/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130115.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, January 15, 2013, Vol. 17, No. 14 Headlines 23 EAST: Court Confirms Creditors' Plan of Liquidation AMCORE FINANCIAL: Agrees to $3.3M Deal in Retirement Plan Suit AMERICAN SUZUKI: Plan Goes to Creditors for Voting ASARCO LLC: Keeps DuPont, Others in $150M Mine Cleanup Suit ATI HOLDINGS: S&P Assigns 'B' Corporate Credit Rating AUSTIN MUTUAL: A.M. Best Hikes Fin'l Strength Rating From 'B' BAKERS FOOTWEAR: Judge Okays Plan to Liquidate Remaining Stores BALTIMORE BEHAVIORAL: Files for Bankruptcy With $5.5MM Debt BELASCO THEATER: Case Summary & 20 Largest Unsecured Creditors BERNARD L. MADOFF: Fairfield Sentry Can't Undo Sale of $230M Claim BOMBARDIER INC: DBRS Rates New $2-Bil. Sr. Unsecured Notes 'BB' CALCEUS ACQUISITION: S&P Assigns Prelim. 'B' Corp. Credit Rating CALIFORNIA: Cities Sue Banks over Libor Rates CCC ATLANTIC: Files Schedules of Assets and Liabilities COLONY BEACH: Case Summary & 20 Largest Unsecured Creditors CONSTRUCTORA DE HATO: Has Until Jan. 27 to File Ch. 11 Plan COMPOSITE TECHNOLOGY: Plan Exclusivity Period Extended to March 11 CORNERSTONE HEALTHCARE: S&P Withdraws 'B' Corporate Credit Rating COUNTRYWIDE FIN'L: BofA Fighting to Avoid "Toxic" Liabilities CSD LLC: Court Approves Nathan & Associates as Real Estate Broker CSD LLC: Plan Exclusivity Period Extended to June 11 DATALOK III: Case Summary & 20 Largest Unsecured Creditors DEWEY & LEBOEUF: Former Dubai Partners Cut Clawback Deal DRYSHIPS INC: Sells Two Tankers Under Construction DUBAI GROUP: Settles Rift Over Restructuring; Banks Sell Back Debt EASTMAN KODAK: $525M Digital Imaging Patent Sale Gets Green Light EASTMAN KODAK: Trustee Slams Nixon Peabody's Unexplained Billing ENTERTAINMENT CONCEPTS: Court Confirms Bankruptcy Plan GORDON CARUK: BofA Wins Summary Judgment in Arkansas Suit GREAT PLAINS EXPLORATION: Plan Solicitation Extended to March 11 GRUBB & ELLIS: Creditors Voting on Plan, May Get Less Than 5% HANDY HARDWARE: Files for Chapter 11 in Delaware HANDY HARDWARE: Proposes DIP Financing From Wells Fargo HANDY HARDWARE: Seeks to Hire MCA Financial as Advisor HAWKER BEECHCRAFT: Retirees Dispute Termination of Benefits HAWKER BEECHCRAFT: Nonunion Retirees Shafted in Deal, Court Told HARRISBURG, PA: Council Members' State Takeover Suit Nixed HEALTHWAREHOUSE.COM INC: K. Singer Discloses 15% Equity Stake HONK'S INC.: Case Summary & 20 Largest Unsecured Creditors HOSTESS BRANDS: Still In Talks to Find Buyers for Smaller Brands HOSTESS BRANDS: Insurers Can't Arbitrate Collateral Request HYDROFLAME TECH: Court Approves Gordon Arata as Counsel INTERNATIONAL HOME: FirstBank-P.R. Objects to Plan Disclosures INTERSTATE PROPERTIES: Amends Schedules of Assets and Liabilities J & J CONCRETE: Case Summary & 3 Unsecured Creditors J AND Y INVESTMENT: Files Chapter 11 Petition in Seattle JEFFERSON COUNTY, AL: Finalizes 1st Settlement Deal in Ch.9 Case JERRY'S NUGGET: Court Extends Plan Filing Period Until April 10 JOHNS-MANVILLE: 2nd Circ. Mulls Travelers' Exit from $510M Deals KM ASSOCIATES: Wins Confirmation of Chapter 11 Plan LARSON LAND: Creditor Owyhee Objects to Conversion to Chapter 7 LAUREATE EDUCATION: S&P Affirms 'B' Rating on $1.4BB Secured Loan LEAR CORP: Launches Financing Actions; Increases Share Repurchase MF GLOBAL: Creditors Propose Liquidation Plan MF GLOBAL: CRT Analyst Stands Pat on 35% for Bondholders MF GLOBAL: Creditors Take Lead in Offering 1st Plan MF GLOBAL: Insurers Can Proceed with Appeal Over $141M Loss MODERN PLASTICS: Sale Hearing Moved to March 6; NPC Has Offer MONITOR COMPANY: Deloitte Sale OK'd Over Objection to Releases MOUNTAIN PROPERTY: Court Dismisses Chapter 11 Case MS MARK SHALE: Trademarks of Retailer Fetch $19,000 MOUNTAIN LAUREL: Case Summary & 20 Largest Unsecured Creditors MSR RESORT: U.S. Government Objects to Bankruptcy Plan MSR RESORT: IRS Wants Plan Process Slowed, Asserts Tax Claim MT. MORRIS MUTUAL: A.M. Best Hikes Fin'l Strength Rating From B NAT'L EXCHANGE: Kreager Dodges CellTex's $2MM Malpractice Claim NATIONWIDE AMBULANCE: Case Summary & Creditors List NNN 350 MAPLE: Files Schedules of Assets and Liabilities NORTEL NETWORKS: Reaches $67M Deal in Retiree Benefits Feud ODYSSEY DIVERSIFIED: US Trustee Objects to Confirmation of Plans OVERSEAS SHIPHOLDING: S&P Withdraws 'D' Corporate Credit Rating PATROIT COAL: Non-Union Retiree Committee Sought PENSON WORLDWIDE: Ex-Securities Clearing Broker Files Bankruptcy PLYMOUTH OIL: Can Use Cash Collateral Until March 1 POSITIVEID CORP: CEO Touts License Agreement with Boeing POSITIVEID CORP: CEO, Directors Get 29MM Restricted Stock Awards PREMIER NW INVESTMENT: Case Summary & 20 Largest Unsec. Creditors PRESSURE BIOSCIENCES: Shares Struve Securities Purchase Pact RADIAN GROUP: Unit Completes Commutation of Reinsurance Portfolio RESIDENTIAL CAPITAL: US May Object to Proposed $130M Mortgage Sale RESPONSE BIOMEDICAL: Expands U.S. Distribution for RAMP Products RG STEEL: PJM Can Apply Cash Collateral to Prepetition Claim RG STEEL: Signs Settlement with RCC and Gooder-Henrichsen RIVER CANYON: Plan Solicitation Exclusivity Ends April 30 RIVER CANYON: Exit Loans, Income to Fund Plan Payments ROBERT T. KOGER: $22.8-Mil. Default Judgment Vacated by Court SAAB AUTOMOBILE: Launches Saab Secure Program for Vehicle Owners SCHOOL SPECIALTY: Zazove Associates Holds 12.5% Equity Stake SEDONA DEVELOPMENT: Feb. 5 Hearing on Adequacy of Plan Outline SINCLAIR BROADCAST: Charger Corp Discloses 10% Equity Stake SNO MOUNTAIN: Files Schedules of Assets and Liabilities SNO MOUNTAIN: Meeting to Form Creditors' Panel Set for Jan. 28 SOUTH PLAINFIELD: Case Summary & 20 Largest Unsecured Creditors SOUTHERN AIR: Lowenstein Sandler LLP Is Committee Counsel SOUTHERN GENERAL: A.M. Best Lowers Fin'l Strength Rating to 'B' SOUTHERN ONE: Files Schedules of Assets and Liabilities SOUTHERN PACIFIC: DBRS Assigns (P)B(low) Issuer Rating SRKO FAMILY: Signs Deal Resolving Objection to Building Sale STAMP FARMS: Members of Official Creditors Committee STRATUS PROPERTIES: Refinances Comerica Revolving Credit Facility SUPERVALU INC: Fitch Affirms 'CCC' IDR Over Sale Deal T3 MOTION: ICS Opportunities Discloses 3.2% Equity Stake TAB FOODS: Case Summary & 10 Unsecured Creditors TALON THERAPEUTICS: Currently Reviewing Strategic Alternatives TALON THERAPEUTICS: Appoints Warburg Managing Director to Board TC GLOBAL: McDreamy's Charm Didn't Taint Auction, Judge Says TCI COURTYARD: Wants Access to Rents from Quail Hollow Property TELECONNECT INC: Incurs $3.9-Mil. Net Loss in Fiscal 2011 TEXAS STANDARD: Release Bars $4M Award in Energy JV, Court Says THE WINDOW FACTORY: Court Closes Bankruptcy Case THQ INC: Has Bonus Program Approved for Game Developers THUNDERBIRD MINING: DC Circ. Denies Shutdown Benefits to Workers TIGER MEDIA: Heartland Advisors Discloses 4.2% Equity Stake TITAN PHARMACEUTICALS: Intends to List Common Stock on NASDAQ TITAN PHARMACEUTICALS: Extends Employments of Chairman and Pres. TITAN PHARMACEUTICALS: Probuphine Gets FDA Priority Review TOPS HOLDING: Shareholders Approve Repricing of Option Awards TOWNSEND CORP: Court OKs Settlement Regarding Assets Sale TRIAD GUARANTY: Illinois Regulator Sacks Top Executives TRUSTMARK GROUP: A.M. Best Affirms 'bb' Debt Rating UNILAVA CORP: Files Amended Q3 Form 10-Q in XBRL Format UNITED AMERICAN: Amends Fiscal 2012 Form 10-K UNITED SECURITY: A.M. Best Cuts Fin'l Strength Rating to 'B-' UNIVERSITY GENERAL: Crowe Horwath Replaces MKA as Accountants UNIVERSITY GENERAL: Inks First Amendment to April 30 Warrants UNIVERSITY GENERAL: Presents at Sidoti & Company Conference US FOODS: S&P Retains 'CCC+' Rating Despite $200MM Notes Add-On US POSTAL: To Accelerate Steps to Restructure Ops & Cut Costs UTSTARCOM HOLDINGS: Ordinary Shares Tender Offer Oversubscribed UTSTARCOM HOLDINGS: Amends Tender Offer Statement on Schedule TO UTSTARCOM HOLDINGS: Buys 25-Mil. Ordinary Shares for $30-Mil. VERMILLION INC: Stockholder Meeting Delay Prompts Delisting VERTIS HOLDINGS: Taps FTI as Communications Consultants VERTIS HOLDINGS: World Graphic Is Consultant for Inserts Biz. VHGI HOLDINGS: Deborah Hutchinson Resigns from Board VIGGLE INC: Dan Marino Leads Fantasy Football Playoff Challenge VISUALANT INC: Marathon Capital Discloses 5.5% Equity Stake VISUALANT INC: Amends Charters, Code of Conduct & Ethics Policy VITESSE SEMICONDUCTOR: Raging Capital Holds 18.1% Equity Stake VUANCE LTD: Shareholders OK Change of Name to SuperCom Ltd. VYSTAR CORP: Amends Current Report to Add Financial Statements VYSTAR CORP: Appoints Progress Equity Founding Partner to Board W25 LLC: Court Approves Avrum J. Rosen as Counsel WATERSCAPE RESORT: Ex-Construction Manager Wants in on Settlements WEST PENN: Fitch Cuts Rating on $726-Mil. Revenue Bonds to 'C' WEST 380: Files Schedules of Assets and Liabilities WESTMORELAND COAL: Jeffrey Gendell Discloses 18.9% Equity Stake WESTSIDE COMMUNITY BANK: Closed; Sunwest Bank Assumes Deposits WILLBROS GROUP: Unit Completes Sale of Interests to Interserve WM SIX: Amends List of Top Unsecured Creditors WM SIX: Amends Schedules of Assets and Liabilities WOOD ENERGY: Case Summary & 20 Largest Unsecured Creditors WOUND MANAGEMENT: Extends Forbearance with Tonaquint WPCS INTERNATIONAL: Held Conference Call to Discuss Q2 Results ZACHRY HOLDINGS: S&P Assigns Prelim. 'BB-' Corporate Credit Rating ZACKY FARMS: Amends Schedules of Assets and Liabilities ZOGENIX INC: Expects to Report $36-Mil. Product Revenue for 2012 ZOGENIX INC: Offering 15.7MM Common Shares, $75MM Securities ZOGENIX INC: Reports Positive Results From Relday Clinical Trial ZOO ENTERTAINMENT: Ray Schaaf Named President and CEO * Fitch Says Taxable CEFs Rely on Select Few Banks for Funding * U.S. Technology Ratings Stable Despite Headwinds, Fitch Says * U.S. Junk-Bond Default Rate Ends 2012 at 3.2% * New Mortgage Rules Set for Home Lenders * Some Banks, Other Lenders Now Require Quick Chapter 11 Sale * Total Bankruptcy Filings Down 14% in 2012 * NY Comptroller: Local Governments Face "Severe Fiscal Stress" * Performing Arts Face Strikes, Layoffs, Bankruptcy * VC Funding in Solar Sector Down 50% in 2012, Mecom Report Shows * Foreclosure Inventory Falls as Starts Decline, LPS Says * Bank Deal Ends Flawed Reviews of Foreclosures * Judge Postpones Sentencing for Wells Fargo Broker * Senators Press End to Payday Lending * Concord Coalition Seeks Urgent Raise in Federal Debt Limit * Obama Nominates Jacob Lew as Treasury Secretary * Robert Khuzami, SEC Enforcement Chief, to Step Down * St. Louis Fed's Bullard Comments on U.S. Monetary Policy * Private Equity?s Carried Interest Eyed by Congress * Gail B. Geiger Appointed Acting U.S. Trustee for Region 18 * 2nd Circ. Won't Send Argentina Bond Contract Issue to NY * Golden State Law Group Offers Free Initial Consultation * Kramer Levin Among Law360's Top Bankruptcy Practice Groups * Law360 Also Selects Jones Day Bankruptcy Group of 2012 * McDonald Hopkins' D. Agay Among Illinois Super Lawyers * NY Bankr. Firm Rattet Pasternak Folds into DelBello Donnellan * SSG Selected as Boutique Investment Banking Firm of the Year * Samuel Khalil Joins Milbank's Financial Restructuring Group * Large Companies With Insolvent Balance Sheets ********* 23 EAST: Court Confirms Creditors' Plan of Liquidation ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York confirmed Secured Creditors SLC2 Holdings LLC and Seaway Capital Corp.'s Plan of Liquidation for 23 East 39th Street Developers, LLC, dated Nov. 30, 2012. SLC2, Seaway and Class 5 unsecured creditors all voted to accept the Plan. Pursuant to the Confirmation Order, the Unsecured Creditors' Fund will be for the benefit of Class 5 creditors and will include, in addition to the sum of $10,000, any excess proceeds of a sale of the Property and any amounts recovered by or on behalf of the Debtor, or the Debtor's successors and assigns, with respect to any Retained Claims (as defined in Section 10.16 of the Plan). The Plan provides for the liquidation of the Debtor through a sale of the Debtor's real property and improvements thereon located at 23 East 39th Street, New York, New York, subject to higher or better bids to be made at an auction to be conducted by SLC2 and Seaway prior to the confirmation hearing. SLC2 was the prevailing bidder at the auction. At closing, SLC2 will pay Seaway $365,000 and Seaway will assign its claim to SLC2 and will release its lien upon the Property. Seaway will not assign any guaranties or other collateral. Pursuant to the terms of the Plan, SLC2's first mortgage will be discharged or satisfied (from $10.9 million to $10.8 million). $10,000 will be used to establish a fund for pro rata distribution to holders of Allowed Unsecured Claims. Each holder of an Allowed Unsecured Claim will receive payment in cash equal to its pro rata share of the Unsecured Creditors Fund to be established on the Effective Date in the amount of $10,000 plus $50,000 of the proceeds of a higher and better sale in the sum of $12,600,000 and all other amounts in excess of $12,600,000. SLC2 will waive its deficiency Class 5 Claim. Seaway's deficiency claim, if any, will be included in Class 5 for voting purposes but Seaway waives any right to a distribution as a Class 5 Creditor. Interests in the Debtor will be canceled and are deemed to have rejected the Plan. A copy of the Disclosure Statement describing the Secured Creditors' Plan of Liquidation for the Debtor is available at: http://bankrupt.com/misc/23east.doc78.pdf About 23 East 39th Street 23 East 39th Street Developers LLC filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11304) on March 30, 2012. The Debtor estimated assets and debts of $10 million to $50 million as of the Chapter 11 filing. The Debtor is a limited liability company that was formed to purchase real property and improvements thereon located at 23 East 39th Street, in New York City. The Property is encumbered by a first mortgage in the principal sum of $7,250,000 in favor of SLC2 Holdings LLC, as assignee of JPMorgan Chase Bank N.A., successor in interest to Washington Mutual N.A. and a second mortgage in favor of Seaway Capital Corp. as assignee of Madison Exchange LLC in the principal sum of $1,150,000. The Property consists of a vacant six story townhouse building. The Property was originally acquired by the Debtor for the sum of $10,400,000 on Oct. 9, 2007. Judge Robert E. Gerber oversees the case. James O. Guy, Esq., in Clifton Park, New York, serves as counsel to the Debtor. AMCORE FINANCIAL: Agrees to $3.3M Deal in Retirement Plan Suit -------------------------------------------------------------- Jonathan Randles of BankruptcyLaw360 reported that Amcore Financial Inc. has agreed to pay $3.35 million to resolve claims alleging its executives breached their fiduciary duty before the troubled lender collapsed by directing employees to a retirement plan relying on company stock, according to documents filed Thursday in Illinois. The settlement, which must receive court approval, is intended to recoup Amcore employees who invested in the plan anytime between July 2, 2007, and July 15, 2010, the report added. The lawsuits allege Amcore mismanaged the plan and provided inaccurate information to employees about the company's financial health, the report said. About AMCORE Financial Rockford, Ill.-based AMCORE Financial is a registered bank holding company for AMCORE Bank. On April 23, 2010, regulators closed the bank and appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Harris National Association to assume all of the deposits of AMCORE Bank, National Association. AMCORE Financial filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 10-37144) in Chicago on Aug. 19, 2010. The Company said in documents attached to the petition that it had assets of $7.2 million against debts of $75.4 million as of the bankruptcy filing. Roughly $57 million owed to Wilmington Trust, as indenture trustee, on account of a junior subordinated debt due 2037. George N. Panagakis, Esq., at Skadden, Arps, Slate, Meagher & Flom, in Chicago, serves as counsel to the Debtor. Kurtzman Carson Consultants LLC serves as claims agent. AMERICAN SUZUKI: Plan Goes to Creditors for Voting -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the reorganization plan for American Suzuki Motor Corp. is going to creditors for a vote in completion of the strategy by parent Suzuki Motor Corp. to stop selling cars in the U.S. According to the report, if approved at a Feb. 28 confirmation hearing in U.S. Bankruptcy Court in Santa Ana, California, another subsidiary of the Japanese parent will take over the sale and distribution of all-terrain vehicles, outboard motorboat engines and auto parts. The plan is based on a sale of the non-auto businesses to the parent for about $100 million. After liquidation of other assets and payment of expenses, there will be about $107 million remaining for distribution to creditors. Secured creditors will be paid in full. Unsecured creditors, including dealers whose dealership agreements were ended, will be paid in full so long as they agree to drop claims against the Japanese parent. The dealer's claims amount to about $45 million. Other unsecured claims totaling an estimated $14 million are similarly projected for payment in full. The report adds that about 98% of the dealers already accepted a settlement where they agreed to waive claims against the parent in return for immediate payment of half their claims, with the remainder to be paid from the plan. In return for the wavier of claims, the parent agrees not to receive payment on its claims against the American company until unsecured creditors have been paid in full. If an unsecured creditor doesn't waive claims against the parent, the estimated recovery is 5%, according to the disclosure statement, because the parent won't subordinate its claim. Mr. Rochelle also reports the creditors' committee last week withdrew its objection to the payment of salaries to company officers. The committee, in part, objected on the grounds that the executives close ties to the parent rendered them ineligible for service in a U.S. bankruptcy. The committee said it recognized that there would be no officers to serve the company were the incumbents declared ineligible. About American Suzuki Established in 1986, American Suzuki Motor Corporation is the sole distributor of Suzuki automobiles and vehicles in the United States. American Suzuki wholesales virtually all of its inventory through a network of independently owned and unaffiliated dealerships located throughout the continental United States. The dealers then market and sell the Suzuki Products to retail customers. Suzuki Motor Corp., the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki products. American Suzuki has 295 employees. There are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. American Suzuki filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC, absent higher and better offers. SMC is not included in the Chapter 11 filing. The Debtor disclosed assets of $233 million and liabilities totaling $346 million. Debt includes $32 million owing to the parent on a revolving credit and $120 million for inventory financing. There is about $4 million owing to trade suppliers. The Debtor also filed a plan of reorganization together with the petition. Under the proposed Plan, the Motorcycles/ATV and Marine Divisions will remain largely unaffected including the warranties associated with the products. NounCo, Inc., a wholly owned subsidiary of SMC, will purchase the Motorcycles/ATV and Marine Divisions and the parts and service components of the Automotive Division. The restructured Automotive Division intends to honor automotive warranties and authorize the sale of genuine Suzuki automotive parts and services to retail customers through a network of parts and service only dealerships that will provide warranty services. Bankruptcy Judge Catherine E. Bauer signed an order Oct. 6 reassigning the case to Judge Scott Clarkson. ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of Freddie Reiss, Senior Managing Director at FTI Consulting, as chief restructuring officer, and has also added two independent Board members to assist it through this period. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., is the claims and notice agent. The Debtor has retained Imperial Capital, LLC as investment banker. SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern LLP. ASARCO LLC: Keeps DuPont, Others in $150M Mine Cleanup Suit ----------------------------------------------------------- Eric Hornbeck of BankruptcyLaw360 reported that DuPont Co., U.S. Steel Corp., NL Industries Inc. and Sunoco Inc. can't yet escape Asarco LLC's efforts to make them help pay a $150 million environmental cleanup bill it landed after a bankruptcy reorganization because too many factual questions remain, a Missouri federal judge ruled Thursday. U.S. District Judge Beth Phillips said that there were too many disagreements between Grupo Mexico SAB de CV affiliate Asarco and the other companies, including whether certain claims were withdrawn during Asarco's bankruptcy and the extent of the environmental damage, the report related. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 05-21207) on Aug. 9, 2005. Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On Dec. 9, 2009, Asarco Incorporated and Americas Mining Corporation's Seventh Amended Plan of Reorganization for the Debtors became effective and the ASARCO Asbestos Personal Injury Settlement Trust was created and funded with nearly $1 billion in assets, including more than $650 million in cash plus a $280 million secured note from Reorganized ASARCO. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated ASARCO LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. ATI HOLDINGS: S&P Assigns 'B' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services said that it assigned a 'B' corporate credit rating to ATI Holdings Inc. "The outlook is stable based on our expectation of solid double- digit revenue growth and steady margins, although we expect FOCF to remain thin," said Standard & Poor's credit analyst Tahira Wright. S&P also assigned a 'B+' issue level rating on the company's $335 million senior secured credit facility that comprises of a $50 million revolver that expires in 2019 and a $285 million term loan B that expires in 2020. The recovery rating is a '2', indicating substantial (70% to 90%) recovery in the event of a principal payment default. The company is also raising $160 million of mezzanine notes, which S&P do not rate. The ratings on ATI Holdings Inc. reflect the company's "vulnerable" business risk profile, primarily reflecting low barriers to entry and economic cyclicality, and a "highly leveraged" financial risk profile, based on adjusted leverage that exceeds 8.0x at inception with a moderate drop to 7.0x by 2013. "The rating outlook is stable, based on our expectation of solid double-digit revenue growth and steady margins, although we expect FOCF to remain thin. We expect ATI to expand EBITDA generation in 2013, supporting a modest fall in leverage. We expect growth in de novo clinics to be funded internally. We do not believe a higher rating is likely in the near to medium term, given our expectation that the company will continue to invest in growth and operate with a highly leveraged financial risk profile," S&P said. "We could lower the rating if anticipated EBITDA growth is delayed or less than we expect. This could result from poor sites for new clinics that do not generate the same level of visits, or another reimbursement cut in a large state. Such a scenario would cause loan covenant cushions to fall below 10%. This could occur if there was close to a 15% decline in EBITDA," S&P added. AUSTIN MUTUAL: A.M. Best Hikes Fin'l Strength Rating From 'B' ------------------------------------------------------------- A.M. Best Co. has upgraded the financial strength rating to A (Excellent) from B (Fair) and the issuer credit rating to "a+" from "bb+" of Austin Mutual Insurance Company (Austin) (Maple Grove, MN). The outlook for both ratings has been revised to stable from positive. The upgrades are due to the increase in Austin's intercompany quota share reinsurance agreement from 35% to 100% as of January 1, 2013, with the lead company of Main Street America Group, NGM Insurance Company, having become a fully reinsured member. A.M. Best does not expect to downgrade (or place a negative outlook on) the ratings of Austin in the near to mid-term. However, such actions would ensue if the company's relationship with the Main Street America Group, (most specifically its intercompany reinsurance arrangements) were to incur material changes or have a severe reduction in Austin's capitalization due to an increased credit leverage of its reinsured book of business in the event of a catastrophe. BAKERS FOOTWEAR: Judge Okays Plan to Liquidate Remaining Stores --------------------------------------------------------------- Bakers Footwear Group Inc. won permission to liquidate its 56 remaining shoe stores, a ruling that essentially signifies the death of an 88-year old chain that saw several attempts to stay alive -- including a last-ditch sale deal -- fall, Dow Jones' DBR Small Cap Alert reported. 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. BALTIMORE BEHAVIORAL: Files for Bankruptcy With $5.5MM Debt ----------------------------------------------------------- Mental health rehabilitation and addiction treatment center Baltimore Behavioral Health Inc. (BBH) has filed for bankruptcy protection because it owes more than $5.5 million to creditors, according to American Bankruptcy Institute. The nonprofit drug treatment center owes money to a range of public and private debtors, including $4 million in payroll taxes to the Internal Revenue Service, according to the filing, Sarah Gantz of the Baltimore Business Journal relates. That and several other debts are disputed, according to the organization?s bankruptcy filing. The bankruptcy filing, according to the Business Journal, comes after years of trouble for the nonprofit. Between 2010 and 2011, the Baltimore Sun conducted an investigative series on the nonprofit that revealed a highly paid board of directors, difficulty meeting payroll requirements, questionable treatment practices and other issues. The nonprofit was under federal investigation for shortfalls in its retirement plan. The nonprofit in December 2011 sold its West Pratt Street property to an Abell Foundation affiliate, Pratt Street Holdings LLC. Baltimore Behavioral Health planned to lease from Pratt Street Holdings a portion of that office space. The organization?s bankruptcy filing lists the 20 largest unsecured claims owed to creditors. The largest claims are $4 million for payroll taxes to the IRS and $900,000 to Sandy Hill Associates in Baltimore, though both claims are disputed by Behavioral Health. Sandy Hill Associates is a behavioral health consulting firm run by Sandra Hill, who has worked as an executive for Baltimore Behavioral Health. BELASCO THEATER: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Belasco Theater Entertainment, Inc. 1050 S. Hill Street, Suite 101 Los Angeles, CA 90015 Bankruptcy Case No.: 13-10964 Chapter 11 Petition Date: January 11, 2013 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Neil W. Bason Debtor's Counsel: Timothy J. Yoo, Esq. LEVENE NEALE BENDER RANKIN & BRILL, LLP 10250 Constellation Boulevard, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 Fax: (310) 229-1244 E-mail: tjy@lnbyb.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb13-10964.pdf The petition was signed by John Kim, director. Affiliate that previously sought Chapter 11 protection: Entity Case No. Petition Date ------ -------- ------------- Christina Kim 11-19740 03/07/11 BERNARD L. MADOFF: Fairfield Sentry Can't Undo Sale of $230M Claim ------------------------------------------------------------------ Maria Chutchian of BankruptcyLaw360 reported that a New York bankruptcy judge on Thursday refused to allow the trustee for Bernard L. Madoff feeder fund Fairfield Sentry Ltd. to invalidate the sale of a $230 million claim in the Madoff liquidation that later spiked in value. In his decision, U.S. Bankruptcy Judge Burton R. Lifland blasted Sentry trustee Kenneth Krys? "Hail Mary" attempt to undo the sale to Farnum Place LLC following a multibillion settlement in the Bernard L. Madoff Investment Securities LLC liquidation just three days after the sale was executed, the report added. 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 various appeals has limited Mr. Picard's ability to distribute recovered funds. BOMBARDIER INC: DBRS Rates New $2-Bil. Sr. Unsecured Notes 'BB' --------------------------------------------------------------- DBRS has assigned its BB instrument rating with a Stable trend to the proposed $2.0 billion Senior Unsecured Debentures (the Notes) to be issued by Bombardier Inc. (Bombardier or the Company). The Notes, with a recovery rating of RR4, are rated at the same level as Bombardier's Issuer Rating. The debt issue comprises a $750 million 4.25% three-year tranche and a $1.25 billion 6.125% ten- year tranche. The debentures are unsecured obligations and rank equally and ratably with all of Bombardier's unsecured and unsubordinated obligations. DBRS understands that net proceeds of the debt will be used for general corporate purposes, including funding its capital expenditure and aircraft development programs. DBRS recognizes that the completion of the proposed debt issue will strengthen Bombardier's liquidity and financial flexibility as the high capital spending related to its aircraft development programs continue. However, the additional debt will also weaken Bombardier's financial risk profile, with increased leverage and limited additional cash flows and earnings at least until the Company completes the CSeries development program and commences delivery. DBRS projects adjusted debt-to-EBITDA to be in excess of 5.0 times and adjusted cash flow-to-debt to fall below 15% for the full-year 2012. At these levels, there is now limited cushion at the BB rating level, and further deterioration could pressure the rating. The rating also factors in DBRS's expectation that the CSeries program will not suffer any material increase in development costs or further delay from the scheduled first flight by the end of June 2013 and that the transportation division will resume its operating margin improvement in 2013 following recent execution issues. Unexpected negative developments in either front could also weaken the rating. CALCEUS ACQUISITION: S&P Assigns Prelim. 'B' Corp. Credit Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'B' corporate credit rating to Calceus Acquisition Inc. The outlook is stable. At the same time, S&P assigned Calceus' proposed $270 million senior secured term loan its preliminary 'B' issue-level rating (the same as the corporate credit rating) with a preliminary recovery rating of '3', indicating S&P's expectation for meaningful (50% to 70%) recovery for the lenders in the event of a payment default. "Our ratings on Calceus reflect our view that the company's debt levels are high following its acquisition by financial sponsor Apax Partners, resulting in pro forma adjusted debt-to-EBITDA leverage in excess of 7x," said Standard & Poor's credit analyst Linda Phelps. Standard & Poor's ratings on Calceus further reflect the company's strong position in the U.S. premium footwear market and good diversification by product category and distribution channel. Constraints on the rating include the highly competitive market in which Calceus operates, as well as by its limited geographic diversification and reliance on a single brand. The stable outlook reflects S&P's view that Calceus' profitability will improve over the next 12 months thanks to cost reductions, and the company will be able to maintain its strong market positions in the U.S. premium footwear market. "We expect credit metrics to strengthen modestly such that the company's debt-to- EBITDA leverage declines to 6x area in the next 12 months," said Ms. Phelps. CALIFORNIA: Cities Sue Banks over Libor Rates --------------------------------------------- California cities and counties sued UBS AG, Barclays Plc and 20 other banks alleging that they lost millions of dollars because the financial institutions manipulated the benchmark Libor rate, Bloomberg News reported. Karen Gullo, writing for Bloomberg, said the plaintiffs claim they were cheated out of higher interest payments on investments such as interest-rate swaps and corporate bonds tied to Libor. Complaints were filed on Jan. 9 in federal court in Los Angeles, San Francisco and San Diego on behalf of the counties of San Diego and San Mateo, the city of Riverside and five other entities against 20 current and former banks that set Libor rates, law firm Cotchett Pitre & McCarthy LLP said in an emailed statement. Banks already face 30 lawsuits by U.S. homeowners and other plaintiffs seeking to hold them responsible for alleged manipulation of the rate used as a borrowing-cost benchmark, the Bloomberg report noted. A class-action lawsuit filed in Manhattan in October by homeowners alleges a conspiracy among financial institutions drove up the cost of mortgage loans. The lawsuits filed on Jan. 9 allege violations of antitrust laws, negligence and unjust enrichment and seek to recover losses and triple damages. Libor, the London interbank offered rate, is based on a British Bankers? Association-commissioned daily survey that asks lenders to estimate how much it would cost to borrow money from each other for various periods in 10 different currencies, Bloomberg related. The figures are used to set interest rates for more than $300 trillion of securities and loans worldwide, including interest rate swaps, which counties such as San Mateo use to hedge interest rate payments to investors on variable-rate municipal bonds. Banks altered their estimates to the survey to artificially suppress Libor, increasing their own profits and creating the illusion of financial strength by underreporting the interest rates that they were being charged to borrow money, lawyers for San Mateo county said in the complaint. UBS, Switzerland?s biggest bank, agreed to pay $1.5 billion last month to U.S., U.K. and Swiss regulators for trying to rig the rates, Bloomberg recounted. Barclays was fined $450 million in June by U.S. and U.K. regulators for submitting false answers to the daily canvass. Regulators investigating Libor manipulation have sought information from more than a dozen banks that set rates in the U.S., Europe and Japan. The case is San Mateo County v. Bank of America, 13-108, U.S. District Court, Northern District of California (San Francisco). CCC ATLANTIC: Files Schedules of Assets and Liabilities ------------------------------------------------------- CCC Atlantic LLC filed its schedules of assets and liabilities with the U.S. Bankruptcy Court for the District of Delaware, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $48,000,000 B. Personal Property $890,617 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $41,000,000 E. Creditors Holding Unsecured Priority Claims $4,5000 F. Creditors Holding Unsecured Non-priority $564,140 Claims ----------- ----------- TOTAL $48,890,617 $41,568,640 Based in Linwood, New Jersey, CCC Atlantic, LLC, filed for Chapter 11 protection on Dec. 6, 2012 (Bankr. D. Del. Case No. 12-13290). Kevin Scott Mann, Esq., at Cross & Simon LLC, represents the Debtor. COLONY BEACH: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Colony Beach and Tennis Club, Inc. P.O. Box 8130 Longboat Key, FL 34228 Bankruptcy Case No.: 13-00348 Chapter 11 Petition Date: January 11, 2013 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Michael C. Markham JOHNSON POPE BOKOR RUPPEL & BURNS, LLP P.O. Box 1368 Clearwater, FL 33757 Tel: (727) 461-1818 Fax: (727) 443-6548 E-mail: mikem@jpfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed for Chapter 11: Entity Case No. ------ -------- Colony Beach, Inc. 13-00350 Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 Resorts Management, Inc. 13-00354 Assets: $0 to $50,000 Debts: $10,000,001 to $50,000,000 The petition was signed by Murray J. Klauber, president. A. A copy of Colony Beach and Tennis Club's list of its 20 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/flmb13-00348.pdf B. A copy of Colony Beach's list of its 10 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/flmb13-00350.pdf C. A copy of Resorts Management's list of its 20 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/flmb13-00354.pdf CONSTRUCTORA DE HATO: Has Until Jan. 27 to File Ch. 11 Plan ----------------------------------------------------------- The Hon. Brian K. Tester of the U.S. Bankruptcy Court for the District of Puerto Rico extended until Jan. 27, 2013, Constructora De Hato Rey Incorporada's time to file a Chapter 11 Plan and an explanatory Disclosure Statement. The Debtor has undertaken extensive work for the completion of its Plan and Disclosure Statement. The Debtor is in the process of allowing its Secured Creditors to examine its collateral. The Debtor is also contemplating the possibility of having to include a liquidation of Debtor's assets as part of its Plan and Disclosure. San Juan, Puerto Rico-based Constructora De Hato owns parcels of land in Puerto Rico with an aggregate value of $1.82 million. It filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-02876-11) in Old San Juan, Puerto Rico, on April 13, 2012. The petition was signed by Waldemar Carmona Gonzalez, president. The Debtor is represented by Charles Alfred Cuprill, Esq., at Charles A. Curpill, PSC Law Office, in San Juan. Luis R. Carrasquillo & Co., PSC, serves as financial consultant. In its amended schedules, the Debtor disclosed $10,701,724 in assets and $6,847,693 in liabilities. COMPOSITE TECHNOLOGY: Plan Exclusivity Period Extended to March 11 ------------------------------------------------------------------ Composite Technology Corporation sought and obtained an extension until March 11, 2013, of the deadline to file its Chapter 11 plan and disclosure statement. The period within which the Debtors have the exclusive right to solicit acceptances to such plans is extended to May 13, 2013. Headquartered in Irvine, California, Composite Technology Corporation (CTC) -- http://www.compositetechcorp.com/-- is a publicly traded company that owns all of the common stock of CTC Cable Corporation and Stribog, Inc. CTC Cable manufactured and marketed innovative energy efficient renewable energy products for the electrical utility industry. Stribog operated a wind turbine products business that was sold to Daewoo Shipbuilding and Marine Engineering on Sept. 4, 2009, for US$32.2 million in cash. CTC Renewables is a dormant company. Composite Technology filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 11-15058) on April 10, 2011, with Judge Mark S. Wallace presiding over the case. The Debtor's bankruptcy case was reassigned to Judge Scott C. Clarkson on April 13, 2011. BCC Advisory Services LLC, BCC Ho1dco LLC's FINRA registered Broker/Dealer, serves as investment banker to provide exclusive equity financing services and debt financing services. Composite Technology disclosed US$5,855,670 in assets and US$12,395,916 in liabilities as of the Chapter 11 filing. CTC Cable Corporation also filed for Chapter 11 (Bankr. C.D. Calif. Case No. 11-15059) on April 10, 2011. Stribog, Inc. (Bankr. C.D. Calif. Case No. 11-15065) filed for Chapter 11 protection on April 11, 2011. CTC Renewables Corp., a dormant company (Bankr. C.D. Calif. Case No. 11-15130) filed for Chapter 11 protection on April 12, 2011. The cases are jointly administered, with Composite Technology as the lead case. Garrick A. Hollander, Esq., Jeannie Kim, Esq., Kavita Gupta, Esq., Paul J. Couchot, Esq., and Richard H. Golubow, Esq., at Winthrop Couchot PC, in Newport Beach, Calif.; and Sean A. Okeefe, at Okeefe & Associates Law Corporation, in Newport Beach, Calif., serve as the Debtors' bankruptcy counsel. Peter C. Anderson, the U.S. Trustee for Region 16, appointed five members to the official committee of unsecured creditors in the Debtor's cases. Celina M. Munoz, Esq., Emily Ma, Esq., Katherine C. Piper, Esq., and Robbin L. Itkin, Esq., at Steptoe & Johnson LLP, in Los Angeles, Calif., represents the Committee. On Aug. 15, 2011, the Debtors closed on the sale of substantially all assets of the Debtors' estates to CTC Acquisition Corp., a Delaware corporation. As a result of the sale, the Debtors no longer operated their businesses and all of their employees either resigned or were terminated, and most of them were employed by the Buyer. After the closing, the Debtors promptly moved to hire Brian Weiss, as the CRO, to wind down the Debtors' business affairs, including recovering money for the estate's creditors and resolving disputes among the creditors. CORNERSTONE HEALTHCARE: S&P Withdraws 'B' Corporate Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B' corporate credit rating on U.S.-based Cornerstone Healthcare Group Holding Inc. at the company's request. At the same time, S&P withdrew its 'B' issue-level rating and '3' recovery rating on Cornerstone's senior secured debt. COUNTRYWIDE FIN'L: BofA Fighting to Avoid "Toxic" Liabilities ------------------------------------------------------------- Bank of America Corp. has been fighting in a New York court to avoid as much as $3 billion in liability for defaulted Countrywide mortgage securities, but the bank's courtroom adversary, bond insurer MBIA Inc., is wielding the bank executives' own words in its attack, Christian Berthelsen of The Wall Street Journal reported. In a two-day hearing on Jan. 9 and 10, Bank of America argued that it structured its 2008 deal with Countrywide Financial Corp. in a way that allowed it to avoid liability for certain Countrywide assets, branded "too toxic" in one internal bank email, WSJ related. MBIA maintained the deal was a merger in which Bank of America absorbed 19,000 Countrywide employees, technology and operations to enhance its mortgage capabilities, WSJ also related. The insurer introduced videotaped deposition testimony from executives including former Chief Executive Ken Lewis and current CEO Brian Moynihan to bolster its case. "The objective was to present a common set of products and a common brand to our combined set of customers," Mr. Lewis said in an April 2012 deposition aired in New York State Supreme Court in lower Manhattan. "We combined operations," Mr. Moynihan said in his own May 2012 deposition played in court. "I don't know what [Countrywide] businesses are in what legal entities." Barbara Desoer, head of Bank of America's mortgage business, said the Countrywide acquisition made the bank "America's leading mortgage provider," according to comments she made at a September 2008 investor presentation cited in court, WSJ pointed out. According to WSJ, the courtroom battle before Judge Eileen Bransten shows Bank of America's hangover from the Countrywide acquisition and the era of easy credit is far from over, despite the $44 billion -- and counting -- the bank has paid in litigation expenses, payouts and reserves as a result of deals to acquire Countrywide and brokerage Merrill Lynch & Co. in 2008. The hearing ended Jan. 10 afternoon, and Judge Bransten took the matter under submission. It isn't clear when she will rule on the matter, WSJ said. Bank of America has accepted responsibility for other aspects of Countrywide, as recently as Monday entering an $11.6 billion deal with Fannie Mae to resolve disputes over Countrywide mortgages the agency said didn't meet proper standards. Case observers say a judicial finding that Bank of America is liable for Countrywide could expose the bank to billions more in claims, WSJ related. "We have established a pattern of settling legacy matters with reasonable parties, including other insurers, when it is in the best interest of our shareholders," a spokesman for Bank of America told WSJ. "That remains our approach." During the proceeding, Bank of America has maintained that the Countrywide deal was structured as a purchase of assets rather than a merger, and that it paid a fair value of more than $45 billion for the assets it acquired, leaving plenty of cash and viable assets in what remained of Countrywide to satisfy creditors' claims, WSJ related. "Bank of America was not liable for Countrywide's debts when it bought Countrywide's assets," Walter Dellinger, Esq., -- wdellinger@omm.com -- a partner at O'Melveny & Myers in Washington, D.C., who is representing the bank, said in court, according to WSJ. As to whether Bank of America intentionally designed the deal that way to avoid liability, Mr. Dellinger said: "Of course it did." Philippe Selendy, Esq., -- philippeselendy@quinnemanuel.com -- a New York partner with Quinn Emanuel Urquhart & Sullivan, representing MBIA, said much of the $45 billion paid into Countrywide was funneled to Bank of America's preferred creditors, including $5.5 billion that wound up in a unit that was merged back into Bank of America's banking subsidiary, WSJ related. The assets that remained, he said, were dwarfed by Countrywide's liabilities, and the net interest income generated by the assets was more than consumed by legal fees alone. "What MBIA seeks here is the ordinary," Mr. Selendy said, WSJ cited. "When two businesses combine, liabilities don't get left behind." 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. CSD LLC: Court Approves Nathan & Associates as Real Estate Broker ----------------------------------------------------------------- CSD LLC sought and obtained permission from the U.S. Bankruptcy Court to employ Nathan & Associates, Inc., and Cheryl Kypreos as real estate broker. The firm will render brokerage services regarding the Debtor's property, including developing a detailed package of materials regarding the Debtor's Property, marketing the Property through various formats, coordinating visits and investigation of the Property by prospective purchasers, assisting the Debtor with the auction, possibly assisting with locating financing sources, generally assisting the CRO with his efforts and other efforts related to a sale. Cheryl Kypreos attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm will be compensated on a fee basis: a. $25,000 marketing expense, paid upon Court approval of retention; b. $100,000 success fee if an insider purchases the property; and c. $100,000 success fee, plus 3% commission if a non-insider prevails at the auction of the property. Las Vegas, Nev.-based CSD, LLC, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-21668) on Oct. 12, 2012, estimating $50 million to $100 million in assets and $10 million to $50 million in debts. The petition was signed by Steven K. Kennedy, manager of CSD Management, LLC, manager. The Debtor owns 37.82 acres of land, seven houses, and an equestrian facility, all located at 6629 S. Pecos Road, Las Vegas, Nevada. The Debtor purchased the property from Mr. Wayne Newton and his wife, Kathleen, for $19.5 million to develop and operate a museum/tourist attraction honoring the life and career of Wayne Newton. Situated on the purchased property is the current home of the Newtons, known as "Casa de Shenandoah", which was to be used to showcase Wayne Newton's memorabilia. The museum remains unopened. DLH, LLC, which holds a 70% interest in the Debtor, contributed nearly $60 million towards development of the museum. DLH is a Nevada limited liability company, and its members are Lacy Harber and Dorothy Harber. Plans called for contributing $2 million toward the construction of a new home for Mr. Newton on the acreage. The new home hasn't been built, so Mr. Newton still lives in the existing home, paying minimal rent. While the Debtor has made substantial expenditures towards the development of the Newton Museum, the Debtor and the Newtons have been involved in certain disputes regarding the development of the museum. The Debtor in May 2012 filed a lawsuit in Nevada state court for fraud, civil conspiracy, and breach. The Newtons filed counterclaims. Because of the deteriorating relationship of the parties, it appears that it is no longer feasible for the parties to move forward with the development of the museum. On Aug. 9, 2012, the Debtor's committee members held an emergency meeting and voted to dissolve the Debtor. Though the Debtor has sought approval in the state court proceedings to dissolve, that matter is not scheduled to be heard until May 2013. Because the Debtor is out of money and options, and because the Debtor's prepetition secured lender, Neva Lane Acceptance, LLC, is unwilling to lend any additional funds to the Debtor on a prepetition basis, the majority of the committee members voted in favor of the bankruptcy filing. Although the Debtor is out of cash, it claims that it has substantial equity in its property. The Debtor has decided that a sale of the Debtor's property pursuant to Section 363 of the Bankruptcy Code, followed by the filing of a plan of liquidation, is the Debtor's best option for maximizing the value of the property and maximizing the return to the Debtor's creditors and interest holders. James D. Greene, Esq., at Greene Infuso, LLP, in Las Vegas, represents the Debtor. The Debtor's CRO is Odyssey Capital Group, LLC. CSD LLC: Plan Exclusivity Period Extended to June 11 ---------------------------------------------------- At the behest of CSD LLC, the U.S. Bankruptcy Court extended the Debtor's exclusive period to file a plan of reorganization through and including June 11, 2013. The Court extended the Debtor's exclusive period to solicit acceptances on the plan through and including Aug. 9, 2013, provided the Debtor files its plan by no later than June 11. Las Vegas, Nev.-based CSD, LLC, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-21668) on Oct. 12, 2012, estimating $50 million to $100 million in assets and $10 million to $50 million in debts. The petition was signed by Steven K. Kennedy, manager of CSD Management, LLC, manager. The Debtor owns 37.82 acres of land, seven houses, and an equestrian facility, all located at 6629 S. Pecos Road, Las Vegas, Nevada. The Debtor purchased the property from Mr. Wayne Newton and his wife, Kathleen, for $19.5 million to develop and operate a museum/tourist attraction honoring the life and career of Wayne Newton. Situated on the purchased property is the current home of the Newtons, known as "Casa de Shenandoah", which was to be used to showcase Wayne Newton's memorabilia. The museum remains unopened. DLH, LLC, which holds a 70% interest in the Debtor, contributed nearly $60 million towards development of the museum. DLH is a Nevada limited liability company, and its members are Lacy Harber and Dorothy Harber. Plans called for contributing $2 million toward the construction of a new home for Mr. Newton on the acreage. The new home hasn't been built, so Mr. Newton still lives in the existing home, paying minimal rent. While the Debtor has made substantial expenditures towards the development of the Newton Museum, the Debtor and the Newtons have been involved in certain disputes regarding the development of the museum. The Debtor in May 2012 filed a lawsuit in Nevada state court for fraud, civil conspiracy, and breach. The Newtons filed counterclaims. Because of the deteriorating relationship of the parties, it appears that it is no longer feasible for the parties to move forward with the development of the museum. On Aug. 9, 2012, the Debtor's committee members held an emergency meeting and voted to dissolve the Debtor. Though the Debtor has sought approval in the state court proceedings to dissolve, that matter is not scheduled to be heard until May 2013. Because the Debtor is out of money and options, and because the Debtor's prepetition secured lender, Neva Lane Acceptance, LLC, is unwilling to lend any additional funds to the Debtor on a prepetition basis, the majority of the committee members voted in favor of the bankruptcy filing. Although the Debtor is out of cash, it claims that it has substantial equity in its property. The Debtor has decided that a sale of the Debtor's property pursuant to Section 363 of the Bankruptcy Code, followed by the filing of a plan of liquidation, is the Debtor's best option for maximizing the value of the property and maximizing the return to the Debtor's creditors and interest holders. James D. Greene, Esq., at Greene Infuso, LLP, in Las Vegas, represents the Debtor. The Debtor's CRO is Odyssey Capital Group, LLC. DATALOK III: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Datalok III Orange County/Long Beach Limited Partnership 5990 Malburg Way Los Angeles, CA 90058 Bankruptcy Case No.: 13-10922 Chapter 11 Petition Date: January 11, 2013 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Sandra R. Klein Debtor's Counsel: Douglas F. Galanter, Esq. NORRIS AND GALANTER LLP 555 W. 5th Street, 31st Floor Los Angeles, CA 90013 Tel: (213) 996-8477 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb13-10922.pdf The petition was signed by Takashi Nakamura, president of general partner. DEWEY & LEBOEUF: Former Dubai Partners Cut Clawback Deal -------------------------------------------------------- Brian Mahoney of BankruptcyLaw360 reports that two former partners in the Dubai, United Arab Emirates, offices of Dewey & LeBoeuf LLP have agreed to drop approximately $1.8 million in severance claims in exchange for a potential reduction of their clawback obligations to the bankrupt law firm, the firm told a New York bankruptcy court Monday. Gavin B. Watson and Chris P. Sioufi, who now work in the Dubai office of Dechert LLP, agreed to withdraw their severance claims from the liquidation proceedings of Dewey?s Dubai offices, the report says. 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. DRYSHIPS INC: Sells Two Tankers Under Construction -------------------------------------------------- DryShips Inc., through its majority owned subsidiary, Ocean Rig UDW Inc., or Ocean Rig, of offshore deepwater drilling services, on Jan. 14 announced the sale, via novation, of two of its tankers under construction at Samsung Heavy Industries, Esperona and Blanca, to a third-party buyer. Under the terms of the two novation agreements dated December 27, 2012, the buyer assumes all rights, benefits, liabilities and obligations under both shipbuilding contracts, in exchange for cash consideration of $21.4 million (that is, $10.7 million for each vessel) paid by the Company to the Buyer. As a result of this transaction, Dryships is released from all its obligations under the shipbuilding contracts, both as the contracting party and as a guarantor. George Economou, Chairman and Chief Executive Officer of the Company, commented: "As we have stated recently, the reduction or elimination of CAPEX has become a top priority for the Company. With the sale of these vessels, Dryships has reduced its CAPEX by approx. $101 million, after taking into consideration the payment of $21.4 million to the Buyer of the vessels." About DryShips Inc. Based in Greece, DryShips Inc. -- http://www.dryships.com/-- -- owns and operates drybulk carriers and offshore oil deep water drilling units that operate worldwide. As of Sept. 10, 2010, DryShips owns a fleet of 40 drybulk carriers (including newbuildings), comprising 7 Capesize, 31 Panamax and 2 Supramax, with a combined deadweight tonnage of over 3.6 million tons and 6 offshore oil deep water drilling units, comprising of 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips's common stock is listed on the NASDAQ Global Select Market where it trades under the symbol "DRYS". On Nov. 25, 2010, DryShips Inc. entered into a waiver letter for its US$230.0 million credit facility dated Sept. 10, 2007, as amended, extending the waiver of certain covenants through Dec. 31, 2010. The Company reported a net loss of US$47.28 million in 2011, compared with net income of US$190.45 million during the prior year. The Company's balance sheet at Dec. 31, 2011, showed US$8.62 billion in total assets, US$4.68 billion in total liabilities, and US$3.93 billion in total equity. DUBAI GROUP: Settles Rift Over Restructuring; Banks Sell Back Debt ------------------------------------------------------------------ Nicolas Parasie, writing for Dow Jones Newswires, reports that two people familiar with the matter said Dubai Group and four international banks have agreed to resolve their legal differences in a push to finish a $10 billion debt restructuring. Commerzbank, Royal Bank of Scotland, Standard Bank and Egypt's Commercial International Bank in September took legal action against Dubai Group after nearly two years of fruitless debt negotiations. The two sources told Dow Jones that, pursuant to the settlement, the four banks have agreed to sell their loans to Dubai Group at 18.5 cents on the dollar and drop their legal action in the London Court of International Arbitration. The offer relates to a $1.5 billion Islamic syndicated loan to Dubai Group in 2008 that includes 18 other banks. All remaining banks involved in the loan need to approve the new offer to the four banks for it to go through, the report says. "There has been an agreement between the dissenting banks and Dubai Group. That agreement is now being put to the other members of the same syndicate," said one of the people familiar with the matter, according to the report. The report recounts Dubai Group began restructuring talks with bank creditors last year; about $6 billion of the debt under restructuring is owed to banks, while the remainder is intercompany loans. According to Dow Jones, a second person familiar with the matter said the recent developments illustrate how international lenders were keen on exiting their loans earlier, while local lenders, often bearing larger exposures to government-related entities such as Dubai Group, were pushing to have the debt repayments extended over longer periods to allow them to delay the full effect of the restructuring instantly on their financial position. Dubai Group is a division of Dubai Holding, a conglomerate owned by Dubai's ruler, Sheikh Mohammed bin Rashid al Maktoum. Dubai Group is a holding company with interests in property and financial services. EASTMAN KODAK: $525M Digital Imaging Patent Sale Gets Green Light ----------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that a New York bankruptcy judge on Friday approved Eastman Kodak Co.?s $525 million sale of its digital imaging patents portfolio to Apple Inc. and other top technology companies, a significant step in the company?s efforts to emerge from bankruptcy. U.S. Bankruptcy Judge Allan L. Gropper greenlighted the transaction, which was announced in December and includes buyers like Amazon.com Inc., Microsoft Corp. and Samsung Electronics Co., the report said. The report noted that the proceeds of the $525 million are less than the amount estimated at the beginning of the case. 