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/raid1/www/Hosts/bankrupt/TCR_Public/130207.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, February 7, 2013, Vol. 17, No. 37 Headlines 15-35 HEMPSTEAD: Court Dismisses Chapter 11 Case A&S GROUP: Has Access to SunTrust Cash Collateral Until March 1 AGFEED INDUSTRIES: Farm Credit Inks Forbearance Agreement AHL THIRD: Case Summary & 8 Largest Unsecured Creditors AJW OFFSHORE: Funds Receive U.S. Protection in Central Islip ALLIED SYSTEMS: $57M Suit Says Yucaipa Schemed to Grab Control AMERICAN AIRLINES: Finalizing Fine Points of USAir Merger Deal AMERICAN RENAL: S&P Affirms 'B' CCR, Rates New $450MM Loan 'B-' API TECHNOLOGIES: Senator Investment Discloses 10.7% Equity Stake ARCHDIOCESE OF MILWAUKEE: 2 Clergy Abuse Claims Will Go to Trial ARTE SENIOR LIVING: T. Teeple Named Patient Care Ombudsman ATI FARMS: Case Summary & 17 Largest Unsecured Creditors ATP OIL: Heads Toward Showdown Over New Bankruptcy Financing AURASOUND INC: Aims to Sell Assets to GGEC America for $4.8MM B+H OCEAN: Court Confirms Reorganization Plan BEHRINGER HARVARD: BHSTO Fund Has Two Remaining Assets BERRY PLASTICS: Files Form 10-Q, Incurs $10-Mil. Loss in Q1 2013 BIOLIFE SOLUTIONS: Cardiac Dimensions CEO Joins BioLife Board BISSETT PRODUCE: Case Summary & 20 Largest Unsecured Creditors BRIER CREEK: Court Rules on Valuation of Select Properties BRIXMOR LLC: Moody's Lifts Sr. Debt Rating to B3; Outlook Stable BRODKEY BROTHERS: Voluntary Chapter 11 Case Summary CAESARS ENTERTAINMENT: Plans to Offer $1.5 Billion of Sr. Notes CARDINAL FASTENER: Court Directs Special Counsel to Turn Over Docs CARPENTER CONTRACTORS: Exited Bankruptcy in November 2012 CASH STORE: Moody's Reviews 'B3' CFR for Possible Downgrade CENTRAL EUROPEAN: Appoints Former Dist. Judge Farnan to Board CHRYSLER GROUP: Fiat Aims to Close Deal Next Year CLINICA REAL: Objection to Claims Dischargeability Extended COUNTRYWIDE FIN'L: Fresh Questions Emerge over BofA Settlement DALLAR ROADSTER: Submits Revised Budget After TCB Objection DAVCOMMERCIAL ACQUISITIONS: Voluntary Chapter 11 Case Summary DELL INC: Fitch Cuts Issuer Default Rating to 'BB+' on LBO Deal DH-EVANS LLC: Case Summary & 4 Largest Unsecured Creditors DOWENT FAMILY: Case Summary & 8 Unsecured Creditors EASTMAN KODAK: Closes IP Sale, Seeks Exclusivity Thru May 31 EATERIES INC: Garfield's and Garcia's Secret Bankruptcy Hit EDISON MISSION: Section 341(a) Meeting Scheduled for Feb. 21 EDUCATION HOLDINGS: Seeks OK for DLA Piper and A&M GATZ PROPERTIES: Riverhead Golf Course Searches for Buyer GENERAL AUTOMOTIVE: Files Petition for Chapter 7 GENESIS ENERGY: S&P Rates $300MM Senior Unsecured Notes 'B' HANDY HARDWARE: Donlin Recano Tapped as Claims & Noticing Agent HAWKER BEECHCRAFT: Plan Confirmation Order Signed Feb. 1 HILLTOP FARMS: Can Use First Bank's Cash Collateral Until April 30 HOMEREADY 55: Case Summary & 7 Unsecured Creditors HUDSON HEALTHCARE: Retains DRC as Claims & Noticing Agent HUDSON VALLEY: Orange County Choppers Unit Sent to Liquidation HURLEY MEDICAL: Fitch Rates Series 2013A & B Revenue Bonds 'BB+' HYMAN BIBER: Ch.7 Trustee May Amend Clawback Suit Against BofA INSPIRATION BIOPHARMA: Cangene Agrees to Acquire Hemophilia Assets INSPIREMD INC: Incurs $1.9 Million Net Loss in Dec. 31 Quarter INTERFAITH MEDICAL: Retains Donlin Recano as Claims Agent IZEA INC: Frost Gamma Discloses 9.1% Equity Stake JASON INC: S&P Assigns 'B+' Corporate Credit Rating JEFFERSON COUNTY, AL: Creditors' Trustee Misses Feb. 1 Payment JEFFERSON COUNTY, AL: Hearing With Sewer Bondholders Not Completed JILL ACQUISITION: Moody's Affirms 'Caa1' CFR; Outlook Positive KI CHANG PARK: Loses Appeal Over Trustee's Sale of Assets LA JOLLA: Gets Notice of Allowance for Patent Covering GCS-100 LAND SECURITIES: U.S. Trustee Opposes Retainers for Advisors LDK SOLAR: Venice Court Enforces $31-Mil. Arbitration Award LEGENDS GAMING: Chickasaw Tribe Sues Over Failed Sale LEHMAN BROTHERS: Broker Earmarks $15.2 Billion for Customers LIFEPOINT HOSPITALS: Moody's Affirms Ba2 CFR After Loan Upsizing LODGENET INTERACTIVE: Obtains Approval for KCC as Claims Agent LODGENET INTERACTIVE: Taps Deloitte as Tax Advisor LODGENET INTERACTIVE: Miller Buckfire Tapped as Investment Banker LODGENET INTERACTIVE: Equity Trading Rules Has Interim OK MARTIN FOREST: Voluntary Chapter 11 Case Summary MEDICAL ALARM: Expects to be Profitable in Fiscal Third Quarter METRO FUEL: Shouldn't Liquidate, Unsecured Creditors Say MF GLOBAL: SIPA Trustee's Claims Review "Substantially Complete" MF GLOBAL: Ch. 11 Trustee Joins Creditors in Proposed Plan MF GLOBAL: Customers to Get Most of Their Money Back MICRON TECHNOLOGY: S&P Rates Sr. Convertible Notes Due 2033 'BB-' MSR RESORT: Parties Await Plan Confirmation Ruling MUTUAL BANK: 7th Circ. Backs FDIC Win in Exec's $30M Suit N & G PRO: Case Summary & 6 Largest Unsecured Creditors NATIONAL MENTOR: S&P Retains 'B+' Rating on $550MM Term Loan NATIONSTAR MORTGAGE: Moody's Cuts CFR to 'B2'; Outlook Stable NATURAL PORK: Hiring Variant Capital as Investment Banker NEW ENGLAND COMPOUNDING: Retains DRC as Claims & Balloting Agent NICHOLAS HAMIC: Case Summary & 13 Largest Unsecured Creditors NIFTUS LLC: Court Coverts Case to Chapter 7 Liquidation NII HOLDINGS: S&P Assigns 'B-' Rating to $400MM Sr. Notes Due 2019 NNN PARKWAY: Breakwater Files Contempt-of-Court Motion v. LNR OCALA FUNDING: Files Chapter 11 Litigation Plan OMEGA NAVIGATION: Subsidiaries Set for Feb. 22 Auction OVERSEAS SHIPHOLDING: Gets $25M DIP to Keep Tankers Afloat OVERSEAS SHIPHOLDING: New York Judge Consolidates 3 Class Suits PALOMAR HEALTH: Fitch Affirms 'BB+' Rating on 4 Bond Classes PATRIOT COAL: Carmody MacDonald OK'd as Committee's Local Counsel PENSON WORLDWIDE: Sets March 14 Hearing on Disclosure Statement PETTERS COMPANY: PBE Trustee Allowed to Use Cash Until December PETTERS COMPANY: Mark A. Weisbart OK'd as Trustee's Local Counsel PETTERS COMPANY: Stuarts Walker Hersant OK'd as Cayman Counsel PHARMACEUTICAL RESEARCH: S&P Withdraws 'B' Corporate Credit Rating PICCADILLY RESTAURANTS: Exclusivity Periods Extended Thru April 9 PINNACLE AIRLINES: File Committee-Backed Reorganization Plan PONCE TRUST: Files Schedules of Assets and Liabilities PQ CORP: S&P Retains 'B+' CCR Following Repricing of $1.2BB Loan POWERWAVE TECHNOLOGIES: Cash Use Requires Sale Deal by Feb. 9 REGAL ENTERTAINMENT: Fitch Affirms 'B+' Issuer Default Rating RESIDENTIAL CAPITAL: Creditors Generally Oppose Trust Settlement RESIDENTIAL CAPITAL: Insurers Cry Foul Over $8.7B MBS Settlement RESIDENTIAL CAPITAL: Ally CEO Threatens to Withdraw $750M Deal REVLON CONSUMER: S&P Assigns 'B' Rating to $400MM Sr. Unsec. Notes REVSTONE INDUSTRIES: Creditors Demand Ch. 11 Trustee RITE AID: Fitch Assigns 'BB-' Rating to New $1.72BB Revolver Loan RITE AID: Moody's Reviews 'Caa1' CFR for Possible Upgrade ROTHSTEIN ROSENFELDT: Some Creditors May Recoup 100% Under Plan RS HOLDINGS: Case Summary & 7 Largest Unsecured Creditors SAN DIEGO HOSPICE: Case Summary & 20 Largest Unsecured Creditors SATCON TECHNOLOGY: Fails to Find Buyer, Seeks Ch. 7 Liquidation SAVE MOST: Can Access JPMC Cash Collateral Until June 30 SAVE MOST: SDCCU Consents to Use of Cash Collateral Until May 31 SCHOOL SPECIALTY: Feb. 25 Final Hearing on $50MM Loan Plus Roll-Up SCHOOL SPECIALTY: Wins Approval for KCC as Claims & Notice Agent SCHOOL SPECIALTY: Removes Break-Up Fee, Still Seeks Quick Sale SEA LAUNCH: Boeing Co. Says Partners Owe $350M Over Satellite Co. SIERRA NEGRA: Disclosure Statement Hearing Tomorrow SK REAL PROPERTY: Case Summary & 2 Unsecured Creditors SOUTHERN MODULAR: Court Dismisses Involuntary Chapter 11 Case SPANSION INC: Employee Not Entitled to Retention Bonus SPEEDY CASH: S&P Affirms 'B' Issuer Credit Rating STARZ LLC: S&P Affirms 'BB' Rating on Senior Notes Due 2019 SUNSHINE HOTELS: Case Summary & 20 Largest Unsecured Creditors TEXAS WYOMING: Former President & COO Allowed $162,500 in Claims TOPAZ POWER: Moody's Rates $590 Million Senior Secured Loans 'B1' TRAINOR GLASS: Plan Filing Period Extended Until March 11 TRANS NATIONAL COMMS: Proposes $14-Mil. Sale to Blue Casa VELO HOLDINGS: Taken Over by Secured Lenders W.R. GRACE: Reports $111.6-Mil. Net Loss in Fourth Quarter 2012 WAGSTAFF MINNESOTA: Joins Forces With Creditors on Exit Plan WAUPACA FOUNDRY: Moody's Sees Loan Upsizing as Credit Negative WINECARE STORAGE: Seeks Chapter 11, Blames Hurricane Sandy YEHUD-MONOSSON: SIST Founder Sued for Fraudulent Transfers * Earned-Income Credit Validly Exempted From Creditors' Claims * Lender Not Required to Take Title to Abandoned Collateral * Fitch Sees More Bankruptcy Filings in U.S. Coal Industry * Moody's Notes Stable Outlook in 4Q 2012 for US Property Market * Junk-Company Liquidity Strengthens in January * Schools Suing Former Students Shows Crisis in Loans to Poor * Standard & Poor's Faces U.S. Suit over Mortgage Bond Ratings * BlackRock Sued by Funds over Securities Lending Fees * Bankruptcy Filings Fell Lowest in Five Years * Pie Shrinks For Bankruptcy Attorneys as Filings Drop Again * 5th Cir. Appoints Jason Woodard as N.D. Miss. Bankruptcy Judge * 9th Cir. Appoints Daniel Collins as Arizona Bankruptcy Judge * Daniel McElhinney Joins DRC's Business Development Team * Greenberg Traurig Fla. Bankruptcy Head Will Open Solo Firm * Groom Law Group Adds Seasoned Skadden Litigator in DC * KCC Recognized as Finalist in M&A Advisor's Turnaround Awards * Pepper Hamilton Picks Louis J. Freeh as Next Chair * Recent Small-Dollar & Individual Chapter 11 Filings ********* 15-35 HEMPSTEAD: Court Dismisses Chapter 11 Case ------------------------------------------------ The Bankruptcy Court has dismissed 15-35 Hempstead Properties, LLC's Chapter 11 case effective Dec. 20, 2012. Karen L. Gilman, Esq., the Chapter 11 trustee, sought the dismissal of the Chapter 11 case, saying that all meaningful assets of the Debtors' estates have been liquidated. The Chapter 11 Trustee proposed to disburse $82,695 for creditors holding allowed general unsecured claims. Dismissal was delayed due to certain issues with the U.S. Trustee. The official committee of unsecured creditors backed the Chapter 11 trustee's dismissal request. About 15-35 Hempstead Properties 15-35 Hempstead Properties LLC and affiliate Jackson 299 Hempstead LLC owned real property at 101 Boardwalk in Atlantic City, New Jersey. They filed for Chapter 11 bankruptcy protection (Bankr. D.N.J. Case Nos. 10-43178 and 10-43180) on Oct. 26, 2010. Albert A. Ciardi, III, Esq., at Ciardi Ciardi & Astin, serves as counsel to the Debtors. The Debtors each estimated assets and debts at $10 million to $50 million. A&S GROUP: Has Access to SunTrust Cash Collateral Until March 1 --------------------------------------------------------------- The Bankruptcy Court has authorized A&S Group, Inc., in a sixth interim order, to use cash collateral of SunTrust Bank until March 1, 2013. The use of any cash collateral will be restricted to payment of operating expenses specified in the budget. Specifically, the Debtor is authorized to pay rent for the real property commonly known as 5351 Royal Woods Parkway, Tucker, Georgia to United Community Bank in the amount of $10,792, to be paid on Feb. 15, 2013, as provided by the budget. SunTrust consents to this payment only on the condition that UCB agrees not to seek any further rent for the month of February 2013 and agrees not to seek a lifting of the automatic stay to foreclose on the property. The Debtor owes SunTrust pursuant to commercial notes executed by the Debtor: (i) revolver note dated July 14, 2011, in the original principal amount $3,500,000; and (ii) term note dated Sept. 29, 2008, in the original principal amount of $650,000. As of Aug. 30, 2012, the outstanding unpaid balances (principal, interest and late fees) on the revolver note and term note was $3,559,506 and $312,143, respectively. The notes are secured by all assets of the Debtor. As a condition of the Debtor's use of SunTrust's cash collateral, the Debtor is authorized to grant the Bank, as of the date of filing its petition, a continuing, additional first priority replacement liens. About A&S Group Tucker, Georgia-based A&S Group, Inc., aka A&S Marbel and Granite Imports, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-72662) in Atlanta, on Sept. 9, 2012. The Debtor is an importer and distributor of decorative ceramic tile and mosaics, and natural stone products, most of which are used for wall and floor applications and counter and table tops in residential and commercial properties. The Debtor's customer base includes local, regional and national retailers, home centers, developers and retailers. Judge Wendy L. Hagenau oversees the case. The Law Office of A. Keith Logue, Esq., serves as the Debtor's counsel. The Debtor listed total assets of $10,278,149 and total debts of $17,580,095 in its schedules. The petition was signed by Sami Durukan, president. AGFEED INDUSTRIES: Farm Credit Inks Forbearance Agreement --------------------------------------------------------- AgFeed USA, LLC, and its affiliates entered into a forbearance agreement with Farm Credit Services of America, FLCA, and Farm Credit Services of America, PCA, in connection with the Credit Agreement, dated June 6, 2006. In the Forbearance Agreement, Farm Credit agreed that it will take no action to enforce its default remedies under the Credit Agreement and related security and other agreements until the earlier of (1) violation of the Forbearance Agreement or further breach of the Credit Agreement and related security and other agreements or (2) March 1, 2013. The parties also entered into an amendment to the Credit Agreement to provide, among other things, for the addition of AgFeed USA's subsidiary Midwest Finishing, LLC, as a borrower and obligor under the Credit Agreement, with its assets secured by the lien under the Credit Documents. On Jan. 9, 2013, AgFeed USA received an adverse decision in arbitration, requiring it to make a net payment of $7.9 million to Hormel Foods Corporation. AgFeed USA sells hogs to Hormel under long-term supply agreements. Sales of hogs to Hormel under the Supply Agreements account for substantially all of AgFeed USA's revenues and a majority of the Company's revenues. As a result of the arbitration decision and resulting liabilities, AgFeed USA and its affiliates were in violation of several financial covenants in the Credit Agreement. Under the Credit Agreement, the Borrowers had 30 days in which to cure those violations, at which time Farm Credit could have notified the Borrowers that the violations constitute an Event of Default under the Credit Agreement, and declare that the loans and other amounts owed under the Credit Agreement immediately due and payable. However, the Credit Agreement was scheduled to mature and become due and payable on Feb. 1, 2013, so the violations did not result in an acceleration of the loans and other amounts. The Company did not repay the amounts due under the Credit Agreement on Feb. 1, 2013. The Company is working closely with Farm Credit in reviewing its financing options and has entered into discussions with Hormel as regarding possible amendments to the Supply Agreements. A copy of the Forbearance Agreement is available at: http://is.gd/IzW7ak About Agfeed Industries NASDAQ Global Market Listed AgFeed Industries is an international agribusiness with operations in the U.S. and China. AgFeed has two business lines: animal nutrition in premix, concentrates and complete feeds and hog production. In the U.S., AgFeed's hog production unit, M2P2, is a market leader in setting new standards for production efficiency and productivity. AgFeed believes the transfer of these processes, procedures and techniques will allow its new Western-style Chinese hog production units to set new standards for production in China. China is the world's largest pork market consuming 50% of global production and over 62% of total protein consumed in China is pork. Hog production in China currently enjoys income tax free status. AHL THIRD: Case Summary & 8 Largest Unsecured Creditors ------------------------------------------------------- Debtor: AHL Third LLC fdba Aegis Holding Lipstick LLC 885 Third Avenue New York, NY 10022 Bankruptcy Case No.: 13-10355 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Judge: Stuart M. Bernstein Debtor's Counsel: Rachel S. Blumenfeld, Esq. LAW OFFICES OF RACHEL S. BLUMENFELD 26 Court Street, Suite 2400 Brooklyn, NY 11242 Tel: (718) 858-9600 Fax: (718) 858-9601 E-mail: rblmnf@aol.com Scheduled Assets: $0 Scheduled Liabilities: $1,075,462 A copy of the Company's list of its eight largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nysb13-10355.pdf The petition was signed by Terrence P. Goggin, chairman of the managing member. AJW OFFSHORE: Funds Receive U.S. Protection in Central Islip ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AJW Offshore Ltd. and three affiliated funds persuaded the bankruptcy judge in Central Islip, New York, to sign an order recognizing the bankruptcy in the Cayman Islands as the so-called foreign main proceeding. Incorporated in the Cayman Islands, the funds appealed mostly to foreign investors. They were placed into liquidation in April and December by the Grand Court of the Cayman Islands. The liquidators intend to utilize Chapter 15 to secure books and records in the U.S. now in possession of third parties. They also intend to pursue discovery that might lead to lawsuits. The liquidators said the funds were part of a "scheme to keep up the appearance that the investments made by the AJW Funds were successful when, in fact, they were not." The liquidators said the funds typically invested in the stock of startup companies or distressed businesses that "could not obtain financing from more traditional sources." About AJW Offshore Liquidators of AJW Offshore, Ltd., and three affiliates filed Chapter 15 petitions (Bankr. E.D.N.Y. Case No. 8-70078) on Jan. 7, 2013 in Central Islip, New York, in the United States to seek recognition of the liquidation supervised by the Cayman Islands Grand Court. Before succumbing to liquidation, the Offshore Funds were engaged in private investments in public equities (PIPE). They traded at the distressed end of the market, predominantly providing funding to businesses that could not obtain financing from traditional sources. ALLIED SYSTEMS: $57M Suit Says Yucaipa Schemed to Grab Control -------------------------------------------------------------- Brian Mahoney of BankruptcyLaw360 reported that unsecured creditors of Allied Systems Holdings Inc. launched a $57 million adversary complaint Friday seeking to subordinate the claims of Allied's private equity owner Yucaipa Cos. Ltd., the latest salvo in a dispute over Yucaipa's alleged scheme to wrest control of the company from creditors. Allied's official committee of unsecured creditors is accusing Yucaipa of taking control of the company's outstanding secured debt before its bankruptcy as part of a scheme to reduce the power of other company stakeholders, the report related. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. AMERICAN AIRLINES: Finalizing Fine Points of USAir Merger Deal -------------------------------------------------------------- The Wall Street Journal's Mike Spector and Susan Carey report that people close to the discussions said American Airlines parent AMR Corp. and US Airways Group Inc. are hashing out the last major details of a merger agreement that would create the world's largest airline and are racing to finalize a deal. If the deal is reached, the new company could have a market capitalization of more than $10 billion and would vault ahead of United Continental Holdings Inc. as the biggest U.S. airline by traffic. The all- stock deal would be executed as a reorganization plan that takes American out of Chapter 11 bankruptcy protection. The Journal's sources cautioned the merger negotiations remained fluid and could fall apart. Significant points of the deal, including how to split ownership of the airline and how to arrange board seats and management ranks, remain unresolved. The boards of both airlines haven't yet convened to consider the deal, although American representatives on Wednesday discussed whether to schedule such a meeting, said a person close to the matter. It could take another couple of weeks for an agreement to be completed, the people said. The sources told WSJ that the discussions are now at an advanced stage, with AMR Chief Executive Tom Horton, US Airways CEO Doug Parker, and a small circle of advisers negotiating the merger's finer points. Under the deal's current contours, American creditors would own roughly 72% of the airline and US Airways shareholders about 28%, people close to the discussions said. The sources said Mr. Parker is in line to run the combined airline as CEO. Mr. Horton, meanwhile, could become nonexecutive board chairman for a limited time, though his exact role remained in flux and there were some discussions about him becoming executive chairman -- a more powerful position. American's board is interested in Mr. Horton having some kind of role to ensure the merger's potential financial benefits are realized, one of the people said. Influential creditors controlling American's fate largely support a merger, making a deal highly likely unless disagreements unexpectedly mushroom, the people said, according to the report. The airlines and American's creditors are racing to finish a deal before Feb. 15, when a nondisclosure agreement American's bondholders have signed expires. WSJ also reports several people close to the matter said it could be difficult to meet that deadline, so the confidentiality agreements might need to be extended. Other outstanding issues that could delay a deal include the exact makeup of the new airline's board and how creditors with claims against American's parent and operating subsidiary would be treated in bankruptcy court, they said. The American-US Airways combination "will result in four healthy airlines with the right level of capacity," said John Thomas, head of the global aviation practice at L.E.K. Consulting, according to WSJ. "Four big players is a very successful environment," he said, adding that it also leaves room for smaller airlines such as Alaska Air Group Inc. and JetBlue Airways Corp. to succeed. The Journal says the new American would be 2.3% larger than United by capacity, and 2.2% larger by traffic, based on 2012 data. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN RENAL: S&P Affirms 'B' CCR, Rates New $450MM Loan 'B-' --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Beverly, Mass.-based American Renal Holdings Inc. (ARH). "At the same time, we assigned ARH's proposed $50 million first- lien revolving credit agreement and $400 million first-lien term loan B our 'B' credit rating (the same as the corporate credit rating) with a recovery rating of '3', indicating our expectation for meaningful (50% to 70%) recovery of principal in the event of a payment default," S&P said. S&P also assigned ARH's proposed $240 million second-lien term loan S&P's 'CCC+' credit rating (two notches below the corporate credit rating) with a recovery rating of '6', indicating S&P's expectation for negligible (0 to 10%) recovery of principal in the event of a payment default. The rating on American Renal Holdings Inc. (ARH), a kidney dialysis service provider, reflects its "vulnerable" business risk profile, distinguished by its dependence on the treatment of a single disease and pressure from third-party payors to reduce payments. ARH's "highly leveraged" financial risk profile reflects pro forma debt to 2012 EBITDA (adjusted to capitalize operating leases and deduct noncontrolling interests) of 8.6x (7.7x annualizing adjusted EBITDA for the fourth quarter of 2012), compared with actual adjusted leverage of 5.7x as of Dec. 31, 2012 (including Associates' PIK toggle notes), in addition to its substantial cash distributions to noncontrolling interests (NCIs). S&P expects ARH to expand EBITDA generation and to continue generating cash flow after distributions to NCIs, allowing meaningful deleveraging over the next two years. "Our stable rating outlook on American Renal reflects our expectation that continued EBITDA growth will enable meaningful deleveraging over the next two years, despite potential adverse changes in Medicare reimbursement in 2014. Although not likely in 2013, because third-party reimbursement rates have been set, we could lower our rating if the EBITDA margin contracts even more than expected or new clinics underperform historical levels, prompting a depletion of liquidity," said Standard & Poor's credit analyst Gail Hessol. Over time, margin pressures could result from a further unfavorable shift in payor mix, reduced reimbursement from commercial payors, difficulties managing costs, or an inability to cope with Medicare changes. S&P could raise its ratings if ARH steadily deleverages through EBITDA growth to achieve sustained adjusted leverage at or below 4x. Based on pro form debt, this would correspond to adjusted EBITDA of $181 million, compared with 2012 adjusted EBITDA of about $85 million. Given the presence of a financial sponsor and in light of the 2011 and 2013 dividends, S&P believes a reduction in leverage would likely be an opportunity to releverage the company to benefit shareholders. API TECHNOLOGIES: Senator Investment Discloses 10.7% Equity Stake ----------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Senator Investment Group LP disclosed that, as of Feb. 1, 2013, it beneficially owns 5,929,232 shares of common stock of API Technologies Corp. representing 10.7% of the shares outstanding. A copy of the filing is available at: http://is.gd/zNQlPv About API Technologies Corp. API Technologies designs, develops and manufactures electronic systems, subsystems, RF and secure solutions for technically demanding defense, aerospace and commercial applications. API Technologies' customers include many leading Fortune 500 companies. API Technologies trades on the NASDAQ under the symbol ATNY. For further information, please visit the Company Web site at www.apitech.com. The Company's balance sheet at Aug. 31, 2012, showed US$399.68 million in total assets, US$223.66 million in total liabilities, US$25.92 million in preferred stock, net of discounts, and US$150.09 million in shareholders' equity. * * * As reported by the TCR on Nov. 16, 2012, Moody's Investors Service has lowered the ratings of API Technologies Corp., including the Corporate Family and Probability of Default Ratings to Caa1 from B3. The Caa1 Corporate Family Rating considers both weakness and lack of progress within the company's credit metrics over the past year and likelihood that U.S. defense outlays will soften in coming years as U.S. troops withdraw from Afghanistan by 2014. In the Aug. 7, 2012, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on API Technologies Corp. to 'B' from 'B+'. "API's earnings and cash generation have improved less than we expected following two large debt-financed acquisitions in 2011, and the company's credit metrics are weaker than we anticipated," said Standard & Poor's credit analyst Chris Mooney. ARCHDIOCESE OF MILWAUKEE: 2 Clergy Abuse Claims Will Go to Trial ---------------------------------------------------------------- Wisconsin Bankruptcy Judge Susan V. Kelley denied the Archdiocese of Milwaukee's motion for summary judgment with regard to its objection to Proof of Claim number 106 filed by a claimant who alleged Father William Effinger sexually abused him in 1980 or 1981 when the Claimant was 11 years old in the seventh grade. Effinger was a family friend, and the abuse occurred in the Claimant's bedroom. The claimant's identity has been kept under wraps; he is identified in court papers as A-36. The Debtor moved for summary judgment, arguing that the Claim should be disallowed as time-barred under Wisconsin's six-year statute of limitations for fraud. The Claimant disputes that the statute of limitations bars the Claim. "It is possible that discovery will reveal that the Claimant indeed had more information brought home to him than appears in the record. If that is the case, the Court will revisit this issue. But in the battle of affidavits between an attorney who attached reams of publicity about the priest sex abuse scandal and an abuse victim who says he saw none of it, the Court sides with the Claimant as having raised a disputed fact about whether he should have discovered the Debtor's alleged fraud," Judge Kelley said. A copy of the Court's Feb. 1, 2013 Memorandum Decision is available at http://is.gd/fUNKEvfrom Leagle.com. In a separate decision, Judge Kelley denied the Archdiocese's motion for summary judgment with regard to its objection to Proof of Claim number 456 filed by a claimant who alleged that Father Franklyn Becker sexually abused him in 1971 or 1972 when the Claimant was 13 or 14 years old. Becker abused the Claimant while Becker was a parish priest at St. John de Nepomuc Church in Milwaukee. The Claimant was identified in court papers as A-341. The Debtor also argued that the Claim should be disallowed as time-barred under Wisconsin's statute of limitations. A copy of the Court's Feb. 1, 2013 Memorandum Decision is available at http://is.gd/xGUxQFfrom Leagle.com. Statute of Limitations Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the rulings mean that the bankruptcy judge isn't allowing the Archdiocese of Milwaukee to knock out all claims for sexual abuse even though they may have occurred as long ago as the early 1970s. According to the report, in two opinions late last week, U.S. Bankruptcy Judge Kelley is throwing out claims filed by sexual abuse victims to the extent they are based on theories of negligence. She ruled that the statute of limitations, the law governing how quickly a lawsuit must commence, is three years for negligence. The result is different on abuse claims based on fraud, according to Judge Kelley. Under Wisconsin law, she relied on other rulings which say that the time period for filing a fraud claim doesn't begin to run until six years after knowing facts disclosing fraud. In the two cases she ruled on last week, Judge Kelley said the victims so far haven't been shown to be aware of publicity saying the Milwaukee archdiocese was covering up allegations of sexual abuse. Although Judge Kelley is allowing the fraud claims to survive for now, she said that further investigation may show the victims became aware of facts which should have tipped them off about the fraud and the obligation to file a claim sooner. Judge Kelley said that the law is different in cases involving commercial fraud. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ARTE SENIOR LIVING: T. Teeple Named Patient Care Ombudsman ---------------------------------------------------------- The U.S. Trustee for Region 14 selected a new patient care ombudsman for Arte Senior Living, LLC. The U.S. Trustee asked the Bankruptcy Court to approve the appointment of: Teresa Teeple Arizona State Long Term Care Ombudsman Division of Aging and Adult Services 1789 W. Jefferson Ave. 3rd floor, Site Code 950A Phoenix, AZ 85007 Tel: (602) 542-6454 Fax: (602) 542-6655 E-mail: TTeeple@azdes.gov The U.S. Trustee previously selected Syble Oliver as patient care ombudsman. However, during the pendency of the case, Ms. Teeple assumed Ms. Oliver's elder rights specialist role as the Long Term Care Ombudsman for the State of Arizona, which is a division of the Arizona Department of Economic Security/Division of Aging and Adult Services. As reported in the TCR on Aug. 22, 2012, the Bankruptcy Code provides that the Patient Care Ombudsman is tasked to: 1) monitor the quality of patient care provided to patients of the Debtor, to the extent necessary under the circumstances, including interviewing patients and physicians; and 2) report to the Court regarding the quality of patient care provided to patients of the Debtor every 60 days. About Arte Senior Living Arte Senior Living L.L.C. owns and operates an independent and assisted living facility, known generally as the Arte Resort retirement community, located at 11415 North 114th Street, in Scottsdale, Arizona. The Property consists of 128,514 square feet of rentable living space. The Property is managed by Encore Senior Living. Arte Senior Living filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-14993) in Phoenix on July 5, 2012. The Debtor disclosed $52,317,766 in assets and $34,411,296 in liabilities as of the Chapter 11 filing. Judge George B. Nielsen Jr. oversees the case. John J. Hebert, Esq., at Polsinelli Shughart, P.C., serves as counsel to the Debtor. Syble Oliver appointed as patient care ombudsman. SMA Portfolio Owner L.L.C. is represented by lawyers at Greenberg Traurig, LLP. The U.S. Trustee has not appointed an unsecured creditors' committee because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee if interest develop among the creditors. ATI FARMS: Case Summary & 17 Largest Unsecured Creditors -------------------------------------------------------- Debtor: ATI Farms, LLC 2637 White Sulphur Road Gainesville, GA 30501 Bankruptcy Case No.: 13-20350 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Northern District of Georgia (Gainesville) Debtors' Counsel: Leslie M. Pineyro, Esq. JONES AND WALDEN, LLC 21 Eighth Street, NE Atlanta, GA 30309 Tel: (404) 564-9300 Fax: (404) 564-9301 E-mail: lpineyro@joneswalden.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. ------ -------- Avian Technology International, LLC 13-20351 Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Frederick J. Kempker, manager/member. A. A copy of ATI Farms' list of its 17 largest unsecured creditors is available for free at: http://bankrupt.com/misc/ganb13-20350.pdf B. A copy of Avian Technology's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/ganb13-20351.pdf ATP OIL: Heads Toward Showdown Over New Bankruptcy Financing ------------------------------------------------------------ Peg Brickley at Daily Bankruptcy Review reports a bankruptcy judge in Houston refused to consider an emergency financing motion from ATP Oil & Gas Corp. that creditors called "shocking and offensive" and gave the company until Monday to get a better loan deal. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that ATP Oil & Gas Corp., which is already selling its oil and natural gas leases, violated another covenant in the loan financing the Chapter 11 reorganization. According to the report, the company disclosed on Feb. 1 that a new well failed to achieve commercial production by a January deadline, thus cutting off new borrowing availability under the credit financing the Chapter 11 case begun in August. To obtain the ability to borrow an additional $100 million covering cash flow shortfalls, ATP was slated to appear before the Court Feb. 5 to seek approval of amendments to the loan facility. The report notes that prior violation of covenants in the loan agreement required ATP to sell the leases. The U.S. Bankruptcy Court in Houston scheduled an auction for the shallow-water properties on Feb. 26. The bankruptcy court will hold a hearing on Feb. 14 to approve auction procedures for ATP's deep-water properties. ATP, the report recounts, received approval in September for $250 million in new borrowing power as part of a financing that converts about $365 million in pre-bankruptcy secured debt into a post-bankruptcy obligation. New financing is from some of the same lenders owed $365 million on a first-lien loan where Credit Suisse Group AG serves as agent. Bank of New York Mellon Trust Co. is agent for the second-lien notes. The new loan comes in ahead of the existing second-lien debt. ATP's $1.5 billion in 11.875% second-lien notes last traded on Feb. 1 for 5 cents on the dollar, a 31% decline in price since Jan. 17, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. AURASOUND INC: Aims to Sell Assets to GGEC America for $4.8MM ------------------------------------------------------------- Marie Beaudette at Dow Jones' DBR Small Cap reports that California stereo-equipment maker AuraSound Inc. is seeking to sell some of its assets to GGEC America Inc., a subsidiary of the company's biggest creditor and main primary supplier, in a deal valued at nearly $4.8 million. About AuraSound Inc. Santa Ana, Calif-based AuraSound, Inc. (OTC BB: ARUZE) -- http://www.aurasound.com/-- develops, manufactures, and markets audio products. AuraSound's products include TV soundbars, high- drivers for TVs and laptops, subwoofers, and tactile transducers. AuraSound, Inc., filed a voluntary petition (Bank. C.D. Cal. Case No. 12-24400) on Dec. 12, 2012. The Company will continue to operate its business as a "debtor in possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The petition was signed by the Debtor's Acting Chief Financial Officer, Anthony J. Fidaleo. The Hon. Mark S. Wallace presides over the case. The Debtor is represented by Winthrop Couchot PC. The Debtor has scheduled assets of $2.2 million and scheduled liabilities of $42.8 million. B+H OCEAN: Court Confirms Reorganization Plan --------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that B&H Ocean Carriers Ltd. secured the signature of the bankruptcy judge on a Feb. 1 confirmation order approving the reorganization plan. B&H filed under Chapter 11 in May. According to the report, all affected creditor classes voted in favor of the plan. B&H and nine bankrupt affiliates own four vessels capable of carrying petroleum products or dry bulk. Initially the Bermuda-based company said it had $46.1 million in debt, including $32.4 million owed to secured lenders. The report recounts that B&H sold one vessel and filed the plan to sell the remainder while distributing proceeds first to secured creditors, taking settlements into consideration. About $2.4 million is scheduled for distribution to unsecured creditors. Depending on the particular company liable on the debt, the recovery on an unsecured claim is estimated to range from a low of less than 5% to full payment. About B+H Ocean Carriers B+H Ocean Carriers Ltd. is an international ship-owning and operating company that owns, through subsidiaries, a fleet of four product-suitable Panamax combination carriers capable of transporting both wet and dry bulk cargoes, along with a 50% interest in an additional combination carrier. B+H Ocean Carriers and its subsidiaries filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 12-12356) on May 30, 2012. The Debtors disclosed assets of US$4.52 million and liabilities of $46.09 million as of the Chapter 11 filing. John H. Hall, Jr., Esq., at Pryor & Mandelup, L.L.P., in New York, originally represented the Debtors as bankruptcy counsel. They were later replaced by Nicholas F. Kajon, Esq., John D. Demmy, Esq., and Constantine D. Pourakis, Esq., at Stevens & Lee, P.C. Counsel for the Creditors' Committee is Benjamin Blaustein, Esq., at Kelley Drye & Warren, LLP. Counsel for Macquarie Bank and Macquarie US is David Neier, Esq., at Winston & Strawn, LLP. The Bank of Nova Scotia Asia Limited is represented by Neil Quartaro, Esq., at Watson, Farley & Williams (New York), LLP. BEHRINGER HARVARD: BHSTO Fund Has Two Remaining Assets ------------------------------------------------------ Behringer Harvard Short-Term Opportunity Fund I LP, on Feb. 4, 2013, made available to its unit holders its 2012 Third Quarter Report Summary. The Fund disclosed it continues in the disposition phase with only two remaining assets -- the Hotel Palomar-Dallas and five acres of land at 1221 Coit Road. The Fund plans to wind up operations over approximately the next two to three years with the land being sold first, notwithstanding the final resolution of the back-end promoted interests on the eventual sale (by the new owners) of Landmark I & II and 5050 Quorum, which the Fund sold in 2011. As of Dec. 14, 2012, the Fund's estimated per-unit value is $1.93, a nearly fivefold increase compared with $0.40 established on Dec. 29, 2011. This improvement primarily reflects the resolution of deficiencies on defaulted loans, at no cost to the Fund, related to two properties that were subsequently disposed during 2012. These loan deficiencies had a negative impact on the 2011 valuation of approximately $15.6 million. Among other things, the improvement also reflects an increase in the valuation of the Hotel Palomar-Dallas. A copy of the 2012 Third Quarter Report Summary is available at: http://is.gd/kwEW8j About Behringer Harvard Addison, Tex.-based Behringer Harvard is a limited partnership formed in Texas on July 30, 2002. The Company's general partners are Behringer Harvard Advisors II LP and Robert M. Behringer. As of Sept. 30, 2011, seven of the twelve properties the Company acquired remain in the Company's portfolio. The Company's Agreement of Limited Partnership, as amended, provides that the Company will continue in existence until the earlier of Dec. 31, 2017, or termination of the Partnership pursuant to the dissolution and termination provisions of the Partnership Agreement. For the year ended Dec. 31 2011, Deloitte & Touche LLP, in Dallas, Texas, noted that the uncertainty surrounding the ultimate outcome of settling unpaid debt and its effect on the Partnership, as well as the Partnership's operating losses at its subsidiaries, raise substantial doubt about its ability to continue as a going concern. The Partnership is facing a significant amount of debt maturities in the near future and debt which has matured but remains unpaid, which is recourse to the Partnership. Behringer reported a net loss of $50.15 million in 2011, a net loss of $18.71 million in 2010, and a net loss of $15.47 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $49.06 million in total assets, $52.94 million in total liabilities and a $3.88 million total deficit. BERRY PLASTICS: Files Form 10-Q, Incurs $10-Mil. Loss in Q1 2013 ---------------------------------------------------------------- Berry Plastics Group, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $10 million on $1.07 billion of net sales for the quarterly period ended Dec. 29, 2012, as compared with a net loss of $31 million on $1.13 billion of net sales for the quarterly period ended Dec. 31, 2011. The Company's balance sheet at Dec. 29, 2012, showed $5.05 billion in total assets, $5.36 billion in total liabilities and a $313 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/AnaABc About Berry Plastics Berry Plastics Corporation manufactures and markets plastic packaging products, plastic film products, specialty adhesives and coated products. At Jan. 2, 2010, the Company had more than 80 production and manufacturing facilities, primarily located in the United States. Berry is a wholly-owned subsidiary of Berry Plastics Group, Inc. Berry Group is primarily owned by affiliates of Apollo Management, L.P., and Graham Partners. Berry, through its wholly owned subsidiaries operates five reporting segments: Rigid Open Top, Rigid Closed Top, Flexible Films, Tapes/Coatings and Specialty Films. The Company's customers are located principally throughout the United States, without significant concentration in any one region or with any one customer. On Dec. 3, 2009, Berry Plastics obtained control of 100% of the capital stock of Pliant upon Pliant's emergence from reorganization pursuant to a proceeding under Chapter 11 for a purchase price of $602.7 million. Pliant is a leading manufacturer of value-added films and flexible packaging for food, personal care, medical, agricultural and industrial applications. The acquired business is primarily operated in Berry's Specialty Films reporting segment. * * * As reported by the TCR on Feb. 1, 2013, Moody's Investors Service upgraded the corporate family rating of Berry Plastics to B2 from B3 and the probability of default rating to B2-PD from B3-PD. The upgrade of the corporate family rating to B2 from B3 reflects the improvement in pro-forma credit metrics and management's publicly stated goal to pursue a less aggressive, more balanced financial profile. In November 2011, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on Berry and its holding company parent, Berry Plastics Group Inc. "The ratings on Berry reflect the risks associated with the company's highly leveraged financial profile and acquisition- driven growth strategy as well as its fair business risk profile," said Standard & Poor's credit analyst Cynthia Werneth. In November 2011, Standard & Poor's Ratings Services affirmed the 'B-' corporate credit rating on Berry and its holding company parent, Berry Plastics Group Inc. "The ratings on Berry reflect the risks associated with the company's highly leveraged financial profile and acquisition- driven growth strategy as well as its fair business risk profile," said Standard & Poor's credit analyst Cynthia Werneth. BIOLIFE SOLUTIONS: Cardiac Dimensions CEO Joins BioLife Board ------------------------------------------------------------- BioLife Solutions, Inc., announced that Rick Stewart, Chief Executive Officer of Kirkland, Washington-based Cardiac Dimensions, has joined its board of directors and has been appointed to its Audit Commitee. Stewart replaces Howard Breslow, who submitted his resignation from the board. Mr. Stewart has served as President and Chief Executive Officer, and a member of the Board of Directors of Cardiac Dimensions since 2001. From 1998 to 2001 he was President and Chief Executive Officer of Tegris Corporation, a leading IT infrastructure and enterprise applications provider for vertical markets. Prior to that Mr. Stewart had a long career within Eli Lilly and Company's Medical Device and Diagnostics Unit, holding multiple executive positions in general and technical management, sales, marketing and business development. Mr. Stewart was a member of the senior team that led a buyout of the Physio-Control subsidiary from Eli- Lilly in 1994 which shortly thereafter was taken public. He received an MBA from the University of Washington. Mike Rice, BioLife Solutions Chairman and Chief Executive Officer, said, "I am very pleased that Rick has agreed to join our board at this very important time for BioLife. We are generating record revenues and on a significant growth path, and Rick's extensive life sciences and operations background will make his counsel and participation invaluable as we seek to generate more shareholder value. I know I speak for our entire board in looking forward to the contributions Rick will make as we continue to execute our growth plan." Rice continued, "Our board would also like to recognize the outstanding contributions Howard has made to support the Company's growth, as a board member and also as corporate counsel for BioLife." About BioLife Solutions Bothell, Washington-based BioLife Solutions, Inc., develops and markets patented hypothermic storage and cryo-preservation solutions for cells, tissues, and organs, and provides contracted research and development and consulting services related to optimization of biopreservation processes and protocols. The Company reported a net loss of $1.95 million in 2011, compared with a net loss of $1.98 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.41 million in total assets, $15.45 million in total liabilities and a $12.03 million total shareholders' deficiency. Following the 2011 results, Peterson Sullivan LLP, in Seattle, Washington, expressed substantial doubt about BioLife Solutions' ability to continue as a going concern. The independent auditors noted that the Company has been unable to generate sufficient income from operations in order to meet its operating needs and has an accumulated deficit of $54 million at Dec. 31, 2011. BISSETT PRODUCE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Bissett Produce, Inc. P.O. Box 279 Spring Hope, NC 27882 Bankruptcy Case No.: 13-00713 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: Stephani W. Humrickhouse Debtor's Counsel: Jason L. Hendren, Esq. HENDREN & MALONE, PLLC 4600 Marriott Drive, Suite 150 Raleigh, NC 27612 Tel: (919) 573-1422 Fax: (919) 420-0475 E-mail: jhendren@hendrenmalone.com - and ? Rebecca F. Redwine, Esq. HENDREN & MALONE, PLLC 4600 Marriott Drive, Suite 150 Raleigh, NC 27612 Tel: (919) 420-0941 Fax: (919) 420-0475 E-mail: rredwine@hendrenmalone.com Scheduled Assets: $4,426,994 Scheduled Liabilities: $5,486,038 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/nceb13-00713.pdf The petition was signed by Ted Lee Bissett, II, vice president. BRIER CREEK: Court Rules on Valuation of Select Properties ---------------------------------------------------------- The Hon. Stephani W. Humrickhouse of the U.S. Bankruptcy Court for the Eastern District of North Carolina determined the valuations of Brier Creek Corporate Center Associates Limited Partnership, et al.'s properties. The Court, in its order, stated that valuation of the property is a key component of the Debtors' efforts to draft their chapter 11 plan. Accordingly, the order set out in summary and preliminary fashion the property valuations as: 1. Brier Creek Corporate Center $11,420,000 2. Shopton 30-C $5,300,000 3. Brier Creek Corporate Center IV $23,076,000 4. Brier Creek Corporate Center VI $22,960,000 However, as to these properties, the Court was unable to set the value without the generation of a new discounted cash flow analysis, prepared with the noted inputs: 1. Service Retail at Whitehall II: Using the discounted cash flow analysis generated in the Bidencope & Associates July 1, 2012, Limited Appraisal, make the following input modifications: A) change discount rate to 9.0% B) change terminal capitalization rate to 8.5% 2. Whitehall Corporate Center IV: Using the discounted cash flow analysis generated in the Bidencope & Associates July 1, 2012, Limited Appraisal, make the following input modifications: A) change discount rate to 8.75% B) change terminal capitalization rate to 8.25% 3. Whitehall Corporate Center V: Using the discounted cash flow analysis generated in the Bidencope & Associates July 1, 2012, Limited Appraisal, make the following input modifications: A) change discount rate to 8.75% B) change terminal capitalization rate to 8.25% 4. Whitehall Corporate Center VI: Using the discounted cash flow analysis generated in the Bidencope & Associates July 1, 2012, Limited Appraisal, make the following input modifications: A) change discount rate to 8.75% B) change terminal capitalization rate to 8.25% 5. Service Retail at Brier Creek: Using the discounted cash flow analysis generated in the Integra Realty Resources March 29, 2012, Appraisal of Real Property, make the following input modifications: A) substitute tenant improvement expense numbers found in theBidencope & Associates July 2, 2012 Limited Appraisal B) change discount rate to 9.0% In this relation, the Court directed the parties to submit a valuation for the each of the second set of properties, using a discounted cash flow analysis comprised of the factors determined by the Court. If the parties cannot agree on that value, separate valuations with supporting discounted cash flow analysis exhibits may be submitted. An additional summary order will be entered as to these properties upon receipt of the new discounted cash flow analyses. The Court said that the order is intended to constitute a preliminary ruling which will ultimately be incorporated into a final order regarding confirmation. About Brier Creek Corporate Brier Creek Corporate Center Associates Limited and eight other related entities affiliates filed for Chapter 11 protection (Bankr. E.D.N.C. Lead Case No. 12-01855) on March 9, 2012. The Debtors own real property located in Wake County, North Carolina and Mecklenburg County, North Carolina. In most instances, the real property owned by the Debtors consists of land upon which is constructed commercial or industrial buildings consisting of office, service or retail space. The other debtors are Brier Creek Office #4, LLC; Brier Creek Office #6, LLC; Service Retail at Brier Creek, LLC; Service Retail at Whitehall II Limited Partnership; Shopton Ridge 30-C, LLC; Whitehall Corporate Center #4, LLC; Whitehall Corporate Center #5, LLC; and Whitehall Corporate Center #6, LLC. Brier Creek is a 106-acre development that is to have 2.8 million square feet of commercial space. Whitehall has 146 acres and will have 4 million square feet on completion. Brier Creek Corporate scheduled assets of $19,713,147 and liabilities of $18,086,183. Judge Stephani W. Humrickhouse oversees the case. Northen Blue, LLP, serves as counsel to the Debtors. C. Richard Rayburn, Jr. and the firm Rayburn Cooper & Durham, P.A., serve as special counsel. Grant Thornton LLP is the accountant. Bidencope & Associates was hired as appraiser. The petitions were signed by Terry Bradshaw, vice president. Brier Creek's other affiliated entities are Cary Creek Limited Partnership; Shopton Ridge Business Park Limited Partnership; AAC Retail Property Development and Acquisition Fund, LLC; American Asset Corporation Companies Limited; and American Asset Corporation. Cary Creek Limited Partnership filed a voluntary petition on Jan. 3, 2013. By order entered Jan. 10, 2013, the bankruptcy case of Cary Creek Limited Partnership was consolidated with the other debtors's cases and all of the cases are now being jointly administered for procedural purposes only. BRIXMOR LLC: Moody's Lifts Sr. Debt Rating to B3; Outlook Stable ---------------------------------------------------------------- Moody's Investors Service upgraded the senior unsecured debt ratings of Brixmor LLC to B3, from Caa1, with a stable outlook reflecting its improved credit metrics and operating performance since its acquisition by Brixmor Property Group, Inc., an affiliate of Blackstone Real Estate Partners VI, L.P. The stable rating outlook reflects Moody's expectation that Brixmor LLC will continue to improve its operational strength, while managing its debt maturities with adequate liquidity and stable credit metrics. The following ratings were upgraded to B3 with a stable outlook: Brixmor LLC (formerly Centro NP LLC and New Plan Realty Trust) -- Senior unsecured debt at B3; medium-term notes at B3. Ratings Rationale: The rating upgrade reflects the improvement in Brixmor LLC's credit metrics and portfolio performance. Fixed charge coverage increased to 1.8x at 3Q12 from 1.7x at YE11. Brixmor LLC also has positive cash flow from operations and manageable near-term debt maturities, with approximately $179 million due in 2013 and $133 million due in 2014. Brixmor LLC's consolidated portfolio was 84.5% leased at 3Q12 compared to 83% at 3Q11; and its total portfolio occupancy increased to 88.9% at 3Q12 from 87.9% at 3Q11- - a 100 bp improvement. The company has also produced strong leasing volumes in deal count and GLA. Brixmor LLC (formerly Centro NP LLC and New Plan Excel Realty Trust, Inc.) is one of the largest owners and operators of community and neighborhood shopping centers in the USA. On June 28, 2011, Brixmor Property Group, Inc. (formerly BRE Retail Holdings, Inc., an affiliate of Blackstone Real Estate Partners VI, L.P.) acquired all of Centro Properties Group's US assets and platform, including Centro NP LLC, which is now called Brixmor LLC. As of September 30, 2012, Brixmor LLC had gross assets of $3.2 billion with interests in 574 properties in 39 states including 163 wholly-owned properties, one property held through a consolidated joint venture, and 410 properties held primarily through affiliated, unconsolidated joint ventures. There is a large exposure to minority share joint ventures with $775 million in unconsolidated investments, a key credit challenge; however, the majority of these are investments in affiliated joint ventures with common owners. Moody's views the acquisition of Brixmor LLC by Brixmor Property Group as a credit positive. Although Brixmor Property Group is financially more stable than Brixmor LLC's former parent, Centro Property Group, the B3 ratings reflect its dependence upon Brixmor Property Group's highly levered US platform as Brixmor LLC has no credit line. Brixmor LLC is expected to internally finance itself through cash flow from operations and mortgage refinancings. While overall leverage within Brixmor LLC appears moderate at 44%, net debt/EBITDA is high at 8.5x as of 3Q12. Secured debt/gross assets has increased to 32% at 3Q12 compared to 30% at YE11 as maturing unsecured notes are replaced with secured debt. Brixmor Property Group operates all the US retail shopping center properties from its New York City headquarters and leverages its nationwide operating infrastructure and staff that provides management services to Brixmor LLC. The combined US portfolio is the largest landlord to many of the top ten national retailers in its portfolio, which includes more than 4,000 tenants, and is exhibiting consistently stronger operating performance with Brixmor LLC producing 6.2% same property NOI growth for 3Q12, which is the third quarter of positive growth. While geographically diverse, Brixmor LLC shows some market concentration deriving 22.2% of its consolidated annualized base rent from properties located in Texas, 14% in Florida, 7.9% in New York, 7.3% in Ohio, and 6.6% in California at 3Q12. Moody's stated that further rating improvement would be contingent upon continued strengthening of its credit profile (all credit metrics without consolidation of joint ventures): maintenance of closer to 2.0x fixed charge coverage (inclusive of capitalized interest); net debt/EBITDA approaching 7.5x; and improved operating performance as reflected in higher occupancy and adequate liquidity. Negative rating pressure would result from any deterioration in Brixmor LLC's credit profile (all credit metrics without consolidation of joint ventures) such that its fixed charge coverage (inclusive of capitalized interest) declined to below 1.8x; net debt/EBITDA increased above 9x; and suspension of improvements in operating performance most likely resulting from leasing issues. The last rating action with respect to Centro NP was on October 11, 2011 when its ratings were upgraded to Caa1, from Caa2, with a stable outlook. The principal methodology used in this rating was the Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. Brixmor LLC, headquartered in New York City, owns and operates community and neighborhood shopping centers. The company had assets of $3.2 billion and equity of $1.5 billion at September 30, 2012. BRODKEY BROTHERS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Brodkey Brothers, Inc. dba Brodkey's Jewelers 12165 West Center Road, Suite #73 Omaha, NE 68144 Bankruptcy Case No.: 13-80203 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court District of Nebraska (Omaha Office) Debtor's Counsel: Robert V. Ginn, Esq. HUSCH BLACKWELL SANDERS, LLP 1620 Dodge Street, Suite 2100 Omaha, NE 68102 Tel: (402) 964-5000 Fax: (402) 964-5050 E-mail: Robert.Ginn@huschblackwell.com 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 Oliver Keene, chief executive officer. Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Artcraft Midwest Co. 13-80204 Brodkeys Inc. 13-80205 Brodkeys-Iowa, Inc. 13-80206 Brodkeys-Grand Island, Inc. 13-80207 Brodkeys-Lincoln, Inc. 13-80208 Brodkeys-Norfolk, Inc. 13-80209 Brodkeys-Oak View, Inc. 13-80210 Brodkeys - Southroads, Inc. 13-80211 Brodkeys Westroads, Inc. 13-80212 CAESARS ENTERTAINMENT: Plans to Offer $1.5 Billion of Sr. Notes --------------------------------------------------------------- Caesars Entertainment Corporation said that Caesars Operating Escrow LLC and Caesars Escrow Corporation, wholly owned unrestricted subsidiaries of Caesars Entertainment Operating Company, Inc., are proposing to issue $1,500,000,000 aggregate principal amount of 9% 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 are to be issued under the same indenture governing the 9% senior secured notes due 2020 that were issued on Aug. 22, 2012, and the 9% senior secured notes due 2020 that were issued on Dec. 13, 2012, but the Notes and the Existing Notes will not be fungible until the completion of a registered exchange offer pursuant to which holders that exchange their Notes will receive registered 9% senior secured notes due 2020 that will have the same CUSIP number as any Existing Notes registered as part of that exchange offer or one or more prior exchange offers, and those Notes and Existing Notes will thereafter be fungible. The offering is subject to market conditions and other factors. Upon satisfaction of certain conditions, CEOC would assume the Escrow Issuers' obligations under the Notes. Caesars intends to use the net proceeds from the offering to repay certain outstanding term loans and to pay related fees and expenses. 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 pursuant to 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. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company reported a net loss of $666.70 million in 2011, and a net loss of $823.30 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $28.34 billion in total assets, $28.22 billion in total liabilities and $114.7 million in total Caesars stockholders' equity. * * * As reported by the TCR on March 28, 2012, Moody's Investors Service upgraded Caesars Entertainment Corp's Corporate Family Rating (CFR) and Probability of Default Rating both to Caa1 from Caa2. The upgrade of Caesars' ratings reflects very good liquidity, an improving operating outlook for gaming in a number of the company's largest markets that is expected to drive earnings growth, the completion of a bank amendment that resulted in the extension of debt maturities to 2018 from 2015, and the public listing of the company's equity that increases financial flexibility by providing it with another potential source of capital. The upgrade of the SGL rating reflects minimal debt maturities over the next few years, significant cash balances (approximately $900 million at December 31, 2011) and revolver availability that will be more than sufficient to fund the company's cash interest and capital spending needs. In the Aug. 17, 2012, edition of the TCR, Standard & Poor's Ratings Services revised its rating outlook on Las Vegas-based Caesars Entertainment Corp. and wholly owned subsidiary Caesars Entertainment Operating Co. Inc. to negative from stable. "We affirmed all other ratings on the companies, including our 'B-' corporate credit rating," S&P said. As reported by the TCR on Aug. 17, 2012, Fitch Ratings affirmed CEC's long-term issuer default rating at 'CCC'. CARDINAL FASTENER: Court Directs Special Counsel to Turn Over Docs ------------------------------------------------------------------ Ohio Bankruptcy Judge Pat E. Morgenstern-Clarren directed Reminger Co., LPA, as special counsel to then-chapter 11 debtor Cardinal Fastener & Specialty Co., Inc., to turn over documents relating to or belonging to the Debtor. When the case converted to chapter 7, the chapter 7 trustee asked the firm to turn over the documents. The firm declined to do so, responding that at least some of the documents are protected by the attorney-client privilege and the work product doctrine based on the firm's alleged separate representation of the debtor's officers and directors. The trustee then filed a turnover motion, which the firm opposes. According to Judge Morgenstern-Clarren, the firm failed to prove that any documents are protected either by the work-product doctrine or the attorney-client privilege. The Court directed the firm to produce and turn over the requested documents within a week of the Court order. A copy of Judge Morgenstern-Clarren's Feb. 4, 2013 Memorandum of Opinion and Order is available at http://is.gd/FQrwodfrom Leagle.com. About Cardinal Fastener Cardinal Fastener & Specialty Co. is a bolt-maker that became a supplier to the U.S. and European wind turbine industry in 2007. Cardinal Fastener filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 11-15719) on June 30, 2011. Rocco I. Debitetto, Esq., at Hahn Loeser + Parks LLP, in Cleveland, served as counsel to the Debtor. The Debtor estimated assets and debts of $1 million to $10 million as of the Chapter 11 filing. An Official Committee of Unsecured Creditors was appointed in the case. The Committee, on behalf of the unsecured creditors, demanded payment from the Debtor on unsecured claims in an amount estimated at $4,138,841. On July 18, 2012, the court granted the debtor's motion to convert the case to chapter 7. CARPENTER CONTRACTORS: Exited Bankruptcy in November 2012 --------------------------------------------------------- Carpenter Contractors of America, Inc., notified the U.S. Bankruptcy Court for the Southern District of Florida that the effective date of their confirmed Second Amended Plan of Reorganization occurred on Nov. 16, 2012. According to the Disclosure Statement, payments and distributions under the Plan are funded by the Debtors' current and ongoing business operations. In addition, First American Bank has agreed to provide the Debtors with the exit facility in the form of a one-year $5,120,000 monitored asset based line of credit renewable annually for three years, and a $2,500,000 term note, repayable in 36 monthly installments. First American will retain its liens on the collateral to secure its allowed secured claims and will receive payments to satisfy all obligations under the bond letters of credit and related agreements. Fifth Third Bank will be paid its secured claim of $35,000 in full in 24 equal monthly installments, amortized at 8% interest. Other secured creditors are unimpaired under the Plan. General unsecured creditors of Carpenter Contractors will participate pro rata in the distribution of quarterly payments in the amount of $50,000 for year 1 of the Plan, Plan, quarterly payments in the amount of $50,000 for year 2 of the Plan, quarterly payments in the amount of $75,000 for year 3 of the Plan, and quarterly payments in the amount $125,000 for each of years 4, 5 and 6 of the Plan. General Unsecured Creditors of CCA Midwest will also receive installment payments. The holders of unsecured claims against Carpenter and CCA are impaired. Holders of equity interests are unimpaired and will retain their ownership interests in the Debtors. A copy of the Second Amended Disclosure Statement is available at: http://bankrupt.com/misc/Carpenter_Contractors_2nd_Amended_DS.pdf About Carpenter Contractors Pompano Beach, Florida-based Carpenter Contractors of America, Inc., dba R&D Thiel, provides carpentry services to builders of new homes primarily in Illinois and Florida. It also manufactures building components and distributes construction materials in Illinois, Florida, and North Carolina. CCA Midwest Inc. provides carpentry services to builders of new homes in Illinois. It is a wholly-owned subsidiary of Carpenter Contractors. Carpenter Contractors and CCA Midwest filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Lead Case No. 10-42604) on Oct. 25, 2010. Chad P. Pugatch, Esq., and Christian Savio, Esq., at Rice Pugatch Robinson & Schiller, P.A., in Ft. Lauderdale, Fl., serve as the Debtors' bankruptcy counsel. Attorneys at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC, serve as special counsel. GlassRatner Advisory & Capital Group, LLC, led by Thomas Santoro, is the Debtors' financial advisor, and Scott L. Spencer, CPA and Crowe Horwath, LLP. is the Debtors' accountant for audit work. In its amended schedules, carpenter Contractors disclosed $42,900,574 in assets and $26,013,480 in liabilities as of the Chapter 11 filing. The U.S. Trustee for Region 21 notified the Court that until further notice, he will not appoint a committee of creditors. According to the Second Amended Disclosure Statement, payments and distributions under the Plan will be funded by the Debtors' current and ongoing business operations. In addition, First American Bank has agreed to provide the Debtors with the exit facility in the form of a one-year $5,120,000 monitored asset based line of credit renewable annually for three years, and a $2,500,000 term note, repayable in 36 monthly installments. CASH STORE: Moody's Reviews 'B3' CFR for Possible Downgrade ----------------------------------------------------------- Moody's Investors Service placed the ratings of Cash Store Financial Services (CSFS, Corporate Family Rating and senior secured debt at B3) under review for possible downgrade. Ratings Rationale: The review reflects challenges experienced by the company, as evidenced by a material restatement of 2012 financial statements and a recently initiated special investigation by an independent accounting firm retained by the Board regarding allegations of undisclosed related party transactions in connection with the January 2012 loan portfolio acquisition from third-party lenders. During the review period Moody's will seek to determine the scope of the special investigation and the potential magnitude of the outcome. In addition, Moody's will focus on improvements the company has made to its governance and control structure. Moody's satisfaction with these issues would likely lead to a confirmation of the ratings, probably with a negative outlook pending sustained improvement in CSFS' financial performance. Since Moody's initial rating was issued in January 2012 the company's operating performance has been poor, with sharply reduced profitability and weak leverage and debt service coverage metrics. Moody's conclusion that the outcome of the investigation is or is likely to be materially negative would likely lead to a downgrade of the ratings. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. Based in Edmonton, Alberta, Canada, CSFS is a provider of alternative financial services in Canada and the UK. CENTRAL EUROPEAN: Appoints Former Dist. Judge Farnan to Board ------------------------------------------------------------- The Board of Directors of Central European Distribution Corporation has appointed the Honorable Joseph J. Farnan, Jr., as director of CEDC effective as of Feb. 4, 2013. Mr. Farnan will be named to the Board's Compensation Committee and Audit Committee. Mr. Farnan is currently engaged in the private practice of law with Farnan LLP. He served as a United States District Judge for the District of Delaware from 1985 to 2010 and as Chief Judge from 1997 to 2001. In connection with his appointment to the Board of Directors, Mr. Farnan will be eligible to receive equity awards pursuant to CEDC's 2007 Stock Incentive Plan, including an annual equity award of $100,000, and annual fees for service as a director in the amount of $75,000 and as a member of the Audit Committee and Compensation Committee in the amount of $10,000 for service on each committee. CEDC intends to enter into an indemnification agreement with Mr. Farnan. On February 4, Robert Koch notified the Board of his resignation effective immediately. Mr. Koch served as an independent director of CEDC since February 2004 and at the time of his resignation was a member of the Board's Compensation Committee and Nominating and Corporate Governance Committee. 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. CHRYSLER GROUP: Fiat Aims to Close Deal Next Year ------------------------------------------------- Gilles Castonguay (gilles.castonguay@dowjones.com), writing for The Wall Street Journal, reported that Fiat SpA's chief executive said he expected to complete the acquisition of Chrysler Group LLC next year, once the Italian auto maker reached a price agreement for the remaining stake in its U.S. unit. "We will resolve it in 2014," Sergio Marchionne said at a forum Sunday in Fiat's hometown of Turin, where he was being interviewed by an editor of la Repubblica, the newspaper hosting the event, WSJ related. Fiat and a United Auto Workers union retiree trust that owns 41.5% of Chrysler disagree on the value of an option that Fiat exercised last July to buy a 3.3% stake in Chrysler. They have gone to court to resolve the issue. Fiat offered the trust, called the Voluntary Employee Beneficiary Association, $139.7 million to buy the stake, and has since proposed paying $198 million for another 3.3% stake but the trust wants about $343 million for the first stake, WSJ noted. Mr. Marchionne, according to WSJ, earlier set 2015 as the deadline for completing the acquisition. Fiat's gradual takeover of Chrysler is helping to increase the auto maker's economies of scale to better compete globally. WSJ said the Italian company is developing new models with Chrysler for several brands, as well as sharing parts, platforms and plants to become a more efficient manufacturer. Fiat also is taking advantage of Chrysler's dealership network in the U.S. to sell its own cars and reduce its exposure to the dismal European market, where its mass-market brands such as Fiat had operating losses of more than ?700 million, or about $950 billion, last year. Mr. Marchionne is overseeing a plan to revive Fiat's underused manufacturing base in Italy by exporting cars from its premium brands, Maserati and Alfa Romeo, to the U.S., where demand is gaining strength, WSJ further related. His plan also focuses on the utilitarian side of the auto maker's namesake Fiat brand, represented by the Panda hatchback, which is sold in Europe. "We'll probably do another Panda -- a Panda X -- one that would be a little longer," he said, according to WSJ. Mr. Marchionne said Fiat was considering making a car to respond to the growing market for low-cost models, where Renault SA has succeeded with its Dacia brand in Europe but he said such a car wouldn't be made in Italy, WSJ noted. He said the premium end of the U.S. market, coveted by competitors such as BMW AG and Volkswagen AG's Audi, had yet to become saturated. Mr. Marchionne last Wednesday attended the opening of a plant near Turin, where Maserati will make two new models for the U.S., its biggest market, according to WSJ. "If we're intelligent, we will do something very, very different than the Germans in America," he said at the forum. Mr. Marchionne said Fiat's Mirafiori plant in Turin would be the next one dedicated to making premium cars, according to WSJ. He declined to elaborate, but union officials have said that one of the models would be a new sport-utility vehicle for Maserati. He also confirmed plans for Alfa Romeo to return to the U.S. late this year with a two-seater 4C. He said it would be followed by a second model in 2014. "They're arriving, one at a time," he said, before reiterating his refusal to sell the brand to VW, despite the German auto maker's interest, WSJ added. Mr. Marchionne acknowledged the disadvantage of exporting cars to the U.S., saying it added about EUR1,000 a vehicle in costs. Fiat hopes to mitigate that cost by exporting only premium cars, which are more profitable than their mass-market counterparts, according to WSJ. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). The U.S. and Canadian governments provided Chrysler LLC with $4.5 billion to finance its bankruptcy case. In connection with the bankruptcy filing, Chrysler reached an agreement to sell all assets to an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC in June 2009, formally sold substantially all of its assets to the new company, named Chrysler Group LLC. * * * Chrysler has a 'B1' corporate family rating from Moody's. Moody's upgraded the rating from 'B2' to 'B1' in February 2013. Moody's said that the upgrade reflects Moody's expectation that Chrysler will be able to sustain the progress it has made during the past 18 months in strengthening its competitive position in North America. CLINICA REAL: Objection to Claims Dischargeability Extended ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona approved a stipulation extending the deadline for creditor Allstate Insurance Company to object to dischargeability of debt against Clinica Real, LLC, and Keith Michael Stone. Allstate has 21 days after the first date set for hearing on confirmation of Debtors' plans of reorganization. The Court has extended Keith Michael Keith Stone's exclusive period to file a plan from Dec. 21, 2012, to June 21, 2013. Clinica Real has sought a Nov. 1, 2013 plan exclusivity extension. About Clinica Real Clinica Real, LLC, dba Clinica Real Rehabilitation & Chiropractic, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-20451) in Phoenix, Arizona, on Sept. 13, 2012. Clinica Real, doing business as Clinica Real Rehabilitation & Chiropractic, disclosed $10.5 million in assets and $29.8 million in liabilities. The Debtor has no real property. Its largest asset is an unliquidated claim against State Farm Mutual Automobile Insurance Co. and State Farm Fire & Casualty Co., which the Debtor valued at $9.75 million. Most of the claims against the Debtor are unsecured. State Farm has an unsecured claim of $29 million, which the Debtor says is disputed. Judge Sarah Sharer Curley presides over the case. Mark J. Giunta, Esq., serves as the Debtor's counsel. The petition was signed by Keith M. Stone, member. The U.S. Trustee has not appointed an official committee. COUNTRYWIDE FIN'L: Fresh Questions Emerge over BofA Settlement -------------------------------------------------------------- Gretchen Morgenson, writing for The New York Times, reported that new documents filed in state Supreme Court in Manhattan late on Friday questions on practices by the bank's loan servicing unit continue well after the bank has acquired Countrywide Financial, the subprime mortgage giant. According to the report, the documents, which paint a picture of a bank that continue to put its own interests ahead of investors as it modified troubled mortgages, were submitted by three Federal Home Loan Banks, in Boston, Chicago and Indianapolis, and Triaxx, an investment vehicle that bought mortgage securities. They contend that a proposed $8.5 billion settlement that Bank of America struck in 2011 to resolve claims over Countrywide's mortgage abuses is far too low and shortchanges thousands of ordinary investors. The filing raises new questions about whether a judge will approve the settlement, the NY Times said. If it is denied, the bank would face steeper legal obligations. To date, the bank has set aside some $40 billion to settle claims of mortgage misconduct that occurred before it acquired the freewheeling lender, according to the NY Times. About Countrywide Financial Based in Calabasas, California, Countrywide Financial Corporation (NYSE: CFC) -- http://www.countrywide.com/-- originated, purchased, securitized, sold, and serviced residential and commercial loans. In mid-2008, Bank of America completed its purchase of Countrywide for $2.5 billion. The mortgage lender was originally priced at $4 billion, but the purchase price eventually was whittled down to $2.5 billion based on BofA's stock prices that fell over 40% since the time it agreed to buy the ailing lender. DALLAR ROADSTER: Submits Revised Budget After TCB Objection ----------------------------------------------------------- Dallas Roadster, Limited, in January submitted a revised January 2013 cash collateral budget, a copy of which is available at: http://bankrupt.com/misc/dallasroadster.doc317.pdf Texas Capital Bank, N.A., had raised objections to the original budget filed by the Debtor on Dec. 28, 2012. TCB specifically objected to the line item in the January budget for professional fees in the amount of $30,000 which are not delineated by provider. TCB said the Debtor has also failed to timely submit compliance certificates for notes receivable as required in the final order authorizing use of TCB's cash collateral dated March 19, 2012. TCB also said it objects to the proposed budget for February 2013 subject to further discussion with the Debtors. About Dallas Roadster and IEDA Enterprises Dallas Roadster, Limited, owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. J. Bennett White, P.C., replaced DeMarco Mitchell, PLLC, as the Debtors' bankruptcy counsel. Dallas Roadster disclosed $9,407,469 in assets and $4,554,517 in liabilities as of the Chapter 11 filing. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in the Chapter 11 cases. DAVCOMMERCIAL ACQUISITIONS: Voluntary Chapter 11 Case Summary ------------------------------------------------------------- Debtor: Davcommercial Acquisitions LLC 151 Opa Locka Boulevard Opa Locka, FL 33054 Tel: (305) 245-8045 Bankruptcy Case No.: 13-12640 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: AnnaKaye P. Williams, Esq. LAW OFFICES OF ANNAKAYE WILLIAMS, P.A. 49 NW 17th Street Homestead, FL 33030 Tel: (305) 247-8725 Fax: (305) 247-8724 E-mail: annakayewilliams@bellsouth.net 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 John Diaz, manager. DELL INC: Fitch Cuts Issuer Default Rating to 'BB+' on LBO Deal --------------------------------------------------------------- Fitch Ratings has downgraded Dell Inc.'s ratings as follows: -- Long-term Issuer Default Rating (IDR) to 'BB+' from 'A'; -- Bank credit facilities to 'BB+' from 'A'; -- Senior unsecured debt at 'BB+' from 'A'; -- Short-term IDR to 'B' from 'F1'; -- Commercial paper (CP) to 'B' from 'F1'. Fitch has placed the ratings on Rating Watch Negative pending the conclusion of Dell's proposed leveraged buyout (LBO). Approximately $12 billion of debt is affected by Fitch's action, including Dell's undrawn revolving credit facilities with aggregate capacity of $3 billion. Sensitivity/Rating Drivers The downgrades and placement on Rating Watch Negative reflect Dell's announcement that it will be acquired by Michael Dell and Silver Lake in a LBO transaction, which values the equity at $13.65 per share or $24.4 billion. The transaction remains subject to a 45-day go shop period and shareholder approval. The transaction is expected to close by the end of July 2013. Key details of the financing package for the proposed LBO have yet to be disclosed, but Fitch continues to expect pro forma leverage in the 3.5x - 4.5x range, as previously indicated in our press release dated Jan. 17, 2013. This would likely result in a long- term IDR in the mid to high single 'B' range. A 'BB-' rating is a possibility based solely on leverage at the very low end of the range. However, various other factors need to be considered, including the highly competitive environment in which Dell operates, the uncertain macro economy, public sector weakness, reduced financial flexibility to pursue future acquisitions, a nascent track record of its recently acquired enterprise portfolio, and the potential to burn cash in down cycles due to its negative working capital position. DH-EVANS LLC: Case Summary & 4 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: DH-Evans, LLC dba Shoppes At Camelot 32600 Stephenson Highway Madison Heights, MI 48071 Bankruptcy Case No.: 13-10221 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Southern District of Georgia (Augusta) Debtor's Counsel: Charles W. Wills, Esq. KLOSINSKI OVERSTREET, LLP 7 George C. Wilson Court Augusta, GA 30909 Tel: (706) 863-2255 Fax: (706) 863-5885 E-mail: cwills@klosinski.com Scheduled Assets: $3,773,826 Scheduled Liabilities: $5,995,908 A copy of the Company's list of its four unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/gasb13-10221.pdf The petition was signed by William J. Fowler, manager. DOWENT FAMILY: Case Summary & 8 Unsecured Creditors --------------------------------------------------- Debtor: Dowent Family LLC 3148 West Pico Boulevard Los Angeles, CA 90019 Bankruptcy Case No.: 13-12977 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Robert N. Kwan Debtor's Counsel: Todd C. Ringstad, Esq. RINGSTAD & SANDERS, LLP 2030 Main Street, #1200 Irvine, CA 92614 Tel: (949) 851-7450 E-mail: becky@ringstadlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its eight unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb13-12977.pdf The petition was signed by Michelle Orh, managing member. EASTMAN KODAK: Closes IP Sale, Seeks Exclusivity Thru May 31 ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Eastman Kodak Co. completed the $527 million sale of digital-imaging technology on Feb. 1 and on the same day sought a third expansion of the exclusive right to propose a Chapter 11 reorganization plan. The report relates that if approved by the bankruptcy court in New York at a Feb. 20 hearing, the plan-filing deadline will be pushed out by three months to May 31. Kodak said it expects to file a plan by the end of May as currently required by the loan financing bankruptcy. According to the report, although the technology sale generated considerably less than the $2 billion to $2.5 billion the company once hoped to realize, Kodak said the price represented the "full value established by the market" and said it was one of the most complicated intellectual property transactions in history. Kodak still says it intends to emerge from bankruptcy by mid-2013 focusing on the commercial printing business. Kodak said in a court filing that there is "consensus" among the major players in the case about the value of the reorganized company. Kodak still needs resolution of claims resulting from allegedly underfunded European pension plans. Kodak's $400 million in 7% convertible notes due in 2017 traded on Jan. 30 for 12.9 cents on the dollar, up from 10.5 cents on Dec. 12, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak intends to reorganize by focusing on the commercial printing business. Other businesses are being sold or shut down. EATERIES INC: Garfield's and Garcia's Secret Bankruptcy Hit ----------------------------------------------------------- Katy Stech (katy.stech@dowjones.com), writing for The Wall Street Journal's Bankruptcy Beat, reported that two national restaurant chains that quietly filed for bankruptcy and tried to keep the news from their 1,400 employees caught the attention of a federal court watchdog, which has growled out an order to notify them. A representative from the U.S. Trustee's Office instructed the owners of the Garcia's and Garfield's restaurant chains to notify creditors, including many employees, that the chain's two holding companies had filed for Chapter 11 protection on the Friday before New Year's Eve, the WSJ report said. According to the report, both holding companies left out the names of the restaurants they operate throughout several hundred pages that were filed to the U.S. Bankruptcy Court in Oklahoma shortly after the filings on Dec. 28 but more detailed court papers, including a list of their lawsuits and trademarks, make it clear that the chains are Garcia's Mexican restaurants and Garfield's casual-dining restaurants. A company attorney refused to identify them when asked last month, WSJ said. Garfield's website lists 24 restaurants, including six in Pennsylvania, that stretch from Oklahoma to Maryland, WSJ related. Most of Garcia's 12 restaurants are located in Arizona, according to its website. WSJ also related that neither chain recorded major drops in revenue, according to court papers, and company officials didn't explain in court papers why the company needed to redraw agreements with their lenders using the Chapter 11 process. Hours after the holding companies, Eateries Inc. and Fiesta Holdings Inc., filed for bankruptcy, their attorneys asked for a special exception to only tell a handful of businesses, including their lenders, about the filings, according to the report. Company officials reasoned that everyone except two lenders -- Praesidian Capital Investors LP and Intenso LLC -- will get fully repaid, so notifying everyone would be an expensive and pointless hassle. Bankruptcy Judge Sarah Hall approved the request the same day but the secrecy didn't sit well with a representative from the U.S. Trustee's Office, which requested that the company provide notice of the filing "to anyone indirectly affected," said company attorney Stephen Moriarty in an email, WSJ related. Company executives agreed, he said. U.S. Trustee's Office spokeswoman Jane Limprecht said broadly that her agency's job includes making "inquiries regarding compliance with the Bankruptcy Rules, including . . . Bankruptcy Rule 2002 regarding noticing requirements," according to her email, WSJ cited. But before that disclosure went out, the restaurant chains' moves raised eyebrows within the bankruptcy industry, WSJ noted. "I've never seen a case where this kind of order was entered when only a select few creditors get notice of everything, and everyone else is left in the dark," Chicago bankruptcy attorney Eugene Geekie Jr., a 26-year industry veteran, told WSJ. Geekie said that being transparent with creditors is thought of as the tradeoff for getting access to the bankruptcy court's benefits. Those benefits, for example, make a company immune from lawsuits and give them power to reject legal contracts. If a company's bankruptcy isn't well publicized, creditors who were accidentally left off repayment lists wouldn't know to reach out to the company with their claim, WSJ said. And trade creditors who know that a company has filed for bankruptcy might ask for extra protections -- like asking for payments in advance or increasing the price -- to keep from getting burned if the company can't fix its problems. "You lose a check and balance," Geekie told WSJ. About Eateries and Fiesta Holdings Edmond, Oklahoma-based Fiesta Holdings, Inc., filed a Chapter 11 petition (Bankr. W.D. Okla. Case No. 12-16223) on Dec. 28, 2012, estimating assets of $1 million to $10 million and liabilities of less than $50 million. Eateries Inc. filed a Chapter 11 petition (Bankr. W.D. Okla. Case No. 12-16224) on Dec. 28, 2012, estimating less than $10 million in assets and at least $10 million in liabilities. The Chapter 11 petitions of both debtors were signed by Preston Stockton, as president. Both debtors are represented by: Stephen J. Moriarty, Esq. FELLERS SNIDER 100 N. Broadway Avenue, Suite 1700 Oklahoma City, OK 73102-8820 Tel: (405) 232-0621 Fax: (405) 232-9659 E-mail: smoriarty@fellerssnider.com EDISON MISSION: Section 341(a) Meeting Scheduled for Feb. 21 ------------------------------------------------------------ The U.S. Trustee for Region 11 will convene a meeting of creditors in Edison Mission Energy, et al.'s Chapter 11 case on Feb. 21, 2013, at 1:30 p.m. The meeting will be held at the Dirksen Federal Building, 219 South Dearborn Street, Room 804, Chicago, Illinois. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. Kirkland & Ellis LLP is serving as legal counsel to EME, Perella Weinberg Partners, LP is acting as financial advisor and McKinsey Recovery & Transformation Services U.S., LLC is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. EDUCATION HOLDINGS: Seeks OK for DLA Piper and A&M -------------------------------------------------- BankruptcyData reported that Education Holdings 1 filed with the U.S. Bankruptcy Court motions to retain: -- DLA Piper (Contact: Matthew M. Murphy) as counsel at the following hourly rates: partner at $530 to 1,120, counsel at 300 to 940, associate at 320 to 730, paraprofessional at 85 to 455; and -- Alvarez & Marsal North America (Contact: Robert Campagna, Jr.) as financial advisor at the following hourly rates: managing director at $675 to 875, director at 475 to 675, associate at 345 to 475 and analyst at 275 to 375. About Education Holdings 1 Education Holdings 1, Inc., is a holding company that through its Penn Foster division, operates the oldest and one of the largest distance career schools in the world - generating over 150,000 new enrollments annually for its accredited, career-focused, online degree and vocational programs in the U.S., Canada and over 150 other countries in the world. In March 2012, Education Holdings sold its higher education readiness (HER) division, including the name and brand the Princeton Review, to an affiliate of Charlesbank Capital Partners. Education Holdings, just three years after acquiring using borrowed funds the Penn Foster distance career schools for $170 million, sought Chapter 11 protection (Bankr. D. Del. Case No. 13- 10101) on Jan. 21, 2013, with a bankruptcy-exit plan negotiated with major debt holders. Penn Foster Education Group, Inc. nor Penn Foster Inc. are not included in the Chapter 11 filings. GATZ PROPERTIES: Riverhead Golf Course Searches for Buyer --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the owner of the Long Island National Golf Course in Riverhead, New York, needs another four months to find a buyer or someone to invest in the business. According to the report, the golf club for a second time is seeking an expansion of the exclusive right to propose a reorganization plan. If approved by the bankruptcy court in Central Islip, New York, at a Feb. 11 hearing, the deadline will be pushed out by three months to April 18. The public course is valued at $7.7 million, according to a court filing when the Chapter 11 reorganization began in July. Liabilities include $5.9 million on a mortgage owing to Flushing Savings Bank FSB and $1.67 million on a judgment in favor of Auriga Capital Corp. At the outset of bankruptcy, total liabilities were listed for $7.89 million. About Gatz Properties Gatz Properties LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-74493) on July 20, 2012, in Central Islip, New York. The Company scheduled $7,877,511 in assets and $7,892,130 in liabilities. Bankruptcy Judge Alan S. Trust oversees the Debtor's case. Salvatore LaMonica, Esq., at LaMonica Herbst and Maniscalco, in Wantagh, New York, serves as counsel. GENERAL AUTOMOTIVE: Files Petition for Chapter 7 ------------------------------------------------ BankruptcyData reported that General Automotive Company filed for Chapter 7 protection (Bankr. D. Nev. Case No. 13-10618) in Las Vegas. The Company, which offers original equipment manufacturing and aftermarket automotive parts and related automotive products, is represented by John L. Laxague of Cane Clark, the report related. A meeting of creditors under 11 U.S. Sec. 341(a) was scheduled for Feb. 7, 2013. GENESIS ENERGY: S&P Rates $300MM Senior Unsecured Notes 'B' ----------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' issue-level rating to Genesis Energy L.P.'s and Genesis Energy Finance Corp.'s proposed $300 million senior unsecured notes due 2021. S&P also assigned its '6' recovery rating to the debt, indicating negligible (0% to 10%) recovery of principal. The partnership intends to use net proceeds to repay outstanding borrowings under its revolving credit facility, which had approximately $500 million outstanding as of Dec. 31, 2012, and for general partnership purposes. Houston-based Genesis is a midstream energy partnership active in the Gulf Coast area, specializing in pipeline transportation, refinery services relating to sulfur, and supply and logistics. S&P's corporate credit rating on Genesis is 'BB-', and the outlook is stable. As of Sept. 30, 2012, Genesis had about $833 million in debt. RATINGS LIST Genesis Energy L.P. Corporate credit rating BB-/Stable/-- Genesis Energy L.P. Genesis Energy Finance Corp. $300 mil sr unsecd nts B Recovery rating 6 HANDY HARDWARE: Donlin Recano Tapped as Claims & Noticing Agent --------------------------------------------------------------- Donlin, Recano & Company, Inc. is providing claims and noticing agent services to Handy Hardware Wholesale, Inc. The Debtor's counsel is Ashby & Geddes, Wilmington, Delaware. About Donlin Recano Donlin Recano -- http://www.donlinrecano.com-- is a division of DF King Worldwide -- http://www.king?worldwide.com -- and a provider of claims, noticing, balloting and technology solutions. It also provides bondholder identification services, pre?pack bankruptcy solicitation and balloting, crisis communications, financial printing services and call center services through one of the largest and most technologically advanced call centers in the country. King Worldwide is a financial communications, proxy solicitation and stakeholder management company, serving over 1,000 public company, mutual fund family and private equity firm clients domiciled in North America, Europe and Asia. About Handy Hardware Handy Hardware Wholesale, Inc., filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-10060) on Jan. 11, 2013. Handy Hardware is engaged in the business of buying goods from vendors and selling those goods at a discounted price to its members for sale in their retail stores. Handy Hardware, which has 300 employees, is operating on a cooperative basis and is completely member-owned, with over 1,000 members. The Debtor's warehouse facilities are located in Houston, Texas, and in Meridian, Mississippi. Trucking services are provided by Averitt Express, Inc., and Trans Power Corp. Its members operate 1,300 retail stores, home centers, and lumber yards. The members are located in 14 states throughout the U.S. as well as in Mexico, South America, and Puerto Rico. HAWKER BEECHCRAFT: Plan Confirmation Order Signed Feb. 1 -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the bankruptcy court signed a confirmation order on Feb. 1 approving the reorganization plan for aircraft manufacturer Hawker Beechcraft Inc. Hawker said it expects the plan to be implemented by the end of February. The report notes that U.S. Bankruptcy Judge Stuart M. Bernstein heavily revised the draft confirmation order given to him by lawyers for Hawker. He deleted numerous provisions finding that the company made correct decisions throughout the bankruptcy. On June 30, 2012, Hawker filed its Plan, which proposed to eliminate $2.5 billion in debt and $125 million of annual cash interest expense. The plan would give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. In July 2012, Hawker disclosed it was in exclusive talks with China's Superior Aviation Beijing Co. for the purchase of Hawker's corporate jet and propeller plane operations out of bankruptcy for $1.79 billion. In October 2012, Hawker unveiled that those talks have collapsed amid concerns a deal with Superior wouldn't pass muster with a U.S. government panel and other cross-cultural complications. On Oct. 29, 2012, Hawker filed a stand-alone plan supported by the official creditors' committee and by a "substantial majority" of holders of the senior credit and a majority of holders of senior notes. The revised plan still offers 81.9% of the new stock in return for $921 million of the $1.83 billion owing on the senior credit. Unsecured creditors are to receive the remaining 18.9% of the new stock. Holders of the senior credit will receive 86% of the new stock. The senior credit holders are projected to have a 43.1% recovery from the plan. General unsecured creditors' recovery is a projected 5.7% to 6.3%. The recovery by holders of $510 million in senior notes is predicted to be 9.2% to 10%. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee's financial advisor is FTI Consulting, Inc. HILLTOP FARMS: Can Use First Bank's Cash Collateral Until April 30 ------------------------------------------------------------------ The Bankruptcy Court has approved a stipulation allowing Hilltop Farms, LLC to use cash collateral of First Bank & Trust through April 30, 2013. On Dec. 5, 2012, the Bankruptcy Court entered a text order approving the use of First Bank & Trust's cash collateral for December 2012 through February 2013. Under the stipulation, the Debtor sought an amendment to the Dec. 5, 2012 text order to include secured equipment payments to John Deere and Kuhn Financial which are contracted at 0% or similarly lower rates of interest, and which Debtor would like to maintain at these rates to improve cash flow. The Debtor said it did not have all the appropriate contracts to determine those rates until after the initial cash use motion was filed. About Hilltop Farms, LLC Elkton, South Dakota-based Hilltop Farms, LLC, owns properties in Brookings County, South Dakota. It filed a Chapter 11 petition (Bankr. D.S.D. Case No. 12-40768) on Nov. 2, 2012, in Sioux Falls, South Dakota. It disclosed assets of $13.1 million and $13.5 million in liabilities as of Nov. 2, 2012. Laura L. Kulm Ask, Esq., at Gerry & Kulm Ask, Prof LLC, serves as counsel to the Debtor. Judge Charles L. Nail, Jr., presides over the case. Daniel M. McDermott, U.S. Trustee for Region 12, was unable to form an official committee of unsecured creditors in the Debtor's case. HOMEREADY 55: Case Summary & 7 Unsecured Creditors -------------------------------------------------- Debtor: Homeready 55 Corp 998 NE 167 Street North Miami Beach, FL 33162 Tel: (954) 252-6079 Bankruptcy Case No.: 13-12550 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: Laurel M. Isicoff Debtor's Counsel: David C. Rubin, Esq. 6800 SW 40th Street, #352 Miami, FL 33155 Tel: (305) 804-1898 E-mail: david3051@aol.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its seven largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb13-12550.pdf The petition was signed by Shahab Kalam, president. HUDSON HEALTHCARE: Retains DRC as Claims & Noticing Agent --------------------------------------------------------- Hudson Healthcare, Inc., which filed Chapter 11 in the District of New Jersey in August of 2011, has retained Donlin, Recano & Company, Inc. to act as claims and noticing agent. DRC will also be responsible for assisting with distribution related matters. Sills Cummis & Gross P.C. of Newark, New Jersey and CohnReznick LLP of Edison, New Jersey are responsible for post confirmation matters. About Donlin Recano Donlin Recano -- http://www.donlinrecano.com-- is a division of DF King Worldwide -- http://www.king?worldwide.com -- and a provider of claims, noticing, balloting and technology solutions. It also provides bondholder identification services, pre?pack bankruptcy solicitation and balloting, crisis communications, financial printing services and call center services through one of the largest and most technologically advanced call centers in the country. King Worldwide is a financial communications, proxy solicitation and stakeholder management company, serving over 1,000 public company, mutual fund family and private equity firm clients domiciled in North America, Europe and Asia. About Hudson Healthcare Hudson Healthcare Inc. is a non-for-profit corporation formed under the laws of the State of New Jersey. Until the sale of Hoboken University Medical Center by the Hoboken Municipal Hospital Authority, the Debtor owned and managed the day-today operations of the Hospital on the Authority's behalf pursuant to a Manager Agreement dated Feb. 1, 2007. Other than certain contract rights, other intangibles, and approximately 12 vehicles, the Debtor did not own any Hospital assets. Hudson Healthcare filed for Chapter 11 protection (Bankr. D. N.J. Case No. 11-33014) in Newark on Aug. 1, 2011, estimating assets and debt of less than $50 million. Affiliate Hoboken Municipal Hospital Authority also sought Chapter 11 protection. Attorneys at Trenk, DiPasquale, Webster, Della Fera & Sodono, P.C., in West Orange, N.J., serve as counsel to the Debtor. Daniel T. McMurray, the patient care ombudsman, has tapped Neubert, Pepe & Monteith, P.C., as his counsel effective Aug. 25, 2011. The Official Committee of Unsecured Creditors of Hudson Healthcare retained Sills Cummis & Gross P.C., in Newark, N.J., as its counsel, nunc pro tunc to Aug. 12, 2011. JH Cohn LLP serves as Financial Advisor to the Committee. Epiq Bankruptcy Solutions, LLC, is the Claims and Noticing Agent and Solicitation Agent. HUDSON VALLEY: Orange County Choppers Unit Sent to Liquidation -------------------------------------------------------------- Phil Milford (pmilford@bloomberg.net) and Michael Bathon (mbathon@bloomberg.net), writing for Bloomberg News, reported that TV star Paul Teutul Sr., founder of Orange County Choppers Holdings Inc., sought U.S. Bankruptcy Court protection for his merchandising unit with plans to liquidate its assets. The family-run custom-built motorcycle company operated by Teutul and his son, Paul Jr., is based in Newburgh, New York. Its Hudson Valley Merchandising LLC listed $1.12 million in assets and $1.44 million in debts in papers filed in Poughkeepsie, New York, according to Bloomberg. The parent company didn't file. Under Chapter 7 of the U.S. Bankruptcy Code a trustee will automatically be appointed to dismantle the company, sell its assets and distribute the proceeds to creditors, Bloomberg noted. The Teutuls' "American Chopper" reality television show ended its decadelong run on the Discovery Channel in December, Bloomberg noted. It featured the antics and interactions between father and son in their New York state motorcycle shop. Bloomberg said Jonathan S. Pasternak, a lawyer representing the bankrupt company, didn't immediately return a phone call seeking comment on the filing. HURLEY MEDICAL: Fitch Rates Series 2013A & B Revenue Bonds 'BB+' ---------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to the Flint Hospital Building Authority's expected issuance of approximately $22 million series 2013A fixed-rate revenue rental bonds and approximately $37 million series 2013B fixed-rate revenue refunding bonds issued on behalf of Hurley Medical Center. In addition, Fitch Ratings has affirmed the 'BB+' rating on the following fixed-rate bonds issued on behalf of Hurley Medical Center by Flint Hospital Building Authority (Michigan): -- $8,835,000 revenue refunding bonds, series 1998A; -- $14,665,000 revenue rental bonds, series 1998B; -- $23,360,000 hospital revenue and refunding bonds, series 2003; -- $34,215,000 revenue rental bonds, series 2010. HMC has approximately $4.7 million outstanding on its series 2011 direct placement, which Fitch does not rate. The Rating Outlook is Stable. Proceeds of the series 2013A bonds will be used to finance capital projects and installation of equipment at Hurley Medical Center, fund a debt service reserve fund and pay certain costs of issuance. The proceeds of the series 2013B bonds will be used to refund all or a portion of the series 1998A &B bonds and the series 2003 bonds for savings, fund a debt reserve fund and pay certain costs of issuance. Maximum annual debt service (MADS) was calculated by the underwriter and is expected to be about $10.84 million. The bonds are expected to sell via negotiation the week of Feb. 25, 2013. Security Debt payments are secured by cash rentals (net revenues of the Medical Center) made to the authority, acting through its Board of Hospital Managers, on behalf of HMC as agreed under the eighth amended and restated contract of lease dated Feb. 1, 2013. In addition, bondholders will benefit from a fully funded debt service reserve fund. Sensitivity/Rating Drivers ADEQUATE LIQUIDITY: Liquidity metrics remain adequate for the rating category despite a decrease since Fitch's last review. Unrestricted cash and investments at Dec. 31, 2012 of $64.3 million was down from $70.6 million at fiscal year-end 2012 (year ended June 30) and $85.3 million at fiscal year-end 2011, mostly due to significant capital spending and weak operating cash flow. The series 2013 financing will strengthen Hurley's balance sheet with $7 million of reimbursement for prior capital expenditures. HISTORICALLY MARGINAL OPERATING PERFORMANCE: Operating performance in fiscal 2012 with operating margin of negative 1.3% and operating EBITDA of 3.6% was below prior years, reflecting the impact of several one-time expenses. Fitch expects performance to return to break-even results in fiscal 2013. CHALLENGING PAYOR MIX: Located in Flint, Michigan, HMC operates in a competitive service area with below-average socioeconomic indicators, subjecting the hospital to elevated levels of government payors, with Medicaid at a very high 39.4% of gross revenues in fiscal 2012. MANAGEABLE DEBT BURDEN: Pro forma MADS comprised a manageable 3% of total fiscal 2012 revenues. Coverage of pro forma MADS by EBITDA of 1.8x in fiscal 2012 is adequate for the rating category. Credit Profile The 'BB+' rating reflects HMC's adequate liquidity for the rating category and relatively stable operating performance despite operating in a difficult market with a high Medicaid population. Located in Flint, Michigan, HMC is a safety-net teaching hospital and is the only provider in the region of Level I Trauma, Level II Pediatric Trauma and Level III Neonatal Intensive care, among other services. HMC has an active outreach effort with many community organizations and is focusing on improving community health. Unrestricted liquidity declined in fiscal 2012 and through the interim period due to high capital spending and weak operating cash flow. At Dec. 30, 2012 unrestricted cash and investments was $64.3 million, equating to a light 66.8 days cash on hand, 5.9x pro forma cushion ratio and 60.8% pro forma cash to debt (Fitch factored $22 million of new money into the analysis). With this financing HMC will put $7 million back on the balance sheet as reimbursement for capital expenditures. This will result in unrestricted cash and investments of $71.3 million, equaling 74.1 days cash on hand, 6.6x pro forma cushion ratio and 67.5% pro forma cash to debt. Fitch expects liquidity to stabilize in the near term. Further deterioration to liquidity would likely result in downward rating pressure. HMC has been heavily investing in its plant with capital expenditures averaging a high 246% of depreciation expense from 2010 - 2012. HMC's most recent large capital project was the expansion of its emergency department (ED) to account for high volumes that could not be accommodated in its former space. This project was successful and the expansion and redesign has allowed for improved patient flow, operating efficiencies and improved patient care. In addition, management expects to be better able to appropriately manage observation patients with the addition of a 12-bed observation unit in the ED. HMC's operating performance has been relatively stable over the last three fiscal years but was impacted in fiscal 2012 by several one-time expenses, including $2.2 million for EPIC electronic medical record training, $1.6 million for severance costs associated with upper management turnover and $300,000 for additional supplies and staffing associated with the opening of the ED. In fiscal 2012, HMC posted negative 1.3% operating margin and 3.6% operating EBITDA margin. Adjusting for about $4.1 million in one-time expenses, operating margin was near break-even and operating EBITDA was about 4.7%. Management is actively managing expenses, and initiatives include employee health care benefit redesign, legacy cost review, Six Sigma, more efficient purchasing process and observation case management. Fitch expects break even operating profitability in fiscal 2013. HMC's debt profile is manageable with all fixed-rate debt and pro forma MADS equating to 3% of fiscal 2012 total revenue. Pro forma MADS coverage by EBITDA was a relatively light 1.8x in fiscal 2012 but consistent with the prior years' results of 1.7x in fiscal 2011 and 2010. Through the six-month interim period ended Dec. 31, 2012 MADS coverage by EBITDA improved to 2.2x. Since HMC is a governmental entity, its investment portfolio is very conservative as investments are restricted to government-issued fixed-income securities. The primary credit risks include a challenging economic environment and reliance on state Medicare disproportionate share (DSH) revenues. Located in Flint, Michigan, HMC operates in an economically distressed service area with a challenging payor mix. A high 39.7% of gross revenues were derived from Medicaid and 27% from Medicare at December 31, 2012. Uncertainty over the continuation of current Medicaid funding levels, given the state's budget distress and national budget pressures, remains a significant credit risk. Material funding reductions would have a major impact on HMC's ability to improve profitability. The Stable Outlook reflects Fitch's expectation that HMC will stabilize its operations and liquidity position. Continued deterioration to liquidity or profitability would likely result in negative rating pressure. HMC is a 443-bed acute care teaching hospital with safety-net provider status located in Flint, Michigan. HMC had approximately $362.5 million of total revenue in fiscal 2012. HMC covenants to provide annual and quarterly disclosure to the Municipal Securities Rulemaking Board's EMMA system. HYMAN BIBER: Ch.7 Trustee May Amend Clawback Suit Against BofA -------------------------------------------------------------- Bankruptcy Judge Albert S. Dabrowski authorized Anthony S. Novak, the Chapter 7 Trustee in the bankruptcy case of Hyman Biber, to amend his complaint against Bank of America N.A. The Trustee seeks to recover $24,993 allegedly received by Bank of America within 90 days of the filing of the petition. The case is, ANTHONY NOVAK, TRUSTEE PLAINTIFF, v. BANK OF AMERICA, N.A., DEFENDANT, Adv. Proc. No. 12-02016 (Bankr. D. Conn.). A copy of the Court's Feb. 1, 2013 Brief Memorandum of Decision and Order is available at http://is.gd/0RxcLwfrom Leagle.com. Hyman Biber filed for Chapter 11 bankruptcy (Bankr. D. Conn. Case No. 10-23613) on Oct. 21, 2010. A copy of the petition is available at http://bankrupt.com/misc/ctb10-23613p.pdf A list of the Debtor's largest unsecured creditors is available at http://bankrupt.com/misc/ctb10-23613c.pdf The case was converted to a case under Chapter 7 on March 31, 2011, and Anthony S. Novak was duly appointed as the Chapter 7 Trustee. INSPIRATION BIOPHARMA: Cangene Agrees to Acquire Hemophilia Assets ------------------------------------------------------------------ Ipsen and Inspiration Biopharmaceuticals Inc. on Feb. 6 entered into an Asset Purchase Agreement whereby Cangene Corporation agrees to acquire the worldwide rights to IB1001, a recombinant factor IX (rFIX) for the treatment of hemophilia B. A hearing was slated Feb. 6 to consider approval of the APA before the US Federal Bankruptcy Court in Boston. The sale is a result of a joint marketing and sale process pursued by Ipsen and Inspiration shortly after Inspiration sought bankruptcy protection. Ipsen has been providing Inspiration with DIP for an amount of up to $23.6 million to fund Inspiration's operations during the sale process. Cangene has agreed to pay $5.9 million upfront, up to $50 million in potential additional commercial milestones as well net sales payments equivalent to tiered double digit percentage of IB1001 annual net sales. The APA is subject to certain closing conditions including Bankruptcy Court approval. On Jan. 24, 2013, Ipsen and Inspiration announced that they had entered into an APA for the sale of OBI-1 to Baxter International (Baxter), subject to closing conditions. As Inspiration's only senior secured creditor and as the owner of non-Inspiration assets that will be included in the sale of both OBI-1 and IB1001, Ipsen will receive approximately 60% of the upfront payments. Over and above these upfront amounts, Ipsen will receive 80% of all payments up to a present value of $304 million and 50% of all proceeds thereafter. On the basis of available information, the share of upfront payments to be received by Ipsen should mainly cover the total amount of DIP financing provided to Inspiration. The remaining portion of proceeds is contingent on OBI-1 and IB1001 approvals. As a consequence, the Group, as of December 31, 2012, may impair hemophilia related assets (mainly composed of the convertible bonds and the Milford manufacturing site) for a total amount of around EUR100 million after tax. $1 Billion for Assets Under the APA, Cangene would acquire worldwide rights to IB1001, as well as Inspiration's rights to two product candidates in pre- clinical development: IB1007 (recombinant FVIIa) and IB1008 (recombinant FVIII). The total