/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/121016.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, October 16, 2012, Vol. 16, No. 288 Headlines 175 VALLEY: Voluntary Chapter 11 Case Summary 400 EAST: Voluntary Chapter 11 Case Summary 1717 MARKET: Hearing on Relief from Stay Continued Until Nov. 8 ADAMIS PHARMACEUTICALS: Five Directors Elected to Board ADVANCED MICRO: S&P Puts 'BB-' CCR on Watch on Weak Prelim Results AFA FOODS: Judge Rejects Creditor Settlement ALCO CORP: MAPFRE Adequate Protection Payment Approved ALLIED SYSTEMS: Taps Ogletree as Labor & Benefits Counsel ALLIED SYSTEMS: Employs PwC to Provide Tax Compliance Services ALLY FINANCIAL: Declares Dividends on Preferred Stock AMBAC FINANCIAL: Court Modifies Equity Trading Protocol AMBAC FINANCIAL: KPMG Providing Additional Services AMBAC FINANCIAL: AFG Pursuing Suits for Breaches & Fraud AMBAC FINANCIAL: AAC Says 92 Policy Claims Won't Be Paid AMERICAN AIRLINES: American Eagle Pilots Accept New Labor Contract AMERICAN AIRLINES: Seeks Approval of $1.5 Billion Financing AMERICAN AIRLINES: Proposes Deal for Embraer Planes Transfer AMERICAN AIRLINES: Proposes Leases for Four MD-80 Aircraft AMERICAN AIRLINES: Wins OK for $268MM Financing From RPK AMERICAN AIRLINES: Bonds Bounce Back Partly After Early Plunge AMERICAN AIRLINES: Still Cutting Flights Until Delays Improve AMERICAN COMMERCE: Reports $13,300 Net Income in Aug. 31 Quarter AMERICAN LEARNING: Fails NASDAQ $1 Bid Price Rule ARCAPITA BANK: Lease Decision Period Extended to Plan Confirmation ARCAPITA BANK: Final Plan Exclusivity Extension Expires Dec. 15 ARCAPITA BANK: Hearing on SP Financing Adjourned to Oct. 19 ASPEN GROUP: Sophrosyne Capital Discloses 9.6% Equity Stake ATC VENTURE: Receives NYSE MKT Non-Compliance Notice ATLANTIS OF JACKSONVILLE: Court Dismisses Chapter 11 Case BALDWIN PARK: Fitch Affirms 'BB' Rating on Tax Allocation Bonds BEAZER HOMES: Effects a 1-for-5 Reverse Stock Split BERNARD L. MADOFF: NY AG Says $415-Mil. Deal Not Madoff's Property BERJAC OF OREGON: Bullivant Houser OK'd as Trustee's Counsel BERJAC OF OREGON: David B. Mills Approved as Committee Counsel BERJAC OF OREGON: Files Schedules of Assets and Liabilities BERJAC OF OREGON: Thomas A. Huntsberger Named Ch. 11 Trustee BERJAC OF OREGON: Trustee Taps Krista Lacis as Operating Analyst BERJAC OF OREGON: Trustee Taps Luvaas for Advice on Plan BERJAC OF OREGON: U.S. Trustee Appoints 7-Member Creditors Panel BIG SANDY: Wells Fargo Balks at Proposed Asset Sale BLAST ENERGY: Offering $50 Million Common Shares BLAST ENERGY: GBH Continues to Serve as Accountants BONDS.COM GROUP: Amends 2011 Periodic Reports BURGER KING: Fitch Assigns 'BB' Rating on New Secured Facility CAESARS ENTERTAINMENT: Jinlong Wang Resigns from Board CAPITOL BANCORP: Strikes Equity Deal, Delays Hearing CASCADE BANCORP: Amends 44.3 Million Common Shares Prospectus CEQUEL COMMS: Moody's Affirms 'B1' CFR; Rates Sr. Bonds 'B3' CELL THERAPEUTICS: Plans to Offer 40,000 Preferred Shares CELL THERAPEUTICS: Prices Offering of 60,000 Preferred Shares CERTENEJAS INCORPORADO: Motel Owner Files Plan; Unsecureds Get 1% CHINA MEDICAL: Beijing Firm's Cayman Bankruptcy Protected in U.S. CIRCLE STAR: Maturity of 10% Convertible Notes Extended to 2014 CLEAR CHANNEL: To Swap $2 Billion Loan for CCU 9% Guarantee Notes CLEAR CHANNEL: Pursuing Amendments to Credit Facilities CLEAR CHANNEL: Moody's Rates $2BB Priority Guarantee Notes 'Caa1' CLEAR CHANNEL: S&P Rates $2BB Priority Guarantee Notes 'CCC+' CLEAR CHANNEL: Bank Debt Trades at 17% Off in Secondary Market COCOPAH NURSERIES: Hearing on Further Cash Use on Tuesday COMMERCIAL MANAGEMENT: Can Use Cash Collateral Until Jan. 31 COMMUNICATIONS CORP: S&P Affirms Prelim 'B' Corp. Credit Rating CONSOLIDATED FINANCE: Case Summary & 20 Largest Unsec. Creditors COPYTELE INC: To Issue Add'l 44.5 Million Shares to Employees CROATAN SURF: Wants to Sell 35 Condominium Units to View LLC CSD LLC: Owner of Casa de Shenandoah Ranch Files Chapter 11 CONNAUGHT GROUP: Wins Confirmation of Liquidating Plan CYCLONE POWER: Registers 15 Million Common Shares with SEC CYPRESS HEALTH: Case Summary & 20 Largest Unsecured Creditors DAYBREAK OIL: Had $257,400 Net Loss in Aug. 31 Quarter DAYBREAK OIL: Incurs $257,000 Net Loss in Aug. 31 Quarter DELPHI CORP: Two Johnson Controls Admin. Claims Disallowed DELPHI CORP: Four Methode Electronics Claims Disallowed DELPHI CORP: Parties Agree on Excluded Claims in Ace Complaint DELPHI CORP: Stipulation Allowing Steere's General Unsecured Claim DELPHI CORP: 2nd Cir. Vacates Orders on Longacre-ATS Suit DEWEY & LEBOEUF: May Pay Bonuses to Employees Rodriguez and Sucoff DEWEY & LEBOEUF: FPC to Appeal Order Approving PCP DEWEY & LEBOEUF: Has New Address at 1271 Avenue of the Americas DEX MEDIA EAST: Bank Debt Trades at 37% Off in Secondary Market DEX MEDIA WEST: Bank Debt Trades at 35% Off in Secondary Market DIGITAL DOMAIN: Pomerantz Pursues Class Action Suit DIGITAL DOMAIN: Committee Taps Brown Rudnick as Counsel DIGITAL DOMAIN: PBC GP Discloses 54.3% Equity Stake DIGITILITI INC: Suspending Filing of Reports with SEC DYNEGY HOLDINGS: Franklin Resources Discloses 32.4% Equity Stake DYNEGY HOLDINGS: Luminus Management Discloses 9.7% Equity Stake EASTBRIDGE INVESTMENT: Expects $7.5MM to $8.5MM Revenue in 2012 EASTMAN KODAK: To Begin Talks With Shareholders on Plan EMMIS COMMUNICATIONS: Posts $38.9MM Net Income in Aug. 31 Qtr. EMMIS COMMUNICATIONS: Moody's Reviews 'B3' CFR/PDR for Upgrade ENERGY TRANSFER: Moody's Lowers Corp. Family Rating to 'Ba2' ENERGY TRANSFER: Fitch Affirms 'BB-' Issuer Default Rating FERRO CORP: Moody's Affirms 'Ba3' CFR; Outlook Negative FELIX'S INC: New Orleans Restaurant Fetches $1.4-Mil. Price FIBERTOWER CORP: FCC Appeals Injunction Preserving Licenses FIBERTOWER CORP: Nov. 6 Hearing on Plan Exclusivity Extension FIBERTOWER CORP: Hogan Lovells Approved for Spectrum Licenses FIBERTOWER CORP: Willkie Farr Okayed as FCC Regulatory Counsel FORT LAUDERDALE: Receiver Hiring Salazar Jackson as Counsel FR 160: Hearing Tomorrow on FRGC Bid to File Competing Plan FREMONT HOSPITALITY: Chapter 11 Stays Sandusky Foreclosure Action FUELSTREAM INC: Fires CEO; Names John Thomas as President GABRIEL SALES: Case Summary & 20 Largest Unsecured Creditors GCA SERVICES: Term Loan Increase No Impact on Moody's B2 CFR/PDR GIBSON ENERGY: OMNI Acquisition No Impact on Moody's Ratings GULFPORT ENERGY: Moody's Assigns B3 CFR, Rates $250MM Notes B3 GILL ENTERPRISES: Case Summary & 15 Unsecured Creditors GLOBAL AVIATION: Amends Plan Ahead of Tomorrow's Hearing GLOBAL CASINOS: Schumacher & Assoc. Raises Going Concern Doubt GMX RESOURCES: Wants Shareholders OK of Reverse Stock Split GOURMET GREEN: Case Summary & Largest Unsecured Creditor HARMAN INTERNATIONAL: Moody's Withdraws 'Ba1' CFR/PDR HAWKER BEECHCRAFT: Bank Debt Trades at 36% Off in Secondary Market HIGH PLAINS: Ty Miller Resigns from Board of Directors HOSTESS BRANDS: Unsecureds to Get Nothing Under Plan HOSTESS BRANDS: Committee Joins as Party in DIP Loan Agreement HUBBARD PROPERTIES: Plan Trustee Hiring VMC as Accountant HYLAND SOFTWARE: Moody's Affirms 'B2' CFR; Outlook Negative IA GLOBAL: Shifts to Clean Technology, Changes Name to Asura IBIO INC: CohnReznick LLP Raises Going Concern Doubt ICEWEB INC: Amends 38.9 Million Common Shares Prospectus IDEARC INC: Verizon Begins Defense of $9.8-Bil. Fraud Trial INDIANAPOLIS DOWNS: Ex-Leader Questions Sale to Centaur INTELSAT SA: Closes Sale of U.S. Headquarters for $85 Million INVESTCORP BANK: Fitch Affirms 'BB' Issuer Default Rating IPREO HOLDINGS: S&P Gives 'B+' Rating on $20.9MM Incremental Loan JILL ACQUISITION: Moody's Confirms 'Caa1' Corp. Family Rating JMR DEVELOPMENT: Court Prohibits Use of Lender's Cash Collateral K-V PHARMACEUTICAL: Committee Can Retain Stroock as Lead Counsel K-V PHARMACEUTICAL: Committee Can Retain AGP as Regulatory Counsel K-V PHARMACEUTICAL: Committee Can Retain D&P as Financial Advisor K-V PHARMACEUTICAL: Can Employ Jefferies as Investment Banker LDK SOLAR: Reacts to DOC's Final Ruling re Solar Cells, Modules LEHMAN BROTHERS: Given Approval for Final Settlement With IRS LIBERATOR INC: Webb & Company Raises Going Concern Doubt LONGVIEW POWER: Bank Debt Trades at 17% Off in Secondary Market M & A TOUCH: Case Summary & 7 Unsecured Creditors MAXX HOLDING: Case Summary & 20 Largest Unsecured Creditors MF GLOBAL: Brokerage Trustee Can Settle Claims En Masse MF GLOBAL: Parent's Unpaid Fees Rise to $39.2 Million MF GLOBAL: Inc. Trustee Wins Judge OK to Process 7,000 Claims MGT CAPITAL: Receives Delisting Notice from NYSE MOMENTIVE PERFORMANCE: Proposes to Offer $1.1 Billion Sr. Notes MOMENTIVE PERFORMANCE: Offering $1.1BB Notes at 100% Issue Price MOMENTIVE PERFORMANCE: Moody's Rates Senior Secured Notes 'B1' NATIVE STONE: Updated Case Summary & Creditors' Lists NBTY INC: Moody's Reviews 'B1' CFR/PDR for Downgrade NEDAK ETHANOL: Has 2 Mos. to Cure $26MM Default to Avoid Sale NORTHWAY INN: Case Summary & Unsecured Creditor NTELOS INC: Moody's Rates $475MM Senior Secured Term Loan 'B1' OSAGE EXPLORATION: MaloneBailey Succeeds GKM as Accountant OSHKOSH CORP: S&P Puts 'BB' CCR on Watch on Icahn's $4-Bil. Bid PACIFIC MONARCH: Plan Confirmation Hearing on Nov. 15 PATRIOT COAL: Beats Sierra Club in Selenium Skirmish PEREGRINE FINANCIAL: Wasendorf to Remain in Prison for Life PINNACLE AIRLINES: Reaches Tentative Agreement With AFA PLUG POWER: Receives NASDAQ Notice Regarding Non-Compliance PQ CORP: Moody's Affirms 'B3' CFR; Rates First Lien Debt 'B2' QUAD/GRAPHICS INC: Moody's Says Vertis Buyout Credit Neutral QUAD/GRAPHICS INC: S&P Puts 'BB+' CCR on Watch Neg on Vertis Deal QUINTILES TRANSNATIONAL: Moody's Rates Incremental Term Loan 'B1' RADIO SYSTEMS: Moody's Rates $250-Mil. Senior Secured Notes 'B3' RANDOLPH/ADA: Voluntary Chapter 11 Case Summary RAHA LAKES: Wants to Use Cash Collateral RAHA LAKES: Has $300,000 Loan From Insider RESIDENTIAL CAPITAL: Modifies Executive Bonuses to Satisfy Judge REVEL ENTERTAINMENT: Bank Debt Trades at 25% Off RG STEEL: Inks Settlement Pact with Workers at Lousville Facility RG STEEL: Lease Decision Period Extended Until Dec. 27 RURAL/METRO CORP: Moody's Cuts CFR/PDR to 'B3'; Outlook Negative SANTOLAYA INC.: Case Summary & 6 Unsecured Creditors SIGNATURE-GORDON, LLC: Case Summary & Creditors List SOLYNDRA LLC: Three Government Agencies Objecting to Plan SOLYNDRA LLC: Hit Chinese Solar Firms With Cartel Claims SOUTHEAST BANKING: Chapter 11 Case Conversion Approved SPRINT NEXTEL: S&P Keeps 'B+' Corp Credit Rating on Watch Positive ST. LUKE'S HOSP: S&P Withdraws 'BB-' Rating on Series 2002 Bonds STANDARD STEEL: Moody's Lifts Corp. Family Rating to 'B2' STILLWATER MINING: Debt Issuance No Impact on Moody's 'B2' Rating STILLWATER MINING: S&P Affirms 'B' Corporate Credit Rating STRUCTURAL I COMPANY: Case Summary & 7 Unsecured Creditors T&A DEVELOPMENT: Case Summary & 2 Unsecured Creditors TC GLOBAL: Tully's Coffee Files for Chapter 11 in Seattle TC GLOBAL: Case Summary & 20 Largest Unsecured Creditors T-L BRYWOOD: Wins Approval to Use Cash Until Oct. 31 T-L BRYWOOD: Plan Filing Exclusivity Extended Until Dec. 31 TXU CORP: Bank Debt Trades at 25% Off in Secondary Market ULTERRA DRILLING: Moody's Withdraws 'Caa1' Corp. Family Rating VERTIS HOLDINGS: Seeks Approval of Bidding, Auction Procedures VERTIS HOLDINGS: Wants Schedules Filing Deadline Moved to Dec. 10 VERTIS HOLDINGS: Can Hire Kurtzman Carson as Claims Agent VERTIS HOLDINGS: Sec. 341 Creditors' Meeting Set for Nov. 19 VERTIS HOLDINGS: Court Approves First Day Motions VERTIS HOLDINGS: Meeting to Form Creditors' Panel Set for Oct. 19 WASTE INDUSTRIES: Moody's Affirms 'B1' CFR/PDR; Outlook Negative * Moody's Says Red State Real Estate Markets See Strong Recovery * Moody's Says Corporate Optimism Tempers Economic Nervousness * Rooker-Feldman Doesn't Apply to Post-Bankruptcy Judgment * Akin Gump Adds Seven-Partner Team to Dallas Office * Large Companies With Insolvent Balance Sheets ********* 175 VALLEY: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: 175 Valley Street, LLC 175 Valley Street Sleepy Hollow, NY 10591 Bankruptcy Case No.: 12-23785 Chapter 11 Petition Date: October 5, 2012 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Arlene Gordon-Oliver, Esq. ARLENE GORDON-OLIVER, P.C. Westchester Financial Center 50 Main Street, Suite 1000 White Plains, NY 10606 Tel: (914) 682-2113 Fax: (914) 682-2114 E-mail: ago@gordonoliverlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by George Samaras, managing member. 400 EAST: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: 400 East 51st Street LLC 150 East 58th Street New York, NY 10155 Bankruptcy Case No.: 12-14196 Chapter 11 Petition Date: October 9, 2012 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Robert E. Gerber Debtor's Counsel: Hanh V. Huynh, Esq. HERRICK, FEINSTEIN LLP 2 Park Avenue New York, NY 10016 Tel: (212) 592-1482 Fax: (212) 592-1500 E-mail: hhuynh@herrick.com - and ? Stephen B. Selbst, Esq. HERRICK, FEINSTEIN LLP 2 Park Avenue New York, NY 10016 Tel: (212) 592-1405 Fax: (212) 545-2313 E-mail: sselbst@herrick.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Simon Elias, member and chief administrative officer. 1717 MARKET: Hearing on Relief from Stay Continued Until Nov. 8 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Missouri continued until Nov. 8, 2012, at 8:30 a.m., the hearing to consider Regions Bank's requests: -- for relief from automatic stay regarding 1717 Market Place, LLC's real property located in Jasper County, Missouri; -- to prohibit use of cash collateral; and -- for declaration of single asset real estate case. According to the Regions Bank, as of June 1, 2012, the Debtor owed $10,017,875 under the notes. The obligations of the Debtor to Regions under a term note and a line of credit note are secured by the property and by certain personal property related to the property to which the Debtor has or acquires an interest. Regions Bank says that all proceeds from Debtor's property and accounts are the bank's cash collateral and Regions has not consented to Debtor's use of the cash collateral, nor has the Court authorized the use of the bank's cash collateral. Regions stated that unless the Court orders the Debtor to cease from the use of the bank's cash collateral, and to segregate and account for any cash collateral in its possession, custody or control, the bank will suffer irreparable damage. About 1717 Market Place 1717 Market Place LLC, a grocery-store business, filed for Chapter 11 protection (Bankr. W.D. Mo. Case No. 12-00984) on July 17, 2012, in Springfield, Missouri. The Debtor estimated assets and liabilities of at least $10 million. G&S Holdings LLC owns 98% of the company and the remaining 2% is owned by J. Scott Schaefer and Richard T. Gregg, according to court papers. 1717 Market Place said it is a defendant in a lawsuit brought by Regions Bank in Joplin, Missouri, relating to a promissory note. The bank is seeking the appointment of a receiver. David Schroeder Law Offices, P.C., serves as the Debtor's counsel. Barry Worth of Brown, Smith and Wallace, LLC, was appointed as examiner. David A. Sosne, Esq., and the law firm of Summers Compton Wells PC serve as the examiner's counsel. ADAMIS PHARMACEUTICALS: Five Directors Elected to Board ------------------------------------------------------- The annual meeting of stockholders of Adamis Pharmaceuticals Corporation was held on Oct. 10, 2012. The stockholders elected Dennis J. Carlo, Ph.D., Kenneth M. Cohen, Craig A. Johnson, David J. Marguglio and Tina S. Nova, Ph.D., to the board of directors. An amendment to the company's certificate of incorporation to increase the total number of authorized shares from 185 million to 210 million and the number of authorized shares of common stock from 175 million to 200 million was approved. The stockholders ratified the selection of Mayer Hoffman McCann PC as independent registered public accounting firm for the year ending March 31, 2013. Pursuant to the provisions of the Company's 2009 Equity Incentive Plan, effective Oct. 11, 2012, each non-employee director of the Company, Kenneth M. Cohen, Craig A. Johnson, and Tina S. Nova, Ph.D., received a stock option under the Plan to purchase 35,000 shares of common stock. The exercise price for each such option is $0.75 per share, which was the fair market value of the common stock on the date of grant. Each option vests and becomes exercisable over a period of three years from the grant date, at a rate of 1/36 of the option shares each month. Each option is otherwise subject to the provisions of the Plan. About Adamis San Diego, Calif.-based Adamis Pharmaceuticals Corporation is an emerging pharmaceutical company engaged in the development and commercialization of a variety of specialty pharmaceutical products. Its products are concentrated in major therapeutic areas including oncology (cancer), immunology and infectious diseases (viruses) and allergy and respiratory. The Company's balance sheet at June 30, 2012, showed $1.8 million in total assets, $6.0 million in total liabilities, and a stockholders' deficit of $4.2 million. Going Concern/Bankruptcy Warning As of June 30, 2012, the Company had approximately $720,000 in cash and equivalents, an accumulated deficit of approximately $33.5 million and substantial liabilities and obligations. "If we did not have sufficient funds to continue operations, we could be required to seek bankruptcy protection or other alternatives that could result in our stockholders losing some or all of their investment in us." Mayer Hoffman McCann P.C., in Boca Raton, Fla., expressed substantial doubt about Adamis Pharmaceuticals' ability to continue as a going concern, following the Company's results for the year ended March 31, 2012. The independent auditors noted that the Company has incurred recurring losses from operations and has limited working capital to pursue its business alternatives. ADVANCED MICRO: S&P Puts 'BB-' CCR on Watch on Weak Prelim Results ------------------------------------------------------------------ Standard & Poor's Rating Services placed its ratings on Sunnyvale, Calif.-based semiconductor microprocessor supplier Advanced Micro Devices (AMD) Inc., including its 'BB-' corporate credit rating, on CreditWatch with negative implications. "The CreditWatch action follows the company's announcement yesterday that it expects revenue for the September 2012 quarter to decline approximately 10% sequentially, with weaker demand across all product lines, down from its prior guidance range of - 4% to 2%. The company also expects a 31% gross margin for the September quarter, including the $100 million write-down of its inventory, down from prior guidance of about 44%. We expect these results to contribute to leverage remaining over 3.0x, up from 2.4x as of June 30, 2012, as well as the potential that liquidity could approach the company's $1.5 billion cash minimum target level, from about $1.8 billion as of June 30, 2012. In our view, Intel's sequential revenue decline expectation for the September quarter, which ranges between - 4.5% and flat sequential performance, implies market share weakening for AMD during this period," S&P said. "We plan to meet with management to assess the company's business strategy and financial profile before resolving the CreditWatch," said Standard & Poor's credit analyst John Moore. "We had previously indicated that we could lower the rating if leverage were to stay above 3x or if liquidity were to fall below $1 billion," S&P said. AFA FOODS: Judge Rejects Creditor Settlement -------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that a Delaware bankruptcy judge on Thursday rejected a proposed settlement among AFA Foods Inc.'s creditors over proceeds from the meat processor's liquidation, finding that the deal circumvented the usual protections afforded creditors under a Chapter 11 plan. AFA, which was driven into bankruptcy by consumer backlash over "pink slime" beef filler, reached a global settlement last month where second-lien lenders agreed to give lower-ranking creditors a small cut in the bankruptcy, according to Bankruptcy Law360. About AFA Foods King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the largest processors of ground beef products in the United States. The Company had five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA had seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings -- BLBT -- affected sales. Judge Mary Walrath presides over the case. Lawyers at Jones Day and Pachulski Stang Ziehl & Jones LLP serve as the Debtors' counsel. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. AFA Foods, Inc., disclosed $615,859,574 in assets and $544,499,689 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. The Committee has obtained approval to hire McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon LLP serves as co-counsel. The Committee also obtained approval to retain J.H. Cohn LLP as its financial advisor, nunc pro tunc to April 13, 2012. AFA, in its Chapter 11 case, sold plants and paid off the first- lien lenders and the loan financing the Chapter 11 effort. Remaining assets are $14 million cash and the right to file lawsuits. General Electric Capital Corp. and Bank of America Corp. provided about $60 million in DIP financing. The loan was paid off in July. Yucaipa, the owner and junior lender, has agreed to a settlement that would generate cash for unsecured creditors under a liquidating Chapter 11 plan. Under the deal, Yucaipa will receive $11.2 million from the $14 million, with the remainder earmarked for unsecured creditors. Asset recoveries above $14 million will be split with Yucaipa receiving 90% and creditors 10%. Proceeds from lawsuits will be divided roughly 50-50. In return, Yucaipa will receive release from claims and lawsuits the creditors might otherwise bring. An affiliate of Yucaipa has a $71.6 million second lien and would claim the remaining assets absent settlement. ALCO CORP: MAPFRE Adequate Protection Payment Approved ------------------------------------------------------ The Hon. Mildred Caban Flores of the U.S. Bankruptcy Court for the District of Puerto Rico authorized Alco Corporation to deposit adequate protection payment for MAPFRE PRAICO Insurance Company pursuant to approved stipulation. As reported in the Troubled Company Reporter on Aug. 13, 2012, the Court approved a stipulation between the Debtor and MAPFRE PRAICO Insurance Company for the use of MAPFRE's cash collateral subject to security interest and for permanent adequate protection to MARFRE. The Debtor agreed that, in connection to MAFRE's proofs of claim, the Debtor will carve out the amount of $200,000, from the proceeds of sale for the Debtor's asphalt plant located in Hatillo, Puerto Rico, to BTB Corporation and deposit the same with the Clerk of Court once the sale is approved by the Court and consummated. On July 23, 2012, according to the Debtor's case docket, the Court has approved the sale of the Hatillo Asphalt Plant for $400,000, and the carve-out. The deposit constitutes as adequate protection to MAPFRE. A copy of the stipulation is available for free at http://bankrupt.com/misc/ALCO_cashcoll_stipulation.pdf In a June 29 order, the Court authorized the Debtor's use of MAPFRE's cash collateral. About Alco Corp. Alco Corporation in Dorado, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 12-00139) on Jan. 12, 2012. Carmen D. Conde Torres, Esq., and C. Conde & Associates represent the Debtor in its restructuring effort. Alco tapped Jimenez Vasquez & Associates, PSC, as accountants. The Debtor scheduled $11.2 million in assets and $7.76 million in debts. The petition was signed by Alfonso Rodriguez, president. The Plan considers the full payment of all administrative, secured creditors and priority claims and a 50% dividend to the general unsecured creditors on monthly installments within 5 years from the effective date. ALLIED SYSTEMS: Taps Ogletree as Labor & Benefits Counsel --------------------------------------------------------- Allied Systems Holdings, Inc., and its U.S. and Canadian subsidiaries ask the U.S. Bankruptcy Court for the District of Delaware for authorization to employ Ogletree, Deakins, Nash, Smoak & Stewart, P.C., as labor and benefits counsel for the Debtors, nunc pro tunc to Oct. 1, 2012. Ogletree will (i) advise and represent the Debtors in connection with labor and benefits matters, including the Debtors' current collective bargaining agreements and employee benefit and retirement plans, (ii) advise and represent the Debtors in any labor or employee benefits matters arising in connection with these Chapter 11 cases, and (iii) advise and represent the Debtors in negotiations and litigation, if any, related to the Debtors' collective bargaining agreements with its union employees or the Debtors' employee benefits and retirement plans. Ogletree's billing rates currently range from $300 to $650 per hour for shareholders, $200 to $640 per hour for counsel, $175 to $415 per hour for associates and $100 to $260 per hour for para- professionals. To the best of the Debtors' knowledge: (a) Ogletree is a "disinterested person" under Section 101(14) of the Bankruptcy Code. The Debtors owe Ogletree $4,109 for prepetition services rendered to the Debtor. 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 LLP and Richards Layton & Finger, P.A. 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. ALLIED SYSTEMS: Employs PwC to Provide Tax Compliance Services -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Allied Systems Holdings, Inc., et al., to employ PricewaterhouseCoopers LLP to provide tax compliance services to the Debtors, nunc pro tunc to June 10, 2012. The Debtors are authorized to employ, compensate, and reimburse PwC. However, for services (a) billed on the fixed fee schedule, PwC will include as an exhibit to each fee application (i) a summary of the approximate time agent by professionals in lieu of contemporaneous time records in partial hour increments and (ii) a general description of the services provided, or (b) provided on an hourly basis, PwC will submit time records setting forth a description of the services rendered by each professional and the amount of time spent on each date, in half hour increments, by each such individual in rendering services on behalf of the Debtors. 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 LLP and Richards Layton & Finger, P.A. 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. ALLY FINANCIAL: Declares Dividends on Preferred Stock ----------------------------------------------------- The Ally Financial Inc. board of directors has declared quarterly dividend payments for certain outstanding preferred stock. Each of these dividends were declared by the board of directors on Oct. 4, 2012, and are payable on Nov. 15, 2012. A quarterly dividend payment was declared on Ally's Fixed Rate Cumulative Mandatorily Convertible Preferred Stock, Series F-2, of approximately $134 million, or $1.125 per share, and is payable to the U.S. Department of the Treasury. A quarterly dividend payment was also declared on Ally's Fixed Rate Cumulative Perpetual Preferred Stock, Series G, of approximately $45 million, or $17.50 per share, and is payable to shareholders of record as of Nov. 1, 2012. Additionally, a dividend payment was declared on Ally's Fixed Rate/Floating Rate Perpetual Preferred Stock, Series A, of approximately $22 million, or $0.53 per share, and is payable to shareholders of record as of Nov. 1, 2012. Including the aforementioned dividend payments on the Series F-2 Preferred Stock, Ally will have paid a total of approximately $5.8 billion to the U.S. Treasury since February 2009. This amount includes preferred stock dividends, interest payments and proceeds received by the U.S. Treasury in its sale of Ally trust preferred securities. About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. Ally reported a net loss of $157 million in 2011, compared with net income of $1.07 billion in 2010. Net income was $310 million for the three months ended March 31, 2012. The Company's balance sheet at June 30, 2012, showed $178.56 billion in total assets, $160.19 billion in total liabilities and $18.36 billion in total equity. * * * In February 2012, Fitch Ratings downgraded the long-term Issuer Default Rating (IDR) and the senior unsecured debt rating of Ally Financial and its subsidiaries to 'BB-' from 'BB'. The Rating Outlook is Negative. The downgrade primarily reflects deteriorating operating trends in ResCap, which has continued to be a drag on Ally's consolidated credit profile, as well as exposure to contingent mortgage-related rep and warranty and litigation issues tied to ResCap, which could potentially impact Ally's capital and liquidity levels. As reported by the TCR on May 22, 2012, Standard & Poor's Ratings Services revised its outlook on Ally Financial Inc. to positive from stable. At the same time, Standard & Poor's affirmed its ratings, including its 'B+' long-term counterparty credit and 'C' short-term ratings, on Ally. "The outlook revision reflects our view of potentially favorable implications for Ally's credit profile arising from measures the company announced May 14, 2012, designed to resolve issues relating to Residential Capital LLC, Ally's troubled mortgage subsidiary," said Standard & Poor's credit analyst Tom Connell. In the May 28, 2012, edition of the TCR, DBRS, Inc., has placed the ratings of Ally Financial Inc. and certain related subsidiaries, including its Issuer and Long-Term Debt rating of BB (low), Under Review Developing. This rating action follows the decision by Ally's wholly owned mortgage subsidiary, Residential Capital, LLC (ResCap) to file a pre- packaged bankruptcy plan under Chapter 11 of the U.S. Bankruptcy Code. AMBAC FINANCIAL: Court Modifies Equity Trading Protocol ------------------------------------------------------- At the behest of Ambac Financial Group, Inc., Judge Shelly Chapman entered an order in late September 2012 modifying the procedures for transfers of claims and equity interests in the Debtor's estate. The Debtor has said the net operating losses (NOLs) are one of the properties of its bankruptcy estate and that it wants to ensure that proper restrictions are in place to preserve the value of those NOLs. After the Debtor confirmed their fifth amended bankruptcy plan on March 14, 2012, claimholders have asked whether or not their current and/or proposed holdings of claims/equity interests breach the "Threshold Amount," given the planned issuance of New Ambac Stock pursuant to the Confirmed Plan. The Debtor believes that clarification of the definition of "Threshold Amount" is necessary to properly enforce the NOL Order. In that vein, the Debtor sought and obtained Court permission to issue a Sell-Down Order whenever it has actual knowledge that an entity acquires Claims that exceed the Threshold Amount, including where that entity fail to file a Substantial Claimholder Notice and/or a Proposed Claims Acquisition Order. In consultation with the Official Committee of Unsecured Creditors, the Debtor proposed to modify: (a) the definition of Threshold Amount to (i) take account of the various classes of Claims and to, among other things, distinguish between certain subordinated claims and certain senior claims; (ii) provide more specific guidance to creditors as to how the Threshold Amount will be calculated in relation to the status of their Claims and provide a specific conversion ratio for each type of claim; and (iii) provide more specific information as to how to account for certain warrants and certain other potentially diluting interests in New Ambac Stock that will be issued to Claimsholders pursuant to the Plan. (b) the procedures in relation to certain timing issues for a transfer of Claims required by a Sell Down Notice so that they occur prior to the Debtor's emergence from Chapter 11 protection. Under the Debtor's proposal, the term "Threshold Amount" will refer to (i) $56,929,773 or more of Senior Note Claims or (ii) any combination of Claims that could result in an amount of New Ambac Stock to be issued pursuant to the terms of a 382(l)(5) Plan that is equal to or greater than the Applicable Amount. In making such determination as to the Applicable Amount (y) on a non-diluted basis, Senior Notes Claims and General Unsecured Claims will be multiplied by a factor of 0.079% per $1 million of Claims and Subordinated Notes Claims will be multiplied by a factor of 0.0034% per $1 million of Claims, and (z) on a fully diluted basis, Senior Notes Claims and General Unsecured Claims will be multiplied by a factor of 0.071% per $1 million of Claims and Subordinated Notes Claims will be multiplied by a factor of 0.026% per $1 million of Claims, in each case with proportionate adjustments to the foregoing conversion factors as may be necessary for residual Claims of less than $1 million. A full-text copy of the Sept. 27, 2012 Amended NOL Order is available at http://bankrupt.com/misc/AMBAC_AmdNOLOrdSpt27.PDF About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Judge Shelley C. Chapman entered an order confirming the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc. on March 14, 2012. The Plan provides for the full payment of secured claims and 8.5% to 13.2% recovery for general unsecured claims. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). The Company's balance sheet at June 30, 2012, showed $26.61 billion in total assets, $30.36 billion in total liabilities and a $3.75 billion total stockholders' deficit. AMBAC FINANCIAL: KPMG Providing Additional Services --------------------------------------------------- John Verdonck, a partner at KPMG LLP, filed a third supplemental declaration with the Bankruptcy Court overseeing Ambac Financial Group, Inc.'s case, on Sept. 10, 2012, to disclose additional services to be provided by KMPG to the Debtor. Mr. Verdonck said KPMG has agreed to continue to provide certain audit services as KPMG and the Debtor will deem appropriate and feasible in order to advise the Debtor in the course of the case, including: A. In-Scope Audit Services (1) Audit of the consolidated balance sheet of the Debtor and non-debtor affiliates as of Dec. 31, 2012 and 2011, the related consolidated statements of operations, stockholders' equity and cash flows for each of the years in the two-year period ended December 31, 2012 and schedules and notes supporting such financial statements prepared in accordance with U.S. generally accepted accounting principles; (2) Review, in accordance with Statement on Auditing Standards No. 100, Interim Financial Information, the consolidated balance sheets of Ambac Financial Group, Inc. as of March 31, June 30, and September 30, 2012, and the related consolidated statements of operations, stockholders' equity, and cash flows for the quarterly and year-to-date periods then ended and notes, which are to be included in the quarterly reports (Form 10-Qs); (3) Audits of the U.S. domestic non-debtor subsidiaries' statutory statements of admitted assets, liabilities and surplus of non-debtor affiliate as of December 31, 2012, and schedules supporting such financial statements, prepared in accordance with statutory statements of accounting principles; (4) Audits of the balance sheets of the non-debtor affiliates Juneau Investments, LLC, Aleutian Investments, LLC and Orient Bay, LLC, as of December 31, 2012, and 2011, the related consolidated statements of operations, stockholders' equity, and cash flows for each of the years in the two-year periods ended December 31, 2012, and schedules supporting such financial statements, prepared in accordance with U.S. generally accepted accounting principles; (5) Issuance of a comfort letter if required and requested; (6) Report to the Audit and Risk Assessment Committee in writing regarding corrected misstatements, uncorrected misstatements, significant difficulties, encountered with Debtor and other matters required to be communicated by auditing standards; and (7) Read minute of Audit and Risk Assessment Committee meetings for consistency with KPMG's understanding of the communications; and B. Out-of-Scope Services (8) Assistance regarding certain events and accounting pronouncements which may have a significant impact on KPMG's audit efforts, which may include: * significant acquisitions; * dispositions of businesses; * significant and infrequent transactions with complex business implications; * accounting and auditing matters related to this chapter 11 bankruptcy to the extent it results in additional audit effort; * change in operating segments or reporting units; * asset impairment analyses; * fresh start accounting and related audit efforts; * review of registration statements and/or comfort letters provided to third parties; * review and comment on comment letters received from the United States Securities and Exchange Commission and the Office of the Commissioner of Insurance of Wisconsin (OCI) and responses provided to such letters related to accounting matters; and * the adoption of new accounting or auditing pronouncements, etc. KPMG's 2012 Financial Statement Audit services are to be charged at both a fixed rate as well as an hourly rate. A fixed rate of $2.31 million is applicable to the "In-Scope Audit" Services, for which KPMG bills the Debtor on a monthly basis in equal installments of $192,500 for a 12-month period. With respect to any "Out-of-Scope Audit" Services to be performed for the Financial Statement Audit, the Debtor has proposed to pay KPMG at these hourly rates: Audit, Audit-Related and Other Services Discounted Rates ------------------------ ---------------- Partner/Managing Director $525 to $625 Senior Manager/Manager $375 to $475 Staff $225 to $325 KPMG's fee statements filed with the Bankruptcy Court will only reflect the allocable fees to the Debtor. The firm will issue an invoice to non-debtor entity Ambac Assurance Company for the respective allocable services in the ordinary course. KPMG, Mr. Verdonck said, also has agreed to provide certain Tax Compliance and Consulting services as KPMG and the Debtor deem appropriate: A. Tax Compliance Services (1) Provide Tax Return Review Services, including the review of the following 2011 tax return(s): a. Form 1120-Ambac Financial Group, Inc. and Subsidiaries; b. Form 1120-Ambac Financial Group, Inc. proforma return; c. Form 1120-PC-Ambac Assurance Corporation pro forma return; and d. Form 1120-PC-Everspan Financial Guarantee Corporation proforma return. B. Tax Consulting Services (2) Provide general tax consulting services including: a. routine tax advice concerning the federal, state, local, and foreign tax related to the preparation of the prior year's federal, state, local, and foreign tax returns; b. routine tax advice concerning the federal, state, local, and foreign tax matters related to the computation of the client 's taxable income for the current year or future years; and c. routine dealings with a federal, state, local, or foreign tax authority (e.g., responding to automated interest and penalty notices, preparing tax computations based upon the taxpayer's concession or settlement of an issue with the relevant tax authority). KPMG is seeking compensation for professional services rendered to the Debtor for tax compliance and consulting services based on the hours actually expended by each assigned staff member at each staff member's hourly rate. KPMG's fee for tax compliance services will be the lesser of (i) actual time incurred to complete the work at 70% of the firm's standard hourly rates, or (ii) $40,000. KPMG's fees for tax consulting services will be the lesser of (i) actual time incurred to complete the work at 70% of our standard hourly rates, or (ii) $10,000. The Debtor has agreed to compensate KPMG for professional services rendered for tax return review services at its normal and customary hourly rates, subject to the reductions: Tax Compliance and Consulting Services Discounted Rates ------------------- ---------------- Partner $635 Managing Director $550 Senior Manager $500 Manager $470 Senior Associate $400 Associate $275 KMPG will also seek reimbursement for reasonable and necessary expenses incurred consistent with the Engagement Letters. Mr. Verdonck attested that KPMG remains a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Thus, he maintains, KPMG continues to be eligible for retention by the Debtor under the Bankruptcy Code. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Judge Shelley C. Chapman entered an order confirming the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc. on March 14, 2012. The Plan provides for the full payment of secured claims and 8.5% to 13.2% recovery for general unsecured claims. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). The Company's balance sheet at June 30, 2012, showed $26.61 billion in total assets, $30.36 billion in total liabilities and a $3.75 billion total stockholders' deficit. AMBAC FINANCIAL: AFG Pursuing Suits for Breaches & Fraud -------------------------------------------------------- Ambac Financial Group, Inc., continues to pursue lawsuits seeking redress for breaches of representations and warranties and fraud related to the information provided by both the underwriters and the sponsors of various transactions, according to the Company's Form 10-Q filing with the U.S. Securities and Exchange Commission for the quarter ended June 30, 2012. In the ordinary course of their businesses, certain of Ambac's subsidiaries assert claims in legal proceedings against third parties to recover losses already paid and/or mitigate future losses. The amounts recovered and/or losses avoided which may result from these proceedings is uncertain, although recoveries and/or losses avoided in any one or more of these proceedings during any quarter or fiscal year could be material to Ambac's results of operations in that quarter or fiscal year. In connection with Ambac's efforts to seek redress for breaches of representations and warranties and fraud related to the information provided by both the underwriters and the sponsors of various transactions and for failure to comply with the obligation by the sponsors to repurchase ineligible loans, Ambac Assurance has filed these lawsuits: * Ambac Assurance Corporation v. EMC Mortgage LLC (formerly known as EMC Mortgage Corporation), J.P. Morgan Securities, Inc. (formerly known as Bear, Stearns & Co. Inc.), and JP Morgan Chase Bank, N.A. (Supreme Court of the State of New York, County of New York, filed February 17, 2011). This case is the continuation of a case that was originally filed on November 5, 2008 in the U.S. District Court for the Southern District of New York but that was dismissed from federal court after Ambac Assurance was granted leave to amend its complaint to add certain new claims (but not others) and a new party, which deprived the federal court of jurisdiction over the litigation. After the decision by the federal judge, dated February 8, 2011, Ambac Assurance re-filed the suit in New York state court on February 17, 2011. On July 18, 2011, Ambac Assurance filed a First Amended Complaint in its state-court litigation. In its state-court action, Ambac Assurance asserts claims for breach of contract, indemnification and reimbursement against EMC, as well as claims of fraudulent conduct by EMC and J. P. Morgan Securities Inc. In its First Amended Complaint, Ambac Assurance asserts an additional claim for breach of contract against EMC and a claim for successor liability against a new defendant, JP Morgan Chase Bank, N.A. The Defendants filed their answer to the First Amended Complaint on August 30, 2011, and the parties are currently engaged in discovery. * Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation v. EMC Mortgage LLC (formerly known as EMC Mortgage Corporation), J.P. Morgan Securities, Inc. (formerly known as Bear, Stearns & Co. Inc.), and JP Morgan Chase Bank, N.A. (Supreme Court of the State of New York, County of New York, filed March 30, 2012). Ambac Assurance alleges claims for fraudulent inducement and breach of contract against EMC and J.P. Morgan Securities Inc., as well as claims against JP Morgan Chase Bank, N.A. as EMC's successor in interest, arising from the defendants' misrepresentations and breaches of contractual warranties regarding certain transactions that are not the subject of Ambac Assurance's previously filed lawsuit against the same defendants. Defendants filed a motion to dismiss on June 8, 2012. Ambac Assurance intends to oppose the motion. * Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation v. First Franklin Financial Corporation, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Inc., Merrill Lynch Mortgage Lending, Inc., and Merrill Lynch Mortgage Investors, Inc. (Supreme Court of the State of New York, County of New York, filed April 16, 2012). Ambac Assurance alleges breach of contract, fraudulent inducement, indemnification, reimbursement and requested the repurchase of loans that breach representations and warranties as required under the contracts, as well as damages. Defendants filed a motion to dismiss on July 13, 2012. Ambac Assurance intends to oppose the motion. * Ambac Assurance Corporation and the Segregated Account of Ambac Assurance Corporation v. DLJ Mortgage Capital, Inc. and Credit Suisse Securities (USA) LLC (Supreme Court of the State of New York, County of New York, filed on January 12, 2010). Ambac Assurance alleged breach of contract, fraudulent inducement, breach of implied duty of good faith and fair dealing, indemnification, reimbursement and requested the repurchase of loans that breach representations and warranties as required under the contracts, as well as damages. On July 8, 2010, the defendants moved to dismiss the complaint. Ambac Assurance opposed the motion. In decisions dated April 7, 2011 and October 7, 2011, the Court granted the defendants' motion in part striking only Ambac Assurance's claim for consequential damages and jury demand. The Court otherwise denied the defendants' motion. Ambac Assurance is appealing the court's decision striking the jury demand for Ambac Assurance's fraudulent inducement claim. Discovery is ongoing. No trial date has been set. * Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation v. Countrywide Securities Corp., Countrywide Financial Corp. (a.k.a. Bank of America Home Loans) and Bank of America Corp. (Supreme Court of the State of New York, County of New York, filed on September 28, 2010). Ambac Assurance filed an Amended Complaint on September 8, 2011. Ambac Assurance has alleged breach of contract, fraudulent inducement, indemnification and reimbursement, breach of representations and warranties and has requested the repurchase of loans that breach representations and warranties as required under the contracts as well as damages and has asserted a successor liability claim against Bank of America. The defendants answered the Amended Complaint on or about November 3, 2011. Discovery is ongoing. No trial date has been set. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Judge Shelley C. Chapman entered an order confirming the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc. on March 14, 2012. The Plan provides for the full payment of secured claims and 8.5% to 13.2% recovery for general unsecured claims. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). The Company's balance sheet at June 30, 2012, showed $26.61 billion in total assets, $30.36 billion in total liabilities and a $3.75 billion total stockholders' deficit. AMBAC FINANCIAL: AAC Says 92 Policy Claims Won't Be Paid -------------------------------------------------------- The Circuit Court for Dane County, Wisconsin, approved a motion by the Wisconsin Commissioner of Insurance, acting as the Rehabilitator of the Segregated Account of Ambac Assurance Corporation, to commence making interim cash payments on policy claims submitted to the Segregated Account in an amount, in cash, equal to 25% of the permitted amount of each Policy Claim. To facilitate the Interim Cash Payment Order, the Rehabilitator has promulgated Rules Governing the Submission, Processing and Partial Payment of Policy Claims in accordance with the June 4, 2012, Interim Cash Payment Order. In accordance with the Policy Claim Rules, beginning in August 2012, policyholders that submit compliant Policy Claims by the end of a calendar month and which are permitted and approved by the Rehabilitator for payment are eligible to receive 25% of the amount of the permitted Policy Claim from the Segregated Account on or around the 20th day of the following month. As of Aug. 31, 2012, Ambac Assurance Corporation, as the management services provider for the Segregated Account, had received most of the Policy Claims relating to the period between March 24, 2010 and July 31, 2012, that it had expected. However, as of Aug. 31, 2012, it has not received Policy Claims relating to the Moratorium Period in respect of 80 CUSIPs which it had expected to receive. As these Moratorium Period Policy Claims were not received on or before the end of August 2012, they are not eligible for consideration for payment from the Segregated Account as of Sept. 20, 2012. Instead, these Moratorium Period Policy Claims will be evaluated for payment upon receipt of compliant Policy Claims in accordance with the Policy Claim Rules. In addition, 12 Securities have not had Policy Claims submitted in respect of the period relating to the payment date falling in August 2012 and accordingly will also not be eligible for consideration for payment as of Sept. 20, 2012. A full-text copy of AFG's Form 8-K is available for free at: http://is.gd/XY5ac8 About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Judge Shelley C. Chapman entered an order confirming the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc. on March 14, 2012. The Plan provides for the full payment of secured claims and 8.5% to 13.2% recovery for general unsecured claims. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). The Company's balance sheet at June 30, 2012, showed $26.61 billion in total assets, $30.36 billion in total liabilities and a $3.75 billion total stockholders' deficit. AMERICAN AIRLINES: American Eagle Pilots Accept New Labor Contract ------------------------------------------------------------------ A majority of American Eagle Airlines Inc.'s pilots have voted in favor of a new labor deal between their union and AMR Corp., according to an October 9 report by DowJones' Daily Bankruptcy Review. The Air Line Pilots Association union, which represents more than 3,100 American Eagle pilots, said that 75% of those who cast their ballots chose to ratify the labor agreement. Eighty-five percent of the eligible pilots voted on the deal, the report said. According to AMR's restructuring website, no pay reductions were proposed for American Eagle pilots under the eight-year agreement, which also covers changes to the pilots' vacation and sick leave. The company expects to save $43.1 million annually by implementing the new terms. Together with the pilots' agreement, the flight attendants and fleet-service deals will save American Eagle a total of $57.1 million per year. As of last month, American Eagle said it still needed to secure concessions from aircraft-maintenance technicians, dispatchers and ground school instructors who are represented by the Transport Workers Union of America, the Daily Bankruptcy Review reported. The new contract between ALPA and American Eagle is subject to the approval of the U.S. Bankruptcy Court in Manhattan. 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: Seeks Approval of $1.5 Billion Financing ----------------------------------------------------------- AMR Corp. has filed a motion seeking authority from Bankruptcy Judge Sean Lane to obtain as much as $1.5 billion in financing. AMR, the parent company of American Airlines Inc., has negotiated terms of the financing and will repay $1.3 billion in outstanding notes, according to an October 10 report by Bloomberg News. The company's $174.2 million of 13% secured notes due in August 2016 dropped 3 cents to 103.5 cents on the dollar at 8:31 a.m. on Oct. 10 in New York, the report said, citing Trace, the bond- price reporting system of the Financial Industry Regulatory Authority, as its source. Meanwhile, AMR's $703.6 million of 8.625 pass-through certificates plunged 4 cents to 103.5 on the same date, according to the report. The company wants to redeem the 13% notes, the 8.625 certificates and $445.6 million of 10.375% pass-through debt "without the payment of any make-whole amount" or "any other premium or prepayment penalty," Bloomberg News reported. A court hearing to consider approval of the proposed financing is scheduled for October 30. Objections are due by October 23. 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: Proposes Deal for Embraer Planes Transfer ------------------------------------------------------------ AMR Corp. has filed a motion seeking court approval of a settlement agreement related to the financing or transfer of Embraer aircraft owned by American Airlines Inc. American Airlines, an AMR subsidiary, owns a fleet of Embraer regional jet aircraft financed through mortgage financing agreements with Brazilian banks Agencia Especial de Financiamento Industrial and Banco Nacional de Desenvolvimento, the financing parties, and Bank of New York Mellon Trust Company N.A., which serves as security trustee. A list of the aircraft is available for free at http://is.gd/X2SfGu The aircraft were previously owned by another AMR subsidiary, American Eagle Airlines Inc. The company turned over the aircraft to American Airlines in exchange for the latter's assumption of its obligations under the mortgage financing agreements. The settlement provides for the transfer of, and entry into new leases with respect to, certain of the aircraft. It also grants BNY Mellon an allowed general unsecured nonpriority claim in the sum of $650 million against American Airlines and AMR. Meanwhile, American Airlines' aggregate outstanding debt obligations of approximately $1.75 billion with respect to the aircraft will be reduced by approximately $670 million or 38%, a reduction that brings the financing cost for the aircraft into alignment with market rates, according to court filings. "This economic benefit to the debtors' estates will commence immediately upon the court's granting of the motion and, therefore, will not have to await the effective date of a plan of reorganization," Alfredo Perez, Esq., at Weil Gotshal & Manges LLP, in New York, said. The terms of the proposed settlement are outlined in a term sheet, a copy of which is available without charge at http://bankrupt.com/misc/AMR_TermSheetERJAircraft.pdf A court hearing is scheduled for Oct. 30. Objections are due by Oct. 23. American Eagle Giving Up 39 Embraer Planes Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp. and its lenders agreed on cutting the cost of operating 216 smaller-capacity regional jets manufactured by Embraer SA and operated by American Eagle Inc., the feeder airline for American Airlines Inc. According to the report, in return for dropping some aircraft from the fleet and reducing the rent on others, the lenders will have an approved unsecured claim for $650 million. The settlement is scheduled for approval at an Oct. 30 hearing in U.S. Bankruptcy Court in New York. The restructuring reduces $1.75 billion in obligations on the aircraft by about $670 million, or 38%, according to AMR's court filing. The report relates that AMR previously stopped flying 18 of the 37-seat aircraft that are being returned to the owners. Another 21 of the 37-seat ERJ135 models will be given up by the end of 2013. In the meantime, AMR will pay market rent at the reduced price of $40,000 a month. On 59 model ERJ140 aircraft with 44 seats, the debt will be reduced by 49%. For 68 newer ERJ145 models with 50 seats, the financing will be cut by 34%. The report notes that AMR will continue paying the original amounts for another 50 of the ERJ145s. The pre-bankruptcy financings are with Brazil's Agencia Especial de Financiamento Industrial and Banco Nacional de Desenvolvimento Economico e Social. Bank of New York Mellon Trust Co. NA is the security trustee. When the bankruptcy began, AMR had about 300 regional jets in the American Eagle fleet. 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: Proposes Leases for Four MD-80 Aircraft ---------------------------------------------------------- American Airlines Inc. and its affiliated debtors sought and obtained a court order authorizing them to enter into new lease transaction related to four MD-80 Aircraft. American Airlines leases the aircraft pursuant to a public leveraged lease transaction. U.S. Bank N.A. serves as trustee with respect to the aircraft. Under the new transaction, the existing lease for three MD-80 aircraft bearing U.S. registration numbers N584AA, N587AA and N589AA will be cancelled upon entry into a new lease for those aircraft with a new lessor. Meanwhile, American Airlines and U.S. Bank will enter into a term sheet for the MD-80 aircraft bearing U.S. registration number N588AA. The bank agreed to grant the company an extension of the 60-day period under Section 1110 of the Bankruptcy Code with respect to the aircraft. The aircraft are useful in the operation of American Airlines' business; however, the rates under the existing leases substantially exceed market rates for comparable aircraft, according to court filings. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. AMERICAN Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Wins OK for $268MM Financing From RPK -------------------------------------------------------- American Airlines Inc. won court approval to obtain financing of up to $268 million from a subsidiary of RPK Capital Partners LLC. The funds will be used to finance used aircraft including two Boeing 777-200ER aircraft and eight Boeing 737-800 aircraft. The aircraft are subject to pre-bankruptcy mortgage loan facilities that are scheduled to mature between October 2012 and May 2013. The financing will allow American Airlines to refinance or to repay some of the pre-bankruptcy loans secured by the aircraft, according to court filings. American Airlines selected the mortgage financing bid from RPK as the "best bid" for the aircraft based on advance rate, interest rate and other economic factors, according to Matthew Landess, managing director at the financial advisory firm SkyWorks Capital LLC. 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: Bonds Bounce Back Partly After Early Plunge -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the announcement that AMR Corp. intends to pay off $1.32 billion in aircraft bonds without paying the make whole premium roiled the market for the company's debt. According to the report, the $446 million in 10.375% pass-through certificates last traded on Sept. 9 for 110 cents on the dollar. After AMR's announcement, they traded as low as 102.5 cents on Oct. 10 and last traded at 106, to yield 9.189%, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Were the make-whole premium enforced, the parent of American Airlines Inc. would be required to pay off the same bonds for 155 cents on the dollar. The report relates that a make-whole premium is designed to compensate debt holders for loss of an investment if bonds are paid off at maturity when market interest rates are lower. AMR's attempt at paying off the bonds without a make-whole premium is currently scheduled for hearing on Oct. 30. Bondholders are to file their objections by Oct. 23. In saying the premium isn't an owing, AMR point to provisions in the indentures saying there is no make-whole in the event of bankruptcy or default. The bondholders may point to the so-called 1110 election that AMR made early in the bankruptcy. The term is derived from Section 1110 of the U.S. Bankruptcy Code, which requires an airline to decide within 60 days of bankruptcy whether to retain aircraft. If the airline elected to keep aircraft, it must agree to "perform all obligations" under the loan documents. The report notes that issues to be decided by the bankruptcy judge in Manhattan include whether the AMR's 1110 election to retain the aircraft and perform the loan documents took away the ability to pay off the bonds without the make-whole. 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: Still Cutting Flights Until Delays Improve ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp. said Oct. 11 that the flight schedule for subsidiary American Airlines Inc. will continue being reduced by 1% through mid-November because on-time arrivals haven't improved enough. According to the report, the inability to match competitors' on-time arrival rate began in September, immediately after the airline began imposing court-authorized contract concessions on the pilots' union. Oct. 11, the on-time rate was about 76%. The day before, it was 65%. 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 COMMERCE: Reports $13,300 Net Income in Aug. 31 Quarter ---------------------------------------------------------------- American Commerce Solutions, Inc., reported net income of $13,308 on $554,519 of net sales for the three months ended Aug. 31, 2012, compared with a net loss of $57,617 on $550,150 of net sales for the three months ended Aug. 31, 2011. For the six months ended Aug. 31, 2012, the Company had net income of $96,945 on $1.2 million of net sales, compared a net loss of $127,227 on $1.2 million of net sales for the six months ended Aug. 31, 2011. During the three and six months ended Aug. 31, 2012, the Company recognized forgiveness of debt owed to an unrelated party due to expiration of statutory period of $75,478 and $208,489, respectively. The Company's balance sheet at Aug. 31, 2012, showed $5.0 million in total assets, $4.4 million in total liabilities, and stockholders' equity of $606,872. The Company has defaulted on a total of $478,244 of notes payable. The amount of principal payments in arrears was $226,988 with an additional amount of $251,256 of interest due at Aug. 31, 2012. These defaults are the result of a failure to pay in accordance with the terms agreed. "The Company has incurred substantial operating losses since inception and has provided approximately $1,000 of cash from operations for the six months ended August 31, 2012," the Company said in its quarterly report for the period ended Aug. 31, 2012. "Additionally, the Company is in default on several notes payable. These factors raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon its ability to reverse negative operating trends, raise additional capital, and obtain debt financing." A copy of the Form 10-Q is available at http://is.gd/GeqMDX About American Commerce American Commerce Solutions, Inc., headquartered in Bartow, Florida, is primarily a holding company with one wholly owned subsidiary; International Machine and Welding, Inc., is engaged in the machining and fabrication of parts used in heavy industry, and parts sales and service for heavy construction equipment. * * * As reported in the TCR on May 28, 2012, Peter Messineo, CPA, of Palm Harbor, Florida, expressed substantial doubt about American Commerce's ability to continue as a going concern, following its audit of the Company's financial position and results of operations for the fiscal year ended Feb. 29, 2012. The independent auditors noted that the Company has incurred recurring losses from continuing operations, has negative working capital and has used significant cash in support of its operating activities. Additionally, as of Feb. 29, 2012 the Company is in default of several notes payable. AMERICAN LEARNING: Fails NASDAQ $1 Bid Price Rule ------------------------------------------------- American Learning Corporation disclosed that on Oct. 10, 2012, it received a deficiency letter from The Nasdaq Stock Market LLC indicating that the closing bid price of its common stock had fallen below $1.00 for 30 consecutive business days, and therefore, the Company was not in compliance with Nasdaq Listing Rule 5550(a) (2). In accordance with Nasdaq Listing Rule 5810(c) (3) (A), the Company was provided a grace period of 180 calendar days, or until April 8, 2013, to regain compliance with this requirement. At this time, this notification has no effect on the listing of the Company's common stock on The Nasdaq Capital Market. The Company can regain compliance with the minimum closing bid price rule if the bid price of its common stock closes at $1.00 or higher for a minimum of 10 consecutive business days during the initial 180 calendar day compliance period, although Nasdaq may, in its discretion, require the Company to maintain a bid price of at least $1.00 per share for a period in excess of 10 consecutive business days (but generally no more than 20 consecutive business days) before determining that the Company has demonstrated the ability to maintain long-term compliance. If compliance is not achieved by April 8, 2013, the Company may be eligible for an additional 180 calendar day grace period if it meets The Nasdaq Capital Market initial listing criteria as set forth in Nasdaq Listing Rule 5505 other than the minimum closing bid price requirement. If the Company is not eligible for such additional grace period, or does not regain compliance during any additional compliance period, Nasdaq will provide written notice to the Company that its securities will be delisted from The Nasdaq Capital Market. At such time, the Company would be able to appeal the delisting determination to the Nasdaq Listing Qualifications Department. American Learning, through its wholly owned subsidiaries, Interactive Therapy Group Consultants, Inc. and Signature Learning Resources, Inc., offers a comprehensive range of services to children with developmental delays and disabilities. ARCAPITA BANK: Lease Decision Period Extended to Plan Confirmation ------------------------------------------------------------------ On Oct. 11, 2012, the U.S. Bankruptcy court for the Southern District of New York further extended the time in which Arcapita Bank B.S.C.(c), et al., could elect to assume or reject unexpired leases of nonresidential real property, pursuant to Section 365(d)(4)(B)(i) of the Bankruptcy Code, from Oct. 15, 2012, through and including the date on which the Court enters an order confirming a plan of reorganization or plan of liquidation for the Debtors. The Debtors estimate that, as of the Petition Date, they were party to nine unexpired leases of nonresidential real property with AHQ Holding Company, W.L.L., Noon Investment Company, Quatar Islamic Bank, and Arcapita, Inc. 