/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/121203.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 3, 2012, Vol. 16, No. 336 Headlines A123 SYSTEMS: U.S. Seeks to Protect Rights in Battery Plant ADELPHIA COMMS: Pauley Indemnity Dispute Remanded to State Court AIR CANADA: S&P Affirms 'B-/B-' Issuer Credit Ratings; Outlook Neg AIRPORT OFFICE: Court Overrules Objection to Luzerne Tax Claim ALAN MURRAY: Court Rejects Tenants' Plan Objections ALLIED IRISH: Boasts of Substantial Progress in Restructuring ALLIED IRISH: Mortgage Bank Raises EUR500MM from Bond Issue ALLY FINANCIAL: To Sell Europe & Latin America Operations to GM ALLY FINANCIAL: To Offer $500 Million Senior Guaranteed Notes ALLY FINANCIAL: Has $500MM Underwriting Pact with Barclays, et al. AMERICAN AIRLINES: IRS Rule Change Will Resonate Beyond AMR Case AMERICAN AIRLINES: Amends Consulting Agreement With ICF AMERICAN AIRLINES: McKinsey to Provide Consulting Services AMERICAN AIRLINES: Committee Can Hire Collateral Verifications AMERICAN AIRLINES: Fees Top $200 Million in Less Than 1 Year AMERICAN AIRLINES: Fails to Halt PSAs Union Election AMERICAN APPAREL: Store Sales Increased 12% Through Nov. 26 AMF BOWLING: Pachulski and Christian & Barton Represent Committee AMF BOWLING: Can Walk Away From 11 Bowling Facility Leases AMF BOWLING: Wins Jan. 10 Extension of Schedules Filing Deadline AMF BOWLING: Can Hire Kurtzman Carson as Claims & Noticing Agent ANCHOR BANCORP: Extends Maturity of 2008 Credit Pact to June 2013 APPLIED DNA: Enters Into $2MM Securities Purchase Pact with Crede APPLIED MINERALS: Has LOI with HCT to Form Cosmetic Joint Venture ARMSTRONG ENERGY: S&P Assigns 'B-' Corporate Credit Rating ARVCO CAPITAL: SEC Lawsuit Stays in Nevada District Court ASARCO LLC: Callahan Fails to Dismiss Contribution Suit ASHLAND UNIVERSITY: Moody's Cuts Rating on 2010 Bonds to 'B3' ATP OIL & GAS: In Talks to Amend DIP Agreement with Credit Suisse ATP OIL & GAS: Equity Professionals May End Up Working for Free BERMO ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors BERNARD L. MADOFF: Trustee Seeks $61.7-Mil. for 5 Months' Work BERRY PLASTICS: Swings to $23-Mil. Net Income in Sept. 29 Qtr. BILLMYPARENTS INC: Has Endorsement Agreement with Justin Bieber BIOLIFE SOLUTIONS: Inks 4th Amendment to Lease with Monte Villa BIOPACK ENVIRONMENTAL: Files Last Year's Form 10-Qs BIOZONE PHARMACEUTICALS: Amends 8.3MM Common Shares Prospectus BLAST ENERGY: Inks Fourth Amendment to Centurion Promissory Notes BUENA YUMA: Files for Chapter 11 in Phoenix BUENA YUMA: Case Summary & 3 Unsecured Creditors BUILDERS FIRSTSOURCE: S&P Revises Outlook on 'CCC' CCR to Negative CANAL CAPITAL: $620,000 Profit for 9 Months Ended July 31, 2012 CASCADES INC: S&P Revises Outlook on 'BB-' CCR on Weak Performance CATALYST PAPER: Picks MLR as Stalking Horse for Snowflake Assets CENTER OF HOPE: Nevada Court Expunges Lis Pendens CENTRAL EUROPEAN: Asks Russian Standard to Make a Purchase Offer CEREPLAST INC: Hans Black Discloses 7% Equity Stake CIRCLE STAR: Receives Funding for Drilling Operations in Kansas CITIZENS SECURITY: A.M. Best Hikes Finc'l Strength Rating to 'B' CLEVELAND CORPORATE: Case Summary & 20 Largest Unsecured Creditors CONTOUR PROPERTIES: Case Summary & 20 Largest Unsecured Creditors CULPEPER BUSINESS: Voluntary Chapter 11 Case Summary DC DEVELOPMENT: Dec. 4 Hearing on Sale of Wisp Ski Resort DEWEY & LEBOEUF: Judge Might Cut Partners Committee's Fees DEWEY & LEBOEUF: Creditors Panel Has Standing to Sue Ex-Management DEWEY & LEBOEUF: Former Partners Committee Defeats Disbandment Bid DRINK INC: Case Summary & Largest Unsecured Creditor DYNEGY INC: District Court to Hear Peabody Contract Dispute E-DEBIT GLOBAL: Initiates Search for New CDO and COO EASTMAN KODAK: Competing Lenders Improve Terms of New Loan EMPIRE RESORTS: Joseph D'Amato Keeps CEO Position Until 2015 ESQUIRE GROUP: Case Summary & 12 Largest Unsecured Creditors FIRST PLACE: Bank Auction Scheduled for Dec. 13 FLORIDA GAMING: To Sell Centers to Silvermark for $115 Million FTLL ROBOVAULT: Lender Wants Trustee Named or Case Converted GLC LTD: Right to Jury Trial Doesn't Necessitate Suit Dismissal GOLDEN GAMING: Moody's Assigns 'Caa1' CFR/PDR; Outlook Stable GMX RESOURCES: Shareholders OK Reverse Stock Split Proposal GREEKTOWN SUPERHOLDINGS: S&P Assigns 'B' Corporate Credit Rating GREGORY G. MONARDO: Court Won't Approve Accord With Family Trust HAMPTON ROADS: Taps James Johnson as Bank Senior Credit Officer HCSB FINANCIAL: Incurs $3.6 Million Net Loss in Third Quarter HERCULES OFFSHORE: Collects $10 Million from Angola Drilling HG MARKETING: Voluntary Chapter 11 Case Summary HOMER CITY: Combined Plan Hearing on Thursday HOMER CITY: Has Green Light to Tap Epiq as Noticing Agent HORNE INTERNATIONAL: Evan Auld-Susott Resigns as CEO HOSTESS BRANDS: Receives Final Approval to Wind Down Business HUDSON PRODUCTS: S&P Affirms 'B-' Corporate Credit Rating HUNTER FAN: Moody's Rates $142MM First Lien Credit Facility 'B1' HUNTER FAN: S&P Affirms 'B-' Corp. Credit Rating; Outlook Positive IAP WORLDWIDE: S&P Lowers CCR to 'SD' on Debt Restructuring INOVA TECHNOLOGY: Another Amendment to 375MM Shares Prospectus JAMES EATON: Dist. Court Affirms Ch. 7 Trustee's Accord With Bank KAK LLC: Voluntary Chapter 11 Case Summary KNIGHT CAPITAL: GETCO Offers to Buy Knight at $3.50 Per Share LAURA DAWN: Voluntary Chapter 11 Case Summary LEHMAN BROTHERS: Bingham McCutchen Reduces Fees to $22.6-Mil. LEHMAN BROTHERS: Broker Settles Claim With German Liquidator LIFE TABERNACLE-CULLEN: Voluntary Chapter 11 Case Summary LINN ENERGY: S&P Affirms 'B' Rating on Unsecured Debt; Off Watch LOCATION BASED TECH: Incurs $8.7 Million Net Loss in Fiscal 2012 LOCATION BASED TECH: Taps Omni View to Raise $11-Mil. Financing LODGENET INTERACTIVE: OKs $2-Mil. Key Employee Incentive Plan LODGENET INTERACTIVE: In Active Talks for Bankruptcy LODGENET INTERACTIVE: S&P Cuts CCR to 'CC' on Restructuring LLOYD E. MITCHELL: Has Approval to Implement Accord With Insurers M/I HOMES: S&P Affirms 'B-' Corp. Credit Rating; Outlook Positive MCCLATCHY COMPANY: Moody's Affirms 'Caa1' CFR; Outlook Stable MCCLATCHY COMPANY: S&P Rates Proposed $750-Mil. Secured Notes 'B' MIRACLE TEMPLE: Case Summary & 3 Largest Unsecured Creditors MJM STONE: Voluntary Chapter 11 Case Summary MHEALTH INSURANCE: A.M. Best Assigns 'B' Finc'l Strength Rating MOHEGAN TRIBAL: Reports $13.9 Million Net Income in Sept. 30 Qtr. MOMENTIVE PERFORMANCE: Has Exchange Offer for $1.1-Bil. Sr. Notes MPG OFFICE: Two Executives to Serve as "At-Will" Employees MUNICIPAL MORTGAGE: Expects Units to Buy $22.8 Million Debt NATIONS INSURANCE: A.M. Best Affirms 'B' Finc'l Strength Rating NACHSHON DRAIMAN: Suit Against Shabat Survives Dismissal Bid NCR CORPORATION: Moody's Reviews 'Ba1' CFR for Downgrade NISKA GAS: Moody's Affirms 'B1' CFR/PDR; Outlook Stable OAK TREE: Voluntary Chapter 11 Case Summary OCTAVIAR ADMINISTRATION: Drawbridge Okayed for Direct Appeal PACIFIC GOLD: Judge Denies Black Diamond's Motion for Injunction PACIFIC GOLD: DTC Lifts "Deposit Chill" on Common Stock PARKWAY INVESTMENT: Case Summary & 12 Unsecured Creditors PAYMENT DATA: FiCentive Settles Litigation with SmartCard PENNFIELD CORP: Carlisle Authorized to Buy Feed Producer PENTON BUSINESS: S&P Affirms 'B-' CCR on Farm Progress Acquisition PINNACLE AIRLINES: To Work Out Concessions With Pilots PINNACLE AIRLINES: Expects to Reduce CRJ-200 Fleet Next year PIPELINE DATA: Lenders May Credit Bid in Sale PIPELINE DATA: Sec. 341 Creditors' Meeting Set for Dec. 17 PIPELINE DATA: Won't Have Official Unsecured Creditors Committee PISHIT PATEL: Court Won't Appoint Receiver for Shepard Stake POSITIVEID CORP: Scott Silverman Discloses 6.7% Equity Stake POWERMATE HOLDING: Court Rejects Contractor's Bonus Claim POWERS LAKE: Clawback Suit Against Little Limestone Goes to Trial POWERWAVE TECHNOLOGIES: Fails to Comply with Market Value Rule R & R SULEIMAN: Voluntary Chapter 11 Case Summary RACING SERVICES: 8th Cir. Keeps Ruling on Insurance Policy REPRISE THEATRE: Names Stephen Eich as Reorganization Consultant RESIDENTIAL CAPITAL: Homeowners Sue for Bogus Practices RESIDENTIAL CAPITAL: Wagner Sues RFC to Enjoin Foreclosure RIVERBED TECHNOLOGY: Moody's Assigns 'Ba2' CFR; Outlook Stable SAGE PRODUCTS: Moody's Assigns 'B2' CFR/PDR; Outlook Stable SAN BERNARDINO: Calpers Contends Pensions Can't Be Touched SAND TECHNOLOGY: Reports C$2.8 Million Net Income in Fiscal 2012 SATCON TECHNOLOGY: Creditors Claim to Find Defects in Liens SB PARTNERS: SRE Clearing Owns 37% of Units Outstanding SEARS HOLDINGS: Board OKs $1 Million Cash Awards to Executives SEARS HOLDINGS: Edward Lampert Discloses 56.2% Equity Stake SECUREALERT INC: Appoints Guy Dubois as Director SOUTH FRANKLIN CIRCLE: Employs Vorys as Tax Compliance Counsel SOUTH FRANKLIN CIRCLE: Hiring North Shores as Bond Consultant STAMP FARMS: Files for Chapter 11 in Michigan STUMBERG LANE: Case Summary & 4 Largest Unsecured Creditors SUNDALE LTD: Loses 11th Cir. Appeal on FACE Dispute SUNDALE LTD: Mortgage Holder Awarded $3.2-Mil. in Fees SUNDALE LTD: Final Orders Permissible on Recoupment Claims SUNRISE REAL ESTATE: Incurs $1.4 Million Net Loss in 3rd Quarter SUPERIOR AIR: Court Dismisses Lycoming, Textron Lawsuit SWARTVILLE LLC: Court Denies TD Bank's Dismissal or Conversion Bid SWISS CHALET: Court Declines to Issue Final Decree Closing Case TC GLOBAL: Kachi Partners Offers $4.3 Million for Shops TCF FINANCIAL: S&P Lowers Preferred Stock Rating to 'BB' THERAPEUTIC SOLUTIONS: Posts $261,600 Net Income in 3rd Quarter THERAPEUTICSMD INC: R. Finizio, et al., to Offer 3.9MM Shares THOMPSON CREEK: Closes $350 Million Senior Secured Notes Offering TITUS TRANSPORTATION: Drivers' Class Suit Stays in Kansas Court TRANS ENERGY: Court Grants Motion for Summary Judgment vs. EQT TRANS ENERGY: Reports Production Results on Anderson Wells TRAVELPORT HOLDINGS: Inks New Hardware & Software Pact with IBM TRIBUNE CO: Syndicating $1.4BB Financing for Bankruptcy Exit TRIBUNE CO: Proposes Settlement with EZ Buy et al TRIBUNE CO: Has Accord With Warner Brothers, New Line TRIBUNE CO: TV Guide Seeks Stay Relief to Prosecute Claim TROY PLAZA: Case Summary & 20 Largest Unsecured Creditors UNIVERSITY GENERAL: Acquires Sleep and Imaging Center in Texas US AIRWAYS: S&P Gives 'B+' Rating on $128MM Class B Certificates VERMILLION INC: Appoints Bruce Huebner as Interim CEO VERTIS HOLDINGS: FTC Waiting Period Expired Nov. 16 VESTA CORPORATION: Moody's Affirms 'B2' Corp. Family Rating VHGI HOLDINGS: Incurs $4.8 Million Net Loss in June 30 Quarter VIASPACE INC: Borrows $20K; Loan Converted Into 1.9MM Shares VICTORY ENERGY: CFO Resigns, Search for Replacement Ongoing VISCOUNT SYSTEMS: Raises $500,000 from Units Offering WATERFRONT OFFICE: Files for Chapter 11 in Connecticut WATERFRONT OFFICE: Case Summary & 20 Largest Unsecured Creditors WILLIAM SATTERFIELD: 11th Cir. Affirms Ruling on Suit v. Trustee WSG CORAL: Case Summary & 7 Unsecured Creditors YOSHI'S SAN: Involuntary Chapter 11 Case Summary ZOGENIX INC: Appoints Scott Shively as EVP and CCO * Moody's: Low-Rated Issuers' Healthcare Covenant Quality Weak * Junk Defaults to Jump in November and December * Lawsuit Against Trustee Barred by 1881 Supreme Court Ruling * 7th Cir. Appoints Catherine Furay as W.D. Wis. Bankruptcy Judge * BOND PRICING -- For Week From Nov. 26 to 30, 2012 ********* A123 SYSTEMS: U.S. Seeks to Protect Rights in Battery Plant ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Justice Department said in papers filed last week with the bankruptcy court in Delaware that A123 Systems Inc. can't auction off the business next month without protecting the interests of the U.S. in the plant the government partially funded. According to the report, the business will be sold at auction on Dec. 6, with the first bid from Johnson Controls Inc. China's Wanxiang Group Corp. is expected to be a competing bidder. The government said it gave grants to A123 for development of the plant. So far, the government put up $135 million, with $120 million still potentially available for disbursement. The report relates that in return for the grants, the government says it has a right to compensation if the buyer disposes of the property. The Justice Department also says a buyer can't take over the right to receive further grants without government permission. The government wants the bankruptcy judge to craft a sale-approval order so the eventual buyer can't escape from obligations arising from the grant. Debt includes $143.8 million on 3.75% convertible subordinated notes and $22.5 million owing to Wanxiang on a pre-bankruptcy loan. The convertible subordinated notes last traded on Nov. 27 for 44 cents on the dollar according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes traded as low as 21.25 cents on the day of bankruptcy. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designs, develops, manufactures and sells advanced rechargeable lithium-ion batteries and battery systems and provides research and development services to government agencies and commercial customers. A123 is the recipient of a $249 million federal grant from the Obama administration. Pre-bankruptcy, A123 had an agreement to sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. A123 didn't make a $2.7 million payment due Oct. 15 on $143.75 million in 3.75% convertible subordinated notes due 2016. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012, with a deal to sell its auto-business assets to Johnson Controls Inc. The deal with JCI is valued at $125 million, and subject to higher offers at a bankruptcy auction. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Debt includes $143.8 million on 3.75% convertible subordinated notes. Other liabilities include $22.5 million on a bridge loan owing to Wanziang. About $33 million is owed to trade suppliers. The Hon. Kevin J. Carey presides over the case. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. An official committee of unsecured creditors has been appointed in the case. The Committee is represented by lawyers at Brown Rudnick LLP and Saul Ewing LLP. ADELPHIA COMMS: Pauley Indemnity Dispute Remanded to State Court ---------------------------------------------------------------- On appeal from a judgment following a bench trial, Adelphia Communications Corporation, also known as Century Mendocino Cable TV doing business as Adelphia Cable Communications, challenges a trial court's conclusion that Pauley Construction, Inc., was not required to indemnify Adelphia pursuant to an indemnification clause found in a construction contract entered into between the parties. Adelphia, through its insurers, had sought contractual indemnity from Pauley Construction for all the costs and expenses associated with the defense and settlement of an underlying personal injury action, which arose when an employee working for a subcontractor of Pauley Construction was severely injured on the job. The trial court found Adelphia was not entitled to enforce the indemnity agreement because shortly after the employee's accident, Adelphia had filed for bankruptcy. The trial court concluded that Adelphia's bankruptcy filing constituted a material breach of the parties' contract, thereby relieving Pauley Construction from further performance, including any duty to defend or indemnify Adelphia. Adelphia appeals, claiming that the "trial court's finding that Adelphia's filing of a bankruptcy petition alone constituted a material breach excusing Pauley's performance under the indemnity agreement was error in contradiction to both federal bankruptcy law and fundamental contract law." In a Nov. 28, 2012 decision available at http://is.gd/yuFcvkfrom Leagle.com, the Court of Appeals of California, First District, Division Four, agreed, and held the trial court's ruling was erroneous. Pauley Construction has filed a cross-appeal, arguing that even if the appeals court determines the trial court erred in concluding that the bankruptcy filing constituted a material breach of the parties' contract, Pauley Construction is still entitled to judgment as a matter of law. The appeals court dismissed Pauley Construction's purported cross- appeal as unnecessary. Nevertheless, the appeals court said that disputed issues of material fact preclude a ruling in Pauley Construction's favor as a matter of law. Consequently, the appeals court reversed and remanded the matter for further proceedings. The case is, ADELPHIA COMMUNICATIONS CORPORATION etc., Cross- Complainant and Appellant, v. PAULEY CONSTRUCTION, INC., Cross- Defendant and Appellant; ARROWOOD INDEMNITY COMPANY et al., Interveners and Appellants, No. A131078 (Calif. App. Ct.). About Adelphia Communications Based in Coudersport, Pennsylvania, Adelphia Communications Corporation was once the fifth-biggest cable company. Adelphia served customers in 30 states and Puerto Rico, and offered analog and digital video services, Internet access and other advanced services over its broadband networks. Adelphia collapsed in 2002 after disclosing that founder John Rigas and his family owed $2.3 billion in off-balance-sheet debt on bank loans taken jointly with the company. Mr. Rigas is serving 12 years in prison, and his son Timothy is serving 15 years. Adelphia Communications and its more than 200 affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 02-41729) on June 25, 2002. Willkie Farr & Gallagher represented the Debtors in their restructuring effort. PricewaterhouseCoopers served as the Debtors' financial advisor. Kasowitz, Benson, Torres & Friedman LLP and Klee, Tuchin, Bogdanoff & Stern LLP represented the Official Committee of Unsecured Creditors. Adelphia Cablevision Associates of Radnor, L.P., and 20 of its affiliates, collectively known as Rigas-Managed Entities, were entities that were previously held or controlled by members of the Rigas family. In March 2006, the rights and titles to these entities were transferred to certain subsidiaries of Adelphia Cablevision LLC. The RME Debtors filed for Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 06-10622 through 06-10642) on March 31, 2006. Their cases were jointly administered under Adelphia Communications and its debtor-affiliates' Chapter 11 cases. The Bankruptcy Court confirmed the Debtors' Joint Chapter 11 Plan of Reorganization on Jan. 5, 2007. That plan became effective on Feb. 13, 2007. The Adelphia Recovery Trust, a Delaware Statutory Trust, was formed pursuant to the Plan. The Trust holds certain litigation claims transferred pursuant to the Plan against various third parties and exists to prosecute the causes of action transferred to it for the benefit of holders of Trust interests. Lawyers at Kasowitz, Benson, Torres & Friedman, LLP (NYC), represent the Adelphia Recovery Trust. AIR CANADA: S&P Affirms 'B-/B-' Issuer Credit Ratings; Outlook Neg ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'A' long-term issuer credit and senior secured debt ratings on Winnipeg Airports Authority Inc. (WAA or the authority). The outlook is negative. "In part, the ratings reflect the authority's full autonomy in setting charges and fees, strong operating performance in recent years, and regional monopoly business position," said Standard & Poor's credit analyst Mario Angastiniotis. The ratings on WAA reflect Standard & Poor's opinion of these weaknesses: A relatively high debt burden that Standard & Poor's estimates peaked at C$332 per enplaned passenger in 2010, but expects to materially decline in the medium term. This is high compared with that of similarly rated domestic peers and materially higher than when we assigned the rating. Standard & Poor's expects that more aggressive rate-setting or a significant rebound in passenger growth could buttress WAA's expected medium-term debt levels; Fully amortizing debt service coverage ratio (DSCR) that we project declined to about 1.21x in 2011, which is low for the rating level and is likely to recover slowly in the next three years, given risks to passenger traffic stemming from continuing global recession risks; "A degree of risk associated with the airport's relatively high carrier concentration, with the authority's two main air carriers (Air Canada [B-/Negative/--] and WestJet Airlines Ltd. [not rated]) as well as risks stemming from U.S. air carrier consolidation in the U.S. Mitigating this risk somewhat, in our view, are the authority's high level of domestic-based and origin and destination (O&D) passenger composition and its strong service area that allows for relatively easy replacement of air carriers if an airline carrier becomes insolvent. However, we believe these two carriers have stronger brand names and market positions than do many international carriers," S&P said. S&P's view of the following strengths supports the ratings: The authority's full autonomy from Transport Canada to set aeronautical charges and airport improvement fees without regulatory or senior government approval; Its regional monopoly business position in providing an essential service within what we consider a strong and well- diversified service area. Winnipeg James Armstrong Richardson International Airport is Manitoba's only major airport and is among the largest passenger airports in Canada; "A high level of O&D passenger composition at about 93%, which we believe attests to the airport's resilience during adverse market conditions. In our opinion, this provides for relatively more stable revenues, with lower dependence on connecting and nondomestic traffic than peers, making WAA less vulnerable to disruptive industry events," S&P said. "The negative outlook on WAA reflects our expectation for lower- than-expected DSCR in the next year compared with that of peers and the potential for additional slippage given the risks to transborder and international air travel in the near term. If WAA's DSCR remains close to current levels in the next year, it could lead to a downgrade. Conversely, a faster-than-expected recovery is needed for us to revise the negative outlook to stable. Moreover, a significant improvement in WAA's DSCRs and a material decline in its debt per enplaned passenger level are necessary for an upgrade," S&P said. AIRPORT OFFICE: Court Overrules Objection to Luzerne Tax Claim -------------------------------------------------------------- Bankruptcy Judge John J. Thomas overruled the objection of Airport Office Complex, Inc., to two Proofs of Claim filed by the Luzerne County Tax Claim Bureau for taxes accruing in years 2003 through 2011, prior to the Debtor's Chapter 11 filing. Airport is the owner of a parcel of land, improved with an office building, straddling Pittston Township and Avoca Borough. LCTCB was created under state law and empowered to collect taxes owing the County and overdue taxes owing to the various municipalities, school districts, and institutional districts. Since they are charged with liquidation of the obligation only, it had no role in the actual assessment and, thus, no direct knowledge of its computation. It is, however, charged with filing proofs of claim in appropriate cases such as this one. The LCTCB has filed a Motion for Relief from Stay to pursue a tax sale on the Debtor's real estate. At the conclusion of the hearing, the Court granted relief from the automatic stay to LCTCB. In his ruling, Judge Thomas held that the LCTCB has simply acknowledged that its role is to collect taxes that have been assessed. Its determination is based on the tax rates and the existing assessments. "Alteration in assessments are the responsibility of others," Judge Thomas said. "I again reference state law which supports the proposition that a pending assessment appeal does not affect the collectability of the tax. 54 P.S. Sec. 8854(c). It is for these reasons that I will overrule Airport's objection to the Proofs of Claim filed by LCTCB, without prejudice to filing a new objection should the property in question be reassessed by either the County or this Court." The case is AIRPORT OFFICE COMPLEX, INC., Objector, v. LUZERNE COUNTY TAX CLAIM BUREAU, Claimant, Adv. Proc. No. 5-11-ap-00244- JJT (Bankr. M.D. Pa.). A copy of the Court's Nov. 28, 2012 Opinion is available at http://is.gd/YZBh72from Leagle.com. Airport Office Complex, Inc., based in Avoca, Pennsylvania, filed for Chapter 11 bankruptcy (Bankr. M.D. Pa. Case No. 11-05550) on Aug. 9, 2011. Judge John J. Thomas presides over the case. Stephen G. Bresset, Esq., at Bresset & Santora, LLC, serves as the Debtor's counsel. In its petition, the Debtor estimated $500,001 to $1 million in assets, and $1 million to $10 million in debts. The petition was signed by Steven Yankowski, president/secretary. ALAN MURRAY: Court Rejects Tenants' Plan Objections --------------------------------------------------- Bankruptcy Judge Alan Jaroslovsky removed one obstacle to confirmation of the Chapter 11 plan of reorganization of Alan and Elizabeth Murray, overruling objections filed by a group of the Debtors' tenants, Timothy and Marcia Evans, Mike and Katie Garrett, Jack and Joyce Nielsen, Ken and Laurie Podesta-Daniels, and Barbara J. Smith. Judge Jaroslovsky said the tenants have objected only as a knee-jerk response to the Murrays' plan. "If the Murrays propose it, they are against it," the judge said. "The Tenants do not appear to have given any thought whatsoever as to the consequences to them if a plan is not confirmed." The Tenants do not have allowed claims. They have been engaged in litigation for several years with the Murrays, who own the recreational vehicle park where they have lease rights. The Tenants raise three points of objection: that their lease rights are somehow prejudiced by the plan, that the plan is not feasible, and it has been proposed in bad faith. According to the Court, none has any merit. According to the Court, the objection regarding their lease rights is a "straw man." The plan does not provide for modification of their rights, only a voluntary alternative one tenant has already accepted. The Debtor's counsel has made representations orally and in writing that nothing in the plan modifies the leases, which are to be assumed. The judge said any order confirming the Debtors' plan will contain a provision that, notwithstanding any term to the contrary in the plan, the rights of the Tenants under their leases are not modified and their leases, to the extent assumable, are assumed in all respects. A copy of the Court's Nov. 27, 2012 Memorandum is available at http://is.gd/KnUvsUfrom Leagle.com. Alan and Elizabeth Murray filed a joint Chapter 11 bankruptcy petition (Bankr. N.D. Calf. Case No. 11-10535) on Feb. 15, 2011. ALLIED IRISH: Boasts of Substantial Progress in Restructuring ------------------------------------------------------------- Allied Irish Banks said in a press release that substantial progress has been made in the second half of 2012 in restructuring the bank and implementing Allied Irish Bank, P.L.C's revised strategy and cost efficiency initiatives to ensure a reduction in the bank's operating cost base of EUR0.4bn by 2014. The core business environment remains challenging although there is continued evidence of stabilisation. Non-core deleveraging of EUR17 billion has been achieved to the end of October 2012, which is 83% of the Central Bank of Ireland's end 2013 deleveraging target of EUR20.5bn. Overall cumulative discounts are within PCAR capital assumptions. The design and build phase of Allied's Mortgage Arrears Resolution Strategy is now through the pilot phase and its Mortgage and SME arrears strategies have been finalized. Allied has a dedicated unit working with customers in difficulty and it expects to make significant progress in the implementation of solutions for customers in difficulty in the next 6-12 months. Internally, the bank's new organizational structure has been implemented, allowing staff to better engage with and support AIB's business and retail customers while enabling the bank to implement necessary cost reduction measures. Over 1,000 staff have departed AIB under the Voluntary Severance Programme, which includes an Early Retirement Scheme, with 1,700 staff expected to have departed by the end of December 2012. The minimum target of 2,500 voluntary staff departures is expected to be achieved by 2014. In consultation with AIB's staff and Unions it is implementing the Pay & Benefits changes announced in June. These announced measures include up to 15% pay cuts at senior levels, pay freezes at more junior levels and the transfer of all staff who are members of a Defined Benefit Pension scheme to a Defined Contribution Scheme. Forty-five sub-office closures and 6 branch amalgamations in the Republic of Ireland will have been completed by end November, and 8 branches and 4 sub-offices will have closed in AIB UK by the end of December. An additional 16 branches are expected to close in the Republic of Ireland in 2013. Additional services are being offered through An Post in affected areas. Trading & Funding Update Continued management focus on Net Interest Margin (NIM) has led to a reduction in overall pricing of AIB's deposits in both the Irish and UK markets which, coupled with ongoing repricing of its loan assets has had a positive effect in arresting the decline in NIM. A further positive effect of product repricing is expected to flow through in 2013. However, the continued lower interest rate environment remains challenging, impacting yields earned on capital and free funds and the pace of deposit repricing. The cost of the Eligible Liabilities Guarantee (ELG) is trending lower year on year as the quantum of covered liabilities continues to reduce following the withdrawal of AIB UK from the scheme in August 2012. Liabilities covered by ELG stood at EUR32 billion at end of October compared to EUR40 billion at end December 2011. AIB is prepared for the expiry of the ELG. Customer accounts continue to increase notwithstanding outflows of EUR1.4bn as a result of the announced closure of AIB's operations in Isle of Man and Channel Islands. Balances have increased across all business segments and AIB UK's withdrawal from the ELG has had a negligible overall effect on deposit balances. Ongoing progress in deleveraging and growth in customer accounts has seen continued improvement in the loan to deposit ratio which reduced below 120% at the end of October (including loans held for sale) from 125% at end of June. Arising from these balance sheets movements our reliance on ECB funding has continued to reduce since end June. AIB notes the recent improvement in market sentiment towards Irish issuers. The bank will re-engage with the market in a balanced and measured manner which is consistent with its strategy to ensure viable funding levels whilst building confidence with external investors. AIB notes Fitch's recent revision of the outlook on AIB Group's long term Issuer Default Rating from negative to stable. This is the first positive revision for AIB in almost four years and is reflective of further signs of economic stabilisation. AIB is ahead year to date, of both its SME lending target of EUR3.5bn set by the Government and its internal new mortgage lending target of EUR1bn. AIB has sanctioned 23,040 credit facilities to SME customers to the value of EUR3.4bn and EUR1.1bn in lending to 5,922 mortgage customers in the year to date to September. However, new customer lending demand remains muted in the current challenging economic environment and therefore overall credit growth is limited. The intense focus on cost reduction and the benefits of the cost initiatives will predominantly be reflected in the 2013 cost base, reflecting timing and implementation of our cost saving actions. Asset Quality Bad debt provisions for 2012 will materially reduce from elevated levels in 2011. Arrears in AIB's Irish Mortgage and SME portfolios have increased, however the pace of increase in criticised loans is slowing. Although economic conditions remain challenging, we have seen signs of a stabilisation in underlying economic indicators, including house prices. AIB has materially accelerated the rate of engagement with customers in difficulty and are now providing forbearance and restructuring options to customers to ensure sustainable repayment schedules. c. 70% of mortgage customers with revised terms are adhering to the new conditions. The outlook for 2013 and beyond will be influenced by the domestic and international economic environment, however, AIB expects bad debt provisions to continue to trend lower year on year and to return to more normalised levels over time. Capital AIB remains well capitalised, notwithstanding the continued impact of overall losses which is partially offset by a reduction in Risk Weighted Assets driven by a reduced balance sheet size. AIB continue to assess the impact of Basel III on capital ratios and are actively evaluating and developing a number of mitigating actions to protect regulatory capital. About Allied Irish Banks Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. The Company reported a loss of EUR2.29 billion in 2011, a loss of EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009. Allied Irish's consolidated statement of financial position for the year ended Dec. 31, 2011, showed EUR136.65 billion in total assets, EUR122.18 billion in total liabilities and EUR14.46 billion in shareholders' equity. Allied Irish's balance sheet at June 30, 2012, showed EUR129.85 billion in total assets, EUR116.59 billion in total liabilities and EUR13.26 billion in total shareholders' equity. ALLIED IRISH: Mortgage Bank Raises EUR500MM from Bond Issue ----------------------------------------------------------- AIB Mortgage Bank (AIBMB) agreed a EUR500 million 3-year secured ACS bond issue under its EUR20 billion Mortgage Covered Securities Programme. AIBMB is a wholly owned subsidiary of Allied Irish Banks, p.l.c. (AIB). This is the first public ACS issue since June 2007 and marks AIB's second return to the funding markets in 2012 following the issuance of GBP395m Sterling Prime RMBS in May. ACS bonds are not guaranteed by the Irish State. This 3-year deal was priced at a spread over mid-swaps of 270 basis points and was over 4 times oversubscribed. The total order book was c. EUR2.3bn with in excess of 170 international investors reflecting a well diversified geographic profile. Over 95% of demand came from outside Ireland. The final sizing of the transaction, notwithstanding the level of demand, is consistent with AIB's stated strategy to engage with the market in a balanced and measured manner with a series of well placed, well timed, appropriately structured and priced transactions, to ensure viable funding levels while building confidence with external investors. About Allied Irish Banks Allied Irish Banks, p.l.c. -- http://www.aibgroup.com/-- is a major commercial bank based in Ireland. It has an extensive branch network across the country, a head office in Dublin and a capital markets operation based in the International Financial Services Centre in Dublin. AIB also has retail and corporate businesses in the UK, offices in Europe and a subsidiary company in the Isle of Man and Jersey (Channel Islands). Since the onset of the global and Irish financial crisis, AIB's relationship with the Irish Government has changed significantly. As at Dec. 31, 2010, the Government, through the National Pension Reserve Fund Commission ("NPRFC"), held 49.9% of the ordinary shares of the Company (the share of the voting rights at shareholders' general meetings), 10,489,899,564 convertible non- voting ("CNV") shares and 3.5 billion 2009 Preference Shares. On April 8, 2011, the NPRFC converted the total outstanding amount of CNV shares into 10,489,899,564 ordinary shares of AIB, thereby increasing its holding to 92.8% of the ordinary share capital. In addition to its shareholders' interests, the Government's relationship with AIB is reflected through formal and informal oversight by the Minister and the Department of Finance and the Central Bank of Ireland, representation on the Board of Directors (three non-executive directors are Government nominees), participation in NAMA, and otherwise. The Company reported a loss of EUR2.29 billion in 2011, a loss of EUR10.16 billion in 2010, and a loss of EUR2.33 billion in 2009. Allied Irish's consolidated statement of financial position for the year ended Dec. 31, 2011, showed EUR136.65 billion in total assets, EUR122.18 billion in total liabilities and EUR14.46 billion in shareholders' equity. Allied Irish's balance sheet at June 30, 2012, showed EUR129.85 billion in total assets, EUR116.59 billion in total liabilities and EUR13.26 billion in total shareholders' equity. ALLY FINANCIAL: To Sell Europe & Latin America Operations to GM --------------------------------------------------------------- Ally Financial Inc., on Nov. 21, 2012, entered into a Purchase and Sale Agreement with General Motors Financial Company, Inc., a wholly-owned subsidiary of General Motors Co., pursuant to which AFI will sell its motor vehicle finance operations in Europe and Latin America to GM Financial. On the same date, AFI entered into a Share Transfer Agreement with GM Financial, pursuant to which GM Financial will acquire AFI's 40% interest in a motor vehicle finance joint venture in China. In exchange for the sale of the International Businesses and the JV Interest, AFI will receive a premium to tangible book value of approximately US$550 million. Based on the third quarter tangible book value for the combined operations, AFI would receive approximately US$4.2 billion in proceeds from these transactions. The purchase price is subject to post-closing adjustments based on the net asset value of Target Companies and certain other items. AFI's book value for the International Businesses and the JV Interest on a GAAP basis as of the third quarter of 2012 was approximately US$4.1 billion, which included approximately US$470 million of associated goodwill. The transactions include auto finance operations in Germany, the U.K., Austria, France, Italy, Switzerland, Sweden, Belgium, the Netherlands, Luxembourg, Brazil, Mexico, Colombia and Chile, as well as the JV Interest in China. The sale of the International Businesses will take the form of the sale of substantially all of the equity interests directly and indirectly held by AFI in the entities that comprise the International Businesses. The China Share Transfer Agreement and the Purchase and Sale Agreement are not cross-conditioned upon each other. The closings under the Purchase and Sale Agreement are expected to close in stages by region during 2013; the portions of the International Businesses in (i) Brazil, (ii) Europe and (iii) Mexico, Chile and Colombia will close once all closing conditions with respect to that region have been satisfied. The completion of the sale of each region under the Purchase and Sale Agreement is subject to certain customary conditions relating to the region being sold, including, among others, the receipt of required governmental approvals, the absence of any injunction or other legal prohibition on the completion of a sale, the accuracy of the representations and warranties of the other party, material compliance by the other party with its obligations under the Purchase and Sale Agreement, and the delivery of certain audited financial statements relating to the International Businesses. The closing under the China Share Transfer Agreement is subject to similar conditions relating to the receipt of government approvals, the accuracy of representations and warranties, the material compliance by the other party with its obligations and satisfactory negotiation of a new joint venture agreement between GM Financial and the ongoing members of the joint venture. The Purchase and Sale Agreement contains provisions requiring the Target Companies, at the time they are sold to GM Financial, to repay loans to AFI and other AFI subsidiaries that are not Target Companies, subject to the potential extension of a portion of then-existing intercompany loans to certain European Target Companies on mutually agreed, market terms for up to one year following the final closing. The Purchase and Sale Agreement contains certain termination rights for AFI and GM Financial, as the case may be, applicable upon, among other events and subject to certain exceptions, (i) sales of designated regions having not been completed on or prior to July 1, 2014, (ii) a material breach relating to unsold designated regions by the other party that is not or cannot be cured within 45 days' notice of such breach or by July 1, 2014, if earlier, or (iii) the passage of 60 days after the issuance of a written denial in respect of certain required regulatory approvals for unsold designated regions and the exhaustion of all avenues of appeal. The China Share Transfer Agreement is subject to analogous termination rights. A more detailed copy of the Form 8-K is available for free at: http://is.gd/vxxet4 About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. Ally reported a net loss of $157 million in 2011, compared with net income of $1.07 billion in 2010. Net income was $310 million for the three months ended March 31, 2012. * * * In February 2012, Fitch Ratings downgraded the long-term Issuer Default Rating (IDR) and the senior unsecured debt rating of Ally Financial and its subsidiaries to 'BB-' from 'BB'. The Rating Outlook is Negative. The downgrade primarily reflects deteriorating operating trends in ResCap, which has continued to be a drag on Ally's consolidated credit profile, as well as exposure to contingent mortgage-related rep and warranty and litigation issues tied to ResCap, which could potentially impact Ally's capital and liquidity levels. As reported by the TCR on May 22, 2012, Standard & Poor's Ratings Services revised its outlook on Ally Financial Inc. to positive from stable. At the same time, Standard & Poor's affirmed its ratings, including its 'B+' long-term counterparty credit and 'C' short-term ratings, on Ally. "The outlook revision reflects our view of potentially favorable implications for Ally's credit profile arising from measures the company announced May 14, 2012, designed to resolve issues relating to Residential Capital LLC, Ally's troubled mortgage subsidiary," said Standard & Poor's credit analyst Tom Connell. In the May 28, 2012, edition of the TCR, DBRS, Inc., has placed the ratings of Ally Financial Inc. and certain related subsidiaries, including its Issuer and Long-Term Debt rating of BB (low), Under Review Developing. This rating action follows the decision by Ally's wholly owned mortgage subsidiary, Residential Capital, LLC (ResCap) to file a pre- packaged bankruptcy plan under Chapter 11 of the U.S. Bankruptcy Code. ALLY FINANCIAL: To Offer $500 Million Senior Guaranteed Notes ------------------------------------------------------------- Ally Financial Inc. filed with the U.S. Securities and Exchange Commission a free writing prospectus relating to the offering of $500,000,000 of 3.125% senior guaranteed notes due 2016. Interest will be paid semi-annually, in arrears on January 15 and July 15 of each year, until maturity, commencing July 15, 2013. Joint Book-Running Managers of the offering are Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., and Goldman, Sachs & Co. A copy of the FWP is available for free at http://is.gd/Mt4U5q About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. Ally reported a net loss of $157 million in 2011, compared with net income of $1.07 billion in 2010. Net income was $310 million for the three months ended March 31, 2012. The Company's balance sheet at Sept. 30, 2012, showed $182.48 billion in total assets, $163.71 billion in total liabilities and $18.76 billion in total equity. * * * In February 2012, Fitch Ratings downgraded the long-term Issuer Default Rating (IDR) and the senior unsecured debt rating of Ally Financial and its subsidiaries to 'BB-' from 'BB'. The Rating Outlook is Negative. The downgrade primarily reflects deteriorating operating trends in ResCap, which has continued to be a drag on Ally's consolidated credit profile, as well as exposure to contingent mortgage-related rep and warranty and litigation issues tied to ResCap, which could potentially impact Ally's capital and liquidity levels. As reported by the TCR on May 22, 2012, Standard & Poor's Ratings Services revised its outlook on Ally Financial Inc. to positive from stable. At the same time, Standard & Poor's affirmed its ratings, including its 'B+' long-term counterparty credit and 'C' short-term ratings, on Ally. "The outlook revision reflects our view of potentially favorable implications for Ally's credit profile arising from measures the company announced May 14, 2012, designed to resolve issues relating to Residential Capital LLC, Ally's troubled mortgage subsidiary," said Standard & Poor's credit analyst Tom Connell. In the May 28, 2012, edition of the TCR, DBRS, Inc., has placed the ratings of Ally Financial Inc. and certain related subsidiaries, including its Issuer and Long-Term Debt rating of BB (low), Under Review Developing. This rating action follows the decision by Ally's wholly owned mortgage subsidiary, Residential Capital, LLC (ResCap) to file a pre- packaged bankruptcy plan under Chapter 11 of the U.S. Bankruptcy Code. ALLY FINANCIAL: Has $500MM Underwriting Pact with Barclays, et al. ------------------------------------------------------------------ Ally Financial Inc. entered into an underwriting agreement with Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Goldman, Sachs & Co., as representatives of the several Underwriters, pursuant to which Ally agreed to sell to the Underwriters $500,000,000 aggregate principal amount of 3.125% Senior Guaranteed Notes due 2016. The Notes will be guaranteed by Ally US LLC, IB Finance Holding Company, LLC, and GMAC Continental Corporation, each a subsidiary of Ally, on an unsubordinated basis. The Securities were registered pursuant to Ally's shelf registration statement on Form S-3 (File No. 333-171519), which became automatically effective on Jan. 3, 2011. The Underwriting Agreement contains customary representations, warranties and covenants of the Company, conditions to closing, indemnification obligations of the Company and the Underwriters, and termination and other customary provisions. A copy of the Underwriting Agreement is available at: http://is.gd/Yye74V About Ally Financial Ally Financial Inc., formerly GMAC Inc. -- http://www.ally.com/-- is one of the world's largest automotive financial services companies. The company offers a full suite of automotive financing products and services in key markets around the world. Ally's other business units include mortgage operations and commercial finance, and the company's subsidiary, Ally Bank, offers online retail banking products. Ally operates as a bank holding company. GMAC obtained a $17 billion bailout from the U.S. government in exchange for a 56.3% stake. Private equity firm Cerberus Capital Management LP keeps 14.9%, while General Motors Co. owns 6.7%. Ally reported a net loss of $157 million in 2011, compared with net income of $1.07 billion in 2010. Net income was $310 million for the three months ended March 31, 2012. The Company's balance sheet at Sept. 30, 2012, showed $182.48 billion in total assets, $163.71 billion in total liabilities and $18.76 billion in total equity. * * * In February 2012, Fitch Ratings downgraded the long-term Issuer Default Rating (IDR) and the senior unsecured debt rating of Ally Financial and its subsidiaries to 'BB-' from 'BB'. The Rating Outlook is Negative. The downgrade primarily reflects deteriorating operating trends in ResCap, which has continued to be a drag on Ally's consolidated credit profile, as well as exposure to contingent mortgage-related rep and warranty and litigation issues tied to ResCap, which could potentially impact Ally's capital and liquidity levels. As reported by the TCR on May 22, 2012, Standard & Poor's Ratings Services revised its outlook on Ally Financial Inc. to positive from stable. At the same time, Standard & Poor's affirmed its ratings, including its 'B+' long-term counterparty credit and 'C' short-term ratings, on Ally. "The outlook revision reflects our view of potentially favorable implications for Ally's credit profile arising from measures the company announced May 14, 2012, designed to resolve issues relating to Residential Capital LLC, Ally's troubled mortgage subsidiary," said Standard & Poor's credit analyst Tom Connell. In the May 28, 2012, edition of the TCR, DBRS, Inc., has placed the ratings of Ally Financial Inc. and certain related subsidiaries, including its Issuer and Long-Term Debt rating of BB (low), Under Review Developing. This rating action follows the decision by Ally's wholly owned mortgage subsidiary, Residential Capital, LLC (ResCap) to file a pre- packaged bankruptcy plan under Chapter 11 of the U.S. Bankruptcy Code. AMERICAN AIRLINES: IRS Rule Change Will Resonate Beyond AMR Case ---------------------------------------------------------------- Experts said a key Internal Revenue Service rule change that allowed AMR Corp., the parent of American Airlines Inc., to freeze and retain pilot pension plans could change the face of labor relations in Chapter 11 cases of all sizes, Lisa Uhlman of BankruptcyLaw360 reported. 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: Amends Consulting Agreement With ICF ------------------------------------------------------- AMR Corp. filed an application to approve the terms of its amended consulting agreement with ICF SH&E Inc. Under the amended agreement, ICF SH&E agreed to appraise AMR's aviation-related assets in connection with the fresh start accounting required upon emergence from Chapter 11 protection, and to conduct a valuation of the company's aircraft leasehold improvements. The firm will receive $395,000 for the appraisals of AMR's aviation-related assets and $20,000 for the appraisals of the aircraft leasehold improvements. A court hearing to consider approval of the application was set for November 29. 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: McKinsey to Provide Consulting Services ---------------------------------------------------------- AMR Corp. filed a supplemental application to include McKinsey & Company Canada and three other firms as part of the team providing management consultant and restructuring advisory services to the company. The three other firms are McKinsey & Company Inc. Belgium, McKinsey & Company Inc. Italy, and McKinsey & Company S.L. The firms will be paid for their services in accordance with the same compensation structure previously approved by the bankruptcy court. AMR will also reimburse the firms for work-related expenses. A court hearing to consider approval of the application is scheduled for November 29. The Debtors previously obtained approval to employ McKinsey Recovery & Transformation Services U.S., LLC, McKinsey & Company, Inc. United States, and McKinsey & Company, Inc. Japan as their management consultants, nunc pro tunc to Dec. 12, 2011. Pursuant to an agreement with the Debtors, the services of McKinsey Recovery, McKinsey & Co. Inc., and its Japan-based office will be provided in three phases. Business plan support and adaptation services will be provided during the first two phases. During the initial phase, the firms will work with the Debtors' senior management team to evaluate their five-year business plan. The business plan will be adapted by the firms during the second phase to reflect changes in economic climate and other conditions. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Committee Can Hire Collateral Verifications -------------------------------------------------------------- The committee of AMR Corp.'s unsecured creditors obtained court approval to hire Collateral Verifications LLC as its consultant. Collateral Verifications will assist the committee to evaluate the settlement proposed by AMR that restructures the financings or provides for the return of 216 Embraer regional jet aircraft. The firm will also provide litigation consulting services and testimony in court in connection with the settlement. 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: Fees Top $200 Million in Less Than 1 Year ------------------------------------------------------------ Fees and expenses top $200 million in AMR-American Airlines' bankruptcy case despite not yet hitting their first year anniversary in bankruptcy, according to The Dallas Morning Herald. In AMR's operating report for the month ended September 30, 2012, disbursements to bankruptcy professionals totaled $15,428,000, comprised of $13,643,000 paid to the Debtors' more than 20 bankruptcy professionals and $1,785,000 paid to the Official Committee of Unsecured Creditors' bankruptcy professionals. 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: Fails to Halt PSAs Union Election ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that American Airlines Inc. struck out in the U.S. Supreme Court in what may have been the company's last shot at stopping passenger-service agents from holding an election to determine whether they will have a union. According to the report, on Nov. 19, the U.S. Court of Appeals in New Orleans refused to hold up implementation of its October ruling overturning a decision from the district court barring the election. The airline filed papers with the Supreme Court on Nov. 21 asking the high court to hold up the election. Justice Antonin Scalia denied the stay on Nov. 27. The bankrupt airline won a victory in June when a federal district judge in Dallas ruled that the National Mediation Board was improperly holding an election by passenger-service agents because 50% hadn't shown a desire for union representation. The NMB and the Communications Workers of America appealed, contending only 35% support was required. The U.S. Court of Appeals in New Orleans sided with the workers in ruling on Oct. 3 that the NMB was correct in using a 35% threshold. American sought a rehearing in the appeals court and lost on Oct. 30. The appeals court also denied a stay pending an attempt at persuading the Supreme Court to take an appeal. The Communications Workers said the NMB scheduled the vote to begin Dec. 4 and continue through Jan. 15. The union said the airline "spent nearly a year and millions of dollars trying to block employees' democratic right to vote." The stay motion in the Supreme Court was American Airlines Inc. v. National Mediation Board, 12a512, U.S. Supreme Court. The appeal in the circuit court was American Airlines Inc. v. National Mediation Board, 12-10680, U.S. Court of Appeals for the Fifth Circuit (New Orleans). 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 APPAREL: Store Sales Increased 12% Through Nov. 26 ----------------------------------------------------------- American Apparel, Inc., announced preliminary comparable sales for the period Nov. 1, 2012, through Nov. 26, 2012, and reported that comparable store sales increased 12%, including an 8% increase in comparable store sales for its retail store channel and a 39% increase in net sales for its online channel. "November represents our 18th consecutive month of positive comparable sales," said Dov Charney, chairman and chief executive of American Apparel, Inc. "This very solid performance was achieved in all our businesses: retail, wholesale, and online with sales growth across almost all major markets and product categories. Black Friday was particularly strong and we more than doubled our Cyber Monday volume when compared to last year. We also saw further improvement in store productivity as we achieved record sales in terms of average sales per store in November. We think this reflects positively on our expectation that we will continue to increase comparable store sales next year, paving the way for additional profitability gains." About American Apparel Los Angeles, Calif.-based American Apparel, Inc. (NYSE Amex: APP) -- http://www.americanapparel.com/-- is a vertically integrated manufacturer, distributor, and retailer of branded fashion basic apparel. As of September 2010, American Apparel employed over 10,000 people and operated 278 retail stores in 20 countries, including the United States, Canada, Mexico, Brazil, United Kingdom, Ireland, Austria, Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden, Switzerland, Israel, Australia, Japan, South Korea and China. Amid liquidity problems and declining sales, American Apparel in early 2011 reportedly tapped law firm Skadden, Arps, Slate, Meagher & Flom and investment bank Rothschild Inc. for advice on a restructuring. In April 2011, American Apparel said it raised $14.9 million in rescue financing from a group of investors led by Canadian financier Michael Serruya and private equity firm Delavaco Capital Corp., allowing the casual clothing retailer to meet obligations to its lenders for the time being. Under the deal, the investors were buying 15.8 million shares of common stock at 90 cents apiece. The deal allows the investors to purchase additional 27.4 million shares at the same price. The Company reported a net loss of $39.31 million in 2011 and a net loss of $86.31 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $333.64 million in total assets, $319.76 million in total liabilities and $13.87 million in total stockholders' equity. AMF BOWLING: Pachulski and Christian & Barton Represent Committee ----------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of AMF Bowling Worldwide Inc. and its affiliated debtors are being represented by: Jeffrey N. Pomerantz, Esq. PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Boulevard, 13th Floor Los Angeles, CA 90067-4100 Telephone: (310) 277-6910 Facsimile: (310) 201-0760 - and - Robert J. Feinstein, Esq. PACHULSKI STANG ZIEHL & JONES LLP 780 Third Avenue, 36th Floor New York, NY 10017-2024 Telephone: (212) 561-7700 Facsimile: (212) 561-7777 - and - Augustus C. Epps, Jr., Esq. Michael D. Mueller, Esq. Jennifer M. McLemore, Esq. CHRISTIAN & BARTON, LLP 909 East Main Street, Suite 1200 Richmond, VA 23219-3095 Telephone: (804) 697-4100 Facsimile: (804) 697-6112 E-mail: aepps@cblaw.com mmueller@cblaw.com jmclemore@cblaw.com W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, on Nov. 19 named five members to the Unsecured Creditors Committee. The members are: (1) Statecourt Enterprises, Inc. Attn: John E. Silverman 40 East 69th Street New York, NY 10021 Tel: 212-249-1550 Fax: 212-249-5451 Email: jes@rosengroupinc.com (2) Strike 'N Spare Attn: Joseph S. Gall 221 W. Lexington, Suite 400 Independence, MO 64051 Tel: 816-836-5050 Fax: 816-836-8966 Email: jsg@hfmlegal.com (3) VIP Cleaning Solutions, LLC Attn: William A. Pesello 10-2 Granada Crescent White Plains, NY 10603 Tel: 914-400-6680 Fax: not provided Email: vipcleaningsolutions@ymail.com (4) Pasadena Hastings Center Attn: Madeleine Mueller P.O. Box 1209 Carpinteria, CA 93014-1209 Tel: 805-684-4178 Fax: 805-566-9101 Email: missco1@msn.com (5) Pepsi-Cola Fountain Company, Inc. Attn: Chad New 1100 Reynolds Blvd Winston-Salem, NC 27105 Tel: 336-896-5781 Fax: 336-896-6003 Email: chad.new@pepsico.com About AMF Bowling Worldwide AMF Bowling Worldwide Inc. is the largest operator of bowling centers in the world. The Company 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. At the time of the bankruptcy filing, AMF operated 262 bowling centers across the United States and, through its non-Debtor facilities, and 8 bowling centers in Mexico -- more than three times the number of bowling centers of its closest competitor. 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 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. AMF BOWLING: Can Walk Away From 11 Bowling Facility Leases ---------------------------------------------------------- AMF Bowling Worldwide Inc. and its affiliated debtors have sought and obtained Bankruptcy Court permission to reject unexpired leases for 11 bowling facilities and 1 retail facility in Arizona, California, Georgia, Illinois, Minnesota, Ohio, Rhode Islands, Tennessee, Texas, effective as of Nov. 12. AMF also won authority to abandon certain equipment, fixtures, furniture, or other personal property that may be located at the Premises. Prior to the Petition Date, the Debtors ceased operations at the 11 bowling facilities and 1 retail facility. Notwithstanding the cessation of operations at the Premises, the Debtors remain obligated to pay rent under the Leases. The Debtors want to reject the Leases at the Premises where the Debtors have previously ceased operations before the Petition Date. By rejecting the Leases, the Debtors believe they will be able to save roughly $4.8 million over the remaining duration of the Leases. Moreover, by rejecting the Leases, the Debtors also will avoid certain other contractual obligations under the Leases, including certain property taxes, utilities, insurance, and other related charges associated with the Leases. In considering their options with respect to the Leases before the Petition Date, the Debtors and their advisors evaluated the possibility of certain assignments or subleases of the leased Premises. The Debtors have determined that the transactional costs and postpetition occupancy costs associated with marketing the Leases exceed any marginal benefit that would be derived from potential assignments or subleases. About AMF Bowling Worldwide AMF Bowling Worldwide Inc. is the largest operator of bowling centers in the world. The Company 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. At the time of the bankruptcy filing, AMF operated 262 bowling centers across the United States and, through its non-Debtor facilities, and 8 bowling centers in Mexico -- more than three times the number of bowling centers of its closest competitor. 