/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/121025.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, October 25, 2012, Vol. 16, No. 297 Headlines 18 RVC: Personal Guarantee Not Enough for Separate Unsecured Class A123 SYSTEMS: Seeks Court Approval on Employee Incentive Plan ALASKA AIR TAXI: Fighting IRS Over $1MM in Unpaid Taxes AMERICAN AIRLINES: Marathon Wants Examiner for Embraer Settlement AMERICAN APPAREL: Amends Purchase Agreement With CEO and Chairman AMPAL-AMERICAN: Receives Favorable NASDAQ Listing Determination ARCAPITA BANK: Court Adjourns Hearing on SP Financing to Oct. 25 ARDENT MEDICAL: Joint Venture No Impact on Moody's 'B2' CFR ATP OIL: Martin Energy Joins Creditors Committee BACK YARD BURGERS: To Close 20 Locations In Bankruptcy BACK YARD BURGERS: Meeting to Form Creditors' Panel on Oct. 30 BERNARD L. MADOFF: UK High Court Ruling May Impact Picard Actions BERRY PLASTICS: To Issue 21.6MM Shares Under Incentive Plans BION ENVIRONMENTAL: Sends October Newsletter to Shareholders BRAND ENERGY: Moody's Affirms 'B3' CFR/PDR; Outlook Stable CAMARILLO PLAZA: Has Until Nov. 2 to File Chapter 11 Plan CAMBRIDGE HEART: Noteholders OK Deferral of Interest Payments CHEROKEE SIMEON: Files for Chapter 11 in Delaware CIRCUIT CITY STORES: Settles LCD Price-Fixing Claims With Chi Mei CIRCUS & ELDORADO: Wins Confirmation of Reorganization Plan CLEARWIRE CORP: Comcast Holds 12.8% of Class A Shares COMARCO INC: Seven Directors Elected to Board CRYOPORT INC: To Issue Add'l 3MM Shares Under 2011 Incentive Plan DCB FINANCIAL: Posts $306,000 Net Income in Third Quarter DESERT HAWK: Gets $100,000 Loan from DMRJ Group Despite Default DEVI LLC: Alabama Marriot Courtyard Hotel in Chapter 11 DEWEY & LEBOEUF: Former LeBoeuf Lamb Partners Appeal Settlement DEWEY & LEBOEUF: Wants Stay Modified to Allow Setoff With GEAM DEWEY & LEBOEUF: US Trustee Fights Bid to Disband Ex-Partner Panel DIGITAL DOMAIN: Post-Sale Bonuses Approved by Court DIGITAL DOMAIN: Makes Peace Over West Palm Beach Site DTE ENERGY: Moody's Raises Rating on Sr. Secured Bonds to 'Ba2' ELPIDA MEMORY: Wants to Incur $190-Mil. Shinseigin Financing EP ENERGY: Moody's Rates $300-Mil. Second Lien Term Loan 'Ba3' EP ENERGY: S&P Gives 'B+' Rating on $300MM Term Loan Due 2019 EPL OIL: Moody's Corrects October 15 Rating Release EUROFINANCE SA: UK High Court Won't Enforce U.S. Default Judgments FTLL ROBOVAULT: Files List of 20 Largest Unsecured Creditors FULLER BRUSH: Lender Victory Park Buys Consumer Business GUARANTY BANK, AUSTIN: FDIC Wants $900MM Suit in State Court GUARANTY FINANCIAL: International Paper Settle Suit for $80MM GUARANTY FINANCIAL: Int'l Paper Pays $80MM to End Trustee's Suit HAWAIIAN TELCOM: S&P Raises Corporate Credit Rating to 'B' HEALTH MANAGEMENT: Fitch Affirms 'BB-' Issuer Default Rating HMX ACQUISITION: Sale Price Provides Full Payment to Secured Debt HOLLYWOOD PANORAMA: Tenants Can't Amend Lawsuit Over 2001 Fire HORSHAM 410: Files for Chapter 11 in Philadelphia HOUSTON, TX: Fitch Affirms 'B' Rating on $323.5-Mil. Revenue Bonds IDEARC INC: Properly Capitalized When Spun Off, Says JPM Exec INCREDIBLE DAVE'S: Court Directs Brady to Turn On Scoring System INDIANAPOLIS DOWNS: Fights Objections for $500M Sale, Ch. 11 Plan INTERSTATE PROPERTIES: Files for Chapter 11 in Atlanta IRVINGTON COMMUNITY: S&P Lowers Rating on 2 Bond Issues to 'BB+' JACOBS FINANCIAL: Incurs $454,000 Net Loss in Aug. 31 Quarter JEFFERSON COUNTY: Sued Over $4-Mil. Inmate Health Care Deal K-V PHARMACEUTICAL: Cash Set to Increase by $6.5 Million KH FUNDING: Wells Fargo Can't Nix Bondholder Suit Over Default KINETIC CONCEPTS: S&P Keeps BB- Ratings on $2.4BB Secured Credit LAUREATE EDUCATION: Moody's Keeps B2 CFR; Rates $350MM Notes Caa1 LAUREATE EDUCATION: S&P Affirms 'CCC+' Rating on $700MM Sr. Notes LDK SOLAR: HRX to Buy 19.9% of Issued and Outstanding Capital LEVI STRAUSS: Moody's Affirms 'B1' CFR/PDR; Outlook Positive LOCATION BASED TECHNOLOGIES: Wins Over 100 New Business Customers MENDOCINO COAST: CBA Issues Prompt Chapter 9 Filing MENDOCINO COAST: Chapter 9 Case Summary & List of Top Creditors MF GLOBAL: Corzine Seeks Dismissal of Investors' Lawsuit MF GLOBAL: Trustees Win Judge Not to Shut Down WARN Act Case MF GLOBAL: Jon Corzine Asks Judge to Toss Securities Fraud Suit MF GLOBAL: Corzine Wants Dismissal From Fraud Class Action Suit MGT CAPITAL: Now Debt-Free, Appeals NYSE Delisting MILK HOLDING: S&P Rates $315MM Credit Facilities 'B-' MOUNTAIN PROVINCE: To Issue $13.4 Million Subscription Rights NAKNEK ELECTRIC: Wants Collateral Disposition, Settlement OK'd NAVISTAR INTERNATIONAL: GAMCO Asset Discloses 6.2% Equity Stake NAVISTAR INTERNATIONAL: Amends Rights Pact with Computershare NEUSTAR INC: S&P Affirms 'BB' Corp Credit Rating; Outlook Revised OCEAN BREEZE: Nov. 1 Hearing on Continued Cash Collateral Use OLDE PRAIRIE: To Sell $195-Mil. Chicago Property OVERSEAS SHIPHOLDING: Evaluating Options, Including Ch. 11 OVERSEAS SHIPHOLDING: Block & Leviton Probes Securities Violations PATRIOT COAL: Court Extends Lease Decision Period Until Feb. 4 PEREGRINE PHARMACEUTICALS: Cohen Milstein Conducts Probe PLAINS EXPLORATION: Moody's Rates $2.25-Bil. Senior Notes 'B1' PLAINS EXPLORATION: S&P Rates $2.25-Bil. Unsecured Notes 'B' QUALTEQ INC: Ch. 11 Trustee Wants to Incur $5-Mil. DIP Financing RAIN CII: Moody's Reviews 'B1' CFR/PDR for Downgrade RESIDENTIAL CAPITAL: Ocwen, Walter Win Auction for Servicing Biz RESIDENTIAL CAPITAL: Won't Have Borrower-Homeowner Committee RESIDENTIAL CAPITAL: GMAC to Pay PwC, Pepper Hamilton and Hudson RESIDENTIAL CAPITAL: Wins Interim OK to Hire Hudson Cook RESIDENTIAL CAPITAL: Pepper Hamilton Hiring Has Interim Approval RESIDENTIAL CAPITAL: Fights Chapter 7 Liquidation Bid RFSC INTERNATIONAL: In Voluntary Liquidation Proceedings in the UK RG STEEL: Inks Stipulation Granting AFCO Credit Relief From Stay RG STEEL: Asks Court's OK to Sell 100,000 Net Tons of Iron Pellets RG STEEL: Deals Resolving Bids to Vacate Sale Order Resolved RIVER CANYON: National Valuation Approved as Appraiser ROYAL BANK: Fitch Views Sale Deal as Neutral to Ratings SAAB CARS: Has November Plan Disclosure Hearing SATCON TECHNOLOGY: Can Employ Epiq as Claims and Noticing Agent SATCON TECHNOLOGY: Meeting to Form Creditors' Panel on Oct. 30 SATCON TECHNOLOGY: Procedures for Trading in Common Stock OK'd SATCON TECHNOLOGY: Debtors' Representative in Any Foreign Country SATCON TECHNOLOGY: Has Interim OK to Use Cash Collateral to Nov. 6 SATCON TECHNOLOGY: Amends List of 30 Largest Unsecured Creditors SF CC INTERMEDIATE: Moody's Assigns 'B3' Corp. Family Rating SHILO INN: Court Send Parties to Mediation to Resolve Plan Issues SKINNY NUTRITIONAL: Inks Standstill Agreement with Trim Capital SOLAR TRUST: Schedules Dec. 20 Plan Confirmation SOLYNDRA LLC: Chapter 11 Plan Approved Over IRS Objection STEREOTAXIS INC: Former Accuray Chairman & CEO Named to Board STONE ENERGY: Moody's Rates $300-Mil. Sr. Unsecured Notes 'B3' STONE ENERGY: S&P Rates $300MM Senior Unsecured Notes 'B-' T3 MOTION: Due Date of Perry Trebatch Note Extended to Oct. 31 TIBURON POINTE: Investors' Substantial Contribution Claim Rejected TIBURON VIEW: Investors' Substantial Contribution Claim Rejected TRAVELERS INSURANCE: Haskell Sues for Cleanup Coverage TRIBUNE CO: Seeks Court Approval to Obtain Exit Financing TRIBUNE CO: Proposes Protocol for Senior Noteholder Payments TRIBUNE CO: Ernst & Young Providing Additional Services TRIDENT MICROSYSTEMS: Has Dec. 13 Plan Confirmation Hearing UPPER DECK: European Arm Files Chapter 15 Petition in Manhattan UPPER DECK: Chapter 15 Case Summary US FOODS: Moody's Confirms 'B3' CFR/PDR; Outlook Stable W.R. GRACE: Has Accord With Dairyland Insurance W.R. GRACE: Proposes to Increase SC&H Expense Cap to $2.0-Mil. W.R. GRACE: Ethical Wall Between Smith and Orrick Lawyers Set WASHINGTON MUTUAL: Former Officers Face Resistance to Bonus Claims WAVE SYSTEMS: To Raise $3.3-Mil. in Registered Direct Offering WAYSIDE SCHOOLS: S&P Gives 'BB+' Rating on $719MM Revenue Bonds WINDSOR FINANCING: Moody's Rates $246-Mil. Term Loan 'Ba2' ZACKY FARMS: Has 7-Member Unsecured Creditors' Committee * Moody's Says US Corporate Family Defaults Down in Q3 2012 * Stutman Treister Opens NY Office, Brings Back Mike Goldstein * U.K. Supreme Court Won't Enforce U.S. Default Judgments * 6th Circuit Appoints Schaaf as E.D. Kentucky Bankruptcy Judge * 9th Circuit Appoints Latham as S.D. Calif. Bankruptcy Judge * 9th Cir. Appoints Gary Sparker as Alaska Bankruptcy Judge * Recent Small-Dollar & Individual Chapter 11 Filings ********* 18 RVC: Personal Guarantee Not Enough for Separate Unsecured Class ------------------------------------------------------------------ Bankruptcy Judge Robert E. Grossman said the existence of a personal guaranty of a secured debt is not enough to classify the unsecured deficiency claim of a partially secured lender separately from other unsecured creditors. In the Chapter 11 case of 18 RVC LLC, the Court was asked to rule on (a) a motion for relief from the stay filed by the Debtor's secured lender, New York Community Bank, to permit NYCB to proceed with a foreclosure on the Debtor's real property, and (b) the Debtor's amended disclosure statement related to the Debtor's amended plan of reorganization. The issue which guides the Court's resolution of these two matters is whether under the facts of the case it is legally permissible for a debtor to classify the unsecured deficiency claim of a partially secured lender separately from other unsecured creditors. The Debtor concedes that its ability to propose a viable plan of reorganization under chapter 11 of the Bankruptcy Code hinges on the answer to this question. RVC LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 812- 72378) on April 17, 2012, listing under $1 million in both assets and debts. The Debtor's sole asset is real property improved by a commercial building located in Rockville Centre, New York. The Debtor is a "single asset real estate debtor" as that term is defined in 11 U.S.C. Section 101(51B). The Debtor has one tenant -- R.S. Naghavi, MD, PLLC, which is the medical practice of Dr. Reza Neghavi. Dr. Neghavi is the managing member of the Debtor's managing member, SMARS Holding, LLC. The real property is encumbered by a first mortgage lien held by NYCB in the total amount of $1,145,839. The Debtor filed the bankruptcy case to forestall NYCB's foreclosure proceeding. NYCB filed a motion for relief from the automatic stay, or alternatively to dismiss the bankruptcy case on the ground that the case was filed in bad faith for the sole purpose of forestalling foreclosure of NYCB's interests. NYCB argued that the stay should be lifted because there is no equity in the real property and the property is not necessary to an effective reorganization. NYCB argued that the Debtor has no ability to confirm a plan of reorganization because NYCB's unsecured deficiency claim would necessarily control the unsecured class leaving the Debtor unable to satisfy the requirement of 11 U.S.C. Section 1129(a)(10) that an impaired class of creditors vote in favor of the plan. The Court deferred ruling on the motion for relief from stay -- conditioned upon $10,000 monthly adequate protection payment being made to NYCB -- to allow the Debtor to propose a confirmable plan. On Aug. 17, 2012, the Debtor filed a proposed disclosure statement and plan, and on Oct. 1, 2012, filed an amended disclosure statement and amended plan. The Plan as proposed classifies NYCB's secured, first mortgage claim in Class 1 and proposes to pay the secured claim $820,000 -- the alleged value of the Debtor's real property -- plus 6% interest based on a 20-year amortization, in 60 equal monthly installments of $5,874, with a balloon payment of $693,782.86 to be paid at the end of 60 months. The total debt owed to NYCB is $1,145,839.39. Pursuant to 11 U.S.C. Section 506(a), the Plan proposes to bifurcate NYCB's claim and treat the amount of the debt that exceeds the value of the property, as an unsecured claim. The Plan classifies NYCB's $325,839.39 "deficiency" claim in Class 2 and proposes to pay 5% of that claim (approx. $16,292) in one lump sum payment shortly after confirmation. Class 3 of the Plan contains minimal priority tax claims which will be paid in full, and Class 4 is a class of miscellaneous unsecured creditors to which the Debtor proposes to make a 5% distribution of approximately $27,850. NYCB objects to the approval of the Disclosure Statement on several grounds, including that the proposed Plan improperly classifies NYCB's unsecured deficiency claim separately from other unsecured creditors. Relying on Boston Post Road Limited Partnership v. FDIC (In re Boston Post Road Limited Partnership), 21 F.3d 477 (2d Cir. 1994), cert denied, 513 U.S. 1109 (1995), NYCB argues that by separately classifying NYCB's unsecured claim, the Debtor has improperly gerrymandered the unsecured classes in an attempt to ensure obtaining an impaired class of creditors who will vote in favor of the Debtor's Amended Plan. If NYCB's unsecured deficiency claim were included in the miscellaneous unsecured creditor class -- Class 4 -- the dollar amount of NYCB's claim in relation to the rest of the class, would ensure that Class 4 would not accept the plan. However, if NYCB's deficiency claim is separately classified, the rejection of the plan by NYCB, and presumed acceptance by Class 4, would permit the Debtor to proceed with a "cramdown" of the plan over NYCB's objection. The Debtor has filed no legal memoranda to support the separate classification of NYCB's unsecured deficiency claim. The Debtor, however, pointed to a single recent decision of the Ninth Circuit Bankruptcy Appellate Panel in Wells Fargo Bank, N.A. v. Loop 76 LLC (In re Loop 76 LLC), 465 B.R. 525 (B.A.P. 9th Cir. 2012). The Debtor's counsel argues that the existence of a personal guarantee by Dr. Naghavi causes NYCB's claim not to be "substantially similar" to the Debtor's other unsecured creditors which do not have recourse against Dr. Naghavi. At the hearing on Oct. 15, the Court issued an oral ruling declining approval of the Disclosure Statement, and granting NYCB's motion for relief from stay. The Court agreed with NYCB and held that the existence of a personal guarantee, without more, is not a legitimate reason for separately classifying the unsecured deficiency claim of a secured lender. Aside from Loop, the Debtor has presented the Court with no other legitimate reason for separately classifying NYCB's unsecured deficiency claim. The record is barren of any facts that could allow the Court to find that there is any reason for separately classifying the claim other than for the purpose of creating a class of creditors to vote in favor of the Debtor's proposed plan and cram down the secured lender. Judge Grossman noted that the majority of courts that have considered this issue have held that the existence of a personal guarantee, alone, is not a sufficient basis to find that an unsecured deficiency claim is not substantially similar to other unsecured creditors. A copy of the Court's Oct. 22, 2012 Memorandum Decision is available at http://is.gd/7Y59N5from Leagle.com. A123 SYSTEMS: Seeks Court Approval on Employee Incentive Plan ------------------------------------------------------------- BankruptcyData.com reports that A123 Systems filed with the U.S. Bankruptcy Court a motion for approval to implement a (I) key employee incentive plan for 9 employees, (II) key employee retention plan (KRP) for 66 employees and (III) postpetition severance plan for all full-time employees. The motion further requests that the amounts to be paid be granted administrative expense priority status. The KEIP has an estimated price cost of $2.4 million to $4.2 million, and the KERP's estimated coast is $2.7 million. The maximum severance will equal 12 weeks of pay. The Court scheduled a Nov. 8, 2012 hearing on the motion. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designs, develops, manufactures and sells advanced rechargeable lithium-ion batteries and battery systems and provides research and development services to government agencies and commercial customers. A123 is the recipient of a $249 million federal grant from the Obama administration. Pre-bankruptcy, A123 had an agreement to sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. A123 didn't make a $2.7 million payment due Oct. 15 on $143.75 million in 3.75% convertible subordinated notes due 2016. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012, with a deal to sell its auto-business assets to Johnson Controls Inc. The deal with JCI is valued at $125 million, and subject to higher offers at a bankruptcy auction. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Debt includes $143.8 million on 3.75% convertible subordinated notes. Other liabilities include $22.5 million on a bridge loan owing to Wanziang. About $33 million is owed to trade suppliers. The Hon. Kevin J. Carey presides over the case. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. The petitions were signed by David Prystash, chief financial officer. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. ALASKA AIR TAXI: Fighting IRS Over $1MM in Unpaid Taxes ------------------------------------------------------- Katy Stech, writing for Dow Jones Newswires, reports that a fight over $1 million in unpaid taxes has already caused pilot Jack Barber's to put his Anchorage-based company, Alaska Air Taxi LLC, and its fleet of seven small airplanes into Chapter 11 bankruptcy protection. Dow Jones notes Alaska Democratic Sen. Mark Begich is accusing the IRS of trying to collect years' worth of back payments from charter operators for a tax that he says is vaguely defined and shouldn't be charged at all on certain flights. His office said that tax bills of up to $1 million have been sent to the state's charter airline operators, which carry tourists to remote spots, support the oil-and-gas industry and deliver cargo to hard-to- reach villages in a state where 82% of communities are not accessible by road, according to the Alaska Air Carriers Association. "This thing is going to affect all the tourism in Alaska, if not the United States," Mr. Barber said of the IRS's interpretation of the rules, according to the report. Dow Jones says an IRS spokeswoman said she couldn't comment on pending legislation or individual disputes. About Alaska Air Taxi Alaska Air Taxi LLC, a charter air carrier, filed a Chapter 11 petition (Bankr. D. Alaska Case No. 12-00631) on Oct. 20, 2012, in Anchorage, saying assets and debt are both less than $10 million. The Anchorage-based company operates all year with 10 aircraft using floats, skis or wheels, according to the Web site. David H. Bundy P.C. serves as counsel to the Debtor. A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/akb12-00631.pdf The petition was signed by Jack B. Barber, managing member. AMERICAN AIRLINES: Marathon Wants Examiner for Embraer Settlement ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Marathon Asset Management LP is trying to block or delay a settlement under which AMR Corp. and its lenders agreed to cut the costs of operating 216 smaller-capacity regional jets manufactured by Embraer SA. The jets are operated by American Eagle Inc., the feeder airline for American Airlines Inc. According to the report, Marathon, based in New York, points to the period between June and November 2011, when AMR was trying to avoid bankruptcy and attempting to spin off American Eagle to shareholders. To spruce up American Eagle's balance sheet, ownership of 263 smaller jets was transferred to AMR from the regional airline. Marathon contends there may be fraudulent transfer claims to bring against the lenders because AMR may have received less in value that it gave up when it assumed about $2.3 billion in liability on the planes. The lenders targeted by Marathon are Brazil's Agencia Especial de Financiamento Industrial and Banco Nacional de Desenvolvimento Economico e Social. The report relates that Marathon filed papers Oct. 23 objecting to the approval of the settlement with the financing parties. The bankruptcy court in New York will hold a hearing on Oct. 30 to consider approval of the accord. Marathon also asked the bankruptcy judge to appoint an examiner. Marathon says it's not advocating for lawsuits yet and only wants an examiner to say before the settlement is approved that no valuable claims are being lost. The Bloomberg report discloses that the papers filed by Marathon cite AMR as saying that the aircraft transferred to the parent were worth $1.8 billion at the time, or about $400 million less than the debt AMR assumed. AMR said that American Eagle canceled some of the debt owing to the parent, so that it would be an even exchange without fraudulent transfers. Marathon's request for appointment of an examiner is on the bankruptcy court's Nov. 8 calendar. About AMR Corp 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 APPAREL: Amends Purchase Agreement With CEO and Chairman ----------------------------------------------------------------- American Apparel, Inc., and Dov Charney, the Company's Chairman, Chief Executive Officer and principal stockholder, entered into an amendment to the Purchase Agreement, dated as of April 27, 2011, between the Company and Mr. Charney. Subject to receipt of any required stockholder approval under the rules of the NYSE MKT, the amendment extends by one year the measurement periods for Mr. Charney's anti-dilution protection provisions and reduces the length of the corresponding stock price target periods from 60 days to 30 days. A copy of the Amendment is available at http://is.gd/nP8DJG Although it is ordinarily the Company's policy not to comment on trading activity in its common stock, in light of recent market activity, the Company confirms that it is unaware of any developments concerning the business of the Company that could account for the recent trading volatility or volume of the Company's common stock. About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. The Company reported a net loss of $39.31 million in 2011 and a net loss of $86.31 million in 2010. The Company's balance sheet at June 30, 2012, showed $326.72 million in total assets, $297.80 million in total liabilities, and $28.91 million in total stockholders' equity. AMPAL-AMERICAN: Receives Favorable NASDAQ Listing Determination --------------------------------------------------------------- Ampal-American Israel Corporation, a holding company with experience in acquiring interests in various businesses with emphasis in recent years on energy, chemical and related fields, disclosed that the NASDAQ Listing Qualifications Hearings Panel has determined to continue the listing of the Company's Class A Stock on The NASDAQ Capital Market, subject to the Company's timely satisfaction of certain milestones relating to the Company's debt restructuring efforts under the Company's Chapter 11 proceeding and the Company's compliance with the requirements for initial listing on The NASDAQ Capital Market upon its emergence from Chapter 11 bankruptcy, ultimately, by no later than Feb. 18, 2013. The NASDAQ Listing Qualifications Staff had previously issued (i) a delist determination letter on Aug. 21, 2012 based upon the rejection of the Company's plan for coming into compliance with the $2,500,000 minimum stockholders' equity listing requirement and (ii) a delist determination letter on Aug. 30, 2012 based upon the Chapter 11 filing, and the Company subsequently appealed the proposed delisting to the Panel. The Company's hearing before the Panel was held on Oct. 4, 2012. About Ampal-American Ampal-American Israel Corporation and its subsidiaries -- http://www.ampal.com/-- acquired interests primarily in businesses located in Israel or that are Israel-related. Ampal is seeking opportunistic situations in a variety of industries, with a focus on energy, chemicals and related sectors. Ampal's goal is to develop or acquire majority interests in businesses that are profitable and generate significant free cash flow that Ampal can control. Ampal-American filed a voluntary petition for Chapter 11 reorganization (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29, 2012. The Company is pursuing a plan to restructure the Company's Series A, Series B and Series C debentures. Bankruptcy Judge Stuart M. Bernstein presides over the case. Lawyers at Bryan Cave LLP, in New York, serves as counsel to the Debtor. As of June 30, 2012, the Company had US$542.3 million in total assets and US$775.2 million in total liabilities. The petition was signed by Irit Eluz, chief financial officer, senior vice president. ARCAPITA BANK: Court Adjourns Hearing on SP Financing to Oct. 25 ---------------------------------------------------------------- The hearing to consider Arcapita Bank B.S.C.(c), et al.'s motion for entry of an order authorizing the Debtors to enter into the Silver Point DIP facility, will resume on Oct. 25, 2012, at 2:00 p.m. The hearing had been earlier scheduled on Oct. 23, 2012, at 2:00 p.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. 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. ARDENT MEDICAL: Joint Venture No Impact on Moody's 'B2' CFR ----------------------------------------------------------- Moody's Investors Service commented that the announcement that Ardent Medical Services, Inc. had formed a joint venture with Baptist Community Services of Amarillo, Texas to operate BSA Health System is a credit positive but does not impact the B2 Corporate Family Rating. However, Moody's believes that the company will need to access the capital markets in order to complete the transaction, maintain its liquidity position and fund the considerable capital investments committed to as part of the agreement. The credit impact of any such financing transaction will be assessed at that time. The rating outlook is stable. The principal methodology used in rating Ardent was the Global Healthcare Service Providers 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. Ardent Medical Services, Inc. is a wholly owned subsidiary of AHS Medical Holdings LLC (collectively "Ardent"). Ardent, through its subsidiaries, operates eleven acute care hospitals and other healthcare facilities and three health plans in two states. The company recognized approximately $2.1 billion in revenue before the provision for doubtful accounts for the twelve months ended June 30, 2012. Ardent is a privately held company with a controlling interest in its outstanding shares held by Welsh, Carson, Anderson & Stowe (WCAS). ATP OIL: Martin Energy Joins Creditors Committee ------------------------------------------------ Judy A. Robbins, the U.S. Trustee for Region 7, has filed a third amended notice of the appointment of Official Committee of Unsecured Creditors in the Chapter 11 case of ATP Oil and Gas Corporation. Martin Energy Services, LLC, replaced Alpha Rental Tools, Inc., in the Committee. The Committee now comprises: 1. Michael L. Spolan, for Capital Ventures International c/o Heights Capital Management Inc. 101 California Street, Suite 3250 San Francisco, CA 94111 Tel: (415) 403-6500 Fax: (415) 403-6525 E-mail: michael.spolan@sig.com 2. Jason T. Meek, for Burnham Securities Inc. c/o KLR Group, 510 Madison Ave., 10th Floor New York, NY 10022 or 1001 Fannin Street, Suite 550 Houston, TX 77002 Tel: (713) 256-5261 Fax: (713) 654-9090 E-mail: jm@klrgroup.com 3. Susan Benoit, for Deep South Chemical, Inc. P.O. Box 80657 Lafayette, LA 70598 Tel: (337) 837-9931 E-mail: susanbenoit@deep-south-chemical.com 4. Paul Robinson, Evan Behrens or Tomas Johnson, for ERA Helicopters LLC 600 Airport Service Road Lake Charles, LA 70605 Tel: (954) 627-5206 (954) 292-0945(m) E-mail: probinson@ckor.com ebehrens@ckor.com tjohnson@erahelicopters.com 5. Scott McPherson, for Martin Energy Services, LLC Three Riverway, Suite 400 Houston, TX 77056 Tel: (713) 350=6861 (713) 350-2861 E-mail: smpherson@martinmlp.com 6. James (Jim) M. Sczudlo or Don Burell, for Schlumberger Technology Corporation 1325 S. Dairy Ashford Road Houston, TX 77077 Tel: (281) 785-1964 Fax: (281) 285-8715 Tel: (713) 828-2996(c) E-mail: sczudlo@slb.com dburell@slb.com 7. Linda Norvell, for M-I, LLC d/b/a M-I SWACO 5950 North Concourse Dr. Houston, TX 77072 Tel: (832) 295-2642 E-mail: lnorvell@miswaco.slb.com About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. Filings with the Bankruptcy Court and claims information are available at http://www.kccllc.net/atpog ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. BACK YARD BURGERS: To Close 20 Locations In Bankruptcy ------------------------------------------------------ Marie Beaudette at Dow Jones' DBR Small Cap reports that Tennessee restaurant chain Back Yard Burgers Inc. is planning to close 20 locations, nearly all of its company-owned locations, after filing for Chapter 11 bankruptcy protection last week. Back Yard Burgers has a chain of 90 quick-service restaurants in 16 states. The company operates and franchises quick-service restaurants in Memphis, Little Rock, Nashville and other markets. The company features gourmet hamburgers and chicken sandwiches, name-brand condiments and beverages as well as hand-dipped milkshakes, fresh-squeezed lemonade and fresh-baked cobblers. Back Yard Burgers Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12882) on Oct. 17, 2012. Attorneys at Greenberg Traurig serve as bankruptcy counsel. Saul Ewing LLP is the conflicts counsel. GA Keen Realty Advisors is the real estate advisor. Rust Consulting/Omni Bankruptcy is the claims and notice agent. Back Yard Burgers estimated up to $10 million in assets and at least $10 million in liabilities. BACK YARD BURGERS: Meeting to Form Creditors' Panel on Oct. 30 -------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on Oct. 30, 2012, at 10:00 am in the bankruptcy case of Back Yard Burgers Inc., et al. The meeting will be held at: J. Caleb Boggs Federal Building 844 N. King Street, Room 5209 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. About Back Yard Burgers Back Yard Burgers has a chain of 90 quick-service restaurants in 16 states. The company operates and franchises quick-service restaurants in Memphis, Little Rock, Nashville and other markets. The company features gourmet hamburgers and chicken sandwiches, name-brand condiments and beverages as well as hand-dipped milkshakes, fresh-squeezed lemonade and fresh-baked cobblers. Back Yard Burgers Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12882) on Oct. 17, 2012. Attorneys at Greenberg Traurig serve as bankruptcy counsel. Saul Ewing LLP is the conflicts counsel. GA Keen Realty Advisors is the real estate advisor. Rust Consulting/Omni Bankruptcy is the claims and notice agent. Back Yard Burgers estimated up to $10 million in assets and at least $10 million in liabilities. BERNARD L. MADOFF: UK High Court Ruling May Impact Picard Actions ----------------------------------------------------------------- Bloomberg News' Erik Larson in London reports that Britain's top court decided for the first time that U.S. bankruptcy rulings against debtor companies that don't appear in court to defend themselves can't be recognized in the U.K. According to Bloomberg, the U.K. Supreme Court ruled in London that allowing so-called default judgments from the U.S. and other countries to be recognized in Britain would be a "radical departure" from current law and detrimental to domestic business. Bloomberg says the U.K. Supreme Court case involves a $10 million default judgment in New York against Eurofinance SA, a bankrupt sales-promotion company based in the British Virgin Islands. A trustee for Eurofinance had sought to enforce a New York judgment in England, where the people associated with the company live. The ruling "benefits businesses or individuals in the U.K. who might otherwise be obliged to attend litigation proceedings in the U.S., or indeed anywhere else in the world, that arise in a bankruptcy," said Patrick Elliot, a lawyer with Brown Rudnick LLP in London, who represented Eurofinance. Setback for Madoff Trustee Bloomberg says the the ruling is a setback for Irving Picard, the trustee for jailed con man Bernard L. Madoff's firm. While he wasn't a party in the case, he filed court papers promoting the recognition of U.S. judgments in Britain as he seeks to enforce three New York rulings totaling $1.25 billion in courts in Gibraltar and the Cayman Islands, which are influenced by U.K. law. "This judgment will make large cross-border insolvencies more difficult," said Nick Herrod, a lawyer with Allen & Overy LLP in London, who isn't involved in the case, according to the Bloomberg report. "It's disappointing because it's pushing against the tide" of recent cases that were "building quite a bit of momentum." Bloomberg says Amanda Remus, a Picard spokeswoman, declined to comment. According to Bloomberg, all three of Mr. Picard's cases were adjourned to await the U.K. Supreme Court's ruling, according to the judgment. The Supreme Court said it didn't make any findings in relation to the Madoff cases, and the entities sued by Mr. Picard also filed court papers to make their arguments. BERRY PLASTICS: To Issue 21.6MM Shares Under Incentive Plans ------------------------------------------------------------ Berry Plastics Group, Inc., filed with the U.S. Securities and Exchange Commission a Form S-8 registering an aggregate of 21,636,587 shares of Berry Plastics Group, Inc., common stock, par value $0.01 per share, that may be offered pursuant to the Berry Plastics Group, Inc. 2006 Equity Incentive Plan or the Berry Plastics Group, Inc. 2012 Long-Term Incentive Plan. A copy of the filing is available for free at http://is.gd/K5DykY About Berry Plastics Berry Plastics Corporation manufactures and markets plastic packaging products, plastic film products, specialty adhesives and coated products. At Jan. 2, 2010, the Company had more than 80 production and manufacturing facilities, primarily located in the United States. Berry is a wholly-owned subsidiary of Berry Plastics Group, Inc. Berry Group is primarily owned by affiliates of Apollo Management, L.P. and Graham Partners. Berry, through its wholly owned subsidiaries operates five reporting segments: Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings and Specialty Films. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. On Dec. 3, 2009, Berry Plastics obtained control of 100% of the capital stock of Pliant upon Pliant's emergence from reorganization pursuant to a proceeding under Chapter 11 for a purchase price of $602.7 million. Pliant is a leading manufacturer of value-added films and flexible packaging for food, personal care, medical, agricultural and industrial applications. The acquired business is primarily operated in Berry's Specialty Films reporting segment. The Company's balance sheet at April 2, 2011, showed $5.54 billion in total assets, $5.34 billion in total liabilities, and $202 million in total stockholders' equity. * * * Berry Plastics has a 'B3' corporate family rating, with stable outlook, from Moody's Investors Service. Moody's said in April 2010 that Berry's B3 CFR reflects weakness in certain credit metrics, financial aggressiveness and acquisitiveness and a continued difficult operating and competitive environment especially in the flexible plastics and tapes segments. The rating also reflects the Company's exposure to more cyclical end markets, relatively weak contracts with customers and a high percentage of commodity products. In November 2011, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on Berry and its holding company parent, Berry Plastics Group Inc. "The ratings on Berry reflect the risks associated with the company's highly leveraged financial profile and acquisition- driven growth strategy as well as its fair business risk profile," said Standard & Poor's credit analyst Cynthia Werneth. BION ENVIRONMENTAL: Sends October Newsletter to Shareholders ------------------------------------------------------------ Bion Environmental Technologies, Inc., mailed a newsletter to its shareholders on Oct. 19, 2012, entitled 'Shareholder Newsletter October 2012'. The newsletter is designed to help keep shareholders informed of Bion's progress. Bion's biggest news came in August with the announcement that the Company's credit verification plan for Kreider Dairy had been approved by Pennsylvania's Department of Environmental Protection (PA DEP) and a full water quality management permit issued to replace the experimental permit. A copy of the newsletter which is available for free at http://is.gd/33fZco About Bion Environmental Bion Environmental Technologies Inc.'s patented and proprietary technology provides a comprehensive environmental solution to a significant source of pollution in US agriculture, large scale livestock facilities known as Confined Animal Feeding Operations. Bion's technology produces substantial reductions of nutrient releases (primarily nitrogen and phosphorus) to both water and air (including ammonia, which is subsequently re-deposited to the ground) from livestock waste streams based upon the Company's operations and research to date (and third party peer review). The Company reported a net loss applicable to the Company's common stockholders of $7.35 million on $0 of revenue for the year ended June 30, 2012, compared with a net loss applicable to the Company's common stockholders of $7.54 million on $0 of revenue for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $8.67 million in total assets, $9.41 million in total liabilities, $43,650 in Series B Redeemable Convertible Preferred Stock, and a $774,180 total deficit. GHP HORWATH, P.C., in Denver, Colorado, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended June 30, 2012. The independent auditors noted that the Company has not generated revenue and has suffered recurring losses from operations which raise substantial doubt about its ability to continue as a going concern. BRAND ENERGY: Moody's Affirms 'B3' CFR/PDR; Outlook Stable ---------------------------------------------------------- Moody's Investors Service affirmed the B3 corporate family rating and B3 probability of default rating of Brand Energy & Infrastructure Services, Inc. Moody's also affirmed the B2 ratings on Brand's first lien term loan due 2018 and revolver due 2017 as well as the Caa2 rating on the second lien bank credit facility. Moody's assigned B2 ratings to Brand's first lien term loan due 2016 as well the term loans to be issued by Brand's wholly-owned subsidiary, Aluma Systems Inc., as borrower. These actions result from Brand finalizing its debt capital structure, consisting of a $75 million revolving credit facility, a two tranche $775 million first lien term loan, and a $300 million second lien term loan. Moody's notes that a bilateral $50 million letter of credit facility (unrated) replaced the originally planned fully funded $50 million letter of credit facility. The B2 rating on the original letter of credit facility has been withdrawn. The rating outlook is stable. The following ratings/assessments were affected by this action: Brand Energy & Infrastructure Services, Inc.: Corporate Family Rating affirmed at B3; Probability of Default Rating affirmed at B3; $75.0 mil. 1st Lien Sr. Secured Revolving Credit Facility due 2017 affirmed at B2 (LGD3, 39%); $201.6 mil. 1st Lien Sr. Secured Term Loan due 2016 assigned B2 (LGD3, 39%); $423.4 mil. 1st Lien Sr. Secured Term Loan due 2018 affirmed at B2 (LGD3, 39%); and, $300.0 mil. 2nd Lien Sr. Secured Term Loan due 2019 affirmed at Caa2 (LGD5, 89%). Aluma Systems Inc. (guaranteed by Brand): $48.4 mil. 1st Lien Sr. Secured Term Loan due 2016 assigned B2 (LGD3, 39%); and, $101.6 mil. 1st Lien Sr. Secured Term Loan due 2018 assigned B2 (LGD3, 39%). Ratings Rationale Brand's B3 Corporate Family Rating remains constrained by its highly leveraged capital structure. Moody's anticipates that the company's debt-to-EBITDA will remain above 6.0 times, debt-to-book capitalization around 100%, and interest coverage defined as (EBITDA-CAPEX)-to-interest expense will be about 1.5 times (all ratios incorporate Moody's standard adjustments for operating leases) over the next 12 to 18 months. Nevertheless, the large amount of balance sheet debt to be serviced limits Brand's ability to generate meaningful levels of earnings and free cash flow. However, Moody's recognizes Brand's operational improvement and expansion across key end markets driven by increased customer spending and share gains. Moody's also anticipates the company should benefit from capital project wins in the refining and chemical end markets, the main drivers of Brand's revenues. The B2 rating assigned to the first lien senior secured bank credit facility, one notch above the corporate family rating, reflects its position as the most senior committed debt in Brand's capital structure. The bank credit facility is comprised of a $75 million revolving credit facility expiring in October 2017, and a $775 million term loan consisting of two tranches with different maturity dates. $250 million of the term loan will mature in October 2016 and $525 million matures in October 2018. Each tranche is secured by a first priority security interest in substantially all of the company's domestic and Canadian assets and amortizes 1% per year with a bullet payment at maturity. Aluma Systems Inc. ("Aluma"), Brand's major Canadian operating subsidiary, is a co-borrower of the first lien term loan. $150 million of the $775 million first lien term is allocated to Aluma on a pro rata basis for each tranche. Brand provides a downstream guaranty for Aluma's borrowings. Brand's significant domestic subsidiaries provide upstream guarantees only for domestic borrowings. The Caa2 assigned to the second lien term loan is two notches below the corporate family rating and reflects its position as the most junior debt in Brand's capital structure. It is secured by the same collateral as the first lien credit facilities, except on a second lien basis. Brand's significant domestic subsidiaries will provide upstream guarantees as well. There is no amortization, but a bullet payment due at maturity in October 2019. Positive rating actions could ensue if Brand demonstrates that its recent operational improvement is sustainable and that it can generate significant levels of operating earnings and free cash flow. Debt-to-EBITDA trending towards 5.5 times or (EBITDA-CAPEX)- to-interest expense sustained above 2.0 times (all ratios incorporate Moody's standard adjustments) could result in upwards ratings movement. Negative rating pressures could result from Brand's liquidity profile becoming constrained or its financial performance deteriorating such that debt-to-EBITDA nears 7.0 times or (EBITDA- CAPEX)-to-interest expense falls towards 1.0 times (all ratios incorporates Moody's standard adjustments). The principal methodology used in rating Brand 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. Brand Energy & Infrastructure Services, Inc., headquartered in Kennesaw, GA, is the largest multi-craft specialty services company in North America. It provides scaffolding, insulation, coatings and other services supporting the refining, chemical and power industries. First Reserve Corporation, through affiliated funds, is the majority owner of Brand. Revenues for the last 12 months through June 30, 2012 totaled about $1.6 billion. CAMARILLO PLAZA: Has Until Nov. 2 to File Chapter 11 Plan ----------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation granting Camarillo Plaza, LLC until Nov. 2, 2012, to file its Chapter 11 Plan and explanatory Disclosure Statement. Shopping center operator Camarillo Plaza LLC, based in Los Angeles, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-59637) on Dec. 5, 2011. Judge Sheri Bluebond was assigned to the case. At the Debtor's behest the next day, the case was transferred to the Northern Division (Bankr. C.D. Calif. Case No. 11-bk-15562). The case in the Los Angeles Division was closed, and Judge Robin Riblet took over from Judge Bluebond. The Debtor scheduled assets of $21,646,714 and liabilities of $12,286,585 as of the Chapter 11 filing. Janet A. Lawson, Esq., in Ventura County, California, serves as the Debtor's counsel. The petition was signed by Aaron Arnold Klein, managing partner. CAMBRIDGE HEART: Noteholders OK Deferral of Interest Payments ------------------------------------------------------------- Cambridge Heart, Inc., is a party to Subscription Agreements entered into by the Company and the subscribers, dated as of Jan. 17, 2012, Feb. 28, 2012, and May 23, 2012, pursuant to which the Company issued 8% secured convertible promissory notes, warrants to purchase shares of the common stock of the Company and additional investment rights. Under the terms of the Prior Subscription Agreements, the holders of at least 65% of each affected component of the securities issued pursuant to the Prior Subscription Agreements may consent to take or forebear from any action permitted under or in connection with the Prior Subscription Agreements or any other documents entered into pursuant to the Prior Subscription Agreements, modify any Prior Transaction Document or waive any default or requirement applicable to the Company or the subscribers under the Prior Transaction Documents. On July 31, 2012, the Company issued additional 8% secured convertible promissory notes in connection with the exercise by certain subscribers of additional investment rights. On Oct. 17, 2012, the holders of more than 65% of the outstanding principal balance of the Prior Notes consented to: (i) the deferral of the interest payments on the Prior Notes that would otherwise be due on Oct. 1, 2012, and Jan. 1, 2013, until the earlier to occur of (a) March 31, 2013, (b) the decision by the Company's board of directors that the Company has sufficient capital to pay the deferred interest, (c) the sale of the Company or (d) the bankruptcy of the Company; (ii) the issuance by the Company of up to $300,000 in additional debt that is senior to the Prior Notes in right of payment and with respect to proceeds; and (iii) agreed to execute those amendments to the Prior Transaction Documents as necessary to give effect to the foregoing. On Oct. 17, 2012, the Company issued and sold in a private placement secured promissory notes in the aggregate principal amount of $150,000 pursuant to the terms of a Subscription Agreement dated Oct. 17, 2012, between the Company and two current shareholders of the Company, including Roderick de Greef, the Chairman of the Board of the Company. The securities were offered and sold pursuant to an exemption from registration under Section 4(2) of the Securities Act of 1933, as amended. The New Notes will mature on March 31, 2013, and bear interest at the rate of 8% payable on the Maturity Date. The New Notes may be prepaid at any time without premium. The New Notes are secured by all of the assets of the Company. The Company is currently seeking an amendment to the Security Agreement between the Company and each of the Prior Note holders to permit the New Note holders to have the right to receive payments prior and in preference to the holders of the Prior Notes. As of Oct. 17, 2012, 100,112,960 shares of the Company's common stock were outstanding. On an as-converted basis, the Company has 124,659,416 shares of common stock issued and outstanding, including 100,112,960 shares of common stock issued, 4,180,602 shares issuable upon conversion of the Series C-1 Convertible Preferred Stock and 20,365,854 shares issuable upon conversion of the Series D Convertible Preferred Stock. About Cambridge Heart Tewksbury, Mass.