -- http://www.mediageneral.com/-- is an independent communications company with interests in newspapers, television stations and interactive media in the United States. The Company reported a net loss of $74.32 million for the fiscal year ended Dec. 25, 2011, a net loss of $22.64 million for the fiscal year ended Dec. 26, 2010, and a net loss of $35.76 million for the fiscal year ended Dec. 27, 2009. The Company's balance sheet at June 24, 2012, showed $923.41 million in total assets, $1.05 billion in total liabilities and a $129.26 million total stockholders' deficit. * * * As reported by the Troubled Company Reporter on April 12, 2012, Moody's Investors Service downgraded, among other things, Media General's Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa1 from B3, concluding the review for downgrade initiated on Feb. 13, 2012. The downgrade reflects the significant increase in interest expense associated with the company's credit facility amend and extend transaction and an assumed issuance of at least $225 million of new notes, which will result in limited free cash flow generation and constrain Media General's capacity to reduce its very high leverage. The weak free cash flow and high leverage create vulnerability to changes in the company's highly cyclical revenue and EBITDA generation. According to the May 23, 2012 edition of the TCR, Standard & Poor's Ratings Services placed its 'CCC+' corporate credit rating on Media General, along with its 'CCC+' issue-level rating on the company's senior secured notes, on CreditWatch with positive implications. "The CreditWatch placement is based on Media General's agreement to sell the majority of its newspaper assets to BH Media Group, a subsidiary of Berkshire Hathaway Inc. The CreditWatch also reflects the announcement that the company will refinance its existing bank debt due in March 2013. It expects to close the refinancing transaction next week and the newspaper sale by June 25, 2012," S&P said. MEDICURE INC: Board Approves 15-to-1 Share Consolidation -------------------------------------------------------- Medicure Inc.'s Board of Directors has approved a consolidation of the Company's common shares on the basis of 15 pre-consolidation common shares for each one post-consolidation Common Share, subject to the approval of the TSX Venture Exchange. A special resolution was passed at the Company's Annual and Special Meeting held on Nov. 22, 2011, to give the Board of Directors of the Company the discretion to approve a consolidation of the Company's Common Shares on the basis of a range of four pre-consolidation Common Shares for each one post-consolidation Common Share to fifteen pre-consolidation Common Shares for each one post-consolidation Common Share. As at Sept. 21, 2012, the Company had 182,947,595 Common Shares issued and outstanding. Following the consolidation, it is expected that the Company will have approximately 12,196,506 Common Shares issued and outstanding. The numbers of Common Shares reserved for issuance under the Company's Stock Option Plan and the number of Common Shares that may be purchased upon exercise of warrants will be reduced proportionately. No fractional shares will be issued, but instead will be rounded to the nearest whole common share. Once TSX Venture Exchange approval is obtained, the Company will issue a further news release and shareholders will receive a letter of transmittal from Computershare, the Company's exchange agent. The Company's name and trading symbol will not change as a result of the consolidation. Further details with respect to the consolidation are contained in the Company's Management Proxy Circular dated Oct. 14, 2011, a copy of which is available on SEDAR at http://www.sedar.com/ About Medicure Inc. Based in Winnipeg, Manitoba, Canada, Medicure Inc. (TSX/NEX: MPH.H) -- http://www.medicure.com/-- is a biopharmaceutical company engaged in the research, development and commercialization of human therapeutics. The Company has rights to the commercial product, AGGRASTAT(R) Injection (tirofiban hydrochloride) in the United States and its territories (Puerto Rico, U.S. Virgin Islands, and Guam). AGGRASTAT(R), a glycoprotein GP IIb/IIIa receptor antagonist, is used for the treatment of acute coronary syndrome (ACS) including unstable angina, which is characterized by chest pain when one is at rest, and non-Q-wave myocardial infarction. KPMG LLP, in Winnipeg, Canada, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended May 31, 2012. The independent auditors noted that the Company has experienced operating losses and has accumulated a deficit of $123,303,052 that raises substantial doubt about its ability to continue as a going concern. Medicure reported net income of C$23.38 million for the year ended May 31, 2012, in comparison with a net loss of C$1.63 million during the prior fiscal year. The Company's balance sheet at May 31, 2012, showed C$4.74 million in total assets, C$6.56 million in total liabilities and a C$1.82 million total deficiency. MF GLOBAL: Ch. 11 Trustee Files $8.4MM Suit Against Breakwater -------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that MF Global Holdings Ltd. Chapter 11 trustee Louis J. Freeh filed an $8.4 million suit in New York bankruptcy court Friday against Breakwater Trading LLC, saying the energy trader owes the money for breaching a 2006 credit agreement with two MFGH subsidiaries. Bankruptcy Law360 relates that Mr. Freeh is the trustee seeking to recover on behalf of creditors of MF Global and units MF Global Finance USA Inc., MF Global Capital LLC, MF Global FX Clear LLC, MF Global Market Services LLC and MF Global Holdings USA Inc. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm was also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. MF GLOBAL: Parent's Unpaid Fees Rise to $39.2 Million ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that professionals for trustee Louis Freeh and the official creditors' committee of MF Global Holdings Ltd. incurred $3.5 million in fees during August that can't be paid for lack of cash. According to the report, since the beginning of the liquidation of the parent of the commodities broker, $39.2 million in professional fees are accrued and not paid, according to an operating report filed in U.S. Bankruptcy Court in New York. Mr. Freeh still has about $15.9 million in cash to pay other operating expenses of the holding company's Chapter 11 reorganization. The report relates that originally $25.3 million, the cash represents collateral for secured lender JPMorgan Chase & Co. Mr. Freeh is using the cash with the bank's permission. There was little change in cash collateral in August because Mr. Freeh brought in more than $680,000 from an affiliate in Japan. The separate trustee for the brokerage subsidiary MF Global Inc. pays professional fees with advances from the Securities Investor Protection Corp. Mr. Freeh will be able to pay professionals when he recovers money or securities that don't belong to customers or represent assets not subject to secured creditors' claims. The report notes Mr. Freeh filed a lawsuit last week in bankruptcy court to recover an $8.3 million margin loan made by an MF Global finance subsidiary to a Chicago customer named Breakwater Trading LLC. The margin loan was made to support trading in futures and options. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/ -- was one of the world's leading brokers of commodities and listed derivatives. MF Global provided access to more than 70 exchanges around the world. The firm was also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. MILTON HOSPITAL: S&P Holds 'BB-' Rating on $32.5MM Series D Bonds ----------------------------------------------------------------- Standard & Poor's Ratings Services has revised its outlook to positive from stable and affirmed its 'BB-' rating on the $32.5 million series D bonds issued by the Massachusetts Development Finance Agency for Milton Hospital, Mass., now known as Beth Israel Deaconess Hospital - Milton. At the same time, Standard & Poor's withdrew its rating on Beth Israel Deaconess Hospital - Milton's (Milton) series C bonds, which the hospital redeemed Sept. 4, 2012. "On Jan. 1, Milton became an affiliate of Beth Israel Deaconess Hospital, (BIDMC) which is part of CareGroup ('A-'), a system of academic medical center and specialty hospitals in and around Boston. Milton has had a clinical affiliation with BIDMC since 2003; however, under the new affiliation agreement BIDMC will assume board and management control of Milton while, at the same time, agreeing to provide certain tangible services, support, and Transfers," S&P said. "The positive outlook reflects our opinion that Milton will likely continue to benefit from its relationship with BIDMC, resulting in the improved financial performance that is necessary for a higher rating," said Standard & Poor's credit analyst Cynthia Keller. "We believe a higher rating is possible as early as next year," said Ms. Keller. BIDMC did not assume responsibility for Milton's series D bonds, which Standard & Poor's will continue to rate based on Milton's financial and enterprise profiles alone. Credit factors supporting the rating affirmation and positive outlook include our assessment of Milton's: Improved earnings year to date in fiscal year 2012 on the strength of increasing volumes and BIDMC's assumption of a portion of Milton's physician losses; Expected benefits from Milton's affiliation with BIDMC; Adequate balance sheet for the rating category; and Repayment of the short-term line of credit using an intercompany loan. A higher rating is precluded by Milton's: Competitive service area; and Uncertainty around the magnitude of benefits Milton will gain from its affiliation with BIDMC. "It is unlikely Standard & Poor's would lower the rating during the two-year outlook period due to benefits already realized by Milton, which have resulted in improved interim financial performance and volumes," S&P said. MONEY TREE: Consumer Privacy Ombudsman Appointed ------------------------------------------------ The Hon. William R. Sawyer of the U.S. Bankruptcy Court for the Middle District of Alabama approved the appointment of Von G. Memory of the Memory & Day law firm as consumer privacy ombudsman in the Chapter 11 cases of Small Loans, Inc., et al. S. Gregory Hays, the chapter 11 trustee, has requested that the Court direct the Bankruptcy Administrator to appoint a consumer privacy ombudsman to protect the privacy of certain consumers whose personally identifiable information may be sold to a third party along with certain assets of the Debtors. In this relation, the trustee intends to sell certain consumer credit accounts, notes, receivables, security instruments, insurance policies and other ancillary products owned by the Debtors. The accounts to be sold may contain mailing addresses, phone numbers, dates of birth, social security numbers, and other information regarding customers of the Debtors. Mr. Memory will, among other things, file a report with the Court containing his findings and recommendations regarding the privacy concerns that may arise as a result of the asset sales. Mr. Memory's compensation for all legal and other services related to his appointment as ombudsman will be limited to a flat fee of $7,500. The Bankruptcy Administrator and the Official Committee of Unsecured Creditors stated that they did not have any objection to the appointment of Mr. Memory as ombudsman. About Money Tree Headquartered in Bainbridge, Georgia, The Money Tree Inc. -- http://www.moneytreeinc.com/-- operates a network of lending branches across the Southeast, concentrated in Georgia, Florida and Alabama. The Company and four affiliates filed for Chapter 11 bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc., The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc., and The Money Tree of Georgia Inc. Judge William R. Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr. Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow, P.C., serves as the Debtors' counsel. The Debtors hired Warren, Averett, Kimbrough & Marino, LLC, as restructuring advisors. The Money Tree Inc. disclosed $73,413,612 in assets and $73,050,785 in liabilities as of the Chapter 11 filing. The petitions were signed by Biladley D. Bellville, president. The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is not a party to the bankruptcy filing and intends to operate its business in the ordinary course. On Jan. 10, 2012, the Court appointed two separate Official Unsecured Creditors' Committees in The Money Tree Inc. case and The Money Tree of Georgia Inc. case. On Jan. 13, 2012, the Committees moved the Court to consolidate the two into one Omnibus Official Committee of Unsecured Creditors in the Chapter 11 cases, which motion was granted on Feb. 28, 2012. Greenberg Traurig LLP represents the Committee. The Committee tapped HGH Associates LLC as its accountants and financial advisors. On April 16, 2012, the Debtors filed a Plan of Reorganization and Disclosure Statement. Holders of General Unsecured Claims of The Money Tree, estimated total $586,676, were to receive 95% of their allowed claims. The Debtors, however, failed to move forward with their Plan as the Court stripped the Company's management of control and appointed S. Gregory Hays as Chapter 11 Trustee. Daniel D. Sparks, Esq., Eric J. Breithaupt, Esq., and Bradley R. Hightower, Esq., at Christian & Small LLP, represent the Trustee. MONEY TREE: Chapter 11 Trustee Fires KCC as Claims Agent -------------------------------------------------------- S. Gregory Hays, the Chapter 11 trustee for Small Loans, Inc., et al., asks the U.S. Bankruptcy Court for the Middle District of Alabama to terminate the employment of Kurtzman Carson Consultants as noticing and claims agent for the Debtors. The trustee said that the services provided by KCC are either no longer needed or may be performed by the trustee, through coordination with the Clerk of Court, in a manner that will reduce the costs incurred by the Debtors' estates. KCC was charged with processing the claims filed against the Debtors. This service is no longer needed because both the May 15, 2012, claims bar date and the June 13, 2012, governmental claims bar date have now passed. The trustee and KCC negotiated a reduction of KCC's fees in the amount of $19,580. KCC has now been paid in full at the reduced amount negotiated by the trustee. While certain late filed claims and administrative claims may still be received, the volume of these claims would be small and the trustee would be able to process any claims without the need of a claims agent. The trustee also asks that the Court extend the bar date for approximately 50 trade creditors who were not listed in the Debtors' schedules and who failed to receive notice of the claims bar date from the Debtors. About Money Tree Headquartered in Bainbridge, Georgia, The Money Tree Inc. -- http://www.moneytreeinc.com/-- operates a network of lending branches across the Southeast, concentrated in Georgia, Florida and Alabama. The Company and four affiliates filed for Chapter 11 bankruptcy (Bankr. M.D. Ala. Case Nos. 11-12254 thru 11-12258) on Dec. 16, 2011. The other debtor-affiliates are Small Loans, Inc., The Money Tree of Louisiana, Inc., The Money Tree of Florida Inc., and The Money Tree of Georgia Inc. Judge William R. Sawyer oversees the case, replacing Judge Dwight H. Williams, Jr. Max A. Moseley, Esq., at Baker Donelson Bearman Caldwell & Berkow, P.C., serves as the Debtors' counsel. The Debtors hired Warren, Averett, Kimbrough & Marino, LLC, as restructuring advisors. The Money Tree Inc. disclosed $73,413,612 in assets and $73,050,785 in liabilities as of the Chapter 11 filing. The petitions were signed by Biladley D. Bellville, president. The Company's subsidiary, Best Buy Autos of Bainbridge Inc., is not a party to the bankruptcy filing and intends to operate its business in the ordinary course. On Jan. 10, 2012, the Court appointed two separate Official Unsecured Creditors' Committees in The Money Tree Inc. case and The Money Tree of Georgia Inc. case. On Jan. 13, 2012, the Committees moved the Court to consolidate the two into one Omnibus Official Committee of Unsecured Creditors in the Chapter 11 cases, which motion was granted on Feb. 28, 2012. Greenberg Traurig LLP represents the Committee. The Committee tapped HGH Associates LLC as its accountants and financial advisors. On April 16, 2012, the Debtors filed a Plan of Reorganization and Disclosure Statement. Holders of General Unsecured Claims of The Money Tree, estimated total $586,676, were to receive 95% of their allowed claims. The Debtors, however, failed to move forward with their Plan as the Court stripped the Company's management of control and appointed S. Gregory Hays as Chapter 11 Trustee. Daniel D. Sparks, Esq., Eric J. Breithaupt, Esq., and Bradley R. Hightower, Esq., at Christian & Small LLP, represent the Trustee. MOORE SORRENTO: Reorganization Plan Declared Effective ------------------------------------------------------ Moore Sorento, LLC, notified the U.S. Bankruptcy Court for the Northern District of Texas that the Effective Date of the First Amended Plan of Reorganization, as modified three times, occurred on Aug. 8, 2012. The Court on July 26, 2012, entered an order confirming the Debtor's Amended Plan. As reported in the Troubled Company Reporter on Aug. 6, 2012, the Debtor presented an amended Chapter 11 plan for confirmation after the prior iteration of the Plan and the May 15 plan confirmation was declared null and void. Moore Sorrento in mid-May won confirmation of a Chapter 11 Plan that required the Debtor to complete the sale of its shopping center The Shops at Moore by May 31. The Plan, which proposes to provide a 100% recovery to creditors, also required the Debtor to make a cash payment of $37,875,000 (from the proceeds of the sale) to Wells Fargo Bank N.A. by the closing date. But the buyer, Inland, failed to close on the sale and instead sought to renegotiate certain terms of the sale. The parties later entered negotiations and reached a new asset purchase agreement on July 18. Wells Fargo participated in the negotiations and agreed to a payment of $37,275,000 cash payment on closing of the sale, and a promissory note in the amount of $300,000 payable in two years. About Moore Sorrento Hurst, Texas-based Moore Sorrento, LLC, owns real property located in Moore, Oklahoma, commonly known as the Shops at Moore, which the Company operates as a retail shopping center. The center's current 23 tenants offer various goods and services to retail customers. Moore Sorrento filed Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 11-44651) on Aug. 17, 2011. In its schedules, Moore Sorrento disclosed assets of $43,259,900 and liabilities of $42,262,158 as of the Petition Date. Attorneys