/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130122.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 22, 2013, Vol. 17, No. 21 Headlines 0738126 BC: Owner Accused of Operating Ponzi Scheme 112TH & SHERIDAN: Case Summary & 2 Unsecured Creditors 1584 FULTON: Voluntary Chapter 11 Case Summary 1ST REGENTS BANK: Closed; First Minnesota Bank Assumes Deposits 400 EAST: Hires Herrick Feinstein as Bankruptcy Counsel 400 EAST: Government Proofs of Claim Due April 8 A123 SYSTEMS: CFIUS Reviews Transfer of Technology to Wanxiang ABB/CON-CISE OPTICAL: S&P Affirms 'B' CCR; Rates $330MM Loans 'B' ABDIANA A: Court OKs Merlin Law et al. to Pursue Insurance Claim AMERICAN AIRLINES: Veteran Pilots Assert Grievances AMERICAN AIRLINES: $740-Mil. in Claims Traded for 11-Month Period AMERICAN AIRLINES: KPMG Also Provides Services to US Airways AMERICAN AIRLINES: Skadden Arps Discloses New Hourly Rates AMERICAN AIRLINES: Wins Court Approval for $1.5-Bil. Financing AMERICAN AIRLINES: Incurs $1.9 Billion Net Loss in Full Year 2012 AMERICAN AXLE: Expects $2.9 Billion Sales in Full Year 2012 AMERICAN MEDIA: S&P Lowers Corporate Credit Rating to 'CCC+' ARMAND PROPERTIES: Voluntary Chapter 11 Case Summary ARRIS GROUP: S&P Assigns Preliminary 'BB-' Corporate Credit Rating ATARI INC: U.S. Arm of Iconic Company Files for Bankruptcy ATARI INC: Intends to Pay Claims of Certain Developers ATARI INC: Wants Until March to File Schedules and Statements ATARI INC: Case Summary & 30 Largest Unsecured Creditors BELLA HOLDINGS: Case Summary & Top Unsecured Creditors BERNARD L MADOFF: SEC Purge of Madoff, Goldman Probe Files Upheld BOB YARI: Calif. Appeals Court Affirms Ruling in E1 Films Lawsuit BRUCE BURROW: US Trustee Seeks Dismissal or Ch.7 Conversion CENTRAL FEDERAL: Annual Stockholders Meeting Set for May 16 CENTRAL GARDEN: S&P Cuts CCR to 'B'; Cuts Debt Rating to 'BB-' CENTRAL EUROPEAN: Major Investor Junks Revised Deal with RTL CHEROKEE SIMEON: Court Approves Elliott Greenleaf as Counsel CHESAPEAKE STEAK: 3rd Cir. Affirms Russo Conviction on Wire Fraud CHRYSLER GROUP: Nears Deal with Banco Santander for Financing CLEAR CHANNEL: Bank Debt Trades at 15% Off in Secondary Market COLLEGE BOOK: Claims Bar Date Set for Feb. 28 COMMUNITY FIRST: Martin Maguire Named to Boards of Directors CONTOURGLOBAL LP: S&P Assigns 'B+' Corporate Credit Rating CSD LLC: Withdraws Motion to Tap Lionel Sawyer as Special Counsel DCP LLC: S&P Affirms 'B' Corporate Credit Rating DEWEY & LEBOEUF: JPMorgan, Trustee Object to Bankruptcy Fee Claims DEWEY & LEBOEUF: Citibank Denied Win in Ex-Partner Loan Fight DIAL GLOBAL: Obtains $5MM Loan; Waivers Extended Until Feb. 28 DRAGON SYSTEMS: Founders "Scapegoating" Over Sale, Says Goldman DUNE ENERGY: Amends Stock Option Awards of Two Former Directors DRINKS AMERICAS: Shareholders Cut Number of Directors to Three EASTMAN KODAK: Dodges Pricey Payout in SC Pollution Settlement ELPIDA MEMORY: Clears Hurdle on Way to Micron Deal EMMIS COMMUNICATIONS: Has Exchange Offer for Eligible Options EMMONS-SHEEPSHEAD: Wants Court's Nod to Borrow $5-Mil. from SDF EMPIRE RESORTS: Gets Approval for Destination Resort Master Plan EVISION SOLAR: Inks Teaming Agreement with Horizon Energy FIELD FAMILY: Exclusive Filing Period Extended Until May 10 FEEL GOLF: Incurs $3.4-Mil. Net Loss in 2011 GEOKINETICS INC: To File for Chap. 11 to Implement Restructuring GEORGE R. CRANFORD: Case Summary & 20 Largest Unsecured Creditors GFI GROUP: Moody's Downgrades Rating to 'B1'; Outlook Stable GMC DAIRY: Voluntary Chapter 11 Case Summary GREAT BASIN: Voluntarily Delists Common Stock From NYSE MKT GREEKTOWN SUPERHOLDINGS: Moody's Keeps 'B3' Corp. Family Rating HAMPTON ROADS: Kevin Chase Joins as SVP for Commercial Banking HANDY HARDWARE: Meeting to Form Creditors' Panel on Jan. 24 HELLER EHRMAN: Greenberg Traurig to Mediate Malpractice Suit HAWKER BEECHCRAFT: Attys Should Inform Retirees on PBGC Deal HD SUPPLY: Issues $950 Million 10.50% Sr. Subordinated Notes HEB GROCERY: Beats Antitrust Suit Over Produce Restrictions HERITAGE REAL ESTATE: Case Summary & Unsecured Creditor HIGHLAND LAND: Case Summary & 20 Largest Unsecured Creditors HILLMAN GROUP: S&P Assigns 'B+' Rating to $76.8MM Draw Term Loan HOSTESS BRANDS: Judge Greenlights Deal to Pay ACE Insurance Debt HOWREY LLP: Trustee Targets Former Partners IMPLANT SCIENCES: Gets TSA Approval for Sniffer Trace Detector JASMINE AT ORLANDO: Court Dismisses Chapter 11 Case KENNETH SCHACTER: Ralph DeLuca Buys Metropolis Poster for $1.2MM LAGUNA BRISAS: Court Approves Johnny Kim as Special Counsel LIFECARE HOLDINGS: Creditors' Committee Taps Pachulski & FTI LOCATION BASED TECHNOLOGIES: Amends 2012 Report to Correct Errors LORUS THERAPEUTICS: Incurs C$1.61-Mil. Net Loss in Nov. 30 Quarter LODGENET INTERACTIVE: Former CEO Gets $1.4MM for Unpaid Salary LSP MADISON: Moody's Affirms 'Ba2' Rating on Sr. Sec. Term Loan LSP MADISON: S&P Affirms 'BB+' Rating on Senior Secured Term Loan LYON WORKSPACE: Files Chapter 11 Petition in Illinois LYON WORKSPACE: Proposes KCC as Notice and Claims Agent LYON WORKSPACE: Asks for March 4 Extension to File Schedules LYON WORKSPACE: Case Summary & 20 Largest Unsecured Creditors MERIDIAN SUNRISE: Case Summary & 20 Largest Unsecured Creditors METEX MFG: Committee Taps Charter Oak as Financial Advisor METRO FUEL: Gets Final OK to Incur DIP Loan, Use Cash Collateral MF GLOBAL: Execs, PwC Call Investors' Case Flimsy MICHAELS STORES: Reports Holiday Sales of $1.164 Billion MICHAELS STORES: Moody's Rates $1.64-Bil. Term Loan Due 2020 'B1' MIR PRINTING: Case Summary & 17 Largest Unsecured Creditors MOMENTIVE PERFORMANCE: Proposes to Issue $1.1-Bil. Senior Notes MOMENTIVE SPECIALTY: Signs Various Transactions Relating to Notes MOOG INC: Moody's Says Notes Repurchase No Impact on 'Ba2' CFR MOSS FAMILY: Hires Beachwalk Realty as Broker MUSCLEPHARM CORP: Further Amends 4.5MM Shares Prospectus NCL CORPORATION: S&P Raises Corporate Credit Rating to 'BB-' NEW ORLEANS AUCTION: Seller of Chinese Seal Wins $8,325 Judgment NEWLEAD HOLDINGS: Enters Into Coal Reserve Property Agreement NINNEKAH QUICK: 10th Cir. Rules on Absolute Priority Rule NTP MARBLE: Meeting to Form Creditors' Panel on Feb. 1 O&G LEASING: Indenture Trustee Withdraws First Amended Plan OMEGA NAVIGATION: Compromise Denied, Settlement Approved OVERSEAS SHIPHOLDING: Sr. Lenders Object to CEXIM & DSF Financing PEARLMONT LLC: Chapter 11 Case Summary & Unsecured Creditor PEDEVCO CORP: To Further Restate 2011 Report to Correct Errors PEDEVCO CORP: Files 2nd Amendment to Form S-1 Prospectus PENNFIELD CORP: Cargill Completes Asset Purchase Agreement PENSON WORLDWIDE: Meeting to Form Creditors' Panel Tomorrow PINNACLE AIRLINES: Path From Chapter 11 May Run Through Delta Air POWERWAVE TECHNOLOGIES: Amends Q3 Form 10-Q to Address Comments PRINCE SPORTS: Settles Tennis Net Patent Fight with Wilson QUICK-MED TECHNOLOGIES: Paul Jenssen Replaces Nam Nguyen as CFO RAY THOMAS: Case Summary & 20 Largest Unsecured Creditors RG STEEL: Asks Court for Liquidating Trustee to Wind Up MSC RG STEEL: Has Court Nod to Pay Prepetition Claims of Trial Experts RG STEEL: Committee Wants Leave to Pursue Claims vs. Ira Rennert RICHFIELD EQUITIES: Has Access to DIP Financing Until Jan. 25 ROTECH HEALTHCARE: Amends Report on $25MM Loan to Add Exhibit RYAN INT'L: In Liquidation; Ceases Remaining Charter Operations SATCON TECHNOLOGY: Aims to Put Assets on Auction Block Next Month SAVANNAH INTERESTS: Owners Retain Control Under Plan SECOND INJURY: Mo. Auditor Confirms State Fund Insolvent SHELDRAKE LOFTS: Court Approves McGrath & Company as Appraiser SINO-FOREST CORP: Plan Implementation Date Expected for Jan. 23 STELLAR BIOTECHNOLOGIES: Incurs $5.2-Mil. Net Loss in 2012 SURGICAL ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors THELEN LLP: Ex-Partner Clawback Deal Paves Way for More Pacts THQ INC: Panel Seek to Retain Houlihan Lokey as Fin'l Advisor TIGER MEDIA: Expects $9 Million Net Income for 2012 TIGER MEDIA: Phillip Frost Owns 32.5% of Ordinary Shares TRIBUNE CO: Names Peter Liguori as Chief Executive Officer TRINSEO SA: S&P Affirms 'B+' Corporate Credit Rating TRIBUNE CO: To Drop Clawback Lawsuits Against Many Top Executives TXU CORP: Bank Debt Trades at 34% Off in Secondary Market USEC INC: Modifies Executive Compensation Program for 2013 UTSTARCOM HOLDINGS: Himanshu Shah Hikes Equity Stake to 17.7% VELO HOLDINGS: Urges Judge to Confirm Ch. 11 Reorganization Plan VERTIS HOLDINGS: Hires Deloitte & World Graphic VITESSE SEMICONDUCTOR: Raging Capital Drops 2 Director Nominees VYSTAR CORP: Composition of Board Committees Modified W.R. GRACE: Financing Amendment Approved by Bankr. Court W.R. GRACE: Drops Bid to Expand Baker Donelson's Services W.R. GRACE: David Law Firm Represents Asbestos Claimants W.R. GRACE: To Release 4th Quarter Results Feb. 6 WARNER SPRINGS: Court Approves Timothy Landis as Consultant WARNER SPRINGS: Claims Bar Date Set for Feb. 22 WILCOX EMBARCADERO: Stipulation on Use of Owens Cash Collateral WVSV HOLDINGS: Amends Plan Outline to Address 10K Objection XZERES CORP: Delays Form 10-Q for November 30 Quarter XZERES CORP: Amends 2012 Form 10-K to Revise Disclosures ZACKY FARMS: Lillian Zacky Family Trust Wins Auction ZUERCHER TRUST: Court Orders Appointment of Ch. 11 Trustee * Moody's Says Speculative-Grade Liquidity Still Face Threats * Moody's Says Foreclosure Timelines Continue to Extend * Regionals Showing Better Health than Big Banks in Latest Reports * Law360 Names Akin Gump Bankruptcy Group of The Year * Large Companies With Insolvent Balance Sheets ********* 0738126 BC: Owner Accused of Operating Ponzi Scheme --------------------------------------------------- The executive director of the British Columbia Securities Commission has issued a notice of hearing alleging that a Canadian citizen who currently resides and is under house arrest in Colbert, Washington, perpetrated a fraud and made false statements to the commission. The notice alleges that Doris Elizabeth Nelson operated a payday loan business that was, in actuality, a Ponzi scheme that raised $135.4 million from at least 800 investors in Canada and the United States. The notice states that over $69 million was raised from at least 355 B.C. investors. Ms. Nelson ran her business through a group of companies that she directed and controlled, and which she represented and promoted collectively as the Little Loan Shoppe. She financed the growth of her business by raising funds from investors in B.C. and the U.S., and used existing investors to recruit new investors, paying these recruiters on a commission basis. In return for investors' money, she had her companies issue promissory notes. Ms. Nelson represented to investors, both directly and through her recruiters, that because her business was so profitable, she could afford promissory notes paying annual interest rates of 40% to 60%. She also said that the investment was risk-free. In reality, her business was not profitable due to its high rate of customer loan defaults. One of the companies that Nelson controlled and used to issue promissory notes was 0738126 B.C. Ltd. On July 11, 2008, commission investigators notified Ms. Nelson that 0738126's capital raising activities in B.C. were under investigation. The notice alleges that Ms. Nelson reacted by emailing investors, telling them that she planned to make false statements to the commission and coaching them to hide relevant information if contacted by the commission. The commission ordered 0738126 to provide information and records regarding its investors. In response, Ms. Nelson produced a false affidavit in which she misrepresented the number of Canadian investors and attached false evidence purporting to establish exemptions for those distributions that 0738126 had already made. Nelson also stated, correctly, that 0738126 had ceased distributing securities. Since 2009, two of Ms. Nelson's companies have entered bankruptcy proceedings. Ms. Nelson is also the subject of civil proceedings brought by the Washington State Department of Financial Institutions and the U.S. Securities and Exchange Commission. Additionally, she is awaiting trial in federal criminal court in Spokane, Washington, currently scheduled to be held in June 2013, on 71 counts of wire fraud, 22 counts of mail fraud, and 17 counts of international money laundering. These allegations have not been proven. Counsel for the executive director will apply to set dates for a hearing into the allegations before a panel of commissioners on February 19, 2013 at 9:00 a.m. The B.C. Securities Commission is the independent provincial government agency responsible for regulating trading in securities within the province. 112TH & SHERIDAN: Case Summary & 2 Unsecured Creditors ------------------------------------------------------ Debtor: 112th & Sheridan Development, LLC 44 Inverness Drive East, Building E Englewood, CO 80112 Bankruptcy Case No.: 13-10711 Chapter 11 Petition Date: January 18, 2013 Court: U.S. Bankruptcy Court District of Colorado (Denver) Judge: Howard R. Tallman Debtor's Counsel: Lee M. Kutner, Esq. KUTNER MILLER BRINEN, P.C. 303 E. 17th Avenue, Suite 500 Denver, CO 80203 Tel: (303) 832-2400 E-mail: lmk@kutnerlaw.com Scheduled Assets: $2,503,294 Scheduled Liabilities: $1,862,826 A copy of the Company's list of its two unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cob13-10711.pdf The petition was signed by James S. Loup, manager. 1584 FULTON: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: 1584 Fulton LLC 1584 Fulton Street Brooklyn, NY 11213 Bankruptcy Case No.: 13-40279 Chapter 11 Petition Date: January 17, 2013 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Nancy Hershey Lord Debtor's Counsel: David Carlebach, Esq. LAW OFFICES OF DAVID CARLEBACH, ESQ. 40 Exchange Place, Suite 1306 New York, NY 10005 Tel: (212) 785-3041 Fax: (646) 355-1916 E-mail: david@carlebachlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Martin Daskal, managing member. 1ST REGENTS BANK: Closed; First Minnesota Bank Assumes Deposits --------------------------------------------------------------- 1st Regents Bank of Andover, Minn., was closed on Friday, Jan. 18, 2013, by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Minnesota Bank of Minnetonka, Minn., to assume all of the deposits of 1st Regents Bank. Depositors of 1st Regents Bank's sole branch will automatically become depositors of First Minnesota Bank. The drive-through facility of 1st Regents Bank will reopen during normal business hours, but due to the Martin Luther King, Jr. holiday, the bank's lobby will reopen on Tuesday, Jan. 22 at its usual time. 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 1st Regents Bank should continue to use their existing branch until they receive notice from First Minnesota Bank that it has completed systems changes to allow other First Minnesota Bank branches to process their accounts as well. As of Sept. 30, 2012, 1st Regents Bank had around $50.2 million in total assets and $49.1 million in total deposits. First Minnesota Bank will pay the FDIC a premium of two percent to assume all of the deposits of 1st Regents Bank. In addition to assuming all of the deposits of the failed bank, First Minnesota Bank agreed to purchase essentially all of the assets. Customers with questions about the transaction should call the FDIC toll-free at 1-800-886-2504. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/1stregents.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $10.5 million. Compared to other alternatives, First Minnesota Bank's acquisition was the least costly resolution for the FDIC's DIF. 1st Regents Bank is the second FDIC-insured institution to fail in the nation this year, and the first in Minnesota. The last FDIC-insured institution closed in the state was First Commercial Bank, Bloomington, on Sept. 7, 2012. 400 EAST: Hires Herrick Feinstein as Bankruptcy Counsel ------------------------------------------------------- 400 East 51st Street LLC asks the U.S. Bankruptcy Court for permission to employ Herrick, Feinstein LLP as principal bankruptcy counsel. Joshua Angel attests that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm's hourly rates range from $990 to $495 for members and counsel, $580 to $290 for associates, and $355 to $180 for legal assistants. About 400 East 51st Street 400 East 51st Street LLC filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-14196) on Oct. 9, 2012. The Debtor, a Single Asset Real Estate under 11 U.S.C. Sec. 101 (51B), owns property in 150 East 58th Street, New York. Judge Robert E. Gerber presides over the case. Hanh V. Huynh, Esq., at Herrick, Feinstein LLP, in New York, serves as counsel. The Debtor disclosed $15,058,088 in asset and $11,522,779 in liabilities as of the Chapter 11 filing. The petition was signed by Simon Elias, member and chief administrative officer. 400 EAST: Government Proofs of Claim Due April 8 ------------------------------------------------ The deadline for governmental entities to file proofs of claim in the Chapter 11 case of 400 East 51st Street LLC is April 8, 2013 at 5:00 p.m. 400 East 51st Street LLC filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-14196) on Oct. 9, 2012. The Debtor, a Single Asset Real Estate under 11 U.S.C. Sec. 101 (51B), owns property in 150 East 58th Street, New York. Judge Robert E. Gerber presides over the case. Hanh V. Huynh, Esq., at Herrick, Feinstein LLP, in New York, serves as counsel. The Debtor disclosed $15,058,088 in asset and $11,522,779 in liabilities as of the Chapter 11 filing. The petition was signed by Simon Elias, member and chief administrative officer. A123 SYSTEMS: CFIUS Reviews Transfer of Technology to Wanxiang -------------------------------------------------------------- The Strategic Materials Advisory Council on Jan. 21 urged the Committee on Foreign Investment in the United States (CFIUS) to follow the words of President Obama's Second Inaugural Address and refuse to hand over critical technology to other countries. In his Inaugural, the President said, "The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition; we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries -- we must claim its promise." "The President could have been reading from our own public statements about the transfer of advanced battery technology to a company owned by one of China's richest and most politically- connected individuals," said Council Co-Chair, former Army Acquisition Executive, Dean Popps. "With more than $250 million in federal and state grants, it appears A123 Systems advanced the technology of lithium-ion batteries by at least a decade," Mr. Popps said. "What's more, the grounding of the entire Boeing 787 fleet over concerns with its lithium-ion battery technology shows just how vital this technology will be in the 21st century." "This is exactly the science the President was talking about: technology that will power the jobs and industries of tomorrow by powering our electrical grid and our communications system. Even more central to the President's concerns, this science will power our satellites, unmanned military drones and our soldiers in the field. This highly sensitive technology with key military applications should not be handed over to China. American taxpayers own this technology; we paid for it and, like the President said, we should claim its promise." CFIUS, headed by Obama's outgoing Treasury Secretary, Timothy Geithner, is in the process of reviewing the transfer of A123 Systems' technology to the Shanghai-based Wanxiang Group in a bankruptcy sale. Wanxiang's founder and CEO is Chinese billionaire Lu Quanqiu, China's 18th richest man and a 44 year member of China's National People's Congress. In a maneuver described as "novel," Wanxiang has established an "independent trust" to buy a majority of A123's assets while awaiting a decision from CFIUS. "This 'trust' mechanism shouldn't fool anyone," Mr. Popps noted, "at the end of the sale, this technology will still be Chinese-owned unless CFIUS follows the mandate in today's Inaugural address." About the Council The Strategic Materials Advisory Council is a coalition of former U.S. Government leaders and industry experts who have significant experience with strategic and critical materials through decades of service in the public and private sector. The Council was formed with the clear objective to promote policy solutions that ensure continued access of both U.S. industry and military to those materials needed to support a robust 21st century economy and military. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designs, develops, manufactures and sells advanced rechargeable lithium-ion batteries and battery systems and provides research and development services to government agencies and commercial customers. A123 is the recipient of a $249 million federal grant from the Obama administration. Pre-bankruptcy, A123 had an agreement to sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. A123 didn't make a $2.7 million payment due Oct. 15 on $143.75 million in 3.75% convertible subordinated notes due 2016. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Debt includes $143.8 million on 3.75% convertible subordinated notes. Other liabilities include $22.5 million on a bridge loan owing to Wanziang. About $33 million is owed to trade suppliers. The Hon. Kevin J. Carey presides over the case. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. An official committee of unsecured creditors has been appointed in the case. The Committee is represented by lawyers at Brown Rudnick LLP and Saul Ewing LLP. A123 sought bankruptcy protection with a deal to sell its auto- business assets to Johnson Controls Inc. The deal with JCI is valued at $125 million, and subject to higher offers at a bankruptcy auction. At an auction early in December, JCI's bid was topped by Wanxiang America's $256.6 million offer. The Bankruptcy Court approved the sale on Dec. 11. Wanxiang is buying most of A123, except for its government business. Navitas Systems, a Chicago-area company spun off from Sun MicroSystems, is buying A123's government business for $2.25 million. JCI has filed an appeal from the sale approval. ABB/CON-CISE OPTICAL: S&P Affirms 'B' CCR; Rates $330MM Loans 'B' ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Coral Springs, Fla.-based ABB/Con-Cise Optical Group LLC. The outlook is stable. At the same time, S&P assigned its 'B' issue rating (the same as the corporate credit rating) to the proposed $330 million senior secured credit facilities. The recovery rating on the senior secured credit facilities is '3', indicating that lenders could expect meaningful (50% to 70%) recovery in the event of a payment default or bankruptcy. The ratings are subject to change and assume the transaction closes on substantially the terms provided to S&P. S&P expects to withdraw the ratings on the existing credit facilities upon repayment. Total debt outstanding at close is estimated at about $270 million. "The ratings on ABB reflect the company's narrow focus in the highly competitive contact lens distribution industry, its continuing vulnerability to decisions made by the four major contact lens suppliers, low barriers to entry, and the ability of customers to switch distributors fairly easily," said Standard & Poor's credit analyst Jerry Phelan. "The ratings also reflect the company's modest free cash flow generation after tax distributions, and its aggressive financial policy." The outlook is stable. S&P expects ABB to improve credit measures as it benefits from the acquisition by increasing profits meaningfully over the next two years through synergies, cost eliminations, and share gains, while maintaining adequate liquidity. ABDIANA A: Court OKs Merlin Law et al. to Pursue Insurance Claim ---------------------------------------------------------------- Abdiana A, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the Western District of Missouri to employ Erin Kristofco and Merlin Law Group, P.A., John Del Percio and Lloyd L. Messick as special counsel to pursue certain claims with respect to damage to the property at 1726 Holmes Road, Kansas City, Missouri, owned by the Debtor. Prior to the formation of the Debtor and the deeds of the property at 1726 Holmes Road to the Debtor, the property at 1726 Holmes Road was owned by an affiliate of the Debtor and insured against loss under Abdiana Properties, Inc.'s policy of property insurance with American Family Mutual Insurance Co. In January 2011, substantial theft and vandalism damage was sustained to the property at 1726 Holmes Road, giving rise to certain claims by Abdiana Properties, Inc., for the loss and damage. The insurer declined to pay Abdiana Properties, Inc.'s claim arising out of the damage to the property at 1726 Holmes Road now owned by the Debtor and which secures Debtor's obligations to Arvest Bank. Abdiana Properties, Inc., engaged counsel to bring suit to recover for the loss and damages to the property, and on June 19, 2012, suit was filed seeking to recover for the damage to the property. The Petition alleged damages and sought recovery of $4,671,974 and a sum of money equal to the plaintiff's lost business income, lost rents and lost rental value, with interest and costs and vexatious refusal penalties. The Debtor entered into a Contingent Fee Agreement dated May 7, 2012, with Erin Kristofco and Merlin Law Group, P.A.; John Del Percio; and Lloyd L. Messick, with respect to the claims arising out of the damage to the property at 1726 Holmes Road. Pursuant to the Contingent Fee Agreement, Abdiana Properties, Inc., agreed to pay a contingent fee in connection with the litigation of 20% of all gross amounts collected, 97% of which will go to MLG and 3% of which will be paid to Messrs. Del Percio and Messick as co- counsel, as provided in the Contingent Fee Agreement. The Debtor has an expectancy that the net recovery will be paid to or for the benefit of the Debtor and the property at 1726 Holmes Road. The Debtor said it brought the precautionary motion for approval of the engagement of MLG, Del Percio and Messick as special counsel to prosecute the claims arising out of the damage to the property at 1726 Holmes Road and for approval of the Contingent Fee Agreement. Although the Contingent Fee Agreement is between Abdiana Properties, Inc., and MLG, Del Percio and Messick, to the extent that the Debtor has an interest in the net proceeds of the claim arising out of damage to the property at 1726 Holmes Road and the employment of counsel may impact that interest, the Debtor sought court approval of the employment of MLG, Del Percio and Messick as special counsel to prosecute the claim. Erin Kristofco and Merlin Law Group, P.A.; John Del Percio; and Lloyd L. Messick attest they are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. Abdiana A, LLC, filed for Chapter 11 bankruptcy (Bankr. W.D. Mo. Case No. 12-44005) on Sept. 25, 2012, estimating at least $10 million in assets and debts. Abdiana A's business consists of ownership and operation of various real properties in Kansas City, Missouri. Bankruptcy Judge Arthur B. Federman oversees the case. AMERICAN AIRLINES: Veteran Pilots Assert Grievances --------------------------------------------------- A group of pilots claimed the bankruptcy court, which oversees American Airlines Inc.'s bankruptcy case, erred when it overruled its objection to the new labor contract between the airline and the Allied Pilots Association. The pilots, who were hired by American Airlines prior to Nov. 1, 1983, said the U.S. Bankruptcy Court in Manhattan does not have jurisdiction to order that any grievances filed by the group challenging the airline's ability to abrogate the contract are moot. The group previously criticized the airline's refusal to exclude the grievances filed by pilot Larry Scerba from the settlement proposed under the new labor deal. Mr. Scerba filed the grievances in behalf of the group to complain about American Airlines' alleged violation of an earlier agreement that prohibits the airline from taking any action to reduce the pay or the retirement benefits received by pilots. Retirement Plan The Pilots Group also claimed that the bankruptcy court erred when it overruled the group's objection to the amendment of the pilots retirement plan. Earlier this month, the group of pilots appealed from a bankruptcy court's decision that authorized AMR Corp., the parent company of American Airlines, to eliminate lump sum and installment options provided under the retirement plan. The pilots are seeking to have their case heard by the U.S. District Court for the Southern District of New York. The group is represented by New York-based law firm Seham Seham Meltz & Petersen LLP. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: $740-Mil. in Claims Traded for 11-Month Period ----------------------------------------------------------------- There were 815 claims totaling $740,392,283 that changed hands in the Chapter 11 cases of AMR Corp., American Airlines, Inc., and their debtor affiliates from January to November 2012, according to data compiled by SecondMarket. The first claim trading in AMR's case was recorded in January last year, less than two months after the airline company filed for bankruptcy. The breakdown of the claims trading activity is as follows: Month Trades Amount Avg. Amount ---------- ------ ------------ ----------- Nov. 2012 57 $140,655,059 $2,467,633 Oct. 2012 61 $155,061,245 $2,541,988 Sept. 2012 174 $288,956,230 $1,660,668 Aug. 2012 126 $106,196,547 $842,830 July 2012 71 $26,453,587 $372,586 June 2012 49 $15,109,975 $308,367 May 2012 67 $3,001,097 $44,792 April 2012 67 $3,236,946 $48,313 March 2012 135 $1,448,743 $10,731 Feb. 2012 7 $272,727 $38,961 Jan. 2012 1 $128 $128 American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: KPMG Also Provides Services to US Airways ------------------------------------------------------------ Howard Steinberg, a partner of the firm of KPMG LLP, filed a supplemental declaration disclosing that it is the auditor of US Airways. In order to avoid the sharing, inadvertent or otherwise, of confidential information between those KPMG professionals working on behalf of the Debtors with those KPMG professionals working on behalf of US Airways, KPMG will assign different professionals to work on the two different matters, and the KPMG professionals working for US Airways will not share any information or discuss any matters related to that engagement with those KPMG professionals working for the Debtors without US Airways' prior written consent, and vice versa. AMR Corp. and its affiliates earlier sought and obtained the Bankruptcy Court's permission to employ KPMG LLP as their tax compliance and tax consultants, nunc pro tunc to March 8, 2012. AMR and its creditors currently are weighing whether to merge with US Airways Group Inc. as a way for American to emerge from bankruptcy protection later this year, or step out as an independent company. In a statement Thursday, US Airways said it applauded American on its new brand elements and livery, the report says. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Skadden Arps Discloses New Hourly Rates ---------------------------------------------------------- John Wm. Butler, Jr., Esq., partner of the firm of Skadden, Arps, Slate, Meagher & Flom LLP, in Chicago, Illinois, filed supplemental affidavits disclosing that effective January 1, 2013, the hourly rates under the standard bundled rate structure will range from $840 to $1,220 for partners, $845 to $930 for counsel, $365 to $795 for associates, and $195 to $325 for legal assistants and support staff. On average, the 2013 rates represents an increase of approximately 4% from the firm's prior rate structure which was last adjusted as of January 1, 2012. Mr. Butler also disclosed that, in consultation with the Official Committee of Unsecured Creditors, his firm has determined to transfer to Togut, Segal & Segal LLP matters relating to: (a) the review and analysis of the releases contained in the proposed order approving the Debtors' motion to enter into term sheets relating to 21 ERJ135, 59 ERJ140 and 118 ERJ145 Aircraft and the diligence concerning potential fraudulent conveyance claims that were raised by Marathon Asset Management, LP; (b) Marathon's motion for the appointment of an examiner; and (c) matters relating the action styled American Airlines, Inc., v. Travelport Limited, et al., Case No. 4:11-cv00244-Y (N.D. Tex. 2011) and other matters related to the dispute that is the subject of the Antitrust Action. Further, Mr. Butler disclosed that his firm represents, among others, an affiliate of Arinc Incorporated, the City and County of San Francisco; the City of Chicago; and MPC Holdings; and affiliates of Airfoil Technologies International-Singapore PTE LTD, Allied Irish Bank, P.L.C., American Express Travel Related Services Company, Inc., and AMETEK, Inc. The Official Committee of Unsecured Creditors in AMR Corp.'s cases retained Skadden, Arps, Slate, Meagher & Flom LLP and affiliates as its counsel, nunc pro tunc to December 5, 2011. Skadden Arps agreed to: (a) advise the Committee regarding its rights, powers, and duties in the Chapter 11 Cases; (b) assist and advise the Committee in its consultations with the Debtors concerning the administration of the Chapter 11 Cases; (c) assist and advise the Committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtors, the operation of the Debtors' business and the desirability of the continuance of the business; (d) assist the Committee, as applicable, in the formulation, review, analysis and negotiation of any plan of reorganization that may be filed and assist the Committee, as applicable, in the formulation, review, analysis and negotiation of the disclosure statement accompanying any plan of reorganization; (e) assist the Committee in preparing pleadings and applications including, if applicable, any request for appointment of a trustee or examiner under Section 1104 of the Bankruptcy Code; (f) represent the Committee at court hearings and proceedings; (g) assist the Committee in the review, analysis, and negotiation of any financing agreements; (h) assist and advise the Committee as to its communications with its constituents regarding significant matters in these cases, including but not limited to communications required under Section 1102(b)(3) of the Bankruptcy Code; and (i) review and analyze motions, applications, orders, statements of operations and schedules filed with the Court and advise the Committee as to their propriety. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Wins Court Approval for $1.5-Bil. Financing -------------------------------------------------------------- David McLaughlin, writing for Bloomberg News, reported that AMR Corp., the American Airlines parent restructuring in bankruptcy, won court approval for $1.5 billion in aircraft financing, defeating bondholder opposition to a plan to repay debt. U.S. Bankruptcy Judge Sean Lane in Manhattan approved American's request for the financing in a decision filed on Jan. 18, according to the report, overruling an objection from a noteholder trustee that said the company owes a premium called a make-whole amount when it refinances. "The noteholders here are entitled to receive full repayment of principal and accrued interest without a make-whole amount, which is exactly what they bargained for in these circumstances," Judge Lane said, Bloomberg related. AMR, which filed for bankruptcy in 2011, sought court approval in October for the financing to take advantage of lower interest rates, saying it may save more than $200 million in interest expense, the report recalled. The airline said it would use proceeds to repay about $1.3 billion in debt backed by aircraft under three series of notes. The proposal, Bloomberg noted, was opposed by trustee U.S. Bancorp, which sued the Fort Worth, Texas-based airline in bankruptcy court. It said AMR was required to pay the make-whole amount under the terms of existing notes. Michael Burke, an attorney for U.S. Bancorp, didn't respond to a phone message or e-mail seeking comment, according to Bloomberg. Borrower Disincentive Mr. McLaughlin explains that make-whole provisions, under which investors receive a premium if the securities are redeemed early, are included in credit agreements to create a disincentive for borrowers to call bonds before their scheduled maturity. Lenders would rather keep the current high-coupon debt than have to reinvest the cash into lower-yielding notes. Vicki Bryan, an analyst at Gimme Credit LLC, told Bloomberg in a phone interview that she was concerned about the decision because AMR was "attacking" a fundamental provision that protects investors in the high-yield credit market. "This fundamentally weakens again even more what investors can expect in protection in high-yield debt," she said. The 13 percent secured notes fell 3.7 cents on the dollar to 103.3 cents on Jan. 19, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The 8.625 percent pass-through certificates dropped 4.5 cents to 103.75, and the 10.375 percent pass-through certificates fell 4.5 cents to 103.5 on the same day. AMR Spokesman "We are pleased with Judge Lane's decision and that he agreed with our position," AMR spokesman Sean Collins said in a statement, Bloomberg related. Judge Lane rejected the trustee's arguments in his decision. American's bankruptcy filing triggered an automatic acceleration of the amounts due under the notes without the make-whole payment, the judge said, according to Bloomberg. "In the case of a voluntary redemption, a make-whole amount is due, but if payment is made due to acceleration, it is not," Lane wrote, Bloomberg cited. American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Incurs $1.9 Billion Net Loss in Full Year 2012 ----------------------------------------------------------------- AMR Corporation reported net income of $262 million on $5.93 billion of total operating revenues for the three months ended Dec. 31, 2012, compared with a net loss of $1.09 billion on $5.95 billion of total operating revenues for the same period during the prior year. For the 12 months ended Dec. 31, 2012, the Company reported a net loss of $1.87 billion on $24.85 billion of total operating revenues, compared with a net loss of $1.97 billion on $23.97 billion of total operating revenues during the prior year. Excluding reorganization and special items, the net loss for 2012 was $130 million, a $932 million improvement over 2011. The Company's operating profit, excluding special items, of $494 million for 2012 was a $749 million improvement over last year. "We have made enormous progress towards building the new American," said Tom Horton, AMR's Chairman and CEO. "It is remarkable what the American team has been able to accomplish, including generating record revenue and a return to an operating profit for the year while restructuring every aspect of our company. I want to thank all of our people for their dedication, hard work and commitment to serving our customers during this time. Our momentum is growing toward emerging as a strong, healthy and vibrant competitor. In fact, with what we have accomplished, we expect to show strong results beginning in the first quarter of 2013." "Throughout 2012, we have executed on all aspects of our business plan - streamlining our organizational structure, increasing unit revenues, reducing unit costs, and restructuring our balance sheet," said Bella Goren, AMR's chief financial officer. "The strong financial foundation we are building gives us the ability to deliver returns to our financial stakeholders and make investments that create enhanced value for our customers and our people." A copy of the press release is available for free at: http://is.gd/INiSCE American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AXLE: Expects $2.9 Billion Sales in Full Year 2012 ----------------------------------------------------------- American Axle & Manufacturing Holdings, Inc., expects full year sales in 2012 to be approximately $2.9 billion, which represents an increase of approximately 13.5% as compared to the full year 2011. AAM expects adjusted earnings before interest expense, income taxes and depreciation and amortization (Adjusted EBITDA) to be approximately $350 million in 2012. AAM defines Adjusted EBITDA to be earnings before interest, taxes, depreciation and amortization excluding the impact of curtailments, asset impairments, restructuring costs and special charges related to the closure of the Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility, and debt refinancing and redemption costs, to the extent applicable. AAM believes that EBITDA and Adjusted EBITDA are meaningful measures of performance as they are commonly utilized by management and investors to analyze operating performance and entity valuation. The Company's management, the investment community and banking institutions routinely use these terms, together with other measures, to measure its operating performance relative to other Tier 1 automotive suppliers. EBITDA and Adjusted EBITDA should not be construed as income from operations, net income or cash flow from operating activities as determined under GAAP. Other companies may calculate EBITDA and Adjusted EBITDA differently. AAM expects full year net capital spending to approximate 6.5% of sales in 2012. The Company defines net capital spending as capital expenditures net of proceeds from the sale-leaseback of equipment and the sale of property, plant and equipment. AAM expects net debt to be approximately $1.39 billion at year-end 2012. The Company defines net debt as total debt less cash and cash equivalents. AAM expects to reverse the U.S. deferred tax asset valuation allowance in the fourth quarter of 2012. The impact of this adjustment is estimated to be in excess of $300 million. AAM's 2013 Outlook: * AAM expects full year sales in 2013 to be approximately $3.2 billion. This sales projection is based on the anticipated launch schedule of programs in AAM's new and incremental business backlog and the assumption that the U.S. Seasonally Adjusted Annual Rate of sales will increase from approximately 14.5 million vehicle units in 2012 to approximately 15.0 million vehicle units in 2013. * AAM expects to generate earnings before interest expense, income taxes and depreciation and amortization (EBITDA) as a percentage of sales in the range of 13.0% - 13.5% in 2013. * AAM expects full year net capital spending to approximate 7.0% of sales in 2013. AAM's 2015 Target: * AAM is targeting full year sales to exceed $4.0 billion and over $500 million of EBITDA in 2015. This sales and EBITDA projection is based on the anticipated launch schedule of programs in AAM's new and incremental business backlog and the assumption that the U.S. SAAR will be approximately 15.0 million vehicle units in 2015. About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. The Company's balance sheet at Sept. 30, 2012, showed $2.67 billion in total assets, $3.17 billion in total liabilities and a $497.7 million total stockholders' deficit. * * * In January 2012, Fitch Ratings has affirmed the 'B+' Issuer Default Ratings (IDRs) of American Axle & Manufacturing. Fitch expects leverage to trend downward over the intermediate term, however, as the company gains traction on its new business wins. Looking ahead, Fitch expects free cash flow to be relatively weak, but positive, in 2012 with the steep ramp-up in new business and as the company continues to make investments in both capital assets and research and development work to support growth opportunities in its customer base and product offerings. Beyond 2012, free cash flow is likely to strengthen meaningfully as the new programs coming on line in the near term begin to produce higher levels of cash. As reported by the TCR on Sept. 6, 2012, Moody's Investors Service has affirmed the B1 Corporate Family Rating (CFR) and Probability of Default Rating (PDR) of American Axle & Manufacturing Holdings, Inc. American Axle carries a 'BB-' corporate credit rating from Standard & Poor's Ratings Services. "The 'BB-' corporate credit rating on American Axle reflects the company's 'weak' business risk profile and 'aggressive' financial risk profile, which incorporate substantial exposure to the highly cyclical light-vehicle market," S&P said, as reported by the TCR on Sept. 6, 2012. AMERICAN MEDIA: S&P Lowers Corporate Credit Rating to 'CCC+' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Boca Raton, Fla.-based American Media Inc. to 'CCC+ ' from 'B-'. The rating outlook is negative. "In conjunction with the downgrade, we are lowering the issue- level rating on the first-lien notes to 'CCC+' from 'B-'. The recovery rating on this debt remains '4', indicating our expectation for average (30% to 50%) recovery in the event of a payment default. We are also lowering the issue-level rating on the second-lien notes to 'CCC-' from 'CCC'. The recovery rating on this debt remains '6', indicating our expectation for negligible (0% to 10%) recovery in the event of a payment default," S&P said. American Media had total debt of $477 million on Sept. 30, 2012. "The downgrade conveys our expectation that continued declines in circulation and advertising revenues will outweigh the company's cost reductions, resulting in deteriorating operating performance, rising debt leverage, and thinning discretionary cash flow," said Standard & Poor's credit analyst Hal Diamond. A key consideration is that the company has a narrowing margin of compliance with its senior leverage covenant, which has its final step down to 4.5x on Sept. 30, 2013. S&P believes that the company may need an amendment to its revolving credit facility covenant by the end of the 2014, or possibly even sooner, which could be difficult to obtain. The company relies on the revolving credit facility to fund its $28 million, semiannual June and December interest payments on its $365 million 11.5% first-lien notes due December 2017 and $104.9 million 13.5% second-lien notes due June 2018, which are paid in seasonally weak first and third fiscal quarters. "The ratings on American Media reflect our expectation that leverage will remain high and interest coverage will thin further. High leverage and weak interest coverage metrics underpin our view of American Media's financial profile as "highly leveraged," based on our criteria. We view the business risk profile as "vulnerable," based on our expectations that the business will remain highly competitive, operating diversity will stay limited, cyclicality will persist, and adverse secular trends will remain a threat. We assess the company's management and governance as fair,"S&P noted. American Media is a magazine and tabloid publisher, producing titles such as "Shape," "Star," and "The National Enquirer." Magazine publishing is highly competitive, particularly in the areas of celebrity news and gossip. Some of American Media's publications compete with magazines from larger, better- capitalized companies. The industry faces difficult long-term fundamentals because of competition from Internet-based media, where content is often available to readers free of charge and barriers to entry are low. Ad spending is also migrating online. Aside from structural issues, both circulation and advertising revenue are vulnerable to economic cyclicality. ARMAND PROPERTIES: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Armand Properties 1, Inc. aka Purta Del Sol 22041 S. Dixie Highway Miami, FL 33170 Bankruptcy Case No.: 13-11173 Chapter 11 Petition Date: January 18, 2013 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: A. Jay Cristol Debtor's Counsel: Joel M. Aresty, Esq. JOEL M. ARESTY, P.A. 13499 Biscayne Boulevard, #T-3 No. Miami, FL 33181 Tel: (305) 899-9876 Fax: (305) 723-7893 E-mail: aresty@mac.