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. EASTMAN KODAK: Trustee Slams Nixon Peabody's Unexplained Billing ---------------------------------------------------------------- Brian Mahoney of BankruptcyLaw360 reported that the U.S. trustee in Eastman Kodak Co.'s bankruptcy objected Wednesday to the company's proposed retention of Nixon Peabody LLP as special counsel, arguing that the firm's undisclosed billing rates are unreasonable and violate the Bankruptcy Code. Nixon Peabody currently serves as special litigation counsel to the bankrupt photography company, and applied in November to retroactively change that designation after exceeding the monthly fee cap of $50,000 in September and October, according to U.S. Trustee Tracy Hope Davis, the report related. 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. ENTERTAINMENT CONCEPTS: Court Confirms Bankruptcy Plan ------------------------------------------------------ Bankruptcy Judge Frank L. Kurtz confirmed the First Amended Plan of Reorganization filed by Entertainment Concepts LLC on Dec. 14, 2012. The Plan proposes to pay secured and priority claims in full, and to pay general unsecured creditors in full, as set forth in the Plan. The Court approved the First Amended Disclosure Statement explaining the Plan on Nov. 1, 2012. The United States of America, Internal Revenue Service, sought dismissal or conversion of the case to Chapter 7. The IRS also objected to the Plan. The IRS and the Debtor resolved their dispute based on the treatment of the claims of the IRS as set forth in the Plan. Columbia State Bank also objected to confirmation of the Plan. CSB and the Debtor resolved the objection filed by CSB based on the treatment of the claims of CSB as set forth in the Plan. A copy of the Court's Dec. 21, 2012 Findings of Fact and Conclusions of Law is available at http://is.gd/9WW6Akfrom Leagle.com. Entertainment Concepts LLC d/b/a Marquee Lounge, filed for Chapter 11 bankruptcy (Bankr. E.D. Wash. Case No. 12-00244) on Jan. 20, 2012, listing under $1 million in assets and debts. Bruce K. Medeiros, Esq., at Davidson Backman Medeiros PLLC, represents Entertainment Concepts. GORDON CARUK: BofA Wins Summary Judgment in Arkansas Suit --------------------------------------------------------- In the case, BANK OF AMERICA, N.A., Plaintiff, v. CARUK HOLDINGS ARKANSAS, LLC; DENISE L. CARUK; and GORDON C. CARUK, Defendants. Civil No. 11-2096 (W.D. Ark.), District Judge Jimm Larry Hendren granted the bank's motion for summary judgment against Gordon C. Caruk and Denise L. Caruk. Bank of America filed the action on May 27, 2011, seeking judgment on a financial obligation and the foreclosure of a lien on real property securing the obligation upon the defendants' failure to pay the judgment. The real property securing the obligation is owned by Caruk Holdings Arkansas, LLC, and that Gordon and Denise Caruk are personal guarantors of the obligation due the bank. In its motion for summary judgment, the bank seeks judgment in rem in the amount of $86,620.52 (representing $72,178.48 in unpaid principal, $13,860.26 in accrued and unpaid interest through Dec. 6, 2012, $561.78 in prepayment premium, and $20 in release fees), with interest continuing to accrue at a legal rate of $14.24 per day. The Caruks failed to file a response to the motion, and the time for responding has passed. The bank also seeks its attorneys' fees, expenses, and other collection costs incurred in this action, for a total amount of $56,764.35 (which includes its attorneys' fees and expenses resulting from the Caruks' failure to appear for their scheduled depositions). The Court will conduct a hearing on the issue of attorneys' fees and costs on Jan. 28 at 1:30 p.m. A copy of the Court's Jan. 7, 2013 Memorandum Opinion is available at http://is.gd/rXZohXfrom Leagle.com. The Caruks proceed pro se in this matter, and Caruk Holdings is without representation. On Aug. 28, 2012, the Court entered its Memorandum Opinion and Order granting summary judgment against Caruk Holdings. The Order directed the bank to seek summary judgment against the Caruks, as well, before the Court would enter the judgment. A copy of the Aug. 28 ruling is available at http://is.gd/NVOIkP from Leagle.com. In light of the automatic stay pending the disposition of the Caruks' bankruptcy proceedings, the lawsuit was administratively terminated Oct. 9, 2012. Thereafter, the bank obtained relief from the automatic stay, and the lawsuit was reopened on Dec. 5, 2012. A copy of the Court's Dec. 5 Order is available at http://is.gd/G8BE1afrom Leagle.com. The bank originally extended the loan to Stone Solutions, LLC, in 2008. The original principal amount of the Loan Agreement was $80,000, bearing interest at a rate of 7.100% per annum. Stone Solutions promised to pay in monthly installments the outstanding balance of the Loan Agreement plus interest, beginning Aug. 3, 2008, and ending on July 3, 2023. Stone Solutions also granted to the bank an interest in specific real property located in Mansfield, Sebastian County, Arkansas. The Real Property Collateral was subsequently transferred from Stone Solutions to Caruk Holdings by warranty deed on Nov. 10, 2008. The Real Property Collateral was subsequently transferred from Caruk Holdings to the Caruks by warranty deed on Aug. 10, 2012. The Caruks irrevocably and unconditionally guarantee the payment and performance of Stone Solution's obligations to the bank as and when due. On May 5, 2011, the bank sent a notice of default to Stone Solutions, Caruk Holdings, Caruk Holdings Arizona, and the Caruks at their last known addresses. The bank immediately exercised its right to accelerate the debt represented by the Loan Documents. Diana Borgognoni Snyder, Esq. -- dborgognoni@wlj.com -- at Wright, Lindsey & Jennings, LLP, represents the bank. The Caruks filed a voluntary Chapter 11 petition (Bankr. D. Ariz. Case No. 12-19096) on Aug. 27, 2012. GREAT PLAINS EXPLORATION: Plan Solicitation Extended to March 11 ---------------------------------------------------------------- Great Plains Exploration sought and obtained approval from the U.S. Bankruptcy Court an extension until March 11, 2013, of the period during which the Debtor has the exclusive right to solicit acceptances of its Chapter 11 Plan. About John D. Oil, Great Plains Exploration and Oz Gas Mentor, Ohio-based John D. Oil & Gas Co., is in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. The Company has 58 producing wells. The Company also has one self storage facility located in Painesville, Ohio. The self-storage facility is operated through a partnership agreement between Liberty Self-Stor Ltd. and the Company. John D. Oil's affiliated entities -- Oz Gas, LTD. and Great Plains Exploration LLC -- filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11, 2012. Two days later, John D. Oil filed its own Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063). On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A., dba Charter One, a receiver was appointed for all three corporate Debtors, in the United States District Court for the Northern District of Ohio at case No. 11-cv-2089-CAB. District Judge Christopher A. Boyko issued an order appointing Mark E. Dottore as receiver. The Receivership Order was appealed to the Sixth Circuit Court of Appeals on Dec. 19, 2011 and the appeal is currently pending. Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. John D. Oil's balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. The petitions were signed by Richard M. Osborne, CEO. The United States Trustee said a committee under 11 U.S.C. Sec. 1102 has not been appointed because no unsecured creditor responded to the U.S. Trustee's communication for service on the committee. GRUBB & ELLIS: Creditors Voting on Plan, May Get Less Than 5% ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors of Grubb & Ellis Co., the real estate broker whose business was sold in April, can vote on the liquidating Chapter 11 plan where they are shown a predicted recovery of 1.7% to 4.7%. According to the report, the U.S. Bankruptcy Court in Manhattan approved explanatory disclosure materials last week. The confirmation hearing for approval of the plan will take place March 6. The report relates that the disclosure statement shows that $313 million in unsecured claims were filed. Eventually, the company expects the claims will be reduced to the range of $86 million to $102.5 million. Not all creditors, even those owed money, will be receiving distributions. Indeed, some of them may end up paying back more than they receive. The report notes that the disclosure statement contains a list of more than 400 creditors who can be sued for having received preferences, or payments within 90 days of bankruptcy. Creditors' predicted recovery does not include proceeds from preference suits, according to the disclosure statement. "The Plan provides that on and after the Effective Date, all assets and liabilities of the Debtors shall be treated as though they were merged into one for all Plan purposes, including voting, Confirmation and distribution pursuant to the Plan. Multiple facts support consolidation of the Debtors for Plan purposes. Prior to the Petition Date, the Debtors shared a centralized cash management system and also shared common upper-level management and directors. The Debtors conducted business through a centralized cash management system, and aside from client trust funds, all monies were ultimately controlled from one general account. Likewise, each of the operating Debtors were obligated under the Senior Secured Credit Facility. The Debtors also filed consolidated tax returns. After the Petition Date, the Debtors assets were sold, in total, to BGC. There was no allocation of the purchase price to individual Debtor entities. Moreover, the $10,000,000 component of the purchase price attributable to an advance on a sharing of potential litigation proceeds cannot be allocated among individual Debtors' estates," BankruptcyData related, citing court papers. About Grubb & Ellis Grubb & Ellis Company -- http://www.grubb-ellis.com/-- is a commercial real estate services and property management company with more than 3,000 employees conducting throughout the United States and the world. It is one of the oldest and most recognized brands in the industry. Grubb & Ellis and 16 affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-10685) on Feb. 21, 2012, to sell almost all its assets to BGC Partners Inc. The Santa Ana, California-based company disclosed $150.16 million in assets and $167.2 million in liabilities as of Dec. 31, 2011. Judge Martin Glenn presides over the case. The Debtors have engaged Togut, Segal & Segal, LLP as general bankruptcy counsel, Zuckerman Gore Brandeis & Crossman, LLP, as general corporate counsel, and Alvarez & Marsal Holdings, LLC, as financial advisor in the Chapter 11 case. Kurtzman Carson Consultants is the claims and notice agent. BGC Partners, Inc., and its affiliate, BGC Note Acquisition Co., L.P., the DIP lender and Prepetition Secured Lender, are represented in the case by Emanuel C. Grillo, Esq., at Goodwin Procter LLP. On March 27, 2012, the Court approved the sale to BCG. An auction was cancelled after no rival bids were submitted. Pursuant to the term sheet signed by the parties, BGC would acquire the assets for $30.02 million, consisting of a credit bid the full principal amount outstanding under the (i) $30 million credit agreement dated April 15, 2011, with BGC Note, (ii) the amounts drawn under the $4.8 million facility, and (iii) the cure amounts due to counterparties. BGC would also pay $16 million in cash because the sale was approved by the March 27 deadline. Otherwise, the cash component would have been $14 million. Approval of the sale was simplified when BGC settled with unsecured creditors by increasing their recovery. Grubb & Ellis Co. was renamed Newmark Grubb Knight Frank following the sale. HANDY HARDWARE: Files for Chapter 11 in Delaware ------------------------------------------------ Handy Hardware Wholesale, Inc., filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-10060) on Jan. 11, 2013. Handy Hardware is engaged in the business of buying goods from vendors and selling those goods at a discounted price to its members for sale in their retail stores. Handy Hardware, which has 300 employees, is operating on a cooperative basis and is completely member-owned, with over 1,000 members. The Debtor's warehouse facilities are located in Houston, Texas, and in Meridian, Mississippi. Trucking services are provided by Averitt Express, Inc., and Trans Power Corp. Its members operate 1,300 retail stores, home centers, and lumber yards. The members are located in 14 states throughout the U.S. as well as in Mexico, South America, and Puerto Rico. The Debtor's principal assets consist of the warehouse facilities, inventory, accounts receivable and equipment. The Debtor typically has on hand $38 million in inventory at cost. The secured debt is held by Wells Fargo Bank, N.A., which is owed $14.6 million, as well as Capital One, North America, which is owed $26 million. "The expansion and construction of the Meridian Warehouse Facility was an important strategic step for the Debtor, but coincided with the worst economic crisis the country has faced in decades. For the fiscal year ending 2011, the Debtor generated sales in excess of $240 million. The increased operational costs and debt service attendant to the Facility drove a loss from operations of $8.4 million. The resulting cash drain and inability to service the debt owed to Capital One led to the decision to close the Facility and migrate the inventory and customer services currently service out of the Facility to the Houston Warehouse Facility" explains Thomas J. Schifanella, Jr., president of the Debtor. On Nov. 7, 2012, each employee who was employed at the Meridian facility was notified that his or her position would be eliminated on or before Jan. 31, 2013. Remaining inventory is expected to be transferred to the Houston facility by Feb. 15, 2013. The Debtor intends to utilize the bankruptcy process to continue its plan to right-size its operations, restructure its indebtedness to Capital One, and emerge from Chapter 11 through a consensual plan of reorganization, while simultaneously providing the services to its members, and timely meeting its postpetition obligations to vendors and others. The Debtor projects it will achieve break even operations by April 1, 2013. First Day Motions On the first day of the case, the Debtor filed a variety of motions and applications, including requests to: -- employ Donlin, Recano & Company as claims and noticing agent; -- maintain its existing cash management system and existing bank accounts with Wells Fargo; -- pay wages and benefits of employees so as to avoid risk losing a significant portion of its workforce; -- pay prepetition taxes payable to various federal, state and local taxing authorities; -- make payments with respect to insurance policies of up to $111,477 on account of any prepetition premiums and fees; -- set procedures for compensation and reimbursement of expenses of professionals; -- prohibit utilities from discontinuing services; and -- obtain DIP financing from Wells Fargo. HANDY HARDWARE: Proposes DIP Financing From Wells Fargo ------------------------------------------------------- Handy Hardware Wholesale, Inc., seeks approval of a secured, first-priority debtor-in-possession financing facility from Wells Fargo Bank, N.A., which requires the Debtor to exit bankruptcy within six months. The DIP Credit Facility allows the Debtor to draw in amount not to exceed the maximum revolver amount of (i) prior to final approval of the DIP financing, $25.1 million inclusive of the prepetition debt to Wells Fargo, and (ii) after final approval, $30 million inclusive of prepetition debt owed to Wells Fargo. The Debtor's prepetition secured debt is held by Wells Fargo, which is owed $14.6 million, as well as Capital One, North America, which is owed $26 million. The Debtor will grant adequate protection to Wells Fargo on account of its prepetition liens and security interests. All obligations in the DIP facility are allowed superpriority administrative claim status. Capital One will receive a second priority lien and security interest to Wells Fargo's prepetition first lien collateral, and a superpriority allowed claim pursuant to 11 U.S.C. Section 507(b) junior to the claims of Wells Fargo and the carve-out. Discussions on the DIP financing were conducted with Wells Fargo, U.S. Bank, N.A. and PNC Bank, N.A. But the talks with investors and lenders other than Wells Fargo ultimately proved fruitless since the Debtor's balance sheet was too highly leveraged and the Debtor had very little, if any, unencumbered collateral to provide security for additional financing, says Thomas J. Schifanella, Jr., president of the Debtor. Mr. Schifanella says a minimum cash availability of $2 million during the first few weeks of the Chapter 11 case is the minimum amount of cash availability necessary to operate the business in a prudent fashion. The unpaid principal amount of each line of credit advance evidenced by the revolving note will accrue interest at a rate equal to the Daily Three Month LIBOR, plus 7% per annum. The DIP facility will mature 180 days from the Petition Date. But failure to meet these milestones will constitute events of default: -- failure of the Debtor to file a plan of reorganization on or before 60 days following the Petition Date; -- failure to commence a hearing on the Disclosure Statement on or before 90 days following the Petition Date; -- failure to commence a hearing on the confirmation of the plan on or before 120 days following the Petition Date; and -- failure to confirm the Plan on or before 175 days following the Petition Date, and have the Plan go effective on or before 180 days following the Petition Date; HANDY HARDWARE: Seeks to Hire MCA Financial as Advisor ------------------------------------------------------ Handy Hardware Wholesale, Inc., seeks approval from the Bankruptcy Court to hire MCA Financial Group, LTD, as financial advisor, nunc pro tunc to the Petition Date. MCA will concentrate its efforts on formulating strategic alternatives and assisting the Debtor in its efforts with regard to a successful reorganization. Compensation will be payable to MCA on an hourly basis, plus reimbursement of necessary expenses. MCA professionals that are likely to represent the Debtor in the case have currently standard hourly rates ranging between $425 per hour for senior managing directors, $350 per hour for managing directors, $295 per hour for directors, $95 per hour for administrative and research personnel. MCA professionals will charge $50 per hour for travel time for professionals. MCA has been retained in the past by Wells Fargo Bank and Wells Fargo Credit to provide services in connection with matters completely unrelated to the Debtor or its estate. Wells Fargo is the DIP lender and the holder of a prepetition first lien debt. About Handy Hardware Handy Hardware Wholesale, Inc., filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-10060) on Jan. 11, 2013. Handy Hardware is engaged in the business of buying goods from vendors and selling those goods at a discounted price to its members for sale in their retail stores. Handy Hardware, which has 300 employees, is operating on a cooperative basis and is completely member-owned, with over 1,000 members. The Debtor's warehouse facilities are located in Houston, Texas, and in Meridian, Mississippi. Trucking services are provided by Averitt Express, Inc., and Trans Power Corp. Its members operate 1,300 retail stores, home centers, and lumber yards. The members are located in 14 states throughout the U.S. as well as in Mexico, South America, and Puerto Rico. HAWKER BEECHCRAFT: Retirees Dispute Termination of Benefits ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Hawker Beechcraft Inc. will face opposition at a hearing on Jan. 17 when seeking court permission to terminate two pension plans for non-union workers. An ad hoc retiree group argues that the court can't allow termination of non-union workers' pension plans while allowing union pension plans to remain alive. Hawker had said that the pension plans were largest impediment to approval of the reorganization at a Jan. 31 confirmation hearing. According to the report, the Jan. 17 hearing is for approval of a settlement with the Pension Benefit Guaranty Corp. allowing a so-called distress termination of the pension plans for salaried workers and nonunion workers in the customer-support arm of the business. The pension plan for hourly workers will be frozen at the year's end. The retired workers, the report relates, contend the court should not allow termination of their benefits without appointing an official retirees' committee to oppose the company's efforts. They also refer to court rulings for the proposition that a buyer's insistence on termination of benefits isn't proper grounds for reducing benefits. The retirees say the law only allows modifying retiree benefits if "any plan of reorganization" would become impossible. Hawker's reorganization plan will give 81.9% of the new stock in return for $921 million of the $1.83 billion owing on the senior secured credit. Unsecured creditors are to receive the remaining 18.9% of the new stock. Hawker's $183 million in 8.5% senior unsecured notes due 2015 last traded on Jan. 8 for 8.25 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. 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%. The Court has approved the Disclosure Statement filed in connection with the company's Joint Plan of Reorganization. HAWKER BEECHCRAFT: Nonunion Retirees Shafted in Deal, Court Told ---------------------------------------------------------------- David McAfee of BankruptcyLaw360 reported that retirees of bankrupt Hawker Beechcraft Inc. objected to a proposed settlement between the aircraft maker and Pension Guaranty Benefit Corp. that would end Hawker Beechcraft?s retirement income plan for nonunion employees, saying the settlement would unfairly keep retirement plans for unionized employees. The objection, filed by HBC Retiree Committee in a New York bankruptcy court, comes just days before a Jan. 17 hearing on approval of a settlement that would eliminate the indebted company?s pension plans for non-unionized salaried employees, the report related. 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. HARRISBURG, PA: Council Members' State Takeover Suit Nixed ---------------------------------------------------------- Matt Fair of BankruptcyLaw360 reported that a Pennsylvania federal judge on Wednesday rejected a suit brought by Harrisburg city council members challenging the constitutionality of the state's takeover of the fiscally troubled capital city, ruling that the plaintiffs did not having standing to pursue their claims. Granting Gov. Tom Corbett's motion seeking dismissal of the suit, U.S. District Judge John Jones III found that members of Harrisburg's city council were barred from bringing the suit under the so-called political subdivision doctrine, the report added. About Harrisburg, Pennsylvania The city of Harrisburg, in Pennsylvania, is coping with debt related to a failed revamp of an incinerator. The city is $65 million in default on $242 million owing on bonds sold to finance an incinerator that converts trash to energy. The Harrisburg city council voted 4-3 on Oct. 11, 2011, to authorize the filing of a Chapter 9 municipal bankruptcy (Bankr. M.D. Pa. Case No. 11-06938). The city claims to be insolvent, unable to pay its debt and in imminent danger of having tax revenue seized by holders of defaulted bonds. Judge Mary D. France presided over the Chapter 9 case. Mark D. Schwartz, Esq. and David A. Gradwohl, Esq., served as Harrisburg's counsel. The petition estimated $100 million to $500 million in assets and debts. Susan Wilson, the city's chairperson on Budget and Finance, signed the petition. Harrisburg said in court papers it is in imminent jeopardy through six pending legal actions by creditors with respect to a number of outstanding bond issues relating to the Harrisburg Materials, Energy, Recycling and Recovery Facilities, which processes waste into steam and electrical energy. The owner and operator of the incinerator is The Harrisburg Authority, which is unable to pay the bond issues. The city is the primary guarantor under each bond issue. The lawsuits were filed by Dauphin County, where Harrisburg is located, Joseph and Jacalyn Lahr, TD Bank N.A., and Covanta Harrisburg Inc. The Commonwealth of Pennsylvania, the County of Dauphin, and Harrisburg city mayor Linda D. Thompson and other creditors and interested parties objected to the Chapter 9 petition. The state later adopted a new law allowing the governor to appoint a receiver. Kenneth W. Lee, Esq., Christopher E. Fisher, Esq., Beverly Weiss Manne, Esq., and Michael A. Shiner, Esq., at Tucker Arensberg, P.C., represented Mayor Thompson in the Chapter 9 case. Counsel to the Commonwealth of Pennsylvania was Neal D. Colton, Esq., Jeffrey G. Weil, Esq., Eric L. Scherling, Esq., at Cozen O'Connor. In November 2011, the Bankruptcy Judge dismissed the Chapter 9 case because (1) the City Council did not have the authority under the Optional Third Class City Charter Law and the Third Class City Code to commence a bankruptcy case on behalf of Harrisburg and (2) the City was not specifically authorized under state law to be a debtor under Chapter 9 as required by 11 U.S.C. Sec. 109(c)(2). Dismissal of the Chapter 9 petition was upheld in a U.S. District Court. That same month, the state governor appointed David Unkovic as receiver for Harrisburg. Mr. Unkovic is represented by the Municipal Recovery & Restructuring group of McKenna Long & Aldridge LLP, led by Keith Mason, Esq., co-chair of the group. Mr. Unkovic resigned as receiver March 30, 2012. HEALTHWAREHOUSE.COM INC: K. Singer Discloses 15% Equity Stake ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Karen Singer and Lloyd I. Miller, III, disclosed that, as of Dec. 31, 2012, they beneficially own 1,971,660 shares of common stock of HealthWarehouse.com, Inc., representing 15% of the shares outstanding. The shares consist of (i) 716,484 shares of common stock, (ii) 189,796 shares of Series B Preferred Stock, with each share of Series B Preferred Stock convertible into 5 shares of common stock, and (iii) convertible notes in the amount of $578,710, which are convertible into shares of Series B Preferred Stock at a price of $9.45 per share, with each share of Series B Preferred Stock convertible into 5 shares of common stock. The reporting persons previously reported beneficial ownership of 1,899,828 common shares or a 14.7% equity stake as of June 28, 2012. A copy of the amended filing is available at: http://is.gd/9NZ7V9 About HealthWarehouse.com HealthWarehouse.com, Inc., headquartered in Florence, Kentucky, is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare e- commerce company that sells brand name and generic prescription drugs as well as over-the-counter ("OTC") medical products. The Company's balance sheet at March 31, 2012, showed $2.5 million in total assets, $5.7 million in total liabilities, redeemable preferred stock of $659,310, and a stockholders' deficit of $3.9 million. The Company reported a net loss of $5.71 million in 2011, compared with a net loss of $3.69 million in 2010. "Since inception, the Company has financed its operations primarily through product sales to customers, debt and equity financing agreements, and advances from stockholders. As of March 31, 2012 and December 31, 2011, the Company had negligible cash and a working capital deficiency of $4,479,571 and $2,404,464, respectively. For the three months ended March 31, 2012, cash flows included net cash used in operating activities of $177,395, net cash used in investing activities of $81,043 and net cash provided by financing activities of $258,401. These conditions raise substantial doubt about the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended March 31, 2012. In the auditors' report accompanying the consolidated financial statement for the year ended Dec. 31, 2011, Marcum LLP, in New York, 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. HONK'S INC.: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Honk's Inc. dba Honk's $1.00 2752 S. Liberty Boise, ID 83709 Bankruptcy Case No.: 13-00054 Chapter 11 Petition Date: January 11, 2013 Court: U.S. Bankruptcy Court District of Idaho (Boise) Judge: Terry L. Myers Debtor's Counsel: Joseph M. Meier, Esq. COSHO HUMPHREY, LLP P.O. Box 9518 800 Park Boulevard, Suite 790 Boise, ID 83707-9518 Tel: (208) 344-7811 Fax: (208) 338-3290 E-mail: jmeier@cosholaw.com Scheduled Assets: $1,696,835 Scheduled Liabilities: $4,206,480 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/idb13-00054.pdf The petition was signed by Darrell Cox, president. HOSTESS BRANDS: Still In Talks to Find Buyers for Smaller Brands ---------------------------------------------------------------- Rachel Feintzeig, writing for Dow Jones Newswires, reports that Hostess Brands Inc. is still negotiating to find a buyer for a half-dozen of its smaller bread brands, a person with knowledge of the matter said. According to the report, Hostess' professionals have said they expect to name about four to six stalking-horse bidders in total, whose separate bids should ultimately mean that all of Hostess's assets find new homes -- though whether they survive is another question. Hostess has brought on Hilco Industrial LLC to help liquidate assets that aren't grabbed in the going-concern portion of the sale process. Hostess has recently announced that Flowers Foods Inc. will serve as stalking horse bidder for most of the Debtor's bread business. Thomasville, Ga.-based Flowers is offering up to $360 million in cash for one pool of assets, which includes five major Hostess bread brands like Wonder Bread and Nature's Pride, 20 plants and 38 depots. Flowers is offering $30 million for Hostess's Beefsteak rye brand. If the Debtors close a sale of those assets to another buyer, Flowers will receive breakup fees of 3.5% -- for example, $1.05 million if it loses out on Beefsteak, Dow Jones notes. A hearing is set for Jan. 25 to consider approval of bidding and sale guidelines. Dow Jones also reports that private-equity firms Apollo Global Management LLC and C. Dean Metropoulos & Co. are in discussions about teaming up on a possible bid for Hostess's cakes business. The discussions don't necessarily mean Apollo and Metropoulos, the owner of the Pabst Blue Ribbon beer brand, will end up bidding on the businesses. But the talks show the wide interest in the brands and their appeal to consumers. HOSTESS BRANDS: Insurers Can't Arbitrate Collateral Request ----------------------------------------------------------- A New York bankruptcy judge denied a motion to compel arbitration of a dispute surrounding Hostess Brands Inc.?s bid to dip into cash collateral related to a workers' compensation and auto insurance program, according to an order filed Wednesday, Maria Chutchian of BankruptcyLaw360 reports. ACE American Insurance Co. and ESIS Inc. had asked the court to deny Hostess' motion to use some of the cash collateral held by the insurers in order to satisfy obligations to the insurers, calling it an attempt to circumvent an arbitration clause, the report relates. 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. HYDROFLAME TECH: Court Approves Gordon Arata as Counsel ------------------------------------------------------- Hydroflame Technologies, LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Gordon, Arata, McCollam, Duplantis & Eagan, LLC, as counsel for the Debtor. Gordon Arata will assist the Debtor in the preparation of the initial papers, which necessitates acquiring familiarity with the Debtor's asset and debt structure, possible restructuring options, the Debtor's corporate structure and personnel. Louis M. Phillips, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Three employees sought to place Baton Rouge, Louisiana-based Hydroflame Technologies LLC in bankruptcy by filing an involuntary Chapter 11 petition (Bankr. M.D. La. Case No. 12-11250) on Aug. 24, 2012. The Hon. Douglas D. Dodd of the U.S. Bankruptcy Court for the Middle District of Louisiana later issued an Order of Relief. Barry W. Miller, Esq., at Heller, Draper, Patrick & Horn, represent the petitioners. The petitioners assert roughly $23,000 in total claims for unpaid wages. The petitioners are James E. Landry of Lafayette, and Mayuri Murugesu and Dinaker Deshini of Baton Rouge. According to http://www.hydroflametech.com/HydroFlame Technologies LLC was established with the sole purpose of commercializing the HydroFlame novel direct contact combustion heat transfer process. In January 2007, a patent application was filed by HydroFlame Technologies in the United States and several other countries to protect the HydroFlame process. On Aug. 24, 2010, HydroFlame Technologies was issued the U.S. Patent No. 7,780,152 and granted a full 20 years of patent protection. The Mexican Patent No. 285319 was issued on April 1, 2011. The Debtor disclosed $1,213,384 in assets and $3,331,980 in liabilities as of the Chapter 11 filing. INTERNATIONAL HOME: FirstBank-P.R. Objects to Plan Disclosures -------------------------------------------------------------- FirstBank-Puerto Rico, the main creditor of International Home Products, Inc., and Health Distillers International, Inc., objects to the consolidated disclosure statement describing the Debtors' plan of reorganization, as it includes inaccurate and misleading statements and does not provide adequate information required under the Plan as required under Sec. 1125(a)(1) of the Code. The Bank cited, among others: 1. Debtors have failed to set forth in the Disclosure Statement projections of future income and expenses to show that the Plan is feasible. 2. The Liquidation Analysis is inadequate. 3. The Bank objects to the proposed treatment of the Bank's secured claim. The only information stated is that Debtors will make monthly payments in the amount of $50,386. 4. The Disclosure Statement does not contain any information or data showing how the amount of $50,386 was calculated or what factors were considered by Debtors to propose such payment. The Debtors also do not indicate how they expect their operations to generate sufficient funds to make said monthly payments. Plan Summary The allowed secured claim of the Bank with an approximate balance of $11.5 million secured by property of the Debtor will be restructured with monthly payments of at least $50,386. Allowed liabilities owed to the Bank secured by accounts receivables and inventory, estimated in the amount of $5,447,113, will receive treatment as an unsecured claim under Class 8 or 9. Holders of general unsecured claims of $5,000 or less (Class 8) will be paid 25% of their claims within the first year from the Plan's Effective Date. General unsecured claims of $5,001 and over (Class 9) will be paid 25% of their claims within 36 months from the Plan's Effective Date. Equity security holders and holders of other interest in the Debtor will not receive any payments under the Plan and all shares will be canceled. New shares will be issued upon post-petition new value provided for the shares of the reorganized debtors. Pre-petition credits in favor of shareholders will not constitute new value. Funding of the Plan will be from the operations of the business, collection of accounts receivable, proceeds from litigation and contribution from the Debtors' president, as needed. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/internationalhome.doc283.pdf On Dec. 11, 2012, the Court ordered the Debtors to amend the Disclosure Statement. A term of sixty days was provided. The Debtors have requested the Court grant them an extension until March 20, 2013, to submit their Amended Disclosure Statement and Amended Plan. The Debtor stated, among others: 1) The Debtor's operations are starting to stabilize after the completion of the transition and turnover of the portfolios to Firstbank. The turnover of the portfolios required considerable amount of resources and work power and hence the Debtor is now commencing to see the outcome of the operations and sales after the portfolio turnover. 2) Many administrative measures and changes have been made by the Debtor after the finalization of the portfolio turnover which have an impact in the projections and operations. The result of these changes and administrative measures will be visible and tangible by the end of February 2013. About International Home Products International Home Products, Inc., is engaged in the sale, financing of "Lifetime" cookware and other kitchenware as well as sale of account receivables in the secondary market. It is the exclusive distributor of "Lifetime" products in Puerto Rico for over 40 years. The Company filed for Chapter 11 bankruptcy protection (Bankr. D.P.R. Case No. 12-02997) on April 19, 2012. Carmen D. Conde Torres, Esq., in San Juan, P.R., serves as the Debtor's counsel. Wigberto Lugo Mendel, CPA, serves as its accountants. The Debtor disclosed $66,155,798 and $43,350,031 in liabilities as of the Chapter 11 filing. Secured lender First-Bank Puerto Rico is represented by Manuel Fernandez-Bared, Esq., and Jane Patricia Van Kirk, Esq., at Toro, Colon, Mullet, Rivera & Sifre, P.S.C. On May 7, 2012, International Home's affiliate, Health Distillers International, Inc., filed a separate Chapter 11 petition (Bankr. D.P.R. Case No. 12-03574. INTERSTATE PROPERTIES: Amends Schedules of Assets and Liabilities ----------------------------------------------------------------- Interstate Properties, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Georgia its amended schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $73,000,000 B. Personal Property $2,403 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $61,604,788 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority $659,692 Claims ----------- ----------- TOTAL $73,002,403 $62,264,480 The Debtor initially disclosed $24,502,404 in total assets and $26,834,876 in total liabilities as of the Petition Date. Interstate Properties, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-76037) in Atlanta on Oct. 17, 2012. George M. Geeslin, Esq., who has an office in Atlanta, Georgia, serves as the Debtor's bankruptcy counsel. J & J CONCRETE: Case Summary & 3 Unsecured Creditors ---------------------------------------------------- Debtor: J & J Concrete and Material, Inc. 46 Crofton Street Kenner, LA 70062 Bankruptcy Case No.: 13-10075 Chapter 11 Petition Date: January 11, 2013 Court: U.S. Bankruptcy Court Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: J. William Starr, Esq. 4501 Dreyfous Avenue Metairie, LA 70006 Tel: (504) 220-2039 Fax: (985) 764-8739 E-mail: jws@jwilliamstarr.com Scheduled Assets: $1,171,000 Scheduled Liabilities: $383,246 A copy of the Company's list of its three top unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/laeb13-10075.pdf The petition was signed by Jimmy Jones, president. J AND Y INVESTMENT: Files Chapter 11 Petition in Seattle -------------------------------------------------------- J and Y Investment, LLC, sought Chapter 11 protection (Bankr. W.D. Wash. Case No. 13-10218) in Seattle on Jan. 10, 2013. The Debtor is a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B) and owns the Federal Way Center Building in 2505 S 320th Street, Federal Way, Washington. The property is valued at $11.43 million and secures an $8.56 million debt to BACM 2004-1. The Debtor disclosed total assets of $13.05 million against total liabilities of $8.65 million in its schedules. New Castle, Washington-based East of Cascade, Inc., has a 100% membership interest in the Debtor. A copy of the schedules of assets and liabilities is available for free at http://bankrupt.com/misc/wawb13-10218.pdf The statement of financial affairs and other missing documents are due Jan. 24. JEFFERSON COUNTY, AL: Finalizes 1st Settlement Deal in Ch.9 Case ---------------------------------------------------------------- Jefferson County has finalized an agreement with Ambac Assurance Corp. as the county works its way through its $4.2 billion bankruptcy, according to the county's top executive, Yann Ranaivo, writing for Birmingham Business Journal, reported. The agreement involves nearly $90 million in debt associated with the construction of the county's courthouse in Bessemer, the report related. The courthouse project involved the creation of a building authority to which the county agreed to allot annual lease payments of $8.3 million to pay off the $89 million in warrants. New York-based Ambac insurers those lease payments, according to the Birmingham News. Jefferson County CEO Tony Petelos said the deal, officially completed Wednesday, will reduce those payments to trustee First Commercial Bank to $1.2 million this year, the report said. The payments will rise to and level off at $5 million in three years, according to the CEO. The CEO said the county expects eliminating the debt by 2036, the report noted. "That gives us a chance because we're struggling now to build back up," Mr. Petelos told the Business Journal. He said the county's financial woes have been exacerbated by the elimination of the occupational tax, a revenue stream he said brought in about $60 million per year. While the negotiated payment rate had already been agreed on, Wednesday marked the finalization of all paperwork needed for the deal, he added. The deal with Ambac wasn't without its detractors, the Business Journal related. Last month, a creditor in the county's bankruptcy protested against the pending agreement between the county and Ambac in bankruptcy court, but the court ruled in the county's favor. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. JERRY'S NUGGET: Court Extends Plan Filing Period Until April 10 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada extended Jerry's Nugget, Inc., and Spartan Gaming LLC's exclusive period to file a proposed plan of reorganization until April 10, 2013, and exclusive period to obtain plan acceptance until June 10, 2013. No further extensions of time to file a proposed plan will be granted. U.S. Bank National Association and 2010-1 CRE Venture, LLC, objected to the requested extensions, raising concerns regarding the Debtors' management, including certain transactions with insiders, its officers' knowledge of the specific financial details and the like, but the Court said that while those concerns are important, they do not diminish the necessity of sufficient time to complete negotiations with other interest parties and to formulate a proposed plan. About Jerry's Nugget and Spartan Gaming Jerry's Nugget Inc., operates Jerry's Nugget, a casino consisting of approximately 87,187 square feet of building area and 24,511 square fee of casino floor space with approximately 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area and a small live pit. As of the Petition Date, the Debtor employed approximately 316 full-time employees and 22 part-time employees. Jerry's Nugget Inc. and affiliate Spartan Gaming LLC sought Chapter 11 protection (Bankr. D. Nev. Lead Case No. 12-19387) in Las Vegas, Vegas, on Aug. 13, 2012. Stamis family-owned Jerry's Nugget has a 9.1-acre casino property in North Las Vegas. The property consists of 87,187 square feet of building area and 24,511 square feet of casino floor space, with 630 slot and video poker machines and 9 table games. Jerry's Nugget also contains a sports book, a keno area, and a small live pit. There are two restaurants the Uncle Angelo's Pizza Joint and Jerry's Famous Coffee shop as well as Uncle Angelo's Bakery, a locals' favorite. Net revenues totaled $22.5 million, including $15.3 million in gaming revenue, in the year ended Dec. 31, 2011. Spartan Gaming owns 12 parcels of real property in Nevada. Two of the parcels provide parking access for Jerry's Nugget. Judge Mike K. Nakagawa presides over the case. Lawyers at Gordon Silver, in Las Vegas, serve as the Debtors' counsel. Jerry's Nugget estimated assets and debts of $10 million to $50 million. Jerry's Nugget said its current going concern value is at least $8 million. Spartan Gaming estimated $1 million to $10 million in assets and debts. The petitions were signed by Jeremy Stamis, president. In its schedules, the Debtors disclosed $12,378,944 in assets and $10,771,442 in liabilities as of the Petition Date. JOHNS-MANVILLE: 2nd Circ. Mulls Travelers' Exit from $510M Deals ---------------------------------------------------------------- Bibeka Shrestha of BankruptcyLaw360 reported that the Second Circuit expressed skepticism Thursday about whether Travelers Indemnity Co. could ditch agreements to pay $510 million to thousands of asbestos victims, despite the insurer's arguments that the settlements were invalidated when part of a bankruptcy court's order was overturned. Travelers insists that the settlements required a final order insulating the company from any future lawsuits involving its handling of asbestos claims against Johns-Manville Corp, the report related. The report added that a bankruptcy court granted Travelers that relief in a 2004 clarifying order. About Johns-Manville Johns-Manville Corp. was, by most sources, the largest manufacturer of asbestos-containing products and the largest supplier of raw asbestos in the United States from the 1920s until the 1970s. Manville sold raw asbestos to manufacturers of asbestos-based products in 58 countries and distributed its own asbestos-based products "across the entire spectrum of industries and employment categories subject to asbestos exposure." As a result of studies linking asbestos with respiratory disease, Manville became the target of a growing number of products liability lawsuits in the 1960s and 1970s. Buckling under the weight of its asbestos liability, Manville filed for Chapter 11 protection on August 26, 1982, before Judge Lifland. To avoid the uncertainty of insurance litigation and to fund its plan of reorganization, Manville sought to settle its insurance claims. Manville obtained in excess of $850,000,000 from settlements with its insurers. The U.S. Bankruptcy Court for the Southern District of New York entered an order confirming the Debtors' Second Amended and Restated Plan of Reorganization on Dec. 22, 1986. KM ASSOCIATES: Wins Confirmation of Chapter 11 Plan --------------------------------------------------- KM Associates, LLC, won confirmation of its Amended Chapter 11 Small Business Plan at a hearing Dec. 19. Through the financial resources of an outside investor, Four S Development LP, the Debtor's Second Amended Plan of Reorganization provides for the sale all of the Debtor's assets and the Principal Real Estate Asset to Kanawha Mall, LLC, free and clear of all liens. The sale of the Debtor's Assets to Kanawha Mall LLC, will be financed by a new loan to Kanawha Mall, LLC, by the Lenders to close contemporaneously with the closing on the sale of the Principal Real Estate Asset. The sale of the Debtor's Assets to Kanawha Mall, LLC, and its closing of the Financing with the Lenders was to be completed by Dec. 31, 2012. The Debtor will not be receiving any cash proceeds from its sale of its Assets to the Kanawha Mall, LLC. However, the Debtor will be receiving consideration in the form of repayment of $18,000,000 of indebtedness owed to the Lenders. Accordingly, the Debtor will not be receiving any sales proceeds with which to make distributions to Class 3, 4, and 5 creditors. Proceeds of the sale will be paid to the Lenders at closing up to the amount of their Allowed Secured Claim. The classification and treatment of claims under the plan are: A. Class 1 (Administrative Claims) will be paid in full. Total claims is estimated to be $27,600. B. Class 2 (Lenders' Secured Claim) estimated to total $24,336,494, will be satisfied through selling its assets to Kanawha Mall, LLC, and then it and the Lenders entering into the refinancing of the secured lien. C. Class 3 (Contractors' Mechanic Lien Claims) estimated to be $891,076, will be satisfied by transferring the Principal Real Estate Asset to Kanawha Mall, LLC, which transfer will be financed by the contemporaneous Financing with the Lenders, the Debtor will not be receiving any proceeds in which to make payment on the Contractors' claims. D. Class 4 (Unsecured Claims of all other unsecured creditors) will not paid. E. Class 5 (Unsecured Claims) consists of claims of ERECT Fund, Highmark Specialty R/E/ Trust, SAK, LLC, Lee O. Hill, Thomas E. Potter, and Frank A. Baer, II, totaling $3,719,937.88, will not be paid. A copy of the amended disclosure statement is available for free at http://bankrupt.com/misc/KMASSOCIATES_ds2a.pdf About KM Associates KM Associates, LLC, filed a Chapter 11 bankruptcy petition (Bankr. S.D. W.Va. Case No. 12-20041) on Jan. 30, 2012. The petition was signed by Donald S. Simpson, managing member. The Debtor, a Single Asset Real Estate under 11 U.S.C. Sec. 101 (51B), disclosed assets of $17.3 million and liabilities of $26.5 million. Bank lenders The CNB Bank, Standard Bank PaSB First United Bank & Trust, Progressive Bank, N.A., Citizens Bank of West Virginia, Inc. and Farmers and Merchants Bank of Western Pennsylvania, National Association, are represented by Arthur M. Standish, Esq., and Kristian J. Jamieson, Esq., at Steptoe & Johnson PLLC. LARSON LAND: Creditor Owyhee Objects to Conversion to Chapter 7 --------------------------------------------------------------- Creditor Owyhee Irrigation District, the holder of a lien claim of $18,596.70 in real property owned by the Debtor, objects to Chapter 11 Trustee John L. Davidson's motion to convert the Chapter 11 case of Larson Land Company to one under Chapter 7, unless and until Trustee pays the balance owed to it, or provides suitable assurance that the Buyer of the property will pay the obligation to it. Ontario Assets was the successful bidder at the auction by way of a credit bid in the amount of $35 million for substantially all of the Debtor's assets, including the real property in Malheur County upon which the lien of the Creditor attached. PNC Equipment Finance, Inc., People's Capital & Leasing Corp., Wells Fargo Equipment Finance, Inc.m and Zions First National Bank also participated as bidders at the auction and were the successful bidders, by way of credit bids, for specific assets of the Debtor securing their claims. In its conversion motion, the Trustee related that substantially all of the Debtor's former assets are no longer property of the estate. The Trustee, through counsel, said that the Debtor no longer has a viable business to be reorganized. ?While a plan of liquidation of the estate's remaining assets could be confirmed, the cost of that process outweighs the likely benefits in this case. The estate's remaining assets can be administered just as efficiently and effectively by a Chapter 7 Trustee as they could be administered by the Trustee or by some form of liquidating agent under a liquidation plan.? About Larson Land Ontario, Oregon-based Larson Land Company LLC, fka Select Onion Co. LLC -- http://www.selectonion.com/-- a privately held agribusiness company that grows, stores, processes and ships bagged onions, fresh processed onions, whole peel onions, IQF onions, and delicious raw breaded hand packed onion rings, filed a Chapter 11 petition (Bankr. D. Idaho Case No. 12-00820) in Boise, Idaho, on April 12, 2012, estimating assets of up to $100 million and debts of up to $500 million. Other than some dry land wheat, as of the Petition Date there were no crops growing on the Debtor's farm land. The Debtor also ceased processing operations following the Petition ate. Brent T. Robinson, Esq., at Robinson, Anthon & Tribe, serves as the Debtor's counsel. Judge Terry L. Myers, at the behest of the U.S. Trustee, ordered the appointment of a Chapter 11 trustee to replace management of the Debtor. Hawley Troxell Ennis & Hawley, LLP and Ball Janik LLP represent John L. Davidson, the Chapter 11 trustee for the Debtor. Robert D. Miller, Jr., U.S. Trustee for Region 18, appointed five unsecured creditors to serve on the Official Committee of Unsecured Creditors. LAUREATE EDUCATION: S&P Affirms 'B' Rating on $1.4BB Secured Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its issue-level rating on Baltimore, Md.