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/raid1/www/Hosts/bankrupt/TCR_Public/130107.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, January 7, 2013, Vol. 17, No. 6 Headlines 1617 WESTCLIFF: Hearing on Plan Exclusivity Extension 500 CENTER: Voluntary Chapter 11 Case Summary A.D.A. GROUP: Case Summary & 20 Largest Unsecured Creditors ACE HARDWARE: Case Summary & 20 Largest Unsecured Creditors AMERICAN AIRLINES: Revises Boeing, GE & Rolls-Royce Pacts AMERICAN AIRLINES: Agreement Amendment Approval Sought AMERICAN DEFENSE: Dale Scales and Joseph Van Hecke Join Board AMERICAN TOWER: S&P Gives 'BB+' Rating on $500MM Unsecured Notes AMF BOWLING: Court Approves Hiring of Bankruptcy Professionals ATP OIL: Panel Objects to Request to Extend Exclusive Periods BAKERS FOOTWEAR: Gives Up on Reorganizing, To Begin GOB Sales BERNARD L. MADOFF: JPMorgan Faces Sanctions in U.S. Probe BLUE RIDGE: Case Summary & 20 Largest Unsecured Creditors BORDERS GROUP: Trustee Looks to Recover Millions in Lawsuit Blitz BOWLES SUB: Has Court's Nod to Hire Anton Economics as Economist CAPITOL BANCORP: Panel Taps Harrington Dragich as Special Counsel CELL THERAPEUTICS: Estimates $5.8 Million Net Loss in November CENTRAL EUROPEAN DISTRIBUTION: Has Revised Deal With Roust Trading CHESTERFIELD VALLEY: Fitch Affirms 'BB' Rating on Revenue Bonds CIVIC PARTNERS: Dispute With Sioux City Goes to Trial COUNTRYWIDE FIN'L: FDIC Suit Over $108MM in MBS Has Legs: Judge CPI CORP: Incurs $20.2-Mil. Net Loss in 16 Weeks Ended Nov. 10 CROWN AMERICAS: Moody's Affirms Ba1 CFR; Rates $800MM Notes Ba2 DAMES POINT: Case Summary & 2 Unsecured Creditors DESERT HAWK: Board Corrects Note Terms to Clarify Interest Payment DIAGNOSTIC VENTURES: Clifford Chance Wins in Securities Suit DEWEY & LEBOEUF: Judge Postpones Approval of Disclosure Statement DIALOGIC INC: Hearing on NASDAQ Appeal Set for March 7 DIGITAL DOMAIN: Disney Trying to Upset Patent Sale DYNASIL CORP: Filing of 2012 Form 10-K Will Be Delayed EAST COAST DIVERSIFIED: Amends 2011 Annual Report on Form 10-K EASTMAN KODAK: Files Valuation, Profitability Report With SEC EASTMAN KODAK: Kyocera Sues Over Camera, Printer Patents ECOSPHERE TECHNOLOGIES: Dean Becker and John Brewster Join Board EMMIS COMMUNICATIONS: Operating Unit Has $100MM Credit Facility FELCOR LODGING: S&P Ups Issuer Credit Rating to 'B+' FNBH BANCORP: Investors Offer to Buy $26.7MM in Securities FR 160: Pre-Trial Conferences Scheduled for Jan. 22, and Feb. 19 FREDERICK DARREN BERG: Commerce Bank Wins Dismissal of Trust Suit GAME TRADING: Hastings Wins More Time to Challenge Claim Objection GENE CHARLES: Has Court OK to Hire Lederman Zeidler as Accountant GENERAL MOTORS: Could Face $918MM Hit from Chap. 11-Related Suit GOLD RESERVE: Gets NYSE MKT Notice of Delisting Application GOTHAM CITY: Case Summary & 2 Unsecured Creditors GRANITE DELLS: Court Denies LLC's Motion to Quash Subpoenas HANKAMER VENTURES: Voluntary Chapter 11 Case Summary HAWKER BEECHCRAFT: Kaye Scholer Approved for Compliance Issues HAWKER BEECHCRAFT: Bank Debt Trades at 46% Off in Secondary Market HEALTHCARE FULFILLMENT: Case Summary & 20 Largest Unsec Creditors HEALTHCARE OF FLORENCE: Court Dismisses Chapter 11 Bankruptcy Case HEALTHWAREHOUSE.COM INC: Incurs $1.6-Mil. Net Loss in 2nd Quarter HEARTLAND DENTAL: Moody's Lifts Rating on Sr. Facilities to 'Ba3' HMX ACQUISITION: Feb. 5 Fixed as General Claims Bar Date HOMEWARD RESIDENTIAL: S&P Cuts Issuer Credit Rating to 'B' HORIZON LINES: Zendan Promoted to EVP, Receives Pay Hike HOSTESS BRANDS: Said to Be In Talks With Flowers, Grupo Bimbo INNER CITY: Court Denies Plea to Appoint Chapter 11 Trustee INSTITUTE FOR NEUROLOGIC: Files Bankruptcy to Counter Receivership INTERFAITH MEDICAL: Taps Nixon Peabody as Corporate Counsel ISC8 INC: Posts $19.6MM Net Loss in FY2012; Forbearance Extended JER/JAMESON MEZZ: Plan Declared Effective Dec. 18 KESTREL TECHNOLOGIES: Updated Case Summary & Creditors' Lists LBI MEDIA: Completes Exchange with Right to PIK New Bonds LBI MEDIA: S&P Lowers Corporate Credit Rating to 'SD' LDK SOLAR: Chinese Agency Orders Payment of RMB294-MM to Supplier LEGENDS GAMING: Chickasaw Tribe Has Buyer's Remorse LEHMAN BROTHERS: Faith Claims Stick in Fidelity Coverage Row LOS ANGELES DODGERS: McCourt's Ex-Wife Can't Depose Blackstone LOUISIANA HOUSING: S&P Raises Rating on 2009B Bonds to 'BB LOWER BUCKS: District Court Agrees BoNY Release Impermissible MARKETING WORLDWIDE: Delays Form 10-K for Fiscal 2012 MERIDIAN MORTGAGE: Commerce Bank Wins Dismissal of Trust Suit MERUS LABS: Recurring Losses Cue Going Concern Doubt METALDYNE LLC: Moody's Withdraws 'B1' CFR/PDR After Takeover MGM RESORT: Fitch Rates New $4-Bil. Credit Facility 'BB/RR1' MONITOR CO: Seeks to Maintain Secrecy About Client List MSR RESORT: Has Licensing Deal on Use of PGA Name NEW ENGLAND COMPOUNDING: Mass. Gov. Wants Overhaul to Oversight NNN LENOX: Sec. 341 Meeting of Creditors Today NORTEL NETWORKS: Settles with Retirees Committee OMEGA NAVIGATION: Junior Lenders Object to Settlement Deals PEMBERLY PARTNERS: Voluntary Chapter 11 Case Summary PINNACLE AIRLINES: Asks Judge to OK $52M Deals With Pilots, Delta PINNACLE AIRLINES: Has Delta-Backed Bankruptcy Exit Plan PMI GROUP: Note Sale Approval Sought QUAMTEL INC: Peter Sperling Appointed to Board of Directors QUANTUM FUEL: May Sell Up to $5MM in Shares to Ascendiant RESIDENTIAL CAPITAL: To Sell $130 Million in FHA-Backed Loans RICH LEARNING: Shareholder Did Not Violate Cash Collateral Accord SAFETY-KLEEN: S&P Raises Corporate Credit Rating to 'BB+' SEA ISLAND: Claims Objection Deadline Extension Doesn't Alter Plan SECUREALERT INC: Delays Form 10-K for Fiscal 2012 SHETTERLY L.P.: Case Summary & 15 Largest Unsecured Creditors SIAG AERISYN: Pa. Court Transfers Siskin Lawsuit to E.D. Tenn. SIONIX CORPORATION: Incurs $5.8-Mil. Net Loss in Fiscal 2012 SMOOT GROUP: Voluntary Chapter 11 Case Summary STINSON PETROLEUM: Former VP Liable for $2.7MM Damages to Bank TC GLOBAL: Grey's Anatomy Actor's Investment Group Wins Auction TELECONNECT INC: Incurs $3.8 Million Net Loss in Fiscal 2012 TELIGENT INC: Judge Vacates Judgment Uncollected for 7 Years THQ INC: Court Rejects DIP Loan, Slows Down Sale Process TIGER MEDIA: Raises $2.1-Mil. From Exercise of Warrants TXU CORP: Bank Debt Trades at 33% Off in Secondary Market TXU CORP: Bank Debt Trades at 24% Off in Secondary Market UNIVERSAL BIOENERGY: May Sell Up to 3-Billion of Shares UPPER CRUST: Court Rejects Buyout Offer From Lawyer, Ex-Employees VS FOX: U.S. Trustee, Creditors Want Case Converted to Ch. 7 WARNER MUSIC: CEO, CFO Sign New Employment Pacts, Get Pay Hike WILLIAM D. HALL: Former Counsel Loses Bid to Modify Fee Award WPCS INTERNATIONAL: Has Until June 24 to Regain Nasdaq Compliance * Equity Firms May Seek New Bank Exit Plans in '13, Fitch Says * Fitch Says U.S. Prime Auto ABS Losses Hold Steady * US Prime MMF Exposure to Eurozone Banks Up in 5 Mos., Fitch Says * Slow Growth in U.S. Power Use to Add Pressure to Some Entities * Cleary Gottlieb Blasts Subpoena in $1.4B Argentina Debt Suit * Manhattan District Judge Barbara Jones Joins Zuckerman Spaeder * Schulte Roth & Zabel Elects New Partner & Promotes Associates * BOND PRICING -- For Week From Dec. 31 to Jan. 4, 2013 ********* 1617 WESTCLIFF: Hearing on Plan Exclusivity Extension ----------------------------------------------------- 1617 Westcliff, LLC asks the U.S. Bankruptcy Court for the Central District of California to extend its exclusive periods to file and solicit acceptances for the proposed Plan of Reorganization until Jan. 31, 2013, and March 31, respectively. A Jan. 7, 2012 hearing at 2 p.m. has been set. The Debtor needs more time to finalize the proposed Plan. The Debtor notes that prior to the Oct. 15, expiration of its exclusive period, it filed a motion for order authorizing sale of the property and a Plan which both provided that unless the Bank - - Wells Fargo Bank, N.A., as trustee for the Registered Holders of Credit Suisse First Boston Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2004-C3 -- agreed to different treatment on account of its claim, the Bank would receive, in full satisfaction of its claim, these treatment: on the closing date, the Debtor would cure all defaults that exist under the deed of trust securing the Bank's claim; reinstate the maturity of the claim, compensate the Bank for any damage incurred as a result of reasonable reliance on the contractual provision or applicable law, and not otherwise alter the legal, equitable, or contractual rights of the Bank. The Bank has objected to the proposed claim treatment and indicated it would not entertain the required assumption of its debt under these conditions, and filed limited opposition to the sale. In this connection, the Debtor has withdrawn the sale motion, and the Plan. On Nov. 30, 2012, the Debtor filed a new motion for order authorizing sale of the property. The Debtor and the Bank have reached agreement in principle, to be memorialized in an appropriate stipulation to be filed before the hearing on the sale motion, and that the sale of the property will proceed on an assumption basis. About 1617 Westcliff 1617 Westcliff, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-19326) on Aug. 2, 2012, in Santa Ana, California. The Debtor estimated assets of $10 million to $50 million and liabilities of $1 million to $10 million. Bankruptcy Judge Mark S. Wallace oversees the case. D. Edward Hays, Esq., at Marshack Hays LLP, serves as the Debtor's counsel. 500 CENTER: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: 500 Center LLC 517 South Locust Denton, TX 76201 Bankruptcy Case No.: 12-43520 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: James Scott Reib, Jr., Esq. THE REIB FIRM PLLC 412 S. Carroll Blvd., Suite 1000 Denton, TX 76201 Tel: (940) 591-0600 Fax: (866) 543-0053 E-mail: scott@reiblaw.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 David Dennis, member. A.D.A. GROUP: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: A.D.A. Group, Inc. dba Central C-Store dba Bobtown Pit Stop P.O. Box 740788 Dallas, TX 75274 Bankruptcy Case No.: 12-43532 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Gary G. Lyon, Esq. THE WILLINGHAM LAW FIRM 6401 W. Eldorado Parkway, Suite 206 McKinney, TX 75070 Tel: (214) 250-4407 Fax: (866) 309-7476 E-mail: glyon.attorney@gmail.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 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/txeb12-43532.pdf The petition was signed by Dickson Alao, president/sole shareholder. ACE HARDWARE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Ace Hardware & Building Center, Inc. P.O. Box 1280 Blue Ridge, GA 30513 Bankruptcy Case No.: 12-24428 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Gainesville) Judge: Robert Brizendine Debtor's Counsel: J. Hayden Kepner, Jr., Esq. SCROGGINS & WILLIAMSON 1500 Candler Bldg. 127 Peachtree Street, NE Atlanta, GA 30303 Tel: (404) 893-3880 E-mail: hkepner@swlawfirm.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 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ganb12-24428.pdf The petition was signed by James Lamar Lance, owner, manager. AMERICAN AIRLINES: Revises Boeing, GE & Rolls-Royce Pacts --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp. filed papers in bankruptcy court seeking approval of modified agreements with aircraft and engine manufacturers. The parent of American Airlines Inc. also is giving up three of six gates at Newark Liberty International Airport in New Jersey. According to the report, the modified arrangements, to remain binding on AMR when it emerges from reorganization, will come up for approval at a Jan. 23 hearing in U.S. Bankruptcy Court in Manhattan. The economic terms of the arrangements aren't disclosed publicly. The report discloses that the most comprehensive agreement is with Boeing Co. to purchase new aircraft models, including the 737 Max. There are also agreements with engine makers Rolls-Royce Plc and General Electric Co. The agreement with Boeing provides for the manufacturer to provide financing for new aircraft purchases. Airbus SAS will be the recipient of a court-approved agreement providing for AMR to purchase A320 aircraft. According to the report, the agreements with aircraft and engine manufacturers follows AMR's conclusion of new contracts with labor unions. Nailing down future operating costs is a step in preparation for filing a reorganization plan that may or may not include a merger with US Airways Group Inc. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Agreement Amendment Approval Sought ------------------------------------------------------ AMR filed with the U.S. Bankruptcy Court a motion for approval to amend its agreement with the Port Authority of New York and New Jersey and reject certain Slot Lease Agreements with United Airlines and Porter Airlines at Newark Liberty International Airport, BankruptcyData reported. According to AMR, the proposed surrender of excess gates will provide the Debtors an estimated $25.4 million in savings over the term of the amended lease agreement, the report related. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN DEFENSE: Dale Scales and Joseph Van Hecke Join Board ------------------------------------------------------------- American Defense Systems Inc. announced the resignations of Alfred Gray, Victor Trizzino, Stephen Seiter, Pasquale D'Amuro, and Kevin Healy from its Board of Directors effective on Dec. 21, 2012, and, concurrently, has appointed Dale S. Scales and Joseph Van Hecke to serve as members of its Board. In connection with the Board resignations, the Company and certain stockholders who make up more than 55% of the outstanding shares of the Company's common stock have also entered into mutual release agreements with the resigning Board members. Mr. Scales has been appointed Chairman and will also serve as President and Chief Executive Officer of the Company. Mr. Scales will replace Alfred Gray who has been serving as the Company's interim Chief Executive Officer. Mr. Scales commented, "I am thrilled for the Company and its stockholders to finally come to an agreement with the resigning members of the Board of Directors. This has been a long process but in the end, believe the best interests of the stockholders were served. The incoming Directors have already spent significant resources and time evaluating the Company's past, current and future position in order to hopefully grow stockholder value in the near and long term future. Our main objective for the Company is to now move forward in a positive direction. We look forward and believe the Company has great opportunities to leverage its unique assets and strong engineering capabilities to drive growth in revenue and cash flow." Prior to joining the Company, Mr. Scales, 47, worked as a consultant specializing in private equity and venture capital investments, risk analysis, corporate finance strategies and operational management restructurings. From 2003 to 2009, Mr. Scales served as Managing Director and founding member of OBX Capital Group LLC, a consulting firm specializing in private equity and venture capital investments. Prior to this role, Mr. Scales served from 2001 to 2002 as VP of Finance and Board Member for Mobile Reach Technologies Inc. From 1988 to 2001, Mr. Scales worked for Stafford Trading Group, Banque National De Paris Securities, S&J Derivatives, and NationsBank-CRT Options L.P., in Germany, Japan and the US in their prospective derivative markets. Mr. Scales previously served as a member of the board of directors of Active Data Services, a data capturing company, from 2005 to 2009. Mr. Scales currently serves on the Board of Polka Dot Kids Foundation, a non-profit organization that supports and promotes literacy and early childhood development and education. He is also an active supporter of the Armed Forces Network and UNC-TV. Mr. Scales graduated with B. A. in Economics from Wheaton College in 1986. Mr. Van Hecke, 39, is currently the Managing Member of the Grace Hall Companies. Grace Hall Capital is an asset management firm with over $30mil invested in hedge funds for its clients in various asset classes. Grace Hall Trading is a proprietary trading firm that executes trades in numerous U.S. markets including equities, equity options, and futures. From 1998 to 2007, Mr. Van Hecke served as a partner and Head Trader at Capital Markets Trading, a proprietary trading firm specializing in electronic trading of derivatives. Prior to this role, Mr. Van Hecke served from 1996 to 1998 as a trader with Bank of America in the Frankfurt, Germany office. Mr. Van Hecke is currently a partner and supporter of the Act of Giving a Seattle-based non-for-profit focused on various charitable ventures. Mr. Joseph Van Hecke graduated with B. B. A. in Finance from the University of Notre Dame in 1996. About American Defense Hicksville, N.Y.-based American Defense Systems, Inc., is a defense and security products company engaged in three business areas: customized transparent and opaque armor solutions for construction equipment and tactical and non-tactical transport vehicles used by the military; architectural hardening and perimeter defense, such as bullet and blast resistant transparent armor, walls and doors. The Company also operates the American Institute for Defense and Tactical Studies. The Company is in the process of negotiating a sale or disposal of the portion of its business related to the operation of a live-fire interactive tactical training range location in Hicksville, N.Y. The portion of the Company's business related to vehicle anti-ram barriers such as bollards, steel gates and steel wedges that deploy out of the ground was sold as of March 22, 2011. After auditing the 2011 financial statements, Marcum LLP, in Melville, New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company had a working capital deficiency of $867,000, an accumulated deficit of $17.0 million, shareholders' deficiency of $235,000 and cash on hand of $132,000. The Company had operating losses of $3.30 million and $3.69 million for the years ended Dec. 31, 2011 and 2010, respectively. The Company had income from continuing operations for the year ended Dec. 31, 2011, of $6.83 million, including a gain of $12.8 million on the redemption of mandatorily redeemable preferred stock, and a loss from continuing operations for the year ended Dec. 31, 2010, of $8.17 million. The Company had net income (losses) of $9.37 million and $(9.38 million) for the years ended Dec. 31, 2011 and 2010, respectively. The Company's balance sheet at Sept. 30, 2012, showed $1.76 million in total assets, $2.55 million in total liabilities, all current, and a $796,413 total shareholders' deficiency. AMERICAN TOWER: S&P Gives 'BB+' Rating on $500MM Unsecured Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services has assigned its 'BB+' issue- level rating and '3' recovery rating to Boston, Mass.-based wireless tower operator American Tower Corp.'s (BB+/Stable/--) proposed $500 million senior unsecured notes issue. Proceeds will be used to repay borrowings under the company's revolving credit facility to fund recent acquisitions. The company has been very active in recent quarters in expanding both its domestic and international assets, the latter of which includes towers in Brazil, Germany, Mexico, Uganda, South Africa, and Colombia. "Our 'BB+' corporate credit rating on American Tower reflects the company's aggressive financial risk profile, with leverage, pro forma for recent acquisitions, expected to exceed 5x (including our adjustment for operating leases), and which largely overshadows its strong business risk profile)," S&P said. RATINGS LIST American Tower Corp. Corporate credit rating BB+/Stable/-- Rating Assigned $500 million unsecured notes BB+ Recovery rating 3 AMF BOWLING: Court Approves Hiring of Bankruptcy Professionals -------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia authorized AMF Bowling Worldwide Inc. to employ: 1. Kirkland & Ellis LLP as counsel; 2. McGuireWoods LLP as counsel; and 3. Moelis & Company LLC as financial advisor and investment banker. 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. The petitions were signed by Stephen D. Satterwhite, chief financial officer/chief operating officer. 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 Official Committee of Unsecured Creditors is represented by lawyers at Pachulski Stang Ziehl & Jones LLP, and Christian & Barton LLP. ATP OIL: Panel Objects to Request to Extend Exclusive Periods ------------------------------------------------------------- ATP Oil & Gas' official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Debtors' motion to extend the exclusive period during which the Company can file a Chapter 11 plan and solicit acceptances thereof through June 17, 2013 and August 12, 2013, respectively, BankruptcyData reports. According to the report, the committee asserts, "Having contractually bound itself to liquidate substantially all of its assets for the sole benefit of the DIP Lenders unless a highly conditional plan of reorganization can be consummated in the near term, the Committee finds it extraordinary that the Debtor is seeking any extension of exclusivity, never mind one that would extend beyond the closing of the liquidation that the Debtor has obligated itself to pursue. Not only has the Debtor failed to demonstrate good faith progress toward a reorganization, its commitment to liquidate its assets in the near term absent extraordinary circumstances -- effectuating a plan that pays the DIP Lenders' claims in full in cash (i.e., over $625 million) or otherwise meets with the DIP Lenders' approval -- reflects the opposite." The ad hoc committee of holders of the 11.875% Senior Second Lien Notes also objected to the same motion, stating, "Having made no progress on a plan of reorganization during the first 120 days -- and having entered into post-petition financing arrangements that have resulted in a forced sale -- the Debtor has offered no sound basis to restrict the options of its creditors, including their ability to propose a plan of reorganization," the report added. The Court previously scheduled a January 10, 2013 hearing on the motion. 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. BAKERS FOOTWEAR: Gives Up on Reorganizing, To Begin GOB Sales ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Bakers Footwear Group Inc. gave up hope of reorganizing around a core of 63 stores. Bakers began going-out- of-business sales at 150 stores in November. Last month, the company filed a proposed Chapter 11 plan intending to reorganize around the remaining 63 locations. According to the report, in papers filed Jan. 2 in U.S. Bankruptcy Court in St. Louis, the mall-based young women's shoe retailer said no one would buy the remaining chain and the principal secured lender wouldn't agree to a restructuring. There will be a hearing in bankruptcy court on Jan. 9 for authority to hire Great American Group LLC as consultant to run going-out-of-business sales at the remaining stores. The sales are to be completed by the end of February. Great American will receive a fee of 1.45% of gross sales, along with $560 a day for each supervisor. Bakers will pay all operating expenses during the sales. About Bakers Footwear Bakers Footwear Group Inc., a mall-based retailer of shoes for young women, filed for bankruptcy protection (Bankr. E.D. Mo. Case No. 12-49658) in St. Louis on Oct. 3, 2012, after announcing a plan to close stores and reduce costs. Bakers was founded in St. Louis in 1926 as Weiss-Kraemer, Inc., later renamed Weiss and Neuman Shoe Co., a regional chain of footwear stores. In 1997, Bakers was acquired principally by its current chief executive officer, Peter Edison, who had previously served in various senior management positions at Edison Brothers Stores Inc. In June 1999, Bakers purchased selected assets of the "Bakers" and "Wild Pair" footwear retailing chains from the bankruptcy estate of Edison Brothers. The "Bakers" footwear retailing chain was founded in 1924 and is the third-oldest soft goods retail concept still in operation in the United States. In February 2001, the Debtor changed its name to Bakers Footwear Group, Inc. In February 2004, Bakers conducted an initial public offering of its common stock. Bakers' common stock is quoted under the ticker symbol "BKRS" on the, the OTC Markets Group's quotation platform. As of the Petition Date, Bakers operates roughly 215 stores nationwide. In November 2012, the U.S. Bankruptcy Court in St. Louis authorized the company to hire a joint venture between SB Capital Group LLC and Tiger Capital Group LLC as agents to conduct closing sales for 150 stores. Bankruptcy Judge Charles E. Rendlen III presides over the case. Brian C. Walsh, Esq., David M. Unseth, Esq., and Laura Uberti Hughes, Esq., at Bryan Cave LLP, serve as the Debtor's counsel. Alliance Management serves as financial and restructuring advisors. Donlin, Recano & Company, Inc., serves as claims agent. The petition was signed by Peter A. Edison, chief executive officer and president. The Company's balance sheet at April 28, 2012, showed $41.90 million in total assets, $59.49 million in total liabilities and a $17.59 million total shareholders' deficit. Counsel for Crystal Financial, the DIP Lender, are Donald E. Rothman, Esq., at Riemer & Braunstein LLP; and Lisa Epps Dade, Esq., at Spencer, Fane, Britt & Brown, LLP. Bradford Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the Official Committee of Unsecured Creditors. BERNARD L. MADOFF: JPMorgan Faces Sanctions in U.S. Probe --------------------------------------------------------- The inspector general of the U.S. Department of the Treasury has threatened to sanction JPMorgan Chase & Co. unless it turns over information to federal regulators probing the bank's alleged role in Bernard L. Madoff's Ponzi scheme, according to a letter made public Friday, Max Stendahl of BankruptcyLaw360 reported. Eric Thorson told JPMorgan general counsel Stephen Cutler in a Dec. 21 letter that the bank had until Jan. 11 to turn over unspecified documents to the Office of the Comptroller of the Currency, an arm of the Treasury Department that is conducting the investigation, the reported noted. 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. BLUE RIDGE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Blue Ridge Limousine and Tour Service, Inc. 7504 Inzer Street Springfield, VA 22151 Bankruptcy Case No.: 12-17551 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court Eastern District of Virginia (Alexandria) Judge: Brian F. Kenney Debtor's Counsel: Christopher A. Jones, Esq. Justin Fasano, Esq. WHITEFORD TAYLOR & PRESTON, LLP 3190 Fairview Park Drive Suite 300 Falls Church, VA 22042 Tel: (703) 280-9263 Fax: (703) 280-8942 E-mail: cajones@wtplaw.com jfasano@wtplaw.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 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/vaeb12-17551.pdf The petition was signed by R. Neill Jefferson, president. BORDERS GROUP: Trustee Looks to Recover Millions in Lawsuit Blitz ----------------------------------------------------------------- The liquidating trustee for Borders Group Inc. launched 93 clawback suits against a wide range of companies including Universal Music & Video Distribution Inc., Dell Marketing LP and A&E Home Video Corp., seeking to recover a total of approximately $23 million, Maria Chutchian of BankruptcyLaw360 reported. Trustee Curtis R. Smith says each of the transfers he is seeking to recover through the adversary proceedings were made within 90 days before the fallen book retailer filed its voluntary Chapter 11 petition and while it was insolvent. About Borders Group Borders Group operated book, music and movie superstores and mall based bookstores under the Borders, Waldenbooks, Borders Express and Borders Outlet names, as well as Borders-branded airport stores in the United States. At Jan. 29, 2011, the Company operated 639 stores in the United States and 3 in Puerto Rico. The Company also operated a proprietary e-commerce Web site -- http://www.Borders.com/-- launched in May 2008, which included both in-store and online e-commerce components. As of Feb. 11, 2011, Borders employed a total of 6,100 full-time employees, 11,400 part-time employees, and roughly 600 contingent employees. Borders Group Inc. and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. Lead Case No. 11-10614) in Manhattan on Feb. 16, 2011. David M. Friedman, Esq., David S. Rosner, Esq., Andrew K. Glenn, Esq., and Jeffrey R. Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, served as counsel to the Debtors. Jefferies & Company's Inc. served as the financial advisor. DJM Property Management is the lease and real estate services provider. AP Services LLC served as the interim management and restructuring services provider. The Garden City Group, Inc., acted as the claims and notice agent. Attorneys at Morgan, Lewis & Bockius LLP, and Riemer & Braunstein LLP, served as counsel to the DIP Agents. Lowenstein Sandler represented the official unsecured creditors committee for Borders Group. The Debtor disclosed $1.28 billion in assets and $1.29 billion in liabilities as of Dec. 25, 2010. Borders selected proposals by Hilco and Gordon Brothers to conduct going out of business sales for all stores after no going concern offers of higher value were submitted by the deadline. In January 2012, Borders' First Amended Joint Chapter 11 Plan of Liquidation became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan filed by the Debtors and the Official Committee of Unsecured Creditors at a Dec. 20, 2011 hearing. The Debtors have been renamed BGI Inc. BOWLES SUB: Has Court's Nod to Hire Anton Economics as Economist ---------------------------------------------------------------- The Hon. Nancy C. Dreher of the U.S. Bankruptcy Court for the District of Minnesota has granted Bowles Sub Parcel A, LLC, and its affiliated debtors permission to employ Paul A. Anton and Anton Economics, LLC, as economist to represent the Debtors in connection with all matters pertaining to the confirmation of the Chapter 11 plans, specifically, testimony regarding appropriate interest rates and risks. As reported by the TCR on Dec. 13, 2012, the Debtors' counsel, Lapp Libra Thomson Stoebner & Pusch, is paying Anton Economics a $3,000 retainer fee and will be reimbursed from Debtors' bankruptcy estate pursuant to fee applications of Debtors' counsel. Anton Economics will be paid $100 per hour for time spent preparing graphics or exhibits. In the event that Anton Economics outsource the preparation of graphics or exhibits, the firm will be reimbursed for the actual cost of the outsourced services, plus a 5% handling fee; however, the fee for outsourced services will not exceed the rate of $100 per hour without the Counsel's approval. About StoneArch II/WCSE Entities StoneArch II/WCSE Minneapolis Industrial LLC in 2007 acquired various limited liability companies, which in turn owned 27 industrial multi-tenant properties located in Minneapolis/St. Paul in Minnesota. The properties were divided into four separate pools: A, B, C, and D. Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC, which jointly own the properties in pool D, sought Chapter 11 protection (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on June 29, 2011. A Chapter 11 plan has been filed for the pool D debtors. The plan, if approved, would allow the existing owners to maintain operation of the properties. Bowles Sub Parcel A, LLC, and five other entities, which jointly own parcels A, B and C, filed for Chapter 11 protection (Bankr. D. Minn. Case Nos. 12-42765, 12-42768, 12-42769, 12-42770, 12-42772, and 12-42774) on May 8, 2012. Each of the May 8 Debtors estimated $10 million to $50 million in assets. Bowles Sub A disclosed $11,442,268 in assets and $9,716,342 in liabilities as of the Chapter 11 filing. The other May 8 debtors are Fenton Sub Parcel A, LLC, Bowles Sub Parcel B, LLC, Fenton Sub Parcel B, LLC, Bowles Sub Parcel C, LLC, and Fenton Sub Parcel C, LLC. Judge Nancy C. Dreher oversees the May 8 Debtors' cases, taking over from Judge Gregory F. Kishel. The May 8 Debtors tapped Lapp Libra Thomson Stoebner & Pusch as counsel. Steven B. Hoyt, as chief manager, signed the Chapter 11 petitions. CAPITOL BANCORP: Panel Taps Harrington Dragich as Special Counsel ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 cases of Capitol Bancorp Ltd., et al., asks the U.S. Bankruptcy Court for the Eastern District of Michigan for permission to retain Harrington Dragich PLLC, as its special counsel. Harrington Dragich will perform legal services on behalf of the Committee for the limited purpose of advising it with regard to issues related to Canal Air, LLC's motion for an order granting leave to file proof of claim after the bar date, and matters regarding General Electric Capital Corporation. Canal Air is an affiliate of GECC. The hourly rates of Harrington Dragich's personnel are: Members $350 Associates $250 To the best of the Committee's knowledge, Harrington Dragich is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. The Company's balance sheet at Sept. 30, 2012, showed $1.749 billion in total assets, $1.891 billion in total liabilities, and a stockholders' deficit of $141.8 million. The Debtor's plan would exchange debt and trust-preferred securities for equity. Holders of $6.8 million in senior notes would see a full recovery by receipt of new stock. Holders of $151.3 million in trust-preferred securities would take equity worth $50 million, for a one-third recovery. Holders of $5 million in preferred stock would have a 20% recovery from new equity, while common stockholders would take stock worth $15 million. CELL THERAPEUTICS: Estimates $5.8 Million Net Loss in November -------------------------------------------------------------- Cell Therapeutics, Inc., provided information pursuant to a request from the Italian securities regulatory authority, CONSOB, pursuant to Article 114, Section 5 of the Unified Financial Act, that the Company issue at the end of each month a press release providing a monthly update of certain information relating to the Company's management and financial situation. The Company estimated a net loss attributable to common shareholders of US$5.79 million on US$0 of net revenue for the month ended Nov. 30, 2012, compared with a net loss attributable to common shareholders of US$4.64 million on US$0 of net revenue during the prior month. Estimated research and development expenses were US$2.4 million and US$3.1 million for the month of October 2012 and November 2012, respectively. There were no convertible notes outstanding as of Oct. 31, 2012, and Nov. 30, 2012. A copy of the press release is available for free at: http://is.gd/cjF0Dj About Cell Therapeutics Headquartered in Seattle, Washington, Cell Therapeutics, Inc. (NASDAQ and MTA: CTIC) -- http://www.CellTherapeutics.com/-- is a biopharmaceutical company committed to developing an integrated portfolio of oncology products aimed at making cancer more treatable. Cell Therapeutics reported a net loss attributable to CTI of US$62.36 million in 2011, compared with a net loss attributable to CTI of US$82.64 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $36.17 million in total assets, $32.60 million in total liabilities, $13.46 million in common stock purchase warrants, and a $9.89 million total shareholders' deficit. Going Concern Doubt Raised The report of Marcum LLP, in San Francisco, Calif., dated March 8, 2012, expressed an unqualified opinion, with an explanatory paragraph as to the uncertainty regarding the Company's ability to continue as a going concern. The Company's available cash and cash equivalents are US$47.1 million as of Dec. 31, 2011. The Company's total current liabilities were US$17.8 million as of Dec. 31, 2011. The Company does not expect that it will have sufficient cash to fund its planned operations beyond the second quarter of 2012, which raises substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Form 10-K for the year ended Dec. 31, 2011, noted that if the Company receives approval of Pixuvri by the EMA or the FDA, it would anticipate significant additional commercial expenses associated with Pixuvri operations. Accordingly, the Company will need to raise additional funds and are currently exploring alternative sources of equity or debt financing. The Company may seek to raise that capital through public or private equity financings, partnerships, joint ventures, disposition of assets, debt financings or restructurings, bank borrowings or other sources of financing. However, the Company has a limited number of authorized shares of common stock available for issuance and additional funding may not be available on favorable terms or at all. If additional funds are raised by issuing equity securities, substantial dilution to existing shareholders may result. If the Company fails to obtain additional capital when needed, it may be required to delay, scale back, or eliminate some or all of its research and development programs and may be forced to cease operations, liquidate its assets and possibly seek bankruptcy protection. CENTRAL EUROPEAN DISTRIBUTION: Has Revised Deal With Roust Trading ------------------------------------------------------------------ Central European Distribution Corporation has agreed to a revised transaction with Russian Standard (through its affiliate, Roust Trading Ltd.). This agreement represents a renewed commitment by Russian Standard to a strategic alliance with CEDC and is an important vote of confidence in the future success of CEDC's business. The agreement also addresses the ongoing management of CEDC, with directors nominated by Russian Standard taking responsibility for CEDC's operations through a newly-formed committee of the CEDC Board of Directors. A special committee led by CEDC directors unaffiliated with Russian Standard will retain control of any restructuring of CEDC's capital structure. This amended transaction is intended to stabilize CEDC's business and to pave the way for CEDC to address its balance sheet issues in an orderly fashion. Under the revised terms, Russian Standard has: * released restrictions on $50 million in cash previously invested in CEDC, making those funds available for working capital and general corporate purposes, * agreed to provide a new $15 million revolving credit facility to CEDC; and * agreed to provide up to $107 million in new capital to CEDC (reduced by the commitment under the new revolving credit facility) subject to and conditional upon an overall restructuring of CEDC's capital structure that is acceptable to CEDC and Russian Standard. In turn, CEDC has: * created an Operational Management Committee of the CEDC Board of Directors to be led by Mr. Tariko, * created a Restructuring Committee of the CEDC Board of Directors to be led by non-Russian Standard directors, * appointed Grant Winterton as Chief Executive Officer of CEDC, effective Jan. 10, 2013. Mr. Winterton is the current General Manager of the Russian Alcohol Group - a CEDC subsidiary. Mr. Winterton has over 20 years of experience working in marketing, sales and general management positions for Campbells Soup (Australia), The Coca-Cola Company (Australia, Russia, Ukraine, China), Wimm Bill Dann (Russia) and Red Bull (Russia). Mr. Winterton has lived in Russia for over 10 years, working in the consumer goods industry, and has extensive working experience across the Russia, Ukraine, Belarus and CIS markets. He joined CEDC as General Manager of the Russian Alcohol Group in April 2012. * agreed to call an annual shareholders' meeting as soon as practicable to vote on a slate of directors agreed between CEDC and Russian Standard and to decide if Russian Standard nominees will comprise a majority of the CEDC Board of Directors. CEDC and Russian Standard are implementing these revised terms pursuant to a binding term sheet, which modifies the Amended and Restated Securities Purchase Agreement and