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Tanveer A. Hasan, president. ARRIS GROUP: S&P Assigns Preliminary 'BB-' Corporate Credit Rating ------------------------------------------------------------------ Standard & Poor's Rating Services assigned a preliminary 'BB-' corporate credit rating to Suwanee, Ga.-based ARRIS Group Inc. The outlook is stable. Concurrently, S&P assigned a preliminary 'BB-' issue-level rating to ARRIS' proposed $2.175 billion credit facility, which consists of a term loan A due 2018, term loan B facility due 2020, and a $250 million revolving credit facility due 2018. The preliminary recovery rating is '3', reflecting S&P's expectation for meaningful (50% to 70%) recovery of principal in the event of default. S&P also assigned a preliminary 'B+' issue rating and '5' recovery rating to existing senior convertible notes due 2026, reflecting its expectation for modest (10% to 30%) recovery of principal in the event of default. "The ratings on ARRIS reflect the company's leading position in the global customer premise equipment (CPE) industry and our expectation that the company will meet with at least moderate success in integrating Motorola Home, despite the challenges to integrate Motorola Home's much larger business and reverse its revenue declines, resulting in our assessment of its business risk profile as "fair." The ratings also reflect the company's pro forma leverage, which we expect to increase to about 4.4x over the coming year, resulting in our assessment of its financial risk profile as "aggressive". The company's liquidity is "adequate" and we assess its management and governance as fair," S&P said. "With the Motorola Home acquisition, ARRIS' pro forma revenues and employees more than triple, representing about $4.7 billion in revenues and 7,000 employees for 12 months ended December 2012," said Standard & Poor's ratings analyst John Moore. "We expect the acquisition will provide ARRIS with a leading set top box systems business, representing about 50% of pro forma revenues, and enhance its position in global CPE and home networking markets," added Mr. Moore. Pro forma client concentration is significant, with ARRIS/Motorola Home's five largest clients representing about 51% of pro forma 2012 revenues. S&P expects this concentration to moderate to less than 50% over the coming year, however, due to higher demand in international markets. ATARI INC: U.S. Arm of Iconic Company Files for Bankruptcy ---------------------------------------------------------- Atari Inc., the U.S. arm of the iconic company that helped spearheaded the videogames industry 40 years ago with gaming consoles and classic hits like "Pong", filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) to break away from its unprofitable French parent company and secure independent capital. The company's parent, Atari SA, formerly known as Infogrames SA, has been unprofitable for years. Its principal creditor, BlueBay Asset Management, which is owed EUR21 million, has suspended the credit line. The Chapter 11 process constitutes the most strategic option for Atari's U.S. operations, as they look to preserve their inherent value and unlock revenue potential unrealized while under the control of Atari S.A. Atari U.S. said in a statement that it is looking to secure independent capital for future growth, primarily in the areas of digital and mobile games. During the Chapter 11 process, the company expects to conduct its normal business operations. Within the next 90 to 120 days, Atari U.S. expects to effectuate a sale of all, or substantially all, of their assets in a "sale free and clear" under Section 363 of the Bankruptcy Code or to confirm plans of reorganization that accomplish substantially the same result. The assets to be sold include not only one of the most widely recognized brand logos, which is familiar to 90% of Americans, according to a recent survey, but also legendary game titles including Pong, Asteroids, Centipede, Missile Command, Battlezone and Tempest. Other recognized brands include Test Drive, Backyard Sports and Humongous. Atari Inc. has shifted its business from traditional retail games to digital games and licensing with an increased focus on developing mobile games based on some of Atari's most iconic and enduring franchises. The company has recently launched titles for iOS and Android mobile platforms, including Atari Greatest Hits, Outlaw, Breakout and Asteroids Gunner. Upcoming mobile and tablet games include apps based upon the popular Rollercoaster Tycoon franchise and Atari Casino. The U.S. companies are also seeking approval to obtain $5.25 million in debtor-in-possession financing from one or more funds managed by Tenor Capital Management, a firm specializing in convertible arbitrage and special situations. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP are proposed to serve as lead counsel for the U.S. companies in their respective Chapter 11 cases. BMC Group is the claims and notice agent. Protiviti Inc. is the financial advisor. ATARI INC: Intends to Pay Claims of Certain Developers ------------------------------------------------------ Atari Inc., and its U.S. affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of New York to pay pre-bankruptcy claims of certain critical game developers, one game licensor, and other third parties who provide services essential to their operations. While the Debtors believe that almost all of their developers provide invaluable services, the Debtors seek authority to pay the prepetition amounts owed only to those certain foreign and small developers for which, in the Debtors' business judgment, nonpayment presents a substantial risk of immediate and irreparable harm to the Debtors' business. Specifically, the Debtors request authority to pay, in their discretion, prepetition claims totaling $233,300 held by these developers: 1. Code Mystics Inc. ($25,300 prepetition claim). Code Mystics develops "Atari's Greatest Hits" for mobile devices, which has generated over $3.5 million dollars of revenue, and currently is generating approximately $50,000 to $100,000 per month in revenue for the Debtors. 2. Escalation Studios Inc. ($66,000). Escalation Studios develops "Atari Casino" which is scheduled to be released in a few months. Atari Casino is a genre of games that represents one of the most significant upcoming revenue opportunities in the Debtors' portfolio. 3. GSkinner.com Inc. ($99,000). Gkinner.com developed the "Atari Online Arcade" for the Debtors in connection with a significant partnership with Microsoft. Gskinner.com utilized HTML5 in which Atari classic titles were reimagined for Internet Explorer 10. The Atari Online Arcade was a critical success and is also part of the Atari.com website. 4. Uab On5 ($43,000). Uab On5 is creating the Debtors' next launch of the RollerCoaster Tycoon franchise, which is also scheduled to be released in the next few months. RollerCoaster Tycoon is one of the best-selling franchises in PC gaming history, selling over 14 million units worldwide and generating over $220 million in North American sales alone. In addition, the Debtors develop and sell certain games licensed to them by third parties who originally designed and developed those games. One of the most valuable games in the Debtors' portfolio, RollerCoaster Tycoon, is licensed to the Debtors by a foreign licensor, Chris Sawyer. Because the postpetition cooperation of the Mr. Sawyer is critical to the Debtors' business, the Debtors request authority to pay Sawyer's prepetition claim of $250,000. Moreover, the Debtors request authority to pay claims held by other vendors that are essential to maintaining the going concern value of the Debtors: Other Vendor Prepetition Claim Description ------------ ------------------ ----------- American Express $40,013 Corporate Expenses Cinram Group, LLC /Ditan Distribution LLC $44,920 Warehouse Lien ------- Total $84,933 In sum, the Debtors seek authorization to pay up to $568,233 in Critical Vendor Claims, which constitutes approximately 9.5% of the Debtors' overall trade debt. Each Critical Vendor will be required to continue to provide services to the Debtors on the normal trade terms, practices, and programs that were most favorable to the Debtors in effect prior to the Petition Date, or on other such favorable terms as are acceptable to the Debtors. About Atari Inc. Atari Inc., the U.S. iconic company that helped spearheaded the videogames industry 40 years ago with gaming consoles and classic hits like "Pong", filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) on Jan. 21, 2012, to break away from its unprofitable French parent company and secure independent capital. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP are proposed to serve as lead counsel for the U.S. companies in their respective Chapter 11 cases. BMC Group is the claims and notice agent. Protiviti Inc. is the financial advisor. ATARI INC: Wants Until March to File Schedules and Statements -------------------------------------------------------------- Atari Inc. and its affiliates ask the Bankruptcy Court to extend to 44 days from the Petition Date their deadline to file schedules of assets and liabilities and statements of financial affairs. Due to the nature of the Debtors' businesses, limited staff available to perform the required internal review of the Debtors' businesses and affairs, and the numerous other matters incident to the commencement of these chapter 11 cases, the Debtors submit that the 14-day period within which to file the Schedules and Statements under Fed.R.Bank.P. 1007(c) will not be sufficient. It would be onerous, if not impossible, to complete the Schedules and Statements within the deadline imposed by Bankruptcy Rule 1007(c). The volume of material that must be compiled and reviewed by the Debtors' limited staff provides ample "cause" justifying the requested extension for filing the Schedules and Statements. About Atari Inc. Atari Inc., the U.S. iconic company that helped spearheaded the videogames industry 40 years ago with gaming consoles and classic hits like "Pong", filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) on Jan. 21, 2012, to break away from its unprofitable French parent company and secure independent capital. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP are proposed to serve as lead counsel for the U.S. companies in their respective Chapter 11 cases. BMC Group is the claims and notice agent. Protiviti Inc. is the financial advisor. ATARI INC: Case Summary & 30 Largest Unsecured Creditors -------------------------------------------------------- Chapter 11 Debtor: Atari Inc. 475 Park Avenue South New York, NY 10016 Bankruptcy Case No.: 13-10176 Chapter 11 Petition Date: January 21, 2013 Court: U.S. Bankruptcy Court Southern District of New York (Baltimore) Debtor's Counsel: Andrew Kamensky, Esq. Michael P. Richman, Esq. Peter S. Partee, Esq. Richard P. Norton, Esq. Robert A. Rich, Esq. HUNTON & WILLIAMS, LLP 200 Park Avenue, 53rd Floor New York, NY 10166 Tel: 212-309-1000 Fax: 212-309-1100 Email: akamensky@hunton.com mrichman@hunton.com ppartee@hunton.com rnorton@hunton.com rrich2@hunton.com Debtor's Financial Advisors: Guy Davis Suzanne Roski PROTIVITI, INC. 1051 East Cary Street, Suite 602 Richmond, VA 23219 Tel: 804-644-7000 Fax: 804-644-7055 Debtor's Claims Agent: BMC Group Lead Debtor's Estimated Assets: $1,000,001 to $10,000,000 Lead Debtor's Estimated Debts: $10,000,001 to $50,000,000 Affiliates simultaneously filing for Chapter 11: Entity Case No. ------ -------- Atari Interactive, Inc. 13-10177 Estimated assets: $10MM to $50MM Estimated Debts: $100,001 to $500,000 California U.S. Holdings, Inc. 13-10178 Humongous, Inc. 13-10179 The petitions were signed by Robert A. Mattes, Atari's Chief Financial Officer. Consolidated List of Debtors' 30 Largest Unsecured Creditors: Creditor Nature of Claim Claim Amount -------- --------------- ------------ CHRIS SAWYER ROYALTIES $250,000 c/o MARJACQ MICRO LIMITED 187 GLOUCESTER BOULEVARD LONDON, NW1 6BU, UK Tel: +44 020 7935-9499 guy@marjacq.com TAVANT TECHNOLOGIES, INC. TRADE PAYABLES $243,336 3101 JAY STREET, SUITE 101 SANTA CLARA, CA 95054 Tel: (408) 654-5222 sudheer.devadiga@tavant.com CD PROJEKT RED S.A ROYALTIES $215,998 UL. JAGIELLONSKA 74 BUDYNEK E, WARSAW 03-301, POLAND Tel: +48 22-519-69-00 michal.nowakowski@cdprojekt.com DELOITTE & TOUCHE ACCOUNTING FEES $164,000 LIQUID ENTERTAINMENT TRADE PAYABLES $152,001 hnewman@liquidentertainment.net CDV SOFTWARE ENTERTAINMENT TRADE PAYABLES $147,967 tom.gross@cdvus.com KMART CUSTOMER $142,877 GIBSON, DUNN & CRUTCHER LLP LEGAL SERVICES $127,505 wbarsky@gibsondunn.com RACKSPACE MANAGED HOSTING TRADE PAYABLES $124,716 rosanna.murray@rackspace.com FRONTIER DEVELOPMENTS LTD ROYALTIES $120,000 guy@marjacq.com SLEEPY GIANT ENTERTAINMENT INC TRADE PAYABLES $105,653 piotr.kapiszewski@sleepygiant.com GUI KARYO SEVERANCE $104,661 gui@karyo.com DORSEY & WHITNEY LLP LEGAL SERVICES $102,915 walling.barbara@dorsey.com GSKINNER.COM INC. TRADE PAYABLES $99,000 bobi@gskinner.com ERNST & YOUNG (FRANCE) CONSULTING SERVICES $90,000 FLURRY INC TRADE PAYABLES $79,550 marc@flurry.com PETROL ADVERTISING INC. TRADE PAYABLES $70,833 sclarke@petrolad.com BUG TRACKER TRADE PAYABLES $68,369 ESCALATION STUDIOS INC TRADE PAYABLES $66,000 ARVATO DIGITAL SERVICES, LLC TRADE PAYABLES $64,644 caren.burnette@arvatousa.com TRIPLEPOINT LLC TRADE PAYABLES $62,639 qwageman@triplepointpr.com WAL-MART CUSTOMER $56,330 BABEL MEDIA LTD TRADE PAYABLES $54,269 paul.mewis@babelmedia.com KOOLHAUS GAMES, INC. TRADE PAYABLES $51,240 corporate@koolhausgames.com FLYING WISDOM STUDIOS, INC. TRADE PAYABLES $50,135 hkchao@flyingwisdomstudios.com GRIPTONITE, INC. TRADE PAYABLES $47,500 bowen.situ@glu.com CINRAM GAMING & TRADE PAYABLES $44,920 DISTRIBUTION DIVISION louellaidolor@cinram.com GAMESPY INDUSTRIES, INC. LICENSING $44,000 ar.customer@glu.com UAB ON5 NAUGARDUKO G. TRADE PAYABLES $43,000 sergey@on-5.com HUDSON VALLEY COMPUTER TRADE PAYABLES $42,959 SERVICES LLC DBA ELEVATED COMPUTING mikem@elevatedcomputing.com BELLA HOLDINGS: Case Summary & Top Unsecured Creditors ------------------------------------------------------ Debtor: Bella Holdings, LLC c/o David F. Cooper Building 11, Suite 900 3495 Piedmont Road Atlanta, GA 30305 Bankruptcy Case No.: 13-51042 Chapter 11 Petition Date: January 18, 2013 Court: U.S. Bankruptcy Court Northern District of Georgia (Atlanta) Judge: Paul W. Bonapfel Debtor's Counsel: George M. Geeslin, Esq. Eight Piedmont Center, Suite 550 3525 Piedmont Road, N.E. Atlanta, GA 30305-1565 Tel: (404) 841-3464 Fax: (404) 816-1108 E-mail: geeslingm@aol.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Bella Cucina Artful Food, Inc. 13-51043 Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Alisa Barry, managing member. A. A copy of Bella Holdings' list of its two unsecured creditors is available for free at: http://bankrupt.com/misc/ganb13-51042.pdf B. A copy of Bella Cucina's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/ganb13-51043.pdf BERNARD L MADOFF: SEC Purge of Madoff, Goldman Probe Files Upheld ----------------------------------------------------------------- Tom Schoenberg, writing for Bloomberg News, reported that the U.S. Securities and Exchange Commission doesn't have to restore purged files on Bernard Madoff and Goldman Sachs Group Inc. (GS) that were sought by a government watchdog group, a federal judge ruled. Citizens for Responsibility and Ethics in Washington sued the agency for allegedly violating federal records law by refusing to recover investigative files that had been destroyed. The group asked for documents related to the agency's preliminary probes under the Freedom of Information Act, Bloomberg related. U.S. District Judge James Boasberg in Washington ruled on Jan. 18 that the government was only required to seek recovery of records that were physically removed from the agency's custody rather than those that were done away with, according to Bloomberg. "The SEC was under no duty to undertake restoration efforts," the judge said. The lawsuit sought records of so-called Matters Under Investigation, which under a policy dating back to 1998 weren't stored as official files of the SEC, according to a Sept. 14, 2011, letter to Congress from then-SEC enforcement director Robert Khuzami, Bloomberg pointed out. CREW, as the group is known, sued for materials related to the SEC's initial probes of Madoff's Ponzi scheme, Goldman Sachs's trades of American International Group Inc. credit- default swaps in 2009, insider-trading probes of Deutsche Bank AG, Lehman Brothers and SAC Capital Advisors LP, and investigations of possible financial fraud at Wells Fargo & Co. and Bank of America Corp. in 2007 and 2008, according to the report. Early Stages Bloomberg said the group, according to the lawsuit, wanted to know why those probes were closed at an early stage without any action by the agency. Darcy Flynn, a 13-year SEC employee, claimed in a letter to U.S. Senator Charles Grassley, an Iowa Republican, that the agency destroyed documents related to those investigations, Bloomberg related. "The most troubling aspect of the judge's opinion is his conclusion that the SEC is under absolutely no obligation to conduct any recovery efforts," Anne Weismann, chief counsel of the group, told Bloomberg. She said the group was considering whether to appeal. The group sought recovery of deleted electronic files as well as any physical documents that may still exist elsewhere in the agency, according to the report. ?Messy Details' When the group filed its lawsuit, Weismann said in a statement that "the public deserves to know all the messy details about how these investigations were conducted, and why they were closed at such an early stage without taking any action against the Bernie Madoffs of the world," Bloomberg recalled. Under the SEC's policy on closed preliminary investigations, the only information it retained was the title of the matter, its source, general subject matter, the staff members involved, the date it was opened and closed and other parties related to the inquiry, according to the complaint, Bloomberg noted. In light of Grassley's questions and continuing discussions with the National Archives and Records Administration, the SEC halted the policy, requiring all documents created or received for all enforcement matters to be retained until the agency is certain that the policies meet federal standards, according to Khuzami's letter to Congress, Bloomberg said. The case is Citizens for Responsibility and Ethics in Washington v. U.S. Securities and Exchange Commission, 11-cv- 01732, U.S. District Court, District of Columbia (Washington). 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. BOB YARI: Calif. Appeals Court Affirms Ruling in E1 Films Lawsuit ----------------------------------------------------------------- Following a bench trial, a trial court issued a statement of decision and entered judgment in favor of E1 Films Canada Inc. on its breach of contract claims against Syndicate Films International LLC. The trial court ruled that E1 met its burden to show it was entitled to a refund of payments made in connection with an agreement for the Canadian distribution of certain films. Syndicate Films contends that substantial evidence does not support the judgment with respect to either liability or damages for breach of contract, and that prejudgment interest should not have been awarded. In a Jan. 15 ruling, the Court of Appeals of California, Second District, Division Two, affirmed the trial court's decision. Substantial evidence supported the trial court's determination that Syndicate Films breached the agreement and that E1 was entitled to damages in the amount of $1,390,000 plus prejudgment interest. E1 distributed feature films and television programs in Canada and other countries throughout the world. Its parent company was E1 Entertainment. Patrice Theroux had been E1's president since mid- 2006 and had been an entertainment executive with a different company for the previous 18 years. Syndicate Films was a foreign sales agent, affiliated with the Yari Film Group. Its role was as a foreign distributor, selling rights on behalf of producers; it did not independently produce films or acquire films for licensing. As the president of appellant, David Glasser oversaw international distribution and sales for appellant between 2004 and 2008. Mr. Glasser was also the chief creative officer for the Yari Film Group. In December 2009, E1 filed its initial complaint for breach of contract and fraud against Syndicate Films, Bob Yari and Bob Yari Productions. In January 2010, the action was stayed against BYP, then in chapter 11 bankruptcy, and E1 later dismissed Yari from the action. E1 received leave to file the operative first amended complaint in November 2010, which alleged four causes of action for breach of contract against Syndicate Films and BYP and a cause of action for fraud against Syndicate Films, BYP and Yari. The complaint specifically referenced an output term sheet as providing a basis for liability. E1 sought damages in the amount of $2,070,098, which it asserted was the difference between the minimum guarantees it paid and the amount of the reduced minimum guarantees it should have paid in light of the films' limited theatrical releases. Syndicate Films answered the complaint, denying the allegations and asserting several affirmative defenses. The case is, E1 FILMS CANADA INC., Plaintiff and Respondent, v. SYNDICATE FILMS INTERNATIONAL, Defendant and Appellant, No. B236146 (Calif. App. Ct.). A copy of the Court's Jan. 15 ruling is available at http://is.gd/7JpiGhfrom Leagle.com. BRUCE BURROW: US Trustee Seeks Dismissal or Ch.7 Conversion ----------------------------------------------------------- Bruce Burrow, writing for Arkansas Business, reports that since Bruce Burrow hasn't complied with reporting requirements, a U.S. bankruptcy trustee has asked that the Jonesboro, Ark., developer?s Chapter 11 bankruptcy reorganization be converted to Chapter 7 liquidation or thrown out. U.S. Trustee Nancy Gargula said Mr. Burrow hasn't filed "accurate monthly operating reports for September, October and November 2012" and also didn't file proof of insurance on his property or a list of other financial documents. "Operating reports are a source of vital, financial information which creditors and other parties in interest may access in order to make an informed decision on the merits of [Burrow's] disclosure statement and plan," the motion said, according to the report. According to the report, Mr. Burrow's attorney, Kevin Keech, Esq., in North Little Rock, Ark., said the missing paperwork was just an oversight and the motion took him by surprise. He said that ordinarily he would receive a call about missing documents. He said the missing documents should be filed soon, which should resolve the issues. Mr. Burrow filed his Chapter 11 bankruptcy petition on July 30, 2012, and disclosed total debts of $17.27 million and total assets of $14.1 million. CENTRAL FEDERAL: Annual Stockholders Meeting Set for May 16 ----------------------------------------------------------- Central Federal Corporation's Annual Meeting of stockholders will be held on May 16, 2013, at the Fairlawn Country Club, 200 North Wheaton Road, Fairlawn, Ohio at 10:00 a.m. The record date for stockholders eligible to vote at the meeting is April 1, 2013. About Central Federal Fairlawn, Ohio-based Central Federal Corporation (Nasdaq: CFBK) is the holding company for CFBank, a federally chartered savings association formed in Ohio in 1892. CFBank has four full-service banking offices in Fairlawn, Calcutta, Wellsville and Worthington, Ohio. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Crowe Horwath LLP, in Cleveland, Ohio, expressed substantial doubt about the Company's ability to continue as a going concern. The Company's auditors noted that the Holding Company and its wholly owned subsidiary (CFBank) are operating under regulatory orders that require among other items, higher levels of regulatory capital at CFBank. The Company has suffered significant recurring net losses, primarily from higher provisions for loan losses and expenses associated with the administration and disposition of nonperforming assets at CFBank. These losses have adversely impacted capital at CFBank and liquidity at the Holding Company. At Dec. 31, 2011, regulatory capital at CFBank was below the amount specified in the regulatory order. Failure to raise capital to the amount specified in the regulatory order and otherwise comply with the regulatory orders may result in additional enforcement actions or receivership of CFBank. Central Federal reported a net loss of $5.42 million in 2011, a net loss of $6.87 million in 2010, and a net loss of $9.89 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $222.13 million in total assets, $197.76 million in total liabilities and $24.36 million in total stockholders' equity. Regulatory Matters On May 25, 2011, Central Federal Corporation and CFBank each consented to the issuance of an Order to Cease and Desist (the Holding Company Order and the CFBank Order, respectively, and collectively, the Orders) by the Office of Thrift Supervision (OTS), the primary regulator of the Holding Company and CFBank at the time the Orders were issued. The Holding Company Order required it, among other things, to: (i) submit by June 30, 2011, a capital plan to regulators that establishes a minimum tangible capital ratio commensurate with the Holding Company's consolidated risk profile, reduces the risk from current debt levels and addresses the Holding Company's cash flow needs; (ii) not pay cash dividends, redeem stock or make any other capital distributions without prior regulatory approval; (iii) not pay interest or principal on any debt or increase any Holding Company debt or guarantee the debt of any entity without prior regulatory approval; (iv) obtain prior regulatory approval for changes in directors and senior executive officers; and (v) not enter into any new contractual arrangement related to compensation or benefits with any director or senior executive officer without prior notification to regulators. The CFBank Order required CFBank to have by Sept. 30, 2011, and maintain thereafter, 8% Tier 1 (Core) Capital to adjusted total assets and 12% Total Capital to risk weighted assets. CFBank will not be considered well-capitalized as long as it is subject to individual minimum capital requirements. CFBank did not comply with the higher capital ratio requirements by the Sept. 30, 2011, required date. CENTRAL GARDEN: S&P Cuts CCR to 'B'; Cuts Debt Rating to 'BB-' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Walnut Creek, Calif.-based Central Garden & Pet Co. to 'B' from 'B+'. The outlook is stable. At the same time, S&P lowered its issue rating on the company's $375 million revolving credit facility due 2016 to 'BB-' from 'BB'. The recovery rating remains '1', which indicates S&P's expectation of very high recovery (90% to 100%) for creditors in the event of a payment default or bankruptcy. "We also lowered our issue rating on the company's $450 million senior subordinated notes due 2018 to 'CCC+' from 'B'. We revised the recovery rating on the notes to '6' from '5', which indicates our expectation of negligible recovery (0% to 10%) for noteholders in the event of a payment default or bankruptcy," S&P said. As of Sept. 29, 2012, the company had $449.8 million in reported debt outstanding. The downgrade reflects Standard & Poor's assessment that Central Garden & Pet's business risk profile has worsened to "vulnerable" from "weak." "The company shows a continued inability to raise prices sufficiently to protect margin and we believe transformation- related expenses will continue over the next several years," said Standard & Poor's credit analyst Brian Milligan. "Also, the company is vulnerable to the decisions of its top five customers, which represented about 45% of fiscal 2012 revenue." The financial risk profile remains "aggressive," based on Standard & Poor's forecast for credit ratios to remain weak, S&P's opinion that financial policy is "aggressive," and its view that the liquidity profile remains "less than adequate." The outlook is stable, which reflects S&P's forecast for credit ratios to remain near recent levels even though it believes the company will remain vulnerable to the decisions of its top customers. "We could lower the ratings if the liquidity profile worsens to "weak" from "less than adequate," possibly due to the inability to repay peak revolver borrowing, which could result in a covenant breach, especially if peak revolver borrowing meaningfully exceeds our forecast," S&P said. While unlikely over the next year, S&P could raise the ratings if its assessment of the company's business risk profile improves to "weak," which could follow a rise in margins to 2009 and 2010 levels, including gross margin above 35%. This could occur through the successful execution of the company's transformation plan. CENTRAL EUROPEAN: Major Investor Junks Revised Deal with RTL ------------------------------------------------------------ Mark Kaufman, the second largest shareholder of Central European Distribution Corporation, sent a letter dated Jan. 16, 2013, to the investors, Chairman of the Board of Directors and members of the Board of Directors of CEDC protesting CEDC's revised deal with Roust Trading Ltd. As reported by the TCR on Jan. 7, 2013, CEDC has agreed to a revised transaction with Russian Standard (through its affiliate, Roust Trading Ltd.). The agreement, among other things, addresses the ongoing management of CEDC, with directors nominated by Russian Standard taking responsibility for CEDC's operations through a newly-formed committee of the CEDC Board of Directors. Mr. Kaufman withdrew his support for the revised transaction saying the terms of the revised deal no longer deliver a clear and definitive path to resolving CEDC's immediate liquidity crisis. "The original and main reason why I supported a deal with RTL was that it was likely to be the only viable option on the table able to deliver a satisfactory and fast solution in light of the complicated and time-sensitive financial and business problems facing CEDC, including the possible default on the 3% Convertible Senior Notes due 2013," Mr. Kaufman adds. However, Mr. Kaufman maintained, the revised agreement does not present a definitive solution, including funding the repayment of the 2013 Convertible Notes. Mr. Kaufman said the configuration of the Board contemplated by the Term Sheet is questionable, risks concentrating power in the hands of a single stockholder, and denies CEDC the possibility of having suitably experienced directors with independent judgment considering the Company's options and protecting the interests of all stockholders and other stakeholders. Mr. Kaufman intends to apply to the Delaware Court of Chancery for a summary order compelling CEDC to hold an Annual General Meeting at the earliest possible date. In the event that the Company proposes only to re-nominate existing members of the Special Committee, Mr. Kaufman expects to take any and all actions necessary to propose alternate nominees for election at the next Annual General Meeting. "Let me be crystal clear. I have never set out to be a shareholder activist. For more than a year, I have in good faith tried to support the Company in the most effective way possible. But the current situation has pushed me to become more active, especially in light of the Board we find ourselves with today. "And I call on all of CEDC's stockholders to raise their voices. It is time to demonstrate to our largest stockholder that there are other stockholders in CEDC! And it is high time to demonstrate to the Board that it is our Company, not theirs!" A complete copy of the letter is available for free at: http://is.gd/dH04cc About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. Ernst & Young Audit sp. z.o.o., in Warsaw, Poland, expressed substantial doubt about Central European's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that certain of the Company's credit and factoring facilities are coming due in 2012 and will need to be renewed to manage its working capital needs. The Company's balance sheet at Sept. 30, 2012, showed $1.98 billion in total assets, $1.73 billion in total liabilities, $29.44 million in temporary equity, and $210.78 million in total stockholders' equity. Liquidity The Company's Convertible Senior Notes are due on March 15, 2013. The Company has said its current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment of principal on the Convertible Notes and, unless the transaction with Russian Standard Corporation is completed the Company may default on them. The Company's cash flow forecasts include the assumption that certain credit and factoring facilities coming due in 2012 would be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at June 30, 2012. These conditions, the Company said, raise substantial doubt about its ability to continue as a going concern. * * * As reported by the TCR on Aug. 10, 2012, Standard & Poor's Ratings Services kept on CreditWatch with negative implications its 'CCC+' long-term corporate credit rating on U.S.-based Central European Distribution Corp. (CEDC), the parent company of Poland-based vodka manufacturer CEDC International sp. z o.o. "The CreditWatch status reflects our view that uncertainties remain related to CEDC's ongoing accounting review and that CEDC's liquidity could further and substantially weaken if there was a breach of covenants which could lead to the acceleration of the payment of the 2016 notes, upon receipt of a written notice of 25% or more of the noteholders," S&P said. As reported by the TCR on Jan. 16, 2013, Moody's Investors Service has downgraded the corporate family rating (CFR) and probability of default rating (PDR) of Central European Distribution Corporation (CEDC) to Caa3 from Caa2. "The downgrade follows CEDC announcement on the 28 of December that it had agreed with Russian Standard a revised transaction to repay its $310 million of convertible notes due March 2013 which, in Moody's view, has increased the risk of potential loss for existing bondholders", says Paolo Leschiutta, a Moody's Vice President - Senior Credit Officer and lead analyst for CEDC. CHEROKEE SIMEON: Court Approves Elliott Greenleaf as Counsel ------------------------------------------------------------ Cherokee Simeon Venture, I, LLC sought and obtained approval from the U.S. Bankruptcy Court for permission to employ Elliott Greenleaf as counsel. Cherokee Simeon Venture, I, LLC, is an AstraZeneca Plc affiliate that owns a contaminated former acid-factory site in Richmond, California. Cherokee Simeon sought Chapter 11 protection (Bankr. D. Del. Case No. 12-12913) on Oct. 23, 2012. Cherokee Simeon disclosed $33,600,000 in assets and $17,954,851 in debts in its schedules. Rafael Xavier Zahralddin-Aravena, Esq., at Elliott Greenleaf represents the Debtor. CHESAPEAKE STEAK: 3rd Cir. Affirms Russo Conviction on Wire Fraud ----------------------------------------------------------------- The U.S. Court of Appeals for the Third Circuit affirmed an order convicting Bryan Russo on one count of wire fraud following a jury trial. Mr. Russo took an appeal, arguing that the wire fraud count was improperly joined under Rule 8(a) of the Federal Rules of Criminal Procedure with the remaining three counts of the Superseding Indictment. Alternatively, Mr. Russo contends that the District Court abused its discretion in declining to sever the counts pursuant to Rule 14(a) of the Federal Rules of Criminal Procedure. In 2001, Mr. Russo and two associates purchased the Chesapeake Steak & Seafood Restaurant. By 2005, the Chesapeake had filed for Chapter 11 bankruptcy. Following the bankruptcy filing, Mr. Russo's mother, Karen Russo, arranged to purchase the restaurant, but Mr. Russo continued to manage its daily operations. In early 2006, the Chesapeake continued to experience financial difficulties and was in need of working capital. Mr. Russo Appellant was referred to Dennis Lint, a loan broker and former police officer. Mr. Lint arranged for Karen Russo to obtain financing from Financial Pacific Leasing, LLC, under a complicated equipment leasing agreement. Financial Pacific was told that the agreement would operate in the following manner: Financial Pacific would pay $32,000 to purchase 160 chairs from a company called TNT Equipment, and TNT Equipment would deliver the chairs to the Chesapeake. The Chesapeake would then lease the chairs from Financial Pacific with the option of purchasing the chairs at the end of the lease period. TNT Equipment never delivered the chairs to the Chesapeake. Government prosecutors take the position that the chairs never existed, while Mr. Russo contends that the chairs were already owned by Karen Russo and in the Chesapeake's inventory prior to the arrangement with Financial Pacific. Regardless, the Government elicited testimony from both Mr. Lint and an official with Financial Pacific that Mr. Russo perpetuated the scheme by falsely confirming in a telephone call with Financial Pacific that the chairs had been delivered from TNT Equipment to the Chesapeake. It was only after this phone confirmation that Financial Pacific granted final approval of the agreement. Mr. Lint testified that Mr. Russo also advanced the scheme by providing Mr. Lint with a falsified income tax return for Karen Russo, which Mr. Lint submitted to Financial Pacific in support of the financing application. Ultimately, Financial Pacific issued a payment of $32,000 to TNT Equipment, and TNT Equipment remitted $28,428 of this amount back to the Chesapeake. Despite this additional capital, the Chesapeake continued to struggle and eventually closed in December 2006. By this point, the mortgage lender for the property had already initiated foreclosure proceedings and a sheriff's sale was scheduled for Jan. 8, 2007. After Karen Russo notified the lender of efforts being made to locate a buyer for the property, the sale was postponed until Feb. 5, 2007. On the evening of Jan. 30, 2007, a fire burned the Chesapeake to the ground. The fire was later determined to be incendiary. Mr. Russo submitted a claim to the Chesapeake's insurance carrier, Mid-Continent Insurance Company and, after an extensive investigation, Mid-Continent agreed to pay the claim. In June 2009, Mr. Russo was charged with one count of arson, in violation of 18 U.S.C. Sec. 844(i), and two counts of mail fraud, in violation of 18 U.S.C. Sec. 1341, with the latter two counts stemming from the insurance claim made to Mid-Continent. In August 2009, the Government filed a Superseding Indictment, which added a charge of wire fraud, under 18 U.S.C. Sections 1343 & 2, in connection with the lease arrangement with Financial Pacific. In a pretrial motion, Mr. Russo moved to sever the wire fraud count from the other counts of the Superseding Indictment, arguing that joinder was improper under Rule 8(a), or in the alternative, that severance was warranted pursuant to Rule 14(a) because prejudice would result from a consolidated trial on the counts. Judge Thomas L. Ambrose, then presiding over the case, denied Mr. Russo motion. A four-day trial commenced on Jan. 18, 2011, presided over by Circuit Judge Thomas Hardiman, sitting by designation. At the close of trial, Mr. Russo moved for a mistrial, citing the same misjoinder and severance grounds put forward in his pretrial motion. Judge Hardiman denied the motion. The jury returned a verdict of guilty on the wire fraud count, but not guilty on the arson and mail fraud counts. Mr. Russo was subsequently sentenced by Judge Ambrose to five years' probation with eight months' home detention. On appeal, Mr. Russo renews his argument that the wire fraud count was erroneously joined with the other counts of the Superseding Indictment; alternatively, he contends that it should have been severed from those counts as a matter of discretion. The Hon. A. Wallace Tashima, Senior Judge of the U.S. Court of Appeals for the Ninth Circuit, sitting by designation, who penned the Third Circuit's opinion, said there is overwhelming evidence of Mr. Russo's knowing participation in the wire fraud scheme. In particular, there was credible testimony from multiple witnesses that Mr. Russo falsely confirmed in a phone conversation with Financial Pacific that TNT Equipment had delivered chairs to the Chesapeake. The District Court also gave an appropriate limiting instruction to the jury, instructing it that it must separately consider the evidence for each offense and not allow its verdict on any offense to influence its decision on the others. "We presume that a jury follows such instructions and therefore view the instructions as "persuasive evidence" that the joinder of counts did not prejudice Appellant," said Judge Tashima. Judge Tashima also held that the jury's acquittal of Mr. Russo on the arson and mail fraud counts is a compelling indication that it was able to compartmentalize these charges from the wire fraud count. Based on the totality of these factors, the Third Circuit concluded that Mr. Russo did not suffer actual prejudice as a result of any misjoinder. The other members of the three-judge panel are Judge Ambro and Judge Joseph A. Greenaway, Jr. The case is, UNITED STATES OF AMERICA, v. BRYAN K. RUSSO, Appellant, No. 11-3077 (3rd Cir.). A copy of the Third Circuit's Jan. 17 Opinion is available at http://is.gd/sGnAuTfrom Leagle.com. CHRYSLER GROUP: Nears Deal with Banco Santander for Financing ------------------------------------------------------------- Christina Rogers and Christopher Bjork, writing for The Wall Street Journal, reported that Chrysler Group LLC is getting close to striking a deal with Spanish lender Banco Santander SA to establish an in-house financing arm through a joint venture, to be called Chrysler Capital, according to people familiar with the plan. The new lending unit will provide financing for consumers and dealers, replacing Ally Financial Inc., which is now Chrysler's preferred lender, the report said. The deal will be similar to an agreement that Italy's Fiat SpA, the majority owner of Chrysler, has in Europe with the French bank Credit Agricole SA, these people said, according to WSJ. WSJ related people close to the discussions said that Chrysler and Santander have signed a term sheet and that the deal could be finalized within the next couple of weeks. A Chrysler spokesman declined to comment, according to the report. WSJ recalled that since exiting bankruptcy protection in 2009, Chrysler has relied on Ally to provide retail loans and to finance leases and credit for dealers to stock new-car inventory, a service known as floor-plan financing. As part of its 2009 restructuring, it gave up its struggling finance unit, Chrysler Financial. According to WSJ, the joint venture would be established with Banco Santander's fast-growing U.S. car-finance unit, Santander Consumer USA. The bank is prepping the U.S. unit for an initial public offering, which it hopes to carry out in the first half of this year, people with knowledge of the matter told WSJ in November. Several years ago, Chrysler partnered with Santander's U.S. unit to offer low-cost financing to so-called sub-prime borrowers, or customers with credit scores below 650. The deal with Santander marks a change in strategy for Chief Executive Sergio Marchionne, who had previously said there was no need for an in-house lender, WSJ noted. Last year, Chrysler told Ally it would let its agreement with the auto lender lapse on April 1, 2013, the report said. Chrysler had been talking to several other major lenders, including J.P. Morgan Chase & Co. In November, Chrysler advanced talks with Santander, the Journal reported, citing people familiar with the discussion. Chrysler also confirmed at the time that it had entered into an exclusive 30-day negotiating period with a lender, but it didn't specify which one, WSJ recalled. Chuck Eddy, a Chrysler dealer in Youngstown, Ohio, told WSJ that he welcomes having more options but that he plans to stick with Ally even if Chrysler decides to go with another lender. "Ally will always be King Kong because they provide the best service and a full line of service," said Mr. Eddy, who also sits on the Chrysler National Dealer Council. Other major auto makers such as General Motors Co. and Toyota Motor Corp. have in-house lenders that help provide customers with better finance rates and ensure credit availability during economic downturns, WSJ noted. Such lenders can also be a valuable source of profit. In the U.S., Santander is still a relatively small player in the auto-financing market, having only entered the car-loan business in 2006, when it bought subprime-lender Drive, WSJ said. To gain scale, it later added car loans from HSBC Holdings PLC and Citigroup Inc. By expanding its unit in the U.S., parent Banco Santander is trying to emulate the strategy it followed in Europe, where it is now among the top auto lenders, according to WSJ. In the U.S., it offers loans through more than 13,000 car dealers and holds a portfolio of about $18 billion. Prior to bankruptcy, Chrysler had Chrysler Financial, and both were then owned by investment-fund Cerberus Capital Management, WSJ noted. In 2009, the U.S. government decided not to provide funding to Chrysler's finance unit and instead created the arrangement with Ally Financial, the former General Motors Acceptance Corp., making it Chrysler's preferred lender. Auburn Hills, Mich.