for Wells Fargo Bank, N.A., Successor-by-Merger to Wachovia Financial Services, Inc., is: J. Robert Forshey, Esq., and Matthew G. Maben, Esq., at Forshey & Prostok, LLP, in Fort Worth, Tex., serve as the Debtor's counsel. J. Frasher Murphy, Esq., at Winstead PC, in Dallas, represents Wells Fargo. NATIONS ENERGY: Case Summary & Largest Unsecured Creditor --------------------------------------------------------- Debtor: Nations Energy Corporation 1511 East Fowler Avenue, Suite G Tampa, FL 33612 Bankruptcy Case No.: 12-14350 Chapter 11 Petition Date: September 20, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Leon A. Williamson, Jr., Esq. LEON A. WILLIAMSON, JR., P.A. 306 S. Plant Avenue, Suite B Tampa, FL 33606 Tel: (813) 253-3109 Fax: (813) 253-3215 E-mail: leon@lwilliamsonlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Jaime Jurado, president. Affiliate that simultaneously filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Jaime Jurado 12-14338 09/20/12 The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Republic Of Panama Arbitration Award $4,587,219 c/o Fowler, White, Boggs, P.A. 501 East Kennedy Boulevard, Suite 1700 Tampa, FL 33602 NEW ENGLAND BUILDING: Court OKs King Real Estate as Broker ---------------------------------------------------------- New England Building Materials LLC sought and obtained approval from the U.S. Bankruptcy Court to employ King Real Estate as broker. A component of the Debtor's current reorganization is the sale of assets that do not play a role in the plan of reorganization. A condominium located at 1 East Grand Avenue, Unit 203, in Old Orchard Beach, Maine, and owned by the Debtor is one such asset. To maximize the return to the estate for the sale of the property, the Debtor requires assistance from a professional real estate firm. The Debtor proposes to compensate King in accordance with the terms of the Exclusive Agency Listing Agreement, which terms call for a commission-based transaction fee to be paid to King upon the successful conclusion of the sale or exchange of the property. King Weinstein, the principal and designated broker at King, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About New England Building Based in Sanford, Maine, New England Building Materials LLC, fka Lavalley Lumber Company LLC and Poole Brothers, filed for Chapter 11 bankruptcy (Bankr. D. Maine Case No. 12-20109) on Feb. 14, 2012. New England Building Materials is engaged in the business of manufacturing and selling, at wholesale, Eastern White Pine lumber and related products. It was also engaged in the business of selling lumber products at retail, through outlets in Maine and Massachusetts, although, as of the bankruptcy filing date, it has made the determination to cease retail activities. Chief Judge James B. Haines Jr. presides over the case. The Debtor has obtained approval to hire Marcus, Clegg & Mistretta, P.A., as counsel, and Windsor Associates as financial consultant. The Official Committee of Unsecured Creditors has obtained approval to retain Bernstein, Shur, Sawyer, and Nelson, P.A. as counsel and Spinglass Management Group, LLC as a financial consultant. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. The petition was signed by Richard I. Thompson, chief financial officer. William K. Harrington, the United States Trustee for the District of Maine, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. NEWPAGE CORP: Reports 'Substantial Progress' on Plan Talks ---------------------------------------------------------- According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, NewPage Corp. reported "substantial progress" in two mediation sessions held this month between secured and unsecured creditors. According to Bloomberg, NewPage said it's "preparing an amended plan and a disclosure statement to reflect such progress." The company filed papers on Sept. 21 in U.S. Bankruptcy Court in Delaware seeking an extension until Oct. 17 of the deadline for filing a disclosure statement. A hearing to approve the new deadline is set for Oct. 16. NewPage filed a Chapter 11 plan in August that satisfied neither secured nor the unsecured creditors. The August plan contains an option under which there would be settlement of claims by the unsecured creditors' committee challenging the validity of liens held by first-lien lenders. Alternatively, the plan would forgo settlement, allowing a lawsuit on lien validity to continue after the company exits Chapter 11. The report relates NewPage has always said unsecured creditors are "hopelessly out of the money" with no theory that would bring them a dividend under a Chapter 11 plan. The official committee contends that the lenders financed an acquisition in 2007 and a refinancing two years later that included fraudulent transfers. About NewPage Corp Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. NewPage originally engaged Dewey & LeBoeuf LLP as general bankruptcy counsel. In May 2012, Dewey dissolved and commenced its own Chapter 11 case. Dewey's restructuring group led by Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage sought to hire Proskauer as replacement counsel. NewPage is also represented by Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, NewPage disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. NIFTUS LLC: Hearing on DIP Financing Continued Until Oct. 17 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Virginia continued until Oct. 17, 2012, at 11 a.m., the hearing to consider Niftus, LLC's request to incur debt. At the hearing, the Court will also consider the objection filed by the W. Clarkson McDow, Jr., U.S. Trustee for Region 4. The U.S. Trustee explained that the motion: 1. does not give sufficient notice of the terms of the proposed transaction; 2. is not accompanied by a copy of the credit agreement and proposed form of order as required by Fed. R. Bankr. P. 4001(c)(1)(A); 3. does not appear to set forth all the material provisions of the proposed credit agreement; -- among other things, the motion does not set forth events of default; 4. according to the Debtor's statement of financial affairs, it has not earned income since Jan. 1, 2010; and 5. it is unclear how the loan will benefit the Debtor. About Niftus Niftus, LLC, filed a bare-bones Chapter 11 petition (Bankr. W.D. Va. Case No. 12-71123) on June 11 in Roanoke, Virginia. Niftus, a management consulting services provider from Bluefield, Virginia, estimated assets of up to $50 million and debts of less than $10 million. Chief Judge William F. Stone Jr. oversees the case. Copeland & Bieger, P.C., serves as the Debtor's counsel. W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, has not appointed an unsecured creditors committee in the Chapter 11 case of Niftus, LLC. According to the statement, the number of persons eligible or willing to serve on such a committee is presently insufficient to form an unsecured creditors committee. The U.S. Trustee will appoint an unsecured creditors committee upon the request of an adequate number of unsecured creditors NIP COMPANY: Amends Schedules of Assets and Liabilities ------------------------------------------------------- The NIP Company filed with the U.S. Bankruptcy Court for the Western District of Texas an amended summary of its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ---------- ----------- A. Real Property $0 B. Personal Property $5,002,426 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $2,133,745 E. Creditors Holding Unsecured Priority Claims $7,114 F. Creditors Holding Unsecured Non-priority Claims $4,093,249 ---------- ----------- TOTAL $5,002,426 $6,234,108 A copy of the SALs, as amended, is available at: http://bankrupt.com/misc/nipcompany.doc28.pdf The NIP Company filed a bare-bones Chapter 11 petition in its hometown in Austin, Texas (Bankr. W.D. Tex. Case No. 12-10393) on Feb. 28, 2012. Its affiliate, San Diego, California-based Retirement Capital Group, Inc., simultaneously filed for Chapter 11 protection (Bankr. W.D. Tex. Case No. 12-10396). NIP and Retirement Capital each estimated assets of up to $50 million and debts of up to $10 million. Judge H. Christopher Mott presides over the cases. Meagan Martin, Esq., and Thomas H. Grace, Esq., at Spencer Crain Cubbage Healy & McNamara PLLC, represent the Debtors as counsel. The petitions were signed by C. William Pollock, chairman. NIP COMPANY: RCG Files Schedules of Assets and Liabilities ---------------------------------------------------------- Retirement Capital Group, Inc., filed with the U.S. Bankruptcy Court for the Western District of Texas an amended summary of its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ---------- ----------- A. Real Property $0 B. Personal Property $9,710,368 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $18,173 F. Creditors Holding Unsecured Non-priority Claims $2,095,732 ---------- ----------- TOTAL $9,710,368 $2,113,905 A copy of the SALs, as amended, is available at: http://bankrupt.com/misc/nipcompany.doc29.pdf The NIP Company filed a bare-bones Chapter 11 petition in its hometown in Austin, Texas (Bankr. W.D. Tex. Case No. 12-10393) on Feb. 28, 2012. Its affiliate, San Diego, California-based Retirement Capital Group, Inc., simultaneously filed for Chapter 11 protection (Bankr. W.D. Tex. Case No. 12-10396). NIP and Retirement Capital each estimated assets of up to $50 million and debts of up to $10 million. Judge H. Christopher Mott presides over the cases. Meagan Martin, Esq., and Thomas H. Grace, Esq., at Spencer Crain Cubbage Healy & McNamara PLLC, represent the Debtors as counsel. The petitions were signed by C. William Pollock, chairman. NORTHSTAR AEROSPACE: Wants to Reject CBA With Unions ---------------------------------------------------- BankruptcyData.com reports that Northstar Aerospace filed with the U.S. Bankruptcy Court a motion to reject collective bargaining agreements with the Communication Workers of America, Local Union No. 14430. As reported in the TCR on Sept. 14, 2012, private equity firm Wynnchurch Capital Ltd. closed its purchase of Northstar Aerospace, which it won court approval to purchase out of bankruptcy protection in July. Regarding the rejection of the CBAs, the Debtors assert, "In light of the Sale, the contemporaneous cessation of operations by the Debtors, the Purchaser's employment of or offers of employment to all employees covered by the CBA, and the New CBA, the CBA is essentially without effect. Thus in a sound exercise of their business judgment, the Debtors seek to formally reject the CBA, to the extent such rejection is necessary." The Court scheduled an Oct. 4, 2012 hearing on the motion. About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. The Debtors have obtained approval to hire Logan & Co. Inc. as the claims and notice agent. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Approximately 60% of the assets and business are with the U.S. debtors. NORTHSTAR AEROSPACE: Grant Thorton Approved as Tax Advisors ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Northstar Aerospace (USA) Inc., et al., to employ Grant Thorton LLP as tax advisors. As reported in the Troubled Company Reporter on Aug. 16, 2012, the hourly rates of Grant Thornton's personnel are: Partner/Principal $600 - $700 Managing Director $550 - $600 Senior Manager $500 - $575 Manager $400 - $525 Senior Associate $300 - $440 Associate $245 - $280 Paraprofessional $170 About Northstar Aerospace Chicago, Illinois-based Northstar Aerospace -- http://www.nsaero.com/-- is an independent manufacturer of flight critical gears and transmissions. With operating subsidiaries in the United States and Canada, Northstar produces helicopter gears and transmissions, accessory gearbox assemblies, rotorcraft drive systems and other machined and fabricated parts. It also provides maintenance, repair and overhaul of components and transmissions. Its plants are located in Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario. Northstar employs over 700 people across its operations. Northstar Aerospace, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11817) in Wilmington, Delaware, on June 14, 2012, to sell its business to affiliates of Wynnchurch Capital, Ltd., absent higher and better offers. Attorneys at SNR Denton US LLP and Bayard, P.A. serve as counsel to the Debtors. The Debtors have obtained approval to hire Logan & Co. Inc. as the claims and notice agent. Certain Canadian affiliates are also seeking protection pursuant to the Companies' Creditors Arrangement Act, R.S.C.1985, c. C-36, as amended. As of March 31, 2012, Northstar disclosed total assets of $165.1 million and total liabilities of $147.1 million. Approximately 60% of the assets and business are with the U.S. debtors. OCEANSIDE YACHT: Withdraws Motion for Cash Collateral Access ------------------------------------------------------------ Oceanside Yacht Club Development, Inc., has withdrawn its motion for authorization to use cash collateral filed on July 2, 2012. According to the Debtor's case docket, it filed a motion to dismiss its Chapter 11 case. About Oceanside Yacht Club Oceanside Yacht Club Development, Inc., fdba Shores Development Inc., owns 32 boat slips at a marina known as The Shores at Spooners Creek, located in Morehead City, Carteret County, North Carolina. The slips are available for sale or rental on a month- to-month basis. Oceanside Yacht Club filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 12-04824) on July 2, 2012. It scheduled $23,979,592 in assets and $30,227,643 in liabilities. Judge Stephani W. Humrickhouse oversees the Debtor's case. Laurie B. Biggs, Esq., and Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., serve as Chapter 11 counsel. The Bankruptcy Administrator stated that it was unable to form unsecured creditors' committee. OLDE PRAIRIE BLOCK: Returns to Ch. 11, Owes $71MM to CenterPoint ---------------------------------------------------------------- Olde Prairie Block Owner, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-37599) in Chicago on Sept. 21. The Debtor disclosed assets of $97 million in assets and $80.6 million in liabilities in its schedules. The Debtor owns two properties: (i) the Old Prairie Property, a 53,575 square foot parcel that has a building and a gravel paved lot at E. Cermak Road in Chicago, and (ii) the Lakeside Property, a 159,960 square-feet property that contains buildings in Chicago. The Debtor said CenterPoint Properties Trust has a disputed claim of $70.8 million, of which $63.3 million is secured. JMB Capital Partners is owed $3.4 million on account of DIP financing in a previous Chapter 11 case. A copy of the schedules filed with the petition is available for free at http://bankrupt.com/misc/ilnb12-37599.pdf Olde Prairie Block first sought chapter 11 protection (Bankr. N.D. Ill. Case No. 10-22668) on May 18, 2010. Two years later, the bankruptcy judge in Chicago dismissed the case and granted Centerpoint's motion to lift automatic stay to permit its state- court foreclosure action to proceed. Robert R. Benjamin, Esq., at Golan & Christie, LLP, serves as counsel to the Debtor in the new Chapter 11 case. In the prior case, the Debtor was represented by John Ruskusky, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago. OLDE PRAIRIE BLOCK: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Olde Prairie Block Owner, LLC 2245 S. Michigan Chicago, IL 60616 Bankruptcy Case No.: 12-37599 Chapter 11 Petition Date: September 21, 2012 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Robert R. Benjamin, Esq. GOLAN & CHRISTIE, LLP 70 West Madison Street, Suite 1500 Chicago, IL 60602 Tel: (312) 263-2300 Fax: (312) 263-0939 E-mail: rrbenjamin@golanchristie.com Scheduled Assets: $97,050,191 Scheduled Liabilities: $80,573,558 The petition was signed by Karl S. Norberg, manager and authorized agent. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ CenterPoint Properties Trust Property $7,484,580 c/o Baker & McKenzie (D. Heroy) 130 E. Randolph Street, Suite 3500 Chicago, IL 60601 JMB Capital Partners DIP Financing $3,400,000 450 Park Avenue, 27th Floor New York, NY 10022 Pamela Gleichman Loans $2,478,646 1906 N. Burling Street Chicago, IL 60614 Karl S. Norberg Loans $1,500,000 1906 North Burling Street Chicago, IL 60614 Ungaretti & Harris LLP Legal Services $1,342,096 70 W. Madison, Suite 3500 Chicago, IL 60602 Rosa Scarcelli 2008 Loan $400,000 41 Bowdoin Street Portland, ME 04102 Wacker Wilcox Matousek Legal Services $157,545 Cook County Treasurer Taxes $65,437 Cook County Treasurer Taxes $64,665 Resolute Consulting, LLC Goods and Services $57,072 Provence, LLC Development Services $48,000 Daley and George, LLP Legal Services $41,207 Cook County Treasurer Taxes $29,463 Development Design Group, Inc. Architectural $23,770 Services Cook County Treasurer Taxes $23,661 Ostrow Reisin Berk & Abrahams Ltd. Accounting Services $19,255 Cook County Treasurer Taxes $19,198 Cook County Treasurer Taxes $19,011 James R. Kunert Construction, Co. Maintenance and $17,400 Repair Services Cook County Treasurer Taxes $14,687 OXLEY DEVELOPMENT: Taps Paul Reece Marr as Bankruptcy Counsel ------------------------------------------------------------- Oxley Development Company, LLC, asks the U.S. Bankruptcy Court Northern District of Georgia for permission to employ the law firm of Paul Reece Marr, P.C., as bankruptcy counsel. The hourly rates of the law firm's personnel are: Paul Reece Marr, Esq. $295 Paralegal $110 Clerical $40 The Debtor relates that West Midtown, LLC, a Georgia limited liability corporation managed by Carl M. Drury, III and solely owned by Mr. Drury's wife Kathy Drury, paid the $1,046 Court filing fee and the $4,954 attorney fee and expense retainer to the LAW FIRm. West Midtown, LLC paid the funds on behalf of Debtor to the law firm as a gift and not as a loan. To the best of Debtor's knowledge, the law firm represents no interest adverse to the debtor or the estate in the matters upon which the law firm will be engaged. About Oxley Development Oxley Development Company, LLC, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-69799) in Atlanta Aug. 6, 2012. Oxley Development owns the Laurel Bluff and Lauren Island, in Camden County, Georgia. The Debtor, a single asset real estate under 11 U.S.C. Sec. 101(51B), estimated assets of at least $100 million and debts under $100 million. This is not the first time Oxley has sought bankruptcy protection. In October 2011, Oxley filed a Chapter 11 petition in Brunswick (Bankr. S.D. Ga. Case No. 11-21338). But the case was dismissed at the behest of the U.S. Trustee. The bankruptcy judge in May granted relief from stay to German American Capital Corporation, allowing the creditor to pursue its state law remedies in connection with the Debtor's real property. William S. Orange, III, Attorney at Law, represented the Debtor in the prior Chapter 11 case. In the new case, the Debtor