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 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. AMF BOWLING: Wins Jan. 10 Extension of Schedules Filing Deadline ---------------------------------------------------------------- AMF Bowling Worldwide Inc. and its affiliated debtors won a 45-day extension, until Jan. 10, 2013, of their deadline to file schedules of assets and liabilities, and statements of financial affairs. The extension is without prejudice to the Debtors' right to seek another extension. The U.S. Trustee is authorized to schedule a meeting of creditors under 11 U.S.C. Section 341 after the 40-day deadline imposed under Rule 2003(a) of the Federal Rules of Bankruptcy Procedure. The Debtors estimate they have thousands of creditors and other parties in interest. Given the size and complexity of the Debtors' business operations, the Debtors said preparing the Schedules and Statements accurately and with sufficient detail will require significant attention from the Debtors' personnel and advisors. Absent an extension of time, the Debtors' attention would be diverted from business operations at a critical time. Moreover, the Dbetors said creditors and other parties in interest will not be harmed by the extension of the Schedules and Statements filing deadline; even under the extended deadline, the Schedules and Statements would be filed in advance of the Section 341 Meeting, any planned bar date, or other significant event in the chapter 11 cases. In addition, the Debtors submit that focusing the attention of their key accounting and legal personnel on critical operational and chapter 11 compliance issues during the early days of the chapter 11 cases will help the Debtors make a smoother transition into chapter 11 and, therefore, ultimately will maximize the value of their estates for the benefit of creditors and all parties in interest. About AMF Bowling Worldwide AMF Bowling Worldwide Inc. is the largest operator of bowling centers in the world. The Company 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. At the time of the bankruptcy filing, AMF operated 262 bowling centers across the United States and, through its non-Debtor facilities, and 8 bowling centers in Mexico -- more than three times the number of bowling centers of its closest competitor. 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 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. AMF BOWLING: Can Hire Kurtzman Carson as Claims & Noticing Agent ---------------------------------------------------------------- AMF Bowling Worldwide Inc. and its affiliated debtors may employ Kurtzman Carson Consultants LLC as notice, claims, and balloting agent, the Bankruptcy Court ruled last month. The Debtors have thousands of potential creditors. In addition to the creditors, there are thousands of other parties in interest in the Debtors? chapter 11 cases. Although the Office of the Clerk of the United States Bankruptcy Court ordinarily would serve notices on the Debtors? creditors and other parties in interest and administer claims against the Debtors, the Debtors said the Clerk?s Office may not have the resources to undertake such tasks, especially in light of the sheer magnitude of the Debtors? creditor body and the tight timelines that frequently arise in chapter 11 cases. The Debtors said KCC's retention is the most effective and efficient manner of noticing the thousands of creditors and parties in interest of the filing of the chapter 11 cases and other developments in the chapter 11 cases. Albert Kass, the Vice President of Corporate Restructuring Services of Kurtzman Carson, attests that KCC neither holds nor represents an interest materially adverse to the Debtors? estates nor has a connection to the Debtors, their creditors, or their related parties with respect to any matter for which KCC will be employed. The firm has received a $50,000 retainer from the Debtors. About AMF Bowling Worldwide AMF Bowling Worldwide Inc. is the largest operator of bowling centers in the world. The Company 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. At the time of the bankruptcy filing, AMF operated 262 bowling centers across the United States and, through its non-Debtor facilities, and 8 bowling centers in Mexico -- more than three times the number of bowling centers of its closest competitor. 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 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. ANCHOR BANCORP: Extends Maturity of 2008 Credit Pact to June 2013 ----------------------------------------------------------------- Anchor BanCorp Wisconsin Inc. entered into Amendment No. 9 to the Amended and Restated Credit Agreement, dated as of June 9, 2008, among the Company, the lenders from time to time a party thereto, and U.S. Bank National Association, as administrative agent for the Lenders. The Amendment provides the following: * The maturity date of the Credit Agreement is June 30, 2013. * The outstanding balance under the Credit Agreement from time to time will bear interest at a rate equal to 15% per annum. * An amendment fee in an amount equal to 0.75% of the original loan commitment ($872,250) is due on the earlier of (i) the Maturity Date or (ii) the date on which the Company's obligations and liabilities are due or declared due. * AnchorBank, fsb, the Company's wholly-owned subsidiary, will maintain the following financial covenants: -- a Tier 1 Leverage Ratio of not less than 4.00% at all times. -- a Total Risk Based Capital Ratio of not less than 8.00% at all times. -- the ratio of the sum of Non-Performing Loans plus other real estate owned by AnchorBank, fsb to the sum of Gross Loans plus other real estate owned by AnchorBank, fsb will not exceed 13.00% at all times. As of Nov. 30, 2012, the outstanding principal balance under the Credit Agreement was $116.3 million, and accrued interest and fees were $47.5 million and $6.4 million, respectively. The Credit Agreement and the Amendment also contain customary representations, warranties, conditions, indemnification and events of default for agreements of such type. A copy of the Ninth Amendment is available for free at: http://is.gd/E79LMK About Anchor Bancorp Madison, Wisconsin-based Anchor BanCorp Wisconsin Inc. is a registered savings and loan holding company incorporated under the laws of the State of Wisconsin. The Company is engaged in the savings and loan business through its wholly owned banking subsidiary, AnchorBank, fsb. Anchor BanCorp and its wholly-owned subsidiaries, AnchorBank fsb, each consented to the issuance of an Order to Cease and Desist by the Office of Thrift Supervision. The Corporation and the Bank continue to diligently work with their financial and professional advisors in seeking qualified sources of outside capital, and in achieving compliance with the requirements of the Orders. The Corporation and the Bank continue to consult with the successors to the OTS, Federal Reserve, the the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation on a regular basis concerning the Corporation's and Bank's proposals to obtain outside capital and to develop action plans that will be acceptable to federal regulatory authorities, but there can be no assurance that these actions will be successful, or that even if one or more of the Corporation's and Banks proposals are accepted by the Federal regulators, that these' proposals will be successfully implemented. While the Corporation's management continues to exert maximum effort to attract new capital, significant operating losses in fiscal 2009, 2010 and 2011, significant levels of criticized assets and low levels of capital raise substantial doubt as to the Corporation's ability to continue as a going concern. If the Corporation and Bank are unable to achieve compliance with the requirements of the Orders, or implement an acceptable capital restoration plan, and if the Corporation and Bank cannot otherwise comply with those commitments and regulations, the OCC or FDIC could force a sale, liquidation or federal conservatorship or receivership of the Bank. The Company reported a net loss of $36.73 million on $127.25 million of total interest income for the fiscal year ended March 31, 2012, a net loss of $41.17 million on $166.46 million of total interest income for the year ended March 31, 2011, and a net loss of $176.91 million on $217.08 million of total interest income for the year ended March 31, 2010. McGladrey LLP, in Madison, Wisconsin, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended March 31, 2012. The independent auditors noted that all of the subsidiary bank's regulatory capital amounts and ratios are below the capital levels required by the cease and desist order. The subsidiary bank has also suffered recurring losses from operations. Failure to meet the capital requirements exposes the Corporation to regulatory sanctions that may include restrictions on operations and growth, mandatory asset dispositions, and seizure of the subsidiary bank. In addition, the Corporation's outstanding balance under the Amended and Restated Credit Agreement is currently in default. These matters raise substantial doubt about the ability of the Corporation to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $2.66 billion in total assets, $2.70 billion in total liabilities and a $36.03 million total stockholders' deficit. APPLIED DNA: Enters Into $2MM Securities Purchase Pact with Crede ----------------------------------------------------------------- Applied DNA Sciences, Inc., entered into a securities purchase agreement with Crede CG II, Ltd. on Nov. 28, 2012. Pursuant to the Purchase Agreement, at the initial closing on Nov. 29, 2012, Crede purchased 10,752,688 shares of the Company's Common Stock at a price of $0.186 which was the consolidated closing bid price of the Common Stock on the day prior to the signing of the Purchase Agreement. The Company received gross proceeds of $2,000,000. Pursuant to the Purchase Agreement, Crede agreed to purchase an additional $5,500,000 of the Company's Series A Convertible Preferred Stock at a purchase price of $1,000 per share on the date a registration statement is declared effective by the Securities and Exchange Commission. The Company also issued Crede at the Initial Closing warrants with a term of five years allowing it to purchase 10,752,688 shares of Common Stock at a price of $0.2232 which is equal to a 20% premium to the consolidated closing bid price of the Common Stock on the day prior to the signing of the Purchase Agreement. At the Initial Closing, the Company also issued Crede a second set of Warrants allowing it to purchase 29,569,892 shares of Common Stock, which is equal to one share of Common Stock for every share of Common Stock which would be issuable to it if it fully converted the Series A Preferred into Common Stock at the Fixed Conversion Price. A full-text copy of the Form 8-K is available for free at: http://is.gd/s1IrNh About Applied DNA Stony Brook, N.Y.-based Applied DNA Sciences, Inc., is principally devoted to developing DNA embedded biotechnology security solutions in the United States. RBSM LLP, in New York, noted in its report on Applied DNA's fiscal 2011 financial results that the Company has suffered recurring losses and does not have significant cash or other material assets, nor does it have an established source of revenues sufficient to cover its operations, which raises substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $10.51 million for the fiscal year ended Sept. 30, 2011, compared with a net loss of $7.91 million during the prior year. The Company's balance sheet at June 30, 2012, showed $1.97 million in total assets, $653,910 in total liabilities, all current, and $1.31 million in total stockholders' equity. APPLIED MINERALS: Has LOI with HCT to Form Cosmetic Joint Venture ----------------------------------------------------------------- Applied Minerals, Inc., and HCT Group signed a letter of intent to form a joint venture to develop and market an all-natural line of specialty skincare products based on Dragonite Halloysite Clay. The initial line of products will take advantage of the unmatched purity and performance of Applied Minerals' Dragonite-PureWhite to address the high-end skincare market and will also be utilized in applications such as fragrances, deodorants, color cosmetics, nail products and extenders. Dragonite-PureWhite is a cosmetic-grade aluminosilicate clay mineral possessing a unique micro-tubular morphology ideally suited for the cosmetics industry. It is produced exclusively by Applied Minerals from its wholly owned Dragon Mine deposit in Utah, the world's purest commercial source of Halloysite Clay. The hollow micro-tubular structure can serve as a natural carrier for an extended/sustained-release of active ingredients, extending the life of a cosmetic application while increasing its efficacy. The joint venture will produce proprietary products that will take advantage of these properties, providing significant performance enhancements in products related to: * Skin Care * Sun Care * Nail Care * Hair Care * Color Cosmetics * Fragrances * Deodorants * Extenders * Natural Insect Repellants Dragonite-PureWhite is equally effective when used without an active agent, owing to its high surface area, cation exchange capacity and porosity, which makes it particularly effective at absorbing excess oil and toxins from clogged skin pores. Independent laboratory studies have validated the effectiveness of Halloysite as an extremely effective acne bacterial reagent. Tim Thorpe, president of HCT, commented, "We are very excited to be working with Applied Minerals. The joint venture will call upon a world class R&D team to develop highly innovative consumer products featuring Applied Minerals' unique material and technological know-how, allowing us to bring exclusive new products and concepts to HCT's customers." Andre Zeitoun, president and CEO of Applied Minerals, said, "We are very excited to have established this partnership with an industry leader like HCT. Their award-winning consumer product innovations and turnkey manufacturing capabilities have earned them the trust of the largest brands in the marketplace." The global market for efficient natural cosmetics has grown exponentially in recent years along with the demand for unique natural carriers. In targeting this market, HCT and Applied Minerals are in preliminary discussions with branding and distribution partners that will complement and benefit from the key attributes of the all-natural product line to be developed and marketed by their joint venture. Environmental Working Group's Skin Deep Cosmetics Database, an industry organization promoting the protection of human health and the environment, reports that there is a growing trend in the cosmetics industry toward natural product formulations and ingredient transparency as consumers increasingly avoid products containing chemicals such as formaldehyde-releasers and triclosan. The joint venture between Applied Minerals and HCT is uniquely positioned to capitalize on this developing change in customer preferences. Dragonite-PureWhite meets the strict performance specifications of the cosmetics industry while being biocompatible and non-toxic. About Applied Minerals New York City-based Applied Minerals, Inc. (OTC BB: AMNL) is a leading global producer of halloysite clay used in the development of advanced polymer, catalytic, environmental remediation, and controlled release applications. The Company operates the Dragon Mine located in Juab County, Utah, the only commercial source of halloysite clay in the western hemisphere. Halloysite is an aluminosilicate clay that forms naturally occurring nanotubes. The Company reported a net loss attributable to the Company of $7.48 million in 2011, a net loss attributable to the Company of $4.76 million in 2010, and a net loss attributable to the Company of $6.76 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $9.53 million in total assets, $2.32 million in total liabilities and $7.21 million in total stockholders' equity. Going Concern The Company has incurred material recurring losses from operations. At March 31, 2012, the Company had a total accumulated deficit of approximately $43,084,500. For the three months ended March 31, 2012, and 2011, the Company sustained net losses from exploration stage before discontinued operations of approximately $4,056,700 and $1,695,100, respectively. The Company said that these factors indicate that it may be unable to continue as a going concern for a reasonable period of time. The Company's continuation as a going concern is contingent upon its ability to generate revenue and cash flow to meet its obligations on a timely basis and management's ability to raise financing or dispose of certain non-core assets as required. If successful, this will mitigate the factors that raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning At Dec. 31, 2011, and 2010, the Company had accumulated deficits of $39,183,632 and $31,543,411, respectively, in addition to limited cash and unprofitable operations. For the year ended Dec. 31, 2011, and 2010, the Company sustained net losses before discontinued operations of $7,476,864 and $4,891,525, respectively. As of March 15, 2012, the Company has not commercialized the Dragon Mine and has had to rely on cash flow generated from the sale of stock and convertible debt to fund its operations. If the Company is unable to fund its operations through the commercialization of the Dragon Mine, the sale of equity or debt or a combination of both, it may have to file bankruptcy. ARMSTRONG ENERGY: S&P Assigns 'B-' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to St. Louis, Mo.-based Armstrong Energy Inc. The outlook is stable. "At the same time, we assigned our 'B-' issue- level rating to the company's proposed $200 million senior secured notes due 2019. The recovery rating is '4', indicating our expectation of average (30%-50%) recovery for bondholders in the event of a payment default," S&P said. "The corporate credit rating takes into account our view of the company's business risk profile as 'vulnerable' and its financial risk profile as 'highly leveraged.' Armstrong is a pure-play coal producer that generated revenues of about $360 million and EBITDA of about $50 million in the trailing-12-month period ended Sept. 30, 2012. We based our business risk score on our view of the company's participation in the competitive and highly cyclical coal industry. The assessment reflects currently weak industry conditions and the challenges of coal mining, which include price volatility, weather-related disruptions, and increasingly stringent environmental and safety regulations," S&P said. "Our stable rating outlook for Armstrong reflects our view that the company's operating performance will support credit metrics that are in line with our expectations for the 'B-' corporate credit rating. We anticipate that Armstrong's products will produce EBITDA in the range of $45 million to $55 million annually over the next 12-24 months, with leverage starting at about 7.5x and unwinding to about 6.5x, and interest coverage rising from approximately 1.5x to 1.7x during that time frame. This view assumes flat pricing for 2013 at roughly $45, with a marginal increase projected for 2014 with tons sold increasing at an average rate of just under 7% over the period," S&P said. ARVCO CAPITAL: SEC Lawsuit Stays in Nevada District Court --------------------------------------------------------- The lawsuit, SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. ARVCO CAPITAL RESEARCH, LLC, ARVCO FINANCIAL VENTURES, LLC, ALFRED J.R. VILLALOBOS, and FEDERICO ("FRED") R. BUENROSTRO, Defendants, No. 3:12-cv-00221-RCJ-WGC (D. Nev.), will stay in district court after District Judge Robert C. Jones denied the defendants' request for an order referring the civil action to the U.S. Bankruptcy Court in Nevada. On April 23, 2012, the SEC filed a complaint alleging a fraudulent scheme in violation of federal securities laws. The Commission seeks injunctive relief, disgorgement of ill-gotten gains, and civil penalties against the Defendants. In 2010, the State of California filed a separate civil law enforcement action in California state court against the defendants, alleging a fraudulent scheme to corrupt the California Public Employees' Retirement System, captioned California ex rel. Brown v. Villalobos, 453 B.R. 404, 407 (D. Nev. 2011). One month after the California enforcement action was filed, Mr. Villalobos filed a Chapter 11 bankruptcy petition. The California enforcement action was permitted to proceed as an exception to the automatic stay. Thus far, no written orders regarding plan confirmation have been filed in the bankruptcy action. According to Judge Jones, the complaint alleges violations of Section 17(a)(1) of the Securities Act and Section 10(b) and Rules 10b-5(a) and 10b-5(c)) of the Exchange Act. The Commission claims that Messrs. Villalobos and Buenrostro perpetrated a fraudulent scheme that led CalPERS and other public pension funds to invest in Mr. Villalobos' clients, and generated more than $70 million in placement agent fees over an approximately 10-year period. Resolution of the claims, the District Judge said, requires substantial and material consideration of federal securities laws, and therefore, the Court is required to deny the motion to refer the action to the bankruptcy court. A copy of the Court's Nov. 26, 2012 Order is available at http://is.gd/GLik9Ufrom Leagle.com. About Alfred J.R. Villalobos Stateline, Nevada-based Alfred J.R. Villalobos and his affiliated companies filed for Chapter 11 bankruptcy protection on June 9, 2010 (Bankr. D. Nev. Lead Case No. 10-52248). The entities are ARVCO Capital Research, LLC (Case No. 10-52249), ARVCO Financial Ventures, LLC (Case No. 10-5225), and ARVCO Art, Inc. (Case No. 10-52252). Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd., assists the Debtors in their restructuring effort. Mr. Villalobos estimated assets and debts at $10 million to $50 million. According to The Sacramento Bee, Mr. Villalobos sought bankruptcy protection a month after then-Attorney General Jerry Brown accused him in a lawsuit of bribing key officials with the California Public Employees' Retirement System. Mr. Brown's lawyers quickly obtained a court order placing Mr. Villalobos' assets under control of an examiner. By filing for bankruptcy protection, Mr. Villalobos halted Mr. Brown's lawsuit and was able to regain control of his assets. ASARCO LLC: Callahan Fails to Dismiss Contribution Suit ------------------------------------------------------- District Judge Lonny R. Suko of the Eastern District of Washington denied the request of Callahan Mining Corp. to dismiss the First Amended Complaint commenced by Asarco, LLC. The civil action was brought by Asarco pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601-9675. Asarco LLC seeks contribution under Section 113(f) of CRECLA from Callahan for CERCLA response costs Asarco paid under a settlement with the State of Washington at the Van Stone Mine Site in northeastern Washington. On March 13, 2009, Asarco sought Bankruptcy Court approval of a settlement under which Asarco would pay the State of Washington State Department of Ecology $3.5 million to resolve its environmental liabilities at the Van Stone Mine Site. The Settlement was approved by the Bankruptcy Court and the U.S. District Court for the Southern District of Texas. The Settlement was to be funded upon court approval of Asarco's reorganization plan. The case is, ASARCO, LLC, a Delaware limited liability company, Plaintiff, v. HECLA MINING COMPANY; WILLOW CREEK MINERALS LLC; EQUINOX RESOURCES (WASH.), INC.; WASHINGTON RESOURCES LLC (a/k/a ATLAS MINE AND MILL SUPPLY, a/k/a SUMERIAN MINING CO. OF SPOKANE, a/k/a WASHINGTON RESOURCES, INC.); and CALLAHAN MINING CORP., Defendants, No. CV-12-0381-LRS (E.D. Wash.). A copy of the Court's Nov. 27, 2012 Order is available at http://is.gd/4deSBf from Leagle.com. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 05-21207) on Aug. 9, 2005. Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On Dec. 9, 2009, Asarco Incorporated and Americas Mining Corporation's Seventh Amended Plan of Reorganization for the Debtors became effective and the ASARCO Asbestos Personal Injury Settlement Trust was created and funded with nearly $1 billion in assets, including more than $650 million in cash plus a $280 million secured note from Reorganized ASARCO. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated ASARCO LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. ASHLAND UNIVERSITY: Moody's Cuts Rating on 2010 Bonds to 'B3' ------------------------------------------------------------- Moody's Investors Service has downgraded to B3 from Ba3 the rating on Ashland University's Series 2010 bonds issued through the Ohio Higher Educational Facility Commission. The rating was placed under review for further possible downgrade on September 10, 2012. The rating outlook is negative and Moody's has concluded Moody's review. Summary Rating Rationale The downgrade of Ashland University's rating to B3 and negative outlook are based on Moody's expectation that the university will continue to face severe liquidity pressure and a challenged market position as a heavily tuition-dependent private university in Ohio. The B3 rating also reflects the university's complex debt structure that includes variable rate demand debt, covenants, cross default provisions, bullet maturities, and interest rate derivatives. In addition, nearly all of Ashland's unrestricted funds secure bank loans placing the Series 2010 bonds in a subordinate position that could impact expected recovery if an event of default caused acceleration. The university's extremely thin unrestricted monthly liquidity provides very modest coverage of expenses and is inadequate to cover demand debt. The rating also reflects pressure on net tuition growth, thin debt service coverage, and enrollment declines. Challenges * Insufficient monthly liquidity to cover demand debt with $8.1 million of unrestricted liquidity covering only 18.1% of demand debt and providing 34.2 monthly days cash on hand based on FY 2012 financials. * Complex debt structure, which includes secured variable rate loans from three separate banks. Loans terms include financial covenants, cross default provisions, and bullet maturities. Further, nearly all of the university's unrestricted operating funds secure bank agreements, ultimately placing the Series 2010 bondholders in a subordinate position. * Rising debt and frail balance sheet with $1.8 million of expendable financial resources, covering $88 million of debt and operating expenses each just 0.02 times in FY 2012. Debt has grown rapidly, above and beyond Moody's earlier expectations for capital and borrowing needs. * Stiff competition as a private university in Ohio, a state with many public and private university options, history as a teachers' college, and declining number of high school graduates are credit challenges given the university's high dependence on student charges of 86.8%. * Extended schedule for receipt of pledges for capital projects with payment of some pledges over a 20-year period; pledge payment schedule extends beyond bullet maturity dates. The next bullet maturity date of approximately $18 million is on August 21, 2014 for a bank loan. * Management turnover within the last two years in key areas of enrollment and fundraising. Strengths * Management's ability to adjust expenses to substantially address a significant revenue shortfall due to an unanticipated 7.8% decline in fall 2011 enrollment generating 0.7% operating margin in FY 2012 based on financials. * Favorable history of fundraising evidenced by a three-year average gift revenue of $9.8 million from FY 2010-FY 2012. Moody's notes that a large portion of the university's gifts are temporarily or permanently restricted. The university is planning a comprehensive campaign. * The Series 2010 bondholders benefit from a cash funded debt service reserve fund, funded at MADS in FY 2012. Outlook The negative outlook reflects ongoing pressure on the university's market position, net tuition revenue growth (its primary revenue stream) and liquidity. It also reflects debt structure risks, refinancing risk of an expiring bank loan in 2014, and Moody's expectation of a minimal threshold to its debt service ratio covenant in the near term given ongoing enrollment declines and reduction in net tuition per student. WHAT COULD CHANGE THE RATING UP Unlikely given the recent downgrade and negative outlook. Any upgrade would be driven by stable enrollment and net tuition trends coupled with significant growth of unrestricted liquidity, growth of headroom under financial covenant requirements, and reduction of demand debt WHAT COULD CHANGE THE RATING DOWN Violation of covenant requirements that may result in acceleration of all or a portion of debt; inability to refinance bank agreements; additional borrowing or further erosion or encumbrance of unrestricted liquidity; failure to receive gifts as planned; further declines in enrollment; continued stagnant or declining net tuition revenue or net tuition per student Principal Rating Methodology The principal methodology used in this rating was U.S. Not-for- Profit Private and Public Higher Education published in August 2011. ATP OIL & GAS: In Talks to Amend DIP Agreement with Credit Suisse ----------------------------------------------------------------- ATP Oil & Gas Corporation, on Aug. 29, 2012, entered into a Senior Secured Super Priority Priming Debtor in Possession Credit Agreement with the lenders party thereto, Credit Suisse AG, as the administrative agent and collateral agent, and Credit Suisse Securities (USA) LLC, as the sole bookrunner and sole lead arranger, which was amended on Sept. 20, 2012. The Company, the Lenders and the Agent are in negotiations to further amend the DIP Credit Agreement. In connection with the potential amendment to the DIP Credit Agreement, the Company may be required to conduct a sales process with respect to certain of the assets of the Company. In connection with that sales process, the Company has made accessible to prospective purchasers the information regarding the Company's estimated proved, probable and possible reserves and future revenue, as of Oct. 1, 2012, with respect to the interests of the Company in and related to Breton Sound Blocks 45 and 52, High Island A Blocks 580 and 589, Main Pass Block 123 and Ship Shoal Blocks 351 and 358, located in the Gulf of Mexico. A copy of the Internal Reserve Report is available for free at: http://is.gd/pvrWdI About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Porter Hedges LLP serves as local co-counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. Blackhill Partners, LLC, provided James R. Latimer, III as chief restructuring officer to the Debtor. Filings with the Bankruptcy Court and claims information are available at http://www.kccllc.net/atpog ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. In its schedules, the Debtor disclosed $3,249,576,978 in assets and $2,278,831,445 in liabilities as of the Chapter 11 filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. Duff & Phelps Securities, LLC, serves as its financial advisors. The Committee tapped Epiq Bankruptcy Solutions, LLC as its information agent. As of Sept. 30, 2012, ATP Oil had total assets of $3.13 billion, total liabilities of $3.18 billion and total stockholders' deficit of $41.27 million. ATP OIL & GAS: Equity Professionals May End Up Working for Free --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that ATP Oil & Gas Corp. equity holders selected lawyers and financial advisers who will be paid only if the bankruptcy reorganization culminates in a distribution for preferred or common shareholders. According to Mr. Rochelle, the equity committee professionals are likely to end up working for free, judging by the prices ATP debt is bringing on the bond market. The $1.5 billion in 11.875% second-lien notes traded Nov. 29 for 8 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The price indicates there's a long way to go before creditors are paid in full and equity has a recovery. The report relates that last month, U.S. Bankruptcy Judge Marvin Isgur in Houston said he would permit formation of an official equity committee for the oil and gas producer only if the professionals were hired on a contingency. Mr. Rochelle notes that the equity committee may find out sooner rather than later whether the bond market is an accurate prediction about the company's value. Secured lenders are forcing ATP to sell the assets early next year. The report recounts that in October a geologist's report to the lenders produced results kicking in provisions in the loan agreement requiring the commencement of asset sales. ATP filed papers with Judge Isgur for approval of amendments to the loan agreement. If Judge Isgur goes along, there must be approval of sale procedures for shallow-water properties by Jan. 24, followed by a Feb. 26 auction. For deep-water properties, auction procedures must be approved by Feb. 14, followed by a March 26 auction. The equity committee, the report relates, will return to court on Dec. 20 seeking formal authority to hire professionals. The lawyers will be paid $1.5 million only if there is a reorganization that includes a recovery by common or preferred shareholders. In addition, the lawyers will receive 1% of the recovery by preferred shareholders and 2.5% of common shareholders' recovery. The financial advisers will receive 1.5% of equity holders' recoveries. The law firm to represent the committee is Diamond McCarthy LLP and the financial advisers are from Gordian Group LLC. ATP and the official creditors' committee opposed having an equity committee, saying there is no realistic possibility that shareholders would receive a distribution through a Chapter 11 plan. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Porter Hedges LLP serves as local co-counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. Blackhill Partners, LLC, provided James R. Latimer, III as chief restructuring officer to the Debtor. Filings with the Bankruptcy Court and claims information are available at http://www.kccllc.net/atpog ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. New financing is being provided by some of the first lien lenders. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. Duff & Phelps Securities, LLC, serves as its financial advisors. The Committee tapped Epiq Bankruptcy Solutions, LLC as its information agent. BERMO ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Bermo Enterprises, Incorporated P.O. Box 426 Schoolcraft, MI 49087 Bankruptcy Case No.: 12-10207 Chapter 11 Petition Date: November 26, 2012 Court: U.S. Bankruptcy Court Western District of Michigan (Grand Rapids) Judge: Jeffrey R. Hughes Debtor's Counsel: Arthur J. Spector, Esq. BERGER SINGERMAN PA 350 E. Las Olas Boulevard, Suite 1000 Fort Lauderdale, FL 33301 Tel: (954) 525-9900 Fax: (954) 523-2872 E-mail: aspector@bergersingerman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/miwb12-10207.pdf The petition was signed by Edward Bernard, president. BERNARD L. MADOFF: Trustee Seeks $61.7-Mil. for 5 Months' Work -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for Bernard L. Madoff Investment Securities Inc. and his primary bankruptcy lawyers filed papers Thursday for approval of $61.7 million in fees for five months' work between Feb. 1 and June 30. According to the report, the requested fees include reductions totaling almost $10 million, according to the papers. There will be a Dec. 19 hearing for approval of the fees. The report relates that during the five months, trustee Irving Picard and his principal lawyers from Baker & Hostetler LLP ran up almost 180,000 hours in time charges, representing a $383 average hourly rate. The report notes that the trustee's work so far produced $9.2 billion in collections for ultimate distribution to creditors, not including $2 billion forfeit to the government that likewise is destined for customer distribution. The $9.2 billion, according to the trustee, represents about 53% of customers' claims totaling some $17.2 billion. The trustee so far has distributed $3.7 billion. The remainder is being held back pending resolution of appeals and litigation affecting how much is available for distribution. 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. BERRY PLASTICS: Swings to $23-Mil. Net Income in Sept. 29 Qtr. -------------------------------------------------------------- Berry Plastics Group, Inc., recorded net income of $23 million on $1.20 billion of net sales for the quarterly period ended Sept. 29, 2012, compared with a net loss of $192 million on $1.22 billion of net sales for the quarterly period ended Oct. 1, 2011. For the fiscal year ended Sept. 29, 2012, the Company reported net income of $2 million on $4.76 billion of net sales, compared with a net loss of $299 million on $4.56 billion of net sales for the fiscal year ended Oct. 1, 2011. The Company's balance sheet at Sept. 29, 2012, showed $5.02 billion in total assets, $5.50 billion in total liabilities and a $475 million stockholders' deficit. "Berry's improved product mix, aggressive cost reduction initiatives, and lower costs for raw materials, coupled with higher prices in certain of our product segments, allowed us to achieve record earnings and reduce our leverage," said Jon Rich, Chairman and CEO of Berry Plastics. "While we are pleased with our overall performance, the weakening global economic environment will present challenges to our industry and to Berry." "Our strategic actions are allowing us to continue to strengthen the Company's balance sheet, maintain significant liquidity, and generate substantial free cash flow," said Rich. "Going forward, we will continue to execute on our strategies to further reduce our overall debt leverage, pursue innovative organic growth opportunities, identify value adding acquisitions that can be accretive to shareholder value, and take steps to grow our business internationally." A copy of the press release is available for free at: http://is.gd/F1CgVO About Berry Plastics Berry Plastics Corporation manufactures and markets plastic packaging products, plastic film products, specialty adhesives and coated products. At Jan. 2, 2010, the Company had more than 80 production and manufacturing facilities, primarily located in the United States. Berry is a wholly-owned subsidiary of Berry Plastics Group, Inc. Berry Group is primarily owned by affiliates of Apollo Management, L.P. and Graham Partners. Berry, through its wholly owned subsidiaries operates five reporting segments: Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings and Specialty Films. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. On Dec. 3, 2009, Berry Plastics obtained control of 100% of the capital stock of Pliant upon Pliant's emergence from reorganization pursuant to a proceeding under Chapter 11 for a purchase price of $602.7 million. Pliant is a leading manufacturer of value-added films and flexible packaging for food, personal care, medical, agricultural and industrial applications. The acquired business is primarily operated in Berry's Specialty Films reporting segment. The Company's balance sheet at April 2, 2011, showed $5.54 billion in total assets, $5.34 billion in total liabilities, and $202 million in total stockholders' equity. * * * Berry Plastics has a 'B3' corporate family rating, with stable outlook, from Moody's Investors Service. Moody's said in April 2010 that Berry's B3 CFR reflects weakness in certain credit metrics, financial aggressiveness and acquisitiveness and a continued difficult operating and competitive environment especially in the flexible plastics and tapes segments. The rating also reflects the Company's exposure to more cyclical end markets, relatively weak contracts with customers and a high percentage of commodity products. In November 2011, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on Berry and its holding company parent, Berry Plastics Group Inc. "The ratings on Berry reflect the risks associated with the company's highly leveraged financial profile and acquisition- driven growth strategy as well as its fair business risk profile," said Standard & Poor's credit analyst Cynthia Werneth. BILLMYPARENTS INC: Has Endorsement Agreement with Justin Bieber --------------------------------------------------------------- BillMyParents, Inc., entered into a Promotion/Endorsement Agreement with Justin Bieber Brands, LLC, pursuant to which Justin Bieber Brands, LLC, will promote and endorse the Company's products through various media set forth in the Agreement. Services include the approved use of Justin Bieber's likeness and image, and promotion of the Company's products across social media, including postings on Facebook, Twitter and Instagram, videos, voicemail and e-mail messages from Justin Bieber to Company cardholders, and other cardholder experiences. The Agreement commences upon the Effective Date and will have a term of 14 months, unless extended as provided in the Agreement. In consideration for Justin Bieber Brands, LLC, promoting the Company's products, the Company has agreed to pay Justin Bieber Brands, LLC, a material non-refundable fee. In addition to the Advance, for each account that is opened during the Term and is attributable to the Agreement, the Company has agreed to pay Justin Bieber Brands, LLC, monthly incentive compensation per active Justin Bieber Brands, LLC Account. The Company has also agreed to pay Justin Bieber Brands, LLC, a per month royalty per active Justin Bieber Brands, LLC, Account. The Advance is recoupable from Royalty payments made to Justin Bieber Brands, LLC. Upon the expiration of the Agreement, Justin Bieber Brands, LLC will be entitled to receive the Royalty payments, subject to the recoupment of the Advance, and the Incentive Compensation, in perpetuity. Pursuant to the terms of the Agreement, the Company has issued to Justin Bieber Brands, LLC, warrants to purchase two million shares of the Company's common stock, as follows: warrants to purchase one million shares of the Company's common stock vested upon the Effective Date, and warrants to purchase another one million shares of the Company's common stock will vest in equal monthly installments during the Term, each exercisable at an exercise price equal to the mean of the high and low prices of the Company's common stock on the last trading day before the Effective Date. If the Agreement is terminated due to the Company's breach of the Agreement, the remaining warrants will vest immediately upon that termination. The Company has also issued Justin Bieber Brands, LLC, warrants to purchase up to an additional two million shares of the Company's common stock. The Additional Warrant is exercisable for the number of shares of the Company's common stock equal to five times the number of active Justin Bieber Brands, LLC, Accounts in effect at the end of the Term, provided there are more than two hundred fifty thousand active Justin Bieber Brands, LLC, Accounts as of the last day of the Term. The Additional Warrant will be exercisable no more rapidly than in equal monthly installments during the six month period immediately following the Term at an exercise price equal to the mean of the high and low prices of the Company's common stock on the last trading day before the Effective Date. In the event the product of five times the number of active Justin Bieber Brands, LLC, Accounts exceeds two million, the Company will issue Justin Bieber Brands, LLC, an "End of Term Warrant" for the number of shares in excess of two million. The exercise price of the End of Term Warrant will be the arithmetic mean of the high and low prices of the Company's common stock on the last trading day before the date of the issuance of the End of Term Warrant. If the Agreement is extended, Justin Bieber Brands, LLC, will be entitled to receive the Royalty and Incentive Compensation in perpetuity, plus additional warrants to purchase two million shares of the Company's common stock for any such Extension Period. Extension Warrants will vest equally on a monthly basis and will have an exercise price equal to the mean of the high and low prices of the Company's common stock on the last trading day before the date of issuance of each Extension Warrant. About BillMyParents San Diego, Calif.-based BillMyParents, Inc., markets prepaid cards with special features aimed at young people and their parents. BMP is designed to enable parents and young people to collaborate toward the goal of responsible spending. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, BDO USA, LLP, expressed substantial doubt about the Company's ability to continue as a going concern. BDO noted that the Company has incurred net losses since inception and has an accumulated deficit, and stockholders' deficiency at Sept. 30, 2011. The Company reported a net loss of $14.2 million for the fiscal year ended Sept. 30, 2011, compared with a net loss of $6.9 million for the fiscal year ended Sept. 30, 2010. The Company's balance sheet at June 30, 2012, showed $7.83 million in total assets, $1.47 million in total liabilities, all current, and $6.36 million in total stockholders' equity. BIOLIFE SOLUTIONS: Inks 4th Amendment to Lease with Monte Villa --------------------------------------------------------------- BioLife Solutions, Inc., entered into a Fourth Amendment to Lease with Monte Villa Farms LLC to enlarge the premises leased by the Company, extend the term of the lease, dated as of Aug. 1, 2007, and to make other modifications to the terms and conditions of the Original Lease, as amended. The premises leased pursuant to the Original Lease consisted of approximately 4,366 rentable square feet of space in the building located at 3303 Monte Villa Parkway, Bothell, Washington. The Company leased an additional 5,798 rentable square feet of space in the Building pursuant to the First Lease Amendment. The Second Lease Amendment expanded the premises leased by the Company from the Landlord to approximately 20,462 rentable square feet. The Third Lease Amendment expanded the premises to 20,761 rentable square feet. The Fourth Lease Amendment expanded the premises to 25,864 rentable square feet. About BioLife Solutions Bothell, Washington-based BioLife Solutions, Inc., develops and markets patented hypothermic storage and cryo-preservation solutions for cells, tissues, and organs, and provides contracted research and development and consulting services related to optimization of biopreservation processes and protocols. The Company reported a net loss of $1.95 million in 2011, compared with a net loss of $1.98 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.41 million in total assets, $15.45 million in total liabilities and a $12.03 million total shareholders' deficiency. Following the 2011 results, Peterson Sullivan LLP, in Seattle, Washington, expressed substantial doubt about BioLife Solutions' ability to continue as a going concern. The independent auditors noted that the Company has been unable to generate sufficient income from operations in order to meet its operating needs and has an accumulated deficit of $54 million at Dec. 31, 2011. BIOPACK ENVIRONMENTAL: Files Last Year's Form 10-Qs --------------------------------------------------- Biopack Environmental Solutions, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net profit of $258,627 on $0 of revenue for the three months ended June 30, 2011, compared with a net loss of $272,036 on $0 of revenue for the same period during the prior year. For the six months ended June 30, 2011, the Company reported a net loss of $213,969 on $0 of revenue, compared with a net loss of $243,070 on $0 of revenue for the same period a year ago. For the three months ended Sept. 30, 2011, the Company reported a net loss of $37,472 on $0 of revenue, compared with a net loss of $379,977 on $0 of revenue for the same period a year ago. The Company incurred a net loss of $251,441 on $0 of revenue for the nine months ended Sept. 30, 2011, compared with a net loss of $623,047 on $0 of revenue for the same period during the preceding year. The Company's balance sheet at Sept. 30, 2011, showed $5,409 in total assets, $2.27 million in total liabilities and a $2.26 million in total deficiency in stockholders' equity. A copy of the Form 10-Q for the quarter ended June 30, 2011 is available for free at http://is.gd/nfdajW A copy of the Form 10-Q for the quarter ended Sept. 30, 2011, is available for free at http://is.gd/C64G9u About Biopack Environmental Kowloon, Hong Kong-based Biopack Environmental Solutions Inc. develops, manufactures, distributes and markets bio-degradable food containers and disposable industrial packaging for consumer products. The Company supplies its biodegradable food containers and industrial packaging products to multinational corporations, supermarket chains and restaurants located across North America, Europe and Asia. The Company has a factory in Jiangmen City in the People's Republic of China. The Company reported a net loss $472,596 on $3,594 of revenue for the three months ended March 31, 2011, compared with net profit of $28,966 on $68,639 of revenue for the same period during the prior year. Going Concern As reported by the TCR on April 26, 2011, Wong Lam Leung & Kwok C.P.A. Limited, in Hong Kong, expressed substantial doubt about Biopack Environmental's ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss of $2.4 million for the year ended Dec. 31, 2010, and had an accumulated deficit of $7.3 million and a working capital deficit of $2.2 million as of Dec. 31, 2010. The Company said that its future is dependent upon its attaining profitable operations and raising the capital it will require in order to achieve profitable operations through the issuance of equity securities, borrowings or a combination thereof. BIOZONE PHARMACEUTICALS: Amends 8.3MM Common Shares Prospectus -------------------------------------------------------------- Biozone Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission an amendment no.4 to the Form S-1 registration statement relating to the sale by Aero Liquidating Trust of up to 8,345,310 shares of the Company's common stock. All of these shares of common stock are being offered for resale by the selling stockholder. The Company will bear all costs relating to the registration of these shares of its common stock, other than any selling stockholder's legal or accounting costs or commissions. The Company's common stock is quoted on the Over-the-Counter Bulletin Board under the symbol "BZNE.OB". The last reported sale price of the Company's common stock as reported by the OTC Bulletin Board on Nov. 27, 2012, was $1. 50 per share. A copy of the amended prospectus is available at: http://is.gd/VNtAFa About Biozone Pharmaceuticals Biozone Pharmaceuticals, Inc., formerly, International Surf Resorts, Inc., was incorporated under the laws of the State of Nevada on Dec. 4, 2006, to operate as an internet-based provider of international surf resorts, camps and guided surf tours. The Company proposed to engage in the business of vacation real estate and rentals related to its surf business and it owns the Web site isurfresorts.com. During late February 2011, the Company began to explore alternatives to its original business plan. On Feb. 22, 2011, the prior officers and directors resigned from their positions and the Company appointed a new President, Director, principal accounting officer and treasurer and began to pursue opportunities in medical and pharmaceutical technologies and products. On March 1, 2011, the Company changed its name to Biozone Pharmaceuticals, Inc. Since March 2011, the Company has been engaged primarily in seeking opportunities related to its intention to engage in medical and pharmaceutical businesses. On May 16, 2011, the Company acquired substantially all of the assets and assumed all of the liabilities of Aero Pharmaceuticals, Inc., pursuant to an Asset Purchase Agreement dated as of that date. Aero manufactures markets and distributes a line of dermatological products under the trade name of Baker Cummins Dermatologicals. On June 30, 2011, the Company acquired the Biozone Labs Group which operates as a developer, manufacturer, and marketer of over- the-counter drugs and preparations, cosmetics, and nutritional supplements on behalf of health care product marketing companies and national retailers. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Paritz and Company. P.A., in Hackensack, N.J., expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company does not have sufficient cash balances to meet working capital and capital expenditure needs for the next twelve months. In addition, as of Dec. 31, 2011, the Company has a shareholder deficiency and negative working capital of $4.37 million. The continuation of the Company as a going concern is dependent on, among other things, the Company's ability to obtain necessary financing to repay debt that is in default and to meet future operating and capital requirements. Biozone reported a net loss of $5.45 million in 2011, compared with a net loss of $319,813 in 2010. The Company's balance sheet at Sept. 30, 2012, showed $8.25 million in total assets, $8.33 million in total liabilities and a $74,927 total shareholders' deficiency. BLAST ENERGY: Inks Fourth Amendment to Centurion Promissory Notes ----------------------------------------------------------------- PEDEVCO CORP., formerly Blast Energy Services, Inc., entered into the Fourth Amendment to Senior Secured Promissory Notes with Centurion Credit Funding LLC, which amends certain provisions of the Senior Secured Promissory Note (First Tranche) and Senior Secured Promissory Note (Second Tranche) previously issued by the Company to the Lender, each dated Feb. 24, 2011, as amended several times. The Promissory Notes were amended to, among other things: (i) permit the conversion of an additional $392,045 of the total outstanding principal amounts, exit fees, and accrued interest under the Promissory Notes into common stock of the Company at the conversion price of $0.75 per share, thereby waiving the previously agreed upon limitation on conversion to 50% of the loan amount; and (ii) provide for the prepayment and full satisfaction of the Promissory Notes by the Company upon the payment by the Company to the Lender of the amount of $200,000. In connection with the Fourth Amendment to the Promissory Notes, the Company has issued the Lender shares for the additional conversion amount and has authorized the Lender to sweep the Payoff Amount from the Company's bank account that is subject to a deposit account control agreement previously entered into by and between the Company and the Lender. Including the conversion of shares, the Lender has converted an aggregate of $1,029,545 of principal and accrued interest, into an aggregate of 1,372,727 shares of the Company's common stock. The Lender also concurrently exercised its warrant in full, on a cashless basis, to purchase 106,633 shares of Common Stock. A copy of the Fourth Amendment is available for free at: http://is.gd/B33ViG Amendment to Esenjay 2011 Purchase Agreement On Nov. 20, 2012, the Company entered into the Closing Payment Extension Amendatory Letter Agreement with Esenjay Oil & Gas, Ltd., Winn Exploration Co., Inc., Lacy Properties, Ltd., and Crain Energy, Ltd. The Esenjay Amendment amends certain provisions of the Purchase and Sale Agreement, dated Aug. 23, 2011, entered into by and between the Company and the Sellers, pursuant to which the Company acquired certain oil and gas interests in the Niobrara Shale play in Weld County, Colorado. Pursuant to the Purchase Agreement, as partial consideration for the acquisition of the Assets, the Company was required to either issue to the Sellers Series A Preferred Stock in November 2012 valued at $1,000,000, or, upon the Sellers' election, make payment of $1,000,000 to the Sellers in cash in lieu of such Preferred Stock issuance. The Company was notified by the Sellers that they desired to receive cash in lieu of the Preferred Stock. In order to conserve the Company's cash, the Company and the Sellers entered into the Esenjay Amendment to provide for the deferral of the payment of the aggregate $1,000,000 due to the Sellers to Feb. 18, 2013, in exchange for an aggregate cash payment of $100,000 to the Sellers payable on Nov. 26, 2012, and the issuance of an aggregate of 133,334 shares of Preferred Stock to the Sellers, all as set forth in the Esenjay Amendment. Pursuant to the Esenjay Amendment, the Company has paid to the Sellers the aggregate amount of $100,000, and issued an aggregate of 133,334 shares of Series A Preferred Stock to the Sellers. Each share of Series A Preferred Stock is convertible at the option of the holder at any time into one share of the Company's common stock. In addition, all shares of Series A Preferred Stock will automatically convert into shares of Common Stock on Jan. 27, 2013, or on such earlier date as consented to by the holders of a majority of those shares. A copy of the Letter Agreement is available for free at: http://is.gd/vykMZY About Blast Energy Houston, Texas-based Blast Energy Services, Inc., is seeking to become an independent oil and gas producer with additional revenue potential from its applied fluid jetting technology. The Company plans to grow operations initially through the acquisition of oil producing properties and then eventually, to acquire oil and gas properties where its applied fluid jetting process could be used to increase the field production volumes and value of the properties in which it owns an interest. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, GBH CPAs, PC, in Houston, Texas, expressed substantial doubt about Blast Energy Services' ability to continue as a going concern. The independent auditors noted that Blast incurred a loss from continuing operations for 2011, and has an accumulated deficit at Dec. 31, 2011. The Company reported a net loss of $4.14 million for 2011, compared with a net loss of $1.51 million for 2010. The Company's balance sheet at Sept. 30, 2012, showed $11.62 million in total assets, $3.96 million in total liabilities, $1.25 million in redeemable series A convertible preferred stock, and $6.41 million in total stockholders' equity. BUENA YUMA: Files for Chapter 11 in Phoenix ------------------------------------------- Buena Yuma, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-25518) in Phoenix on Nov. 28. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated at least $1 million in assets and at least $50 million in liabilities. The Debtor on the Petition Date filed an application to employ Snell & Wilmer L.L.P. as counsel. There's a meeting of creditors under 11 U.S.C. Sec. 341(a) scheduled for Jan. 3, 2013. BUENA YUMA: Case Summary & 3 Unsecured Creditors ------------------------------------------------ Debtor: Buena Yuma, LLC 7001 N. Scottsdale Road, Suite #2050 Scottsdale, AZ 85253 Tel: (480) 840-8400 Bankruptcy Case No.: 12-25518 Chapter 11 Petition Date: November 28, 2012 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Sarah Sharer Curley Debtor's Counsel: Andrew Hardenbrook, Esq. SNELL & WILMER, LLP One Arizona Center 400 E. Van Buren Street Phoenix, AZ 85004-2202 Tel: (602) 382-6229 Fax: (602) 382-6070 E-mail: ahardenbrook@swlaw.com - and ? Christopher H. Bayley, Esq. SNELL & WILMER, LLP One Arizona Center 400 E. Van Buren Street Phoenix, AZ 85004-0001 Tel: (602) 382-6214 Fax: (602) 382-6070 E-mail: CBayley@swlaw.