-based Laureate Education Inc.'s $1.4 billion senior secured term loan due 2018 ($250 million add-on to the existing issue) at 'B' with a recovery rating of '4', indicating S&P's expectation for average (30% to 50%) recovery for lenders in the event of a payment default. Laureate will use the proceeds for general corporate purposes, including funding of potential acquisitions. At the same time, S&P affirmed its existing ratings on Laureate, including the 'B' corporate credit rating. The rating outlook is stable. "The 'B' corporate credit rating reflects Standard & Poor's expectation that Laureate's debt leverage will remain high, reflecting the company's acquisition orientation and high capital spending to support growth," said Standard & Poor's credit analyst Chris Valentine. "We expect debt leverage to remain in the mid-6x area in 2013. We view Laureate's business risk profile as "weak," because of the risks inherent in undertaking its rapid overseas expansion, which involves considerable execution risk, country risk, and currency risk, in our view. The company has a "highly leveraged" financial profile, in our view, because of high debt leverage and limited cash flow generation relative to total debt burden. Our management and governance assessment is "fair", S&P said. Laureate's goal, broadly, is to acquire international educational institutions, including turnaround situations in their markets, improve their curriculum, and raise enrollment levels. The company periodically acquires underperforming schools operating at low profitability, which can depress EBITDA and its EBITDA margin. S&P views business execution related to Laureate's rapid growth as a key risk. Laureate earns about half of its revenues, and a slightly higher percentage of EBITDA, in Mexico, Chile, and Brazil, where postsecondary enrollment is rising faster than in the U.S. International schools also face a lower degree of regulation than their U.S. for-profit education peers today, but S&P sees a risk that this could change over time. Even without rigorous regulation, Laureate is also exposed to student loan credit risk in Chile and Brazil. LEAR CORP: Launches Financing Actions; Increases Share Repurchase ----------------------------------------------------------------- Lear Corporation on Jan. 14 launched financing actions to increase liquidity and announced an increase in its existing share repurchase program authorization. These actions are expected to improve the Company's financial flexibility, extend debt maturities and significantly increase cash returned to shareholders over the next three years. In addition, the Company affirmed its earnings outlook for 2012 and issued its financial outlook for 2013. The financing actions include the launch of an offering of $500 million in senior unsecured notes due 2023 and a new $1 billion revolving line of credit, which will replace the Company's existing $500 million facility. The final terms of the bond offering will depend upon market conditions and other factors. With respect to the revolving line of credit, the Company presently has commitments for the vast majority of the $1 billion facility and expects to complete the transaction by the end of January. Combined, the proposed financing actions will increase the Company's liquidity by approximately $1 billion. The Company intends to use this liquidity for general corporate purposes, including the redemption of $70 million in aggregate principal amount of its existing notes during 2013, investments in additional component capabilities and emerging markets and share repurchases under our common stock share repurchase program. The Company also announced that it is increasing its existing share repurchase program authorization by $800 million to $1.5 billion and extending the authorization until January 10, 2016. As of December 31, 2012, the Company has repurchased $502 million of its shares. The new repurchase program provides for future share repurchases of approximately $1 billion, including $198 million available under the previous program. "The actions that we are announcing today further improve our capital structure, increase our financial flexibility and allow us to continue to invest in growing and strengthening our business," said Matt Simoncini, Lear's president and chief executive officer. "We also are significantly increasing our share repurchase program at a time when we believe our shares are undervalued." Lear continues to win new business globally in both business segments. The Company's sales backlog for 2013 to 2015 is $1.8 billion. The backlog continues to support further diversification of Lear's sales by geographic region, customer and vehicle platform. Mr. Simoncini added, "The investments we have made in both business segments over the last several years will continue to provide benefits and support growth greater than the overall industry. I am particularly pleased with the success of our Electrical Power Management business, where we are achieving record sales and improving margins." Lear expects 2012 net sales of approximately $14.5 billion, core operating earnings in the range of $745 to $785 million, adjusted capital spending of approximately $435 million, free cash flow of approximately $275 million and adjusted net income attributable to Lear of $520 to $560 million. For 2013, Lear expects net sales of $15.0 to $15.5 billion, core operating earnings in the range of $725 to $775 million, adjusted capital spending of approximately $450 million, free cash flow of approximately $275 million and adjusted net income attributable to Lear of $420 to $455 million. Lear's financial outlook is based on forecasted global industry vehicle production of 79 million units in 2012 and 81 million units in 2013. In addition, the Company expects margins to improve in 2014 and 2015. About Lear Corporation Headquarters in Southfield, Michigan, Lear Corporation -- http://www.lear.com/-- is one of the world's leading suppliers of automotive seating systems and electrical distribution and power management systems. The Company's world-class products are designed, engineered and manufactured by a diverse team of approximately 75,000 employees at 205 facilities in 36 countries. Lear's common shares are traded on the New York Stock Exchange under the symbol [LEA]. Lear Corp. and its affiliates filed for Chapter 11 on July 7, 2009 (Bankr. S.D.N.Y. Case No. 09-14326). Attorneys at Kirkland & Ellis LLP, served as the Debtors' bankruptcy counsel. In November 2009, Lear emerged from bankruptcy protection. MF GLOBAL: Creditors Propose Liquidation Plan --------------------------------------------- Unsecured creditors of MF Global Holdings Ltd on Thursday proposed a liquidation plan that could pay the brokerage's former customers in full, Nick Brown of Reuters reported. The ad hoc group, led by distressed debt investors Silver Point Capital, Knighthead Capital and Cyrus Capital Partners, filed the proposal in U.S. Bankruptcy Court in Manhattan, saying former traders who held accounts at the commodities broker could receive full payback, while some unsecured bondholders of the MF parent could recover as much as 42 percent of their claims, Reuters pointed out. MF Global declared bankruptcy in October 2011 after its exposure to risky European sovereign debt spooked investors, the report related. The case became a political fire storm after federal investigators discovered that money in customer trading funds had gone missing in the collapse. The proposed liquidation plan comes weeks after the MF parent and two key affiliates settled billions of dollars in intercompany claims, providing a clearer picture of what each unit will have at its disposal to pay back creditors, Reuters pointed out. According to Reuters, the group noted in its plan outline that professionals working to liquidate MF's parent, broker-dealer and UK units have billed roughly $200 million in fees so far. Under the creditors' proposed plan, holders of about $1 billion in unsecured bonds would receive between 12 and 42 percent in recoveries, Reuters pointed out. Lenders under a $1.2 billion revolver, led by JPMorgan Chase & Co, would recover between 27 and 80 percent of their claims. The group said in court papers those estimates are conservative. The ad hoc group believes customers would be paid in full within three to six months, while other creditors would receive payouts within one year, according to a source close to the matter, Reuters said. The outline of the plan is slated to go before Judge Martin Glenn on Feb. 14, Reuters related. If approved, the plan would go to creditors for a vote. The group that proposed the plan owns about 65 percent of the roughly $2.2 billion in unsecured claims, so the plan already has widespread support. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. MF GLOBAL: CRT Analyst Stands Pat on 35% for Bondholders -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that either MF Global Holdings Ltd. plan proponents and an analyst are overly pessimistic, or bond traders are paying about twice what debt holders will recover through a Chapter 11 plan for the parent of the commodity broker thrust into bankruptcy by a $1.6 billion shortfall in customer funds. The report recounts the bankruptcy plan filed late last week predicts unsecured bondholders and unsecured creditors of the MF Global parent holding company will recover 11.5% to 41.5% on claims that could total as much as $2.37 billion. Before creditors took matters into their own hands by filing a plan, the holding company's 6.25% senior unsecured bonds due 2016 last traded on Jan. 10 at 64.425 cents on the dollar, or more than 50% higher than the plan proponents high-end estimated recovery. The plan proponents are not alone. The "midcase" recovery for holding company bondholders is 35%, according to Kevin Starke, a managing director with CRT Capital Group LLC in Stamford, Connecticut. Mr. Starke said in an interview that he's standing pat on predictions he made in a report in mid-December. The plan didn't scare traders either. They are sticking to their guns, as shown by the 6.25% bonds that traded at 3:04 p.m. on Jan. 11 for 64.438 cents. According to the report, the creditors were entitled to file a plan because the appointment of Louis Freeh as Chapter 11 trustee for the parent automatically ended the company's exclusive right to propose a plan. Mr. Freeh is yet to submit a plan of his own. The creditors are hoping the bankruptcy court in New York will hold a confirmation hearing by the end of March for approval of the plan. To explain why traders have been willing to pay so much more for the debt, Mr. Starke said, "Outside of the plan proponent group which has done some real work, I have gotten the sense that other people did much less work." Analyzing the discrepancy between trading prices and recovery estimates, Mr. Starke pointed out that the plan proponents didn't take insurance and lawsuit recoveries into consideration in their estimates. Still, Mr. Starke believes it will be "difficult" for lawsuits against former Chief Executive Jon Corzine and others to move the recovery "up from 41.5 percent to something above the 61- 65 range the bond recently inhabited." Mr. Starke calculates there must be $500 million in lawsuit recoveries allocated to the holding company for the distribution to reach the level of 60% to 65%. Mr. Starke said that all of the plan proponents' predictions are based on an assumption that customers at the MF Global brokerage subsidiary will be paid in full, with a surplus remaining. Mr. Starke said in a report that he does "not share that view" because there is a "substantial risk that the customer claims classes are bigger than what the plan proponents have assumed." About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. Bankruptcy Creditors' Service, Inc., publishes MF GLOBAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by MF Global Holdings and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) MF GLOBAL: Creditors Take Lead in Offering 1st Plan --------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that MF Global Holdings Ltd.?s general unsecured creditors on Thursday released the first proposed liquidation plan in the fallen company?s Chapter 11 proceedings, saying former customers' claims could be paid in full. The proposed plan for MF Global and its affiliates was put forward by Citigroup Financial Products Inc., Silver Point Capital Fund LP, Bluemountain Timberline Ltd., Caspian Capital Group LP, Deutsche Bank Securities Inc. and Waterstone Capital Management LP, among others, the report said. The debtors have not submitted submitted their own plan yet. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. MF GLOBAL: Insurers Can Proceed with Appeal Over $141M Loss ----------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that great American Insurance Co., Liberty Mutual Insurance Co. and several other insurers can appeal part of a decision surrounding a $141 million claim coverage action launched against MF Global Holdings Ltd. before the brokerage filed for bankruptcy, a judge ruled Thursday. U.S. Bankruptcy Judge Martin Glenn signed off on a lift of the automatic stay in MF Global?s bankruptcy proceedings to allow the appeal to proceed, the report added. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said Nov. 3, according to Bloomberg News. MODERN PLASTICS: Sale Hearing Moved to March 6; NPC Has Offer ------------------------------------------------------------- Concerned for its property and company's operations, New Products Corporation (NPC) is pointing to Harbor Shores' plans that date back to 2005, showing residential and other development on its land. Plans also reveal Harbor Shores' development on Modern Plastics' property, the neighboring company that is now in bankruptcy along with beachfront improvements adjacent to Benton Harbor's water plant property. "It's important for the public to be aware that the developers of Harbor Shores have had a long term strategy to encroach and take over our property and our neighbors in Benton Harbor," said Cheryl Miller, NPC's president and CEO. "If it can happen to us, it can happen to anyone. We refuse to be run over and forced to close our manufacturing operations." In September 2011, NPC filed a lawsuit against Harbor Shores and developers of the Harbor Shores Golf Course for taking the company's property without asking. It is now part of the 18th fairway. This lawsuit is still pending in Berrien County Circuit Court, as the parties engage in discovery. More recently, NPC took action to help protect its own operations and creditors of its neighbor Modern Plastics, which was forced to close its doors in 2008 and file for bankruptcy. When NPC, a creditor of Modern Plastics, learned about the proposed bankruptcy sale of Modern Plastics real estate on North Shore Drive to Harbor Shores for only $25,000, NPC made a counter offer. A bankruptcy court hearing date about the proposed sale that was scheduled in Kalamazoo on Wednesday, January 9, 2013, has been postponed until March 6, 2013. "It's interesting that our attorney was only notified by the bankruptcy trustee of the bankruptcy court hearing postponement via email on Tuesday afternoon, January 8, with no reason given," added Ms. Miller. MONITOR COMPANY: Deloitte Sale OK'd Over Objection to Releases -------------------------------------------------------------- Lance Duroni of BankruptcyLaw360 reported that a Delaware bankruptcy judge gave his blessing Friday to consulting firm Monitor Co. Group LP's $116.2 million sale to rival Deloitte Consulting LLP, overruling creditors who protested that the deal included improper protections from clawback litigation for Monitor insiders. After hours of witness testimony at a court hearing in Wilmington, U.S. Bankruptcy Judge Christopher S. Sontchi signed off on the deal, the report said. Judge Sontchi agreed with Cambridge, Mass.-based Monitor that the releases shielding its partners from potentially $16 million in clawback claims, or avoidance actions, were critical to the success of the sale, the report added. Lance Duroni of BankruptcyLaw360 reported that unsecured creditors of Monitor accused the bankrupt consulting firm of improperly shielding insiders from clawback litigation through the planned $116 million sale of the firm to rival Deloitte Consulting. Under the deal, Deloitte contends it is buying avoidance claims against Monitor?s officers, directors and partners worth potentially $9 million, but the ploy essentially functions as a grant of releases to Monitor insiders for which the estate is receiving nothing, the company?s official committee of unsecured creditors said in an objection filed with the Court, the report cited. About Monitor Company 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. 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. The Debtors propose to hold an auction on Nov. 28, 2012, at the offices of the Sellers' counsel, Ropes & Gray LLP in New York. Closing of the deal must occur by the earlier of (i) 30 days following entry of the Sale Order and (ii) Feb. 28, 2013. MOUNTAIN PROPERTY: Court Dismisses Chapter 11 Case -------------------------------------------------- The U.S. Bankruptcy Court issued an order in October dismissing the Chapter 11 case of Mountain Property Development, Inc. Mountain Property Development, Inc., filed a bare-bones Chapter 11 petition (Bankr. N.D. Calif. Case No. 12-53090) in San Jose, California, on April 24, 2012. Los Gatos, California-based Mountain Property estimated assets and debts of $10 million to $50 million. Principal assets are located in Steamboat Springs, Colorado. The Law Offices of James M. Sullivan serves as the Debtor's counsel. Judge Charles Novack presided over the case. MS MARK SHALE: Trademarks of Retailer Fetch $19,000 --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the bankruptcy judge presiding over the liquidation of Chicago retailer Mark Shale held an auction in her courtroom last week for the company's trademarks and trade names. Before the hearing, a 20% stockholder named Scott Baskin was offering $10,000. When the auction ended, competition from another prospective buyer pushed the price to $19,000. U.S. Bankruptcy Judge Jacqueline P. Cox approved the sale to Mr. Baskin on Jan. 9. About Mark Shale Based in Woodridge, Illinois, MS Mark Shale, LLC, filed for Chapter for Chapter 11 protection on Aug. 21, 2012 (Bankr. N.D. Ill. Case No. 12-33041). Judge Jacqueline P. Cox presides over the case. Steven B. Towbin, Esq., at Shaw Gussis et al., represents the Debtor. The Debtor disclosed assets of $3.2 million and liabilities of $5.5 million. The bankruptcy in August was the second since 2009. The new bankruptcy was a liquidation from the outset. Then operating eight high-end men's and women's apparel stores, Mark Shale filed for Chapter 11 reorganization in Chicago in March 2009. The existing owners along with others bought the business in a bankruptcy sale. MOUNTAIN LAUREL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Mountain Laurel Shoppes LLC dba Mountain Laurel Inn and Shoppes Mountain Laurel Inn 4801 Victoria Way #4J Pompano Beach, FL 33066 Bankruptcy Case No.: 13-10649 Chapter 11 Petition Date: January 11, 2013 Court: U.S. Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Raymond B Ray Debtor's Counsel: Kenneth S. Rappaport, Esq. RAPPAPORT OSBORNE & RAPPAPORT, PL 1300 N. Federal Highway #203 Boca Raton, FL 33432 Tel: (561) 368-2200 E-mail: rappaport@kennethrappaportlawoffice.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb13-10649.pdf The petition was signed by Vincent A. Ferri, president of managing member. MSR RESORT: U.S. Government Objects to Bankruptcy Plan ------------------------------------------------------ The United States government has objected to a bankruptcy reorganization plan that calls for the sale of MSR Resort hotel group to a Singapore sovereign wealth fund, saying it is an attempt to dodge taxes, Tanya Agrawal of Reuters reported. The plan creates tax liabilities of $331 million with no recourse for the Internal Revenue Service (IRS) to recover them, Preet Bharara, U.S. attorney for the Southern District of New York, said in an objection filed on Wednesday. The U.S. Attorney also objected to MSR seeking an injunction that bars the government from reviewing the tax consequences of the plan. According to the attorney, the U.S. government has not had an opportunity to examine whether the plan is motivated solely to avoid taxes, which would disqualify it. Reuters related that the Government of Singapore Investment Corp bid $1.5 billion for the hotels group, including the Arizona Biltmore Resort & Spa in Phoenix and Grand Wailea Resorts Hotel & Spa in Hawaii, in August. The hotel group is owned by the hedge fund Paulson & Co. GIC is a sovereign wealth fund that manages Singapore's foreign reserves and is a large real estate investor in the United States and is a lender to MSR and made an offer shortly after the group filed for bankruptcy protection, Reuters related. The hedge fund, headed by John Paulson, bought the hotels from a Morgan Stanley real estate fund in January 2011 and put them into bankruptcy a month later, saying it planned to reorganize them, the report added. Morgan Stanley Real Estate purchased the five hotels and three others in 2007 for about $4 billion. The hotels filed with $2.2 billion in assets and $1.9 billion in debt. The case is in Re: MSR Resort Golf Course, U.S. Bankruptcy Court, Southern District of New York, No. 11-10372. 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. MSR RESORT: IRS Wants Plan Process Slowed, Asserts Tax Claim ------------------------------------------------------------ Joseph Checkler, writing for Dow Jones Newswires, reports that Preet Bharara, U.S. Attorney for the Southern District of New York, on behalf of the U.S. government, said in court papers MSR Resort Golf Course LLC's plan to sell its resorts to the real- estate arm of Singapore's sovereign wealth fund creates $331 million in tax liabilities that should be owed to the Internal Revenue Service but can't be collected. According to the report, Mr. Bharara said the resort group didn't notify the IRS about the tax issue before a key "disclosure statement" hearing, even though the resort group told a judge otherwise. Mr. Bharara asked Judge Sean H. Lane to postpone a Jan. 15 hearing at which he will consider signing off on the resorts' bankruptcy plan. The U.S. attorney said MSR's attorneys declined a similar request of adjourning that hearing. MSR is selling four resorts to the Singapore fund, GIC RE, for $1.5 billion. In December, no one bid against Singapore at a scheduled auction of the resort group's properties: Maui'sGrand Wailea Resort Hotel & Spa, the La Quinta Resort & Club in La Quinta, Calif.; 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. Dow Jones recounts the $1.5 billion deal includes a $1.1 billion cash payment for the properties and $360 million in debt forgiveness. The resort owner will pay 100% of the claims of Hilton Worldwide and Marriott International Inc., which have managed several of the resorts. The owners of some of the resorts' so-called "mezzanine" debt will get 100% of their money back, while another tier of those lenders will get between 8% and 68%. According to Dow Jones, Mr. Bharara said the documentation surrounding the purchase agreement contains wording that would stop the IRS from collecting on the taxes. "Seeking such an injunction purporting to limit the IRS's ability to pursue any liabilities stemming from the Purchase Agreement is particularly disingenuous given that, at the same time, Debtors concede that 'the law is unclear'" when multiple taxpayers are involved, Mr. Bharara said, according to the report. The sale document also concedes the IRS could win if it goes after the money. Mr. Bharara argues that a bankruptcy judge does not have the authority to decide on tax liabilities for any party other than the one in bankruptcy. Dow Jones also notes investment firm Five Mile Capital Partners LLC, holder of a junior mezzanine debt, stands to recover none of its money in the case, also said the tax liability could "infect" the entire bankruptcy. A spokesman for the resort group, controlled by hedge-fund manager John Paulson, declined to comment. A company controlled by Donald Trump in June bought the Doral Golf Resort & Spa in Miami from Paulson for $150 million. 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. MT. MORRIS MUTUAL: A.M. Best Hikes Fin'l Strength Rating From B ---------------------------------------------------------------- A.M. Best Co. has upgraded the financial strength rating (FSR) to B+ (Good) from B (Fair) and the issuer credit rating (ICR) to "bbb-" from "bb+" of Mt. Morris Mutual Insurance Company (MMIC) (Coloma, WI). The outlook for ICR has been revised to stable from negative, while the outlook for the FSR is stable. The rating actions reflect MMIC's improved risk-adjusted capitalization, strengthened policyholders' surplus and operating income, which resulted from a correction of a significant accounting error relating to reinsurance recoverables. The ratings also reflect the company's positive operating performance over the latest five-year period, which resulted from a steady stream of investment income that offset underwriting losses. MMIC also benefits from a long-standing local market presence and strong agency relationships, which have developed over the course of its 137-year history. The ratings reflect changes that MMIC's management has implemented to its internal controls to obviate reoccurrence of this accounting error. Additionally, the company has implemented several strategies designed to improve underwriting results, including rate level adjustments, exposure mitigation activities and more refined underwriting techniques. Furthermore, MMIC has revised its investment strategy to reduce its equity holdings in an effort to insulate policyholders' surplus from future equity market volatility. Partly offsetting these positive rating factors are MMIC's elevated underwriting and investment leverage, limited product diversification and geographic concentration of risks in Wisconsin. This single-state concentration exposes the company to competitive market conditions, frequent and severe weather-related events and potential judicial and regulatory actions. NAT'L EXCHANGE: Kreager Dodges CellTex's $2MM Malpractice Claim --------------------------------------------------------------- A Texas appellate court on Friday said a cellphone tower siting business is time-barred from suing its former law firm for claims it improperly structured a real estate deal that was intended to provide tax relief but cost the business $2 million when a holding company went bankrupt, Jess Davis of BankruptcyLaw360 reports. The Fourth Court of Appeals rejected CellTex Site Services Ltd.'s arguments that its lawsuit against Kreager Law Firm and attorney James S. Cheslock should be allowed to proceed under the so-called Hughes doctrine, the report relates. National Exchange Bankruptcy CellTex hired Kreager and Cheslock to represent it in drafting an agreement with National Exchange Service QI, Ltd. pertaining to a 1031 exchange. CellTex intended to sell a tract of real property it owned, and a 1031 exchange would allow CellTex to defer the payment of federal income taxes that otherwise would be due following the sale. In order to conduct a 1031 exchange, the proceeds from the sale must be placed with a qualified intermediary until the proceeds are used to buy another tract of real property within a specified time period. The purpose of the agreement between CellTex and National Exchange was to set forth the terms and conditions pursuant to which National Exchange would serve as the qualified intermediary. One of those terms required National Exchange to maintain insurance with regard to the sales proceeds. After approximately $2,000,000 in proceeds from the sale was deposited with National Exchange in accordance with the agreement, National Exchange went bankrupt, and National Exchange's bond/insurance company denied CellTex's claim. As a result, CellTex lost its money. CellTex subsequently sued Kreager and Cheslock for legal malpractice, alleging they failed to adequately structure the transaction to protect CellTex's funds and failed to properly analyze National Exchange's bond/insurance coverage. Kreager and Cheslock moved for a traditional summary judgment based on limitations. CellTex filed a response, raising the Hughes tolling doctrine. The trial court granted summary judgment in favor of Kreager and Cheslock. The ruling is available at Leagle.com at http://is.gd/xnonsa NATIONWIDE AMBULANCE: Case Summary & Creditors List --------------------------------------------------- Debtor: Nationwide Ambulance Services, Inc. 410 North Avenue East Cranford, NJ 07016 Bankruptcy Case No.: 13-10559 Chapter 11 Petition Date: January 11, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Rosemary Gambardella Debtor's Counsel: Barry W. Frost, Esq. TEICH GROH 691 State Highway 33 Trenton, NJ 08619-4407 Tel: (609) 890-1500 E-mail: bfrost@teichgroh.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb13-10559.pdf The petition was signed by Alex Ivchenko, president. NNN 350 MAPLE: Files Schedules of Assets and Liabilities -------------------------------------------------------- NNN 350 Maple 26 LLC filed its schedules of assets and liabilities with the U.S. Bankruptcy Court for the Central District of California, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $45,000,000 B. Personal Property $563,241 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $46,073,190 E. Creditors Holding Unsecured Priority Claims F. Creditors Holding Unsecured Non-priority $585,403 Claims ----------- ----------- TOTAL $45,563,241 $46,658,593 NNN 3500 Maple 26, LLC, based in Costa Mesa, Calif., filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case No. 12-23718) on Nov. 30, 2012. Judge Scott C. Clarkson presides over the case. Darvy Mack Cohan Attorney at Law serves as the Debtor's counsel. NORTEL NETWORKS: Reaches $67M Deal in Retiree Benefits Feud ----------------------------------------------------------- Nortel Networks Inc. has reached a deal with thousands of its retired employees that would allow the defunct telecommunications giant to terminate their benefits in exchange for nearly $67 million, according to a motion filed Monday in Delaware bankruptcy court, Jamie Santo of BankruptcyLaw360 reports. The proposed settlement would tie up one of the final loose ends in the company's protracted bankruptcy, a four-year period during which Nortel sold off nearly all of its assets but had been unable to reach terms with its retirees to consensually terminate their benefit plans, according to the report. 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. ODYSSEY DIVERSIFIED: US Trustee Objects to Confirmation of Plans ---------------------------------------------------------------- Donald F. Walton, the United States Trustee for Region 21, objected to the confirmation of Odyssey Diversified VI, LLC, Odyssey Diversified VII, LLC, and Odyssey Diversified IX, LLC's Plans of Reorganization, disclosing: 1. The Debtors must provide an evidentiary basis for the exculpation of liability and/or release of, among others, Lawrence W. Maxwell, Lawrence T. Maxwell, Robert L. Madden, William Maloney, the Debtor's professionals, officers, and employees, and Peter Munson (and his agents and representatives) from a variety of claims. 2. The Debtors have failed to provide monthly operating reports to the United States Trustee for October 2012. Without this information, the United States Trustee cannot accurately determine whether the Debtor can meet the requirements of 11 U.S.C. Sections 1129(a)(11) and (7). 3. Paragraph 3.1.2 of the plans provides in part: So that the Distributions to the Noteholders are not diluted by the costs of the Bankruptcy Case, the Distributions required under Article 3.1.1 for Allowed Claims of Professionals, and the Distributions required under Article 3.1.2 for the United States Trustee fees shall be funded by Maxwell or his Affiliate in an amount not to exceed $250,000 in the aggregate for the Bankruptcy Case filed by the [above- styled Debtor entities]. The United States Trustee objects to the limited extent that this provision could be interpreted to limit the Debtors' ongoing duty to pay quarterly fees pursuant 28 U.S.C. Sec. 1930 and to the extent that the funded amount is insufficient to pay quarterly fees to the conclusion of the case. Objection Specific to Odyssey Diversified VII, LLC The Debtor has failed to pay the quarterly fees owed to the United States Trustee for the third quarter of 2012. Debtor's failure to pay fees indicates the Debtor's inability to remain current on its current obligations and suggests a future inability to satisfy its obligations under the plan, which would lead to the need for liquidation or further reorganization. Odyssey Diversified VI's Plan The Plan provides for the continued operation of the Debtor as the Reorganized Debtor. Under Odyssey Diversified VI's Plan, Allowed Claims of Noteholders in Class 2 will receive annual payments, if available, from a fund, the source of which will be: (1) Causes of Action Recoveries, if any, (2) the excess cash flow, if any, of business operations of the Debtor Owned Entities. Such payments, if available, will be made annually until the earlier of: (a) the disposal of all Debtor Owned Entities or (b) the fifth anniversary of the Effective Date. In addition, the Noteholders will receive excess proceeds from the sales of the Debtor Owned Entities occurring prior to the Maturity Date, after payment of underlying debt service, taxes, closing costs, and amounts owed under the Maxwell Line of Credit. On or before the date that is 60 days after the Effective Date, there will be a distribution of $500,000 to the Noteholders from the Guarantor of Odyssey VI to be made partially from existing funds, with the balance of the $500,000 payment to be funded from an advance to the Guarantor of Odyssey VI by Maxwell or his affiliate (the ?M Advance?). Upon the sale of the property owned by the Guarantor of Odyssey VI, the net proceeds from such sale, less the M Advance, which will be repaid from the net proceeds, will be paid to the Noteholders on or before the first day of the month that is 30 months after the Effective Date. Unsecured creditors in Class 3 will not receive any distributions under the Plan unless and until there is adjudicated in such Holder's favor a Final Order awarding an Allowed Claim against the Debtor, in which case the Holder of such Claim will receive its pro rata share of any distributions that are being paid to the Noteholders in Class 2, with the exception of any payment to be under under the Guaranty of Odyssey VI. Equity Interests in Class 5 will not be affected by the Plan and Members will retain their Equity Interests. No distributions will be made under the Plan on account of the Equity Interests. A copy of Odyssey VI's Disclosure Statement is available at: Odyssey Diversified VII's Plan The Plan provides for the continued operation of the Debtor as the Reorganized Debtor. Under Odyssey Diversified VII's Plan, Allowed Claims of Noteholders in Class 2 will receive annual payments, if available, from a fund, the source of which will be: (1) Causes of Action Recoveries, if any, (2) the excess cash flow, if any, of business operations of the Debtor Owned Entities. Such payments, if available, will be made annually until the earlier of: (a) the disposal of all Debtor Owned Entities or (b) the fifth anniversary of the Effective Date. In addition, the Noteholders will receive excess proceeds from the sales of the Debtor Owned Entities occurring prior to the Maturity Date, after payment of underlying debt service, taxes, closing costs, and amounts owed under the Maxwell Line of Credit. On or before the date that is 60 days after the Effective Date, conditioned upon the approval of the release and exculpation provisions in the Plan and the dismissal with prejudice of the Howard Action, the Indenture Trustee will release its lien and distribute to the Noteholders the amount of $6,285,000, less reasonable fees and costs, which represents all monies currently held by the Indenture Trustee as security for his indemnification rights under the Indenture Agreement. The remaining amount of $2.3 million owed by the Guarantor pursuant to the Guaranty of Odyssey VII will be paid to the Noteholders on or before the date that is sixty days after the Effective Date. Unsecured creditors in Class 3 will not receive any distributions under the Plan unless and until there is adjudicated in such Holder's favor a Final Order awarding an Allowed Claim against the Debtor, in which case the Holder of such Claim will receive its pro rata share of any distributions that are being paid to the Noteholders in Class 2, with the exception of any payment to be under under the Guaranty of Odyssey VII. Equity Interests in Class 5 will not be affected by the Plan and Members will retain their Equity Interests. No distributions will be made under the Plan on account of the Equity Interests. A copy of Odyssey VII's Disclosure Statement is available at: Odyssey Diversified IX's Plan The Plan provides for the continued operation of the Debtor as the Reorganized Debtor. Under Odyssey Diversified IX's Plan, Allowed Claims of Noteholders in Class 2 will receive annual payments, if available, from a fund, the source of which will be: (1) Causes of Action Recoveries, if any, (2) the excess cash flow, if any, of business operations of the Debtor Owned Entities. Such payments, if available, will be made annually until the earlier of: (a) the disposal of all Debtor Owned Entities or (b) the fifth anniversary of the Effective Date. In addition, the Noteholders will receive excess proceeds from the sales of the Debtor Owned Entities occurring prior to the Maturity Date, after payment of underlying debt service, taxes, closing costs, and amounts owed under the Maxwell Line of Credit. On or before the date that is 60 days after the Effective Date, there will be a distribution to the Noteholders of the remaining amounts due under the Guaranty of Odyssey IX in the amount of $1,445,000, which are the net proceeds from the remaining property of the Guarantor of Odyssey IX or its equivalent. Unsecured creditors in Class 3 will not receive any distributions under the Plan unless and until there is adjudicated in such Holder's favor a Final Order awarding an Allowed Claim against the Debtor, in which case the Holder of such Claim will receive its pro rata share of any distributions that are being paid to the Noteholders in Class 2, with the exception of any payment to be under under the Guaranty of Odyssey IX. Equity Interests in Class 5 will not be affected by the Plan and Members will retain their Equity Interests. No distributions will be made under the Plan on account of the Equity Interests. A copy of Odyssey IX's Disclosure Statement is available at: About Odyssey Diversified Odyssey Diversified VI, LLC, Odyssey Diversified VII, LLC, and Odyssey Diversified IX, LLC, sought Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-12323 to 12-12325) on Aug. 10, 2012, in Tampa, Florida. Edward J. Peterson. Esq., at Tampa, Florida, serves as counsel to the Debtors. Diversified VI disclosed $549 in total assets and $24,884,004 in total liabilities in its schedules of assets and liabilities. William Maloney of Bill Maloney Consulting serves as chief restructuring officer for the Debtors. OVERSEAS SHIPHOLDING: S&P Withdraws 'D' Corporate Credit Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its ratings on Overseas Shipholding Group Inc. (OSG), including the 'D' corporate credit and issue ratings. "The ratings withdrawal reflects a lack of timely financial information from the company," said Standard & Poor's credit analyst Funmi Afonja. OSG's last public financial statements are from the period ended June 30, 2012. On Nov. 14, 2012, OSG filed voluntary Chapter 11 bankruptcy protection for itself and certain operating subsidiaries. On Oct. 22, 2012, OSG filed an 8-K stating it is reviewing a tax issue arising from the fact that the company is domiciled in the U.S. and has substantial international operations, and relating to the interpretation of certain provisions contained in the company's loan agreements. As a result of that continuing process, OSG stated its previously issued financial statements for the three years ended Dec. 31, 2011, and associated interim periods for the quarters ended March 31 and June 30, 2012, should no longer be relied upon. "The '3' recovery rating on the company's senior unsecured debt, indicating our expectation that lenders will receive a meaningful (50%-70%) recovery in a payment default scenario, was unchanged before we withdrew the rating because our recovery rating does not take into account any potential tax liabilities that the company may have. As of June 30, 2012, the company had unrecognized deferred U.S. income tax of approximately $770 million because of undistributed earnings from shipping income of its foreign subsidiaries or its less-than-50%-owned foreign shipping joint ventures. The recovery could fall into the 10% to 30% range (corresponding with a '5' recovery rating) if actual tax liability is consistent with the full amount of unrecognized deferred U.S. income tax and if that liability is treated as a priority claim," S&P said. New York City-based OSG is one of the world's leading liquid bulk shipping companies. As of June 30, 2012, the company operated a fleet of 112 vessels (67 owned, 45 chartered-in), totaling about 10.7 million deadweight tons. PATROIT COAL: Non-Union Retiree Committee Sought ------------------------------------------------ Patriot Coal's non-union retiree and creditor Harold Racer filed with the U.S. Bankruptcy Court a motion seeking the appointment of an official non-union retiree committee, BankruptcyData reported. Mr. Racer, according to the report, states, "Without previously notifying this Court, on our about December 17, 2012, Debtors sent a mass mailing to all non-union retirees informing them that Debtors would be seeking to unilaterally terminate all retiree benefits. Inexplicably, Debtors failed to seeking the formation of an Official Retiree Committee prior to or conetemporaneously [sic] with notifying the affected retirees. Now that the Debtors have publically [sic] announced their intest [sic] to terminate said retiree benefits, a Retireee [sic] Committee must be formed as required by Section 1114 without delay." The Court scheduled a January 29, 2013 hearing on the matter. About Patriot Coal Patriot Coal Corporation -- http://www.patriotcoal.com/-- engages in the mining, production, and sale of thermal coal primarily to electricity generators in the eastern United States. It has operations and coal reserves in the Appalachia and the Illinois Basin coal regions. The Company is also involved in the production of metallurgical quality coal and sells it to steel mills and independent coke producers. It is based in St. Louis, Missouri. PENSON WORLDWIDE: Ex-Securities Clearing Broker Files Bankruptcy ---------------------------------------------------------------- Plano, Texas-based Penson Worldwide Inc., a former securities clearing broker that has since divested most of its operations, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-10061) on Jan. 11, 2013. According to Reuters, Penson Worldwide last year sold its futures division to Knight Capital Group and its broker-deal subsidiary to Apex Clearing. The report relates teh Company said in court filings it was unable to successfully streamline is business after the asset sales. It was also dogged by questions from the Securities and Exchange Commission about its accounting and a class action lawsuit by shareholders. According to the report, the Company, which was founded in 1995, said it expects to sell its only remaining operating business, Nexa Technologies. Nexa develops and markets customizable securities trading platforms. The Company is represented by Pauline K. Morgan of Young Conaway Stargatt & Taylor, the report said. Beginning in 2009, the sputtering global economy and associated decrease in trading volume hurt Penson?s commission and interest revenues. According to documents filed with the Court, "After months of good faith and arm's length negotiations, on January 10, 2013, the Debtors entered into a restructuring support agreement with the members of the Senior Noteholders Committee and the Convertible Noteholders Committee (collectively, the 'Consenting Noteholders'), pursuant to which the Consenting Noteholders have agreed, subject to certain terms and conditions, to support a consensual orderly liquidation of Penson's business, and to vote in favor of the Joint Liquidation Plan of Penson Worldwide, Inc. and Its Affiliated Debtors (the 'Plan') filed on the Petition Date, when solicited to do so. The Debtors have commenced these cases to implement the terms of the Plan, which will result in the liquidation of the Debtors' remaining businesses in a consensual and orderly manner." Plano, Texas-based Penson Worldwide estimated both assets and debt between $100 million and $500 million in its Chapter 11 bankruptcy petition. About Penson Worldwide Penson Worldwide, Inc. is a holding company incorporated in Delaware, which conducts business through its wholly owned subsidiary SAI Holdings, Inc. Through its operating subsidiaries, the Company provides securities and futures clearing services including integrated trade execution, foreign exchange trading, custody services, trade settlement, technology services, risk management services, customer account processing and customized data processing services. The Company also participates in margin lending and securities lending and borrowing transactions, primarily to facilitate clearing and financing activities. PLYMOUTH OIL: Can Use Cash Collateral Until March 1 --------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Iowa authorized Plymouth Oil Company, LLC, to use cash collateral of Ryan Lake, Steve Vande Brake, Arlon Sandbulte, Dirk Dorn, and Iowa Corn Opportunities, LLC (the ?Bridge Lenders?), and of Iowa Prairie Bank, Iowa Corn Processors, L.C., and FWS Industrial Projects, USA Inc., through and including March 1, 2013, to fund critical operations and the administration of the Chapter 11 case. As adequate protection. the Secured Creditors are granted: (a) security interests and replacement liens in the Secured Creditors' collateral in accordance with the existing priorities between the Secured Creditors, including accounts receivable, contract rights and deposit accounts; and (b) allowed administrative claims under Sections 503(b)(1), 507(a), and 507(b) of the Bankruptcy Code. The Replacement Liens and the Adequate Protection Claims will (i) be subject and subordinate to the Carve-Out (for fees and expenses of the Debtor's and Creditor's Committee attorneys as well as U.S. Trustee and Bankruptcy Court fees), (ii) not extend to claims and causes of action under Sections 544, 545, 546, 547, 548, 549 or 550 of the Bankruptcy Code or the related proceeds, and (iii) will not extend or apply to any products provided by C&N Ethanol Marketing, LLC, pursuant to the Feedstock Agreement. The Debtor will receive equity investments from an undisclosed investor $100,000 on or before Jan. 11, 2013, and $100,000 on or before Feb. 11, 2013. Such equity investments will be placed in Debtor's general operating account, and will constitute a portion of the Secured Creditors' cash collateral. In the event that any of the equity investments are not made, the Secured Creditors may request that the Court terminate this Order. As as additional adequate protection, the Debtor will pay $20,000 on Dec. 20, 2012, $30,000 on Jan. 25, 2013, and $50,000 on Feb. 25, 2013, to the Bridge Lenders, which sums will be allocated amongst the Bridge Lenders on a pro-rata basis and applied to the outstanding balances of each of their respective loans to Plymouth Oil. The Debtor will also set aside an amount equivalent to 1/12th of the annual real estate taxes in a separate cash collateral account for each of the months of November, December and January, which set asides will be made by the Debtor on or before Jan. 31, 2013. In the event this case is converted to a Chapter 7 case or if a Chapter 11 trustee is appointed, such funds initially set aside for the purpose of paying annual real estate taxes, will be paid to the Bridge Lenders. The Bridge Lenders, which have a pre-petition first priority security interest in the Debtor's cash, accounts receivable and inventory, have asked the Court to vacate its cash collateral order. The Bridge Lenders disclose that, according to the Debtor's counsel, the initial cash injection of $100,000 that was supposed to be made by Dec. 3, 2012, was not timely made, and there is no current commitment from any investor for injection of a total of $300,000. In addition, the Debtor has not timely provided the Bridge Lenders with their weekly cash flow report for the week ending December 2. Plymouth Oil Company, LLC, filed a bare-bones Chapter 11 petition (Bankr. N.D. Iowa Case No. 12-01403) in Sioux City on July 23, 2012. In its amended schedules, the Debtor disclosed $21,623,349 in total assets and $12,891,586 in total liabilities. Plymouth Oil -- http://www.plymouthoil.com-- has a $30 million extraction plant located at 22058 K-42 Merrill, Iowa, directly across from the new Plymouth Energy Ethanol Plant. Founded by local investors, Plymouth Oil Company, LLC started operations in February 2010 purchasing raw corn germ and refining this material into de-oiled germ meal and kosher food-grade cooking oil. The plant has the capability of pumping out 90 tons of corn oil each day and about 300 tons of DCGM (defatted corn germ meal) daily, which is used for hog, poultry and dairy feed. Bankruptcy Judge Thad J. Collins presides over the case. Bradley R. Kruse, Esq., at Brown Winick Graves Gross Baskerville & Schoenebaum, P.L.C., serves as the Debtor's counsel. The petition was signed by David P. Hoffman, president. Secured creditors Arlon Sandbulte, Ryan Lake, Dirk Dorn, Steven Vande Brake, and Iowa Corn Opportunities, LLC, are represented by lawyers at Baird Holm LLP in Omaha, Nebraska. POSITIVEID CORP: CEO Touts License Agreement with Boeing -------------------------------------------------------- PositiveID Corporation conducted an audio interview with SmallCapVoice.com, Inc., a financial communications and investor relations firm. PositiveID has entered into a license agreement and a teaming agreement with The Boeing Company, including a license fee to PositiveID of $2.5 million. The license agreement provides Boeing the exclusive license to manufacture and sell PositiveID's M-BAND (Microfluidics-based Bioagent Networked Detector) airborne bio- threat detector for the U.S. Department of Homeland Security's BioWatch Generation 3 opportunity, as well as other opportunities (government or commercial) that may arise in the North American market. In the said interview, Chairman and CEO Bill Caragol, talked about the importance of the license agreement. "As a smaller technology and development company, it was important for us to be able to team with a real world-class, Fortune 50 company like Boeing, who has experience in government markets in Department of Defense as well as Department of Homeland Security, to be able to do the type of large implementation and project management necessary to take the technology and the product that we've developed and be able to implement it successfully for our customer, the Department of Homeland Security." The audio transcript is available at http://is.gd/xvEjKg A copy of the investor presentation is available at: http://is.gd/bFiXbU About PositiveID Delray Beach, Fla.-based PositiveID Corporation has historically developed, marketed and sold RFID systems used for the identification of people in the healthcare market. Beginning in early 2011, the Company has focused its strategy on the growth of its HealthID business, including the continued development of its GlucoChip, its Easy Check breath glucose detection device, its iglucose wireless communication system, and potential strategic acquisition opportunities of businesses that are complementary to its HealthID business. EisnerAmper LLP, in New York, expressed substantial doubt about PositiveID's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has a working capital deficiency and an accumulated deficit. "Additionally, the Company has incurred operating losses since its inception and expects operating losses to continue during 2012. The Company's balance sheet at Sept. 30, 2012, showed $2.69 million in total assets, $6.23 million in total liabilities, and a $3.54 million total stockholders' deficit. POSITIVEID CORP: CEO, Directors Get 29MM Restricted Stock Awards ---------------------------------------------------------------- The compensation committee of the Board of Directors of PositiveID Corporation granted an aggregate of 29,450,000 shares of restricted common stock to its chief executive officer, directors and certain other employees. The Restricted Stock was issued to compensate officers, management, the Board and all employees for (1) performance based incentive compensation for 2012 and (2) the annual Board grant of restricted shares as an element of their 2013 compensation. The Company did not receive any cash proceeds from the grants. William J. Caragol, was granted 10,000,000 shares of Restricted Stock for performance in 2012 as the Company's CEO. In connection with the awards of Restricted Stock, each of the recipients entered into a Restricted Stock Award Agreement with the Company. With respect to each grant, the shares vest on Jan. 1, 2016. On Jan. 8, 2013, the Compensation Committee of the Company agreed to satisfy certain contractual obligations totaling $300,000 under the First Amendment to Employment and Non-Compete Agreement, dated Dec. 7, 2011, between the Company and Mr. through the issuance of 18,472,907 shares of common stock from the Company's authorized and unissued shares to Mr. Caragol. The Restricted Stock was issued at a 25% premium to the closing bid price of the Company's common stock on Jan. 8, 2012. The Contractual Obligations Stock, which settles a past due cash obligation of the Company, vests in full on Jan. 1, 2016. About PositiveID Delray Beach, Fla.