is represented by Paul Reece Marr P.C. The Debtor disclosed $105,700,000 in assets and $73,777,219 in liabilities as of the Chapter 11 filing. Creditor German American Capital Corp. is represented in the case by Paul Baisier, Esq., and Shuman Sohrn, Esq., at Seyfarth Shaw LLP. No official committee of unsecured creditors has been appointed pursuant to section 1102 of the Bankruptcy Code. PACIFIC THOMAS: Amends List of 20 Largest Unsecured Creditors ------------------------------------------------------------- Pacific Thomas Corporation filed with the U.S. Bankruptcy Court Northern District of California a second amended list of creditors holding 20 largest unsecured claims, disclosing: Name of Creditors Nature of Claim Amount of Claim ----------------- --------------- --------------- Darrow Family Partners Unknown $1,350,908 c/o Darrow / Whitney 1600 Ala Moana No. 1112 Honolulu, HI 96815 Summit Bank Mortgage $7,693,122 2969 Broadway Oakland, CA 94694 Thomas Capital Investments Unknown $571,534 c/o Darrow / Whitney 1600 Ala Moana No. 1112 Honolulu, HI 9681 Buhla R. Darrow Trust Unknown $388,863 c/o Darrow / Whitney 1600 Ala Moana No. 1112 Honolulu, HI 96815 Thomas Koolaupoko Inv. Unknown $368,574 c/o Darrow / Whitney 1600 Ala Moana No. 1112 Honolulu, HI 96815 Richard Douglas Worsley Professional Services $75,000 Grubb & Ellis Company Professional Services $70,000 A.M. Tarbell Trust Unknown $60,525 CBRE, Inc. Professional Services $30,000 KCA Engineers, Inc. Professional Services $28,926 Baird Holm Attorneys At Law Professional Services $26,616 Timothy Brophy, CPA, MBA Professional Services $19,186 Wendel Roesn Black & Dean, LLP Professional Services $12,635 Charles M. Salter Associates, Inc. Professional Services $11,690 BKD, LLP Professional Services $11,135 Environmental Science Assoc. Inc. Professional Services $9,500 Bank of the West Operating Bank Account (overdrawn) $6,500 Doris Rydman Personal Loan $5,000 Jill Worsley Personal Loan $4,240 DMJM Harris/Korve Engineering, Inc. Professional Services $3,000 In the prior iteration of the list, the Debtor disclosed owing Thomas Capital Investments the amount of $1,081,412; Summit Bank, $898,123; Randall Whitney, $201,050; Alameda County Treasurer & Tax, $26,095 and Alameda County Treasurer & Tax, $16,159. About Pacific Thomas Corp. Walnut Creek, California, Pacific Thomas Corporation filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 12-46534) in Oakland on Aug. 6, 2012, estimating in excess of $10 million in assets and liabilities. The Debtor is related to Pacific Thomas Capital, which specializes in real estate services, focusing on the investment, ownership and development of commercial real estate properties, according to http://www.pacificthomas.com/ Real estate activities has spanned throughout the Hawaiian Islands as well as U.S. West Coast locations in California, Nevada, Arizona and Utah. Hawaii based activities are managed under the name Thomas Capital Investments. Bankruptcy Judge M. Elaine Hammond presides over the case. Anne- Leith Matlock, Esq., at Matlock Law Group, P.C. The petition was signed by Jill V. Worsley, COO, secretary. In its schedules, the Debtor disclosed $19,960,679 in assets and $16,482,475 in liabilities as of the petition date. PATRIOT COAL: Wants Out of Coal Sales Deals With Parent ------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that Patriot Coal Corp. asked a New York bankruptcy court Thursday for permission to let a fellow Arch Coal Inc. spinoff out of an agreement it had reached with their parent company in 2005, saying this would save it tens of millions of dollars. Bankruptcy Law360 says Patriot seeks the rejection of a so-called master coal sales and services agreement, or MSA, Arch had reached with Magnum Coal Co., a fellow spinoff unit and debtor in the bankruptcy case. 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. PEREGRINE FINANCIAL: Trustee Wins Nod to Return $123M to Customers ------------------------------------------------------------------ Megan Stride at Bankruptcy Law360 reports that Peregrine Financial Inc.'s bankruptcy trustee won court approval Thursday to dole out $123 million to certain customers, after putting to bed the U.S. Commodity Futures Trading Commission's concerns and overcoming an objection from customers not included in those distributions. U.S. Bankruptcy Judge Carol A. Doyle gave the green light for the interim distribution plan, which Chapter 7 trustee Ira Bodenstein had agreed to put on hold last week, according to Bankruptcy Law360. 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. PLY GEM: S&P Affirms 'B-' Corp. Credit Rating; Outlook Positive --------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Cary, N.C.-based Ply Gem Industries Inc. (Ply Gem) to positive from stable. "At the same time, we affirmed our ratings on Ply Gem, including the 'B-' corporate credit rating," S&P said. "In addition, we assigned our 'CCC' issue-level rating (two notches lower than the corporate credit rating) to the company's proposed $160 million senior unsecured notes due 2017. The recovery rating on the notes is '6', indicating our expectation of negligible (0% to 10%) recovery in the event of a payment default. Proceeds of the proposed notes will be used to repay the company's existing 13.125% senior subordinated notes due 2014," S&P said. "The outlook revision reflects our expectation that Ply Gem's operating performance will improve over the next several quarters as residential construction markets recover, resulting in credit measures improving during this period in line with our forecast for double-digit growth in U.S. housing starts for 2013," said Standard & Poor's credit analyst Thomas Nadramia. "The outlook revision also takes into account an improved debt maturity profile following the issuance of the proposed senior unsecured notes." This transaction, if completed as anticipated, will extend the nearest debt maturity to January 2016, when Ply Gem's $212.5 million asset based revolving credit facility matures. Also, our rating and outlook also reflect our view that Ply Gem will maintain its adequate liquidity, despite high debt of approximately $1.1 billion (adjusted for operating leases and post-retirement obligations.)" "The ratings on Ply Gem reflect our expectation that the company will maintain its highly leveraged financial risk profile and 'weak' business risk profile. Its high debt levels, modest free cash flow, participation in highly cyclical residential construction markets, intense competition in the fragmented windows market, and exposure to volatile raw material costs support our assessment. In particular, resin and aluminum costs can temporarily lower operating margins until pricing can recover increased costs," S&P said. Ply Gem manufactures exterior building products, including siding, windows, and doors, for the residential construction market, which are sold primarily in the U.S. and Canada. "The positive outlook reflects our view of continued growth in demand for most of Ply Gem's products, fueled by an increase in housing starts that should lead to growth in EBITDA and result in improved credit measures by the end of 2013, while maintaining adequate liquidity. Under our base case scenario, we think EBITDA could reach approximately $170 million in 2013, reducing leverage to about 6.5x," S&P said. "We could raise our rating within 12 months if the anticipated improvement in housing and remodeling activity accelerates more quickly than our economist's current forecast, allowing Ply Gem to reduce and maintain leverage to 6x or less and funds from operations to debt of greater than 10%. This could occur if single family housing starts trend to 1 million or more in the 2013 building season, which we think would result in revenues of $1.3 Billion or more and EBITDA of $200 million," S&P said. "We would lower our rating if housing and repair activity are reduced from current levels, causing EBITDA to fall below $100 million or if liquidity became constrained. This could occur, in our view, in the event of a double-dip recession or large increases in commodity costs. For this to occur, we think housing starts would have to fall back below 600,000 total units," S&P said. PLY GEM: Moody's Rates $160-Mil. Senior Unsecured Notes 'Caa3' -------------------------------------------------------------- Moody's Investors Service assigned a Caa3 to Ply Gem Industries' proposed $160 million Senior Unsecured Notes due 2017, which will be the most junior committed debt in the company's capital structure. Proceeds from the notes issuance and some cash on hand will be used to redeem Ply Gem's existing $150 million Senior Subordinated Notes due 2014, and to pay redemption premiums and other fees and expenses. Moody's also affirmed the Corporate Family Rating and Probability of Default Rating at Caa1. The rating outlook is stable. The following ratings/assessments were affected by this action: Corporate Family Rating affirmed at Caa1; Probability of Default Rating affirmed at Caa1; 8.25% Sr. Secured Notes due 2018 affirmed at Caa1 (LGD4, 50%); and, Sr. Unsecured Notes due 2017 rated Caa3 (LGD6, 92%). RATINGS RATIONALE The Caa3 rating assigned to the proposed Senior Unsecured Notes due 2017, two notches below the corporate family rating, reflects their position as the most junior committed debt in Ply Gem's capital structure, putting it in a first-loss position relative to the company's secured debt. Proceeds from the proposed notes issuance and some cash on hand will be used to retire the existing Senior Subordinated Notes due 2014, at which time the ratings will be withdrawn, also to pay redemption premiums and other related fees and expenses. The proposed notes issuance will improve the company's cash flow by about $4 million since cash interest payments will be reduced due to the anticipated lower interest rate relative to the current rate for the Senior Subordinated Notes due 2014 despite a higher principal balance. The transaction also extends Ply Gem's debt maturity profile as the company faces no maturities for the next four years. The company's revolving credit facility will be extended to its legal maturity, which is January 2016, once the Senior Subordinated Notes due 2014 are redeemed. Ply Gem's Caa1 Corporate Family Rating remains constrained by its leveraged capital structure, despite prospects of a modest recovery in the company's end markets. Ply Gem's ability to generate meaningful levels of earnings and free cash flow relative to the amount of debt on its balance sheet remains limited. In addition, Ply Gem's price increases typically lag increases in the cost of its raw materials, such as resin and aluminum for siding, windows and doors. However, Moody's recognizes that new residential construction and repair and remodeling sectors, the company's primary end markets, are anticipated to show some recovery into 2013. Despite the likelihood of some margin expansion and new business, Ply Gem's debt leverage and interest coverage credit metrics will remain stressed. Following the proposed transaction, pro forma credit metrics for the 12 months ended June 30, 2012 will remain relatively unchanged, with debt leverage at 8.3 times and EBITA-to-interest expense slightly below 1.0 times (all ratios adjusted per Moody's methodology). Moody's considers Ply Gem's market position as one of the larger manufacturers of vinyl siding, windows and doors a credit positive. Ply Gem's vinyl siding segment has performed well during the downturn, but it has not fully offset weakness in other product lines. Revenues from windows and doors are derived mainly from the residential construction end market and are positioned to benefit from any rebound in new housing starts. When the company's end markets show sustainable growth Ply Gem needs to demonstrate the ability to generate significant levels of operating earnings and free cash flow. An improved liquidity profile and operating performance that results in debt-to-EBITDA remaining below 7.0 times or EBITA-to-interest sustained above 1.0 times and trending towards 1.25 times (all ratios incorporate Moody's standard adjustments) could result in positive rating actions. Factors that could result in a downgrade include operating performance below expectations or erosion in the company's financial performance due to an unexpected further decline in Ply Gem's end markets. Debt-to-EBITDA remaining above 8.5 times or EBITA-to-interest expense remaining below 0.75 times (all ratios incorporate Moody's standard adjustments) or a deteriorating liquidity profile could pressure the ratings. The principal methodology used in rating Ply Gem Industries, Inc. was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Ply Gem Industries, Inc, headquartered in Cary, NC, is a leading manufacturer of residential exterior building products in North America. The company's core products are vinyl siding, windows, patio doors, fencing, railing, and stone veneer, serving both the new construction and repair and remodeling end markets. CI Capital Partners LLC ("CI Capital"), through its respective affiliates, is the primary owner of Ply Gem. Revenues for the 12 months ended June 30, 2012 totaled about $1.1 billion. PROTEONOMIX INC: Amends Q2 2012 Quarterly Report ------------------------------------------------ Proteonomix, Inc., filed with the U.S. Securities and Exchange Commission an amendment to its quarterly report for the period ended June 30, 2012. The Company revised its income statement to reflect net income of $1.44 million on $0 of revenue for the three months ended June 30, 2012, compared with a net loss of $274,238 on $0 of revenue for the same period during the prior year. Proteonomix originally reported net income of $1.50 million on $0 of sales for the three months ended June 30, 2012, compared with a net loss of $274,238 on $0 of sales for the same period during the prior year. The Company's restated balance sheet at June 30, 2012, showed $5.75 million in total assets, $5.75 million in total liabilities and a $1,087 total stockholders' deficit, in comparison with $5.75 million in total assets, $6.33 million in total liabilities and a $584,199 total stockholders' deficit, as previously reported. A copy of the amended Form 10-Q is available for free at: http://is.gd/qWc4OQ About Proteonomix Proteonomix, Inc. (OTC BB: PROT) -- http://www.proteonomix.com/-- is a biotechnology company focused on developing therapeutics based upon the use of human cells and their derivatives. The Company reported a net loss applicable to common shares of $1.38 million in 2011, compared with a net loss applicable to common shares of $3.47 million in 2010. After auditing the financial statements for the year ended Dec. 31, 2011, KBL, LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has sustained significant operating losses and is currently in default of its debt instrument and needs to obtain additional financing or restructure its current obligations. QUALITY STORES: Circuits Split on Whether Severance Pay Is Wages ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that severance paid to employees under pre-bankruptcy agreements by a company liquidating in Chapter 11 is not "wages" subject to tax under the Federal Insurance Contributions Act, the U.S. Court of Appeals in Cincinnati ruled. FICA withholdings fund the Social Security and Medicare programs. According to the report, the ruling creates a conflict with another appeals court. The case involved Quality Stores Inc. which closed its nearly 400 stores while in Chapter 11. The company paid $1 million in FICA withholding taxes for employees and sued in bankruptcy court for a refund. The bankruptcy court agreed with the company and ordered a refund. On appeal, the Sixth Circuit in Cincinnati upheld the lower court in an opinion on Sept. 7 by U.S. Circuit Judge Jane B. Stranch. The Bloomberg report discloses that Judge Stranch declined to follow a 2008 case called CSX Corp. from the Court of Appeals for the Federal Circuit which reached the opposite result. The case is U.S. v. quality Stores Inc. (In re Quality Stores Inc.), 10-1563, U.S. 6th Circuit Court of Appeals (Cincinnati). About Quality Stores Based in Muskegon, Michigan, Quality Stores Inc. is a specialty retailer of farm and agriculture-related merchandise. On Oct. 22, 2001, the Company was sent to bankruptcy after a group of holders of the 10-5/8% senior notes filed an involuntary petition before the U.S. Bankruptcy Court for the Western District of Michigan, in Grand Rapids. Under laws relating to an involuntary bankruptcy filing, the Company is permitted to operate its business in the ordinary course, unless the Court orders otherwise. REDDY ICE: Settles Ice Price-Fixing Claims for $750,000 ------------------------------------------------------- Scott Flaherty at Bankruptcy Law360 reports that Reddy Ice Holdings Inc. reached a deal to settle allegations in Michigan federal court that it fixed prices on packaged ice, a proposed direct purchaser class said Wednesday. According to Bankruptcy Law360, Reddy Ice agreed to pay $750,000 to resolve allegations that it took part in a scheme to fix prices in the packaged ice industry. About Reddy Ice Reddy Ice Holdings Inc. and wholly owned subsidiary Reddy Ice Corp. manufacture and distribute packaged ice in the United States. As of Dec. 31, 2011, the Company had assets totaling $434 million and total liabilities of $531 million. The bulk of the liabilities were total debt outstanding of $471.5 million. Reddy Holdings and Reddy Corp. on April 12, 2012, filed voluntary Chapter 11 bankruptcy petitions (Bankr. N.D. Tex. Case Nos. 12- 32349 and 12-32350) together with a plan of reorganization and accompanying disclosure statement to complete a previously announced plan to strengthen its balance sheet and ensure strong financial footing for the future. As part of the restructuring, Reddy Ice seeks to pursue a strategic acquisition of all or substantially all of the businesses and assets of Arctic Glacier Income Fund and its subsidiaries, including Arctic Glacier Inc., a major producer, marketer and distributor of packaged ice in North America. Arctic Glacier on Feb. 22, 2012, filed for protection under the Companies' Creditors Arrangement Act in Canada and Chapter 15 of the Bankruptcy Code in the United States. Arctic is seeking sale or investment proposals from qualified bidders. Judge Stacey G. Jernigan presides over the case. Reddy Ice's financial advisors are Jefferies & Company, Inc. and FTI Consulting, Inc. Kurtzman Carson Consultants serves as claims and notice agent. Centerbridge Partners is represented by Jonathan S. Zinman, Esq., Joshua A. Sussberg, Esq., James H.M. Sprayregen, Esq., and Anup Sathy, Esq., at Kirkland & Ellis. Macquarie Bank Limited is represented by Sarah Hiltz Seewer, Esq., and David R. Seligman, Esq., also at Kirkland & Ellis. The ad hoc group of First Lien and Second Lien Noteholders is represented by Joshua Andrew Feltman, Esq., at Wachtell Lipton Rosen & Katz. Wells Fargo Bank, National Association, serves as First Lien and Second Lien Agent. Reddy Ice emerged from Chapter 11 protection at the end of May 2012. The plan reduced debt by $145 million and gave ownership of the company to affiliates of Centerbridge Partners. RG STEEL: Taps ASK LLP to Collect on Accounts Receivable -------------------------------------------------------- WP Steel Venture LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ ASK LLP as special counsel to review, analyze, collect and prosecute certain accounts receivable claims owed to the Debtors. ASK will charge legal fees on a contingency fee basis of 5% for all gross collections obtained on cases settled prior to the filing of a complaint, and 25% of all collections obtained on cases settled after the filing of a complaint. In addition, if ASK obtain a final judgment and need to engage in post judgment enforcement or if an appeal is filed by any party (including the Debtors) to a final judgment of the trial court, ASK will be entitled to an additional 5% for post judgment legal work. ASK has also agreed to import all necessary computer records and store paper files at no additional cost to the Debtors. The Debtors seek to engage ASK to commence collection of the Accounts Receivable immediately. Therefore, the Debtors request the retention of ASK be authorized nunc pro tunc to Sept. 10, 2012. ASK will advance all fees and expenses including adversary filing fees and seek reimbursement only from gross collections. To the best of the Debtor's knowledge, ASK is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. A hearing on Oct. 17, 2012, at 2 p.m. (ET) has been set. Objections, if any, are due Sept. 27, at 4 p.m. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as it's financial advisor. RG STEEL: Taps Hilco IP to Market Internet Protocol Numbers ----------------------------------------------------------- WP Steel Venture LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Hilco IP Services, LLC d/b/a Hilco Streambank as broker in connection with the marketing of certain of the Debtors' internet protocol numbers and other internet number resources nunc pro tunc to Aug. 31, 2012. The Debtors relate that their focus since the outset of these cases has been to monetize their assets and maximize recoveries to creditors. To that end, the Debtors sought a broker to assist in monetizing the IP Addresses. Following arms' length discussions, the Debtors selected Hilco Streambank as the exclusive broker for the IP Addresses and the Debtors and Hilco Streambank negotiated that certain engagement letter. Hilco IP will, among other things: a. collect and secure all of the available information and other data concerning the IP Addresses; b. develop and execute a sales and marketing program designed to elicit proposals to acquire the IP Addresses from qualified acquirers with a view toward completing one or more sales, assignments, licenses, or other dispositions of the IP Addresses; c. assist the Debtors in connection with the transfer of the IP Addresses to the acquirer(s) who offer the highest or Otherwise best consideration for the Intellectual Property; and d. potentially, and with the Debtors' advance consent, post the IP Addresses on the online sale platform of Hilco Streambank's affiliate, Hilco Superbid Services, LLC d/b/a HilcoBid. The Debtors request that Hilco Streambank be relieved of the requirements of the interim compensation order. In light of Hilco Streambank's largely commission-based compensation structure, the procedures detailed in the interim compensation order will burden? without providing any benefit to?the Debtors' estates. If the Debtors and Hilco Streambank are required to prepare, file and serve monthly and quarterly fee statements, substantial administrative costs and professional time may be incurred, without any benefit provided to these estates because Hilco Streambank's fee is largely a set-rate commission per transaction or a fee not paid by the Debtors at all. The Debtors and Hilco Streambank agreed to these terms: a. Hilco Streambank will be compensated by receiving either: (i) a commission of 12% of the aggregate Gross Proceeds generated from the sale, assignment, license, or other disposition of each block of the IP Addresses; or (ii) in the event that IP Addresses are sold through HilcoBid and subject to Hilco Streambank's sole discretion, a standard buyer's premium, in lieu of the Commission, of up to 12% of the aggregate gross receipts from the sale, license or other assignment of the IP Addresses. b. Hilco Streambank will be entitled to reimbursement by the Debtors of its reasonable out of pocket expenses incurred in connection with the provision of services under the Engagement Agreement only if approved in advance in writing by Company. To the best of the Debtors' knowledge, Hilco IP is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as it's financial advisor. RITZ CAMERA: To Shut Down Store in Old Town Alexandria ------------------------------------------------------ Sharon McLoone at OldTownAlexandriaPatch reports that Ritz Camera's on King Street is closing. The Old Town location at 600 King St. expects to operate through mid-October. According to the report, the move comes as brick-and-mortar consumer-electronics stores face hotter competition from online rivals and more people rely on smart phones to take pictures instead of buying cameras and other equipment. The report adds the company's restructuring includes the camera store closing 128 locations and cut its staff of 2,000 in half. Four locations in Virginia, including Old Town Alexandria, are going dark. About Ritz Camera Beltsville, Maryland-based Ritz Camera & Image LLC -- http://www.ritzcamera.com-- sells digital cameras and accessories, and electronic products. It sought Chapter 11 protection (Bankr. D. Del. Case No. 12-11868) on June 22, 2012, to close unprofitable stores. Ritz claims to be the largest camera and image chain the U.S., operating 265 camera stores in 34 states as well as an Internet business. Ritz Camera intends to shut 128 locations and cut its staff in half. Included in the closing are 10 locations in Maryland and 4 in Virginia. Affiliate Ritz Interactive Inc., owner e-commerce Web sites that include RitzCamera.com and BoatersWorld.com, also filed for bankruptcy. RCI's predecessor, Ritz Camera Centers, Inc., sought Chapter 11 protection (Bankr. D. Del. Case No. 09-10617) on Feb. 22, 2009. Ritz generated $40 million by selling all 129 Boater's World Marine Centers. A group that included the company's chief executive officer, David Ritz, formed Ritz Camera & Image to buy at least 163 of the remaining 375 camera stores. The group paid $16.25 million in cash and a $7.8 million note. Later, Ritz sold a $4 million account receivable for $1.5 million to an owner of the company that owed the debt. In the 2009 petition, Ritz disclosed total assets of $277 million and total debts of $172.1 million. Lawyers at Cole, Schotz, Meisel, Forman & Leonard, P.A., served as bankruptcy counsel. Thomas & Libowitz, P.A., served as the Debtor's special corporate counsel and conflicts counsel. Marc S. Seinsweig, at FTI Consulting, Inc., served as the Debtor's chief restructuring officer. Kurtzman Carson Consultants LLC acted as claims and noticing agent. Attorneys at Cooley Godward Kronish LLP and Bifferato LLC represented the official committee of unsecured creditors as counsel. In April 2010, the Court approved a liquidating Chapter 11 plan proposed by the company and the official creditor's committee. Under the Plan, unsecured creditors were to recover 4% to 14% of their claims. In the 2012 petition, RCI estimated total assets and liabilities of $50 million to $100 million. The Debtors owe not less than $16.32 million for term and revolving loans provided by secured lenders led by Crystal Finance LLC, as administrative agent. Attorneys at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as bankruptcy counsel. Kurtzman Carson Consultants LLC is the claims agent. WeinsweigAdvisors LLC's Marc Weinsweig has been appointed as Ritz's CRO. Mark L. Desgrosseilliers, Esq., and Ericka F. Johnson, Esq., at Womble Carlyle Sandridge & Rice, LLP, represent liquidators Gordon Brothers Retail Partners LLC and Hilco Merchant Resources LLC. Crystal Finance, the DIP lender, is represented by Morgan, Lewis & Bockius and Young Conaway Stargatt & Taylor LLP. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven creditors to serve on the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee tapped Cooley LLP as its lead counsel, Richards, Layton & Finger, P.A. as its Delaware counsel, and PricewaterhouseCoopers LLP as its financial advisor. RR DONNELLEY: Fitch Downgrades IDR to 'BB'; Outlook Still Negative ------------------------------------------------------------------ Fitch Ratings has assigned a 'BBB-' rating to R.R. Donnelley & Sons Company's (RRD) proposed senior secured bank credit facility of up to $1.25 billion. Fitch has also downgraded RRD's Issuer Default Rating (IDR) and senior unsecured notes and debentures to 'BB' from 'BB+'. The Rating Outlook remains Negative. The new secured facility will replace the $1.75 billion unsecured credit facility, which was due to expire in December 2013. While the total facility has been reduced, Fitch notes that availability under the $1.75 billion had been constrained by the bank agreement leverage covenant. Fitch believes that the $1.25 billion secured facility will provide sufficient liquidity to support operations and investments. Terms of the proposed credit facility have not been disclosed. The notching on the secured credit facility reflects the benefit from its security package and resulting priority in the capital structure. The ratings and Negative Outlook reflect the secular challenges facing RRD. In Fitch's view, more than 50% of RRD's revenues face some degree of secular headwinds (catalogs, magazines, books, directories, variable, commercial and financial print). Fitch does not believe certain sub-segments will exhibit positive organic growth going forward. Fitch believes RRD carries a high level of debt given the secular challenges facing the company. As of June 30, 2012, RRD had total debt of $3.8 billion. As with other issuers and segments with uncertain business prospects, Fitch will weight secular issues, organic growth and absolute levels of debt reduction more prominently than backward looking leverage metrics. Based on current expectations, Fitch believes that the company has the financial flexibility to reduce debt levels; however, Fitch is concerned that an acceleration in secular driven revenues declines may impair that ability. Fitch believes that the company's financial and management strategies are appropriate and prudent for the current ratings. Management has publicly stated its intentions to reduce absolute levels of debt. Fitch calculates unadjusted gross leverage (without adding back restructuring charges) at 3.2 times (x). Debt reduction will need to be a primary use of free cash flow (FCF) going forward in order to maintain current ratings. There is no tolerance in the ratings for material share buy backs and/or increases in the current dividend level. RRD expects approximately $300 million in FCF (after dividends). Fitch believes this is achievable. Fitch expects 2012 full year revenues to be down in the low single digits, and EBITDA to remain unchanged relative to 2011 EBITDA of $1.2 billion. Fitch's base case model assumes that pressures in the Books and Directories segment accelerate and revenues in this business line declines in the mid-teens starting in 2013. The ratings also reflect RRD's scale and diverse product offering as the largest commercial printer in the U.S. and worldwide. The U.S. commercial printing market size is approximately $140 billion. RRD is one of few well-capitalized competitors in this highly fragmented and sizeable industry. The significant addressable market share that RRD could capture from rivals may provide some offset to secular pressures. Liquidity: Fitch calculates RRD's FCF (after dividends) for the last 12 months ended June 30, 2012 at $381 million. RRD's pension was $1 billion underfunded at the end of 2011. The company intends to contribute $205 million to its various retirement funds, including its pension, in 2012. The 2012 contribution is reflected in Fitch's FCF expectations. The contributions reflect the passing of the Moving Ahead for Progress in the 21st Century Act, which provided pension funding relief. As of June 30, 2012, the company held $369 million in cash ($338 million located outside of the U.S.) and had $325 million drawn under its credit facility. RRD's next bond maturity is its $258 million 4.95% notes due in April 2014, $300 million 5.5% notes due in May 2015 and its $350 million 8.6% notes due in August 2016. What could trigger a rating action: Negative: Sustained revenue declines in the low to mid-single digits and/or heightened concerns regarding secular challenges would likely result in a one notch rating downgrade. Positive: Ratings may be stabilized if the company executes on its intention to reduce absolute levels of debt and is able to demonstrate organic revenue growth. S&P CONVERYORS: Files for Chapter 11 Bankruptcy Protection ---------------------------------------------------------- Philly.com, citing the Legal Intelligencer, reports S&P Conveyors Inc., in 168 E. Ridge Road, Nottingham, New Jersey, has filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of New Jersey. The Company has yet to file its schedules. SAAB CARS: Court Orders Ally to Turn Over Loan Documents -------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that a Delaware bankruptcy judge on Thursday ordered Ally Financial Inc. to begin handing over documents to Saab Cars North America Inc.'s creditors, who are trying to determine if the lender is paying SCNA its fair share of $16.5 million raised from selling 900 vehicles that were collateral for a loan. Two weeks ago, SCNA's official committee of unsecured creditors moved to compel documents pertaining to Ally's $61 million bankruptcy claim, which stems from SCNA's guarantee of a loan to its bankrupt Swedish parent ? Saab Automobile, according to Bankruptcy Law360. About Saab Cars N.A. More than 40 U.S.-based Saab dealerships have signed an involuntary chapter 11 bankruptcy petition for Saab Cars North America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30, 2012. The petitioners, represented by Wilk Auslander LLP, assert claims totaling $1.2 million on account of "unpaid warranty and incentive reimbursement and related obligations" and/or "parts and warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia Gentile & Associates, in New York, signed the Chapter 11 petition on behalf of the dealers. Donlin, Recano & Company, Inc. (DRC), has been retained to provide claims and noticing agent services to Saab Cars North America, Inc. in its Chapter 11 case. The dealers want the vehicle inventory and the parts business to be sold, free of liens from Ally Financial Inc. and Caterpillar Inc., and "to have an appropriate forum to address the claims of the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg News. Saab Cars N.A. is the U.S. sales and distribution unit of Swedish car maker Saab Automobile AB. Saab Cars N.A. named in December an outside administrator, McTevia & Associates, to run the company as part of a plan to avoid immediate liquidation following its parent company's bankruptcy filing. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy on Dec. 19, 2011, after running out of cash. On Feb. 24, 2012, the Court, inconsideration of the petition filed on Jan. 30, 2012, granted Saab Cars North America, Inc., relief under Chapter 11 of the Bankruptcy Code. On March 9, 2012, the U.S. Trustee formed an official Committee of Unsecured Creditors and appointed these members: Peter Mueller Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander LLP as general bankruptcy counsel, and Polsinelli Shughart as its Delaware counsel. SECOND CHANCE: Reaches $3.6 Million Deal in FCA Suit ---------------------------------------------------- Carolina Bolado at Bankruptcy Law360 reports that Second Chance Body Armor Inc. on Thursday, via a $3.6 million allowed claim, settled out of a False Claims Act suit brought by a former employee alleging the bankrupt manufacturer used defective Zylon in bulletproof vests. Bankruptcy Law360 relates that U.S. District Judge Richard W. Roberts dismissed the claims against Second Chance corporate entities after the parties told the court they had resolved their allegations in the FCA suit through Second Chance's Chapter 11 proceedings in the Western District of Michigan. About Second Chance Based in Central Lake, Michigan, Second Chance Body Armor, Inc. -- http://www.secondchance.com/-- manufactured wearable and soft concealable body armor. The Company filed for Chapter 11 protection (Bankr. W.D. Mich. Case No. 04-12515) on Oct. 17, 2004 after recalling more than 130,000 vests made wholly of Zylon, but it did not recall vests made of Zylon blended with other protective fibers. Stephen B. Grow, Esq., at Warner Norcross & Judd, LLP, represented the Debtor. Daniel F. Gosch, Esq., at Dickinson Wright PLLC, represented the Official Committee of Unsecured Creditors. The Debtor's case converted to a Chapter 7 proceeding on Nov. 22, 2005. James W. Boyd, Esq., serves as the chapter 7 trustee and is represented by Ronald A. Schuknecht, Esq., at Lewis Schuknecht & Keilitz PC. When the Debtor filed for protection from its creditors, it estimated assets and liabilities of $10 million to $50 million. SHAMROCK-HOSTMARK: Can Use Lender's Cash Collateral Until Oct. 31 ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois authorized in a third interim order Shamrock-Hostmark Princeton Hotel, LLC, to use cash collateral of General Electric Capital Corporation (including any cash collateral relating to the Hotel's room revenues and food and beverage revenues) through the earlier of: (a) Oct. 31, 2012, or (b) the occurrence of the effective date or consummation of a plan of reorganization, pursuant to a budget. The authorization to use cash collateral may not be extended other than on the express written consent of GE Capital or order of the Court. As adequate protection, the Debtor will continue operating the Hotel and using cash collateral to pay operating expenses of the Hotel. GE reserves the right to seek additional adequate protection at any time. As additional adequate protection, GE is granted replacement liens upon all of the currently owned or hereafter acquire property and assets of Debtor and all proceeds, products, rents, and profits generated. A hearing to consider the Debtors' further use of cash collateral is currently scheduled for Oct. 25, 2012, at 10:00 a.m. About Shamrock-Hostmark Schaumburg, Ill.