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Liabilities: $50,000,001 to $100,000,000 The petition was signed by Lawrence D. Bain, managing director of ITH Partners, LLC, authorized representative. Debtor's List of Its Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ NWRA Ventures l, LLC Guaranty $68,081,225 Gorporation Trust Center 1209 Orange Street Wilminqton, DE 19801 Paradigm Tax Group Services $38,627 3030 North Central Avenue, Suite # 1001 Phoenix, AZ 85012 Smith-Roberts, lnc. Property Survey $8,531 100 NE 5th Street Oklahoma City, OK 73104 BUILDERS FIRSTSOURCE: S&P Revises Outlook on 'CCC' CCR to Negative ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Dallas- based Builders FirstSource Inc. to negative from positive. "At the same time, we affirmed our 'CCC' corporate credit rating and affirmed our 'CC' issue rating on Builder FirstSource's $140 million second lien notes due 2016. The recovery rating is '6', which indicates our expectation for negligible (0% to 10%) recovery in the event of a default," S&P said. "The outlook revision and rating reflect our view that Builders FirstSource could approach, or possibly breach, its minimum liquidity covenant by the end of 2013, as it draws down its cash balance to fund an expected interest coverage shortfall and increased working capital needs," said Standard & Poor's credit analyst James Fielding. The company's "highly leveraged" inancial risk reflects its very heavy and expensive debt burden and its "vulnerable" business risk acknowledges that demand for the company's products is highly cyclical and is only beginning to recover from very weak levels. Builders FirstSource is a leading manufacturer and supplier of products for new home construction. Its sales are recovering, albeit off very deep cyclical lows. 2012 sales are on track to exceed $975 million, a better than 25% improvement over 2011. "Our baseline scenario for 2013 indicates sales will climb another 35% to $1.3 billion. This growth closely mirrors our estimate that U.S. housing starts will be up 26% in 2012 and our economists' forecast that starts will be up 36% in 2013," S&P said. "The negative outlook acknowledges heightened constraints on the company's liquidity in an improving operating environment for Builders FirstSource. We estimate that the company will likely draw its cash balance down near its $35 million minimum liquidity threshold by the end of 2013, to fund an expected interest coverage shortfall and increased working capital needs related to improved sales. We would lower our rating if the company is unable to negotiate covenant relief with its lenders or otherwise bolster a liquidity position that we view to be less than adequate. A downgrade could occur as early as the spring of 2013 if the traditional new home selling season is strong and it appears that the industry will hit our one million new housing starts forecast," S&P said. "Despite our expectations for continued improvement in residential construction, an upgrade is unlikely over the next 12 months unless the company obtains sufficient liquidity to fund increased working capital needs over the next two years," S&P said. CANAL CAPITAL: $620,000 Profit for 9 Months Ended July 31, 2012 --------------------------------------------------------------- Canal Capital Corporation filed with the U.S. Securities and Exchange Commission its quarterly reports for the three quarters of 2012. As a result of financial constraints, the Company's financial statements for the fiscal years ended Oct. 31, 2011, 2010 and 2009, and for the interim fiscal quarters had not been previously audited or reviewed by an independent auditor. In February 2012, the Company received notice from the SEC of its obligation to file audited and reviewed financial statements with its periodic reports and nine of its periodic reports were appropriately amended and filed with the SEC on Oct. 30, 2012. The Company recorded net income of $5,316 on $70,244 of real estate revenues for the three months ended Jan. 31, 2012, compared with a net loss of $62,470 on $70,244 of real estate revenues for the same period a year ago. A copy of the January 31 Form 10-Q is available for free at http://is.gd/LNaQ2Z For the three months ended April 30, 2012, Canal Capital reported net income of $143,797 on $914,801 of real estate revenues, compared with a net loss of $66,471 on $66,244 of real estate revenues for the same period during the preceding year. A copy of the April 30 Form 10-Q is available at http://is.gd/HsI1uB For the three months ended July 31, 2012, the Company reported net income of $470,534 on $883,861 of real estate revenues, compared with a net loss of $241,532 on $66,244 of real estate revenues for the same period during the prior year. The Company reported net income of $619,647 on $1.86 million of real estate revenues for the nine months ended July 31, 2012, compared with a net loss of $370,473 on $202,732 of real estate revenues for the same period a year ago. The Company's balance sheet at July 31, 2012, showed $2.82 million in total assets, $1.43 million in total liabilities and $1.39 million in stockholders' equity. A copy of the July 31 Form 10-Q is available for free at: http://is.gd/rEmFVh "While the Company is currently operating as a going concern, certain significant factors raise substantial doubt about the Company's ability to continue as a going concern. The Company has suffered recurring losses from operations and is obligated to continue making substantial annual contributions to its defined benefit pension plan." About Canal Capital Port Jefferson Station, N.Y.-based Canal Capital Corporation is engaged in two distinct businesses -- real estate and stockyard operations. Canal's real estate properties are located in Sioux City, Iowa, South St Paul, Minnesota, St Joseph, Missouri, Omaha, Nebraska and Sioux Falls, South Dakota. The properties consist, for the most part, of an Exchange Building (commercial office space), land and structures leased to third parties (rail car repair shops, lumber yards and various other commercial and retail businesses) as well as vacant land available for development or resale. Canal currently operates one central public stockyard located in St. Joseph, Missouri. Canal closed the stockyard it operated in Sioux Falls, South Dakota in December 2009. Canal's stock is no longer listed over-the-counter on the "pink sheets". The stock was delisted by the SEC as a result of Canal's filing its fiscal 2009 Form 10-K without benefit of an independent audit. CASCADES INC: S&P Revises Outlook on 'BB-' CCR on Weak Performance ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Kingsey Falls, Que.-based packing and tissue manufacturer Cascades Inc. to negative from stable. "At the same time, Standard & Poor's affirmed its ratings on the company, including its 'BB-' long-term corporate credit rating," S&P said. "We base the outlook revision on what we consider a weaker-than- expected financial performance in the company's containerboard and boxboard segments, leading to a slower pace of deleveraging than previously expected," said Standard & Poor's credit analyst Jatinder Mall. "The ratings on Cascades reflect what Standard & Poor's views as the company's fair business risk profile and aggressive financial risk profile. The strengths are visible in Cascades' good market position in a consolidated industry, diverse revenue stream, and vertical integration. These strengths are partially offset, in our opinion, by what we see as the company's exposure to the cyclical boxboard and containerboard markets, volatile recycled fiber prices, and high debt levels," S&P said. "Cascades is an integrated packaging and tissue company that manufactures, converts, collects, and processes recycled paper. It is the No. 1 containerboard producer in Canada, the second-largest producer of coated recycled boxboard in Europe, and fourth-largest tissue producer in North America. The company operates facilities in Canada, the U.S., and Europe," S&P said. "The negative outlook reflects our view that Cascades' weaker- than-expected earnings through 2012 have resulted in slower deleveraging than previously expected. While we believe the company will improve earnings and adjusted leverage metrics commensurate with an aggressive financial risk profile in the next year, it will require a favorable operating environment to continue through 2013. Based on our expectation of recycled input prices, we believe Cascades' EBITDA generation will improve marginally in 2013 and adjusted debt-to-EBITDA will decline to about 5.2x. Standard & Poor's would likely lower the ratings on the company if margins do not recover as expected in the first half of 2013, leading to lower-than-expected EBITDA and a stabilized leverage greater than 5x. Given our expectations, an upgrade is unlikely in the near term but would require substantial repayment of debt demonstrating its ability to sustain a leverage of 3.5x," S&P said. CATALYST PAPER: Picks MLR as Stalking Horse for Snowflake Assets ---------------------------------------------------------------- Catalyst Paper has accepted a qualified stalking horse bid from MLR Ventures, LLC, as part of the sales process for disposition of the Snowflake facility and Apache Railway. "We have received a $12.0 million Stalking Horse bid for the assets and land associated with the Snowflake facility and the equity of Apache Railway," said President and Chief Executive Officer Kevin J. Clarke. "We look forward to beginning the next phase of the sale process and to identifying a qualified buyer in the near term." The bid by the Stalking Horse is subject to higher and better offers obtained through the US Court-approved sale and investor solicitation procedures. Catalyst Paper expects to receive binding bids for the assets from qualified bidders on Dec. 7, 2012, and expects to hold an auction among qualified bidders on Dec. 17, 2012, in New York City. A hearing in the US Court is scheduled for Dec. 19, 2012, to consider approval of the sale. About Catalyst Paper Catalyst Paper Corp. -- http://www.catalystpaper.com/-- manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.9 million tons. The Company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst on Dec. 15, 2011, deferred a US$21 million interest payment on its outstanding 11.00% Senior Secured Notes due 2016 and Class B 11.00% Senior Secured Notes due 2016 due on Dec. 15, 2011. Catalyst said it was reviewing alternatives to address its capital structures and it is currently in discussions with noteholders. Perella Weinberg Partners served as the financial advisor. In early January 2012, Catalyst entered into a restructuring agreement, which will see its bondholders taking control of the company and includes an exchange of debt for equity. The agreement said it would slash the company's debt by C$315.4 million ($311 million) and reduce its cash interest expenses. Catalyst also said it will continue to "operate and satisfy" its obligations to customers, trade creditors, employees and retirees in the ordinary course of business during the restructuring process. On Jan. 17, 2012, Catalyst applied for and received an initial court order under the Canada Business Corporations Act (CBCA) to commence a consensual restructuring process with its noteholders. Affiliate Catalyst Paper Holdings Inc., filed for creditor protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 12-10219) on the same day and sought recognition of the Canadian proceedings. Catalyst joins a line of paper producers that have succumbed to higher costs, increased competition from Asia and Europe, and falling demand as more advertisers and readers move online. In 2011, Cerberus Capital-backed NewPage Corp. filed for bankruptcy protection, followed by SP Newsprint Co., owned by newsprint magnate and fine art collector Peter Brant. In December, Wausau Paper said it will close its Brokaw mill in Wisconsin, cut 450 jobs and exit its print and color business. The Supreme Court of British Columbia granted Catalyst creditor protection under the CCAA until April 30, 2012. As reported by the TCR on July 2, 2012, Catalyst received approval for its reorganization plan from the Supreme Court of British Columbia. The Company's second amended plan under the Companies' Creditors Arrangement Act received 99% support from creditors. As reported by the TCR on Sept. 17, 2012, Catalyst Paper has successfully completed its previously announced reorganization pursuant to its Second Amended and Restated Plan of Compromise and Arrangement under the Companies' Creditors Arrangement Act. Catalyst Paper's balance sheet at Sept. 30, 2012, showed C$1.04 billion in total assets, C$887.3 million in total liabilities and C$152.8 million in equity. CENTER OF HOPE: Nevada Court Expunges Lis Pendens ------------------------------------------------- Nevada District Judge Robert C. Jones granted the request of Wells Fargo Bank Nevada N.A., to expunge the lis pendens in a foreclosure suit against Center of Hope Christian Fellowship, Local, Church of God in Christ. The church obtained a $500,000 loan to purchase the real property at 1327 Pyramid Way, in Sparks, Nevada. The church faced foreclosure following default on the Note. Rather than initiate arbitration as ordered by Court, the church filed for Chapter 11 bankruptcy protection just hours before the preliminary injunction expired by its own terms at midnight on May 9, 2011. The bankruptcy petition was dismissed as improper. Wells Fargo noted that a trustee's sale has been conducted, where the creditor purchased the property via a credit bid. The case is CENTER OF HOPE CHRISTIAN FELLOWSHIP, LOCAL, CHURCH OF GOD IN CHRIST, Plaintiff, v. WELLS FARGO BANK NEVADA, N.A. et al., Defendants, No. 3:11-cv-00173-RCJ-VPC (D. Nev.). A copy of Judge Jones' Nov. 27, 2012 Order is available at http://is.gd/fmE1Pj from Leagle.com. CENTRAL EUROPEAN: Asks Russian Standard to Make a Purchase Offer ---------------------------------------------------------------- Central European Distribution Corporation reponded to the letters of Mark Kaufman dated Nov. 14, 2012, and Nov. 19, 2012, wherein the Company reiterates its commitment to all its stakeholders. Mr. Kaufman, CEDC's second largest shareholder, in his letters, expressed his profound concern and deep frustration regarding the financial and operating condition of CEDC. In reply, CEDC urged Russian Standard Corporation, its largest stakeholder, to make an offer to buy the Company. "[I]f Russian Standard wants total control of CEDC to the exclusion of other stakeholders, Russian Standard should make an offer to buy the Company or step up with a definitive and binding offer to help the Company through its financing issues." With regard to the issue of Mr. Kaufman's non-inclusion on the Board of Directors, CEDC said: "You were an accomplished executive and owner of the Whitehall spirits business in Russia that was sold to CEDC - that does not necessarily make you an ideal candidate to be an independent director of CEDC at this time. That was the judgment of the Nominating Committee, the Special Committee, and the Board (including our Chairman, Mr. Tariko), and we would ask you to respect that judgment." CEDC said it shares Mr. Kaufman's concern and frustration about its share price performance and the lack of progress in securing the Russian Standard funding commitments. "Indeed, we ask you to help us to either bring Russian Standard back to the table or support CEDC as it considers its alternatives," CEDC relates. CEDC intends to have its Annual Meeting as soon as the SEC finalizes its review of CEDC's preliminary proxy statement. A copy of CEDC's November 21 letter is available for free at: http://is.gd/dS4HQc Mr. Kaufman said in a regulatory filing that he noted the letter dated Nov. 21, 2012, from the Special Committee of CEDC's Board of Directors in response to his November 19 Letter. Mr. Kaufman added he will not have any response to the November 21 Letter, despite its numerous inaccuracies and misstatements. He stands by the November 19 Letter, and continues to urge CEDC and its Board of Directors to engage actively with CEDC's stockholders and other stakeholders, and with Russian Standard and all other financial and strategic partners available to CEDC. About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. Ernst & Young Audit sp. z o.o., in Warsaw, Poland, expressed substantial doubt about Central European's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that certain of the Company's credit and factoring facilities are coming due in 2012 and will need to be renewed to manage its working capital needs. The Company's balance sheet at Sept. 30, 2012, showed $1.98 billion in total assets, $1.73 billion in total liabilities, $29.44 million in temporary equity, and $210.78 million in total stockholders' equity. Liquidity Certain credit and factoring facilities are coming due in 2012, which the Company expects to renew. Furthermore, the Company's Convertible Senior Notes are due on March 15, 2013. The Company's current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment of principal on the Convertible Notes and, unless the transaction with Russian Standard Corporation is completed the Company may default on them. The Company's cash flow forecasts include the assumption that certain credit and factoring facilities that are coming due in 2012 will be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at June 30, 2012. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The transaction with Russian Standard Corporation is subject to certain risks, including shareholder approval which may not be obtained. The Company's 2012 Annual Meeting of Stockholders, which was postponed due to the need to restate the Company's financial statements, is expected to be held as soon as practicable. The Company believes that if the transaction is completed as scheduled, the Convertible Notes will be repaid by their maturity date, which would substantially reduce doubts about the Company's ability to continue as a going concern. * * * As reported by the TCR on Aug. 10, 2012, Standard & Poor's Ratings Services kept on CreditWatch with negative implications its 'CCC+' long-term corporate credit rating on U.S.-based Central European Distribution Corp. (CEDC), the parent company of Poland-based vodka manufacturer CEDC International sp. z o.o. "The CreditWatch status reflects our view that uncertainties remain related to CEDC's ongoing accounting review and that CEDC's liquidity could further and substantially weaken if there was a breach of covenants which could lead to the acceleration of the payment of the 2016 notes, upon receipt of a written notice of 25% or more of the noteholders," S&P said. In the Oct. 9, 2012, edition of the TCR, Moody's Investors Service has downgraded the corporate family rating (CFR) and probability of default rating (PDR) of Central European Distribution Corporation (CEDC) to Caa2 from Caa1. "The downgrade reflects delays in CEDC securing adequate financing to repay its US$310 million of convertible notes due March 2013 which are increasing Moody's concerns that the definitive agreement for a strategic alliance between CEDC and Russian Standard Corporation (Russian Standard) might not conclude at the current terms," says Paolo Leschiutta, a Moody's Vice President - Senior Credit Officer and lead analyst for CEDC. CEREPLAST INC: Hans Black Discloses 7% Equity Stake --------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Hans P. Black and his affiliates disclosed that, as of Nov. 21, 2012, they beneficially own 2,412,171 shares of common stock of Cereplast Inc. representing 7.02% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/ttUmip El Segundo, Calif.-based Cereplast, Inc., has developed and is commercializing proprietary bio-based resins through two complementary product families: Cereplast Compostables(R) resins which are compostable, renewable, ecologically sound substitutes for petroleum-based plastics, and Cereplast Sustainables(TM) resins (including the Cereplast Hybrid Resins product line), which replaces up to 90% of the petroleum-based content of traditional plastics with materials from renewable resources. The Company's balance sheet at June 30, 2012, showed $31.2 million in total assets, $21.1 million in total liabilities, and stockholders' equity of $10.1 million. Bankruptcy Warning "We have incurred a net loss of $6.3 million for the six months ended June 30, 2012, and $14.0 million for the year ended Dec. 31, 2011, and have an accumulated deficit of $63.2 million as of June 30, 2012. Based on our operating plan, our existing working capital will not be sufficient to meet the cash requirements to fund our planned operating expenses, capital expenditures and working capital requirements through Dec. 31, 2012, without additional sources of cash. "Our plan to address the shortfall of working capital is to generate additional financing through a combination of sale of our equity securities, additional funding from our new short-term convertible debt financings, incremental product sales into new markets with advance payment terms and collection of outstanding past due receivables. We are confident that we will be able to deliver on our plans, however, there are no assurances that we will be able to obtain any sources of financing on acceptable terms, or at all. "If we cannot obtain sufficient additional financing in the short- term, we may be forced to curtail or cease operations or file for bankruptcy," the Company said in its quarterly report for the peirod ended June 30, 2012. CIRCLE STAR: Receives Funding for Drilling Operations in Kansas --------------------------------------------------------------- Circle Star Energy Corp. announced that funding for drilling in Northwest Kansas has been received and drilling operations for their initial well is planned to commence by Dec. 10, 2012. Jeff Johnson, CEO commented, "Circle Star Energy has been looking forward to these next phases of drilling operations. We are extremely pleased to have drilling funds in hand and look forward to drilling our first well in Kansas." The Company's plans for its initial well is to drill to 4,200 feet and test the Arbuckle, Kansas-Lansing and other formations that are productive in Trego County, an area known for its history of oil production which has cumulatively produced 66,787,369 bbls to date (according to the Kansas Geological Survey). The Company will own a 25% working interest and a corresponding 20% net revenue interest until payout at which time the Company's interest will convert to a 43.75% working interest and a 35% net revenue interest. About Circle Star Houston, Tex.-based Circle Star Energy Corp. owns royalty, leasehold, operating, net revenue, net profit, reversionary and other mineral rights and interests in certain oil and gas properties in Texas. The Company's properties are in Crane, Scurry, Victoria, Dimmit, Zavala, Grimes, Madison, Robertson, Fayette, and Lee Counties. The Company reported a net loss of $11.07 million on $942,150 of total revenues for the year ended April 30, 2012, compared with a net loss of $31,718 on $0 of total revenues during the prior fiscal year. Hein & Associates LLP, in Dallas, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficit which raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at July 31, 2012, showed $8.36 million in total assets, $4.46 million in total liabilities, and $3.89 million in total stockholders' equity. CITIZENS SECURITY: A.M. Best Hikes Finc'l Strength Rating to 'B' ---------------------------------------------------------------- A.M. Best Co. has upgraded the financial strength rating to B (Fair) from B- (Fair) and the issuer credit rating to "bb" from "bb-" of Citizens Security Life Insurance Company (Citizens Security) (Louisville, KY). The outlook for both ratings is stable. The rating upgrades reflect Citizens Security's continuing improved operating results in its core group dental and vision segment and continuing premium revenue growth in its individual dental and vision business. Additionally, the company has materially decreased its holdings of below investment grade securities and continues to benefit from a lower expense structure. Although operating results in its group dental and vision segment have improved in recent years, income from a ceding commission on reinsured individual life business in 2010 continues to comprise the majority of the company's earnings. However, A.M. Best expects the group dental and vision segment to increasingly contribute to its earnings over the near term. Citizens Security markets primarily dental and vision insurance products to small employer groups and individuals mainly in Southeastern and certain Midwestern states. Rating drivers that may result in future positive rating actions for Citizens Security include continuing favorable operating results, sustained profitable revenue growth, ongoing reduction of risk in its investment portfolio and maintenance of its adequate risk-adjusted capital level. Conversely, rating drivers that may result in future negative rating actions include a decline in the company's operating performance, deterioration in its premium revenue growth, unfavorable investment results or erosion of its risk-adjusted capital. CLEVELAND CORPORATE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Cleveland Corporate Services, Inc. 1821 East 40th Street Cleveland, OH 44103 Bankruptcy Case No.: 12-18640 Chapter 11 Petition Date: November 26, 2012 Court: U.S. Bankruptcy Court Northern District of Ohio (Cleveland) Judge: Jessica E. Price Smith Debtor's Counsel: Harry W. Greenfield, Esq. BUCKLEY KING LPA 600 Superior Avenue E, Suite 1400 Cleveland, OH 44114 Tel: (216) 363-1400 Fax: (216) 579-1020 E-mail: bankpleadings@bucklaw.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 with the petition is available for free at: http://bankrupt.com/misc/ohnb12-18640.pdf The petition was signed by Gregory Peck, chief executive officer. CONTOUR PROPERTIES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Contour Properties, LLC 129 Old Bridge Road Danville, KY 40422 Bankruptcy Case No.: 12-52987 Chapter 11 Petition Date: November 27, 2012 Court: United States Bankruptcy Court Eastern District of Kentucky (Lexington) Debtor's Counsel: Weldon M. Burnette, Esq. P.O. Box 2913 Ocala, FL 34478 Tel: (352) 216-1889 E-mail: burnette_mark@yahoo.com Scheduled Assets: $1,796,750 Scheduled Liabilities: $3,238,100 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/kyeb12-52987.pdf The petition was signed by Jeffrey Carver, member/manager. CULPEPER BUSINESS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Culpeper Business Centre, L.L.C. 14115 Lovers Lane, Suite 500 Culpeper, VA 22701 Bankruptcy Case No.: 12-62664 Chapter 11 Petition Date: November 26, 2012 Court: U.S. Bankruptcy Court Western District of Virginia (Lynchburg) Debtor's Counsel: John C. Morgan, Jr., Esq. JOHN CARTER MORGAN, JR., PLLC 98 Alexandria Pike, Suite 10 Warrenton, VA 20186 Tel: (540) 349-3232 Fax: (540) 349-1278 E-mail: amy@jcmpllc.com;bkdocs@jcmpllc.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Hunter B. Chapman, member. DC DEVELOPMENT: Dec. 4 Hearing on Sale of Wisp Ski Resort --------------------------------------------------------- The Ski Industry Bankruptcy Monitor reported that the U.S. Bankruptcy Court in Maryland approved proposed bidding procedures to be used to conduct an auction for the Wisp ski resort assets on Nov. 30, 2012. A subsidiary of Entertainment Properties Trust named EPT Ski Properties, Inc. has submitted a bid of $20.5 million for certain designated assets to serve as the stalking horse bidder. The bid is subject to higher or otherwise better offers at the auction, and requires Court approval. The Court has scheduled a hearing to approve the successful bidder on Dec. 4, 2012. A sale would pave the way for the resort to continue operating as a going concern under new ownership. The Associated Press said the Bankruptcy Court considered the sale procedures at the hearing on Nov. 19. The hearing also involved procedures for a sale of the nearby Lodestone golf course and residential development. Both Lodestone and Wisp are owned by D.C. Development LLC of McHenry. AP said no buyer has been found for the Lodestone development. About Wisp Resort et al. Recreational Industries, Inc., D.C. Development, LLC, Wisp Resort Development, Inc., and The Clubs at Wisp, LLC, operate a ski resort and real estate development companies located in Garrett County, Maryland generally known as Wisp Resort. The Wisp Resort comprises approximately 2,200 acres of master planned and fully entitled land, 32 ski trails covering 132 acres of skiable terrain with 12 lifts and two highly-rated golf courses. Financial problems were caused by a guarantee given to Branch Banking & Trust Co. to secure a $29.6 million judgment the bank obtained on a real estate development within the property. Recreational Industries, D.C. Development, Wisp Resort Development and The Clubs at Wisp filed for Chapter 11 bankruptcy (Bankr. D. Md. Lead Case No. 11-30548) on Oct. 15, 2011. D.C. Development disclosed $91,155,814 in assets and $46,141,245 in liabilities as of the Chapter 111 filing. The Debtors engaged Logan, Yumkas, Vidmar & Sweeney LLC as counsel and tapped Invotex Group as financial restructuring consultant. SSG Capital Advisors, LLC, serves as exclusive investment banker to the Debtors. The Official Committee of Unsecured Creditors has tapped Cole, Schotz, Meisel, Forman & Leonard, P.A. as counsel. DEWEY & LEBOEUF: Judge Might Cut Partners Committee's Fees ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Dewey & LeBoeuf LLP official partners' committee will live to fight another day, although U.S. Bankruptcy Judge Martin Glenn said in an opinion that he might cut fees for the panel's lawyers. The report relates that in a separate opinion Nov. 29, Judge Glenn gave authority for the official creditors' committee of the liquidating law firm to prosecute and settle claims against the firm's top managers. The report recounts that the firm filed papers in October asking Judge Glenn to disband the former partners' committee. Dewey claimed the decision by the U.S. Trustee to appoint the committee "was a misstep that needs to be corrected." Dewey characterized the committee as not having "contributed in a productive way to this bankruptcy case." According to the report, the motion to disband came days after Judge Glenn said that an effort by the partners' committee to compel appointment of an examiner was "for an improper purpose as a litigation tactic." Judge Glenn said in his written opinion Thursday that the committee "continues to serve an important purpose." He pointed to the appeal being taken by the partners from his approval of a settlement and denial of a motion for an examiner. Judge Glenn said his "biggest concerns" relate to the size of fee requests. It will all come out in the wash, Judge Glenn said, because he will later rule on the payment of fees and might find that some work was unnecessary. Power to Sue On Thursday, Judge Glenn also gave the official creditors' committee power to sue the defunct law firm's three former top officers. Dewey itself agreed on allowing the committee to sue. Objections came from former Chairman Stephen DiCarmine and Joel Sanders, the ex-chief financial officer. Judge Glenn said the committee made out a "colorable claim" against the managers that, "if true, would likely entitle the estate to a monetary judgment that could be paid from the $50 million of policies covering such actions by former directors of the firm." The firm filed a proposed liquidating Chapter 11 plan this month, wrapped around settlements with secured lenders and partners. Judge Glenn said the official partners' committee might play an important role in crafting a consensual plan. There will be a Jan. 3 hearing for approval of the explanatory disclosure statement. 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: Creditors Panel Has Standing to Sue Ex-Management ------------------------------------------------------------------ Bankruptcy Judge Martin Glenn on Thursday granted the Official Committee of Unsecured Creditors appointed in Dewey & LeBoeuf LLP's case leave, standing and authority to prosecute and, if appropriate, settle certain claims on behalf of the Debtors' estates. The Unsecured Committee intends to prosecute or settle certain claims against the Debtor's former management team for, among other things, breaches of their fiduciary duties to the Firm and its creditors. The Debtor has consented to the Unsecured Committee obtaining derivative standing to prosecute the claims on behalf of the estate. Stephen DiCarmine, Joel I. Sanders and Steven H. Davis have objected to the request. The claims against Messrs. Davis, DiCarmine and Sanders arise out of the collapse of Dewey & LeBoeuf. Mr. Davis was formerly the Chairman of the Firm and a member of its Executive Committee, Mr. DiCarmine was formerly the Firm's Executive Director, and Mr. Sanders was formerly the Firm's Chief Financial Officer. Judge Glenn held that the Unsecured Committee has established a proper basis to proceed with claims against Messrs. Davis, DiCarmine and Sanders. The allegations made in the Motion appear "to assert facially-valid claims that would be sufficient to withstand a motion to dismiss for failure to state a claim." "Those three individuals vigorously contest the allegations made by the Unsecured Committee, but the present Motion is not the place to resolve what will likely be disputed issues of fact and law," Judge Glenn said. Mr. Davis does not oppose the request of the Unsecured Committee for standing to bring suit against him relating to his alleged role in the Firm's failure, but he denies that he engaged in any wrongdoing and disputes the allegations. Mr. Davis asserts the Unsecured Committee is targeting him as a scapegoat for one reason: he has up to $50 million in coverage under various management liability insurance policies. According to Judge Glenn, "The Unsecured Committee's request for authority to settle claims is often a closer question, but since prosecution of these claims is likely to be conducted by a liquidation trust pursuant to the terms of a confirmed liquidation plan, the issue of settlement authority and any requirement for court approval of any settlement will be dealt with in the context of plan confirmation. If the claims are prosecuted and settled before any plan is confirmed, court-approval of any settlement will be required, giving the Debtor or any other party-in-interest an opportunity to appear and be heard. The Court therefore concludes that the request for authority to settle is likewise appropriate under the circumstances." A copy of Judge Glenn's Nov. 29, 2012 Memorandum Opinion and Order is available at http://is.gd/4jPyD4from Leagle.com. 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 on Nov. 21, 2012, filed a Chapter 11 liquidating plan and disclosure statement, which incorporates the partner contribution plan approved by the bankruptcy court in October. Under the so- called PCP, 440 former partners will receive releases in exchange for $71.5 million in contributions. The plan is also based on a proposed settlement between secured lenders and the unsecured creditors' committee. Secured lenders will have an allowed secured claim for $261.9 million, along with a $100 million unsecured claim for the shortfall in collections on their collateral. Unsecured creditors will have $285 million in allowed claim. In the new lender settlement, secured creditors would permit $54 million in collection of accounts receivable to be utilized in the liquidation. From the first $67.5 million collected in the partners' settlement, the plan offers 80% to secured lenders, with the remaining 20% earmarked for unsecured creditors. Collections from the partners settlement above $67.5 million would be split 50-50 between secured and unsecured creditors. Meanwhile, secured creditors will receive no distribution on the $100 million deficiency claim from the first $67.5 million from the partners' settlement. If secured lenders don't agree to release partners, they receive nothing from the partners' settlement payments. From collection of other assets -- such as insurance, claims against firm management and lawsuits -- the plan divides proceeds, with lenders receiving 60% to 70% and unsecured creditors taking the remainder. A hearing to approve the explanatory Disclosure Statement is set for Jan. 3 at 2:00 p.m. Objections to the Disclosure Statement are due Dec. 24. The Debtor aims a confirmation hearing to approve the plan by the end of February. DEWEY & LEBOEUF: Former Partners Committee Defeats Disbandment Bid ------------------------------------------------------------------ The Official Committee of Former Partners in Dewey & LeBoeuf LLP's case is not going anywhere. On Thursday, Bankruptcy Judge Martin Glenn denied Dewey's request for an order directing the U.S. Trustee to disband the Former Partners Committee. From the Debtor's perspective, the Former Partners Committee's members -- consisting currently of only four former partners (two of which have signed on to the partner contribution plan) -- are solely motivated by a desire to reduce their own "claw back" liability, which Dewey maintains is an insufficient reason to be endowed with official committee status. Dewey argued that the Former Partners Committee has been counterproductive, is too expensive and is no longer necessary. The secured lenders and the Official Committee of Unsecured Creditors oppose the existence of the Former Partners Committee. The Unsecured Committee said any remaining interests of former partners can be adequately represented by the Unsecured Committee who holds a fiduciary duty to former partners. The United States Trustee objected to Dewey's request, primarily arguing that there is no statutory basis under 11 U.S.C. Section 1102(a) that empowers the Court to disband a committee once it has been appointed by the U.S. Trustee. The Former Partners Committee also filed an objection, arguing that disbandment would be an unwarranted extraordinary relief granted as a punishment merely because it objected to the partner contribution plan. The Former Partners Committee also questions the timing of the disbandment motion, which was filed one day after the Court approved the contribution plan, and the day before the Former Partners Committee filed a notice of appeal from the Court's decision denying the appointment of an Examiner and approving the plan. According to Judge Glenn, the issue is not whether the U.S. Trustee abused her discretion in appointing the Former Partners Committee in the first instance. Rather, the issue now is whether circumstances have changed making it appropriate for the Court to order that the Former Partners Committee be disbanded in light of the very substantial expense to the estate and the ability of the Unsecured Committee to represent the interests of the former partners that make up the Former Partners Committee' constituency. "The Court concludes that the [Former Partners Committee] continues to serve an important purpose, the most obvious function being to prosecute the appeal the [Former Partners Committee] filed from this Court's decision denying the examiner motion and approving the PCP. While the Court strongly believes those issues were correctly decided, the [Former Partners Committee's] arguments were not frivolous and there is no basis to conclude that the appeal is being pursued in bad faith. Furthermore, the Debtor has recently filed a proposed disclosure statement and plan. The [Former Partners Committee] can play a constructive role in efforts to reach a consensual plan," Judge Glenn said. Judge Glenn acknowledged, however, that the he biggest concerns relating to the Former Partners Committee are the very high fees being incurred for the work of its professionals. In denying the Former Partners Committee's examiner motion, the Court had pointed out the "precarious financial situation present in this case [such that the appointment of an examiner] would almost certainly result in conversion of this case to a case under chapter 7 and possible administrative insolvency." According to Judge Glenn, the professional fees of the Debtor, Unsecured Committee and Former Partners Committee likewise risk tipping the case to administrative insolvency. "The Court has not yet considered applications to approve professional fees, but all professionals seeking compensation from the estate should be mindful of the fact that the standards for reviewing fee applications require the Court to consider whether services are necessary, determined from the perspective of the time at which the services were rendered," Judge Glenn said. During the argument of the Motion on Nov. 21, the Court asked the U.S. Trustee to provide a supplemental memorandum addressing one question only, based on an assumption that the Court concludes that it has the authority to order that the committee be disbanded -- what the position of the U.S. Trustee is with respect to whether the former partners' committee should remain in place." In response to the Court's directive, on Nov. 27, 2012, the U.S. Trustee filed a Supplement to Objection to the Motion. Judge Glenn said the U.S. Trustee disregarded the Court's directive. "When asked to aid the Court by providing the UST's position on whether the FPC should be kept in place assuming the Court has the power to order that a committee be disbanded, the UST simply parroted the UST's earlier argument that the Court does not have the authority to order a committee appointed by the UST to be disbanded under any circumstance. The question asked by the Court was simply ignored," Judge Glenn indicated in a footnote to his decision. "Essentially, the UST argues that she has complete and unreviewable (by any court) discretion to decide whether to disband an additional committee appointed by the UST, meaning that no court can decide based on changed circumstances that the committee should be disbanded, for example if continued functioning of the committee (with retained counsel paid by the estate) would result in administrative insolvency. . . . [B]ecause the Court concludes that the FPC should not be disbanded at the present time, it is unnecessary to reach the issue of the Court's authority to order that the FPC be disbanded. The UST is simply not free to ignore the Court's directive, particularly when it did not raise an issue about it when the directive was given." A copy of Judge Glenn's Nov. 29, 2012 Memorandum Opinion and Order is available at http://is.gd/PeeTUEfrom Leagle.com. 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 on Nov. 21, 2012, filed a Chapter 11 liquidating plan and disclosure statement, which incorporates the partner contribution plan approved by the bankruptcy court in October. Under the so- called PCP, 440 former partners will receive releases in exchange for $71.5 million in contributions. The plan is also based on a proposed settlement between secured lenders and the unsecured creditors' committee. Secured lenders will have an allowed secured claim for $261.9 million, along with a $100 million unsecured claim for the shortfall in collections on their collateral. Unsecured creditors will have $285 million in allowed claim. In the new lender settlement, secured creditors would permit $54 million in collection of accounts receivable to be utilized in the liquidation. From the first $67.5 million collected in the partners' settlement, the plan offers 80% to secured lenders, with the remaining 20% earmarked for unsecured creditors. Collections from the partners settlement above $67.5 million would be split 50-50 between secured and unsecured creditors. Meanwhile, secured creditors will receive no distribution on the $100 million deficiency claim from the first $67.5 million from the partners' settlement. If secured lenders don't agree to release partners, they receive nothing from the partners' settlement payments. From collection of other assets -- such as insurance, claims against firm management and lawsuits -- the plan divides proceeds, with lenders receiving 60% to 70% and unsecured creditors taking the remainder. A hearing to approve the explanatory Disclosure Statement is set for Jan. 3 at 2:00 p.m. Objections to the Disclosure Statement are due Dec. 24. The Debtor aims a confirmation hearing to approve the plan by the end of February. DRINK INC: Case Summary & Largest Unsecured Creditor ---------------------------------------------------- Debtor: The Drink, Inc. 3264 N 600 W Pleasant View, UT 84414 Bankruptcy Case No.: 12-34795 Chapter 11 Petition Date: November 26, 2012 Court: U.S. Bankruptcy Court District of Utah (Salt Lake City) Judge: William T. Thurman Debtor's Counsel: Andrew B. Clawson, Esq. PEARSON, BUTLER & CARSON, PLLC 1682 S. Reunion Avenue, Suite 100 South Jordan, UT 84095 Tel: (801) 207-8262 Fax: (801) 797-2389 E-mail: andrew@abclawutah.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Bob Watson, president. The Company's list of its largest unsecured creditors contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo Line of Credit $75,000 P.O. Box 29704 Phoenix, AZ 85038 DYNEGY INC: District Court to Hear Peabody Contract Dispute ----------------------------------------------------------- New York District Judge Kenneth M. Karas withdraw the bankruptcy court reference of the lawsuit brought by Dynegy Danskammer, L.L.C., against Peabody COALTRADE International Ltd. Danskammer alleges breach of contract for delaying delivery or failing to deliver coal shipments at various times from 2008 to 2011. Peabody moved to withdraw the reference to the bankruptcy court for the breach of contract claim under 28 U.S.C. Sec. 157(d) The case is DYNEGY DANSKAMMER, L.L.C., Plaintiff, v. PEABODY COALTRADE INTERNATIONAL LTD., Defendant, Case No. 12-CV-5859 (S.D.N.Y.). A copy of the Court's Nov. 7, 2012 Opinion and Order is available at http://is.gd/mX4UG1from Leagle.com. Peabody is represented by Robert A. Scher, Esq. -- rscher@foley.com -- at Foley & Lardner, LLP. About Dynegy Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) on Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. A settlement, which has already been approved by the bankruptcy court, provides for Dynegy Inc. and Holdings to merge and for the administrative claim granted to Dynegy Inc. in the Holdings Chapter 11 case to be transferred out of Dynegy Inc. for the benefit of its shareholders. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Inc. is represented by White & Case LLP and advised by Lazard Freres & Co. LLC. Dynegy Inc. successfully completed its Chapter 11 reorganization and emerged from bankruptcy October 1. Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., remain under Chapter 11 protection. As of July 31, 2012, Dynegy Inc. had total assets of $3.15 billion, total liabilities of $3.14 billion and total stockholders' equity of $6.68 million. E-DEBIT GLOBAL: Initiates Search for New CDO and COO ---------------------------------------------------- E-Debit Global Corporation has commenced its search and review of candidates for the positions of Chief Development Officer and Chief Operating Officer. "Further to our previous announcements related to the re- establishment and renewal of our traditional marketing and sales organization GROUP-LINK Inc. we have commenced our search and review of candidates for the positions of Chief Development Officer and Chief Operating Officer to co-ordinate and direct the growth of our e-commerce payment platform and to expand our current marketing organization," said Douglas Mac Donald, E- Debit's President and CEO. "We have been identifying suitable candidates over the past several months and should be in a position to announce the appointment of these key people to GROUP-LINK in the very near future," added Mr. Mac Donald. About E-Debit Global Corporation E-Debit Global Corporation (WSHE) is a financial holding company in Canada at the forefront of debit, credit and online computer banking. Currently, the Company has established a strong presence in the privately owned Canadian banking sector including Automated Banking Machines (ABM), Point of Sale Machines (POS), Online Computer Banking (OCB) and E-Commerce Transaction security and payment. E-Debit maintains and services a national ABM network across Canada and is a full participating member of the Canadian INTERAC Banking System. Following the 2011 results, Schumacher & Associates, Inc., in Littleton, Colorado, noted that the Company has incurred net losses for the years ended Dec. 31, 2011, and 2010, and had a working capital deficit and a stockholders' deficit at Dec. 31, 2011, and 2010, which raise substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $1.09 million in 2011, compared with a net loss of $1.15 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.82 million in total assets, $3.52 million in total liabilities, and a $1.70 million total stockholders' deficit. EASTMAN KODAK: Competing Lenders Improve Terms of New Loan ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Eastman Kodak Co. has an even better offer for additional financing to top off the $950 million loan already in place. Unless the offer improves again, Kodak could end up with an $830 million supplemental loan, including $455 million in new money. Early in November, Kodak filed papers asking for quick approval of an additional $793 million loan offered by some second-lien creditors. Other second-lien lenders objected to quick approval, saying they would provide a loan on better terms. As reported in the Nov. 30 edition of the TCR, Eastman Kodak said it accepted an offer from the Steering Committee of the Second Lien Noteholders Committee for interim and exit financing totaling $830 million in loans. The commitment is superior to -- and therefore replaces -- the $793 million commitment announced by the company on Nov. 12. Kodak said, according to Bloomberg, that the newest version of the supplemental loan will be open to participation by all second-lien lenders. To become effective, the digital imaging business must be sold for at least $500 million. Up to $630 million from the new loan can be rolled over on emergence from Chapter 11, assuming specified conditions are met, including successful resolution of Kodak's obligations on the U.K. pension plans. Second lien-lenders offering the first version of the new loan were Centerbridge Capital Partners, GSO Capital Partners, UBS AG and JPMorgan Chase & Co. Lenders previously saying they would make a more favorable loan included Archview Investment Group LP, Bennett Management Corp., D.E. Shaw Laminar Portfolios LLC and Litespeed Master Fund Ltd. Kodak's $400 million in 7% convertible notes due in 2017 traded on Nov. 27 for 10.25 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. A copy of the DIP Facility is available for free at: http://is.gd/wBojZI 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. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. 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. EMPIRE RESORTS: Joseph D'Amato Keeps CEO Position Until 2015 ------------------------------------------------------------ Empire Resorts, Inc., entered into an employment agreement with Joseph A. D'Amato, pursuant to which Mr. D'Amato will continue to serve as the Company's Chief Executive Officer. Mr. D'Amato's employment agreement provides for a term ending on Dec. 31, 2015, unless earlier terminated by either party in accordance with the provisions thereof. The D'Amato Employment Agreement supersedes Mr. D'Amato's existing employment agreement with the Company. Mr. D'Amato will receive a base salary of $375,000 and such incentive compensation and bonuses, if any, (i) as the Compensation Committee in its discretion may determine, and (ii) to which Mr. D'Amato may become entitled pursuant to the terms of any incentive compensation or bonus program, plan or agreement from time to time in effect in which he is a participant. Mr. D'Amato will receive a monthly housing allowance in the amount of $1,500. In addition, the Company will lease or purchase an automobile for Mr. D'Amato's sole and exclusive use, and be responsible for the payment of certain expenses related to that vehicle, with an approximate monthly value of $1,500. The Company will also obtain and maintain a key man life insurance policy for Mr. D'Amato providing death benefits in the amount of $1 million to Mr. D'Amato's estate and which policy may, at the option of the Company's Compensation Committee, provide death benefits of $3 million to the Company. The Company has agreed to customary indemnification for Mr. D'Amato for any claims arising out of his service to the Company. A copy of the Employment Agreement is available for free at: http://is.gd/nK7FIZ About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- owns and operates Monticello Casino & Raceway, a video gaming machine and harness racing track and casino located in Monticello, New York, 90 miles northwest of New York City. The Company reported a net loss of $24,000 in 2011, compared with a net loss of $17.57 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $51.98 million in total assets, $25.48 million in total liabilities, and $26.49 million in total stockholders' equity. ESQUIRE GROUP: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: The Esquire Group, Inc. Esquire Drive Barboursville, WV 25504 Bankruptcy Case No.: 12-30625 Chapter 11 Petition Date: November 26, 2012 Court: U.S. Bankruptcy Court Southern District of West Virginia (Huntington) Judge: Ronald G. Pearson Debtor's Counsel: Joe M. Supple, Esq. SUPPLE LAW OFFICE, PLLC 801 Viand Street Point Pleasant, WV 25550 Tel: (304) 675-6249 Fax: (304) 675-4372 E-mail: supplelawoffice@yahoo.