-based Cambridge Heart, Inc., is engaged in the research, development and commercialization of products for the non-invasive diagnosis of cardiac disease. In its report on the financial statements for the year ended Dec. 31, 2011, McGladrey & Pullen, LLP, in Boston, Massachusetts, expressed substantial doubt about Cambridge Heart's ability to continue as a going concern. The independent auditors noted that of the Company's recurring losses, inability to generate positive cash flows from operations, and liquidity uncertainties from operations. The Company reported a net loss of $5.40 million in 2011, compared with a net loss of $5.17 million in 2010. The Company's balance sheet at June 30, 2012, showed $1.60 million in total assets, $4.89 million in total liabilities, $12.74 million in convertible preferred stock and a $16.04 million total stockholders' deficit. CHEROKEE SIMEON: Files for Chapter 11 in Delaware ------------------------------------------------- Cherokee Simeon Venture I, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Del. Case No. 12-12913) on Oct. 23, 2012, estimating at least $10 million in assets and liabilities. Zeneca Inc. has unliquidated and contingent claims of up to $25 million and $17.9 million on account of business debt, according to a court filing. Rafael Xavier Zahralddin-Aravena, Esq., at Elliott Greenleaf, in Wilmington, serves as counsel to the Debtor. CIRCUIT CITY STORES: Settles LCD Price-Fixing Claims With Chi Mei ----------------------------------------------------------------- Beth Winegarner at Bankruptcy Law360 reports that the liquidating trust for Circuit City stores on Monday reached a settlement with Chi Mei Electronics in antitrust multidistrict litigation over price-fixing in the market for LCD screens. Although the terms of the settlement were sealed, the damage claim is more than $10 million, according to court documents. The agreement only applies to LCD screens, and not other claims Circuit City's trust is pursuing against the Taiwanese electronics company, Bankruptcy Law360 relates citing a motion filed with the Virginia bankruptcy court Monday. About Circuit City Headquartered in Richmond, Virginia, Circuit City Stores Inc. (NYSE: CC) -- http://www.circuitcity.com/-- was a specialty retailer of consumer electronics, home office products, entertainment software and related services in the U.S. and Canada. Circuit City Stores together with 17 affiliates filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 08-35653) on Nov. 10, 2008. InterTAN Canada, Ltd., which runs Circuit City's Canadian operations, also sought protection under the Companies' Creditors Arrangement Act in Canada. Gregg M. Galardi, Esq., and Ian S. Fredericks, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, served as the Debtors' general restructuring counsel. Dion W. Hayes, Esq., and Douglas M. Foley, Esq., at McGuireWoods LLP, acted as the Debtors' local counsel. The Debtors also tapped Kirkland & Ellis LLP as special financing counsel; Wilmer, Cutler, Pickering, Hale and Dorr, LLP, as special securities counsel; and FTI Consulting, Inc., and Rotschild Inc. as financial advisors. The Debtors' Canadian general restructuring counsel was Osler, Hoskin & Harcourt LLP. Kurtzman Carson Consultants LLC served as the Debtors' claims and voting agent. The Debtors disclosed total assets of $3,400,080,000 and debts of $2,323,328,000 as of Aug. 31, 2008. Circuit City opted to liquidate its 721 stores and obtained the Bankruptcy Court's approval to pursue going-out-of-business sales, and sell its store leases in January 2009. In May 2009, Systemax Inc., a multi-channel retailer of computers, electronics, and industrial products, acquired certain assets, including the name Circuit City, from the Debtors through a Court- approved auction. On Sept. 14, 2010, the Court entered an order confirming the Debtors' Plan of Liquidation, which created the Circuit City Stores, Inc. Liquidating Trust and appointed Alfred H. Siegel as Trustee. The Plan became effective Nov. 1, 2010. CIRCUS & ELDORADO: Wins Confirmation of Reorganization Plan ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Circus & Eldorado Joint Venture, the operator of the Silver Legacy Resort Casino in Reno, Nevada, can exit bankruptcy protection after a judge signed a confirmation order Oct. 23 approving a Chapter 11 reorganization plan. According to the report, confirmation without a fight was made possible when the casino's owners reached a settlement this month with noteholder Black Diamond Capital Management LLC. Negotiated before the Chapter 11 filing in May with some of the noteholders, the plan restructures $142.8 million in 10.125% senior secured notes that matured March 1. The casino is a joint venture between MGM Resorts International and Eldorado Resorts LLC. The report relates that with Black Diamond in opposition, the noteholder class originally voted down the plan. A spate of litigation ensued between the casino and Black Diamond. The report notes that ultimately, both sides dropped most claims, except Black Diamond agreed to pay the casino $325,000 for legal expenses incurred in the effort to knock out Black Diamond's opposition vote. With noteholders voting for the plan, it gives them about $92.8 million in cash along with a new second-lien note for $27.5 million, for a predicted 88.8% recovery, according to the disclosure statement. Prior to the petition date, the Debtors entered into a Restructuring Support Agreement with Capital Research and Management Company, a holder of a substantial portion of the mortgage notes. A copy of the RSA dated March 15, 2012, is available for free at http://is.gd/diDPh3 The RSA contemplated the filing of a plan no later than June 1, 2012. The Bloomberg report discloses that under the confirmed plan, unsecured creditors are being paid in full on about $5 million in claims. The owners are making new capital contributions. The notes traded on Oct. 17 for 86 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About Circus and Eldorado Circus and Eldorado Joint Venture and Silver Legacy Capital Corp. filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case Nos. 12-51156 and 12-51157) on May 17, 2012. Circus and Eldorado Joint Venture owns and operates the Silver Legacy Resort Casino, a 19th century silver mining themed hotel, casino and entertainment complex located in downtown Reno, Nevada. The casino and entertainment areas at Silver Legacy are connected by skyway corridors to the neighboring Eldorado Hotel & Casino and the Circus Circus Hotel and Casino, each of which are owned by affiliates of the Debtors. Together, the three properties comprise the heart of the Reno market's prime gaming area and room base. Silver Legacy Capital is a wholly owned subsidiary of the Joint Venture and was created and exists for the sole purpose of serving as a co-issuer of the mortgage notes due 2012. SLCC has no operations, assets or revenues. Eldorado Hotel & Casino and Circus Circus Hotel and Casino are not debtors in the Chapter 11 cases. The Company did not make the required principal payment of its 10.125% mortgage notes on the maturity date of March 1, 2012. The company also elected not to make the scheduled interest payment. As a result, an aggregate of $142.8 million principal amount of Notes were outstanding and accrued interest of $7.23 million on the Notes, as of March 1, 2012, was due and payable. Judge Bruce T. Beesley presides over the Chapter 11 case. Paul S. Aronzon, Esq., and Thomas P. Kreller, Esq., at Milbank, Tweed, Hadley & McCloy LLP; and Sallie B. Armstrong, Esq., at Downey Brand LLP, serve as the Debtors' counsel. The Debtors' financial advisor is FTI Consulting Inc. The claims agent is Kurtzman Carson Consultants LLC. The Bank of New York Mellon Trust Company, N.A., the trustee for the Debtors' 10-1/8% Mortgage Notes due 2012, is represented by Craig A. Barbarosh, Esq., and Karen B. Dine, Esq., at Pillsbury Winthrop Shaw Pittman LLP. Circus and Eldorado Joint Venture disclosed $264,649,800 in assets and $158,753,490 in liabilities as of the Chapter 11 filing. The petitions were signed by Stephanie D. Lepori, chief financial officer. August B. Landis, the Acting U.S. Trustee for Region 17, appointed three creditors to serve in the Official Committee of Unsecured Creditors in the Debtors' Chapter 11 cases. Stutman, Treister & Glatt Professional Corporation represents the Committee. CLEARWIRE CORP: Comcast Holds 12.8% of Class A Shares ----------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Comcast Corporation and Comcast Wireless Investment, LLC, disclosed that, as of Oct. 17, 2012, they beneficially own 88,504,132 shares of Class A common stock of Clearwire Corporation representing 12.8% of the shares outstanding. A copy of the filing is available for free at http://is.gd/3rfhWA About Clearwire Corporation Kirkland, Wash.-based Clearwire Corporation (NASDAQ: CLWR) -- http://www.clearwire.com/-- through its operating subsidiaries, is a provider of 4G mobile broadband network services in 68 markets, including New York City, Los Angeles, Chicago, Dallas, Philadelphia, Houston, Miami, Washington, D.C., Atlanta and Boston. The Company reported a net loss attributable to the Company of $717.33 million in 2011, a net loss attributable to the Company of $487.43 million in 2010, and a net loss attributable to the Company of $325.58 million in 2009. The Company's balance sheet at June 30, 2012, showed $8.43 billion in total assets, $5.65 billion in total liabilities, and $2.78 billion in total stockholders' equity. * * * As reported by the TCR on Nov. 25, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured first- lien issue-level ratings on Bellevue, Wash.-based wireless provider Clearwire Corp. to 'CCC' from 'CCC+'. The ratings on Clearwire continue to reflect its "highly leveraged" financial risk profile based on its high debt burden and "weak" liquidity (both terms as defined in S&P's criteria). "The ratings also reflect our view that Clearwire has a vulnerable business position as a developmental-stage company with significant competition from better capitalized wireless carriers, including AT&T Mobility and Verizon Wireless, which are deploying their own 4G wireless services," S&P said in January 2012. "We believe that the company would likely run out of cash in the late 2012 to early 2013 time frame absent significant asset sales, since we view the terms in the December 2011 wholesale agreement with Sprint Nextel as unfavorable in the near term and will likely constrain cash inflows in 2012 to 2013. We have not assumed spectrum sales in our liquidity assessment because of the uncertainty involved in finding a buyer, as well as timing. However, if the company could secure sufficient funding for operations through 2013, we could raise the ratings," S&P also stated. COMARCO INC: Seven Directors Elected to Board --------------------------------------------- The 2012 annual meeting of shareholders of Comarco, Inc., was held on Oct. 18, 2012. At that Meeting, the Company's shareholders voted to elect Paul Borowiec, Wayne G. Cadwallader, Thomas W. Lanni, Richard T. LeBuhn, Michael R. Levin, Michael H. Mulroy and Louis E. Silverman to serve until the 2013 Annual Meeting of Shareholders and until their successors are elected. The shareholders also ratification of the appointment of Squar, Milner, Peterson, Miranda & Williamson LLP as the Company's independent registered public accounting firm for the fiscal year ending Jan. 31, 2013. About Comarco Inc. Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO) -- http://www.comarco.com/-- is a provider of innovative, patented mobile power solutions that can be used to power and charge notebook computers, mobile phones, and many other rechargeable mobile devices with a single device. Comarco reported a net loss of $5.31 million for the year ended Jan. 31, 2012, compared with a net loss of $5.97 million during the prior year. The Company's balance sheet at July 31, 2012, showed $5.23 million in total assets, $7.05 million in total liabilities and a $1.82 million total stockholders' deficit. After auditing the fiscal 2012 financial results, Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative cashflow from operations, has had declining working capital and uncertainties surrounding the Company's ability to raise additional funds. CRYOPORT INC: To Issue Add'l 3MM Shares Under 2011 Incentive Plan ----------------------------------------------------------------- CryoPort, Inc., filed with the U.S. Securities and Exchange Commission a Form S-8 relating to the registration of 3,000,000 shares of its common stock, par value $0.001 per Share, issuable to eligible employees and directors of the Company under the CryoPort, Inc., 2011 Stock Incentive Plan, which is in addition to the 2,300,000 shares of Common Stock registered on the Company's Form S-8 filed on Oct. 4, 2011. A copy of the Form S-8 prospectus is available for free at http://is.gd/ixy6j9 About CryoPort Inc. Headquartered in Lake Forest, Calif., CryoPort, Inc. (OTC BB: CYRXD) -- http://www.cryoport.com/-- provides innovative cold chain frozen shipping system dedicated to providing superior, affordable cryogenic shipping solutions that ensure the safety, status and temperature of high value, temperature sensitive materials. The Company has developed a line of cost-effective reusable cryogenic transport containers capable of transporting biological, environmental and other temperature sensitive materials at temperatures below 0-degree Celsius. The Company reported a net loss of $7.83 million for the year ended March 31, 2012, compared with a net loss of $6.15 million during the prior fiscal year. The Company's balance sheet at June 30, 2012, showed $4.23 million in total assets, $1.96 million in total liabilities and $2.26 million in total stockholders' equity. KMJ Corbin & Company LLP, in Costa Mesa, California, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended March 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and has had negative cash flows from operations since inception. Although the Company has working capital of $4,024,120 and cash & cash equivalents of $4,617,535 at March 31, 2012, management has estimated that cash on hand, which include proceeds from the offering received in the fourth quarter of fiscal 2012, will only be sufficient to allow the Company to continue its operations only into the fourth quarter of fiscal 2013. These matters raise substantial doubt about the Company's ability to continue as a going concern. DCB FINANCIAL: Posts $306,000 Net Income in Third Quarter --------------------------------------------------------- DCB Financial Corp. reported net income of $306,000 on $4.57 million of total interest income for the three months ended Sept. 30, 2012, compared with net income of $276,000 on $5.59 million of total interest income for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $494.17 million in total assets, $458.44 million in total liabilities and $35.73 million in total stockholders' equity. "This is our third consecutive quarter of generating positive earnings," noted Ronald J. Seiffert, president and chief executive officer. "I am very encouraged about our future because we have made significant improvements in our loan quality and our earnings have become more consistent." A copy of the press release is available for free at: http://is.gd/ec7qHi About DCB Financial DCB Financial Corp. is a financial holding company headquartered in Lewis Center, Ohio. The Corporation has one wholly-owned subsidiary bank, The Delaware County Bank and Trust Company (the "Bank"). The Corporation also has two additional wholly owned subsidiaries, DCB Title and DCB Insurance Services LLC. DCB Title provides standard real estate title services, while DCB Insurance Services LLC provides a variety of insurance products. However, neither nonbank subsidiary is material to the financial results of the Corporation. The Bank has one wholly-owned subsidiary, ORECO, which is used to process other real estate owned. The Corporation was incorporated under the laws of the State of Ohio in 1997, as a financial holding company under the Bank Holding Company Act of 1956, as amended, by acquiring all outstanding shares of the Bank. The Corporation acquired all such shares of the Bank after an interim bank merger, consummated on March 14, 1997. The Bank is a commercial bank, chartered under the laws of the State of Ohio, and was organized in 1950. The Bank provides customary retail and commercial banking services to its customers, including checking and savings accounts, time deposits, IRAs, safe deposit facilities, personal loans, commercial loans, real estate mortgage loans, installment loans, trust and other wealth management services. The Bank also provides cash management, bond registrar and paying agent services for commercial and public unit entities. Through its subsidiary Datatasx, the Bank provided data processing and other bank operational services to other financial institutions. Those services were discontinued in September 2011, and were not a significant part of operations or revenue. In October 2010, the Corporation's wholly-owned bank subsidiary entered into a Consent Agreement with the FDIC which requires that Tier-1 and Total Risk Based Capital percentages reach 9.0% and 13.0% respectively. As of March 31, 2012, the Bank's capital ratios, as previously noted, were not at these levels. The Corporation and its subsidiaries meet all published regulatory capital requirements. The ratio of total capital to risk-weighted assets was 10.3% at March 31, 2012, while the Tier 1 risk-based capital ratio was 6.7%. As reported in the TCR on April 5, 2012, Plante & Moran PLLC, in Columbus, Ohio, said DCB's bank subsidiary is not in compliance with revised minimum regulatory capital requirements under a formal regulatory agreement with the banking regulators. "Failure to comply with the regulatory agreement may result in additional regulatory enforcement actions." DESERT HAWK: Gets $100,000 Loan from DMRJ Group Despite Default --------------------------------------------------------------- Desert Hawk Gold Corp. entered into a Fifth Amendment to its Investment Agreement with DMRJ Group I, LLC, which further amended the Investment Agreement, dated as of July 14, 2010, pursuant to which, among other things, DMRJ Group has made available to the Company a senior secured term loan credit facility of up to $6,500,000. The Fifth Amendment allows the Company to make a further request for term loan advances under the Investment Agreement of up to $100,000. These proceeds may be used by the Company for working capital and ordinary general corporate purposes. The maturity date of this and all prior advances is now set at Dec. 15, 2012. All prior advances and the advances permitted under this Fifth Amendment will bear interest at a rate of 2% per month. As of Oct. 16, 2012, the total payments owed by the Company under the Investment Agreement are $5,865,492. On June 29, 2012, the Company and the Investor entered into a Forbearance Agreement pursuant to which DMRJ agreed to forbear for a limited period of time from exercising its rights and remedies with respect to an event of default by virtue of the Company's failure to make a mandatory prepayment as required under the Investment Agreement. On July 31, 2012, the conditions set forth in the forbearance agreement were not satisfied and the Forbearance Period expired. A copy of the Fifth Amendment is available for free at: http://is.gd/OavBX2 About Desert Hawk Desert Hawk Gold Corp., an exploration stage company, engages in the acquisition and exploration of mineral properties. The company has interests in 334 unpatented claims, including the unpatented mill site claim, 42 patented claims, and 5 Utah state mineral leases located on state trust lands covering approximately 33 square miles in the Gold Hill Mining District in Tooele County, Utah. It also holds eight unpatented mining claims in Yavapai County, Arizona. The company was formerly known as Lucky Joe Mining Company and changed its name to Desert Hawk Gold Corp. in April 2009. Desert Hawk Gold Corp. was incorporated in 1957 and is based in Spokane, Washington. Desert Hawk reported a net loss of $4.77 million in 2011, following a net loss of $2.85 million in 2010. Desert Hawk reported a net loss of $1.44 million for the three months ended June 30, 2012, compared with a net loss of $2.56 million for the same period during the prior year. The Company's balance sheet at June 30, 2012, showed $1.45 million in total assets, $6.60 million in total liabilities and a $5.15 million total stockhodlers' deficit. DeCoria, Maichel & Teague, PS, in Spokane, Washington, issued a "going concern" qualification on the consolited financial statements for the hear ended Dec. 31, 2011. The independent auditors noted that the Company has an accumulated deficit through Dec. 31, 2011, which raises substantial doubt about its ability to continue as a going concern. DEVI LLC: Alabama Marriot Courtyard Hotel in Chapter 11 ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the owner of a Marriott Courtyard hotel in Oxford, Alabama, filed a petition for Chapter 11 protection. Devi, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-41973) on Oct. 16, 2012, in Anniston, Alabama. The Debtor disclosed assets of $8.4 million and liabilities of $11.4 million in its schedules, almost all representing secured debt. Branch Banking & Trust Co. is owed more than $7.2 million, the mortgage lender said in a court filing. The hotel is worth less than the debt, the bank said. DEWEY & LEBOEUF: Former LeBoeuf Lamb Partners Appeal Settlement --------------------------------------------------------------- The Ad Hoc Committee of Retired Partners of LeBoeuf, Lamb, Leiby & MacRae appeals under 28 U.S.C. Section 158(a) and (b) and Rule 8001 of the Federal Rules of Bankruptcy Procedure, from the Oct. 9, 2012 Memorandum Opinion and Order, entered by the Honorable Martin Glenn United States Bankruptcy Judge, granting Dewey & LeBoeuf LLP's Motion for an Order Approving Partner Contribution Settlement Agreements and Mutual Releases for Participating Partners and denying Ad Hoc Committee of Retired Partners of LeBoeuf, Lamb, Leiby & MacRae's Motion to Appoint an Examiner. As reported in the TCR on Oct. 10, 2012, the Bankruptcy Court approved Dewey & LeBoeuf's partner contribution settlement agreements and mutual releases for certain participating partners. Under the PCPs, 400 of Dewey's roughly 670 ex-partners agreed to participate and have committed roughly $71 million in aggregate settlement payments, constituting roughly 80% of the aggregate of all partner contribution amounts sought from former partners. The Court also denied the request by the Ad Hoc Committee of Retired Partners of LeBoeuf, Lamb, Leiby & MacRae to appoint an examiner. About Dewey & LeBoeuf 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 LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. 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: Wants Stay Modified to Allow Setoff With GEAM -------------------------------------------------------------- Dewey & LeBoeuf LLP will present for signature of United States Bankruptcy Judge Martin Glenn on Nov. 5, 2012, at 12:00 p.m. the proposed Stipulation and Agreed Order Between the Debtor and GE Asset Management Incorporated Granting Relief to Set Off Mutual Prepetition Claims and Granting Related Relief. Responses or objections, if any, to the entry of the Proposed Order are due no later than 4:00 p.m. on Nov. 2, 2012. As of the Petition Date, the Debtor owed GEAM the sum of $362,171. As of the Petition Date, GEAM owed the Debtor the sum of $686,025 for legal services rendered by the Debtor, as billed to GEAM under client number 070200. The Parties stipulate and agree, subject only to Bankruptcy Court approval: 1. As of the date that this Stipulation is approved by the Bankruptcy Court, pursuant to Section 362(d)(1) of the Bankruptcy Code, the automatic stay under Section 362(a) of the Bankruptcy Code will be modified to the extent necessary to effectuate the Setoff. 2. Within 10 calendar days following the Effective Date, GEAM will effectuate the Setoff and pay the Remaining GEAM Obligation of $323,854 to the account specified in writing by the Debtor. 3. Upon exercise of the Setoff on the Setoff and Payment Date, and subject to the releases set forth in paragraph 4 below, the Prepetition GEAM Claim will be deemed satisfied in full. GEAM, on behalf of itself and its predecessors, successors, assigns, trustees, fiduciaries, estates, attorneys, insurers, representatives and other agents, waives and releases any and all claims or other rights regarding the Prepetition GEAM Claim against the Debtor, which waiver and release will be effective as of the Setoff and Payment Date. 4. The Debtor, on behalf of itself and its predecessors, successors, affiliates, assigns, trustees, fiduciaries, estates, attorneys, insurers, representatives and other agents, waives and releases any and all claims or other rights regarding the Prepetition GEAM Obligation against GEAM, any "GE" entities and any other affiliates of GEAM, which waivers and releases will be effective upon exercise of the Setoff and payment of the Remaining GEAM Obligation by GEAM on the Setoff and Payment Date. For the avoidance of doubt, the Debtor does not waive or release any other "GE" entities for any claims (other than the Prepetition GEAM Obligation) the Debtor may have against such other "GE" entities, including but not limited to GE Capital, GE Energy Finance, GE Energy Financial Services, Inc. GE Energy LLC, GE Transportation, General Electric Capital Corporation, General Electric Company and General Electric International. About Dewey & LeBoeuf 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 LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. 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: US Trustee Fights Bid to Disband Ex-Partner Panel ------------------------------------------------------------------ Tracy Hope Davis, the United States Trustee for Region 2, objects to Dewey & LeBoeuf LLP's motion for an order directing the U.S. Trustee to disband the Official Committee of Former Partners. The U.S. Trustee said that the Debtor fails to identify a statutory basis for its request to disband the Former Partners Committee. "While Section 1102 sets forth the Court's statutory role in the appointment and modification of committees in order to ensure adequate representation of creditors or equity security holders, nowhere does the express language of the statute or the applicable legislative history expressly empower the Court to disband a committee appointed by the United States Trustee. The Debtor misinterprets Section 1102 and confuses the standard used to determine whether the Court should direct the United States Trustee to appoint an additional committee to ensure adequate representation with whether the Court may order the United States Trustee to disband a committee appointed by the United States Trustee. The Debtor compounds its legal error with a temporal factual one by challenging the United States Trustee's appointment of the Former Partners Committee, in part, on the alleged conduct of certain members of the Former Partners Committee after its appointment. As reported in the TCR on Oct. 15, 2012, Dewey & LeBoeuf asked the U.S. Bankruptcy Court for the Southern District of New York to enter an order directing the U.S. Trustee to disband the official committee of former partners appointed in the Debtor's Chapter 11 case because a second official committee is not necessary. The Debtor said, among others, that it is highly unlikely that the constituency this official committee is supposed to represent has any legitimate financial stake in this bankruptcy case, and are "out of the money." The Debtor added that the only cognizable economic interest this committee appears to have is avoiding liability for some sub-set of its constituents as putative "claw back" defendants in actions that will likely be brought in the future. "Even if the Debtor's former partners are general unsecured claimants to be paid pari passu with the rest of the unsecured creditors, the Official Creditors Committee has been adequately representing the interests of the FPC's constituency and the U.S. Trustee has already made clear that the FPC is not to represent the interests of Former Partners as general unsecured creditors." About Dewey & LeBoeuf 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 LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. 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. DIGITAL DOMAIN: Post-Sale Bonuses Approved by Court --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Digital Domain Media Group Inc. received court sanction for a $350,000 incentive bonus program when the U.S. bankruptcy judge in Delaware signed an approval order on Oct. 22. According to the report, the company modified the bonus program in response to objections from the U.S. Trustee and representatives of former workers who weren't given requisite notification before mass firings. The changes aren't public information because they were filed under seal. The company originally sought authorization to pay bonuses so long as the business was sold for a price that was no less than the amount contained in a contract signed before the Chapter 11 filing on Sept. 11. The sale was approved by the judge on Sept. 25 and completed two days later. About Digital Domain Port St. Lucie, Florida-based Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/-- engaged 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, 2012, to sell its business for $15 million to Searchlight Capital Partners LP, subject to higher and better offers. At the auction on Sept. 21, the principal part of the business was purchased by a joint venture between Galloping Horse America LLC, an affiliate of Beijing Galloping Horse Co., and an affiliate of Reliance Capital Ltd., based in Mumbai. The $36.7 million total value of the contact includes $3.6 million to cure defaults on contracts and $2.9 million in reimbursement of payroll costs. The opening bid at auction on Sept. 21 was $15 million. 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. The Debtors also have sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. DIGITAL DOMAIN: Makes Peace Over West Palm Beach Site ----------------------------------------------------- Peg Brickley at Dow Jones' DBR Small Cap reports that the city of West Palm Beach, Fla., is reclaiming a parcel of land in the heart of its downtown area from Digital Domain Media Group Inc., the special-effects company that went broke while getting an animated film production and education business off the ground in Florida. About Digital Domain Port St. Lucie, Florida-based Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/-- engaged 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, 2012, to sell its business for $15 million to Searchlight Capital Partners LP, subject to higher and better offers. At the auction on Sept. 21, the principal part of the business was purchased by a joint venture between Galloping Horse America LLC, an affiliate of Beijing Galloping Horse Co., and an affiliate of Reliance Capital Ltd., based in Mumbai. The $36.7 million total value of the contact includes $3.6 million to cure defaults on contracts and $2.9 million in reimbursement of payroll costs. 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. The Debtors also have sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. DTE ENERGY: Moody's Raises Rating on Sr. Secured Bonds to 'Ba2' --------------------------------------------------------------- Moody's Investors service has upgraded the rating of DTE Energy Center, LLC's (DTEEC), approximately $200 million of senior secured bonds ($244 million original issue) due 2024 to Ba2 from Ba3 and revised the outlook for DTEEC to positive from stable. Ratings Rationale The rating action recognizes the continued improvement in the financial and operational performance of Chrysler Group LLC (Chrysler: B2 CFR, Ba2 senior secured, positive), DTEEC's only customer and sole source of revenues. The recommendation also reflects the consistent, stable and predictable financial performance demonstrated by DTEEC before, during and after the Chrysler restructuring which illustrates the essential nature of the production support systems and services that DTEEC provides to Chrysler as well as the resiliency of its contractual arrangements. The Ba2 rating considers that as an operating expense, Chrysler's payments under its service agreements are generally made prior to payment of Chrysler's own debt service obligations. The Ba2 rating further recognizes that Chrysler's obligations under its service agreements with DTEEC remain guaranteed by Daimler North America Corporation (DNAC), the North American subsidiary of Daimler AG (Daimler: A3, senior unsecured); however the impact of this guarantee on the rating is muted by its indirect nature and recognition of the fact that Daimler no longer has an economic interest in Chrysler. Throughout the economic downturn of 2008-2009, which ultimately led to severe financial stress and the restructuring of Chrysler, as well as during Chrysler's more recent recovery, DTEEC's financial condition remained stable with debt service coverage ratios consistently in the range of 1.60 times. This stability is the result of contractual arrangements that insulate DTEEC from factors outside of its control, namely, the state of the economy and its impact on automobile production levels. That said, Moody's also views the strengthening credit profile of Chrysler as supportive of DTEEC. As noted in Moody's September 28, 2012 Chrysler Credit Opinion, Chrysler has made notable operational and financial progress during the past two years as evidenced by growth in US and Canadian market share, continued product renewals, improvement in vehicle quality and competitiveness, and strengthening credit metrics. The outlook for DTEEC is positive, consistent with the positive outlook for Chrysler and an assumption of continued solid operating performance and contractual protections. In the event Chrysler's ratings were to be upgraded, DTEEC's rating would also likely be upgraded. The positive outlook acknowledges that Chrysler has currently idled one of the production facilities serviced by DTEEC. Although it is not clear at this point if or when the plant may ultimately be returned to service, the positive outlook assumes payments to DTEEC will continue to be made in accordance with its contract therefore mitigating any impact to DTEEC. Headquartered in Ann Arbor, MI, DTEEC is owned 50% by subsidiaries of DTE Energy Company (DTE: Baa2 senior unsecured, positive) and 50% by Sterling Energy Holdings Inc., a joint venture of The Goldman Sachs Group, Inc. and Commerzbank AG. DTEEC is a special purpose company created to own and operate various utility-related assets (Utility Assets) used in certain manufacturing processes of Chrysler Group LLC, (Chrysler: B2 CFR, Ba2 senior secured, positive - (successor to Chrysler LLC). The assets are located within eight of Chrysler's manufacturing facilities in the Midwest and provide critical support services for vehicle, part, and component manufacturing operations. The principal methodology used in this rating was Generic Project Finance Methodology published in December 2010. ELPIDA MEMORY: Wants to Incur $190-Mil. Shinseigin Financing ------------------------------------------------------------ Yukio Sakamoto and Nobuaki Kobayashi, as foreign representatives of Elpida Memory, Inc., a Japanese company that is the subject of reorganization proceedings under Japanese law pending before the Tokyo District Court, Eighth Civil Division, ask the U.S. Bankruptcy Court for the District of Delaware to approve various security agreements with DIP lender Shinseigin Finance Co., Ltd. A hearing on Oct. 24, 2012, at 2 p.m. has been set. According to the foreign representatives, the facility agreement between Elpida and the DIP Lender provides that the DIP lender agreed to provide Elpida with financing through Dec. 28, 2012, and up to a maximum commitment amount of JPY15,000,000,000. To collateralize the DIP facility, Elpida and certain of its subsidiaries, including, but not limited to Elpida Memory (USA), Inc., Elpida's subsidiary based in the United States, entered into separate security agreements and related agreements, each with respect to the respective assets of Elpida and its subsidiaries. Elpida needed the DIP Facility in order to continue business operations during the Japan Proceeding and to maximize value for its creditors. The terms of the facility agreement include: Effective Date: April 27, 2012 Maximum Commitment Amount: JPY15,000,000,000 (equivalent to $190 million) Amount Outstanding: JPY8,000,000,000 (equivalent to $102 million) Maturity Date: Dec. 28, 2012 Use of Proceeds: The proceeds of each borrowing will be used for operating capital. Interest Rate: 9.45% per annum (subject to adjustment) Arrangement Fee: JPY52,500,000 (equivalent to $650,000 Governing Law: Japan A copy of the terms of financing is available for free at http://bankrupt.com/misc/ELPIDAMEMORY_financing.pdf About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. After semiconductor prices plunged, Japan's largest maker of DRAM chips filed for bankruptcy in February with liabilities of 448 billion yen ($5.6 billion) after losing money for five quarters. Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed for corporate reorganization proceedings in Tokyo District Court on Feb. 27, 2012. The Tokyo District Court immediately rendered a temporary restraining order to restrain creditors from demanding repayment of debt or exercising their rights with respect to the company's assets absent prior court order. Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo Court as Supervisor and Examiner in the case. Elpida Memory Inc. sought the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Yuko Sakamoto, as foreign representative, filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10947) for Elpida on March 19, 2012. EP ENERGY: Moody's Rates $300-Mil. Second Lien Term Loan 'Ba3' -------------------------------------------------------------- Moody's assigned a Ba3 rating to the proposed $300 million second lien term loan B add-on for EP Energy LLC. The Corporate Family Rating (CFR) of Ba3 and senior note rating of B2 remain unchanged. The outlook is stable. The proceeds of the new term loan will be used to reduce the debt outstanding under the company's senior secured credit facility and for general corporate purposes. "The new term loan B add-on has a relatively minor impact on the credit profile of EP Energy," said Stuart Miller, Moody's Senior Credit Officer. "The term loan provides additional liquidity, but it also allows the company to increase its leverage against the same asset base. Operationally, the company is making progress in its transition from natural gas to oil with more than 90% of its 2012 capital budget earmarked for oil-focused projects." Ratings Rationale EP Energy is a large and relatively diversified, independent oil and gas exploration & production (E&P) company. The company is currently producing about 145,000 Boe per day ranking it as one of the largest non-investment grade E&P companies Moody's rates. While historically natural gas focused, the company is migrating towards more exposure to oil and liquids-rich natural gas production. As of June 30, 2012 , approximately 20% of EP Energy's production was liquids-oriented and this percentage is projected to double over the next three to five years. The higher share of liquids production will create a more balanced cash flow stream and reduce the exposure to the natural gas market which is expected to remain depressed for the next few years. An aggressive natural gas hedging strategy provides short term protection against low natural gas prices as the transition to oil is implemented. Offsetting its large scale, EP Energy's balance sheet is highly leveraged. As of September 30, 2012, debt to average daily production was nearly $29,000 per Boe. This leverage level is more typical of single B rated companies. Over time, Moody's believes these ratios will improve modestly if the company focuses on the development of its existing acreage positions, including the prolific Eagle Ford Shale, without incurring large amounts of new debt. The Ba3 senior secured second lien rating reflects both the overall probability of default of EP Energy, to which Moody's assigns a PDR of Ba3, and a loss given default of LGD3-42%. The second lien debt is rated at the CFR level as the company's first lien revolving credit facility limits the amount of uplift that is created by EP Energy's lower-priority senior unsecured notes. These results are derived using Moody's Loss Given Default Methodology. EP Energy has adequate liquidity. The company is expected to generate modest amounts of negative free cash flow over the next 12 to 18 months which can be financed by borrowings under the company's $2 billion senior secured revolving credit facility. Availability under the revolving credit facility is governed by a borrowing base which is set at approximately $1.8 billion pro forma for the proposed term loan B add-on. The revolving credit matures in 2017 and has a debt to EBITDAX covenant that becomes effective in the third quarter of 2012. Moody's projects that EP Energy will pass this covenant by a wide margin allowing for full use of the revolving credit facility. Alternate liquidity is limited as 80% of EP Energy's assets are mortgaged under the credit facility. Moody's has a stable outlook for EP Energy. However, should the ratio of debt to average daily production exceed $35,000 per Boe and appear poised to remain at that level, a downgrade will be considered. Alternatively, if leverage drops below $25,000 per Boe, it may suggest a change to a more conservative financial profile which could support an upgrade. The principal methodology used in rating EP Energy was the Global Independent Exploration and Production 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. EP Energy LLC is the acquisition vehicle formed by Apollo Global Management LLC, Riverstone Holdings LLC, Access Industries Inc., Korea National Oil Company, and other investors to acquire all of El Paso Corporation's oil and gas exploration & production assets. EP Energy is an independent exploration & production company based in Houston, Texas. EP ENERGY: S&P Gives 'B+' Rating on $300MM Term Loan Due 2019 ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its issue-level rating on EP Energy LLC's secured debt to 'B+' from 'BB-'. "We revised the recovery rating on this debt to '5', indicating our expectation for modest recovery (10% to 30%) to secured creditors in the event of a payment default, from '4'. At the same time, we assigned a 'B+' issue-level rating and a '5' recovery rating to the company's proposed $300 million term loan due 2019," S&P said. "The rating action reflects a lower PV10 value of the company's proven reserves based on the lower natural gas price assumptions in our recovery price deck," S&P said. "EP Energy plans to issue $300 million of additional term loan maturing in 2019. The company will use proceeds to partially pay down revolver borrowings ($380 million as of Sept. 30, 2012). We have assigned a 'B+' issue-level rating and '5' recovery rating to this debt," S&P said. "Our corporate credit rating on EP Energy remains unchanged at 'BB-' and our unsecured issue-level rating remains unchanged at 'B' with a recovery rating of '6', indicating our expectation for negligible recovery (0% to 10%) to unsecured creditors in the event of a payment default," S&P said. Ratings List EP Energy LLC Corporate credit rating BB-/Stable/-- New Rating EP Energy LLC $300 mil term loan due 2019 B+ Recovery rating 5 Rating Lowered/Recovery Rating Revised To From EP Energy LLC Secured debt B+ BB- Recovery rating 5 4 EPL OIL: Moody's Corrects October 15 Rating Release --------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to EPL Oil & Gas, Inc.'s (EPL) proposed $250 million 8.25% senior unsecured notes due 2018. EPL's existing ratings were unchanged. The outlook remains negative. Net proceeds from the note offering will be placed into an escrow and ultimately used to partially fund the $550 million cash purchase price of certain Gulf of Mexico (GoM) shallow water assets from Hilcorp Energy. "The amount of unsecured note issuance is consistent with what we had anticipated at the announcement of the Hilcorp acquisition," said Sajjad Alam, Moody's Analyst. "The new notes will be issued under a different indenture, but will rank pari passu with EPLs existing 8.25% notes and have substantially identical terms and conditions." Issuer: EPL Oil & Gas, Inc. Assignments: US$250M 8.25% Senior Unsecured Regular Bond/Debenture, Assigned Caa1 US$250M 8.25% Senior Unsecured Regular Bond/Debenture, Assigned a range of LGD5, 76 % Ratings Rationale The unsecured notes are rated Caa1, one notch below the B3 CFR given the substantial size of the priority claim secured revolving credit facility in the capital structure. The company's upsized $440 million revolving credit facility has a first-lien claim and is secured by substantially all assets of EPL, and the notes are structurally subordinated to the credit facility. The Caa1 note rating reflects both the overall probability of