Amended and Restated Governance Agreement between CEDC and RTL. These two agreements will terminate with automatic effect on Jan. 21, 2013, and CEDC will be permitted to have restructuring discussions and negotiations with the holders of CEDC's outstanding debt obligations. These revised terms also represent a settlement of the issues between CEDC and Russian Standard stemming from, among other things, the restatement of CEDC's financial statements for its 2010 and 2011 fiscal years in October of this year, with CEDC and RTL agreeing to mutually release all claims and causes of action and not to bring any legal action against the other under either agreement for matters arising prior to Dec. 28, 2012. CEDC and Russian Standard believe that the revised terms constitute a mutually beneficial way of addressing CEDC's near- term funding and operational issues while also committing CEDC and Russian Standard to work together to address CEDC's long-term capital requirements, including a restructuring of its current debt obligations. In that regard, CEDC and Russian Standard also believe that the changes to CEDC's corporate governance comprise an appropriate component of CEDC's strategy. Terms of the Revised Transaction Effective immediately, RTL has released contractual restrictions on $50 million in cash previously invested in CEDC to allow CEDC to use this cash for working capital and general corporate purposes, and committed to make available a $15 million revolving credit facility to CEDC (drawable no earlier than Feb. 1, 2013), subject to definitive documentation and the provision of reasonably satisfactory security by CEDC. Russian Standard has also committed to provide CEDC with up to $107 million of new capital (reduced by the amount of the commitment under the new revolving credit facility) subject to and conditional upon an overall restructuring of CEDC's capital structure that is acceptable to CEDC and Russian Standard. In exchange, CEDC will provide guarantees and liens on assets of its subsidiaries in respect of the debt currently evidenced by $50 million of senior CEDC notes held by Russian Standard. In addition, CEDC has agreed to certain corporate governance changes, including: * The creation of an Operational Management Committee to oversee all day-to-day business and operational management of CEDC with CEDC management to report directly to this committee. The Operational Management Committee will consist of Mr. Roustam Tariko, Mr. Scott Fine and another CEDC board member nominated by Russian Standard. * The creation of a Restructuring Committee with full responsibility for all matters related to any restructuring of CEDC's capital. The Restructuring Committee will consist of three non-Russian Standard directors and Mr. Roustam Tariko. * The appointment of Grant Winterton, the current Chief Executive Officer of the Russian Alcohol Group - a CEDC subsidiary, as Chief Executive Officer of CEDC effective Jan. 10, 2013. CEDC and Russian Standard have also reached agreement on the slate of directors to be proposed at the next annual general meeting of CEDC shareholders, which will be convened as soon as practicable. The slate of directors will consist of three directors nominated by Russian Standard and three directors nominated by non-Russian Standard directors. In addition, shareholders will be given the opportunity to elect a seventh director from among two candidates, one nominated by Russian Standard and one by the non-Russian Standard directors. CEDC and Russian Standard have agreed that the Amended and Restated Securities Purchase Agreement and the Amended and Restated Governance Agreement by and between CEDC and RTL will automatically terminate on Jan. 21, 2013, and to mutually release all claims and causes of action (and not to bring any legal action against the other) under either agreement for matters arising prior to Dec. 28, 2012. Mr. David Bailey resigned from his position as Interim Chief Executive Officer effective as of Jan. 10, 2013. Mr. Evangelos Evangelou resigned from his position as Chief Operating Officer effective as of Dec. 31, 2012. Mr. Evangelou will continue to serve with the Company as a manager of its operations in Poland. A copy of the Binding Term Sheet is available at: http://is.gd/HbZe0C 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 The Company's Convertible Senior Notes are due on March 15, 2013. The Company has said its 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 coming due in 2012 would 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, the Company said, raise substantial doubt about its 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. CHESTERFIELD VALLEY: Fitch Affirms 'BB' Rating on Revenue Bonds --------------------------------------------------------------- Fitch Ratings has taken the following action on Chesterfield Valley Transportation Development District, MO's (the district) bonds: -- $16.1 million series 2006 transportation sales tax revenue bonds affirmed at 'BB'. The Rating Outlook is revised to Positive from Stable. SECURITY The bonds are limited obligations payable solely from the net revenues of a 0.375% sales tax on retail sales collected within the district, subject to annual appropriation. The sales tax expires February 2031, five years after the final maturity of the bonds. There is also a cash-funded debt service reserve fund (DSRF) with a $2.03 million funding requirement; the DSRF is currently fully funded. KEY RATING DRIVERS RECENT SALES TAX IMPROVEMENT: The Positive Outlook reflects continued progress in expansion of the sales tax base with the planned opening of two sizeable outlet centers on track for later this year. IMPROVING BUT VOLATILE REVENUE: Sales tax collections for 2011 and 2012 were up considerably versus prior years, reflective of an improved local economy, but inherently remain subject to cyclical volatility. REVENUE UNDERPERFORMANCE & DSRF RELIANCE: Revenue performance remains consistently below expectations at the time of issuance, triggering a reliance on the cash funded debt service reserve fund for the past three years. Strong revenue performance of late and an expanded base should aid the district in eliminating its dependence on the DSRF over the near term. BULLET MATURITY & REQUIRED TURBO: Fitch views the debt structure as generally weak with interest only payment requirements between 2017 and 2025 and a bullet maturity in 2026. However, in the event excess revenues start flowing, the structure does require early redemption. ACCESSIBLE LOCATION: The district encompasses a five mile commercially attractive retail corridor along Interstate 64 which caters to the affluent St. Louis County region. WHAT COULD TRIGGER A RATING ACTION SALES TAX BASE EXPANSION: An evident expansion of the sales tax revenue base from the upcoming opening of two outlet malls would likely enhance pledged revenues, debt service coverage and overall credit quality. CREDIT PROFILE The district encompasses a sizable 7.43 square mile area located along a five-mile corridor of Interstate-64 in western St. Louis County. As of December 2012, there were 374 retail establishments located within the district. SALES TAX REBOUND Sales tax revenues for the first 10 months of 2012 increased by a robust 7.5% over same period collections in 2011. The district expectation for full year collections are to show a 7.1% year over year increase in revenues, incorporating management's projected sales tax revenues for the remaining two months of 2012. Fitch believes this is a conservative projection given recent sales tax trends. Assuming projections are achieved, 2012 will be the first year since 2008 in which revenues exceeded current debt service requirements. This growth follows an 8.5% increase in sales tax revenues in 2011 compared to 2010. RECENT REVENUE SHORTFALLS Between fiscals 2007 and 2010, sales tax collections in the district fell by nearly 16%. The decline was mostly attributable to the recession but also due partly to a one month payment lag in 2010, created when the state assumed sales tax collection responsibilities from the city of Chesterfield (the city) in early 2010. In addition, the 2006 issue was structured based on over- optimistic sales tax projections, leading to marginal debt service coverage from the onset. Sales tax revenues were insufficient to meet debt service requirements as a result of these declines, forcing the district to draw upon the DSRF annually beginning in 2010. Draw-downs totaled $183,000 in 2010, $399,000 in 2011 and $404,000 in 2012 to cover 11%, 24% and 24% respectively of the larger April principal and interest payments in those years. In all three years, the DSRF requirement was restored before the end of the year as sales taxes were received and deposits were made per the flow of funds. Management is projecting a smaller $350,000 (18%) draw in April, 2013, with additional draws in 2014 and 2015. After 2015, debt service drops significantly until 2026. Fitch views the bond structure as weak with a large bullet maturity in 2026 and interest payments only from 2017 through 2025. However, in the event revenues exceed debt service requirements, all excess sales tax revenues are required to redeem the 2026 bullet via a mandatory redemption feature. To date the turbo feature was only triggered once in 2008 due to general underperformance of revenues compared to projections at the time of issuance. Assuming projected 2012 sales tax levels and no subsequent growth, Fitch's analyses indicate that pledged revenues and DSRF monies should be more than adequate to cover all debt service requirements. Under Fitch's stress scenario, sales tax collections could decline by 10% in 2013 and an additional 4% annually over the life of the issue and, with remaining DSRF monies, still meet all debt service requirements. The largest revenue decline to date was 7.6% in 2010. SALES TAX CONCENTRATION The district encompasses a sizable 7.43 square mile area located along a five-mile corridor of Interstate-64 in western St. Louis County. As of December 2012, there were 374 retail establishments located within the district, comprising one of the largest concentrations of big box retailers in the region. There is point- of-sale concentration with the top 15 payers accounting for 55% of total sales tax collections, which is not uncommon for a retail complex with sizeable big box presence. The district contains in excess of seven million square feet of development with over 10% of the total land area still undeveloped. The district expects four large stores recently opened to be top 20 sales tax generators. In addition, the district reports that two large outlet malls contemplated last year are currently under construction by Simon Property Group and Taubman and on track to open in August, 2013. The addition of these two malls would notably expand the sales tax base which Fitch believes could have a positive impact on the rating. WEALTHY, GROWING SERVICE AREA Wealth levels in the city and county are well above state and national averages, and unemployment rates are below comparable levels for the state and country, rebounding from increases during the recent economic downturn. The county supports a diverse economic base, which includes Boeing and Washington University. The city has several major economic development projects underway, highlighted by significant growth at Mercy, a large health care system headquartered in the city, as well as the relocation of the headquarters of Reinsurance Group of America to Chesterfield. These projects will bring a sizable number of workers to the area, increasing the population of potential shoppers within the district. Appropriation Risk The district is managed by a four-member board consisting of representatives of the city and county. The pledged sales tax is subject to annual appropriation by the district. However, non- appropriation is unlikely as the pledged sales tax cannot be used for non-district purposes. Furthermore, if the district fails to adopt a budget in any year, the prior year's budget will remain in effect. Weak Legal Provisions The bond documents are loosely written, allowing for liberal issuance of additional parity debt. However, officials indicate that there are no plans to issue more bonds and an independent board composed of various county and city officials would be expected to curtail excessive issuance. CIVIC PARTNERS: Dispute With Sioux City Goes to Trial ----------------------------------------------------- Bankruptcy Judge Thad J. Collins denied the City of Sioux City's motion for summary judgment on its claim and on Civic Partners Sioux City, LLC's counterclaims. The City in January 2011 filed a Petition at Law for Breach of Contract against Civic in the Iowa District Court for Woodbury County (No. LACV143863). Civic has filed an answer and a counterclaim. Civic filed a voluntary Chapter 11 petition on April 14, 2011. On June 27, 2011, Civic removed the breach of contract action by the City to the Bankruptcy Court as an adversary proceeding. On April 6, 2012, the City filed a Motion for Summary Judgment on its claim and on Civic's counterclaim. Civic resisted the City's Motion for Summary Judgment. Civic is the developer and owner of an entertainment and shopping complex in Sioux City, Iowa. The complex was to be an anchor in the redevelopment of an area in Sioux City known as the Historic 4th Street Area. The primary tenant of the complex is a 14-screen movie theater named Main Street Theatres. Only one of the other spaces in the facility is occupied by a specialty shop. Civic received its primary financing for the facility from First National Bank, which holds a first security interest in the structure and some of the equipment. The City signed a development agreement with Civic committing to do some of the necessary work on surrounding infrastructure and support for the facility. The City also loaned Civic $1,980,000 under a promissory note to help finance the project. In exchange, the City took a second security interest on much of First National Bank's collateral. The City also had a minimum tax assessment agreement with Civic for the property. Other banks -- Liberty National Bank and Cass County Bank -- and the Small Business Administration also claim security interests in the property and equipment. Unfortunately, for a number of reasons, Main Street's theater was not as successful as originally planned, and Main Street fell behind on the rent it owed to Civic. By 2009, Civic claimed Main Street owed a multi-million dollar deficiency. Main Street had several arguments against Civic for offsets against some or all of that rent. Without Main Street's rent, Civic also fell behind on its payments to First National Bank. Civic has never made any payments to the City. In August 2009, the four principal parties, Civic, Main Street, First National Bank, and the City began mediation to attempt to find a solution which worked for all parties. Civic, Main Street, and First National Bank reached a tentative agreement which they presented to the City. The proposed mediation agreement outlined a global restructuring of the agreements and arrangements related to the project. Under the proposed mediation agreement, Civic would forgive Main Street's deficiency on the rent and lower Main Street's monthly payments. Main Street also agreed to release its claims and made a $200,000 restructuring payment to Civic. Civic was also to receive a lower interest rate and other reductions from its lenders. The proposed agreement was subject to the City's ratification by a vote of the Sioux City City Council. The Sioux City City Council ultimately did not approve the agreement. The ultimate failure of the mediation had many consequences. One is the City's filing of its Petition at Law for Breach of Contract. Another was Civic's bankruptcy filing and removal of the City's case to the Bankruptcy Court. The City asserts that Civic has admitted liability on the City's claim in its bankruptcy schedules. While the City claims a total of $2,629,716.21, Civic has listed the City's claim as $2,050,056.79 and market it as liquidated, undisputed, and non- contingent in its filings. The City believes it is entitled to Summary Judgment as to at least the scheduled amount. The City also argues it is entitled to statutory immunity from -- and thus summary judgment on -- Civic's counterclaim. The City argues that while Civic labeled its claim as a "Breach of Contract," Civic has actually brought tort claims. The City notes that an action like the one Civic brought here for the breach of the duty which arises under a contract is in fact a tort claim under Iowa law. The City argues that once Civic's claim is properly classified as a tort claim, either the discretionary function immunity to municipal tort liability, the immunity for construction of public roads, or the immunity for construction of public improvements -- or all the above -- would apply and bar Civic's claims. Thus, the City believes it is immune from Civic's counterclaim and is entitled to judgment as a matter of law. Civic argues that the counterclaims it asserts against the City are for breach of contract -- not tort. Civic claims that the City breached its contract under the development agreement by failing to properly install the public infrastructure required for proper water drainage. Civic claims the City's breach of contract led directly to damages. Civic suggests that the total value of its contract damages will result in a significant setoff of the claim by the City. Civic asserts that the tort immunities do not apply as a matter of law to its contract claims. Judge Collins said Civic has brought contract claims, and that the City's arguments are inapplicable. The judge said the City made no argument that summary judgment is appropriate on contract claims. The City has thus failed to show it is entitled to summary judgment on Civic Partner's counterclaims. The cases before the Court are, CITY OF SIOUX CITY, IOWA, Plaintiff, v. CIVIC PARTNERS SIOUX CITY, LLC, Defendant; and CIVIC PARTNERS SIOUX CITY, LLC, Counter-Claimant, v. CITY OF SIOUX CITY, IOWA, Counter-Defendant, Adv. Proc. No. 11-09045 (Bankr. N.D. Iowa). A copy of the Court's Jan. 3, 2013 Ruling is available at http://is.gd/fyZGB7from Leagle.com. Civic Partners Sioux City, LLC, based in Huntington Beach, California, filed for Chapter 11 bankruptcy (Bankr. N.D. Iowa Case No. 11-00829) on April 14, 2011. A. Frank Baron, Esq. -- afbaron@baronsar.com -- at Baron, Sar, Goodwin, Gill & Lohr, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. The petition was signed by Steven P. Semingson, managing member. COUNTRYWIDE FIN'L: FDIC Suit Over $108MM in MBS Has Legs: Judge --------------------------------------------------------------- The Federal Deposit Insurance Corp. can't go after Bank of America Corp. but can pursue its affiliate Countrywide Financial Corp. and UBS Securities LLC for allegedly misrepresenting $108 million worth of mortgage-backed securities they sold to a now-defunct Colorado bank, a California federal judge ruled, Eric Hornbeck of BankruptcyLaw360 reported. U.S. District Judge Mariana R. Pfaelzer said the FDIC's amended complaint was viable for allegations that Countrywide and UBS violated Colorado state law when they allegedly hid problems with the Countrywide securities they sold to United Western Bank, the report added. Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- originated, purchased, securitized, sold, and serviced residential and commercial loans. In mid-2008, Bank of America completed its purchase of Countrywide for $2.5 billion. The mortgage lender was originally priced at $4 billion, but the purchase price eventually was whittled down to $2.5 billion based on BofA's stock prices that fell over 40% since the time it agreed to buy the ailing lender. CPI CORP: Incurs $20.2-Mil. Net Loss in 16 Weeks Ended Nov. 10 -------------------------------------------------------------- CPI Corp. filed its quarterly report on Form 10-Q, reporting a net loss of $20.2 million on $69.5 million of net sales for the 16 weeks ended Nov. 10, 2012, compared with a net loss of $7.2 million on $94.6 million of net sales for the 16 weeks ended Nov. 12, 2011. For the 40 weeks ended Nov. 10, 2012, the Company had a net loss of $60.1 million on $191.7 million of net sales as compared to a net loss of $12.9 million on $254.0 million of net sales for the 40 weeks ended Nov. 12, 2011. The Company's balance sheet at Nov. 10, 2012, showed $56.2 million in total assets, $174.8 million in total liabilities, and a stockholders' deficiency of $118.6 million. Going Concern Uncertainty According to the Form 10-Q filing, the combination of profit shortfalls, lack of adequate cash availability to support operational needs and uncertainty regarding the future of the Credit Agreement have created substantial doubt about the Company's ability to operate as a going concern. "The Credit Agreement and amounts owed thereunder are currently due. The Company is currently negotiating a forbearance agreement with the lenders to, among other items, delay them from exercising their rights and remedies under the Credit Agreement until mid- January. If the Company is unable to secure additional amendments to the Credit Agreement, the Company may be forced into an orderly liquidation or bankruptcy. The outcome of restructuring and sale initiatives required by the Credit Agreement, as amended, is uncertain and involves matters that are outside of the Company's control. A copy of the Form 10-Q is available at http://is.gd/Ps42qQ Based in St. Louis, Missouri, CPI Corp. is a holding company engaged, through its wholly-owned subsidiaries and partnerships, in selling and manufacturing professional portrait photography of young children, individuals and families and offers other related products and services. As of Nov. 10, 2012, the Company operates 2,701 professional portrait studios, 176 of which are temporary in nature, throughout the U.S., Canada, Mexico and Puerto Rico, principally under lease and license agreements with Walmart and license agreements with Sears and Toys "R" Us. CROWN AMERICAS: Moody's Affirms Ba1 CFR; Rates $800MM Notes Ba2 --------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the $800 million senior notes of Crown Americas LLC and affirmed the Ba1 Corporate Family Rating of Crown Holdings Inc. The ratings outlook is stable. On January 3, 2013, Crown announced that it intends to offer $800 million in aggregate principal amount of senior unsecured notes due 2023. The notes will be issued by Crown Americas LLC and Crown Americas Capital Corp. IV, each of which is a subsidiary of Crown, and will be unconditionally guaranteed by Crown and certain of its subsidiaries. Crown intends to use the net proceeds of the offering to redeem the outstanding $400 million senior notes due 2017 and to prepay approximately $300 million of term loans, to pay premiums associated therewith, for general corporate purposes, and for payment of related fees and expenses. Moody's took the following rating actions for Crown Holdings Inc. Affirmed corporate family rating, Ba1 Affirmed probability of default rating, Ba1 Affirmed speculative grade liquidity rating, SGL-2 Moody's took the following rating actions for Crown Americas, LLC: Assigned $800 milion senior notes due 2023, Ba2 (LGD 4, 64%) Affirmed $550 million senior secured Term Loan A due 2016, Baa1 (LGD 1, 8% from LGD 2, 10%) Affirmed $450 million US Revolving Credit Facility due 2015, Baa1 (LGD 1, 8% from LGD 2, 10%) Affirmed $400 million senior unsecured notes due 2017, Ba2 (LGD 4, 67%) (To be withdrawn after transaction closes) Affirmed $700 million senior notes due 2021, Ba2 (LGD 4, 64% from 67%) Moody's took the following rating actions for Crown Cork & Seal Company, Inc. Affirmed $150 million senior unsecured notes due 2096 ($64 million outstanding), Ba3 (LGD 6, 97% from 94%) Affirmed $350 million senior unsecured notes due 2026, Ba3 (LGD 6, 97% from 94%) Moody's took the following rating actions for Crown European Holdings S.A. Affirmed EUR274 million senior secured Term Loan A due 2016, Baa1 (LGD 1, 8% from LGD 2, 10%) Affirmed $700 million European revolving credit facility due 2015, Baa1 (LGD 1, 8% from LGD 2, 10%) Affirmed EUR500 million 7.125% global notes due 8/15/2018, Baa3 (LGD 3, 24% from 30%) Moody's took the following rating actions for Crown Metal Packaging Canada L.P. Affirmed $50 million Canadian revolving credit facility due 2015, Baa1 (LGD 1, 8% from LGD 2, 10%) The ratings outlook is stable. Ratings Rationale Crown's Ba1 Corporate Family Rating reflects the company's position in an oligopolistic industry, relatively stable end markets and improved profitability. The rating is also supported by the high percentage of business under contract with strong raw material cost pass-through provisions, higher margin growth projects in emerging markets and good liquidity. Crown's broad geographic exposure, including a high percentage of sales from faster growing emerging markets, is both a benefit and a source of some potential volatility. The rating is constrained by the company's concentration of sales, exposure to international markets and risks inherent in its strategy to grow in emerging markets. The rating is also constrained by the ongoing asbestos liability. The company has exposure to segments which can be affected by weather and crop harvests and to mature industry sectors like carbonated soft drinks. Approximately 50% of sales stem from the sale of beverage cans. Crown is also completely concentrated in metal packaging, which may be subject to substitution with other substrates in certain markets depending on relative pricing and new technologies. The ratings could be downgraded if there was deterioration in the credit metrics, more aggressive financial policies, deterioration in the cushion under existing financial covenants, and/or deterioration in the competitive or operating environment. Additionally, a significant acquisition or change in the asbestos liability could also trigger a downgrade. Specifically, the rating could be downgraded if the EBIT interest coverage declines to below 3.7 times, leverage remained above 3.8 times and free cash flow to debt remained below 8.5%. The ratings could be upgraded if Crown commits to maintaining financial policies and a capital structure that are consistent with an investment grade rating and achieves a sustainable improvement in credit metrics within the context of a stable operating and competitive environment. Specifically, the ratings could be upgraded if leverage declined to below 3.0 times, EBIT interest coverage improves to over 4.0 times, the EBIT margin remains in the double digits, and free cash flow to total debt improves to over 10%. The principal methodology used in rating Crown was the Global Packaging Manufacturers: Metal, Glass, and Plastic Containers Industry Methodology published in June 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. DAMES POINT: Case Summary & 2 Unsecured Creditors ------------------------------------------------- Debtor: Dames Point Development, LLC 822 A1A North Unit 208 Ponte Vedra Beach, FL 32082 Bankruptcy Case No.: 12-08208 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Jason A. Burgess, Esq. THE LAW OFFICES OF JASON A. BURGESS, LLC 118 West Adams Street, Suite 900 Jacksonville, FL 32202 Tel: (904) 354-5065 E-mail: jason@jasonaburgess.com Scheduled Assets: $2,250,000 Scheduled Liabilities: $175,000 A copy of the Company's list of two unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/flmb12-08208.pdf The petition was signed by Paul Rohan, managing member. DESERT HAWK: Board Corrects Note Terms to Clarify Interest Payment ------------------------------------------------------------------ The Board of Directors of Desert Hawk Gold Corp., approved corrections to the Amended and Restated 15% Convertible Promissory Notes entered into on July 14, 2010, between the company and West C. Street LLC and Ibearhouse, LLC. The Amended Notes were recently extended for an additional one-year period. After reviewing the Amended Notes subsequent to that filing, the Company and the Note Holders mutually determined that the Amended Notes as originally drafted inadvertently contained language which provided that no interest would be paid by the Company during the extended term of the Amended Notes. The parties have corrected the notes to provide that interest would continue to be paid during the extended period of the Amended Notes. Copies of the corrected Amended Notes are available for free at: http://is.gd/P5ytcF http://is.gd/gHXs7a About Desert Hawk Desert Hawk Gold Corp., an exploration stage company, engages in the acquisition and exploration of mineral properties. The company has interests in 334 unpatented claims, including the unpatented mill site claim, 42 patented claims, and 5 Utah state mineral leases located on state trust lands covering approximately 33 square miles in the Gold Hill Mining District in Tooele County, Utah. It also holds eight unpatented mining claims in Yavapai County, Arizona. The company was formerly known as Lucky Joe Mining Company and changed its name to Desert Hawk Gold Corp. in April 2009. Desert Hawk Gold Corp. was incorporated in 1957 and is based in Spokane, Washington. Desert Hawk reported a net loss of $4.77 million in 2011, following a net loss of $2.85 million in 2010. Desert Hawk reported a net loss of $1.44 million for the three months ended June 30, 2012, compared with a net loss of $2.56 million for the same period during the prior year. DeCoria, Maichel & Teague, PS, in Spokane, Washington, issued a "going concern" qualification on the consolited financial statements for the hear ended Dec. 31, 2011. The independent auditors noted that the Company has an accumulated deficit through Dec. 31, 2011, which raises substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $1.43 million in total assets, $6.84 million in total liabilities and a $5.40 million total stockholders' deficit. DIAGNOSTIC VENTURES: Clifford Chance Wins in Securities Suit ------------------------------------------------------------ A Pennsylvania federal judge ruled that Clifford Chance LLP had no liability for an alleged scheme that led to the 2003 bankruptcy of Diagnostic Ventures Inc., releasing the law firm from the long- running investor class action over the bankruptcy, Dan Packel of BankruptcyLaw360 reported. U.S. District Judge Legrome Davis granted summary judgment in favor of the law firm, concluding there was no evidence that the investors who claimed they suffered as a result of the scheme had relied on the firm's supposedly deceptive acts, the report added. Diagnostic Ventures, Inc., was a healthcare finance company that extended loans to medical providers to facilitate the purchase of diagnostic medical equipment and leasehold improvements, and offered lines of credit for working capital secured by healthcare receivables. Founded in 1986, DVI was a publicly traded company with reported assets of $1.7 billion in 2003. Its common stock began trading on the New York Stock Exchange in 1992. It issued two tranches of 9 7/8% senior notes: the first, issued in 1997, totaled $100 million; the second, issued in 1998, totaled $55 million. On Aug. 13, 2003, DVI announced it would file for Chapter 11 bankruptcy protection resulting from the public disclosure of alleged misrepresentations or omissions as to the amount and nature of collateral pledged to lenders. In the ensuing years, its common stock and 1997 Notes were de-listed from the NYSE, the Securities and Exchange Commission and Department of Justice undertook investigations, its former Chief Financial Officer, Steven Garfinkel, pleaded guilty to fraud, the bankruptcy trustee and multiple lenders filed lawsuits, and the company dissolved. DEWEY & LEBOEUF: Judge Postpones Approval of Disclosure Statement ----------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reports that a New York bankruptcy judge directed Dewey & LeBoeuf LLP to clean up the language of the disclosure statement accompanying its proposed liquidation plan and postponed his decision on approving the statement until Monday. At a hearing, U.S. Bankruptcy Judge Martin Glenn instructed the fallen firm, its creditors and liquidating trustee Brian Masumoto to consult and return to him with a disclosure statement that plainly states the preservation of any potential direct claims against participating partners, the Law360 report relates. Confusion over how much legal protection former Dewey & LeBoeuf partners are getting under a settlement with the defunct firm's estate may slow what Dewey advisers hoped would be swift confirmation of the Chapter 11 plan they have drawn up for repaying creditors, the American Bankruptcy Institute reported. 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. DIALOGIC INC: Hearing on NASDAQ Appeal Set for March 7 ------------------------------------------------------ Dialogic Inc. received a deficiency letter, dated June 27, 2012, from the Listing Qualifications Department of The NASDAQ Stock Market, notifying it that, for the prior 30 consecutive business days, the market value of the Company's publicly held shares had been below the minimum $15 million requirement for continued listing on The NASDAQ Global Market pursuant to NASDAQ Listing Rule 5810(c)(3)(D). In accordance with the NASDAQ Listing Standards, the Company was given 180 calendar days, or until Dec. 24, 2012, to regain compliance with the Market Value Rule. To regain compliance, the market value of the Company's public held shares must close at $15 million or more for a minimum of 10 consecutive business days. On Dec. 26, 2012, the Company received a Staff Determination Letter from the Staff notifying that the Company had not regained compliance with the Market Value Rule except for 15 trading days from August 15 through Sept. 5, 2012, for which the Staff determined to exercise its discretionary authority and not deem the Company in compliance with the Market Value Rule. The Dec. 26 Staff Determination Letter also stated that the Company's securities would be scheduled for delisting from The NASDAQ Global Market and suspended at the opening of business on Jan. 4, 2013, unless the Company requested an appeal of Staff's decision to the Hearings Panel in accordance with the procedures set forth in the NASDAQ Listing Rule 5800 Series. Accordingly, the Company has requested a hearing before the Panel; this request has already been granted, and a hearing has been scheduled for March 7, 2013. Moreover, under the NASDAQ Listing Rules, and as has already been confirmed to the Company, this request for a hearing has automatically stayed the delisting of the Company's common stock pending the issuance of a determination by the Panel. However, the Company cautioned there can be no assurance that the appeal would be successful. About Dialogic Milpitas, Calif.-based Dialogic Inc. provides communications platforms and technology that enable developers and service providers to build and deploy innovative applications without concern for the complexities of the communication medium or network. The Company reported a net loss of $54.81 million in 2011, following a net loss of $46.71 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $126.69 million in total assets, $140.69 million in total liabilities and a $13.99 million total stockholders' deficit. Bankruptcy warning The Company has said in regulatory filings that, "In the event of an acceleration of our obligations under the Term Loan Agreement or Revolving Credit Agreement and our failure to pay the amounts that would then become due, the Revolving Credit Lender or Term Lenders could seek to foreclose on our assets. As a result of this, we would likely need to seek protection under the provisions of the U.S. Bankruptcy Code and/or our affiliates might be required to seek protection under the provisions of applicable bankruptcy codes. In that event, we could seek to reorganize our business, or we or a trustee appointed by the court could be required to liquidate our assets." DIGITAL DOMAIN: Disney Trying to Upset Patent Sale -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Walt Disney Co. is hoping a U.S. district judge in Delaware will reverse a ruling from the bankruptcy court in favor of Digital Domain Media Group Inc. and allow the continued use of technology for converting conventional two-dimensional movies into three-dimensional films. The report recounts that RealD Inc. was granted approval Dec. 21 to buy 3D conversion technology for $5.45 million from Digital Domain, known as DDMG Estate now that most of the assets have been sold. Disney, based in Burbank, California, unsuccessfully objected to the RealD sale, contending it purchased a license for the technology from a company that sold the patents to DDMG. The report relates that the bankruptcy judge wrote an opinion in December concluding that the sale to RealD cuts off Disney's right to use the technology except for projects then in progress. According to the report, Disney appealed and filed papers Jan. 2 in U.S. District Court in Delaware seeking a stay pending appeal. Disney is afraid that completion of the sale will extinguish its rights in the technology even if it wins the appeal. Disney contends the appeal raises "an issue of first impression" regarding the interplay of patent and bankruptcy law. Disney said in its papers that RealD is automatically precluded from completing the sale until Jan. 4. Consequently, Disney wants a district judge to hold up the sale until the appeal is completed in two or three months. About Digital Domain Port St. Lucie, Florida-based Digital Domain Media Group, Inc. -- http://www.digitaldomain.com/-- engaged in the creation of original content animation feature films, and development of computer-generated imagery for feature films and trans-media advertising primarily in the United States. Digital Domain Media Group, Inc. and 13 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-12568) on Sept. 11, 2012, to sell its business for $15 million to Searchlight Capital Partners LP, subject to higher and better offers. At a bankruptcy auction, the principal part of the business was purchased by a joint venture between Galloping Horse America LLC, an affiliate of Beijing Galloping Horse Co., and an affiliate of Reliance Capital Ltd., based in Mumbai. The $36.7 million total value of the contact includes $3.6 million to cure defaults on contracts and $2.9 million in reimbursement of payroll costs. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. FTI Consulting, Inc.'s Michael Katzenstein is the chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. An official committee of unsecured creditors appointed in the case is represented by lawyers at Sullivan Hazeltine Allinson LLC and Brown Rudnick LLP. The company disclosed assets of $205 million and liabilities totaling $214 million. Debt includes $40 million on senior secured convertible notes plus $24.7 million in interest. There is another issue of $8 million in subordinated secured convertible notes. The Debtors also have sought ancillary relief in Canada, pursuant to the Companies' Creditors Arrangement Act in the Supreme Court of British Columbia, Vancouver Registry. DYNASIL CORP: Filing of 2012 Form 10-K Will Be Delayed ------------------------------------------------------ Dynasil Corporation of America is unable to file its annual report on Form 10-K for the period ended Sept. 30, 2012, within the prescribed time period without unreasonable effort or expense for these reasons: 1. As disclosed in the Company's current Report on Form 8-K filed on Dec. 31, 2012, the Company is in default of the financial covenants set forth in the terms of its outstanding indebtedness with respect to its fiscal year ended Sept. 30, 2012. Management has spent considerable time and effort addressing this financial covenant default, including discussions with its senior lender, the ongoing evaluation of various strategic and restructuring alternatives and an analysis of the covenant failure and its effect on the Company's financial statements for the 2012 Fiscal Year. With respect to the latter, as a result of the recent underperformance underlying the covenant failure, the Company is conducting, and has yet to complete its review and assessment of impairment on its goodwill and long-lived assets. The Company expects to record significant non-cash impairment charges in the fiscal fourth quarter though at this time the Company cannot provide an estimate of such impairment charges. Given the uncertainty created by the default, the Company's independent registered public accounting firm will include an explanatory paragraph indicating substantial doubt about the Company's ability to continue as a going concern in their audit opinion, as required by the professional auditing standards. 