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/raid1/www/Hosts/bankrupt/TCR_Public/121115.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, November 15, 2012, Vol. 16, No. 318 Headlines 200 RYAN: Voluntary Chapter 11 Case Summary 4848 LLC: Voluntary Chapter 11 Case Summary A & S INVESTMENT: Case Summary & 3 Largest Unsecured Creditors AGY HOLDING: Incurs $20.4 Million Net Loss in Third Quarter AK STEEL: Moody's Cuts CFR/PDR to 'B2'; Outlook Negative AK STEEL: S&P Cuts Corp Credit Rating to B on Weak Finc'l Metrics ALIANTE MINI: Updated Case Summary & Creditors' Lists ALLIED SYSTEMS: Wants First-Lien Fight Settled in Delaware AMERICAN AIRLINES: Creditors Panel, US Airways Talking This Week AMERICAN AIRLINES: $300-Mil. in Annual Savings From Pilots AMERICAN AIRLINES: Eagle Seeks to Reject Contract With Dispatchers AMERICAN AIRLINES: Wins Jan. 28 Extension for Plan AMERICAN AIRLINES: Seeks to Amend U.S. Bank Processing Deals AMERICAN AIRLINES: Relies on IT to Improve Customer Service AMK REALTY: Case Summary & 6 Largest Unsecured Creditors AMF BOWLING: Has Interim Approval to Draw $35MM From DIP Facility ARCH COAL: Fitch Lowers Issuer Default Rating to 'B' ARCH COAL: Moody's Affirms 'B2' CFR; Rates Senior Notes 'B3' ARCHDIOCESE OF MILWAUKEE: Fights Creditor Parish Litigation Bid ASSOCIATED BANC-CORP: Fitch Affirms 'B' Preferred Stock Rating BAKERS FOOTWEAR: Court Clears to Enter $8.5 Million Exit-Loan Deal BEAR ISLAND: Wants Case Caption Changed to Estate BIPCO BEAZER HOMES: Incurs $145.3 Million Net Loss in Fiscal 2012 BERNARD L. MADOFF: Ivy Asset Settles Investor Suit for $210-Mil. BERNARD L. MADOFF: $206-Mil. Settlement With Beacon/Andover Funds BRAND ENERGY: S&P Gives 'B' Rating on $75-Mil. Revolving Credit BROOKLYN NAVY: S&P Puts 'B' Senior Secured Debt Rating on Watch CASELLA WASTE: Moody's Hikes Rating on $200MM Sub. Notes to 'Caa1' CENGAGE LEARNING: Moody's Cuts CFR to 'Caa3'; Outlook Negative CENTURY INDEMNITY: Fitch Affirms & Withdraws 'B-' IFS CHG HEALTHCARE: S&P Assigns B Corp. Credit Rating; Outlook Stable CLARE OAKS: CliftonLarsonAllen to Conduct Feasibility Study CLEARWATER DEVELOPMENT: EFO Financial Buys Brightwater Club CONSOLIDATED COMMUNICATIONS: Moody's Rates New $515MM Loan 'Ba3' CONSOLIDATED COMMUNICATIONS: S&P Rates $515-Mil. Term Loan 'BB-' CONSTRUCTORA DE HATO: Has Until Nov. 30 to Propose Ch. 11 Plan DEWEY & LEBOEUF: Creditors Seek Right to Sue Ex-Directors DEWEY & LEBOEUF: Committee Asks for Leave to Prosecute Claims DEWEY & LEBOEUF: GEAM Has Relief from Stay to Implement Setoff DIALOGIC INC: Postpones Applications of Financial Covenants DIALOGIC INC: Incurs $290,000 Net Loss in Third Quarter DIGITAL DOMAIN: Bankruptcy Judge Approves Asset Sale EASTMAN KODAK: Escapes Potential Investors Class Action ELDORADO GOLD: S&P Gives 'BB' Corp. Credit Rating; Outlook Stable ELEGANT SURFACES: Voluntary Chapter 11 Case Summary ELPIDA MEMORY: At Odds With Bondholders on U.S. Court Role ELPIDA MEMORY: Nanya Drops ITC Patent Suit EMERALD COAST: Case Summary & 20 Largest Unsecured Creditors EVANS OIL: Borrows $500,000 to Purchase Fuel From Chevron EVANS OIL: Naples Lending Wants to Foreclose Rolling Stock EVANS OIL: Wants to Surcharge Fifth Third Bank's Collateral FERRY HOUSE: Owner Reopens Restaurant After State's Seizure FIFTY BELOW: ARI Acquires Retail Division Assets FIRST DATA: Incurs $212 Million Net Loss in Third Quarter FIRST PLACE: Retains DRC as Ch. 11 Claims & Noticing Agent FISHER ISLAND: Hearing on Case Dismissal Continued Until Dec. 17 FLETCHER INT'L: Chapter 11 Trustee Wins Subpoena Power FONTAINEBLEAU L.V.: WTC Seeks Valuation of Property Sold FONTAINEBLEAU L.V.: Trustee Settles Disputes With Digitek, et al. FRESH N' PURE: Case Summary & 20 Largest Unsecured Creditors GARY DOURDAN: Former CSI Actor in Bankruptcy GATZ PROPERTIES: High Court Upholds Ruling on Manager's Liability GENTIVA HEALTH: S&P Revises Outlook on 'B-' CCR on Higher Margins GLOBAL AVIATION: Seeks Approval of Diligence Fees GLOBAL AVIATION: Seeks Global Settlement Approval GOODRICH PETROLEUM: S&P Lowers Corporate Credit Rating to 'B-' GRAFTECH INT'L: Moody's Affirms 'Ba1' CFR; Rates Sr. Notes 'Ba2' GRAFTECH INT'L: S&P Gives 'BB+' Rating on New $300MM Senior Notes HAWKER BEECHCRAFT: Taps Korn/Ferry as Director Search Consultant HEALTHCARE PARTNERS: Moody's Withdraws 'Ba2' CFR/PDR HMX ACQUISITION: Nov. 20 Deadline to File Schedules and SOFA HMX ACQUISITION: Dec. 10 Auction of Substantially All Assets HMX ACQUISITION: Hearing Tomorrow on Cash Collateral HOSTESS BRANDS: Strike Didn't Cause Closures, Says Union HRK HOLDINGS: Gets Final Nod to Obtain $125,000 DIP Financing INTEGRATED HEALTHCARE: Reports $2.4MM Net Income in Fiscal Q2 JAS & ASSOCIATES: Court Wants Plan Outline Revised JC PENNEY: Dismal 3rd Qtr. Performance Cues Fitch to Lower Ratings JDV PROPERTIES: Case Summary & 11 Largest Unsecured Creditors KLITZMAN-CURRELL: Case Summary & 7 Largest Unsecured Creditors JOHN SAMMUT: Court Won't Revise Order Denying Ch.11 Conversion KNOTTY PINE: In Receivership, Sells Pub & Grill LAKE COOK: Voluntary Chapter 11 Case Summary LATITUDE SOLUTIONS: Files Chapter 7 Petition LEE ENTERPRISES: Posts $7.7 Million Net Loss in Fiscal 4th Qtr LEGACY RESERVES: S&P Assigns 'B' Corp. Credit Rating LEHMAN BROTHERS: Lawyers Disagree on Length of Briefs LON MORRIS COLLEGE: Assets to Be Sold in Dec. 13 Auction M&M STONE: Voluntary Chapter 11 Case Summary MALLARDS HOLDINGS: Court Wants Plan Outline Revised MBIA INC: Asks Bondholders to Shield Firm from Bankruptcy MERRIMACK PHARMACEUTICALS: FMR LLC Discloses 17% Equity Stake METALDYNE LLC: S&P Affirms 'B+' CCR on Proposed Refinancing MF GLOBAL: House Panel Says Corzine Decisions Led to Bankruptcy NATIONAL CINEMEDIA: Moody's Rates $375MM Bank Facilities 'Ba2' NEW ENERGY: Case Summary & 20 Largest Unsecured Creditors NEW PEOPLES: Incurs $1.5 Million Net Loss in Third Quarter NEWPAGE CORP: Defends Settlement With Cerberus NORTHERN TOOL: Moody's Assigns 'Ba3' CFR/PDR; Outlook Stable NORTHERN TOOL: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable NORTHWEST PARTNERS: Trustee to Disburse Revenue Fund to Fannie Mae OMEGA NAVIGATION: Nordbank Wants Case Converted to Chapter 7 OVERSEAS SHIPHOLDING: Seeks Bankruptcy Protection From Creditors OVERSEAS SHIPHOLDING: Case Summary & 50 Largest Unsec. Creditors OXLEY DEVELOPMENT: Unable to Reorganize; Case Dismissed PA ACADEMY OF MUSIC: US Trustee Protests Counsel's Fees PACESETTER FABRICS: Hearing on Case Dismissal Set for Nov. 19 PACIFIC JET: Client Sues Shearman & Sterling for Malpractice PCF SALECO: Reply to Involuntary Bankruptcy Due Nov. 30 PHOENIX SERVICES: S&P Lowers CCR to 'B' on Higher Leverage POMONA VALLEY: S&P Corrects Rating on Series 2002 Rev Bonds to 'B' PONCE DE LEON: Taps Christiansen & Portela as Real Estate Broker PROCESS AMERICA: Files for Chapter 11 in Woodland Hills PROVIDENT BUILDING: Heading Into Foreclosure QUANTUM FUEL: Incurs $9.4-Mil. Net Loss in Sept. 30 Quarter R.E. LOANS: Terra Verde Buys Rancho Las Flores RAHA LAKES: Taps Daum Commercial to Market Los Angeles Properties RAHA LAKES: Wants to Hire Kogan Law as Bankruptcy Counsel REALTY AMERICA: Case Summary & 2 Unsecured Creditors REEF GLOBAL: Incurs $83,000 Net Loss in Third Quarter REEVES DEVELOPMENT: Wins OK to Hire Steffes Vingiello as Counsel REEVES DEVELOPMENT: Sec. 341 Creditors' Meeting Set for Dec. 6 REEVES DEVELOPMENT: Status Conference Slated for April 2013 RESERVE PRIMARY: NY Jury Clears 2 Fund Managers of Fraud REX ENERGY: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable ROCHA DAIRY: U.S. Trustee Balks at Plan Confirmation ROOMSTORE INC: Approved to Sell Mattress Discounters Stake RW LOUISVILLE: Buyer Backs Out; Wells Fargo to Own Hotel SAAB CARS: Ally's Liquidation Plan Would Be Unnecessary, Saab Says SABA BUILDING: Case Summary & 2 Largest Unsecured Creditors SADDLEBACK INN: Santa Ana Seeks Receivership SAGAMORE PARTNERS: Taps Goldstein Mendez for Accounting Services SAGAMORE PARTNERS: Taps Meckler Bulger as Fees Expert SAGAMORE PARTNERS: Taps Mack Law, et al., as Litigation Counsel SAHARA MOTEL: Case Summary & Unsecured Creditor SANTA FE GOLD: Incurs $2.4-Mil. Net Loss in Q1 Ended Sept. 30 SATCON TECHNOLOGY: Seeks to Delay Auction to March From January SATCON TECHNOLOGY: Taps Epiq Bankruptcy as Administrative Agent SATCON TECHNOLOGY: Taps Greenberg Traurig as Bankruptcy Counsel SATCON TECHNOLOGY: Wants Vendor Claims Capped at $6 Million SATCON TECHNOLOGY: Delays Q3 Form 10-Q Due to Bankruptcy Filing SAUNDERS RUDASILL: Court Prefers Lender's 100% Plan Over Debtor's SAUNDERS HOTELS: Court Prefers Lender's 100% Plan Over Debtor's SEAFRANCE SA: Eurotunnel Wins OK on EUR65M Channel Ferry Buy SEARCHMEDIA HOLDINGS: Shirley Liu Named Chief Financial Officer SEMGROUP LP: NY Court Dismisses Creditors' Suit Against Barclays SEQUENOM INC: Incurs $30.2 Million Net Loss in Third Quarter SHUKAN INC.: Case Summary & 9 Largest Unsecured Creditors SOFTLAYER TECHNOLOGIES: Moody's Assigns 'B1' Corp. Family Rating SUNDANCE SELF STORAGE: Court Tells Counsel to Disgorge Fees THOMPSON CREEK: Moody's Affirms 'Caa1' CFR/PDR; Rates Notes 'B1' TRIBUNE CO: Works With CBRE to Promote Leasable Spaces TWO & THREE: Case Summary & 5 Largest Unsecured Creditors US AIRWAYS: Moody's Raises Corp. Family Rating to 'B3' VANN'S INC: Changes Company Name, Selects Regelbrugge as New CEO WEATHERFORD INT'L: Moody's Affirms '(P)Ba1' Pref. Shelf Rating WEST 380: Case Summary & 20 Largest Unsecured Creditors WEST PENN: Moody's Cuts Bond Rating to 'Ca'; Outlook Negative ZIFF DAVIS: J2 Global Acquires Assets for $167 Million Cash * Moody's Says Sovereign Restructurings Reduce Debt Levels * Moody's Says Number of "Fallen Angels" Declines Sharply * Moody's Says LIBOR Litigation Greater Risk to Bank Ratings * Recent Small-Dollar & Individual Chapter 11 Filings ********* 200 RYAN: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: 200 Ryan, LLC c/o Daniel Walsh 700 North Water Street, Suite 400 Milwaukee, WI 53202 Bankruptcy Case No.: 12-36113 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Judge: Margaret Dee McGarity Debtor's Counsel: Kathryn L. Mayer, Esq. KERKMAN & DUNN 757 N. Broadway, Suite 300 Milwaukee, WI 53202 Tel: (414) 277-8200 E-mail: kmayer@kerkmandunn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Daniel J. Walsh, member. 4848 LLC: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: 4848, LLC c/o Daniel Walsh 700 North Water Street, Suite 400 Milwaukee, WI 53202 Bankruptcy Case No.: 12-36114 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Eastern District of Wisconsin (Milwaukee) Judge: Margaret Dee McGarity Debtor's Counsel: Kathryn L. Mayer, Esq. KERKMAN & DUNN 757 N. Broadway, Suite 300 Milwaukee, WI 53202 Tel: (414) 277-8200 E-mail: kmayer@kerkmandunn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Daniel J. Walsh, member. A & S INVESTMENT: Case Summary & 3 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: A & S Investment Corporation 8422 Petaloma Drive Sun Valley, CA 91352 Bankruptcy Case No.: 12-19911 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Alan M. Ahart Debtor's Counsel: R. Grace Rodriguez, Esq. LAW OFFICES OF R. GRACE RODRIGUEZ 21000 Devonshire St., Ste 111 Chatsworth, CA 91311 Tel: (818) 734-7223 Fax: (818) 338-5821 E-mail: ecf@lorgr.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its three largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-19911.pdf The petition was signed by Steven Rushtabadi, president. AGY HOLDING: Incurs $20.4 Million Net Loss in Third Quarter ----------------------------------------------------------- AGY Holding Corp. reported a net loss of $20.42 million on $39.51 million of net sales for the three months ended Sept. 30, 2012, compared with a net loss of $7.87 million on $46.60 million of net sales for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $33.69 million on $133.11 million of net sales, in comparison with a net loss of $21.10 million on $141.54 million of net sales for the same period a year ago. AGY Holding reported a net loss of $66.76 million in 2011, a net loss of $14.57 million in 2010, and a net loss of $93.51 million in 2009. AGY Holding's balance sheet at Sept. 30, 2012, showed $216.42 million in total assets, $289.42 million in total liabilities, and a $73 million total shareholders' deficit. "The overall market conditions for the third quarter were challenging as the electronics and industrial markets were negatively impacted by management of inventory levels by our customers," said Richard Jenkins, interim CEO, AGY Holding Corp. "However, we remain on pace to outperform our S-2 sales expectations for the year. Operationally, we continue to realize cost and efficiency improvements while adjusting capacity to meet current demand levels. Our quality improvement programs are building on the heritage of producing top quality products for our customers. With these advancements, we remain driven and focused on achieving our business plan goals for 2012." A copy of the press release is available for free at: http://is.gd/kL3QTR About AGY Holding AGY Holding Corp. -- http://www.agy.com/-- produces fiberglass yarns and high-strength fiberglass reinforcements used in composites applications. AGY serves a range of markets including aerospace, defense, electronics, construction and industrial. Headquartered in Aiken, South Carolina, AGY has a European office in Lyon, France and manufacturing facilities in the U.S. in Aiken, South Carolina and Huntingdon, Pennsylvania and a controlling interest in a manufacturing facility in Shanghai, China. * * * As reported by the TCR on Nov. 23, 2011, Moody's Investors Service lowered AGY Holding Corporation's (AGY) Corporate Family Rating (CFR) to Caa2 from B3, reflecting the decline in the company's liquidity and weak operating performance. In the Dec. 5, 2011, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Aiken, S.C.-based AGY Holding Corp. (AGY) to 'CCC-' from 'CCC+'. "Our rating action reflects our view that AGY's credit quality has deteriorated due to ongoing weakness in its operating performance, a decline in liquidity, and the potential for insufficient liquidity to meet interest payments in 2012. As of Sept. 30, 2011, the company reported total liquidity of $17 million including $16.2 million of availability under its unrated revolving credit facility. AGY reported that it expected liquidity to decline to levels of around $12.4 million in November following the payment of nearly $10 million in semiannual interest on its notes. It also expects effective availability to be lower than the reported figures, because the company is also subject to a fixed-charge coverage ratio covenant if availability under its revolving credit facility declines to below $6.25 million. We do not expect to be in compliance if the covenant becomes applicable. Current liquidity levels have declined from our expectations of a minimum liquidity of $20 million at the previous rating. Key credit risks, in our view, are liquidity insufficient to meet requirements (including approximately $20 million in future interest payments in 2012). An additional risk is potential liquidity requirements possibly arising from the put option available with the seller of AGY Hong Kong Ltd. for the remaining 30% of the company not yet purchased by AGY. The put option can be exercised through Dec. 31, 2013. AGY reports a fair value of about $0.23 million for the remaining 30% of the AGY Hong Kong Ltd. as of Sept. 30, 2011 -- a decline from an initial estimated value of about $12 million in 2009. AGY Hong Kong also has about $10.5 million of debt, which the company reports it is trying to extend, and approximately $11.5 million in annually renewable working capital facilities due in 2012 (debt at AGY Hong Kong is nonrecourse to AGY)," S&P said. AK STEEL: Moody's Cuts CFR/PDR to 'B2'; Outlook Negative -------------------------------------------------------- Moody's Investors Service downgraded the corporate family and probability of default ratings of AK Steel Corporation to B2 from B1 and downgraded the senior unsecured notes and revenue funding bonds to B3 from B2. At the same time, Moody's assigned a B1 rating to the $350 million in senior secured notes due 2018 and a B3 rating to the $125 million exchangeable notes due 2019. The speculative grade liquidity rating remains unchanged at SGL-3. The outlook is negative. This concludes the review for downgrade initiated on September 21, 2012. Ratings Rationale The downgrade of the corporate family rating to B2 reflects AK Steel's tightening and weak debt protection metrics and increasing leverage position as challenging conditions in the steel industry continue to compress earnings and cash flow generation. Given the relatively static demand levels, downward trend evidenced in industry capacity utilization levels, and pressure on pricing, Moody's does not expect the company's performance to evidence the level of improvement necessary to be consistent with a B1 corporate family rating over the next eighteen months. Pro forma for the new debt issuance and repayment of outstandings under the asset back revolver Moody's estimates leverage, as measured by the debt/EBITDA ratio to be around 13x. Interest coverage is expected to continue negative to breakeven over the next several quarters. The B2 corporate family rating considers AK Steel's position as a mid tier steel producer with shipments of approximately 5.4 million tons for the twelve months to September 30, 2012. The company's business mix including a meaningful level of value added products, including coated, electrical and stainless products, as well as its strong contract position are supporting factors in the rating. The rating also captures Moody's expectation that the company's cost position challenges will ease somewhat over the next several quarters given the declines that have been seen in iron ore and coking coal prices, although this improvement is unlikely to make a material change given continued price challenges. The improved liquidity from the debt and equity issues also supports the rating. However, the company's ability to generate meaningful earnings and cash flow will remain vulnerable to the current level of economic uncertainty surrounding growth rates in the US and China as well as the European sovereign debt crisis and poor economic conditions in Europe. Although AK Steel's business is more exposed to the flat rolled market and not the long products market, Moody's believes the overall industry will continue to face a difficult recovery as long as the important commercial construction market is unable to evidence a good recovery off an extremely depressed level. The negative outlook reflects Moody's view that industry risks continue to the downside. Should hot rolled prices and utilization levels fall much below current run rates or appear sustainable at only about $600/ton and 70% respectively, the company's financial profile would deteriorate further. Given the company's weak metrics and Moody's expectations for industry conditions in 2013 to not be materially different from 2012, a rating upgrade is unlikely over the next twelve to eighteen months. Should conditions show some level of sustainable improvement and improving trends, the outlook could be stabilized. The rating could be downgraded should the company's liquidity position deteriorate materially due to ongoing losses and cash burn, EBIT margins not evidence an improving trend to at least 2.5%, EBIT/interest of at least 2x and debt/EBITDA of no greater than 10x. The principal methodology used in rating AK Steel was the Global Steel Industry Methodology published in October 2012. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in West Chester, Ohio, AK Steel is a middle tier, integrated steel company producing flat-rolled carbon steels. Revenues for the twelve months through September 30, 2012 were $6.0 billion. AK STEEL: S&P Cuts Corp Credit Rating to B on Weak Finc'l Metrics ----------------------------------------------------------------- Standard & Poor's Ratings Services lowered the ratings, including the corporate credit rating on AK Steel Holding Corp. to 'B' from 'B+'. The rating outlook is stable. "At the same time, we assigned a 'BB-' (two notches above the corporate credit rating) issue-level rating and '1' recovery rating to the company's proposed $350 million of senior secured notes due 2018. The '1' recovery rating indicates our expectation of a very high (90%-100%) recovery in the event of a payment default. We also assigned a 'B-' (one notch below the corporate credit rating) issue-level rating and '5' recovery rating to the proposed $125 million of senior exchangeable notes due 2019. The '5' recovery rating indicates an expectation for modest (10%-30%) recovery in the event of a payment default," S&P said. The company intends to use the net proceeds from these offerings to repay borrowings under its asset-backed revolving credit facility and for general corporate purposes. "We also lowered the issue level rating on the company's existing senior notes to 'B-' from 'B+' and revised the recovery rating to '5' from '3', reflecting the higher amount of secured debt in the capital structure," S&P said. "The downgrade reflects our assessment that AK Steel's financial metrics will remain weak because of continuing difficult competitive conditions, including uneven demand, excess capacity, volatile prices, and high debt levels," said credit analyst Marie Shmaruk. "We also note that weaker markets globally, mainly a result of Eurozone uncertainties and slowing growth in China, will limit the near-term growth in the U.S. economy and continue to weigh on pricing in the steel markets." "The outlook is stable, reflecting our expectation that the company's strong liquidity will support its operations through this weak period even if market conditions do not improve much in 2013. The company's results will likely slowly improve along with the economy, in our view, as pricing improves modestly and raw material costs moderate. Still, we expect credit measures to remain elevated during the next year or so, with adjusted debt to EBITDA of about 7x by the end of 2013 and FFO-to-debt of about remaining below 10%," S&P said. ALIANTE MINI: Updated Case Summary & Creditors' Lists ----------------------------------------------------- Lead Debtor: Aliante Mini Storage Partners, LLC 2990 Durango Drive Las Vegas, NV 89117 Bankruptcy Case No.: 12-22585 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce A. Markell Debtor's Counsel: Talitha Gray Kozlowski, Esq. GORDON & SILVER, LTD. 3960 Howard Hughes Pkwy., 9th Floor Las Vegas, NV 89169 Tel: (702) 796-5555 E-mail: tgray@gordonsilver.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed separate Chapter 11 petitions: Debtor Case No. ------ -------- Craig Road Mini Storage Partners, LLC 12-22588 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 Horse Mini Storage Partners LLC 12-22590 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by James M. Meservey, manager of StorageOne JK Management Group, Debtor's manager. A. A copy of Aliante Mini Storage Partners, LLC's list of its 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb12-22585.pdf B. A copy of Craig Road Mini Storage Partners, LLC 's list of its 14 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb12-22588.pdf C. A copy of Horse Mini Storage Partners LLC's list of its 17 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nvb12-22590.pdf Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Farm Mini Storage Partners, LLC 12-22486 11/06/12 ALLIED SYSTEMS: Wants First-Lien Fight Settled in Delaware ---------------------------------------------------------- Jamie Santo at Bankruptcy Law360 reports that Allied Systems Holdings Inc. and private equity firm The Yucaipa Cos. LLC, its largest first-lien holder, fired back in Delaware bankruptcy court Friday against the plan of competing first-lien creditors to settle their long-standing status fight in New York state court. Bankruptcy Law360 relates that Allied's Chapter 11 case has been stalled by the first-lien fight over which creditor has "requisite lender" status, which enables the holder to take action on behalf of the other first-lien creditors. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. AMERICAN AIRLINES: Creditors Panel, US Airways Talking This Week ---------------------------------------------------------------- Mary Schlangenstein, writing for Bloomberg News, reports that US Airways Group Inc. presented its merger plans to American Airlines' unsecured creditors committee, three people familiar with the matter said. The panel's session on Nov. 14 with US Airways will be followed by a meeting today, Nov. 15, with representatives of American, which seeks to exit court protection as a stand-alone carrier, said the people, who asked not to be identified because the talks are private. The meetings are in New York. "From the creditors committee perspective, whatever the two parties are proposing has to be finalized at some point, and the sooner the better," said Bob Mann, president of aviation consultant R.W. Mann & Co. in Port Washington, New York, according to the report. According to Bloomberg, Jack Butler, an attorney for the creditors committee, said in a statement, "American is participating this week at the committee's regularly scheduled in-person monthly meeting, at which various business matters, including the strategic alternatives process, will be discussed." The report notes Mr. Butler declined to comment on the Nov. 14 meeting. The report also notes Todd Lehmacher, a spokesman for Tempe, Arizona-based US Airways, declined to comment about the talks, as did Andy Backover, an American spokesman. American has won continued control of its case after Bankruptcy Judge Sean Lane in New York agreed to extend to Jan. 28 the airline's so-called exclusive periods to file a plan of reorganization. Bloomberg says that has kept US Airways from making a formal merger offer in court. "Maybe we are not going to have to wait until the end of the first quarter to find out what the plan is here," said Fred Lowrance, an Avondale Partners LLC analyst in Nashville, Tennessee, according to the report. Mr. Lowrance said the discussions suggest that creditors "want to feel comfortable that they have all the information to make a comparison." A combination of US Airways, the fifth-biggest U.S. airline, and No. 3 American would create the world's largest carrier by passenger traffic, surpassing United Continental Holdings Inc. and Delta Air Lines Inc. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: $300-Mil. in Annual Savings From Pilots ---------------------------------------------------------- The Allied Pilots Association said AMR Corp., parent of American Airlines Inc., has agreed with the union on language for a new labor deal to be voted on by union members, Reuters reported. The union's board on Friday presented a "counter-proposal" to offers from AMR management, which the company accepted. The contract must be ratified by APA's roughly 7,500 pilots. APA spokesman Dennis Tajer said the tentative deal was "industry- standard, which has been our goal all along." He refused to disclose specifics on the deal, according to the report. Meanwhile, AMR spokesman Bruce Hicks said the tentative deal addresses the priorities identified as most important to the pilots while also being economically feasible enough "to ensure American's successful restructuring." Although details of the deal were not immediately disclosed, earlier union bulletins suggested it will have a six-year duration, provide a date-of-signing raise of 4%, and then two 2% annual raises, the mid-contract adjustment and two more raises of 2%, according to The Wall Street Journal's Susan Carey. The Journal noted that AMR is seeking more than $300 million in annual savings from the pilots. If the pilots agree to the new deal in the coming weeks, AMR would be on course to reduce its annual labor expenses by about $1 billion, the Journal said. The union board voted 13-2 to send the tentative deal with AMR to pilots for a vote. Union leaders will brief members on the deal in a series of roadshows ahead of a vote, Reuters reported. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Eagle Seeks to Reject Contract With Dispatchers ------------------------------------------------------------------ American Eagle Airlines Inc. asked Judge Sean Lane to approve the cancellation of its labor contract with dispatchers. The Transport Workers Union of America, which represents the dispatchers at American Eagle, had opposed the proposed cancellation of the labor agreement. The union said the airline does not need $400,000 per year in savings from the dispatchers but only $250,000. In court papers, lawyer for American Eagle dismissed that argument, saying that if the union believes the company does not need $400,000, the union would not have made a counterproposal worth $491,000 per year. "If TWU 's leaders truly believed Eagle did not need $400,000, it would not have offered to exceed that sum by nearly 20 percent," said Todd Duffield, Esq., at Weil Gotshal & Manges LLP, in New York. Mr. Duffield also said the union's objection is silent on the fact that American Eagle cannot compete unless it can lower its labor costs significantly. American Eagle previously reached a tentative agreement for changes to the labor contract with dispatchers that would help achieve the company's target of $400,000 in annual savings. Although the agreement was endorsed by TWU, the dispatchers still voted to reject the changes. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Wins Jan. 28 Extension for Plan -------------------------------------------------- The U.S. Bankruptcy Court in Manhattan granted AMR Corp. and the committee representing the airline's unsecured creditors additional time to file a Chapter 11 plan and solicit support for the plan. In a November 9 decision, the bankruptcy court approved the joint motion of AMR and the committee to extend the deadline for filing the plan to January 28, 2013, and for soliciting votes from creditors to March 28, 2013. Mike Trevino, AMR spokesman, said they are pleased by the bankruptcy court's approval of their joint motion to extend the exclusivity periods, MENAFN.com reported. "We believe the extension reflects the progress and momentum of our restructuring efforts as reflected in our third quarter results, and we will continue to move aggressively to complete both our plan and our comprehensive process of reviewing a full range of alternatives," the news agency quoted Mr. Trevino as saying. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Seeks to Amend U.S. Bank Processing Deals ------------------------------------------------------------ AMR Corp. filed a motion seeking approval from the U.S. Bankruptcy Court for the Southern District of New York to amend certain agreements between American Airlines Inc. and U.S. Bank N.A. The agreements cover the processing of customer transactions using credit cards issued by Visa Inc. and MasterCard Inc. at different locations where American Airlines and its affiliated debtors sell their products. The term of each of the agreements is set to expire on July 1, 2013. The proposed amendment, if approved by the bankruptcy court, would allow American Airlines to continue processing customer transactions made using VISA and MasterCard credit cards in the ordinary course of business. The agreements are not publicly available as they reportedly contain confidential information, according to the court filing. AMR also seeks court approval to reaffirm the guaranty dated March 16, 2007, under which the company guarantied the obligations of American Airlines under its agreements with U.S. Bank. A court hearing to consider approval of the request is scheduled for November 29. Objections are due by November 21. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Relies on IT to Improve Customer Service ----------------------------------------------------------- Michael Hickins, writing for The Wall Street Journal's CIO Journal, reports that American Airlines is relying heavily on IT as it struggles to emerge from bankruptcy proceedings in stronger shape than before. Some of the new technology, such as mobile technology used by cabin crew and consumer apps to get customers faster access to relevant information, will be visible to fliers. Other, less visible technology initiatives are helping in other ways, from customer service issues like baggage handling and on- time departures to the strategic choices around which new routes the airline will add in the coming months. According to CIO Journal, American has just completed a several- months long experiment in customer service by providing flight attendants with tablet computers that give them information for passengers seated in first class -- or, for that matter, loyal customers seated in the main cabin. The mobile platform also be used to more quickly report problems such as broken seats or incorrect meal deliveries. CIO Jounal relates AMR's CIO, Maya Leibman, said the airline will begin distributing Samsung Galaxy Note tablets to all flight attendants beginning later this month. It will take several months before all flight attendants have gone through the training necessary for them to use the tablets in flight, but the tablets got rave reviews from the personnel who got to use them during the test phase. Ms. Leibman told CIO Journal that American is the only U.S. carrier to provide tablet computers for its cabin crew. British Airways has distributed iPads to 1,200 flight attendants, as CIO Journal reported in April, but Ms. Leibman says BA only gives tablets to pursers, whereas American's deployment is to all onboard flight attendants. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMK REALTY: Case Summary & 6 Largest Unsecured Creditors -------------------------------------------------------- Debtor: AMK Realty LLC 815 Kings Highway Brooklyn, NY 11223 Bankruptcy Case No.: 12-47780 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtor's Counsel: Kevin J. Nash, Esq. GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP 1501 Broadway, 22nd Floor New York, NY 10036 Tel: (212) 301-6944 Fax: (212) 422-6836 E-mail: KNash@gwfglaw.com Scheduled Assets: $1,754.800 Scheduled Liabilities: $2,594,603 A copy of the Company's list of its six largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nyeb12-47780.pdf The petition was signed by Alexander Klein, managing member. AMF BOWLING: Has Interim Approval to Draw $35MM From DIP Facility ----------------------------------------------------------------- Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review, reports that Bankruptcy Judge Kevin R. Huennekens, at Tuesday's hearing, allowed AMF Bowling Worldwide Inc. to draw $35 million of the $50 million bankruptcy loan. DBR notes the Debtors' restructuring plan likely won't go up for court approval for a few months. The Bankruptcy Court will hold a final hearing on Dec. 6, 2012, at 10:00 a.m. As reported by the Troubled Company Reporter, AMF has secured a commitment for debtor-in-possession financing from certain of its existing first lien secured lenders for $50 million. Subject to Court approval, these funds will be available to satisfy obligations associated with conducting AMF's business, including payment for goods and services provided after the filing. The DIP facility provides $30 million of new credit and the remaining $20 million will be in the form of letters of credit that "replace" letters of credit that are presently outstanding under the First Lien Credit Agreement. First-lien lenders providing the new financing are Liberty Harbor Master Fund LP, Midtown Acquisitions LP, and funds affiliated with Credit Suisse Group AG and Goldman Sachs Group Inc. The TCR on Nov. 14 reported that objections were filed to AMF's proposed plan and DIP facility by Cerberus Series Four Holdings, LLC, and JPMorgan Chase Bank, N.A., holder of $55.2 million in principal amount of debt owed under the second lien credit agreement (constituting 69.9% of the second lien debt outstanding) and $24.6 million of first lien debt (constituting 11.5% of the first lien debt). According to JPM and Cerberus, the Ad Hoc Group of First Lien Lenders have attempted to stifle other constituents, including in particular Cerberus and JPM, from being able to participate effectively in the Chapter 11 cases. According to JPM and Cerberus, the plan is designed to solely benefit the First Lien Lenders. Despite numerous requests, the Debtors and the Ad Hoc Group of First Lien Lenders refused to share this agreement with the Ad Hoc Group of Second Lien Lenders before filing it, says counsel to JPM and Cerberus. A Restructuring Support Agreement with the Debtors' First Lien Lenders obligates the Debtors to conduct an auction of their businesses, but an auction in which no bid will be acceptable unless it pays the entire First Lien Debt in cash -- approximately $215 million -- even if parties were willing to bid significantly more than $215 million in consideration consisting partly in cash and partly in other forms of consideration. According to the Second Lien Lenders, the "backstop" provision in the RSA would essentially wipe out all stakeholders other than the First Lien Lenders, while the First Lien Lenders would receive $130 million in cash (approximately 60% of what is owed on the First Lien Debt) and 100% of the equity in reorganized AMF. Second Lien Lenders would receive out of the money warrants for 10% of the equity, while other unsecured creditors would receive their pro rata share of a paltry $300,000. Such a plan could not be confirmed for a variety of reasons, including the fact that the Ad Hoc Group of First Lien Lenders is seeking to take value that would result in more than a 100% recovery. The Second Lien Lenders also point out they have offered to provide DIP financing on substantially more attractive terms -- interest lower by 1.75%, 11 months longer term, no need to roll up the $20 million of prepetition letters of credit, and greater flexibility with respect to covenants and restrictions placed on the Debtors. Even so, the Second Lien Lenders point out that they are not objecting to the DIP Financing. However, they do object to the ancillary agreements contained in the DIP Financing Agreement and the proposed provisions concerning use of cash collateral that would largely lock these cases into a path that leads inexorably to the inappropriate plan that is the subject of the Restructuring Support Agreement and would attempt to muzzle the Ad Hoc Group of Second Lenders. Among other things, the DIP Credit Agreement provides that it will be an Event of Default if the Debtors lose their exclusive right to file a plan or if anyone files a plan of reorganization other than the "Plan." In addition, it will be an Event of Default under the DIP Credit Agreement if (i) the Debtors fail to file the "Plan" and a related "Disclosure Statement," each of which "are in form and substance to the DIP Agent at the direction of the Required DIP Lenders," within 90 days of the petition date, (ii) the Court fails to approve that Disclosure Statement in an order "in form and substance satisfactory to the DIP Agent at the direction of the Required DIP Lenders," within 120 days of the petition date, (iii) this Court fails to enter the "Plan Confirmation Order "in form and substance satisfactory to the DIP Agent at the direction of the Required DIP Lenders" within 160 days of the petition date, or (iv) the "Plan" is not consummated within 180 days of the petition date. About AMF Bowling Worldwide AMF Bowling Worldwide Inc. is the largest operator of bowling centers in the world. With clusters of centers located in key metropolitan markets and unparalleled geographic diversity outside metropolitan areas, AMF currently operates 262 bowling centers across the United States and, through its non-Debtor facilities, 8 bowling centers in Mexico. AMF operates more than three times the number of bowling centers of its closest competitor, and it employs roughly 7,000 people. AMF and several affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case Nos. 12-36493 to 12-36508) on Nov. 12 and 13, 2012, after reaching an agreement with a majority of its secured first lien lenders and the landlord of a majority of its bowling centers to restructure through a first lien lender-led debt-for-equity conversion, subject to higher and better offers through a marketing process. Debt for borrowed money totals $296 million, including $216 million on a first-lien term loan and revolving credit, and $80 million on a second-lien term loan. Mechanicsville, Virginia-based AMF first filed for bankruptcy reorganization in July 2001 and emerged with a confirmed Chapter 11 plan in February 2002 by giving unsecured creditors 7.5% of the new stock. The bank lenders, owed $625 million, received a combination of cash, 92.5% of the stock, and $150 million in new debt. At the time, AMF had over 500 bowling centers. Judge Hon. Kevin R. Huennekens oversees the 2012 case, taking over from Judge Douglas O. Tice, Jr. Patrick J. Nash, Jr., Esq., Jeffrey D. Pawlitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP; and Dion W. Hayes, Esq., John H. Maddock III, Esq., and Sarah B. Boehm, Esq., at McGuirewoods LLP, serve as the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker and financial advisor. McKinsey Recovery & Transformation Services U.S., LLC, serves as the Debtors' restructuring advisor. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. Kristopher M. Hansen, Esq., Sayan Bhattacharyya, Esq., and Marianne S. Mortimer, Esq., at Stroock & Stroock & Lavan LLP; and Peter J. Barrett, Esq., and Michael A. Condyles, Esq., at Kutak Rock LLP, represent the first lien lenders. An ad hoc group of second lien lenders are represented by Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran, PLC; and Ben H. Logan, Esq., Suzzanne S. Uhland, Esq., and Jennifer M. Taylor, Esq., at O'Melveny & Myers LLP. The petitions were signed by Stephen D. Satterwhite, chief financial officer/chief operating officer. ARCH COAL: Fitch Lowers Issuer Default Rating to 'B' ---------------------------------------------------- Fitch Ratings has downgraded the Issuer Default Rating (IDR) and senior unsecured notes to 'B' from 'B+' for Arch Coal, Inc. (Arch Coal; NYSE: ACI). In addition, Fitch assigns a 'B/RR4' rating to the prospective $350 million, seven year senior unsecured notes. The Rating Outlook is Negative. Arch Coal announced plans for a new $250 million term loan and a reduction in its revolver to $350 million from $600 million. Together with the $350 million new notes, the net proceeds estimated at $570 million will enhance liquidity. Arch Coal benefits from large, well diversified operations and good control of low-cost production. The credit ratings also reflect oversupply in the domestic steam coal market which is expected to result in substantially lower earnings through at least 2013. Visibility is constrained given lower than historic levels of committed tonnage. Weak earnings and high debt levels post the acquisition of International Coal Group in 2011 will result in high leverage metrics over the period offset by strong liquidity. At Sept. 30, 2012, pro forma liquidity remains solid, with cash on hand estimated at $1.2 billion and $350 million of availability estimated under the company's credit facilities. The $250 million accounts receivable facility matures Dec. 11, 2012, and is renewable annually. The $600 million (reducing at transaction close to $350 million) revolving credit facility matures in June 2016. Fitch expects Arch Coal to manage within the amended covenants. Fitch expects slight negative free cash flows (operating cash flow less capital expenditures less dividends) for 2012. Negative free cash flows could be between $300 million and $500 million for 2013 depending on actual volumes and pricing. Pro forma current maturities are quite modest reflecting $16.5 million in term loan amortization per year and amounts due under the annually renewable accounts receivable facility ($100 million as of Sept. 30, 2012). Total debt/EBITDA for the latest 12 months ended Sept. 30, 2012 was 5.2x. Fitch expects leverage could be above 6.5x until the domestic steam coal market achieves balance which could stretch into 2014. The recovery rating on the senior secured bank facility of 'RR1' reflects outstanding recovery prospects given default. Fitch's methodology counts undrawn revolver balances as senior secured debt so that the only change from the transaction is the additional $350 million senior unsecured debt which dilutes coverage at that level slightly. Recovery of the senior unsecured debt remains average. The Negative Outlook reflects the possibility that weak market conditions could drag into 2014 and that Arch has sufficient liquidity to manage through the downturn. What Could Trigger A Rating Action? Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Should anticipated cash burn be greater than $400 million in 2013. -- Constrained liquidity. Positive: Not anticipated over the next 12 months given over supply in the domestic steam coal market but future developments that may lead to a positive rating action include: -- Debt levels material reduced and positive free cash flow on average. Fitch has taken the following rating actions: Arch Coal, Inc. -- IDR downgraded to 'B' from 'B+'; -- Senior unsecured notes downgraded to 'B/RR4' from 'B+RR4'; -- Senior secured revolving credit facility affirmed at 'BB/RR1'; and -- Senior secured term loan affirmed at 'BB/RR1'. ARCH COAL: Moody's Affirms 'B2' CFR; Rates Senior Notes 'B3' ------------------------------------------------------------ Moody's Investors Service assigned a B3 rating to the senior unsecured guaranteed notes due in 2019 issued by Arch Coal, Inc. and a Ba3 rating to the new Term Loan C. At the same time, Moody's affirmed the B2 corporate family and probability of default ratings. Moody's also affirmed the Ba3 rating on Arch's existing credit facilities and the B3 rating on the existing senior unsecured notes. The speculative grade liquidity rating remains unchanged at SGL-3. Proceeds from the new debt raisings will be used to bolster liquidity and for general corporate purposes. The rating outlook is stable. Assignments: Issuer: Arch Coal, Inc. Senior Secured Bank Credit Facility, Assigned Ba3 (LGD 2, 23%) Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD 4, 69%) Ratings Rationale Arch's B2 CFR reflects its geographic and operational diversity, low level of legacy liabilities and extensive high quality and low-cost reserves. Factors that constrain the rating include high leverage, high capital expenditures, weakness in the US coal markets, volatility of met coal prices, inflationary cost pressures, and the inherent geological and operating risk associated with mining. Furthermore, coal mine productivity and costs have been adversely impacted by stricter mine safety inspections and greater difficulty in permitting mines and refuse disposal sites due to heightened environmental concerns. The rating also considers the company's strengthened liquidity position. Pro forma for the transaction, Arch's cash position will be approximately $1.2 billion. In addition, the company intends to seek certain changes to financial covenants in its bank credit facility to further enhance flexibility; however the debt issuance is not predicated on such changes being implemented. Challenges for the B2 corporate family rating include Arch's high leverage and exposure to the Appalachian coal basin where conditions remain particularly challenging. In addition, ongoing coal-to-gas substitution, low natural gas prices, and expected coal plant retirements have caused coal demand to contract, and coal prices to collapse. At the same time, reflecting weakening global steel demand, demand for seaborne metallurgical coal has also softened and prices have retreated to levels that are causing further compression to earnings and margins. Moody's expects Arch's metrics to deteriorate over the next 12-18 months due to the challenging environment for coal domestically, and in the seaborne market. The actions currently being taken by the company in its strategic repositioning of operations, which include reductions in coal production and workforce reductions, are expected to mitigate the degree of deterioration anticipated and indicate an operating flexibility necessary to weather the challenging climate facing US coal producers. The stable outlook reflects Moody's expectation that Arch's liquidity will remain adequate and that over longer term Debt/ EBITDA will be sustained below 6x. Upward ratings momentum is limited at this time. However, the ratings and/or outlook could come under pressure if the company's liquidity position erodes materially from current levels or if Debt/ EBITDA is expected to remain above 6x on a sustained basis. The principal methodology used in rating Arch Coal, Inc. was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. ARCHDIOCESE OF MILWAUKEE: Fights Creditor Parish Litigation Bid --------------------------------------------------------------- Rachel Feintzeig at Dow Jones' DBR Small Cap reports that the Archdiocese of Milwaukee is accusing unsecured creditors of coloring its relationship with its parishes as "sinister," in a "desperate" attempt to hunt down assets. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wisc. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ASSOCIATED BANC-CORP: Fitch Affirms 'B' Preferred Stock Rating -------------------------------------------------------------- Fitch Ratings has revised the Rating Outlook to Positive from Stable for Associated Banc-Corp, (ASBC) and its principal banking subsidiary Associated Bank, NA. At the same time, Fitch has affirmed ASBC's long-term Issuer Default Rating (IDR) and short- term IDR at 'BBB-/F3', respectively. The rating action is reflective of the continued maintenance of strong capital and liquidity profiles in addition to further improvements in ASBC's asset quality metrics. Fitch notes that ASBC has sustained strong capital levels in conjunction with double digit loan growth over the last year. Regulatory capital ratios have remained strong, with the company reporting a Tier 1 Leverage Ratio of 9.99% and a Total Risk Based Capital ratio of 15.00% at 3Q'12. Moreover, Fitch believes ASBC is well-positioned for proposed Basel III requirements. Additionally, at the third quarter of 2012 (3Q'12), ASBC reported non-performing assets (NPAs), inclusive of troubled debt restructurings (TDRs), at $452 million or 3.02% of total loans and other real estate owned (OREO). This represents a decline from the prior year when NPAs were $560 million or 4.13% of total loans and OREO. Further, the company's year-to-date net charge offs (NCOs) are a relatively low 0.58% through 3Q'12 compared to year- to-date NCOs of 1.32% through 3Q'11. Fitch expects asset quality trends to continue to improve, albeit at a slower pace over the next 12 to 18 months. While the company's return on average assets (ROA) has improved since Fitch's last review, overall performance has been augmented through reserve releases. Fitch notes that ASBC has not taken a provision since 4Q'11. Further, earnings have been boosted over the last year through the rally in mortgage rates which has added $47 million of incremental pre-tax mortgage banking income to the bottom line. Fitch believes that when normalizing provision expense, mortgage banking income, as well as taking into account various efficiency initiatives such as branch consolidation, ASBC's ROA would be in the 65-75 basis points (bps) range, as opposed to the recently reported year-to-date ROA of 81 bps through 3Q'12. The level of earnings, which are below some higher rated institutions, represents the main hurdle for upwards rating momentum over the intermediate term. Going forward, the company's primary focus will be driving additional loan growth, similar to most other banks. ASBC has increased loan balances 11% from a year ago with the majority of the growth coming from residential mortgages. Management intends to retain a portion of 15-year fixed-rate mortgages on the balance sheet. Rating Drivers and Sensitivities Improved earnings performance could lead to positive rating actions for ASBC, although Fitch views a near-term upgrade as less likely as ASBC's core earnings ratios still lag peer averages. Over the more medium term, ratings could benefit from controlled, strategic balance sheet growth, combined with costs savings realized through efficiency measures. Conversely, a sharp reverse in asset quality trends could negatively impact both ASBC's rating and outlook. Further, more aggressive capital management at bank or holding company level could lead to negative rating actions. ASBC has reported moderate growth in oil and gas lending. Given growth in this sector and ASBC's upper Midwestern footprint, Fitch remains sensitive to credit quality in the portfolio. Oil and gas lending, as well as C&I lending in general, has become an increasingly competitive asset class. Deterioration in the underlying asset quality of the O&G book would likely pressure ASBC's Rating Outlook. Moreover, excessive growth in this portfolio relative to the overall portfolio and capital could adversely impact the company's rating over time. ASBC is a $22.7 billion bank holding company with operations primarily in Wisconsin, Illinois and Minnesota. It offers consumer and commercial banking services, trust and investment management services, insurance and mortgage banking products. Fitch has affirmed the following ratings: Associated Banc-Corp. -- Long-term IDR at 'BBB-'; -- Senior unsecured debt at 'BBB-'; -- Viability at 'bbb-'. -- Subordinated at from 'BB+'; -- Preferred stock at 'B'; -- Short-term IDR at 'F3'; -- Commercial paper at 'F3'; -- Support at '5'; -- Support floor at 'NF'. Associated Bank, NA -- Long-term IDR at 'BBB-'; -- Viability at 'bbb-'; -- Long-term deposits at 'BBB'; -- Long-term senior debt at 'BBB-'; -- Short-term IDR at 'F3'; -- Support at '5'; -- Support floor at 'NF'; -- Short-term deposits at 'F2'. Associated Trust Company, NA -- Long-term IDR at 'BBB-'; -- Viability at 'bbb-'; -- Short-term IDR at 'F3' -- Support at '5'; -- Support floor at 'NF'. The Rating Outlook revised to Positive from Stable. BAKERS FOOTWEAR: Court Clears to Enter $8.5 Million Exit-Loan Deal ------------------------------------------------------------------ Marie Beaudette at Dow Jones' DBR Small Cap reports that a bankruptcy judge cleared Bakers Footwear Group Inc. to pay fees associated with the $8.5 million in exit financing it has lined up as it prepares to shut down 150 of its shoe stores. About Bakers Footwear Bakers Footwear Group Inc., a mall-based retailer of shoes for young women, filed for bankruptcy protection (Bankr. E.D. Mo. Case No. 12-49658) in St. Louis on Oct. 3, 2012, after announcing a plan to close stores and reduce costs. Bakers was founded in St. Louis in 1926 as Weiss-Kraemer, Inc., later renamed Weiss and Neuman Shoe Co., a regional chain of footwear stores. In 1997, Bakers was acquired principally by its current chief executive officer, Peter Edison, who had previously served in various senior management positions at Edison Brothers Stores Inc. In June 1999, Bakers purchased selected assets of the "Bakers" and "Wild Pair" footwear retailing chains from the bankruptcy estate of Edison Brothers. The "Bakers" footwear retailing chain was founded in 1924 and is the third-oldest soft goods retail concept still in operation in the United States. In February 2001, the Debtor changed its name to Bakers Footwear Group, Inc. In February 2004, Bakers conducted an initial public offering of its common stock. Bakers' common stock is quoted under the ticker symbol "BKRS" on the, the OTC Markets Group's quotation platform. As of the Petition Date, Bakers operates roughly 215 stores nationwide. In November 2012, the U.S. Bankruptcy Court in St. Louis authorized the company to hire a joint venture between SB Capital Group LLC and Tiger Capital Group LLC as agents to conduct closing sales for 150 stores. Bankruptcy Judge Charles E. Rendlen III presides over the case. Brian C. Walsh, Esq., David M. Unseth, Esq., and Laura Uberti Hughes, Esq., at Bryan Cave LLP, serve as the Debtor's counsel. Alliance Management serves as financial and restructuring advisors. Donlin, Recano & Company, Inc., serves as claims agent. The petition was signed by Peter A. Edison, chief executive officer and president. The Company's balance sheet at April 28, 2012, showed $41.90 million in total assets, $59.49 million in total liabilities and a $17.59 million total shareholders' deficit. Counsel for Crystal Financial, the DIP Lender, are Donald E. Rothman, Esq., at Riemer & Braunstein LLP; and Lisa Epps Dade, Esq., at Spencer, Fane, Britt & Brown, LLP. Bradford Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. BEAR ISLAND: Wants Case Caption Changed to Estate BIPCO ------------------------------------------------------- Bear Island Paper Company, L.L.C., asked the U.S. Bankruptcy Court for the Eastern District of Virginia to authorize the amendment of the case caption to Estate BIPCO, LLC. According to the Debtor, pursuant to an asset sale agreement, dated Aug. 10, 2010, (as amended or modified from time), by and among BD White Birch Investment LLC, and the Debtor and the Canadian Sellers, the Debtor is required to take all necessary action to change its name after the sale closes. The Debtor note that the sale approved on Nov. 3, 2010, closed on Sept. 13, 2012. About Bear Island Canada-based White Birch Paper Company is the second largest newsprint producer in North America. As of Dec. 31, 2009, the White Birch Group held a 12% share of the North American newsprint market and employed roughly 1,300 individuals (the majority of which reside in Canada). Bear Island Paper Company, L.L.C., is a U.S.