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. ARCAPITA BANK: Final Plan Exclusivity Extension Expires Dec. 15 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York entered, on Oct. 12, 2012, an extending Arcapita Bank B.S.C.(c)'s exclusive periods to file a plan or plans of reorganization and to solicit acceptances of the plan or plans until Dec. 15, 2012, and Feb. 12, 2013, respectively. The extension of the exclusive solicitation period is without prejudice to such further requests to extend the exclusive solicitation period that may be made by the Debtors or any party in interest; provided, however, that as agreed by the Debtors, the Debtors will not request a further extension of the exclusive filing period beyond the extension to Dec. 15, 2012. Pursuant to the order, if the Debtors fail to meet either of the following two conditions, or to obtain Committee consent otherwise, commencing by no later than Nov. 1, 2012, the Debtors will abandon efforts to propose a plan of reorganization based on new equity infusion and will instead immediately and exclusively seek to negotiate with their creditors a Chapter 11 plan contemplating an orderly wind-down of their businesses and assets: (1) By Nov. 1, 2012, the Debtors will have "new money" equity commitments of at least $250,000,000, which funds will have been deposited into escrow in New York or an irrevocable letter of credit from a money center bank located in New York or London (or such other bank(s) mutually acceptable to the Debtors and the Committee) in the name of one or more of the Debtors. The new money deposits and letters of credit will be subject to the terms of a commitment letter or other agreement setting forth conditions precedent to the use and application of the money deposited in exchange for equity in the reorganized Debtors. - and - (2) The Debtors will have entered into an agreement with the Committee reflecting the consent of the providers of proposed "new money" equity commitments described in first condition above that provides that at least 75% of the funds described in first condition above will be earmarked for distribution to the Debtors' prepetition unsecured creditors holding allowed claims under a Chapter 11 plan. If the $250,000,000 threshold is met by Nov. 1, 2012, as provided in the first condition described above, then the escrowed "new money" equity cash on deposit as of Nov. 1, 2012 will not be released from escrow without prior Committee consent or Court approval; provided, however, that if the "new money" plan is abandoned by the Debtors because (i) the $250,000,000 threshold is not met; (ii) additional funds are deposited after Nov. 1, 2012, but ultimately not enough money is raised in total to make the "new money" plan confirmable; or (iii) for any other reason, then the "new money" cash (and/or letters of credit in favor of the Debtors) on deposit may be released from escrow by agreement of the Debtors and the depositor and without the consent of the Committee. If the "new money" plan has not been abandoned, and provided that the cash or letters of credit on deposit in escrow total at least $250,000,000, the consent of the Committee is not required to cause the release of any amount in excess of $250,000,000. The Debtors will immediately engage in good faith discussions with the Committee and other parties in interest regarding a plan that provides for an orderly wind-down of their businesses and assets, in addition to a new money plan based on a new equity infusion. As reported in the Oct. 10, 2012 edition of the TCR, Arcapita Bank B.S.C.(c) defended its request for more time to file a Chapter 11 plan, saying a group of lenders mischaracterized the case as less complex than it is and promoted the "irrational conclusion" that the Debtor's plan is almost ready. The Islamic bank filed a reply to the ad hoc group's objection to its second bid for an extension of the exclusivity periods for filing a reorganization plan and soliciting acceptances for it. 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. ARCAPITA BANK: Hearing on SP Financing Adjourned to Oct. 19 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has further adjourned the hearing on Arcapita Bank, B.S.C.(c)'s motion to enter into a Financing Commitment Letter with Silver Point Finance, LLC, and to incur the related fees, expenses and indemnities, scheduled for Oct. 12, 2012, at 11:00 a.m., to Oct. 19, 2012 at 10:00 a.m. As reported in the Oct. 2, 2012 edition of the TCR, Arcapita Bank has arranged up to $150 million of Shari'ah compliant financing from Silver Point Finance LLC. The Debtors intend to pay Silver Point a $2.25 million commitment fee. The fee won't be paid until Silver Point waives the right to perform further investigation and secures approval from its own credit committee. Arcapita has the right to accept an unsolicited financing proposal from another lender. Silver Point would be paid a $1.25 million breakup fee if a deal with another lender is reached. The proposed Silver Point loan is to bear interest at 10.5 percentage points higher than the London interbank offered rate. The Official Committee of Unsecured Creditors and shareholder Standard Chartered Bank have conveyed objections to the proposed financing. The Committee points out that the commitment papers unfairly impose significant obligations on the Debtors while Silver Point remains uncommitted to providing financing. Arcapita Bank responded to the objections. "In a perfect world where the Debtors dictated all terms, the Debtors would condition allowance of Silver Point's fees and expenses on the satisfaction of Silver Point's diligence. But to date, no party - absolutely none - has committed to make such funds available on any such better or more relaxed terms, or even committed themselves to do the detailed diligence necessary to get to definitive documentation," according to Arcapita. "The Debtors believe, in their business judgment, that the Commitment Letter, although far from perfect, evidences a commitment on the part of Silver Point to extend arm's length financing to the Debtors on terms that are within the range of reasonableness. Indeed, it remains the best available commitment towards a debtor in possession financing." 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. ASPEN GROUP: Sophrosyne Capital Discloses 9.6% Equity Stake ----------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Sophrosyne Capital, LLC, disclosed that, as of Oct. 11, 2012, it beneficially owns 3,571,428 shares of common stock and warrants (exercisable into common stock) of Aspen Group. Inc., representing 9.67% of the shares outstanding. A copy of the filing is available at http://is.gd/NxOqaJ About Aspen Group Denver, Colo.-based Aspen Group, Inc., was founded in Colorado in 1987 as the International School of Information Management. On Sept. 30, 2004, it was acquired by Higher Education Management Group, Inc., and changed its name to Aspen University Inc. On May 13, 2011, the Company formed in Colorado a subsidiary, Aspen University Marketing, LLC, which is currently inactive. On March 13, 2012, the Company was recapitalized in a reverse merger. Aspen's mission is to become an institution of choice for adult learners by offering cost-effective, comprehensive, and relevant online education. Approximately 88% of the Company's degree- seeking students (as of June 30, 2012) were enrolled in graduate degree programs (Master or Doctorate degree program). Since 1993, the Company has been nationally accredited by the Distance Education and Training Council, a national accrediting agency recognized by the U.S. Department of Education. The Company's balance sheet at June 30, 2012, showed $3.7 million in total assets, $5.6 million in total liabilities, and a stockholders' deficit of $1.9 million. The Company had a net loss allocable to common stockholders of $3.5 million and negative cash flows from operations of $2.0 million for the six months ended June 30, 2012. "The Company's ability to continue as a going concern is contingent on securing additional debt or equity financing from outside investors. These matters raise substantial doubt about the Company's ability to continue as a going concern." ATC VENTURE: Receives NYSE MKT Non-Compliance Notice ---------------------------------------------------- ATC Venture Group Inc. disclosed that on Oct. 5, 2012, the Company received notice from the NYSE MKT indicating that the Company no longer complies with the Exchange's continued listing standards because the aggregate market value of its public float was less than $1.0 million for 90 consecutive days as set forth in Section 1003(b)(i)(C) of the Exchange's Company Guide, because it has yet to file its Form 10-Q for the quarter ended June 30, 2012 as set forth in Sections 134 and 1101 of the Company Guide, and because of the low price of the Company's common stock as set forth in Section 1003(f)(v) of the Company Guide. As a result, the Company's securities are subject to being delisted from the Exchange. The Company intends to appeal this determination and request a hearing before a committee of the Exchange. There can be no assurance that the Company's request for continued listing will be granted. Minnetonka, Minn.-based ATC Venture Group Inc. has one distinct operating segment, Simonsen Iron Works Inc., which is engaged in the design, manufacture and assembly of an array of parts for original equipment manufacturers (OEMs) and other customers. The Company has offices in Minnetonka, Minn. and Spencer, Iowa, and has approximately 160,000 square feet of modern manufacturing facilities in its owned building in Spencer, Iowa. ATLANTIS OF JACKSONVILLE: Court Dismisses Chapter 11 Case --------------------------------------------------------- U.S. Bankruptcy Judge Paul M. Glenn entered an order dismissing The Atlantis of Jacksonville Beach, Inc.'s Chapter 11 case, effective Sept. 28, 2012. The Debtor will pay all outstanding United States Trustee fees within 30 days of the order. About Atlantis of Jacksonville Beach The Atlantis of Jacksonville Beach, Inc., based in Atlantic Beach, Florida, filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 12-01553) on March 9, 2012. Judge Paul M. Glenn oversees the case. The Law Offices of Mickler & Mickler serves as the Debtor's counsel. Atlantis of Jacksonville Beach scheduled $10,000,000 in assets and $6,592,590 in liabilities. The petition was signed by Chris Hionides, president. Affiliate Shoppes of Lakeside Inc. filed for Chapter 11 (Bankr. M.D. Fla. Case. No. 10-05199) on June 15, 2010. Neptune Beach, Florida-based Shoppes of Lakeside holds title to and generates income from residential and commercial buildings and unimproved land in Duval County. The Debtor owns 45 commercial properties and 10 residential properties. Attorneys at the Law Offices of Mickler & Mickler, in Jacksonville, Fla., represents the Debtor as counsel. The Company disclosed $39,894,050 in assets and $37,748,101 in liabilities. BALDWIN PARK: Fitch Affirms 'BB' Rating on Tax Allocation Bonds --------------------------------------------------------------- Fitch Ratings has affirmed the following Baldwin Park Public Financing Authority, CA's sales tax and tax allocation bonds (TABs): -- $4.1 million sales tax and tax allocation refunding bonds, series 2003 at 'BB'. The TABs are removed from Rating Watch Negative. The Rating Outlook is Negative. SECURITY The series 2003 bonds are limited obligations of the authority, payable from a first lien on sales tax and incremental property tax revenues derived from the Puente Merced project area and surplus tax increment revenues of the San Gabriel River, Delta and Sierra Vista project areas. These three project areas were merged with the Puente Merced project area in April 2000 by ordinance of the City of Baldwin Park (the city). The bonds are additionally secured by a cash-funded debt service reserve fund (DSRF) equal to maximum annual debt service (MADS). KEY RATING DRIVERS REVENUE DISRUPTION AND DSRF DRAW: Although payment of series 2003 debt service in August 2012 did not require a DSRF draw, in August 2012 the Successor Agency to the Baldwin Park RDA (SA) withdrew funds from DSRFs to pay a portion of debt service requirements on two of its other three outstanding series of TABs. The draw was required due to a combination of much lower than expected tax increment distributions in June 2012 from Los Angeles County (county) under AB 1X 26 and delayed distribution of $600,000 in housing set-aside funds that was subsequently reversed. CONTINUING REVENUE UNCERTAINTY: One reserve draw of $401,998 has been fully replenished (San Gabriel) and one reserve draw partially replenished ($157,000 of $451,861) (Central Business District or CBD) but revenue vulnerability remains for 2013 debt service requirements. Payment discrepancies in 2012 coupled with approval requirements for certain requested payments in 2013 create uncertainties as to revenues available for 2013 debt service requirements and if total payments received are not sufficient, could again result in DSRF draws. INCREASED RELIANCE ON SALES TAX: Credit quality is further compromised by the increased dependence upon volatile sales taxes to pay series 2003 debt service as a result of the shortfall in tax increment distributions. Sales taxes generated within a small commercial development have fluctuated, falling 40% between fiscals 2007 and 2008. Sales tax revenues for 2013 are conservatively forecasted at $420,000. Collections have failed to fully cover maximum annual debt service (MADS) in recent years and are not expected to cover debt service of approximately $532,000 in 2013. ADEQUATE HISTORICAL DEBT SERVICE COVERAGE: Coverage of series 2003 annual debt service from pledged Puente Merced tax project area increment and sales taxes and surplus revenues from the merged project areas has averaged an adequate 1.6x over the past two years (2010 and 2011). DECLINING TAXABLE VALUES: Taxable values within the merged project area (Puente Merced, San Gabriel River, Delta and Sierra Vista) have fallen by 5.6% over the past two years. A recent increase in appeals activity may signal further assessed value (AV) reductions, although expected AV losses would total a moderate $3.7 million or 1% of incremental assessed value (IV) based on projections. TAXPAYER CONCENTRATION RISK: Moderately high concentration exists within the merged project area, with the top 10 taxpayers representing 26% of IV. Top taxpayers include Wal-Mart ('AA' with a Stable Outlook by Fitch), Home Depot ('A-', Stable Outlook), and several multi-tenant offices and retail buildings. INCREMENTAL REVENUE STABLITY: The merged project area is mature with a high IV ($614.2 million) relative to the base year ($88 million). As a result, tax increment revenues respond less dramatically to changes in total AV. BELOW AVERAGE SOCIOECONOMIC PROFILE: Baldwin Park is a lower income community, exhibiting a high incidence of individual poverty, and high levels of unemployment. WHAT COULD TRIGGER A RATING ACTION ADDITIONAL REVENUE SHORTFALLS: The SA projects having sufficient funds from sales tax revenues both on hand and expected over the course of the year to fully cover the series 2003 debt service payments in February and August 2013. Continuing overall revenue uncertainties coupled with approval requirements which result in shortfalls from projections and further draws on the DSRF to pay debt service on any SA required debt service will put downward pressure on the rating. CREDIT PROFILE SUCCESSOR AGENCY REQUIRES DSRF DRAWDOWN; REVENUE UNCERTAINTIES CONTINUE The Baldwin Park Successor Agency (SA), the designated successor agency to the RDA, withdrew a total of $853,859 from the DSRF to cover debt service due on August 1 for two of its four outstanding TABs. The Fitch-rated series 2003 TABs, however, were paid from pledged sales taxes already received from the Puente Merced project area. The RDA historically borrowed internally from either RDA reserves or the city to cover timing mismatches between tax revenue receipts and debt service payments. The internal loans were repaid from subsequent tax increment revenues. However, lack of available RDA cash reserves and lower than expected tax distributions have significantly increased the SA's borrowing needs. Cash in the combined DSRFs totalled $2.9 million prior to the draws and was more than sufficient to fund approximately $1.4 million of August and September debt service requirements ($1.8 million total less $430,000 attributable to the series 2003 bonds). The CBD reserve funds are not available for the merged project area debt service. City officials drew on the DSRF rather than lend funds to the SA for upcoming debt service due to required approvals for such a loan and uncertainty that future tax distributions from the county would be sufficient to repay the loan. The SA has included a request for reserve draw reimbursement in its January 1 to June 30, 2013 Recognized Payment Schedule (ROPS) request. $558,998 of the total DSRF draws has been replenished thus far following approval of the use of set- aside funds and a deferral amount. County officials are projecting that the SA will receive $1.9 million of net tax increment allocations for the January 2013 distribution and approximately $800,000 for the June 2013 distribution. The SA projects annual sales tax revenues at a conservative $420,000. The SA has also requested approval for reimbursement of approximately $779,000 housing funds for use in paying 2013 debt service requirements. The total amount of projected funds for 2013 would be sufficient to replenish the DSRF draw and, with expected sales tax collections, meet all requirements for 2013 debt service. Fitch believes the projections may be overoptimistic given recent payment trends and further approval requirements. LOWER THAN EXPECTED TAX PAYMENTS FROM THE COUNTY The July 2012 downgrade to 'BB' reflected the SA's extensive use of DSRFs to fund debt service costs as a result of much lower than expected June 1st tax-increment distribution received by the SA from the county and a housing set-aside amount for $600,000 which subsequently reversed. Fitch notes as a key credit concern the fact that officials from the county and the SA have not mutually established the reasons for the discrepancy which calls into question the adequate and continuous flow of sufficient revenue to cover obligations. The state department of finance approved the SA's ROPS for both the January through June and July through December 2012 periods. The amount approved for the latter period was approximately $2.6 million. The SA's $1.7 million June 1st distribution from the Redevelopment Property Tax Trust Fund (RPTTF) represented tax increment collected within four project areas from February to May 2012. The distribution was approximately 27% below the $2.3 million available to the RDA for the same period in 2011 and below the $2.6 million approved on the ROPS. Based on 2012 taxable values among the four merged project areas, fiscal 2013 tax increment revenues should be about 5% lower than the prior year level. After payment of senior lien pass-through payments, administration fees and housing set-aside allocations, about $790,000 was actually distributed to the SA. This resulted in the required DSRF draw. PLEDGED SALES TAX PROVIDES ADDITIONAL BUT VOLATILE SECURITY The shortfall in tax-increment distributions has increased reliance upon sales taxes to meet series 2003 debt service requirements; the only outstanding RDA TABs additionally secured by a sales tax derived the pledged project area. The use of pledged sales taxes to pay RDA debt service is not subject to semi-annual state approval. Sales tax collections are derived from the Puente Merced project area; a small commercial district. Collections have proven volatile, declining by 40% between fiscals 2007 and 2008 although collections have since been more stable, increasing by about 8% in fiscal 2011. The below investment-grade rating reflects the resulting increased dependence upon volatile sales taxes to pay series 2003 bond debt service. PROJECT AREA PROFILE The Puente Merced project area consists of 16 acres adjacent to the San Bernardino I-10 Freeway. Development includes the Baldwin Park Towne Shopping Center with Home Depot as its main anchor, and a Marriott Courtyard Hotel. Fiscal 2012 project area AV totalled $39 million, down 0.4% from the prior year. The tax base is highly concentrated with the top 10 taxpayers accounting for 98% of AV. Five of the city's six project areas were merged in 2000 including the Puente Merced project area. The merged project area totals 788 non-contiguous acres in the city's downtown area, largely comprising commercial and industrial properties with a small residential component. The merged project area IV for fiscal 2012 totals $614.2 million or 7.0x the base year AV of $88 million. The ratio of incremental AV over the base year AV reduces volatility in incremental tax revenue to changes in the AV of the project area. The merged project area AV has declined by a total of 5.6% over fiscals 2011 and 2012, preceded by two years of robust growth. The merged project area tax base is somewhat concentrated although much more diverse than Puente Merced. The top 10 taxpayers in the merged area account for 23% of AV and 26% of IV. Wal-Mart and Home Depot are the two largest taxpayers at 4.3% and 2.7% of AV, respectively. Pending appeals within the merged project area increased significantly in both number and value in fiscal 2011, particularly in the San Gabriel River and Sierra Vista project areas. The AV of pending appeals more than doubled from $54 million (8.6% of IV) in fiscal 2010 to $116 million in fiscal 2011 (16% of AV) while the average success rate jumped from 14% to 22%. The heightened level of appeals signals further reductions in AV although based on average success rates, projections indicate the tax base would lose about $3.7 million or a manageable 1% of IV. BELOW-AVERAGE SOCIOECONOMIC PROFILE Fitch considers the city's economic and demographic profile weak. A very young population contributes to per capita income levels that equal 52%-56% of the state and U.S. average. Median household income approaches the national average but is only 84% of the state. The city's individual poverty rate is also high. The educational achievement of the local labor force is well below the state and nation, contributing to high levels of unemployment. Unemployment remains high at 14.8% in July 2012 compared to 10.9% in California and 8.3% nationally, although lower than the prior year's July unemployment rate of 16.4%. Baldwin Park is located in western Los Angeles County, approximately 20 miles east of downtown Los Angeles. The city encompasses 6.7 square miles and is near fully built-out. The city had previously experienced strong growth due to infill development, but the city's population trends were static between 2000 and 2010. The city is served by I-10 (the San Bernardino Freeway), I-605 (the San Gabriel River Freeway), and I-210 (the Foothill Freeway) making the greater Los Angeles metro area easily accessible for local residents. BEAZER HOMES: Effects a 1-for-5 Reverse Stock Split --------------------------------------------------- Beazer Homes USA, Inc., announced the effectiveness of a 1-for-5 reverse split of its common stock. Shares of Beazer Homes common stock will begin trading on a split-adjusted basis on the New York Stock Exchange under the Company's existing symbol "BZH" upon the opening of the NYSE on Oct. 12, 2012. Beazer Homes' stockholders approved the reverse stock split at a special meeting of stockholders held on Oct. 11, 2012. As a result, every five shares of Beazer Homes common stock outstanding have been combined into one share of common stock, reducing the number of shares of Beazer Homes common stock outstanding from approximately 123 million to approximately 24.6 million. In addition, the number of authorized shares will be reduced from 180 million shares to 100 million shares. After discussion with several institutional stockholders, the Company's Board of Directors has determined that it will propose and recommend at its upcoming 2013 annual meeting a further decrease in the number of shares of common stock authorized for issuance from 100 million to 63 million. No fractional shares will be issued in connection with the reverse stock split. Instead, Beazer Homes' transfer agent will aggregate all fractional shares that otherwise would have been issued as a result of the reverse stock split and those shares will be sold into the market. Stockholders who would have held a fractional share of Beazer Homes common stock will receive a cash payment from the net proceeds of that sale in lieu of that fractional share. Upon the opening of the NYSE on Oct. 12, 2012, shares of Beazer Homes common stock will trade under a new CUSIP number (07556Q 881) and a new ISIN (US07556Q8814). About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company's balance sheet at June 30, 2012, showed $1.82 billion in total assets, $1.64 billion in total liabilities, and $179.07 million in total stockholders' equity. * * * Beazer carries (i) a 'B-' issuer credit rating, with "negative" outlook, from Standard & Poor's, (ii) 'Caa2' probability of default and corporate family ratings from Moody's, and (iii) 'B-' issuer default rating from Fitch Ratings. Moody's said in July 2012 that the 'Caa2' CFR reflects Moody's expectation that Beazer's operating and financial performance, while improving, will remain weak through fiscal 2013. Moody's expects that Beazer's cash flow generation will continue to be weak in fiscal 2012 and 2013. "Our current rating outlook on Beazer is negative. We would consider a downgrade if the company's EBITDA growth fails to meet our expectations or if the downturn in the housing market lingers longer than we expect and unit volume remains depressed," S&P said in July 2012. As reported by the TCR on Sept. 10, 2012, Fitch Ratings has upgraded the Issuer Default Rating (IDR) of Beazer Homes USA, Inc. (NYSE: BZH) to 'B-' from 'CCC'. The upgrade and the Stable Outlook reflect Beazer's operating performance so far this year, its robust cash position, and moderately better prospects for the housing sector during the remainder of this year and in 2013. The rating is also supported by the company's execution of its business model, land policies, and geographic diversity. BERNARD L. MADOFF: NY AG Says $415-Mil. Deal Not Madoff's Property ------------------------------------------------------------------ Maria Chutchian at Bankruptcy Law360 reports that New York's attorney general on Thursday insisted that the funds former Bernard L. Madoff hedge fund manager J. Ezra Merkin will use to pay a $415 million settlement with victims do not belong to the Madoff estate, despite its trustee's arguments to the contrary. Eric T. Schneiderman again urged U.S. District Judge Jed S. Rakoff to remove from bankruptcy court Madoff trustee Irving Picard's adversary suit that aims to block the Mervin deal, according to Bankruptcy Law360. 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. BERJAC OF OREGON: Bullivant Houser OK'd as Trustee's Counsel ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Oregon authorized Thomas A. Huntsberger, Chapter 11 trustee in the bankruptcy estate of Berjac of Oregon to employ Thomas A. Geber and the law firm of Bullivant Houser Bailey, P.C.O, as his general counsel. Mr. Gerber will represent the trustee at $405 per hour, while the attorneys' hourly rates range from $250 to $405. To the best of the trustee's knowledge, the firm does not hold any interest adverse to the bankruptcy estate. About Berjac of Oregon Berjac of Oregon filed a Chapter 11 petition (Bankr. D. Ore. Case No. 12-63884) in Eugene, Oregon, on Aug. 31, 2012. Its affiliate, Berjac of Portland, Oregon, also sought Chapter 11 bankruptcy protection. Berjac -- http://www.berjac.com/-- has provided insurance premium financing to insureds in the Western United States since 1963. Michael S. Holcomb, owns the Berjac partnerships with his brother Gary. According to The Oregonian, on the date of the bankruptcy filing, state regulators fined Berjac $900,000, saying that 275 investors might have lost up to $35 million making risky loans to the Holcombs' firms. The Oregonian said state officials moved quickly to issue a press release before the Labor Day weekend to warn other investors of the firm's alleged illegal scheme and apparent financial woes. In cease-and-desist orders issued late August 2012, the Oregon Division of Finance and Corporate Securities accused Berjac and the Holcomb brothers of violating Oregon securities laws. The orders allege the Holcombs sold unsecured notes to investors without registering them, getting a license or offering investors a detailed prospectus. Judge Frank R. Alley, III, presides over the case. The Law Offices of Keith Y. Boyd, Esq., serves as the Debtors' counsel. Berjac of Oregon disclosed $5,412,444 in assets and $44,761,597 in liabilities as of the Chapter 11 filing. Thomas A. Huntsberger is appointed as the Chapter 11 trustee. Thomas A. Geber and the law firm of Bullivant Houser Bailey, P.C.O, serve as the trustee's general counsel. The seven-member Official Committee of Unsecured Creditors is represented by David B. Mills. BERJAC OF OREGON: David B. Mills Approved as Committee Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon authorized the Official Committee of Unsecured Creditors in the Chapter 11 case of Berjac of Oregon to retain David B. Mills as its counsel at the hourly rate of $250. To the best of the Committee's knowledge, Mr. Mills is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Mills can be reached at: David B. Mills 115 W. 8th Ave., Suite 390 Eugene, OR 97401 Tel: (541) 484-1216 Fax: (541) 484-5326 E-mail: davidbmills@cs.com About Berjac of Oregon Berjac of Oregon filed a bare-bones Chapter 11 petition (Bankr. D. Ore. Case No. 12-63884) in Eugene on Aug. 31, 2012. Its affiliate, Berjac of Portland, Oregon, also sought Chapter 11 bankruptcy protection. Berjac -- http://www.berjac.com/-- has provided insurance premium financing to insureds in the Western United States since 1963. Michael S. Holcomb, owns the Berjac partnerships with his brother Gary. According to The Oregonian, on the date of the bankruptcy filing, state regulators fined Berjac $900,000, saying that 275 investors might have lost up to $35 million making risky loans to the Holcombs' firms. The Oregonian said state officials moved quickly to issue a press release before the Labor Day weekend to warn other investors of the firm's alleged illegal scheme and apparent financial woes. In cease-and-desist orders issued late August 2012, the Oregon Division of Finance and Corporate Securities accused Berjac and the Holcomb brothers of violating Oregon securities laws. The orders allege the Holcombs sold unsecured notes to investors without registering them, getting a license or offering investors a detailed prospectus. Judge Frank R. Alley, III, presides over the case. The Law Offices of Keith Y. Boyd, Esq., serves as the Debtors' counsel. Berjac of Oregon disclosed $5,412,444 in assets and $44,761,597 in liabilities as of the Chapter 11 filing. Thomas A. Huntsberger is appointed as the Chapter 11 trustee. Thomas A. Geber and the law firm of Bullivant Houser Bailey, P.C.O, serves as the trustee's general counsel. The seven-member Official Committee of Unsecured Creditors is represented by David B. Mills. BERJAC OF OREGON: Files Schedules of Assets and Liabilities ----------------------------------------------------------- Berjac of Oregon filed with the U.S. Bankruptcy Court for the District of Oregon its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $3,301,570 B. Personal Property $2,110,874 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $1,612,179 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $43,149,418 ----------- ----------- TOTAL $5,412,444 $44,761,597 About Berjac of Oregon Berjac of Oregon filed a bare-bones Chapter 11 petition (Bankr. D. Ore. Case No. 12-63884) in Eugene on Aug. 31, 2012. Its affiliate, Berjac of Portland, Oregon, also sought Chapter 11 bankruptcy protection. Berjac -- http://www.berjac.com/-- has provided insurance premium financing to insureds in the Western United States since 1963. Michael S. Holcomb, owns the Berjac partnerships with his brother Gary. According to The Oregonian, on the date of the bankruptcy filing, state regulators fined Berjac $900,000, saying that 275 investors might have lost up to $35 million making risky loans to the Holcombs' firms. The Oregonian said state officials moved quickly to issue a press release before the Labor Day weekend to warn other investors of the firm's alleged illegal scheme and apparent financial woes. In cease-and-desist orders issued late August 2012, the Oregon Division of Finance and Corporate Securities accused Berjac and the Holcomb brothers of violating Oregon securities laws. The orders allege the Holcombs sold unsecured notes to investors without registering them, getting a license or offering investors a detailed prospectus. Judge Frank R. Alley, III, presides over the case. The Law Offices of Keith Y. Boyd, Esq., serves as the Debtors' counsel. Berjac of Oregon disclosed $5,412,444 in assets and $44,761,597 in liabilities as of the Chapter 11 filing. Thomas A. Huntsberger is appointed as the Chapter 11 trustee. Thomas A. Geber and the law firm of Bullivant Houser Bailey, P.C.O, serves as the trustee's general counsel. The seven-member Official Committee of Unsecured Creditors is represented by David B. Mills. BERJAC OF OREGON: Thomas A. Huntsberger Named Ch. 11 Trustee ------------------------------------------------------------ Robert D. Miller Jr., U.S. Trustee for Region 18 appointed Thomas A. Huntsberger 870 W. Centennial Blvd. Springfield, OR 97477 as Chapter 11 Trustee in the bankruptcy case of Berjac of Oregon. On Sept. 18, the Hon. Thomas M. Renn directed the U.S. Trustee to appoint a Chapter 11 trustee. The U.S. Trustee consulted with these parties-in-interest regarding the appointment of the trustee: (i) Keith Boyd and Wilson Muhlheim, counsel for Debtor; (ii) David B. Mills, counsel for the Unsecured Creditors Committee; (iii) Loren Scott, counsel for Century Bank; (iv) Dan Rosenhouse, Sr. Assistant Attorney General for the State of Oregon; and (v) Scott Palmer, attorney for the Broughton Living Trust. The trustee's bond will be set at the amount of $500,000. The bond will be filed with the Clerk of the U.S. Bankruptcy Court for the District of Oregon. To the best of the U.S. Trustee's knowledge, Mr. Huntsberger doesn't hold or represent any interest adverse to the estate. About Berjac of Oregon Berjac of Oregon filed a bare-bones Chapter 11 petition (Bankr. D. Ore. Case No. 12-63884) in Eugene on Aug. 31, 2012. Its affiliate, Berjac of Portland, Oregon, also sought Chapter 11 bankruptcy protection. Berjac -- http://www.berjac.com/-- has provided insurance premium financing to insureds in the Western United States since 1963. Michael S. Holcomb, owns the Berjac partnerships with his brother Gary. According to The Oregonian, on the date of the bankruptcy filing, state regulators fined Berjac $900,000, saying that 275 investors might have lost up to $35 million making risky loans to the Holcombs' firms. The Oregonian said state officials moved quickly to issue a press release before the Labor Day weekend to warn other investors of the firm's alleged illegal scheme and apparent financial woes. In cease-and-desist orders issued late August 2012, the Oregon Division of Finance and Corporate Securities accused Berjac and the Holcomb brothers of violating Oregon securities laws. The orders allege the Holcombs sold unsecured notes to investors without registering them, getting a license or offering investors a detailed prospectus. Judge Frank R. Alley, III, presides over the case. The Law Offices of Keith Y. Boyd, Esq., serves as the Debtors' counsel. Berjac of Oregon disclosed $5,412,444 in assets and $44,761,597 in liabilities as of the Chapter 11 filing. Thomas A. Huntsberger is appointed as the Chapter 11 trustee. Thomas A. Geber and the law firm of Bullivant Houser Bailey, P.C.O, serves as the trustee's general counsel. The seven-member Official Committee of Unsecured Creditors is represented by David B. Mills. BERJAC OF OREGON: Trustee Taps Krista Lacis as Operating Analyst ---------------------------------------------------------------- Thomas A. Huntsberger, Chapter 11 Trustee in for the bankruptcy estate of Berjac of Oregon asks the U.S. Bankruptcy Court for the District of Oregon for permission to employ Krista Lacis, CPA as monthly operating analyst. According to the trustee, Ms. Lacis' standard hourly rate is $100 and she has not received any retainer from the Debtor. To the best of the trustee's knowledge, Ms. Lacis does not hold or represent interest adverse to the estate. About Berjac of Oregon Berjac of Oregon filed a bare-bones Chapter 11 petition (Bankr. D. Ore. Case No. 12-63884) in Eugene, Oregon, on Aug. 31, 2012. Its affiliate, Berjac of Portland, Oregon, also sought Chapter 11 bankruptcy protection. Berjac -- http://www.berjac.com/-- has provided insurance premium financing to insureds in the Western United States since 1963. Michael S. Holcomb, owns the Berjac partnerships with his brother Gary. According to The Oregonian, on the date of the bankruptcy filing, state regulators fined Berjac $900,000, saying that 275 investors might have lost up to $35 million making risky loans to the Holcombs' firms. The Oregonian said state officials moved quickly to issue a press release before the Labor Day weekend to warn other investors of the firm's alleged illegal scheme and apparent financial woes. In cease-and-desist orders issued late August 2012, the Oregon Division of Finance and Corporate Securities accused Berjac and the Holcomb brothers of violating Oregon securities laws. The orders allege the Holcombs sold unsecured notes to investors without registering them, getting a license or offering investors a detailed prospectus. Judge Frank R. Alley, III, presides over the case. The Law Offices of Keith Y. Boyd, Esq., serves as the Debtors' counsel. Berjac of Oregon disclosed $5,412,444 in assets and $44,761,597 in liabilities as of the Chapter 11 filing. Thomas A. Huntsberger is appointed as the Chapter 11 trustee. Thomas A. Geber and the law firm of Bullivant Houser Bailey, P.C.O, serves as the trustee's general counsel. The seven-member Official Committee of Unsecured Creditors is represented by David B. Mills. BERJAC OF OREGON: Trustee Taps Luvaas for Advice on Plan -------------------------------------------------------- Thomas A. Huntsberger, Chapter 11 trustee in the bankruptcy estate of Berjac of Oregon, asks the U.S. Bankruptcy Court for the District of Oregon for permission to employ Luvaas Cobb and Wilson C. Muhlheim as special counsel for representation on the limited matters. Prior to the appointment of the trustee, Mr. Muhlheim and the Luvaas firm had been engaged to preserve the Debtor's assets. The firm will: -- investigate of the real estate loan portfolios and correct documentation deficiencies related thereto; and -- initiate litigation, as directed by the trustee as necessary to protect collateral and loan assets. In a separate filing, the trustee also seeks permission for Luvaas and Mr. Muhlheim to render, among other things: a. analysis, recovery, and disposition of assets; b. assistance with DIP Financing; c. advice regarding business operations during the reorganization period including cash collateral issues; and d. advice on structuring and development of a plan of reorganization. On Aug. 31, 2012, Luvaas was paid $11,500 from the $60,000 retainer. The standard hourly rates of the Luvaas' personnel are: Wilson C. Muhlheim $300 Troy Slonecker $150 Partners $250 Associates $150 Paralegals $75 To the best of the trustee's knowledge, neither Luvaas nor Mr. Muhlheim hold or represent any interest adverse to the estate. About Berjac of Oregon Berjac of Oregon filed a bare-bones Chapter 11 petition (Bankr. D. Ore. Case No. 12-63884) in Eugene on Aug. 31, 2012. Its affiliate, Berjac of Portland, Oregon, also sought Chapter 11 bankruptcy protection. Berjac -- http://www.berjac.com/-- has provided insurance premium financing to insureds in the Western United States since 1963. Michael S. Holcomb, owns the Berjac partnerships with his brother Gary. According to The Oregonian, on the date of the bankruptcy filing, state regulators fined Berjac $900,000, saying that 275 investors might have lost up to $35 million making risky loans to the Holcombs' firms. The Oregonian said state officials moved quickly to issue a press release before the Labor Day weekend to warn other investors of the firm's alleged illegal scheme and apparent financial woes. In cease-and-desist orders issued late August 2012, the Oregon Division of Finance and Corporate Securities accused Berjac and the Holcomb brothers of violating Oregon securities laws. The orders allege the Holcombs sold unsecured notes to investors without registering them, getting a license or offering investors a detailed prospectus. Judge Frank R. Alley, III, presides over the case. The Law Offices of Keith Y. Boyd, Esq., serves as the Debtors' counsel. Berjac of Oregon disclosed $5,412,444 in assets and $44,761,597 in liabilities as of the Chapter 11 filing. Thomas A. Huntsberger is appointed as the Chapter 11 trustee. Thomas A. Geber and the law firm of Bullivant Houser Bailey, P.C.O, serves as the trustee's general counsel. The seven-member Official Committee of Unsecured Creditors is represented by David B. Mills. BERJAC OF OREGON: U.S. Trustee Appoints 7-Member Creditors Panel ------------------------------------------------------------------ Robert D. Miller Jr., U.S. Trustee for Region 18, appointed these unsecured creditors to serve in the Official Committee of Unsecured Creditors in the Chapter 11 case of Berjac of Oregon. The Committee comprises of: 1. Charlene Cox, chairperson c/o John Cox 2883 Martinque Eugene, OR 97408 Tel: (541) 344-8139 E-mail: jcox@eugene-law.com 2. Broughton Living Trust c/o Eric R. Thoreson 686 Quail Lane Roseburg, OR 97471 Tel: (541) 817-6633 Fax: (541) 672-7998 E-mail: ethoreson@mcsi.net 3. George S. Karotko 756 McKenzie Crest Drive Springfield, OR 97477 Tel: (541) 736-1613 Fax: (541) 736-1613 E-mail: gandykar@comcast.net 4. Timothy A. Hutchinson 550 SW Viewmont Dr. Portland, OR 97225 Tel: (415) 457-0459 Fax: (415) 457-0459 E-mail: thutch@yahoo.com 5. Theodore & Loretta Glass Joint Trust c/o James P. Mischkot, Jr. P.O. Box 40205 Eugene, OR 97404 Tel: (541) 729-4116 Fax: (541) 688-5982 E-mail: jp@glasstreecare.com 6. Wildish Standard Paving Co. c/o Steven J. Wildish P.O. Box 40310 Eugene, OR 97404 Tel: (541) 485-1700 Fax: (541) 683-7722 E-mail: steve@wildish.com 7. George Rex 1650 NW Murray Road Portland, OR 97229 Tel: (503) 319-2994 E-mail: gmrex@msn.com About Berjac of Oregon Berjac of Oregon filed a bare-bones Chapter 11 petition (Bankr. D. Ore. Case No. 12-63884) in Eugene on Aug. 31, 2012. Its affiliate, Berjac of Portland, Oregon, also sought Chapter 11 bankruptcy protection. Berjac -- http://www.berjac.com/-- has provided insurance premium financing to insureds in the Western United States since 1963. Michael S. Holcomb, owns the Berjac partnerships with his brother Gary. According to The Oregonian, on the date of the bankruptcy filing, state regulators fined Berjac $900,000, saying that 275 investors might have lost up to $35 million making risky loans to the Holcombs' firms. The Oregonian said state officials moved quickly to issue a press release before the Labor Day weekend to warn other investors of the firm's alleged illegal scheme and apparent financial woes. In cease-and-desist orders issued late August 2012, the Oregon Division of Finance and Corporate Securities accused Berjac and the Holcomb brothers of violating Oregon securities laws. The orders allege the Holcombs sold unsecured notes to investors without registering them, getting a license or offering investors a detailed prospectus. Judge Frank R. Alley, III, presides over the case. The Law Offices of Keith Y. Boyd, Esq., serves as the Debtors' counsel. Berjac of Oregon disclosed $5,412,444 in assets and $44,761,597 in liabilities as of the Chapter 11 filing. Thomas A. Huntsberger is appointed as the Chapter 11 trustee. Thomas A. Geber and the law firm of Bullivant Houser Bailey, P.C.O, serves as the trustee's general counsel. The seven-member Official Committee of Unsecured Creditors is represented by David B. Mills. BIG SANDY: Wells Fargo Balks at Proposed Asset Sale --------------------------------------------------- Dow Jones Newswires reports that Wells Fargo & Co., representing a group of investors, objected to the proposed sale of Mile High Banks, saying the $5.5 million offer would leave the investors with "virtually nothing." Big Sandy Holding Co., the bank holding company, filed for Chapter 11 bankruptcy in September with a plan to sell the bank, saying the bank would be taken over by the Federal Deposit Insurance Corp. if the sale were unsuccessful. Strategic Growth Bancorp Inc. has offered $5.5 million for the 13 locations and pledged to put $9 million toward recapitalizing the bank. According to the report, in documents filed with the U.S. Bankruptcy Court in Denver, Wells Fargo said the investors it represents are the only significant creditors in the case and are owed $44 million. Once Mile High's adviser is paid $3 million and $1 million is used as bankruptcy financing, nothing will be left for the investors, it said. The report notes Big Sandy said a takeover by the FDIC "does not appear to be a short-term likelihood." "Instead the debtor appears to be using the FDIC as a bogeyman to avoid scrutiny of the transaction and pressure creditors and this court into an inappropriate sale." The report relates Big Sandy said when it filed for bankruptcy that it was searching for better and higher offers but that Strategic Growth's bid is the result of a three-year search. The report adds, in 2011, FDIC examiners determined the bank was "undercapitalized." So bank officials submitted a plan that outlined ways to recapitalize that included merger and sale opportunities. According to the report, bank executives tried to fix the poor performance, but by fall, the bank's condition had worsened, causing it to fall into the FDIC's "significantly undercapitalized" category. The report says the investors would like to see a longer sale timeline, saying that there are other assets that the bank hasn't examined, including a $21 million tax refund that Mile High is anticipating, $35 million in net operating loss tax credits and insurance claims. According to the report, Wells Fargo also said the proposed sale doesn't foster competitive bidding because of the $1 million breakup fee Strategic Growth would be owed if it is outbid at auction and the $500,000 overbid requirement to challenge Strategic Growth. In addition, this sale may favor Mile High's senior management over creditor interests, Wells Fargo said. About Big Sandy Founded in 1991, Big Sandy Holding Company is a Colorado corporation registered as a bank holding company under the Bank Holding Company Act of 1956, as amended. Big Sandy is the direct corporate parent of Mile High Banks, a Colorado state chartered Bank. Big Sandy filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 12-30138) on Sept. 27, 2012, to recapitalize the Bank. Bankruptcy Judge Michael E. Romero presides over the case. Michael J. Pankow, Esq., and Joshua M. Hantman, Esq., at Brownstein Hyatt Farber Schreck, LLP, serve as the Debtor's counsel. In its petition, Big Sandy estimated $10 million to $50 million in assets and debts. The petition was signed by Dan Allen, chairman/CEO/president. Big Sandy has a deal to sell substantially all of its assets -- essentially 100% of the issued and outstanding capital stock of Mile High Banks -- Strategic Growth Bancorp Inc., subject to higher and better offers. Strategic is prepared to proceed with a transaction which would recapitalize the Bank in accordance with regulatory requirements -- by up to $90 million -- and acquire the Bank from the Debtor for $5.5 million. BLAST ENERGY: Offering $50 Million Common Shares ------------------------------------------------ PEDEVCO Corp., formerly known as Blast Energy Services, filed with the U.S. Securities and Exchange Commission a Form S-1 registration statement relating to the offering of $50 million common stock. The Company's common stock is quoted on the OTC Bulletin Board under the symbol "PEDO." On Oct. 8, 2012, the last reported bid price per share of the Company's common stock as quoted on the OTCBB was $2.00. A copy of the Form S-1 prospectus is available for free at: http://is.gd/QuiaJo About Blast Energy Houston, Texas-based Blast Energy Services, Inc., is seeking to become an independent oil and gas producer with additional revenue potential from its applied fluid jetting technology. The Company plans to grow operations initially through the acquisition of oil producing properties and then eventually, to acquire oil and gas properties where its applied fluid jetting process could be used to increase the field production volumes and value of the properties in which it owns an interest. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, GBH CPAs, PC, in Houston, Texas, expressed substantial doubt about Blast Energy Services' ability to continue as a going concern. The independent auditors noted that Blast incurred a loss from continuing operations for 2011, and has an accumulated deficit at Dec. 31, 2011. The Company reported a net loss of $4.14 million for 2011, compared with a net loss of $1.51 million for 2010. The Company's balance sheet at March 31, 2012, showed $1.86 million in total assets, $3.98 million in total liabilities and a $2.11 million total stockholders' deficit. BLAST ENERGY: GBH Continues to Serve as Accountants --------------------------------------------------- GBH CPAs, PC., were the accountants of PEDEVCO Corp. (formerly Blast Energy Services, Inc.) as of July 27, 2012, the date that PEDEVCO completed the transactions contemplated by the Agreement and Plan of Reorganization, dated as of Jan. 13, 2012, by and among the Company, Blast Acquisition Corp. and Pacific Energy Development Corp. GBH has remained the Company's independent public accountants without interruption since the completion of the Transaction. The Transaction was treated as a "reverse acquisition" for accounting purposes, with PEDCO being treated as the acquiring entity. Pursuant to the U.S. Securities and Exchange Commission's Financial Reporting Manual, a reverse acquisition always results in a change in accountants, unless the same accountants reported on the most recent financial statements of both the registrant and the accounting acquirer (which is not the case here). Accordingly, GBH is considered to be the Company's "successor accountant," and SingerLewak LLP is considered to be the Company's "predecessor accountant." Following the closing of the Transaction, the Company dismissed SingerLewak as the independent accounting firm associated with the financial statements of the Company's subsidiary, PEDCO, for all periods after June 30, 2012. The decision to dismiss SingerLewak as the independent accounting firm associated with the financial statements of PEDCO was made by PEDCO's chief executive officer and subsequently approved by the Company's board of directors. The Company's chief executive officer made the decision to continue with GBH as the independent public accountants for the Company without interruption following the closing of the Transaction, with that decision subsequently ratified by the Company's board of directors. A copy of the Form 8-K is available for free at: http://is.gd/BVEub8 About Blast Energy Houston, Texas-based Blast Energy Services, Inc., is seeking to become an independent oil and gas producer with additional revenue potential from its applied fluid jetting technology. The Company plans to grow operations initially through the acquisition of oil producing properties and then eventually, to acquire oil and gas properties where its applied fluid jetting process could be used to increase the field production volumes and value of the properties in which it owns an interest. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, GBH CPAs, PC, in Houston, Texas, expressed substantial doubt about Blast Energy Services' ability to continue as a going concern. The independent auditors noted that Blast incurred a loss from continuing operations for 2011, and has an accumulated deficit at Dec. 31, 2011. The Company reported a net loss of $4.14 million for 2011, compared with a net loss of $1.51 million for 2010. The Company's balance sheet at March 31, 2012, showed $1.86 million in total assets, $3.98 million in total liabilities and a $2.11 million total stockholders' deficit. BONDS.COM GROUP: Amends 2011 Periodic Reports --------------------------------------------- Bonds.com Group, Inc., filed an amendment to its quarterly reports on Forms 10-Q for the interim period ended March 31, 2011, June 30, 2011, and Sept. 30, 2011, to, among other things, restate the Company's unaudited condensed consolidated financial statements for those periods and restate disclosures in Management's Discussion and Analysis. Bonds.com Group erroneously accounted for the sale of units comprised of its Series D and D-1 convertible preferred stock, par value $0.0001 per share, and warrants for its common stock, par value $0.0001 per share, during Bonds.com Group's first and second quarters of fiscal 2011. These errors caused the beneficial conversion feature of the Series D Preferred to be overstated and the incorrect assignment of a beneficial conversion feature to the Series D-1 Preferred, and those errors generally resulted in an overstatement of the deemed dividends recorded on Bonds.com Group's preferred stock and the related expense. Additionally, during the first, second and third fiscal quarters of 2011, Bonds.com Group erroneously used a volume-weighted average price methodology for measuring the fair value of Common Stock as a component in certain accounting valuation calculations. Bonds.com Group has determined that VWAP was not an acceptable methodology for accounting purposes, and it has obtained an appraisal of the fair value of Common Stock, which is an acceptable methodology. The result of the incorrect use of the VWAP methodology was to overstate the fair value of Common Stock and thereby further overstate the deemed dividends on Bonds.com Group's preferred stock and related expense, overstate the losses incurred by it on certain derivative financial instruments and overstate Bonds.com Group's share based compensation expense. The Company's restated statements of operations reflect a net loss of $3.12 million on $820,746 of revenue for the three months ended March 31, 2011, compared with a net loss of $5.81 million on $820,746 of revenue as originally reported. A copy of the amended Q1 Form 10-Q is available at http://is.gd/vUAdfe The second quarter statements of operations, as amended, reflect a net loss of $2.19 million on $931,675 of revenue for the three months ended June 30, 2011, in comparison a net loss of $272,099 on $931,675 of revenue as originally reported. A copy of the amended Q2 Form 10-Q is available at http://is.gd/us3kjb The restated statements of operations reflect a net loss of $5.94 million on $1.09 million of revenue for the three months ended Sept. 30, 2011, in comparison with a net loss of $6.17 million on $1.09 million of revenue as previously reported. The Company's restated balance sheet at Sept. 30, 2011, showed $4 million in total assets, $12.71 million in total liabilities and a $8.71 million stockholders' deficit. The Company previously disclosed $4.10 million in total assets, $15.52 million in total liabilities and a $11.42 million stockholders' deficit. A copy of the Q3 Form 10Q is available for free at: http://is.gd/BeVod6 About Bonds.com Group Based in Boca Raton, Florida, Bonds.com Group, Inc. (OTC BB: BDCG) -- http://www.bonds.com/-- through its subsidiary Bonds.com, Inc., serves institutional fixed income investors by providing a comprehensive zero subscription fee online trading platform. The Company designed the BondStation and BondStationPro platforms to provide liquidity and competitive pricing to the fragmented Over- The-Counter Fixed Income marketplace. The Company differentiates itself by offering through Bonds.com, Inc., an inventory of more than 35,000 fixed income securities from more than 175 competing sources. Asset classes currently offered on BondStation and BondStationPro, the Company's fixed income trading platforms, include municipal bonds, corporate bonds, agency bonds, certificates of deposit, emerging market debt, structured products and U.S. Treasuries. The Company reported a net loss of $14.45 million in 2011, compared with a net loss of $12.51 million in 2010. The Company's balance sheet at June 30, 2012, showed $10.87 million in total assets, $14.25 million in total liabilities, and a $3.38 million total stockholders' deficit. Daszkal Bolton LLP, in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses and negative cash flows from operations that raise substantial doubt about the Company's ability to continue as a going concern. BURGER KING: Fitch Assigns 'BB' Rating on New Secured Facility -------------------------------------------------------------- Fitch Ratings has upgraded the ratings of Burger King Worldwide, Inc. and its related entities. Fitch has also assigned a 'BB/RR1' rating to the company's new secured credit facility. Fitch has upgraded the following ratings: Burger King Worldwide, Inc. (Parent Holding Co.) -- Long-term Issuer Default Rating (IDR) to 'B' from 'B-'. Burger King Capital Holdings, LLC (BKCH/Parent of Burger King Holdings, Inc.) and Burger King Capital Finance, Inc. (BKCF/Financing Subsidiary) as Co-Issuers -- Long-term IDR to 'B' from 'B-'; -- $579.1 million face value of 11% sr. discount notes due 2019 to 'CCC+/RR6' from 'CCC-/RR6'. Burger King Holdings, Inc. (Direct Parent of Burger King Corporation) -- Long-term IDR to 'B' from 'B-'. Burger King Corporation (Operating Company) -- Long-term IDR to 'B' from 'B-'; -- $794.5 million 9.875% senior unsecured notes due 2018 to 'B/RR4' from 'CCC+/RR5'. The following new ratings have been assigned: Burger King Corporation (Operating Company) -- $130 million secured revolver due 2015 'BB/RR1'; -- $1,030 million secured term loan A due 2017 'BB/RR1'; -- $705 million secured term loan B due 2019 'BB/RR1'. Fitch has simultaneously withdrawn the following ratings: Burger King Corporation (Operating Company) -- $150 million secured revolver due 2015 'BB-/RR1'; -- $1,480.7 million secured term loan due 2016 'BB-/RR1'; -- $235.1 million secured Euro tranche term loan due 2016 'BB-/RR1'. At June 30, 2012, Burger King had $3.1 billion of total debt. The Rating Outlook is Positive. Rating Rationale: The upgrade of Burger King's ratings is due to the company's declining financial leverage, improving same-store sales (SSS) performance, and good cash flow generation. Burger King's cash flow and margins are benefiting from general and administrative (G&A) expense savings, significant refranchising, global SSS growth, and international new unit development by franchisees. Cash flow from operations (CFO), which totaled $343 million for the latest 12-month (LTM) period ended June 30, 2012, more than satisfies Burger King's decreasing capital expenditure requirements resulting in meaningful annual free cash flow (FCF). Burger King's consolidated EBITDA margin has expanded to over 27% for the LTM period ended June 30, 2012 from more than 25% at Dec. 31, 2011. At June 30, 2012, 94% of Burger King's 12,604 units were franchised, an increase from 90% at Dec. 31, 2011. Burger King is succeeding with its goal of being a fully franchised business. Fitch expects Burger King's EBITDA margin to experience considerable additional expansion as a result of the financial effect of refranchising. The Positive Outlook reflects Fitch's belief that Burger King's leverage will continue to decline over the next 12 months from a combination of modest EBITDA growth and moderate debt reduction. Coverage ratios should also improve as a result of the firm's September 2012 credit facility refinancing discussed below. Burger King is required to utilize a percentage of its excess cash flow (as defined by the firm's credit agreement and as discussed below) for the repayment of term loans. Recent Same-Store Sales Improvement and Credit Metrics: Burger King's global SSS grew 4.5% during the first six months of 2012, after declining 2.5% for the same period last year. Comparable sales growth in North America -- which represented 67% of revenue and 66% of operating income excluding corporate expenses during 2011 -- was 4.3% during the first half of 2012 versus a decline of 5.6% during the same period last year. Burger King has enhanced the quality of its food and is broadening its appeal to a wider demographic with an expanded line of premium burgers, smoothies, chicken strips, and salads. Fitch believes good systemwide operational execution and continued remodeling of units will enable Burger King to continue to generate positive SSS. Burger King has reported improving guest satisfaction scores and, as of June 30, 2012, franchisees had completed or have committed to re-image about 30% of its 7,469 units in North America. For the LTM period ended June 30, 2012, rent-adjusted leverage (defined as total debt plus 8x gross rents-to-operating EBITDA plus gross rent) was 5.5x. Leverage is down from nearly 7.0x following the October 2010 leveraged buy-out by 3G Capital Partners, Ltd. Operating EBITDAR-to-interest expense plus gross rent was 2.1x, funds from operations (FFO) fixed-charge coverage was 2.0x, and FCF was $262.6 million for the LTM period. Fitch believes Burger King's FCF has the potential to approximate $200 million or more in most years, as a highly franchised model is less capital intensive and the firm does not pay a regular common dividend. Refinancing of Secured Credit Facility: On Sept. 28, 2012, Burger King entered into a new secured credit facility consisting of a $130 million revolver expiring Oct. 19, 2015, a $1,030 million tranche A term loan due Sept. 28, 2017, and a $705 million tranche B term loan due Sept. 28, 2019. Proceeds were used to refinance the firm's existing secured credit facility. As a result of the refinancing, Burger King lowered borrowing rates and extended the maturity dates of its term loans which were due in 2016 under the old agreement. Burger King expects to achieve annual cash interest savings of $25 million from the recent refinancing of its secured credit facility. Recovery Ratings: The 'RR1' Recovery Rating on Burger King's secured debt reflects Fitch's belief that recovery prospects on these obligations would remain outstanding at 91%-100% if the firm were to file for bankruptcy protection or restructure its balance sheet. Conversely, the 'B/RR4' rating on Burger King's 9.875% 2018 notes is due to Fitch's view that recovery would be average or in the 31%-50% range in a distressed situation. The 'CCC+/RR6' rating on Burger King Capital Holdings, LLC's and Burger King Capital Finance, Inc.'s 11% discount notes due 2019 implies recovery prospects of 10% or less in a distressed situation. These notes are structurally subordinated to debt issued by Burger King Corporation because they are not guaranteed and were not issued by the operating company which holds the vast majority of the firm's $5.4 billion of assets at June 30, 2012. Liquidity and Maturities: Burger King has consistently maintained good liquidity. At June 30, 2012, the firm had $377.7 million of cash and $138.5 million of revolver availability net of letters of credit. Liquidity is supported by the firm's FCF, which Fitch believes can average at least $200 million annually as mentioned previously. Maturities are manageable in the intermediate term and consist mainly of term loan amortization payments through 2018. Beginning Dec. 31, 2012, Burger King's new term loan A amortizes quarterly at a rate of $6.4 million, stepping up to $12.9 million on Dec. 31, 2013, $19.3 million on Dec. 31, 2014, $25.8 million on Dec. 31, 2015, and $32.2 million on Dec. 31, 2016 with the balance payable at maturity. The new term loan B amortizes in quarterly installments equal to 0.25% of original principal with the balance due at maturity. Financial Covenants: Burger King's new credit agreement subjects the firm to maximum total leverage, not adjusted for leases, and minimum interest coverage financial maintenance covenants. Maximum leverage is 6.25x beginning Dec. 31, 2012, stepping down to 6.0x March 31, 2013 through June 30, 2013, 5.75x Sept. 30, 2013 through March 31, 2014, 5.25x June 30, 2014 through June 30, 2015, and 5.0x thereafter. Minimum interest coverage is 1.7x beginning Dec. 31, 2012 until June 30, 2013, increasing to 2.0x after June 30, 2015. Burger King should maintain ample cushion under these covenants as current metrics are well within these parameters. Following the end of the fiscal quarter ending Dec. 31, 2012 and thereafter, Burger King is required to use 50% of its annual excess cash flow (as defined by the agreement) for term loan repayment if total leverage is greater than 4.5x. The requirement declines to 25% if total leverage is less than 4.5x but greater than 3.5x, or 0% if total leverage is less than 3.5x. Fitch estimates that total leverage, which as defined by the company's new credit facility is based on total debt of the borrower and restricted subsidiaries less up to $450 million of cash, was about 3.6x at June 30, 2012. What Could Trigger A Rating Action Future developments that may, individually or collectively, lead to a positive rating action include: -- Material additional deleveraging; such that total adjusted debt-to-operating EBITDAR approximates 5.0x or lower, along with continued good FCF could result in an upgrade of Burger King's ratings; -- Sustainably strong SSS performance, particularly in North America, and stable to improving EBITDA margins would be required for additional upgrades. Future developments that may, individually or collectively, lead to a negative rating action include: -- A downgrade in the near term is not anticipated given Burger King's improved leverage profile, good liquidity, and lack of near-term maturities; -- However, a meaningful increase in leverage, due to increased debt or a prolonged period of SSS declines, increased covenant risk, and negligible FCF, could result in a downgrade. CAESARS ENTERTAINMENT: Jinlong Wang Resigns from Board ------------------------------------------------------ Jinlong Wang informed the Company of his resignation from his position as a director of Caesars Entertainment Corporation effective Dec. 31, 2012, for personal reasons. Mr. Wang has served the Company as an independent director and a member of the Company's Audit Committee since 2010. There are no disagreements between Mr. Wang and the Company that caused or contributed to his decision. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. --http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company reported a net loss of $666.70 million in 2011, and a net loss of $823.30 million in 2010. The Company's balance sheet at June 30, 2012, showed $28.03 billion in total assets, $27.43 billion in total liabilities, and $607.2 million in total equity. * * * As reported by the TCR on March 28, 2012, Moody's Investors Service upgraded Caesars Entertainment Corp's Corporate Family Rating (CFR) and Probability of Default Rating both to Caa1 from Caa2. The upgrade of Caesars' ratings reflects very good liquidity, an improving operating outlook for gaming in a number of the company's largest markets that is expected to drive earnings growth, the completion of a bank amendment that resulted in the extension of debt maturities to 2018 from 2015, and the public listing of the company's equity that increases financial flexibility by providing it with another potential source of capital. The upgrade of the SGL rating reflects minimal debt maturities over the next few years, significant cash balances (approximately $900 million at December 31, 2011) and revolver availability that will be more than sufficient to fund the company's cash interest and capital spending needs. In the Aug. 17, 2012, edition of the TCR, Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based Caesars Entertainment Corp. (CEC) and wholly owned subsidiary Caesars Entertainment Operating Co. Inc. (CEOC) to negative from stable. "We affirmed all other ratings on the companies, including our 'B-' corporate credit rating," S&P said. As reported by the TCR on Aug. 17, 2012, Fitch Ratings affirmed Caesars Entertainment Corp.'s Long-term Issuer Default Rating at 'CCC'. CAPITOL BANCORP: Strikes Equity Deal, Delays Hearing ---------------------------------------------------- Rachel Feintzeig at Dow Jones' DBR Small Cap reports that Capitol Bancorp Ltd. struck a deal for a $50 million equity investment but said the move requires it to slow down its timeline for exiting bankruptcy. 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. CASCADE BANCORP: Amends 44.3 Million Common Shares Prospectus ------------------------------------------------------------- Cascade Bancorp filed with the U.S. Securities and Exchange Commission a post-effective amendment no. 1 to Form S-1 filed on March 23, 2011. The Company filed the amendment to: (a) convert the Registration Statement on Form S-1 into a Registration Statement on Form S-3; (b) update certain financial and other information contained in the prospectus in accordance with Section 10(a)(3) of the Securities Act of 1933, as amended, including the consolidated financial statements and the notes thereto included in the annual report on Form 10-K for the fiscal year ended Dec. 31, 2011; (c) modify information regarding certain selling stockholders listed in the registration statement; and (d) update certain other information. The prospectus relates to the resale of an aggregate of up to 44,383,277 shares of the Company's common stock, representing approximately 94% of the Company's total outstanding shares, of which 44,243,750 were issued to the selling stockholders in connection with an equity financing transaction in January 2011. About 41,002,554 of the shares of the Company's common stock being registered pursuant to this registration statement are held by directors, officers or significant stockholders of Cascade Bancorp. The Company will not receive any proceeds from the sale of the shares of common stock by the selling stockholders. The Company's common stock is traded on the NASDAQ Capital Market under the symbol "CACB." The last reported sale price of our common stock on the NASDAQ Capital Market on Oct. 11, 2012, was $5.49 per share. A copy of the amended prospectus is available for free at: http://is.gd/jAStE3 About Cascade Bancorp Bend, Ore.-based Cascade Bancorp (Nasdaq: CACB) through its wholly-owned subsidiary, Bank of the Cascades, offers full-service community banking through 32 branches in Central Oregon, Southern Oregon, Portland/Salem Oregon and Boise/Treasure Valley Idaho. Cascade Bancorp has no significant assets or operations other than the Bank. Cascade reported a net loss of $47.27 million in 2011, a net loss of $13.65 million in 2010, and a net loss of $114.83 million in 2009. The Company's balance sheet at June 30, 2012, showed $1.27 billion in total assets, $1.14 billion in total liabilities and $136.65 million in total stockholders' equity. Weiss Ratings has assigned its E- rating to Bend, Ore.-based Bank of The Cascades. The rating company says that the institution currently demonstrates what it considers to be significant weaknesses and has also failed some of the basic tests it uses to identify fiscal stability. "Even in a favorable economic environment," Weiss says, "it is our opinion that depositors or creditors could incur significant risks." CEQUEL COMMS: Moody's Affirms 'B1' CFR; Rates Sr. Bonds 'B3' ------------------------------------------------------------ Moody's Investors Service affirmed the B1 corporate family rating of Cequel Communications Holdings, LLC (Suddenlink) and assigned a B3 rating to its proposed $500 million senior unsecured bonds issuance. The company expects to use proceeds, in conjunction with a $1,985 million cash equity contribution from BC Partners and CPP Investment Board (CPPIB) and rollover equity from management, to fund the acquisition of Suddenlink from the existing private equity sponsor owners. The transaction increases leverage by about one-half a turn but expected metrics remain appropriate for the B1 corporate family rating. A summary of the actions follows. Cequel Communications Holdings I, LLC $500M Senior Unsecured Bonds, Assigned B3, LGD5, 79% 8.625% Senior Unsecured Bonds due November 2017, Affirmed B3, LGD adjusted to LGD5, 79% from LGD5, 83% Cequel Communications, LLC Senior Secured Bank Credit Facility, Affirmed Ba2, LGD adjusted to LGD2, 23% from LGD2, 27% Ratings Rationale Incremental debt taken on to fund the transaction increases leverage to 6.2 times debt-to-EBITDA from 5.7 times for the trailing twelve months ended June 30. However, Moody's expects that with continued EBITDA growth, leverage will be around 6 times by the time the transaction closes (expected to occur in the final quarter of this year) and will fall below 6 times during 2013. Furthermore, although Moody's expects capital expenditures to remain substantial given investments for growth, particularly in the commercial business, capital intensity will likely decline as Suddenlink concludes its substantial network upgrade in 2012. This decline, together with the expiration of unprofitable interest rate hedges, should offset the increased interest expense (expected to be about $35 million annually) and facilitate free cash flow expansion even with the incremental debt. The transaction as proposed incorporates the buyout of all common and preferred equity. Moody's treated the preferred equity (accreted value of $108 million as of June 30) as debt, so the $500 million of incremental balance sheet debt equates to an approximately $400 million net increase in debt on a Moody's adjusted basis. Also, the elimination of this accreting obligation will support more rapid de-leveraging. Because the existing management team will remain in place, the proposed transaction does not trigger change of control provisions within the first lien credit facility or senior unsecured bonds, and Moody's affirmed the ratings on these obligations. The increase in junior capital modestly improves the loss rate on the senior secured credit facility but does not impact its Ba2 rating. The proposed senior unsecured bonds are pari passu with the existing bonds and Moody's ranks them equally in the waterfall of liabilities. Notwithstanding the short term negative impact on leverage, over the next several years Moody's expects an at worst comparable or potentially less aggressive fiscal policy from the new owners compared to the existing sponsor group (Goldman Sachs, Quadrangle, and Oaktree). Prior to this proposed buyout and including the $70 million distribution in May 2012, Suddenlink distributed about $800 million of cash to its equity holders since January 2011, representing 86% of the sponsors' initial investment, and repaid approximately $125 million of preferred stock. Moderate distributions would not surprise Moody's and would not necessarily negatively impact the ratings, provided Moody's expected leverage below 6 times debt-to-EBITDA. In general, over the next several years Moody's expects the new owners to focus on value appreciation through growth more so than distributions. Pro forma leverage of approximately 6 times debt-to-EBITDA creates risk for a company in a capital intensive, competitive industry, driving Cequel's B1 CFR. However, Moody's expects leverage to decline over the next year as EBITDA grows and the company repays outstanding borrowings under the revolver. Good liquidity, including expectations for increasing free cash flow, also supports the rating. Notwithstanding the maturity of the core video product, the relative stability of the subscription business provides steady cash flow, and the high quality of Cequel's network positions it well against escalating competition. The company's penetration lags behind industry averages, but its high speed data and phone growth is exceeding most peers, which Moody's expects to continue as the company benefits from its network investment. Moody's expects the new owners to seek growth opportunities, which could improve asset value, but absent opportunities for investment or acquisition, sponsor distributions are likely and as such the sponsor ownership weighs negatively on the credit profile. The stable outlook assumes maintenance of an adequate or better liquidity profile and that leverage will decline to the mid-5 times debt-to-EBITDA range driven by the combination of EBITDA growth and debt reduciton over the next 12 to 18 months. Modest distributions over the next year would not necessarily negatively impact the rating provided Moody's expected the de-leveraging trend to continue. Cequel's financial sponsor ownership and relatively high leverage limit upward ratings momentum, and a positive rating action is highly unlikely. A higher rating would require sustained free cash flow to debt in the high single digits and sustained leverage below 5 times debt-to-EBITDA, as well as a good liquidity profile and evidence of shareholder commitment to a more fiscally conservative capitalization. A material weakening of operating performance or inability to grow EBITDA due to either escalating competitive pressure or technological changes could pressure the rating down. Incremental shareholder friendly activities, acquisitions resulting in leverage sustained above 6 times debt-to-EBITDA or an erosion of the liquidity profile could also have negative ratings implications. The principal methodology used in rating Cequel Communications Holdings I, LLC was the Global Cable Television Industry Methodology published in July 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in St. Louis, Missouri, and doing business as Suddenlink Communications, Cequel Communications Holdings LLC serves approximately 1.4 million residential and 71 thousand commercial customers. The company provides digital TV, high-speed Internet and telephone services to consumers and businesses and generated revenues of approximately $2 billion of revenue for the twelve months ended June 30. Cequel is currently owned by Goldman Sachs, Quadrangle, and Oaktree, as well as management. CELL THERAPEUTICS: Plans to Offer 40,000 Preferred Shares --------------------------------------------------------- Cell Therapeutics, Inc., intends to offer and sell, subject to market and other conditions, 40,000 shares of its Series 17 Preferred Stock in an underwritten public offering. Each share of Series 17 Preferred Stock will have a stated value of $1,000 per share and will be convertible at the option of the holder, at any time after issuance, into shares of common stock prior to the automatic conversion of those shares in certain circumstances. Shares of the Series 17 Preferred Stock will receive dividends in the same amount as any dividends declared and paid on shares of common stock, but would be entitled to a liquidation preference over the common stock in certain liquidation events. The Series 17 Preferred Stock will have no voting rights on general corporate matters. CTI plans to use the net proceeds from this Offering to support the launch of Pixuvri (pixantrone) in Europe and to commence phase III trials of pacritinib as well as for general corporate purposes, which may include, among other things, funding research and development, preclinical and clinical trials, the preparation and filing of new drug applications, the acquisition of complementary businesses, technologies or products and general working capital. There can be no assurance as to whether or when the Offering may be completed, or as to the actual size or terms of the Offering. The price at which the shares of Series 17 Preferred Stock will be sold to the public, the number of shares of common stock into which each share of Series 17 Preferred Stock will be convertible, the relevant conversion price and the liquidation preference will be announced, as soon as defined, through a press release. Jefferies & Company, Inc., is acting as sole book-running manager for the Offering. Roth Capital Partners, LLC, and ThinkEquity LLC are acting as co-managers for the Offering. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of US$62.36 million in 2011, compared with a net loss attributable to CTI of US$82.64 million in 2010. The Company's balance sheet at June 30, 2012, showed $38.34 million in total assets, $39.83 million in total liabilities, $13.46 million in common stock purchase warrants, and a $14.95 million total shareholders' deficit. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are US$47.1 million as of Dec. 31, 2011. The Company's total current liabilities were US$17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CELL THERAPEUTICS: Prices Offering of 60,000 Preferred Shares ------------------------------------------------------------- Cell Therapeutics, Inc., announced the pricing of an underwritten public offering of 60,000 shares of its Series 17 Preferred Stock, offered at a price to the public of $1,000 per share of Series 17 Preferred Stock. Each share of Series 17 Preferred Stock is convertible at the option of the holder, at any time, into approximately 714 shares of common stock at a conversion price of $1.40 per share of common stock, for a total of approximately 42.9 million shares of common stock. The shares of Series 17 Preferred Stock will automatically convert into shares of common stock in certain circumstances. Shares of the Series 17 Preferred Stock will receive dividends in the same amount as any dividends declared and paid on shares of common stock, but would be entitled to a liquidation preference over the common stock in certain liquidation events. The Series 17 Preferred Stock will have no voting rights on general corporate matters. The gross proceeds to CTI from this Offering are expected to be $60 million, before deducting underwriting discounts and commissions and other estimated offering expenses payable by CTI. CTI estimates that its net proceeds from the Offering after deducting commission and expenses and other estimated offering expenses payable by CTI will be approximately $55.6 million. The Offering is expected to close on Oct. 11, 2012, subject to customary closing conditions. CTI plans to use the net proceeds from this Offering to support the launch of Pixuvri (pixantrone) in Europe and to commence phase III trials of pacritinib as well as for general corporate purposes, which may include, among other things, funding research and development, preclinical and clinical trials, the preparation and filing of new drug applications, the acquisition of complementary businesses, technologies or products and general working capital. Jefferies & Company, Inc., is acting as sole book-running manager for the Offering. Roth Capital Partners, LLC and ThinkEquity LLC are acting as co-managers for the Offering. About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of US$62.36 million in 2011, compared with a net loss attributable to CTI of US$82.64 million in 2010. The Company's balance sheet at June 30, 2012, showed $38.34 million in total assets, $39.83 million in total liabilities, $13.46 million in common stock purchase warrants, and a $14.95 million total shareholders' deficit. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are US$47.1 million as of Dec. 31, 2011. The Company's total current liabilities were US$17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CERTENEJAS INCORPORADO: Motel Owner Files Plan; Unsecureds Get 1% ----------------------------------------------------------------- Certenejas Incorporado filed at the end of last month a proposed Chapter 11 plan of reorganization. According to the explanatory disclosure statement, Banco Popular de Puerto Rico, holder of a $40.4 million claim secured by substantially all assets of the Debtor, will recover 100%. On the effective date, the Debtor will surrender, as payment in kind to BPPR or will consent to the foreclosure of the Motel Molino Azul (valued at $6.95 million), Motel Molino Rojo ($5.60 million), Motel Las Palmas ($8.50 million), Motel El Rio ($6.67 million), and Motel El Eden ($3.25 million), and a parcel of land in Rio Grand, Puerto Rico ($1.45 million). The Debtor will retain the real property known as Motel Flor Del Valle (valued at $4.5 million). The balance of BPPR's secured claim for $4.5 milion will be paid through monthly payments with a balloon payment of $4.32 million on Dec. 31, 2014. Holders of general unsecured claims aggregating $4.65 million will recover 1%. They will split a $50,000 carve out to be agreed with BPPR. Holders of interests are unimpaired. Mr. Luis Jaime Meaux and Mrs. Marta I. Muniz Melendez will retain their shares unaltered. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Certenejas_Inco_Plan_Outline.pdf About Certenejas Incorporado Certenejas Incorporado -- aka Hotel Flor Del Valle, Motel El Eden, Motel Molino Azul, Motel Molino Rojo, Motel Las Palmas, and Motel El Rio -- owns motels or short-term guest houses in Puerto Rico. It filed a Chapter 11 petition (Bankr. D. P.R. Case No. 12-02806) in Old San Juan, Puerto Rico, on April 11, 2012. The Debtor disclosed US$27.68 million in assets and US$45.29 million in debts as of the Chapter 11 filing. Charles Alfred Cuprill, Esq., serves as the Debtor's counsel. The petition was signed by Luis J. Meaux Vazquez, president. Certenejas Incorporado and three of its affiliates previously sought Chapter 11 bankruptcy protection (Bankr. D. P.R. Case Nos. 09-08470 to 09-08473) on Oct. 2, 2009. The affiliates are Rojoazul Hotel, Inc., Jonathan Corporation, and Silvernugget Development Corporation. According to the schedules filed in the 2009 case, Certenejas Incorporado had total assets of US$13,800,000, and total debts of US$41,596,637. The petition was signed by Luis J. Meaux Vazquez, the Company's president. CHINA MEDICAL: Beijing Firm's Cayman Bankruptcy Protected in U.S. ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Cayman Islands liquidators for China Medical Technologies Inc. formally received bankruptcy protection in the U.S. According to the report, the liquidators filed a Chapter 15 petition to halt class-action lawsuits pending in U.S. District Court in New York against the Beijing-based company. With no objection lodged by any creditors, the bankruptcy judge signed an order finding the Cayman Islands are home to the so-called foreign main bankruptcy proceeding. The report relates that the order halts creditor actions and lawsuits in the U.S. The Bloomberg report discloses that in court papers, the liquidators said that Chief Executive Officer Wu Xiaodong transferred the operating businesses to Chinese companies for a fraction of the value. The liquidators contend that Wu has an ownership interest in the buyers. About China Medical China Medical Technologies Inc., a maker of diagnostic products, filed a Chapter 15 bankruptcy petition in New York to locate money fraudulently transferred by its principals. The Debtor, which has been taken over by a trustee, is undergoing corporate winding-up proceedings before the Grand Court of the Cayman Islands. Kenneth M. Krys, the joint official liquidator, wants U.S. courts to recognize the Cayman proceeding as the "foreign main proceeding" The liquidator filed a Chapter 15 petition for China Medical (Bankr. S.D.N.Y. Case No. 12-13736) on Aug. 31, 2012. Curtis C. Mechling, Esq., at Stroock & Stroock & Lavan, LLP, in New York, serves as counsel. CIRCLE STAR: Maturity of 10% Convertible Notes Extended to 2014 --------------------------------------------------------------- Circle Star Energy Corp. entered into note extension agreements with the holders of the Company's 10% Convertible Notes due Feb. 8, 2013, whereby the Holders agreed to extend the maturity date of the Notes to Sept. 30, 2014, on the closing of a $5,000,000 financing within 90 days of execution of the Note Extension Agreements, or as extended by additional 30 day periods, which are to be granted at the sole discretion of the Holders. As an incentive to enter into the Note Extension Agreements, the Holders were to be issued an aggregate amount of 250,000 shares of the Company's common stock within five business days of the execution of the Note Extension Agreements and the Holders will receive an additional aggregate amount of 250,000 shares of the Company's common stock on closing of the Financing. Pursuant to the Note Extension Agreements accrued interest under the Notes from May 1, 2012, until the closing of the Financing, will be paid on closing of the Financing and subsequent to the Financing interest will be paid on a monthly basis. Should the Financing not occur within the 90 day period or within an extension period, then the original terms of the Notes will remain in effect. About Circle Star Houston, Tex.-based Circle Star Energy Corp. owns royalty, leasehold, operating, net revenue, net profit, reversionary and other mineral rights and interests in certain oil and gas properties in Texas. The Company's properties are in Crane, Scurry, Victoria, Dimmit, Zavala, Grimes, Madison, Robertson, Fayette, and Lee Counties. The Company reported a net loss of $11.07 million on $942,150 of total revenues for the year ended April 30, 2012, compared with a net loss of $31,718 on $0 of total revenues during the prior fiscal year. Hein & Associates LLP, in Dallas, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficit which raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at July 31, 2012, showed $8.36 million in total assets, $4.46 million in total liabilities, and $3.89 million in total stockholders' equity. CLEAR CHANNEL: To Swap $2 Billion Loan for CCU 9% Guarantee Notes ----------------------------------------------------------------- Clear Channel Communications, Inc., has commenced a private offer to exchange up to $2 billion aggregate principal amount of term loans under its cash flow credit facilities for a like principal amount of newly issued CCU 9.0% priority guarantee notes due 2019. The exchange offer, which is only available to eligible lenders under CCU's cash flow credit facilities, is being made pursuant to an Offering Circular dated Oct. 12, 2012, and is exempt from registration under the Securities Act of 1933, as amended. Concurrently with the exchange offer, CCU is pursuing amendments to certain provisions of the cash flow credit facilities. Lenders must consent to the Amendment in order to validly submit their term loans for exchange in the exchange offer. Eligible lenders of term loans under CCU's cash flow credit facilities must submit a letter of participation on or prior to 12:00 noon, New York City time, on Oct. 19, 2012, unless extended, in order to be eligible to receive Notes in the exchange offer. The amount of each lender's term loans that will be accepted in exchange for Notes will be subject to reduction on a pro rata basis as described in the Offering Circular. Letters of Participation may be validly withdrawn until the Participation Deadline, but not thereafter. Letters of Participation that are properly submitted at any time prior to the Participation Deadline and not validly withdrawn prior to the Participation Deadline will be binding. Consummation of the exchange offer is subject to the satisfaction or waiver of certain conditions, including the Amendment becoming effective. CCU reserves the right, in its sole discretion, to waive or modify any one or more of the conditions to the exchange offer. The Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior basis by CCU's parent, Clear Channel Capital I, LLC, and all of CCU's existing and future domestic wholly-owned restricted subsidiaries. The Notes and the related guarantees will be secured by (1) a lien on (a) the capital stock of CCU and (b) certain property and related assets that do not constitute "principal property", in each case equal in priority to the liens securing the obligations under CCU's cash flow credit facilities and existing priority guarantee notes and (2) a lien on the accounts receivable and related assets securing CCU's receivables based credit facility junior in priority to the lien securing CCU's obligations thereunder. In addition to the collateral granted to secure the Notes, the collateral agent and the trustee for the Notes will enter into an agreement with the administrative agent for the lenders under the cash flow credit facilities to share in a certain percentage of any proceeds realized on collateral consisting of principal properties. About Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. Clear Channel reported a net loss of $302.09 million on $6.16 billion of revenue in 2011, compared with a net loss of $479.08 million on $5.86 billion of revenue in 2010. The Company had a net loss of $4.03 billion on $5.55 billion of revenue in 2009. The Company's balance sheet at June 30, 2012, showed $16.45 billion in total assets, $24.31 billion in total liabilities, and a $7.86 billion total shareholders deficit. Bankruptcy Warning At March 31, 2012, the Company had $20.7 billion of total indebtedness outstanding. The Company said in its quarterly report for the period ended March 31, 2012, that its ability to restructure or refinance the debt will depend on the condition of the capital markets and the Company's financial condition at that time. Any refinancing of the Company's debt could be at higher interest rates and increase debt service obligations and may require the Company and its subsidiaries to comply with more onerous covenants, which could further restrict the Company's business operations. The terms of existing or future debt instruments may restrict the Company from adopting some of these alternatives. These alternative measures may not be successful and may not permit the Company or its subsidiaries to meet scheduled debt service obligations. If the Company and its subsidiaries cannot make scheduled payments on indebtedness, the Company or its subsidiaries, as applicable, will be in default under one or more of the debt agreements and, as a result the Company could be forced into bankruptcy or liquidation. * * * The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings has affirmed the 'CCC' Issuer Default Rating of Clear Channel Communications, Inc., and the 'B' IDR of Clear Channel Worldwide Holdings, Inc., an indirect wholly owned subsidiary of Clear Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor advertising subsidiary. The Rating Outlook is Stable. Fitch's ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable and growing interest burden that pressures free cash flow; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. CLEAR CHANNEL: Pursuing Amendments to Credit Facilities ------------------------------------------------------- Clear Channel Communications, Inc., is pursuing amendments to its cash flow credit facilities. The Amendment would, among other things: -- permit exchange offers of term loans for new debt securities in an aggregate principal amount of up to $5 billion; -- provide CCU with greater flexibility to prepay tranche A term loans; -- following the repayment or extension of all tranche A term loans, permit below par non-pro rata purchases of term loans pursuant to customary Dutch auction procedures whereby all lenders of the class of term loans offered to be purchased will be offered an opportunity to participate; -- following the repayment or extension of all tranche A term loans, permit the repurchase of junior debt maturing before January 2016 with cash on hand in an amount not to exceed $200 million; -- combine the term loan B, the delayed draw term loan 1 and the delayed draw term loan 2 under the cash flow credit facilities; -- preserve revolving credit facility capacity in the event CCU repays all amounts outstanding under the revolving credit facility; and -- eliminate certain restrictions on the ability of Clear Channel Outdoor Holdings, Inc., and its subsidiaries to incur debt. The Amendment requires the consent of a majority of the outstanding loans and commitments under the cash flow credit facilities and a majority of the outstanding loans of each class of term loans under the cash flow credit facilities to become effective. Affiliates of Bain Capital, LLC, and Thomas H. Lee Partners, L.P., which are affiliates of CCU, are existing holders of term loans under the cash flow credit facilities and have committed to consent to the Amendment. In addition, CCU has obtained the commitment to consent to the Amendment of certain funds and accounts managed by each of Angelo Gordon & Co., Apollo Global Management, LLC, Canyon Capital Advisors LLC and Oaktree Capital Management LP. These lenders and the Sponsors collectively represent approximately 46% of the outstanding loans and commitments under the cash flow credit facilities. The lenders' consent to the Amendment will be due by 12:00 noon, New York City time, on Oct. 19, 2012. About Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. Clear Channel reported a net loss of $302.09 million on $6.16 billion of revenue in 2011, compared with a net loss of $479.08 million on $5.86 billion of revenue in 2010. The Company had a net loss of $4.03 billion on $5.55 billion of revenue in 2009. The Company's balance sheet at June 30, 2012, showed $16.45 billion in total assets, $24.31 billion in total liabilities, and a $7.86 billion total shareholders deficit. Bankruptcy Warning At March 31, 2012, the Company had $20.7 billion of total indebtedness outstanding. The Company said in its quarterly report for the period ended March 31, 2012, that its ability to restructure or refinance the debt will depend on the condition of the capital markets and the Company's financial condition at that time. Any refinancing of the Company's debt could be at higher interest rates and increase debt service obligations and may require the Company and its subsidiaries to comply with more onerous covenants, which could further restrict the Company's business operations. The terms of existing or future debt instruments may restrict the Company from adopting some of these alternatives. These alternative measures may not be successful and may not permit the Company or its subsidiaries to meet scheduled debt service obligations. If the Company and its subsidiaries cannot make scheduled payments on indebtedness, the Company or its subsidiaries, as applicable, will be in default under one or more of the debt agreements and, as a result the Company could be forced into bankruptcy or liquidation. * * * The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings has affirmed the 'CCC' Issuer Default Rating of Clear Channel Communications, Inc., and the 'B' IDR of Clear Channel Worldwide Holdings, Inc., an indirect wholly owned subsidiary of Clear Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor advertising subsidiary. The Rating Outlook is Stable. Fitch's ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable and growing interest burden that pressures free cash flow; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. CLEAR CHANNEL: Moody's Rates $2BB Priority Guarantee Notes 'Caa1' ----------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Clear Channel Communications, Inc.'s proposed $2 billion Priority Guarantee Notes (PGN) that matures in 2019. The debt is being issued as part of an exchange offer for part of the $10.2 billion of bank debt that matures in 2016 and $1.1 billion in 2014. The company is also attempting to amend its credit agreement to allow it additional flexibility to repay its Term Loan A facility on a non-pro-rata basis, instead of on a pro-rata basis with the bank facilities that mature in 2014 and 2016. The amendment would also allow an additional $3 billion of exchanges in the future and for the company to buy back the bank debt and $200 million of junior debt that matures before 2016 below par. While the added flexibility and extension of part of its bank debt is a positive, it comes at a cost as bank debt paying L+3.65 is replaced with debt with interest rates of 9%. Clear Channel's Corporate Family Rating (CFR) and Probability of Default Rating (PDR) remain unchanged at Caa2 and Caa3, respectively. Moody's rates the existing PGN, proposed PGN, and the Credit Facility the same to reflect the senior secured position in the capital structure. There are differences in the security package including a Collateral Sharing Agreement that the proposed PGN's that mature in 2019 benefit from that the existing PGN's that mature in 2021 do not. The difference in the security package leads to a different point estimates in Moody's LGD methodology between the two PGN classes. Both classes of PGN's will not have financial covenants while the credit facilities will continue to have them in addition to other differences that cause the point estimates for the credit facilities to be slightly better than both classes of PGN's. The company's liquidity rating was changed to SGL-3 from SGL-2 to reflect the limited revolver availability and modest free cash flow and interest coverage ratios. The outlook remains Stable. Details of the rating actions are as follows: Clear Channel Communications, Inc $2 billion Priority Guarantee Notes due 12/15/2019, Assigned a Caa1 LGD-2, 22% rating Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Moody's also affirmed existing ratings and adjusted Loss Given Default (LGD) point estimates as shown below: Clear Channel Communications, Inc. Corporate Family Rating, Affirmed Caa2 Probability of Default Rating, Affirmed Caa3 Senior Secured Credit Facility, Affirmed Caa1 LGD-2, 21% Priority Guarantee Notes due 2021, Affirmed Caa1, LGD changed to LGD-2, 26% from LGD-2, 21% Senior Unsecured Notes due 2016, Affirmed Ca LGD-4, 63% Senior Unsecured Notes (Legacy Notes), Affirmed Ca LGD-5, 75% Outlook remains Stable. Ratings Rationale The Company's Caa2 Corporate Family Rating (CFR) reflect the very high leverage levels of 11.7x on a consolidated basis (excluding Moody's standard lease adjustments) and $10.1 billion of debt due in 2016 (pro-forma for the current $2 billion exchange offer). The ratings also include weak free cash flow and interest coverage of 1.3x which will be further pressured by higher interest rates from the current exchange offer in addition to future refinancing or extensions of its debt maturities. While the exchange and amendment to its credit agreement is a good first step towards refinancing its 2016 maturities, more progress will be needed and the anticipated increase in interest rates could be material. Even if Clear Channel is able to refinance its 2016 maturities, the company will remain vulnerable to a slowdown in the economy given the heightened sensitivity that its radio and outdoor businesses have to the economy. The combination of higher interest rates from a refinancing and lower EBITDA in the event of a future economic downturn could materially impair its interest coverage and liquidity position. In addition, there are secular pressures on its terrestrial radio business that could weigh on results as competition for advertising dollars and listeners are expected to increase going forward. Also incorporated in the rating, is the expectation that leverage levels will remain high over the rating horizon compared to the underlying asset value of the firm. Despite the company's highly leveraged balance sheet, Clear Channel possesses significant share, geographic diversity and leading market positions in most of the 150 markets in which the company operates. The credit also benefits from its 89% ownership stake in Clear Channel Outdoor (CCO) which is one of the largest outdoor media companies in the world, although it is not a guarantor to Clear Channel's debt. Its outdoor assets generate attractive EBITDA margins, good free cash flow, and are expected to benefit from digital billboards that offer higher revenue and EBITDA margins than static billboards. The company's strong positions in radio and outdoor and recent sales initiatives have allowed it to grow its national ad sales faster than many competitors in the industry. Clear Channel has also benefited from modest growth in the economy and improved operational performance which has lead to reduced debt to EBITDA levels which Moody's expects to continue going forward. However, Moody's expects that leverage levels will remain higher than the underlying asset value of the firm over the next several years and the company will remain poorly positioned to withstand another economic downturn in the future. The SGL-3 liquidity rating reflects the company's adequate liquidity profile. Clear Channel benefits from its $1.3 billion cash balance as of June 30, 2012 (which includes $492 million held at CCO) and the absence of any material near-term debt maturities (until 2014). Moody's expects the company to carry a smaller cash balance post the amendment given the greater flexibility to repay its term loan A facility early instead of being forced to apply any prepayments ratably to the term loan tranches. In addition, Clear Channel benefits from its Corporate Services Agreement with CCO that allows for free cash flow generated at CCO to be upstreamed to Clear Channel. There is a revolving promissory note due from Clear Channel to CCO of $712 million (as of 2nd quarter 2012) and Moody's expects this number to grow by about $300 million a year, subject to earnings at CCO. Moody's does not expect the shareholder litigation at CCO regarding the revolving promissory note to impact the credit, but it has the potential to weaken its liquidity profile. Clear Channel remains dependent on CCO for free cash flow. Clear Channel has a stub piece of $10 million remaining on its revolver after the revolver was permanently paid down in March 2012. The company also has an undrawn $625 million ABL revolver that matures in July 2014, but Moody's expects the company to look to extend the maturity date post the current amendment. The company has a substantial cushion under its secured leverage covenant of 9.5x (which excludes the senior notes at Clear Channel Worldwide Holdings, Inc ("CCW")). The current secured leverage metric, which is calculated net of cash, is 6.1x (as of 6/30/12 and defined by the terms of the credit agreement), down from 6.9x at the end of 2011 due largely to the dividend payment from CCO. This represents a cushion of 36% under the senior secured leverage covenant in the company's credit facility. The stable outlook reflects Moody's expectation for modest revenue and EBITDA growth in the mid to low single digits which will allow Clear Channel to delever to approximately 11x (excluding Moody's standard lease adjustments) by the end of 2013. The recent amendment allows the company flexibility to address its term loan A prior to its 2014 maturity and focus on extending or refinancing the remaining $10.1 billion of debt maturating in 2016. Prior to 2016, its maturity schedule is very manageable so Moody's doesn't foresee any near term issues for the company barring a material decline in the economy or a dramatic secular change in the radio industry. A sustained improvement in revenue, EBITDA, and free cash flow that led to a reduction in leverage levels to well under 10x with improved enterprise values could lead to an upgrade. A significant portion of the 2016 debt would also need to be refinanced so that the company was well positioned to address its debt maturity profile. The rating could be lowered if EBITDA were to materially decline due to economic weakness or if secular pressures in the radio industry escalate so that leverage increased back above 13x and valuations for the radio assets declined. Ratings would also be lowered if a default or debt restructuring is imminent due to inability to extend or refinance material amounts of the company's debt. The principal methodology used in rating Clear Channel was the Global Broadcast and Advertising Related Industry 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. Clear Channel Communications, Inc. with its headquarters in San Antonio, Texas, is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and for advertisers. The company's businesses include radio broadcasting and outdoor displays (via the company's 89% ownership of Clear Channel Outdoor Holdings Inc. ("CCO")). Clear Channel's consolidated revenue for LTM June 2012 was approximately $6.2 billion. CLEAR CHANNEL: S&P Rates $2BB Priority Guarantee Notes 'CCC+' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned Clear Channel Communications Inc.'s proposed $2 billion priority guarantee notes due 2019 an issue-level rating of 'CCC+' (the same level as the 'CCC+' corporate credit rating on the parent company) and a recovery rating of '4', indicating its expectation for average (30% to 50%) recovery in the event of a payment default. "In addition, we are affirming our 'CCC+' corporate credit rating on both the holding company, CC Media Holdings Inc., and operating subsidiary Clear Channel, which we view on a consolidated basis; the rating outlook is negative," said Standard & Poor's credit analyst Jeanne Shoesmith. "The CC Media Holdings Inc. reflects the company's steep debt leverage and significant 2016 debt maturities. The proposed transaction extends about $2 billion of debt from 2014 and 2016 to 2019 and reduces 2016 maturities from $12 billion to a little over $10 billion. However, the interest rate on the new debt is about 5% higher than the existing term loan B debt. As a result, we expect that EBITDA coverage of interest will be very thin at about 1.2x and that discretionary cash flow will be only modestly positive in 2013, hindering the company's ability to repay debt and afford additional refinancing transactions with similar interest rate increases. The transaction increases the company's flexibility to repay 2014 maturities (currently $1.5 billion), which previously could only be repaid on a pro rata basis, and now permits the company to exchange and extend $3 billion of additional loans. We still view a significant increase in the average cost of debt or deterioration in operating performance for either cyclical, structural, or competitive reasons, as major risks as the company proceeds with a strategy to deal with its 2016 maturities," S&P said. CLEAR CHANNEL: Bank Debt Trades at 17% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications, Inc., is a borrower traded in the secondary market at 82.66 cents-on-the-dollar during the week ended Friday, Oct. 12, an increase of 0.93 percentage points from the previous week, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 30, 2016, and carries Moody's 'Caa1' rating and Standard & Poor's 'CCC+' rating. The loan is one of the biggest gainers and losers among 199 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. For the six months ended June 30, 2012, the Company reported a net loss attributable to the Company of $182.65 million on $2.96 billion of revenue. Clear Channel reported a net loss of $302.09 million on $6.16 billion of revenue in 2011, compared with a net loss of $479.08 million on $5.86 billion of revenue in 2010. The Company had a net loss of $4.03 billion on $5.55 billion of revenue in 2009. The Company's balance sheet at June 30, 2012, showed $16.45 billion in total assets, $24.31 billion in total liabilities, and a $7.86 billion total share holders deficit. Bankruptcy Warning At March 31, 2012, the Company had $20.7 billion of total indebtedness outstanding. The Company said in its quarterly report for the period ended March 31, 2012, that its ability to restructure or refinance the debt will depend on the condition of the capital markets and the Company's financial condition at that time. Any refinancing of the Company's debt could be at higher interest rates and increase debt service obligations and may require the Company and its subsidiaries to comply with more onerous covenants, which could further restrict the Company's business operations. The terms of existing or future debt instruments may restrict the Company from adopting some of these alternatives. These alternative measures may not be successful and may not permit the Company or its subsidiaries to meet scheduled debt service obligations. If the Company and its subsidiaries cannot make scheduled payments on indebtedness, the Company or its subsidiaries, as applicable, will be in default under one or more of the debt agreements and, as a result the Company could be forced into bankruptcy or liquidation. * * * The Troubled Company Reporter said on Feb. 10, 2012, Fitch Ratings has affirmed the 'CCC' Issuer Default Rating of Clear Channel Communications, Inc., and the 'B' IDR of Clear Channel Worldwide Holdings, Inc., an indirect wholly owned subsidiary of Clear Channel Outdoor Holdings, Inc., Clear Channel's 89% owned outdoor advertising subsidiary. The Rating Outlook is Stable. Fitch's ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2014 and 2016; the considerable and growing interest burden that pressures free cash flow; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. COCOPAH NURSERIES: Hearing on Further Cash Use on Tuesday --------------------------------------------------------- Early this month, Judge Eileen W. Hollowell entered a third interim order that authorizes Cocopah Nurseries of Arizona Inc., et al., to use cash collateral until Oct. 16, 2012. The use of cash will be in accordance with a budget. There's a hearing on Oct. 16, at 2:30 p.m. to consider approval of the Debtors' request to further use of cash collateral. Wells Fargo Bank N.A. has opposed entry of the third interim order. Wells Fargo said the Debtor was unilaterally seeking to impose a five-week extension of the use of the bank's cash collateral without its consent. About Cocopah Nurseries Cocopah Nurseries of Arizona, Inc., and three affiliates sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on July 9, 2012. The affiliates are Wm. D. Young & Sons, Inc.; Cocopah Nurseries, Inc.; and William Dale Young & Sons Trucking and Nursery. Cocopah Nurseries is a Young-family owned agricultural enterprise with operations in Arizona and California. The core business involves the cultivation of palm trees and other trees used for landscaping purposes, as well as the associated farming of citrus, dates, and other crops. The Debtors presently own more than 250,000 palm trees in various stages of the tree-growth cycle. Cocopah has 250 full-time salaried employees, and taps an additional 50 to 250 contract laborers depending on the season. Revenue in 2010 was $23 million, down from $57 million in 2006. Judge Eileen W. Hollowell presides over the case. The Debtors' counsel are Craig D. Hansen, Esq., and Bradley A. Cosman, Esq., at Squire Sanders (US) LLP. The petitions were signed by Darl E. Young, authorized representative. Attorneys for Rabobank, N.A., are Robbin L. Itkin, Esq., and Emily C. Ma, Esq., at Steptoe & Johnson LLP, and S. Cary Forrester, Esq., at Forrester & Worth, PLLC. Non-debtor affiliate Jewel Date Company, Inc., is represented by Michael W. Carmel, Ltd., as counsel. COMMERCIAL MANAGEMENT: Can Use Cash Collateral Until Jan. 31 ------------------------------------------------------------ Brian F. Leonard, in his capacity as chapter 11 trustee of Commercial Management, LLC, early this month signed a cash collateral stipulation with the Debtor's secured creditor, U.S. Bank National Association. The stipulation signed Oct. 4 allows the Debtor to use cash collateral until Jan. 31, 2013, in accordance with a modified budget. The terms and conditions of the use of cash will be in accordance with the previous cash collateral order signed by the bankruptcy judge. U.S. Bank is represented by: John R. McDonald, Esq. Benjamin E. Gurstelle, Esq. BRIGGS AND MORGAN, P.A. 2200 IDS Center, 80 South Eighth Street Minneapolis, MN 55402-2157 Tel: (612) 977-8400 E-mail: jmcdonald@briggs.com About Commercial Management Commercial Management, LLC, owns a 410-unit apartment complex located in Richfield, Minn., under the trade name of Buena Vista Apartments. Buena Vista is 99% occupied and has approximately eight full time employees, and a small number of part-time employees. Buena Vista is managed by The Wirth Company. The appraised value of Buena Vista is $28 million. As of the Petition Date, secured creditor U.S. Bank claims the Debtor owes it $20.3 million. Commercial Management filed a Chapter 11 petition (Bankr. D. Minn. Case No. 12-42676) in its hometown in Minneapolis on May 2, 2012. Related entities that have pending bankruptcy cases are Jeffrey J. Wirth (Case No. 12-42368), Palmer Lake Plaza, LLC (Case No. 12-42266), Tomah Hospitality, LLC (Case No. 12-10894), and Tomah Hotel Properties, LLC (Case No. 12-10895). Judge Nancy C. Dreher presides over the case. Commercial Management tapped Neal L. Wolf and the law firm of Neal Wolf & Associates, LLC as bankruptcy counsel. The Debtor also hired the Law Offices of Neil P. Thompson, in Minneapolis, as local counsel. Brian F. Leonard, the Chapter 11 trustee, obtained approval from the U.S. Bankruptcy Court to employ David A. Lutz as special counsel. The Chapter 11 trustee's bankruptcy counsel can be reached at: Matthew R. Burton, Esq. LEONARD, O'BRIEN, SPENCER GALE & SAYRE, LTD. 100 South 5th Street, Suite 2500 Minneapolis, MN 55402 Tel: (612) 332-1030 COMMUNICATIONS CORP: S&P Affirms Prelim 'B' Corp. Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' preliminary corporate credit rating on Lafayette, La.-based TV broadcaster Communications Corp. of America. The rating outlook is stable. "At the same time, we assigned the company's proposed $157.5 million senior secured term loan B due 2018 a preliminary issue- level rating of 'B' (the same as the preliminary 'B' corporate credit rating), with a preliminary recovery rating of '3', indicating our expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default. We withdrew our preliminary 'B' issue-level rating and preliminary '4' recovery rating on the company's previously proposed first lien credit facility consisting of a $5 million revolving credit facility due 2017 and a $157.5 million senior secured term loan B due 2019," S&P said. "The company plans to issue $32.5 million of second-lien debt that will be held by its sponsor, Silver Point Capital (which we will not rate)," said Standard & Poor's credit analyst Daniel Haines. "It plans to use the proceeds of the financing to repay its existing debt, accrued interest, and transaction fees and expenses." "The preliminary 'B' corporate credit rating reflects our expectation that, despite high leverage, CCA will be able to maintain adequate liquidity over the intermediate term. We view the company's business risk profile as 'weak' (as per our criteria), given its high geographic and network affiliate concentration, its generally lower audience rankings within its served markets compared to peers, and the potential for advertising cyclicality. We view CCA's financial risk profile as 'highly leveraged,' based on its high pro forma debt-to-EBITDA of 6.9x (adjusted for operating leases and including one time charges)," S&P said. CONSOLIDATED FINANCE: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Consolidated Finance Corporation 620 Main Street P.O. Box 131 Delta, CO 81416-0131 Bankruptcy Case No.: 12-31027 Chapter 11 Petition Date: October 10, 2012 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Elizabeth E. Brown Debtor's Counsel: Charles G. Stewart, Esq. CHARLES G. STEWART, P.C. P.O. Box 1240 Paonia, CO 81428 Tel: (970) 527-5600 Fax: (970) 527-5601 E-mail: cstew@tds.net Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob12-31027.pdf The petition was signed by James L. Sukle, president. COPYTELE INC: To Issue Add'l 44.5 Million Shares to Employees ------------------------------------------------------------- Copytele, Inc., filed with the U.S. Securities and Exchange Commission a Form S-8 registration statement relating to an additional 3,000,000 shares of the Company's common stock, par value $0.01 per share, which may be offered and sold pursuant to the CopyTele, Inc. 2010 Share Incentive Plan, and 41,500,000 shares of common stock which may be offered and sold pursuant to Time Based Stock Option Agreements between the Company and each of Robert A. Berman, John Roop, Dr. Amit Kumar, Lewis H. Titterton Jr. and Kent B. Williams and Performance Based Stock Option Agreements between the Company and each of Robert A. Berman, John Roop and Dr. Amit Kumar. A copy of the filing is available for free at http://is.gd/Fnt4pn About CopyTele Melville, N.Y.-based CopyTele, Inc.'s principal operations include the development, production and marketing of thin flat display technologies, including low-voltage phosphor color displays and low-power passive E-Paper(R) displays, and the development, production and marketing of multi-functional encryption products that provide information security for domestic and international users over several communications media. The Company's balance sheet at July 31, 2012, showed $5.9 million in total assets, $6.8 million in total liabilities, and a shareholders' deficit of $893,071. According to the Company's quarterly report for the period ended July 31, 2012, based on information presently available, the Company does not believe that its existing cash, cash equivalents, and investments in certificates of deposit, together with cash flows from expected sales of its encryption products and revenue relating to its display technologies, and other potential sources of cash flows or necessary expense reductions including employee compensation, will be sufficient to enable it to continue its marketing, production, and research and development activities for 12 months from the end of this reporting period. "Accordingly, there is substantial doubt about our ability to continue as a going concern. CROATAN SURF: Wants to Sell 35 Condominium Units to View LLC ------------------------------------------------------------ Croatan Surf Club, LLC, asks the U.S. Bankruptcy Court for the Eastern District of North Carolina for permission to sell its 35 condominium units in the 36-unit residential condominium project known as the Croatan Surf Club and located in Kill Devil Hills, Dare County, North Carolina, including all furniture, fixtures, equipment and other personal property located on or associated with the units. The sale of the property to View LLC is in lieu of foreclosure of the deed of trust securing the RBA loan and the EFP Loan. The Court valued the property, including the Debtor's cash on hand and adequate protection payments held in escrow, at $19,148,655. RBA has an allowed secured claim in the amount of $18,008,562. The Debtor's property secures loans to, among others, Royal Bank of America and Edwards Family Partnership, LP. For the development of the property, RBA agreed to extend a loan of $17 million to the Debtor on a senior secured basis pursuant to a loan and security agreement between RBA and the Debtor on December 2007 RBA took a first priority security interest in the property, together with other assets of the Debtor. Edwards Family provided $3 million in additional mezzanine financing to the development. A copy of the sale motion is available for free at http://bankrupt.com/misc/CROATANSURF_sale.pdf The 9019 Order On June 28, 2012, the Court entered an order pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure approving a settlement of an adversary proceeding commenced on May 10, 2010, against RBA and Bank of Currituck, now known as Curritick Resolution Properties, Inc., in the North Carolina General Court of Justice, Senior Court Division. As contemplated by the 9019 Order, RBA and EFP entered into a Mortgage Loan Sale Agreement dated May 31, 2012, pursuant to which EFP or its designee agreed to purchase from RBA all right, title and interest in and to the RBA Loan. EFP assigned all of its interest in the Mortgage Loan Sale Agreement to View, L.L.C., a Delaware limited liability company wholly owned by EFP, and on June 29, 2012, View LLC purchased all right, title and interest in and to the RBA Loan from RBA pursuant to the Mortgage Loan Sale Agreement. View LLC is the current holder of the note and other loan documents evidencing and securing the RBA Loan, and has filed a Transfer of Claim in the bankruptcy proceeding. All Consummation Events contemplated by the 9019 Order have occurred, including, without limitation, the execution and delivery of the RBA Settlement Agreement, the Lender Releases, and the EFP Settlement Agreement, and the payment to the Debtor of the Release Payment. After the closing of the Mortgage Loan Sale Agreement, the Debtor paid KDHWTTP, LLC's Sewer Claim of $10,566 in full. The Debtor, the Guarantors, RBA and CRP have filed a Stipulation of dismissal with prejudice of the adversary proceeding About Croatan Surf Club Croatan Surf Club, LLC owns a 36-unit condominium complex in Kill Devil Hills, North Carolina. It filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 11-00194) on Jan. 10, 2011. Walter L. Hinson, Esq., at Hinson & Rhyne, P.A., in Wilson, N.C., serve as counsel to the Debtor. Kevin J. Silverang, Esq., and Philip S. Rosenzweig, Esq., at Silverang & Donohoe, LLC, in St. Davids, Pa., serve as co-counsel to the Debtor. No creditors committee has been formed in the case. In its schedules, the Debtor disclosed $26,151,718 in assets and $19,350,000 in liabilities. CSD LLC: Owner of Casa de Shenandoah Ranch Files Chapter 11 ----------------------------------------------------------- Tim O'Reily at Las Vegas Review-Journal reports that CSD LLC was placed on Oct. 12, 2012, in Chapter 11 bankruptcy after months of legal and internal bickering among the owners. CSD LLC is the entity that purchased entertainer Wayne Newton's Casa de Shenandoah ranch, a 37.8-acre property, in June 2010 and began renovating it into a Graceland in the desert. According to the report, court papers detailed that a loan for a maximum $2.5 million has been lined up to cover bills as utilities incurred during the case. The loan is subject to approval by U.S. Bankruptcy Court Judge Bruce Markell. The lender is as Neva Lane Acceptance LLC, an entity controlled by Texas businessman and CSD majority owner Lacy Harber that provided $2 million in financing for the project since June. The report relates Grant Lyon, hired Oct. 4 as CSD's chief restructuring officer, said in an affidavit that the plan calls for putting the Casa de Shenandoah through a "controlled auction," concluding in a final reorganization plan within six months. Whatever is left at that time after paying creditors would be distributed to the owners, said Mr. Lyon, a managing partner of Odyssey Capital Group LLC in Phoenix. The report notes CSD, through intermediate entities, is 70% owned by Lacy Harber and his wife, Dorothy; 20% by Mr. Newton and his wife, Kathleen; and 10% by project manager Steve Kennedy and former girlfriend Geneva Clark. The report adds the initial bankruptcy court papers put the aggregate debt at $10 million to $50 million, but did not give details. According to the report, Neva Lane is owed $2.2 million, with another $1 million for leased equipment from Wells Fargo Equipment Finance and $210,000 for legal bills from Lionel, Sawyer & Collins, which represented CSD in a Clark County District Court litigation. The report says, by contrast, the papers place the value at $50 million to $100 million. The report relates, in the state court case, filed in May, Mr. Newton attorneys fought the earlier Neva loans as laying the groundwork to squeeze the Newtons off the property. The report relates Ms. Harber said he had grown tired of the ongoing disputes, which put Clark County District Judge Elizabeth Gonzalez in the position of having to decide such mundane details as whether to build a fence around an electrical box, whether the fence should have a gate and how Newton's Arabian horses should rotate their grazing among the property's six pastures. The report notes Ms. Harber paid $19.5 million for the property in June 2010, then completely owned by the Newtons, and has invested a total of $63.5 million into the project, including purchasing adjacent property, cleanup and some construction. Court papers say the total investment is somewhat less than $60 million. According to the report, the idea of creating a theme park based on Mr. Newton's longtime career as a Strip headliner drew opposition when it was proposed in mid-2010 from neighbors, who did not want a commercial venture in an affluent residential area. The report says the plan still won approval from the county, but then degenerated into ongoing arguments between the Newtons and Kennedy. CONNAUGHT GROUP: Wins Confirmation of Liquidating Plan ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Connaught Group Ltd. sold its assets in April and received the bankruptcy court's blessing for a Chapter 11 plan advertised as paying unsecured creditors as much as 64%. According to the report, unsecured claims were projected to total as much as $20 million. A joint venture between Royal Spirit Group and Tom James Co. bought the business for $20 million in cash and took over the lease for the headquarters on West 55th Street in Manhattan. Royal Spirit, a non-insider with the largest claim, waived a $5.4 million claim. Secured claims were paid when the sale was completed. As reported by the Trouble Company Reporter, Connaught Group filed a Chapter 11 plan in June that could pay unsecured creditors 55% or more. The disclosure statement stated the recovery for unsecured creditors will range between 21% and 55%. The recovery could be higher still if lawsuits are victorious. The Bloomberg report relates that Connaught's liabilities of the New York-based company included $12.4 million in secured debt owing to JPMorgan Chase Bank NA and Citibank NA. The owner and designer, William D. Rondina, claimed to be owed $31.4 million on unsecured notes. The creditors are objecting to Rondina's claim. If the objection fails, the recovery by unsecured creditors would be lower, according to the disclosure statement. About Connaught Group The Connaught Group, Ltd. and four of its affiliates, Limited Editions for Her of Nevada LLC; Limited Editions for Her of Branson LLC; Limited Editions for Her LLC; and WDR Retail Corp. filed separate Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-10512) on Feb. 9, 2012. New York-based Connaught Group designs and has manufactured high- end women's wear and then sells the finished clothing through an innovative sales system outside the normal retail chain originally created in 1981 by the Debtors' founder and iconic designer, William D. Rondina. The Company's sales are made primarily through independent contractors who sell the clothing to their own clients in private showings. Through the Wardrobe Consultants, the Debtors are able to offer the personalized service and attention to detail absent from the conventional shopping experience. As of the Petition Date, the Debtors are affiliated with more than 1,300 Wardrobe Consultants. The Debtors also operate 10 outlet stores throughout the country, but the Debtors primarily only sell last season's clothing and other merchandise to be liquidated at these stores. A non-debtor Canadian subsidiary, The Connaught Group ULC, sells the Debtors' clothing in eight outlet stores in Canada. Three of the Canadian stores are leased by The Connaught Group, Ltd. Judge Stuart M. Bernstein presides over the case. David L. Barrack, Esq., Paul Jacobs, Esq., and Warren J. Nimetz, Esq., at Fulbright & Jaworski L.L.P., serve as the Debtors' counsel. Maury Satin at Zygote Associates serves as the CRO. Richter Consulting acts as financial advisor and Consensus Advisory Services and Consensus Securities LLC serve as financial advisors, consultants and investment bankers. Kurtzman Carson Consultants LLC serves as administrative agent, and claims and noticing agent. JPMorgan Chase is represented in the case by Andrew C. Gold, Esq., at Herrick, Feinstein LL. Citibank is represented by Boris I. Mankovetskiy, Esq., at Sills Cummis & Gross P.C. The Official Committee of Unsecured Creditors is represented by Lowenstein Sandler, PC. The Connaught Group disclosed $50,644,694 in assets and $61,303,340 in liabilities. Limited Editions for Her LLC disclosed $3,339,174 in assets and $15,888,714 in liabilities. Limited Editions for Her of Nevada LLC disclosed $979,926 in assets and $12,395,949 in liabilities. Limited Editions for Her of Branson LLC disclosed $3,339,174 in assets and $15,888,714 in liabilities. WDR Retail Corp. disclosed $0 in assets and $12,395,949 in liabilities. Connaught Group Limited was the 100% shareholder of each of LEFH Nevada, LEFH Branson, LEFH, and WDR. CYCLONE POWER: Registers 15 Million Common Shares with SEC ---------------------------------------------------------- Cyclone Power Technologies, Inc., filed with the U.S. Securities and Exchange Commission a Form S-1 registration statement relating to the offer and sale of up to 10,000,000 shares of common stock, par value $.0001 per share, of Cyclone Power Technologies, Inc., by GEM Global Yield Fund Limited. This prospectus also relates to the offer and sale of up 5,000,000 common shares that are issuable to the Selling Shareholder upon exercise of common stock purchase warrants. The conversion price of the Warrants is $0.27 per share subject to price adjustment, as set forth in the Warrant Agreement. The Company will sell the Common Shares to the Selling Shareholder from time to time, if and when the Company deems appropriate, pursuant to a Common Stock Purchase Agreement. The Selling Shareholder has committed to purchasing up to $2,500,000 worth of the Company's Common Stock before Sept. 30, 2014, pursuant to the terms and conditions contained in the Purchase Agreement. The purchase price for those Common Shares will be equal to 90% of the weighted average closing price for the Company's Common Shares, as listed on the OTCQB Electronic Marketplace or any other exchange or market that the Common Stock is then listed, during a 10 trading day pricing period, subject to certain "knock-out" and volume limitation provisions set forth in the Purchase Agreement. The 10,000,000 Common Shares included in this prospectus represent a portion of the Common Shares potentially issuable to the Selling Shareholder under the Purchase Agreement. The Company will not receive any proceeds from the sale of these Common Shares offered by the Selling Shareholder. However, the Company will receive proceeds from the sale of the Company's Common Shares under the Purchase Agreement and upon exercise of the Warrants for cash. The proceeds will be used for working capital or general corporate purposes. The Company will bear all costs associated with this registration. The Company's Common Shares are quoted on the OTCQB Electronic Marketplace under the symbol "CYPW." The last reported sale price of the Company's common shares on Oct. 1, 2012, was $0.125 per share. These prices will fluctuate based on the demand for the Company's common stock. A copy of the Form S-1 prospectus is available for free at: http://is.gd/Z2AAKk About Cyclone Power Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink Sheets: CYPW) is a clean-tech engineering company, whose business is to develop, commercialize and license its patented Rankine cycle engine technology for applications ranging from renewable power generation to transportation. The Company is the successor entity to the business of Cyclone Technologies LLLP, a limited liability limited partnership formed in Florida in June 2004. Cyclone Technologies LLLP was the original developer and intellectual property holder of the Cyclone engine technology. The Company reported a net loss of $23.70 million in 2011, compared with a net loss of $2.02 million in 2010. The Company's balance sheet at June 30, 2012, showed $1.68 million in total assets, $3.79 million in total liabilities and a $2.11 million total stockholders' deficit. In its audit report for the year ended Dec. 31, 2011, results, Mallah Furman, in Fort Lauderdale, FL, noted that the Company's dependence on outside financing, lack of sufficient working capital, and recurring losses raises substantial doubt about its ability to continue as a going concern. CYPRESS HEALTH: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Cypress Health Systems Florida, Inc. dba Tri County Hospital - Williston fdba Nature Coast Regional Hospital 125 SW 7th Street Williston, FL 32696 Bankruptcy Case No.: 12-10431 Chapter 11 Petition Date: October 5, 2012 Court: U.S. Bankruptcy Court Northern District of Florida (Gainesville) Debtor's Counsel: Elena Paras Ketchum, Esq. STICHTER, RIEDEL, BLAIN & PROSSER, P.A. 110 E. Madison Street, Suite 200 Tampa, FL 33602 Tel: (813) 229-0144 Fax: (813) 229-1811 E-mail: eketchum.ecf@srbp.