2. With respect to the preparation of the Form 10-K and financial statements for the 2012 Fiscal Year and the finalization of the audit process relating thereto, the following have not yet been completed: -- Management has not completed its assessment of the design and operating effectiveness of the Company's internal controls over financial reporting, which will be included in the Form 10-K for the 2012 Fiscal Year. -- There are ongoing analyses being conducted regarding the impairment of certain long-lived assets and goodwill. About Dynasil Watertown, Mass.-based Dynasil Corporation of America (NASDAQ: DYSL) -- http://www.dynasil.com/-- develops and manufactures detection and analysis technology, precision instruments and optical components for the homeland security, medical and industrial markets. EAST COAST DIVERSIFIED: Amends 2011 Annual Report on Form 10-K -------------------------------------------------------------- East Coast Diversified Corporation filed an amended Form 10-K with the U.S. Securities and Exchange Commission disclosing a net loss of $2.28 million on $612,482 of total revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.31 million on $612,482 of revenues as originally reported. The Company's restated balance sheet at Dec. 31, 2011, showed $2.07 million in total assets, $3.79 million in total liabilities, $1.10 million in commitments and contingencies, and a $2.83 million total stockholders' deficit. The Company previously disclosed $2.03 million in total assets, $4.90 million in total liabilities, and a stockholders' deficit of $2.87 million. A copy of the Form 10-K/A is available for free at: http://is.gd/NZd78b About East Coast Diversified East Coast Diversified Corporation, headquartered in Marietta, Georgia, through its majority owned subsidiary, EarthSearch Communications International, Inc., offers a portfolio of GPS devices, RFID interrogators, integrated GPS/RFID technologies and Tag designs. As reported by the Troubled Company Reporter on April 20, 2012, Drake & Klein CPAs, in Clearwater, Fla., expressed substantial doubt about East Coast Diversified'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 not generated revenue and has not established operations. EASTMAN KODAK: Files Valuation, Profitability Report With SEC ------------------------------------------------------------- Eastman Kodak Company and its subsidiaries filed a Form B26 (Periodic Report Regarding Value, Operations and Profitability of Entities in which the Estate Holds a Substantial or Controlling Interest) as of and for the period ending Sept. 30, 2012, with the U.S. Securities and Exchange Commission. The Periodic Report consists of three exhibits: -- Exhibit A contains a valuation estimate for the Non-Debtor entities as of a date not more than two years prior to Dec. 28, 2012. It also contains a description of the valuation method used. -- Exhibit B contains a balance sheet, a statement of income (loss), a statement of cash flows, and a statement of changes in shareholders' or partners' equity (deficit) for the period covered for each Non-Debtor Entity, along with summarized footnotes. -- Exhibit C contains a list of all active entities of the Company, including identified Debtor entities. For the nine months ended Sept. 30, 2012, Eastman Kodak reported a consolidated net loss of $977 million on $2.99 billion of revenue. The consolidated balance sheet at Sept. 30, 2012, showed $4.40 billion in total assets, $7.63 billion in total liabilities and a $3.23 billion total deficit. A copy of the Periodic Report is available for free at: http://is.gd/m5UACA 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. EASTMAN KODAK: Kyocera Sues Over Camera, Printer Patents -------------------------------------------------------- Electronics manufacturer Kyocera Corp. launched a patent suit against Eastman Kodak Co. in New York bankruptcy court Friday, claiming Kodak began selling products infringing 15 of its patents after the film company filed for bankruptcy Helen Christophi of BankruptcyLaw360 reported that Japan-based Kyocera claims Kodak began making and selling electronics infringing Kyocera's U.S. patents on technology it uses in its digital cameras and printers after it filed for Chapter 11 bankruptcy protection last January. "Kodak also has been and is now contributing to and inducing others to infringe Kyocera's U.S. patents," Kyocera said in court papers, according to BLaw360. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Kyocera Corp. contends there are flaws in Eastman Kodak Co.'s $525 million sale of digital-imaging technology scheduled for court approval on Jan. 11. According to the Bloomberg report, Kyocera, based in Tokyo, contends Kodak agreed when setting up the sale that the rights of licensees and others with interests in the technology wouldn't be altered. Now, according to Kyocera's filing in bankruptcy court, Kodak intends to terminate licenses previously granted to the technology. In addition, Kyocera filed a lawsuit in bankruptcy court Jan. 4 contending that Kodak is infringing patents it owns. The Bloomberg report relates that Kyocera's objection to the sale will be hashed out at the Jan. 11 hearing. Kodak arranged the sale with a group of buyers when the technology didn't command a price the company said might reach $2.5 billion. The buyers are 12 of the world's largest technology companies. Kodak's $400 million in 7% convertible notes due in 2017 last traded Jan. 3 for 11.25 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. 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. Kodak intends to reorganize by focusing on the commercial printing business. Other businesses are being sold or shut down. ECOSPHERE TECHNOLOGIES: Dean Becker and John Brewster Join Board ---------------------------------------------------------------- The Board of Directors of Ecosphere Technologies, Inc., appointed Dean Becker and John Brewster to the Company's Board effective Jan. 1, 2013. Mr. Becker's appointment is contingent on entering into a Consulting Agreement. Mr. Becker is Chief Executive Officer of ICAP Patent Brokerage and ICAP Ocean Tomo Auctions. Mr. Becker is a leading expert on monetizing intellectual property. Until August 2012, Mr. Brewster served as Chief Executive Officer and President of NAES Corporation, the world's largest third party power plant operating company. In connection with his appointment, under the 2006 Equity Incentive Plan, Mr. Brewster will receive an automatic grant of $40,000 of shares of common stock and $40,000 of options (with the exact number based upon the closing price as of Dec. 31, 2012). Mr. Brewster also is a consultant to the Company on wastewater treatment solutions and receives a fee of $2,000 per month. Subject to execution of a Consulting Agreement, Mr. Becker will serve as a part-time advisor to the Company. Mr. Becker's role will be to work with the Company's founder, Mr. Dennis McGuire, in accelerating the deployment of the Company's patented Ozonix technology in fields beyond U.S. onshore energy production. The Company is negotiating a Consulting Agreement with Mr. Becker which is expected to incentivize him to assist in monetizing the Company's intellectual property. The proposed compensation would be in lieu of the automatic grant under the Plan. On Dec. 20, 2012, the Board approved a new grant to Mr. Dennis McGuire, the Company's founder and Chief Technology Officer of 6,000,000 five-year stock options, exercisable at $0.36 per share with one-third vesting on Jan. 1, 2013, and the balance quarterly over a two-year period. The options were issued in connection with negotiations for a new three-year Employment Agreement and are only effective upon signing a new Employment Agreement. About Ecosphere Technologies Stuart, Fla.-based Ecosphere Technologies, Inc. (OTC BB: ESPH) -- http://www.ecospheretech.com/-- is a diversified water engineering, technology licensing and environmental services company that designs, develops and manufactures wastewater treatment solutions for industrial markets. Ecosphere, through its majority-owned subsidiary Ecosphere Energy Services, LLC ("EES"), provides energy exploration companies with an onsite, chemical free method to kill bacteria and reduce scaling during fracturing and flowback operations. The Company reported a net loss of $5.86 million in 2011, following a net loss of $22.66 million in 2010, and a net loss of $19.05 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $11.70 million in total assets, $4.41 million in total liabilities, $4.05 million in total redeemable convertible cumulative preferred stock, and $3.22 million in total equity. EMMIS COMMUNICATIONS: Operating Unit Has $100MM Credit Facility --------------------------------------------------------------- Emmis Operating Company, a wholly owned subsidiary of Emmis Communications Corporation, entered into a credit facility to provide for total borrowings of up to $100 million, including (i) a $80 million term loan and (ii) a $20 million revolver, of which $5 million may be used for letters of credit. A portion of the proceeds under the Credit Facility were used to repay (i) EOC's indebtedness under and terminate the Amended and Restated Revolving Credit Agreement and Term Loan Agreement dated as of Nov. 2, 2006, as amended, to which EOC and ECC are a party and for which Bank of America, N.A., acted as administrative agent and (ii) the Note Purchase Agreement dated as of Nov. 11, 2011, between Emmis Communications Corporation, as Issuer, and Zell Credit Opportunities Master Fund, L.P., as Purchaser, as amended. In addition to repaying the Existing Credit Agreement and the Existing Note Purchase Agreement in full, the proceeds of the borrowings under the Credit Facility will be used for working capital needs and other general corporate purposes of Emmis, and certain other transactions permitted under the Credit Facility. All outstanding amounts under the Credit Facility bear interest, at the option of EOC, at a rate equal to the Eurodollar Rate or an alternative base rate plus a margin. The margin over the Eurodollar Rate or the alternative base rate varies (ranging from 2.50% to 5.00%), depending on Emmis' ratio of consolidated total debt to consolidated EBITDA, as defined in the agreement. Interest is due on a calendar month basis under the alternative base rate and at least every three months under the Eurodollar Rate. Beginning 60 days after closing, the Credit Facility requires Emmis to maintain fixed interest rates, for at least one year, on a minimum of 50% of its total outstanding debt. The term loan and revolver both mature on Dec. 28, 2017. Beginning April 1, 2013, the borrowings under the term loan are payable in quarterly instalments equal to 2.50% of the term loan, with the remaining balance payable Dec. 28, 2017. Proceeds from raising additional equity, issuing additional subordinated debt or from asset sales, as well as excess cash flow, subject to certain exceptions, are required to be used to repay amounts outstanding under the Credit Facility. Borrowing under the Credit Facility depends upon the Company's continued compliance with certain operating covenants and financial ratios, including leverage and fixed charge coverage. The operating covenants and other restrictions with which the Company must comply include, among others, restrictions on additional indebtedness, incurrence of liens, engaging in businesses other than the Company's primary business, paying certain dividends, redeeming or repurchasing capital stock of Emmis, acquisitions and asset sales. No default or event of default has occurred or is continuing. The Credit Facility provides that an event of default will occur if there is a change in control of Emmis. The payment of principal, premium and interest under the Credit Facility is fully and unconditionally guaranteed, jointly and severally, by ECC and most of its existing wholly-owned domestic subsidiaries. Substantially all of Emmis' assets, including the stock of Emmis' wholly-owned, domestic subsidiaries are pledged to secure the Credit Facility. A copy of the Credit Facility is available at http://is.gd/aMWSjl Employment Pact with CEO Effective Dec. 26, 2012, Emmis Operating Company entered into a three-year employment agreement with Jeffrey H. Smulyan, who currently serves as the Company's Chairman of the board of directors and Chief Executive Officer. Mr. Smulyan's base salary is $900,000 in the first contract year commencing on March 1, 2013, with increases of $25,000 for each succeeding contract year. Mr. Smulyan's employment agreement will automatically renew following the initial three-year term for additional one-year terms unless either the company or Mr. Smulyan provides the other with written notice of non-renewal prior to December 31 of the initial or subsequent term, as applicable. Mr. Smulyan's annual incentive compensation target is 125% of his base salary and will be paid, if at all, based upon achievement of certain performance goals to be determined by the Company's compensation committee. The Company retains the right to pay any annual incentive compensation in cash or shares of the Company's Class A common stock. In connection with execution of the agreement, the company paid Mr. Smulyan a $700,000 signing bonus and Emmis Communications Corporation forgave the balance of a loan payable from Mr. Smulyan which had a balance of $1,151,966 as of Nov. 30, 2012. Each year the agreement remains in effect, Mr. Smulyan is entitled to receive an option to acquire 150,000 shares of the Company's Class A common stock. On or about March 1, 2013, Mr. Smulyan will receive a grant of 400,000 restricted shares of the Company's Class A common stock, which will vest in installments on March 1 of each of 2014, 2015 and 2016. Mr. Smulyan will continue to receive an automobile allowance and will continue to be reimbursed for up to $10,000 per year in premiums for life and disability insurance and retains the right to participate in all of the Company's employee benefit plans for which he is otherwise eligible. About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company's balance sheet at Aug. 31, 2012, showed $287.53 million in total assets, $258.60 million in total liabilities, $46.88 million in series A cumulative convertible preferred stock, and a $17.94 million total deficit. * * * As reported by the TCR on Oct. 16, 2012, Moody's Investors Service placed the ratings of Emmis Communications Corporation on review for upgrade, including Corporate Family Rating currently at B3, following the company's earnings release for 2Q12 (ended Aug. 31, 2012) indicating good performance for radio operations and plans to refinance existing high coupon debt facilities. FELCOR LODGING: S&P Ups Issuer Credit Rating to 'B+' ---------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on FelCor Lodging L.P.'s 10% senior notes due 2014 to '1', indicating S&P's expectation of 90% to 100% recovery for noteholders in the event of a payment default from '3' (50% to 70% recovery expectation). This resulted in our raising our issue-level rating on the notes to 'B+' from 'B-', in accordance with our notching criteria for a '1' recovery rating. The issue-level rating was removed from CreditWatch, where it was placed with positive implications on Dec. 12, 2012. FelCor Lodging L.P. is a subsidiary of FelCor Lodging Trust Inc. The rating action reflects the closing of the company's $525 million 5.625% senior secured notes due 2023 and the use of proceeds to repay $258 million of the 10% senior secured notes due 2014 ($492 million in notes were outstanding at Sept. 30, 2012). The repayment of a portion of the company's 10% senior secured notes resulted in a lower level of secured debt outstanding under S&P's simulated default scenario compared with the previous analysis. This increases recovery prospects for the 10% senior secured notes enough to warrant the upward revision to S&P's recovery and issue-level ratings on the notes. RATINGS LIST FelCor Lodging Trust Inc. Corporate Credit Rating B-/Stable/-- RATINGS REVISED To From FelCor Lodging L.P. 10% sr nts due 2014 B+ B-/Watch Pos Recovery Rating 1 3 FNBH BANCORP: Investors Offer to Buy $26.7MM in Securities ---------------------------------------------------------- FNBH Bancorp, Inc., completed the subscription phase of its private placement for the sale of its securities as part of its recapitalization efforts. The Company received subscriptions from accredited investors in the maximum aggregate amount of approximately $26.7 million for the purchase from the Company of securities denominated as "Units," subject to the Company's acceptance of certain of the final subscriptions and the satisfaction of various conditions. Each Unit subscribed to be purchased is for a price of $1,500 and consists of 715 shares of the Company's common stock and $1,000 principal amount of 10% subordinated debentures to be issued by the Company. The per Unit price reflects a price of $0.70 per share of common stock. An amount equal to approximately $22.9 million of the total amount subscribed has been funded into an escrow account maintained by the Company; however, these funds also remain subject to the conditions, and there is no guarantee the Company will receive any minimum amount of proceeds from the sale of its securities pursuant to these funded subscriptions. The Company's sale of any securities pursuant to the subscriptions received is subject to a number of material conditions, including the Company's acceptance of certain of the final subscriptions received; the Company's receipt of prior regulatory approval; a condition regarding the existence or terms of any formal regulatory enforcement action against First National Bank in Howell, the Company's wholly-owned bank subsidiary; compliance by one or more investors with federal law applicable to the acquisition of "control" of a bank holding company such as the Company; and certain other conditions. The satisfaction or waiver of some of these conditions is out of the control of the Company. There is no guarantee the Company will sell any securities pursuant to the subscriptions received or, if any securities are sold, the amount of securities sold or the timing of the sale. It is possible that one or more of these conditions could prevent the Company's sale of some or all of the securities subscribed. If the necessary conditions are satisfied or waived, the Company currently expects the closing of its sale of securities pursuant to this private placement to take place in the first quarter of 2013. If the Company is successful in selling securities pursuant to the subscriptions received, it intends to use a substantial portion of the net proceeds to provide additional capital to its subsidiary bank. This pending private placement was made only to accredited investors within the meaning of Rule 501 of Regulation D, promulgated under the Securities Act of 1933, as amended. The offer and sale by the Company of these securities will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold except pursuant to an exemption from the registration requirements of the Securities Act and applicable state laws. About FNBH Bancorp Howell, Michigan-based FNBH Bancorp, Inc., is a one-bank holding company, which owns all of the outstanding capital stock of First National Bank in Howell. The Bank was originally organized in 1934 as a national banking association. As of Dec. 31, 2011, the Bank had approximately 85 full-time and part-time employees. The Bank serves primarily five communities, Howell, Brighton, Green Oak Township, Hartland, and Fowlerville, all of which are located in Livingston County. Following the 2011 results, BDO USA, LLP, in Grand Rapids, Michigan, expressed substantial doubt about FNBH Bancorp's ability to continue as a going concern. The independent auditors noted that Corporation's subsidiary bank is significantly undercapitalized under regulatory capital guidelines and, during 2009, the Bank entered into a consent order regulatory enforcement action with its primary regulator, the Office of the Comptroller of the Currency. "The consent order requires management to take a number of actions, including, among other things, increasing and maintaining its capital levels at amounts in excess of the Bank's current capital levels. The Bank has not yet met the higher capital requirements and is therefore not in compliance with the consent order." The Company's balance sheet at Sept. 30, 2012, showed $305.90 million in total assets, $298.95 million in total liabilities and $6.94 million in total shareholders' equity. FR 160: Pre-Trial Conferences Scheduled for Jan. 22, and Feb. 19 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona, according to minutes of Dec. 18, 2012, hearing, will convene pre-trial conferences on Jan. 22, and Feb. 19, 2013, at 9 a.m., to consider the confirmation of FR 160, LLC's Chapter 11 Plan of Reorganization, and creditor Flagstaff Ranch Golf Club's motion for adequate protection. At the hearing, the Court will also consider the objection of Flagstaff Ranch to the confirmation of the Debtor's Plan. Flagstaff Ranch explained that the Debtor's Plan proposes to force the Golf Club to wait up to 10 years to be paid while allowing the Debtor to continue trying to sell lots, which the Debtor has been unable to do for quite some time, all while the Debtor's sole member retains its equity interest for a new value contribution equal to less than one (1) year's worth of payments to the Golf Club under the substantially extended repayment plan proposed in the Plan. On Oct. 22, the Hon. Redfield T. Baum, approved adequacy of the First Amended Disclosure Statement explaining the Plan of Reorganization dated Sept. 10, 2012, which provides that cash payments under the Plan will be generated from (i) new value contributed by IMHFC, the parent company of the Debtor and owner of 100% of the Debtor's membership interests, in the amount of $500,000; (ii) revenues derived from the sale of lots by the Debtor or the Reorganized Debtor; and (iii) the net proceeds from any Debtor Causes of Action. Under the Plan each holder of an Allowed General Unsecured Claim will receive in full satisfaction of the Allowed Claims its pro rata share of 5% of the Gross Sale Price for any Lot. The payments will be made in annual installments on first business bay of the calendar year over a 5-year period commencing Jan. 2, 2013. In exchange for the contribution of new value to the Reorganized Debtor, IMHFC will retain its equity interests in the Reorganized Debtor. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/FR_160_ds_1amended.pdf About FR 160 FR 160 LLC, originally named IMH Special Asset NT 160 LLC, was formed for the purpose of owning 51 residential lots and Tract H at the Flagstaff Ranch Golf Club Community generally located in Coconino County, Arizona. FR 160 LLC filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-13116) in Phoenix on June 12, 2012. FR 160, which claims to be a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets of up to $50 million and debts of up to $100 million. Attorneys at Snell & Wilmer L.L.P., in Phoenix, serve as counsel. The U.S. Trustee has not appointed an official committee in the case due to an insufficient number of persons holding unsecured claims against the Debtor that have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint a committee should interest develop among the creditors. Attorneys at Gordon Silver, in Phoenix, represent Creditor Flagstaff Ranch Golf Club as counsel. FREDERICK DARREN BERG: Commerce Bank Wins Dismissal of Trust Suit ----------------------------------------------------------------- The Commerce Bank of Washington, N.A., won partial victory after Bankruptcy Judge Karen A. Overstreet in Seattle granted its request to dismiss a lawsuit commenced by Mark Calvert, as liquidating Trustee of Meridian Investors Trust, et al. The judge, however, gave the trustee leave to amend his complaint by March 25. Mr. Calvert sued Commerce Bank and Zions Bancorporation for their alleged roles in a massive Ponzi scheme perpetrated by Frederick Darren Berg. Mr. Berg is a debtor in his own individual bankruptcy proceeding, along with six other related entities. The Bankruptcy Court is presiding over 12 bankruptcy cases involving debtors that are/were investment funds and one affiliated entity formerly owned, managed or controlled by Mr. Berg. Those debtors have been substantively consolidated into one proceeding referred to as the "Meridian Bankruptcy." In June 2011, the Bankruptcy Court confirmed a Chapter 11 plan for the Meridian entities. The Plan provides for the creation of the Liquidating Trust for the Substantively Consolidated Meridian Funds, a/k/a/ The Meridian Investors Trust. Mr. Calvert is acting as the Liquidating Trustee of the Meridian Investors Trust, which holds all of the claims of the consolidated bankruptcy estates. The Trustee sued the two banks, on behalf various individuals who are alleged to have invested in 11 Meridian funds managed by Mr. Berg. The Complaint alleges that pursuant to the terms of the Plan, the Investors have assigned certain claims, including their claims against Commerce Bank, to the Trustee for the purpose of joint pursuit on their behalf. Alternatively, the Trustee contends that if the assignments are not treated as valid for these proceedings, the Investors are themselves separate, named plaintiffs. The complaint alleges two causes of action against Commerce Bank: that Commerce Bank, as the bank used by Mr. Berg and the Meridian Funds, aided and abetted Mr. Berg's breach of fiduciary duty to the Investors, and that Commerce Bank aided and abetted a fraud by Mr. Berg perpetrated on the Investors. Commerce Bank and Zions filed separate motions to dismiss. After Zions filed its motion, the plaintiffs docketed a notice of dismissal without prejudice as to all claims against Zions. Consequently, the Court proceeded only with Commerce Bank's motion. Commerce Bank raised a number of grounds for dismissal of the Complaint. Among others, Commerce Bank argued that the relationship between the Investors and Mr. Berg -- that of investor and manager of an investment company, respectively -- was not, as a matter of law, one that could create fiduciary duties owed by Mr. Berg directly to those individuals. Commerce Bank also argued that none of the accounts it maintained for Berg and his related entities was a trust account, and that instead, all such accounts were mere deposit accounts. According to Judge Overstreet, the Complaint fails to include sufficient allegations that the accounts from which funds were diverted for Mr. Berg's personal use were trust accounts and that the Trustee may not rely solely on a conclusory statement that the accounts were trust accounts. Instead, the Trustee must allege sufficient facts to support the contention that the accounts were intended to be trust accounts and that Commerce Bank had knowledge of that intent. Judge Overstreet also held that, in addition to sufficiently alleging the breach of fiduciary duty by Mr. Berg, the Complaint must sufficiently allege that Commerce Bank had knowledge of that breach and substantially assisted in the breach. The case is, MARK CALVERT, as liquidating Trustee of MERIDIAN INVESTORS TRUST, et al. Plaintiffs, v. ZIONS BANCORPORATION, a Utah ORDER ON COMMERCE BANK'S corporation; THE COMMERCE BANK OF MOTION TO DISMISS WASHINGTON, N.A., a federally chartered commercial bank, Defendants, Adv. Proc. No. 12-01767 (Bankr. W.D. Wash). A copy of the Court's Jan. 3, 2013 Order is available at http://is.gd/1mn5gffrom Leagle.com. About Meridian Mortgage and Frederick Darren Berg In November 2010, a federal grand jury in Seattle indicted Frederick Darren Berg on 12 counts of wire fraud, money laundering and bankruptcy fraud in connection with the demise of his Meridian Group of investment funds. Prosecutors believe Mr. Berg took in more than $280 million, with the losses attributed to the ponzi scheme estimated to be roughly $100 million. Hundreds of victims have lost money in the scheme between 2001 and 2010. Mr. Berg commenced a personal Chapter 11 case on July 27, 2010 (Bankr. W.D. Wash. Case No. 10-18668), estimating assets of more than $10 million and liabilities between $1 million and $10 million. The filing came after lawyers for one group of investors, armed with a court order and accompanied by sheriff's deputies, began seizing personal possessions at Mr. Berg's Mercer Island home and downtown Seattle condo. Diana K. Carey, trustee for Mr. Berg's estate, filed on Jan. 27, 2011, voluntary Chapter 11 petitions for Mortgage Investors Fund I LLC (Bankr. W.D. Wash. Case No. 11-10830) estimating assets of up to $50,000 and debts of up to $50 million and Meridian Mortgage Investors Fund III LLC (Case No. 11-10833), estimating up to $50,000 in assets and up to $100 million in liabilities. Michael J. Gearin, Esq., at K&L Gates LLP, in Seattle, served as counsel to the Debtors. Creditors filed an involuntary Chapter 11 petition for Meridian Mortgage Investors Fund II LLC (Bankr. W.D. Wash. Case No. 10-17976) on July 9, 2010. The petitioners were represented by Jane E. Pearson, Esq., at Foster Pepper PLLC, in Seattle. Creditors filed involuntary Chapter 11 petitions for Meridian Mortgage Investors Fund VIII, LLC (Bankr. W.D. Was. Case No. 10-17958) and Meridian Mortgage Investors Fund V, LLC (Bankr. W.D. Wash. Case No. 10-17952) on July 9, 2010. The petitioners were represented by John T. Mellen, Esq., at Keller Rohrback LLP, in Seattle, and Cynthia A. Kuno, Esq., at Hanson Baker Ludlow Drumheller PS, in Bellevue, represent the petitioners. On June 22, 2011, the Bankruptcy Court entered an order confirming a consensual Chapter 11 plan in the Meridian bankruptcy. The Plan provides for the creation of the Liquidating Trust for the Substantively Consolidated Meridian Funds, a/k/a/ The Meridian Investors Trust. Mr. Calvert was named Liquidating Trustee. In February 2012, Mr. Berg was sentenced to 18 years in prison after being convicted of defrauding investors. GAME TRADING: Hastings Wins More Time to Challenge Claim Objection ------------------------------------------------------------------ Bankruptcy Judge Nancy V. Alquist gave her stamp of approval on a Stipulation and Consent Order among Peter Chadwick, in his capacity as Responsible Officer for the estates of Game Trading Technologies, Inc. and Gamers Factory, Inc., and Hastings Entertainment, Inc. On Nov. 27, 2012, the Responsible Officer filed his First Omnibus Objection to Certain (I) No Liability Claims, (II) Duplicative Claims, and (III) Overstated Claims. The deadline to respond to the Omnibus Objection was Dec. 27, 2012. Counsel for Hastings on Dec. 27 contacted counsel for the Responsible Officer in an attempt to resolve the objection to Hastings' claim no. 7 in case number 12-11522. Hastings provided additional information to the Responsible Officer, and he agreed to extend the time in which Hastings has to respond to the Omnibus Objection in order to review the new information. The parties agreed to extend the deadline to respond to the Omnibus Objection through and including Jan. 4, 2013. Hastings is represented by: John F. Massouh, Esquire SPROUSE SHRADER SMITH P.C. 701 S. Taylor, Suite 500 Amarillo, TX 79101 Tel: (806) 468-3337 Fax: (806) 373-3454 E-mail: John.massouh@sprouselaw.com A copy of the Stipulation and Consent Order approved Jan. 3, 2013, is available at http://is.gd/0qdiEMfrom Leagle.com. About Game Trading Technologies Game Trading Technologies Inc., fka City Language Exchange, Inc., (OTC BB: GMTD) filed for Chapter 11 protection (Bankr. D. Md. Lead Case No. 12-11519) on Jan. 30, 2012. James Edward Van Horn, Jr., Esq., at McGuirewoods LLP, represents the Debtor. WeinsweigAdvisors LLC's Marc Weinsweig serves as chief restructuring officer. When it filed for bankruptcy, Game Trading estimated $0 to $50,000 in assets and $1 million to $10 million in debts. Affiliate Gamers Factory, Inc., filed a separate petition for Chapter 11 relief (Bankr. D. Md. Case No. 12-11522) on the same day, listing $1 million to $10 million in both assets and debts. An Official Committee of Unsecured Creditors has been appointed in the case. The panel is represented by Gary H. Leibowitz, Esq., and G. David Dean, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A. On Feb. 8, 2012, the Debtors filed their proposed plan of reorganization and motion to establish bidding procedures for and sale of substantially all of the companies' assets. Pursuant to the sale and bid procedures motion, the companies seek to sell, subject to higher and better offers and bankruptcy Court approval, substantially all of their assets to two stalking horse bidders, DK Trading Partners, LLC, and Mantomi Sales, LLC, respectively. Mantomi Sales, LLC, is 100% owned by Todd Hayes, the Debtors' president and CEO. Pursuant to the Mantomi Sales LLC asset purchase agreement, (i) Mr. Hays was required to resign as President and CEO of the companies on or before the execution of the Mantomi APA; (ii) the companies' Chief Restructuring Officer may employ Mr. Hays as an independent consultant to the companies in matters unrelated to the sale; and (iii) nothing in the Mantomi APA constitutes or will be deemed a breach of the employment agreement between Mr. Hays and the companies. Counsel for the Official Committee of Unsecured Creditors are Gary H. Leibowitz, Esq., and G. David Dean, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A. GENE CHARLES: Has Court OK to Hire Lederman Zeidler as Accountant ----------------------------------------------------------------- Gene Charles Valentine Trust sought and obtained authorization from the U.S. Bankruptcy Court for the Northern District of West Virginia to employ Lederman, Zeidler, Gray & Co., LLP, as accountant for the purpose of preparing its tax returns and providing other necessary tax advice. Lederman Zeidler will be paid at these hourly rates: Partners $225 Professional Staff $75 to $130 Support Staff $50 to $60 To the best of the Debtor's knowledge, Lederman Zeidler does not hold or represent any interest adverse to the Debtor or the Debtor's estate with respect to the matters regarding which W&P is to be employed. About Gene Charles Valentine A business trust created by investment advisor and broker-dealer agent Gene Charles Valentine sought Chapter 11 bankruptcy protection (Bankr. N.D. W.Va. Case No. 12-01078) in Wheeling, West Virginia on Aug. 9, 2012. The Gene Charles Valentine Trust owns commercial and real estate properties in West Virginia, the Financial West Group, the Peace Point Equestrian Center and the Aspen Manor. It estimated $10 million to $50 million in assets and up to $10 million in liabilities. Financial West Investment Group, Inc., doing business as Financial West Group -- http://www.fwg.com/-- is a firm with more than 340 registered representatives supervised by 44 Offices of Supervisory Jurisdiction throughout the United States. Financial West Group is a FINRA, and SIPC member and SEC Registered Investment Advisor (over $1 billion under control) that offers a full range of financial products and services. Its corporate office 32 member staff is dedicated to providing registered representatives quality service and technology to allow them to focus on best servicing their investors needs. Aspen Manor -- http://www.aspenmanorresort-- is a resort that claims to be the "The Jewel of the Ohio Valley." Along with its architectural artistry, including hand-carved ceilings, the Manor is filled will original art, statues, historic furniture and artifacts. Bankruptcy Judge Patrick M. Flatley oversees the case. The Trust hired Mazur Kraemer Law Inc., as bankruptcy counsel. GENERAL MOTORS: Could Face $918MM Hit from Chap. 11-Related Suit ---------------------------------------------------------------- Bankruptcy Judge Robert Gerber could soon rule on whether the 2009 government-led restructuring of General Motors Co. improperly favored hedge funds, the American Bankruptcy Institute reported. About General Motors With its global headquarters in Detroit, Michigan, General Motors Company (NYSE:GM, TSX: GMM) -- http://www.gm.com/-- is one of the world's largest automakers, traces its roots back to 1908. GM employs 208,000 people in every major region of the world and does business in more than 120 countries. GM and its strategic partners produce cars and trucks in 30 countries, and sell and service these vehicles through the following brands: Baojun, Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. GM's largest national market is China, followed by the United States, Brazil, the United Kingdom, Germany, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Co. was formed to acquire the operations of General Motors Corp. through a sale under 11 U.S.C. Sec. 363 following Old GM's bankruptcy filing. The U.S. government once owned as much as 60.8% stake in New GM on account of the financing it provided to the bankrupt entity. The deal was closed July 10, 2009, and Old GM changed its name to Motors Liquidation Co. General Motors Corp. and three of its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 09-50026) on June 1, 2009. The Honorable Robert E. Gerber presides over the Chapter 11 cases. Harvey R. Miller, Esq., Stephen Karotkin, Esq., and Joseph H. Smolinsky, Esq., at Weil, Gotshal & Manges LLP, assist the Debtors in their restructuring efforts. Al Koch at AP Services, LLC, an affiliate of AlixPartners, LLP, serves as the Chief Executive Officer for Motors Liquidation Company. GM is also represented by Jenner & Block LLP and Honigman Miller Schwartz and Cohn LLP as counsel. Cravath, Swaine, & Moore LLP is providing legal advice to the GM Board of Directors. GM's financial advisors are Morgan Stanley, Evercore Partners and the Blackstone Group LLP. Garden City Group is the claims and notice agent of the Debtors. The U.S. Trustee appointed an Official Committee of Unsecured Creditors and a separate Official Committee of Unsecured Creditors Holding Asbestos-Related Claims. Lawyers at Kramer Levin Naftalis & Frankel LLP served as bankruptcy counsel to the Creditors Committee. Attorneys at Butzel Long served as counsel on supplier contract matters. FTI Consulting Inc. served as financial advisors to the Creditors Committee. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, represented the Asbestos Committee. Legal Analysis Systems, Inc., served as asbestos valuation analyst. The Bankruptcy Court entered an order confirming the Debtors' Second Amended Joint Chapter 11 Plan on March 29, 2011. The Plan was declared effect on March 31, 2011. GOLD RESERVE: Gets NYSE MKT Notice of Delisting Application ----------------------------------------------------------- Gold Reserve Inc. on Jan. 4 disclosed that it has received a written notice dated January 3, 2013, that the staff of the NYSE MKT LLC intends to file a delisting application with the United States Securities and Exchange Commission to remove the Company's common shares from being listed on the Exchange. The Company intends to appeal the Exchange staff's decision. The Exchange staff's position is that the Company did not sufficiently comply with the terms of its plan announced October 31, 2011, that was implemented to allow the Company time to regain compliance with the Exchange's continued listing standards by December 20, 2012. As a result, the Exchange staff believes the Company no longer complies with the Exchange's continued listing standards because, following the seizure of the Las Brisas mine by the Venezuelan government in 2008, the Company ceased to be an "operating company" under Sections 1002(c) and 1003(c)(i) of the Exchange's Company Guide and did not remedy that status pursuant to the Plan. The terms of the Plan focused on the Company becoming an "operating company" again, as defined by the Exchange staff. Management believes that the Company has demonstrated substantial compliance with the intent and spirit of the Plan to become an "operating company" by signing an agreement effective April 26, 2012, granting the Company the right to earn an undivided 51% interest in the La Tortuga property, a copper and gold prospect located in Jalisco State, Mexico, and conducting exploration activities at the La Tortuga property. Additionally, management believes the Company meets all other continued listing standards of the Exchange and, as of market close on January 3, 2012, the Company currently meets all the standards for initial listing under Initial Listing Standard 4 (Section 103(d) of the Company Guide). The Company expects to appeal the Exchange staff's decision by January 10, 2013, and will request an oral hearing before a committee of the Exchange to be held at a later date. There can be no assurances that the Company's request for continued listing will be granted. During the appeal period the Company's shares will continue to be listed for trading on the Exchange and will continue to trade on the TSX Venture Exchange. ICSID Arbitration The Company's international arbitration against the Republic of Venezuela regarding the illegal expropriation of its Venezuelan properties is proceeding. As reported earlier, the Tribunal held an oral hearing in the case during the week of February 2012, following which the parties were called upon to submit post hearing briefs. On July 25, 2012, the Tribunal issued a procedural order requesting the production of further evidence related to valuation issues. Both parties have submitted responses and the Tribunal has advised the parties that it will provide further directions in early January 2013 on the implementation of its procedural order and Venezuela has been given until January 17, 2013 to respond to the points raised in a submission of the Company dated December 10, 2012, in regard to the July 25, 2012 procedural order. Gold Reserve Inc. -- http://www.goldreserveinc.com-- is an exploration-stage company. The Company is engaged in the business of acquiring, exploring and developing mining projects. As of December 31, 2011, the Company had not generated any revenues. The Company?s subsidiaries include Gold Reserve Corporation, Gold Reserve de Barbados Limited, Gold Reserve de Venezuela, CA, Compania Aurifera Brisas del Cuyuni, SA, GR El Choco Limited and GRI Minerales El Choco CA. As of December 31, 2011, the Company had no revenue producing mining operations. GOTHAM CITY: Case Summary & 2 Unsecured Creditors ------------------------------------------------- Debtor: Gotham City Investments, LLC 960 South Main Street Plantsville, CT 06479 Bankruptcy Case No.: 12-23057 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court District of Connecticut (Hartford) Judge: Albert S. Dabrowski Debtor's Counsel: Gary J. Greene, Esq. GREENE LAW, PC 11 Talcott Notch Road Farmington, CT 06032 Tel: (860) 676-1336 Fax: (860) 676-2250 E-mail: bankruptcy@greenelawpc.com Scheduled Assets: $775,000 Scheduled Liabilities: $1,223,671 A copy of the Company's list of two largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ctb12-23057.pdf The petition was signed by Todd Meier, member. GRANITE DELLS: Court Denies LLC's Motion to Quash Subpoenas ----------------------------------------------------------- The Hon. Redfield T. Baum of the U.S. Bankruptcy Court for the District of Arizona denied Cavan Management Company, LLC's motion to quash the subpoena issued JP Morgan Bank. Several limited liability companies that are not debtors but were or are affiliated with Granite Dells Ranch Holdings, LLC, filed a motion to quash the subpoenas issued to two banks. The documents sought monthly bank statements and certain canceled checks of the LLCs. According to the Court, the law gave depositors no right in the records of the bank and that the records be subpoenaed over the objection of the depositor, and that the financial documents not be further disclosed by the receiving parties and their attorneys without further order of the Court. About Granite Dells Ranch Holdings Scottsdale, Arizona-based Granite Dells Ranch Holdings LLC filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-04962) in Phoenix on March 13, 2012. Judge Redfield T. Baum PCT Sr. oversees the case. The Debtor is represented by Alan A. Meda, Esq., at Stinson Morrison Hecker LLP. The Debtor disclosed $2.22 million in assets and $157 million in liabilities as of the Chapter 11 filing. Cavan Management Services, LLC is the Debtor's manager. David Cavan, member of the firm, signed the Chapter 11 petition. Arizona ECO Development LLC, which acquired a $83.2 million 2006 loan by the Debtor, is represented by Snell & Wilmer L.L.P. The resolution authorizing the Debtor's bankruptcy filing says the Company is commencing legal actions against Stuart Swanson, AED, and related entities relating to the purchase by Mr. Swanson of a promissory note payable by the Company to the parties that sold a certain property to the Company. According to Law 360, AED sued Granite Dells on March 6 asking the Arizona court to appoint a receiver. Arizona ECO is foreclosing on a secured loan backed by 15,000 acres of Arizona land. The United States Trustee said that an official committee has not been appointed in the bankruptcy case of Granite Dells because an insufficient number of unsecured creditors have expressed interest in serving on a committee. The Debtor's Plan provides for payment to unsecured creditors (including any unsecured claim of AED) in quarterly installments over eight years aggregating $5 million. However, the Plan provides that a holder of an investment promissory note (estimated to total $21 million) will be given the option of participating in the funding of the Reorganized Debtor. Tri-City Investment & Development, LLC, a 39.25% equity holder in the Debtor, also filed a Consolidated Supplemental Disclosure in support of Tri-City's Plan, as amended. Tri-City's consolidated Disclosure Statement incorporates and restates all material terms of the Tri-City's previous disclosure statements and incorporates the terms of the agreement that was reached at the Aug. 20, 2012, mediation. HANKAMER VENTURES: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Hankamer Ventures, LP 14315 Mindy Park Lane Houston, TX 77069 Bankruptcy Case No.: 12-39606 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: David R. Jones Debtor's Counsel: Famose T. Garner, Esq. GARNER SCOTT & JONES, PLLC 440 Louisiana Street, Suite 1575 Houston, TX 77002 Tel: (713) 236-8736 E-mail: ftgarner@gsjlawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. HAWKER BEECHCRAFT: Kaye Scholer Approved for Compliance Issues -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York authorized Hawker Beechcraft, Inc., et al., to employ Kaye Scholer LLP, as special counsel with respect to foreign regulatory and compliance issues. To the best of the Debtors' knowledge, Kaye Scholer does not hold or represent an interest adverse to the Debtors' estates. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee's financial advisor is FTI Consulting, Inc. On June 30, 2012, Hawker filed its Plan, which proposed to eliminate $2.5 billion in debt and $125 million of annual cash interest expense. The plan would give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. In July 2012, Hawker disclosed it was in exclusive talks with China's Superior Aviation Beijing Co. for the purchase of Hawker's corporate jet and propeller plane operations out of bankruptcy for $1.79 billion. In October 2012, Hawker unveiled that those talks have collapsed amid concerns a deal with Superior wouldn't pass muster with a U.S. government panel and other cross-cultural complications. Sources told The Wall Street Journal that Superior encountered difficulties separating Hawker's defense business from those units in a way that would make both sides comfortable the deal would get U.S. government clearance. The sources told WJS the defense operations were integrated in various ways with Hawker's civilian businesses, especially the propeller plane unit, in ways that proved difficult to untangle. Thereafter, Hawker said it intends to emerge from bankruptcy as an independent company. On Oct. 29, 2012, Hawker filed a modified reorganization plan and disclosure materials. Hawker said the plan was supported by the official creditors' committee and by a "substantial majority" of holders of the senior credit and a majority of holders of senior notes. Hawker said it will either sell or close the jet-manufacturing business. The revised plan still offers 81.9% of the new stock in return for $921 million of the $1.83 billion owing on the senior credit. Unsecured creditors are to receive the remaining 18.9% of the new stock. Holders of the senior credit will receive 86% of the new stock. The senior credit holders are projected to have a 43.1% recovery from the plan. General unsecured creditors' recovery is a projected 5.7% to 6.3%. The recovery by holders of $510 million in senior notes is predicted to be 9.2% to 10%. HAWKER BEECHCRAFT: Bank Debt Trades at 46% Off in Secondary Market ------------------------------------------------------------------ Participations in a syndicated loan under which Hawker Beechcraft is a borrower traded in the secondary market at 53.75 cents-on- the-dollar during the week ended Friday, Jan. 4, 2013, an increase of 0.42 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 200 basis points above LIBOR to borrow under the facility. The bank loan matures on March 26, 2014. The loan is one of the biggest gainers and losers among 192 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. HEALTHCARE FULFILLMENT: Case Summary & 20 Largest Unsec Creditors ----------------------------------------------------------------- Debtor: Healthcare Fulfillment Services, LLC 2500 Sylon Blvd. Hainesport, NJ 08036 Bankruptcy Case No.: 12-40069 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Gary Schafkopf, Esq. HOPKINS & SCHAFKOPF, LLC 11 Bala Ave. Bala Cynwyd, PA 19004 Tel: (610) 664-5200 ext. 104 Fax: (610) 664-5599 E-mail: gschafkopf@gmail.com Scheduled Assets: $340,579 Scheduled Liabilities: $1,670,940 A copy of the Company's list of 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/njb12-40069.pdf The petition was signed by Michael A. Miller, president. HEALTHCARE OF FLORENCE: Court Dismisses Chapter 11 Bankruptcy Case ------------------------------------------------------------------ The Hon. James M. Marlar of the U.S. Bankruptcy Court for the District of Arizona has dismissed the Chapter 11 case of Healthcare of Florence, LLC. As reported by the Troubled Company Reporter on Sept. 13, 2012, the Debtor and Florence Hospital, LLC, notified the Court that they joined in the motion by Ilene J. Lashinsky, the U.S. Trustee for Region 14, to dismiss their Chapter 11 cases. The TCR reported on Aug. 24, 2012, that the U.S. Trustee asked the bankruptcy judge to dismiss the case, citing the Debtors' continued funding issues. The Debtors obtained several extensions of the use of cash collateral and implemented cost-cutting measures. The hospital was compelled to essentially cease operations on June 14, 2012. In early July 2012, the Debtors moved to reopen the Florence Community Hospital in an effort to preserve its license so that the hospital might be sold. Florence Community Hospital Group, a group of physicians and investors, was interested in managing the hospital with the intent of eventually purchasing it. This effort failed. The hospital remains closed. About Healthcare of Florence Healthcare of Florence, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-08547) in Tucson, Arizona, on April 23, 2012. Healthcare of Florence, LLC -- http://www.florencecommunityhealthcare.com-- owns and operates a full-service community hospital in Florence, Arizona. Judge James M. Marlar presides over the case. James F. Kahn P.C. serves as the Debtor's counsel. The Debtor disclosed $42,244,804 in assets and $39,007,338 in liabilities as of the Chapter 11 filing. The petition was signed by Edward McEachern, CEO of Initiatives Healthcare, LLC, manager of debtor. The U.S. Trustee appointed a three-member creditors committee. HEALTHWAREHOUSE.COM INC: Incurs $1.6-Mil. Net Loss in 2nd Quarter ----------------------------------------------------------------- HealthWarehouse.com, Inc., filed its quarterly report on Form 10- Q, reporting a net loss of $1.6 million on $3.0 million of net sales for the three months ended June 30, 2012, compared with a net loss of $1.1 million on $2.5 million of net sales of $2.5 million for the same period ended June 30, 2011. For the six months ended June 30, 2012, the Company had a net loss of $3.2 million on $6.2 million of net sales as compared with a net loss of $2.2 million on $4.8 million of net sales for the same period ended June 30, 2011. The Company's balance sheet at June 30, 2012, showed $2.2 million in total assets, $6.8 million in total liabilities, $752,226 of Redeeemable Preferred Stock ? Series C, and a stockholders' deficiency of $5.3 million. "Since inception, the Company has financed its operations primarily through product sales to customers, debt and equity financing agreements, and advances from stock holders. As of June 30, 2012, and Dec. 31, 2011, the Company had negligible cash and working capital deficiency of $5,724,914 and $2,404,464, respectively. For the six months ended June 30, 2012, cash flows included net cash used in operating activities of $581,948, net cash provided by investing activities of $138,241 and net cash provided by financing activities of $443,846. Additionally, all of the Company's outstanding convertible notes payable mature at the end of December 2012 and outstanding notes payable mature in January 2013. These conditions raise substantial doubt about the Company?s ability to continue as a going concern." A copy of the Form 10-Q is available at http://is.gd/vtJoyS Florence, Kentucky-based HealthWarehouse.com, Inc., is a licensed U.S. pharmacy and healthcare e-commerce company that sells discounted brand name and generic prescription drugs and over-the- counter (OTC) medical products. * * * As reported in the TCR on July 5, 2012, Marcum LLP, in New York, N.Y., expressed substantial doubt about HealthWarehouse.com's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. HEARTLAND DENTAL: Moody's Lifts Rating on Sr. Facilities to 'Ba3' ----------------------------------------------------------------- Moody's Investors Service upgraded the first lien senior secured credit facilities of Heartland Dental Care, LLC to Ba3 from B1. The upgrade follows a shift in the capital structure by $50 million from the first lien term loan (reduced to $400 million from $450 million) to the second lien term loan (increased to $250 million from $200 million) from the structure originally proposed, resulting in Moody's expectation of a higher recovery rate for first-lien lenders in a default scenario. At the same time, Moody's affirmed the Caa1 rating on the company's second lien senior secured term loan. The outlook for the ratings is stable. Following is a summary of Moody's rating actions: Ratings upgraded: $100 million 1st lien senior secured revolving credit facility, to Ba3 (LGD3, 30%) from B1 (LGD 3, 34%) $400 million (reduced from $450 million) 1st lien senior secured term loan, to Ba3 (LGD3, 30%) from B1 (LGD 3, 34%) Ratings affirmed/LGD assessments revised: $250 million (increased from $200 million) 2nd lien senior secured term loan, to Caa1 (LGD5, 83%) from Caa1 (LGD 5, 86%) Corporate Family Rating, B2 Probability of Default Rating, B2 The outlook is stable. Ratings Rationale The B2 Corporate Family Rating reflects the company's small absolute size based on revenue and earnings, high financial leverage, and modest interest coverage relative to other single-B rated companies. Heartland's credit profile benefits from its market position as the largest dental support services business in the U.S., good diversity across services and geographies, positive same store sales growth, and favorable long-term trends within the DSO industry. On a pro forma basis for the twelve months ended September 30, 2012, Heartland's debt to EBITDA including Moody's Standard Adjustments was high at approximately 6.2 times. However, Moody's expects that the near-term reduction of financial leverage will remain largely within the company's control, depending on the pace and magnitude of the company's growth strategy. While Moody's views Heartland's base business as stable, the company is likely to pursue an aggressive acquisition and de novo growth strategy over the intermediate-term. The ratings are also constrained by the high degree of regulatory oversight, given the company's operation under a corporate integrity agreement (CIA). The rating outlook is stable, and reflects Moody's assumption that the company's affiliation and de novo growth strategy will be financed predominantly through internally-generated cash flow. The stable outlook also reflects Moody's assumption of low-to-mid single digit same store revenue and earnings growth and Moody's expectation that the company will improve financial leverage to below 6.0 times on a Moody's adjusted basis by the end of 2013. A downgrade could occur if Moody's believes that the company is unlikely to reduce leverage to below 6.0 times by the end of 2013 on a Moody's adjusted basis, if free cash flow turns negative, or if liquidity deteriorates. This could occur if Heartland experiences slower same-store sales growth, or if the company fails to decrease the recent aggressive pace of dental practice affilations. The ratings could also be lowered if the company faces any material adverse legal or regulatory event. An upgrade of the ratings is unlikely over the near-term due to the company's small absolute size, high degree of regulatory oversight, and aggressive affiliation and de novo growth strategy, which Moody's expects will limit debt repayment. Over time, if the company exhibits good same store sales growth accompanied by a more moderate affiliation and de novo growth strategy such that adjusted leverage is sustained below 4.0 times and free cash flow to debt exceeds 8%, Moody's could upgrade the ratings. Headquartered in Effingham, Illinois, Heartland Dental Care ("Heartland") is the largest dental support services business in the United States, both by revenue and number of offices. The company provides support staff and comprehensive business support functions under management service agreements (MSA) to its affiliated dental practices, organized as professional corporations ("PCs"). Under the MSAs, Heartland provides all services necessary for the administration of the non-clinical aspects of the dental operations, while the affiliated practices are responsible for providing dental care to patients. In addition to providing dental facilities (leased from third parties), dental supplies and support staff to the affiliated practices, Heartland also assists staff recruitment and training, quality assurance, facilities management, employee benefits administration, information systems and technology, marketing, and financial planning and reporting. As of September 30, 2012, Heartland was affiliated with 381 locally-branded dental offices, supporting 544 dentists across 21 states. During the twelve months ended September 30, 2012, the company generated net revenue of approximately $540 million. The principal methodology used in rating Heartland Dental Care, LLC 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. HMX ACQUISITION: Feb. 5 Fixed as General Claims Bar Date -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York established Feb. 5, 2013, at 5 p.m. (prevailing Eastern Time), as the deadline for any individual or entity to file proofs of claim against HMX Acquisition Corp., et al. The Court also set April 19, at 5 p.m., as the governmental unit bar date. Original proofs of claim form must be sent to Epiq Bankruptcy Solutions, LLC, the official noticing and claims agent in the Debtors' cases: by first-class mail: HMX Acquisition Corp. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC FDR Station, P.O. Box 5015 New York, NY 10150-5015 by hand delivery or overnight mail: HMX Acquisition Corp. Claims Processing Center c/o Epiq Bankruptcy Solutions, LLC 757 Third Avenue, 3rd Floor New York, NY 10017 About HMX Acquisition HMX Acquisition Corp. and HMX Poland Sp. z o. o. filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case Nos. 12-14300 and 12-14301) on Oct. 19, 2012. On Oct. 21, 2012, affiliates HMX, LLC, Quartet Real Estate, LLC, and HMX, DTC Co. also filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Cases Nos. 12- 14327 to 12-14329). Judge Allan L. Gropper presides over the cases. The Debtors are seeking to have their cases jointly administered for procedural purposes under Case No. 12-14300, which is the case number assigned to HMX Acquisition Corp. The Debtors' principal place of business is located at 125 Park Avenue, in New York. The Debtors are leading American designers, manufacturers, licensors, and licensees of men's and women's business and leisure apparel focused primarily on the luxury, bridge, and better price points. The Debtors are the largest manufacturer and marketer of U.S.-made men's tailored clothing, with an attractive portfolio of owned and licensed brands sold primarily through upscale department stores, specialty stores, and boutiques. As of Oct. 12, 2012, the Debtors had consolidated assets of $153.6 million and total liabilities of $119.5 million. Jared D. Zajac, Esq., at Proskauer Rose LLP, in New York; and Mark K. Thomas, Esq., and Peter J. Young, Esq., in Proskauer Rose LLP, in Chicago, represent the Debtors as counsel. The Debtors' investment banker is William Blair & Company, L.L.C. CDG Group, LLC, is the Debtors' financial advisor. Epiq Bankruptcy Solutions, LLC is the Debtors' claims agent. Tracy Hope Davis, the U.S. Trustee for Region 2, appointed five members to the official committee of unsecured creditors. The Court approved the sale of men's suit maker HMX Group for $70.1 million to Authentic Brands Group, which is owned by private equity firm Leonard Green & Partners LP. HOMEWARD RESIDENTIAL: S&P Cuts Issuer Credit Rating to 'B' ---------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its issuer credit rating on Homeward Residential Inc. to 'B' from 'B+' and removed the rating from CreditWatch with negative implications, where we had placed it on Oct. 4, 2012. We subsequently withdrew the issuer credit rating on Homeward Residential. The issuer credit rating on the newly combined firm, Ocwen, is 'B', and the outlook is stable. "The rating actions follow the Dec. 28, 2012, announcement that Ocwen and WL Ross, a private equity firm that had controlled Homeward Residential, completed the acquisition of Homeward Residential," said Standard & Poor's credit analyst Jeff Zaun. Consideration was $750 million, including $588 million of cash and $162 million in Ocwen convertible preferred stock. Ocwen paid off Homeward's $375 million senior secured credit facilities. "Our ratings on the combined firm, Ocwen Financial Corp., reflect the company's history of shifts in its business strategy, its reliance on wholesale funding, and its above-average operational risk," said Mr. Zaun. "Ocwen's limited leverage, low-cost mortgage servicing operations, and servicing operations that generate strong cash flows offset these strengths." The outlook on the combined firm, Ocwen, is stable. We could lower the ratings if the company pursues a more aggressive acquisition strategy that increases leverage (as measured by cash flow coverage of debt and interest). We could downgrade Ocwen if operational miscues or the debt burden created by acquisitions leads to multiple quarterly losses or debt to adjusted EBITDA of more than 3.5x. An upgrade is unlikely for several quarters following the Homeward and ResCap acquisitions because we will need to assess how the acquisitions affect earnings and debt service. We could upgrade Ocwen following smooth integration of the acquisitions if earnings remain strong and recourse debt to adjusted EBITDA (which is after interest expense on match funding liabilities) remains below 2.5x for multiple quarters. In the longer term, upgrade potential will remain limited by the uncertainty regarding the volume of subprime servicing available once housing markets eventually stabilize. HORIZON LINES: Zendan Promoted to EVP, Receives Pay Hike -------------------------------------------------------- The Compensation Committee of the Board of Directors of Horizon Lines, Inc., approved the promotion of Michael F. Zendan II from Senior Vice President and General Counsel to Executive Vice President and General Counsel in connection with additional responsibilities assigned to him. The Committee also approved an increase of Mr. Zendan's base annual salary from $300,000 to $370,000. The Committee also granted Mr. Zendan 241,667 restricted stock units subject to the terms of the Company's 2012 Incentive Compensation Plan. Thirty percent of the restricted stock units will vest on March 31, 2014, and 20% of the restricted stock units will vest on March 31, 2015, solely if Mr. Zendan remains in continuous employment with the Company. If Mr. Zendan remains in continuous employment with the Company and certain performance goals established by the Committee have been met, an additional thirty percent of the restricted stock units will vest on March 31, 2014, and an additional twenty percent of the restricted stock units will vest on March 31, 2015. If any of the performance based restricted stock units do not vest on their assigned performance date solely because the performance goals are not met, then those restricted stock units will remain outstanding and be eligible to vest on subsequent vesting dates to the extent the Company achieves the performance goals for that subsequent performance period. All of the unvested restricted stock units will immediately vest and no longer be subject to restriction immediately prior to a change of control, as defined in the 2012 Plan. All of the restricted stock units carry dividend equivalent rights. About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. Horizon Lines reported a net loss of $229.41 million in 2011, a net loss of $57.97 million in 2010, and a net loss of $31.27 million in 2009. The Company's balance sheet at Sept. 23, 2012, showed $620.50 million in total assets, $617.47 million in total liabilities and $3.02 million in total stockholders' equity. Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * In June 2012, Moody's Investors Service affirmed Horizon Lines, Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating ("PDR") at Caa2 and removed the LD ("Limited Default") designation from the rating in recognition of the conversion to equity of the $228 million of Series A and Series B Convertible Senior Secured notes due in October 2017 ("Notes"). Moody's said the affirmation of the Corporate Family and Probability of Default ratings considers that total debt has been reduced by the conversion of the Notes, but also recognizes the significant operating challenges that the company continues to face. HOSTESS BRANDS: Said to Be In Talks With Flowers, Grupo Bimbo ------------------------------------------------------------- The Wall Street Journal's Mike Spector and Rachel Feintzeig report that Flowers Foods Inc. and Grupo Bimbo SAB are in discussions to acquire pieces of Hostess Brands Inc.'s bread business, according to people familiar with the talks. The sources told WSJ that Hostess could disclose Flowers, Grupo Bimbo or others as opening bidders in a looming bankruptcy-court auction for the assets as soon as this week. One source said the so-called stalking-horse bids for the bread assets are on track to be disclosed as soon as Thursday, though the timing could change. One of the sources said Hostess is still determining how to split up assets and package them for buyers. WSJ relates people familiar with the talks said Hostess' bread brands are likely to be split into at least two groups for sale, with Flowers and Grupo Bimbo as leading contenders to reach deals to buy them subject to higher offers in a court-supervised auction. A spokesman for Hostess said Saturday that the company "expects to establish up to a half- dozen stalking-horse bids for substantially all of its assets." WSJ relates one source said Hostess' bread brands could fetch more than $350 million. The bids are still being negotiated, so their final values and structures aren't yet determined, the person said. The source also said Hostess's cake business, including the Twinkies brand, is expected to be sold later this year, and negotiations with possible buyers remain in early stages. Sources also told WSJ that Wal-Mart Stores Inc. and Kroger Co. are also interested in Hostess's bread brands but aren't expected to be opening bidders for them. Other smaller companies are also in discussions with Hostess, the person said. WSJ relates spokesmen for Grupo Bimbo, Kroger and Wal-Mart have declined to comment. A spokesman for Flowers didn't immediately respond to a request for comment. 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 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. The bankruptcy judge signed a formal order on Nov. 30 giving final approval to wind-down procedures. The latest budget projects the $49 million loan for the Chapter 11 case being paid down to $21.2 million by Feb. 22. INNER CITY: Court Denies Plea to Appoint Chapter 11 Trustee ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York denied Hugh Wyatt's motion to appoint a Chapter 11 trustee in the cases of Inner City Media Corporation, et al. As reported in the Troubled Company Reporter on Oct. 2, 2012, according to Mr. Wyatt, founder and past officer of Inner City Broadcasting Corporation, the parent company of the Debtor, the Debtors have committed fraud, dishonestly, and gross mismanagement of the affairs. Mr. Wyatt said that the Chapter 11 trustee will preserve assets and reorganize the Debtor to pay creditors in and equitable manner. About Inner City On Aug. 23, 2011, affiliates of Yucaipa and CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd., signed involuntary Chapter 11 petitions for Inner City Media Corp. and its affiliates (Bankr. S.D.N.Y. Case Nos. 11-13967 to 11-13979) to collect on a $254 million debt. The Petitioning Creditors are party to the senior secured credit Facility pursuant to which they (or their predecessors in interest) extended $197 million in loans to the Alleged Debtors to be used for general corporate purposes. More than two years ago, the Alleged Debtors defaulted under the Senior Secured Credit Facility, and in any event the entire amount of principal and accrued and unpaid interest and fees became immediately due and payable on Feb. 13, 2010. Inner City Media's affiliates subject to the involuntary Chapter 11 are ICBC Broadcast Holdings, Inc., Inner-City Broadcasting Corporation of Berkeley, ICBC Broadcast Holdings-CA, Inc., ICBC- NY, L.L.C., ICBC Broadcast Holdings-NY, Inc., Urban Radio, L.L.C., Urban Radio I, L.L.C., Urban Radio II, L.L.C., Urban Radio III, L.L.C., Urban Radio IV, L.L.C., Urban Radio of Mississippi, L.L.C., and Urban Radio of South Carolina, L.L.C. Judge Shelley C. Chapman granted each of Inner City Media Corporation and its debtor affiliates relief under Chapter 11 of the United States Code. The decision came after considering the involuntary petitions, and the Debtors' answer to involuntary petitions and consent to entry of order for relief and reservation of rights. Attorneys for Yucaipa Corporate Initiatives Fund II, L.P. and Yucaipa Corporate Initiatives (Parallel) Fund II, L.P. are John J. Rapisardi, Esq., and Scott J. Greenberg, Esq., at Cadwalader, Wickersham & Taft LLP. Attorneys for CF ICBC LLC, Fortress Credit Funding I L.P., and Drawbridge Special Opportunities Fund Ltd. are Adam C. Harris, Esq., and Meghan Breen, Esq., at Schulte Roth & Zabel LLP. Akin Gump Strauss Hauer & Feld LLP serves as the Debtors' counsel. Rothschild Inc. serves as the Debtors' financial advisors and investment bankers. GCG Inc. serves as the Debtors' claims agent. The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Inner City Media because an insufficient number of persons holding unsecured claims against the Debtor has expressed interest in serving on a committee. INSTITUTE FOR NEUROLOGIC: Files Bankruptcy to Counter Receivership ------------------------------------------------------------------ Bloomberg News' David Armstrong reports that The Florida Institute for Neurologic Rehabilitation Inc., a U.S. brain-injury treatment center, and three affiliated corporations last week filed for bankruptcy (Bankr. M.D. Fla. Case No. 13-00102) following reports of abuse and neglect of patients by their caregivers. In court filings in U.S. Bankruptcy Court in in Tampa, Fla., FINR estimated they owe between $3 million and $30 million to 103 to 346 creditors and that their assets total $150,000 or less. According to Bloomberg, the bankruptcy filing came on the same day that a unit of Regions Financial Corp. sued the institute, claiming it defaulted on $31 million in real-estate loans. Birmingham, Alabama-based Regions Bank said in its lawsuit that patients' welfare is at risk because of financial problems and mismanagement at the rehabilitation center in Wauchula, about 50 miles southeast of Tampa. Regions Bank is seeking a court- appointed receiver to take control of the center "pending the foreclosure or other disposition of the collateral" for the loans. According to Bloomberg, FINR stopped making payments to the bank in August, has failed to give the government the payroll taxes withheld from employees and hasn't paid real estate taxes and routine operating expenses, according to the lawsuit. INTERFAITH MEDICAL: Taps Nixon Peabody as Corporate Counsel ----------------------------------------------------------- Interfaith Medical Center, Inc., asks the U.S. Bankruptcy Court for the Eastern District of New York for permission to employ Nixon Peabody LLP as special corporate and healthcare counsel. On Feb. 18, 2011, Nixon Peabody was retained by the Debtor as counsel to provide general advice and assistance with regard to general healthcare matters. Nixon Peabody will, among other things: a) act as lead counsel in connection with any proposed transaction between the Debtor and one or more other hospitals regarding a future relationship; b) act as health care regulatory counsel; c) counsel the Debtor with respect to compliance matters, including matters that implicate health care fraud and abuse laws; and d) perform all other necessary or requested legal services. The hourly rates of Nixon Peabody's personnel range from $240 to $965. The paralegals hourly rates range from range $140 to $480. To the best of the Debtor's knowledge, Nixon Peabody does not have an interest materially adverse to the Debtor's estate, or of any class of creditors. A hearing on Jan. 14, 2013, at 2 p.m. (Eastern Time) has been set. Objections, if any, are due Jan. 7, 2013, at 4 p.m. About Interfaith Medical Center, Inc. Headquartered in Brooklyn, New York, Interfaith Medical Center, Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford- Stuyvesant and an ambulatory care network of eight clinics in central Brooklyn, in Crown Heights and Bedford-Stuyvesant. The Company filed for Chapter 11 protection (Bankruptcy E.D. N.Y. Case No. 12-48226) on Dec. 2, 2012. Bankruptcy Judge Jerome Feller presides over the case. Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP represents the Debtor in its restructuring effort. The Debtor estimates assets and debts at $100 million to $500 million. The petition was signed by Luis A. Hernandez, president and chief executive officer. ISC8 INC: Posts $19.6MM Net Loss in FY2012; Forbearance Extended ---------------------------------------------------------------- ISC8 Inc., formerly known as Irvine Sensors Corporation, filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $19.66 million on $4.19 million of total revenues for the fiscal year ended Sept. 30, 2012, compared with a net loss of $15.76 million on $5.17 million of total revenues for the fiscal year ended Oct. 2, 2011. The Company's balance sheet at Sept. 30, 2012, showed $6.14 million in total assets, $41.57 million in total liabilities and a $35.42 million total stockholders' deficit. Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that as of Sept. 30, 2012, the Company has negative working capital of $10.1 million and a stockholders's deficit of $35.4 million which raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-K is available at http://is.gd/0Od2gN Forbearance with PFG Extended Until January 31 The Company was not in compliance with the financial covenants contained in its Dec. 14, 2011, Loan and Security Agreement with Partners for Growth III, L.P. On Aug. 21, 2012, the Company and PFG entered into a Forbearance, Limited Waiver and Consent under Loan and Security Agreement; on Sept. 28, 2012, the Company and PFG entered into an Extension of Forbearance Under Loan and Security Agreement effective until Oct. 31, 2012; and on Oct. 31, 2012, the Company and PFG entered into a second Extension of Forbearance Under Loan and Security Agreement effective until Dec. 15, 2012. Due to the Company's continued non-compliance with certain financial covenants under the Loan Agreement, on Dec. 20, 2012, the Company entered into a Third Extension of Forbearance Under Loan and Security Agreement effective as of Dec. 15, 2012, until Jan. 31, 2013. The effectiveness of the Forbearance Extension is conditioned upon the satisfaction by the Company of various conditions including the execution and delivery of a counterpart to the Forbearance Extension duly executed by an authorized officer of the Company, payment of the PFG Expenses, the issuance and delivery of certain warrants by Dec. 24, 2012, and updating the Company's representations and warranties. Any failure of any of the conditions, unless waived by PFG in its sole discretion, will constitute an event of default. In consideration of granting the Forbearance Extension, the Company agreed to: (a) pay to PFG its reasonable out-of-pocket fees and expenses (including all reasonable attorneys' fees and expenses) in connection with the Forbearance Extension; and (b) issue and deliver to PFG or its designees, seven-year warrants to purchase $225,000 in the aggregate of the securities issued (i) in capital raising transactions of up to 250,000,000 shares of the Company's Common Stock at the effective issue price in any such transaction, or (ii) if no transaction described in the foregoing subsection (b)(i) is consummated, in such other equity financing as is consummated by the Company. About Irvine Sensors Headquartered in Costa Mesa, Calif., ISC8 Inc., formerly known as Irvine Sensors Corporation, (OTC BB: IRSN) -- http://www.irvine- sensors.com/ -- is a vision systems company engaged in the development and sale of miniaturized infrared and electro-optical cameras, image processors and stacked chip assemblies and sale of higher level systems incorporating said products. Irvine Sensors also conducts research and development related to high density electronics, miniaturized sensors, optical interconnection technology, high speed network security, image processing and low- power analog and mixed-signal integrated circuits for diverse systems applications. JER/JAMESON MEZZ: Plan Declared Effective Dec. 18 ------------------------------------------------- JER/Jameson Mezz Borrower I , LLC, et al., notified the U.S. Bankruptcy Court for the District of Delaware that the Effective Date of the Second Amended Joint Plan of Reorganization occurred on Dec. 18, 2012. Each of the conditions precedent to consummation of the plan has been satisfied or waived with the Plan. AS reported in the Troubled Company Reporter on Dec. 27, 2012, the Debtors confirmed a Second Amended Joint Plan of Reorganization, as modified dated Dec. 11, 2012, that will fund payments from cash from the Reorganized Debtors, including cash from the Hotels' business operations. The Plan provides that the costs of making planned improvements to the Hotels will be funded with cash from the Debtors or Reorganized Debtors, well as key money to be provided by the licensors -- Wyndham Worldwide Corporation and Choice Hotels International, Inc. -- or after the confirmation of the Plan pursuant to the terms of the key money notes. Under the Plan, on or before the Effective Date, the Operating Debtors will enter into an operating lease with ColFin JIH AHI Opco, LLC, an affiliate of the Operating Debtors to be formed on or before the Effective Date. Pursuant to the Operating Lease, Opco will have the right to operate the Hotels and receive all revenues therefrom, in consideration of rental payments to the Operating Debtors. The Operating Debtors may also sell or assign certain personal property relating to the Hotels to Opco in connection with the Operating Lease. Pursuant to the new management agreement, Channel Point will manage the Hotels for an initial term of five years in consideration of a management fee which is a percentage of gross revenue. In connection with the New Management Agreement, an affiliate of Aimbridge will invest approximately $6 million in three joint ventures with the Colony JIH Lenders, in exchange for a minority non-controlling equity interest in ColFin and a supplemental profit-sharing component in the event certain return hurdles are met, and a minority non-controlling direct or indirect equity interest in Opco and a subsidiary of Mezzco. A copy of the Plan is available for free at: http://bankrupt.com/misc/JERJAMESON_plan_modified.pdf About JER/Jameson Mezz Borrower II Founded in 1987, Jameson is a chain of 103 small, budget hotels operating under the Jameson brand in the Southeast and Midwest. The Jameson properties are operated under the names Jameson Inn and Signature Inn. The hotels are based in Smyrna, Georgia. The chain was taken private in a 2006 buyout by JER Partners, a unit of real-estate investor J.E. Robert Cos. JER then put $330 million of debt on the chain to finance the buyout. At the top of the list is a $175 million mortgage loan with Wells Fargo Bank NA serving as special servicer. There are four tranches of mezzanine loans, each for $40 million. The collateral for each of the Mezz Loans is the equity interest in the entity or entities immediately below the borrower of each Mezz Loan. All of the mezzanine loans matured in August. JER/Jameson NC Properties LP and JER/Jameson Properties LLC are borrowers under the loan with Wells Fargo. The mortgage loan is secured by mortgages on hotel properties. The first set of foreclosure sales were set for Nov. 1, 2011. The Mortgage Borrowers have not sought bankruptcy protection. Colony Capital affiliates, CDCF JIH Funding LLC and ColFin JIH Funding LLC, hold the first and second mezzanine loans. The First Mezz Loan is secured by a pledge of JER/Jameson Mezz Borrower I LLC's 100% interest in the Mortgage Borrowers. Prior to the maturity default, the Colony JIH Lenders purchased the Second Mezz Loan from a previous holder. The Second Mezz Loan is secured by a pledge of JER/Jameson Mezz Borrower II's 100% membership interest in the First Mezz Borrower. Gramercy Warehouse Funding I LLC and Gramercy Loan Services LLC hold a controlling participation interest in the Third Mezz and Fourth Mezz Loans. JER Investors Trust Inc. holds the remaining participation interests in the Third Mezz and Fourth Mezz Loans. JER/Jameson Holdco LLC, an affiliate of the Mortgage Borrowers, owns the 100% equity interest in the Fourth Mezz Borrower. Gramercy took over its mezzanine borrower in August. JER/Jameson Mezz Borrower II LLC filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13338) on Oct. 18, 2011, to prevent foreclosure by Colony. The Chapter 11 filing had the effect of preventing Colony from wiping out Gramercy's interest. Seven days later, JER/Jameson Mezz Borrower I LLC filed for bankruptcy (Bankr. D. Del. Case No. 11-13392) on Oct. 25, 2011. Judge Mary F. Walrath presides over the case. The Debtors tapped Ashby & Geddes, P.A. to represent their restructuring efforts. Epiq Bankruptcy Solutions, LLC, serves as its noticing, claims and balloting agent. Each of the Debtors estimated $100 million to $500 million in assets and $10 million to $50 million in debts. JER/Jameson Properties LLC disclosed $294,662,815 in assets and $163,424,762 in liabilities as of the Chapter 11 filing. The petitions were signed by James L. Gregory, vice president. Colony specializes in real estate and has roughly $34 billion of assets under management. Colony is represented in the case by Pauline K. Morgan, Esq., John T. Dorsey, Esq., Margaret Whiteman Greecher, Esq., and Patrick A. Jackson, Esq., at Young Conaway Stargatt & Taylor LLP; and Lindsee P. Granfield, Esq., Sean A. O'Neil, Esq., and Jane VanLare, Esq., at Cleary Gottlieb Steen & Hamilton LLP. The U.S. Trustee has not appointed an official Committee of unsecured creditors in any of the Debtors' cases. KESTREL TECHNOLOGIES: Updated Case Summary & Creditors' Lists ------------------------------------------------------------- Lead Debtor: Kestrel Technologies, Inc. 369 Lexington Avenue, Suite 321 New York, NY 10017 Bankruptcy Case No.: 12-15052 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Heidi J. Sorvino, Esq. HODGSON RUSS LLP 1540 Broadway 24th Floor New York, NY 10036 Tel: (212) 661-3535 E-mail: hsorvino@hodgsonruss.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 Affiliate that simultaneously filed separate Chapter 11 petition: Debtor Case No. ------ -------- Kestrel Solutions, LLC 12-15054 Assets: $1,000,001 to $10,000,000 Debts: $100,001 to $500,000 The petitions were signed by Edward L. Bishop, III, president. A. A copy of Kestrel Technologies, Inc.'s list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nysb12-15052.pdf B. A copy of Kestrel Solutions, LLC's list of its 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/nysb12-15054.pdf LBI MEDIA: Completes Exchange with Right to PIK New Bonds --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that LBI Media Inc. completed an exchange offer for some of its unsecured bonds. Although the exchange doesn't reduce debt, it allows LBI to pay interest on the new bonds with issuance of more debt, a pay=in-kind feature known as PIK. By the year's end, holders of $174.6 million, or 76.3%, of 8.5% senior subordinated notes had tendered. Similarly, 73.8%, or $30.9 million, of 11% senior discount notes tendered. Standard & Poor's said Jan. 3 that it will probably give LBI a rating around CCC sometime in the next few weeks because it expects "cash flow deficits will persist." According to S&P, the exchange reduces debt maturities in October by more than $30 million to $11 million. LBI missed a $3.8 million interest payment that was due Oct. 15 on the 11% senior discount notes due in 2013 issued by LBI Media Holdings Inc. About LBI Media Headquartered in Burbank, CA, LBI Media, Inc., operates Spanish- language broadcasting properties including 21 radio stations (15 FM and 6 AM generating 47% of 2011 revenue) and 9 television stations plus the EstrellaTV Network (53% of 2011 revenue). EstrellaTV is a Spanish-language television broadcast network that was launched in the fall of 2009. Through EstrellaTV, the company is affiliated with television stations in 39 DMAs comprising 78% of U.S. Hispanic television households. Jose Liberman founded the company in 1987, together with his son, Lenard Liberman. Shareholders include Jose Liberman (20%), Lenard Liberman (41%), Oaktree Capital (26%) and Tinicum Capital (13%). The dual class equity structure provides the Liberman's with 94% of voting control between Jose Liberman (31%) and Lenard Liberman (63%). Revenues for FY2011 totaled $117.5 million. LBI Media's balance sheet at Sept. 30, 2012, showed $311.61 million in total assets, $561.02 million in total liabilities and a $249.40 million total stockholders' deficiency. "The condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern," the Company said in its quarterly report for the period ended Sept. 30, 2012. "However, as a result of uncertainties related to future sources and sufficiency of liquidity required by the Company to satisfy its outstanding debt and debt service obligations... there is substantial doubt about the Company's ability to continue as a going concern." LBI MEDIA: S&P Lowers Corporate Credit Rating to 'SD' ----------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Burbank, Calif.-based LBI Media Inc. (LBI) to 'SD' from 'CC'. The issue-level rating on the company's 8.5% senior subordinated notes due 2017 was lowered to 'D' from 'CC', and the recovery rating on this debt remains unchanged at '6' (0% to 10% recovery expectation). The issue-level rating on the company's 9.25% senior secured notes due 2019 remains 'CCC'. The recovery rating on this debt remains unchanged at '3' (50% to 70% recovery expectation). "The rating actions follow the company's announcement that it completed the exchange transaction on Dec. 31, 2012," said Standard & Poor's credit analyst Minesh Patel. Under our criteria, we consider debt exchanges of highly leveraged issuers as tantamount to a default. "Although the exchange transaction was not a significant deleveraging event, the post-exchange capital structure provides the company the flexibility to reduce cash flow deficits by paying interest in kind on its new exchanged debt, and by reducing October 2013 debt maturities to about $11 million from $41.8 million. However, we estimate that cash flow deficits will persist," S&P added. "We will reassess the corporate credit rating on further review of the exchange documents and business trends. It is our preliminary expectation that we would not raise the corporate credit rating higher than the 'CCC' category based on the company's still excessively high debt leverage, our expectation of negative discretionary cash flow, fractional EBITDA coverage of interest expense, and our expectation of continuing losses at the Estrella network," S&P said. LDK SOLAR: Chinese Agency Orders Payment of RMB294-MM to Supplier ----------------------------------------------------------------- LDK Solar Co., Ltd., said the China International Economic and Trade Arbitration Commission (CIETAC) stated that the wafer equipment supply contract entered into in July 2008 between LDK Solar and JYT Corporation of Beijing is valid and effective through the duration and at terms and conditions related to quantities and prices set forth therein. Under this contract, LDK Solar agreed to purchase furnaces used in the manufacturing of multicrystalline and monocrystalline ingots for installation in its manufacturing facilities in Xinyu City, China. On Dec. 25, 2012, CIETAC stated that by virtue of the arbitration proceedings LDK will pay to JYT an amount of approximately RMB 294 million as well as approximately an additional amount of RMB 3.4 million to cover arbitral fees accrued as a result of this proceeding. "With regret, we were unable to take delivery of the ordered furnaces as scheduled from JYT primarily due to slower than expected industry growth and the widely available capacity of other peers," stated Xingxue Tong, President and CEO of LDK Solar. "LDK Solar is committed to innovation, quality and customer service. We have sufficient manufacturing capacity to support our valued customers and we will continue working with our vendors and customers, so that together we can overcome the challenges facing our industry," concluded Mr. Tong. About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi-Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. KPMG in Hong Kong, China, said in a May 15, 2012, audit report, there is substantial doubt on the ability of LDK Solar Co., Ltd., to continue as a going concern. According to KPMG, LDK Solar has a net working capital deficit and is restricted to incur additional debt as it has not met a financial covenant ratio under a long-term debt agreement as of Dec. 31, 2011. These conditions raise substantial doubt about the Group's ability to continue as a going concern. LDK Solar's balance sheet at Sept. 30, 2012, showed US$5.76 billion in total assets, US$5.41 billion in total liabilities, US$299.02 million in redeemable non-controlling interests and US$45.91 million in total equity. LEGENDS GAMING: Chickasaw Tribe Has Buyer's Remorse --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Legends Gaming LLC has an unhappy buyer who may try to back out of purchasing the business and financing approval of a Chapter 11 reorganization plan at a Feb. 6 confirmation hearing. According to the report, the bankruptcy court in Shreveport, Louisiana, approved disclosure materials in late November, allowing creditors to vote in anticipation of the confirmation hearing. The gaming properties in Bossier City, Louisiana, and Vicksburg, Mississippi, were to be sold under the plan for $125 million to an affiliate of the Chickasaw Nation. The report discloses that there were no bids submitted in competition with the offer from the tribe, which owns 17 casinos already. Legends' bankruptcy is the company's second since 2008. The Chickasaw tribe filed papers in bankruptcy court last month asking the judge to revoke approval of disclosure materials describing the plan. The tribe contends the disclosure statement was misleading because Legends didn't disclose how cash flow virtually disappeared in the last quarter of 2012. The bankruptcy judge allowed both Legends and the tribe to send supplemental papers to creditors. The confirmation hearing remains set for Feb. 6. The tribe, the report discloses, says in its papers that the "dramatic fall in financial performance makes the purchase agreement impossible to close and makes the plan unconfirmable." The tribe says the casinos will be "insolvent on day one or shortly thereafter" and soon will default on new credit agreements. Legends is sending papers of its own to creditors denying the tribe's allegations. The casinos say the tribe is acting in bad faith and attempting to renegotiate the purchase agreement. Assuming the purchase goes through, the federally recognized Chickasaw tribe will pay the purchase price with $64.5 million in new first-lien debt and $36 million in second-lien debt. The remainder will be cash. The price is less than the $181.2 million owed to first-lien creditors who support the sale. The plan is designed for a 67% recovery for the first-lien lenders, according to the disclosure statement. The second-lien lenders, owed $116.3 million, are to receive nothing. The deficiency claims of the first-lien lenders, along with the second-lien lenders' claims, are part of the class of unsecured creditors whose claims are projected to total $177 million, according to the disclosure statement. If unsecured creditors vote in favor of the plan as a class, they will carve up $40,000, for a recovery amounting to a fraction of 1%. To comply with state gaming regulations, the transfer of ownership must be accomplished through a sale of the casinos' stock. Consequently, approval of the sale will occur in conjunction with confirmation of a Chapter 11 reorganization plan. About Legends Gaming Legends Gaming LLC, owns gaming facilities located in Bossier City, Louisiana, and Vicksburg, Mississippi, operating under the DiamondJack's trade name. Legends Gaming LLC, and five related entities, including Louisiana Riverboat Gaming Partnership, filed Chapter 11 petitions (Bankr. W.D. La. Case No. 12-12013) in Shreveport, Indiana, on July 31, 2012, to sell the business for $125 million to Global Gaming Solutions LLC, absent higher and better offers. Legends Gaming acquired the business from Isle of Capri Casinos Inc., in 2006 for $240 million. After breaching covenant with lenders, the Debtors in March 2008 sought Chapter 11 protection, jointly administered under Louisiana Gaming Partnership (Case No. 08-10824). The Debtors emerged from bankruptcy in September 2009 and retained ownership and operation of two "DiamondJacks" hotels and casinos in Bossier City and Vicksburg. The Plan restructured $162.1 million owed to the first lien lenders and $75 million owed to secured lien lenders, which would be paid in full, with interest, over time. The Debtors' properties comprise 60,000 square feet of gaming space with 1,913 slot machines, 48 table games and 693 hotel rooms. Revenues in fiscal 2011 were $99.8 million in Louisiana and $39.7 million in Mississippi. As of July 31, 2012, first lien lenders are owed $181.2 million and second lien lenders are owed $114.7 million. Louisiana Riverboat Gaming Partnership disclosed $104,846,159 in assets and $298,298,911 in liabilities as of the Chapter 11 filing. Attorneys at Heller, Draper, Hayden Patrick & Horn serve as counsel to the Debtors. Sea Port Group Securities, LLC is the financial advisor. Kurtzman Carson Consultants LLC as is the claims and notice agent. The Debtors have tapped Jenner & Block LLP as special counsel. LEHMAN BROTHERS: Faith Claims Stick in Fidelity Coverage Row ------------------------------------------------------------ Juan Carlos Rodriguez of BankruptcyLaw360 reports that a California federal judge said Fidelity National Title Insurance Co. can't dodge bad faith claims in a $15 million coverage lawsuit over a sour real estate investment brought by a Lehman Brothers Holdings Inc. subsidiary even though it's providing a defense in underlying litigation. Lehman Commercial Paper Inc. is seeking coverage for another company's $15 million claim in a California real estate investment that went bust during the financial crisis, and Fidelity had argued Lehman's bad faith claims were barred, the report adds. 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) LOS ANGELES DODGERS: McCourt's Ex-Wife Can't Depose Blackstone -------------------------------------------------------------- Eric Hornbeck of BankruptcyLaw360 reported that former Los Angeles Dodgers owner Frank McCourt's ex-wife can't depose a Blackstone Group LP affiliate's executive, whom McCourt may allegedly have asked to help him lowball the formerly bankrupt team's value by $1.7 billion during his divorce, a New York state judge ruled Thursday. Judge Jeffrey K. Oing said during a hearing that McCourt's ex- wife, Jamie McCourt, must first try to get the answers she seeks from her husband, who has so far refused to answer, the report related. About Los Angeles Dodgers Los Angeles Dodgers LLC operates the Los Angeles Dodgers, a professional Major League Baseball club in the Los Angeles metropolitan area. Frank McCourt, a Boston real-estate developer who unsuccessfully bid for the Boston Red Sox, bought the Dodgers from Rupert Murdoch's Fox Entertainment Group Inc. in 2004 for $330 million. Mr. McCourt also bought the Dodgers Stadium from Fox for $100 million. Los Angeles Dodgers LLC filed for bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12010) on June 27, 2011, after MLB Commissioner Bud Selig rejected a television deal with News Corp.'s Fox Sports, leaving Mr. McCourt unable to make payroll for June 30 and July 1. Fox Sports has exclusive cable television rights for Dodgers games until the end of 2013 baseball season. Chapter 11 filings were also made for LA Real Estate LLC, an affiliated entity which owns Dodger Stadium, and three other related holding companies. According to Forbes, the Dodgers is worth about $800 million, making it the third most valuable baseball team after the New York Yankees and the Boston Red Sox. Judge Kevin Gross presides over the case. Lawyers at Young, Conaway, Stargatt & Taylor and Dewey & LeBoeuf LLP serve as the Debtors' bankruptcy counsel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Public relations specialist Kekst and Company has been hired for crisis support. Covington & Burling LLP serves as special counsel. An official committee of unsecured creditors has been appointed in the case. The panel has tapped Lazard Freres & Co. as financial adviser and investment banker, and Morrison & Foerster LLP and Pinckney, Harris & Weidinger, LLC as counsel. The LA Dodgers is the 12th sports team in North America to have sought bankruptcy protection. The reorganization is being financed with a $150 million unsecured loan from the Commissioner of Major League Baseball. The loan gives the Commissioner few of the controls lenders often demanded from bankrupt companies. The Dodgers emerged from bankruptcy on April 30, 2012. The plan is based on a $2.15 billion sale of the baseball club and Dodger Stadium to Guggenheim Baseball Management. The plan pays all creditors in full, with the excess going to Mr. McCourt. LOUISIANA HOUSING: S&P Raises Rating on 2009B Bonds to 'BB ---------------------------------------------------------- Standard & Poor's Ratings Services corrected its ratings on Louisiana Housing Finance Agency's (Global Ministries Fellowship) multifamily housing revenue bonds series 2009A and 2009B to 'BBB (sf)' and 'BB (sf)' from 'BB+ (sf)' and 'B+ (sf)', respectively. The outlook is stable. LOWER BUCKS: District Court Agrees BoNY Release Impermissible ------------------------------------------------------------- Judge Timothy Savage for the U.S. District Court for the Eastern District of Pennsylvania affirmed the Bankruptcy Court's refusal to approve, as part of a reorganization plan, a third party release provision that would have precluded bondholders of Lower Bucks Hospital from bringing any claims against the indenture trustee, The Bank of New York, Mellon Trust Company, NA. Lower Bucks Hospital in 1992 entered into a multi-party municipal bond financing transaction to refinance some of its outstanding debt obligations and to finance capital improvement projects. The Borough of Langhorne Manor Higher Education and Health Authority issued the bonds and loaned the bond proceeds to LBH. In the Loan and Security Agreement, LBH granted broad indemnification rights to the Authority which, in turn, assigned most of its rights to the original indenture trustee, Continental Bank. BNYM is the successor to Continental Bank. In the Loan and Security Agreement, which governs the relationship between LBH and the Authority, LBH agreed to indemnify the Authority against "any and all claims" arising out of the financing transaction. The scope of the indemnity is broad and requires LBH to assume and pay for the defense of any claim against the Authority. It excludes only claims for "malfeasance or nonfeasance in office, bad faith, gross negligence, wilful misconduct, fraud or deceit." In another section of the Loan and Security Agreement, LBH agreed to indemnify the Trustee, now BNYM as successor to Continental Bank, against "any liabilities" arising out of its powers and duties. Excluded are liabilities caused by the Trustee's "gross negligence, or wilful misconduct." The Trust Indenture, which defines the rights and obligations of the Authority and the Indenture Trustee, originally Continental Bank and later BNYM, limits the Trust Indenture's liability to the Bondholders to conduct that is willful or negligent. At the time the Hospital filed for Chapter 11 bankruptcy, it owed roughly $26 million to the Bondholders in outstanding principal, plus accrued interest. On April 30, 2010, LBH commenced an adversary proceeding against BNYM, contending that the security interest created by the Loan and Security Agreement was not perfected at the time of LBH's bankruptcy because BNYM and its predecessors had failed to file valid UCC-1 financing statements after LBH changed its name in 1997 and 2006. BNYM filed the financing statements properly identifying the debtor on Oct. 16, 2009, more than three years after the second name change. LBH contended that because BNYM perfected its security interest within 90 days of LBH's filing its Chapter 11 petition, any lien created by BNYM was avoidable under the Bankruptcy Code. Thus, if LBH prevailed in the adversary proceeding, the Bondholders would lose their secured creditor status under 11 U.S.C. Sec. 547(b). On Aug. 12, 2011, after more than a year of litigation, BNYM and LBH reached a settlement of the adversary proceeding. The settlement stipulation provided that in return for deeming the Bondholders secured creditors, the debt owing them would be reduced from $26 million to $8.15 million. As part of the settlement, LBH and BNYM gave mutual releases and agreed to dismiss the adversary proceeding as of the effective date of the reorganization plan. The settlement stipulation also contained a provision that purported to release BNYM from "any and all claims and causes of action arising under or in any manner related to the Bond Documents . . . by any and all parties, including without limitation all Bondholders . . . ." On Sept. 14, 2011, the Bankruptcy Court held a hearing to consider approval of the settlement. During the hearing, the Court specifically noted that it did not view the settlement as having any preclusive effect on suits by the Bondholders against BNYM for actions outside the Bankruptcy Court. Nonetheless, that day, the Court entered the parties' proposed order, including the provision releasing all claims against BNYM. Neither LBH nor BNYM brought to Bankruptcy Judge Eric Frank's attention the third party release provision and its significance at the Sept. 14, 2011 hearing. LBH's counsel did not mention the third party release. When Judge Frank voiced concerns about making findings concerning BNYM and its relationship to the Bondholders, LBH's counsel deferred to BNYM's attorney, who mentioned the third party release in passing. The attorneys did not advise Judge Frank that among the claims to be settled were the Bondholders' claims against BNYM. Only when Leonard Becker, who held $90,000 of the bonds, moved for reconsideration and objected to confirmation of the plan did Judge Frank become aware of the significance of the third party release. On Sept. 27, 2011, LBH filed a proposed plan of reorganization and a disclosure statement. The relevant third party release provision was embedded in both of these documents -- page 42 of the single-spaced 47 page proposed plan, and page 55 of the single-spaced 62 page disclosure statement. After Judge Frank approved the disclosure statement the next day, BNYM sent a notice to the Bondholders reporting that the disclosure statement had been approved by the Court. In October 2011, 95 bondholders holding roughly $13.5 million of the bonds at issue, voted on the proposed plan. Of those, 90 bondholders, holding less than half the value of all outstanding bonds at issue, voted to accept the plan. Five Bondholders, including Mr. Becker, who held $90,000 of the bonds, voted to reject it. On Oct. 14, 2011, Mr. Becker filed a class action in the U.S. States District Court for the Eastern District of Pennsylvania against BNYM and its predecessor, JP Morgan Trust Co., asserting claims for negligence, and breaches of fiduciary and contractual duties for failing to perfect a security interest in the collateral backing the bonds. On Nov. 10, 2011, in the Bankruptcy Court, Mr. Becker filed an objection to LBH's proposed plan on the ground that the third party release was "an impermissible, non- crucial, non-debtor third party release[ ]." He also asserted that the disclosure statement failed to clearly and conspicuously identify the third party release provision to the Bondholders, depriving them of a fair opportunity to object or vote against it. On Nov. 16, 2011, the Bankruptcy Court entered an order, sua sponte, severing the issue of whether the proposed plan should contain the third party release provision from the remainder of the proposed plan. Characterizing the order as a correction of a clerical error in its prior order dated Sept. 14, 2011, the Nov. 16 order specified that no portion of the Sept. 14 order should be considered as waiving or releasing any claims that the Bondholders may have against BNYM. On Dec. 7, 2011, the Bankruptcy Court confirmed the proposed plan without the third party release provision. On March 2, 2012, the Bankruptcy Court held a hearing to determine whether the third party release provision should be included in the confirmed plan. In a comprehensive opinion issued on May 10, 2012, Judge Frank concluded that the third party release could not be included because it had not been adequately disclosed or explained to the Bondholders. Judge Frank rejected BNYM's contention that the adequacy of the disclosures should not be revisited because that issue was resolved when the order approving the settlement was entered on Sept. 14, 2011. On appeal, BNYM challenges the Bankruptcy Court's finding that the notice to the Bondholders of the third party release was inadequate. It contends that notice was adequate because it was provided to the Bondholders numerous times. In addition to the disclosures made pursuant to the Bankruptcy Code, BNYM provided the Bondholders with eight notices of the developments in LBH's bankruptcy, including the adversary proceeding. Some of those notices attached the settlement stipulation and the summary of the terms, which included the third party release. BNYM also argues that the Bondholders consented to the third party release when they failed to object to the motion to confirm the settlement stipulation. Finally, BNYM contends that the third party release was an essential component of a global settlement that was both fair and equitable to the Bondholders, and necessary to the success of LBH's reorganization, satisfying the standards for approval of non-consensual third party releases in Chapter 11 reorganization plans. Mr. Becker urges affirmation of the Bankruptcy Court's findings. He contends that the third party release "cannot be valid unless it comports with the requirements of Federal Rule of Bankruptcy Procedure 3016(c)," which it does not. Alternatively, he argues that the Bankruptcy Court lacks subject matter jurisdiction to enter an order approving the third party release because it affects the legal relationship reorganization. The Bankruptcy Court entered an order on May 24, 2012 that "reaffirmed" the court's denial of confirmation of the section of the plan that included the third party release, and declared the order ""FINAL" between two non-debtors. According to Judge Savage, the Bankruptcy Court had "related to" subject matter jurisdiction to rule on the third party release provision. He noted that the Hospital has indemnification obligation which, in part, was triggered upon the filing of the class action against BNYM. Judge Savage further ruled that none of the nine notices predating the disclosure statement described the Bondholders' potential claims against BNYM or explained what claims by the Bondholders against BNYM would be released. Contrary to BNYM's argument, there was insufficient information from which the Bondholders could have concluded that they had a potential claim against BNYM. He ruled that the Bankruptcy Court correctly concluded that the Bondholders did not consent to the third party release through the settlement motion process. Judge Savage also pointed out that, pursuant to the settlement agreement, the Bondholders were to receive $8.15 million from LBH in exchange for a release of any claims against LBH. There is no indication that BNYM itself gave any consideration or compensation to the Bondholders. Therefore, it appears that BNYM included the settlement provision to shield itself from liability in connection with its obligation to the Bondholders in the adversary proceeding and for its prepetition conduct without having given any consideration. He said the Bankruptcy Court did not err in concluding that the third party release was an impermissible non- consensual release. The case before the District Court is, THE BANK OF NEW YORK, MELLON TRUST COMPANY, NA as Indenture Trustee, Appellant v., LEONARD BECKER, Appellee, Civil Action Nos. 12-3399, 12-3752 (E.D. Pa.). A copy of Judge Savage's Jan. 2, 2013 Memorandum Opinion is available at http://is.gd/UOLZKNfrom Leagle.com. About Lower Bucks Hospital Lower Bucks Hospital is a non-profit hospital based in Bristol, Pennsylvania. The Hospital is licensed to operate 183 beds. Together with affiliates Advanced Primary Care Physicians and Lower Bucks Health Enterprises, Inc., Lower Bucks owns a 36-acre campus with several medical facilities. The Hospital's emergency room serves 30,000 patients annually. For the fiscal year ending June 30, 2009, Lower Bucks had $114 million in consolidated revenues. The Hospital filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-10239) on Jan. 13, 2010. The Hospital's affiliates -- Lower Bucks Health Enterprises, Inc, and Advanced Primary Care Physicians -- also filed Chapter 11 petitions. Jeffrey C. Hampton, Esq., and Adam H. Isenberg, at Saul Ewing LLP, in Philadelphia, assist the Hospital in its restructuring effort. Donlin, Recano & Company, Inc., is the Hospital's claims and notice agent. The Debtors tapped Zelenkofske Axelrod LLC for tax preparation services. The Hospital estimated assets and liabilities at $50 million to $100 million. Regina Stango Kelbon, Esq., at Blank Rome LLP, in Philadelphia, represents the Official Committee of Unsecured Creditors as counsel. The Bankruptcy Court confirmed the hospital operator's Chapter 11 plan on Dec. 7, 2011. It emerged from bankruptcy in January 2012. MARKETING WORLDWIDE: Delays Form 10-K for Fiscal 2012 ----------------------------------------------------- Marketing Worldwide Corporation was not able to file its annual report on Form 10-K for the year ended Sept. 30, 2012, as the Company was awaiting information from outside third parties in order to complete the Form 10-K. About Marketing Worldwide Based in Howell, Michigan, Marketing Worldwide Corporation operates through the holding company structure and conducts its business operations through its wholly owned subsidiaries Colortek, Inc., and Marketing Worldwide, LLC. Marketing Worldwide, LLC, is a complete design, manufacturer and fulfillment business providing accessories for the customization of vehicles and delivers its products to large global automobile manufacturers and certain Vehicle Processing Centers primarily in North America. MWW operates in a 23,000 square foot leased building in Howell Michigan. Colortek, Inc., is a Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. MWW invested approximately $2 million into this paint facility and expects the majority of its future growth to come from this business. The Company reported a net loss of $2.27 million for the year ended Sept. 30, 2011, compared with a net loss of $2.34 million during the prior year. The Company's balance sheet at June 30, 2012, showed $1.14 million in total assets, $11.94 million in total liabilities and a $10.80 million total deficiency. After auditing the financial statements for the year ended Dec. 31, 2011, RBSM LLP, in New York, expressed substantial doubt about the Company's ability to continue as a going concern following the Company's 2011 financing results. The independent auditors noted that the Company has generated negative cash flows from operating activities, experienced recurring net operating losses, is in default of loan certain covenants, and is dependent on securing additional equity and debt financing to support its business efforts. MERIDIAN MORTGAGE: Commerce Bank Wins Dismissal of Trust Suit ------------------------------------------------------------- The Commerce Bank of Washington, N.A., won partial victory after Bankruptcy Judge Karen A. Overstreet in Seattle granted its request to dismiss a lawsuit commenced by Mark Calvert, as liquidating Trustee of Meridian Investors Trust, et al. The judge, however, gave the trustee leave to amend his complaint by March 25. Mr. Calvert sued Commerce Bank and Zions Bancorporation for their alleged roles in a massive Ponzi scheme perpetrated by Frederick Darren Berg. Mr. Berg is a debtor in his own individual bankruptcy proceeding, along with six other related entities. The Bankruptcy Court is presiding over 12 bankruptcy cases involving debtors that are/were investment funds and one affiliated entity formerly owned, managed or controlled by Mr. Berg. Those debtors have been substantively consolidated into one proceeding referred to as the "Meridian Bankruptcy." In June 2011, the Bankruptcy Court confirmed a Chapter 11 plan for the Meridian entities. The Plan provides for the creation of the Liquidating Trust for the Substantively Consolidated Meridian Funds, a/k/a/ The Meridian Investors Trust. Mr. Calvert is acting as the Liquidating Trustee of the Meridian Investors Trust, which holds all of the claims of the consolidated bankruptcy estates. The Trustee sued the two banks, on behalf various individuals who are alleged to have invested in 11 Meridian funds managed by Mr. Berg. The Complaint alleges that pursuant to the terms of the Plan, the Investors have assigned certain claims, including their claims against Commerce Bank, to the Trustee for the purpose of joint pursuit on their behalf. Alternatively, the Trustee contends that if the assignments are not treated as valid for these proceedings, the Investors are themselves separate, named plaintiffs. The complaint alleges two causes of action against Commerce Bank: that Commerce Bank, as the bank used by Mr. Berg and the Meridian Funds, aided and abetted Mr. Berg's breach of fiduciary duty to the Investors, and that Commerce Bank aided and abetted a fraud by Mr. Berg perpetrated on the Investors. Commerce Bank and Zions filed separate motions to dismiss. After Zions filed its motion, the plaintiffs docketed a notice of dismissal without prejudice as to all claims against Zions. Consequently, the Court proceeded only with Commerce Bank's motion. Commerce Bank raised a number of grounds for dismissal of the Complaint. Among others, Commerce Bank argued that the relationship between the Investors and Mr. Berg -- that of investor and manager of an investment company, respectively -- was not, as a matter of law, one that could create fiduciary duties owed by Mr. Berg directly to those individuals. Commerce Bank also argued that none of the accounts it maintained for Berg and his related entities was a trust account, and that instead, all such accounts were mere deposit accounts. According to Judge Overstreet, the Complaint fails to include sufficient allegations that the accounts from which funds were diverted for Mr. Berg's personal use were trust accounts and that the Trustee may not rely solely on a conclusory statement that the accounts were trust accounts. Instead, the Trustee must allege sufficient facts to support the contention that the accounts were intended to be trust accounts and that Commerce Bank had knowledge of that intent. Judge Overstreet also held that, in addition to sufficiently alleging the breach of fiduciary duty by Mr. Berg, the Complaint must sufficiently allege that Commerce Bank had knowledge of that breach and substantially assisted in the breach. The case is, MARK CALVERT, as liquidating Trustee of MERIDIAN INVESTORS TRUST, et al. Plaintiffs, v. ZIONS BANCORPORATION, a Utah