-based Shamrock-Hostmark Princeton Hotel, LLC, filed for Chapter 11 protection (Bank. N.D. Ill. Case No. 12- 25860) on June 27, 2012. William Gingrich signed the petition as vice president-CFO, of Hostmark Hospitality Group. The Debtor estimated assets and debts of $10 million to $50 million. Judge Jacqueline P. Cox presides over the case. Shamrock-Hostmark Andover and four affiliates are units of investment fund Shamrock-Hostmark Hotel Fund that own hotels. Shamrock-Hostmark Princeton owns the DoubleTree by Hilton Hotel Princeton located in Princeton, New Jersey. Shamrock-Hostmark Texas owns Crowne Plaza Hotel in San Antonio, TX. Shamrock- Hostmark Palm owns Embassy Suites Palm Desert in Palm Desert, CA. Shamrock-Hostmark Andover owns the Wyndham Boston Andover in Andover, MA. Shamrock-Hostmark Tampa owns the DoubleTree by Hilton Hotel Tampa Airport - Westshore in Tampa, FL. The Debtors are represented by David M. Neff, Esq., at PERKINS COIE LLP, in Chicago, Illinois. SHAMROCK-HOSTMARK: Files Schedules of Assets and Liabilities ------------------------------------------------------------ Shamrock-Hostmark Princeton Hotel, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Illinois its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- -------- ----------- A. Real Property $0 B. Personal Property $522,413 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $14,962,376 E. Creditors Holding Unsecured Priority Claims $76,050 F. Creditors Holding Unsecured Non-priority Claims $419,386 -------- ----------- TOTAL $522,413 $15,457,812 A copy of the SAL is available at: http://bankrupt.com/misc/shamrock-hostmark.doc48.pdf About Shamrock-Hostmark Schaumburg, Ill.-based Shamrock-Hostmark Princeton Hotel, LLC, filed for Chapter 11 protection (Bank. N.D. Ill. Case No. 12- 25860) on June 27, 2012. William Gingrich signed the petition as vice president-CFO, of Hostmark Hospitality Group. The Debtor estimated assets and debts of $10 million to $50 million. Judge Jacqueline P. Cox presides over the case. Shamrock-Hostmark Andover and four affiliates are units of investment fund Shamrock-Hostmark Hotel Fund that own hotels. Shamrock-Hostmark Princeton owns the DoubleTree by Hilton Hotel Princeton located in Princeton, New Jersey. Shamrock-Hostmark Texas owns Crowne Plaza Hotel in San Antonio, TX. Shamrock- Hostmark Palm owns Embassy Suites Palm Desert in Palm Desert, CA. Shamrock-Hostmark Andover owns the Wyndham Boston Andover in Andover, MA. Shamrock-Hostmark Tampa owns the DoubleTree by Hilton Hotel Tampa Airport - Westshore in Tampa, FL. The Debtors are represented by David M. Neff, Esq., at PERKINS COIE LLP, in Chicago, Illinois. SHINER CHEMICALS: Bankruptcy Judge Closes Chapter 11 Case --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona closed the Chapter 11 case of Shiner Warehouse, LLC. The Court entered an order dismissing the Debtor's case on July 13, 2012. As reported in the Troubled Company Reporter on Dec. 28, 2011, the Debtor asked that the Court dismiss the involuntary Chapter 11 petition filed against it by petitioners Aaron J. Valenzuela, Sherri S. Parkin and Peter J. Workum who claim to be creditors of the Debtor. The Debtor contended there is a bona fide dispute as to liability regarding Valenzuela and Parkin's claims. The Debtor admitted borrowing from Workum, but raises a bona fide dispute as to the claim amount, and terms of repayment. The Debtor further argued that the petitioners' claims were brought in bad faith, and thus the Debtor sought its reasonable attorney's fees and punitive damages. About Shiner Warehouse Aaron J. Valenzuela, Sherri S. Parkin and Peter J. Workman filed an involuntary Chapter 11 petition against Shiner Warehouse, LLC (Bankr. D. Ariz. Case No. 11-28103) on Oct. 4, 2011. Judge Sarah Sharer Curley presides over the case. Orlo D. Ison is the sole member of the Debtor. David Miles McGuire Gardner, PLLC and James M. McGuire, Esq., obtained permission from the U.S. Bankrupcy Court to withdraw as counsel for the Debtor. SOLYNDRA LLC: Plant Slated for Mid-November Bankruptcy Sale ----------------------------------------------------------- Peg Brickley at Dow Jones' Daily Bankruptcy Review reports that Solyndra LLC Monday set a mid-November auction for its Fremont, Calif., facility, a solar power equipment plant built with a $527 million loan from taxpayers. About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. The Official Committee of Unsecured Creditors of Solyndra LLC has tapped Blank Rome LLP as counsel and BDO Consulting as financial advisors. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. An auction in June generated $1.79 million from the sale of 7,200 lots of equipment. Solyndra filed a liquidating plan at the end of July and scheduled a hearing on Sept. 7 for approval of the explanatory disclosure statement. The Plan is designed to pay 2.5% to 6% to unsecured creditors with claims totaling as much as $120 million. Unsecured creditors with $27 million in claims against the holding company are projected to have a 3% dividend. SOLYNDRA LLC: To Pay Part of $13 Million Ex-Landlord Claim ---------------------------------------------------------- Max Stendahl at Bankruptcy Law360 reports that Solyndra LLC has agreed to pay a portion of a $13.2 million damages claim by the former landlord of its Fremont, Calif., manufacturing facility, which was shuttered when the company tumbled into bankruptcy, according to court documents filed Thursday. Bankruptcy Law360 relates that the defunct solar energy company asked a Delaware federal judge to approve the agreement, which gives Calaveras LLC two general unsecured rejection claims worth a total of $13.2 million, representing damages from Solyndra's rejection of the lease. About Solyndra LLC Founded in 2005, Solyndra LLC was a U.S. manufacturer of solar photovoltaic solar power systems specifically designed for large commercial and industrial rooftops and for certain shaded agriculture applications. The Company had 968 full time employees and 211 temporary employees. Solyndra has sold more than 500,000 of its panels since 2008 and generated cumulative sales of over $250 million. Fremont, California-based Solyndra and affiliate 360 Degree Solar Holdings Inc. sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12799) on Sept. 6, 2011. Solyndra is at least the third solar company to seek court protection from creditors since August 2011. Judge Mary F. Walrath presides over the Debtors' cases. The Debtors are represented by Pachulski Stang Ziehl & Jones LLP as legal adviser. AlixPartners LLP serves as noticing claims and balloting agent. Imperial Capital LLC serves as the company's investment banker and financial adviser. The Debtors also tapped former Massachusetts Governor William F. Weld, now with the law firm McDermott Will & Emery, to represent the company in government investigations and related litigation. BDO Consulting, a division of BDO USA, LLP, as financial advisor and BDO Capital Advisors, LLC, serves as investment banker for the creditors' panel. The Official Committee of Unsecured Creditors of Solyndra LLC has tapped Blank Rome LLP as counsel and BDO Consulting as financial advisors. In October 2011, the Debtors hired Berkeley Research Group, LLC, and designated R. Todd Neilson as Chief Restructuring Officer. Solyndra owed secured lenders $783.8 million, including $527.8 million to the U.S. government pursuant to a federal loan guarantee, and held assets valued at $859 million as of the Petition date. The U.S. Federal Financing Bank, owned by the U.S. Treasury Department, is the Company's biggest lender. When they filed for Chapter 11, the Debtors pursued a two-pronged strategy to effectuate either a sale of their business to a "turnkey" buyer who may acquire substantially all of Solyndra's assets or, if the Debtors were unable to identify any potential buyers, an orderly liquidation of the assets for the benefit of their creditors. Solyndra did not receive acceptable offers to buy the business as a going concern. Two auctions late last year brought in a total of $8 million. A three-day auction in February generated another $3.8 million. An auction in June generated $1.79 million from the sale of 7,200 lots of equipment. Solyndra filed a liquidating plan at the end of July and scheduled a hearing on Sept. 7 for approval of the explanatory disclosure statement. The Plan is designed to pay 2.5% to 6% to unsecured creditors with claims totaling as much as $120 million. Unsecured creditors with $27 million in claims against the holding company are projected to have a 3% dividend. SOUTHERN FOREST: Amends Schedules of Assets and Liabilities ----------------------------------------------------------- Southern Forest Land Inc. submitted to the U.S. Bankruptcy Court for the Middle District of Alabama an amendment to its schedules of assets and liabilities, specifically revising its list of personal property assets. The Company disclosed: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $13,203,650 B. Personal Property $117,019 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $12,589,795 E. Creditors Holding Unsecured Priority Claims $1,410 F. Creditors Holding Unsecured Non-priority Claims $2,794,466 ----------- ----------- TOTAL $13,320,669 $15,385,671 The Company in its original schedules disclosed $13,318,169 in assets, including $114,519 in real property. A copy of the SALs, as amended, is available at: http://bankrupt.com/misc/southernforest.doc56.pdf Troy, Alabama-based Southern Forest Land, Inc., filed for Chapter 11 bankruptcy (Bankr. M.D. Ala. Case No. 12-10464) on March 20, 2012, estimating $10 million to $50 million in both assets and debts. Judge William R. Sawyer presides over the case. Collier H. Espy, Jr., at Espy, Metcalf & Espy, P.C., serves as the Debtor's counsel. The petition was signed by Grable L. Ricks, III, president. The Bankruptcy Administrator for the Middle District of Alabama said an official committee of unsecured creditors could not be appointed in the case. SOUTHERN GRAPHICS: Moody's Assigns 'B2' CFR; Outlook Stable ----------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating ("CFR") and B2 Probability of Default Rating ("PDR") to Southern Graphics Inc. ("SGS"), a holding company that will own existing rated entity SGS International, Inc, assigned B1 ratings to the company's proposed senior secured credit facilities, and assigned a Caa1 rating to its proposed senior unsecured notes. Proceeds are expected to help finance Onex Corporation's $813 million (plus customary fees and expenses) secondary leveraged buyout of SGS and refinance existing debt. The rating outlook is stable. The proposed transaction more than doubles funded debt to $575 million at closing from about $255 million reported on June 30, 2012. As a result, Moody's expects lease-adjusted financial leverage to rise to the low 6 times Debt/EBITDA range from the low 3 times, and interest coverage to decline to the mid 1 times (EBITDA-CapEx)/Interest level from 3 times in the current capital structure. The deterioration in credit metrics is well in excess of the tolerance built into the existing B1 CFR at SGS International, Inc., including leverage above 4.5 times and interest coverage below 2.5 times. Assignments: Issuer: Southern Graphics Inc. Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2 $75 million Senior Secured Revolving Credit Facility due 2017, Assigned B1 (LGD3 34%) $375 million Senior Secured Term Loan B due 2019, Assigned B1 (LGD3 34%) $200 million Senior Unsecured Notes due 2020, Assigned Caa1 (LGD5 87%) Outlook, Stable RATING RATIONALE The assigned ratings are subject to Moody's review of final terms and conditions of the proposed transaction, which is expected to close in the fourth quarter. The company's existing ratings at the entity SGS International Inc. and ratings on its existing bonds will be withdrawn at closing. RATINGS RATIONALE The B2 CFR is principally constrained by a highly leveraged balance sheet and event risks that could limit improvement in these metrics in the near-term. Financial leverage and interest coverage are somewhat weak for the rating category, but offset by a strong track record of stable earnings performance and Moody's expectations for free cash flow-to-debt in the low-to-mid single digit range. The rating incorporates tolerance for SGS to continue to pursue an acquisition-based growth strategy within the highly- fragmented graphic services market, as supported by expected revolving credit capacity in excess of operating needs and minimal financial maintenance covenants in the proposed credit agreement. The rating also reflects concerns related to the company's small scale, geographic concentration, product concentration, and limited organic growth prospects. Notwithstanding these risks, the rating anticipates relatively stable EBITDA generation through economic cycles driven by the company's strong market position, long-standing customer relationships with major consumer product companies, and a variable cost structure. Good liquidity also supports the rating, including an undrawn $75 million revolver. The stable rating outlook anticipates continued stable operating performance and good liquidity. Moody's could upgrade the ratings with expectations for financial leverage sustained below 4.5 times, interest coverage sustained above 2.5 times, and free cash flow sustained above 10% of debt, though the company's ability to pursue shareholder returns or debt-funded acquisitions outside the boundaries of these metrics would be taken into consideration in the context of any positive action. Conversely, Moody's could downgrade the ratings with expectations for financial leverage above 6.5 times, deterioration in interest coverage toward 1.25 times, or free cash flow of less than 2% of debt. Deterioration in liquidity, an accelerating pace or expanding size of debt-funded acquisitions, or evidence of an increasingly competitive business environment could also have negative rating implications. The principal methodology used in rating Southern Graphics was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Onex Corporation is acquiring Southern Graphics, Inc., a holding company of SGS International, Inc., in a transaction expected to close in the fourth quarter of 2012. Court Square Capital Partners has owned SGS International since 2005 and will exit following the completion of the transaction. SGS International, Inc., headquartered in Louisville, Kentucky, is a global leader in the digital imaging and communication industry, offering design-to-print graphic services to the international consumer products packaging market. The company offers a full spectrum of digital solutions that streamline the capture, management, execution and distribution of graphics information. Customers in food and beverage end markets account for the majority of sales, followed by customers in personal care, household products, retail sectors. SGS generated approximately $389 million of revenue in the twelve months ended June 30, 2012. SP NEWSPRINT: Changes Company Name Following Sale of Assets ----------------------------------------------------------- The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware signed an agreed order dated Sept. 13, 2012, converting SP Newsprint Holdings LLC and its affiliates' cases to cases under Chapter 7 of the Bankruptcy Code, in accordance with the Sept. 7, sale order. The agreed order provides for, among other things: -- the U.S. Trustee will appoint a Chapter 7 trustee in the Debtors' cases; -- the Debtors are deemed excused from complying with the requirements set forth in Bankruptcy Rule 1019(5)(A)(i) after the conversion because, among other things, the Debtors and purchaser SPN Acquisition Co, LLC in the assets purchase agreement and sale order have provided for the satisfaction of all claims that would have otherwise been listed on the schedule required under Bankruptcy Rule 1019(5)(A)(i); -- the caption for the cases will changed as: 1. SP Newsprint Holdings LLC to Holding Liquidating II LLC; 2. SP Newsprint Co., LLC to Dublin Liquidation LLC; 3. SP Recycling Corporation to Recycling Liquidation Corporation; and 4. SEP Technologies, L.L.C. to Technologies Liquidation LLC. A copy of the agreed order is available for free at http://bankrupt.com/misc/SPNewsprint_caseconversion_order.pdf 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. SP Newsprint Holdings 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. SPIRIT FINANCE: To Issue 3.1MM Common Shares Under Incentive Plan ----------------------------------------------------------------- Spirit Realty Capital, Inc., formerly Spirit Finance Corp., filed with the U.S. Securities and Exchange Commission a Form S-8 prospectus relating to the registration of 3.1 million shares of common stock issuable under the Company's 2012 Incentive Award Plan. The proposed maximum aggregate offering price is $46.7 million. A copy of the prospectus is available for free at: http://is.gd/vgYw5a About Spirit Finance Spirit Finance Corporation, headquartered in Phoenix, Arizona, is a REIT that acquires single-tenant, operationally essential real estate throughout United States to be leased on a long-term, triple-net basis to retail, distribution and service-oriented companies. * * * As reported by the TCR on Feb. 16, 2012, Standard & Poor's Ratings Services affirmed its 'CCC+' corporate credit rating on Spirit Finance Corp and the Company's 'CCC+' issue-level rating on the company's term loan. In the Sept. 15, 2011, edition of the TCR, Moody's Investors Service affirmed the corporate family rating of Spirit Finance Corporation at Caa1. "This rating action reflects Spirit's consistent compliance with its term loan covenants throughout the downturn (despite relatively thin cushion at certain times), as well as the recent debt paydown which, in Moody's view, will help Spirit remain in compliance within the stated covenant limits going forward." ST. IGNACE, MI: Fitch Downgrades Rating on Tax Bonds to 'BB' ------------------------------------------------------------ Fitch Ratings downgrades and withdraws its rating on the following outstanding St. Ignace, Michigan (the city) general obligation (GO) bonds: -- $250,000 (Recreation Center Project) GO unlimited tax bonds series 1998 (matures 11/1/13) to 'BB' from 'BBB-'. The Rating Outlook is Negative. SECURITY The bonds are secured by the city's full faith and credit and unlimited taxing power. KEY RATING DRIVERS WEAK FINANCIAL PERFORMANCE: The downgrade to 'BB' from 'BBB-' reflects the city's worse-than-expected financial performance in 2011 and continued draws on cash outside the general fund, further pressuring the city's already