default of EPL, to which Moody's assigns a Probability of Default of B3, and a loss given default of LGD 5 (76%) under Moody's Loss Given Default Methodology. The B3 Corporate Family Rating reflects EPL's small-scale, overriding concentration in the Gulf of Mexico, high plugging and abandonment (P&A) costs, weak reserve replacement through the drill-bit, and acquisitive nature. The rating is restrained by the company's limited track record after emerging from bankruptcy in September 2009, as it continues to grow mostly through acquisitions. The rating is positively impacted by the company's oily production profile (~71%), low risk behind-the-pipe drilling opportunities and relatively high working interest in properties that allow flexible capital allocation. In light of the company's increased debt level and heightened concentration in the GoM, the B3 rating has minimal flexibility for any material increases in leverage. The negative outlook reflects increased leverage, higher reliance on external funding, and acquisition and execution risks. If EPL reduces its debt to average daily production below $28,000 per boe while maintaining production above 20,000 boe per day, the outlook could move back to stable. There is limited upside in the current ratings through 2013. Over the longer term, increased scale and capital efficiency supported by consistent organic reserve replacement and operational execution could be positive for the ratings, assuming the growth was achieved with competitive costs and financial leverage was sufficiently low. The rating could be downgraded if the debt to average daily production ratio rises above $33,000 per boe or the company experiences a significant deterioration in liquidity. The principal methodology used in rating EPL was the Global Independent Exploration and Production 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. EPL Oil & Gas, Inc., is an independent exploration and production company with primary operations in the U.S. Gulf of Mexico shelf. EUROFINANCE SA: UK High Court Won't Enforce U.S. Default Judgments ------------------------------------------------------------------ Bloomberg News' Erik Larson in London reports that Britain's top court decided for the first time that U.S. bankruptcy rulings against debtor companies that don't appear in court to defend themselves can't be recognized in the U.K. According to Bloomberg, the U.K. Supreme Court ruled in London that allowing so-called default judgments from the U.S. and other countries to be recognized in Britain would be a "radical departure" from current law and detrimental to domestic business. Bloomberg says the U.K. Supreme Court case involves a $10 million default judgment in New York against Eurofinance SA, a bankrupt sales-promotion company based in the British Virgin Islands. A trustee for Eurofinance had sought to enforce a New York judgment in England, where the people associated with the company live. The ruling "benefits businesses or individuals in the U.K. who might otherwise be obliged to attend litigation proceedings in the U.S., or indeed anywhere else in the world, that arise in a bankruptcy," said Patrick Elliot, a lawyer with Brown Rudnick LLP in London, who represented Eurofinance. Setback for Madoff Trustee Bloomberg says the the ruling is a setback for Irving Picard, the trustee for jailed con man Bernard L. Madoff's firm. While he wasn't a party in the case, he filed court papers promoting the recognition of U.S. judgments in Britain as he seeks to enforce three New York rulings totaling $1.25 billion in courts in Gibraltar and the Cayman Islands, which are influenced by U.K. law. "This judgment will make large cross-border insolvencies more difficult," said Nick Herrod, a lawyer with Allen & Overy LLP in London, who isn't involved in the case, according to the Bloomberg report. "It's disappointing because it's pushing against the tide" of recent cases that were "building quite a bit of momentum." Bloomberg says Amanda Remus, a Picard spokeswoman, declined to comment. According to Bloomberg, all three of Mr. Picard's cases were adjourned to await the U.K. Supreme Court's ruling, according to the judgment. The Supreme Court said it didn't make any findings in relation to the Madoff cases, and the entities sued by Mr. Picard also filed court papers to make their arguments. FTLL ROBOVAULT: Files List of 20 Largest Unsecured Creditors ------------------------------------------------------------ FTLL Robovault LLC filed with the U.S. Bankruptcy Court for the Southern District of California a list of its largest unsecured creditors, disclosing: Name of Creditor Nature of Claim Claim Amount --------------- --------------- ------------ AT&T Trade $0 YP Trade $0 City of Lauderdale Trade $0 Comcast Trade $0 Diamond Cuts Trade $0 Green Earth Beverage Systems Trade $0 Imavex Trade $0 Multi-Dimensional Integration Trade $0 Paladin Electronic Trade $0 Security 101 Trade $0 TCN Trade $0 US Bank Trade $0 US Imaging Solutions Trade $0 Wittenbach Business Systems Trade $0 Advanced Fire and Security Trade $0 All Fire Services Trade $0 B.W. Air Conditioning Trade $0 Day & Night Marketing Trade $0 Figures & Numbers Trade $0 About FTLL Robovault LLC Based in Fort Lauderdale, Florida, FTLL RoboVault LLC, aka Robo Vault, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 12-33090) on Sept. 27, 2012. Bankruptcy Judge Raymond B. Ray presides over the case. Lawrence B. Wrenn, Esq., serves as the Debtor's counsel. Developer Marvin Chaney signed Chapter 11 petitions for Robo Vault and affiliate Off Broward Storage. The companies own modern storage warehouses in Fort Lauderdale. The petition scheduled $18,665,069 in assets and $21,528,776 in liabilities. FULLER BRUSH: Lender Victory Park Buys Consumer Business -------------------------------------------------------- Victory Park Capital disclosed the approval of its acquisition of the consumer business of the 106-year-old Fuller Brush Company, originator of the door-to-door sales model and the iconic Fuller Brush Man. The U.S. Bankruptcy Court for the Southern District of New York entered an order approving the sale of Fuller Brush's consumer assets, consumer brands and goodwill to a VPC affiliate. The sale is expected to close next month. In a related development, VPC named industry veteran David Sabin to be the CEO of the Consumer Business. VPC, which has been Fuller Brush's lender since 2010, is an asset- management firm that specializes in direct credit and control equity investing in middle market and distressed companies. VPC has a strong track record of successfully restructuring businesses and, as Fuller Brush's lender, is deeply familiar with the company. As such, VPC is well-positioned to execute operational initiatives to restructure and reposition the Consumer Business for future growth as well as provide immediate working capital to meet its operational goals. This combined with the over 40 years of industry and brand experience of David Sabin creates a strong foundation for future growth. Sabin was chairman of Salton, a house wares and appliance maker where amongst other things David was instrumental in the launch and ultimate success of the popular George Foreman Grill. He also was the owner of Sabin China Company and served as president of Ingrid Plastics. Most recently, David served as president of Kids Line, a leading provider of infant bedding and accessories in the United States. "In addition to the existing line of Fuller consumer products, we expect to introduce new products that will re-establish Fuller and Stanley Home Products as premier brands in the home-cleaning and household products markets," Sabin said. "We also intend to expand into new product categories in all areas of the home." "Fuller is an iconic American brand that has delivered high- quality consumer products for over 100 years," said Matthew Ray, VPC partner and co-founder. "Our partnership with an established industry veteran such as David will prove transformative as we implement operational initiatives, introduce new products, revitalize the Fuller brands and execute on our long-term strategic plan." With best-in-class sourcing, investing, restructuring, and operating teams, VPC has a strong track record in investing and delivering strategic guidance, formulating value creation initiatives, and/or providing operational expertise to a broad range of recognized brands in distress, including Giordano's, Jamba Juice and Silver Airways, formerly known as Gulfstream International Airlines. About Victory Park Capital Victory Park Capital -- http://www.victoryparkcapital.com/-- provides unique solutions to small cap, middle market and distressed companies across a wide range of industries. Two Parcels Stephanie Gleason at Dow Jones' DBR Small Cap reports that Fuller Brush Co. received bankruptcy-court approval to sell its assets in two parcels to Great Bend, Kan., company Innovative Livestock Services Inc. and secured lender Victory Park Capital Investors. About The Fuller Brush The Fuller Brush Company -- http://www.fuller.com/-- sells branded and private label products for personal care, commercial and household cleaning and has a current catalog of 2,000 cleaning products. Some of Fuller's retail partners include Home Trends, Bi-Mart, Byerly's, Lunds, Home Depot, Do-It-Best, Primetime Solutions, Vermont Country Store and Starcrest. Founded in 1906 and based in Great Bend, Kansas, The Fuller Brush Company, Inc., and its parent, CPAC, Inc., filed for Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 12-10714 and 12-10715) in Manhattan on Feb. 21, 2012. Fuller Brush filed for bankruptcy five years after the company was taken over by private equity firm Buckingham Capital Partners. Fuller, which has 180 employees as of the Chapter 11 filing, disclosed $22.9 million in assets and $50.9 million in debt. Fuller said it will be business as usual while undergoing Chapter 11 restructuring. But it said that while in reorganization, it intends to trim about half of the current catalog of cleaning products. Herrick Feinstein LP serves as the Debtors' bankruptcy counsel. The official committee of unsecured creditors has tapped the law firm of Kelley Drye & Warren LLP as counsel. The reorganization is being financed with a $5 million loan from an affiliate of Victory Park Capital Advisors LLC, the secured lender owed $22.7 million that plans to buy the business in exchange for debt. The Court cleared Fuller Brush Co., to auction its assets next month, with its senior lender kicking off bidding. GUARANTY BANK, AUSTIN: FDIC Wants $900MM Suit in State Court ------------------------------------------------------------ Max Stendahl at Bankruptcy Law360 reports that the Federal Deposit Insurance Corp. urged a Texas federal judge on Friday to send back to state court its $900 million suit alleging several top banks tricked Guaranty Bank into buying toxic mortgage-backed securities, saying the case wasn't related to an ongoing bankruptcy proceeding. As reported in the TCR on Aug. 24, 2009, Guaranty Bank, Austin, TX was closed August 21 by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with BBVA Compass, Birmingham, Alabama, to assume all of the deposits of Guaranty Bank, excluding those from brokers. Guaranty Bank had 103 branches in Texas and 59 branches in California. Former branches of Guaranty Bank will reopen during normal banking hours starting tomorrow as branches of BBVA Compass. Depositors of Guaranty Bank will automatically become depositors of BBVA Compass. Depositors will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until BBVA Compass can fully integrate the deposit records of Guaranty Bank. GUARANTY FINANCIAL: International Paper Settle Suit for $80MM ------------------------------------------------------------- Robin Sidel, writing for The Wall Street Journal, reports that the Federal Deposit Insurance Corp. is about to receive a $42 million legal settlement that will rank among the agency's largest recoveries in the financial crisis -- from a paper company that played no role in the bank failure that spurred the lawsuit. WSJ says International Paper Co. has agreed to pay the FDIC to settle a year-old lawsuit stemming from the 2009 collapse of Guaranty Financial Group. As part of the agreement, the failed bank's creditors will get an added $38 million, bringing the total settlement to $80 million. WSJ notes International Paper was pulled into the case in February when it bought packaging firm Temple-Inland Inc., which had owned Guaranty for nearly two decades before spinning it off into an independent company in 2007. Kenneth Tepper, a court-appointed trustee last year, sued Temple-Inland in federal court in Dallas, contending that it loaded up the bank with risky securities and siphoned off nearly $600 million in dividends from its coffers. Mr. Tepper originally was seeking more than $1 billion in damages. International Paper had set aside $80 million to cover the settlement, according to a regulatory filing. WSJ reports the settlement, which was filed Monday night in bankruptcy court, also gives the FDIC and bondholders the right to receive roughly $275 million in tax refunds being pursued with the Internal Revenue Service. As a result, the FDIC could wind up receiving roughly $125 million from the Guaranty failure, making it one of the agency's largest recoveries from the financial crisis. The report recounts that, founded in 1938 as Guaranty Building & Loan in Galveston, Texas, the institution had swelled to $2 billion in assets and about 30 branches when the Texas real-estate bubble burst. In 1988, regulators declared Guaranty and more than 100 other savings and loans insolvent. Guaranty was brought back from the dead by Temple-Inland, which then owned timberland, paper mills, a railroad and a small mortgage company. With government help, the Austin company combined the S&L and two other failed Texas thrifts into a new thrift that was twice as big. About Guaranty Financial Guaranty Financial, based in Austin, Texas, and its affiliates filed for chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 09-35582) on Aug. 27, 2009, after its bank subsidiary was taken over by regulators. Guaranty Financial is the fifth largest U.S. bank failure. Attorneys at Haynes & Boone, LLP, served as the Debtors' bankruptcy counsel. According to the schedules attached to its petition, Guaranty Financial disclosed $24.3 million in total assets and $323.4 million in total debts, including $305.0 million in trust preferred securities. The bulk of Guaranty's remains were acquired by BBVA Compass, the U.S. division of Banco Bilbao Vizcaya Argentaria SA of Spain. Guaranty Financial received approval of its Second Amended Joint Plan of Liquidation on May 11, 2011. The Plan was declared effective later that month. The Plan is based on a settlement with the FDIC and the indenture trustee for the noteholders. The Plan calls for the FDIC to receive some of the remaining cash and all of the tax refunds, which are estimated at $3.49 million. Unsecured creditors with $382 million in claims stand to recover between 1% and 3%, from proceeds generated from lawsuits. GUARANTY FINANCIAL: Int'l Paper Pays $80MM to End Trustee's Suit ---------------------------------------------------------------- Linda Chiem at Bankruptcy Law360 reports that International Paper Co. agreed to an $80 million settlement Monday in a dispute with the court-appointed liquidation trustee for Guaranty Financial Group Inc. that benefits the Federal Deposit Insurance Corp. and Guaranty bondholders. According to Bankruptcy Law360, the deal calls for International Paper, which acquired Guaranty's former parent Temple-Inland Inc. in February, to pay the FDIC $42 million and Guaranty bondholders $38 million, according to trustee Kenneth Tepper's motion for approval of the settlement filed in Texas bankruptcy court. About Guaranty Financial Guaranty Financial, based in Austin, Texas, and its affiliates filed for chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 09-35582) on Aug. 27, 2009, after its bank subsidiary was taken over by regulators. Attorneys at Haynes & Boone, LLP, served as the Debtors' bankruptcy counsel. According to the schedules attached to its petition, Guaranty Financial disclosed $24.3 million in total assets and $323.4 million in total debts, including $305.0 million in trust preferred securities. The bulk of Guaranty's remains were acquired by BBVA Compass, the U.S. division of Banco Bilbao Vizcaya Argentaria SA of Spain. Guaranty Financial received approval of its Second Amended Joint Plan of Liquidation on May 11, 2011. The Plan was declared effective later that month. The Plan is based on a settlement with the FDIC and the indenture trustee for the noteholders. The Plan calls for the FDIC to receive some of the remaining cash and all of the tax refunds, which are estimated at $3.49 million. Unsecured creditors with $382 million in claims stand to recover between 1% and 3%, from proceeds generated from lawsuits. HAWAIIAN TELCOM: S&P Raises Corporate Credit Rating to 'B' ---------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Hawaiian Telcom Holdco Inc. to 'B' from 'B-'. The outlook is stable. "At the same time, we raised the issue-level rating on Hawaiian Telcom Communications Inc.'s approximately $300 million of outstanding senior secured debt to `B' from 'B-'. The recovery rating on the secured debt remains at `3', indicating our expectation for meaningful (50% to 70%) recovery in the event of a payment default," S&P said. "The upgrade incorporates our expectation that Hawaiian Telcom Holdco Inc. will continue to offset much of the impact of continued substantial erosion in its residential access line business with increases in business segment services and a buildup in video revenues as it more widely deploys that nascent service. The rating continues to reflect our view of a 'vulnerable' business risk profile: As the incumbent local exchange carrier (ILEC) for the state of Hawaii, Hawaiian Telcom, along with its ILEC peers, has been affected by the secular decline of the wireline industry as residential customers are lost to cable telephony and to wireless substitution (the latter phenomenon where the customer has no landline voice connection). Hawaiian Telcom has been losing residential telephone customers in the mid- to upper-single-digit percentage area over the past few years and has not been able to effectively stem those losses. However, approximately 45% of total access lines are business customers, which are less vulnerable to competitive losses. As a result, with only limited erosion of business lines, some increases in data and business services and, most recently, revenue contribution from the new 'Hawaiian Telcom TV' video service, the company has been able to limit consolidated revenue declines to the low-single-digit percentage area over the past two years," S&P said. "The rating incorporates an 'aggressive' financial risk profile under our criteria. Debt leverage, including our adjustments for pension obligations, is in the mid-3x area but we expect it will rise modestly as marketing and installation costs related to the continued rollout of Hawaiian Telcom TV dampen EBITDA. Hawaiian Telcom began commercial rollout of its video service in July 2011 and had about 6,000 subscribers at June 30, 2012. Until Hawaiian Telcom TV gains substantial scale, which will take at least a couple of years, the video segment is unlikely to produce meaningful EBITDA. As a result, with only minimal scheduled amortization and given significant capital spending, including for the buildout of Hawaiian Telcom TV throughout Oahu, leverage could increase to the low-4x area over the next one to two years, but that metric would still be commensurate with an aggressive financial risk profile and supportive of the rating," S&P said. HEALTH MANAGEMENT: Fitch Affirms 'BB-' Issuer Default Rating ------------------------------------------------------------ Fitch Ratings has affirmed Health Management Associates' 'BB-' Issuer Default Rating (IDR) and senior debt. A full list of ratings follows at the end of this release. The ratings apply to approximately $3.6 billion of debt at June 30, 2012. The Rating Outlook is Stable. Health Management's ratings reflect the following main credit factors: -- The company has good financial flexibility and solid cushion in its credit metrics in the 'BB-' rating category. Maintenance of the rating will require debt generally maintained at or below 4.0x EBITDA. -- After an increase in debt to partially fund an acquisition in Q3'11, leverage increased to 4.2x at the end of the year. However, the level has declined due to EBITDA growth and amortization of the bank term loans and Fitch forecasts total debt-to-EBITDA of 3.7x at the end of 2012. -- Liquidity is solid. Refinancing of the debt structure in late 2011 addressed a 2014 maturity wall and improved flexibility under the bank agreement financial maintenance covenants. -- Organic operating trends in the for-profit hospital industry are weak and Fitch expects them to remain so into 2013. Fitch sees the potential for 2% sequestration of Medicare payments starting in January 2013 under a fiscal cliff scenario as the next significant risk to the industry's operating profile. -- Health Management's strategy of growing through hospital acquisitions has been successful in augmenting weak organic top-line growth and diversifying its operations outside of its south Florida markets. Industry Consistent Operating Trends Throughout 2009 and into 2010, Health Management led the for- profit hospital industry in organic patient volume growth, demonstrating improvements in its operations. While these improvements continue to benefit Health Management's results, its organic operating trends have been more in-line with other hospital companies with operations focused on non-urban markets since the second half of 2010. Organic patient volume growth has been weak, but strong growth in pricing in is supporting organic topline growth. An ongoing shift to outpatient volumes as well as effective cost control has aided Health Management's profitability and cash flow generation. Health Management generates half its revenues from outpatients, which is a significant support to its profitability. Fitch believes the organic growth outlook for some of Health Management's older markets in South Florida is relatively weak. Health Management has 22 of its 70 hospitals in the state of Florida and unemployment rates in the South Florida region remain above the national average. Offsetting this concern, the company has recently focused its investments in faster growing markets outside of Florida. Its 2011 - 2012 capital investments included acquisitions of a five-hospital system in Oklahoma and a seven- hospital system in Knoxville, Tennessee and the construction of replacement hospitals in its Mason, Georgia and Poplar Bluff, Missouri markets. Growth Through Acquisitions Strategy While the company remains focused on its operations, organic growth tapered significantly starting in 2011 to a rate more consistent with the industry, and the company shifted its focus to augmenting growth through hospital acquisitions. Health Management has made acquisitions contributing a cumulative $1.4 billion of revenue since late 2009. This represents around 30% of the company's 2009 revenue. The company's rate of revenue and EBITDA growth outpaced its peers in 2011 - 2012 due to the contributions of recent acquisitions. Health Management has only completed one major acquisition so far in 2012 and management has indicated that going forward the company's goal is to complete two-to-three transactions per year that add $500 million in revenue. Increased Leverage for Acquisitions While the company will not meet its target for acquisitions in 2012, Fitch expects its activity to ramp up heading into 2013 and thinks that the schedule of completion and funding of acquisitions could continue to be quite variable. Health Management will probably continue to favor acquisition of smaller not-for profit or municipally-owned hospitals in markets where it has an existing presence. Health Management's 2011 - 2012 acquisitions cost between 65% and 90% of acquired revenue and Fitch projects ongoing free cash flow (FCF, cash from operations less capital expenditures and dividends) generation for the company of about $240 million. Assuming a similar cost of funding of future acquisitions, this forecast implies that the company could acquire in the range of $270-$370 million of revenue out of FCF. This means that debt could trend higher in the near-term if the company meets its acquisition goal. Health Management has been willing to increase debt to fund acquisitions in the past. The Dec. 31, 2011 total debt level of 4.2x EBITDA was affected by the debt financing of a $525 million acquisition of a seven-hospital system in Knoxville, TN, in Q3'11. However, leverage dropped back below 4.0x by June 30, 2012 due to growth in EBITDA and required amortization of the bank term loans. Fitch projects year-end 2012 total debt-to-EBITDA of 3.7x and EBITDA to gross interest expense of 4.1x. Liquidity Profile is Solid Health Management completed a comprehensive refinancing of its debt structure in Q4'11. The debt refinancing improved the credit profile by removing the 2014 bank debt maturity wall and creating a more balanced capital structure. The proportion of secured debt in the capital structure dropped to 70% from 95%, representing an improvement in credit quality for the secured lenders. Health Management's nearest significant debt maturity is now in 2016. The company has ample room under its bank facility financial maintenance covenants, which require total debt-to-EBITDA maintained below 5.5x and interest coverage above 3.25x. At June 30, 2012, Health Management's liquidity was provided by cash and short-term investments of $156 million, $450 million of availability under the $500 million bank revolver and LTM FCF of $200 million. Fitch projects full year 2012 FCF of about $240 million for Health Management. Lower use of cash for working capital and a higher projected amount of electronic health record incentive payments in the second half of 2012 resulted in the expected boost in FCF versus the LTM level. Rating Triggers Maintenance of a 'BB-' IDR for Health Management will require total debt-to-EBITDA sustained around 4.0x, coupled with a solid liquidity profile with interest coverage of above 4.0x and a FCF margin of at least 3.0%. Positive rating triggers would include debt maintained below 3.5x EBITDA. Fitch believes this is unlikely given the company's stated intent to complete two-to- three acquisitions per year. Although FCF generation is adequate to fund a good amount of acquisitions, the company has demonstrated its willingness to increase debt to fund acquisitions. A downgrade of the ratings could be the result of further deterioration in the hospital industry's organic operating trend if Fitch expects associated erosion in HMA's profitability and financial flexibility to result in debt maintained above 4.5x EBITDA. This could be the result of a fiscal cliff scenario in 2013, causing very weak growth in Medicare payments and a worsening of macro-economic conditions. An increase in unemployment rates in Health Management's major markets in the southeastern U.S. would be particularly concerning, since this could lead to a worsening trend in the company's already fairly weak organic patient volume growth. Debt Issue Ratings The secured debt is rated 'BB+', two notches above the IDR, and includes the bank agreement debt and the senior secured notes due 2016. The two notch distinction above the IDR is supported by the over collateralization of the secured debt by the assets of the guarantor group of subsidiaries. At June 30, 2012, the guarantor subsidiaries represented about $3.6 billion of consolidated assets and there was $2.5 billion of secured debt in the capital structure. The 'B' rating on the senior subordinated convertible notes, two-notches below the IDR, reflects the high proportion of debt ranking ahead of these notes in the capital structure, which would result in weak recovery for the note holders in a workout scenario. Fitch affirms Health Management's ratings as follows: -- IDR at 'BB-'; -- Senior secured bank facility, including a $500 million revolving credit facility, $1 billion term loan A and $1.2 billion term loan B; at 'BB+'; -- Senior secured notes at 'BB+'; -- Senior unsecured notes at 'BB-'; -- Senior subordinated convertible notes at 'B'. HMX ACQUISITION: Sale Price Provides Full Payment to Secured Debt ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that HMX Acquisition Corp., the owner of the Hart Schaffner Marx and Hickey Freeman brands of men's clothing, lined up a sale of the business at a price sufficient for full payment to the secured lender owed $60.6 million, leaving enough cash to pay expenses of the bankruptcy reorganization and "a projected dividend to unsecured creditors," the company said in a filing with the U.S. Bankruptcy Court in Manhattan. According to the report, until the sale is completed, the bankruptcy will be financed with a $65 million loan from Salus Capital Partner LLC, an affiliate of Harbinger Group Inc. Harbinger is the existing first-lien lender. The loan will pay off the pre-bankruptcy debt while proving about $5 million in additional borrowing ability. Unless outbid at auction, Authentic Brands Group LLC will pay enough to cover the debt to Harbinger plus between $5 million and $9 million in cash. Assuming the bankruptcy court goes along, competing bids would be due Nov. 28, followed by a Dec. 3 auction and a hearing to approve the sale by Dec. 5. HMX says the sale will save about 1,000 jobs. The report relates that HMX filed a balance sheet listing assets of $153.6 million and liabilities totaling $120 million. In addition to the Harbinger debt, there is about $18.5 million owing to an affiliate of the 95% owner on subordinated debt and unsecured debt. Trade suppliers are owed about $23 million, according to a court filing. HMX says it's the largest manufacturer of U.S.-made men's tailored clothing. Annual sales are about $200 million. There are three plants in the U.S. The Bloomberg report discloses that if not outbid, the HMX acquisition will be the second this year for Authentic Brands. In August it completed the purchase of Prince Sports Inc., a designer and distributor of racquet sports equipment. It took over ownership under a Chapter 11 plan in exchange for $67.2 million in secured debt it purchased. About Hartmarx HMX Acquisition filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-14300) in Manhattan on Oct. 19, 2012. HMX, LLC, along with two entities, sought Chapter 11 protection on Oct. 21, 2012. Proskauer Rose LLP is the general bankruptcy counsel; William Blair & Company, L.L.C., is the investment banker; CDG Group, LLC, is the financial advisor; and Epiq Bankruptcy Solutions, LLC, is the claims and noticing agent. The report notes that the bankruptcy is the second in three years for the two brands. Hartmarx Corp. filed under Chapter 11 in January 2009 (Bankr. N.D. Ill. Case No. 09-02046). In June that year, the bankruptcy judge authorized selling the business to Emerisque Brands U.K. Ltd. and SKNL North America Ltd. under a $119 million contract that included $70.5 million cash, the assumption of $33.5 million in debt, and a junior secured note for $15 million. Headquartered in New York City, HMX Acquisition is a leading American designer, manufacturer, licensor, and licensee of men's and women's business and leisure apparel focused primarily on the luxury, bridge, and better price points. HMX is the largest manufacturer and marketer of U.S.-made men's tailored clothing, with an attractive portfolio of owned and licensed brands sold primarily through upscale department stores, specialty stores, and boutiques. HMX owns tailored clothing brands including Hickey Freeman and Hart Schaffner Marx. The company has manufacturing based in Rochester, N.Y.; Des Plaines, Ill.; and Hamilton, Ontario. HOLLYWOOD PANORAMA: Tenants Can't Amend Lawsuit Over 2001 Fire -------------------------------------------------------------- The Court of Appeals of California, Second District, Division Two, upheld trial court orders that barred a tenants group from amending its complaint against the owner of a 20-story building located at 6290 West Sunset Boulevard in Los Angeles. The decade- old case stems from an electrical fire that occurred in December 2001 in the high-rise commercial building owned by Hollywood Panorama Tower, Inc. Due to the ensuing power outage and forced vacancy, many tenants suffered damages including loss of personal property. The tenants, mostly small businesses, formed the Hollywood Panorama Tower Tenants Association sometime in 2001, and sued the landlord and certain of its alleged employees. Over time, the defendants were successful in putting an end to the case by opposing a motion for leave to amend the first amended complaint, obtaining summary judgment, and bringing a motion to quash service of process on one of the defendants. The tenants took an appeal from the trial court's rulings on these three matters. The California state appellate court affirmed. On July 2, 2003, the Hollywood Panorama Tower Tenants Association and several tenants filed involuntary bankruptcy proceedings against Hollywood Panorama Tower (In re Hollywood Panorama Tower, Inc., case No. LA 03-27695-ES), after learning that HPT was about to sell the building. The matter was eventually converted to a voluntary Chapter 11 reorganization case. Of the remaining HPTTA tenants that had not settled, HDCR filed the largest proof of claim for $1,224,575.00. Due to the bankruptcy case, the superior court action was stayed for about two years from July 9, 2003 through June 9, 2005. The superior court action then proceeded for about two years until it was stayed again from May 23, 2007 through July 29, 2009, pending an appeal filed by another party. The case before the appellate court is, HOLLYWOOD PANORAMA TOWER TENANTS ASSOCIATION et al., Plaintiffs and Appellants, v. HOLLYWOOD PANORAMA TOWER, INC., et al., Defendants and Respondents, No. B231702 (Calif. App. Ct.). A copy of the Court's Oct. 23, 2012 decision is available at http://is.gd/rNayJOfrom Leagle.com. HORSHAM 410: Files for Chapter 11 in Philadelphia ------------------------------------------------- Horsham 410, LLC, filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 12-19941) in Philadelphia on Oct. 23. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated at least $10 million in assets and liabilities. According to the case docket, governmental entities are required to submit proofs of claim on April 21, 2013. The Debtor has filed an application to employ the Law Offices of Dimitri L. Karapelou, LLC, as counsel. HOUSTON, TX: Fitch Affirms 'B' Rating on $323.5-Mil. Revenue Bonds ------------------------------------------------------------------ Fitch Ratings affirms the city of Houston, TX's outstanding $323.5 million airport system special facilities revenue bonds (Continental Airlines Inc. Terminal E Project) series 2001 at 'B'. The series 2001 bonds are fixed-rate revenue bonds with a final maturity in 2029. The Rating Outlook remains Stable. KEY RATING DRIVERS: UAL'S FINANCIAL STRENGTH: United Continental Holdings, Inc. (UAL) has demonstrated continued improvements in its underlying financial strength, debt position and liquidity since the closing of the United-Continental merger on Oct. 1, 2010. The combined carrier has maintained a strong utilization of the facility. UAL has a Fitch Issuer Default rating of 'B' and a Stable Outlook. ESSENTIAL NATURE OF THE TERMINAL: Terminal E handles the majority (77%) of UAL's international operations and a large share (60%) of the total airline international traffic at George Bush Intercontinental Airport (IAH or Intercontinental). IAH is a fundamentally strong airport (rated 'A+' on its subordinate lien revenue bonds with Negative Outlook) that serves a large base of both origination and destination (O&D) and connecting traffic, and is a major international gateway for UAL. IAH serves as the primary commercial airport for the metropolitan area and as a major system hub for UAL. UNSECURED OBLIGATIONS OF UAL: The limited revenue stream and the unsecured guarantee of UAL are mitigated by the re-letting provisions allowing the airport to retake the facility in the event of an early lease termination. LACK OF DEBT SERVICE RESERVE: Bondholders do not have access to cash reserves or structural enhancements. What Could Trigger A Rating Action: -- Any changes in the credit of UAL would have a direct effect on the rating. See related analysis on United Continental, dated Sept. 13, 2012, available at www.fitchratings.com. SECURITY: Special facilities rent paid by UAL pursuant to the special facilities lease secures the Continental Terminal E Project bonds. CREDIT UPDATE: Intercontinental serves as the primary commercial airport for the metropolitan area and it is the only Houston-area airport providing international service. Intercontinental's traffic has held up relatively well through the recent downturn, with modest declines in enplanements at a 1.2% compound annual growth rate (CAGR) between 2006 and 2011. The year 2011 saw a 1% decrease in enplanements, and enplanements were essentially flat in the first eight months of 2012 (through August, down 0.1% when compared to the same time period in 2011). International traffic continued to see a more robust recovery than domestic; international enplanements increased by 1.5% while domestic traffic was down 1.3% in 2011. UAL has continued to operate its major system hub at the airport since the merger with Continental in October of 2010, without any major scheduling or hubbing changes; no significant changes in traffic profile are expected as a result of the merger. UAL accounted for approximately 87% of Intercontinental's passengers and 79% of total international traffic in 2011. Terminal E is a 600,000 square-foot facility with 23 gates that can handle both domestic and international passenger traffic. The terminal is an essential facility for the airport itself as well as for UAL's international operations. Terminal E handles about 30% of total Intercontinental traffic while the terminal's international traffic of 5.2 million passengers in 2011 represented 13% of all airport passengers and 60% of all international traffic. Traffic at Terminal E decreased 7.9% through the first eight months of 2012. The drop in traffic is due to the 1.4% total UAL capacity decrease as measured by available seat miles (ASMs), representing a 1.7% decrease and 3.6% decrease in frequencies and seats, respectively. In September 2012, Fitch affirmed UAL's IDR at 'B' with a Stable Outlook; UAL's credit profile is supported by its leadership positions across its extensive global route network, strong liquidity profile and growing unencumbered asset base. Year-to- date operating results have weakened due to on-going challenges with its merger integration, and rising fuel prices. When combined with higher capital expenditures (for necessary fleet renewal and other investments) and a softening macro environment, Fitch expects free cash flow (FCF) to be negative in 2012. Nonetheless, UAL remains on track with its deleveraging plan as evidenced in the $2.6 billion debt reduction since the merger. Management also remains committed to maintaining capacity discipline as reflected in the third round of capacity reduction announced last week. Even during capacity reduction, UAL continues to demonstrate its commitment to Houston through a recent agreement to state Houston as UAL's B787 base for training and maintenance. This could lead to a high utilization of the B787 in the Houston market, particularly because of the opportunity cost associated with repositioning aircrafts to other airports. More information on the Fitch rating of United Continental Holdings, Inc. and the most recent rating action press release dated Sept. 13, 2012can be found at www.fitchratings.com. The Continental Terminal E Project bonds financed the construction and development of Terminal E Intercontinental, which UAL uses as an international connection hub and Latin American gateway. Terminal E was built in two phases and fully opened in January 2005. IDEARC INC: Properly Capitalized When Spun Off, Says JPM Exec ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a witness for Verizon Communications Inc. from JPMorgan Securities Inc. testified that yellow-page unit Idearc Inc. was a "very good ongoing company" when it was spun off from the parent in 2006. Tuesday's testimony came in the second week of a trial where Idearc creditors are suing New York-based Verizon for $9.8 billion, contending the spinoff entailed fraudulent transfers that left the unit insolvent immediately. According to the report, Jennifer Nason, head of JPMorgan Securities' technology, media and telecom unit, said the bank committed to lending $250 million and still held $125 million in debt when Idearc filed for bankruptcy. Ms. Nason said she believed Idearc was properly capitalized, with about $3.5 billion in equity and $9 billion in debt. On cross-examination, Ms. Nason told lawyers for Idearc creditors that JPMorgan made $36 million in fees on the financing transaction. The report relates that an expert witness for creditors testified last week that Idearc was insolvent by more than $1 billion when it became independent. Earlier this week, an expert witness for Verizon testified that Idearc was "completely stable" at the time of the spinoff. The trial is scheduled to run through the end of the week in U.S. District Court in Dallas, where Idearc was based. Second Week Mr. Rochelle reports that Verizon Communications Inc. brought an expert witness to court Oct. 22 who testified that subsidiary Idearc Inc. was "completely stable" when spun off in 2006. According to the report, the testimony was offered in the second week of trial where Verizon is defending against claims by Idearc creditors that the spinoff entailed fraudulent transfers leaving the subsidiary insolvent immediately. The trial is scheduled to run through the end of the week in U.S. District Court in Dallas where Idearc was located. The case will be decided by the district judge without a jury. The creditors' lawsuit is U.S. Bank National Association v. Verizon Communications Inc., 10-01842, U.S. District Court, Northern District Texas (Dallas). The bankruptcy case was In re Idearc Inc., 09-31828, U.S. Bankruptcy Court, Northern District of 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. INCREDIBLE DAVE'S: Court Directs Brady to Turn On Scoring System ---------------------------------------------------------------- At the behest of Incredible Dave's of Nashville, LLC, Bankruptcy Judge Marian F. Harrison directed Brady Distributing Company to activate the Steltronic scoring system, which is a necessary part of the bowling equipment located at the Debtor's business. Specifically, Judge Harrison directed Brady to contact U.S. Bowling and make a good faith written request that U.S. Bowling turn on the Steltronic scoring system located at the Debtor's facility. Brady purchased a bowling equipment package, including the Steltronic scoring system, from U.S. Bowling on behalf of the Debtor. In return, the Debtor agreed to repay Brady for the system, in part through a revenue sharing agreement. The Debtor has not made any payments on the bowling equipment package. Brady did not obtain a security interest in the bowling equipment package. David Lawrence, the Debtor's operations manager, testified that the Steltronic scoring system allows customers to enter their individual names for scoring purposes. Without the Steltronic scoring system, each bowler is only identified as "bowler 1," "bowler 2," etc. Mr. Lawrence testified that the inability to enter the names of individual bowlers has especially hindered the Debtor's ability to host large parties and corporate events. Prior to the debtor filing for bankruptcy protection, the scoring system was turned off twice. The first time, Mr. Lawrence contacted Larry Cook, Brady's chief operating officer, and the parties reached an agreement regarding payment. Mr. Cook contacted U.S. Bowling, and the Steltronic scoring system was shortly turned back on without the necessity of anyone coming to the debtor's facility. Unfortunately, the Debtor's check bounced, and the Steltronic scoring system was turned off after 45 days and has remained off. Mr. Lawrence testified that despite numerous requests, Brady has refused to turn the Steltronic scoring system back on, and without the Steltronic scoring system, the Debtor's chance at an effective reorganization is jeopardized. Mr. Cook testified that Brady is not willing to request that U.S. Bowling turn on the Steltronic scoring system because the request would have to be accompanied by the final payment of $4,000 on the bowling equipment package plus $6,500 for diagnostic tests required by U.S. Bowling. Mr. Cook testified that Brady is unwilling to pay any additional money for the system because it has not received any payments from the Debtor. Mr. Cook testified that as a courtesy, U.S. Bowling did not charge Brady to turn the system back on the first time. There was no proof that U.S. Bowling would not extend this same courtesy again, nor did anyone from U.S. Bowling testify at the hearing. "There is no question that the debtor's estate has an interest in the Steltronic scoring system. Moreover, it is clear from the testimony that if the Steltronic scoring system is not turned back on, it will be difficult for the debtor to successfully reorganize and repay its creditors, including Brady," said Judge Harrison. A copy of the Court's Oct. 22, 2012 Memorandum Opinion and Order is available at http://is.gd/xrKm7yfrom Leagle.com. Based in Goodlettsville, Tennessee, Incredible Dave's of Nashville LLC filed for Chapter 11 protection (Bankr. M.D. Tenn. Case No. 12-04817) on May 23, 2012. Judge Marian F. Harrison presides over the case. Elliott Warner Jones, Esq., at Emerge Law, PLC, represents the Debtor. The Debtor estimated both assets and debts of between $1 million and $10 million. INDIANAPOLIS DOWNS: Fights Objections for $500M Sale, Ch. 11 Plan ----------------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that Indianapolis Downs LLC on Monday concluded the second and final day of a contested dual-purpose hearing, fighting against objections to both its $500 million sale deal with cross-state rival Centaur Holdings LLC and its Chapter 11 plan. 