-based Chrysler Group LLC, a Delaware limited liability company, designs, engineers, manufactures, distributes and sells vehicles under the brand names Chrysler, Jeep, Dodge and Ram. The Company's current members are Fiat, which holds a 58.5 percent ownership interest in the Company, and the United Auto Workers' Retiree Medical Benefits Trust, or the VEBA Trust, which holds the remaining ownership interest in the Company. CLEAR CHANNEL: Bank Debt Trades at 15% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications, Inc., is a borrower traded in the secondary market at 85.21 cents-on-the-dollar during the week ended Friday, Jan. 18, 2013, an increase of 0.92 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 30, 2016, and carries Moody's Caa1 rating and Standard & Poor's CCC+ rating. The loan is one of the biggest gainers and losers among 193 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. For the six months ended June 30, 2012, the Company reported a net loss attributable to the Company of $182.65 million on $2.96 billion of revenue. Clear Channel reported a net loss of $302.09 million on $6.16 billion of revenue in 2011, compared with a net loss of $479.08 million on $5.86 billion of revenue in 2010. The Company had a net loss of $4.03 billion on $5.55 billion of revenue in 2009. The Company's balance sheet at June 30, 2012, showed $16.45 billion in total assets, $24.31 billion in total liabilities, and a $7.86 billion total shareholders' deficit. Bankruptcy Warning At March 31, 2012, the Company had $20.7 billion of total indebtedness outstanding. The Company said in its quarterly report for the period ended March 31, 2012, that its ability to restructure or refinance the debt will depend on the condition of the capital markets and the Company's financial condition at that time. Any refinancing of the Company's debt could be at higher interest rates and increase debt service obligations and may require the Company and its subsidiaries to comply with more onerous covenants, which could further restrict the Company's business operations. The terms of existing or future debt instruments may restrict the Company from adopting some of these alternatives. These alternative measures may not be successful and may not permit the Company or its subsidiaries to meet scheduled debt service obligations. If the Company and its subsidiaries cannot make scheduled payments on indebtedness, the Company or its subsidiaries, as applicable, will be in default under one or more of the debt agreements and, as a result the Company could be forced into bankruptcy or liquidation. * * * As reported in the TCR on Oct. 17, 2012, Fitch Ratings has affirmed the 'CCC' Issuer Default Rating (IDR) of Clear Channel Communications, Inc. The Rating Outlook is Stable. Fitch's ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2016; the considerable and growing interest burden that pressures FCF; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. COLLEGE BOOK: Claims Bar Date Set for Feb. 28 --------------------------------------------- Judge Marian F. Harrison set Feb. 28, 2013, as the deadline to file proofs of claim in the Chapter 11 case of College Book Rental Company LLC. Four creditors filed an involuntary Chapter 11 bankruptcy petition against Murray, Kentucky-based College Book Rental Company, LLC (Bankr. M.D. Ky. Case No. 12-09130) in Nashville on Oct. 4, 2012. Bankruptcy Judge Marian F. Harrison oversees the case. The petitioning creditors are represented by Joseph A. Kelly, Esq., at Frost Brown Todd LLC. The petitioning creditors are David Griffin, allegedly owed $15 million for money loaned; Commonwealth Economics, allegedly owed $15,000 for unpaid services provided; John Wittman, allegedly owed $158 for unpaid services provided; and CTI Communications, allegedly owed $21,793 for unpaid services provided. An agreed order for relief under Chapter 11 was entered on Oct. 15, 2012. Robert H. Waldschmidt was appointed as trustee the next day. COMMUNITY FIRST: Martin Maguire Named to Boards of Directors ------------------------------------------------------------ The boards of directors of Community First, Inc., and of its wholly owned bank subsidiary, Community First Bank & Trust met and appointed Martin Maguire to each of the boards of directors of the Company and the Bank to fill vacancies created by the death of Fred C. White. In accordance with the bylaws of the Company and the bylaws of the Bank, Mr. Maguire will serve as a director until the next annual meeting of shareholders or until his successor is elected and qualified. Mr. Maguire was also appointed to the Audit Committee of the Company and several other committees of the Bank. Mr. Maguire is a licensed CPA in Tennessee and is a partner of Brown & Maguire CPAs, PLLC. He is a member of the Tennessee Society of CPAs, and The American Institute of Certified Public Accountants. Mr. Maguire also serves on the board of directors of a local non-profit organization and as treasurer for his church. Mr. Maguire is a graduate of Southern Illinois University with a bachelor's degree in Accounting. He has over 14 years' experience in both public accounting and industry and has worked in both regional and national accounting firms. In addition, Mr. Maguire previously served as Chief Financial Officer of a mid-sized general contractor. There are no arrangements or understandings between Mr. Maguire and any other persons pursuant to which he was selected as a director. Additionally, there are no related party transactions involving Mr. Maguire and the Company or the Bank that would require disclosure under Item 404(a) of Regulation S-K (17 CFR 229.404(a)) in connection with his appointment. Mr. Maguire will receive compensation in accordance with the Company's existing compensation arrangements for non-employee directors. Mr. Maguire will also be eligible to receive equity-based awards issued under the Company's equity incentive plans. About Community First Columbia, Tennessee-based Community First, Inc., is a registered bank holding company under the Bank Holding Company Act of 1956, as amended, and became so upon the acquisition of all the voting shares of Community First Bank & Trust on Aug. 30, 2002. An application for the bank holding company was approved by the Federal Reserve Bank of Atlanta (the "FRB") on Aug. 6, 2002. The Company was incorporated under the laws of the State of Tennessee as a Tennessee corporation on April 9, 2002. After auditing the Company's 2011 results, Crowe Horwath LLP, in Brentwood, Tennessee, expressed substantial doubt about Community First's ability to continue as a going concern. The independent auditors noted that the Company's bank subsidiary, Community First Bank & Trust, is not in compliance with a regulatory enforcement action issued by its primary federal regulator requiring, among other things, a minimum Tier 1 Leverage capital ratio at the Bank of not less than 8.5%, a minimum Tier 1 capital to risk-weighted assets ratio of not less than 10.0% and a minimum Total capital to risk-weighted assets ratio of not less than 12.0%. "The Bank's Tier 1 Leverage capital ratio was 4.92%, its Tier 1 capital to risk-weighted assets ratio was 7.22% and its Total-capital to risk weighted assets ratio was 8.51% at Dec. 31, 2011. Continued failure to comply with the regulatory enforcement action may result in additional adverse regulatory action." The Company reported a net loss of $15.0 million on $19.6 million of net interest income (before provision for loan losses) in 2011, compared with a net loss of $18.2 million on $21.0 million of net interest income (before provision for loan losses) in 2010. Total non-interest income was $3.4 million for 2011, compared with $4.7 million for 2010. The Company's balance sheet at Sept. 30, 2012, showed $560.15 million in total assets, $551.51 million in total liabilities, and $8.64 million in total shareholders' equity. CONTOURGLOBAL LP: S&P Assigns 'B+' Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating (CCR) to ContourGlobal L.P. (CG), a developer of electric power generation and district heating assets. At the same time, S&P withdrew its preliminary 'B+' corporate credit rating on ContourGlobal Power Holdings S.A. (CGPH), a 100% owned subsidiary of CG that was to benefit from a guarantee from both CG and its project-owning subsidiaries. S&P also withdrew its preliminary 'BB-' rating on CGPH's proposed $350 million senior secured notes due 2019 after the company decided not to proceed with that debt issuance. The outlook on the CCR is stable. The rating reflects the application of S&P's project developer methodology. S&P views the financial profile to be "aggressive" and have assigned a quality of cash flow (QCF) score of 8, equating to a weak business profile. "The rating reflects our view of the portfolio's significant concentration risk, CG's reliance on substantial distributions from jurisdictions with considerable regulatory and operating uncertainties, and political uncertainty in many regions of operations," said Standard & Poor's credit analyst Ben Macdonald. The stable outlook reflects S&P's view of the portfolio's diversified nature in terms of geography, technology, and counterparty exposure. CSD LLC: Withdraws Motion to Tap Lionel Sawyer as Special Counsel ----------------------------------------------------------------- CSD LLC provided notice in Bankruptcy Court of its withdrawal of the application for an order authorizing the employment of Lionel Sawyer & Collins as special counsel. 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. DCP LLC: S&P Affirms 'B' Corporate Credit Rating ------------------------------------------------ Standard & Poor's Ratings Services affirmed its ratings on Santa Monica, Calif.-based TV production company dcp LLC (the parent of Dick Clark Productions Inc.). This includes the 'B' corporate credit rating and the 'B+' issue-level rating on the 10.75% senior secured notes due 2015. The recovery rating on this debt remains '2'. The rating outlook is negative. The rating action follows dcp's unsuccessful 101% change-of- control put offer to its bondholders following the company's sale to a new group of investors, including Guggenheim Partners, Mandalay Entertainment, and Mosaic Media Investment Partners. The offer expired on Nov. 26, 2012, with no redemption requests. The acquisition of dcp was completed on Sept. 28, 2012, with no additional debt incurred. S&P has removed its ratings from CreditWatch, where it placed them with negative implications on Sept. 6, 2012, when dcp announced the proposed sale to the new sponsor group. Standard & Poor's Ratings Services' rating on Santa Monica, Calif.-based TV production company dcp LLC, parent of Dick Clark Productions Inc., reflects the company's small portfolio of live- event, high-profile TV programming and high leverage. Standard & Poor's Ratings Services views the company's business risk profile as "weak" (based on its criteria), given its small program portfolio of only four major annual live TV programs and one TV series. Its weak EBITDA coverage of interest and high debt leverage underpin its assessment of its financial risk profile as "highly leveraged." "The ratings reflect the risk that an unfavorable outcome of ongoing litigation with the Hollywood Foreign Press Assn. (HFPA) could hurt dcp's revenue and EBITDA. On Nov. 17, 2010, the HFPA filed a lawsuit accusing Dick Clark Productions of trying to misappropriate rights to the Golden Globe Awards program by unilaterally entering into a new broadcast contract with NBC. On April 30, 2012, the judge overseeing the case ruled in dcp's favor. However, on June 14, 2012, the HFPA filed a motion seeking an appeal of that ruling. That appeal has yet to be heard, although Dick Clark Productions produced The 70th Annual Golden Globe Awards on Jan. 13, 2013. In S&P's opinion, an unfavorable outcome for dcp could weaken the company's future revenue and EBITDA, given the Golden Globes' importance as one of the four key live TV events the company produces," S&P noted. Most of the company's live TV events are aired once a year. Major programs include the "Golden Globe Awards," "American Music Awards," "Academy of Country Music Awards," "New Year's Rockin' Eve," and the series "So You Think You Can Dance." Live event programming typically attracts strong advertising, because fewer people record the shows to view them at a later date. As a result, networks can charge higher ad rates for those programs and are willing to pay sizable license fees to the production companies for the broadcast rights. Most of dcp's shows get good audience ratings in their time slots, but viewership has fluctuated over the past several years. Erosion of audience ratings over the long term could eventually hurt dcp's licensing fee revenue, though most contracts have recently been renewed at significantly higher fees for dcp. The company is planning to develop new programming and aims to increase the profitability of its current shows through increased sponsorships and ancillary events, in addition to higher licensing fees. The success of these initiatives is not predictable. DEWEY & LEBOEUF: JPMorgan, Trustee Object to Bankruptcy Fee Claims ------------------------------------------------------------------ Ama Sarfo of BankruptcyLaw360 reported that JPMorgan Chase Bank NA and the U.S. trustee on Thursday argued that professional firms seeking more than $10 million for their work in the Dewey & LeBoeuf LLP bankruptcy are charging too much, telling a New York bankruptcy judge that some claims should be trimmed. JPMorgan contends that the proposed amounts exceed the bankruptcy budget, while the trustee says luxury hotel stays and thousands spent on dining mean some of the claims should be reduced, the report said. 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 filed a Chapter 11 Plan of Liquidation and an accompanying Disclosure Statement on Nov. 21, 2012. It filed amended plan documents on Dec. 31, in an attempt to address objections lodged by various parties. A second iteration was filed Jan. 7, 2013. The plan is based on a proposed settlement between secured lenders and Dewey's official unsecured creditors' committee. It also incorporates a settlement approved by the bankruptcy court in October where 440 former partners will receive releases in return for $71.5 million in contributions. DEWEY & LEBOEUF: Citibank Denied Win in Ex-Partner Loan Fight ------------------------------------------------------------- Keith Goldberg of BankruptcyLaw360 reported that a New York federal judge on Wednesday refused to grant Citibank NA summary judgment in a dispute with a former Dewey & LeBoeuf LLP partner who defaulted on a loan, but questioned the lawyer's claims that the bank knew of Dewey's deteriorating financial situation when it made the loan. U.S. District Judge Louis L. Stanton based his ruling on the preliminary submissions in the case, the report said. 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 filed a Chapter 11 Plan of Liquidation and an accompanying Disclosure Statement on Nov. 21, 2012. It filed amended plan documents on Dec. 31, in an attempt to address objections lodged by various parties. A second iteration was filed Jan. 7, 2013. The plan is based on a proposed settlement between secured lenders and Dewey's official unsecured creditors' committee. It also incorporates a settlement approved by the bankruptcy court in October where 440 former partners will receive releases in return for $71.5 million in contributions. DIAL GLOBAL: Obtains $5MM Loan; Waivers Extended Until Feb. 28 -------------------------------------------------------------- Dial Global, Inc., further obtained limited waivers under its credit facilities pursuant to which the lenders agreed to extend their respective waiver periods with respect to certain events of noncompliance under the Credit Facilities to Feb. 28, 2013. In addition, certain of the lenders agreed to provide the Company with supplemental borrowing capacity of up to $5 million under the Second Lien Term Loan Facility, which Supplemental Facility will mature on Feb. 28, 2013. As previously reported, Dial Global obtained an extension of the waiver period with respect to certain events of noncompliance under the Credit Facilities to Jan. 15, 2013. In connection with the Waivers, the Company entered into a Third Amendment to Intercreditor Agreement implementing the provisions of the Waivers and the Supplemental Facility. The Company is engaged in continuing discussions with its First Lien Lenders and Second Lien Lenders regarding the terms of a restructuring of its obligations under its Credit Facilities. "Although the Company believes that the parties have established a framework for a potential restructuring of the Company's obligations under its Credit Facilities, there can be no assurance that the Company and its lenders will be able to reach agreement regarding a restructuring on terms acceptable to the Company and its lenders prior to the termination of the Waivers, or at all," the Company said in the regulatory filing with the SEC. Copies of the Waiver Agreements are available at: http://is.gd/EOtXtB http://is.gd/48SsS0 About Dial Global Dial Global, Inc., headquartered in New York City, is an independent, full-service network radio company that distributes, produces, or syndicates programming and services to more than 8,500 radio stations nationwide. The Company produces and distributes over 200 news, sports, music, talk and entertainment radio programs, services and digital applications, as well as audio content from live events, turn-key music formats (the 24/7 Radio Formats), prep services, jingles and imaging. In addition, the Company is the largest sales representative for independent third party providers of audio content. The Company has no operations outside the United States, but sells to customers outside of the United States. The Company's balance sheet at Sept. 30, 2012, showed $380.9 million in total assets, $385.2 million in total liabilities, $10.5 million of Series A Preferred Stock, and a stockholders' deficit of $14.8 million. "...[I]f an event of default under the Credit Facilities occurs and results in an acceleration of the Credit Facilities, a material adverse effect on us and our results of operations would likely result or we may be forced to (1) attempt to restructure our indebtedness, (2) cease our operations or (3) seek protection under applicable state or federal laws, including but not limited to, bankruptcy laws. If one or more of foregoing events were to occur, this would 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 Sept. 30, 2012. DRAGON SYSTEMS: Founders "Scapegoating" Over Sale, Says Goldman --------------------------------------------------------------- Janelle Lawrence, writing for Bloomberg News, reported that a Goldman Sachs Group Inc. (GS) lawyer argued to jurors that the founders of speech-recognition pioneer Dragon Systems Inc. are scapegoating the investment bank for their own mistakes in a $580 million all-stock sale rendered worthless when the buyer was exposed as a fraud. In closing arguments on Jan. 17 in Boston federal court in a lawsuit accusing Goldman Sachs of negligence, the attorney said Dragon co-founder Janet Baker and Chief Financial Officer Ellen Chamberlain ignored the bank's advice to hire accountants to further vet Belgium-based suitor Lernout & Hauspie Speech Products NV and rushed the deal amid Dragon's cash-flow problems in 2000, the report said. "They are making Goldman Sachs into the guarantor of this transaction when no one suspected fraud," Bloomberg said, citing the bank's lawyer, John Donovan Jr., as saying. "That's not turning Goldman into a guarantor. That's turning Goldman into a scapegoat." Donovan blamed Baker, also Dragon's former chief executive officer, for negotiating a change from a half-cash/half-stock deal to an all-stock deal without consulting the banking team, Bloomberg added. "Look, if you decide to play investment banker by yourself, you're in no position to criticize the investment banker you hired in the process," Donovan said in court. Lawyers for Dragon argued New York-based Goldman Sachs committed gross negligence, committed misrepresentation through key omissions and should have stopped the deal because of unanswered questions about Lernout & Hauspie's revenue, Bloomberg related. ?Bottom Line' "Goldman can dress this up as much as they can, but the bottom line is these guys didn't do anything," Alan Cotler, a lawyer for Janet Baker and her husband, Jim, told the jury, according to Bloomberg. The lawyer added that Goldman Sachs's four-man investment team, which included a 22-year-old banker and a 25-year-old, was inexperienced, unsupervised and unfocused on a small client such as Dragon. "They were so busy they didn't have enough bankers to do deals," Cotler said, describing a time of voluminous mergers and acquisitions, according to the report. "Dragon was small potatoes and that's what they got, small potatoes from Goldman Sachs." Dragon paid Goldman Sachs $5 million. Goldman Sachs intentionally misrepresented that the bank had an analyst monitoring Lernout & Hauspie's earnings when it had stopped covering the company at the end of 1999, Cotler said, Bloomberg further related. L&H posted a suspicious 1,500 percent increase in Asian revenue in February 2000. Suburban Home He said Janet Baker, who with her husband developed the technology that started the company in their suburban Boston home in 1982, and Chamberlain became frustrated with the Goldman Sachs team for not doing due diligence in the deal, the report said, citing Mr. Cotler. "This case is not about accounting. Goldman Sachs wants to use the word accounting a thousand times because they don't want you to think about investment banking," Cotler said, the report related. Bloomberg said jurors began hearing the case in December before U.S. District Judge Patti Saris. In addition to the Bakers' claims, the jury is weighing negligence claims lodged by Paul G. Bamberg and Robert Roth, two other Dragon founders who held minority shares in the company, according to the report. Jurors were scheduled to receive instructions on Jan. 17 and begin deliberations. "The evidence shows Goldman failed as a professional team," said attorney Jack R. Pirozzolo, who represents Bamberg and Roth, Bloomberg said. Donovan, Goldman Sachs's attorney, repeatedly highlighted a Feb. 29, 2000, memo from the bank to Dragon advising the company to hire Arthur Andersen LLP to do comprehensive accounting of Lernout & Hauspie, Bloomberg pointed out. More Diligence Dragon didn't tap Arthur Andersen for the work and CFO Chamberlain maintained Goldman Sachs should do more due diligence, he said, Bloomberg said. Witnesses for Goldman Sachs testified that Chamberlain told Dragon's board due diligence was completed and they signed the deal. "Here's Goldman screaming ?Do the work!' and they're being sued because they didn't scream louder?" Donovan said, according to Bloomberg. Goldman Sachs could have saved Dragon from the disastrous deal if the bank had an analyst monitoring Lernout & Hauspie in 2000, Dragon's lawyers argued, Bloomberg noted. Instead, the bank put Charles Elliott, its London-based international, European technology research analyst, on a conference call with Dragon leaders in February, in which he was bullish on how the deal might affect the technology market. In a videotaped deposition played for the jury, Elliott said he didn't know about the soaring L&H Asian revenue, later proved a fraud, and would have been suspicious of it if he had, Bloomberg related. First Learned Elliott, according to Bloomberg, learned of the revenue for the first time when Cotler showed him an old newspaper article during a deposition. Cotler blamed the head of the Goldman Sachs team, Richard Wayner, for not talking to Elliott about media reports on L&H's revenue before the conference call and sending Elliott to do research. "Charles Elliott could have prevented this. Rich Wayner could have prevented this," Cotler told the jury, Bloomberg related. Goldman Sachs's lawyer argued that Dragon's leader knew about the suspicious Asia revenue, Bloomberg ssaid. The company was in such tough financial shape that Dragon would have gone forward with the deal anyway, Donovan said. Dragon has already collected $70 million in settlements with other companies involved in the deal, according to the report. If the jury finds Goldman negligent and awards damages, $70 million will be deducted from the total. The case is Baker v. Goldman Sachs & Co., 09-cv-10053, U.S. District Court, District of Massachusetts (Boston). The Goldman Sachs Group, Inc., together with its consolidated subsidiaries, is a global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world. DUNE ENERGY: Amends Stock Option Awards of Two Former Directors --------------------------------------------------------------- Dune Energy, Inc., entered into separate amendments to the Non- Qualified Stock Option Award Agreement with Stephen Kovacs and Emanuel Pearlman, former directors of the Company. Mr. Kovacs resigned on Jan. 8, 2013, while Mr. Pearlman resigned on Jan. 14, 2013. The amendments provide (i) that the options granted by the Company to Messrs. Kovacs and Pearlman will vest in their entirety as of date of their resignations, (ii) that Messrs. Kovacs and Pearlman will have two years from the date of their resignations to exercise the options, and (iii) for a mutual release of claims between the Company and Messrs. Kovacs and Pearlman. The Company's management is not aware of any disagreement between the Company and Mr. Pearlman on any matter relating to the Company's operations, policies or practices. About Dune Energy Dune Energy, Inc. (NYSE AMEX: DNE) -- http://www.duneenergy.com/ -- is an independent energy company based in Houston, Texas. Since May 2004, the Company has been engaged in the exploration, development, acquisition and exploitation of natural gas and crude oil properties, with interests along the Louisiana/Texas Gulf Coast. The Company's properties cover over 90,000 gross acres across 27 producing oil and natural gas fields. The Company reported a net loss of $60.41 million in 2011, compared with a net loss of $75.53 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $241.08 million in total assets, $118.88 million in total liabilities and $122.19 million in total stockholders' equity. * * * As reported by the TCR on Dec. 27, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on Dune Energy Inc. to 'SD' (selective default) from 'CC'. "The rating actions follow the company's announcement that it has completed the exchange offer for its 10.5% senior notes due 2012, which we consider a distressed exchange and tantamount to a default," said Standard & Poor's credit analyst Stephen Scovotti. "Holders of $297 million of principle amount of the senior secured notes exchanged their 10.5% senior secured notes for common stock, which in the aggregate constitute 97.0% of Dune's common stock post-restructuring, and approximately $49.5 million of newly issued floating rate senior secured notes due 2016. We consider the completion of such an exchange to be a distressed exchange and, as such, tantamount to a default under our criteria." In the Jan. 2, 2012, edition of the TCR, Moody's Investors Service revised Dune Energy, Inc.'s Probability of Default Rating (PDR) to Caa3/LD from Ca following the closing of the debt exchange offer of the company's 10.5% secured notes. Simultaneously, Moody's upgraded the Corporate Family Rating (CFR) to Caa3 reflecting Dune's less onerous post-exchange capital structure and affirmed the Ca rating on the secured notes. The revision of the PDR reflects Moody's view that the exchange transaction constitutes a distressed exchange. Moody's will remove the LD (limited default) designation in two days, change the PDR to Caa3, and withdraw all ratings. DRINKS AMERICAS: Shareholders Cut Number of Directors to Three -------------------------------------------------------------- The holders of the majority of the shares of common stock of Drinks Americas Holdings, Ltd., acting by written consent in lieu of a meeting of the shareholders, voted to decrease the number of directors on the Board to three directors. As a result of the decreased size of the Company's Board of Directors, Fredrick Schulman, Douglas Cole and Jack Kleinert could no longer remain on the Board. On Jan. 15, 2013, Steven Dallas, tendered his resignation from the Board, effective immediately. Mr. Dallas' resignation was not as a result of any disagreements with the Company. On Jan. 16, 2013, the remaining directors, acting by unanimous written consent in lieu of a meeting, elected Mr. Charles Menzies to fill the vacancy created by Mr. Dallas' resignation. Charles Menzies, age 40, is an attorney and entrepreneur and for the last six years served as the Chief Executive Officer of The Menzies Company, Inc., a firm specializing in corporation restructuring for both private and public companies. He is the former Chief Executive Officer of FilmsOn.Com, Inc., ZT3 Technologies, Inc., and Unidose Systems Corporation, Inc. Mr. Menzies is a graduate of University of Southern California and of Stanford Law School. There is no family relationship between Mr. Menzies and any other executive officer or director of the Company. About Drinks Americas Headquartered in Wilton, Conn., Drinks Americas Holdings, Ltd. -- http://www.drinksamericas.com/-- through its majority-owned subsidiaries, Drinks Americas, Inc., Drinks Global, LLC, D.T. Drinks, LLC, and Olifant U.S.A Inc., imports, distributes and markets unique premium wine and spirits and alcoholic beverages associated with icon entertainers, celebrities and destinations, to beverage wholesalers throughout the United States. The Company reported a net loss of $4.58 million on $497,453 of net sales for the year ended April 30, 2011, compared with a net loss of $5.61 million on $890,380 of net sales during the prior year. After auditing the fiscal 2011 financial statements, Bernstein & Pinchuk, in New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses from operations since its inception and has a working capital deficiency. The Company's balance sheet at July 31, 2012, showed $6.24 million in total assets, $4.55 million in total liabilities and $1.68 million in total equity. EASTMAN KODAK: Dodges Pricey Payout in SC Pollution Settlement -------------------------------------------------------------- Juan Carlos Rodriguez of BankruptcyLaw360 reported that a federal bankruptcy judge on Thursday approved a settlement between Eastman Kodak Co. and South Carolina that gives the state only a tiny fraction of the $30 million it had sought for cleanup costs at a former chemical company site. The $42,000 settlement comes after the South Carolina Department of Health and Environmental Control in July asserted a $30 million claim in Kodak's bankruptcy proceedings alleging that Kodak arranged for the disposal of hazardous substances at the Philip Services Corp. site in Rock Hill, S.C., the report said. 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. ELPIDA MEMORY: Clears Hurdle on Way to Micron Deal -------------------------------------------------- Tom Hals of Reuters reported that Elpida Memory Inc. won court approval for technology deals over the objections of U.S. bondholders, who argued the agreements were an attempt to bind the bankrupt chipmaker to a proposed $2.5 billion sale to Micron Technology Inc. A U.S. Bankruptcy Court judge in Delaware found no evidence of collusion or improper motives Thursday in Elpida's technology licensing deals with Micron and a $15 million patent sale to Rambus Inc., according to the Reuters report. U.S. bondholders opposed the deals because they said they would effectively tie Elpida to its proposed sale and were unfairly beneficial to Micron, Reuters related. "The bondholders do not cite any facts to contest the proof that these agreements confer substantial benefits on Elpida's estate," Reuters cited Judge Christopher Sontchi as saying in his 43-page opinion. Elpida, according to Reuters, said it would be able to immediately begin improving its operations thanks to the licensing agreements with Micron. Elpida's lawyers have described the objections to the technology agreements as attacks on the Micron deal itself. The bondholders, led by hedge funds Linden Advisors, Owl Creek Asset Management and Taconic Capital Advisors, have argued Elpida is worth nearly $4 billion, the report pointed out. They have attacked the Micron sale as a sweetheart deal negotiated in secret in Japan, where Elpida's main bankruptcy is taking place. Elpida filed for bankruptcy protection from creditors with a Tokyo court in February and asked the Delaware Bankruptcy Court to protect its U.S. assets soon after, Reuters related. The bondholders presented their own plan for reorganizing Elpida to the Tokyo court; however, the court accepted Elpida's plan for the sale and the bondholders have shifted their fight against the deal to the U.S. Bankruptcy Court in Delaware. Creditors are currently considering the plan to sell the company and have until the end of February to vote on it, Reuters further noted. Elpida would also need approval from the Delaware court. Reuters said the bondholders have complained about the lack of access to the Tokyo court and to information about Elpida in general. Judge Sontchi noted in a footnote in his opinion that "there has been a troubling lack of transparency in this case," Reuters said. Judge Sontchi blamed that partly on differences in U.S. and Japanese law but also on Elpida's representatives who "had to be dragged kicking and screaming into court even though they ultimately were seeking the court's approval of these transactions," according to the report. Elpida, Japan's last maker of dynamic random access memory (DRAM) chips, was undercut by falling chip sales and foreign competition, the report related. Boise, Idaho-based Micron, which is losing money due to a crumbling PC industry, hopes the Elpida deal will create larger economies of scale, the report added. The deal, according to Reuters, would catapult Micron into the No. 2 spot in the global market for DRAM chips, behind Samsung Electronics. Micron's shares rose 8 cents or about 1 percent in early Jan. 17 trading on Nasdaq to $7.75. The stock has risen about 43 percent since the Tokyo court approved the sale in early November. About Elpida Memory Elpida Memory Inc. (TYO:6665) -- http://www.elpida.com/ja/-- is a Japan-based company principally engaged in the development, design, manufacture and sale of semiconductor products, with a focus on dynamic random access memory (DRAM) silicon chips. The main products are DDR3 SDRAM, DDR2 SDRAM, DDR SDRAM, SDRAM, Mobile RAM and XDR DRAM, among others. The Company distributes its products to both domestic and overseas markets, including the United States, Europe, Singapore, Taiwan, Hong Kong and others. The company has eight subsidiaries and two associated companies. After semiconductor prices plunged, Japan's largest maker of DRAM chips filed for bankruptcy in February with liabilities of 448 billion yen ($5.6 billion) after losing money for five quarters. Elpida Memory and its subsidiary, Akita Elpida Memory, Inc., filed for corporate reorganization proceedings in Tokyo District Court on Feb. 27, 2012. The Tokyo District Court immediately rendered a temporary restraining order to restrain creditors from demanding repayment of debt or exercising their rights with respect to the company's assets absent prior court order. Atsushi Toki, Attorney-at-Law, has been appointed by the Tokyo Court as Supervisor and Examiner in the case. Elpida Memory Inc. sought the U.S. bankruptcy court's recognition of its reorganization proceedings currently pending in Tokyo District Court, Eight Civil Division. Yuko Sakamoto, as foreign representative, filed a Chapter 15 petition (Bankr. D. Del. Case No. 12-10947) for Elpida on March 19, 2012. EMMIS COMMUNICATIONS: Has Exchange Offer for Eligible Options ------------------------------------------------------------- Emmis Communications Corporation filed with the U.S. Securities and Exchange Commission a Tender Offer Statement on Schedule TO relating to an offer by the Company to exchange certain outstanding options to purchase shares of the Company's common stock that (i) have an exercise price greater than $2.95 per share, but excluding options with an exercise price of $11.22 per share or $17.45 per share, (ii) were granted under the Company's Equity Compensation Plans and (iii) are held by Eligible Participants. An "Eligible Participant" is a holder of Eligible Options who is either (i) currently an employee of the Company or its subsidiaries, including employees who are officers or members of the Company's board of directors, or (ii) a non-employee member of the Company's board of director. A copy of the Schedule TO is available for free at: http://is.gd/ts8NDT About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company's balance sheet at Aug. 31, 2012, showed $287.53 million in total assets, $258.60 million in total liabilities, $46.88 million in series A cumulative convertible preferred stock, and a $17.94 million total deficit. * * * As reported by the TCR on Oct. 16, 2012, Moody's Investors Service placed the ratings of Emmis Communications Corporation on review for upgrade, including the Company's B3 Corporate Family Rating following the company's earnings release for 2Q12 (ended August 31, 2012) indicating good performance for radio operations and plans to refinance existing high coupon debt facilities. EMMONS-SHEEPSHEAD: Wants Court's Nod to Borrow $5-Mil. from SDF --------------------------------------------------------------- Emmons-Sheepshead Bay Development, LLC, asks the U.S. Bankruptcy Court for the Eastern District of New York for authorization to obtain postpetition financing in the form of the protective advances in the amount of up to $5,000,000 from its secured creditor, SDF 17 Emmons LLC. Proceeds will be used to pay real estate taxes, water and sewer charges and Department of Buildings violations, condominium charges, including post-petition condominium fees and other assets associated with maintaining the Debtor and SDF's interest in the real property located at 3112-3114 Emmons Avenue in Brooklyn, New York, and to fund repair and restoration work to restore the Property to its pre-Hurricane Sandy condition. As security, the Debtor proposes to grant the Lender a superpriority administrative expense claim allowable under Sec. 503(b) of the Bankruptcy Code, subordinate only to fees for the Debtor's professionals not to exceed $150,000 and fees payable to the Office of the United States Trustee. Interest will accrue on the advances at the default rate of 17% per annum. The repayment of the advances and any accrued interest will be due on the later of (1) 90 days from the entry of an order approving the DIP Financing or (2) the merger of the protective advances into the indebtedness to be paid as part of a confirmed plan of reorganization or liquidation in the Debtor's case. SDF's secured claim will be fixed in an amount to include the protective advances made during the bankruptcy period and its repayment terms set forth in the Debtor's proposed plan of reorganization or liquidation. Objection Tracy Hope Davis, the United States Trustee for Region 2, says the Court should deny the motion because, among other things: 1. There is no disclosure as to the SDF 17 Emmons LLC entity and its relationship, if any, to the Debtor. 2. There is no documentation to support the Debtor's representations that the repairs and expenses relating to the Debtor's Property will cost up to $5,000,000. 3. The Property is already subject to mortgages totaling approximately $30,000,000 all of which were assigned to SDF subsequent to the filing of this bankruptcy case. 4. The interest rate and the proposed repayments terms of the advances are onerous given that the Debtor currently has no source of income, and is unlikely to produce an income within 90 days. About the Debtor Emmons-Sheepshead Bay Development LLC, the owner of 49 unsold condominium units on Emmons Avenue in Brooklyn, filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-46321) on Aug. 30, 2012, in Brooklyn. The Debtor said the property is worth $14 million. It has $32.6 million in total liabilities, including $31 million owed to TD Bank N.A., which is secured by first, second and third priority liens on the property. Judge Elizabeth S. Stong presides over the case. Arnold Mitchell Greene, Esq., at Robinson Brog Leinwand Greene et al., serves as the Debtor's counsel. The petition was signed by Jacob Pinson, managing member, Yachad Enterprises, LLC. EMPIRE RESORTS: Gets Approval for Destination Resort Master Plan ---------------------------------------------------------------- EPR Properties together with Empire Resorts, Inc., and its wholly owned subsidiary, Monticello Raceway Management, Inc., received approval from the Town of Thompson Town Board on the Comprehensive Development Plan, SEQRA findings and the Planned Resort Development Text Amendments for the 1,583-acre site of the former Concord Resort. Approval of the CDP and SEQRA findings and the adoption of the Amendments means the joint developments can now move forward with the submission of individual site plan applications, thus initiating the commencement of the build-out of the proposed EPT Concord Resort. The transformative CDP for the EPT Concord Resort is anticipated to create a world-class, four-season destination resort and multi- use residential community, reigniting the Catskill tourist industry which historically supported the regional economy. As a catalyst for economic growth, it will transform the patterns of employment, development and investment in the area. As submitted, the plan includes an indoor water park, 18-hole golf course, hotels, an RV park, and an entertainment village with a cinema and supporting retail, and a Casino Resort (including a harness horse racetrack, grandstand/showroom, simulcast facility, and hotel). In addition, the plan includes a residential village with a mix of unit types including condos, apartments, townhouses and detached single family homes, a civic center, and an active adult residential community. This mix of uses will be connected to abundant open space, via a multi-use trail system. The initial phase of development and construction includes the Casino Resort comprising of an approximately 117-acre development area in the southern portion of the EPT Concord Resort. It is anticipated that construction of the Casino Resort will begin in the spring of 2013. Shortly thereafter, it is anticipated that site plan approvals for both the Golf Phase and select components of the Entertainment Village Phase will be obtained with construction of all three of these elements completed in 2014. The Golf Phase, at approximately 229 acres, will be highlighted by the renovation of the Monster Golf Course by Rees Jones, the "The US Open Doctor," and will also include the construction of the golf clubhouse, golf maintenance building, and the golf cottages. The initial components of the Entertainment Village Phase will likely encompass the development of a movie theater, event field, and approximately 115,000 square feet of commercial retail. With the completion of the Casino Resort, the Golf Course Phase and select components of the Entertainment Village Phase, it is anticipated that over 1,000 new full time equivalent jobs will be created at the site. The direct effect on the local economy from this initial phase is estimated at approximately $290 million annually. For Sullivan County the total annual economic activity that will result from the initial phase of operations alone is estimated at $395 million. After the completion of the initial three elements, subsequent phases will include a residential village, hospitality, commercial, residential and recreational phases utilizing the natural beauty of the entire parcel. The development of the EPR Concord Resort is contingent upon various conditions, including the receipt of necessary governmental approvals and Empire's ability to obtain financing. About EPR Properties EPR Properties is a specialty real estate investment trust (REIT) that invests in properties in select market segments which require unique industry knowledge, while offering the potential for stable and attractive returns. EPR's total investments exceed $3.1 billion and its primary investment segments are Entertainment, Recreation and Education. EPR adheres to rigorous underwriting and investing criteria centered on key industry and property level cash flow standards. EPR believes its focused niche approach provides a competitive advantage, and the potential for higher growth and better yields. Further information is available at www.eprkc.com About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- owns and operates Monticello Casino & Raceway, a video gaming machine and harness racing track and casino located in Monticello, New York, 90 miles northwest of New York City. The Company reported a net loss of $24,000 in 2011, compared with a net loss of $17.57 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $51.98 million in total assets, $25.48 million in total liabilities, and $26.49 million in total stockholders' equity. EVISION SOLAR: Inks Teaming Agreement with Horizon Energy --------------------------------------------------------- Envision Solar International, Inc., entered into a teaming agreement, dated Jan. 1, 2013, with Horizon Energy Group, a leader in microgrid development and implementation including battery storage expertise. The agreement calls on the Parties to work together on an exclusive basis on certain projects to be introduced by either party. Any costs associated with this agreement will be borne by the Party incurring those costs. Compensation for any project will be agreed to on a project by project basis in conjunction with the final scope of each Party on that project and defined in a separate definitive agreement to be signed by each party for that project. A copy of this agreement is available at http://is.gd/hAhUIx About Envision Solar San Diego, Calif.-based Envision Solar International, Inc., is a developer of solar products and proprietary technology solutions. The Company focuses on creating high quality products which transform both surface and top deck parking lots of commercial, institutional, governmental and other customers into shaded renewable generation plants. The Company's balance sheet at Sept. 30, 2012, showed $1.1 million in total assets, $2.7 million in total current liabilities, and a stockholders' deficit of $1.6 million. As reported in the TCR on April 9, 2012, Salberg & Company P.A., in Boca Raton, Fla., expressed substantial doubt about Envision Solar's ability to continue as a going concern. The independent auditors noted that the Company reported a net loss of $2,547,493 and $2,360,851 in 2011 and 2010, respectively, and used cash for operating activities of $1,970,831 and $1,112,794 in 2011 and 2010, respectively. "At Dec. 31, 2011, the Company had a working capital deficiency, stockholders' deficit and accumulated deficit of $2,657,976, $2,482,203 and $22,340,460, respectively." FIELD FAMILY: Exclusive Filing Period Extended Until May 10 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Pennsylvania extended Field Family Associates, LLC's exclusive plan filing period and exclusive solicitation period until May 10, 2013, and July 9, 2013, respectively. This is the first extension of the Debtor's exclusive periods. In its motion, the Debtor related that it has engaged in discussions with multiple third parties who are interested in a potential sale transaction that would be incorporated in a Chapter 11 plan. Management believes that, given additional time, it can successfully propose a confirmable plan, the Debtor stated. About Field Family Five creditors filed an involuntary Chapter 11 bankruptcy petition against King of Prussia, Pa.-based Field Family Associates, LLC (Bankr. E.D. Pa. Case No. 12-16331) on July 2, 2012. On Sept. 6, 2012, a sixth creditor filed a Joinder in the involuntary Chapter 11 Petition. The Court entered an order for relief on Sept. 12, 2012. The Debtor owns and operates a 216-room hotel located at 144-10 135th Steet, in Jamaica, New York. Judge Stephen Raslavich presides over the case. Catherine G. Pappas, Esq., Lawrence G. McMichael, Esq., and Peter C. Hughes, Esq., at Dilworth Paxson LLP, in Philadelphia, Pa., represent the Alleged Debtor as counsel. Ashely M. Chan, Esq., at Hangley Aronchick Segal & Pudlin, in Philadelphia, Pa., represents the petitioning creditors as counsel. The U.S. Trustee appointed a three-member creditors committee. Hangley Aronchick Segal Pudline & Schiller represents the Committee. FEEL GOLF: Incurs $3.4-Mil. Net Loss in 2011 -------------------------------------------- Feel Golf Co., Inc., filed on Jan. 17, 2013, its annual report on Form 10-K ended Dec. 31, 2011. W. T. Uniack & Co. CPA's P.C., in Woodstock, Ga., the Company's independent accountants, noted that the Company has current assets of $522,187 and current liabilities of $365,315. "In addition, the Company has an accumulated deficit of ($15,100,454) and is dependent on at least maintaining current revenue levels. Those conditions raise substantial doubt about the Company?s ability to continue as a going concern." The Company reported a net loss of $3.4 million on $1.4 million of revenues in 2011, compared with a net loss of $5.3 million on $391,594 of revenues in 2010. The Company's balance sheet at Dec. 31, 2011, showed $2.6 million in total assets, $2.5 million in total assets, and stockholders' equity of $141,504. A copy of the Form 10-K is available at http://is.gd/z1JjuJ Sanford, Fla.