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 12 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wvsb12-30625.pdf The petition was signed by Joseph Q. Midkiff, president. FIRST PLACE: Bank Auction Scheduled for Dec. 13 ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that First Place Financial Corp., a bankrupt bank holding company, will hold a Dec. 13 auction to find a buyer with the best bid for its operating subsidiary, the 41-branch First Place Bank. First Place filed for Chapter 11 intending to sell its bank subsidiary for $45 million to Talmer Bancorp Inc. from Troy, Michigan. According to the Bloomberg report, under sale procedures approved Nov. 28, competing bids are due Dec. 11. There will be a hearing on Dec. 14 in U.S. Bankruptcy Court for approval of the sale. The U.S. Treasury Department wanted the sale slowed down by three months in hopes of attracting a higher offer. The government holds preferred stock in return for injecting cash into the bank during the financial crisis. Unless the sale fetches a higher price, Treasury said it will receive nothing from the bankruptcy. With 45 branches of its own, Talmer will provide the First Place bank with $200 million in capital to meet regulatory requirements. U.S. Objection Vindy.com reported that the United States, on behalf of the U.S. Treasury Department, is objecting to Talmer's $45 million bid, calling it too low and raising concerns that the department will be left holding $72.9 million in debt paid to the bank in 2009 under the government's Troubled Asset Relief Program, initiated at the height of the financial meltdown to rescue failing banks. According to the report, the Treasury asked the Court to slow down the "expedited nature of the sale proceedings" so that it can gather more information. It also sought consultation rights and a right to attend auction, if need be. The report said the proceedings are now garnering national attention, with the revelation that W.L. Ross & Co., owned by the billionaire investor Wilbur Ross, is Talmer Bancorp's leading investor, holding 24% of the companies shares. The report said Mr. Ross made his fortune as an opportunity investor known for buying steel companies when no one else would and guiding other businesses through the restructuring process. The report said officials with Talmer dismissed the latest developments by saying that delays were to be expected during the bankruptcy. About First Place First Place Financial Corp. is a $3.1 billion financial services holding company, based in Warren, Ohio. The First Place bank subsidiary isn't in bankruptcy. First Place filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-12961) in Delaware on Oct. 28, 2012, 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. Donlin, Recano & Company, Inc. -- http://www.donlinrecano.com-- is the claims and notice agent. FLORIDA GAMING: To Sell Centers to Silvermark for $115 Million -------------------------------------------------------------- Florida Gaming Corporation entered into a Stock Purchase Agreement for the sale of its wholly owned subsidiary, Florida Gaming Centers, Inc., to Silvermark LLC for $115 million plus the assumption of certain liabilities of Centers associated with two mortgages held by Miami-Dade County. Centers is the owner and operator of two jai-alai frontons located in Ft. Pierce and Miami, Florida, which offer poker and inter-track pari-mutuel wagering facilities. Centers constitutes the Company's only operating asset. Generally, Silvermark will assume Centers' post-closing obligations under a Settlement Agreement with Miami-Dade County, Florida pertaining to a parking lot that is adjacent to Centers? Miami facility which is subject to notes and mortgages totaling approximately $15 million. The $115 million cash purchase price, which is subject to adjustment as described in the SPA, will be used to fund the repayment of Centers' other outstanding indebtness, including but not limited to approximately $87 million credit facility and other debt totaling approximately $10.5 million. Additionally, $7.5 million of the purchase price will be held in escrow for up to three years to indemnify Silvermark LLC against obligations of the Company after the closing. The Company expects to use any net cash proceeds from the transaction, after the repurchase of warrants for 35% of Centers' equity held by lenders under Centers' credit facility and the debt reduction, to pay transaction-related expenses and for other purposes. The proposed transaction is subject to Company stockholder approval and customary regulatory approvals, including Silvermark's receipt of a Florida gaming license, and other customary regulatory and closing conditions. The transaction is also conditioned on Centers' receipt of an order from the court in the Company's ongoing litigation in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida either (i) approving of Centers' entry into the transaction or (ii) ruling that the court's approval of Centers' entry into the transaction is not required. Under the Stock Purchase Agreement, the Company and Centers must pay Silvermark a termination fee of $4.6 million plus reimbursement for costs and expenses incurred by Silvermark in connection with the proposed transaction if Silvermark terminates the agreement because of a breach by the Company or Centers of any representation, warranty, covenant or other agreement contained in the SPA or if the Company terminates the agreement to enter into a superior proposal or acquisition proposal (as those terms are defined in the SPA). Silvermark may also terminate the agreement at anytime within the first 90 days of its due diligence period which commenced on Nov. 25, 2012. In connection with the SPA, the Company's Chairman, W. Bennett Collett, and the Company's President and CEO, W. Bennett Collett, Jr., each executed a Joinder and Guarantee agreement in which each of them, jointly and severally, have guaranteed the Company's and Centers' obligations under the Stock Purchase Agreement. Silvermark and the Company's President and CEO, W. Bennett Collett, Jr., have entered into a letter agreement providing that Mr. Collett will enter into a three year employment agreement with Centers. Stock Purchase Agreement The proposed transaction is subject to Company stockholder approval and customary regulatory approvals, including Silvermark's receipt of a Florida gaming license, and other customary regulatory and closing conditions. The transaction is also conditioned on Centers' receipt of an order from the court in the Company's and Centers' ongoing litigation in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida (a) either approving of Centers' entry into the transaction or ruling that the court's approval of Centers' entry into the transaction is not required, and (b) requiring Centers' receiver to cooperate with Centers to allow Centers to comply with and fulfill its obligations under the SPA. On Nov. 27, 2012, the court entered an order (y) that Centers' entry into the SPA is outside the scope of the receivership order, and (z) ordering the receiver to cooperate with reasonable due diligence requirements in connection with the transaction. Under the SPA, the Company and Centers must pay Silvermark a termination fee of $4.6 million plus reimbursement for costs and expenses incurred by Silvermark in connection with the proposed transaction if Silvermark terminates the SPA because of a breach by the Company or Centers of any representation, warranty, covenant or other agreement contained in the SPA or if the Company terminates the SPA to enter into a "superior proposal" or "acquisition proposal". Silvermark may also terminate the SPA at anytime within the first 90 days of its due diligence period which commenced on Nov. 25, 2012. In connection with the SPA, the Company's Chairman, W. Bennett Collett, and the Company's President and CEO, W. Bennett Collett, Jr., each executed a Joinder and Guarantee agreement in which each of them, jointly and severally, have guaranteed the Company's and Centers' obligations under the SPA. Silvermark and the Company's President and CEO, W. Bennett Collett, Jr., have entered into a letter agreement providing that Mr. Collett will enter into a three year employment agreement with Centers. A copy of the Stock Purchase Agreement is available at: http://is.gd/oB5xoq About Florida Gaming Florida Gaming Corporation operates live Jai Alai games at frontons in Ft. Pierce, and Miami, Florida through its Florida Gaming Centers, Inc. subsidiary. The Company also conducts intertrack wagering (ITW) on jai alai, horse racing and dog racing from its facilities. Poker is played at the Miami and Ft. Pierce Jai-Alai, and dominoes are played at the Miami Jai-Alai. In addition, the Company operates Tara Club Estates, Inc., a residential real estate development located near Atlanta in Walton County, Georgia. Approximately 46.2% of the Company's common stock is controlled by the Company's Chairman and CEO either directly or beneficially through his ownership of Freedom Holding, Inc. The Company is based in Miami, Florida. The Company reported a net loss of $21.76 million in 2011, compared with a net loss of $4.84 million in 2010. As of June 30, 2012, the Company was in default on an $87,000,000 credit agreement regarding certain covenants. The Company's continued existence as a going concern is dependent on its ability to obtain a waiver of its credit default and to generate sufficient cash flow from operations to meet its obligations. After auditing the 2011 results, King & Company, PSC, in Louisville, Kentucky, noted that the Company has experienced recurring losses from operations, cash flow deficiencies, and is in default of certain credit facilities, all of which raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $77.40 million in total assets, $116.43 million in total liabilities and a $39.02 million total stockholders' deficit. FTLL ROBOVAULT: Lender Wants Trustee Named or Case Converted ------------------------------------------------------------ Paul Brinkmann at South Florida Business Journal reported that Florida Asset Resolution Group, subsidiary of BBX Capital and the primary lender in the FTLL RoboVault bankruptcy, seeks immediate appointment of a trustee to oversee RoboVault, and conversion of the case to Chapter 7 liquidation. According to the report, the primary lender in the bankruptcy, a subsidiary of BBX Capital, said in a motion filed Nov. 16, that RoboVault "has exhibited complete incompetence and gross mismanagement." The BBX subsidiary is represented by Michael Budwick of Miami- based law firm Meland Russin & Budwick. According to the report, in a motion filed with the court, Mr. Budwick said he sent emails Nov. 15 to RoboVault's attorney, Larry Wrenn, asking why Mr. Wrenn hadn't filed details of the company's finances. In particular, Mr. Budwick wanted to know what the company was doing with income it was generating while in bankruptcy. The report noted Mr. Wrenn replied he would get the information back to Mr. Budwick by the end of the day. However, according to Mr. Budwick's motion, Mr. Wrenn wrote back later, "Once the dentist finishes my root canal I will address your questions. Presently the pain medication is confusing my thoughts and ability to properly respond." About FTLL Robovault LLC Based in Fort Lauderdale, Florida, FTLL RoboVault LLC, aka Robo Vault, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 12-33090) on Sept. 27, 2012. Bankruptcy Judge Raymond B. Ray presides over the case. Lawrence B. Wrenn, Esq., serves as the Debtor's counsel. Developer Marvin Chaney signed Chapter 11 petitions for Robo Vault and affiliate Off Broward Storage. The companies own modern storage warehouses in Fort Lauderdale. The petition scheduled $18,665,069 in assets and $21,528,776 in liabilities. GLC LTD: Right to Jury Trial Doesn't Necessitate Suit Dismissal --------------------------------------------------------------- Bankruptcy Judge Jeffery P. Hopkins denied the request of Donald McLeod to dismiss GLC Limited's action to recover alleged fraudulent transfers. According to Mr. Hopkins, dismissal is required because (1) the Bankruptcy Court does not possess the Constitutional authority to enter a final judgment; and (2) Mr. McLeod's right to a jury trial precludes the Court from submitting proposed findings of fact and conclusions of law to the District Court. Judge Hopkins noted that Mr. McLeod is not a creditor of the bankruptcy estate and has not filed a proof of claim. Therefore, according to Judge Hopkins, the Court does not possess the Constitutional authority to enter a final judgment in this fraudulent transfer action. However, Judge Hopkins said Mr. McLeod's right to a jury trial does not necessitate dismissal of the action. The Court will hold a further pretrial conference for Dec. 10, 2012. At that time, the Court will set deadlines for dispositive motions and address any other issues raised by the parties. The case is GLC LIMITED Plaintiff v. JAMES GREGORY ROWSEY DONALD McLEOD Defendants, Case No. 11-11090, Adv. Proc. Case No. 12-1051 (Bankr. S.D. Ohio). A copy of the Court's Nov. 26, 2012 Order is available at http://is.gd/4XQvENfrom Leagle.com. About GLC Limited Proctorville, Ohio-based GLC Limited is a retail liquidation company in the wholesale/retail distribution industry. It offers large selections of name brand products in many categories. It distributes its goods through a network of wholesale distributors, retail chains and discount and surplus centers. It owns four warehouses for its goods which are located in Proctorville and Columbus, Ohio and Huntington, West Virginia. GLC filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ohio Case No. 11-11090) on Feb. 28, 2011. James R. Burritt, chief restructuring officer, signed the Chapter 11 petition. The Debtor disclosed $18,231,434 in assets and $28,095,356 in liabilities as of the Chapter 11 filing. Ronald E. Gold, Esq., and Joseph B. Wells, Esq., at Frost Brown Todd LLC, serve as the Debtor's bankruptcy counsel. James R. Burritt is the Chief Restructuring Officer and Leon C. Ebbert, PC, CPA, has been tapped as accountants. The Official Committee of Unsecured Creditors in GLC Limited's Chapter 11 bankruptcy case has tapped Morris, Manning & Martin, LLP, as counsel. On Oct. 29, 2011, the Bankruptcy Court entered an order confirming GLC Limited's First Amended Chapter 11 Plan of Liquidation. GOLDEN GAMING: Moody's Assigns 'Caa1' CFR/PDR; Outlook Stable ------------------------------------------------------------- Moody's Investors Service assigned a Caa1 Corporate Family Rating ("CFR") and Caa2 Probability of Default Rating ("PDR") to Golden Gaming, LLC. Moody's also assigned a B3 rating to the company's proposed $205 million first lien senior secured credit facilities which will be comprised of a five-year $5.0 million Revolving Credit Facility and a six-year $200.0 million Term Loan. The rating outlook is stable. The ratings and outlook are assigned subject to Moody's review of final terms and conditions. This is the first time that Moody's has rated Golden. The company plans to use proceeds from the new credit facilities to repay all its existing debt outstanding, to fund a special dividend to its owner and to pay fees and expenses related to the transaction. The credit facilities will be guaranteed by the company's direct and indirect subsidiaries and direct parent and secured by all domestic tangible assets. The rating actions are as follows: Rating assigned: Corporate Family Rating -- Caa1 Probability of Default Rating -- Caa2 $5 million senior secured revolving credit facility due 2017 at B3 (LGD2, 25%) $200 million senior secured term loan due 2018 at B3 (LGD2, 25%) Rating outlook: Stable Ratings Rationale The Caa1 CFR reflects Golden's very small size and scale, significantly lower operating margin as compared to other gaming companies due to weak market fundamentals, high fixed cost structure, and revenue concentration from a single jurisdiction in Nevada. The rating also considers the company's high financial leverage of about 7.5 times debt/EBITDA as of September 2012 (including Moody's analytical adjustments for operating leases and cost savings from the company's February 2012 Affinity asset acquisition), weak interest coverage of below 1.0x as measured by EBIT/Interest and modest liquidity. Risks associated with integrating the business acquired from Affinity Gaming that was largely underperforming and that accounts for roughly 50% of the company's total revenues on a pro forma basis further constrain the rating. These factors are partially offset by Golden's leadership position in the niche route operation in Nevada achieved through the Affinity asset acquisition, the potential realization of synergistic savings from the acquisition and an improved cost of capital through a lower interest rate from the refinancing. The stable rating outlook anticipates that gaming demand in Nevada's locals market will not improve significantly in the intermediate term given the uncertain economic recovery and high unemployment in the State. In addition, Moody's expects the company will generate slightly positive or break-even free cash flow in the next 12-18 months. Based on these expectations, the company's leverage will likely remain high, at or above 7.0x. Golden's ratings will likely be downgraded if liquidity deteriorates materially for any reason. A downgrade could also materialize if total adjusted debt/EBITDA rises above 8.0x or if free cash flow turns negative on a sustained basis. Besides the company's high financial leverage, the company's small scale, and integration risks related to the Affinity asset acquisition will constrain the rating upside in the near term. Positive rating pressure could build if Golden can improve its EBITDA margin materially above its current level of about 10% by successfully integrating Affinity's assets, leading to a sustained lower level of debt/EBITDA of below 6.5x and EBIT/Interest above 1.2x. Golden Gaming, is an owner and operator of three casinos Pahrump, NV, gaming taverns and slot routes in Nevada, all of which are focused primarily on catering to the locals market. The principal methodology used in rating Golden Gaming was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. GMX RESOURCES: Shareholders OK Reverse Stock Split Proposal ----------------------------------------------------------- GMX Resources Inc. held a special meeting of shareholders in Oklahoma City, Oklahoma, on Nov. 29, 2012. At the Special Meeting, the shareholders approved a proposal to grant the Board of Directors of the Company discretionary authority to amend the Company's Certificate of Incorporation to effect a reverse stock split of the issued and outstanding shares of the Company's common stock, par value $0.001 per share, such split to combine a whole number of outstanding shares of Common Stock in a range of not less than five shares and not more than 13 shares, into one share of common stock at any time prior to Jan. 31, 2013. The Board of Directors of the Company has not yet determined the number of shares of common stock to be applicable in the Reverse Split Proposal or set any date to effect the reverse stock split, but the Company expects to effect that split prior to Jan. 31, 2013, when determined and approved by the Board of Directors. About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. The Company's balances sheet at Sept. 30, 2012, showed $343.14 million in total assets, $467.64 million in total liabilities and a $124.49 million total deficit. * * * As reported by the TCR on Nov. 23, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Oklahoma City-based GMX Resources Inc. to 'CCC' from 'SD' (selective default). "The rating on GMX Resources Inc. reflects our assessment of the company's 'weak' liquidity, 'vulnerable' business risk, and 'highly leveraged' financial risk," said Standard & Poor's credit analyst Paul Harvey. GREEKTOWN SUPERHOLDINGS: S&P Assigns 'B' Corporate Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned Detroit, Mich.-based gaming operator Greektown Superholdings Inc. its 'B' corporate credit rating. The outlook is stable. "At the same time, we assigned the company's proposed $355 million first-lien credit facility (consisting of a $15 million revolver due 2015, a $15 million term loan A due 2017, and a $325 million term loan B due 2018) our 'BB-' issue-level rating, with a recovery rating of '1', indicating our expectation for very high (90% to 100%) recovery for lenders in the event of a payment default," S&P said. "We also assigned the company's proposed $100 million second-lien term loan due 2019 our 'CCC+' issue-level rating, with a recovery rating of '6', indicating our expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default," S&P said. "Proceeds from the proposed credit facilities are expected to be used to refinance $400 million in outstanding debt (including $15 million in expected revolver borrowings at the time of close of the transaction), and to pay for accrued interest, fees, and expenses," S&P said. "The 'B' corporate credit rating reflects our assessment of Greektown's financial risk profile as 'highly leveraged' and our assessment of the company's business risk profile as 'weak,' according to our criteria," said Standard & Poor's credit analyst Ariel Silverberg. "Our rating incorporates our expectation for net revenue and EBITDA to be essentially flat in 2012. This follows 2.2% growth in revenue and 4.4% growth in EBITDA in the first nine months of 2012, and reflects our expectation that fourth-quarter revenue and EBITDA will decline modestly due to the May 2012 opening of a new casino in Toledo, Ohio, about 60 miles away. We do not believe, however, that the Toledo casino will have a meaningful long-term negative impact on Greektown since a relatively small portion of Greektown's customers are from Ohio, and Greektown offers more amenities," S&P said. "For 2013, our ratings incorporate our expectation for low-single- digit percent growth in revenue and EBITDA. Our revenue forecast stems from our economists' forecast for continued modest economic improvement, including 2.4% growth in consumer spending, and continued reduction in national unemployment. We believe this will help drive continued visitation and spend at Greektown, which will help offset the pressure it will face in the first half of 2013, given the additional competition in Toledo opened in mid-2012. We also believe some revenue growth could be spurred by the introduction of new and updated amenities at the property, including a new valet garage, additional dining options, and incremental slots, which should help drive increased visitation. Our rating also incorporates the assumption that EBITDA margin will remain in the low-20% area through 2013, as we believe additional costs associated with the new amenities will be offset by our revenue growth expectation," S&P said. GREGORY G. MONARDO: Court Won't Approve Accord With Family Trust ---------------------------------------------------------------- Bankruptcy Judge Alan Jaroslovsky declined to approve a compromise between Linda Green, the Chapter 11 trustee of the case of Gregory G. Monardo, with the trustees of the Monardo Family Trust, whereby they will pay Ms. Green $10,000 to settle the estate's claims that they failed to properly administer the trust, of which Mr. Monardo is a beneficiary. The Court said there are too many loose ends. A copy of the Court's Nov. 12, 2012 Memorandum is available at http://is.gd/k3qckCfrom Leagle.com. Gregory G. Monardo in Mill Valley, Calif., filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 10-12168) on June 4, 2010. Judge Alan Jaroslovsky oversees the case. The Law Offices of Joel K. Belway serves as the Debtor's counsel. In his petition, the Debtor estimated $500,001 to $1 million in assets, and $1 million to $10 million in debts. A list of the Debtor's 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/canb10-12168.pdf HAMPTON ROADS: Taps James Johnson as Bank Senior Credit Officer --------------------------------------------------------------- Hampton Roads Bankshares, Inc., the holding company for The Bank of Hampton Roads and Shore Bank, announced that James C. Johnson has been appointed Senior Vice President and the Senior Credit Officer for Shore Bank. Mr. Johnson brings over 25 years of experience in commercial, commercial real estate and agricultural lending in the Delmarva region. He will be based in Rehoboth Beach, Delaware, and will report to Denny P. Cobb, chief credit officer of BHR. In addition to his responsibilities as Senior Credit Officer of Shore Bank, Mr. Johnson will also be involved in credit oversight for BHR. Douglas J. Glenn, president and chief executive officer of the Company and chief executive officer of BHR, said, "With the opening of Shore Bank's Rehoboth Beach Loan Production Office in June and Jim's appointment as Senior Credit Officer for Shore Bank, we continue to underscore our commitment to the Delmarva region and to add talented, experienced lenders to our team. Jim is a Delaware native with over twenty-five years of experience who understands the banking needs of local families and businesses." Prior to joining the Company, Mr. Johnson was Southern Delaware Relationship Manager for Wilmington Trust Company and for M&T Bank following its acquisition of Wilmington Trust Company. Previously, he served as Vice President and Senior Lender for The Felton Bank and as Vice President and Relationship Manager with PNC Bank and its predecessors, Mercantile Peninsula Bank and Mercantile Baltimore Trust Company. Earlier in his career, he served as Vice President and Senior Loan Officer with MidAtlantic Farm Credit and the Delaware Farm Credit Association and in a variety of positions with Sussex Trust Company. Mr. Johnson earned a B.S. in Business Administration/Marketing from Salisbury State University and an MBA from Wilmington College. He is involved in a number of community and civic organizations, including the Greater Seaford Chamber of Commerce, the Seaford/Western Sussex Economic & Development Forum and the Rehoboth Beach & Dewey Beach Chamber of Commerce. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and 15 ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company reported a net loss of $98 million in 2011, compared with a net loss of $210.35 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.07 billion in total assets, $1.88 billion in total liabilities and $187.96 million in total shareholders' equity. HCSB FINANCIAL: Incurs $3.6 Million Net Loss in Third Quarter ------------------------------------------------------------- HCSB Financial Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $3.6 million on $5.02 million of total interest income for the three months ended Sept. 30, 2012, compared with a net loss of $3.27 million on $5.89 million of total interest income for the same period during the preceding year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $5.20 million on $15.75 million of total interest income, compared with a net loss of $24.91 million on $20.15 million of total interest income for the same period a year ago. HCSB reported a net loss of $29.01 million in 2011, compared with a net loss of $17.27 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $512.65 million in total assets, $520.03 million in total liabilities and a $7.38 million total shareholders' deficit. "We note that there are no assurances that we will be able to raise this capital on a timely basis or at all. If we continue to fail to meet the capital requirements in the Consent Order in a timely manner, then this would result in additional regulatory actions, which could ultimately lead to the Bank being taken into receivership by the FDIC. Our auditors have noted that the uncertainty of our ability to obtain sufficient capital raises substantial doubt about our ability to continue as a going concern." A copy of the Form 10-Q is available for free at: http://is.gd/0XUs8m About HCSB Financial Loris, South Carolina-based HCSB Financial Corporation was incorporated on June 10, 1999, to become a holding company for Horry County State Bank. The Bank is a state chartered bank which commenced operations on Jan. 4, 1988. From its 13 branch locations, the Bank offers a full range of deposit services, including checking accounts, savings accounts, certificates of deposit, money market accounts, and IRAs, as well as a broad range of non-deposit investment services. During the third quarter of 2011, the Bank closed its Covenant Towers branch located at Myrtle Beach. All deposits were transferred to the Bank's Myrtle Beach branch and the Bank does not expect any disruption of service in that market for its customers. HERCULES OFFSHORE: Collects $10 Million from Angola Drilling ------------------------------------------------------------ Hercules Offshore, Inc., on Nov. 27, 2012, received a cash payment of $10 million from Angola Drilling Company Ltd., a customer in Angola. This amount represents an instalment payment on the balance owed to the Company from the Customer pursuant to a drilling contract for the Hercules 185 for services provided from July 2009 through January 2011. The proceeds will be recorded as revenue in the Company's International Offshore segment during the fourth quarter 2012. After the application of this payment, the Customer owes the Company $44.4 million under the Contract. While the Company remains hopeful the Customer will fulfil its obligations under the Contract, the collectability of the balance owed remains uncertain and difficult to forecast. Accordingly, the Company does not believe this recent payment has removed the uncertainty surrounding future collectability of the outstanding balance. Consequently, at this time, the Company has not recognized any of the $44.4 million remaining balance in the Company's financial statements. The amount owed to the Company remains undisputed by the Customer, and the Company is continuing to vigorously pursue all commercial and legal means for collection of the outstanding balance. If the Company receives any additional payments from the Customer, the payments will be recorded as an increase to the Company's International Offshore segment's revenue. Fleet Status Report Hercules Offshore, Inc., posted on its Web site at www.herculesoffshore.com a report entitled "Hercules Offshore Fleet Status Report". The Fleet Status Report includes the Hercules Offshore Rig Fleet Status (as of Nov. 28, 2012), which contains information for each of the Company's drilling rigs, including contract dayrate and duration. The Fleet Status Report also includes the Hercules Offshore Liftboat Fleet Status Report, which contains information by liftboat class for October 2012, including revenue per day and operating days. The Fleet Status Report is available for free at http://is.gd/Mk5Uwa About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. The Company reported a net loss of $76.12 million in 2011, a net loss of $134.59 million in 2010, and a net loss of $91.73 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $2.02 billion in total assets, $1.15 billion in total liabilities and $877.24 million stockholders' equity. * * * The Troubled Company Reporter said on March 23, 2012, that Moody's Investors Service upgraded Hercules Offshore, Inc., Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B3 from Caa1 contingent upon the completion of its recently announced recapitalization plan. Hercules' B3 CFR reflects its jackup fleet, which consists primarily of standard specification rigs with an average age of about 30 years. Its rigs are geographically concentrated in the Gulf of Mexico (GoM), a market that experienced a slow-down after the Macondo well incident. However, over the last year a pick-up in permitting and activity levels in the GoM, has led to higher dayrates. For Hercules, the improving market conditions have stabilized its cash flow from operations, which are expected continue to improve for at least the next 18 to 24 months as old contracts roll into new contracts with higher dayrates. These improving market conditions support the decision to upgrade Hercules' CFR at this time. As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based Hercules Offshore Inc. to 'B' from 'B-'. "The upgrade reflects the improving market conditions in the Gulf of Mexico and our expectations that Hercules' fleet will continue to benefit," said Standard & Poor's credit analyst Stephen Scovotti. HG MARKETING: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: HG Marketing, Inc. 20630 Nordhoff Street Chatsworth, CA 91311 Bankruptcy Case No.: 12-20315 Chapter 11 Petition Date: November 27, 2012 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Maureen Tighe Debtor's Counsel: Louis J. Esbin, Esq. LAW OFFICES OF LOUIS J. ESBIN 25129 The Old Road, Ste. 114 Stevenson Ranch, CA 91381-2273 Tel: (661) 254-5050 Fax: (661) 254-5252 E-mail: Esbinlaw@sbcglobal.net 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 Gary Lee Hewitt, secretary. HOMER CITY: Combined Plan Hearing on Thursday --------------------------------------------- Homer City Funding LLC will return to the Bankruptcy Court on Thursday, Dec. 6, at 4:00 p.m. for a combined hearing to consider approval of its prepackaged plan and disclosure statement. Homer City will also seek approval at the hearing of the guidelines it used in soliciting plan votes pre-bankruptcy. The plan was accepted pre-bankruptcy by the required majorities of $640 million in bonds. The bonds are publicly traded. An affiliate of GECC holds $103 million, or 16%, of the bonds. Objections to confirmation of the plan are due Dec. 5. The Bankruptcy Court's scheduling order provides that if the Plan is confirmed by Jan. 4, a meeting of creditors under 11 U.S.C. Sec. 341(a) will not be convened; and the Debtor will be excused from filing its schedules of assets and liabilities, and statement of financial affairs. About Homer City Funding Homer City Funding LLC, a special-purpose entity created to finance a coal-fired electric generating facility 45 miles (72 kilometers) from Pittsburgh, initiated a prepackaged Chapter 11 reorganization (Bankr. D. Del. Case No. 12-13024) on Nov. 5, 2012, to transfer ownership of the plant. The project is operated under a lease by an affiliate of power producer Edison Mission Energy. The project's owner is an entity that is 90%-controlled by an affiliate of General Electric Capital Corp. and 10% by an affiliate of MetLife Inc. Upon confirmation of the Plan, ownership will transfer to an entity controlled by GECC and MetLife. The new owner will issue new bonds in exchange for the existing bonds. Judge Kevin Gross oversees the case. Paul Noble Heath, Esq., and Zachary I Shapiro, Esq., at Richards, Layton & Finger, serve as the Debtor's counsel. Epiq Bankruptcy Solutions serves as claims agent. In its petition, Homer City estimated $500 million to $1 billion in both assets and debts. The petition was signed by Thomas M. Strauss, authorized officer. The petition listed two unsecured creditors: The Bank of New York Mellon, as trustee for the $465,976,000 in 8.734% Senior Secured Bond maturing in 2026; and BNY Mellon, as trustee for the $174,000,000 in 8.137% Senior Secured Bond maturing in 2019. BNY Mellon is represented by Glenn E. Siegel, Esq. -- glenn.siegel@dechert.com -- at Dechert LLP. GE Capital is represented by Debra A. Dandeneau, Esq,. at Weil Gotshal & Manges LLP in New York. MetLife is represented by its chief counsel of securities investments. A group of PSA bondholders is represented by George A. Davis, Esq., at Cadwalader Wickersham & Taft LLP in New York. HOMER CITY: Has Green Light to Tap Epiq as Noticing Agent --------------------------------------------------------- Homer City Funding LLC has won bankruptcy court permission to employ Epiq Bankruptcy Solutions, LLC, as the Debtor's noticing agent. By appointing Epiq as the noticing agent, the Debtor said the distribution of notices will be expedited, and the Clerk of the Court will be relieved of the administrative burden of distributing and processing such notices. The Court order provides that Epiq's undisputed fees and expenses may be paid by a third party (on the Debtor's behalf) or the Reorganized Debtor without further application to or order of the Court. Prior to the Petition Date, Epiq entered into an engagement agreement with EFS Homer City, LLC, an affiliate of GE Capital, pursuant to which Epiq agreed to provide EFSHC with certain services, including services relating to the solicitation of votes on the Debtor's plan. Because the Debtor is a "shell" company without the ability to access any funds and with no source of revenue, the cost of such services was paid by EFSHC. EFSHC provided Epiq with a $15,000 retainer, which it periodically refreshed. EFSHC retained Epiq because of Epiq's extensive experience acting as solicitation agent in prepackaged chapter 11 cases involving the solicitation of bondholders holding public debt. Prior to the commencement of the Solicitation, and as was contemplated in the Engagement Agreement, EFSHC assigned the Engagement Agreement to the Debtor pursuant to an assignment and assumption agreement. While the Engagement Agreement was assigned to the Debtor pursuant to the Assignment and Assumption Agreement, such assignment has to date been at no cost to the Debtor because EFSHC or another third party has to date paid all of Epiq's fees and costs incurred in connection with its provision of services. Because Epiq was selected by a third party to provide such services and such services have to date been provided at no cost to the Debtor, the Debtor did not solicit bids from other court-approved noticing agents in accordance with the Court's Protocol for the Employment of Claims and Noticing Agents. According to papers filed in Court last month, the Debtor said it is not seeking to retain Epiq as its claims agent (or to retain a claims agent at all) because it does not believe such retention is necessary given that (i) creditors are relieved from any obligation to file proofs of claim pursuant to Article VIII of the Plan, and (ii) the Debtor's only known creditors are the holders of Existing Bond Claims and such claims are allowed as set forth in the Plan. In addition, the Debtor will seek to retain Epiq as the voting and solicitation agent in the Chapter 11 Case by separate application. The Debtor intends to have such application heard on the date of the Combined Hearing on its prepackaged plan and disclosure statement. About Homer City Funding Homer City Funding LLC, a special-purpose entity created to finance a coal-fired electric generating facility 45 miles (72 kilometers) from Pittsburgh, initiated a prepackaged Chapter 11 reorganization (Bankr. D. Del. Case No. 12-13024) on Nov. 5, 2012, to transfer ownership of the plant. The project is operated under a lease by an affiliate of power producer Edison Mission Energy. The project's owner is an entity that is 90%-controlled by an affiliate of General Electric Capital Corp. and 10% by an affiliate of MetLife Inc. Upon confirmation of the Plan, ownership will transfer to an entity controlled by GECC and MetLife. The new owner will issue new bonds in exchange for the existing bonds. Judge Kevin Gross oversees the case. Paul Noble Heath, Esq., and Zachary I Shapiro, Esq., at Richards, Layton & Finger, serve as the Debtor's counsel. Epiq Bankruptcy Solutions serves as claims agent. In its petition, Homer City estimated $500 million to $1 billion in both assets and debts. The petition was signed by Thomas M. Strauss, authorized officer. The petition listed two unsecured creditors: The Bank of New York Mellon, as trustee for the $465,976,000 in 8.734% Senior Secured Bond maturing in 2026; and BNY Mellon, as trustee for the $174,000,000 in 8.137% Senior Secured Bond maturing in 2019. BNY Mellon is represented by Glenn E. Siegel, Esq., at Dechert LLP. GE Capital is represented by Debra A. Dandeneau, Esq,. at Weil Gotshal & Manges LLP in New York. MetLife is represented by its chief counsel of securities investments. A group of PSA bondholders is represented by George A. Davis, Esq., at Cadwalader Wickersham & Taft LLP in New York. HORNE INTERNATIONAL: Evan Auld-Susott Resigns as CEO ---------------------------------------------------- Evan Auld-Susott resigned from his position as Chief Executive Officer of Horne International, Inc. Mr. Auld-Susott will continue to serve on the Board of Directors. Mr. Darryl K. Horne will be the interim CEO. About Horne International Fairfax, Va.-based Horne International, Inc., is an engineering services company focused on provision of integrated, systems approach based solutions to the energy and environmental sectors. The Company reported a net and total comprehensive loss of $121,000 on $5.68 million of revenue for the 12 months ended Dec. 25, 2011, compared with a net and total comprehensive loss of $1.04 million on $3.43 million of revenue for the 12 months ended Dec. 26, 2010. In its audit report accompanying the 2011 financial statements, Stegman & Company, in Baltimore, Maryland, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has experienced continuing net losses for each of the last four years and as of Dec. 25, 2011, current liabilities exceeded current assets by $900,000. The Company's balance sheet at June 24, 2012, showed $1.19 million in total assets, $2.48 million in total liabilities and a $1.28 million total stockholders' deficit. HOSTESS BRANDS: Receives Final Approval to Wind Down Business ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hostess Brands Inc. received final approval from the bankruptcy judge Thursday to wind down the business. Orders formally authorizing liquidation procedures and use of cash are yet to be signed by the judge. According to the report, U.S. Bankruptcy Judge Robert Drain rebuffed objections and approved a program providing $1.83 million in bonuses to 19 senior managers, giving them reason not to leave the company before their services are no longer required. The report relates that Hostess will be eliminating $1.1 million a month in retiree benefits. To comply with requirements in bankruptcy law, Judge Drain called for the appointment of an official retirees' committee to represent former workers on issues involving benefits. A financial adviser told the judge how 110 different potential buyers expressed interest in purchasing assets. Hostess will later file separate motions for approval of significant asset sales. The bakery workers' union filed papers to be considered later by Judge Drain seeking appointment of a Chapter 11 trustee to take over the liquidation. 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. DHostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. 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). In the new Chapter 11 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. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November 2012 opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process is expected to be completed in one year. HUDSON PRODUCTS: S&P Affirms 'B-' Corporate Credit Rating --------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on Hudson Products Holdings Inc. The outlook is stable. "At the same time, we assigned Hudson's $190 million first lien term loan our 'B-' issue-level rating, with a recovery rating of '3', indicating our expectations for meaningful recovery (50% to 70%) in the event of a default," S&P said. "The ratings on Hudson Products Holdings Inc. reflect Standard & Poor's assessment of the company's 'vulnerable' business risk and 'highly leveraged' financial risk," said Standard & Poor's credit analyst Stephen Scovotti. "The ratings incorporate the company's exposure to cyclical and competitive end markets, limited scale of operations, and its relatively small size. The ratings also reflect Hudson's improved capital structure and its 'adequate' liquidity." "We view Hudson's business risk as 'vulnerable', Although Hudson maintains a leading market position as a manufacturer of axial- flow fans and air-cooled heat exchangers, its markets are somewhat focused and the company can face considerable pricing pressures in some of its business lines. A key driver for the credit is its ACHE business which represented approximately half of last-12- month (LTM) revenue as of Sept. 30, 2012," S&P said. The company's fan business and its aftermarket products and sales (which consist of both ACHE and fans) provide some cash flow stability and represent approximately half of LTM revenue. "While the company's fan business and aftermarket business provide some stability, the company's ACHE business tends to be very volatile. Approximately half of ACHE sales will be derived from the volatile refining industry in 2012. In addition, in 2010 and 2011, the company's ACHE business was very weak due to weak conditions in the very volatile, North American refining, petrochemical and power infrastructure industries. As a result of minimal backlog and limited visibility during the down turn, ACHE pricing weakened significantly. In addition, the company struggled trying to expand market share internationally. Specifically, the company faced increased competition from Korean ACHE manufacturers in the Middle East markets. As a result, Hudson's ACHE business did not contribute significantly to EBITDA generation from 2010- 2011. However, the company expects its end market mix to change over time as liquefied natural gas (LNG) gas compression and oil sands end markets become an increasingly larger portion of the company's sales," S&P said. "Indeed, in 2012, the company has seen improvement in its North American ACHE business due to healthy activity in LNG, oil sands and gas production end markets. The more favorable supply and demand balance in North America has resulted in better pricing on projects. We believe that the company's ACHE business will continue to perform slightly better in 2013 due to growth in end markets including oil sands and LNG. As of Sept. 30, 2012, the company's backlog was $130 million, up from $95 million at year end 2011. Still, given Hudson's small scale and focused product lines, Hudson remains exposed to competition from lower cost manufacturing regions, especially in international markets and cyclical and volatile end markets," S&P said. "The stable outlook reflects our expectation that Hudson's credit metrics will improve over the coming year, while maintaining adequate liquidity. We could revise the outlook to negative if liquidity weakens to below $10 million. A positive rating action is currently unlikely given our assessment of the company's business profile. However, we would consider a positive rating action if the company considerably improves the size, scale and scope of its operations while maintaining debt leverage below 6.0x," S&P said. HUNTER FAN: Moody's Rates $142MM First Lien Credit Facility 'B1' ---------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Hunter Fan Company's proposed $142 million senior secured first lien credit facility due 2018, consisting of a $25 million revolving credit facility and a $117 million term loan. At the same time, Moody's affirmed the company's corporate family and probability of default ratings at B3. The outlook remains stable. Net proceeds from the proposed $117 million first lien term loan and $63 million second lien term loan (not rated by Moody's) will be used to repay substantially all of Hunter's existing outstanding indebtedness, fund a one-time distribution of approximately $25 million to the company's shareholders and pay fees and expenses. The rating affirmation and stable outlook reflect Hunter's credible market position, solid operating margins and Moody's expectations of moderate earnings growth. According to Moody's analyst Mariko Semetko, "the proposed refinancing and dividend recapitalization will result in higher pro forma leverage and limited free cash flow for debt repayment because of a higher interest burden." However, continued cost reduction initiatives and signs of stability in the housing market should result in a gradual improvement in financial metrics over the near term. The ratings are subject to the receipt and review of final documentation upon closing of the proposed refinancing transaction. Ratings assigned: - Proposed $25 million senior secured first lien revolver due 2018 at B1 (LGD2, 29%) - Proposed $117 million senior secured first lien term loan due 2018 at B1 (LGD2, 29%) Ratings affirmed: - Corporate Family Rating at B3 - Probability of Default Rating at B3 Following ratings will be withdrawn upon closing of transaction: - $25 million senior secured first lien revolving credit facility due 2014 at B1 (LGD2, 29%) - $99 million senior secured first lien term loan due 2014 at B1 (LGD2, 29%) - $60 million senior secured second lien term loan due 2014 at Caa1 (LGD5, 76%) Ratings Rationale Hunter's B3 corporate family rating is constrained by its modest scale, high financial leverage, narrow product focus, and heavy product and customer concentration. Pro forma for the proposed dividend recap as of July 31, 2012, debt/EBITDA will likely exceed 6.0 times while EBITA/interest expense will remain above 1.5 times (incorporating Moody's analytical adjustments). The rating assumes Hunter's high pro forma leverage will migrate towards 5.5 times in the next twelve to eighteen months as a result of earnings growth driven predominantly by cost reductions combined with Moody's expectation of gradual economic expansion in the US. Positive rating consideration is given to the company's well recognized brand names, its credible market position, and its demonstrated ability to maintain solid margins through aggressive cost efficiencies. In addition, Moody's expects the company will maintain at least adequate liquidity in the next twelve months, supported by expectations of modestly positive free cash flow, comfortable room under financial covenants and availability under the proposed revolving credit facility. The stable outlook reflects Moody's expectation that Hunter will achieve moderate earnings and credit metric improvements while maintaining adequate liquidity. An upgrade would require an increase in scale, material credit metric improvements, and more robust liquidity. Quantitatively, the ratings could be upgraded if debt/EBITDA is sustained below 5.0 times and EBITA/interest expense is maintained above 2.0 times. The ratings or rating outlook could be negatively impacted if operating performance were to deteriorate in a way that caused debt protection metrics to weaken materially. Specifically, ratings could be downgraded if debt/EBITDA is sustained at or above 6.5 times or EBITA/interest expense approaches 1.0 times. Further, any deterioration in liquidity may result in a downgrade. The principal methodology used in rating Hunter Fan Company was the Global Consumer Durables Industry Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Memphis, Tennessee, Hunter Fan Company designs, engineers, sources and markets ceiling fans and home comfort appliances primarily under the "Hunter" and "Casablanca" brands. Revenues for the twelve months ended July 31, 2012 were $237 million. The company is owned by private equity firm, MidOcean Partners. HUNTER FAN: S&P Affirms 'B-' Corp. Credit Rating; Outlook Positive ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Hunter Fan Co., including its corporate credit rating at 'B-'. The outlook is positive. The affirmation follows Hunter's announcement that it will refinance its existing term loan and revolver, and pay a dividend to shareholders. "At the same time, we assigned our 'B' issue-level rating to Hunter's proposed $117 million first-lien term loan and $25 million revolving credit facility, both due 2018. The recovery rating is '2', indicating our expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. The new issue-level rating for the proposed term loan is subject to a review of final documentation by Standard & Poor's," S&P said. "We understand that Hunter will use the net proceeds from the debt offering to repay the existing balances on its $160 million term loan B due 2014, $60 million second-lien term loan due 2014, and $34 million revolving credit facility due 2013. In addition, the company will also use the net proceeds to pay a $25 million dividend to shareholders, including majority shareholder MidOcean Partners. We will withdraw the issue-level ratings on the company's existing senior term loans and revolver upon completion of this transaction and after the existing balances have been repaid. The proposed senior secured facilities also include an unrated $63 million second-lien term loan due 2019," S&P said. "The rating action reflects our belief that Hunter Fan will increase its earnings from the strengthening of the U.S. housing market and will be able to maintain 'adequate' liquidity under our criteria," said Standard & Poor's credit analyst Stephanie Harter. "Furthermore, we expect the company to improve its credit metrics through a combination of debt repayment and higher EBITDA over the next 12 months." "The positive outlook reflects our expectation that the company will maintain adequate liquidity and will continue to reduce leverage over the next 12 months. We could consider an upgrade if Hunter sustains operating performance at improved levels and applies excess cash flow toward debt reduction, resulting in leverage closer to the lower end of the indicative ratio for a highly leveraged financial risk profile of 5.5x before fiscal year end 2013. We estimate Hunter could achieve these metrics in a scenario of low-single-digit revenue growth and adjusted EBITDA margin slightly greater than current levels," S&P said. "We could consider revising the outlook to stable if the company's operating performance deteriorates significantly, or its financial policies become more aggressive, causing covenant cushion on the proposed term loan to fall below 10%. We estimate this could occur if EBITDA were to decline by 24%, assuming constant pro forma debt levels," S&P said. IAP WORLDWIDE: S&P Lowers CCR to 'SD' on Debt Restructuring ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Cape Canaveral, Fla.-based IAP Worldwide Services Inc. (IAP), including the corporate credit rating to 'SD' from 'CCC'. "We also lowered our first-lien senior secured issue ratings to 'D' from 'CCC' and second-lien senior secured issue ratings to 'D' from 'CC'. We subsequently withdrew our issue ratings," S&P said. "The rating actions reflect our view that the amendment and extension of the credit facilities are a de facto restructuring and, thus, are tantamount to a default according to our criteria," said Standard & Poor's credit analyst Dan Picciotto. "Although IAP debtholders were offered an increase in the interest rates on the new debt, we believe the increase in pricing did not adequately compensate lenders for the extension of maturities, which, under our criteria, resulted in lenders receiving less value than the promise of the original securities. We believe that lenders accepted IAP's offer largely because of the perceived risk that the issuer may not otherwise fulfill its original obligations. We view this exchange as distressed rather than opportunistic." "If we receive adequate information, we expect to reassess our corporate credit rating on IAP over the next few weeks. It is our preliminary expectation that the corporate credit rating will likely be in the 'CCC' category but could possibly be as high as 'B-'. Alternatively, we would withdraw the corporate credit rating if we do not receive adequate information," S&P said. "Although the transaction was not a deleveraging event, the post- exchange capital structure alleviates IAP's near-term debt maturities as the first-lien credit facility was due to expire at the end of this year. However, we still consider IAP's financial risk profile to be 'highly leveraged.' Despite the recent refinancing, we assess the company's liquidity as 'less than adequate' under our criteria because of potentially tight covenant headroom and our view that the company does not have the capacity to absorb low probability adversities," S&P said. "The ratings on IAP also reflect our revised view of the company's business risk profile as 'vulnerable' instead of 'weak.' The business is marked by revenue concentration from large contracts and the less-predictable nature of contingency operations. We believe potential cuts in federal defense spending, given current deficit-reduction efforts, present risks to demand for IAP's services over time. Although the company has a good rebid record on contracts and low fixed capital requirements, we believe its EBITDA margin will remain thin at less than 10%. We believe the company's margins are consistent with a highly competitive market for its services. In addition, we score IAP's management and governance as 'weak,' mainly because of our negative view on the company's controlling ownership, which we believe has engaged in very aggressive financial policy since 2005 that promotes the owners interests above those of other stakeholders," S&P said. INOVA TECHNOLOGY: Another Amendment to 375MM Shares Prospectus -------------------------------------------------------------- Inova Technology, Inc., filed with the U.S. Securities and Exchange Commission Amendment No.6 to the Form S-1 registration statement relating to the offering of up to 375,000,000 shares of common stock of Inova in a self-underwritten direct public offering, without any participation by underwriters or broker- dealers. The shares will be sold through the efforts of the Company's officers and directors. The offering period will begin on the date this registration statement is declared effective by the Securities and Exchange Commission and continue, unless earlier terminated due to it being fully subscribed, until 5:00 P.M. Local Time, on xxxx, 2013. There is no minimum number of shares to be sold under this offering. The Company's common stock is quoted on the OTCQB by the OTC Markets Group under the symbol "INVA". On Nov. 6, 2012, the last reported sale price for the Company's common stock was $0.01 per share. A copy of the amended prospectus is available for free at: http://is.gd/ldD3Kh About Inova Technology Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA) -- http://www.inovatechnology.com/-- through its subsidiaries, provides information technology (IT) consulting services in the United States. It also manufactures radio frequency identification (RFID) equipment; and provides computer network solutions. The company was formerly known as Edgetech Services Inc. and changed its name to Inova Technology, Inc., in 2007. The Company reported a net loss of $1.24 million for the year ended April 30, 2012, compared with a net loss of $3.35 million during the prior year. The Company's balance sheet at July 31, 2012, showed $7.65 million in total assets, $18.83 million in total liabilities and a $11.18 million total stockholders' deficit. Going Concern The Company has an accumulated deficit and negative working capital and is in default on the majority of its notes payable as of July 31, 2012. These conditions raise substantial doubt as to the Company's ability to continue as a going concern. "Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing as may be required, and ultimately to attain profitable operations," the Company said in its quarterly report for the period ended July 31, 2012. "However, there is no assurance that profitable operations or sufficient cash flows will occur in the future." MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that Inova incurred losses from operations for the years ended April 30, 2012, and 2011 and has a working capital deficit as of April 30, 2012, which raise substantial doubt about Inova's ability to continue as a going concern. JAMES EATON: Dist. Court Affirms Ch. 7 Trustee's Accord With Bank ----------------------------------------------------------------- District Judge Todd J. Campbell in Nashville, Tenn., declined the request of James K. Eaton Sr. for an order overturning bankruptcy court approval of a May 2012 compromise and settlement between the Chapter 7 trustee of Mr. Eaton's estate, and his lender, Citizens Tri-County Bank. The lender had filed an adversary complaint seeking an exception from discharge for an alleged debt owed by the Debtor. The District Judge held that the Bankruptcy Court's findings as to the Compromise and Settlement are supported by the record and do not constitute an abuse of discretion. A copy of the District Court's Nov. 28, 2012 Memorandum is available at http://is.gd/qYLzuufrom Leagle.com. James K. Eaton Sr. filed a voluntary Chapter 11 petition (Bankr. M.D. Tenn. Case No. 10-09709) on Sept. 20, 2010. E. Covington Johnston, Esq., at Johnston & Street, represents the Debtor. In his petition, Mr. Eaton estimated $1 million to $10 million in both assets and debts. The case was converted to one under Chapter 7, and a trustee was appointed. KAK LLC: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: KAK LLC 427 N. Columbia Street Covington, LA 70433 Bankruptcy Case No.: 12-13490 Chapter 11 Petition Date: November 26, 2012 Court: U.S. Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: Matthew L. Pepper, Esq. WONDERLY AND PEPPER 25211 Grogans Mill Road, Suite 450 The Woodlands, TX 77380 Tel: (281) 367-2266 Fax: (218) 292-6072 E-mail: pepperlaw@msn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Adam A. Ackel, manager. KNIGHT CAPITAL: GETCO Offers to Buy Knight at $3.50 Per Share ------------------------------------------------------------- GETCO Holding Company, LLC, proposes to buy Knight Capital Group, Inc., in a transaction that values Knight's common shares at a price of $3.50 per share, a 41% premium to the closing price on Nov. 23, 2012. The Merger would involve a two-step process that is designed to provide maximum flexibility for Knight's shareholders. The first step would be reorganization of Knight as a holding company with GETCO shareholders receiving 242 million newly issued shares of Knight and warrants to purchase Knight common stock. The second step would be an issuer tender offer for up to 154 million shares of Knight at a cash price of $3.50 per share. In a letter to Knight's Board of Directors, Daniel Coleman, chief executive officer of GETCO, said, "We believe this Merger offers Knight's shareholders a clear path to reaping the benefits of this unique opportunity, and would be very attractive to both our shareholder bases. In addition, by structuring the transaction with both cash and equity components, Knight shareholders are able to realize an immediate return on investment, as well as preserve the opportunity to participate in the future growth of the combined company." After completion of the Merger, assuming full participation in the tender offer, no shareholder would individually own more than 20% of the combined company and most large shareholders would be under 10% ownership. GETCO has lined up $950 million of fully-committed financing from a large financial institution. Under the proposal, Mr. Coleman will serve as CEO and a Board member of the combined company and Tom Joyce will be non-executive Chairman of the Board. In addition, the Board will include four directors nominated by former GETCO shareholders and three directors currently serving on the Knight Board of Directors. GETCO expects to enter into a definitive agreement by no later than Dec. 3, 2012. GETCO beneficially owns 56,875,362 shares of Class A common stock of Knight representing 23.8% of the shares outstanding as Nov. 28, 2012. About Knight Capital Knight Capital Group (NYSE Euronext: KCG) -- http://www.knight.com/-- is a global financial services firm that provides access to the capital markets across multiple asset classes to a broad network of clients, including broker-dealers, institutions and corporations. Knight is headquartered in Jersey City, N.J. with a global presence across the Americas, Europe, and the Asia Pacific regions. At the start of trading on Aug. 1, Knight Capital installed a trading software to push itself onto a new trading platform that the New York Stock Exchange opened that day. But when Knight's new system went live, the firm "experienced a human error and/or a technology malfunction related to its installation of trading software." The error caused Knight to place unauthorized offers to buy and sell shares of big American companies, driving up the volume of trading and causing a stir among traders and exchanges. The orders affected the shares of 148 companies, including Ford Motor, RadioShack and American Airlines, sending the markets into upheaval. Knight had to sell the stocks that it accidentally bought, prompting a $440 million pre-tax loss, the firm announced Aug. 2. Knight Capital averted collapse after announcing Aug. 6 that it has arranged $400 million in equity financing with Wall Street firms including Jefferies Group, Inc., which conceived and structured the investment, as well as Blackstone, GETCO LLC, Stephens, Stifel Financial Corp. and TD Ameritrade Holding Corporation. Knight has said that the software that led to the Aug. 1 trading issue has been removed from the company's systems. The New York Stock Exchange nonetheless said Aug. 7 said it "temporarily" reassigned the firm's market-making responsibilities for more than 600 securities to Getco, the high-speed trading firm that also invested in Knight. "This event severely impacted the Company's capital base and business operations, and the Company experienced reduced order flow, liquidity pressures and harm to customer and counterparty confidence," the Company said in its quarterly report for the period ended June 30, 2012. "As a result, there was substantial doubt about the Company's ability to continue as a going concern." Following the event of Aug. 1, 2012, the Company has begun an internal review into such event and associated controls. Knight Capital's balance sheet at Sept. 30, 2012, showed $8.58 billion in total assets, $7.10 billion in total liabilities, $259.27 million in convertible preferred stock, and $1.21 billion in total equity. LAURA DAWN: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Laura Dawn Apartments, LLC 300 "B" Street Turlock, CA 95380 Bankruptcy Case No.: 12-93003 Chapter 11 Petition Date: November 26, 2012 Court: U.S. Bankruptcy Court Eastern District of California (Modesto) Judge: Ronald H. Sargis 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 Company did not file a list of creditors together with its petition. The petition was signed by Joe Wu, managing member. LEHMAN BROTHERS: Bingham McCutchen Reduces Fees to $22.6-Mil. ------------------------------------------------------------- Bingham McCutchen LLP revised its final fee application, which covers the period September 15, 2008 to March 6, 2012. In the revised application, the firm asked to reduce the amount of fees from $23,211,984 to $22,551,938, and to increase the amount of reimbursement sought for work-related expenses from $1,552,282 to $1,663,541. Another bankruptcy professional, FTI Consulting Inc., filed an application for interim allowance of $670,272 in fees and reimbursement of $14,230 in work-related expenses incurred during the period August 1 to October 31, 2012. Quinn, Fee Committee Ink Deal Quinn Emanuel Urquhart & Sullivan LLP inked a deal with the fee committee, under which they agreed for entry of a court order approving its request for interim allowance of $8,028,311 in fees and reimbursement of $449,854 in expenses incurred during the period October 1, 2011 to March 5, 2012. Meanwhile, the fee committee filed its second summary report recommending court approval for $926,778,926 in fees and $30,178,542 in expenses as requested in the final fee applications of Lehman professionals. The second summary report is available without charge at http://is.gd/fmcoaj Milbank Asks Court to Overrule Kuntz Objection Milbank Tweed Hadley & McCloy LLP, legal counsel to the committee representing Lehman's unsecured creditors, asked the bankruptcy court to overrule the objection filed by William Kuntz III. Mr. Kuntz filed last month an objection to Milbank's final fee application, seeking a reduction in its fees due to a purported undisclosed "conflict" resulting from the participation of U.S. Bank N.A. in the committee. In a court filing, Milbank argued that Mr. Kuntz lacks standing to lodge an objection to the fee application. "Mr. Kuntz's claims were expunged by this court more than two years ago and that, consequently, Mr. Kuntz is no longer a creditor," Milbank said. A court hearing was scheduled for November 29. 