-based unit of White Birch. Bear Island filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Case No. 10-31202) on Feb. 24, 2010. At June 30, 2011, the Company had $141.9 million in total assets, $153.2 million in total liabilities, and a stockholders' deficit of $11.3 million. White Birch filed for bankruptcy protection under Canada's Companies' Creditors Arrangement Act, before the Superior Court for the Province of Quebec, Commercial Division, Judicial District of Montreal, Canada. White Birch and five other affiliates -- F.F. Soucy Limited Partnership; F.F. Soucy, Inc. & Partners, Limited Partnership; Papier Masson Ltee; Stadacona Limited Partnership; and Stadacona General Partner, Inc. -- also sought bankruptcy protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 10-31234). Jonathan L. Hauser, Esq., at Troutman Sanders LLP, in Virginia Beach, Virginia Beach, serves as counsel to White Birch in the Chapter 11 case. Richard M. Cieri, Esq., Christopher J. Marcus, Esq., and Michael A. Cohen, Esq., at Kirkland & Ellis LLP, in New York, serve as counsel to Bear Island. Jonathan L. Hauser, Esq., at Troutman Sanders LLP, in Virginia Beach, Virginia, serve as co-counsel to Bear Island. AlixPartners LLP serves as financial and restructuring advisors to Bear Island, and Lazard Freres & Co., serves as investment banker. Garden City Group is the claims and notice agent. Jason William Harbour, Esq., at Hunton & Williams LLP, in Richmond, Virginia, represents the Official Committee of Unsecured Creditors. Chief Judge Douglas O. Tice, Jr., handles the Chapter 11 and Chapter 15 cases. Bear Island was authorized by the bankruptcy judge in November 2010 to sell the business to a group consisting of Black Diamond Capital Management LLC, Credit Suisse Group AG and Caspian Capital Advisors LLC. Bear Island's Chapter 11 plan is currently scheduled for approval at a Feb. 14, 2012 confirmation hearing. Under the plan proposed by the subsidiary of Canada's White Birch Paper Co., first- and second-lien creditors with $424.9 million and $105.1 million in claims, respectively, are expected to recover between 0.5 percent and 4 percent. Unsecured creditors with $1.4 million in claims are to receive the same dividend. BEAZER HOMES: Incurs $145.3 Million Net Loss in Fiscal 2012 ----------------------------------------------------------- Beazer Homes USA, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $145.32 million on $1 billion of total revenue for the fiscal year ended Sept. 30, 2012, a net loss of $204.85 million on $742.40 million of total revenue for the fiscal year ended Sept. 30, 2011, and a net loss of $34.04 million on $991.15 million of total revenue for the fiscal year ended Sept. 30, 2010. For the three months ended Sept. 30, 2012, the Company reported a net loss of $66.23 million on $370.93 million of total revenue, compared with a net loss of $43.17 million on $334.90 million of total revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $1.98 billion in total assets, $1.71 billion in total liabilities and $262.24 million in total stockholders' equity. "I'm pleased with the significant progress we made in 2012 strengthening both our business and our balance sheet," said Allan Merrill, president and chief executive officer of Beazer Homes. "Operationally, we generated significant growth in orders, closings and backlog, while seeing improving trends in gross margins. From a balance sheet perspective, we added liquidity, improved our book value, extended debt maturities and reduced interest expense." "In 2013, we expect to meaningfully improve our EBITDA, primarily by achieving margin expansion and further improvement in our sales per community metrics. While our community count will likely decrease for much of the year, we are actively investing in a substantial number of new communities, which we expect to deliver closings starting in fiscal year 2014." A copy of the Form 10-K is available for free at: http://is.gd/hmRiS1 2013 Executive Cash Plan On Nov. 8, 2012, the Compensation Committee of the Board of Directors of Beazer Homes approved a long-term performance cash incentive plan as a substitute for a portion of the Company's long-term equity-based incentive plan. The Company's three named executive officers, Allan P. Merrill, President and Chief Executive Officer, Robert L. Salomon, Executive Vice President and Chief Financial Officer, and Kenneth F. Khoury, Executive Vice President, General Counsel and Chief Administrative Officer, and certain other senior corporate officers are participants in the Cash Plan. Accordingly, for fiscal year 2013, the long-term incentive compensation opportunity for NEOs is made up of stock options, performance shares and performance cash under the Cash Plan. The terms of those stock options and performance shares are similar to the equivalent awards for fiscal year 2012 in all material respects although the number of shares awarded is less than for fiscal year 2012. Under the Cash Plan, NEOs can earn cash awards based on the three-year improvement in gross margin dollars. The Committee also established performance target levels under the annual bonus plan for NEOs for fiscal year 2013, which is substantially similar to the annual bonus plan for fiscal year 2012 that is described in the Company's definitive proxy statement on Schedule 14A dated Dec. 22, 2011. Under the 2013 Bonus Plan, 75% of the opportunity continues to be based on achievement of certain target earnings before interest, taxes, depreciation and amortization, after certain adjustments. Under the 2013 Bonus Plan, the remaining 25% of the opportunity is earned if certain safety, construction quality, customer satisfaction and sales goals are achieved. Threshold, target and maximum opportunities for our NEOs as a percentage of base salary are as follows: Mr. Merrill (50%/100%/150%) and Messrs. Salomon and Khoury (45%/90%/135%). On Nov. 13, 2012, Beazer Homes determined that an inadvertent disclosure of material non-public information had occurred the prior day. In a call with a securities analyst after the Company's earnings conference call, a representative of the Company unintentionally disclosed that sales in October 2012 were up approximately 20% year over year. In the same conversation, the Company representative confirmed disclosure from the Company's conference call, namely that management does not expect to generate meaningful growth in new home orders for fiscal year 2013. About Beazer Homes Beazer Homes USA, Inc. (NYSE: BZH) -- http://www.beazer.com/-- headquartered in Atlanta, is one of the country's 10 largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol "BZH." The Company's balance sheet at June 30, 2012, showed $1.82 billion in total assets, $1.64 billion in total liabilities, and $179.07 million in total stockholders' equity. * * * Beazer carries (i) a 'B-' issuer credit rating, with "negative" outlook, from Standard & Poor's, (ii) 'Caa2' probability of default and corporate family ratings from Moody's, and (iii) 'B-' issuer default rating from Fitch Ratings. Moody's said in July 2012 that the 'Caa2' CFR reflects Moody's expectation that Beazer's operating and financial performance, while improving, will remain weak through fiscal 2013. Moody's expects that Beazer's cash flow generation will continue to be weak in fiscal 2012 and 2013. "Our current rating outlook on Beazer is negative. We would consider a downgrade if the company's EBITDA growth fails to meet our expectations or if the downturn in the housing market lingers longer than we expect and unit volume remains depressed," S&P said in July 2012. As reported by the TCR on Sept. 10, 2012, Fitch Ratings has upgraded the Issuer Default Rating (IDR) of Beazer Homes USA, Inc. (NYSE: BZH) to 'B-' from 'CCC'. The upgrade and the Stable Outlook reflect Beazer's operating performance so far this year, its robust cash position, and moderately better prospects for the housing sector during the remainder of this year and in 2013. The rating is also supported by the company's execution of its business model, land policies, and geographic diversity. BERNARD L. MADOFF: Ivy Asset Settles Investor Suit for $210-Mil. ---------------------------------------------------------------- New York Attorney General Eric T. Schneiderman unveiled a settlement of over $210 million with the Ivy Asset Management, LLC, a Bank of New York Mellon subsidiary that advised clients to invest with Bernard Madoff. The settlement concludes lawsuits against Ivy by the Attorney General, the United States Department of Labor, and private plaintiffs, and provides for the payment of $210 million by the firm and approximately $9 million by other defendants. When added to future amounts Madoff investors anticipate receiving from the Madoff bankruptcy proceeding, the settlement is expected to return all or nearly all the original investment to those defrauded by the Ponzi scheme in this case. "[The] settlement brings accountability for one of the worst financial frauds in American history, and justice to defrauded investors. We have recovered over $210 million for the victims who were harmed as a result of the world's most notorious Ponzi scheme," said Attorney General Schneiderman. "Ivy Asset Management violated its fundamental responsibility as an investment adviser by putting its own pecuniary interests ahead of the interests of its clients. An investment adviser should apprise its clients of risks, but Ivy deliberately concealed negative facts it uncovered in its due diligence of Madoff in order to keep earning millions of dollars in fees. As a result, its clients suffered massive and avoidable losses." Between 1998 and 2008, Ivy was paid over $40 million to give advice and conduct due diligence for clients with large Madoff investments. Ivy's due diligence revealed that Madoff was not investing his funds as advertised. For example, Madoff's advertised strategy required him to buy and sell massive amounts of options in securities, but Ivy learned that there were insufficient options traded to support Madoff's purported trading strategy. When questioned, Madoff gave Ivy three vastly different explanations to explain the options problem, all of which Ivy knew to be false. Internal Ivy documents reveal the firm's deep but undisclosed reservations about Madoff. One email from an Ivy principal to his subordinate stated: "Ah, Madoff, you omitted one possibility -- he's a fraud!" Despite its reservations, Ivy did not disclose its suspicions to clients for fear of losing the fees Ivy received through the Madoff investments. Instead, it falsely told them that "we have no reason to believe there is anything improper in the Madoff operation," and that Ivy's only concern about Madoff was the difficulty of managing the enormous pool of assets he had under management. As a result of Ivy's deception and violation of its fiduciary duty, Ivy's clients lost over $236 million after Madoff's Ponzi scheme collapsed. Among the victims were hundreds of individual investors as well as dozens of New York union pension and welfare plans. In 2010, the Office of Attorney General filed a complaint charging Ivy with violations of the Martin Act (General Business Law Sec. 352) for fraudulent conduct in connection with the sale of securities; Executive Law Sec. 63(12) for persistent fraud in the conduct of business; and breach of fiduciary duty. The lawsuit sought payment of restitution and damages, and disgorgement of all fees that Ivy received. "The settlement agreement we're announcing [] provides a measure of justice for those Americans who worked hard to prepare for their retirement and then saw hoped-for stability disappear," said Secretary of Labor Hilda L. Solis. "My department is committed to ensuring that workers and retirees receive the benefits they've earned and deserve. If approved by the court, this settlement, combined with expected payments from the Madoff bankruptcy estate, will allow worker benefit plans impacted by Bernard Madoff's illegal and reprehensible scheme to recover all, or nearly all, of the money they invested with him." Under the agreement, Ivy will pay $210 million, which will be used to return money to investors, and pay the fees and expenses of the Attorney General, DOL and private plaintiffs. Investors are also expected to receive substantial additional payments at a future date from moneys recovered by Irving Picard, the SIPC Trustee for the liquidation of Madoff's estate. The settlement, along with money received from Picard, is expected to compensate defrauded investors for all or nearly all of the money they invested with Madoff. This case is being handled by Senior Enforcement Counsel Roger L. Waldman and Assistant Attorney General Shmuel Kadosh, under the supervision of Marc B. Minor, Chief of the Investor Protection Bureau, and Karla G. Sanchez, Executive Deputy Attorney General for Economic Justice. Dan Strumpf, writing for Dow Jones Newswires, reports Ivy is in the process of winding down its operations. Dow Jones also reports Brandy Bergman, a spokeswoman for Ivy, said, "Ivy is pleased to have reached an agreement that allows it to put these matters behind it." Dow Jones says attorneys for Ivy could not immediately be reached for comment. A spokesman for the Bank of New York Mellon, which owns Ivy, declined to comment and referred questions to Ivy. Ivy began investing with Mr. Madoff in about 1987, according to the New York attorney general's lawsuit, Dow Jones reports. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BERNARD L. MADOFF: $206-Mil. Settlement With Beacon/Andover Funds ----------------------------------------------------------------- Herrick, Feinstein LLP announced a global settlement of various litigations arising out of the collapse of Bernard L. Madoff Investment Securities LLC that will return approximately $206 million, collectively and over time, to several defrauded investor groups, who invested in several Madoff feeder hedge funds, collectively known as the Beacon/Andover Funds. Combined with past distributions by the Beacon/Andover Funds and the anticipated future distributions from the Madoff Trustee, the settlement is expected to return to most, if not all, of Beacon/Andover Funds' individual investors nearly 100%, or more, of their investment, based upon a current anticipated 65% distribution from the Madoff Trustee of the Beacon/Andover Funds' allowed bankruptcy claims. Herrick, Feinstein Partner and Co-Chair of the firm's Securities and Commodities Litigation and Regulatory Practice Group Arthur G. Jakoby, counsel for the Beacon/Andover Funds, said, "This settlement is probably the most favorable outcome for any investor who invested with Madoff through an investment feeder fund. To achieve a result that approaches returning approximately 100% or more of our investors' principal investments is remarkable and, hopefully, will help heal the financial wounds of our Funds' Madoff victims. The crimes perpetrated by Bernard Madoff against the Beacon/Andover Funds were financially devastating to our investors but this settlement provides our investors with justice and will restore to our investors their hard earned monies." The global settlement is a combination of two main settlements: The first is a settlement which Herrick, Feinstein negotiated with the Madoff Trustee. The Madoff Trustee had commenced a lawsuit by which he sought to (i) completely disallow the Beacon/Andover Funds' net equity claim of approximately $141 million which the Funds asserted against the Madoff Estate, and (ii) recover (or "clawback") $28.31 million that the Beacon/Andover Funds had withdrawn from their Madoff accounts over the years. Under the settlement, the Trustee not only agreed to allow the full amount of the Funds' net equity claim of approximately $141 million but also agreed to increase the Funds' net equity claim by $24 million (for a total allowed net equity claim of approximately $165 million) in connection with $24 million of payments to be made by the Funds and others to the Trustee under the settlement agreement. The Trustee also agreed to pay $500,000 to each of the Beacon Fund and Andover Fund representing the upper limit on the amount of SIPC payments authorized under current law and approved almost $63 million in "catch-up" distributions to be paid, immediately upon approval of the settlement by the court, to the Beacon/Andover Funds in connection with those claims. Based upon an anticipated 65% distribution from the Madoff Trustee, together with the SIPC payment, this settlement will recoup over $100 million of Beacon/Andover investor losses. Under the second settlement, the Beacon/Andover Funds will, net of certain fees and expenses, receive approximately $99 million from their former outside investment advisor, Ivy Asset Management, LLC, which includes a $3.5 million contribution plus a waiver of certain management fees from the Beacon/Andover Funds' management. The second settlement was negotiated collectively and cooperatively by the New York State Attorney General's Office and the U.S. Department of Labor along with Herrick, Feinstein and several class action law firms, including, but not limited to, Lowey Dannenberg Cohen & Hart, lead class counsel, Cohen Millstein Sellers & Toll, lead ERISA class counsel and several other law firms representing various investor groups, all of whom worked together to achieve this unprecedented result. Investor Howard Siegel also participated in the settlement negotiations as a representative of the Beacon Fund. The Herrick, Feinstein team was led by Mr. Jakoby and included Bankruptcy Partner Paul Rubin as well as Frederick E. Schmidt, Jr. The individual investor groups, collectively known as the Beacon/Andover Funds, include Beacon Associates LLC I, Beacon Associates LLC II, Beacon Associates LLC, Andover Associates, L.P., Andover Associates LLC I and Andover Associates (QP) LLC. The defrauded investors in these funds include hundreds of individual investors and dozens of New York union pension and welfare plans. Founded in 1928, Herrick, Feinstein LLP is a prominent 170-lawyer firm headquartered in New York City providing a full range of legal services, including securities litigation, bankruptcy and business reorganization, commercial litigation, tax and personal planning, corporate law, art law, employment law, government relations, insurance, intellectual property, real estate and sports law. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by the appeals has limited Mr. Picard's ability to distribute recovered funds. Outstanding appeals include the $5 billion Picower settlement and the $1.025 billion settlement. BRAND ENERGY: S&P Gives 'B' Rating on $75-Mil. Revolving Credit --------------------------------------------------------------- Standard & Poor's Ratings Services said its 'B' issue-level and '3' recovery ratings on Kennesaw, Ga.-based Brand Energy & Infrastructure Services' $75 million revolving credit facility and $775 million first-lien term loan (compared with the proposed $700 million) remain unchanged as the company finalized its capital structure and refinanced previously outstanding debt. "The '3' recovery rating indicates our expectation of meaningful (50%- 70%) recovery," S&P said. "Brand is the borrower of the first-lien $75 million revolver and first-lien $625 million term loan (composed of a $423.4 million tranche due in 2018 and a $201.6 million tranche due in 2016), and its Canadian subsidiary (Aluma Systems Inc.) is a borrower under a $150 million first-lien term loan (composed of a $101.6 million tranche due 2018 and $48.4 million due 2016)," S&P said. "Our 'CCC+' issue-level and '6' recovery ratings on Brand's $300 million second-lien term loan (compared with the proposed $325 million) also remain unchanged. The '6' recovery rating indicates our expectation of negligible (0%-10%) recovery in the event of payment default," S&P said. "At the same time, we withdrew our 'BB-' issue rating and '1' recovery rating (very high recovery of 90%-100%) on Brand's prior fully funded $50 million first-lien letter-of-credit facility. This facility has been replaced with a bilateral $50 million letter of credit facility that we do not rate. Our 'B' corporate credit rating and stable outlook on Brand also remain unchanged," S&P said. "The ratings on Brand reflect our view of the company's 'highly leveraged' financial profile that stems from its high leverage and modest cash flow generation prospects over the next two years. The 'weak' business risk assessment reflects its exposure to volatile end markets and competitive pricing. Our stable outlook reflects Brand's financial flexibility given that it has extended the maturity on all its existing debt. Also, over the next 12 months we expect Brand to sustain improvements in EBITDA margins on slow demand recovery in its end markets, given its recent ability to mitigate pricing pressures. Leverage should improve toward 6x over the next 12 months, assuming industry activity picks up to historical levels, which is likely because customers can only generally delay maintenance work temporarily. We expect some gradual improvement, although cash flow and leverage metrics will likely remain at the lower end of our expectations. For the rating, we expect adjusted debt to EBITDA of about 6x or less and free operating cash flow to total debt in the low single digits in the next two years," S&P said. RATINGS LIST Ratings Remain Unchanged Brand Energy & Infrastructure Services Corporate Credit Rating B/Stable/-- $75 mil rev credit fac B Recovery Rating 3 $423.4 million term loan due in 2018 B Recovery Rating 3 $201.6 million term loan due in 2016 B Recovery Rating 3 $300 mil second-lien term loan CCC+ Recovery Rating 6 Aluma Systems Inc. $101.6 million first-lien term loan due 2018 B Recovery Rating 3 $48.4 million first-lien term loan due 2016 B Recovery Rating 3 Ratings Withdrawn To From Brand Energy & Infrastructure Services Senior secured first lien NR B Recovery Rating NR 4 Senior secured first-lien LOC fac NR BB- Recovery Rating NR 1 Senior secured second lien NR CCC+ Recovery Rating NR 6 BROOKLYN NAVY: S&P Puts 'B' Senior Secured Debt Rating on Watch --------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B' senior secured debt rating on U.S. electricity and steam producer Brooklyn Navy Yard Cogeneration Partners L.P. (BNYCP), on CreditWatch with negative implications. "The CreditWatch placement reflects that, while we have not yet received financial information from the project through Sept. 30, the debt service and working capital reserves are backstopped by liquidity facilities that expire Nov. 30," said Standard & Poor's credit analyst Jatinder Mall. "If they are not renewed, the company's cash on hand may be insufficient to make its next principal and interest payment on April 1, 2013. In addition, the plant sustained unspecified damage as part of hurricane Sandy, and we expect that the project will provide an update on future operations as part of a financial disclosure that is pending," added Mr. Mall. The recovery rating on the debt is '3' indicating meaningful recovery (50% to 70%) in the event of a default. "The cogeneration facility sustained damage as a result of hurricane Sandy and is currently not operating. The latest financial report we have is for the second quarter, ended June 30, 2012," S&P said. CASELLA WASTE: Moody's Hikes Rating on $200MM Sub. Notes to 'Caa1' ------------------------------------------------------------------ Moody's Investor's Service raised the rating on Casella Waste Systems Inc.'s $200 million 7.75% subordinated notes due in 2019 to Caa1 from Caa2 as well as the rating on the company's $21.4 million Solid Waste Revenue bonds to B2 from Caa1. The rating actions are due to the reduced loss severity for these instruments in the event of default following the retirement of the company's second lien notes. Both rating actions are consistent with Moody's guidance in its September 28, 2012 press release when it assigned a Caa1 to the new $125 million 7.75% subordinated bonds. In that release the agency stated its intent to raise the rating on the outstanding $200 million note and $21.4 million bond once Casella completed its financing plan. Moody's also affirmed its B3 corporate family and probability of default ratings. The rating outlook for Casella remains negative. Ratings Corporate family rating B3 affirmed Probability of Default rating B3 affirmed $200 million 7.75% subordinated notes due 2019 raised to Caa1/72-LGD5 from Caa2/84-LGD5 $21.4 million Solid Waste Disposal Revenue Bonds due 2025 raised to B2/34-LGD3 from Caa1/63-LGD4 Speculative Grade Liquidity Rating (SGL): 3 Outlook: Negative Ratings Rationale The B3 CFR rating is driven by Casella's below average EBITDA margin (about 20% for Casella per Moody's adjustments vs. 27% average for peers for the most latest twelve months), high leverage (over 6x on Moody's adjusted basis), regional concentration, and small size. In an effort to bridge the margin gap to peers, the company implemented a 100 basis point general and administrative cost savings plan. The company is also close to completing the sale of its poor performing Maine Energy waste-to- fuel plant, thereby removing this cash flow draining asset and modestly improving overall margins. The recently completed financing effort, including sale of about a net $121 million subordinated bonds (at net interest rates measurably lower than existing debt) and about $43 million of net new equity, coupled with about $29 million of revolver draw, funded the retirement of $193 million (including fees) 11% second lien bonds due in 2014 as well as modestly reduce balance sheet leverage, improve interest coverage, and aid the company's efforts to approach break-even results. Completion of the Maine Energy sale and measurable margin improvement could result in a change in the outlook to stable over the next six months. Over the coming months, failure to improve operating performance could result in downward rating momentum. The principal methodology used in rating Casella Waste Systems was the Solid Waste Management Industry Methodology published in Februrary 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Casella, based in Rutland Vt., collects and disposes of municipal solid and construction waste, specialty waste primarily from energy drilling activities, and collects, processes and sells recyclable waste. Revenue for the twelve months ending July 2012 was $475 million. CENGAGE LEARNING: Moody's Cuts CFR to 'Caa3'; Outlook Negative -------------------------------------------------------------- Moody's Investors Service downgraded Cengage Learning Acquisitions, Inc.'s Corporate Family Rating (CFR) to Caa3 from Caa1, Probability of Default Rating (PDR) to Caa3 from Caa2, speculative-grade liquidity rating to SGL-4 from SGL-3, and instrument ratings as detailed in the debt list below. The downgrades reflects Moody's view that the sharp revenue and EBITDA declines in Cengage's fiscal 2013 first quarter further complicate the company's already difficult tasks of materially reducing its very high leverage and addressing its significant $2.7 billion of 2014/2015 maturities, thereby elevating default risk. The rating outlook is negative. Cengage attributed the significant revenue and EBITDA decline to a combination of market (continued textbook rental market inroads, soft higher education enrollment particularly at career colleges, adoption deferrals, and pressure on library funding) and company- specific factors. Moody's believes the actions Cengage is implementing to mitigate marketplace pressures and address company-specific factors (such as improving channel partner management and adjusting sales force incentives and training to increase adoption of products that require students to utilize digital solutions) will take time to implement and involve execution risk. However, Cengage's approaching maturities and near-term pressures on the higher education market provide limited flexibility to execute a turnaround and materially reduce leverage. An increase in Cengage's secured debt-to-EBITDA ratio to 6.8x also currently eliminates the company's capacity within the secured debt ratio incurrence limits in its various debt agreements (although some secured debt capacity remains within lien baskets) and reduces cushion within the maximum 7.75x net secured debt maintenance covenant in its credit facility. This along with provisions such as the most favored nation pricing clause in Cengage's credit facility will also make it difficult to address maturities and maintain positive free cash flow after factoring in the likely significant increase in cash interest costs. Cengage is reportedly a bidder for McGraw-Hill Education (MHE), although there are reportedly other potential bidders for the company. A transaction with MHE would increase Cengage's scale in the higher education business and likely be de-leveraging when factoring in synergies. However, Moody's believes Cengage would need to resolve its maturities issues as part of any proposed financing for a MHE transaction, and this would be challenging given the pressure on its business and its high secured and total leverage. Downgrades: Issuer: Cengage Learning Acquisitions, Inc. Corporate Family Rating, Downgraded to Caa3 from Caa1 Probability of Default Rating, Downgraded to Caa3 from Caa2 Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Senior Secured Bank Credit Facility, Downgraded to Caa2, LGD3 - 37% from B2, LGD2 - 21% Senior Secured Regular Bond/Debenture (First Lien Notes), Downgraded to Caa2, LGD3 - 37% from B2, LGD4 - 65% Senior Secured Regular Bond/Debenture (Second Lien Notes), Downgraded to Ca, LGD5 - 85% from Caa3, LGD4 - 65% Senior Unsecured Regular Bond/Debenture, Downgraded to Ca, LGD6 - 92% from Caa3, LGD5 - 78% Loss Given Default Updates: Senior Subordinated Regular Bond/Debenture, Changed to LGD6 - 95% from LGD5 - 85% (no change to Ca rating) Ratings Rationale Cengage's Caa3 CFR reflects its very high debt-to-EBITDA leverage (11.1x LTM 9/30/12 incorporating Moody's standard adjustments and cash pre-publication costs as an expense), limited free cash flow generation and elevated default risk due to the significant refinancing risk associated with its 2014/2015 maturities. Cengage has a good market position and broad range of product offerings in higher education publishing. Moody's believe the company has moderate growth prospects over the intermediate term and is reasonably positioned to transition its revenue as higher education publishing continues to shift to digital from print formats. Cengage nevertheless faces multiple near-term operating headwinds from market and company-specific issues. Moody's believes earnings pressure and Cengage's high leverage reduce flexibility to address the sizable $2.7 billion of remaining 2014/2015 maturities, creating elevated default risk. The maturity on Cengage's $300 million 2017 revolver springs to April 2014 if more than $400 million of the approximate $2.1 billion of 2014 term loans are outstanding as of that date and the maturity of the company's $1.3 billion 2017 term loan springs to October 2014 if more than $350 million of the remaining $404 million of 10.5% senior unsecured notes are outstanding as of that date. Moody's is reverting to a 50% mean family recovery rate assumption given the sharp jump in debt-to-EBITDA leverage to 11.1x from 9.3x (incorporating Moody's standard adjustments and cash pre- publication costs as an expense) in the first quarter. This results in a two-notch reduction in the CFR to the same Caa3 level at which the PDR is placed. The downgrade of Cengage's liquidity rating to SGL-4 from SGL-3 reflects weaker cash flow generation and higher risk of a covenant violation over the next 12-15 months. Moody's believes cash (approximately $57 million as of 9/30/12) and unused capacity under the $300 million April 2017 revolver commitment provide modest coverage of the approximate $36 million of required annual term loan amortization, seasonal cash needs, and potentially limited to negative free cash flow generation. The breadth of the operating challenges contributing to the significant first quarter earnings decline, as well as the time required and execution risks associated with the company's turnaround plans make positive free cash flow generation questionable over the next 12-15 months. Moody's estimates that Cengage has an approximate 13% EBITDA cushion within the maximum 7.75x net senior secured leverage covenant in its credit facility (there are no step downs in the covenant). However, there is greater uncertainty regarding Cengage's ability to comply with the covenant over the next 12-15 months given the operating pressures and the company's possible use of incremental secured debt to at least partially address its unsecured debt maturities. The negative rating outlook reflects the elevated risk of default unless the company can reverse its weak operating performance and refinance maturities. Heightened near-term risk of default including through distressed exchange transactions, or a reduction in the recovery assumption could lead to downward pressure on the CFR, instrument ratings and/or the PDR rating. Cengage's ratings could also be downgraded if the company is unable to make de-leveraging progress or generate and sustain comfortably positive free cash flow. A weakening of liquidity would also pressure Cengage's ratings including through such factors as significant revolver usage, weaker or negative free cash flow, erosion of the covenant cushion, or changes in the likely cost of refinancing. An upgrade or a shift to a stable rating outlook is unlikely unless the company is able to address its 2014/2015 maturities at a manageable cost. If that were to occur, Cengage could be upgraded if good operating execution leads to revenue and earnings growth, consistent free cash flow generation and reduced leverage, or the company de-levers through asset sales, an equity offering or acquisitions. The principal methodology used in rating Cengage was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Cengage, headquartered in Stamford, CT, is a provider of learning solutions to colleges, universities, professors, students, libraries, reference centers, government agencies, corporations and professionals. Cengage publishes college textbooks and reference materials, and supplements its print publications with digital solutions. The company was acquired by funds managed by Apax Partners and OMERS Capital Partners in a $7.3 billion leveraged buy-out from Thomson Reuters Corporation in July 2007. Revenue for the LTM ended September 30, 2012 was approximately $1.8 billion. CENTURY INDEMNITY: Fitch Affirms & Withdraws 'B-' IFS ----------------------------------------------------- Following Fitch Ratings' standard review process, Fitch has affirmed the ratings of ACE Limited and its subsidiaries. The Rating Outlook is Positive. The rating actions reflect ACE's continued strong operating performance, balance sheet and financial flexibility, and diverse sources of revenues and earnings. Partially offsetting these positives is the effect of modestly rising accident-year combined ratios and the effect of continued significant competition in the company's chosen markets. Fitch expects that ACE's insurance and reinsurance losses from Hurricane Sandy will be more of an earnings event rather than a capital event. While the amount of loss is uncertain at this early stage, Fitch anticipates the level to be manageable given the company's diverse global book of business, strong capitalization and operating performance with below average catastrophe losses through the first nine months of 2012, and conservative risk management. ACE's operating performance is consistently strong, characterized by low combined ratios with manageable catastrophe losses and consistent favorable loss reserve development and stable investment income. The company has reported a combined ratio under 100% for nine consecutive years. The year-to-date combined ratio was 90.2% at Sept. 30, 2012 despite experiencing $147 million of pre-tax crop insurance losses in the third quarter and $127 million of pre-tax catastrophe losses including reinstatements through nine months ending 2012. ACE reported a higher combined ratio of 95.3% for the same period in 2011 due to $744 million of catastrophe losses. ACE reported net income of $1.94 billion and operating income of $2.1 billion for the first nine months of 2012, up from $805 million and $1.7 billion, respectively, for the same period in 2011. The increase in net income was largely due to reduced catastrophe losses and a shift in realized investment losses primarily related to mark to market accounting in ACE's life reinsurance segment. ACE has steadily grown its ordinary shareholders' equity with solid earnings. As a result, shareholders' equity has increased by over 50% since year-end 2007 and 11% since year-end 2011 to $27 billion through Sept. 30, 2012. Tangible equity has grown in conjunction with the growth in shareholders' equity and has more than tripled since 2001. Fitch also notes that ACE, unlike many of its peers, has not repurchased a material amount of shares during the current soft market other than to partially offset potential dilution related to share-based compensation plans. No shares were repurchased during the third quarter of 2012. Additionally, Fitch has affirmed and withdrawn Century Indemnity Company's (Century) Insurer Financial Strength (IFS) rating. The rating of the ACE subsidiary is no longer considered by Fitch to be relevant to the agency's coverage. Fitch's rating on Century reflects Fitch's view that the company's importance to ACE is limited due to its run-off status and thin capitalization. Century maintains inactive operations largely consisting of asbestos and environmental (A&E) reserves that are in run-off. Key rating triggers that may lead to an upgrade include continued strong operating performance with a combined ratio consistently under 95%, continued stockholders' equity growth, and maintaining a track record of successful acquisition execution while managing financial leverage to under 25% total debt to capital and run-rate leverage at or under 20%. Fitch expects operating earnings-based interest and preferred dividend coverage to remain at or above 10x, and for ACE's retention ratio (net premium written to gross premium written) to increase over time to be more in line with higher-rated peers. Key rating triggers that may lead to a downgrade include a sustained material deterioration in operating performance such that the combined ratio is consistently unprofitable at over 100%, a significant reduction in stockholders' equity that is not recovered in the near term, and financial leverage consistently over 30%. Potential for future acquisitions and the associated integration risks and company profile changes could lead to pressure on the ratings, depending on the acquisition details. Fitch has affirmed the following ratings: ACE Limited -- Issuer Default Rating (IDR) at 'A+'. ACE INA Holdings Inc. -- IDR at 'A+'; -- $500 million senior notes due 2014 at 'A'; -- $450 million senior notes due 2015 at 'A'; -- $700 million senior notes due 2015 at 'A'; -- $500 million senior notes due 2017 at 'A'; -- $300 million senior notes due 2018 at 'A'; -- $500 million senior notes due 2019 at 'A'; -- $100 million senior debentures due 2029 at 'A'; -- $300 million senior notes due 2036 at 'A'. ACE Capital Trust II -- $300 million capital securities due 2030 at 'BBB+'. ACE American Insurance Company ACE Bermuda Insurance Limited ACE Fire Underwriters Ins. Company ACE Insurance Company of the Midwest ACE Property and Casualty Insurance Company ACE Tempest Reinsurance Limited Agri General Insurance Company Atlantic Employers Insurance Company Bankers Standard Fire & Marine Company Bankers Standard Insurance Company Combined Insurance Company of America Combined Life Insurance Company of New York Illinois Union Insurance Company Indemnity Insurance Company of North America Insurance Company of North America Pacific Employers Insurance Company Westchester Fire Insurance Company Westchester Surplus Lines Insurance Company -- IFS at 'AA-'. Fitch has affirmed and withdrawn the following rating: Century Indemnity Company -- IFS at 'B-'. The Rating Outlook is Positive. CHG HEALTHCARE: S&P Assigns B Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services said its issue-level and recovery ratings on Salt Lake City-based health care staffing provider CHG Healthcare Services Inc. are unchanged after $25 million was shifted from the second-lien to the first-lien term loan. The first-lien term loan, now $475 million, and $100 million revolver are rated 'B', with a recovery rating of '3', indicating our expectation for meaningful (50% to 70%) recovery in the event of principal default. "The $190 million second-lien term loan is rated 'CCC+', with a recovery rating of '6', indicating our expectation for negligible (0 to 10%) recovery in the event of principal default. We rate CHG Healthcare Services Inc.'s corporate credit 'B'; the rating outlook is stable," S&P said. "Our ratings on CHG Healthcare reflect its 'weak' business risk profile, highlighted by its operating concentration in the highly competitive health care staffing industry. This is partly offset by the company's revenue growth of its locum tenens business, which provides some stability against the variability of demand and supply from its allied health and travel nurse segment. The ratings also reflects CHG's 'highly leveraged' financial risk profile, which takes into account our expectation of pro forma adjusted debt leverage well over 7x following the leverage buyout by its sponsors LGP and Ares," S&P said. RATINGS LIST CHG Healthcare Services Inc. Corporate credit rating B/Stable/-- $475 mil. first-lien term loan B Recovery rating 3 $100 mil. Revolver B Recovery rating 3 $190 mil. second-lien term loan CCC+ Recovery rating 6 CLARE OAKS: CliftonLarsonAllen to Conduct Feasibility Study ----------------------------------------------------------- Clare Oaks asks the U.S. Bankruptcy Court for the Northern District of Illinois to amend the amended order authorizing the employment of CliftonLarsonAllen LLP as accountants. As reported in the Troubled Company Reporter on Oct. 12, 2012, the court entered an amended order authorizing Clare Oaks to employ CliftonLarsonAllen LLP as accountants. The bankruptcy judge approved the original engagement letters with CLA and the supplemental engagement letter. The order also provides that CLA, as accountants, will perform services effective retroactively to Dec. 5, 2011. The Debtor, in its supplemental motion, states that secured creditors, Wells Fargo Bank, National Association, as Master Trustee, and Sovereign Bank, N.A., have filed a Third Amended Plan of Reorganization that contemplates a reorganization of the Debtor via the issuance of Series 2012 Bonds and an exchange of Series 2006 Bonds for Series 2012 Bonds by the Series 2006 Bondholders. In order to issue the Series 2012 Bonds, the Illinois Finance Authority requires that the Debtor provide a feasibility study and report regarding certain financial forecasts made by the Debtor. In this relation, the Debtor proposes to amend the employment order to approve an engagement letter with CLA and to authorize CLA to conduct the required feasibility study, including an examination of the Debtor's financial forecast for the purpose of issuing a report stating whether (1) the Debtor's financial forecast is presented in conformity with applicable guidelines established by the American Institute of Certified Public Accountants, and (2) the Debtor's assumptions provide a reasonable basis for its forecast. The Debtor also request that the Court approve these rates: Professional Hourly Rate Hourly Rate in Original ------------ ----------- /First Supplemental Engagement Letters ----------------------- Gail Miller ? Engagement Partner $325 N/A (new) Mario McKenzie ? Concurring Partner $355 N/A (new) Chad Kunze ? Audit Advisory Partner $295 Same Chris Piche ? Quality and Technical Partner $385 Same John Richter ? Engagement Advisory Partner $405 N/A (new) Steve Kuhns ? Engagement Director $240 N/A (new) Tom Melchior ? Market Research Manager $280 N/A (new) Cynthia Schroer ? Market Research Senior $195 N/A (new) Lars Johnson ? Financial Analysis Manager $240 N/A (new) Jen Burkholder ? Financial Analysis Staff $155 N/A (new) Other CLA Consultants (Clinical, Nursing, Billing, etc.) $275 - $400 N/A (new) Client Service Assistants $80 - $145 $80 - $105 CLA has provided a fee estimate of $110,000 for the feasibility study services. The Debtor requests that the amended employment order authorize the Debtor to pay CLA up to an additional $110,000 in connection with the services described in the Second Supplemental Engagement Letter. CLA has acknowledged and understands that its fees and reimbursement of its costs are subject to review and approval by the Court. About Clare Oaks Clare Oaks, an Illinois not-for-profit corporation organized under section 501(c)(3) of the Internal Revenue Code, operates a namesake continuing care retirement community in Bartlett, Illinois. Its members are the Sisters of St. Joseph of the Third Order of St. Francis, a Roman Catholic religious institute, who are elected and serving as the members of the Central Board of the Congregation. Clare Oaks is managed by CRSA/LCS Management LLC, an affiliate of Life Care Services LLC. Clare Oaks filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 11-48903) on Dec. 5, 2011. Judge Pamela S. Hollis presides over the case. David R. Doyle, Esq., George R. Mesires, Esq., and Patrick F. Ross, Esq., at Ungaretti & Harris LLP, in Chicago, serve as the Debtor's counsel. North Shores Consulting serves as the Debtor's operations consultant. Continuum Development Services and Alvarez & Marsal Healthcare Industry Group LLC serve as advisors. Alvarez & Marsal's Paul Rundell serves as the Chief Restructuring Officer. Sheila King Marketing + Public Relations serves as communications advisors. CliftonLarsonAllen is the Debtor's accountants. B.C. Ziegler and Company is the Debtor's proposed investment banker and financial advisor. In its petition, Clare Oaks estimated $100 million to $500 million in assets and debts. The petition was signed by Michael D. Hovde, Jr., president. Attorneys at Neal Wolf & Associates, LLC, represent the Official Committee of Unsecured Creditors as counsel. Wells Fargo, as master trustee and bond trustee, is represented by Daniel S. Bleck, Esq., and Charles W. Azano, Esq., at Mintz Levin Cohen Ferris Glovsky and Popeo PC; and Robert M. Fishman, Esq., and Allen J. Guon, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC. Sovereign Bank, the letters of credit issuer, is represented by John R. Weiss, Esq., at Duane Morris LLP. Senior Care Development LLC, the DIP Lender, is represented by William S. Fish, Jr., Esq., and Sarah M. Lombard, Esq., at Hinckley Allen & Snyder LLP. The Debtor intends to sell its Clare Oaks Campus to ER Propco Co, LLC aka Evergreen for $16,000,000, subject to higher and better offers. The Debtor's Plan provides that bondholders are settling aside some cash that could pay as much as 2.7% on $1.9 million in unsecured debt. For a projected 45% recovery, bondholders will receive $40 million in new second-lien bonds that will pay interest only at 4% for 15 years. The Plan is scheduled for confirmation on Oct. 25, 2012. The report notes that emergence from Chapter 11 will be financed by a $12 million first-lien secured loan provided by some of the bondholders. CLEARWATER DEVELOPMENT: EFO Financial Buys Brightwater Club ----------------------------------------------------------- Led by prominent Dallas businessman and humanitarian Bill Esping, EFO Financial Group, LLC recently acquired Clearwater Development, Inc. and its property, the Brightwater Club. Centered around an 18-hole championship golf course, the world-class residential and recreational community allows residents and visitors alike to experience the beauty and wilderness of the Vail Valley. In April 2011, Clearwater Development, Inc. (CDI) defaulted on $100 million in loans and declared Chapter 11 bankruptcy. As co- founder and leader, Bill Esping was pleased that EFO Financial Group, LLC gave CDI a debtor-in-possession (DIP) loan upon bankruptcy. After CDI failed to sell the property via an 11 U.S.C. Sec. 363 sale, EFO Financial Group, LLC recently foreclosed on its lien. As titleholder and having resolved all of the property's debts, Esping's company will transfer the title to subsidiary Gypsum Creek Holdings, LLC to seek disposition of the asset. Bill Esping noted that more than $65 million has been invested in Brightwater Club's land, design, construction, and infrastructure. With an original 535 home sites available on the world-class property, 114 lot improvements and entitlements have added 225 more sites. Sites at Brightwater have historically sold for $350,000 to $700,000. Located in the town of Gypsum in the Eagle River Valley near Vail, Colorado, CDI's Brightwater Club provides world class recreation and residences. The 963-acre property centers around its 18-hole championship golf course, designed by world-renowned golf architect Robert Trent "Bobby" Jones, Jr. and completed in 2008. About Bill Esping Bill Esping is an active real estate investor, having announced the recent acquisition of two Austin Multifamily Properties: Indigo and 95 Twenty. Bill Esping is actively taking advantage of improving real estate fundamentals, predicting appreciation that outpaces other investments over the next few years. Bill Esping leads EFO Financial Group, LLC, which specializes in DIP lending and has successfully financed numerous companies and properties across the country, including Aqua (Naples, FL: $26 million); Twin Eagles Golf and Country Club (Naples, FL: $6 million); Mi Arbolito (San Diego, CA: $4.2 million); Phoenix Biocomposites, LLC (Minneapolis, MN: $3 million); Cypress Woods Golf and Country Club (Naples, FL: $700,000); and Key West Brewery (Key West, FL: $500,000). About Clearwater Development Clearwater Development, Inc., filed a Chapter 11 petition (Bankr. D. Colo. Case No. 11-18725) in Denver on April 18, 2011. The Debtor said in a court filing it has properties worth $8,000,000, constituting 50 finished single family home sites, 65 partially finished family home sites, 225 entitled single family home sites, completed 18 hole Robert Trent Jones Jr. golf course, completed 18 hole putting course, 25 acres of lakes, among others. The properties secure a $69,543,133 debt. CONSOLIDATED COMMUNICATIONS: Moody's Rates New $515MM Loan 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the proposed $515 million senior secured term loan B for Consolidated Communications Inc. All other ratings including the B1 Corporate Family Rating (CFR) remain unchanged. The use of proceeds is expected to refinance the $467 million term loan that matures in December 2014, repay $35 million drawn under its $50 million revolver, and fees and expenses for the transaction. The transaction will extend its term loan maturity from December 2014 to 2018 and increase revolver availability that was drawn to close the SureWest acquisition. Interest expenses are expected to rise as the rate on the new term loan is anticipated to be higher than the L+250 spread on the existing term loan B. A summary of the company's rating actions are listed below: Issuer: Consolidated Communications, Inc. New $515 million Sr. Secured Term Loan B-3 due 12/31/18, Assigned Ba3 (LGD3, 34%) Corporate Family Rating, B1 Unchanged Probability of Default Rating, B1 Unchanged $50 million Sr. Secured Revolving Credit Facility due 6/8/16, Ba3 Unchanged (LGD3, 34% -increased from 32%) $467 million Sr. Secured Term Loan B due 12/31/14, Ba3 (LGD3, 34% -increased from 32%) expected to be withdrawn upon completion $406 million Sr. Secured Term Loan B-2 due 12/31/17, Ba3 Unchanged (LGD3, 34% -increased from 32%) $300 million Sr. Unsecured Notes due 6/1/20, B3 Unchanged (LGD5, 87% -increased from 86%) Outlook, Stable Rating Rationale Consolidated's B1 CFR reflects continued access line losses from its high margin legacy telecommunications segment, intense competition from cable, wireline, and wireless operators, and its aggressive financial policy of paying out free cash flow as dividends. Also incorporated into the rating is the high leverage of 4.7x (pro-forma for the SureWest acquisition and including Moody's standard adjustments) as of Q3 2012 and expectations that it will not improve in the near term as its high dividend payment policy limits free cash flow available for future debt repayment. The decline in its legacy access lines will necessitate a continued focus on cost savings in order to maintain EBITDA margins. Consolidated will continue to be susceptible to changes in USF payments that could impact earnings given the high margins of this revenue stream. Revenues may also suffer modestly from the potential loss of the Illinois Department of Corrections contract. The rating is supported by EBITDA margins in the mid 40% range (including dividends received from its wireless investments) and good cash flow (prior to dividend payments and capex spend). Following the SureWest acquisition, the company benefits from diversified operations in five different regions, improved scale, cost saving opportunities, and increased exposure to broadband services as well as an advanced fiber network that have more stable revenue prospects. Enhanced VOIP, IPTV, and broadband services also offer the potential to sell double or triple play packages that could reduce churn rates and diversify its revenue stream away from traditional access lines. However, these services have lower margins and subject the company to potentially higher TV programming expenses compared to larger competitors, and expose Consolidated to potential new internet based TV offerings. Moody's continues to characterize Consolidated's liquidity as good, as reflected by its SGL-2 speculative grade liquidity rating. Meaningful internal liquidity sources (pre-dividend and capex), a $50 million revolver that is expected to be undrawn pro- forma for the transaction, and the absence of near term maturities support the company's liquidity profile. Higher interest expenses from the anticipated refinancing of the Term Loan B will be partially offset by the maturity of some interest rate swaps in Q4 2012 and Q1 2013. However, higher capex spend of approximately $110 to 115 million following the SureWest acquisition is expected to weaken free cash flow levels as is the high dividend payout ratio which is anticipated to lead to minimal debt repayment in the near term. While we anticipate capex levels will decline slightly over time, it will remain well above historical levels of $42 million in 2010 and $43 million in 2011 prior to the SureWest transaction. The dividend payment amount increased from $46 million annually to $62 million due to the increase in the number of shares following the SureWest acquisition that was partially