-based PositiveID Corporation has historically developed, marketed and sold RFID systems used for the identification of people in the healthcare market. Beginning in early 2011, the Company has focused its strategy on the growth of its HealthID business, including the continued development of its GlucoChip, its Easy Check breath glucose detection device, its iglucose wireless communication system, and potential strategic acquisition opportunities of businesses that are complementary to its HealthID business. EisnerAmper LLP, in New York, expressed substantial doubt about PositiveID's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has a working capital deficiency and an accumulated deficit. "Additionally, the Company has incurred operating losses since its inception and expects operating losses to continue during 2012. The Company's balance sheet at Sept. 30, 2012, showed $2.69 million in total assets, $6.23 million in total liabilities, and a $3.54 million total stockholders' deficit. PREMIER NW INVESTMENT: Case Summary & 20 Largest Unsec. Creditors ----------------------------------------------------------------- Debtor: Premier NW Investment Hotels, LLC 13023 NE Highway 99, Suite 7 Vancouver, WA 98686 Bankruptcy Case No.: 13-40188 Chapter 11 Petition Date: January 11, 2013 Court: U.S. Bankruptcy Court Western District of Washington (Tacoma) Judge: Brian D. Lynch Debtor's Counsel: John D. Nellor, Esq. J. D. NELLOR, PC Park Tower One 201 N.E. Park Plaza Drive, Suite 202 Vancouver, WA 98684 Tel: (360) 816-2241 E-mail: jd@nellorlaw.com Scheduled Assets: $6,741,688 Scheduled Liabilities: $4,436,617 The Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/wawb13-40188.pdf The petition was signed by Michael J. DeFrees, member. PRESSURE BIOSCIENCES: Shares Struve Securities Purchase Pact ------------------------------------------------------------ Pressure Biosciences, Inc., amended its current report on Form 8-K/A filed with the Securities and Exchange Commission on Jan. 4, 2013. The amendment was filed solely to include the information required by Item 3.02 and to include Exhibit 3.1 (both of which were inadvertently omitted from the Original Filing), and to make typographical corrections. No other changes are being made to the Original Filing. On Dec. 28, 2012, Pressure BioSciences entered into a Securities Purchase and Exchange Agreement with Clayton A. Struve, pursuant to which the Company agreed to exchange an aggregate of 10,000 shares of a newly created series of preferred stock, designated Series H Convertible Preferred Stock, par value $0.01 per share for 1,000,000 shares of the Company's common stock, par value $0.01 per share held by Mr. Struve in a non-cash transaction. Mr. Struve originally purchased the common stock from the Company for $0.8025 per share. The closing price of the common stock on the date of the exchange was $0.24. Item 3.02 Unregistered Sales of Equity Securities "The sale of the shares of Series H Convertible Preferred Stock described in Item 1.01 of this Current Report on Form 8-K were issued and sold in a private placement without registration under the Securities Act, in reliance upon the exemption from registration set forth in Rule 506 of Regulation D ("Regulation D") promulgated under the Securities Act of 1933, as amended (the "Securities Act"). The Company based such reliance upon representations made by the purchaser of the shares, including, but not limited to, representations as to the purchaser's status as an "accredited investor" (as defined in Rule 501(a) under Regulation D) and the purchaser's investment intent. The shares of Series H Convertible Preferred Stock were not offered or sold by any form of general solicitation or general advertising (as such terms are used in Rule 502 under Regulation D). The shares of Series H Convertible Preferred Stock may not be re-offered or sold absent an effective registration statement or an exemption from the registration requirements under applicable federal and state securities laws. The information in Item 1.01 of this Current Report on Form 8-K is incorporated herein by this reference." A copy of the Securities Purchase Agreement is available at: http://is.gd/zNgufI About Pressure Biosciences Pressure BioSciences, Inc., headquartered in South Easton, Massachusetts, holds 14 United States and 10 foreign patents covering multiple applications of pressure cycling technology in the life sciences field. As reported by the Troubled Company Reporter on March 2, 2012, Boston-based Marcum LLP, expressed substantial doubt about Pressure Biosciences' 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 had recurring net losses and continues to experience negative cash flows from operations. The Company's balance sheet at Sept. 30, 2012, showed $1.91 million in total assets, $2.64 million in total liabilities and a $730,839 total stockholders' deficit. RADIAN GROUP: Unit Completes Commutation of Reinsurance Portfolio ----------------------------------------------------------------- Radian Group Inc. on Jan. 14 disclosed that on January 9, 2013, its financial guaranty insurance subsidiary, Radian Asset Assurance Inc., completed the commutation of its remaining reinsurance risk from Financial Guaranty Insurance Company (FGIC). As previously reported when the companies entered into the agreement, the outstanding par reinsured by Radian Asset from FGIC was $827 million as of September 30, 2012. Radian Asset made the expected commutation payment of $52.4 million to FGIC following approval of the transaction by the Supreme Court of the State of New York. This payment primarily represents existing loss reserves and unearned premium reserves for the portfolio, and therefore will not have a material impact on Radian's consolidated financial statements or Radian Asset's statutory capital position. The commuted portfolio represents 13 percent of Radian Asset's total reinsurance exposure as of September 30, 2012. "We continue to make important strides in reducing Radian's financial guaranty exposure, including many of the riskiest segments of the portfolio," stated Chief Executive Officer S.A. Ibrahim. "We are pleased to successfully complete this latest transaction, which reduces our total reinsurance portfolio by 13 percent and supports our company's capital management strategy." About Radian Headquartered in Philadelphia, Radian Group Inc. -- http://www.radian.biz/-- provides private mortgage insurance and related risk mitigation products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty Inc. These services help promote and preserve homeownership opportunities for homebuyers, while protecting lenders from default-related losses on residential first mortgages and facilitating the sale of low-downpayment mortgages in the secondary market. * * * As reported by the Troubled Company Reporter on Oct. 17, 2012, Standard & Poor's Rating Services raised its long-term issuer credit ratings on Radian Group Inc. (RDN) to 'CCC+' from 'CCC-' and MGIC Investment Corp. (MTG) to 'CCC+' from 'CCC'. The financial strength ratings for both RDN's and MTG's respective operating companies are unchanged. The outlook on both companies is negative. RESIDENTIAL CAPITAL: US May Object to Proposed $130M Mortgage Sale ------------------------------------------------------------------ Brian Mahoney of BankruptcyLaw360 reported that U.S. Attorney Preet Bharara told a New York bankruptcy court Thursday that the government may object to a proposal by bankrupt Residential Capital LLC to auction off $130 million worth of loans insured by the Federal Housing Administration, saying such a sale may extinguish its debt setoff rights tied to the loans. The government held short of objecting to the proposed auction but said it was reviewing the proposed sale to see if the auction stifles its practice of withholding FHA insurance payments on the government-guaranteed mortgages, the report added. 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). RESPONSE BIOMEDICAL: Expands U.S. Distribution for RAMP Products ---------------------------------------------------------------- Response Biomedical Corp. has entered into a distribution agreement with Laboratory Supply Company, Inc. (LABSCO), a leading distributor of innovative diagnostic technologies and laboratory products to hospitals, physician office laboratories and alternate healthcare settings with principal offices in Louisville, KY, USA, to distribute its Cardiovascular portfolio of RAMP products in the U.S. exclusively to hospitals with less than 150 beds. The U.S. Point of Care Testing (POCT) market is projected to be approximately $3.1B in 2013, representing the second largest In Vitro Diagnostic (IVD) category in the U.S. It is expected to continue to grow at 7.0% per year over the next several years. The distribution agreement was entered into between Response Biomedical's newly formed, wholly owned U.S. subsidiary Response Point of Care Inc. and LABSCO for an initial term of three years and is renewable annually thereafter upon mutual agreement. LABSCO will initially market Response's cardiovascular POC test panels on the RAMP Reader in all settings and on the RAMP 200 reader in laboratory settings. Response will continue to market the cardiovascular POC test panel on both the RAMP 200 reader and RAMP Reader outside the US, and the RAMP Flu A+B Assay and RAMP RSV Assay on the RAMP 200 reader globally where approved for sale by relevant regulatory authorities. "This is a very important agreement for Response as it marks a significant step into the U.S. market for POCT in the cardiovascular arena which is one of the largest markets in the world. The RAMP technology has been extremely well-received globally and we look forward to expanding this acceptance to U.S. based hospitals and laboratories. We believe that LABSCO has the experience and reputation to maximize our efforts to gain traction and to help us penetrate a market that we believe will greatly enhance our growth in the near term and beyond," commented Tim Shannon, Senior Vice President of World Wide Sales and Marketing for Response Biomedical Corp. The RAMP enabling platform is a portable scanning fluorescence quantitative analysis platform for near patient testing that enables rapid and robust quantitative results. The platform includes easy software upgrades, data management capabilities and unique interface options. The RAMP Reader features a small footprint and attractive ease of use for moderate throughput settings. The RAMP 200 Reader has innovative design features, including the multi-port capability to run up to 12 tests per hour on one module and up to 36 tests per hour, using three modules. This allows tests to be run on multiple patients simultaneously or multiple assays to be run for one patient. More information on the proprietary RAMP technology can be found at www.responsebio.com. "Our new agreement with Response Biomedical is very exciting. LABSCO is in a strong strategic position to reach out to hospitals of under 150 beds, regional reference labs and physician labs on behalf of our important new partner," says Hank Struik, chairman and chief executive officer of LABSCO. "With our team of laboratory experts and specialists, we look forward to advancing the representation of Response Biomedical's cardiac markers in an ever-changing, competitive market." About Response Biomedical Based in Vancouver, Canada, Response Biomedical Corporation develops, manufactures and sells diagnostic tests for use with its proprietary RAMP(R) System, a portable fluorescence immunoassay- based diagnostic testing platform. The RAMP(R) technology utilizes a unique method to account for sources of error inherent in conventional lateral flow immunoassay technologies, thereby providing the ability to quickly and accurately detect and quantify an analyte present in a liquid sample. Consequently, an end-user on-site or in a point-of-care setting can rapidly obtain important diagnostic information. Response Biomedical currently has thirteen tests available for clinical and environmental testing applications and the Company has plans to commercialize additional tests. As reported in the TCR on April 4, 2012, Ernst & Young LLP, in Vancouver, Canada, expressed substantial doubt about Response Biomedical'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 of the Company's recurring losses from operations. The Company's balance sheet at Sept. 30, 2012, showed C$15.4 million in total assets, C$15.9 million in total liabilities, and a stockholders' deficit of C$494,962. The Company has sustained continuing losses since its formation and at Sept. 30, 2012, had a deficit of C$112.9 million and for the nine month period ended Sept. 30, 2012, incurred negative cash flows from operations of C$4.1 million compared to C$2.3 million in the same period in 2011. Also, the Company had a C$3.4 million decrease in working capital, net of the warrant liability. "These conditions raise substantial doubt about the Company's ability to continue as a going concern." RG STEEL: PJM Can Apply Cash Collateral to Prepetition Claim ------------------------------------------------------------ WP Steel Venture LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to authorize and approve the stipulation among Debtor RG Steel Sparrows Point, LLC, PJM Interconnection L.L.C. and PJM Settlement, Inc. Pursuant to the operating agreement, reliability assurance agreement, and the provisions of the PJM Open Access Transmission Tariff, PJMS holds cash collateral in the amount of $3,885,684, to secure RG Steel's payment obligations under the PJM Agreements. RG Sparrows's outstanding prepetition obligations to PJMS under the PJM Agreements, the OATT and otherwise, totaled $1,222,091 in the aggregate. Due to the potential applicability of the automatic stay of section 362 of the Bankruptcy Code, PJMS has not applied the cash collateral to the prepetition claim. Pursuant to the terms of the stipulation, the parties agreed to permit the cash collateral to be applied to the prepetition claim and the return of excess cash collateral. The remaining material terms of the stipulation are summarized as: a) On the effective date, the PJM Parties will be authorized to apply the cash collateral to the prepetition claim, the automatic stay of Section 362 of the Bankruptcy Code will be deemed modified to the extent necessary to permit the PJM Parties to effect the cash collateral application. b) No later than two business days after the effective date, the PJM Parties will return cash collateral in the amount of $2,463,592 to RG Sparrows. c) The PJM Parties will retain cash collateral in the amount of $200,000 as security for any Remaining Obligations of RG Sparrows to the PJM Parties. Beginning on Jan. 31, 2013, and approximately every 90 days thereafter, the parties will cooperate in good faith to determine the amount of cash collateral reasonably necessary to secure RG Sparrows' remaining obligations to the PJM Parties. d) Upon the cash collateral application: (a) Claim No. 1909, filed by PJMS, will be deemed reduced by the amount of the Cash Collateral Application; and (b) Claim No. 1916, filed by PJMS, will be disallowed and expunged. e) The stipulation would permit the PJM Parties from time to time to setoff or recoup obligations due to the PJM Parties from RG Sparrows under the PJM Agreements, including without limitation, the remaining obligations, against any obligations due from the PJM Parties to RG Sparrows, and will lift the automatic stay to the extent necessary to effect such setoffs or recoupments. f) The Stipulation will be effective upon the date on which both of these conditions are satisfied: (a) the stipulation will have been executed by each party; and (b) the Bankruptcy Court will have entered an order approving the stipulation. The Debtors note that parties as counsels for the Committee, agent for their second lien lenders, and Renco Group, Inc., the Debtors' third lien lender, do not object to the relief requested. A hearing on Jan. 15, 2013, at 10 a.m. has been set. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. RG STEEL: Signs Settlement with RCC and Gooder-Henrichsen --------------------------------------------------------- WP Steel Venture LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware for authorization to enter into a Settlement Agreement by and among RCC Fabricators, Inc., RG Steel Wheeling, LLC, a/k/a Wheeling Corrugating Company ("WC"), and Falpeg Capital, LLC, d/b/a Gooder-Henrichsen Company ("GH"). Prior to the Petition Date, RCC, a steel fabricator, purchased steel joists and steel decking from WC for use in the Toms River Parking Garage Project in New Jersey. WC sourced the steel joists from GH. These transactions, as of the Petition Date, resulted in two outstanding invoices. RCC owed a total of $153,470 to WC for the steel joists and steel decking (the "WC Receivable"), and Wheeling owed $115,230.00 to GH for the steel joists (the "GH Receivable"). Following the Petition Date, RCC became concerned about GH's potential ability to assert a lien on the Toms River Project for non-payment for the steel joists, and refused to pay the full amount of the WC Receivable to WC, because WC indicated that it might need Court authority to satisfy the prepetition GH Receivable. Instead, RCC proposed to pay WC the difference between the Receivables, and pay the GH Receivable directly to GH. However, WC expressed concerns over the propriety of RCC's proposal given applicable provisions of the Bankruptcy Code. On June 22, 2012, in an effort to collect the GH Receivable, GH served notice on the Township of Toms River and Hall Building, Corp., the contractor for the Toms River Project, that GH claimed a lien on any money, bonds or warrants due or to become due to Hall on account of the unpaid GH Receivable. The Settlement Agreement allows the estates to promptly collect the difference between the Receivables, and authorizes RCC to pay GH directly the amount it is owed, less a $13,096 credit to RCC as reimbursement for costs and fees incurred by reason of the GH Lien. A copy of Settlement Agreement is available at: http://bankrupt.com/misc/rgsteel.doc1578.pdf About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. RIVER CANYON: Plan Solicitation Exclusivity Ends April 30 --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado extended until April 30, 2013, River Canyon Real Estate Investments, LLC's exclusive period to solicit acceptances for the proposed Plan of Reorganization. The Debtor filed its Plan on Sept. 20, 2012, within 120 days after the Petition Date. The Debtor will maintain the exclusive right to propose a plan during the period. The Debtor has addressed the limited objection filed by United Water and Sanitation District through negotiation of the terms of the order. About River Canyon River Canyon Real Estate Investments, LLC, is the developer of the Ravenna residential real estate project in Douglas County, Colorado and the owner of The Golf Club at Ravenna, among other assets. River Canyon filed a Chapter 11 petition (Bankr. D. Colo. Case No. 12-20763) on May 23, 2012, in Denver as part of its settlement negotiations with lender Beal Bank Nevada, and to preserve the value of its assets. At Beal Bank's behest, Cordes & Company was named, effective Oct. 15, 2010, as receiver for the 643-acre real estate development with golf course in Douglas County, Colorado. The Debtor disclosed assets of $19.7 million and liabilities of $45.3 million in its schedules. The property and golf course are estimated to be worth $11 million, and secures a $45 million debt. Judge Elizabeth E. Brown presides over the case. The Debtor is represented by Sender & Wasserman, P.C., as its Chapter 11 counsel. Alan Klein, Glenn Jacks, Dan Hudick, and Bill Hudick own most of the Debtor. Mr. Jacks, which has a 12.8% membership interest, signed the Chapter 11 petition. Richard A. Wieland, the U.S. Trustee for Region 19, was unable to form an official committee of unsecured creditors because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. RIVER CANYON: Exit Loans, Income to Fund Plan Payments ------------------------------------------------------ According to the disclosure statement explaining River Canyon Real Estate Investments, LLC's First Amended Plan dated Nov. 28, 2012, to ensure feasibility and provide for payment of all Effective Date obligations under the Plan, the Debtor is pursuing exit financing opportunities. The Debtor will provide proof of the financing and its ability to perform under the Plan, including funding all obligations that will come due on the Effective Date of the Plan, at least 30 days prior to the confirmation hearing. In addition, future payments and distributions under the Plan will be funded by a combination of operating income and exit financing. The Debtor anticipates that operating income will increase after the Effective Date and the many issues that have been negatively impacting marketability of the lots are resolved. The Debtor also anticipates the sale of The Golf Club at Ravenna and all attendant property, including the lots comprising the golf course. Finding a buyer for the golf club would likely result in the construction of a clubhouse much sooner than could be accomplished by the Debtor. The Debtor also intends to obtain approval of minor zoning modifications to the development to increase revenues. The project is currently zoned for 243 lots and a total of 249 dwelling units. However, 23 lots in one of the project neighborhoods -- Corda Bella -- are zoned for duplex construction. In the long term, the Debtor intends to amend its master plan to allow for a density of 315 dwelling units. The Debtor believes that obtaining authority to sell duplex lots will be a win-win proposition because the price point is significantly lower, resulting in a much larger pool of potential purchasers, and because the increase in density will increase the tax base. With respect to the approximately $680,000 in membership deposits, the Debtor will turnover the monies to any purchaser of The Golf Club at Ravenna provided the purchaser is bound to the same requirement of constructing a clubhouse. In the event The Golf Club at Ravenna is not sold, the Debtor will hold the funds until a clubhouse is constructed. Under the Plan, general unsecured creditors, with claims expected to total $46.8 million, will each receive a pro rata distribution in the amount of 5% of the holder's claim. Distributions will be made in three equal annual installment payments beginning on the Effective Date. If the claims total $46.8 million, the 5% payment will equal $2,340,000 and the annual payments will be in the amount of $780,000. All interests in the Debtor will be canceled upon the Effective Date. On the Effective Date, 100% of the membership interests in the Reorganized Debtor will be issued to Lazarus Investments, LLC in full satisfaction of the Debtor's repayment obligations under the debtor-in-possession financing agreement approved by the Bankruptcy Court. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/RIVER_CANYON_ds_1amended.pdf About River Canyon Real Estate River Canyon Real Estate Investments, LLC, is the developer of the Ravenna residential real estate project in Douglas County, Colorado and the owner of The Golf Club at Ravenna, among other assets. River Canyon filed a Chapter 11 petition (Bankr. D. Colo. Case No. 12-20763) on May 23, 2012, in Denver as part of its settlement negotiations with lender Beal Bank Nevada, and to preserve the value of its assets. At Beal Bank's behest, Cordes & Company was named, effective Oct. 15, 2010, as receiver for the 643-acre real estate development with golf course in Douglas County, Colorado. The Debtor disclosed assets of $19.7 million and liabilities of $45.3 million in its schedules. The property and golf course are estimated to be worth $11 million, and secures a $45 million debt. Judge Elizabeth E. Brown presides over the case. The Debtor is represented by Sender & Wasserman, P.C., as its Chapter 11 counsel. Alan Klein, Glenn Jacks, Dan Hudick, and Bill Hudick own most of the Debtor. Mr. Jacks, which has a 12.8% membership interest, signed the Chapter 11 petition. Richard A. Wieland, the U.S. Trustee for Region 19, was unable to form an official committee of unsecured creditors because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. ROBERT T. KOGER: $22.8-Mil. Default Judgment Vacated by Court ------------------------------------------------------------- The Maryland District Court in Montgomery County has vacated a $22.8 million default judgment against Robert T. Koger and Molinaro Koger (MK) that was awarded to Host Hotels & Resorts in July 2012 for a discovery sanction. The judgment was vacated as part of a settlement between the Host entities and the Koger entities in which Host received $1.55 million in insurance coverage proceeds under an Errors & Omission Insurance Policy. There was no other monetary or any other consideration to the settlement. In addition, Host, Koger and Molinaro Koger all agreed to discharge any claims, demands or liabilities related to the dispute through the settlement date. The arm's-length agreement states that nothing contained in the settlement shall be deemed that any party has breached any obligation or engaged in any wrongdoing or misconduct. SAAB AUTOMOBILE: Launches Saab Secure Program for Vehicle Owners ---------------------------------------------------------------- Saab Automobile Parts North America (SPNA) on Jan. 10 announced its Saab Secure program. The program was developed to support those 2010 and 2011 model year Saab owners left without warranty coverage due to the bankruptcy of Saab Automobile AB in Sweden. All 2010 and 2011 model year Saab vehicle owners are eligible to come in for a no charge initial oil change and service, which includes BG Products, Inc. engine oil additives. This service initiates the Limited Lifetime Protection Plan backed by BG. As long as the owner continues to service their vehicle within the required intervals and at a Saab Official Service Center, the protection plan will continue for the life of the vehicle. In addition to the Limited Lifetime BG Protection Plan, Saab Secure will offer 2010 and 2011 model year vehicles, with up to 70,000 miles, a menu of Saab Secure vehicle service contracts that provide extended coverage levels and terms at affordable prices. Coverage is available from Basic Care powertrain coverage to Premier Care comprehensive component coverage, and is available in terms from 1 to 5 years from the date of contract purchase. These products are being launched in partnership with Pablo Creek Services, Inc. "Just over a year ago the news was not good. Saab owners in North America and globally had just learned of the bankruptcy of one of the world's most cherished automobile brands," said Tim Colbeck, President and CEO of SPNA. "Today they are hearing some good news about parts, service and vehicle coverage. It is news Saab owners and the Saab network deserve, and I'm pleased to announce our new programs and partner companies, who are all committed to serving Saab owners in North America." Today's news follows the announcement last month that SPNA and GM entered into a Warranty Services Agreement that authorizes SPNA to provide warranty administration and related services through SPNA's network of Warranty Service Providers for model year 2009 and prior Saab vehicles still covered under the GM limited warranty. The Saab Secure program launch marks the culmination of a busy startup period for SPNA. In the spring of 2012, Saab Automobile Parts AB in Sweden established SPNA as its North American subsidiary. In early June 2012, SPNA purchased the remaining parts inventory from the Saab Cars bankruptcy estate and began operations in North America. Since then, SPNA has: -- Established a network of 179 Official Service Centers in the US and Canada. -- Returned availability of Saab parts back to the high levels that existed prior to the Saab Automobile AB bankruptcy. -- Entered into an agreement with General Motors to administer warranty services on 2009 and prior model years, providing a seamless warranty experience for those Saab owners. -- Launched the Saab Secure program to support owners of 2010 and 2011 Saab models. -- Launched a North America Technical Assistance Center to provide technical help for Saab Service Centers in providing high quality repairs for Saab owners. -- Launched a North America Customer Assistance Center on January 7, 2013 to support all Saab customers in North America needing assistance with inquiries about parts, accessories, service and technical support. -- Launched a new SPNA website, Saab.com and Facebook page www.facebook.com/Saab to share up to date information about the company, service facilities and current promotions. "The company has been working hard to build an infrastructure for the future. It's great that we are now able to launch these new programs, providing added support to Saab owners and the Saab service network. We want to keep Saab cars and owners on the road well into the future," Mr. Colbeck concluded. About Saab Automobile Parts North America Saab Automobile Parts North America was founded to ensure Saab owners in North America are supported with Genuine Parts, Accessories, Technical Support and Repair Service for years to come. SPNA is a DBA for North America Distribution Services, a new company, separate and independent from the Saab Automobile companies that entered bankruptcy in 2011 and 2012. The company is headquartered in suburban Detroit, Michigan; and operates a 153,000 square foot parts warehouse in Allentown, Pennsylvania. There are approximately 40 employees and contractors in the company. Ownership SPNA is a wholly owned subsidiary of Saab Automobile Parts AB, a global spare parts and logistics company, headquartered in Sweden. Saab Automobile Parts AB in Sweden was part of the Saab Cars family of companies. However, unlike Saab Automobile AB, Saab Automobile Parts AB did not enter bankruptcy. The company's shares are now fully owned by the Swedish government, who recently formalized their ownership interest. The company has been placed with the Ministry of Finance which currently runs about 36 companies out of the 55 companies wholly or partly owned by the Swedish government. The government has stated their intention is to be a stable owner and develop the company further. Network SPNA currently has 179 Official Service Centers throughout North America, many of whom are former Saab dealers. The network continues to expand as the company identifies areas where Saab owners could use more support. A full listing of Saab Official Service and Parts Centers is available on Saab.com. Products and Services SPNA is the exclusive authorized distributor to the North American market of the full line of Genuine Saab Parts and Accessories. In addition, they are the exclusive provider of Genuine Saab Service through its network of Saab Official Service and Parts Centers. About Saab Automobile AB and Saab Cars N.A. Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. Saab halted production in March 2011 when it ran out of cash to pay its component providers. On Dec. 19, 2011, Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy after running out of cash. Some of Saab's assets were sold to National Electric Vehicle Sweden AB, a Chinese-Japanese backed start-up that plans to make an electric car using Saab Automobile's former factory, tools and designs. On Jan. 30, 2012, more than 40 U.S.-based Saab dealerships filed an involuntary Chapter 11 petition for Saab Cars North America, Inc. (Bankr. D. Del. Case No. 12-10344). The petitioners, represented by Wilk Auslander LLP, assert claims totaling US$1.2 million on account of "unpaid warranty and incentive reimbursement and related obligations" or "parts and warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia Gentile & Associates, in New York, signed the Chapter 11 petition on behalf of the dealers. The dealers want the vehicle inventory and the parts business to be sold, free of liens from Ally Financial Inc. and Caterpillar Inc., and "to have an appropriate forum to address the claims of the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg News. Saab Cars N.A. is the U.S. sales and distribution unit of Swedish car maker Saab Automobile AB. Saab Cars N.A. named in December an outside administrator, McTevia & Associates, to run the company as part of a plan to avoid immediate liquidation following its parent company's bankruptcy filing. On Feb. 24, 2012, the Court granted Saab Cars NA relief under Chapter 11 of the Bankruptcy Code. Donlin, Recano & Company, Inc., was retained as claims and noticing agent to Saab Cars NA in the Chapter 11 case. On March 9, 2012, the U.S. Trustee formed an official Committee of Unsecured Creditors and appointed these members: Peter Mueller Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander LLP as general bankruptcy counsel, and Polsinelli Shughart as its Delaware counsel. SCHOOL SPECIALTY: Zazove Associates Holds 12.5% Equity Stake ------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Zazove Associates, LLC, and its affiliates disclosed that, as of Dec. 31, 2012, they beneficially own 2,743,591 shares of common stock of School Specialty Inc. representing 12.51% of the shares outstanding. A copy of the filing is available for free at http://is.gd/SSdyRq About School Specialty School Specialty is a leading education company that provides innovative and proprietary products, programs and services to help educators engage and inspire students of all ages and abilities to learn. The company designs, develops, and provides preK-12 educators with the latest and very best curriculum, supplemental learning resources, and school supplies. Working in collaboration with educators, School Specialty reaches beyond the scope of textbooks to help teachers, guidance counselors and school administrators ensure that every student reaches his or her full potential. School Specialty's balance sheet at Oct. 27, 2012, showed $494.52 million in total assets, $394.58 million in total liabilities and $99.93 million in total shareholders' equity. School Specialty and its subsidiaries entered into two forbearance agreements with their lenders following events of default. Under both Forbearance Agreements, the lenders agreed to forbear from exercising their rights and remedies under the credit agreements until Feb. 1, 2013. SEDONA DEVELOPMENT: Feb. 5 Hearing on Adequacy of Plan Outline -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona will convene a hearing on Feb. 5, 2013, at 11 a.m., to consider adequacy of the Disclosure Statement explaining the Plan of Reorganization dated Dec. 3, 2012, proposed by debtors Sedona Development Partners, LLC; and The Club at Seven Canyons, LLC, with lender Specialty Mortgage Corp. Specialty Mortgage is primary prepetition lender and serves as loan servicer pursuant to that certain Master Loan Participation and Servicing Agreement on behalf of the Specialty Mortgage loan participants or their designees. The Debtors have filed a Joint Plan with Specialty Mortgage after months of both the Debtors and Specialty Mortgage proffering individual, competing plans. The Debtors say that the complicated lien structure on the Seven Canyons development, together with the declining economic environment for golf courses and significant debt on the Debtors' properties, made reorganization of the Debtors difficult. The Joint Plan resolves the complicated lien structure on the Debtors' property, and, through either a turnover of assets or purchase by Specialty, allows the golf course development properties to be consolidated and continue as an one of the premier golf course resorts in the country. The Joint Plan further allows all current dues paying members to continue to enjoy the golf course and other amenities and provides for the continued development of the remaining Seven Canyons properties. According to the Disclosure Statement, the Plan provides for a complete settlement between Debtors and Specialty, including, the return of Specialty's collateral to the Specialty Mortgage loan participants or their designees, subject to existing property taxes, except for the 70 Parcel A Villa units, which will be released by Specialty. The Debtors will be responsible for payment of other administrative expenses and will do so with financing from Seven Canyons Recap, LLC and 7C Clubhouse Lender, LLC in the total amount of $1,550,000 plus the Debtors'/Reorganized Debtor's fees and costs accruing from Sept. 1, 2012 (the "New Loan"). Among other expenses, the New Loan will fund administrative expenses as provided in the Plan and will fund up to $250,000 for refurbishment of the Villa Spa Units. The New Loan may be advanced by Recap under existing loan documents, or may be documented by new notes secured by a lien upon the Parcel A Villa Fractional Intervals in a position behind the existing liens. The New Loan will bear interest at the rate of 12% per annum. No interest will be payable for eighteen months after the Effective Date. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/SEDONA_DEVELOPMENT_ds.pdf About Sedona Development Partners Sedona Development Partners owns an 18-hole golf course and related properties, including luxury villas, a practice park, range house, tennis courts and related facilities in Sedona, Arizona, known generally as Seven Canyons. The Club at Seven Canyons, LLC, operates the golf course and related facilities for SDP. SDP is the manager and sole member of the Club. Sedona Development Partners filed for Chapter 11 bankruptcy protection (Bankr. D. Ariz. Case No. 10-16711) on May 27, 2010. The Club at Seven Canyons filed a separate Chapter 11 petition (Bankr. D. Ariz. Case No. 10-16714). John J. Hebert, Esq., Philip R. Rudd, Esq., and Wesley D. Ray, Es., at Polsinelli Shughart PC, in Phoenix, Ariz., assist the Debtors in their restructuring efforts. Lender Specialty Trust is represented by Joseph E. Cotterman, Esq., and Nathan W. Blackburn, Esq., at Gallagher & Kennedy, P.A. Sedona disclosed $29,171,168 in assets and $121,679,994 in liabilities. Sedona Development Partners, LLC, and The Club at Seven Canyons, LLC, filed with the U.S. Bankruptcy Court for the District of Arizona on June 17, 2011, a second amended joint disclosure statement in support of their second amended joint pan of reorganization. The Debtors' disclosure statement was approved on June 28, 2011. A Sept. 4 hearing has been set to consider approval of the disclosure statements explaining the competing plans for debtors Sedona Development Partners, LLC, and The Club at Seven Canyons, LLC. One plan was filed by Specialty Mortgage and the second was filed by the Debtors. SINCLAIR BROADCAST: Charger Corp Discloses 10% Equity Stake ----------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, First Trust Portfolios L.P., First Trust Advisors L.P., and The Charger Corporation disclosed that, as of Dec. 31, 2012, they beneficially own 5,312,799 shares of common stock of Sinclair Broadcast Group, Inc., representing 10.15% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/bmSjq9 About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. The Company said in the Form 10-Q for the quarter ended March 31, 2012, that any insolvency or bankruptcy proceeding relating to Cunningham, one of its LMA partners, would cause a default and potential acceleration under a Bank Credit Agreement and could, potentially, result in Cunningham's rejection of the Company's seven LMAs with Cunningham, which would negatively affect the Company's financial condition and results of operations. The Company's balance sheet at Sept. 30, 2012, showed $2.24 billion in total assets, $2.29 billion in total liabilities, and a $52.38 million total deficit. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.- based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. In September 2010, Moody's raised its ratings for Sinclair Broadcast and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. SNO MOUNTAIN: Files Schedules of Assets and Liabilities ------------------------------------------------------- Sno Mountain LP filed its schedules of assets and liabilities with the U.S. Bankruptcy Court for the Eastern District of Pennsylvania, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property Unknown B. Personal Property Unknown C. Property Claimed as Exempt D. Creditors Holding Secured Claims $14,691,958 E. Creditors Holding Unsecured Priority Claims $1,621,660 F. Creditors Holding Unsecured Non-priority $7,921,187 Claims ----------- ----------- TOTAL Unknown $24,234,806 About Sno Mountain Various parties -- predominated by various limited partners of Sno Mountan LP, including Richard Ford, Charles Hertzog, Edward Reitmeyer, who are each guarantors of certain obligations owing by Sno Mountain -- filed an involuntary Chapter 11 petition against Sno Mountain (Bankr. E.D. Pa. Case No. 12-19726) On Oct. 15, 2012. The other petitioning parties include Wynnewood Capital Partners, L.L.C., t/a WCP Snow Mountain Partners, L.P., and Kathleen Hertzog. The Alleged Debtor is the owner and operator of a popular ski mountain resort and water park known as "Sno Mountain," located at 1000 Montage Mountain Road in Scranton, Pennsylvania. The Debtor's bankruptcy case is a "single asset real estate" case within the meaning of 11 U.S.C. Sec. 101(51)(B). Judge Jean K. FitzSimon oversees the case. Brian Joseph Smith, Esq., at Brian J. Smith & Associates PC, represents the petitioning creditors. Gary Seitz has been appointed as trustee overseeing the bankruptcy of the Sno Mountain recreation complex. SNO MOUNTAIN: Meeting to Form Creditors' Panel Set for Jan. 28 -------------------------------------------------------------- Roberta A. DeAngelis, the United States Trustee for Region 3, will hold an organizational meeting on Jan. 28, 2013, at 1:30 p.m. in the bankruptcy case of Sno Mountain, LP. The meeting will be held at: Office of the United States Trustee 833 Chestnut Street, Suite 501 Philadelphia, PA 19107 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. Various parties -- predominated by various limited partners of Sno Mountan LP, including Richard Ford, Charles Hertzog, Edward Reitmeyer, who are each guarantors of certain obligations owing by Sno Mountain -- filed an involuntary Chapter 11 petition against Sno Mountain (Bankr. E.D. Pa. Case No. 12-19726) On Oct. 15, 2012. The other petitioning parties include Wynnewood Capital Partners, L.L.C., t/a WCP Snow Mountain Partners, L.P., and Kathleen Hertzog. The Alleged Debtor is the owner and operator of a popular ski mountain resort and water park known as "Sno Mountain," located at 1000 Montage Mountain Road in Scranton, Pennsylvania. The Debtor's bankruptcy case is a "single asset real estate" case within the meaning of 11 U.S.C. Sec. 101(51)(B). Judge Jean K. FitzSimon oversees the case. Brian Joseph Smith, Esq., at Brian J. Smith & Associates PC, represents the petitioning creditors. Gary Seitz has been appointed as trustee overseeing the bankruptcy of the Sno Mountain recreation complex. SOUTH PLAINFIELD: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: South Plainfield Transfer & Recycling Corporation 2101 Roosevelt Avenue South Plainfield, NJ 07080 Bankruptcy Case No.: 13-10605 Chapter 11 Petition Date: January 11, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Trenton) Judge: Kathryn C. Ferguson Debtor's Counsel: Daniel Stolz, Esq. WASSERMAN, JURISTA & STOLZ 225 Millburn Avenue, Suite 207 P.O. Box 1029 Millburn, NJ 07041-1712 Tel: (973) 467-2700 E-mail: dstolz@wjslaw.com Scheduled Assets: $1,247,319 Scheduled Liabilities: $1,859,394 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/njb13-10605.pdf The petition was signed by John P. Glauda, president. SOUTHERN AIR: Lowenstein Sandler LLP Is Committee Counsel --------------------------------------------------------- Lowenstein Sandler PC, co-counsel to the Official Committee of Unsecured Creditors in the Chapter 11 cases of Southern Air Holdings, Inc., et al., notifies the Court that the law practice of Lowenstein Sandler is now being conducted by Lowenstein Sandler LLP in all of its offices effective Jan. 1, 2013. About Southern Air Based in Norwalk, Connecticut, military cargo airline Southern Air Inc. -- http://www.southernair.com/-- its parent Southern Air Holdings Inc. and their affiliated entities filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12690 to 12-12707) in Wilmington on Sept. 28, 2012, blaming the decline in business from the U.S. Department of Defense, which reduced its troop count in Afghanistan and hired Southern Air less frequently. Bankruptcy Judge Christopher S. Sontchi presides over the case. Brian S. Rosen, Esq., Candace Arthur, Esq., and Gabriel Morgan, Esq., at Weil, Gotshal & Manges LLP; and M. Blake Cleary, Esq., and Maris J. Kandestin, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtor's counsel. Zolfo Cooper LLC serves as the Debtors' bankruptcy consultant and special financial advisor. Kurtzman Carson Consultants, LLC, serves as claims and notice agent. CF6-50, LLC, debtor-affiliate, disclosed $338,925,282 in assets and $288,000,000 in liabilities as of the Chapter 11 filing. The petition was signed by Jon E. Olin, senior vice president. Canadian Imperial Bank of Commerce, New York Agency, the DIP agent and prepetition agent, is represented by Matthew S. Barr, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP; and Mark D. Collins, Esq., and Katherine L. Good, Esq., at Richards Layton & Finger PA. Stephen J. Shimshak, Esq., and Kelley A. Cornish, Esq., at Paul Weiss Rifkind Wharton & Garrison LLP; and Mark E. Felger, Esq., at Cozen O'Connor, represent Oak Hill Capital Partners II, LP, OH Aircraft Acquisition LLC, and Oak Hill Cargo 360 LLC. The Debtors' Plan provides that lenders agreed to accept ownership of the company as payment for their $288 million loan. On Nov. 21, 2012, Roberta DeAngelis, U.S. Trustee for Region 3, appointed the statutory committee of unsecured creditors. Lowenstein Sandler PC and Pachulski, Stang, Ziehl & Jones LLP serves as its co-counsels, and Mesirow Financial Consulting LLC serves as its financial advisor. SOUTHERN GENERAL: A.M. Best Lowers Fin'l Strength Rating to 'B' --------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating (FSR) to B (Fair) from B++ (Good) and the issuer credit ratings (ICR) to "bb+" from "bbb" of Southern General Insurance Company (SGIC) and GreenStar Insurance Company (GreenStar), an affiliate of SGIC (both domiciled in Marietta, GA). The outlook for the FSR is stable, while the outlook for the ICRs has been revised to negative from stable. The rating actions reflect SGIC's continued operating losses in 2011 and the first nine months of 2012, which resulted in combined and operating ratios that compare unfavorably with results for the private passenger non-standard composite. Additionally, SGIC policyholders' surplus and risk-adjusted capitalization declined as a result of poor operating performance and a significant adjustment to premium receivables from its managing general agent, The Insurance House, Inc. The company's negative operating losses resulted from a trend of underwriting losses driven by inadequate rates, increased claim severity that led to adverse prior year loss reserve development, increased competitive market conditions and an elevated expense structure. Despite the potential for execution risk, the FSR outlook is stable based upon the current projections and initiatives being undertaken by SGIC to reduce its expenses and return it to profitability. In response to declining operating trends, SGIC has taken aggressive actions to reduce expenses, optimize territorial rates, withdraw from South Carolina and launch a new point-of-sale technology program. Partially offsetting these negative rating factors is SGIC's adequate risk-adjusted capitalization and long-standing agency relationships and local market presence. Although SGIC's FSR outlook is stable, there may be potential future negative rating actions, if it fails to execute on its recovery plans and continues to report operating losses, which further erodes policyholders' surplus and risk-adjusted capitalization as measured by Best's Capital Adequacy Ratio (BCAR). The rating actions for GreenStar recognize its changing profile, the uncertainty that exists to successfully market its private passenger non-standard automobile coverage to metropolitan areas and its erratic operating performance in recent years. Over the near term, there may be negative rating actions if the company does not substantially meet its projections, which include a greater decline in its operating losses, policyholders' surplus and risk-adjusted capitalization, as determined by BCAR. SOUTHERN ONE: Files Schedules of Assets and Liabilities ------------------------------------------------------- Southern One Twenty One Investments Ltd. filed its schedules of assets and liabilities with the U.S. Bankruptcy Court for the Eastern District of Texas, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $14,000,000 B. Personal Property $41 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $9,837,157 E. Creditors Holding Unsecured Priority Claims $353 F. Creditors Holding Unsecured Non-priority $6,810,696 Claims ----------- ----------- TOTAL $14,900,041 $16,648,206 Based in Addison, Texas, Southern One Twenty One Investments Ltd. filed for Chapter 11 protection on Dec, 3, 2012 (Bankr. E.D. Tex. Case No. 12-43311). Nicole L. Hay, Esq., at Hiersche Hayward Drakeley & Urbach P.C., represents the Debtor. SOUTHERN PACIFIC: DBRS Assigns (P)B(low) Issuer Rating ------------------------------------------------------ DBRS has assigned a provisional Issuer Rating of B (low) with a Stable trend to Southern Pacific Resource Corp. (STP or the Company). DBRS has also assigned a provisional rating of B (low) with a Stable trend and a provisional recovery rating of RR4 to STP's proposed Senior Secured Second Lien Notes (the Notes). The Notes, estimated at up to $300 million, are structurally subordinated to the Company's secured first-lien $30 million bank facility and rank ahead of the $172.5 million convertible debentures. STP's cash flow generation capability will be largely driven by its successful production ramp-up at the STP-McKay oil sands steam-assisted gravity drainage (SAGD) project Phase 1 (STP- McKay), with a bitumen processing design capacity of 12,000 barrels per day (bbl/d). Production should grow to the permitted capacity by late 2013 or early 2014 if there are no material operational challenges. Successful ramp-up of production at STP- McKay could have positive implications for the ratings. Based on DBRS estimates, STP would generate positive cash flow once STP- McKay produces at over 80% of design capacity (assuming West Texas Intermediate (WTI) oil prices remain above $80 per barrel). As STP-McKay is still in the early stage of production ramp-up (approximately 1,200 bbl/d in December 2012), reservoir quality and production reliability have yet to be proven. Material delays in production ramp-up, particularly in a significantly lower oil pricing environment, would have negative implications for the assigned ratings. The ratings also factor in the Company's limited access to pipeline infrastructure. STP has mitigated this by entering into a five-year agreement for rail transportation to the U.S. Gulf Coast, securing access for all projected STP-McKay production and not being subject to the significant level of volatility recently experienced with heavy oil pricing in Canada. However, the use of truck and rail is considerably more expensive than pipelines, and netbacks are highly sensitive to Brent pricing fluctuations. STP's financial and liquidity profiles have remained weak relative to its DBRS-rated peers. Weak cash flow coupled with significant capital spending has resulted in material free cash flow deficits and has pressured the balance sheet. As the Company continues to pursue elevated levels of capex (e.g., STP-McKay Phase 1 Expansion and Phase 2 projects), free cash flow deficits are expected to continue and require external funding. Key challenges facing the Company include the following, which are discussed in detail in the Rating Considerations Details section of the report: (1) weak financial and liquidity profiles, (2) limited proven track record, (3) high up-front capital spending commitments and cost overrun risk associated with oil sands project expansion, (4) reliance on a single project and (5) limited access to pipeline capacity. SRKO FAMILY: Signs Deal Resolving Objection to Building Sale ------------------------------------------------------------ First American State Bank, C. Randel Lewis, the Chapter 11 trustee of the Jannie Richardson bankruptcy estate, and the SRKO Family Limited Partnership, entered into a stipulation regarding the motions for orders to: (i) employ NRC Realty & Capital Advisors, LLC as exclusive real estate agent to conduct auction of real properties; (ii) authorize an auction to solicit bids for the sale of certain of the Debtor's real estate holdings; and (iii) approve sale procedures. Jannie Richardson, LLC is the owner of three buildings located at 5426 N. Academy Blvd., 5446 N. Academy Blvd.; and 5526 N. Academy Blvd., Colorado Springs, Colorado. FASB is the beneficiary of deeds of trust on the LLC Buildings securing a loan from FASB to JR, LLC. The Richardson Bankruptcy estate is the owner of a fourth building located at 5540 N. N. Academy, Colorado Springs, Colorado. The stipulation incorporates the discussions among parties. The parties agree that: -- FASB will have the right to submit a credit bid on the LLC buildings; -- FASB will have the absolute and sole right to accept or reject the trustee's selection of any bids relating to the LLC Buildings, if any, individually or collectively; -- The order approving the sale motion will include language satisfactory to FASB regarding the trustee's authority to sell otherwise dispose of the LLC Buildings; and -- The LLC Buildings will be marketed and sold separately from the estate building, the sale proceeds will be allocated separately and no sale proceeds from the sale of the estate building will be allocated to the LLC Buildings and no sale proceeds from the sale of the estate of the LLC Buildings will be allocated to the estate Building. About The SRKO Family LP The SRKO Family Limited Partnership, dba Colorado Crossing, is based in Colorado Springs, Colorado. SRKO Family is the owner of the financially troubled Colorado Crossing project. The Company was run by Colorado Springs developer Jannie Richardson. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 10-13186) on Feb. 19, 2010. Kutner Miller Brinen, P.C. represents the Debtor in its restructuring effort. The Debtor disclosed $34,421,448 in assets and $80,619,854 in liabilities as of the Petition Date. Charles F. McVay, The U.S. Trustee for Region 19, notified the Court that he was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of SRKO Family Limited Partnership. STAMP FARMS: Members of Official Creditors Committee ---------------------------------------------------- Daniel M. McDermott, United States Trustee for Region 9, appointed five members to the official committee of unsecured creditors in the Chapter 11 cases of Stamp Farms, LLC, et al. The Creditors Committee members are: 1. Agri-Nutrient Application L.L.C. c/o John Stapel 2063 Michael S.W. Wyoming, MI 49509 Tel: (616)291-4605 2. Koviack Irrigation and Farm Services c/o Terry Koviack 52664 U.S. 131 Three Rivers, MI 49093 Tel: (269)273-3010 Fax: (269)273-3015 E-mail: koviackirr@comcast.net 3. Ronald Gless 26371 Jefferson Center Street Cassopolis, MI 49031 Tel: (269)445-3132 E-mail: TLGless@hotmail.com 4. RCS c/o Edward Boyer 70750 Union Road Union, MI 49130 Tel: (574)215-8100 Fax: (269)641-5346 5. Lee Franz 50321 Phillips Road Dowagiac, MI 49047 Tel: (269)357-4658 Fax: (269)782-2257 E-mail: cfranzkraft@gmail.com About Stamp Farms Stamp Farms, L.L.C., and three affiliates sought Chapter 11 protection (Bankr. W.D. Mich. Lead Case No. 12-10410) on Nov. 30, 2012, in Grand Rapids, Michigan. Stamp Farms began in 1968 with its purchase of 168 acres of farmland in Decatur, Michigan. The family was also heavily involved in the swine industry, operating a 500 sow swine operation until 1995. In 1997, Mike Stamp took over operations of Stamp Farms' 1500 acres and has grown the farm operation to cover 20,000+ acres across six southwestern Michigan counties. Stamp Farms estimated at least $10 million in assets and at least $50 million in liabilities in its bare-bones petition. Mr. Stamp also filed a Chapter 11 petition (Case No. 12-10430). Judge Scott W. Dales oversees the case. The Debtor has hired the law firm of Varnum LLP as counsel. STRATUS PROPERTIES: Refinances Comerica Revolving Credit Facility ----------------------------------------------------------------- Stratus Properties Inc. on Jan. 7 disclosed that effective December 31, 2012, it entered into a Loan Agreement with Comerica Bank that renews, extends and modifies Stratus' $45.0 million credit facility with Comerica, comprised of a $35.0 million revolving line of credit and a $10.0 million term loan, that was scheduled to mature on December 31, 2012. William H. Armstrong III, Chairman of the Board, Chief Executive Officer and President of Stratus, stated, "We are pleased to announce that we successfully completed the process to restructure our debt, including reducing interest rates and extending maturities, in a manner that fits our current activities and gives us additional financial flexibility. We value our business relationship with Comerica and look forward to continuing to work together to finance our business. We are also evaluating refinancing options for the W Austin Hotel & Residences project when the Beal Bank loan is open for prepayment in July 2013." Stratus has made significant progress since mid-2012 in realigning its debt. At June 30, 2012, Stratus had total debt of $160.3 million (with maturities of approximately $70 million due by year- end 2013) at an average interest rate of 8.40 percent. As discussed below, Stratus reduced its total debt to $137.0 million (with maturities of approximately $10 million due by year-end 2013) as of December 31, 2012, at an average interest rate of 8.15 percent. The Loan Agreement provides for a $48.0 million credit facility, divided into three tranches as follows: (1) a $35.0 million revolving line of credit, (2) $3.0 million for letters of credit, and (3) a $10.0 million construction loan. The interest rate applicable to amounts borrowed under each loan is an annual rate of LIBOR plus 4.0%, with a minimum interest rate of 6.0%. The credit facility will mature on November 30, 2014. Proceeds from the revolving loan may be used to fund Stratus' working capital needs, including land acquisitions; however, without prior approval from Comerica, individual land acquisitions shall not exceed $3.0 million and aggregate land transactions shall not exceed $10.0 million. Proceeds from the letter of credit tranche shall be used to fund additional working capital needs. Proceeds from the construction loan shall be used to develop the regional road and infrastructure for Section N of Barton Creek. Under the terms of the Loan Agreement, (1) any distributions received by Stratus from its investment in the W Austin Hotel & Residences Project shall be paid to Comerica and applied against the $35.0 million revolving loan to the extent of any outstanding debt and (2) municipal utility district reimbursements and land sales proceeds directly related to Section N of Barton Creek shall be used to first repay the $10.0 million construction loan, with any excess used to pay down the $35.0 million revolving loan. Any amounts borrowed and repaid under the $10.0 million construction loan will not be available for future advance to Stratus. Repayments under the Loan Agreement can be accelerated by Comerica upon the occurrence of certain customary events of default. The Loan Agreement contains customary financial covenants. Stratus' obligations under the Loan Agreement are secured by substantially all of Stratus' assets, except for properties that are encumbered by separate non-recourse permanent loan financing. As of December 31, 2012, the aggregate principal balance outstanding under the revolving loan was $26.6 million and no amounts were outstanding under the letter of credit tranche or the construction loan. As previously reported, in September 2012, Stratus entered into loan modification agreements with American Strategic Income Portfolio Inc., under which Stratus (1) paid off two of its seven unsecured term loans totaling $9 million and (2) reduced the interest rates from 8.750% to 7.250%, extended the maturity dates and modified the prepayment provisions of the remaining five unsecured term loans. Four loans totaling $15.0 million mature in 2015 and one loan totaling $8.0 million matures in 2016. As of December 31, 2012, the aggregate principal balance outstanding under the five remaining outstanding unsecured term loans is $23.0 million. Stratus is a diversified real estate company engaged in the acquisition, development, management, operation and sale of commercial, hotel, entertainment, multi-family and residential real estate properties, including the W Austin Hotel & Residences project, located primarily in the Austin, Texas area. SUPERVALU INC: Fitch Affirms 'CCC' IDR Over Sale Deal ----------------------------------------------------- Fitch Ratings has affirmed SUPERVALU Inc.'s Issuer Default Rating (IDR) at 'CCC' following its announcement of a definitive agreement to sell its Albertsons, Acme, Jewel-Osco, Shaw's and Star Market stores and related Osco and Sav-on (brands collectively under New Albertson's, Inc. or NAI) in-store pharmacies to AB Acquisition LLC. At the same time, Fitch has placed New Albertson's, Inc. and American Stores Company, LLC's CCC' IDRs and the senior unsecured notes at those entities, on Rating Watch Evolving (RWE). Fitch expects to withdraw these ratings when the transaction closes. SVU announced on January 10 a definitive agreement to sell NAI to AB Acquisition LLC, an affiliate of a consortium led by Cerberus Capital Management L.P. The asset sale will effectively unwind SVU's June 2006 acquisition of Albertson's, and leaves the company with its legacy supermarket banners, the wholesale distribution business, and the Save-A-Lot hard discount segment. Fitch details below its estimates of the revenues, EBITDA and the financial leverage of the existing SVU business as well as the businesses that are being spun-off. Fitch also provides perspective on how these businesses looked prior to the acquisition of Albertson's by SVU in 2006. The affirmation of SVU's ratings reflects a moderately improved business mix, as the sale will largely reduce SVU's exposure to the competitive traditional supermarket sector, offset by slightly higher leverage in the low 5.0x range, based on Fitch's estimates. The ratings continue to reflect operating deterioration within each of SVU's remaining operating segments, and the refinancing risk related to a sizable $1bn senior note maturity in May 2016. Fitch will rate SVU's new credit facility and term loans and will update its issue ratings on the notes at SVU when the new debt structure is put in place. The RWE on New Albertson's and American Stores' ratings reflects the uncertainty regarding the acquisition entity's final capital structure and Cerberus' financial strategy. Fitch expects the transaction will likely be neutral for American Stores bonds (given strong limitation on liens) but the impact on Albertson's bonds will depend on how much secured debt AB Acquisition puts in place, against which Albertson's inventory and real estate would be pledged. Transaction Price and Multiple Paid for New Albertson's AB Acquisition has agreed to pay $100 million in cash plus the assumption of $3.2 billion of debt, for a total consideration of $3.3 billion for NAI. The assumed debt includes $1.95 billion of senior unsecured notes at New Albertson's, Inc., $468 million of senior unsecured notes at American Stores Company, LLC and the assumption of an estimated $780 million in capital leases. Fitch estimates that AB Acquisition will pay around 3.8x EBITDA for the business. This is based on Fitch's estimates that revenues at these banners are $17.6 billion and EBITDA is close to $875 million. This implies that the EBITDA margin on these assets is approximately 5%, almost in line with or slightly worse than the retail businesses that will remain at SVU. In June 2006, the Albertson's assets acquired by SVU were generating $24.5 billion in sales (there have been some asset disposals since that transaction) and about $1.8 billion in EBITDA, implying an EBITDA margin of 7.2%. At that time SVU paid $12.4 billion for the Albertson's business or a multiple of 7.0x EV/EBITDA. Remaining SVU Business Comparing SVU's business today (after carving out the businesses to be sold) with SVU's business in fiscal 2006 prior to its acquisition of Albertson's reveals the deterioration in the legacy SVU business over the past six years. Sales at an estimated $17.2 billion today compare with sales of $19.9 billion in fiscal 2006 (year ending February 2006), or a 13% decline, reflecting identical store (ID) sales declines and modest asset sales. Fitch estimates LTM EBITDA of around $700 million - $730 million, compared with EBITDA of $924 million in fiscal 2006, or a decline of 20% - 24%. The distribution business has LTM revenue of $8.2 billion with EBITDA of $265 million or an EBITDA margin of 3.2%. In fiscal 2006, this business generated revenue of $9.2 billion and EBITDA of $308 million so while the revenue base has contracted, margins have remained fairly stable. The retail business today has combined sales of $9 billion consisting of an estimated $4.2 billion in sales at its 191 price superstores and traditional supermarkets and $4.8 billion at its hard discount Save-A-Lot business. This compares with combined sales of $10.6 billion in fiscal 2006. EBITDA is estimated at $435 to $465 million (with Save-A-Lot at $240 million) versus $660 million in fiscal 2006, with margins contracting by about 100 to 120 basis points to 5.0%- 5.2%. In addition, free cash flow (FCF) was around $350 million - $400 million in the years leading up to fiscal 2006, and is now estimated by management at $175 million post-sale, which is largely explained by the $200 million drop in EBITDA over the time frame. New SVU Debt and Leverage Profile Following the transaction, SVU's debt structure will consist of a new $900 million asset-based revolving credit facility, a $1.5 billion term loan secured by a portion of the company's real estate and an equity pledge of the parent company of Save-A-Lot, $1 billion of senior unsecured notes maturing in May 2016 and an estimated $350 million in capital leases. The new revolver and term loan will replace and refinance SVU's existing $1.65 billion asset-based revolver, $846 million term loan, and $490 million of 7.5% bonds maturing in November 2014, which will be called. It is uncertain whether the $200 million accounts receivable securitization facility will remain in place. This will leave SVU with debt (including capital leases) of $3.0 billion plus the amount outstanding on the new revolver, which Fitch assumes will be in the $300 million range, leaving total debt of about $3.3 billion. Fitch assumes rent expense of about $130 million to $140 million. This will result in adjusted debt/EBITDAR in the low 5x range, compared with 4.8x for the whole business as of Dec. 1, 2012. As a result, the transaction is expected to be modestly leveraging. Outlook for Remaining Business Remains Negative Each of SVU's remaining business is currently under considerable pressure, experiencing sales declines and margin contraction. The retail food segment's (traditional supermarkets including assets for sales) ID sales declined by 4.5% the quarter ended Dec. 1, 2012, and has experienced negative ID sales for the past four years. While the remaining banners may be better positioned than the businesses being exited, Fitch still expects future comparable store sales declines in the low single digit range. Sales in the independent business (wholesale distribution) have been relatively flat but margins have been under pressure due to price investments. EBITDA margins have contracted by 60 basis points to 3.2% for the first three quarters of fiscal 2013 relative to the comparable year ago period. The Save-A-Lot business saw its ID sales declines accelerate in Q3 to negative 4.1% versus negative 3.7% in Q2 and negative 3.4% in Q1. EBITDA margins have contracted by 130 basis points to 5.4% for the first three quarters of fiscal 2013 relative to the comparable period a year ago. Performance has been disappointing and worse than expected in this business given that the hard discount segment has typically done well in this environment. Planned repositioning activities are expected to further constrain Save-A- Lot's margin over the next few quarters. Fitch believes it will be difficult for SVU to turn around these businesses, although they have held up somewhat better than the businesses that are being spun off. Fitch expects EBITDA will continue to erode from the $700 to $730 million level these businesses generate today. With FCF potentially in the range of $150 million to $175 million over the next two to three years, Fitch remains concerned about the refinancing risk related to a sizable $1 billion senior note maturity in May 2016. Up to 30% Stake in SVU By Cerberus Consortium In addition to the sale of New Albertson's, a Cerberus-led investor consortium (Symphony Investors) will conduct a tender offer for up to 30% of SVU's common stock at a purchase price of $4 (or a total consideration of up to $250 million), a 50% premium to SVU's 30 day average closing prices as of January 9, 2013. If Symphony does not obtain at least 19.9% of the outstanding shares through the tender, SUPERVALU will be obligated to issue new shares to bring Symphony's stake to at least 19.9% of outstanding stock (currently 214 million diluted shares outstanding) prior to the issuance. What Could Trigger A Rating Action: A downgrade could occur if negative ID sales persist, suggesting the company is not reversing traffic declines, or if operating margins narrow more than expected, leading to weaker free cash flow and credit metrics and an inability to refinance its 2016 maturities. An upgrade could occur if the company is able to reverse negative operating trends, and demonstrate that it is able to address its 2016 maturities with a combination of FCF and asset sales. The rating actions are as follows: SUPERVALU INC. -- IDR affirmed at 'CCC'; -- $1.65 billion bank credit facilities affirmed at 'B'/'RR1'; -- $850 million term loan B affirmed at 'B'/'RR1'; -- Senior unsecured notes affirmed at 'CCC+'/'RR3'. New Albertson's, Inc. -- IDR of 'CCC' placed on RWE -- Senior unsecured notes ('CCC'/'RR4') placed on RWE American Stores Company, LLC -- IDR of 'CCC' placed on RWE -- Senior unsecured notes ('B'/'RR1') placed on RWE T3 MOTION: ICS Opportunities Discloses 3.2% Equity Stake -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, ICS Opportunities, Ltd., and its affiliates disclosed that, as of Dec. 31, 2012, they beneficially own 500,000 shares of common stock of T3 Motion, Inc., representing 3.2% of the shares outstanding. A copy of the filing is available for free at http://is.gd/aBWR20 About T3 Motion Costa Mesa, Calif.-based T3 Motion, Inc., develops and manufactures T3 Series vehicles, which are electric three-wheel stand-up vehicles that are directly targeted to the public safety and private security markets. After auditing the 2011 results, KMJ Corbin & Company LLP, in Costa Mesa, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses and has had negative cash flows from operations since inception, and at Dec. 31, 2011, has an accumulated deficit of $54.9 million. The Company reported a net loss of $5.50 million in 2011, compared with a net loss of $8.32 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.81 million in total assets, $4.48 million in total liabilities, and a $1.66 million total stockholders' deficit. Bankruptcy Warning "Our principal capital requirements are to fund our working capital requirements, invest in capital equipment, to make debt service payments and the continued costs of public company filing requirements. We have historically funded our operations through debt and equity financings, and the Company will require additional debt or equity financing in the future to maintain operations. The Company cannot make any assurances that additional financings will be completed on a timely basis, on acceptable terms or at all. If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact our business and operations, which could cause the price of our common stock to decline. It could also lead to the reduction or suspension of our operations and ultimately force us to go out of business. Currently, the Company does not have sufficient cash to pay its current obligations including but not limited to payroll for its employees. If the Company does not succeed in raising additional outside capital in the short term, the Company will be forced to seek strategic alternatives which could include bankruptcy or reorganization," the Company said in its quarterly report for the period ended Sept. 30, 2012. TAB FOODS: Case Summary & 10 Unsecured Creditors ------------------------------------------------ Debtor: Tab Foods LLC 151 Orange Ave. Tallahassee, FL 32301 Bankruptcy Case No.: 13-40003 Chapter 11 Petition Date: January 2, 2013 Court: United States Bankruptcy Court Northern District of Florida (Tallahassee) Debtor's Counsel: Emilian Bucataru, Esq. LAW OFFICE OF EMILIAN BUCATARU, PLLC 3116 Capital Circle NE, Suite 1 Tallahassee, FL 32308 Tel: (850) 345-5777 Fax: (850) 656-0085 E-mail: emilian@bucataru.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 10 largest unsecured creditors is available for free at http://bankrupt.com/misc/flnb13-40003.pdf The petition was signed by Terry M. Gillis, managing member. TALON THERAPEUTICS: Currently Reviewing Strategic Alternatives -------------------------------------------------------------- Talon Therapeutics's Board has authorized a review of strategic alternatives. Goldman Sachs has been engaged to provide financial advisory services. The review of strategic alternatives may lead to a possible transaction, including the merger, business combination, or sale of the company. No decision has been made to enter into a transaction at this time, and there can be no assurance that Talon will enter into a transaction in the future. The Company does not plan to disclose or comment on developments regarding the strategic review process until further disclosure is deemed appropriate. About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences changed its name to Talon Therapeutics. The name change was effected by merging Talon Therapeutics, a wholly owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company's balance sheet at June 30, 2012, showed $18.38 million in total assets, $10.89 million in total liabilities, $22.22 million in series B convertible preferred stock, and $14.73 million in total stockholders' equity. The Company reported a net loss of $18.82 million for the year ended Dec. 31, 2011, compared with a net loss of $25.98 million during the prior year. BDO USA, LLP, in San Jose, California, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and net capital deficiency that raise substantial doubt about the Company's ability to continue as a going concern. TALON THERAPEUTICS: Appoints Warburg Managing Director to Board --------------------------------------------------------------- Talon Therapeutics appointed Elizabeth (Bess) Weatherman to the Company's Board of Directors. Ms. Weatherman is a Managing Director of Warburg Pincus and leads the firm's investment activity in the healthcare sector. Warburg Pincus is the majority shareholder of Talon. The Company also announced the resignation from the Board of Jonathan Leff, formerly a Managing Director at Warburg Pincus. Mr. Leff left Warburg Pincus to join Deerfield Management, Talon's second largest investor. "We are delighted to welcome Bess to our Board of Directors during this critical stage in the Company's evolution. With more than 20 years investing and advising in the healthcare sector, Bess brings superior strategic insight and extensive industry relationships to the Board. With the accelerated approval of Marqibo, the Company is now addressing important strategic commercialization choices and Bess will play a key role in guiding the Company's decisions," stated Leon Rosenberg M.D. and Chairman of the Board of Directors of Talon Therapeutics. Steven Deitcher M.D., President, CEO and Board Member of Talon Therapeutics added, "We also want to thank Jonathan Leff for his excellent service on the Talon Board and wish him well at Deerfield." "I am pleased to join Talon's Board of Directors," stated Ms. Weatherman. "Marqibo's approved indication addresses an important, underserved hematologic malignancy. I look forward to working closely with Talon's Board and management team." Ms. Weatherman joined Warburg Pincus in 1988 and leads the firm's investment activities in the healthcare sector, an area in which she helped build the firm's domain expertise. Ms. Weatherman also serves on the board of directors of Bausch & Lomb, Constitution Medical, International Technidyne Corp., JHP Pharmaceuticals, ReSearch Pharmaceutical Services, Silk Road Medical, and Tornier. Ms. Weatherman received a B.A. summa cum laude in English from Mount Holyoke College and holds an M.B.A. from the Stanford Graduate School of Business. About Talon Therapeutics Formerly known as Hana Biosciences, Inc., Talon Therapeutics Inc. (TLON.OB.) -- http://www.talontx.com/-- is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. The company's lead product candidate, Marqibo, potentially treats acute lymphoblastic leukemia and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Effective Dec. 1, 2010, Hana Biosciences changed its name to Talon Therapeutics. The name change was effected by merging Talon Therapeutics, a wholly owned subsidiary of the Company, with and into the Company, with the Company as the surviving corporation in the merger. The Company's balance sheet at June 30, 2012, showed $18.38 million in total assets, $10.89 million in total liabilities, $22.22 million in series B convertible preferred stock, and $14.73 million in total stockholders' equity. The Company reported a net loss of $18.82 million for the year ended Dec. 31, 2011, compared with a net loss of $25.98 million during the prior year. BDO USA, LLP, in San Jose, California, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and net capital deficiency that raise substantial doubt about the Company's ability to continue as a going concern. TC GLOBAL: McDreamy's Charm Didn't Taint Auction, Judge Says ------------------------------------------------------------ Karlee Weinmann of BankruptcyLaw360 reported that a bankruptcy judge on Friday approved the Chapter 11 sale of Seattle coffee chain Tully's to Patrick Dempsey for $9.2 million despite a stern call from Starbucks Corp. and a private-equity-backed rival that said the "Grey's Anatomy" star charmed his way to a win in the auction despite higher offers. The coffee giant and another bidder, Filipino food company AgriNurture Inc., asked U.S. Bankruptcy Judge Karen Overstreet to look past the spectacle of Dempsey -- known on his TV show as "McDreamy," the report related. About TC Global Headquartered in Seattle, Washington, TC Global, Inc., dba Tully's Coffee -- http://www.tullyscoffeeshops.com/-- is a specialty coffee retailer and wholesaler. Through company owned, licensed and franchised specialty retail stores in Washington, Oregon, California, Arizona, Idaho, Montana, Colorado, Wyoming and Utah, throughout Asia with Tully's Coffee International, and with its global alliance partner Tully's Coffee Japan, Tully's premium coffees are available at 545 branded retail locations globally. TC Global Inc. filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 12-20253-KAO) on Oct. 10, 2012. The Debtor is represented by attorneys at Bush Strout & Kornfeld LLP, in Seattle. The Debtor disclosed assets of $4.9 million and debt totaling $3.7 million, including $2.6 million in unsecured claims. The Seattle-based chain has 57 company-owned stores and 12 franchised. There are another 71 franchises in grocery stores, schools and airports. Tully's will close nine stores following bankruptcy. Bloomberg report discloses that Tully's sold the wholesale and distribution business in 2009, generating $40 million that allowed a $5.9 million distribution to shareholders. TCI COURTYARD: Wants Access to Rents from Quail Hollow Property --------------------------------------------------------------- TCI Courtyard, Inc., asks the U.S. Bankruptcy Court for the Northern District of Texas to use the rents generated by the leases on a 200 unit residential apartment complex located in Holland Ohio known as Quail Hollow to pay normal and necessary operating expenses of the Property. As of Petition Date, the Debtor was allegedly indebted to CWCapital Asset Management LLC, solely in its capacity as Special Servicer for Wells Fargo Bank, N.A., f/k/a Wells Fargo Bank Minnesota, N.A., as Trustee for the Registered Holders of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2001-C1 (the "Trust") in the approximate amount of $13,000,000 as the current holder of a certain Promissory Note. The Debtor proposes to provide the Trust a replacement lien on postpetition rents and income. About TCI Courtyard Dallas, Texas-based TCI Courtyard, Inc., dba Quail Hollow Apartments, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 12-37284) on Nov. 15, 2012. Judge Stacey G. Jernigan presides over the case. Eric A. Liepins, Esq., serves as the Debtor's counsel. In its petition, the Debtor scheduled $13,790,254 in assets and $15,964,116 in liabilities. The petition was signed by Steven Shelley, vice president. According to Troubled Company Reporter's records, TCI Courtyard previously filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 11-34977) on Aug. 1, 2011. The Liepins firm also served as counsel in the previous case. The Debtor estimated assets of up to $10 million and debts of up to $50 million in the 2011 petition. TELECONNECT INC: Incurs $3.9-Mil. Net Loss in Fiscal 2011 --------------------------------------------------------- Teleconnect Inc. filed on Dec. 28, 2012, its annual report on Form 10-K for the fiscal year ended Sept. 30, 2012. Coulter & Justus, P.C., in Knoxville, Tennessee, expressed substantial doubt about Teleconnect's ability to continue as a going concern. 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. The Company reported a net loss of $3.9 million on $143,910 of sales in fiscal 2012, compared with a net loss of $3.3 million on $112,722 of sales in fiscal 2011. The Company's balance sheet at Sept. 30, 2012, showed $6.4 million in total assets, $11.5 million in total current liabilities, and a stockholders' deficit of $5.1 million. A copy of the Form 10-K is available at http://is.gd/fhaUMb Teleconnect Inc., headquartered in Breda, The Netherlands, was incorporated under the laws of the State of Florida on Nov. 23, 1998. With its ownership in Hollandsche Exploitatie Maatschappij BV (HEM), a Dutch entity established in 2007, the Company's main activities are the manufacturing, sales and lease of age validation equipment and the performance of age validation. The Company also sells and maintains vending solutions (through Mediawizz, The Netherlands), is involved in the broadcasting of in-store commercial messages using the age validation equipment between age checks (through HEM), and plans to develop market survey activities in the future (through Giga Matrix, The Netherlands). TEXAS STANDARD: Release Bars $4M Award in Energy JV, Court Says --------------------------------------------------------------- A Texas appeals court tossed a $4 million award against three oil and gas companies, finding that a former partner?s fraud claims arising out of a failed joint venture had been released in a bankruptcy settlement that preceded the lawsuit, Jeremy Heallen of BankruptcyLaw 360 reports. The Texas Court of Appeals for the Fourteenth District ruled that a settlement agreement Frankel Offshore Energy Inc. signed releasing future "fraudulent inducement" claims against former business partners Texas Standard Oil & Gas LP, Grimes Energy Co. and PetroVal Inc. was enforceable. THE WINDOW FACTORY: Court Closes Bankruptcy Case ------------------------------------------------ The Hon. Laura S. Taylor of the U.S. Bankruptcy Court for the Southern District of California has closed the bankruptcy case of The Window Factory, Inc. Chapter 11 Trustee Richard M. Kipperman sought for the dismissal of the Debtor's case on Nov. 8, 2012, saying that there is no need to incur the costs of plan preparation, voting and confirmation where the rights of creditors have been adequately addressed. The claims register reveals that 16 claims were filed against the estate. Priority tax claims total $1,621,714.88, general unsecured penalty tax claims total $962,866.34, and general unsecured claims total $2,309,468.78. A number of the entities who filed general unsecured claims have liens on equipment and other assets owned by the Debtor which were not sold through the third-party sale. According to the Chapter 11 Trustee, the estate now consists of $45,125.57 in cash. "Once the Court has ruled upon the fee applications of the Trustee and his counsel and any other administrative claims, there will be no more funds remaining in the estate," the Chapter 11 Trustee stated. The Chapter 11 Trustee operated the business for seven months, from February 2012 through August 2012, to ensure the Debtor's customers' contracts would be completed. The Chapter Trustee sold the business for $60,000 and worked with the buyer, Oasis Glass, Inc., so that previous and current customers' warranties would be honored. The U.S. Trustee said that he spent considerable time negotiating the terms with interested parties, and concluded the sale. John Jedynak, the Debtor's principal, filed personal bankruptcy on June 29, 2012 (Bankr. Case No. 12-09125-LT7). James Kennedy, the bankruptcy trustee in Mr. Jednyak's personal bankruptcy abandoned the principal's secured claim against the estate. A senior secured creditor, Ford Financial Services, Inc., was paid $15,569.43 from the sale proceeds. The Internal Revenue Service, the State of California Board of Equalization and Employment Development Dept., and the San Diego County Assessor/Tax Collector have liens but are subordinate to the administrative claims of this estate. All other secured creditors maintained their interest in the personal properties subject to their liens. The Chapter 11 Trustee holds the sum of $45,125.57 as of Nov. 6, 2012. The cash was realized from the sale of the business and a few small receivables. There was no positive cash flow from the business operations. On Oct. 31, 2012, Acting U.S. Trustee Tiffany L. Carroll informed the Court that she was unable to appoint a committee of unsecured creditors. About The Window Factory American Integrity Corp., Ajit Ahooja, and Herde Computer Services signed involuntary Chapter 11 petitions for The Window Factory, Inc., (Bankr. S.D. Calif. Case No. 11-19842) on Dec. 8, 2011. Judge Laura S. Taylor presides over the case. Jeffrey D. Schreiber, Esq., at The Schreiber Law Firm, serves as counsel to the petitioning creditors, which allege $407,000 in total claims. The Window Factory is engaged in the business of manufacturing, sale and installation of windows and related products. As reported in the Troubled Company Reporter on Jan. 27, 2012, the Court entered an order for relief under Chapter 11. Richard Kipperman was appointed as Chapter 11 trustee. Slater & Truxaw LLP represents the trustee as general counsel. The U.S. Trustee for Region 15 appointed Robert C. Fellmeth as consumer privacy ombudsman in the Chapter 11 case of The Window Factory, Inc. THQ INC: Has Bonus Program Approved for Game Developers ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that THQ Inc. was given approval of a $427,000 bonus program last week to insure critical personnel don't leave the company before the sale scheduled for approval on Jan. 23. According to the report, the company said a typical video game takes about 18 months to create at a cost of about $1 million a month. Replacing a member of the development team isn't feasible, the company said. To be sure no one jumps ship before the sale, the judge sanctioned the bonus program where the cost will be paid by stalking-horse bidder Clearlake Capital Group LP if it ends up the court-approved buyer. Before bankruptcy, Clearlake signed a contract to buy Agoura Hills, California-based THQ for a price said to be worth $60 million. Unless outbid, Clearlake will pay $6.65 million cash and a $10 million seven-year note bearing 2% interest. In addition, Clearlake will assume about $15 million in debt and pay off financing for the Chapter 11 effort estimated to be $29 million. THQ's unsecured notes traded on Jan. 11 for 20.167 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The price represents a 68% increase since the date of bankruptcy. 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. THUNDERBIRD MINING: DC Circ. Denies Shutdown Benefits to Workers ---------------------------------------------------------------- Abigail Rubenstein of BankruptcyLaw360 reported that the D.C. Circuit on Friday upheld the Pension Benefit Guaranty Corp.'s denial of "shutdown" pension benefits to former employees of a bankrupt mining company, accepting the agency's determination that the company had temporarily, rather than permanently, shuttered a Minnesota plant. The appeals court held that although a finding in favor of the former workers at Eveleth Mines LLC's subsidiary Thunderbird Mining Co. who were seeking the shutdown benefits also could have been upheld as reasonable, the PBGC's decision not to guarantee the benefits was adequately supported, the report added. The case is, United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC, on behalf of the Participants and Beneficiaries of the Thunderbird Mining Co. Pension Plan, et al., v. Pension Benefit Guaranty Corporation, Civil Action No. 09- 517 (D. D.C.). About Thunderbird Mining Thunderbird Mining Co., based in Eleveth, Minnesota, filed for Chapter 11 bankruptcy (Bankr. D. Minn. Case No. 03-50641) on May 15, 2003. Thunderbird employed roughly 400 hourly employees and provided low-grade iron ore in the form of taconite pellets for steel production. The company was a wholly owned subsidiary of Eveleth Mines, LLC, which itself was jointly owned by three steel companies: Rouge Steel, AK Steel, and Stelco. These companies not only owned Eveleth Mines, but were also its sole customers for taconite pellets. Judge Gregory F. Kishel oversees the case. Michael L. Meyer, Esq., at Ravich Meyer Kirkman Mcgrath & Nauman, served as the Debtor's counsel. In its petition, the Debtor estimated $10 million to $50 million in assets and debts. Eveleth Mines filed its own bankruptcy (Bankr. D. Minn. Case No. 03-50569) on May 1, 2003. In early October 2003, mining company Cleveland-Cliffs and Laiwu Steel Group Ltd. offered to purchase Eveleth Mines as an operational mining company. In November 2003, the bankruptcy court converted Eveleth Mines' bankruptcy proceedings from Chapter 11 reorganization, to Chapter 7 liquidation. The bankruptcy court approved the sale of all of Eveleth Mines' operating assets to Cleveland-Cliffs and Laiwu. TIGER MEDIA: Heartland Advisors Discloses 4.2% Equity Stake ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Heartland Advisors, Inc., and William J. Nasgovitz disclosed that, as of Dec. 31, 2012, they beneficially own 1,200,000 shares of common stock of Tiger Media Inc. representing 4.2% of the shares outstanding. A copy of the amended filing is available at http://is.gd/DgZxtT 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 financial 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. TITAN PHARMACEUTICALS: Intends to List Common Stock on NASDAQ ------------------------------------------------------------- Titan Pharmaceuticals, Inc., filed with the Securities and Exchange Commission a copy of its corporate presentation for January 2013 entitled "Innovations in MEDICINE." Titan discussed its Probuphine(R) drug. Titan also disclosed it intends to apply for listing of the company's common stock on NASDAQ this year. Moreover, Titan intends to seek regulatory approval and commercialization partner in select countries where buprenorphine theraphy is approved for treatment of opioid dependence. The Company also intends to capitalize on drug development expertise with additional products using ProNeura technology platform. A copy of the presentation is available at: http://is.gd/JbcF5n About Titan Pharmaceuticals South San Francisco, California-based Titan Pharmaceuticals is a biopharmaceutical company developing proprietary therapeutics primarily for the treatment of central nervous system disorders. The Company's balance sheet at Sept. 30, 2012, showed $10.74 million in total assets, $37.87 million in total liabilities, and a $27.13 million total stockholders' deficit. Following the 2011 results, OUM & Co. LLP, in San Francisco, California, expressed substantial doubt about Titan's ability to continue as a going concern. The independent auditors noted that the Company's cash resources will not be sufficient to sustain its operations through 2012 without additional financing, and that the Company also has suffered recurring operating losses and negative cash flows from operations. TITAN PHARMACEUTICALS: Extends Employments of Chairman and Pres. ---------------------------------------------------------------- Titan Pharmaceuticals, Inc., entered into one-year extensions to the Employment Agreements dated May 16, 2009, as amended, by and between the Company and each of Marc Rubin, the Company's Executive Chairman, and Sunil Bhonsle, the Company's President. About Titan Pharmaceuticals South San Francisco, California-based Titan Pharmaceuticals is a biopharmaceutical company developing proprietary therapeutics primarily for the treatment of central nervous system disorders. The Company's balance sheet at Sept. 30, 2012, showed $10.74 million in total assets, $37.87 million in total liabilities, and a $27.13 million total stockholders' deficit. Following the 2011 financial results, OUM & Co. LLP, in San Francisco, California, expressed substantial doubt about Titan's ability to continue as a going concern. The independent auditors noted that the Company's cash resources will not be sufficient to sustain its operations through 2012 without additional financing, and that the Company also has suffered recurring operating losses and negative cash flows from operations. TITAN PHARMACEUTICALS: Probuphine Gets FDA Priority Review ---------------------------------------------------------- Titan Pharmaceuticals, Inc., announced that the New Drug Application (NDA) for Probuphine has been accepted for review and granted Priority Review designation by the U.S. Food and Drug Administration (FDA). Probuphine is a novel, subdermal implant and the first long-acting product designed to deliver six months of the drug buprenorphine hydrochloride following a single treatment. Titan submitted the NDA for the maintenance treatment of opioid dependence in adult patients in October 2012 under Section 505(b)(2) of the Food, Drug and Cosmetic Act and referenced the approved sublingual tablet formulations of buprenorphine. Priority designation is given to therapies that offer potential major advances in treatment, including improved safety, or provide a treatment where no adequate therapy exists. Based upon the Prescription Drug User Fee Act (PDUFA), the FDA has set a target date of April 30, 2013, for FDA action on the NDA. "This is an important milestone for Probuphine and the Priority Review designation further underscores the critical need for new treatments for opioid dependence," said Katherine Beebe, Ph.D., executive vice president and chief development officer at Titan. "With more than two million people addicted to opioids in the U.S. alone, there is a need for safe and effective treatments that also reduce the risk of abuse or accidental use. Probuphine has demonstrated clinically meaningful and statistically significant treatment benefits across several clinical trials and we look forward to supporting the NDA review process and, potentially, offering a new treatment option to patients and physicians." Last month, Titan announced the signing of a license agreement with Braeburn Pharmaceuticals Sprl, wholly owned by Apple Tree Partners IV, L.P., a partnership affiliated with Apple Tree Partners. The license grants Braeburn exclusive commercialization rights in the United States and Canada to the investigational product Probuphine and, has provided Titan a $15.75 million upfront payment and entitles the company to up to $215 million in milestone payments plus tiered double digit royalties on Probuphine sales. The milestone payment from Braeburn in the event of FDA approval of Probuphine for the treatment of opioid dependence will be $50 million since the NDA has received Priority Review designation. About Titan Pharmaceuticals South San Francisco, California-based Titan Pharmaceuticals is a biopharmaceutical company developing proprietary therapeutics primarily for the treatment of central nervous system disorders. The Company's balance sheet at Sept. 30, 2012, showed $10.74 million in total assets, $37.87 million in total liabilities, and a $27.13 million total stockholders' deficit. Following the 2011 results, OUM & Co. LLP, in San Francisco, California, expressed substantial doubt about Titan's ability to continue as a going concern. The independent auditors noted that the Company's cash resources will not be sufficient to sustain its operations through 2012 without additional financing, and that the Company also has suffered recurring operating losses and negative cash flows from operations. TOPS HOLDING: Shareholders Approve Repricing of Option Awards ------------------------------------------------------------- A majority of the voting shareholders of Tops Holding Corporation approved the repricing of certain option awards previously granted to members of the Company's management and board of directors. The purpose of the Repricing was to mitigate the economic dilution that resulted from the payment of a cash dividend to the holders of the Company's common stock on Dec. 20, 2012, that resulted in a decrease in the Company's stock price. The Repricing was completed in accordance with the terms of the Tops Holding Corporation 2007 Stock Incentive Plan. The exercise price was lowered to $400 on 707 Options held by Frank Curci, the Company's Chief Executive Officer, 1,000 Options held by William R. Mills, the Company's Chief Financial Officer, 454 Options held by Kevin Darrington, the Company's Chief Operating Officer, 369 Options held by John Persons, the Company's Senior Vice President of Operations and 555 Options held by Lynne Burgess, the Company's Senior Vice President and General Counsel. In addition, the exercise price on 1,560 Options held by various other members of the Company's management and board of directors was lowered to $400. All Options subject to the Repricing were issued prior to the Dividend Recapitalization. No other terms of the Options were changed. In connection with the Repricing, and to mitigate the decrease in the Company's stock price resulting from the Dividend Recapitalization, the compensation committee of the Company's board of directors unanimously approved payment to the holders of the Options in amounts equal to the difference between the per share dividend paid to shareholders in the Dividend Recapitalization and the reduction in the exercise price associated with the Options. Option Payments were made to Mr. Curci in the amount of $2,108,019; to Mr. Mills in the amount of $50,720; to Mr. Darrington in the amount of $1,174,457; to Mr. Persons in the amount of $786,105; and to Ms. Burgess in the amount of $28,149. About Tops Markets Privately owned Tops Markets, LLC headquartered in Williamsville, New York, operates a chain of 71 owned Tops supermarkets and 5 franchised stores ("legacy stores") in western New York state, with approximately $1.7 billion of annual revenues. In February 2010, Tops acquired 79 stores from the bankruptcy estate of Penn Traffic. Tops continues to operate 55 stores, of which 7 may sold or closed as a result of a preliminary FTC order. The remaining 48 stores are in the final process of being re-branded as Tops stores. Tops' primary markets have historically been the Buffalo and Rochester metro areas, and will expand to the south and east with the acquisition of the Syracuse-based Penn Traffic stores. The company is 75% owned by Morgan Stanley Capital Partners, with remaining ownership held largely by a unit of HSBC and company management. The Company's balance sheet at Oct. 6, 2012, showed $661.49 million in total assets, $705.22 million in total liabilities and a $43.73 million total shareholders' deficit. * * * In the Nov. 25, 2011, edition of the TCR, Moody's Investors Service upgraded the Corporate Family and Probability of Default Ratings of Tops Holding Corporation ("Tops") to B3 from Caa1. Tops Corporate Family Rating of B3 reflects the company's weak credit metrics, its modest size relative to competitors, regional concentration and aggressive financial policies. The rating is supported by its stable operating performance in a challenging business and competitive environment, its good regional market presence and its good liquidity. As reported by the TCR on April 30, 2012, Standard & Poor's Ratings Services raised its ratings on Buffalo, N.Y.-based Tops Holdings Corp., including the corporate credit rating to 'B+' from 'B'. "The upgrade primarily reflects our revised view of the company's financial risk profile as 'aggressive' from 'highly leveraged,'" said Standard & Poor's credit analyst Charles Pinson-Rose. TOWNSEND CORP: Court OKs Settlement Regarding Assets Sale --------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation regarding the sales of Townsend Corporation, et al.'s assets. The stipulation was entered among (1) the Debtors, (2) Paul P. Rusnak together with his assignees, including, but not limited to, Anaheim Hills Jaguar Land Rover, Inc., and (3) Jaguar Land Rover North America, LLC. As reported in the TCR in July 2012, Townsend and LRJC Inc. d/b/a Land Rover Jaguar Cerritos obtained approval from the bankruptcy judge to sell substantially all of the assets of LRJ Cerritos to Paul P. Rusnak. LRJ Automotive LLC was the stalking horse bidder at the auction and will receive a $100,000 break-up fee. At the auction, several overbids were made by the bidders. Rusnak eventually offered to acquire the assets for a purchase price that includes various elements subject to agreement by the parties or determination by appraisal, plus $5.4 million for goodwill. The second highest offer was from LRJ Automotive, which offered $5.3 million for goodwill. The Debtors and JLRNA are parties to a settlement agreement which was approved by a court order dated Feb. 2, 2012. On June 27, 2012, the Court entered an order granting the Cerritos Sale Motion and, subject to the terms and conditions of the Settlement Agreement, approving the sale of the Cerritos Assets to Rusnak, the winning qualified bidder at the auction for the Cerritos Assets, or, in the event Rusnak did not close the sale, to LRJ Automotive, LLC, the back-up bidder approved at the auction for the Cerritos Assets. On July 26, 2012, the Court entered an order granting the Townsend Sale Motion and, subject to the terms and conditions of the Settlement Agreement, approving the sale of the Townsend Assets to Rusnak, the winning qualified bidder at the auction for the Townsend Assets, or, in the event Rusnak did not close the sale, to Philip D. Vass or assignee, the back-up bidder approved at the auction for the Townsend Assets. Pursuant to the stipulation, among other things: 1. Rusnak will be deemed not to have breached either the Cerritos APA or the Townsend APA, the Court ordered bidding and sale procedures, or Rusnak's current dealership agreement with JLRNA for the Pasadena Dealership or its new dealership agreements with JLRNA regarding the operation of the Townsend Assets by having (i) bid on the Anaheim Assets and the Cerritos Assets, (ii) entered into the Townsend APA and the Cerritos APA and/or (iii) submitted the Rusnak Anaheim Application and the Rusnak Cerritos Application. 2. LRJC and Rusnak will be deemed to have mutually agreed to terminate the Cerritos APA; the Cerritos APA will be terminated as between LRCJ and Rusnak; neither LRJC nor Rusnak will be deemed to be in breach of the Cerritos APA; LRJC may, subject to the terms and conditions of the Settlement Agreement, proceed with a sale of the Cerritos Assets to LRJ Automotive, LLC. in accordance with the asset purchase agreement entered into with LRJ Automotive, LLC. 3. JLRNA will not be deemed to have breached the Settlement Agreement in any way relating to Rusnak, the Cerritos APA, the Townsend APA, the Rusnak Cerritos Application and the Rusnak Townsend Application. 4. Neither Rusnak nor any affiliate of Rusnak will, at any time after the closing (as defined in the Anaheim APA), seek to, directly or indirectly, own (in whole or in part) or control the Cerritos Assets (or any part thereof) including, without limitation, the Jaguar and the Land Rover dealerships currently owned by LRJC, Inc. 5. LRJC will return or cause the return of the $300 Cerritos Deposit to Rusnak. About Townsend Corporation Auto dealers Townsend Corporation, d/b/a Land Rover Jaguar Anaheim Hills, and LRJC, Inc., d/b/a Land Rover Jaguar Cerritos -- http://www.lrjah.com/and http://lrjcerritos.com/-- filed for Chapter 11 bankruptcy (Bankr. C.D. Calif. Case Nos. 11-22690 and 11-22695) on Sept. 9, 2011. The Debtors sell new Jaguar and Land Rover vehicles and various previously owned vehicles. The Debtors also have service and parts departments. The Debtors are principally owned and operated by Ernest Townsend and his son, Joshua Townsend. LRJ Anaheim has been in business since 2000. LRJ Cerritos has been in business since 2006. The Chapter 11 cases were reassigned from Judge Robert N. Kwan to Judge Catherine E. Bauer. Todd M. Arnold, Esq., and Martin J. Brill, Esq., at Levene, Neale, Bender, Yoo & Brill, LLP, represent the Debtors. Each of the Debtors estimated $10 million to $50 million in both assets and debts. The petitions were signed by Ernest W. Townsend, IV, the president. TRIAD GUARANTY: Illinois Regulator Sacks Top Executives ------------------------------------------------------- The Illinois Department of Insurance terminated Kenneth W. Jones, the president, chief executive officer and principal financial officer of, Earl F. Wall, the senior vice president, secretary and general counsel, and Shirley A. Gaddy, the senior vice president, Operations of Triad Guaranty Insurance Corporation. In connection with this action, on Jan. 3, 2013, Mr. Jones resigned as Triad Guaranty Inc.'s President, Chief Executive Officer and Principal Financial Officer and Mr. Wall resigned as the Company's Senior Vice President, Secretary and General Counsel. As a result, Messrs. Jones and Wall and Ms. Gaddy are no longer employed by TGIC or by the Company. As previously reported, the Company's mortgage insurer subsidiary, TGIC, has been placed into rehabilitation, whereby the Department has been vested with possession and control over all of TGIC's assets and operations, and the Company no longer has any oversight or authority over TGIC and its business affairs. Also, Kenneth S. Dwyer, the Company's senior vice president and chief accounting officer, has tendered his resignation from that position effective Jan. 4, 2013. Mr. Dwyer remains employed by TGIC as its senior vice president and chief accounting officer. The Company intends to engage Messrs. Jones and Wall as consultants to assist the Company in matters related to their prior positions under terms to be negotiated by the parties in the future. In connection with Mr. Jones' resignation from the Company, on Jan. 3, 2013, William T. Ratliff III, the Company's Chairman, was elected as President and Chief Executive Officer of the Company. About Triad Guaranty Winston-Salem, N.C-based Triad Guaranty Inc. (OTC BB: TGIC) -- http://www.triadguaranty.com/-- is a holding company that historically provided private mortgage insurance coverage in the United States through its wholly-owned subsidiary, Triad Guaranty Insurance Corporation. TGIC is a nationwide mortgage insurer pursuing a run-off of its existing in-force book of business. Going Concern/Bankruptcy Warning "The Company has prepared its financial statements on a going concern basis under GAAP, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. However, there is substantial doubt as to the Company's ability to continue as a going concern. This uncertainty is based on, among other things, Triad's current non- compliance with a provision of the second Corrective Order, the possible failure of Triad to comply with other provisions of the Corrective Orders, and the Company's ability to generate enough income over the term of the remaining run-off to overcome its $802.8 million deficit in assets at September 30, 2012." The positive impact on statutory surplus resulting from the second Corrective Order has resulted in Triad reporting a policyholders' surplus in its SAP financial statements of $224.1 million at Sept. 30, 2012, as opposed to a deficiency in policyholders' surplus of $834.5 million on the same date had the second Corrective Order not been implemented. While the implementation of the second Corrective Order has deferred the institution of an involuntary receivership proceeding, no assurance can be given that the Department will not seek receivership of Triad in the future and there continues to be substantial doubt about the Company's ability to continue as a going concern. The Department may seek receivership of Triad based on Triad's current non-compliance with a provision of the second Corrective Order or for any other violation of the Illinois Insurance Code. Moreover, if the Department determines that Triad is insolvent under applicable law, it would be required to institute a receivership proceeding over Triad. In addition, the Department retains the inherent authority to institute such proceedings against Triad for any reason and Triad has previously agreed not to contest the taking of any such actions. As of Nov. 14, 2012, the Department has not issued any final decision or order as a result of the public hearing and Triad's request to amend the second Corrective Order. Because the subject matter of the hearing specifically included an assessment of whether the Department should implement a different regulatory approach with respect to Triad, including institution of receivership proceedings for the conservation, rehabilitation or liquidation of Triad, the Company believes institution of such a proceeding could be imminent. If this should occur, among other things, TGI could lose control of Triad and could be forced to deconsolidate its financial statements. Any such actions would likely lead TGI to institute a proceeding seeking relief from creditors under U.S. bankruptcy laws, or take other steps to wind up its business and liquidate. TRUSTMARK GROUP: A.M. Best Affirms 'bb' Debt Rating --------------------------------------------------- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) and issuer credit ratings (ICR) of "a-" of Trustmark Insurance Company, Trustmark Life Insurance Company (Trustmark Life) (both domiciled in Lake Forest, IL) and Trustmark Life Insurance Company of New York (Trustmark Life NY) (Albany, NY) (collectively referred to as Trustmark). Concurrently, A.M. Best has affirmed the ICR of "bbb-" of the holding company, Trustmark Group, Inc. (Trustmark, Inc.) and the debt rating of "bb" on $75 million floating rate trust preferred securities due 2035 ($39 million outstanding) issued by Trustmark Finance Trust I. The outlook for all ratings is stable. The rating affirmations reflect the organization's favorable risk- adjusted capitalization, profitable operating results and the overall diversity of its insurance offerings. Additionally, Trustmark continues to report strong premium growth and profitability in its core voluntary benefits segment, despite a challenging economic environment. Trustmark is positioning itself for revenue growth in its core businesses to outpace the revenue from non-core or divested segments. Trustmark Life continues to have a fair amount of risk related to in-force business within the group health market, primarily in its group major medical business. As the Trustmark organization moves through its transition process, it has become less reliant on group major medical business for revenue and operating earnings than in the past. Historically, the group major medical market always has been volatile, and recently, has become increasingly difficult on a state and national regulatory basis. In recent years, Trustmark has made a conscious effort to grow its non- insurance risk segments, such as third party administrative services through its CoreSource division. In February 2010, the Trustmark organization acquired Health Fitness Corporation to use as a platform for its consumer health advice services. Trustmark, Inc.'s debt-to-capital ratio is approximately 12.6%, which is considered low and it maintains ample interest coverage. Trustmark's ratings are well positioned at their current level. Factors that could result in negative rating actions include adverse trends in capital, growth of its voluntary line of products below A.M. Best's expectations or challenges to grow its small group stop-loss business. UNILAVA CORP: Files Amended Q3 Form 10-Q in XBRL Format ------------------------------------------------------- Unilava Corporation has amended its quarterly report on Form 10-Q for the quarter ended Sept. 30, 2012, which was originally filed with the Securities and Exchange Commission on Dec. 18, 2012, for the sole purpose of furnishing the Interactive Data File as Exhibit 101 in accordance with Rule 405 of Regulation S-T. Exhibit 101 to the report furnishes the following items from the Form 10-Q formatted in eXtensible Business Reporting Language (XBRL): (i) the unaudited Consolidated Balance Sheets as of Sept. 30, 2012, and audited Consolidated Balance Sheets as of Dec. 31, 2011; (ii) the unaudited Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended Sept. 30, 2012, and 2011; (iii) the unaudited Consolidated Statements of Cash Flows for the nine months ended Sept. 30, 2012, and 2011; and (iv) the unaudited Notes to Condensed Consolidated Financial Statements. No other changes have been made to the Form 10-Q. This Amendment does not reflect events that have occurred after the Dec. 18, 2012, filing date of the Form 10-Q, or modify or update the disclosures presented therein, except to reflect the amendment. A copy of the amended Form 10-Q is available for free at: http://is.gd/mbxyVB About Unilava Corporation Unilava Corporation (OTC BB: UNLA) -- http://www.unilava.com/-- is a diversified communications holding company incorporated under the laws of the State of Wyoming in 2009. Unilava and its subsidiary brands provide a variety of communications services, products, and equipment that address the needs of corporations, small businesses and consumers. The Company is licensed to provide long distance services in 41 states throughout the U.S. and local phone services across 11 states. Through its carrier- grade microwave wireless broadband infrastructure and broadband Internet access partners, the Company also offers mobile and high- definition IP-hosted voice services to residential customers and corporate clients. Additionally, Unilava delivers a comprehensive and integrated suite of fee-based online and mobile advertising and web services to a broad array of business enterprises. Headquartered in San Francisco, the Company has regional offices in Chicago, Seoul, Hong Kong, and Beijing. The Company reported a net loss of $2.98 million in 2011, compared with a net loss of $1 million in 2010. In its audit report accompanying the financial statements for fiscal 2011, De Joya Griffith & Company, LLC, in Henderson, Nevada, noted that the Company has suffered losses from operations, which raises substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $2.75 million in total assets, $8.07 million in total liabilities and a $5.31 million total stockholders' deficit. UNITED AMERICAN: Amends Fiscal 2012 Form 10-K --------------------------------------------- United American Healthcare Corporation filed an amendment no. 1 to the annual report on Form 10-K/A to amend Item 8. Financial Statements and Supplementary Data, Report of Independent Registered Public Accounting Firm for the fiscal years ended June 30, 2012, as filed with the Securities and Exchange Commission on Oct. 11, 2012. The report of the registered public accounting firm was amended to report on financial statements for the year ended June 30, 2011. In addition, consolidated statements of operations and consolidated statements of cash flows for the year ended June 30, 2010, were removed. The Notes to the Consolidated Statements were also revised to remove references to income statement information related to the fiscal year ended June 30, 2010. The amendment does not otherwise update information in the original filing to reflect facts or events occurring subsequent to the date of the Original Filing. A copy of the amended Form 10-K is available for free at: http://is.gd/kNIHsh Chicago-based United American Healthcare, through its wholly owned subsidiary Pulse Systems, LLC, provides contract manufacturing services to the medical device industry, with a focus on precision laser-cutting capabilities and the processing of thin-wall tubular metal components, sub-assemblies and implants, primarily in the cardiovascular market. The Company's balance sheet at Sept. 30, 2012, showed $15.5 million in total assets, $12.9 million in total liabilities, and stockholders' equity of $2.6 million. As reported in the TCR on Oct. 18, 2012, Bravos & Associates, CPA's, in Bloomingdale, Illinois, expressed substantial doubt about United American's ability to continue as a going concern. The independent auditors noted that the Company incurred a net loss from continuing operations of $1.9 million during the year ended June 30, 2012, and, as of that date, had a working capital deficiency of $10.2 million. UNITED SECURITY: A.M. Best Cuts Fin'l Strength Rating to 'B-' ------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B- (Fair) from B (Fair) and issuer credit rating to "bb-" from "bb" of United Security Assurance Company of Pennsylvania (United Security) (Souderton, PA). The outlook for both ratings has been revised to negative from stable. The rating downgrades reflect a material decline in United Security's capital and surplus through September 30, 2012, which led to a corresponding decline in its risk-adjusted capital. In addition, United Security has reported net losses over the past two years with operating performance in 2012 negatively impacted by a significant but voluntary, expected one time increase in Incurred But Not Reported reserves across several of its acquired long-term care blocks. Although the company is in the process of obtaining and implementing substantial rate increases, A.M. Best believes it is unlikely that near-to-medium-term operating results will enable United Security to replenish all of its lost capital, and more importantly, potentially absorb any additional reserve increases if they should be required. Although the company has been able to diversify into the whole life area, A.M. Best notes that United Security continues to have a limited business profile to offset its concentration in the long-term care business. A.M. Best believes United Security's future operating success is largely predicated on its ability to garner significant price increases across two of its acquired long-term care blocks. These increases may take several years to be fully implemented over the affected books of business. United Security's investment portfolio is primarily made up of fixed income investments and has performed well to date. Although United Security's portfolio contains a material proportion of structured securities relative to its capital base, A.M. Best believes this exposure is currently manageable. The negative outlook reflects A.M. Best's belief that further negative rating actions may occur if United Security's operating losses continue and/or its capital materially declines. Additionally, any acceleration of required debt payments at the parent would likely lead to additional negative rating actions. UNIVERSITY GENERAL: Crowe Horwath Replaces MKA as Accountants ------------------------------------------------------------- University General Health System, Inc., dismissed Moss, Krusick & Associates, LLC, as the Company's independent registered public accounting firm, effective Dec. 29, 2012. MKA had served as the Company's independent registered public accounting firm since March 9, 2011, and was approved by the Board to audit the Company's consolidated financial statements for the year ended Dec. 31, 2011. The dismissal of MKA was not as a result of any disagreements with the Company. The Company's Board approved the engagement of Crowe Horwath LLP as the Company's new independent registered public accounting firm to audit the Company's consolidated financial statements for the year ending Dec. 31, 2012. The audit report of MKA on the consolidated financial statements of the Company, as of and for the year ended Dec. 31, 2011, did not contain any adverse opinion or disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit scope, or accounting principles, except for modifications for going concern uncertainty. During the Company's two most recent fiscal years and the subsequent interim period preceding Crowe's engagement, neither the Company nor anyone on behalf of the Company consulted with Crowe regarding the application of accounting principles to any specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company's financial statements, and Crowe did not provide any written or oral advice to the Company. About University General University General Health System, Inc., located in Houston, Texas, is a diversified, integrated multi-specialty health care provider that delivers concierge physician- and patient-oriented services. UGHS currently operates one hospital and two ambulatory surgical centers in the Houston area. It also owns a revenue management company, a hospitality service provider and facility management company, three senior living facilities and manages six senior living facilities. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Moss, Krusick & Associates, LLC, in Winter Park, Florida, expressed substantial doubt about University General's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative operating cash flows, and has negative working capital. University General reported a net loss of $2.38 million in 2011, following a net loss of $1.71 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $140.67 million in total assets, $128.38 million in total liabilities and $3.79 million in series C, convertible redeemable preferred stock, and $8.49 million in total equity. UNIVERSITY GENERAL: Inks First Amendment to April 30 Warrants ------------------------------------------------------------- As previously disclosed, University General Health System, Inc., entered into a Securities Purchase Agreement, dated as of April 30, 2012, with institutional investors for the private issuance and sale by the Company to the Purchasers of (i) an aggregate of 7,616 shares of the Company's Series C Variable Rate Convertible Preferred Stock and (ii) warrants to purchase up to an aggregate of 17,309,094 shares of the Company's common stock. On Dec. 31, 2012, the Company and each holder of the Warrants entered into a First Amendment to Warrants pursuant to which: (i) the full ratchet price protection in the Warrants was deleted; (ii) the Company agreed, subject to certain limited exceptions, not to issue Common Stock for consideration per share less than the then existing exercise price per share under the Warrants without the consent of each holder of the Warrants; and (iii) the holders of the Warrants relinquished their right to require the Company to purchase the Warrants for cash upon the occurrence of certain fundamental transactions. Any new Warrants issued on or after Jan. 4, 2013, by the Company to the Purchasers as "Greenshoe Securities" pursuant to the Securities Purchase Agreement will reflect the amendments to the terms of the Warrants set forth in the First Amendment to Warrants. Also on Dec. 31, 2012, (i) the Company and the holders of Warrants to purchase an aggregate of 17,309,094 shares of Common Stock entered into a Second Amendment to Warrants pursuant to which the exercise price per share for those holders was reduced to $0.15 per share if and only if such Warrants are exercised on or before Dec. 31, 2012, (ii) each holder of the Warrants consented to the issuance of Common Stock at an exercise price of $0.15 per share as contemplated by the Second Amendment to Warrants, which issuance would constitute a Dilutive Issuance and (iii) each holder of Preferred Shares waived the full ratchet price protection that would otherwise be triggered under the Certificate of Designation relating to the Preferred Shares by the issuance of Common Stock at an exercise price of $0.15 as contemplated by the Second Amendment to Warrants. About University General University General Health System, Inc., located in Houston, Texas, is a diversified, integrated multi-specialty health care provider that delivers concierge physician- and patient-oriented services. UGHS currently operates one hospital and two ambulatory surgical centers in the Houston area. It also owns a revenue management company, a hospitality service provider and facility management company, three senior living facilities and manages six senior living facilities. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Moss, Krusick & Associates, LLC, in Winter Park, Florida, expressed substantial doubt about University General's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative operating cash flows, and has negative working capital. University General reported a net loss of $2.38 million in 2011, following a net loss of $1.71 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $140.67 million in total assets, $128.38 million in total liabilities and $3.79 million in series C, convertible redeemable preferred stock, and $8.49 million in total equity. UNIVERSITY GENERAL: Presents at Sidoti & Company Conference ----------------------------------------------------------- University General Health System, Inc., presented at the Sidoti & Company Annual New York Micro-Cap Conference. The conference will was held Jan. 7, 2013, at the Grand Hyatt New York Hotel in New York City. Hassan Chahadeh, M.D., Chairman and Chief Executive Officer, and Donald Sapaugh, President, were available for one-on- one meetings with investors during the day at the conference. About University General University General Health System, Inc., located in Houston, Texas, is a diversified, integrated multi-specialty health care provider that delivers concierge physician- and patient-oriented services. UGHS currently operates one hospital and two ambulatory surgical centers in the Houston area. It also owns a revenue management company, a hospitality service provider and facility management company, three senior living facilities and manages six senior living facilities. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Moss, Krusick & Associates, LLC, in Winter Park, Florida, expressed substantial doubt about University General's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative operating cash flows, and has negative working capital. University General reported a net loss of $2.38 million in 2011, following a net loss of $1.71 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $140.67 million in total assets, $128.38 million in total liabilities and $3.79 million in series C, convertible redeemable preferred stock, and $8.49 million in total equity. US FOODS: S&P Retains 'CCC+' Rating Despite $200MM Notes Add-On --------------------------------------------------------------- Standard & Poor's Ratings Services said that the 'CCC+' rating on Rosemont, Ill.-based US Foods Inc.'s (USF's) upsized $1.175 billion senior unsecured notes due 2019, which includes the proposed $200 million add-on, is unchanged. The recovery rating on the notes is '6', indicating S&P's expectation of negligible recovery (0% to 10%) for note holders in the event of a payment default or bankruptcy. S&P expects that the proceeds from the add-on offering will be used to repay over $190 million of USF's 11.25% senior subordinated notes, the related make-whole premium, and fees. The ratings are subject to change and assume the transaction is closed on substantially the terms presented to S&P. "All of our other existing ratings on the company, including the 'B' corporate credit rating, remain unchanged. The outlook is stable. Pro forma for the proposed transaction, total debt outstanding is about $4.9 billion," S&P said. USF's ratings reflect Standard & Poor's analysis that the company's financial risk profile will remain "highly leveraged" for the foreseeable future. "This is based on our opinion that the company has a very aggressive financial policy and significant debt burden. It is our opinion that the company's gross margin will remain under pressure because of continued weak demand and higher expenses, specifically elevated food costs. However, we expect credit measures to show slight improvement through 2014 thanks to fixed cost reductions and some debt repayment. Over the next year, we expect adjusted leverage to approach 7x and the ratio of funds from operations (FFO) to total debt to remain weak at roughly 8.5%," S&P added. S&P's "fair" business risk assessment reflects USF's participation in an intensely competitive, low-margin industry. The company benefits from its satisfactory market position, relatively stable historic industry demand, and broad geographic diversification within the U.S. Nevertheless, the potential for meaningfully higher food costs next year (stemming from the 2012 drought) is a key risk factor. If food prices increase significantly, USF's profitability could fall. This could occur if volume drops because of fewer people purchasing food away from home, or if food service distributors are unable to pass through most food-cost inflation to customers. For the complete corporate credit rationale, please see the research update on US Foods Inc. published Nov. 30, 2012, on RatingsDirect. RATING LIST Rating unchanged US Foods Inc. Corporate credit rating B/Stable/-- Senior secured B- Recovery rating 5 Senior unsecured $1.175 mil. 8.5% notes CCC+ Recovery rating 6 US POSTAL: To Accelerate Steps to Restructure Ops & Cut Costs ------------------------------------------------------------- The United States Postal Service said in a statement on Jan. 14 that The Postal Service Board of Governors met last week to discuss a wide range of accelerated cost cutting and revenue generating measures in the face of an unprecedented set of financial challenges, heightened by the inability of Congress to pass comprehensive postal legislation. Citing the fact that the Postal Service cannot wait indefinitely for legislation, the USPS Board of Governors has directed management to accelerate the restructure of Postal Service operations to further reduce costs in order to strengthen Postal Service finances. Specifically, the Board approved restructuring initiatives and also instructed the Postal Service to revise its 2012 five-year comprehensive plan to account for current financial and liquidity conditions. The Postal Service is currently implementing major cost reduction efforts throughout its retail, delivery and mail processing operations. Since 2006, the Postal Service has reduced its annual cost base by approximately $15 billion and reduced the size of its career workforce by 168,000 or 24 percent. During these unprecedented cost cutting initiatives, the Postal Service continued to deliver record levels of service to its customers. Despite achieving record growth in its package business and stabilization of other revenues, the Postal Service continues to operate with an inflexible business model that hinders its ability to be self-sufficient. In Fiscal Year 2012, the Postal Service was forced to default on $11.1 billion in mandated payments to the U.S. Treasury, which contributed to a recorded loss of $15.9 billion. The Postal Service continues to seek legislation to provide it with greater flexibility to control costs and generate new revenue, and encourages the 113th Congress to make postal reform legislation an urgent priority. A self-supporting government enterprise, the U.S. Postal Service is the only delivery service that reaches every address in the nation -- 151 million residences, businesses and Post Office(TM) Boxes. The Postal Service(TM) receives no tax dollars for operating expenses, and relies on the sale of postage, products and services to fund its operations. With 32,000 retail locations and the most frequently visited website in the federal government, usps.com, the Postal Service has annual revenue of more than $65 billion and delivers nearly 40 percent of the world's mail. If it were a private sector company, the U.S. Postal Service would rank 35th in the 2011 Fortune 500. In 2011, Oxford Strategic Consulting ranked the U.S. Postal Service number one in overall service performance of the posts in the top 20 wealthiest nations in the world. Black Enterprise and Hispanic Business magazines ranked the Postal Service as a leader in workforce diversity. The Postal Service has been named the Most Trusted Government Agency for six years and the sixth Most Trusted Business in the nation by the Ponemon Institute. UTSTARCOM HOLDINGS: Ordinary Shares Tender Offer Oversubscribed --------------------------------------------------------------- UTStarcom Holdings Corp. announced the preliminary results of its tender offer for the purchase of up to 25,000,000 of its ordinary shares at a price of $1.20 per share, which expired at 5:00 P.M., New York City time, on Thursday, Jan. 3, 2013. Based on the preliminary count by Computershare Trust Company N.A., the depositary for the tender offer, a total of 62,964,139 of UTStarcom's ordinary shares were properly tendered and not properly withdrawn. Additionally, 1,058,784 shares were tendered pursuant to notice of guaranteed delivery procedures. In accordance with the terms and conditions of the tender offer, and based on the preliminary count by the depositary, UTStarcom expects to accept for purchase 25,000,000 of its ordinary shares at a purchase price of $1.20 per share, for an aggregate cost of approximately $30 million, excluding fees and expenses relating to the tender offer. The 25,000,000 shares expected to be purchased in the tender offer represent approximately 17.6% of UTStarcom's currently issued and outstanding ordinary shares. Based on these preliminary numbers, UTStarcom anticipates that, following settlement of the tender offer, it will have approximately 117,067,711 ordinary shares outstanding. Due to the oversubscription of the tender offer, UTStarcom expects that the number of shares that UTStarcom will purchase from each tendering shareholder will be prorated. Based on the preliminary count, UTStarcom estimates that the proration factor will be approximately 39.7%, excluding shares tendered pursuant to guaranteed delivery procedures, or 39.1%, assuming all shares tendered pursuant to guaranteed delivery procedures are properly delivered. Jefferies & Company, Inc., is the dealer manager for the tender offer. The information agent for the tender offer is Alliance Advisors LLC. Shareholders, banks and brokers who have questions may call the dealer manager at (877) 547-6340 (toll free) or the information agent at (877) 777-5603 (toll free). About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company's headquarters are currently in Alameda, California, with its research and design operations primarily in China. The Company had income of $11.77 million in 2011, following a net loss of $65.29 million in 2010, and a net loss of $225.70 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $505.93 million in total assets, $279.29 million in total liabilities and $226.64 million in total equity. UTSTARCOM HOLDINGS: Amends Tender Offer Statement on Schedule TO ---------------------------------------------------------------- UTStarcom Holdings Corp. has amended and supplemented the Tender Offer Statement on Schedule TO originally filed with the Securities and Exchange Commission on Nov. 30, 2012, and relates to the offer by UTStarcom Holdings Corp. to purchase up to 25,000,000 of its ordinary shares, $0.00125 par value per share, at a price of $1.20, net to the seller in cash, less any applicable withholding taxes and without interest. The Company's offer was made upon the terms and subject to the conditions set forth in the Offer to Purchase dated Nov. 30, 2012, and in the related Letter of Transmittal, copies of which were previously filed on Schedule TO dated Nov. 30, 2012. The amendment was intended to satisfy the reporting requirements of Rule 13e-4(c)(3) under the Securities Exchange Act of 1934, as amended. (1) The second full sentence in the paragraph under the heading "Once I have tendered Shares in the Offer, may I withdraw my tendered Shares?", on page 4 of the Offer to Purchase, is hereby amended and restated as follows: "If we have not accepted for payment the Shares you have tendered to us, you may also withdraw your Shares beginning at 12:01 A.M., New York City time, on Wednesday, January 30, 2013." (2) The second sentence in the first paragraph under "Item 4. Withdrawal Rights.", on page 17 of the Offer to Purchase, is hereby amended and restated as follows: "Shares tendered pursuant to the Offer may be withdrawn at any time before the Expiration Date and, unless we have accepted tendered Shares for payment under the Offer, may also be withdrawn beginning at 12:01 A.M., New York City time, on Wednesday, January 30, 2013." (3) The third sentence in the second paragraph under the heading "2. Requirements of Tender.", on page 8 of the Letter of Transmittal, is hereby amended and restated as follows: "Shares that have not previously been accepted by UTStarcom for payment may be withdrawn beginning at 12:01 A.M., New York City time, on Wednesday, January 30, 2013." (4) The second sentence in the first paragraph under "Item 7. Conditions of the Offer.", on page 19 of the Offer to Purchase, is hereby amended and restated as follows: "Notwithstanding any other provision of the Offer, we will not be required to accept for payment, purchase or pay for any Shares tendered, and may terminate or amend the Offer or may postpone the acceptance for payment of or the payment for Shares tendered, subject to Exchange Act Rule 13e-4(f) (5), which requires that we must pay the consideration offered or return the Shares tendered promptly after termination or withdrawal of the Offer, if any time on or after the date of this Offer to Purchase and prior to the Expiration Date any of the following events have occurred (or are determined by us to have occurred) that, in our reasonable judgment and regardless of the circumstances giving rise to the event or events (excluding any action or inaction by us), makes it inadvisable to proceed with the Offer or with acceptance for payment or payment for the Shares in the Offer:" (5) The paragraph entitled "Share Repurchase Program." under "Item 11. Interest of Directors and Executive Officers; Transactions and Arrangements Concerning the Shares.", on page 26 of the Offer to Purchase is hereby amended and supplemented by adding the individual repurchases made by the Company pursuant to the share repurchase program during the 60 days prior to Nov. 30, 2012. A copy of the filing is available at http://is.gd/KhStad About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company's headquarters are currently in Alameda, California, with its research and design operations primarily in China. The Company had income of $11.77 million in 2011, following a net loss of $65.29 million in 2010, and a net loss of $225.70 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $505.93 million in total assets, $279.29 million in total liabilities and $226.64 million in total equity. UTSTARCOM HOLDINGS: Buys 25-Mil. Ordinary Shares for $30-Mil. ------------------------------------------------------------- UTStarcom Holdings Corp. announced the final results of its previously announced tender offer to purchase up to 25,000,000 of its ordinary shares at a price of $1.20 per share, which expired at 5:00 P.M., New York City time, on Thursday, Jan. 3, 2013. UTStarcom has accepted for purchase 25,000,000 of its ordinary shares at a price of $1.20 per share, for an aggregate cost of $30,000,000 excluding fees and expenses relating to the tender offer. Based on the final tabulation by Computershare Trust Company N.A., the Depositary for the tender offer, 63,357,546 of UTStarcom's ordinary shares were properly tendered and not withdrawn (excluding any conditional tenders that were not accepted due to the specified condition not being satisfied). UTStarcom has been informed by the Depositary that, after giving effect to the priority for "odd lots," the final proration factor is approximately 39.4%. The Depositary will promptly issue payment for the shares validly tendered and accepted for purchase and will return all other shares tendered. Immediately following the purchase of the tendered shares, UTStarcom expects to have approximately 117,068,276 ordinary shares outstanding. Jefferies & Company, Inc., is the dealer manager for the tender offer. The information agent for the tender offer is Alliance Advisors LLC. Shareholders, banks and brokers who have questions may call the dealer manager at (877) 547-6340 (toll free) or the information agent at (877) 777-5603 (toll free). About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company's headquarters are currently in Alameda, California, with its research and design operations primarily in China. The Company had income of $11.77 million in 2011, following a net loss of $65.29 million in 2010, and a net loss of $225.70 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $505.93 million in total assets, $279.29 million in total liabilities and $226.64 million in total equity. VERMILLION INC: Stockholder Meeting Delay Prompts Delisting ----------------------------------------------------------- George Bessenyei, Gregory V. Novak, and Robert S. Goggin, shareholders of the Vermillion Inc., commented on Jan. 10 on the inexcusable delay by the Company's Board in calling the 2012 Annual Stockholder meeting. The Group nominated Robert S. Goggin as Director Nominee for the 2012 Annual Meeting almost a year ago, on February 15, 2012. The last Annual Stockholder Meeting was held on June 6, 2011, more than 18 months ago. Yet, as of Jan. 10, the Company has not announced the date for its 2012 Annual Stockholder Meeting. According to George Bessenyei, "One must ask what the Company is so afraid of -- of course the logical answer is that the Company knows that disenfranchised stockholders will vote for a change in leadership, electing Mr. Goggin to the vacant seat." The Concerned Vermillion Stockholders have been vigilant in representing the interests of the Vermillion stockholders in holding the 2012 Annual Meeting promptly, and have taken steps to encourage the Company's Board to set a date for the meeting to take place as required by law and the Company's Bylaws. On December 26, 2012 Group member Bessenyei sent a letter to the Company, calling to the Board's attention its intentional violation of relevant laws and rules and the Company's Bylaws governing annual stockholder meetings. Shortly thereafter, on January 3, 2012, NASDAQ sent the Company a "Delisting Notice" notifying the Company that it is not in compliance with NASDAQ's Listing Rule 5620(a), which requires the Company to hold an annual meeting of stockholders no later than one year after the end of the Company's fiscal year-end. Rather than simply call the Annual Stockholder Meeting as required by NASDAQ, the Company's bylaws and applicable provisions of Delaware law, the Company on January 7, 2013 gave notice that it intends to appeal the NASDAQ's determination, further demonstrating, in the Group's opinion, that its true goal is to avoid giving the stockholders a voice at all costs. In order to force the Company to abide by its own Bylaws and the requirements of Delaware law, as well as to avoid a NASDAQ delisting process, on January 9, 2013, Bessenyei filed a complaint in the Delaware Chancery Court, asking the Court to order the Company to call and hold an annual meeting of stockholders at the earliest practicable date. Robert S. Goggin, stockholder Director Nominee concluded: "The current situation again exemplifies why we need change at the Board level. When a Board regularly disregards stockholders' rights, the market punishes all its stockholders with a low valuation. I believe that long-term investors are hesitant to invest in Vermillion, when directors are fighting off stockholders with frequent bylaw changes and other questionable methods. The recent delisting notice from NASDAQ demonstrates how desperate the Board has become when trying to avoid the long overdue change. As a newly elected Director, I will relentlessly push for change in the Board's attitude." About Vermillion Vermillion, Inc. is dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in oncology, hematology, cardiology and women's health. The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del. Case No. 09-11091). Vermillion's legal advisor in connection with its successful reorganization efforts wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged from bankruptcy in January 2010. The Plan called for the Company to pay all claims in full and equity holders to retain control of the Company. After auditing the Company's results for 2011, PricewaterhouseCoopers LLP, in Austin, Texas, expressed substantial doubt about Vermillion, Inc.'s ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring losses and negative cash flows from operations and has debt outstanding due and payable in October 2012. The Company reported a net loss of $17.8 million in 2011, compared with a net loss of $19.0 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $16.9 million in total assets, $11.5 million in total liabilities, and stockholders' equity of $5.4 million. VERTIS HOLDINGS: Taps FTI as Communications Consultants ------------------------------------------------------- Vertis Holdings Inc., et al., asked the U.S. Bankruptcy Court for the District of Delaware for authorization to employ FTI Consulting, Inc., as communications consultants for the Debtors, nunc pro tunc to the Petition Date. FTI will assist the Debtors in developing and implementing effective communications strategies to preserve continuity, maximize value and facilitate the orderly administration of the Debtors' cases. In this regard, among others things, FTI will support the Debtors with respect to: (a) Ensuring consistency of messaging across all communications, including appropriate levels of coordination with the buyer; (b) Providing ongoing employee updates to preserve the workforce and ensure continued focus during the Debtors' busiest season and throughout this transition; (c) Developing ongoing updates as well as specific presentations and letters, to address customer and vendor concerns, preserve these critical relationships and meet sale conditions; (d) Coodinating with vendor and employee support center operators to ensure accurate, up-to-date information is provided to all who use these resources; (e) Serving as primary media representative for all inquiries related to the Chapter 11 and sales processes; and (f) Performing other services commonly associated with strategic communications. FTI's current hourly billing rates are: Senior Managing Director $650 Managing Director $600 Sr. Director $525 Director $425 Sr. Consultant $350 Consultant $250 Paraprofessional $125 To the best of FTI's knowledge, information, and belief (i) FTI is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code, and holds no interest adverse to the Debtors or their estates, and (ii) FTI has no connection with the |Debtors, their creditors, the U.S. Trustee, or other parties in interest in the Debtors' Chapter 11 cases. About Vertis Vertis Holdings Inc. -- http://www.thefuturevertis.com/-- provides advertising services in a variety of print media, including newspaper inserts such as magazines and supplements. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. VERTIS HOLDINGS: World Graphic Is Consultant for Inserts Biz. ------------------------------------------------------------- Vertis Holdings Inc., et al., asked the U.S. Bankruptcy Court for the District of Delaware for authorization to employ World Graphic Services, nunc pro tunc to the Petition Date, as consultant to the Debtors' Inserts business. World Graphics has agreed to provide Max Harris and several additional qualified personnel selected by Mr. Harris to perform, or to continue to perform, certain consulting services for the Debtors, including: a. overseeing and managing the day-to-day operations of Debtors' Inserts platform; b. managing plant consolidations agreed to by the Debtors' CFO; c. developing a complete revamp of the approach to managing the Debtors' Insert operations to reduce costs, improve quality, and improve customer service for the sustainable long-term. d. if requested by Debtors, assigning one or two engineers to certain of the Debtors' Inserts facilities, for a period of at least three but not more than nine months to implement changes in processed for buying paper, managing and using paper and ink, and improving the flow of materials (the "SWAT Team Project"); and e. attending meetings, preparing presentations, and traveling in connection with the foregoing services. World Graphic will continue to receive direction from, and be accountable to the CEO of Vertis, Inc., and all of World Graphic's decisions and business plans must be approved in advance by the CEO. World Graphic will receive as compensation for its services: a. payment of a monthly fee of $165,000; b. reimbursement for all reasonable out-of-pocket expenses, provided that on a annual basis, World Graphic's monthly expenses will average no more than $35,000 per month (excluding any expenses for the SWAT Team Project); and c. $7,000 per week plus travel and expenses per SWAT Team assignment for each week in which one or more engineers ti assigned to said assignment. World Graphic has informed the Debtors that to the best of World Graphic's knowledge, information, and belief, (i) it is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b) of the Bankruptcy Code, and holds no interest adverse to the Debtors or their estates in connection with the matters for which World Graphic is to be retained y the Debtors, and (ii) it has no connection with the Debtors, their creditors, the U.S. Trustee, or other parties in interest in the Debtors' Chapter 11 cases. Max Harris, the owner of World Graphic Services, attests, however, that he and World Graphic's lead engineer, Ted Work, were previously employed by World Color Press prior to its acquisition by Quad in 2010. About Vertis Vertis Holdings Inc. -- http://www.thefuturevertis.com/-- provides advertising services in a variety of print media, including newspaper inserts such as magazines and supplements. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanely Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. VHGI HOLDINGS: Deborah Hutchinson Resigns from Board ---------------------------------------------------- Deborah Jenkins Hutchinson informed VHGI Holdings, Inc., that she would be resigning from her position as a member of the Company's Board of Directors. Her resignation was effective as of Dec. 28, 2012. About VHGI Holdings Fort Worth, Tex.-based VHGI Holdings, Inc., is a holding company with revenue streams from these business segments: (a) precious metals (b) oil and gas (c) coal and (d) medical technology. In a report on the Company's consolidated financial statements for the year ended Dec. 31, 2011, Pritchett, Siler & Hardy, P.C., in Salt Lake City, Utah, expressed substantial doubt about VHGI Holdings' ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial losses and has a working capital deficit. The Company reported a net loss of $5.43 million in 2011, compared with a net loss of $1.67 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $49.07 million in total assets, $54.61 million in total liabilities and a $5.53 million total stockholders' deficit. "The Company has current liabilities in excess of current assets and has incurred losses since inception. The Company has had limited operations and has not been able to develop an ongoing, reliable source of revenue to fund its existence. The Company's day-to-day expenses have been covered by proceeds obtained, and services paid by, the issuance of stock and notes payable. The adverse effect on the Company's results of operations due to its lack of capital resources can be expected to continue until such time as the Company is able to generate additional capital from other sources. These conditions raise substantial doubt about the Company's ability to continue as a going concern." VIGGLE INC: Dan Marino Leads Fantasy Football Playoff Challenge --------------------------------------------------------------- Viggle Inc. announced that former Miami Dolphins Hall of Fame Quarterback Dan Marino has joined forces with Viggle and will act as Honorary Commissioner of the MyGuy real-time fantasy football game, now through the end of the 2014 season. Marino's involvement will start with the MyGuy Playoff Football Challenge, running January 5-20. He will provide Viggle members with coaching tips and strategies to help them compete through this year's playoffs for a chance to win the grand prize and join him in New Orleans for The Big Game. MyGuy is the first of its kind real-time fantasy sports game played within the free Viggle application available for iOS and Android devices. MyGuy knows what teams are playing when a fan is watching a football game on TV and rewards players for success with Viggle points, which they can redeem for real rewards. Throughout the playoffs, fans will compete for the single highest score in games of MyGuy where users pick any player, any time while watching the games live on TV. "I am excited to be working with Viggle and MyGuy fantasy football. This is an innovative fantasy sports game that rewards you for actually watching the game live and making changes based on what is happening on the field - in real time," said Marino. "Now, fans get to play the coach and make adjustments as the game unfolds. No more sitting by as your star player gets injured or is having a bad game. You can sub him out just like the coaches do. What could be more fun and more realistic than that? Get involved now and I will see you in New Orleans." The nationwide leaderboard will track results weekly leading up to the Grand Prize - a trip for two to The Big Game in New Orleans, Louisiana - or one of four runner-up prizes - exclusive Marino signed jerseys or helmets and 500,000 Viggle points each. He will be involved throughout the competition providing fantasy football fans with exclusive tips and strategies from when to substitute a running back, quarterback, or receiver to when to play a hot defense. Marino will also post his thoughts at MyGuy.Viggle.com as well as on the Viggle blog and through social channels, giving fans all the latest strategies for success. "We know that our members have had some fun during the regular season with MyGuy," said Greg Consiglio, Viggle President and COO. "With the introduction of the MyGuy Playoff Football Challenge, that level of competitive play will increase, and we're honored to have hall of famer Dan Marino provide coaching tips and special insights this postseason and throughout the 2014 season as well." About Viggle New York City-based Viggle Inc. is a loyalty marketing company. The Company has developed a loyalty program for television that gives people real rewards for checking into the television shows they are watching on most mobile operating system. Viggle users can redeem their points in the app's rewards catalog for items such as movie tickets, music, or gift cards. The Company's balance sheet at Sept. 30, 2012, showed $17.3 million in total assets, $22.2 million in total liabilities, and a stockholders' deficit of $4.9 million. As reported in the TCR on Oct. 22, 2012, BDO USA, LLP, in New York City, expressed substantial doubt about Viggle's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and at June 30, 2012, has deficiencies in working capital and equity. VISUALANT INC: Marathon Capital Discloses 5.5% Equity Stake ----------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Marathon Capital Management, LLC, disclosed that, as of Dec. 31, 2012, it beneficially owns 5,124,000 shares of common stock of Visualant Incorporated representing 5.5% of the shares outstanding. A copy of the filing is available at: http://is.gd/WoxiqT About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant incurred a net loss of $2.72 million for the year ended Sept. 30, 2012, compared with a net loss of $2.39 million during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $5.31 million in total assets, $5.11 million in total liabilities, $170,616 in total stockholders' equity, and $31,807 in noncontrolling interest. PMB Helin Donovan, LLP, 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 sustained a net loss from operations and has an accumulated deficit since inception which raise substantial doubt about the Company's ability to continue as a going concern. VISUALANT INC: Amends Charters, Code of Conduct & Ethics Policy --------------------------------------------------------------- The Board of Directors of Visualant, Inc., amended the Company's Audit, Compensation and Nominations and Governance Committee Charters. Copies of these amended Charters and the Code of Ethics are available for free at: http://is.gd/GIGIsw http://is.gd/3fB8BP http://is.gd/EBDnwP In addition, on Dec. 28, 2012, the Company's Board of Directors amended the Company's Code of Conduct & Ethics Policy, a copy of which is available at http://is.gd/g6IgMG About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant incurred a net loss of $2.72 million for the year ended Sept. 30, 2012, compared with a net loss of $2.39 million for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $5.31 million in total assets, $5.11 million in total liabilities, $170,616 in total stockholders' equity, and $31,807 in noncontrolling interest. PMB Helin Donovan, LLP, in Nov. 10, 2012, 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 sustained a net loss from operations and has an accumulated deficit since inception which raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning The Securities Purchase Agreement dated June 17, 2011, with Ascendiant Capital Partners, LLC, will terminate if the Company's common stock is not listed on one of several specified trading markets (which include the OTCBB and Pink Sheets, among others), if the Company files protection from its creditors, or if a Registration Statement on Form S-1 or S-3 is not effective. If the price or the trading volume of the Company's common stock does not reach certain levels, the Company will be unable to draw down all or substantially all of its $3,000,000 equity line of credit with Ascendiant. The maximum draw down amount every 8 trading days under the Company's equity line of credit facility is the lesser of $100,000 or 20% of the total trading volume of the Company's common stock for the 10-trading-day period prior to the draw down multiplied by the volume-weighted average price of the Company's common stock for that period. If the Company stock price and trading volume decline from current levels, the Company will not be able to draw down all $3,000,000 available under the equity line of credit. "If we are not able to draw down all $3,000,000 available under the equity line of credit or if the Securities Purchase Agreement is terminated, we may need to restructure our operations, divest all or a portion of our business, or file for bankruptcy," the Company said in its quarterly report for the period ended June 30, 2012. VITESSE SEMICONDUCTOR: Raging Capital Holds 18.1% Equity Stake -------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Raging Capital Master Fund, Ltd., and its affiliates disclosed that, as of Jan. 1, 2013, they beneficially own 6,491,127 shares of common stock of Vitesse Semiconductor Corporation representing 18.1% of the shares outstanding. A copy of the filing is available for free at http://is.gd/Srx1ak About Vitesse Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of semiconductor solutions for Carrier and Enterprise networks worldwide. In October 2009, Vitesse completed a debt restructuring transaction that resulted in the conversion of 96.7% of the Company's 2024 Debentures into a combination of cash, common stock, Series B Preferred Stock and 2014 Debentures. With respect to the remaining 3.3% of the 2024 Debentures, Vitesse settled its obligations in cash. Additionally, Vitesse repaid $5.0 million of its $30.0 million Senior Term Loan, the terms of which were amended as part of the debt restructuring transactions. Vitesse incurred a net loss of $1.11 million in 2012, a net loss of $14.81 million in 2011, and a net loss of $20.05 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $56.61 million in total assets, $80.63 million in total liabilities, and a $24.01 million total stockholders' deficit. VUANCE LTD: Shareholders OK Change of Name to SuperCom Ltd. ----------------------------------------------------------- At the annual general meeting of the shareholders of Vuance Ltd. on Dec. 27, 2012, the shareholders approved Deloitte Brightman Almagor Zohar & Co as the Company's independent public accountant for the fiscal year 2012, and authorized the Company's Audit Committee to fix the remuneration of the independent public accountant in accordance with the volume and nature of their services. The shareholders elected Mrs. Tsviya Trabelsi and Messrs. Menachem Mirski and David Mimon to serve as directors of the Company for the coming year until the next annual general meeting of the Company's shareholders. The shareholders also elected Mrs. Shlomit Sarousi to the Board of Directors of the Company, to serve as an "external director" for a three-year term upon the fixed remuneration terms provided under applicable law. The shareholders approved the change of the name of the Company to SuperCom Ltd. and approved the appointment of Mrs. Trabelsi as the Chairman of the Board of Directors of the Company for a three-year term commencing as of the date of Dec. 27, 2012.. About Vuance Ltd. Qadima, Israel-based Vuance Ltd. is a leading provider of Wireless Identification Solutions. The Company currently offers an Active RFID technology, a long, active radio frequency identification equipment that utilizes active radio frequency communications to track assets, people and objects for potential governmental agency and commercial customers. The Company reported net income of US$1.02 million on US$7.92 million of revenue in 2011, compared with a net loss of US$1.96 million on US$7.38 million of revenue in 2010. In the auditors report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Fahn Kanne & Co. Grant Thornton Israel expressed substantial doubt about the Company's ability to continue as a going concern. The indepdent auditors noted that the Company has incurred substantial recurring losses and negative cash flows from operations and, as of Dec. 31, 2011, the Company had a working capital deficit and total shareholders' deficit. The Company's balance sheet at June 30, 2012, showed US$1.87 million in total assets, US$3.35 million in total liabilities and a US$1.47 million total shareholders' deficit. VYSTAR CORP: Amends Current Report to Add Financial Statements -------------------------------------------------------------- Vystar Corporation previously filed with the Securities and Exchange Commission, on Sept. 19, 2012, a current report on Form 8-K disclosing that the Company completed the acquisition of SleepHealth, LLC. Pursuant to the terms of the LLC Ownership Interest Purchase Agreement, the Company became the sole member of SleepHealth. Item 9.01(a) and (b) of the Current Report on Form 8-K did not include the historical financial statements of SleepHealth or the unaudited pro forma combined financial information of the Company, and instead contained an undertaking subsequently to file the Financial Information. The Company filed an amended Current Report for the purpose of satisfying the Company's undertaking to file the Financial Information required by Item 9.01(a) and (b) of Form 8-K. Copies of the financial statements are available at: http://is.gd/pJaE3n http://is.gd/MCCp2v About Vystar Corp Duluth, Ga.-based Vystar Corporation is the creator and exclusive owner of the innovative technology to produce Vytex(R) Natural Rubber Latex. This technology reduces antigenic protein in natural rubber latex products to virtually undetectable levels in both liquid NRL and finished latex products. The Company's balance sheet at Sept. 30, 2012, showed $1.31 million in total assets, $2.57 million in total liabilities and a $1.25 million total stockholders' deficit. Bankruptcy Warning According to the Company's quarterly report on Form 10-Q for the period ended June 30, 2012, there can be no assurances that the Company will be able to achieve its projected level of revenues in 2012 and beyond. "If the Company is unable to achieve its projected revenues and is not able to obtain alternate additional financing of equity or debt, the Company would need to significantly curtail or reorient its operations during 2012, which could have a material adverse effect on the Company's ability to achieve its business objectives and as a result may require the Company to file for bankruptcy or cease operations." Habif, Arogeti & Wynne, LLP, in Atlanta, Georgia, expressed substantial doubt about Vystar's ability to continue as a going concern, following its results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has recurring losses from operations, a capital deficit, and limited capital resources. VYSTAR CORP: Appoints Progress Equity Founding Partner to Board --------------------------------------------------------------- Vystar Corporation announced that Paul Yeoham has joined its board of directors effective Jan. 2, 2013, bringing the total number of Vystar board members to seven. Mr. Yeoham is a founding partner of Progress Equity Partners, Ltd., a private equity investment firm that acquires majority control of well-managed, entrepreneurial, service-based businesses, and brings with him more than 20 years of financial and investment management experience to the board. Prior to forming Progress Equity, he was a senior partner at Transition Capital Partners, Ltd., a similar private equity firm. Mr. Yeoham joined Transition Capital Partners in 1993 as an associate, while the firm operated as Best Associates, and became a partner in 1996 when the firm changed its name to Best, Patterson, Crothers and Yeoham, Ltd. Mr. Yeoham received a Bachelor's Degree in Business Administration and Finance from the University of Texas at Arlington and a Master's Degree in Business from Southern Methodist University. William Doyle, President and CEO of Vystar Corporation, commented, "Paul's appointment to our Board of Directors comes at a pivotal point in our growth story. With the acquisition of SleepHealth, the recent formation of two important durable medical equipment (DME) partnerships and continued focus on the vertical integration of Vystar businesses, his financial, M&A and operational experience will be pivotal to successfully executing our expansion strategy and evaluating any and all growth opportunities in the year ahead." Paul Yeoham stated, "I'm pleased to join Vystar's board of directors. The Company's new SleepHealth division and growing DME partners, in addition to its core premium Vytex NRL product, have laid a solid foundation for its next stage of growth which we anticipate will be marked by increased revenue and profitability. I look forward to becoming an integral aspect of their team and to providing the necessary guidance and assistance to help them reach their business objectives." In addition to Vystar Corporation, Mr. Yeoham currently serves on the boards of Terracare Associates and Oncology Molecular Imaging, LLC. He has previously served in a similar capacity for the boards of Texas Home Health Holdings, Inc., Tributary Systems, Inc., Digney York Associates, LLC, Network for Medical Communication and Research, LLC (NMCR), Conisus, LLC (Envision Communications) and more recently Westcon, Inc. Other members of Vystar's Board of Directors include Tom Marsh, President of Centrotrade Minerals and Metals, Inc. (dba: Centrotrade Rubber USA), the technical advisory U.S. based subsidiary of Centrotrade, a leading global distributor of rubber, latex and chemicals; J. Douglas Craft, Founder and Chief Executive Officer of Atlanta-based Medicraft Inc., one of the largest independent distributors for Medtronic since 1984. Over the past ten years, Doug has been actively engaged in expanding the base of businesses to include Intraoperative Neuro-Monitoring, Orthopedics, Biologics, Interventional Pain therapies and Government contracting; JC Allegra, MD, is the Co-Founder of NMCR, an educational organization dedicated to assisting cancer physicians in their utilization of new cancer therapies. Dr. Allegra is also the Founder of Lincoln Lee Investments, a family office which supervises the investments of the Allegra Family. Dr. Allegra is a NIH/NCI trained medical oncologist who established the new Cancer Medicine Division at the University of Louisville in 1980 and served the University from 1982-1989 as Professor and Chairmen of its Department of Medicine; Mitsy Mangum, Vice President of Investments at Mid-South Capital Inc., helped spearhead the SleepHealth acquisition and has over 25 years of institutional and retail investment experience. She also serves as VP of finance for the Charleston School of Business Club in Atlanta, Georgia; Dean Waters, a seventeen year financial services veteran, is the Founder and Managing Director of FiveFold Capital, an investment banking firm focused on early stage companies and is a former senior executive of Commerce Street Capital, Global Capital Finance, GMAC Commercial Finance, and Bank of America; and William Doyle, President and CEO of Vystar Corporation. Mr. Yeoham was granted 400,000 options to purchase Company stock at $.35 per share. Those options vest 20,000 per fiscal quarter of service by Mr. Yeoham to the Company's Board of Directors beginning March 31, 2013, and continuing for each fiscal quarter thereafter so long as Mr. Yeoham continues to be a member of the Board of Directors on the last day of each such fiscal quarter. About Vystar Corp Duluth, Ga.