-based Feel Golf Co., Inc., produces golf clubs including drivers, irons and wedges. GEOKINETICS INC: To File for Chap. 11 to Implement Restructuring ---------------------------------------------------------------- Geokinetics Inc., Geokinetics Holdings USA, Inc., a wholly owned subsidiary of the Company, and the Company's other direct and indirect domestic subsidiaries entered into a Restructuring Support Agreement with holders of more than 70% in aggregate principal amount of Holdings' 9.75% Senior Secured Notes due 2014 and Avista Capital Partners, L.P., and Avista Capital Partners (Offshore), L.P., the largest holders of the Company's outstanding Series B-1 Senior Convertible Preferred Stock, Series C-1 Senior Preferred Stock and Series D Junior Preferred Stock. Under the terms of the Agreement, the Company and the Subsidiaries agreed to implement a financial restructuring of the Company and the other parties to the Agreement agreed to support and vote for either a pre-negotiated or pre-packaged plan of reorganization, in each case in accordance with the terms, and subject to the conditions, set forth in the Agreement. Under the proposed plan of reorganization, the Company will: (i) exchange the Notes for 100% of the issued common stock of the reorganized Company, subject to dilution from a management incentive plan to be adopted by the reorganized Company and the conversion of up to $25 million of debtor in possession financing into common stock of the reorganized Company; (ii) repay $50 million in loans plus accrued interest outstanding under Holdings' revolving credit facility from the proceeds of an exit financing facility to be entered into in connection with the consummation of the plan of reorganization; (iii) pay general unsecured claims in full either at the conclusion of the chapter 11 case or in the ordinary course of business; and (iv) make a cash payment to the holders of certain of the Preferred Stock and cancel all of the Preferred Stock. The existing holders of the common stock of the Company will not receive any distributions and their equity interests will be canceled. The Company intends to file voluntary petitions for relief under chapter 11 of the U.S. Code in the Bankruptcy Court to implement the proposed plan of reorganization. The Company intends to use the chapter 11 process to facilitate a financial restructuring designed to restore the Company to long-term financial health while continuing to operate in the normal course of business without interruption. The restructuring is not expected to have an impact on the Company's operations. The parties' commitment under the Agreement and the completion of the transactions contemplated by the Agreement are subject to a number of closing conditions, termination rights and approvals, including the majority of the holders of the Notes reaching an agreement with respect to various corporate governance arrangements, the approval of the Bankruptcy Court, and the finalization of definitive documentation. A copy of the Restructuring Agreement is available at: http://is.gd/79pK0B About Geokinetics Inc. Headquartered in Houston, Texas, Geokinetics Inc., a Delaware corporation founded in 1980, is provides seismic data acquisition, processing and integrated reservoir geosciences services, and land, transition zone and shallow water OBC environment geophysical services. These geophysical services include acquisition of 2D, 3D, time-lapse 4D and multi-component seismic data surveys, data processing and integrated reservoir geosciences services for customers in the oil and natural gas industry, which include national oil companies, major international oil companies and independent oil and gas exploration and production companies worldwide. The Company's balance sheet at June 30, 2012, showed $410.85 million in total assets, $580.10 million in total liabilities, $88.19 million of Series B-1 Senior Convertible Preferred Stock, and a stockholders' deficit of $257.44 million. * * * In the Oct. 5, 2011, edition of the TCR, Moody's Investors Service downgraded Geokinetics Holdings, Inc.'s (Geokinetics) Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa2 from B3. "The downgrade to Caa2 is driven by Geokinetics' lower than expected margins in its international markets, constrained liquidity and weak leverage metrics," commented Andrew Brooks, Moody's Vice-President. "The negative outlook highlights the company's continuing tight liquidity and weak financial metrics even in an improved oil and gas operating environment." As reported by the TCR on Oct. 3, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured ratings on Geokinetics Holdings Inc. (Geokinetics) to 'CCC+' from 'B-'. The rating action reflects uncertainty surrounding the costs, damage to reputation, and effect on operations following a liftboat accident in the Southern Gulf of Mexico that led to four fatalities, including two Geokinetics employees and two subcontractors. GEORGE R. CRANFORD: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: George R. Cranford, Inc. 5518 Tuxedo Road Cheverly, MD 20781 Bankruptcy Case No.: 13-10851 Chapter 11 Petition Date: January 18, 2013 Court: U.S. Bankruptcy Court District of Maryland (Greenbelt) Debtor's Counsel: Robert C. Davis, Jr., Esq. DAVIS & DAVIS, LLP 2002 Monticello Drive Annapolis, MD 21401 Tel: (410) 571-2793 E-mail: rd@davislawpartners.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 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mdb13-10851.pdf The petition was signed by George R. Craford, Jr., president. GFI GROUP: Moody's Downgrades Rating to 'B1'; Outlook Stable ------------------------------------------------------------ Moody's Investors Services downgraded GFI Group Inc. to B1 from Ba2. The rating outlook is stable. This concludes a review commenced on Dec 12, 2012. RATINGS RATIONALE Moody's said the downgrade to B1 reflects two principle factors. The first factor is GFI's weak profitability. GFI reported only $1.4 million in GAAP profitability for the first nine months of 2012. Furthermore, Moody's expects a more difficult operating environment for inter-dealer brokers in 2013 and beyond - potentially characterized by extended periods of lower risk-taking capacity by regulated institutions and lower market transaction volumes overall. This is necessitating a reengineering of the cost base of GFI as well as at several of its competitors. The second factor contributing to the downgrade has been an aggressive dividend and share repurchase policy in light of the more difficult operating environment. For example GFI is currently paying a quarterly dividend of 5 cents per share, despite reporting only 1 cent per share of GAAP net income in the first nine months of 2012. These concerns are mitigated to some extent by adjustments GFI is making to its operating model to reflect the more difficult operating environment, including reducing broker compensation expenses. "A tougher operating environment does make it a little easier to retain brokers, which has been a perennial challenge for inter-dealer firms" said Peter Nerby, a Moody's Senior Vice- President. At the same time, Moody's noted that compensation adjustments must be made carefully in the context of the operating environment, so as not to impair revenue generation capacity. GFI Group Inc is an inter-dealer broker headquartered in New York. The principal methodology used in this rating was Global Securities Industry Methodology published in December 2006. GMC DAIRY: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: GMC Dairy Farms LLP dba GMC Dairy Farms The George & Marilyn J. Lanting Revocable Trust 4738 Avenue 120 Corcoran, CA 93212 Bankruptcy Case No.: 13-10302 Chapter 11 Petition Date: January 17, 2013 Court: U.S. Bankruptcy Court Eastern District of California (Fresno) Judge: W. Richard Lee Debtor's Counsel: Thomas O. Gillis, Esq. 1006 H. Street, #1 Modesto, CA 95354 Tel: (209) 575-3116 Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by George Lanting, general partner. GREAT BASIN: Voluntarily Delists Common Stock From NYSE MKT ----------------------------------------------------------- Great Basin Gold Ltd. previously reported its intention to delist voluntarily its common shares from NYSE MKT. The management believes that under the Company's current financial circumstances, it is not practicable for the Company to maintain a plan of compliance that would satisfy NYSE MKT's continued listing requirements. As such, the Board of Directors of the Company determined that it is in the best interests of the Company to delist voluntarily the Company's common stock from NYSE MKT. In connection therewith, the Company formally notified NYSE MKT on Jan. 15, 2013, of the Company's intention to file a Form 25 - Notification of Removal from Listing and/or Registration under Section 12(b) of the Securities Exchange Act of 1934, as amended, with the SEC on or about Jan. 25, 2013. The Company expects that the delisting will take effect on or about Feb. 4, 2013. The Company has not arranged for listing or registration of its common shares on another national securities exchange or for quotation of its common shares in a quotation medium (as defined in Exchange Act Rule 15c2-11). About Great Basin Gold Great Basin Gold Ltd. is incorporated under the laws of the Province of British Columbia and its registered address is 1108- 1030 West Georgia Street, in Vancouver BC, Canada. Great Basin Gold Ltd., including its subsidiaries is a mineral exploration and development company with two operating assets, both in the production build-up phase, the Hollister Project on the Carlin Trend in Nevada, U.S.A, and the Burnstone Project in the Witwatersrand Goldfields in South Africa. Over and above the exploration being conducted at the above mentioned properties, greenfields exploration is being undertaken in Tanzania and Mozambique. On Sept. 18, 2012, Great Basin Gold Ltd. announced that its principal South African subsidiary, Southgold Exploration (Pty) Ltd., owner of the Burnstone mine, filed for protection under the South African business rescue ("BR") procedures. On Sept. 19, 2012, the Company made a Companies Creditors Arrangement Act (Vancouver Registry 126583) following the business rescue proceedings for the Burnstone mine that commenced Sept. 14, 2012, as a result of the termination of all development and production activities at the mine on Sept. 11, 2012. CCAA is a Canadian insolvency statute which will allow the Company a period of time to seek buyers and partners for its two gold mining projects and/or corporate level financiers in an effort to restructure the Company. Operating and development activities were suspended at the Burnstone mine in early September 2012 which created a default under the loan agreement. Term loan 1 will be restructured or settled under the Business rescue proceedings of the South African subsidiary owing title to the Burnstone mine as well as the CCAA filing by the Company. As a result of the default the outstanding amounts have been disclosed as current. Under the CCAA proceedings, the stay of any potential creditor lawsuits was extended until Jan. 14, 2013. There were no updates on the CCAA proceedings as of Jan. 18, 2013. GREEKTOWN SUPERHOLDINGS: Moody's Keeps 'B3' Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service said Greektown Superholdings, Inc. B3 Corporate Family Rating and stable rating outlook are unaffected by the company's announcement that it received a proposal from Athens Acquisition, LLC (not rated). to purchase a large block of Greektown capital stock. The principal methodology used in rating Greektown Superholdings, Inc. was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. HAMPTON ROADS: Kevin Chase Joins as SVP for Commercial Banking -------------------------------------------------------------- Hampton Roads Bankshares, Inc., the holding company for The Bank of Hampton Roads and Shore Bank, announced that Kevin J. Chase has joined BHR's commercial banking team in Richmond as Senior Vice President - Commercial Banking, reporting to Richard Byrne, President of the Richmond market. Mr. Chase brings over 35 years of experience in commercial real estate finance in Richmond and surrounding areas. Douglas J. Glenn, president and chief executive officer of the Company and chief executive officer of BHR, said, "We are very pleased to welcome Kevin to our team. He brings a proven track record, deep knowledge of real estate markets in our region, and decades of experience across all aspects of commercial real estate finance, including origination, underwriting, structuring, servicing and workouts." Prior to joining BHR, Mr. Chase served as Senior Vice President and Commercial Real Estate Relationship Manager with SunTrust Bank in Richmond. From 1993 to 2008, he served in various positions with Genworth Financial and its predecessors GE Financial Assurance and Life Insurance Company of Virginia. From 1974 to 1993, Chase worked for commercial mortgage banking firms in Richmond that arranged financings for properties in central Virginia with correspondent life insurance companies and banks. Mr. Chase earned a BS in Commerce from the University of Virginia. He is a Licensed Virginia Certified General Appraiser and a member of the Richmond Real Estate Group and GRACRE (Greater Richmond Area Commercial Real Estate). Chase serves on the boards of William Byrd Community House and Virginia Supportive Housing. About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and 15 ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company reported a net loss of $98 million in 2011, compared with a net loss of $210.35 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.07 billion in total assets, $1.88 billion in total liabilities and $187.96 million in total shareholders' equity. HANDY HARDWARE: Meeting to Form Creditors' Panel on Jan. 24 ----------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on Jan. 24, 2013, at 10:00 a.m. in the bankruptcy case of Handy Hardware Wholesale, Inc. The meeting will be held at: J. Caleb Boggs Federal Building 844 King Street, Room 2112 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About 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. HELLER EHRMAN: Greenberg Traurig to Mediate Malpractice Suit ------------------------------------------------------------ Brian Mahoney of BankruptcyLaw360 reported that Greenberg Traurig LLP told a California bankruptcy court Wednesday that it had agreed to mediate a multimillion-dollar suit filed by the estate of bankrupt Heller Ehrman LLP over Greenberg Traurig's alleged malpractice while representing the firm in liquidation. In a stipulation filed with U.S. Bankruptcy Judge Dennis Montali, Greenberg Traurig said that mediation sessions will begin within 60 days, the report related. "The parties, in the course of discussing the upcoming case management conference and upcoming discovery, came to a good faith agreement to attempt to resolve the lawsuit...," the report added, citing the stipulation. About Heller Ehrman Headquartered in San Francisco, California, Heller Ehrman, LLP -- http://www.hewm.com/-- was an international law firm of more than 730 attorneys in 15 offices in the United States, Europe, and Asia. Heller Ehrman filed a voluntary Chapter 11 petition (Bankr. N.D. Calif., Case No. 08-32514) on Dec. 28, 2008. Members of the firm's dissolution committee led by Peter J. Benvenutti approved a plan dated Sept. 26, 2008, to dissolve the firm. The Hon. Dennis Montali presides over the case. Pachulski Stang Ziehl & Jones LLP assisted the Debtor in its restructuring effort. The Official Committee of Unsecured Creditors is represented by Felderstein Fitzgerald Willoughby & Pascuzzi LLP. The firm estimated assets and debts at $50 million to $100 million as of the Petition Date. According to reports, the firm had roughly $63 million in assets and 54 employees at the time of its filing. The Court confirmed Heller Ehrman's Plan of Liquidation in September 2010. HAWKER BEECHCRAFT: Attys Should Inform Retirees on PBGC Deal ------------------------------------------------------------ Maria Chutchian of BankruptcyLaw360 reported that a New York bankruptcy judge declined Thursday to make a ruling on Hawker Beechcraft Inc.'s proposed deal with the Pension Guaranty Benefit Corp. that would end its pension plan for nonunion employees and which attorneys say is key to its eventual emergence from Chapter 11 bankruptcy. Though U.S. Bankruptcy Judge Stuart M. Bernstein said the aircraft maker would likely see its motion approved eventually, he directed the Hawker Beechcraft's counsel to provide salaried retirees who objected to the deal with further details, the report said. 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. HD SUPPLY: Issues $950 Million 10.50% Sr. Subordinated Notes ------------------------------------------------------------ HD Supply, Inc., issued $950 million aggregate principal amount of its 10.50% Senior Subordinated Notes due 2021 under the Indenture, dated as of Jan. 16, 2013, as supplemented by the First Supplemental Indenture, dated as of Jan. 16, 2013, among the Company, certain subsidiaries of the Company as guarantors and Wells Fargo Bank, National Association as trustee. The Notes are entitled to the benefit of the Exchange and Registration Rights Agreement among the Company, the Subsidiary Guarantors and the initial purchasers. The Notes are unsecured senior subordinated indebtedness of the Company. A copy of the Form 8-K as filed with the SEC is available for free at http://is.gd/uA1cga About HD Supply HD Supply, Inc., headquartered in Atlanta, Georgia, is one of the largest North American wholesale distributors supporting residential and non-residential construction and to a lesser extent electrical consumption and repair and remodeling. HDS also provides maintenance, repair and operations services. Its businesses are organized around three segments: Infrastructure and Energy; Maintenance, Repair & Improvement; and, Specialty Construction. HDS operates through approximately 800 locations throughout the U.S. and Canada serving contractors, government entities, maintenance professionals, home builders and professional businesses. The Company reported a net loss of $543 million for the year ended Jan. 29, 2012, a net loss of $619 million for the year ended Jan. 30, 2011, and a net loss of $514 million on $6.94 billion of net sales for the year ended Jan. 31, 2010. The Company's balance sheet at Oct. 28, 2012, showed $7.67 billion in total assets, $8.55 billion in total liabilities and a stockholders' deficit of $881 million. * * * As reported by the TCR on Jan. 11, 2013, Moody's Investors Service upgraded HD Supply, Inc.'s ("HDS") corporate family rating to B3 from Caa1 and its probability of default rating to B3 from Caa1. This rating action results from our expectations that HDS will refinance a significant portion of its senior subordinated notes due 2015, effectively extending the remainder of its maturities by at least two years to 2017. HD Supply carries a 'B' corporate credit rating, with negative outlook, from Standard & Poor's Ratings Services. HEB GROCERY: Beats Antitrust Suit Over Produce Restrictions ----------------------------------------------------------- Ama Sarfo of BankruptcyLaw360 reported that a Texas federal judge on Thursday tossed a bankrupt produce distributor's lawsuit alleging supermarket chain HEB Grocery Co. LP violated antitrust law by imposing exclusivity restrictions on produce it could sell, saying the claims had been brought too late. Delta Produce LP argued an exclusivity agreement prohibiting it from selling produce to HEB's competitors violated the Sherman and Clayton Acts and Texas law, but U.S. District Judge Harry Lee Hudspeth dismissed the suit's claims in their entirety, the report said. HERITAGE REAL ESTATE: Case Summary & Unsecured Creditor ------------------------------------------------------- Debtor: Heritage Real Estate Investment, Inc. 312 Hyde Park Avenue Eutaw, AL 35462 Bankruptcy Case No.: 13-70116 Chapter 11 Petition Date: January 18, 2013 Court: U.S. Bankruptcy Court Northern District of Alabama (Tuscaloosa) Debtor's Counsel: Herbert M. Newell, III, Esq. NEWELL & HOLDEN, LLC 2117 Jack Warner Parkway, Suite 5 Tuscaloosa, AL 35401 Tel: (205) 343-0340 E-mail: hnewell@newell-law.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Clifton Dawson, special assistant secretary. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bruce L. Johnson, Et Al -- $7,061,707 120 Knollwood Boulevard Montgomery, AL 36117 HIGHLAND LAND: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Highland Land Company, LLC aka Southern Coastal Construction & Development, LLC Lake Arthur Estates, Inc. Southeast Real Estate Holdings, Inc. PRP Southeast 1 Realty Co., Inc. Waterfall Turner Heritage Homes, Inc. HP HOA Lot Acquisitions, LLC Fall Ridge of Delray Lake Arthur Estates Highland Land Company McIntosh Farms Highland Crossing Hunter's Mill Pine Summit Hickory Grove Highland Oaks Cedar Grove North Highland Crossing 6615 W. Boynton Beach Boulevard, Suite 396 Boynton Beach, FL 33437 Bankruptcy Case No.: 13-50024 Chapter 11 Petition Date: January 18, 2013 Court: U.S. Bankruptcy Court Northern District of Florida (Panama City) Debtor's Counsel: Brian G. Rich, Esq. BERGER SINGERMAN, LLP 125 S. Gadsden Street, Suite 300 Tallahassee, FL 32301 Tel: (850) 561-3010 Fax: (850) 561-3013 E-mail: brich@bergersingerman.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flnb13-50024.pdf The petition was signed by Louis S. Weltman, president of Phoenix Realty Partners, Inc., manager. Affiliate that previously sought Chapter 11 protection: Entity Case No. Petition Date ------ -------- ------------- Turner Heritage Homes, Inc. 11-40517 06/29/11 HILLMAN GROUP: S&P Assigns 'B+' Rating to $76.8MM Draw Term Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned a 'B+' issue-level rating and '2' recovery rating to The Hillman Group Inc.'s (B/Stable/--) delayed draw term loan of $76.8 million due 2016. The '2' recovery rating indicates S&P's expectation that lenders would receive substantial (70%-90%) recovery in the event of a payment default. The 'CCC+' issue-level rating on the company's 10.875% senior notes due 2018 is unchanged following the add-on of $65 million. The recovery rating on the notes is unchanged at '6', indicating S&P's expectation for negligible (0% to 10%) recovery in the event of payment default. The 'B' corporate credit rating and stable outlook remain unchanged. (For the latest corporate credit rating rationale, see the summary analysis on Hillman published Oct. 19, 2012, on RatingsDirect.) Hillman raised this additional debt to fund its acquisition of H. Paulin & Co. Ltd., a Toronto-based manufacturer and distributor of fasteners, fluid system products, automotive parts, and screw machine components. Pro forma for this pending acquisition, S&P estimates leverage (as measured by the ratio of debt to EBITDA) will remain near 7x. However, S&P expects this ratio to fall to the mid-6x area by year-end 2013 because of relatively stable operating performance and because litigation expenses incurred in 2012 won't likely repeat in 2013. "The delayed draw term loan decreases the recovery prospects for the company's total senior secured debt but not enough to impact our existing recovery ratings, which remain '2'. The unsecured debt recovery rating is unchanged at '6' because we estimate the larger amount of priority claims leaves a negligible amount for the senior unsecured note holders. (For the complete recovery analysis, see our revised recovery report on Hillman, to be published following this report on RatingsDirect.)," S&P said. The 'B' corporate credit rating on Hillman reflects S&P's assessment of the company's "highly leveraged" financial risk profile, reflecting its high debt burden and aggressive financial policy. Although S&P recognize the company's generally steady demand for its lower-price-point hardware and related product offerings, S&P views the company's business risk profile as "weak" because of its narrow product focus and high customer concentration. RATINGS LIST The Hillman Group Inc. Corporate credit rating B/Stable/-- New Ratings The Hillman Group Inc. Senior secured $76.8 mil. delayed draw term loan due 2016 B+ Recovery rating 2 Ratings Unchanged The Hillman Group Inc. Senior unsecured $265 mil. 10.875% notes due 2018 CCC+ Recovery rating 6 HOSTESS BRANDS: Judge Greenlights Deal to Pay ACE Insurance Debt ---------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that a New York bankruptcy judge on Thursday gave Hostess Brands Inc. and ACE American Insurance Co. the go-ahead to enter a deal that allows the company to pay off debts owed to the insurer and its ESIS Inc. affiliate and puts to rest a contentious battle over the funds. U.S. Bankruptcy Judge Robert D. Drain's approval allows the fallen snack icon to reimburse the insurers for deductible payments it has owed since mid-November, the report said. The deal calls for the insurers to receive an administrative claim subject to certain conditions, the report added. 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. HOWREY LLP: Trustee Targets Former Partners ------------------------------------------- Sara Randazzo of The American Law Daily reported that Allan Diamond, the trustee overseeing Howrey's Chapter 11 bankruptcy, is ramping up his efforts to recover tens of millions of dollars from former partners and the firms they moved to. According to the report, the trustee is seeking about $100 million in clawback claims for money paid to former partners when the firm was likely insolvent, as well as an estimated up to $100 million more for so- called unfinished business claims stemming from work those partners took with them to their new firms. The report said a total of 71 firms hired the 302 partners streaming out of Howrey in the months leading up to its March 2011 dissolution. The Am Law Daily pointed out that both types of claims are a common source of recovery in law firm bankruptcies. In Dewey & LeBoeuf's case, the estate's advisers hope to collect some $70 million from former partners as part of a "rough justice" settlement currently awaiting final approval in federal bankruptcy court in New York. Unfinished business settlements with firms that Dewey partners landed at are in the works as well. Thelen, which dissolved in 2008 and filed for Chapter 7 bankruptcy in 2009, continues to reach settlements with former partners years later. Most recently, eight former partners agreed to pay back a collective $475,000, according to BankruptcyLaw360. On the unfinished business front, Thelen has collected at least $1.9 million from successor firms, court filings show. The Am Law Daily said Diamond says he plans to take a new approach to reach settlements in the Howrey case by presenting law firms with a bundled settlement plan that includes both the claims against individual partners and the unfinished business claims against the firm. How the firm and its partners decide to divvy up the responsibility and pay the estate is up to them, he says. Also, unlike in the Dewey case, where the estate chose to recover money paid to partners only after January 2011, Diamond says he doesn't plan to have a hard-and-fast date. Instead, he'll approach each settlement "with a rational model based upon the strength of my claim at various points in time." According to the Am Law Daily report, based on his discussions so far, Diamond groups the 71 firms into a few categories: About 20 to 25 firms that he's been talking to for months and hopes to settle by using an all-in-one proposal; others who want him to speak directly with partners rather than presenting the claims together; and less than 10 firms in what he calls a "go stick it in your ear" camp that refuse to cooperate. A handful of others have complicating factors, including potential claims Diamond hopes to bring against them related to contingency fee cases or partners' one-time roles on Howrey's dissolution committee, the report said. Diamond, according to the report, won't say which firms fall into which camp, but the ones with potentially the largest dollar amounts at stake are easy to spot. Baker & Hostetler; Baker Botts; Jones Day; and Winston & Strawn all took in at least 10 partners. Morgan, Lewis & Bockius; Perkins Coie; and Pillsbury Winthrop Shaw Pittman each hired a considerable number as well. Talks with successor firms could have been further along by now, Diamond says, but slowed last fall when San Francisco attorney William McGrane filed a purported class action against all 302 former Howrey partners, the report related. The suit, brought November 1, uses an interpretation of the bankruptcy code to claim the attorneys are so-called Howrey "alter egos," meaning they are equally responsible for the firm's debts. Filed by McGrane -- who also pushed Howrey into involuntary bankruptcy in April 2011 and served for a time on the unsecured creditors committee -- the plaintiff in the case is Howrey Claims LLC, a company incorporated in Georgia that on October 31 bought the $994.25 unsecured claim of court reporting agency Jan Brown & Associates, the report pointed out. At a two-hour hearing in San Francisco, U.S. Bankruptcy Judge Dennis Montali scrutinized McGrane's suit, ultimately saying from the bench, "I think the right remedy in my view is to simply dismiss the complaint," the Am Law Daily said. With the adversary suit all but gone in Diamond's view, he says he's back on track with the settlement talks, according to the report. His attitude, he says, is "Either we're going to cut deals, or I'm suing you." Suits, he warns, will be filed soon. "The bottom line is . . . I'm the 800-pound-gorilla that you want to settle with," the Am Law Daily quoted. Outside of recoveries from former partners, Diamond also continues to mine contingency fee cases that followed Howrey lawyers to other firms, the Am Law Daily further said. He's most optimistic about an antitrust class action brought several years ago by Howrey lawyers?now at Baker & Hostetler -- on behalf of dairy farmers in the southeastern U.S. who claim raw milk prices were fixed. As sibling publication Litigation Daily has previously reported, two defendants in the case have already settled for $145 million, including $48.3 million in attorneys fees and $7.4 million in expenses to be divided between Baker and the Howrey estate. The case against the remaining defendant, Dairy Farmers of America, heads to in Tennessee federal court. With $1.5 billion at stake, Diamond says he'll be watching closely, the Am Law Daily said. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Calif. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March 2011. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June 2011 at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. IMPLANT SCIENCES: Gets TSA Approval for Sniffer Trace Detector -------------------------------------------------------------- Implant Sciences Corporation announced that the U.S. Transportation Security Administration has notified the Company that its Quantum SnifferTM QS-B220 Explosives Trace Detector has successfully met the requirements for acceptance onto the Air Cargo Screening Technology List (ACSTL). Implant Sciences' President and CEO Glenn D. Bolduc stated, "This announcement positions Implant Sciences to sell its products into the U.S. security marketplace, which accounts for approximately 43% of the world market. We are very proud to receive TSA approval and I want to congratulate our team and everyone who has worked so hard on this effort. Implant Sciences now becomes only the third trace detection manufacturer, and the sole American- owned company, to have achieved TSA approval. We've been preparing for this day and believe we have put the right team in place to execute on this significant opportunity." Implant Sciences' COO, Dr. William McGann commented, "The QS-B220 introduces the next generation of explosives trace detection (ETD) technology. Our roadmap for the future includes new fundamental detection technologies that will improve sensitivity and reduce false alarm rates, and new sampling methodologies to extend explosives detection to a wider range of applications and environments." About the Quantum SnifferTM The Quantum Sniffer QS-B220 uses Ion Mobility Spectrometry to rapidly detect and identify trace amounts of a variety of military, commercial, and homemade explosives, as well as drugs. In Air Cargo Security, its ability to test packages rapidly and safely for trace explosives is critical for a system that transports millions of parcels every day. With significantly lower maintenance requirements than competing systems, the QS-B220 can be deployed for a much lower total cost of ownership than other approved products. About Implant Sciences Implant Sciences Corporation (OBB: IMSC.OB) -- http://www.implantsciences.com/-- develops, manufactures and sells sensors and systems for the security, safety and defense (SS&D) industries. Marcum LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company has had recurring net losses and continues to experience negative cash flows from operations. As of Sept. 25, 2012, the Company's principal obligation to its primary lender was $33,429,000 with accrued interest of $3,146,000. The Company is required to repay all borrowings and accrued interest to this lender on March 31, 2013. These conditions raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $6.57 million in total assets, $42.18 million in total liabilities and a $35.60 million total stockholders' deficit. Bankruptcy Warning "Despite our current sales, expense and cash flow projections and $4,915,000 in cash available from our line of credit with DMRJ, at September 30, 2012, we will require additional capital in the third quarter of fiscal 2013 to fund operations and continue the development, commercialization and marketing of our products. Our failure to achieve our projections and/or obtain sufficient additional capital on acceptable terms would have a material adverse effect on our liquidity and operations and could require us to file for protection under bankruptcy laws." JASMINE AT ORLANDO: Court Dismisses Chapter 11 Case --------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida approve the motion of Jasmine at Orlando East, LLC, for the dismissal of its Chapter 11 case. The case is dismissed with prejudice for a period of 12 months from the date of the dismissal order upon the terms and conditions contained in the motion. In its motion for dismissal, the Debtor relates that the claim of U.S. Bank National Association, as successor to Bank of America as trustee for the Registered Holders of LB-UBS Commercial Mortgage Trust 2003-C7, Commercial Mortgage Pass-Through Certificates, Series 2003-C7, will be satisfied pursuant to the settlement agreement between the Debtor and the Lender, which was approved by the Court on Nov. 19, 2012. Unsecured creditors will be paid in full. The Debtor discloses that its sole member, 296 Orlando, LLC, has executed a Confidential Agreement of Sale to sell its sole member interest in the Debtor. 296 and the purchaser of the member interest in the Debtor have closed into escrow and the distribution of closing proceeds is being held pending receipt of a final, non-appealable order dismissing the Debtor's case. The Debtor did not disclose the identity of the purchaser. About Jasmine at Orlando East Jasmine at Orlando East, LLC, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 12-24621) on June 15, 2012 in Miami. The Debtor owns a multi-family apartment development containing 296 units contained in 32 two-story buildings located on 19.64 acres located in Orlando, Florida. The Debtor estimated assets and liabilities of $10 million to $50 million. The Debtor tapped Jordi Guso, Esq., and Debi Evans Galler, Esq., at Berger Singerman LLC, in Miami as counsel. T The Debtor financed its acquisition of its Florida properties through, inter alia, a $12.9 million acquisition loan provided by Lehman Brothers Holdings Inc. d/b/a Lehman Capital, a Division of Lehman Brothers Holdings Inc. The loan has been assigned to LaSalle Bank National Association, as trustee for certain commercial mortgage pass-through certificates. Judge Robert A. Mark presides over the case. The petition was signed by Oscar A. Garcia, authorized representative. KENNETH SCHACTER: Ralph DeLuca Buys Metropolis Poster for $1.2MM ---------------------------------------------------------------- A courtroom is not where one usually encounters rare movie posters, but that's where New Jersey collector Ralph DeLuca made the score of a lifetime -- a 1927 German poster advertising Fritz Lang's sci-fi classic Metropolis. Mr. DeLuca, who owns the film memorabilia Web site RalphDeLuca.com, outbid three formidable competitors in a Dec. 13 auction at the US Bankruptcy Court in Los Angeles. He paid $1.2 million to acquire one of only four known examples of the iconic Metropolis three-sheet. Two of those four are held in institutional collections; the other two [including DeLuca's] are privately owned. "For a poster I really want, I'll pay serious cash. I always put my money where my mouth is," Mr. DeLuca said. Bidding opened in the courtroom at $740,000, upping the $700,000 private cash offer Mr. DeLuca had tendered previously to the Bankruptcy Court. Some of the movie-poster world's top players were present to chase the cinematic treasure. They included an agent for Heritage Auctions, London dealer Bruce Marchant, who represented UK collector Andrew Cohen; and a rep from Profiles in History, who bid on behalf of Steve Fishler, owner of Metropolis Comics. "If anything surprised me, it was that Heritage was not my main competitor. I expected to have to fight them tooth and nail, but they, and Fishler's representative, were out of the running before bidding even reached $900,000. At that point, it was myself versus Marchant," Mr. DeLuca said. The battle concluded with Mr. DeLuca's $1.2 million bid for a group containing the Metropolis poster and eight other items, including a 1933 King Kong poster, a one-sheet teaser for The Invisible Man, and other posters. The auction closed a chapter in the bankruptcy of collector Kenneth Schacter of Valencia, California. According to a Dec. 13 Reuters report, Schacter purchased the Metropolis poster seven years ago for $690,000, using funds he borrowed from an investor with whom he was to share profits once the poster was resold. When Mr. Schacter retained the poster in his own collection and did not resell it, Mannheim filed suit and won a judgment against Mr. Schacter. Mr. Schacter did not pay the judgment, but he did file for Chapter 11 bankruptcy protection in December 2011 to reorganize his debts. His course of action was derailed when Mannheim learned last March, through an item in The Hollywood Reporter, that the Metropolis poster was being offered for sale on a Web site for $850,000. Consequently, Mannheim asked the Bankruptcy Court to convert Mr. Schacter's Chapter 11 filing to a Chapter 7 bankruptcy, stating he believed Mr. Schacter was concealing assets. The Court sided with Mannheim and re-categorized the bankruptcy as a Chapter 7, thereby forcing Mr. Schacter to liquidate his assets. Shortly thereafter, Bankruptcy Trustee John J. Menchaca took possession of the Metropolis poster and other items. When Mr. DeLuca learned of the seizure, he consulted a Los Angeles bankruptcy attorney who told him it would be possible to present a private offer to the trustee. "Ordinarily in an arrangement of that type, a person making an offer puts up 25 percent and shows proof of funds for the remainder. I immediately put up a cashier's check for the full $700,000 I was offering. The trustee felt it was a good deal." Ultimately, Trustee Menchaca decided to liquidate the posters through a courtroom auction, with Mr. DeLuca's $700,000 bid serving as the opener. Mr. DeLuca said he is not in a hurry to part with his most valuable artwork. "Eventually if I get the right price, I'll sell it. When I do, it will be for a world-record price," he said. LAGUNA BRISAS: Court Approves Johnny Kim as Special Counsel ----------------------------------------------------------- Laguna Brisas, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the Central District of California to employ Johnny Kim, Esq., as its special counsel, effective as of Aug. 20, 2012. Johnny Kim is not related to the Debtor's insider, Andy Kim. The professional services to be provided by Johnny Kim will include, among other things, vindicating claims for restitution in excess of $500,000 and other damages and harms resulting from excessive and unlawful conduct concerning the origination, administration and/or servicing of the senior secured promissory note/loan obligation of Client nominally held by Wells Fargo, NA, and specially serviced by CW Capital and/or CW Capital Management, LLC. The Debtor believes that J. Kim in a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. J. Kim will bill his time in the Debtor's case at $385 per hour. Of Counsel Attorney James Burger bills at $385 per hour. Other attorneys engaged on a contract basis bill at $150 to $350 per hour depending upon experience and other considerations. About Laguna Brisas Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Campbell, since Oct. 3, 2011. M. Jonathan Hayes, Esq., at the Law Office of M. Jonathan Hayes represents the Debtor in its restructuring effort. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. The Debtor's Plan provides that Wells Fargo Bank will be paid in full, at a contract interest rate of 6.23%, or roughly $57,000 per month. General unsecured claims will be paid in full, pro-rata, in monthly installment of $43,000 over 58 months. General unsecured claims, which are impaired under the Plan, are estimated to aggregate $2.475 million. LIFECARE HOLDINGS: Creditors' Committee Taps Pachulski & FTI ------------------------------------------------------------ BankruptcyData reported that LifeCare Holdings' official committee of unsecured creditors filed with the U.S. Bankruptcy Court motions to retain Pachulski Stang Ziehl & Jones (Contact: Laura Davis Jones) as counsel at the following hourly rates: partner at $525 to $975, of counsel at $495 to $745, associate at $395 to $495 and paralegal at $185 to $275 and FTI Consulting (Contact: Steven Simms) as financial advisor at the following hourly rates: senior managing director at $790 to $895, director/managing director at $570 to $755, consultant/senior consultant at $290 to $540 and administrative/paraprofessional/associate at $120 to $235. About LifeCare Holdings Based in Plano, Texas, LifeCare Holdings, Inc. -- http://www.lifecare-hospitals.com/-- currently operates 27 long term acute care hospitals located in ten states. Long-term acute care hospitals specialize in the treatment of medically complex patients who typically require extended hospitalization. LifeCare Holdings Inc. filed for bankruptcy protection (Bankr. D. Del. Case No. 12-13319) in Wilmington on Dec. 11, 2012, citing debt and losses from Hurricane Katrina and saying it plans to sell the company, according to a Bloomberg report. The Company reported a net loss of $34.83 million in 2011, compared with net income of $2.63 million on $358.25 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $422.15 million in total assets, $575.87 million in total liabilities and $153.72 million total stockholders' deficit. LOCATION BASED TECHNOLOGIES: Amends 2012 Report to Correct Errors ----------------------------------------------------------------- Location Based Technologies, Inc., has amended its annual report for the fiscal year ended Aug. 31, 2012, to restate revenue and cost of revenue for PocketFinder devices sold to the Company's main distributor due to an accounting error and change in accounting policy. Revenues are recognized in accordance with Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, as amended by SAB No. 104, Revenue Recognition. The Company has reevaluated the factors that it used to determine revenue recognition for devices sold to its distributor and concluded that it is appropriate to restate revenue and cost of revenue for year ended Aug. 31, 2012. Other related accounts affected include allowance for sales returns, deferred revenue, inventory purchase commitment, device revenue and cost of revenue. The Company also amended Footnote 1 "Nature of Operations and Summary of Significant Accounting Policies" and Item 2 "Management's Discussion and Analysis of Financial Condition and Results of Operations" to reflect changes to the financial statements as a result of the restatement. The Company's restated statements of operations reflect a net loss of $7.96 million on $948,110 of total net revenue for the year ended Aug. 31, 2012, compared with a net loss of $8.69 million on $597,051 of total net revenue as originally reported. Location Based's restated balance sheet at Aug. 31, 2012, showed $5.48 million in total assets, $5.41 million in total liabilities and $72,139 in total stockholders' equity, compared with $5.52 million in total assets, $5.75 million in total liabilities, $430,700 in commitments and contingencies and a $661,566 total stockholders' deficit as previously reported. A copy of the amended Annual Report is available at: http://is.gd/ks75aO About Location Based Technologies Irvine, Calif.