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flnb12-10431.pdf The petition was signed by Jerry E. Gillman, president. DAYBREAK OIL: Had $257,400 Net Loss in Aug. 31 Quarter ------------------------------------------------------ Daybreak Oil and Gas Company, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $257,422 on $249,149 of oil and gas sales for the three months ended Aug. 31, 2012, compared with a net loss of $259,482 on $331,684 of oil and gas sales for the three months ended Aug. 31, 2011. For the six months ended Aug. 31, 2012, the Company had a net loss of $552,132 on $512,122 of oil and gas sales, compared with a net loss of $413,928 on $712,041 of oil and gas sales for the same period of 2011. The Company's balance sheet at Aug. 31, 2012, showed $3.1 million in total assets, $4.9 million in total liabilities, and a stockholders' deficit of $1.8 million. The Company has incurred net losses since entering the oil and gas exploration industry, and, as of Aug. 31, 2012, has an accumulated deficit of $24.4 million and a working capital deficit of $3.7 million. A copy of the Form 10-Q is available at http://is.gd/2hP3Oz Spokane, Washington-based Daybreak Oil and Gas Company, Inc., is an independent oil and natural gas exploration, development and production company. Currently, the Company's core area of activity is located in Kern County, California * * * As reported in the TCR on June 1, 2012, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Daybreak Oil's ability to continue as a going concern, following its audit of the Company's financial position and results of operations for the fiscal year ended Feb. 29, 2012. The independent auditors noted that the Company suffered losses from operations and has negative operating cash flows. DAYBREAK OIL: Incurs $257,000 Net Loss in Aug. 31 Quarter --------------------------------------------------------- Daybreak Oil and Gas, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $257,422 on $249,149 of oil and gas sales for the three months ended Aug. 31, 2012, compared with a net loss of $259,482 on $331,684 of oil and gas sales for the same period during the prior year. The Company reported a net loss of $552,132 on $512,122 of oil and gas sales for the six months ended Aug. 31, 2012, compared with a net loss of $413,928 on $712,041 of oil and gas sales for the same period a year ago. The Company's balance sheet at Aug. 31, 2012, showed $3.07 million in total assets, $4.86 million in total liabilities and a $1.79 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/esp4Pl About Daybreak Oil Daybreak Oil and Gas, Inc. is an independent oil and natural gas exploration, development and production company. The Company is headquartered in Spokane, Washington and has an operations office in Friendswood, Texas. The Company's common stock is quoted on the OTC Bulletin Board market under the symbol DBRM.OB. Daybreak has over 20,000 acres under lease in the San Joaquin Valley of California. The Company reported a net loss of $1.43 million on $1.31 million of oil and gas sales for the year ended Feb. 29, 2012, compared with a net loss of $1.21 million on $1.07 million of oil and gas sales for the year ended Feb. 28, 2011. MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification on the financial statements for the year ended Feb. 29, 2012, citing losses from operations and negative operating cash flows, which raise substantial doubt about the Company's ability to continue as a going concern. DELPHI CORP: Two Johnson Controls Admin. Claims Disallowed ---------------------------------------------------------- The Bankruptcy Court approved a stipulation between Reorganized Delphi and Johnson Controls Inc. and its affiliates for the disallowance without prejudice of Administrative Expense Claim Nos. 18719 and 18720 filed by JCI against Delphi's bankruptcy estate. In 2006, Delphi Automotive Systems LLC or DAS LLC entered into an agreement for the transfer of Delphi's New Brunswick Battery Facility to JCI, with JCI to sell the facility to Johnson Controls Battery Group, Inc. Under the deal, Delphi agreed, among other things, to indemnify JCI and JCBGI against damages, loss and expenses resulting from any breach by DAS LLC of covenants under the Transfer Agreement; and to indemnify JCI against environmental damages arising from pre-closing contamination of the Facility. Delphi also agreed to conduct investigation and remediation of the New Brunswick Property and related regulations, including the establishment of a remediation funding source. By July 2009, two claims were filed: * JCI filed Claim No. 18719 asserting an administrative claim for $10,148,941, plus oversight costs of the New Jersey Department of Environmental Protection (NJDEP) related to indemnification and statutory claims for environmental contamination of the New Brunswick Property. * JCBGI filed Claim No. 18720 asserting an administrative claim for $13,058,705 plus oversight costs of the NJDEP related to indemnification and statutory claims for environmental contamination of the New Brunswick Property. In 2010, the Debtors objected to the Claims in their 46th Omnibus Claims Objection and JCI has filed a response to the Objection. In 2011, JCBGI sold the New Brunswick Property to DeNovo New Brunswick LLC. DeNovo assumed all liabilities and obligations as new owner and provided JCBGI a broad indemnification from future liabilities related to the New Brunswick Property. In August 2012, the Reorganized Debtors submitted a supplemental reply to the Claimants' responses. The Reorganized Debtors sought entry of an order disallowing Claim Nos. 18719 and 18720. They assert that their books and records don't account for the Claims. Subsequently, to resolve their dispute, the Reorganized Debtors and the JCI Entities agree that Claim Nos. 18719 and 18720 are disallowed without prejudice to JCI's right to seek reconsideration in the event that (a) DeNovo either refuses or is unable to perform its obligations under the Sale Agreement, (b) the Remediation Trust is exhausted; or (c) either of the Claimants has received a claim from a third party which seeks contribution toward or recovery of costs incurred for investigation or remediation of the New Brunswick Property, provided that the Reorganized Debtors will have the right to challenge any such request for reconsideration not inconsistent with the Transfer Agreement. The Claimants' Responses are also withdrawn with prejudice. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation DELPHI CORP: Four Methode Electronics Claims Disallowed ------------------------------------------------------- Reorganized Delphi entered into a Court-approved stipulation with Methode Electronics, Inc., and its subsidiary, Automotive Safety Technologies, Inc., for the expungement of Claim Nos. 4573, 16194, 19959 and 19951. Claim No. 16194 was filed in August 2006, asserting a secured claim for $2,939,137, and an unsecured non-priority claim for $4,032,067. The Claimant alleged it was owed on account of goods it supplied to the Debtors from Oct. 30, 2001, through Oct. 8, 2005. Claim No. 16194 was filed as an amendment to Claim No. 4573, which the Claimant's subsidiary filed in May 2006. In November 2009, the Claimant filed Administrative Expense Claim Nos. 19950 and 19951 for liabilities in connection with the August/September 2008 supply agreement between Delphi Automotive Systems LLC and Claimant and liabilities associated with Claimant's claim of patent infringement. In September 2012, the parties agree that all of the Claims are deemed disallowed in their entirety, without any award of costs or attorneys' fees to any party. Pursuant to the terms of the Settlement Agreement, the mediator Layn R. Phillips will resolve any disputes that arise out of the finalization of the settlement or in connection with the Stipulation. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Delphi Automotive PLC is UK-based company formed in May 2011 as a holding company for US-based automotive parts manufacturer Delphi Automotive LLP. Delphi Automotive LLP is the successor to the former Delphi Corporation. At the time of its formation, Delphi Automotive PLC filed an initial public offering seeking to raise at least $100 million. Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000). DELPHI CORP: Parties Agree on Excluded Claims in Ace Complaint -------------------------------------------------------------- Reorganized Delphi entered into a stipulation with James Michael Grai and certain other workers' compensation claimants; ACE American Insurance Company, Pacific Employers Insurance Company -- the ACE Companies; and General Motors Company for the identification of claims that are not related subject insurance policies. The stipulation has been approved by the Bankruptcy Court. On Jan. 28, 2010, the U.S. Bankruptcy Court for the Southern District of New York granted the Joint Motion of the State of Michigan Workers' Compensation Agency and Funds Administration to Stay Order and Adversary Proceeding Pending Appeal in the complaint captioned ACE American Ins. Co. v. Delphi Corp. (In re DPH Holdings Corp.), Adversary Proceeding No. 09-01510 (RDD). On Sept. 14, 2011, Mr. Grai filed a letter with the Court, requesting that the Court lift the automatic stay to permit the Michigan Workers' Compensation Agency and/or the Michigan Funds Administration -- the Michigan Defendants -- to disburse workers' compensation benefits to Mr. Grai and other former employees of the Debtors. On Oct. 20, 2011, Mr. Grai filed a Motion for a Modification of the Automatic Stay and a Notice of Motion for Joinder of Parties. The next day, on October 21, Mr. Grai filed an Amended Motion for a Modification of the Automatic Stay and an Amended Motion for Joinder of Parties. The ACE Companies' potential liability for certain workers' compensation claims under certain insurance policies is the subject of the Adversary Proceeding. On Aug. 10, 2012, the Court granted in part and denied in part the Plaintiffs' Emergency Motion in the Adversary Proceeding for an Injunctive Order. To resolve the Letter, the Motions, and the Amended Motions, the parties to the Stipulation have identified three categories of workers' compensation claims which do not implicate the subject Insurance Policies, the automatic stay, any provision of the Debtors' Modified Chapter 11 Plan or any prior order of the Court, and which can and should be allowed to proceed in the appropriate state tribunal. The categories are: * Claims that do not implicate the Reorganized Debtors -- the "Non-DPH Claims" * Claims that have been assumed by GM -- the "GM Assumed Claims" * Claims that fall outside of the dates of coverage of the Policies -- the "Date Excluded Claims" Lists of the Non-DPH Claims, GM Assumed Claims and Date Excluded Claims are available at: http://bankrupt.com/misc/DELPHI_nonDPHclaimsetal.pdf Accordingly, the Reorganized Debtors, Mr. Grai, the ACE Companies, and GM agree on these terms: 1. The Letter, the Motions, and the Amended Motions are withdrawn without prejudice. 2. Each of the Non-DPH Claims, the GM Assumed Claims, and the Date Excluded Claims do not implicate the Policies and may proceed in the appropriate state tribunal. 3. Prior to proceeding in a Michigan tribunal, the applicable claimant must sign a notarized acknowledgement. No claimant may proceed unless he or she delivers the Acknowledgement to: * Counsel to the Reorganized Debtors SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Attn: John K. Lyons, Esq. john.lyons@skadden.com Albert L. Hogan, III, Esq. al.hogan@skadden.com Louis S. Chiappetta, Esq. louis.chiappetta@skadden.com * Counsel to the ACE Companies DUANE MORRIS LLP Attn: Lewis R. Olshin, Esq. olshin@duanemorris.com William C. Heuer, Esq. wheuer@duanemorris.com Nothing in the Stipulation is intended to adjudicate the merits of any workers' compensation claim or to determine any claimant's entitlement to relief. The parties reserve all defenses they may have with respect to any workers' compensation claim that is allowed to proceed under the terms of the Stipulation. In the event the potential liability of any of the ACE Companies or any of the Reorganized Debtors is implicated in any proceeding that is permitted to go forward, the applicable claimant will take all actions necessary to obtain an adjournment of such proceeding. For the avoidance of doubt, the applicable claimant will not seek to collect from the Policies, assert or argue that the Policies provide coverage for the claimant's claim, or otherwise implicate the Policies in any manner in the Michigan tribunals with respect to the Non-DPH Claims, the GM Assumed Claims, and the Date Excluded Claims. Attorney for General Motors Company is: Michael A. Gruskin, Esq. General Motors Company Commercial and Product Litigation Division 300 GM Renaissance Center P.O. Box Mail Code 482-C39-B40 Detroit, MI Attorneys for ACE Companies are: William C. Heuer, Esq. Wendy M. Simkulak, Esq. DUANE MORRIS LLP 1540 Broadway, 14th Floor New York, NY 10036-4086 Email: WMSimkulak@duanemorris.com -- and -- Lewis R. Olshin, Esq. Margery N. Reed, Esq. DUANE MORRIS LLP 30 South 17th Street Philadelphia, PA 19103-4196 Email: MReed@duanemorris.com About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Delphi Automotive PLC is UK-based company formed in May 2011 as a holding company for US-based automotive parts manufacturer Delphi Automotive LLP. Delphi Automotive LLP is the successor to the former Delphi Corporation. At the time of its formation, Delphi Automotive PLC filed an initial public offering seeking to raise at least $100 million. Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000). DELPHI CORP: Stipulation Allowing Steere's General Unsecured Claim ----------------------------------------------------------------- DPH Holdings Corp. and its reorganized affiliates entered into a stipulation, later approved by the Bankruptcy Court, with Steere Enterprises, Inc., to resolve an adversary proceeding over certain transfers. The parties agree that Steere will receive an allowed general unsecured non-priority claim against DPH-DAS LLC in an amount agreed under a settlement deal. About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Delphi Automotive PLC is UK-based company formed in May 2011 as a holding company for US-based automotive parts manufacturer Delphi Automotive LLP. Delphi Automotive LLP is the successor to the former Delphi Corporation. At the time of its formation, Delphi Automotive PLC filed an initial public offering seeking to raise at least $100 million. Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000). DELPHI CORP: 2nd Cir. Vacates Orders on Longacre-ATS Suit --------------------------------------------------------- A three-judge appellate panel last month vacated lower court orders on three counts of breach of contract and indemnification charges in the lawsuit captioned LONGACRE MASTER FUND, LTD., LONGACRE CAPITAL PARTNERS (QP) L.P., Plaintiffs-Appellants, v. ATS AUTOMATION TOOLING SYSTEMS INC., Defendant-Appellee, Case No. 11-3413-cv (2nd Cir.). The charges are remanded to the lower court for further proceedings. The case involves a bankruptcy claim nominally worth about $2 million that ATS Automation sold to Longacre Master Fund, Ltd. and Longacre Capital Partners (QP) L.P. Longacre purchased the claim in 2006 for nearly its full nominal value, but upon the 2008 crisis, Debtor Delphi Automotive Systems was unable to pay the full amount. In the lawsuit, Longacre claims a contractual right to several years' interest on the purchase price based on an objection that Delphi filed against the claim during the course of its bankruptcy proceedings. Longacre's complaint alleged seven counts of breach of contract and indemnification, but the appeal involves only Counts One, Six and Seven. In an August 2011 order, a New York district court ruled in favor of ATS Automation on the three charges. In its Sept. 14, 2012 decision, the U.S. Court of Appeals for the Second Circuit held that the pendency of Delphi's objection limited Longacre's ability to transfer or obtain payment on the claim. It also pointed out that an "objection" need not have been meritorious for it to constitute an "impairment" in the parties' claim purchase agreement. The Second Circuit further opined that Longacre has shown a material issue of fact as to ATS' knowledge of a possible preference action and related objection. A copy of the Second Circuit's Sept. 14, 2012 Summary Order is available at http://is.gd/HwE6TRfrom Leagle.com. The appellate panel consists of Circuit Judges Jose A. Cabranes, Chester J. Straub and Peter W. Hall. Longacre is represented by: MARTIN EISENBERG, Law Offices of Martin Eisenberg White Plains, NY ATS Automation is represented by: Robert D. Gordon, Esq. Evan J. Feldman, Esq. CLARK HILL, PLC Birmingham, MI Email: rgordon@clarkhill.com efeldman@clarkhill.com - and - Christopher J. Battaglia, Esq. Neal W. Cohen, Esq. HALPERIN BATTAGLIA RAICHT, LLP New York, NY Email: cbattaglia@halperinlaw.net ncohen@halperinlaw.net About Delphi Corp. Based in Troy, Michigan, Delphi Corporation -- http://www.delphi.com/-- is a global supplier of electronics and technologies for automotive, commercial vehicle and other market segments. Delphi operates major technical centers, manufacturing sites and customer support facilities in 30 countries. The Company filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 05-44481) on Oct. 8, 2005. John Wm. Butler Jr., Esq., John K. Lyons, Esq., and Ron E. Meisler, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Robert J. Rosenberg, Esq., Mitchell A. Seider, Esq., and Mark A. Broude, Esq., at Latham & Watkins LLP, represented the Official Committee of Unsecured Creditors. As of June 30, 2008, the Debtors' balance sheet showed US$9,162,000,000 in total assets and US$23,742,000,000 in total debts. The Court confirmed Delphi's plan on Jan. 25, 2008. The Plan was not consummated after a group led by Appaloosa Management, L.P., backed out from their proposal to provide US$2,550,000,000 in equity financing to Delphi. At the end of July 2009, Delphi obtained confirmation of a revised plan, build upon a sale of the assets to a entity formed by some of the lenders who provided $4 billion of debtor-in-possession financing, and General Motors Company. On Oct. 6, 2009, Delphi's Chapter 11 plan of reorganization became effective. A Master Disposition Agreement executed among Delphi Corporation, Motors Liquidation Company, General Motors Company, GM Components Holdings LLC, and DIP Holdco 3, LLC, divides Delphi's business among three separate parties -- DPH Holdings LLC, GM Components, and DIP Holdco 3. Delphi emerged from Chapter 11 as DPH Holdings. DPH Holdings is responsible for the post-Effective Date administration and eventual closing of the Chapter 11 cases as well as the disposition of certain retained assets and payment of certain retained liabilities as provided under the Modified Plan. Delphi Automotive PLC is UK-based company formed in May 2011 as a holding company for US-based automotive parts manufacturer Delphi Automotive LLP. Delphi Automotive LLP is the successor to the former Delphi Corporation. At the time of its formation, Delphi Automotive PLC filed an initial public offering seeking to raise at least $100 million. Bankruptcy Creditors' Service, Inc., publishes DELPHI BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceedings of Delphi Corp. and its debtor-affiliates (http://bankrupt.com/newsstand/or 215/945-7000). DEWEY & LEBOEUF: May Pay Bonuses to Employees Rodriguez and Sucoff ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Dewey & Leboeuf to pay bonuses to these key wind-down employees (i) $50,000 for Director of Billing, Lourdes Rodriquez; and (ii) $5,000 for Collections Manager, Lisa Sucoff. Prior to the hearing, the Debtor withdrew its motion to pay a bonus of $165,000 for Director of Finance, Francis Canellas. 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. DEWEY & LEBOEUF: FPC to Appeal Order Approving PCP -------------------------------------------------- The Official Committee of Former Partners appointed in the Chapter 11 case of Dewey & Leboeuf LLP has appealed the U.S. Bankruptcy Court of Southern New York's memorandum opinion and order approving the Partner Contribution Settlement Agreements and mutual releases for participating partners and denying the Ad Hoc Committee of Retired Partners to appoint an examiner. As reported in the TCR on Oct. 10, 2012, the Bankruptcy Court approved on Tuesday the Debtor's proposed $71.5 million clawback deal with former partners. 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. DEWEY & LEBOEUF: Has New Address at 1271 Avenue of the Americas --------------------------------------------------------------- Dewey & LeBoeuf LLP serves notice that effective Nov. 1, 2012, its address will be 1271 Avenue of the Americas, Suite 4300, New York, New York 10020. Dewey's main telephone number (212) 259-8000 and facsimile number (212) 632-0326 will remain the same. 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. DEX MEDIA EAST: Bank Debt Trades at 37% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media East LLC is a borrower traded in the secondary market at 63.21 cents-on- the-dollar during the week ended Friday, Oct. 12, an increase of 0.21 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014. The loan is one of the biggest gainers and losers among 199 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About R.H. Donnelley & Dex Media East Dex One, headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-11852) on May 28, 2009. They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. Dex One reported a net loss of $518.96 million in 2011 compared with a net loss of $923.59 million for the eleven months ended Dec. 31, 2010. * * * As reported in the April 2, 2012 edition of the TCR, Moody's Investors Service has downgraded the corporate family rating (CFR) for Dex One Corporation's to Caa3 from B3 based on Moody's view that a debt restructuring is inevitable. Moody's has also changed Dex's Probability of Default Rating (PDR) to Ca/LD from B3 following the company's purchase of about $142 million of par value bank debt for about $70 million in cash. The Caa3 rating also reflects Moody's view that additional exchanges at a discount are likely in the future since the company amended its bank covenants to make it possible to repurchase additional bank debt on the open market through the end of 2013. As reported by the TCR on April 4, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Cary, N.C.-based Dex One Corp. and related entities to 'CCC' from 'SD' (selective default). "The upgrade reflects our assessment of the company's credit profile after the completion of the subpar repurchase transaction in light of upcoming maturities, future subpar repurchases, and our expectation of a continued week operating outlook," explained Standard & Poor's credit analyst Chris Valentine. DEX MEDIA WEST: Bank Debt Trades at 35% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media West LLC is a borrower traded in the secondary market at 65.21 cents-on- the-dollar during the week ended Friday, Oct. 12, a drop of 0.29 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014, and carries Moody's Caa3 rating and Standard & Poor's D rating. The loan is one of the biggest gainers and losers among 199 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About R.H. Donnelley & Dex Media Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc., and Local Launch, Inc., are the company's only direct wholly owned subsidiaries. Dex Media East LLC is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media, Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09- 11852) on May 28, 2009, after missing a $55 million interest payment on its senior unsecured notes. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, represented the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, served as the Debtors' local counsel. The Debtors' financial advisor was Deloitte Financial Advisory Services LLP while its investment banker was Lazard Freres & Co. LLC. The Garden City Group, Inc., served as claims and noticing agent. The Official Committee of Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen O'Connor as Delaware bankruptcy co-counsel, J.H. Cohn LLP as its financial advisor and forensic accountant, and The Blackstone Group, LP, as its financial and restructuring advisor. The Debtors emerged from Chapter 11 bankruptcy proceedings at the end of January 2010. * * * In early April 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Cary, N.C.-based Dex One Corp. and related entities to 'CCC' from 'SD' (selective default). The rating outlook is negative. "At the same time, we affirmed our issue-level rating on Dex Media East Inc.'s $672 million outstanding term loan, Dex Media West Inc.'s $594 million outstanding term loan, and R.H. Donnelley Inc.'s $866 million outstanding term loan due 2014 at 'D'. The recovery rating on these loans remains at '5', indicating our expectation of modest (10% to 30%) recovery for lenders in the event of a payment default," S&P said. "The company's March 9, 2012 amendment allows for ongoing subpar repurchases of its term debt until 2013, as long as certain conditions are met. Additionally, on March 22, 2012, the company announced the commencement of a cash tender offer to purchase a portion of its senior subordinated notes due in 2017 below par. The term loan and subordinated notes are trading at a significant discount to their par values, providing the company an economic incentive to pursue a subpar buyback. We believe that these circumstances suggest a high probability of future subpar buybacks, which are tantamount to default under our criteria," S&P said. "The 'CCC' corporate credit rating reflects our view that Dex One's business will remain under pressure given the unfavorable outlook for print directory advertising. We view the company's rising debt leverage, low debt trading levels, weak operating outlook, and steadily declining discretionary cash flow as indications of financial distress. As such, we continue to assess the company's financial risk profile as 'highly leveraged,' based on our criteria. We regard the company's business risk profile as 'vulnerable,' based on significant risks of continued structural and cyclical decline in the print directory sector. Structural risks include increased competition from online and other distribution channels as small business advertising expands across a greater number of marketing channels," S&P said. DIGITAL DOMAIN: Pomerantz Pursues Class Action Suit --------------------------------------------------- Shareholders of Digital Domain Media Group, Inc., are reminded of the securities class action against certain officers and the managing underwriters of the Company's Initial Public Offering. The class action, filed in the United States District Court, Southern District of Florida, is on behalf of all persons who purchased DDMGQ common stock between Nov. 18, 2011 and Sept. 6, 2012, inclusive and/ or persons who purchased or otherwise acquired DDMGQ common stock in or traceable to the Company's initial public offering, which commenced on or about Nov. 18, 2011. This class action is brought under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10(b)-5 promulgated thereunder, and Sections 11 and 15 of the Securities Act of 1933. If you are a shareholder who purchased DDMGQ common stock during the Class Period, you have until Nov. 19, 2012 to ask the Court to appoint you as Lead Plaintiff for the class. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll free, x237. Those who inquire by e-mail are encouraged to include their mailing address and telephone number. DDMGQ is a digital production company which was founded in 1993. The Company provides computer-generated animation and digital visual effects for major motion picture studios and advertisers. On May 16, 2011, DDMGQ filed the Registration Statement with the SEC for its initial public offering, and on Nov. 18, 2011 the IPO commenced. The Company sold 4.92 million shares of its common stock at an IPO price of $8.50 per share. The gross proceeds of the offering totaled $41.8 million. The Complaint alleges that during the Class Period and in connection with DDMGQ's IPO, the Company made misleading statements and/or failed to disclose material facts about the Company's ability to raise capital and fund its operations. Senior DDMGQ officers falsely reassured shareholders that the Company would be able to meet its operating expenses, even though the Company was faced with a substantial "burn rate" which threatened its viability to continue as a going concern. According to a Sept. 18, 2012 article in the Palm Beach Post, DDMGQ had a long history of difficulties meeting its payroll which went back to 2010. According to the Post, the Company's Chief Executive Officer ("CEO") "predicted a 'train wreck' in an email to an investor in early 2010." Moreover, the CEO concealed a Loan Agreement for $10 million which he entered into at the time of the IPO. The loan was secured by the CEO's DDMGQ common shares and by the CEO's personal properties. The revelation of the DDMGQ's true financial condition culminated in its filing for Chapter 11 bankruptcy on Sept. 11, 2012, less than 10 months after its IPO. The Pomerantz Firm, with offices in New York, Chicago and San Diego, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 75 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. 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 appointed in the case is represented by lawyers at Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP. The company listed assets of $205 million and liabilities totaling $214 million. Debt includes $40 million on senior secured convertible notes plus $24.7 million in interest. There is another issue of $8 million in subordinated secured convertible notes. DIGITAL DOMAIN: Committee Taps Brown Rudnick as Counsel ------------------------------------------------------- BankruptcyData.com reports that Digital Domain Media Group's official committee of unsecured creditors filed with the U.S. Bankruptcy Court motions to retain Brown Rudnick (Contact: H. Jeffrey Schwartz) as counsel at these hourly rates: attorney at $475 to $1,100 and paraprofessional at $265 to $370 and Sullivan Hazeltine Allinson (Contact: William D. Sullivan) as co-counsel at hourly rates ranging from $150 to $425. 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 appointed in the case is represented by lawyers at Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP. The company listed assets of $205 million and liabilities totaling $214 million. Debt includes $40 million on senior secured convertible notes plus $24.7 million in interest. There is another issue of $8 million in subordinated secured convertible notes. DIGITAL DOMAIN: PBC GP Discloses 54.3% Equity Stake --------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, PBC GP III, LLC, and its affiliates disclosed that, as of Aug. 31, 2012, they beneficially own 23,639,100 shares of common stock of Digital Domain Media Group, Inc., representing 54.3% of the shares outstanding. A copy of the filing is available for free at http://is.gd/W8EP5J 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 appointed in the case is represented by lawyers at Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP. The company listed assets of $205 million and liabilities totaling $214 million. Debt includes $40 million on senior secured convertible notes plus $24.7 million in interest. There is another issue of $8 million in subordinated secured convertible notes. DIGITILITI INC: Suspending Filing of Reports with SEC ----------------------------------------------------- Digitiliti, Inc., filed a Form 15 with the U.S. Securities and Exchange Commission to voluntarily deregister its common stock and suspend its reporting obligations with the SEC. Pursuant to Rule 12g-4(a)(2) of the Securities Exchange Act of 1934, the Company deregisters its common stock because holders of its common shares are less than 500 and the Company has than $10 million in assets. There were only 400 holders of the Company's common stock as of Oct. 12, 2012. About Digitiliti, Inc. St. Paul, Minnesota-based Digitiliti, Inc.'s business is developing and delivering storage technologies and methodologies enabling its customers to manage, control, protect and access their information and data with ease. The Company's core business is providing a cost effective on-line data protection solution to the small to medium business ("SMB") and small to medium enterprise ("SME") markets through its DigiBAK service. This on- line data protection solution helps organizations properly manage and protect their entire network from one centralized location. The Company reported a net loss of $3.98 million in 2011, compared with a net loss of $6.41 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.03 million in total assets, $4.29 million in total liabilities and a $3.26 million total stockholders' deficit. In the auditors' report accompanying the consolidated financial statement for the year ended Dec. 31, 2011, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered losses from operations and has a working capital deficit. DYNEGY HOLDINGS: Franklin Resources Discloses 32.4% Equity Stake ---------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Franklin Resources, Inc., and its affiliates disclosed that, as of Oct. 1, 2012, they beneficially own 32,931,496 shares of common stock of Dynegy Inc. representing 32.4% of the shares outstanding. The Common Stock was issued in connection with the Dynegy's emergence from Chapter 11 bankruptcy under the Modified Third Amended Chapter 11 Plan of Reorganization for Dynegy Holdings, LLC, proposed by Dynegy Holdings, LLC, and Dynegy Inc. Unsecured notes and lease guaranty claims beneficially owned by one or more open- or closed-end investment companies or other managed accounts that are clients of investment managers that are direct and indirect subsidiaries of Franklin Resources, including Franklin Advisers, Inc., were exchanged for the Common Stock pursuant to the Plan. Those liabilities were cancelled and annulled under the Plan. A copy of the filing is available for free at: http://is.gd/N7NsZP About Dynegy Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) on Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. Dynegy Inc. successfully completed its Chapter 11 reorganization and emerged from bankruptcy October 1. Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., remain under Chapter 11 protection. As of July 31, 2012, Dynegy Inc. had total assets of $3.15 billion, total liabilities of $3.14 billion and total stockholders' equity of $6.68 million. DYNEGY HOLDINGS: Luminus Management Discloses 9.7% Equity Stake --------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Luminus Management, LLC, and its affiliates disclosed that, as of Oct. 1, 2012, they beneficially own 9,720,083 shares of common stock of Dynegy Inc. representing 9.7% of the shares outstanding. A copy of the filing is available at: http://is.gd/rR89X1 About Dynegy Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) on Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. Dynegy Inc. successfully completed its Chapter 11 reorganization and emerged from bankruptcy October 1. Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., remain under Chapter 11 protection. As of July 31, 2012, Dynegy Inc. had total assets of $3.15 billion, total liabilities of $3.14 billion and total stockholders' equity of $6.68 million. EASTBRIDGE INVESTMENT: Expects $7.5MM to $8.5MM Revenue in 2012 --------------------------------------------------------------- EastBridge Investment Group announced year-end financial projections based on EastBridge's current results and near term plans. According to management, EastBridge's 2012 revenue will be in the range of $7.5 to $8.5 million which will generate a net income in the range of $5.5 to $6.5 million or an earnings per share of $0.034 to $0.04. This is a significant increase over 2011 financial results of approximately $36,000 in revenue, which generated a loss of about $800,000. EastBridge Investment Group focuses on high-growth companies in Asia and in the United States, offering IPOs, Joint Ventures and Merchant Banking services. The Company targets industries in electronics, real estate, auto, metal, energy, environmental, bioscience and food retail distribution. To learn more about EastBridge Investment Group go to the Company's Web site at http://www.EbigCorp.com/ To receive EBIG's email alert, send a blank e-mail to info@EbigCorp.com About EastBridge Investment Scottsdale, Arizona-based EastBridge Investment Group Corporation is one of a small group of United States companies solely concentrated in marketing business consulting services to closely held, small to mid-size Asian companies that require these services for expansion. EastBridge is assisting its clients in becoming public companies, reporting pursuant to the Securities Exchange Act of 1934, as amended, in the United States and obtaining listings for their stock on a U.S. stock exchange or over-the-counter market. All clients are located in Asia- Pacifica. In its audit report for the 2011 results, Tarvaran Askelson & Company, LLP, in Laguna Niguel, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company's viability is dependent upon its ability to obtain future financing and the success of its future operations. The Company reported a net loss of $766,414 in 2011, compared with a net loss of $174,955 in 2010. The Company's balance sheet at June 30, 2012, showed $1.07 million in total assets, $1.79 million in total liabilities and a $720,744 total stockholders' deficit. EASTMAN KODAK: To Begin Talks With Shareholders on Plan ------------------------------------------------------- Eastman Kodak Company on Oct. 12 said that as a result of the significant progress made to date in its restructuring, it is now ready to begin discussions on a plan of reorganization with certain key creditor groups. To facilitate these discussions with the widest possible group of interested parties, including holders of publicly-traded securities, the company is publicly disclosing certain forward- looking information showing its cash flow forecast and financial projections for Kodak's Commercial Imaging business, which is focused on commercial, packaging, and functional printing solutions and enterprise services, and will form the company upon emergence. These projections include forecasts of its U.S. operating cash flow through June 2013, as well as pro-forma projections of the company's combined operating cash flow after taking into account previously announced portfolio strategy decisions, such as the intention to divest the Document Imaging and Personalized Imaging businesses, as well as its intention to wind down the sale of consumer inkjet printers and focus on servicing its installed base of customers. They also highlight the strong, cash-generating set of Kodak businesses that are expected to emerge from Chapter 11 in the first half of 2013. The Commercial Imaging business has significant growth potential and includes differentiated products and services that leverage Kodak's unique technological and competitive advantages. Kodak Chairman and CEO Antonio M. Perez said, "As we move forward to emergence and explore an array of financing options, we believe there is confidence and interest among the financial community in our Commercial Imaging business and its future business plans. We are gratified that there appears to be interest among several potential lenders to finance this business and its emergence, and with this disclosure, we are now better positioned to explore these funding opportunities." 3-Year Cash Flow Projections Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Eastman Kodak Co. publicly disclosed cash-flow projections for the next three years, breaking out the operations the company intends to be the backbone for the Chapter 11 reorganization begun in January. The company's pro forma predictions show the commercial printing focused business as having operating cash flow of $170 million in 2013 on revenue of $2.73 billion. Kodak predicts operating cash flow for the segment will grow to $285 million in 2015. Kodak made the disclosure in a regulatory filing because it's about to begin discussing a reorganization plan with creditors. Securities laws don't allow some creditors to have the information while others don't. A copy of the Cash Flow Forecast and Financial Projections is available for free at http://is.gd/jZYaiL The report relates that for the U.S. companies in bankruptcy, Kodak is predicting an operating cash flow deficit of $128 million from September 2012 through June 2013. Although the comparisons aren't equal, Kodak reported last month that cash declined by $92.4 million during the month ended Aug. 31, ending at $345.8 million. Kodak said in the statement on Oct. 12 "there appears to be interest among several potential lenders" to provide financing for an exit from Chapter 11. The report notes that Kodak disclosed in September that it won't be selling the portfolio of digital imaging technology for the time being. The company said it might retain the technology for licensing to generate revenue and pay customer claims under a reorganization plan. Kodak said it is still planning for an emergence from bankruptcy in the first half of 2013. Kodak's $400 million in 7% convertible notes due in 2017 traded at 1:17 p.m. on Oct. 12 for 11.25 on the dollar, according to Trace, the bond- price reporting system of the Financial Industry Regulatory Authority. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. As of July 31, 2012, the Company had total assets of $3.93 billion, total liabilities of $5.32 billion and total stockholders' deficit of $1.39 billion. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. EMMIS COMMUNICATIONS: Posts $38.9MM Net Income in Aug. 31 Qtr. -------------------------------------------------------------- Emmis Communications Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income attributable to the Company of $38.99 million on $57.56 million of net revenues for the three months ended Aug. 31, 2012, compared with a net loss attributable to the Company of $6.01 million on $61.34 million of net revenues for the same period a year ago. For the six months ended Aug. 31, 2012, the Company reported net income attributable to the Company of $34.85 million on $110.28 million of net revenues, in comparison with a net loss attributable to the Company of $8.05 million on $118.47 million of net revenues for the same period during the prior year. The Company's balance sheet at Aug. 31, 2012, showed $287.53 million in total assets, $258.60 million in total liabilities, $46.88 million in series A cumulative convertible preferred stock, and a $17.94 million total deficit. A copy of the Form 10-Q is available for free at: http://is.gd/uy1s4T About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. * * * Emmis carries Caa2 corporate family rating and a Caa3 probability of default rating from Moody's. In July 2011, Moody's Investors Service placed the ratings of Emmis on review for possible upgrade following the company's earnings release for 1Q12 (ended May 31, 2011) including additional disclosure related to the pending sale of controlling interests in three radio stations. The sale of the majority ownership to GCTR will generate estimated net proceeds of approximately $100 million to $120 million, after taxes, fees and related expenses. Emmis will retain a minority equity interest in the operations of the three stations and Moody's expects senior secured debt to be reduced resulting in improved credit metrics. EMMIS COMMUNICATIONS: Moody's Reviews 'B3' CFR/PDR for Upgrade -------------------------------------------------------------- Moody's Investors Service placed the ratings of Emmis Communications Corporation on review for upgrade following the company's earnings release for 2Q12 (ended August 31, 2012) indicating good performance for radio operations and plans to refinance existing high coupon debt facilities. Management recently confirmed the $79.6 million repayment of outstanding term loans applying net proceeds from the sale of KXOS-FM and a reduction in the amount of outstanding preferred shares plus accrued dividends. Placed on review for upgrade: Issuer: Emmis Communications Corporation Corporate Family Rating: Placed on Review for Upgrade, currently B3 Probability of Default Rating: Placed on Review for Upgrade, currently B3 Series A Preferred Stock ($46.8 million outstanding): Placed on Review for Upgrade, currently Caa2, LGD6 -- 99% Placed on review for upgrade: Issuer: Emmis Operating Company Sr secured 1st lien revolver due 2012: Placed on Review for Upgrade, currently B2, LGD3 -- 39% Sr secured 1st lien term loan due 2013 ($21.8 million outstanding): Placed on Review for Upgrade, currently B2, LGD3 -- 39% Sr secured 1st lien term loan due 2014 ($27.3 million outstanding): Placed on Review for Upgrade, currently B2, LGD3 -- 39% Outlook Actions: Outlook, Placed on Review Ratings Rationale The radio stations of Emmis have performed well achieving a 2% revenue increase through the six months ended August 31, 2012 compared to flattish growth for the broader industry over the same period. In addition, the company continued to divest non-core assets to reduce leverage. Most recently, Emmis closed on the sale of KXOS-FM in Los Angeles applying $79.6 million of net proceeds to repay debt and completed the sale of Country Sampler and related magazines resulting in an additional $8.5 million debt repayment. Based on recently reported financial results and pro forma for term loan repayments from sale proceeds, debt-to-EBITDA leverage has been reduced to less than 6.2x for LTM August 31, 2012 including Moody's standard adjustments and treating preferred shares as 100% debt (or less than 4.7x excluding preferred shares for LTM August 31, 2012) compared to 7.2x for LTM May 31, 2012. In September 2012, the company amended the rights of the holders of the Preferred Stock including canceling accumulated but undeclared dividends and eliminating restrictions on Emmis' ability to pay common share dividends. Management also indicated it is looking to refinance existing debt facilities at significantly lower interest rates. Moody's review of ratings will focus on the performance of radio and publishing operations and will also consider the company's improving financial profile including the potential for greater free cash flow generation and continued debt reduction consistent with management's stated goal to further reduce leverage. The principal methodology used in rating Emmis 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. Headquartered in Indianapolis, Indiana, Emmis Communications Corporation owns and operates radio stations serving New York, Los Angeles, St. Louis, Austin, Indianapolis, and Terre Haute. The company also publishes six regional and one specialty magazines with revenue for the twelve months ending August 31, 2012 of $224 million. ENERGY TRANSFER: Moody's Lowers Corp. Family Rating to 'Ba2' ------------------------------------------------------------ Moody's Investors Service affirmed the Baa3 rating for Energy Transfer Partners, L.P. (ETP) with a stable outlook. This affirmation follows the October 5, 2012 closing of ETP's $5.3 billion acquisition of Sunoco, Inc. (SUN) together with the March 26, 2012 closing of the acquisition of Southern Union Company (SUG) by ETP's general partner (GP) Energy Transfer Equity, L.P. (ETE), and the various transactions among these entities intended to accommodate these acquisitions. Also as a consequence of these transactions, Moody's downgraded ETE's Corporate Family Rating (CFR) to Ba2 from Ba1 while confirming its Ba2 senior secured term loan and notes ratings. ETE's outlook is stable. This action concludes the review that was initiated on June 16, 2011. Moody's affirmed SUG's Baa3 rating with a stable outlook. In conjunction with the closing of ETP's acquisition of SUN, Moody's upgraded SUN's senior unsecured notes rating to Baa3 from Ba2 with a stable outlook, and has withdrawn SUN's Ba1 CFR and Probability of Default Rating (PDR). Concurrent with closing on SUN, ETP became a co-obligor on approximately $965 million of SUN's existing senior notes and debentures. Also concurrent with the closing of the SUN acquisition, SUN contributed its GP interest, 32.4% limited partner (LP) interest and incentive distribution rights (IDRs) in Sunoco Logistics Partners, L.P. (SXL) to ETP. Moody's downgraded the senior unsecured notes rating of Sunoco Logistics Partners Operations L.P., who issues debt on behalf of SXL under an SXL guarantee, to Baa3 from Baa2. SXL's outlook is stable. This action concludes the review that was initiated on April 30, 2012. Moody's affirmed Regency Energy Partners LP's (RGP) Ba3 CFR and its senior unsecured notes rating of B1. The outlook is stable. ETE holds the 1.8% GP and a 16.7% LP interest in RGP. A complete list of Moody's rating actions is as follows: Energy Transfer Partners, L.P. Senior Unsecured Debt -- Affirmed Baa3 Senior Unsecured Shelf -- Affirmed (P) Baa3 Outlook -- Changed to stable from negative Energy Transfer Equity, L.P. Corporate Family Rating -- Downgraded to Ba2 from Ba1 Outlook -- Changed to stable from review down Senior Secured Debt -- Confirmed Ba2 - changed to LGD4-50% from LGD6-92% Speculative Grade Liquidity Rating -- assigned SGL3 Senior Unsecured Shelf - (P)Ba2 withdrawn Sunoco, Inc. Senior Unsecured Debt -- Upgraded to Baa3 from Ba2 Outlook -- Changed to stable from developing Corporate Family Rating -- Ba1 withdrawn Probability of Default Rating -- Ba1 withdrawn Senior Unsecured MTN -- Upgraded to (P) Baa3 from (P) Ba2 Subordinate Shelf - (P)Ba3 withdrawn Preference Shelf - (P)Ba3 withdrawn Sunoco Capital Trust I Backed Preference Shelf - (P)Ba3 withdrawn Sunoco Capital Trust II Backed Preference Shelf - (P)Ba3 withdrawn Sunoco Logistics Partners Operations L.P. Senior Unsecured Debt -- Downgraded to Baa3 from Baa2 Outlook -- Changed to stable from review down Senior Shelf - Downgraded (P) Baa2 to (P) Baa3 Subordinate Shelf - (P)Baa3 withdrawn Southern Union Company Senior Unsecured Debt -- Affirmed Baa3 Outlook -- Changed to stable from negative Junior Subordinated Debt -- Affirmed Ba1 Regency Energy Partners LP Corporate Family Rating -- Affirmed Ba3 Senior Unsecured Debt -- Affirmed B1 Outlook - Affirmed stable Backed Senior Unsecured -- Affirmed B1 Senior Unsecured Shelf -- Affirmed (P)B1 LGD Senior Unsecured -- Changed to LGD3-44% from LGD4-66% "The ETE group of affiliated entities controls and operates a sizable, diversified collection of attractive midstream energy infrastructure assets that generate for the most part a stable, largely fee-based cash flow stream, a consolidated enterprise that will further benefit from the inclusion of SXL's liquids-dominated logistics assets," commented Andrew Brooks, Moody's Vice President. "However, elevated financial leverage across the system, exacerbated by the recent acquisition spree and heavy growth capital spending, and the structural complexity of the organization all remain a concern to Moody's." Rating Rationale Energy Transfer Partners - ETP ranks among the largest of the midstream master limited partnerships (MLPs) in terms of asset size, geographical reach, the operational diversification of its businesses and its growing cash flow. With the contribution of SXL's GP, LP and IDRs to ETP concurrent with the closing of its acquisition of SUN, ETP's largely natural gas-oriented infrastructure asset base will be supplemented by the inclusion of SXL's liquids-dominated logistics assets over which ETP will have operational control. SXL's crude and refined products businesses could contribute 25%-30% of ETP's consolidated EBITDA on a pro forma basis. Incremental EBITDA derived from SXL, ETP's 40% indirect stake in SUG and growth capital spending across its businesses will further dilute ETP's relative exposure to its low- growth Texas intrastate legacy operating segment. Notwithstanding the 50% equity financing of its SUN acquisition, ETP remains aggressively leveraged, approaching 4.8x debt/EBITDA, and is burdened by the complexity of its organizational structure. As an MLP, ETP is wholly dependent on external sources of financing to fund its ambitious growth capital requirements and it remains under pressure to generate cash for distribution to ETE, which has its own debt service and partnership distributions to support. ETP's stable outlook reflects the quality of its midstream asset base and its record of equity issuance to support growth projects and acquisitions. In addition, Moody's believes that there is reduced near term pressure and financing requirements to further reconfigure its asset base through other asset dropdowns from affiliated entities or additional acquisitions. ETP's ratings could be downgraded if it fails to sustain debt leverage below 4.5x, the prospects for which are less clear because of recent acquisitions and the weaker natural gas processing environment. Additionally, should ETP embark on another sizable acquisition in the near future, its Baa3 could be placed in jeopardy, as would increased pressure from ETE for cash distributions. While an upgrade is considered unlikely, reducing debt leverage to the 4.0x area could prompt such consideration. Energy Transfer Equity - ETE, also a publicly traded MLP, sits atop a highly complex organizational structure in which it holds GP and LP interests, and IDRs, in ETP and RGP, and indirect equity interests in SUN and SUG. Its debt is structurally subordinated to these affiliated entities, whose cash distributions to ETE are residual to their own operating and debt service requirements. While the increased scale and scope of the combined ETE family's operating footprint is positive, ETE's debt leverage increased with its acquisition of SUG, and now exceeds 5.5x EBITDA on a fully consolidated basis. ETE's $1.8 billion senior notes due 2020 are secured on a pari passu basis with its $2.0 billion secured term loan. ETE's stable outlook reflects the increasingly diversified distribution streams derived from its subsidiary interests, and the quality of their respective assets. ETE's ratings could be downgraded should it further increase consolidated leverage on a permanent basis to over 6x EBITDA . Furthermore, should cash distributions to ETE be compromised through higher leverage or weakness in distributable cash flows at partnership and subsidiary levels, ratings could be downgraded. A ratings upgrade is limited by the absence of readily apparent sources of cash for debt reduction now that SUG in particular has been dropped into a new intermediate holding company controlled by ETP in exchange for an equity stake in that entity rather than cash consideration. However, 60% of the net proceeds from any asset sales at ETP Holdco could be distributed to ETE for debt reduction. Southern Union Company - ETE closed on its $9.4 billion acquisition of SUG effective March 26, 2012; concurrent with the closing of ETP's acquisition of SUN both SUG and SUN were contributed to a newly formed intermediate holding company -- ETP Holdco Corporation (ETP Holdco, NR) -- in which ETP and ETE hold 40% and 60% interests, respectively. SUG is both a holding company of pipeline and natural gas midstream assets as well as gas utility divisions in Missouri and Massachusetts. Through its wholly-owned subsidiary, Panhandle Eastern Pipe Line Company, LP (PEPL, Baa3 stable), SUG owns and operates regulated, interstate gas pipelines that transport natural gas from coastal Gulf of Mexico, South Texas and Oklahoma to major domestic markets in the Midwest, and a liquefied natural gas (LNG) import terminal on the Louisiana Gulf Coast. SUG also owns a gas gathering and processing business -- Southern Union Gas Services - in the Permian Basin of Texas and New Mexico. SUG's previously held 50% indirect interest in Florida Gas Transmission Company, LLC (FGT, Baa2 stable) was dropped into ETP for $2.0 billion, including $1.9 billion in cash. Cash proceeds were used for debt reduction at ETE and SUG. SUG's Baa3 rating reflects the low business risk of its regulated pipeline assets, offset by its relatively high debt leverage and the overhang of complex corporate structure and leverage. The stable outlook reflects Moody's expectation that any additional asset sales or dropdowns will be accompanied by a commensurate level of debt reduction at SUG. While a ratings upgrade is considered unlikely given the operating control ETP exercises over SUG through its control of ETP Holdco, material de-leveraging could warrant an upgrade. Conversely, should leverage metrics deteriorate from current June 30 approximation of 5.0x debt to EBITDA, or should its business mix trend more towards gas gathering and processing and away from interstate pipes, a downgrade could be considered. Furthermore, a downgrade at ETP or ETE would likely result in a downgrade of SUG's ratings. Sunoco - With SUN's GP and LP interests, and IDRs in SXL contributed to ETP, SUN's principal remaining assets consist of its network of 4,900 retail service stations, and 90.7 million Class F units received from ETP for SUN's interest in SXL and SUN's cash balances. Most of this cash balance, approximating $2 billion, was used to fund the cash portion of the SUN acquisition. Also concurrent with closing, ETP became a co-obligor on SUN's existing senior unsecured notes and debentures. As a result, Moody's views SUN as equivalent to the credit of ETP, and any subsequent movement in ETP's credit rating or outlook will be reflected in SUN's Baa3 rating. Sunoco Logistics - SXL is a publicly traded MLP formed in 2002, principally engaged in the transport, terminalling and storage of crude oil, and to a lesser extent refined products, as well as natural gas liquids (NGLs) and crude oil marketing. SXL guarantees the debt of Sunoco Logistics Partners Operations L.P., a 100%- owned operating subsidiary that issues debt on behalf of SXL. Its Baa3 rating reflects SXL's relatively low business risk profile, a sound operating strategy focused on fee-based businesses, and strong financial metrics. Its midstream operations are somewhat smaller than its investment grade peers and are subject to the generic risks of the MLP business model, including a high distribution payout and the need for ongoing access to the capital markets to support expanding operations and growth capital investments. Now under the operating control of ETP through its GP holding, Moody's expects SXL to use debt leverage more aggressively, likely increasing debt to EBITDA above its June 30 level approximating 2.5x, and to payout higher ratios of distributable cash flow. Its stable outlook and ratings will continue to reflect those of ETP unless SXL's financial metrics or business risk materially deviate on the downside from ETP. Regency -- Also a publicly traded MLP, RGP's Ba3 CFR reflects its growing size and scale, its business and geographic diversification and increased fee-based income derived from recent expansions and acquisitions. The ratings also recognize RGP's rapid growth and evolving business mix profile, the execution risks associated with its growth projects, increased structural complexity and elevated leverage. Growth capital spending could cause leverage to exceed 5.5x EBITDA in 2012, although debt leverage will likely moderate in 2013 as projects reach completion. The rating is supported by RGP's track record of issuing equity and its commitment to the balanced funding of growth capital spending. Moody's also takes into account ETE's control of RGP through its GP interest, recognizing that ETE also looks to RGP to help fund its own distributions and debt service obligations. RGP's stable outlook reflects Moody's expectation that increased debt leverage will stabilize as new growth projects begin to generate incremental EBITDA. Presuming RGP successfully executes on its growth initiatives and restores debt to EBITDA to 5x or below, while maintaining operating margins from fee-based sources in the 80% range, its rating could be upgraded. Ratings could be downgraded should peak leverage not begin to trend down. Additionally, should the credit of ETE materially diminish from its current Ba2 CFR, or should ETE aggressively pressure RGP for a higher distribution payout, a negative rating action could be considered. Energy Transfer Equity, L.P. and Energy Transfer Partners, L.P. are publicly traded master limited partnerships headquartered in Dallas, Texas. The principal methodology used in rating ETP was the Global Midstream Energy Industry Methodology published in July 2010 and the Natual Gas Pipeline Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ENERGY TRANSFER: Fitch Affirms 'BB-' Issuer Default Rating ---------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating (IDR) for Energy Transfer Equity, L.P. (ETE) at 'BB-'. In addition Fitch has affirmed ratings for ETE's secured debt at 'BB'. ETE has a Stable Rating Outlook. A complete list of ETE ratings follows at the end of this release. Approximately $3.8 billion of debt is affected by today's rating action. Merger Transaction Completed: On Oct. 5, 2012, ETE affiliate Energy Transfer Partners, L.P. (ETP; Fitch IDR of 'BBB-', Negative Outlook) completed a merger with Sunoco, Inc. (SUN). Contemporaneously with the closing of the merger, SUN contributed to ETP $2 billion in cash and equity interests of Sunoco Partners LLC, which currently holds the 2% general partner (GP) interest, incentive distribution rights, and 32.4% limited partner (LP) interest in Sunoco Logistics Partners, L.P. (SXL; IDR 'BBB', Stable Outlook) in exchange for 90,706,000 newly issued Class F units of ETP. In addition, immediately following the merger, ETE contributed its interest in Southern Union Company (SUG; IDR 'BBB- ', Stable Outlook) to ETP HoldCo Corporation (ETP HoldCo) in exchange for a 60% equity interest in ETP HoldCo. In conjunction with ETE's contribution, ETP contributed its interest in SUN to ETP HoldCo and retained a 40% equity interest in ETP HoldCo. In addition to its 