aggregate consideration for these rights may exceed $300 million; including the upfront payment of $5.9 million, sales milestones totaling $50 million and annual net sales payments tiered up to a double-digit percentage of global net sales. Inspiration and Ipsen previously announced the sale of OBI-1 to Baxter for a total aggregate consideration that may exceed $700 million, including $135 million in upfront and milestone payments. The Bankruptcy Court approved that transaction on Jan. 24. With the signing of the transaction for IB1001, total aggregate consideration for Inspiration's assets may exceed $1 billion. John P. Butler, Inspiration's Chief Executive Officer commented, "OBI-1 and IB1001 are important products for people living with hemophilia, bringing innovation and expanding treatment options. We are very pleased that Baxter and Cangene will bring these products to market." IB1001 is currently under regulatory review by both the FDA in the US and the EMA in Europe. The product was placed on clinical hold by the FDA in July 2012. Inspiration has been working to resolve the issues that led to the clinical hold and has discussed its plans to address the clinical hold with relevant regulatory authorities. "IB1001 was the first product Inspiration developed, with a vision to expand global access to safe and effective recombinant therapies for people living with hemophilia. We are very pleased that Cangene will take IB1001 forward to make this vision a reality," commented John R. Taylor, Inspiration's Chairman and a founder of the company. Evercore Partners served as exclusive financial advisor to Inspiration and Ipsen on the transaction. Ropes & Gray served as legal advisor to Inspiration on the transaction. Murphy & King is Inspiration's bankruptcy counsel and FTI Consulting, Inc. is Chief Restructuring Officer for Inspiration. Lazard and Banque Hottinguer & Cie served as financial advisors to Ipsen. Brief Timeline In January 2010, Inspiration entered into a strategic agreement with Ipsen, leveraging the combined expertise and resources of the two companies, to develop a broad portfolio of hemophilia products and two products in phase III. IB1001, an investigational intravenous recombinant factor IX (rFIX) therapy for the treatment and prevention of bleeding episodes in people with hemophilia B and OBI-1 an investigational intravenous recombinant porcine factor VIII (rpFVIII) therapy for the treatment of patients with i) acquired hemophilia A and ii) congenital hemophilia A who have developed inhibitors against human FVIII. In August 2011, Ipsen and Inspiration announced the extension of their agreement to create a hemophilia business unit structure that will act as the exclusive sales organization for all hemophilia products commercialized under the Inspiration brand in Europe. In July 2012 Inspiration announced that IB1001 was placed on clinical hold by the Food and Drug Administration (FDA). On August 21, 2012, Ipsen and Inspiration renegotiated their 2010 partnership. This agreement aimed to establish an effective structure whereby Ipsen gained commercial rights in key territories. Inspiration remains responsible for the world-wide development of OBI-1 and IB1001. Ipsen paid a bridging facility for an amount of $30 million providing both Inspiration with time to secure independent third party financing and Ipsen with time to assess potential ways forward. On August 31, 2012, Ipsen paid Inspiration $7.5 million and received a warrant for 15% of Inspiration's equity. Ipsen had agreed to pay Inspiration an additional $12.5 million if Inspiration had raised third party financing by the contractual deadline of September 30, 2012. Inspiration did not manage to raise external funding by this contractual deadline. On Oct. 30, 2012, Inspiration commenced a voluntary reorganization case pursuant to Chapter 11's provisions of the United States Bankruptcy Code with the objective of leading a joint marketing and sales process. Ipsen is seeking to exit hemophilia through this process. On Jan. 24, 2013, Ipsen and Inspiration announced that they had entered into an Asset Purchase Agreement for the sale of OBI-1 to Baxter subject to closing conditions. On February 6, 2013, Ipsen and Inspiration announced that they had entered into an Asset Purchase Agreement for the sale of IB1001 to Cangene subject to closing conditions. About Inspiration Biopharmaceuticals Inspiration Biopharmaceuticals Inc. develops recombinant blood coagulation factor products for the treatment of hemophilia. Inspiration, based in Cambridge, Massachusetts, has two products in what the company calls "advanced clinical development." Two other products are in "pre-clinical development." None of the products can be marketed as yet. Inspiration filed for voluntary Chapter 11 reorganization (Bankr. D. Mass. Case No. 12-18687) on Oct. 30, 2012, in Boston. Bankruptcy Judge William C. Hillman oversees the case. Mark Weinstein and Michael Nolan, at FTI Consulting, Inc., serve as the Debtor's Chief Restructuring Officers. The Debtor is represented by Harold B. Murphy of Murphy & King. The petition shows assets and debt both exceed $100 million. Assets include patents, trademarks and the products in development. Liabilities include $195 million owing to Ipsen Pharma SAS, which is also a 15.5% shareholder. Ipsen -- http://www.ipsen.com/-- is also owed $19.4 million in unsecured debt. There is another $12 million in unsecured claims. Ipsen is pledged to provide $18.3 million in financing. The Debtor disclosed $20,383,300 in assets and $241,049,859 in liabilities. Ipsen is represented in the case by J. Eric Ivester, Esq., at Skadden Arps. The Official Committee of Unsecured Creditors tapped Jeffrey D. Sternklar and Duane Morris LLP as its counsel, and The Hawthorne Consulting Group, LLC as its financial advisor. INSPIREMD INC: Incurs $1.9 Million Net Loss in Dec. 31 Quarter -------------------------------------------------------------- InspireMD, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of US$1.92 million on US$1.35 million of revenue for the three months ended Dec. 31, 2012, as compared with a net loss of US$8.23 million on US$1.29 million of revenue for the same period during the prior year. For the six months ended Dec. 31, 2012, the Company incurred a net loss of US$9.42 million on US$1.85 million of revenue, as compared with a net loss of US$10.51 million on US$3.27 million of revenue for the same period a year ago. The Company's balance sheet at Dec. 31, 2012, showed US$11.59 million in total assets, US$11.39 million in total liabilities and a US$204,000 in total equity. Revenue for the period was up 165% over the Sept. 30, 2012, quarter, reflecting early results of marketing initiatives that were launched following the announcement of positive results of the MASTER trial of the Company's MGuardTM Embolic Protection Stent (EPSTM) at the 24th Annual Transcathter Cardiovascular Therapeutics (TCT) scientific meeting in Miami on Oct. 24, 2012. Alan Milinazzo, newly appointed President and CEO of InspireMD said, "The interventional cardiology community was clearly enthusiastic about the MASTER trial's results. The study's positive results set the stage for enhanced sales and marketing activities which began during the first week of December at the important ICI meeting in Tel Aviv." A copy of the Form 10-Q is available for free at: http://is.gd/rgKIyW CEO Appointment On Jan. 3, 2013, Alan Milinazzo was named President, CEO, and a member of the board. He replaced Ofir Paz, who previously announced his intention to step down as CEO in September 2012 once a successor was named. Mr. Paz continues to serve as a director. Mr. Milinazzo, who previously served in executive positions at Medtronic and Boston Scientific Corporation, brings more than 15 years of important commercial, operations, and international experience in interventional cardiology to bear on InspireMD's commercial strategy and operations as it launches the MGuard EPS platform. He was instrumental in the launch of ENDEAVOR, Medtronic's first drug eluting stent platform, which has since generated more than $1 billion in revenue. He previously spent 12 years in executive positions at Boston Scientific, another major stent producer, serving as Vice President of Marketing at its $200 million SCIMED European unit, responsible for product launches, clinical programs and regulatory strategies. Mr. Milinazzo most recently served as President and CEO of Nasdaq- quoted Orthofix International N.V., positions he was promoted to in 2006 after being hired a year earlier as Chief Operating Officer. During his tenure at Orthofix, Mr. Milinazzo transformed it into a category leader in novel spine and orthopedic stem cell therapy, while growing revenue from $300 million to $580 million and nearly doubling profits. In commenting on Mr. Milinazzo's appointments, Sol J. Barer, PhD, Chairman of InspireMD said: "Alan brings an exceptional set of experiences to us as a proven executive in the medical device field, particularly as relates to interventional cardiology and stents specifically. He brings a long list of strategically and commercially important accomplishments as a public company executive, he has the right blend of domestic and international experience for a company with our opportunities and intentions, and a well-documented entrepreneurial drive that's critical to success in managing the evolving needs and challenges of an emerging company such as ours." About InspireMD InspireMD, Inc., was organized in the State of Delaware on Feb. 29, 2008, as Saguaro Resources, Inc., to engage in the acquisition, exploration and development of natural resource properties. On March 28, 2011, the Company changed its name from "Saguaro Resources, Inc." to "InspireMD, Inc." Headquartered in Tel Aviv, Israel, InspireMD, Inc., is a medical device company focusing on the development and commercialization of its proprietary stent platform technology, Mguard. MGuard provides embolic protection in stenting procedures by placing a micron mesh sleeve over a stent. The Company's initial products are marketed for use mainly in patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions (bypass surgery). The Company's balance sheet at Sept. 30, 2012, showed $13.6 million in total assets, $14.4 million in total liabilities, and a stockholders' deficit of $756,000. InspireMD reported a net loss of US$17.59 million on US$5.35 million of revenue for the year ended June 30, 2012, compared with a net loss of US$6.17 million on US$4.67 million of revenue during the prior year. Kesselman & Kesselman, in Tel Aviv, Israel, 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 losses, negative cash flows from operating activities and has significant future commitments that raise substantial doubt about its ability to continue as a going concern. The Company said the following statement in its quarterly report for the period ended Dec. 31, 2012: "The Company has had recurring losses and negative cash flows from operating activities and has significant future commitments. For the six months ended December 31, 2012, the Company had losses of approximately $9.4 million and negative cash flows from operating activities of approximately $5.8 million. The Company's management believes that its financial resources as of December 31, 2012 should enable it to continue funding the negative cash flows from operating activities through the three months ended September 30, 2013. Furthermore, commencing October 2013, the Company's senior secured convertible debentures (the "2012 Convertible Debentures") are subject to a non-contingent redemption option that could require the Company to make a payment of $13.3 million, including accrued interest. Since the Company expects to continue incurring negative cash flows from operations and in light of the cash requirement in connection with the 2012 Convertible Debentures, there is substantial doubt about the Company's ability to continue operating as a going concern. These financial statements include no adjustments of the values of assets and liabilities and the classification thereof, if any, that will apply if the Company is unable to continue operating as a going concern." INTERFAITH MEDICAL: Retains Donlin Recano as Claims Agent --------------------------------------------------------- Interfaith Medical Center has retained Donlin, Recano & Company, Inc. to act as claims and noticing agent. Interfaith Medical Center, filed for bankruptcy protection in the United States Bankruptcy Court for the Eastern District of New York. The hospital and its related facilities consist of a 287 bed hospital in Brooklyn, New York and an ambulatory care network of eight clinics. Debtor's counsel is Willkie Farr & Gallagher LLP, New York, New York. About Donlin Recano Donlin Recano -- http://www.donlinrecano.com-- is a division of DF King Worldwide -- http://www.king?worldwide.com -- and a provider of claims, noticing, balloting and technology solutions. It also provides bondholder identification services, pre?pack bankruptcy solicitation and balloting, crisis communications, financial printing services and call center services through one of the largest and most technologically advanced call centers in the country. King Worldwide is a financial communications, proxy solicitation and stakeholder management company, serving over 1,000 public company, mutual fund family and private equity firm clients domiciled in North America, Europe and Asia. About Interfaith Medical Center Headquartered in Brooklyn, New York, Interfaith Medical Center, Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford- Stuyvesant and an ambulatory care network of eight clinics in central Brooklyn, in Crown Heights and Bedford-Stuyvesant. The Company filed for Chapter 11 protection (Bankruptcy E.D. N.Y. Case No. 12-48226) on Dec. 2, 2012. The Debtor disclosed $111,872,972 in assets and $193,540,998 in liabilities as of the Chapter 11 filing. Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP, serves as bankruptcy counsel to the Debtor. Nixon Peabody LLP is the special corporate and healthcare counsel. CohnReznick LLP serves as financial advisor. Donlin, Recano & Company, Inc. serves as administrative agent. The Official Committee of Unsecured Creditors tapped Alston & Bird LLP as its counsel, and CBIZ Accounting, Tax & Advisory of New York, LLC as its financial advisor. IZEA INC: Frost Gamma Discloses 9.1% Equity Stake ------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Frost Gamma Investments Trust disclosed that, as of Dec. 31, 2012, it beneficially owns 465,125 shares of common stock of Izea, Inc., representing 9.1% of the shares outstanding. A copy of the filing is available at http://is.gd/eMOPG6 About IZEA, Inc. IZEA, Inc., headquartered in Orlando, Fla., believes it is a world leader in social media sponsorships ("SMS"), a rapidly growing segment within social media where a company compensates a social media publisher to share sponsored content within their social network. The Company accomplishes this by operating multiple marketplaces that include its platforms SocialSpark, SponsoredTweets and WeReward, as well as its legacy platforms PayPerPost and InPostLinks. The Company has incurred significant losses from operations since inception and has an accumulated deficit of $20.9 million as of June 30, 2012. Cross, Fernandez & Riley, LLP, in Orlando, Florida, expressed substantial doubt about IZEA's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred recurring operating losses and had an accumulated deficit at Dec. 31, 2011, of $18.1 million. JASON INC: S&P Assigns 'B+' Corporate Credit Rating --------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' corporate credit rating to Milwaukee, Wis.-based industrial products manufacturer Jason Inc. The outlook is stable. At the same time, S&P assigned its 'B+' issue-level rating to the company's proposed $260 million senior secured credit facility, which comprises a $225 million senior secured term loan and a $35 million revolver. The recovery rating on the senior secured facilities is '3', which indicates S&P's expectation of meaningful (50% to 70%) recovery in the event of a payment default. S&P expects the company to use proceeds from the new facility to redeem all outstanding debt under its existing credit facilities and to fund a $48 million dividend to equity sponsors and management. "Standard & Poor's ratings on Jason reflect our assessment of the company's 'weak' business risk profile and 'aggressive' financial risk profile," said Standard & Poor's credit analyst Svetlana Olsha. S&P's assessment of the company's "weak" business risk profile reflects its participation in highly fragmented and competitive industrial and automotive application markets, and its narrow scope of operations in those markets. The company's relative platform diversity, good market position as a No. 1 player in most of its markets, and longstanding customer relationships partly offset these factors. S&P expects Jason's organic revenues to grow by low-single digits in 2013, given S&P's expectations for slow growth in industrial production as well as modestly increasing U.S. light vehicle production. S&P expects Jason to sustain EBITDA margins of about 10% as a result of the company's cost cutting during the past downturn and some future cost reduction initiatives. Overall, S&P believes market conditions will remain highly competitive, which will limit the potential for margin improvement despite a leaner cost structure. S&P's assessment of the company's management and governance is "fair." Jason comprises four platforms: finishing (28% of estimated 2012 revenues), automotive acoustics (26%), seating (25%), and components (21%). The company serves a variety of end markets including industrial, automotive, lawn and turf care, vehicle, motorcycle, and agricultural and construction equipment. Historically, revenues and cash flows have exhibited significant volatility in tandem with cyclicality in markets the company serves. S&P anticipates that demand for original equipment in North America will remain cyclical, but the consumable nature of the company's finishing products as well as some aftermarket revenues derived from Jason's seating segment should partly temper the effects. S&P believes the company will continue to have some customer concentration, with top 10 customers accounting for about one- third of revenues in 2012. The company's overall geographic diversity should remain relatively limited because of its North American footprint--about 25% of revenues are generated from products sold outside the U.S.--although S&P expects the company's emerging markets presence to increase over time. The company is exposed to volatile raw material costs, which could pressure margins. S&P expects that the company will be able to pass on most raw material inflation to many of its customers, although there could be a time lag between material and price increases. Jason has an "aggressive" financial risk profile and an aggressive financial policy. Pro forma for the transaction, Jason's credit metrics will include total debt to EBITDA of about 4.5x and funds from operations (FFO) to debt slightly above 10% at the end of 2012. These metrics incorporate S&P's adjustments for operating leases, postretirement obligations, and include existing foreign debt and about $22 million in preferred stock owned by the private equity sponsors, which S&P considers to have minimal equity content under its hybrid criteria for financial ratio analysis. S&P believes the company will maintain metrics in line with what S&P considers appropriate for the rating, specifically total debt to EBITDA of 4x to 5x and FFO to debt of 10% to 15%. The rating incorporates limited capacity for small bolt-on acquisitions and does not include any potentially larger strategic acquisitions. Jason has historically been acquisitive, and S&P expects the company to make acquisitions that complement its existing manufacturing capabilities and products. The outlook is stable. S&P expects the company's steady operating margins and positive free cash flow generation should help sustain credit measures that are appropriate for the rating, specifically debt to EBITDA of 4x-5x and FFO to debt of 10%-15%. S&P could lower the rating if subpar operating performance causes credit measures to deteriorate, specifically if leverage exceeds 5x and FFO to debt declines below 10% for an extended period. S&P believes this could happen if weakening industrial and automotive markets cause revenue to decline by about 5% to 10% and lower fixed-cost absorption pressures margins. S&P could also lower the ratings if higher-than-expected cash outflows or debt-financed activities hurt the company's liquidity or result in deterioration in credit measures. The company's aggressive financial policy limits positive rating actions. S&P could raise the rating if private equity ownership meaningfully declines and if more conservative financial policies lead S&P to expect debt leverage to drop to and remain less than 4x, taking into account the cyclicality of the company's markets. JEFFERSON COUNTY, AL: Creditors' Trustee Misses Feb. 1 Payment -------------------------------------------------------------- Reuters reported that a lawyer for the creditors' trustee in America's biggest municipal bankruptcy on Friday said the trustee will not make a Feb. 1 payment to owners of $3.14 billion of sewer debt issued by Alabama's Jefferson County. Gerald Mace, an attorney for creditors' trustee Bank of New York Mellon, told a bankruptcy court hearing that the distribution could not be made because of a "lack of funds", the report related. In a document filed on the Electronic Municipal Market Access (EMMA) on Friday, BNY Mellon lists as oustanding approximately $3.1 billion in principal of sewer revenue warrants affected, the report noted. The notice explains that "certain holders of bank warrants are not willing, at this time, to consent the trustee making distributions of principal with respect to Sewer Warrants coming due at maturity or resulting of mandatory sinking fund redemption in February and early March 2013...." The county continues to make payments from sewer-system revenues to Bank of New York, which distributes the money to debt owners that include Wall Street banks, insurance companies and hedge funds, Jefferson County Manager Tony Petelos told reporters, Reuters noted. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. JEFFERSON COUNTY, AL: Hearing With Sewer Bondholders Not Completed ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a hearing began last week in the municipal bankruptcy of Jefferson County, Alabama, where holders of defaulted sewer bonds are asking the bankruptcy judge for permission to continue a lawsuit in state court to reimpose a receiver to run the sewer system. According to the report, the hearing wasn't completed. The bankruptcy judge in Birmingham, Alabama, asked both sides to submit papers by Feb. 6 proposing a schedule for conclusion of the hearing. If the bankruptcy judge decides to allow bondholders to continue the suit in state court, they will ask the state judge to reinstitute a receivership that was in place before bankruptcy. The receiver presumably would raise rates paid by customers to increase payments to bondholders. According to the report, at the hearing on Feb. 1, a lawyer for the bondholders' indenture trustee said there wasn't enough revenue for the indenture trustee to make a Feb. 1 payment. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. JILL ACQUISITION: Moody's Affirms 'Caa1' CFR; Outlook Positive -------------------------------------------------------------- Moody's Investors Service revised Jill Acquisition LLC's outlook to positive from stable. All other ratings including the Caa1 Corporate Family Rating and B3(LGD 3, 40%) assigned to J. Jill's Term Loan were affirmed. The following ratings were affirmed: Jill Acquisition LLC: Corporate Family Rating at Caa1 Probability of Default Rating at Caa1-PD JJ Lease Funding Corporation: $86.5 million secured term loan at B3 (LGD 3, 40% from LGD 3, 37%) Ratings Rationale: The revision to a positive outlook reflects the recent improvement in sales, and earnings which if sustained could lead to upward momentum for the rating. Over the course of 2012 J. Jill has experienced strong same store sales growth in their retail channel as well as robust online growth and meaningfully expanded operating margins which has improved leverage and significantly increased the cushion on their covenants. The positive outlook reflects Moody's belief that the company will be able to maintain current earnings levels. While Moody's outlook is positive, the company's interest cost following a refinancing in 2012 remains high, which will limit the company's ability to lower overall debt levels. J. Jill's Caa1 Corporate Family Rating reflects the company's minimal pro-forma interest coverage, with EBITDA-Capex to cash interest of close to one time for the most recent LTM period. The rating also reflects the company's modest scale in the highly fragmented women's sportswear category and its recent inconsistent execution. J.Jill's leverage, with debt/EBITDA (including Moody's standard analytical adjustments for operating leases) currently 6.2 times as of October 2012, has improved considerably over the course of 2012 due to improved operating performance. J. Jill will need to sustain recent results to maintain good levels of headroom under its financial covenants, which will step down each of the next few quarters. Moody's believes J. Jill has brand awareness within its target customer demographic and the company's meaningful online business provides additional diversity beyond its current brick and mortar store base. The positive outlook reflects recent improved trends in sales and operating earnings. If earning is sustained at the current level, could lead to upward rating momentum. Continued positive earnings would result in improved credit metrics and greater headroom under the company's financial covenants. Quantitatively, ratings could be upgraded if debt/EBITDA approached the low 6 times range and EBITDA-Cap Ex/cash interest expense exceeded 1.25 times while demonstrating a good liquidity profile. Ratings could be downgraded if the company's currently adequate liquidity profile were to erode, or if otherwise the probability of default were deemed to rise. The rating outlook could be revised to stable if Moody's expected covenant headroom to narrow, if debt/EBITDA returned to the high six times range or EBITDA-Cap Ex/cash interest expense were to return to the low 1 times range. Headquartered in Quincy, Massachusetts, J Jill Acquisition LLC is a retailer of women's apparel, footwear and accessories though the internet, catalogs and 226 retail stores. LTM revenues as of October 27, 2012 are around $411 million. The principal methodology used in this rating 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. KI CHANG PARK: Loses Appeal Over Trustee's Sale of Assets --------------------------------------------------------- Seattle District Judge Richard A. Jones dismissed an appeal taken by debtor-spouses, Ki Chang Park and Soon Oak Yoo, from a bankruptcy court order authorizing the Chapter 7 trustee for the debtors to sell the debtors' real property located in Kenmore. The debtors argue that the trustee has failed his duties "while serving as the Chapter 11 trustee." The trustee, in response, argues that the appeal does not pertain to the Bankruptcy Court's order or relief granted, and that the sale of the Kenmore Property is not subject to reversal or modification on appeal. The case is, KI CHANG PARK, et al., Appellants, v. DAVID A. GEBBEN Appellee, Case No. C12-296 RAJ (W.D. Wash.). A copy of the District Court's Feb. 1, 2013 Order is available at http://is.gd/adfynKfrom Leagle.com. Ki Chang Park filed a petition under Chapter 13 of the Bankruptcy Code (Bankr. W.D. Case No. 10-22961) on Oct. 28, 2010. His wife, Soon Oak Yoo, was subsequently added as a joint debtor. The Chapter 13 case was converted to a case under Chapter 11 of the Bankruptcy Code on Dec. 20, 2010, and David A. Gebben was appointed to serve as Chapter 11 Trustee in the case on March 24, 2011. On July 18, 2011, upon the trustee's motion, the Chapter 11 case was converted to Chapter 7. LA JOLLA: Gets Notice of Allowance for Patent Covering GCS-100 -------------------------------------------------------------- La Jolla Pharmaceutical Company said that the United States Patent and Trademark Office (USPTO) has issued a notice of allowance for claims covering its lead product candidate, GCS-100, from patent application number 13/588,932. The claims, which expire in 2025 without accounting for any potential patent term extension, provide proprietary protection for solutions comprised of purified modified pectin, with a defined average molecular weight range. "This patent compliments our other issued patents and strengthens our position as the leader in the development of effective, pectin-based therapeutics," said James Rolke, Senior Director of Research and Development at La Jolla and inventor of the technology. George Tidmarsh, M.D. Ph.D., president and chief executive officer of La Jolla stated, "The allowance of these claims represents another step in building our proprietary protection of GCS-100 and modified pectin compositions derived from any source. We are prosecuting additional patent claims that may provide further protection of our lead role targeting galectin-3 with pectin- derived products." La Jolla Pharmaceutical Company is building a pipeline of drug candidates based on modified pectin, a polysaccharide chemically related to the natural pectin found in plant cell walls. Modified pectin has the ability to bind and sequester the protein galectin- 3, over-expression of which has been implicated in a number of human diseases including chronic organ failure and cancer. The modified pectin compositions described in patent '932 may have the advantages of improved therapeutic potency, purity and composition uniformity. The claims allowed in this patent cover such pectin compositions regardless of the intended therapeutic use. The Company's intellectual property portfolio also includes two issued patents covering methods for preparing biologically active modified pectin, 2 pending patents describing modified pectin compositions, and 1 pending patent covering the method of reducing the rate of cancer growth by treating with a galectin inhibitor. About La Jolla Pharmaceutical San Diego, Calif.