-based Location Based Technologies, Inc., designs, develops, and sells leading-edge personal locator devices and services. Comiskey & Company, the Company's independent registered public accounting firm, included an explanatory paragraph in its report on the Company's financial statements for the fiscal year ended Aug. 31, 2012, which expresses substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring losses since inception and has an accumulated deficit in excess of $45,000,000. There is minimal sales history for the Company's products, which are new to the marketplace. Bankruptcy Warning The Company remains obligated under a significant amount of notes payable, and Silicon Valley Bank has been granted security interests in its assets. "If we are unable to pay these or other obligations, the creditors could take action to enforce their rights, including foreclosing on their security interests, and we could be forced into liquidation and dissolution. We are also delinquent on a number of our accounts payable. Our creditors may be able to force us into involuntary bankruptcy," the Company said in its annual report for the year ended Aug. 31, 2012. LORUS THERAPEUTICS: Incurs C$1.61-Mil. Net Loss in Nov. 30 Quarter ------------------------------------------------------------------ Lorus Therapeutics Inc. reported a net loss of C$1.61 million for the three months ended Nov. 30, 2012, compared with a net loss of C$1.46 million for the three months ended Nov. 30, 2011. For the six months ended Nov. 30, 2012, the Company had a net loss of C$2.88 million as compared to a net loss of C$2.58 million for the six months ended Nov. 30, 2011. The Company's balance sheet at Nov. 30, 2012, showed C$3.22 million in total assets, C$1.59 million in total current liabilities, and stockholders' equity of C$1.63 million. According to the Company, there is substantial doubt about its ability to continue as a going concern. Management has forecasted that the Company's current level of cash and cash equivalents will not be sufficient to execute its current planned expenditures for the next 12 months without further financing being obtained. "The Company is currently in discussion with several potential investors to provide additional funding. Management believes that it will complete one or more of these arrangements in sufficient time to continue to execute its planned expenditures without interruption. However, there can be no assurance that the capital will be available as necessary to meet these continuing expenditures, or if the capital is available, that it will be on terms acceptable to the Company." A copy of the Company's interim statements for the three months ended Nov. 30, 2012, is available at http://is.gd/dsmgUM Toronto, Canada-based Lorus Therapeutics Inc. is a life sciences company focused on the discovery, research and development of effective anticancer therapies with a high safety profile. Lorus has worked to establish a diverse anticancer product pipeline, with products in various stages of development ranging from pre- clinical to a completed Phase II clinical trial. LODGENET INTERACTIVE: Former CEO Gets $1.4MM for Unpaid Salary -------------------------------------------------------------- LodgeNet Interactive Corporation announced that Rich Battista departed as President, CEO and director of the Company as of Jan. 16, 2013. Frank Elsenbast, the Company's CFO, and James Naro, the Company's General Counsel, have been appointed interim co-CEOs. Pursuant to the terms of a resignation letter agreement, on the date of his resignation the Company will pay Mr. Battista a lump sum in the amount of approximately $1.39 million, which amount includes all accrued and unpaid salary, accrued and unused vacation, and accrued bonus, plus 12 months of base salary, minimum guaranteed bonus, and COBRA premiums, less applicable withholding taxes. Mr. Battista will also be entitled to the continued exclusive use of his existing office and parking space in Los Angeles, California, through March 31, 2013. No other payments are owed to Mr. Battista, including under his Employment Agreement or Key Employee Bonus letter agreement, the relevant provisions of which were terminated in connection with his resignation. During his tenure, Mr. Battista successfully guided LodgeNet through a strategic review process that recently concluded with the announced $60 million recapitalization plan with an investor syndicate led by Colony Capital. The recapitalization is designed to place LodgeNet on a path to revitalize its business and balance sheet, while delivering strong cash flow. The recapitalization also includes a five-year extension of the Company's secured credit facility with its lenders. "Rich has done a first-rate job as our president & CEO, leading us through this transaction to secure the Company's future," said LodgeNet Interactive Chairman Doug Bradbury. "Under the Colony Capital-led syndicate, LodgeNet is poised to transform its business and re-affirm its position as the industry leader in providing interactive products and services to the hospitality and healthcare markets. We thank Rich for his significant contributions to the Company during this important time and wish him well in his future endeavors." "My time at LodgeNet has been very rewarding," said Rich Battista. "I am proud of what we have accomplished in signing our recapitalization agreement with Colony and our lenders in order to return LodgeNet to strong financial footing. The Colony-led syndicate brings significant resources, both financial and strategic, to the Company. It is now time to pass the baton and I do so knowing that the company is in terrific hands and on an exciting path towards strong future success." As co-CEOs, Messrs. Elsenbast and Naro will oversee the completion of the previously announced transaction through the court- supervised process. Upon closing of the transaction, the Company will be appointing a new CEO. About LodgeNet Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq: LNET) -- http://www.lodgenet.com/-- provides interactive media and connectivity services to hospitality and healthcare businesses and the consumers they serve. Recently named by Advertising Age as one of the Leading 100 US Media Companies, LodgeNet Interactive serves roughly 1.5 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. The Company's services include: Interactive Television, Broadband and Advertising Media Solutions along with nationwide technical and professional support services. LodgeNet Interactive owns and operates businesses under the industry leading brands: LodgeNet, The Hotel Networks and LodgeNet Healthcare. The Company reported a net loss of $631,000 in 2011, a net loss of $11.68 million in 2010, and a net loss of $10.15 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $291.74 million in total assets, $448.72 million in total liabilities and a $156.98 million total stockholders' deficiency. * * * As reported by the TCR on Jan. 10, 2013, Moody's Investors Service downgraded LodgeNet Interactive Corporation's Probability of Default Rating (PDR) to D from Ca following the company's announcement that it failed to make interest and principal payments of approximately $10 million to its term loan and revolver lenders on Dec. 31, 2012. In the Jan. 8, 2013, edition of the TCR, Standard & Poor's Ratings Services said that it lowered its corporate credit rating on Sioux Falls, S.D.-based LodgeNet Interactive Corp. to 'D' from 'CC'. The downgrade follows the company's failure to make its Dec. 31, 2012, scheduled cash interest payments on its revolving credit and term loan and Dec. 31, 2012, term loan amortization payment. LSP MADISON: Moody's Affirms 'Ba2' Rating on Sr. Sec. Term Loan --------------------------------------------------------------- Moody's Investors Service has affirmed the Ba2 rating on LSP Madison Funding, LLC's (Madison Funding, or HoldCo) senior secured term loan due June 2019. The rating outlook is stable. RATINGS RATIONALE The rating affirmation and stable outlook incorporates Moody's assessment that Madison Funding's plan to remove two assets from the existing collateral package following the completion of separate project financings for those assets, and proposal to subsequently amend the existing HoldCo term loan documentation in a manner that materially reduces the mandatory repayment requirements. Moody's views this sponsor-friendly aspect of the transaction as negative to creditors, the rating affirmation and stable outlook recognizes additional enhancements made to the portfolio that partially mitigate the negative credit implications of the proposed amendment, and help to produce credit metrics that are similar to those anticipated under the original deal and consistent with a mid-Ba rating. Assuming the proposed amendment obtains majority lender approval, the outstanding balance of the Madison Funding term will be approximately $475 million, a $238 million permanent debt reduction. Under the terms of the contemplated transactions, the sponsor, LS Power, is proposing to remove both the Doswell (and Doswell's project level debt) and Riverside projects from the collateral package following the completion of two financings scheduled to close on or about February 1st. Under the original terms of the credit agreement, the removal of Doswell and Riverside would have resulted in a mandatory $420 million debt reduction (disposition amount) of the HoldCo term loan. If approved, the proposed amendment would result in only a $238 million debt reduction, $182 million less than the original terms, a 43% differential. Moody's understands that subsequent to the June 2012 closing of the Madison Funding term loan, a 7.5 year power purchase agreement (PPA) was executed at the previously merchant Cherokee plant. The combined removal of Doswell and Riverside assets but including Cherokee's contracted margins, the level of portfolio contracted gross margin remains close to the 80% contracted gross margin during the 2013-2015 period originally forecasted with all the assets under Moody's conservative forecast. Post-2016 contracted margin is closer to 50%, when factoring in the contracted Cherokee margins, whereas it was closer to 30% prior to execution of this PPA. Moody's further understands that the collateral package will be moderately enhanced under the proposed amendment as it will provide lenders with a first lien on a segment of the Blythe transmission line previously excluded from the collateral package. While other creditor-benign modifications are being made to the credit agreement prohibiting the incurrence of incremental debt and placing limits on distributions, the Cherokee PPA and the addition of the Blythe collateral represent, in Moody's opinion, the most tangible mitigating factors for Madison Funding creditors from the proposed amendment. From a financial perspective, the credit metrics experience modest degradation under the company's case and a more conservative Moody's forecast which assumes flat capacity payments equal to the most recent four-year average for 2016 and beyond, a 20% cut to merchant margins and a 10% decline in distributions from the Blythe asset during the term of the loan. Specifically, Moody's calculates that under the Moody's forecast during 2013-2015, the average debt service coverage ratio (DSCR) improves modestly to 2.3x from 2.1x while the average ratio of Funds from Operations to Debt (FFO/Debt) metric declines to approximately 10.5% from 13.5% over the same period. Assuming the original terms of the credit agreement were unchanged (debt was reduced by $420 million), Moody's calculates that the DSCR and FFO / Debt metrics would have improved to 3.0x and 15%, respectively, over the same time frame. Given these metrics and factoring in the incremental benefits of the Cherokee PPA, it is possible that consideration of a higher rating may have been warranted had the original deal remained in place with the term loan being reduced by $420 million. The stable outlook reflects Moody's expectation that the portfolio will continue to operate well, that the capacity markets will continue to provide meaningful contractual cash flow for the portfolio enabling consistent debt reduction over the life of the transaction. Moody's notes that the addition of the Cherokee PPA lengthens the tenor of the portfolio's contracted gross margin thereby strengthening the portfolio's resiliency. The rating could face upward rating pressure should the portfolio show meaningfully improved credit metrics more consistent with a high-Ba credit. Moody's anticipates that such improvement would likely occur from more rapid deleveraging of the HoldCo term loan. The rating could face negative credit pressure should the project's cash flows decline materially from existing levels. Moreover, extensive altering to the existing portfolio that, while resulting in similar financial metrics, leads to a meaningfully weaker collateral position for HoldCo lenders could also result in a lower rating. The principal methodology used in this rating was Power Generation Projects published in December 2012. LSP MADISON: S&P Affirms 'BB+' Rating on Senior Secured Term Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'BB+' rating on LSP Madison Funding LLC's senior secured term loan, based on a planned removal of two key assets and a lower debt pay- down resulting in a new debt balance of $475 million. The recovery rating remains at '2', indicating S&P's expectation of substantial recovery (70% to 90%) of principal in a default scenario. The outlook on the rating is stable. U.S. project finance entity LSP Madison is planning to remove two assets that provide nearly one-half of cash flow, Doswell and Riverside, from its power generation portfolio. Based on its credit agreement, in removing the two assets, LSP Madison must pay down specified debt amounts on each. For Doswell and Riverside, these amounts are $200 million and $220 million, respectively. Instead, LSP Madison is proposing to pay down a lower amount, resulting in a revised debt balance of $475 million. With the change to the portfolio, S&P's primary concern is higher debt outstanding throughout the term of the loan and weaker financial metrics. Compared with the original deal (initial leverage at $209 per kilowatt (kW) excluding project debt, and $321/kW including it), in the amended transaction leverage would be $258/kW excluding project debt and $384/kW including it. Despite the higher debt on a unit basis, S&P still views overall debt as modest and, under its base case, the project pays down the term loan by maturity. Compared with the original deal (minimum debt service coverage ratio (DSCR) of 2.42x and 2013 to 2018 average DSCR of 6.42x), in the proposed transaction, the minimum DSCR is 1.98x and for 2013 to 2018 the average DSCR is 4.04x. "Regarding business risk, we view the portfolio as being weaker with two major assets eliminated. However, diversification measures are similar. Compared with the current portfolio (3,582 megawatts (MW) of gas-fired and hydro assets across diverse markets), the portfolio after the asset removal will total 1,843 MW. Asset mix remains similar, with about one-third of the portfolio combined-cycle gas turbines assets, 60% combustion turbine assets, and the remaining a 139 MW hydropower asset in Pennsylvania. Contracted margins are also similar, with about 46% of gross margins contracted. With the Doswell removal, which had project-debt associated with the asset, encumbered cash flow reduces to 13% (from 19% originally). As before, revenue from cleared capacity prices, hedges, and power purchase agreements (PPA; 69% of total revenues through 2015) provides the primary credit support for the stable outlook," S&P said. "The stable rating outlook reflects our expectations that the project's more stable revenue streams, consisting of PPAs, hedged power prices, and capacity payments, will allow for significant deleveraging over the loan's tenor, even if merchant power revenues are weak. A ratings upgrade is unlikely given the limited asset diversity, the age of the assets, and the project's exposure to merchant power revenue. If the assets underperform operationally, causing energy gross margins and capacity payment revenue to fall below expectations, we could lower the ratings. We could also lower ratings if we materially lower our base-case assumptions, which would affect our expectations of merchant revenue. An adverse change to the business profile or developments that would lead to greater refinancing risk of over $100/kW or more could well lead to a downgrade," S&P added. LYON WORKSPACE: Files Chapter 11 Petition in Illinois ----------------------------------------------------- Lyon Workspace Products, L.L.C., a manufacturer and supplier of locker and storage products, sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 13-2100) on Jan. 19, 2013. Lyon Workspace, which sought bankruptcy protection together with 7 affiliates, filed a variety of first day motions, including requests to continue its existing bank accounts at Capital One Bank, pay prepetition wages of employees, pay sales use and taxes, and hire Kurtzman Carson Consultants as claims agent. The Debtors are also seeking joint administration of their Chapter 11 cases. A hearing on the first day motions is on Jan. 23, 2013, at 9:30 a.m. before Judge Janet S. Baer. Lyon Workspace -- http://www.lyonworkspace.com/-- has 400 full- time employees, 53% of whom are salaried employees. The weekly payroll is $200,000. Eight percent of the employees are members of the Local Union No. 1636 of the United Steelworkers of America, A.F.L.-C.I.O. Lyon Workspace estimated at least $10 million in assets and liabilities. LYON WORKSPACE: Proposes KCC as Notice and Claims Agent ------------------------------------------------------- Lyon Workspace Products, L.L.C., and its affiliates seek an order appointing Kurtzman Carson Consultants LLC as their notice, claims and balloting agent. The Debtors estimate that there are more than 500 potential creditors and other parties in interest who require notice of various matters in the Chapter 11 cases. Upon information and belief, it would be highly burdensome on the Court and the Clerk's Office to perform the services that KCC will perform. To relieve the Clerks' Office of these burdens, the Debtors propose to retain KCC as their notice, claims, and balloting agent. The Debtors agreed to provide KCC a retainer of $10,000 as security for their payment obligations. On account of its consulting services, KCC personnel will seek compensation based on a 30% discounted rate: Position 30% Discounted Rate -------- ------------------- Clerical $28 to $42 Project Specialist $56 to $98 Technology/Programming Consultant $70 to $140 Consultant $87 to $140 Senior Consultant $157 to $192 Senior Managing Consultant $207 Weekend, holidays and overtime Waived Travel expenses and working meals Waived For its noticing services, KKC will charge $50 per 1,000 e-mails, and $0.10 per page for electronic noticing. For its claims administration services, KCC will charge $0.10 per creditor per month but is waiving the fee for its public website hosting services. For the interactive voice response in connection with its call center support services, KCC will charge $0.34 per minute. KCC is a "disinterested person" within that term's meaning in Section 101(14) of the Code. The claims agent can be reached at: KURTZMAN CARSON CONSULTANTS LLC 2335 Alaska Ave. El Segundo, CA 90245 Attn: Drake D. Foster Tel: (310) 823-9000 Fax: (310) 823-9133 E-mail: dfoster@kccllc.com About Lyon Workspace Lyon Workspace Products, L.L.C. and seven affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 13-2100) on Jan. 19, 2012. Lyon Workspace -- http://www.lyonworkspace.com/-- is a manufacturer and supplier of locker and storage products. It has 400 full-time employees, 53% of whom are salaried employees. The weekly payroll is $200,000. Eight percent of the employees are members of the Local Union No. 1636 of the United Steelworkers of America, A.F.L.-C.I.O. LYON WORKSPACE: Asks for March 4 Extension to File Schedules ------------------------------------------------------------ Lyon Workspace Products, L.L.C., and its affiliates ask the Bankruptcy Court to extend to and including March 4, 2013, their deadline to file their schedules of assets and liabilities, executory contracts and unexpired leases, as well as statements of financial affairs. Given the size and the complexity of their business operations, the number of creditors, and the fact that certain prepetition invoices have not yet been received or entered into Debtors' financial accounting systems, the Debtors have begun, but not yet finished compiling the information that will be required in order to complete the Schedules and Statements. Due to the large scale of their business, the Debtors have more than 500 creditors. About Lyon Workspace Lyon Workspace Products, L.L.C. and seven affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 13-2100) on Jan. 19, 2012. Lyon Workspace -- http://www.lyonworkspace.com/-- is a manufacturer and supplier of locker and storage products. It has 400 full-time employees, 53% of whom are salaried employees. The weekly payroll is $200,000. Eight percent of the employees are members of the Local Union No. 1636 of the United Steelworkers of America, A.F.L.-C.I.O. LYON WORKSPACE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Lyon Workspace Products, LLC 420 N. Main Street Montgomery, IL 60538 Bankruptcy Case No.: 13-02100 Chapter 11 Petition Date: January 19, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Janet S. Baer Debtor's Counsel: Kathleen A. Stetsko, Esq. Daniel A. Zazove, Esq. PERKINS COIE LLP 131 S. Dearborn Suite 1700 Chicago, IL 60603 Tel: (312) 324-8400 Fax: (312) 324-9400 E-mail: kstetsko@perkinscoie.com dzazove@perkinscoie.com Debtor's Claims and Notice Agent: KURTZMAN CARSON CONSULTANTS LLC Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Robert Wanat, chief restructuring officer. Debtor's List of 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Pension Benefit Unpaid $7,896,104 Guaranty Corp. Contributions Dept 77430 P.O. Box 77000 Detroit MI 48277 Bluecross Blueshield Medical Claims $484,729 of Illinois 300 E. Randolph St. Chicago, IL 6061-5099 Promet Steel, Inc. Trade Debt $472,699 900 East 103rd St. Chicago, IL 60628 Premier Resource Group Trade Debt $455,013 246 East Janata Blvd Ste 262 Lombard, IL 60148 Unarco Material Trade Debt $368,791 Handling Inc. 701 16th Ave. East Springfield, TN 37172 Sherwin Williams Trade Debt $367,147 Countryside 5111 Dansher Rd Countryside, IL 60525 Miller Metals Service Trade Debt $340,496 Corp 2400 Bond St. University Park, IL 60484 Barsteel Corporation Trade Debt $313,153 484 Central Ave Highland Park, IL 60035 Temple-Inland Trade Debt $292,101 PO Box 360853M Pittsburgh, PA 15251-6853 Century Steel Corp Trade Debt $241,937 300 East Joe Orr Rd PO Box 38 Chicago Heights, IL60448 Lexington Steel Trade Debt $232,363 Corporation 5443 West 70th PL Bedford Park, IL 60638 Nashville Wire Trade Debt $231,420 Products 199 Polk Ave Nashville, TN 37210 Trillium Staffing Trade Debt $197,490 Solutions Cardinal Packaging Trade Debt $169,211 Products Ortho Seating, LLC Trade Debt $133,942 American Grinders Inc Trade Debt $106,221 BTM Installations LLC Trade Debt $103,550 Master Lock Co Trade Debt $100,126 Xingyi Metal Products Trade Debt $96,956 Kilian Manufacturing Trade Debt $93,072 Corp Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Pride Metals, L.L.C. 13-02101 Paris Metal Products, L.L.C. 13-02103 Durand Products, L.L.C. 13-02104 LL & D Group, Inc. 13-02105 Miller Global Solutions, L.L.C. 13-02106 Lyon Workspace Products, Inc. 13-02107 Sycamore Systems, L.L.C. 13-80175 MERIDIAN SUNRISE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Meridian Sunrise Village LLC dba New Meridian L.L.C. Sunrise Village New Meridian Sunrise Village 1302 Puyallup Street Sumner, WA 98390 Bankruptcy Case No.: 13-40342 Chapter 11 Petition Date: January 18, 2013 Court: U.S. Bankruptcy Court Western District of Washington (Tacoma) Judge: Brian D. Lynch About the Debtor: The Debtor owns the property known as the New Meridian Sunrise Village in 10507 156th St. E. Puyallup, Washington. The Debtor has valued the property at $70 million, which property secures debt of $64.4 million to U.S. Bank, National Association. A copy of the schedules attached to the petition is available at http://bankrupt.com/misc/wawb13-40342.pdf Debtor's Counsel: James L. Day, Esq. BUSH STROUT & KORNFELD, LLP 601 Union Street, Suite 5000 Seattle, WA 98101 Tel: (206) 292-2110 E-mail: jday@bskd.com Scheduled Assets: $70,551,976 Scheduled Liabilities: $65,878,148 The petition was signed by Martin D. Waiss, president of Investco Financial Corp., manager. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Capstone Advisory Group, LLC Consulting Fees $58,016 Park 80 W. 250 Pehle Avenue, #105 Saddle Brook, NJ 07663 Pierce County Security -- $51,697 P.O. Box 958 Tacoma, WA 98401 Puget Sound Energy -- $11,013 BOT-01H P.O. Box 91269 Bellevue, WA 98009 Hot Yoga Puyallup LLC Security Deposit $9,590 SUNRISE 19-25, LLC-Ram Rest -- $9,390 Dwyer Pemberton & Coulson, P.C. Accounting Fees $8,724 Murrey's Disposal Company Inc. -- $7,539 SST GROUP, LLC ?Seattle Suntan -- $6,813 WILLIAMS KASTNER & GIBBS PLLC -- $6,504 Fro Yo Ventures -- $6,490 Haugen Emerald City Smoothie Security Deposit $5,909 Firgrove Mutual Water Company Utilities $5,787 G & L Ent Inc. Security Deposit $4,487 Thanh N. Nguyen & Thinh T. Tao -- $3,609 Edward D. Jones & Co, LP -- $3,136 Finest Wa Wines LLP -- $3,000 Games Workshop Retail, Inc. Security Deposit $2,857 Christian McClung Security Deposit $2,499 Kent Station Phase I LLC Marketing Expense $2,350 Spencer and Associates Legal Billing $2,262 METEX MFG: Committee Taps Charter Oak as Financial Advisor ---------------------------------------------------------- The Official Committee of Unsecured Creditors in the Chapter 11 case of Metex Mfg. Corporation asks the U.S. Bankruptcy Court for the Southern District of New York for permission to retain Charter Oak Financial Consultants, LLC as its financial advisor. Charter Oak will, among other things: a) assist the Committee in fulfilling its responsibility to monitor the Debtor's financial affairs; b) review, interpret, and analyze financial materials, including accounting, tax, statistical, financial, and economic data concerning the Debtor; and c) analyze and advise the Committee on accounting, financial, valuation, and related issues that may arise in the course of this bankruptcy case. The hourly rates of Charter Oak's personnel are: Senior Managing Directors $680 Director $505 Assistant Director $437 Associates $375 To the best of the Committee's knowledge, Charter Oak is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Metex Great Neck, New York-based Metex Mfg. Corporation, formerly known as Kentile Floors, Inc., started business in the late 1800's as a manufacturer of cork tile, and thereafter progressed to making composite tile for commercial and residential use. It filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12- 14554) on Nov. 9, 2012. The petition was signed by Anthony J. Miceli, president. The Debtor estimated its assets and debts at $100 million to $500 million. Judge Burton R. Lifland presides over the case. Affiliate Kentile Floors, Inc., filed a separate Chapter 11 petition (Bankr. S.D.N.Y. Case No. 92-46466) on Nov. 20, 1992. Caplin & Drysdale, Chartered represents the Official Committee of unsecured Creditors in the Debtor's case. The Committee tapped to retain Charter Oak Financial Consultants, LLC as its financial advisor. METRO FUEL: Gets Final OK to Incur DIP Loan, Use Cash Collateral ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York authorized, on a final basis, Metro Fuel Oil Corp., et al., to obtain an additional advance in the amount of $2,000,000 from the New Lenders, in addition to the amount of advances authorized by the interim orders, for total authorized advances in the aggregate amount of not more than $10,000,000 pursuant to the DIP Documents, the interim orders, and the final order. As of the Petition Date, the Revolver had an outstanding balance of $31,693,858, consisting of principal of $31,357,545, accrued and unpaid interest of $181,248, and prepetition fees and expenses in an unliquidated amount asserted to be not less than $155,064. As a condition to the extension of credit under the DIP Facility, the New Lenders and the Debtors have agreed that proceeds of any advance made under the DIP Facility will be used exclusively to pay certain costs relating to the administration of the Cases and otherwise in a manner consistent with the terms of the DIP Facility and the Approved Budget, including for ordinary and necessary operating costs and expenses arising after the Petition Date or other payments as may be agreed to by the New Lenders. No portion of the proceeds of any advance under the DIP Facility will be used, directly or indirectly, to make any payment or prepayment that is prohibited under the DIP Facility, including any payment or prepayment relating to the Bank Debt Obligations or Notes Obligations, subject to subsequent order of the Court. As adequate protection from any diminution in value of the lenders' collateral, the Debtor will grant replacement liens in and upon all property of the Debtors constituting Prepetition Bank Debt Collateral; superpriority administrative expense claim status, subject to carve out on certain expenses. The Court also ordered that New Lenders will not be required to marshal the collateral, and will be authorized to foreclose on and liquidate any of the collateral as consistent with the DIP Documents, in any manner or order in the New Lenders' sole and absolute discretion. The terms of the DIP Facility includes: 1. New Lenders: Third Avenue Special Situations (Master) Fund, L.P. or one or more of its affiliated funds, and Zell Credit Opportunities Master Fund, L.P. or one or more of its affiliated funds. 2. The DIP Notes will bear interest at a per annum rate equal to 6% and will be payable in kind and added to the principal amount of the DIP Facility during the term of the DIP Facility. PIK Interest will be compounded monthly, and will include interest on interest. 3. The maturity date of the DIP Facility will be the date that is the earliest of (a) 90 days after the Petition Date; and (b) the closing of a sale of all, substantially all, or a material portion of the assets of the Company taken as a whole, or of any Debtor individually. About Metro Fuel Metro Fuel Oil Corp., is a family-owned energy company, founded in 1942, that supplies and delivers bioheat, biodiesel, heating oil, central air conditioning units, ultra low sulfur diesel fuel, natural gas and gasoline throughout the New York City metropolitan area and Long Island. Owned by the Pullo family, Metro has 55 delivery trucks and a 10 million-gallon fuel terminal in Brooklyn. Financial problems resulted in part from cost overruns in building an almost-complete biodiesel plant with capacity of producing 110 million gallons a year. Based in Brooklyn, New York, Metro Fuel Oil Corp., fka Newtown Realty Associates, Inc., and several of its affiliates filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Lead Case No. 12-46913). Judge Elizabeth S. Stong presides over the case. Nicole Greenblatt, Esq., at Kirkland & Ellis LLP, represents the Debtor. The Debtor selected Epiq Bankruptcy Solutions LLC as notice and claims agent. Th Debtor tapped Carl Marks Advisory Group LLC as financial advisor and investment banker, Curtis, Mallet-Prevost, Colt & Mosle LLP as co-counsel, AP Services, LLC as crisis managers for the Debtors, and appoint David Johnston as their chief restructuring officer. The petition showed assets of $65.1 million and debt totaling $79.3 million. Liabilities include $58.8 million in secured debt, with $48.3 million owing to banks and $10.5 million on secured industrial development bonds. Metro Terminals Corp., affiliate of Metro Fuel Oil Corp., disclosed $38,613,483 in assets and $71,374,410 in liabilities as of the Chapter 11 filing. The U.S. Trustee appointed seven-member creditors committee. Kelley Drye & Warren LLP represents the Committee. MF GLOBAL: Execs, PwC Call Investors' Case Flimsy ------------------------------------------------- Jamie Santo of BankruptcyLaw360 reported that Jon S. Corzine and fellow executives of MF Global Holdings Ltd., along with its former auditor PricewaterhouseCoopers LLP, asked a New York federal judge Wednesday to scuttle a putative class action against them, saying it lacks the facts to support its allegations of wrongdoing. In separate motions to dismiss, the heads of the failed firm and its erstwhile auditor blasted the accusations that they were somehow liable for MF Global's meltdown, each asserting that the suit failed to demonstrate there was anything improper about their actions, the report said. 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. MICHAELS STORES: Reports Holiday Sales of $1.164 Billion -------------------------------------------------------- Michaels Stores, Inc., announced net sales for November and December fiscal periods were $1.164 billion, a 4.6% increase over the same period last year. Same-store sales for the two month period increased 2.4%. On Nov. 1, 2012, the Company redeemed the remainder of its outstanding 13% Subordinated Discount Notes. In addition, during the fourth quarter, the Company prepaid the remaining $292 million of its B-1 Term Loans under its Senior Secured Term Loan Facility using available cash and its Asset-Based Revolving Credit Facility. As of Dec. 29, 2012, the Company had approximately $118 million in cash and $3.02 billion of debt including $125 million outstanding on its revolving credit facility. As a reminder, the Company plans to release its fourth quarter results on Thursday, March 21, 2013, and will conduct a conference call at 8:00 a.m. CT on that date. Those who wish to participate in the call may do so by dialing 866-425-6198, conference ID# 36219948. The conference call will also be webcast at www.michaels.com. To listen to the live call, please go to the Web site at least 15 minutes early to register and download any necessary audio software. The webcast will be accessible for 30 days after the call. About Michaels Stores Headquartered in Irving, Texas, Michaels Stores, Inc., is the largest arts and crafts specialty retailer in North America. As of March 9, 2009, the Company operated 1,105 "Michaels" retail stores in the United States and Canada and 161 Aaron Brothers Stores. The Company's balance sheet at Oct. 27, 2012, showed $1.90 billion in total assets, $4.27 billion in total liabilities, and a $2.37 billion total stockholders' deficit. * * * As reported by the TCR on April 5, 2012, Moody's Investors Service upgraded Michaels Stores, Inc.'s Corporate Family Rating to B2 from B3. "The upgrade of Michaels' Corporate Family Rating primarily reflects the positive benefits of its continuing business initiatives which have led to consistent improvements in same store sales," said Moody's Vice President Scott Tuhy. In the April 16, 2012, edition of the TCR, Standard & Poor's Ratings Services raised its corporate credit rating on Irving, Texas-based Michaels Stores Inc. to 'B' from 'B-'. "Standard & Poor's Ratings Services' upgrade on Michaels Stores reflects the improvement in financial ratios following the company's performance in the important fourth quarter, given the seasonality of the company's business," said Standard & Poor's credit analyst Brian Milligan. "The CreditWatch placement remains effective, given the pending IPO." MICHAELS STORES: Moody's Rates $1.64-Bil. Term Loan Due 2020 'B1' ----------------------------------------------------------------- Moody's Investors Service assigned a B1 (LGD 3, 33%) rating to Michaels Stores, Inc. proposed $1.64 Billion Term Loan due 2020. All other ratings, including the B2 Corporate Family Rating, were affirmed. The rating outlook remains positive. Proceeds from the offering will be used to repay the remaining $1.495 Billion currently outstanding (after the prepayment of $292 million of its B-1 term loan during its fourth fiscal quarter) as well as redeem approximately $137 million of their 11.375% Senior Subordinated notes and to pay related fees and expenses. The rating assigned to the proposed notes are subject to receipt and review of final documentation. The proposed transaction is positive for the company as it will lower the company's overall interest expense while extending its maturity profile. The following rating was assigned: $1,640 million senior secured term loan due 2020 at B1 (LGD 3, 33%) The following ratings were affirmed and LGD assessments amended: Corporate Family Rating at B2 Probability of Default Rating at B2 - PD $1,000 million senior unsecured notes due 2018 at B3 (LGD 5, 77% from LGD 5, 76%) $393 million senior subordinated notes due 2016 at Caa1 (LGD 6, 94%) Speculative Grade Liquidity Rating at SGL-2 The following ratings were affirmed, and are expected to be withdrawn upon repayment following closing of the new Term Loan: $1,495 million senior secured term loan due 2016 at B1 (LGD 3, 34%) RATINGS RATIONALE The B1 rating assigned to the proposed $1.64 billion senior secured term loan is one notch higher than the B2 Corporate Family Rating reflecting its security interest in certain assets of the company and the significant level of junior capital in Michaels' capital structure. Michaels' B2 Corporate Family Rating reflects the company's improving but very sizeable debt burden, with debt/EBITDA of 6.0 times as of October 27, 2012. It also recognizes Michaels' leadership position in the highly fragmented arts and crafts segment, its high operating margins and its good liquidity profile. The rating considers that Moody's believes operational initiatives, such as its direct sourcing initiatives and increasing private label brand penetration, will enable the company to sustain consistently high operating margins. The rating also takes into consideration the company's participation in some segments that have greater sensitivity to economic conditions, such as its custom framing business. The positive rating outlook reflects expectations that the ratings could be upgraded if the company is able to sustain positive trends in sales and maintain its high operating margins while utilizing cash flow to repay debt. The company has reduced debt during 2012, while also showing positive growth in sales and operating earnings. Quantitatively, ratings could be upgraded if debt/EBITDA reached 5.25 times and EBITA/interest expense was sustained above 2.0 times. In view of the positive rating outlook, ratings are unlikely to be downgraded in the near term. If the company was unable to make further progress toward deleveraging over the next 12 to 18 months, or its financial policies became more aggressive (utilizing its cash balance to fund a distribution to shareholders, for example), the rating outlook could be revised to stable. Ratings could be lowered if the company were to see reversal of recent positive trends in sales. Quantitatively, ratings could be lowered if debt/EBITDA were to approach 6.5 times. The principal methodology used in rating Michaels Stores, Inc was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Michaels Stores, Inc. is the largest dedicated arts and crafts specialty retailer in North America. The company operated 1,099 Michaels stores in 49 states and Canada and 127 Aaron Brothers stores as of October 27, 2012. The company primarily sells general and children's crafts, home decor and seasonal items, framing and scrapbooking products. Total sales are in excess of $4 billion. MIR PRINTING: Case Summary & 17 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: MIR Printing & Graphics 21333 Deering Court Canoga Park, CA 91304 Bankruptcy Case No.: 13-10404 Chapter 11 Petition Date: January 18, 2013 Court: U.S. Bankruptcy Court Central District of California (San Fernando Valley) Judge: Victoria S. Kaufman Debtor's Counsel: Ovsanna Takvoryan, Esq. TAKVORYAN LAW GROUP, A PROFESSIONAL CORP 550 N. Brand Boulevard, Suite 1640 Glendale, CA 91203 Tel: (818) 484-8161 Fax: (818) 484-2126 E-mail: ovsanna@takvoryanlawgroup.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 17 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb13-10404.pdf The petition was signed by Robert Mirzakhanian, president. MOMENTIVE PERFORMANCE: Proposes to Issue $1.1-Bil. Senior Notes --------------------------------------------------------------- Momentive Specialty Chemicals Inc. announced that Hexion U.S. Finance Corp., a wholly owned subsidiary of the Company, is proposing to issue $1.1 billion aggregate principal amount of 6.625% First-Priority Senior Secured Notes due 2020 in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended. The Notes will be guaranteed on a senior secured basis by the Company and by certain domestic subsidiaries of the Company. The Company previously issued $450 million aggregate principal amount of 6.625% First-Priority Senior Secured Notes due 2020 and the Notes will constitute a single class of securities with those previously issued notes. The Company also said it has obtained commitments from financial institutions for a new $400 million asset-based revolving loan credit facility, subject to a borrowing base. The ABL Facility will replace the Company's existing senior secured credit facilities and the Company expects to enter into the ABL Facility as soon as practicable following the completion of the Notes offering. Prior to the Company entering into the ABL Facility, the Notes will be secured by first-priority liens, subject to certain exceptions, on certain of the Company's and the guarantors' existing and future domestic assets and will rank pari passu in priority as to that collateral with the Company's senior secured credit facilities. After the Company enters into the ABL Facility, the Notes will have the benefit of a first-priority lien on certain notes priority collateral and a second-priority lien on the ABL priority collateral, in each case subject to certain exceptions. The Company intends to use the net proceeds from the offering of the Notes (i) to repay in full all of the approximately $913 million aggregate principal amount of term loans outstanding under the Company's senior secured credit facilities, (ii) to purchase any and all of its outstanding $120 million aggregate principal amount of Second-Priority Senior Secured Floating Rate Notes due 2014 and (iii) to pay related fees and expenses and for general corporate purposes. The proposed offering of the Notes is subject to market and other conditions, and may not occur as described or at all. The Notes are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors in reliance on Regulation S. The Notes will not be initially registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from registration requirements or a transaction not subject to the registration requirements of the Securities Act or any state securities laws. The Company priced $1.1 billion Senior Secured Notes at an issue price of 100.750%. The closing of the offering of the notes is expected to occur on Jan. 31, 2013, and is subject to customary conditions. Has $120 Million Notes Tender Offer Momentive Specialty has launched a cash tender offer to purchase any and all of the outstanding $120 million aggregate principal amount of Second-Priority Senior Secured Floating Rate Notes due 2014 of its wholly owned subsidiaries, Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC. In connection with the tender offer, the Company is also soliciting consents from holders of the Notes to certain amendments to the indenture and related documents governing the Notes to, among other things, eliminate substantially all of the restrictive covenants contained therein and release collateral. Each holder who validly tenders its Notes and delivers its Consents to the proposed amendments prior to 5:00 p.m., New York City time, on Jan. 30, 2013, unless that time is extended by the Company, will receive, if those Notes are accepted for purchase pursuant to the tender offer, the total consideration of $1,002.50 per $1,000 principal amount of the Notes tendered, which includes $30.00 as the tender offer consideration and $972.50 as a consent and early tender payment. In addition, accrued interest up to, but not including, the applicable payment date of the Notes will be paid in cash on all validly tendered and accepted Notes. The tender offer is scheduled to expire at midnight, New York City time, on Feb. 13, 2013, unless extended or earlier terminated. Holders who validly tender their Notes after the Early Tender Time but on or prior to the Expiration Date will receive the tender offer consideration of $972.50 per $1,000 principal amount of the Notes, plus any accrued and unpaid interest on the Notes up to, but not including, the payment date, but will not receive the consent and early tender payment. In connection with the tender offer, the Company is soliciting consents to amend the indenture pursuant to which the Notes were issued and certain related documents to, among other things, eliminate substantially all of the restrictive covenants, certain events of default and certain other provisions contained in that indenture, and release the collateral securing the Notes. Tendered Notes may be withdrawn at any time prior to the Early Tender Time but not thereafter, except to the extent that the Company is required by law to provide additional withdrawal rights. Holders who validly tender their Notes after the Early Tender Time will receive only the tender offer consideration and will not be entitled to receive a consent and early tender payment if those Notes are accepted for purchase pursuant to the tender offer. Subject to certain terms and conditions, payment of the total consideration or tender offer consideration, as applicable, will occur promptly after the Early Tender Time or Expiration Date, as applicable. In addition, at any time after the Early Tender Time but prior to the Expiration Date, and subject to certain terms and conditions, the Company may accept for purchase Notes validly tendered on or prior to such time and purchase those Notes for the tender offer consideration or total consideration, as applicable, promptly thereafter. The consummation of the tender offer is conditioned upon, among other things, the Company having sufficient funds to pay the total consideration for validly tendered Notes from the issuance of newly issued debt of the Company. If any of the conditions are not satisfied, the Company may terminate the tender offer and return tendered Notes. The Company has the right to waive any of the foregoing conditions with respect to the Notes and to consummate the tender offer. In addition, the Company has the right, in its sole discretion, to terminate the tender offer at any time, subject to applicable law. It is the Company's current intention to redeem any Notes that are not tendered pursuant to the tender offer. J.P. Morgan will act as Dealer Manager and Solicitation Agent for the tender offer for the Notes. Questions regarding the tender offer may be directed to J.P. Morgan at (800) 245-8812 (toll-free) or (212) 270-1200 (collect). Global Bondholder Services Corporation will act as the Information Agent for the tender offer. Requests for the Offer Documents may be directed to Global Bondholder Services Corporation at (212) 430-3774 (for brokers and banks) or (866) 470-3700 (for all others). About Momentive Specialty Momentive Specialty Chemicals, Inc., headquartered in Columbus, Ohio, is a leading producer of thermoset resins (epoxy, formaldehyde and acrylic). The company is also a supplier of specialty resins for inks and specialty coatings sold to a diverse customer base as well as a producer of commodities such as formaldehyde, bisphenol A, epichlorohydrin, versatic acid and related derivatives. Momentive Specialty reported net income of $118 million on $5.20 billion of net sales in 2011, compared with net income of $214 million on $4.59 billion of net sales in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.44 billion in total assets, $4.60 billion in total liabilities and a $1.16 billion total deficit. * * * Momentive Specialty carries a 'B-' issuer credit rating from Standard & Poor's Ratings Services. It has 'B3' corporate family and probability of default ratings from Moody's Investors Service. corporate credit rating from Standard & Poor's. As reported in the Oct. 27, 2010 edition of TCR, Moody's Investors Service assigned a 'Caa1' rating to the guaranteed senior secured second lien notes due 2020 of Momentive Specialty (formerly known as Hexion Specialty Chemicals Inc.). Proceeds from the notes were allocated for the repayment of $533 million of guaranteed senior secured second lien notes due 2014. "With this refinancing Hexion will have refinanced or extended the maturities on the vast majority of the debt that was originally slated to mature prior to 2015. There is less than $600 million of this debt remaining, which should be much easier to for the company to refinance as its credit metrics improve further," stated John Rogers, Senior Vice President at Moody's. MOMENTIVE SPECIALTY: Signs Various Transactions Relating to Notes ----------------------------------------------------------------- Momentive Specialty Chemicals Inc. previously announced that Hexion U.S. Finance Corp. and Hexion Nova Scotia Finance, ULC, each a wholly-owned subsidiary of the Company, issued an additional $200,000,000 aggregate principal amount of 8.875% Senior Secured Notes due 2018, which were issued to lenders in exchange for loans, which were retired in full, of Momentive Specialty Chemicals Holdings LLC, the parent of the Company. On Jan. 14, 2013, the Company entered into the following transactions: (1) A Second Supplemental Indenture governing the Notes, to an indenture, dated as of Jan. 29, 2010, a copy of which is available for free at http://is.gd/Gy4PFr (2) A registration rights agreement pursuant to which the