ORDER ON COMMERCE BANK'S corporation; THE COMMERCE BANK OF MOTION TO DISMISS WASHINGTON, N.A., a federally chartered commercial bank, Defendants, Adv. Proc. No. 12-01767 (Bankr. W.D. Wash). A copy of the Court's Jan. 3, 2013 Order is available at http://is.gd/1mn5gffrom Leagle.com. About Meridian Mortgage and Frederick Darren Berg In November 2010, a federal grand jury in Seattle indicted Frederick Darren Berg on 12 counts of wire fraud, money laundering and bankruptcy fraud in connection with the demise of his Meridian Group of investment funds. Prosecutors believe Mr. Berg took in more than $280 million, with the losses attributed to the ponzi scheme estimated to be roughly $100 million. Hundreds of victims have lost money in the scheme between 2001 and 2010. Mr. Berg commenced a personal Chapter 11 case on July 27, 2010 (Bankr. W.D. Wash. Case No. 10-18668), estimating assets of more than $10 million and liabilities between $1 million and $10 million. The filing came after lawyers for one group of investors, armed with a court order and accompanied by sheriff's deputies, began seizing personal possessions at Mr. Berg's Mercer Island home and downtown Seattle condo. Diana K. Carey, trustee for Mr. Berg's estate, filed on Jan. 27, 2011, voluntary Chapter 11 petitions for Mortgage Investors Fund I LLC (Bankr. W.D. Wash. Case No. 11-10830) estimating assets of up to $50,000 and debts of up to $50 million and Meridian Mortgage Investors Fund III LLC (Case No. 11-10833), estimating up to $50,000 in assets and up to $100 million in liabilities. Michael J. Gearin, Esq., at K&L Gates LLP, in Seattle, served as counsel to the Debtors. Creditors filed an involuntary Chapter 11 petition for Meridian Mortgage Investors Fund II LLC (Bankr. W.D. Wash. Case No. 10-17976) on July 9, 2010. The petitioners were represented by Jane E. Pearson, Esq., at Foster Pepper PLLC, in Seattle. Creditors filed involuntary Chapter 11 petitions for Meridian Mortgage Investors Fund VIII, LLC (Bankr. W.D. Was. Case No. 10-17958) and Meridian Mortgage Investors Fund V, LLC (Bankr. W.D. Wash. Case No. 10-17952) on July 9, 2010. The petitioners were represented by John T. Mellen, Esq., at Keller Rohrback LLP, in Seattle, and Cynthia A. Kuno, Esq., at Hanson Baker Ludlow Drumheller PS, in Bellevue, represent the petitioners. On June 22, 2011, the Bankruptcy Court entered an order confirming a consensual Chapter 11 plan in the Meridian bankruptcy. The Plan provides for the creation of the Liquidating Trust for the Substantively Consolidated Meridian Funds, a/k/a/ The Meridian Investors Trust. Mr. Calvert was named Liquidating Trustee. In February 2012, Mr. Berg was sentenced to 18 years in prison after being convicted of defrauding investors. MERUS LABS: Recurring Losses Cue Going Concern Doubt ---------------------------------------------------- Deloitte & Touche LLP, in Toronto, Canada, expressed substantial doubt Merus Labs International Inc.'s ability to continue as a going concern in its report on the consolidated financial statements of the Company for the year ended Sept. 30, 2012. The independent auditors noted that the Company has suffered recurring losses from operations. Merus Labs International Inc. was formed on Dec. 19, 2011, by the amalgamation of Merus Labs International Inc. and Envoy Capital Group Inc. Results prior to Dec. 19, 2011, reflect the operations of the Company's former business as Envoy. The Company reported a net loss of C$20.7 million on C$10.4 million of revenues in fiscal 2012, compared with a net loss of C$7.6 million on C$nil revenue in fiscal 2011. The 2012 period included sales of Vancocin from Dec. 20, 2011, the first day after amalgamation, to Sept. 30, 2012. An impairment charge of $22,208,721 was recognized at Sept. 30, 2012, in relation to the Company's Vancocin and WoundCare products and associated goodwill. C$5,532,624 of the charge related to the Vancocin and WoundCare product intangible assets as discussed in the Product Summary section of the MD&A. In connection with the impairment of the Vancocin product rights, management also tested the Company's goodwill for impairment. The recoverable amount of the cash-generating unit ("CGU") to which goodwill had been allocated was assessed to be less than its carrying amount. Based on this analysis, the carrying amount of goodwill was reduced to its recoverable amount through recognition of an impairment charge of C$16,676,097 against the goodwill. The Company's balance sheet at Sept. 30, 2012, showed C$92.4 million in total liabilities, C$57.1 million in total liabilities, and stockholders' equity of C$35.3 million. A copy of the Form 20-F is available at http://is.gd/TqTXz1 A copy of the MD&A is available at http://is.gd/D5RMSA Toronto, Canada-based Merus Labs International Inc. is a specialty pharmaceutical company that acquires prescription medicines in the following categories: -- On patent but at maturity stage of product life cycle -- Branded generics -- Under promoted products -- Niche market pharmaceuticals -- Products with annual sales below critical threshold for large pharma On Dec. 19, 2011, the Company was formed through the amalgamation of Envoy Capital Group Inc. with Merus Labs International Inc. ("Old Merus"). On Oct. 1, 2012, Old Merus amalgamated with its wholly owned subsidiary, Merus Labs Inc. and continued under the name Merus Labs International Inc. METALDYNE LLC: Moody's Withdraws 'B1' CFR/PDR After Takeover ------------------------------------------------------------ Moody's Investors Service has withdrawn all ratings of Metaldyne, LLC (Old) including the company's B1 Corporate Family and Probability of Default Ratings, and B1 rating for the senior secured term loan. The withdrawal follows the acquisition of Metaldyne by American Securities LLC on December 18, 2012 and the repayment of old Metaldyne's previously rated debt. The ratings for the acquired operations of Metaldyne were assigned on November 16, 2012. The following ratings were withdrawn: B1, Corporate Family Rating; B1, Probability of Default Rating; B1 (LGD3, 46%), Senior Secured Term Loan The principal methodology used in rating Metaldyne was the Global Automotive Supplier Industry Methodology published in January 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. Metaldyne, LLC is a leading global manufacturer of highly engineered metal-based components for light vehicle engine, transmission and driveline applications for the global automotive light vehicle market. The company is a wholly-owned subsidiary of MD Investors Corporation which itself will be owned by affiliates of American Securities. Revenues for 2011 approximated $1 billion. MGM RESORT: Fitch Rates New $4-Bil. Credit Facility 'BB/RR1' ------------------------------------------------------------ Fitch Ratings assigns a 'BB/RR1' rating to MGM Resort International's new $4 billion credit facility. Fitch also affirms MGM's Issuer Default Rating (IDR) at 'B'. In addition, Fitch affirms all of MGM's related issuers and transactions. A full list of ratings follows at the end of this press release. The Rating Outlook is Positive. The credit facility is comprised of a $1.2 billion revolver, $1.05 billion term loan A and $1.75 billion term loan B. The revolver and term loan A will mature in December 2017 and pays LIBOR plus 3%. Term loan B matures in December 2019 and pays LIBOR (with 1% floor) plus 3.25%. Term loan B was issued with a discount of 99.5%. The 'BB/RR1' rating on the new credit facility reflects Fitch's calculation of 91% or better recovery prospects for the lenders in an event of default. The facility is secured by MGM's Bellagio, Mirage and MGM Grand (together Principal Properties), which secure up to $3.35 billion in claims. New York-New York in Las Vegas and Gold Strike in Tunica, MS were also provided as collateral for the facility. MGM Grand Detroit is a co-borrower and secures the facility up to $450 million. The Principal Properties and New York-New York were previously pledged to the secured notes that are being redeemed as part of MGM's global refinance transaction announced Dec. 6th, 2012. According to the company's Dec. 20th filing, MGM satisfied and discharged its obligations under the secured notes' indentures and all of the collateral securing these notes was released. Note that MGM's ability to grant liens is limited by a 15% Consolidated Net Tangible Assets carveout provision that is included in the senior unsecured notes' indentures. The new credit agreement has more lenient covenants than the prior agreements, allowing more flexibility in terms of restricted payments, additional borrowing and investments. Restricted payments are subject to a $100 million plus 50% of cumulative net income basket. Net income may include MGM China dividends to the extent MGM does not count these dividends for other baskets (i.e. investments, capex and debt prepayment). MGM's main financial covenant of minimum EBITDA was relaxed. New threshold for quarter ending March 31, 2013 is $1 billion relative to $1.25 billion in the prior agreement. The threshold steps up in increments of about $50 million until reaching $1.35 billion for the period ending March 31, 2016. The credit agreement's EBITDA definition is now clearer relative to prior agreements. The definition excludes EBITDA of MGM China and CityCenter but includes distributions from unconsolidated affiliates. Fitch estimates covenant EBITDA for period ending Sept. 30, 2012 at roughly $1.17 billion. Fitch upgraded MGM's IDR to 'B' from 'B-' following the Dec. 6th announcement of the company's refinancing plan. At the time of the upgrade Fitch indicated that it expects to rate the new credit facility 'BB/RR1' closer to the time of the facility being finalized with the 'BB/RR1' rating being predicated on the assumption that a majority of the collateral supporting the senior secured notes will be granted to the lenders. The upgrade of the IDR reflected the anticipated interest cost savings resulting from the transactions, which Fitch estimates at around $190 million annually. The upgrade also takes into account improved pro forma liquidity and slightly reduced gross leverage. The transaction addresses the largest maturities through 2014, with only $1.1 billion remaining through that timeframe. Pro forma available liquidity at the domestic restricted group is now considerable at roughly $1.5 billion ($1.2 billion revolver availability plus $300 million in excess cash assuming $400 million cage cash). The leverage reduction comes from the net use of $350 million in cash to reduce debt after accounting for redemption premiums and financing costs. Pro forma leverage using consolidated EBITDA minus income attributable to minority interests in Macau is expected to decline to 8.25x from 8.50x. What Could Trigger a Rating Action The Positive Outlook reflects good likelihood of Fitch upgrading MGM's IDR to 'B+' within a 12 - 24 month timeframe. This expectation takes into account MGM's expressed interest and perceived ability to strengthen its balance sheet and Fitch's favorable outlook for the Las Vegas Strip and Macau. The following drivers could lead to an upgrade of MGM's IDR to 'B+': -- Consolidated leverage adjusted for Macau minority interest moving towards 7x or lower; -- Domestic credit group generating discretionary FCF of at least $200 million; and/or -- MGM addressing its 2015 maturities. The following drivers could lead to a revision of the Outlook to Stable or Negative: -- Consolidated leverage adjusted for Macau minority interest migrating above 8.5x for an extended period of time; and/or -- Domestic group generating discretionary FCF remaining roughly breakeven. Fitch takes the following rating actions: MGM Resorts International -- IDR affirmed at 'B'; -- New senior secured credit facility rated 'BB/RR1'; -- Senior secured notes due 2013, 2014, 2017, and 2020 'BB/RR1' withdrawn; -- Prior partially secured senior credit facility 'B+/RR3' withdrawn; -- Senior unsecured notes affirmed at 'B/RR4'; -- Convertible senior notes due 2015 affirmed at 'B/RR4'; -- Senior subordinated notes affirmed at 'CCC+/RR6'. MGM China Holdings, Ltd and MGM Grand Paradise S. A. (co- borrowers) -- IDRs affirmed at 'BB-'/'RR2'; -- Senior secured credit facility affirmed at 'BB+'/'RR2' (includes $1.45 billion revolver and $550 million term loan). MONITOR CO: Seeks to Maintain Secrecy About Client List ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to the U.S. Trustee, Monitor Co. Group LP shouldn't be allowed to make a secret out of its client list. Monitor scheduled a Jan. 11 hearing in U.S. Bankruptcy Court in Delaware for authority to seal some answers to the formal schedules and statement of affairs all bankrupt companies are required to file. In addition to lists of assets and liabilities, the schedules include answers to questions about payments and transactions before bankruptcy that might give rise to lawsuits. The report recounts that Monitor originally wanted to delete names of its employees. According to the U.S. Trustee, the company changed its mind and will disclose identities of its workers and payments they received before bankruptcy. According to the report, the bankruptcy watchdog for the Justice Department said in a court filing last week that Monitor still intends on making a secret out of the identity of its clients and payments to clients before bankruptcy. The U.S. Trustee contends that public interest in bankruptcy proceedings and bankruptcy law itself requires disclosure. Monitor filed for bankruptcy to sell substantially all of their businesses and assets to Deloitte Consulting LLP, a Delaware registered limited liability partnership and DCSH Limited, a UK company limited by shares, subject to higher or otherwise better offers. The base purchase price set forth in the Stalking Horse Agreement is $116.2 million, plus (i) assumption of certain liabilities and (ii) certain cure costs for assumed contracts. The Stalking Horse Agreement provides for the Stalking Horse Bidder to receive a combined breakup fee and expense reimbursement of $4 million. Monitor scheduled an auction Jan. 9 to test Deloitte's offer. Competing bids are due Jan. 7. A hearing to approve the sale will take place Jan. 11. About Monitor Company Group Monitor Company Group LP -- http://www.monitor.com/-- is a global consulting firm with 1,200 personnel in offices across 17 countries worldwide. Founded in 1983 by six entrepreneurs, and headquartered in Cambridge, Massachusetts, Monitor advises for- profit, sovereign, and non-profit clients on growing their businesses and economies and furthering their charitable purposes. Monitor and several affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 12-13042 to 12-13062) on Nov. 7, 2012. Judge Hon. Christopher S. Sontchi presides over the case. Pepper Hamilton LLP and Ropes & Gray LLP serve as the Debtors' counsel. The financial advisor is Carl Marks Advisory Group LLC. Epiq Bankruptcy Solutions, LLC is the claims and noticing agent. The petitions were signed by Bansi Nagji, president. Bank of America is represented in the case by Jinsoo Kim, Esq., and Timothy Graulich, Esq., at Davis Polk & Wardwell LLP; and Mark D. Collins, Esq., at Richards Layton & Finger PA. J. Gregory Milmoe, Esq., and Shana A. Elberg, Esq., at Skadden Arps Slate Meagher & Flom LLP in New York; and Mark Chehi, Esq., and Christopher DiVirgilio, Esq., at Skadden Arps in Delaware, represent Deloitte Consulting LLP. Caltius Partners IV LP; Caltius Partners Executive IV, LP; and CP IV Pass-Through (Monitor) LP are represented by John Sieger, Esq., at Katten Muchin Rosenman LLP. Monitor's consolidated unaudited financial statements as of June 30, 2012, which include the assets and liabilities of non- Debtor foreign subsidiaries, reflected total assets of roughly $202 million (including $93 million in current assets) and total liabilities of roughly $200 million. MSR RESORT: Has Licensing Deal on Use of PGA Name ------------------------------------------------- Patrick Fitzgerald, writing for Dow Jones Newswires, reports that the owners of La Quinta Resort & Club PGA West, a group led by hedge-fund manager John Paulson's Paulson & Co., have inked a new deal with a Coachella Valley golf resort that was recently purchased out bankruptcy by the Singapore government, that will see the 2,000-acre property remain a PGA-branded resort through 2061. The pact allows the hedge fund to transfer the licensing agreement to the resort's new prospective owner: the real-estate investment arm of Singapore's sovereign wealth fund, which wants to buy the Paulson-owned resort and three others for $1.5 billion. The new deal gives the resort the exclusive right to use the PGA name within a 250 mile radius (excluding Nevada and Mexico) in return for an annual royalty payment. The report notes the the Singapore sovereign wealth fund is purchasing the La Quinta resort along with Maui's Grand Wailea Resort Hotel & Spa, the Arizona Biltmore in Phoenix and the Claremont in Berkeley, Calif. The deal also includes the Great White Course, a Greg Norman-designed golf course adjacent to the Doral Golf Resort & Spa in Miami. A company controlled by Donald Trump bought Doral from Paulson in 2012 for $150 million. According to Bloomberg News, the La Quinta property is home to professional golf tournaments, including what was once known as the Bob Hope Classic. In return for paying $175,000 owing to the PGA, the license for use of the PGA name will be extended until 2061. Bloomberg News discloses that approval of the agreement with the PGA will come up for approval at the confirmation hearing on Jan. 15 in U.S. Bankruptcy Court in New York, where the resorts also will seek approval of a Chapter 11 plan giving ownership to secured lender Government of Singapore Investment Corp. No one submitted an offer to compete at auction with the Singapore bid. The Singapore fund will acquire the four remaining resorts for $1.5 billion, including $1.12 billion in cash and $360 million in debt. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owned a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. In December 2012, Bankruptcy Judge Sean H. Lane signed off on MSR Resort's disclosure statement, clearing the resort owner to begin soliciting votes for its Chapter 11 plan following a recent agreement to sell off its five-resort portfolio for $1.5 billion. The Official Committee of Unsecured Creditors is represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. NEW ENGLAND COMPOUNDING: Mass. Gov. Wants Overhaul to Oversight --------------------------------------------------------------- Massachusetts Gov. Deval Patrick introduced legislation on Friday that would allow regulators to fine pharmacies and deliver other reforms in the wake of a deadly nationwide meningitis outbreak linked to the now-bankrupt New England Compounding Center, Greg Ryan of BankruptcyLaw360 reported. The NECC, which declared bankruptcy in December, is located in Framingham, Mass. The outbreak linked to the pharmacy has killed 39 people and sickened 656 in 19 states, though no illnesses have been reported in Massachusetts, according to the U.S. Centers for Disease Control and Prevention. NNN LENOX: Sec. 341 Meeting of Creditors Today ---------------------------------------------- The Office of the U.S. Trustee will hold today, Jan. 7, a meeting of creditors under 11 U.S.C. Sec. 341(a) in the bankruptcy case of NNN Lenox Park 9, LLC, at 1:30 p.m. EST, at Room 115 Federal Building, New Albany. Objections to dischargeability are due by March 8, 2013. New Albany, Indiana-based NNN Lenox Park 9, LLC, owns the Lenox Park Buildings A & B in Lenox Park Boulevard, Shelby County, in Memphis, Tennessee. It filed a Chapter 11 petition (Bankr. S.D. Ind. Case No. 12-92686) in New Albany, Indiana, on Dec. 4, 2012. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated at least $10 million in assets and liabilities. Judge Basil H. Lorch, III, presides over the case. Mubeen Aliniazee, president of Highpoint Management Solutions, LLC, has been named the restructuring officer. Jeffrey M. Hester, Esq., at Tucker Hester, LLC, in Indianapolis, serves, as counsel to the Debtor. NORTEL NETWORKS: Settles with Retirees Committee ------------------------------------------------ Nortel Networks filed with the U.S. Bankruptcy Court a motion for approval of a settlement agreement with its official committee of retired employees, BankruptcyData reported. Under the terms of the settlement, the Debtors would terminate the retiree welfare plans as of May 31, 2013 and pay the retiree committee $67 million in settlement of all claims related to the retiree welfare plans, the report added. The agreement further provides that holders of retiree claims would release the Debtors from further liability, the report noted. The Court scheduled a January 23, 2013 hearing on the matter. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation and its various affiliated entities provided next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel did business in more than 150 countries around the world. Nortel Networks Limited was the principal direct operating subsidiary of Nortel Networks Corporation. On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent Nortel Networks Corporation, NNI's direct corporate parent Nortel Networks Limited and certain of their Canadian affiliates commenced a proceeding with the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (Canada) seeking relief from their creditors. Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. That same day, the Monitor sought recognition of the CCAA Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No. 09- 10164) under Chapter 15 of the U.S. Bankruptcy Code. That same day, NNI and certain of its affiliated U.S. entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10138). In addition, the High Court of England and Wales placed 19 of NNI's European affiliates into administration under the control of individuals from Ernst & Young LLP. Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world. On May 28, 2009, at the request of administrators, the Commercial Court of Versailles, France, ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in U.S. Bankruptcy Court for recognition of the English Proceedings as foreign main proceedings under Chapter 15. U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors' general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The United States Trustee appointed an Official Committee of Unsecured Creditors in respect of the U.S. Debtors. An ad hoc group of bondholders also was organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. An Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Since the commencement of the various insolvency proceedings, Nortel has sold its business units and other assets to various purchasers. Nortel has collected roughly $9 billion for distribution to creditors. Of the total, $4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. OMEGA NAVIGATION: Junior Lenders Object to Settlement Deals ----------------------------------------------------------- Two junior secured creditors of Greek oil shipper Omega Navigation Enterprises Inc. objected to motions in Texas bankruptcy court to approve settlements with senior lenders and insiders, saying a proposal to give away three Omega investments companies to principal George Kassiotis is unfair, Linda Chiem of BankruptcyLaw360 reported. In their objection, NIBC Bank N.V. and BTMU Capital Corp. say they were unfairly shut out of any settlement negotiations and never relinquished their claim to $36 million in underlying debt in two settlement agreements Omega submitted to the bankruptcy court, the report added. About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston, Texas in the United States. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. HSH Nordbank AG, as the senior lenders' agent, has first liens on vessels to secure a US$242.7 million loan. The lenders include Bank of Scotland and Dresdner Bank AG. The ships are encumbered with US$36.2 million in second mortgages with NIBC Bank NV as agent. Before bankruptcy, Omega sued the senior bank lenders in Greece contending they violated an agreement to grant a three year extension on a loan that otherwise matured in April 2011. An affiliate of Omega that manages the vessels didn't file, nor did affiliates with partial ownership interests in other vessels. Judge Karen K. Brown presides over the case. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor and investment banker. The Official Committee of Unsecured Creditors has tapped Winston & Strawn as local counsel; Jager Smith as lead counsel; and First International as financial advisor. PEMBERLY PARTNERS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Pemberly Partners, Ltd. 4108 W. 15th Street, Suite 100 Plano, TX 75093 Bankruptcy Case No.: 12-43529 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Joyce W. Lindauer, Esq. 8140 Walnut Hill Lane, 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 George E. Joseph, general partner. PINNACLE AIRLINES: Asks Judge to OK $52M Deals With Pilots, Delta ----------------------------------------------------------------- Pinnacle Airlines Corp. sought a New York bankruptcy judge's permission to increase its available financing by $52 million under new agreements with its lender, Delta Air Lines Inc., that it says is crucial to its eventual exit from Chapter 11 bankruptcy, Maria Chutchian of BankruptcyLaw360 reports. In a motion before the U.S. Bankruptcy Court for the Southern District of New York, the Memphis, Tenn.-based regional carrier said if the court does not authorize the additional funds, its liquidity will become insufficient by next month. 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. As of Oct. 31, 2012, the Company had total assets of $800.33 million, total liabilities of $912.77 million and total stockholders' deficit of $112.44 million. 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 AIRLINES: Has Delta-Backed Bankruptcy Exit Plan -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pinnacle Airlines Corp. will emerge from Chapter 11 bankruptcy as a wholly owned subsidiary of Delta Air Lines Inc. under a reorganization plan supported by the official unsecured creditors' committee and the pilots' union. After completing reorganization, Pinnacle will continue as a feeder airline for Atlanta-based Delta, operating 81 regional jets with 76 seats. Currently, Pinnacle is operating about 190 regional jets for Delta, mostly the 50-seat variety. Delta is already providing Pinnacle with $74.3 million in financing to continue operating while in Chapter 11. According to the report, to prevent Pinnacle from running out of cash in February, Delta is increasing the secured loan by $30 million. Delta is now Pinnacle's only customer. The report adds that Delta will loan an additional $22 million, with $20 million paid to Pinnacle pilots on emergence from Chapter 11. The payments to each pilot are on sliding scale depending on years of service. The longevity payments are an integral part of a new contract negotiated by the union and being voted on by the pilots. Pinnacle currently flies 41 of the larger regional jets for Delta, which will deliver 40 more to Pinnacle between the fall of 2013 and the end of 2014. Pilots who lose their jobs from a reduction in the size of the fleet will receive severance and other benefits financed with the $22 million loan. A feature of the new contract requires Delta to interview Pinnacle pilots for jobs at the parent airline. The new agreements require Pinnacle to emerge from Chapter 11 by May 15. Delta will set aside $2.25 million for payment of unsecured creditors' claims. Although it will have an approved unsecured claim for $95.4 million, Delta won't receive any payments from the unsecured creditors' pool. In return for contract concessions, the pilots and flight attendants will have approved unsecured claims. The pilots' claim is $138.5 million. Pinnacle agreed not to sue creditors for preferences, or payments within 90 days of bankruptcy. Delta will acquire the new Pinnacle stock in exchange for some of the debt financing the Chapter 11 effort. Some of the existing loan will survive emergence from bankruptcy. Pinnacle said the new pilots' contract will save $30 million a year, largely from a 9% wage reduction. Pilots will have wage increases from 2015 through 2019. In November, the bankruptcy judge in New York turned down Pinnacle's motion to modify the existing pilots' contract. At the time, the judge described provisions in the proposed contract that needed to change before receiving court approval. The agreement to support the plan will come to court for approval at a Jan. 16 hearing. At the hearing, Pinnacle will also ask the judge to extend its exclusive plan-filing deadline by three months to April 25. 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. As of Oct. 31, 2012, the Company had total assets of $800.33 million, total liabilities of $912.77 million and total stockholders' deficit of $112.44 million. 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. PMI GROUP: Note Sale Approval Sought ------------------------------------ PMI Group filed with the U.S. Bankruptcy Court a motion for an order approving the sale, conveyance and transfer of the Impact Tranche E Note, a 2003 promissory note issued by Impact Community Capital in the amount of $674,613, free and clear to PMI Mortgage Insurance Company for a total price of $412,728, BankruptcyData reported. The Court scheduled a January 23, 2013 hearing on the matter. About The PMI Group The PMI Group, Inc., is an insurance holding company whose stock had, until Oct. 21, 2011, been publicly-traded on the New York Stock Exchange. Through its principal regulated subsidiary, PMI Mortgage Insurance Co., and its affiliated companies, the Debtor provides residential mortgage insurance in the United States. The PMI Group filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 11-13730) on Nov. 23, 2011. In its schedules, the Debtor disclosed $167,963,354 in assets and $770,362,195 in liabilities. Stephen Smith signed the petition as chairman, chief executive officer, president and chief operating officer. The Debtor said in the filing that it does not have the financial resources to pay the outstanding principal amount of the 4.50% Convertible Senior Notes, 6.000% Senior Notes and the 6.625% Senior Notes if those amounts were to become due and payable. The Debtor is represented by James L. Patton, Esq., Pauline K. Morgan, Esq., Kara Hammond Coyle, Esq., and Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP. The Official Committee of Unsecured Creditors appointed in the case retained Morrison & Foerster LLP and Womble Carlyle Sandridge & Rice, LLP, as bankruptcy co-counsel. Peter J. Solomon Company serves as the Committee's financial advisor. QUAMTEL INC: Peter Sperling Appointed to Board of Directors ----------------------------------------------------------- Quamtel Inc.'s Board of Directors voted to appoint Peter Sperling to the Board of Directors. Mr. Sperling was appointed to fill the vacancy, left by the departure of Mr. Leo Hinkley, who is leaving the Board effective immediately, due to personal time constraint issues. Mr. Sperling will serve until the next annual meeting of shareholders of the Company or until his successor is duly elected and qualified. Mr. Sperling has an Associates Degree in Network Administration and is a Microsoft Certified Professional Director of Information Technologist. His past employment services include Director of Information Technology Services for a Boca Raton based Real Estate company. He is employed at DataJack, Inc., as a key part of the management team in charge of fulfillment services, procurement and Business Development. About Quamtel Inc. Dallas, Texas-based Quamtel, Inc., is a communications company offering, through its subsidiaries, a comprehensive range of mobile broadband and communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. The Company's common stock trades on the OTC Bulletin Board (OTC BB) under the symbol "QUMI." In its report on the 2011 financial statements, RBSM LLP, in New York, New York, expressed substantial doubt about Quamtel's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses in the current year and also in the past. The Company reported a net loss of $4.49 million on $1.93 million of revenues for 2011, compared with a net loss of $10.05 million on $2.18 million of revenues for 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.16 million in total assets, $2.93 million in total liabilities and a $771,149 total shareholders' deficiency. QUANTUM FUEL: May Sell Up to $5MM in Shares to Ascendiant --------------------------------------------------------- Quantum Fuel Systems Technologies Worldwide, Inc., entered into an At The Market Offering Agreement with Ascendiant Capital Markets, LLC. Pursuant to the Sales Agreement, the Company may, from time to time, offer and sell shares of its common stock having an aggregate offering price of up to $5,000,000 through the Sales Agent. Sales of Shares, if any, under the program will depend on market conditions and other factors to be determined by the Company, and will be made in "at the market offerings" as defined in Rule 415 of the Securities Act of 1933, as amended, including sales made directly on the NASDAQ Capital Market, on any other existing trading market for the Shares or to or through a market maker. The Shares sold in the offering will be issued pursuant to the Company's effective shelf registration statement on Form S-3 (Registration No. 333-176772) previously filed with the Securities and Exchange Commission, in accordance with the provisions of the Securities Act, as supplemented by a prospectus supplement dated Dec. 28, 2012, which the Company filed with the SEC pursuant to Rule 424(b)(5) under the Securities Act. The Sales Agent is not required to sell any specific number or dollar amount of Shares but will use its commercially reasonable efforts, as the Company's agent and subject to the terms of the Sales Agreement, to sell the Shares offered, as instructed by the Company. The Sales Agreement provides that the Company will pay the Sales Agent a fee of 3.0% of the gross sales price of any Shares sold through the Sales Agent. The Sales Agreement contains customary representations, warranties and agreements of the Company and the Sales Agent and customary conditions to completing future sale transactions, indemnification rights and obligations of the parties and termination provisions. The Company intends to use the net proceeds from any sales of Shares in the offering for general corporate purposes. The Company's management will have significant flexibility in applying the net proceeds of this offering. A copy of the Sales Agreement is available for free at: http://is.gd/XJTyaR About Quantum Fuel Lake Forest, Calif.-based Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced vehicle propulsion systems, fuel storage technologies, and alternative fuel vehicles. Quantum's portfolio of technologies includes electronic and software controls, hybrid electric drive systems, natural gas and hydrogen storage and metering systems and other alternative fuel technologies and solutions that enable fuel efficient, low emission, natural gas, hybrid, plug-in hybrid electric and fuel cell vehicles. As reported in the TCR on March 30, 2012, Haskell & White LLP, in Irvine, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that Company incurred significant operating losses and used a significant amount of cash in operations during the eight months ended Dec. 31, 2011. The Company's balance sheet at Sept. 30, 2012, showed $65.6 million in total assets, $45.8 million, and stockholders' equity of $19.8 million. According to the Company's quarterly report for the period ended Sept. 30, 2012, the Company expects that its existing sources of liquidity will only be sufficient to fund its activities through Dec. 31, 2012. "In order for us to have sufficient capital to execute our business plan, fund our operations and meet our debt obligations over this twelve month period, we will need to raise additional capital and/or monetize certain assets. We are considering various cost-effective capital raising options and alternatives including the sale of Schneider Power and/or other assets, and the sale of equity and debt securities. Although we have been successful in the past in raising capital, we cannot provide any assurance that we will be successful in doing so in the future to the extent necessary to be able to fund all of our growth initiatives, operating activities and obligations through Sept. 30, 2013, which raises substantial doubt about our ability to continue as a going concern." RESIDENTIAL CAPITAL: To Sell $130 Million in FHA-Backed Loans ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Residential Capital LLC is selling $130 million in nonperforming home mortgages guaranteed by the Federal Housing Administration. The mortgages are among the $1 billion in FHA and U.S. Veterans Affairs-guaranteed loans remaining after the loan- servicing business and the primary loan portfolio were sold for a combined $4.5 billion. According to the report, because the loans are government- guaranteed, ResCap eventually would recover in full even if they weren't sold, the subsidiary of non-bankrupt Ally Financial Inc. said in a Jan. 2 filing in U.S. Bankruptcy Court in Delaware. ResCap said it's nonetheless in creditors' best interest to sell the loans, given the cost of maintaining infrastructure to service them. There will be a Jan. 16 hearing for approval of sale procedures tailored to the peculiarities of a mortgage portfolio. The report notes that about 15 to 20 potential buyers will be given information about the portfolio. Bids will be due Feb. 6. ResCap will select the best bid and give the buyer thorough information to refine the bid, with a sale price pegged to each mortgage. ResCap will knock any mortgages out of the sale where the price doesn't seem sufficient. The report also notes that the atypical sale procedures are designed to avoid having all the potential buyers expend large sums on detailed financial evaluations of each mortgage. ResCap's $2.1 billion in third-lien 9.625% secured notes due in 2015 traded Jan. 3 for 105.875 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $473.4 million of ResCap senior unsecured notes due in April 2013 last traded on Jan. 2 for 24 cents on the dollar, a 33% increase in price since trades on Dec. 28, according to Trace. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. 