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) LEHMAN BROTHERS: Broker Settles Claim With German Liquidator ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for Lehman Brothers Inc., the brokerage subsidiary of Lehman Brothers Holdings Inc., settled the $1.35 billion in claims lodged by the liquidator for the German affiliate Lehman Brothers Bankhaus AG. According to the report, the German liquidator will have an approved unsecured claim in the Lehman brokerage liquidation for $600 million representing a 55% reduction. In turn, James Giddens, the Lehman brokerage trustee, will waive a $105,000 claim against the German affiliate. The settlement will come to bankruptcy court for approval on Jan. 16. Mr. Giddens, the Bloomberg report notes, has said the remaining customers are near the receipt of 100% payment as the result of settlements with affiliates, including the U.K. liquidators for European affiliates and liquidators for the Swiss affiliate. 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) LIFE TABERNACLE-CULLEN: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Life Tabernacle-Cullen, Inc. 6701 Cullen Boulevard Houston, TX 77021 Bankruptcy Case No.: 12-38680 Chapter 11 Petition Date: November 26, 2012 Court: U.S. Bankruptcy Court Southern District of Texas (Houston) Judge: Letitia Z. Paul Debtor's Counsel: Thomas Baker Greene, III, Esq. LAW OFFICE OF THOMAS B. GREENE III 2311 Steel Street Houston, TX 77098 Tel: (713) 882-2312 E-mail: tbgreeneiii@msn.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Richard S. Rose, II, president. LINN ENERGY: S&P Affirms 'B' Rating on Unsecured Debt; Off Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' issue rating (one notch below the corporate credit rating) on Linn Energy LLC's senior unsecured debt and removed the rating from CreditWatch with negative implications. "The recovery rating on the senior unsecured debt is '5', indicating our expectation that lenders would receive modest (10% to 30%) recovery in the event of a payment default. We took these ratings off CreditWatch following a review of the recovery prospects of Linn's unsecured debt using the PV-10 value of its proved reserves, including all year-to-date acquisitions, based on our revised recovery price assumptions of $50 per barrel West Texas Intermediate (WTI) crude oil and $3.50 per mmBtu natural gas," S&P said. The ratings on Linn Energy LLC reflect the company's "fair" business risk and "aggressive" financial risk profiles. These assessments reflect Linn's growing midsize reserve base, elevated financial leverage, and substantial quarterly distributions to unitholders. Also, impacting ratings are the low geological risk inherent in the company's reserve base, a balanced production mix between natural gas and liquids, and substantial commodity price hedges to minimize cash flow volatility. RATINGS LIST Linn Energy LLC Corporate credit rating B+/Stable/-- Ratings Off CreditWatch Linn Energy LLC Linn Energy Finance Corp. To From Senior Unsecured B B/Watch Neg Recovery rating 5 5 LOCATION BASED TECH: Incurs $8.7 Million Net Loss in Fiscal 2012 ---------------------------------------------------------------- Location Based Technologies, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $8.69 million on $597,051 of total net revenue for the year ended Aug. 31, 2012, compared with a net loss of $8.22 million on $16,969 of total net revenue during the prior fiscal year. Location Based's balance sheet at Aug. 31, 2012, showed $5.52 million in total assets, $5.75 million in total liabilities, $430,700 in commitments and contingencies and a $661,566 total stockholders' deficit. Comiskey & Company, the Company's independent registered public accounting firm, included an explanatory paragraph in its report on the Company's financial statements for the fiscal year ended Aug. 31, 2012, which expresses substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring losses since inception and has an accumulated deficit in excess of $45,000,000. There is minimal sales history for the Company's products, which are new to the marketplace. Bankruptcy Warning The Company remains obligated under a significant amount of notes payable, and Silicon Valley Bank has been granted security interests in its assets. "If we are unable to pay these or other obligations, the creditors could take action to enforce their rights, including foreclosing on their security interests, and we could be forced into liquidation and dissolution. We are also delinquent on a number of our accounts payable. Our creditors may be able to force us into involuntary bankruptcy." A copy of the Form 10-K is available for free at: http://is.gd/oIViDF About Location Based Technologies Irvine, Calif.-based Location Based Technologies, Inc., designs, develops, and sells leading-edge personal locator devices and services. LOCATION BASED TECH: Taps Omni View to Raise $11-Mil. Financing --------------------------------------------------------------- Location Based Technologies, Inc., has retained the services of Omni View Capital Advisors. The term of Omni View's employment will be one year which may be renewed for an additional year at the Company's discretion. Omni View will act as the Company's exclusive advisor concerning matters pertaining to the Company's efforts to raise $1 million in bridge convertible debt financing and up to $10 million in additional equity financing thereafter. Omni View agrees to invest and cause its affiliates to invest by Jan. 15, 2013, at least an aggregate of $1 million. In connection with the capital raises, Omni View will assist the Company in: (i) capital and transaction structuring, including necessary recapitalizations of the Company by preferred stock authorization and issuances or stock splits or otherwise; (ii) development of capital markets strategy; (iii) valuation analysis; (iv) company, market and industry research; (v) analysis of various exchange listing requirements and assistance in uplisting to a national securities exchange; (vi) assistance in selection of Board of Director candidates; (vii) assistance in client acquisition and business development; and (viii) transaction negotiation and execution. Omni View will receive 4.9% of the outstanding shares of the Company's common stock on a fully diluted basis upon (i) closing of capital raising transactions which in the aggregate generate at least $5 million in gross proceeds to the Company and (ii) completion of an uplisting of the Company's common stock to a national securities exchange. The Company also agrees to promptly reimburse Omni View for all out-of-pocket expenses incurred by Omni View in providing the Advisory Services upon presentation by Omni View to the Company of reasonable documentation thereof; provided, that the Company must pre-approve any expense over $10,000 and will not be obligated to reimburse Omni View for out-of-pocket expenses to the extent that those expenses exceed $100,000 in the aggregate. About Location Based Technologies Irvine, Calif.-based Location Based Technologies, Inc., designs, develops, and sells leading-edge personal locator devices and services. Location Based incurred a net loss of $8.69 million for the year ended Aug. 31, 2012, compared with a net loss of $8.22 million during the prior fiscal year. Location Based's balance sheet at Aug. 31, 2012, showed $5.52 million in total assets, $5.75 million in total liabilities, $430,700 in commitments and contingencies and a $661,566 total stockholders' deficit. Comiskey & Company, the Company's independent registered public accounting firm, included an explanatory paragraph in its report on the Company's financial statements for the fiscal year ended Aug. 31, 2012, which expresses substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring losses since inception and has an accumulated deficit in excess of $45,000,000. There is minimal sales history for the Company's products, which are new to the marketplace. Bankruptcy Warning The Company remains obligated under a significant amount of notes payable, and Silicon Valley Bank has been granted security interests in its assets. "If we are unable to pay these or other obligations, the creditors could take action to enforce their rights, including foreclosing on their security interests, and we could be forced into liquidation and dissolution. We are also delinquent on a number of our accounts payable. Our creditors may be able to force us into involuntary bankruptcy." LODGENET INTERACTIVE: OKs $2-Mil. Key Employee Incentive Plan ------------------------------------------------------------- The Compensation Committee of the Board of Directors of LodgeNet Interactive Corporation approved a key employee incentive plan that covers seven of the Company's executives and a key employee retention plan covering 44 additional Company employees identified by management as critical. To earn any incentive bonus payment, a Covered Executive must maintain his employment with the Company through the earlier of the closing of a Transaction or July 31, 2013. For this purpose, a "Transaction" will only occur if the Company files under chapter 11 of the Bankruptcy Code and one of the following occurs: (i) a sale of all or substantially all of the assets or a majority of the outstanding stock of the Company in one or more transactions under section 363 of the Bankruptcy Code or pursuant to a confirmed chapter 11 plan; (ii) the conversion of the Company's chapter 11 case to a case under chapter 7 of the Bankruptcy Code; or (iii) a restructuring of the Company's balance sheet pursuant to a confirmed chapter 11 plan. The Covered Executives include Richard L. Battista, the Company's principal executive officer, Frank P. Elsenbast, the Company's principal financial officer, and its other named executive officers, James G. Naro and Derek R. White. The other Covered Executives include key members of the Company's management team. Subject to the achievement of certain performance targets, each Covered Executive will receive a total incentive bonus payment equal to approximately 35-50% of his respective salary, provided that if the performance target is exceeded or missed, the actual incentive bonus payment received will likewise be a greater or lesser percentage of base salary. One-third of the incentive bonus payment is payable upon the Covered Executive's entry into a letter agreement, which is expected to occur in early December, confirming his acceptance of the terms of the Employee Incentive Plan. The total amount of these initial payments is expected to be approximately $365,200. The remaining two-thirds of the incentive bonus payment is subject to the Company meeting its cumulative EBITDA target through the Vesting Date. The total amount of these Additional Payments is expected to be approximately $730,400; however, the additional payments will be adjusted 2% for every 1% over or under the EBITDA target. No Additional Payment will be made if the Company does not achieve at least 85% of the EBITDA target and the Additional Payment is capped at a maximum of 125% of the EBITDA target, which results in a maximum 150% payout, or approximately $1,096,000. Under the employee retention plan, the applicable employees will each receive a retention bonus equal to 20%-25% of their respective salaries. The employee must remain employed with the Company through the Vesting Date to earn the bonus, unless the employee's employment is terminated without cause or he or she resigns for good reason. The aggregate payments under this key employee retention plan are expected to be approximately $1.4 million. About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $291.74 million in total assets, $448.72 million in total liabilities and a $156.98 million total stockholders' deficiency. Going Concern/Bankruptcy Warning "The decline in revenue during the third quarter of 2012 and the payment terms of our vendor forbearance agreements created liquidity constraints on our operations and related financial results. These liquidity constraints and our non-compliance with certain of our debt covenants have resulted in there being substantial doubt about our ability to continue as a going concern," the Company said in its quarterly report for the period ended Sept. 30, 2012. Historically, the Company followed a practice of reducing outstanding debt under its Credit Facility by making prepayments on its debt. These additional debt payments contributed to the Company's historical debt covenant compliance. However, during 2012, the Company's practice of making additional debt payments was achieved in part by delaying certain payments to its vendors, including major vendors such as DirecTV and HBO. During the third quarter of 2012, each of these vendors required the Company to enter into payment plans. In order to maintain continued service from these two vendors, the Company entered into forbearance agreements with each of them, which require payments to both vendors between September and December 2012. According to the agreements, the Company's next payments of $10.0 million and $4.0 million to DirecTV and HBO, respectively, would have been due on Nov. 15, 2012. The Company did not expect to have the necessary liquidity to make those payments and maintain its operations. Consequently, the Company has negotiated a revision to its forbearance agreement with DirecTV, whereby the Company's November payment has been deferred to Dec. 17, 2012, at which time the Company will be obligated to pay them $20 million. The Company has also negotiated a revision to its forbearance agreement with HBO, whereby the Company will make a current payment of $1.5 million to them, representing a partial payment of the Company's November obligation, defer the balance to December and owe them a payment of $6 million on Dec. 17, 2012. The Company has obtained the consent of the requisite lenders to revise those forbearance agreements. "If we are unable to obtain sufficient liquidity to make such payments, which is likely, or such payments are not further deferred, we would be forced to file under Chapter 11 of the U.S. Bankruptcy Code in December. The Company is in active negotiations with its lenders and a potential investor in an effort to structure an orderly bankruptcy process." * * * As reported by the TCR on Aug. 7, 2012, Moody's Investors Services downgraded LodgeNet Interactive's Corporate Family Rating to 'Caa1' from 'B3' and changed the Probability of Default Rating (PDR) to 'Caa2' from 'Caa1'. The reason for the downgrade is due to poor first and second quarter financial results and Moody's expectations that they will not improve in the near term. In the Aug. 7, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on U.S. in-room entertainment and data services provider LodgeNet Interactive Corp. to 'CCC' from 'B-'. "The downgrade reflects LodgeNet's weak second-quarter operating performance resulting from a sharp reduction in its room base, which we expect will continue over the near term," said Standard & Poor's credit analyst Hal Diamond. LODGENET INTERACTIVE: In Active Talks for Bankruptcy ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that LodgeNet Interactive Corp. said in a regulatory filing that it's in "active negotiations" with lenders "and a potential investor in an effort to structure an orderly bankruptcy process." According to the report, the company violated a covenant in its bank loan and has a forbearance agreement good until Dec. 17. LodgeNet's balance sheet was upside down as of Sept. 30 with assets of $291.7 million and liabilities totaling $448.8 million. For the first three quarters of the year, there was a $105.7 million net loss on revenue of $278.7 million. The loss included a $92.6 million asset-impairment charge. The Sioux Falls, South Dakota-based company declined 1.5 cents to 20 cents Thursday in Nasdaq Stock Market trading. The shares topped $36 in mid-2007. About LodgeNet Interactive Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq:LNET), formerly LodgeNet Entertainment Corp. -- http://www.lodgenet.com/-- provides media and connectivity solutions designed to meet the unique needs of hospitality, healthcare and other guest-based businesses. LodgeNet Interactive serves more than 1.9 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television Solutions, Broadband Internet Solutions, Content Solutions, Professional Solutions and Advertising Media Solutions. LodgeNet Interactive Corporation owns and operates businesses under the industry leading brands: LodgeNet, LodgeNetRX, and The Hotel Networks. * * * As reported by the TCR on Aug. 7, 2012, Moody's Investors Services downgraded LodgeNet Interactive's Corporate Family Rating to 'Caa1' from 'B3' and changed the Probability of Default Rating (PDR) to 'Caa2' from 'Caa1'. The reason for the downgrade is due to poor first and second quarter financial results and Moody's expectations that they will not improve in the near term. In the Aug. 7, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on U.S. in-room entertainment and data services provider LodgeNet Interactive Corp. to 'CCC' from 'B-'. "The downgrade reflects LodgeNet's weak second-quarter operating performance resulting from a sharp reduction in its room base, which we expect will continue over the near term," said Standard & Poor's credit analyst Hal Diamond. LODGENET INTERACTIVE: S&P Cuts CCR to 'CC' on Restructuring ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on LodgeNet Interactive Corp. to 'CC' from 'CCC'. The rating outlook is negative. "The downgrade follows the company's disclosure that it is negotiating with its lenders and third parties regarding restructuring options, which may include a filing under Chapter 11," said Standard & Poor's credit analyst Hal Diamond. "As of Sept. 30, 2012, the company was in violation of the 4.0x net leverage covenant in its credit facility. The company entered a forbearance agreement in October 2012 in which lenders agreed not to exercise their default-related rights and remedies through Dec. 17, 2012. The company has classified its debt due April 2014 as current on its balance sheet, as lenders could require payment of amounts outstanding on Dec. 17, 2012. These liquidity constraints and the covenant breach have resulted in substantial doubt about the company's ability to continue as a going concern," S&P said. "The negative outlook reflects our view that the company will likely default over the near term due to strained liquidity and an unfavorable operating outlook. We regard a near-term revision of the outlook to stable or upgrade as remote scenarios that would require improvement in operating performance and restoration of a healthy margin of compliance with financial covenants, none of which appears probable," S&P said. LLOYD E. MITCHELL: Has Approval to Implement Accord With Insurers ----------------------------------------------------------------- Bankruptcy Judge Nancy V. Alquist lifted the automatic stay in the asbestos-related Chapter 11 case of Lloyd E. Mitchell, Inc., to permit the implementation of a settlement agreement reached earlier in the case. Lloyd E. Mitchell, Inc. is a Maryland corporation that formerly operated a mechanical contracting business in the Baltimore metropolitan area. Since it ceased operations in 1976 and liquidated its operating assets, it has been primarily consumed by defending against asbestos-related personal injury claims and dealing with insurance coverage issues. The extent to which insurance policies written by Maryland Casualty Company provide coverage for asbestos claims is the subject of litigation in the Circuit Court for Harford County, Maryland. Additional parties have joined in the Harford County Litigation to preserve and protect their rights, including a putative class of asbestos personal injury claimants, as well as additional insurers. The Harford County Litigation presided over by the Honorable William O. Carr, is in some state of being certified as a class action lawsuit. The settling parties are Maryland Casualty Company; The Travelers Indemnity Company; the Debtor; and the Law Offices of Peter G. Angelos, P.C. on behalf of certain clients with asbestos-related claims. The settlement agreement would resolve more than 9,000 outstanding Asbestos Claims against the Debtor. The Settlement Agreement would also resolve Maryland Casualty's outstanding claims against the Debtor for reimbursement and breach of an earlier settlement agreement between the parties. In addition, the Settlement Agreement would resolve a number of other matters that are pending in the bankruptcy case including the (1) Joint Motion of Debtor and Official Committee of Unsecured Creditors to Dismiss Chapter 11 Case, (2) the Cross Motion to Appoint Trustee filed by Maryland Casualty, and (3) the Insurers' Joint Liquidating Plan. The Settling Parties previously sought relief from the bankruptcy stay (1) to submit the Settlement Agreement for Approval to the Circuit Court for Baltimore City for a determination if the amounts proposed to be paid to the settling claimants are fair and reasonable, (2) if approval was obtained from the Baltimore City Court, for leave to go to Judge Carr to request permission to dismiss the claims they have against each other in the Harford County Litigation, including the claims for coverage by the settling asbestos claimants, and (3) to pay the claims being settled. The Court lifted the stay to permit the parties to seek the approval of Judge Carr in the Harford County Litigation as to the fairness and appropriateness of the Settlement Agreement, and also to seek the approval of the Circuit Court of Baltimore City of the terms of the payment of the individual claims. The Court did not authorize any claims to be paid at that time. Subsequently, the parties obtained an order approving the settlement terms from each of the two state courts. The parties now return to the Bankruptcy Court Court to seek authorization to consummate the Settlement Agreement, including the payment of claims. A copy of Judge Alquist's Nov. 29, 2012 Memorandum Order is available at http://is.gd/OLs2zgfrom Leagle.com. Lloyd E. Mitchell, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 06-13250) on June 6, 2006. Judge Nancy V. Alquist oversees the case. Mark J. Friedman, Esq., at DLA Piper Rudnick Gray Cary US LLP, serves as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and debts. M/I HOMES: S&P Affirms 'B-' Corp. Credit Rating; Outlook Positive ----------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on M/I Homes Inc. to positive from stable. "At the same time, we affirmed our 'B-' corporate credit rating and our existing debt ratings on the company. We also maintain a '3' recovery rating on the company's senior unsecured notes, indicating our expectation for a meaningful (50%-70%) recovery in the event of a payment default," S&P said. "The outlook revision reflects M/I Home's faster than expected return to profitability, driven by improved margins on new communities and a faster sales pace in all markets from a relatively firmer overall housing environment," said credit analyst Matthew Lynam. "We believe the company's strategy to expand community count in its better performing markets will result in stronger credit metrics through greater operating leverage. The outlook also considers the company's improved liquidity cushion provided by a capital raise of equity and subordinated convertible notes in the third quarter of 2012." "Our positive outlook acknowledges M/I Homes' recently strengthened liquidity and incorporates our view that single- family housing fundamentals are slowly improving. We expect M/I Homes to maintain adequate liquidity, while investing the bulk of its cash in new communities to bolster sales and gross margins to levels that support gradually improving profitability over the next one to two years," S&P said. "An upgrade would require the company to achieve and sustain improved financial metrics given its smaller platform and exposure to weaker homebuilding markets. We could revise the outlook back to stable if liquidity becomes less than adequate, perhaps due to more aggressive land investment activity than we currently anticipate or the reinstatement of dividend distributions," S&P said. MCCLATCHY COMPANY: Moody's Affirms 'Caa1' CFR; Outlook Stable ------------------------------------------------------------- Moody's Investors Service changed The McClatchy Company's (McClatchy) rating outlook to stable from positive, affirmed its Caa1 Corporate Family Rating (CFR), and assigned a B1 rating to the company's proposed $750 million senior secured first lien notes due 2022. The rating outlook change reflects Moody's expectation that ongoing revenue pressure on newspapers will make it challenging for McClatchy to reduce its very high leverage even assuming the company continues to apply its free cash flow to reduce debt. Moody's views the leverage as unsustainable over the longer-term, although a favorable maturity profile creates low near term default risk. McClatchy plans to utilize the net proceeds from the note offering to refinance a portion of its existing first lien notes due 2017 ($846 million outstanding at 9/23/12) and fund transaction fees and expenses, including a significant redemption premium. The transactions reduce refinancing risk and extend the company's already favorable maturity profile. The modest expected reduction in cash interest expense and the added liquidity from the new $75 million super priority five-year revolver are also credit positive. The incremental debt will nevertheless increase leverage. Assignments: Issuer: McClatchy Company (The) Senior Secured Regular Bond/Debenture, Assigned a B1, LGD2 - 21% Outlook Actions: Issuer: McClatchy Company (The) Outlook, Changed To Stable From Positive Ratings Rationale McClatchy's revenue continues to decline notwithstanding a modest rebound in economic activity and a recovery in advertising in most other media channels. There continues to be low visibility on the magnitude and timing of any recovery in newspaper advertising, which would depend on the strength of the overall advertising market as well as the changes in media consumption trends. Tepid economic recovery, and a potentially soft broader advertising market in 2013, will likely hamper recovery for the newspaper industry. Over 2013-2014, Moody's expects McClatchy to experience sustained declines in print advertising and circulation, mitigated but not fully offset by growth in digital advertising and new revenue initiatives such as increases in subscription prices to cover bundled print-digital access, as well as other new digital and direct marketing products. McClatchy continues to aggressively manage costs and is benefiting from significant cash distributions from its equity investments, which have helped to limit EBITDA erosion. Moody's nevertheless believes the company will find it increasingly difficult to offset revenue declines with cost cuts while supporting both print and digital distribution platforms and investing in its growth opportunities. As a result, Moody's expects McClatchy's EBITDA to decline in a mid to high single digit percentage range annually through 2014. McClatchy's Caa1 CFR reflects the revenue pressure on the company's newspaper and print operations, reliance on cyclical advertising spending, and its very high and unsustainable leverage including a large underfunded pension. These risks are only partially tempered by the company's good market position in local news, positive free cash flow, and a favorable maturity profile that diminishes near-term default risk. Moody's expects newspapers will continue to face growing competition with technology-driven changes in media consumption and shifts by advertisers away from newspapers creating ongoing pressure on McClatchy's revenue and margins. McClatchy is likely to face a broader number of competitors with its initiatives to grow digital revenue and expand products such as direct marketing, and that gains will not fully offset declines in its print newspaper revenue. Generating sufficient free cash flow to repay enough debt to offset earnings declines and reduce the company's high debt-to-EBITDA leverage (approximately 6.3x LTM 9/23/12 incorporating Moody's standard adjustments and cash distributions from equity investments in EBITDA) will be challenging, and Moody's believes a restructuring over the longer-term is likely absent a significant reduction in leverage. This is the primary driver of the Caa1 CFR. The proposed note offering is conditioned on completion of a concurrent tender offer and consent made to existing 2017 secured note holders. The proposed notes will be guaranteed by each material domestic subsidiary and secured by a first lien on essentially all tangible and intangible assets (except Principal Properties and stock of subsidiaries as defined in the unsecured note indentures) and share ratably in the proceeds of any collateral sale with the existing 2017 secured notes. The proposed $75 million credit facility is secured by the same first lien collateral but would receive proceeds from the disposition of the collateral prior to any distribution to the proposed 2022 and 2017 secured notes. As a result, Moody's ranks the credit facility ahead of the secured notes in the Loss Given Default framework. The security package is not an all asset pledge, but Moody's is not using a deficiency claim in the Loss Given Default framework as the guarantee and collateral package (including guarantees from subsidiaries holding certain minority investments) is expected to provide sufficient coverage of secured debt in the event of a default given the more modest secured leverage (approximately 2.75x as of 9/23/12 pro forma for the proposed transactions). McClatchy's SGL-2 speculative-grade liquidity rating reflects its good liquidity position for the next 12-15 months with sufficient cash (approximately $15.7 million as of 9/23/12) and EBITDA generation to fund interest, taxes, pension contributions, capital spending and other cash needs. Moody's expects McClatchy will generate roughly $100 million of free cash flow over the next 12 months, with undrawn capacity on the $75 million revolver (after factoring in $38 million letters of credit) providing modest additional liquidity support. The company has no debt maturities until November 2014, and Moody's expects McClatchy's EBITDA cushion within its revolver financial maintenance covenants will exceed 20% over the next 12-15 months based on the covenant definitions in its proposed revolver. The stable outlook reflects Moody's expectation that the U.S. economy will continue to grow modestly, that McClatchy's revenue and EBITDA will continue to decline, and that debt-to-EBITDA leverage will remain above 6.0x. The stable rating outlook also reflects McClatchy's good near-term liquidity position leading to low default risk over the next two years, continued positive free cash flow generation and ongoing plans to reduce debt. Moody's expects the rating outlook would be stable if the proposed refinancing is not completed. Greater revenue stability such that the company can sustain and grow EBITDA, sustained positive free cash flow in excess of 5% of debt, and debt-to-EBITDA sustained below 6.0x could result in an upgrade. The company would also need to maintain a comfortable liquidity position including good covenant cushion and an expectation that it can fund or refinance maturities as they come due. Heightened risk of a restructuring, meaningful erosion of free cash flow, persistent revenue declines with limited prospects for a reversal, or a weakening liquidity position caused by a declining margin of compliance with credit facility covenants or insufficient cash and cash flow coverage of interest and approaching debt maturities could result in a downgrade. The principal methodology used in rating The McClatchy Company was the Global Publishing Industry Methodology published in December 2011 and the Global Cable Television Industry published in July 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. McClatchy, headquartered in Sacramento, CA, is the third-largest newspaper company in the U.S., with 30 daily newspapers, community newspapers, websites, mobile news and advertising, niche publications, direct marketing and direct mail services. McClatchy also owns McClatchy Interactive and holds equity investments in CareerBuilder, Classified Ventures, and other newspaper and online properties. Revenue for the LTM ended 9/23/12 was approximately $1.2 billion. MCCLATCHY COMPANY: S&P Rates Proposed $750-Mil. Secured Notes 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issue-level rating to The McClatchy Co.'s proposed $750 million senior secured notes due 2022 (one notch above the 'B-' corporate credit rating on the company). "We also assigned the notes a recovery rating of '2', indicating our expectation of substantial (70% to 90%) recovery for noteholders in the event of a payment default," S&P said. All existing ratings on the company, including the 'B-' corporate credit rating, are affirmed. "Issue proceeds will be used to fund the tender for the $846 million 11.5% senior secured notes due 2017 and related call premium," said Standard & Poor's credit analyst Hal Diamond. The transaction slightly increases debt leverage, though it extends the bulk of 2017 maturities and reduces interest expense. Pro forma total debt was $1.679 billion as of Sept. 23, 2012. "The corporate credit rating on Sacramento, Calif.-based The McClatchy Co. reflects high leverage, ongoing revenue declines due to the shift of news consumption and advertising to digital media, and the company's exposure to weak economic conditions. Standard & Poor's anticipates that credit measures will gradually deteriorate because of continued secular pressure on the business, despite efforts at cost restructuring and development of new digital revenue. The company has a 'highly leveraged' financial profile, according to our criteria, because of its high ratio of debt to EBITDA, and our expectation of rising leverage and declining discretionary cash flow over the next few years," S&P said. "The stable rating outlook reflects our expectation that the company will be able to maintain total lease and pension-adjusted debt to EBITDA below 7x despite the ongoing secular decline in print advertising revenue, and that the margin of compliance with its leverage covenant will remain adequate. We could downgrade McClatchy to 'CCC+' if we become convinced the pace of ad revenue declines will accelerate to a low-double-digit percent rate, the margin of compliance with its leverage covenant will narrow to under 10%, or discretionary cash flow will become minimal. For an upgrade to 'B', which we consider a remote possibility, we would look for a significant moderation in newspaper revenue declines, solid growth in online advertising, maintenance of adjusted leverage below 4.5x, and refinancing of the remainder of 2017 debt maturities," S&P said. MIRACLE TEMPLE: Case Summary & 3 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Miracle Temple Ministries, Inc. 3750 Millbranch Road Memphis, TN 38116 Bankruptcy Case No.: 12-32688 Chapter 11 Petition Date: November 26, 2012 Court: U.S. Bankruptcy Court Western District of Tennessee (Memphis) Judge: David S. Kennedy Debtor's Counsel: Michael Don Harrell, Esq. HARRELL AND ASSOCIATES 1884 Southern Avenue Memphis, TN 38114 Tel: (901) 274-5484 E-mail: harrellandassoc@bellsouth.net Scheduled Assets: $3,674,800 Scheduled Liabilities: $4,862,800 A copy of the Company's list of its three unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/tnwb12-32688.pdf The petition was signed by Richard Campbell, CFO. MJM STONE: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: MJM Stone Supply, LLC 14 Perry Street Stamford, CT 06902 Bankruptcy Case No.: 12-52117 Chapter 11 Petition Date: November 27, 2012 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Scott M. Charmoy, Esq. CHARMOY & CHARMOY 1261 Post Road P.O. Box 804 Fairfield, CT 06824 Tel: (203) 255-8100 Fax: (203) 255-8101 E-mail: scottcharmoy@charmoy.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- MJM Development, LLC 12-52118 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Miguel A. Juarez, sole member. A copy of MJM Development's list of its three unsecured creditors is available for free at http://bankrupt.com/misc/ctb12-52118.pdf MHEALTH INSURANCE: A.M. Best Assigns 'B' Finc'l Strength Rating --------------------------------------------------------------- A.M. Best Co. has assigned a financial strength rating of B (Fair) and an issuer credit rating of "bb+" to MHealth Insurance Company (MHealth) (Houston, TX). The outlook assigned to both ratings is stable. The ratings recognize the strategic role MHealth plays and the explicit support it receives from its ultimate parent, Memorial Hermann Healthcare System. The parent company has demonstrated explicit financial support through capital contributions and the implementation of a risk-based capital support guarantee in the latter part of 2012. The ratings also reflect MHealth's strong risk-adjusted capital levels and its very conservative investment portfolio. Offsetting these positive rating factors are MHealth's continued but improved operating losses through 2012, which are projected to continue through year-end 2013. Additionally, the company has a limited service area, coupled with some concentration in small group business. A.M. Best believes the small group business could be negatively impacted by healthcare reform and the setup of exchanges, with MHealth potentially losing some business at a time when it is trying to grow. However, the management at MHealth feels that healthcare reform could have a positive impact based on its integrated approach and the potential to offer competitively priced narrow network products and customer friendly plan designs in a business-to-consumer marketplace. A.M. Best will continue to monitor what the ultimate impact will be of these federal regulatory changes on the plans business model, production and profitability going forward. The outlook is based on the organization's ability to maintain its underwriting operating results and eventually produce favorable premium growth trends and operating results in the near term. On September 2011, MHealth (formerly known as UNICARE Health Insurance Company of Texas) was sold by WellPoint Inc. to MHealth, Inc., and subsequently, its name was changed to MHealth Insurance Company. Prior to the change in ownership, UNICARE Health Insurance Company of Texas primarily wrote Medicare supplement policies. This business was reinsured back to a subsidiary within WellPoint Inc., and MHealth assumed a smaller amount of the commercial individual and group accident and health business it was previously writing through a fronting company. Positive rating actions could occur if MHealth records favorable membership, premium and underwriting/operating results, leading to organic capital expansion. However, the ratings could be negatively impacted by significant deterioration in the company's operating performance and/or risk-adjusted capitalization, a reduction in or stoppage of financial support from the parent or a substantive impact of the regulatory environment relating to healthcare delivery mandates and reform measures. MOHEGAN TRIBAL: Reports $13.9 Million Net Income in Sept. 30 Qtr. ----------------------------------------------------------------- The Mohegan Tribal Gaming Authority reported net income of $13.93 million on $351.84 million of net revenues for the three months ended Sept. 30, 2012, compared with net income of $45.95 million on $373.45 million of net revenues for the same period during the prior year. For the fiscal year ended Sept. 30, 2012, the Company reported net income of $61.24 million on $1.39 billion of net revenues, compared with net income of $111.84 million on $1.41 billion of net revenues for the same period a year ago. "Our operating results for the quarter reflect a continuation of recent trends in revenues," said Mitchell Grossinger Etess, chief executive officer of the Authority. "In response, we continue to be prudent in our marketing approach in order to optimize revenues and profitability and, in late September 2012, we began implementation of further cost saving initiatives at Mohegan Sun in order to align our operations with market conditions. We remain pleased with the performance of Mohegan Sun at Pocono Downs and the progress of Mohegan Gaming Advisors, including its recent management deal with Resorts Casino Hotel in Atlantic City." A copy of the press release is available for free at: http://is.gd/ZQ86cH About Mohegan Tribal Gaming Authority Mohegan Tribal Gaming Authority -- http://www.mtga.com/-- is an instrumentality of the Mohegan Tribe of Indians of Connecticut, or the Tribe, a federally-recognized Indian tribe with an approximately 507-acre reservation situated in Southeastern Connecticut, adjacent to Uncasville, Connecticut. The Authority has been granted the exclusive authority to conduct and regulate gaming activities on the existing reservation of the Tribe, including the operation of Mohegan Sun, a gaming and entertainment complex located on a 185-acre site on the Tribe's reservation. Through its subsidiary, Downs Racing, L.P., the Authority also owns and operates Mohegan Sun at Pocono Downs, a gaming and entertainment facility located on a 400-acre site in Plains Township, Pennsylvania, and several off-track wagering facilities located elsewhere in Pennsylvania. PricewaterhouseCoopers LLP, in Hartford, Connecticut, expressed substantial doubt about the Authority's ability to continue as a going concern following the 2011 annual report. The independent auditors noted that of the Authority's total debt of $1.6 billion as of Sept. 30, 2011, $811.1 million matures within the next twelve months, including $535.0 million outstanding under the Authority's Bank Credit Facility which matures on March 9, 2012, and the Authority's $250.0 million 2002 8% Senior Subordinated Notes which mature on April 1, 2012. In addition, a substantial amount of the Authority's other outstanding indebtedness matures over the following three fiscal years. The Company's balance sheet at June 30, 2012, showed $2.22 billion in total assets, $2.01 billion in total liabilities and $207.83 million in total capital. * * * As reported by the TCR on March 14, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Uncasville, Conn.-based Mohegan Tribal Gaming Authority (MTGA) to 'B-' from 'SD'. "The upgrade to 'B-' reflects our reassessment of the Authority's capital structure following the completion of its comprehensive debt refinancing plan," said Standard & Poor's credit analyst Melissa Long. "While the completed transactions were not a de- leveraging event, the post-exchange capital structure substantially reduced MTGA's debt maturities over the next few years," S&P said. In the March 2, 2012, edition of the TCR, Moody's Investors Service revised Mohegan Tribal Gaming Authority's Probability of Default Rating to Caa1\LD from Caa3 following the completion of a debt exchange transaction which Moody's views as a distressed exchange. Concurrently, Moody's raised MTGA's Corporate Family Rating ("CFR") to Caa1 from Caa3 and revised its rating outlook to stable from negative to reflect its improved credit profile as a result of the exchange and recent debt covenant amendments. MOMENTIVE PERFORMANCE: Has Exchange Offer for $1.1-Bil. Sr. Notes ----------------------------------------------------------------- Momentive Performance Materials Inc. filed with the U.S. Securities and Exchange Commission a Form S-4 registration statement relating to its offer to exchange $1,100,000,000 of the Company's outstanding 8.875% First-Priority Senior Secured Notes due 2020 and certain related guarantees for a like aggregate amount of the Company's registered 8.875% First-Priority Senior Secured Notes due 2020 and certain related guarantees. The exchange notes will be issued under an indenture dated as of Oct. 25, 2012. The exchange notes will mature on Oct. 15, 2020. The Company will pay interest on the exchange notes semi-annually on April 15 and October 15 of each year, commencing on April 15, 2013, at a rate of 8.875% per annum, to holders of record on the April 1 or October 1 immediately preceding the interest payment date. The exchange notes will be guaranteed on a senior secured basis by each of the Company's domestic subsidiaries that is a guarantor under its senior secured credit facility. A copy of the Form S-4 prospectus is available for free at: http://is.gd/SZFScl About Momentive Performance Momentive Performance Materials, Inc., is a producer of silicones and silicone derivatives, and is engaged in the development and manufacture of products derived from quartz and specialty ceramics. As of Dec. 31, 2008, the Company had 25 production sites located worldwide, which allows it to produce the majority of its products locally in the Americas, Europe and Asia. Momentive's customers include companies in industries, such as Procter & Gamble, 3M, Goodyear, Unilever, Saint Gobain, Motorola, L'Oreal, BASF, The Home Depot and Lowe's. The Company had a net loss of $140 million in 2011, following a net loss of $63 million in 2010. Net loss in 2009 was $42 million. The Company's balance sheet at Sept. 30, 2012, showed $2.98 billion in total assets, $3.94 billion in total liabilities, and a $960 million in total deficit. * * * As reported by the TCR on May 14, 2012, Moody's Investors Service lowered Momentive Performance Materials Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa1 from B3. The action follows the company's weak first quarter results and expectations for a slower than expected recovery in volumes in 2012. In the Aug. 15, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered all of its ratings on MPM by two notches, including the corporate credit rating to 'CCC' from 'B-'. The outlook is negative. "The likelihood that earnings and cash flow will remain very weak for the next several quarters prompted the downgrade," explained credit analyst Cynthia Werneth. "In our view, leverage is unsustainably high, with total adjusted debt to EBITDA above 15x as of June 30, 2012." MPG OFFICE: Two Executives to Serve as "At-Will" Employees ---------------------------------------------------------- MPG Office Trust, Inc., entered into a second amended employment agreement with David L. Weinstein, the Company's President and Chief Executive Officer and a second amended and restated employment letter agreement with Christopher M. Norton, the Company's Executive Vice President, General Counsel and Secretary. The amendments, among other things, provide that Messrs. Weinstein's and Norton's employments with the Company are at-will and are not for a specified period of time, subject to the Company's obligations. Prior to the amendments, Mr. Weinstein's employment agreement provided for a fixed term, ending on Dec. 31, 2014, while Mr. Norton's employment letter agreement provided for a fixed term, ending on Dec. 31, 2014. A copy of the Amended Weinstein Agreement is available at: http://is.gd/7ws4QU A copy of the Amended Norton Agreement is available at: http://is.gd/ntOVON Retention Bonus Plan The Board of Directors adopted the MPG Office Trust, Inc., Retention Bonus Plan to provide eligible employees with certain cash retention bonus payments in connection with their continued employment with the Company. Pursuant to the terms and conditions of the Retention Plan, each participant will be eligible to receive payment of a retention bonus in an amount determined by the Compensation Committee and paid as follows, subject to the participant's continued employment with the Company: * 12.5% of the Retention Bonus will be paid to the participant on the last day of each calendar quarter of 2013; and * 50% of the Retention Bonus will be paid to the participant on the last day of the first calendar quarter of 2014. Mr. Weinstein has been awarded a Retention bonus equal to $2,625,000 under the Retention Plan, and Mr. Norton has been awarded a Retention Bonus equal to $350,000 under the Retention Plan. A copy of the Retention Bonus Plan is available for free at: http://is.gd/Is36bv Severance Plan On Nov. 28, 2012, the Board of Directors adopted the MPG Office Trust, Inc. Severance Plan to provide eligible employees with certain severance pay in the event of a qualifying termination of employment. The Severance Plan generally provides that if a participant's employment is involuntarily terminated, the participant will receive a lump-sum cash severance payment in an amount equal to two weeks of the participant's annual base compensation for each year of service (pro-rated for any partial year), subject to a maximum payment, provided that the participant executes and does not revoke a general release of claims. On Nov. 28, 2012, the Company entered into an amendment to the employment agreement of Peggy M. Moretti, the Company's Executive Vice President, Investor and Public Relations & Chief Administrative Officer, to extend the term of her employment for an additional year to Dec. 31, 2015, and make certain other amendments. About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high- quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. The Company has been focused on reducing debt, eliminating repayment and debt service guarantees, extending debt maturities and disposing of properties with negative cash flow. The first phase of the Company's restructuring efforts is substantially complete and resulted in the resolution of 18 assets, relieving the Company of approximately $2.0 billion of debt obligations and potential guaranties of approximately $150 million. The Company reported net income of $98.22 million in 2011, compared with a net loss of $197.93 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.86 billion in total assets, $2.59 billion in total liabilities, and a $729.16 million total deficit. MUNICIPAL MORTGAGE: Expects Units to Buy $22.8 Million Debt ----------------------------------------------------------- Municipal Mortgage & Equity, LLC, expected MMA Financial Holdings, Inc (MFH) and MuniMae TEI Holdings, LLC (TEI), both wholly owned subsidiaries of the Company, to collectively purchase $22.8 million of previously issued subordinated debt for $6.8 million. The Company also expected to reduce, and extend, the interest pay rate on $157.4 million of MFH subordinated debt to 75 basis points through February, March or April 2015, depending on the tranche being modified. The Company finalized these expected transactions in a two-part closing, the first close occurring on Nov. 21, 2012, and the second on Nov. 26, 2012. Employment Agreement with CEO The Company entered into an employment agreement with Michael L. Falcone, its chief executive officer and president pursuant to which Mr. Falcone continue to be employed as CEO. The employment Agreement is effective on Jan. 1, 2013. The employment agreement has a three year term ending on Dec. 31, 2015, and provides for base compensation for calendar year 2012 of $530,000 and for calendar year 2013 of $555,000, subject to annual increases thereafter at the discretion of the Compensation Committee of the Board of Directors. Meanwhile, on Nov. 20, 2012, the Company hired Jason Antonakas for the position of Chief Accounting Officer. Mr. Antonakas will oversee, manage and direct the accounting and financial reporting operations for the company and will report to the Chief Financial Officer. The Company has not entered into an employment agreement with Mr. Antonakas. He will receive a market salary and the Company's usual and customary benefits and is eligible for a performance based bonus. Mr. Antonakas is a certified public accountant (Maryland) and was previously the Controller for Williams Scotsman, a subsidiary of Algeco Scotsman, for two and one-half years, after more than 11 years with KPMG, LLP, most recently as a senior manager in the Baltimore, Maryland office. Mr. Antonakas is anticipated to start with the Company on Dec. 17, 2012. About Municipal Mortgage Baltimore, Md.-based Municipal Mortgage & Equity, LLC (Pink Sheets: MMAB) -- http://www.munimae.com/-- was organized in 1996 as a Delaware limited liability company and is classified as a partnership for federal income tax purposes. When the Company became a publicly traded company in 1996, it was primarily engaged in originating, investing in and servicing tax- exempt mortgage revenue bonds issued by state and local government authorities to finance affordable multifamily housing developments. Since then, the Company made several acquisitions that significantly expanded its business. However, in 2008, due to the financial crisis, the Company began contracting its business. The Company has sold, liquidated or closed down all of its different businesses except for its bond investing activities and certain assets and residual interests related to the businesses and assets that the Company sold due to its liquidity issues. The Company has a majority position in International Housing Solutions S.a.r.l., a partnership that was formed to promote and invest in affordable housing in overseas markets. In addition, at Dec. 31, 2010, the Company has an unfunded equity commitment of $5.1 million, or 2.67% of total committed capital with respect to its role as the general partner to the South Africa Workforce Housing Fund SA I ("SA Fund"). The SA Fund was formed to invest directly or indirectly in housing development projects and housing sector companies in South Africa. A portion of the funding of SA Fund is participating debt provided by the United States Overseas Private Investment Corporation, a federal government entity, and the remainder is equity primarily invested by institutional and large private investors. The Company expects to continue this business. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, KPMG LLP, in Baltimore, Maryland, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has been negatively impacted by the deterioration of the capital markets and has liquidity issues which have resulted in the Company having to sell assets and work with its creditors to restructure or extend its debt arrangements. The Company's balance sheet at Sept. 30, 2012, showed $1.85 billion in total assets, $1.12 billion in total liabilities and $723.23 million in total equity. Bankruptcy Warning The Company said in its 2011 annual report that although the Company has been able to extend, restructure and obtain forbearance agreements on various debt and interest rate swap agreements, these extensions, restructurings and forbearance agreements are generally short-term in nature and do not by themselves provide a viable long-term solution to the Company's liquidity issues. If the Company is not able to negotiate other arrangements, the Company will not be able to pay the interest on certain of its subordinate debt following the rate increases that are scheduled to occur in April and May of 2012. The Company's future cash flows are not expected to be sufficient to satisfy the overall debt service required under the subordinate debt following such increases, and the Company would be unable to repay the indebtedness if the subordinate debt were accelerated. In the event management is not successful in restructuring or settling its remaining non-bond related debt, or if the bond portfolio net interest income and the common equity distributions the Company receives from its subsidiaries are substantially reduced, the Company may have to consider seeking relief through reorganization under the U.S. Bankruptcy Code. NATIONS INSURANCE: A.M. Best Affirms 'B' Finc'l Strength Rating --------------------------------------------------------------- A.M. Best Co. has revised the outlook to positive from stable and affirmed the financial strength rating of B (Fair) and issuer credit rating of "bb+" of Nations Insurance Company (NIC) (Cerritos, CA). These rating actions recognize NIC's enhanced risk-adjusted capitalization and positive net income growth in recent years. In addition, the ratings consider the company's conservative investment philosophy, tempered premium growth and management's local market knowledge. These positive rating factors are somewhat offset by NIC's variable underwriting performance since inception in 2008. As a single-state nonstandard private passenger automobile writer in California, the company also remains susceptible to adverse changes in the judicial, legislative and economic environments, as well as increased competition. The positive outlook reflects A.M. Best's expectation that the ratings may be upgraded in the near term if NIC can continue its trends of positive operating performance and favorable risk- adjusted capitalization. However, if the company's underwriting performance should decline, the positive outlook could be reconsidered. NACHSHON DRAIMAN: Suit Against Shabat Survives Dismissal Bid ------------------------------------------------------------ Bankruptcy Judge Timothy A. Barnes denied the motion filed by Ronald Shabat, Shabat & Associates, Inc., Dan Shabat, Dan's Healthcare Management, LLC, Shabat Investments, LLC, Pharmore Drugs, LLC, SFMA, Inc., and LCF Associates seeking to dismiss the adversary complaint filed against them by Richard M. Fogel, as Chapter 7 Trustee of the Estate of Nachshon Draiman. The Complaint alleges causes of action under sections 547 and 548 of the Bankruptcy Code and various provisions of the Illinois Uniform Fraudulent Transfer Act. The case is RICHARD M. FOGEL, not individually but solely as Trustee for the Estate of Nachshon Draiman, Plaintiff, v. RONALD SHABAT; SHABAT & ASSOC, INC.; DAN SHABAT; DAN'S HEALTHCARE MANAGEMENT, LLC; SHABAT INVESTMENTS, LLC; PHARMORE DRUGS, LLC; SFMA, INC.; and LCF ASSOCIATES, Defendants, Adv. Proc. No. 12 A 00799 (Bankr. N.D. Ill.). A copy of the Court's Nov. 26, 2012 Memorandum Decision is available at http://is.gd/k16MrDfrom Leagle.com. Nachshon Draiman filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 09 B 17582) on May 14, 2009. The Case on May 13, 2011, was converted from a case under Chapter 11 of the Bankruptcy Code to a case under Chapter 7 of the Bankruptcy Code. That same day, Richard Fogel was appointed as interim chapter 7 trustee. NCR CORPORATION: Moody's Reviews 'Ba1' CFR for Downgrade -------------------------------------------------------- Moody's Investors Service placed all debt ratings of the NCR Corporation under review for downgrade, including the Ba1 corporate family and probability of default and Ba2 senior unsecured ratings. This follows NCR's announcement that is acquiring Retalix Limited, a provider of retail point-of-sale software and service solutions for net cash consideration of $650 million. The transaction, to be funded with a combination of new debt issuance and balance sheet cash, will increase NCR's debt, and is likely to delay the expected deleveraging. Further, the Retalix acquisition will add a layer of execution risk to the management team still working on integrating the 2011 acquisition of Radiant Systems. Ratings Rationale The review will focus on the ultimate debt financing of the acquisition, the updated timeframe to reduce adjusted debt/EBITDA leverage, and to generate cash flow to do so in line with the rating and the company's ability to successfully integrate Retalix. While the transaction will have a negative impact on key credit metrics, Moody's will also review management's ability to enhance the capability of its retail hardware offerings by providing more integrated services by adding Retalix software and services to its products. The review is likely to be completed in about a month and, depending on the outcome of the review, more than a one notch downgrade of the ratings is unlikely. Ratings placed under review for downgrade: Ba1 corporate family rating, Ba1 probability of default rating, Ba2 senior unsecured rating. NCR Corporation, headquartered in Duluth, Georgia, with $5.8 billion in revenue for the twelve months ended September 2012, has leading market positions in automatic teller machine (ATM), electronic cash register, hospitality and related supplies and services. The principal methodology used in rating NCR was the Global Technology Hardware Industry Methodology published in September 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. NISKA GAS: Moody's Affirms 'B1' CFR/PDR; Outlook Stable ------------------------------------------------------- Moody's Investors Service changed Niska Gas Storage Partners LLC's outlook to stable from negative and affirmed its B1 Corporate Family Rating (CFR) and Probability of Default Rating, Ba1 senior secured revolving credit facility rating, and B2 senior unsecured rating. The Speculative Grade Liquidity rating of SGL-3 was unchanged. "Moody's changed Niska's rating outlook to stable, reflecting the company's improved operating performance and decreased leverage," said Terry Marshall, Moody's Senior Vice President. "We expect EBITDA to remain flat as Niska maintains a high percentage of committed natural gas storage contracts and continued low seasonal gas price differentials." Issuer: AECO Gas Storage Partnership Senior Secured Bank Credit Facility, Ba1, LGD2, 12% Issuer: Niska Gas Storage US, LLC Senior Secured Bank Credit Facility, Ba1, LGD2, 12% Senior Unsecured Regular Bond/Debenture, B2, LGD4, 69% Outlook Actions: Issuer: AECO Gas Storage Partnership Outlook, Changed To Stable From Negative Issuer: Niska Gas Storage Partners LLC Outlook, Changed To Stable From Negative Issuer: Niska Gas Storage US, LLC Outlook, Changed To Stable From Negative Rating Rationale Niska's B1 CFR reflects the volatility of Niska's contango arbitrage business, which comprises about 20% of storage capacity utilization, coupled with large cash distributions. The rating also considers the large working capital requirements tied to the contango arbitrage business, the price and re-contracting risks of the third-party term storage contracts, and the practice of contracting only 60% of storage capacity to third-party users on a long term basis. The rating is supported by the strategic value of Niska's physical gas storage in Alberta, California and Oklahoma, and the durability and low reinvestment requirements of these assets. The rating also considers working capital borrowings under the revolvers that are required to support the contango arbitrage business, but which are mostly backed by purchased natural gas inventory. The SGL-3 Speculative Grade Liquidity rating reflects adequate liquidity through the third quarter of fiscal year 2014 (December 31, 2013). At September 30, 2012, Niska had minimal cash and $217 million available under its $400 million senior secured borrowing base revolver, which matures in 2016. The revolver is available in the amount of $200 million each to AECO Gas Storage Partnership and Niska Gas US, LLC. Moody's expects Niska to generate positive free cash flow of about $20 million through the third quarter of fiscal year 2014. The company is expected to easily remain compliant with the fixed charge coverage ratio (1.1x) under its revolver that governs the ability to draw more than 85% of the revolver commitment. The company has no major debt maturities. Niska's has little in the way of non-core assets that could be sold, but it has considerable value in its key storage assets that could be tapped if necessary. The senior secured revolver is rated Ba1, three notches higher than the CFR of B1 under Moody's Loss Given Default (LGD) Methodology. The secured debt benefits from its prior ranking to the $644 million senior unsecured notes, which are rated B2,one notch lower than the B1 Corporate Family Rating. The stable outlook assumes that the compression in summer-winter spreads has bottomed and adjusted EBITDA will remain at about $180 million, including $60 million of Moody's standard adjustments, and that third-party term contracts continue to comprise about 80% of storage capacity. The rating could be upgraded if debt to EBITDA at fiscal year end, when inventory borrowings are low, is likely to remain below 3.5x. An upgrade would also be contingent on continued contracting of about 80% of storage capacity. The rating could be downgraded if debt to EBITDA at fiscal year end is likely to be sustained above 5x. A reliance on the proprietary optimization business for more than 25% of storage capacity or debt funded resumption of the subordinated distributions could also lead to a downgrade. The principal methodology used in rating Niska was the Global Midstream Energy Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Houston, Texas, with assets in Alberta, California and Oklahoma, Niska Gas Storage owns 217 Bcf of natural gas storage assets. OAK TREE: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: Oak Tree Realty Investments, LLC 2010 Valley View Lane Suite 250 Dallas, TX 75234 Bankruptcy Case No.: 12-37390 Chapter 11 Petition Date: November 27, 2012 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: John P. Lewis, Jr., Esq. LAW OFFICE OF JOHN P. LEWIS, JR. 1412 Main St., Suite 210 Dallas, TX 75202 Tel: (214) 742-5925 Fax: (214) 742-5928 E-mail: jplewisjr@mindspring.