-based La Jolla Pharmaceutical Company (OTC BB: LJPC) -- http://www.ljpc.com/-- is a biopharmaceutical company that has historically focused on the development and testing of Riquent as a treatment for Lupus nephritis. La Jolla reported a net loss of $11.54 million in 2011, compared with a net loss of $3.76 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.40 million in total assets, $12.93 million in total liabilities, all current, $5.80 million in Series C-1 redeemable convertible preferred stock, and a $15.33 million total stockholders' deficit. After auditing the 2011 results, BDO USA, LLP, in San Diego, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations, has an accumulated deficit of $439.6 million and a stockholders' deficit of $15.6 million as of Dec. 31, 2011, and has no current source of revenues. LAND SECURITIES: U.S. Trustee Opposes Retainers for Advisors ------------------------------------------------------------ U.S. Trustee Richard A. Wieland has issues with the interim compensation procedures and retainers that Land Securities Investors, Ltd., and its affiliates propose for professional persons retained in their Chapter 11 cases. The U.S. Trustee notes that Land Securities has filed an application to hire Kutner, Miller, Brinen, PC, as proposed debtor-in-possession counsel. In the other cases, Weinman & Associates PC filed a request to approve its retainers, as proposed debtor-in-possession counsel, as part of the relief sought in its motions to establish interim compensation procedures for all professionals. The U.S. Trustee asserts that it is inappropriate to approve the retainers and to set an interim compensation procedure in these cases until all the deficiencies noted in the Court's Jan. 30, 2013 notices have been cured and parties in interest and interested parties, including the Court and U.S. Trustee have had an opportunity to review the Debtors' statements of financial affairs, schedules and other currently "deficient" documents. The U.S. Trustee suggests that the Court defer any action on the motions until after March 1, 2013 and to enter an order allowing objections to be filed on or before Feb. 28, 2013, thereby allowing a more informed consideration of the issues in the motions. About Land Securities Land Securities Investors, Ltd., LSI Retail II, LLC and Conifer Town Center, LLC sought Chapter 11 protection (Bankr. D. Colo. Case Nos. 13-11167, 13-1113, and 13-11135) in Denver on Jan. 29, 2013. The Debtors are engaged in the business as real estate developers and investors. Land Securities estimated at least $10 million in assets and liabilities. LDK SOLAR: Venice Court Enforces $31-Mil. Arbitration Award ----------------------------------------------------------- LDK Solar Co., Ltd., said that after a long dispute with Italy- based Helios Technology S.p.A., the Venice Court of Appeal declared on Jan. 16, 2013, that, according to the ICC Rules of Arbitration, the 2010 award in favor of LDK Solar is valid, effective and enforceable in Italy. The Venice Court of Appeal upholds that the "take or pay" clause in the wafer supply contract entered into in October 2008 between LDK Solar and Helios is valid and effective throughout its duration and at terms and conditions related to quantities and prices set forth therein. By virtue of the decision of the Venice Court of Appeal, Helios is required to pay LDK Solar an amount of approximately $31 million plus interest, costs for the arbitration proceedings and lawyers' fees. The Venice Court of Appeal issued the provision after verifying that all the stipulations on the international arbitration are not contrary to Italian legal order and that there are no impediments to the acceptance of the conditions required for the effectiveness of the award itself. About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi- Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. KPMG in Hong Kong, China, said in a May 15, 2012, audit report, there is substantial doubt on the ability of LDK Solar Co., Ltd., to continue as a going concern. According to KPMG, LDK Solar has a net working capital deficit and is restricted to incur additional debt as it has not met a financial covenant ratio under a long-term debt agreement as of Dec. 31, 2011. These conditions raise substantial doubt about the Group's ability to continue as a going concern. LDK Solar's balance sheet at Sept. 30, 2012, showed US$5.76 billion in total assets, US$5.41 billion in total liabilities, US$299.02 million in redeemable non-controlling interests and US$45.91 million in total equity. LEGENDS GAMING: Chickasaw Tribe Sues Over Failed Sale ------------------------------------------------------ Stephanie Gleason at Dow Jones' DBR Small Cap reports that a Chickasaw Nation-backed company is demanding the return of its $6.25 million deposit after a $125 million deal to purchase Diamond Jack casinos in Mississippi and Louisiana fell apart because, it says, the casino owner failed to maintain the business as required by the purchase agreement. An affiliate of the Chickasaw Nation had signed a deal to purchase for $125 million the Debtors' gaming properties in Bossier City, Louisiana, and Vicksburg, Mississippi, as part of a Chapter 11 reorganization plan submitted to the Bankruptcy Court. The tribe, according to Bloomberg News' Bill Rochelle, later claimed in advance of a Feb. 6 hearing to approve the Plan that "dramatic fall in financial performance makes the purchase agreement impossible to close and makes the plan unconfirmable." The tribe says the casinos will be "insolvent on day one or shortly thereafter" and soon will default on new credit agreements. Legends says that tribe by reneging on the deal has acted in bad faith. The tribe already has 17 casinos. About Legends Gaming Legends Gaming LLC, owns gaming facilities located in Bossier City, Louisiana, and Vicksburg, Mississippi, operating under the DiamondJack's trade name. Legends Gaming LLC, and five related entities, including Louisiana Riverboat Gaming Partnership, filed Chapter 11 petitions (Bankr. W.D. La. Case No. 12-12013) in Shreveport, Indiana, on July 31, 2012, to sell the business for $125 million to Global Gaming Solutions LLC, absent higher and better offers. Legends Gaming acquired the business from Isle of Capri Casinos Inc., in 2006 for $240 million. After breaching covenant with lenders, the Debtors in March 2008 sought Chapter 11 protection, jointly administered under Louisiana Gaming Partnership (Case No. 08-10824). The Debtors emerged from bankruptcy in September 2009 and retained ownership and operation of two "DiamondJacks" hotels and casinos in Bossier City and Vicksburg. The Plan restructured $162.1 million owed to the first lien lenders and $75 million owed to secured lien lenders, which would be paid in full, with interest, over time. The Debtors' properties comprise 60,000 square feet of gaming space with 1,913 slot machines, 48 table games and 693 hotel rooms. Revenues in fiscal 2011 were $99.8 million in Louisiana and $39.7 million in Mississippi. As of July 31, 2012, first lien lenders are owed $181.2 million and second lien lenders are owed $114.7 million. Louisiana Riverboat Gaming Partnership disclosed $104,846,159 in assets and $298,298,911 in liabilities as of the Chapter 11 filing. Attorneys at Heller, Draper, Hayden Patrick & Horn serve as counsel to the Debtors. Sea Port Group Securities, LLC is the financial advisor. Kurtzman Carson Consultants LLC as is the claims and notice agent. The Debtors have tapped Jenner & Block LLP as special counsel. LEHMAN BROTHERS: Broker Earmarks $15.2 Billion for Customers ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for Lehman Brothers Inc., the liquidating brokerage subsidiary of Lehman Brothers Holdings Inc., refined prior estimates and now says that an additional $15.2 billion should be deemed property belonging to customers alone. James Giddens, the brokerage trustee, scheduled a March 5 hearing for approval to allocate the $15.2 billion to the fund of customer property. The property intended for customers is among the $25.7 billion Mr. Giddens is holding. According to the report, Mr. Giddens, in his court filing, says the next distribution is a step toward full payment of customer claims. He will have the ability to satisfy claims fully when proposed settlements are documented and approved with the Lehman parent and the European affiliate Lehman Brothers International (Europe). About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LIFEPOINT HOSPITALS: Moody's Affirms Ba2 CFR After Loan Upsizing ---------------------------------------------------------------- Moody's Investors Service affirmed the existing ratings of LifePoint Hospitals, Inc., including the Ba2 Corporate Family Rating and Ba2-PD Probability of Default Rating, following the upsizing of the company's new term loan B to $325 million from $225 million. Moody's also upgraded LifePoint's Speculative Grade Liquidity Rating to SGL-1 from SGL-2. The outlook for the ratings remains stable. The increase in the term loan above the $225 million needed to refinance the company's 3.25% convertible subordinated notes will modestly increase leverage. However the company's liquidity profile is strengthened through the $100 million increase in available cash and the elimination of any uncertainty around the potential for the convertible subordinated notes to be put back to the company and the company's ability to fund the tender for the notes. Under the terms of the indenture, the notes are puttable back to the company on March 2013. LifePoint has announced a tender for the notes prior to the put date. Following is a summary of Moody's rating actions. Ratings affirmed / LGD assessments revised: Senior secured revolving credit facility expiring 2017, at Ba1 (LGD 3, 36%) from Ba1 (LGD 3, 31%) Senior secured term loan A due 2017, at Ba1 (LGD 3, 36%) from Ba1 (LGD 3, 31%) Senior secured term loan B due 2017, at Ba1 (LGD 3, 36%) from Ba1 (LGD 3, 31%) 6.625% senior unsecured notes due 2020, at Ba1 (LGD 3, 36%) from Ba1 (LGD 3, 31%) 3.25% convertible senior sub notes due 2025, at Ba3 (LGD 5, 85%) from Ba3 (LGD 5, 84%) Corporate Family Rating, Ba2 Probability of Default Rating, Ba2-PD Ratings upgraded: Speculative Grade Liquidity Rating, to SGL-1 from SGL-2 Ratings Rationale: LifePoint's Ba2 Corporate Family Rating reflects Moody's expectation that the company's operating performance will result in strong interest coverage and cash flow coverage of debt. Leverage is expected to remain moderate and could increase modestly as the company pursues acquisitions and share repurchase activity. The rating also incorporates Moody's expectation of a continuation of the difficult operating environment characterized by increasing reimbursement pressures and weak volume trends. Given the expectation that leverage will not likely decline meaningfully beyond current levels and could increase modestly, Moody's does not expect an upgrade in the near term. However, Moody's could upgrade the rating if the company grows earnings through acquisitions that do not significantly disrupt operations or require a material use of incremental debt, such that debt to EBITDA is sustained at or below 3.0 times. Moody's could downgrade the rating if it believes LifePoint's financial policy is becoming more aggressive and it pursues debt financed acquisitions or share repurchases or if the company experiences operating challenges such that leverage is expected to approach 4.0 times. The principal methodology used in this rating was the Global Healthcare Service Providers Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Brentwood, Tennessee, LifePoint operates general acute care hospitals with operations predominantly in non-urban communities. The company generated revenue of approximately $3.9 billion, before considering the provision for doubtful accounts ($3.3 billion net of the provision), for the twelve months ended September 30, 2012. LODGENET INTERACTIVE: Obtains Approval for KCC as Claims Agent -------------------------------------------------------------- LodgeNet Interactive Corporation and its affiliates sought and obtained Bankruptcy Court approval to appoint Kurtzman Carson Consultants LLC as claims and noticing agent in their Chapter 11 cases. Although the Debtors have not yet filed their schedules of assets and liabilities, they anticipate that there will be in excess of 10,000 entities to be noticed. In view of the number of anticipated claimants and the complexity of the Debtors' businesses, the appointment of a claims and noticing agent is both necessary and in the best interests of both the Debtors' estates and their creditors. The Debtors have obtained and reviewed engagement proposals from three court-approved claims and noticing agents to ensure selection through a competitive process. On account of its consulting services, KCC personnel will charge based on these rates" Position Hourly Rate -------- ----------- Clerical $28 to $42 Project Specialist $56 to $98 Technology/Programming Consultant $70 to $140 Consultant $87 to $140 Senior Consultant $157 to $193 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. Prior to the Petition Date, the Debtors provided KCC a retainer in the amount of $25,000. 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. As of Sept. 30, 2012, LodgeNet, on a consolidated basis, reported $292 million in assets and $449 million in liabilities. LodgeNet Interactive and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-10238) on Jan. 27, 2013, with a prepackaged Chapter 11 plan of reorganization. The plan extends the maturity date and modifies a $332.6 million term loan and $21.5 million revolver. Colony Capital, LLC, is acquiring 100% of the new shares of the reorganized company for $60 million. Weil, Gotshal & Manges LLP serves as counsel to the Debtors; Leonard Street and Deinard is the co-counsel; Miller Buckfire & Co., LLC and Moorgate Bankers are the investment banker; FTI Consulting, Inc. is the financial advisor; and Kurtzman Carson Consultants is the claims and notice agent. LODGENET INTERACTIVE: Taps Deloitte as Tax Advisor -------------------------------------------------- LodgeNet Interactive Corporation and its affiliated debtors filed an application to employ Deloitte Tax LLP as tax advisor, effective as of Feb. 1, 2013. The services to be performed by Deloitte pursuant to the engagement letter include, but are not limited to: a. Advise the Debtors and work with the Debtors' counsel and the Debtors' financial advisors on the proposed cash investment by the Investors, including tax effects of the proposed investment as planned in the bankruptcy plan of reorganization; b. Advise the Debtors on the cancellation of debt income for tax purposes under Internal Revenue Code section 108; c. Advise the Debtors on post-bankruptcy tax attributes (tax basis In assets, tax basis in subsidiary stock and net operating loss carryovers) available under the applicable tax regulations and the reduction of such attributes based on the Debtors' operating projections, including a technical analysis of the effects of Treasury Regulation Section 1.1502-28 and the interplay with IRC sections 108 and 1017; d. Advise the Debtors on the effects of tax rules under IRC sections 382(l)(5) and (l)(6) pertaining to the post-bankruptcy net operating loss carryovers and limitations on their utilization and the Debtors' ability to qualify for IRC section 382(l)(5); e. Advise the Debtors on net built-in gain or net built-in loss position at the time of the proposed Investors' investment and resulting "ownership change" (as defined under IRC section 382), including limitations on use of tax losses generated from post- restructuring or post-bankruptcy asset or stock sales; f. Advise the Debtors as to the proper state and federal income tax treatment of pre-petition and post-petition reorganization costs including restructuring-related professional fees and other costs, the categorization and analysis of such costs, and the technical positions related thereto; g. Advise the Debtors in the Debtors' evaluation and modeling of the effects of liquidating, disposing of assets, merging or converting entities as part of the restructuring, including the effects on federal and state tax attributes, state incentives, apportionment and other tax planning; h. Advise the Debtors on state income tax treatment and planning for bankruptcy provisions in various jurisdictions including cancellation of indebtedness calculation, adjustments to tax attributes and limitations on tax attribute utilization; i. Advise the Debtors on income tax return reporting of bankruptcy issues and related matters; j. Advise the Debtors in their review and analysis of the tax treatment of items adjusted for financial reporting purposes as a result of "fresh start" accounting as required for the emergence date of the U.S. financial statements in an effort to identify the appropriate tax treatment of adjustments to equity, and other tax basis adjustments to assets and liabilities recorded; k. Document, as appropriate, the tax analysis, development of the Debtors' opinions, recommendation, observations, and correspondence for any proposed restructuring alternative tax issue or other tax matter; l. Advise the Debtors regarding other state or federal income tax questions that may arise in the course of this engagement, as requested by the Debtors, and as may be agreed to by Deloitte Tax; m. Advise the Debtors in the Debtors' efforts to determine tax basis in the stock in each of the Debtors' subsidiaries or other entity interests; and n. Advise the Debtors regarding additional deductions resulting from the bankruptcy filing, including but not limited to, the deductibility of issuing warrants to DIRECTV or other creditors. The Debtors will compensate Deloitte Tax based on the amount of professional time required and the hourly rates, which vary depending upon the experience level of the professionals involved: Personnel Classification Hourly Rates ------------------------ ------------ Partner/Principal $650 Director $595 Senior Manager $460 Manager $375 Consultant $275 Prior to the Petition Date, Deloitte Tax received total fees of $250,637 for October 2012 through January 2013. Based on the declaration of Deloitte partner Scott Vickman, the firm is a "disinterested person," as such term is defined in section 101(14) of the Bankruptcy Code and as required under section 327(a) of the Bankruptcy Code. 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. As of Sept. 30, 2012, LodgeNet, on a consolidated basis, reported $292 million in assets and $449 million in liabilities. LodgeNet Interactive and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-10238) on Jan. 27, 2013, with a prepackaged Chapter 11 plan of reorganization. The plan extends the maturity date and modifies a $332.6 million term loan and $21.5 million revolver. Colony Capital, LLC, is acquiring 100% of the new shares of the reorganized company for $60 million. Weil, Gotshal & Manges LLP serves as counsel to the Debtors; Leonard Street and Deinard is the co-counsel; Miller Buckfire & Co., LLC and Moorgate Bankers are the investment banker; FTI Consulting, Inc. is the financial advisor; and Kurtzman Carson Consultants is the claims and notice agent. LODGENET INTERACTIVE: Miller Buckfire Tapped as Investment Banker ----------------------------------------------------------------- LodgeNet Interactive Corporation and its affiliates ask the Bankruptcy Court for permission to employ Miller Buckfire & Co., LLC as financial advisor and investment banker. In preparation for the Chapter 11 Cases, Miller Buckfire conducted a thorough process to secure DIP Financing on behalf of the Debtors on the best terms commercially available. In the pendency of the Chapter 11 case, Miller Buckfire will provide a broad range of necessary financial advisory and investment banking services, including, but not limited, to: a. familiarize itself with the business, operations, properties, financial condition and prospects of the Company; b. if the Company determines to undertake an amendment to the credit agreement dated April 4, 2007, financing, restructuring and/or sale, advise and assist the Company in structuring and effecting the financial aspects of a transaction or transactions, c. provide financial advice and assistance to the Company in developing, structuring and seeking approval of an Amendment; d. if requested by the Company, assist the Company and/or participate in negotiations with entities or groups affected by the Amendment; e. provide financial advice and assistance to the Company in structuring and effecting a Financing, identify potential Investors and, at the Company's request, contact such Investors; f. assist the Company in developing and preparing a memorandum to be used in soliciting potential Investors; g. if requested by the Company, assist the Company and/or participate in negotiations with potential Investors; h. provide financial advice and assistance to the Company in developing and seeking approval of a restructuring plan, which may be a plan under chapter 11 of title 11 of the United States Code, 11 U.S.C. Sec. 101 et. seq.; i. if requested by the Company, provide financial advice and assistance to the Company in structuring any new securities to be issued under the Plan; j. if requested by the Company, assist the Company and/or participate in negotiations with entities or groups affected by the Plan; k. if requested by the Company, participate in hearings before the bankruptcy court with respect to the matters upon which Miller Buckfire has provided advice; l. provide financial advice and assistance to the Company in connection with a Sale, identify potential acquirors and, at the Company's request, contact such potential acquirors; m. at the Company's request, assist the Company in preparing a memorandum to be used in soliciting potential acquirors; and n. if requested by the Company, assist the Company and/or participate in negotiations with potential acquirors. The parties have agreed to this compensation structure: 1. Monthly Fee: A monthly financial advisory fee of $75,000, which shall be due and paid by the Company upon the signing of the Engagement Letter and thereafter on the 16th day of each month during the term of this engagement. 2. Limited Amendment Fee: A fee, contingent upon entering into a waiver or modification of the financial covenants of the Credit Agreement during the term of the engagement or within the twelve full months following the termination of the engagement and payable at the execution and delivery thereof, equal to $500,000 3. Material Amendment Fee: A fee, contingent upon entering into an amendment that extends the date of the Credit Agreement at any time during the Fee Period and payable at the execution and delivery thereof, equal to $950,000. 4. Restructuring Transaction Fee: A fee, contingent upon (x) the consummation of any Restructuring or (y)(1) the entering into of an agreement in principal, definitive agreement or Plan to effect a Restructuring and (2) concurrently therewith or at any time thereafter, the consummation of any Restructuring, and payable at the closing thereof, equal to $2,500,000. 5. Financing Fee: Fees in respect of any financing payable upon closing equal to: (i) 1.0% of the gross proceeds of any indebtedness issued that is secured by a first lien; (ii) 1.5% of the gross proceeds of any indebtedness issued that is secured by a second or more junior lien; (iii) 3.0% of the gross proceeds of any unsecured or subordinated debt, or equity or equity-linked securities or obligations issued. 6. Sale Transaction Fee: A fee, contingent upon (x) the consummation of any Sale or (y)(1) the entering into of an agreement in principal, definitive agreement to effect a Sale and (2) concurrently therewith or at any time thereafter, the consummation of any Sale, and payable at the closing thereof, equal to $2,500,000. 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. As of Sept. 30, 2012, LodgeNet, on a consolidated basis, reported $292 million in assets and $449 million in liabilities. LodgeNet Interactive and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-10238) on Jan. 27, 2013, with a prepackaged Chapter 11 plan of reorganization. The plan extends the maturity date and modifies a $332.6 million term loan and $21.5 million revolver. Colony Capital, LLC, is acquiring 100% of the new shares of the reorganized company for $60 million. Weil, Gotshal & Manges LLP serves as counsel to the Debtors; Leonard Street and Deinard is the co-counsel; Miller Buckfire & Co., LLC and Moorgate Bankers are the investment banker; FTI Consulting, Inc. is the financial advisor; and Kurtzman Carson Consultants is the claims and notice agent. LODGENET INTERACTIVE: Equity Trading Rules Has Interim OK --------------------------------------------------------- LodgeNet Interactive Corporation and its affiliated debtors obtained interim approval of its request to establish procedures to protect the potential value of their consolidated net operating loss carryforwards -- NOLs -- and certain other tax attributes by restricting certain transfers of equity securities in the Debtors. A final hearing on the proposed procedures is slated for Feb. 27 at 10:00 a.m. Eastern Time. Objections are due Feb. 20. The proposed procedures are applicable to the equity securities of LodgeNet. Moreover, the relief requested is narrowly tailored to only restrict trading that could jeopardize LodgeNet's NOLs. Other trading will not be affected. The Debtors estimate that they have incurred, for U.S. federal income tax purposes, consolidated NOLs in an approximate amount of $630 million. Sections 382 and 383 of the Tax Code limit a corporation's use of its NOLs and certain other tax attributes to offset future income or tax after the corporation experiences an "ownership change." Unrestricted trading of shares could adversely affect the Debtor's NOLs if (a) too many 5% or greater blocks of stock are created, or (b) too many shares are added to or sold from those blocks. At least 21 calendar days prior to the proposed date of any transfer of equity securities that would result in an entity becoming a substantial equity holder (owner of 4.5% of the total outstanding shares), the entity must file with the Court a notice of intent to purchase shares. Substantial equity holders intending to dispose of shares that would result in a person or entity ceasing to be a substantial equity holder, the entity must file a notice of intent to sell 21 days before the proposed date of the transaction. 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. As of Sept. 30, 2012, LodgeNet, on a consolidated basis, reported $292 million in assets and $449 million in liabilities. LodgeNet Interactive and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-10238) on Jan. 27, 2013, with a prepackaged Chapter 11 plan of reorganization. The plan extends the maturity date and modifies a $332.6 million term loan and $21.5 million revolver. Colony Capital, LLC, is acquiring 100% of the new shares of the reorganized company for $60 million. Weil, Gotshal & Manges LLP serves as counsel to the Debtors; Leonard Street and Deinard is the co-counsel; Miller Buckfire & Co., LLC and Moorgate Bankers are the investment banker; FTI Consulting, Inc. is the financial advisor; and Kurtzman Carson Consultants is the claims and notice agent. MARTIN FOREST: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Martin Forest Partners, LLC 788 Prickett Lane Douglasville, GA 30134-4681 Bankruptcy Case No.: 13-52157 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Marilyn S. Bright, Esq. P.O. Box 845 Atlanta, GA 30301 Tel: (404) 523-3776 E-mail: sandyscamp@37.