distressed financial profile. The downgrade also reflects Fitch's opinion that financial monitoring tools are weak leaving the city unable to present its interim budget performance and liquidity position in a robust manner. OUTLOOK CONSIDERATIONS: The city has made adjustments to its revenue and expenditure profile over the past year. However, the Negative Outlook reflects Fitch's belief that recent adjustments may not be sufficient to stabilize the city's financial position and that further budget adjustments will be difficult for the city to realize because of the city's limited revenue raising capacity and challenges facing the city in implementing the draconian cuts contemplated for the 2013 budget. WITHDRAW FOR INFORMATION LIMITATIONS: Although the level of ongoing information available is insufficient for Fitch to continue to properly assess the city's credit quality, Fitch believes that the 'BB' rating most accurately reflects the city's current credit position based on the limited available information. SMALL, TOURISM-BASED ECONOMY: The city's location as the gateway to the Upper Peninsula, with ferry service to Mackinac Island, underpins the tourism-based economy. Wide swings in monthly unemployment underscore the seasonal nature of the attractions. ABOVE-AVERAGE DEBT BURDEN: Overall debt burden is elevated, at 6.3% of market value. Payout for general fund debt is slow with only 36% scheduled for retirement in 10 years. Future borrowing plans are modest. CREDIT PROFILE SMALL, TOURISM-BASED ECONOMY St. Ignace is a relatively small city, with a year-round population of 2,452, although officials report that the population swells to approximately 30,000 during the summer months. The city benefits from its location on the north side of the Mackinac Bridge, which connects the Lower and Upper Peninsulas in Michigan. Proximity to Mackinac Island adds to the tourist allure. Full market value of the city's tax base is $183 million, down 18% from its peak in 2007. The seasonal nature of the economy is evident in the monthly unemployment trends, which show below average rates May through October, and well above average rates for the remaining months of the year. Year-over-year analysis shows little recessionary impact on summer unemployment rates; winter rates ranged from about 28% at the height of the downturn in winter, 2010, versus roughly 22% in winter 2008. Per capita income for year-round residents is 85% of the state and 79% of the U.S., reflecting the rural area, limited service-based economy, high seasonal unemployment, and higher than average proportion of retired residents. The individual poverty rate is approximately a third of the state's rate. CONTINUED FISCAL CHALLENGES After several years of challenged financial operations, the city's general fund carried a scant unreserved general fund balance at the end of 2010 of $62,660 or 3.3% of $1.7 million in general fund spending. The city's finances remain challenged with an operating deficit in 2011 which was worse than projected. The city was able to boost its unrestricted general fund balance to 10% of spending through a transfer in of approximately $260,000 from the city's capital improvement trust capital project fund. Without this transfer, the city would have ended fiscal 2011 with a general fund deficit. For 2012, management reports having reduced expenditures by approximately $120,000, including the elimination of two fulltime positions and various operational savings, and raised revenue. Fitch notes that the city raised its millage to its legal maximum, reportedly generating approximately $72,000 in 2012 as well as enacting a franchise fee believed to generate approximately $25,000 annually. The city is attempting to decrease the reliance of other funds on the general fund by raising water and sewer fees and non-general fund millages. Management projects positive operations for 2012; however, Fitch views these projections skeptically due to the city's history of inconsistent financial operating and reporting practices. Management anticipates continued cost reductions in 2013, though Fitch believes that various public safety adjustments may be challenging for the city to realize. The city anticipates requesting a 2.0 mill public safety millage in May 2013, representing approximately $150,000 annually or 7.5% of 2012 budgeted expenditures. Fitch believes prospects for passage of the new millage are uncertain, as voters have shown little support in the past and most recently voted down a similar measure in August 2011. PRONOUNCED LIQUIDITY CONCERNS Liquidity strain is evident in the depleted cash position of the general fund, which at the end of 2011 reported a scant $12,000 (0.6% of 2011 spending or two days of operations). Additionally, the city tapped a substantial portion of its internally borrowable resources in 2011 to prop up its general fund, depleting an important source of the city's liquidity. Management reports that current general fund cash balance is approximately $343,000 (approximately 50 days of operations), the high point in the city's annual cash flows. The city reports an additional cash balance of $215,000 in internal borrowable resources. Fitch believes that the information management has provided may not represent the city's current cash position given substantial adjustments that the city's auditor has made to the city's financials in the past. City audits include material weaknesses in the areas of financial statement production, material audit adjustments, and timely cash reconciliation. Fitch notes a liability of 'checks issued in excess of cash' on the balance sheet, amounting to $5,000 across governmental funds in fiscal 2011, down from $50,000 in 2010. Officials report the purchase of new software to help them track cash flow as well as the hiring of an accounting firm to aid in cash reconciliation. The efficacy these measures may have is unknown. No cash flow borrowing is planned. ABOVE AVERAGE DEBT BURDEN The city's debt burden is high at 6.9% of market value including overlapping county and school debt. Much of the city's debt is enterprise-related, but sewer-related debt cannot be considered entirely self-supporting due to reliance upon the general fund for support. Officials have implemented phased utility rate hikes, which should improve the enterprise revenue stream and may relieve pressure on the general fund. Debt service represents an average burden on the operating budget, claiming almost 12% of general, debt service and special revenue fund spending in 2011. No further borrowing is planned. St. Ignace participates in the Municipal Employees Retirement System of Michigan (MERS), which is a state-run agent multiple- employer plan. The city consistently funds its annual required contribution (ARC), which represented 10.3% of operating fund spending in fiscal 2011, and the plan was 72% funded as of year- end 2010. Using Fitch's more conservative 7% discount rate assumption, funding drops to 65%. Other post-employment benefits (OPEB) are funded on a pay-go basis, with payments accounting for roughly 2.6% of spending. The unfunded accrued liability is equivalent to a moderate 1.2% of market value. The city recently changed the levels of health care provided to retirees, in an effort to limit its future OPEB liability. TELLICO LANDING: Chapter 11 Reorganization Case Dismissed --------------------------------------------------------- The Hon. Marcia Phillips Parsons of the U.S. Bankruptcy Court for the Eastern District of Tennessee dismissed the Chapter 11 case of Tellico Landing, LLC, upon the request of Robert T. Stooksbury, Jr., on March 20, 2012. Tellico Landing, LLC, based in Maryville, Tennessee, is engaged in the development and sale of an upscale residential community along and near Tellico Lake known as "Rarity Pointe". The Company filed for Chapter 11 bankruptcy (Bankr. E.D. Tenn. Case No. 11-33018) on June 27, 2011. The case has been assigned to Judge Marcia Phillips Parsons. Thomas Lynn Tarpy, Esq., of Hagood Tarpy & Cox PLLC, represented the Debtor. The Debtor scheduled $40,444,352 in assets and $8,532,455 in liabilities. The petition was signed by Michael L. Ross, its chief manager. THINKFILM LLC: Judge May Dismiss Bergstein's Law Firm Suit ---------------------------------------------------------- Erin Coe at Bankruptcy Law360 reports that a California state court recently issued a tentative ruling that seeks to dismiss a suit by film producer David Bergstein alleging law firms used his longtime attorney to gather confidential information for Aramid Entertainment Fund Ltd.'s litigation war against him, finding that Mr. Bergstein's claims stemmed from the defendants' protected conduct in litigation and bankruptcy proceedings. About Thinkfilm LLC CapCo Group LLC and four other companies controlled by David Bergstein are part of a wider network of entities that distribute and finance films. Among the approximately 1,300 films they have the rights to are "Boondock Saints" and "The Wedding Planner." Several creditors filed for involuntary Chapter 11 bankruptcy against the companies on March 17, 2010 -- CT-1 Holdings LLC (Bankr. C.D. Calif. Case No. 10-19927); CapCo Group, LLC (Bankr. C.D. Calif. Case No. 10-19929); Capitol Films Development LLC (Bankr. C.D. Calif. Case No. 10-19938); R2D2, LLC (Bankr. C.D. Calif. Case No. 10-19924); and ThinkFilm LLC (Bankr. C.D. Calif. Case No. 10-19912). Judge Barry Russell presides over the cases. The Petitioners are represented by David L. Neale, Esq., at Levene Neale Bender Rankin & Brill LLP. Judge Barry Russell formally declared David Bergstein's ThinkFilm LLC and Capitol Films Development bankrupt on Oct. 5, 2010. Mr. Bergstein is being sued for tens of millions of dollars by nearly 30 creditors -- including advertisers, publicists and the Writers Guild West. Five Bergstein controlled companies have been named in the suit. TRIZETTO GROUP: S&P Affirms 'B' CCR; Outlook Stable --------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Denver-based health care information technology (HCIT) provider TriZetto Group Inc. The outlook is stable. "At the same time, we assigned our 'CCC+' issue-level rating and a '6' recovery rating to the company's $150 million second-lien term due 2019. The '6' recovery rating indicates our expectation of negligible (0% to 10%) recovery in the event of payment default," S&P said. "We also affirmed our 'B' issue-level rating on the company's first-lien credit facilities comprising a $650 million term loan due 2018 and a $85 million revolving credit facility due 2016. The '3' recovery rating remains unchanged and indicates our expectation for meaningful (50% to 70%) recovery in the event of payment default," S&P said. "The ratings on TriZetto reflect our expectation that the company will maintain good revenue growth in fiscal 2012 and 2013 after weak 2011 operating results, because of strong bookings and high backlog in recent quarters," said Standard & Poor's credit analyst Andrew Chang. "We believe that the company will continue to have a 'highly leveraged' financial risk profile, partly because of accreting preferred stock which we view as debt. Standard & Poor's also assesses the company's business risk profile as 'weak' and its liquidity as 'adequate,'" S&P said. "The stable rating outlook on TriZetto reflects our expectation that the company will generate positive revenue and EBITDA growth in the next 12 months, supported by a strong backlog and high revenue visibility. The company's current leverage profile and an acquisitive growth strategy limit a possible upgrade," S&P said. "We believe the company's leverage profile will remain high because of the accreting preferred stock, unless offset by a meaningful EBITDA expansion. We would consider a lower rating if revenue growth stagnates or EBITDA margin erodes meaningfully over the next 12 months, such that leverage approaches 9x on a sustained basis," S&P said. UNIVERSAL HEALTH: S&P 'BB+' Rating Unaffected by Upsizing of Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on King of Prussia, Penn.-based health care service provider Universal Health Services Inc. is unaffected by the upsizing of the recently rated term loan A-2. Universal increased the size of the term loan to $900 million from the proposed amount of $500 million. The company used all of the additional $400 million proceeds to repay outstanding term loan B, resulting in no change in senior secured debt outstanding. "Our rating on the loan is 'BB+', with a recovery rating of '2', indicating our expectation of substantial (70% to 90%) recovery for lenders in the event of default," S&P said. "Our corporate credit rating on Universal is 'BB', and the rating outlook is stable. Our assessment of the company's business risk profile as 'fair' reflects the company's increasing market presence and high margins in its rapidly growing inpatient behavioral business, which somewhat eases the reimbursement risks associated with its less profitable acute care business segment. We consider the financial risk profile 'significant,' reflecting our expectation that leverage will remain in the low-3x area, and that the company will continue to follow a relatively modest growth strategy. Universal is an owner and operator of acute care hospitals, behavioral health hospitals, and ambulatory centers nationwide and in Puerto Rico and the U.S. Virgin Islands," S&P said. RATINGS LIST Ratings Affirmed Universal Health Services Inc. Corporate Credit Rating BB/Stable/-- New Ratings Universal Health Services Inc. Senior Secured $900M term loan A-2 due 2016 BB+ Recovery Rating 2 UNIVERSAL HEALTH: Fitch Puts 'BB+' Rating on New $900MM Term Loan ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to Universal Health Service, Inc.'s (UHS) new $900 million term loan A-2 due August 2016. Fitch does not expect the incremental term loan to materially affect credit metrics over the ratings horizon. Absolute debt levels remain relatively unchanged. The new term loan was issued in connection with an amendment to the company's credit agreement originally signed in November 2010. The amendment also extends the maturity date of the majority of the revolver and the existing term loan A to August 2016 from November 2015. The proceeds of the new term loan were used to repay a portion of the amounts outstanding under the company's term loan B due November 2016 and revolver. Fitch currently rates UHS as follows: -- Issuer Default Rating (IDR) 'BB'; -- Senior secured bank facility 'BB+'; -- Senior secured notes 'BB+'; -- Senior unsecured notes 'BB-'. The Rating Outlook is Stable. The ratings apply to approximately $3.5 billion of debt at June 30, 2012. KEY RATING ISSUES -- Credit metrics have improved significantly since the November 2010 Psychiatric Solutions, Inc. (PSI) acquisition. Fitch expects debt leverage (total debt/EBITDA) to be sustained below 3.4x over the ratings horizon. -- Cash flows remain strong and liquidity is adequate. Free cash flow (FCF; cash from operations less capital expenditures and dividends) in the range of $350 - $450 million is expected in fiscal 2012 and 2013. -- Acute care volumes and pricing are under extreme pressure due to persistently high unemployment, particularly in UHS' largest markets. Fitch expects UHS' acute care operations to remain particularly stressed through 2012 and into 2013. -- Higher profitability and a more stable revenue stream from UHS' behavioral health business have moderated the overall effects of the strained acute care business. Fitch forecasts stable organic growth and modestly improving profitability for the behavioral health business over the ratings horizon. -- Much uncertainty remains regarding healthcare reform legislation, as well as both federal and state budget debates. Governmental reimbursement is likely to continue to moderate no matter the outcome of these disputes. GUIDELINES FOR FUTURE RATINGS ACTIONS Maintenance of a 'BB' IDR will require debt leverage generally maintained below 3.75x with strong and steady annual FCF in the range of $300 - $400 million. Fitch expects UHS' ratings to lag improvements in credit metrics in the intermediate-term due to the company's demonstrated willingness in 2010 to transform its credit profile for an acquisition. Furthermore, very weak acute care volume and pricing trends, which Fitch expects to persist through 2012 and into 2013, may weigh on positive ratings momentum. A positive rating action is not anticipated in the near term; although one may be contemplated if Fitch expects debt leverage to be maintained below 2.5x. Steady and robust cash flows accompanied by improved acute care volume and pricing metrics would also be expected to support an upgrade to 'BB+'. A negative rating action is anticipated only in the event of a sizeable leveraging M&A or capital deployment transaction resulting in debt leverage sustained at or above 3.75x. Despite the current pressures faced by the acute care business, Fitch does not expect volumes or pricing to deteriorate to such a degree that would precipitate a negative rating action in the near to intermediate term. MUCH IMPROVED CREDIT METRICS Credit metrics have improved significantly since the time of the Psychiatric Solutions, Inc. (PSI) acquisition in November 2010. Fitch-calculated debt leverage (total debt/EBITDA) at June 30, 2012 was 2.85 times (x) compared to 3.6x on a pro forma basis following the acquisition. Fitch expects that debt leverage could increase to approximately 3.2x at Dec. 31, 2012 due to the pending acquisition of Ascend Health Corporation. Fitch expects UHS to operate with debt leverage between 2.8x and 3.4x over the ratings horizon. As a result, an ample cushion is expected to be maintained under its credit agreement's financial covenants. The debt leverage covenant steps down to 4.5x at Dec. 31, 2012 and 3.75x at Dec. 31, 2013. STRONG CASH FLOWS, ADEQUATE LIQUIDITY Cash flows remain strong, despite very pressured acute care operations. Latest-12-month (LTM) FCF as of June 30, 2012 was approximately $310 million. Fitch anticipates that UHS will produce robust FCF in the range of $350 - $450 million over the ratings horizon. Forecasted cash flows are sufficient to cover capital spending requirements, which include costs incurred to implement electronic health records systems, and UHS' modest dividend. UHS' liquidity profile is solid. At June 30, 2012, UHS had $33 million of cash and equivalents and $623 million of unused capacity under its secured revolver due 2015. The company also maintains a $275 million accounts receivable securitization facility, of which $45 million was available at June 30, 2012. Debt maturities are modest over the next three years, and Fitch believes UHS has the market access necessary to address term loan maturities as they approach in 2015 and 2016. Fitch estimates UHS' debt maturities as follows: $301.5 