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. INTERSTATE PROPERTIES: Files for Chapter 11 in Atlanta ------------------------------------------------------ Interstate Properties, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-76037) in Atlanta on Oct. 17. The Debtor estimated $10 million to $50 million in assets and liabilities. The U.S. Trustee in Atlanta will convene a Meeting of Creditors under 11 U.S.C. 341(a) in the case on Nov. 28, 2012, at 2:00 p.m. at Hearing Room 367, Atlanta. Interstate Properties must file its schedules of assets and liabilities, statement of financial affairs, and other incomplete documents by Oct. 31. The Debtor is represented by: George M. Geeslin, Esq. Eight Piedmont Center, Suite 550 3525 Piedmont Road, N.E. Atlanta, GA 30305-1565 Tel: (404) 841-3464 Fax: (404) 816-1108 E-mail: geeslingm@aol.com IRVINGTON COMMUNITY: S&P Lowers Rating on 2 Bond Issues to 'BB+' ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating to 'BB+' from 'BBB-' on the Indiana Finance Authority's series 2009A and 2009B educational facilities revenue bonds, issued for Irvington Community School Inc., and revised the outlook to negative from stable. "The rating action and outlook revision reflect our assessment of the school's deterioration of its overall financial credit profile in fiscal 2012, drop in liquidity, and risk, inherent to most charter schools, regarding nonrenewal of its charter, which must be renewed multiple times before final bond maturity," said Standard & Poor's credit analyst Kevin Holloran. JACOBS FINANCIAL: Incurs $454,000 Net Loss in Aug. 31 Quarter ------------------------------------------------------------- Jacobs Financial Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $453,588 on $384,377 of total revenues for the three months ended Aug. 31, 2012, compared with a net loss of $127,041 on $656,764 of total revenues for the same period during the prior year. The Company's balance sheet at Aug. 31, 2012, showed $8.94 million in total assets, $16.53 million in total liabilities, $1.85 million in total mandatorily redeemable preferred stock, and a $9.44 million total stockholders' deficit. Jacobs Financial reported a net loss of $1.10 million for the year ended May 31, 2012, compared with a net loss of $1.30 million during the prior fiscal year. For the three month period ended Aug. 31, 2012, the Company had a loss from operations of $35,000, or a loss of $472,000 after interest expense and accrued dividends on mandatorily redeemable preferred stock are taken into account. Losses are expected to continue until the Company's insurance company subsidiary, First Surety Corporation develops a more substantial book of business. While improvement is anticipated as the business plan is implemented, restrictions on the use of FSC's assets, the Company's significant deficiency in working capital and stockholders' equity raise substantial doubt about the Company's ability to continue as a going concern. In the auditors' report accompanying the consolidated financial statements for the year ended May 31, 2012, Malin, Bergquist & Company, LLP, in Pittsburgh, PA, noted that the Company's significant net working capital deficit and operating losses raise substantial doubt about its ability to continue as a going concern. A copy of the Form 10-Q is available for free at: http://is.gd/FFOZ3e About Jacobs Financial Jacobs Financial Group, Inc. (OTC Bulletin Board: JFGI) is a Charleston, West Virginia-based holding company for First Surety Corporation, a West Virginia domiciled surety, Triangle Surety Agency, an insurance agency that specializes in coal reclamation surety bonds, and Jacobs & Company, a registered investment advisor. JEFFERSON COUNTY: Sued Over $4-Mil. Inmate Health Care Deal ----------------------------------------------------------- Lance Duroni at Bankruptcy Law360 reports that Jefferson County, Ala., has reneged on a $4 million deal with a health care contractor for medical services at its jail after switching to a competitor without notice, according to a lawsuit filed Tuesday in Alabama federal court. Mississippi-based Health Assurance LLC alleges the troubled county and its sheriff, Mike Hale, ignored the contract and took advantage of the contractor's employees as they transitioned last year to a new provider, Advanced Correctional Healthcare Inc., at the Jefferson County jail, according to Bankruptcy Law360. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. K-V PHARMACEUTICAL: Cash Set to Increase by $6.5 Million -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that K-V Pharmaceutical Co. is generating another $6.5 million in cash from the generic pharmaceutical business that was sold in June 2011. When Zydus Pharmaceuticals USA Inc. and Nesher Pharmaceuticals USA LLC bought the business; $7.5 million was placed in escrow to cover the buyers if they were sued by users of the products. The escrow was to end one year after the sale. According to the report, the buyers made claims against the escrow. K-V and the buyers agreed to a settlement under which $6.5 million will be released to K-V, $475,000 goes to the buyers and $500,000 remains in escrow. This week, the bankruptcy court in Manhattan scheduled a Nov. 16 hearing to approve the escrow settlement. The settlement will augment K-V's cash, which stood at $29.6 million at the end of September, according to a monthly operating report filed with the bankruptcy court. The company has another $9.6 million in restricted cash. There will be a pivotal hearing beginning Nov. 13 with Hologic Inc., which sold the Makena business to K-V in 2008 and is owed about $95 million plus royalties. Hologic has a lien on the right to distribute the product to recover the remaining payments. Hologic wants the bankruptcy judge to grant permission to foreclose rights to Makena. The Bloomberg report discloses that the first-lien notes traded Oct. 23 for 45 cents on the dollar, according to Trace, the bond- price reporting system of the Financial Industry Regulatory Authority. There is $200 million owing on 2.5% contingent convertible subordinated notes due in 2033. The notes traded Oct. 23 for 6.875 cents on the dollar, according to Trace. About K-V Pharmaceutical K-V 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 members to serve in the Official Committee of Unsecured Creditors. KH FUNDING: Wells Fargo Can't Nix Bondholder Suit Over Default -------------------------------------------------------------- Brian Mahoney at Bankruptcy Law360 reports that Wells Fargo Bank NA on Monday lost its bid to toss a proposed class action alleging the bank breached its duties to bondholders by failing to take timely action after a subprime mortgage lender defaulted on at least $1.75 million in bond payments before its bankruptcy. Bankruptcy Law360 relates that U.S. District Judge Catherine C. Blake ruled Monday that the bank can't yet dodge allegations that it breached its contract to KH Funding bondholders by neglecting to take timely action when KH stopped making its interest and principal payments. About KH Funding Company Silver Spring, Maryland-based KH Funding Company is a Maryland corporation whose business activities consisted primarily of originating, acquiring, and servicing mortgage loans. Specifically, KH Funding originated commercial real estate mortgage loans and investment property residential mortgage loans and also purchased residential first and second mortgage loans from other lenders. These lending activities have been concentrated primarily in the greater Washington, D.C. and Baltimore areas. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Md. Case No. 10-37371) on Dec. 3, 2010. Lawrence Coppel, Esq., at Gordon Feinblatt Rothman Hoffberger & Hollander, LLC, in Baltimore, Maryland, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets and debts at $10 million to $50 million. W. Clarkson McDow, Jr., United States Trustee for Region 4, appointed seven creditors to serve on the Official Committee of Unsecured Creditors. The Committee is represented by Bradford J. Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, and lawyers at McGuireWoods LLP as co-counsel. The Committee has tapped BDO Consulting, a division of BDO USA, LLP, as its financial advisor. The Troubled Company Reporter on Oct. 3, 2011, outlined the terms of the Joint Liquidation Plan filed by KH Funding and the Committee. The Plan provides that the Debtor's assets will be liquidated in an orderly manner, including sales of real property owned by the Debtor. KINETIC CONCEPTS: S&P Keeps BB- Ratings on $2.4BB Secured Credit ---------------------------------------------------------------- Standard & Poor's Ratings Services said its ratings on San Antonio, Texas-based medical technology company Kinetic Concepts Inc. (subsidiary of Centaur Guernsey L.P. Inc.) are not affected by the company's intention to amend its credit facility. The credit facility consists of a $200 million revolver due 2016, $1.975 billion term loan B-1 due 2018, and a $325 million term loan B-2 due 2016. The issue-level rating on the facility is currently 'BB-', with a recovery rating of '1', indicating very high recovery (90% to 100%) for lenders in the event of a payment default. The amendment will lower the interest rates on the facility and provide flexibility for the repurchase of up to $250 million of senior secured and/or senior unsecured notes. "While we view positively the interest cost savings and potential repayment of high cost debt, it is not significant enough to alter our 'B' rating or stable outlook on the company," S&P said. "The ratings on Kinetic Concepts Inc. (KCI) overwhelmingly reflect the company's 'highly leveraged' financial risk profile following its LBO and "fair" business risk profile. The fair business risk profile incorporates KCI's significant dependence on vacuum- assisted closure (VAC) devices, market share losses, and pricing pressures for VAC devices, as well as generally well-entrenched market positions and rapid growth at the LifeCell division. The financial risk profile reflects adjusted debt to EBITDA following the LBO, per Standard & Poor's Ratings Services' calculations, of more than 7x, which we expect to drop to about 6.4x in 2012," S&P said. RATINGS LIST Ratings Unchanged Kinetic Concepts Inc. Corporate Credit Rating B/Stable/-- Senior Secured Second-lien notes due 2018 B Recovery Rating 4 Term B-1 loan due 2018 BB- Recovery Rating 1 Revolver due 2016 BB- Recovery Rating 1 Term B-2 loan due 2016 BB- Recovery Rating 1 Senior Unsecured Senior notes due 2019 CCC+ Recovery Rating 6 LAUREATE EDUCATION: Moody's Keeps B2 CFR; Rates $350MM Notes Caa1 ----------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Laureate Education, Inc.'s proposed $350 million add-on senior unsecured notes due 2019. The notes will be issued under the indenture governing the 9.25% senior unsecured notes due 2019 that were issued in July. Concurrently, Moody's affirmed the company's B2 corporate family rating, B2 probability of default rating, and its various debt ratings. The ratings outlook remains stable. Proceeds from the proposed senior notes will be used to reduce the outstanding balance under the senior toggle notes due 2015. Moody's views the transaction favorably since it reduces interest expense, improves the debt maturity profile, and increases the cash balance. Rating assigned: Proposed $350 million add-on senior unsecured notes due 2019 at Caa1 (LGD5, 81%) Ratings affirmed: Corporate family rating at B2 Probability of default rating at B2 $1,115 million senior secured term loan due 2018 at B1 (LGD3, 38%). Point estimate revised from (LGD3, 40%) $164 million senior secured loans due 2014 at B1 (LGD3, 38%). Point estimate revised from (LGD3, 40%) $350 million 9.25% senior unsecured notes due 2019 at Caa1 (LGD5, 81%) $260 million 10% senior unsecured notes due 2015 at Caa1 (LGD5, 81%) $547 million ($247 million at closing) 10.25%/11% senior unsecured PIK toggle notes due 2015 at Caa1 (LGD5, 81%) $286 million 11.75% senior subordinated notes due 2017 at Caa1 (LGD6, 95%) Ratings Rationale Moody's estimates that pro forma leverage stood at approximately 6.1 times through the twelve months ended September 30, 2012, an increase from the 5.6 times reported in 2011 (Moody's adjusted). Adjusted EBITDA has declined through the nine months ended September 30, 2012 due to higher operating expenses, the impact of discrete items, unfavorable exchange rate movements, and a seasonal shift in earnings. Despite year-to-date EBITDA declines, the ratings affirmation reflects Moody's expectation that Laureate will still sequentially grow its EBITDA in 2012 and 2013, largely through revenue growth and increased operating leverage. The affirmation also reflects Moody's expectation that Laureate will sustain solid enrollment trends such that financial leverage approaches 5.5 times over the next 12 to 18 months. Laureate's B2 corporate family rating reflects its high leverage, modest coverage of interest expense, high levels of discretionary capital spending that constrain free cash flow, the heightened regulatory environment in the for-profit education sector in the U.S., aggressive acquisition activity in past periods, and exposure to foreign exchange risk. However, the rating is supported by the company's prominent market position in the international for-profit, post-secondary education space, solid enrollment growth supported by the breadth of its presence in multiple geographies, favorable industry fundamentals, and expectation for positive GDP growth in most of the countries it operates, which should support positive enrollment trends. The stable outlook reflects Moody's expectation that Laureate will continue to sustain solid enrollment growth, increase its earnings, and improve its operating margins such that debt to EBITDA improves from current levels. Moody's could upgrade Laureate's ratings if it improves its margin profile, sustainably reduces financial leverage below 5.0 times, sustains free cash flow to debt in excess of 5.0% and demonstrates continued profitable enrollment growth. The ratings could be pressured if weaker than expected growth in enrollments, and/or a significant ramp-up in debt financed acquisition activity results in debt to EBITDA approaching 6.5 times or EBITDA less maintenance capex to interest expense declining below 1.2 times. Sustained negative free cash flow could also pressure the ratings. The ratings are subject to the conclusion of the transactions, as proposed, and Moody's review of final documentation. The principal methodology used in rating Laureate Education, Inc. 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. Laureate Education, Inc. is based in Baltimore, Maryland, and operates a leading international network of accredited campus- based and online universities with more than 50 institutions in 24 countries, offering academic programs to approximately 700,000 students through over 100 campuses and online delivery. Laureate had revenues of approximately $3.37 billion for the twelve months ended June 30, 2012. LAUREATE EDUCATION: S&P Affirms 'CCC+' Rating on $700MM Sr. Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed the issue-level rating on Baltimore, Md.-based Laureate Education Inc.'s $700 million unsecured notes due 2019 ($350 million add-on to the existing issue) at 'CCC+' (two notches below its'B' corporate credit rating on the company) with a recovery rating of '6', indicating its expectation for negligible (0% to 10%) recovery for bondholders in the event of a payment default. Laureate will use the proceeds to refinance existing debt. "At the same time, we affirmed our existing ratings on Laureate, including the 'B' corporate credit rating. The rating outlook is stable," S&P said. "The corporate credit rating reflects Standard & Poor's expectation that Laureate's debt leverage will remain high, reflecting the company's acquisition orientation and high capital spending on growth," said Standard & Poor's credit analyst Chris Valentine. "We expect debt leverage to remain in the low-6x area at the end of 2012. We view Laureate's business risk profile as 'weak,' based on our criteria, because of the risks inherent in undertaking its rapid overseas expansion, which involves considerable execution risk, country risk, and currency risk, in our view. The company has a 'highly leveraged' financial profile, in our view, because of high debt leverage and limited cash flow generation relative to total debt burden," S&P said. "Laureate's goal, broadly, is to acquire international educational institutions, including turnaround situations in their markets, improve their curriculum, and raise enrollment levels. The company periodically acquires underperforming schools operating at low profitability, which can depress EBITDA and its EBITDA margin. We view business execution related to Laureate's rapid growth as a key risk. Laureate earns about half of its revenues, and a slightly higher percentage of EBITDA, in Mexico, Chile, and Brazil, where postsecondary enrollment is rising faster than in the U.S. International schools also face a lower degree of regulation than their U.S. for-profit education peers but we see a risk that this could change over time. Even without rigorous regulation, Laureate is also exposed to student loan credit risk in Chile and Brazil," S&P said. LDK SOLAR: HRX to Buy 19.9% of Issued and Outstanding Capital ------------------------------------------------------------- LDK Solar Co., Ltd., has entered into a share purchase agreement dated Oct. 19, 2012, with Heng Rui Xin Energy Co., Ltd., a PRC company invested by privately owned and state-owned funds, in which HRX has agreed to purchase newly issued ordinary shares, accounting for approximately 19.9% of the total issued and outstanding capital of LDK Solar prior to that issuance, at a purchase price of US$0.86 per ordinary share, subject to the terms and conditions of the share purchase agreement, including a lock- up for 180 days. Pursuant to the share purchase agreement, HRX also has the right to designate three additional directors to the LDK Solar board, and the parties have also agreed to add two independent directors to the LDK Solar board. Closing of the proposed transaction is subject to, among other things, the receipt of all necessary consents and approvals from applicable governmental and regulatory authorities, including the various PRC governmental agencies. 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. LEVI STRAUSS: Moody's Affirms 'B1' CFR/PDR; Outlook Positive ------------------------------------------------------------ Moody's Investors Service revised Levi Strauss & Co.'s ("LS&Co") rating outlook to positive from stable. All other ratings, including the B1 Corporate Family Rating and B2 rating assigned to LS&CO.'s various classes of unsecured debt were affirmed. The following ratings were affirmed and LGD assessments amended: Corporate Family Rating at B1 Probability of Default Rating at B1 $325 million senior unsecured term loan due 2014 at B2 (LGD 4, 66% from LGD 4,69%) EUR300 million senior unsecured notes due 2018 at B2 (LGD 4, 66% from LGD 4,69%) $525 million senior unsecured notes due 2020 at B2 (LGD 4, 66% from LGD 4,69%) $385 million senior unsecured notes due 2012 at B2 (LGD 4, 65% from LGD 4,69%) Ratings Rationale Scott Tuhy, Vice President said "The positive rating outlook reflects Moody's expectation that the company's focus on lean inventory levels, and the benefits of moderating input costs over the next few quarters, should enable the company to make continued progress in expanding gross margins". The outlook revision also reflects the meaningful reduction in LS&CO's absolute debt levels over the past few quarters. Moody's also believes the company can improve operating margins through a continued focus on cost efficiencies. While Moody's outlook is positive, Moody's has some concerns around the company's significant European exposure, which accounted for approximately 24% of the company's YTD revenues. LS& CO's B1 Corporate Family Rating reflects the company's moderate (though improving) operating margins and the company's still significant debt burden (including its meaningful unfunded pension liability, which exceeded $400 million at its most recent fiscal year end). Debt/EBITDA was near 4.5 times for the most recent LTM period. The rating also take into consideration the company's meaningful global presence, with operations in over 110 countries, and also that the company's has a significant exposure to the sluggish European market, which accounted for 24% of revenues in the YTD period. The iconic nature of the Levi's trademark also underpins the company's overall credit profile as well as the company's very good liquidity profile. Ratings could be upgraded if the company is able to maintain modest growth in operating earnings, indicating the company is benefiting from lower input costs, inventory discipline and operating efficiencies. These factors would need to be sufficient to offset macro-economic challenges, particularly in Europe. Quantitatively if adjusted operating margins exceed 10%, with debt/EBITDA sustained below 4.5 times and EBITA/interest expense remaining above 2.0 times, ratings could be upgraded. In view of the positive outlook, ratings are unlikely to be downgraded in the near to intermediate term. Quantitatively, ratings could be downgraded if debt/EBITDA exceeded 5.5 times or EBITA/interest fell below 1.5 times. Additionally, ratings could be downgraded if the company's solid liquidity profile were to materially erode. The rating outlook could be stabilized if the company's operating margins began to erode, which most likely would be the result of a sustained downturn in the global economy, such that debt/EBITDA was likely to be sustained near 5 times. The principal methodology used in rating Levi Strauss & Co. was the Global Apparel Industry Methodology published in May 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in San Francisco, California, Levi Strauss & Co designs and markets jeans, casual wear and related accessories under the "Levi's", "Dockers", "Signature by Levi Strauss & Co." and "Denizen" brands. The company sells product in more than 110 countries through chain retailers, department stores, online sites and franchised and company-owned stores. Levi Strauss & Co.'s reported fiscal 2011 net revenues were $4.8 billion. LOCATION BASED TECHNOLOGIES: Wins Over 100 New Business Customers ----------------------------------------------------------------- Location Based Technologies, Inc., has acquired more than 100 new business customers since the launch of its Business Solutions platform in July of this year. Business customers pay a higher monthly service fee and have access to enhanced user-interface features. Sales to business customers have increased 36% in the past 30 days as sales continue to ramp steadily. One hundred and twelve companies are now receiving the benefits of LBT's new low cost GPS system primarily because it is affordable for all sizes of businesses and delivers flexible business solutions that drive operational efficiencies and measurable monetary savings. New Web and App based functionality, coupled with management, monitoring and reporting capability, provides a sophisticated yet supremely easy-to-use customer interface that minimizes training costs and time while maximizing asset management capabilities. This Business Solutions segment is increasingly providing a solid source of revenues for LBT. "Our commercial sales pipeline continues to grow and in just a few months we have surpassed an early milestone of serving more than 100 businesses," said Dave Morse, CEO of Location Based Technologies. "Any business looking for cost savings, enhanced safety and expanded management capability for their mobile assets should 'test drive' our new Business Solutions system - whether you have 5 or 5,000 mobile assets. As large and small businesses have found, our asset tracking solution delivers the best value and is the 'easiest to use' interface on the market. It is simply not good enough to only know where your valued assets are located at the beginning and the end of each day," Morse adds. LBT's A-GPS Vehicle and Asset Tracking System have a best-in-class end user interface, accessed via web browser, mobile web browser, or smartphone app for highly mobile field managers who are constantly on the go. Its GPS Mapping Application pinpoints the location of the asset along with vital decision making information transmitted wirelessly to the Business Solutions platform in near real time. Users can optimize, customize and enhance the use of any mobile asset on a global basis. The Next Billion Dollar Market Location Based was cited in a study by ABI Research, which concluded that personal tracking devices would become a billion dollar market by 2017, with an estimated compound annual growth rate of 40%. The article further estimated that the addressable US market is comprised of 120 million people. In the article, Senior Analyst Patrick Connelly stated, "We are also seeing the first signs of leading CE companies entering the market, such as Qualcomm, Apple (via PocketFinder), Garmin, Cobra, etc. and there will also be significant partnerships and acquisitions in this space as new entrants looks to add tracking to their portfolio...." "ABI's report further validates the need for our products and services," said Location Based Technologies, CEO Dave Morse. "We are on the cutting edge of a fast growing industry and our goal is to become the undisputed market leader for personal GPS devices." To view the full article, visit http://is.gd/r2UPRQ About Location Based Technologies Irvine, Calif.-based Location Based Technologies, Inc., designs, develops, and sells leading-edge personal locator devices and services. The Company's balance sheet at May 31, 2012, showed $7.64 million in total assets, $5.44 million in total liabilities, $499,387 of commitments and contingencies, and stockholders' equity of $1.70 million. "The Company has incurred net losses since inception, and as of May 31, 2012, had an accumulated deficit of $42,125,209. These conditions raise substantial doubt as to the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended May 31, 2012. As reported in the TCR on Dec. 2, 2011, Comiskey & Company, in Denver Colorado, expressed substantial doubt about the Company's ability to continue as a going concern, following the Company's results for the fiscal year ended Aug. 31, 2011. The independent auditors noted that the Company has incurred recurring losses since inception and has an accumulated deficit in excess of $37,000,000. "There is no established sales history for the Company's products, which are new to the marketplace." MENDOCINO COAST: CBA Issues Prompt Chapter 9 Filing --------------------------------------------------- Mendocino Coast Health Care District of Mendocino, California, filed a Chapter 9 petition (Bankr. N.D. Calif. Case No. 12-12753) in Santa Rosa on Oct. 17, 2012. In April, the board of directors of the District, a public entity formed and operating pursuant to the California Local Health Care District Law, Health & Safety Code Sec. 32000 et seq., authorized the District to initiate a 60-day mediation process with creditors. The resolution said the District's financial difficulty is significantly affected by its obligations to employees under a collective bargaining agreement with the United Food and Commercial Workers Local 8. Negotiations with UFCW8 have not resulted in relief to the District from contacted wage increases and benefits that are included in the CBA. The mediation process was a requisite to a filing under Chapter 9 of the Bankruptcy Code. The resolution authorizing the Chapter 9 filing dated Sept. 27, 20912, said that the District, Cal Mortgage Loan Insurance Division of the Office of Statewide Health Planning and Development, and UFCW8 were unable to reach an agreement sufficient to address adequately the District's immediate financial crisis. The Debtor estimated $10 million to $50 million in assets and liabilities. MENDOCINO COAST: Chapter 9 Case Summary & List of Top Creditors --------------------------------------------------------------- Debtor: Mendocino Coast Health Care 700 River Drive Ft. Bragg, CA 95437 Bankruptcy Case No.: 12-12753 Chapter 9 Petition Date: October 17, 2012 Court: United States Bankruptcy Court Northern District of California (Santa Rosa) Debtor's Counsel: Andrea T. Porter, Esq. FRIEDMAN AND SPRINGWATER LLP 33 New Montgomery St, #290 San Francisco, CA 94105 Tel: (415) 834-3805 E-mail: aporter@friedmanspring.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Wayne C. Allen, chief financial officer. List of the Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Cardinal Health Pharm Trade Debt $292,949 Distribution File #74031 P.O. Box 60000 San Francisco, CA 94160 Cal Pers Trade Debt $188,076 P.O. Box 4032 Sacramento, CA 95812-4032 Valley Emergency Trade Debt $112,425 Physicians 1990 N. California Blvd. Suite 400 Walnut Creek, CA 94596 Johnson & Johnson Depuy Trade Debt $87,127 Alpha Fund Trade Debt $70,451 Cardinal Health Medical Trade Debt $67,969 Prod & Svcs Zimmer Trade Debt $54,835 Martin Fletcher & Trade Debt $49,466 Associates CDW-G Trade Debt $42,317 Park Place Int'l. Trade Debt $38,200 Beta Healthcare Trade Debt $35,736 Group 1443 Toshiba America Trade Debt $31,976 Medical Systems Siemens Healthcare Trade Debt $28,110 Diagnostics Office Max Trade Debt $25,186 Health Care Dental Trade Debt $24,438 Trust The Shams Group Trade Debt $20,745 Phoenix Medcom Inc. Trade Debt $20,614 Staff Care, Inc. Trade Debt $20,767 Aretaeus Telemedicine, Trade Debt $20,000 Inc. Nuance Communications Trade Debt $19,532 MF GLOBAL: Corzine Seeks Dismissal of Investors' Lawsuit -------------------------------------------------------- Patrick Fitzgerald, writing for Dow Jones Newswires, reports that lawyers for former MF Global Holdings Ltd. Chief Executive Jon Corzine are asking a federal judge to toss a civil fraud lawsuit accusing him of misleading investors about the risky bets the futures firm was taking before its collapse a year ago. Mr. Corzine's lawyers blasted the investors' suit as a "jumble of assertions and accusations" that makes "no sense" that should be dismissed. Dow Jones notes that a group of banks and underwriters -- among them units of Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Citigroup Inc. -- that are also being targeted by the investors joined Mr. Corzine in asking District Judge Victor Marrero to throw out the lawsuit. The repot recounts investors, now led by Virginia Retirement System, sued Mr. Corzine, other company executives and the banks that backed the trading firm, claiming they failed to disclose the risks associated with MF Global's European sovereign debt trades using repurchase-to-maturity transactions. 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: Trustees Win Judge Not to Shut Down WARN Act Case ------------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Martin Glenn on Tuesday granted requests by the trustees for MF Global Holdings Ltd. and its broker-dealer unit MF Global Inc. that he dismiss a Worker Adjustment and Retraining Notification class action filed against the bankruptcy estates. Judge Glenn granted a motion to dismiss filed by James W. Giddens -- the trustee appointed under the Securities Investor Protection Act to liquidate MFGI -- with prejudice, and a similar motion filed by MFGH Chapter 11 trustee Louis J. Freeh without prejudice, Bankruptcy Law360 relates. 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: Jon Corzine Asks Judge to Toss Securities Fraud Suit --------------------------------------------------------------- Patrick Fitzgerald at Dow Jones' Daily Bankruptcy Review reports that lawyers for former MF Global Holdings Ltd. Chief Executive Jon Corzine are asking a federal judge to toss a civil fraud lawsuit accusing him of misleading investors about the risky bets the futures firm was taking before its collapse a year ago. 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: Corzine Wants Dismissal From Fraud Class Action Suit --------------------------------------------------------------- Max Stendahl at Bankruptcy Law360 reports that former MF Global Holdings Inc. CEO Jon Corzine pressed a New York federal judge Friday to dismiss him from a fraud class action over the firm's collapse, saying his optimistic statements about the brokerage were merely expressions of confidence. Attorneys for Corzine said he did not intentionally mislead investors about the firm's massive exposure to European sovereign debt before an October 2011 bankruptcy filing. 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: Now Debt-Free, Appeals NYSE Delisting -------------------------------------------------- MGT Capital Investments, Inc., disclosed that it has entered into two agreements with various institutional investors providing $5.9 million of capital in support of the Company's strategy to monetize intellectual property. The capital raise is comprised of the sale of $4.5 million of Series A Convertible Preferred Shares (which include Warrants to purchase MGT common stock), plus a separate sale of $1.4 million of MGT Common Stock. Subject to the approval of NYSE MKT and other customary closing conditions, the Preferred Shares will be convertible into the Company's common stock at a fixed price of $3.26 per share and carry a 6% dividend. The Warrants have a five-year life and are exercisable at $3.85 per MGT share; the Company will issue a total of 2.8 million Warrants in the deal. This transaction is expected to close on or before Oct. 26, 2012. Chardan Capital Markets LLC acted as sole financial advisor in the sale of the Preferred Shares and Warrants. MGT also completed an agreement to sell 453,000 shares of its Common Stock at a price of $3.01, under its S-3 Registration Statement, which was declared effective on September 25, 2012 by the U. S. Securities and Exchange Commission. Closing of this transaction is also expected on or before Oct. 26, 2012, and is also subject to NYSE MKT approval. In an earlier step to improve the Company's financial flexibility and reduce capital costs, MGT repaid at face value the entire $3.5 million issue of its Senior Secured Convertible Notes on Oct. 10, 2012. As a result of all announced and completed capital transactions, MGT is now debt-free, and will have approximately $7.0 million in cash and 3.0 million common shares outstanding. On Oct. 12, 2012, MGT appealed the delisting proceedings of NYSE MKT and requested an Oral Hearing in accordance with Part 12 of the Company Guide, in response to the Exchange's delisting Notice received by the Company on Oct. 5, 2012. On Oct. 17, 2012, MGT received further Notice from the Exchange that a Listing Qualifications Panel has been authorized to hold the hearing on Dec. 12, 2012. The delisting action has been stayed pending the outcome of the review, in accordance with Section 1203(d) of the Guide. Upon closing of the transactions contemplated above, the Company believes it will meet the minimum equity conditions for remaining listed on the Exchange; however, there can be no assurance that the Exchange will reach the same determination or grant the Company's request for continued listing. Robert Traversa, the Company's Chief Financial Officer, stated, "As one of the largest stockholders of MGT, I am constantly focused on maximizing long term shareholder value. Today's deals bring strategic investors with proven success in the intellectual property space and set a very solid foundation for our expansion and development." The Company will continue to update shareholders on its progress, including ongoing discussions with NYSE MKT, as well as patent enforcement activities. 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. MILK HOLDING: S&P Rates $315MM Credit Facilities 'B-' ----------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issue-level ratings to Milk Holding Corp.'s (Milk Specialties Company is the borrower) proposed $315 million senior secured credit facilities. "The recovery rating on the senior secured credit facilities is '3', indicating our expectation for meaningful (50% to 70%) recovery in the event of a payment default. We also affirmed our existing ratings, including the 'B' corporate credit rating. The outlook is stable," S&P said. "The rating reflects our assessment of the company's narrow focus on whey-based products, significant reliance on external whey supplies, participation in highly competitive and fragmented industries, and exposure to potential negative publicity or studies," said Standard & Poor's credit analyst Bea Chiem. The company is expected to use the proceeds to refinance existing debt, fund its capacity expansion plan, and pay fees and other expenses associated with the transaction. MOUNTAIN PROVINCE: To Issue $13.4 Million Subscription Rights ------------------------------------------------------------- Mountain Province Diamonds Inc. filed with the U.S. Securities and Exchange Commission a Form F-7 relating to the issuance to the holders of its outstanding common shares of record at the close of business on Oct. 30, 2012, rights to subscribe for additional common shares. A maximum of 13,452,593 Rights Shares will be issuable pursuant to the Rights Offering, representing approximately 16.7% of the issued and outstanding Common Shares on Oct. 18, 2012. Rights will be evidenced by transferable rights certificates. Each registered holder of Common Shares on the Record Date will receive one Right for each Common Share held. Six Rights plus the sum of $3.50 are required to subscribe for one Rights Share. The Rights expire at 5:00 p.m. (Toronto time) on Nov. 28, 2012, after which time unexercised Rights will be void and of no value. The Rights Offering will result in maximum proceeds of approximately $47,084,076 from the sale of the Rights Shares, less estimated expenses of the Rights Offering in the amount of approximately $75,000 and the Stand-By Fee. The Corporation intends to use the net proceeds of the Rights Offering to fund the Corporation's 49% share of the Gahcho Kue JV costs, including permitting, engineering design, procurement, transport, drilling and related expenditures and for general corporate purposes. The Rights will be listed on the TSX under the symbol "MPV.RT" and will be posted for trading on the TSX until 12:00 p.m. (Toronto time) on the Rights Expiry Date at which time they will be halted for trading. Bottin (International) Investments Ltd. (controlled by Dermot Desmond) has agreed to subscribe for, at the Subscription Price, those Rights Shares not otherwise subscribed for on the exercise of the Rights under the Basic Subscription Privilege and the Additional Subscription Privilege. No managing dealer or soliciting dealer has been engaged in connection with this Offering. Computershare Trust Company of Canada will act as the subscription agent for the Rights Offering and is also the registrar and transfer agent for the Common Shares. A copy of the Form F-7 is available for free at: http://is.gd/QQEVYG About Mountain Province Headquartered in Toronto, Canada, Mountain Province Diamonds Inc. (TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/-- is a Canadian resource company in the process of permitting and developing a diamond deposit known as the "Gahcho Kue Project" located in the Northwest Territories of Canada. The Company's primary asset is its 49% interest in the Gahcho Kue Project. The Company reported a net loss of C$11.53 million for the year ended Dec. 31, 2011, compared with a net loss of C$14.53 million during the prior year. The Company's balance sheet at June 30, 2012, showed C$62.54 million in total assets, C$12.79 million in total liabilities and C$49.74 million total shareholders' equity. After auditing the financial statements for the year ended Dec. 31, 2011, KPMG LLP, in Toronto, Canada, noted that the Company has incurred a net loss in 2011 and expects to require additional capital resources to meet planned expenditures in 2012 that raise substantial doubt about the Company's ability to continue as a going concern. NAKNEK ELECTRIC: Wants Collateral Disposition, Settlement OK'd -------------------------------------------------------------- Naknek Electric Association, Inc., asks the U.S. Bankruptcy Court for the District of Alaska to approve the Collateral Disposition and Settlement Agreement supplementing the Debtor's motion for order (1) approving sale of drill rig & accessories; and (2) approving use of sale proceeds to plug & abandon well. The Debtor owns equipment known as Rig No. 7 which it purchased to drill an exploratory geothermal well. National Rural Utilities Cooperative Finance Corporation has a UCC lien against the rig. CFC's lien is second in position to the liens of various vendors who have mining liens or whose mechanics liens against the rig and rig-related assets compromised in amount and agreed as to efficacy in adversary proceeding no. 11-90007 and pursuant to main case order. The Debtor related that it has been negotiating with BHO for a transaction in which the rig and related equipment would be transferred to BHO or its assignee in return for valuable consideration from BHO for the Debtor and its estate. Other parties-in-interest have participated in the negotiations since the motion was filed. These include CFC and the other secured creditors with liens against the rig assets. The negotiations have resulted in substantial changes to the form of the transaction that is the subject of the motion and some changes to the economics, including increased benefits to be received by the Debtor and its estate. The purpose of the supplement is to explain the revised transaction in some detail and to analyze the compromises therein pursuant to Rule 9019. The Collateral Disposition and Settlement Agreement provides that: (1) the Debtor acknowledge of basic facts associated with the rig and need to plug the well; (2) foreclosure subsequent to the lifting of automatic stay of CFC's security position in the CFC Rig Collateral; (3) sale to BHO of the Residual Rig Related Assets; (4) authorization to plug the well and incur the associated expenses; and (5) settlement of disputed claims. The CDSA also provides for mutual releases by and between Baker Hughes Oilfield Operations, Inc., and the Debtor. Specifically, effective as of the closing date, the Baker Hughes Parties will forever release and discharge NEA, together with its officers, directors, employees, agents and attorneys, from all claims, obligations, liabilities, causes of action, demands, and controversies whatsoever. At the conclusion of the contemplated transactions, Baker Process, Inc., will end up owning the rig assets free and clear of all liens, claims, and encumbrances. BHO will be obligated to provide all the P&A Obligations to the Debtor. BHO will also have obligations under the Intercreditor Agreements which will benefit the Participating M&M Lien Claimants, CFC, and the Debtor. Mutual releases will have been exchanged. T he Debtor will have parted with a fully-encumbered asset but will have realized material and tangible benefits from that asset which will not be realized other than through the transaction. A copy of the term is the agreement is available for free at http://bankrupt.com/misc/NAKNEKELECTRIC_sale_foreclosure.pdf About Naknek Electric Association Naknek, Alaska-based Naknek Electric Association, Inc., operates a diesel power generation plant, storage and distribution system on approximately 9.34 acres of land it owns in Naknek, Alaska. It provides electricity to 591 members of the cooperative. It also is developing a geothermal well. Naknek Electric filed for Chapter 11 bankruptcy protection (Bankr. D. Alaska Case No. 10-00824) on Sept. 29, 2010. Erik LeRoy, Esq., at Erik Leroy P.C., assists the Debtor in its restructuring effort. The Debtor disclosed $21,459,632 in assets and $7,523,708 as of the Chapter 11 filing. The Debtor filed with the Court a plan of reorganization and an accompanying disclosure statement on Sept. 15, 2011. The Plan proposed that the Debtor will pay Class 13, unsecured creditors, $3 million over 60 months commencing on the Effective Date. Based on the current claims filed in the case, the proposed payment will pay unsecured creditors a dividend of about $0.10 on each dollar of claim. A committee of unsecured creditors has been appointed by the United States Trustee. NAVISTAR INTERNATIONAL: GAMCO Asset Discloses 6.2% Equity Stake --------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, GAMCO Asset Management, Inc., and its affiliates disclosed that, as of Oct. 19, 2012, they beneficially own 4,246,911 shares of common stock of Navistar International Corporation representing 6.19% of the shares outstanding. GAMCO Asset Management previously reported beneficial ownership of 3,762,381 common shares or 5.49% as of July 30, 2012. A copy of the amended filing is available for free at http://is.gd/RU0vOX About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at July 31, 2012, showed $11.14 billion in total assets, $11.50 billion in total liabilities, and a $363 million total stockholders' deficit. * * * In the Aug. 3, 2012, edition of the TCR, Moody's Investors Service lowered Navistar International Corporation's Corporate Family Rating (CFR), Probability of Default Rating (PDR), and senior note rating to B2 from B1. The downgrade of Navistar's ratings reflects the significant challenges the company will face during the next eighteen months in re-establishing the profitability and competitiveness of its US and Canadian truck operations in light of the failure to achieve EPA certification of its EGR emissions technology, the significant reductions in military revenues and substantially higher engine warranty reserves. As reported by the TCR on June 13, 2012, Standard & Poor's Ratings Services lowered its ratings on Navistar International Corp., including the corporate credit rating to 'B+', from 'BB-'. "The downgrade and CreditWatch placement reflect the company's operational and financial setbacks in recent months," said Standard & Poor's credit analyst Sol Samson. In the Sept. 19, 2012, edition of the TCR, Fitch Ratings has downgraded the Issuer Default Ratings (IDR) for Navistar International Corporation (NAV) and Navistar Financial Corporation (NFC) to 'CCC' from 'B-'. The rating Outlook is Negative. The rating downgrades and Negative Rating Outlook reflect the company's heightened liquidity risk and negative manufacturing free cash flow (FCF) which could continue into 2013. NAVISTAR INTERNATIONAL: Amends Rights Pact with Computershare ------------------------------------------------------------- Navistar International Corporation and Computershare Shareowner Services LLC, as Rights Agent, under the Rights Agreement, dated as of June 19, 2012, as amended from time to time, entered into Amendment No. 3 to the Rights Agreement. Amendment No. 3 amends the definition of "Acquiring Person" to clarify that an "Exempt Person" remains an "Exempt Person" so long as that person does not become the beneficial owner of a higher percentage of shares of common stock then outstanding (other than as result of a reduction of shares of common stock due to repurchase or certain other actions by the Company) as compared to the percentage of shares of common stock outstanding beneficially owned by that Exempt Person as of the initial time of adoption of the Rights Agreement. A copy of the Third Amendment is available for free at: http://is.gd/OdBIeT About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The company also provides truck and diesel engine parts and service. Another affiliate offers financing services. The Company's balance sheet at July 31, 2012, showed $11.14 billion in total assets, $11.50 billion in total liabilities, and a $363 million total stockholders' deficit. * * * In the Aug. 3, 2012, edition of the TCR, Moody's Investors Service lowered Navistar International Corporation's Corporate Family Rating (CFR), Probability of Default Rating (PDR), and senior note rating to B2 from B1. The downgrade of Navistar's ratings reflects the significant challenges the company will face during the next eighteen months in re-establishing the profitability and competitiveness of its US and Canadian truck operations in light of the failure to achieve EPA certification of its EGR emissions technology, the significant reductions in military revenues and substantially higher engine warranty reserves. As reported by the TCR on June 13, 2012, Standard & Poor's Ratings Services lowered its ratings on Navistar International Corp., including the corporate credit rating to 'B+', from 'BB-'. "The downgrade and CreditWatch placement reflect the company's operational and financial setbacks in recent months," said Standard & Poor's credit analyst Sol Samson. In the Sept. 19, 2012, edition of the TCR, Fitch Ratings has downgraded the Issuer Default Ratings (IDR) for Navistar International Corporation (NAV) and Navistar Financial Corporation (NFC) to 'CCC' from 'B-'. The rating Outlook is Negative. The rating downgrades and Negative Rating Outlook reflect the company's heightened liquidity risk and negative manufacturing free cash flow (FCF) which could continue into 2013. NEUSTAR INC: S&P Affirms 'BB' Corp Credit Rating; Outlook Revised ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Sterling, Va.