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 Debra M. Tufan, managing member. MEDICAL ALARM: Expects to be Profitable in Fiscal Third Quarter --------------------------------------------------------------- Medical Alarm Concepts, Inc., CEO, Ronnie Adams, held a conference call on Jan. 31, 2013, to update investors on corporate activities. Due to technical difficulties on the call, some investors who dialed into the call may have missed sections of the call or the entire call. The Company provided with the U.S. Securities and Exchange Commission the script of Mr. Adams's comments to insure all investors have equal access to the information provided. "...I am happy to say that today Medical Alarm Concepts is experiencing a robust growth rate, quality relationships with quality customers, a significantly improved balance sheet - and most importantly - the company has now reached operational positive cash flow status," Mr. Adams said. "Simply put - we are now operating in the black for the first time in our company history." The CEO also talked about Company history, the specific actions and programs the Company has put in place to restore the company to a robust revenue growth rate and move the Company into positive cash flow status, the contracts on which the Company is currently bidding, the unique features of the Company's product, and the Company's financials. The Company expects to be profitable on operating cash flow basis beginning this quarter - that being the March 2013 quarter, which is the Company's fiscal Q3. The script of the conference call is available for free at: http://is.gd/gyebGX About Medical Alarm Plymouth Meeting, Pa.-based Medical Alarm Concepts Holding, Inc., utilizes new technology in the medical alarm industry to provide 24-hour personal response monitoring services and related products to subscribers with medical or age-related conditions. The Company's balance sheet at March 31, 2011, showed $1.40 million in total assets, $3.41 million in total liabilities, and a $2 million total stockholders' deficit. As of March 31, 2011, the Company had $0 in cash. The Company said in its quarterly report for the period ended March 31, 2011, "We believe we cannot satisfy our cash requirements for the next twelve months with our current cash and, unless we receive additional financing, we may be unable to proceed with our plan of operations. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of our employees. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. Additional funds are required, and unless we receive proceeds from financing, we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we will suspend or cease operations." "We anticipate incurring operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern." The Company has not filed its succeeding financial reports after the March 31, 2011, Form 10-Q. METRO FUEL: Shouldn't Liquidate, Unsecured Creditors Say -------------------------------------------------------- Eric Hornbeck of BankruptcyLaw360 reported that Metro Fuel Oil Corp.'s unsecured creditors objected Monday to New York Commercial Bank's calls for liquidation of the bankrupt Brooklyn-based fuel supplier just as the company is slated to go on the auction block. The unsecured creditors committee said in a brief objection that it didn't believe the company's ongoing reorganization should be converted to a liquidation, despite the bank's assertion that it is unlikely to reorganize itself successfully or repay $41.3 million in debt, the report related, citing court documents. 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: SIPA Trustee's Claims Review "Substantially Complete" ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports the trustee for MF Global Inc., the liquidating commodity broker, reported that the determinations on 27,000 customer claims for $10 billion are "substantially complete." The report was filed in U.S. Bankruptcy Court in New York by James Giddens, the trustee for the MF Global broker appointed under the Securities Investor Protection Act. Mr. Giddens said he has finally dealt with 99.7% of retail customer claims for $6.4 billion. There are only five claims where objections are pending in bankruptcy court. According to the report, for securities claims, 95% have been finally determined. Mr. Giddens, the report relates, is now in the process of dealing with the 6,700 general creditor claims filed seeking $22.8 billion. He said that he has already knocked out $11.7 billion in general claims. The Commodity Futures Trading Commission is holding a hearing about regulations to foster greater protection of customers. Mr. Giddens makes distributions to customers and eventually to general creditors without need for proposing a plan because the broker is liquidated under the Securities Investor Protection Act, not the U.S. Bankruptcy Code. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was 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 also was 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. 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. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. 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. MF GLOBAL: Ch. 11 Trustee Joins Creditors in Proposed Plan ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Louis Freeh, the trustee for MF Global Holdings Ltd., the parent of the liquidating commodity broker, decided to join rather than fight creditors who filed a liquidating Chapter 11 plan in January. Mr. Freeh and the creditors filed a jointly proposed plan on Feb. 2, refining projections made by the creditors last month about their recoveries. With the benefit of non-public information unavailable to creditors when they filed the plan, the joint disclosure statement predicts a recovery of 13.4% to 38.9% for holders of $1.16 billion in unsecured claims against the parent holding company. Bank lenders would have the same recovery on their $1.15 billion claim against the holding company. The predicted recovery is 14.2% to 33.6% for holders of $1.9 billion in unsecured claims against MF Global Finance USA Inc., one of the companies under the umbrella of the holding company trustee. Bank lenders are scheduled for the same percentage recovery on their $1.15 billion claim. The report notes the plan deals only with creditors of the holding company, not customers and creditors of the brokerage. The report recounts the creditors were entitled to file a plan in January because Mr. Freeh's appointment as a Chapter 11 trustee automatically ended the company's exclusive right to propose a plan. The creditors who filed the plan in January said they hold $1.82 billion in claims. The plan takes into account the settlement announced in December among the MF Global parent, the brokerage subsidiary, and the U.K. affiliate. The settlement with the U.K. affiliate was approved last week in bankruptcy court. The MF Global Inc. brokerage is under control of James Giddens, a separate trustee appointed under the Securities Investor Protection Act. Creditors proposing the plan last month included Deutsche Bank Securities Inc., an affiliate of Citigroup Inc., Knighthead Master Fund LP, Royal Bank of Scotland Plc, an affiliate of Blue Mountain Capital Inc. and Waterstone Capital Management LP. The creditors previously arranged a Feb. 14 hearing for approval of the disclosure statement explaining the plan. The creditors wanted the judge to scheduled a confirmation hearing on March 29 for approval of the plan. The recovery by creditors of the holding company is largely based on the estimated distributions by the brokerage subsidiary to the holding company. The starting point is a judgment that customers of the brokerage will at most have a $6 million loss on the low side to a surplus of as much as $120 million on the high side. Previously, the creditors were estimating that the maximum surplus would be $156 million. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was 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 also was 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. 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. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. 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. MF GLOBAL: Customers to Get Most of Their Money Back ---------------------------------------------------- Reuters reported that former customers of Jon Corzine's collapsed brokerage MF Global would recover most, and probably all, of their money under the latest projections by the trustee liquidating its bankrupt parent company. In a court filing late on Friday, trustee Louis Freeh, the former FBI chief, outlined an amended version of a plan for how to divvy up MF Global's assets and distribute them among various creditor classes, Reuters said. Freeh projected MF Global's U.S. broker-dealer unit could have up to a $120 million surplus, which would mean full payback for the traders whose money was frozen when the brokerage went bankrupt in October 2011 but Freeh also said the broker-dealer unit could wind up with a $6 million shortfall, Reuters related. While that is a small number in the context of the $1.6 billion hole customers were thought to face at the beginning of the case, and one that could likely be bridged through other sources of recovery, it is a less certain forecast than the version of the payout plan released last month. In that plan, issued by a group of unsecured creditors led by Silver Point Capital, Knighthead Capital and Cyrus Capital Partners, customers were slated to receive "payment in full," Reuters further related. The proposal from Freeh on Friday, released in cooperation with the Silver Point group, incorporated more recent financial data, Reuters said. In addition to conceding a possible deficit at the broker-dealer, the latest plan narrows recovery ranges for holders of MF Global's $2.2 billion in unsecured claims. Such creditors, which include the Silver Point group, are now projected to recover between 13.4 percent and 38.9 percent of claims, a range that had been pegged at between 11.5 percent and 41.5 percent in the earlier plan. Reuters also noted that the updated proposal specifies that lender JPMorgan Chase & Co will recover all of its roughly $7.8 million in secured setoff claims against MF Global units, and that an unsecured liquidity facility, for which JPMorgan was a key lender, will recover between 13.4 and 38.9 percent of its $1.15 billion claim. Recovery estimates are conservative, Brett Miller, a lawyer for Freeh, told Reuters. The amended plan represents the first time Freeh has publicly laid out creditor payback projections since MF Global declared bankruptcy, according to Reuters. MF Global was led by former New Jersey Governor and Goldman Sachs Group Inc chief Corzine, who resigned shortly after the collapse, Reuters recalled. Corzine remained in the spotlight due to regulators' discovery that MF Global improperly used customer money to plug liquidity gaps, leading to a $1.6 billion shortfall in customer accounts. Corzine has denied any wrongdoing, and has not faced criminal charges. He and other former executives face breach of fiduciary duty and other civil claims from former customers. The plan, according to Reuters, is slated to go before Judge Martin Glenn in U.S. Bankruptcy Court in Manhattan for approval on Feb. 14. Reuters noted that Freeh's latest projections follow a deal reached in December between Freeh and the trustees representing MF Global's U.S. and British brokerage customers. That deal was approved by Glenn on Thursday. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was 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 also was 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. 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. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. 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. MICRON TECHNOLOGY: S&P Rates Sr. Convertible Notes Due 2033 'BB-' ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue-level rating to U.S. memory semiconductor provider Micron Technology Inc.'s proposed senior unsecured convertible notes due 2033. The recovery rating is '3', reflecting S&P's expectation for meaningful (50% to 70%) recovery for senior unsecured debtholders in the event of default. The corporate credit rating on the company is 'BB-' with a negative outlook. The proposed notes will rank equally with all of Micron's existing and future senior unsecured debt. The company has earmarked the use of proceeds from this offering to redeem a portion of its outstanding convertible notes due 2014. Consequently, S&P considers these new notes as a prefunding transaction and not as an incremental increase to leverage. "Over the coming year, we expect Micron to incur higher costs to integrate Elpida, which should consume a portion of cash balances. However, we expect EBITDA, which declined about 30% year over year for the 12 months ended November 2012, to recover much of the decline in 2013, supported by industry demand for wireless device flash memory, solid state drive (SSD) spending, and DRAM sector consolidation. Consequently, we expect Micron's ratio of debt to EBITDA, which represented 2.5x as of the November quarter, to improve over the coming year. In line with our expectations for highly variable operating trends, we expect credit measures to vary widely over a cycle," S&P said. The rating on Micron Technology Inc. reflects S&P's expectation that the semiconductor memory sector will remain highly volatile and the company will continue to incur significant capital spending to increase capacity. Consequently, S&P views Micron's business risk profile as "weak". The company's weak free cash flow characteristics contribute to S&P's view of the company's financial risk profile as "significant," despite its ratio of debt to EBITDA, which S&P expects to remain strong for the rating category. S&P views Micron's liquidity as "adequate". Cash and marketable investments amounted to about $2.7 billion as of Nov. 29, 2012, and S&P expects these amounts to decline over the coming year, considering S&P's estimates for costs to acquire and integrate Elpida. The negative outlook reflects weak conditions in certain memory markets, as well as the possibility for increased costs and investment requirements for Micron to acquire and integrate Elpida Memory's business from court-appointed trustees. If revenue and earnings performance stabilize in Micron's fiscal 2013 and Elpida- related spending remains measured, such that leverage does not increase materially from current levels, S&P could revise the outlook to stable. Conversely, if Elpida spending or volatile market conditions result in a persistence of weak or negative free cash flow and leverage approaches 3x or more, S&P could lower the ratings. RATINGS LIST Micron Technology Inc. Corporate Credit Rating BB-/Stable/-- New Rating Micron Technology Inc. Senior Unsecured $220 Mil. Conv. Notes Series E Due 2033 BB- Recovery Rating 3 $220 Mil. Conv. Notes Series F Due 2033 BB- Recovery Rating 3 MSR RESORT: Parties Await Plan Confirmation Ruling -------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that MSR Resort Golf Course LLC on Monday urged a New York bankruptcy judge to ignore protests from an alternative investment fund that claims its Chapter 11 plan is unconfirmable, hoping to remove one of the last remaining roadblocks to a $1.5 billion asset sale that will end its bankruptcy. On the first day of the resort owner's reorganization plan confirmation hearing, attorneys for MSR refuted Five Mile Capital Partners LP's claims surrounding an extra $331 million tax liability attached to the proposed sale, the report related. BLaw said in a new report that the bankruptcy judge on Tuesday put off a ruling on MSR's Chapter 11 reorganization plan, following a second day of lengthy testimony that included vigorous opposition from a private equity fund. At the end of the day, U.S. Bankruptcy Judge Sean H. Lane said he would not have a ruling before Thursday after having spent hours listening to alternative investment fund Five Mile Capital Partners LP and the resort owner, the report related. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owned a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. The Official Committee of Unsecured Creditors is represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. MUTUAL BANK: 7th Circ. Backs FDIC Win in Exec's $30M Suit --------------------------------------------------------- Sindhu Sundar of BankruptcyLaw360 reported that the Seventh Circuit on Monday affirmed a lower court's dismissal of claims by the former chairman of Mutual Bank against the Federal Deposit Insurance Corp. over roughly $30 million that he claimed he and his family is owed after the now-defunct bank slipped into insolvency. A three-judge panel found that the Administrative Procedure Act claims by former Mutual Bank Chairman Pethinaidu Veluchamy and his family are barred because they are seeking money damages and noted that the APA bars such suits, the report related. N & G PRO: Case Summary & 6 Largest Unsecured Creditors ------------------------------------------------------- Debtor: N & G Pro, LLC dba Oasis Carwash fdba Mr. Clean Carwash 3320 Buford Highway Cumming, GA 30041 Bankruptcy Case No.: 13-20343 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Northern District of Georgia (Gainesville) Judge: Robert Brizendine Debtor's Counsel: G. Frank Nason, IV, Esq. LAMBERTH, CIFELLI, STOKES, ELLIS & NASON, P.A. 3343 Peachtree Road, NE, Suite 550 Atlanta, GA 30326 Tel: (404) 262-7373 E-mail: gfn@lcsenlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its six unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ganb13-20343.pdf The petition was signed by Nan K. Ha Eivich, majority member. NATIONAL MENTOR: S&P Retains 'B+' Rating on $550MM Term Loan ------------------------------------------------------------ Standard & Poor's Ratings Services said that its ratings on U.S. behavioral health care provider National Mentor Holdings Inc. are unaffected by the company's planned term loan B-1 add-on of $30 million. The issue-level rating on the now $550 million term loan B-1 remains 'B+', with a recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of a default. The company amended its existing credit agreement to allow for the add-on. The company will use proceeds to pay down its outstanding revolver balance. The additional term loan debt does not significantly affect National Mentor's credit measures, and S&P expects cushions on debt covenants to remain around 19%. The corporate credit rating on National Mentor is 'B' and the rating outlook is stable. The rating reflects S&P's view of National Mentor's financial risk profile as "highly leveraged," supported by a debt-to-EBITDA ratio of well over 7x and funds from operations of less than 10%. The company's "weak" business risk profile continues to reflect its significant exposure to reimbursement risk and the fragmented and competitive nature of the behavioral health industry. RATINGS LIST National Mentor Holdings Inc. Corporate Credit Rating B/Stable/-- Ratings Unchanged National Mentor Holdings Inc. $550M term loan B-1* B+ Recovery Rating 2 * Includes $30 million add-on. NATIONSTAR MORTGAGE: Moody's Cuts CFR to 'B2'; Outlook Stable ------------------------------------------------------------- Moody's Investors Service has affirmed Nationstar Mortgage LLC's B2 senior unsecured debt rating. In addition, Moody's downgraded the company's corporate family rating to B2 from B1. The outlook was changed to stable from negative. Ratings Rationale: The downgrade of the corporate family rating to B2 from B1 reflects the company's extremely rapid growth funded almost entirely with opportunistic bulk servicer right acquisitions. In affirming the senior unsecured debt rating at B2, the previous one-notch decrement from the company's corporate family rating was eliminated. The change results from Moody's application of the notching framework included in "Finance Company Global Rating Methodology," published in March 2012. The senior unsecured debt is Nationstar's only class of non-recourse debt; as a result, the senior unsecured debt rating is equal to the corporate family rating. The B2 ratings also reflect the company's growing position in the U.S. residential mortgage servicing market, its good track record of acquiring and integrating residential mortgage servicers as well as the company's financial leverage. The company's financial leverage (e.g. corporate debt-to-equity and corporate debt-to- EBITDA) is higher than Ocwen Financial Corporation's (B1 stable) and moderately lower than Walter Investment Management Corp's (B2 stable), both of which are mortgage servicing peers of Nationstar. The change in outlook to stable from negative reflects Moody's expectation that Nationstar will be able to maintain its solid servicing performance and reap the financial benefits of its much larger servicing portfolio. On February 4, 2013, Nationstar announced its intention to issue $400 million of senior unsecured debt to partially finance their $1.3 billion acquisition of mortgage servicer rights (MSR) on approximately 1.3 million loans from Bank of America (BAC). Upon completion of the $400 million unsecured debt offering, the company's total unsecured debt will be $1.462 billion or 2.1x the company's $691 million of reported equity as of September 30, 2012. The ratings could be upgraded if the company demonstrates sustainable improvement in its financial performance, such as achieving a corporate debt-to-equity ratio of less than 1.5x, outstanding corporate debt to company reported actual adjusted EBITDA of less than 2.0x, and quarterly GAAP net income of more than $50 million; all while maintaining its solid servicing performance and solid franchise value. The ratings could be downgraded if the company's financial performance materially deteriorates, such as if the company's corporate debt-to-equity ratio increases above 2.5x, outstanding corporate debt to company reported actual adjusted EBITDA ratio increases above 3.5x, quarterly GAAP income of less than $25 million or if servicing performance deteriorates, particularly if as a result the company's franchise value weakens. The principal methodology used in this rating was Finance Company Global Rating Methodology published in March 2012. Nationstar, headquartered in Lewisville, Texas, is a non-bank residential mortgage servicer that also originates conventional agency and government residential mortgages. NATURAL PORK: Hiring Variant Capital as Investment Banker --------------------------------------------------------- Natural Pork Production II, LLP, asks the Bankruptcy Court for authorization to employ Variant Capital Advisors LLC as its Investment Banker in its Chapter 11 case and in the Chapter 11 cases of its affiliated debtors Brayton LLC, Crawfordsville, LLC, and South Harlan, LLC. Variant Capital will assist the Debtors with strategic advisory services in connection with the auction and sale of several of their operating assets. Variant Capital's employment will be effective as of Jan. 4, 2013. As compensation, Variant Capital will receive: -- A non-refundable initial payment of $25,000; -- A non-refundable monthly fee of $25,000, commencing one month after receipt of the initial payment. Variant Capital will not be entitled to any more than three (3) monthly fees and the third monthly fee paid will be applied to any Sale Fee earned; plus -- Upon the closing of a sale transaction, the Debtors will pay a Sale Fee equal to thirty percent (30%) of the aggregate Enterprise Value (as defined in the Engagement Letter Agreement) of the transaction in excess of $20 million. Variant Capital believes that it is a disinterested person as that term is defined in Bankruptcy Code Section 101(14). About Natural Pork Production II Hog raiser Natural Pork Production II, LLP filed for Chapter 11 bankruptcy (Bankr. S.D. Iowa Case No. 12-02872) on Sept. 11, 2012, in Des Moines. The Company formerly did business as Natural Pork Production, LLC. It does business as Crawfordsville, LLC, Brayton, LLC, South Harlan, LLC, and North Harlan, LLC. The Debtor disclosed $31.9 million in asset and $27.9 million in liabilities, including $7.49 million of secured debt in its schedules. Bankruptcy Judge Anita L. Shodeen oversees the case. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., in Des Moines, Iowa, represent the Debtor as general reorganization counsel. John C. Pietila, Esq., at Davis, Brown, Koehn, Shors & Roberts, P.C., in West Des Moines, Iowa, represents the Debtor as special corporate counsel, effective as of the Petition Date. Aaron L Hammer, Esq., Mark S. Melickian, Esq., and Michael A. Brandess, Esq., at Sugar, Felsenthal Grais & Hammer LLP, in Chicago, represent the Official Committee of Unsecured Creditors. Conway MacKenzie, Inc., serves as its financial advisor. Gary W. Koch, Esq., and Michael S. Dove, Esq., represent AgStar Financial Services, ACA, and AgStar Financial Services, FLCA, as counsel. Michael P. Mallaney, Esq., at Hudson Mallaney Schindler & Anderson, in West Des Moines, Iowa, represent the IC Committee as counsel. NEW ENGLAND COMPOUNDING: Retains DRC as Claims & Balloting Agent ---------------------------------------------------------------- Donlin, Recano & Company, Inc. has been retained as claims, noticing and balloting Agent in New England Compounding Pharmacy, Inc. Chapter 11 case. Framingham, Massachusetts based New England Compounding Pharmacy, Inc. filed for Chapter 11 in the United States Bankruptcy Court for the District of Massachusetts. The case will center on tort claimants as a result of alleged product liability issues. Debtor's counsel is Murtha Cullina LLP, Boston, Massachusetts. About Donlin Recano Donlin Recano -- http://www.donlinrecano.com-- is a division of DF King Worldwide -- http://www.king?worldwide.com -- and a provider of claims, noticing, balloting and technology solutions. It also provides bondholder identification services, pre?pack bankruptcy solicitation and balloting, crisis communications, financial printing services and call center services through one of the largest and most technologically advanced call centers in the country. King Worldwide is a financial communications, proxy solicitation and stakeholder management company, serving over 1,000 public company, mutual fund family and private equity firm clients domiciled in North America, Europe and Asia. About New England Compounding New England Compounding Pharmacy Inc., filed a Chapter 11 petition (Bankr. D. Mass. Case No. 12-19882) in Boston on Dec. 21, 2012. Daniel C. Cohn, Esq., at Murtha Cullina LLP, serves as counsel. Verdolino & Lowey, P.C. is the financial advisor. The Debtor estimated assets and liabilities of at least $1 million. The Debtor owns and operates the New England Compounding Center is located in Framingham, Mass. The company said at the outset of bankruptcy that it would work with creditors and insurance companies to structure a Chapter 11 plan dealing with personal injury claims. The outbreak linked to the pharmacy has killed 39 people and sickened 656 in 19 states, though no illnesses have been reported in Massachusetts. In October, the company recalled all its products, not just those associated with the meningitis outbreak. An official unsecured creditors' committee was formed to represent individuals with personal-injury claims. The members selected Brown & Rudnick LLP to be the committee's lawyers. NICHOLAS HAMIC: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Nicholas Hamic Ventures, LLC fka Exit Realty of Lakeland, LLC dba Exit Realty of Lakeland 1715 S. Florida Avenue Lakeland, FL 33803 Bankruptcy Case No.: 13-01444 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. 