million in 2013; $73 million in 2014; $1 billion in 2014; $1.8 billion in 2016; and $274.4 million thereafter. HISTORICALLY STRONG ACUTE CARE OPERATIONS UNDER SEVERE STRESS UHS' historically strong acute care operations are under severe pressure due to high unemployment and other macroeconomic forces. Same-hospital (SH) admissions have declined for eight consecutive quarters, mostly in-line with the broader industry. Unlike most urban markets, which have begun to show volume stabilization, UHS markets continue to produce SH admissions declines in excess of 2%. SH admissions decline in second-quarter 2012 was 4.3%. The average SH admissions decline for all Fitch-rated hospital operators was approximately 2.4% in the quarter. Pricing metrics have been exceptionally poor as well. Unfavorable payor mix shifts continue to plague UHS' largest markets and are now washing out the benefits of strong commercial pricing reported in the first half of 2011. SH net revenues declined 2.2% in second-quarter 2012. Hospital volumes and payor mix shifts typically lag broader macroeconomic developments by approximately three or four quarters. Consequently, Fitch anticipates weak acute care results for the rest of 2012 and possibly until the coverage expansion provisions of the ACA take effect in 2014. BEHAVIORAL HEALTH BUSINESS PROVIDES DIVERSIFICATION, STABILITY UHS' behavioral health business more than doubled in size subsequent to the acquisition of PSI in 2010. Although the acquisition resulted in a credit profile transforming debt increase, it affords UHS with increased business and revenue diversification, as well as improved financial stability and profitability. Good organic growth in the mid-single digits and moderately improving profit margins are expected over the ratings horizon for UHS' behavioral health business. The proposed acquisition of Ascend is in-line with Fitch's expectations for M&A and should contribute to incremental margin support in the near and intermediate term. HEALTHCARE REFORM NET POSITIVE, BUT STILL VERY UNCERTAIN Despite the Supreme Court's ruling on the Patient Protection and Affordable Care Act (ACA) in May, there remains much uncertainty surrounding the ultimate outcome of healthcare reform. Fitch views the ACA as a net positive for UHS and its hospital operator peers. Beginning in 2014, Fitch expects the drop in uncompensated care to contribute to an increase in absolute profit dollars. However, the magnitude of such an increase is dependent upon many factors. Two of these factors are the proportion of the newly insured covered under Medicaid versus the new insurance exchanges, and the level of reimbursement hospitals will receive from insurance plans in the exchanges. Fitch anticipates that any increase in profit dollars in 2014-2015 will nevertheless erode in the years that follow due to increasingly constrained reimbursement. VALENCE TECHNOLOGY: Designates Steve Grimshaw as Consultant ----------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas authorized Valence Technology, Inc., to employ virtualCFO, Inc., and designate Steve Grimshaw as Chapter 11 consultant to the Debtor, nunc pro tunc to Aug. 17, 2012. Mr. Grimshaw will assist the Debtor in its post-petition restructuring efforts. Specifically, Mr. Grimshaw will, among other things: (i) assist with due diligence and disclosure requirements for debtor-in-possession financing; (ii) assist in refinements to the Debtor's business plan, financial forecasts, and other expense reduction and restructuring initiatives; and (iii) analyze, develop, and implement the Debtor's operational and financial restructuring plans. To the best of Debtor's knowledge, Mr. Grimshaw is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The Debtor proposes to pay vCFO for the services of Mr. Grimshaw at the hourly billing rate of $275. At the Debtor's discretion, that hourly rate is subject to adjustment following the first 30 days of the engagement, up to a maximum hourly rate of $300. 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. On Aug. 8, 2012, the United States Trustee for Region 7 appointed 5 creditors to serve on the Official Committee of Unsecured Creditors of the Debtor. VALENCE TECHNOLOGY: Committee Wants to Retain BPR as Counsel ------------------------------------------------------------ The Official Committee of Unsecured Creditors of Valence Technology, Inc., asks the U.S. Bankruptcy Court for the Western District of Texas for authorization to employ and retain Brinkman Portillo Ronk, PC, as counsel to the Committee, effective as of Sept. 4, 2012. BPR will provide these services to the Committee: a) providing legal advice as necessary with respect to the Committee's powers and duties as an official committee; b) assisting the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's business, potential claims, and any other matters relevant to the case, to the sale of assets or to the formulation of a plan of reorganization; c) participating in the formulation of a Plan; and d) providing legal advise as necessary with respect to any disclosure statement and Plan filed in the Debtor's case and with respect to the process for approving or disapproving disclosure statements and confirming or denying confirmation of a Plan. The Committee believes that BPR does not represent or hold any interest adverse to the Debtor, its estate, creditors, equity security holders, or affiliates in the matters upon which BPR is to be engaged, and is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code, and as required by Section 327(a) of the Bankruptcy Code. BPR's hourly rates are: Daren R. Brinkman, Partner $575 Laura J. Portillo, Partner $495 David H. Oken, Of Counsel $485 Kevin C. Ronk, Partner $390 Associate Attorneys $330 Paralegals and Law Clerks $175 There are not amounts due to BPR from the Debtor or any of the Committee members on account of any prepetition services rendered. 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. On Aug. 8, 2012, the United States Trustee for Region 7 appointed 5 creditors to serve on the Official Committee of Unsecured Creditors of the Debtor. VALENCE TECHNOLOGY: Has Interim OK to Obtain $5-Mil. DIP Financing ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Texas authorized Valence Technology, Inc., to obtain post-petition financing of up to $5,000,000, on an interim basis, from GemCap Lending I, LLC, on a senior secured, priming, superpriority interim basis, and to use cash collateral, pursuant to an agreed budget through Dec. 31, 2012. The Debtor admits and stipulates that Berg & Berg Enterprises, LLC, the prepetition lender, is the Debtor's primary senior secured creditor and that as of the Petition Date, the aggregate amount of $69.1 million plus fees and costs are owed under the pre-petition loan documents, secured by all of the Debtor's assets, including cash collateral. As adequate protection of its interest in the collateral, including cash collateral, the prepetition lender is granted replacement liens in the collateral, subordinate only to the DIP Lender Priming Liens and the carve-out (for allowed administrative expenses and professional fees incurred by professionals or professional firms retained by the Debtor, the official committee of unsecured creditors and any other official committees). As additional adequate protection, the prepetition lender is granted an administrative claim under Sections 503(b)(1), 507(a), and 507(b) of the Bankruptcy Code, subject only to the DIP lender superpriority claim and the carve-out. All obligations will be due and payable and all authority to use the proceeds of the DIP loan documents and to use cash collateral will cease on the date that is the earliest to occur of any of the following: (i) Sept. 13, 2014; (ii) the occurrence of an event of default; (iii) the failure of the Debtor to obtain the final DIP order on or before Oct. 15, 2012; (iv) the date on which the Bankruptcy Court confirms a plan of reorganization; or (v) the entry of an order converting the Debtor's case to a case under Chapter 7 of the Bankruptcy Code. Any automatic stay otherwise applicable to the DIP Lender is modified so that (i) after the occurrence of any DIP Order Event of Default and (ii) upon 5 business days prior written notice of such occurrence, the DIP Lender will be entitled to exercise its rights and remedies in accordance with the DIP Loan Documents and without further order of the Court. The hearing to consider the motion of the Debtor for authorization to obtain post-petition financing up to $10,000,000, on a final basis, will be held on Oct. 11, 2012, at 1:30 p.m. 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. On Aug. 8, 2012, the United States Trustee for Region 7 appointed 5 creditors to serve on the Official Committee of Unsecured Creditors of the Debtor. VENTANA 20/20: Files List of 20 Largest Unsecured Creditors ----------------------------------------------------------- Ventana 20/20 LP files with the U.S. Bankruptcy Court for the District of Arizona a list of its 20 largest unsecured creditors, disclosing: Name of Creditor Nature of Claim Amount of Claim ---------------- --------------- --------------- Noah Hahn Contract $215,000 310-487-5335 Noah Hahn 3390 Valmont Road, Suite 1 Boulder CO 80301 Photaris Technology Solutions Vendor $89,040 HD Supply Facilities Maintenance Vendor $3,939 Tucson Electric Power Co. Vendor $1,202 Apartments For Rent Vendor $845 Bolchalk Frey Marketing Vendor $690 Wllmar Vendor $683 Automatlt, Inc. Vendor $678 AZ Partsmaster Vendor $563 Comcast Cable Vendor $563 IKON Financial Services Vendor $514 AZ Daily Star Vendor $349 Acura Systems of Tucson Inc. Vendor $214 RICOH USA, Inc. Vendor $171 Dunn Edwards Vendor $157 CenturyLInk Vendor $133 HD Supply Facilities Maintenance Ltd. Vendor $101 About Ventana 20/20 LP Ventana 20/20 LP filed bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-17493) in Tucson on Aug. 3, 2012. The Debtor disclosed $14,542,797 in assets and $10,938,012 in liabilities. John Murphy, as manager of the Debtor, signed the Chapter 11 petition. Mr. Murphy is the founder, chairman and CEO of the 20/20 Group of companies. As a value investor, he has led or participated in over $1 billion of multi-family acquisitions across North America. Bankruptcy Judge Eileen W. Hollowell oversees the case. Frederick J. Petersen, Esq., at Mesch, Clark & Rothschild, P.C., serves as the Debtor's counsel. Donald L. Schaefer, court appointed receiver for the Debtors, is represented by Warren J. Stapleton, Esq., at Osborn Maledon, P.A. VOX TOWER: Case Summary & 2 Unsecured Creditors ----------------------------------------------- Debtor: Vox Tower, LLC c/o North Park Development, LLC Seattle, WA 98102-4314 Bankruptcy Case No.: 12-19629 Chapter 11 Petition Date: September 20, 2012 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Craig S. Sternberg, Esq. STERNBERG THOMSON OKRENT & SCHER PLLC 500 Union Street, Suite 500 Seattle, WA 98101 Tel: (206) 386-5438 E-mail: craig@stoslaw.com Scheduled Assets: $1,200,125 Scheduled Liabilities: $1,516,816 A copy of the Company's list of its two unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wawb12-19629.pdf The petition was signed by Robert C. Brewster, Jr., manager. WASHINGTON MUTUAL: Oregon Seeks $29 Million in Back Taxes --------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that the Oregon Department of Revenue demanded Thursday that Washington Mutual Inc. pony up $29 million for back taxes, rejecting the holding company's claim that it never did business in the state and that the taxes are owed solely by its long-defunct banking affiliates. In a brief filed in Delaware bankruptcy court, the state argues that, as a savings and loan holding company, WMI's operations were inseparable from those of its banking subsidiaries, led by Washington Mutual Bank, according to Bankruptcy Law360. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. Records filed Jan. 24, 2012, say that Washington Mutual Inc., former owner of the biggest U.S. bank to fail, has spent $232.8 million on bankruptcy professionals since filing its Chapter 11 case in September 2008. In March 2012, the Debtors' Seventh Amended Joint Plan of Affiliated, as modified, and as confirmed by order, dated Feb. 23, 2012, became effective, marking the successful completion of the chapter 11 restructuring process. The Plan is based on a global settlement that removed opposition to the reorganization and remedy defects the judge identified in September. The plan is designed to distribute $7 billion. Under the reorganization plan, WaMu established a liquidating trust to make distributions to parties-in-interest on account of their allowed claims. WESTCLIFFE PROPERTY: Case Summary & 4 Unsecured Creditors --------------------------------------------------------- Debtor: Westcliffe Property, LLC fdba Victoria Garden Ball Room, LLC 1st Victoria Garden Ballroom, LLC aka Westcliffe Realty, LLC Vicsura Holdings, LLC 601 James Ridge Road Bowie, MD 20721 Bankruptcy Case No.: 12-27229 Chapter 11 Petition Date: Court: U.S. Bankruptcy Court District of Maryland (Baltimore) Judge: David E. Rice Debtor's Counsel: Adam M. Freiman, Esq. SIRODY, FREIMAN & ASSOCIATES, P.C. 1777 Reisterstown Road, Suite 360 E Baltimore, MD 21208 Tel: (410) 415-0445 Fax: (410) 415-0744 E-mail: afreiman@sfflegal.com Scheduled Assets: $2,049,032 Scheduled Liabilities: $2,068,965 A copy of the Company's list of its four largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/mdb12-27229.pdf The petition was signed by Veronica Banwo, president. WHITTON CORP: Affiliate South Tech's Bankruptcy Case Dismissed -------------------------------------------------------------- The Hon. Bruce A. Markell of the U.S. Bankruptcy Court for the District of Nevada dismissed the Chapter 11 case of South Tech Simmons 3040C, LLC, a debtor-affiliate of Whitton Corporation. The Debtor's sole income-producing asset -- real property located at 3040 Simmons Street, North Las Vegas, Nevada -- was conveyed to secured creditor First Memphis Company, LLC. About Whitton Corporation Henderson, Nevada-based Whitton Corporation filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 10-32680) on Dec. 5, 2010. Hal L. Baume, Esq., Brett A. Axelrod, Esq., and Anne M. Loraditch, Esq., at Fox Rothschild LLP, in Las Vegas, Nev., serve as the Debtor's bankruptcy counsel. The Debtor disclosed $19,967,668 in assets and $37,949,426 in liabilities as of the Chapter 11 filing. South Tech Simmons 3040C, LLC, filed a separate petition (Bank. D. Nev. Case No. 10-32857) on Dec. 8, 2010. No request has been made for the appointment of a trustee or examiner, and no statutory committee has been appointed in the case. WOLVERINE WORLD: Moody's Rates $375-Million Senior Notes 'B2' ------------------------------------------------------------- Moody's Investors Service assigned a B2 (LGD 5, 85%) rating to Wolverine World Wide, Inc.'s proposed $375 million Senior Notes due 2020 ("Senior Notes"). Moody's also affirmed Wolverine's Ba3 Corporate Family Rating as well as the Ba2 rating assigned to the company's senior secured credit facilities. The rating outlook remains stable and the company's Speculative Grade Liquidity rating of SGL-2 is unchanged. On May 1, 2012, Wolverine announced a definitive agreement to acquire Collective Brands, Inc.'s ("Collective") Performance + Lifestyle Group ("PLG"), whose major brands include Sperry Top- Sider, Saucony, Keds and Stride Rite. The acquisition, which is expected to close in Wolverine's fourth fiscal quarter, is expected to be funded from a combination of cash and approximately $1.28 billion of new debt. The following rating was assigned: $375 million Senior Notes due 2020 at B2 (LGD 5, 85%) The following ratings were affirmed: Corporate Family Rating at Ba3 Probability of Default Rating at Ba3 $200 million senior secured Revolver at Ba2 (LGD3, 33%) $550 million senior secured Term Loan A at Ba2 (LGD3, 33%) $350 million senior secured Term Loan B at Ba2 (LGD3, 33%) Speculative Grade Liquidity Rating of SGL-2 RATINGS RATIONALE Wolverine's Ba3 rating reflects its meaningful scale in the footwear and apparel industry (with pro forma combined revenue of approximately $2.5 billion for the LTM period ending June, 2012), as well as its diverse portfolio of sixteen brands (including PLG's four major brands) that address a wide range of customers and markets. Positive consideration is also given to Wolverine's long history of managing global footwear brands and benefits of scale that could be achieved through the combination of the Wolverine and PLG businesses. While opening leverage is high (pro forma debt/EBITDA (incorporating Moody's standard analytical adjustments) is expected to be around 5x) Moody's expects the Company to utilize its free cash flow to de-lever to the low 4x range by the end of 2013. The acquisition of PLG will provide additional scale to Wolverine, and the addition of brands focused on women and children is expected to broaden Wolverine's customer base. The acquisition of the Stride Rite brand provides Wolverine with a sizeable retail presence in the United States. PLG's brands should also benefit from Wolverine's strong international distribution network. Although Wolverine's has a track record of successful brand acquisitions, this is the largest transaction in the Company's history, nearly doubling its total revenues and integration risk remains. While the Sperry Top-Sider and Saucony brands have been performing well, Stride Rite has seen negative trends over the past few years and is likely to remain a challenge as Wolverine integrates the PLG business. The heritage Wolverine brands generate low-teen operating margins, which is higher than those of PLG, and it will take time before the combined Company's margins reach Wolverine's current level of operating margin. The rating outlook is stable. Wolverine has a strong infrastructure to support its portfolio of footwear brands and Moody's expects the Company will be able to successfully integrate PLG over the next 12-18 months. Moody's also expects the Company to be balanced in its financial policies, utilizing excess free cash flow to reduce debt. Over time ratings could be upgraded if Wolverine is able to continue to grow its brands into multiple product categories and markets while increasing margins to above 12%. Quantitatively ratings could be upgraded if debt/EBITDA was sustained below 3.75x. In view of Wolverine's high initial leverage, there is no capacity for the Company to undertake additional debt financed acquisitions or to return any significant cash to shareholders beyond current dividend practices. If integration issues arise -- which would be evident by margin erosion or increased SG&A as a percentage of sales -- ratings could be downgraded. Quantitatively, ratings could be downgraded if debt/EBITDA is expected to remain above 5x. The B2 rating assigned to the Senior Notes reflects their unsecured position and their junior ranking to a sizable amount of secured debt in the company's capital structure The Speculative Grade Liquidity Rating of SGL-2 reflects Moody's expectations that the Company will maintain a positive free cash flow profile over the next year, but that it will require some external funding to accommodate seasonal working capital needs. It is also expected that cash will be utilized to address the required annual amortization under the Term Loan A and Term Loan B. Wolverine is expected to have access to a $200 million revolver with a modest amount expected to be drawn at closing, providing Wolverine with what Moody's believes to be ample capacity to cover the Company's working capital needs. The Company is anticipated to be subject to financial maintenance covenants, and Moody's expects there will be sizable headroom under these financing covenants. The principal methodology used in rating Wolverine was the Global Apparel Industry Methodology published in May 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Rockford, Michigan, Wolverine is a designer, manufacturer and marketer of branded footwear and related apparel and accessories. Wolverine's brands are distributed in over 190 countries and territories around the world. The Company's most significant brands include Merrell, Wolverine, CAT Footwear and, with the proposed acquisition of PLG, Sperry Top-Sider, Saucony and Stride-Rite. Wolverine's pro forma combined revenue for the LTM period ending June 2012 is approximately $2.5 billion. WOLVERINE WORLD: S&P Rates $375MM Senior Unsecured Notes 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' preliminary unsecured debt rating to Rockford, Mich.