40% equity interest in ETP HoldCo, ETE owns ETP's GP interest and 52.5 million ETP LP units, and the GP interest in Regency Energy Partners LP (RGP; IDR 'BB', Stable Outlook) and 26.3 million RGP LP units. Rating Rationale: Fitch believes the merger transaction and resulting HoldCo structure provides significant direct benefits to ETP. ETE primarily stands to gain through its ownership interests in ETP and from the amount and quality of partner distributions it receives from ETP. ETP and ETP HoldCo are expected to provide approximately 95% of ETE's 2013 cash flow. The new holding company simplifies ETP's organizational structure and diversifies and increases the scale of its operations. It has provided an efficient way to drop down SUG assets under ETP control, minimizing transactional risk and external financing. Furthermore, ETP HoldCo will generate tax benefits and contribute to improving adjusted leverage metrics at ETP, which Fitch anticipates will decline to the 4.0x to 4.25x range in 2013 from 4.8x today. Fitch expects ETE's credit profile to remain consistent with its current rating over the near term. For 2013 Fitch projects ETE's standalone adjusted debt to EBITDA, which measures ETE parent company debt against the distributions it receives from ETP, RGP, and ETP HoldCo less expenses, to range between 3.5x and 3.75x. On a fully consolidated basis, 2013 debt to EBITDA is expected to approximate 5.25x. However, ETE's leverage ratios are expected to improve in future periods through increasing affiliate distributions and potentially from the use of proceeds from the sale of assets to retire debt. It is expected that SUG's utility operations will be sold in 2013 with proceeds to be used to reduce debt at SUG and ETE. The 2012 acquisitions of SUN and SUG not only increased and diversified ETE's consolidated operations, they resulted in a higher percentage of contractually supported fee-based margins. The SUN acquisition added crude oil, refined products, and retail operations. SUG provided stable interstate pipelines and midstream services. Also, in January 2012 ETP sold its propane operations which reduced its and ETE's sensitivity to weather and commodity prices. Liquidity is Adequate: ETE has access to a $200 million secured revolving credit facility that matures in June 2015. At June 30, 2012, $10 million was outstanding under the revolver. ETE has minimal working capital needs. The revolver has a maximum leverage test of 5.5x, a minimum fixed-charge coverage test of 1.5x, and a minimum value to loan test of 2.0x. At June 30, 2012, ETE met its financial covenants. Rating Triggers Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- A lessening of consolidated business risk as ETE affiliates acquire and expand pipeline and fixed-fee midstream businesses; -- Positive rating actions at ETP and RGP: -- A material improvement in ETE credit metrics with sustained leverage below 3.0x as affiliate cash distributions increase. Negative: Future developments that may, individually or collectively, lead to a negative rating action include: -- Higher leverage at ETE's operating affiliates to support organic growth and acquisitions; -- Weakening operating performance resulting in negative rating actions at ETP and RGP; -- Standalone ETE debt to EBITDA above 5.0x. The following ratings have been affirmed by Fitch with a Stable Outlook: Energy Transfer Equity, L.P. -- IDR 'BB-'; -- Secured senior notes 'BB'; -- Secured revolving credit facility; -- Secured term loan. FERRO CORP: Moody's Affirms 'Ba3' CFR; Outlook Negative ------------------------------------------------------- Moody's Investors Service affirmed the Ba3 corporate family rating and other ratings of Ferro Corporation and changed the outlook for the ratings to negative from stable. The change follows the announcement that the company has revised earnings guidance downward, expects impairment charges related to its solar pastes business and is exploring strategic options for this business. Specifically, expected 2012 adjusted earnings per diluted share were revised to $0.07 to $0.12, including a $0.14 to $0.17 loss per diluted share in the Company's solar pastes business. Ferro had previously indicated that 2012 adjusted earnings were expected to be in the range of $0.15 to $0.20 per diluted share. The SGL rating was lowered to SGL-3 from SGL- 2. Ratings Rationale While Ferro explores strategic options for its solar pastes business, management is also planning to reduce operating expenses throughout all of its businesses. Impairment charges related to these actions are expected to be in a range of $175 million to $200 million and related to write-downs of goodwill and other assets. Ferro reported $1.5 billion of assets and $574 million of equity at the end of June 2012. As a consequence of the impairment charges, Ferro expects to reserve for up to $135 million of its net deferred tax assets. Ferro is also electing to change their method of recognizing defined benefit pension and other postretirement benefit expense results in a $0.14 per share positive adjustment to full-year adjusted earnings guidance for 2012. The charges will likely be recorded in the third quarter ending September 30, 2012. The outlook is negative given the number of management tasks to be completed as the company is restructured, with a focus on its remaining profitable business lines. In order for the outlook to return to stable, management will need to successfully resolve the following initiatives: 1) demonstrate the stability and earnings power of the other varied platforms that Ferro has in its asset base; 2) ensure these actions have a limited impact on Ferro's liquidity profile going forward (Moody's initial assessment assumes these actions will not impact covenant compliance in Ferro's bank agreements nor result in the need to collateralize precious metals leasing arrangements); 3) show progress related to ongoing cost cutting programs. Ferro's liquidity profile as represented by the SGL-3 is deemed to be adequate and is supported largely by the $350 million revolving credit. There are no near-term maturities that are material with only a $35 million maturity coming due in 2013. The profile was downgraded as a result of the restructuring initiatives and the possibility of changes related to the company's precious metal lease arrangements. The principal methodology used in rating Ferro Corporation was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Ferro Corporation is a global supplier of technology-based performance materials for manufacturers. Ferro materials enhance the performance of products in a variety of end markets, including electronics, telecommunications, pharmaceuticals, building and renovation, appliances, automotive, household furnishings, and industrial products. Headquartered in Mayfield Heights, Ohio, the Company has approximately 5,100 employees globally and reported sales of $1.9 billion for the last 12 months ending June 30, 2012. FELIX'S INC: New Orleans Restaurant Fetches $1.4-Mil. Price ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Felix's Restaurant & Oyster Bar in New Orleans's French Quarter has an agreement to sell the business and the lease for $1.4 million to Rizutto Restaurant Investments LLC. Located at Iberville and Bourbon streets, the restaurant sought Chapter 11 protection in early August when the landlords were on the cusp of obtaining an order of eviction. According to the report, the owners decided on a sale because reorganizing was impossible. Creditors were told in a court filing that a sale at $1.4 million will leave about $610,000 for unsecured creditors, providing them a 10% recovery. If the auction produces a $1.6 million price, unsecured creditors' recover will be as much as 33%, according to the filing. The Bloomberg report discloses that the U.S. bankruptcy judge in New Orleans is being asked to require competing bids by Nov. 1, followed by an auction on Nov. 7 and a hearing the same day to approve the sale. Felix's Inc., owner of the namesake restaurant and oyster bar in New Orleans's French Quarter, sought bankruptcy protection from creditors (Bankr. E.D. La. Case No. 12-12137). Felix's Inc. filed the bare-bones petition on July 19, 2012, without a lawyer. The company disclosed assets of $1.62 million and debt of $1.57 million. Felix's has been a New Orleans landmark since the early 1900s and has been owned by the same family for more than 60 years, according to its Web site. FIBERTOWER CORP: FCC Appeals Injunction Preserving Licenses ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that FiberTower Corp. must defend a victory the wireless communications provider won in bankruptcy court against the U.S. Federal Communications Commission. According to the report, the FCC took the position it terminated some of the company's frequency licenses because they hadn't been developed. FiberTower went to the bankruptcy judge in August asking him to stop license termination. U.S. Bankruptcy Judge D. Michael Lynn recently wrote his opinion explaining why he has power to stop termination of the FCC licenses. The FCC appealed on Oct. 9. The report relates that FiberTower is seeking a first extension of the exclusive right to propose a reorganization plan. If approved by Judge Lynn at a Nov. 6 hearing, the plan-filing deadline would be pushed out four months to March 13. The company signed up Bordercomm Partners LP to buy the so called legacy backhaul business in Texas and Washington for $22.5 million. There will be an auction and a hearing to approve the sale at the Nov. 6 hearing. The report notes that in ruling in favor of FiberTower, Judge Lynn didn't reach the question of whether the FCC properly could terminate the licenses. Judge Lynn ruled in substance that he has power under bankruptcy law to halt license termination until FiberTower completes the regulatory and appellate process aimed at preserving ownership of the licenses. Judge Lynn said the validity of the licenses entails decisions to be made by the FCC and the federal courts where FiberTower can appeal if it loses. According to Bloomberg, the FCC is appealing Judge Lynn's injunction that has the effect of preserving the licenses for FiberTower while the regulatory process works its way forward. About FiberTower Corp. FiberTower Corporation, FiberTower Network Services Corp., FiberTower Licensing Corp., and FiberTower Spectrum Holdings LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos. 12-44027 to 12-44031) on July 17, 2012, together with a plan support agreement struck with prepetition secured noteholders. FiberTower is an alternative provider of facilities-based backhaul services, principally to wireless carriers, and a national provider of millimeter-band spectrum services. Backhaul is the transport of voice, video and data traffic from a wireless carrier's mobile base station, or cell site, to its mobile switching center or other exchange point. FiberTower provides spectrum leasing services directly to other carriers and enterprise clients, and also offer their spectrum services through spectrum brokerage arrangements and through fixed wireless equipment partners. FiberTower's significant asset is the ownership of a national spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum licenses, including over 740 MHz in the top 20 U.S. metropolitan areas and, in the aggregate, roughly 1.72 billion channel pops (calculated as the number of channels in a given area multiplied by the population, as measured in the 2010 census, covered by these channels). FiberTower believes the Spectrum Portfolio represents one of the largest and most comprehensive collections of millimeter wave spectrum in the U.S., covering areas with a total population of over 300 million. As of the Petition Date, FiberTower provides service to roughly 5,390 customer locations at 3,188 deployed sites in 13 markets throughout the U.S. The fixed wireless portion of these hybrid services is predominantly through common carrier spectrum in the 11, 18 and 23 GHz bands. FiberTower's biggest service markets are Dallas/Fort Worth and Washington, D.C./Baltimore, with additional markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit, Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco and Tampa. As of June 30, 2012, FiberTower's books and records reflected total combined assets, at book value, of roughly $188 million and total combined liabilities of roughly $211 million. As of the Petition Date, FiberTower had unrestricted cash of roughly $23 million. For the six months ending June 30, 2012, FiberTower had total revenue of roughly $33 million. With the help of FTI Consulting Inc., FiberTower's preliminary valuation work shows that the Company's enterprise value is materially less than $132 million -- i.e., the approximate principal amount of the 9.00% Senior Secured Notes due 2016 outstanding as of the Petition Date. The preliminary valuation work is based upon the assumption that FiberTower's spectrum licenses will not be terminated. Fibertower Spectrum disclosed $106,630,000 in assets and $175,501,975 in liabilities as of the Chapter 11 filing. Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at Hogan Lovells and Willkie Farr and Gallagher LLP serve as special FCC counsel. FTI Consulting serve as financial advisor. BMC Group Inc. serve as claims and noticing agent. The petitions were signed by Kurt J. Van Wagenen, president. Wells Fargo Bank, National Association -- as indenture trustee and collateral agent to the holders of 9.00% Senior Secured Notes due 2016 owed roughly $132 million as of the Petition Date -- is represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad Hoc Committee of Holders of the 9% Secured Notes Due 2016 is represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya, Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark Elmore, Esq., at Haynes and Boone, LLP, as local counsel. U.S. Bank, National Association -- in its capacity as successor indenture trustee and collateral agent to holders of the 9.00% Convertible Senior Secured Notes due 2012, owed $37 million as of the Petition Date -- is represented by Michael B. Fisco, Esq., at Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq., at McGuire Craddock & Strother PC as local counsel. William T. Neary, the U.S. Trustee for Region 6 appointed five members to the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee is represented by Otterbourg, Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman & Leonard, P.A. Goldin Associates, LLC serves as its financial advisors. FIBERTOWER CORP: Nov. 6 Hearing on Plan Exclusivity Extension ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas will convene a hearing on Nov. 6, 2012, at 1:30 p.m., to consider FiberTower Network Services Corp., et al.'s request to extend their exclusive period to propose a Chapter 11 plan. Objections, if any, are due Nov. 2. The Debtor is asking the Court to extend its exclusive right to file a plan and solicit acceptances of a plan until March 13, 2013, and May 14, respectively. About FiberTower Corp. FiberTower Corporation, FiberTower Network Services Corp., FiberTower Licensing Corp., and FiberTower Spectrum Holdings LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos. 12-44027 to 12-44031) on July 17, 2012, together with a plan support agreement struck with prepetition secured noteholders. FiberTower is an alternative provider of facilities-based backhaul services, principally to wireless carriers, and a national provider of millimeter-band spectrum services. Backhaul is the transport of voice, video and data traffic from a wireless carrier's mobile base station, or cell site, to its mobile switching center or other exchange point. FiberTower provides spectrum leasing services directly to other carriers and enterprise clients, and also offer their spectrum services through spectrum brokerage arrangements and through fixed wireless equipment partners. FiberTower's significant asset is the ownership of a national spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum licenses, including over 740 MHz in the top 20 U.S. metropolitan areas and, in the aggregate, roughly 1.72 billion channel pops (calculated as the number of channels in a given area multiplied by the population, as measured in the 2010 census, covered by these channels). FiberTower believes the Spectrum Portfolio represents one of the largest and most comprehensive collections of millimeter wave spectrum in the U.S., covering areas with a total population of over 300 million. As of the Petition Date, FiberTower provides service to roughly 5,390 customer locations at 3,188 deployed sites in 13 markets throughout the U.S. The fixed wireless portion of these hybrid services is predominantly through common carrier spectrum in the 11, 18 and 23 GHz bands. FiberTower's biggest service markets are Dallas/Fort Worth and Washington, D.C./Baltimore, with additional markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit, Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco and Tampa. As of June 30, 2012, FiberTower's books and records reflected total combined assets, at book value, of roughly $188 million and total combined liabilities of roughly $211 million. As of the Petition Date, FiberTower had unrestricted cash of roughly $23 million. For the six months ending June 30, 2012, FiberTower had total revenue of roughly $33 million. With the help of FTI Consulting Inc., FiberTower's preliminary valuation work shows that the Company's enterprise value is materially less than $132 million -- i.e., the approximate principal amount of the 9.00% Senior Secured Notes due 2016 outstanding as of the Petition Date. The preliminary valuation work is based upon the assumption that FiberTower's spectrum licenses will not be terminated. Fibertower Spectrum disclosed $106,630,000 in assets and $175,501,975 in liabilities as of the Chapter 11 filing. Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at Hogan Lovells and Willkie Farr and Gallagher LLP serve as special FCC counsel. FTI Consulting serve as financial advisor. BMC Group Inc. serve as claims and noticing agent. The petitions were signed by Kurt J. Van Wagenen, president. Wells Fargo Bank, National Association -- as indenture trustee and collateral agent to the holders of 9.00% Senior Secured Notes due 2016 owed roughly $132 million as of the Petition Date -- is represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad Hoc Committee of Holders of the 9% Secured Notes Due 2016 is represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya, Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark Elmore, Esq., at Haynes and Boone, LLP, as local counsel. U.S. Bank, National Association -- in its capacity as successor indenture trustee and collateral agent to holders of the 9.00% Convertible Senior Secured Notes due 2012, owed $37 million as of the Petition Date -- is represented by Michael B. Fisco, Esq., at Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq., at McGuire Craddock & Strother PC as local counsel. William T. Neary, the U.S. Trustee for Region 6 appointed five members to the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee is represented by Otterbourg, Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman & Leonard, P.A. Goldin Associates, LLC serves as its financial advisors. FIBERTOWER CORP: Hogan Lovells Approved for Spectrum Licenses ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Fibertower Network Services Corp., et al., to employ Hogan Lovells as special FCC regulatory counsel. As reported in the Troubled Company Reporter on Oct. 2, 2012, Hogan Lovells has been the Debtors' long-term counsel with respect to matters pertaining to, inter alia, Federal Communications Commission regulatory matters, including the Debtors' request for an extension of the construction deadline applicable to their 24 GHz and 39 GHz spectrum licenses. As reported in the TCR on Aug. 28, 2012, the Debtors filed a lawsuit against the Federal Communications Commission to assert its grasp on their most valuable asset: the right to use the national 740 MHz spectrum that covers some of the biggest U.S. cities. Hogan Lovells will advise the Debtors in connection with FCC regulatory matters pertaining to the Debtors' pending request for an extension of the deadline for constructing Debtors' 24 GHz and 39 GHz spectrum licenses and perform other legal services related to FCC regulations, applications and similar services as the Debtors may request from time to time. The Debtors also have historically employed Willkie Farr & Gallagher LLP to assist them with certain FCC-related matters, and seek to retain WF&G in the cases. WF&G will focus primarily on obtaining FCC approval of the transfers of the licenses and in providing communications law advice regarding the plan of reorganization while Hogan Lovells will focus primarily on obtaining renewal of certain 24 and 39 GHZ licenses. WF&G and Hogan Lovells will make all necessary efforts to ensure that no unnecessary duplication of effort occurs between WF&G and Hogan Lovells. The hourly billing rates at Hogan Lovells range from $280 to over $1,200 for attorneys and from $160 to $345 for paralegals. Hogan Lovells' hourly rates vary depending on the experience and seniority of the professionals in question. The professionals at Hogan Lovells primarily responsible for this matter will be Ari Q. Fitzgerald, whose hourly rate is $705, and Christopher J. Termini, whose hourly rate is $535. Ari Q. Fitzgerald, a partner at Hogan Lovells, represents no interest adverse to the Debtors or their estates in the matters upon which Hogan Lovells is to be engaged. About FiberTower Corp. FiberTower Corporation, FiberTower Network Services Corp., FiberTower Licensing Corp., and FiberTower Spectrum Holdings LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos. 12-44027 to 12-44031) on July 17, 2012, together with a plan support agreement struck with prepetition secured noteholders. FiberTower is an alternative provider of facilities-based backhaul services, principally to wireless carriers, and a national provider of millimeter-band spectrum services. Backhaul is the transport of voice, video and data traffic from a wireless carrier's mobile base station, or cell site, to its mobile switching center or other exchange point. FiberTower provides spectrum leasing services directly to other carriers and enterprise clients, and also offer their spectrum services through spectrum brokerage arrangements and through fixed wireless equipment partners. FiberTower's significant asset is the ownership of a national spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum licenses, including over 740 MHz in the top 20 U.S. metropolitan areas and, in the aggregate, roughly 1.72 billion channel pops (calculated as the number of channels in a given area multiplied by the population, as measured in the 2010 census, covered by these channels). FiberTower believes the Spectrum Portfolio represents one of the largest and most comprehensive collections of millimeter wave spectrum in the U.S., covering areas with a total population of over 300 million. As of the Petition Date, FiberTower provides service to roughly 5,390 customer locations at 3,188 deployed sites in 13 markets throughout the U.S. The fixed wireless portion of these hybrid services is predominantly through common carrier spectrum in the 11, 18 and 23 GHz bands. FiberTower's biggest service markets are Dallas/Fort Worth and Washington, D.C./Baltimore, with additional markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit, Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco and Tampa. As of June 30, 2012, FiberTower's books and records reflected total combined assets, at book value, of roughly $188 million and total combined liabilities of roughly $211 million. As of the Petition Date, FiberTower had unrestricted cash of roughly $23 million. For the six months ending June 30, 2012, FiberTower had total revenue of roughly $33 million. With the help of FTI Consulting Inc., FiberTower's preliminary valuation work shows that the Company's enterprise value is materially less than $132 million -- i.e., the approximate principal amount of the 9.00% Senior Secured Notes due 2016 outstanding as of the Petition Date. The preliminary valuation work is based upon the assumption that FiberTower's spectrum licenses will not be terminated. Fibertower Spectrum disclosed $106,630,000 in assets and $175,501,975 in liabilities as of the Chapter 11 filing. Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at Hogan Lovells and Willkie Farr and Gallagher LLP serve as special FCC counsel. FTI Consulting serve as financial advisor. BMC Group Inc. serve as claims and noticing agent. The petitions were signed by Kurt J. Van Wagenen, president. Wells Fargo Bank, National Association -- as indenture trustee and collateral agent to the holders of 9.00% Senior Secured Notes due 2016 owed roughly $132 million as of the Petition Date -- is represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad Hoc Committee of Holders of the 9% Secured Notes Due 2016 is represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya, Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark Elmore, Esq., at Haynes and Boone, LLP, as local counsel. U.S. Bank, National Association -- in its capacity as successor indenture trustee and collateral agent to holders of the 9.00% Convertible Senior Secured Notes due 2012, owed $37 million as of the Petition Date -- is represented by Michael B. Fisco, Esq., at Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq., at McGuire Craddock & Strother PC as local counsel. William T. Neary, the U.S. Trustee for Region 6 appointed five members to the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee is represented by Otterbourg, Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman & Leonard, P.A. Goldin Associates, LLC serves as its financial advisors. FIBERTOWER CORP: Willkie Farr Okayed as FCC Regulatory Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Fibertower Network Services Corp., et al., to employ Willkie Farr & Gallagher LLP as special FCC regulatory counsel. As reported in the Troubled Company Reporter on Oct. 2, 2012, according to the Debtors, they have customer service agreements with major U.S. wireless carriers. The Debtors also hold separate national-scope service agreements with Verizon Business and CenturyLink which allow them to provide government grade transport services to the United States General Services Administration and other governmental entities. WF&G has been the Debtors' long-term counsel with respect to matters pertaining to, inter alia, FCC regulatory matters. As reported in the TCR on Aug. 28, 2012, the Debtors filed a lawsuit against the Federal Communications Commission to assert its grasp on their most valuable asset: the right to use the national 740 MHz spectrum that covers some of the biggest U.S. cities. In particular, WF&G will prepare and file applications for FCC approval, which is required under the Communications Act of 1934, for the transfer of the Debtors' FCC licenses and authorizations from pre-bankruptcy FiberTower Network Services Corp., et al., to the debtors-in-possession and from the debtors-in-possession to any post-bankruptcy owners of the licenses and authorizations. In addition, WF&G will advise Debtors on communications law matters as they relate to the Debtors' plan of reorganization. Finally, WF&G will also assist in the Debtors' efforts to obtain FCC approval for renewal of the Debtors' licenses to operate in the 24 and 39 GHz spectrum bands for which Debtors were required to meet the FCC's so-called substantial service build out requirement by June 1, 2012. In assisting in the renewal process, WF&G will be careful not to duplicate work performed by Debtors' other FCC counsel. The hourly billing rates at WF&G range from $400 and $1,090 for attorneys and from $120 and $310 for paralegals. The professionals at WF&G responsible for the matter and their hourly rates are: Thomas Jones $800 Mike Jones $700 Mia Hayes $535 Matt Jones $375 These individuals may be assisted by other professionals and paraprofessionals at WF&G from time to time as necessary to ensure that the Debtors' interests are being protected. To the best of the Debtors' knowledge, WF&G does not represent or hold any interest adverse to the Debtors or their estates with regard to the matters on which WF&G will be employed. About FiberTower Corp. FiberTower Corporation, FiberTower Network Services Corp., FiberTower Licensing Corp., and FiberTower Spectrum Holdings LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos. 12-44027 to 12-44031) on July 17, 2012, together with a plan support agreement struck with prepetition secured noteholders. FiberTower is an alternative provider of facilities-based backhaul services, principally to wireless carriers, and a national provider of millimeter-band spectrum services. Backhaul is the transport of voice, video and data traffic from a wireless carrier's mobile base station, or cell site, to its mobile switching center or other exchange point. FiberTower provides spectrum leasing services directly to other carriers and enterprise clients, and also offer their spectrum services through spectrum brokerage arrangements and through fixed wireless equipment partners. FiberTower's significant asset is the ownership of a national spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum licenses, including over 740 MHz in the top 20 U.S. metropolitan areas and, in the aggregate, roughly 1.72 billion channel pops (calculated as the number of channels in a given area multiplied by the population, as measured in the 2010 census, covered by these channels). FiberTower believes the Spectrum Portfolio represents one of the largest and most comprehensive collections of millimeter wave spectrum in the U.S., covering areas with a total population of over 300 million. As of the Petition Date, FiberTower provides service to roughly 5,390 customer locations at 3,188 deployed sites in 13 markets throughout the U.S. The fixed wireless portion of these hybrid services is predominantly through common carrier spectrum in the 11, 18 and 23 GHz bands. FiberTower's biggest service markets are Dallas/Fort Worth and Washington, D.C./Baltimore, with additional markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit, Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco and Tampa. As of June 30, 2012, FiberTower's books and records reflected total combined assets, at book value, of roughly $188 million and total combined liabilities of roughly $211 million. As of the Petition Date, FiberTower had unrestricted cash of roughly $23 million. For the six months ending June 30, 2012, FiberTower had total revenue of roughly $33 million. With the help of FTI Consulting Inc., FiberTower's preliminary valuation work shows that the Company's enterprise value is materially less than $132 million -- i.e., the approximate principal amount of the 9.00% Senior Secured Notes due 2016 outstanding as of the Petition Date. The preliminary valuation work is based upon the assumption that FiberTower's spectrum licenses will not be terminated. Fibertower Spectrum disclosed $106,630,000 in assets and $175,501,975 in liabilities as of the Chapter 11 filing. Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at Hogan Lovells and Willkie Farr and Gallagher LLP serve as special FCC counsel. FTI Consulting serve as financial advisor. BMC Group Inc. serve as claims and noticing agent. The petitions were signed by Kurt J. Van Wagenen, president. Wells Fargo Bank, National Association -- as indenture trustee and collateral agent to the holders of 9.00% Senior Secured Notes due 2016 owed roughly $132 million as of the Petition Date -- is represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad Hoc Committee of Holders of the 9% Secured Notes Due 2016 is represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya, Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark Elmore, Esq., at Haynes and Boone, LLP, as local counsel. U.S. Bank, National Association -- in its capacity as successor indenture trustee and collateral agent to holders of the 9.00% Convertible Senior Secured Notes due 2012, owed $37 million as of the Petition Date -- is represented by Michael B. Fisco, Esq., at Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq., at McGuire Craddock & Strother PC as local counsel. William T. Neary, the U.S. Trustee for Region 6 appointed five members to the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee is represented by Otterbourg, Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman & Leonard, P.A. Goldin Associates, LLC serves as its financial advisors. FORT LAUDERDALE: Receiver Hiring Salazar Jackson as Counsel ----------------------------------------------------------- Margaret Smith as receiver for the real and personal property for the bankruptcy estate of Fort Lauderdale BoatClub, Ltd., asks the U.S. Bankruptcy Court for the Southern District of Florida for authority to employ Salazar Jackson, LLP, as her counsel in the Debtor's Chapter 11 case, nunc pro tunc to June 16, 2012. To the best of the Receiver's knowledge, Salazar Jackson (a) does not hold or represent any interest adverse to the estate; and (b) is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Salazar Jackson will provide these services: (a) provide legal advice with respect to the Receiver's powers and duties in administration of the estate, along with other assets in which the estate holds any economic or other equity interests; (b) prepare on behalf of the Receiver all of the necessary applications, motions, answers, orders, reports and other legal papers; (c) appear in Court and to protect the interests of the Receiver and estate before the Court; (d) assist with any recovery or disposition of assets; and (e) perform other legal services for the Receiver that may be necessary and proper in the Debtor's case. Salazar Jackson has advised the Receiver that the current hourly rates of the principal attorneys, law clerks, and paralegals proposed to represent the Receiver are: Luis Salazar, Esq. $450 per hour Aaron P. Honaker, Esq. $350 per hour Celi S. Aguilar, Esq. $285 per hour Karina Dominguez, Esq. $185 per hour Other attorneys, law clerks, and paralegals will render services to the Receiver as needed. About Fort Lauderdale BoatClub Naples, Florida-based Fort Lauderdale BoatClub, Ltd., owns a fully developed and operational marina facility formerly known as Jackson Marine Center in Fort Lauderdale. The marina, which has a 12-acre prime intracoastal waterway real estate, is being leased to G. Robert Toney & Associates Inc. doing business as National Liquidators, for $75,000 per month (reduced from the previous rate $160,000 per month). The Company filed for Chapter 11 protection (Bankr. S.D. Fla. Case No. 12-28776) on Aug. 2, 2012. Bankruptcy Judge Raymond B. Ray presides over the cases. Barry P. Gruher, Esq., and Mariaelena Gayo-Guitian, Esq., at Genovese Joblove & Battista, P.A., in Fort Lauderdale, Fla., represent the Debtor in its restructuring effort. The Debtor has scheduled assets of $13,483,209 and liabilities of $10,340,756. The petition was signed by Edward J. Ruff, president. No creditors' committee has yet been appointed in this case. FR 160: Hearing Tomorrow on FRGC Bid to File Competing Plan ----------------------------------------------------------- Creditor Flagstaff Ranch Golf Club asks the U.S. Bankruptcy Court for the District of Arizona to terminate FR 160 LLC's exclusivity period to allow it to file a competing liquidating plan, on the grounds that (1) allowing a competing plan is in the best interests of all the creditors; and (2) Debtor's "new value" plan provides cause for terminating the exclusivity period. FRGC, the owner and operator the golf course clubhouse and maintenance facility at the Flagstaff Ranch Golf Club Community, said that beginning in Jan. 1, 2012, the Debtor ceased making timely payment of the Membership Dues associated with the 51 residential lots and an additional tract of land (Tract H) at the Flagstaff Ranch, the Flagstaff Ranch Property Owners Association dues, or the Mutual Waste Water Company Assessments. On Sept. 10, 2012, the Debtor filed its Plan of Reorganization and Disclosure Statement. The Debtor revealed that it was setting forth a "new value" plan, wherein the Debtor's sole member, IMHFC, would retain its equity interest for a cash infusion of $500,000. The Debtor also proposed to pay all of its creditors with the sale proceeds from its lots, despite the fact that it had not sold a single lot over the past three years. The Plan suggested that the Debtor would be able to repay its creditors from said sales over the course of the next decade, but that if sufficient sales did not occur, FRGC would receive a portion of the Debtor's lots for each year that the Debtor had a payment shortfall, meaning that all other creditors would receive no payment if Debtor failed to generate sales, commonly referred to as a "dirt for debt" plan. Nowhere in Debtor's Plan does it propose any form of competitive bidding for IMHFC's old equity interests. If the exclusivity period is terminated, FRGC will promptly file a competing liquidating plan, which will include the following basic terms, among other things: (i) the immediate sale of the Debtor's lots and Tract H, providing for a full right of FRGC, to credit bid; (ii) distribution to FRGC of the proceeds of such sale (to the extent not the winning bidder); and (iii) the payment of non- insider creditors without an alternative source of payment, a dividend of 50% of their allowed claim. A hearing on the motion has been scheduled for Oct. 17, 2012, at 10:00 a.m. About FR 160 FR 160 LLC, originally named IMH Special Asset NT 160 LLC, was formed for the purpose of owning 51 residential lots and Tract H at the Flagstaff Ranch Golf Club Community generally located in Coconino County, Arizona. FR 160 LLC filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-13116) in Phoenix on June 12, 2012. FR 160, which claims to be a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets of up to $50 million and debts of up to $100 million. Attorneys at Snell & Wilmer L.L.P., in Phoenix, serve as counsel. The U.S. Trustee has not appointed an official committee in the case due to an insufficient number of persons holding unsecured claims against the Debtor that have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint a committee should interest develop among the creditors. Attorneys at Gordon Silver, in Phoenix, represent Creditor Flagstaff Ranch Golf Club as counsel. FREMONT HOSPITALITY: Chapter 11 Stays Sandusky Foreclosure Action ----------------------------------------------------------------- The News-Messenger reports that Fremont Hospitality Group has filed for Chapter 11 bankruptcy, automatically stopping foreclosure proceedings by the Sandusky County Treasurer's Office. The report notes Fremont Hospitality owes more than $300,000 in delinquent taxes. According to the report, records kept by the Sandusky County Auditor indicate the company owes $334,139.85 in taxes, assessments, penalties, charges and interest. Donald Harris, an attorney representing Fremont Hospitality Group, said the company has a payment plan in place and will pay all of the taxes owed. Based in Fremont, Ohio, Fremont Hospitality Group filed for Chapter 11 protection (Bankr. N.D. Ohio Case No. 12-34424) on Sept. 28, 2012. Judge Richard L. Speer presides over the case. Donald Harris Law Firm represents the Debtor. The Debtor listed assets of less than $50,000, and debts of between $1 million and $10 million. FUELSTREAM INC: Fires CEO; Names John Thomas as President --------------------------------------------------------- Russell Adler was dismissed from the Board of Directors of Fuelstream, Inc., and was also dismissed as the chief executive officer and secretary of the Company on Oct. 8, 2012, On Oct. 8, 2012, John D. Thomas was appointed as President, Secretary, and a member of the Board of Directors. Mr. Thomas, age 40, practices law specializing in general corporate law, securities, and mergers and acquisitions for his law firm, John D. Thomas P.C. From March 2008 until March 2012, Mr. Thomas served as a member of the board of directors and chairman of the audit committee of Bayhill Capital, Inc. (BYHL.OB), a filer of reports pursuant to 13(a) and 15(d) of the Securities Exchange Act of 1934. From July, 2009 to May, 2011, Mr. Thomas served as a member of the board of directors of Vican Resources, Inc. (OTC: VCAN), a filer of reports pursuant to 13(a) and 15(d) of the Securities Exchange Act of 1934. From May 2006 to June 2008, Mr. Thomas was the director of the microcap division for MCC Global NV (FSE: IFQ2), an international financial services and investment conglomerate based in London and traded on the Geregeltermarkt of the Frankfurt Stock Exchange. He has also been general legal counsel for Legal Life Plans, Inc., (OTC: LLFP) since May, 2004 and as a member of the board of directors since March 2012, a filer of reports pursuant to 13(a) and 15(d) of the Securities Exchange Act of 1934. Since August 2009, Mr. Thomas has been a member of the board of directors of London Pacific & Partners, Inc. (OTC: LDPP), a Los Angeles and London-based investment and advisory firm specializing in healthcare and hospitality finance. In August, 2009, Mr. Thomas entered into a settlement with the Commodity Futures Trading Commission wherein Mr. Thomas consented to an order of permanent injunction from his future involvement in commodity pools trading and commodities operations. Mr. Thomas holds a Juris Doctor degree from Texas Tech University School of Law and is licensed to practice law in Texas and Utah. About Fuelstream Draper, Utah-based Fuelstream, Inc., is an in-wing and on-location supplier and distributor of aviation fuel to corporate, commercial, military, and privately-owned aircraft throughout the world. The Company also provides a variety of ground services either directly or through its affiliates, including concierge services, passenger andbaggage handling, landing rights, coordination with local aviation authorities, aircraft maintenance services, catering, cabin cleaning, customsapprovals, and third- party invoice reconciliation. The Company's personnel assist customers in flight planning and aircraft routing aircraft, obtaining permits, arranging overflies, and flight follow services. The Company's balance sheet at June 30, 2012, showed $3.1 million in total assets, $4.9 million in total liabilities, and a stockholders' deficit of $1.8 million. The accumulated deficit as of June 30, 2012, was $33.0 million and the total stockholders' deficit at June 30, 2012 was $1.8 million. Morrill & Associates, LLC, in Bountiful, Utah, expressed substantial doubt about Fuelstream's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has negative working capital, negative cash flows from operations and recurring operating losses. GABRIEL SALES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Gabriel Sales Co. of Oak Park, Inc. 52 East North Avenue Northlake, IL 60164 Bankruptcy Case No.: 12-39770 Chapter 11 Petition Date: October 5, 2012 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Barbara L. Yong, Esq. GOLAN & CHRISTIE LLP 70 West Madison, Suite 1500 Chicago, IL 60602 Tel: (312) 263-2300 E-mail: blyong@golanchristie.com - and ? 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: $163,980 Scheduled Liabilities: $1,123,881 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb12-39770.pdf The petition was signed by Stuart A. Swezey, president. GCA SERVICES: Term Loan Increase No Impact on Moody's B2 CFR/PDR ---------------------------------------------------------------- Moody's Investors Service said that the GCA Services Group, Inc.'s B2 corporate family and probability of default ratings and other debt ratings will not change following the company's announcement that it will increase the first lien term loan and revolving credit facility to $325 million and $65 million, respectively, from the originally proposed $315 million and $60 million, respectively. The outlook remains stable. Rating Rationale The principal methodology used in rating GCA was the Global Business & Consumer Service Industry Methodology published in October 2010. GCA provides custodial, staffing and related services to business and educational customers in the U.S. and Puerto Rico. Controlled by affiliates of Blackstone Group, Moody's expects 2012 revenue of over $800 million and EBITDA (Moody's Adjusted) of about $70 million. GIBSON ENERGY: OMNI Acquisition No Impact on Moody's Ratings ------------------------------------------------------------ Moody's Investors Service views Gibson Energy Inc.'s plan to acquire OMNI Energy Services (OMNI) (unrated) for US$445 million as credit positive. The acquisition reduces Gibsons' leverage and expands the environmental services business that began with the acquisition of Palko Environmental Ltd. (unrated) in December 2011. As reported by the Troubled Company Reporter on April 30, 2012, Moody's Investors Service upgraded Gibson Energy Inc's Corporate Family Rating (CFR) to Ba3 from B1, and upgraded the company's senior secured bank credit facility to Ba2 from B1. The Speculative Grade Liquidity rating was changed to SGL-3 from SGL- 2. The outlook is stable. Gibson Energy Inc. is a Calgary, Alberta based midstream energy company engaged in the transportation, storage, blending, processing, marketing and distribution of crude oil and related products. GULFPORT ENERGY: Moody's Assigns B3 CFR, Rates $250MM Notes B3 -------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Gulfport Energy Corporation including a B3 Corporate Family Rating (CFR) and a B3 rating to Gulfport's proposed $250 senior unsecured notes. Moody's also assigned a SGL-2 Speculative Grade Liquidity Rating, reflecting good liquidity. The outlook is stable. Net proceeds from the note offering will be used to repay balances currently outstanding under Gulfport's senior secured revolving bank facility and to prefund capital expenditures. Issuer: Gulfport Energy Corporation Assignments: Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3 Speculative Grade Liquidity Rating, Assigned SGL-2 US$250M Senior Unsecured Regular Bond/Debenture, Assigned B3 US$250M Senior Unsecured Regular Bond/Debenture, Assigned a range of LGD4, 58 % Ratings Rationale The B3 CFR reflects Gulfport's limited production base, very short reserve life in relation to proved developed (PD) reserves, high capital requirements through 2014, and significant development and execution risks surrounding its aggressive drilling program in the emerging Utica Shale play. The B3 rating is supported by Gulfport's oil-weighted production profile anchored in the Louisiana Gulf Coast, which has long production history and produces significant free cash flow at today's oil prices, solid organic growth prospects in the Utica and good liquidity. Gulfport plans to spend roughly 80% of its capital budget in developing the Utica acreage through 2014 as it drills approximately 140 new wells to hold leases and establish a larger production and reserve base. However, this rapid ramp up will depend on transportation and processing infrastructure getting built and satisfactory well performance. Utica still remains one of the least developed among major shale plays and therefore, poses greater uncertainty around ultimate recovery, drilling economics and sustainability. Given Gulfport's limited shale and horizontal drilling experience, Moody's believes the company will be challenged in the initial years while trying to optimize production and returns. The B3 rating on the proposed senior unsecured notes reflects both the overall probability of default of Gulfport, to which Moody's assigns a PDR of B3, and a loss given default of LGD4 (58%). The company is expected to have a $45 million senior secured revolving credit facility (following completion of an IPO of its Permian assets under Diamondback Energy, Inc.) that will have first-lien claims to substantially all of Gulfport's assets. Moody's overrode the Moody's Loss Given Default Methodology generated note rating given the likelihood of higher than average recovery in a default scenario because of Gulfport's substantial underlying asset value. However, the notes could get notched down from the CFR if the size of the priority claim borrowing base revolver increases significantly in the future. Both the notes and the credit facility will have upstream guarantee from all of Gulfport's current and future restricted subsidiaries other than Grizzly Holdings, Inc. (Grizzly, an unrestricted subsidiary) that holds Gulfport's oil sands interests in Alberta. Moody's expects Gulfport to have good liquidity to cover its cash needs through the end of 2013, which is captured in Moody's SGL-2 rating. Proforma for the note issue, Gulfport would have approximately $188 million of cash and full availability under its borrowing base revolver, which expires in May, 2015. The free cash flow generated from the Louisiana Gulf Coast assets together with balance sheet cash should cover the large funding requirements at Utica. Gulfport has substantial alternate liquidity through its roughly 22.5% equity interest (post-IPO) in Diamondback, 24.9% interest in Grizzly and natural gas investments in Thailand. The stable outlook assumes Gulfport will manage its growth without meaningfully weakening liquidity. Successful execution of the Utica drilling program leading to higher production and reserves will dictate upward rating progression. An upgrade would be considered if production can be sustained above 20,000 boe/d alongside a retained cash flow to debt ratio of at least 40%. A downgrade could occur if the company acquires additional non- producing properties using debt, and/or significantly ramps up capital spending prior to achieving its production targets. If the debt to average daily production ratio rises above 35,000 boe/d or liquidity appears inadequate, a prompt downgrade is likely. The principal methodologies used in rating Gulfport were the Independent Exploration and Production Industry methodology published in December 2011, and the Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA, published in June 2009. Based in Oklahoma City, Oklahoma, Gulfport Energy Corporation is an independent E&P company with principal producing properties located in the Louisiana Gulf Coast and the Utica Shale in Eastern Ohio. GILL ENTERPRISES: Case Summary & 15 Unsecured Creditors ------------------------------------------------------- Debtor: Gill Enterprises, LLC 776 Willow Drive North Seymour, IN 47274 Bankruptcy Case No.: 12-92242 Chapter 11 Petition Date: October 10, 2012 Court: United States Bankruptcy Court Southern District of Indiana (New Albany) Judge: Basil H. Lorch III Debtor's Counsel: KC Cohen, Esq. KC COHEN, LAWYER, PC 151 N Delaware St., Ste. 1104 Indianapolis, IN 46204 Tel: (317) 715-1845 Fax: (317) 916-0406 E-mail: kc@esoft-legal.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 15 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/insb12-92242.pdf The petition was signed by Frederick Gill, president. GLOBAL AVIATION: Amends Plan Ahead of Tomorrow's Hearing -------------------------------------------------------- Global Aviation Holdings Inc. amended its proposed reorganization plan and explanatory disclosure statement ahead of a hearing on Oct. 17, 2012 at 11:00 a.m. The Amended Plan incorporates a settlement and compromise reached with the DIP lenders, an ad hoc group of senior noteholders, and the Debtors' unions. The settlement provides that the reorganized Debtor will implement an employee equity plan, pursuant to which 25% of the new common stock and warrants to purchase 15% of the new common stock will be distributed for the benefit of flight attendants, dispatchers and pilots represented by unions, as well as non unionized employees. The Debtors will pay the reasonable and document fees and expenses of the advisors of the International Brotherhood of Teamsters, Airline Division (representing the flight attendants) and the Air Line Pilots association. The parties also agree to the termination of the Debtors' obligations to contribute to the IBT Pension Plan effective Sept. 12, 2012. The pilots of North American Airlines Inc. will participate in any potential alternative profit sharing plan. Under the Plan, senior noteholders owed $111.4 million will receive (i) a $95 million senior secured term loan, (ii) a second lien debt of $40 million, with a 5-year term, (iii) 100% of the new common stock, subject to dilution. The lone holder of the second lien claim totaling $98.1 million will not receive any distribution. Holders of general unsecured claims, as well as holders of equity interest, won't receive anything. GSO Capital Solutions, the Debtors' second lien lender, filed a preliminary objection to the Disclosure Statement. The Debtors said they intend to continue to negotiate with their second lien lender and their other major stakeholders in the time leading up to the approval of this Disclosure Statement and in advance of any hearing to consider confirmation of the Plan. To that end, the Debtors have been in dialogue with the advisors for the Official Committee of Unsecured Creditors as well as the advisors for GSO. It is the Debtors' hope that they will come to a consensual resolution with the Creditors Committee and their second lien lender in advance of the confirmation hearing. To the extent that the Debtors cannot reach full consensus, however, the Debtors believe that they already have the requisite creditor support necessary to confirm the Plan and intend to proceed on a path to confirmation of the Plan in an expeditious manner. A copy of the First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/Global_Aviation_Amended_Plan_Outline.pdf A blacklined copy of the First Amended Plan is available for free at: http://bankrupt.com/misc/Global_Aviation_Blacklined_Plan.pdf About Global Aviation Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011. Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan. Wells Fargo Bank NA is agent for both. Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans. On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven member official committee of unsecured creditors in the case. The Committee tapped Lowenstein Sandler PC as its counsel, and Imperial Capital, LLC as its financial advisor. GLOBAL CASINOS: Schumacher & Assoc. Raises Going Concern Doubt -------------------------------------------------------------- Global Casinos, Inc., filed on Oct. 12, 2012, its annual report on Form 10-K for the fiscal year ended June 30. Schumacher & Associates, Inc., in Denver, Colo., expressed substantial doubt about Global Casinos' ability to continue as a going concern. The independent auditors noted that the Company has suffered significant losses, and has working capital and stockholders' deficits. The Company reported a net loss of $808,671 on $5.2 million of net revenues in fiscal 2012, compared with a net loss of $1.4 million on $5.5 million of net revenues in fiscal 2011. Results for fiscal 2011 included non-cash impairment charges to goodwill ($1,008,496) and the Company's investment in ImageDoc.com ($120,000). The Company did not recognize any impairment charges in fiscal 2012. The Company's balance sheet at June 30, 2012, showed $3.8 million in total assets, $2.1 million in total liabilities, and stockholders' equity of $1.7 million. A copy of the Form 10-K is available at http://is.gd/0XVOin Boulder, Colo.-based Global Casinos, Inc., and its wholly owned subsidiaries operate in the domestic gaming industry. As of June 30, 2012, Global had two operating subsidiaries: one which owns and operates the Bull Durham Saloon & Casino located in Black Hawk, Colorado; and one which owns and operates the Doc Holliday Casino located in Central City, Colorado. In addition, Global also has a 25% equity investment in an entity that owns certain gaming technology. This investment is being accounted for under the equity method. Effective June 1, 2012, the Company entered into a definitive Split-Off Agreement with Gemini Gaming LLC to sell all of its gaming properties, interests and operations. Gemini is controlled by Clifford Neuman, the Company's President and Director, Pete Bloomquist, a Director, and Doug James, the General Manager of the Company's two casinos: Bull Durham Casino and Doc Holliday Casino. Also effective June 1, 2012, the Company entered into a definitive Stock Purchase Agreement with Christopher Brogdon to acquire all of the issued and outstanding equity securities of Georgia Healthcare REIT, Inc. ("Georgia REIT") which, through a controlled subsidiary, owns real property in Eastman, Georgia that is operated as a skilled nursing home through a third-party operating lease. The Split-Off and Stock Purchase Agreement will close concurrently and is part of a planned transition of the Company from one engaged in the gaming industry to a healthcare REIT. Consummation of the Reorganization is subject to regulatory approvals. The Company's Preliminary Information Statement on Schedule 14C, describing the Reorganization is currently under review by the SEC. A copy of the Schedule 14C is available at http://is.gd/zFAiCT GMX RESOURCES: Wants Shareholders OK of Reverse Stock Split ----------------------------------------------------------- GMX RESOURCES INC. will hold a special meeting of the shareholders on Nov. 29, 2012, to seek approval on the granting to the Board of Directors the discretionary authority to effect a reverse stock split in a range of not less than 1-for-5 shares and not more than 1-for-13 shares of the Company's issued and outstanding common stock. The Reverse Stock Split Proposal will not include any change the number of authorized shares of the Company's common stock. The Company believes that granting the Board of Directors the discretion to effect a reverse stock split provides the Company with maximum flexibility to act in the best interests of its shareholders. Should the appropriate circumstances arise, effecting the reverse stock split would, among other things, help the Company to: * Meet certain continued listing requirements of the New York Stock Exchange; * Appeal to a broader range of investors to generate greater investor interest in the Company; and * Improve the perception of our common stock as an investment security. The Board's decision as to whether and when to implement the reverse stock split will be based on a number of factors including shareholder approval, prevailing market conditions, existing and expected trading prices for the Company's common stock, actual or forecasted results of operations and the likely effect of those results on the market price of the Company's common stock. The Board of Directors reserves the right not to implement the reverse split should it be deemed not in the best interest of the Company's shareholders. The reverse stock split would not affect any shareholder's percentage ownership interests or proportionate voting power or other rights, except to the extent that it results in a shareholder receiving cash in lieu of fractional shares. Important Information about the Reverse Split Proposal About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. GMX Resources' balance sheet at June 30, 2012, showed $394.79 million in total assets, $462.46 million in total liabilities and a $67.67 million total deficit. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. * * * As reported by the TCR on Sept. 25, 2012, Standard & Poor's Ratings Services lowered its corporate credit rating on GMX Resources Inc. to 'SD' (selective default) from 'CC', reflecting its completion of an exchange offer for a portion of its 5.0% convertible notes due 2013 and 4.5% convertible notes due 2015. GOURMET GREEN: Case Summary & Largest Unsecured Creditor ---------------------------------------------------------- Debtor: Gourmet Green Room Inc. 2000 Cotner Avenue Los Angeles, CA 90025 Bankruptcy Case No.: 12-43685 Chapter 11 Petition Date: October 5, 2012 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Richard M. Neiter Debtor's Counsel: Brett K. Shaad, Esq. LAW OFFICE OF BRETT K. SHAAD 864 N. West Knoll Drive West Hollywood, CA 90069-4714 Tel: (310) 729-9904 Fax: (424) 249-3895 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Matthew Tanney, president. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hamid Dahdashty Loan $1,300,000 809 Whittier Drive Beverly Hills, CA 90210 HARMAN INTERNATIONAL: Moody's Withdraws 'Ba1' CFR/PDR ----------------------------------------------------- Moody's Investors Service upgraded the ratings of Harman International Industries, Inc. to the investment grade category, with the assignment of a Baa3 rating to the company's new senior unsecured bank credit facilities. The rating outlook is stable. This rating action concludes the review initiated on September 14, 2012. Harman's new $750 million senior unsecured multi-currency revolving credit facility replaces the company's existing $550 million senior secured multi-currency revolving credit facility, the rating of which is withdrawn. Proceeds from the new $300 million senior unsecured term loan along with $100 million of cash on hand will be used to repay Harman's $400 million of convertible notes maturing on October 15th 2012. Ratings assigned: Baa3 to the new $750 million senior unsecured multi-currency revolving credit facility due December 2017; Baa3 to the new $300 million senior unsecured term loan facility due December 2017 Ratings withdrawn: Ba1, Corporate Family Rating; Ba1, Probability of Default Rating; Baa2 (LGD2, 16%) rating of the $550 million senior secured multi-currency revolving credit facility due December 2015; SGL-1, Speculative Grade Liquidity Rating Rating Rationale Harman's Baa3 senior unsecured rating recognizes the company's lower financial leverage and increased financial flexibility following the refinancing of its revolving credit facility and repayment of the company's convertible notes. Moody's expects Harman's new capital structure to strongly support investments across its business lines, particularly within the company's infotainment segment which represents the vast majority of the company's $16.1 billion automotive backlog. Harman's high levels of R&D spending, averaging over 8% of revenues over the past several years, is expected to continue over the intermediate-term. While an estimated 40% of Harman's revenues are derived from European markets, greater penetration of new automotive platforms with a higher value mix of the company's scalable and custom designed products should help mitigate impact of weak European macroeconomic conditions on automotive demand. Harman's positive cash flow generation and new capital structure is likely to support additional shareholder friendly financial policies over the near-term. However, the ratings incorporate Moody's view that the company's financial policies will be balanced against operating flexibility needed to manage through the current regional challenges in the automotive industry. Harman's stable rating outlook incorporates the company's strong profit margins, extensive book of new automotive business awards, and excellent liquidity profile. Harman's liquidity profile is supported by substantial cash balances, expected free cash flow generation and the new upsized $750 million revolving credit facility. As of June 30, 2012, the company maintained approximately $820 million of cash, cash equivalents and short-term investments. While $100 million of this cash will be used as part of the repayment of the company's convertible notes, seasonally positive cash flow generation is expected to replenish a significant portion of this usage. Harman is expected to generate consistent positive free cash flow over the next few years even after considering ongoing R&D expenditures and higher working capital needs to support sales growth. As of June 30, 2012, the company's existing revolving credit facility was undrawn with about $8.7 million of letters of credit outstanding. Harman is expected to operate with ample headroom under the bank facility's financial covenants over the near-term. Factors that could lead to a higher rating or outlook include: i) continued growth in the company's global automotive and consumer businesses, ii) maintenance of investment to support the company's brand names and competitive market positions; and iii) further expansion of EBITA margins to the double-digit range, while generating positive free cash flow. Consideration for a higher rating or outlook could also result from EBITA/Interest sustained above 7.5x. Factors that could lead to a lower rating or outlook include: i) failure to sustain technology leadership which results in any meaningful deterioration of Harman's profit margins, ii) more aggressive shareholder return policies or acquisitions strategies, or iii) negative free cash flow generation. Consideration for a lower rating or outlook could also result from Moody's expectation that any combination of the above or other factors could lead to debt/EBITDA exceeding 2.0x on a sustained basis, or a deterioration in the company's liquidity profile. Harman International Industries, Incorporated, headquartered in Stamford, Connecticut, is a leading manufacturer of high quality, high fidelity audio products and electronic systems for the consumer, automotive, and professional markets. Revenues for fiscal year 2012 were approximately $4.4 billion. The principal methodology used in rating Harman International Industries, Inc. was the Global Automotive Supplier Industry Methodology published in January 2009. HAWKER BEECHCRAFT: Bank Debt Trades at 36% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 64.19 cents-on- the-dollar during the week ended Friday, Oct. 12, an increase of 0.33 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014. The loan is one of the biggest gainers and losers among 199 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. HIGH PLAINS: Ty Miller Resigns from Board of Directors ------------------------------------------------------ Ty Miller resigned as a director of High Plains Gas, Inc., effective Oct. 3, 2012. The Board of Directors of the Company accepted Mr. Miller's resignation. About High Plains Houston, Texas-based High Plains Gas, Inc., is a provider of goods and services to regional end markets serving the energy industry. It produces natural gas in the Powder River Basin located in Northeast Wyoming. It provides construction and repair and maintenance services primarily to the energy and energy related industries mainly located in Wyoming and North Dakota. The Company reported a net loss of $57.48 million on $17.15 million of revenues for 2011, compared with a net loss of $5.48 million on $2.61 million of revenues for 2010. The Company's balance sheet at June 30, 2012, showed $10.26 million in total assets, $40.42 million in total liabilities and a $30.16 million total stockholders' deficit. Eide Bailly LLP, in Greenwood Village, Colorado, issued a "going concern" qualification on the financial statements for the year ending Dec. 31 2011, citing significant operating losses which raised substantial doubt about High Plains Gas' ability to continue as a going concern. HOSTESS BRANDS: Unsecureds to Get Nothing Under Plan ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hostess Brands Inc. filed a reorganization plan telling unsecured creditors with more than $2.5 billion in claims that they will receive nothing when the baker of Wonder bread emerges from bankruptcy reorganization. According to the report, whether Hostess is even able to confirm a Chapter 11 plan depends on raising $88 million in cash plus enough to pay off the amount outstanding under the $75 million loan financing the reorganization that began in January. Although there are no agreements as yet to supply the cash, Hostess said in disclosure materials that it is undertaking "significant marketing and sales efforts." The plan calls for issuing almost $700 million in various levels of new secured debt. Most will pay interest through issuance of more debt. The report relates that for their services while in bankruptcy, professionals will have 18% of their fees paid with new third-lien notes. Hostess says in the disclosure statement that the third- lien debt will trade "at a significant discount to the face amount." Holders of $80.4 million of first-lien debt will receive as much as $59 million in cash plus new first-lien notes. The report notes that holders of $340.7 million in other first- lien debt are being offered new first-lien debt. In total, there is to be at least $361.8 million in new first-lien debt on the company's emergence from Chapter 11. For $191.4 million in existing third-lien debt, the holders will receive 75% of the new stock and about $172 million in new third-lien notes. The other 25%, plus a $100 million third-lien note, will go to the unions in return for contract concessions. Trade suppliers who provided goods shortly before bankruptcy are to receive $5 million in new third-lien debt. While other unsecured creditors receive nothing, the official creditors' committee for now retains the right to sue lenders for invalidation of their claims or liens. The Bloomberg report discloses that workers from the Teamsters union voted to ratify a new contract with 8% in wage concessions and 17% in benefit reductions. The bankruptcy court imposed the same concessions on members of the bakery workers' union who voted down the proposed contract. To reduce liability on pensions, Hostess will withdraw from multi-employer pension plans and may later re-enter the plans with "significantly reduced contributions." Unsecured creditors won't be voting on the plan. Because they receive nothing, the class is deemed to reject the plan. Lisa Uhlman at Bankruptcy Law360 reports that Hostess Brands filed a Chapter 11 bankruptcy plan that targets a January exit from bankruptcy, would leave major equity holders and unsecured creditors with zero recovery, and would cut workers' pay. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. HOSTESS BRANDS: Committee Joins as Party in DIP Loan Agreement -------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Hostess Brands, Inc., et al., filed with the U.S. Bankruptcy Court for the Southern District of New York a joinder to the stipulation and agreed order with respect to Fourth Amendment to DIP Credit Agreement dated Sept. 4, 2012. The Committee noted that a revised form of stipulation included the Committee as a signatory. The stipulation was entered among the Debtors; (ii) General Electric Capital Corporation, as administrative and collateral agent under that certain Credit Agreement, dated as of Feb. 3, 2009; (iii) Silver Point Finance, LLC, acting as the administrative and collateral agent in connection with the Debtors' Debtor-in-Possession Credit, Guaranty and Security Agreement, and as the administrative and collateral agent under that certain Credit and Guaranty Agreement, dated as of Feb. 3, 2009, and as the administrative and collateral agent under that certain Third Lien Term Loan Credit Agreement; and (iv) The Bank of New York Mellon Trust Company, N.A., acting as trustee and collateral trustee for that certain Indenture, dated as of Feb. 3, 2009. A copy of the stipulation is available for free at http://bankrupt.com/misc/HostessBrands_dip_stipulation_b.pdf About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee HUBBARD PROPERTIES: Plan Trustee Hiring VMC as Accountant --------------------------------------------------------- Patricia Hubbard, plan trustee and distribution agent of Hubbard Properties, LLC, asks the U.S. Bankruptcy Court for the Middle District of Florida for authorization to employ Van Middlesworth and Company, P.A., as accountant for the Hubbard Properties, LLC Plan Trust, nunc pro tunc to Aug. 24, 2012. VMC will assist the Distribution Agent in preparing tax returns for the Plan Trust and the liquidated debtor, budgets and financial reports, as well as providing general accounting support. VMC will be compensated at a blended hourly rate of $165. VMC holds a claim for amounts due from the Debtor on account of unpaid prepetition accounting services rendered in the amount of $18,561, as evidenced by the Proof of Claim filed by VMC in the Debtor's case and docketed as Claim Number 3. The VMC Claim is classified as a Class 5 general unsecured claim under Investors Warranty of America, Inc.'s Plan of Liquidation of Hubbard Properties, which was confirmed by the Court on Aug. 23, 2012. About Hubbard Properties Hubbard Properties owns and operates a retail and entertainment complex, located in Madeira Beach, Florida, commonly known as the John's Pass Boardwalk. Investors Warranty of America, Inc. claims that it is owed $28,404,980 secured by a mortgage on the Property and an assignment of rents and related security interests. Hubbard Properties, LLC, filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 11-01274) in Tampa, Florida, on Jan. 27, 2011. David S. Jennis, Esq., Kathleen L. DiSanto, Esq., J. A. McPheeters, Esq., Suzy Tate, Esq., and Chad S. Bowen, Esq., at Jennis & Bowen, P.L., in Tampa, Fla., serve as bankruptcy counsel. The Debtor also tapped David A. Bacon, Esq., at Bacon, Bacon & Goddard, P.A., in St. Petersburg, Fla., as special counsel; and Tony Buzbee, Esq., and The Buzbee Law Firm, in Houston, Tex., as special counsel in connection with the assessment and recovery of the Debtor's BP oil spill claim, Van Middlesworth and Company, P.A., as accountant; and Claims Strategies Group, LLC, as claim consultant. In its amended schedules, the Debtor disclosed $12.6 million in assets and $23.8 million in liabilities. HYLAND SOFTWARE: Moody's Affirms 'B2' CFR; Outlook Negative ----------------------------------------------------------- Moody's Investors Service affirmed Hyland Software, Inc.'s B2 corporate family rating ("CFR") and assigned Ba3 and Caa1 ratings to the company's proposed first and second lien credit facilities. The company will use the net proceeds from the new credit facilities to refinance existing debt and pay approximately $268 million in dividends to its shareholders. Moody's lowered the outlook for Hyland's ratings to negative reflecting a large debt- financed dividend which considerably reduces the company's financial flexibility. Moody's will withdraw the ratings for Hyland's existing credit facilities at the close of the proposed transaction. Ratings Rationale The proposed dividend recapitalization will more than double Hyland's debt levels and increase its total debt-to-EBITDA leverage by 3.6x to 7.0x (Moody's adjusted). While Hyland's leverage and interest coverage metrics will temporarily deteriorate and exceed the range expected for the company's B2 rating, the affirmation of the B2 CFR considers Hyland's strong track record of revenue and profitability growth and the company's highly predictable revenues. In addition, affirmation reflects Moody's expectations that leverage should decline to about 6.0x in the next 12 to 18 months and that the Company should generate free cash flow in the low to mid-single digit percentages over this period. The B2 CFR reflects Hyland's high financial leverage, especially in the context of the company's high business risks resulting from its modest operating scale relative to some of its substantially larger and financial stronger competitors. The rating also considers Hyland's limited product portfolio focused on a niche segment within the Enterprise Content Management (ECM) software market. The B2 CFR is supported by Hyland's competitive market position, especially in the mid-market segment, and its well-regarded industry verticals-focused product offerings in a growing ECM software market. Hyland's credit profile benefits from the predictability of its revenues. Approximately 51% of the Company's revenue for LTM August 2012 were highly recurring in nature and it has low customer revenue concentration. The B2 rating is further supported by Hyland's good revenue growth prospects and Moody's expectations that the Company's leverage will progressively decline and that it will produce growing levels of free cash flow. However, the proposed dividend, which exceeds the company's annual revenues, causes significant deterioration in Hyland's credit metrics. The negative outlook reflects the company's reduced financial flexibility to absorb execution missteps and external challenges, or pursue acquisitions, at least over the next few quarters. Given Hyland's modest scale, narrow market focus, and increasing financial risk tolerance, a ratings upgrade is unlikely in the next 12 to 18 months. However, to the extent that the Company is able to increase its profitability over time while maintaining a conservative and predictable leverage profile, Hyland's ratings could be upgraded. Moody's could downgrade Hyland's ratings if the company's operating performance deteriorates as evidenced by weak license sales and operating cash flow generation. Specifically, Hyland's ratings could be downgraded if Moody's believes that the company's Total Debt-to-EBITDA (Moody's adjusted) leverage is unlikely to decline to less than 6.0x or its free cash flow remains in the low single digit percentages of total debt for an extended period of time. Additionally, deterioration in liquidity, or a material degradation in the company's business or financial risk profile resulting from a large, transformative acquisition could trigger a downgrade. Moody's has taken the following ratings actions: Issuer: Hyland Software, Inc. Corporate Family Rating -- Affirmed B2 Probability of Default Rating -- Revised to B2 from B3 $20 Million Senior Secured Revolving Credit Facility due 2017 -- Assigned Ba3 (LGD2, 27%) $320 Million Senior Secured First Lien Term Loan due 2019 -- Assigned Ba3 (LGD2, 27%) $235 Million Senior Secured Second Lien Term Loan due 2020 -- Assigned Caa1 (LGD5, 82%) $20 Million Senior Secured Revolving Credit Facility due 2015 -- Affirmed B2 (LGD3, 35%), to be subsequently withdrawn $205 Million Senior Secured Term Loan due 2016 -- Affirmed B2 (LGD 3, 35%), to be subsequently withdrawn $80 Million of add-on Senior Secured Term Loan due 2016 -- Affirmed B2 (LGD 3, 35%), to be subsequently withdrawn Outlook -- Changed to Negative from Stable The principal methodology used in rating Hyland Software, Inc. was the Global Software Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Westlake, OH, Hyland Software, Inc. provides Enterprise Content Management software solutions to enterprise customers. Private equity firm Thoma Bravo owns a majority equity interest in the Company. IA GLOBAL: Shifts to Clean Technology, Changes Name to Asura ------------------------------------------------------------ IA Global, Inc., has changed its name to Asura Development Group, Inc. The company implemented the name change to reflect a fundamental shift in its business strategy from a global services and technology company to a construction, development and clean technology company focused on rebuilding infrastructure in Japan following unprecedented natural disasters that have occurred there. The company believes its new name, Asura Development Group, Inc., better represents the nature of its current core business, namely, home construction and design led by Zest Corporation Co Ltd and Zest Home Co Ltd while allowing Asura to continue leveraging its construction business into the clean technology business by integrating solar PV into their home development projects. Asura has embarked on an aggressive "saisei" or "rebirth" strategy and has refocused its business on construction and clean technology in the aftermath of the Tohuku earthquake, tsunami and Fukushima Daiichi nuclear disaster of 2011. As a result, experts expect Japan's dependency on nuclear energy to be phased out by the 2030s. The government of Japan is accelerating the transition from nuclear power to alternative and clean energy in the form of sovereign guarantees over the next 20 years. On July 1, 2012, a new Feed-in Tariff (FiT) program became effective, which guarantees a subsidy of 42 yen (55 cents) per kilowatt hour for solar energy installations or more than 4 times the former rate of 10 yen (13 cents) per kilowatt hour. These incentives are expected to increase the renewable energy market in Japan from the current $12.7B per year to over $100B per year by the end of the decade and allow Japan to overtake Spain and Italy to become the world's second largest market for solar PV. Asura intends on addressing both the home solar PV business, which represents 80% of the solar power generated in Japan along with commercial mega- solar projects, which the company plans to address through a merger and acquisition strategy. The management of Asura believes that it is uniquely situated to take full advantage of new clean technology opportunities since it has significant technical and development experience in the cleantech business along with extensive operational experience in Japan. The "new" Asura has been through a rebirth process of its own by significantly cutting overhead, costs and company liabilities over the past two years and is now well positioned to build a solid company upon a firm foundation. As such, the company plans to complete its audit and reporting requirements within the next few months and has recently re-engaged its financial resources. Effective immediately, all future business activity will be conducted using the new name and the company headquarters has moved from San Francisco to Phoenix, Arizona. The new Web site is www.asuradevelopment.com. Except as noted, there have been no material changes in the Company's ownership or equity structure. Effective as of Sept. 24, 2012, the Company filed a Certificate of Ownership and Merger in the State of Delaware merging its recently formed wholly owned subsidiary, Asura Development Group, Inc., with and into the Company, with the Company as the surviving corporation. The result of the Merger was to cause an amendment to the Company's Certificate of Incorporation in Delaware, pursuant to Section 253 of the Delaware General Corporation Law, changing the name of the Corporation from IA Global, Inc., to "Asura Development Group, Inc." No other changes have been made to the Company's Certificate of Incorporation. The Company will advise as to any change of the Company's stock symbol. Issues 3.2 Million Common Shares Effective as of Sept. 16, 2012, Asura authorized the issuance of an aggregate of 3,200,000 shares of the Company's restricted common stock to its directors, and a former officer and service providers in exchange for services rendered as director or officer or for services, as the case may be, between Sept. 1, 2011, and Dec. 31, 2012. The foregoing did not include, necessarily, all salary compensation otherwise payable. No placement agent was used in connection with the issuance of the securities and no finders or other fees were paid in connection therewith. The transaction was approved by all directors. After the issuance, and as of Oct. 10, 2012, the Company has 14,668,694 of its common stock issued and outstanding, and excluding any shares issuable upon exercise or conversion of warrants or debt instruments. The issuances were each approved by the Company's compensation committee and majority of disinterested directors. Director Resigns Effective as of Sept. 16, 2012, Dr. Ragna Krishna resigned as a member of the Board of Directors of the Company. Dr. Krishna's resignation from the Board was not due to any disagreement with the Company relating to the Company's operations, policies or practices. Currently the Board Members remaining include Mr. Brian Hoekstra, Mr. Ryuhei Senda, Michael Garnreiter and Greg LeClaire. Dr. Krishna remains a non-voting board observer until the next annual meeting of the Company. Dr. Krishna did not receive any special remuneration in connection with his departure but did receive board compensation. About IA Global San Francisco, Calif.-based IA Global, Inc. (OTCQB: IAGI.OB) -- http://www.iaglobalinc.com/-- is a global services and outsourcing company focused on growing existing businesses and expansion through global mergers and acquisitions. The Company is utilizing its current partnerships to acquire growth businesses in target sectors and markets at discounted prices. The Company is actively engaging in discussions with businesses that would benefit from our business acumen and marketing expertise, knowledge of Asian Markets, and technology infrastructure. The Company's balance sheet at Dec. 31, 2010 showed $21.51 million in total assets, $19.14 million in total liabilities and $2.37 million in total stockholders' equity. As reported in the Troubled Company Reporter on July 20, 2010, Sherb & Co., LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended March 31, 2010. The independent auditors noted that the Company has incurred significant operating losses, and has a working capital deficit as of March 31, 2010. IBIO INC: CohnReznick LLP Raises Going Concern Doubt ---------------------------------------------------- iBio, Inc., filed on Oct. 12, 2012, its annual report on Form 10-K for the fiscal year ended June 30, 2012. CohnReznick LLP, in Eatontown, N.J., expressed substantial doubt about iBio's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses and negative cash flows from operating activities for the years ended June 30, 2012, and 2011 and has an accumulated deficit as of June 30, 2012. The Company reported a net loss of $5.7 million on $1.3 million of revenues in fiscal 2012, compared with a net loss of $12.1 million on $520,080 of revenues in fiscal 2011. The Company had an operating loss of $9.3 million in fiscal 2012, compared with an operating loss of $9.7 million in fiscal 2011. The derivative financial liability non-cash income for the year ended June 30, 2012, was approximately $3.7 million as compared to a non-cash charge of approximately $2.5 million for the year ended June 30, 2011. The Company's balance sheet at June 30, 2012, showed $9.8 million in total assets, $3.6 million in total current liabilities, and stockholders' equity of $6.2 million. A copy of the Form 10-K is available at http://is.gd/8lncTv Based in Newark, Del., iBio, Inc., is a biotechnology company focused on commercializing its proprietary technologies, the iBioLaunch(TM) platform for vaccines and therapeutic proteins, as well as the iBioModulator(TM) platform for vaccine enhancement. ICEWEB INC: Amends 38.9 Million Common Shares Prospectus -------------------------------------------------------- IceWEB, Inc., filed with the U.S. Securities and Exchange Commission amendment no. 2 to the Form S-1 registration statement relating to the sale by David Lane, Michael Schmahl, Kenneth Ikemiya, et al., of up to 38,996,445 shares of the Company's common stock, which includes 13,455,958 shares which are presently outstanding and 25,540,487 shares issuable upon the exercise of warrants with an exercise price of $0.15 per share. All of these shares of the Company's common stock are being offered for resale by the selling security holders. The prices at which the selling security holders may sell shares will be determined by the prevailing market price for the shares or in negotiated transactions. The Company will not receive any proceeds from the sale of these shares by the selling security holders. However, the Company will receive proceeds from the exercise of the warrants if they are exercised for cash by the selling security holders. The Company will bear all costs relating to the registration of these shares of the Company's common stock, other than any selling security holders' legal or accounting costs or commissions. The Company's common stock is quoted on the regulated quotation service of the OTC Bulletin Board under the symbol "IWEB". The last reported sale price of the Company's common stock as reported by the OTC Bulletin Board on Sept. 5, 2012, was $0.08 per share. A copy of the amended prospectus is available for free at: http://is.gd/jyyFM0 About IceWEB Inc. Sterling, Va.-based IceWEB, Inc., manufactures high performance unified data storage appliances with enterprise storage management capabilities. The Company's balance sheet at June 30, 2012, showed $3.1 million in total assets, $7.9 million in total liabilities, and a stockholders' deficit of $4.8 million. Sherb & Co., LLP, in Boca Raton, Florida, stated in its report on the consolidated financial statements of the Company for the years ended Sept. 30, 2011, and 2010, that the Company had net losses of $4.7 million and $7.0 million respectively, for the years ended Sept. 30, 2011, and 2010, which raise substantial doubt about the Company's ability to continue as a going concern. IDEARC INC: Verizon Begins Defense of $9.8-Bil. Fraud Trial ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Verizon Communications Inc. begins a two-week trial Oct. 15 in U.S. District Court in Dallas fending off a $9.8 billion lawsuit brought by creditors of bankrupt former subsidiary Idearc Inc. The creditors contend Idearc's spinoff from Verizon in 2006 was fraught with fraudulent transfers. Idearc went bankrupt 28 months later. According to the report, now named SuperMedia Inc., Idearc was a yellow-page publisher that completed a Chapter 11 reorganization in U.S. Bankruptcy Court in Dallas. The plan created a trust to bring lawsuits on behalf of creditors. Idearc had about $6 billion in unsecured claims. Whether creditors realize much from the bankruptcy depends on the outcome of the suit against Verizon, the second-largest phone company in the U.S. The report relates that over the last year, U.S. District Judge A. Joe Fish turned back several efforts by Verizon to knock the suit out completely. He did rule against creditors by dismissing some of their claims. Creditors contend the spinoff, designed to generate $9.5 billion for Verizon, left Idearc with so much debt it was insolvent immediately and destined for bankruptcy. Details about the spinoff aren't known publicly because Verizon required most of the court filings and many of Fish's rulings to be sealed. Bloomberg News has filed papers asking Judge Fish to unseal court papers and insure the trial is open to the public. Judge Fish will rule on the case without a jury. He previously turned down the creditors' request for a jury trial. According to Bloomberg, Bill Kula, a spokesman for New York-based Verizon, called the Idearc lawsuit "baseless and without merit." A lawyer for the creditors declined to comment. Dallas-based Idearc had been the second-largest yellow pages directory publisher in the U.S. The creditors' lawsuit is U.S. Bank National Association v. Verizon Communications Inc., 10-01842, U.S. District Court, Northern District Texas (Dallas). About Idearc Inc. Headquartered in D/FW Airport, Texas, Idearc, Inc., now known as SuperMedia Inc., is the second largest U.S. yellow pages publisher. Idearc was spun off from Verizon Communications, Inc. Idearc and its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 09-31828) on March 31, 2009. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represented the Debtors in their restructuring efforts. The Debtors tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on the official committee of unsecured creditors. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. Idearc completed its debt restructuring and its plan of reorganization became effective as of Dec. 31, 2009. In connection with its emergence from bankruptcy, Idearc changed its name to SuperMedia Inc. Under its reorganization, Idearc reduced its total debt from more than $9 billion to $2.75 billion of secured bank debt. Less than two years since leaving bankruptcy protection, SuperMedia remains in quandary. Early in October 2011, Moody's Investors Service slashed its corporate family rating for SuperMedia to Caa1 from B3 prior. The downgrade reflects Moody's belief that revenues will continue to decline at a double digit rate for the foreseeable future, leading to a steady decline in free cash flow. SuperMedia's sales were down 17% for the second quarter of 2011 in a generally improving advertising sector. Moody's ratings outlook for SuperMedia remains negative. While SuperMedia is attempting to transition the business away from its reliance on print advertising through development of online and mobile directory service applications, Moody's is increasingly concerned that the company will not be able to make this change quickly enough to stabilize the revenue base over the intermediate term. Further, the high fixed cost nature of SuperMedia's business could lead to steep margin compression, notwithstanding continued aggressive cost management. INDIANAPOLIS DOWNS: Ex-Leader Questions Sale to Centaur ------------------------------------------------------- Peg Brickley at Dow Jones' Daily Bankruptcy Review reports that Indianapolis Downs is battling departing leader Ross Mangano in a drive to cross the Chapter 11 finish line at a hearing that starts next week on the $500 million sale of the gambling company to Centaur LLC. Carolina Bolado at Bankruptcy Law360 reports that a group of creditors holding $40 million in Indianapolis Downs's unsecured notes on Thursday objected to the horse track and casino's $500 million asset sale over concerns that buyer Centaur Gaming LLC did not act in good faith. Bankruptcy Law360 relates that the Oliver parties, a group made up of several family trusts and led by Indianapolis Downs' own Chairman and CEO Ross Mangano, asked the Delaware bankruptcy court to deny the racino's motion to authorize the sale to Centaur, a rival horse track and casino. Indianapolis Downs has filed with the Bankruptcy Court a Modified Second Amended Chapter 11 Plan of Reorganization. BankruptcyData.com reports that according to the Debtors, "The Plan was structured to permit the Debtors to either (a) sell substantially all of their Assets at a level of Consideration that would provide substantial recovery for the Debtors' constituents or (b) if such level of Consideration was not achieved, to effect a recapitalization that would deleverage the Debtors' balance sheet and restructure their remaining debt. After almost eighteen months in chapter 11, an aggressive marketing process, and exhaustive consideration of all alternatives, there can be no doubt that confirmation of the Plan and approval of the proposed sale is the best alternative available for the Debtors. Accordingly, the Debtors believe that the Plan provides the best means for exiting chapter 11." 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. INTELSAT SA: Closes Sale of U.S. Headquarters for $85 Million ------------------------------------------------------------- SL 4000 Connecticut LLC, an affiliate of The 601 W Companies LLC, completed the acquisition of Intelsat S.A.'s U.S. administrative headquarters office building located in Washington, DC, for a purchase price of approximately $85,000,000 pursuant to a Purchase and Sale Agreement dated July 18, 2012, between the Purchaser and Intelsat Global Service LLC, an indirect subsidiary of Intelsat S.A. In addition, on Oct. 5, 2012, upon the closing of the U.S. Administrative Headquarters Property sale, the Seller entered into a lease agreement under which the Seller leased from the Purchaser a portion of the U.S. Administrative Headquarters Property for an initial term of 18 months at an annual gross rental rate of $9,000,000, with a single option to extend the term of the Post- Closing Lease for up to an additional 12 months at an annual gross rental rate of $10,500,000. Intelsat S.A. expects that the rental expense under the Post-Closing Lease will be largely offset by cost savings with respect to eliminated maintenance and operations expense associated with Intelsat's prior ownership of the U.S. Administrative Headquarters Property. Intelsat is currently in the process of selecting a location for a new permanent U.S. administrative headquarters office. On Oct. 5, 2012, Intelsat S.A. also purchased Convergence SPV's 25.1% equity interest in New Dawn Satellite Company, Ltd., the joint venture that owns the Intelsat New Dawn satellite. The purchase price of the equity was immaterial to Intelsat. As a result, Intelsat became the sole owner of the satellite, which will be re-named Intelsat 28. The transaction will have no impact on operations of the satellite or on customers using its services. The joint venture is already fully consolidated in Intelsat's publicly filed financial statements. In connection with the purchase of Convergence SPV's equity, on Oct. 5, 2012, Intelsat also repaid in full the approximately $88 million outstanding under the New Dawn secured credit agreement, dated Dec. 5, 2008, and related interest rate swaps. The credit facility consisted of senior and mezzanine term loan facilities. The senior term loan facility provided for a commitment of up to $125.0 million with an interest rate of the London Interbank Offered Rate plus an applicable margin between 3.0% and 4.0% and certain costs, if incurred. The mezzanine term loan facility provided for a commitment of up to $90 million with an interest rate of LIBOR plus an applicable margin between 5.3% and 6.3% and certain costs, if incurred. About Intelsat Intelsat S.A., formerly Intelsat, Ltd., provides fixed-satellite communications services worldwide through a global communications network of 54 satellites in orbit as of Dec. 31, 2009, and ground facilities related to the satellite operations and control, and teleport services. It had US$2.5 billion in revenue in 2009. Washington D.C.-based Intelsat Corporation, formerly known as PanAmSat Corporation, is a fully integrated subsidiary of Intelsat S.A., its indirect parent. Intelsat Corp. had US$7.70 billion in assets against US$4.86 billion in debts as of Dec. 31, 2010. The Company reported a net loss of $433.99 million in 2011, a net loss of $507.77 million in 2010, and a net loss of $782.06 million in 2009. The Company's balance sheet at June 30, 2012, showed $17.46 billion in total assets, $18.66 billion in total liabilities, $48 million in noncontrolling interest, and a $1.24 billion total Intelsat S.A. shareholders' deficit. * * * Luxembourg-based Intelsat S.A. carries 'B' issuer credit ratings from Standard & Poor's. It has 'Caa1' corporate family and probability of default ratings from Moody's Investors Service. INVESTCORP BANK: Fitch Affirms 'BB' Issuer Default Rating --------------------------------------------------------- Fitch Ratings has affirmed the long-term Issuer Default Rating (IDR) of Investcorp Bank B.S.C at 'BB'. The Rating Outlook has been revised to Stable from Negative. This action follows the company's resolution of debt maturities coming due in early 2013. Fitch had downgraded Investcorp's IDR to 'BB' from 'BB+' in February 2012 to reflect the agency's concern regarding $648 million of total debt maturing in March and April of 2013. This balance was reduced to $575 million at June 30, 2012. The rating action also reflected concern with respect to the volatility of the company's earnings stream that is highly dependent on asset- based income. Although the previous rating action incorporated the expectation that the company would successfully refinance its debt maturities, the agency's Outlook reflected concerns around the laddering of maturities at a reasonable cost. The company recently entered into a $529 million forward start debt facility, with contractual amortizations in September 2013 and 2014, and final maturity in September 2015. The facility is provided by a syndicate of banks. Fitch notes the new facility has stricter and more creditor-friendly net worth and leverage covenants; conversely, liquidity covenants were relaxed. Fitch believes that through the new facility and reduction in hedge fund co-investments (approximately $200 million since December 2011), Investcorp has generated sufficient liquidity to meet 2013 debt maturities and eliminate any cliff risk in the ratings. Rating Drivers and Sensitivities Fitch notes that near-term rating upside is likely limited due to Investcorp's volatility in profitability, historic dependence on asset-based income, a significant proportion of high-cost preferred stock in the capital structure, and wholesale funding structure. Should Investcorp be successfully able to implement its plan to increase the proportion of fee income in the revenue stream, decrease more volatile asset-based income and improve fixed charge coverage, a Positive Outlook could be considered. This assumes that leverage metrics continue to improve, liquidity grows and the proportion of co-investments in assets under management (AUM) declines according to plans. Should Investcorp be unable to generate sufficient earnings to cover fixed charges, negative trends in AUM continue and/or co-investments account for a stable or increasing proportion of AUM, the ratings could be further downgraded. Should the sovereign rating of Bahrain (rated 'BBB', Outlook Stable by Fitch) be downgraded significantly, Investcorp's ratings would be downgraded as Fitch does not envision rating the issuer above the sovereign rating. The viability rating of Investcorp S.A. has been withdrawn since it is not a regulated entity. Fitch has taken the following rating actions: Investcorp Bank B.S.C -- Long-term Issuer Default Rating (IDR) affirmed at 'BB'; Outlook revised to Stable from Negative; -- Short-term IDR affirmed at 'B'; -- Viability Rating affirmed at 'bb'; -- Support affirmed at '5'; -- Support Floor affirmed at 'NF'. Investcorp S.A. -- Long-term IDR affirmed at 'BB'; Outlook revised to Stable from Negative; -- Short-term IDR affirmed at 'B'; -- Viability Rating affirmed and withdrawn at 'bb'. Investcorp Capital Ltd. -- Long-term IDR affirmed at 'BB'; Outlook revised to Stable from Negative; -- Short-term IDR affirmed at 'B'; -- Senior unsecured debt affirmed at 'BB'. IPREO HOLDINGS: S&P Gives 'B+' Rating on $20.9MM Incremental Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services said its rating on Ipreo Holdings' proposed $20.9 million incremental is 'B+', with a recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. "We lowered our issue-level rating on the company's existing term loan to 'B+' and revised the recovery rating on this debt to '2' (70% to 90% recovery expectation) from '1'. The revision of the recovery rating on the senior secured term loan reflects the increased amount of senior secured debt," S&P said. The 'B' corporate credit rating was affirmed. The rating outlook is positive. "The term loan add-on is expected to be used to finance an acquisition which generates approximately $3 million in EBITDA," said Standard & Poor's credit analyst Daniel Haines. "Pro forma for the repricing, term loan add-on, and acquisition, lease- adjusted leverage increases slightly to 5.6x from 5.5x and EBITDA coverage of interest improves to 2.2x from 2x as a result of lower total interest expense. Our 'B' corporate credit rating on Ipreo Holdings reflects the company's narrow business focus, competition from much larger competitors with greater financial resources, the company's revenue sensitivity to both changes in debt and equity securities issuance volume, and volatility in financial markets and interest rates. These risks underscore our assessment of Ipreo's business risk profile as 'weak' (based on our criteria). We regard the financial risk profile as 'highly leveraged,' reflecting the company's high pro forma debt to EBITDA (adjusted for operating leases) of 5.6x, based on the trailing-12-month EBITDA as of June 30, 2012." JILL ACQUISITION: Moody's Confirms 'Caa1' Corp. Family Rating ------------------------------------------------------------- Moody's Investors Service confirmed Jill Acquisition LLC's Corporate Family Rating at Caa1. Moody's also upgraded the company's $86.5 million secured term loan to B3 from Caa1. The rating outlook is stable. The rating actions conclude the review for possible downgrade commenced on July 23, 2012. The following ratings were confirmed: Jill Acquisition LLC Corporate Family Rating at Caa1 Probability of Default Rating at Caa1 The following rating was upgraded: JJ Lease Funding Corporation $86.5 million secured term loan to B3 (LGD 3, 37%) from Caa1 (LGD 3, 44%) Ratings Rationale The confirmation of the company's Corporate Family Rating at Caa1 reflects the execution of (a) an amendment to the company's secured term loan agreement, which amongst other things waived all outstanding defaults and reset the company's financial covenants to provide additional headroom and (b) a new $30 million Mezz Term Loan agreement with affiliates of the company's minority shareholder, proceeds of which were used to fund a prepayment of the company's secured term loan. The upgrade of the secured term loan reflects the execution of the Mezz Term Loan and that the proceeds from the Mezz Term Loan were used to make a material prepayment of the secured term loan. As a result, recovery prospects for the secured term lenders have improved. Jill's Caa1 Corporate Family Rating reflects the company's thin interest coverage, with EBITDA-Cap Ex to cash interest near one times for the most recent LTM period. The company remains highly leveraged, with debt/EBITDA (including Moody's standard analytical adjustments for operating leases) near 7 times as of July, 2012. While the company has seen recent positive trends in operating performance in the current fiscal year, it will need to sustain these trends to maintain good levels of headroom under its financial covenants, which step down over the next few quarters. The ratings also consider the company's moderate scale in the highly fragmented women's sportswear category and its recent inconsistent execution. Moody's believes J Jill has good brand awareness with its target customer and the company's meaningful on-line presence is also a credit positive. The stable outlook reflects Moody's expectations the company will maintain an adequate liquidity profile over the near term. Positive momentum would build if the company can continue positive trends seen in its year-to-date results. This would enable the company to meaningfully improve interest coverage and to enable the company to sustain meaningful cushion in its financial covenants. Quantitatively, ratings could be upgraded if debt/EBITDA approached the low 6 times range and EBITDA-Cap Ex/cash interest expense exceeded 1.25 times while demonstrating a good liquidity profile. Ratings could be downgraded if the company's currently adequate liquidity profile were to erode, or if otherwise the probability of default were deemed to rise. The principal methodology used in rating J Jill Acquisition LLC. was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Quincy, Massachusetts, J Jill Acquisition LLC is a retailer of women's apparel, footwear and accessories though the internet, catalogs and 225 retail stores. Annual revenues are around $398 million. The company's owners include Arcapita Inc., Golden Gate Capital, and management. JMR DEVELOPMENT: Court Prohibits Use of Lender's Cash Collateral ---------------------------------------------------------------- The Hon. Edward A. Godoy of the U.S. Bankruptcy Court For The District Of Puerto Rico prohibited JMR Development Group Corp's access to cash collateral which Cooperativa de Ahorro y Creditor Sabanera, asserts an interest. In July creditor Cooperativa de Ahorro y Credito Sabanena, also known as Sabanacoop, asked the Court prohibit the Debtor's access to the cash collateral because the Debtor has not requested for the use of cash collateral, nor has the creditor consented to the Debtor's use of its cash collateral. Sabanacoop granted the Debtor a $3,850,000 loan on Sept. 6, 2008. About JMR Development Group JMR Development Group Corp. filed a Chapter 11 petition (Bankr. D. P.R. Case No. 11-07907) on Sept. 16, 2011, in Ponce, Puerto Rico. CPA Luis R. Carrasquillo & CO., P.S.C serves as financial accountant. The Debtor scheduled assets of US$12,732,474 and debts of US$48,587,611. An affiliate, JMR Tourist Development Group Corp. sought Chapter 11 protection (Case No. 11-07911) on the same day. K-V PHARMACEUTICAL: Committee Can Retain Stroock as Lead Counsel ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized the Official Committee of Unsecured Creditors of K-V Pharmaceutical Company to retain Stroock & Stroock & Lavan LLP as lead bankruptcy counsel to the Committee, nunc pro tunc to Aug. 13, 2012. As reported in the TCR on Oct. 10, 2012, Stroock will, among other things: (a) advise the Committee with respect to its rights, duties and powers in the Chapter 11 cases; (b) assist and advise the Committee in its consultations and negotiations with the Debtors relative to the administration of the Chapter 11 cases; (c) assist the Committee in analyzing the claims of the Debtors' creditors and in negotiating with the creditors; (d) assist with the Committee's investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors and of the operation of the Debtors' business; and (e) assist the Committee in its analysis of, and negotiations with, the Debtors or their creditors concerning matters related to, among other things, the terms of a plan or plans of reorganization for the Debtors and related disclosure statement filed in connection therewith and all ancillary documents related thereto. Stroock's current hourly rates are: Partners $750 to $1,085 Counsel $650 to $775 Associates $350 to $725 Paraprofessionals $245 to $335 Litigation Support $125 to $135 To the best of the Committee's knowledge, information and belief, Stroock is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and does not hold or represent an adverse interest in connection with the Debtors, the Chapter 11 cases or the Debtors' estates, and that neither Stroock nor any of its members, counsel or associates has had or presently has any connection with the Debtors, their creditors, equity security holders, or any other known parties-in-interest, the U.S. Trustee, or any person employed by the office of the U.S. Trustee, in any matters related to the Debtors or the Chapter 11 cases. 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. K-V PHARMACEUTICAL: Committee Can Retain AGP as Regulatory Counsel ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized the Official Committee of Unsecured Creditors of K-V Pharmaceutical Company to retain Arnall Golden Gregory LLP as regulatory counsel for the Committee, nunc pro tunc to Aug. 13, 2012. AGP will, among other things: (a) advise the Committee regarding various federal and state laws and regulations affecting the sales of Makena(R) and other pharmaceutical products of the Debtors; (b) analyze the validity and effectiveness of claims and legal actions commenced by the Debtors in state Medicaid actions and against regulatory agencies; and (c) advise the Committee regarding legal requirements applicable to compounding pharmacies whose practices affect the sales of Makena(R), the Debtors' most important product. To the best of the Committee's knowledge, information and belief, AGG is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, and does not hold or represent an adverse interest in connection with the Debtors, the Chapter 11 cases or the Debtors' estates, and that neither AGG nor any of its members, counsel or associates has had or presently has any connection with the Debtors, their creditors, equity security holders, or any other known parties-in-interest, the U.S. Trustee, or any person employed by the office of the U.S. Trustee, in any matters related to the Debtors or the Chapter 11 cases. At present, the hourly rates for the AGG partners designated to represent the Committee range from $490 to $520 per hour and the hourly rates for the AGG associates designated to represent the Committee range from $200 to $300 per hour. It is anticipated that the fees of AGG, in its capacity as regulatory counsel to the Committee, will not exceed $10,000 per month, and AGG will endeavor to inform Stroock, Committee's proposed lead counsel, prior to incurring more than $10,000 of fees in a month. AGG will also seek reimbursement for necessary expenses incurred, including travel, photocopying, delivery service, postage and package delivery, vendor charges, court fees, transcript costs, expenses for "working meals," computer-aided research and other out-of-pocket expenses incurred in providing professional services. 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. K-V PHARMACEUTICAL: Committee Can Retain D&P as Financial Advisor ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized the Official Committee of Unsecured Creditors of K-V Pharmaceutical Company to retain Duff & Phelps, LLC, as the Committee's financial advisor, nunc pro tunc to Aug. 13, 2012. As reported in the TCR on Oct. 10, 2012, D&P will: (a) review and analyze the Company's operations, assets, financial condition, business plan, strategy, and operating forecasts; (b) assist in the determination of an appropriate go-forward / post-emergence capital structure for the Company; (c) analyze any proposed financing(s); (d) analyze any merger, divestiture, joint-venture, or investment transaction, including the proposed structure and form thereof; (e) analyze any new debt and/or equity capital (including advice on the nature and terms of new securities); and (f) assist the Committee in developing, evaluating, structuring and negotiating the terms and conditions of a restructuring or Plan of Reorganization, including the value of the securities, if any, that may be issued to the Committee under any such restructuring or Plan. As compensation for its services, D&P will receive: (1) Monthly Fee: The Company will pay D&P a cash fee of $125,000 per month for the term of the engagement beginning Aug. 13, 2012. (2) Deferred Restructuring Fee: In addition, at the end of the case or in connection with a proposed Restructuring Transaction, D&P will have the ability to seek a reasonable deferred restructuring fee subject to the direct approval and consent of the Committee and subject to notice, hearing and approval of the Bankruptcy Court. The amount and timing of such fee, if any, are subject to Bankruptcy Court approval. D&P will not be entitled to more than one Deferred Restructuring Fee. (c) Expense Reimbursement: D&P will be entitled to monthly reimbursement of reasonable and documented out-of-pocket expenses incurred in connection with the services to be provided under the Engagement Letter. D&P does not hold or represent any interest adverse to the Committee, the Debtors' estates, creditors or other parties-in- interest in connection with the Chapter 11 cases and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code, and to the extent required by Sections 328 and 1103 of the Bankruptcy Code and Bankruptcy Rule 2014. 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. K-V PHARMACEUTICAL: Can Employ Jefferies as Investment Banker ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized K-V Pharmaceutical Company, et al., to employ Jefferies & Company, Inc., as investment banker and financial advisor, nunc pro tunc to the Petition Date. The Court's order provides that Jefferies will be entitled to a restructuring fee or minority M&A fee (as applicable) arising from any sale of assets (whether pursuant to a Chapter 11 plan, Section 363 of the Bankruptcy Code or otherwise) if, and only if, (i) Jefferies ran a sale process with respect to such assets, (ii) marketed such assets or investment concerning such assets or (iii) otherwise provided material services in connection with the sale of such assets. Jefferies will not be entitled to a restructuring fee or minority M&A fee for any liquidation that is conducted and consummated by a Chapter 7 trustee. As reported in the TCR on Sept. 13, 2012, Jefferies will render services to the Debtors including, without limitation: a) investment banking and advisory services as providing advice and assistance to the Debtors in connection with analyzing, structuring, negotiating and effecting, and acting as exclusive financial advisor to the Debtors in connection with, any restructuring of the Debtors' outstanding indebtedness through any offer by the Debtors with respect to any outstanding indebtedness, a solicitation of votes, approvals, or consents giving effect thereto; and b) financial advisory services by: i) familiarizing itself with, to the extent that Jefferies deems appropriate, and analyze the business, operations, properties, financial condition and prospects of the Debtors; ii) advising the Debtors on the current state of the restructuring market; and iii) assisting and advising the Debtors in developing the terms of and a general strategy for accomplishing a restructuring or other debt or equity financing. Jefferies' compensation structure includes, among other things: a) a monthly advisory fee equal to $125,000 per month until the expiration or termination of the engagement; b) a restructuring fee equal to $2.5 million upon consummation of a restructuring, including, without limitation, upon the effective date of a confirmed plan of reorganization, provided, however, that an amount equal to 25% of the minority M&A fees actually paid to Jefferies in excess of $750,000 will be credited once against any Restructuring Fee due and payable; c) a minority M&A fee -- upon the closing of a minority M&A transaction, a fee equal to an amount to be determined according to these schedule: i) if the Transaction Value is less than or equal to $30 million, a minimum fee of $750,000; ii) an additional 2.5% of that portion of the transaction value greater than $30 million and less than or equal to $50 million; and iii) an additional 2.0% of that portion of the transaction value greater than $50 million and less than or equal to $75 million; and iv) an additional 1.5% of that portion of the transaction value greater than $75 million. To the best of the Debtors' knowledge, Jefferies is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. LDK SOLAR: Reacts to DOC's Final Ruling re Solar Cells, Modules --------------------------------------------------------------- LDK Solar Co., Ltd., issued the following statement regarding the U.S. Department of Commerce's (DOC) final determination on Oct. 10, 2012, to impose countervailing duties (CVD) of 15.24% and anti-dumping duties (AD) of effectively 25.96% on LDK's crystalline silicon photovoltaic modules and cells produced exclusively in China. "Given the accomplishments and the success of the entire solar industry during the last several years, we strongly regret the DOC's ultimate decision. LDK Solar has been a leader with worldwide supply chains in the highly-competitive global solar industry since the company's founding in 2005, and this determination will not change our strategy in developing markets worldwide. LDK Solar reaffirms its commitment to be one of the industry's top tier companies by creating consistent value for our customers," stated Xiaofeng Peng, Chairman and CEO of LDK Solar. "We believe that unilateral trade barriers will not make any solar company more competitive, but will make solar power less competitive against other forms of electricity generation. The growth of destructive trade barriers recently from the U.S. represent significant, long-term challenges to the health of the global solar industry and countervail with the industry's aim to make solar power affordable for everyone," concluded Mr. Peng. "We will continue to deliver high quality PV products at competitive prices to our customers in the United States. Our team in the U.S. has built strong customer relationships to provide top quality and affordable solutions for all U.S. markets -- from residential to commercial, utility and off-grid," added Sam Tong, President and Chief Operating Officer of LDK Solar. According to the decision, solar modules produced in China containing solar cells originating from a third country are not subject to CVD and AD tariffs. The determination by the Department of Commerce is subject to final confirmation from the U.S. International Trade Commission (ITC), which is expected by the end of November 2012. About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. KPMG in Hong Kong, China, said in a May 15, 2012, audit report, there is substantial doubt on the ability of LDK Solar Co., Ltd. to continue as a going concern. According to KPMG, LDK Solar has a net working capital deficit and is restricted to incur additional debt as it has not met a financial covenant ratio under a long-term debt agreement as of Dec. 31, 2011. These conditions raise substantial doubt about the Group's ability to continue as a going concern. The Company's balance sheet at June 30, 2012, showed US$6.40 billion in total assets, US$5.95 billion in total liabilities, US$254.44 million in redeemable non-controlling interests and US$192.17 million in total equity. LEHMAN BROTHERS: Given Approval for Final Settlement With IRS ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Lehman Brothers Holdings Inc. received approval Oct. 11 from the bankruptcy judge to settle the last income tax disputes with the Internal Revenue Service. The IRS withdrew claims for $238 million in additional taxes, while Lehman agreed to $336 million in adjustments to tax. Initially, Lehman and the IRS disagreed on 36 items involving $1.8 billion. All but nine disputes were settled in March. The remaining disputes involved $804 million. According to the report, the new settlement disposed of $574 million. The last dispute over $230 million will be resolved "by operation of law," Lehman said in court papers. Lehman couldn't say what the ultimate effect of the tax settlement would be in terms of cost to the company. The ability to carry tax losses backward may affect what Lehman ultimately pays the IRS. 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. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. LIBERATOR INC: Webb & Company Raises Going Concern Doubt -------------------------------------------------------- Liberator, Inc., filed on Oct. 11, 2012, its annual report on Form 10-K for the fiscal year ended June 30, 2012. Webb & Company, P.A., in Boynton Beach, Fla., expressed substantial doubt about Liberator's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $782,417, a working capital deficiency of $1.6 million, an accumulated deficit of $7.8 million, and negative cash flow from continuing operations of $464,800. The Company reported a net loss of $782,417 on $14.5 million of revenue in fiscal 2012, compared with a net loss of $801,252 on $12.8 million of revenue in fiscal 2011. The Company's balance sheet at June 30, 2012, showed $3.2 million in total assets, $4.5 million in total liabilities, and a stockholders' deficit of $1.3 million. A copy of the Form 10-K is available at http://is.gd/k0J5wN Atlanta, Georgia-based Liberator is a vertically integrated manufacturer that designs, develops and markets products and accessories that enhance intimacy. Liberator is also a nationally recognized brand trademark, brand category and a patented line of products commonly referred to as sexual positioning shapes and sex furniture. LONGVIEW POWER: Bank Debt Trades at 17% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Longview Power LLC is a borrower traded in the secondary market at 82.75 cents-on- the-dollar during the week ended Friday, Oct. 12, a drop of 0.75 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 575 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 31, 2017. The loan is one of the biggest gainers and losers among 199 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Longview is a special purpose entity created to construct, own, and operate a 695 MW supercritical pulverized coal-fired power plant located in Maidsville, West Virginia, just south of the Pennsylvania border and approximately 70 miles south of Pittsburgh. The project is owned 92% by First Reserve Corporation (First Reserve or sponsor), a private equity firm specializing in energy industry investments, through its affiliate GenPower Holdings (Delaware), L.P. (GenPower), and 8% by minority interests. M & A TOUCH: Case Summary & 7 Unsecured Creditors ------------------------------------------------- Debtor: M & A Touch of Class, Inc. 3 Tarascon Road Newport Beach, CA 92657 Bankruptcy Case No.: 12-21871 Chapter 11 Petition Date: October 10, 2012 Court: United States Bankruptcy Court Central District of California (Santa Ana) Judge: Mark S. Wallace Debtor's Counsel: Robert P. Goe, Esq. GOE & FORSYTHE, LLP 18101 Von Karman, Suite 510 Irvine, CA 92612 Tel: (949) 798-2460 Fax: (949) 955-9437 E-mail: kmurphy@goeforlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its seven unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-21871.pdf The petition was signed by Adel M. Ibrahim, president. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Adel & Egette Ibrahim 10-21453 08/17/10 Adel & Egette Ibrahim 11-24108 10/11/11 Adel & Egette Ibrahim 12-21782 10/09/12 MAXX HOLDING: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Maxx Holding Corporation fka Jump Corporation 4236 West Ferguson Road Fort Wayne, IN 46809 Bankruptcy Case No.: 12-13277 Chapter 11 Petition Date: October 10, 2012 Court: United States Bankruptcy Court Northern District of Indiana (Fort Wayne Division) Judge: Robert E. Grant Debtor's Counsel: Adam L. Hand, Esq. BECKMAN LAWSON, LLP 201 W. Wayne Street Fort Wayne, IN 46802 Tel: (260) 422-0800 Fax: (260) 420-1013 E-mail: alh@beckmanlawson.com Scheduled Assets: $1,215,874 Scheduled Liabilities: $957,956 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/innb12-13277.pdf The petition was signed by Jeffrey M. Jump, president. MF GLOBAL: Brokerage Trustee Can Settle Claims En Masse ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for MF Global Inc. received authority from the bankruptcy judge to settle about 80% of all claims without approval from the court. According to the report, at a hearing Oct. 11, James Giddens, the trustee for the brokerage, was permitted to file so-called omnibus objections where he can object to 200 claims at a time. He can settle claims of less than $50,000 without court approval. Mr. Giddens also can settle larger claims so long as the change in amount is less than $50,000. If he settles a general unsecured claim of more than $500,000, he must give notice and an opportunity for objection to Louis Freeh, the Chapter 11 trustee for the parent holding company. The report relates that for settlements larger than $50,000, Mr. Giddens can submit a stipulation which the judge can approve if there is no objection. 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 professional for trustee Louis Freeh and the official creditors' committee of MF Global Holdings Ltd. incurred $3.2 million in fees during September that can't be paid for lack of cash. MF Global Holdings is the parent of the liquidating commodity broker with a $1.6 billion shortfall in customer's property. According to the report, since liquidation began almost one year ago, $39.2 million in professional fees have accrued and not been paid, according to an operating report filed in bankruptcy court in New York on Oct. 12. Mr. Freeh still has about $15 million in cash to pay other operating expenses of the holding company's Chapter 11 reorganization. Originally $25.3 million, the cash represents collateral for secured lender JPMorgan Chase & Co. The report notes that Mr. Freeh is using the cash with the bank's permission. Mr. Freeh consumed about $850,000 of the bank's cash collateral during September, according to the operating report. 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: Inc. Trustee Wins Judge OK to Process 7,000 Claims ------------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Martin Glenn approved procedures Thursday to let the trustee liquidating MF Global Holdings Ltd.'s broker-dealer unit MF Global Inc. handle nearly 7,000 creditor claims filed against it for more than $22.7 billion and reduce costs to the MFGI estate. According to Bankruptcy Law360, Judge Glenn approved the uncontested motion during a 10-minute hearing, freeing Securities Investor Protection Act trustee James W. Giddens to begin objecting to or settling the 6,669 general creditor claims filed against MFGI without further court approval. 