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 Steven Shelley, vice president. OCTAVIAR ADMINISTRATION: Drawbridge Okayed for Direct Appeal ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Drawbridge Special Opportunities Fund LP has permission from U.S. Bankruptcy Judge Shelley C. Chapman for a direct appeal to the U.S. Court of Appeals from her September decision in the Chapter 15 case of Australia's Octaviar Administration Pty Ltd. The report recounts that Australian liquidators for Octaviar initiated the Chapter 15 effort in August, saying they may bring lawsuits here. Drawbridge opposed, saying Octaviar didn't have a residence, place of business or assets in the U.S. The report relates that in her September opinion, Judge Chapman ruled that assets or presence in the U.S. is no prerequisite for Chapter 15, where the bankruptcy judge has the ability to assist a bankruptcy principally pending elsewhere. Judge Chapman wrote a 10-page opinion explaining to the appeals court why it should allow a direct appeal, overstepping an intermediate appeal to a U.S. district judge. According to the report, although there are lower court decisions on the issue, she said there is no binding authority saying whether some form of presence or assets in the U.S. is required for Chapter 15. The judge said Drawbridge or affiliates are among defendants in a suit in Australia where the liquidators are seeking to recover A$210 million ($220 million). Judge Chapman pointed to cases decided under 11 U.S.C. Section 304, the predecessor to Chapter 15, saying that U.S. presence isn't required. The appeals court isn't required to accept the appeal. About Octaviar Administration Australian liquidators for Octaviar Administration Pty Ltd. filed a petition for creditor protection under Chapter 15 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 12-13443) on Aug. 13, 2012, in Manhattan. The liquidators said the company didn't do business in the U.S., and they aren't aware of any U.S. creditors. But the liquidators filed a Chapter 15 petition in light of potential claims or causes of action against parties located in the United States. If the application for recognition of the Australian liquidation as "foreign main proceeding" is recognized, the liquidators will investigate these potential claims and may ultimately commence proceedings in the U.S. and/or seek to enforce a foreign judgment in the U.S. The Chapter 15 petition listed less than $100 million in assets and more than $100 million in debt. Prior to its demise, the Octaviar Group consisted of a travel and tourism business, a corporate and investment banking business, a funds management business, and as structured finance and advisory business. At it height, the Octaviar Group consisted of more than 400 companies, employed more than 3,000 employees, and had offices in Australia, New Zealand and the United Arab Emirates. The business collapsed when the company announced in January 2008 that it's separating its financial services business from its travel and tourism business, which led to shares declining from AU$3.18 at opening to AU$0.99 at closing. The decline caused an event of default with lenders under a A$150 million bride financing facility. The travel and tourism business was ultimately sold to Global Voyager Pty Limited to pay off debt. Octaviar Administration provided the treasury function for Octaviar Group. OA was placed into liquidation by the Supreme Court of Queensland in July 2009. Katherine Elizabeth Barnet and William John Fletcher, the liquidators of OA, are represented in the U.S. proceedings by Howard Seife, Esq., at Chadbourne & Parke. PACIFIC GOLD: Judge Denies Black Diamond's Motion for Injunction ---------------------------------------------------------------- On March 8, 2012, Pacific Gold Corp., received a complaint that was filed in the United States District Court in Newark New Jersey, Case number 2:12-cv-01285-ES-CLW entitled Black Mountain Equities Inc. v. Pacific Gold Corp. The Company has denied all allegations and is vigorously defending itself against the claims asserted in the action. The Company has also asserted counterclaims against Black Mountain Equities, YA Global Investments and its investment manager, Yorkville Advisors, LLC. In May 2012, Black Mountain filed for injunctive relief and the injunction arguments were heard in October 2012. At that time, the presiding judge opted to reserve judgment; however, on Nov. 27, 2012, the judge denied Black Mountain's motion for a preliminary injunction. About Pacific Gold Las Vegas, Nev.-based Pacific Gold Corp. is engaged in the identification, acquisition, and development of prospects believed to have gold mineralization. Pacific Gold through its subsidiaries currently owns claims, property and leases in Nevada and Colorado. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Silberstein Ungar, PLLC, in Bingham Farms, Michigan, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred losses from operations, has negative working capital and is in need of additional capital to grow its operations so that it can become profitable. The Company reported a net loss of $1.38 million in 2011, compared with a net loss of $985,278 in 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.61 million in total assets, $5.12 million in total liabilities and a $3.51 million total stockholders' deficit. PACIFIC GOLD: DTC Lifts "Deposit Chill" on Common Stock ------------------------------------------------------- Pacific Gold Corp. was notified by The Depository Trust Company that the deposit transaction restriction (Deposit Chill) imposed on the Company's common stock has been lifted and that DTC has resumed accepting deposits of the Company's common stock for depository and book-entry transfer services. About Pacific Gold Las Vegas, Nev.-based Pacific Gold Corp. is engaged in the identification, acquisition, and development of prospects believed to have gold mineralization. Pacific Gold through its subsidiaries currently owns claims, property and leases in Nevada and Colorado. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Silberstein Ungar, PLLC, in Bingham Farms, Michigan, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred losses from operations, has negative working capital and is in need of additional capital to grow its operations so that it can become profitable. The Company reported a net loss of $1.38 million in 2011, compared with a net loss of $985,278 in 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.61 million in total assets, $5.12 million in total liabilities and a $3.51 million total stockholders' deficit. PARKWAY INVESTMENT: Case Summary & 12 Unsecured Creditors --------------------------------------------------------- Debtor: Parkway Investment Properties Inc. 1112 E. Donegan Ave. Kissimmee, FL 34744 Bankruptcy Case No.: 12-15932 Chapter 11 Petition Date: November 27, 2012 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Samuel R. Pennington, Esq. BESS BLOUGOURAS FREYBERG PENNINGTON 303 N Texas Avenue Tavares, FL 32778 Tel: (352) 508-8277 Fax: (352) 508-8277 E-mail: spennington@lawteam4u.com Scheduled Assets: $723,383 Scheduled Liabilities: $1,444,152 A copy of the Company's list of its 12 unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/flmb12-15932.pdf The petition was signed by Barry Compton, president. PAYMENT DATA: FiCentive Settles Litigation with SmartCard --------------------------------------------------------- FiCentive, Inc., Payment Data Systems, Inc.'s wholly-owned subsidiary, entered into a confidential compromise settlement agreement and full and final release with SmartCard Marketing Systems. Under the terms of the Settlement Agreement, SmartCard Marketing has agreed to pay FiCentive the sum of $35,000 in immediately available funds on or before Nov. 27, 2012. On Nov. 27, 2012, FiCentive received the payment of $35,000. FiCentive commenced legal action against the Company's former customer, SmartCard, in the 57th Judicial District Court of Bexar County, Texas on Sept. 17, 2012. In the complaint, the Company alleged, among other things, that SmartCard breached the terms of the sales agreement executed by the parties. The Company sought to recover economic damages of approximately $72,000 and attorneys' fees. Pursuant to the terms of the Settlement Agreement, SmartCard Marketing Systems agreed to issue 500,000 unrestricted shares of its common stock to the Company by Dec. 20, 2012. Upon receipt of both the payment of $35,000 and the receipt of the 500,000 unrestricted common stock shares, FiCentive has agreed to dismiss the pending litigation filed on Sept. 17, 2012, in the 57th Judicial District Court of Bexar County, Texas, with prejudice. The Company does not expect to incur any significant additional expenses associated with this litigation. About Payment Data Systems San Antonio, Tex.-based Payment Data Systems, Inc. provides integrated electronic payment processing services to merchants and businesses, including credit and debit card-based processing services and transaction processing via the Automated Clearinghouse Network. The Company also operates an online payment processing service for consumers under the domain name http://www.billx.com/through which consumers can pay anyone. The Company's balance sheet at Sept. 30, 2012, showed $4.47 million in total assets, $2.80 million in total liabilities, all current, and $1.67 million in total stockholders' equity. PENNFIELD CORP: Carlisle Authorized to Buy Feed Producer -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pennfield Corp. was authorized to sell the business for $15.6 million to Carlisle Advisors LLC. The creditors' committee supported the sale as did the secured lender. There was no opposition and no bidding in competition with the Carlisle offer. About Pennfield Corporation Pennfield Corporation and Pennfield Transport Company filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 12-19430 and 12-19431) on Oct. 3, 2012, in Philadelphia. Founded in 1919, Pennfield is a Lancaster, Pennsylvania-based manufacturer of bulf and bagged feeds for dairy, equine and other commercial and backyard livestock. The company owns and operates three production mills located in Mount Joy, Martinsburg, and South Montrose, in Pennsylvania. The Debtors filed for bankruptcy to sell their assets to Carlisle Advisors, LLC, subject to higher and bettr offers. Carlisle has also agreed to provide a $2.0 million DIP Loan. Judge Bruce I. Fox presides over the case. Attorneys at Maschmeyer Karalis P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Skadden, Arps, Slate, Meagher & Flom LLP is the special counsel. Groom Law Group, Chartered, is the employee benefits counsel. AEG Partners LLC is the financial advisor. Lakeshore Food Advisors, LLC, is the investment banker. Pennfield Corp. estimated $10 million to $50 million in assets and debts. Pennfield Transport estimated under $1 million in assets and debts. The petition was signed by Arnold Sumner, president. PENTON BUSINESS: S&P Affirms 'B-' CCR on Farm Progress Acquisition ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B-' corporate credit rating on New York City-based business-to-business trade show operator and publisher Penton Business Media Holdings Inc. The outlook is stable. "At the same time, we revised the recovery rating on the company's senior secured debt to '3', indicating our expectation for meaningful (50%-70%) recovery prospects in the event of a default, from '4'. We affirmed the 'B-' issue-level rating on this debt," S&P said. "The rating on Penton reflects our expectation that the company's leverage will remain high over the intermediate term," said Standard & Poor's credit analyst Dan Haines. "The rating also incorporates Standard & Poor's view of refinancing risk in relation to the company's August 2014 debt maturity, notwithstanding our expectation that the company's liquidity will be 'adequate' over the near term and that Penton will continue to generate discretionary cash flow. These factors underpin our view of Penton's financial risk as 'highly leveraged' based on our criteria. We assess Penton's business risk as 'weak' given our expectation that the company will remain susceptible to cyclical advertising demand and that unfavorable secular trends will continue to pressure the publishing business," S&P said. "On Nov. 13, 2012, Penton acquired Farm Progress from Fairfax Media. Pro forma for the acquisition, lease-adjusted leverage is 7.6x, or 7.2x when assuming synergies. The acquisition expands Penton's presence in the agriculture industry and adds large exhibition shows to the company's portfolio. The acquisition was funded with the revolving credit facility and cash on hand," S&P said. "The outlook is stable, reflecting our expectation that discretionary cash flow and EBITDA coverage of interest expense will continue to improve, and that liquidity and compliance with financial covenants will remain adequate over the near term. We could raise the rating if the company makes significant progress toward addressing its 2014 maturities. An upgrade would likely also entail the company showing consistent organic revenue and EBITDA growth, with a stable or improving EBITDA margin," S&P said. "Although less likely over the near term, we could lower the rating if EBITDA trends reverse, causing discretionary cash flow to decline dramatically. Factors that could contribute to such a scenario include a resumption of economic weakness and accelerated declines in the business-to-business media segment, especially the trade publishing business," S&P said. PINNACLE AIRLINES: To Work Out Concessions With Pilots ------------------------------------------------------ Wayne Risher at The Commercial Appeal reported that Pinnacle Airlines Corp. and its pilots said last month they're trying to work out sharp differences over cost concessions after the company lost a bid to scrap their labor agreement. According to the report, the company said a bankruptcy court ruling provided "a clear path to a consensual agreement," but cautioned that time was short to strike a deal. Pilots form the last and biggest piece of an effort to achieve about $76 million a year in savings that management says is necessary to be competitive. Union officials say nearly $60 million of those cuts would come from pilots for the Delta Connection carrier, the report noted. The report also said other issues, such as whether Pinnacle keeps corporate headquarters in Memphis or moves it to Minneapolis, are considered secondary to achieving sustainable labor costs. The report said no deadline has been set for reaching an agreement, although the Chapter 11 bankruptcy reorganization is in its eighth month and the company has relied on financing from its mainline partner Delta Air Lines to help stay afloat. The report noted that Judge Robert E. Gerber said in his ruling that Pinnacle came "very close" to winning the right to reject a collective bargaining agreement and impose its will on pilots. Judge Gerber said the company fell short because it didn't offer pilots equity or profit-sharing, it showed no flexibility on the amount of cuts, and it pushed for concessions that would apparently make its costs lower than, not equal to, those of competitors. "Pinnacle may be well served to present a new proposal that cures the deficiencies just noted," the report quoted Judge Gerber as writing. According to the report, Pinnacle president and CEO John Spanjers said the ruling "gives Pinnacle a brief opportunity to reach an agreement that will provide the savings we need. Although the court did not approve our proposed modifications in full, the court gave the parties a clear road map to arrive at cost savings necessary for Pinnacle to emerge from bankruptcy as a viable, competitive company." The Air Line Pilots Association, which represents about 2,700 Pinnacle pilots, said ongoing negotiations had made significant progress, but the parties remained apart in certain key areas, including pay for Pinnacle's senior first officers and senior captains. Pilots and the company have been negotiating virtually since Pinnacle filed bankruptcy April 1, the report said. "This ruling means that our pilots will continue to work under a negotiated contract rather than immediately facing unilaterally imposed terms of employment, and that is important," the report quoted Capt. Tom Wychor, leader of ALPA's Pinnacle unit, as saying. "There's no real victory in this outcome, because our only future as Pinnacle pilots will come with a consensual deal that addresses Pinnacle's significant financial hurdles while also recognizing our pilots' needs." According to the report, Mr. Wychor added, "We need to negotiate a bankruptcy agreement that preserves jobs worth having while creating an environment in which the company can thrive." The report noted that Josh Render, Memphis-based Pinnacle captain and union spokesman, said, "The ruling indicated that Pinnacle's original ask was just too much. It was overreaching. He (Gerber) was unwilling to start a race to the bottom, and essentially that's what it was. He didn't think it was necessary to put us below every other regional airline" in pilot pay. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. The official committee of unsecured creditors tapped Morrison & Foerster LLP as its counsel, and Imperial Capital, LLC, as financial advisors. Pinnacle has the exclusive right to propose a reorganization plan until Jan. 25. PINNACLE AIRLINES: Expects to Reduce CRJ-200 Fleet Next year ------------------------------------------------------------ Pinnacle Airlines Corp. updated its employees on a development related to the Company's fleet plan and its negotiations with the Company's pilots. "As I noted in my message last Friday, we are at a critical moment and we must work quickly to address a near-term liquidity crisis," said John Spanjers, executive vice president and chief operating officer of Pinnacle, in his letter to employees. "The negotiations with our pilots are vital to achieving the cost savings necessary to create a competitive cost structure, avoid liquidation and successfully emerge from bankruptcy." In the latest fleet plan Pinnacle received from Delta, there are revisions that have not yet been finalized, but Pinnacle expects that the CRJ-200 fleet will begin to shrink sometime next year. "We believe achieving the right cost structure will position us to compete for any additional dual-class aircraft from Delta," Mr. Spanjers said. While Pinnacle and ALPA have continued to negotiate toward a consensual agreement, Pinnacle is taking a few days away from the table to assess the impact of the anticipated fleet plan changes and what is needed for Pinnacle to survive. Pinnacle said it will work quickly and diligently to assess these revisions and continues its negotiations toward a consensual agreement that provides the best path to ensure its long-term existence. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. Pinnacle Airlines' balance sheet at Sept. 30, 2011, showed $1.53 billion in total assets, $1.42 billion in total liabilities and $112.31 million in total stockholders' equity. Debtor-affiliate Colgan Air, Inc. disclosed $574,482,867 in assets and $479,708,060 in liabilities as of the Chapter 11 filing. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. The official committee of unsecured creditors tapped Morrison & Foerster LLP as its counsel, and Imperial Capital, LLC, as financial advisors. Pinnacle has the exclusive right to propose a reorganization plan until December 30. PIPELINE DATA: Lenders May Credit Bid in Sale --------------------------------------------- Pipeline Data Inc. and its affiliated debtors will appear before the Bankruptcy Court in Wilmington, Delaware, on Dec. 19, at 3:00 p.m. for a final hearing on their request to use cash collateral. Two days after filing for Chapter 11, Pipeline Data sought and obtained an interim order permitting them to use cash tied to a 2006 first lien credit facility with Camofi Master LDC, as collateral agent. As of the bankruptcy filing date, Pipeline Data owed the senior lenders roughly $42.1 million in principal, plus roughly $26.8 million on unpaid interest and other fees. The Debtors have presented a 13-week budget and proposed to provide adequate protection to the lenders for the use of cash collateral. Under the Interim Order, the non-insider senior lenders are permitted to credit bid the amount of the prepetition debt in conection with any sale of the Debtors' assets. The Debtors are required under the Interim Order to obtain final approval of an asset sale within 13 weeks upon the entry of the Interim Order. The Debtors also are required to hire AlixPartners as financial advisors and Phillip Mazzilli as independent director. The Order also directed the Debtors to submit to the lenders, among others, schedules showing payments or other transfers of value received by the Debtors from The Comvest Group, Pipeline Cynergy Holdings LLC or their respective affiliates, and vice versa, from January 2009 through the bankruptcy filing date. Camofi Master LDC, the collateral agent under the prepetition first lien credit facility, is represented by Arik Preis, Esq., at Akin Gump Strauss Hauer & Feld LLP in New York. About Pipeline Data Pipeline Data Inc., a processor of debit and credit cards for smaller retailers, filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-13123) Nov. 19, 2012, in Delaware with plans for selling the business as a going concern. Alpharetta, Georgia-based Pipeline Data provides credit and debit card payment processing services to approximately 15,000 merchants. The Company has 36 employees. Attorneys at Whiteford Taylor Preston LLC, in Wilmington, Delaware, and Kirkland & Ellis L.L.P. serve as counsel. AlixPartners L.L.P. is the financial advisor. Dragonfly Capital Partners L.L.C. is the investment banker. The Debtor estimated assets of $1 million to $10 million and debts of $50 million to $100 million. Pipeline, which sough bankruptcy together with affiliates, owes $66.6 million in principal and interest to first-lien creditors who have liens on all assets. PIPELINE DATA: Sec. 341 Creditors' Meeting Set for Dec. 17 ---------------------------------------------------------- The U.S. Trustee for Region 3 will hold a meeting of creditors pursuant to Section 341 of the Bankruptcy Code in the Chapter 11 cases of Pipeline Data Inc. and its debtor-affiliates on Dec. 17, 2012, at 10:00 am, J. Caleb Boggs Federal Building, 844 King Street, 2nd Floor, Room 2112, in Wilmington, Delaware. About Pipeline Data Pipeline Data Inc., a processor of debit and credit cards for smaller retailers, filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-13123) Nov. 19, 2012, in Delaware with plans for selling the business as a going concern. Alpharetta, Georgia-based Pipeline Data provides credit and debit card payment processing services to approximately 15,000 merchants. The Company has 36 employees. Attorneys at Whiteford Taylor Preston LLC, in Wilmington, Delaware, and Kirkland & Ellis L.L.P. serve as counsel. AlixPartners L.L.P. is the financial advisor. Dragonfly Capital Partners L.L.C. is the investment banker. The Debtor estimated assets of $1 million to $10 million and debts of $50 million to $100 million. Pipeline, which sough bankruptcy together with affiliates, owes $66.6 million in principal and interest to first-lien creditors who have liens on all assets. PIPELINE DATA: Won't Have Official Unsecured Creditors Committee ---------------------------------------------------------------- An official committee of unsecured creditors has not been appointed in the Chapter 11 cases of Pipeline Data Inc. and its affiliated debtors. Roberta A. DeAngelis, the United States Trustee Region 3, said no unsecured creditor response to the U.S. Trustee's communication/contact for service on the committee was received. About Pipeline Data Pipeline Data Inc., a processor of debit and credit cards for smaller retailers, filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-13123) Nov. 19, 2012, in Delaware with plans for selling the business as a going concern. Alpharetta, Georgia-based Pipeline Data provides credit and debit card payment processing services to approximately 15,000 merchants. The Company has 36 employees. Attorneys at Whiteford Taylor Preston LLC, in Wilmington, Delaware, and Kirkland & Ellis L.L.P. serve as counsel. AlixPartners L.L.P. is the financial advisor. Dragonfly Capital Partners L.L.C. is the investment banker. The Debtor estimated assets of $1 million to $10 million and debts of $50 million to $100 million. Pipeline, which sough bankruptcy together with affiliates, owes $66.6 million in principal and interest to first-lien creditors who have liens on all assets. PISHIT PATEL: Court Won't Appoint Receiver for Shepard Stake ------------------------------------------------------------ Arizona District Judge Neil V. Wake denied the request of Forrest Shepard to appoint a receiver for Dr. Bill N. Shepard's one-third interest in a partnership with Pishit S. Patel, owner of the remaining two-thirds. Dr. Shepard is the trustee of the Bill N. Shepard Trust and successor-in-interest to Dr. Bill N. Shepard's one-third interest in the partnership, which owns motels and resorts. Dr. Shepard acquired the interest after Dr. Shepard's death in 2008. Dr. Shepard had been embroiled in litigation with the Patels for breach of fiduciary duty, fraud and other allegations. In 2002, the Patels filed for Chapter 11 bankruptcy in Arizona; the then-pending litigation with Dr. Shepard was also removed to the bankruptcy court. The case is Forrest Shepard, as Trustee of the Bill N. Shepard Trust, Plaintiff, v. Pishit S. Patel, and Does 1-10, inclusive, Defendants, No. CV-11-08146-PCT-NVW (D. Ariz.). A copy of the Court's Nov. 26, 2012 Preliminary Injunction and Findings of Fact and Conclusions of Law is available at http://is.gd/IYDK4Sfrom Leagle.com. POSITIVEID CORP: Scott Silverman Discloses 6.7% Equity Stake ------------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Scott R. Silverman disclosed that, as of Nov. 6, 2012, he beneficially own 15,563,379 shares of common stock of PositiveID Corporation representing 6.75% of the shares outstanding. Mr. Silverman previously reported beneficial ownership of 18,924,771 common shares or a 10.6% equity stake as of Aug. 1, 2012. A copy of the amended filing is available at: http://is.gd/YoMsVg About PositiveID Delray Beach, Fla.-based PositiveID Corporation has historically developed, marketed and sold RFID systems used for the identification of people in the healthcare market. Beginning in early 2011, the Company has focused its strategy on the growth of its HealthID business, including the continued development of its GlucoChip, its Easy Check breath glucose detection device, its iglucose wireless communication system, and potential strategic acquisition opportunities of businesses that are complementary to its HealthID business. EisnerAmper LLP, in New York, expressed substantial doubt about PositiveID's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has a working capital deficiency and an accumulated deficit. "Additionally, the Company has incurred operating losses since its inception and expects operating losses to continue during 2012. The Company's balance sheet at Sept. 30, 2012, showed $2.69 million in total assets, $6.23 million in total liabilities, and a $3.54 million total stockholders' deficit. POWERMATE HOLDING: Court Rejects Contractor's Bonus Claim --------------------------------------------------------- Bankruptcy Judge Kevin Gross sustained the objection of the Post- Effective Date Committee in the Chapter 11 case of Powermate Holding Corp., to two claims filed by Richard S. Veys based upon a bonus program which the Debtors never initiated. Mr. Veys acted as Powermate's general counsel in an independent contractor capacity for several years prior to his employment. Powermate hired Mr. Veys as a full-time, staff employee at the end of 2007, at which time the possibility of a bankruptcy filing loomed. When Powermate filed for Chapter 11 bankruptcy, Powermate disclosed it had employed Veys for a period of roughly five months, from January 8, 2008 through May 30, 2008. Mr. Veys filed two Proofs of Claim: (1) Claim No. 649 for a pro rata share of an earned bonus for his pre-petition work in the amount of $11,834 and (2) Claim No. 620 for an administrative expense claim for a pro rata share of a bonus earned for his postpetition work in the amount of $11,373. "It is unfortunate that Powermate suffered financial distress that affected many employees, including Veys. The record is clear that Powermate was satisfied with Veys' performance. However, this performance was in the ordinary course of his employment with Powermate and, because he was not a part of KEIB, the Court has no power to permit a bonus be paid to Veys under a non-existent 2008 [Powermate Incentive Plan]," Judge Gross said. "The Court authorized one bonus plan, the KEIB. The 2008 PIP was never developed or implemented due to the company's financial distress. The Court will not retroactively create and implement a bonus plan scheme and, thus, second-guess the Debtor's business judgment in preparing and submitting bonus plans to the Court for approval." A copy of Judge Gross' Nov. 13, 2012 Memorandum Opinion is available at http://is.gd/iSF1pcfrom Leagle.com. About Powermate Holdings Headquartered in Aurora, Illinois, Powermate Corp. -- http://www.powermate.com/-- manufactures portable and home standby generators, air compressors, and pressure washers. Powermate Holding Corp. is the parent of Powermate Corp. In turn, Powermate Corp. owns 100% of Powermate International Inc. Powermate Corp. operates the company's assets located in the United States. Powermate International has sales employees in Hong Kong and the Philippines. Powermate Holding has no employees or operations. Sun Capital Partners bought 95% of Powermate in 2004. Powermate Holding has two other non-debtor subsidiaries, Powermate Canadian Corp., located in Canada and Powermate S. de R.L. de C.V., which is domiciled in Mexico. The three companies filed for chapter 11 protection on March 17, 2008 (Bankr. D. Del. Lead Case No.08-10498). Kenneth J. Enos, Esq. and Michael R. Nestor, Esq., at Young, Conaway, Stargatt & Taylor, represent the Debtors. The Official Committee of Unsecured Creditors, which has seven creditor members, is represented by Monika J. Machen, Esq., at Sonnenschein Nath Rosenthal LLP. On May 23, 2008, the Debtors' summary of schedules posted total assets of US$60,139,442 and total debts of US$85,700,759. POWERS LAKE: Clawback Suit Against Little Limestone Goes to Trial ----------------------------------------------------------------- Bankruptcy Judge Susan V. Kelley granted, in part, and denied, in part, the motion for summary judgment filed by the Chapter 7 trustee for Powers Lake Construction Co., in the trustee's lawsuit against Little Limestone, Inc. Steven McDonald, the duly appointed and acting Chapter 7 Trustee, sued Little Limestone to recover a preferential transfer in the amount of $10,919. Little Limestone raised various affirmative defenses, most particularly challenging the Trustee's claim that the Debtor had an interest in the transferred funds. Little Limestone claims the Transfer consisted of trust funds as defined by Wis. Stat. Sec. 779.02(5), and said the payment was made in the ordinary course of business because the payment was equal to the amount of invoices provided to the Debtor. The Trustee alleges the payments were not made in the ordinary course because three of the four invoices were paid late, and the dates of the payments were sporadic. Judge Kelley said the Trustee has carried his burden on proving the elements of a preference, but a genuine issue of material fact exists as to whether the Transfer was made in the ordinary course of business of the Debtor and Little Limestone or according to ordinary business terms. Judge Kelley will schedule a trial to determine whether the Transfer is excepted from the Trustee's recovery by the ordinary course of business defense. The case is, Steven R. McDonald, Trustee, Plaintiff, v. Little Limestone, Inc., Defendant, Adv. Proc. No. 12-2187 (Bankr. E.D. Wis.). A copy of the Court's Nov. 28, 2012 Memorandum Decision is available at http://is.gd/PdIarVfrom Leagle.com. Powers Lake Construction Co. Inc. was a sewer, water and site development company. Powers Lake, in Twin Lakes, Wisconsin, filed for Chapter 11 bankruptcy (Bankr. E.D. Wis. Case No. 10-23404) on March 10, 2010. Bankruptcy Judge Susan V. Kelley presides over the case. Jerome R. Kerkman, Esq., at Kerkman & Dunn, serves as the Debtor's counsel. The Debtor estimated $1 million to $10 million in both assets and debts. The petition was signed by Mark P. Karow, president of the Company. The Chapter 11 reorganization did not succeed, and on Dec. 16, 2010, the Debtor's case was converted to Chapter 7. POWERWAVE TECHNOLOGIES: Fails to Comply with Market Value Rule -------------------------------------------------------------- Powerwave Technologies, Inc., received a letter from The NASDAQ OMX Group on Nov. 27, 2012, notifying the Company that it fails to comply with NASDAQ Listing Rule 5450(b)(3)(C) because the market value of publicly held shares of the Company's common stock has fallen below the minimum $15,000,000 requirement for continued listing for a period of at least 30 consecutive business days. The NASDAQ letter has no immediate effect on the listing of the Company's common stock. In accordance with NASDAQ Listing Rule 5810(c)(3)(D), the Company has a period of 180 calendar days, or until May 28, 2013, to regain compliance with the minimum market value of publicly held shares rule. If at any time before May 28, 2013, the market value of publicly held shares of the Company's common stock is $15,000,000 for a minimum of 10 consecutive business days, the Company will regain compliance with the market value of publicly held shares rule, subject to NASDAQ's discretion to increase this time period. If compliance with the market value of publicly held shares rule cannot be demonstrated by May 28, 2013, NASDAQ will issue a Staff Delisting Determination Letter and the Company's common stock will be subject to delisting from The Nasdaq Global Select Market. In the event that the Company receives a NASDAQ Staff Delisting Determination Letter, NASDAQ rules permit the Company to appeal any delisting determination to a NASDAQ Hearings Panel. Alternatively, NASDAQ may permit the Company to transfer its common stock to The NASDAQ Capital Market if, at that time, it satisfies the requirements for initial inclusion set forth in NASDAQ Listing Rule 5505. If its application for transfer is approved, the Company would have an additional 180 calendar days to comply with NASDAQ Listing Rule 5450(b)(3)(C) in order to remain on The NASDAQ Capital Market. As previously reported, the Company received a letter from NASDAQ notifying the Company that it failed to comply with NASDAQ Listing Rule 5450(a)(1) because the bid price of the Company's common stock closed below $1.00 for 30 consecutive business days prior to June 15, 2012. The Company will continue to monitor both the bid price for its common stock and the market value of publicly held shares of its common stock, and will continue to assess the various alternatives available to it to allow it to regain compliance with the minimum bid price rule and the market value of publicly held shares rule. About Powerwave Technologies Powerwave Technologies, Inc., headquartered in Santa Ana, Calif., is a global supplier of end-to-end wireless solutions for wireless communications networks. The Company has historically sold the majority of its product solutions to the commercial wireless infrastructure industry. According to the quarterly report for the period ended July 1, 2012, the Company has experienced significant recurring net losses and operating cash flow deficits for the past four quarters. The Company's ability to continue as a going concern is dependent on many factors, including among others, its ability to raise additional funding, and its ability to successfully restructure operations to lower manufacturing costs and reduce operating expenses. The Company's balance sheet at Sept. 30, 2012, showed $213.45 million in total assets, $396.05 million in total liabilities and a $182.59 million total shareholders' deficit. R & R SULEIMAN: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: R & R Suleiman, LLC dba Chevron Express dba Shell Express 489 E. FM 1382 Cedar Hill, TX 75104 Bankruptcy Case No.: 12-37385 Chapter 11 Petition Date: November 27, 2012 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Barbara J. Houser Debtor's Counsel: Joyce W. Lindauer, Esq. 8140 Walnut Hill Ln., Suite 301 Dallas, TX 75231 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: courts@joycelindauer.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 Rabah Suleiman, president. RACING SERVICES: 8th Cir. Keeps Ruling on Insurance Policy ---------------------------------------------------------- A three-judge panel of the U.S. Bankruptcy Appellate Panel for the Eighth Circuit affirmed the bankruptcy court's summary judgment determination that the bankruptcy estate is entitled to the cash value proceeds of a life insurance policy Racing Services, Inc., had obtained for Susan Bala during her employment. Ms. Bala is a former employee and the sole stockholder of RSI Holdings, the sole stockholder of Racing Services, Inc. Racing Services is a Delaware corporation that provided licensed pari- mutuel services in North Dakota. In February 2005 Ms. Bala and Racing Services were convicted of, among other crimes, conducting and conspiring to conduct an illegal gambling business. Forfeiture judgments were entered against Ms. Bala and Racing Services in the amount of $19 million and $99 million, respectively. The Eighth Circuit Court of Appeals, however, reversed on all counts, concluding there was insufficient evidence of guilt. The United States Attorney for the District of North Dakota sought forfeiture of property in the criminal action. Mr. Kaler, as trustee of RSI's bankruptcy estate, also claimed an interest in the policy. The case before the BAP is, Kip M. Kaler, as Bankruptcy Trustee for Racing Services, Inc., Plaintiff-Appellee, v. Susan Bala, Defendant-Appellant, No. 12-6025 (8th Cir.). A copy of the Eighth Circuit BAP's Nov. 29, 2012 decision is http://is.gd/EmccEJfrom Leagle.com. Racing Services filed a voluntary Chapter 11 bankruptcy petition (Bankr. D. Del. 04-_____) on Feb. 3, 2004. On Feb. 12, 2004, the case was transferred to the U.S. Bankruptcy Court for the District of North Dakota. On June 15, 2004, RSI's bankruptcy case was converted from Chapter 11 to Chapter 7, and Kip Kaler was appointed as the Chapter 7 trustee. REPRISE THEATRE: Names Stephen Eich as Reorganization Consultant ---------------------------------------------------------------- David Ng, writing for the Los Angeles Times, reported that Reprise Theatre Company has hired Stephen Eich, an L.A. theater veteran, to help lead its efforts to reorganize during its self-imposed hiatus. According to the report, the company is hoping to relaunch sometime in the summer of 2013, said actor Jason Alexander, who is Reprise's artistic director. In February, Reprise announced that it was suspending its mainstage productions due to weak projected ticket sales and a dismal financial outlook. The company, founded in 1997, has produced revivals of popular and lesser-known stage musicals at UCLA's Freud Playhouse, the report notes. The report relates Mr. Eich has come on board as a consulting producer with the hope that he will join the company on a permanent basis, Mr. Alexander said. He replaces Joan Stein, who died earlier this year. According to the report, Mr. Eich served as managing director of the Geffen Playhouse from 2000 to 2008 and as executive director of the Pasadena Playhouse from 2009 to 2012. Before moving to L.A., he was the managing director of the Steppenwolf Theatre in Chicago. During his tenure at the Pasadena Playhouse, Mr. Eich helped the company to reorganize during its period in Chapter 11 bankruptcy. The report notes Mr. Eich served as managing director of the Geffen Playhouse from 2000 to 2008 and as executive director of the Pasadena Playhouse from 2009 to 2012. Before moving to L.A., he was the managing director of the Steppenwolf Theatre in Chicago. RESIDENTIAL CAPITAL: Homeowners Sue for Bogus Practices ------------------------------------------------------- Kevin J. Matthews and Jennifer Wilson filed lawsuits accusing debtors GMAC Mortgage Co., LLC, and Residential Capital, LLC, of unfair, deceptive and knowingly bogus or fraudulent practices against homeowners for the sake of expediency and profit by disregarding and ignoring the rule of law. In his complaint, Mr. Matthews raised claims alleging violations of the Maryland Consumer Protection Act, the Maryland Mortgage Fraud Protection Act, and the Maryland Consumer Debt Collection Act. Accordingly, Mr. Matthews seek that judgment be entered against GMAC for, among other things, compensatory economic and non-economic damages in the amount of no less than $500,000, treble damages in the amount of no less than $1,500,000, and his costs and attorney's fees. In her complaint, Ms. Wilson raised claims alleging breach of contract as to notice acceleration, breach of contract as to appointment of substitute trustee, breach of contract as to assignment of note and deed of trust, and violation of Unfair Deceptive Trade Practices Act. Accordingly, Ms. Wilson seeks actual, compensatory, consequential, general, restitution, punitive and treble damages. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Nationstar was to make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. would serve as stalking- horse bidder for the remaining portfolio of mortgages. The Court extended the general bar date for claims against the Debtors to Nov. 16, 2012, at 5:00 p.m., due to the events precipitated by hurricane Sandy. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Wagner Sues RFC to Enjoin Foreclosure ---------------------------------------------------------- George Van Wagner filed a complaint against Residential Funding Company, LLC; National City Mortgage; Golden & Amos PLLC; TIM Amos; GMAC Mortgage; Peter T. Demasters; Flaherty, Sesabaugh, Bonasso PLLC; Susan Romain; PNC Bank National Association; Seneca Trustees, Inc.; Jason Manning; and Troutman Sanders LLP, asking the Bankruptcy Court to enjoin a foreclosure proceeding on his property in West Virginia and to issue an injunction to stop the sale of the property. In light of any negligence found to be committed in relation to the foreclosure and sale, Mr. Van Wagner seeks for punitive and compensatory damages as well as any other equally effective relief deemed necessary and just. The Debtors and Seneca Trustees, Inc., filed separate motions to dismiss the complaint on the basis that the complaint fails to state a claim upon which relief may be granted and that the Bankruptcy Court lacks subject matter jurisdiction as Congress granted limited jurisdiction to the Bankruptcy Court for any matter that includes a cause of action relating to non-core matters. Seneca added that Mr. Wagner cannot pursue the suit because the suit is barred by res judicata and collateral estoppel. The adversary proceeding is Wagner v. Residential Funding Company, LLC, et al., Case No. 12-01913 (S.D.N.Y.). About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. Nationstar was to make the first bid for the mortgage-servicing business, while Berkshire Hathaway Inc. would serve as stalking- horse bidder for the remaining portfolio of mortgages. The Court extended the general bar date for claims against the Debtors to Nov. 16, 2012, at 5:00 p.m., due to the events precipitated by hurricane Sandy. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RIVERBED TECHNOLOGY: Moody's Assigns 'Ba2' CFR; Outlook Stable -------------------------------------------------------------- Moody's Investors Service assigned to Riverbed Technology, Inc. (Riverbed) a first-time Ba3 corporate family rating and a B1 probability of default rating. Moody's also assigned a Ba3 rating to the company's proposed $500 million of senior secured term loans. Riverbed will use the net proceeds of the new term loans, $363 million (excluding acquisition-related expenses) of cash on hand and issue approximately $152 million in stock to complete the planned purchase of OPNET Technologies (OPNET). The ratings outlook is stable. Ratings Rationale The Ba3 corporate family rating reflects Riverbed's leading market share and technology leadership in the WAN optimization market segment and its strong financial profile. Pro forma for the acquisition of OPNET, Riverbed will have moderate levels of debt leverage of approximately mid-3.0x (Total debt-to-EBITDA incorporating Moody's standard analytical adjustments, including equity-based compensation which raises leverage by about 1.2x). The rating assumes that Riverbed's revenue will grow at least in the low to mid teen percentages and that it will produce strong free cash flow of approximately 30% of its total debt over the next 12 to 18 months. Moody's expects management to pursue conservative financial policies and balance allocation of capital between shareholders and debt repayments, and manage total debt leverage in the 2.0x to 3.0x range. At the same time, the Ba3 rating considers Riverbed's execution risk of integrating its largest acquisition to date, its moderate scale, product concentration in the WAN Optimization market, and its intensely competitive market. The rating incorporates potential for acquisitions to broaden Riverbed's portfolio and maintain technology leadership. The acquisition of OPNET will moderately diversify Riverbed's revenues by expanding the company's addressable market into the adjacent Network Performance Management (NPM) and Application Performance Management (APM) segments. OPNET's well-regarded APM products will strengthen Riverbed's portfolio in a large and growing market. The acquisition will also lead to improved profitability over time as a result of operating efficiencies and the ability to leverage sales channels to expand the operating footprint of the combined companies. However, Riverbed's competitive risks will increase as the combined companies will compete against larger information technology vendors with diversified products, large scale and financial resources in the APM market segment. Importantly, the company will continue to derive the majority of its cash flow from its larger WAN optimization segment. The stable outlook is based on Moody's expectations that Riverbed will maintain very good levels of cash balances, which underpin its very good liquidity, and that Riverbed's free cash flow will increase driven by revenue growth. Moody's could raise Riverbed's rating if the company continues its strong organic revenue growth, its financial policies remain balanced between debt and equity constituents, and if Riverbed is able to sustain its market position in its core markets. The rating could be upgraded if Moody's believes that the company could sustain total debt-to-EBITDA leverage of less than 2.5x (Moody's adjusted) and free cash flow in excess of 20% of total debt, while preserving financial flexibility for share repurchases and acquisitions. Conversely, Moody's could downgrade the rating if Riverbed experiences execution challenges, significant shifts in competitive landscape, or technology risks escalate. The rating could be lowered if Riverbed's market share erodes in its core segments and the company is unable to sustain total debt-to-EBITDA leverage below 4.0x (Moody's adjusted) and free cash flow-to-debt of greater than 10%. Additionally, a transformative acquisition or deterioration in liquidity could pressure the rating downward. Moody's has assigned the following ratings: Issuer: Riverbed Technologies, Inc. Corporate Family Rating -- Ba3 Probability of Default Rating -- B1 Senior Secured Term Loan due 2019 -- Ba3, LGD 3, 32% Outlook - Stable Speculative Grade Liquidity -- SGL-1 Headquartered in San Francisco, CA, Riverbed is a leading provider of WAN optimization products and services. The company reported $802 million in revenue in the last twelve months (LTM) ended September 30. 2012. OPNET is based in Bethesda, MA and provides APM and NPM solutions. OPNET generated $182 million in revenue in the LTM September 2012 period. The principal methodology used in rating Riverbed Technology, Inc. was the Global Software 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. SAGE PRODUCTS: Moody's Assigns 'B2' CFR/PDR; Outlook Stable ----------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating and Probability of Default Rating to Sage Products Holdings III, LLC. Concurrently, Moody's assigned a B1 rating to the proposed senior secured first lien credit facility that includes a $380 million term loan and a $60 million revolver. Moody's also assigned a Caa1 to the proposed $200 million senior secured second lien term loan. Proceeds of the term loans, along with new equity, will be used to finance Madison Dearborn Partners' ("MDP") purchase of Sage. The outlook for the ratings is stable. Ratings Assigned to Sage Products Holdings III, LLC: Corporate Family Rating, B2 Probability of Default Rating, B2 $60 million senior secured first lien revolver expiring 2017, rated B1 (LGD3, 33%) $380 million senior secured first lien term loan due 2019, rated B1 (LGD3, 33%) $200 million senior secured second lien term loan due 2020, rated Caa1 (LGD5, 86%) This is the first time Moody's has rated Sage. The rating actions are subject to the conclusion of the transaction, as proposed, and Moody's review of final documentation. Ratings Rationale Sage's B2 Corporate Family Rating is constrained primarily by the company's small size, and limited product, geographic and customer diversity. The rating also reflects the very high financial leverage being assumed in connection with the leveraged buy-out transaction. While Sage has a good track record of product growth and innovation, hospital customers' desire to reduce costs may lead to substitution of lower cost products, potentially leading to pricing pressure or loss of market share for Sage. The rating is supported by Sage's leadership in its niche markets, which are focused on preventing hospital acquired conditions (HACs). Moody's believes Sage will benefit from increased regulatory emphasis on the prevention of HACs which will increase demand for Sage's products. The rating also reflects Moody's expectation that Sage will maintain strong profitability margins, generate consistent positive free cash flow, and maintain a good liquidity profile. The ratings are also supported by the meaningful equity contribution by Madison Dearborn and management. Moody's does not foresee an upgrade to the rating due to Sage's limited size, product concentration and high financial leverage. However, if over time Moody's expects Sage to maintain its leading market positions, grow revenues beyond $500 million, and sustain leverage below 4.0 times, Moody's could upgrade the ratings. Moody's could downgrade the ratings if new or existing competitors materially erode Sage's market position or pricing. Moody's could also downgrade the ratings if Sage fails to reduce leverage to a level approaching 5.5 times, or if free cash flow is negative. The principal methodology used in rating Sage was the Global Medical Products & Device 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. Sage Products, headquartered in Cary, IL, manufactures disposable medical supplies that are used to prevent hospital acquired conditions, including ventilator-associated pneumonia (VAP), surgical site infections (SSI), and catheter-associated urinary tract infections (CAUTI). The company sells its disposable products primarily to US hospitals and long term care facilities. Sage has been privately held by its founders since 1971 and is being sold to Madison Dearborn Partners. For the twelve months ended October 31, 2012, Sage generated sales of about $284 million. SAN BERNARDINO: Calpers Contends Pensions Can't Be Touched ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the California Public Employees' Retirement System is asking the bankruptcy court to force San Bernardino, California, to make payments to the state pension fund. Calpers, according to the report, contends the city violated both state law and the California Constitution by skipping payments. The pension fund says it isn't precluded by the so-called automatic stay from suing the city. The report relates that if Calpers succeeds in its arguments, the result could mean that city workers' pensions are beyond reach of the bankruptcy court in many if not most municipal bankruptcies. The report relates that Calpers contends a suit in state court to force pension payments is an enforcement of police or regulatory powers not halted automatically by the city's municipal bankruptcy filing. The bankruptcy court will hold a Dec. 21 hearing to decide whether Calpers is entitled to sue. In addition to compelling payment, Calpers says it has the right to ask for appointment of a receiver. Along with the so-called lift stay motion, the court's calendar on Dec. 21 will include a hearing or status conference on the question of whether the city is entitled to municipal bankruptcy. Calpers and the city workers' are challenging the city's right to be in Chapter 9. About San Bernardino San Bernardino, California, filed an emergency petition for municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 12-28006) on Aug. 1, 2012. San Bernardino, a city of about 210,000 residents roughly 65 miles (104 km) east of Los Angeles, estimated assets and debts of more than $1 billion in the bare-bones bankruptcy petition. The city council voted on July 10, 2012, to file for bankruptcy. The move lets San Bernardino bypass state-required mediation with creditors and proceed directly to U.S. Bankruptcy Court. The city is represented that Paul R. Glassman, Esq., at Stradling Yocca Carlson & Rauth. San Bernardino joins two other California cities in bankruptcy: Stockton, an agricultural center of 292,000 east of San Francisco, and Mammoth Lakes, a mountain resort town of 8,200 south of Yosemite National Park. SAND TECHNOLOGY: Reports C$2.8 Million Net Income in Fiscal 2012 ---------------------------------------------------------------- SAND Technology Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 20-F disclosing net income and comprehensive income of C$2.80 million on C$2.50 million of revenue for the year ended July 31, 2012, compared with a net loss and comprehensive loss of C$2.20 million on C$4.63 million of revenue during the prior year. The Company reported a net loss and comprehensive loss of C$2.11 million on C$6.87 million of revenue for the fiscal year ended July 31, 2011, compared with a net loss and comprehensive loss of $745,549 on $6.56 million of revenue during the prior year. The Company's balance sheet at July 31, 2012, showed C$3.21 million in total assets, C$3.14 million in total liabilities and C$64,031 in shareholders' equity. "With the exception of the gain in the amount $8,571,967 realized from the sale of its SAP Information Lifecycle Management (ILM) Product Line, the Company has incurred operating losses in the past years and has accumulated a deficit of $42,130,308 as at July 31, 2012. The Company has also generated negative cash flows from operations. Historically, the Company financed its operating and capital requirements mainly through issuances of debt and equity. The Company's continuation as a going concern is dependent upon, amongst other things, attaining a satisfactory revenue level, the support of its customers, a return to profitable operations and the generation of cash from operations, the ability to secure new financing arrangements and new capital. These matters are dependent on a number of items outside of the Company's control and there exists material uncertainties that may cast significant doubt about the Company's ability to continue as a going concern." A copy of the Form 20-F is available for free at: http://is.gd/dgyjae About SAND Technology Westmount, Quebec-based SAND Technology Inc. (OTC BB: SNDTF) -- http://www.sand.com/-- provides Data Management Software and Best Practices for storing, accessing, and analyzing large amounts of data on-demand while lowering TCO, leveraging existing infrastructure and improving operational performance. SAND/DNA solutions include CRM analytics, and specialized applications for government, healthcare, financial services, telecommunications, retail, transportation, and other business sectors. SAND Technology has offices in the United States, Canada, the United Kingdom and Central Europe. SATCON TECHNOLOGY: Creditors Claim to Find Defects in Liens ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports the Satcon Technology Corp. creditors' committee is seeking authority to sue secured lenders over alleged defects in security interests. Satcon is disabled from probing defects in secured lenders' claims as a result of the loan agreement funding the Chapter 11 effort. According to the report, the committee says the loan from Silicon Valley Bank was paid down about $20 million before bankruptcy. Some of the funds for the paydown may have come from property not part of the bank's collateral, thus making the payment susceptible to attack as preference or fraudulent transfer. The report relates that as to both the second-lien lender and the bank, the committee contends the creditors don't have enforceable liens on all assets. There will be a Dec. 27 hearing in U.S. Bankruptcy Court in Delaware for approval to sue. 