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). RICH LEARNING: Shareholder Did Not Violate Cash Collateral Accord ----------------------------------------------------------------- Bankruptcy Judge Thomas L. Saladino cleared Dianna L. Rich from allegations she violated a stipulation governing the use of cash collateral by Rich Learning Centers, Inc., a franchisee of Sylvan Learning, Inc. Ms. Rich was the president and sole shareholder of Rich Learning. Sylvan sued Ms. Rich, alleging she violated the terms of the stipulation, and the order approving the stipulation, by paying herself gross wages of more than $6,000 per month. Ms. Rich denies that she paid herself more than $6,000 per month, and interprets the stipulation as allowing a "net" (rather than a gross) payment to her of no more than $6,000. Ms. Rich guaranteed the obligations of Rich Learning to Sylvan. Rich Learning filed for Chapter 11 bankruptcy Code (Bankr. D. Neb. Case No. 10-80177) on Jan. 22, 2010, which case was later converted to a Chapter 7 proceeding. During the course of that case, Rich Learning and its primary lender, Mutual of Omaha Bank, entered into a stipulation for use of cash collateral. Rich Learning filed a motion for approval of the stipulation, no resistance was filed, and the motion was granted. The stipulation for use of cash collateral allowed Rich Learning to use cash collateral for the purpose of operating expenses provided that the expenditures do not exceed those set forth in an attached budget. It also provided "that any distributions or wages paid to the owner of the Debtor, Dianna L. Rich, not exceed $6,000 per month. . . ." Ms. Rich is also a debtor in her own Chapter 7 bankruptcy case (Bankr. D. Neb. Case No. 10-83701). According to Judge Saladino, the "order" at issue is a stipulation that was an agreement between Rich Learning and Mutual of Omaha Bank regarding the use of the bank's cash collateral. Section 363(c)(2) authorizes a debtor in possession to use cash collateral in the ordinary course of business only if each entity having an interest in the cash collateral consents or the court authorizes its use. Therefore, because the bank consented by the terms of the stipulation, court approval of the stipulation was not even necessary in order for Rich Learning to use the bank's cash collateral. Further, the court did not "order" anybody to do anything when it approved the stipulation. Even if the facts would show that Ms. Rich received more money than the stipulation allowed, the result would be a violation of the stipulation -- not a violation of a court order. The order simply approved the agreement of the parties and was not the type of order that seems to be contemplated by 11 U.S.C. Sec. 727(a)(6). Section 727(a)(6)(A) of the Bankruptcy Code provides a debtor's discharge can be revoked if the debtor refuses to obey a lawful order of the bankruptcy court. Section 727(a)(7) provides that a debtor's discharge can be revoked if the debtor commits any of the acts specified in Sec. 727(a)(6) in connection with another bankruptcy case concerning an insider. The case is, SYLVAN LEARNING, INC., Plaintiff, v. DIANNA L. RICH, Defendant, No. A11-8073-TLS (Bankr. D. Neb.). A copy of the Court's Jan. 3, 2013 Order is available at http://is.gd/kBgkQh from Leagle.com. SAFETY-KLEEN: S&P Raises Corporate Credit Rating to 'BB+' --------------------------------------------------------- Standard & Poor's Ratings Services said that it raised its corporate credit rating on Plano, Texas-based oil recycler Safety- Kleen Systems Inc. to 'BB+' from 'B+' and removed it from CreditWatch positive following Norwell, Mass.-based Clean Harbors Inc.'s (BB+/Stable/--) acquisition of the company for $1.25 billion. "We had placed our ratings on Safety-Kleen on CreditWatch with positive implications on Nov. 1, 2012, after Clean Harbors announced its plan to acquire the company. We subsequently withdrew this rating, as well as the senior secured rating on Safety-Kleen, as the company has repaid all of its debt outstanding)," S&P said. SEA ISLAND: Claims Objection Deadline Extension Doesn't Alter Plan ------------------------------------------------------------------ District Judge B. Avant Edenfield ruled that the bankruptcy court's order extending the deadline for the Liquidation Trustee of Sea Island Company to file claim objections does not constitute a modification of the Debtor's restructuring plan in violation of 11 U.S.C. Sec. 1127(b). Dennie McCrary, a former vice president of finance and, later, president of the Debtor, and the largest unsecured creditor, with almost $30 million in claims, objected to the Liquidation Trustee's request for an extension of the claims objection deadline. He lodged the appeal after the Bankruptcy Court overruled his objection. Mr. McCrary argued that the extension modified the Plan's treatment of Class 4 claims. The Debtor's confirmed Plan places Mr. McCrary's claim in Class 4. Under the Plan, each Holder of an Allowed Class 4 Accepting Unsecured Claim is to receive its Pro Rata share of the so-called Accepting Unsecured Creditor's Fund, which is funded by the Debtor's senior secured lenders to provide a guaranteed return to unsecured creditors who voted to accept the Plan, "on or as soon as practicable after the later of (i) the Effective Date, (ii) the date that such Accepting Unsecured Claim becomes Allowed, and (iii) a date agreed to by the Liquidation Trustee and the Holder of such Class 4 Accepting Unsecured Claim." The AUCF originally totaled $6.3 million. The case before the District Court is, DENNIE McCRARY, Appellant, v. ROBERT BARNETT, as the Liquidation Trustee Under the Sea Island Liquidation Trust, Appellee, No. 2:12-cv-129 (S.D. Ga.). A copy of the District Court's Jan. 2, 2013 Order is available at http://is.gd/3g9ANUfrom Leagle.com. About The Sea Island Company St. Simons Island, Georgia-based Sea Island Company -- http://www.seaisland.com/-- aka Sea Island Shooting School, Sea Island Yacht Club, Sea Island Stables, and Cabin Bluff, is a private resort and real estate development company founded in 1926. The Sea Island Company owned and operated Sea Island Resorts, featuring two of the world's most exceptional destinations: the Forbes Five-Star Cloister at Sea Island and The Lodge at Sea Island. The Sea Island Company filed for Chapter 11 protection on Aug. 10, 2010 (Bankr. S.D. Ga. Case No. 10-21034). The Debtor estimated its assets and debts at $500 million to $1 billion as of the Petition Date. Affiliates Sea Island Coastal Properties, LLC; Sea Island Services, Inc.; Sea Island Resort Residences, LLC; Sea Island Apparel, LLC; First Sea Island, LLC; and Sical, LLC, filed separate Chapter 11 petitions also on Aug. 10, 2010. Sarah R. Borders, Esq., Harris Winsberg, Esq., Sarah L. Taub, Esq., and Jeffrey R. Dutson, Esq., at King & Spalding LLP, assisted the Debtor in its restructuring effort. Robert M. Cunningham, Esq., at Gilbert, Harrell, Sumerford & Martin PC, served as the Debtor's co-counsel. FTI Consulting, Inc., acted as the Debtor's restructuring advisor. EPIQ Bankruptcy Solutions, LLC, acted as the Debtor's claims and notice agent. Donald F. Walton, the U.S. Trustee for Region 21, appointed seven members to the official committee of unsecured creditors in the case. The committee has retained Jordi Guso, Esq., at Berger Singerman, P.A. as its counsel. On Sept. 24, 2010, Debtor filed its Amended Chapter 11 Plan of Reorganization, and on Nov. 8, 2010, the Bankruptcy Court entered an order confirming the Plan. The Chapter 11 plan was based on an agreement to sell substantially all of the Debtor's assets to Sea Island Acquisition LP, a limited partnership formed by investment funds managed by the global investment firms Oaktree Capital Management, L.P., and Avenue Capital Group. The Debtor's remaining assets were transferred to a newly created trust where the Liquidation Trustee was to liquidate the property and distribute the proceeds to the Trust beneficiaries. Robert Barnett was named liquidating trustee. SECUREALERT INC: Delays Form 10-K for Fiscal 2012 ------------------------------------------------- SecureAlert, Inc., notified the U.S. Securities and Exchange Commission that it would delay the filing of its annual report on Form 10-K for the fiscal year ended Sept. 30, 2012. The Company was unable to complete adjustments to the financial statements and narrative portions of the Form 10-K that resulted from events occurring immediately before the filing deadline. 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. SHETTERLY L.P.: Case Summary & 15 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Shetterly, L.P. 3330 N. Beach Street Fort Worth, TX 76111 Bankruptcy Case No.: 12-38135 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Susan B. Hersh, Esq. SUSAN B. HERSH, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Tel: (972) 503-7070 E-mail: susan@susanbhershpc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's 15 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/txnb12-38135.pdf The petition was signed by Mark A. Shetterly, president of Shetterly Enterprises, Inc., general partner. SIAG AERISYN: Pa. Court Transfers Siskin Lawsuit to E.D. Tenn. -------------------------------------------------------------- Judge Kim R. Gibson of the District Court for the Western District of Pennsylvania ruled that the federal district court has jurisdiction to hear the lawsuit commenced by Siskin Steel & Supply Company, Inc., against Highland North, LLC. Judge Gibson said the lawsuit is "related to" the Chapter 11 bankruptcy of SIAG Aerisyn, LLC, a subcontractor for a wind farm project undertaken by Highland North. In his ruling on Jan. 3, Judge Gibson denied Siskin's request for the Court to remand the lawsuit to state court. Judge Gibson, instead, granted Highland North's request to transfer venue of the lawsuit to the U.S. Bankruptcy Court for the Eastern District of Tennessee where SIAG's Chapter 11 case is pending. Highland North, the owner of a leasehold interest in Adams Township, Cambria County, Pennsylvania, chose to construct the Highland North Wind Farm in 2010. Highland North retained Nordex USA, Inc., as primary contractor to supply the wind turbines for the Project. Nordex then subcontracted a portion of its work to SIAG. SIAG then entered into purchase order contracts with Siskin, whereby Siskin supplied steel plates used in the fabrication of wind turbines. SIAG, however, failed to pay Siskin a portion of the contract price for the supply of steel plates. Siskin alleges that the amount owed to it is $983,046. To collect this amount, Siskin filed a lawsuit on June 6, 2011, in Hamilton County Chancery Court in Tennessee, alleging breach of contract among other claims. On Oct. 28, 2011, Siskin initiated a mechanic's lien claim in the Court of Common Pleas of Cambria County, Pennsylvania, against Highland North (Case No. 2011-4320). Siskin identified Highland North as the Owner subject to the lien, which was based on an unpaid balance by the subcontractor SIAG of the above stated amount. SIAG appeared on Nov. 30, 2011 in the lien claim case by filing a "Petition for Court's Determination of the Amount of Security Necessary to Discharge Lien Claim," to satisfy the lien. Nordex "appeared on behalf of Highland North (pursuant to a contractual obligation) . . . and presented a Letter of Credit to the Court in response to Siskin's Lien claim." The Court of Common Pleas entered an order on Dec. 21, 2011, accepting Nordex's letter of credit as security for the lien, discharged the lien, and denied SIAG's earlier petition as moot. Thus, any determination in favor of Siskin on the basis of the mechanic's lien claim would be drawn from Nordex's letter of credit posted in the case. To collect on the lien, Siskin next filed a "Complaint to Obtain Judgment on a Mechanic's Lien Claim," on Jan. 30, 2012, in the Court of Common Pleas of Cambria County, Pennsylvania. The complaint re-alleged the contractual basis for its dispute with SIAG and the Owner-Contractor-Subcontractor relationship necessary for collection on a mechanic's lien under Pennsylvania law. On March 21, 2012, Highland North attempted to join SIAG as a third party defendant to the mechanic's lien complaint, "arguing that SIAG should be held solely liable for the monies alleged to be due and owing to Siskin." Highland North filed a joinder action against SIAG alleging it is the entity solely liable to Siskin because "the Owner [Highland North] is entitled to reimbursement from Siag due to Siag's failure to issue payment to Plaintiff" Siskin objected to Highland North's action, arguing that it is "[i]n violation of Rule 1657 of the Pennsylvania Rules of Civil Procedure, which prohibits joinder of an additional cause of action in a mechanic's lien action." Hearing on the joinder dispute before the Cambria County Court of Common Pleas was set for July 20, 2012. Before the hearing could take place, however, Highland North filed a Notice of Removal in District Court and then submitted its Motion to Transfer Venue to the Eastern District of Tennessee. During this same period, SIAG initiated a bankruptcy proceeding when it filed a Chapter 11 voluntary petition with the U.S. Bankruptcy Court for the Eastern District of Tennessee on April 2, 2012. Due to this proceeding, the Tennessee lawsuit between Siskin and SIAG was stayed on Aug. 21, 2012. In its bankruptcy petition, SIAG listed Siskin as having a disputed unsecured claim amount of $998,658. Neither Highland North nor Nordex was included on SIAG's list of creditors, despite Nordex having provided a Letter of Credit as security for the Pennsylvania lawsuit in the event judgment was entered in Siskin's favor on the mechanic's lien claim. SIAG filed its Bankruptcy Schedules A through H with Siskin again appearing on "Schedule F - Creditors Holding Unsecured Nonpriority Claims," for the amount of $996,658.5, which was against identified as "disputed." Siskin filed a proof of claim for $997,658.56 on May 17, 2012, along with accompanying documentation of itemized statements of running accounts allegedly evidencing the unpaid portions of SIAG's account. Nordex filed a proof of claim for $983,046 on July 30, 2012 -- the claims bar date -- and listed it as unliquidated in both secured and unsecured amounts. To support its claim, Nordex submitted a copy of the "Purchase Contract" between Nordex and SIAG that was signed and entered into force on Dec. 1, 2010; and the "First Amendment" to the "Purchase Contract" that went into effect on April 1, 2011. It also submitted a copy of a settlement agreement signed on Feb. 3, 2012 by Nordex and SIAG Schaaf Industrie AG (SIAG's parent company), through which SIAG "assumed and was assigned . . . the obligation to keep the Property [i.e., Wind Farm Property] free and clear of liens." Nordex also filed an objection to Siskin's proof of claim, seeking to disallow the claim. The Bankruptcy Court has scheduled a hearing on this matter for Jan. 10, 2013. To date, there has been no confirmation of a reorganization plan in SIAG's bankruptcy proceeding, and thus remains in the pre-confirmation stage. The case is, SISKIN STEEL & SUPPLY COMPANY, INC., Plaintiff, v. HIGHLAND NORTH, LLC, Defendant, Civil Action No. 3:12-CV-105 (W.D. Pa.). A copy of Judge Gibson's Jan. 2, 2013 Memorandum and Order is available at http://is.gd/J8xUWffrom Leagle.com. About SIAG Aerisyn SIAG Aerisyn LLC, aka Aerisyn LLC, filed a Chapter 11 petition (Bankr. E.D. Tenn. Case No. 12-11705) on April 2, 2012 in its hometown in Chattanooga, Tennessee. The Debtor manufactures wind towers essential for wind turbines as alternative energy sources. The plant is located in Chattanooga, employing roughly 84 persons. Judge Shelley D. Rucker presides over the case. Samples, Jennings, Ray & Clem, PLLC, serves as the Debtor's Chapter 11 counsel. Wormser, Kiely, Galef & Jacobs, LLP, serves as special counsel. Jerome Luggen of Cincinnati Industrial Auctioneers, Inc., was tapped as appraiser of the Debtor's equipment. The Debtor estimated up to $50 million in assets and debts. In its schedules, the Debtor disclosed $18,728,994 in total assets and $24,261,855 in total liabilities. SIONIX CORPORATION: Incurs $5.8-Mil. Net Loss in Fiscal 2012 ------------------------------------------------------------ Sionix Corporation filed on Dec. 31, 2012, its annual report on Form 10-K for the fiscal year ended Sept. 30, 2012. Kabani & Company, Inc., in Los Angeles, California, expressed substantial doubt about Sionix Corporation's ability to continue s a going concern. The independent auditors noted that the Company has incurred cumulative losses of $37,560,000, and in addition, the Company had negative cash flow from operations for the year ended Sept. 30, 2012, of $2,568,382." The Company reported a net loss of $5.8 million in fiscal 2012, compared with a net loss of $6.3 million in fiscal 2011. The Companty did not report any revenues this year or last year. During the fiscal year ended Sept. 30, 2012, the Company recorded a loss on settlement of debt of $489,140 compared to $1.7 million for the prior year. The Company's balance sheet at Sept. 30, 2012, showed $2.9 million in total assets, $4.0 million in total liabilities, and a stockholders' deficiency of $1.1 million. A copy of the Form 10-K is available at http://is.gd/pU8iE3 Los Angeles, Calif.-based Sionix Corporation designs, develops, markets and sells cost-effective water management and treatment solutions intended for use in the oil and gas, agriculture, industrial, disaster relief, and municipal (both potable and wastewater) markets. SMOOT GROUP: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: The Smoot Group, LLC 14 West Peachtree Place, NW Atlanta, GA 30308 Bankruptcy Case No.: 12-81969 Chapter 11 Petition Date: December 31, 2012 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Prince A. Brumfield, Esq. 4288-A Memorial Drive Decatur, GA 30032-1212 Tel: (404) 296-5758 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 Marcus Smoot. STINSON PETROLEUM: Former VP Liable for $2.7MM Damages to Bank -------------------------------------------------------------- District Judge Keith Starrett in Mississippi, Hattiesburg Division, ruled that Sam William Stinson is personally liable for $2,789,775 of damages to Gulf Coast Bank and Trust Company, caused by his actions as vice president of Stinson Petroleum Company. In 2005, Stinson Petroleum entered into the first of multiple "Receivables Purchase Agreements" with Gulf Coast Bank, pursuant to which Stinson Petroleum would assign all of its accounts receivable to the bank in exchange for the advancement of funds up to 85% of the value of the accounts receivable, but no more than an upper limit of $7,000,000. Stinson Petroleum was required to collect on the accounts and remit the funds to Gulf Coast Bank to repay the loans. Stinson Petroleum also represented in the RPA that the accounts assigned to Gulf Coast Bank were "bona fide existing obligations created by the sale and delivery of goods or the rendition of services in the ordinary course of Stinson Petroleum's business," and that they were "unconditionally owed and will be paid to [Gulf Coast Bank] without defense, disputes, offsets, counterclaims, or rights of return or cancellation." During the term of each RPA, Stinson Petroleum -- through Mr. Stinson, its Vice President -- sent Gulf Coast Bank a monthly statement of the accounts receivable assigned to the bank. The statements reported the current account balance for each Stinson Petroleum customer and certain payment history information. These statements determined the amount of credit available to Stinson Petroleum. When Stinson Petroleum filed for Chapter 11 bankruptcy in 2009, the Bankruptcy Court appointed a neutral third party analyst to review Stinson Petroleum's financial information and identify payments made to Gulf Coast Bank by Stinson Petroleum from pre- petition receivables collected after the petition had been filed. On Aug. 20 and 31, 2009, Mr. Stinson presented the analyst, Gary Aldridge, with accounts receivable reports, representing that they were Stinson Petroleum's then-current accounts receivable. Mr. Aldridge's analysis of the accounts revealed that the monthly statements sent to Gulf Coast Bank had higher accounts receivable balances than the monthly statements Mr. Stinson provided him pursuant to the Bankruptcy Court's order. On Dec. 16, 2009, the Bankruptcy Court converted Stinson Petroleum's Chapter 11 case into a Chapter 7 liquidation. Stinson Petroleum then provided the Trustee with copies of its monthly accounts receivable reports for the year prior to the filing of their petition. The reports -- like the ones provided to Mr. Aldridge -- revealed lower accounts receivable balances than the monthly statements that had been provided to Gulf Coast Bank pursuant to the RPA. Over a six-month period, from January 2009 to June 2009, Stinson Petroleum had overstated its new accounts receivable by $27,343,521. As a result of these misrepresentations, Gulf Coast Bank advanced $5,617,759 to Stinson Petroleum that it would not have advanced if the monthly statements were accurate. The final monthly statement submitted to Gulf Coast Bank on July 27, 2009, included a representation that Stinson Petroleum's accounts receivable totaled $7,746,472. Based on this figure, the total funds available were represented to be $5,937,687 -- approximately 76.65% of the total reported accounts receivable. The actual accounts receivable was $4,106,864. Assuming the same proportion of available funds, the overstatement of accounts receivable in the final monthly statement resulted in an advancement of $2,789,775.00 under the RPA that would not have been advanced if the monthly statement were accurate. On Nov. 30, 2009, Gulf Coast Bank filed a proof of claim in the bankruptcy proceeding, reflecting an outstanding balance of $4,283,815 under the RPA. The bank also sued, asserting claims of fraud and negligent misrepresentation against Mr. Stinson. The bank requests actual damages in the amount of $2,789,775. The case is, GULF COAST BANK AND TRUST COMPANY Plaintiff, v. SAM WILLIAM STINSON, Defendant, Civil Action No. 2:11-CV-88-KS-MTP (S.D. Miss.). A copy of the District Court's Jan. 2, 2013 Memorandum Opinion and Order is available at http://is.gd/fj21KM from Leagle.com. About Stinson Petroleum Laurel, Mississippi-based Stinson Petroleum Company, Inc., which sold gasoline to convenience stores and other businesses, filed for Chapter 11 (Bankr. S.D. Miss. Case No. 09-51663) on Aug. 4, 2009. Harris Jernigan & Geno, PPLC, represented the Debtor in its restructuring efforts. In its petition, the Debtor estimated assets and debts both ranging from $10 million to $50 million. A committee of unsecured creditors was appointed by the United States Trustee for Region 5 in the Debtor's case. On Dec. 16, 2009, the Debtor's chapter 11 case was converted to a Chapter 7 case, and Derek A. Henderson was appointed as Chapter 7 Trustee. TC GLOBAL: Grey's Anatomy Actor's Investment Group Wins Auction --------------------------------------------------------------- TC Global, Inc. (dba Tully's) on Jan. 4 disclosed that it is a step closer to exiting from bankruptcy with the sale of its assets to Global Baristas, the investment group that includes Grey's Anatomy star Patrick Dempsey. Global Baristas was selected as the winning bidder late last night, with a bid of almost $10 million. Tully's filed for protection under Chapter 11 of the U.S. Bankruptcy Code on October 10 of 2012, closing nineteen unprofitable locations while relocating almost all of those employees affected by closures to other stores. Since the filing and store closures, same store sales have increased and profitability has improved. "We are very encouraged and excited that Patrick Dempsey's commitment to Tully's, to the company, the stores and perhaps most importantly, in keeping the members of Tully's family in place as they are today," stated Scott Pearson, CEO and President of TC Global, Inc. "This is a big win for Seattle." The hearing where it is expected that the sale will be finalized takes place on January 11 in Seattle. Tully's Coffee currently operates 47 company-owned stores in Washington and California and continues its partnerships with franchisees and grocery chains throughout the Western United States and Asia. The sale of TC Global Inc. does not impact the wholesale and online Tully's Coffee business and brand, which were purchased by Green Mountain Coffee Roasters, Inc. (GMCR) in 2009. For more information regarding the Chapter 11 filing, please visit http://www.omnimgt.com/TullysCoffeeor call (866) 989-3039. Seven Bidders KOMO News' Komonews.com reports that "Global Baristas", the investment team headlined by Grey's Anatomy actor, Patrick Dempsey, emerged the winner at an auction for the Tully's Coffee chain. Komonews says Global Baristas was among seven groups that expressed interest in Tully's. The report relates all the groups spent Thursday giving presentations to a bankruptcy judge, and late Thursday night Mr. Dempsey announced via Twitter that his group had prevailed. Mr. Dempsey tweeted, "We met the green monster, looked her in the eye, and . . . SHE BLINKED! We got it! Thank you Seattle!" Komonews relates sources leaving Thursday's meeting said it was one of the most controversial auctions they've been to and expect there to be an appeal. According to The Associated Press, the bidders included Seattle- based Starbucks Corp., and Baristas Coffee, which operates a chain of drive-thru espresso stands featuring female employees in skimpy outfits. The AP says a representative for Starbucks declined to provide details of the company's bid, citing the court's confidentiality orders. According to the AP, the Seattle Times has reported that Starbucks only wants to buy about half of Tully's chains. The AP notes the auction process was not public. Katy Stech, writing for Dow Jones' Daily Bankruptcy Review, called Baristas the "Hooters of the coffee world." The DBR report says coffee at the Baristas chain's 11 locations throughout five states are served up by youngish, busty and barely clothes co-eds. According to DBR, Baristas Chief Executive Barry Henthorn said he has rounded up money from longtime Tully's shareholders who are a mix of characters from professional athletes from the NFL and NBA to savvy investors whose buy-in helped grow the Tully's brand to 47 locations along the West Coast. If the group wins at auction, Henthorn said the Tully's existing baristas could keep their clothes on but that the brand might get a makeover towards modern. According to DBR, Tully's CEO Scott Pearson announced the first $4.3 million bid from a private equity firm at the beginning of its bankruptcy case. The report says the Baristas group values its offer at $10.4 million, though parts of the deal don't appear to comply with the Bankruptcy Code. Specifically, the proposal would pay some money to shareholders while shorting creditors who are supposed to be paid in full first. Tully's has 47 company-run locations in Washington and California, as well as 58 licensed stores around the nation. The Troubled Company Reporter on Dec. 12, 2012, reported that Baristas Coffee Company filed an offer to purchase all of the assets of TC Global, Inc., doing business as Tully's. A new company "Baristas Acquisition Partners, Inc." was formed to complete an offer. Lisa Jennings, writing for Nation's Restaurant News, said Baristas indicated it was a $10.4 million bid. Tully's signed Jonah Retail Holdings LLC, an affiliate of Kachi Partners, to a $4.3 million contract for the 47 continuing locations. The Kachi's offer included $1.25 million cash and the assumption of liability for $1 million in gift cards and $1.63 million to cure defaults on contracts. The deal includes a $200,000 "break up" fee if a higher bidder emerges. 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, and is represented by attorneys at Bush Strout & Kornfeld LLP, in Seattle. TC Global 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 said it would close nine stores following bankruptcy. Bloomberg reported that Tully's sold the wholesale and distribution business in 2009, generating $40 million that allowed a $5.9 million distribution to shareholders. TELECONNECT INC: Incurs $3.8 Million Net Loss in Fiscal 2012 ------------------------------------------------------------ Teleconnect Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $3.87 million on $143,910 of sales for the year ended Sept. 30, 2012, compared with a net loss of $3.26 million on $112,722 of sales during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $6.42 million in total assets, $11.49 million in total liabilities, all current, and a $5.06 million total stockholders' deficit. Coulter & Justus, P.C., in Knoxville, Tennessee, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency in addition to a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/fhaUMb About Teleconnect Inc. Based in Breda, in The Netherlands, Teleconnect Inc. (OTC BB: TLCO) Teleconnect Inc. (initially named Technology Systems International Inc.) was incorporated under the laws of the State of Florida on November 23, 1998. Serving as a telecommunications service provider in Spain for almost 9 years, the Company never fully reached expectations and decided late in 2008 to change its course of business. In November 2009, 90% of the Company's telecommunication business was sold to a Spanish group of investors, and on October 15, 2010, the Company completed the acquisition of Hollandsche Exploitatie Maatschappij BV (HEM), a Dutch entity established in 2007. HEM's core business involves the age validation of consumers when purchasing products which cannot be sold to minors, such as alcohol or tobacco. The Company regards this age validation business as its new strategic direction. The Dutch companies acquired in 2007 (Giga Matrix, The Netherlands, 49% and Photowizz, The Netherlands, 100%) are considered to function complementary to this new service offering. Through the purchase of HEM and its ownership in Photowizz and Giga Matrix the Company now controls all four pillars under its business model: the manufacturing and leasing of electronic age validation equipment, the performance of age validation transactions remotely, the performance of market surveys and the broadcasting of in-store commercial messages using the age validation equipment in between age checks. TELIGENT INC: Judge Vacates Judgment Uncollected for 7 Years ------------------------------------------------------------ Bankruptcy Judge Stuart M. Bernstein vacated a default judgment that Savage & Associates, P.C., as the Unsecured Claim Estate Representative for and on behalf of Teligent, Inc., et al., obtained nearly eight years ago against 1737 North First Street Corporation. 1737 Corp. moved to vacate the default judgment and dismiss the adversary proceeding, contending that the service of process was insufficient. The Court agreed and dismissed the adversary proceeding as to 1737 Corp. On May 12, 2003, Savage commenced a preference action against 1737 Corp. and 17 other defendants to recover transfers made within 90 days of the petition date. The Complaint indicated that 1737 Corp. received transfers aggregating $30,558 from Teligent. Most of the defendants, including 1737 Corp., did not respond to Savage's request for mediation or comply with the Court's ensuing mediation order. On April 18, 2005, the Court entered a default judgment against 1737 Corp. in the sum of $30,588. The Court also entered default judgments against 13 other defendants. Seven years passed without any apparent effort to collect the Judgment. Then, on June 27, 2012, Savage wrote to 1737 Corp. at "1737 North First St. Corps, 1737 N. 1st St., San Jose, CA 95112." The letter enclosed the Judgment and demanded that 1737 Corp. remit payment in its amount, $30,558 plus interest, within 10 business days. The defendant initially responded by letter dated July 16 and on Sept. 7 filed the Motion to Vacate. The motion seeks to vacate the Judgment and dismiss the Complaint as against 1737 Corp., contending that Savage failed to serve 1737 Corp., and failed, therefore, to acquire personal jurisdiction over it. The case is, SAVAGE & ASSOCIATES, P.C., as the Unsecured Claim Estate Representative for and on behalf of TELIGENT, INC., et al., Plaintiff, v. 1201 OWNER CORP., et al., Defendants, Adv. Proc. No. 03-03187 (Bankr. S.D.N.Y.). A copy of the Court's Jan. 3 Memorandum Decision and Order is available at http://is.gd/Up29vb from Leagle.com. Walter E. Swearingen, Esq. -- wswearingen@llf-law.com -- at Levi, Lubarsky & Feigenbaum, LLP, represents 1737 North First Street Corp. About Teligent Inc. Teligent, Inc. was engaged in the telecommunications business, operating antennas on space leased from property owners. Teligent and certain of its affiliates filed chapter 11 petitions (Bankr. S.D.N.Y. Case No. 01-12974) on May 21, 2001. Lawyers at Kirkland & Ellis represented the Debtors in their restructuring effort. When the Company filed for protection from its creditors, it disclosed $1,209,476,000 in assets and $1,649,403,000 debts. Teligent confirmed a liquidating plan on Sept. 5, 2002, and in accordance with the plan, the Official Committee of Unsecured Creditors selected Savage & Associates, P.C., as the Unsecured Claim Estate Representative to, among other things, pursue avoidance actions on behalf of the unsecured creditor constituency. THQ INC: Court Rejects DIP Loan, Slows Down Sale Process -------------------------------------------------------- Bloomberg News' Michael Bathon reports that Delaware Bankruptcy Judge Mary F. Walrath at a hearing on Jan. 4 denied the request of THQ Inc. to obtain approval of a loan to help fund operations and hold a quick bankruptcy sale. The report relates Judge Walrath sided with creditors that said the proposed sale process didn't give potential buyers enough time. Judge Walrath found THQ's efforts to market the company for sale before bankruptcy weren't sufficient for her to allow the aggressive sale process. "I have problems concluding that the pre-petition sale process was fulsome," Judge Walrath told lawyers at the hearing, noting THQ "did not even put out to the public that it was for sale" until potential buyers signed non-disclosure agreements. According to Bloomberg, Judge Walrath noted that about 10 potential buyers contacted THQ after finding out about the sale from its bankruptcy filing, evidence the marketing "isn't an adequate substitute for a sales process in bankruptcy." "I am not convinced that we are under the gun to have a sale process by the 15th," Judge Walrath told lawyers, according to the Bloomberg report. She scheduled a hearing for Jan. 7, telling lawyers, "in the meantime I think the parties need to talk." Bloomberg also relates Jeffrey C. Krause, a THQ attorney, said after the hearing that Judge Walrath wants the lawyers to negotiate over the weekend and the company will have to consult with Clearlake, which is providing part of the bankruptcy loan, to determine how they will proceed. THQ filed for bankruptcy with a deal to sell substantially all its assets to Clearlake Capital Group LP in a deal valued at about $60 million. THQ proposes to set the bidding deadline by Jan. 8, an auction Jan. 9, and a sale approval hearing Jan. 10. Creditors want the sale process extended by about three weeks. Objections Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that THQ Inc. is facing opposition in bankruptcy court from an ad hoc group of unsecured noteholders and from the U.S. Trustee. Both propose selling the business on a more deliberate schedule. According to the report, THQ wants the judge in Delaware to put the business up for auction on Jan. 9. The noteholders filed papers last week arguing that the proposed bidding procedures "appear to have been designed specifically to thwart potential bidders from stepping forward." On top of an "unjustifiably accelerated sale timeline," the noteholders contend bidders should be permitted to submit offers for specific games rather than the entire portfolio. The U.S. Trustee, the bankruptcy watchdog for the Justice Department, argues that some of the proposed bidding rules would "chill bidding." The U.S. Trustee also calculates the buyer's breakup fee and expense reimbursement as being twice as large as judges in Delaware ordinarily would approve. The noteholders also oppose final approval of $10 million in financing, saying it would solidify "onerous deadlines." THQ has Clearlake Capital Group LP under contract to buy the business for about $60 million. The price includes paying off financing for the Chapter 11 effort estimated to be $29 million, plus $6.65 million in cash. The price also includes the assumption of about $15 million in debt and a $10 million seven- year note bearing 2% interest. THQ's unsecured notes traded Jan. 3 for 13 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About THQ THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- is a worldwide developer and publisher of interactive entertainment software. The Company develops its products for all popular game systems, personal computers, wireless devices and the Internet. Headquartered in Los Angeles County, California, THQ sells product through its network of offices located throughout North America and Europe. THQ Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13398) on Dec. 19, 2012. THQ has a deal to sell its video-game development business to Clearlake Capital Group LP for about $60 million, absent higher and better offers at an auction proposed for January 2013. Clearlake and existing lender Wells Fargo Capital Finance LLC are providing $10 million of DIP financing. Attorneys at Young Conaway Stargatt & Taylor, LLP and Gibson, Dunn & Crutcher LLP serve as counsel to the Debtors. FTI Consulting and Centerview Partners LLC are the financial advisors. Kurtzman Carson Consultants is the claims and notice agent. TIGER MEDIA: Raises $2.1-Mil. From Exercise of Warrants ------------------------------------------------------- Tiger Media, Inc., formerly known as SearchMedia Holdings Limited, unveiled the results of the offer to exercise warrants at a reduced exercise price, which the Company provided to its holders of Public Warrants, Insider Warrants, and Underwriter Warrants. The opportunity to exercise up to one-third of a holder's outstanding Warrants at a reduced exercise price expired at 5:00 p.m. Eastern Time on Dec. 26, 2012. The Company raised a total of $2.1 million from proceeds received as a result of the exercise of Warrants to purchase 1,709,749 of the Company's ordinary shares. In addition, pursuant to the terms of the offer, at the expiration date of the Warrants, which is Feb. 19, 2013, 3,219,596 Warrants held by participating holders, representing two times the number of Warrants exercised by those holders, will have their expiration date extended until Dec. 26, 2013, and the exercise price of such Warrants will be reduced to $2.50, with respect to the Public and Insider Warrants. Furthermore, an additional 186,000 warrants were submitted via Notice of Guaranteed Delivery. There were no Underwriter Warrants exercised. Warrants not exercised or extended will expire on Feb. 19, 2013. About Tiger Media Tiger Media, Inc., formerly known as SearchMedia Holdings Limited, is a nationwide multi-platform media company and one of the largest operators of integrated outdoor billboard and in-elevator advertising networks in China. SearchMedia operates a network of high-impact billboards and one of China's largest networks of in- elevator advertisement panels in 50 cities throughout China. Additionally, SearchMedia operates a network of large-format light boxes in concourses of eleven major subway lines in Shanghai. SearchMedia's core outdoor billboard and in-elevator platforms are complemented by its subway advertising platform, which together enable it to provide a multi-platform, "one-stop shop" services for its local, national and international advertising clients. Marcum Bernstein & Pinchuk LLP, in New York, issued a "going concern" qualification on the company's consolidated financials statements for the year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses and has a working capital deficiency of roughly $31,000,000 at Dec. 31, 2011, which raises substantial doubt about its ability to continue as a going concern. Searchmedia Holdings reported a net loss of $13.45 million in 2011, a net loss of $46.63 million in 2010, and a net loss of $22.64 million in 2009. The Company's balance sheet at June 30, 2012, showed US$39.18 million in total assets, US$41.22 million in total liabilities and a US$2.04 million total shareholders' deficit. TXU CORP: Bank Debt Trades at 33% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 66.82 cents-on-the-dollar during the week ended Friday, Jan. 4, 2013, a drop of 0.29 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2017, and carries Moody's Caa1 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 192 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. The Company's balance sheet at Dec. 31, 2011, showed $44.07 billion in total assets, $51.83 billion in total liabilities, and a $7.75 billion total deficit. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. * * * In late January 2012, Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. TXU CORP: Bank Debt Trades at 24% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 76.25 cents-on-the-dollar during the week ended Friday, Jan. 4, 2013, an increase of 1.47 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2014, and carries Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 192 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. The Company's balance sheet at Dec. 31, 2011, showed $44.07 billion in total assets, $51.83 billion in total liabilities, and a $7.75 billion total deficit. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. * * * In late January 2012, Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. UNIVERSAL BIOENERGY: May Sell Up to 3-Billion of Shares ------------------------------------------------------- Universal BioEnergy, Inc., filed with the Nevada Secretary of State a Certificate of Amendment to the Company's Articles of Incorporation on Dec. 26, 2012, to increase the number of authorized shares of the Corporation's common stock from 1,000,000,000 to a total of 3,000,000,000 shares. The amendment also provides that the total number of shares of "Preferred Stock" that the Corporation is authorized to issue is 10,000,000 shares with a par value of $0.001 per share. The Amendment was approved by a unanimous written consent of all the directors of the Company. The purpose of increasing the number of shares of common stock is to use them for business and financial purposes, including raising capital, for mergers and acquisitions, acquiring products or services in exchange for stock, attracting and retaining employees, increasing the Company's shareholder base, and being able to respond rapidly to opportunities that arise in the marketplace. The potential targets profile will primarily include companies with well established marketing and distribution channels, a defensible competitive position and strong growth opportunities. Some companies being targeted are, oil producers, oil drilling companies, refined oil product producers, natural gas producers, gas marketers, pipeline companies, pipeline construction companies, gas storage facilities, propane producers, high wall surface coal mines, refined oil product producers, and the acquisition of energy technology patents and licenses. The Company is also looking at acquiring producing petroleum and gas wells, assets/properties and related energy companies. The management does not intend to actually issue all of the authorized shares to the public, as they will primarily remain within the corporate treasury until needed. "Some shareholders may view this action as a potential for dilution and a devaluation of their shares, however we believe there are many valuable benefits to its shareholders," the Company said in a Form 8-K filed with the Securities and Exchange Commission. The management believes that the shareholders would likely receive greater potential financial rewards by means of increased revenues, earnings, a significant increase in the price of the stock, greater market value of the Company, increased assets and more liquidity. A copy of the Amended Articles of Incorporation is available at: http://is.gd/n0DtOY About Universal Bioenergy Headquartered in Irvine, California, Universal Bioenergy Inc. develops markets alternative and natural energy products including, natural gas, solar, biofuels, wind, wave, tidal, and green technology products. After auditing the 2011 results, Bongiovanni & Associates, CPA'S, in Cornelius, North Carolina, noted that the Company has suffered recurring operating losses, has an accumulated deficit, has negative working capital, and has yet to generate an internal cash flow that raises substantial doubt about its ability to continue as a going concern. The Company reported a net loss of $2.11 million in 2011, compared with a net loss of $2 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $7.37 million in total assets, $9.12 million in total liabilities, and a $1.74 million total stockholders' deficit. UPPER CRUST: Court Rejects Buyout Offer From Lawyer, Ex-Employees ----------------------------------------------------------------- Jenn Abelson, writing for The Boston Globe, reports that Judge Henry J. Boroff on Thursday declined to accept a bid by a lawyer representing former Upper Crust workers to buy four of the company's pizzerias and block their sale to a private equity firm with ties to the bankrupt chain's ousted founder. Judge Boroff said the offer was too late since the auction of Upper Crust's assets took place Dec. 19. The Globe relates Shannon Liss-Riordan, Esq., submitted a purchase plan late Wednesday on behalf of ex-employees who accuse Upper Crust of seizing their wages. According to the report, the offer includes a proposal to pay $855,000 for leases at the South End, Watertown, Wellesley, and Lexington locations; and is $200,000 more than the proposed sale price of the four restaurants to UC Acquisition, an affiliate of investment firm Ditmars Ltd., which plans to work with Upper Crust founder Jordan Tobins. The report says the proposal called for employees to have an ownership stake in the pizza shops; and included a $510,000 loan from Elizabeth Grady chief executive John P. Walsh; $50,000 of Ms. Liss-Riordan's own money; and $295,000 from bidders who were unsuccessful in their attempt to purchase the South End site's lease at last month's auction. Ms. Liss-Riordan and another partner who bought the lease for the Harvard Square site plan to give employees ownership shares at that restaurant, which will operate under a different name. The report says Ms. Liss-Riordan objected to the sale, arguing it would violate the terms of an injunction pending against Mr. Tobins that prohibited him from transferring assets. A hearing on that injunction was scheduled for Friday before Suffolk Superior Court Judge Bonnie H. MacLeod. Mr. Tobins, who was placed on leave last year after fellow Upper Crust owners accused him of misusing company funds, is not putting any money toward the UC Acquisition deals, an attorney for Mr. Tobins previously told the Globe. The report says a lawyer for UC Acquisition Thursday declined to comment on the court's denial of the alternate sale proposal. Upper Crust Pizza LLC, the operator of upscale pizza restaurants in Massachusetts, filed a Chapter 11 petition (Bankr. D. Mass. Case No. 12-18134) on Oct. 4, 2012, in Boston. John C. Elstad, Esq., at Murphy & King, P.C., in Boston, serves as counsel. The Debtor estimated under $10 million in both assets and liabilities. VS FOX: U.S. Trustee, Creditors Want Case Converted to Ch. 7 ------------------------------------------------------------ The U.S. Trustee has asked the U.S. Bankruptcy Court for the District of Utah to dismiss or convert to Chapter 7 the bankruptcy case of VS Fox Ridge, LLC, and equity owners Stephen LaMar Christensen and Victoria Ann Christensen. On Dec. 6, 2012, creditors Mountain Home Development Corp., JK Fox Ridge, LLC, ST Fox Ridge, LLC, Ted Heap, Kinnon Sandlin, Triumph Commercial Investments, LLC, Fox Ridge Investments, LLC, Triumph Mixed Use Investments III, LLC, and Land Com Financial Group, LLC, have also asked the Court to appoint a Chapter 11 Trustee or to convert the Debtors' bankruptcy case to Chapter 7. About VS Fox Ridge VS Fox Ridge, LLC, filed a bare-bones Chapter 11 petition (Bankr. D. Utah Case No. 12-28001) in Salt Lake City on June 20, 2012. Alpine, Utah-based VS Fox Ridge scheduled $95,600,103 in assets and $27,814,802 in liabilities. Equity owners Stephen and Victoria Christensen simultaneously sought Chapter 11 protection (Case No. 12-28010). Judge Joel T. Marker presides over the case. Matthew M. Boley, Esq., at Parsons Kinghorn Harris, PC, serves as counsel. The petition was signed by Stephen Christensen, manager. WARNER MUSIC: CEO, CFO Sign New Employment Pacts, Get Pay Hike -------------------------------------------------------------- Cameron Strang, Chairman and CEO of Warner/Chappell Music, and Brian Roberts, chief financial officer, have signed new employment agreements with Warner Music Group Corp. which became effective on Jan. 1, 2013. Mr. Strang will receive an increase of his annual salary to $2,250,000. Each of these individuals elected to participate in the Warner Music Group Corp. Senior Management Cash Flow Plan, and these new employee letters were a condition to their participation in the Plan. Pursuant to their elections to participate in the Plan, Mr. Strang will receive fixed allocations of 0.925% while and Brian Roberts will receive fixed allocations 0.19% of the Company's "free cash flow". In addition, in connection with their participation in the Plan, Messrs. Strang and Roberts will have the opportunity under the Plan to acquire up to 0.4625% and 0.095% of Deferred Equity Units, and also they will be granted 0.4625% and 0.095% Matching Equity Units, respectively. About Warner Music Group Based in New York, Warner Music Group Corp. (NYSE: WMG) -- http://www.wmg.com/-- was formed by a private equity consortium of investors on Nov. 21, 2003. The Company is the direct parent of WMG Holdings Corp., which is the direct parent of WMG Acquisition Corp. WMG Acquisition Corp. is one of the world's major music-based content companies and the successor to substantially all of the interests of the recorded music and music publishing businesses of Time Warner Inc. The Company classifies its business interests into two fundamental operations: Recorded Music and Music Publishing. The Company's Recorded Music business primarily consists of the discovery and development of artists and the related marketing, distribution and licensing of recorded music produced by such artists. The Company's Music Publishing operations include Warner/Chappell, its global Music Publishing company, headquartered in New York with operations in over 50 countries through various subsidiaries, affiliates and non-affiliated licensees. In May 2011, Warner Music Group Corp. and Access Industries, the U.S.-based industrial group, announced the execution of a definitive merger agreement under which Access Industries will acquire WMG in an all-cash transaction valued at $3.3 billion. The purchase includes WMG's entire recorded music and music publishing businesses. On July 20, 2011, the Company notified the New York Stock Exchange, Inc., of its intent to remove the Company's common stock from listing on the NYSE and requested that the NYSE file with the SEC an application on Form 25 to report the delisting of the Company's common stock from the NYSE. On July 21, 2011, in accordance with the Company's request, the NYSE filed the Form 25 with the SEC in order to provide notification of that delisting and to effect the deregistration of the Company's common stock under Section 12(b) of the Securities Exchange Act of 1934, as amended. On August 2, 2011, the Company filed a Form 15 with the SEC in order to provide notification of a suspension of its duty to file reports under Section 15(d) of the Exchange Act. The Company continues to file reports with the SEC pursuant to the Exchange Act in accordance with certain covenants contained in the instruments governing the Company's outstanding indebtedness. Warner Music incurred a net loss attributable to the Company of $112 million for the fiscal year ended Sept. 30, 2012, compared with a net loss attributable to the Company of $31 million for the period from July 20, 2011, through Sept. 30, 2011. The Company's balance sheet at Sept. 30, 2012, showed $5.27 billion in total assets, $4.33 billion in total liabilities and $944 million in total equity. WILLIAM D. HALL: Former Counsel Loses Bid to Modify Fee Award ------------------------------------------------------------- Bankruptcy Judge Arthur I. Harris denied two motions by debtor William D. Hall's former counsel, Ronald E. Henderson, Esq.: -- the motion to modify a joint stipulation awarding the former counsel's attorney's fees; and -- the motion to clarify or modify the debtor's confirmed plan of reorganization regarding the payment of the former counsel's attorney's fees. On July 28, 2011, Mr. Henderson filed an application for compensation seeking attorney's fees of $196,578, representing services provided in the sum of $217,578 minus the retainer received in the sum of $21,000. The United States Trustee objected. On Sept. 21, 2011, Mr. Henderson and the U.S. Trustee filed a joint stipulation agreeing to the award of attorney's fees in the sum of $192,092. On Oct. 3, 2011, pursuant to the joint stipulation, the Court awarded Mr. Henderson attorney's fees of $192,092.50, plus expenses in the sum of $7,079. During the month of October 2011, the debtor paid Mr. Henderson $125,011 of the attorney's fees owed. On July 26, 2012, Mr. Henderson filed a motion to modify the joint stipulation agreeing to the award of his attorney's fees. In the motion, he stated he incorrectly indicated in his application for attorney's fees that he received a retainer of $21,000 and asserted that he actually received only a retainer of $10,000 for the case. The U.S. Trustee objected to Mr. Henderson's motion to modify the joint stipulation. The debtor, through new counsel, also objected. On Aug. 31, 2012, Mr. Henderson counsel filed a motion to modify the debtor's confirmed Chapter 11 plan of reorganization with regard to payment of his attorney's fees. He wants the plan modified to provide a date by when the debtor's properties must be sold and by when administrative fees must be paid to Class 1 holders. The debtor again objected, arguing that Mr. Henderson lacks standing to move for modification of the confirmed Chapter 11 plan, and in the alternative, the debtor desires to propose his own modification of the plan. Mr. Henderson opposed mediation. According to Judge Harris, cause does not exist to modify the joint stipulation. Even if the $10,000 math error is correct, the judge said Mr. Henderson is responsible for preparing and reviewing his own fee application. "For former counsel to raise this purported error in his own fee application almost a year after submitting it to the Court is not a sufficient ground to modify the stipulation under Bankruptcy Rule 9024 or analogous provisions." Judge Harris also said Mr. Henderson's motion to modify the debtor's plan lacks merit. Modification of a confirmed Chapter 11 plan is governed by 11 U.S.C. Sec. 1127(b) and (e) and Bankruptcy Rule 3019(b). The judge said Mr. Henderson lacks standing to modify the plan under Sec. 1127(b) because he is not the proponent of the plan or the reorganized debtor. The judge also pointed out that Mr. Henderson does not provide any specific language for the requested modification nor any specific time limits for selling properties and paying administration fees to Class 1 holders. "In addition, the equities in this case do not support modification of the debtor's plan. Approximately two years after the plan was confirmed, former counsel now seeks to modify terms that he himself drafted," Judge Harris noted. To the extent that former counsel's motion merely seeks clarification of the plan's terms as to the payment of attorney's fees, the Court said further clarification is unnecessary. The confirmed plan indicates that former counsel will be paid when properties have been sold. Hence, if properties have not yet been sold, then former counsel is not yet entitled to payment. "If former counsel believes that delay in selling properties is delaying his right to be paid, former counsel is himself partly responsible for the situation. After all, he was the one who agreed to be paid within 30 days after the sale of the properties. To the extent that this delay constitutes a material default with respect to the confirmed plan, or other cause for conversion or dismissal, former counsel can always file a motion under [11 U.S.C. Sec] 1112(b) and Bankruptcy Rule 1017; however, such a motion is not before the Court. Accordingly, the motions of former counsel are denied," Judge Harris said. A copy of Judge Harris' Jan. 3, 2013 Memorandum of Opinion is available at http://is.gd/O2nNkTfrom Leagle.com. About William D. Hall William D. Hall and Virginia L. Hall, in Hudson, Ohio, filed a joint Chapter 11 bankruptcy petition (Bankr. N.D. Ohio Case No. 09-54016) on Sept. 7, 2009. Ronald E. Henderson, Esq., served as the Debtors' counsel. The Halls estimated under $10 million in assets. A full-text copy of the Debtors' petition, including a list of their 12 largest unsecured creditors, is available for free at http://bankrupt.com/misc/ohnb09-54016.pdf WPCS INTERNATIONAL: Has Until June 24 to Regain Nasdaq Compliance ----------------------------------------------------------------- WPCS International Incorporated received notification from The Nasdaq Stock Market indicating that the Company had been granted an additional 180 calendar days to regain compliance with the $1.00 minimum per share bid price required for continued listing on The Nasdaq Capital Market. On June 25, 2012, the Company was notified by Nasdaq that the Company did not meet the minimum bid price requirement for continued listing and was provided until Dec. 24, 2012, to achieve compliance. In accordance with Marketplace Rule 5810(c)(3)(A), the Company has 180 calendar days from the date of the Nasdaq letter, or until June 24, 2013, to regain compliance with the minimum bid price rule. To regain compliance, the closing bid price of the Company's common stock must be at or above $1.00 per share for a minimum of 10 consecutive business days. Nasdaq may, in its discretion, require the Company to maintain a bid price of at least $1.00 per share for a period in excess of 10 consecutive business days, but generally no more than 20 consecutive business days, before determining that the Company has demonstrated an ability to maintain long-term compliance. If the Company does not regain compliance by June 24, 2013, Nasdaq will provide written notification to the Company that the Company's common stock may be delisted. At that time, the Company may then appeal the delisting determination to a Hearings Panel. There can be no assurances that the Company will be able to regain compliance with the Nasdaq minimum bid price rule and thereby maintain the listing of its common stock. About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. J.H. COHN LLP, in Eatontown, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended April 30, 2012. The independent auditors noted that the Company is in default of certain covenants of its credit agreement and has incurred operating losses, negative cash flows from operating activities and has a working capital deficiency as of April 30, 2012. These matters raise substantial doubt about the Company's ability to continue as a going concern. WPCS reported a net loss attributable to the Company of $20.54 million for the year ended April 30, 2012, compared to a net loss attributable to the Company of $36.83 million during the prior fiscal year. The Company's balance sheet at Oct. 31, 2012, showed $21.47 million in total assets, $14.69 million in total liabilities and $6.78 million in total equity. * Equity Firms May Seek New Bank Exit Plans in '13, Fitch Says -------------------------------------------------------------- Rising bank regulatory costs, a persistently low interest rate environment, and weak equity valuations may force increasing numbers of private equity (PE) firms with investments in U.S. banks to consider alternatives to traditional exit strategies in 2013, according to Fitch Ratings. More than four years after the onset of the financial crisis, when many PE firms made initial investments in U.S. banks that were starved for capital, most investors are weighing exit options carefully as their typical investment periods of three to five years come to a close. The operating challenges faced by many smaller banks backed by private equity, including historically low net interest margins and higher regulatory compliance costs, have depressed expectations for organic returns. This has led many prospective acquirers and equity investors to mark down valuations, in many cases undermining exit economics for PE investors looking to sell stakes in leveraged banks. Fitch says, "As a result, we expect more PE investors to pursue alternative investment return strategies in 2013, including more reliance on share repurchases and special dividends in place of IPOs and M&A transactions. To a large extent, these changes reflect a new recognition of likely delays in the timing of exits, driving decisions to boost near-term returns via cash distributions while pushing ultimate exit dates further out. "Evidence of the shift in exit strategies began to emerge in 2012, when many high-profile investment firms moved away from IPOs and M&As to pursue other cash distribution policies or, in some cases, by extending their investment time horizon beyond three to five years." Washington-based Sterling Bank, minority-owned by Warburg Pincus and Thomas H. Lee Partners, announced a special dividend that was paid out in late December. In addition, Webster Financial completed a $100 million share repurchase in December after the bank completed a partial IPO of its shares. After the IPO, Warburg retained a 14% ownership stake in Webster. "Absent a robust turnaround in U.S. bank fundamentals in 2013, we expect more institutions with PE backing to evaluate alternative exit scenarios more carefully this year. A revival of the IPO market and a pick up in bank M&A could ease pressure on PE firms to consider exit alternatives, but many investors in banks will likely be forced to look away from traditional exit routes and push out return horizons as industry profitability remains under pressure," Fitch adds. * Fitch Says U.S. Prime Auto ABS Losses Hold Steady --------------------------------------------------- The end of 2012 brings continued strong performance for U.S. prime auto ABS while subprime loans again took a step back, as expected, according to the latest index results from Fitch Ratings. Prime auto ABS produced the strongest year to date with losses dropping to record low levels, ranging from 0.14%-0.53%. As Fitch predicted, subprime auto ABS performance has declined over the past six months, driven by the typical weak fall season going into late 2012. Factors supporting performance in 2012 included the recovering U.S. economy albeit volatile, strong used vehicle values and high recovery rates, and strong collateral characteristics and solid performance of the 2009-2011 vintages to date. November saw the Manheim Used Vehicle Value Index rising to 122.6 from 121.9 in October, as wholesale vehicle values was strong and values rose due to increased demand and tight inventories due to the effects of Hurricane Sandy. Although wholesale vehicle values came down from peak levels seen earlier in the year, they are holding strong going into 2013. Fitch expects used vehicle values to continue this trend in 2013 albeit at somewhat lower levels. Prime 60+ day delinquencies dropped to 0.36% in November from 0.37% in October. This represents a 21.7% improvement year-over- year (YOY). Prime cumulative net losses (CNL) also dipped in November, improving 3.3% month-over-month (MOM) and 48.2% lower than in November 2011. Prime annualized net losses (ANL) were 0.36%, slightly above October's level (0.34%) but were 32.1% stronger YOY. Subprime 60+ day delinquencies came down 5.4% in November to 3.53%. However, ANL rose to 6.72%, a 4.4% increase MOM and 0.5% rise YOY. U.S. auto ABS issuance has been buoyant in 2012. Driving the strong issuance numbers are higher new and used auto sales this year, the expanding consumer credit market, availability of new improved vehicle models and the aging U.S. vehicle fleet. Fitch's auto ABS indices comprise of $67.19 billion of outstanding notes issued from 121 transactions. Of this amount, 75% comprise prime auto loan ABS and the remaining 25% subprime ABS. Fitch's outlook for prime auto ABS asset performance heading into 2013 is stable, while ratings performance outlook remains positive for prime auto loan ABS. * US Prime MMF Exposure to Eurozone Banks Up in 5 Mos., Fitch Says ------------------------------------------------------------------ U.S. prime money market fund (MMF) exposure to Eurozone banks rose for the fifth consecutive month although exposures remain well- below previous levels, according to Fitch Ratings. As of end-November 2012, Eurozone bank allocations accounted for 13.7% of total U.S. MMF holdings, an 8% increase on a dollar basis since end-October 2012. During the same period MMF allocations to German and French banks increased by 26% and 6%, respectively. Despite these recent increases, MMF exposure to Eurozone banks remains 60% below end-May 2011 levels. Fitch believes a return to end-May 2011 eurozone exposures in the near term is unlikely, particularly given European banking supervisors' efforts to limit banks' use of short-term USD funding. New Basel liquidity rules will likely also discourage banks' use of short-term wholesale funding. These regulatory pressures could constrain the future issuance of shorter-term bank debt, which has historically been an important asset class for MMFs. The proportion of European and Eurozone exposure in the form of repos rose slightly, indicating a preference for secured exposure that might signify lingering MMF risk aversion to the sector. Aggregate repo exposure continues to represent about 20% of total MMF assets. The 15 largest exposures to individual banks, as a group, comprise approximately 42% of total MMF assets, with only one Eurozone bank within the top-15. The full report 'U.S. Money Fund Exposure and European Banks: Eurozone Rises for Fifth-Straight Month' is available at 'www.fitchratings.com'. * Slow Growth in U.S. Power Use to Add Pressure to Some Entities ---------------------------------------------------------------- Fitch believes the expected small increases in U.S. electricity usage will add to the financial pressure on some power entities. The Energy Information Administration projects a 0.6% increase in consumption for industry and 0.7% for residences through 2040. Consumption fell in 2008, 2009, and 2011 with a small increase in 2010. For competitive generation companies (gencos), the dampening effect on electricity sales from energy efficiency has exacerbated the already depressed spot and forward wholesale power prices. Coal-fired generators are most vulnerable as evidenced by the recent writedown by Ameren of its merchant genco business and Dominion's retirement of its Kewaunee nuclear power plant. "Over the next three-to-five years, we expect increasing challenges to the monopolistic utility business model as federal lighting standards will be fully effective in 2015 and competition is introduced from energy efficiency and demand-response businesses, the economics of which compare favorably to utility supplied power and such lost sales will hurt the utility credit profile. The avoidance of electricity consumption, measured as "negawatts", is already reflected in market pricing at PJM capacity auctions and competes with traditionally supplied power. Higher unit costs and stranded costs in less productive capital investments are the largest potential impact from slower electricity sales," Fitch says. "In our view, the impact on most public power entities is not likely to be as material, given their cost-of-service business model and lower reliance on industrial sector sales. Slower growth in usage could even delay investment in expensive new power supply resources for many public power utilities, thereby moderating production costs and necessary rate increases. "However, public power entities that rely heavily on the sale of excess power to subsidize retail revenue are likely to face continued pressure to raise rates in 2013. In addition to the reduction in usage, we expect pressure on these entities to rise as wholesale market prices increase only modestly through 2015, natural gas prices remain low and most regions of the U.S. maintain excess capacity." * Cleary Gottlieb Blasts Subpoena in $1.4B Argentina Debt Suit -------------------------------------------------------------- Daniel Wilson of BankruptcyLaw360 reports that Cleary Gottlieb Steen & Hamilton LLP asked a New York federal judge to quash a subpoena served on it by several private equity-backed bondholders in a $1.4 billion Argentine debt default suit, saying allegations of a scheme to avoid a judgment in the case were baseless. According to the law firm's motion, the companies' attempts to obtain documents from the firm over its supposed attempts to help Argentina, its client, evade several court orders to repay $1.4 billion owed to the plaintiffs, the report notes. * Manhattan District Judge Barbara Jones Joins Zuckerman Spaeder ---------------------------------------------------------------- Peter Lattman, writing for The New York Times, reports that Judge Barbara S. Jones, a federal judge and a former prosecutor, is stepping down from the bench to join the law firm Zuckerman Spaeder. According to the NY Times, Ms. Jones, of the U.S. District Court for the Southern District of New York in Manhattan, said in an interview that her last day as judge was Friday and that she would start at Zuckerman Spaeder later this month. "I've been in public service for more than 40 years, the last 17 on the bench," Judge Jones told NY Times. "I'm ready to try something new." The report notes Judge Jones, 65, has never worked in a law firm, not even during a summer internship. A graduate of Temple University's law school, she spent the first half of her career as a prosecutor in three offices -- the Justice Department's organized crime strike force, the United States attorney's office in the Southern District of New York and the Manhattan district attorney's office. President Bill Clinton, acting on the recommendation of Senator Daniel Patrick Moynihan, nominated her for a judgeship in 1995. NY Times relates she presided over a wide range of cases, including the 2005 trial of Bernard J. Ebbers, the former chief executive of WorldCom, and the 1997 trial of Autumn Jackson, a woman who tried to extort millions of dollars from the entertainer Bill Cosby. Both resulted in convictions. According to NY Times, Zuckerman Spaeder has expanded its Manhattan office over the last year. A litigation boutique with headquarters in Washington, the firm recently hired three prominent lawyers for its New York presence: Steven M. Cohen, a former top aide to Gov. Andrew M. Cuomo; Andrew E. Tomback, a former partner at Milbank, Tweed, Hadley & McCloy; and Paul Shechtman, a criminal defense lawyer who, as a young prosecutor, was supervised by Ms. Jones. * Schulte Roth & Zabel Elects New Partner & Promotes Associates --------------------------------------------------------------- Schulte Roth & Zabel LLP on Jan. 4 announced the election of Taleah E. Jennings as partner. The firm also announces the promotions of Laura Angel-Lalanne, Christopher H. Giampapa, Rami Kidouchim, Brian T. Kohn, Neil Robson and Cathy A. Weist to special counsel. Taleah Jennings, Laura Angel-Lalanne, Christopher Giampapa, Rami Kidouchim and Brian Kohn are located in the firm's New York office. Neil Robson and Cathy Weist are resident in the firm's London office. "All of these lawyers have distinguished themselves through their contributions to our clients and the firm," said Alan Waldenberg, chair of the firm's executive committee and chair of the tax group. "They are an important part of the firm's future and we are very proud to recognize their achievements." Partner Taleah E. Jennings, a partner in the litigation group, focuses her practice on complex commercial litigation of all types and securities litigation and enforcement matters, as well as employment-related disputes. Her clients are primarily financial services entities, such as investment managers, private equity firms, interdealer brokerage firms and commercial real estate firms. Taleah has litigated cases in various state and federal courts, as well as regulatory and arbitration forums, from the commencement of claims through trials and appeals. She received her J.D. from Rutgers-Newark Law School and her B.S. from the University of Maryland. Special Counsel Laura Angel-Lalanne, a special counsel in the individual client services group, practices in the areas of estate planning and administration, trusts, family law, and the creation, administration and taxation of charitable organizations. Laura received her J.D. from Harvard Law School and her B.A. from the University of Michigan. Christopher H. Giampapa, a special counsel in the litigation group, represents hedge and private equity funds, financial services companies and individuals in a variety of areas, including in complex commercial, securities and employment-related litigation. Chris also has experience with internal investigations and regulatory inquiries, including insider trading, obstruction of justice, witness tampering, anti-money laundering and antitrust violations. He received his J.D., cum laude, from Harvard Law School and his B.A., magna cum laude, from Amherst College. Rami Kidouchim, a special counsel in the finance group, represents both creditors and debtors (including hedge funds, private equity funds, fund of funds, commercial finance companies and investment banks) in a wide range of domestic and cross-border commercial and corporate finance transactions. Rami also has experience in structuring and negotiating complex secured and unsecured financing transactions, including asset-based and cash-flow financings, acquisition and leveraged financings, private placements and public offerings of debt securities, debtor-in- possession financings, second lien and subordinate debt financings, restructurings and workouts. Rami received his J.D., cum laude, from Brooklyn Law School and his B.S., cum laude, from Yeshiva University. Brian T. Kohn, a special counsel in the litigation group, practices in the areas of complex commercial, securities, accountants' liability, mergers and acquisitions, and bankruptcy and creditors' rights litigation. Brian also regularly represents clients in connection with SEC and other regulatory inquiries and investigations. In his pro bono practice, Brian has frequently worked with the Innocence Project, a non-profit legal clinic focused on exonerating wrongly convicted individuals. Brian is a cum laude graduate of the Benjamin N. Cardozo School of Law and he received his B.A. from Ithaca College. Prior to law school, Brian spent five years as a reporter at several New York newspapers. Neil Robson, a special counsel in the investment management group, focuses on counseling hedge and private equity funds on operational, regulatory and compliance matters regarding FSA and E.U. authorization and compliance, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of financial services groups and structuring and marketing of investment funds. Neil graduated from BPP Law School and earned an M.A. and B.A. from University College London, as well as a diploma from Birkbeck College at the University of London. Cathy A. Weist, a special counsel in the investment management group, focuses her practice on advising European and U.S. investment managers of hedge funds, private equity funds, hybrid funds and fund of funds in all aspects of their business. She also provides advice to clients on general securities law and regulatory matters impacting investment funds and their managers, such as compliance with SEC rules and the marketing of funds in various jurisdictions. She received her J.D. from the New York University School of Law and her B.S. from the University of Utah. About Schulte Roth & Zabel LLP Schulte Roth & Zabel LLP -- http://www.srz.com-- is a full- service law firm with offices in New York, Washington, D.C. and London. Serving the financial services industry, the firm regularly advises clients on corporate and transactional matters, as well as providing counsel on securities regulatory compliance, enforcement and investigative issues. The firm's practices include litigation; investment management; business reorganization; employment & employee benefits; environmental; finance; individual client services; intellectual property, sourcing & technology; M&A real estate; regulatory & compliance; securities & capital markets; structured products & derivatives; and tax. * BOND PRICING -- For Week From Dec. 31 to Jan. 4, 2013 ------------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- 1ST BAP CHUR MEL 7.500 12/12/2014 5.000 AES EASTERN ENER 9.000 1/2/2017 1.750 AES EASTERN ENER 9.670 1/2/2029 4.125 AGY HOLDING COR 11.000 11/15/2014 46.627 AHERN RENTALS 9.250 8/15/2013 68.000 ALION SCIENCE 10.250 2/1/2015 50.150 AMBAC INC 6.150 2/7/2087 4.765 ATP OIL & GAS 11.875 5/1/2015 9.900 ATP OIL & GAS 11.875 5/1/2015 10.250 ATP OIL & GAS 11.875 5/1/2015 10.250 BUFFALO THUNDER 9.375 12/15/2014 35.000 CENTRAL EUROPEAN 3.000 3/15/2013 60.000 CHAMPION ENTERPR 2.750 11/1/2037 1.000 DELTA AIR 1992B2 10.125 3/11/2015 30.000 DIRECTBUY HLDG 12.000 2/1/2017 18.750 DIRECTBUY HLDG 12.000 2/1/2017 18.750 DOWNEY FINANCIAL 6.500 7/1/2014 55.000 DYN-RSTN/DNKM PT 7.670 11/8/2016 4.875 EASTMAN KODAK CO 7.000 4/1/2017 10.750 EASTMAN KODAK CO 7.250 11/15/2013 11.550 EASTMAN KODAK CO 9.200 6/1/2021 12.600 EASTMAN KODAK CO 9.950 7/1/2018 12.100 EDISON MISSION 7.500 6/15/2013 48.875 ELEC DATA SYSTEM 3.875 7/15/2023 95.000 FAIRPOINT COMMUN 13.125 4/1/2018 1.000 FAIRPOINT COMMUN 13.125 4/2/2018 1.220 FIBERTOWER CORP 9.000 1/1/2016 20.500 FONTAINEBLEAU LA 10.250 6/15/2015 0.250 GEOKINETICS HLDG 9.750 12/15/2014 43.500 GEOKINETICS HLDG 9.750 12/15/2014 43.313 GLB AVTN HLDG IN 14.000 8/15/2013 32.000 GLOBALSTAR INC 5.750 4/1/2028 55.000 GMX RESOURCES 4.500 5/1/2015 44.775 HAWKER BEECHCRAF 8.500 4/1/2015 6.250 HAWKER BEECHCRAF 8.875 4/1/2015 6.250 HORIZON LINES 6.000 4/15/2017 30.000 HUTCHINSON TECH 8.500 1/15/2026 49.500 INTL LEASE FIN 4.150 1/15/2013 99.250 INTL LEASE FIN 4.350 1/15/2013 99.250 INTL LEASE FIN 4.950 1/15/2013 99.250 INTL LEASE FIN 5.250 1/10/2013 100.071 JEHOVAH-JIREH 7.800 9/10/2015 10.000 LBI MEDIA INC 8.500 8/1/2017 25.375 LEHMAN BROS HLDG 0.250 12/12/2013 20.625 LEHMAN BROS HLDG 0.250 1/26/2014 20.625 LEHMAN BROS HLDG 1.000 10/17/2013 20.625 LEHMAN BROS HLDG 1.000 3/29/2014 20.625 LEHMAN BROS HLDG 1.000 8/17/2014 20.625 LEHMAN BROS HLDG 1.000 8/17/2014 20.625 LEHMAN BROS HLDG 1.250 2/6/2014 20.625 LEHMAN BROS INC 7.500 8/1/2026 18.000 MANNKIND CORP 3.750 12/15/2013 73.250 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 MF GLOBAL LTD 9.000 6/20/2038 61.000 OVERSEAS SHIPHLD 8.750 12/1/2013 37.000 PLATINUM ENERGY 14.250 3/1/2015 66.500 PLATINUM ENERGY 14.250 3/1/2015 47.000 PMI CAPITAL I 8.309 2/1/2027 0.125 PMI GROUP INC 6.000 9/15/2016 30.500 POWERWAVE TECH 1.875 11/15/2024 3.500 POWERWAVE TECH 1.875 11/15/2024 3.500 POWERWAVE TECH 3.875 10/1/2027 3.500 POWERWAVE TECH 3.875 10/1/2027 3.500 PROLOGIS 1.875 11/15/2037 99.000 PRUDENTIAL FIN 2.750 1/14/2013 100.033 RESIDENTIAL CAP 6.875 6/30/2015 22.000 SAVIENT PHARMA 4.750 2/1/2018 18.000 SCHOOL SPECIALTY 3.750 11/30/2026 50.625 TERRESTAR NETWOR 6.500 6/15/2014 10.000 TEXAS COMP/TCEH 10.250 11/1/2015 31.000 TEXAS COMP/TCEH 10.250 11/1/2015 27.000 TEXAS COMP/TCEH 10.250 11/1/2015 28.000 TEXAS COMP/TCEH 15.000 4/1/2021 36.250 TEXAS COMP/TCEH 15.000 4/1/2021 34.125 THQ INC 5.000 8/15/2014 15.000 TL ACQUISITIONS 10.500 1/15/2015 34.375 TL ACQUISITIONS 10.500 1/15/2015 35.000 TOUSA INC 10.375 7/1/2012 2.000 UAL 1991 TRUST 10.020 3/22/2014 11.250 USEC INC 3.000 10/1/2014 36.750 VERSO PAPER 11.375 8/1/2016 43.000 WASH MUT BANK NV 6.750 5/20/2036 0.250 WESTERN EXPRESS 12.500 4/15/2015 61.500 WESTERN EXPRESS 12.500 4/15/2015 61.500 ********* 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., Washington, D.C., 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 2013. 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 $975 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 Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***