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. MGT CAPITAL: Receives Delisting Notice from NYSE ------------------------------------------------ MGT Capital Investments, Inc. disclosed that it received a notice dated Oct. 5, 2012 from the NYSE MKT Staff indicating that the Company was not in compliance with the Exchange's continued listing standards. Specifically, the Company is not in compliance with Section 1003(a)(i) of the Company Guide since it reported stockholders' equity of less than $2,000,000 at March 31, 2011 and losses from continuing operations and net losses in two of its three most recent fiscal years ended Dec. 31, 2010, Section 1003(a)(ii) of the Company Guide since it reported stockholders' equity of less than $4,000,000 at March 31, 2011 and losses from continuing operations and/or net losses in three of its four most recent fiscal years ended Dec. 31, 2010 and Section 1003(a)(iii) of the Company Guide since it reported stockholders' equity of less than $6,000,000 at March 31, 2011 and losses from continuing operations and net losses in its five most recent fiscal years ended Dec. 31, 2010, and as a result its securities are subject to being delisted from the Exchange pursuant to Section 1009 of the Company Guide. As previously disclosed, MGT has been operating under a Plan of Compliance approved by the Exchange on Aug. 23, 2011 that allowed the Company until Dec. 8, 2012 to regain compliance with the deficiencies noted above. During this period, the Company has been subject to periodic review by Exchange Staff, and was informed of the requirement to make progress consistent with the Plan or to regain compliance with the continued listing standards by the end of the extension period. In the Oct. 5, 2012 notice, the Company was informed that the Staff concluded the Company has not made a reasonable demonstration of its ability to complete the initiatives and meet the equity standards by the end of the 18- month Equity Plan Period, and has therefore begun the delisting process. MGT appreciates the time given to the Company to cure its deficiencies, and has informed NYSE MKT of its intention to pursue the right of appeal and request a hearing pursuant to Sections 1203 and 1009(d) of the Company Guide. There can be no assurance that the Company's request for continued listing will be granted at this hearing. In the event MGT's appeal is unsuccessful, the Company expects that its common stock will trade on OTC-QB no later than any official delisting from NYSE MKT. After careful analysis, the Company's board of directors concluded that current negotiations for equity capital, including one memorialized in a non-binding Term Sheet, would, if consummated quickly, put MGT compliance with the Exchange's listing standards and allow MGT to retain its NYSE MKT listing. The marginal costs of the appeal and of continuing ongoing negotiations create a positive cost/benefit tradeoff. However, there can be no guarantee of retaining the Exchange listing even if the Company successfully cures its equity deficiency. In any scenario, MGT intends to remain as a fully reporting, current SEC filer with transparent accounting and proper corporate governance. Robert Ladd, the Company's President and Chief Executive Officer, concluded, "As the largest stockholder of MGT, I commend our board in only considering non-dilutive actions to meet the Exchange's equity threshold. The out of pocket cash costs to retain listing status are manageable, but we should not enter into any transaction that we believe is destructive to shareholder value, solely to retain that status." As previously reported, in a step to improve the Company's financial flexibility and reduce capital costs, MGT announced on Oct. 8, 2012 that it entered into an exchange agreement with the holders of its Convertible Notes. The Company subsequently repaid the entire $3.5 million issue at face value plus 100,000 shares of MGT restricted common stock. MGT is now debt-free with approximately $1.4 million in cash. The Company will continue to update its shareholders on its progress, including, but not limited to, the status of its NYSE MKT listing, as well as its patent enforcement activities. The trading symbol will bear the "BC" indicator until the Company regains the compliance with the Exchange's continued listing requirements. About MGT Capital MGT Capital Investments, Inc. is a holding company comprised of MGT, the parent company, and its wholly-owned subsidiary MGT Capital Investments (U.K.) Limited. In addition we also have a controlling interest in our subsidiary, Medicsight Ltd, including its wholly owned subsidiaries. MOMENTIVE PERFORMANCE: Proposes to Offer $1.1 Billion Sr. Notes --------------------------------------------------------------- Momentive Performance Materials Inc. said that MPM Escrow LLC and MPM Finance Escrow Corp., wholly owned special purpose subsidiaries of the Company, are proposing to issue $1,100,000,000 principal amount of first-priority senior secured notes due 2020 in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended. The proceeds of the offering initially will be placed in escrow pending satisfaction of a number of conditions, including either (i) obtaining an amendment to the Company's senior secured credit facilities to permit the Company to assume the obligations of the Escrow Issuers under the Notes or (ii) entering into the asset- based lending facility described below. Upon satisfaction of those conditions, the Company would assume the Escrow Issuers' obligations under the Notes, the Notes would be guaranteed on a senior basis by the domestic subsidiaries of the Company that are guarantors under its senior secured credit facilities and, if the Company has not entered into the asset-based lending facility, the Notes would initially be secured on a pari passu basis by liens on the same collateral of the Company and the Note Guarantors securing the senior secured credit facilities, subject to certain exceptions. If those conditions are not satisfied by Jan. 15, 2013, the Escrow Issuers will redeem the Notes at a price equal to 100% of the gross proceeds of the Notes, plus accreted issue price and accrued interest. The Company has obtained commitments from financial institutions for a new $270 million asset-based revolving loan facility, subject to a borrowing base, and the Company expects to obtain an additional $30 million in commitments following the offering of the Notes to bring the total facility size to $300 million, although there can be no assurances the Company will obtain those additional commitments. If the Company does not obtain the additional commitments, the ABL Facility will be limited to a maximum of $270 million, subject to a borrowing base. The ABL Facility will replace the Company's existing senior secured credit facilities and the Company expects to enter into the ABL Facility as soon as practicable following the completion of the Notes offering. After the Company enters into the ABL Facility, and after the assumption of the obligations under the Notes by the Company, the Notes will have the benefit of a first-priority lien on certain notes priority collateral (which generally includes the domestic assets of the Company and the Note Guarantors other than inventory and accounts receivable) and a second-priority lien on certain domestic ABL priority collateral (which with respect to the Company and Note Guarantors generally includes inventory and accounts receivable), in each case subject to certain exceptions. The Company intends to use the net proceeds from the offering of Notes (i) to repay all amounts outstanding under its senior secured credit facilities, (ii) to purchase, redeem or discharge all of its outstanding $200 million aggregate principal amount of 12 1/2% Second-Lien Senior Secured Notes due 2014, (iii) to pay related fees and expenses and (iv) for general corporate purposes. The proposed offering of the Notes is subject to market and other conditions, and may not occur as described or at all. The Notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S. The Notes will not be initially registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws. About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. The Company had a net loss of $140 million in 2011, following a net loss of $63 million in 2010. Net loss in 2009 was $42 million. The Company's balance sheet at June 30, 2012, showed $3.02 billion in total assets, $3.92 billion in total liabilities, and a $901 million total deficit. * * * As reported by the TCR on May 14, 2012, Moody's Investors Service lowered Momentive Performance Materials Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa1 from B3. The action follows the company's weak first quarter results and expectations for a slower than expected recovery in volumes in 2012. In the Aug. 15, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered all of its ratings on MPM by two notches, including the corporate credit rating to 'CCC' from 'B-'. The outlook is negative. "The likelihood that earnings and cash flow will remain very weak for the next several quarters prompted the downgrade," explained credit analyst Cynthia Werneth. "In our view, leverage is unsustainably high, with total adjusted debt to EBITDA above 15x as of June 30, 2012." MOMENTIVE PERFORMANCE: Offering $1.1BB Notes at 100% Issue Price ---------------------------------------------------------------- Momentive Performance Materials Inc. announced, pursuant to Rule 135c of the Securities Act of 1933, as amended, that MPM Escrow LLC and MPM Finance Escrow Corp., wholly owned special purpose subsidiaries of the Company, were proposing to offer $1,100,000,000 principal amount of first-priority senior secured notes due 2020 through a private offering that is exempt from the registration requirements of the Securities Act. The Company and the Escrow Issuers priced $1,100,000,000 aggregate principal amount of 8.875% First-Priority Senior Secured Notes due 2020 at an issue price of 100%. The transaction is subject to customary closing conditions. About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. The Company had a net loss of $140 million in 2011, following a net loss of $63 million in 2010. Net loss in 2009 was $42 million. The Company's balance sheet at June 30, 2012, showed $3.02 billion in total assets, $3.92 billion in total liabilities, and a $901 million total deficit. * * * As reported by the TCR on May 14, 2012, Moody's Investors Service lowered Momentive Performance Materials Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa1 from B3. The action follows the company's weak first quarter results and expectations for a slower than expected recovery in volumes in 2012. In the Aug. 15, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered all of its ratings on MPM by two notches, including the corporate credit rating to 'CCC' from 'B-'. The outlook is negative. "The likelihood that earnings and cash flow will remain very weak for the next several quarters prompted the downgrade," explained credit analyst Cynthia Werneth. "In our view, leverage is unsustainably high, with total adjusted debt to EBITDA above 15x as of June 30, 2012." MOMENTIVE PERFORMANCE: Moody's Rates Senior Secured Notes 'B1' -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the $1.1 billion guaranteed senior secured first lien notes due 2020 issued by wholly owned subsidiaries of Momentive Performance Material's Inc. (MPM) -- MPM Escrow LLC and MPM Finance Escrow Corp. Once the proceeds from the new notes are released from escrow, they will be assumed by MPM and used to repay $80 million outstanding under its existing revolver, retire $742 million in US Dollar and Euro denominated term loans, and tender for $200 million guaranteed senior secured second lien notes due 2014. This transaction will also add a modest amount of cash to MPM's balance sheet. In conjunction with this debt issuance MPM will replace its existing revolver and letter of credit facility with a $300 million asset backed lending (ABL) facility and $30 million letter of credit facility. The company's outlook is stable. "The successful issuance of this debt would be a credit positive and substantially improve the company's liquidity," stated John Rogers, Senior Vice President at Moody's. "However, market sector fundamentals will cause MPM's financial performance to remain extremely weak through 2013." Ratings assigned MPM Escrow LLC Guaranteed senior secured first lien notes due 2020 at B1 (LGD2, 16%) Ratings list: Momentive Performance Materials Inc. Corporate Family Rating at Caa1 Probability of Default Rating at Caa1 Speculative Grade Liquidity Rating at SGL-3 Senior Secured Letter of Credit Facility due 2013 at B1 (LGD1, 9%)* Guaranteed senior secured revolver due 2012 at B1 (LGD1, 9%)* Guaranteed senior secured first lien term loan due 2015 at B1 (LGD1, 9%)* Guaranteed senior secured notes 1.5 lien due 2020 to B2 (LGD2, 25%) Guaranteed senior secured second lien notes due 2014 at B3 (LGD3, 32%)* Guaranteed senior unsecured notes due 2021 at Caa1 (LGD4, 58%) Senior subordinated notes due 2016 at Caa3 (LGD5, 84%) The outlook is stable. * Ratings will likely be withdrawn upon the issuance of the new debt. Ratings Rationale Proceeds from the new notes will be released from escrow once MPM has (i) closed upon the ABL or amended its existing credit facility to allow the sharing of collateral; (ii) repaid the existing second line notes; and (iii) the security documents creating liens and intercreditor agreement has been executed. These new first lien secured notes will have a first priority lien on all property and assets of MPM's guarantor subsidiaries, including the Japanese intercompany loan but excluding the ABL collateral. The ABL collateral will include the accounts receivable and inventory of its US, UK, Canadian and German subsidiaries. In addition the ABL will also have a first lien on the fixed assets of the German subsidiary. The notes will have a second priority lien on the ABL collateral with the exception of the German fixed assets.. MPM's Caa1 CFR reflects the expectation that the company's financial performance will remain weak though 2013 with EBITDA remaining below $300 million and credit metrics that are particularly poor -- Debt/EBITDA of over 10x (excluding the holdco debt) and negative free cash flow. The company's sharp decline in financial performance over the past year is a direct result of new industry capacity and weaker than anticipated demand in key downstream markets (automotive, construction and electronics). As of June 30, 2012 the company's credit metrics were extremely weak with Debt/EBITDA of 16.8x (13.7x excluding the holdco debt), negative Retained Cash Flow/Debt (RDF/Debt) and Free Cash Flow/Debt (FCF/Debt). Credit metrics are expected to decline further in the third quarter and then improve modestly in the fourth quarter. The aforementioned ratios reflect Moody's Global Standard Adjustments, which include the capitalization of pensions and operating leases, as well as MPM's HoldCo PIK debt (the PIK debt has a value of $720 million at June 30, 2012 and is accreting at 11% per year, or roughly $80 million/year). The stable outlook reflects the expectation that the company may be able to complete the planned debt issuance, which will greatly improve its liquidity. However, if the company's is unable to complete the planned debt issuance, the ratings could be lowered as availability under the existing revolver is expected to decline below $200 million in the third quarter of 2012. Moody's expects that the company will continue to reduce costs and take additional actions to improve its financial performance over the next year. An upgrade is extremely unlikely until MPM is able to raise its EBITDA above $450 million per year. Moody's would also look for FCF/Debt above 2% and RCF/Debt above 6% on a sustainable basis. The SGL-3 Speculative Grade Liquidity Rating reflects the expectation for negative free cash flow through 2013. The addition of $36 million to the balance sheet from this debt issuance plus the increased availability under the new ABL facility should provide enough additional room to manage through the current difficult operating environment, even though MPM's recovery is progressing slower than previously expected. MPM's liquidity would be supported by a pro forma cash balance of $143 million and pro forma revolver availability of $300 million. There are no financial covenants under the new ABL facility until availability falls below $30 million. If the company is unable to complete the planned debt issuance, its speculative grade liquidity rating would be lowered to SGL-4. The principal methodology used in rating MPM was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Momentive Performance Materials Inc., headquartered in Albany, New York, is the second largest producer of silicones and silicone derivatives worldwide. The company has two divisions: silicones (which accounted for roughly 90% of revenues) and quartz. Revenues were roughly $2.5 billion for the LTM ending June 30, 2012. NATIVE STONE: Updated Case Summary & Creditors' Lists ----------------------------------------------------- Lead Debtor: Native Stone Inc. Carr 688 Km 2.3 Antigua Central San Vicente Vega Baja, PR 00693 Bankruptcy Case No.: 12-08077 Chapter 11 Petition Date: October 10, 2012 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Jaime Rodriguez Rodriguez, Esq. RODRIGUEZ & ASOCIADOS P.O. Box 2477 Vega Baja, PR 00694 Tel: (787) 858-5324 Fax: (787) 858-5324 E-mail: rodriguezyasociadoscsp@yahoo.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that simultaneously filed separate Chapter 11 petition: Debtor Case No. ------ -------- Native Stone, Inc. 12-08078 Assets: $500,001 to $1,000,000 Debts: $1,000,001 to $10,000,000 A. A copy of Native Stone Inc's list of its 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/prb12-08077.pdf B. A copy of Native Stone, Inc.'s list of its 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/prb12-08078.pdf The petitions were signed by Juana R. Melendez, president. NBTY INC: Moody's Reviews 'B1' CFR/PDR for Downgrade ---------------------------------------------------- Moody's Investors Service placed NBTY, Inc.'s B1 Corporate Family Rating and Probability of Default Rating on review for downgrade. At the same time, Moody's assigned a Caa1 to the proposed $500 million Senior Unsecured PIK Toggle Notes due 2017 to be issued by NBTY's parent company, Alphabet Holding Company, Inc. (Holdings). All other existing ratings are affirmed. Ratings Rationale The review for downgrade is triggered by NBTY's decision to pay a largely debt financed $700 million dividend to its financial sponsor owner, The Carlyle Group. This dividend is expected to be funded by the proceeds from the proposed $500 million PIK toggle notes along with excess cash on balance sheet. Should this transaction close, NBTY's leverage will meaningfully increase. Moody's anticipates that the proposed PIK toggle notes will increase debt to EBITDA to about 5.6 times for the lagging twelve month period ended June 30, 2012. The review for downgrade also reflects that borrowing to finance a dividend is contrary to what Moody's expected and is viewed as being a more aggressive financial policy than borrowing to finance acquisitions (as NBTY has done historically). Lastly, the review for downgrade reflects Moody's concern that the competitive environment for vitamins, minerals, and nutritional supplements has become more competitive as more larger companies look to this product category for growth. Assuming the transaction closes on terms substantially as indicated, Moody's expects to complete the review and to downgrade NBTY's Corporate Family Rating and Probability of Default Rating to B2 from B1. The rating is subject to review of final documentation. Upon completion of the transaction, NBTY's Corporate Family Rating and Probability of Default Rating will be moved to Holdings. The assignment of a Caa1 to Holdings proposed $500 million PIK Toggle Notes due 2017 assumes the completion of the transaction and is based upon a one-notch downgrade of NBTY's Corporate Family and Probability of Default Ratings to B2 from B1. The Caa1 rating assigned to the proposed PIK Toggle Notes reflects that they are structurally subordinated to all existing liabilities at NBTY as they are located at a holding company and are not guaranteed by the operating company. Moody's took the following rating action for Alphabet Holding Company, Inc. Senior unsecured PIK Toggle notes due 2017 assigned at Caa1 (LGD 6, 93%) Moody's took the following rating actions for NBTY, Inc. The following ratings are placed on review for downgrade Corporate Family Rating at B1 Probability of Default Rating at B1 The following ratings are affirmed Senior secured bank credit facility at Ba3 (LGD 3, 35%) Senior unsecured notes due 2018 at B3 (LGD 5, 88%) The principal methodology used in rating NBTY was the Global Consumer Durables Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NBTY, Inc., headquartered in Ronkonkoma, NY, is a leading global vertically-integrated manufacturer, marketer, and retailer of vitamin, mineral, and nutritional supplements ("VMNS") in the United States and throughout the world. The company operates over 1,300 stores in the US, Canada, and Europe. It also is the largest wholesale supplier of private label VMNS products to major retailers in the US. Revenues are about $3.1 billion. NBTY is wholly owned by The Carlyle Group. NEDAK ETHANOL: Has 2 Mos. to Cure $26MM Default to Avoid Sale ------------------------------------------------------------- As previously disclosed, NEDAK Ethanol, LLC, is in default under its Amended and Restated Credit Agreement dated Dec. 31, 2011, with AgCountry Farm Credit Services, FLCA, the First Supplement to the Amended and Restated Master Credit Agreement between the Company and the Senior Lender dated Dec. 31, 2011. On Oct. 8, 2012, the Senior Lender recorded a Substitution of Trustee which replaced Lawyers Title Insurance Corporation, the original trustee under the Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement dated Feb. 14, 2007, between the Company, the Senior Lender and the trustee, as amended by that certain First Amendment dated Dec. 13, 2007, and that certain Second Amendment dated Dec. 31, 2011, which secures the indebtedness under the Senior Loan Documents, with Richard P. Garden, Jr., as the substitute trustee. On Oct. 8, 2012, subsequent to the recordation of the Substitution of Trustee, the substitute trustee under the Deed of Trust recorded a Notice of Default and Election to Sell the trust property. The trust property includes the plant site, the transload site, the Company's leased property and easements all as described in more detail in the Deed of Trust. The Company has two months from the filing for recording of the Notice of Default and Election to Sell to cure the default under the Senior Loan Documents and pay the entire unpaid principal sum secured by the Deed of Trust in the amount of $25,497,877, accrued late charges in the amount of $163,672 and accrued interest which was $828,345 as of Oct. 9, 2012. If the Company does not cure the defaults under the Senior Loan Documents within this two month period, the substitute trustee will initiate proceedings to sell the trust property in order to satisfy the unpaid obligations of the Company under the Senior Loan Documents. About NEDAK Ethanol Atkinson, Neb.-based NEDAK Ethanol, LLC -- http://www.nedakethanol.com/-- operates a 44 million gallon per year ethanol plant in Atkinson, Nebraska, and produces and sells fuel ethanol and distillers grains, a co-product of the ethanol production process. Sales of ethanol and distillers grains began in January 2009. NEDAK Ethanol reported a net loss of $781,940 on $152.11 million of revenue in 2011, compared with a net loss of $2.08 million on $94.77 million of revenue in 2010. The Company's balance sheet at March 31, 2012, showed $73.42 million in total assets, $33.68 million in total liabilities, $10.80 million in preferred units Class B, and $28.93 million in total members' equity. Amends Agreement with AgCountry In February 2007, the Company entered into a master credit agreement with AgCountry Farm Credit Services FCA regarding a senior secured credit facility. As of Dec. 31, 2010, and throughout 2011, the Company was in violation of several loan covenants required under the original credit agreement and therefore, the Company was in default under the credit agreement. However, the Company entered into a forbearance agreement with AgCountry which remained effective until June 30, 2011. This default resulted in all debt under the original credit agreement being classified as current liabilities effective as of Dec. 31, 2010. The loan covenants under the original credit agreement included requirements for minimum working capital of $6,000,000, minimum current ratio of 1.20:1.00, minimum tangible net worth of $41,000,000, minimum owners' equity ratio of 50%, and a minimum fixed charge coverage ratio of 1.25:1.00, and also included restrictions on distributions and capital expenditures. On Dec. 31, 2011, the Company and AgCountry entered into an amended and restated master credit agreement pursuant to which the parties agreed to restructure and re-document the loans and other credit facilities provided by AgCountry. Under the amended agreement, the Company is required to make level monthly principal payments of $356,164 through Feb. 1, 2018. Beginning on Sept. 30, 2012, and the last day of the first, second, and third quarters thereafter, the Senior Lender will make a 100% cash flow sweep of the Company's operating cash balances in excess of $3,600,000 to be applied to the principal balance. In addition, the Company is required to make monthly interest payments at the one month LIBOR plus 5.5%, but not less than 6.0%. The interest rate was 6.0% as of Dec. 31, 2011. In addition to the monthly scheduled payments, the Company made a special principal payment in the amount of $7,105,272 on Dec. 31, 2011. As of Dec. 31, 2011, and 2010, the Company had $26,000,000 and $38,026,321 outstanding on the loan, respectively. NORTHWAY INN: Case Summary & Unsecured Creditor ----------------------------------------------- Debtor: Northway Inn Corp. c/o Mark Farrington P.O. Box 76 Mayfield, NY 12117 Bankruptcy Case No.: 12-12659 Chapter 11 Petition Date: October 10, 2012 Court: United States Bankruptcy Court Northern District of New York (Albany) Judge: Robert E. Littlefield Jr. Debtor's Counsel: Francis J. Brennan, Esq. NOLAN & HELLER, LLP 39 North Pearl Street Albany, NY 12207 Tel: (518) 449-3300 E-mail: fbrennan@nolanandheller.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Girvin & Ferlazzo, P.C. Legal Fees $15,000 Attn: Christopher P. Langlois, Esq. 20 Corporate Woods Boulevard Albany, NY 12211 The petition was signed by Mark Farrington, president. NTELOS INC: Moody's Rates $475MM Senior Secured Term Loan 'B1' -------------------------------------------------------------- Moody's Investors Service has assigned a B1 (LGD3-30%) rating to NTELOS Inc.'s proposed $475 million senior secured term loan due 2019. The proceeds from the new term loan will be used to repay existing debt and for general corporate purposes. The outlook is stable. Issuer: NTELOS Inc. Assignments: Senior Secured Bank Credit Facility, Assigned B1 Senior Secured Bank Credit Facility, Assigned a range of LGD3, 30% Ratings Rationale NTELOS's B1 corporate family rating reflects the challenges of being a small operator in an industry dominated by giants. Handset subsidies are expected to rise with increased smartphone penetration and the recent addition of the iPhone. Sales costs are also likely to rise as the Company expands distribution, marketing and customer care expenditures in an attempt to differentiate its services. Moody's also anticipates an increase in network costs as the Company builds capacity to handle current and projected growth in data usage. Despite recent improvement in retail subscriber metrics and pricing changes designed to offset higher handset subsidies, Moody's believes that NTELOS will become increasingly reliant on Sprint Nextel Corporation for its revenue and earnings. Under a Strategic Network Alliance, NTELOS is the exclusive PCS service provider in its western Virginia and West Virginia service area for Sprint's CDMA wireless customers through July 31, 2015. In 2Q 2012, Sprint accounted for 36% of total revenues, up from 30% in 1Q 2011. Moody's expects this percentage to rise steadily. The stable outlook reflects Moody's belief that the Company will execute a successful turnaround of their business as NTELOS seeks to reclaim lost wireless market share. The proposed $475 million senior secured term loan is rated B1 (LGD3 -30%), in line with the CFR as the senior secured debt accounts for nearly all of the debt within the capital structure. Moody's expects NTELOS to have very good liquidity over the next twelve months supported by either large cash balances or an unfunded revolver. However, powerful competitive challenges exacerbated by a relative lack of scale, anticipated ongoing dividends, and an inevitable migration to LTE will pressure NTELOS's ability to continue generating free cash flow. What Could Change the Rating - UP A rating upgrade is unlikely in the near term due to NTELOS's dependence on Sprint (B1 Corporate Family Rating) for a significant part of its revenue stream and management's intention to use free cash flow for dividends rather than debt reduction. However, should NTELOS decrease leverage to below 3.0x (Moody's adjusted) as a result of a sustainable improvement in operating performance, ratings could be upgraded. What Could Change the Rating - DOWN A deterioration in financial performance which results in leverage increasing to 4.5x (Moody's adjusted) or liquidity becoming strained could pressure the rating. The most likely drivers of such an outcome would be an inability to recapture market share or a decline in wholesale revenues from Sprint. NTELOS Inc. provides wireless services to approximately 425,000 retail subscribers (as of June 30, 2012) based in Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky and is also the exclusive wholesale provider of network services to Sprint Nextel in the western Virginia and West Virginia portions of its territories for all Sprint CDMA wireless customers. NTELOS is based in Waynesboro, Virginia. The principal methodology used in rating NTELOS Inc was the Global Telecommunications Industry 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. OSAGE EXPLORATION: MaloneBailey Succeeds GKM as Accountant ---------------------------------------------------------- The board of directors of Osage Exploration and Development, Inc., engaged MaloneBailey, LLP, as the Company's principal accountant. The decision to change auditors was the result of a request-for- proposal process in which the Company evaluated the credentials of several firms. During the years ended Dec. 31, 2011, and 2010 and through Sept. 30, 2012, neither the Company nor anyone on its behalf has consulted MaloneBailey regarding either (a) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's consolidated financial statements, or (b) any matter that was the subject of a disagreement or a reportable event. In connection with the selection of MaloneBailey, on Oct. 8, 2012, the Board of Directors also dismissed GKM, LLP, as the Company's principal accountant. The Company has given permission to GKM to respond fully to the inquiries of the successor auditor. The audit reports of GKM on the consolidated financial statements of the Company and its subsidiaries as of and for the years ended Dec. 31, 2011, and 2010 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, except that GKM's report on the consolidated financial statements of the Company and its subsidiaries as of and for the year ended Dec. 31, 2011, contained a separate paragraph stating that "the accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. During the fiscal years ended Dec. 31, 2011, and 2010 and any subsequent interim periods through Sept. 30, 2012, there were no (a) disagreements with GKM on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of GKM, would have caused GKM to make reference to the subject matter of the disagreement in the audit report, or (b) reportable events. About Osage Exploration Based in San Diego, California with production offices in Oklahoma City, Oklahoma, and executive offices in Bogota, Colombia, Osage Exploration and Development, Inc. (OTC BB: OEDV) -- http://www.osageexploration.com/-- is an independent exploration and production company with interests in oil and gas wells and prospects in the US and Colombia. GKM, LLP, in Encino, California, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2011 financial results. The independent auditors noted that the Company has suffered recurring losses from operations and has an accumulated deficit as of Dec 31, 2011. The Company's balance sheet at June 30, 2012, showed $12.57 million in total assets, $4.72 million in total liabilities and $7.85 million in total stockholders' equity. Bankruptcy Warning Management of the Company has undertaken steps as part of a plan to improve operations with the goal of sustaining the Company's operations for the next 12 months and beyond. These steps include (a) assigning a portion of the Company's oil and gas leases in Logan County, Oklahoma (b) participating in drilling of wells in Logan County, Oklahoma within the next 12 months, (c) controlling overhead and expenses and (d) raising additional equity or debt. There is no assurance the Company can accomplish these steps and it is uncertain the Company will achieve profitable operations and obtain additional financing. There is no assurance additional financings will be available to the Company on satisfactory terms and conditions, if at all. If the Company is unable to continue as a going concern, the Company may elect or be required to seek protection from its creditors by filing a voluntary petition in bankruptcy or may be subject to an involuntary petition in bankruptcy. OSHKOSH CORP: S&P Puts 'BB' CCR on Watch on Icahn's $4-Bil. Bid --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Oshkosh, Wis.-based Oshkosh Corp., including the 'BB' corporate credit rating, on CreditWatch with negative implications. "The CreditWatch placement reflects uncertainty regarding the leverage profile for Oshkosh and its strategic direction following reports that the company has received a buyout offer from Carl Icahn for $32.50 per share, valuing the company at close to $4 billion including debt," said Standard & Poor's credit analyst Dan Picciotto. "As we had previously noted, Carl Icahn and related entities had disclosed beneficial ownership of about 9.5% of Oshkosh stock in July 2011, through a combination of shares and call options. Although unsuccessful in electing any of his six nominees in January 2012 following a proxy fight, the Icahn-led ownership and potentially heightened shareholder focus caused some uncertainty as to the strategic direction of the company and had the potential to result in a more aggressive financial policy," S&P said. "Yesterday's announced tender offer for Oshkosh's shares has increased risks related to our assessment of the company's financial risk profile, which we currently assess as 'significant' because of uncertainty as to how the proposed transaction will be financed and the potentially more aggressive policy an Icahn-owned entity could pursue," S&P said. "Further, possible strategic actions could result in a change in our assessment of the company's business risk profile, which we currently view as 'satisfactory.' For instance, Icahn has recently indicated a desire to have Oshkosh spin off its aerial work platform segment, which represents a significant portion of revenues and profits. We expect the unit to represent more than half of operating profit in fiscal 2013," S&P said. "We will resolve the CreditWatch listing when more information regarding the proposed transaction becomes available. We will then assess the company's financial policy and the impact of any potential transaction on the company's capital structure or operating strategy," S&P said. PACIFIC MONARCH: Plan Confirmation Hearing on Nov. 15 ----------------------------------------------------- Pacific Monarch Resorts Inc. has obtained approval from the bankruptcy court to begin soliciting votes on its reorganization plan. The Debtor will seek confirmation of its reorganization plan at a hearing on Nov. 15, 2012 at 10:00 a.m. The Debtor won approval of the disclosure statement explaining its reorganization plan last month. As reported in the Sept. 12, 2012 edition of the Troubled Company Reporter, the Debtors have sold substantially all assets pursuant to 11 U.S.C. Sec. 363 to Diamond Resorts International in a transaction valued at $49.3 million. There was also a related sale of the assets to Resort Finance America, LLC, in exchange for $130 million of debt. The Debtors obtained approval of the sale in January but the sale was only completed in May. The Debtors tweaked the Plan documents to incorporate the terms of the sale. According to the Disclosure Statement: (1) There will be substantive consolidation of PMR, Vacation Interval Realty, Inc. (VIR), and Vacation Marketing Group, Inc. (VMG), (2) The Mexican entities -- MGV Cabo, LLC, Desarrollo Cabo Azul, S. de R.L. de C.V. (DCA), and Operadora MGVM S. de R.L. de C.V. -- will be merged into DCA and all claims against the Mexican entities, other than RFA's claim against DCA, will be paid in full. (3) On an after the effective date, reorganized PMR will retain the assets pursuant to a transition services agreement. PMR will deliver a notice by June 30, 2013, that the agreement has been completed. (4) Causes of Action, and assets not included in the sale will be transferred to the liquidation trust established for PMR, which will liquidate the causes action and all other trust assets, and distribute the proceeds thereof to holders of allowed claims. (5) All Holders of allowed claims against DCA and the Mexican Entities, other than RFA, will be paid in full. (6) Holders of allowed general unsecured claims against PMR, VIR and VMG, which will be substantively consolidated with PMR, will be entitled to Pro Rata distributions from the Liquidation Trust. (7) Holders of allowed convenience class claims against PMR, VIR and VMG, will receive a cash payment equal to 20% of their allowed claims. (8) From and after the Transition Completion Date, the Reorganized PMR Equity will be owned by a "New Equity Holder," who is not an affiliate or insider of any of the Debtors, and the equity in Reorganized DCA will be owned by Reorganized PMR. The Reorganized PMR Equity will be transferred to or issued to the New Equity Holder in exchange for the $50,000 cash payment to the Liquidation Trust. (9) The current interest holders of the Debtors will not receive or retain anything on account of their interests. A copy of the Disclosure Statement dated Sept. 4, 2012, is available for free at: http://bankrupt.com/misc/Pacific_M_DS_090412.pdf About Pacific Monarch Pacific Monarch Resorts, Inc., and its affiliated debtors operate a "timeshare business" business. The Debtors filed voluntary Chapter 11 petitions (Bankr. C.D. Calif. Lead Case No. 11-24720) on Oct. 24, 2011, disclosing $100 million to $500 million in both assets and debts. The affiliated debtors are Vacation Interval Realty Inc., Vacation Marketing Group Inc., MGV Cabo LLC, Desarrollo Cabo Azul, S. de R.L. de C.V., and Operadora MGVM S. de R.L. de C.V. Based in Laguna Hills, California, Pacific Monarch and its affiliates generate revenue primarily from the sale and financing of "vacation ownership points" in a timeshare program commonly known and marketed as "Monarch Grand Vacations," a multi-location vacation timeshare program that establishes a uniform plan for the development, ownership, use and enjoyment of specified resort accommodations for the benefit of its members. MGV is a nonprofit mutual benefit corporation whose members are timeshare owners, and it is administered by a board of directors elected by MGV members. As of the Petition Date, MGV owned Resort Accommodations within these resorts: Palm Canyon Resort (Palm Springs), Riviera Oaks Resort & Racquet Club (Ramona), Riviera Beach & Spa Resort - Phases I and II (Dana Point), Riviera Shores Beach (Dana Point), Cedar Breaks Lodge (Brian Head), Tahoe Seasons Resort (South Lake Tahoe), Desert Isle of Palm Springs (Palm Springs), the Cancun Resort (Las Vegas), and the Cabo Azul Resort (Los Cabos, Mexico). Future Vacation Accommodations are currently in the pre- development stage in Kona, Hawaii and Las Vegas, Nevada. Additionally, the Cabo Azul Resort has construction in progress on two buildings. The Pacific Monarch entities do not include the entities that actually own the timeshare properties that have been dedicated to use by the purchasers of timeshare points. The trusts that own the properties are not liable for the Pacific Monarch entities' obligations. MGV is not a debtor. Judge Erithe A. Smith presides over the jointly administered cases. Lawyers at Stutman, Treister & Glatt PC, in Los Angeles, serve as counsel to the Debtors. The petition was signed by Mark D. Post, chief executive officer and director. Houlihan Lokey Capital, Inc., serves as investment baker to the Debtors. Raymond J. Gaskill, Esq., represents the Debtors as special timeshare counsel. Greenberg, Whitcombe & Takeuchi, LLP, serves as the Debtors' special counsel for employment and labor matters. Lesley, Thomas, Schwarz & Postma, Inc., serves as the Debtors' tax and vacation ownership points accountants. White & Case LLP is the Debtors' special tax counsel. Attorneys at Brinkman Portillo Ronk, PC, serve as counsel to the Official Committee of Unsecured Creditors. Creditor Ikon Financial Services is represented by Christine R. Etheridge. Creditor California Bank & Trust is represented in the case by Michael G. Fletcher at Frandzel Robins Bloom & Csato, L.C. Marshall F. Goldberg, Esq. at Glass & Goldberg argues for creditor Fifth Third Bank. Creditor The Macerich Company is represented by Brian D. Huben, Esq. at Katten Muchin Rosenman LLP. Interested Party DPM Acquisition is represented by Joshua D. Wayser, Esq. at Katten Muchin Rosenman LLP. PATRIOT COAL: Beats Sierra Club in Selenium Skirmish ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that coal producer Patriot Coal Corp. won a skirmish in bankruptcy court with the Sierra Club and other environmental groups seeking to remedy selenium contamination from water discharges at some of the company's mines. According to the report, as the result of a lawsuit brought in 2006 by private environmental groups, a federal district court in West Virginia eventually approved a consent decree where Patriot agreed to a May 2013 deadline for installing equipment costing about $29 million. Last month Patriot filed papers asking the bankruptcy court to modify the automatic stay so it could petition the West Virginia court for an extension of the deadline. The report relates that three environmental groups, including the Sierra Club, filed opposition papers in bankruptcy court. They wanted the bankruptcy judge to allow the suit to go forward in its entirety. They lost. U.S. Bankruptcy Judge Shelley C. Chapman ruled on Oct. 11 that the suit may go ahead only with respect to Patriot's request for an extension of the remediation deadline. The report notes that she said the suit can proceed "for no other purpose." The groups said in a bankruptcy court filing that Patriot "has not treated a single drop of water to remove selenium" at a mine involved in the lawsuit. The Bloomberg report discloses that Judge Chapman has yet to rule on a request by the U.S. Trustee and a union to move the bankruptcy to West Virginia, where most of the mines are located, or to St. Louis, the head office. Patriot's $200 million in 3.25% senior convertible notes due 2013 traded on Oct. 11 for 16 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $250 million in 8.25% senior unsecured notes due 2018 traded at 10:27 a.m. on Oct. 12 for 50.469 cents on the dollar, Trace reported. 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: Wasendorf to Remain in Prison for Life ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Russell R. Wasendorf Sr., the former chief executive officer of liquidating commodity broker Peregrine Financial Group Inc., will probably spend the rest of his life in prison. According to the report, a federal district judge in Cedar Rapids, Iowa, denied bail pending sentencing. Mr. Wasendorf made a plea agreement with prosecutors on Sept. 11 in which he confessed to four charges of mail fraud, embezzlement and making false statements. Two days later, a federal magistrate judge ruled he was entitled to release, although under house arrest. At the government's request, U.S. District Judge Linda R. Reade blocked implementation of the magistrate's release order. Mr. Wasendorf formally pleaded guilty on Sept. 17. His plea was accepted by the court on Oct. 3. The report relates that in her opinion, Judge Reade said that the presumption is for release when a defendant is only charged with a crime. The presumption switches to detention following a guilty plea. Judge Reade said that Mr. Wasendorf is facing a minimum of 24 to 30 years in prison given the charges to which he pleaded guilty. She concluded that Mr. Wasendorf hadn't shown by "clear and convincing evidence" that he is "not likely to flee. The judge said Mr. Wasendorf may have resources to flee because he hasn't accounted for all the misappropriated $100 million to $200 million. She said his attempted suicide shows he may not be able to face the concept of incarceration for the remainder of his life. The criminal case is U.S. v. Wasendorf, 12-cr-02021, U.S. District Court, Northern District of Iowa (Eastern Waterloo). 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. PINNACLE AIRLINES: Reaches Tentative Agreement With AFA ------------------------------------------------------- Pinnacle Airlines Corp.'s wholly owned subsidiary, Pinnacle Airlines Inc., disclosed that it has reached a tentative agreement with the Association of Flight Attendants-CWA (AFA), the legal representative of the Pinnacle Airlines Flight Attendant group. Pinnacle is seeking concessions from all of its employees in order to emerge successfully from Chapter 11 proceedings with a competitive cost structure. The two sides reached a tentative agreement on concessions that cover pay, retirement, work rules and benefits. The concessions would become effective when concessions are implemented for other labor groups and non-union employees. AFA members at the airline will now have the opportunity to vote on the tentative agreement in the coming days and, if ratified, will avoid the Section 1113 litigation process in bankruptcy court. "We reached this agreement as a result of both sides sitting at the table to find a way to achieve the company's required cost savings. Pinnacle and the AFA worked together to find creative solutions to achieve the cost-reduction target while minimizing the impact on a flight attendant's W-2 wages. We appreciate the tireless effort put forth by AFA's negotiating team. We now leave it in the hands of the membership to ratify this agreement and avoid the Section 1113 process," said Barbara Setsvold, vice president of Inflight. "We would like to thank the National Mediation Board and Director of Mediation Services Lawrence Gibbons for their assistance in helping the parties reach this voluntary agreement," said John Spanjers, president and CEO of Pinnacle Airlines Corp. The tentative agreement also remains subject to required corporate approvals and review by the Bankruptcy Court. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Pinnacle Airlines and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. The company used Chapter 11 to shed 47 aircraft. Among the planes Pinnacle decided to keep are 140 regional jets leased from Delta Air Lines Inc., the provider of $74.3 million in financing for the Chapter 11 reorganization begun in April. Pinnacle is keeping another nine aircraft leased by other owners. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. The official committee of unsecured creditors tapped Morrison & Foerster LLP as its counsel, and Imperial Capital, LLC, as financial advisors. Pinnacle has the exclusive right to propose a reorganization plan until Jan. 25. PLUG POWER: Receives NASDAQ Notice Regarding Non-Compliance ----------------------------------------------------------- Plug Power Inc. a leader in providing clean, reliable energy solutions, today announced that it received a notice on Oct. 12, 2012 from the NASDAQ Stock Market. The notice stated that the Company was not in compliance with NASDAQ Marketplace Rule 5550(a) (2) because the bid price of the Company's common stock closed below the required minimum $1.00 per share for the previous 30 consecutive business days. The NASDAQ notice has no immediate effect on the listing of the Company's common stock. In accordance with NASDAQ rules, Plug Power has a period of 180 calendar days, until April 10, 2013, to regain compliance with the minimum bid price rule. If at any time before April 10, 2013, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, NASDAQ will notify the Company that it has regained compliance with the minimum bid price rule. In the event the Company does not regain compliance with the Rule prior to the expiration of the 180-day period, NASDAQ will notify the Company that its securities are subject to delisting. However, the Company may appeal the delisting determination to a NASDAQ hearing panel and the delisting will be stayed pending the panel's determination. At this hearing, the Company would present a plan to regain compliance and NASDAQ would then subsequently render a decision. The Company is currently evaluating its alternatives to resolve the listing deficiency. About Plug Power Inc. The architects of modern fuel cell technology, Plug Power -- http://www.plugpower.com/-- revolutionized the industry with cost-effective power solutions that increase productivity, lower operating costs and reduce carbon footprints. Long-standing relationships with industry leaders forged the path for Plug Power's key accounts, including Walmart, Sysco, P&G and Mercedes. With more than 2,800 GenDrive units deployed to material handling customers, accumulating over 8 million hours of runtime, Plug Power manufactures tomorrow's incumbent power solutions today. PQ CORP: Moody's Affirms 'B3' CFR; Rates First Lien Debt 'B2' ------------------------------------------------------------- Moody's Investors Service assigned B2 ratings to PQ Corporation's proposed $1.25 billion first lien senior secured credit facilities and a Caa1 rating to its proposed $720 million second lien senior secured notes. Proceeds from the transaction will be used to refinance existing debt at PQ, existing debt at unrestricted subsidiary Potters Holdings II LP, which will be become a restricted subsidiary, and pay transaction-related fees and expenses. Moody's affirmed PQ Corporation's B3 Corporate Family Rating ("CFR") and B3 Probability of Default Rating in connection with these rating assignments. The ratings on the existing bank debt at PQ, as well as all ratings at Potters, are unchanged and expected to be withdrawn following the completion of the refinancing transaction. "The proposed refinancing is credit positive, but the magnitude of improvement is not sufficient to warrant a rating upgrade at this time," said Moody's analyst Ben Nelson. The transaction improves PQ's debt maturity profile, enhances liquidity, and with the redesignation of Potters as a restricted subsidiary improves PQ's credit measures despite a modest increase in total debt. However, pro forma adjusted financial leverage remains quite high and is weak for the B rating category in the low 7 times Debt/EBITDA. Moody's believes that the substantial debt position, combined with uncertain business conditions in Europe and planned expansionary capital spending, will make it difficult for PQ to generate meaningful free cash flow for at least the next 18-24 months. PQ generated modestly negative free cash flow for the twelve months ended June 30. The actions: Issuer: PQ Corporation Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3 $150 million First Lien Senior Secured Revolving Credit Facility due 2017, Assigned B2 (LGD3 43%) $1.1 billion First Lien Senior Secured Term Loan B due 2017, Assigned B2 (LGD3 43%) $720 million Second Lien Senior Secured Notes due 2018, Assigned Caa1 (LGD4 62%) Outlook, Stable The B3 CFR is principally constrained by high financial leverage and limited prospects for meaningful free cash flow generation. The company's diverse end markets, leading market positions, broad customer base, long-term relationships, and geographic diversity lend stability to the financial performance of the business relative to other rated companies in the chemicals industry, which collectively is a primary factor that supports the rating. Moody's also believes that PQ will have good liquidity to support its operations over at least the next four quarters supported by about $80 million of cash at closing and an undrawn $150 million asset- based revolving credit facility. The B2 ratings assigned to the proposed senior secured credit facilities and Caa1 rating assigned to the proposed second lien senior secured notes reflect collateral weakness related to a substantial portion of assets located in non-guarantor subsidiaries and joint ventures. These instruments will benefit from first and second lien security interests, respectively, in the property and assets of all domestic guarantor subsidiaries. The stable rating outlook anticipates modestly positive free cash flow and that adjusted leverage will fall below 7 times by the end of 2013. Moody's could upgrade the ratings with improvement in financial leverage to below 6 times, retained cash flow above 8% of debt, and free cash flow above 3% of debt on a sustainable basis. Conversely, Moody's could downgrade the ratings with expectations for negative free cash flow or deterioration in the company's liquidity position. The principal methodology used in rating PQ Corp was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. PQ Corporation, headquartered in Malvern, Pennsylvania, is a leading provider of inorganic specialty chemicals, including sodium silicate, silicate derivatives, catalysts, reflective glass spheres, and engineered glass materials. PQ was purchased in a secondary buyout transaction by affiliates of The Carlyle Group in July 2007. PQ acquired INEOS' silica business in a leveraged transaction in July 2008. INEOS maintains a minority ownership position obtained through that transaction. PQ is amidst a refinancing transaction that is expected to close in the fourth quarter of 2012 and re-designate Potters and its subsidiaries as restricted subsidiaries. The company generated revenues of about $1.1 billion for the twelve months ended June 30, 2012. QUAD/GRAPHICS INC: Moody's Says Vertis Buyout Credit Neutral ------------------------------------------------------------ Moody's Investors Service said Quad/Graphics, Inc.'s (Quad; Ba2, Stable) proposed acquisition of Vertis Holdings, Inc. (Vertis; unrated) is credit-neutral. The principal methodology used in rating Quad/Graphics was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Sussex, Wisconsin, Quad/Graphics, Inc. (Quad), is a publicly traded provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in- store signage. Annual sales are approximately $4 billion, almost 90% of which comes from United States-based operations. In turn, more than 60% of U.S. sales come from magazines, catalogues and retail inserts. QUAD/GRAPHICS INC: S&P Puts 'BB+' CCR on Watch Neg on Vertis Deal ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Sussex, Wisc.-based printer Quad/Graphics Inc. on CreditWatch with negative implications. This includes the 'BB+' corporate credit rating and all issue-level ratings on the company's debt. "This rating action follows the company's announcement that it has entered into a preliminary agreement to acquire substantially all of the assets of printer Vertis Holdings Inc. for $285 million ($170 million net of current assets, or about 3x estimated 2012 EBITDA). To facilitate the sale, Vertis will file for Chapter 11 bankruptcy protection. As part of the bankruptcy process, Vertis and the bankruptcy courts must evaluate all competing bids for the company -- so Quad may not ultimately acquire the company. If, however, it becomes clear that Quad's bid will be accepted and the proposed transaction will close, we could lower our rating on the company by one notch (to 'BB')," S&P said. "We believe the acquisition would weaken Quad's business risk profile by increasing its exposure to a poorly performing company in a sector already under secular decline. Vertis will require significant management attention to be integrated efficiently with Quad. As a result, we expect Quad's EBITDA margin to be negatively affected over the next two years. We estimate that the company's margins will decline to about 12% from about 14% pro forma for the acquisition (this does not include synergies or restructuring costs to achieve these synergies). We expect the margin could be lower over the first one to two years after the acquisition's close, as restructuring costs would exceed synergies. At the same time, we believe that Quad will continue to face negative structural trends and economic pressures that the proposed acquisition and ongoing operational restructuring will only partly offset," S&P said. "We view Quad's business risk profile as 'fair' (as per our criteria), based on its size, operating efficiency, and profitability--notwithstanding the difficult fundamentals in the printing industry. Industry trends include keen competition, fragmentation, intense pricing pressure, declining demand in key end markets, and significant revenue volatility over the economic cycle. We view Quad's financial risk as 'intermediate,' based on its moderate leverage," S&P said. "We will resolve the CreditWatch listing once resolution of the proposed acquisition becomes clear. If Quad closes on the deal under the currently proposed terms, we could likely lower our rating on the company to 'BB'," S&P said. QUINTILES TRANSNATIONAL: Moody's Rates Incremental Term Loan 'B1' ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to the new $175 million incremental term loan and the upsized $300 million revolving credit facility being issued at Quintiles Transnational Corp. The Corporate Family and Probability of Default ratings of B1 on Quintiles Transnational Holdings Inc. (the parent company of Quintiles Transnational Corp.) as well as all existing instrument ratings remain unchanged. Proceeds of the incremental term loan, along with cash on hand, will be used to fund a distribution to the equity sponsors, which include Bain, TPG, 3i and Temasek. Adjusted debt/EBITDA will rise slightly to 5.0 times (up from 4.7 times for the twelve months ended June 30, 2012), which is within Quintiles' historical leverage range. The incremental term loan will have an all asset pledge and guarantees from operating subsidiaries, the same as the existing $2.0 billion term loan. In conjunction with the incremental term loan issuance, Quintiles is upsizing its revolver to $300 million from $225 million and extending the expiration date by one year to June 2017. Moody's Rating Actions: Ratings Assigned: Quintiles Transnational Corp. $300 million (up from $225 million) senior secured revolving credit facility expiring 2017, B1 (LGD 3, 42%) $175 million senior secured incremental term loan due 2018, B1 (LGD 3, 42%) Ratings Unchanged: Quintiles Transnational Holdings Inc. B1 Corporate Family Rating B1 Probability of Default Rating $300 million Term Loan due 2017, B3 (LGD 5, 89%) Quintiles Transnational Corp. $2.0 billion senior secured term loan B due 2018, B1 (LGD 3, 42%) The outlook is stable. The newly assigned ratings on the incremental facilities are subject to the conclusion of the transaction, as proposed, and Moody's review of final documentation. Ratings Rationale Quintiles' B1 Corporate Family Rating is constrained by the company's high financial leverage and the company's history of aggressive financial policies, including numerous dividends to shareholders and share repurchase transactions. The ratings also reflect risks inherent in the contract research organization ("CRO") industry, which is highly competitive, has high reliance on the pharmaceutical industry, and is subject to cancellation risk. Moody's also expects pricing pressure in the industry to increase as pharmaceutical companies and CROs increasingly enter into large partnership deals, which often trade volume for price. The ratings are supported by the company's size, scale and leading position as both a pharmaceutical CRO and a contract sales organization ("CSO"). Moody's believes that Quintiles, as the largest pharmaceutical service provider, is well-positioned to gain market share and benefit from the industry's growth, the outlook for which is favorable, as pharmaceutical companies look to outsource an increasing portion of their non-core functions. The ratings are also supported by the company's liquidity profile, which Moody's anticipates will continue to be very good over the next year. Moody's could upgrade Quintiles' ratings if the company demonstrates continued stable revenue growth and margins and sustains FCF/debt above 10% (after dividends) and debt/EBITDA of less than 4.0 times. Moody's could downgrade the ratings if the company experiences revenue declines and/or margin erosion due to broader trends within the CRO or CSO industry or if the company undertakes a significant debt-financed acquisition or shareholder initiatives beyond Moody's expectations. For example, sustained CFO/debt below 5%, adjusted debt to EBITDA above 5.5 times, or negative free cash flow could lead to a downgrade. The principal methodology used in rating Quintiles Transnational Holdings Inc. was the Global Business & Consumer Service Industry Rating Methodology, published October 2010. Other methodologies used include Loss Given Default for Speculative Grade Issuers in the US, Canada, and EMEA, published June 2009. Headquartered in Durham, North Carolina, Quintiles is a leading global provider of outsourced contract research and contract sales services to pharmaceutical, biotechnology and medical device companies. The company is privately-held with ownership stakes by founder and Chairman, Dr. Dennis Gillings, and private equity firms Bain, TPG, 3i and Temasek. Quintiles recorded net service revenue of approximately $3.5 billion for the twelve month period ended June 30, 2012. RADIO SYSTEMS: Moody's Rates $250-Mil. Senior Secured Notes 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Radio Systems Corporation's proposed $250 million senior secured notes and affirmed the company's corporate family rating of B2. The outlook remains stable. Proceeds from the proposed $250 million senior secured notes will be used to repay substantially all of the company's balance sheet debt including a $135 million term loan and modest revolver outstandings, as well as purchase the putable equity stake held by the company's minority shareholders. "The refinance will increase Radio System's balance sheet debt but will eliminate the event risk of the put option being exercised," stated Moody's analyst Mariko Semetko. Private equity firm TSG and other minority equity holders combined had putable shares valued at roughly $90 million. Pro forma for the refinance, the company's debt/EBITDA will increase to about 4.7 times from roughly 3.0 times but will be in line with the B2 rating category (all ratios include Moody's standard analytical adjustments). EBITA/interest expense will remain relatively healthy at well over 2.0 times. Given the fundamentally stable dynamics and favorable growth prospects of the pet care industry, Moody's expects the company's debt leverage to improve modestly over time barring any debt funded acquisitions. Moody's acknowledges that the company is considering to make an acquisition for about $25 million in the near future. Assuming the entire purchase price is funded with revolver drawings, point-in-time leverage could go up by half a turn. A half a turn increase in leverage is still acceptable for the rating, especially since EBITDA generated from the target likely will lower leverage over time. Concurrent with the refinancing, the company intends to enter a new $75 million revolving credit facility (unrated by Moody's). Moody's expects cash generation and revolver availability to provide good liquidity over the next twelve months. The probability of default rating was upgraded to B2 from B3 given the standard 50% family recovery rate applied to the new capital structure. Previously, Moody's had applied a 65% recovery rate given the company's all-bank-debt structure. The ratings are contingent upon the transaction closing as proposed, and the receipt and review of final documentation. The following rating was assigned: - Proposed $250 million senior secured notes due 2019 at B3 (LGD4, 58%) The following rating was upgraded: - Probability of default rating to B2 from B3 The following rating was affirmed: - Corporate family rating of B2 The following ratings will be withdrawn upon consummation of the transaction: - $75 million first lien revolving credit facility at B1 (LGD3, 33%) - $135 million first lien term loan at B1 (LGD3, 33%) Ratings Rationale Radio Systems' B2 corporate family rating is limited by its small scale, narrow product focus, exposure to soft discretionary consumer spending trends, competition for shelf space at large- scale retailers, and acquisition risk. At the same time, the rating is supported by the company's good liquidity, strong operating margins, relatively healthy interest coverage, and well recognized brand names. The stable outlook reflects Moody's expectation for continued healthy demand for pet related products and that Radio Systems will modestly improve its revenue and earnings while maintaining good liquidity. The outlook also incorporates Moody's assumptions that any acquisitions will not increase the company's leverage beyond the stated downgrade triggers. Ratings upside is largely limited given the company's small scale. However, the ratings could experience positive pressure to the extent that the company sustains organic revenue and earnings growth, while sustaining debt/EBITDA below 4.0 times and EBITA/interest expense approaching 3.0 times. The ratings could be pressured if the soft retail environment causes operating performance to deteriorate such that debt/EBITDA increases above 5.5 times or if EBITA/interest expenses falls below 1.5 times. Erosion in the company's liquidity (such as reduced cushion under financial covenants) or aggressive financial policies including material debt-financed acquisitions could also pressure the ratings. The principal methodology used in rating Radio Systems Corporation was the Global Consumer Durables Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Based in Knoxville, Tennessee, Radio Systems Corporation is a privately held provider of electronic pet containment products, pet training products, and pet doors with a product portfolio that consists of over 3,500 stock keeping units. The company's products are sold through mass merchandisers, pet superstores, catalogs, and distributors. Radio Systems also offers higher-margin professional contract installations of electronic pet fences. Revenues for the twelve months through June 30, 2012 were roughly $270 million. Randy Boyd, President, Chairman and CEO, owns the company. RANDOLPH/ADA: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Randolph/Ada, LLC. 5479 N. Milwaukee Chicago, Il 60630 Bankruptcy Case No.: 12-40194 Chapter 11 Petition Date: October 10, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Karen J. Porter, Esq. PORTER LAW NETWORK 230 West Monroe, Suite 240 Chicago, IL 60606 Tel: (312) 372-4400 Fax: (312) 372-4160 E-mail: kjplawnet@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Igor Gabal, sole member and manager. RAHA LAKES: Wants to Use Cash Collateral ---------------------------------------- Raha Lakes Enterprises LLC and Mehr in Los Angeles Enterprises LLC have sought Court permission to use rental income derived from their real property to pay for expenses during the pendency of their Chapter 11 cases. The property is located at 900 South San Pedro Street, Los Angeles, and is at the South-East corner of 9th Street and San Pedro Street, in the Garment District in Downtown Los Angeles. The property, which covers two thirds of a city block, consists of roughly 58,352 square feet of land and 36,833 square feet of building and fronts three streets, namely, 9th Street, San Pedro Street and 9th Place. The property's gross annual income is roughly $540,000 and its net operating income is roughly $350,000. At the time of acquisition the appraised value of the property was roughly $32.7 million and the purchase price was $9.8 million. The Debtors have one secured creditor that assert liens upon the Debtors' cash collateral: a first and second lien to San Pedro Investment LLC, as assignee of Wilshire State Bank, who is owed $8,737,301 and has a security interest in virtually all of the Debtors' assets. The Debtors said San Pedro is adequately protected by their equity cushion in the property. The Debtors have filed a budget showing the property will generate net income of roughly $23,000 in October 2012 through December 31, 2012. Therefore, according to the Debtors, as additional adequate protection of their interest in the cash collateral, San Pedro can receive adequate protection payments on a monthly basis beginning in November 2012 in the amount of $20,000. In addition, as additional adequate protection San Pedro will be granted a replacement lien upon all postpetition assets of the Debtors' estate. San Pedro Investment LLC is represented by: John Choi, Esq. KIM PARK CHOI 3435 Wilshire Blvd., Suite 1720 Los Angeles, CA 90010 E-mail: johnchoi@kpcylaw.com Raha Lakes Enterprises, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-43422) on Oct. 3, 2012, in Los Angeles. Raha Lakes, a single-asset real estate company, estimated assets of at least $10 million and debt of at least $1 million. The company's principal asset is at 900 South San Pedro Street in Los Angeles. Raha Lakes listed $10 million to $50 million in assets, and $1 million to $10 million in debts. The petition was signed by Kayhan Shakib, managing member. Mehr in Los Angeles Enterprises, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-43589) on Oct. 4, 2012, estimating assets of at least $10 million and liabilities of at least $1 million. The petition was signed by Yadollah Shakib, managing member. Judge Ernest M. Robles presides over the cases. The Debtors are represented by Michael S. Kogan, Esq., at Kogan Law Firm APC. RAHA LAKES: Has $300,000 Loan From Insider ------------------------------------------ Raha Lakes Enterprises LLC and Mehr in Los Angeles Enterprises LLC have sought Bankruptcy Court approval of up to $300,000 in postpetition revolving financing from Kayhan Shakib, Raha Lakes' managing member. The loan will incur interest at the prime rate and mature on the later of May 1, 2013, the date a plan of reorganization is confirmed, or Court approval of a sale of the assets, or conversion of the case to Chapter 7. The Debtors' obligations under the DIP Loan will be junior to all valied liens of record as of the bankruptcy filing date. The Debtors said Mr. Shakib is one of their largest creditors. He made prepetition unsecured loans to the Debtros for ongoing business operations. The Debtors said the financing is extremely favorable given their inabilty to secure funding elsewhere. About Raha Lakes and Mehr in Los Angeles Raha Lakes Enterprises, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-43422) on Oct. 3, 2012, in Los Angeles. Raha Lakes, a single-asset real estate company, estimated assets of at least $10 million and debt of at least $1 million. The company's principal asset is at 900 South San Pedro Street in Los Angeles. Raha Lakes listed $10 million to $50 million in assets, and $1 million to $10 million in debts. The petition was signed by Kayhan Shakib, managing member. Mehr in Los Angeles Enterprises, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-43589) on Oct. 4, 2012, estimating assets of at least $10 million and liabilities of at least $1 million. The petition was signed by Yadollah Shakib, managing member. Judge Ernest M. Robles presides over the cases. The Debtors are represented by Michael S. Kogan, Esq., at Kogan Law Firm APC. The Debtors' secured creditor, San Pedro Investment LLC, is represented by John Choi, Esq., at Kim Park Choi. RESIDENTIAL CAPITAL: Modifies Executive Bonuses to Satisfy Judge ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Residential Capital LLC modified the bonus program for 17 high-level executives that the bankruptcy judge in New York refused to approve in August. ResCap is asking the judge to hold a hearing on Oct. 17 for approval of the program. According to the report, U.S. Bankruptcy Judge Martin Glenn turned down the original proposal because 63% of the bonuses for executives at the mortgage-servicing subsidiary of non-bankrupt Ally Financial Inc. would be earned by completing asset sales arranged before the Chapter 11 filing. Judge Glenn concluded it was "primarily retentive in nature." Congress outlawed bonuses for top executives at bankrupt companies that were designed only to disincline executives from leaving. The report relates that the newly designed program still has maximum bonuses of $7 million and $4.1 million in target bonuses. Under the revised program, only 20% of the bonuses will be earned if the previously arranged sale is consummated. Now, 50% of the bonuses are tied to a higher sale price. The remaining 30% relate to ResCap's operating performance. ResCap will hold auctions on Oct. 23 where Fortress Investment Group LLC will make the first bid for the mortgage servicing business. Berkshire Hathaway Inc. is to be the stalking horse for the remaining portfolio of mortgages. A hearing to approve the sales is set for Nov. 5. The Bloomberg report discloses that the $2.1 billion in third-lien 9.625% secured notes due in 2015 traded on Oct. 10 for 100.375 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $473.4 million of ResCap senior unsecured notes due in April traded Oct. 11 for 25.625 cents on the dollar, according to Trace. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. Following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). REVEL ENTERTAINMENT: Bank Debt Trades at 25% Off ------------------------------------------------ Participations in a syndicated loan under which Revel Entertainment Group LLC is a borrower traded in the secondary market at 74.67 cents-on-the-dollar during the week ended Friday, Oct. 12, a drop of 3.68 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 750 basis points above LIBOR to borrow under the facility. The bank loan matures on Feb. 15, 2017, and carries Moody's Caa1 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 199 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. Revel Entertainment -- http://www.revelresorts.com/-- owns Revel, a newly opened beachfront resort that features more than 1,800 rooms with sweeping ocean views. The smoke-free resort has indoor and outdoor pools, gardens, lounges, a 32,000-square-foot spa, a collection of 14 restaurant concepts, and a casino. Revel is located on the Boardwalk at Connecticut Avenue in Atlantic City, New Jersey. RG STEEL: Inks Settlement Pact with Workers at Lousville Facility ----------------------------------------------------------------- WP Steel Venture LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to approve the Section 1113/1114 Settlement and Modified Labor Agreement between RG Steel, LLC, and the International Brotherhood of Teamsters, General Drivers Local No. 89. The Union represents approximately 25 individuals formerly employed by Wheeling Corrugating Company, a division of Debtor RG Steel Wheeling, LLC, pursuant to that certain collective bargaining agreement effective Aug. 19, 2010, between RG Steel Wheeling and the Union. According to papers filed with the Court, upon approval of the Settlement Agreement, the CBA covering the workers at the Louisville, Kentucky facility will be terminated effective as of the Aug. 31, 2012, the same date as the termination of the Debtors' other collective bargaining agreements and halts the accrual of any further postpetition obligations under the CBA. 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: Lease Decision Period Extended Until Dec. 27 ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware extended the time by which WP Steel Venture LLC, et al., must assume or reject unexpired leases of nonresidential real property for an additional ninety days, or until Dec. 27, 2012. 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. RURAL/METRO CORP: Moody's Cuts CFR/PDR to 'B3'; Outlook Negative ---------------------------------------------------------------- Moody's Investors Service downgraded Rural/Metro Corporation's corporate family and probability of default ratings to B3 from B2. In addition, Moody's lowered the senior secured credit facilities to B1 from Ba3 and the senior unsecured notes to Caa2 from Caa1. The ratings outlook continues to be negative. The downgrade of the corporate family rating to B3 with negative outlook reflects Moody's projections for a weak liquidity position over the next 12 months. Additionally, the company's performance has been weaker than expected at the time of the LBO by Warburg Pincus in 2011. Moreover, Moody's does not anticipate the company's credit metrics to improve materially over the next 12 to 18 months. Adjusted debt-to-EBITDA is projected to remain above 7 times and free cash flow generation is anticipated to be breakeven over the next 12 to 18 months. The following rating actions were taken: Corporate family rating, downgraded to B3 from B2; Probability of default rating, downgraded to B3 from B2; $110 million revolving credit facility, due 2016, downgraded to B1 (LGD2, 24%) from Ba3 (LGD2, 24%); $319 million term loan, due 2018, downgraded to B1 (LGD2, 24%) from Ba3 (LGD2, 24%); $200 million unsecured notes, due 2019, downgraded to Caa2 (LGD5, 80%) from Caa1 (LGD5, 80%); $108 million unsecured notes, due 2019, downgraded to Caa2 (LGD5, 80%) from Caa1 (LGD5, 80%). Rating Rationale The B3 corporate family rating reflects Moody's expectation that the company's credit metrics and liquidity will remain under pressure due to lower revenue and A/R conversion rates. The increase in uncompensated care, due partly because of stubbornly high unemployment rate, has lowered the revenue conversion to $0.39 per $1 in 2012 from $0.44 per $1 in 2011. In addition, weighing on the projected financial performance is the slow-down in A/R conversion to cash. Additionally, concentration of revenues and uncertain reimbursement environment weigh on the rating. At the same time, the B3 corporate family rating favorably reflects Rural/Metro's total transportation growth through new contract wins and acquisitions. The rating also considers Moody's expectation that Rural/Metro will continue to maintain its market share and possibly enter into new markets through de novos. The negative outlook reflects Rural/Metro's weak liquidity position including very limited headroom under its financial covenants over the next 12 months. Additionally, the uncertainty around the company's ability to reduce debt levels and organically grow EBITDA in the midst of a difficult operating environment contributes to the outlook. The rating could be downgraded if free cash flow generation remains negative for more than 6 months. Additional acquisitions in lieu of debt repayment, failure to renew contracts and/or a more challenging reimbursement environment could pressure the ratings. The rating could be upgraded if Rural/Metro improves its liquidity profile and operational capabilities. Furthermore, organic revenue, transportation, and EBITDA growth as well as reduction in adjusted debt-to-EBITDA to below 5.5 times are considerations for a ratings upgrade. The principal methodology used in rating Rural/Metro Corporation was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Rural/Metro provides emergency and non-emergency medical transportation, fire protection, airport fire rescue, and home healthcare services in 20 states and approximately 460 communities within the United States. The services are provided under contract with government entities, hospitals, healthcare facilities and other healthcare organizations. Net revenue for the twelve months ended June 30, 2012 was approximately $645 million. Rural/Metro was bought by Warburg Pincus in 2011. SANTOLAYA INC.: Case Summary & 6 Unsecured Creditors ---------------------------------------------------- Debtor: Santolaya Inc. P.O. BOX 364701 San Juan, PR 00936-4701 Bankruptcy Case No.: 12-07949 Chapter 11 Petition Date: October 5, 2012 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Wigberto Lugo Mender, Esq. LUGO MENDER GROUP, LLC Centro Internacional De Mercadeo Carr 165 Torre 1 Suite 501 Guaynabo, PR 00968 Tel: (787) 707-0404 E-mail: wlugo@lugomender.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its six unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/prb12-07949.pdf The petition was signed by Fernando Vigil Piovanetti, president. SIGNATURE-GORDON, LLC: Case Summary & Creditors List ---------------------------------------------------- Debtor: The Signature-Gordon, LLC 501 Westport Avenue Norwalk, CT 06851 Bankruptcy Case No.: 12-51819 Chapter 11 Petition Date: October 5, 2012 Court: U.S. Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: James M. Nugent, Esq. HARLOW, ADAMS, AND FRIEDMAN, P.C. One New Haven Avenue, Suite 100 Milford, CT 06460 Tel: (203) 878-0661 Fax: (203) 878-9568 E-mail: jmn@quidproquo.com Scheduled Assets: $900,000 Scheduled Liabilities: $4,119,849 A copy of the Company's list of its 17 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ctb12-51819.pdf The petition was signed by Kevin Daley, manager. SOLYNDRA LLC: Three Government Agencies Objecting to Plan --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that three arms of the U.S. government came out opposing approval of the reorganization plan for Solyndra LLC. Mr. Rochelle points out that if any of the theories from Internal Revenue Service, the Energy Department and the U.S. Trustee gains traction with the bankruptcy judge, the plan may fail. Each of the objectors finds different although fatal faults in the Chapter 11 plan. The objections will be considered by the bankruptcy judge in Delaware at an Oct. 17 confirmation hearing for approval of the plan. The IRS argued that the principal purpose of the plan is "tax avoidance," an outcome prohibited by Section 1129(d) of the U.S. Bankruptcy Code. The U.S. Trustee said the plan is a liquidation where the company isn't entitled to a discharge. The Energy Department argued that $29.6 million of its collateral was consumed, preventing Solyndra from confirming a plan until it's repaid. The report relates the IRS explained in its court filing how Solyndra will emerge from bankruptcy as a "shell corporation" with no employees, no business operations and no assets aside from almost $1 billion in tax loss carry forwards. The IRS said the only reason for the company to exist after bankruptcy "is to enable its owners to exploit those tax attributes." The IRS contended that one of the owners valued the tax attributes as being worth $150 million, about 20 times more than the $7 million to $8 million the plan will pay unsecured creditors, the government said. The report notes that the U.S. Trustee, the Justice Department's bankruptcy watchdog, bases opposition on another U.S. Bankruptcy Code provision, Section 1141(d), prohibiting a company in Chapter 11 from wiping out debt if the plan is a liquidation. Pointing to many of the same facts utilized by the IRS, the U.S. Trustee argued the case is a total liquidation where a discharge isn't permitted. If there is no discharge, the owners in practical effect couldn't take advantage of tax advantages because creditors could sue to recover debt not paid through the bankruptcy plan. The Bloomberg report discloses that the Energy Department argued that financing arrangements early in the case require replacing $29.6 million of the government's collateral that was consumed by operating losses during the Chapter 11 effort. 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: Hit Chinese Solar Firms With Cartel Claims -------------------------------------------------------- Scott Flaherty at Bankruptcy Law360 reports that Solyndra LLC sued Suntech Power Holdings Co. Ltd. and two other Chinese companies in California federal court Thursday, alleging they engaged in a cartel that artificially lowered solar panel prices and forced American companies to close up shop. Solyndra -- which had received a controversial half-billion dollar loan guarantee from the U.S. government -- alleged that Suntech, Trina Solar Ltd. and Yingli Green Energy Holding Co. Ltd., conspired to fix prices and flooded the U.S. market with artificially cheap solar panels, Bankruptcy Law360 relates. 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. SOUTHEAST BANKING: Chapter 11 Case Conversion Approved ------------------------------------------------------ BankruptcyData.com reports that the U.S. Bankruptcy Court approved Southeast Banking's Chapter 11 trustee's motion to convert the Chapter 11 reorganization case to Chapter 7 liquidation status. The conversion motion explains, "Undeterred, the Trustee has continued to pursue alternative investors for the past three years, but has been unable to procure a viable alternative investor to date. Thus, given the inability to consummate the confirmed plan or proceed with an alternative equity infusion transaction, the Trustee now seeks to convert this case back to Chapter 7, as the most economical and appropriate vehicle for final resolution of this case." The Court appointed Jeffery Beck as Chapter 7 trustee. About Southeast Banking Southeast Banking Corp. was the holding company of Southeast Bank, N.A., and its sister institution, Southeast Bank of West Florida, and the direct or indirect parent of a number of subsidiary corporations and affiliates, active and inactive, which at various times conducted substantial business throughout the State of Florida and beyond. The businesses of SEBC and its affiliates consisted of banking, real estate investment and development, insurance, mortgage banking, venture capital, and asset investment. At the time of their failure the Banks had total assets of $10.5 billion and total deposits of $7.6 billion. Most of the assets were with SEBNA, which had 218 of the combined 224 branches and all but $100 million of the assets. Together, the two banks had approximately 6,200 employees, operating exclusively in Florida. On September 20, 1991, Southeast Bank filed a voluntary petition under Chapter 7 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 91-14561). Southeast Bank, N.A., was seized by federal regulators while Southeast Bank of West Florida was seized by state regulators on September 19, 1991. On September 20, 1991, SEBC's board of directors voted to authorize the filing of a voluntary Chapter 7 petition, and then promptly resigned along with all of SEBC's officers. Jeffrey H. Beck was the fourth Trustee appointed in the Debtor's liquidation proceeding. This bankruptcy case was converted to Chapter 11 on September 17, 2007, almost sixteen years after its initial filing. SPRINT NEXTEL: S&P Keeps 'B+' Corp Credit Rating on Watch Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'BBB' long-term corporate credit and senior unsecured debt ratings on Softbank Corp. on CreditWatch with negative implications, based on the company's announcement that it is in discussions to invest in U.S.-based wireless service provider Sprint Nextel Corp. (B+/Watch Pos/--). "The transaction, if it proceeds, may undermine Softbank's financial risk profile, in our view. We will resolve the CreditWatch status depending on the progress of the negotiations," S&P said. "In our view, plans by Softbank to invest substantially to expand and upgrade its mobile network in Japan will pressure its free operating cash flow for at least the next few years. Accordingly, regardless of how the company finances the potential investment, Sprint Nextel's significantly weaker financial risk profile may materially undermine Softbank's 'intermediate' financial risk profile, under our criteria. Sprint Nextel's financial risk profile is 'highly leveraged' and its liquidity is 'less than adequate.' We also expect material deficits in Sprint Nextel's free operating cash flow over the next few years. Preliminarily, we do not believe a potential investment would create meaningful synergies as the two companies operate in different geographic markets. Nor do we expect any immediate benefits to Softbank's current business risk profile, which we currently view as 'satisfactory,'" S&P said. "We will resolve the CreditWatch status depending on the progress of the negotiations. Key factors for Softbank's credit quality include the amount of the possible investment; the financial scheme of the transaction; Sprint Nextel's position in Softbank's global strategy; and Softbank's financial policy and its willingness to provide financial support to Sprint Nextel, including its outstanding debt with a change of control clause," S&P said. ST. LUKE'S HOSP: S&P Withdraws 'BB-' Rating on Series 2002 Bonds ---------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its rating on the Duluth Economic Development Authority, Minn.'s $48.8 million series 2002 hospital revenue bonds issued for St. Luke's Hospital of Duluth because the bonds were refunded by the proceeds of the authority's series 2012 bonds. St. Luke's did not request a new rating. As of Standard & Poor's latest review, published March 8, 2011, on RatingsDirect on the Global Credit Portal, its long-term rating on St. Luke's was BB-/Stable. STANDARD STEEL: Moody's Lifts Corp. Family Rating to 'B2' --------------------------------------------------------- Moody's Investors Service upgraded Standard Steel LLC's ratings including its corporate family rating ("CFR") and probability of default ratings to B2 from B3 based on the expectation that credit metrics will be supportive of a B2 rating level over the intermediate term and support from its parent company, Nippon Steel & Sumitomo Metal Corp. ("NSSMC"). The ratings outlook is stable. The following ratings were upgraded: Corporate family rating, to B2 from B3 Probability of default rating, to B2 from B3 $140 million senior secured notes due 2015, to B2 (LGD-3, 48%) from B3 (LGD-3, 48%) Ratings Rationale The ratings upgrade recognizes the improvement in the company's operating performance due to a favorable product mix contributing to the company's stronger than anticipated operating performance during the first half of 2012 and expectation that metrics will be supportive of a B2 CFR over the next twelve to eighteen months. In Moody's view, credit metrics will likely weaken moderately from LTM levels but nevertheless remain in line with the B2 CFR. Standard Steel's ability to sustain these credit metrics is partially predicated on U.S. economic activity leading to increased rail traffic in addition to the company's ability to manage raw material cost increases through surcharges. Furthermore, the ratings do consider that although there is no explicit support from the company's parent, NSSMC, in the form of a formal guarantee/assumption of Standard Steel's debt, NSSMC has demonstrated its implicit support for Standard Steel. For example, in late 2011, Standard Steel's secured revolving facility was replaced by a $20 million unsecured revolver provided by its parent on an unsecured basis. More recently, in September 2012, NSSMC publicly announced its intention to partially finance a meaningful capital investment in Standard Steel with the aim of manufacturing higher-end wheels akin to those manufactured by Sumitomo Metal's operations in Japan. The B2 corporate family rating reflects the revenue visibility provided by multi-year contracts with its main customers and the degree of revenue stability contributed by the company's aftermarket business. Nevertheless, these positive factors are partially offset by the highly cyclical nature of the railcar market as well as Standard Steel's customer concentration and small revenue base. The company's adequate liquidity profile and demonstrated parental support is expected to cover any required investment during the growth phase of the cycle. Although near- term maturities are nominal over the next two years, the unsecured notes mature in 2015 and will likely need to be refinanced given Moody's expectation for limited free cash flow after maintenance and growth capital expenditures. The stable outlook anticipates that Standard Steel will maintain an adequate liquidity profile supported by positive free cash flow generation (excluding capital expenditures beyond maintenance capex) and metrics commensurate with a B2 rating level. The ratings could be downgraded if the company loses key contracts and/or customers, reports negative free cash flow after maintenance capital expenditures or credit metrics weaken such that debt/EBITDA trends towards 5.0 times or EBIT/interest falls below 1.3 times. The ratings could be upgraded if the company meaningfully increases its revenue base and improves credit metrics such debt/EBITDA is sustained at nearly 3.0 times and EBIT/interest coverage above 2.5 times. A strong track record of ongoing operational and financial support of the company's operations from its parent could also lead to upwards rating momentum. The principal methodology used in rating Standard Steel, LLC 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. Standard Steel, LLC, based in Burnham, PA, manufactures forged wheels and axles used in freight and passenger rail cars and locomotives. Reported revenues for thetwelve months ended July 1, 2012 revenues were approximately $253 million. The company is 80% owned by Nippon Steel & Sumitomo Metal Corp. with the remaining 20% owned by Sumitomo Corporation. STILLWATER MINING: Debt Issuance No Impact on Moody's 'B2' Rating ----------------------------------------------------------------- Moody's Investors Service commented that Stillwater Mining Company's (B2 stable) proposed issuance of senior convertible notes (unrated) is credit positive, but will not immediately impact the company's ratings or outlook. Stillwater Mining Company is engaged in underground mining, smelting and refining of palladium, platinum and associated minerals. The company's mining operations consist of the Stillwater and East Boulder mines, which are located at the eastern and western ends of the J-M Reef in Montana, as well as the Marathon PGM project in Canada. Stillwater also operates a smelter and refinery where, in addition to processing its mined production, it recycles spent automotive catalyst materials to recover platinum group metals (PGMs). The company had revenue of $929 million for the last twelve month period ended June 30, 2012. STILLWATER MINING: S&P Affirms 'B' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Billings, Mont.-based mining operator Stillwater Mining Co. The outlook is stable. "At the same time, we assigned our 'B' issue-level rating (the same as the corporate credit rating) to the company's $300 million convertible notes due 2032. The recovery rating on the notes is '3', indicating our expectation for meaningful (50% to 70%) recovery in the event of payment default. We also lowered the rating on Stillwater's existing $166.5 million convertible notes to 'B' from 'B+' and revised the recovery rating on the notes to '3' from '2'," S&P said. "The rating affirmation follows Stillwater's announcement that it has issued $300 million new convertible notes due 2032. Despite higher pro forma debt balances, we believe credit metrics will remain in line with the current rating, said credit analyst Megan Johnston. "We expect the company to use the proceeds from the issuance to repay principal that may come due under its existing convertible notes, which can be put to the company in March 2013, as well as for general corporate purposes. The stable outlook reflects our expectation that Stillwater's credit metrics will remain in line with the 'B' corporate credit rating, in spite of higher debt and lower PGM prices. We expect the company's debt leverage to improve to between 3x and 4x in 2013 from a range of 5x to 5.5x in 2012 because we expect the company to repay its $166.5 million in existing convertible notes in March 2013, when investors can put the notes back to the company. The rating is also supported by the company's liquidity, which we deem to be adequate," S&P said. STRUCTURAL I COMPANY: Case Summary & 7 Unsecured Creditors ---------------------------------------------------------- Debtor: Structural I Company 20235 N. Cave Creek Road, #104-616 Phoenix, AZ 85024 Bankruptcy Case No.: 12-22078 Chapter 11 Petition Date: October 5, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Joseph E. Cotterman, Esq. ANDANTE LAW GROUP OF DANIEL E. GARRISON, 4110 North Scottsdale Road, Suite 330 Scottsdale, AZ 85251 Tel: (480) 421-9449 Fax: (480) 522-1515 E-mail: joe@andantelaw.com Scheduled Assets: $31,599 Scheduled Liabilities: $1,065,782 The petition was signed by Bret McLeod, owner. Affiliates that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- Structural I Company Of Arizona 12-22079 Assets: $30,098 Liabilities: $1,065,782 Structural I Company Of California 12-22080 A copy of Structural I Company's list of its seven unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/azb12-22078.pdf A copy of Structural I Company Of Arizona's list of its seven largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/azb12-22079.pdf The petitions were signed by Chad Trott, owner. T&A DEVELOPMENT: Case Summary & 2 Unsecured Creditors ----------------------------------------------------- Debtor: T&A Development, LLC 14222 Lake Mary Jane Road Orlando, FL 32832 Bankruptcy Case No.: 12-13695 Chapter 11 Petition Date: October 5, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Brian D. Solomon, Esq. BRIAN D. SOLOMON, P.L. 1311 Indiana Avenue Saint Cloud, FL 34769 Tel: (407) 957-0077 Fax: (407) 641-8503 E-mail: bsolomon@solomon-law.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its two largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-13695.pdf The petition was signed by Andrew T. Nicholls, managing member. TC GLOBAL: Tully's Coffee Files for Chapter 11 in Seattle --------------------------------------------------------- TC Global Inc., doing business as Tully's Coffee Shops, filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 12-20253-KAO) on Oct. 10, 2012. The Debtor is represented by attorneys at Bush Strout & Kornfeld LLP, in Seattle. The Debtor disclosed assets of $4.9 million and debt totaling $3.7 million, including $2.6 million in unsecured claims. The Seattle-based chain has 57 company-owned stores and 12 franchised. There are another 71 franchises in grocery stores, schools and airports. Tully's will close nine stores following bankruptcy. Bloomberg report discloses that Tully's sold the wholesale and distribution business in 2009, generating $40 million that allowed a $5.9 million distribution to shareholders. Katy Stech and Annie Gasparro at Dow Jones' DBR Small Cap report that the Debtor's bankruptcy filing could impact its supplier, Green Mountain Coffee Roasters Inc. Headquartered in Seattle, Washington, TC Global, Inc., dba Tully's Coffee -- http://www.tullyscoffeeshops.com/-- is a specialty coffee retailer and wholesaler. Through company owned, licensed and franchised specialty retail stores in Washington, Oregon, California, Arizona, Idaho, Montana, Colorado, Wyoming and Utah, throughout Asia with Tully's Coffee International, and with its global alliance partner Tully's Coffee Japan, Tully's premium coffees are available at 545 branded retail locations globally. TC GLOBAL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: TC Global Inc. dba Tully's Coffee Shops dba Tully's Coffee Corporation 3100 Airport Way South Seattle, WA 98134 Bankruptcy Case No.: 12-20253 Chapter 11 Petition Date: October 10, 2012 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Karen A. Overstreet Debtor's Counsel: Arthur A. Shwab, Esq. Christine M. Tobin-Presser, Esq. Gayle E. Bush, Esq. BUSH STROUT & KORNFELD LLP 601 Union St Ste 5000 Seattle, WA 98133 Tel: (206-292-2110 E-mail: ashwab@bskd.com ctobin@bskd.com gbush@bskd.com Scheduled Assets: $5,907,502 Scheduled Liabilities: $3,708,649 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/wawb12-20253.pdf The petition was signed by Scott Pearson, president and CEO. T-L BRYWOOD: Wins Approval to Use Cash Until Oct. 31 ---------------------------------------------------- T-L Brywood LLC won approval from the bankruptcy judge to use cash collateral through Oct. 31, 2012. In return for the Debtor's continued interim use of cash collateral, The Private Bank and Trust Company is granted adequate protection for its purported secured interest, including inspection by the lender of the Debtor's book of records, and the Debtor's maintenance of insurance to cover all assets. About T-L Brywood T-L Brywood LLC filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No.12-09582) on March 12 , 2012. T-L Brywood owns and operates a commercial shopping center known as the "Brywood Centre" -- http://www.brywoodcentre.com/-- in Kansas City, Missouri. The Property encompasses roughly 25.6 acres and comprises 183,159 square feet of retail space that is occupied by 12 operating tenants. The occupancy rate for the Property is approximately 80%. The Debtor and lender The PrivateBank and Trust Company reached an impasse over the terms and conditions of another extension of a mortgage loan on the Property. As a result, the Debtor filed the Chapter 11 case to protect the Property from foreclosure while the Debtor formulates an exit strategy from the reorganization case. As of the Petition Date, no foreclosure relating to the Property had been filed by the Lender. Judge Donald R. Cassling oversees the case. The Debtor is represented by David K. Welch, Esq., Arthur G. Simon, Esq., and Jeffrey C. Dan. Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtor disclosed total assets of $16,666,257 and total liabilities of $13,970,622 in its schedules. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. PrivateBank is represented by William J. Connelly, Esq., at Hinshaw & Culbertson LLP. T-L BRYWOOD: Plan Filing Exclusivity Extended Until Dec. 31 ----------------------------------------------------------- T-L Brywood LLC won an extension until Dec. 31, 2012, of its exclusive period to propose a Chapter 11 plan and until Feb. 28 of its exclusive period to solicit acceptances of the plan. In seeking an extension, the Debtor said that the rejection of its global settlement proposal in its affiliated cases by the lender without any counter-offer left the Debtor with only approximately two weeks of remaining exclusivity to file its plan and supporting disclosure statement. About T-L Brywood T-L Brywood LLC filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No.12-09582) on March 12 , 2012. T-L Brywood owns and operates a commercial shopping center known as the "Brywood Centre" -- http://www.brywoodcentre.com/-- in Kansas City, Missouri. The Property encompasses roughly 25.6 acres and comprises 183,159 square feet of retail space that is occupied by 12 operating tenants. The occupancy rate for the Property is approximately 80%. The Debtor and lender The PrivateBank and Trust Company reached an impasse over the terms and conditions of another extension of a mortgage loan on the Property. As a result, the Debtor filed the Chapter 11 case to protect the Property from foreclosure while the Debtor formulates an exit strategy from the reorganization case. As of the Petition Date, no foreclosure relating to the Property had been filed by the Lender. Judge Donald R. Cassling oversees the case. The Debtor is represented by David K. Welch, Esq., Arthur G. Simon, Esq., and Jeffrey C. Dan. Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtor disclosed total assets of $16,666,257 and total liabilities of $13,970,622 in its schedules. The petition was signed by Richard Dube, president of Tri-Land Properties, Inc., manager. PrivateBank is represented by William J. Connelly, Esq., at Hinshaw & Culbertson LLP. TXU CORP: Bank Debt Trades at 25% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 75.07 cents-on-the-dollar during the week ended Friday, Oct. 12, an increase of 0.54 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2014, and carries Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 199 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. The Company's balance sheet at Dec. 31, 2011, showed $44.07 billion in total assets, $51.83 billion in total liabilities, and a $7.75 billion total deficit. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. * * * In late January 2012, Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. ULTERRA DRILLING: Moody's Withdraws 'Caa1' Corp. Family Rating -------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings for Ulterra Drilling Technologies, L.P. following its acquisition by ESCO Corporation (unrated) on August 31, 2012, which resulted in the full repayment of Ulterra's rated debt. The ratings withdrawn are the Caa1 Corporate Family Rating and the Caa1 rating on the company's senior secured term loan and revolving credit facilities. Ratings Rationale The principal methodology used in rating Ulterra was the Global Oilfield Services Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Ulterra Drilling Technologies, L.P. headquartered in Fort Worth, Texas, manufactures, sells, rents, and distributes Polycrystalline Diamond Compact (PDC) drill bits and stick-slip reduction tools used in the drilling of oil and gas wells. VERTIS HOLDINGS: Seeks Approval of Bidding, Auction Procedures -------------------------------------------------------------- Vertis Holdings Inc. has filed papers asking the Bankruptcy Court to establish guidelines that will govern the bidding, auction and sale of the Debtors' assets. Specifically, the Debtors ask the Court to schedule (a) a deadline to submit bids for the assets, (b) the date of the auction, and (c) the date of the hearing to consider approval of the proposed sale of the Assets. The Debtors also seek the Court's authority to pay Quad/Graphics Inc. an $8 million break-up fee, and reimburse Quad for its reasonable out-of-pocket expenses up to an aggregate amount not to exceed $2,500,000, in the event the Debtors consummate a deal with another buyer. The Debtors also propose to allow their lenders to participate in the sale by credit bidding all or any portion of their claims. The Debtors has a $258.5 million stalking horse offer from Quad/Graphics, which the parties negotiated pre-bankruptcy. The Debtors intend to sell substantially all of their assets, including, without limitation, all equipment, machinery, inventory, supplies, real property, software, intellectual property, cash, and accounts receivable. Pursuant to the stalking horse deal, Quad/Graphics will also acquire from the Debtors all of the Debtors' avoidance claims or causes of action (including all rights and avoidance claims of Sellers arising under chapter 5 of the Bankruptcy Code or applicable state law) against parties to assumed contracts, to the extent arising under or relating to any Assumed Contract. The Debtors said any competing offer for the assets must be at least $15.5 million greater than Quad's Stalking Horse Bid. According to the Debtors' court filings, their investment banker and financial advisor Perella Weinberg Partners LP marketed the assets for two months, soliciting expressions of interest from in excess of 70 strategic and financial investors. Several of the interested parties submitted initial bids in June 2012 for substantially all of the Debtors' assets, or specific pieces of the Debtors' business. After a review of the initial bids, the Debtors, in consultation with their lenders, selected preferred bidders and continued the sale process by providing draft sale documents only to those selected preferred bidders. In July 2012, the Debtors received second round bids from the selected bidders. Ultimately, in consultation with the lenders, the Debtors determined that a sale of substantially all their assets would be the most value-maximizing strategic alternative, and determined that Quad had submitted the highest and best offer to purchase substantially all of the Debtors' assets. Vertis is also seeking Court approval to file certain schedules to the Stalking Horse Agreement under seal, saying the documents contain highly sensitive and confidential commercial information regarding the Debtors' employees, critical information pertaining to their customers, suppliers and accounts receivables, as well as other operational and financial information. Vertis also proposes to file with the Court under seal an alphabetized list of counterparites to contracts that the Debtros will assume as part of the asset sale. Vertis is also keeping under wraps a fee letter, pursuant to which the Debtors agreed to pay certain non-refundable fees to General Electric Capital Corporation, as agent under the $150 million DIP financing facility. Vertis said the Fee Letter cannot be disclosed to the public as it contains sensitive and confidential information. GECC has required that the Fee Letter be filed under seal. About Vertis Vertis Holdings Inc. -- http://www.thefuturevertis.com/-- provides advertising services in a variety of print media, including newspaper inserts such as magazines and supplements. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. VERTIS HOLDINGS: Wants Schedules Filing Deadline Moved to Dec. 10 ----------------------------------------------------------------- Vertis Holdings Inc. asks the Bankruptcy Court to extend the Debtors' deadline to file schedules of assets and liabilities and statement of financial affairs through and including Dec. 10. Under 11 U.S.C. Sec. 521 and Fed.R.Bankr.P. 1007, the Debtors are required to file their schedules and statements within 14 days of the petition date. Delaware Local Rule 1007-1(b) automatically extends that deadline to 30 days after the petition date if the Debtors file a list of creditors with their petitions that includes more than 200 creditors, which Vertis has done so. Bankruptcy Rule 1007(c) provides that an extension of the schedules filing deadline may be granted for cause shown. Vertis said the Debtors are not in a position to file the documents by the present deadline given the amount of work entailed in completing the schedules and statements, and the competing demands upon the Debtor's personnel to address critical operational matters during the initial postpetition period. About Vertis Vertis Holdings Inc. -- http://www.thefuturevertis.com/-- provides advertising services in a variety of print media, including newspaper inserts such as magazines and supplements. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. VERTIS HOLDINGS: Can Hire Kurtzman Carson as Claims Agent --------------------------------------------------------- Vertis Holdings Inc. and its debtor subsidiaries sought and obtained Bankruptcy Court permission to employ Kurtzman Carson Consultants LLC as their claims and noticing agent. The Debtors require the assistance of a claims and noticing agent. The Debtors have thousands of potential creditors and other parties-in-interest in their Chapter 11 cases. Although the Office of the Clerk of the United States Bankruptcy Court ordinarly would serve notices on the creditors and other interested parties, and administer claims against the Debtors, Vertis said the clerk's office may not have the resources to undertake those tasks, in light of the size of the Debtors' creditor body and the expedited timelines that frequently arise in Chapter 11 cases. The Debtors have paid KCC a $50,000 retainer prior to the bankruptc filing. The Debtors also have agreed to indemnify the firm. Albert Kass, KCC's Vice President of Corporate Restructuring Services, attests that KCC is a "disinterested person" as that term is defined in 11 U.S.C. Sec. 101(14). About Vertis Vertis Holdings Inc. -- http://www.thefuturevertis.com/-- provides advertising services in a variety of print media, including newspaper inserts such as magazines and supplements. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. VERTIS HOLDINGS: Sec. 341 Creditors' Meeting Set for Nov. 19 ------------------------------------------------------------ The U.S. Trustee for Region 3 will convene a Meeting of Creditors under 11 U.S.C. Section 341 in the Chapter 11 cases of Vertis Holdings Inc. and its debtor subsidiaries on Nov. 19, 2012, at 10:00 a.m. at the J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, 844 King Street, in Wilmington. About Vertis Holdings Vertis Holdings Inc. -- http://www.thefuturevertis.com/-- provides advertising services in a variety of print media, including newspaper inserts such as magazines and supplements. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. VERTIS HOLDINGS: Court Approves First Day Motions ------------------------------------------------- Vertis Holdings, Inc. disclosed that it has received approval from the United States Bankruptcy Court for the District of Delaware for a series of First Day Motions, which collectively will enable the Company to continue operating its business as usual as it completes its Chapter 11 case and works toward the anticipated sale to Quad/Graphics. Vertis has the support of its lenders with respect to the sale to Quad/Graphics. Permissions granted by the Court during Vertis' first day motions hearing include the following: -- Access to the $150 million in new debtor-in-possession financing from a group of lenders led by GE Capital, Restructuring Finance. Based on this continued support from its ABL lenders led by GE Capital, Vertis has ample liquidity to operate its businesses throughout the sale process. -- Continued use of the Company's existing bank accounts to collect and make payments as usual, including all ordinary course payments for goods and services delivered by suppliers after the October 10th filing. -- Authority to continue client programs as usual, including the Direct Mail Postage Program, the Media Placement Payment Program and other sales incentives. -- Authority to pay employees' wages and benefits, including commissions and other compensation, repayment for reimbursable business expenses, vacation, sick leave, personal time off, leaves of absence, healthcare, insurance and welfare benefits. "The prompt approval of our first day motions is a significant milestone in our Chapter 11 process, which helps to ensures we are able to continue to compete effectively in all areas, deliver on the commitments we made to our clients, maintain our relationships with suppliers and pay our employees for the great work that they do," said Gerald Sokol, Jr., Chief Executive Officer. "In short, the Court's action ensures that we will be able to continue to operate our business with confidence as we work to achieve a strong future for all those who depend on Vertis." As previously announced on Oct. 10, 2012, Vertis and Quad/Graphics have executed an agreement through which Quad/Graphics will acquire substantially all of the assets comprising Vertis' businesses. To facilitate the intended sale, Vertis, along with its subsidiaries, filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code and, at the same time, filed documents seeking the Bankruptcy Court's approval of the proposed sale to Quad/Graphics. The agreement with Quad/Graphics comprises the stalking horse bid in the Court- supervised auction process under Section 363 of the Bankruptcy Code. Vertis and Quad/Graphics anticipate the sale will be approved by the Bankruptcy Court during the fourth quarter of 2012 and will most likely close in the first quarter of 2013, pending the receipt of customary regulatory approvals. About Vertis Holdings Vertis Holdings Inc. -- http://www.thefuturevertis.com/-- provides advertising services in a variety of print media, including newspaper inserts such as magazines and supplements. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. VERTIS HOLDINGS: Meeting to Form Creditors' Panel Set for Oct. 19 ----------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on Oct. 19, 2012, at 10:00 a.m. in the bankruptcy cases of Vertis Holdings, Inc., and its debtor- affiliates. The meeting will be held at: Hotel DuPont 11th & King Streets Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. WASTE INDUSTRIES: Moody's Affirms 'B1' CFR/PDR; Outlook Negative ---------------------------------------------------------------- Moody's Investors Service affirmed the Corporate Family and Probability of Default ratings of Waste Industries USA, Inc. at B1. The rating action follows the company's announced bank facility's covenant amendment which is geared to allowing higher financial leverage in order to provide WI with greater acquisition flexibility. The negative outlook considers that the less restrictive covenants could increase financial risk and drive the company's financial profile to a level inconsistent with the B1 ratings. Moody's also revised its LGD estimate for WI's credit facility to 49 from 45. The B1 CFR rating is driven by WI's strong market share in the Southeastern United States markets served by company's municipal solid waste (MSW) collection and disposal services. This strong competitive position has supported the company's EBITDA margins which have been modestly higher than the average rated MSW peer. Recent performance has been weaker, though all rated MSW companies have reported operational weakness. Moody's adjusted leverage has remained in the 4.1-4.4x range since the rating was assigned in February 2011 as acquisitions were funded with a mix of free cash flow and debt. However, the company is amending its credit facility with stated goal of increasing acquisition flexibility to take advantage of numerous opportunities. The expected increase in debt leverage to fund these activities represents a departure from Moody's understanding of WI's risk tolerance and raises concern leverage may exceed the level consistent with the B1 rating as the leverage covenant remains at 5.25x during the forecast period. Maintenance of leverage at or below 4.5x and improvement of the MSW operating environment could lead to the outlook returning to stable. Reduction in leverage to the mid 3x and free cash flow to debt improving to 10% could lead to positive rating momentum. This scenario seems unlikely in the term given the company's acquisition appetite. Leverage increasing to 5x or EBIT interest coverage deteriorating to 1.5x could lead to negative rating momentum. The company has good liquidity and is expected to maintain it even if the company materially increases revolver funded acquisition activity, a reflection of the size of the facility relative to the company's asset base. The principal methodology used in rating Waste Industries 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. * Moody's Says Red State Real Estate Markets See Strong Recovery ---------------------------------------------------------------- Commercial real estate prices in the political red states have recovered more robustly than have those in blue states in the aftermath of the financial crisis, says Moody's Investors Service in the report "Moody's/RCA CPPI: Blue States Set the Pace Since 2000, Red States See Stronger Post-Crisis Recovery." Overall since 2000, however, prices have gained more in the blue states than they have in the red states. Moody's looked at the real estate price trends for the states for which it had sufficient data to index and grouped them as blue, red or swing based on recent electoral polls. "The blue states have outpaced red states overall since December 2000, but the red states have outpaced the blue states since the late 2009 trough in prices," says Tad Philipp, Moody's Director of CMBS Research. "Looking at the states individually, New York is the clear leader among the large blue states as it approaches a new peak in prices." Since 2000, Texas has set the pace for commercial real estate prices among the large red states, as Virginia has among the swing states. Overall, the Moody's/RCA Commercial Property Price Indices national all-property composite indicates that price growth in commercial real estate has effectively stalled, with gains of only 0.2% in August, and 0.1% in the past three months. Over the last three months, the central business district office (CBD) sector has been the best performer among the core commercial property sectors, with prices up 1.2%. Retail has been the weakest performer, down 1.6% over the same time period. Over the last three months, the non-major markets gained 2.4%, while the major markets declined 2.4%. Moody's notes that apartments in major markets have fully recovered their 23% peak-to-trough loss. Their strong recent performance reflects that sector's healthy fundamentals and abundant liquidity. The next best performer, CBD office in major markets, is 12% below its peak. Composed of a suite of 20 indices, the Moody's/RCA Commercial Property Price Indices is a series that measures price changes in US commercial real estate through advanced repeat-sale regression (RSR) analytics. The indices use transaction data from Real Capital Analytics (RCA) and a methodology developed by David Geltner, a professor at MIT, in conjunction with Moody's and RCA. * Moody's Says Corporate Optimism Tempers Economic Nervousness -------------------------------------------------------------- Small shifts in the outlooks of non-financial corporate industries in the third quarter of 2012 reflected some stray causes of optimism amid a larger picture of global economic nervousness, Moody's Investors Service says in a new report, "US Homebuilding and Wireless Improve but Steel and Base Metals Struggle." "Stable outlooks continue to dominate in the non-financial corporate sectors, though the percentage of sectors with stable business conditions fell to 66% in the third quarter from 69% in the second," says the report's author, Mark Gray, Managing Director of Moody's Corporate Finance. Moody's industry outlooks reflect the rating agency's expectations for business conditions in a given non-financial corporate industry over the next 12--18 months. A stable outlook indicates that conditions for an industry are flat, or that it will experience only minimal improvement or decline over the near term. Only six of the 58 sectors Moody's tracks had positive outlooks at the end of the third quarter, up from five at the end of the second. But the roster of negative outlooks also rose, to 14 from 13 as of 30 June 2012. "The very small positive uptick in the third quarter reveals that significant improvement in the global economy looks unlikely in 2013, with Europe, Asia and the US remaining areas of concern," Gray says. Of the seven industry outlooks Moody's changed during the third quarter of 2012, three improved and four weakened. Moody's changed its outlook for the US Homebuilding industry to positive during the quarter, reflecting the beginning of a recovery from prolonged weak demand and high inventories. The rating agency also changed its outlook for the US Wireless sector to positive, based on a steady increase in EBITDA and the moderation of capital spending at AT&T Mobility and Verizon Wireless. Meanwhile, Moody's changed its outlook for both the Global Base Metals and US Steel sectors to negative during the third quarter. Producers of base metals experienced falling prices, and a slowing Chinese economy and European economic weakness failed to prop up demand for aluminum, copper, nickel and zinc. US steelmakers struggled with reduced purchasing levels at home, along with economic cooling in China and weakening in Europe. * Rooker-Feldman Doesn't Apply to Post-Bankruptcy Judgment ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that if a state court hands down a judgment after bankruptcy was filed, the Rooker-Feldman doctrine doesn't apply, according to an Oct. 10 opinion from the U.S. Court of Appeals in Cincinnati. According to the report, the case involved an unmarried father and mother in a child-support dispute. The state court awarded the mother $100,000 in attorneys' fees. Soon after, the father filed for bankruptcy. The mother sought to enforce the award in state court, contending the support obligation was non-dischargeable in the father's bankruptcy. With the bankruptcy pending, the state court ruled that the award wasn't discharged. The report relates that back in bankruptcy court, the father argued that the debt didn't come within the definition of support obligations not discharged in bankruptcy. Both the bankruptcy court and the district court on appeal decided they had no jurisdiction to decide the issue under Rooker-Feldman because the question was already decided in state court. Rooker-Feldman is a doctrine named for two cases from the U.S. Supreme Court. In a proper case, it prevents a federal court from undoing the judgment of a state court. The report notes that in a nine-page opinion, U.S. Circuit Judge Circuit Judge Jeffrey S. Sutton disagreed on the Rooker-Feldman issue. He said the doctrine applies "only when the state court loser files a new lawsuit in federal court after the state court adversely rules." Because the bankruptcy began before the crucial ruling in state court, Sutton said that entry of the state court judgment didn't "divest the federal courts of jurisdiction." The Bloomberg report discloses that the father nonetheless lost on the money question. Judge Sutton looked to Michigan law and concluded that the award of attorneys' fees was in the nature of support and therefore not dischargeable in bankruptcy. The case is Rugiero v. DiNardo (In re Rugiero), 11-2339, U.S. Court of Appeals for the Sixth Circuit (Cincinnati). * Akin Gump Adds Seven-Partner Team to Dallas Office ---------------------------------------------------- Akin Gump Strauss Hauer & Feld LLP is pleased to announce that a seven-partner team will be joining the firm's Dallas office. Soon to join the firm's corporate practice are Tom Yang, Garrett DeVries and Matt Zmigrosky, who will continue their focus on strategic mergers and acquisitions, capital markets and securities, including private equity transactions. Soon to join the firm's litigation practice are Marty Brimmage Jr., Mike Warnecke, Arnold Spencer and Sarah Teachout, who will continue their focus on white collar, government investigations, antitrust, false claims matters, bankruptcy litigation and commercial litigation. All seven are partners in the Dallas office of Haynes and Boone, LLP. "This is an extraordinary group of lawyers entering the prime of their careers. Their arrival will be a tremendous step forward for Akin Gump in Dallas and will greatly enhance our core strengths in corporate and litigation work," stated firm chairman Bruce McLean. "It is a rare opportunity to welcome a top-tier team with such a broad range of skills to our firm, and I'm thrilled that they will be joining us." Added Ken Menges, co-head of Akin Gump's firmwide corporate practice and partner in charge of its Dallas office, "The Dallas market is a critical hub of activity for many of our clients, and it is crucial to be able to provide them with robust levels of service across the areas that are key to their businesses. The addition of this team will greatly enhance our service offerings. Marty, Garrett, Arnold, Sarah, Mike, Tom and Matt are a truly accomplished team, and both our firm and our clients will benefit immensely from their arrival." About the Team Marty L. Brimmage Jr. has a diverse commercial litigation, bankruptcy litigation and trial practice. Licensed in both Texas and New York, Mr. Brimmage has tried cases in both federal and state courts and in arbitration proceedings all over Texas and throughout the country. Mr. Brimmage has experience representing plaintiffs and defendants in complex business litigation matters and debtors, secured lenders, creditor committees and equity holders in a wide range of bankruptcy-related matters. After receiving his J.D. from the University of Houston, cum laude, he served as the law clerk for the Honorable Robert C. McGuire, Chief Bankruptcy Judge for the Northern District of Texas. Prior to that, he received his M.B.A. from the University of North Texas, magna cum laude, and his B.B.A. from the University of North Texas, magna cum laude. Garrett A. DeVries focuses his practice on capital markets, securities and M&A and has completed transactions and represented clients in a broad range of matters and industries. Mr. DeVries serves as lead corporate securities counsel for a number of public companies and has an extensive track record handling capital raising and strategic M&A matters. A frequent author on corporate topics, Mr. DeVries has been involved in the ABA Negotiated Acquisitions Committee task forces on revisions to the ABA Model Stock Purchase Agreement as well as the ABA Federal Regulation of Securities Committee. Mr. DeVries received his J.D. from the University of Chicago and his B.S. in management from the Georgia Institute of Technology, with highest honors. Arnold Spencer concentrates his practice on defending white collar grand jury investigations and criminal prosecutions and has successfully defended several companies and executives accused of fraud and financial mismanagement. Mr. Spencer is a former Assistant United States Attorney, where he prosecuted cases involving significant corporate fraud and misconduct, including securities and financial fraud, money laundering, environmental crimes, public corruption, health care fraud, computer crimes and immigration fraud. He has appeared before every district court judge in the Eastern District of Texas. Mr. Spencer received the John Marshall Award, the highest award presented to a Justice Department attorney for contributions and excellence in legal performance, for his work with the Environmental Crimes Section. Before embarking on a career in law, Mr. Spencer gained extensive experience with securities and financial institutions as an investment banker. Mr. Spencer received his J.D. from the University of Texas at Austin School of Law and his B.A. from Amherst College, cum laude. Sarah Teachout focuses her practice on the defense of corporations and executives in complex civil and criminal cases, internal corporate investigations and government investigations. Ms. Teachout has extensive experience defending companies in False Claims Act cases brought by qui tam relators or the Department of Justice. She has successfully litigated FCA cases in district and appellate courts involving health care, defense procurement, energy, education and federal grant fraud. Ms. Teachout has written and spoken on a wide variety of topics, with a focus on False Claims Act investigations and litigation, and has also served as an adjunct professor of environmental law at Texas Christian University. Ms. Teachout received her J.D. from Harvard Law School, cum laude, and her B.A. from the University of Iowa, with highest distinction. A. Michael Warnecke is an experienced litigator who represents clients in a broad range of internal investigations, criminal matters, civil litigation and similar "bet the company" matters. Mr. Warnecke maintains a particular focus in representing clients, both national and global, in matters related to government investigations and prosecutions. Mr. Warnecke is an active member of The Sedona Conference, the nation's premier eDiscovery think tank, and consults regarding electronic discovery and information management issues. He is a senior editor of the recently published The Sedona Conference Cooperation Guidance for Litigators & In- House Counsel (2011) and is a co-author of State Antitrust Practice and Statutes, Ch. 48, (Texas), ABA Section of Antitrust Law ed., 4th ed. 2009. Mr. Warnecke received his J.D. from the University of Texas at Austin School of Law, with honors, and his A.B. from Dartmouth College, magna cum laude. Thomas H. Yang represents clients in matters related to strategic mergers and acquisitions, capital markets and securities, including a particular focus in private equity M&A. Mr. Yang is the recipient of a number of regional and industry recognitions, including his selections, both in 2011, as one of six top M&A dealmakers by Dallas Business Journal and by D Magazine as one of the best corporate lawyers in Dallas. Mr. Yang is active in the Asian-American community and is a former president of the Dallas Asian-American Bar Association. He received his J.D. from Columbia University in the City of New York and his B.A. from Columbia University in the City of New York. P. Matt Zmigrosky has significant experience representing companies and private equity firms on transactional matters, including mergers, acquisitions, venture capital/private equity investments, distressed M&A transactions, reorganizations and other strategic transactions in a broad range of industries. Mr. Zmigrosky is a member of the working group that compiles the widely recognized "Deal Points Study," a study of negotiated M&A terms that has been adopted by the Committee on Mergers and Acquisitions of the American Bar Association. He received his J.D. from Southern Methodist University Dedman School of Law, cum laude, and his B.S.M. from Tulane University, cum laude. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- AK STEEL HLDG AKS US 3,901.0 (360.6) 129.6 AMC NETWORKS-A AMCX US 2,173.4 (959.1) 542.5 AMER AXLE & MFG AXL US 2,441.2 (394.7) 169.7 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMERISTAR CASINO ASCA US 2,058.5 (28.0) 42.5 AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0 ATLATSA RESOURCE ATL SJ 886.5 (270.4) 21.8 AUTOZONE INC AZO US 6,265.6 (1,548.0) (676.6) BOSTON PIZZA R-U BPF-U CN 162.9 (92.3) (0.3) CABLEVISION SY-A CVC US 6,991.7 (5,641.6) (286.1) CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CHENIERE ENERGY CQP US 1,873.0 (442.2) 117.0 CHOICE HOTELS CHH US 857.7 (11.2) 402.1 CIENA CORP CIEN US 1,915.3 (60.3) 710.4 CINCINNATI BELL CBB US 2,702.7 (696.2) (52.8) CLOROX CO CLX US 4,355.0 (135.0) (685.0) DEAN FOODS CO DF US 5,553.1 (3.1) 185.6 DELTA AIR LI DAL US 44,720.0 (1,135.0) (6,236.0) DENNY'S CORP DENN US 328.9 (2.8) (20.3) DIRECTV DTV US 19,632.0 (4,045.0) 520.0 DOMINO'S PIZZA DPZ US 424.6 (1,369.1) 52.9 ELOQUA INC ELOQ US 37.5 (9.6) (14.2) FERRELLGAS-LP FGP US 1,397.3 (27.5) (50.9) FIESTA RESTAURAN FRGI US 286.0 2.6 (14.7) FIFTH & PACIFIC FNP US 900.5 (175.5) 130.9 FREESCALE SEMICO FSL US 3,499.0 (4,498.0) 1,374.0 GENCORP INC GY US 908.1 (164.3) 48.1 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GOLD RESERVE INC GRZ US 78.3 (25.8) 56.9 GOLD RESERVE INC GRZ CN 78.3 (25.8) 56.9 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 HAWAIIAN HOLDING HA US 1,859.7 (21.2) (70.0) HCA HOLDINGS INC HCA US 27,132.0 (6,943.0) 1,690.0 HOVNANIAN ENT-A HOV US 1,624.8 (404.2) 881.0 HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) HYPERION THERAPE HPTX US 9.6 (41.8) (31.4) INCYTE CORP INCY US 312.0 (217.2) 154.4 INFINITY PHARMAC INFI US 113.0 (3.4) 70.2 INTERCEPT PHARMA ICPT US 12.1 (9.4) 6.1 IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE US 1,583.6 (245.9) (227.2) JUST ENERGY GROU JE CN 1,583.6 (245.9) (227.2) LIMITED BRANDS LTD US 6,589.0 (245.0) 1,316.0 LIN TV CORP-CL A TVL US 839.2 (51.8) 52.7 LORILLARD INC LO US 2,576.0 (1,568.0) 881.0 MARRIOTT INTL-A MAR US 5,865.0 (1,296.0) (1,532.0) MERITOR INC MTOR US 2,555.0 (933.0) 279.0 MONEYGRAM INTERN MGI US 5,185.1 (116.1) (35.3) MORGANS HOTEL GR MHGC US 545.9 (110.1) (7.0) MPG OFFICE TRUST MPG US 2,061.5 (827.9) - NATIONAL CINEMED NCMI US 794.2 (354.5) 95.8 NAVISTAR INTL NAV US 11,143.0 (358.0) 1,585.0 NB MANUFACTURING NBMF US 2.4 (0.0) (0.5) NEXSTAR BROADC-A NXST US 566.3 (170.6) 40.2 NPS PHARM INC NPSP US 186.9 (45.3) 130.3 NYMOX PHARMACEUT NYMX US 2.7 (7.7) (0.9) ODYSSEY MARINE OMEX US 22.4 (29.3) (26.9) OMEROS CORP OMER US 10.1 (20.5) (8.7) PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 259.8 (161.1) 144.3 PERFORMANT FINAN PFMT US 198.3 (4.2) 17.3 PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PRIMEDIA INC PRM US 208.0 (91.7) 3.6 QUALITY DISTRIBU QLTY US 454.5 (29.8) 60.7 REALOGY HOLDINGS RLGY US 7,822.0 (1,721.0) (484.0) REGAL ENTERTAI-A RGC US 2,306.3 (542.3) 62.5 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) REVLON INC-A REV US 1,173.9 (665.6) 177.8 RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,813.5 (202.0) 449.5 SHUTTERSTOCK INC SSTK US 30.2 (29.6) (33.4) SINCLAIR BROAD-A SBGI US 2,160.2 (66.3) (1.4) TAUBMAN CENTERS TCO US 3,096.1 (295.3) - TEMPUR-PEDIC INT TPX US 865.5 (12.1) 258.9 THRESHOLD PHARMA THLD US 86.3 (51.4) 71.2 UNISYS CORP UIS US 2,397.9 (1,190.0) 463.1 VECTOR GROUP LTD VGR US 885.7 (119.5) 248.2 VERISIGN INC VRSN US 1,942.0 (59.2) 858.0 VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VRINGO INC VRNG US 3.7 (1.4) 2.1 WEIGHT WATCHERS WTW US 1,193.6 (1,784.6) (259.9) ********* 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 ***