-based Neustar Inc. and revised the outlook to developing from stable. "The outlook revision is based on our expectation that within the next 12 months vendor selection for the number portability administration center services [NPAC] contracts that Neustar currently services will be determined, and the outcome could lead to an upgrade or downgrade of our ratings on the company," said Standard & Poor's credit analyst Allyn Arden. "If Neustar is successful in renewing the contract under favorable terms, we could raise the ratings. This would provide Neustar revenue stability beyond 2015 for about half of its business. Conversely, if the company is unable to renew the NPAC contracts or renews with significant price concessions, we could lower the ratings, since this could adversely affect revenue and EBITDA levels and potentially result in higher leverage," S&P said. "The ratings on Neustar reflect a business risk profile which Standard & Poor's Ratings Services considers 'fair,' coupled with an 'intermediate' financial risk profile. The company benefits from a high degree of near-term predictability for nearly 50% of its revenues, which derive from the NPAC contracts. These include wireline and wireless number portability, managing the allocation of pooled blocks of telephone numbers, and providing other network management services in the U.S. under seven exclusive contracts through June 2015 with an industry group representing all telecom service providers in the U.S. These contracts include fixed fees, as well as some annual escalators," S&P said. "The outlook is developing. We expect that the company's NPAC services will provide stability and predictability to its overall base of business and associated cash flows over at least the next year. However, we could raise the ratings if the company is able to renew the NPAC contracts on favorable terms. This would provide Neustar with revenue stability beyond 2015 for about half of its business. A ratings upgrade would also be predicated on the company maintaining an 'intermediate' financial risk profile, including leverage of around 2x," S&P said. "Conversely, a downgrade could occur if Neustar is unable to renew the NPAC contracts or if it renewed the contracts on significantly less favorable terms than its prior contract, since this would adversely affect revenue and EBITDA levels and could prompt us to revise downward our business and financial risk assessment of the company. We could also lower the ratings if Neustar were to materially modify its financial policy, including substantially increasing its stock repurchase plans or pursuing material debt- financed acquisitions, such that leverage were to increase to the mid-3x area or higher," S&P said. OCEAN BREEZE: Nov. 1 Hearing on Continued Cash Collateral Use ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida continued until Nov. 1, 2012, at 1:30 p.m., the hearing to consider Ocean Breeze Park Homeowners' Association, Inc.'s request for continued cash collateral use. As reported in the Troubled Company Reporter on Aug. 24, 2012, Ocean Breeze, at the onset of its case, made an emergency request seeking Court permission to use cash collateral of its lenders Cathie Teal, Gary Hendry, and Marcia Hendry-Coker to continue its business operations. Without the use of the Cash Collateral, the Debtor said it will be forced to discontinue its business operations. As of the bankruptcy filing date, the lenders allege that the Debtor owed them $25,309,718, including $904,402 in accrued and unpaid interest pursuant to two Promissory Notes and Security Agreements dated Dec. 12, 2008. The debt is secured by, among other things, Purchase Money Mortgage and Security Agreements. The allocation of the debt owed to the lenders is: Cathie Teal, 50% of the principal and interest; Gary Hendry, 25% of the principal and interest; and Marcia Hendry-Coker, 25% of the principal and interest. The Debtor said it is willing to provide the lenders with adequate protection of their secured interest in the cash collateral. By the terms of the loan documents, the Debtor already granted to the lenders a security interest in the Debtor's assets including, but not limited to, the land in which the Debtor holds a fee simple interest, located in the Town of Ocean Breeze, Martin County, Florida, together with all buildings and structures situated on the Land as well as all rents and revenues associated with the Land, accounts receivable and notes receivable belonging to the Debtor. About Ocean Breeze Park Homeowners' Association Jensen Beach, Florida-based Ocean Breeze Park Homeowners' Association, Inc., filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 12-28820) in West Palm Beach on Aug. 3, 2012. Bankruptcy Judge Erik P. Kimball presides over the case. Ocean Breeze Park Homeowners' Association operates a residential cooperative mobile home park located at 3000 N.E. Indian River Drive, Jensen Beach. The shareholders have equity ownership in the Cooperative, allowing them to hold proprietary leases which provide for 99-year leasehold agreements. There are 549 mobile home units, 39 cottages and 16 recreational vehicle units. There are 137 units subject to the proprietary leases. Bankruptcy Judge Erik P. Kimball presides over the case. Lawyers at Furr and Cohen, P.A., serve as the Debtor's counsel. In its schedules, the Debtor listed $13,472,535 in assets and $24,870,355 in liabilities. The petition was signed by Harry Bartlett, president. OLDE PRAIRIE: To Sell $195-Mil. Chicago Property ------------------------------------------------ Sindhu Sundar at Bankruptcy Law360 reports that Olde Prairie Block Owner LLC will sell more than 3.6 acres of property in Chicago near Lake Michigan for a total of $195 million to buyers including a New York-based real estate investor and an Illinois-based developer, as part of its reorganization plan filed Friday. About Olde Prairie Block Owner Olde Prairie Block Owner, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-37599) in Chicago on Sept. 2012, disclosing assets of $97 million in assets and $80.6 million in liabilities in its schedules. The Debtor owns two properties: (i) the Old Prairie Property, a 53,575 square foot parcel that has a building and a gravel paved lot at E. Cermak Road in Chicago, and (ii) the Lakeside Property, a 159,960 square-feet property that contains buildings in Chicago. The Debtor said CenterPoint Properties Trust has a disputed claim of $70.8 million, of which $63.3 million is secured. JMB Capital Partners is owed $3.4 million on account of DIP financing in a previous Chapter 11 case. Olde Prairie Block first sought chapter 11 protection (Bankr. N.D. Ill. Case No. 10-22668) on May 18, 2010. Two years later, the bankruptcy judge in Chicago dismissed the case and granted Centerpoint's motion to lift automatic stay to permit its state- court foreclosure action to proceed. In the prior case, the Debtor was represented by John Ruskusky, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago. Robert R. Benjamin, Esq., at Golan & Christie, LLP, serves as counsel to the Debtor in the 2012 Chapter 11 case. CenterPoint is represented in the 2012 case by David F. Heroy, Esq., and Erin E. Broderick, Esq., at Baker & McKenzie LLP. No creditor's committee has been appointed in the case. No trustee has been appointed. OVERSEAS SHIPHOLDING: Evaluating Options, Including Ch. 11 ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Overseas Shipholding Group Inc., one of the world's largest publicly owned transporters of crude oil and petroleum products, said Oct. 22 that it's evaluating "strategic options," including filing for Chapter 11 bankruptcy reorganization. According to the report, Standard & Poor's said Oct. 22 the New York-based company "is in a liquidity crisis and the risk of default is imminent." The probability of "near-term default" is "very high," S&P said. OSG reported Oct. 22 in a regulatory filing that a review of tax issues led the company to conclude that the last three years' financial statements should no longer be relied upon. While lowering the corporate rating another grade to CCC-, S&P said that the company has potential liquidity because there are no security interests in about 70% of the value of the fleet. The Bloomberg report discloses that OSG's liquidity constraints in part are due to the $1.5 billion bank credit maturing in February that will be replaced with a $900 million facility. OSG reported a $90.1 million net loss and a $41.5 million operating loss for six months ended June 30 on revenue of $583.7 million. For 2011, revenue of $1.05 billion resulted in a $192.9 million net loss and a $120.1 million operating loss. The company, the report relates, operates 112 vessels, of which 67 are owned. Two more will be delivered in 2013, S&P said. OSC lost 62% of its value in Oct. 22 trading, closing at an all-time low of $1.23 on the New York Stock Exchange. The three-year high was $53.13 on May 3, 2010. The $300 million in 8.125% senior unsecured notes due 2018 last traded Oct. 22 for 35 cents on the dollar, to yield 36.325%, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Overseas Shipholding Group, Inc., headquartered in New York City, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OVERSEAS SHIPHOLDING: Block & Leviton Probes Securities Violations ------------------------------------------------------------------ Block & Leviton LLP, a Boston-based law firm representing investors nationwide, is investigating possible securities law violations involving Overseas Shipholding Group Inc. The investigation is related to allegations that certain financial results issued by the Company between May 6, 2009 and Oct. 22, 2012 were knowingly false and misleading when made. On Monday, Oct. 22, 2012, the Company announced that its "Audit Committee of the Board of Directors ..., on the recommendation of management, concluded that the Company's previously issued financial statements for at least the three years ended Dec. 31, 2011 and associated interim periods, and for the fiscal quarters ended March 31 and June 30, 2012, should no longer be relied upon." Similarly, OSG disclosed that "the Company is evaluating its strategic options, including the potential voluntary filing of a petition for relief to reorganize under Chapter 11 of the Bankruptcy Code." On this news, the Company's share price collapsed from $3.25 per share on Oct. 19, 2012 to close at $1.23 per share on Oct. 22, 2012 - a decrease of 63% in a single day on tremendously high volume. Block & Leviton's investigation seeks to determine, among other things, whether OSG or its officers and directors have violated the Securities Exchange Act of 1934 or any other federal securities laws. If you have any information relevant to this investigation, or if you purchased OSG shares between May 6, 2012 and October 22, 2012 and have questions about your legal rights, please contact Steven P. Harte at 617-398-5600 or via email at Steven@blockesq.com. Block & Leviton is a Boston-based law firm representing investors for violations of the securities laws. The firm's attorneys have collectively been prosecuting securities cases on behalf of investors for over 50 years. PATRIOT COAL: Court Extends Lease Decision Period Until Feb. 4 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York extended the deadline within which Patriot Coal Corporation, et al., may assume or reject unexpired leases of nonresidential property by 90 days to Feb. 4, 2013, or such later date as may be agreed in writing between the Debtors and the applicable lessors without the need for further order of the Court. As reported in the TCR on Oct. 12, 2012, the Debtors estimate that, as of the Petition Date, they were party to more than a thousand unexpired leases of nonresidential real property. The Debtors said they have not yet had an opportunity to identify or make final determinations regarding the assumption or rejection of many of the Leases. 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 PHARMACEUTICALS: Cohen Milstein Conducts Probe -------------------------------------------------------- Cohen Milstein Sellers & Toll PLLC is conducting an investigation to determine whether Peregrine Pharmaceuticals, Inc. and certain of its officers and directors made false and misleading statements and/or omissions in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Several class action lawsuits were filed in the U.S. District Court for the Central District of California by other law firms on behalf of purchasers of the common stock of Peregrine Pharmaceuticals, Inc. between July 16, 2012 and Sept. 26, 2012, inclusive. The complaints allege that Peregrine and certain of its officers and directors ("Defendants") misrepresented and/or failed to disclose that: (1) the clinical data from the Company's Phase II trial of bavituximab, one of Peregrine's lead product candidates being developed as a second-line treatment for lung cancer, was unreliable because there were major discrepancies between some patient sample test results and patient treatment code assignments; (2) Peregrine lacked the proper internal controls relating to the conduct of clinical trials; (3) Peregrine lacked sufficient capital to fund its operations for the long term; and (4) as result of the foregoing, Defendants' positive statements about Peregrine's business, operations and prospects, lacked a reasonable basis. On Sept. 24, 2012, shares of Peregrine dropped from $5.39 to $1.16 after the Company informed investors they should no longer rely on clinical data it had previously reported from the Phase II bavituximab trial, because the Company had "discovered major discrepancies between some patient sample test results and patient treatment code assignments." On September 26, Peregrine reported that it had received a written Notice of Default from lenders on the remaining balance of a $30 million term loan indicating that the Company's announcement of major discrepancies in the bavituximab trial constituted a "material adverse change." The price of Peregrine shares dropped further on September 27 to $1.11. Cohen Milstein encourages all investors who purchased Peregrine common stock between July 16, 2012 and Sept. 26, 2012 or former employees with information concerning this matter to contact the firm. If you are a Peregrine shareholder and would like to discuss your right to recover for your economic loss, you may, without any cost or obligation, call Cohen Milstein's Managing Partner, Steven J. Toll at (888) 240-0775 or (202) 408-4600, or email him at stoll@cohenmilstein.com. If you wish to serve as lead plaintiff, you must move the Court no later than Nov. 27, 2012 to request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. To be appointed lead plaintiff, the Court must decide that your claim is typical of the claims of other class members, and that you will adequately represent the class. Your share in any recovery will not be enhanced or diminished by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may retain Cohen Milstein Sellers & Toll PLLC or other attorneys to serve as your counsel in this action, or you may do nothing and remain an absent class member. Cohen Milstein Sellers & Toll PLLC has significant experience in prosecuting investor class actions and actions involving securities fraud. The firm has offices in Washington, D.C., New York, Chicago, Philadelphia and West Palm Beach, and is active in major litigation pending in federal and state courts throughout the nation. The firm's reputation for excellence has repeatedly been recognized by courts which have appointed the firm to lead positions in complex multi-district or consolidated litigation. About Peregrine Financial Peregrine Financial Group Inc. filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 12-27488) on July 10, 2012, disclosing between $500 million and $1 billion of assets, and between $100 million and $500 million of liabilities. Earlier that day, at the behest of the U.S. Commodity Futures Trading Commission, a U.S. district judge appointed a receiver and froze the firm's assets. The firm put itself into bankruptcy liquidation in Chicago later the same day. The CFTC had sued Peregrine, saying that more than $200 million of supposedly segregated customer funds had been "misappropriated." The CFTC case is U.S. Commodity Futures Trading Commission v. Peregrine Financial Group Inc., 12-cv-5383, U.S. District Court, Northern District of Illinois (Chicago). Peregrine's CEO Russell R. Wasendorf Sr. unsuccessfully attempted suicide outside a firm office in Cedar Falls, Iowa, on July 9. The bankruptcy petition was signed in his place by Russell R. Wasendorf Jr., the firm's chief operating officer. The resolution stated that Wasendorf Jr. was given a power of attorney on July 3 to exercise if Wasendorf Sr. became incapacitated. Peregrine Financial is the regulated unit of the brokerage PFGBest. At a quickly-convened hearing on July 13, the bankruptcy judge authorized the Chapter 7 trustee to operate Peregrine's business on a "limited basis" through Sept. 13. PLAINS EXPLORATION: Moody's Rates $2.25-Bil. Senior Notes 'B1' -------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Plains Exploration & Production Company's (PXP) $2.25 billion senior unsecured notes due 2020 and 2023. This rating is also placed under review for downgrade in conjunction with PXP's Ba3 Corporate Family Rating (CFR) and its Ba1 senior secured term loan rating, which remain under review for downgrade. The review was prompted by PXP's September 10, 2012 announcement that it would acquire certain deepwater Gulf of Mexico (GOM) infrastructure and producing assets for $6.1 billion in an all-debt transaction. "This notes offering represents a component of the overall financing requirement for PXP's GOM acquisition," commented Andrew Brooks, Moody's Vice President. "The magnitude of the transaction, its all-debt financing and the transformational aspect this acquisition will have on the operating profile of PXP has prompted Moody's to review all existing ratings for downgrade, a review which we expect to conclude by year-end." Ratings Rationale The review for downgrade will focus on the substantial leveraging impact of this transaction and the subsequent prospects for achieving meaningful debt reduction through asset sales and free cash flow. To fund the acquisition PXP intends to raise up to $7.0 billion of debt financing, which will dramatically leverage its balance sheet with as much as $9.7 billion total debt at year-end 2012. On a pro forma run rate basis, total debt on production will exceed a very high $60,000 per average daily BOE at closing. The previously assigned Ba1 rating to PXP's 7-year term loan and the B2 rating assigned to the unsecured bridge facility, which will be terminated upon the closing of this notes issue, reflects Moody's current expectation that the final outcome of the ratings review is likely to be a one notch downgrade of PXP's CFR to B1. That expectation assumes the company will make rapid progress in the sale of its non-core gas assets, whose proceeds will be allocated to debt reduction, establishing a relationship among the various classes, security interests and amounts of debt, including existing outstanding senior unsecured notes, that will ultimately result in a B1 CFR and a B2 rating for unsecured notes. However, the CFR could be downgraded further than B1 upon completion of Moody's ratings review and therefore the B1 unsecured notes rating remains under review for downgrade consistent with the review of all of PXP's ratings. PXP has agreed to acquire interests in five deepwater GOM oilfields from subsidiaries of BP p.l.c. (BP) together with Shell Offshore Inc.'s (Shell) 50% interest in one of the five for an aggregate $6.1 billion. Two of the properties remain subject to preferential rights of the existing partners. The five fields are producing 67,000 BOE per day (87% crude oil). With the acquisition, PXP's liquids production will approach 90% of total volumes produced in 2013. With several of the acquired fields producing at low levels of capacity, PXP will have to invest significant incremental development capital into the fields and associated infrastructure to achieve expected production gains. Moody's will assess the operational and execution risk of achieving these production gains in the context of the company integrating this very large acquisition into its existing operations. The transaction is effective October 1, 2012, with PXP expecting to close the acquisition by year-end 2012. Strategically, the acquisition is transformational for PXP, which has executed a series of other large transactions, previously re-shaping the company, including its 2010 exit from the shallow water GOM, and acquisitions in the Haynesville (2008) and Eagle Ford (2010) Shales. These transactions supplemented the company's existing long-lived California assets and deepwater GOM Lucius and Phobos developments. The principal methodology used in rating Plains Exploration was the Global Independent Exploration and Production 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. PLAINS EXPLORATION: S&P Rates $2.25-Bil. Unsecured Notes 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' issue-level rating to Plains Exploration & Production Co.'s (PXP) proposed $2.25 billion senior unsecured notes offering. "We also assigned a '6' recovery rating, reflecting our assessment of minimal (0%-10%) recovery in the event of a default. The company intends to use proceeds from the offering to fund part of the purchase price of its pending acquisition of BP's and Shell's interests in certain deepwater Gulf of Mexico properties," S&P said. "The ratings on the notes reflect our assessment that we will likely lower the corporate credit rating on PXP to 'BB-' following the completion of the transaction," S&P said. "Our ratings on Texas-based PXP reflect its participation in the highly cyclical exploration and production (E&P) segment of the oil and gas industry and its historically aggressive capital and acquisition spending. The company's existing ratings remain on CreditWatch with negative implications followed the company's announcement that it intends to acquire BP's and Shell's interests in certain deepwater Gulf of Mexico properties in a debt-financed transaction for $6.1 billion. The acquisition will give PXP interests in the Marlin, Dorado, King, Horn Mountain, Holstein, Diana-Hoover, and Ram Powell fields in the deepwater Gulf of Mexico. We will resolve the CreditWatch placement upon the closing of the acquisitions. If the transaction is completed upon substantially similar terms as those we currently expect, we will lower the corporate credit rating to 'BB-' and assign a negative outlook," S&P said. Ratings List Plains Exploration & Production Co. Corporate credit rating BB/Watch Neg/-- New Rating Plains Exploration & Production Co. $2.25 billion senior unsecured notes B Recovery rating 6 QUALTEQ INC: Ch. 11 Trustee Wants to Incur $5-Mil. DIP Financing ---------------------------------------------------------------- Fred C. Caruso, solely in his capacity as the Chapter 11 trustee in the cases of Qualteq, Inc., et al., asks the U.S. Bankruptcy Court for the Northern District of Illinois for authorization to: a) obtain $5,000,000 asset-based revolving credit facility secured postpetition financing on behalf of three of the Debtors, Fulfillment Xcellence, Inc., Global Card Services, Inc., and Versatile Card Technology, Inc., from The PrivateBank and Trust Company; b) cause Automated Presort Inc., Creative Automation Co., Unique Data Services Inc., Unique Embossing Services, Inc., Unique Mailing Services, Inc., and Vmark, Inc. (the guarantors), and the borrowers to grant (i) superpriority administrative claims for the obligations arising under the postpetition facility, (ii) second priority liens on encumbered assets, and (iii) first priority liens on unencumbered assets, each to secure the postpetition facility and to guaranty the postpetition facility; and c) repay the outstanding obligations under that certain promissory note dated July 26, 2010, and entered into by GCS with Burr Ridge Bank & Trust. The trustee relates that the Financing Term Sheet sets out the proposed facility's material terms, including these provisions: 1. PrivateBank will receive a superpriority claim against each of the borrowers and guarantors. 2. PrivateBank will receive a first lien on all unencumbered assets of the borrowers. Importantly, a portion of the funds will be used to repay the Burr Ridge Note. By repaying the Burr Ridge Note, the receivables available at GCS will increase overall availability under the Facility. 3. PrivateBank will receive a guaranty and grant of security interest from all of the guarantors, including a first priority lien on the guarantors' unencumbered assets. The guaranty was necessary to induce PrivateBank to enter into the financing term sheet and the definitive credit agreement. 4. PrivateBank will receive a junior lien on all encumbered assets at the borrowers and the guarantors. Significantly, PrivateBank's agreement to take junior liens at all entities means that the relief requested herein will not require this Court to prime any existing liens, either consensually or non-consensually. 5. PrivateBank will not receive any liens or a guaranty from Qualteq or the non-operating Debtors, or any of the borrowers' or guarantors' causes of action under Chapter 5 of the Bankruptcy Code. Other terms of the facility include: Borrowers: Fulfillment Xcellence, Inc., Global Card Services, Inc., and Versatile Card Technology, Inc. Lenders The PrivateBank and Trust Company. Use of Proceeds: To (i) provide working capital during the Borrowers' and Guarantors' bankruptcy cases, (ii) fund professional fees and expenses incurred yet unpaid that arose both before and after May 10, 2012, to the extent the fees and expenses are allowed by the Bankruptcy Court, (iii) repay the outstanding obligations arising under that Secured Loan Agreement by and between Global Card Services, Inc. and Burr Ridge Bank & Trust, dated as of July 26, 2010, (as amended from time to time), and (iv) fund certain fees and expenses in connection with the closing of the Facility Revolving Facility. The Facility will be a secured revolving credit facility with a maximum facility amount equal to $5,000,000. Availability: Availability for advances will be limited to the lesser of: (x) 80% of the borrowers' eligible accounts receivable as determined in accordance with the terms of the Postpetition Credit Agreement less $500,000, minus the lesser of (i) 50% of A/R Availability, and (ii) lesser dollar amount as advised by trustee to lender in writing, but in no event less than $1,000,000, minus other reserves as lender may determine in its Permitted Discretion with at least one business day prior written notice; and (y) the facility amount. For the avoidance of doubt, the lender will not take a reserve on account of the carve-out in addition to the carve-out reserve. Maturity Date: The facility will be repaid in full at the earliest of: (i) stated maturity, which will be 6 months from the closing date; (ii) the lender having elected to accelerate the Facility and exercise remedies after prior notice to borrowers and the Committee of the occurrence and continuance of an Event of Default; (iii) the date of substantial consummation of the borrowers' plan of reorganization; (iv) the last termination date set forth in a final order of the Bankruptcy Court approving the Facility, if in effect prior to the date; and (v) the closing of a sale for all or substantially all of the borrowers' assets. Closing/Arrangement Fees: 2% of the facility amount, earned, due, and payable at closing. Collateral Monitoring Fee: $5,000 per month payable to the lender monthly, in arrears, for costs associated with monitoring and evaluation of the collateral and the business. Interest Rate: The facility will bear interest, payable monthly in arrears, at the prime rate plus 300 basis points. About QualTeq Inc. South Plainfield, New Jersey-based QualTeq, Inc., engages in the design, manufacture, and personalization of plastic cards in the United States. The company manufactures magnetic, contact, and dual interface smart cards. Qualteq Inc. and 17 affiliated companies filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on Aug. 14, 2011. Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at Fox Rothschild LLP, serve as local counsel to the Debtors. K&L Gates LLP is the general bankruptcy counsel. Eisneramper LLP is the accountants and financial advisors. Scouler & Company is the restructuring advisors. Lowenstein Sandler PC is counsel to the Committee. Avadamma LLC disclosed $38,491,767 in assets and $36,190,943 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors. Lowenstein Sandler PC represents the Committee. Eisneramper LLP serves as its accountants and financial advisors. As reported in the Troubled Company Reporter on Feb. 23, 2012, Delaware Bankruptcy Judge Kevin J. Carey granted the request of Bank of America, N.A., to transfer the venue of the Chapter 11 cases to the U.S. Bankruptcy Court for the Northern District of Illinois. Fred C. Caruso, the Chapter 11 Trustee, tapped Hilco Real Estate, LLC, as real estate advisors. The Debtors' Third Amended Joint Plan of Reorganization provides that on or after the Confirmation Date, the applicable Debtors or Reorganized Debtors may enter into Restructuring Transactions and may take actions as the Debtors or the Reorganized Debtors determine to be necessary or appropriate to (i) effect a corporate restructuring of their respective businesses; (ii) to simplify the overall corporate structure of the Reorganized Debtors; or (iii) to preserve the value of any available net operating losses and other favorable tax attributes; or (iv) to maximize the value of the Reorganized Debtors, all to the extent not inconsistent with any other terms of the Plan or existing law. RAIN CII: Moody's Reviews 'B1' CFR/PDR for Downgrade ---------------------------------------------------- Moody's Investors Service placed the B1 corporate family and probability of default ratings of Rain CII Carbon LLC (RCC) on review for downgrade. The $400 million B1 rated senior secured notes were also placed on review for downgrade. On Review for Possible Downgrade: Issuer: Rain CII Carbon LLC Probability of Default Rating, Placed on Review for Possible Downgrade, currently B1 Corporate Family Rating, Placed on Review for Possible Downgrade, currently B1 Senior Secured Regular Bond/Debenture, Placed on Review for Possible Downgrade, currently B1 Outlook Actions: Issuer: Rain CII Carbon LLC Outlook, Changed To Rating Under Review From Stable Ratings Rationale The review for downgrade results from the announcement that RCC will acquire Rutgers NV for Euor 702 or approximately $915 million. Rutgers NV is owned by Triton Partners and produces coal tar pitch products for use in the aluminum and steel industries, among others. The acquisition will be largely debt financed and is considered transformational given the increase in debt levels to be incurred, the nature of the business being acquired and the larger size of Rutgers NV. The review will focus on the business being acquired, its customer base and its product pricing and product cost position. The review will also evaluate the earnings and cash flow contribution that will be derived from Rutgers NV, the level of debt with respect to earnings and cash flow generation and the adequacy of debt protection metrics. The liquidity position will also be a focus of the review. The principal methodology used in rating RCC 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. Headquartered in Kingwood, Texas, RCC, a private company, is a wholly owned subsidiary of Rain Commodities Limited (RCCOL), an Indian domiciled calcining company. RCC manufactures and sells calcined petroleum coke for two principal end uses: the production of aluminum and the production of titanium dioxide although the majority of sales are to the aluminum industry. For the twelve months ended June 30, 2012 RCC generated approximately $682 million of revenues. RESIDENTIAL CAPITAL: Ocwen, Walter Win Auction for Servicing Biz ---------------------------------------------------------------- Andrew R. Johnson, writing for Dow Jones Newswires, reports that the partnership of Ocwen Financial Corp. and Walter Investment Management Corp. was named winner Wednesday in an auction for the mortgage-servicing and origination assets of Residential Capital, LLC. Ocwen-Walter tandem's$3 billion bid defeated Nationstar Mortgage Holdings Inc.'s. Dow Jones relates ResCap spokeswoman Susan Fitzpatrick said in an e-mail that ResCap's board has given preliminary approval to the bid. Dow Jones relates that, according to a person familiar with the matter, Nationstar's last bid was about $2.91 billion. In a press statement on Oct. 24, Nationstar said it has decided not to further increase its bid. Nationstar CEO Jay Bray said, "Price matters. Obviously we are disappointed in the outcome of the auction, but in the end our judgment was that the price of the assets would not represent a compelling investment opportunity for us." "Currently, there are many sizeable opportunities in this sector and we are intensely focused on capitalizing on transactions that both grow our franchise and deliver attractive returns to our shareholders." Nationstar's stalking horse designation entitles the company to a break-up fee. The Dow Jones report notes Ocwen's bids had included a $24 million break-up fee it must pay Nationstar as the stalking horse bidder. The Court is slated to hold a hearing Nov. 19 to consider the sale to Ocwen. Dow Jones relates that under Ocwen's joint bidding arrangement, Walter will acquire rights to service the Fannie Mae loans, which accounts for about $50.4 billion in outstanding balances, Ocwen said. The investment firm will also acquire the origination and capital markets platform of ResCap. About 68% of the loans are owned, insured or guaranteed by Freddie Mac, Fannie Mae or Ginnie Mae, according to Ocwen. Dow Jones notes Nationstar and Ocwen were the only two bidders for ResCap's mortgage-servicing and origination platform, which includes the rights to service 2.4 million mortgages that account for $374 billion in unpaid balances. In recent months, the companies have been scooping up mortgage-servicing assets of large banks exiting the business because of new regulations and capital requirements. Dow Jones notes objections to the deal by creditors are possible, which is common in bankruptcy proceedings as stakeholders will want to ensure Ocwen takes on liabilities of ResCap as part of the sale. A second auction for a portfolio of ResCap loans is scheduled to start Thursday at 10 a.m. at the same location. Warren Buffett's Berkshire Hathaway Inc. is the stalking horse bidder in that auction. Dow Jones says Ms. Fitzpatrick declined to say whether other potential buyers are expected to bid. Earlier in ResCap's bankruptcy, Berkshire Hathaway had tried to unseat Nationstar as the stalking horse for the servicing and origination assets but lost in that effort. 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 and 24. The hearing to approve the sales is set for Nov. 19. Fortress Investment Group's Nationstar was to make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. would serve as stalking-horse bidder for the remaining portfolio of mortgages. Based in Lewisville, Texas, Nationstar (NYSE:NSM) services over one million residential mortgages totaling $193 billion in unpaid principal balance. In addition, Nationstar operates an integrated loan origination platform, enabling Nationstar to mitigate servicing portfolio run-off and improve credit performance for loan investors. Nationstar currently employs roughly 4,000 people, entirely based in the United States. 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. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Won't Have Borrower-Homeowner Committee ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that whether Residential Capital LLC should have an official committee representing homeowners was a "very close question," U.S. Bankruptcy Judge Martin Glenn said. He nonetheless concluded in his 16-page opinion Oct. 23 that borrowers hadn't shown another committee is required. According to the report, a lawyer representing 30 homeowners filed papers in late August seeking appointment of an official committee to represent borrowers. Aside from the one homeowner on the creditors' committee, the borrowers contended that everyone else on the panel has interests adverse to homeowners. Rather than the expense attendant to having another official committee where ResCap would pay professional fees, Judge Glenn said he favored an initiative by the creditors' committee to hire special counsel "with expertise in homeowners' foreclosure issues." The report relates that Judge Glenn said the creditors' panel will notify homeowners and borrowers about the availability of the special counsel. Even if there was an official borrower's committee, Glenn said it would be ethically improper for an official group to represent the interests of individual homeowners in disputes with ResCap. The homeowners contend they have claims against ResCap for fraud, violation of state and federal consumer protection laws, civil claims for violation of the Racketeer Influenced and Corrupt Organizations Act, fraudulent foreclosure and servicing misconduct. The Bloomberg report discloses that auctions began Oct. 23, with Fortress Investment Group LLC making 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 $2.1 billion in third-lien 9.625% secured notes due 2015 traded Oct. 23 for 102.75 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 April 2013 traded on Oct. 22 for 27.063 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 and 24. The hearing to approve the sales is set for Nov. 19. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: GMAC to Pay PwC, Pepper Hamilton and Hudson ---------------------------------------------------------------- Residential Capital LLC and its affiliates notified the Court that the Official Committee of Unsecured Creditors has agreed for GMAC Mortgage LLC to pay PricewaterhouseCoopers, LLP, Pepper Hamilton LLP, and Hudson Cook LLP, during the 90 days following entry of interim orders. The Debtors added that the Federal Reserve Bank approved an engagement letter among Residential Capital LLC, GMAC Mortgage, and Grant Thornton, LLP, pursuant to which Grant Thornton will act as the independent validation agent under paragraph 22 of the FRB Consent Order. The Debtors have asked that the Creditors' Committee consent to the Debtors' payment of Grant Thornton -- currently expected to total approximately $4 million -- without the delay and expense of filing an additional motion. The Engagement Letter sets forth the terms of Grant Thornton's engagement, including the requirement for a $1 million retainer, to be paid prior to October 31, 2012. Grant Thornton has agreed to submit monthly fee statements as though it was retained pursuant to Section 327 of the Bankruptcy Code. Likewise, Grant Thornton has agreed that during the pendency of the Debtors' chapter 11 cases, any request for indemnification under the Engagement Letter will be made by application to the Court. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. Following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Wins Interim OK to Hire Hudson Cook -------------------------------------------------------- The Bankruptcy Court issued an interim order authorizing Residential Capital LLC to employ Hudson Cook, LLP, as special counsel. The final hearing to consider approval of the application is scheduled for Jan. 14, 2013. Hudson Cook began representing Debtor GMAC Mortgage, LLC, and Ally Financial Inc. in connection with a review of foreclosure and loan files in June 2011, focusing on four operational Foreclosure Review "workstreams." Since that time, Hudson Cook has been instrumental in providing legal advice and assistance to PricewaterhouseCoopers LLP with respect to the Foreclosure Review, the Debtors tell the Court. In the course of that work, the Debtors note, Hudson Cook has developed significant familiarity with the issues specific to the Foreclosure Review. The Debtors seek the Court's authority to employ Hudson Cook, nunc pro tunc to May 14, 2012, for the firm to continue its Foreclosure Review services. Hudson Cook is providing legal assistance in connection with PwC's review of loan files. Hudson Cook will be paid a monthly pay of the greater of $50,000 and the dollar value of the time billed at the firm's rates. The firm's hourly rates range from $400 to $665 for partners; $240 to $375 for associates; and $185 to $230 for legal assistants. The firm will also be reimbursed for any out-of-pocket expenses it incurs. Dana Frederick Clarke, a partner at Hudson Cook, LLP, assures the Court that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. Ms. Clarke discloses that as of the Petition Date, Hudson Cook holds a prepetition claim for approximately $131,454 for services rendered on behalf of GMAC Mortgage and AFI. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. Following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Pepper Hamilton Hiring Has Interim Approval ---------------------------------------------------------------- The Bankruptcy Court issued an interim order authorizing Residential Capital to employ Pepper Hamilton LLP as special foreclosure review counsel for bankruptcy issues. The final hearing to consider approval of the application is set for Jan. 14, 2013. Pepper Hamilton partner Gary Apfel, Esq., began representing Debtor GMAC Mortgage, LLC, and Ally Financial Inc. in connection with the Foreclosure Review in October 2011. Since that time, Mr. Apfel has been instrumental in providing legal advice and assistance to the independent consultant with respect to the bankruptcy workstream, the Debtors tell the Court. Pepper Hamilton will work with PricewaterhouseCoopers LLP to continue developing and refining the processes for the Foreclosure Review, and provide legal advice and assistance to PwC in connection with bankruptcy issues related to the Foreclosure Review. Pepper Hamilton will be paid according to its hourly rates of $675 to $850 for partners, $235 to $500 for associates, and $210 to $220 for paraprofessionals. Pepper Hamilton will also be reimbursed for any out-of-pocket expenses it incurs. Robert S. Hertzberg, Esq., a partner at Pepper Hamilton LLP, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors or their estates. Mr. Hertzberg discloses that as of the Petition Date, Pepper Hamilton holds a prepetition claim for approximately $23,524 for services rendered on behalf of GMAC Mortgage and AFI. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap is selling its mortgage origination and servicing businesses and its legacy portfolio, consisting mainly of mortgage loans and other residual financial assets. At the onset of the bankruptcy case, ResCap struck a deal with Nationstar Mortgage LLC for the mortgage origination and servicing businesses, and with Ally Financial for the legacy portfolio. Together, the asset sales are expected to generate roughly $4 billion in proceeds. Following a hearing in June, the bankruptcy judge scheduled auctions for Oct. 23. A hearing to approve the sales was set for Nov. 5. Fortress Investment Group LLC will make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. will serve as stalking-horse bidder for the remaining portfolio of mortgages. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Fights Chapter 7 Liquidation Bid ----------------------------------------------------- Residential Capital LLC, GMAC Mortgage LLC, and the official committee of unsecured creditors appointed in their Chapter 11 cases are asking the Bankruptcy Court to toss out the request of Paul N. Papas II for conversion of the two Debtors' Chapter 11 cases to a liquidation under Chapter 7 of the Bankruptcy Code. Mr. Papas accuses the Debtors of bad faith and misconduct. Converting the cases to Chapter 7 would allow the Court to have more control over the Debtors so that it could better determine whether the Debtors have assets and liabilities, Mr. Papas asserts. He adds that there are several issues of fraud committed by the Debtors. The Debtors and the Committee contend Mr. Papas has not provided any legal or factual support for his request. The Committee asserts that Mr. Papas has not sustained his burden to show "cause" exists to convert these cases to Chapter 7. At this time, conversion to Chapter 7 is not in the best interest of the Debtors' estates, the Committee argues. 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). RFSC INTERNATIONAL: In Voluntary Liquidation Proceedings in the UK ------------------------------------------------------------------ In Residential Capital LLC's Chapter 11 case, KPMG LLP filed with the U.S. Bankruptcy Court a supplemental declaration disclosing that the United Kingdom member firm of KPMG International, which is also named KPMG LLP, has been engaged to assist the directors of On:Line Finance Ltd., RFSC International Ltd., RFC Investments Ltd., Guardian Auto Receivables Depository Limited and GMAC Leasing (U.K.) Limited -- the "UK Non-Debtor Entities" -- to place those companies into members' voluntary liquidation and for named partners of KPMG UK to act as the liquidators of the UK Non-Debtor Entities. KPMG LLP provides U.S. Bankruptcy Court-sanctioned tax compliance and information technology advisory services to ResCap. James W. McAveeney, a principal at KPMG LLP, relates that each of the UK Non-Debtor Entities is a non-Debtor indirect subsidiary of the Debtors' parent, Ally Financial Inc. He assures the Court that the UK Liquidation Proceedings are wholly unrelated to the Debtors' Chapter 11 cases, and there are no outstanding intercompany claims between any of the UK Non-Debtor Entities and any of the Debtors that could result in one or more of the UK Non- Debtor Entities being adverse to one or more of the Debtors. 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). RG STEEL: Inks Stipulation Granting AFCO Credit Relief From Stay ---------------------------------------------------------------- WP Steel Venture LLC, et al., and AFCO Credit Corporation ask the U.S. Bankruptcy Court for the District of Delaware to approve the stipulation by and between AFCO and the Debtors granting AFCO relief from the automatic stay to permit AFCO to immediately exercise its rights, consistent with the stipulation, under that certain Commercial Premium Finance Agreement (the "PFA") and applicable state law, including without limitation, cancelling (to the extent that cancellation of the Policies has not yet occurred) the Policies other than the Retained Policies, collecting the Collateral and applying it to the Remaining AFCO Amount. AFCO is an insurance premium finance company and acts as a lending institution, financing insurance premiums for insureds. AFCO and RG Steel, LLC, one of the Debtors, are parties to the PFA, whereby AFCO financed the insurance policies identified on the PFA (the "Policies"). The amount financed under the PFA was $10,995,031.37. According to papers filed with the Court, due to the sale of the majority of the Debtors' assets over the past several months and the Debtors' significantly reduced workforce and operations, the Debtors have determined that they no longer need to maintain any of the Policies other than these policies: (i) Policy No. G25039300 002 (Westchester Fire Ins. Co. Inc.)(D&O), (ii) Policy No. MNN759549/01/2012 (Axis Insurance Company) (EPL), and (iii) Policy No. G25039300 002 (Westchester Fire Ins. Co. Inc.) (Fiduciary). The Debtors, with the assistance of their insurance brokers, have canceled or are in the process of canceling all of the Policies other than the Retained Policies, effective as of early October 2012. As a result of such cancellations, the Debtors have determined not to make any further monthly payments under the PFA. In sum, the Debtors desire to cease making monthly payments under the PFA, cancel all of the Policies other than the Retained Policies, and permit AFCO to exercise its rights with respect to the Collateral. To that end, the Debtors and AFCO have negotiated the Stipulation, that generally provides: 1. The parties agree that the outstanding balance owed by the Debtors to AFCO under the PFA is $4,943,110; provided, however that AFCO will apply the Retained Policies Amount to the Remaining AFCO Amount and AFCO will pay the Debtors for any Surplus as set forth in the Stipulation. 2. Any money AFCO receives with respect to the Collateral will be credited to the Remaining AFCO Amount with any surplus paid over to the Debtors within 10 business days after the receipt of such money. All parties' rights, claims and objections with respect to the Surplus received by the Debtors are preserved. 3. Within two business days after the entry of the order approving the Stipulation, the Debtors will pay to AFCO in immediately available funds the amount of $79,530. AFCO will apply the Retained Policies Amount to the Remaining AFCO Amount. 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 its financial advisor. RG STEEL: Asks Court's OK to Sell 100,000 Net Tons of Iron Pellets ------------------------------------------------------------------ WP Steel Venture LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to sell approximately 100,000 net tons of acid iron pellets owned by Debtor RG Steel Warren, LLC, to ArcelorMittal Burns Harbor LLC for a purchase price of $5,590,000 (subject to adjustment based on final net tonnage of Iron Pellets delivered). The Debtors have sold substantially all of the assets that were used in connection with their former operations in Warren, Ohio, except for inventory and certain other excluded assets, to CJ Betters Enterprises, Inc. Among the assets excluded from such sale were the Iron Pellets. According to papers filed with the Court, as the Debtors have wound down their operations and have discontinued steelmaking operations, they have no further use for the Iron Pellets. The Debtors believe the proposed sale of the Iron Pellets constitutes a sale of estate property in the ordinary course of business, such that the Debtors are authorized to consummate such sale without further order of this Court. "Nevertheless, out of an abundance of caution, and at the request of AM, the Debtors seek confirmation of their authority to consummate the sale of the Iron Pellets to AM. Further, AM has insisted, and the Debtors hereby request that the sale of the Iron Pellets be, free and clear of all liens, claims, interests and encumbrances. The agent for the Debtors' prepetition first lien and second lien secured lenders, Renco, and Pinney Dock and Transport LLC, the only known holders of liens or security interests in the Iron Pellets, have been notified of the Debtors' intent to sell the Iron Pellets and have not raised any objection thereto as of the filing of this Motion. In addition, to the extent that any party with a lien, claim, or interest in, or encumbrance on, the Iron Pellets has not consented to the proposed sale of such pellets, the Debtors assert that such party could be compelled, in a legal or equitable proceeding, to accept a money satisfaction of its interests, if any, in the Iron Pellets. The Debtors have also sought the entry of an order (i) shortening notice of the hearing on the Sale Motion so that the foregoing Sale Motion can be heard at the hearing scheduled for Oct. 29, 2012, at 3:00 p.m., and (ii) setting a deadline of Oct. 26, 2012. at 4:00 p.m. for the filing and service of responses or objections to the Sale Motion. 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 its financial advisor. RG STEEL: Deals Resolving Bids to Vacate Sale Order Resolved ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware entered an order entered resolving motions to modify, vacate, and for relief from certain order authorizing and approving WP Steel Venture LLC, at al.'s sale of Sparrows Point Assets. On Aug. 7, 2012, Oxbow Carbon & Mineral LLC, et al., objected to the Debtor's sale of Sparrows Point' assets to Environmental Liability Transfer, Inc., Commercial Development Company, Inc., Sparrows Point L.L.C., HRE Sparrows Point, LLC, pursuant to the asset purchase agreement dated Aug. 7, 2012. The movants raised concerns over time allotted for the removal of their respective property from the owned real property and determination of property rights in the event each of the property is not timely removed. The Court ordered that, among other things: 1. The movants' access to the owned real property and the time periods upon which their respective property may remain at the owned real property will be governed by the respective temporary access agreements and the temporary access agreements will supersede any such deadlines set forth in the sale order; and 2. Notwithstanding anything on the contrary, upon the execution of their respective temporary access agreements, the movants will not be deemed to abandon or surrender their respective property as a result of the property remaining at the owned real property absent further order of the Court. 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 its financial advisor. RIVER CANYON: National Valuation Approved as Appraiser ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Colorado authorized River Canyon Real Estate Investments, LLC, to employ National Valuation Consultants, Inc., as appraiser. NVC is expected to provide an opinion of the "as is" market value of the Golf Club and the 166 lots at Ravenna that are owned by the Debtor, utilizing accepted appraisal techniques and methodology in conformance with the Standards and Code of Professional Ethics of the Appraisal Institute and the requirements and guidelines of the Uniform Standards of Professional Appraisal Practice. According to the Debtor, a current appraisal of the Golf Club and lots at Ravenna will allow the Debtor to address the issues of valuation of the property, any replacement liens on such property, and the Debtor's reorganization efforts herein. The Debtor proposes to pay NVC a flat fee of $17,000. The Debtor believes the fee is reasonable in light of the scope of services to be provided and is consistent with the fees charged by other appraisers for similar services. In the event that Mr. Morrison is called as an expert witness in the case, he will bill at an hourly rate of $350. To the best of the Debtor's knowledge, NVC has no interest materially adverse to any creditor of the Debtor, nor to any other party-in-interest About River Canyon River Canyon Real Estate Investments, LLC, is the developer of the Ravenna residential real estate project in Douglas County, Colorado and the owner of The Golf Club at Ravenna, among other assets. River Canyon filed a Chapter 11 petition (Bankr. D. Colo. Case No. 12-20763) on May 23, 2012, in Denver as part of its settlement negotiations with lender Beal Bank Nevada, and to preserve the value of its assets. At Beal Bank's behest, Cordes & Company was named, effective Oct. 15, 2010, as receiver for the 643-acre real estate development with golf course in Douglas County, Colorado. The Debtor disclosed assets of $19.7 million and liabilities of $45.3 million in its schedules. The property and golf course are estimated to be worth $11 million, and secures a $45 million debt. Judge Elizabeth E. Brown presides over the case. The Debtor is represented by Sender & Wasserman, P.C., as its Chapter 11 counsel. Alan Klein, Glenn Jacks, Dan Hudick, and Bill Hudick own most of the Debtor. Mr. Jacks, which has a 12.8% membership interest, signed the Chapter 11 petition. Richard A. Wieland, the U.S. Trustee for Region 19, was unable to form an official committee of unsecured creditors because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. ROYAL BANK: Fitch Views Sale Deal as Neutral to Ratings ------------------------------------------------------- Fitch Ratings views Royal Bank of Canada's (RBC; 'AA/F1+') announced agreement to buy the auto finance and deposit business of Ally Credit Canada Ltd. (Ally Canada) and ResMor Trust Company, the Canadian auto finance business of Ally Financial, Inc. ('BB- /B') as neutral to RBC's ratings. In Fitch's opinion, the acquisition fits with RBC's Canadian consumer banking strategy and is manageable in size, relative to RBC's overall capital base and Canadian franchise. RBC has agreed to pay $3.1 billion to $3.8 billion in cash for Ally Canada's auto finance origination platform and sales force, and Canadian auto finance receivables of approximately $9 billion in the first 12 months following closing in the first quarter 2013 (1Q'13). RBC is not acquiring leases, nor is it acquiring any insurance assets as part of this transaction. The actual purchase price will depend on the dividend taken by Ally Canada prior to closing and will include $600 million of goodwill and intangibles. Excess capital at Ally Canada decreases RBC's net investment to approximately $1.4 billion. The transaction is expected to reduce Tier 1 capital ratio (Basel II) by approximately 60 basis points (bps) and Basel III Common Equity Tier 1 ratio by approximately 40 bps at closing, on a pro forma basis as of 3Q'12. The transaction is expected to be accretive to earnings with expected profits of $120 million in the first 12 months after closing and before transaction-related costs of approximately $50 million. This acquisition will raise RBC's Canadian auto finance receivables to approximately $24 billion, thereby strengthening RBC's market position in line with its leading consumer banking strategy in Canada. RBC will integrate Ally Canada's auto finance operations into its existing Canadian banking segment to generate operating efficiencies and cross-sell opportunities to provide full banking services to customers and auto dealerships. Earnings could also benefit from a shift to support future originations with RBC's comparatively lower funding base, including its stable and cost-effective core deposits. Overall, Canadian auto loans have performed well as an asset class through the cycle. However, future performance warrants close monitoring considering record levels of household debt in Canada. Furthermore, auto financing is a competitive business as it is an attractive market for a number of lenders. Although RBC has entered a subvention agreement with GM Canada, GM itself could also look to increase its share of the Canadian auto financing market. SAAB CARS: Has November Plan Disclosure Hearing ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Saab Cars North America Inc., the U.S. unit of bankrupt Swedish automaker Saab Automobile AB, filed a disclosure statement telling unsecured creditors with $77 million in claims why they might receive from 7% to 58.5% from the bankruptcy begun in January. According to the report, the disclosure statement explains the liquidating Chapter 11 plan filed last week. A Nov. 16 hearing is scheduled for approval of disclosure materials. Creditors are told their eventual recovery depends on success in either knocking out, reducing or subordinating the parent's claims, which total about $50 million. The report notes that a Sept. 30 balance sheet among the disclosure material shows the U.S. company as having $26.5 million cash. The Swedish parent set up a new subsidiary to take over the distribution of parts in the U.S. The parent filed for bankruptcy in Sweden in December after running out of cash. About Saab Cars N.A. More than 40 U.S.-based Saab dealerships have signed an involuntary chapter 11 bankruptcy petition for Saab Cars North America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30, 2012. The petitioners, represented by Wilk Auslander LLP, assert claims totaling $1.2 million on account of "unpaid warranty and incentive reimbursement and related obligations" and/or "parts and warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia Gentile & Associates, in New York, signed the Chapter 11 petition on behalf of the dealers. Donlin, Recano & Company, Inc. (DRC), has been retained to provide claims and noticing agent services to Saab Cars North America, Inc. in its Chapter 11 case. The dealers want the vehicle inventory and the parts business to be sold, free of liens from Ally Financial Inc. and Caterpillar Inc., and "to have an appropriate forum to address the claims of the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg News. Saab Cars N.A. is the U.S. sales and distribution unit of Swedish car maker Saab Automobile AB. Saab Cars N.A. named in December an outside administrator, McTevia & Associates, to run the company as part of a plan to avoid immediate liquidation following its parent company's bankruptcy filing. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy on Dec. 19, 2011, after running out of cash. On Feb. 24, 2012, the Court, inconsideration of the petition filed on Jan. 30, 2012, granted Saab Cars North America, Inc., relief under Chapter 11 of the Bankruptcy Code. On March 9, 2012, the U.S. Trustee formed an official Committee of Unsecured Creditors and appointed these members: Peter Mueller Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander LLP as general bankruptcy counsel, and Polsinelli Shughart as its Delaware counsel. SATCON TECHNOLOGY: Can Employ Epiq as Claims and Noticing Agent --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Satcon Technology Corporation, et al., to employ Epiq Bankruptcy Solutions, LLC, as claims and noticing agent in the Debtors' bankruptcy cases, nunc pro tunc to the Petition Date. Epiq will assume full responsibility for the distribution of notices and the maintenance, processing and docketing of proofs of claim filed in the Debtors' cases. Prior to the Petition Date, the Debtors provided Epiq a retainer in the amount of $15,000. Epiq will hold the retainer under the Retention Agreement as security for the payment of fees and expenses incurred under the Retention Agreement. Epiq represents, among other things, that it is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code with respect to the matters upon which it is to be engaged. As compensation for its services, Epiq will charge the Debtors the rates set forth in the Retention Agreement, a copy of which is available at http://bankrupt.com/misc/satcon.doc9exhibitb.pdf About SatCon Technology Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- and its wholly owned subsidiaries provide utility-grade power conversion solutions for the renewable energy market, primarily for large-scale commercial and utility- scale solar photovoltaic markets. Satcon Technology Corporation, along with six related entities, filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on Oct. 17, 2012. Satcon disclosed assets of $92.3 million and liabilities totaling $121.9 million. Liabilities include $13.5 million in secured debt owing to Silicon Valley Bank. There is another $6.5 million in secured subordinated debt. Unsecured liabilities include $16 million on subordinated notes. The Hon. Kevin Gross presides over the case. Dennis A. Meloro, Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser Milner Casgrain LLP acts as the general Canadian counsel. Lazard Middle Market LLC serves as the Debtors' financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and noticing agent. SATCON TECHNOLOGY: Meeting to Form Creditors' Panel on Oct. 30 -------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on Oct. 30, 2012, at 10:30 am in the bankruptcy case of Satcon Technology Corporation, et al. The meeting will be held at: DoubleTree Hotel Wilmington 700 North King Street, Salon D 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. About SatCon Technology Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- is a developer and manufacturer of electronics and motors for the Alternative Energy, Hybrid-Electric Vehicle, Grid Support, High Reliability Electronics and Advanced Power Technology markets. Satcon Technology Corporation, along with six related entities, filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on Oct. 17, 2012. Satcon disclosed assets of $92.3 million and liabilities totaling $121.9 million. Liabilities include $13.5 million in secured debt owing to Silicon Valley Bank. There is another $6.5 million in secured subordinated debt. Unsecured liabilities include $16 million on subordinated notes. The Hon. Kevin Gross presides over the case. Dennis A. Meloro, Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser Milner Casgrain LLP acts as the general Canadian counsel. Lazard Middle Market LLC serves as the Debtors' financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and noticing agent. SATCON TECHNOLOGY: Procedures for Trading in Common Stock OK'd -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has approved, on an interim basis, the motion of Satcon Technology Corporation, et al., for the entry of an order establishing notification and hearing procedures that must be satisfied before certain transfers of common stock in Satcon Technology Corporation, or of any beneficial interest therein, including options and warrants to acquire such stock, are deemed effective. Any purchase, sale, or other transfer of the Common Stock in violation of the procedures will be null and void ab initio. The Debtors in their motion said the procedures for trading in common stock are necessary to protect and preserve the Debtors' valuable Tax Attributes, including net operating loss carryforwards and certain other tax and business creditors. STC's common stock is publicly traded on The NASDAQ Capital Market with 18,043,572 shares issued and outstanding as of Oct. 12, 2012. The NOLs are valuable because they may be used to offset other taxable income, while the Tax Credits may be used as a dollar-for- dollar offset against taxes owed. The Debtors stated: "While the value of these tax attributes is contingent upon whether the Debtors will have sufficient taxable income to use the Tax Attributes before they expire, they could translate into potential future tax savings for the Debtors. Thus, the Debtors' Tax Attributes are an extremely valuable asset of their estates, whose availability will potentially facilitate the Debtors' successful reorganization and serve to improve creditor recoveries." These procedures for trading in common stock are approved: 1. Any entity or person that currently is or becomes a Substantial Shareholder must file with the Court, and serve upon counsel to the Debtors, a declaration of such status or before the later of (i) 40 days after the date of the Notice of Order and (ii) 10 days after becoming a Substantial Shareholder. 2. Prior to effectuating any transfer of Beneficial Ownership of Common Stock that would result in an increase in the amount of Common Stock of which a Substantial Shareholder has Beneficial Ownership or would result in an entity or person becoming a Substantial Shareholder, such Substantial Shareholder or potential Substantial Shareholder must file with the Court, and serve upon counsel to the Debtors, an advance written declaration of the intended transfer of Common Stock. 3. Prior to effectuating any transfer of Beneficial Ownership of Common Stock that would result in a decrease in the amount of Common Stock of which a Substantial Shareholder has Beneficial Ownership or would result in an entity or person ceasing to be a Substantial Shareholder, such Substantial Shareholder must file with the Court, and serve upon counsel to the Debtors, an advance written declaration of the intended transfer of Common Stock. 4. The Debtors will have 21 calendar days after receipt of a Declaration of Proposed Transfer to file with the Court and serve on such Substantial Shareholder or potential Substantial Shareholder an objection to any proposed transfer of Beneficial Ownership of Common Stock. If the Debtors file an objection, such transaction would not be effective unless such objection is withdrawn by the Debtors or such transaction is approved by a final order of the Court that becomes nonappealable. 5. For purposes of these procedures, a "Substantial Shareholder" is any entity or person that has Beneficial Interest of at least 850,000 shares of Common Stock (representing approximately 4.7% of all issued and outstanding shares. A hearing to consider the motion, on a final basis, will be held on Nov. 6, 2012, at 2:00 p.m. Any response or objection to the final relief sought in the motion must be filed no later than Nov. 1, 2012, at 4:00 p.m. About SatCon Technology Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- and its wholly owned subsidiaries provide utility-grade power conversion solutions for the renewable energy market, primarily for large-scale commercial and utility- scale solar photovoltaic markets. Satcon Technology Corporation, along with six related entities, filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on Oct. 17, 2012. Satcon disclosed assets of $92.3 million and liabilities totaling $121.9 million. Liabilities include $13.5 million in secured debt owing to Silicon Valley Bank. There is another $6.5 million in secured subordinated debt. Unsecured liabilities include $16 million on subordinated notes. The Hon. Kevin Gross presides over the case. Dennis A. Meloro, Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser Milner Casgrain LLP acts as the general Canadian counsel. Lazard Middle Market LLC serves as the Debtors' financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and noticing agent. SATCON TECHNOLOGY: Debtors' Representative in Any Foreign Country ----------------------------------------------------------------- The U.S. Bankruptcy Court authorized Satcon Technology Corporation to act as the foreign representative on behalf of the Debtors' estates in any foreign county, including without limitation, Canada, China, and the Czech Republic, and in particular in ancillary proceedings in Canada. Satcon Power Systems Canada, Ltd., operates in Canada, Satcon Technology (Shenzhen) Co., Ltd., operates in China, and Satcon International, s.r.o. operates in the Czech Republic. STC intends to seek emergency ancillary relief in Canada on behalf of all Debtors, pursuant to Part IV of the Companies' Creditors Arrangement Act (Canada) R.S.C. 1985, c. C-36 as amended in the Ontario Superior Court of Justice (Commercial List). The purpose of the ancillary proceeding is to request that the Canadian Court recognize the Debtors' Chapter 11 cases as a "foreign main proceeding" under the applicable provisions of the CCAA in order to, among other things, protect the Debtors' assets and operations in Canada. The Debtors currently do not intend to seek recognition in China or the Czech Republic. About SatCon Technology Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- and its wholly owned subsidiaries provide utility-grade power conversion solutions for the renewable energy market, primarily for large-scale commercial and utility- scale solar photovoltaic markets. Satcon Technology Corporation, along with six related entities, filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on Oct. 17, 2012. Satcon disclosed assets of $92.3 million and liabilities totaling $121.9 million. Liabilities include $13.5 million in secured debt owing to Silicon Valley Bank. There is another $6.5 million in secured subordinated debt. Unsecured liabilities include $16 million on subordinated notes. The Hon. Kevin Gross presides over the case. Dennis A. Meloro, Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser Milner Casgrain LLP acts as the general Canadian counsel. Lazard Middle Market LLC serves as the Debtors' financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and noticing agent. SATCON TECHNOLOGY: Has Interim OK to Use Cash Collateral to Nov. 6 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has granted Satcon Technology Corporation, et al., interim authorization to continue their use of cash collateral in which Silicon Valley Bank and the Subordinated Secured Creditors assert an interest, during the period from the Petition Date through and including 5:00 p.m. on Nov. 6, 2012, solely on the terms, for the purposes, and the amounts set forth in the Interim Budget. As of Oct. 16, 2012, the Debtors are liable to the Senior Secured Creditor under the Senior Pre-Petition Loan Documents in the approximate amount of $14,536,165.05, plus accrued interest in the approximate amount of $88,896.89 and other fees, cost and expenses in the approximate amount of $100,000. As of the Petition Date, the Debtors owed the Subordinated Secured Creditors approximately $6.5 million in principal under the Subordinated Loan Documents. As adequate protection, the Senior Secured Credit is granted replacement liens in all of the Debtors' prepetition and postpetition assets as well as the products and proceeds. As adequate protection, the Subordinated Secured Creditors are granted replacement liens in all of the Post-Petition Collateral, which liens will be subordinated in priority to the Senior Adequate Protection Lien to the same extent provided in the Subordination Agreements. The foregoing Adequate Protection Liens will be subject, however, to the Carve-Out for the fees and expenses of the Professionals retained by the Debtors and any duly appointed committee in the Debtors' cases, and a carve-out for any quarterly or other fees payable to the U.S. Trustee. Such Adequate Protection Liens, however, will not attach to any claims for relief under Chapter 5 of the Bankruptcy Code or the proceeds thereof (other than claims arising under Section 549 of the Bankruptcy Code), and will not prime any valid, perfected, and non-avoidable pre-petition lien held by, or granted to, any other party. As additional adequate protection, the Debtors are directed and authorized to pay post-petition interest on and after the Petition Date with respect to the Senior Secured Creditor's Claim at the contractual default rate and at the times set forth in the applicable Senior Pre-Petition Loan Documents, subject to the Debtors' 506(b) rights. As additional adequate protection, the Senior Secured Creditor is authorized to apply Excess Cash Collateral, if any, as a permanent, partial principal reduction and payment toward the Senior Secured Creditor's Claim. A final hearing on the use of cash collateral will be held on Nov. 6, 2012, at 2:00 p.m. Responses or objections, if any, to the final relief sought inn the cash collateral motion must be filed no later than Oct. 30, 2012, at 4:00 p.m. As additional adequate protection, the Debtors are directed and authorized to pay each month the post-petition out-of-pocket fees, costs, and expenses incurred by the Senior Secured Creditor during the immediately preceding months. Subject to the Carve-Out and the fees of the U.S. Trustee, if, and to the extent that, the Adequate Protection Liens and the Adequate Protection are insufficient to provide adequate protection to the Senior Secured Creditor and the Subordinated Secured Creditors, each Secured Creditor is granted allowed superpriority claims against the Debtors' estates pursuant ton Section 507(b) of the Bankruptcy Code. About SatCon Technology Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- and its wholly owned subsidiaries provide utility-grade power conversion solutions for the renewable energy market, primarily for large-scale commercial and utility- scale solar photovoltaic markets. Satcon Technology Corporation, along with six related entities, filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on Oct. 17, 2012. Satcon disclosed assets of $92.3 million and liabilities totaling $121.9 million. Liabilities include $13.5 million in secured debt owing to Silicon Valley Bank. There is another $6.5 million in secured subordinated debt. Unsecured liabilities include $16 million on subordinated notes. The Hon. Kevin Gross presides over the case. Dennis A. Meloro, Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser Milner Casgrain LLP acts as the general Canadian counsel. Lazard Middle Market LLC serves as the Debtors' financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and noticing agent. SATCON TECHNOLOGY: Amends List of 30 Largest Unsecured Creditors ---------------------------------------------------------------- Satcon Technology Corporation, et al., filed with the U.S. Bankruptcy Court for the District of Delaware an amended consolidated list of creditors holding 30 largest unsecured claims, disclosing: Name of creditor Nature of Claim Amount ---------------- --------------- ------ Perfect Galaxy International Trade Debt $25,695,573.66 4/F, Sea View Estate 2-8 Watson Road North Point, Hong Kong 200030 Heights Capital Management Convertible Notes $10,000,000.00 101 California St., Suite 3250 San Francisco, CA 94111 Creation Technologies Trade Debt $1,999,295.25 Building 3A, No. 128 Mingxin Rd. W. P.R. of China 213164 Chanzhou Ada International Trade Debt $1,040,210.00 Trade C Rm. 1507 Top Business Center, No. 3 P.R. of China 213022 Artaflex Trade Debt $1,004,266.92 215 Konrad Crescent Markham, Ontario Canada L3R 8T9 Columbia Tech Trade Debt $897,054.57 17 Briden Street Worcester, MA 01605 Zhongxingxin Telecom Equipment Co. Trade Debt $862,541.73 No. 5 Longshan Shenzhen P.R. of China Connect Logistics Inc. Trade Debt $776,635.06 2650 Meadowvale Blvd. Mississauga, Ontario Canada L5N 6M5 Onyx Power Inc. Trade Debt $746,016.00 Dept. CH 19339 Palatine, IL 60055-9339 Cooper Power Systems Trade Debt $646,305.00 P.O. Box 640585 Pittsburgh, IL 15264-0485 Synqor, Inc. Trade Debt $533,333.28 155 Swanson Road Boxborough, MA 01719 Anwerthink Trade Debt $472,976.50 1001 Brickell Bay Drive, 30th Floor Miami, FL 33131 Mara Technologies, Inc. Trade Debt $387,842.06 5680 14th Street Markham, Ontario Canada L3S 3K8 ABB Inc. Trade Debt $372,443.23 Brampton Division Toronto, Ontario Canada M5W 5W4 International Delivery Service Trade Debt $333,068.82 470 Main Street Pawtucket, RI 02860 CV Drydock Avenue LLC Trade Debt $268,646.72 c/o Cargo Ventures Delaware Newark, NJ 07101 Ampower Technology Co., Ltd. Trade Debt $259,948.53 2F, No. 7, Hejiang 2nd Taoyuan County 320 Taiwan Alsoenergy, Inc. Trade Debt $243,980.00 Blue Cross Blue Shield Trade Debt $242,713.37 Wilmerhale Trade Debt $242,427.36 Metalworks, Inc. Trade Debt $237,566.38 Fedex Trade Debt $236,205.60 Tetra Financial Group, L.L.C. Trade Debt $174,102.99 University of Colorado at Boulder Trade Debt $173,977.00 Falcon Electric, Inc. Trade Debt $157,141.24 South Service Trade Debt $154,992.96 Xiamen Faratronic Co., Ltd. Trade Debt $153,687.46 Fastenal (US) Trade Debt $153,021.39 Donguan Kewang Technology Co., Ltd. Trade Debt $150,432.00 Velocity Financial Group Trade Debt $144,013.28 About SatCon Technology Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- and its wholly owned subsidiaries provide utility-grade power conversion solutions for the renewable energy market, primarily for large-scale commercial and utility- scale solar photovoltaic markets. Satcon Technology Corporation, along with six related entities, filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on Oct. 17, 2012. Satcon disclosed assets of $92.3 million and liabilities totaling $121.9 million. Liabilities include $13.5 million in secured debt owing to Silicon Valley Bank. There is another $6.5 million in secured subordinated debt. Unsecured liabilities include $16 million on subordinated notes. The Hon. Kevin Gross presides over the case. Dennis A. Meloro, Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser Milner Casgrain LLP acts as the general Canadian counsel. Lazard Middle Market LLC serves as the Debtors' financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and noticing agent. SF CC INTERMEDIATE: Moody's Assigns 'B3' Corp. Family Rating ------------------------------------------------------------ Moody's Investors Service assigned a B3 corporate family rating and probability of default rating to SF CC Intermediate Holdings, Inc. (SFCC), a special purpose holding company formed to acquire Smart & Final Stores LLC. In addition, Moody's also assigned a Ba2 rating to the company's proposed $150 million ABL revolving credit facility, a B3 rating to the company's proposed $510 million first lien term loan and a Caa2 rating to the company's proposed $210 million second lien term loan. The rating outlook is stable. Concurrently all existing ratings at Smart & Final Holdings Corporation and Smart & Final Stores LLC have been put on review for downgrade and will be withdrawn at the closing of the proposed transaction. Proceeds from the proposed financing along with approximately $287 million in equity from Ares Management (Ares) will be used to acquire Smart & Final Stores LLC and repay existing debt. Upon the closing of the acquisition, the ABL revolver, first lien term loan and the second lien term loan will be contributed and assigned to Smart & Final Stores LLC or its direct parent and thereafter Smart & Final LLC or its direct parent will be the borrower under each of the credit facilities. Ratings are subject to Moody's review of final documentation and the execution of the transaction as proposed. "Although Smart & Final's operating performance continues to demonstrate its ability to compete effectively and maintain margins in a tough economic and competitive business environment this transaction will significantly weaken the company's credit metrics while more than doubling the company's existing funded debt burden" , Moody's Senior Analyst Mickey Chadha stated. Ratings Rationale The B3 Corporate Family Rating of SFCC reflects the company's weak pro forma credit metrics, regional concentration, and challenging geographic and demographic markets. The ratings also recognize the company's adequate liquidity, consistent positive same store sales growth, the potential benefits of the company's diversification efforts and new management initiatives. The following ratings are assigned: SF CC Intermediate Holdings, Inc.: Corporate Family Rating at B3; Probability of Default rating at B3; $150 million guaranteed ABL revolving credit facility expiring 2017 at Ba2 (LGD2, 17%); $510 million guaranteed first lien term loan maturing 2019 at B3 (LGD3, 45%); $210 million guaranteed second lien term loan maturing 2020 at Caa2 (LGD5, 82%). The following ratings are put on review for downgrade and will be withdrawn at the closing of the proposed transaction: Smart & Final Holdings Corporation Corporate Family Rating at B2; Probability of Default Rating at B2. Smart & Final Stores LLC $47 million First Lien Term Loan maturing May 2014 at B2 (LGD 3, 47%); $119 million First Lien Term Loan maturing May 2016 at B2 (LGD 3, 47%); $125 million Asset-Based Revolving Credit Facility maturing June 2016 at Ba1 (LGD 2, 15%); $138 million Second Lien Term Loan maturing November 2016 at B3 (LGD 5, 74%); $2 million Second Lien Term Loan maturing November 2014 at B3 (LGD 5, 74%). SFCC's stable outlook incorporates Moody's expectation that over the next 12-18 months credit metrics will moderately improve driven by the improving economy along with management initiatives focused on price optimization, cost savings and product offerings. The B3 CFR of SFCC could be subject to upward momentum if the company demonstrates sustained and material improvements in liquidity, profitability and operating margins. Quantitatively, an upgrade could be achieved if debt to EBITDA approaches 5.5 times and EBITA to interest is sustained in excess of 1.5 times. The B3 CFR of SFCC could be pressured if there is a material deterioration in liquidity or if operating performance deteriorates as evidenced by sustained decline in same store sales growth and profitability. Ratings could also be downgraded if the company's EBITA to interest approaches 1.1 times or if debt to EBITDA is sustained above 6.5 times for an extended period of time. The principal methodology used in rating SF CC Intermediate Holdings, Inc. was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Smart & Final Stores LLC, is headquartered in Commerce, California, and operates 235 non-membership warehouse club stores serving retail and commercial customers in six western states and northern Mexico under the Smart & Final and Cash & Carry banners. SHILO INN: Court Send Parties to Mediation to Resolve Plan Issues ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California sent Shilo Inn, Seaside Oceanfront, LLC and Onewest Bank, N.A. to mediation with the Honorable Mitchell Goldberg, U.S. Bankruptcy Judge, or other mediator of their mutual choosing, to address Plan of Reorganization confirmation concerns. The Court, having considered the Debtor's First Amended Disclosure Statement describing the proposed Plan of Reorganization dated July 18, 2012, and One West's objection, ordered that before the hearing to confirm the Plan, the Debtor and OWB will participate in mediation. The Court also ordered that the Debtors and OWB must each pay half of the cost (if any exists) of the mediation within 30 days of receipt of an itemization of costs. The Plan of Reorganization As reported in the Troubled Company Reporter on Sept. 12, 2012, the Disclosure Statement provides that OneWest Bank, the secured lender, will receive payments for 30 years -- the first five years will be interest-only-payments and the next 25 years will be fully amortized over 25 years with principal and interest payments. The Debtor said that the July 18 Disclosure Statement will be further amended to provide that OneWest Bank's secured claim is being paid on a 25-year amortization basis instead of 30 years. A prior iteration of the Disclosure Statement was rejected by the bankruptcy judge in May; the Court ordered the Debtor and One West Bank to engage in mediation by July 1. About Shilo Inn, Seaside Oceanfront Based in Portland, Oregon, Shilo Inn, Seaside Oceanfront, LLC, operates the Seaside Hotel, a 113-room hotel situated on 1.37 beautiful acres in Seaside, Oregon, pursuant to a franchise agreement with Shilo Franchise International, LLC. The Hotel is located directly on the beach and is the premier fixture of the Seaside promenade. Shilo Inn Seaside Oceanfront filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-34669) on June 7, 2011. David B. Golubchik, Esq., and J.P. Fritz, Esq., at Levene, Neale, Bender, Yoo & & Brill L.L.P., in Los Angeles, serve as the Debtor's bankruptcy counsel. In its petition, the Debtor estimated assets and debts of $10 million to $50 million. Debtor-affiliates that previously sought Chapter 11 protection are Shilo Inn, Diamond Bar, LLC (Case No. 10-60884) on Nov. 29, 2010; Shilo Inn, Killeen, LLC (Case No. 10-62057) on Dec. 6, 2010; Shilo Inn, Palm Springs, LLC (Case No. 11-26501) on April 13, 2011; and Shilo Inn, Pomona Hilltop, LLC (Case No. 11-26270) on April 14, 2011. On April 3, 2012, the U.S. Bankruptcy Court closed the bankruptcy cases of Shilo Inn, Pomona Hilltop, LLC, and Shilo Inn, Palm Springs, LLC. Shilo Inn, Seaside Oceanfront, LLC reported total scheduled assets of $22,219,762 and total scheduled liabilities of $13,688,451. SKINNY NUTRITIONAL: Inks Standstill Agreement with Trim Capital --------------------------------------------------------------- Skinny Nutritional Corp. has entered into a Standstill Agreement with Trim Capital LLC, under which they will continue discussions regarding the status of, and obligations under, the Securities Purchase Agreement dated June 28, 2012. Under the Purchase Agreement, Trim Capital agreed to purchase an aggregate of $9 million of equity securities of the Company in a private placement transaction, subject to certain conditions. At the first closing, which was completed on June 28, 2012, the Company sold a $1,000,000 senior secured note to Trim Capital and subsequently on Aug. 14, 2012, the Company sold an additional initial senior secured note in the aggregate principal amount of $270,000 which was deemed part of the "Initial Note". The Purchase Agreement provided for a second closing, subject to certain conditions, to be held on or prior to Aug. 28, 2012, which has not occurred. Following the parties' discussions subsequent to Aug. 28, 2012, they have agreed to enter into the Standstill Agreement under which they will have a 60-day period to discuss a plan with respect to the obligations under the Purchase Agreement and the Initial Note. The agreement terminates the prohibition against the Company soliciting alternative transactions and enables the Company to pursue various strategic or financing alternatives in order to address its obligations and to provide for additional working capital. In addition, the Standstill Agreement provides that the parties will refrain from commencing or prosecuting any claims against the other or their respective affiliates during the standstill period. Michael Salaman, chief executive officer of Skinny Nutritional stated, "while we are disappointed with the developments with Trim Capital, we are diligently working on alternative plans to address our Company's capital requirements. The Standstill Agreement provides additional time to develop a plan to finance the Company and revitalize our marketing and distribution efforts." About Skinny Nutritional Bala Cynwyd, Pa.