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. SB PARTNERS: SRE Clearing Owns 37% of Units Outstanding ------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, SRE Clearing Services Corporation disclosed that, as of Nov. 12, 2012, it beneficially owns 2,868.5 Units of Limited Partnership Interest of SB Partners representing 37% of the Units outstanding. SRE Clearing previously reported beneficial ownership of 2791.0 Units or 36% as of April 30, 2012. A copy of the amended filing is available at http://is.gd/0e8D9c About SB Partners Milford, Conn.-based SB Partners is a New York limited partnership engaged in acquiring, operating and holding for investment a varying portfolio of real estate interests. As of June 30, 2010, the partnership owns an industrial flex property in Maple Grove, Minnesota and warehouse distribution centers in Lino Lakes, Minnesota and Naperville, Illinois. The Company has a 30% interest in Sentinel Omaha, LLC. Sentinel Omaha is a real estate investment company which currently owns 24 multifamily properties and 1 industrial property in 17 markets. Sentinel Omaha is an affiliate of the partnership's general partner. The Company's balance sheet at Sept. 30, 2012, showed $17.75 million in total assets, $21.30 million in total liabilities and a $3.55 million total partners' deficit. SEARS HOLDINGS: Board OKs $1 Million Cash Awards to Executives -------------------------------------------------------------- Sears Holdings Corporation distributed common shares of Sears Canada Inc. on a pro rata basis to Sears Holdings' stockholders of record as of the close of business on Nov. 1, 2012. However, as previously disclosed, holders of Sears Holdings' shares of restricted stock issued pursuant to the Sears Holdings Corporation 2006 Stock Plan that were unvested as of the Record Date did not receive common shares of Sears Canada with respect to their Unvested Shares. On Nov. 30, 2012, the Compensation Committee of the Board of Directors of Sears Holdings approved for each holder of Unvested Shares a cash award in lieu of any and all rights that holder may have had to receive common shares of Sears Canada with respect to their Unvested Shares, subject to the same vesting requirements and other terms for the Unvested Shares to which the cash award is attributable. The cash awards represent the right to receive on the applicable vesting date a cash payment from Sears Holdings equal to the value of the common shares of Sears Canada that would have been distributed to the holder of Unvested Shares, calculated on the basis of the volume-weighted average price per common share of Sears Canada on the Toronto Stock Exchange for the 10 trading- day period immediately following the Distribution Date, converted into United States dollars. The following shows the aggregate amount of the cash awards, subject to vesting, received by each of the following executive officers who were named in Sears Holdings' 2012 proxy statement: Name Cash Award ------------------- ---------- Louis J. D'Ambrosio CEO and President $280,538 Ronald D. Boire EVP, CMO and Pres., Sears Full Line Stores & Kmart Formats $364,130 Robert A. Schriesheim EVP and CFO $288,143 Dane A. Drobny SVP, General Counsel, & Corp. Secretary $40,282 William K. Phelan SVP, Finance $16,215 About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. The Company's balance sheet at Oct. 27, 2012, showed $21.80 billion in total assets, $17.90 billion in total liabilities and $3.90 billion in total equity. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SEARS HOLDINGS: Edward Lampert Discloses 56.2% Equity Stake ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Edward S. Lampert and his affiliates disclosed that, as of Nov. 28, 2012, they beneficially own 59,804,123 common shares of Sears Holdings Corporation representing 56.2% of the shares outstanding. A copy of the filing is available for free at http://is.gd/mnfPX6 About Sears Hoffman Estates, Illinois-based Sears Holdings Corporation (Nasdaq: SHLD) -- http://www.searsholdings.com/-- is the nation's fourth largest broadline retailer with more than 4,000 full-line and specialty retail stores in the United States and Canada. Sears Holdings operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation. Sears Holdings also owns a 94% stake in Sears Canada and an 80.1% stake in Orchard Supply Hardware. Key proprietary brands include Kenmore, Craftsman and DieHard, and a broad apparel offering, including such well-known labels as Lands' End, Jaclyn Smith and Joe Boxer, as well as the Apostrophe and Covington brands. It also has the Country Living collection, which is offered by Sears and Kmart. Kmart Corporation and 37 of its U.S. subsidiaries filed voluntary Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 02-02474) on Jan. 22, 2002. Kmart emerged from chapter 11 protection on May 6, 2003, pursuant to the terms of an Amended Joint Plan of Reorganization. John Wm. "Jack" Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, represented the retailer in its restructuring efforts. The Company's balance sheet showed $16,287,000,000 in assets and $10,348,000,000 in debts when it sought chapter 11 protection. Kmart bought Sears, Roebuck & Co., for $11 billion to create the third-largest U.S. retailer, behind Wal-Mart and Target, and generate $55 billion in annual revenues. Kmart completed its merger with Sears on March 24, 2005. The Company's balance sheet at Oct. 27, 2012, showed $21.80 billion in total assets, $17.90 billion in total liabilities and $3.90 billion in total equity. Negative Outlook Standard & Poor's Ratings Services in January 2012 lowered its corporate credit rating on Hoffman Estates, Ill.-based Sears Holdings Corp. to 'CCC+' from 'B'. "We removed the rating from CreditWatch, where we had placed it with negative implications on Dec. 28, 2011. We are also lowering the short-term and commercial paper rating to 'C' from 'B-2'. The rating outlook is negative," S&P said. "The corporate credit rating reflects our projection that Sears' EBITDA will be negative in 2012, given our expectations for continued sales and margin pressure," said Standard & Poor's credit analyst Ana Lai. She added, "We further expect that liquidity could be constrained in 2013 absent a turnaround or substantial asset sales to fund operating losses." Moody's Investors Service in January 2012 lowered Sears Holdings Family and Probability of Default Ratings to B3 from B1. The outlook remains negative. At the same time Moody's affirmed Sears' Speculative Grade Liquidity Rating at SGL-2. The rating action reflects Moody's expectations that Sears will report a significant operating loss in fiscal 2011. Moody's added that the rating action also reflects the company's persistent negative trends in sales, which continue to significantly underperform peers. SECUREALERT INC: Appoints Guy Dubois as Director ------------------------------------------------ The Board of Directors of SecureAlert, Inc., appointed Guy Dubois as a director on Nov. 21, 2012, and appointed to the Oversight Committee. Mr. Dubois is a director at Singapore based Tetra House Pte. Ltd., that provides consulting and advisory services worldwide. Mr. Dubois was Chief Executive Officer of gategroup AG from September 2008 until April 2011. He previously held the positions of President, Executive Vice President Finance and Administration, Chief Administrative Officer and Chief Financial Officer of Gate Gourmet Holding LLC. He has served as a manager of the Board of Managers of Gate Gourmet Holding LLC since March 2007 and as a member of the Board of gategroup AG from February 2008 until April 2011. Prior to joining Gate Gourmet in July 2003, Mr. Dubois was Vice President Finance, Administration, Demand and Supply Chain for Roche's Vitamins Inc. in New Jersey from 2000 to 2003. Prior to which he was Area Manager, Finance and Administration for Roche's Vitamins Asia-Pacific Pte. Ltd. from 1997 to 1999 and Finance Manager from 1995 to 1997 in Singapore. Mr. Dubois worked in corporate finance for Hoffman-La Roche in 1994. Mr. Dubois also served on the European Organization for Nuclear Research (CERN) team in Switzerland in various roles, including Treasurer and Chief Accountant, Manager General Accounting and Financial Accountant from 1989 to 1994. He also worked with IBM in Sweden from 1984 to 1988 as Product Support Specialist for Financial Applications. He attended the Limburg Business School in Diepenbeek, Belgium, and has a degree in Financial Science and Accountancy. Mr. Dubois is a Belgian citizen. The Board believes that Mr. Dubois' financial and operational experience will be a tremendous asset to the Company as a member of the Board of Directors. Mr. Dubois' appointment to the Board of Directors is part of a potential financing arrangement with Sapinda Asia Ltd. whereby Sapinda will loan funds to the Company. A requirement of the proposed financing arrangement with Sapinda is the appointment of a representative of Tetra House Pte. Ltd., which is owned by Mr. Dubois. An executive of gategroup holdings AG, an airline catering company headquartered in Switzerland, was convicted in a Danish court in September 2012 for fraud and embezzlement involving company assets. Mr. Dubois who was Chief Executive Officer of the company at the time the executive committed the acts leading to her conviction, voluntarily resigned from gategroup holdings AG in 2011. The Zurich State Prosecutor initiated an investigation in 2011 focused on whether other individuals, including Mr. Dubois were aware of or benefitted personally from the fraud and embezzlement that occurred. Mr. Dubois, who has indicated he was unaware of any of these activities at the time they were being committed, has been cooperating with that investigation. About SecureAlert Inc. Sandy, Utah-based SecureAlert, Inc. (OTC BB: SCRA) -- http://www.securealert.com/-- is an international provider of electronic monitoring systems, case management and services widely utilized by more than 650 law enforcement agencies worldwide. In the auditors' report accompanying the consolidated financial statements for the fiscal year ended Sept. 30, 2011, the Company's independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, noted that the Company has incurred losses, negative cash flows from operating activities and has an accumulated deficit. The Company's balance sheet at June 30, 2012, showed $22.73 million in total assets, $9.51 million in total liabilities, and $13.21 million in total equity. SOUTH FRANKLIN CIRCLE: Employs Vorys as Tax Compliance Counsel -------------------------------------------------------------- South Franklin Circle is seeking permission to employ Vorys, Sater, Seymour and Pease, LLP as special counsel to assist with complying with state and federal laws with respect to the issuance of tax-exempt bonds during the chapter 11 case. The Debtor said Vorys has commenced immediate and comprehensive services in the chapter 11 case on short notice. The professionals at Vorys presently expected to have substantial involvement in providing services to the Debtor are: Professional Position Hourly Rate ------------ -------- ----------- Aaron Berke Partner $335 Thomas Grace Partner $450 Blake Beachler Associate $240 The Debtor is seeking to employ Vorys on a general retainer basis. Vorys attests it has no connection with the Debtor, its creditors, the United States Trustee, any person employed in the Office of the United States Trustee, or any other party with an interest in the chapter 11 case or its respective attorneys and accountants. About South Franklin Circle South Franklin Circle, a nonprofit continuing-care retirement community, filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 12-17804) with a prepackaged Chapter 11 plan. The Debtor owns a 239-unit retirement community in Bainbridge Township, Ohio. About 53% of the 199 independent-living units and more than half of the 40 assisted-living units are occupied. Bankruptcy Judge Pat E. Morgenstern-Clarren oversees the case. The Debtor has tapped McDonald Hopkins LLC as bankruptcy counsel, Schneider, Smeltz, Ranney & LaFond, P.L.L., as special counsel, Aurora Management Partners, Inc., for staffing services and the firm's Jay P. Auwerter as interim restructuring officer. The Debtor disclosed assets of $167.2 million and debt of $166.3 million. KeyBank, the DIP agent, is represented in the case by Alan R. Lepene, Esq., Curtis L. Tuggle, Esq., and Scott B. Lepene, Esq., at Thompson Hine LLP. SOUTH FRANKLIN CIRCLE: Hiring North Shores as Bond Consultant ------------------------------------------------------------- South Franklin Circle sought and obtained Bankruptcy Court permission to employ North Shores Consulting Inc. as bond consultant. Specifically, the Debtor needs North Shores to: a. assist in managing the South Franklin Circle Series 2007 Bonds; b. assist in the creation of the new South Franklin Circle Series 2012 Bonds; c. assist in the creation of the new South Franklin Circle Notes; and d. provide other services. The Debtor said that, due to breadth and scope of its operations, it required the services of an experienced financial consultant to assist with the Debtor's tax-exempt bonds. The Debtor hired North Shores as its bond consultant because it has extensive experience and knowledge in the field and capabilities to provide the Debtor with advisory services as they relate to the management of outstanding bonds and the ramifications of creating new tax-exempt bonds. Not unlike some bond consultants, North Shores routinely provides strategic and financial consulting for continuing care retirement communities in connection with strategic planning, new financings, and financing restructuring. North Shores' president, Thomas L. Brod, is expected to serve the Debtor. Mr. Brod will charge a standard hourly rate of $350 per hour. In connection with the prepetition retention of the Debtor, North Shores received $30,000 as a retainer. Estimated fees and expenses of $7,962.50 were incurred by North Shores for services provided to the Debtor through the Petition Date. North Shores applied the retainer to the Prepetition Fees and Expenses. As of the Petition Date, North Shores is holding a retainer in the amount of $22,037.50 for services to be rendered in the Debtor's chapter 11 case and as an advance against expenses incurred. About South Franklin Circle South Franklin Circle, a nonprofit continuing-care retirement community, filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 12-17804) with a prepackaged Chapter 11 plan. The Debtor owns a 239-unit retirement community in Bainbridge Township, Ohio. About 53% of the 199 independent-living units and more than half of the 40 assisted-living units are occupied. Bankruptcy Judge Pat E. Morgenstern-Clarren oversees the case. The Debtor has tapped McDonald Hopkins LLC as bankruptcy counsel, Schneider, Smeltz, Ranney & LaFond, P.L.L., as special counsel, Aurora Management Partners, Inc., for staffing services and the firm's Jay P. Auwerter as interim restructuring officer. The Debtor disclosed assets of $167.2 million and debt of $166.3 million. KeyBank, the DIP agent, is represented in the case by Alan R. Lepene, Esq., Curtis L. Tuggle, Esq., and Scott B. Lepene, Esq., at Thompson Hine LLP. STAMP FARMS: Files for Chapter 11 in Michigan ---------------------------------------------- Stamp Farms, L.L.C., and three affiliates sought Chapter 11 protection (Bankr. W.D. Mich. Lead Case No. 12-10410) on Nov. 30, 2012, in Grand Rapids, Michigan. Stamp Farms began in 1968 with its purchase of 168 acres of farmland in Decatur, Michigan. The family was also heavily involved in the swine industry, operating a 500 sow swine operation until 1995. In 1997, Mike Stamp took over operations of Stamp Farms' 1500 acres and has grown the farm operation to cover 20,000+ acres across six southwestern Michigan counties. Stamp Farms estimated at least $10 million in assets and at least $50 million in liabilities in its bare-bones petition. The Debtor has retained the law firm of Varnum LLP as counsel. Mr. Stamp also filed a Chapter 11 petition (Case No. 12-10430). STUMBERG LANE: Case Summary & 4 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Stumberg Lane Development LLC aka Stumberg Land Development LLC 5935 Hickory Ridge Blvd. Baton Rouge, LA 70817 Bankruptcy Case No.: 12-11717 Chapter 11 Petition Date: November 27, 2012 Court: United States Bankruptcy Court Middle District of Louisiana (Baton Rouge) Judge: Douglas D. Dodd Debtor's Counsel: Derren S. Johnson, Esq. DERREN S. JOHNSON & ASSOCIATES, APLC 1200 South Acadian Thruway Baton Rouge, LA 70806 Tel: (225) 389-9616 Fax: (225) 383-4998 E-mail: derrenjohnson@aol.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its four unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/lamb12-11717.pdf The petition was signed by William Mazilly, managing member. SUNDALE LTD: Loses 11th Cir. Appeal on FACE Dispute --------------------------------------------------- Sundale, LTD, and Kendall Hotel and Suites, LLC, appeal from the district court's judgment upholding the bankruptcy court's finding of fact and conclusions of law in support of a final judgment in favor of Florida Associates Capital Enterprises, LLC. In Sundale's bankruptcy proceedings, FACE sought a declaratory judgment regarding the extent, validity and priority of the claims it had that stemmed from secured loans it had made to Sundale; in response, Sundale asserted various affirmative defenses and filed counterclaims against FACE, including a claim of recoupment of more than $3 million in payments Sundale had made to FACE concerning the secured loans. On appeal, Sundale argues that: (1) the district court erred in concluding that the bankruptcy court had jurisdiction over Sundale's counterclaims; (2) the district court's review of the bankruptcy proceedings did not cure the bankruptcy court's unconstitutional exercise of jurisdiction; and (3) the bankruptcy court misapplied Florida law in ruling on the merits. A three-judge panel of the U.S. Court of Appeals for the Eleventh Circuit, however, rejected Sundale's arguments and affirmed the lower court rulings in a Nov. 29, 2012 decision available at http://is.gd/GPxRW4from Leagle.com. Between July 30, 1999, and March 20, 2000, FACE (and/or its members) loaned Sundale a total of $7,300,000, through various promissory notes, personal guarantees, and mortgage and security agreements. On Sept. 7, 2001, Sundale closed a $12,000,000 loan with Ocean Bank to develop a tract of land in Miami, Florida. The terms of the agreement provided for FACE's loans to be reduced to $3,250,000, and for FACE to subordinate its lien to the lien of Ocean Bank with respect to the remaining indebtedness. Sundale was obligated to make quarterly interest payments until Nov. 29, 2002, and then monthly payments thereafter. Sundale made all interest payments due to FACE through May 2005. On Dec. 11, 2007, both Ocean Bank and FACE sent default notices to Sundale. The next day, Sundale filed for Chapter 11 bankruptcy protection, and KHS did the same on Jan. 30, 2008. On May 1, 2008, FACE filed a two-count complaint seeking a determination of the extent, validity, and priority of its asserted lien on the Sundale Property. The appellate case is, SUNDALE, LTD., KENDALL HOTEL AND SUITES, LTD., Plaintiffs-Appellants, v. FLORIDA ASSOCIATES CAPITAL ENTERPRISES, LLC, Defendant-Appellee, No. 12-11450, Non-Argument Calendar (11th Cir.). Sundale, Ltd., an operative builder, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 07-21016) on Dec. 12, 2007. Peter D. Russin, Esq., at Meland, Russin & Budwick PA, represented the Debtor. Sundale estimated $50 million and $100 million in assets, and $10 million and $50 million in debts. Kendall Hotel and Suites filed its Chapter 11 petition (Bankr. S.D. Fla. Case No. 08-11050) on Jan. 30, 2008. The two cases were administratively consolidated. In March 2008, lender FACE succeeded in having Sundale's case declared as Single Asset Real Estate Case. In January 2009, the Court denied the request of FACE and the "Codina Parties" for appointment of a Chapter 11 Trustee or in the alternative an examiner. On Dec. 5, 2008, the Debtors file their Plan and Disclosure Statement. On May 26, 2009, the Court confirmed a second amended version of the Chapter 11 Plan. The Confirmation Order amends the previously proposed treatment of the FACE claim by requiring interest and attorneys fees to be amortized and paid during the term of the plan. The Confirmation Order also requires the Debtors to pay $2.5 million into a reserve account to cover shortfalls during the 36 month plan period. On Aug. 2, 2010, the reorganized Debtor sought to modify the plan and borrow $2.0 million to continue operations. The motion sought authority to grant the new lender a senior lien which would prime the existing first and second liens of Ocean Bank and FACE. The Court denied the request and set a hearing to consider conversion of the case to Chapter 7. On Nov. 12, 2010, the Court entered its final judgment in favor of FACE and against Sundale in an adversary commenced by FACE in the amount of $6,394,595 retaining jurisdiction to determine fees and costs under Sec. 506(b). The judgment also ruled in favor of FACE and against the Debtors on all counts of the Debtors' counterclaim. The Debtors later defaulted under the confirmed plan. On Dec. 28, 2010, FACE filed a foreclosure case against the reorganized Debtor in Circuit Court, Miami-Dade County, Case No. 10-64400-CA-15. The Debtors appealed the judgment in February 2011. The District Court affirmed the judgment. On July 14, 2011, the Court converted the Debtors' cases to cases under Chapter 7. On Oct. 18, 2012, the reorganized debtor, now known as Sundale Consolidated, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 123-4958). Judge Laurel M. Isicoff oversees the case. The law firm of Demetrios C. Kirkiles represents the Debtor. In its petition, the Debtor estimated under $50,000 in assets and $10 million and $50 million in debts. At a hearing on Nov. 2, 2012, the Debtor announced its intention to seek approval of a sale which the Debtor claims will yield sufficient proceeds to pay Samjaz Welleby LLC and FACE in full. SUNDALE LTD: Mortgage Holder Awarded $3.2-Mil. in Fees ------------------------------------------------------ Bankruptcy Judge Robert A. Mark awarded Florida Associates Capital Enterprises $3,200,000 pursuant to 11 U.S.C. Sec. 506(b) for fees and costs incurred since 2008 in state foreclosure and appellate proceedings involving debtors Sundale, Ltd., and Kendall Hotel and Suites, LLC. FACE holds a mortgage on the Debtors' property. FACE's invoices include fees and costs incurred over the nearly four-year period starting from the inception of the bankruptcy case in December 2007 through Oct. 31, 2011. The total fees sought are $3,215,752 and the total costs requested are $766,424 for a total claim under 11 U.S.C. Sec. 506(b) of $3,982,176. FACE later agreed to voluntarily reduce its fee claim by $81,860 and its cost request by $10,000, for a total reduced Sec. 506 claim of $3,890,316. Judge Mark reduced the total requested fee and cost award (after the voluntary $91,860 reduction) by $690,316, resulting in a total award of fees and costs of $3,200,000. Sundale, Ltd., an operative builder, filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 07-21016) on Dec. 12, 2007. Peter D. Russin, Esq., at Meland, Russin & Budwick PA, represented the Debtor. Sundale estimated $50 million and $100 million in assets, and $10 million and $50 million in debts. Kendall Hotel and Suites filed its Chapter 11 petition (Bankr. S.D. Fla. Case No. 08-11050) on Jan. 30, 2008. The two cases were administratively consolidated. In March 2008, FACE succeeded in having Sundale's case declared as Single Asset Real Estate Case. In January 2009, the Court denied the request of FACE and the "Codina Parties" for appointment of a Chapter 11 Trustee or in the alternative an examiner. On Dec. 5, 2008, the Debtors file their Plan and Disclosure Statement. On May 26, 2009, the Court confirmed a second amended version of the Chapter 11 Plan. The Confirmation Order amends the previously proposed treatment of the FACE claim by requiring interest and attorneys fees to be amortized and paid during the term of the plan. The Confirmation Order also requires the Debtors to pay $2.5 million into a reserve account to cover shortfalls during the 36 month plan period. On Aug. 2, 2010, the reorganized Debtor sought to modify the plan and borrow $2.0 million to continue operations. The motion sought authority to grant the new lender a senior lien which would prime the existing first and second liens of Ocean Bank and FACE. The Court denied the request and set a hearing to consider conversion of the case to Chapter 7. On Nov. 12, 2010, the Court entered its final judgment in favor of FACE and against Sundale in an adversary commenced by FACE in the amount of $6,394,595 retaining jurisdiction to determine fees and costs under Sec. 506(b). The judgment also ruled in favor of FACE and against the Debtors on all counts of the Debtors' counterclaim. The Debtors later defaulted under the confirmed plan. On Dec. 28, 2010, FACE filed a foreclosure case against the reorganized Debtor in Circuit Court, Miami-Dade County, Case No. 10-64400-CA-15. The Debtors appealed the judgment in February 2011. The District Court affirmed the judgment. On July 14, 2011, the Court converted the Debtors' cases to cases under Chapter 7. Judge Mark's Order provides that the Fee and Cost Award may be enforced against the property securing FACE's loan and against each borrower in any court of competent jurisdiction, including, without limitation, the Circuit Court, in and for Miami-Dade County, Florida. The amount will also be allowed as part of FACE's secured claim in the Chapter 11 case of Sundale Consolidated, Case No. 12-34958, presently pending in the Bankruptcy Court. "These Chapter 11 cases included more litigation than most cases ten or twenty times their size. It is easy for the Debtors to look at the extraordinarily large fee request and cry foul. But, after a thorough review of the record, and for the reasons discussed in this Order, under the unusual and unfortunate circumstances presented here, a substantial portion of the fees and costs requested in the Fee Motion are reasonable and allowable under FACE's loan documents and Sec. 506(b) of the Bankruptcy Code," Judge Mark noted. According to the judge, the fees and costs are high, but they arose from litigation that was largely caused by the actions of the Debtors and Philip Scutieri, the Debtors' president. On Oct. 18, 2012, the reorganized debtor, now known as Sundale Consolidated, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 123-4958). Judge Laurel M. Isicoff oversees the case. The Law firm of Demetrios C. Kirkiles represents the Debtor. In its petition, the Debtor estimated under $50,000 in assets and $10 million and $50 million in debts. At a hearing on Nov. 2, 2012, the Debtor announced its intention to seek approval of a sale which the Debtor claims will yield sufficient proceeds to pay Samjaz Welleby LLC and FACE in full. "Time will tell," Judge Mark said. A copy of Judge Mark's Nov. 9, 2012 Order is available at http://is.gd/eQhfNwfrom Leagle.com. SUNDALE LTD: Final Orders Permissible on Recoupment Claims ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Supreme Court held last year that a bankruptcy court cannot make a final judgment on a state law-based claim unless it would be fully resolved by adjudication of the creditor's claim against the bankrupt. According to the report, the U.S. Court of Appeals in Atlanta ruled on Nov. 29 that a recoupment claim by a trustee was fully resolved in determining the extent, priority and validity of the lender's claim and thus was within the competence of the bankruptcy judge to enter a final judgment. The appeals court explained that recoupment under Florida law is a "purely defensive matter springing from the same transaction as the plaintiff's cause of action." The case is Sundale Ltd. v. Florida Associates Capital Enterprises LLC (In re Sundale Ltd.), 12-11450, U.S. Court of Appeals for the Eleventh Circuit (Atlanta). Headquartered in Miami, Florida, Sundale Ltd. fka Sundale Associates Ltd. is an operative builder. The Company filed for Chapter 11 protection on December 12, 2007 (S.D. Fla. Case No. 07-21016). Peter D. Russin, Esq., at Meland, Russin & Budwick PA, represented the Debtor. When the Debtor filed for protection from its creditors, it estimated assets between $50 million and $100 million and debts between $10 million and $50 million. SUNRISE REAL ESTATE: Incurs $1.4 Million Net Loss in 3rd Quarter ---------------------------------------------------------------- Sunrise Real Estate Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of US$1.37 million on US$1.68 million of net revenues for the three months ending Sept. 30, 2012, compared with a net loss of US$706,124 on US$1.83 million of net revenues for the same period during the preceding year. For the nine months ending Sept. 30, 2012, the Company reported a net loss of US$2.87 million on US$5.24 million of net revenues, compared with a net loss of US$2.04 million on US$6.55 million of net revenues for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed US$39.87 million in total assets, US$34.44 million in total liabilities and US$5.43 million in total shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/54Z2b0 About Sunrise Real Estate Headquartered in Shanghai, the People's Republic of China, Sunrise Real Estate Group, Inc. was initially incorporated in Texas on Oct. 10, 1996, under the name of Parallax Entertainment, Inc. On Dec. 12, 2003, Parallax changed its name to Sunrise Real Estate Development Group, Inc. On April 25, 2006, Sunrise Estate Development Group, Inc., filed Articles of Amendment with the Texas Secretary of State, changing the name of Sunrise Real Estate Development Group, Inc. to Sunrise Real Estate Group, Inc., effective from May 23, 2006. The Company and its subsidiaries are engaged in the property brokerage services, real estate marketing services, property leasing services and property management services in China. In its report accompanying the 2011 financial statements, Kenne Ruan, CPA, P.C., in Woodbridge. CT, USA, noted that the Company has significant accumulated losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. The Company incurred a net loss of US$1.41 million in 2011 and a net loss of US$25,487 in 2010. SUPERIOR AIR: Court Dismisses Lycoming, Textron Lawsuit ------------------------------------------------------- Superior Air Parts, Inc., won dismissal of a second amended complaint filed by Lycoming Engines, a division of Avco Corporation, and Avco's parent, Textron Innovations, Inc. The lawsuit, filed July 11, 2012, alleges that Superior got the knowledge to make its parts by illicitly obtaining trade secrets by, among other things, improperly using licensed data to create non-licensed products and improperly getting information from Lycoming's vendors in violation of agreements reached in 1981 and 1999. In dismissing the lawsuit, Bankruptcy Judge Barbara J. Houser ruled that the Plaintiffs' claims are barred by confirmation of the Plan and Superior's discharge in bankruptcy. Superior manufactures after-market replacement parts for certain aircraft engines, including engines originally manufactured by Lycoming. Superior does not design its own products; it designs its own version of parts originally manufactured by others, including Lycoming. Textron holds rights to certain trade secrets and intellectual property related to Lycoming engines and licenses them to Lycoming. Lycoming develops, licenses and owns technical data, specifications, and blueprints that Lycoming alleges contain trade secrets not known outside its business. The case is, LYCOMING ENGINES, A Division of Avco Corp., and TEXTRON INNOVATIONS, INC., Plaintiff, v. SUPERIOR AIR PARTS, INC., Defendant, Adv. Pro. No. 12-3035 (Bankr. N.D. Tex.). A copy of the Court's Nov. 28, 2012 Memorandum Opinion and Order is available http://is.gd/64ZE6Ifrom Leagle.com. About Superior Air Superior Air Parts, Inc. is a Texas corporation with its offices and operating facilities located in Coppell, Dallas County, Texas. It was founded in 1967 in order to supply the United States Air Force and commercial customers with replacement parts for piston powered aircraft engines. Superior is one of the largest suppliers of parts under Federal Aviation Administration's Parts Manufacturer Approval regulations for piston engines. It provides Superior-brand parts for engines created by two primary original equipment manufacturers, the Continental division of Teledyne, Inc. and the Lycoming division of Textron Inc. Its customers are companies that perform maintenance and overhaul work in the general aviation industry. Superior is also an OEM for the 180- horsepower Vantage Engine and owner-built XM-360 engines for various aircraft companies. In 2006, 100% of the ownership interests of Superior was acquired by Thielert, AG, a German corporation based out of Hamburg, Germany. Also in 2006, Thielert purchased the debt of Superior's senior secured lender and subordinated lenders secured by substantially all of the Debtor's assets. Superior Air Parts filed for Chapter 11 on Dec. 31, 2008 (Bankr. , N.D. Tex., Case No. 08-36705). Judge Barbara J. Houser handles the case. The Debtor's counsel is Stephen A. Roberts, Esq., at Strasburger & Price, LLP, in Austin Texas. In its bankruptcy petition, the Debtor estimated assets and debts of $10 million to $50 million each. The Debtor's Third Amended Plan of Reorganization, filed jointly by the Debtor and the Official Committee of Unsecured Creditors, was confirmed by Order entered on Aug. 27, 2009. Essentially, creditors were paid, the stock of the reorganized Superior was sold to the Brantly Group, and Superior's pre-bankruptcy equity interests were cancelled. The Plan went effective on Sept. 28, 2009. After a series of claims objections and professional fee applications were determined, Superior filed its application for a final decree, which was granted on Sept. 23, 2010, and Superior's bankruptcy case was closed. SWARTVILLE LLC: Court Denies TD Bank's Dismissal or Conversion Bid ------------------------------------------------------------------ Swartville, LLC, dodged a couple of bullets last week when Bankruptcy Judge Stephani W. Humrickhouse rejected TD Bank, N.A.'s request to convert to chapter 7 liquidation or dismiss the Debtor's chapter 11 case as well as the Bank's objection to the "amended plan" filed by the Debtor on Sept. 24, 2012. This is the second time the Court denied a motion to dismiss. Early in the case, Judge Humrickhouse rejected a dismissal request on bad faith grounds, noting there was a valid purpose to the reorganization. At that time, the judge held that if the Debtor did not seek bankruptcy protection, TD Bank could proceed against the Debtor in state court, obtain a judgment, and enforce the judgment against the Debtor's unencumbered land with a resulting loss of equity for payment of other creditors. Filing for bankruptcy protection, the court said, preserves the unencumbered property for the benefit of the Debtor's unsecured creditors. Although many of the unsecured creditors may be insiders of the Debtor, the Bankruptcy Code, the judge said, does not prohibit payment of insiders or preservation of property for the benefit of insider creditors. In Thursday's ruling, Judge Humrickhouse noted that the Debtor has made progress in establishing sewer service to its property and in negotiating advantageous easements. Whether these developments will facilitate the Debtor's ability to confirm its new plan remains to be seen, but what is readily apparent now is that they are not indicative of "cause" to dismiss the case under 11 U.S.C. Sec. 1112(b), according to the judge. Judge Humrickhouse also said the Debtor's Second Amended Plan is significantly different from the first amended plan in its proposed treatment of the secured creditor (pledge of $1 million in additional collateral, interest payments pending sale and three-year marketing period) and unsecured creditors (payment from sale of unencumbered property) and addresses the very specific basis upon which the court previously declined to confirm the Debtor's former plan. Prior to filing for bankruptcy, the Debtor executed a promissory note in favor of TD Bank in the original principal amount of $1,615,000. The note is guaranteed by the Debtor's three members, Joel Tomaselli, Glenn Garrett, and Garry Silivanch, and is secured by approximately 90 acres of the Debtor's real property in Castle Hayne, North Carolina. The Debtor intended to sell the Property after preparing it for development, but encountered financial troubles upon the decline in the real estate market, and did not make improvements to the property. The Debtor subsequently defaulted on the note and on Oct. 12, 2011, TD Bank made a written demand on the Debtor for payment. Instead of initiating a lawsuit against the Debtor for collection of the note or a foreclosure proceeding against the Property, TD Bank sued the guarantors in New Hanover County Superior Court on Oct. 18, 2011. The Debtor first filed its Chapter 11 plan on Nov. 17, 2011. On March 8, 2012, TD Bank filed the motion to convert or dismiss. The Debtor amended the plan on April 30, 2012. The court held a hearing to consider confirmation of the amended plan on July 16, and an order denying confirmation was entered on Aug. 17. The court denied confirmation because the amended plan, when read "as a whole, and then more specifically as to its treatment of the general unsecured class, [caused the court to] conclude that it ha[d] not been filed in good faith." The Debtor thereafter retained new counsel, who appealed the court's denial of confirmation. The appeal remains pending. On Sept. 24, 2012, the Debtor filed the second amended Chapter 11 plan. TD Bank again objected, on grounds that the plan was outside filing deadlines applicable to the Debtor as a small business Debtor. The Debtor then filed, on Oct. 9, an amendment to its petition in which it changed its designation to state that it is not a small business Debtor as defined in 11 U.S.C. Sec. 101(51D). Also on Thursday, Judge Humrickhouse ruled that the Debtor's failure to file the Second Amended Plan within the 300-day deadline is excusable; that dismissal is not required by 11 U.S.C. Sec. 1121(e)(2); and further that this error on the part of the Debtor is not cause for dismissal or conversion. The judge also ruled that the Debtor's amended petition stating that it is not a small business Debtor will be approved. A copy of the Court's Nov. 29, 2012 order is available for free at http://is.gd/FnJTglfrom Leagle.com. Swartville LLC owns roughly 90 acres of real property located at 317 Castle Hayne Road, Castle Hayne, North Carolina. Swartville filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-08676) on Nov. 14, 2011. Judge Stephani W. Humrickhouse oversees the case. Trawick H. Stubbs, Jr., at Stubbs & Perdue, P.A., serves as the Debtor's counsel. The Debtor scheduled assets of $1,933,404 and liabilities of $2,437,272. The petition was signed by Joel Tomaselli, member/manager. SWISS CHALET: Court Declines to Issue Final Decree Closing Case --------------------------------------------------------------- Bankruptcy Judge Enrique S. Lamoutte denied the request of Swiss Chalet, Inc., for final decree closing its case. The Debtor said payments had already been made pursuant to the confirmed Plan, and that the Plan has been substantially consummated. Judge Lamoutte, however, held that pending adversary proceeding and other contested matters in the case, as well as the imminence of scheduled hearings, are not "minor ministerial functions", thus, the estate has not yet been "fully administered". Judge Lamoutte also deferred ruling on the claim for administrative expenses filed by McP&G, Inc. d/b/a Terranova Realty Group. According to the judge, Terranova's claim, the Debtor's Motion to Alter Opinion and Order and other related motions are held in abeyance until the conclusion of an evidentiary hearing scheduled for Feb. 4, 2013. A copy of the Court's Nov. 27, 2012 Opinion and Order is available at http://is.gd/2PCEsLfrom Leagle.com. About The Swiss Chalet The Swiss Chalet Inc., developed the Gallery Plaza Condominium and Atlantis Condominium in San Juan, Puerto Rico. SCI also owns the DoubleTree Hotel in Condado, San Juan, Puerto Rico, adjacent to the Gallery Plaza. SCI filed a Chapter 11 petition (Bankr. D.P.R. Case No. 11-04414) on May 27, 2011. Charles A. Cuprill, P.S.C. Law Offices, in San Juan, P.R., serves as its bankruptcy counsel. CPA Luis R. Carrasquillo & Co., P.S.C., serves as its financial consultants. In its schedules, the Debtor disclosed total assets of $115,580,977 and total debts of $138,603,384. The petition was signed by Arnold Benus, director. The Debtor's Joint Amended Plan of Reorganization was confirmed on Feb. 2, 2012. TC GLOBAL: Kachi Partners Offers $4.3 Million for Shops ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the owner of Tully's Coffee Shops in Seattle intends to sell the business by the year's end. Tully's has a contract where Jonah Retail Holdings LLC, an affiliate of Kachi Partners, will buy the 47 continuing locations for $4.3 million, including $1.25 million cash. There will be a Dec. 7 hearing in U.S. Bankruptcy Court in Seattle for approval of sale procedures. Tully's wants competing bids by Dec. 27. In addition to cash, the purchase price includes the assumption of liability for $1 million in gift cards and $1.63 million to cure defaults on contracts. About TC Global Headquartered in Seattle, Washington, TC Global, Inc., dba Tully's Coffee -- http://www.tullyscoffeeshops.com/-- is a specialty coffee retailer and wholesaler. Through company owned, licensed and franchised specialty retail stores in Washington, Oregon, California, Arizona, Idaho, Montana, Colorado, Wyoming and Utah, throughout Asia with Tully's Coffee International, and with its global alliance partner Tully's Coffee Japan, Tully's premium coffees are available at 545 branded retail locations globally. TC Global Inc. filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 12-20253-KAO) on Oct. 10, 2012. The Debtor is represented by attorneys at Bush Strout & Kornfeld LLP, in Seattle. The Debtor disclosed assets of $4.9 million and debt totaling $3.7 million, including $2.6 million in unsecured claims. The Seattle-based chain has 57 company-owned stores and 12 franchised. There are another 71 franchises in grocery stores, schools and airports. Tully's will close nine stores following bankruptcy. Bloomberg report discloses that Tully's sold the wholesale and distribution business in 2009, generating $40 million that allowed a $5.9 million distribution to shareholders. TCF FINANCIAL: S&P Lowers Preferred Stock Rating to 'BB' -------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term issuer credit ratings on TCF Financial Corp. (TCF) and TCF National Bank by one notch to 'BBB-' and 'BBB', respectively. The outlook is stable. "We also lowered our short-term rating on TCF to 'A-3' from 'A-2'. At the same time, we lowered our ratings on TCF's preferred stock to 'BB' from 'BB+' and our rating on TCF National Bank's subordinated debt to 'BBB-' from 'BBB'," S&P said. "The downgrade reflects our lower assessment of TCF's risk position. The rise in TCF's NPAs in the third quarter and the recent resignation of its chief risk officer have compounded our concerns about its credit quality and operational risk," said Standard & Poor's credit analyst Brendan Browne. "As a result, we are lowering our assessment of the company's risk position to moderate from adequate." "The company's NPAs, including a high level of restructured loans, rose to about 7.5% of its loans and other real estate owned in the third quarter from 6.9% in the prior quarter--a level we previously said could trigger a downgrade. New accounting guidance required the company to report all loans to borrowers that were previously discharged from Chapter 7 bankruptcy as nonaccrual and to charge off those loans to the value of their underlying collateral, regardless of how the loan is currently performing," S&P said. "Even when adjusting for this accounting change, TCF's credit quality has been relatively stagnant while many other banks have reported substantial improvements. TCF's measure of NPAs-- excluding restructured loans and the impact of the new accounting guidance--was slightly higher at the end of third-quarter 2012 than a year earlier. In addition, in our view, the sharp rise in NPAs that related to borrowers that have gone through Chapter 7 bankruptcy further underlines the higher credit risk of the company's customer base. The company also has restructured more loans than most banks on a proportional basis to help avoid higher charge-offs and nonaccruals. Restructured loans, most of which are still accruing, made up about half of the company's NPAs. We expect the reduction in TCF's NPAs to be gradual, and we are uncertain how its restructured loans will ultimately perform," S&P said. "TCF has said that the resignation of its chief risk officer did not result from a disagreement with the company. Still, the departure of a senior executive, particularly at somewhat of a challenging time, can raise some questions and will force TCF to replace one of its most senior and long-tenured employees," S&P said. "Our stable outlook reflects our belief that the company will gradually reduce its NPAs over the next year, remain profitable-- albeit a lower-than-historical level--and continue to grow its inventory and auto finance businesses," S&P said. "We could raise our ratings on TCF if it substantially reduces its NPAs, stabilizes or grows its fee income, and demonstrates further success in its national lending platforms over an extended period," said Mr. Browne. "We could lower our ratings on TCF if its NPAs increase further, particularly if the company's nonaccruals, excluding restructured loans, cause the increase. For instance, if the NPA ratio rose to 8.5%, the rating could come under pressure." THERAPEUTIC SOLUTIONS: Posts $261,600 Net Income in 3rd Quarter --------------------------------------------------------------- Therapeutic Solutions International, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $261,643 on $465,360 of total revenues for the three months ended Sept. 30, 2012, compared with a net loss of $378,083 on $562,047 of total revenues for the same period during the prior year. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $476,696 on $1.67 million of total revenues, compared with a net loss of $437,222 on $1.11 million of total revenues for the same period a year ago. The Company reported a net loss of $970,699 on $1.7 million of net revenues in 2011, compared with a net loss of $7,657 on $nil revenue for the period Sept. 21, 2010, to Dec. 31, 2010. The Company's balance sheet at Sept. 30, 2012, showed $234,399 in total assets, $220,191 in total liabilities and $14,208 in total shareholders equity. "In view of the MDRA and the New License Agreement, we believe we will need outside financing to execute our business plan in 2013 and beyond. There is no guarantee we will receive the required financing to complete our business strategies, and it is uncertain whether future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations." On Aug. 24, 2012, the Company entered into a Master Dispute Resolution Agreement (the "MDRA") with James P. Boyd, et al. PLS CPA, A Professional Corp., in San Diego, expressed substantial doubt about Therapeutic Solutions' ability to continue as a going concern. The independent auditors noted that under the New License Agreement the Company's rights to sell Anterior Midpoint Stop Appliances to the US market (81% of total revenue) will expire at the end of 2012. A copy of the Form 10-Q is available for free at: http://is.gd/r7TR3x About Therapeutic Solutions Oceanside, Calif.-based Therapeutic Solutions International, Inc., manufactures and sells AMPSA Products to licensed dentists. The AMPSA Products are FDA cleared for the prophylactic treatment of medically diagnosed migraine pain as well as migraine associated tension-type headaches, by reducing their signs and symptoms through reduction of trigeminally innervated muscular activity. AMPSA Products are either fitted chairside by licensed dentists or produced and sold on a semi-custom basis by dental laboratories. AMPSA Products are made of polycarbonate plastic and are designed to fit over either the upper or lower front incisor teeth and protect teeth, muscles and joints by significantly suppressing parafunctional muscle contraction. THERAPEUTICSMD INC: R. Finizio, et al., to Offer 3.9MM Shares ------------------------------------------------------------- TherapeuticsMD, Inc., filed with the U.S. Securities and Exchange Commission a Form S-1 registration statement relating to the resale of up to 3,953,489 shares of common stock of the Company by Robert G. Finizio, John C.K. Milligan, Brian Bernick, M.D., et al. The Company will not receive any of the proceeds from the sale of the shares of common stock offered by the Selling Stockholders. The Company's common stock is quoted on the OTCQB under the symbol "TXMD." On Nov. 21, 2012, the reported closing price of the Company's common stock on the OTCQB was $1.80 per share. A copy of the prospectus is available for free at: http://is.gd/BWX2dr About TherapeuticsMD Boca Raton, Fla.-based TherapeuticsMD, Inc., is a specialty pharmaceutical company focused on the sales, marketing and development of branded and generic pharmaceutical and OTC products primarily for the women's healthcare market. The Company's products are designed to improve the health and well-being of women from pregnancy through menopause while using information technology to lower costs for the Patient, Physician and Payor. As reported in the TCR on April 2, 2012, Rosenberg Rich Baker Berman & Company, in Somerset, N.J., expressed substantial doubt about TherapeuticsMD, Inc.'s ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered a loss from operations of approximately $5.4 million and had negative cash flow from operations of approximately $5.0 million. The Company's balance sheet at Sept. 30, 2012, showed $3.51 million in total assets, $7.84 million in total liabilities and a $4.33 million total stockholders' deficit. THOMPSON CREEK: Closes $350 Million Senior Secured Notes Offering ----------------------------------------------------------------- Thompson Creek Metals Company Inc. closed its previously announced offering of $350,000,000 aggregate principal amount of its 9.75% Senior Secured First Priority Notes due 2017. The Senior Secured Notes offering closed on Nov. 27, 2012. The Company intends to use the proceeds from the offering for general corporate purposes, including capital expenditures relating to the development of its Mt. Milligan copper-gold mine. In connection with the closing of this offering, the Company terminated its revolving credit facility, under which no debt is outstanding. The Senior Secured Notes are fully and unconditionally guaranteed by certain wholly-owned subsidiaries of the Company. The Senior Secured Notes and the related guarantees are secured by a first- priority lien subject to permitted liens on substantially all of the Company's and the guarantors' property and assets. The Senior Secured Notes are not convertible into equity of Thompson Creek. Deutsche Bank Securities Inc. served as the sole book-running manager of the Senior Notes offering. About Thompson Creek Metals Thompson Creek Metals Company Inc. is a growing, diversified North American mining company. The Company produces molybdenum at its 100%-owned Thompson Creek Mine in Idaho and Langeloth Metallurgical Facility in Pennsylvania and its 75%-owned Endako Mine in northern British Columbia. The Company is also in the process of constructing the Mt. Milligan copper-gold mine in central British Columbia, which is expected to commence production in 2013. The Company's development projects include the Berg copper-molybdenum-silver property and the Davidson molybdenum property, both located in central British Columbia. Its principal executive office is in Denver, Colorado and its Canadian administrative office is in Vancouver, British Columbia. More information is available at http://www.thompsoncreekmetals.com The Company's balance sheet at Sept. 30, 2012, showed $3.61 billion in total assets, $1.71 billion in total liabilities and $1.90 billion in shareholders' equity. * * * As reported by the TCR on Aug. 14, 2012, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Denver- based molybdenum miner Thompson Creek Metals Co. to 'CCC+' from 'B-'. "These rating actions follow Thompson Creek's announcement of weaker production and higher cost expectations through next year," said Standard & Poor's credit analyst Donald Marleau. In the May 9, 2012, edition of the TCR, Moody's Investors Service downgraded Thompson Creek Metals Company Inc.'s Corporate Family Rating (CFR) and probability of default rating to Caa1 from B3. Thompson Creek's Caa1 CFR reflects its concentration in molybdenum, relatively small size, heavy reliance currently on two mines, and the need for favorable volume and price trends in order to meet its increasingly aggressive capital expenditure requirements over the next several years. TITUS TRANSPORTATION: Drivers' Class Suit Stays in Kansas Court --------------------------------------------------------------- Kansas District Judge Eric F. Melgren denied the request of Titus Transportation, LP; NEA Logistics, LLC; Titus Holdings, LLC; Titus Capital, LLC; PNT Properties, LP; and Polygon Network, LLC, to dismiss or transfer for improper venue the class action commenced by 15 truck drivers. The Defendants alternatively requested that the Kansas Court transfer the case to the U.S. Bankruptcy Court for the Eastern District of Texas, where Titus Transportation's Chapter 11 bankruptcy case was filed. The truck drivers provided transportation services to the Defendants as independent contractors according to nearly identical service agreements. They allege that since March 2008, the Defendants have improperly deducted money from the Plaintiffs' pay for physical damage insurance and an additional insurance program which the Defendants referred to as "9x insurance." The Service Agreement did not require physical damage coverage or "9x insurance," and the Plaintiffs claim that they did not voluntarily elect such coverage. The Plaintiffs also allege that since May 2011, the Defendants wrongfully deducted $6 per truck per week from the pay of each independent contractor for what the Defendants referred to as an increase in Kansas personal property tax. While the Service Agreement permits the Defendants to deduct items such as taxes, the Plaintiffs allege that the Defendants failed to provide sufficient notice and neglected to provide specific calculations to support the amounts deducted. Accoridng to Judge Melgren, the Plaintiffs' choice to litigate in Kansas should be given great weight. The Kansas district allows for convenient access to witnesses and sources of proof. The Plaintiffs almost exclusively reside in Kansas. The Defendants conducted business in the district hauling freight for grocery stores in Kansas. Additionally, the claims in the case involve the withholding of Kansas taxes, which may require evidence from the Kansas Department of Revenue or the Kansas Division of Motor Vehicles. The class suit is, GARY A. THOMPSON, et al., on behalf of all others situated, Plaintiffs, v. TITUS TRANSPORTATION, LP, et al., Defendants, Case No. 11-CV-1338-EFM-KMH (D. Kan.). A copy of Judge Melgren's Nov. 27, 2012 Memorandum and Order is available at http://is.gd/CXjrtZfrom Leagle.com. Based in Texas, Titus Transportation, LP -- http://www.titus.ws/ -- provides national transportation and logistics services. Titus Transportation, together with Titus Logistic Services, LP, filed for Chapter 11 (Bankr. E.D. Tex. Case No. 10-42202) on July 2, 2010. The petition listed both assets and debts of $1 million to $10 million. Attorneys at Wright Ginsberg Brusilow P.C., in Dallas, Texas, represented the Debtors. On May 9, 2011, the bankruptcy court issued an order confirming the Debtors' Chapter 11 Plan of Reorganization. TRANS ENERGY: Court Grants Motion for Summary Judgment vs. EQT -------------------------------------------------------------- Trans Energy, Inc., filed an action in the U.S. District Court for the Northern District of West Virginia against EQT Corporation on May 11, 2011. The action related to the Company's attempt to quiet title to certain oil and gas properties referred to as the Blackshere Lease, consisting of approximately 3,800 acres located in Wetzel County, West Virginia. On Sept. 5, 2012, the parties filed competing motions seeking summary judgment in this case. On Nov. 26, 2012, the Court granted the Company's motion for summary judgment and denied the defendant's motions for declaratory judgment and summary judgment. At this point, it is unclear whether the defendant plans to appeal the Court's decision. About Trans Energy St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG) -- http://www.transenergyinc.com/-- is an independent energy company engaged in the acquisition, exploration, development, exploitation and production of oil and natural gas. Its operations are presently focused in the State of West Virginia. In its audit report on the Company's 2011 results, Maloney + Novotny, LLC, in Cleveland, Ohio, noted that the Company has generated significant losses from operations and has a working capital deficit of $18.37 million at Dec. 31, 2011, which together raises substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $73.78 million in total assets, $50.52 million in total liabilities and $23.26 million in total stockholders' equity. TRANS ENERGY: Reports Production Results on Anderson Wells ---------------------------------------------------------- Trans Energy, Inc., announced production results on the Anderson #5H and Anderson #7H in Wetzel County, West Virginia. Initial 30-day production rates from the Anderson #5H and Anderson #7H averaged 9,637 Mcfe/d and 7,095 Mcfe/d, respectively. The 30- day IP rate from the Anderson #5H represents a 26 percent increase compared to 30-day IP rate from the Dewhurst #111H - previously Trans Energy's best performing well in the Marcellus - and establishes the Anderson #5H well as Trans Energy's best performing horizontal Marcellus well to date. John G. Corp, President of Trans Energy, said, "Our core acreage position in the Marcellus continues to deliver better than expected results. The Anderson #5H and #7H are two of our best performing wells to date. As we continue to execute our drilling program across our more than 60,000 gross acres in Wetzel, Marshall, Tyler and Marion Counties, we believe that our drilling expertise, combined with the geology across our acreage position, will enable us to continue to deliver impressive results from our upcoming horizontal wells." The two Anderson horizontal wellbores are parallel to one another and were hydraulically stimulated at the same time. The effective lateral lengths that were hydraulically stimulated in the Anderson #5H and the Anderson #7H were 4,980 feet and 5,470 feet, respectively. About Trans Energy St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG) -- http://www.transenergyinc.com/-- is an independent energy company engaged in the acquisition, exploration, development, exploitation and production of oil and natural gas. Its operations are presently focused in the State of West Virginia. In its audit report on the Company's 2011 results, Maloney + Novotny, LLC, in Cleveland, Ohio, noted that the Company has generated significant losses from operations and has a working capital deficit of $18.37 million at Dec. 31, 2011, which together raises substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $73.78 million in total assets, $50.52 million in total liabilities and $23.26 million in total stockholders' equity. TRAVELPORT HOLDINGS: Inks New Hardware & Software Pact with IBM --------------------------------------------------------------- As part of Travelport Limited's ongoing program and investment in technology, the Company entered into a new hardware and software agreement with International Business Machines Corporation. Travelport, LP, an indirect wholly owned subsidiary of Travelport Limited, entered into Amendment 14 to the Asset Management Offering Agreement, effective as of July 1, 2002, as amended, among Travelport, LP, IBM and IBM Credit LLC. Among other changes, Amendment 14 extends the term of the IBM AMO Agreement until Dec. 31, 2017. Pursuant to the terms of Amendment 14, Travelport will obtain the following services: -- upgrades to existing systems architecture and software infrastructure at its Atlanta, Georgia data center; -- migration services; -- licenses and other software products; and -- equipment and software maintenance and various other services. Separation Agreement with L. Golding On Nov. 26, 2012, the Compensation Committee of the Board of Directors of Travelport Limited approved the separation of Lee Golding, the Company's Executive Vice President and Chief Human Resources Officer, from the Company effective April 12, 2013. In connection with this separation, on Nov. 26, 2012, Travelport entered into a Compromise Agreement with Ms. Golding, which addresses the terms and conditions in connection with Ms. Golding's separation and sets forth both Travelport's and Ms. Golding's obligations with respect to that transition and termination, including, without limitation, those pursuant to Ms. Golding's contract of employment and long-term incentive plan arrangements. About Travelport Holdings Travelport Holdings is the direct parent of Travelport Limited, is a broad-based business services company and a leading provider of critical transaction processing solutions to companies operating in the global travel industry. With a presence in 160 countries and approximately 3,500 employees, Travelport is comprised of the global distribution system (GDS) business, which includes the Galileo and Worldspan brands and its Airline IT Solutions business, which hosts mission critical applications and provides business and data analysis solutions for major airlines. Travelport also owns approximately 48% of Orbitz Worldwide (NYSE: OWW), a leading global online travel company. Travelport is a private company owned by The Blackstone Group, One Equity Partners, Technology Crossover Ventures, and Travelport management. Travelport Holdings Limited is a holding company with no direct operations. Its principal assets are the direct and indirect equity interests it holds in its subsidiaries, including Travelport Limited. Travelport's balance sheet at Sept. 30, 2012, showed $3.35 billion in total assets, $4.38 billion in total liabilities, and a stockholders' deficit of $1.02 billion. * * * As reported by the TCR on Oct. 10, 2011, Standard & Poor's Ratings Services lowered its long-term corporate credit ratings on travel services provider Travelport Holdings Limited (Travelport Holdings) and indirect subsidiary Travelport LLC (Travelport) to 'SD' (selective default) from 'CC'. The downgrades follow the implementation of a capital restructuring, which was necessary because of the Travelport group's high leverage, weak liquidity, and the upcoming maturity of its $693 million (as of end-June 2011) PIK loan in March 2012. "According to our criteria, we view this restructuring as a distressed exchange and tantamount to a default (see 'Rating Implications Of Exchange Offers And Similar Restructurings, Update,' published May 12, 2009, on RatingsDirect on the Global Credit Portal)," S&P related. TRIBUNE CO: Syndicating $1.4BB Financing for Bankruptcy Exit ------------------------------------------------------------ Tribune Co. is syndicating $1.4 billion of loans to fund its emergence from bankruptcy protection, Bloomberg News reported, citing a person with knowledge of the transaction as its source. JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Credit Suisse Group AG and Deutsche Bank AG are arranging the financing, which includes a $1.1 billion, seven-year term loan B and a $300 million, five-year asset-based revolving line of credit, according to the report. Gary Weitman, a spokesman for Tribune, said in an e-mailed statement the company has already commenced the process of syndicating its $1.1 billion exit term loan. "This is another step in the process toward Tribune's emergence from Chapter 11, a process we expect to complete in the next several weeks," Mr. Weitman said. Tribune has obtained final approval from the Federal Communications Commission to transfer its broadcast licenses to its new owners. The FCC approved the license transfers and granted waivers so the company could keep newspapers and nearby television stations in five markets. The approval is one of the two steps Tribune needs to emerge from bankruptcy protection. In July, the company obtained an order from the U.S. Bankruptcy Court for the District of Delaware, which confirmed its restructuring plan. The court order gave a group of senior creditors control of the Chicago media company, which owns the Chicago Tribune, Los Angeles Times, KTLA-TV Channel 5 and other media properties. The new owners include JPMorgan Chase & Co. and hedge funds Oaktree Capital Management and Angelo Gordon & Co. 