funded with equity. The company is subject to a restricted payment test that prevents dividends if leverage exceeds 5.1x and is also subject to a total net leverage test of 5.25x and an interest coverage test of 2.25x for the life of the loan. Moody's expects the company to remain well within its compliance requirements over the next 12 to 18 months. As of Q3 2012, the covenant calculated total net leverage ratios was 4.27x and the interest coverage ratios was 4.37x. The company also is expected to have the ability to issue $300 million of incremental term loans that could be used for future acquisitions. Moody's rates the first lien bank debt Ba3, one notch higher that the Corporate Family Rating. The first lien facility consists of a $50 million revolving credit facility due June 2016 and a $921 million term loan (which includes the proposed $515 million term loan B-3 due December 2018 and a $406 million term loan B-2 due December 2017). First lien lenders benefit from a pledge of stock and security in assets of all subsidiaries, with the exception of the regulated subsidiary that holds the ILEC assets of Consolidated in Illinois. However, lenders do have a pledge of the stock of the excluded subsidiary. The $300 million 10.875% senior note is rated B3 given its subordinated position in the capital structure with material amounts of senior secured debt ahead of the notes. The stable outlook incorporates expectations for relatively flat to slightly negative revenues, continued modestly positive free cash flow (after dividends and capex), a stable leverage profile, and EBITDA margins above 40%. Upward rating pressure could ensue if there was a deleveraging transaction followed by a greater commitment to debt reduction and a stabilization in revenue that reduced leverage below 3.25x (including Moody's standard adjustments) on a sustained basis. An acceleration in revenue decline or EBITDA margins prompted by increased pressure on its core business line or a leveraging transaction that increased leverage above 5.25x (including Moody's standard adjustments) would put downward pressure on the ratings. The principal methodology used in rating Consolidated Communications Inc. was the Global Telecommunications Industry Methodology published in December 2010 and Moody's Loss Given Default Industry Methodology published in June 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Consolidated Communications Holdings, Inc. provides communications services, including local and long distance telephone, high-speed Internet access and television, to residential and business customers in Illinois, Texas and Pennsylvania. The SureWest Communications acquisition which closed in July 2012 expands its operations to markets in the Kansas City and Sacramento region. The company maintains headquarters in Mattoon, IL, and its LTM revenue is approximately $437 million as of Sept. 30, 2012. CONSOLIDATED COMMUNICATIONS: S&P Rates $515-Mil. Term Loan 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating and '2' recovery rating to rural local exchange carrier (RLEC) Consolidated Communications Inc.'s proposed $515 million senior secured term loan due 2018. "The '2' recovery rating indicates our expectation for substantial (70% to 90%) recovery for lenders in the event of payment default. Our 'B+' corporate credit rating on the parent company, Consolidated Communications Holdings Inc., is unchanged. The outlook is stable," S&P said. "The proposed refinancing extends debt maturities and modestly benefits liquidity, which we now view as 'adequate'. We expect the company to use proceeds from the new term loan to refinance its existing $467 million term loan B due 2014, and repay $35 million of outstanding borrowings under its $50 million revolving credit facility due 2016," said Standard & Poor's credit analyst Michael Altberg. "Because there is only a minimal effect on debt leverage, our financial risk assessment remains 'aggressive.' Our business risk assessment on Consolidated is 'weak'. Similar to industry peers, the company faces competition from wireless substitution and cable operators, which are bundling telephone with high-speed data (HSD) and video services and increasingly targeting smaller business customers. Other business risks include likely declining revenue from federal and state subsidies over the next few years. Tempering factors include increased revenue from HSD and video subscribers following the acquisition of SureWest, relatively strong EBITDA margins, and stable distributions from its wireless partnerships." "Consolidated Communications is a midsize RLEC providing a wide range of communications services to residential and business customers in Illinois, Texas, and Pennsylvania. On July 2, 2012, the company completed the acquisition of cable overbuilder and incumbent operator SureWest, which serves markets in California and Kansas. As of Sept. 30, 2012, the combined company had about 105,000 video subscribers, 402,000 voice access lines, and 247,000 data customers," S&P said. "The relative predictability of the company's business, as well as growth potential in data and video services, provides stability for the rating over the next 12 months. However, if the combined company's access line losses materially accelerate from current levels, we could lower the rating, particularly if this results in leverage rising above the low-5x area. In addition, lower dividend distributions from the wireless partnerships could lead to leverage exceeding the low-5x area, which could prompt a downgrade," S&P said. "While we consider it unlikely in the near term, if Consolidated's IPTV efforts, including deployments in the SureWest markets, contribute to significantly lower access-line losses despite economic and competitive pressures, we could raise the rating. Such a scenario would also require meaningful leverage reduction to the 3x area," S&P said. CONSTRUCTORA DE HATO: Has Until Nov. 30 to Propose Ch. 11 Plan -------------------------------------------------------------- The Hon. Brian K. Tester of the U.S. Bankruptcy Court for the District of Puerto Rico extended until Nov. 30, 2012, Constructora De Hato Rey Incorporada's time to file a Chapter 11 Plan and an explanatory Disclosure Statement. San Juan, Puerto Rico-based Constructora De Hato owns parcels of land in Puerto Rico with an aggregate value of $1.82 million. It filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-02876-11) in Old San Juan, Puerto Rico, on April 13, 2012. The petition was signed by Waldemar Carmona Gonzalez, president. The Debtor is represented by Charles Alfred Cuprill, Esq., at Charles A. Curpill, PSC Law Office, in San Juan. Luis R. Carrasquillo & Co., PSC, serves as financial consultant. In its amended schedules, the Debtor disclosed $10,701,724 in assets and $6,847,693 in liabilities. DEWEY & LEBOEUF: Creditors Seek Right to Sue Ex-Directors -------------------------------------------------------- Lisa Uhlman at Bankruptcy Law360 reports that the official committee of unsecured creditors in Dewey & LeBoeuf LLP's bankruptcy sought permission Monday from a New York bankruptcy judge to prosecute and settle breach of fiduciary duty claims on behalf of the debtor's estate against three former executives. According to the motion, Bankruptcy Law360 relates, Dewey itself has consented to the committee winning derivative standing to pursue those claims against former Dewey chairman Steven Davis and former executive directors Steven DiCarmine and Joel Sanders "in order to protect the interests of the debtor's estate and its 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. DEWEY & LEBOEUF: Committee Asks for Leave to Prosecute Claims ------------------------------------------------------------- The Official Committee of Unsecured Creditors of Dewey & LeBoeuf LLP asks the U.S. Bankruptcy Court for the Southern District of New York to grant it leave, standing and authority to prosecute and, if appropriate, settle certain meritorious claims against the Debtor's former management team: Steven Davis, the Debtor's former Chairman; Steven DiCarmine, the Debtor's former Executive Director; and Joel Sanders, the Debtor's former Chief Financial Officer, for, among other things, breaches of their fiduciary duties to the Firm and its creditors. The Debtor consents to the Committee's proposal. According to papers filed with the Court, not granting the Committee standing to prosecute the claims against the Defendants could impair the estate's ability to maximize its recovery against $50 million of aggregate insurance coverage under the Firm's Law Firm Management Liability and Company Reimbursement Insurance Policy and two related excess policies, as a complaint brought directly by the Debtor may be subject to the so-called "insured versus insured" exclusions set forth in the Policies. The Committee told the Court that it would not be subject to such a defense to coverage. According to the Committee, instead of properly exercising their fiduciary duties, the Defendants grossly mismanaged the Firm and engaged in rampant self-dealing that caused, ultimately, the Firm's demise. "Examples of the Defendants mismanagement giving rise to colorable claims include: (i) their over-distribution of the Firm's available cash to select partners; (ii) their abusive reliance on guarantee agreements (approximately 130 partners had some form of guarantee for 2011 and/or 2012) that bore no economic rationality; and (iii) their concealment of the Firm's true financial condition from its partners, employees and creditors", the Committee said. The Committee says that Defendants' actions were motivated by greed. As alleged in the motion, the Defendants engaged in reckless conduct with the Firm's assets in an effort to maintain their lucrative above-market compensation packages (over $7 million within one year of the Petition Date) and their actions bled the Debtor dry of cash. 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: GEAM Has Relief from Stay to Implement Setoff -------------------------------------------------------------- Dewey & LeBoeuf LLP and GE Asset Management Incorporated have entered into a Stipulaton and Agreed Order granting GEAM relief from the automatic stay to set off mutual prepetition claims. Prior to the Petition Date, the Debtor provided legal services to GEAM. As of the Petition Date, the Debtor owed GEAM the sum of $362,171, as acknowledged by the Debtor in Schedule "F" to Debtor's schedules of assets and liabilities filed with the Bankruptcy Court on July 26, 2012. 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. As agreed, within 10 calendar days following Bankruptcy Court approval, GEAM will effectuate the Setoff and pay the Remaining GEAM Obligation of $323,854 to the account specified in writing by the Debtor A copy of the Stipulation is available at: http://bankrupt.com/misc/dewey.doc630.pdf 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. DIALOGIC INC: Postpones Applications of Financial Covenants ----------------------------------------------------------- Dialogic Corporation entered into a Second Amendment to the Third Amended and Restated Credit Agreement with Obsidian, LLC, Special Value Expansion Fund, LLC, Special Value Opportunities Fund, LLC, and Tennenbaum Opportunities Partners V, LP, as lenders. Dialogic entered into a Nineteenth Amendment relating to the credit agreement, dated as of March 5, 2008, as amended, with Wells Fargo Foothill Canada ULC, as administrative agent, and certain lenders. Pursuant to the Second Amendment, the financial covenants in the Term Loan Agreement, including the minimum EBITDA and the minimum liquidity covenants, were amended to postpone the application of the financial covenants. Previously the financial covenants would have commenced in the fiscal quarter ending March 31, 2013, and under the terms of the Second Amendment they will commence in the fiscal quarter ending June 30, 2013. Pursuant to the Nineteenth Amendment, the Revolving Credit Agreement was also amended to postpone the application of the financial covenants from the fiscal quarter ending March 31, 2013, to the fiscal quarter ending June 30, 2013, provided that the average amount of availability plus any unencumbered cash held by Dialogic Corporation or any Guarantor for the 30-day period immediately preceding the end of a fiscal quarter exceeds $2,500,000. The Revolving Credit Agreement was also amended to reduce the Borrowing Base by an availability block in the amount of $250,000 at all times from the Nineteenth Amendment Effective Date through compliance with the financial covenants for the period ending June 30, 2013. In addition the definition of Triggering Event in the Revolving Credit Agreement was amended to add as of any date of determination, that Qualified Cash is at any time less than $2,500,000. A copy of the Second Amendment is available for free at: http://is.gd/D7lhBX A copy of the Nineteenth Amendment is available for free at: http://is.gd/BRjckL About Dialogic Milpitas, Calif.-based Dialogic Inc. provides communications platforms and technology that enable developers and service providers to build and deploy innovative applications without concern for the complexities of the communication medium or network. The Company reported a net loss of $54.81 million in 2011, following a net loss of $46.71 million in 2010. The Company's balance sheet at June 30, 2012, showed $140.76 million in total assets, $188 million in total liabilities, and a $47.23 million total stockholders' deficit. Bankruptcy Warning The Company said in its 2011 annual report that in the event of an acceleration of the Company's obligations under the Term Loan Agreement or Revolving Credit Agreement and its failure to pay the amounts that would then become due, the Revolving Credit Lender or Term Lenders could seek to foreclose on the Company's assets. As a result of this, or if the Company's stockholders do not approve the Private Placement and the Notes become due and payable, the Company would likely need to seek protection under the provisions of the U.S. Bankruptcy Code or the Company's affiliates might be required to seek protection under the provisions of applicable bankruptcy codes. In that event, the Company could seek to reorganize its business, or the Company or a trustee appointed by the court could be required to liquidate the Company's assets. DIALOGIC INC: Incurs $290,000 Net Loss in Third Quarter ------------------------------------------------------- Dialogic Inc. reported a net loss of $290,000 on $42.39 million of total revenue for the three months ended Sept. 30, 2012, compared with a net loss of $13.09 million on $47.42 million of total revenue for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $33.10 million on $122.05 million of total revenue, in comparison with a net loss of $45.64 million on $148.07 million of total revenue for the same period a year ago. The Company reported a net loss of $54.81 million in 2011, following a net loss of $46.71 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $126.69 million in total assets, $140.69 million in total liabilities, and a $13.99 million total stockholders' deficit. "Dialogic is pleased to report that the organizational, operational and financial initiatives that have been implemented over the past four quarters are starting to yield better results across key dimensions of our business," said Kevin Cook, President and CEO. "We are encouraged that our Next-Gen portfolio achieved double digit sequential revenue growth. In addition, we recorded the lowest quarterly non-GAAP operating expenses and the highest adjusted EBITDA for 2012." "Our customers continue to reinforce that we are uniquely enabling the integration and delivery of complex video, voice and data services across legacy and Next-Gen IMS/LTE networks," added Cook. "Throughout the quarter, we demonstrated success in turning up new Next-Gen networks with our ControlSwitch system, enhancing existing networks with our BorderNet session border controllers and expanding the capacity of severely constrained networks with our Session Bandwidth Optimization portfolio. The company's ability to address the breadth of customer opportunities served us well." A copy of the press release is available for free at: http://is.gd/I2Zsx2 About Dialogic Milpitas, Calif.-based Dialogic Inc. provides communications platforms and technology that enable developers and service providers to build and deploy innovative applications without concern for the complexities of the communication medium or network. Bankruptcy Warning The Company said in its 2011 annual report that in the event of an acceleration of the Company's obligations under the Term Loan Agreement or Revolving Credit Agreement and its failure to pay the amounts that would then become due, the Revolving Credit Lender or Term Lenders could seek to foreclose on the Company's assets. As a result of this, or if the Company's stockholders do not approve the Private Placement and the Notes become due and payable, the Company would likely need to seek protection under the provisions of the U.S. Bankruptcy Code or the Company's affiliates might be required to seek protection under the provisions of applicable bankruptcy codes. In that event, the Company could seek to reorganize its business, or the Company or a trustee appointed by the court could be required to liquidate the Company's assets. DIGITAL DOMAIN: Bankruptcy Judge Approves Asset Sale ---------------------------------------------------- Ama Sarfo at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Brendan L. Shannon on Thursday approved an auction date and bid procedures for Digital Domain Medial Group Inc. to sell its rights to certain movies and property, some of which are disputed by The Walt Disney Co. and Marvel Entertainment LLC. Bankruptcy Law360 relates that Judge Shannon greenlighted DDMG, creator of digital effects for films such as "Titanic" and "Transformers," to auction its assets beginning Nov. 28, but preserved the rights of objectors, including Disney and Marvel, to dispute the sales. 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 trans-media 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 disclosed 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. EASTMAN KODAK: Escapes Potential Investors Class Action ------------------------------------------------------- Beth Winegarner at Bankruptcy Law360 reports that Kodak and its directors skirted a potential class action Thursday in New York federal court when a judge ruled that the investor suing the camera giant failed to prove that its leaders intentionally hid plans to file for bankruptcy. U.S. District Judge Harold Baer agreed that investor Timothy Hutchinson had failed to show that Kodak CEO Antonio Perez, Chief Operating Officer Philip Faraci and Chief Financial Officer Antoinette McCorvey knew about Kodak's bankruptcy plans sooner than they were made public, or that they intentionally deceived investors, Bankruptcy Law360 relates. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. ELDORADO GOLD: S&P Gives 'BB' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' long-term corporate credit rating, and stable outlook, to Vancouver-based gold producer Eldorado Gold Corp. At the same time, Standard & Poor's assigned its 'BB' issue-level rating to the company's US$500 million senior secured notes. It understands that the proceeds from the unsecured notes will be used for general corporate purposes including helping fund Eldorado's growth plans in the next few years. "The rating on Eldorado reflects what we view as the company's credit strengths, which include its low pro forma debt levels, better-than-average cost position, strong credit measures amid high contemporary metals prices, and expanding production profile," said Standard & Poor's credit analyst George Economou. "These strengths are somewhat offset, we believe, by the company's exposure to volatile commodity prices, limited operating diversity, and the execution risks surrounding its collection of growth projects, " Mr. Economou added. Eldorado operates five gold mines in Turkey and China, a polymetallic mine in Greece, and an iron ore mine in Brazil. The company is developing multiple gold projects within its existing operating regions, as well as in Romania. "The stable outlook reflects our view that Eldorado's low-cost production base should support steady funds from operations (FFO) generation as well as help maintain adequate liquidity in a multiyear period of heightened capital spending. Assuming gold prices remain consistent with our base case operating scenario, in the next several years we expect the company to generate a rolling 12-month FFO of about US$400 million with an adjusted FFO-to-debt ratio above 70%," S&P said. "We could lower the rating if Eldorado's mining costs and gold prices meaningfully deteriorate to levels where negative free operating cash flow rapidly escalates, straining the company's adequate liquidity position. This could occur if the company's gold margins shrink to less than US$600 per ounce and capital spending costs meaningfully escalate, driving adjusted FFO to debt below 50%, likely causing free cash burn above US$700 million in 2013," S&P said. "A positive rating action is unlikely through next year, given the execution risks surrounding the concurrent development of multiple growth projects. However, one could occur if the company makes faster-than-expected construction progress on its development projects while maintaining its significant financial risk profile," S&P said. ELEGANT SURFACES: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Elegant Surfaces, a California corporation 551 Carnegie Street Manteca, CA 95337 Bankruptcy Case No.: 12-39700 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Eastern District of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: David C. Johnston, Esq. JOHNSTON & JOHNSTON LAW CORP. 627 13th Street, Suite E Modesto, CA 95354 Tel: (209) 579-1150 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by John Polimeno, president. ELPIDA MEMORY: At Odds With Bondholders on U.S. Court Role ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that although Japan's Elpida Memory Inc. and an ad hoc bondholder group both rely on the same law, they take diametrically different positions on whether the U.S. Bankruptcy Court has any meaningful role to play in the sale of company assets located in the U.S. According to the report, pointing to Chapter 15 of the U.S. Bankruptcy Code, where it sought protection in March, Elpida contends the bankruptcy judge in Delaware is "obliged" to approve the sale of the principal assets to Micron Technology Inc. because the Japanese court already has done so. The report relates the bondholders, by contrast, see Chapter 15 as requiring Elpida to show the bankruptcy judge "a sound business justification for the sale." Chapter 15 is the part of U.S. bankruptcy law governing bankruptcies principally conducted in another country. The bondholders, the report notes, argue that Elpida wants the U.S. court to be a rubber stamp and thus avoid disclosure of "bad facts and harmful testimony that has already been elicited through limited discovery that has taken place to date." In Elpida's case, the U.S. judge previously decided that Japan was home to the so-called foreign main proceeding. The finding automatically halted creditor actions in the U.S. and affords the Delaware judge an ability to assist the court in Tokyo. In papers filed Nov. 13, the bondholders point to Section 1520 of the Bankruptcy Code and interpret it to mean Elpida must make basically the same showing that would be required of a U.S. company before being authorized to sell property. Also looking at Section 1520 and other provisions, Elpida filed papers taking the opposite view and contending that the U.S. court must approve the sale because it was approved by the Japanese court in July after a "rigorous auction process." Elpida said the U.S. court can block the sale of U.S. assets only if it's "manifestly contrary to public policy of the U.S." The briefs filed Nov. 13 will enable the Delaware judge to choose what standard to apply in deciding to approve the sale of Elpida assets located in the U.S. His ruling will also apply to the sale of certain patents to Rambus Inc. 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. ELPIDA MEMORY: Nanya Drops ITC Patent Suit ------------------------------------------ Maria Chutchian at Bankruptcy Law360 reports that Nanya Technology Corp. on Friday asked the U.S. International Trade Commission to toss its investigation into insolvent Elpida Memory Inc. over four dynamic random access memory patents, in light of Micron Technology Inc.'s proposed acquisition of Elpida. Because Micron has a license to the patents at issue, Nanya said it has good cause to terminate the case, which is still in the pre-hearing phase, Bankruptcy Law360 says. 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. EMERALD COAST: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Emerald Coast Hospitality, LLC 2905 Piedmont Road, NE, Suite C Atlanta, GA 30305 Bankruptcy Case No.: 12-78261 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: 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 Estimated Assets: $0 to $50,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ganb12-78261.pdf The petition was signed by William A. Abruzzino, managing member. EVANS OIL: Borrows $500,000 to Purchase Fuel From Chevron --------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized Evan Oil Company, LLC, et al., to obtain senior secured postpetition financing in the amount of $500,000 from Fifth Third Bank to fund the Debtors' purchase of fuel from Chevron pursuant to a direct advance from Fifth Third to Chevron. The DIP Financing will have a fixed rate of 3%. As adequate protection from any diminution in value of the lender's collateral, the Debtor will grant replacement liens on all of Debtors' cash and cash collateral, not including the 31 vehicles subject to the security interest of Naples Lending Group, L.C., and superpriority administrative expense claim status. About Evans Oil Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC, distributes bulk oil, gas, diesel and lubricant products. Evans Oil, together with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30, 2011. Attorneys at Hahn Loeser & Parks LLP serve as bankruptcy counsel to the Debtors. Garden City Group Inc. is the claims and notice agent. The Parkland Group Inc. is the restructuring advisor. Evans Oil estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. Fifth Third Bank failed in its bid for appointment of a Chapter 11 trustee to replace management. Soneet Kapila was appointed by the bankruptcy judge as facilitator effective on May 10, 2012 for Evans Oil. All due diligence regarding any plan of reorganization or any sale of the Debtors' assets will be facilitated by Mr. Kapila until the earlier of consummation of a sale of all or substantially all of the assets, or (2) confirmation of a plan of reorganization. Philip V. Martino is appointed as Chapter 11 trustee for the Debtors. The Court authorized, on a final basis, the sale of assets to Florida Petroleum Company, the highest and best bidder. On Sept. 27, Soneet Kapila, the Court-appointed chief restructuring officer and interim manager of the Debtors, informed the bidders that no bids meeting the undisclosed reserve amount were received. EVANS OIL: Naples Lending Wants to Foreclose Rolling Stock ---------------------------------------------------------- Naples Lending Group, L.C., asks the U.S. Bankruptcy Court for the Middle District of Florida for authorization to secure its interest in 31 vehicles owned by Evan Oil Company, LLC, et al. Naples also intends to exercise any of its rights and remedies related to the rolling stock, including, but not limited to its rights to foreclose upon the rolling stock, whether judicially or non-judicially. Naples holds a first-priority security interest in rolling stock to secure the loan that matured in December 2011 and remains unpaid. About Evans Oil Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC, distributes bulk oil, gas, diesel and lubricant products. Evans Oil, together with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30, 2011. Attorneys at Hahn Loeser & Parks LLP serve as bankruptcy counsel to the Debtors. Garden City Group Inc. is the claims and notice agent. The Parkland Group Inc. is the restructuring advisor. Evans Oil estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. Fifth Third Bank failed in its bid for appointment of a Chapter 11 trustee to replace management. Soneet Kapila was appointed by the bankruptcy judge as facilitator effective on May 10, 2012 for Evans Oil. All due diligence regarding any plan of reorganization or any sale of the Debtors' assets will be facilitated by Mr. Kapila until the earlier of consummation of a sale of all or substantially all of the assets, or (2) confirmation of a plan of reorganization. Philip V. Martino is appointed as Chapter 11 trustee for the Debtors. The Court authorized, on a final basis, the sale of assets to Florida Petroleum Company, the highest and best bidder. On Sept. 27, Soneet Kapila, the Court-appointed chief restructuring officer and interim manager of the Debtors, informed the bidders that no bids meeting the undisclosed reserve amount were received. EVANS OIL: Wants to Surcharge Fifth Third Bank's Collateral ----------------------------------------------------------- Evans Oil Company, LLC, et al., ask the U.S. Bankruptcy Court for the Middle District of Florida to direct Fifth Third Bank to establish an escrow account to be funded by Fifth Third's sale proceeds generated in the Revised Florida Petroleum Company (FPC) transaction for the payment of allowed administrative claims upon confirmation of a plan of liquidation. On Sept. 28, 2012, Fifth Third reached a new agreement with FPC to sell all of the Debtors' assets, including assets that Fifth Third did not have any interest in, for $10.5 million. According to the Debtors, ultimately the Debtors' assets will be sold as a going concern. Without the goods and services provided by the administrative claimants, including the professionals, Fifth Third only would have been able to recover the liquidation value, at best, of its collateral. Because the administrative claimants preserved substantial value for the direct benefit of Fifth Third, which never sought relief from the automatic stay, the Court must surcharge Fifth Third's sale proceeds to ensure that the allowed administrative claims of the cases are paid in full. As of the date of the motion, the total amount of administrative expense claims in the cases is $6.4 million or $3.4 million if FPC assumes the Chevron trade payable. About Evans Oil Naples, Florida-based Evans Oil Company LLC, aka Evans Oil Co LLC, distributes bulk oil, gas, diesel and lubricant products. Evans Oil, together with affiliates, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 11-01515) on Jan. 30, 2011. Attorneys at Hahn Loeser & Parks LLP serve as bankruptcy counsel to the Debtors. Garden City Group Inc. is the claims and notice agent. The Parkland Group Inc. is the restructuring advisor. Evans Oil estimated assets and debts at $10 million to $50 million as of the Chapter 11 filing. Fifth Third Bank failed in its bid for appointment of a Chapter 11 trustee to replace management. Soneet Kapila was appointed by the bankruptcy judge as facilitator effective on May 10, 2012 for Evans Oil. All due diligence regarding any plan of reorganization or any sale of the Debtors' assets will be facilitated by Mr. Kapila until the earlier of consummation of a sale of all or substantially all of the assets, or (2) confirmation of a plan of reorganization. Philip V. Martino is appointed as Chapter 11 trustee for the Debtors. The Court authorized, on a final basis, the sale of assets to Florida Petroleum Company, the highest and best bidder. On Sept. 27, Soneet Kapila, the Court-appointed chief restructuring officer and interim manager of the Debtors, informed the bidders that no bids meeting the undisclosed reserve amount were received. FERRY HOUSE: Owner Reopens Restaurant After State's Seizure ----------------------------------------------------------- Philip Sean Curran at the Princeton Packet reports that Chef Bobby Trigg reopened his Ferry House restaurant on Witherspoon Street last month after the state seized the property in October amid his failure to pay more than $300,000 in taxes. According to the report, Mr. Trigg, speaking in a phone interview, expressed excitement at being back in business. The Ferry House reopened on Oct. 26, although super storm Sandy temporarily closed him again, Mr. Trigg said. The report relates Andrew Pratt, a spokesman for the state Division of Taxation, would not discuss whether Mr. Trigg repaid any of the more than $310,000 in legal judgments for back taxes. The report adds state tax authorities said in October that they had seized Mr. Trigg's property for the first time in October 2011 for his failure to pay taxes. The case was held up, while Ferry House Inc. filed a petition in federal bankruptcy court. According to the report, when the first bankruptcy filing was dismissed, the state said it had resumed its collection efforts. Ultimately, authorities seized the property again last month. The report relates Mr. Trigg admitted he had "spread myself too thin" with other business ventures that included buying the Peacock Inn in 2007 with a business partner, only to later sell his shares. He said those other ventures caused him not to pay attention to what "was happening at Ferry House," the restaurant he had opened to rave reviews originally in Lambertville in 1992. The Ferry House, Inc., is located in 32 Witherspoon Street, Princeton, New Jersey. The Company filed for Chapter 11 protection (Bankr. D. N.J. Case No. 12-35718) on Oct. 23, 2012. Scott E. Kaplan, Esq., represents the Debtor. The Debtor listed assets of less than $50,000 and debts of between $100,000 and $500,000. FIFTY BELOW: ARI Acquires Retail Division Assets ------------------------------------------------ ARI Network Services, Inc., disclosed that the U.S. Bankruptcy Court, District of Minnesota, approved the sale of the retail division assets of Fifty Below Sales & Marketing, Inc. to ARI's wholly-owned subsidiary. The retail division of 50 Below is a leading provider of eCommerce websites in the powersports, automotive tire & wheel aftermarket, medical equipment and pool and spa industries. The transaction is expected to close in the month of November. "This acquisition is consistent with our strategy to grow the business organically and through strategic acquisitions. The addition of 50 Below's retail services employees and customers will help to accelerate our entry into new, high-growth markets, including the automotive aftermarket, specifically automotive tire & wheel dealers," said Roy W. Olivier, CEO and President of ARI. "The combination of 50 Below's retail division with ARI's team, unparalleled catalog of enriched manufacturer and aftermarket content, as well as our award-winning products, will be powerful. 50 Below's technology and focus strengthens ARI's position in these markets and is consistent with our mission to help our customers sell more product." ARI has nearly a 20-year history of supporting the powersports industry and providing dealers, distributors and manufacturers with innovative solutions that help drive service and sales. "This acquisition not only positions ARI as the premier provider of dealer websites in the powersports industry but also establishes ARI as one of the largest providers of equipment dealer websites more broadly," added Olivier. "In addition it provides ARI with more than 2,000 dealer websites in the automotive tire & wheel industry and two new potential growth opportunities in the medical equipment and pool and spa markets to explore." "50 Below's retail division powers more than 3,500 dealer websites," said Darin Janecek, Chief Financial Officer at ARI. "The division reported $10 million in revenue during the first nine months of 2012 and we expect the acquisition should have a significant positive impact on our top line. These additional revenues will allow us to further leverage our fixed cost structure and significantly enhance EBITDA and earnings per share." According to Janecek, ARI plans on making the Duluth office the center of its automotive and powersports operations. "It is our intention to invest in the Duluth operations, leveraging the experience of 50 Below's talented team who are ready to hit the ground running with the support of a profitable and growing business behind them." About ARI ARI Network Services, Inc. is a leader in creating, marketing, and supporting software, software as a service ("SaaS") and data as a service ("DaaS") solutions that enhance revenue and reduce costs for our customers. About Fifty Below Fifty Below Sales & Marketing, Inc. filed a Chapter 11 petition (Bankr. D. Minn. Case No. 12-50900) on Aug. 29, 2012 in Duluth Minnesota. Michael F. McGrath, Esq, at Minneapolis, in Minnesota, serves as counsel to the Debtor. The Debtor estimated up to $50,000 in assets and up to $50,000,000 in liabilities. FIRST DATA: Incurs $212 Million Net Loss in Third Quarter --------------------------------------------------------- First Data Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to the Company of $212 million on $2.67 billion of revenue for the three months ended Sept. 30, 2012, compared with a net loss attributable to the Company of $53.9 million on $2.73 billion of revenue for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss attributable to the Company of $521.9 million on $7.92 million of revenue, in comparison with a net loss attributable to the Company of $446.8 million on $8.02 billion of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $43.90 billion in total assets, $40.99 billion in total liabilities, $66.6 million in redeemable noncontrolling interest, and $2.84 billion in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/OGCPEI About First Data Based in Atlanta, Georgia, First Data Corporation, with over $10 billion of revenue for the 12 months ended June 30, 2010, provides commerce and payment solutions for financial institutions, merchants, and other organizations worldwide. The Company reported a net loss of $336.10 million in 2011, a net loss of $846.90 million in 2010, and a net loss of $1.01 billion on $9.31 million in 2009. * * * The Company's carries a 'B3' corporate family rating, with a stable outlook, from Moody's Investors Service, a 'B' corporate credit rating, with stable outlook, from Standard & Poor's, and a 'B' long-term issuer default rating from Fitch Ratings. FIRST PLACE: Retains DRC as Ch. 11 Claims & Noticing Agent ---------------------------------------------------------- Donlin, Recano & Company, Inc. on Nov. 12 disclosed that it has been retained to provide claims and noticing agent services in the First Place Financial Corp. Chapter 11 case. First Place Financial Corp. is a $3.1 billion financial services holding company, based in Warren, Ohio. Donlin, Recano & Company, Inc. -- http://www.donlinrecano.com-- is a division of DF King Worldwide and a provider of claims, noticing, balloting, solicitation and technology solutions. King Worldwide is a financial communications, proxy solicitation and stakeholder management company, serving over 1,000 public company, mutual fund family and private equity firm clients domiciled in North America, Europe and Asia. First Place Financial Corp. filed a bare-bones Chapter 11 petition (Bankr. D. Del. Case No. 12-12961) in Delaware on Oct. 28 to sell its bank unit to Talmer Bancorp, Inc., absent higher and better offers. The Debtor declared $175 million in total assets and $65.6 million in total liabilities as of Oct. 26, 2012. The Debtor has tapped Patton Boggs LLP and The Bayard Firm, PA as legal counsel. FISHER ISLAND: Hearing on Case Dismissal Continued Until Dec. 17 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida signed an agreed order continuing until Dec. 17, 2012, at 3:30 p.m., the hearing to consider, among other things, the petitioning creditors' motion to dismiss the Chapter 11 case of Fisher Island Investments, Inc., et al. On Sept. 18, 2012, petitioning creditors, Solby+Westbrae Partners, 19 SHC, Corp., Ajna Brands, Inc., 601/1700 NBC, LLC, Axafina, Inc., and Oxana Adler, LLM notified the Court that they had withdrawn their respective petitions and further confirm that they are not prosecuting or seeking an order for relief in the Debtors' involuntary bankruptcy cases. In this relation, the petitioning creditors request that the Court dismiss their involuntary petitions and the bankruptcy cases. About Fisher Island Investments Solby+Westbrae Partners; 19 SHC Corp.; Ajna Brands Inc.; 601/1700 NBC LLC; Axafina Inc.; and Oxana Adler, LLM, filed an involuntary Chapter 11 petition against Miami Beach, Florida-based Fisher Island Investments, Inc. (Bankr. S.D. Fla. Case No. 11-17047) on March 17, 2011. On the same date, involuntary Chapter 11 petitions were also filed against the Company's affiliates, Mutual Benefits Offshore Fund, LTD (Bankr. S.D. Fla. Case No. 11-17051) and Little Rest Twelve, Inc. (Bankr. S.D. Fla. Case No. 11-17061). Judge A. Jay Cristol presides over the case. The case was previously assigned to Judge Laurel M. Isicoff. Petitioning creditors are represented by Craig A. Pugatch, Esq., and George L. Zinkler, Esq., at Rice Pugatch Robinson & Schiller, P.A., 101 NE 3 Ave. Suite 1800, Fort Lauderdale FL 33301. John F. O'Sullivan, Esq., at Hogan Lovells US LLP, Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.,, and Terrance A. Dee, Esq., at DiBello, Lopez & Castillo, P.A., represent Alleged Debtor Fisher Island Investments, Inc., as counsel. Donald F. Walton, the U.S. Trustee for Region 21, appointed James S. Feltman as an examiner in the involuntary cases. Greenberg Traurig, P.A., serves as counsel for the examiner. FLETCHER INT'L: Chapter 11 Trustee Wins Subpoena Power ------------------------------------------------------ Lisa Uhlman at Bankruptcy Law360 reports that U.S. Bankruptcy Judge Robert E. Gerber granted a request Friday by Fletcher International Ltd.'s Chapter 11 trustee for authority to issue subpoenas to former employees, officers and directors and other parties in connection with his investigation into the debtor's downfall. Bankruptcy Law360 relates that Judge Gerber approved trustee Richard J. Davis' Oct. 18 motion for authorization to issue subpoenas for the production of documents and to examine individuals and entities that might have information about the events leading up to the private equity firm's June 29 bankruptcy. About Fletcher International Fletcher International, Ltd., filed a bare-bones Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-12796) on June 29, 2012, in Manhattan. The Bermuda exempted company estimated assets and debts of $10 million to $50 million. The bankruptcy documents were signed by its president and director, Floyd Saunders. David R. Hurst, Esq., at Young Conaway Stargatt & Taylor, LLP, in New York, serves as counsel and Appleby (Bermuda) Limited serves as special Bermuda counsel. The Debtor disclosed $52,163,709 in assets and $22,997,848 in liabilities as of the Chapter 11 filing. Fletcher International Ltd. is managed by the investment firm of Alphonse "Buddy" Fletcher Jr. Fletcher Asset Management was founded in 1991. During its initial four years, FAM operated as a broker dealer trading various debt and equity securities and making long-term equity investments. Then, in 1995, FAM began creating and managing a family of private investment funds. The Debtor is a master fund in the Fletcher Fund structure. As a master fund, it engages in proprietary trading of various financial instruments, including complex, long-term, illiquid investments. The Debtor is directly owned by Fletcher Income Arbitrage Fund and Fletcher International Inc., which own roughly 83% and 17% of the Debtor's common shares, respectively. Arbitrage's direct parent entities are Fletcher Fixed Income Alpha Fund and FIA Leveraged Fund, both of which are incorporated in the Cayman Islands and are subject to liquidation proceedings in that jurisdiction, and which own roughly 76% and 22% of Arbitrage's common stock, respectively. The Debtor currently has a single subsidiary, The Aesop Fund Ltd. After filing for Chapter 11 protection, Fletcher immediately started a lawsuit in bankruptcy court to stop the involuntary bankruptcy in Bermuda. Judge Gerber at least temporarily halted liquidators appointed in the Cayman Islands from moving ahead with proceedings in Bermuda. The lawsuit to halt the Bermuda liquidation is Fletcher International Ltd. v. Fletcher Income Arbitrage Fund, 12-01740, in the same court. Richard J. Davis, Chapter 11 trustee appointed in the case taps Luskin, Stern & Eisler LLP as his counsel. FONTAINEBLEAU L.V.: WTC Seeks Valuation of Property Sold -------------------------------------------------------- Wilmington Trust, N.A., as administrative agent, notified the Court of its dismissal, with prejudice, of its motion to determine the value of the personal property sold to Icahn Nevada and to allocate and distribute sale proceeds. The dismissal came after the Court's approval of a settlement among Wilmington, the Term Lenders, the Mechanic Lien Defendants, and QTS Logistics Inc. and Quality Transportation Services of Nevada, Inc. The Settlement provides that the Trustee will distribute $6.34 million from the sale proceeds in the sale proceeds account to Wilmington Trust in satisfaction of Wilmington Trust's and the Term Lenders' liens against the sale proceeds attributable to the personal property sold by the Debtors to Icahn Gaming. The Trustee will also distribute $500,000 from the Sale Proceeds in the Sale Proceeds Account to QTS in full satisfaction of the QTS claims for its Warehouse Liens against the Sale Proceeds attributable to the personal property sold by the Debtors to Icahn Gaming. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- was planned as a hotel-casino on property along the Las Vegas Strip. Its developer, Fontainebleau Las Vegas Holdings LLC and affiliates, filed for Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 09-21481) on June 9, 2009. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. Kurtzman Carson Consulting LLC served as the Debtors' claims agent. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represented the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC estimated more than $1 billion in assets and debts, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings LLC estimated less than $50,000 in assets. In February 2010, Icahn Enterprises L.P. acquired Fontainebleau for roughly $150 million. The bankruptcy case was subsequently converted to Chapter 7. Soneet R. Kapila has been named the trustee for the Chapter 7 case of Fontainebleau Las Vegas. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FONTAINEBLEAU L.V.: Trustee Settles Disputes With Digitek, et al. ----------------------------------------------------------------- Soneet R. Kapila, Chapter 7 trustee for Fontainebleau Las Vegas Holdings LLC, previously asserted that certain parties received amounts from the Debtors within the prohibited periods before filing a petition for Chapter 11 protection. Those parties disputed the allegations. To resolve those issues, certain counterparties agreed to pay amounts to the Chapter 7 Trustee in exchange for the dismissal of the complaints seeking to recover the transfers. The settling counterparties and the Debtors sought and obtained Court approval of stipulations compromising the controversies. The settling counterparties are: * Digitek, Inc. * Illuminating Concepts * Nedco Supply * Baker Knapp & Tubbs, Inc. * Tai Ping Carpets Americas, Inc. * Arthur Weiner Enterprises, Inc. * Mancini Duffy * David Collins Studio Limited * Max Protetch * Sheppard Mullin Richter & Hampton, LLP * PricewaterhouseCoopers LLP * James R. Rimelspach, Architect, Ltd. * Owens Geotechnical, Inc. * CDW Direct, LLC * KPMG, LLP * Paul Steelman Design Group, Incorporated * IBA Consultants * RJF International * Via West, Inc. * certain Banks * Steven Langford Architects, Inc. * Avnet, Inc. * TCS John Huxley America, Inc. * Barker Enterprises, Inc. * Valley Forge Fabrics, Inc. * Inspection and Valuation International, Inc. * Tender Creative, LLC * W.L. Griffin, Inc. * Young Electric Sign Company * Kravet, Inc. About Fontainebleau Las Vegas Fontainebleau Las Vegas -- http://www.fontainebleau.com/-- was planned as a hotel-casino on property along the Las Vegas Strip. Its developer, Fontainebleau Las Vegas Holdings LLC and affiliates, filed for Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 09-21481) on June 9, 2009. Scott L Baena, Esq., at Bilzin Sumberg Baena Price & Axelrod LLP, represented the Debtors in their restructuring effort. Kurtzman Carson Consulting LLC served as the Debtors' claims agent. Attorneys at Genovese Joblove & Battista, P.A., and Fox Rothschild, LLP, represented the Official Committee of Unsecured Creditors. Fontainebleau Las Vegas LLC estimated more than $1 billion in assets and debts, while each of Fontainebleau Las Vegas Capital Corp. and Fontainebleau Las Vegas Holdings LLC estimated less than $50,000 in assets. In February 2010, Icahn Enterprises L.P. acquired Fontainebleau for roughly $150 million. The bankruptcy case was subsequently converted to Chapter 7. Soneet R. Kapila has been named the trustee for the Chapter 7 case of Fontainebleau Las Vegas. Bankruptcy Creditors' Service, Inc., publishes Fontainebleau Bankruptcy News. The newsletter tracks the Chapter 11 proceedings of Fontainebleau Las Vegas Holdings, LLC, and its debtor- affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) FRESH N' PURE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Fresh N' Pure Distributors, Inc. 435 E. North Ave. Streamwood, IL 60107 Bankruptcy Case No.: 12-44450 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Joshua D. Greene, Esq. SPRINGER, BROWN, COVEY, GAERTNER & DAVIS 400 South County Farm Rd., Suite 330 Wheaton, IL 60187 Tel: (630) 510-0000 E-mail: jgreene@springerbrown.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb12-44450.pdf The petition was signed by Joseph Purpura, vice president. GARY DOURDAN: Former CSI Actor in Bankruptcy -------------------------------------------- Examiner.com reports that former "C.S.I." star Gary Dourdan filed for Chapter 11 bankruptcy on Aug. 30. The papers in the filing say he has slightly more than $1.8 million in assets, but has liabilities of approximately $1.73 million. According to the report, most of the debt is owed to various banks, including Union Bank, which currently holds the mortgage on the troubled actor's home. The report says it is unclear if the mortgage is in foreclosure or in default. His remaining assets include $200 cash, $3,000 in a bank account, $4,000 in furniture, $200 worth of books, $1,500 in clothes, $500 in watches, and a 2006 Dodge Charger worth approximately $7,000. The report says, in addition, Mr. Dourdan said his disposable income is only $321 a month, with his bills (averaging $14,562 a month) claiming most of the $14,883 the actor earns monthly, on average. Examiner.com recounts that a 2008 TMZ report said Mr. Dourdan was found by police passed out in his car and that he was arrested on suspicion of heroin, cocaine, ecstasy and prescription drugs. He was later fired from the CSI show, although "official" reports differ on the matter, but his character was killed off. GATZ PROPERTIES: High Court Upholds Ruling on Manager's Liability ----------------------------------------------------------------- The Supreme Court of the State of Delaware affirmed the ruling of the Court of Chancery of the State of Delaware that William Gatz, manager and partial owner of Gatz Properties, breached his contractually adopted fiduciary duties to the minority members of Peconic Bay LLC. Peconic Bay was formed by Gatz Properties and Auriga Capital Corp. in 1997 to hold a long-term lease and develop a golf course on property located on Long Island that the Gatz family had owned since the 1950s. Peconic Bay took out a $6 million note to finance construction of Long Island National Golf Course, a first-rate Robert Trent Jones, Jr.-designed golf course. The Gatz family formed Gatz Properties to hold title to the property. The property was leased to Peconic Bay under a Ground Lease dated Jan. 1, 1998. The lease has an initial term for 40 years. On March 31, 1998, Peconic Bay entered into a sublease with American Golf Corp., which was at the time one of the largest golf course operators in the country. American Golf never operated the Course at a profit, later let the Course fall into disrepair, and exercised the early termination option in 2010. Mr. Gatz orchestrated an auction without a broker, and Gatz Properties was the only bidder. Gatz, following the sham auction, took control of the golf course. Auriga and the minority holders sued Mr. Gatz and Gatz Properties for breach of duty as manager of Peconic Bay, bad faith conduct, and willful misrepresentations. Mr. Gatz had turned down a third party, which expressed interest to acquire the ground lease for "well north of $6 million." The Chancery Court found that that deal would have generated to the minority members a full return of their invested capital ($725,000) plus a 10% aggregate return ($72,500). Mr. Gatz purchased Peconic Bay for $50,000 cash plus assumption of debt, which exceeded $5.4 million. The minority members collectively received $20,985 under the Gatz deal. At trial Mr. Gatz admitted that "had there been another bidder at the Auction, he 'might have bid higher' than $50,000." The Delaware Supreme Court also affirmed the Court of Chancery's award of damages in the amount of $776,515 to the minority members, as well as one-half of the plaintiffs' reasonable attorneys' fees. A copy of the Delaware Supreme Court's Nov. 7 decision is available at http://is.gd/A69p7c About Gatz Properties Gatz Properties LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-74493) on July 20, 2012, in Central Islip, New York. The Company scheduled $7,877,511 in assets and $7,892,130 in liabilities. Bankruptcy Judge Alan S. Trust oversees the Debtor's case. Salvatore LaMonica, Esq., at LaMonica Herbst and Maniscalco, in Wantagh, New York, serves as counsel. GENTIVA HEALTH: S&P Revises Outlook on 'B-' CCR on Higher Margins ----------------------------------------------------------------- Standard & Poor's Ratings Services revised the 'B-' rating outlook on Gentiva Health Services Inc. to positive from stable. At the same time, S&P affirmed its 'B-'corporate credit rating on the company. The positive outlook reflects S&P's expectation for steady EBITDA margins and continued free operating cash flow generation. "Our ratings on Atlanta-based Gentiva Health Services Inc. reflect the company's 'vulnerable' business risk profile, based on its significant reliance on Medicare payments that continue to be under pressure, particularly in the home health sector," said Standard & Poor's credit analyst Tahira Wright. The ratings also reflect the company's "highly leveraged" financial risk profile, arising from the $1 billion debt-financed acquisition of hospice provider Odyssey Healthcare in 2010. "As expected, operating environment trends remain negative for the nine months ended Sept. 30, 2012, reflecting Medicare reimbursement changes for home health that went into effect on Jan. 1, 2012. Year-to-date revenues declined 5%, trending slightly above our expectations for a 6% decrease. However, despite contracted revenues, Gentiva continues to boost EBITDA margins. Adjusted EBITDA margins improved to more than 12% from 8% a year ago. We believe the company will sustain improved margins through the end of the year and throughout 2013, despite another marginal 2013 Medicare rate cut of 0.4% to home health services and possible sequestration that would begin in 2013 (2% across the board rate cut). The company should benefit from a 0.9% increase in rates for hospice in 2013 and relaxing the physician participation requirements for home health reimbursement. Our 2013 expectations assume these rate cuts will be partially offset by the increase in rates in hospice and episodic admission growth," S&P said. "The year-to-date margin improvement has exceeded our expectations for a decrease in margins of 100 basis points (bps) for full-year 2012. Management's ability to cut costs from a recent restructuring and branch closings was more successful than we anticipated. However, EBITDA margins still remain below peak levels of 14%. Stronger earnings and improved collections have contributed to the company turning free operating cash flow (FOCF) positive, generating about $65 million of cash so far in 2012. Our base-case assumptions now project the company to generate EBITDA of about $170 million in 2012 and 2013, and FOCF ranging from $90 million to $100 million annually, absent one-time costs," S&P said. "Our positive rating outlook reflects our expectation that Gentiva will be able to manage through a marginal 2013 home health rate cut and sustain improved margins to aid in continued generation of FOCF. We expect cost-containment measures to partially mitigate ongoing revenue declines and that headroom under revised covenants will continue to exceed 20%. We could raise the rating on Gentiva if the company continues to demonstrate resilience during a difficult reimbursement environment and further establish its track record of steady EBITDA margins and free cash flow generation," S&P said. "We could revise our outlook to stable or lower the rating if the company's operations are further jeopardized as a result of adverse developments in Medicare reimbursement, affecting liquidity and resulting in a possible breach of amended covenants," S&P said. GLOBAL AVIATION: Seeks Approval of Diligence Fees ------------------------------------------------- BankruptcyData.com reports that Global Aviation Holdings filed with the U.S. Bankruptcy Court a motion authorizing the Company to pay certain diligence fees to and/or reimburse certain due diligence expenses incurred by prospective exit lenders in connection with the Company's efforts to provide exit financing, subject to the aggregate $350,000 cap. The Debtors assert, "Rothschild Inc., the Debtors' financial advisor, is canvassing the lending market to obtain the best exit financing facility possible. Specifically, Rothschild has identified at least three credible potential sources of exit financing. To obtain a commitment, the potential lenders need to complete legal and business due diligence and, to accomplish this, the potential lenders are requiring that the Debtors pay certain expenses in advance in the form of a work fee." About Global Aviation Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011. Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan. Wells Fargo Bank NA is agent for both. Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans. On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven member official committee of unsecured creditors in the case. The Committee tapped Lowenstein Sandler PC as its counsel, and Imperial Capital, LLC as its financial advisor. GLOBAL AVIATION: Seeks Global Settlement Approval ------------------------------------------------- BankruptcyData.com reports that Global Aviation Holdings filed with the U.S. Bankruptcy Court a motion for an order approving (a) the global settlement among the Debtors, the debtor-in-possession lenders, the ad hoc group of senior secured noteholders, the second lien lenders, the creditors' committee, the IBT, ALPA and TWU and (b) certain immaterial modifications to the First Amended Joint Plan of Reorganization of Global Aviation Holdings. The Debtors assert, "To effectuate the Global Settlement, the Debtors modified the Plan. The modifications, while important, are immaterial. As specified in more detail below, the Debtors have improved the proposed recovery to Holders of Class 4 Second Lien Claims and Class 5 General Unsecured Claims. While the recovery for these classes dilutes the recovery of Holders of Class 3 Senior Secured Claims by approximately 3%, the dilution is not material and, therefore, does not require further solicitation of votes on the Plan. Moreover, the Ad Hoc Group of Senior Secured Noteholders, who represent approximately 73% in amount of the Senior Secured Noteholders, was actively involved in the settlement negotiations and supports the Plan as modified. Given the risk of a contested confirmation hearing and the attendant costs of litigation, the Global Settlement and the necessary modifications to the Plan are in the best interests of the Debtors' estates and all parties in interest." The Court previously scheduled a Nov. 28, 2012 hearing to consider the Plan. About Global Aviation Global Aviation Holdings Inc., based in Peachtree City, Ga., is the parent company of North American Airlines and World Airways. Global is the largest commercial provider of charter air transportation for the U.S. military, and a major provider of worldwide commercial global passenger and cargo air transportation services. North American Airlines, founded in 1989 and based in Jamaica, N.Y., operates passenger charter flights using B757-200ER and B767-300ER aircraft. World Airways, founded in 1948 and based in Peachtree City, Ga., operates cargo and passenger charter flights using B747-400 and MD-11 aircraft. Global Aviation, along with affiliates, filed Chapter 11 petitions (Bankr. E.D.N.Y. Case No. 12-40783) on Feb. 5, 2012. Global's lead counsel in connection with the restructuring is Kirkland & Ellis LLP and its financial advisor is Rothschild. Kurtzman Carson Consultants LLC is the claims agent. The Debtors disclosed $589.8 million in assets and $493.2 million in liabilities as of Dec. 31, 2011. Liabilities include $146.5 million on 14% first-lien secured notes and $98.1 million on a second-lien term loan. Wells Fargo Bank NA is agent for both. Global said it will use Chapter 11 to shed 16 of 30 aircraft. In addition, Global said it will use Chapter 11 to negotiate new collective bargaining agreements with its unions and deal with liabilities on multi-employer pension plans. On Feb. 13, 2012, the U.S. Trustee for Region 2 appointed a seven member official committee of unsecured creditors in the case. The Committee tapped Lowenstein Sandler PC as its counsel, and Imperial Capital, LLC as its financial advisor. GOODRICH PETROLEUM: S&P Lowers Corporate Credit Rating to 'B-' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Houston-based Goodrich Petroleum Corp. (GDP) to 'B-' from 'B'. The outlook is stable. "We also lowered our issue-level rating on the company's senior unsecured debt to 'CCC' from 'CCC+'. The recovery rating remains '6', indicating our expectation of negligible (0% to 10%) recovery to creditors in the event of a payment default," S&P said. "Our rating action reflects a reduction in the company's borrowing base as well as third-quarter oil production coming in slightly below expectations, resulting in the company reducing its 2012 oil production exit rate guidance by 10%," said Standard & Poor's credit analyst Carin Dehne-Kiley. "The production shortfall was a result of asset sales and delayed completions in the Tuscaloosa Marine Shale oil play. We believe the company's liquidity is 'less than adequate' and will decline to $95 million by year-end 2012 and to $20 million by year-end 2013 (based on the Standard & Poor's price deck and our capital spending assumption of $200 million next year). In our view, this level of liquidity plus anticipated operating cash flows will not be sufficient to cover the company's capital expenditures and the potential repurchase of its convertible notes maturing in 2029, which become putable at the option of the holders on Oct. 1, 2014," S&P said. "The ratings on GDP reflect our assessment of the company's 'vulnerable' business risk, 'highly leveraged' financial risk, and 'less than adequate' liquidity. The ratings incorporate GDP's participation in the highly cyclical, capital-intensive and competitive oil and natural gas exploration and production (E&P) industry, its relatively small and geographically concentrated reserve base, its meaningful exposure to weak natural gas prices in 2013, and our projection that the company will generate negative free operating cash flow (FOCF) in 2012 and 2013. Our ratings on GDP also reflect the company's ongoing shift to oil development in the Eagle Ford and Tuscaloosa Marine shales, and management's track record of raising external capital," S&P said. "The stable outlook reflects our expectation that GDP should be able to raise capital, either via asset sales, entering into a joint venture, or issuing equity or debt, in order to fund ongoing drilling expenditures and the potential repurchase of its convertible notes in 2014. We could lower the rating if it appears GDP is unable to execute planned asset sales or joint ventures, or is unable to access the capital markets within the next six to nine months. We could raise the rating if GDP is successful in improving its liquidity position without increasing leverage above the 4.75x area," S&P said. GRAFTECH INT'L: Moody's Affirms 'Ba1' CFR; Rates Sr. Notes 'Ba2' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to GrafTech International Ltd.'s proposed $300 million senior unsecured notes. All other ratings, including the Ba1 Corporate Family Rating ("CFR") and SGL-2 short term liquidity rating, were affirmed. The rating outlook is stable. The debt-for-debt nature of the transaction and improved liquidity, combined with expectations for conservative financial policies, drove the affirmation of the Ba1 CFR. "The notes issuance will improve GrafTech's liquidity position by creating additional revolving credit capacity to make investments, cover any operating shortfalls related to softening business conditions in key steel end markets, and handle upcoming debt maturities in 2015," said Moody's analyst Ben Nelson. Proceeds from the transaction will be used to repay revolving credit borrowings and pay transaction-related fees and expenses. At the end of its most recent fiscal quarter, GrafTech reported $430 million of cash advances against a $570 million revolving credit facility. Moody's anticipates that the transaction will improve availability to well over $400 million, a significant increase from current availability of $140 million. The incremental borrowing capacity will also provide good liquidity to support upcoming capital investments. The actions: Issuer: GrafTech International Ltd. Corporate Family Rating, Affirmed Ba1 Probability of Default Rating, Affirmed Ba1 Senior Unsecured Notes, Assigned Ba2 LGD4 64% Issuer: GrafTech Finance, Inc. Senior Secured Revolving Credit Facility, Affirmed Baa3 LGD2 20% (from LGD3 35%) Outlook, Stable Ratings Rationale The Ba1 CFR benefits from leading market positions in the graphite electrodes business, solid profit margins, geographic and operational diversity, and a very strong balance sheet. Operations have strengthened cyclically with improved conditions in key steel end markets over the past few years and structurally with recent acquisitions that provided partial back integration into key raw material needle coke. However, end market cyclicality and raw material volatility continue to constrain the rating and it is unlikely to be raised into investment grade absent a substantive diversification of the business. The rating incorporates Moody's expectation that the company will continue to grow, as supported by a very good liquidity position, through expansionary capital spending and bolt-on acquisitions within conservative financial policies consistent with the Ba1 rating level. The stable rating outlook assumes that GrafTech will be able to navigate challenging end market conditions in the steel industry to maintain financial leverage below 3 times and maintain a good liquidity position. While a rating upgrade is unlikely because of the company's narrow business profile, Moody's could consider an upgrade with continued work towards reducing the cyclicality of operating earnings in the electrodes business and a significant expansion of the engineering solutions business without any degradation of the company's credit measures. Conversely, Moody's could downgrade the rating if Moody's expects an adverse structural shift in profit margins, financial leverage above 3 times on a sustained basis, or significant deterioration in the company's liquidity position. Sustained negative free cash flow without a fundamental improvement in the business or substantial debt-funded shareholder returns could also have negative rating implications. The principal methodology used in rating Graftech 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. GrafTech International Ltd. manufactures graphite electrodes, refractory products, needle coke products, advanced graphite materials, and natural graphite products. The company has 19 manufacturing facilities located in four continents. Annual production capacity for graphite electrodes is about 255,000 metric tons. Headquartered in Parma, Ohio, GrafTech generated revenues of approximately $1.2 billion for the twelve months ended September 30, 2012. GRAFTECH INT'L: S&P Gives 'BB+' Rating on New $300MM Senior Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' issue-level rating (same as the corporate credit rating) to Parma, Ohio-based GrafTech International Ltd.'s proposed $300 million senior unsecured notes due 2020. The recovery rating on the notes is '4', indicating its expectation for average (30%-50%) recovery in the event of a payment default. At the same time, S&P affirmed its 'BB+' corporate credit rating on Graftech. The outlook is stable. S&P expects the company to use the proceeds from the proposed issuance to repay part of its outstanding revolver balance. "The rating affirmation and stable outlook reflect our expectation that the average price of graphite electrodes, the company's primary product, will be up about 11% to 12% in 2012, based on current market prices," said credit analyst Maurice Austin. "This is despite our expectations that sales volumes will decline because customers are destocking, a consequence of the decline in steel production due to the slower-than-anticipated economic recovery." "The stable rating outlook reflects our expectation that GrafTech's credit metrics are likely to remain at levels that we would consider to be in line for the rating despite the weakness in the company's European business. Specifically, we expect debt- to-EBITDA of about 2.5x and FFO-to-debt of about 30%. These metrics are driven by our expectation that prices for electrodes will increase by 11%-12%, despite a decline in steel production due to the slower-than-anticipated economic recovery," S&P said. HAWKER BEECHCRAFT: Taps Korn/Ferry as Director Search Consultant ---------------------------------------------------------------- Hawker Beechcraft, Inc., et al., ask the U.S. Bankruptcy Court for the Southern District of New York for permission to employ Korn/Ferry International as their director search consultant to assist in the process of identifying qualified individuals to serve as members of the post-emergence board of directors for the Debtors. The Debtors say that the Court will convene a hearing on the request on a date and time to be determined by the Court. The Debtors relate that they filed the Chapter 11 cases to implement a consensual debt-to-equity recapitalization transaction that has been agreed to by holders of a majority of the Debtors' prepetition secured debt (the Consenting Lenders) and prepetition senior bond debt (the Consenting Bondholders, and together with the Consenting Lenders, the Consenting Creditors). The Required Consenting Senior Secured Lenders and the Required Consenting Senior Noteholders subsequently extended the outside date for the Debtors to obtain approval of an acceptable disclosure statement, which date was ultimately extended to Nov. 19, 2012. On Oct. 29, 2012, the Debtors filed an amended plan of reorganization and the disclosure statement related thereto that seek to implement the Standalone Transaction, and the Debtors are seeking to emerge from chapter 11 in the first quarter of 2013. According to the Debtors, Korn/Ferry's services are specialized in nature and will not be duplicative of those provided by the Debtors' retained professionals. Korn/Ferry will coordinate any services performed at the Debtors' request with the Debtors' professionals, including financial advisors and counsel, as appropriate, to avoid duplication of effort. As set forth in the Engagement Letter, Korn/Ferry will a charge search fee for its services in the amount of $450,000 or $75,000 per director in addition to an administrative fee calculated as 12% of the Search Fee. Further, in the event that the Debtors determine to appoint fewer than six directors to the new board, the fee would be reduced by $75,000 for each reduction. In any event, the minimum amount for the search fee will be $225,000. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee's financial advisor is FTI Consulting, Inc. HEALTHCARE PARTNERS: Moody's Withdraws 'Ba2' CFR/PDR ---------------------------------------------------- Moody's Investors Service withdrew all of Healthcare Partners LLC's ("HCP") ratings including the Ba2 corporate family and probability of default ratings due to the closing of the DaVita acquisition on November 1 and the repayment of existing debt. The following ratings were withdrawn (all ratings were on review for possible downgrade): Corporate family rating, Ba2; Probability of default rating, Ba2; $15 million revolving credit facility, Ba1 (LGD2, 22%); $585 million (face value) term loan, Ba1 (LGD2, 22%). Rating Rationale The ratings withdrawal resulted from HCP's acquisition by DaVita (Ba3, stable) and the repayment of existing debt. The principal methodology used in rating Healthcare Partners was the Global Healthcare Service Provider 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. Healthcare Partners, LLC ("HCP"), headquartered in Torrance, California, is a multi-specialty provider organization employing over 700 physicians in California, Florida and Nevada in addition to contracting with more than 7,200 physicians. The company's revenues are derived primarily by contracting with HMO's under a capitated (prepaid), delegate model. HMX ACQUISITION: Nov. 20 Deadline to File Schedules and SOFA ------------------------------------------------------------ The Hon. Allan L. Gropper of the U.S. Bankruptcy Court for the Southern District of New York set Nov. 20, 2012 as HMX Acquisition Corp., et al.'s deadline to file their schedules of assets and liabilities and statements of financial affairs. About HMX Acquisition HMX Acquisition Corp. and HMX Poland Sp. z o. o. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 12-14300 and 12-14301) on Oct 19, 2012. On Oct. 21, 2012, affiliates HMX, LLC, Quartet Real Estate, LLC, and HMX, DTC Co. also filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Cases Nos. 12-14327 to 12-14329). Judge Allan L. Gropper presides over the cases. The Debtors are seeking to have their cases jointly administered for procedural purposes under Case No. 12-14300, which is the case number assigned to HMX Acquisition Corp. The Debtors' principal place of business is located at 125 Park Avenue, in New York. The Debtors are leading American designers, manufacturers, licensors, and licensees of men's and women's business and leisure apparel focused primarily on the luxury, bridge, and better price points. The Debtors are 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. As of Oct. 12, 2012, the Debtors had consolidated assets of $153.6 million and total liabilities of $119.5 million. Jared D. Zajac, Esq., at Proskauer Rose LLP, in New York; and Mark K. Thomas, Esq., and Peter J. Young, Esq., in Proskauer Rose LLP, in Chicago, represent the Debtors as counsel. The Debtors' investment banker is William Blair & Company, L.L.C. CDG Group, LLC, is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC is the Debtors' claims agent. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. HMX ACQUISITION: Dec. 10 Auction of Substantially All Assets ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized HMX Acquisition Corp., et al., to enter into a stalking horse agreement with Authentic Brands Group, LLC, and approved the bidding procedures to govern the marketing, auction and sale of substantially all of their operating assets and their intellectual property, and break up fee. As reported in the Troubled Company Reporter on Oct. 29, 2012, the Debtors requested that the Court enter orders (1) authorizing the Debtors to enter into the Stalking Horse Purchase Agreement with Authentic Brands Group, LLC, for the sale of substantially all assets of the Debtors; (2) approving the bidding procedures for the conduct of the auction; and (3) approving the payment of a break-up fee in the amount of $2,200,000 and expense reimbursement of up to a maximum of $700,000 in the event the Stalking Horse Purchase Agreement is terminated through the Seller's consummation of an alternative transaction. The Stalking Horse Purchaser has agreed to pay the sum of: (A) the aggregate amount of the Salus prepetition and postpetition claims against the Sellers and against Coppley plus (B) $5,100,000 to the Debtors' bankruptcy estates, exclusive of the assumption of any assumed liabilities. A copy of the APA is available at: http://bankrupt.com/misc/hmx.doc21.pdf The Court also ordered that absent further order of the Court: (a) the expense reimbursement is capped in the amount of $425,000, allocable to or for the benefit of the stalking horse bidder; and, (b) no portion of the expense reimbursement may be paid to, or allocated for the benefit of, Douglas Williams, the Debtors' chief executive officer. The bidding procedures approved by the Court include, among other things: Bid Deadline: Dec. 6, at 5 p.m. Auction: Dec. 10, at 10 a.m., at the offices of Proskauer Rose LLP, 11 Times Square, New York City Sale Hearing: Dec. 13, at 10 a.m. The Court will hold a status hearing on Nov. 16 at 10 a.m. (prevailing Eastern Time) to entertain any objections that any subsequently appointed statutory committee may raise with respect to the relief. On Nov. 1, Workers United objected to the Debtors' request to sell their assets, stating that the proposed APA is flawed because it would breach critical worker job protection provisions that are contained within the existing collective bargaining agreement covering the Rochester and Des Plains Production Facilities. Workers United is the modern day successor to the ILGWU and ACTWU as the exclusive representative of America's remaining garment industry employees. Workers United represents 1,100 production, maintenance and retail employees of HMX LLC including production and maintenance employees employed at HXM facilities in Rochester, New York, Des Plains, Illinois and Hamilton, Ontario, Canada About HMX Acquisition HMX Acquisition Corp. and HMX Poland Sp. z o. o. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 12-14300 and 12-14301) on Oct 19, 2012. On Oct. 21, 2012, affiliates HMX, LLC, Quartet Real Estate, LLC, and HMX, DTC Co. also filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Cases Nos. 12-14327 to 12-14329). Judge Allan L. Gropper presides over the cases. The Debtors are seeking to have their cases jointly administered for procedural purposes under Case No. 12-14300, which is the case number assigned to HMX Acquisition Corp. The Debtors' principal place of business is located at 125 Park Avenue, in New York. The Debtors are leading American designers, manufacturers, licensors, and licensees of men's and women's business and leisure apparel focused primarily on the luxury, bridge, and better price points. The Debtors are 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. As of Oct. 12, 2012, the Debtors had consolidated assets of $153.6 million and total liabilities of $119.5 million. Jared D. Zajac, Esq., at Proskauer Rose LLP, in New York; and Mark K. Thomas, Esq., and Peter J. Young, Esq., in Proskauer Rose LLP, in Chicago, represent the Debtors as counsel. The Debtors' investment banker is William Blair & Company, L.L.C. CDG Group, LLC, is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC is the Debtors' claims agent. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. HMX ACQUISITION: Hearing Tomorrow on Cash Collateral ---------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York will convene a hearing on Nov. 16, 2012, at 10:00 a.m., to consider final approval to HMX Acquisition Corp., et al.'s request to obtain secured postpetition financing and use cash collateral. The bankruptcy court will also consider tomorrow approval of the Debtors' request to pay claims of critical vendors. The Court earlier entered an order authorizing the Debtors to pay certain prepetition claims of critical vendors in an aggregate amount not to exceed $500,000. At the hearing, the Court will also consider landlord Destiny USA Holdings, LLC's limited objection to the Debtors' motion for access to cash collateral. The landlord leases nonresidential real property to the Debtors at Destiny USA, Syracuse, New York. The property is located within a shopping center. According to the landlord, the Debtors' certain requests in the motion, among other things: -- violate the landlord's rights, and the landlord's need to review the terms of any final order and object if necessary; and -- are unclear as to whether the Debtors seek to grant liens against its leaseholds. Additionally, the interim order, which grants the Debtors access to cash until Nov. 16, 2012, provides that the Debtors, the DIP Agent, and the DIP Lenders may amend any provision of the DIP Loan Agreement without further order of the Court so long as the amendment is not material, which means an amendment to: either raise interest rates, add new events of default or default remedies, or modify the DIP Loan Agreement in a way that makes it materially less favorable for the parties. Finally, the Debtors failed to pay postpetition stub rent of $1,871 for October 2012. The Debtors must be directed to forthwith pay the rent. About HMX Acquisition HMX Acquisition Corp. and HMX Poland Sp. z o. o. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 12-14300 and 12-14301) on Oct 19, 2012. On Oct. 21, 2012, affiliates HMX, LLC, Quartet Real Estate, LLC, and HMX, DTC Co. also filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Cases Nos. 12-14327 to 12-14329). Judge Allan L. Gropper presides over the cases. The Debtors are seeking to have their cases jointly administered for procedural purposes under Case No. 12-14300, which is the case number assigned to HMX Acquisition Corp. The Debtors' principal place of business is located at 125 Park Avenue, in New York. The Debtors are leading American designers, manufacturers, licensors, and licensees of men's and women's business and leisure apparel focused primarily on the luxury, bridge, and better price points. The Debtors are 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. As of Oct. 12, 2012, the Debtors had consolidated assets of $153.6 million and total liabilities of $119.5 million. Jared D. Zajac, Esq., at Proskauer Rose LLP, in New York; and Mark K. Thomas, Esq., and Peter J. Young, Esq., in Proskauer Rose LLP, in Chicago, represent the Debtors as counsel. The Debtors' investment banker is William Blair & Company, L.L.C. CDG Group, LLC, is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC is the Debtors' claims agent. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. HOSTESS BRANDS: Strike Didn't Cause Closures, Says Union -------------------------------------------------------- In a desperate attempt to break the solidarity and resolve of striking BCTGM members across the country, Hostess Brands is falsely claiming that its decision to close three of its bakeries -- St. Louis, Cincinnati and Seattle -- is the result of the nationwide strike against the company by BCTGM members. In fact, according to the company's 1113 filing with the bankruptcy court earlier this year as well as its last/best/final and non-negotiable proposal to its BCTGM-represented workers, the company was planning to close at least nine bakeries as part of its reorganization plan, although the company refused to disclose which bakeries it intended to close. This is in addition to the three bakeries that were to be closed as a result of the company's planned sale of its Merita division. Moreover, St. Louis Mayor Francis Slay was quoted in a November 13 KMOX-CBS St. Louis article stating, "I was told months ago they were planning on closing the site in St. Louis... And there was no indication at that time it had anything to do with the strike the workers were waging." BCTGM International Union President Frank Hurt stated, "The recent claim by Hostess CEO Greg Rayburn that our strike is the reason for the closure of the three bakeries is simply not true. That statement is a continuation of a disturbing pattern by the company of issuing public statements that are erroneous at best and disingenuous at worst. "Our members rejected the company's outrageous proposal by 92 percent in September. Rejection came from every corner of the country. They were being asked to vote on a proposal with massive concessions, knowing that their plant could very well be one of those to be closed. "Our members are on strike because they have had enough. They are not willing to take draconian wage and benefit cuts on top of the significant concessions they made in 2004 and give up their pension so that the Wall Street vulture capitalists in control of this company can walk away with millions of dollars." Over the past eight years since the first Hostess bankruptcy, BCTGM members have watched as money from previous concessions that was supposed to go towards capital investment, product development, plant improvement and new equipment, was squandered in executive bonuses, payouts to Wall Street investors and payments to high-priced attorneys and consultants. BCTGM members are well aware that as the company was preparing to file for bankruptcy earlier this year, the then CEO of Hostess was awarded a 300 percent raise (from approximately $750,000 to $2,550,000) and at least nine other top executives of the company received massive pay raises. One such executive received a pay increase from $500,000 to $900,000 and another received one taking his salary from $375,000 to $656,256. Over the past 15 months, Hostess workers have seen the company unilaterally end contractually-obligated payments to their pension plan. Despite saving more than $160 million with this action, the company continues to fall deeper and deeper into debt. A mountain of debt and gross mismanagement by a string of failed CEO's with no true experience in the wholesale baking business have left this company unable to compete or survive. A total of 24 Hostess production facilities are on strike or honoring the strike with picket lines established by striking Hostess workers at other BCTGM-represented facilities. Additionally, BCTGM members at one transport facility also are on strike. Company claims that union members are crossing picket lines and maintaining production at striking plants are vastly untrue. The BCTGM represents more than 80,000 workers in the baking, food processing, grain milling and tobacco industries in the United States and Canada. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Debtor-affiliates that filed separate Chapter 11 petition are IBC Sales Corporation, IBC Trucking LLC, IBC Services LLC, Interstate Brands Corporation, and MCF Legacy Inc. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of Dec. 10, 2011. Debt includes $860 million on four loan agreements. Trade suppliers are owed as much as $60 million. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). Ripplewood Holding LLC, after providing $130 million to finance the plan, obtained control of IBC's business following the prior reorganization. Hostess Brands is privately held. The new owners pursued new Chapter 11 cases to escape from what they called "uncompetitive and unsustainable" union contracts, pension plans, and health benefit programs. In 2011, Hostess retained Houlihan Lokey to explore sales of its smaller assets and individual brands. Houlihan Lokey oversaw the sale of Mrs. Cubbison's to Sugar Foods Corporation for $12 million, but was unable to sell any of Hostess' core assets. Judge Robert D. Drain oversees the case. Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. An official committee of unsecured creditors has been appointed in the case. The committee selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. HRK HOLDINGS: Gets Final Nod to Obtain $125,000 DIP Financing ------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized, on a final order, HRK Holdings, LLC, and HRK Industries, LLC, to borrow on a secured basis from Arsenal Group, LLC the maximum amount of $125,000 with interest accruing at the rate of 9%. As adequate protection from any diminution in value of the lender's collateral, the Debtors will grant the DIP Lender replacement liens and a superpriority administrative expense claim status. About HRK Holdings Based in Palmetto, Florida, HRK Holdings LLC owns roughly 675 contiguous acres of real property in Manatee County, Florida. Roughly 350 acres of the property accommodates a phosphogypsum stack system, called Gypstaks, a portion of which was used as an alternate disposal area for the management of dredge materials pursuant to a contract with Port Manatee and as authorized under an administrative agreement with the Florida Department of Environmental Protection. The remaining acres of usable land are either leased to various tenants or available for sale. HRK Industries holds various contracts and leases associated with the Debtors' property. HRK Holdings and HRK Industries LLC filed for Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on June 27, 2012. Judge K. Rodney May oversees the case. Barbara A. Hart, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents the Debtors. HRK Holdings disclosed $33,366,529 in assets and $26,092,559 in liabilities in its revised schedules. According to the Debtors, the bankruptcy filing was necessitated by the immediate need to sell a portion of the remaining property to create liquidity for (a) funding the urgent management of the site-related environmental concerns; the benefit of creditors; funding a litigation filed by the Debtors; and funding of expenses related to additional sales of the remaining property. INTEGRATED HEALTHCARE: Reports $2.4MM Net Income in Fiscal Q2 ------------------------------------------------------------- Integrated Healthcare Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $2.35 million on $125.86 million of net patient service revenues for the three months ended Sept. 30, 2012, compared with net income of $590,000 on $86.58 million of net patient service revenues for the same period a year ago. The Company reported a net loss of $770,000 on $207.52 million of net patient service revenues for the six months ended Sept. 30, 2012, compared with a net loss of $2.14 million on $166.54 million of net patient service revenues for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $187.28 million in total assets, $200.71 million in total liabilities and a $13.43 million total stockholders' deficiency. "...[T]he stated maturity date of our $46.35 million term loan with Silver Point Finance, LLC and its affiliates SPCP Group IV, LLC and SPCP Group, LLC (collectively, "Silver Point") is April 13, 2013. If we are unable to refinance, restructure or extend our obligation to repay the principal amount by the maturity date, such failure would constitute a default under the credit agreement with Silver Point and our other loan facilities, which would permit Silver Point and our other lenders to seize our assets and those of our variable interest entity, PCHI. Any actions by Silver Point or our other lenders to enforce their rights by seizing our assets could force us into bankruptcy or liquidation, which would have a material adverse effect on our liquidity and financial position and the value of our common stock." A copy of the Form 10-Q is available for free at: http://is.gd/gEQx02 About Integrated Healthcare Headquartered in Santa Ana, Calif., Integrated Healthcare Holdings, Inc. (OTC BB: IHCH) -- http://www.ihhioc.com/ -- owns and operates four community-based hospitals located in southern California. JAS & ASSOCIATES: Court Wants Plan Outline Revised -------------------------------------------------- Bankruptcy Judge Thomas J. Tucker directed JAS & Associates, Inc., to submit a revised Chapter 11 plan and disclosure statement. The judge said he could not grant preliminary approval of the disclosure statement explaining the current plan because of problems that the Debtor must correct. The Debtor on Nov. 1 filed a "Second Amended Combined Plan and Disclosure Corrected 11/1/2012". According to the Court, the Debtor states, in relevant part, on page 26 of the Plan, that "New Value of $25,000 [will be] paid annually in installments of $2,500 beginning on February 15, 2013 and yearly on February 15, 2012[.]" Debtor must change "2012" to state the duration of the payments.1 Second, on page 22 of the Plan, "New Value" is defined, in relevant part, as "consideration received from the Shareholders post-confirmation in exchange for new stock issued to said shareholders post-petition." This indicates that "New Value" can only be provided by the current shareholders of the Debtor. But the treatment of Class 8 on page 26 of the Plan indicates that anyone who is the highest bidder at the auction can pay "New Value." In this way, the Plan is internally inconsistent. The Court required the Debtor to file a revised plan as well as a redlined version no later than Nov. 13. A copy of the Court's Nov. 7, 2012 Order available at http://is.gd/C0Abqefrom Leagle.com. JAS & Associates, Inc., dba Century Small Business Accounting, filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 12-46922) on March 20, 2012, listing under $1 million in both assets and debts. A copy of the petition and list of creditors is available at http://bankrupt.com/misc/mieb12-46922p.pdfand http://bankrupt.com/misc/mieb12-46922c.pdf Donald C. Darnell, Esq., serves as the Debtor's counsel. JC PENNEY: Dismal 3rd Qtr. Performance Cues Fitch to Lower Ratings ------------------------------------------------------------------ Fitch Ratings has downgraded its Issuer Default Ratings (IDRs) on J.C. Penney Co., Inc. and J.C. Penney Corporation, Inc. to 'B' from 'BB-'. The Rating Outlook is Negative. The rating downgrades reflect dismal third quarter performance, where sales declines continued to accelerate, and Fitch's concern that top line will likely get worse during the critical holiday season when promotional events tend to pick up to drive traffic. For 2013, there is a lack of visibility in terms of the company's ability to stabilize its core business, which currently accounts for 90% of its footprint. It remains unclear whether the new shops and merchandise offering can offset any continued declines in the existing business in second half 2013. J.C. Penney continues to struggle in terms of moving toward a more everyday value strategy with significantly reduced promotions. The recent revisions around the promotional stance and messaging further pressured volume and comps declined 26.1% in the third quarter versus an average of 20% in the first half of the year. Gross margins declined approximately 500 basis points to a record low of 32.5%. Fitch expects gross margin could be in the mid-20% range for the fourth quarter on comp decline of 25%-30% given heightened clearance markdowns. As a result, Fitch expects 2012 adjusted EBITDA could turn negative in the $100-$200 million range, a steep drop from $1.3 billion in 2011. (These figures exclude non-cash pension expense, stock-based compensation and restructuring charges). The jury remains out on whether J.C. Penney has done some irrevocable damage or whether it can begin to turn around faltering sales and sustainably improve the profitability of its business beginning the first quarter of 2013. Stabilization in sales would be incumbent upon 'rebasing' its revenue base and the company's new merchandise and upgraded stores, along with its pricing strategy, would have to resonate with both its core and new customers to gain top line traction. Fitch expects that sales trends could remain in the negative low single digit range in 2013 and gross margin in the mid-30s percent range (still below the normalized 39-40% range the company should realize if inventory is appropriately aligned to sales expectations). This would result in EBITDA of $250-$300 million range next year. Sales declines in the mid-single digits range with gross margin in the mid-30s percent range could result in negative EBITDA. However, stabilization in sales trends and gross margin in the 39-40% range could see EBITDA improve to the $850 million to $950 million. First quarter 2013 results will provide a first glimpse at where underlying sales start leveling off. Liquidity is expected to remain adequate to fund its investments (including an undrawn $1.5 billion credit facility) and Fitch assumes working capital to be cash neutral for the year. As expected, J.C. Penney did not need to draw on its credit facility to fund working capital this year and Fitch expects year-end cash balance to be $800 million to $1 billion with a free cash flow drain (before any asset sales) in excess of $1 billion. The company's cost savings, the dividend cut, and the monetization of non-core assets have provided support the company's liquidity position. Free cash flow is expected to remain materially negative in 2013 and 2014 and based on current projected EBITDA levels, Fitch expects the company will have to start drawing down on its revolver to fund annual capital expenditures of $800 million and peak seasonal working capital needs. The company has no debt maturities prior to October 2015 (and maturities between 2015 and 2018 are $200 million - $300 million annually), but it could explore various financing options to shore up liquidity and fund its investments in the new shops. J.C. Penney's pension fund remains well funded, and Fitch does not expect the company will need to make any cash contributions in 2012 and 2013. For issuers with IDRs at 'B+' and below, Fitch performs a recovery analysis for each class of obligations of the issuer. The issue ratings are derived from the IDR and the relevant Recovery Rating and notching, based on Fitch's recovery analysis that places a liquidation value under a distressed scenario of approximately $5.0 billion as of Oct. 27, 2012 for J.C. Penney. J.C. Penney's senior secured credit facility that matures in April 2016 is rated 'BB/RR1', indicating outstanding recovery prospects (91%-100%) in a distressed scenario. The facility is secured by inventory and receivables with borrowings subject to a borrowing base. The company is subject to a springing covenant of maintaining a fixed charge coverage of 1.0x-1.1x if availability falls below a certain threshold or the company undertakes certain actions such as making restricted payments. The $2.9 billion senior unsecured notes and debentures are rated 'BB-/RR2', indicating superior recovery prospects (71%-90%). The ratings on the notes could be notched lower if additional secured debt is issued or the collateral value is reduced (for example, if the company continues to cut back on inventory on sales declines and/or shorter lead times). What Would Trigger A Rating Action? A negative rating action could occur on one of the following: (1) worse than expected fourth quarter results or (2) if comps are in the negative mid-single digit range or worse next year, which would result in further liquidity drain. A Positive Rating action would occur if top line starts to stabilize and the company realizes more normalized gross margin levels. Fitch has downgraded the ratings on J.C. Penney as follows: J.C. Penney Co., Inc. -- IDR to 'B' from 'BB-'. J.C. Penney Corporation, Inc. -- IDR to 'B' from 'BB-'; -- $1.5 billion senior secured bank credit facility to 'BB/RR1' from 'BB+'; Fitch has also affirmed J.C. Penney Corporation, Inc.'s $2.9 billion senior unsecured notes and debentures at 'BB-' and assigned a Recovery Rating of 'RR2'. The Rating Outlook is Negative. JDV PROPERTIES: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: JDV Properties LLC. 6138 Franklin Ave Unit 237 Los Angeles, CA 90028 Bankruptcy Case No.: 12-47455 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Sandra R. Klein Debtor's Counsel: Robert M. Yaspan, Esq. LAW OFFICES OF ROBERT M YASPAN 21700 Oxnard St., Ste 1750 Woodland Hills, CA 91367 Tel: (818) 905-7711 Fax: (818) 501-7711 E-mail: court@yaspanlaw.com Scheduled Assets: $1,091,500 Scheduled Liabilities: $2,392,805 A copy of the Company's list of its 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb12-47455.pdf The petition was signed by Dorian Villasenor, managing member. KLITZMAN-CURRELL: Case Summary & 7 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Klitzman-Currell Centre LLC 4755 Hayes Ave. #58 Plover, WI 54467 Bankruptcy Case No.: 12-16144 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Western District of Wisconsin (Eau Claire) Judge: Thomas S. Utschig Debtor's Counsel: Rebecca R. DeMarb, Esq. KERKMAN & DUNN 121 S. Pinckney Street, Suite 525 Madison, WI 53703 Tel: (608) 620-7606 E-mail: rdemarb@kerkmandunn.com Estimated Assets: $50,001 to $100,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the list of seven unsecured creditors is available for free at http://bankrupt.com/misc/wiwb12-16144.pdf The petition was signed by Darlene Klitzman, member. JOHN SAMMUT: Court Won't Revise Order Denying Ch.11 Conversion -------------------------------------------------------------- Bankruptcy Judge Thomas J. Tucker declined the request of John Sammut for reconsideration of the Court's prior order denying his moton to convert his Chapter 7 case (Bankr. E.D. Mich. Case No. 12-41706) to one under Chapter 11 of the Bankruptcy Code. A copy of the Court's Nov. 5, 2012 Order is available at http://is.gd/KfWaurfrom Leagle.com. KNOTTY PINE: In Receivership, Sells Pub & Grill ----------------------------------------------- Dan Eaton at Columbus Business First reports that Knotty Pine Pub & Grill at 1765 W. Third Ave. in Columbus, Ohio, is in receivership and under the control of receivers Gryphon Asset Management and its principals Richard and Melissa Kruse, who took over operations Oct. 24. Documents filed in Franklin County Common Pleas Court revealed that the owners James Savage and Roger Essig had defaulted on a $456,726 loan to WesBanco Bank Inc., according to the report. The report notes that Mr. Savage remains involved with the business, but Gryphon has brought in Jason Norton as interim general manager to assist in running the restaurant. LAKE COOK: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Lake Cook Court, LLC 440 Central Avenue Highland Park, IL 60035 Bankruptcy Case No.: 12-44375 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Donald R. Cassling Debtor's Counsel: Michael L. Cummings, Esq. EMALFARB, SWAN & BAIN 440 Central Avenue Highland Park, IL 60035 Tel: 1-847-432-6900 E-mail: michael@esb-law.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Hal Emalfarb, manager. LATITUDE SOLUTIONS: Files Chapter 7 Petition -------------------------------------------- BankruptcyData.com reports that Latitude Solutions filed for Chapter 7 protection (Bankr. N.D. Tex. Case No. 12-46295) in Ft. Worth, Texas. The Company is represented by Elizabeth M. Guffy of Burleson. BankruptcyData.com, citing documents filed with the SEC, says the Court will name a receiver, trustee, fiscal agent or similar officer, and the Company's assets will be liquidated in accordance with federal bankruptcy code. Concurrent with the Chapter 7 filing, the Company terminated the employment of J.W. Rhea, IV, C.E.O., and Ken M. Link, secretary and treasurer. Following the first meeting of creditors, the employment of James B. Smith, Latitude Solutions' chief financial officer, will terminate and the Company will no longer have any employees. Latitude Solutions owns intellectual property involved with the manufacture of water remediation plants. LEE ENTERPRISES: Posts $7.7 Million Net Loss in Fiscal 4th Qtr -------------------------------------------------------------- The Associated Press reports Lee Enterprises Inc. said Nov. 12, 2012, that it lost $7.7 million, or 15 cents per share, in its fiscal fourth quarter, compared with a net loss of $8.8 million, or 20 cents per share, a year ago. AP reports that, excluding one-time items, the company lost $334,000, or 1 cent per share, in the July through September period. That compared with income of $8.9 million, or 20 cents per share, a year ago. This year's results were hurt by higher interest costs. According to AP, revenue grew 3% to $180.3 million from $175.8 million. Advertising revenue grew nearly 1% to $124.7 million from $123.7 million. Circulation revenue increased 3% to $45.2 million from $43.7 million. Lee said that an extra week in this year's quarter helped its results. Excluding the additional week, revenue would have declined by about 4.5%, the company said. AP adds Lee's stock closed down 7 cents, or 4.2%, to $1.58 on Monday and was unchanged in after-hours trading. The stock has traded between 49 cents and $1.81 in the past 52 weeks. The bankruptcy process allowed the Company to restructure its roughly $1 billion of debt. In October, the Company said it had reduced its debt to $930.6 million. About Lee Enterprises Lee Enterprises, Incorporated, headquartered in Davenport, Iowa, publishes the St. Louis Post Dispatch and the Arizona Daily Star along with more than 40 other daily newspapers and about 300 weekly newspapers and specialty publications in 23 states. Revenue for the 12 months ended December 2010 was $780 million. The Company has 6,200 employees, with 4,650 working full-time. Lee Enterprises and certain of its affiliates filed for Chapter 11 (Bankr. D. Del. Lead Case No. 11-13918) on Dec. 12, 2011, with a prepackaged plan of reorganization. The Debtor selected Sidley Austin LLP as its general reorganization and bankruptcy counsel, and Young Conaway Stargatt & Taylor LLP as co-counsel; The Blackstone Group as Financial and Asset Management Consultant; and The Debtor disclosed total assets of $1.15 billion and total liabilities of $1.25 billion at Sept. 25, 2011. Deutsche Bank Trust Company Americas, as DIP Agent and Prepetition Agent, is represented in the Debtors' cases by Sandeep "Sandy" Qusba, Esq., and Terry Sanders, Esq., at Simpson Thacher & Bartlett LLP. Certain Holders of Prepetition Credit Agreement Claims, Goldman Sachs Lending Partners LLC, Mutual Quest Fund, Monarch Master Funding Ltd, Mudrick Distressed Opportunity Fund Global, LP and Blackwell Partners, LLC have committed to acquire up to a maximum amount of $166.25 million of loans under a New Second Lien Term Loan Facility pursuant to the Reorganization Plan. This commitment also includes the potential payment of up to $10 million as backstop cash to Reorganized Lee Enterprises to acquire the loans. The Initial Backstop Lenders are represented by Matthew S. Barr, Esq., and Brian Kinney, Esq., at Milbank, Tweed, Hadley & McCloy LLP. On Jan. 23, 2012, Lee Enterprises, et al., won confirmation of a second version of their prepackaged Chapter 11 reorganization plan. Lee Enterprises declared the prepackaged plan effective on Jan. 30. LEGACY RESERVES: S&P Assigns 'B' Corp. Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Midland, Texas-based Legacy Reserves LP. The outlook is stable. "We also assigned a 'B-' issue-level and a '5' recovery rating to Legacy's planned $300 million senior unsecured note offering due 2020. The '5' recovery rating indicates our expectations of modest (10% to 30%) recovery prospects in the event of a payment default. Legacy Reserves Finance Services Corp., a subsidiary of Legacy, will be a co-issuer of the notes. The company will use proceeds from the offering to fund a portion of its pending acquisition of oil and natural gas assets in the Permian Basin," S&P said. "The ratings on Midland-based oil and gas exploration and production company Legacy Reserves LP reflect our assessment of the company's 'vulnerable' business risk and 'highly leveraged' financial risk," said Standard & Poor's credit analyst Carin Dehne-Kiley. "The ratings incorporate the company's relatively small asset base and production, an aggressive growth strategy, and ongoing partnership distributions. These risks are somewhat mitigated by the company's relative weighting toward oil/natural gas liquids (liquids) production, decent hedge protection, track record of issuing equity to support acquisition activity, and 'adequate' liquidity." "The stable outlook reflects our view that Legacy will be able to fund its capital spending, dividends, and acquisitions in a manner that does not erode the company's credit protection measures. We would consider an upgrade if the company is able to sustain leverage below 3.5x and increase its proved reserve base to a level closer to 150 mmboe. We would consider a downgrade if the company were to pursue a sizable acquisition or shareholder distribution that resulted in leverage approaching 5x," S&P said. LEHMAN BROTHERS: Lawyers Disagree on Length of Briefs ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that James W. Giddens, the trustee for the brokerage of Lehman Brothers Inc., gave the U.S. Court of Appeals a 63-page brief in September arguing that notions of due process were violated because the parties changed material terms of the Lehman sale in 2008 without bankruptcy court approval. When Barclays sought permission from the appeals court to file a 115-page brief, almost twice as long, Mr. Giddens took umbrage and opposed the request. Mr. Giddens contends Barclays doesn't need an extra 40 pages, or 9,000 words, because the appeals court "is not the forum to attempt to retry the factual issues" covered in a 34-day trial. Barclays, whose brief is due on Dec. 20, says a more lengthy brief if necessary so the appellate judges will have "a full description of the arguments and record evidence." Mr. Rochelle notes it remains to be seen how many pages the appeals court judges are willing to read. When London-based Barclays sought permission for an additional 4,000 words, Mr. Giddens agreed to only 2,000. Barclays answered the rebuff by asking the appeals court for another 9,000 words beyond what the rules allow. According to the report, Mr. Giddens is attempting to overturn a ruling from June by U.S. District Judge Katherine B. Forrest, who concluded that the bankruptcy judge was wrong in requiring Barclays to pay $1.5 billion. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LON MORRIS COLLEGE: Assets to Be Sold in Dec. 13 Auction -------------------------------------------------------- Lon Morris College, the 168 year-old junior college in Jacksonville, Texas is seeking court approval for an auction on Dec. 13 at 11:00 a.m., with AmeriBid LLC conducting the auction for qualified bidders only at McKool Smith, PC, 300 Crescent Court, 12th floor, Dallas, Texas. Upon approval by the United States Bankruptcy Judge in Tyler, Texas, the core of the college's 112-acre campus will be auctioned, including such unique features as a library, chapel, administration building, classroom facilities, student center, dormitories and fields. "We're delighted to have the auction plans finalized. AmeriBid will be providing prospective bidders with detailed information About Lon Morris College Lon Morris College was founded in 1854 as a not-for-profit religiously affiliated two-year degree granting institution. Over the past 158 years, the College has impacted the lives of countless members of the local Jacksonville community in Texas. Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough endowments to pay teachers, vendors and creditors. In May 2012, the Debtor missed two payrolls and vendor payables, utilities, and long term debt were also past due. From a headcount of 1,070 in 2010, enrolments have been down to 547 in 2012. The president of the College has resigned, as have members of the board of trustees. Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's Dawn Ragan took over management of the College as chief restructuring officer. Attorneys at Webb and Associates, and McKool Smith P.C., serve as counsel to the Debtor. Capstone Partners serves as financial advisor. According to its books, on April 30, 2012, the College had roughly $35 million in assets, including $11 million in endowments and restricted funds, and $18 million in funded debt and $2 million in trade and other liabilities. The Debtor disclosed $29,957,488 in assets and $15,999,058 in liabilities as of the Chapter 11 filing. Amegy Bank is represented in the case by James Matthew Vaughn, Esq., at Porter Hedges LLP. M&M STONE: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: M&M Stone Co. 2840 W. Clymer Avenue Telford, PA 18969 Bankruptcy Case No.: 12-20469 Chapter 11 Petition Date: November 9, 2012 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Bruce I. Fox Debtor's Counsel: Gregory R. Noonan, Esq. WALFISH & NOONAN, LLC 528 DeKalb St Norristown, PA 19401 Tel: (610) 277-7899 E-mail: walfishnoonan@aol.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Brian L. Carpenter, president. The Debtor did not file its list of largest unsecured creditors when it filed its petition. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- Drum Construction Company, Inc. 11-14857 06/17/2011 MALLARDS HOLDINGS: Court Wants Plan Outline Revised --------------------------------------------------- Bankruptcy Judge Thomas J. Tucker declined to grant preliminary approval of the disclosure statement explaining the bankruptcy plan of Mallards Holdings Inc., and its debtor-affiliates, saying there are problems that the Debtors must correct. The Debtors filed their First Amended Debtors' Combined Disclosure Statement and Plan of Reorganization on Nov. 2, 2012. Judge Tucker said on page 9 of the Plan, in describing the treatment of Mallard Holdings Class 4, the Debtors state: "These claims shall be paid at 2% in 240 equal monthly installments without interest, commencing on the Effective Date." But the Debtors then state that "[m]onthly payments shall be $87.04 and shall be paid contemporaneously with Class 1 which is 60 days after confirmation of the Plan." The problem with this, Judge Tucker said, is that the "Effective Date," as defined in section 1.19 of the Plan on page 4, will not necessarily be the date that is 60 days after confirmation of the Plan. On page 12 of the Plan, in describing the treatment of Mallard Land Holdings Class 4, Debtors state: "These claims shall be paid at 2% in 240 equal monthly installments without interest, commencing on the Effective Date." But the Debtors then state that "[m]onthly payments shall be $72.65 and shall be paid contemporaneously with Class 1." Payments to Mallard Land Holdings Class 1 commence "sixty days from the date of confirmation of the Plan." The judge said the Debtors must correct these internal inconsistencies. On page 9 of the Plan, the Debtors state that Mallard Holdings Class 4 includes the "the unsecured and priority unsecured claims of the Internal Revenue Service of about $14,607.49." "[P]riority tax claims . . . are not supposed to be classified in a Chapter 11 plan for voting or other purposes," according to Judge Tucker, citing In re Northwest Timberline Enterprises, Inc., 348 B.R. 412, 422 (Bankr. N.D. Tex. 2006) (citing 11 U.S.C. Sections 1123(a)(1)). The priority unsecured claim of the Internal Revenue Service is already included in Group II. Therefore, the Debtors must delete the words "and priority unsecured" in this paragraph. In Section II.B of the Disclosure Statement on page 23 the Debtors state: "Patrice receives health insurance through Mallard Holdings, and a lease for a car used by the Brezners is also paid by Mallard Holdings." The Debtors must state the value of these fringe benefits. The Court required the Debtors to submit the Plan revision, as well as a redlined version, no later than Nov. 13, 2012. A copy of the Court's Nov. 8, 2012 Order is available at http://is.gd/HV9dwefrom Leagle.com. Mallards Holdings, Inc., filed for Chapter 11 bankruptcy (Bankr. E.D. Mich. Case No. 12-57144) on July 24, 2012, estimating under $1 million in assets and debts. A copy of the petition is available at http://bankrupt.com/misc/mieb12-57144.pdf The Debtor is represented by Robert N. Bassel, Esq. MBIA INC: Asks Bondholders to Shield Firm from Bankruptcy --------------------------------------------------------- American Bankruptcy Institute reports that MBIA Inc. is asking bondholders to shield it from being dragged into bankruptcy by the insurance company's unit that backed some of Wall Street's most toxic debt securities. MBIA Inc., together with its consolidated subsidiaries, operates the financial guarantee insurance businesses in the industry and is a provider of asset management advisory services. MERRIMACK PHARMACEUTICALS: FMR LLC Discloses 17% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, FMR LLC and Edward C. Johnson 3d disclosed on Nov. 9, 2012, that they beneficially own 15,935,258 shares of common stock of Merrimack Pharmaceuticals Inc. representing 17.003% of the shares outstanding. A copy of the filing is available for free at http://is.gd/KgNnUt About Merrimack Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a biopharmaceutical company discovering, developing and preparing to commercialize innovative medicines consisting of novel therapeutics paired with companion diagnostics. The Company's initial focus is in the field of oncology. The Company has five programs in clinical development. In it most advanced program, the Company is conducting a pivotal Phase 3 clinical trial. The Company's balance sheet at June 30, 2012, showed $138.70 million in total assets, $105.62 million in total liabilities, $343,000 in non-controlling interest and $32.74 million in total stockholders' equity. As reported in the TCR on April 9, 2012, PricewaterhouseCoopers LLP, in Boston, Massachusetts, expressed substantial doubt about Merrimack Pharmaceuticals' ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and has insufficient capital resources available as of Dec. 31, 2011, to fund planned operations through 2012. METALDYNE LLC: S&P Affirms 'B+' CCR on Proposed Refinancing ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Metaldyne LLC and maintained its stable outlook. "At the same time, we assigned a 'B+' issue-level rating and '4' recovery rating to the proposed $545 million senior secured term loan B and $75 million revolver. The '4' recovery rating indicates our expectation of average (30%-50%) recovery. All ratings are subject to review of final documentation," S&P said. The ratings reflect what Standard & Poor's considers to be Metaldyne's "weak" business risk profile and "aggressive" financial risk profile. "Our business risk assessment incorporates the multiple industry risks facing automotive suppliers, including volatile demand, high fixed costs, intense competition, and severe pricing pressures," said Standard & Poor's credit analyst Nishit Madlani. "These risks more than offset the favorable fact that Metaldyne's products are used mostly in vehicle powertrains and therefore have longer lives, are less commodity-like than many other automotive parts, and support the company's double-digit EBITDA margins. The financial risk assessment reflects our view that moderate free operating cash flow (FOCF) and, in the long term, possible future additional distributions to shareholders will likely limit significant debt reduction," S&P said. "Our financial risk profile assessment is based on Metaldyne's plans for refinancing existing debt following its announced acquisition by American Securities LLC (not rated). We estimate debt to EBITDA will be at about 3.8x at the end of 2012, including our adjustments to add to debt the net present value of operating leases, underfunded postretirement obligations, and accounts receivable sold. For the rating, we assume leverage to remain well under 4.5x in future years," S&P said. "We assume Metaldyne's financial policies will be aggressive, given the concentrated ownership by the new sponsor and our expectation that the company will generate some positive FOCF in 2012 and 2013. However, the level of cash generation is highly sensitive to vehicle production, which we believe will eventually turn volatile again. Our expectation for modest positive free cash flow generation partly reflects our assumptions regarding margins and also our assumption that capital spending would continue to exceed 30% of EBITDA," S&P said. "The company is a private-equity-owned automotive supplier created from certain assets during the bankruptcy restructuring of a predecessor company. In our view, the most significant variable in Metaldyne's credit profile in the near term remains the direction and pace of the auto industry recovery. Metaldyne's cost cutting in recent years and its focus on fewer, but relatively more attractive, product lines since bankruptcy have helped it benefit from the ongoing recovery in North American vehicle demand," S&P said. "Given its fair geographic diversity (North America and Europe were most of 2011 sales), we assume Metaldyne's revenue growth for the remainder of 2012 and 2013 will be determined by the pace of slowly rising auto production in North America and the depth of the slowdown in Europe. Sales in North America (roughly one-half of sales) are trending toward our expectation of 14.3 million unit sales in 2012. And while production improved about 20% during the first 10 months of 2012 (mostly on Japanese restocking), we believe the production growth rate will decline for the remainder of 2012 and 2013 but remain in the mid- to high-single digits. Our economists currently forecast U.S. GDP growing modestly in 2012 and 2013. We expect unemployment to remain high, at about 8% for both years. In Europe (more than 35% of revenues), our base-case outlook assumes light-vehicle production will decline by about 7% in 2012 and remain roughly flat in 2013," S&P said. Considering these economic assumptions and that customers' demands for price reductions will offset some improvement in raw material pass-through, S&P's forecast for Metaldyne's operating performance over the next two years incorporates: -- Sales growth in the low- to mid-single digits in 2012 and 2013, with several end markets growing slightly above S&P's GDP growth rate estimates in these years. -- Adjusted EBITDA margin, by S&P's assumptions, should remain about 100 basis points above 2011 levels, toward 15%, incorporating some benefits from cost-reduction efforts and improvement in raw-material recovery, which pricing pressure from customers and potential launch related costs will somewhat offset. -- Free cash flow to debt should remain between 5% and 8%, partly because of somewhat higher year-over-year capital expenditure requirements over the next two years to meet growth outside its North American and European end markets. "We consider Metaldyne's customer diversity, based on end markets, to be moderate: The Detroit-based automakers, along with Hyundai Motor Co. (BBB+/Stable/--) and the ZF Group (not rated), were just below one-half of 2011 sales. The company is midsized--we estimate just more than $1 billion in revenues in 2012--but we believe it is a leader in some product areas. Still, we view its markets as fairly fragmented because some competitors are in-house operations of larger companies or automakers, and others are smaller and more vulnerable. Metaldyne's current business is much less exposed to unrecovered increases in raw material costs than its predecessor, but not immune. This is a critical change, in our view, from Metaldyne's previously more extensive operations. The company does not have any significant pension or postretirement health care obligations, and it has manageable union representation. We believe the current owners purchased assets at prices that should support profitable operations and manageable capital spending," S&P said. "We believe competition in Metaldyne's main product lines is based on a combination of technology and cost, rather than system integration or synergies across the range of products. We also believe its current product portfolio could consistently generate EBITDA margins in the low- to mid-teens, somewhat higher compared with most similarly rated auto suppliers, particularly given prospects for some ongoing recovery in industry demand and the benefits of operating leverage," S&P said. "The stable rating outlook reflects our belief that Metaldyne would generate positive FOCF in the 12 months ahead with sustained EBITDA margins at above 2011 levels, given the somewhat favorable trend for vehicle production in North America, though ongoing weakness in Europe somewhat offsets it. We consider Ford's ability to maintain its market share to be a key factor in Metaldyne's performance, and we believe some further share gains from other key customers are possible," S&P said. "We could lower the rating if FOCF generation turns negative for consecutive quarters or if we believe that debt to EBITDA, including our adjustments, would approach 5x or higher. Though we view this as unlikely, debt to EBITDA could reach this threshold if, for example, Metaldyne's sales fall meaningfully (more than 20%) year over year in 2013 with a more than 250-basis-points decline in EBITDA margins," S&P said. "We consider an upgrade unlikely during the next year based on our current assessment of Metaldyne's business and financial risks and its concentrated ownership by financial sponsors, which we believe indicates that financial policies will remain aggressive," S&P said. MF GLOBAL: House Panel Says Corzine Decisions Led to Bankruptcy --------------------------------------------------------------- The House Subcommittee for Financial Services Oversight and Investigations on Nov. 14 issued a three-page statement indicating that decisions by Jon Corzine led to MF Global's bankruptcy and missing customer funds. According to the statement, decisions by Corzine to chart a radically different course for MF Global and try to turn the 230- year-old commodities broker into a full-service investment bank were the cause of the firm's bankruptcy and failure to protect customer funds, Republican members of a congressional subcommittee will report this week. The House Financial Services Subcommittee on Oversight and Investigations, chaired by Rep. Randy Neugebauer, will release the full results of its year-long staff investigation into the collapse of MF Global on Thursday. "Our investigation is essentially an autopsy of how MF Global came to its ultimate demise and what can be done to prevent similar customer losses in the future," said Chairman Neugebauer. Corzine, a former co-chairman of Goldman Sachs who later became a U.S. senator and governor of New Jersey, resigned from MF Global on November 4, 2011, almost 20 months after becoming the firm's Chairman and CEO. The brokerage had declared bankruptcy four days earlier and its collapse revealed a $1.6 billion shortfall in customer funds. "Choices made by Jon Corzine during his tenure as chairman and CEO sealed MF Global's fate," Chairman Neugebauer stated. "Farmers, ranchers and other customers may never get back over $1 billion of their money as a result of his decisions. Corzine dramatically changed MF Global's business model without fully understanding the risks associated with such a radical transformation." The Subcommittee's staff investigation of MF Global involved three hearings, more than 50 witness interviews, and the review of more than 243,000 documents obtained from MF Global, its former employees, federal regulators and other sources. "By expanding MF Global into new business lines without first returning its core commodities business to profitability, Corzine ensured that the company would face enormous resource demands and exposed it to new risks that it was ill-equipped to handle," the subcommittee report states. In order to generate the revenue needed to fund MF Global's transformation, Corzine invested heavily in the sovereign debt of struggling European countries. These investments, which carried enormous default and liquidity risks, were a "prime focus" of Corzine's attention and he failed to develop a corporate strategy for managing the risks, the subcommittee majority staff found. Authoritarian atmosphere Those risks were exacerbated by an authoritarian atmosphere Corzine created at the firm where "no one could challenge his decisions," the subcommittee report reveals. Corzine made significant changes to MF Global's senior management, including the hiring of Bradley Abelow, his former gubernatorial chief of staff, as the firm's chief operating officer. When MF Global's chief risk officer disagreed with Corzine about the size of the company's European bond portfolio, Corzine directed him to report to Abelow rather than to MF Global's board of directors. "This change effectively sidelined the most senior individual charged with monitoring the company's risks and deprived the board of an independent assessment of the risks that Corzine's trades posed to MF Global, its shareholders and its customers," the report declares. Corzine insulated trading activity from review process In addition, the subcommittee's report reveals that Corzine acted as MF Global's "de facto chief trader" and insulated his trading activities from the company's normal risk management review process. This enabled Corzine to quickly build the company's European bond portfolio "well in excess of prudent limits without effective resistance." Rather than hold the European bonds on MF Global's books, which could expose the company to earnings volatility, Corzine chose to use these bonds as collateral in repurchase-to-maturity (RTM) transactions. This permitted the company to book quick profits while keeping the transactions off its balance sheet. Failure to initially disclose extent of risks Since MF Global did not initially disclose the full extent of its European bond holdings, federal regulators and the investing public were not aware of all the risks facing the company. The belated disclosure in October 2011 of its extensive European RTM portfolio -- which amounted to 14 percent of MF Global's total assets -- combined with poor earnings news prompted credit rating agencies to downgrade the company's credit rating to junk status. The downgrade set off a "run on the bank" by MF Global's investors, customers and counterparties that created a liquidity crisis during what would turn out to be the company's final days. Because Corzine had failed to integrate systems and controls for managing the company's liquidity and protecting customer funds, the company could not fully assess and anticipate its liquidity needs during the crisis, nor could it coordinate its cash management, liquidity monitoring and regulatory compliance functions. Liquidity crisis prompts withdrawal of customer funds "As the company struggled to find additional liquidity," the subcommittee reports, "company employees identified excess company funds held in customer accounts. However, because they did not have an accurate accounting of the amount of customer funds the company held, they withdrew customer funds as well as company funds." The subcommittee notes that it will be up to prosecutors and regulators to determine whether MF Global or its employees violated laws or regulations when these withdrawals of customer funds were made. 'Dereliction of duty' "However, the responsibility for failing to maintain the systems and controls necessary to protect customer funds rests with Corzine," the report maintains. "This failure represents a dereliction of his duty as MF Global's chairman and CEO." In its report, the subcommittee recommends that Congress consider legislation to impose civil liability on the officers and directors of futures commission merchants (FCMs) like MF Global who sign financial statements or authorize transfers from customer segregated accounts. Such legislation could "restore investor confidence in the derivatives markets and ensure that an FCM does not misuse customer funds in the future," the Subcommittee report said. Other findings of investigation to be released In addition to its findings that Corzine's decisions led to MF Global's downfall, the Subcommittee report is expected to address regulatory agencies' failure to share critical information with each other about MF Global, failures by credit rating agencies to sufficiently review MF Global's public filings, and concerns about the New York Federal Reserve's decision to designate MF Global as a "primary dealer" despite the company's troubled financial situation. NATIONAL CINEMEDIA: Moody's Rates $375MM Bank Facilities 'Ba2' -------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to National CineMedia's (NCM) new $375 million senior secured bank credit facilities. NCM's corporate family rating and probability of default rating remain unchanged at Ba3. The company's senior secured notes continue to be rated Ba2 while senior unsecured notes remain B2. NCM's speculative grade liquidity rating remains unchanged at SGL-2 (good) and the outlook remains stable. The new senior secured credit facility, comprised of a $110 million revolving credit facility and a $265 million term loan B, replaces an existing facility comprised of the $225 million balance of a term loan B and a $105 million revolving credit facility. Proceeds from the new term loan will repay the existing term loan, fund swap breakage and other fees and expenses with a small residual that will reduce revolver outstandings. Since the transaction does not affect leverage (June 30, 2012 Moody's- adjusted Debt/EBITDA was 4.2x), it has no affect on ratings. With terms to maturity being extended, the transaction has positive implications. The following summarizes the rating action and National CineMedia's ratings: Issuer: National CineMedia, LLC Assignments: Senior Secured Bank Credit Facility, Assigned Ba2 (LGD3, 39%) Other: Corporate Family Rating, unchanged at Ba3 Probability of Default Rating, unchanged at Ba3 Speculative Grade Liquidity Rating, unchanged at SGL-2 Outlook, unchanged at Stable Senior Secured Regular Bond/Debenture, unchanged at Ba2 (LGD3, 39%) Senior Secured Bank Credit Facility, unchanged at Ba2 (LGD3, 39%); to be withdrawn in due course Senior Unsecured Regular Bond/Debenture, unchanged at B2 (LGD6, 90%) Ratings Rationale National CineMedia LLC's (NCM) Ba3 corporate family rating is based primarily on the company's stable and sustainable cash flow and leverage. June 30, 2012 Debt/EBITDA is 4.2x (inclusive of Moody's adjustments) and is expected to decline in 2013 and be in the 3.5x-to-low 4.0x range over the rating horizon. These positive attributes are offset by the company's mandate to distribute all free cash flow to its members and by the potential of results declining over time should ongoing secular pressures stress the financial profiles of its cinema exhibition partners. Rating Outlook The stable ratings outlook reflects expectations of relatively stable revenue and EBITDA growth and leverage that is from 3.5x to the low 4.0's. What Could Change the Rating - UP Should NCM maintain TD/EBITDA at less than 3.5x while committing to operate in such a range, positive ratings pressure could result. However, given the combination of NCM's mandate to distribute all of its free cash flow and the potential of a re- levering event, a ratings upgrade is not anticipated. What Could Change the Rating - DOWN Downwards rating pressure may occur if debt increased to fund a special dividend, or were the company to experience an operational set-back such that leverage was expected to be sustained above 4.25x. Adverse liquidity developments or debt-financed acquisition activity would also provide adverse ratings pressure. The principal methodology used in rating National CineMedia LLC was the Global Broadcast and Advertising Related Industry Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Corporate Profile National CineMedia LLC (NCM) is headquartered in Centennial, Colorado, and is a privately held joint venture operator of the largest digital in-theatre network in North America. National CineMedia, Inc. is NCM's publicly traded managing member (48.6% interest). NCM distributes advertisements and other content through its digital network, primarily through agreements with founding members, Regal Entertainment Group (holds a 19.7% ownership position in NCM), AMC Entertainment Inc. (holds an 15.5% ownership position), and Cinemark, Inc. (holds a 16.2% ownership position). NCM's mandate requires that it distribute all cash flow that is not required for operational purposes to its owners. NEW ENERGY: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: New Energy Corp. 3201 West Calvert Street South Bend, IN 46613 Bankruptcy Case No.: 12-33866 Chapter 11 Petition Date: November 9, 2012 Court: United States Bankruptcy Court Northern District of Indiana (South Bend Division) Judge: Harry C. Dees, Jr. Debtor's Counsel: Jeffrey J. Graham, Esq. TAFT STETTINIUS & HOLLISTER LLP One Indiana Square, Suite 3500 Indianapolis, IN 46204 Tel: (317) 713-3500 Fax: (317) 713-3699 E-mail: jgraham@taftlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Russell L. Abarr, president and chief operating officer. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Nathan Kimpel Trade Debt $2,353,125 16062 SW 14th Ave Ocala, FL 34473 Randy Chrobot Trade Debt $1,882,500 22133 Sandybrook Dr South Bend, IN 46628 Michael Craig Trade Debt $941,250 54578 Old Bedford Trail Mishawaka, IN 46545 Ronald Jones Trade Debt $941,250 30903 Rocking Horse Lane Niles, MI 49120 Ronald Kuntz Trade Debt $751,850 14768 Clover Ridge Dr Granger, IN 46530 Indiana Michigan Power Trade Debt $603,040 P.O. Box 24401 Canton, OH 44701-4401 IDEM NPDES Trade Debt $287,528 100 North Senate Ave. Indianapolis, IN 46680-6015 Ronald Jones Trade Debt $193,750 Renewable Fuels Trade Debt $114,750 Association Ernst & Young LLP Trade Debt $84,999 Arisdyne Trade Debt $75,000 Conoco Phillips Trade Debt $50,540 Danco-Heath Oil Trade Debt $42,851 Eagle Services Corp. Trade Debt $38,544 KA Steel Chemicals Trade Debt $26,286 Alexander Chemical Trade Debt $25,821 Corporation Interactive Health Trade Debt $23,850 solutions Dion Chemical Corp. Trade Debt $20,026 Orion Group Trade Debt $19,387 Andersons, The-urea Trade Debt $18,467 NEW PEOPLES: Incurs $1.5 Million Net Loss in Third Quarter ---------------------------------------------------------- New Peoples Bankshares, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.46 million on $8.26 million of total interest and dividend income for the three months ended Sept. 30, 2012, compared with a net loss of $1.83 million on $10.09 million of total interest and dividend income for the same period during the prior year. The Company reported a net loss of $6.53 million on $25.65 million of total interest and dividend income for the nine months ended Sept. 30, 2012, compared with a net loss of $2.95 million on $31.71 million of total interest and dividend income for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $708.21 million in total assets, $680.10 million in total liabilities and $28.11 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/EP1BBe About New Peoples Bankshares New Peoples Bankshares, Inc., is a Virginia bank holding company headquartered in Honaker, Virginia. New Peoples subsidiaries include: New Peoples Bank, Inc., a Virginia banking corporation (the Bank) and NPB Web Services, Inc., a web design and hosting company (NPB Web). The Bank is headquartered in Honaker, Virginia and operates 27 full service offices in the southwestern Virginia counties of Russell, Scott, Washington, Tazewell, Buchanan, Dickenson, Wise, Lee, Smyth, and Bland; Mercer County in southern West Virginia and the eastern Tennessee counties of Sullivan and Washington. According to the Company's quarterly report for the period ended June 30, 2012, the Company and the Bank are subject to various capital requirements administered by federal banking agencies. "The Bank was well capitalized as of June 30, 2012, as defined by the capital guidelines of bank regulations, however, the Company continued to be below the minimum capital requirements as a result of the Tier 1 leverage ratio decreasing to 3.72%, which was below the minimum requirement of 4.00%. Subject to the conversion of the director notes, we expect to return to well-capitalized status at the holding company level in 2012. The Company's capital as a percentage of total assets was 3.27% at June 30, 2012, compared to 3.70% at Dec. 31, 2011." NEWPAGE CORP: Defends Settlement With Cerberus ---------------------------------------------- Peg Brickley at Daily Bankruptcy Review reports that NewPage Corp. says a proposed $1.5 million settlement with Cerberus Capital Management LP should be approved because creditors have failed to make a case against Cerberus for insider trading, overcharging or other alleged wrongs. The Disclosure Statement for NewPage's Fourth Amended Chapter 11 Plan has been approved by the U.S. Bankruptcy Court for the District of Delaware. The Court's approval of the Disclosure Statement allows the Company to begin the Plan voting process, leading to a confirmation hearing scheduled for mid-December and the Company's expected emergence from bankruptcy before the end of the year. The Company also was authorized to enter into a commitment letter and related fee letters for its exit financing, consisting of a $500 million term loan facility led by Goldman Sachs Lending Partners LLC and a $350 million revolving credit facility led by J.P. Morgan Securities LLC. About NewPage Corp Headquartered in Miamisburg, Ohio, NewPage Corporation was the leading producer of printing and specialty papers in North America, based on production capacity, with $3.6 billion in net sales for the year ended Dec. 31, 2010. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota, Wisconsin and Nova Scotia, Canada. NewPage Group, NewPage Holding, NewPage, and certain of their U.S. subsidiaries commenced Chapter 11 voluntary cases (Bankr. D. Del. Case Nos. 11-12804 through 11-12817) on Sept. 7, 2011. Its subsidiary, Consolidated Water Power Company, is not a part of the Chapter 11 proceedings. Separately, on Sept. 6, 2011, its Canadian subsidiary, NewPage Port Hawkesbury Corp., brought a motion before the Supreme Court of Nova Scotia to commence proceedings to seek creditor protection under the Companies' Creditors Arrangement Act of Canada. NPPH is under the jurisdiction of the Canadian court and the court- appointed Monitor, Ernst & Young in the CCAA Proceedings. Initial orders were issued by the Supreme Court of Nova Scotia on Sept. 9, 2011 commencing the CCAA Proceedings and approving a settlement and transition agreement transferring certain current assets to NewPage against a settlement payment of $25 million and in exchange for being relieved of all liability associated with NPPH. On Sept. 16, 2011, production ceased at NPPH. NewPage originally engaged Dewey & LeBoeuf LLP as general bankruptcy counsel. In May 2012, Dewey dissolved and commenced its own Chapter 11 case. Dewey's restructuring group led by Martin J. Bienenstock, Esq., Judy G.Z. Liu, Esq., and Philip M. Abelson, Esq., moved to Proskauer Rose LLP. In June, NewPage sought to hire Proskauer as replacement counsel. NewPage is also represented by Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, as co-counsel. Lazard Freres & Co. LLC is the investment banker, and FTI Consulting Inc. is the financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. In its balance sheet, NewPage disclosed $3.4 billion in assets and $4.2 billion in total liabilities as of June 30, 2011. The Official Committee of Unsecured Creditors selected Paul Hastings LLP as its bankruptcy counsel and Young Conaway Stargatt & Taylor, LLP to act as its Delaware and conflicts counsel. An affiliate, Newpage Wisconsin System Inc., disclosed $509,180,203 in liabilities in its schedules. NORTHERN TOOL: Moody's Assigns 'Ba3' CFR/PDR; Outlook Stable ------------------------------------------------------------ Moody's Investors Service assigned Ba3 Corporate Family and Probability of Default Ratings to Northern Tool & Equipment Company, Inc. and a Ba3 rating to its proposed $200 million senior secured term loan. The rating outlook is stable. On November 8, 2012 Northern Tool announced that it has agreed to acquire The Sportsman's Guide and The Golf Warehouse (together the "Targets") from Redcats USA, a division of French company PPR S.A. (not rated by Moody's), for $215 million. The transaction will be funded with proceeds from the proposed term loan as well as drawings under the company's proposed $100 million ABL revolving credit facility (not rated by Moody's). The ratings are subject to completion of the transaction and review of final documentation. This is a first time rating for Northern Tool. The following ratings were assigned to Northern Tool: -- Corporate Family Rating at Ba3; -- Probability-of-Default Rating at Ba3; -- $200 million Senior Secured Term Loan due 2019 at Ba3 (LGD 4, 53%). RATINGS RATIONALE Northern Tool's Ba3 rating reflects the company's moderate leverage associated with the acquisition of the Targets, with pro forma lease adjusted debt/EBITDA estimated to be about 4.2 times, as well as the risks associated with the relatively large, transformative transaction which increases revenue by over 50% to about $1.3 billion. The rating also reflects the company's small scale and narrow product offering relative to other global rated retailers, but acknowledges the benefits of the transaction, including the broadening of Northern Tool's product and brand portfolio and customer reach, as well as increasing its already credible share of the online retail market. Given the similar operating platforms and customer demographics, the transaction is likely to bring significant synergistic revenue and cost savings opportunities over time as the company leverages its scale. The rating also reflects the expectation for good liquidity. The stable outlook assumes that the company will successfully integrate the Targets and solidify its position in the rating through profitable growth and utilizing free cash flow to reduce debt. A ratings upgrade is unlikely over the near term due to the size of the acquisition and associated execution and integration risks. Over time, ratings could be upgraded if the company successfully integrates the Targets, demonstrates profitable growth and sustainably reduces debt to EBITDA below 3.5 times while maintaining good liquidity. Ratings could be downgraded if operating performance deteriorates, either through weak industry conditions or difficulty integrating the acquisition. Specific metrics include leverage rising above 4.5 times or interest coverage falling below 3.0 times. The principal methodology used in rating Northern Tool was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Burnsville, MN, Northern Tool & Equipment Company, Inc. is a retailer of consumer goods and construction equipment, selling nationally through its direct to consumer catalogs, e-commerce websites and network of 79 retail stores located in the Midwest and Southeastern United States. The Sportsman's Guide, headquartered in St. Paul, MN, is a retailer of value-priced outdoor equipment, clothing and footwear, selling through the online and catalog channels. The Golf Warehouse is a Wichita, KS based retailer of sports equipment, footwear, apparel and accessories, selling primarily through its e-commerce websites. Pro forma for the acquisition of The Sportsman's Guide and The Golf Warehouse, annual revenue is estimated to exceed $1.3 billion. NORTHERN TOOL: S&P Gives 'B+' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Minnesota-based Northern Tool & Equipment Co. Inc. S&P is also assigning a 'B+' corporate credit rating to Northern Tool & Equipment Catalog Co. Inc. The outlook is stable. In addition, S&P is assigning a 'B+' (the same level as the corporate credit rating) issue-level rating to the company's proposed $200 million seven-year term loan. The recovery rating is '3' indicating S&P's expectation of meaningful (50% to 70%) recovery in the event of a payment default. S&P is not rating the revolver. "The ratings reflect what we consider to be Northern Tool's 'aggressive' financial risk profile, which incorporates substantial debt leverage following the proposed debt-funded acquisition, but good cash flow coverage ratios, and minimal near- term debt maturities that provides financial flexibility, Said Standard & Poor's credit analyst Andy Sookram. "In our view, its business risk profile is 'weak,' an assessment that factors in its small size in the highly competitive and fragmented home improvement and sporting goods retailing industries and its vulnerability to price competition." "Pro forma for the transaction, leverage is nearly 4x and funds from operations (FFO) to debt is 18%, compared with 2.1x and 44% on July 31, 2012. In addition, EBITDA margins are about 7%, representing an increase from 6.3% previously, which results from the inclusion of the higher-margin Sportsman's Guide operations. Northern Tools indicated that its three businesses will operate on a stand-alone basis with the likelihood for cross-selling opportunities as they share a similar customer base, which is predominantly middle-aged males. We think the company should obtain modest cost savings in the near term, primarily from overhead consolidation," S&P said. "The stable outlook reflects our view that Northern Tool will benefit from modest sales and profit growth in the next year. We think the company will generate cash flow to fund its core requirements and tax-related distributions, and will use excess cash flows to partly reduce debt. Specifically, we anticipate leverage declining to the mid-3x area and FFO to debt increasing to about 20%," S&P said. "We could consider a higher rating if Northern Tool's business fundamentals improve above our expectations, for example, higher demand for tools and equipment and expansion of its private label offerings, or if it can leverage its common customer base across all three businesses to garner meaningful sales growth. If these trends were to occur, we could see EBITDA margins expanding to the mid-8% area and leverage declining to about 3x. We would also need to see FFO improving to about 25% and be comfortable that financial policy decisions will not impair credit protection measures," S&P said. "Alternatively, we could consider a downgrade if increasing competition in its core businesses hurts Northern Tool's operating performance, or if merchandising issues lead to significant inventory markdowns. Under such scenario, we could see a 200- basis-point contraction of EBITDA margin and an increase in leverage to nearly 5x. Additional factors that could trigger a downgrade include large debt-funded dividends or acquisitions," S&P said. NORTHWEST PARTNERS: Trustee to Disburse Revenue Fund to Fannie Mae ------------------------------------------------------------------ The Hon. Bruce T. Beeseley of the U.S. Bankruptcy Court for the District of Nevada signed a stipulation terminating the automatic stay in the Chapter 11 case of Northwest Partners doing business as Austin Crest Apts, a Nevada Limited Partnership, and permitting Federal National Mortgage Association (Fannie Mae) to apply the revenue fund to the account balance. The Debtor stated that it has no objection to Fannie Mae's motion and agrees that Zions First National bank (the trustee) may immediately disburse to Fannie Mae all amounts held in the revenue fund. The stipulation provides that, among other things: -- the motion to terminate automatic stay is granted; and -- trustee may disburse all amounts currently held in the revenue fund to Fannie Mae. About Northwest Partners Northwest Partners owns the 268-unit Austin Crest Apartment in Northwest Reno, Nevada. It filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 11-53528) on Nov. 17, 2011. Judge Bruce T. Beesley oversees the case. The Debtor scheduled $13,513,361 in assets and $14,135,158 in liabilities. The petition was signed by Robert F. Nielsen, president of IDN I, the Debtor's general partner. Alan R. Smith, Esq., at the Law Offices of Alan R. Smith, in Reno, Nev., represents the Debtor as counsel. Attorneys at Snell & Wilmer L.L.P., in Las Vegas, Nev., represent Fannie Mae as counsel. OMEGA NAVIGATION: Nordbank Wants Case Converted to Chapter 7 ------------------------------------------------------------ BankruptcyData.com reports that HSH Nordbank AG filed with the U.S. Bankruptcy Court a second motion to convert the Omega Navigation Enterprises Chapter 11 reorganization proceeding to a liquidation under Chapter 7. Nordbank insists, "Now, over fifteen months into these bankruptcy cases, the continued deterioration of the shipping market has rendered reorganization impossible. The Senior Lenders' interest in the eight ships mortgaged to them as collateral for a $242 million loan and the cash generated from the Ships - the Senior Lenders' collateral - is not adequately protected." Nordbank also filed a motion seeking the appointment of a Chapter 11 trustee to the case. The Court scheduled a Dec. 13, 2012 hearing on the issue. About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston, Texas in the United States. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. HSH Nordbank AG, as the senior lenders' agent, has first liens on vessels to secure a US$242.7 million loan. The lenders include Bank of Scotland and Dresdner Bank AG. The ships are encumbered with US$36.2 million in second mortgages with NIBC Bank NV as agent. Before bankruptcy, Omega sued the senior bank lenders in Greece contending they violated an agreement to grant a three year extension on a loan that otherwise matured in April 2011. An affiliate of Omega that manages the vessels didn't file, nor did affiliates with partial ownership interests in other vessels. Judge Karen K. Brown presides over the case. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor and investment banker. The Official Committee of Unsecured Creditors has tapped Winston & Strawn as local counsel; Jager Smith as lead counsel; and First International as financial advisor. OVERSEAS SHIPHOLDING: Seeks Bankruptcy Protection From Creditors ---------------------------------------------------------------- Overseas Shipholding Group, Inc., and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12- 20000) on Nov. 14. Overseas Shipholding, owner or operator of 111 vessels that transport oil and petroleum products throughout the world, said in a statement that it intends to use the Chapter 11 process to significantly reduce its debt profile, reorganize other financial obligations and create a strong financial foundation for the Company's future. The Debtors disclosed $4.15 billion in assets and $2.67 billion in liabilities as of June 30, 2012. Captain Robert E. Johnston, senior vice president and head of the U.S. Flag Strategic Business Unit of the Debtors, explains in a court filing, "Two main factors have led the Debtors to commence these Chapter 11 cases: First, over the past several years, there has been a general decline in global demand for oil and petroleum products while, at the same time, global shipping capacity increased dramatically as new vessels entered the market. This has lead to a sharp decrease in international tanker utilization and downward pressure on industry charter rates. Second, OSG faces a liquidity shortfall due to the approaching maturity of certain debt obligations, at the same time that it has announced it is investigating whether its financial statements need to be restated, which has severely limited any access to the capital and credit markets." On Oct. 22, 2012, OSG publicly announced that it was in the process of reviewing a tax issue arising from the fact that OSG is domiciled in the United States but has substantial international operations, in relation to the interpretation of certain provisions contained in OSG's loan agreements. As a result, OSG announced that investors should not rely on its financial statements for at least the last three years. The company's regulatory filing further stated that the Company is reviewing whether a restatement of those financial statements may be required and "evaluating its strategic options, including the potential voluntary filing of a petition for relief to reorganize under Chapter 11 of the Bankruptcy Code." On Oct. 22, Standard & Poor's and Moody's downgraded OSG's credit ratings, which further jeopardized the ongoing relationship between OSG and its creditors and complicated the process of obtaining additional liquidity. OSG said it has been assessing its projected liquidity position, particularly taking into account its highly leveraged debt position, downgraded credit ratings, and significant other practical limitations. After exploring all practicable alternatives, OSG has concluded that, if it does not seek protection from creditors in an organized reorganization, it faces significant risk of individual creditor action to the detriment of the value and stability of its business. Morten Arntzen, President and CEO, commented, in a statement, "The last few years have been difficult for everyone in our industry, but OSG has continued to provide safe, incident-free and reliable shipping services for our global client base. Our Jones Act fleet, in particular, has performed very well the last 18 months and has secured a number of notable contract extensions. Over the past two weeks, OSG has continued to fix vessels with our clients. We will use the Chapter 11 process to definitively resolve our financial issues. An orderly restructuring in Chapter 11 will provide stability both to OSG and to the entire shipping industry. We expect to emerge from our Chapter 11 reorganization with a solid financial base and clear path to future success. "During the reorganization, we have more than enough cash to support our operations, and we expect it to be business as usual for OSG's customers, employees, partners and suppliers. Thanks to our talented and dedicated employees around the world, we continue to enjoy a great reputation in our markets. I would like to thank them for their continued support and hard work," Mr. Arntzen continued. Foreign Affiliates The OSG group consists of Overseas Shipholding Group, Inc., the ultimate corporate parent, and over 250 affiliates around the world. Certain subsidiaries, including those that manage the Company's facilities in Manila, Singapore, Greece, London and Newcastle, have not filed for Chapter 11 reorganization. OSG Companies that are not part of the Chapter 11 filing include OSG Ship Management (UK) Ltd., which is domiciled in England, OSG Ship Management Asia Pacific Pte. Ltd., which is domiciled in Singapore, OSG-NNA Ship Management Services, Inc., which is domiciled in the Philippines, and OSG Ship Management (GR) Ltd., which is domiciled in Greece. The Debtors intend that the Non- Debtor Affiliates will continue to operate in the ordinary course of business during the pendency of the Chapter 11 cases. The Newcastle, England office is responsible for financial services and information technology services internationally. In addition, the Newcastle office handles the LNG and FSO technical operations. The Athens office manages the international tanker fleet of crude and product tankers, focusing on technical operations. The Manila office operates part of the Debtors' international flag operations, especially crewing and training operations. The Singapore office focuses on commercial aspects of the international flag business. A complete list of the OSG entities which filed, and those which did not file, Chapter 11 petitions, is available at http://www.kccllc.net/osg Business as Usual OSG intends to work with its constituencies to emerge from bankruptcy as quickly as possible while maintaining the company's market position, business model and strategy. OSG will continue to serve customers without interruption while it reorganizes its debt. OSG has more than adequate cash to allow the company to continue operating as usual and does not require debtor-in-possession financing. In addition, the company expects to generate significant cash flow while in Chapter 11, further ensuring its ability to maintain safe, reliable and high-quality operations throughout the process. OSG has filed first-day motions that ask the Court to approve, among other things, payment of employee wages and benefits that were incurred before the petition was filed, payment of certain pre-filing amounts owed to vendors and suppliers, and continued access to the company's cash collateral and cash management systems. The company is working closely with its vendors to secure their continued support. The Debtor said in a court filing that they intend to pay $4.8 million of outstanding prepetition claims of critical and foreign vendors. During the process, John Ray, CEO of Greylock Partners LLC, will serve as Chief Reorganization Officer. OSG is being advised by its legal counsel, Cleary Gottlieb Steen & Hamilton LLP, and its financial advisor, Chilmark Partners LLC. NOL Motion The Debtors have filed U.S. federal income tax returns reflecting net operating losses (?NOLs?) of approximately $310 million through the end of the taxable year ending December 31, 2011. I am advised that, because the Internal Revenue Code permits corporations to carry forward NOLs to offset future income and reduce future tax liabilities, these NOLs are valuable assets of the Debtors' estates. In fact, based on a federal corporate income tax rate of 35%, Debtors' NOLs through December 31, 2011 could yield future tax savings to the Debtors of in excess of $100 million. The Debtors seek the authority from the Bankruptcy Court to enforce the stay to preclude certain transfers of OSG's common stock and to monitor and possibly object to other changes in the ownership of the stock. The Debtors said that if too many blocks of equity securities representing 5% or more of the Debtors' shares are created through purchases, sales or issuances, or too many shares are added to or sold from such blocks, the Debtors may lose their ability to utilize their NOLs. The Debtors believe the availability of these tax savings may prove important to the financial health of the Debtors and the formulation of any plan of reorganization. About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York City, NY, 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: Case Summary & 50 Largest Unsec. Creditors ---------------------------------------------------------------- Lead Debtor: Overseas Shipholding Group, Inc. 666 Third Avenue New York, NY 10017 Bankruptcy Case No.: 12-20000 Affiliates that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- OSG International, Inc. 12-20001 OSG Bulk Ships, Inc. 12-20002 1372 Tanker Corporation 12-20003 Africa Tanker Corporation 12-20004 Alcesmar Limited 12-20005 Alcmar Limited 12-20006 Alpha Suezmax Corporation 12-20007 Alpha Tanker Corporation 12-20008 Amalia Product Corporation 12-20009 Ambermar Product Carrier Corporation 12-20010 Ambermar Tanker Corporation 12-20011 Andromar Limited 12-20012 Antigmar Limited 12-20013 Aqua Tanker Corporation 12-20014 Aquarius Tanker Corporation 12-20015 Ariadmar Limited 12-20016 Aspro Tanker Corporation 12-20017 Atalmar Limited 12-20018 Athens Product Tanker Corporation 12-20019 Atlas Chartering Corporation 12-20020 Aurora Shipping Corporation 12-20021 Avila Tanker Corporation 12-20022 Batangas Tanker Corporation 12-20023 Beta Aframax Corporation 12-20024 Brooklyn Product Tanker Corporation 12-20025 Cabo Hellas Limited 12-20026 Cabo Sounion Limited 12-20027 Caribbean Tanker Corporation 12-20028 Carina Tanker Corporation 12-20029 Carl Product Corporation 12-20030 Concept Tanker Corporation 12-20031 Crown Tanker Corporation 12-20032 Delphina Tanker Corporation 12-20033 Delta Aframax Corporation 12-20034 DHT Ania Aframax Corp. 12-20035 DHT Ann VLCC Corp. 12-20036 DHT Cathy Aframax Corp. 12-20037 DHT Chris VLCC Corp. 12-20038 DHT Rebecca Aframax Corp. 12-20039 DHT Regal Unity VLCC Corp. 12-20040 DHT Sophie Aframax Corp. 12-20041 Dignity Chartering Corporation 12-20042 Edindun Shipping Corporation 12-20043 Eighth Aframax Tanker Corporation 12-20044 Epsilon Aframax Corporation 12-20045 First Chemical Carrier Corporation 12-20046 First LPG Tanker Corporation 12-20047 First Union Tanker Corporation 12-20048 Fourth Aframax Tanker Corporation 12-20049 Front President Inc. 12-20050 Goldmar Limited 12-20051 GPC Aframax Corporation 12-20052 Grace Chartering Corporation 12-20053 International Seaways, Inc. 12-20054 Jademar Limited 12-20055 Joyce Car Carrier Corporation 12-20056 Juneau Tanker Corporation 12-20057 Kimolos Tanker Corporation 12-20058 Kythnos Chartering Corporation 12-20059 Leo Tanker Corporation 12-20060 Leyte Product Tanker Corporation 12-20061 Limar Charter Corporation 12-20062 Luxmar Product Tanker Corporation 12-20063 Luxmar Tanker LLC 12-20064 Majestic Tankers Corporation 12-20065 Maple Tanker Corporation 12-20066 Maremar Product Tanker Corporation 12-20067 Maremar Tanker LLC 12-20068 Marilyn Vessel Corporation 12-20069 Maritrans General Partner Inc. 12-20070 Maritrans Operating Company L.P. 12-20071 Milos Product Tanker Corporation 12-20072 Mindanao Tanker Corporation 12-20073 Mykonos Tanker LLC 12-20074 Nedimar Charter Corporation 12-20075 Oak Tanker Corporation 12-20076 Ocean Bulk Ships, Inc. 12-20077 Oceania Tanker Corporation 12-20078 OSG 192 LLC 12-20079 OSG 209 LLC 12-20080 OSG 214 LLC 12-20081 OSG 215 Corporation 12-20082 OSG 242 LLC 12-20083 OSG 243 LLC 12-20084 OSG 244 LLC 12-20085 OSG 252 LLC 12-20086 OSG 254 LLC 12-20087 OSG 300 LLC 12-20088 OSG 400 LLC 12-20089 OSG America L.P. 12-20090 OSG America LLC 12-20091 OSG America Operating Company LLC 12-20092 OSG Car Carriers, Inc. 12-20093 OSG Clean Products International, Inc. 12-20094 OSG Columbia LLC 12-20095 OSG Constitution LLC 12-20096 OSG Courageous LLC 12-20097 OSG Delaware Bay Lightering LLC 12-20098 OSG Discovery LLC 12-20099 OSG Endeavor LLC 12-20100 OSG Endurance LLC 12-20101 OSG Enterprise LLC 12-20102 OSG Financial Corp. 12-20103 OSG Freedom LLC 12-20104 OSG Honour LLC 12-20105 OSG Independence LLC 12-20106 OSG Intrepid LLC 12-20107 OSG Liberty LLC 12-20108 OSG Lightering LLC 12-20109 OSG Lightering Acquisition Corporation 12-20110 OSG Lightering Solutions LLC 12-20111 OSG Mariner LLC 12-20112 OSG Maritrans Parent LLC 12-20113 OSG Navigator LLC 12-20114 OSG New York, Inc. 12-20115 OSG Product Tankers AVTC, LLC 12-20116 OSG Product Tankers Member LLC 12-20117 OSG Product Tankers II, LLC 12-20118 OSG Product Tankers I, LLC 12-20119 OSG Product Tankers, LLC 12-20120 OSG Quest LLC 12-20121 OSG Seafarer LLC 12-20122 OSG Ship Management, Inc. 12-20123 OSG Valour LLC 12-20124 Overseas Allegiance Corporation 12-20125 Overseas Anacortes LLC 12-20126 Overseas Boston LLC 12-20127 Overseas Diligence LLC 12-20128 Overseas Galena Bay LLC 12-20129 Overseas Houston LLC 12-20130 Overseas Integrity LLC 12-20131 Overseas Long Beach LLC 12-20132 Overseas Los Angeles LLC 12-20133 Overseas Martinez LLC 12-20134 Overseas New Orleans LLC 12-20135 Overseas New York LLC 12-20136 Overseas Nikiski LLC 12-20137 Overseas Perseverance Corporation 12-20138 Overseas Philadelphia LLC 12-20139 Overseas Puget Sound LLC 12-20140 Overseas Sea Swift Corporation 12-20141 Overseas Shipping (GR) Ltd. 12-20142 Overseas ST Holding LLC 12-20143 Overseas Tampa LLC 12-20144 Overseas Texas City LLC 12-20145 Pearlmar Limited 12-20146 Petromar Limited 12-20147 Pisces Tanker Corporation 12-20148 Polaris Tanker Corporation 12-20149 Queens Product Tanker Corporation 12-20150 Reymar Limited 12-20151 Rich Tanker Corporation 12-20152 Rimar Chartering Corporation 12-20153 Rosalyn Tanker Corporation 12-20154 Rosemar Limited 12-20155 Rubymar Limited 12-20156 Sakura Transport Corp. 12-20157 Samar Product Tanker Corporation 12-20158 Santorini Tanker LLC 12-20159 Serifos Tanker Corporation 12-20160 Seventh Aframax Tanker Corporation 12-20161 Shirley Tanker SRL 12-20162 Sifnos Tanker Corporation 12-20163 Silvermar Limited 12-20164 Sixth Aframax Tanker Corporation 12-20165 Skopelos Product Tanker Corporation 12-20166 Star Chartering Corporation 12-20167 Suezmax International Agencies, Inc. 12-20168 Talara Chartering Corporation 12-20169 Third United Shipping Corporation 12-20170 Tokyo Transport Corp. 12-20171 Transbulk Carriers, Inc. 12-20172 Troy Chartering Corporation 12-20173 Troy Product Corporation 12-20174 Urban Tanker Corporation 12-20175 Vega Tanker Corporation 12-20176 View Tanker Corporation 12-20177 Vivian Tankships Corporation 12-20178 Vulpecula Chartering Corporation 12-20179 Wind Aframax Tanker Corporation 12-20180 Type of Business: Overseas