-based Skinny Nutritional Corp. (OTC BB: SKNY.OB) -- http://www.SkinnyWater.com/-- has developed and is marketing a line of enhanced waters, all branded with the name "Skinny Water" that are marketed and distributed primarily to calorie and weight conscious consumers. The Company reported a net loss of $7.66 million in 2011, compared with a net loss of $6.91 million in 2010. In its audit report for the 2011 financial statements, Marcum LLP, in Bala Cynwyd, Pennsylvania, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company had a working capital deficiency of $3.17 million, an accumulated deficit of $45,492,945, stockholders' deficit of $1.74 million and no cash on hand. The Company had net losses of $7.67 million and $6.91 million for the years ended Dec. 31, 2011, and 2010, respectively. Additionally, the Company is currently in arrears under its obligation for the purchase of trademarks. Under the agreement, the seller of the trademarks may choose to exercise their legal rights against the Company's assets, which includes the trademarks. The Company's balance sheet at June 30, 2012, showed $2.92 million in total assets, $6.01 million in total liabilities, all current, and a $3.08 million stockholders' deficit. Bankruptcy Warning On June 28, 2012, the Company and Trim Capital, LLC, entered into a Purchase Agreement relating to a financing transaction for a maximum of $15,000,000 in total proceeds to the Company. Under the Note, the termination of the Purchase Agreement prior to the consummation of the third closing for any reason other than by the Company due to a breach by Trim Capital or its affiliates is an event of default under the Notes, making the Notes become immediately due and payable. "As our cash resources are extremely limited, we do not anticipate having sufficient capital to repay the Notes in such an event. If we cannot repay the Notes when due, the Purchaser, as the holder of the Notes will be able to exercise its rights as a secured party under the Security Agreement and IP Security Agreement, including foreclosure on our assets. As the collateral securing our obligations under the Notes consist of all of our assets, upon an event of default, the Purchaser, as the holder of the Notes, would be in a position to take possession of all of our assets, subject to the rights of our senior lender. Further, we would not have sufficient assets with which to repay our creditors, who in turn would be likely to take action against us to protect their interests. In addition, our suppliers would also be expected to cease doing business with us and we would need to consider seeking protection under applicable bankruptcy laws or cease doing business altogether." SOLAR TRUST: Schedules Dec. 20 Plan Confirmation ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Solar Millennium Inc. sold two of its solar power projects and scheduled a Dec. 20 confirmation hearing for approval of the liquidating Chapter 11 plan. According to the report, the bankruptcy court in Delaware approved disclosure materials Oct. 23 so creditors can begin voting on the plan. Opening the door to completion of the Chapter 11 case, the company sold the two projects under an arrangement that eventually may generate $110 million in value. The plan calls for paying creditors in the order of priority called for in bankruptcy law, taking settlements into consideration. General unsecured creditors with $42.5 million in claims were told to expect a recovery between 14% and 20%. The report relates that NextEra Energy Inc. bought the 1,000- megawatt facility in Blythe, California, in July. In August, Solar Millennium sold the 500-megawatt project under development in Desert Center, California, to BrightSource Energy Inc. for a price that may reach about $30 million, if all contingent payments are made. The report notes that for the larger project, Solar Millennium initially said NextEra would pay $10 million in cash plus as much as an additional $40 million when the project is completed. The company has been unable to sell the 500-megawatt project planned for Amargosa Valley, Nevada. Global Finance Corp. started a lawsuit in bankruptcy court in June contending that Solar Millennium lost its ownership interest in the project by not moving forward with development. About Solar Trust Solar Trust of America LLC, Solar Millennium Inc., and nine affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11136) on April 2, 2012. Solar Trust is a joint venture created by Solar Millennium AG and Ferrostaal AG to develop solar projects at locations in California and Nevada. Located in the "Solar Sun Belt" of the American Southwest, the project sites have extremely high solar radiation levels, and allow the Debtors' projects to harness high levels of solar power generation. Projects include the rights to develop one of the world's largest permitted solar plant facilities with capacity of 1,000 MW in Blythe, California. Two other projects contemplated 500 MW solar power facilities in Desert Center, California and Amargosa Valley, Nevada. Although the Debtors have obtained highly valuable transmission right and permits, each project is only in the developmental phase and does not generate revenue for the Debtors. Ferrostaal ceased providing funding two years ago and SMAG, due to its own deteriorating financial condition, stopped providing funding after December 2011. NextEra Energy Resources LLC committed to provide a postpetition secured credit facility and has expressed an interest in serving as stalking horse purchaser for certain of the Debtors' assets. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. K&L Gates LLP is the special corporate counsel. Ridgecrest Solar Power Project, LLC, and two entities filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 12-11204 to 12-11206) on April 10, 2012. Ridgecrest Solar, et al., are affiliates of Solar Trust of America LLC. STA Development, LLC, one of the debtors that filed for bankruptcy April 2, owns 100% of the interests in Ridgecrest, et al. Ridgecrest Solar Power estimated up to $50,000 in assets and debts. Ridgecrest Solar I, LLC, estimated up to $50,000 in assets and up to $10 million in liabilities. In July 2012, NextEra Energy Inc. received formal authority to buy the unfinished 1,000-megawatt facility in Blythe, California, owned by Solar Millennium Inc. NextEra is paying $10 million in cash plus as much as $40 million when the project is finished. The Delaware Bankruptcy Court also approved selling the 500- megawatt project under development in Desert Center, California, to BrightSource Energy Inc. for a price that may reach about $30 million. SOLYNDRA LLC: Chapter 11 Plan Approved Over IRS Objection --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Solyndra LLC overcame opposition from the Internal Revenue Service and procured the signature of the bankruptcy judge Oct. 22 on a confirmation order approving a Chapter 11 reorganization plan for the liquidating solar-panel maker. According to the report, disagreeing with arguments made by the IRS, U.S. Bankruptcy Judge Mary F. Walrath said in her formal order Oct. 22 that "the principal purpose of the plan is not the avoidance of taxes." The IRS unsuccessfully argued that the plan was principally designed to preserve $1 billion in tax loss carry forwards for use by Solyndra's owners. Judge Walrath gave the IRS 10 days to win a stay from a higher court blocking Solyndra from implementing the plan. The judge said in her order that the plan needs to be consummated soon because the company is "on the verge of running out of financing" and needs "immediate access" to the exit loan facility financing the reorganized company. The report relates that if the IRS doesn't obtain a stay pending appeal, Solyndra presumably will complete the transactions called for in the plan and then argue that any appeal should be dismissed on the theory that the transactions can't be unwound. In addition to objection from the IRS, the U.S. Trustee and the U.S. Energy Department also opposed confirmation. The plan was confirmed using the cramdown process because the Energy Department voted against the plan in the two classes containing government claims. 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. STEREOTAXIS INC: Former Accuray Chairman & CEO Named to Board ------------------------------------------------------------- Stereotaxis, Inc., announced that Euan Thomson has been elected to its Board of Directors. The former President and CEO of Accuray Incorporated, Dr. Thomson, a medical physicist, has nearly 30 years experience in scientific research and strategic business leadership. He assumes the Board seat vacated by Christopher Alafi upon his retirement this year. Committee assignments for Dr. Thomson will be determined at a later date. Dr. Thomson will receive 20,000 restricted stock units and other compensation on the same basis as all other non- management Directors of the Company. "Euan's unique blend of business acumen and medical innovation will be a tremendous asset as we continue to work toward market leadership and profitable growth through leading-edge, robotic solutions to important clinical challenges," said William Mills, Stereotaxis Board Chairman. "He has had outstanding success leading transformational change at Accuray and brings rich insight into securing global clinical adoption of groundbreaking technology." Dr. Thomson holds a Master's in Radiation Physics and a Doctorate in Medical Physics from the University of London. Following his medical physics training, he devoted more than 15 years to research, teaching, clinical practice and administration with the United Kingdom Health Care System. During that time he worked as a consultant, advising companies and hospitals on scientific development, product marketing and management on an international scale. In 1999, Dr. Thomson moved to the U.S. to assume the reins at Photoelectron Corporation, a Boston-based company specializing in miniature x-ray technology for the medical and industrial markets. Dr. Thomson was appointed President and CEO of Accuray, a medical capital equipment company, in 2002. During his 10-year tenure, he grew Accuray from a start-up to a public company with more than 1,000 employees, generating more than $400MM in annual revenue. Dr. Thomson oversaw expansion of distribution channels to include more than 80 countries and development of the patent portfolio to approximately 300 US and foreign patents. Accuray built clinical programs that resulted in treatments to hundreds of thousands of patients worldwide and built an installed base exceeding 600 systems. In 2009, Dr. Thomson was recognized as Ernst and Young "Entrepreneur of the Year" in healthcare for Northern California. He currently serves as the Chair of the American Cancer Society's "CEO's Against Cancer" (California division) and is a Board member of the Hospice of the Valley. Dr. Thomson recently announced his resignation from Accuray, where it is anticipated he will continue to serve as a consultant. "I'm excited to join an accomplished Board of Directors in providing strategic guidance to a company focused on transforming the world of interventional medicine," Dr. Thomson said of his appointment to the Stereotaxis Board. "Stereotaxis is poised for profitability and well positioned for growth in an expanding worldwide market. I look forward to being part of the future of an enterprising organization." About Stereotaxis Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures and markets the Epoch Solution, which is an advanced remote robotic navigation system for use in a hospital's interventional surgical suite, or "interventional lab", that the Company believes revolutionizes the treatment of arrhythmias and coronary artery disease by enabling enhanced safety, efficiency and efficacy for catheter-based, or interventional, procedures. For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis, Missouri, expressed substantial doubt about Stereotaxis' ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. The Company reported a net loss of $32.0 million for 2011, compared with a net loss of $19.9 million for 2010. The Company's balance sheet at June 30, 2012, showed $36.61 million in total assets, $50.09 million in total liabilities and a $13.47 million total stockholders' deficit. STONE ENERGY: Moody's Rates $300-Mil. Sr. Unsecured Notes 'B3' -------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Stone Energy Corporation's proposed $300 million senior unsecured notes due 2022. Stone's other ratings and stable outlook were unchanged. Net proceeds from this note offering will be used to redeem Stone's existing $200 million 6.75% subordinated notes due 2014 through a tender offer process, and towards general corporate purposes. "The new notes will eliminate near term refinancing risks, and upon successful retirement of all of the 2014 notes, the maturity date of Stone's $400 million secured borrowing base facility will automatically extend to April 2015 from September 2014, further enhancing the maturity profile," said Sajjad Alam, Moody's Analyst. "The borrowing base will not be cut despite issuance of an extra $100 million of new notes, however, the borrowing base could be reduced by 30% of any principal amount of the 2014 notes that are not repurchased, repaid, defeased or otherwise retired." Issuer: Stone Energy Corporation Assignment: US$300M Senior Unsecured Regular Bond/Debenture, Assigned B3 US$300M Senior Unsecured Regular Bond/Debenture, Assigned a range of LGD4, 64 % Downgrades: US$375M 8.625% Senior Unsecured Regular Bond/Debenture, Downgraded to a range of LGD4, 64 % from a range of LGD4, 58% Ratings Rationale The new notes will rank equally in right of payment with Stone's existing $375 million 8.625% senior unsecured notes and consequently, they both are rated B3 (LGD4, 64%), one notch below the B2 Corporate Family Rating (CFR) given the substantial size of the priority ranking $400 million secured borrowing base revolving credit facility in the capital structure. The revolver and the notes are guaranteed by Stone's only material subsidiary, Stone Offshore, while the revolver is collateralized by substantially all of Stone's and Stone Offshore's assets. The B2 CFR reflects Stone's growing but limited scale, concentrated Gulf of Mexico assets that are characterized by steep decline rates, short PD (proved developed) reserve life and weak capital productivity, and high cost structure. The rating also considers the significant capital, execution and performance risk involving Stone's growth strategy outside of the shallow waters of the GOM. Stone's ratings are supported by its significant liquids production (46% oil and 7% NGLs in the second quarter 2012), favorable leverage in terms of production ($22,500 per boe) and the potential for future growth and diversification. The stable outlook reflects Stone's improved production visibility and liquidity. Stone has good liquidity which is reflected in Moody's SGL-2 Speculative Grade Liquidity rating. Stone's funds from operations, cash balance and revolver availability should fully cover capital expenditures and working capital requirements through the end of 2013. Proforma for the note offering, the company had roughly $323 million of cash (not counting transaction fees and premium for the tender offer) and $379 million of availability under its $400 million borrowing base revolver, which matures on September 15, 2014 (or, on April 26, 2015 if the notes issued under Stone's 2004 indenture are retired on or before April 15, 2014). There is ample headroom under the financial covenants governing the credit facility and Stone should have unimpeded access to the revolver. The SGL rating is tempered by the exposure of the borrowing base to re-determinations in the event of weaker commodity prices or inadequate reserve replacement. An upgrade would be considered if Stone was able to sustain production above 50,000 boe/day with a significant portion of production coming from onshore areas while maintaining its debt to proved developed reserves below $10 per boe. A negative rating action is unlikely in the near term absent a material decline in production due to weather related or operational issues. The rating could be downgraded if Stone's debt to average daily production exceeds $27,000 per boe or debt to PD reserves climbs above $15 per boe. The principal methodology used in rating Stone was the Global Independent Exploration and Production 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. Stone Energy Corporation, headquartered in Lafayette, Louisiana, is an independent E&P company with primary producing properties located in the conventional shelf of the GOM, the deepwater of the GOM, and the Marcellus Shale in the Appalachia. STONE ENERGY: S&P Rates $300MM Senior Unsecured Notes 'B-' ---------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B-' issue-level rating (one notch below the corporate credit rating) and '5' recovery rating (indicating a modest recovery in the 10% to 30% range) to Lafayette, La.-based Stone Energy Corp.'s proposed $300 million senior unsecured notes due 2022. "We also lowered the rating on Stone's existing senior unsecured notes to 'B-' from 'B' and revised the recovery rating on these notes to '5' from '3'," S&P said. "The lower recovery expectation reflects the increased level of pari passu senior unsecured debt as a result of the proposed note issuance and a lower valuation of the company's reserves in our default scenario. We based our reserve valuation for Stone on a company-provided mid-year 2012 PV10 report using our recovery price deck assumptions of $50 per barrel of West Texas Intermediate crude oil and $3.5 per million BTU of Henry Hub natural gas. As per our recovery criteria, our valuation does not include any positive contribution from Stone's hedged position which is substantially above the recovery price deck," S&P said. "The corporate credit rating and stable outlook on Stone Energy Corp. reflect the company's limited scale, geographic concentration in the mature U.S. Gulf of Mexico shelf region, and relatively high finding and development (F&D) costs compared with its peers. Our rating on Stone also reflects our expectation of continued favorable outlook for crude oil prices, the company's adequate liquidity position, and its healthy credit metrics," S&P said. Ratings List Stone Energy Corp. Corporate credit rating B/Stable/-- New Rating Stone Energy Corp. $300 mil. senior unsecured notes due 2022 B- Recovery rating 5 Rating Lowered To From Senior unsecured note B- B Recovery rating 5 3 T3 MOTION: Due Date of Perry Trebatch Note Extended to Oct. 31 -------------------------------------------------------------- T3 Motion, Inc., and Perry Trebatch, an accredited investor, have agreed to extend the due date of the $250,000 senior secured bridge loan until Oct. 31, 2012. T3 Motion, entered into a Security Purchase Agreement with Perry Trebatch, an accredited investor, on Sept. 14, 2012. In connection with the Agreement, the Company and the Investor also entered into a Secured Promissory Note Agreement and a Security Agreement. Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Investor provided a senior secured bridge loan to the Company in the aggregate principal amount of $250,000. Pursuant to the terms of the Security Agreement, the Loan is secured by all assets of the Company. The Investor delivered net proceeds to the Company in the amount of $250,000. The Note was originally due 7 days following receipt of the net proceeds, or Sept. 21, 2012, but the parties amended the due date of the Note to Sept. 28, 2012, further amended the due date to Oct. 16, 2012. A copy of the Amendment is available at http://is.gd/QqXCQK About T3 Motion Costa Mesa, Calif.-based T3 Motion, Inc., develops and manufactures T3 Series vehicles, which are electric three-wheel stand-up vehicles that are directly targeted to the public safety and private security markets. After auditing the 2011 results, KMJ Corbin & Company LLP, in Costa Mesa, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses and has had negative cash flows from operations since inception, and at Dec. 31, 2011, has an accumulated deficit of $54.9 million. The Company reported a net loss of $5.50 million in 2011, compared with a net loss of $8.32 million in 2010. The Company's balance sheet at June 30, 2012, showed $2.85 million in total assets, $3.31 million in total liabilities and a $451,781 total stockholders' deficit. TIBURON POINTE: Investors' Substantial Contribution Claim Rejected ------------------------------------------------------------------ Chief Judge Thomas L. Saladino denied the second amended application for payment of administrative fees and expenses, filed by Brian Bidne and Dennis and Diane Walker; and the second amended application for payment of administrative fees and expenses, filed by Brian Bidne in the Chapter 11 cases of Tiburon View Apartments, LP, and Tiburon Pointe Apartments, L.L.C. The Applicants assert that their efforts, and the fees and expenses they incurred, provided a substantial contribution and benefit to the estate of each Debtor, including discovery of conversion of funds, appointment of a trustee, prevention of dismissal, prevention of further conversion or wrongful acts, and enhancement of the estate through the settlements reached by the trustee. The Applicants seek to be awarded a total of $58,960.20 in legal fees and $49,375.38 in expenses -- of which $41,333.36 relates to forensic accounting expert expense -- for a total administrative expense claim of $108,335.58. The Applicants propose that 37% of that amount be allocated to the Tiburon View estate and 63% allocated to the Tiburon Pointe estate. Judge Saladino, however, held that the Applicants held equity positions in the Debtors and were acting in their own interest. The two bankruptcy cases involve two adjacent apartment complexes that used the same management company (Fisher Corporation). Many of the limited partners in Tiburon View Apartments were also members of Tiburon Pointe Apartments. The Applicants held equity positions in both properties. Prior to bankruptcy filing, the Applicants had commenced an action in the District Court of Sarpy County, Nebraska, to, among other things, have a receiver appointed for the apartments. They asserted that the management company and its president, Todd Fisher, diverted revenues from the properties, caused the properties to become in default to their lenders, and failed to operate pursuant to the applicable partnership agreement and/or operating agreement. Foreclosure proceedings had also been commenced by secured creditors. The bankruptcy filing stayed the foreclosure and the receivership actions and moved the disputes between the movants and Fisher into the bankruptcy court. During the course of the bankruptcy case, the Applicants objected to virtually every action or proposed action by the Debtors. By September 2010, the Applicants had filed a motion to appoint a Chapter 11 trustee which was settled when the Debtors agreed to hire a new property management company. Subsequently, the properties were sold free and clear of liens and the secured and unsecured creditors were all paid in full. Funds from the sale proceeds remain on hand in both cases to pay administrative expense claims and for distribution to equity interest holders. The funds in the Tiburon View case are $328,310.56 and the funds in the Tiburon Pointe case are $425,006.46. Following the closing of the sale, the United States Trustee filed motions to convert the cases to Chapter 7. In response, the Debtors sought to dismiss their bankruptcy cases. All such motions were resisted and after a hearing, the court denied the Debtors' motions to dismiss and granted the United States Trustee's alternative request for appointment of a Chapter 11 trustee in lieu of conversion to Chapter 7. James A. Overcash was appointed as the Chapter 11 trustee. Thereafter, the Chapter 11 trustee negotiated a settlement between the bankruptcy estates and Fisher Corporation regarding the financial transactions that occurred during the time period when Fisher Corporation was the manager of the apartment complexes. The settlement agreement basically required a monetary payment from Fisher Corporation along with a termination of any ownership interest held by Fisher Corporation in the debtor entities. The Applicants assert that their expenditure of legal fees and expenses resulted in the discovery of the pre-petition conversion of the Debtors' funds, appointment of a trustee who was able to negotiate a beneficial settlement, prevention of dismissal and prevention of further conversion. A few months after filing, the Debtors filed their first disclosure statements and plans. Under those documents, the Debtors indicated they had no present intent to sell the properties as they were almost fully leased and were producing excellent cash flows. Further, the plans provided for a substantial reduction in the ownership interests of Fisher Corporation and, it seems, the Applicants would have retained any claims they have against Fisher Corporation as Fisher was not in bankruptcy. "Would the creditors and equity holders be better off under that plan (or a negotiated settlement version thereof) rather than the ultimate sale and settlement of the Fisher claims negotiated by the trustee? That is impossible to say," Judge Saladino said. According to Judge Saladino, the Applicants' aggressive actions produced a different result than the Debtors had in mind initially, but it was not necessarily beneficial to the estate. "Different" is not necessarily "better." Even the forensic accounting report -- which accounts for more than $40,000.00 of the expenses claimed by applicant -- cannot be said to have provided a benefit to the estate since the trustee said he had not seen it at the time of the settlement. A copy of the Court's Oct. 22, 2012 Order is available at http://is.gd/6MSPd5from Leagle.com. Tiburon Pointe Apartments, L.L.C., based in Omaha, Nebraska, filed for Chapter 11 bankruptcy (Bankr. D. Neb. Case No. 10-81026) on April 8, 2010. Tiburon View Apartments, LP, also in Omaha, filed for Chapter 11 bankruptcy (Bankr. D. Neb. Case No. 10-81025) on the same day. J.P. Sam King, Esq., at McGill, Gotsdiner, Workman & Lepp, P.C., served as counsel to both Debtors. Tiburon Pointe and Tiburon View each estimated $1 million to $10 million in both assets and debts. The petitions were signed by Todd Fisher, General Partner. TIBURON VIEW: Investors' Substantial Contribution Claim Rejected ---------------------------------------------------------------- Chief Judge Thomas L. Saladino denied the second amended application for payment of administrative fees and expenses, filed by Brian Bidne and Dennis and Diane Walker; and the second amended application for payment of administrative fees and expenses, filed by Brian Bidne in the Chapter 11 cases of Tiburon View Apartments, LP, and Tiburon Pointe Apartments, L.L.C. The Applicants assert that their efforts, and the fees and expenses they incurred, provided a substantial contribution and benefit to the estate of each Debtor, including discovery of conversion of funds, appointment of a trustee, prevention of dismissal, prevention of further conversion or wrongful acts, and enhancement of the estate through the settlements reached by the trustee. The Applicants seek to be awarded a total of $58,960.20 in legal fees and $49,375.38 in expenses -- of which $41,333.36 relates to forensic accounting expert expense -- for a total administrative expense claim of $108,335.58. The Applicants propose that 37% of that amount be allocated to the Tiburon View estate and 63% allocated to the Tiburon Pointe estate. Judge Saladino, however, held that the Applicants held equity positions in the Debtors and were acting in their own interest. The two bankruptcy cases involve two adjacent apartment complexes that used the same management company (Fisher Corporation). Many of the limited partners in Tiburon View Apartments were also members of Tiburon Pointe Apartments. The Applicants held equity positions in both properties. Prior to bankruptcy filing, the Applicants had commenced an action in the District Court of Sarpy County, Nebraska, to, among other things, have a receiver appointed for the apartments. They asserted that the management company and its president, Todd Fisher, diverted revenues from the properties, caused the properties to become in default to their lenders, and failed to operate pursuant to the applicable partnership agreement and/or operating agreement. Foreclosure proceedings had also been commenced by secured creditors. The bankruptcy filing stayed the foreclosure and the receivership actions and moved the disputes between the movants and Fisher into the bankruptcy court. During the course of the bankruptcy case, the Applicants objected to virtually every action or proposed action by the Debtors. By September 2010, the Applicants had filed a motion to appoint a Chapter 11 trustee which was settled when the Debtors agreed to hire a new property management company. Subsequently, the properties were sold free and clear of liens and the secured and unsecured creditors were all paid in full. Funds from the sale proceeds remain on hand in both cases to pay administrative expense claims and for distribution to equity interest holders. The funds in the Tiburon View case are $328,310.56 and the funds in the Tiburon Pointe case are $425,006.46. Following the closing of the sale, the United States Trustee filed motions to convert the cases to Chapter 7. In response, the Debtors sought to dismiss their bankruptcy cases. All such motions were resisted and after a hearing, the court denied the Debtors' motions to dismiss and granted the United States Trustee's alternative request for appointment of a Chapter 11 trustee in lieu of conversion to Chapter 7. James A. Overcash was appointed as the Chapter 11 trustee. Thereafter, the Chapter 11 trustee negotiated a settlement between the bankruptcy estates and Fisher Corporation regarding the financial transactions that occurred during the time period when Fisher Corporation was the manager of the apartment complexes. The settlement agreement basically required a monetary payment from Fisher Corporation along with a termination of any ownership interest held by Fisher Corporation in the debtor entities. The Applicants assert that their expenditure of legal fees and expenses resulted in the discovery of the pre-petition conversion of the Debtors' funds, appointment of a trustee who was able to negotiate a beneficial settlement, prevention of dismissal and prevention of further conversion. A few months after filing, the Debtors filed their first disclosure statements and plans. Under those documents, the Debtors indicated they had no present intent to sell the properties as they were almost fully leased and were producing excellent cash flows. Further, the plans provided for a substantial reduction in the ownership interests of Fisher Corporation and, it seems, the Applicants would have retained any claims they have against Fisher Corporation as Fisher was not in bankruptcy. "Would the creditors and equity holders be better off under that plan (or a negotiated settlement version thereof) rather than the ultimate sale and settlement of the Fisher claims negotiated by the trustee? That is impossible to say," Judge Saladino said. According to Judge Saladino, the Applicants' aggressive actions produced a different result than the Debtors had in mind initially, but it was not necessarily beneficial to the estate. "Different" is not necessarily "better." Even the forensic accounting report -- which accounts for more than $40,000.00 of the expenses claimed by applicant -- cannot be said to have provided a benefit to the estate since the trustee said he had not seen it at the time of the settlement. A copy of the Court's Oct. 22, 2012 Order is available at http://is.gd/6MSPd5from Leagle.com. Tiburon Pointe Apartments, L.L.C., based in Omaha, Nebraska, filed for Chapter 11 bankruptcy (Bankr. D. Neb. Case No. 10-81026) on April 8, 2010. Tiburon View Apartments, LP, also in Omaha, filed for Chapter 11 bankruptcy (Bankr. D. Neb. Case No. 10-81025) on the same day. J.P. Sam King, Esq., at McGill, Gotsdiner, Workman & Lepp, P.C., served as counsel to both Debtors. Tiburon Pointe and Tiburon View each estimated $1 million to $10 million in both assets and debts. The petitions were signed by Todd Fisher, General Partner. TRAVELERS INSURANCE: Haskell Sues for Cleanup Coverage ------------------------------------------------------ Stewart Bishop at Bankruptcy Law360 reports that Haskell Properties LLC sued Travelers Insurance Co. and other insurers Friday in New Jersey federal court, arguing that the insurers refused to honor pre-existing contracts for cleanup coverage after Haskell bought environmentally contaminated property from a bankrupt corporation. Haskell argued that its July 2000 purchase of Haskell, N.J. property from General Ceramics Inc., formerly known as National Beryllia Corp., came with insurance policies that were transferred as assets in the sale, which the insurers are now refusing to honor, Bankruptcy Law360 relates. TRIBUNE CO: Seeks Court Approval to Obtain Exit Financing --------------------------------------------------------- Tribune Co. and its affiliated debtors seek approval from the U.S. Bankruptcy Court for the District of Delaware to obtain loans to finance its exit from bankruptcy protection. The loans consist of a senior secured asset-based revolving credit facility of up to $300 million, and a senior secured term loan facility of up to $1.1 billion. The $300 million loan will be provided by Bank of America N.A. and other lenders to fund Tribune's operations after the effectiveness of its restructuring plan. The $1.1 billion loan will be provided by a syndicate of banks and financial institutions arranged by a group led by J.P. Morgan. The $1.1 billion will be used to fund cash distributions to creditors, according to court papers. The terms of the proposed financing are detailed in two letter agreements, which can be accessed without charge at: http://bankrupt.com/misc/Tribune_Letter300MLoan.pdf http://bankrupt.com/misc/Tribune_Letter1BLoan.pdf In connection with the financing, Tribune also asked for court approval to pay certain fees and expenses and furnish indemnities as allowed administrative expenses. On July 23, 2012, the bankruptcy court confirmed Tribune's restructuring plan, which was jointly proposed by the company, the committee of unsecured creditors, Oaktree Capital Management L.P., Angelo, Gordon & Co. L.P., and JPMorgan Chase Bank N.A. The restructuring plan contemplates that the company may, in its discretion, enter into a post-effective date facility. A court hearing to approve the proposed financing is scheduled for November 7. Objections are due by October 31. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. Before it formally emerges from bankruptcy, Tribune must still get approval from the Federal Communications Commission on new broadcast licenses and waivers for overlapping ownership of television stations and newspapers in certain markets. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Proposes Protocol for Senior Noteholder Payments ------------------------------------------------------------ Tribune Co. and its debtor affiliates filed a motion seeking court authority to implement a procedure that would enable senior noteholders to receive payments under their Chapter 11 plan. The restructuring plan, which was approved by the bankruptcy court on July 23, provides that distributions to senior noteholders will be made by means of book-entry exchange through The Depository Trust Co.'s facilities. DTC, however, cannot make distributions to senior noteholders with the same security held by Morgan Stanley Capital Services Inc. without making a distribution to the company. The restructuring plan also requires Tribune to withhold from the distributions the amount of any consideration allocable to the senior noteholder claims held by Morgan Stanley pending a determination of the allowance of those claims. The proposed procedure, if approved by the bankruptcy court, would ensure that Morgan Stanley does not receive payment of its claims until it is determined that they are allowed claims and are entitled to payment. The procedure would also enable senior noteholders to receive distributions contemporaneously with the distributions made to other Tribune creditors, according to J. Kate Stickles, Esq., at Cole, Schotz, Meisel, Forman & Leonard P.A., in Wilmington, Delaware. A copy of the proposed order containing details of the procedure is available without charge at http://is.gd/4EmVOx A court hearing is scheduled for November 7. Objections are due by October 31. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. Before it formally emerges from bankruptcy, Tribune must still get approval from the Federal Communications Commission on new broadcast licenses and waivers for overlapping ownership of television stations and newspapers in certain markets. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Ernst & Young Providing Additional Services ------------------------------------------------------- Tribune Co. asked the U.S. Bankruptcy Court for the District of Delaware to permit Ernst & Young LLP to provide additional services to the company. The new services to be provided by the firm include services concerning the tax amnesty or voluntary disclosure programs for Tribune Technology, a division of the company. Ernst & Young will also assist other divisions of Tribune in case they decide to enter into those programs. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. Before it formally emerges from bankruptcy, Tribune must still get approval from the Federal Communications Commission on new broadcast licenses and waivers for overlapping ownership of television stations and newspapers in certain markets. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIDENT MICROSYSTEMS: Has Dec. 13 Plan Confirmation Hearing ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that approval of the Trident Microsystems Inc. reorganization plan will be the topic for a Dec. 13 confirmation hearing. The U.S. Bankruptcy Court in Delaware approved the explanatory disclosure statement on Oct. 22. According to the report, support for the plan by the two official committees was made possible by a settlement. One committee represents creditors and the other is for shareholders. After filing for Chapter 11 protection in January, Trident sold the businesses and generated $90 million, leaving $71 million at the end of June, according to the disclosure statement. Before a settlement, the largest impediment to distribution was disagreement over the $73.2 million claim that Trident has against affiliate Trident Microsystems (Far East) Ltd., which is now represented by liquidators appointed by a court in the Cayman Islands. The report relates that the settlement provides for the liquidators to receive as much as $14.9 million in cash, allowing unsecured creditors of TMFE to have a recovery of 55% to 81% on $96.4 million in claims. Other unsecured creditors with claims against TMFE will be paid 90% on claims of $16.6 million. Unsecured creditors with claims of about $3 million against Trident will be paid in full, allowing a distribution of as much as 28 cents a share for stockholders. The report notes that announcement of the settlement caused a 35% decline in Trident's stock. It closed Oct. 23 at 25 cents, unchanged in over-the-counter trading. Trident's television business was sold for about $22.5 million in cash to Sigma Designs Inc. Entropic Communications Inc. purchased the set-top box business for $65 million. About Trident Microsystems Sunnyvale, California-based Trident Microsystems, Inc., currently designs, develops, and markets integrated circuits and related software for processing, displaying, and transmitting high quality audio, graphics, and images in home consumer electronics applications such as digital TVs, PC-TV, and analog TVs, and set- top boxes. The Company has research and development facilities in Beijing and Shanghai, China; Freiburg, Germany; Eindhoven and Nijmegen, The Netherlands; Belfast, United Kingdom; Bangalore and Hyderabad, India; Austin, Texas; and Sunnyvale, California. The Company has sales offices in Seoul, South Korea; Tokyo, Japan; Hong Kong and Shenzhen, China; Taipei, Taiwan; San Diego, California; Mumbai, India; and Suresnes, France. The Company also has operations facilities in Taipei and Kaoshiung, Taiwan; and Hong Kong, China. Trident Microsystems and its Cayman subsidiary, Trident Microsystems (Far East) Ltd. filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10069) on Jan. 4, 2011. Trident said it expects to shortly file for protection in the Cayman Islands. Judge Christopher S. Sontchi presides over the case. Lawyers at DLA Piper LLP (US) serve as the Debtors' counsel. FTI Consulting, Inc., is the financial advisor. Union Square Advisors LLC serves as the Debtors' investment banker. PricewaterhouseCoopers LLP serves as the Debtors' tax advisor and independent auditor. Kurtzman Carson Consultants is the claims and notice agent. Trident had $310 million in assets and $39.6 million in liabilities as of Oct. 31, 2011. The petition was signed by David L. Teichmann, executive VP, general counsel & corporate secretary. Pachulski Stang Ziehl & Jones LLP represents the Official Committee of Unsecured Creditors. The Committee tapped to retain Fenwick & West LLP as its special tax and claims counsel, Imperial Capital, LLC, as its investment banker and financial advisor. Dewey & LeBoeuf represented the statutory committee of equity security holders before Dewey's bankruptcy filing in May 2012. Proskauer Rose LLP later replaced Dewey. The committee also has retained Campbells as Cayman Islands counsel, and Quinn Emanuel Urquhart & Sullivan, LLP as its conflicts counsel. Alvarez & Marsal North America, LLC, serves as the committee's financial advisors. UPPER DECK: European Arm Files Chapter 15 Petition in Manhattan --------------------------------------------------------------- Upper Deck International B.V., the European arm of the sports trading-card company, is asking the United States' recognition of its Dutch insolvency proceeding. Upper Deck filed a Chapter 15 bankruptcy petition in Manhattan (Bankr. S.D.N.Y. Case No. 12-14294) on Oct. 18. Loes A. van Kooten-Hendriks, the company's insolvency administrator, signed the bankruptcy petition. UDI was in the business of, inter alia, publishing, producing and distributing, as well as wholesale trading in, sports and amusement cards and stickers, in particular collectable trading cards, and acquiring capitalizing upon patents, trade names and trademarks. According to court filings, UDI encountered financial difficulties because of a protracted conflict among its beneficial shareholders, and because it was unable to extend agreements with various contractual counterparties as a result of Konami Digital Entertainment BV's attempt to terminate the distributorship agreement, which led to the loss of exclusive manufacturing, sale and distribution rights. As a consequence and also due to external economic conditions, sales declined dramatically. In February 2012, the Dutch Court entered a judgment granting UDI "provisional suspension of payments" under the Dutch Bankruptcy Act. The Dutch Court later entered a judgment declaring UDI bankrupt and appointed Mr. Kooten-Hendricks as insolvency administrator. UDI has ceased its business. The insolvency administrator is aware of at least two assets of UDI located within the territorial jurisdiction of the United States. Prior to the petition for recognition, UDI entered into an agreement to sell certain of its assets to Hasbro, Inc. The administrator asserts that UDI is entitled to payments under the sale agreement, which rights the administrator seeks to monetize as part of the Chapter 15 proceeding. UDI is also a plaintiff in litigation pending in the U.S. District Court for the Southern District of California (Case No. 3:11-cv-017141-LAB-KSC) against Upper Deck Company (California) and Upper Deck Company (Nevada) for the two defendant-companies' alleged counterfeiting products that caused Konami to terminate their lucrative agreement. UDI is seeking monetary damages against the two companies and their ultimate owner, Richard McWilliam. The Debtor is estimated to have at least $50 million in assets and liabilities up to $50,000. Judge Stuart M. Bernstein presides over the Chapter 15 case. UPPER DECK: Chapter 15 Case Summary ----------------------------------- Chapter 15 Debtor: Upper Deck International B.V. Loes A. van Kooten-Hendriks, as Insolvency Administrator HJ Advocaten B.V Oranje Nassaulaan 53 1075 AK Amsterdam The Netherlands Chapter 15 Case No.: 12-14294 Chapter 15 Petition Date: October 18, 2012 Court: Southern District of New York (Manhattan) Judge: Stuart M. Bernstein Chapter 15 Debtor's Counsel: David Farrington Yates, Esq. Oscar N. Pinkas, Esq. SNR DENTON US LLP 1221 Avenue of the Americas 24th Floor New York, NY 10020 Tel: (212) 768-6700 Fax: (212) 768-6800 E-mail: farrington.yates@snrdenton.com oscar.pinkas@snrdenton.