-based Vystar Corporation is the creator and exclusive owner of the innovative technology to produce Vytex(R) Natural Rubber Latex. This technology reduces antigenic protein in natural rubber latex products to virtually undetectable levels in both liquid NRL and finished latex products. Bankruptcy Warning According to the Company's quarterly report on Form 10-Q for the period ended June 30, 2012, there can be no assurances that the Company will be able to achieve its projected level of revenues in 2012 and beyond. "If the Company is unable to achieve its projected revenues and is not able to obtain alternate additional financing of equity or debt, the Company would need to significantly curtail or reorient its operations during 2012, which could have a material adverse effect on the Company's ability to achieve its business objectives and as a result may require the Company to file for bankruptcy or cease operations." Habif, Arogeti & Wynne, LLP, in Atlanta, Georgia, expressed substantial doubt about Vystar's ability to continue as a going concern, following its results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has recurring losses from operations, a capital deficit, and limited capital resources. The Company's balance sheet at Sept. 30, 2012, showed $1.31 million in total assets, $2.57 million in total liabilities and a $1.25 million total stockholders' deficit. W25 LLC: Court Approves Avrum J. Rosen as Counsel ------------------------------------------------- W25 LLC sought and obtained permission from the U.S. Bankruptcy Court to employ The Law Offices of Avrum J. Rosen, PLLC as counsel. The firm attests that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Compensation will be paid at the firm's customary hourly rate of $450 to $495 per hour for partner time; and $250 to $375 for associate time. It is anticipated that the majority of the legal services will be performed by Avrum J. Rosen at the hourly rate of $495. W25 LLC filed a bare-bones Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-14526) in Manhattan on Nov. 6, 2012. Avrum J. Rosen, Esq., at The Law Offices of Avrum J. Rosen, PLLC, in Huntington, New York, serves as counsel. The Debtor estimated assets and debts of at least $10 million. WATERSCAPE RESORT: Ex-Construction Manager Wants in on Settlements ------------------------------------------------------------------ Lance Duroni of BankruptcyLaw360 reported that the former construction manager for New York?s Cassa NY Hotel on Tuesday accused the hotel?s reorganized developer, Waterscape Resort LLC, of improperly excluding it from post-bankruptcy settlements with subcontractors over unpaid work on the project. In an objection filed in New York bankruptcy court, the construction manager, Pavarini McGovern LLC, said that it must be included in any settlement with the subcontractors, with mutual releases among all parties, the report said. Waterscape is trying to settle the subcontractors' claims at a discount based on "unproven, unsubstantiated" allegations, the report added. About Waterscape Resort Waterscape Resort LLC, aka Cassa NY Hotel and Residences, filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-11593) on April 5, 2011. Waterscape acquired property consisting of three contiguous buildings at 66, 68 and 70 West 45th Street in Manhattan, for the sum of $20 million, and developed the property into a 45-storey condominium project including a luxury hotel, a restaurant and luxury residential apartments. The purchase was financed with a $17 million acquisition loan and mortgage from U.S. Bank Association. The Cassa NY Hotel and Residences features 165 hotel rooms, and above the hotel units, 57 residences. Brett D. Goodman, Esq., and Lee William Stremba, Esq., at Troutman Sanders LLP represent the Debtor as Bankruptcy Counsel. Holland & Knight LLP serves as its special litigation counsel. The Debtor disclosed $214,285,027 in assets and $158,756,481 in liabilities as of the Chapter 11 filing. A 3-member Official Committee of Unsecured Creditors has been appointed in the Debtor's Chapter 11 case. Schiff Hardin LLP, serves as the Committee's counsel. U.S. Bankruptcy Judge Stuart Bernstein confirmed Waterscape's reorganization plan on July 22, 2011, which calls for repaying much of the company's debt with proceeds from the $128 million sale of the hotel section of the development. The Plan was filed on May 6, 2011. WEST PENN: Fitch Cuts Rating on $726-Mil. Revenue Bonds to 'C' -------------------------------------------------------------- Fitch Ratings has downgraded West Penn Allegheny Health System's approximately $726 million series 2007A health system revenue bonds issued by the Allegheny County Hospital Development Authority to 'C' from 'CCC'. The rating action follows a press report that WPAHS, Highmark Inc., and WPAHS bondholders have tentatively agreed to a plan that would reduce the amount owed to bondholders and prevent a bankruptcy filing by WPAHS. Highmark and WPAHS confirm only that discussions with bondholders are underway. Fitch notes that information from management is limited due to the terms of a nondisclosure agreement among the parties. Nevertheless, Fitch believes that a negotiated debt restructuring appears to be inevitable to forestall insolvency, given WPAHS's financial deterioration and the failure of WPAHS and Highmark to complete a proposed merger. In addition, on Jan. 3, 2013, WPAHS's bond trustee issued a notice of default regarding WPAHS's failure to release audited financial statements for the year ended June 30, 2012, which were due 180 days from the end of the fiscal year. WPAHS has 30 days to cure the default. WEST 380: Files Schedules of Assets and Liabilities --------------------------------------------------- West 380 Family Care Facility filed with the U.S. Bankruptcy Court for the Northern District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $24,405,000 B. Personal Property $13,815,048 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $71,352,111 E. Creditors Holding Unsecured Priority Claims $813,974 F. Creditors Holding Unsecured Non-priority Claims $10,707,463 ----------- ----------- TOTAL $38,220,048 $82,873,548 A copy of the Debtor's schedules is available for free at: http://bankrupt.com/misc/WEST_380_sal.pdf Bridgeport, Texas-based West 380 Family Care Facility, doing business as North Texas Community Hospital, opened in August 2008 and operates in a 99,000 square-feet two-story building on 19 acres of land. The hospital has 36 beds and 57 doctors on staff. There are 200 employees constituting 130 full time equivalent employees. West 380 filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-46274) on Nov. 8, 2012. Andrew G. Edson, Esq., Duane J. Brescia, Esq., and Stephen A. Roberts, Esq., at Strasburger & Price LLP serve as its counsel. It estimated $10 million to $50 million in assets and $50 million to $100 million in debts. Judge D. Michael Lynn presides over the case. WESTMORELAND COAL: Jeffrey Gendell Discloses 18.9% Equity Stake --------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Jeffrey L. Gendell and his affiliates diclosed that, as of Jan. 2, 2013, they beneficially own 2,677,150 shares of common stock of Westmoreland Coal Company representing 18.9% of the shares outstanding. Mr. Gendell previously reported beneficial ownership of 2,840,261 common shares or a 20.4% equity stake as of April 2, 2012. A copy of the amended filing is available for free at http://is.gd/eUDx65 About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. The Company reported a net loss of $36.87 million in 2011, a net loss of $3.17 million in 2010, and a net loss of $29.16 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $971.15 million in total assets, $1.22 billion in total liabilities and a $252.74 million total deficit. * * * As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Englewood, Co.-based Westmoreland Coal Co. (WLB). to 'B-' from 'CCC+'. "The upgrade reflects our view that WLB is less vulnerable to default after successfully negotiating less restrictive covenant requirements for an unrated $110 million term loan due 2018," said credit analyst Gayle Bowerman. "Our assessment of WLB's business risk profile as 'vulnerable' and financial risk profile as 'highly leveraged' are unchanged. We also revised our liquidity score to 'adequate' based on the covenant relief and additional liquidity provided under the company's new $20 million asset-based loan (ABL) facility from 'less than adequate'." WESTSIDE COMMUNITY BANK: Closed; Sunwest Bank Assumes Deposits -------------------------------------------------------------- Westside Community Bank of University Place, Wash., was closed on Friday, Jan. 11, 2013, by the Washington State Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Sunwest Bank of Irvine, Calif., to assume all of the deposits of Westside Community Bank. The two branches of Westside Community Bank will reopen during their normal business hours as branches of Sunwest Bank. Depositors of Westside Community Bank will automatically become depositors of Sunwest Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Westside Community Bank should continue to use their existing branch until they receive notice from Sunwest Bank that it has completed systems changes to allow other Sunwest Bank branches to process their accounts as well. As of Sept. 30, 2012, Westside Community Bank had around $97.7 million in total assets and $96.5 million in total deposits. In addition to assuming all of the deposits of the failed bank, Sunwest Bank agreed to purchase essentially all of the assets. Customers with questions about the transaction should call the FDIC toll-free at 1-800-830-4705. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/westside.html. The FDIC estimates that the cost to the Deposit Insurance Fund will be $20.3 million. Compared to other alternatives, Sunwest Bank's acquisition was the least costly resolution for the FDIC's DIF. Westside Community Bank is the first FDIC-insured institution to fail in the nation this year, and the first in Washington. The last FDIC-insured institution closed in the state was Bank of Whitman, Colfax, on Aug. 5, 2011. WILLBROS GROUP: Unit Completes Sale of Interests to Interserve -------------------------------------------------------------- Willbros Group, Inc. on Jan. 7 disclosed that its subsidiary, Willbros International Finance & Equipment Limited, has signed a definitive Share Purchase Agreement and has completed the sale of all of the Company's interests in Oman to Interserve Holdings Limited, a subsidiary of Interserve Plc, a U.K. company traded on the London Stock Exchange, (the "Buyer"). The Buyer purchased Willbros Middle East Limited, a subsidiary of Willbros that owns its interest in The Oman Construction Company. The all-cash transaction generated net proceeds to Willbros of over $36.0 million after transaction-related costs. The transaction was approved by the Boards of both Willbros Group and Interserve. Randy Harl, President and Chief Executive Officer of Willbros, said, "This sale of our Oman operations supports our strategic plan to increase our focus on the robust North American markets for energy infrastructure and enables us to further reduce our debt obligations. We are continuing to examine other non- strategic asset sales and are making progress on the disposition of certain underperforming units." Willbros Group, Inc. -- http://www.willbros.com-- is an independent contractor serving the oil, gas, power, refining and petrochemical industries, providing engineering, construction, turnaround, maintenance, life-cycle extension services and facilities development and operations services to industry and government entities worldwide. * * * As reported by the Troubled Company Reporter on Nov. 13, 2012, Willbros amended its credit agreement to extend the maturity date of its senior secured credit facility and to modify the debt covenants and increase the amount of funds available for borrowing under certain conditions. The company also received incremental term loans of $60 million. These amendments have addressed some of the debt maturity and liquidity concerns that led to Moody's negative outlook in May of this year. However, recent operating results have been weak and the company is expected to generate negative free cash flow this year. In addition, this is the second time the company has been forced to amend its credit facility within the past 20 months and it has not addressed its longer term financing needs. Therefore, Moody's is maintaining the company's B3 corporate family rating and Moody's negative outlook. WM SIX: Amends List of Top Unsecured Creditors ---------------------------------------------- WM Six Forks, LLC, has filed with the U.S. Bankruptcy Court for the Eastern District of North Carolina an amendment to the list of its top unsecured creditors. Four entities were scratched from the original list: (i) Thyssenkrupp Elevator Corp.; (ii) Dreamscapes, LLC; (iii) Manning Fulton & Skinner, P.A.; (iv) Neuwave Systems, Inc. They were replaced with: (i) Kindberg Contract; (ii) Hill's Complete Carpet; (iii) Rising Sun Pools; (iv) Cary Reconstruction Co. Entity Type of Claim Claim Amount ------ ------------- ------------ Lenox Mortgage XVII, LLC Apartment complex $39,000,000 Attn: John Harrelson known as Windsor ($32,544,445 Aspen Square Management, Inc. Manor Subdivision secured) 380 Union Street, Suite 300 900 East Six Forks ($304,262.39 West Springfield, MA 01089 Road senior lien) Raleigh, North Carolina 27604 Horizon, Inc. Windsor Manor $899,737.80 Nelson G. Harris (Order of Summary ($0 secured) 7320 Six Forks Road, Suite 100 Judgment entered Raleigh, NC 2615 4/25/11) Shelco, Inc. Winsor Manor $700,754 Attn: Managing Agent (Order and Judgment ($0 secured) 5016 Parkway Plaza, Boulevard entered 5/21/11) Suite 100 Charlotte, NC 28217 Tindall Corporation Windsor Manor $335,199.70 Attn: Managing Agent ($0 secured) P.O. Box 1778 Spartanburg, SC 29304 Southeastern Electrical Windsor Manor $187,706.90 Distributors, Inc. (Summary Judgment ($0 secured) and Order to Disburse Funds entered on 3/29/11 Hughes Metal Works, LLC Windsor Manor $88,432.70 (Judgment entered ($0 secured) 3/15/11) Abacus Management Group, LLC Property Management $64,727.20 Services Kindberg Contract C1 carpet install $10,817.89 Services, Inc. and sea floor Hill's Complete Carpet address change per $8,551.58 filed claim Progressive Plumbing & Piping, Inc. $7,556.06 Time Warner (Fayetteville) $7,423.15 Petrucelli Construction $6,788.34 Steven Woodlief $6,350.00 Rising Sun Pools salt water $5,201.81 conversion Cary Reconstruction Co. $4,998.64 Pacific General, LLC $4,130.00 Carolina Appliance Corporation $3,888.46 Baker Roofing Company $3,507.84 Water Systems, Inc. $3,202.50 SimplexGrinnell $2,730.12 About WM Six Forks WM Six Forks LLC is the owner of an apartment and retail/office complex in Raleigh, North Carolina, known as Manor Six Forks, which opened in March 2010. The property includes 298 residential apartments and roughly 14,000 square feet of retail/office space on the ground floor. As of the bankruptcy filing date, all the retail/office space is vacant and roughly 95% of the residential apartments are subject to existing leases. WM Six Forks filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-05854) on Aug. 12, 2012. The Debtor disclosed assets of $33.36 million and liabilities of $49.8 million. The Debtor said in court papers the Manor is valued at $32.54 million. The Debtor also owns a 15.15-acre property, the value of which is not yet determined. The Debtors' property serves as collateral to a $39 million debt to Lenox Mortgage XVI, LLC. A copy of the schedules filed together with the petition is available at http://bankrupt.com/misc/nceb12-05854.pdf Bankruptcy Judge J. Rich Leonard oversees the case. The Debtor hired Northen Blue, LLP as counsel. The petition was signed by William G. Garner, manager of WM6F Completion & Performance Assoc., LLC. Dawn Barnes has been assigned as case manager. The Bankruptcy Administrator for the Eastern District of North Carolina Bankruptcy notified that it was unable to form a creditors committee in the Chapter 11 case of WM Six Forks, LLC. WM SIX: Amends Schedules of Assets and Liabilities -------------------------------------------------- WM Six Forks LLC filed with the U.S. Bankruptcy Court for the Eastern District of North Carolina an amendment to its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $32,545,557 B. Personal Property $819,348 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $45,049,891 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $4,946,369 ----------- ----------- TOTAL $33,364,906 $49,996,260 A copy of the Debtor's schedules is available for free at: http://bankrupt.com/misc/WM_SIX_sal_amended.pdf The Debtor disclosed assets of $33,694,906 and liabilities of $49,753,702 in the prior iteration of the schedules. About WM Six Forks WM Six Forks LLC is the owner of an apartment and retail/office complex in Raleigh, North Carolina, known as Manor Six Forks, which opened in March 2010. The property includes 298 residential apartments and roughly 14,000 square feet of retail/office space on the ground floor. As of the bankruptcy filing date, all the retail/office space is vacant and roughly 95% of the residential apartments are subject to existing leases. WM Six Forks filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-05854) on Aug. 12, 2012. The Debtor said in court papers the Manor is valued at $32.54 million. The Debtor also owns a 15.15- acre property, the value of which is not yet determined. The Debtors' property serves as collateral to a $39 million debt to Lenox Mortgage XVI, LLC. A copy of the schedules filed together with the petition is available at http://bankrupt.com/misc/nceb12- 05854.pdf Bankruptcy Judge J. Rich Leonard oversees the case. The Debtor hired Northen Blue, LLP as counsel. The petition was signed by William G. Garner, manager of WM6F Completion & Performance Assoc., LLC. Dawn Barnes has been assigned as case manager. The Bankruptcy Administrator for the Eastern District of North Carolina Bankruptcy notified that it was unable to form a creditors committee in the Chapter 11 case of WM Six Forks, LLC. WOOD ENERGY: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: The Wood Energy Group, Inc. 2255 Glades Road, #111E Boca Raton, FL 33431 Bankruptcy Case No.: 13-10688 Chapter 11 Petition Date: January 11, 2013 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Paul G. Hyman, Jr. Debtor's Counsel: Robert C. Furr, Esq. FURR & COHEN 2255 Glades Road #337W Boca Raton, FL 33431 Tel: (561) 395-0500 Fax: (561) 338-7532 E-mail: bnasralla@furrcohen.com Scheduled Assets: $3,699,985 Scheduled Liabilities: $8,483,301 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb13-10688.pdf The petition was signed by Soneet R. Kapila, chief restructuring officer. WOUND MANAGEMENT: Extends Forbearance with Tonaquint ---------------------------------------------------- Wound Management Technologies, Inc., entered into a Second Amendment to the forbearance agreement with Tonaquint, Inc., adding a fourth optional 30-day extension period. Tonaquint and Wound Management previously entered into the Forbearance Agreement with respect to the Secured Convertible Promissory Note in the original principal amount of $560,000, pursuant to which Tonaquint agreed, among other things, to refrain from exercising its rights under the Note through Oct. 16, 2012, subject to two optional 30-day extension periods. On Dec. 5, 2012, Tonaquint and the Company entered into a First Amendment to Forbearance Agreement, adding a third optional 30-day extension period. A copy of the Second Amendment is available for free at: http://is.gd/HNzASo About Wound Management Fort Worth, Texas-based Wound Management Technologies, Inc., markets and sells the patented CellerateRX(R) product in the expanding advanced wound care market; particularly with respect to diabetic wound applications. Pritchett, Siler & Hardy, P.C., in Salt Lake City, Utah, expressed substantial doubt about Wound Management'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 incurred substantial losses and has a working capital deficit. The Company's balance sheet at Sept. 30, 2012, showed $2.76 million in total assets, $6.36 million in total liabilities and a $3.60 million deficit. WPCS INTERNATIONAL: Held Conference Call to Discuss Q2 Results -------------------------------------------------------------- WPCS International Incorporated held an earnings conference call on Dec. 17, 2012, to discuss its unaudited financial results for the second fiscal quarter ended Oct. 31, 2012. "We are pleased to report a second consecutive quarter of EBITDA profitability from our operation centers. For the second quarter of fiscal year 2013 ended October 31, 2012, our five operation centers generated $1.4 million in EBITDA on revenue of $9.9 million. This is a significant improvement from the $894,000 of EBITDA on revenue of $21.7 million that was generated in the same period one year ago," Andy Hidalgo, chairman and CEO of WPCS International said. "At the end of the second quarter, WPCS had a backlog of approximately $28.9 million comprised of a variety of projects in the public services, healthcare and energy sectors. Our goal continues to be converting more of our bids into backlog. We are confident we can do so. The conversion of these bids to backlog and the effective management of projects through completion will give us the opportunity to build shareholder value," he added. The script of the earnings conference call is available for free at http://is.gd/irbXvH 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. "At October 31, 2012, the Company had cash and cash equivalents of $921,206 and working capital of $1,265,636, which consisted of current assets of $15,897,614 and current liabilities of $14,631,978, and on December 4, 2012, repaid the existing loan with Sovereign. However, the Company's outstanding obligations under the Zurich Agreement and Indemnity Agreement raise substantial doubt about the Company's ability to continue as a going concern," according to the Company's Form 10-Q for the period ended Oct. 31, 2012. ZACHRY HOLDINGS: S&P Assigns Prelim. 'BB-' Corporate Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned its preliminary 'BB-' corporate credit rating to Zachry Holdings Inc. At the same time, S&P also assigned its preliminary 'B+' issue rating and '5' recovery rating (indicating S&P's expectation of modest [10%-30%] recovery in the event of payment default) to Zachry Holdings Inc.'s proposed $250 million senior unsecured notes due 2020. All ratings are subject to a review of final documentation. "The ratings on Zachry reflect our view of the company's "weak" business risk profile and "significant" financial risk profile. "The stable outlook indicates our expectation for sustained mid- single-digit EBITDA margins on recovering demand in its end markets from the downturn in 2009 and 2010," said Standard & Poor's credit analyst Robyn Shapiro. S&P's financial risk assessment reflects leverage expectations of leverage below 3x and positive free cash flow generation prospects in 2013. The proposed refinancing extends the maturity on its existing debt. The business risk profile assessment reflects the company's exposure to cyclical end-markets amid competitive bidding. The company provides engineering, procurement, and construction (EPC), and maintenance and turnaround services in the U.S. to the domestic energy and industrial infrastructure end markets, including refining, petrochemicals, power generation, and other related energy sectors. Through the September 2012 acquisition of JV Industrial Companies Ltd. (JVIC), Zachry has added to its maintenance and turnaround business. After being deferred during the economic downturn, EPC projects, as well as maintenance and plant turnaround activity, are slowly picking up across the company's end markets. Still, the company remains exposed to some pricing pressure given the presence of a number of regional, national and international competitors. The ratings incorporate the inherent cyclicality of the engineering and construction services sector in which Zachry participates. S&P believes other risks include the competitive nature of the industry and the potential for cost overruns in the execution of fixed-price contracts. As of Sept. 30, 2012, a little more than half of the company's revenues were from cost reimbursable contracts with the remainder from contracts that are primarily fixed-price. S&P believes the company's long-term operating performance could benefit from fundamentals supporting increased activity in some of Zachry's end markets. Additionally, with more than 15,000 employees, Zachry is one of the largest direct-hire EPC and industrial service companies in the U.S. The company estimates that they self-perform more than 90% of the labor scope of construction projects, including all of the major crafts (civil, structural, mechanical, piping, insulation, electrical, instrumentation, and controls), giving the company the ability to directly control the majority of the on-site craft labor work force and thereby reduce interface inefficiency costs and duplication of overhead costs, which may occur in a subcontract construction approach. Therefore, S&P views this as a competitive advantage for Zachry. The company's backlog was $2.7 billion as of Sept. 30, 2012 (pro forma for the JVIC acquisition), up significantly from $1.8 billion at year-end 2011. Its adjusted EBITDA margins remain in the mid-single-digit area as of Sept. 30, 2012. The cyclical nature of the company's end markets and thin margins can significantly erode operating results during a downturn. "In our base case, we estimate leverage (including our adjustments, mainly for operating leases and postretirement obligations) at less than 3x in 2013, with funds from operations (FFO) to debt of more than 20%. For the current rating, we consider debt to EBITDA of less than 3.5x and FFO to debt of about 20% to be appropriate. John B. Zachry owns or controls 100% of the company's equity and has the ability to control all matters requiring shareholder approval, including the election of the board of directors and significant transactions. In our view, during the past few years, the company's financial policies have not been very aggressive given industry risks," S&P noted. "The stable outlook reflects our expectation for positive free cash flow in 2013 based upon slow ongoing recovery in the company's end markets. We could lower the ratings if a shortfall in operating performance (arising from unexpected weakness in end- market demand) dampens profit margins, leading to significantly lower-than-expected free cash flow generation. A downgrade is also likely to occur if credit protection measures deteriorate-- for instance, if we expect adjusted leverage persistently above 3.5x. We could consider raising the rating if we expect the company to maintain leverage of less than 2.5x with consistent free cash flow over the business cycle, and if we expect the company to pursue financial policies consistent with a higher rating," S&P added. ZACKY FARMS: Amends Schedules of Assets and Liabilities ------------------------------------------------------- Zacky Farms, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of California an amendment to its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $13,045,303 B. Personal Property $63,518,973 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $67,946,326 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $41,351,354 ----------- ----------- TOTAL $76,564,276 $109,297,679 A copy of the Debtor's schedules is available for free at: http://bankrupt.com/misc/ZACKY_FARMS_salb.pdf As reported by the Troubled Company Reporter on Dec. 4, 2012, the Debtor filed its schedules, disclosing total assets of $72,233,554 and total liabilities of $67,345,041. About Zacky Farms Fresno, California-based Zacky Farms LLC, whose operations include the raising, processing and marketing of poultry products, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No. 12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly 1,000 employees and operates in multiple plants, farms and offices in California, including operations in Los Angeles, Fresno, Tulare, Kings, San Joaquin and San Bernardino Counties. The company blames high feed prices for losses in recent years. The Company has plans to sell itself to pay creditors. Bankruptcy Judge Thomas Holman presides over the case. The petition was signed by Keith F. Cooper, the Debtor's sole manager. An official committee of unsecured creditors has been appointed in the case. Lowenstein Sandler represents the Committee. The Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan, Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron. The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky Trust U/D/T dated July 26, 1988, is represented by Thomas Walper, Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP. ZOGENIX INC: Expects to Report $36-Mil. Product Revenue for 2012 ---------------------------------------------------------------- Zogenix, Inc., announced preliminary unaudited gross product sales for the quarter ended Dec. 31, 2012. Zogenix expects to report fourth quarter 2012 gross product sales of approximately $13.5 million on 145,200 units shipped, with unit volume up approximately 9% sequentially from third quarter 2012 and 26% from fourth quarter 2011. For the full year 2012, Zogenix announced preliminary unaudited net product revenue of approximately $36 million, up approximately 18% over 2011 and slightly below previously issued guidance of $37 million for 2012. Preliminary unaudited cash and cash equivalents as of Dec. 31, 2012, were approximately $41.2 million. About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Ernst & Young LLP, in San Diego, Calif., issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and lack of sufficient working capital. The Company reported a net loss of $83.90 million in 2011, a net loss of $73.56 million in 2010, and a net loss of $45.88 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $91.30 million in total assets, $78.01 million in total liabilities and $13.28 million in total stockholders' equity. ZOGENIX INC: Offering 15.7MM Common Shares, $75MM Securities ------------------------------------------------------------ Zogenix, Inc., filed a Form S-3 with the U.S. Securities and Exchange Commission relating to the offering by the Company of 15,784,200 shares of its common stock that may be issued upon the exercise of warrants that the Company sold in connection with the public offering completed on July 27, 2012. The proposed maximum aggregate offering price is $39.5 million. A copy of the Form S-3 prospectus is available at http://is.gd/2xOvUI The Company also filed a separate Form S-3 prospectus relating to the offering of any combination of debt securities, preferred stock, common stock, debt warrants and equity warrants, either individually or in units, in one or more offerings. The aggregate initial offering price of all securities sold under this prospectus will not exceed $75,000,000. The Company will sell these securities directly to its stockholders or to purchasers or through agents on the Company's behalf or through underwriters or dealers as designated from time to time. A copy of the prospectus is available for free at http://is.gd/e5fgUj The Company's common stock is traded on the Nasdaq Global Market under the symbol "ZGNX." On Jan. 4, 2013, the closing price of the Company's common stock was $1.49. About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Ernst & Young LLP, in San Diego, Calif., issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and lack of sufficient working capital. The Company reported a net loss of $83.90 million in 2011, a net loss of $73.56 million in 2010, and a net loss of $45.88 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $91.30 million in total assets, $78.01 million in total liabilities and $13.28 million in total stockholders' equity. ZOGENIX INC: Reports Positive Results From Relday Clinical Trial ---------------------------------------------------------------- Zogenix Inc. announced positive single-dose pharmacokinetic (PK) results from the Phase 1 clinical trial of Relday, an investigational candidate of a proprietary, once-monthly subcutaneous formulation of risperidone for the treatment of schizophrenia. Adverse events in the Phase 1 trial in patients diagnosed with schizophrenia were generally mild to moderate and consistent with other risperidone products. Based on the favorable safety and PK profile demonstrated with the 25 mg and 50 mg once-monthly doses tested in the Phase 1 trial, Zogenix has extended the current study to include a 100 mg dose of the same formulation. The addition of this dose arm to the study will enable evaluation of dose proportionality across the full dose range that would be anticipated to be used in clinical practice. Positive results from this study extension would better position Zogenix to begin a multi-dose clinical trial, which would provide the required steady-state PK and safety data prior to initiating Phase 3 development studies. Zogenix expects to complete the extension of the Phase 1 clinical trial during the second quarter of 2013. Roger L. Hawley, chief executive officer of Zogenix, said, "The positive results from the first Relday study provide proof-of- concept for a novel, long-acting, subcutaneous formulation of an established antipsychotic to provide psychiatrists and their patients with an improved treatment option. Because the PK profile, overall safety results and injection site reactions were all favorable, we can now begin discussions with potential partners for rest-of-world development and commercialization as we continue with the 100 mg single-dose study extension of Relday. We believe the data from all three dosage strengths will allow us to accelerate both the 505(b)(2) development timeline and the potential identification of an appropriate partner prior to starting the multi-dose clinical trial." Because this approach involves selecting the dose by administering different volumes of the same formulation by a healthcare professional, the development of Relday will first focus on delivery by conventional needle and syringe while accelerating the overall program timeline. The introduction of the DosePro needle- free technology can occur later in development or as part of life cycle management after further work involving formulation development, technology enhancements, and applicable regulatory approvals. Risperidone is one of the most widely prescribed medications used to treat the symptoms of schizophrenia in adults and teenagers 13 years of age and older. The global long-acting injectable antipsychotic market was approximately $2 billion in 2011. The leading injectable product in the category requires twice-a-month dosing, intramuscular injection and drug reconstitution prior to use. The combined market for oral and injectable antipsychotic products was estimated at more than $17 billion in 2011. About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Ernst & Young LLP, in San Diego, Calif., issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and lack of sufficient working capital. The Company reported a net loss of $83.90 million in 2011, a net loss of $73.56 million in 2010, and a net loss of $45.88 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $91.30 million in total assets, $78.01 million in total liabilities and $13.28 million in total stockholders' equity. ZOO ENTERTAINMENT: Ray Schaaf Named President and CEO ----------------------------------------------------- The Board of Directors of indiePub Entertainment, Inc., formerly Zoo Entertainment, Inc., appointed Ray Schaaf as President and Chief Executive Officer of the Company and transitioned Mark Seremet to the position of Chief Strategy Officer of the Company. Effective Dec. 28, 2012, Mr. Schaaf became a member of the Company's Board of Directors. Mr. Schaaf, age 51, has over 25 years of digital media experience, including games, content, ecommerce, and mobile industries. Prior to joining the Company as a consultant in August 2011, from 2009 Mr. Schaaf served as President of Neumedia, Inc. (f/k/a Mandalay Media, Inc.) and also served on that company's Board. From 2007 to 2009, Mr. Schaaf served as President and Chief Executive Officer of Arcadia Entertainment, Inc. From 2005 to 2007, Mr. Schaaf was Chief Operating Officer of Navio, a digital content, ecommerce, and promotions solution provider to Fox Interactive Media, Shockwave, Disney, Sony BMG, EMI, and MasterCard. Mr. Schaaf previously held executive positions at Glu Mobile, Intershop Communications AG, Veritas Software, NeXT Computers and Ziff Davis. The Company and Mr. Schaaf have entered into an Employment Agreement pursuant to which Mr. Schaaf will be paid a base salary of $300,000 per year. For 2012 and in subsequent years, Mr. Schaaf will be eligible to receive a year-end annual cash bonus. The amount of the bonus will be up to a maximum of 100% of his base salary. Mr. Schaaf is entitled to a minimum of $75,000 for his bonus for 2012. On the Effective Date, Mr. Schaaf received a grant of 1,375,000 restricted shares of the Company's common stock. Pursuant to the terms of the Schaaf Agreement, there is no required minimum period of employment and either the Company or Mr. Schaaf may terminate his employment under the Schaaf Agreement at any time for any reason or no reason. If Mr. Schaaf voluntarily terminates the Schaaf Agreement, he is obligated to give the Company at least 30 days' prior written notice. If the Company voluntarily terminates the Schaaf Agreement, the Company is obligated to give Mr. Schaaf at least 30 days' prior written notice. In the event that the Company terminates the employment of Mr. Schaaf Without Cause or if he terminates his employment for Good Reason, each as defined in the Schaaf Agreement, Mr. Schaaf is entitled to a severance payment equal to eighteen months of his then base salary plus a pro-rata portion of the target bonus through the date of termination. If that termination occurs during a change of control period, Mr. Schaaf is entitled to a severance payment equal to up to eighteen months of his then base salary plus his target bonus for the severance period. Mr. Schaaf will be indemnified by the Company and covered by its directors' and officers' liability insurance policy. Mr. Seremet, age 47, has been the Company's Chief Executive Officer and President since May 2009, and has served as a director since September 2008. He has been Chief Executive Officer of Zoo Games, Inc., a Subsidiary of the Company, since January 2009 and has served as President of that company since April 2007. The Company and Mr. Seremet have entered into an Employment Agreement pursuant to which Mr. Seremet will be paid a base salary of $285,000 per year. For 2012 and in subsequent years, Mr. Seremet will be eligible to receive a year-end annual cash bonus. The amount of the bonus will be up to a maximum of 100% of his base salary. On the Effective Date, Mr. Seremet received a grant of 550,000 restricted shares of the Company's common stock. Pursuant to the terms of the Seremet Agreement, there is no required minimum period of employment and either the Company or Mr. Seremet may terminate his employment under the Seremet Agreement at any time for any reason or no reason. If Mr. Seremet voluntarily terminates the Seremet Agreement, he is obligated to give the Company at least 30 days' prior written notice. If the Company voluntarily terminates the Seremet Agreement, the Company is obligated to give Mr. Seremet at least 30 days' prior written notice. In the event that the Company terminates the employment of Mr. Seremet Without Cause or if he terminates his employment for Good Reason, each as defined in the Seremet Agreement, Mr. Seremet is entitled to a severance payment equal to six months of his then base salary plus a pro-rata portion of the target bonus through the date of termination. If that termination occurs during a change of control period, Mr. Seremet is entitled to a severance payment equal to up to twelve months of his then base salary plus his target bonus for the severance period. Mr. Seremet will be indemnified by the Company and covered by its directors' and officers' liability insurance policy. About Zoo Entertainment Cincinnati, Ohio-based Zoo Entertainment, Inc. (NASDAQ CM: ZOOG) is a developer, publisher and distributor of interactive entertainment for Internet-connected consoles, handheld gaming devices, PCs, and mobile devices. The Company reported a net loss of $25.87 million in 2011, compared with a net loss of $14.03 million in 2010. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has both incurred losses and experienced net cash outflows from operations since inception. The Company's balance sheet at Sept. 30, 2012, showed $1.94 million in total assets, $7.44 million in total liabilities and a $5.49 million total stockholders' deficit. * Fitch Says Taxable CEFs Rely on Select Few Banks for Funding -------------------------------------------------------------- Banks continue to actively lend to taxable closed-end funds (CEFs), helping CEFs meet their demand for short-term leverage, according to data compiled by Fitch Ratings. Approximately 174 taxable CEFs utilized an aggregate of $24.4 billion in bank borrowings as of 1H12. That amount was up $2.8 billion, or 13% year over the year, and now constitutes 68% of total on-balance sheet leverage in the sector. "The aggregate lending remains concentrated among a short list of banks. At least 45% of all committed bank line and margin loan leverage is provided by one bank, and 65% by the top five. We believe these numbers are closer to 75% and 85%, respectively, when extrapolating financial data that did not disclose lender identity," Fitch says. "From a lending perspective, CEFs are viewed as relatively safe, having emerged from the financial crisis without any defaults on debt. That has generated interest from banks with a smaller market footprint and has also allowed new entrants to increase their presence in this sector. Generally the cost of bank borrowings for CEFs continued to fall during 2012, which could be due in part to an increasing desire by banks to lend in this sector. For example, committed credit lines and margin loan products became cheaper by 25 to 35 basis points over time (as a spread over Libor). "While growth prospects are attractive, we note there can be significant barriers to entry for banks seeking to extend lending to funds in this sector. Relationships between current lenders and fund managers/fund board of directors are often "sticky. In addition, the due diligence process, operational setup and legal documentation can also be time-consuming to set up and execute. A small discount in cost from a competing bank would not necessarily entice the fund directors to go through the entire process again with a new counterparty. "There has also traditionally been a lack of dedicated lending groups within most financial institutions that cater to 1940 Act funds. Lending to the sector has historically come from different parts of a bank, i.e. prime brokerage for reverse repurchase agreements and the corporate group for direct lending. Dominant lenders today are successful in gathering the right resources and capital in order to provide different product offerings. "Lastly, fund board of directors expects a certain level of expertise from the bank and a track record to demonstrate commitment. Fund management must be able to trust that the counterparty would not unexpectedly pull the line or be involuntarily forced to do so due to capital constraints in a time of stress," Fitch states. * U.S. Technology Ratings Stable Despite Headwinds, Fitch Says -------------------------------------------------------------- Fitch Ratings has published its annual outlook report on the U.S. technology sector. The report gives an overview of technology sub- sectors hardware, IT services, semi-conductors, distributors, electronic manufacturing services, and transaction processors. Fitch's outlook on the U.S. technology sector is stable for 2013 despite weak revenue expectations. Key Themes and Concerns of Fitch's IT Outlook include: Negative Growth Expected: Fitch believes the U.S. technology sector will experience negative revenue growth in the low single digits in 2013, as a confluence of factors ranging from the U.S. debt ceiling, Europe's debt crisis, and China's government changes has resulted in excess caution from customers. Various factors should serve as mitigants to the weak macroeconomic environment such as the launch of Windows 8 and Windows Server 2012 and continued long-term secular tailwinds related to security, cloud, analytics, tablets, automation, and emerging markets. Falling Knives: The stock prices of some of the largest technology debt issuers plunged in 2012, as long-term growth expectations are being reset downward. HP, Dell, Western Union, and Xerox have experienced significant pressure on their stock prices. While the headline risk for Dell and HP are likely overblown, Fitch does believe the risks related to Western Union as an LBO candidate are viable, as the company's enterprise value to EBITDA has declined to 6.1x. It is questionable whether Western Union's current market capitalization of nearly $8 billion could be financed in this challenging environment. 2008-2009 Revisited: Fitch believes the majority of the technology sector will be able to withstand a downturn and perform as it did in the 2008-2009 recession (reduce share buybacks, have temporary spikes in leverage, and, for some, benefit from counter-cyclical working capital). However, there are several important factors that make current businesses less flexible than in 2008-2009, including significant secular issues (printing, tablets, new chip technologies), a fiercer hardware competitive landscape, and higher dividend commitments. New Product Launches -- The Great Unknown: 2013 marks an important year for the industry with the launch of several high-profile products, such as Windows 8, Ultrabooks, and hybrid PC-tablets. This is especially critical for Microsoft, Dell, HP, and Intel, all of which have been limited participants in faster growing products over the last two years. Fitch expects a successful uptake of Windows 8 because of consumer reliance on the Microsoft platform and its extensive enterprise installed base. However, the timing will not be immediate. * U.S. Junk-Bond Default Rate Ends 2012 at 3.2% ----------------------------------------------- According to Bloomberg News' Bill Rochelle, Moody's Investors Service reported last week that the junk-bond default rate in the U.S. declined to 3.2% in December, down from 3.6% at the end of the third quarter. For all of 2012, there were 58 defaults among companies rated by Moody's, 20 more than 2011. Worldwide, Moody's is predicting that the junk default rate of 2.6% in December will rise slightly to 3% by the end of 2013. Still, the rate will remain well below the 4.8% average since 1983. Among the 58 defaults last year, 10 were in the fourth quarter Moody's said, with five in December alone. * New Mortgage Rules Set for Home Lenders ----------------------------------------- New mortgage rules set to be unveiled today by the Consumer Financial Protection Bureau will spell out how lenders must ensure that borrowers can repay their home loans, the Wall Street Journal reported. Nick Timiraos and Alan Zibel of WSJ, citing officials, said the rules, which go into effect next January, were designed to enhance consumer safety without tightening credit standards beyond current levels. The 2010 Dodd-Frank financial-regulation overhaul changed lending rules to make banks legally responsible for determining that a borrower is able to repay a mortgage. The CFPB's rules are intended to implement that change, WSJ said. Another WSJ article said the new rules, which were meant to simplify and standardize consumer home loans, could create problems for home builders and real estate brokers, which say the rules will hurt their in-house mortgage services operations. Most of the nation?s largest home builders have finance units that offer mortgage loans, title searches and other settlement services to their customers, WSJ noted. Although home buyers often find these one-stop-shopping services convenient, consumer advocates have long complained the arrangements are anti-competitive and cause consumers to pay fees that are too high. * Some Banks, Other Lenders Now Require Quick Chapter 11 Sale ------------------------------------------------------------- Jacqueline Palank, writing for Dow Jones' Daily Bankruptcy Review, reports that some companies that recently filed for Chapter 11 are being required by their bank and other lenders to sell the business to pay debts. "Chapter 11 bankruptcy is supposed to give a struggling company breathing space from creditors, in hopes that the company can restructure into a profitable business, paying its debts along the way. The process also is designed to get the best return for the largest number of creditors. But impatient lenders and the stubbornly weak economy are undermining those goals," Ms. Palank wrote. The report notes banks and other lenders, who often are owed millions of dollars and get first dibs on any sale proceeds, are using their clout to press for a speedy sale. Other creditors, who get what is left, typically resist quick sales for fear the deals won't raise enough cash to help them. According to the Dow Jones, report, those bankrupt companies include: * Digital Domain Media Group Inc., a special-effects company founded by director James Cameron to work on "Titanic" and other films, filed for Chapter 11 protection in September; its lenders gave it a window of just 12 days to find a buyer or risk losing its bankruptcy financing. It filed for Chapter 11 with a $15 million offer in hand for its special-effects business. The whirlwind auction yielded a winning bid of $30.2 million. The higher price swayed Digital Domain's unsecured creditors, and a bankruptcy judge, who approved the sale, though with some reservations. * RG Steel LLC was given less than two months by its lenders to sell its steel plants. Last summer, most buyers scooping up scraps of RG Steel on the cheap, instead of acquiring a still-operating business in one fell swoop. Most of the jobs were lost, and less than $200 million has come in. Lenders owed some $450 million must be paid first, so it's likely unsecured creditors will go unpaid; * ATP Oil & Gas Corp. has moved to sell its offshore drilling leases over the next few months to avoid defaulting on a $617.6 million bankruptcy loan from lenders led by Credit Suisse Group. ATP's unsecured creditors have voiced concern that the schedule imposed by the lender won't "result in value-maximizing transactions"; * AFA Foods Inc. -- less than three months for the first of several sales; * Vertis Holdings Inc. -- 65 days "While I'm delighted with the opportunity to provide for the continued viability of this company and its employees, institutionally I am concerned with the timeline," said Judge Brendan Shannon in Delaware Bankruptcy Court, at the Sept. 24 sale hearing in the Digital Domain case, according to Dow Jones. "I would not anticipate that I would undertake this" again, he added, warning against any similarly fast-paced sales. The judge's warning may go unheeded, however, according to Dow Jones. "Now we have a precedent to be able to do a sale in [about] 10 days without a problem. That would harm the system," said Jay Indyke, Esq., of Cooley LLP, who often represents unsecured creditors, according to Dow Jones. "Unless there is pushback on that, it becomes the new norm." Dow Jones notes critics say the quick-sale bankruptcy loans can prevent a business from considering all of its options, to the detriment of the business and its creditors as a whole. "They're essentially setting up the debtor for failure," said Foley & Lardner partner Erika Morabito, Esq. The report notes AMF Bowling Worldwide Inc., the world's largest operator of bowling alleys. AMF's $50 million bankruptcy loan requires it to win court approval of a restructuring plan within six months of its Chapter 11 filing in November. As a backup plan, the lenders have agreed to acquire AMF, though they also will let it shop itself to other investors who will perhaps pay more at a March auction. * Total Bankruptcy Filings Down 14% in 2012 ------------------------------------------- Total bankruptcy filings totaled 1,185,328 nationwide for calendar year 2012 (Jan. 1-Dec. 31), a 14 percent decrease from the 1,379,658 total filings during the same period a year ago, according to data provided by Epiq Systems, Inc., the American Bankruptcy Institute reported. The 1,127,540 total noncommercial filings during calendar year 2012 represented a 14 percent drop from the noncommercial filing total of 1,305,243 during calendar year 2011, ABI said citing the same Epiq data. Lisa Uhlman of BankruptcyLaw360 reported that after a year that saw the biggest bankruptcy in history come to an end, 2013 will be slower as companies take advantage of low interest rates and open capital markets but not everyone will be lucky, experts say, as new health-care mandates and uncertainty surrounding the fiscal cliff may bring a fresh wave of filings as well. "I think that, as a general matter, the market still is not one that would result in a high level of restructuring, given that interest rates remain low," BankruptcyLaw360 reported, citing an expert. * NY Comptroller: Local Governments Face "Severe Fiscal Stress" --------------------------------------------------------------- American Bankruptcy Institute reports that Local governments are struggling in New York, and the picture doesn't look much better in the near future, according to a new report from the state Comptroller's Office. * Performing Arts Face Strikes, Layoffs, Bankruptcy --------------------------------------------------- Performing arts groups in more than a dozen states are facing massive deficits, bankruptcies, strikes and layoffs, according to Natalie DiBlasio of USA Today. The USA Today report noted that: -- the Delaware Symphony Orchestra has cut back performance schedules; -- the Seattle Opera expects a shortfall of $1 million for the 2011-12 season; -- the Oregon Symphony has canceled its return trip to Carnegie Hall in May to save $300,000 cut three staff positions, and reduced salaries by 4% for 22 of its 33 staff members; -- the Chicago Symphony Orchestra had a strike; and -- the Minnesota Orchestra and the St. Paul Chamber Orchestra locked out their musicians amid labor disputes. Musicians, however, say the biggest deficit will be cultural, the report related. "When orchestras put on concerts, the entire downtown community thrives," Bruce Ridge, chairman of the International Conference of Symphony and Opera Musicians told the USA Today. "Cab drivers are at work; restaurants are full. When (orchestras) aren't supported, the community suffers." The financial problems are part of a longstanding trend that has been exacerbated by the recent recession, according to Robert J. Flanagan, economist and author of The Perilous Life of Symphony Orchestras: Artistic Triumphs and Economic Challenges. "Even if you remove the effect of recessions, attendance has been declining year after year," Mr. Flanagan said. "No orchestra in the world is able to cover its expenses with the revenues it earns from ticket sales, recordings and broadcast." The financial security of an orchestra often rests on donations, endowment and government support, but even those funds aren't covering all of the recent costs, the USA Today pointed out. "Any time you have to eliminate a staff position, that's the most difficult because you are affecting somebody's life so dramatically," Oregon Symphony CFO Janet Plummer said. "Any time you have to cut back people's salaries who have already been working at 150%, you are affecting families and people. All of them hurt." The Philadelphia Orchestra, which emerged from bankruptcy in July, will shrink from 105 musicians to 95 and cut their pay by about 15%, the USA Today related. The group was the first major U.S. orchestra to file for Chapter 11 bankruptcy protection in April 2011. But pay and performance cuts are not a good solution, Ridge told USA Today. "You can't cut your way to financial health because these groups achieve success by attracting and retaining