Company and the Note Guarantors will use their commercially reasonable efforts to register with the Securities and Exchange Commission notes having substantially identical terms as the Notes as part of offers to exchange freely tradable exchange notes for Notes within 365 days after any such sale date of the Notes. A copy of the Agreement is available for free at http://is.gd/Z6Mw83 (3) An amendment to its senior secured credit facility, a copy of which is available at http://is.gd/QmzhsM (4) A fifth joinder and supplement to the intercreditor agreement, dated as of Nov. 3, 2006, among JPMorgan Chase Bank, N.A., as intercreditor agent, Wilmington Trust Company, as trustee and collateral agent for the existing floating rate second-priority senior secured notes due 2014 and the 9.00% second-priority senior secured notes due 2020, Wilmington Trust FSB (now known as Wilmington Trust, National Association), as trustee and as collateral agent for the 8.875% senior secured notes due 2018, Holdings, the Company, and each subsidiary of the Company. Under the Joinder to the Second Lien Intercreditor Agreement, the Trustee acknowledged and agreed to act as senior agent under the Second Lien Intercreditor Agreement on behalf of the holders of the Notes. A copy of the Agreement is available at http://is.gd/5Y8V7V About Momentive Specialty Momentive Specialty Chemicals, Inc., headquartered in Columbus, Ohio, is a leading producer of thermoset resins (epoxy, formaldehyde and acrylic). The company is also a supplier of specialty resins for inks and specialty coatings sold to a diverse customer base as well as a producer of commodities such as formaldehyde, bisphenol A, epichlorohydrin, versatic acid and related derivatives. Momentive Specialty reported net income of $118 million on $5.20 billion of net sales in 2011, compared with net income of $214 million on $4.59 billion of net sales in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.44 billion in total assets, $4.60 billion in total liabilities and a $1.16 billion total deficit. * * * Momentive Specialty carries a 'B-' issuer credit rating from Standard & Poor's Ratings Services. It has 'B3' corporate family and probability of default ratings from Moody's Investors Service. corporate credit rating from Standard & Poor's. As reported in the Oct. 27, 2010 edition of TCR, Moody's Investors Service assigned a 'Caa1' rating to the guaranteed senior secured second lien notes due 2020 of Momentive Specialty (formerly known as Hexion Specialty Chemicals Inc.). Proceeds from the notes were allocated for the repayment of $533 million of guaranteed senior secured second lien notes due 2014. "With this refinancing Hexion will have refinanced or extended the maturities on the vast majority of the debt that was originally slated to mature prior to 2015. There is less than $600 million of this debt remaining, which should be much easier to for the company to refinance as its credit metrics improve further," stated John Rogers, Senior Vice President at Moody's. MOOG INC: Moody's Says Notes Repurchase No Impact on 'Ba2' CFR -------------------------------------------------------------- Moody's Investors Service said that Moog Inc.'s announced redemption of its $200 million senior subordinated notes due 2015 is a moderate credit positive, but will have no rating impact. The notes were repurchased at par using proceeds from the company's revolving credit facility. The principal methodology used in rating Moog Inc. was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Moog carries a 'Ba2' corporate family rating with a stable outlook. Moog, Inc., headquartered in East Aurora, NY, is a designer and manufacturer of high performance precision motion control products and systems for aerospace and industrial markets. The company operates within five segments: Aircraft Controls, Space and Defense Controls, Industrial Systems, Components, and Medical Devices. Moog reported last twelve months ended September 30, 2012 revenues of approximately $2.5 billion. MOSS FAMILY: Hires Beachwalk Realty as Broker --------------------------------------------- Moss Family Limited Partnership and Beachwalk, L.P. ask the U.S. Bankruptcy Court for permission to employ Beachwalk Realty LLC as broker to sell property at 101 Cottage Camp, Michigan City, Indiana. The Debtor said in court filings it is in the best interest of the estate to liquidate the asset. About Moss Family Moss Family Limited Partnership and Beachwalk, L.P., filed Chapter 11 petitions (Bankr. N.D. Ind. Case Nos. 12-32540 and 12-32541) on July 17, 2012. Judge Harry C. Dees, Jr., presides over the case. Daniel Freeland, Esq., at Daniel L. Freeland & Associates, P.C., represents the Debtors. The Debtor disclosed $6,609,576 in assets and $6,299,851 in liabilities as of the Chapter 11 filing. The U.S. Trustee has not appointed an official committee of unsecured creditors MUSCLEPHARM CORP: Further Amends 4.5MM Shares Prospectus -------------------------------------------------------- MusclePharm Corporation filed a post-effective amendment no.1 to the Form S-1 regisration statement relating to its offering of up to 1,500,000 shares of its Series D Convertible Preferred Stock, $0.001 par value per share and up to 3,000,000 shares of its common stock, $0.001 par value per share, in which the Series D Preferred Stock is convertible. The Series D Preferred Stock converts at a rate of two shares of common stock for each share of Series D Preferred Stock, subject to adjustment. Further, the conversion of the Series D Preferred Stock is subject to certain ownership limitations. Proceeds will be deposited in an escrow account and returned to investors in full, without interest or deduction, unless the subscribed shares of Series D Preferred Stock are sold during the offering period. Investors will have no right to the return of their funds during the term of the escrow. The Series D Preferred Stock is not listed on an exchange, and the Company does not intend to list the Series D Preferred Stock on any exchange or market. The Company's common stock is presently quoted on the OTCBB under the symbol "MSLP.OB". On Jan. 15, 2013, the last reported sale price for the Company's common stock on the OTC QB was $4.23 per share. The Company has retained placement agents in this offering, with GVC Capital LLC acting as representative of the placement agents. The Company has agreed to pay the placement agents' fees. The placement agents are not required to sell any specific number or dollar amount of its Series D Preferred Stock in this offering, but will use their reasonable best efforts to solicit orders to purchase its Series D Preferred Stock offered. A copy of the amended prospectus is available for free at: http://is.gd/OlRqS3 About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life- style company that develops and manufactures a full line of National Science Foundation approved nutritional supplements that are 100% free of banned substances. MusclePharm is sold in over 120 countries and available in over 5,000 U.S. retail outlets, including GNC and Vitamin Shoppe. MusclePharm products are also sold in over 100 online stores, including bodybuilding.com, Amazon.com and Vitacost.com. The Company reported a net loss of $23.28 million in 2011, compared with a net loss of $19.56 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $7.81 million in total assets, $15.10 million in total liabilities, and a $7.29 million total stockholders' deficit. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $23,280,950 and net cash used in operations of $5,801,761 for the year ended Dec. 31, 2011; and has a working capital deficit of $13,693,267, and a stockholders' deficit of $12,971,212 at Dec. 31, 2011. NCL CORPORATION: S&P Raises Corporate Credit Rating to 'BB-' ------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating on Miami, Fla.-based cruise operator NCL Corp. Ltd. to 'BB-' from 'B+'. S&P removed the ratings from CreditWatch, where they were placed with positive implications on Jan. 9, 2013. The outlook is stable. At the same time, S&P raised the issue-level rating on the first- lien senior secured notes due 2016 one notch to 'BB+' from 'BB'. The recovery rating on this debt remains '1', indicating S&P's expectation for very high (90% to 100%) recovery for noteholders in the event of default. "We also raised the issue-level rating on the senior notes due 2018 one notch to 'BB-' from 'B+' and revised the recovery rating on this debt to '3' (50% to 70% recovery expectation) from '4' (30% to 50% recovery expectation). Recovery prospects for the 2018 notes have improved enough to warrant an upward revision in the recovery rating following anticipated debt repayment from the IPO proceeds," S&P noted. "The action follows the completion of the company's IPO of common stock, which generated $447 million in gross proceeds not including the underwriters' overallotment, which will be used for debt repayment," said Standard & Poor's credit analyst Emile Courtney. "This will result in a significant reduction in debt and a moderate decrease in interest expense, and an improved financial risk assessment on the company. Following the IPO, our expectation for lease and port commitment-adjusted debt to EBITDA in 2013 will improve to the high-4x area from the high-5x area previously, and our expectation for funds from operation (FFO) to total adjusted debt will improve to around 16% in 2013 from the low-teens percentage area previously. In addition, we believe that EBITDA coverage of interest expense will improve to about 4x in 2013. These leverage and coverage measures would be in line with an "aggressive" financial risk assessment, in our view, compared with a "highly leveraged" financial risk assessment previously. Additionally, anticipated leverage measures in 2013 after debt repayment from IPO proceeds would represent a good cushion compared with the 5.5x threshold for debt to EBITDA and the 15% threshold for FFO to total debt that we believe are in line with the 'BB-' rating on NCL," S&P added. The 'BB-' corporate credit rating on Miami, Fla.-based NCL Corp. Ltd. reflects Standard & Poor's Ratings Services' assessment of the company's financial risk profile as "aggressive" and S&P's assessment of its business risk profile as "fair," according to its criteria. S&P's assessment of NCL's business risk profile as fair is based on its position as the third largest cruise operator in the North American market (behind Carnival Corp. and Royal Caribbean Cruises Ltd.), significant capital requirements to fund new ship building, an inability to pull back spending once a ship order is committed, and the cruise industry's sensitivity to the economic cycle. Management's success in executing operating improvements over the past few years partly offsets these risk factors. "We believe the cruise sector has, to a large extent, recovered from the impact of the Costa Concordia grounding and should experience low-single-digit net yield growth in 2013. We believe NCL's future bookings pertaining to 2013 itineraries are pricing better compared with the prior-year period. For 2013, we have incorporated into the ratings an expectation of a low-single-digit increase in net revenue yield and a low-teen percentage EBITDA increase factoring in capacity growth due to the scheduled April 2013 delivery of Norwegian Breakaway. Downside risks to our performance expectation for NCL stem primarily from slowing economic growth and sovereign debt issues in Europe," S&P added. NEW ORLEANS AUCTION: Seller of Chinese Seal Wins $8,325 Judgment ---------------------------------------------------------------- Bankruptcy Judge Elizabeth W. Magner granted Kurt Wille, who entered into an agreement with New Orleans Auction Galleries, Inc., in late 2010 for the sale of several consigned items in a January 2011 auction, including a Chinese Seal, judgment for $8,325 against the trust liquidating the gallery's assets. The Court denied Mr. Wille's request for leave to file a proof of claim and another request to compel return of property. Mr. Wille has not received any payment from the gallery for the sale of the Chinese Seal. A copy of the Court's Jan. 15, 2013 Reasons For Decision is available at http://is.gd/2YMO23from Leagle.com. Based in New Orleans, Louisiana, New Orleans Auction Galleries Inc. filed for Chapter 11 bankruptcy protection on April 1, 2011 (Bankr. E.D. La. Case No. 11-11068). Judge Elizabeth W. Magner presides over the case. Stewart F. Peck, Esq., Christopher T. Caplinger, Esq., and Joseph Patrick Briggett, Esq., at Lugenbuhl Wheaton Peck Rankin & Hubbard, represent the Debtor. The Debtor selected Pontchartrain Financial LLC as financial advisor, and Patrick Gros CPA as accountant. The Debtor estimated assets of $100,000 and $500,000, and debts of $1 million and $10 million. The gallery's assets were purchased by Cakebread Art Antiques Collectables, Inc., a firm owned by Houston businesswoman Susan Krohn, at an auction on June 1, 2012. Auction Central News reports that the purchase price was not disclosed, although there has been speculation within New Orleans' antiques trade that it was in the vicinity of $1.5 million. NOA's Disclosure Statement was approved on April 26, 2012. NOA's Sixth Amended Plan of Reorganization with Immaterial Modifications was confirmed on June 1, 2012. As part of its Plan, NOA sold substantially all of its assets. Priority, administrative and secured claims were paid following the sale. NOA established the NOAG Litigation Trust for the purpose of liquidating any remaining assets and distributing the residual sale proceeds to unsecured claimants. David Adler, was appointed Trustee of the Trust. NEWLEAD HOLDINGS: Enters Into Coal Reserve Property Agreement ------------------------------------------------------------- NewLead Holdings Ltd. on Jan. 17 disclosed that the Company has entered into an agreement to acquire title and excavation rights in properties containing 18.6 million tons of estimated coal reserves for $11.0 million. NewLead also entered into an agreement to acquire ownership and leasehold interests in properties containing approximately 143.1 million tons of coal for $55.0 million. Michael Zolotas, President and Chief Executive Officer of NewLead, stated, "We have expanded our recently launched commodities business with the agreement to acquire an estimated 18.6 million tons of coal reserves. We are in the process of acquiring additional coal properties with reserves estimated at approximately 143.1 million tons. Once we have acquired all of the assets, our coal reserves will consist primarily of sub bituminous B coal, which is 13,500 BTU with low sulfur. We will also have 'Blue Gem' and 'Rich Mountain' seams of coal, highly sought after in the international market. We believe that our international shipping expertise will allow us to exploit the demand for these coal reserves." Michael Zolotas continued, "In entering the mining business, we undertook to secure supply contracts for the coal reserves. Consequently, we entered into two agreements to supply coal to third parties. These agreements are expected to generate $873.5 million of revenue over a three-year period. Based on our projections of operating costs, we believe that these sales will have healthy margins and will generate significant cash flow with which to fund continued growth. We intend to supplement the supply agreements by allowing contract miners to mine and pay us a royalty for coal removed." Coal and Natural Gas Reserve Acquisitions As of December 28, 2012, NewLead entered into an agreement to acquire title and mineral excavation rights to 5,000 acres of land in Kentucky. The coal reserves in these properties are estimated to be approximately 18.6 million tons. The transaction is subject to execution and delivery of certain definitive agreements and other closing conditions, but is currently expected to close by January 29, 2013. There can be no assurance that the transaction will be consummated. The consideration of $11.0 million was paid in the form of notes maturing on January 29, 2013. The notes do not accrue interest, but remain subject to a guaranty by the initial purchaser and are secured by a mortgage lien and a security interest in the assets being purchased. NewLead has also entered into an agreement to acquire ownership and leasehold interests in 18,335 acres in Tennessee containing coal and natural gas and other natural resources. The agreement contemplates that the Company will acquire rights, title, permits and leases to coal mines with total reserves estimated at 143.1 million tons. The transaction is subject to execution and delivery of certain definitive agreements and other closing conditions, but is currently expected to close in February 2013. There can be no assurance that the transaction will be consummated. The agreement contemplates that consideration of $55.0 million shall be payable in cash in two installments; $30.0 million at closing and the remaining $25.0 million on the first anniversary of the closing. The estimated reserves stated above are as determined by independent appraisals. The methodology used by the independent appraisers was not compliant with the methodology required by the Securities and Exchange Commission ("SEC") in reserve reports and, accordingly, should not be relied upon. Such reserve information is only provided to give the best currently available information. NewLead is undertaking to obtain reserve reports that comply with SEC methodology. Such reports may differ materially from the information provided herein. The properties in Tennessee and Kentucky also include natural gas wells and projects relating to extraction of timber, sand, gravel, fly ash and dimension stone. Third parties are currently extracting these commodities on the properties and paying royalties. Coal Supply Contracts NewLead signed two coal supply contracts with creditworthy counterparties for the sale of coal to such parties. Annual revenue from these two contracts is expected to be $184.7 million in the first year, $318.4 million in the second year and $370.4 million for the third and final year. The first contract provides for the sale of 70,000 tons of coal per month for the first 12 months (840,000 tons annually), increasing to 140,000 tons per month for the second year (1.68 million tons annually) and 210,000 tons per month for the third year (2.52 million tons annually). All tonnage is subject to a variation of 5%. The price was established based on the prevailing market price for coal at the time the contract was entered into. The second contract provides for the sale of 130,000 metric tons per month for the first 12 months (1.56 million metric tons annually), increasing to 210,000 metric tons per month for the second and third years (2.52 million metric tons annually). All tonnage is subject to a variation of 5%. The price was established based on the prevailing market price for coal at the time the contract was entered into. NewLead intends to source the coal to meet such contracts from the estimated reserves discussed above, but to the extent it is unable to do so, it will be required to seek to source the coal from other suppliers at the prevailing prices. Management Company NewLead also entered into an agreement to acquire a local coal mining management company in exchange for compensation, paid in the form $3.0 million in common shares of NewLead and a warrant for $6.4 million in common shares of NewLead. Such acquisition is subject to a number of terms and conditions and there is no assurance it will be consummated. The management company shall be responsible for managing the daily operations of the coal mines and the excavation of the coal from the properties. About NewLead Holdings NewLead Holdings Ltd. -- http://www.newleadholdings.com-- is an international, vertically integrated shipping company that owns and manages product tankers and dry bulk vessels. NewLead currently controls 22 vessels, including six double-hull product tankers and 16 dry bulk vessels of which two are newbuildings. N ewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. PricewaterhouseCoopers S.A. in Athens, Greece, said in a May 15, 2012, audit report NewLead Holdings Ltd. has incurred a net loss, has negative cash flows from operations, negative working capital, an accumulated deficit and has defaulted under its credit facility agreements resulting in all of its debt being reclassified to current liabilities. These raise substantial doubt about its ability to continue as a going concern, PwC said. NINNEKAH QUICK: 10th Cir. Rules on Absolute Priority Rule --------------------------------------------------------- The case, DILL OIL COMPANY, LLC; DANNY DILL; NANCY DILL, Appellants, v. ARVIN E. STEPHENS; KAREN J. STEPHENS, f/d/b/a Ninnekah Quick Mart, Appellees, NATIONAL ASSOCIATION OF CONSUMER BANKRUPTCY ATTORNEYS, Amicus Curiae, No. 11-6309 (10th Cir.), presents an issue of first impression for the Tenth Circuit: whether the 2005 amendments to the Bankruptcy Code exempt individual Chapter 11 debtors from the absolute priority rule. The bankruptcy court answered this question in the affirmative. It confirmed the Debtors' proposed plan of reorganization over certain creditors' objections that the plan violated the absolute priority rule. On appeal, the bankruptcy appellate panel certified the case for direct appeal. Exercising jurisdiction under 28 U.S.C. Section 158(d)(2)(A) and 158(a)(1), a three-judge panel of the Tenth Circuit reversed the bankruptcy court's order confirming the plan and remand for further proceedings. Arvin E. Stephens and Karen J. Stephens, f/d/b/a/ Ninnekah Quick Mart, LLC, filed for relief under Chapter 11 of the Bankruptcy Code on June 30, 2010. The Debtors owned a chain of convenience stores for which Dill Oil Company LLC was the primary supplier of gasoline and gas station products. Dill Oil and Danny and Nancy Dill objected to confirmation of the Debtors' proposed plan of reorganization filed Dec. 30, 2010, on the ground that the plan violated the absolute priority rule, which bars junior claimants, including debtors, from retaining any interest in property when a dissenting class of senior creditors has not been paid in full. Due to the rising price of gas and a diminishing customer base, the Debtors' stores began operating at a loss. Eventually, the Debtors became liable to the Dills for approximately $1.8 million. In December 2008, the Debtors executed mortgages in favor of the Dills on various tracts of real estate, including a house and farmlands. The Dills' mortgages, however, were subordinate to existing mortgages on the properties. Pursuant to the plan, the Dills would be paid approximately $15,000 as a secured creditor, but their remaining claim would be considered unsecured. The Debtors would retain possession and control of their property; the Dills would receive a monthly payment for five years, totaling about 1% of their unsecured claim. Because their vote constituted approximately 96% of Class 8's claims, the Dills' rejection precluded approval of the plan under 11 U.S.C. Sec. 1129(a). On May 20, 2011, the bankruptcy court entered an order confirming the plan under Sec. 1129(b)'s "cram down" mechanism. The Dills argued that the plan was unconfirmable because it violated the absolute priority rule. The bankruptcy court rejected this contention, holding instead that the plain language of the Bankruptcy Abuse Prevention and Consumer Protection Act abrogated the absolute priority rule as to individual Chapter 11 debtors. The Dills timely filed a notice of appeal on June 1, 2011, seeking reversal of the confirmation order. The Dills proceeded to the bankruptcy appellate panel, which sua sponte issued a certification of final order for direct appeal to the Tenth Circuit based on its determination that the case presents a question of public importance for which there is no controlling law. The Bankruptcy Appellate Panel for the Ninth Circuit and five bankruptcy courts (one of which was affirmed by a district court) have adopted a "broad view," holding that the BAPCPA amendments eliminate the absolute priority rule as applied to an individual's entire estate. In contrast, the Fourth Circuit and 17 bankruptcy courts have reached the opposite conclusion, holding that the BAPCPA amendments only exempt from the absolute priority rule that property which 11 U.S.C. Sec. 1115 adds to an individual estate -- not the pre-petition property already defined by Sec. 541. In other words, Sec. 1115 includes only post-petition property and earnings. Advocates of the broad view emphasize that the BAPCPA amendments evince an intent to model Chapter 11 on Chapter 13, which has no absolute priority rule. They also emphasize that abolishing the absolute priority rule with respect to individual debtors does not leave unsecured creditors without any power or protection. Instead, unsecured creditors can rely on the safeguards of Sec. 1129(a)(15)'s disposable income test. In contrast, those ascribing to the narrow view argue that, "[e]ach one of these new provisions," even where modeled on Chapter 13, "appears designed to impose greater burdens on individual chapter 11 debtor's rights so as to ensure a greater payout to creditors." Narrow view proponents urge that if Congress intended to abolish the absolute priority rule with respect to individual debtors, "it would have done so in a far less convoluted way." Congress could have raised Chapter 13's debt ceiling or expressly exempted individual debtors at the beginning of Sec. 1129(b)(2)(B)(ii). Moreover, BAPCPA's legislative history lists several debtor protections but makes no mention of eliminating the absolute priority rule. Advocates for the narrow view argue that, had Congress intended such a drastic change, it surely would have included the amendment in its list of debtor protections. Instead, the amendments are best understood as preserving the status quo. "Because both the statutory language and Congress's intent are ambiguous, we heed the presumption against implied repeal," the Tenth Circuit said. "The statutory language and legislative history lack any clear indication that Congress intended to erode a pillar of creditor bankruptcy protection." The absolute priority rule originated in the late 1800s as a judicial invention that was primarily employed in the context of railroad reorganizations. A copy of the Tenth Circuit's Jan. 15, 2013 opinion is available at http://is.gd/YWTRRcfrom Leagle.com. NTP MARBLE: Meeting to Form Creditors' Panel on Feb. 1 ------------------------------------------------------ Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on Feb. 1, 2013, at 10:00 a.m. in the bankruptcy case of NTP Marble Inc. 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. NTP Marble Inc. dba Colonial Marble & Granite filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 13-10087) on Jan. 4, 2011 in Philadelphia, Pennsylvania Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, P.C, in Philadelphia, serves as counsel to the Debtor. The Debtor estimated $1 million to $10 million in assets and $1 million to $10 million in liabilities. O&G LEASING: Indenture Trustee Withdraws First Amended Plan ----------------------------------------------------------- First Security Bank, the indenture trustee for holders of prepetition debentures, notified the U.S. Bankruptcy Court for the Southern District of Mississippi that it has: -- withdrawn its First Amended Chapter 11 Plan for O&G Leasing, LLC and Performance Drilling Company, LLC; and -- terminated the Asset Purchase Agreement with Hunter Drilling, LLC and Red Mountain Resources, Inc. The Court has held in abeyance, pending further order of the Court, the Indenture Trustee's motion for appointment of a Chapter 11 trustee. In its motion seeking a trustee, First Security claimed that: 1. The Debtors have failed to demonstrate that they have the ability to obtain a confirmed plan within a reasonable period of time; 2. Past and present performance of the Debtors and little prospect for the Debtors' rehabilitation; and 3. The Debtors have failed to communicate with their primary secured creditor concerning the collateral, operations and other matters. Competing plans were proposed by the Debtor and First Security. The Indenture Trustee's plan contemplates that Red Mountain Resources or its newly formed subsidiary Hunter Drilling, will purchase the Debtors' assets. The Debtor's plan promises to pay general unsecured creditors at the rate of $100,000 per quarter so that those creditors are paid in full within six or seven quarters, whereas more senior creditors (Class 2 2009 Senior Debentures and Class 4 2009 Subordinated Debentures) are to be paid over 8 and 10 years, respectively. About O&G Leasing Jackson, Mississippi-based O&G Leasing, LLC, was formed in 2006 to acquire and construct land drilling rigs that it would lease to its wholy-owned subsidiary, Performance Drilling Company, LLC. Performance was formed to provide contract drilling services for tArkLaTex (Arkansas, Louisiana and Eastern Texas) region, as well as Alabama, Florida, Mississippi and Oklahoma. The Company filed for Chapter 11 bankruptcy protection on May 21, 2010 (Bankr. S.D. Miss. Case No. 10-01851). Douglas C. Noble, Esq., at McCraney, Montagnet Quin & Noble, PLLC, in Ridgeland, Mississippi, assists the Debtor in its restructuring effort. BMC Group, LLC, serves as the Debtor's voting agent. The Debtor estimated $10 million to $50 million in assets and $50 million to $100 million in debts. Performance filed a separate petition for Chapter 11 relief (Bankr. S.D. Miss. Case No. 10-01852) on May 21, 2010. Performance estimated assets and debts of between $1,000,000 and $10,000,000 in its petition. The Debtors filed on July 1, 2011, their Plan of Reorganization [Dkt #407] and an accompanying Disclosure Statement [Dkt #408] for which approval is being sought pursuant to Section 1125 of the Bankruptcy Code. First Security Bank, as Trustee, filed on July 22, 2011, its Indenture Trustee's Chapter 11 Plan [Dkt #423], and an accompanying Disclosure Statement for Its Chapter 11 Plan [Dkt #425] on July 26, 2011, for which approval is also being sought pursuant to Section 1125 of the Bankruptcy Code. OMEGA NAVIGATION: Compromise Denied, Settlement Approved -------------------------------------------------------- BankruptcyData reported that U.S. Bankruptcy Court issued an order denying Omega Navigation Enterprises' application, pursuant to Bankruptcy Rule 9019, to compromise controversy regarding an insider settlement. The controversy, according to the report, relates to George Kassiotis (who previously served as Omega's president, C.E.O. and a director), his proof of claim for unpaid prepetition wages and a $5.5 million promissory. The Company's junior lenders had objected to the motion and its official committee of unsecured creditors had filed a conditional objection. Separately, the Court approved the Company's motion to approve a settlement agreement with senior lenders, the BankruptcyData report said. According to documents filed with the Court, "the Debtors have proposed a Settlement Agreement with the Senior Lenders that, as granted herein, fully resolves the Senior Lender Dispositive Motions, the Administrative Claim Motion, the Greece Litigation, the English Litigation and the Show Cause Order, as well as rendering moot the Senior Lenders' pending appeal of this Court's Order denying the Senior Lender 2011 Motions," the report related. The order continues, "This Court acknowledges the Debtors' representation that it is highly desirable to achieve a fair 'walk-away' resolution for both the Debtors and the Senior Lenders. Based on its independent observations over the 18-month course of these cases, this Court accepts such representations as being made in good faith," the report added. About Omega Navigation Athens, Greece-based Omega Navigation Enterprises Inc. and affiliates, owner and operator of tankers carrying refined petroleum products, filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 11-35926) on July 8, 2011, in Houston, Texas in the United States. Omega is an international provider of marine transportation services focusing on seaborne transportation of refined petroleum products. The Debtors disclosed assets of US$527.6 million and debt totaling US$359.5 million. Together, the Debtors wholly own a fleet of eight high-specification product tankers, with each vessel owned by a separate debtor entity. HSH Nordbank AG, as the senior lenders' agent, has first liens on vessels to secure a US$242.7 million loan. The lenders include Bank of Scotland and Dresdner Bank AG. The ships are encumbered with US$36.2 million in second mortgages with NIBC Bank NV as agent. Before bankruptcy, Omega sued the senior bank lenders in Greece contending they violated an agreement to grant a three year extension on a loan that otherwise matured in April 2011. An affiliate of Omega that manages the vessels didn't file, nor did affiliates with partial ownership interests in other vessels. Judge Karen K. Brown presides over the case. Bracewell & Giuliani LLP serves as counsel to the Debtors. Jefferies & Company, Inc., is the financial advisor and investment banker. The Official Committee of Unsecured Creditors has tapped Winston & Strawn as local counsel; Jager Smith as lead counsel; and First International as financial advisor. OVERSEAS SHIPHOLDING: Sr. Lenders Object to CEXIM & DSF Financing ----------------------------------------------------------------- BankruptcyData reported that Overseas Shipholding Group's working group of senior lenders under the 2006 credit agreement filed with the U.S. Bankruptcy Court a limited objection to the CEXIM and DSF financing motions. Documents filed with the Court explain, "Although the Working Group understands that the Debtors are seeking to preserve the value of the CEXIM and DSF vessels, this option must be effectuated in a manner that provides OIN (as the proposed DIP lender) with market terms that a third party DIP lender would be willing to accept. Notably, the CEXIM and DSF Debtors are special purpose entities whose sole purpose is to own vessels and therefore these Debtors have no other material assets. Merely providing OIN with pari passu liens on these vessels is not enough and the Working Group submits that in these circumstances any third party DIP lender would insist on priming liens particularly when there is ample evidence that the prepetition secured lenders," the report related. About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012. Bankruptcy Judge Peter J. Walsh oversees the case. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. Cleary Gottlieb Steen & Hamilton LLP serves as OSG's Chapter 11 counsel, while Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC will provide certain administrative services. The Debtors disclosed $4.15 billion in assets and $2.67 billion in liabilities as of June 30, 2012. Liabilities include $1.49 billion on an unsecured credit agreement with DNB Bank ASA as agent. In addition to the secured Chinese loan, there is $518 million in unsecured notes and debentures plus $267 million on ship mortgages taken down to finance nine vessels. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed a five-member official committee of unsecured creditors in the case of Overseas Shipholding Group Inc. PEARLMONT LLC: Chapter 11 Case Summary & Unsecured Creditor ----------------------------------------------------------- Debtor: Pearlmont LLC 71 Montvale Avenue Montvale, NJ 07645 Bankruptcy Case No.: 13-10964 Chapter 11 Petition Date: January 18, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Rosemary Gambardella Debtor's Counsel: Leonard S. Singer, Esq. ZAZELLA & SINGER, ESQS. 36 Mountain View Boulevard Wayne, NJ 07470 Tel: (973) 696-1700 Fax: (973) 696-3228 E-mail: zsbankruptcy@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Alfred R. Caggia, member. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Borough of Montvale -- $12,000 Mercedes Drive Montvale, NJ 07645 PEDEVCO CORP: To Further Restate 2011 Report to Correct Errors -------------------------------------------------------------- On May 23, 2012, the Board of Directors of PEDEVCO CORP., formerly Blast Energy Services, Inc., concluded that the consolidated financial statements of the Company for the year ended Dec. 31, 2011, should no longer be relied upon and should be restated in order to correct two errors discovered subsequent to their original issuance. These errors were as follows: * $87,668 of improperly deferred costs associated with the Eagle Ford Asset acquisition. * $19,200 of improper intercompany profit eliminations related to intercompany transactions between Condor Energy Technology LLC and the Company. On Dec. 12, 2012, the Board of Directors of the Company concluded that the consolidated financial statements of the Company for the year ended Dec. 31, 2011, should no longer be relied upon and should be restated in order to correct the Company's accounting for the fully vested non-forfeitable stock award issued to investor relations consultants. The Company originally recorded the $69,667 value of the award as a stock service receivable in the balance sheet as performance was not required until the Company had completed a reverse merger transaction, at which time the 18 month service period would commence. Because the award is fully vested and non-forfeitable and the Company has no ability to compel specific performance, the Company reconsidered its accounting for this transaction and concluded that the appropriate treatment should have been to expense the value of the award in full. These consolidated financial statements are being restated to reflect this correction. As a result, the Company intends to restate its consolidated balance sheet and consolidated statement of operations. A copy of the filing is available for free at: http://is.gd/lVMRXw About PEDEVCO Corp. PEDEVCO Corp., d/b/a Pacific Energy Development (OTCBB:PEDO) is a publicly-traded energy company engaged in the acquisition and development of strategic, high growth energy projects, including shale oil and gas assets in the United States and Pacific Rim countries. The company's producing assets include its Niobrara Asset located in the DJ Basin in Colorado, the Eagle Ford Asset in McMullen County, Texas, and the North Sugar Valley Field located in Matagorda County, Texas. The company was founded in early 2011 and has offices in Danville, California and Beijing, China. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, GBH CPAs, PC, in Houston, Texas, expressed substantial doubt about Blast Energy Services' ability to continue as a going concern. The independent auditors noted that Blast incurred a loss from continuing operations for 2011, and has an accumulated deficit at Dec. 31, 2011. The Company reported a net loss of $4.14 million in 2011, compared with a net loss of $1.51 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $11.62 million in total assets, $3.96 million in total liabilities, $1.25 million in redeemable series A convertible preferred stock, and $6.41 million in total stockholders' equity. PEDEVCO CORP: Files 2nd Amendment to Form S-1 Prospectus -------------------------------------------------------- Pedevco Corp., formerly known as Blast Energy Services Inc., filed with the U.S. Securities and Exchange Commission amendment no.2 to the Form S-1 registration statement relating to the offering of an undertermined shares of the Company's common stock. The Company's common stock is quoted on the OTC Bulletin Board under the symbol "PEDO." On Jan. 11, 2013, the last reported bid price per share of the Company's common stock as quoted on the OTCBB was $2.15. The Company intends to apply to list its common stock on the NYSE MKT. A copy of the amended prospectus is available for free at: http://is.gd/CuuLHt About PEDEVCO Corp. PEDEVCO Corp., d/b/a Pacific Energy Development (OTCBB:PEDO) is a publicly-traded energy company engaged in the acquisition and development of strategic, high growth energy projects, including shale oil and gas assets in the United States and Pacific Rim countries. The company's producing assets include its Niobrara Asset located in the DJ Basin in Colorado, the Eagle Ford Asset in McMullen County, Texas, and the North Sugar Valley Field located in Matagorda County, Texas. The company was founded in early 2011 and has offices in Danville, California and Beijing, China. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, GBH CPAs, PC, in Houston, Texas, expressed substantial doubt about Blast Energy Services' ability to continue as a going concern. The independent auditors noted that Blast incurred a loss from continuing operations for 2011, and has an accumulated deficit at Dec. 31, 2011. The Company reported a net loss of $4.14 million in 2011, compared with a net loss of $1.51 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $11.62 million in total assets, $3.96 million in total liabilities, $1.25 million in redeemable series A convertible preferred stock, and $6.41 million in total stockholders' equity. PENNFIELD CORP: Cargill Completes Asset Purchase Agreement ---------------------------------------------------------- Cargill on Jan. 17 disclosed that it has secured the winning bid to complete the acquisition of two animal feed mills from Lancaster, Pa.-based Pennfield Corporation for $9.8 million in a bankruptcy proceeding. The acquisition will be finalized Jan. 21, 2013, and Cargill will assume ownership. Under terms of the agreement, Cargill acquired Pennfield's animal feed mills and associated assets located in Mount Joy and Martinsburg, Pa. To facilitate the sale of its assets, Pennfield filed voluntary Chapter 11 Bankruptcy petitions in U.S. Bankruptcy court for the Eastern District of Pennsylvania in October 2012. Cargill's preliminary bid was filed with the bankruptcy court on Dec. 28, 2012. The judge then set a court date of Jan. 17, 2013, to allow for a simultaneous live auction of other bids received during the interim time frame and a confirmation of the ultimate bid which would provide the best combination of fit and value for the secured creditors in the bankruptcy estate. "We are thrilled to add Pennfield's state-of-the-art facilities and knowledgeable employees to the Cargill family," said Rob Sheffer, group director, for Cargill's Northeast region. "The deal not only expands our footprint in the region but it also provides us with additional capabilities and opportunities to serve new customer segments and enhance our offerings for existing customers in the region." Jennifer Horn, former director of administration and family member of Pennfield will join Cargill as administration team lead, where she will be responsible for overseeing Pennfield customer and employee communications. "We believe the employees and customers of Pennfield could not have received a better outcome than being part of the Cargill family," Ms. Horn said. "Cargill is not only a market leader but also a family-owned organization that shares the same values and commitment to providing the best products for our customers." About Cargill Cargill -- http://www.cargill.co-- is an international producer and marketer of food, agricultural, financial and industrial products and services. Founded in 1865, the privately held company employs 142,000 people in 65 countries. About Pennfield Corporation Pennfield Corporation and Pennfield Transport Company filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 12-19430 and 12-19431) on Oct. 3, 2012, in Philadelphia. Founded in 1919, Pennfield is a Lancaster, Pennsylvania-based manufacturer of bulf and bagged feeds for dairy, equine and other commercial and backyard livestock. The company owns and operates three production mills located in Mount Joy, Martinsburg, and South Montrose, in Pennsylvania. The Debtors filed for bankruptcy to sell their assets to Carlisle Advisors, LLC, subject to higher and bettr offers. Carlisle has also agreed to provide a $2.0 million DIP Loan. Judge Bruce I. Fox presides over the case. Attorneys at Maschmeyer Karalis P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Skadden, Arps, Slate, Meagher & Flom LLP is the special counsel. Groom Law Group, Chartered, is the employee benefits counsel. AEG Partners LLC is the financial advisor. Lakeshore Food Advisors, LLC, is the investment banker. Pennfield filed official lists showing assets of $7.2 million and liabilities totaling $26.1 million, including $11.3 million in secured claims. Debt includes $10 million owing to secured lender Fulton Bank NA. PENSON WORLDWIDE: Meeting to Form Creditors' Panel Tomorrow ----------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on Jan. 23, 2013, at 1:00 p.m. in the bankruptcy case of Penson Worldwide, Inc., et al. The meeting will be held at: J. Caleb Boggs Federal Building 844 King Street, Room 2112 Wilmington, DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company?s products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PINNACLE AIRLINES: Path From Chapter 11 May Run Through Delta Air ----------------------------------------------------------------- Reuters reported that Pinnacle Airlines Corp won bankruptcy court approval for agreements that it said pave the way for the regional carrier to emerge from Chapter 11 as a unit of Delta Air Lines. U.S. Bankruptcy Court Judge Robert Gerber signed an order that allows Pinnacle to form a restructuring accord with Delta, the report related. The carrier's reorganization plan, which will allow Delta to acquire equity in Pinnacle after Pinnacle emerges from bankruptcy, must be filed by Feb. 15. Pinnacle's new business plan calls for it to operate 81 two-class regional jets for Atlanta-based Delta. The Memphis, Tennessee, regional carrier filed for Chapter 11 in April 2012, pressured by debt and high fuel prices. At the time of the filing, Pinnacle said it would rework contracts with Delta and end the flying it had done for United Airlines and US Airways Group, Reuters recalled. Reuters said the judge also approved an amendment to Pinnacle's debtor-in-possession credit facility that provides $30 million of additional liquidity for continued operation and an additional $22 million to pay pilots. A new labor pact with Pinnacle's pilots was also approved. Without the agreements, Pinnacle would face "significant risk" of having to cease operations by February, the carrier said in its motion, Reuters noted. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. As of Oct. 31, 2012, the Company had total assets of $800.33 million, total liabilities of $912.77 million and total stockholders' deficit of $112.44 million. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. The official committee of unsecured creditors tapped Morrison & Foerster LLP as its counsel, and Imperial Capital, LLC, as financial advisors. POWERWAVE TECHNOLOGIES: Amends Q3 Form 10-Q to Address Comments --------------------------------------------------------------- Powerwave Technologies, Inc., has amended its quarterly report on Form 10-Q for the fiscal period ended Sept. 30, 2012, for the sole purpose of re-filing Exhibit 10.1 that was originally filed with the original Form 10-Q to address comments the Company received from the Staff of the Commission in response to a confidential treatment request filed by the Company with respect to certain portions of Exhibit 10.1. No other changes have been made to the Form 10-Q. The Amendment speaks as of the original filing date of the Form 10-Q, does not reflect events occurring after the original filing date or modify or update those disclosures that may be affected by subsequent events, and no other changes are being made to any other disclosure contained in the Form 10-Q or any exhibits. As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by the Company's principal executive officer and principal financial officer are being filed as exhibits to the Amendment pursuant to Rule 13a-14(a) of the Exchange Act. However, the Company is not including certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as no financial statements are being filed with this Amendment. A copy of Exhibit 10.1 (Credit Agreement) is available at: http://is.gd/k2o5DJ About Powerwave Technologies Powerwave Technologies, Inc., headquartered in Santa Ana, Calif., is a global supplier of end-to-end wireless solutions for wireless communications networks. The Company has historically sold the majority of its product solutions to the commercial wireless infrastructure industry. According to the quarterly report for the period ended July 1, 2012, the Company has experienced significant recurring net losses and operating cash flow deficits for the past four quarters. The Company's ability to continue as a going concern is dependent on many factors, including among others, its ability to raise additional funding, and its ability to successfully restructure operations to lower manufacturing costs and reduce operating expenses. The Company's balance sheet at Sept. 30, 2012, showed $213.45 million in total assets, $396.05 million in total liabilities and a $182.59 million total shareholders' deficit. PRINCE SPORTS: Settles Tennis Net Patent Fight with Wilson ---------------------------------------------------------- Bill Donahue of BankruptcyLaw360 reported that Wilson Sporting Goods Co. has agreed to drop claims that bankrupt Prince Sports Inc. infringed its patented design for portable tennis and vollyball nets, according to settlement documents filed Thursday. The two companies filed a joint motion in Illinois federal court asking that the case be dismissed, but offered no details on the terms of the agreement, the report said. Neither company answered requests Friday for more information on the settlement, BLaw360 noted. About Prince Sports Prince Sports, Inc. and its U.S. affiliates filed voluntary petitions for Chapter 11 reorganization (Bankr. D. Del. Lead Case NO. 12-11439) on May 1, 2012, with a Chapter 11 plan that contemplates the transfer of ownership to Authentic Brands Group (ABG)-Prince LLC. Founded in 1970, Prince Sports has a 42-year track record of developing premium quality products for the racquet sports industry. The Company pioneered many innovative designs, including the "oversized" racquet, the "longbody" racquet, and technology for racquet applications such as Triple Threat, 03 and EX03. Prince sells its products through brands like "Ektelon," which sells racquetball racquets, footwear and gloves and "Viking Athletics," through which it sells platform tennis paddles, balls and gloves. Prince is distributed in over 100 countries. Lincolnshire Management Inc. acquired Prince from Benneton Group, the parent company of United Colors of Benneton, in 2003. Lincolnshire Management sold Prince to Nautic Partners in August 2007. The Debtor has a Chapter 11 plan where (ABG)-Prince LLC, which acquired the secured debt from GE Capital and Madison Capital, will be acquiring 100% of the new equity in exchange of the discharge of the debt. Attorneys at Pachulski Stang Ziehl & Jones serve as counsel to the Debtors. The Debtors have also tapped FTI Consultin, Inc., to provide David J. Woodward as Chief Restructuring Officer, and provide additional personnel. Epiq Bankruptcy Solutions LLC is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case. QUICK-MED TECHNOLOGIES: Paul Jenssen Replaces Nam Nguyen as CFO --------------------------------------------------------------- Mr. Nam Nguyen has resigned as Chief Financial Officer and corporate secretary effective as of Jan. 10, 2013, and will continue to provide ongoing transition services through approximately Jan. 18, 2013. The Company was grateful to Mr. Nguyen for his years of service. There were no disagreements between Mr. Nguyen and any officer or director of the Company. Effective as of January 10, the Company appointed Mr. Paul Jenssen, 56, as its Chief Financial Officer, corporate treasurer and secretary. Mr. Jenssen will be working under a consulting agreement, will be paid a weekly retainer of $1,120 for the first eight hours of work. Time above eight hours will be paid at $125/hour, with a certain discount for the initial period. In addition he may be granted stock options at the Company's discretion. Mr. Jenssen has over 35 years of experience in strategic planning, process improvement, finance and accounting. He started his career at Deloitte Touche (1978-1984) before becoming Treasurer at Associated Press (1984-1998). In addition to working as a consultant since 1998, he was the CFO, COO and a Senior Managing Director at Rothschild North America investment bank (1998-2006). From 2006 until the present, Mr. Jenssen was the President of Jenssen Consulting, a business involved in providing strategic planning, process improvement, finance and accounting related services. Mr. Jenssen is a CPA, has an MBA from Columbia University in New York and has held several securities licenses. There is no family relationship between Mr. Jenssen and any of the other executive officers or directors of the Company. About Quick-Med Gainesville, Fla.-based Quick-Med Technologies, Inc., is a life sciences company focused on developing proprietary, broad-based technologies in the consumer and healthcare markets. Its four core technologies are: (1) Novel Intrinsically Micro-Bonded Utility Substrate (NIMBUS(R)), a family of advanced polymers bio- engineered to have antimicrobial, hemostatic, and other properties that can be used in a wide range of applications, including wound care, catheters, tubing, films, and coatings; (2) Stay Fresh(R), a novel antimicrobial based on sequestered hydrogen peroxide, that can provide durable antimicrobial protection to items such as textiles through numerous laundering cycles; (3) NimbuDerm(TM), a novel copolymer for application as a persistent hand sanitizer with long lasting protection against germs; and (4) MultiStat(R), a family of advanced patented methods and compounds shown to be effective in skin therapy applications. The Company's balance sheet at Sept. 30, 2012, showed $1.4 million in total assets, $9.8 million in total liabilities, and a stockholders' deficit of $8.4 million. Daszkal Bolton LLP, in Boca Raton, Florida, expressed substantial doubt about Quick-Med's ability to continue as a going concern. The independent auditors noted the the Company has experienced recurring losses and negative cash flows from operations for the years ended June 30, 2012, and 2011, and has a net capital deficiency. RAY THOMAS: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Ray Thomas Petroleum Company, Inc. P.O. Box 338 Shelby, NC 28151-0338 Bankruptcy Case No.: 13-40034 Chapter 11 Petition Date: January 18, 2013 Court: U.S. Bankruptcy Court Western District of North Carolina (Shelby) Judge: J. Craig Whitley Debtor's Counsel: Ashley K. Neal, Esq. RAYBURN, COOPER & DURHAM, P.A. 227 West Trade Street, Suite 1200 Charlotte, NC 28202 Tel: (704) 334-0891 Fax: (704) 377-1897 E-mail: aneal@rcdlaw.net - and ? Paul R. Baynard, Esq. RAYBURN, COOPER & DURHAM, P.A. 227 West Trade Street, Suite 1200 Charlotte, NC 28202 Tel: (704) 334-0891 Fax: (704) 377-1897 E-mail: pbaynard@rcdlaw.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- TPC Realty, LLC 13-40035 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 The petition was signed by L. Ray Thomas, president. A. A copy of Ray Thomas Petroleum's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/ncwb13-40034.pdf B. A copy of TPC Realty's list of its two unsecured creditors is available for free at: http://bankrupt.com/misc/ncwb13-40035.pdf RG STEEL: Asks Court for Liquidating Trustee to Wind Up MSC ----------------------------------------------------------- Debtor RG Steel Wheeling, LLC, has filed a Complaint against SNA Carbon, LLC, and Mountain State Carbon, LLC ("MSC"), in connection with several agreements entered into in 2005 between its predecessor, Wheeling-Pittsburgh Steel Corporation, and SNA Carbon (an affiliate of Defendant Severstal US Holdings, LLC) to form MSC, the purpose of which was to have a dedicated source of high grade coke for their competing steelmaking businesses. Severstal and its affiliates purchased Wheeling-Pitt in 2008. In March 2011, Severstal sold its equity interest in Severstal Sparrows Point, LLC, which was the indirect owner of Wheeling-Pitt (then known as Severstal Wheeling, Inc.), to RG Steel, LLC. RG Wheeling is a subsidiary of RG Steel and is the successor, through Severstal Wheeling, to Wheeling-Pitt's membership interest in MSC. The Complaint states that relations between SNA Carbon, MSC, and RG Wheeling deteriorated almost immediately after the acquisition and never recovered. In May 2012, the parties became embroiled in a dispute over payments for coke shipments from MSC. Before the dispute could be resolved, RG Wheeling filed for Chapter 11 protection on May 30, 2012. Using its bankruptcy filing as a pretext, and in violation of the automatic stay, RG Wheeling says SNA Carbon has deprived the Company of its membership interest in MSC, and particularly its management rights under the LLC Agreement. Shortly after the filing, Severstal blocked RG Wheeling from participating in the direction of MSC's operations or governance, stripping RG Wheeling of the opportunity to maximize the value of its interest in MSC for the benefit of its creditors, the Complaint relates. RG Wheeling seeks a declaration that it did not cease to be a member of MSC upon the filing of its Chapter II petition. RG Wheeling further seeks an order enjoining SNA Carbon (i) from continuing to deprive RG Wheeling of its rights appurtenant to its membership interest in MSC, including its right to appoint representatives to MSC's board of managers; and (ii) from interfering with the restoration of all of RG Wheeling's rights appurtenant to its membership Given the inability of SNA Carbon and RG Wheeling to cooperate in the management of MSC, RG Wheeling also requests that the Court order the judicial dissolution of MSC and the appointment of a liquidating trustee for MSC to wind up its affairs and sell its assets for maximum value. On Jan. 4, 2013, Severstal filed a motion for an order modifying the automatic stay pursuant to 11 U.S.C. Sec. 362(d)(2) to permit it to enforce a security interest purportedly granted by RG Wheeling in its membership interest in MSC. Severstal contends in the motion that RG Steel owes it $100,677,778 on a secured promissory note issued by RG Steel in connection with its acquisition of Severstal's equity interest in Severstal Sparrows Point in March 2011, that it has a lien on RG Wheeling's membership interest in MSC in the amount of the unpaid principal and accrued interest on the promissory note, and that its lien exceeds the value of RG Wheeling's membership interest in MSC. 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: Has Court Nod to Pay Prepetition Claims of Trial Experts ------------------------------------------------------------------ Bankruptcy Judge Kevin J. Carey has authorized WP Steel Venture LLC, et al., to pay the prepetition claims of certain trial experts totaling $81,040 in connection with the collapse of the No. 4 Bridge Crane and related damages. As reported in the TCR on Jan. 10, 2013, a predecessor of RG Steel Sparrows Point, LLC, filed a complaint in the U.S. District Court for the District of Maryland against Kinder Morgan Bulk Terminals, Inc., for negligence and breach of contract following the loss of the No. 4 Bridge Crane. RG Steel asserted that the overall monetary damages resulting from the collapse of the Bridge Crane are in excess of $20 million. 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: Committee Wants Leave to Pursue Claims vs. Ira Rennert ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of WP Steel Venture, LLC, et al., asks the Bankruptcy Court for authorization to commence, prosecute and settle certain claims and causes of action on behalf and for the benefit of the Debtors' estate against Ira L. Rennert, the controlling manager of the Debtors. The Committee cites these claims and causes of action arise from these breaches of fiduciary duties committed by Mr. Rennert: (a) Rennert's failure to cause the Debtors to file for bankruptcy in December 2011, instead delaying the inevitable bankruptcy in order to allow Rernert's alter ego, The Renco Group, Inc., to transfer a portion of its equity interests in the Company's parent in an attempt to avoid potential liability for the Debtors' underfunded pension plans, and as a result, causing the already hopelessly insolvent Debtors to be layered with hundreds of millions of dollars in secured putative indebtedness; (b) Rennert's refusal to cause the Debtors to file for bankruptcy before expiration of a cure period for defaults under a coke supply agreement, instead delaying the bankruptcy in order to negotiate debtor-in-possession "financing" with the Debtors' prepetition senior agent to dissuade the agent from drawing down $50 million in cash collateral that Renco had posted under the Debtors' prepetition senior secured loans, which delay caused the Debtors' joint venture to purportedly terminate the coke supply agreement and probably resulted in a loss of significant amount -- if not a complete loss -- of value of the Debtors' interests in the said joint venture; and (c) Rennert's exertion of personal influence over the Debtors' prepetition senior agent and taking certain actions to prevent the agent from drawing down on most of the cash collateral that Renco posted. The Committee says it believes that prosecuting the Rennert Claims would be appropriate and may provide recoveries in excess of $238 million for the Debtors' estates and creditors. The Committee believes that the Debtors will not pursue the Rennert Claims because such claims are against the Debtors' sole equity owner and and controlling manager, the Committee adds. 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. RICHFIELD EQUITIES: Has Access to DIP Financing Until Jan. 25 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Michigan approved a stipulation between Richfield Equities, L.L.C and Comerica Bank extending from Jan. 11, 2013, to Jan. 25, 2013, the termination date under final order authorizing postpetition financing and granting adequate protection. A copy of the approved budget is available for free at http://bankrupt.com/misc/richfieldequities_Loan-extension.pdf About Richfield Equities Richfield Equities, L.L.C., Richfield Landfill, Inc., Richfield Management, L.L.C., and Waste Away Disposal, L.L.C., each filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case Nos. 12-33788 to 12-33791) on Sept. 18. Flint, Mich.-based Richfield Equities is a limited liability company that directly owns 100% of the ownership interests of each of Richfield Landfill, Richfield Management, and Waste Away Disposal. Debtors are a vertically-integrated solid waste collection, transfer, disposal, and recycling company that service the southeast, central/mid, and "thumb" regions of Michigan. The Debtors' operations include two (2) landfills, two (2) transfer stations, and collection and hauling operations. The Debtors' consolidated balance sheet shows that as of April 30, 2012, the Debtors had total assets of approximately $37.1 million and total liabilities of approximately $41.8 million. As of the Petition Date, the total outstanding principal amount owed to Comerica Bank was approximately $18 million plus contingent reimbursement obligations of $8.3 million under applications for letters of credit issued by the Bank. The obligations under the Prepetition Credit Documents are secured by substantially all of the assets of the Debtors and were guaranteed by each of Landfill, Management, and Waste Away, as well as other non-debtor individuals and non-operating entities. Joseph M. Fischer, Esq., Robert A Weisberg, Esq., and Christopher A. Grosman, Esq., at Carson Fischer PLC, in Bloomfield Hills, Michigan, represent the Debtors as counsel. Quarton Partners serves as their investment banker. Wolfson Bolton PLLC represents the Official Committee of Unsecured Creditors of Richfield Equities, L.L.C., et al., as counsel. Judge Daniel S. Opperman oversees the cases. The Debtors' cases are jointly administered, for procedural purposes only, under Case No. 12-33788, which is the case number assigned to Richfield Equities, L.L.C. ROTECH HEALTHCARE: Amends Report on $25MM Loan to Add Exhibit ------------------------------------------------------------- Rotech Healthcare Inc. has amended its current report on Form 8-K, originally filed on Dec. 21, 2012, to include as exhibit a copy of its term loan credit agreement with Silver Point Finance, LLC. No other changes have been made to the Original Report. On Dec. 21, 2012, the Company entered into a new term loan credit agreement with Silver Point, as administrative agent and SPCP Group, LLC (an affiliate of Silver Point Finance, LLC), as initial lender relating to a term loan credit facility in an aggregate principal amount of $25 million. Pursuant to the Credit Agreement, the Company borrowed $23.5 million of the Facility on Dec. 21, 2012. The remaining $1.5 million portion of the Facility that is not borrowed at that time may be borrowed on or before Jan. 1, 2014, so long as certain limited conditions as set forth in the Credit Agreement are satisfied. The Facility replaces and repays commitments and loans under the Company's Credit Agreement, dated as of March 17, 2011, and, assuming the Company will borrow $1.5 million under the Delayed Draw Facility, increases available liquidity in the Company by approximately $15 million. In addition to repaying amounts outstanding under the 2011 Credit Agreement and fees and expenses associated with the Facility, the proceeds of the Facility should provide the Company with additional flexibility to address anticipated competitive changes and opportunities in the industry and working capital needs supporting the Company's business plans. The loans under the Facility will mature on April 30, 2015. The Credit Agreement does not require any amortization payments in respect of the loans and the entire principal amount is due at maturity. All borrowings under the Facility participate in a first priority security interest in substantially all of the Company's and the subsidiary guarantor's assets with the Company's $230 million in aggregate principal amount of 10.75% senior secured notes due Oct. 15, 2015. Amounts under the Facility bear interest at (i) the LIBOR Rate plus 10.0% per annum or, at the Company's option, (ii) a fluctuating rate plus 9.0% per annum. Interest is payable monthly. The default rate under the Facility is 3.0% per annum above the otherwise applicable interest rate. A "ticking" fee on the commitments in respect of the Delayed Draw Facility in an amount equal to 500 basis points per annum will begin accruing from March 31, 2013, to the Delayed Draw Termination Date and shall be due and payable in cash on a monthly basis. To the extent the Company or any of its restricted subsidiaries obtain net cash proceeds from the incurrence of indebtedness not permitted to be incurred pursuant to the Credit Agreement, issuances of equity by the Company, asset sales or insurance/condemnation events, mandatory prepayments of the loans will be required, subject to exceptions set forth in the Credit Agreement. Those mandatory prepayments and any voluntary prepayments are subject to a premium of (i) 6.0% in the case of a prepayment made on or prior to Dec. 31, 2013 (or 4.5%, if that prepayment is made in connection with a change in control) and (ii) 3.0% in the case of a prepayment made on or after Jan. 1, 2014, through and including Dec. 31, 2014. Prepayments made on or after Jan. 1, 2015, are not subject to a premium. Any commitment reductions in respect of the Delayed Draw Facility after March 31, 2013, are subject to a premium of 6%. A copy of the Credit Agreement is available for free at: http://is.gd/cPH9cw About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities and a $346.22 million total stockholders' deficiency. Bankruptcy Warning "In the event that we lack the ability to generate adequate cash to support our ongoing operations, we may need to access the financial markets by seeking additional debt or equity financing. As disclosed in our Risk Factors, there may be uncertainty surrounding our ability to access capital in the marketplace. The Company may be unable to secure the $15.0 million in additional financing permitted to it under the Indentures for our Senior Secured Notes and our Senior Second Lien Notes or to refinance its indebtedness on commercially reasonable terms, in which case it would need to identify alternative options to address its current and prospective credit situation, such as a sale of the Company or other strategic transaction, or a transformative transaction, such as a possible restructuring or reorganization of the Company's operations which could include filing for bankruptcy protection," the Company said in its quarterly report for the period ended Sept. 30, 2012. * * * As reported by the TCR on Aug. 21, 2012, Standard & Poor's Ratings Services lowered its rating on Orlando, Fla.-based Rotech Healthcare Inc. to 'CCC-' from 'B'. "The ratings reflect Rotech's highly leveraged financial risk profile, dominated by its weak liquidity position, high debt burden and overall sensitivity of credit metrics to the uncertain reimbursement environment," said Standard & Poor's credit analyst Tahira Wright. In the Aug. 30, 2012, edition of the TCR, Moody's Investors Service downgraded Rotech Healthcare, Inc.'s Corporate Family Rating to Caa3 from B3 and Probability of Default Rating to Caa3 from B2. This rating action is based on Moody's expectation that Rotech's liquidity and credit metrics -- which are already weak -- will deteriorate further over the next few quarters. Moody's expects continued top-line pressure from Medicare reimbursement cuts in 2013. RYAN INT'L: In Liquidation; Ceases Remaining Charter Operations --------------------------------------------------------------- CH-AVIATION reports that Ryan International Airlines has ceased all remaining charter operations on January 11 and has entered liquidation. The US charter carrier has now terminated the contracts of all of its employees and parked its remaining fleet of one A330-200, two B767-300ERs and two MD-83s, ch-aviation relates. According to the report, CEO Jeff Potter said the overall economy, the massive decreases in US Department of Defense charter demand and disputes with Atlasjet Airlines (KK, Antalya (AYT)) over a wet-lease contract for its A330-200 as the main reasons for the final decision to liquidate the airline. About Ryan International Ryan International Airlines, Inc., filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford, Illinois, on March 6, 2012. Ryan International, which filed for bankruptcy along with 10 affiliates, estimated assets and debts of up to $100 million. Ryan and its affiliates -- http://www.flyryan.com/-- provide commercial air charter services, to a diverse mix of customers including U.S., Canadian and British military entities, the Department of Homeland Security, the U.S. Marwill Service, leisure travelers, professional and college sports teams and an ad hoc charter services. Ryan has 460 employees, with the cockpit crew, flight attendants and dispatchers are represented by labor unions. Judge Manuel Barbosa presides over the case. Matthew M. Hevrin, Esq., and Thomas J. Lester, Esq., at Hinshaw & Culbertson LLP, serve as the Debtors' counsel. Silverman Consulting serves as financial advisor. The petition was signed by Mark A. Robertson, executive vice president. On March 19, 2012, the U.S. Trustee for Region 11 appointed the official committee of unsecured creditors of the Debtors. Brian J Lohan, Esq., Lydia R. H. Slaby, Esq., Matthew A. Clemente, Esq., Matthew G. Martinez, Esq., at Sidney Austin LLP, in Chicago; and Michael G. Burke, Esq., at Sidney Austin LLP, in New York City, represent the Creditors' Committee as counsel. INTRUST Bank, the prepetition lender owed $53.2 million, is represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP; and Edward J. Nazar, Esq., at Redmond & Nazar LLP. The Bankruptcy Court later dismissed the Chapter 11 proceeding of Ryan 763K, a debtor-affiliate of Ryan International. SATCON TECHNOLOGY: Aims to Put Assets on Auction Block Next Month ---------------------------------------------------------------- Satcon Technology Corp. wants to get its bankruptcy sale process officially under way, though it hasn't yet lined up a lead bidder for its assets. BankruptcyData reported that Satcon Technology filed a motion with for an order (i) approving bid procedures with respect to the sale of all, or substantially all of the Debtors' assets; (ii) approving a procedure for granting stalking horse protections, (iii) scheduling a hearing to consider the sale; (iv) directing that notice of the bid procedures and the sale be given and (v) granting related relief and (B) an order approving the sale in a form to be filed. The Court scheduled a Feb. 6, 2013 hearing on the motion. About SatCon Technology Based in Boston, SatCon Technology Corporation (NasdaqCM: SATC) -- http://www.satcon.com/-- and its wholly owned subsidiaries provide utility-grade power conversion solutions for the renewable energy market, primarily for large-scale commercial and utility- scale solar photovoltaic markets. Satcon Technology Corporation, along with six related entities, filed Chapter 11 petitions (Bankr. D. Del. Case No. 12-12869) on Oct. 17, 2012. Satcon disclosed assets of $92.3 million and liabilities totaling $121.9 million. Liabilities include $13.5 million in secured debt owing to Silicon Valley Bank. There is another $6.5 million in secured subordinated debt. Unsecured liabilities include $16 million on subordinated notes. The Hon. Kevin Gross presides over the case. Dennis A. Meloro, Esq., at Greenberg Traurig serves as the Debtors' counsel. Fraser Milner Casgrain LLP acts as the general Canadian counsel. Lazard Middle Market LLC serves as the Debtors' financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as the Debtors' claims and noticing agent. The Official Committee of Unsecured Creditors tapped to retain Holland & Knight LLP as its counsel, Sullivan Hazeltine Allinson LLC as its co-counsel. SAVANNAH INTERESTS: Owners Retain Control Under Plan ---------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Georgia confirmed the first amended joint Chapter 11 plan filed by Savannah Interests LLC and Gulfstream Capital Corporation on July 31, 2012. The joint plan contemplates that the Debtor will continue to exist after the Effective Date. The Reorganized Debtor will continue to be managed by its sole member, Gulfstream. Holders of general unsecured claims will be paid by Gulfstream 100% of their claims in equal monthly installments commencing on the Effective Date, and ending on the date which is five years after the commencement of the Chapter 11 case. Holders of equity interests will retain their interests in the Debtor, in consideration of the interest holder's contribution of the funds necessary to make payments under the Plan to holders of priority claims and general unsecured claims. A copy of the First Amended Joint Chapter 11 Plan is available at: http://bankrupt.com/misc/savannah.doc112.pdf Savannah Interests LLC, based in Conifer, Colorado, filed for Chapter 11 bankruptcy (Bankr. S.D. Ga. Case No. 11-42698) on Dec. 30, 2011. Lawyers at Morris, Manning & Martin LLP represent the Debtor as counsel. The petition was signed by David Hennessy, CEO of Gulfstream Capital Corp., managing member. In its schedules, the Debtor disclosed $10.64 million in total assets and $8.65 million in total liabilities. SECOND INJURY: Mo. Auditor Confirms State Fund Insolvent -------------------------------------------------------- The Associated Press reports that Missouri State Auditor Tom Schweich confirms that a state fund for disabled workers is insolvent. The news agency relates that Mr. Schweich said Missouri's Second Injury Fund had barely $3 million as of the end of 2012 but had unpaid obligations of $28 million. The fund covers workers' compensation claims for employees who have previous injuries or disabilities and then suffer a new job- related injury, the AP notes. According to the report, auditors and financial analysts have warned for several years that the fund was on a path toward insolvency. But lawmakers have done nothing to address it. The fund gets its money from a surcharge on workers' compensation insurance premiums paid by businesses, the report says. Auditors trace the fund's financial woes to a 2005 law the capped surcharges at 3%, the AP adds. SHELDRAKE LOFTS: Court Approves McGrath & Company as Appraiser -------------------------------------------------------------- Sheldrake Lofts LLC sought and obtained approval from the U.S. Bankruptcy Court for permission to employ McGrath & Company, Inc. as Appraiser for Tax Certiorari Matters. New Rochelle, New York-based Sheldrake Lofts LLC owns several contiguous parcels of real property in the Village of Mamaroneck situated along the Sheldrake River: 270 Waverly Avenue, 206-208 Waverly Avenue, 188 Waverly Avenue. It filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-23650) on Aug. 10, 2010. David H. Wander, Esq., at Davidoff, Malito & Hutcher, LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $50 million to $100 million and its debts at $10 million to $50 million as of the Petition Date. SINO-FOREST CORP: Plan Implementation Date Expected for Jan. 23 --------------------------------------------------------------- Sino-Forest Corporation on Jan. 21 disclosed that the Plan Implementation Date, the date on which the Company's CCAA Plan of Compromise and Reorganization dated December 3, 2012 is to become effective, has been extended with the consent of the Initial Consenting Noteholders and the Monitor and is now expected to occur on Jan. 23, 2013. All capitalized terms not otherwise defined herein are as defined in the Plan. In addition, as a result of the addition of another defendant to the list of Named Third Party Defendants under the Plan, the amount of the reserve for Unresolved Claims against Sino-Forest to be created under the Plan has been further reduced from $28.5 million to an aggregate amount of $1.7 million. As a result of the further reduction in the Unresolved Claims Reserve, more than 98.5% of the Newco Notes and Newco Shares will be distributed to Affected Creditors of Sino-Forest with Proven Claims in connection with the implementation of the Plan. About Sino-Forest Corp. Sino-Forest Corporation -- http://www.sinoforest.com/-- is a commercial forest plantation operator in China. Its principal businesses include the ownership and management of tree plantations, the sale of standing timber and wood logs, and the complementary manufacturing of downstream engineered-wood products. Sino-Forest also holds a majority interest in Greenheart Group Limited, a Hong-Kong listed investment holding company with assets in Suriname (South America) and New Zealand and involved in sustainable harvesting, processing and sales of its logs and lumber to China and other markets around the world. Sino-Forest's common shares have been listed on the Toronto Stock Exchange under the symbol TRE since 1995. Sino-Forest Corporation on March 30, 2012, obtained an initial order from the Ontario Superior Court of Justice for creditor protection pursuant to the provisions of the Companies' Creditors Arrangement Act. Under the terms of the Order, FTI Consulting Canada Inc. will serve as the Court-appointed Monitor under the CCAA process and will assist the Company in implementing its restructuring plan. Gowling Lafleur Henderson LLP is acting as legal counsel to the Monitor. During the CCAA process, Sino-Forest expects its normal day-to- day operations to continue without interruption. The Company has not planned any layoffs and all trade payables are expected to remain unaffected by the CCAA proceedings. STELLAR BIOTECHNOLOGIES: Incurs $5.2-Mil. Net Loss in 2012 ---------------------------------------------------------- Stellar Biotechnologies, Inc., filed on Jan. 15, 2013, its annual report on Form 20-F for the fiscal year ended Aug. 31, 2012. D&H Group LLP, the Company's independent accountants, noted that management of the Company has included a "going concern" disclosure as described in Note 1 of the Company's Consolidated Financial Statements for the year ended Aug. 31, 2012. "Without raising additional financial resources or achieving profitable operations, there is substantial doubt about the ability of the Company to continue as a going concern. If the Company is unable to meet these necessary requirements, it will not be able to fulfill its business plan and be forced to reduce certain operations or cease operations altogether." The Company reported a net loss of $5.2 million on $286,054 of revenues for fiscal 2012, compared with a net loss of $3.6 million on $697,187 of revenues for fiscal 2011. The Company's balance sheet at Aug. 31, 2012, showed $1.5 million in total assets, $692,268 in total liabilities, and stockholders' equity of $851,610. A copy of the Form 20-F is available at http://is.gd/ZnjTog Stellar Biotechnologies, Inc., was formed through a reverse merger transaction with Stellar Biotechnologies Inc., a corporation incorporated under the laws of the State of California on Sept. 9, 1999. Stellar is a biotechnology research and production company involved in the production and marketing of Keyhole Limpet Hemocyanin ("KLH") as well as the development of new technology related to the culture and production of KLH and subunit KLH ("suKLH") formulations. Stellar is the only company dedicated solely to developing and commercializing KLH. SURGICAL ASSOCIATES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Surgical Associates, Inc. 6465 South Yale Avenue Tulsa, OK 74136 Bankruptcy Case No.: 13-10081 Chapter 11 Petition Date: January 17, 2013 Court: U.S. Bankruptcy Court Northern District of Oklahoma (Tulsa) Judge: Dana L. Rasure Debtor's Counsel: Steven W. Soule, Esq. HALL, ESTILL, HARDWICK, GABLE, ET AL 320 South Boston Avenue, Suite 200 Tulsa, OK 74103-3706 Tel: (918) 594-0466 E-mail: ssoule@hallestill.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 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/oknb13-10081.pdf The petition was signed by Mark R. Reese, M.D., president. THELEN LLP: Ex-Partner Clawback Deal Paves Way for More Pacts ------------------------------------------------------------- Brian Mahoney of BankruptcyLaw360 reported that a New York bankruptcy judge on Wednesday approved a $475,000 clawback settlement with eight former partners of bankrupt law firm Thelen LLP, an agreement that paves the way for further settlements with highly compensated partners who left before the firm's dissolution in 2008. All of the settling partners agreed to repay the firm for purportedly failing to meet certain capital requirements required by compensation they received in 2007 and 2008, according to Thelen's Chapter 7 trustee Yann Geron of Fox Rothschild LLP, the report said. About Thelen LLP Thelen LLP, formerly known as Thelen Reid Brown Raysman & Steiner -- http://thelen.com/-- is a bicoastal American law firm in process of dissolution. It was formed as a product between two mergers between California and New York-based law firms, mostly recently in 2006. Its headcount peaked at roughly 600 attorneys in 2006, and had 500 early in 2008, with offices in eight cities in the United States, England and China. In October 2008, Thelen's remaining partners voted to dissolve the firm. As reported by the Troubled Company Reporter on Sept. 22, 2009, Thelen LLP filed for Chapter 7 protection. The filing was expected due to the timing of a writ of attachment filed by one of Thelen's landlords, entitling the landlord to $25 million of the Company's assets. The landlord won approval for that writ in June 2009, but Thelen could void the writ by filing for bankruptcy within 90 days of that court ruling. Thelen, according to AM Law Daily, has repaid most of its debt to its lending banks. THQ INC: Panel Seek to Retain Houlihan Lokey as Fin'l Advisor ------------------------------------------------------------- BankruptcyData reported that THQ's official committee of unsecured creditors filed with the U.S. Bankruptcy Court a motion to retain Houlihan Lokey Capital as financial advisor and investment banker for the following fees: a monthly fee of $150,000 the first month, $100,000 for each of the next two months and $50,000 for each month thereafter. Additionally Houlihan Lokey Capital will be paid a deferred fee, equal to 5% of the value, in excess of $3 million of all assets designated by the applicable deferred fee transaction. About THQ Inc. THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- is a worldwide developer and publisher of interactive entertainment software. The Company develops its products for all popular game systems, personal computers, wireless devices and the Internet. Headquartered in Los Angeles County, California, THQ sells product through its network of offices located throughout North America and Europe. THQ Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13398) on Dec. 19, 2012. THQ has a deal to sell its video-game development business to Clearlake Capital Group LP for about $60 million, absent higher and better offers at an auction proposed for January 2013. Clearlake and existing lender Wells Fargo Capital Finance LLC are providing $10 million of DIP financing. Attorneys at Young Conaway Stargatt & Taylor, LLP and Gibson, Dunn & Crutcher LLP serve as counsel to the Debtors. FTI Consulting and Centerview Partners LLC are the financial advisors. Kurtzman Carson Consultants is the claims and notice agent. TIGER MEDIA: Expects $9 Million Net Income for 2012 --------------------------------------------------- Tiger Media, Inc., has provided preliminary unaudited financial results for the full year 2012 and three months ended Dec. 31, 2012, which reflect the impact of the recently announced divestiture of Search Media International Holdings and its subsidiaries. For the full year 2012, the Company anticipates its revenue will be classified as discontinued operations, after giving effect to the aforementioned divestiture of SMIL in the 4th quarter of 2012 including the divestiture of related party revenue from these subsidiaries. The results from these are presented as income from discontinued operations and included in the net profit of the Company. As a result, the Company anticipates net income of $9 million for 2012 mainly due to the gain on divestiture of various subsidiaries within 2012. As of Dec. 31, 2012, the Company had approximately $7 million in cash and cash equivalents, $6 million of working capital and $8 million of total assets. Peter W. H. Tan, chief executive officer of Tiger Media, remarked, "We have been able to realize significant progress in the evolution of our business during 2012, transitioning from our legacy operations to strategic transactions with high profile partners. These concessions possess higher margins, longer terms and greater strategic value. In addition, we have several new strategic concessions and transactions in progress that will create additional long-term revenue opportunities, strengthen and diversify our offerings in China's media sector, deepen our national presence and further enhance shareholder value. We intend to keep our investors up to date and make additional announcements as these endeavors evolve." The Company expects to complete its annual 20-F filing prior to the April 30, 2013, deadline. A copy of the press release is available for free at: http://is.gd/HDT8ec 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 Sept. 30, 2012, showed US$39.88 million in total assets, US$35.41 million in total liabilities, and US$3.49 million in total shareholders' equity. TIGER MEDIA: Phillip Frost Owns 32.5% of Ordinary Shares -------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Phillip Frost, M.D., and Frost Gamma Investments Trust disclosed that, as of Dec. 26, 2012, they beneficially own 10,334,790 ordinary shares of Tiger Media, Inc., representing 32.5% of the shares outstanding. A copy of the filing is available for free at http://is.gd/ei3h4h 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 Sept. 30, 2012, showed US$39.88 million in total assets, US$35.41 million in total liabilities, and US$3.49 million in total shareholders' equity. TRIBUNE CO: Names Peter Liguori as Chief Executive Officer ---------------------------------------------------------- Keach Hagey at Daily Bankruptcy Review reports that television veteran Peter Liguori was elected chief executive of the Tribune Co. during the media company's first board meeting since emerging from bankruptcy. Bruce Karsh, the president of major shareholder Oaktree Capital Management, was named chairman of the board, according to the report. The report relates that Eddy Hartenstein, Tribune's former CEO, will remain on the board and continue to serve as publisher of the Los Angeles Times and CEO of Los Angeles Times Media Group. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending four years of reorganization. The reorganization allowed a group of banks and hedge funds, including Oaktree Capital Management and JPMorgan Chase & Co., to take over the media company. TRINSEO SA: S&P Affirms 'B+' Corporate Credit Rating ---------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Luxembourg-incorporated and U.S.-based Trinseo S.A., the parent holding company of Trinseo Materials Operating S.C.A. (collectively Trinseo). The outlook is stable. "We assigned our 'B+' issue rating and '4' recovery rating to the company's proposed $1.3 billion senior secured note issue. The '4' recovery rating indicates our expectations for average recovery (30%-50%) in the event of a payment default. Proceeds from the proposed notes are expected to be utilized to pay down the entire amount of approximately $1.2 billion outstanding under the existing term loan," S&P said. "We assigned our 'BB' rating (two notches above the corporate credit rating) and '1' recovery rating to subsidiary company Trinseo Materials' proposed $300 million revolving credit facility. The '1' recovery rating indicates our expectations for very high recovery (90%-100%) in the event of a payment default. We will withdraw our ratings on the existing $240 million revolving credit facility and on the term loan following the successful close of the proposed transaction and the paydown of the loan as planned. Ratings are based on preliminary terms and conditions," S&P noted. "Our ratings reflect Trinseo S.A.'s aggressive financial profile and weak business profile as a commodity-oriented producer of petrochemical products," said Standard & Poor's credit analyst Paul Kurias. The stable outlook reflects S&P's expectation that the company will gradually improve its leverage-related credit metrics over the next 12 to 15 months so that they are at appropriate levels for the rating. S&P expects that a favorable market position in key segments, such as SB latex and SSBR, and the potential for growth in certain product lines will at least partly offset the potential for volatility in other regions and in the lower-margin plastics business. S&P also expects that financial policies management adopts will support the ratings. "We could lower the ratings if operating performance is lower than our expectations and adjusted EBITDA does not improve or declines in 2013 relative to 2012 levels. We could lower the ratings if profit margins decline to low single digits and revenue growth turns negative so that FFO-to-total debt remains below 12% with limited prospects for improvement, against our expectation for a steady improvement. We could also downgrade Trinseo if debt increases meaningfully because of acquisitions or additional shareholder rewards, without commensurate improvement to operating results. We could also lower ratings if quarterly earnings unexpectedly weaken so that the company is less likely in our opinion to exceed its 2012 EBIDTA in 2013. We do not expect to raise the ratings unless there is a successful IPO, and the company uses the proceeds to pay down a meaningful amount of debt. In such a scenario, we would expect operating performance to at least remain consistently at current levels, so that the ratio of FFO-to-total debt is higher than 20% on a sustainable basis after factoring in potential acquisitions or shareholder rewards. We view this scenario as unlikely during the next year," S&P added. TRIBUNE CO: To Drop Clawback Lawsuits Against Many Top Executives ----------------------------------------------------------------- Tribune Co. intends to drop the bulk of some 170 lawsuits that targeted senior media executives who cashed in on the going- private deal that ruined the company's finances. Peg Brickley, writing for Dow Jones' Daily Bankruptcy Review, reported that the in-court announcement Wednesday came as Tribune moved to take control of part of the flood of litigation touched off by its 2008 collapse into Chapter 11, which happened less than a year after a leveraged buyout, the report said. Lawsuits will continue against upper-echelon executives such as former Chief Executive Dennis FitzSimons, who pocketed $47 million out of the deal, the report said, citing court papers. Jamie Santo of BankruptcyLaw360 reported the adversary complaints initially were filed by the committee of unsecured creditors in 2010 in an attempt to recover allegedly preferential payments made to Tribune executives, but under the confirmed Chapter 11 plan, roughly 170 of the actions will become property of the reorganized debtor, the report related. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending four years of reorganization. The reorganization allowed a group of banks and hedge funds, including Oaktree Capital Management and JPMorgan Chase & Co., to take over the media company. TXU CORP: Bank Debt Trades at 34% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 65.75 cents-on-the-dollar during the week ended Friday, Jan. 18, 2013, an increase of 0.42 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2017, and carries Moody's Caa1 rating and Standard & Poor's CCC rating. The loan is one of the biggest gainers and losers among 193 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. The Company's balance sheet at Dec. 31, 2011, showed $44.07 billion in total assets, $51.83 billion in total liabilities, and a $7.75 billion total deficit. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. * * * In late January 2012, Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. USEC INC: Modifies Executive Compensation Program for 2013 ----------------------------------------------------------- The Compensation Committee of the Board of Directors of USEC Inc. approved changes to the executive compensation program for 2013 for the Company's named executive officers and other executives. The changes are designed to keep management and the entire organization focused on critical short-term goals and to provide for retention of key employees, while not increasing the overall risk of the program or encouraging excessive risk taking by executives. The revised incentive and severance opportunities are not limited to executives but will be implemented throughout the Company as appropriate. The changes decrease the executives' overall target long-term compensation opportunity by 25% and eliminate the potential for the executives to earn an award above target (previously the executives could earn up to 150% of target based on performance). Although this reflects a temporary move away from equity-based compensation for the executives for 2013, the named executive officers each already own significant equity in the Company. USEC hopes to be able to return to a more typical executive compensation program when there is greater certainty regarding the Company's strategic path. The changes are summarized below: -- Adopted a new performance-based quarterly cash incentive program for 2013 to replace the existing quarterly cash incentive program that was put in place in 2012. -- Suspended the annual incentive program and the long-term incentive program for 2013 and shifted the value to the new quarterly cash incentive program, with a 25% reduction in the target value of the long-term incentive component to take into account the reduced program risk as a result of the shorter performance measurement period and shift from equity- based to cash incentive; -- Revised the Company's existing severance arrangements to provide increased retentive features and ensure that they are market competitive without significantly increasing the overall cost of the arrangements; and * The named executive officers agreed to revisions to their existing change in control agreements to: (1) reduce the benefit level from two and a half times annual base salary and bonus to two times annual base salary and bonus; (2) eliminate the existing excise tax gross up; and (3) eliminate the additional pension credit. A complete copy of the Form 8-K is available at: http://is.gd/zcdid6 A copy of the 2013 Quarterly Incentive Plan is available at: http://is.gd/ETeHX3 A copy of the Amended Severance Plan is available at: http://is.gd/AACSOy About USEC Inc. Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) -- http://www.usec.com/-- supplies enriched uranium fuel for commercial nuclear power plants. The Company reported a net loss of $540.70 million in 2011, compared with net income of $7.50 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.76 billion in total assets, $3.11 billion in total liabilities, and $652.2 million in stockholders' equity. Bankruptcy Warning "A delisting of our common stock by the NYSE and the failure of our common stock to be listed on another national exchange could have significant adverse consequences. A delisting would likely have a negative effect on the price of our common stock and would impair shareholders' ability to sell or purchase our common stock. As of September 30, 2012, we had $530 million of convertible notes outstanding. A "fundamental change" is triggered under the terms of our convertible notes if our shares of common stock are not listed for trading on any of the NYSE, the American Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market. Our receipt of a NYSE continued listing standards notification ... did not trigger a fundamental change. If a fundamental change occurs under the convertible notes, the holders of the notes can require us to repurchase the notes in full for cash. We do not have adequate cash to repurchase the notes. In addition, the occurrence of a fundamental change under the convertible notes that permits the holders of the convertible notes to require a repurchase for cash is an event of default under our credit facility. Accordingly, our inability to maintain the continued listing of our common stock on the NYSE or another national exchange would have a material adverse effect on our liquidity and financial condition and would likely require us to file for bankruptcy protection," according to the Company's quarterly report for the period ended Sept. 30, 2012. * * * USEC Inc. carries 'Caa1' corporate and probability of default ratings, with "developing" outlook, from Moody's. As reported by the TCR on Aug. 17, 2012, Standard & Poor's Ratings Services lowered its ratings on Bethesda, Md.-based USEC Inc., including the corporate credit rating to 'CCC' from 'CCC+'. "The downgrade reflects our assessment of USEC's long-term viability after the company publicly stated that it will be difficult to continue enrichment operations at the Paducah Gaseous Diffusion Plant after a one-year multiparty agreement to extend operations expires in May 2013," said Standard & Poor's credit analyst Maurice S. Austin. UTSTARCOM HOLDINGS: Himanshu Shah Hikes Equity Stake to 17.7% ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Himanshu H. Shah and his affiliates disclosed that, as of Jan. 15, 2013, they benficially own 20,706,948 shares of common stock of UTStarcom Holdings Corp. representing 17.68% of the shares outstanding. Mr. Shah previously reported beneficial ownership of 19,004,034 common shares or a 12.56% equity stake as of July 11, 2012. A copy of the amended filing is available at: http://is.gd/Lt5q2K 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. VELO HOLDINGS: Urges Judge to Confirm Ch. 11 Reorganization Plan ---------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that private equity- held direct marketer Vertrue LLC on Thursday sought a New York bankruptcy judge's approval of its Chapter 11 reorganization plan, hoping to secure a quick exit from bankruptcy after reaching a plan that will see unsecured claim holders almost entirely shut out. The marketing services company said the plan is the result of talks between the company and its principal stakeholders, including the first-lien agent, certain first-lien lenders and the official committee of unsecured creditors, the report said. About Velo Holdings V2V Corp. is a premier direct marketing services company, providing individuals and businesses with access to a wide-variety of consumer benefits in the United States, Canada, and the United Kingdom. V2V was founded in 1989 as a membership services company that marketed its membership programs exclusively via telemarketing and, after having nearly a decade of continued growth, went public in 1996. In 2007, V2V was acquired by a consortium of private equity firms led primarily by investing affiliates of One Equity Partners. Norwalk, Connecticut-based Velo Holdings Inc. and various affiliates, including V2V, filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case Nos. 12-11384 to 12-11386 and 12-11388 to 12-11398) on April 2, 2012. The debtor-affiliates are V2V Holdings LLC, Coverdell & Company, Inc., V2V Corp., LN Inc., FYI Direct Inc., Vertrue LLC, Idaptive Marketing LLC, My Choice Medical Holdings Inc., Adaptive Marketing LLC, Interactive Media Group (USA) Ltd., Brand Magnet Inc., Neverblue Communications Inc., and Interactive Media Consolidated Inc. Judge Martin Glenn presides over the case. Lawyers at Dechert LLP serve as the Debtors' counsel. The Debtors' financial advisors are Alvarez & Marsal Securities LLC. The Debtors' investment banker is Alvarez & Marsal North America, LLC. Quinn Emanuel Urquhart & Sullivan, LLP, serves as the Debtors' special counsel. Epiq Bankruptcy Solutions serves as the Debtors' claims agent. Velo Holdings estimated $100 million to $500 million in assets and $500 million to $1 billion in debts. The petitions were signed by George Thomas, general counsel. Lawyers at Willkie Farr & Gallagher LLP represent Barclays, the First Lien Prepetition Agent and the DIP Agent. The First Lien Prepetition Agent and DIP Agent also has hired FTI Consulting, Inc. Sidley Austin LLP represents the Second Lien Prepetition Agent. Tracy Hope Davis, U.S. Trustee for Region 2, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Velo Holdings Inc., et al. VERTIS HOLDINGS: Hires Deloitte & World Graphic ----------------------------------------------- BankruptcyData reported tthat Vertis Holdings filed with the U.S. Bankruptcy Court a motion to retain Deloitte & Touche (Contact: Mike Morton) as outside accountant at the following hourly rates: rates; partner at $570, senior manager at 470, manager at 420, senior at 340 and staff at 230. Separately, the Court approved the Company's motion to retain World Graphic Services as consultant to the Debtors' Inserts Business, the report added. 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. VITESSE SEMICONDUCTOR: Raging Capital Drops 2 Director Nominees --------------------------------------------------------------- Raging Capital has withdrawn its letter to Vitesse Semiconductor Corporation, dated Nov. 20, 2012, nominating Paul K. McWilliams and Kenneth H. Traub for election to the Board of Directors of the Company at the 2013 annual meeting of stockholders. On Jan. 15, 2013, the Company filed with the Securities and Exchange Commission its proxy statement with respect to the Annual Meeting identifying Kenneth H. Traub as a member of management's slate of director candidates up for election at the Annual Meeting. Raging Capital Master Fund, Ltd., and its affiliates disclosed that, as of Jan. 15, 2013, they beneficially own 6,491,127 shares of common stock of Vitesse Semiconductor Corporation representing 17.6% of the shares outstanding. A copy of the regulatory filing is available at: http://is.gd/bgEp8L 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. VYSTAR CORP: Composition of Board Committees Modified ----------------------------------------------------- The Board of Directors of Vystar Corporation changed the composition of its Board committees in light of the recently disclosed addition of two new directors, bringing the number of directors of the Company to seven members. The composition of the Board committees is as follows effective Jan. 16, 2013: Executive Committee William R. Doyle (Chair) Joseph Allegra M.D. Douglas Craft Audit Committee Dean Waters (Chair) Paul A. Yeoham Michelle Y. Mangum Compensation Committee Joseph Allegra M.D. (Chair) Thomas Marsh Douglas Craft Issues Purchase Warrants to CMA Members As previously disclosed, on April 29, 2011, Vystar executed with CMA Investments, LLC, an unsecured line of credit with a principal amount of up to $800,000. CMA is a limited liability company of which three of the directors of the Company were the members on that date. Pursuant to the terms of the CMA Note, the Company could draw up to a maximum principal amount of $800,000. Interest, which is computed at LIBOR plus 5.25% on amounts drawn and fees, were initially paid by a director of the Company, to CMA. Pursuant to an agreement between the Company and that affiliate, the Company issued common stock to that affiliate with a value equal to such interest and fees paid based on the closing price of the common stock on the OTC Bulletin Board on the date of those payments. This agreement was modified during February 2012 and the Company assumed responsibility for payment of such interest and fees. The maturity date of the CMA Note is April 29, 2013. Other terms of the CMA Note include: * The CMA Note is unsecured. * No payments of principal are due until the second anniversary of the CMA Note, at which time all outstanding principal is due and payable; and * As compensation to the CMA members for providing the CMA Note, the Company issued warrants to purchase 2,600,000 shares of the Company's common stock to the CMA members at $0.45 per share, which was the closing price of the Company's stock on April 29, 2011, which vest 20% immediately and 10% upon each draw by the Company of $100,000 under the CMA Note. All of those warrants have vested. On Sept. 14, 2011, the Company's Board of Directors approved increasing the line of credit with CMA by $200,000 to a maximum principal amount of $1,000,000 and the Company's Chairman and Chief Executive Officer became a member of CMA. As compensation to the directors for increasing the amount available under the CMA Note, the Company's board of directors approved modifying the exercise price for the 2,600,000 compensatory stock purchase warrants previously issued to the directors from $0.45 to $0.27 per share, which was the closing price of the Company's common stock on that date and the Company also issued warrants to purchase an additional 1,600,000 shares of the Company's stock at $0.27 per share, which was the closing price of the Company's common stock on Sept. 14, 2011, which vest upon the original terms of the CMA Note. All of those warrants have vested. On Nov. 2, 2012, the Board of Directors approved an increase in the CMA line of credit from $1,000,000 to $1,500,000. On Jan. 10, 2013, as compensation to the CMA members for providing the increased CMA Note, the Company issued warrants to purchase 2,100,000 shares of the Company's common stock to the CMA members at $0.35 per share. The closing price of the Company's stock on Jan. 10, 2013, was $.22. Those warrants vest 20% immediately and 16% upon each draw by the Company of $100,000 under the CMA Note above $1,000,000. 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. W.R. GRACE: Financing Amendment Approved by Bankr. Court -------------------------------------------------------- Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware approved W.R. Grace & Co. and its debtor affiliates' motion for an order authorizing a third amendment to the Debtors' postpetition letter of credit facility agreement. The agreement provides for a $100 million credit facility, which W.R. Grace used on an as-needed basis during the ordinary course of its business operations. Under the amendment, the termination date of their letter of credit facility will be extended from March 1, 2013, to the earlier of June 30, 2014, or W.R. Grace's emergence from bankruptcy protection. The amended agreement also requires W.R. Grace to pay an amendment fee of $200,000, which is $50,000 less than the amendment fees for the first and second amendments. In addition to requiring payment of the facility fee, the termination date will only be extended if the cash collateral security arrangements continue to secure obligations under the total facility. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Drops Bid to Expand Baker Donelson's Services --------------------------------------------------------- W.R. Grace withdrew its motion to expand the scope of services provided by Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., and increase the firm's monthly fees. Baker Donelson provides services in connection with W.R. Grace's legislative affairs, which the company said, have continued to expand. In its previously filed motion, W.R. Grace said the firm needed to increase its staffing for the services to include the special consulting services of William Corcoran. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: David Law Firm Represents Asbestos Claimants -------------------------------------------------------- S. Bradley Cooper, Esq., at The David Law Firm, P.C., in The Woodlands, Texas, further revised his statement to supplement his disclosure pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure. The firm represents creditors that hold claims in varying amounts for monetary damages due to injuries or deaths that resulted from asbestos-related activities of W.R. Grace and its affiliated debtors. The list of the creditors and the nature and amount of their claims is contained in documents available upon the court's order, according to Mr. Cooper. He attested that the firm does not hold any claims against, or interests in, W.R. Grace and its affiliated debtors. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: To Release 4th Quarter Results Feb. 6 ------------------------------------------------- W.R. Grace & Co. said it will release its fourth quarter 2012 financial results at 6:00 a.m. ET on Wednesday, February 6, 2013. A company-hosted conference call and webcast will follow at 11:00 a.m. ET that day. During the call, Fred Festa, Chairman and Chief Executive Officer, and Hudson La Force, Senior Vice President and Chief Financial Officer, will discuss the fourth quarter results and provide an earnings outlook for 2013. A question and answer session with analysts will follow the prepared remarks. Access to the live webcast and the accompanying slides will be available through the Investor Information section of the company's web site, www.grace.com. Those without access to the Internet can participate by dialing +1 800.901.5226 (U.S.) or +1 617.786.4513 (International). The participant passcode is 22134034. Investors are advised to dial into the call at least ten minutes early in order to register. An audio replay will be available at 1:00 p.m. ET on February 6. The replay will be accessible by dialing +1 888.286.8010 (U.S.) or +1 617.801.6888 (International) and entering the participant passcode 73622027. The replay will be available for one week. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of W.R. Grace & Co. and its debtor affiliates' Plan of Reorganization. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WARNER SPRINGS: Court Approves Timothy Landis as Consultant ----------------------------------------------------------- Warner Springs sought and obtained approval from the U.S. Bankruptcy Court to employ Timothy P. Landis, P.H. as environmental consultant. Warner Springs Ranchowners Association, a California non-profit mutual benefit corporation, filed for Chapter 11 protection (Bankr. S.D. Calif. Case No. 12-03031) on March 1, 2012. Judge Louise DeCarl Adler presides over the case. Daniel Silva, Esq., and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the Debtor. The Debtor has hired Andersen Hilbert & Parker LLP as special counsel. The Debtor's schedules disclosed $14,079,894 in assets and $1,466,076 in liabilities as of the Chapter 11 filing. Warner Springs Ranchowners Association manages and co-owns 2,300 acres of unencumbered rural land known as the Warner Springs Ranch in San Diego County, California. The property has a 150-acre golf course, natural hot springs, 250 cottage style hotel rooms, tennis courts, swimming pools and a private airport. The Debtor co-owns the property with over 1,200 other individuals and entities. The Debtor has 54% of the undivided tenancy-in-common fee interests in the property. WARNER SPRINGS: Claims Bar Date Set for Feb. 22 ----------------------------------------------- The deadline for creditors to file proofs of claim in the Chapter 11 case of Warner Springs Ranchowners Association is Feb. 2, 2013. Warner Springs Ranchowners Association, a California non-profit mutual benefit corporation, filed for Chapter 11 protection (Bankr. S.D. Calif. Case No. 12-03031) on March 1, 2012. Judge Louise DeCarl Adler presides over the case. Daniel Silva, Esq., and Jeffrey D. Cawdrey, Esq., at Gordon & Rees LLP, represent the Debtor. The Debtor has hired Andersen Hilbert & Parker LLP as special counsel. The Debtor's schedules disclosed $14,079,894 in assets and $1,466,076 in liabilities as of the Chapter 11 filing. Warner Springs Ranchowners Association manages and co-owns 2,300 acres of unencumbered rural land known as the Warner Springs Ranch in San Diego County, California. The property has a 150-acre golf course, natural hot springs, 250 cottage style hotel rooms, tennis courts, swimming pools and a private airport. The Debtor co-owns the property with over 1,200 other individuals and entities. The Debtor has 54% of the undivided tenancy-in-common fee interests in the property. WILCOX EMBARCADERO: Stipulation on Use of Owens Cash Collateral --------------------------------------------------------------- The Hon. Roger L. Efremsky of the U.S. Bankruptcy Court for the Northern District of California extended, in an interim order, Wilcox Embarcadero Associates, LLC's access to cash collateral which secured creditor Owens Mortgage Investment Fund, asserts an interest. Pursuant to a stipulation, among other things: -- the Debtor is authorized to use the cash collateral of Owens provided that Owens is granted adequate protection; -- the Debtor's right to use cash collateral will terminate on the earlier of (i) Jan. 31, 2013, (ii) or an event of default under the stipulation, (iii) or the date the stipulation ceases to be in full force and effect for any reason; -- the Debtor will continue to make payments on the note in the sum of $7,000 per month on the first day of each month until there is a final order on use of cash collateral, a Plan of Reorganization or another agreement between the parties. On June 19, 2006, the Debtor executed a Fixed Rate Note and Deed of Trust payable to Owens in the amount of $2,640,000 secured by the Debtors sole real property asset located at 1001 22nd Ave., Oakland, California; the Note was due and payable on June 27, 2008. The Owens Deed of Trust contains an assignment of rents. The Owens Deed of Trust is junior to a First Deed of Trust issued to Greater Bay Bank, N.A. which is held by Wells Fargo Bank, N.A. The Note was subsequently modified, extending the date on which it was due and payable to Feb. 1, 2012. The current balance due on the Note, asserted by Owens as of Oct. 31, 2012, is $3,297,570.; the balance due on the Wells Fargo Note, as of Nov. 6, 2012 is $5,813,258. About Wilcox Embarcadero Wilcox Embarcadero Associates, LLC, filed a Chapter 11 petition in Oakland (Bankr. N.D. Calif. Case No. 12-40758) on Jan. 26, 2012. Wilcox operates a commercial building, leasing warehouse, wholesale, retail and office space. Wilcox operates in the Bay Area and has been in business for 10 years. The Debtor says it is a single asset real estate case. Steele, George, Schofield & Ramos LLP represents the Debtor in its restructuring efforts. In its schedules, The Debtor disclosed $10.2 million in assets and under $8.6 million in liabilities. The Debtor's property secures an $8.55 million debt to Wells Fargo and Owens Mortgage Investment Fund, LP. The Debtor said it incurred financial difficulty when its primary lender, the holder of the First Deed of Trust, refused to extend, modify or refinance the loan. The Debtor is in negotiations with a new lender to take out the lender, but needs more time to accomplish this task. WVSV HOLDINGS: Amends Plan Outline to Address 10K Objection ----------------------------------------------------------- WVSV Holdings, L.L.C., filed with the U.S. Bankruptcy Court for the District of Arizona Amended Disclosure Statement explaining the proposed Plan of Reorganization. The Debtor notes that creditor, 10K, LLC objected to the original disclosure Statement, and believes, among other things, that the Disclosure Statement does not contain adequate information. 10K also contends that the Plan cannot be confirmed and approved by the Bankruptcy Court. According to the Amended Disclosure, the Debtor will sell the real property pursuant to either (1) Section 363 of the Bankruptcy Code, or (2) in the normal course of the Reorganized Debtor's business post-confirmation. Additionally, in the event 10K, LLC is successful on its claim for rescission, the Debtor holds a claim against 10K, LLC for approximately $28 million. The Debtor proposes to treat claims as, among other things: Class 1 -- holder of Perkins Coie Claim will be paid in full on the Effective Date. The Debtor will obtain sufficient monies either from financing, or a sale of a portion of Tract A to fully satisfy the allowed Class 1 Claim. Class 2 -- 10K, LLC Judgment Claim. The Debtor will either (1) obtain adequate financing or (2) sell a portion of Tract A. From the proceeds of either the sale or financing, the Debtor will escrow sufficient monies that would otherwise satisfy the Judgment claim. Class 3 -- each holder of General Unsecured Claims will receive 100% of its allowed general unsecured claim. Payment will be made in four equal semi-annual payments, the first of which will commence 60 days after the Effective Date. Interest will accrue on these claims at the federal judgment interest rate. Class 4 -- holder of 10K, LLC Secured Claim will continue to receive payment(s) in accordance with the current loan documents, which provide for (1) no interest accrual; (2) principal pay-down(s) at the rate of $5,000 per acre; and (3) a 20% "profit participation". Class 5 -- holder of Pacific Coach/Spurlock Members' Claim will receive monthly interest on a semi-annual basis. Interest will accrue at the rate of 7.5% per annum through July 15, 2015. Interest will thereafter increase to 8.75% per annum. Semi-annual payments will commence on Jan. 15, 2013. All sums will be due and payable to the holder of the Class 5 Claim on or before July 15, 2018. The First Beneficial Interest lien will be released only in accordance with the terms of First American Title Trust 8435. Class 6 -- holder of 10K, LLC Claim will receive payment, if any, only after the conclusion of either (1) the Arizona Litigation, or (2) the resolution of the claim as filed in the Bankruptcy Court. The Debtor estimates this claim to be $0. However, in the event of any adverse judgment, payments will commence 30 days after the date which the judgment will become final and all appeals have been exhausted. Payments will accrue interest at the federal judgment rate. Semi-annual payments in the amount of $340,000 will be made until the earlier of (1) payment of the claim in full, or (2) 15 years after the date of the first payment, at which time all remaining amounts will be due and payable. Class 8 -- Members will receive their return of capital and pro-rata distribution of any monies available for distribution, in accordance with the operating agreement of the debtor, provided the Debtor is current on all payments required under the Plan. Class 9 -- The holder of Maricopa County Secured Tax Claim will receive payment in full on the Effective Date. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/WVSV_HOLDINGS_ds_amended.pdf About WVSV Holdings W.V.S.V. Holdings LLC, the owner of about 13,000 acres of vacant land in Buckeye, Arizona, filed a petition for Chapter 11 protection (Bankr. D. Ariz. Case No. 12-10598) on May 14, 2012, in Phoenix. The Debtor claims that the three tracts of land planned for "future development" are worth $120 million and secure $57.3 million in debt. The Debtor scheduled $120.04 million in assets and $57.35 million in liabilities. West Valley Ventures, LLC, owns 75% of the Debtor, and Breycliffe, LLC, owns the remaining 25%. Judge Redfield T. Baum, Sr., presides over the case. Michael W. Carmel, Esq., serves as the Debtor's counsel. The petition was signed by Lee Allen Johnson, manager of West Valley Ventures, manager. The U.S. Trustee has not appointed an official committee of unsecured creditors in the Debtor's case 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 the committee should interest develop among the creditors. XZERES CORP: Delays Form 10-Q for November 30 Quarter ----------------------------------------------------- Xzeres Corp. has experienced a delay in completing the information necessary for inclusion in quarterly report on Form 10-Q for the period ended Nov. 30, 2012. The Company expects to file the Quarterly Report within the allotted extension period. About XZERES Corp. Headquartered in Wilsonville, Oregon, XZERES Corp. designs, develops, and markets distributed generation, wind power systems for the small wind (2.5kW-100kW) market as well as power management solutions. As reported by the Troubled Company Reporter on July 3, 2012, Silberstein Ungar, PLLC, in Bingham Farms, Michigan, expressed substantial doubt about XZERES' ability to continue as a going concern, following its audit of the Company's financial position and results of operations for the fiscal year ended Feb. 29, 2012. The independent auditors noted that the Company has incurred losses from operations, has negative working capital, and is in need of additional capital to grow its operations so that it can become profitable. The Company's balance sheet at Aug. 31, 2012, showed $4.4 million in total assets, $5.6 million in total current liabilities, and a stockholders' deficit of $1.2 million. XZERES CORP: Amends 2012 Form 10-K to Revise Disclosures -------------------------------------------------------- Xzeres Corp. has amended its annual report for the year ended Feb. 29, 2012, to incorporate the revised disclosures it made in order to more fully comply with Item 308 of Regulation S-K. The amendment had no effects to the Company's consolidated statements of operations and balance sheets. A copy of the Annual Report, as amended, is available at: http://is.gd/oF5y3B About XZERES Corp. Headquartered in Wilsonville, Oregon, XZERES Corp. designs, develops, and markets distributed generation, wind power systems for the small wind (2.5kW-100kW) market as well as power management solutions. As reported by the Troubled Company Reporter on July 3, 2012, Silberstein Ungar, PLLC, in Bingham Farms, Michigan, expressed substantial doubt about XZERES' ability to continue as a going concern, following its audit of the Company's financial position and results of operations for the fiscal year ended Feb. 29, 2012. The independent auditors noted that the Company has incurred losses from operations, has negative working capital, and is in need of additional capital to grow its operations so that it can become profitable. The Company's balance sheet at Aug. 31, 2012, showed $4.4 million in total assets, $5.6 million in total current liabilities, and a stockholders' deficit of $1.2 million. ZACKY FARMS: Lillian Zacky Family Trust Wins Auction ---------------------------------------------------- Zacky Farms, LLC on Jan. 21 disclosed that it conducted a Chapter 11 auction for substantially all of its assets and that The Robert D. Zacky and Lillian D. Zacky Family Trust was the successful bidder. As part of the transaction, the Trust will retain substantially all of the Zacky employees. The auction results were announced at a hearing of the Bankruptcy Court on January 18, 2013. The sale is subject to approval by the Bankruptcy Court at a final hearing scheduled for 2:00 p.m. on Monday, Jan. 28, 2013. Terms of the DIP financing require the sale to close by January 31, 2013. Imperial Capital served as investment banker for the seller in the transaction. Keith Cooper, Chief Restructuring Officer of Zacky Farms said, "We are extremely pleased that the Zacky Trust was the successful bidder whereby the operations and jobs of Zacky Farms are preserved. Further, this result confirms the commitment of Lillian Zacky and Scott Zacky to the continued operation and turnaround of Zacky Farms." Mr. Cooper added, "I would like to personally thank all of the employees, customers, growers and vendors who have stood by Zacky Farms over the past 31/2 months and have supported Zacky Farms during this challenging process. This is a great day for Zacky Farms and the Zacky family of employees because it is now possible for Sam and Bob Zacky's legacy to continue with the third and fourth generations of the Zacky Family dedicated to the future of this company." 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. ZUERCHER TRUST: Court Orders Appointment of Ch. 11 Trustee ---------------------------------------------------------- Secured creditor Win Win Alexander Union, LLC, failed in its bid to have the Chapter 11 case of debtor The Zuercher Trust of 1999 dismissed. However, Win Win Alexander did obtain approval of its request that it be excused from turnover requirements. The bankruptcy judge also ordered the appointment of a Chapter 11 trustee. Bankruptcy Judge Thomas E. Carlson held hearings in December and January with respect to Win Win's motion for relief from the automatic stay to proceed with its state court remedies of receivership and foreclosure proceedings against The Zuercher Trust of 1999's certain pieces of real property commonly known as 621 S. Union Avenue, Los Angeles, CA (the "Union Property") and 1639 N. Alexandria Avenue, Los Angeles, CA (the "Alexandria Property"). In its motions, Win Win Alexander said that the Debtor commenced the case for one purpose only -? to prevent the foreclosure sale of the Alexandria Property that was scheduled on Sept. 27, 2012. Win Win Alexander noted that: -- the Debtor has no equity in either the Alexandria Property or the Union Property; -- the subject properties do not generate sufficient income to cover either of the subject properties' general operating expenses; and -- the Debtor has no other source of funds with which to maintain and run the subject properties or with which to provide Win Win with adequate protection payments. Furthermore, Win Win Alexander points out that the subject properties were both in dilapidated and dangerous conditions prior to being placed into receiverships that they were each involuntarily placed in the Los Angeles City Housing Department's Rent Escrow Account Program, which repairs and compliances are still underway in connection with the Union Property, and which rehabilitation and repairs were recently completed over the summer at the Alexandria Property causing it to be removed from REAP. Nevertheless, the subject properties each are still under state court receivership orders and rental income for the Union Property is still being processed through REAP. In a December order, the bankruptcy judge order the Debtor to file and serve appraisals of its Union Property and Alexandria Property. Following a hearing on Jan. 14, the bankruptcy judge ruled that the motions for relief from stay are denied at this time. The bankruptcy judge though directed the U.S. Trustee to appoint a Chapter 11 trustee. The bankruptcy judge ordered that on or before Feb. 14, 2013, the chapter 11 trustee will file and serve a brief report that specifies: (a) whether Trustee will defend the Motions for Relief from Stay; and (b) whether Trustee has received any offers to purchase the Union Property or the Alexandria Property. The court will hold a continued hearing on the Motions for Relief from Stay on February 19, 2013 at 11:00 a.m. About The Zuercher Trust of 1999 San Mateo, California-based The Zuercher Trust of 1999 filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case No. 12-32747) on Sept. 26, 2012. Bankruptcy Judge Thomas E. Carlson presides over the case. Derrick F. Coleman, Esq., at Coleman Frost LLP, serves as the Debtor's counsel. The Debtor, a business trust, disclosed $27,717,500 in assets and $8,808,349 in liabilities as of the Chapter 11 filing. The Debtor owns property in 621 S. Union Avenue, in Los Angeles. The property is currently in REAP for alleged city health code violations. The petition was signed by Monica H. Hujazi, trustee. * Moody's Says Speculative-Grade Liquidity Still Face Threats ------------------------------------------------------------- The liquidity of speculative-grade borrowers remained resilient in the first few weeks of 2013, says Moody's Investors Service in its January SGL Monitor. By mid-January, Moody's Liquidity-Stress Index (LSI) had dipped to 3.4%, down from 3.6% at the start of the month. The LSI falls as corporate liquidity improves. The LSI is close to the record low 3.1% it reached in July 2012 and far below its historical average of 7.4%, over a span dating back to 2002. The LSI reached a record high of 20.9% in March 2009. "For now, accessible credit markets are allowing companies to remedy liquidity issues before they grow serious," says John Puchalla, a Moody's Vice President -- Senior Credit officer. "Many companies are refinancing pending maturities amid low interest rates, pushing US high-yield bond issuance to a record $260.7 billion in 2012." Issuance appeared to have slowed in early January from the last year's blistering pace, Mr. Puchalla reports, but remains healthy with refinancing activity continuing. There are several meaningful threats to the healthy liquidity, however. Possible problems include tepid corporate earnings performance, the enacted and potential for US tax increases and spending cuts to address the federal deficit and if Europe's sovereign-debt problems should worsen. Any one of these developments could pressure corporate liquidity by reducing cash flow or access to credit markets, says Moody's. A leading indicator of the default rate, the low LSI is consistent with Moody's view that the US speculative-grade default rate will remain low in 2013 after finishing 2012 at 3.2%. Moody's forecasts the default rate declining to 2.7% by June and ending 2013 at 3.0%. The LSI measures the percentage of companies with an SGL-4 rating, Moody's lowest speculative-grade liquidity (SGL) rating. An SGL rating is an assessment of a speculative-grade company's intrinsic liquidity position over the coming 12-15 months. Long-term rating downgrade rates were typically higher during 2012 for companies with lower SGL ratings. For example, 50% of the companies with an SGL-4 rating at the end of 2011 ended 2012 with a lower Corporate Family Rating (CFR). That was much higher than the downgrade rate among issuers with stronger SGL ratings. Less than 10% of the companies with an SGL-1 and SGL-2 liquidity rating at the end of 2011 saw their CFRs move lower during 2012. Moody's Covenant-Stress Index (MCSI) declined in December to 2.3% from 2.4% in November, indicating a low risk of covenant violations. This index is up just slightly from the record-low 1.8% recorded in May and, before that, in July and August 2011. * Moody's Says Foreclosure Timelines Continue to Extend ------------------------------------------------------- The number of aged loans in foreclosure fell for most servicers of residential mortgage-backed securities in the third quarter of 2012. This is a promising trend for servicers, according to a new analysis by Moody's Investor Service, and indicates that servicers are finally putting behind them the operational and regulatory issues that plagued them in the past and are taking the steps necessary to address their backlogged foreclosure inventory. However, per Moody's latest "Servicer Dashboard" report, foreclosure timelines continued to extend for all servicers. Some additional third-quarter trends noted in the report were that cure and cash flow rates worsened for most servicers, collections metrics for Alt-A and subprime loans improved and modification re- default rates increased as re-modifications rose. Decline in inventory of aged foreclosures In the jumbo sector, all servicers except CitiMortgage, which has by far the smallest volume of aged loans in foreclosure in the jumbo sector, saw a slight uptick in the third quarter. In the subprime sector, while the overall volume of aged loans in foreclosure dropped by 2.1%, Bank of America, which has the largest volume in the sector, experienced a 3.2% increase quarter over quarter. Foreclosure timelines continued to extend Timelines for completed foreclosures continued to lengthen in the third quarter as servicers worked their way through the aged pipeline. In addition, court systems in judicial states such as New York, New Jersey and Florida remained overwhelmed by the sheer number of cases to be processed. REO sale timelines remained virtually unchanged over the past three quarters. Collections metrics improved The improvement in the economy and the success of previous modifications resulted in the improved current-to-worse roll rates for all servicers, with the exception of CitiMortgage in their jumbo and Alt-A portfolios. Cure and cash flow rates worsened A drop in servicer modification volumes, as the pool of potential candidates continued to thin, caused the decline in the total cure and cash flowing rate metric for most servicers and loan types. Only Ocwen's Subprime portfolio and Chase for all loan types experienced an increase in the third quarter over the second quarter. Modification re-default rates increased Re-modifications rates rose for the majority of servicers and products from the previous quarter. In particular, GMAC's re- default rate for Jumbo increased to 45% as their level of re- modifications increased and Ocwen's subprime re-default rate rose to nearly 55%, mainly due to the performance of distressed portfolios that they had previously acquired. * Regionals Showing Better Health than Big Banks in Latest Reports ------------------------------------------------------------------ Suzanne Kapner and Shayndi Raice, writing for The Wall Street Journal, reported that quarterly earnings reports released on Jan. 17 underscore the lingering illnesses afflicting some of the largest, best-known U.S. banks and the comparatively ruddy health of some smaller regional lenders. Bank of America Corp., the second-largest U.S. bank by assets, posted a 63% decline in fourth-quarter net income, thanks to mortgage-related legal costs, according to the report. At Citigroup Inc., the No. 3 U.S. bank, net income rose 25% from a year earlier but fell far short of Wall Street analysts' expectations, as profit was squeezed by low interest rates, the report added. Shares of Bank of America dropped 4.2% and Citigroup fell 2.9% on Jan. 17, a day when U.S. blue-chip stocks rose. Meanwhile, a regionally diverse group of smaller lenders has been thriving with a mix of simpler businesses and sharper focus on local customers, WSJ pointed out. The group includes PNC Financial Services Group Inc. of Pittsburgh, Fifth Third Bancorp of Cincinnati and BB&T Corp. of Winston-Salem, N.C. All three posted results that showed rising revenue, solid profit and expansion in lending volume, WSJ said. Shares of Fifth Third jumped 4.8%, those of PNC rose 3.7% and BB&T's rose 1.9%. The results, according to WSJ, highlight the challenges facing the largest banks amid uneven financial performance and increasing investor skepticism. Troubles at the largest lenders have helped push some customers to major regional players. Zeke Turner, chief executive of senior-housing developer Mainstreet Property Group LLC in Cicero, Ind., told WSJ his company received a $25 million revolving- credit facility from PNC Bank when larger banks weren't responsive. "They understood our industry and put together a structure that fit what we were trying to do," he said. "PNC stepped up when others thought we were too small." A major factor in the divergent results: Bank of America and Citigroup have largely missed out on the mortgage-refinancing boom that padded profit in the past year at many banks, according to WSJ. Bank of America said mortgage originations were flat with a year earlier in the fourth quarter and dropped 50% for 2012 to $75.1 billion, WSJ said. At Citigroup, fourth-quarter mortgage originations of $16.8 billion were down 20% from a year earlier. In contrast, in 2012 mortgage originations rose 47% to $524 billion at Wells Fargo WFC -0.29% & Co. and 24% to $181 billion at J.P. Morgan Chase JPM +0.04% & Co. Adding to the toxic brew for some larger banks is public disaffection with giant firms that are perceived as slow and unresponsive and, in some cases, as having benefited disproportionately from government bailouts in 2008 and 2009 without offering commensurate benefits to the public, WSJ said. The business model in use at Bank of America and Citigroup is "too big to profit, not just too big to fail," Joshua Siegel, chief executive of StoneCastle Partners LLC, a New York firm that invests in banks, told WSJ. Revenue declined in 2012 for the third consecutive year at Bank of America and for the second year in a row at Citigroup. Revenue at the two companies has declined $50 billion, or 24%, from its peak. In the past year, in contrast, revenue rose 12% at BB&T, 10% at Fifth Third and 8% at PNC. Bank of America Chief Executive Brian Moynihan acknowledged on a call with analysts that profitability remains a challenge for the company, WSJ related. Its return on equity for 2012 was 2.6%. "The issue is recurring earnings levels," said Mr. Moynihan. Michael Corbat, Citigroup's chief executive, said that improving returns and realizing core earnings potential were "critical goals" for the company, whose 2012 earnings dropped 32% from a year earlier to $7.54 billion, WSJ added. Large U.S. lenders continue to foot a hefty bill from the run-up to the housing bust and financial crisis, according to WSJ. A dozen lenders have settled this month alleged foreclosure-abuse probes by regulators with promises to pay borrowers $9 billion. Mr. Siegel, according to WSJ, said that smaller regional or community banks don't have the complexity that weighs down many of their larger peers, an observation that helps to explain the steep discount to book value, or reported net worth, in effect at Bank of America and Citigroup. Most of the U.S. regional banks trade near or above their book value. Regionals have boosted lending, WSJ pointed out. Fifth Third said loans outstanding at the nation's 18th-largest bank increased 5.7% in 2012 to $88.7 billion, largely due to a surge in mortgage refinancing and a 15% increase in commercial and industrial loans. Loans rose 17% in 2012 at PNC, to $185.9 billion, and 6.4% at BB&T to $118.4 billion. "We've benefited from a refinancing boom and that has augmented our results fairly significantly," said Dan Poston, Fifth Third's chief financial officer, WSJ cited. "The bigger banks have more onerous regulatory concerns, whether that's the capital they are required to hold, or new regulations that impact their trading or derivatives books." Glenn Gable, who runs Freeway Lanes Bowling Group, a chain of bowling alleys in Cleveland, said he tried to get loans from larger banks but was turned away, WSJ noted. "They weren't interested in lending to someone in the bowling industry," Mr. Gable said. Instead, Mr. Gable turned to Fifth Third, which gave him a $7 million credit line. "A regional bank doesn't just write you off. They spend time getting to know you and your business and looking at your track record," he said. Glenn Schorr, an analyst with Nomura Securities, told WSJ that regional banks aren't immune from the industry's problems, such as low interest rates and difficult acquisitions. PNC stock is up 1% over the past year, lagging behind a 25% gain in the KBW banks index, amid hiccups tied to takeovers of large properties, including last year's purchase of RBC's U.S. retail business and the 2008 acquisition of National City Corp. Some investors are holding out hope that the large banks will benefit from stronger capital markets, which show signs of rebounding this year, according to WSJ. Toward the middle of last year, Anton Schutz, president of Mendon Capital Advisors Corp. of Rochester, N.Y., which manages $150 million for clients, started funneling more money into big bank stocks on expectations that capital markets would begin to improve. "That's when big banks start minting money," said Mr. Schutz, the WSJ report said. * Law360 Names Akin Gump Bankruptcy Group of The Year ----------------------------------------------------- Jamie Santo of BankruptcyLaw360 reported that bringing together disparate creditor constituencies and bringing home better-than- expected recoveries in billion-dollar bankruptcies such as Washington Mutual Inc. and Dynegy Holdings LLC brought the restructuring pros at Akin Gump Strauss Hauer & Feld LLP a place among Law360's Bankruptcy Groups of the Year. Representing committees has long been an Akin Gump calling card, and the firm burnished that reputation in 2012, a year that saw creditor-friendly Chapter 11 plans confirmed in long-standing cases such as WaMu and St. Vincent Catholic Medical Centers of New York, the report added. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($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) - 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) 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 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) 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 QUICKSILVER RES KWK US 2,490.2 (146.7) 68.0 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) VISKASE COS I VKSC US 334.7 (3.4) 113.5 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 ***