Shipholding Group, Inc., is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. Web site: http://www.osg.com/ Chapter 11 Petition Date: Nov. 14, 2012 Court: U.S. Bankruptcy Court District of Delaware Debtors' Counsel: James L. Bromley, Esq. Luke A. Barefoot, Esq. CLEARY GOTTLIEB STEEN & HAMILTON LLP One Liberty Plaza New York, NY 10006 Tel: (212) 225-2000 Fax: (212) 225-3999 E-mail: jbromley@cgsh.com lbarefoot@cgsh.com -- and -- Derek C. Abbott, Esq. Daniel B. Butz, Esq. William M. Alleman, Jr., Esq. MORRIS, NICHOLS, ARSHT & TUNNELL LLP 1201 North Market Street P.O. Box 1347 Wilmington, DE 1347 Tel: (302) 658-9200 Fax: (302) 658-3989 E-mail: dabbott@mnat.com dbutz@mnat.com walleman@mnat.com Debtors' Chief Restructuring Officer: JOHN J. RAY III Debtors' Claims and Noticing Agent: KURTZMAN CARSON CONSULTANTS LLC 2335 Alaska Avenue El Segundo, CA 90245 Tel: (866) 967-1780 Total Assets: $4,151,334,000 at June 30, 2012 Total Liabilities: $2,674,281,000 at June 30, 2012 The petitions were signed by Michael J. Zimmerman, chairman. Debtors' Consolidated List of Their 50 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ DNB NORBANK Revolving Letter $1,491,644,436 Attn: Alberto Caceda of Credit DNB Norbank - Houston Office 333 Clay Street, Suite 3950 Houston, TX 77002 THE BANK OF NEW YORK MELLON, Bond Debt $302,979,167 as indenture trustee for the 8.125% debenture due 2018 Attn: Lawrence O'Brian 101 Barclay Street - Floor 8W New York, NY 10286 WILMINGTON TRUST COMPANY, as Bond Debt $148,707,083 Indenture trustee for the 7.5% Senior notes, due 2024 Attn: Geoffrey J. Lewis 1100 North Market Street Wilmington, DE 19890 THE BANK OF NEW YORK MELLON, Bond Debt $66,122,827 as indenture trustee for the 8.75% debenture due 2013 Attn: Lawrence O'Brian 101 Barclay Street - Floor 8W New York, NY 10286 RETIREMENT PLAN OF MARITRANS, Pension Plan $15,835,581 INC. Trustee New York Life Trust Company FBO Attn: Peter Kirkfield, Trust Operations 690 Canton Street Westwood, MA 02090-2321 CITIGROUP Derivative $737,253 Attn: Punit Nagori Contract Citibank New York 388 Greenwich Street, 11th Floor New York, NY 10013 ROYAL BANK OF SCOTLAND Derivative $684,596 Attn: Andrew Stirling Contract Corporate Risk Solutions Shipping 135 Bishopgate London EC2M 3UR United Kingdom DNB NOR MARKETS Derivative $667,353 Attn: Preeti Panikkaveetil Contract 200 Park Avenue New York, NY 10166-0396 HSH NORDBANK NEW YORK BRANCH Derivative $666,204 Attn: John C. Hammond Contract 230 Park Avenue New York, NY 10169-0005 DEUTSCHE BANK AG Derivative $509,284 Attn: Sebastien Neckel Contract Capital Markets & Treasury Solutions Corporate Treasury Sales Alter Wall 53 Hamburg 20457 Germany EVERCORE GROUP L.L.C. Professional $352,476 Attn: Frank Fortunato Fees c/o Accounts Payable Department P.O. Box 5319 New York, NY 10150 DNB MARKETS Derivative $151,326 Contract ING BANK NV Derivative $150,378 Contract MCA ASSOCIATES INC Trade Debt $109,110 GENERAL MARITIME Trade Debt $76,890 MJLF & ASSOC Trade Debt $36,148 BAY HOUSTON TOWING CO Trade Debt $32,170 WW GRAINGER INC Trade Debt $26,955 SPRINT Trade Debt $21,528 US WATER TAXI Trade Debt $20,246 L&R MIDLAND INC Trade Debt $19,031 WILMINGTON INSTRUMENT CO INC Trade Debt $14,845 EXCEL HYDRAULICS LLC Trade Debt $13,236 CLARKSON SHIPPING SERVICES Trade Debt $13,172 USA INC EXXON MOBIL MARIN LUBRICANTS Trade Debt $10,727 POTEN & PARTNERS INC Trade Debt $9,187 W & O SUPPLY Trade Debt $9,174 MAN DIESEL & TURBO Trade Debt $8,987 WORLDWIDE CORROSION SERVICES Trade Debt $7,541 LTD FLORIDA MARINE JOINER SERVICES Trade Debt $7,312 INC LIBERTY MARINE SERVICES INC Trade Debt $6,632 CLEAN ISLANDS COUNCIL Trade Debt $6,000 BAYONNE LINEBOAT SERVICE Trade Debt $5,850 GLOBALVIEW SOFTWARE INC Trade Debt $5,775 HPI DIRECT INC Trade Debt $5,695 MCQUILLING BROKERAGE INC Trade Debt $5,528 BROWARD COUNTY BOARD OF Trade Debt $4,970 COMMISSIONER ASSOCIATED MARINE SERVICE INC Trade Debt $4,877 SAUER COMPRESSORS USA Trade Debt $4,741 ABF FREIGHT SYSTEM INC Trade Debt $4,635 CHEVRON SHIPPING COMPANY Trade Debt $4,224 DELAWARE BAY LAUNCH SERVICE Trade Debt $4,093 MARTIN OTTAWAY VAN HEMMEN & Trade Debt $3,652 DOLAN INC ADP INC Trade Debt $3,651 SST MARINE CONSULTING INC Trade Debt $3,380 GOODYEAR RUBBER PRODUCTS INC Trade Debt $3,366 SPECTRON ENERGY SERVICES Trade Debt $3,000 LIMITED (NORWAY BRANCH) A&D INDUSTRIAL REPAIR CO INC Trade Debt $2,973 T-MOBILE Trade Debt $2,920 MMC INTERNATIONAL CORP Trade Debt $2,748 OXLEY DEVELOPMENT: Unable to Reorganize; Case Dismissed ------------------------------------------------------- The Hon. James R. Sacca of the U.S. Bankruptcy Court for the Northern District of Georgia dismissed the Chapter 11 case of Oxley Development Company, LLC. As reported in the Troubled Company Reporter on Oct. 11, 2012, Donald F. Walton, U.S. Trustee for Region 21, requested that the Debtor's case be dismissed with prohibition against refiling for at least 180 days. On Aug. 7, 2012, German American Capital Corporation, which asserts a security interest in the Debtor's 48.49 acres of land located on Laurel Bluff and Laurel Island in Camden County, Georgia, filed an emergency motion for relief from stay seeking to proceed with a scheduled foreclosure sale of the property which it had advertised for that date. The Court held an emergency hearing on the motion on Aug. 7, 2012, and on Aug. 8, 2012, entered an order lifting the automatic stay as to GACC and the Property effective as of 2 p.m. on Aug. 7, 2012. Upon information and belief, GACC proceeded with the scheduled foreclosure sale on Aug. 7, 2012, based on the Court's oral announcement of its ruling during the emergency hearing, and purchased the Property at that sale. The U.S. Trustee told the Court that Debtor does not have the ability to reorganize and that no purpose is served by the continued pendency of the Debtor's case. About Oxley Development Oxley Development Company, LLC, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-69799) in Atlanta Aug. 6, 2012. Oxley Development owns the Laurel Bluff and Lauren Island, in Camden County, Georgia. The Debtor, a single asset real estate under 11 U.S.C. Sec. 101(51B), estimated assets of at least $100 million and debts under $100 million. This is not the first time Oxley has sought bankruptcy protection. In October 2011, Oxley filed a Chapter 11 petition in Brunswick (Bankr. S.D. Ga. Case No. 11-21338). But the case was dismissed at the behest of the U.S. Trustee. The bankruptcy judge in May granted relief from stay to German American Capital Corporation, allowing the creditor to pursue its state law remedies in connection with the Debtor's real property. William S. Orange, III, Attorney at Law, represented the Debtor in the prior Chapter 11 case. In the new case, the Debtor is represented by Paul Reece Marr P.C. The Debtor disclosed $105,700,000 in assets and $73,777,219 in liabilities as of the Chapter 11 filing. Creditor German American Capital Corp. is represented in the case by Paul Baisier, Esq., and Shuman Sohrn, Esq., at Seyfarth Shaw LLP. No official committee of unsecured creditors has been appointed pursuant to section 1102 of the Bankruptcy Code. PA ACADEMY OF MUSIC: US Trustee Protests Counsel's Fees ------------------------------------------------------- Tim Mekeel at Lancaster Online reports that George Conway, a trial attorney in the U.S. Trustee's Office, has objected to at least three of the motions filed by Jacques Geisenberger Jr., counsel to Pennsylvania Academy of Music. According to the report, since PAM entered bankruptcy in May 2010, Mr. Conway also got PAM to move its endowment into a different kind of account. He also tried to get PAM to switch to a different kind of bankruptcy. But now, with Mr. Geisenberger asking to be paid $166,000 for his final 21 months of service to PAM, Mr. Conway has turned it up a notch. The report says, in a new objection, Mr. Conway is criticizing the caliber and impact of Mr. Geisenberger's work, while asking a judge to set his pay. Mr. Conway says Mr. Geisenberger's "representation was often ineffective and often consisted of unnecessary and excessive time being expended by him. The report adds, in his six-page filing, the U.S. Trustee's Office attorney alleged that Mr. Geisenberger "failed to demonstrate the skill and experience that a practitioner of his experience should have brought to bear." The report notes a hearing on the objection has been set for Nov. 28 before U.S. Bankruptcy Judge Jean FitzSimon in Philadelphia. In asking Judge FitzSimon to disallow Mr. Geisenberger's request and determine a "fair and reasonable amount" herself, Mr. Conway takes issue with numerous entries on the itemized bill. According to the report, Mr. Conway points to examples of what he believes are excessive hours being billed for tasks such as attending meetings and preparing motions. He also points to Mr. Geisenberger billing travel time at his full rate. Based in Lancaster, Pennsylvania, Academy of Music dba The Pennsylvania Academy of Music filed for Chapter 11 bankruptcy protection on May 27, 2010 (Bankr. E.D. Pa. Case No. 10-14377). Jacques H. Geisenberger, Jr., Esq., at Wheatland Place, represents the Debtor in its restructuring effort. The Company estimated assets between $1 million and $10 million, and debts between $100,000 and $500,000 in its Chapter 11 petition. PACESETTER FABRICS: Hearing on Case Dismissal Set for Nov. 19 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California will convene a hearing on Nov. 19, 2012, at 11 a.m., to consider an order to show cause why Pacesetter Fabrics, LLC's Chapter 11 case must not be dismissed. At the hearing, the bankruptcy judge will also consider Cathay Bank's request for relief from the automatic stay with respect to the personal property of Pacesetter Fabrics. Cathay Bank is also asking the Court for authorization to enforce its remedies to repossess and sell the property. Cathay Bank explained that its interest in the property is not protected by an adequate equity cushion and the property is not necessary for the Debtor's reorganization. About Pacesetter Fabrics Based in City of Commerce, California, Pacesetter Fabrics, LLC, dba Pacesetter Off Price and Pacesetter Garments, is a distributor of quality textile and garment fabrics in the United States and international markets. The Company has been in business for over 14 years. The Company is owned 98% by Net, LLC, a California limited liability company, 1% by Leora Namvar (Ramin Namvar's wife), and 1% by Massoud Poursalimi (Leora Namvar and David Poursalimi's father). Net LLC is in turn owned 99% by Ramin Namvar and 1% Leora Namvar. Pacesetter Fabrics filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-36330) on June 17, 2011. Judge Ernest M. Robles presides over the case. Greenberg Glusker Fields Claman & Machtinger LLP serves as successor general bankruptcy counsel. The Debtor disclosed $33,695,869 in assets and $28,599,582 in liabilities as of the Chapter 11 filing. Brian Wygle president of Lazarus Resources Group, LLC, a corporate turnaround consultant, assists Pacesetter with its turnaround and reorganization efforts and the financial affairs and management of the Company. PACIFIC JET: Client Sues Shearman & Sterling for Malpractice ------------------------------------------------------------ Eric Hornbeck at Bankruptcy Law360 reports that a former Shearman & Sterling LLP client urged a New York state appeals court panel on Thursday to hold the firm accountable for the $750,000 he loaned to a friend's company that he lost after it went bankrupt, saying the firm hadn't done its "basic lawyering duties." According to Bankruptcy Law360, former client James Garten sued Shearman & Sterling for legal malpractice because he said the firm hadn't protected him when he loaned money to a friend's faltering company, Pacific Jet Inc. PCF SALECO: Reply to Involuntary Bankruptcy Due Nov. 30 ------------------------------------------------------- CSP Daily News, citing court documents, reports a U.S. Bankruptcy Court judge approved the unopposed motion of PCF Saleco to further extend the time in which to respond to the Chapter 11 involuntary petition lodged by three industry suppliers in August. The response deadline is now Nov. 30, 2012. According to the report, PCF Saleco cited "further discussions and negotiations leading to an agreement by the parties to further extend [PCF Saleco's] time in which to answer, respond or otherwise plead" in the matter. In mid-October, PCF Saleco received an extension until Oct. 31, citing extended contract negotiations with ConocoPhillips/Phillips 66, the report notes. PCF Saleco LLC is a retail chain spun off of K&G Petroleum in 2008. Core-Mark International Inc., D&H Pump Service Inc., and ACM Industries Inc. filed an involuntary Chapter 11 bankruptcy petition against the Company. Core-Mark, based in South San Francisco, Calif., claims PCF Saleco owes it more than $1.64 million. D&H Pump, a supplier of commercial fuel systems based in Albuquerque, N.M., said PCF Saleco owes it $10,778. ACM Industries, a restaurant-supply company, also of Albuquerque, claims PCF Saleco owes it nearly $3,000. Caroline Fuller, Esq., represents the three unsecured creditors. PHOENIX SERVICES: S&P Lowers CCR to 'B' on Higher Leverage ---------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Phoenix Services International LLC to 'B' from 'B+'. The rating outlook is stable. "At the same time, we assigned a 'B' (same as the corporate credit rating) issue-level rating to its subsidiary Metal Services LLC's proposed $275 million first-lien loan due 2017 and its proposed $30 million first-lien revolving credit facility due 2016. The 'B' issue-level rating and the '3' recovery rating indicate our expectation for meaningful (50%-70%) recovery in the event of default," S&P said. "The lower rating reflects our expectation that leverage will increase to about 4.5x EBITDA from about 3.5x due to higher absolute debt levels associated with the company's proposed financing," said credit analyst James Fielding. "We view this level to be indicative of an 'aggressive' financial risk profile and more in line with the lower rating." "The stable outlook reflects our baseline view that leverage is unlikely to continue to rise above 4.5x and is more likely to recede gradually, near to 4x by the end of 2013. This is driven by new contracts with steel producers including Nucor Corp. and cash flow from other operations that ramped up in 2012 that we expect to support modest improvement in 2013 EBITDA," S&P said. POMONA VALLEY: S&P Corrects Rating on Series 2002 Rev Bonds to 'B' ------------------------------------------------------------------ Standard & Poor's Ratings Services corrected its rating on Pomona Valley Educational Joint Powers Authority, Calif.'s taxable lease revenue bonds (Pomona Unified School District) (QualZone Academy Bonds) series 2002 to 'B' from 'AAA'. PONCE DE LEON: Taps Christiansen & Portela as Real Estate Broker ----------------------------------------------------------------- Ponce de Leon 1403, Inc., asks the U.S. Bankruptcy Court for the District of Puerto Rico for permission to employ Gerald J. Christiansen from Christiansen & Associates, Inc., doing business as Christiansen & Portela, as real estate broker. Mr. Christiansen and the firm will, among other things: -- act as exclusive sales and leasing agent of the Debtor's commercial units located at Metro Plaza Towers Condominium, San Juan, Puerto Rico; -- offer the property for sale in accordance with established practices; -- assist the debtor in any negotiations for the sale/ leasimg of the property; and -- assist the Debtor in the preparation and selection of all advertising and promotional materials, including, but not limited to printed media advertisements, brochures, and signs to be places at the property offering the property for sale/ lease. The Debtor agreed to compensate the broker as: (i) a disposition fee equal to 4% of the sales price of the property will be earned by the broker if the property is sold during the term of the agreement or within 180 days of its termination if sold to a client introduced to the property by broker prior to the termination or expiration of the agreement; and (ii) a disposition fee equal to 5% of the sales price of the property will be earned by the broker if the property is sold during the term of the agreement or 180 days of its termination is sold to a client with the assistance of the third party co-operating brokers. To the best of the Debtor's knowledge, the firm is a "disinterested person' as that term is defined in Section 101(14) of the Bankruptcy Code. About Ponce De Leon San Juan, P.R.-based Ponce De Leon 1403, Inc., developed, constructed, and operates the Metro Plaza Tower condominium and commercial property project in Santurce, Puerto Rico. The Metro Plaza Tower project consists of two 15-story towers atop a base structure that serves as a parking garage, common area, and retail space. Each tower houses 87 residential units. The base structure provides approximately 567 parking spaces and has approximately 14,000 square feet of commercial space available for lease. The common areas of the project include a swimming pool, a gym, gardens and a gazebo. Ponce De Leon 1403 Inc. filed for Chapter 11 protection (Bank. D. P.R. Case No. 11-07920) on Sept. 19, 2011. The Debtor estimated both assets and debts of between US$10 million and US$50 million. Carmen Conde Torres, Esq., at C. Conde & Assoc., in Old San Juan, Puerto Rico, represents the Debtor as counsel. U.S. Bankruptcy Court for the District of Puerto Rico has granted Ponce De Leon 1403 Inc. permission to employ Doris Barroso Vicens as accountant, with compensation to be paid in such amounts as may be allowed by the Court. PROCESS AMERICA: Files for Chapter 11 in Woodland Hills ------------------------------------------------------- Process America Inc. filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-19998) on Nov. 12 in Woodland Hills, California. The Debtor estimated less than $10 million in assets and at least $10 million in liabilities. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Process America is a credit-card processor from Canoga Park, California. The company has been in business for 12 years, according to the Web site. PROVIDENT BUILDING: Heading Into Foreclosure -------------------------------------------- Kathleen Cooper at the News Tribune reports that another downtown office building in Tacoma, Washington, is on the road to receivership, leaving its largest tenant and new growing business unsure about the future of its options. California-based investors who own the Provident Building, at 917 Pacific Ave., have stopped making payments on a loan that helped buy the building, according to a lawsuit filed late last month in Pierce County Superior Court, according to the report. The News Tribune relates that now the company that owns the loan is calling it, saying the investors owe almost $3.9 million, and it also has started foreclosure proceedings. The News Tribune relays that the owners are approximately 16 limited liability companies that represent about 30 people, mostly couples, who generally are residents of the San Diego area. Their investment is managed by Linmar Management in San Diego. The News Tribune shares that the investment group bought the Provident Building in 2006 for about $6.1 million. According to the receiver lawsuit, it borrowed $3.05 million from the First Bank of Beverly Hills to finance the purchase, and more investors came on sometime later, the report says. In July 2010, the report recalls that a Delaware-based LLC called 2010-1 CRE Venture bought the loan from the Beverly Hills Bank. The News Tribune says that CRE began foreclosure proceedings Oct. 23 and filed the lawsuit Oct. 29, asking for a receiver to take over collecting rent. It's not clear when the owners might have stopped making loan payments, though CRE does say that county property taxes were delinquent from 2009 until it paid them this year, the report notes. The report adds that getting the ownership sorted out isn't the only issue for tenants of the Provident, which was built in 1903 and renovated in the 2000s. QUANTUM FUEL: Incurs $9.4-Mil. Net Loss in Sept. 30 Quarter ----------------------------------------------------------- Quantum Fuel Systems Technologies Worldwide, Inc., filed its quarterly report on Form 10-Q, reporting a net loss of $9.4 million on $5.8 million of revenues for the three months ended Sept. 30, 2012, compared with a net loss of $3.9 million on $10.3 million of revenues for the same period last year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $24.3 million on $17.1 of revenues, compared with a net loss of $13.5 million on $24.1 million of revenues for the comparable period of 2011. The Company's balance sheet at Sept. 30, 2012, showed $65.6 million in total assets, $45.8 million, and stockholders' equity of $19.8 million. According to the regulatory filing, the Company expects that its existing sources of liquidity will only be sufficient to fund its activities through Dec. 31, 2012. "In order for us to have sufficient capital to execute our business plan, fund our operations and meet our debt obligations over this twelve month period, we will need to raise additional capital and/or monetize certain assets. We are considering various cost-effective capital raising options and alternatives including the sale of Schneider Power and/or other assets, and the sale of equity and debt securities. Although we have been successful in the past in raising capital, we cannot provide any assurance that we will be successful in doing so in the future to the extent necessary to be able to fund all of our growth initiatives, operating activities and obligations through Sept. 30, 2013, which raises substantial doubt about our ability to continue as a going concern." Brian Olson, president and chief executive officer, stated, "We continue to see positive developments and trends within our natural gas business, including revenue growth, strong product margins, product innovation and development, and tank production capacity expansion. We are pleased we were able to secure equipment financing to provide for our expansion which will initially double our production capacity." Olson continued, "Although there are challenges in the business that we need to work through, I believe we are taking appropriate actions that will make a meaningful and positive difference to the future of this Company." A copy of the press release is available for free at: http://is.gd/7M6edR A copy of the Form 10-Q is available at http://is.gd/MSyMlS Lake Forest, Calif.-based Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced vehicle propulsion systems, fuel storage technologies, and alternative fuel vehicles. Quantum's portfolio of technologies includes electronic and software controls, hybrid electric drive systems, natural gas and hydrogen storage and metering systems and other alternative fuel technologies and solutions that enable fuel efficient, low emission, natural gas, hybrid, plug-in hybrid electric and fuel cell vehicles. * * * As reported in the TCR on March 30, 2012, Haskell & White LLP, in Irvine, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that Company incurred significant operating losses and used a significant amount of cash in operations during the eight months ended Dec. 31, 2011. R.E. LOANS: Terra Verde Buys Rancho Las Flores ---------------------------------------------- Terra Verde has acquired Rancho Las Flores, a massive 9,850-acre master-planned residential community in Hesperia, California, from the estate of R.E. Loans, a private mortgage lender that had previously lent more than $80M to the project. R.E. Loans came out of bankruptcy in the third quarter of 2012. The development will feature up to 15,500 residential units, an unprecedented size and scale for a Victor Valley project. Rancho Las Flores is located at the southernmost region of the Victor Valley, 20 minutes north of Rancho Cucamonga, California. The property was sold in its current unimproved condition, with an approved specific plan for �15,500 dwelling units. "The rolling terrain and the spectacular views of Rancho Las Flores combined with the attractive basis of the land and the proximity to the LA employment centers made this a great investment to add to our portfolio," said Craig Martin, Founding Partner of Terra Verde Group. "Rancho Las Flores has a lot of potential, especially since the area's supply of vacant developed lots is rapidly diminishing." This acquisition is the first of its kind for Terra Verde in the San Bernardino County market. Coming out of the last housing downturn in the early 1990s, Principals of Terra Verde purchased and developed the Oak Valley master plan in the Beaumont/Calimesa area of Riverside County comprised of approximately 6,700 acres and 15,000 units. "This is the only project of regional impact in Victor Valley, Rancho Las Flores will garner an outsize capture of future household growth," said John R. Shumway, Principal with The Concord Group, a real estate consulting firm. "I am delighted that Rancho Las Flores has been acquired, and am hopeful that the property will be a great addition to our community," said Hesperia Mayor Russ Blewett. Hesperia City Manager Mike Podegracz also commented on the project. "Terra Verde Group has demonstrated their ability to develop wonderful master-planned communities, like those in Calimesa and Beaumont, and I am looking forward to working with them," Podegracz said. Texas-based Terra Verde Group has taken over the massive project - one of the largest remaining master-planned projects in California. The project is ideally located at the far southern portion of Victor Valley, poised to capitalize on future growth in the High Desert region while providing a shorter commute time to existing Inland Empire and Los Angeles County job centers. Rancho Las Flores is near several Los Angeles employment centers south of Cajon Pass and its topography is a mix of rolling hills and valley plains offering premium views. In addition, an extensive trail system and a network of neighborhood parks will contribute to an active and healthy lifestyle. A community center with sports fields and recreational amenities will cater to the young families that are expected to make Rancho Las Flores their home. The southern boundary of the property is protected open space bordered by Silverwood Lake State Recreation Area. About Terra Verde Terra Verde Group, LLC, is a real estate investment firm based in Richardson, Texas. The company is focused on the purchase of opportunistic and distressed industrial, commercial and residential real estate assets. Its principals have decades of combined experience in investments and development in the real estate marketplace and account for more than $6.5 billion of sales in real estate product. TVG delivers risk-adjusted rates of return, which exceed expectations and build and sustain investor trust throughout the investment cycle. TVG creates significant added value by engineering and executing smart, disciplined, proactive management and capital strategies, while adhering to the core values it shares with its partners. About R.E. Loans R.E. Loans, LLC, was, for many years, in the business of providing financing to home builders and developers of real property. R.E. Future LLC and Capital Salvage own the real property obtained following foreclosure proceedings initiated by R.E. Loans against its borrowers. R.E. Loans is the sole shareholder of Capital Salvage and the sole member of R.E. Future. B-4 Partners LLC is the sole member of R.E. Loans. As a result of the multiple defaults by R.E. Loans' borrowers, R.E. Loans has transitioned from being a lender to becoming a property management company. Lafayette, California-based R.E. Loans, R.E. Future and Capital Salvage filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case Nos. 11-35865, 11-35868 and 11-35869) on Sept. 13, 2011. Judge Barbara J. Houser presides over the case. Stutman, Treister & Glatt Professional Corporation, in Los Angeles, and Gardere, Wynne Sewell LLP, in Dallas, represent the Debtors as counsel. James A. Weissenborn at Mackinac serves as R.E. Loans' chief restructuring officer. The Debtors tapped Hines Smith Carder as their litigation and outside general counsel. The Debtors tapped Alixpartners, LLP as noticing agent, and Latham & Watkins LLP as special counsel in real estate matters. R.E. Loans disclosed $713.6 million in assets and $886.0 million in liabilities as of the Chapter 11 filing. Akin Gump Strauss Hauer & Feld LLP, in Dallas, represents the Official Committee of Note Holders as counsel. RAHA LAKES: Taps Daum Commercial to Market Los Angeles Properties ------------------------------------------------------------------ Raha Lakes Enterprises, LLC, et al., ask the U.S. Bankruptcy Court for the Central District of California for permission to employ Daum Commercial Real Estate Services as real estate agents. The Debtor desires to employ Sehyung Kim and Kam Elghanian of Daum as real estate agents to list and market the property located at 900 South San Pedro Street, Los Angeles, and in South-East corner of the 9th Street and San Pedro Street, in the garment District in Downtown Los Angeles, in order to obtain the highest price for the same. The proposed listing price of the property is $26,000,000. The Debtor agreed to pay the agents on a commission basis at the collective rate of 3% of the listing price. To the best of the Debtor's knowledge, Daum Commercial represents no interest adverse to the Debtors. About Raha Lakes and Mehr in Los Angeles Raha Lakes Enterprises, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-43422) on Oct. 3, 2012, in Los Angeles. Raha Lakes, a single-asset real estate company, estimated assets of at least $10 million and debt of at least $1 million. The company's principal asset is at 900 South San Pedro Street in Los Angeles. Raha Lakes listed $10 million to $50 million in assets, and $1 million to $10 million in debts. The petition was signed by Kayhan Shakib, managing member. Mehr in Los Angeles Enterprises, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-43589) on Oct. 4, 2012, estimating assets of at least $10 million and liabilities of at least $1 million. The petition was signed by Yadollah Shakib, managing member. Judge Ernest M. Robles presides over the cases. The Debtors are represented by Michael S. Kogan, Esq., at Kogan Law Firm APC. John Choi, Esq., at Kim Park Choi, in Los Angeles, represents secured creditor San Pedro Investment, LLC, as counsel. RAHA LAKES: Wants to Hire Kogan Law as Bankruptcy Counsel --------------------------------------------------------- Raha Lakes Enterprises, LLC, et al., ask the U.S. Bankruptcy Court for the Central District of California for permission to employ Kogan Law Firm, APC, as counsel. KLF received a prepetition retainer from the Debtors in the total amount of $38,000, which was allocated -- $30,000 to Raha Lakes, the lead case and $8,000 to debtor-affiliate Mehr in Los Angeles Enterprises, LLC, which is kept in a segregated trust account. Prior to the petition date, $8,867 was spent prepetition to pay for the fees and expenses incurred by KLF. To the best of the Debtors' knowledge, Kogan Law does not represent an interest adverse to the Debtors. About Raha Lakes and Mehr in Los Angeles Raha Lakes Enterprises, LLC, filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-43422) on Oct. 3, 2012, in Los Angeles. Raha Lakes, a single-asset real estate company, estimated assets of at least $10 million and debt of at least $1 million. The company's principal asset is at 900 South San Pedro Street in Los Angeles. Raha Lakes listed $10 million to $50 million in assets, and $1 million to $10 million in debts. The petition was signed by Kayhan Shakib, managing member. Mehr in Los Angeles Enterprises, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-43589) on Oct. 4, 2012, estimating assets of at least $10 million and liabilities of at least $1 million. The petition was signed by Yadollah Shakib, managing member. Judge Ernest M. Robles presides over the cases. The Debtors are represented by Michael S. Kogan, Esq., at Kogan Law Firm APC. John Choi, Esq., at Kim Park Choi, in Los Angeles, represents secured creditor San Pedro Investment, LLC, as counsel. REALTY AMERICA: Case Summary & 2 Unsecured Creditors ---------------------------------------------------- Debtor: Realty America Group, (Shops at Highpointe) Retail LP 4245 N. Central Expressway, Suite 420 Dallas, TX 75205 Bankruptcy Case No.: 12-12490 Chapter 11 Petition Date: November 5, 2012 Court: U.S. Bankruptcy Court Western District of Texas (Austin) Judge: H. Christopher Mott Debtor's Counsel: Keith W. Harvey, Esq. THE HARVEY LAW FIRM, P.C. 4131 N. Central Expressway, Suite 980 Dallas, TX 75204 Tel: (972) 243-3960 Fax: (972) 241-3970 E-mail: harvey@keithharveylaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its two largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txwb12-12490.pdf The petition was signed by Mitch O. Provosty, manager. REEF GLOBAL: Incurs $83,000 Net Loss in Third Quarter ----------------------------------------------------- Reef Global Energy VI, L.P., filed its quarterly report on Form 10-Q, reporting a net loss of $83,057 on $257,505 of sales for the three months ended Sept. 30, 2012, compared with net income of $496,801 on $955,564 of sales for the same period a year ago. The Company reported net income of $201,526 on $1.2 million of sales for the nine months ended Sept. 30, 2012, compared with net income of $1.6 million on $3.1 million of sales for the same period of 2011. The Company's balance sheet at Sept. 30, 2012, showed $1.3 million in total assets, $492,211 in total liabilities, and partnership equity of $801,891. According to the regulatory filing, while management believes that the Partnership will generate positive operating cash flows during the next 12 months, such operating cash flow may not be sufficient to also cover the Partnership's general and administrative costs. Cash flows from operations will continue to decline as a result of natural production declines in the Partnership's wells. Cash flow, as measured by taking the Partnership net income (loss) shown on the Statement of Operations and adding back non cash expenditures (depreciation, depletion and amortization and accretion of asset retirement obligation), while positive for the nine months ended Sept. 30, 2012, was a loss of $16,924 for the three month period ended Sept. 30, 2012. "These conditions raise substantial doubt about the Partnership's ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/rGyU7W Richardson, Texas-based Reef Global Energy VI, L.P., is a Nevada limited partnership formed to acquire, explore, develop and produce crude oil, natural gas, and natural gas liquids for the benefit of its investor partners. REEVES DEVELOPMENT: Wins OK to Hire Steffes Vingiello as Counsel ---------------------------------------------------------------- Bankruptcy Judge Robert Summerhays granted Reeves Development LLC authority to employ of Arthur A. Vingiello, Esq., and the law firm of Steffes, Vingiello & McKenzie, LLC, as Chapter 11 counsel under a general retainer to give the Debtor legal advice with respect to its powers and duties as debtor-in-possession and to perform all legal services for the Debtor. Reeves Development said in court papers it has selected Steffes Vingiello because (i) the firm has filed the initial papers and pleadings on behalf of the Debtor, and has gained experience regarding the Debtor's business and property by preparing and filing the petition and other initial pleadings; and, (ii) the Debtor believes the law firm is well qualified to represent the Debtor. Steffes Vingiello also is serving as proposed bankruptcy counsel for an affiliate of the Debtor in the Chapter 11 case filed by Reeves Commercial Properties, LLC. Reeves Development said there is indebtedness due by the affiliate to the Debtor but that indebtedness is subordinate to the claims of IberiaBank and other creditors in that case. Steffes Vingiello also has represented IberiaBank, the largest secured creditor of the Debtor, in an unrelated foreclosure proceeding in East Baton Rouge Parish. That matter is near conclusion and poses no conflict with the Debtor or the estate. To the best of the Debtor's knowledge and belief, Steffes Vingiello has no other connection with the Debtor, its creditors, its respective attorneys and accountants, the U.S. Trustee or any person employed in the office of the U.S. Trustee or any other party in interest. About Reeves Development Reeves Development Company, LLC, a commercial and residential real estate developer, filed a Chapter 11 petition (Bankr. W.D. La. Case No. 12-21008) in Lake Charles, Louisiana, on Oct. 30, 2012. The closely held developer was founded in 1998 by Charles Reeves Jr., its sole owner. Reeves Development has about 80 employees and generates about $40 million in annual revenue, according to its Web site. Bankruptcy Judge Robert Summerhays oversees the case. Steffes, Vingiello & McKenzie, LLC, in Baton Rouge, serves as the Debtor's counsel. Reeves Development estimated assets and debts of $10 million to $50 million. Affiliate Reeves Commercial Properties, LLC (Bankr. W.D. La. Case No. 12-21009) also sought court protection. REEVES DEVELOPMENT: Sec. 341 Creditors' Meeting Set for Dec. 6 -------------------------------------------------------------- The Office of U. S. Trustee in Shreveport, Louisiana, will hold a Meeting of Creditors under 11 U.S.C. Sec. 341(a) in the Chapter 11 cases of Reeves Development LLC and affiliate Reeves Commercial Properties, LLC, on Dec. 6, 2012, at 9:00 a.m. at 341 Meeting, 1st Courtroom, in Lake Charles. About Reeves Development Reeves Development Company, LLC, a commercial and residential real estate developer, filed a Chapter 11 petition (Bankr. W.D. La. Case No. 12-21008) in Lake Charles, Louisiana, on Oct. 30, 2012. The closely held developer was founded in 1998 by Charles Reeves Jr., its sole owner. Reeves Development has about 80 employees and generates about $40 million in annual revenue, according to its Web site. Bankruptcy Judge Robert Summerhays oversees the case. Steffes, Vingiello & McKenzie, LLC, in Baton Rouge, serves as the Debtor's counsel. Reeves Development estimated assets and debts of $10 million to $50 million. Affiliate Reeves Commercial Properties, LLC (Bankr. W.D. La. Case No. 12-21009) also sought court protection. REEVES DEVELOPMENT: Status Conference Slated for April 2013 ----------------------------------------------------------- The Bankruptcy Court set a Status Conference in the Chapter 11 cases of Reeves Development LLC and affiliate Reeves Commercial Properties, LLC, for April 11, 2013, at 10:30 a.m. at Courtroom, 1st Floor, Lake Charles. About Reeves Development Reeves Development Company, LLC, a commercial and residential real estate developer, filed a Chapter 11 petition (Bankr. W.D. La. Case No. 12-21008) in Lake Charles, Louisiana, on Oct. 30, 2012. The closely held developer was founded in 1998 by Charles Reeves Jr., its sole owner. Reeves Development has about 80 employees and generates about $40 million in annual revenue, according to its Web site. Bankruptcy Judge Robert Summerhays oversees the case. Steffes, Vingiello & McKenzie, LLC, in Baton Rouge, serves as the Debtor's counsel. Reeves Development estimated assets and debts of $10 million to $50 million. Affiliate Reeves Commercial Properties, LLC (Bankr. W.D. La. Case No. 12-21009) also sought court protection. RESERVE PRIMARY: NY Jury Clears 2 Fund Managers of Fraud -------------------------------------------------------- The Wall Street Journal's Kirsten Grind and Julie Steinberg report that a seven-member federal jury cleared two former money-market mutual-fund managers -- Bruce Bent Sr., 75 yrs. old, and his son, Bruce Bent II, 46, co-managers of the $62 billion Reserve Primary fund -- of fraud charges after a four-week civil trial in the U.S. District Court for the Southern District in Manhattan. The report recounts the Securities and Exchange Commission in 2009 sued Bruce Bent Sr. and his son, alleging they misled investors, regulators and the fund's trustees about their intent to shore up the fund's portfolio as clients were fleeing. Reserve Primary ran into trouble after investing heavily in Lehman Brothers Holdings Inc. debt securities. Lehman filed for bankruptcy protection in September 2008, making the securities virtually worthless. The fund, then one of the largest in the U.S., "broke the buck" in September 2008 by falling under the $1-a-share value that money funds seek to maintain. The surprise loss sparked a panic that spread to other funds and eased only after the U.S. government backstopped the entire money-fund industry. Money funds are generally considered safe investments. "We're very pleased," said Mr. Bent II following the verdict, according to the report. Mr. Bent Sr. is ill with pneumonia and wasn't in court, the report notes. WSJ relates the jury, however, found Mr. Bent II liable on one claim of negligence for his role in communicating with investors. The jury also found the fund's investment adviser, Reserve Management Co., liable for two claims of fraud and one claim of negligence. The company's broker-dealer distribution arm was found liable for one claim of fraud. "T[he] verdict of liability sends the message that fund executives cannot withhold from investors and trustees key information about their fund's vulnerability," said Robert Khuzami, SEC director of enforcement, in a statement, according to WSJ. "This case, along with our actions against more than 100 other entities and individuals, demonstrates our continuing commitment to pursuing cases arising out of the financial crisis." WSJ relates the penalties, to be determined at a later hearing, are likely to be small. Mr. Bent II's penalty could run in the tens of thousands of dollars, said Adam Pritchard, a corporate and securities law professor at the University of Michigan Law School. A spokesman for the Bents said they are considering appealing the negligence decision. Reserve Primary's penalty also is likely to be small, Mr. Pritchard said. The firm was wound down following the financial crisis, and fund investors have since received about 99 cents on the dollar. The fund still has $99 million in assets. WSJ also notes a lawsuit on behalf of investors seeking class- action status, filed in 2009, is moving forward, said John Browne, the lead lawyer for the plaintiffs. According to WSJ, Mr. Bent Sr. is widely considered to be the father of the money-market fund. He launched Reserve Primary in 1970, and it grew to be among the largest in the U.S. Now he is largely retired, although he and his son operate a patent- licensing business out of their homes. Mr. Bent II works occasionally on a livestock farm in upstate New York. REX ENERGY: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to State College, PA-based Rex Energy Corp. The outlook is stable. "We also assigned our 'B-' issue-level rating (one notch lower than the corporate credit rating) to Rex's planned $250 million senior unsecured notes due 2020. We assigned this debt a '5' recovery rating, indicating our expectation of modest (10% to 30%) recovery in the event of a payment default," S&P said. Rex is using proceeds from the offering to pay down borrowings under its credit facility and its second-lien term loan ($122 million and $50 million, respectively, outstanding as of Sept. 30, 2012) and to fund 2013 capital expenditures. "The ratings on Rex Energy Corp. (Rex) reflect our assessment of the company's 'vulnerable' business risk profile and its 'highly leveraged' financial risk," said credit analyst Marc Bromberg. "The ratings incorporate the company's relatively small size and scale, its limited geographic diversity, meaningful proportion of reserves and production exposed to weak natural gas prices, current lack of takeaway capacity, its relatively high cost base, a high proportion of riskier proved undeveloped reserves, and its participation in the capital-intensive and very cyclical exploration and production industry." "The stable outlook reflects our expectation that Rex will successfully develop its asset base in the Appalachian Basin. We expect that the company will maintain leverage near 3x and adequate liquidity for the next several years. An upgrade will require the development of its NGL and crude oil acreage. We could downgrade the company if we expect run rate leverage to exceed 4.75x, which could occur if Rex does not realize its production targets." ROCHA DAIRY: U.S. Trustee Balks at Plan Confirmation ---------------------------------------------------- Parties-in-interest in the Chapter 11 case of Rocha Dairy, LLC, filed with the U.S. Bankruptcy Court for the District of Idaho, objections to the confirmation of the Debtor's Second Amended Plan of Reorganization. U.S. Trustee Robert D. Miller, in his objection, stated that he reserves the right to examine witnesses and introduce exhibits into evidence at the hearing on confirmation of the Plan. The U.S. Trustee noted that the Plan is not feasible and, if confirmed, would likely be followed by liquidation or the need for further financial reorganization. The Official Unsecured Creditors Committee in the Debtor's case said that the unsecured creditors' class will not accept the Plan. The Plan fails to provide the unsecured creditors with an amount equal to what they would receive under a liquidation. The Committee added that payment over such a long period of time without interest does not satisfy the requirements of the absolute priority rule. Unsecured creditors are to receive the face value of their claims with no interest. Payments are to be amortized over twenty years. D.L. Evans Bank, a secured creditor and party-in-interest asserted that the Plan has not been proposed in good faith and the payments proposed are not reasonable. The Plan purports to pay D.L. Evans Bank over a term of 240 months, beyond the two year obligations contained in Debtor's Promissory Notes to D.L. Evans Bank. The Amended Plan The Court approved the Debtor's Second Amended Disclosure Statement and Plan dated Aug. 7, 2012. According to the Disclosure Statement, priority claims will be paid in full; secured debts will be paid to the extent of their values; unsecured debts will be paid (in a fair and equitable manner) to the extent the unsecured property of the estate reaches to those creditors or that the cash flow allows, and other properties will be disbursed and addressed as approved by the Court. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/ROCHA_DAIRY_ds_2amended.pdf About Rocha Dairy Based in Wendell, Idaho, Rocha Dairy, LLC, aka Rocha Farms, filed for Chapter 11 bankruptcy (Bankr. D. Idaho Case No. Case No. 11-40836) on May 25, 2011. Judge Jim D. Pappas presides over the case. Lawyers at Robinson, Anthon & Tribe serve as bankruptcy counsel to the Debtor. In its petition, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debts. The petition was signed by Elcidio Rocha, member. ROOMSTORE INC: Approved to Sell Mattress Discounters Stake ---------------------------------------------------------- Rachel Feintzeig at Dow Jones' DBR Small Cap reports that a judge cleared RoomStore Inc. to sell its stake in Mattress Discounters Group LLC after mattress giant Sleepy's Inc. prevailed at an auction with an $11.9 million bid. About RoomStore, Inc. With more than $300 million in net sales for its fiscal year ending 2010, Richmond, Virginia-based RoomStore, Inc., was one of the 30 largest furniture retailers in the United States. RoomStore also offers its home furnishings through Furniture.com, a provider of Internet-based sales opportunities for regional furniture retailers. RoomStore filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 11-37790) on Dec. 12, 2011, following store-closing sales at four of its retail stores, located in Hoover, Alabama; Fayetteville, North Carolina; Tallahassee, Florida; and Baltimore, Maryland. At the time of the filing, the Company operated a chain of 64 retail furniture stores, including both large-format stores and clearance centers in eight states: Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, Florida, Alabama, and Texas. It also had five warehouses and distribution centers located in Maryland, North Carolina, and Texas that service the Retail Stores. RoomStore also owns 65% of Mattress Discounters Group LLC, which operates 80 mattress stores (as of Nov. 30, 2011) in the states of Delaware, Maryland and Virginia and in the District of Columbia. RoomStore acquired the MDG stake after MDG's second bankruptcy in 2008. MDG sought Chapter 11 relief on Sept. 10, 2008 (Bankr. D. Md. Case Nos. 08-21642 and 08-21644). It filed the first Chapter 11 bankruptcy on Oct. 23, 2002 (Bankr. D. Md. Case No. 02-22330), and emerged on March 14, 2003. Judge Douglas O. Tice, Jr., presides over RoomStore's case. Lawyers at Lowenstein Sandler PC serve as the Debtor's bankruptcy counsel. Kaplan & Frank, PLC, serves as local counsel. FTI Consulting, Inc., serves as the Debtor's financial advisors and consultants. American Legal Claims Services, LLC, serves as its notice and claims agent. Lucy L. Thomson of Alexandria, Virginia, was appointed as consumer privacy ombudsman. RoomStore filed a plan of liquidation in June 2012 that provides for the sale of inventory and remaining assets to generate sufficient cash to pay secured and unsecured creditors in full. RoomStore's balance sheet at Nov. 30, 2011, showed $59.57 million in total assets, $57.75 million in total liabilities, and stockholders' equity of $1.82 million. The Debtor disclosed $44,624,007 in assets and $34,746,919 in liabilities as of the Chapter 11 filing. The petition was signed by Stephen Girodano, president and chief executive officer. Liquidator Hilco Merchant Resources, Inc., is represented in the case by Gregg M. Galardi, Esq., at DLA Piper LLP (US); and Robert S. Westermann, Esq., and Sheila de la Cruz, Esq., at Hirschler Fleischer, P.C. The U.S. Trustee for Region 4 named seven members to the official committee of unsecured creditors in the case. The Creditors Committee tapped Hunton & Williams LLP as its counsel. RW LOUISVILLE: Buyer Backs Out; Wells Fargo to Own Hotel -------------------------------------------------------- Kevin Eigelbach at Business First reports that M&T Equity LLC, the winning bidder in the foreclosure sale of the former Holiday Inn Hurstbourne didn't end up purchasing the property, and now it has reverted to Wells Fargo Bank NA. According to the report, M&T Equity has assigned its bid to the bank, which means the bank now owns the property, said deputy Jefferson County commissioner Cindy Rollins. M&T Equity made the winning bid of $11 million at an auction held Sept. 4, 2012, by the Jefferson County master commissioner's office. M&T put down a deposit of $10,000 the day of sale but never paid any more toward the purchase price. The report says the change in ownership should not affect business at the hotel, which changed its name to Holiday Inn Louisville East last year, said general manager Mike Towle, who works for HILO Associates LLC, a subsidiary of Philadelphia-based GF Management. About RW Louisville Louisville, Kentucky-based RW Louisville Hotel Associates, LLC, aka Holiday Inn Hurstbourne, owns a hotel property located at 1325 South Hurstbourne Parkway, Louisville, Kentucky. It is an independent franchisee of InterContinental Hotels Group and operates a 271-room full-service Holiday Inn on the Real Property and employs approximately 110 employees. RW Louisville filed for Chapter 11 protection (Bankr. W.D. Ky. Case No. 10-35356) on Oct. 8, 2010. Emily Pagorski, Esq., J. Kent Durning, Esq., James S. Goldberg, Esq., Lea Pauley Goff, Esq., and Matthew R. Lindblom, Esq., at Stoll Keenon Ogden PLLC, in Louisville, Ky., assist RW Louisville in its restructuring effort. RW Louisville estimated its assets and debts at $10 million to $50 million at the Petition Date. SAAB CARS: Ally's Liquidation Plan Would Be Unnecessary, Saab Says ------------------------------------------------------------------ Stewart Bishop at Bankruptcy Law360 reports that Saab Cars North America Inc. on Thursday lodged an objection to Ally Financial Inc.'s move to examine current and former directors of the carmaker, saying the lender is just seeking cover to file a competing liquidation plan, which SCNA claims is unnecessary. SCNA brought its objection in Delaware bankruptcy court, arguing that Ally's actions are pointless since as an unimpaired creditor under the present reorganization plan, Ally is set to recover 100 percent of its allowed secured claim, according to Bankruptcy Law360. About Saab Cars N.A. More than 40 U.S.-based Saab dealerships have signed an involuntary chapter 11 bankruptcy petition for Saab Cars North America, Inc., (Bankr. D. Del. Case No. 12-10344) on Jan. 30, 2012. The petitioners, represented by Wilk Auslander LLP, assert claims totaling $1.2 million on account of "unpaid warranty and incentive reimbursement and related obligations" and/or "parts and warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia Gentile & Associates, in New York, signed the Chapter 11 petition on behalf of the dealers. Donlin, Recano & Company, Inc. (DRC), has been retained to provide claims and noticing agent services to Saab Cars North America, Inc. in its Chapter 11 case. The dealers want the vehicle inventory and the parts business to be sold, free of liens from Ally Financial Inc. and Caterpillar Inc., and "to have an appropriate forum to address the claims of the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg News. Saab Cars N.A. is the U.S. sales and distribution unit of Swedish car maker Saab Automobile AB. Saab Cars N.A. named in December an outside administrator, McTevia & Associates, to run the company as part of a plan to avoid immediate liquidation following its parent company's bankruptcy filing. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy on Dec. 19, 2011, after running out of cash. On Feb. 24, 2012, the Court, inconsideration of the petition filed on Jan. 30, 2012, granted Saab Cars North America, Inc., relief under Chapter 11 of the Bankruptcy Code. On March 9, 2012, the U.S. Trustee formed an official Committee of Unsecured Creditors and appointed these members: Peter Mueller Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander LLP as general bankruptcy counsel, and Polsinelli Shughart as its Delaware counsel. SABA BUILDING: Case Summary & 2 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: SABA Building Co. 9725B Anderson Mill Road Austin, TX 78750 Bankruptcy Case No.: 12-12518 Chapter 11 Petition Date: November 5, 2012 Court: U.S. Bankruptcy Court Western District of Texas (Austin) Judge: H. Christopher Mott Debtor's Counsel: Jerome Andrew Brown, Esq. THE BROWN LAW FIRM P.O. Box 1667 Victoria, TX 77902 Tel: (361) 579-6700 Fax: (361) 485-0465 E-mail: Jerome@txbizlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $100,001 to $500,000 A copy of the Company's list of its two largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txwb12-12518.pdf The petition was signed by Esmaiel M. Rowshan, president. SADDLEBACK INN: Santa Ana Seeks Receivership -------------------------------------------- The Orange County Register News reports that Santa Ana, California, has sued to place the long-abandoned Saddleback Inn property under a receiver who would see to it that repairs are made to fix what the city has for years contended are unsafe conditions. Named as defendants are Saddleback Inn LLC, which holds a leasehold interest in the property on which the old inn sits, and the Elks Building Association of Santa Ana, which owns the 2.4- acre parcel on which the four hotel buildings sit, according to the report. The parcel is adjacent to the Santa Ana Elks Lodge. The report notes that the Orange County Register news relates that the lawsuit lists 23 problems that the city contends are dangerous. The report relates that they include water damage, rotting wood, rusting metal, damaged walls, broken windows, vagrants and extensive fire damage. It listed violation notices that date to 1994. The Orange County Register news relays that last year, fire caused extensive damage to a building on the south side of the property, turning it into "a significant hazard," the suit said. The report notes that an Orange County judge in April ordered Santa Ana to allow the owners of the long-closed Saddleback Inn the option to repair the property after the city ordered the once- popular inn demolished. The Orange County Register news says that in emails sent during the summer, Kevin Jones, an attorney representing Saddleback Inn's owners and general counsel of J.K. Residential Services, said his client had been working with developers on a plan to turn the hotel into low-income senior housing, but that the city rejected the concept in a July 24 meeting, the report adds. SAGAMORE PARTNERS: Taps Goldstein Mendez for Accounting Services ---------------------------------------------------------------- Sagamore Partners, Ltd., asks the U.S. Bankruptcy Court for the Southern District of Florida for permission to employ Louis Mendez, Jr. and The Accounting Firm of Goldstein Mendez & Company, P.A., nunc pro tunc to Oct. 6, 2011. The accountant will render, among other things: a) federal income tax preparation for the year 2011; b) florida income tax and tangible tax preparation, if necessary; and c) consultations regarding financial reporting, if necessary. The Debtor proposes to compensate Mr. Mendez and MCPA on an hourly basis for services at these standard hourly rates: Partner $390 Manager $250 Supervisor $220 Senior Staff $190 Staff $160 Bookkeeper $125 Administrative $65 Prepetition, Mr. Mendez and MCPA performed services on behalf of the Debtor. The Debtor scheduled an unsecured claim in the amount of $3,200. MCPA has agreed to waive its prepetition claim. To the best of the Debtor's knowledge, Mr. Mendez and MCPA are "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Sagamore Partners Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and operates the oceanfront Sagamore Hotel, also known as The Art Hotel due to its captivating art collection from recognized artists and its contemporary design. The all-suite boutique hotel is situated within Miami's Art Deco Historic District on South Beach. Sagamore Partners is owned by Martin Taplin. Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol presides over the case. Joshua W. Dobin, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla., serve as the Debtor's counsel. The Debtor disclosed $71,099,556 in assets and $52,132,849 in liabilities as of the Chapter 11 filing. In its latest schedules, the Debtor disclosed $67,963,210 in assets and $52,060,862 in liabilities. The petition was signed by Martin W. Taplin, president of Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC, general partner. The Debtor has requested for an extension in its solicitation period. Bankruptcy Judge A. Jay Cristol denied approval of the disclosure statement explaining its Plan of Reorganization. Pursuant to the Plan, the Debtor proposes to reinstate the maturity date of its loan with JPMCC 2006-LDP7 Miami Beach Lodging, with interest from the Effective Date of the Plan at the loan's non-default interest rate; and cure monetary defaults under the Loan by paying the Secured Lender unpaid interest which has accrued on the Loan at the Interest Rate, but not interest which has accrued on the Loan at the Default Rate. The U.S. Trustee will not appoint an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Sagamore Partners Ltd until further notice. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. SAGAMORE PARTNERS: Taps Meckler Bulger as Fees Expert ----------------------------------------------------- Sagamore Partners, Ltd., asks the U.S. Bankruptcy Court for the Southern District of Florida for permission to employ Bruce Meckler, Esq., and the Law Firm of Meckler Bulger Tilson Marick & Pearson LLP as expert relating to the reasonability of fees. Mr. Meckler and the firm will not be paid by the Debtor but will be paid by Martin W. Taplin, president of Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC, general partner. Bruce Meckler, Esq., a partner at the firm, tells the Court that the firm holds no prepetition unsecured claims. To the best of the Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Sagamore Partners Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and operates the oceanfront Sagamore Hotel, also known as The Art Hotel due to its captivating art collection from recognized artists and its contemporary design. The all-suite boutique hotel is situated within Miami's Art Deco Historic District on South Beach. Sagamore Partners is owned by Martin Taplin. Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol presides over the case. Joshua W. Dobin, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla., serve as the Debtor's counsel. The Debtor disclosed $71,099,556 in assets and $52,132,849 in liabilities as of the Chapter 11 filing. In its latest schedules, the Debtor disclosed $67,963,210 in assets and $52,060,862 in liabilities. The petition was signed by Martin W. Taplin, president of Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC, general partner. The Debtor has requested for an extension in its solicitation period. Bankruptcy Judge A. Jay Cristol denied approval of the disclosure statement explaining its Plan of Reorganization. Pursuant to the Plan, the Debtor proposes to reinstate the maturity date of its loan with JPMCC 2006-LDP7 Miami Beach Lodging, with interest from the Effective Date of the Plan at the loan's non-default interest rate; and cure monetary defaults under the Loan by paying the Secured Lender unpaid interest which has accrued on the Loan at the Interest Rate, but not interest which has accrued on the Loan at the Default Rate. The U.S. Trustee will not appoint an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Sagamore Partners Ltd until further notice. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. SAGAMORE PARTNERS: Taps Mack Law, et al., as Litigation Counsel --------------------------------------------------------------- Sagamore Partners, Ltd., asks, in an amended application, the U.S. Bankruptcy Court for the Southern District of Florida for permission to employ Jacqulyn Mack, Esq. and The Mack Law Firm Chartered as special litigation counsel. In a separate filing, the Debtor also asks the Court for permission to employ Neal L. Sandberg, Esq. and the law firm of Simon, Schindler & Sandberg, L.L.P. as special litigation counsel. The firms will represent the Debtor as special litigation counsel in Adversary Proceeding Case No. 11-03122-AJC to appear at depositions, hearings or trial. The retentions will act as supplementary counsel for the Debtor as to all litigation matters raised in the AP. Ms. Mack's hourly rate is $400. Associates, assistants and paralegals at her firm are billed at hourly rates ranging from $150 -$175. Mr. Sandberg's hourly rate is $450. Associates, assistants and paralegals at his firm are billed at hourly rates ranging from $150 to $325. To the best of the Debtor's knowledge, the firms do not represent any interest adverse to the Debtor or the Debtor's estate. About Sagamore Partners Bay Harbor, Florida-based Sagamore Partners, Ltd., owns and operates the oceanfront Sagamore Hotel, also known as The Art Hotel due to its captivating art collection from recognized artists and its contemporary design. The all-suite boutique hotel is situated within Miami's Art Deco Historic District on South Beach. Sagamore Partners is owned by Martin Taplin. Sagamore Partners filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 11-37867) on Oct. 6, 2011. Judge A. Jay Cristol presides over the case. Joshua W. Dobin, Esq., and Peter D. Russin, Esq., at Meland Russin & Budwick, P.A., in Miami, Fla., serve as the Debtor's counsel. The Debtor disclosed $67,963,210 in assets and $52,060,862 in liabilities as of the Chapter 11 filing. The petition was signed by Martin W. Taplin, Pres of Miami Beach Vacation Resorts, Inc., manager of Sagamore GP, LLC, general partner. The Debtor has requested for an extension in its solicitation period. Bankruptcy Judge A. Jay Cristol denied approval of the disclosure statement explaining its Plan of Reorganization. Pursuant to the Plan, the Debtor proposes to reinstate the maturity date of its loan with JPMCC 2006-LDP7 Miami Beach Lodging, with interest from the Effective Date of the Plan at the loan's non-default interest rate; and cure monetary defaults under the Loan by paying the Secured Lender unpaid interest which has accrued on the Loan at the Interest Rate, but not interest which has accrued on the Loan at the Default Rate. SAHARA MOTEL: Case Summary & Unsecured Creditor ----------------------------------------------- Debtor: Sahara Motel, LLC 510 East 18th Avenue North Wildwood, NJ 08260 Bankruptcy Case No.: 12-36557 Chapter 11 Petition Date: November 7, 2012 Court: U.S. Bankruptcy Court District of New Jersey (Camden) Judge: Judith H. Wizmur Debtor's Counsel: Brian W. Hofmeister, Esq. TEICH GROH 691 State Highway 33 Trenton, NJ 08844 Tel: (609) 890-1500 E-mail: bhofmeister@teichgroh.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Adele Balestra, managing member. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ 510 East 18th Avenue 510 East 18th $1,478,000 c/o Kelly Botti, Esq. Avenue, Hill Wallack North Wildwood, 202 Carnegie Center NJ 08260 Princeton, NJ 08540 SANTA FE GOLD: Incurs $2.4-Mil. Net Loss in Q1 Ended Sept. 30 ------------------------------------------------------------- Santa Fe Gold Corporation filed its quarterly report on Form 10-Q, reporting a net loss of $2.4 million on $5.9 million of sales for the three months ended Sept. 30, 2012, compared with net income of $702,862 on $2.6 million of sales for the comparable period a year earlier. Other income and (expenses) for the three months ended Sept. 30, 2012, were $(1,408,992) as compared to $1,925,240 for the comparable three months ended Sept. 30, 2011. "The decrease of $3,334,232 is primarily attributable to the decrease gain recognized on derivative instruments liability of $3,739,892 and an increase in interest expense of $141,576, and was offset by a decrease in accretion of discounts on notes payable of $549,985. The Company's balance sheet at Sept. 30, 2012,showed $33.2 million in total assets, $23.5 million in total liabilities, and stockholders' equity of $9.7 million. The Company has a working capital deficit of $16.1 million and has a total accumulated deficit of $664 million at Sept. 30, 2012. A copy of the Form 10-Q is available at http://is.gd/ZdWqLP Albuquerque, New Mexico-based Santa Fe Gold Corporation is a U.S. mining company incorporated in Delaware in August 1991. Its general business strategy is to acquire, explore and develop mineral properties. The Company's principal assets are the 100% owned Summit silver-gold project in New Mexico, the leased Ortiz gold property in New Mexico, and the 100% owned Black Canyon mica project in Arizona. * * * StarkSchenkein, LLP, in Denver, expressed substantial doubt about San Fe Gold's ability to continue as a going concern, following its audit of the Company's financial statements for the fiscal year ended June 30, 2012. The independent auditors noted that the Company has suffered recurring losses from operations, has a working capital deficiency and needs to secure additional financing to remain a going concern. SATCON TECHNOLOGY: Seeks to Delay Auction to March From January --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Satcon Technology Corp. has an agreement for credit from its primary supplier and intends to push the sale of the business back to early March from the current Jan. 15 deadline contained in the authorization for using lenders' cash collateral. The report notes there is no financing for Satcon's bankruptcy. Instead, Satcon is using cash representing collateral for $21.2 million in secured debt. The report relates China Great Wall Computer Shenzhen Co. makes 90% of the products and sub-assemblies used in Satcon's products. Without goods from Great Wall, Satcon said in a court filing it would be unable to operate the business. At the outset of bankruptcy, Great Wall was owed $26 million and said it was unwilling to incur more exposure. To assure a continuing supply of goods, Satcon agreed to make payments and allow offsets in favor of Great Wall, so the debt would be reduced to about $18.7 million. In return, Great Wall will supply $8.2 million in trade credit through March, provided that the debt is secured with a lien coming ahead of all secured creditors. According to the report, at a hearing Nov. 15 for another extension of the ability to use cash, Satcon will seek to extend the auction deadline to March from January. The lenders so far haven't agreed, nor did they agree to giving Great Wall a so- called priming lien. 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. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. In the past three years, the stock closed to a high of $43.92 on Jan. 18, 2011. The day before bankruptcy, the stock closed at 35 cents. On Nov. 7, the stock fell 14% to close at 17.5 cents on the Nasdaq Stock Market. SATCON TECHNOLOGY: Taps Epiq Bankruptcy as Administrative Agent --------------------------------------------------------------- Satcon Technology Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ Epiq Bankruptcy Solutions, LLC as administrative advisor. The Court has authorized the Debtors to employ Epiq as claims and noticing agent in the cases. As administrative advisor, Epiq will, among other things: a. assist with, among other things, solicitation, balloting and tabulation and calculation of votes, well as preparing any appropriate reports, as required in furtherance of confirmation of plan(s) of reorganization; b. generate an official ballot certification and testifying, if necessary, in support of the ballot tabulation results; and c. gather data in connection with the preparation, and assist with the preparation, of the Debtors' schedules of assets and liabilities and statement of financial affairs. To the best of the Debtor's knowledge, Epiq does not hold or represent any interest adverse to the Debtors, their estates or any class of creditors or equity interest holders with respect to the matters upon which it is to be engaged. A Nov. 15, 2012, hearing at 10 a.m., has been set. 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. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. SATCON TECHNOLOGY: Taps Greenberg Traurig as Bankruptcy Counsel --------------------------------------------------------------- Satcon Technology Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to employ the law firm of Greenberg Traurig, LLP as counsel. The hourly rates of Greenberg Traurig's personnel are: Nancy A. Mitchell $955 Maria J. DiConza $810 Dennis A. Meloro $530 Burke Dunphy $480 Matthew L. Hinker $460 Sohyoung Ward $460 Shannon M. Thompson $320 Elizabeth Thomas, paralegal $245 Other attorneys and paralegals will render services to the Debtors as needed. Generally Greenberg Traurig's hourly rates are: Shareholders $350 - $1,100 Of Counsel $230 - $1,010 Associates $120 - $720 Legal Assistants/Paralegals $50 - $320 Prepetition, Greenberg Traurig received from the Debtors various advance retainers totaling $225,00. Greenberg Traurig does not hold any retainer for postpetition fees or expenses. To the best of the Debtors' knowledge, Greenberg Traurig is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. A Nov. 15, 2012, hearing at 10 a.m. has been set. 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. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. SATCON TECHNOLOGY: Wants Vendor Claims Capped at $6 Million ----------------------------------------------------------- Satcon Technology Corporation, et al., ask the U.S. Bankruptcy Court for the District of Delaware for permission to pay all or a portion of the prepetition claims certain critical vendors; and authorize financial institutions to honer and process related check and transfers. According to the Debtors, the relief requested in the motion would have the effect of modifying the vendor claim caps provided in the interim critical vendor order to, up to total of $2,500,000 on an interim basis and up to a total of $6 million on a final basis. 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. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. SATCON TECHNOLOGY: Delays Q3 Form 10-Q Due to Bankruptcy Filing --------------------------------------------------------------- Satcon Technology Corporation filed a Form 12b-25 with the U.S. Securities and Exchange Commission notifying that it will not be able to file its quarterly report on Form 10-Q for the period ended Sept. 30, 2012, in a timely manner. The Company's bankruptcy filing has resulted in a severe reduction in its workforce and the Company has devoted substantially all of its remaining resources to the Bankruptcy Case. The Company is currently in the process of determining what impact the conditions that gave rise to the bankruptcy case have had on its financial condition and results of operations. "As a result of senior management's preparation of the bankruptcy filing and the demands the Bankruptcy Case has placed on the Company's available personnel and limited resources, the Company cannot reasonably estimate the results of operations for the quarterly period ended Sept. 30, 2012," the Company said in a regulatory filing. 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. An official committee of unsecured creditors has not yet been appointed in these cases by the Office of the United States Trustee. In the past three years, the stock's high of $43.92 on Jan. 18, 2011. The day before bankruptcy, the stock closed at 35 cents. On Nov. 7, the stock fell 14% to close at 17.5 cents on the Nasdaq Stock Market. SAUNDERS RUDASILL: Court Prefers Lender's 100% Plan Over Debtor's ----------------------------------------------------------------- Bankruptcy Judge Eileen W. Hollowell accepted the plan of reorganization filed by the lender for Saunders Rudasill Hotel, LLC, instead of the Debtor's own plan. The judge said the Lender's Plan should be confirmed because it satisfies all of the required elements of 11 U.S.C. Sec. 1129 and provides for the best interests of creditors. The Lender's proposed 100% payment with interest offers better treatment to all creditors than the Debtor's proposal, which offers extended payment terms and exposes the Lender (the largest creditor) to an unacceptable level of risk. The lender, WBCMT 2006-C27 Rudasill Road, LLC, acquired the promissory note evidencing a $7,145,000 loan the Debtor took out to finance the purchase of the Hotel. The Note is secured by the Hotel and all of its rents, proceeds, and profits pursuant to a deed of trust and an assignment of rents. Saunders Rudasill Hotel LLC filed a Chapter 11 voluntary petition (Bankr. D. Ariz. Case No. 11-16202) on June 3, 2011. Eric Slocum Sparks, Esq., serves as the Debtor's counsel. Saunders Rudasill owns the Marriott Towne Place, Tucson, Arizona. The Debtor is primarily owned by NCH Corporation and the HF Saunders Company, LLC, both of which are owned and controlled by Michael Hanson and Randall Dix. The Hotel is managed by Transwest Properties, Inc., which is also owned by Mr. Hanson (45%) and Mr. Dix (35%). In its petition, the Debtor scheduled $5,480,006 in assets and $6,857,098 in debts. The Debtor's First Amended Plan, filed March 2, 2012, groups claimants in 12 classes. The Lender was the only creditor that rejected Debtor's Plan. However, the Lender is the largest creditor by an overwhelming amount; its claim represents 98% of the total claims in the case. The Court held a confirmation hearing on the Debtor's Plan on July 30 and 31, 2012. The key provisions of the Debtor's Plan provide that: (a) HSL Properties, Inc., will invest $1,000,000 of new capital into the Debtor in exchange for 100% ownership of the Reorganized Debtor; (b) HSL will receive a 12% return on the New Capital for so long as payments to the Lender and other creditors are made; (c) the Lender will receive payments on the secured portion of its claim over a 23-year period at 5% interest amortized over 30 years, with the first three years of payments interest only; (d) other secured creditors with liens on property with residual value will receive the current market value of their claims in 60 equal monthly installments at 5% interest; (e) Transwest will be retained to manage the Hotel and receive a management fee subordinate to the return on the New Capital; and (f) unsecured creditors will receive pro-rata distributions from a pool of $25,000, 5% of the Reorganized Debtor's net cash for 10 years, and any estate representative distributions. The Debtor failed to file and confirm a reorganization plan during the exclusivity period provided by 11 U.S.C. Sec. 1121(b). As a result, the Lender filed a competing plan on July 25, 2012 and Non-Adverse Modifications on Oct. 3, 2012. The Debtor filed an objection to the Lender's Plan on Sept. 19, 2012. The Court held a confirmation hearing on the Lender's Plan on Sept. 26, 2012 and took the matter under submission. The Lender will satisfy its own claim by transferring title of the Hotel and its encumbered assets to Lender or a designated transferee and retaining a different hotel-management company than Transwest to operate the Hotel. The Lender's Plan anticipates that the new hotel-management company will retain most of the current Hotel employees other than the top managers. Under both the Debtor's and the Lender's Plans, the existing equity holders would be replaced. A copy of the Court's Nov. 9, 2012 Memorandum Decision on Plan Confirmation is available at http://is.gd/yUpdJbfrom Leagle.com. SAUNDERS HOTELS: Court Prefers Lender's 100% Plan Over Debtor's --------------------------------------------------------------- Bankruptcy Judge Eileen W. Hollowell denied confirmation of the First Amended Chapter 11 Plan filed by Saunders Hotels, LLC. Instead, the Court accepted the plan presented by the Debtor's lender, which provided for payment, in full, plus interest to all creditors. The lender, WBCMT 2006-C27 Oracle Road, LLC, acquired the promissory note evidencing a $10,020,000 loan the Debtor took out to purchase the Hotel. The Note is secured by the Hotel and all of its rents, proceeds, and profits pursuant to a deed of trust and an assignment of rents. The Court noted that the Debtor's proposal offers extended payment terms and exposes the Lender, which is the largest creditor in the case, to an unacceptable level of risk. Under both the Debtor's and the Lender's Plans, the existing equity holders would be replaced. Saunders Hotels filed a Chapter 11 voluntary petition (Bankr. D. Ariz. Case No. 11-16203) on June 3, 2011. Saunders Hotels owns the Hampton Inn & Suites Tucson Mall, Tucson, Arizona. The Debtor is primarily owned by NCH Corporation and the HF Saunders Company, LLC, both of which are owned and controlled by Michael Hanson and Randall Dix. The Hotel is managed by Transwest Properties, Inc., which is also owned by Mr. Hanson (45%) and Mr. Dix (35%). Eric Slocum Sparks, Esq., serves as the Debtor's counsel. The Debtor scheduled $5,235,962 in assets and $9,710,968 in liabilities. Saunders Hotels' First Amended Plan, filed March 2, 2012, groups claimants in 12 classes. The Lender was the only creditor that rejected Debtor's Plan. However, Lender is the largest creditor by an overwhelming amount; its claim represents 98% of the total claims in the case. The Court held a confirmation hearing on Debtor's Plan on July 30 and 31, 2012. The key provisions of Debtor's Plan provide that: (a) HSL Properties, Inc., will invest $400,000 of new capital into the Debtor in exchange for 100% ownership of the Reorganized Debtor; (b) HSL will receive a 12% return on the New Capital for so long as payments to the Lender and other creditors are made; (c) the Lender will receive payments on the secured portion of its claim over a 23-year period at 5% interest amortized over 30 years, with the first three years of payments interest only; (d) other secured creditors with liens on property with residual value will receive the current market value of their claims in 60 equal monthly installments at 5% interest; (e) Transwest will be retained to manage the Hotel and receive a management fee subordinate to the return on the New Capital; and (f) unsecured creditors will receive pro-rata distributions from a pool of $25,000, 5% of the Reorganized Debtor's net cash for 10 years, and any estate representative distributions. The Court noted that the Debtor failed to file and confirm a reorganization plan during the exclusivity period provided by 11 U.S.C. Sec. 1121(b). As a result, the Lender filed a competing plan on July 25, 2012 and Non-Adverse Modifications on Oct. 3. The Debtor filed an objection to the Lender's Plan on Sept. 19. The Court held a confirmation hearing on the Lender's Plan on Sept. 26 and took the matter under submission. The Lender's Plan is a 100% plan which will pay all creditors in full with interest. The Lender will satisfy its own claim by transferring title of the Hotel and its encumbered assets to the Lender or a designated transferee and retaining a different hotel- management company than Transwest to operate the Hotel. Its Plan anticipates the new hotel-management company will retain most of the current Hotel employees other than the top managers. A copy of the Court's Nov. 9, 2012 Memorandum Decision on Plan Confirmation is available at http://is.gd/YHpcu6from Leagle.com. SEAFRANCE SA: Eurotunnel Wins OK on EUR65M Channel Ferry Buy ------------------------------------------------------------ Bill Donahue at Bankruptcy Law360 reports that France's competition watchdog said Thursday it had given the green light to Groupe Eurotunnel SA's EUR65 million ($84 million) acquisition of three English Channel ferries from the now-liquidated ferry operator SeaFrance SA, after Eurotunnel promised to keep separate its rail and ferry units. Bankruptcy Law360 relates that the French Competition Authority approved the deal on the grounds that Eurotunnel -- which operates the Channel Tunnel between the U.K. and France -- does not try to force or persuade Chunnel freight customers to use its new MyFerryLink service, or vice versa. SeaFrance is the operator of the undersea rail link between Britain and continental Europe. The Commercial Court in Paris has ordered the full liquidation of SeaFrance on the Jan. 9, 2012. As a result, the company is no longer able to trade. SEARCHMEDIA HOLDINGS: Shirley Liu Named Chief Financial Officer --------------------------------------------------------------- SearchMedia Holdings Limited appointed Shirley Liu as Chief Financial Officer, effective Nov. 15, 2012. Ms. Liu brings to SearchMedia over 20 years of auditing and financial management experience, including the last 11 years in the Greater China media industry. Ms. Liu joins SearchMedia from Aegis Group, a subsidiary of Dentsu (Tokyo Stock Exchange: "4324"), where she was Chief Financial Officer of Greater China since 2010. Dentsu is the largest media advertising agency in Asia. At Aegis Group, Ms. Liu partnered with other members of senior management to ensure that its annual budgets were met while also ensuring timely reporting of financial reports and audits. In addition, Ms. Liu was actively involved with the management of advertising clients. Prior to Aegis Group, she was an executive with GroupM from 2001 to 2010, including serving as the Chief Financial Officer of China and Taiwan. GroupM is a subsidiary of WPP, the largest advertising company in the world. At GroupM, Ms. Liu oversaw its overall financial operations, including supervising 100 accountants in three cities and also helped manage business development activities. Ms. Liu has extensive experience in financial oversight with GAAP, SOX compliance, implementing operational efficiencies, risk management and corporate acquisitions and financial integration. Ms. Liu possesses an undergraduate degree from the Ming Chung College in Taiwan with a major in Accounting and Statistics and an Executive Masters of Business Administration from Tulane University. Mr. Peter Tan, chief executive officer of SearchMedia, commented, "We are very excited to add Shirley Liu to our executive team and I believe Shirley will be critical to the implementation of our recently announced new concessions with Home Inns and our Luxury Mall LCD network and will play a pivotal role in the systematic scalability of our concessions and our acquisition strategy. As we materially expand our operations, it is crucial to have an executive like Shirley who has great experience overseeing large advertising operations in China in addition to integrating acquisitions. I am thrilled that we are able to attract such great talent to our team and that Shirley shares my vision for the future of the Company. I would also like to thank Peter Chan for serving as Interim Chief Finance Officer." Ms. Liu added, "I am extremely excited to join SearchMedia. I have been deeply involved with the growth of the Chinese media industry in the last 11 years where I helped both Aegis Group and GroupM become market leaders. I am confident that I can effectively partner with Peter Tan to grow and expand SearchMedia." About SearchMedia SearchMedia is a leading nationwide multi-platform media company and one of the largest operators of integrated outdoor billboard and in-elevator advertising networks in China. SearchMedia operates a network of high-impact billboards and one of China's largest networks of in-elevator advertisement panels in 50 cities throughout China. Additionally, SearchMedia operates a network of large-format light boxes in concourses of eleven major subway lines in Shanghai. SearchMedia's core outdoor billboard and in- elevator platforms are complemented by its subway advertising platform, which together enable it to provide a multi-platform, "one-stop shop" services for its local, national and international advertising clients. Marcum Bernstein & Pinchuk LLP, in New York, issued a "going concern" qualification on the consolidated financials statements for the year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses and has a working capital deficiency of approximately $31,000,000 at Dec. 31, 2011, which raises substantial doubt about its ability to continue as a going concern. Searchmedia Holdings reported a net loss of $13.45 million in 2011, a net loss of $46.63 million in 2010, and a net loss of $22.64 million in 2009. The Company's balance sheet at June 30, 2012, showed US$39.18 million in total assets, US$41.22 million in total liabilities and a US$2.04 million total shareholders' deficit. SEMGROUP LP: NY Court Dismisses Creditors' Suit Against Barclays ---------------------------------------------------------------- Nate Raymond, writing for Reuters, reports that U.S. District Judge Jed Rakoff in Manhattan on Friday issued an order granting Barclays Bank Plc's motion to dismiss a lawsuit brought by SemGroup LP creditors. The creditors were seeking repayment of a $143 million fee that SemGroup paid the bank to take over its commodities trading positions before filing for bankruptcy in 2008. According to the lawsuit, Barclays used its leverage over SemGroup to rejected any proposal with deal terms favorable to the energy company and its creditors. Instead, Barclays obtained a $143 million novation fee to go through with the deal. The lawsuit said the size of the fee was unconscionable and SemGroup did not receive reasonably equivalent value. According to Reuters, Barclays filed court papers in August seeking dismissal of the case. Among other reasons, the bank said the lawsuit was filed two years late. Reuters notes Brandon Ashcraft, a spokesman for Barclays, declined to comment. Lawyers for Bettina Whyte, the trustee managing a litigation trust for SemGroup and a managing director at Alvarez & Marsal, did not respond to requests for comment. About SemGroup, L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-11525) on July 22, 2008. John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represented the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. served as the Debtors' claims agent. The Blackstone Group L.P. and A.P. Services LLC acted as the Debtors' financial advisors. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represented the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. SemGroup LP won confirmation from the Bankruptcy Court of its Fourth Amended Plan of Reorganization on Oct. 28, 2008. The Plan, which distributed more than $2.5 billion in value to stakeholders, was declared effective on Nov. 30, 2008. As part of the Plan, the Reorganized Debtors entered into two new credit facilities aggregating $625 million in financing; entered into a $300 million Second Lien Term Facility; created a new corporate structure, including issuing shares of common stock and warrants; and distributed approximately $500 million of cash and approximately $1 billion in value of new common stock and warrants to thousands of creditors in accordance with the Plan. SEQUENOM INC: Incurs $30.2 Million Net Loss in Third Quarter ------------------------------------------------------------ Sequenom, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $30.22 million on $22.85 million of total revenues for the three months ended Sept. 30, 2012, compared with a net loss of $18.37 million on $13.58 million of total revenues for the same period during the prior year. Sequenom recorded a net loss of $84.30 million on $56.02 million of total revenues for the nine months ended Sept. 30, 2012, compared with a net loss of $51.98 million on $40.42 million of total revenues for the same period a year ago. The Company reported a net loss of $74.15 million in 2011, a net loss of $120.84 million in 2010, and a net loss of $71.01 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $264.18 million in total assets, $188.60 million in total liabilities and $75.58 million in total stockholders' equity. As of Sept. 30, 2012, total cash, cash equivalents, and marketable securities were $193.4 million. In the third quarter of 2012, the Company completed a private offering of $130.0 million convertible, unsecured, senior notes with the intent to use the net proceeds to fund continued commercialization of the MaterniT21 PLUS LDT, as well as for other general corporate purposes, which may include research and development expenses, capital expenditures, working capital and general administrative expenses. "The results from this quarter illustrate the impact of the Company's strategic approach, as we have focused on maintaining our leadership position within our markets," said Harry Hixson, Jr., Ph.D., Chairman and CEO of Sequenom. "Overall, the last year has been an exciting time as Sequenom CMM introduced the MaterniT21 PLUS LDT and dramatically scaled up operations to support the overwhelming response from the obstetrics and maternal-fetal medicine physician community. We are pleased that Sequenom CMM has reached a 90,000 annualized test volume run rate for the MaterniT21 PLUS test. We will also continue to seek new molecular diagnostic growth opportunities as we move into 2013." A copy of the Form 10-Q is available for free at: http://is.gd/Iglj7Y About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. SHUKAN INC.: Case Summary & 9 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Shukan, Inc. 10870 Crain Highway Faulkner, MD 20632 Bankruptcy Case No.: 12-30087 Chapter 11 Petition Date: November 7, 2012 Court: U.S. Bankruptcy Court District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Richard M. McGill, Esq. LAW OFFICES OF RICHARD M. MCGILL P.O. Box 358 5303 West Court Drive Upper Marlboro, MD 20773 Tel: (301) 627-5222 E-mail: mcgillrm@aol.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 The Company's list of its nine unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/mdb12-30087.pdf The petition was signed by Nailini Vaidya, president. SOFTLAYER TECHNOLOGIES: Moody's Assigns 'B1' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service has moved the Corporate Family Rating (CFR) and Probability of Default Rating (PDR), both at B1, from SoftLayer Technologies, Inc. to SoftLayer Holdings, Inc. ("SoftLayer" or the "company"), which is now the corporate family's ultimate parent and issuer of the audited financial statements. The rating outlook is stable. Ratings Assigned: Issuer: SoftLayer Holdings, Inc. Corporate Family Rating -- B1 Probability of Default Rating -- B1 Ratings Withdrawn: Issuer: SoftLayer Technologies, Inc. Corporate Family Rating -- B1 Probability of Default Rating -- B1 Ratings Rationale SoftLayer's B1 Corporate Family Rating (CFR) largely reflects the company's continued expansion following the acquisition of ThePlanet.com in November 2010, as well as its strong EBITDA margin profile. While SoftLayer generates ample funds from operations, much of the company's cash flow is used for capital expenditures on server growth and data center space expansion. For the twelve months ended June 30, 2012, SoftLayer's total debt to EBITDA (Moody's adjusted) was 4.6x, which is driven by the significant operating leases and Moody's resulting adjustments to reported debt. However, given the high capital intensity of the business model, Moody's expects SoftLayer to operate at around 3x to 4x financial leverage. The rating also incorporates Moody's belief that the company is likely to exceed leverage targets over short episodes as it funds expansion largely through the use of debt. However, Moody's also recognizes that SoftLayer's projected revenue growth trajectory and commensurate EBITDA expansion provide it with the opportunity to delever rapidly below 4x in a short period of time. Moody's estimates leverage will decline to under 4x by year end 2013. The rating is further supported by SoftLayer's strong and consistent growth from providing hosting and managed services to Internet-centric small- and medium-sized businesses (SMBs) since its inception. Moody's believes SoftLayer's high EBITDA margins can eventually translate into positive free cash flow once the company emerges from the current growth phase. Nonetheless, Moody's remains concerned about the long-term sustainability of SoftLayer's cash flow stream (as the potential commoditization of various data center services could lead to price competition), challenges associated with solidifying a defensible competitive position in the fragmented hosting segment of the data center services industry, and the company's modest scale and relatively short operating history. In Moody's view, as competitors seek to enhance their services offerings, SoftLayer's lack of customer contracts, currently an anomaly in the data center services industry, also constrains the rating. The rating is further weighed down by the continuing integration of the underperforming pre-merger operations of ThePlanet.com. Moody's expects SoftLayer to maintain adequate liquidity over the next twelve months. As of June 30, 2012, the company had about $66 million of cash on hand, $17 million available unused capacity on its capital lease program, and full availability under the $40 million revolving credit facility (maturing 2015) to backstop potential free cash flow deficits that may arise should the company need to expand its plans to add server capacity in new data centers. Following expected negative free cash flow in 2012 due to continued heavy capex needs, Moody's projects SoftLayer will be free cash flow neutral through most of 2013. Rating Outlook The stable rating outlook reflects Moody's expectation that SoftLayer will continue to capitalize on strong demand for server capacity by Internet-centric SMB's over the medium-term and that the company will manage its growth within available liquidity using a disciplined capital structure with a reasonable mix of debt and equity. What Could Change the Rating -- UP An upgrade is not likely over the near term as the company's small size constrains the rating, particularly as it navigates the still early phases of its lifecycle and works on the continued integration of ThePlanet.com. However, once the above concerns are better mitigated, upward rating momentum could develop if SoftLayer successfully ramps up server utilization in its newly leased facilities, such that total debt to EBITDA leverage (Moody's adjusted) trends below 2x on a sustained basis and the company generates consistent positive free cash flow in excess of 10% of adjusted debt. What Could Change the Rating -- DOWN Negative rating pressure could ensue if SoftLayer's liquidity becomes strained or financial leverage increases either due to the company's inability to fully integrate ThePlanet.com, or as it adds new servers or replaces existing capacity Moody's expects total debt to EBITDA leverage (Moody's adjusted) will rise above 4x on a sustained basis. The principal methodology used in rating SoftLayer Holdings, Inc. was the Global Communications Infrastructure Methodology published in June 2011. Other methodologies include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Dallas, TX, SoftLayer Holdings, Inc. is a provider of dedicated hosting, cloud-computing and managed data center services. Through its roughly 100,000 computer servers under management, SoftLayer serves primarily Internet-centric small- and medium-sized businesses (SMBs) and value added resellers (VARs) with data center facilities in Dallas, Seattle, Washington DC, Houston, San Jose, Amsterdam and Singapore. Revenue for the twelve months ended June 30, 2012 totaled approximately $364 million. SUNDANCE SELF STORAGE: Court Tells Counsel to Disgorge Fees ----------------------------------------------------------- Bankruptcy Judge Robert S. Bardwil ordered C. Anthony Hughes, counsel to Sundance Self Storage-El Dorado LP, to disgorge the fees he received from the estate. The Court held that Mr. Hughes at all times during his representation of the Debtor, was not a disinterested person and had held an interest adverse to the estate's interest. Among other things, Mr. Hughes failed to disclose he served as counsel in the 2010 personal Chapter 13 bankruptcy of Don Smith, owner of West Coast Real Estate & Mortgage, Inc., the corporation that acquired Sundance's property. Mr. Smith is also the Debtor's manager of operations. Mr. Hughes was awarded fees of $57,270 and costs of $4,631 pursuant to a June 6 Court order. In May 2012, after its two-year attempt to obtain confirmation of a plan of reorganization came to an unsuccessful end, Sundance faced foreclosure on virtually its only asset, a self-storage facility in El Dorado Hills, California, by U.S. Bank, and a motion by the United States Trustee to dismiss or convert Sundance's case. On May 24, 2012, after Sundance's attempt to stay the foreclosure in state court had failed, and just six days before the hearings on the U.S. Trustee's motion and Mr. Hughes' fee application, Howard Brown, on behalf of Sundance, signed a grant deed transferring the Property to West Coast. On May 29, 2012, the day before the hearings, the grant deed was recorded. Six days later, on June 4, 2012, West Coast filed a chapter 11 petition; its bankruptcy counsel is Mohammad Mokarram. The same day, the court issued an order granting the U.S. Trustee's motion and converting the Sundance case to a case under chapter 7. Mr. Smith has admitted he initiated the transfer of the Property from Sundance to West Coast. The transfer was made without the court's approval or knowledge and without notice to the U.S. Trustee or any of the other parties in the Sundance case. The transfer of the Property came to the court's attention in mid- June, when the Bank sought relief from the automatic stay in the West Coast case. "This case presents a graphic illustration of the policies underlying the rules that professionals employed in chapter 11 cases must make full and complete disclosure of their connections with the debtor and other parties-in-interest, must not hold or represent an interest adverse to the estate, and must be 'disinterested.' This decision is meant to underscore the need for professionals employed by a bankruptcy estate to make full and candid disclosure of all connections, both when applying for approval of their employment and during the pendency of the case," Judge Bardwil said. "This duty to disclose must be taken seriously -- if a professional fails to do so, he or she risks disallowance of all compensation." A copy of the Court's Nov. 6 Memorandum Decision is available at http://is.gd/9ZRdMVfrom Leagle.com. Sundance Self-Storage-El Dorado LP, based in Roseville, California, filed for Chapter 11 bankruptcy (Bankr. E.D. Calif. Case No. 10-36676) on June 25, 2010. Judge Robert S. Bardwil oversees the case. C. Anthony Hughes, Esq., in Sacramento, served as the Debtor's counsel. The Debtor scheduled $4,395,200 in assets and $6,427,757 in debts. A copy of the Debtor's list of 14 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/caeb10-36676.pdf The petition was signed by Don Smith, manager of operations. THOMPSON CREEK: Moody's Affirms 'Caa1' CFR/PDR; Rates Notes 'B1' ---------------------------------------------------------------- Moody's Investors Service affirmed Thompson Creek Metals Company Inc.'s Caa1 corporate family and probability of default ratings, Caa2 senior unsecured notes ratings, Caa2 rating of the debt component of tangible common equity units, and assigned a B1 rating to the company's proposed $350 million senior secured notes. Thompson Creek's speculative grade liquidity rating remains unchanged at SGL-4, but Moody's expects to raise this rating to SGL-3 once the proposed financing closes. The rating outlook remains stable. The proposed notes issue will replace the company's $300 million senior secured revolver, for which access has been very restricted due to tight financial covenants. The notes issue will improve the company's liquidity and provide sufficient funds to complete the construction of the Mt. Milligan mine. "Completion of the debt transaction will strengthen Thompson Creek's liquidity, which is crucial as it addresses molybdenum production issues and funds the construction of the Mt. Milligan copper-gold mine", said Darren Kirk, Moody's Vice President and Senior Credit Officer. "Notwithstanding improved liquidity, leverage will remain elevated and free cash flow will be significantly negative over the rating horizon." Ratings Rationale Thompson Creek's Caa1 corporate family rating primarily reflects its concentration in molybdenum production, small size and dependence on two mines, and substantial risks associated with its construction of the Mt. Milligan copper-gold mine. The rating also reflects the company's high pro forma adjusted leverage (Debt/ EBITDA above 10x) and Moody's expectation that continuing weak molybdenum prices and substantial capital expenditure requirements will cause free cash flow to remain negative through 2013. The rating acknowledges the long operating history of Thompson Creek's mines, low political risk, ample reserve base at its molybdenum mines (about 14 years) and at Mt Milligan (22 years), and sizeable pro-forma cash balances. In addition, the rating reflects Moody's expectation that the company's adjusted Debt/ EBITDA has the potential to fall below 6x in 2014 after Mt. Milligan comes on stream (currently expected to occur in the fourth quarter 2013). The company's SGL-4 liquidity rating reflects Moody's view that without the completion of the notes issue, Thompson Creek will not have sufficient cash resources to fund its requirements over the next year. Continued compliance with its bank maintenance covenants is also unlikely in Moody's opinion, leading to an inadequate liquidity profile. If the transaction closes as proposed, Moody's expects to raise the company's SGL rating to SGL-3, reflecting adequate liquidity as pro forma cash balances of about $700 million, combined with $207 million of proceeds from the Royal Gold streaming transaction to be received through Q2 2013 will be sufficient to cover anticipated negative free cash flow of $700 million through 2013. As well, the company will have limited near-term debt maturities ($29 million), and no financial maintenance covenants. Tempering these factors are the absence of a committed revolving credit facility and the likelihood that Thompson Creek will need to cash collateralize its letters of credit (about $25 million). The stable outlook reflects Moody's expectation that Thompson Creek's earnings will not improve meaningfully through the next 12 to 18 months as molybdenum prices are expected to remain soft, but, with the completion of the notes offering, the company will have sufficient liquidity to fund its operations and expansion project. The company's ratings could be upgraded if Thompson Creek successfully completes the Mt. Milligan mine and appears poised to generate positive free cash flow on a sustained basis and maintain adjusted Debt/EBITDA below 5x. The company's ratings could be downgraded if molybdenum prices decline sharply, or if development costs at Mt. Milligan escalate such that the company appears likely to sustain adjusted Debt/EBITDA above 7x. The ratings could also be downgraded if the company fails to maintain sufficient liquidity to fund its requirements over the next year. The principal methodology used in rating Thompson Creek was the Global Mining Industry Methodology published in May 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Thompson Creek Metals Company Inc., one of the world's largest molybdenum producers, operates through two open pit mines and two processing centers in the United States and Canada. The company is currently constructing the Mt. Milligan copper-gold mine in northern British Columbia, whose operations are expected to commence in late 2013. Revenue from the last twelve months ended September 30, 2012 was $419 million with about 19 million pounds of molybdenum produced. Thompson Creek is headquartered in Denver, Colorado with an administrative office in Vancouver, British Columbia, Canada. TRIBUNE CO: Works With CBRE to Promote Leasable Spaces ------------------------------------------------------ CBRE, a commercial real estate firm, hosted an event at The Baltimore Sun's offices at the North Calvert Street for brokers to get a feel for vacant space in the building, according to a November 7 report by Baltimore Sun. Stephen Seidl, the Sun's senior vice-president for operations and technology, said the news company and other divisions of Tribune Co. have been working with CBRE to promote leasable space in buildings that have become too large for the news businesses they house. "Tribune is not mandating we lease the space," Baltimore Sun quoted Mr. Seidl as saying. Tribune is expected to emerge from bankruptcy protection in the next few months and the ownership of its properties will likely be transferred to JP Morgan Chase Bank and two investment groups. CBRE's first goal is to put the North Calvert Street space to use but if someone makes an offer to buy the Sun's North Calvert Street building, the company will entertain the idea, according to the report. 