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. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Proposes Settlement with EZ Buy et al ------------------------------------------------- Tribune Co. asked the U.S. Bankruptcy Court for the District of Delaware to approve a settlement of claims with EZ Buy & EZ Sell Recycler Corp. and two other claimants. The claims stemmed from various transactions entered into by the companies, including the sale of Tribune's shares in EZ Buy to Wilshire Classifieds LLC in 2007. EZ Buy, Wilshire and the other claimant, Target Media Partners Operating Company LLC, filed eight claims against Tribune and two of its subsidiaries to recover more than $3 million. Meanwhile, Wilshire reportedly owes Tribune more than $1.3 million while Target Media owes $387,234 to the company and Los Angeles Times Communications LLC. Under the proposed deal, the parties agreed to release each other from all claims arising from their various transactions. The agreement also terminates the parties' obligations or the amounts due under those transactions. A copy of the settlement can be accessed for free at http://is.gd/TTylTE A court hearing to consider approval of the proposed settlement is scheduled for December 12. Objections are due by December 5. 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. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: Has Accord With Warner Brothers, New Line ----------------------------------------------------- Tribune Co. asked the U.S. Bankruptcy Court for the District of Delaware to approve a settlement agreement with New Line Television Inc. and Warner Bros. Television Distribution Inc. The agreement was hammered out to settle the claims filed by New Line and Warner Bros. against certain subsidiaries of Tribune. The claimants seek to recover more than $21,892,695 from their various television programming agreements with the Tribune subsidiaries. Meanwhile, Warner Bros. owes $869,455 to Tribune Broadcasting Company. Under the terms of the agreement, the claims of New Line and Warner Bros. will be allowed in the reduced amount of $21,778,906. Meanwhile, any distribution made to Warner Bros. under Tribune's Chapter 11 plan will be reduced by $869,455. A full-text copy of the agreement can be accessed for free at http://bankrupt.com/misc/Tribune_WarnerSettlement.pdf A court hearing to consider approval of the agreement is scheduled for December 12. Objections are due by December 5. 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. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Bankruptcy Creditors' Service, Inc., publishes Tribune Bankruptcy News. The newsletter tracks the chapter 11 proceeding undertaken by Tribune Company and its various affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) TRIBUNE CO: TV Guide Seeks Stay Relief to Prosecute Claim --------------------------------------------------------- TV Guide Online Inc. and TV Guide Online LLC asked the U.S. Bankruptcy Court for the District of Delaware to lift the automatic stay that was applied to a pending patent-infringement lawsuit against a unit of Tribune Co. The automatic stay is an injunction that halts actions by creditors against a company in bankruptcy protection. The companies sued Tribune Media Services, Inc. for alleged infringement of a patent related to technology that allows users to access television program listings for their viewing location using a computer. The companies also filed a claim in the sum of $5.7 million for the alleged patent infringement. The lawsuit, which was filed in a district court in Delaware, was automatically halted after Tribune Media filed for bankruptcy protection in 2008. A court hearing to consider approval of the request is scheduled for December 12. Objections are due by December 5. 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. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. 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) TROY PLAZA: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Troy Plaza, LLC fdba Campus Deli fdba Trojan Fish House P.O. Box 349 Troy, AL 36081 Bankruptcy Case No.: 12-12151 Chapter 11 Petition Date: November 27, 2012 Court: United States Bankruptcy Court Middle District of Alabama (Dothan) Judge: Dwight H. Williams Jr. Debtor's Counsel: Collier H. Espy, Jr., Esq. ESPY, METCALF & ESPY, P.C. P.O. Drawer 6504 326 North Oates Street Dothan, AL 36302-6504 Tel: (334) 793-6288 E-mail: kc@espymetcalf.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/almb12-12151.pdf The petition was signed by Vicki F. McPherson, authorized agent. UNIVERSITY GENERAL: Acquires Sleep and Imaging Center in Texas -------------------------------------------------------------- University General Health System, Inc., has acquired a sleep and imaging center from Jacinto Medical Group in Baytown, Texas. The acquisition is expected to contribute more than $5 million in annual revenue and an estimated $1.6 million in adjusted EBITDA (a non-GAAP measurement) annually to operating results as a hospital outpatient department of the Company's flagship hospital in Houston. This acquisition complements the ambulatory surgical services currently provided by the Company in Baytown. Terms of the transaction were not disclosed. "This acquisition expands the services that we are able to provide within the Baytown community, and we believe it will be very accretive to our strategic plan to develop our integrated health care delivery system," stated Hassan Chahadeh, M.D., chairman and chief executive officer of University General Health System, Inc. "We are delighted to continue building upon our constructive relationship with Jacinto Medical Group and look forward to additional growth in this part of the Houston metropolitan area." Jacinto Medical Group is a multi-specialty healthcare provider that is staffed by 15 physicians and seven mid-level providers. The group was founded over 16 years ago, and the physicians have been working together to serve the Baytown community for over 20 years. "Our association with University General has been outstanding, and we expect to continue providing a quality of patient care that is consistent with the high standards set by the hospital," stated Siraj Jiwani, chief executive officer of Jacinto Medical Group. About University General University General Health System, Inc., located in Houston, Texas, is a diversified, integrated multi-specialty health care provider that delivers concierge physician- and patient-oriented services. UGHS currently operates one hospital and two ambulatory surgical centers in the Houston area. It also owns a revenue management company, a hospitality service provider and facility management company, three senior living facilities and manages six senior living facilities. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Moss, Krusick & Associates, LLC, in Winter Park, Florida, expressed substantial doubt about University General's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative operating cash flows, and has negative working capital. University General reported a net loss of $2.38 million in 2011, following a net loss of $1.71 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $140.67 million in total assets, $128.38 million in total liabilities and $3.79 million in series C, convertible redeemable preferred stock, and $8.49 million in total equity. US AIRWAYS: S&P Gives 'B+' Rating on $128MM Class B Certificates ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'BBB'(sf) rating to US Airways Inc.'s $418.113 million series 2012-2 Class A pass-through certificates, with an expected maturity of June 3, 2025. "At the same time, we assigned our preliminary 'B+'(sf) rating to the $128.071 million Class B pass- through certificates, with an expected maturity of June 3, 2021. The final legal maturities will be 18 months after the expected maturity. The issues are drawdowns under a Rule 415 shelf registration. We will assign final ratings upon the completion of our legal and structural review," S&P said. "We base the preliminary 'BBB'(sf) and 'B+'(sf) ratings on US Airways' credit quality, substantial collateral coverage by good quality aircraft, and on legal and structural protections available to the pass-through certificates," said Standard & Poor's credit analyst Betsy Snyder. "The company will use the proceeds of the offering to finance seven A321-200 aircraft and four A330-200 aircraft to be delivered between May and October 2013. Each aircraft's secured notes are cross-collateralized and cross-defaulted, a provision that we believe increases the likelihood that US Airways would affirm the notes (and thus continue to pay on the certificates) in bankruptcy." "The pass-through certificates are a form of enhanced equipment trust certificates (EETC) and benefit from legal protections afforded under Section 1110 of the federal bankruptcy code and by a liquidity facility provided by Landesbank Hessen-Thueringen Girozentrale (A-/Stable/A-1). The liquidity facility is intended to cover up to three semiannual interest payments, a period during which collateral could be repossessed and remarketed by certificateholders following any default by the airline, or to maintain continuity of interest payments as certificateholders negotiate with US Airways in a bankruptcy with regard to certificates," S&P said. "The ratings apply to a unit consisting of certificates representing the trust property and escrow receipts, initially representing interests in deposits (the proceeds of the offerings). A depositary bank, The Bank of New York Mellon (AA-/Negative/A-1+), holds the escrow deposits pending paying off existing debt on the planes (which should be accomplished by August 2013). Amounts deposited under the escrow agreements are not property of US Airways and are not entitled to the benefits of Section 1110 of the U.S. Bankruptcy Code, and any default arising under an indenture solely by reason of the cross-default in such indenture may not be of a type required to be cured under Section 1110. Any cash collateral held as a result of the cross- collateralization of the equipment notes also would not be entitled to the benefits of Section 1110. Neither the certificates nor the escrow receipts may be separately assigned or transferred," S&P said. "We believe that US Airways views these planes as important and would, given the cross-collateralization and cross-default provisions, likely affirm the aircraft notes in a bankruptcy scenario. In contrast to most EETCs issued before 2009, the cross- default would take effect immediately in a bankruptcy if US Airways rejected any of the aircraft notes. This should prevent US Airways from selectively affirming some aircraft notes and rejecting others (cherry-picking), which often harms the interests of certificateholders in a bankruptcy," S&P said. "We consider the collateral pool of A321-200s and A330-200s to be of good quality. The A321-200 is the largest version of Airbus' popular A320 narrowbody family of planes. The A321-200 has not been as successful as the A320 or smaller A319, but nonetheless is operated by 95 airlines worldwide, many more than Boeing's competing B737-900ER (although the latter is a newer model and thus has had less time to attract orders). Airbus has announced that it will offer a more fuel-efficient new-engine-option (NEO) on its narrowbody planes starting in 2016. Orders to date indicate that this will be a popular option. If widely adopted, sale of NEO planes could depress somewhat residual values of existing- technology Airbus narrowbody planes. However, this effect is most likely for older planes in the A320 family (e.g. those delivered in the 1990s), rather than the recently delivered A321-200s in the 2012-1 collateral pool," S&P said. "The other approximately 50% of aircraft securing the certificates is A330-200s, a small, long-range widebody plane. This model, which incorporates newer technology than Boeing's competing B767- 300ER, has been successful and is operated by 98 airlines worldwide. It will face more serious competition when large numbers of Boeing's long-delayed B787 are delivered. Still, it will take a while for this to occur, even though Boeing has finally begun to make its first aircraft deliveries earlier in 2012," S&P said. "The initial loan-to-value of the Class A certificates is 55.2% and of the Class B certificates is 72.1%, using the appraised base values and depreciation assumptions in the offering memorandum. However, we focused on more conservative maintenance-adjusted appraised values (not disclosed in the offering memorandum). We also use more conservative depreciation assumptions for all of the planes than those in the prospectus. We assumed that, absent cyclical fluctuations, values of the A321-200s and A330-200s would decline by 6.5% of the preceding year's value per year. Using these values and assumptions, the Class A initial loan-to-value is higher, 55.9%, and rises to around 60% at its highest point, before declining gradually. The Class B initial loan-to-value, using our assumptions, is about 73.0%, and peaks at around 80% before declining. Our analysis also considered that a full draw of the liquidity facility, plus interest on those draws represents a claim senior to the certificates. This amount is in line (as a percent of asset value) with EETCs other U.S. airlines issued recently and lower than US Airways' 2011-1 and 2012-1 EETCs, which amounted to more than 8%. Initially, a full draw with interest is equivalent to about 5.7% of asset value, using our assumptions. The transaction is structured so that US Airways could later issue Class C certificates without a liquidity facility. In the past, airlines, including US Airways, have structured follow-on certificates of this kind in such a way as to not affect the rating on outstanding senior certificates," S&P said. "Our ratings on US Airways Group Inc. reflect its substantial debt and lease burden, and participation in the high-risk U.S. airline industry. The ratings also incorporate benefits from the company's operating costs, which are lower than those of other legacy airlines. Tempe, Ariz.-based US Airways is the fifth-largest U.S. airline, carrying about 9% of industry traffic. We characterize the company's business profile as vulnerable, its financial profile as highly leveraged, and its liquidity as adequate," S&P said. "The outlook is stable. We expect US Airways' financial profile to remain fairly consistent through 2013, with EBITDA interest coverage in the mid-1x area and funds from operations (FFO) to debt in the low-teen percent area. We believe that an upgrade is not likely over the next year but could occur if FFO to debt moves consistently into the high-teen percent area and unrestricted cash and short-term investments increase to more than $2.5 billion. We also believe a downgrade is unlikely over the near term. However, if a stalled U.S. economic recovery or serious oil price spike caused losses, eroding liquidity to below $1 billion, we could lower the ratings," S&P said. RATINGS LIST US Airways Inc. US Airways Group Inc. Corporate credit rating B-/Stable/-- New Ratings Assigned US Airways Inc. Series 2012-2 Class A pass-through certs BBB(sf) prelim Series 2012-2 Class B pass-through certs B+(sf) prelim VERMILLION INC: Appoints Bruce Huebner as Interim CEO ----------------------------------------------------- Vermillion, Inc., appointed director Bruce A. Huebner as interim chief executive officer. He succeeds Gail S. Page, who will assist in the transition and serve as a strategic advisor to the company as requested by its board of directors. Mr. Huebner will continue to serve on Vermillion's board of directors. As previously announced, the company's Board formed a succession committee of independent directors to oversee the process of identifying and selecting a new CEO. It has also retained a leading executive search firm with experience in CEO transitions to advise the board on potential candidates. "With more than 37 years of diagnostic industry experience and leadership, as well as serving on a special Vermillion board committee that evaluates marketing strategies for OVA1, Bruce will provide seasoned leadership as our interim CEO," said James S. Burns, the company's chairman of the board. "He will actively manage the business and ensure continuity of operations, as our succession committee searches for a new CEO who will take the company to its next level of growth and development. "I would also like to thank Gail for the leadership and dedication that she has provided in bringing OVA1 to market and a pipeline of products to improve women's health. We look forward to consulting with Gail in the coming months as we continue to build advocacy for our ovarian cancer franchise among gynecologists and women's health groups." Mr. Huebner has executive management experience in multiple clinical diagnostic companies, including Osmetech Molecular Diagnostics, Nanogen and Gen-Probe. While serving as president of Osmetech, he successfully established the company as a fully integrated business, obtaining FDA clearance for four molecular diagnostic microarray products and introducing them to the marketplace. Mr. Huebner was previously president and chief operating officer of Nanogen, a publicly held nanotechnology and microarray company. Prior to Nanogen, he was executive vice president and chief operating officer of Gen-Probe, a global leader in the development of nucleic acid tests, including diagnostic tests for infectious disease that affect women's health. In less than 10 years, he grew Gen-Probe's annual revenues from $42 million to a run-rate of more than $150 million. Mr. Huebner is currently a managing director of LynxCom Partners, a healthcare consulting firm with a focus on cancer diagnostics and personalized medicine. "The appointment of Bruce as interim CEO allows Vermillion additional time to recruit a successor with a strong commercial background in diagnostics," added Burns. "Given the recent Delaware court's dismissal of the dissident shareholder suit and admonishment of the plaintiffs, Vermillion can now set a shareholder meeting date, elect a new director, and take the steps necessary to attract and compensate a new CEO." Pursuant to the terms of an employment agreement, the Company will pay Mr. Huebner an annual base salary of $252,000. About Vermillion Vermillion, Inc. is dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in oncology, hematology, cardiology and women's health. The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del. Case No. 09-11091). Vermillion's legal advisor in connection with its successful reorganization efforts wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged from bankruptcy in January 2010. The Plan called for the Company to pay all claims in full and equity holders to retain control of the Company. After auditing the Company's results for 2011, PricewaterhouseCoopers LLP, in Austin, Texas, expressed substantial doubt about Vermillion, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring losses and negative cash flows from operations and has debt outstanding due and payable in October 2012. The Company reported a net loss of $17.8 million in 2011, compared with a net loss of $19.0 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $16.9 million in total assets, $11.5 million in total liabilities, and stockholders' equity of $5.4 million. VERTIS HOLDINGS: FTC Waiting Period Expired Nov. 16 --------------------------------------------------- The (Milwaukee) Business Journal reported that Quad/Graphics Inc. said a required regulatory waiting period for its proposed purchase of Vertis Holdings Inc. of Baltimore expired Nov. 16, 2012, with no action taken by the Federal Trade Commission. The report said the expiration clears the companies to close the planned $258.5 million transaction. Sussex-based commercial printer Quad/Graphics had agreed to acquire all the assets of Vertis Holdings, a direct-mail marketing firm that filed for Chapter 11 bankruptcy protection to facilitate the sale. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reported that no bids to compete with Quag/Graphics were submitted by the Nov. 23 deadline. Consequently, the Nov. 30 auction was canceled. There will be a Dec. 6 hearing for approval of the sale. About Vertis Vertis Holdings Inc. -- http://www.thefuturevertis.com/-- provides advertising services in a variety of print media, including newspaper inserts such as magazines and supplements. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. VESTA CORPORATION: Moody's Affirms 'B2' Corp. Family Rating ----------------------------------------------------------- Moody's Investors Service affirmed Vesta Corporation's B2 corporate family and probability of default ratings ("CFR" and "PDR", respectively) and lowered the proposed $200 million first lien term loan rating to B1 from Ba3. As Vesta is no longer contemplating a second lien term loan issuance, the B3 rating has been withdrawn. The rating outlook is stable. Ratings Rationale Without the benefit of cushion from a second lien facility, Vesta's first lien senior secured term loan is rated one notch higher than the B2 CFR, as opposed to two notches under the originally proposed capital structure. Moody's used a 50% recovery rate because of the large proportion of accounts payable relative to secured debt. The following ratings were affirmed: Corporate Family Rating -- B2 Probability of Default Rating -- B2 The following rating was lowered: $200 million 1st lien Term Loan -- B1 (LGD3 -- 34%) from Ba3 (LGD2 -- 24%) The following rating was withdrawn: $95 million 2nd lien Term Loan -- B3 (LGD5 -- 70%) The rating outlook is stable. The principal methodology used in rating Vesta Corporation was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Vesta Corporation, with projected annual revenues over $170 million, is a provider of electronic payment services, principally for the prepaid mobile phone market. VHGI HOLDINGS: Incurs $4.8 Million Net Loss in June 30 Quarter -------------------------------------------------------------- VHGI Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $4.85 million on $110,103 of total revenue for the three months ended June 30, 2012, compared with a net loss of $190,952 on $187,727 of total revenue for the same period during the prior year. For the six months ended June 30, 2012, the Company reported a net loss of $10.56 million on $247,450 of total revenue, compared with a net loss of $415,142 on $300,692 of total revenue for the same period a year ago. The Company reported a net loss of $5.43 million in 2011, compared with a net loss of $1.67 million in 2010. The Company's balance sheet at June 30, 2012, showed $47.64 million in total assets, $51.78 million in total liabilities and a $4.13 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/03ANg2 About VHGI Holdings Fort Worth, Tex.-based VHGI Holdings, Inc., is a holding company with revenue streams from the following business segments: (a) precious metals (b) oil and gas (c) coal and (d) medical technology. In their auditors' report on the Company's consolidated financial statements for the year ended Dec. 31, 2011, Pritchett, Siler & Hardy, P.C., in Salt Lake City, Utah, expressed substantial doubt about VHGI Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial losses and has a working capital deficit. VIASPACE INC: Borrows $20K; Loan Converted Into 1.9MM Shares ------------------------------------------------------------ Kevin Schewe, director of Viaspace Inc., made a $20,000 loan to the Company in conjunction with the Loan Agreement entered into on Sept. 30, 2012. In the Loan Agreement, Mr. Schewe agreed, subject to satisfaction of certain conditions, including among other things, Mr. Schewe's satisfaction with the use proceeds of past loans, to provide loans of up to $1,000,000 as required by the Company for a five-year period. The loans would be evidenced by a Secured Convertible Note. The loans accrue interest at 6% per annum and are secured by all assets of the Company. At Mr. Schewe's election, the notes are convertible into shares of Company common stock at a price equal to 80% of the average closing price of the Company's common stock for the 20 trading days immediately preceeding the date of the loan. Each note matures on the second anniversary of the issuance date of that note. Including the newest loan, Mr. Schewe has made cumulative loans to the Company totaling $105,000 since the execution of the Loan Agreement. On Nov. 28, 2012, Mr. Schewe converted $20,000 of loans that he previously made to the Company into shares of the Company's common stock. The $20,000 loan owed to him converted into 1,941,748 shares of Company common stock at a conversion price of $0.0103 per common share. On Nov. 28, 2012, the Company issued 1,941,748 shares of Company common stock to Mr. Schewe. About VIASPACE Inc. Irvine, Calif.-based VIASPACE Inc. (OTC Bulletin Board: VSPC - News) -- http://www.VIASPACE.com/-- is a clean energy company providing products and technology for renewable and alternative energy that reduce or eliminate dependence on fossil and high- pollutant energy sources. Through its majority-owned subsidiary VIASPACE Green Energy Inc., the Company grows Giant King Grass as a low carbon fuel for electricity generating power plants and as a feedstock for cellulosic biofuels. The Company's balance sheet at Sept. 30, 2012, showed $301,000 in total assets, $1.19 million in total liabilities and a $896,000 total deficit. Hein & Associates LLP, the Company's independent registered public accounting firm, included an explanatory paragraph in its report on the Company's financial statements for 2011, which expresses substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that he Company has incurred significant losses from operations, resulting in an accumulated deficit of $43.05 million. The Company expects those losses to continue. In addition, the Company has limited working capital and based on current cash flows does not have sufficient funds to pay the May 2012 instalment due on the note to Changs LLC. VICTORY ENERGY: CFO Resigns, Search for Replacement Ongoing ----------------------------------------------------------- Victory Energy Corporation announced the resignation of its Chief Financial Officer, Mark Biggers, for family and personal reasons. Mr. Biggers' resignation is effective immediately, and he will serve as the Company's interim chief financial officer during the anticipated short transition period. Mr. Biggers commented, "It's been a privilege to work with such a great group of individuals. I appreciate and endorse the efforts of the Victory team as they continue to do everything needed to grow the company and build shareholder value. I look forward to following them along the way." Kenny Hill, Victory Energy's CEO, stated, "I'm pleased that Mark has agreed to stay engaged with Victory during the transition. We thank Mark for his service to the company and wish him well with his future endeavors." The Company has initiated a search and is currently interviewing candidates. About Victory Energy Austin, Texas-based Victory Energy Corporation is engaged in the exploration, acquisition, development and exploitation of domestic oil and gas properties. Current operations are primarily located onshore in Texas, New Mexico and Oklahoma. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, WilsonMorgan LLP, in Irvine, California, expressed substantial doubt about Victory Energy's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses since inception and has an accumulated deficit. The Company reported a net loss of $3.95 million on $305,180 of revenues for 2011, compared with a net loss of $432,713 on $385,889 of revenues for 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.69 million in total assets, $259,886 in total liabilities and $1.43 million in total stockholders' equity. VISCOUNT SYSTEMS: Raises $500,000 from Units Offering ----------------------------------------------------- Viscount Systems, Inc., completed a private placement of 10,000,000 units at a price of $0.05 per unit for total proceeds of $500,000. Each unit consists of one common share and one-half of one share purchase warrant of Viscount, with each whole warrant exercisable to acquire an additional share of Viscount at a price of $0.10 for a period of 5 years from the closing date. In connection with the offering, the Company paid to a registered broker-dealer a cash commission of $50,000 and issued share purchase warrants to acquire 1,000,000 shares of common stock of the Company at a price of $0.05 per share for a period of 5 years from the closing date. The warrants may be exercised on a cashless basis. The securities were sold to accredited and non-U.S. investment funds and to a registered broker-dealer pursuant to the exemptions from registration under Rule 506 of Regulation D and Regulation S, both promulgated under the United States Securities Act of 1933. About Viscount Systems Burnaby, Canada-based Viscount Systems, Inc., is a manufacturer, developer and service provider of access control security products. The Company reported a net loss of C$2.9 million in 2011, compared with a net loss of C$1.3 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed C$1.08 million in total assets, C$3.44 million in total liabilities and a C$2.35 million total stockholders' deficit. "The Company's bank credit facility was suspended on December 30, 2011 due to the bank's assessment of the Company's financial position. Management has determined that the Company will need to raise a minimum of $500,000 by way of new debt or equity financing to continue normal operations for the next twelve months. Management has been actively seeking new investors and developing customer relationships, however a financing arrangement has not yet completed. Short-term loan financing is anticipated from related parties, however there is no certainty that loans will be available when required. These factors raise substantial doubt about the ability of the Company to continue operations as a going concern." Following the 2011 results, Dale Matheson Carr-Hilton Labonte LLP, in Vancouver, Canada, expressed substantial doubt about Viscount Systems' ability to continue as a going concern. The independent auditors noted that the Company has an accumulated deficit of C$5,769,027 and has reported a loss of C$2,883,304 for the year ended Dec. 31, 2011. WATERFRONT OFFICE: Files for Chapter 11 in Connecticut ------------------------------------------------------ Stamford, Connecticut-based Waterfront Office Building LP and Summer Office Building LP sought Chapter 11 protection (Bankr. D. Conn. Case No. 12-52121 and 12-52122) on Nov. 27 in Bridgeport. The Debtors each estimated assets and debts between $50 million and $100 million. According to Bloomberg News, Waterfront said in court filings that it owns a 206,000 square-foot office building situated on 8.1 acres. The property has two restaurants and a 71-slip marina. The Summer property is a 100,000 square-foot building. Deutsche Genossenschafts-Hypothekenbank AG has a $55 million mortgage on the properties. The lender only has the right to look to the property for recovery of the debt, court papers state. WATERFRONT OFFICE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Waterfront Office Building LP fka Antares Stamford Landing LP 100 Washington Boulevard, Suite 200 Stamford, CT 06902 Bankruptcy Case No.: 12-52121 Chapter 11 Petition Date: November 27, 2012 Court: U.S. Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: James Berman, Esq. ZEISLER AND ZEISLER, P.C. 558 Clinton Avenue P.O. Box 3186 Bridgeport, CT 06605 Tel: (203) 368-4234 E-mail: jberman@zeislaw.com Estimated Assets: $50,000,001 to $100,000,000 Estimated Liabilities: $50,000,001 to $100,000,000 The petitions were signed by Paul Kuehner, manager of managing member of sole member of debtor's GP. Affiliate that simultaneously sought Chapter 11 protection: Debtor Case No. ------ -------- Summer Office Building LP 12-52122 Assets: $10,000,001 to $50,000,000 Liabilities: $50,000,001 to $100,000,000 A. Waterfront Office's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ ABM Janitorial Services Business Debt $14,741 321 West 44th Street, Suite 701 New York, NY 10036 ABM Security Services Inc. Business Debt $10,850 50 W. Powhattan Avenue, Suite D Essington, PA 19029 Stamford Landing Condo Assc. Inc. Business Debt $9,680 c/o Plaza Realty & Mgmt Corp. Pymnt Proc. Ctr, P.O. Box 64895 Phoenix, AZ 85082 Tri-State Window Cleaning Business Debt $6,328 Park Avenue Coach Business Debt $5,212 KM Communications Services Business Debt $4,597 Fran & Company Business Debt $3,000 American Solar & Alternative Business Debt $2,923 Eastern Land Management Business Debt $2,464 City Carting & Recycling Business Debt $1,295 Law Offices of DePanfilis & Business Debt $908 Vallerie Centerline Interiors Business Debt $822 Colonial Wood Products Business Debt $700 T.F. Andrew Carpet One Business Debt $425 Floor & Home Atria Inc. Business Debt $420 Soundsafe Security System Business Debt $377 Waltham Services, Inc. Business Debt $324 Naugatuck Construction Business Debt $275 Windcheck Business Debt $200 MLK Lock & Security LLC Business Debt $162 B. Summer Office's List of Its 12 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ McGladrey & Pullen LLP Business Debt $7,500 850 Canal Street, 4th Floor Stamford, CT 06902 ABM Security Services Inc. Business Debt $4,913 50 W. Powhattan Avenue, Suite D Essington, PA 19029 Tri-State Window Cleaning Business Debt $2,871 11 Industry Street Poughkeepsie, NY 12603 KM Communications Services Business Debt $2,508 Kastle Systems Business Debt $1,461 City Carting & Recycling Business Debt $767 Fire Protection Testing -- $452 ABM Janitorial Svcs NEAST Inc. Business Debt $391 F.J. Dahill, Co. Inc. Business Debt $369 Transbeam, Inc. Business Debt $319 Clear Water Industries -- $248 Atria Inc. Business Debt $151 WILLIAM SATTERFIELD: 11th Cir. Affirms Ruling on Suit v. Trustee ---------------------------------------------------------------- William Satterfield brought suit against Patrick J. Malloy III, the court-appointed trustee of Mr. Satterfield's Chapter 7 bankruptcy estate. The district court concluded that the suit was barred by Barton v. Barbour, 104 U.S. 126 (1881), because Mr. Satterfield's claims are based on actions Mr. Malloy took as trustee and Mr. Satterfield did not first obtain permission from the bankruptcy court. Mr. Satterfield contends that Barton does not apply because Mr. Malloy's actions were ultra vires. The U.S. Court of Appeals for the Tenth Circuit last week rejected Mr. Satterfield's contention. In affirming the lower court decision, the Tenth Circuit held that, because Mr. Malloy's allegedly wrongful actions were conducted as part of his duties as trustee, Barton bars suit absent permission from the appointing court. The Appeals Court further concluded that Mr. Satterfield's action is not authorized by 28 U.S.C. Sec. 959 because Mr. Malloy was not carrying on the business of the estate, but simply administering its liquidation. In June 2004, Mr. Satterfield pled guilty to certain federal criminal charges and was ordered to pay up to $1.7 million in restitution. Mr. Satterfield consulted various attorneys, including Mr. Malloy, to determine whether a declaration of bankruptcy would be appropriate. Mr. Malloy declined to represent Mr. Satterfield in bankruptcy proceedings, but obtained substantial information regarding Satterfield's finances as part of the consultation process. In August 2004, Mr. Satterfield voluntarily filed for Chapter 11 bankruptcy. The Office of the United States Trustee appointed Mr. Malloy as trustee of Mr. Satterfield's estate. Although Mr. Satterfield did not object to the appointment, he contends that he was not fully advised of potential areas of conflict that might arise as a result of Mr. Malloy acting as trustee. Over Mr. Satterfield's objections, the bankruptcy court converted his Chapter 11 proceeding to Chapter 7 in February 2006. Mr. Malloy continued to serve as trustee of the estate following conversion. In March 2006, Mr. Malloy, acting in his capacity as trustee, filed an application to be appointed attorney of the estate. Mr. Satterfield moved to disqualify Mr. Malloy as trustee and attorney for his estate, arguing that Mr. Malloy had violated provisions of the Bankruptcy Code and raising by implication questions of Mr. Malloy's compliance with professional ethical duties. Mr. Satterfield alleges that as a result of this motion, "Malloy engaged in a continuous course of conduct between 2006 and 2008 designed to retaliate against [Satterfield] for having raised an objection to [Malloy's] status as trustee and attorney for the [estate]." Specifically, Mr. Satterfield contends that Mr. Malloy: (1) deliberately acted to dissipate the value of the estate; (2) refused to report rents received as income, causing Mr. Satterfield to be assessed penalties and interest by the Internal Revenue Service; (3) allowed foreclosure on certain properties rather than making a good faith effort to sell them; (4) failed to provide for the adequate upkeep of estate property; (5) failed to preserve the value of property subject to foreclosure; (6) failed to preserve and/or prosecute a claim of reverse condemnation against the City of Tulsa; and (7) failed to exercise reasonable care in renting certain property to an individual who engaged in illegal activity on the property. In January 2010, Mr. Satterfield filed suit against Mr. Malloy in his individual capacity in federal district court. The district court dismissed the action pursuant to Mr. Malloy's Fed. R. Civ. P. 12(b)(6) motion, concluding that the Barton doctrine barred Mr. Satterfield's claims. Mr. Satterfield appealed. In Barton, the Supreme Court held that "before suit is brought against a receiver leave of the court by which he was appointed must be obtained." A plaintiff who brings such a suit, the Court explained, attempts to "obtain some advantage over the other claimants upon the assets in the receiver's hands." If allowed to proceed, "the court which appointed the receiver and was administering the trust assets would be impotent to restrain" such a plaintiff, complicating the proper administration of the estate. The case is, WILLIAM SATTERFIELD, Plaintiff-Appellant, v. PATRICK J. MALLOY, III, Defendant-Appellee, and JOHN DOE; RICHARD ROE, Defendants,No. 11-5144 (10th Cir.). A copy of the Eleventh Circuit's Nov. 28, 2012 decision is available at http://is.gd/2wm5jcfrom Leagle.com. WSG CORAL: Case Summary & 7 Unsecured Creditors ----------------------------------------------- Debtor: WSG Coral Springs, LP P.O. Box 546918 Miami Beach, FL 33181 Bankruptcy Case No.: 12-15882 Chapter 11 Petition Date: November 26, 2012 Court: U.S. Bankruptcy Court Middle District of Florida (Orlando) Debtor's Counsel: Jason H. Klein, Esq. LATHAM SHUKER EDEN & BEAUDINE LLP P.O. Box 3353 Orlando, FL 32802-3353 Tel: (407) 481-5800 Fax: (407) 481-5801 E-mail: bknotice@lseblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its seven largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb12-15882.pdf The petition was signed by Eric D. Sheppard, managing member of WSG Coral Springs GP, LLC, general partner. YOSHI'S SAN: Involuntary Chapter 11 Case Summary ------------------------------------------------ Alleged Debtor: Yoshi's San Francisco aka Yoshi's San Francisco LLC 510 Embarcadero West Oakland, CA 94607 Bankruptcy Case No.: 12-49432 Involuntary Chapter 11 Petition Date: November 27, 2012 Court: U.S. Bankruptcy Court Northern District of California (Oakland) Judge: Roger L. Efremsky Creditors who signed the Chapter 11 petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Yoshi's Japanese Restaurant, Inc. Loans and LOC $1,283,524 510 Embarcadero West Oakland, CA 94607 East Bay Restaurant Supply Inc. Supplies A/P $2,707 49 4th Street Oakland, CA 94607 Apex Refrigeration Corporation Services Due $504 1550 Park Avenue Emeryville, CA 94608 ZOGENIX INC: Appoints Scott Shively as EVP and CCO -------------------------------------------------- Zogenix, Inc., appointed Scott Shively as Executive Vice President and Chief Commercial Officer. Mr. Shively, 56, served as the Global Commercial Disease Area Lead for Pain and Global Commercial Medicine Team Lead of Pfizer, Inc., and as the Interim Head of Global Commercial Development for Pfizer's Primary Care Business Unit from October 2009 to November 2012, where he was also heavily involved in the establishment and potential business expansion of Pfizer's new Integrated Health Business Unit. From April 2007 to June 2008, Mr. Shively served as Senior Vice President for Commercial Operations at Alpharma Pharmaceuticals, a specialty pharmaceutical company focused on pain management, where he had leadership responsibility for sales, marketing, supply chain, business development, alliance management and Alpharma?s Ireland subsidiary. From October 2005 to March 2007, Mr. Shively was Senior Vice President for Global Respiratory at Altana AG and Interim President and Chief Executive Officer for Altana's U.S. operations, which included a sales force of over 500 representatives. Prior to that, Mr. Shively worked at subsidiaries of Sanofi-Aventis for nearly 20 years, where he had a variety of sales, marketing and commercial international and domestic leadership roles. Mr. Shively holds a B.S. in Zoology from Duke University, with a pre-medical focus. In connection with his appointment, the Company and Mr. Shively entered into an employment agreement, effective as of Nov. 26, 2012. Under the Employment Agreement, Mr. Shively's initial annual base salary will be $335,000, which amount will be subject to increase each year at the discretion of the board of directors of the Company or an authorized committee thereof. Mr. Shively will also be eligible to participate in an annual incentive program established by the Board. Mr. Shively's target annual incentive compensation under that incentive program will be 45% of his then- applicable annual base salary provided, however, that Mr. Shively's annual bonus for 2012 will be pro-rated based on the number of days elapsed during 2012 following his commencement of employment. The annual bonus payable will be based on the achievement of individual and Company performance goals to be determined in good faith by the Board or an authorized committee of the Board. Mr. Shively will also receive a one-time signing bonus of $130,000, subject to a right of repayment should he leave the Company prior to Aug. 31, 2013. Mr. Shively is also entitled to reimbursement for relocation expenses, up to a total of $100,000, subject to a right of repayment should he leave the Company prior to Nov. 26, 2013. Pursuant to the Employment Agreement, as soon as practicable following his commencement of employment, Mr. Shively will be awarded stock options to purchase 400,000 shares of the Company's common stock pursuant to the Company's 2010 Equity Incentive Award Plan, which stock options will vest over the four year period following his commencement of employment, subject to his continued employment with the Company on each applicable vesting date. The exercise price per share of those stock options will be the closing price per share of the Company's common stock on the date of grant. The Employment Agreement also contains standard confidentiality, non-competition and non-solicitation covenants. A copy of the Form 8-K is available for free at: http://is.gd/vrhRE7 About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Ernst & Young LLP, in San Diego, Calif., issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and lack of sufficient working capital. The Company reported a net loss of $83.90 million in 2011, a net loss of $73.56 million in 2010, and a net loss of $45.88 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $91.30 million in total assets, $78.01 million in total liabilities and $13.28 million in total stockholders' equity. * Moody's: Low-Rated Issuers' Healthcare Covenant Quality Weak -------------------------------------------------------------- Covenant quality usually improves further down the rating scale, but bonds issued by North American healthcare companies do not follow this trend, Moody's Investors Service says in a new report. Of the Caa-rated bonds reviewed, all but one in the healthcare sector had weaker covenant protection than the average of those issued by other North American non-financial corporates. "Low-rated instruments generally offer more covenant protection due to the higher probability of default," says Ron Neysmith, Vice President and author of the report, "North American Healthcare Bucks the Trend: Covenants are Weaker at Lower Rating Levels." "But at the Caa rating level we found this did not hold true for the healthcare sector." Liens subordination represents a weak spot in the high-yield healthcare sector, which had a weaker average Covenant Quality score for this factor than did North American non-financial corporate issuances overall. Some 80% of the healthcare issuances reviewed include a carve-out that allows additional secured borrowings senior to existing notes, provided a debt ratio test is met. Similarly, restricted payments covenants were weaker in Caa-rated deals in the healthcare sector. On Moody's five-point Covenant Quality scale, with 1 representing the strongest investor protection and 5 the weakest, these had an average score of 3.22, compared with 2.77 for similarly rated North American debt issuances. Moody's attributes healthcare's weakness at the Caa rating level to the high concentration of private equity sponsors in the sector. Private equity was involved in about two thirds of healthcare issuances, compared with about one third for all North American high-yield issuances. "A higher percentage of healthcare issuances include a carve-out that allows companies to make unlimited restricted payments as long as leverage remains below a certain threshold, which allows companies to pay excessive dividends," Neysmith says. "Of the private equity-sponsored debt issuances we looked at, 13% in the healthcare sector were dividend-related, compared with 5.5% for all North American non-financial corporates. Despite the weakness at the low end of Moody's rating scale, however, overall the 54 high-yield healthcare debt issuances reviewed had an average Covenant Quality score of 3.41, close to the average of 3.36 for all North American non-financial corporates." * Junk Defaults to Jump in November and December ------------------------------------------------ According to Bloomberg News bankruptcy columnist Bill Rochelle, Fitch Ratings Ltd. said in a report that junk-bond defaults will jump in the last two month of the year. There were no defaults in October, lowering the 12-month default rate to 1.9%, Fitch said. Fitch is predicting $5.5 billion in defaults by five issuers during November and December. A surge in defaults during November and December also occurred in 2010 and 2011. By the year's end, Fitch predicts 30 issuers will have defaulted on $18.9 billion in debt, causing the default rate to reach 2%. The Fitch report said secured junk bonds now total $250 billion, or 22.4%, of junk debt. Nonetheless, secured status isn't protecting those bonds from low ratings. Fitch said that 24.6% of secured junk debt has a rating of CCC or lower, compared with 19.5% for the remainder of the market. * Lawsuit Against Trustee Barred by 1881 Supreme Court Ruling ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Denver shed light on the question of when a trustee can be sued outside of bankruptcy court under an 1881 decision from the Supreme Court called Barton v. Barbour and Section 959 of the federal Judiciary Code. According to the report, the case involved an individual who took a guilty plea and agreed to pay $1.7 million in restitution. Along the way, he consulted with a lawyer about filing for bankruptcy. When he filed for Chapter 11 reorganization later, the same lawyer was named trustee and continued in that role when the case converted to Chapter 7 liquidation. The bankrupt sued the trustee outside of bankruptcy court, contending he mismanaged the estate in retaliation for an objection to eligibility for service as trustee. The district court dismissed the suit under the Barton doctrine for failure to obtain permission to sue from the bankruptcy court. The report relates that Circuit Judge Carlos F. Lucero upheld dismissal, saying the suit was indeed barred by Barton. The appeals court rejected the argument that the trustee could be sued because his actions were ultra vires. Lucero said the complained- of actions were related to the trustee's official duties, thus barring suit even if "taken with improper motives." Judge Lucero also upheld dismissal of the suit under Section 959, which permits suits against a trustee for actions "in carrying on business" of the estate. Courts, Lucero said, make a distinction between continuing the operations of a business and "simply winding up the estate's affairs." Because the trustee's actions were part of liquidation, the suit was also barred under Section 959. The case is Malloy v. Roe (In re Satterfield), 11-05144, U.S. Court of Appeals for the Tenth Circuit (Denver). * 7th Cir. Appoints Catherine Furay as W.D. Wis. Bankruptcy Judge ----------------------------------------------------------------- The Seventh Circuit Court of Appeals appointed Bankruptcy Judge Catherine J. Furay to a fourteen-year term of office in the Western District of Wisconsin, effective January 3, 2013, (vice, Utschig). Honorable Catherine J. Furay United States Bankruptcy Court United States Courthouse 500 South Barstow Street, Room 100 Eau Claire, WI 54701 Mailing address: United States Bankruptcy Court United States Courthouse P.O. Box 5009 Eau Claire, WI 57402-5009 Telephone: 715-839-2985, ext. 119 Fax: 715-839-2996 Judicial Assistant Cythia K. Korbol 715-839-2980, ext. 117 Term expiration: January 2, 2027 * BOND PRICING -- For Week From Nov. 26 to 30, 2012 --------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AES EASTERN ENER 9.000 1/2/2017 3.570 AES EASTERN ENER 9.670 1/2/2029 4.000 AGY HOLDING COR 11.000 11/15/2014 49.250 AHERN RENTALS 9.250 8/15/2013 66.000 ALION SCIENCE 10.250 2/1/2015 51.310 AM AIRLN PT TRST 10.180 1/2/2013 93.000 AMBAC INC 6.150 2/7/2087 5.660 ARK OF SAFETY 8.000 4/15/2029 6.000 ATP OIL & GAS 11.875 5/1/2015 9.125 ATP OIL & GAS 11.875 5/1/2015 9.125 ATP OIL & GAS 11.875 5/1/2015 9.683 BUFFALO THUNDER 9.375 12/15/2014 35.375 CALIF BAPTIST 7.100 4/1/2014 4.500 CAPMARK FINL GRP 6.300 5/10/2017 2.000 CAR-CALL12/12 7.750 5/15/2016 102.700 CBB-CALL12/12 7.200 11/29/2023 94.077 CENTRAL EUROPEAN 3.000 3/15/2013 54.000 CERADY-CALL12/12 2.875 12/15/2035 100.110 CHAMPION ENTERPR 2.750 11/1/2037 1.000 COLONIAL BANK 6.375 12/1/2015 0.125 DIRECTBUY HLDG 12.000 2/1/2017 19.625 DIRECTBUY HLDG 12.000 2/1/2017 19.625 DOWNEY FINANCIAL 6.500 7/1/2014 58.125 DYN-RSTN/DNKM PT 7.670 11/8/2016 4.875 EASTMAN KODAK CO 7.000 4/1/2017 9.250 EASTMAN KODAK CO 7.250 11/15/2013 9.000 EASTMAN KODAK CO 9.200 6/1/2021 9.000 EASTMAN KODAK CO 9.950 7/1/2018 9.375 EDISON MISSION 7.500 6/15/2013 49.820 ENERGY CONVERS 3.000 6/15/2013 40.000 FIBERTOWER CORP 9.000 11/15/2012 14.250 FIBERTOWER CORP 9.000 11/15/2012 13.875 FIBERTOWER CORP 9.000 1/1/2016 30.000 FRIENDSHIP WEST 8.000 6/15/2024 9.100 GEOKINETICS HLDG 9.750 12/15/2014 41.350 GLB AVTN HLDG IN 14.000 8/15/2013 32.000 GLOBALSTAR INC 5.750 4/1/2028 44.310 GMX RESOURCES 4.500 5/1/2015 46.250 GMX RESOURCES 5.000 2/1/2013 89.000 HAWKER BEECHCRAF 8.500 4/1/2015 9.000 HAWKER BEECHCRAF 8.875 4/1/2015 5.250 HILTON HOTELS 7.625 12/1/2012 99.875 HUTCHINSON TECH 8.500 1/15/2026 59.000 JEHOVAH-JIREH 7.800 9/10/2015 10.000 LEHMAN BROS HLDG 0.250 12/12/2013 20.375 LEHMAN BROS HLDG 0.250 1/26/2014 20.375 LEHMAN BROS HLDG 1.000 10/17/2013 20.375 LEHMAN BROS HLDG 1.000 3/29/2014 20.375 LEHMAN BROS HLDG 1.000 8/17/2014 20.375 LEHMAN BROS HLDG 1.000 8/17/2014 20.375 LEHMAN BROS HLDG 1.250 2/6/2014 20.375 LIFECARE HOLDING 9.250 8/15/2013 14.310 LIFEPOINT CMNTY 8.400 10/20/2036 4.000 MANNKIND CORP 3.750 12/15/2013 67.750 MASHANTUCKET PEQ 8.500 11/15/2015 15.750 MASHANTUCKET PEQ 8.500 11/15/2015 5.250 MASHANTUCKET TRB 5.912 9/1/2021 5.250 METRO BAP CHURCH 8.400 1/12/2029 4.000 MF GLOBAL LTD 9.000 6/20/2038 67.000 NEWPAGE CORP 10.000 5/1/2012 5.250 NEWPAGE CORP 11.375 12/31/2014 44.500 NGC CORP CAP TR 8.316 6/1/2027 13.000 OVERSEAS SHIPHLD 8.750 12/1/2013 35.000 PBY-CALL12/12 7.500 12/15/2014 99.052 PEBO-CALL12/12 8.620 5/1/2029 100.000 PENSON WORLDWIDE 8.000 6/1/2014 42.466 PMI CAPITAL I 8.309 2/1/2027 1.375 PMI GROUP INC 6.000 9/15/2016 28.750 POWERWAVE TECH 3.875 10/1/2027 10.000 POWERWAVE TECH 3.875 10/1/2027 10.398 RESIDENTIAL CAP 6.500 4/17/2013 23.563 RESIDENTIAL CAP 6.875 6/30/2015 23.420 REVEL AC INC 12.000 3/15/2018 5.750 SAVIENT PHARMA 4.750 2/1/2018 24.000 SCHOOL SPECIALTY 3.750 11/30/2026 51.500 SCI-CALL12/12 7.375 10/1/2014 112.180 TERRESTAR NETWOR 6.500 6/15/2014 10.000 TEXAS COMP/TCEH 10.250 11/1/2015 17.125 TEXAS COMP/TCEH 10.250 11/1/2015 19.440 TEXAS COMP/TCEH 10.250 11/1/2015 18.850 TEXAS COMP/TCEH 15.000 4/1/2021 27.250 TEXAS COMP/TCEH 15.000 4/1/2021 34.250 THQ INC 5.000 8/15/2014 23.375 TIMES MIRROR CO 7.250 3/1/2013 38.050 TL ACQUISITIONS 10.500 1/15/2015 25.526 TL ACQUISITIONS 10.500 1/15/2015 30.500 TOUSA INC 7.500 3/15/2011 2.000 TRAVELPORT LLC 11.875 9/1/2016 38.090 TRAVELPORT LLC 11.875 9/1/2016 36.625 TRIBUNE CO 5.250 8/15/2015 37.825 USEC INC 3.000 10/1/2014 35.550 VERSO PAPER 8.750 2/1/2019 34.200 VERSO PAPER 11.375 8/1/2016 33.375 WCI COMMUNITIES 4.000 8/5/2023 0.500 WCI COMMUNITIES 4.000 8/5/2023 0.500 WCI COMMUNITIES 6.625 3/15/2015 0.625 ********* 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 ***