-based Wolverine World Wide Inc.'s proposed $375 million senior unsecured notes due 2020. "At the same time, we are assigning our preliminary '5' recovery rating, reflecting our expectations of modest (10%-30%) recovery for the lenders in case of a payment default," S&P said. "We expect the company to use net proceeds from this debt issuance to partially finance the pending roughly $1.23 billion acquisition of the Performance and Lifestyle Group (PLG) business of Collective Brands Inc. We expect the transaction to be completed in October 2012; however, if the acquisition is not consummated as expected, the company will redeem the notes raised under this offering," S&P said. "Our preliminary ratings on Wolverine, including the preliminary 'BB-' corporate credit rating, reflect our view that the company's financial profile will be 'aggressive' following completion of the PLG acquisition, when the company will have a high level of debt, with pro forma debt-to-EBITDA leverage in excess of 4.5x. In addition, we believe the company's financial policy is moderate, given the pending debt-financed transaction; the company has operated with very modest debt levels in recent years," S&P said. "Our ratings further reflect our view of Wolverine's 'fair' business risk, underpinned by the group's strong niche positions in the U.S. footwear market, and the strength and growth potential of most of its brands. The business risk assessment is constrained by our view of the fragmented and competitive market in which Wolverine operates, as well as by its limited geographic diversification and narrow product offering," S&P said. RATING LIST Wolverine World Wide Inc. Corporate credit rating BB- (prelim)/Stable/-- Ratings Assigned Wolverine World Wide Inc. Senior unsecured $375 million notes due 2020 B+ (prelim) Recovery rating 5 (prelim) ZBB ENERGY: Baker Tilly Raises Going Concern Doubt -------------------------------------------------- Baker Tilly Virchow Krause, LLP, in Milwaukee, Wisconsin, expressed substantial doubt about ZBB Energy Corporation's ability to continue as a going concern, following its report on the Company's financial position and results of operations for the fiscal year ended June 30, 2012. The independent auditors noted that the Company has suffered recurring operating losses and has an accumulated deficit of $69,053,909 as of June 30, 2012. The Company reported a net loss of $13.9 million on $4.8 million of revenues in fiscal 2012, compared with a net loss of $8.4 million on $1.8 million of revenues in fiscal 2011. The Company's balance sheet at June 30, 2012, showed $22.1 million in total assets, $8.8 million in total liabilities, and stockholders' equity of $13.3 million. A copy of the Form 10-K is available at http://is.gd/KEWJau Menomonee Falls, Wisconsin-based ZBB Energy Corporation develops and manufactures distributed energy storage solutions and systems based upon the Company's proprietary zinc bromide rechargeable electrical energy storage technology and proprietary power electronics systems. * 8th Circ. Tosses $13MM Suit Over UnitedHealth Intermediary ------------------------------------------------------------ Sean McLernon at Bankruptcy Law360 reports that the Eighth Circuit on Friday affirmed a lower court ruling tossing a $13 million suit against a division of UnitedHealth Group Inc. over missed payments from a now-bankrupt intermediary, finding that UnitedHealth is not liable because the subcontractor is not an agent of the health carrier. Bankruptcy Law360 relates that New Millennium Consulting Inc. and Pacific Management Systems Inc. entered into supplier contracts with vendor management company Consolidated Hiring Information Management Efficiency System, known as Chimes, which was hired by United HealthCare Services. * 'Stripping Off' Under Water Lien Barred in Chapter 7 ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to a Sept. 21 decision by U.S. District Judge Arthur D. Spatt in Brooklyn, New York, a wholly unsecured, subordinate mortgage can't be "stripped off" in Chapter 7. The report relates that two cases went up on appeal from decisions by U.S. Bankruptcy Judge Dorothy Eisenberg in Central Islip, New York. She ruled in both cases that a subordinate mortgage can be treated as an entirely unsecured claim if the home is worth less than the debt on the first mortgage. Judge Spatt said Judge Eisenberg's opinion "reflects in many ways the more logical position, and the one that is supported by a large volume of legal commentary." He nonetheless felt compelled to rule the other way by the U.S. Supreme Court's 1992 decision in Dewsnup v. Timm. According to the report, Judge Spatt's ruling cuts off a strategy homeowners were using on Long Island, New York, to keep their homes. In some situations, the homeowner could negotiate a loan- modification agreement with the first-mortgage lender reducing the debt on the senior mortgage. If the bankruptcy court would eliminate an underwater second mortgage, the homeowner could retain the home without going through Chapter 13 and paying a portion of creditors' claims. The report notes that in Dewsnup, the Supreme Court ruled that a partially secured first mortgage can't be reduced to the value of the property. In 1993, the Supreme Court ruled in In re Nobelman that an underwater mortgage can be stripped off in Chapter 13 cases in view of Section 1332 of the Bankruptcy Code. Judge Spatt decided that a 2001 decision from the U.S. Court of Appeals in Manhattan called In re Pond wasn't controlling. Pond held that an underwater secured claim can be stripped off in Chapter 13. The Bloomberg report discloses that Judge Spatt said that a "majority" of courts around the country don't allow lien stripping of underwater subordinate mortgages. He said that "nearly all" bankruptcy judges in New York don't allow Chapter 7 lien stripping. He admitted that courts "almost uniformly" allow subordinate lien stripping in Chapter 13. The case is Wachovia Mortgage v. Smoot (In re Smoot), 11-06379, U.S. District Court, Eastern District of New York (Brooklyn). * Fifth Circuit Allows Narrow Bankrupt Homeowner Class ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in New Orleans upheld the certification of a narrowly-defined class in a lawsuit on behalf of homeowners with confirmed Chapter 13 plans. The class included homeowners who were charged fees by Countrywide Home Loans Inc. not approved by the bankruptcy court. According to the report, in a required procedure referred to as certifying a class, U.S. Bankruptcy Judge Marvin Isgur in Houston allowed a lawsuit to go forward where the plaintiff would represent 125 homeowners. The class that Judge Isgur approved was considerably narrower than the plaintiffs sought. Among other things, the approved class covered only homeowners who hadn't paid Countrywide in full under their Chapter 13 plans. The report relates that invoking a 2010 ruling from the 5th Circuit in New Orleans in a case called Wilborn, Judge Isgur would not approve a class to obtain money damages. He did allow the class lawsuit to proceed for a judgment enjoining Countrywide from collecting fees not approved under Bankruptcy Rule 2016. The Bloomberg report discloses that countrywide appealed to the circuit court where Circuit Judge Stephen A. Higginson wrote the opinion upholding approval of the class. It was the first time the 5th Circuit had approved certification of a class in a bankruptcy-related case, Karen Kellett, the lead lawyer for the plaintiffs, told Bloomberg News in an e-mailed statement. The case is Countrywide Home Loans Inc. v. Rodriguez (In re Rodriquez), 11-40056, U.S. 5th Circuit Court of Appeals (New Orleans). * Lawyer Sanctioned for Bad Faith in Claim Objections ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a lawyer in Dallas was sanctioned $500 for helping an individual in Chapter 13 "to avoid payment of $147,400 in claims that she had no reason to believe she did not owe." An individual with about $120,000 in annual income filed a Chapter 13 petition in Sherman, Texas, promising to pay all creditors in full. Her lawyer, Gary Armstrong, objected to every credit card claim, contending the creditors hadn't provided sufficient documentation. According to the report, most of the creditors failed to respond. U.S. Bankruptcy Judge Brenda T. Rhoades didn't uphold the objections and instead imposed $500 sanction on the lawyer. The sanction was upheld on appeal by U.S. District Judge Ron Clark, who said the sanction was a proper exercise of the bankruptcy court's discretion. Judge Clark said Judge Rhoades was correct in imposing the sanction because the lawyer was "attempting to abuse the bankruptcy process by discharging debts his client could not in good faith challenge." He quoted Judge Rhoades who said the lawyer was "playing games" by seeking to disallow claims for lack of sufficient documentation when the bankrupt herself had no knowledge that the claim was improper. The Bloomberg report discloses that Judge Clark ended the opinion by saying there was "little doubt" that other courts "would have imposed a far greater sanction." The case is In re Armstrong (In re Davis), 11-722, U.S. District Court, Eastern District of Texas (Sherman). * Cohen & Grigsby Appoints C. Tillapaugh as Director of Recruiting ------------------------------------------------------------------ Cohen & Grigsby, a business law firm with headquarters in Pittsburgh, PA and an office in Naples, FL, is pleased to disclose that attorney Christie Tillapaugh has been appointed to director of recruiting. In this role, Atty. Tillapaugh will be responsible for the strategic development of the firm's recruiting initiatives. In addition to overseeing the firm's efforts targeting many of the nation's finest law schools, she will also oversee the firm's summer associates program and integration of new associates. "We know that Atty. Christie will embrace her new role as director of recruiting with the same enthusiasm that she brings to her clients and practicing law," said Jack Elliott, president and CEO of Cohen & Grigsby. "We look forward to seeing her further enhance the firm's ability to attract and retain talent." Atty. Tillapaugh is a partner in the Business Services Group. She specializes in counseling public and private companies with respect to corporate matters, corporate governance matters, securities law compliance and transactional matters, including lending work on behalf of financial institutions. Atty. Tillapaugh replaces Barbara Scheib who held the director of recruiting role for four years. Ms. Scheib is a partner at the firm and focuses her practice on litigation and will remain an integral part of the firm's leadership. Prior to being named director of recruiting, Atty. Tillapaugh served as associate development director. In this role, she assisted the firm in identifying goals and priorities for the firm's associates. Mr. Michael Dougherty, a partner and member of the firm's Business Group, is assuming the role of associate development director. About Cohen & Grigsby Since 1981, Cohen & Grigsby, P.C. and its attorneys have provided sound legal advice and solutions to clients that seek to maximize their potential in a constantly changing global marketplace. Comprised of more than 130 lawyers, Cohen & Grigsby maintains offices in Pittsburgh, PA and Naples, FL. The firm's practice areas include Business & Tax, Labor & Employment, Immigration/International Business, Real Estate & Public Finance, Litigation, Estates & Trust, Intellectual Property, Bankruptcy & Creditors Rights, and Public Affairs. Cohen & Grigsby represents private and publicly held businesses, nonprofits, multinational corporations, individuals and emerging businesses across a full spectrum of industries. * Upcoming Meetings, Conferences and Seminars --------------------------------------------- Sept. 19-20, 2012 AMERICAN BANKRUPTCY INSTITUTE 38th Annual Lawrence P. King and Charles Seligson Workshop on Bankruptcy & Business Reorganizations New York University School of Law, New York, N.Y. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 4, 2012 AMERICAN BANKRUPTCY INSTITUTE Nuts & Bolts: Bankruptcy Fundamentals for Young and New Practitioners Charles Evans Whittaker Courthouse, Kansas City, Mo. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 5, 2012 AMERICAN BANKRUPTCY INSTITUTE 32nd Annual Midwestern Bankruptcy Institute & Consumer Forum Kansas City Marriott Downtown, Kansas City, Mo. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 5, 2012 AMERICAN BANKRUPTCY INSTITUTE Bankruptcy 2012: Views from the Bench Georgetown University Law Center, Washington, D.C. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 8, 2012 AMERICAN BANKRUPTCY INSTITUTE 5th Annual Chicago Consumer Bankruptcy Conference University of Chicago Gleacher Center, Chicago, Ill. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 18, 2012 AMERICAN BANKRUPTCY INSTITUTE International Insolvency & Restructuring Symposium Parco dei Principi Grand Hotel & Spa, Rome, Italy Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 26, 2012 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program San Diego Marriott Marquis and Marina, San Diego, Calif. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 1-2, 2012 AMERICAN BANKRUPTCY INSTITUTE Corporate Restructuring Competition Wharton University of Pennsylvania, Philadelphia, Pa. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 1-3, 2012 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Westin Copley Place, Boston, Mass. Contact: http://www.turnaround.org/ Nov. 7, 2012 AMERICAN BANKRUPTCY INSTITUTE U.S./Mexico Restructuring Symposium The Four Seasons, Mexico City, D.F. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 12, 2012 AMERICAN BANKRUPTCY INSTITUTE Detroit Consumer Bankruptcy Conference MGM Grand, Detroit, Mich. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 26, 2012 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Nov. 29-30, 2012 MID-SOUTH COMMERCIAL LAW INSTITUTE 33rd Annual Bankruptcy & Commercial Law Seminar Nashville Marriott at Vanderbilt, Nashville, Tenn. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Nov. 29 - Dec. 1, 2012 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference JW Marriott Starr Pass Resort & Spa, Tucson, Ariz. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Dec. 4-8, 2012 AMERICAN BANKRUPTCY INSTITUTE ABI/SJUSL Mediation Training Symposium St. John's University, Queens, N.Y. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Jan. 24-25, 2013 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Four Seasons Hotel Denver, Denver, Colo. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Feb. 7-9, 2013 AMERICAN BANKRUPTCY INSTITUTE Caribbean Involvency Symposium Eden Roc Renaissance, Miami Beach, Fla. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Feb. 17-19, 2013 AMERICAN BANKRUPTCY INSTITUTE Advanced Consumer Bankruptcy Practice Institute Charles Evans Whittaker Courthouse, Kansas City, Mo. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Feb. 20-22, 2013 AMERICAN BANKRUPTCY INSTITUTE VALCON Four Seasons Las Vegas, Las Vegas, Nev. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Apr. 10-12, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Spring Conference JW Marriott Chicago, Chicago, Ill. Contact: http://www.turnaround.org/ Apr. 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting Gaylord National Resort & Convention Center, National Harbor, Md. Contact: 1-703-739-0800 ; http://www.abiworld.org/ June 13-16, 2013 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, Mich. Contact: 1-703-739-0800 ; http://www.abiworld.org/ July 11-13, 2013 AMERICAN BANKRUPTCY INSTITUTE Northeast Bankruptcy Conference Hyatt Regency Newport, Newport, R.I. Contact: 1-703-739-0800 ; http://www.abiworld.org/ July 18-21, 2013 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Amelia Island, Amelia Island, Fla. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Aug. 8-10, 2013 AMERICAN BANKRUPTCY INSTITUTE Mid-Atlantic Bankruptcy Workshop Hotel Hershey, Hershey, Pa. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Aug. 22-24, 2013 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference Hyatt Regency Lake Tahoe, Incline Village, Nev. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Oct. 3-5, 2013 TURNAROUND MANAGEMENT ASSOCIATION TMA Annual Convention Marriott Wardman Park, Washington, D.C. Contact: http://www.turnaround.org/ Nov. 1, 2013 AMERICAN BANKRUPTCY INSTITUTE NCBJ/ABI Educational Program Atlanta Marriott Marquis, Atlanta, Ga. Contact: 1-703-739-0800 ; http://www.abiworld.org/ Dec. 2, 2013 BEARD GROUP, INC. 19th Annual Distressed Investing Conference The Helmsley Park Lane Hotel, New York, N.Y. Contact: 240-629-3300 or http://bankrupt.com/ Dec. 5-7, 2013 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Terranea Resort, Rancho Palos Verdes, Calif. Contact: 1-703-739-0800 ; http://www.abiworld.org/ The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* 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, Carmel Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***