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) TWO & THREE: Case Summary & 5 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Two & Three Putnam Court, LLC 35 Church Street Greenwich, CT 06830 Bankruptcy Case No.: 12-52003 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN 123 York Street, Ste 1B New Haven, CT 06511-0001 Tel: (203) 777-5741 Fax: (203) 777-4206 E-mail: ressmul@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its five largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ctb12-52003.pdf The petition was signed by Danny Gabriele, member. US AIRWAYS: Moody's Raises Corp. Family Rating to 'B3' ------------------------------------------------------ Moody's Investors Service raised its debt ratings of U.S. Airways Group, Inc. ("US Airways"): Corporate Family and Probability of Default to B3 from Caa1, Senior Secured First Lien Term Loan due 2014 to B2 from B3, and senior unsecured to Caa2 from Caa3. Moody's raised its ratings by one notch on certain of the company's Enhanced Equipment Trust Certificates ("EETCs") issued by US Airway's subsidiaries, U.S. Airways, Inc. or U.S. Airways, LLC (formerly America West Airlines, LLC) and affirmed the SGL-3 Speculative Grade Liquidity rating. The outlook is stable. Rating Rationale The upgrade of the ratings anticipates that US Airways will sustain the improved operating performance of recent quarters that has led to a higher cash balance and stronger credit metrics. Moody's believes that the company's traffic performance and airline operating metrics, which have been competitive with those of its larger and or higher rated peers are likely to remain so in upcoming periods. Leading market shares in its hubs, albeit in smaller U.S. cities, helps drive favorable operating results over the course of the cycle. Moody's expects US Airways -- and the industry -- to continue a disciplined approach to capacity, including further reductions in the event weaker economic growth leads to slowing demand for air travel, to help offset pressure on yields and profit margins. The choice to forego fuel hedging has not been an impediment to profitable operations, particularly as the average spot price of jet fuel has been about $3.00 per gallon since 2010. The upgrade of the ratings anticipates that a sustained sharp increase in the cost of oil, and thus jet fuel, is not likely over at least the next 12 to 24 months. Moody's Oil and Gas team forecasts the average barrel price of Brent oil to fall below $100 in 2013. This compares to the actual average of about $110 so far in 2012. US Airways has achieved good profitability in the past 24 months notwithstanding a lack of fuel hedges. The upgrades occur while US Airways and AMR Corporation ("American", not rated) have indicated that they are in discussions about a potential combination. Moody's believes that a transaction with American would enhance US Airways network and offer important opportunities for cost and revenue synergies. Such benefits would be balanced against the integration risks and any incremental financial risk that could arise from funding such a merger. But, Moody's believes that even in light of the potential for a transaction to emerge between US Airways and American, the B3 CFR rating is more reflective of the company's current risk profile. The B3 Corporate Family rating reflects Moody's belief that the company can sustain credit metrics at levels supportive of the B3 rating category over the intermediate term, even as economic headwinds persist. US Airways' network, anchored by hubs in Charlotte, Philadelphia and Phoenix and its focus city of Washington, D.C., is mainly a U.S. domestic network that is smaller than those of its larger legacy airline peers. However, Moody's expects US Airways to manage its capacity with a focus on earning acceptable returns on capital, which will help it produce competitive airline operating and financial metrics. The B3 Corporate Family and SGL-3 Speculative Grade Liquidity ratings consider the company's adequate liquidity with cash balances as a percent of revenue having improved and becoming more comparable with industry peers. The upgrade of the Corporate Family rating is the main driver of the selected upgrades on the EETC ratings. The A or B tranches that were upgraded primarily belong to the company's "modern" EETCs; those transactions issued after 2007 that benefit from cross-default and cross-collateralization of the underlying equipment notes. Moody's upgraded the A-tranche ratings of the modern EETCs by one notch to Ba1, leveling the ratings on these tranches with the existing Ba1 ratings on the A-tranches of the company's 1998-1 and 1999-1 EETCs. The collateral in the modern EETCs represent the younger, larger and more modern aircraft in US Airways fleet and, Moody's believes have a higher probability of affirmation under a US Airways default scenario. However, the modern EETCs have higher loans-to-value than that of the 1998-1 and 1999-1, "legacy" EETCs whose equipment notes indentures lack cross-default or cross-collateralization provisions. The risk of the smaller collateral cushion on the A-tranches of the modern EETCs relative to that in the 1998 and 1999 transactions is balanced by their more attractive collateral and the more favorable terms of the equipment notes, resulting in the leveling of the ratings at Ba1. The rating on the A-tranche of 2001-1 is Ba2; the lack of cross-default or cross-collateralization but similar loans-to-value to the more recent EETCs are the drivers of this one notch rating differential. The Ba3 ratings on the B- tranches of 1998-1 and 1999-1 are one to three notches higher than the B-tranche ratings on the remainder of the company's EETCs. Lower loans-to-value are the driver of these relative ratings. The stable outlook reflects Moody's anticipation of relatively stable demand and fuel prices in upcoming quarters, which should allow the company to sustain breakeven to modestly positive free cash flow generation, notwithstanding higher capital expenditures with increasing deliveries of Airbus A321 aircraft. There is little upwards pressure on the ratings above the B3 level at this time, particularly given the event risk associated with a potential business combination. However, a positive rating action could follow if the company was to further strengthen its metrics profile, even while significantly increasing its size. Sustaining Debt to EBITDA below 5.5 times, Funds from operations + interest to interest above 3.0 times and positive free cash flow generation could support an upgrade. A negative rating action could follow if unrestricted cash declines below $1.8 billion. The inability to control non-fuel operating costs or to sustain competitive yields, either of which would challenge the company to maintain its operations over the long-term could also lead to a downgrade. Debt to EBITDA that surpasses 7.0 times, FFO + Interest to Interest that approaches 2.0 times or sustained negative free cash flow generation could pressure the ratings. Issuer: US Airways Group, Inc., Upgrades: Probability of Default Rating, Upgraded to B3 from Caa1 Corporate Family Rating, Upgraded to B3 from Caa1 Senior Secured Bank Credit Facility, Upgraded to B2, LGD3, 35% from B3, LGD3, 37% Issuer: US Airways, Inc., Upgrades: Senior Secured Enhanced Equipment Trust Certificates 1998-1 C, Upgraded to B3 from Caa1 1999-1 C, Upgraded to B3 from Caa1 2000-3 C, Upgraded to B3 from Caa1 2001-1 G, Upgraded to Ba2 from Ba3 2001-1 C, Upgraded to B2 from B3 2010-1A, Upgraded to Ba1 from Ba2 2010-1B, Upgraded to B1 from B2 2011-1A, Upgraded to Ba1 from Ba2 2011-1B, Upgraded to B1 from B2 2012-1A, Upgraded to Ba1 from Ba2 2012-1B, Upgraded to B1 from B2 Affirmations: Senior Secured Enhanced Equipment Trust Certificates America West Airlines, Inc. 1998-1 A, at Ba3 1998-1 B, at B3 1999-1 G1, at B1 2000-1 G1, at B1 2001-1 G1, at B1 US Airways, Inc. 1998-1 A, at Ba1 1998-1 B, at Ba3 1999-1 A, at Ba1 1999-1 A2, at Ba1 1999-1 B, at Ba3 2000-2 G, at Ba3 2000-3 G, at Ba3 2010-1 C, at B3 2011-1 C, at B3 2012-1 C, at B3 Issuer: Hillsborough County Aviation Authority, FL , Upgrades: Senior Secured Revenue Bonds, Upgraded to Caa2, LGD5, 85% from Caa3, LGD5, 88% Issuer: Indianapolis Airport Authority, IN , Upgrades: Revenue Bonds , Upgraded to Caa2, LGD5, 85% from Caa3, LGD5, 88% Issuer: Pennsylvania Economic Dev. Fin. Auth. , Upgrades: Senior Unsecured Revenue Bonds, Upgraded to a range of Caa2, LGD5, 85 % from a range of Caa3, LGD5, 88 % Issuer: Phoenix Industrial Development Authority, AZ , Upgrades: Senior Unsecured Revenue Bonds, Upgraded to a range of Caa2, LGD5, 85 % from a range of Caa3, LGD5, 88 % The principal methodology used in rating US Airways was the Global Passenger Airlines Industry Methodology published in May 2012 and Enhanced Equipment Trust And Equipment Trust Certificates published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. US Airways, along with US Airways Shuttle and US Airways Express, operates nearly 3,200 flights per day and serves more than 200 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. VANN'S INC: Changes Company Name, Selects Regelbrugge as New CEO ---------------------------------------------------------------- Rob Chaney at Missoulian reports that Vann's Inc. is now known as Vann's Acquisition LLC and Greg Regelbrugge was named new chief executive officer replacing Jerry McConnell. "It lets the vendor community know we're a different company," the report quotes the incoming CEO Greg Regelbrugge as saying. "We want to separate ourselves from the previous company that went into Chapter 11. That way we have structurally the chance to come out of this clean and start fresh. But the names on the buildings won't change. We will remain Vann's." According to the report, McMagic Partners bought the company for $4.5 million -- just over half what Vann's owed its slate of creditors. McMagic in turn is part of Khaledi Group, which owns 38 companies in California, Arizona and Texas. Mr. Regelbrugge was previously Panasonic's vice president of national accounts in the western United States. The report relates Mr. Regelbrugge said he was researching a possible sale of BigSkyCountry.com, which sells sporting goods on the Internet. About Vann's Inc. Vann's Inc. -- http://www.vanns.com/-- a retailer of appliances and consumer electronics with five stores in Montana, filed for Chapter 11 protection (Bankr. D. Mont. Case No. 12-61281) in Butte, Montana, on Aug. 5, 2012. The Debtor also owns outdoor clothing and sports products at http://www.bigskycountry.com/ Vann's is owned by an employee stock ownership plan trust. Vann's Inc. disclosed assets of $17.6 million and liabilities of $14.4 million. Assets include $12.2 million cost-value of inventory plus $1 million in current accounts receivable. The Company owes $4 million to First Interstate Bank. It also owes $4.8 million on an inventory loan from GE Commercial Distribution Finance Corp. Bankruptcy Judge John L. Peterson presides over the case. Vann's hired Perkins Coie LLP's Alan D. Smith, Esq., and Brian A. Jennings, Esq., as counsel; and Hamstreet & Associates, LLC, as turnaround and restructuring advisors. GE Commercial Distribution Finance Corporation is represented by Gary Vincent, Esq., at Husch Blackwell LLP, and the Law Offices of John P. Paul, PLLC. First Interstate Bank, the DIP Lender, is represented by Benjamin P. Hursh, Esq., at Crowley Fleck PLLP. The U.S. Trustee has formed a seven-member creditors committee. The Committee is represented by Halperin Battagia Raicht, LLP, and Ross Richardson. The Court appointed Montana lawyer Richard J. Samson as trustee for Vann's on Oct. 3. The case was later converted to liquidation in Chapter 7 on Oct. 26. WEATHERFORD INT'L: Moody's Affirms '(P)Ba1' Pref. Shelf Rating -------------------------------------------------------------- Moody's Investors Service affirmed Weatherford International Ltd.'s (Weatherford, incorporated in Bermuda) Baa2 senior unsecured and Prime-2 commercial paper ratings with a negative outlook. The rating action is in response to the company's identification of a material weakness in internal controls over financial reporting related to the accounting for a percentage of completion contract in Iraq, and continued increases in debt balances. "Weatherford's latest disclosure of a material weakness represents another internal control challenge for the company, in addition to its previously identified material weakness in internal controls over financial reporting for income taxes," commented Gretchen French, Moody's Vice President. "The material weakness also highlights Moody's continued concern about Weatherford's company- wide controls, particularly given its large breadth of operations. In addition, Weatherford continues to face high and rising debt levels, which limits its financial flexibility." Ratings Rationale Weatherford's Baa2 senior unsecured rating is supported by: its scale and leading market positions; its geographic diversification, with a substantial portion of its revenue coming from markets outside the historically more volatile North American market; and its numerous patented products and technologies, which give the company a competitive edge in several markets. While Weatherford's asset profile is indicative of a higher rating, the Baa2 rating is restrained by the company's high financial leverage and lower returns compared to its peers. Weatherford has weak coverage and leverage metrics stemming from acquisitions and periods of sustained negative free cash flow resulting from its aggressive growth profile. In addition, the rating remains restrained by uncertainty about the ultimate outcome of various government investigations. Management has targeted deleveraging in 2013, with more measured growth and an increased focus on returns on capital employed supporting free cash flow generation. However, there remains a degree of execution risk in achieving lower debt levels. Revenue recognition issues can potentially be very serious and are typically not seen in investment-grade rated issuers. Weatherford's disclosure of the material weakness and the need for the correction in errors in revenue and operating income for the first and second quarter of 2012 for a total of $24 million and $55 million, respectively, directly impacts key historical credit ratios and raises concerns regarding earnings estimates. With this error, the entire loss on the contract is recognized up front instead of over the remaining life of the contract. However, the impact on credit ratios is relatively modest, the material weakness appears localized to one contract in Iraq and is expected to be fully remediated by year-end 2012, and Weatherford does not have significant exposure to percentage of completion contracts company-wide. In addition, the company looks to be making progress on becoming current on its historical financial statement filings, with a target completion date of the end of November 2012, and has obtained waivers from its bank lenders and bond holders with respect to its financial reporting covenants. If Weatherford is unable to become current on its financial statements and remediate its material weaknesses by year-end 2012 or if further material issues are uncovered, the Baa2 rating could be downgraded. In addition, the ratings could be lowered if the company's indebtedness were to become more elevated (debt/EBITDA over 3.5x). While an upgrade is unlikely over the near-term, a significantly lower, sustainable financial leverage profile (debt/EBITDA under 2.5x) and improved margins and returns relative to peers could result in an upgrade. Weatherford has an adequate liquidity profile. The company maintains a $2.25 billion credit facility maturing in July 2016 to support its $2.25 billion commercial paper program. Drawings on the revolver are not subject to a MAC clause and the company has access to same day availability for draws up to the full facility size. Weatherford has received a waiver from its bank lenders, waiving compliance with its financial reporting obligations to no later than March 19, 2013. The waiver also limits total debt to $10 billion ($8.9 billion at September 30, 2012). Once Weatherford becomes current on its financial statements, the financial covenant limiting debt-to-capitalization to 60% (as compared to an estimated 49% at September 30, 2012) will be re-instated. Ratings affirmed include: Weatherford International Ltd. (Bermuda) Senior Unsecured Notes rated Baa2 Senior Unsecured Shelf Rating (P)Baa2 Subordinate Shelf Rating (P)Baa3 Preferred Shelf Rating (P)Ba1 Commercial Paper Rating P-2 Weatherford International, Inc. (Delaware) Senior Unsecured Notes rated Baa2 Senior Unsecured Shelf Rating (P)Baa2 Subordinate Shelf Rating (P)Baa3 The principal methodology used in rating Weatherford was the Global Oilfield Services Industry Methodology published in December 2009. Weatherford International Ltd., headquartered in Switzerland, is a diversified international energy service and manufacturing company that provides a variety of services and equipment to the oil and gas industry. WEST 380: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: West 380 Family Care Facility dba North Texas Community Hospital dba Doctors' Hospital 1905 Doctors Hospital Drive Bridgeport, TX 76426-2260 Bankruptcy Case No.: 12-46274 Chapter 11 Petition Date: November 8, 2012 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: D. Michael Lynn Debtor's Counsel: Andrew G. Edson, Esq. Duane J. Brescia, Esq. Stephen A. Roberts, Esq. STRASBURGER & PRICE LLP 901 Main Street, Suite 4400 Dallas, TX 75202-3794 Tel: (214) 651-2047 Fax: (214) 651-4084 E-mail: andrew.edson@strasburger.com duane.brescia@strasburger.com stephen.roberts@strasburger.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $50,000,001 to $100,000,000 The petition was signed by Max Ludeke, corporate executive officer. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ City of Bridgeport Line of Credit $3,393,580 900 Thompson Street and Utilities Bridgeport, TX 76426 NTCH Guarantors, LLC Agreed Judgment $3,107,724 c/o Steven Longacre, MD 1903 Doctors Hospital Dr., Ste 20 Bridgeport, TX 76426 NTCH Employ Health Plan Payment due to $567,165 1905 Doctors Hospital health plan Drive Bridgeport, TX 76426 Boston Scientific Trade Debt $357,408 Corporation P.O. Box 951653 Dallas, TX 75395-1653 Charlene Blaylock, CRNA Loan $275,000 118 PR 3414 Bridgeport, TX 76426 Century Link Utilities $240,110 P.O. Box 2961 Phoenix, AZ 85062-2961 Hospira Agreed Judgment $188,740 West 380 MOB, LLC Rent $137,766 Bridge Staffing, Inc. Contract Labor $122,809 Quorum Health Arbitration Award $110,000 Resources, LLC Johnson & Johnson Trade Debt $106,907 Hunton & Williams Attorney Fees $91,125 Owens and Minor Trade Debt $81,687 Texas Hospital Insurance Premium $79,594 Insurance Exchange Medical Solutions, Inc. Contract Labor $65,794 Arthrex Trade Debt $57,678 Dr. Scott Stowers Professional Fees $53,550 Meditech Trade Debt $52,950 Vaughn Construction Trade Debt $52,844 Hollingsworth Walker Settlement Agreement $50,000 WEST PENN: Moody's Cuts Bond Rating to 'Ca'; Outlook Negative ------------------------------------------------------------- Moody's Investors Service has downgraded West Penn Allegheny Health System's (WPAHS or the System) (PA) bond rating to Ca from Caa1, affecting $726 million of Series 2007 fixed rate bonds issued through the Allegheny County Hospital Development Authority. The outlook remains negative. The rating is removed from review for possible downgrade, where it was placed on September 28, 2012, following the announcement of WPAHS's termination of its agreement with Highmark Inc. and Affiliates (Highmark). Summary Rating Rationale The Ca rating reflects the severity of the financial status of the System and Moody's belief that there is a high likelihood of a restructuring or bankruptcy filing, with or without the closing of an agreement with Highmark. The rating also incorporates the likelihood of less than full recovery of the bonds in the event of bankruptcy and in the absence of an asset sale. The System's announcement in September to terminate the agreement with Highmark and subsequent lawsuits between WPAHS and Highmark, as well as a longer-than-anticipated process to receive approval from the Pennsylvania Insurance Department (PID), has delayed and complicated the closing of the transaction. The presiding judge of the Allegheny County Court of Common Pleas ruled last Friday that Highmark did not breach the agreement (as asserted by WPAHS) and granted Highmark's request for a preliminary injunction against WPAHS. Moody's believes this ruling is a negative credit development for WPAHS because it prevents WPAHS from seeking other capital partners. WPAHS's operating loss in fiscal year 2012 (based upon unaudited financial information) was very high at $113 million, exceeding the loss in fiscal year 2011. WPAHS's weak unrestricted investment and cash position of $273 million as of June 30, 2012 effectively has been supported by payments from Highmark. WPAHS has received a total of approximately $232 million in grants, loans and other advances and capital support since 2011. Challenges * Delays and disruptions in finalizing an agreement with Highmark and receiving approval from the PID, increasing the likelihood of a restructuring or bankruptcy filing * Very large operating loss in fiscal year 2012 of $113 million, exceeding the fiscal year 2011 operating loss of $75 million (excluding a large non-recurring positive item) primarily driven by a 1% revenue decline * Continued decline in acute discharges of 6% in fiscal year 2012 (3% decline including observation cases), largely due to the closure and downsizing of services at West Penn Hospital in December 2010 and then, upon reopening of the emergency department on February 14, 2012 and the return of full medical and surgical services at West Penn Hospital, volumes have exceeded expectations at West Penn Hospital; however, volume shortfalls in the latter half of fiscal year 2012 for the System as a whole were reportedly due to Highmark's extension of a contract with University of Pittsburgh Medical Center (UPMC), which retained patient volumes that were anticipated to shift to WPAHS upon termination of the contract * Weak unrestricted cash position of $273 million or 62 days of cash on hand as of June 30, 2012; Highmark has provided $200 million in payments under the agreement as well as other advances and capital support, suggesting that, without such support, WPAHS would have largely depleted its cash * As of fiscal yearend 2012, underfunded status of pension plan was large at $279 million, an $82 million increase since fiscal yearend 2011 due to the decline in the discount rate * Heavy competition from UPMC (Aa3/positive), which is the largest health system in the region and owns a large managed care plan, enabling UPMC to influence health plan membership and volumes; UPMC opened a new hospital competing with WPAHS's Forbes Regional Hospital in July 2012, which has resulted in a significant decline in volumes at that facility, though the decline was less than expected * High leverage relative to operating performance with 57% debt- to-operating revenues; peak debt service coverage is zero based upon Moody's methodology. * Challenging demographic service area with declining population trends in the primary service area and an aging patient base Strengths * Affiliation agreement with Highmark, executed October 31, 2011, which has provided significant financial support to the System as noted above * Favorable debt structure with all fixed rate debt and no interest rate derivatives * System's prominence as the second largest healthcare system in Pittsburgh with 56,000 acute discharges Outlook Maintenance of the negative outlook reflects the likelihood of a restructuring or bankruptcy filing over the near-term What Could Make The Rating Go -- UP With a negative outlook, a rating upgrade in the near-term is not likely. Long-term, an upgrade would be considered with significant and sustained improvement in operating cash flow for several years, at least stability in volumes, significant growth in unrestricted cash, stability or growth in medical staff and closing of the Highmark affiliation. What Could Make The Rating Go -- DOWN Restructuring or bankruptcy filing The principal methodology used in this rating was Not-For-Profit Healthcare Rating Methodology published in March 2012. ZIFF DAVIS: J2 Global Acquires Assets for $167 Million Cash ----------------------------------------------------------- j2 Global, Inc., the provider of business cloud services, has acquired Ziff Davis, Inc., a media company in the technology market. The acquisition, the companies' joint statement said, provides j2 a series of world-class web properties, including PCMag.com, ComputerShopper, ExtremeTech, Toolbox.com and Geek.com. The purchase price was roughly $167 million, net of certain post- closing adjustments, and was funded out of j2's cash on hand. The transaction is anticipated to be immediately accretive and to contribute approximately $60 million to 2013 revenues. After giving effect to this transaction, j2 has over $300 million in cash and investments. "We have years of experience and significant interest in the digital media and online marketing space, both as a large scale consumer of advertising (~$50M per year) and as a seller of advertising on our ad supported properties (e.g. eFax Free) and a provider of marketing and advertising services through Campaigner(R)," said Hemi Zucker, j2's chief executive officer. "This acquisition brings scale to this effort with a top leadership team deeply committed to building the business through organic growth, which we expect to continue. This is our 40th acquisition and we plan to grow the business in the same way we have our others -- through a combination of internal growth and acquisitions." As a result of this transaction, j2 anticipates that its revenues for 2012 will exceed the top end of its previous estimate of between $345 million and $365 million. In addition, j2 reaffirms that its 2012 non-GAAP earnings per diluted share will exceed that of 2011. Founded in 1995, j2 Global, Inc. (NasdaqGS: JCOM) -- http://www.j2global.com/-- provides cloud services to individuals and businesses around the world. j2's network spans 49 countries on six continents. The Company offers Internet fax, virtual phone, hosted email, email marketing, online backup, unified communications and customer relationship management solutions. j2 markets its services principally under the brand names eFax(R), Onebox(R), eVoice(R), Campaigner(R), Fusemail(R), KeepItSafe(R) and CampaignerCRM(TM). As of Dec. 31, 2011, j2 Global had achieved 16 consecutive fiscal years of revenue growth. About Ziff Davis Ziff Davis, Inc. is a digital media company specializing in the technology market, reaching over 50 million in-market buyers every month. Ziff Davis sites feature trusted reviews of the newest and hottest tech products, news, commentary, tech deals and much more. The Company's portfolio includes its flagship PCMag.com, ComputerShopper, ExtremeTech, Geek.com, Toolbox.com and LogicBUY.com. Ziff Davis also helps marketers drive sales with its latest product, BuyerBase(TM), an advanced ad targeting platform focused 100% on in-market tech buyers. Ziff Davis B2B is a leading provider of online research to enterprise buyers and serves IT and cloud services vendors. Ziff Davis and six debtor-affiliates filed for bankruptcy protection (Bankr. S.D.N.Y. Case No. 08-10768) on March 5, 2008. Carey D. Schreiber, Esq., at Winston & Strawn, LLP, represents the Debtors in their restructuring efforts. The Court confirmed the Debtors' Second Amended Plan of Reorganization on June 17, 2008. The Debtors emerged from bankruptcy protection on July 1, 2008. * Moody's Says Sovereign Restructurings Reduce Debt Levels ---------------------------------------------------------- Sovereign debt restructurings provide immediate liquidity relief but often fail to provide solvency support as they are not accompanied by a reduction in debt levels, Moody's Investors Service says in a new report on the modern history of sovereign bond defaults and the extent of debt relief provided by sovereign bond exchanges. The new report, entitled "Sovereign Defaults Series: Sovereign Debt Restructurings Provide Liquidity Relief But Often Do Not Reduce Debt Levels", is available on www.moodys.com. Moody's subscribers can access this report via the link provided at the end of this press release. "Over the 1997-2012 period, nominal debt levels actually rose in the aftermath of half of sovereign bond exchanges," explains Elena Duggar, Moody's Group Credit Officer for Sovereign Risk and author of the report. "Further, the average country exited default with a debt-to-GDP ratio only 5 percentage points lower than before the debt restructuring." The report analyzes 31 distressed exchanges since 1997, by 19 sovereign issuers, and finds that in 50% of cases, debt levels were higher in the year after the debt exchange than they had been in the year before. Experiences varied across countries and some bond exchanges did lead to reductions in the nominal level of debt -- examples include the bond exchanges of Ukraine in 2000, Argentina in 2005 and Ecuador in 2009. More often, though, debt levels fell only marginally or even rose. Recent examples of such outcomes include the recent debt exchanges of Jamaica, St. Kitts and Nevis, and Greece. In particular, despite the large haircut suffered by investors during the restructuring of Greek debt earlier this year, debt-to-GDP ratio in Greece is expected to be 179% at end-2012, higher than the 171% at end-2011. The terms of the exchanges were key contributing factor to this outcome, as the majority of sovereign bond exchanges included maturity extension and a reduction in interest, but no nominal haircut on the principal. As a result, the distressed exchanges alleviated liquidity pressure and debt servicing costs were reduced in the long term, but the stock of debt remained unchanged. Even in the presence of a nominal haircut, three other factors often counteracted the beneficial impact of a sovereign debt exchange. First, economic deterioration contributed to budget deficits in the absence of fiscal adjustment. Second, currency depreciation, led to an increase in the value of foreign currency debt relative to domestic GDP. Third, there were banking sector recapitalization costs and other measures to support the economy. New borrowing as a result of these developments during the crisis often undermined the debt reduction achieved via the exchange. "Our findings underscore the fact that defaults are rarely a quick cure for sovereign debt crises", says Duggar. "Resolving sovereign debt crises is a prolonged and difficult process and significant fiscal adjustment is typically necessary over many years in order to reduce debt levels." * Moody's Says Number of "Fallen Angels" Declines Sharply --------------------------------------------------------- The number of "fallen angels," or companies whose ratings dropped below investment grade, declined sharply on a global basis during the third quarter of 2012, Moody's Investors Service says in its new quarterly report, "Rating Transition Risk for Investment-Grade Issuers." The report updates investors on recent changes in the credit quality of investment-grade corporate and financial issuers. "The global fallen angel rate fell to 0.1% in the third quarter from 1.3% in the second," says Albert Metz, Managing Director of Moody's Credit Policy Research. "While 26 European banks were downgraded from investment to speculative grade in the second quarter, during the third there were just two fallen angels, Italian insurer Unipol Gruppo Finanziario and US building materials manufacturer Martin Marietta Materials." Among the companies Moody's upgraded during the third quarter, 15 saw their ratings climb from speculative grade to investment grade, compared with 11 in the previous quarter. Of the third quarter's "rising stars," seven were based in North America, six in the Middle East and Africa and the remainder in Europe and Latin America. Across industries, nine, or 60%, of the quarter's rising stars were non-financial corporations, while five, or one third, were Turkish banks whose ratings were upgraded following the upgrade of the Turkish sovereign in June. US packaging company MeadWestvaco Corporation and two of its subsidiaries were also among the third quarter's rising stars. Looking ahead, Moody's Credit Transition Model (CTM) predicts that the global fallen angel rate will rise to 0.7% in the final quarter of 2012. And consistent with that forecast, Moody's investment-grade distress index indicates that market prices for investment-grade issuers fell during the third quarter. "Lower prices for investment-grade companies in the third quarter signal a higher number of fallen angels in the fourth, and European banks are expected to make up the bulk of these," Metz says. The fallen angel rate is expected to rise to 1.4% in Europe, compared with 0.4% in North America and 0.2% in Asia. And among speculative-grade issuers globally, CTM predicts that 0.5% will be upgraded to investment grade in 2012's final quarter. Regionally, the rising star rate is projected to be 0.5% in North America, 0.4% in Europe and 0.6% in Asia. * Moody's Says LIBOR Litigation Greater Risk to Bank Ratings ------------------------------------------------------------ Any future regulatory fines against banks from their alleged manipulation of the London Inter Bank Offered Rate (LIBOR) would likely be absorbable within each bank's annual earnings and would therefore not be significant enough to prompt rating actions, says Moody's Investors Service in a new report published on Nov. 13. However, losses from potential litigation over the alleged manipulation, though highly uncertain and difficult to quantify, could turn out to be much larger than any regulatory fines, and would therefore be more likely to have credit-negative rating implications. The new report, "Lingering LIBOR Risks and Potential Impact on Bank Ratings", is now available on www.moodys.com. Moody's subscribers can access this report via the link provided at the end of this press release. Moody's report describes the LIBOR rate-setting process, details the alleged misconduct, and highlights credit and litigation risks facing the LIBOR panel banks. In addition, Moody's assesses potential near-term developments -- such as additional settlements or lawsuits, class action suits and judicial decisions -- that the rating agency believes could increase the risk of losses or franchise damage. Moody's considers that the potential risks to firms fall into the following categories (1) regulatory fines/penalties; (2) litigation settlements; and (3) other (reputational damage, management upheaval, strategic changes). Moody's does not believe that the imposition of regulatory fines is likely to prompt rating actions. However, Moody's says that negative pressure on LIBOR panel banks' ratings could develop following (1) associated management upheaval and/or strategic changes; and/or (2) revelations of previously unidentified risk- management or control failures. With litigation efforts in their very early stages, Moody's says that the magnitude of any monetary damages or settlements is difficult to quantify, but they could ultimately have credit-negative implications. Moody's notes that the largest LIBOR panel banks have more earnings and capital with which to absorb potential losses. However, those banks are not necessarily less vulnerable than the smaller banks, especially if higher absolute transaction levels associated with the larger banks lead to larger litigation losses. Given the fluid nature of the current investigations and pending litigation, Moody's intends to monitor the ongoing developments and will use the framework described in this report as a basis to consider the potential credit implications. Well before any final court decision or legal settlements are reached, Moody's would expect numerous related legal and regulatory developments over an extended timeframe. This will bring greater clarity to the likely impact of regulatory fines, potential litigation losses and penalties on LIBOR panel banks' credit profiles. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Frank Smith Bankr. S.D. Ala. Case No. 12-03779 Chapter 11 Petition filed October 31, 2012 In re Byron Main Bankr. D. Ariz. Case No. 12-23784 Chapter 11 Petition filed October 31, 2012 In re Miguel Larios Bankr. D. Ariz. Case No. 12-23889 Chapter 11 Petition filed October 31, 2012 In re Whetstone Partners, LLP Bankr. D. Ariz. Case No. 12-23881 Chapter 11 Petition filed October 31, 2012 See http://bankrupt.com/misc/azb12-23881.pdf represented by: Sally M. Darcy, Esq. Mcevoy, Daniels & Darcy P.C. E-mail: ccarter@mddlaw.com In re Irene Desby-Jessop Bankr. C.D. Calif. Case No. 12-46668 Chapter 11 Petition filed October 31, 2012 In re AJSH III, LLC fdba AJSH III, Inc. dba Arigato Japanese Stek House Bankr. M.D. Fla. Case No. 12-16676 Chapter 11 Petition filed October 31, 2012 See http://bankrupt.com/misc/flmb12-16676p.pdf See http://bankrupt.com/misc/flmb12-16676c.pdf represented by: Lynn Welter Sherman, Esq. Adams and Reese, LLP E-mail: lynn.sherman@arlaw.com In re David Laughlin Bankr. N.D. Fla. Case No. 12-31465 Chapter 11 Petition filed October 31, 2012 In re Irene Chestnut Bankr. S.D. Fla. Case No. 12-36336 Chapter 11 Petition filed October 31, 2012 In re Jose Cortes Bankr. N.D. Ill. Case No. 12-43433 Chapter 11 Petition filed October 31, 2012 In re Sport Diver, Inc. dba Paradise Island Divers Bankr. W.D.N.C. Case No. 12-32632 Chapter 11 Petition filed October 31, 2012 See http://bankrupt.com/misc/ncwb12-32632.pdf represented by: Richard M. Mitchell, Esq. E-mail: rmitchell@rickmitchelllaw.com In re Philipsburg Electric & Supply, Inc. Bankr. W.D. Pa. Case No. 12-70951 Chapter 11 Petition filed October 31, 2012 See http://bankrupt.com/misc/pawb12-70951.pdf represented by: James R. Walsh, Esq. Kevin J. Petak, Esq. Spence Custer Saylor Wolfe & Rose E-mail: jwalsh@spencecuster.com kpetak@spencecuster.com In re Ears of Texas, P.A. Bankr. W.D. Tex. Case No. 12-53341 Chapter 11 Petition filed October 31, 2012 See http://bankrupt.com/misc/txwb12-53341.pdf represented by: William B. Kingman, Esq. E-mail: bkingman@kingmanlaw.com In re Edwin Jacobsen Bankr. E.D. Va. Case No. 12-16477 Chapter 11 Petition filed October 31, 2012 In re Robert Froehlich Bankr. E.D. Va. Case No. 12-16499 Chapter 11 Petition filed October 31, 2012 In re Randolph Tenney Bankr. D. Ariz. Case No. 12-23949 Chapter 11 Petition filed November 1, 2012 In re Carlos Zaragoza Bankr. C.D. Calif. Case No. 12-14094 Chapter 11 Petition filed November 1, 2012 In re Delzano, Enterprises Inc. dba Delzanos By The Sea Bankr. C.D. Calif. Case No. 12-46796 Chapter 11 Petition filed November 1, 2012 See http://bankrupt.com/misc/cacb12-46796.pdf represented by: Stanley D. Bowman, Esq. E-mail: sb@stanleybowman.com In re CA Autoplex, Inc. Bankr. C.D. Calif. Case No. 12-46821 Chapter 11 Petition filed November 1, 2012 See http://bankrupt.com/misc/cacb12-46821.pdf represented by: Robert S. Altagen, Esq. LAW OFFICES OF ROBERT S. ALTAGEN E-mail: rsaink@earthlink.net In re Marc Aniel Bankr. N.D. Calif. Case No. 12-33117 Chapter 11 Petition filed November 1, 2012 In re Virginia Anderson Bankr. N.D. Calif. Case No. 12-48916 Chapter 11 Petition filed November 1, 2012 In re Lindsey Bruce Bankr. M.D. Fla. Case No. 12-07203 Chapter 11 Petition filed November 1, 2012 In re Liquor Stop Incorporated Bankr. N.D. Ill. Case No. 12-43642 Chapter 11 Petition filed November 1, 2012 See http://bankrupt.com/misc/ilnb12-43642.pdf represented by: Ariel Weissberg, Esq. WEISSBERG & ASSOCIATES, LTD E-mail: ariel@weissberglaw.com In re Gary Roland Bankr. E.D. Ky. Case No. 12-52812 Chapter 11 Petition filed November 1, 2012 In re Joseph Funk Bankr. D. Nebr. Case No. 12-42395 Chapter 11 Petition filed November 1, 2012 In re D.C. & F.C. Laundromat, Inc. Bankr. E.D.N.Y. Case No. 12-47663 Chapter 11 Petition filed November 1, 2012 See http://bankrupt.com/misc/nyeb12-47663.pdf represented by: Joseph A. Altman, Esq. ALTMAN & ALTMAN ESQS E-mail: altmanesq@aol.com In re Maple Mountain Resort, LLC dba M-MAC @ Maple Mountain Resort, LLC Bankr. W.D.N.Y. Case No. 12-21733 Chapter 11 Petition filed November 1, 2012 See http://bankrupt.com/misc/nywb12-21733.pdf represented by: John F. McKeown, Esq. E-mail: johnf.mckeown@gmail.com In re Jose Alicea Ruiz Bankr. D.P.R. Case No. 12-08857 Chapter 11 Petition filed November 1, 2012 In re Juan Ponce Fantauzzi Bankr. D.P.R. Case No. 12-08859 Chapter 11 Petition filed November 1, 2012 In re J Dindorf Bankr. E.D. Wis. Case No. 12-35841 Chapter 11 Petition filed November 1, 2012 In re David Rucker Bankr. D. Ariz. Case No. 12-24009 Chapter 11 Petition filed November 2, 2012 In re Salvador Rivera Bankr. C.D. Calif. Case No. 12-34801 Chapter 11 Petition filed November 2, 2012 In re CCP Investment Properties LLC Bankr. N.D. Calif. Case No. 12-48957 Chapter 11 Petition filed November 2, 2012 See http://bankrupt.com/misc/canb12-48957.pdf Filed pro se In re Phillip Moheno Bankr. S.D. Calif. Case No. 12-14847 Chapter 11 Petition filed November 2, 2012 In re Aleksandr Filipskiy Bankr. M.D. Fla. Case No. 12-16832 Chapter 11 Petition filed November 2, 2012 In re Timothy Scott Bankr. M.D. Fla. Case No. 12-07214 Chapter 11 Petition filed November 2, 2012 In re CEI Barber and Beauty Institute dba The Edge dba Cutting Edge Bankr. N.D. Ga. Case No. 12-77296 Chapter 11 Petition filed November 2, 2012 See http://bankrupt.com/misc/ganb12-77296.pdf Filed pro se In re Christian Ruffin Bankr. N.D. Ga. Case No. 12-77405 Chapter 11 Petition filed November 2, 2012 In re Our Place Bakery/Cafe, LLC Bankr. N.D. Ga. Case No. 12-77397 Chapter 11 Petition filed November 2, 2012 See http://bankrupt.com/misc/ganb12-77397.pdf represented by: Melvin Robinson, Esq. Law Office of Melvin Robinson In re Ben Farmer Bankr. S.D. Ga. Case No. 12-42154 Chapter 11 Petition filed November 2, 2012 In re Ronald Grason Bankr. C.D. Ill. Case No. 12-72383 Chapter 11 Petition filed November 2, 2012 In re Donald King Bankr. N.D. Miss. Case No. 12-14731 Chapter 11 Petition filed November 2, 2012 In re Mott Creek, LLC Bankr. E.D.N.Y. Case No. 12-47682 Chapter 11 Petition filed November 2, 2012 See http://bankrupt.com/misc/nyeb12-47682.pdf Filed pro se In re Patrisha Osborne Bankr. N.D.N.Y. Case No. 12-12872 Chapter 11 Petition filed November 2, 2012 In re 35 West 64th Restaurant Associates LP dba Picholine Bankr. S.D.N.Y. Case No. 12-14498 Chapter 11 Petition filed November 2, 2012 See http://bankrupt.com/misc/nysb12-14498.pdf represented by: Robert R. Leinwand, Esq. Robinson Brog Leinwand Greene Genovese & Gluck P.C. E-mail: rrl@robinsonbrog.com In re Records Central, Inc. Bankr. N.D. Ohio Case No. 12-18061 Chapter 11 Petition filed November 2, 2012 See http://bankrupt.com/misc/ohnb12-18061.pdf represented by: Jeffrey M Levinson, Esq. Scott H Scharf, Esq. Levinson LLP E-mail: jml@jml-legal.com scharf@scharflegal.com In re Samuel Anthony Bankr. W.D. Pa. Case No. 12-25445 Chapter 11 Petition filed November 2, 2012 In re Chadwick Steele Bankr. E.D. Tenn. Case No. 12-15723 Chapter 11 Petition filed November 2, 2012 In re Jack Edwards Bankr. E.D. Tenn. Case No. 12-15720 Chapter 11 Petition filed November 2, 2012 In re Andric Enterprises, LLC dba Hunter Office Furniture dba Hunter & Associates Bankr. N.D. Tex. Case No. 12-36962 Chapter 11 Petition filed November 2, 2012 See http://bankrupt.com/misc/txnb12-36962.pdf represented by: Areya Holder, Esq. Holder Law E-mail: areya@holderlawpc.com In re Laverne Toedtli Bankr. W.D. Wash. Case No. 12-47526 Chapter 11 Petition filed November 2, 2012 In re Joe & Sons Framing Co. Bankr. D. Ariz. Case No. 12-24082 Chapter 11 Petition filed November 3, 2012 See http://bankrupt.com/misc/azb12-24082.pdf represented by: Lashawn D. Jenkins, Esq. Jenkins Law Firm E-mail: lashawn.jenkins@thejenkinslawfirm.com In re Gatrap Ventures, LLC Bankr. D. Md. Case No. 12-29932 Chapter 11 Petition filed November 3, 2012 See http://bankrupt.com/misc/mdb12-29932.pdf represented by: Aaron R. Caruso, Esq. Abod & Caruso, LLC E-mail: arc@abodcarusolaw.com In re Brendalix Acevedo Bankr. D. Mass. Case No. 12-43892 Chapter 11 Petition filed November 4, 2012 In re Donald Wilkinson Bankr. W.D. Pa. Case No. 12-25461 Chapter 11 Petition filed November 4, 2012 In re Tarrie Hyche Bankr. N.D. Ala. Case No. 12-72304 Chapter 11 Petition filed November 5, 2012 In re American West Regional Center, LLC Bankr. C.D. Calif. Case No. 12-22784 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/cacb12-22784.pdf represented by: Robert S. Altagen, Esq. Law Offices of Robert S. Altagen E-mail: rsaink@earthlink.net In re Total Time, Inc. dba Watchworks Bankr. C.D. Calif. Case No. 12-47015 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/cacb12-47015.pdf represented by: James T. King, Esq. E-mail: ecfnotices@kingobk.com In re Allen Schreiber Bankr. D. Colo. Case No. 12-32784 Chapter 11 Petition filed November 5, 2012 In re Lisa Schreiber Bankr. D. Colo. Case No. 12-32784 Chapter 11 Petition filed November 5, 2012 In re Susan Wright Bankr. D. Colo. Case No. 12-32840 Chapter 11 Petition filed November 5, 2012 In re Thomas Wright Bankr. D. Colo. Case No. 12-32840 Chapter 11 Petition filed November 5, 2012 In re Missionary Church of Jesus Christ Inc. Bankr. M.D. Fla. Case No. 12-15081 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/flmb12-15081.pdf Filed pro se In re T&W Auto Repair & Sales, Inc. Bankr. M.D. Fla. Case No. 12-16880 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/flmb12-16880.pdf represented by: Buddy D. Ford, Esq. E-mail: Buddy@tampaesq.com In re Duluth Station LLC Bankr. N.D. Ga. Case No. 12-77773 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/ganb12-77773.pdf represented by: Scott B. Riddle, Esq. E-mail: sbriddle@mindspring.com In re Mark Anderson Bankr. N.D. Ga. Case No. 12-77850 Chapter 11 Petition filed November 5, 2012 In re James Bazemore Bankr. S.D. Ga. Case No. 12-42170 Chapter 11 Petition filed November 5, 2012 In re Tanya Faller Irrevocable Trust U/A Dtd 8/20/07 Bankr. W.D. Ky. Case No. 12-11486 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/kywb12-11486.pdf represented by: Michael w. McClain, Esq. Ballinger McClain, PLLC E-mail: mike@kentuckytrial.com In re 727 Realty Trust Bankr. D. Mass. Case No. 12-43895 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/mab12-43895.pdf Filed pro se In re Stewart & Staley Restaurant, Inc. dba Annie Molloy's Irish Castle Bankr. S.D.N.Y. Case No. 12-37797 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/nysb12-37797.pdf represented by: Thomas Genova, Esq. Genova & Malin, Attorneys E-mail: genmallaw@optonline.net In re Eaton Associates, Inc. Bankr. W.D.N.Y. Case No. 12-13421 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/nywb12-13421.pdf represented by: David L. Roach, Esq. Blair & Roach E-mail: dlroach@blair-roach.com In re Disposal Corporation of America Bankr. E.D. Pa. Case No. 12- 20295 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/paeb12-20295.pdf represented by: Fareeda Halima Brewington, Esq. Brewington Legal E-mail: brewington@brewingtonlegal.com In re Steven Findlay Bankr. W.D. Pa. Case No. 12-25476 Chapter 11 Petition filed November 5, 2012 In re Pleasure Enterprises 3, LLC Bankr. E.D. Pa. Case No. 12-20299 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/paeb12-20299p.pdf See http://bankrupt.com/misc/paeb12-20299c.pdf represented by: Roger V. Ashodian, Esq. Regional Bankruptcy Center of SE PA E-mail: rashodian@schollashodian.com In re McClain Motors, Inc. Bankr. W.D. Tenn. Case No. 12-31940 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/tnwb12-31940.pdf represented by: Michael Don Harrell, Esq. Harrell and Associates E-mail: harrellandassoc@bellsouth.net In re Aric Akers Bankr. N.D. Tex. Case No. 12-37019 Chapter 11 Petition filed November 5, 2012 In re John Upton Bankr. N.D. Tex. Case No. 12-46197 Chapter 11 Petition filed November 5, 2012 In re Equi-Share, Inc. Bankr. S.D. Tex. Case No. 12-38286 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/txsb12-38286.pdf represented by: Anne Elise Kennedy, Esq. E-mail: akennedy@aek-law.com In re Galprops LLC Bankr. S.D. Tex. Case No. 12-38300 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/txsb12-38300.pdf represented by: James B. Jameson, Esq. E-mail: jbjameson@jamesonlaw.net In re Kainos Community Church, Inc. Bankr. S.D. Tex. Case No. 12-38296 Chapter 11 Petition filed November 5, 2012 See http://bankrupt.com/misc/txsb12-38296.pdf represented by: Nelson M. Jones, III, Esq. Garner Scott & Jones, PLLC E-mail: njoneslawfirm@aol.com In re Seferino Perez Bankr. S.D. Tex. Case No. 12-20576 Chapter 11 Petition filed November 5, 2012 In re Francisco Meneses Bankr. C.D. Calif. Case No. 12-35027 Chapter 11 Petition filed November 6, 2012 In re Fariborz Aframiyan Farnad DMD, Inc. Bankr. C.D. Calif. Case No. 12-47124 Chapter 11 Petition filed November 6, 2012 See http://bankrupt.com/misc/cacb12-47124.pdf represented by: Matthew E. Faler, Esq. LAW OFFICES OF MATTHEW E. FALER E-mail: mfaler@faler-law.com In re Ho Choi Bankr. N.D. Calif. Case No. 12-33158 Chapter 11 Petition filed November 6, 2012 In re Mary Littman Bankr. D. Colo. Case No. 12-32852 Chapter 11 Petition filed November 6, 2012 In re Steven Thompson Bankr. D. Colo. Case No. 12-32852 Chapter 11 Petition filed November 6, 2012 In re Paul Kubica Bankr. M.D. Fla. Case No. 12-15119 Chapter 11 Petition filed November 6, 2012 In re Hayes Faith Temple Baptist Church Bankr. N.D. Ga. Case No. 12-78098 Chapter 11 Petition filed November 6, 2012 Filed as Pro Se In re Red Oak Medical, Inc. Bankr. N.D. Ill. Case No. 12-44132 Chapter 11 Petition filed November 6, 2012 See http://bankrupt.com/misc/ilnb12-44132.pdf represented by: Keevan D. Morgan, Esq. MORGAN & BLEY, LTD. E-mail: kmorgan@morganandbleylimited.com In re Five Star Limousine Avenue Service, Inc. Bankr. N.D. Ill. Case No. 12-44134 Chapter 11 Petition filed November 6, 2012 See http://bankrupt.com/misc/ilnb12-44134.pdf represented by: Deadra F. Woods Stokes, Esq. DEADRA WOODS STOKES & ASSOCIATES, PC E-mail: dwslawpc@gmail.com In re Mark Mercer Bankr. N.D. Ill. Case No. 12-84188 Chapter 11 Petition filed November 6, 2012 In re Wayne Carter Bankr. D. Md. Case No. 12-30050 Chapter 11 Petition filed November 6, 2012 In re Raymond Compton Bankr. S.D. Miss. Case No. 12-52304 Chapter 11 Petition filed November 6, 2012 In re Caldera P & G fdba Mid-Power Resource Corporation Bankr. D. Nev. Case No. 12-22484 Chapter 11 Petition filed November 6, 2012 See http://bankrupt.com/misc/nvb12-22484.pdf represented by: Matthew Q. Callister, Esq. CALLISTER + ASSOCIATES E-mail: mqc@call-law.com In re Ace Auto Parts, Inc. Bankr. D. N.J. Case No. 12-36515 Chapter 11 Petition filed November 6, 2012 See http://bankrupt.com/misc/njb12-36515.pdf represented by: Laurent W. Metzler, Esq. METZLER & DESANTIS, LLP E-mail: LWM@metzlerdesantis.com In re Dale Fredrick Bankr. E.D.N.C. Case No. 12-07963 Chapter 11 Petition filed November 6, 2012 In re A-1 Hydro-Mulching of Houston, Inc. Bankr. S.D. Tex. Case No. 12-38417 Chapter 11 Petition filed November 6, 2012 See http://bankrupt.com/misc/txsb12-38417.pdf represented by: J. Craig Cowgill, Esq. J. CRAIG COWGILL & ASSOCIATES, P.C. E-mail: jccowgill@cowgillholmes.com In re Esmaeil Rowshan Bankr. W.D. Tex. Case No. 12-12524 Chapter 11 Petition filed November 6, 2012 In re SALSA-Sleep Apnea Labs of San Antonio, Inc. Bankr. W.D. Tex. Case No. 12-53497 Chapter 11 Petition filed November 6, 2012 See http://bankrupt.com/misc/txwb12-53497.pdf represented by: William R. Davis, Jr., Esq. LANGLEY & BANACK, INC. E-mail: wrdavis@langleybanack.com In re Mingo Property Group LLC Bankr. W.D. Tex. Case No. 12-61177 Chapter 11 Petition filed November 6, 2012 See http://bankrupt.com/misc/txwb12-61177.pdf represented by: John A. Montez, Esq. MONTEZ & WILLIAMS, P.C. E-mail: johna.montez@yahoo.com In re 25354 Pleasant Valley LLC Bankr. E.D. Va. Case No. 12-16616 Chapter 11 Petition filed November 6, 2012 See http://bankrupt.com/misc/vaeb12-16616.pdf represented by: Steven H. Greenfeld, Esq. COHEN BALDINGER & GREENFELD, LLC E-mail: steveng@cohenbaldinger.com In re Green Valley Pool & Patio, LLC Bankr. D. Ariz. Case No. 12-24341 Chapter 11 Petition filed November 7, 2012 See http://bankrupt.com/misc/azb12-24341.pdf represented by: Robert M. Cook, Esq. Law Offices of Robert M. Cook PLLC E-mail: robertmcook@yahoo.com In re Las Vegas Apartments, LLC Bankr. C.D. Calif. Case No. 12-47309 Chapter 11 Petition filed November 7, 2012 See http://bankrupt.com/misc/cacb12-47309.pdf Filed pro se In re Kuldip Singh Bankr. E.D. Calif. Case No. 12-39655 Chapter 11 Petition filed November 7, 2012 In re Country Fare, LLC Bankr. D. Conn. Case No. 12-32480 Chapter 11 Petition filed November 7, 2012 See http://bankrupt.com/misc/ctb12-32480.pdf represented by: James M. Nugent, Esq. Harlow, Adams, and Friedman E-mail: jmn@quidproquo.com In re Marcos Fintz Bankr. S.D. Fla. Case No. 12-36864 Chapter 11 Petition filed November 7, 2012 In re David Dorn Bankr. N.D. Ill. Case No. 12-44296 Chapter 11 Petition filed November 7, 2012 In re E & L Development Bankr. E.D. Mich. Case No. 12-64691 Chapter 11 Petition filed November 7, 2012 See http://bankrupt.com/misc/mieb12-64691.pdf represented by: Jayson Ruff, Esq. Jeffrey S. Grasl, Esq. Stephen M. Gross, Esq. McDonald Hopkins PLC E-mail: jruff@mcdonaldhopkins.com jgrasl@mcdonaldhopkins.com sgross@mcdonaldhopkins.com In re John Waytuk Bankr. D. Nev. Case No. 12-22495 Chapter 11 Petition filed November 7, 2012 In re Building Foundations, LLC aka CeCa Leasing Center Bankr. M.D. Pa. Case No. 12-06482 Chapter 11 Petition filed November 7, 2012 See http://bankrupt.com/misc/pamb12-06482.pdf Filed pro se In re Dynamic Metalcrafting Corporation Bankr. S.D. Tex. Case No. 12-38448 Chapter 11 Petition filed November 7, 2012 See http://bankrupt.com/misc/txsb12-38448.pdf represented by: Sterling A. Minor, Esq. Minor & Bair PLLC E-mail: sminor@minorbairlaw.com In re Tracer Detection Technology Corp. Bankr. W.D. Tex. Case No. 12-53513 Chapter 11 Petition filed November 7, 2012 See http://bankrupt.com/misc/txwb12-53513.pdf represented by: David S. Gragg, Esq. Langley & Banack, Inc. E-mail: dgragg@langleybanack.com In re King Coal Trucking, LLC Bankr. S.D. W.Va. Case No. 12-30601 Chapter 11 Petition filed November 7, 2012 See http://bankrupt.com/misc/wvsb12-30601.pdf represented by: Marshall C. Spradling, Esq. E-mail: marshall@spradlinglaw.net In re Ram's Die Cutting & Finishing Inc. Bankr. C.D. Calif. Case No. 12-35154 Chapter 11 Petition filed November 8, 2012 See http://bankrupt.com/misc/cacb12-35154.pdf represented by: David R. Chase, Esq. LAW OFFICE OF DAVID CHASE E-mail: dchaselaw@yahoo.com In re Sawyers Heating and Air, Inc. Bankr. E.D. Calif. Case No. 12-92905 Chapter 11 Petition filed November 8, 2012 See http://bankrupt.com/misc/caeb12-92905.pdf represented by: Richard E. Dwyer, Esq. LAW OFFICE OF RICHARD E. DWYER In re Clement Brandenburg Bankr. S.D. Fla. Case No. 12-37026 Chapter 11 Petition filed November 8, 2012 In re Preferred Housatonic Holdings, LLC Bankr. N.D. Ga. Case No. 12-78271 Chapter 11 Petition filed November 8, 2012 See http://bankrupt.com/misc/ganb12-78271.pdf represented by: Cameron M. McCord, Esq. JONES & WALDEN, LLC E-mail: cmccord@joneswalden.com In re Dwaine Davis Bankr. S.D. Ind. Case No. 12-81304 Chapter 11 Petition filed November 8, 2012 In re WinNET Communications, Inc. dba WinNET Internet Bankr. W.D. Ky. Case No. 12-34975 Chapter 11 Petition filed November 8, 2012 See http://bankrupt.com/misc/kywb12-34975.pdf represented by: Tyler Yeager, Esq. SEILLER WATERMAN LLC E-mail: yeager@derbycitylaw.com In re Win.Net Telecommunications, Inc. dba WinNET Internet Bankr. W.D. Ky. Case No. 12-34976 Chapter 11 Petition filed November 8, 2012 See http://bankrupt.com/misc/kywb12-34976.pdf represented by: Tyler Yeager, Esq. SEILLER WATERMAN LLC E-mail: yeager@derbycitylaw.com In re Carl Clark Bankr. N.D. Miss. Case No. 12-14817 Chapter 11 Petition filed November 8, 2012 In re 599 Vanderbilt LLC Bankr. E.D.N.Y. Case No. 12-47773 Chapter 11 Petition filed November 8, 2012 See http://bankrupt.com/misc/nyeb12-47773.pdf Filed as Pro Se In re Milad Sayegh Bankr. S.D.N.Y. Case No. 12-23954 Chapter 11 Petition filed November 8, 2012 In re William England Bankr. W.D. Okla. Case No. 12-15503 Chapter 11 Petition filed November 8, 2012 In re Starcraft Medical, Inc. dba OR-PRO Medical Industrial Laboratory, Inc. Bankr. D.P.R. Case No. 12-08987 Chapter 11 Petition filed November 8, 2012 See http://bankrupt.com/misc/prb12-08987.pdf represented by: Carmen D. Conde Torres, Esq. C. CONDE & ASSOC. E-mail: notices@condelaw.com In re Fred Harrington Bankr. E.D. Tex. Case No. 12-43075 Chapter 11 Petition filed November 8, 2012 In re Susan Roark Bankr. E.D. Wash. Case No. 12-04800 Chapter 11 Petition filed November 8, 2012 In re Gretchen Walley Bankr. W.D. Wash. Case No. 12-21326 Chapter 11 Petition filed November 8, 2012 In re Parkland Partners, LLC Bankr. W.D. Wash. Case No. 12-47624 Chapter 11 Petition filed November 8, 2012 See http://bankrupt.com/misc/wawb12-47624.pdf represented by: David C. Smith, Esq. LAW OFFICES OF DAVID SMITH, PLLC E-mail: ecf@davidsmithlaw.com In re Joseph Bretz Bankr. C.D. Calif. Case No. 12-47572 Chapter 11 Petition filed November 9, 2012 In re Sylvia Montoya Bankr. C.D. Calif. Case No. 12-47612 Chapter 11 Petition filed November 9, 2012 In re John Mog Bankr. N.D. Calif. Case No. 12-33184 Chapter 11 Petition filed November 9, 2012 In re 915 Riverside Drive, LLC Bankr. D. Conn. Case No. 12-52012 Chapter 11 Petition filed November 9, 2012 See http://bankrupt.com/misc/ctb12-52012.pdf represented by: James M. Nugent, Esq. Harlow, Adams, and Friedman E-mail: jmn@quidproquo.com In re Marcia Hegeman Bankr. D. Conn. Case No. 12-52016 Chapter 11 Petition filed November 9, 2012 In re The Batcave, LLC Bankr. N.D. Ill. Case No. 12-44613 Chapter 11 Petition filed November 9, 2012 See http://bankrupt.com/misc/ilnb12-44613.pdf represented by: Konstantine T. Sparagis, Esq. Law Offices of Konstantine Sparagis P C E-mail: gsparagi@yahoo.com In re Andrew Aloian Bankr. S.D. Iowa Case No. 12-03502 Chapter 11 Petition filed November 9, 2012 In re Kent Lindemuth Bankr. D. Kans. Case No. 12-23060 Chapter 11 Petition filed November 9, 2012 In re Roy Switzer Bankr. E.D. Ky. Case No. 12-52860 Chapter 11 Petition filed November 9, 2012 In re Thomas Helmkampf Bankr. E.D. Mo. Case No. 12-50843 Chapter 11 Petition filed November 9, 2012 In re 276 Fulton Corp. Bankr. E.D.N.Y. Case No. 12-76598 Chapter 11 Petition filed November 9, 2012 See http://bankrupt.com/misc/nyeb12-76598.pdf Filed pro se In re Unity Residential Services Bankr. E.D.N.C. Case No. 12-08067 Chapter 11 Petition filed November 9, 2012 See http://bankrupt.com/misc/nceb12-08067.pdf represented by: Calvin C. Craig, III, Esq. E-mail: ccraiglaw@aol.com In re Norris Child Care Consultants, Inc. Bankr. M.D. Pa. Case No. 12-06533 Chapter 11 Petition filed November 9, 2012 See http://bankrupt.com/misc/pamb12-06533.pdf represented by: Robert E. Chernicoff, Esq. Cunningham and Chernicoff PC E-mail: rec@cclawpc.com In re Ortiz & Rodriguez Corporation dba Funeraria Ortiz Bankr. D.P.R. Case No. 12-09041 Chapter 11 Petition filed November 9, 2012 See http://bankrupt.com/misc/prb12-09041.pdf represented by: Nydia Gonzalez Ortiz, Esq. Santiago & Gonzalez E-mail: sgecf@yahoo.com In re Ricardo Rivera Balaguer Bankr. D.P.R. Case No. 12-09037 Chapter 11 Petition filed November 9, 2012 In re Eduardo Lerma Bankr. W.D. Tex. Case No. 12-32149 Chapter 11 Petition filed November 9, 2012 In re Tuscan Salon and Spa LLC Bankr. W.D. Wash Case No. 12-21351 Chapter 11 Petition filed November 9, 2012 See http://bankrupt.com/misc/wawb12-21351.pdf represented by: M. Wayne Boyack, Esq. E-mail: wayneb@boyacklawoffice.com In re Hong Gardner Bankr. N.D. Calif. Case No. 12-49145 Chapter 11 Petition filed November 12, 2012 In re Norman Exline Bankr. N.D. Calif. Case No. 12-49146 Chapter 11 Petition filed November 12, 2012 In re Viem Mai Bankr. N.D. Calif. Case No. 12-49147 Chapter 11 Petition filed November 12, 2012 In re Amy Cabilatazan Bankr. N.D. Calif. Case No. 12-58129 Chapter 11 Petition filed November 12, 2012 In re Davinci Development Properties, LLC Bankr. D. Conn. Case No. 12-32507 Chapter 11 Petition filed November 12, 2012 See http://bankrupt.com/misc/ctb12-32507.pdf represented by: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN E-mail: ressmul@yahoo.com In re David Kropff Bankr. M.D. Fla. Case No. 12-07343 Chapter 11 Petition filed November 12, 2012 In re Mangal Enterprises, Inc. dba Green Cove Springs Shell Bankr. M.D. Fla. Case No. 12-07344 Chapter 11 Petition filed November 12, 2012 See http://bankrupt.com/misc/flmb12-07344.pdf represented by: Brett A. Mearkle, Esq. LAW OFFICE OF BRETT A. MEARKLE E-mail: bmearkle@mearklelaw.com In re NBAve, Inc. Bankr. E.D.N.C. Case No. 12-08074 Chapter 11 Petition filed November 12, 2012 See http://bankrupt.com/misc/nceb12-08074.pdf represented by: Travis Sasser, Esq. SASSER LAW FIRM E-mail: tsasser@carybankruptcy.com In re Barbara Gromek Bankr. N.D. Ohio Case No. 12-18298 Chapter 11 Petition filed November 12, 2012 In re Joseph Gromek Bankr. N.D. Ohio Case No. 12-18298 Chapter 11 Petition filed November 12, 2012 In re Texas Restaurant Development Concepts, Inc. dba Le Bistro Bankr. S.D. Tex. Case No. 12-38517 Chapter 11 Petition filed November 12, 2012 See http://bankrupt.com/misc/txsb12-38517.pdf represented by: Johnie J. Patterson, Esq. WALKER & PATTERSON, P.C. E-mail: jjp@walkerandpatterson.com In re Aseem Chaudhary Bankr. E.D. Va. Case No. 12-16722 Chapter 11 Petition filed November 12, 2012 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Carmel Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2012. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $775 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***