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Debts: $0 to $50,000 The petition was signed by Loes A. van Kooten-Hendriks. US FOODS: Moody's Confirms 'B3' CFR/PDR; Outlook Stable ------------------------------------------------------- Moody's Investors Service confirmed all ratings of US Foods, Inc., including the B3 corporate family rating, and assigned a stable outlook. This concludes the review for downgrade that commenced on July 13, 2012. Ratings confirmed include: Corporate family rating at B3 Probability of default at B3 $701 million senior secured term loan due 2014 at B3 (LGD3, 47%) $421 million senior secured term loan due 2017 at B3 (LGD3, 47%) $400 million senior unsecured notes due 2019 at Caa2 (LGD5, 85%) $521 million senior subordinated notes due 2017 at Caa2 (LGD6, 93%) Rating Rationale "The confirmation of the B3 corporate family rating recognizes the progress the company has recently made towards the refinancing/repayment of its various debt maturities, which results in an improved liquidity profile," stated Moody's Senior Analyst Charlie O'Shea. "There remains a $700 million term loan maturing in July 2014, the expeditious refinance of which is a key credit issue." US Foods' (USF) B3 Corporate Family and Probability of Default ratings reflect the company's highly leveraged capital structure and weak credit metrics. The ratings also reflects Moody's assumption that these metrics will continue to show only modest incremental improvement over the next 12 months given an aggressive financial policy and the fact that much of the company's cash flows go to service debt and fund capital expenditures. USF's liquidity profile, which is a key ratings consideration for the company, though improved due to the successful extension of the ABS facility and repayment of the CMBS facility, remains constrained by the upcoming $700 million term loan maturing in July 2014. Current ratings reflect Moody's expectation that USF will execute the refinance of this term loan within a reasonable time period. Positive ratings consideration is given to the company's sound execution ability and its formidable market position, with a solid and defensible number two share behind market leader Sysco, balanced by the increasingly competitive environment led by specialized niche operators such as Restaurant Depot. The stable rating outlook is based on Moody's expectation that USF's credit metrics will continue to incrementally improve to a level that is more representative of the current B3 rating and that the company will successfully refinance the $700 million term loan maturing in July 2014 in a reasonable time frame. The stable outlook also reflects Moody's view that the company's qualitative factors -- a solid franchise and market position, growing private label percentage, and stable, though low, margins -- help to balance out its weak quantitative profile. At present, there is minimal upward pressure on the company's ratings given its highly leveraged profile and the aggressive financial policy mandated by its sponsors. Absent a significant improvement in operations, Moody's expects only modest improvements in credit metrics. Quantitatively, an upgrade could occur if debt/EBITDA sustains at 6 times, EBITA/interest remains above 1.50 times, and financial policy remains tempered. In the event the company's overall liquidity profile deteriorates, which includes the failure to execute the refinance of the $700 million term loan in a timely manner, the ratings could be downgraded. Also, if credit metrics do not improve such that debt/EBITDA begins making tangible progress towards 7 times, or if EBITA/interest falls below 1.25 time, ratings could be downgraded. The principal methodology used in rating US Foods' 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. W.R. GRACE: Has Accord With Dairyland Insurance ----------------------------------------------- W.R. Grace & Co. and its debtor affiliates ask Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to approve a settlement agreement with Dairyland Insurance Company. Dairyland issued a single policy of excess liability insurance that provided, or is alleged to provide, insurance coverage to Grace for expenses and losses arising out of asbestos-related claims. The Subject Policy was issued for the policy period from June 30, 1983, to June 30, 1984, and provides coverage in the total amount of $2 million in the aggregate for products and completed operations. The Subject Policy is part of a quota share layer of $75 million, which attaches excess of $75 million in underlying limits. Grace has incurred -- and Grace and the Asbestos PI Trust may incur in the future -- certain liabilities, expenses and losses arising out of asbestos-related claims, for which Grace seeks coverage under the Subject Policy. Disputes have arisen between Grace and Dairyland regarding their rights and obligations under the Subject Policy with respect to coverage for asbestos-related claims. The Plan of Reorganization contemplates that Asbestos Personal- Injury Claims will be enjoined and channeled to the Trust. If established as proposed, the Trust will process and resolve Asbestos PI Claims pursuant to the Asbestos PI Trust Distribution Procedures. The Plan further contemplates that Asbestos Insurance Rights, including rights to coverage under the Subject Policy, are to be transferred to the Trust on the Effective Date, to be used to fund payment of Asbestos PI Claims. Under the agreement, the parties agreed that Dairyland will pay $2 million to the Trust within 30 days of the "trigger date" as provided for in the agreement. The Agreement includes a complete, mutual release of all claims under the Subject Policy and is structured as a sale of property pursuant to Section 363 of the Bankruptcy Code. The Agreement further provides that if the Plan goes effective, the Trust, at its own expense, will enforce the Asbestos PI Channeling Injunction with respect to Asbestos PI Claims subject to the Asbestos PI Channeling Injunction that are asserted against Dairyland under the Subject Policy, provided, however, that the Trust's obligation in this respect is limited to the Settlement Amount. A full-text copy of the Dairyland Agreement dated Oct. 15, 2012, is available for free at: http://bankrupt.com/misc/gracedairylandpact.pdf A hearing on the request is set for Nov. 26, 2012. Objections are due no later than Nov. 9. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Proposes to Increase SC&H Expense Cap to $2.0-Mil. -------------------------------------------------------------- W.R. Grace & Co. and its affiliates ask the Court to further amend the order approving employment of ordinary course professionals, and the procedures governing payment of OCPs to increase the Total Expenditure Cap to $2.0 million for SC&H State & Local Tax. The Debtors also seek authority, in the event that SC&H's expenditures exceed the $2.0 million Total Expenditure Cap prior to the Plan of Reorganization's Effective Date, to raise the cap by up to an additional $400,000 upon 10 days' written notice to the U.S. Trustee and counsel for the statutory committees and future claims representatives. SC&H provides W.R. Grace & Co. with a wide range of tax consulting services, including: * Conducting "reverse audits" of real property, personal property, sales and use taxes paid to several of the states in which Grace does business. These audits have resulted in the Debtors recovering significant tax refunds over the past several years; * Annually preparing and filing approximately 85 personal property tax returns in 20 states; and * Analyzing and advising the Debtors regarding the tax aspects of real estate projects and negotiations and special projects and proposed business transactions and ventures. According to Adam Paul, Esq., at Kirkland & Ellis LLP, in Chicago, SCH&H is nearing the current Total Expenditure Cap, although their monthly fees and expenses each remain well below the $50,000 monthly cap. SC&H billed Grace approximately $292,250 over the four quarters ending on Sept. 30, 2012. As of that date, SC&H's total expenditure since the Petition Date was approximately $1,499,614. At an average of approximately $73,800 per month, the Debtors expect SC&H to exceed the Total Expenditure Cap in the first quarter of 2013, Mr. Paul tells the Court. By raising the cap to $2.0 million, at the present rate of expenditure, the Debtors do not expect that SC&H will approach the new cap until well into 2014, he adds. Mr. Paul says the Total Expenditure Cap for all other professionals will remain at $1.6 million as set forth in the OCP Order dated Nov. 11, 2011, and that order will remain otherwise unaffected in all respects. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Ethical Wall Between Smith and Orrick Lawyers Set ------------------------------------------------------------- David Austern, the legal representative for future asbestos claimants appointed in W.R. Grace's case, previously obtained approval to hire Orrick Herrington & Sutcliffe LLP as bankruptcy counsel. The FCR previously had Swidler Berlin LLP as bankruptcy counsel but sought to hire Orrick after Roger Frankel, Richard Wyron, Jonathan Guy, Debra Felder, and other lawyers from Swidler joined Orrick. Recently, Roger Frankel, Esq., at Orrick, Herrington & Sutcliffe LLP, in Washington, D.C., disclosed in a supplemental declaration that David Smith, Esq., has joined the firm as an attorney in the litigation department of the Washington DC office. Prior to attending law school, Mr. Smith was employed as a paralegal at Caplin & Drysdale Chartered, which currently represents the Official Committee of Asbestos Personal Injury Claimants appointed in these chapter 11 cases. From March 2004 to July 2009, while employed at Caplin, Mr. Smith assisted certain Caplin attorneys on certain litigation matters in the Debtors' Chapter 11 cases. Although there is no conflict between Orrick's employment of Mr. Smith as an attorney at Orrick and Orrick's continuing representation of the PI FCR in these bankruptcy cases, out of an abundance of caution, Orrick has established an ethical wall between Mr. Smith and the Orrick lawyers and legal assistants working on these cases. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WASHINGTON MUTUAL: Former Officers Face Resistance to Bonus Claims ------------------------------------------------------------------ Jacqueline Palank at Dow Jones' Daily Bankruptcy Review reports that about a dozen former Washington Mutual Inc. officers are facing pushback to their bid to recover nearly $3.8 million in bonuses they earned before the collapse of the company's bank, the biggest bank failure in U.S. history. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. Records filed Jan. 24, 2012, say that Washington Mutual Inc., former owner of the biggest U.S. bank to fail, has spent $232.8 million on bankruptcy professionals since filing its Chapter 11 case in September 2008. In March 2012, the Debtors' Seventh Amended Joint Plan of Affiliated, as modified, and as confirmed by order, dated Feb. 23, 2012, became effective, marking the successful completion of the chapter 11 restructuring process. The Plan is based on a global settlement that removed opposition to the reorganization and remedy defects the judge identified in September. The plan is designed to distribute $7 billion. Under the reorganization plan, WaMu established a liquidating trust to make distributions to parties-in-interest on account of their allowed claims. WAVE SYSTEMS: To Raise $3.3-Mil. in Registered Direct Offering -------------------------------------------------------------- Wave Systems Corp. has entered into agreements with certain institutional investors for a registered direct placement of approximately 3,324,750 shares of its Class A common stock at a price of $1.0025 per share, yielding gross proceeds of $3,333,062. Additionally, investors in the offering will receive five-year warrants to purchase an aggregate of 1,662,375 shares of Wave's Class A common stock for $0.94 per share. The net proceeds of the financing will be used to fund Wave's ongoing operations. The offering is expected to close on or about Oct. 23, 2012, subject to the satisfaction of customary closing conditions. Dawson James Securities, Inc., acted as exclusive placement agent in connection with the offering. About Wave Systems Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. The Company reported a net loss of $10.79 million in 2011, a net loss of $4.12 million in 2010, and a net loss of $3.34 million in 2009. The Company's balance sheet at June 30, 2012, showed $24.59 million in total assets, $19.26 million in total liabilities and $5.32 million in total stockholders' equity. Going Concern The Company said in its annual report for the year ended Dec. 31, 2011, that it will be required to sell additional shares of common stock, preferred stock, obtain debt financing or engage in a combination of these financing alternatives, to raise additional capital to continue to fund its operations for the twelve months ending Dec. 31, 2012. If Wave is not successful in executing its business plan, it will be required to sell additional shares of common stock, preferred stock, obtain debt financing or engage in a combination of these financing alternatives or it could be forced to reduce expenses which may significantly impede its ability to meet its sales, marketing and development objectives, cease operations or merge with another company. No assurance can be provided that any of these initiatives will be successful. Due to its current cash position, capital needs over the next year and beyond, and the uncertainty as to whether it will achieve its sales forecast for its products and services, substantial doubt exists with respect to Wave's ability to continue as a going concern. WAYSIDE SCHOOLS: S&P Gives 'BB+' Rating on $719MM Revenue Bonds -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' long-term rating to Travis County Cultural Education Facilities Corp., Texas' $13.15 million series 2012A education revenue bonds, $700,000 series 2012B taxable education revenue bonds, and $6.10 million series 2012Z bonds taxable education revenue bonds (direct-pay qualified zone academy bonds) issued for Wayside Schools Inc. (Wayside). The outlook is stable. "The rating reflects our view of Wayside's historical operating surpluses, strong academic profile, healthy liquidity, and adequate pro forma maximum annual debt service coverage," said Standard & Poor's credit analyst Kevin Holloran. The 'BB+' rating further reflects S&P's view of Wayside's: Long operating history; History of growing enrollment, bolstered by a strong retention rate and academic profile; Good liquidity for the sector, as measured by 118 days' cash on hand as of June 30, 2012 (audited fiscal year-end); Consistently positive operating surpluses; Good relationship with the charter authorizer, Texas Education Agency, with one successful charter renewal and a 10-year renewal anticipated with the expiration of the current charter in 2014; and New management team that is working to build a stable yet growing headcount and financial profile. "The stable outlook reflects our view that the school will maintain its demand profile, strong academic performance, liquidity position, and good cash reserves," S&P said. WINDSOR FINANCING: Moody's Rates $246-Mil. Term Loan 'Ba2' ---------------------------------------------------------- Moody's Investors Service has assigned a Ba2 rating to Windsor Financing, LLC's proposed issuance of $246 million in a senior secured Term Loan B due 2019. The outlook is stable. Ratings Rationale This transaction represents a refinancing of the existing senior secured debt due 2017 and the subordinated debt due 2016. The refinancing will allow Windsor to improve its credit metrics by reducing mandatory debt service, take advantage of the currently low interest rate environment and extend the financing tenor through the start of the Northern Virginia Electric Cooperative (NOVEC; NR) power purchase agreements (PPAs). These PPAs start when the current PPAs expire with Virginia Electric Power Company (VEPCO: A3; stable). Proceeds will also be used to pay accrued interest on the subordinated debt, pay a projected make whole premium, fund a 6- month debt service reserve, fund the VEPCO PPA LC requirement, pre-fund for the next few years a capex and major maintenance reserve and pay related fees and expenses associated with the transaction. Windsor Financing, LLC is a special purpose entity established to own Spruance Genco, LLC and Edgecombe Genco, LLC, which own the Spruance and Edgecombe power plants, respectively. Spruance (Virginia) and Edgecombe (North Carolina) are coal-fired, electric and steam generating plants and have a combined generating capacity of approximately 330 megawatts. The facilities operate as Qualifying Facilities under Public Utility Regulatory Policies Act ("PURPA") and currently sell their electricity to VEPCO, a subsidiary of Dominion Resources, Inc. (Baa2; stable). Both sell their steam output to manufacturing facilities. The rating reflects the long-term, fully contracted nature of the cash flows with load serving entities, supported first by the VEPCO and then the NOVEC contracts. The VEPCO PPAs expire in 2015 (for the Edgecombe plant) and 2017 (for the Spruance plant). The NOVEC contracts expire in 2029. In addition, the rating reflects Moody's view that the coal quality issues and associated higher operating costs, which have vexed Spruance and Edgecombe since the 2008/09 timeframe, have now been satisfactorily resolved and are behind them. In 2010, EIF hired PPMS to be the asset manager, NAES to be the operator and Pace Global to be the fuel manager. These steps have improved the plant's fuel management system and addressed inconsistent delivery of physical fuel quality. There have been no significant operational or fuel quality issues since 2010. These steps as well as the lower mandatory debt service associated with the Term Loan B structure should enable Windsor to produce metrics commensurate with its new Ba2 rating. The rating also reflects structural features that include a 1% scheduled amortization with a cash sweep up to a target debt balance that is forecasted to result in 25% deleveraging of the $246 million beginning debt balance to $185 million at maturity in 2019. Although the cash sweep can be up to 100% in order to achieve the target debt balance, the effective sweep each year is actually much lower as the targeted deleveraging at maturity is only 25%. Refinancing should be manageable, however, as the cash flows at that point remain fully contracted under the NOVEC contracts, which run to 2029. Structural features also include a 6-month debt service reserve, a pre-funded capex and major maintenance reserve sufficient to fund accelerated capex and major maintenance over the next several years, a cash flow waterfall and security in the underlying assets. The stable outlook reflects the expectation that the proposed refinancing facility with its lower levels of annual required debt service will produce stable credit metrics commensurate with the rating. The outlook further considers manageable refinancing risk and incorporates expectations that the plants will continue to be operated and managed in a way consistent with the last few years. The rating is unlikely to be upgraded, at least in the near term, given the potential for cash flow volatility resurfacing in annual financial results given the imperfections that remain in the VEPCO PPAs around the manner in which the project is compensated for energy. While the refinancing has reduced the possibility for such cash flow volatility to re-emerge, the risk has not been eliminated and remains a constraining factor on the rating. The rating comes under downward pressure if the assets incur operating problems, if the financial metrics measure below expectations or if Windsor does not achieve forecasted debt reduction levels. The last rating action on Windsor occurred on April 11, 2012, when the project's ratings were downgraded to B1/Caa1. The B1 rating on the existing senior secured debt due 2017 and the Caa1 rating on the subordinated debt due 2016 will be withdrawn upon the closing of the refinancing. Windsor is 100% owned by funds (and associated co-investors) managed by Energy Investors Funds (EIF), a private equity fund manager dedicated exclusively to the independent power and electric utility industry. Since its inception in 1987, EIF has raised more than $5.0 billion in equity capital and currently manages multiple private equity funds from its offices in Boston, New York, and San Francisco. The principal methodology used in rating this issuer was Power Generation Projects, published in December 2008, which can be found at www.moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Credit Policy & Methodologies directory. ZACKY FARMS: Has 7-Member Unsecured Creditors' Committee -------------------------------------------------------- August B. Landis, the Acting United States Trustee, has appointed seven members to the official committee of unsecured creditors in the Chapter 11 case of Zacky Farms, LLC. The Committee members are: Claim Amount Claim Amount Asserted by the Scheduled by Committee Member Member-Creditor the Debtor ---------------- --------------- ------------ Western Milling, LLC $6,573,910 $6,573,910 Attn: Mark La Bounty P.O. Box 1029 Goshen, CA 93227 Tel: (559) 302-1685 E-mail: mlabounty@westernmilling.com Foster Farms, LLC $2,575,101 $1,288,181 Foster Poultry Farms Attn: Jana L. Owens P.O. Box 198 1333 Swan Street Livingston, CA 95334 Tel: (209) 398-6750 E-mail: jana.owens@fosterfarms.com Associated Feed & Supply $654,328 $184,591 Attn: Scott Tyson P.O. Box 2367 Turlock, CA 95381 Tel: (209) 667-2708 E-mail: scottt@associatedfeed.com Sealed Air Corporation (Cryovac) $475,657 $243,455 Attn: Michael Wallace P.O. Box 464 Duncan, SC 29334 Tel: (864) 433-2465 E-mail: michael.wallace@sealedair.com Axis Media Management Inc. $442,242 $278,470 Attn: Tony Naish 30495 Canwood St, Suite 211 Agoura Hills, CA 91301 Tel: (818) 264-1555 E-mail: tony@axismedia.org Gahvejian Enterprises, Inc. $400,000 $296,616 dba Mid Valley Packaging & Supply Co. Attn: Carrie Gahvejian 2004 S. Temperance Avenue Fowler, CA 93625-9759 Tel: (559) 834-5956 E-mail: carrieg@mvpsupply.com International Paper Company $352,223 $153,239 Attn: Vic Kawamura 1002 15th St SW, Suite 200 Auburn, WA 98001 Tel: (253) 288-4620 E-mail: vic.kawamura@ipaper.com The Acting U.S. Trustee is represented by: Allen C. Massey, Esq. Antonia G. Darling, Esq. UNITED STATES DEPARTMENT OF JUSTICE Office of the United States Trustee 501 "I" Street, Suite 7-500 Sacramento, CA 95814 Tel: (916) 930-2100 Fax: (916) 930-2099 E-mail: al.c.massey@usdoj.gov About Zacky Farms Fresno, California-based Zacky Farms LLC, whose operations include the raising, processing and marketing of poultry products, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No. 12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly 1,000 employees and operates in multiple plants, farms and offices in California, including operations in Los Angeles, Fresno, Tulare, Kings, San Joaquin and San Bernardino Counties. The company blames high feed prices for losses in recent years. The Company has plans to sell itself to pay creditors. It listed between $50 million and $100 million in both assets and debts. Bankruptcy Judge Thomas Holman presides over the case. Lawyers at Felderstein Fitzgerald Willoughby & Pascuzzi LLP represent the Debtor. The petition was signed by Keith F. Cooper, the Debtor's sole manager. An official committee of unsecured creditors has been appointed in the case. Lowenstein Sandler represents the Committee. The Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan, Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron. The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky Trust U/D/T dated July 26, 1988, is represented by Thomas Walper, Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP. * Moody's Says US Corporate Family Defaults Down in Q3 2012 ----------------------------------------------------------- US corporate family defaults have declined for a third consecutive quarter as accommodative credit markets continue to fund speculative-grade companies, Moody's Investors Service says in the latest edition of its quarterly US Corporate Default Monitor. There were six defaults representing more than $3 billion of debt among Moody's-rated US non-financial corporate families during the third quarter of 2012, compared with a recent peak of 16 in the fourth quarter of 2011. In addition, Moody's default rate forecast remains low. "The US speculative-grade default rate was 3.5% at the end of the third quarter, and we expect it to peak at 3.9% this month before declining to 2.8% in May 2013," says Senior Vice President Lenny Ajzenman. "This is well below the late-2009 cyclical peak of more than 14% and the average since 1992 of 4.6%." Among the low-rated companies that have recently accessed the debt markets to borrow and refinance pending maturities are HD Supply, Inc., which completed an unsecured note offering to refinance 2015 maturities, and Ply Gem Industries, Inc., which completed an offering to refinance certain 2014 maturities. "Speculative-grade companies overall continue to have healthy liquidity levels and market access," Ajzenman says, "with Moody's Liquidity-Stress Index remaining unchanged at 3.5% as of mid-October." Bankruptcy was the most common type of default during the third quarter. Of the quarter's six defaults, three were bankruptcy filings, two were missed payments and one was a distressed exchange. Defaults spanned industries, occurring in the energy, chemicals, telecommunications, healthcare and retail sectors. The largest defaulter during the third quarter was offshore oil and gas exploration and production company ATP Oil & Gas Corporation. The firm defaulted on more than $1.8 billion of debt in connection with its August 2012 bankruptcy filing. Coal producer Patriot Coal Corporation also defaulted, on $450 million of debt in connection with its July bankruptcy filing, as did local exchange carrier Broadview Networks Holdings, Inc., which defaulted on more than $300 million of debt in connection with its August filing. The one distressed exchange during the past quarter was undertaken by Bon-Ton Stores Inc. The firm swapped $330 million of new senior secured notes due 2017 for $330 million of its unsecured notes due 2014. Moody's expects distressed exchanges to remain a common restructuring strategy, with junior bondholders agreeing to exchanges rather than risk low recovery in a bankruptcy and private equity sponsors seeking to preserve ownership and buy time to restore value to equity capital. * Stutman Treister Opens NY Office, Brings Back Mike Goldstein -------------------------------------------------------------- Stutman, Treister & Glatt, P.C. (ST&G), one of the nation's preeminent boutique bankruptcy law firms, disclosed the expansion of its national practice with the opening of a New York office and the hiring of leading bankruptcy attorneys Michael H. Goldstein, who is rejoining ST&G after a brief time with Greenberg Traurig, and William P. Weintraub, who most recently began a bankruptcy practice at a nationally prominent litigation firm, and prior to that was a senior partner with Pachulski Stang Ziehl & Jones. "Having spent a substantial part of my career at Stutman, I can attest first-hand to the quality of the attorneys, the incredible work product and the impeccable client service this storied firm has consistently produced over the last 60 years" "Today's announcement marks a very exciting time for our firm," said Stutman Senior Shareholder Isaac Pachulski. "With a presence in New York, we will be better able to serve our clients who are involved in complex bankruptcy cases taking place on the East Coast. This effort will be led by a top-flight team of bankruptcy experts, and we have every confidence that under the steady leadership of Bill and Michael, our long tradition of excellence will continue to flourish." "Stutman, Treister & Glatt is one of the most respected and recognized firms within the bankruptcy and restructuring world," said Weintraub. "The chance to be an integral part of this expansion was extremely compelling and I believe opens up a variety of opportunities for the firm to further its involvement in some of the most high profile and influential bankruptcy and restructuring cases going forward." Weintraub is renowned for his creative and business-oriented approach to complex restructuring matters. He has represented debtors and creditors in prominent bankruptcy cases across the country including Dewey & LeBoeuf, Tribune Company, Lyondell Chemical, Madoff Securities and Quigley Company. "Having spent a substantial part of my career at Stutman, I can attest first-hand to the quality of the attorneys, the incredible work product and the impeccable client service this storied firm has consistently produced over the last 60 years," said Goldstein. Goldstein is widely considered one of the top restructuring lawyers in the country, bringing more than two decades of experience representing debtors, bondholders, hedge funds and acquirers of distressed assets in complex corporate bankruptcies and out-of-court restructurings. Goldstein has recently been involved in the chapter 11 cases of CDC Corporation, Daphne's Greek Restaurants, DBSI and Jefferson County, Alabama. Also joining ST&G's New York office will be Eamonn O'Hagan, Greg Fox and Kizzy Jarashow, each of whom practiced with Weintraub at his former firm, and have extensive experience representing debtors and creditors in bankruptcy matters across varied industries. Veteran ST&G attorney Margreta Morgulas, who first joined ST&G in 2001 and has practiced in New York since 2006, will also be based in the New York office. About Stutman, Treister & Glatt Since 1948, Stutman, Treister & Glatt, P.C. -- http://www.stutman.com/-- a boutique law firm, has been specializing in business bankruptcy, corporate restructuring, and insolvency-related litigation. The firm has offices in Los Angeles and New York. * U.K. Supreme Court Won't Enforce U.S. Default Judgments --------------------------------------------------------- Bloomberg News' Erik Larson in London reports that Britain's top court decided for the first time that U.S. bankruptcy rulings against debtor companies that don't appear in court to defend themselves can't be recognized in the U.K. According to Bloomberg, the U.K. Supreme Court ruled in London that allowing so-called default judgments from the U.S. and other countries to be recognized in Britain would be a "radical departure" from current law and detrimental to domestic business. Bloomberg says the U.K. Supreme Court case involves a $10 million default judgment in New York against Eurofinance SA, a bankrupt sales-promotion company based in the British Virgin Islands. A trustee for Eurofinance had sought to enforce a New York judgment in England, where the people associated with the company live. The ruling "benefits businesses or individuals in the U.K. who might otherwise be obliged to attend litigation proceedings in the U.S., or indeed anywhere else in the world, that arise in a bankruptcy," said Patrick Elliot, a lawyer with Brown Rudnick LLP in London, who represented Eurofinance. Setback for Madoff Trustee Bloomberg says the the ruling is a setback for Irving Picard, the trustee for jailed con man Bernard L. Madoff's firm. While he wasn't a party in the case, he filed court papers promoting the recognition of U.S. judgments in Britain as he seeks to enforce three New York rulings totaling $1.25 billion in courts in Gibraltar and the Cayman Islands, which are influenced by U.K. law. "This judgment will make large cross-border insolvencies more difficult," said Nick Herrod, a lawyer with Allen & Overy LLP in London, who isn't involved in the case, according to the Bloomberg report. "It's disappointing because it's pushing against the tide" of recent cases that were "building quite a bit of momentum." Bloomberg says Amanda Remus, a Picard spokeswoman, declined to comment. According to Bloomberg, all three of Mr. Picard's cases were adjourned to await the U.K. Supreme Court's ruling, according to the judgment. The Supreme Court said it didn't make any findings in relation to the Madoff cases, and the entities sued by Mr. Picard also filed court papers to make their arguments. * 6th Circuit Appoints Schaaf as E.D. Kentucky Bankruptcy Judge --------------------------------------------------------------- The Sixth Circuit Court of Appeals appointed Bankruptcy Judge Gregory R. Schaaf to a fourteen-year term of office in the Eastern District of Kentucky, Lexington, effective October 1, 2012. (vice, Scott) Honorable Gregory R. Schaaf United States Bankruptcy Court 100 East Vine Street, Suite 200 Lexington, KY 40507 Telephone: 859-233-2814 Fax: 859-233-2676 Term expiration: September 30, 2026 * 9th Circuit Appoints Latham as S.D. Calif. Bankruptcy Judge ------------------------------------------------------------- The Ninth Circuit Court of Appeals appointed Bankruptcy Judge Christopher B. Latham to a fourteen-year term of office in the Southern District of California, San Diego, effective, October 1, 2012, (Bowie). Honorable Christopher B. Latham United States Bankruptcy Court U.S. Bankruptcy Court 325 West F Street San Diego, CA 92101 Telephone: (619) 557-7570 Fax: (619) 557-5298 Law Clerks: Brian Hayag Telephone: (619) 557-7419 Matt Stephens Telephone: (619) 557-7422 Term Expiration: September 30, 2026 * 9th Cir. Appoints Gary Sparker as Alaska Bankruptcy Judge ----------------------------------------------------------- The Ninth Circuit Court of Appeals appointed Bankruptcy Judge Gary A. Sparker, to a fourteen-year term of office in the District of Alaska, Anchorage, effective October 4, 2012 (vice, Ross). Honorable Gary A. Sparker United States Bankruptcy Court 605 W. 4th Ave. Ste. 138 Anchorage, AK 99501 Telephone: (907) 271-2667 Fax: (907) 271-2692 Clerks: Amy McFarlane Career Law Clerk Telephone: (907) 271-2621 Sue VanSchooten Judicial Assistant Telephone: (907) 271-2618 Term expiration: October 3, 2026 * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Nader Haghnazarzadeh Bankr. C.D. Calif. Case No. 12-19082 Chapter 11 Petition filed October 12, 2012 In re Jeffrey Morgan Bankr. C.D. Calif. Case No. 12-44548 Chapter 11 Petition filed October 12, 2012 In re Diana Klaric Bankr. D. Conn. Case No. 12-32300 Chapter 11 Petition filed October 12, 2012 In re Jessica Kehl Bankr. N.D. Fla. Case No. 12-50495 Chapter 11 Petition filed October 12, 2012 In re Carpenter Road Self-Storage, LLC Bankr. M.D. Ga. Case No. 12-71425 Chapter 11 Petition filed October 12, 2012 See http://bankrupt.com/misc/gamb12-71425.pdf represented by: Rodney L. Allen, Esq. ALLEN, FOREHAND & ADAMS, LLP E-mail: kmills@moultriega.net In re Kirk Hudson Bankr. N.D. Ill. Case No. 12-40684 Chapter 11 Petition filed October 12, 2012 In re Washworks Tropicana LLC Bankr. D. Nev. Case No. 12-21658 Chapter 11 Petition filed October 12, 2012 See http://bankrupt.com/misc/nvb12-21658.pdf Filed as Pro Se In re G.G.M. Fitness Management, Inc. dba Gold's Gym Middletown Bankr. S.D.N.Y. Case No. 12-37578 Chapter 11 Petition filed October 12, 2012 See http://bankrupt.com/misc/nysb12-37578.pdf represented by: Thomas Genova, Esq. GENOVA & MALIN E-mail: genmallaw@optonline.net In re Angel Academy, LLC Bankr. W.D. Pa. Case No. 12-25067 Chapter 11 Petition filed October 12, 2012 See http://bankrupt.com/misc/pawb12-25067.pdf represented by: Christopher M. Frye, Esq. STEIDL & STEINBERG E-mail: chris.frye@steidl-steinberg.com In re John Weckesser Bankr. M.D. Tenn. Case No. 12-09355 Chapter 11 Petition filed October 12, 2012 In re Linda Tronoff Bankr. D. Ariz. Case No. 12-22575 Chapter 11 Petition filed October 15, 2012 In re Quest Academy, Inc. Bankr. C.D. Calif. Case No. 12-44627 Chapter 11 Petition filed October 15, 2012 See http://bankrupt.com/misc/cacb12-44627.pdf represented by: Richard H. Gibson, Esq. E-mail: RickGibsonLaw@gmail.com In re Morufu Akinbile Bankr. C.D. Calif. Case No. 12-44659 Chapter 11 Petition filed October 15, 2012 In re Norio Sugano Bankr. N.D. Calif. Case No. 12-57462 Chapter 11 Petition filed October 15, 2012 In re Bay 2 Bay Area Holding Group, LLC Bankr. M.D. Fla. Case No. 12-15592 Chapter 11 Petition filed October 15, 2012 See http://bankrupt.com/misc/flmb12-15592.pdf Filed as Pro Se In re Brad Hertz Bankr. S.D. Fla. Case No. 12-34714 Chapter 11 Petition filed October 15, 2012 In re Claridge Corp. Bankr. D. Mass. Case No. 12-18323 Chapter 11 Petition filed October 15, 2012 See http://bankrupt.com/misc/mab12-18323.pdf represented by: Jeffrey M. Frankel, Esq. LAW OFFICE OF JEFFREY M. FRANKEL E-mail: jmfbky@yahoo.com In re Reginald D. Sharpe, D.O., P.C. dba Sharpe Family Planning Women's Advisory Center Bankr. E.D. Mich. Case No. 12-63023 Chapter 11 Petition filed October 15, 2012 See http://bankrupt.com/misc/mieb12-63023p.pdf See http://bankrupt.com/misc/mieb12-63023c.pdf represented by: Kimberly Ross Clayson, Esq. SCHNEIDER MILLER, PC E-mail: kclayson@schneidermiller.com In re National Sign & Signal Co. Bankr. W.D. Mich. Case No. 12-09123 Chapter 11 Petition filed October 15, 2012 See http://bankrupt.com/misc/miwb12-09123.pdf represented by: Cody H. Knight, Esq. RAYMAN & KNIGHT E-mail: courtmail@raymanstone.com In re Ernesto Caro-Orozco Bankr. D. Nev. Case No. 12-21736 Chapter 11 Petition filed October 15, 2012 In re Saad Toma Bankr. E.D.N.C. Case No. 12-07372 Chapter 11 Petition filed October 15, 2012 In re Desserts International, LLC. Bankr. E.D. Pa. Case No. 12-19705 Chapter 11 Petition filed October 15, 2012 See http://bankrupt.com/misc/paeb12-19705.pdf represented by: Joseph Diorio, Esq. SPRINGFIELD LAW E-mail: josephdiorioesq@yahoo.com In re Cesar Carrero Martinez Bankr. D. P.R. Case No. 12-08164 Chapter 11 Petition filed October 15, 2012 In re Joleigh Ares Bankr. W.D. Tex. Case No. 12-12337 Chapter 11 Petition filed October 15, 2012 In re Dan Watson Construction, Inc. Bankr. N.D. Ala. Case No. 12-83317 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/alnb12-83317.pdf represented by: Adam C. Dauro, Esq. Heard Ary, LLC E-mail: adauro@heardlaw.com In re Watson Properties, LLC Bankr. N.D. Ala. Case No. 12-83318 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/alnb12-83318.pdf represented by: Adam C. Dauro, Esq. Heard Ary, LLC E-mail: adauro@heardlaw.com In re Ponderosa Hills Holding Company, LLC Bankr. D. Ariz. Case No. 12-22659 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/azb12-22659.pdf represented by: G. Terris Porter, Esq. The Porter Law Offices E-mail: porterlaw@frontiernet.net In re Cynthia Barrios Bankr. C.D. Calif. Case No. 12-19156 Chapter 11 Petition filed October 16, 2012 In re Killer Bea Enterprises dba The Bea Hive Bankr. C.D. Calif. Case No. 12-22017 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/cacb12-22017.pdf represented by: Matthew E. Faler, Esq. Law Offices of Matthew E. Faler E-mail: mfaler@faler-law.com In re Yermo Water Company, Inc. Bankr. C.D. Calif. Case No. 12-33443 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/cacb12-33443.pdf represented by: Timothy L. McCandless, Esq. The Law Offices of Timothy McCandless E-mail: tmlawbksb@hotmail.com In re Jett Schwindt Bankr. D. Colo. Case No. 12-31418 Chapter 11 Petition filed October 16, 2012 In re Terry Schwindt Bankr. D. Colo. Case No. 12-31418 Chapter 11 Petition filed October 16, 2012 In re Brett Harris Bankr. D. Idaho Case No. 12-41439 Chapter 11 Petition filed October 16, 2012 In re Bolt A Blok, Inc. Bankr. S.D. Ind. Case No. 12-12263 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/insb12-12263.pdf represented by: KC Cohen, Esq. KC Cohen, Lawyer, PC E-mail: kc@esoft-legal.com In re Thomas Korengold Bankr. D. Md. Case No. 12-28839 Chapter 11 Petition filed October 16, 2012 In re Cultural Assets 1, LLC Bankr. D.N.M. Case No. 12-13793 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/nmb12-13793.pdf represented by: Jennie D. Behles, Esq. E-mail: filings@jdbehles.com In re PADDA Hotels LLC dba Hampton Inn & Suites Bankr. D.N.M. Case No. 12-13786 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/nmb12-13786p.pdf See http://bankrupt.com/misc/nmb12-13786c.pdf represented by: R. Trey Arvizu, III, Esq. Arvizulaw.com, Ltd. E-mail: trey@arvizulaw.com In re 72 Albany Avenue Realty LLC Bankr. E.D.N.Y. Case No. 12-76218 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/nyeb12-76218.pdf Filed pro se In re Super El Noa Noa Corp. Bankr. E.D.N.Y. Case No. 12-47318 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/nyeb12-47318.pdf Filed pro se In re Galata, Inc. Bankr. S.D.N.Y. Case No. 12-14271 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/nysb12-14271.pdf represented by: Randall S. D. Jacobs, Esq. Randall S. D. Jacobs, PLLC E-mail: rsdjacobs@chapter11esq.com In re Green's Cleaners, Inc. Bankr. E.D. Pa. Case No. 12-19733 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/paeb12-19733p.pdf See http://bankrupt.com/misc/paeb12-19733c.pdf represented by: Hae Yeon Baik, Esq. Baik & Associates PC E-mail: haeyeon.baik@verizon.net In re Westy's Village, Inc. Bankr. M.D. Pa. Case No. 12-06095 Chapter 11 Petition filed October 16, 2012 See http://bankrupt.com/misc/pamb12-06095.pdf represented by: Robert E. Chernicoff, Esq. Cunningham and Chernicoff PC E-mail: rec@cclawpc.com In re Vincent Petraglia Bankr. W.D. Pa. Case No. 12-25132 Chapter 11 Petition filed October 16, 2012 In re Darryl Moore Bankr. S.D. Tex. Case No. 12-37709 Chapter 11 Petition filed October 16, 2012 In re Phillip McDaniel Bankr. D.V.I. Case No. 12-10013 Chapter 11 Petition filed October 16, 2012 In re BYB Properties, Inc. Bankr. D. Del. Case No. 12-12883 Chapter 11 Petition filed October 17, 2012 See http://bankrupt.com/misc/deb12-12883.pdf represented by: Dennis A. Meloro, Esq. Greenberg Traurig E-mail: bankruptcydel@gtlaw.com In re Blues Rock Inn, LLC Bankr. M.D. Fla. Case No. 12-06788 Chapter 11 Petition filed October 17, 2012 See http://bankrupt.com/misc/flmb12-06788.pdf represented by: Taylor J King, Esq. Law Offices of Mickler & Mickler E-mail: court@planlaw.com In re Georgia Hydraulic Cylinder, Inc. Bankr. N.D. Ga. Case No. 12-75987 Chapter 11 Petition filed October 17, 2012 See http://bankrupt.com/misc/ganb12-75987.pdf represented by: Rodney L. Eason, Esq. The Eason Law Firm E-mail: reason@easonlawfirm.com In re Capen Hall, LLC Bankr. D. Md. Case No. 12-28944 Chapter 11 Petition filed October 17, 2012 See http://bankrupt.com/misc/mdb12-28944.pdf represented by: Lawrence Joseph Yumkas, Esq. Yumkas, Vidmar & Sweeney, LLC E-mail: lyumkas@yvslaw.com In re TGAG LLC Bankr. D. Nebr. Case No. 12-82354 Chapter 11 Petition filed October 17, 2012 See http://bankrupt.com/misc/neb12-82354p.pdf See http://bankrupt.com/misc/neb12-82354c.pdf represented by: William L. Needler, Esq. William L. Needler & Associates, Ltd. E-mail: williamlneedler@aol.com In re JMW Realty LLC Bankr. E.D.N.Y. Case No. 12-47345 Chapter 11 Petition filed October 17, 2012 See http://bankrupt.com/misc/nyeb12-47345.pdf represented by: Bruce Weiner, Esq. Rosenberg Musso & Weiner LLP E-mail: rmwlaw@att.net In re Bonnie Brae Center, Inc. Bankr. E.D. Pa. Case No. 12-19804 Chapter 11 Petition filed October 17, 2012 See http://bankrupt.com/misc/paeb12-19804.pdf represented by: Andrew N. Schwartz, Esq. Law Office of Andrew N. Schwartz E-mail: andrew.schwartz@psinet.com In re EmsCharts, Inc. Bankr. N.D. W.Va. Case No. 12-01385 Chapter 11 Petition filed October 17, 2012 See http://bankrupt.com/misc/wvnb12-01385.pdf represented by: Aurelius Patrick Robleto, Esq. Robleto Law, PLLC E-mail: apr@robletolaw.com In re Sheila Hall Bankr. D. Ariz. Case No. 12-22842 Chapter 11 Petition filed October 18, 2012 In re Margherita Arvanites Bankr. D. Ariz. Case No. 12-22847 Chapter 11 Petition filed October 18, 2012 In re River Valley Forestry, LLC Bankr. E.D. Ark. Case No. 12-16065 Chapter 11 Petition filed October 18, 2012 See http://bankrupt.com/misc/areb12-16065.pdf represented by: Brian Christopher Wilson, Esq. BRIAN WILSON LAW FIRM E-mail: bcwlaw@yahoo.com In re Crecenciano Chavez Bankr. E.D. Calif. Case No. 12-18780 Chapter 11 Petition filed October 18, 2012 In re Rolando Caballero Bankr. N.D. Calif. Case No. 12-57530 Chapter 11 Petition filed October 18, 2012 In re Mountain Sky Group, LLC Bankr. D. Colo. Case No. 12-31605 Chapter 11 Petition filed October 18, 2012 See http://bankrupt.com/misc/cob12-31605.pdf represented by: Kenneth J. Buechler, Esq. BUECHLER LAW OFFICE LLC E-mail: ken@kjblawoffice.com In re Jack Boyle Bankr. M.D. Fla. Case No. 12-06813 Chapter 11 Petition filed October 18, 2012 In re J.M. Cruz Incorporated Bankr. S.D. Fla. Case No. 12-34914 Chapter 11 Petition filed October 18, 2012 See http://bankrupt.com/misc/flsb12-34914.pdf represented by: Luis G. Musa, Esq. LAW OFFICES OF LUIS G. MUSA E-mail: lgmusalaw@aol.com In re Danny McMullen Bankr. S.D. Fla. Case No. 12-34970 Chapter 11 Petition filed October 18, 2012 In re Odelaine Santa Cruz Bankr. S.D. Fla. Case No. 12-35003 Chapter 11 Petition filed October 18, 2012 In re Frances Rosentreter Bankr. C.D. Ill. Case No. 12-72274 Chapter 11 Petition filed October 18, 2012 In re Ben-Cal, Inc. fka Body Works Phase II Bankr. W.D. Mo. Case No. 12-44354 Chapter 11 Petition filed October 18, 2012 See http://bankrupt.com/misc/mowb12-44354.pdf represented by: Colin N. Gotham, Esq. EVANS & MULLINIX, P.A. E-mail: colin@evans-mullinix.com In re Mark Ziegler Bankr. D. Mont. Case No. 12-61681 Chapter 11 Petition filed October 18, 2012 In re Lawrenceville Mechanical, Inc. Bankr. D. N.J. Case No. 12-35331 Chapter 11 Petition filed October 18, 2012 See http://bankrupt.com/misc/njb12-35331.pdf represented by: Barry W. Frost, Esq. TEICH GROH E-mail: bfrost@teichgroh.com In re Philip Marchiondo Bankr. C.D. Calif. Case No. 12-45293 Chapter 11 Petition filed October 19, 2012 In re The 20/Twenty Group, LLC Bankr. C.D. Calif. Case No. 12-22184 Chapter 11 Petition filed October 19, 2012 See http://bankrupt.com/misc/cacb12-22184.pdf Filed pro se In re David Miller Bankr. N.D. Calif. Case No. 12-32968 Chapter 11 Petition filed October 19, 2012 In re AAA World Floors, Inc. Bankr. N.D. Ga. Case No. 12-76135 Chapter 11 Petition filed October 19, 2012 See http://bankrupt.com/misc/ganb12-76135.pdf represented by: Scott B. Riddle, Esq. E-mail: sbriddle@mindspring.com In re Olde Savannah Flooring, Inc. Bankr. N.D. Ga. Case No. 12-76136 Chapter 11 Petition filed October 19, 2012 See http://bankrupt.com/misc/ganb12-76136.pdf represented by: Scott B. Riddle, Esq. E-mail: sbriddle@mindspring.com In re Kimberly Kelley Bankr. D. Hawaii Case No. 12-02066 Chapter 11 Petition filed October 19, 2012 In re Dental Care Center, PC Bankr. D. Nebr. Case No. 12-82381 Chapter 11 Petition filed October 19, 2012 See http://bankrupt.com/misc/neb12-82381.pdf represented by: David Grant Hicks, Esq. Pollak & Hicks PC E-mail: dhickslaw@aol.com In re Terrace Management, LLC dba Brick Rainbow Kids Daycare Bankr. D.N.J. Case No. 12-35433 Chapter 11 Petition filed October 19, 2012 See http://bankrupt.com/misc/njb12-35433.pdf represented by: Barry W. Frost, Esq. Teich Groh E-mail: bfrost@teichgroh.com In re Sun Studios, Inc. Bankr. E.D.N.Y. Case No. 12-47436 Chapter 11 Petition filed October 19, 2012 See http://bankrupt.com/misc/nyeb12-47436.pdf represented by: Lawrence Morrison, Esq. The Morrison Law Offices P.C. E-mail: morrlaw@aol.com In re Jeffrey Babb Bankr. N.D. Ohio Case No. 12-17695 Chapter 11 Petition filed October 19, 2012 In re Gerald Neely Bankr. W.D. Tenn. Case No. 12-31335 Chapter 11 Petition filed October 19, 2012 In re Chung Dai Bankr. D. Utah Case No. 12-33411 Chapter 11 Petition filed October 19, 2012 In re Colby Enterprises, LLC dba Pour House Pub Bankr. W.D. Wash. Case No. 12-20626 Chapter 11 Petition filed October 19, 2012 See http://bankrupt.com/misc/wawb12-20626.pdf represented by: Larry B. Feinstein, Esq. Vortman & Feinstein E-mail: feinstein2010@gmail.com In re HBS Food Services Inc. Bankr. C.D. Calif. Case No. 12-45373 Chapter 11 Petition filed October 21, 2012 See http://bankrupt.com/misc/cacb12-45373.pdf represented by: Sammy Zreik, Esq. WHITBECK, KOOSHKI & ZREIK LLP E-mail: sammy.zreik@wkzlaw.com In re Raymond Meglio Bankr. D. Conn. Case No. 12-51905 Chapter 11 Petition filed October 21, 2012 In re Jamdan Associates, LLC dba Heartbreakers Bankr. D. N.J. Case No. 12-35517 Chapter 11 Petition filed October 21, 2012 See http://bankrupt.com/misc/njb12-35517.pdf represented by: Jonathan Greenman, Esq. SAL GREENMAN, PC E-mail: GreenmanLaw@optonline.net ********* 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. 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