the best musicians," Ridge says "When you cut the number of concerts you are diminishing the presence of the orchestra in your community. No business has ever fixed a financial problem by offering an inferior product." After the recession hit, the Detroit Symphony Orchestra cut staff by about 30%, took pay cuts, changed benefits, renegotiated contracts and changed performance schedules. "We had a survival goal, we absolutely were not going to close," says Anne Parsons, the orchestra's president and CEO. "It was quite painful to make some of the changes we had to make." In an attempt to broaden their audience, the group is now turning to technology. They webcast all of their classical programming for free. "We had more than 120,000 people watch on our webcam last year," Parsons says. "Being accessible is one of our key strategies." The organization also has an app called DSO To Go. Some orchestras have weathered the tough times better than others, the USA Today noted. The Cincinnati Symphony Orchestra's attendance has grown for the past two seasons. The St. Louis Symphony's ticket sales are up. "The real solution is local," Ridge says. "The places that are succeeding are serving their community and building relationships with people who live there, children who learn there and the companies who do business there." * VC Funding in Solar Sector Down 50% in 2012, Mecom Report Shows ----------------------------------------------------------------- Global venture capital (VC) investments plunged nearly 50 percent to $992M (million) in 103 deals in 2012 compared to $1.9B (billion) raised in 108 deals the previous year. The 2012 total represents the lowest amount since 2007. VC funding in Q4 2012 came in at $220M in 27 deals compared to just $72M in 14 deals in Q3. Twenty-five investors participated in the 27 deals in Q4, and no investor was involved in multiple deals. The leading VC deal this quarter was concentrating solar thermal company BrightSource Energy with $83.6M. Mercom Capital Group published an 89 page report on funding and merger and acquisition (M&A) activity for the solar sector during 2012. The report provides detailed financial transactions, including active investors, examines VC investments broken down by type and technology, and also provides comprehensive information on solar M&A transactions, debt transactions, transaction details on announced large-scale project funding, and project M&A. This report also includes information on solar bankruptcies, downsizings and restructurings. "The slowdown in VC funding can be attributed to the grim prospects for thin-film, concentrating solar and concentrating PV technologies," commented Raj Prabhu, managing partner of Mercom Capital Group. "With the drastic fall in crystalline-silicon PV prices over the last two years, most other technologies have struggled to compete." Thin-film companies saw the largest amount of VC funding in 2012, although the total fell 47 percent to $314M compared to almost $600M in 2011. Within thin-film, the copper indium gallium (di) selenide (CIGS) sub-category received 85 percent, or $274M, of the total in 2012. Over the past three years, thin-film companies have received the most VC funding with almost $1.5B, of which, CIGS has received more than $1B. The solar sector's drop in VC investments is directly related to the struggles of thin-film companies, especially CIGS, noted Prabhu. On the other hand, solar downstream companies, especially solar lease companies, have benefitted from low module prices. VCs invested $269M in 25 deals in solar downstream companies. The Top 5 VC funding deals in 2012 were BrightSource Energy, a CSP company, for $83.6M, SolarCity, a solar lease firm, for $81M, CIGS company Nanosolar for $70M, solar lease company Sunrun for $60M, and MiaSole, a CIGS company, for $55M. "The diminished funding activity is not a true reflection of the health of the solar sector because the demand side of global solar installations has continued to grow," said Raj Prabhu. "Global solar installations look set to grow by around 10-12 percent this year." More than 140 investors participated in 2012. The most active investors in terms of deal numbers were New Enterprise Associates with four, followed by Black Coral Capital, Firelake Capital Management, Kleiner Perkins Caufield & Byers, and SunPower, who participated in three deals each. Corporate M&A activity in solar amounted to $6.7B in 52 transactions compared to $4B in 65 transactions in 2011. The two largest M&A transactions in 2012 were Eastman Chemical's acquisition of Solutia for $4.7B, and 3M Group's $860M purchase of Ceradyne. Other notable M&A transactions were Korean conglomerate Hanwha Group's acquisition of German PV manufacturer Q-Cells for $322M, and the $275M acquisition of Oerlikon Solar by Tokyo Electron. "It was a buyer's market in 2012 -- acquirers were targeting distressed companies with the goal of buying technology or equipment on the cheap," commented Mr. Prabhu. "More than half the 52 M&A deals in 2012 involved solar manufacturers and equipment makers." There were 12 corporate M&A transactions in Q4 2012 totaling $953M, with only six transaction amounts disclosed. Mercom's report also includes announced large-scale project funding transactions. Active project investors in 2012 included The Development Bank of Southern Africa, HSH Nordbank, International Finance Corporation (IFC), Export Import Bank of the U.S., KfW Entwicklungsbank, and Union Bank. Some of the active acquirers of projects in 2012 were investment funds including the likes of The Carlyle Group, BNP Paribas Clean Energy Partners, ForVEI, and Capital Dynamics. Other active investor groups were project developers, utilities, independent power producers, and insurance companies. The largest debt deal in 2012 was the $1.6B credit facility by China Development Bank, received by Sky Solar, a Chinese developer of solar projects. Loans, credit facilities and framework agreements announced by Chinese banks to Chinese solar companies have reached $52.6B since 2010. Initial Public Offerings In a sector devoid of successful exits, SolarCity's IPO was one of the few bright spots in 2012. SolarCity, a venture-funded company, raised about $95M in net proceeds. The other notable U.S. VC-backed solar IPO was Enphase Energy, whose debut at the end of March marked the first solar IPO in the United States since 2010. About Mercom Capital Group Mercom Capital Group, llc -- http://www.mercomcapital.com-- is a global communications, research and consulting firm focused exclusively on clean energy and financial communications. * Foreclosure Inventory Falls as Starts Decline, LPS Says --------------------------------------------------------- The November Mortgage Monitor report released by Lender Processing Services on Jan. 14 shows the national foreclosure inventory dropped to 3.51 percent in November, representing an almost 10 percent decline from September 2012, when newly instituted National Mortgage Settlement requirements began to influence the pace of first-time foreclosure starts. As noted in last month's Mortgage Monitor release, LPS expects foreclosure starts to rebound as mortgage servicers incorporate the new procedural requirements into their operations in the coming months. LPS found mortgage origination activity strong. According to LPS Applied Analytics Senior Vice President Herb Blecher, borrowers are benefiting from today's historically low interest rates. "Comparing interest rates on new versus paid-off loans, we see that interest rates on the former are 1.5 percentage points below the latter," Mr. Blecher said. "With prepayment activity being as high as it is -- 2 percent of total outstanding U.S. mortgage balances prepaid or refinanced in November alone -- this equates to significant potential savings for borrowers. On average, this translates into new loan payments that are approximately $190 less per month than those of borrowers prior to paying off their loans. "Additionally, after a decline in September related to the shortened business month, HARP-related origination activity is once again near its recorded highs, and we see significant potential for further growth on that front. There are currently approximately 2.6 million loans that fit generalized HARP eligibility requirements, with 50 percent having 'prime quality' credit scores of 720 or above." The November data also showed that the impact of Hurricane Sandy continued in ZIP codes hit hardest by the storm. While national delinquencies are moving in line with seasonal trends -- that is, tending to rise slightly through the remainder of the calendar year -- mortgage delinquencies increased sharply in those areas affected by Sandy. Whereas the national delinquency rate has increased 3.7 percent since August of this year, delinquencies in Sandy-impacted ZIPs have risen at more than threefold that pace -- climbing 15.4 percent in Conn., 15.2 percent in N.J. and 14.8 percent in N.Y. As reported in LPS' First Look release, other key results from LPS' latest Mortgage Monitor report include: Total U.S. loan delinquency rate: 7.12% Month-over-month change in delinquency rate: 1.2% Total U.S. foreclosure pre-sale inventory rate: 3.51% 3.51% Month-over-month change in foreclosure pre-sale inventory rate: -2.84 % States with highest percentage of non-current* loans: FL, NJ, MS, NV, NY States with the lowest percentage of non-current* loans: MT, WY, SD, AK, ND *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. Totals are extrapolated based on LPS Applied Analytics' loan-level database of mortgage assets. * Bank Deal Ends Flawed Reviews of Foreclosures ----------------------------------------------- Federal banking regulators are trumpeting an $8.5 billion settlement this week with 10 banks as quick justice for aggrieved homeowners, but the deal is actually a way to quietly paper over a deeply flawed review of foreclosed loans across America, according to current and former regulators and consultants, Jessica Silver- Greenberg of The Wall Street Journal reported. To avoid criticism as the review stalled and consultants collected more than $1 billion in fees, the regulators, led by the Office of the Comptroller of the Currency, abandoned the effort after examining a sliver of nearly four million loans in foreclosure, the regulators and consultants said, according to WSJ. Because they have no idea how many borrowers were harmed, the regulators are spreading the cash payments over all 3.8 million borrowers -- whether there was evidence of harm or not, the report noted. As a result, many victims of foreclosure abuses like bungled loan modifications, deficient paperwork, excessive fees and wrongful evictions will most likely get less money. "It?s absurd that this money will be distributed with such little regard to who was actually harmed," Bruce Marks, the chief executive of the nonprofit Neighborhood Assistance Corporation of America, told WSJ. While the comptroller?s office acknowledged flaws in the review, Bryan Hubbard, a spokesman for the agency, told WSJ that the "settlement results in $3.3 billion being paid to consumers and that is the largest total cash payout of any settlement involving borrowers affected by foreclosures to date." WSJ related that the examination was plagued by problems from its start in November 2011, according to interviews with more than 25 people who reviewed foreclosures, 15 current and former regulators and 6 bank officials, who insisted on anonymity because they were not authorized to speak publicly or feared retribution. Several former employees of a consulting firm doing reviews said that their managers showed bias toward the bank that hired them, WSJ added. Other reviewers said that the test questions used to evaluate each loan were indecipherable and in some cases the process failed to catch serious harm. Many borrowers said they had never heard of the review or were so baffled by the process that they gave up or dismissed it as just another empty promise. The review, which was hastily dismantled this week, was mandated by bank regulators amid public outrage over accusations that banks were robo-signing mountains of foreclosure filings without verifying them for accuracy, WSJ pointed out. The review was supposed to cover any loan in foreclosure in 2009 and 2010, regardless of whether there was evidence of dubious practices. The comptroller and Federal Reserve ordered the banks to hire consultants for the review, and the regulators solicited claims from borrowers. According to WSJ, as of Jan. 11, the comptroller?s office said that it had identified 654,000 potentially problematic foreclosures -- a combination of 495,000 claims submitted by borrowers and 159,000 files that the consultants flagged for review. The regulator said it was still determining the number of reviews completed, but the consultants said that only a third of the loans were fully reviewed. A critical flaw from the start was that the federal government farmed out the work of scouring the millions of foreclosures to several consulting firms that charged as much as $250 an hour and outsourced work to contract employees, many of whom had no experience reviewing mortgages, according to the reviewers, regulators and bankers, WSJ pointed out. * Judge Postpones Sentencing for Wells Fargo Broker --------------------------------------------------- A California federal judge has delayed the sentencing of Philip Horn, a Wells Fargo broker who pleaded guilty to defrauding more than a dozen clients, the New York Times' DealBook reported. The judge, Gary A. Fees, postponed Mr. Horn?s sentencing to March 4 to give the various parties more time to determine how much money was pilfered from customer accounts, according to lawyers representing the broker?s clients, the report related. Those estimates are critical in determining sentencing length, the DealBook said. Mr. Horn was a broker for Wells Fargo in Los Angeles. For more than two years, he executed and canceled trades in clients? portfolios, pocketing the profits, until Wells Fargo said it uncovered the fraud in the fall of 2011, DealBook recounted. Mr. Horn, who last year pleaded guilty to two counts of wire fraud, was supposed to be sentenced on January 7. Prosecutors from the United States Attorney?s office recommended an 18-month sentence. The amount of money owed to clients is crucial issue in sentencing since federal guidelines recommend longer sentences for larger dollar frauds, the DealBook noted. Prosecutors, in court documents, estimated the damages amount to $732,000. But some clients claim it could be higher. "I believe the total damages in this case to all the customers are well in excess of $1 million," Tom Ajamie, a plaintiff?s lawyer who represents some of Mr. Horn?s clients, told the DealBook. * Senators Press End to Payday Lending -------------------------------------- Senator Richard Blumenthal of Connecticut sent a letter -- also signed by Sen. Richard Durbin of Illinois, Sen. Chuck Schumer from New York, Sen. Sherrod Brown of Ohio and Sen. Tom Udall from New Mexico -- to Federal Reserve Chairman Ben Bernanke, FDIC Chairman Martin Gruenberg and Comptroller of the Currency Thomas Curry, calling on them to use their authority to end the payday lending by federally regulated banks, which is already illegal in 14 states and cannot be offered to active-duty U.S. servicemembers, Chris Morran of The Consumerist reported. "These bank payday loans are widely recognized as predatory products designed to trap low-income consumers in a cycle of debt," reads the letter, according to the report. To highlight the growing trend of banks offering these don?t-call- them-payday loans, Senator Blumenthal uses an example similar to the Wells Fargo Direct Deposit Advance loans, in which borrowers with accounts at the bank -- and who have direct deposit of wages and/or benefits already set up with their account -- will take out a short-term loan that is deposited straight into their account. Up front, the borrower pays a fee -- ranging from $7.50 to $10 per $100 borrowed. The next time the borrower receives a direct- deposited payment, the amount of the loan is taken out by the bank. But if the deposited funds aren?t sufficient, the bank takes the money anyway, which can trigger overdraft fees and additional interest on overdrafted funds, the report said. While banks and payday lenders market these loans as a short-term solution, meant to tide the borrower over until their next payday, The Consumerist said studies show that the average payday borrower ends up in a cycle of debt that lasts for around six months. Blumenthal points out that the typical bank payday borrower will take out 16 payday loans over the course of a year. In the letter, the senators urge the Federal Reserve, FDIC and Comptroller of the Currency to stop federally regulated banks from engaging in payday lending and to prevent further expansion of payday lending before this predatory practice spreads. From the letter: "Bank payday loans increase the ranks of the unbanked by making checking accounts unsafe for vulnerable consumers, a result clearly inconsistent with a safe and sound banking system. And payday lending poses serious reputational risks to any financial institution engaging in it? As the agencies responsible for the safety and soundness of the financial institutions you supervise, you are compelled to stop them from making payday loans and to prevent additional banks from beginning to do so. We urge you to take meaningful regulatory action that ensures that no bank, regardless of its prudential regulator, structures loans in a way that traps its customers in a cycle of high cost debt. Our states? residents, and consumers everywhere, deserve better from our nation?s financial institutions." The Center for Responsible Lending recently wrote to the Office of the Comptroller of the Currency asking it to lower Wells Fargo?s Community Reinvestment Act rating in light of the bank?s continued offering of these loans, The Consumerist also noted. In response to the Senators? letter, the Center writes, "We commend the five senators for taking a stand against pernicious lending that preys on vulnerable consumers without considering their ability to repay." * Concord Coalition Seeks Urgent Raise in Federal Debt Limit ------------------------------------------------------------ The Concord Coalition on Jan. 14 urged elected officials to promptly raise the federal debt limit and then reform the debt limit process as part of a comprehensive plan to put the budget on a more responsible course. "There should be no delay in voting to increase the debt limit. Despite its name, the debt limit has never proven to be an effective means of controlling debt. And yet, failure to raise the debt limit risks serious long-term harm to the nation's creditworthiness," Concord says in a new issue brief on the federal debt limit. Concord notes that if the debt limit is not raised, "All of the same obligations would still accrue. The only change would be to compel a default on commitments that result from past policy decisions . . . It has always been assumed, for good reason, that the United States of America would pay its bills. Refusing to pay some or all of its bills would not be an act of fiscal responsibility; it would be turning the federal government into a deadbeat." In the issue brief, "It's Time To Raise and Reform the Statutory Debt Limit," Concord points out that neither party has presented a plausible set of policy options that could prevent the federal debt from exceeding the current $16.394 trillion limit. The budgets proposed last year by President Obama and House Republicans, for example, would each require a substantial increase in the debt limit. So would the bipartisan plans recommended by the Simpson-Bowles commission and the Domenici- Rivlin task force. Concord also reiterated its long-standing call for sweeping fiscal reform: "With an unnecessary crisis over the debt limit averted, Congress and the President should promptly develop a comprehensive, specific and credible plan to place our nation on a sustainable fiscal path. Lawmakers should consider the entire federal budget to be on the table -- including entitlement programs, domestic discretionary spending, defense spending, and revenues." The immediate goal, Concord says, should be to stabilize the debt as a share of the Gross Domestic Product within the next decade, if not sooner. Eventually the debt could then be reduced relative to the size of the economy. "Achieving such a plan would require tough negotiations over specific spending and tax policy options that can get the job done," Concord said. "They should not be over the government's ability to pay for obligations it has already incurred." A key problem with the federal debt limit as it is currently used is that it places no restrictions on specific tax and spending decisions. When the limit is reached, Congress and the President have little choice but to simply raise it. "The 'fiscal cliff' legislation recently signed into law by the President illustrates the problem of making policy decisions without regard to their effect on the debt limit," Concord said. "The Congressional Budget Office estimates that the policies in that bill will increase deficits by $4.6 trillion over 10 years relative to what had been current law. And yet, no increase in the debt limit was included to accommodate the projected cost." To make the debt limit mechanism more effective, Concord suggests, "Congress should more closely align debt limit increases with the fiscal policy decisions that create a need for more borrowing." For example, Congress could require the inclusion of a debt limit increase in any bill that is expected to require borrowing that will exceed the limit. Concord's issue brief also includes background information on the history of the debt limit, special measures the Treasury can use to postpone a potential default, and the costs that can result from delays in raising the limit. The full issue brief is available at http://is.gd/vyfo22 The Concord Coalition is a nonpartisan, grassroots organization dedicated to fiscal responsibility. * Obama Nominates Jacob Lew as Treasury Secretary --------------------------------------------------- On Jan. 10, in an event President Barack Obama nominated Jacob Lew -- the current White House chief of staff -- to serve as the next Treasury Secretary, Matt Compton of the White House Blog reported. "Over the past year, I?ve sought Jack?s advice on virtually every decision that I?ve made, from economic policy to foreign policy," the President said, according to the report. Jack Lew has decades of experience tackling some of the nation's toughest economic challenges, the report noted. As director of the Office of Management and Budget under President Clinton, Lew helped to negotiate the deal that balanced the federal budget -- and led to a budget surplus. In the Obama Administration, even before becoming chief of staff, he has helped to manage the day- to-day operations at the State Department and shepherd through the Budget Control Act to reduce federal spending in a second stint at OMB. "One reason Jack has been so effective in this town is because he is a low-key guy who prefers to surround himself with policy experts rather than television cameras," said President Obama. "And over the years, he?s built a reputation as a master of policy who can work with members of both parties and forge principled compromises." The President also offered his gratitude to his current Treasury Secretary, Timothy Geithner -- who helped to guide the country through the financial crisis and get the economy growing again. "When the history books are written," he said, "Tim Geithner is going to go down as one of our finest Secretaries of the Treasury." * Robert Khuzami, SEC Enforcement Chief, to Step Down ----------------------------------------------------- Robert Khuzami, a former terrorism prosecutor who revamped the Securities and Exchange Commission's enforcement unit, is stepping down from the agency, the American Bankruptcy Institute reported. Jessica Holzer of Wall Street Journal Blogs said, Mr. Khuzami announced his departure in a letter circulated to enforcement staff Wednesday. A former federal prosecutor who was a top banking industry lawyer, Mr. Khuzami is credited by defense lawyers for restoring the enforcement unit?s reputation after a string of embarrassing enforcement lapses, the WSJ report related. His departure, which ends a four-year tenure, continues a stream of exits from the agency since former Chairman Mary Schapiro stepped down in mid-December, the report noted. Mr. Khuzami was one of Ms. Schapiro?s top lieutenants. According to WSJ, Mr. Khuzami didn't didn?t specify a reason for his departure, saying only "the time has come" for him to leave the division and that he planned to leave in about two weeks. Shortly after being recruited by Ms. Schapiro in 2009, Mr. Khuzami initiated a series of reforms aimed at making the division more nimble and better matched against the securities industry. Among other things, he set up five units focused on such areas as hedge funds and market abuses, and staffed them with people from the financial industry. He also eliminated a layer of managers and brought in a chief operations officer to make the division run more smoothly. * St. Louis Fed's Bullard Comments on U.S. Monetary Policy ---------------------------------------------------------- Federal Reserve Bank of St. Louis President James Bullard gave remarks on Jan. 10 on "The Fed's New Regime and the 2013 Outlook," during an economic forecast luncheon sponsored by the Wisconsin Bankers Association. During his presentation, Mr. Bullard discussed recent changes to U.S. monetary policy. He noted that the policy rate has been near zero since December 2008 and that the Federal Open Market Committee (FOMC) has promised to maintain the near-zero rate into the future, so-called "forward guidance." In December 2012, the FOMC replaced the fixed-date forward guidance with a "threshold" approach. Mr. Bullard discussed the differences between the recently adopted threshold approach and the FOMC's previous fixed- date approach. Regarding the Fed's balance sheet policy, he noted that "the Committee has promised to maintain an aggressive asset purchase program." On the whole, he said that he views "the overall monetary policy stance as more accommodative today than it was six months ago." Mr. Bullard also shared his views on the outlook for the U.S. macroeconomy. "I have argued that the U.S. potential growth rate is lower today than it has been in the recent past, about 2.3 percent," he said. Mr. Bullard's forecast is that "real GDP growth will be faster than potential, at around 3.2 percent in both 2013 and 2014." He attributed this faster growth to three main factors: easier monetary policy, reduced headwinds and reduced uncertainty. He added that he believed "unemployment will fall and inflation will remain near target." Thresholds and the Policy Rate Before December, the FOMC stated that the policy rate would likely remain near zero until mid-2015. "This created a 'pessimism problem' for the Committee," Mr. Bullard said. He explained that "the date could be interpreted as a statement that the U.S. economy is likely to perform poorly until that time," which he has called an "unwarranted pessimistic signal." However, he noted, "The Committee did not intend to send such a signal." Rather than using a given date, Mr. Bullard stated that the FOMC has now changed its forward guidance to a description of economic conditions at the time of the first rate increase. Such a dependency on economic conditions is known as "state-contingent" policy. "In December the Committee instead adopted 'thresholds,' values for inflation (2.5 percent) and unemployment (6.5 percent) that give an indication that the time for a policy rate increase may have arrived," he explained. "Now, as data arrive on U.S. economic performance, private sector expectations concerning the timing of the first rate increase can automatically adjust," Mr. Bullard said. "The Committee is no longer sending the pessimistic signal, because the threshold conditions can be met at any time." While the thresholds fixed the pessimism problem, they still have some challenging aspects. "The use of thresholds is not a panacea," Mr. Bullard cautioned. He discussed several issues that the FOMC is likely to face going forward with this strategy. For instance, he said, "The FOMC cannot pretend to target medium- or long-term unemployment." In addition, "The Committee needs to reiterate that it considers many more variables in attempting to gauge the state of the U.S. economy." Finally, he said that "the thresholds will likely be viewed as triggers for action." Balance Sheet Policy Turning to balance sheet policy, Mr. Bullard discussed "QE3," which the FOMC adopted at its September 2012 meeting and extended in December, replacing "Operation Twist" with outright purchases. Unlike the FOMC's previous asset purchase programs, no end date was specified; this is so-called "open-ended" QE, he stated. The current approach is to purchase $40 billion in mortgage-backed securities and $45 billion in Treasury securities per month, which Mr. Bullard noted would be an annualized pace of more than $1 trillion. The previous asset purchase programs had an "end-date problem," Bullard said, explaining that "these end dates tended to occur at times which were characterized by relatively poor economic data." As examples, he cited March 2010, when the European sovereign debt crisis was heating up, and July 2011, when the U.S. debt ceiling debate was occurring. "With QE3, the Committee instead seeks 'substantial improvement' in labor markets before pausing purchases," he stated. "The Committee may also taper the program as needed." Unlike the interest rate policy, the forward guidance on the balance sheet policy does not include thresholds. "The Committee has maintained a qualitative approach to the state-contingent aspect of balance sheet policy," Mr. Bullard said, adding that "attempts to also put thresholds on the timing of asset purchases may be a bridge too far." Thus, "The FOMC will have to make a judgment concerning the program as macroeconomic data arrive," he stated. "Private sector expectations concerning the program will also adjust appropriately as data arrive," he added. In explaining why he views monetary policy as more accommodative today, Mr. Bullard cited several reasons on the balance sheet side: the FOMC undertook QE3; the QE3 program is open-ended and state-contingent, making it more effective; and the FOMC replaced the twist program with outright purchases. On the interest rate side, Bullard cited the revised policy rate guidance, which helped to alleviate the pessimism problem. The U.S. Macroeconomic Outlook According to Mr. Bullard's economic forecasts, real GDP growth will be around 3.2 percent in 2013 and 2014, and inflation (as measured by the percent change in the personal consumption expenditures price index from a year ago) will remain near the FOMC's target of 2 percent during that period. On unemployment, Bullard noted that it has improved over the past three years despite sluggish GDP growth. "I project a continuing downward trend in unemployment," he said. "I do not think unemployment has yet fallen enough to entice those that have left the labor market to re-enter," he added. Mr. Bullard also discussed the reduced headwinds and reduced uncertainty in the U.S. "The U.S. housing market has improved during 2012 and I expect this will continue in 2013," he said. In addition, he noted that some aspects of the U.S. fiscal situation have been addressed and that he expects more to come. Furthermore, "Growth in emerging markets will likely improve in 2013 relative to 2012," he said. Finally, the European sovereign debt crisis has recently been less disruptive for global financial markets, Mr. Bullard stated. "Euro-area growth will probably not deteriorate the way it did in 2012." However, Mr. Bullard said that the European sovereign debt crisis remains a key issue. "The announcement of the European Central Bank's (ECB's) 'outright monetary transactions' program has so far been more successful than it might have been anticipated," he said, citing a decline in the spreads on Euro-area 10-year government bonds and on 5-year sovereign credit default swaps since the announcement. Mr. Bullard noted that the ECB so far has not been required to purchase national sovereign debt under the program. "How the program will proceed during 2013 is difficult to predict," he stated. Turning back to the U.S., "Overall, U.S. monetary policy looks more accommodative today compared to six months ago," Mr. Bullard said. "This may combine with reduced headwinds and reduced uncertainty in the U.S. to produce a better growth environment during 2013," he said, noting that in the past couple years, this type of forecast proved overly optimistic. "However, I still think it is the right way to view the situation given the information available today," he concluded. * Private Equity?s Carried Interest Eyed by Congress ---------------------------------------------------- The preferential tax rates that private-equity managers pay on some profits survived Congress?s Jan. 1 budget deal, but that victory may not last, Margaret Collins of Bloomberg News reported. "It?s still alive," Andrea Whiteway, Esq., a partner at Chicago- based McDermott Will & Emery LLP who works in Washington, told Bloomberg. "Carried interest is still an issue that?s on the table as far as possible revenue raisers, loophole closers." For private-equity managers, changes in the tax treatment of so- called carried interest may affect them more than tax increases now on the books, Bloomberg said. Congress, Bloomberg noted, faces a series of deadlines in the next few months over spending cuts, the debt ceiling and the annual budget. Democrats including President Barack Obama want to raise more revenue, and carried interest is an obvious candidate, the report noted. "There continues to be no rationale whatsoever for people to pay at a vastly lower tax rate when they are managing other people?s money," Representative Sander Levin of Michigan, the top Democrat on the House Ways and Means Committee, said in an e-mail to Bloomberg. "This is an issue of fairness that we should address as we seek a balanced approach to deficit reduction that involves both additional revenues and spending cuts." The share of profits in buyout deals, known as carried interest, is often taxed as capital gains, which receive preferential rates under the tax code compared with levies on wages, Bloomberg related. In the budget deal, lawmakers increased the top rate on long-term capital gains to 20 percent from 15 percent and the maximum rate on ordinary income to 39.6 percent from 35 percent. The big rate differential between capital gains and ordinary income makes it likely that carried interest could lose its tax treatment, Ms. Whiteway, who heads the practice dealing with partnerships for the McDermott law firm, said. Democrats including Levin have sought to tax carried interest as wages for more than five years, saying private- equity managers? compensation should be treated like workers? salaries, Bloomberg noted. Obama?s most recent budget plan called for this change, which would raise about $16.8 billion over 10 years, according to the Joint Committee on Taxation. The president repeated his desire to limit tax breaks in in his weekly address on Jan. 5. In a Jan. 6 interview on CBS Corp. (CBS)?s "Face the Nation," House Minority Leader Nancy Pelosi, a California Democrat, identified carried interest as a tax break that should be reviewed in coming negotiations over the budget deficit. * Gail B. Geiger Appointed Acting U.S. Trustee for Region 18 ------------------------------------------------------------ Gail B. Geiger has been appointed by Attorney General Eric Holder as Acting U.S. Trustee for Alaska, Idaho, Montana, Oregon, and Washington (Region 18), effective on January 5, 2013, the Executive Office for U.S. Trustees announced. She replaces Robert D. Miller Jr., who is retiring after nearly 25 years with the U.S. Trustee Program (USTP), including the past two and a half as U.S. Trustee. Prior to her appointment as Acting U.S. Trustee, Ms. Geiger served as the Assistant U.S. Trustee in the Eugene, Ore., office. She has also served as Special Assistant to the Office of the General Counsel in the Executive Office for U.S. Trustees (EOUST) in Washington, D.C., coordinating USTP enforcement activity relating to mortgage servicers and other creditors, and as Associate General Counsel for Consumer Practice in the EOUST's Office of the General Counsel, advising USTP field offices on consumer bankruptcy issues. In October 2011, she was part of a team of USTP employees who received the Attorney General's Award for Distinguished Service for their work on the $25 billion National Mortgage Settlement. Other assignments in the USTP include serving as Acting Assistant U.S. Trustee in Riverside, Calif.; a Trial Attorney in Seattle; and Attorney in Charge in Agana, Guam. Before joining the USTP in 1990, Ms. Geiger practiced law with a Seattle law firm and served as an Assistant Attorney General for the Commonwealth of the Northern Mariana Islands. Ms. Geiger received her law degree cum laude from Willamette University Law School in Salem, Ore., and her undergraduate degree from Gonzaga University in Spokane, Wash. The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 95 field offices. Region 18 is headquartered in Seattle, with additional offices in Spokane, Wash.; Anchorage, Alaska; Boise, Idaho; Eugene and Portland, Ore.; and Great Falls, Mont. * 2nd Circ. Won't Send Argentina Bond Contract Issue to NY ---------------------------------------------------------- Richard Vanderford of BankruptcyLaw360 reported that the Second Circuit on Thursday said it will not have a New York state court determine the meaning of a contract at issue in litigation brought to force Argentina to honor bond debt it claims was canceled in a restructuring. The appeals court said in a one-sentence order that it would not send the question of the bonds' order of preference to the New York Court of Appeals, the state's highest court, the report added. * Golden State Law Group Offers Free Initial Consultation --------------------------------------------------------- The San Diego bankruptcy lawyers at the Golden State Law Group have been representing clients who are both consumers and business owners for many years. In the wake of the release of the statistics regarding the number of bankruptcy cases filed in the United States during 2012, the firm is offering a free initial consultation to both consumers and business owners who are ready to put their financial troubles in the past. The San Diego bankruptcy attorneys at the Golden State Law Group have been representing clients who have sought the protection of the United States Bankruptcy Courts for many years. They handle all types of bankruptcy cases that include those filed under Chapter 7, Chapter 11, Chapter 13 and others. The attorneys at the firm have reviewed the statistics regarding the number of bankruptcy cases that were filed in the United States during the calendar year of 2012, and they are hereby offering a free initial consultation to consumers and business owners who are ready to seek this same type of protection in order to resolve their financial difficulties. The attorneys at the firm have reviewed the statistics regarding the number of bankruptcy cases filed across the United States during 2012, and like most people they are encouraged by the positive trend. These statistics are kept by the American Bankruptcy Institute, an entity that records statistics and trends regarding bankruptcy cases that are then released to the public. According to the American Bankruptcy Institute, a total of 1.19 million bankruptcy cases were filed during 2012. This represents a drop of approximately 14 percent from the year 2011, when a total of 1.38 million bankruptcy cases were initiated across the United States. This statistic relates to all types of bankruptcy cases that were filed by both consumers and businesses under all different chapters of the United States Bankruptcy Code. The American Bankruptcy Institute also stated that this number of bankruptcy cases filed represents the lowest amount since the year 2008, and this is also the third consecutive year that the overall number of filings has decreased. However, the San Diego bankruptcy lawyers at the Golden State Law Group recognize that many people and businesses continue to struggle, which means that anyone who is in this position should contact the firm to schedule a free initial consultation as soon as possible. This initial consultation will involve a thorough review of the overall financial situation. About the Golden State Law Group The Golden State Law Group is a law firm in San Diego, California that's comprised of a team of San Diego bankruptcy attorneys who provide legal help to consumers and businesses. Specifically, the attorneys at the firm provide help to consumers in the legal areas of student loan debt problems, medical bill issues, consumer bankruptcy, business bankruptcy, tax debt issues and personal injury cases. * Kramer Levin Among Law360's Top Bankruptcy Practice Groups ------------------------------------------------------------ Kramer Levin Naftalis & Frankel LLP on Jan. 14 disclosed that the firm's Corporate Restructuring and Bankruptcy practice was named one of Law360's "Top Practice Groups of 2012." Kramer Levin was one of only five firms selected for this honor. Firms were chosen for the significance, size and complexity, and the number of large or complex deals the group worked on in the last year. In 2012 alone, Kramer Levin played a leading role in several of the biggest and most significant bankruptcy cases. The firm represented entities in the top three biggest bankruptcies and handled various complex cases on behalf of debtors, committees, creditors and other significant players. Kramer Levin's bankruptcy group, co-chaired by Kenneth H. Eckstein and Thomas Moers Mayer, currently represents committees in Residential Capital, the largest bankruptcy filed in 2012, Patriot Coal, the third largest bankruptcy in 2012, WP Steel Ventures - RG Steel, the fourth largest flat-rolled steel facilities in the United States and Hostess Brands. The firm also served as debtors' counsel to General Maritime, one of the top 10 reported bankruptcies in 2011 and Saint Vincent Catholic Medical Center, one of the biggest hospital bankruptcies of all time. Additionally, Kramer Levin represents a wide variety of distressed investors including a significant creditor in the Washington Mutual chapter 11 case. The group also represents an ad hoc group of holders of $650 million in sewer warrants issued by Jefferson County, Alabama, the largest municipal bankruptcy in U.S. history. The firm is representing the bank lenders in the Dewey & LeBoeuf LLP bankruptcy, which is one of the most high profile bankruptcies in 2012 involving the legal community. Kramer Levin also represents the bankruptcy trustees appointed in the insolvency proceedings of Lehman Brothers Treasury Co. B.V. and the largest bondholder in the American Airlines bankruptcy. The bankruptcy practice's accomplishments have been widely recognized. In addition to the Law360 recognition, the practice was recently awarded "Bankruptcy Litigation Law Firm of the Year" by the 2012 U.S. News and World Report "Best Law Firm Rankings." The practice was also listed as one of the country's best in Chambers USA and Legal 500 and one of the best in the United States by International Financial Law Review. Several partners in the practice were recently recognized by Best Lawyers, Super Lawyers, Lawdragon, Turnarounds & Workouts and M&A Advisor. Corporate Restructuring and Bankruptcy Partners Kenneth H. Eckstein Thomas Moers Mayer Philip Bentley Joshua Brody Amy Caton Thomas T. Janover Douglas Mannal P. Bradley O'Neill Adam C. Rogoff Robert T. Schmidt About Kramer Levin Kramer Levin Naftalis & Frankel LLP -- http://www.kramerlevin.com -- is a premier, full-service law firm with offices in New York, Silicon Valley and Paris. Firm lawyers are leading practitioners in their respective fields. The firm represents Global 1000 and emerging growth companies, institutions and individuals, across a broad range of industries. * Law360 Also Selects Jones Day Bankruptcy Group of 2012 -------------------------------------------------------- Law360 announced the winners of the year?s Practice Groups of the Year award. According to the report, the editors of Law360 reviewed the nearly 550 entries that were submitted by almost 100 law firms. In the end, the judges selected 109 practice groups from 54 firms to be designated as Practice Groups of the Year. Winners were selected based on the significance of the litigation wins or deals worked on, and the size and complexity of the litigation wins or deals worked on, among other things. One of the firms identified by Law360 is Kramer Levin Naftalis & Frankel LLP. Stewart Bishop, writing for Law360, noted that whether it?s been negotiating better conditions for creditors in Residential Capital LLC?s mammoth bankruptcy or shepherding shipping giant General Maritime Corp. through a successful restructuring, Kramer Levin's corporate restructuring and bankruptcy department has had a banner year, earning it a spot on Law360's Bankruptcy Practice Groups of the Year. Kramer Levin by co-chairs Kenneth H. Eckstein and Thomas Moers Mayer, with assists from partners like Douglas Mannal, Amy Caton, Thomas T. Janover and others. Law360 also selected Jones Day. Eric Hornbeck, writing for Law360, pointed out that Jones Day's varied successes, including ushering the Los Angeles Dodgers from insolvency to a record sale, its precedent-setting work for overseas debtors and expanding beyond its reputation as a debtors-only shop, have earned the firm a spot among Law360's Bankruptcy Groups of the Year. Most of Jones Day's restructuring group's 84 full-time bankruptcy attorneys are based in the U.S., with the majority of the rest in Europe and a handful in Japan and Australia -- a geographic diversification that has been coupled with a practice diversification, Mr. Hornbeck noted. * McDonald Hopkins' D. Agay Among Illinois Super Lawyers -------------------------------------------------------- Five attorneys at McDonald Hopkins have been recognized by Illinois Super Lawyers as among the top attorneys in Illinois. The Illinois Super Lawyers include David A. Agay, Member Business Restructuring and Bankruptcy Department. No more than five percent of the lawyers in the state are selected by Super Lawyers. In addition, two of the firm's attorneys have been named to the Illinois Rising Stars list as among the top up- and-coming attorneys in Illinois. Each year, no more than 2.5 percent of the lawyers in the state receive this honor. Super Lawyers, a Thomson Reuters business, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. With 140 attorneys in Chicago, Cleveland, Columbus, Detroit, Miami, and West Palm Beach, McDonald Hopkins -- http://mcdonaldhopkins.com-- is a business advisory and advocacy law firm with a more than 80-year history. * NY Bankr. Firm Rattet Pasternak Folds into DelBello Donnellan --------------------------------------------------------------- Linda Chiem of BankruptcyLaw360 reported that New York bankruptcy boutique Rattet Pasternak LLP has merged with commercial litigation and real estate law firm DelBello Donnellan Weingarten Wise & Wiederkehr LLP. The boutique's founding partner Robert L. Rattet told Law360 that the merger, which took effect Jan. 1, was borne out of yearslong professional relationships and friendships among the principals at both firms. Discussions to combine Rattet Pasternak's six attorneys with DelBello Donnellan's 25 attorneys began months ago and ramped up during the fall of 2012, Mr. Rattet further told Law360. * SSG Selected as Boutique Investment Banking Firm of the Year -------------------------------------------------------------- SSG Capital Advisors, LLC, a special situations investing banking firm, on Jan. 10 disclosed that SSG was selected as the "2012 Boutique Investment Banking Firm of the Year" by The M&A Advisor at its 11th Annual M&A Advisor Awards Gala on December 11, 2012 at the New York Athletic Club in New York City. "SSG Capital Advisors is a go-to boutique special situations investment banking firm for middle market companies. We strive to provide our clients with exemplary, experienced and innovative advisory services in mergers and acquisitions, capital raising and restructuring and to be recognized for that effort and all of our work is an honor," said J. Scott Victor, Managing Director. Award winners were selected by an independent panel of judges from more than 400 nominations representing more than 600 companies honoring top performers of the year for creativity, resourcefulness and perseverance in the transaction process. The Gala is the premier celebration of the year for the industry's leading dealmakers. The 11th Annual Awards Gala was held in conjunction with the 2012 M&A Advisor Summit that featured over 350 of the industry's leading M&A professionals participating in exclusive interactive forums led by over 50 M&A, restructuring, media, academic and political stalwarts. About SSG Capital Advisors, LLC SSG Capital Advisors is an independent investment bank that assists middle-market companies in completing special situation transactions. SSG provides its clients with comprehensive advisory services in the areas of mergers and acquisitions, private placements, financial advisory, financial restructurings and valuations. * Samuel Khalil Joins Milbank's Financial Restructuring Group ------------------------------------------------------------- International law firm Milbank, Tweed, Hadley & McCloy LLP has elected Samuel A. Khalil as a partner in its Financial Restructuring Group. Mr. Khalil is resident in the firm's New York office. Samuel A. Khalil is a member of the Financial Restructuring Group. He represents debtors and creditors in chapter 11 reorganization cases and out-of-court workouts both in the US and internationally. He also regularly represents private equity funds and hedge funds acquiring control positions in financially distressed companies, whether through a chapter 11 process or otherwise. He has extensive experience negotiating reorganization plans, structuring high risk "rescue financings" and chapter 11 "DIP" and "Exit" financings, and representing acquirors and sellers of financially distressed companies. His engagements have ranged across a wide array of industries, including energy, chemicals, paper, airline, financial services, automotive, pharmaceuticals, satellite, restaurant, consumer goods and real estate. Mr. Khalil's recent representations include significant roles in the chapter 11 cases of NewPage Corporation, Southern Air Holdings, Inc., and Lyondell Chemical Company. Mr. Khalil earned his J.D., cum laude, from Hofstra University, where he served as an associate editor of the Hofstra Law Review. "Sam Khalil ha[s] exhibited terrific leadership qualities and maturity in addition to [his] outstanding legal skills," said Milbank Chairman Mel Immergut. "Representing a wide range of client interests in complex, often high-profile matters, [he's] made significant contributions to our success in recent years. We're extremely pleased to welcome [him] to the partnership." About Milbank Milbank, Tweed, Hadley & McCloy LLP -- http://www.milbank.com-- is an international law firm providing legal solutions to clients throughout the world for more than 140 years. Milbank is headquartered in New York and has offices in Beijing, Frankfurt, Hong Kong, London, Los Angeles, Munich, S?o Paulo, Singapore, Tokyo and Washington, DC. The firm's lawyers provide a full range of legal services to the world's leading commercial, financial and industrial enterprises, as well as to institutions, individuals and governments. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ABT CN 128.8 (7.2) 2.7 ACELRX PHARMA ACRX US 28.2 (0.3) 13.1 AK STEEL HLDG AKS US 3,920.7 (413.9) 450.0 AMC NETWORKS-A AMCX US 2,152.9 (915.4) 505.9 AMER AXLE & MFG AXL US 2,674.2 (497.7) 372.3 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMERISTAR CASINO ASCA US 2,096.6 (25.6) (26.5) AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0 ANACOR PHARMACEU ANAC US 42.8 (6.2) 15.9 ARRAY BIOPHARMA ARRY US 85.5 (96.4) 4.1 AUTOZONE INC AZO US 6,398.0 (1,591.4) (682.2) BERRY PLASTICS G BERY US 5,106.0 (452.0) 587.0 BLUELINX HOLDING BXC US 595.4 (1.6) 264.0 BOSTON PIZZA R-U BPF-U CN 167.0 (86.0) 0.4 CABLEVISION SY-A CVC US 7,285.3 (5,730.1) (85.3) CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CC MEDIA-A CCMO US 16,402.3 (7,847.3) 1,449.3 CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CHOICE HOTELS CHH US 483.1 (569.4) 7.5 CIENA CORP CIEN US 1,881.1 (89.0) 730.7 CINCINNATI BELL CBB US 2,752.3 (684.6) (68.2) CLOROX CO CLX US 4,747.0 (20.0) 20.0 COMVERSE INC CNSI US 823.2 (28.4) (48.9) CYTORI THERAPEUT CYTX US 32.0 (9.7) 8.2 DELTA AIR LI DAL US 44,352.0 (48.0) (5,061.0) DIRECTV DTV US 20,353.0 (4,735.0) 953.0 DOMINO'S PIZZA DPZ US 441.0 (1,345.5) 74.0 DUN & BRADSTREET DNB US 1,821.6 (765.7) (615.8) DYAX CORP DYAX US 57.2 (48.4) 26.7 DYNEGY INC DYN US 5,971.0 (1,150.0) 1,364.0 FAIRPOINT COMMUN FRP US 1,798.0 (220.7) 31.1 FERRELLGAS-LP FGP US 1,429.0 (69.6) (70.7) FIESTA RESTAURAN FRGI US 289.7 6.6 (13.1) FIFTH & PACIFIC FNP US 843.4 (192.2) 33.5 FREESCALE SEMICO FSL US 3,329.0 (4,489.0) 1,305.0 GENCORP INC GY US 908.1 (164.3) 48.1 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GOLD RESERVE INC GRZ US 78.3 (25.8) 56.9 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 GRAMERCY CAPITAL GKK US 2,236.3 (293.1) - HCA HOLDINGS INC HCA US 27,302.0 (6,563.0) 1,411.0 HEADWATERS INC HW US 680.9 (3.1) 73.5 HOVNANIAN ENT-A HOV US 1,684.2 (485.3) 870.1 HOVNANIAN ENT-B HOVVB US 1,684.2 (485.3) 870.1 HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) INCYTE CORP INCY US 296.5 (220.0) 141.1 INFOR US INC LWSN US 5,846.1 (480.0) (306.6) IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE US 1,536.5 (279.0) (177.1) JUST ENERGY GROU JE CN 1,536.5 (279.0) (177.1) LIMITED BRANDS LTD US 6,427.0 (515.0) 973.0 LIN TV CORP-CL A TVL US 864.4 (35.0) 67.2 LORILLARD INC LO US 3,424.0 (1,564.0) 1,364.0 MARRIOTT INTL-A MAR US 5,865.0 (1,296.0) (1,532.0) MERITOR INC MTOR US 2,501.0 (982.0) 270.0 MONEYGRAM INTERN MGI US 5,247.0 (163.6) (95.3) MORGANS HOTEL GR MHGC US 577.0 (125.2) (8.7) MPG OFFICE TRUST MPG US 1,867.2 (729.2) - NATIONAL CINEMED NCMI US 828.0 (347.7) 107.6 NAVISTAR INTL NAV US 9,102.0 (3,260.0) 1,484.0 NEXSTAR BROADC-A NXST US 611.4 (160.3) 35.1 NPS PHARM INC NPSP US 165.5 (46.7) 121.9 NYMOX PHARMACEUT NYMX US 2.1 (7.7) (1.6) ODYSSEY MARINE OMEX US 33.6 (22.2) (25.4) OMEROS CORP OMER US 32.8 (0.8) 9.6 ORGANOVO HOLDING ONVO US 9.0 (27.4) 7.3 PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 249.9 (115.5) 170.6 PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PRIMEDIA INC PRM US 208.0 (91.7) 3.6 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 513.1 (19.7) 62.0 REALOGY HOLDINGS RLGY US 7,351.0 (1,742.0) (484.0) REGAL ENTERTAI-A RGC US 2,198.1 (552.4) 77.4 REGULUS THERAPEU RGLS US 40.7 (8.5) 21.0 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) REVLON INC-A REV US 1,183.6 (680.7) 104.7 RLJ ACQUISITI-UT RLJAU US 0.0 (0.0) (0.0) RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 2,065.8 (115.1) 686.5 SAREPTA THERAPEU SRPT US 53.1 (4.6) (13.0) SHUTTERSTOCK INC SSTK US 46.7 (29.9) (32.9) SINCLAIR BROAD-A SBGI US 2,245.5 (52.4) (14.1) TAUBMAN CENTERS TCO US 3,152.7 (86.1) - TEMPUR-PEDIC INT TPX US 913.5 (12.5) 207.0 TESLA MOTORS TSLA US 809.2 (27.9) (101.3) TESORO LOGISTICS TLLP US 291.3 (78.5) 50.7 THERAPEUTICS MD TXMD US 3.5 (4.3) (1.1) THRESHOLD PHARMA THLD US 86.2 (44.1) 68.2 ULTRA PETROLEUM UPL US 2,593.6 (109.6) (266.6) UNISYS CORP UIS US 2,254.5 (1,152.6) 371.3 VECTOR GROUP LTD VGR US 885.6 (102.9) 243.0 VERISIGN INC VRSN US 1,983.3 (26.6) (86.9) VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) WEIGHT WATCHERS WTW US 1,198.0 (1,720.4) (273.7) ********* 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 ***