115 N. MacDill Avenue Tampa, FL 33609-1521 Tel: (813) 877-4669 Fax: (813) 877-5543 E-mail: Buddy@tampaesq.com Scheduled Assets: $954,772 Scheduled Liabilities: $1,428,463 A copy of the Company's list of its 13 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb13-01444.pdf The petition was signed by William L. Nicholas, managing member. NIFTUS LLC: Court Coverts Case to Chapter 7 Liquidation ------------------------------------------------------- The Bankruptcy Court converted Niftus LLC's Chapter 11 case to a case under Chapter 7 of the Bankruptcy Code. W. Clarkson McDow, Jr., the United States Trustee for Region 4, sought the conversion. The U.S. Trustee said that given the speculative nature of the Debtor's income stream and the adversarial nature of the Debtor relationship with the other members of Royalpharm, LLC, it appears unlikely that the Debtor will be able to rehabilitate. About Niftus Niftus, LLC, filed a bare-bones Chapter 11 petition (Bankr. W.D. Va. Case No. 12-71123) on June 11 in Roanoke, Virginia. Niftus, a management consulting services provider from Bluefield, Virginia, estimated assets of up to $50 million and debts of less than $10 million. Chief Judge William F. Stone Jr. oversees the case. Copeland & Bieger, P.C., serves as the Debtor's counsel. W. Clarkson McDow, Jr., the U.S. Trustee for Region 4, has not appointed an unsecured creditors committee in the Chapter 11 case of Niftus, LLC. According to the statement, the number of persons eligible or willing to serve on such a committee is presently insufficient to form an unsecured creditors committee. The U.S. Trustee will appoint an unsecured creditors committee upon the request of an adequate number of unsecured creditors. NII HOLDINGS: S&P Assigns 'B-' Rating to $400MM Sr. Notes Due 2019 ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' issue-level rating and '4' recovery rating to NII Holdings Inc.'s (NII) proposed $400 million of senior notes due 2019. The notes are being issued by NII International Telecom S.C.A (NII International), a wholly owned subsidiary of NII. The '4' recovery rating indicates S&P's expectation for average (30% to 50%) recovery in the event of payment default. At the same time, S&P lowered the issue-level rating on NII Capital Corp.'s senior unsecured debt to 'CCC' from 'CCC+' and revised the recovery rating to '6', which indicates S&P's expectation for negligible (0% to 10%) recovery in the event of payment default, from '5'. The lower issue-level rating reflects diminished recovery prospects given the debt issuance at NII International, which is structurally senior to the debt at NII Capital. Proceeds from the new notes will be used to fund the expansion of NII's wireless networks, the acquisition of spectrum licenses, the deployment of 3G wireless technology in its markets, or the refinancing of existing debt. "Our 'B-' corporate credit rating and stable outlook are not affected by the new debt. Pro forma adjusted leverage is about 5x as of Sept. 30, 2012, though our rating on Reston, Va.-based NII already incorporates the expectation that leverage could approach 9x in 2013 because of substantially lower EBITDA and higher debt balances, including this new debt issue as well as the company's proposed tower sale leaseback transaction. However, for the current ratings we assume some moderation of leverage to about 6x by the end of 2015," S&P said. RATINGS LIST NII Holdings Inc. Corporate Credit Rating B-/Stable/-- New Rating NII International Telecoms S.C.A. $400 Mil. Senior Notes Due 2019 B- Recovery Rating 4 Downgraded; Recovery Rating Revised To From NII Capital Corp Senior Unsecured CCC CCC+ Recovery Rating 6 5 NNN PARKWAY: Breakwater Files Contempt-of-Court Motion v. LNR ------------------------------------------------------------- Breakwater Equity Partners on Feb. 6 disclosed that one of the owners of Parkway 400 has filed a motion to hold LNR Partners in contempt (case 8:12-bk-24593-TA). The motion, now pending before the US Bankruptcy Court in Santa Ana, alleges that LNR Partners, special servicer for the lender on the property, violated the automatic stay which went into effect when the Chapter 11 case was filed on December 31. Parkway 400 consists of two office buildings, with a total of 193,218 square feet, in Alpharetta, Georgia. It is owned by 35 tenant-in-common investors from across the United States. Despite the automatic stay, LNR Partners foreclosed against the interests of all of the owners except the debtor that filed Chapter 11. If approved, the motion filed with the bankruptcy court will void the foreclosure and put Parkway 400 back into the hands of the tenant- in-common owners. "This is an intentional violation of the automatic stay," said Phil Jemmett, Breakwater CEO. "LNR has repeatedly flouted the automatic stay provisions of the bankruptcy code. We believe that the court should address this ongoing pattern and practice of renegade behavior. The owners of this property are elderly investors who have been defrauded and are now being victimized a second time." "LNR's actions are outrageous," said Ralph Farinas, one of the tenant-in-common owners. "This is yet another example of the greedy behavior that has become so common with lenders. All we want is an opportunity to save our investment. Most of the investors are depending on this property to provide income for their golden years." The 35 tenant-in-common owners purchased Parkway 400 in 2007 for $33.85MM. According to Breakwater Equity Partners, the deal sponsor, Grubb & Ellis, told the mom-and-pop investors that Parkway 400 was a reliable investment that would produce solid dividend distributions. Grubb & Ellis failed to disclose material adverse information related to the investment. "We are confident that the debtor will prevail on this contempt of court motion," said Mr. Jemmett. "This issue has been litigated in other bankruptcies with LNR and it is clear that the law is well settled. Breakwater is committed to working with vulnerable investors to help protect their interests from predatory lenders." About Breakwater Equity Partners Breakwater Equity Partners -- http://www.breakwaterequity.com-- is a San Diego-based commercial real estate workout consultancy and investment firm. Through Breakwater's extensive experience on over 200 engagements with loan values in excess of a $3B, the firm has devised a unique, multidisciplinary approach to uncovering and resolving distressed assets. Breakwater's professional team combines legal, financial, economic, banking, tax, and regulatory expertise to devise customized strategies for each property regardless of market (primary to tertiary), asset class (office, retail, multi-family, industrial, flex, land) or loan type (portfolio or CMBS). For more information on Breakwater Equity Partners, please call 858-490-3630 or visit www.breakwaterequity.com . About NNN Parkway 400 NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-24593) in Santa Ana, California, on Dec. 31, 2012. According to the docket, the schedules of assets and liabilities, the statement of financial affairs and other incomplete filings are due Jan. 14, 2013. Dana Point, California-based NNN Parkway estimated assets and debts of $10 million to $50 million. OCALA FUNDING: Files Chapter 11 Litigation Plan ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Ocala Funding LLC, a subsidiary of previously bankrupt Taylor Bean & Whitaker Mortgage Corp., filed a proposed Chapter 11 plan to implement an agreement reached before bankruptcy in July by holders of almost all of Ocala's $1.5 billion in secured and $800 million in unsecured claims. According to the report, the plan will create a trust to prosecute lawsuits on behalf of creditors with more than $2.5 billion in claims. The explanatory disclosure statement will come up for approval at a March 6 hearing in U.S. Bankruptcy Court in Jacksonville, Florida. Once disclosure materials are approved, creditors can vote on the plan. Ocala, the report relates, said creditors' recoveries will flow from "complex causes of action against large financial institutions and/or government sponsored entities." Ocala said it intends to sue Federal Home Loan Mortgage Corp. to recover $805 million in alleged fraudulent transfers. Ocala's principal creditors include Deutsche Bank AG, with a claim of $1.16 billion; BNP Paribas Mortgage Corp., owed $463.3 million; and Federal Deposit Insurance Corp., with a claim of $898.9 million. There is only $17.5 million in secured claims to be paid. About Ocala Funding Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor Bean & Whitaker Mortgage Corp., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-04524) in Jacksonville on July 10, 2012. Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. Ocala disclosed $1,747,749,787 in assets and $2,650,569,181 in liabilities as of the Chapter 11 filing. Taylor Bean was forced to file for Chapter 11 relief (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009, amid allegations of fraud by Taylor Bean's former CEO Lee Farkas and other employees. Mr. Farkas is now serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. TBW's bankruptcy also caused the demise of Colonial Bank, which for years was TBW's primary bank. TBW and its joint debtor-affiliates confirmed their Second Amended Joint Plan of Liquidation on July 21, 2011, and the TBW Plan became effective on Aug. 10, 2011. The TBW Plan established the TBW Plan Trust to marshal and distribute all remaining assets of TBW. Neil F. Lauria, as CRO for TBW and trustee of the TBW Plan Trust, signed the Chapter 11 petition of Ocala. Ocala holds 252 mortgage loans with an unpaid balance of $42.3 million as of May 31, 2012. The Debtor also holds five "real estate owned" properties resulting from foreclosures. The Debtor also holds $22.4 million in proceeds of mortgage loans previously owned by it that are on deposit in an account in the Debtor's name at Regions Bank. It also has an interest in $75 million in cash, consisting of proceeds of mortgage loans previously owned by the Debtor, that are in an account maintained by Bank of America, N.A. as prepetition indenture trustee for the benefit of the Noteholders. The Debtor also holds a claim in the current amount of $1.6 billion against the estate of TBW. The largest unsecured creditors include the Federal Deposit Insurance Corp., owed $898,873,958; and Cadwalader, Wickersham & Taft LLP, owed $1,632,385. Judge Jerry A. Funk presides over Ocala's case. Proskauer Rose LLP and Stichter, Riedel, Blain & Prosser, serve as Ocala's counsel. Neil F. Lauria at Navigant Capital Advisors, LLC, serves as the Debtor's Chief Restructuring Officer. OMEGA NAVIGATION: Subsidiaries Set for Feb. 22 Auction ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Omega Navigation Enterprises Inc. will try once again to sell three non-bankrupt subsidiaries. The report recounts that in January, U.S. Bankruptcy Judge Karen Brown in Houston authorized the shipowner to give ownership of its eight vessels to secured lenders. At the same January hearing, Judge Brown refused to approve a separate settlement under which the company's owner, George Kassiotis, would have become the owner of the subsidiaries. According to the report, Judge Brown approved procedures Feb. 5 for a Feb. 22 auction for the subsidiaries. Bids are due initially by Feb. 19. A hearing to approve the sales is set for Feb. 25. Delos Megacore LLC will make the opening bid of $1.25 million for one of the subsidiaries and may bid for the others. The creditors' committee supports the Delos bid. Under the approved settlement with the lenders, the secured creditors waived claims and agreed to pay most professional expenses and while providing $500,000 for distribution to unsecured creditors. 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: Gets $25M DIP to Keep Tankers Afloat ---------------------------------------------------------- Overseas Shipholding Group Inc. won approval for debtor-in- possession financing packages that earmark a total of $25 million to fund operations while undergoing a Chapter 11 restructuring. Overseas also received final approval for use of cash representing secured lenders' collateral, Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports. U.S. Bankruptcy Judge Peter J. Walsh signed off on two DIP loans and a pair of complimentary agreements allowing the use of cash collateral, orders that taken together will enable certain OSG vessels to cover operating expenses and make payments on their existing debt, BankruptcyLaw360 reported. The $300 million in 8.125% senior unsecured notes due 2018 traded for 39.4 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. 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. OVERSEAS SHIPHOLDING: New York Judge Consolidates 3 Class Suits --------------------------------------------------------------- District Judge Shira A. Scheindlin of the Southern District of New York consolidated three related putative federal securities class actions against Overseas Shipholding Group, Inc., its various officers, underwriters, and auditors. Two of the actions are brought on behalf of purchasers of OSG common stock and allege violations of Section 10(b) and Rule 10b-5 and Section 20(a) of the Exchange Act of 1934. The third action is brought on behalf of purchasers of "OSG debt securities sold pursuant and/or traceable to [OSG's] $300 million public offering of 8.125% Senior Notes Due 'conducted on March 24, 2010," and alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. The cases are: -- ROBERT PORZIO, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. OVERSEAS SHIPHOLDING GROUP, et aI., Defendants, No. 12 Civ. 7948 (S.D.N.Y.) -- BRUCE MYATT, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. MORTEN ARNTZEN, et aI., Defendants, No. 12 Civ. 8547 (S.D.N.Y.); and -- INDIANA TREASURER OF STATE, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. G. ALLEN ANDREAS III, et aI., Defendants, No. 12 Civ. 9363 (S.D.N.Y.) The three groups of plaintiffs in contention for appointment as lead plaintiff are: (1) Abe Hedaya, Norma Hedaya, William Mills, Kristin Mondo -- OSG Investor Group -- who allege that Abe and Norma Hedaya suffered $2,077,291.13 in losses, William Mills suffered $9,413.44 in losses and Kristin Mondo suffered approximately $33,260.45 in losses; (2) Robert Kawula, Ben Reuben, Nikos Georgalakis, Patrick Cummins, and Douglas G. Fixter -- Overseas Investor Group -- who allege total losses of $809,773; and (3) Stichting Pensioenfonds DSM Nederland and Indiana Treasurer of State, joined by Lloyd Crawford -- DSM Group -- who allege approximately $1.3 million in losses. Judge Scheindlin named OSG Investor Group as lead plaintiff, and Robbins Geller Rudman & Dowd LLP as lead counsel. The law firms involved in the case include: (1) Giti Baghban, Esq., in Lawrenceville, NJ; Gregory M. Nespole, Esq., Malcolm T. Brown, Esq., Lawrence P. Kolker, Esq., Wolf Haldenstein Adler Freeman & Herz LLP, New York, NY; Jason M. Leviton, Esq., Berman DeValerio Boston, MA; Jeffrey C. Block, Esq., Block & Leviton LLP, New York, NY; Joseph P. Guglielmo, Esq., Scott Scott, L.L.P., New York, NY; and Steven P. Harte, Esq., Jones Day New York, NY, representing Plaintiff Robert Porzio. (2) Samuel H. Rudman, Esq., David A. Rosenfeld, Esq., Robbins Geller Rudman & Dowd LLP, Melville, NY, for Plaintiff Bruce Myatt and Indiana Treasurer of State. (3) Curtis Victor Trinko, Esq., Law Offices of Curtis V. Trinko, LLP, New York, NY, for Movant Lee McClennahan; (4) Lawrence Paul Kolker, Esq., Wolf Haldenstein Adler Freeman & Herz LLP, New York, NY, for Movant OSG Investor Group; (5) Phillip C. Kim, Esq., The Rosen Law Firm P.A.. New York, NY, for Movant Overseas Investor Group; (6) Kenneth Mark Rehns, Esq., Cohen Milstein Sellers & Toll P.L.L.C., New York, NY, for Movants Barrie Woolard and Steven Hyman; (7) Thomas James McKenna, Esq., Gainey & McKenna, LLP, New York, NY, for Movant the Riley Group; (8) John Christopher Browne, Esq., Bernstein Litowitz Berger & Grossmann LLP, New York, NY, for Movant Paul Otto Koether IRA Rollover; (9) David Avi Rosenfeld, Esq., Robbins Geller Rudman & Dowd LLP, Melville, NY, for Movant the DSM Group; (10) Lewis J. Liman, Esq., Elizabeth Vicens, Esq., Cleary Gottlieb Steen & Hamilton, LLP, New York, NY, for Defendant Overseas Shipholding Group, Inc. (11) Scott B. Schreiber, Esq., Craig A. Stewart, Esq., Arnold & Porter, Washington, DC, for Defendant Morten Arntzen; (12) David H. Kistenbroker, Esq., Joni S. Jacobsen, Esq., Ashley J. Burden, Esq., Dechert LLP, Chicago, IL, for Defendant Myles R. Itkin. The Irving Firemen's Relief and Retirement Fund appeared pro se. A copy of the Court's Feb. 1, 2013 Opinion and Order is available at http://is.gd/MrfhJpfrom Leagle.com. 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. PALOMAR HEALTH: Fitch Affirms 'BB+' Rating on 4 Bond Classes ------------------------------------------------------------ Fitch Ratings has affirmed its 'BB+' rating on the following bonds issued by Palomar Health, California: -- $159,252,000 certificates of participation COPs series 2010; -- $228,477,000 COPs series 2009; -- $171,607,000 COPs series 2006A-C; -- $22,190,000 insured refunding revenue bonds series 1999. The Rating Outlook is Stable. Security The bonds are secured by a general revenue pledge of the obligated group. Sensitivity/Rating Drivers COMPLETED SIZEABLE CAPITAL SPENDING: In August 2012, Palomar Health opened its 288-bed Palomar Medical Center (PMC) in Escondido, California. The opening and subsequent relocation of most service lines into PMC signals the end of capital spending on PH's large and ambitious $1.06 billion master facilities plan. Capital needs going forward will drop dramatically to $17 million budgeted in fiscal 2013 from an average of $197.1 million over the last four fiscal years. WEAKENED PROFITABILITY: Interim fiscal 2013 financial results (six months ended Dec. 31, 2012) have been negatively impacted by one-time move-in costs to the new facility, negative variance to budget due to continued shift of inpatient admissions to observation cases and rising depreciation and interest expense related to the new facility. Fitch expects PH to reduce the sizable operating losses over the near term through aggressive cost management and revenue optimization measures. Losses have been reduced month to month since the new facility opened and operating performance is projected to be at least breakeven for the remainder of the year. HIGH DEBT BURDEN: PH's debt burden remains very high and is inconsistent with an investment-grade rating. Debt service coverage was below 1x for the interim period due to weak cash flow, however, Fitch expects PH's measures to improve cash flow during the second half of fiscal 2013 will result in coverage in excess of its debt service coverage requirement (1.15x). LOW LIQUIDITY: Liquidity has dropped as of Dec. 31, 2012 mainly due to the remaining spend on the master facilities plan from equity. In addition, debt service was paid from cash due to negative cash flow. Fitch expects liquidity to rebuild due to modest capital needs going forward. What Could Trigger A Rating Action FAILURE TO IMPROVE CASH FLOW: It is imperative that PH improve its cash flow in order to cover its high debt service requirements. Fitch will monitor PH's progress over the next few months and the failure to substantially improve cash flow will result in negative rating action. CREDIT PROFILE Palomar Health, formerly known as Palomar Pomerado Health System, is a California hospital district that operates three hospitals in northern San Diego County. For fiscal 2012 (ended June 30), Palomar Health (PH) reported $552 million in total operating revenue. Opening of Palomar Medical Center In August 2012, Palomar Health opened its new 288-bed Palomar Medical Center in North San Diego County and successfully relocated the majority of its service lines to the new hospital from its downtown Escondido facility. The downtown facility will remain operational and house an urgent care center, labor and delivery, behavioral, and acute rehab service lines. Construction and completion of Palomar Medical Center is the center piece of PH's sizable $1.06 billion facilities master plan. Total operated beds is approximately 508 beds. Operating Performance Weaker Than Expectations Financial results for the six-month interim period ended Dec. 31, 2012 show a large operating loss driven by increased depreciation and interest expense related to the new facility, one-time costs related to the transition to the new facility and continued revenue pressures from a shift in inpatient volume to observation cases. Through the interim, PH reported an operating loss of $41.1 million, or a negative 14.9% operating margin (exclusive of property tax income). For fiscal 2012, PH generated $6.3 million in operating income, or a 1.2% operating margin. In preparation for the move to its new facility, PH implemented a planned reduction in elective admissions and surgeries and placed its emergency department (ED) on diversion. Further, prior to and following the move, staff training and system testing were conducted to ensure a smooth and safe operating environment. As a result, PH incurred approximately $12.5 million in one-time move- in costs through the interim period and $7 million in lost inpatient revenue. In response to the challenging financial results, PH is undertaking strong labor cost management effort, productivity initiatives, and revenue optimization measures to shore up profitability and rebuild the balance sheet. Management projects that fiscal 2013 will end with EBITDA of approximately $48 million compared to $6.8 million through the six months ended Dec. 31, 2012, with most of the improvement expected to be realized from management of labor costs. Fitch expects fiscal 2013 performance to result in debt service coverage in excess of its bond covenant requirements and the inability to execute on these cost reduction plans will result in downward rating action. Property Tax Revenue Benefit PH's overall profitability is aided by its status as a California Hospital District, a political subdivision of the State of California. PH receives unrestricted property tax revenues from a fixed share of the 1% property tax levied by the County of San Diego on all taxable real property in PH's boundaries. PH received $12.7 million and $12.6 million in unrestricted property tax revenues in fiscal 2012 and 2011, respectively. These revenues are in addition to, and are separate from, the ad valorem tax revenues generate by the separate voter-approved tax levy that is pledged solely for the payment of principal and interest on PH's $496 million series 2005, 2007, 2009, and 2010 GO bonds. High Debt Burden As of Dec. 31, 2012, PH had $581.5 million in revenue bonds and $492.4 million in general obligation bonds outstanding (Fitch rates the district's general obligation bonds A+). All but the series 2006 certificates are in fixed rate mode. PH has entered into three fixed payor interest rate swaps with Citi, N.A. As of Jan. 31, 2013, the swaps had a negative mark-to-market value of $33.9 million. The swaps are insured by Assured Guaranty and have required no collateral posting. The district's high debt burden reflects the large amount of debt that was issued to fund its large $1.06 billion facility master plan. Funding sources have fluctuated over the last few years and have been pressured by a drop in philanthropy, increased project cost, and the need to fund a central utility plant that was initially to be financed by a third party. Low Liquidity At Dec. 31, 2012, PH had $130.3 million in unrestricted cash and investments, equating to 81.7 days cash on hand and 21.2% cash to debt, down from 124.4 days cash on hand 30.6% cash to debt at June 30, 2012. The declining liquidity reflects PH's equity contribution to its master facility plan ($27.4 million) and debt service payments ($24.4 million) due to weak cash flow. PH's capital budget for fiscal 2013 totals $17 million, down sizably from prior years, and will be funded from operating cash flow. With the completion of its large master facilities plan, Fitch expects PH to rebuild its balance sheet going forward. Expected Performance Improvement Over the Next Few Years Fitch believes that PH's interim financial profile reflects a transition period for the organization as it moves to position itself as one of the key healthcare providers in the North San Diego County through heavy capital investments and cash outlays. Further, Fitch views positively PH's strategic operating relationships with Kaiser Permanente and Rady Children's Hospital (both rated 'A+' by Fitch). Along with PH's creation of its medical foundation, Arch Health Partners and its continued investments in its electronic medical records, these actions should enhance PH's operations and its market position in a post healthcare reform era. Stable Outlook Despite PH's very weak financial profile through the six months ended Dec. 31, 2012, Fitch's Outlook for PH remains Stable given management's plan to improve cash flow for the remainder of the year. Fitch will monitor these improvements and will update the rating prior to the close of PH's 2013 fiscal year. The failure to execute on its improvement initiatives will result in negative rating pressure. Disclosure: PH covenants to provide annual audited financial reports and unaudited quarterly financial statements to bondholders. Quarterly information, including a balance sheet, income statement, and statement of changes in net assets will be provided within 45 days after the end of each of the first three fiscal quarters. PATRIOT COAL: Carmody MacDonald OK'd as Committee's Local Counsel ----------------------------------------------------------------- The Hon. Kathy A. Surratt-States of the U.S. Bankruptcy Court for the Eastern District of Missouri authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of Patriot Coal Corporation, et al., to retain Carmody Macdonald P.C., as its local counsel. The Court also ordered that Carmody MacDonald will not withdraw as the Committee's counsel prior to the effective date of any Chapter 11 plan confirmed in the cases without prior approval of the Court in accordance with Local Bankruptcy Rule 2091. As reported in the TCR on Jan. 8, 2013, Carmody MacDonald is expected to render such legal services that the Committee may request in order to discharge the Committee's responsibilities and further the interests of the Committee's constituents in the cases. Those services will include, without limitation, assisting, advising and representing the Committee as local counsel with respect to the Committee's responsibilities and duties to creditors and to the Court. The range of hourly billing rates of Carmody MacDonald partners for this matter will be $325 and $395, associates $225 and $295, and legal assistants/law clerks $150 and $175. To the best of the Committee's knowledge (i) Carmody MacDonald is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, (ii) neither Carmody MacDonald nor its professionals have any connection with Debtors, their creditors or any other parties-in-interest, and (iii) Carmody MacDonald does not hold or represent any interest adverse to the Committee in respect of the matters for which it is to be retained. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PENSON WORLDWIDE: Sets March 14 Hearing on Disclosure Statement --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Penson Worldwide Inc., formerly a clearing broker and future commission merchant, scheduled a March 14 hearing for approval of disclosure materials explaining a liquidating Chapter 11 plan negotiated before the bankruptcy filing on Jan. 11 in Manhattan. According to the report, the plan is supported by holders of 57% of the second-lien notes and 70% of convertible notes. The plan treats each Penson company separately. Consequently, creditors only receive distributions from the assets of the company liable on the claim. The plan, the report relates, generally provides for distributing proceeds of collateral to secured creditors, with unsecured creditors receiving distributions in the order of priority prescribed in bankruptcy law. Second-lien creditors are treated as unsecured creditors. According to the report, the disclosure statement projects that general unsecured and second-lien creditors of Penson Worldwide may recover nothing to 15%. For creditors of other companies, the recovery in some instances could be 100 percent. Once the judge approves the disclosure statement, the plan will be submitted to creditors for a vote. 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. PETTERS COMPANY: PBE Trustee Allowed to Use Cash Until December --------------------------------------------------------------- The Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota authorized Douglas A. Kelley, the duly appointed Chapter 11 trustee for Petters Company, Inc., et al., to consent to PBE Chapter 7 trustee's use of cash collateral until Dec. 31, 2013. As reported in the Troubled Company Reporter on Jan. 8, 2013, the Chapter 11 trustee requested that the Bankruptcy Court issue an order: a. authorizing the Chapter 11 trustee, on behalf of the PCI Debtors, to enter into an agreement with John R. Stoebner, Chapter 7 Bankruptcy Trustee of PBE Corporation, et al., for use of certain cash collateral in which PCI claims an interest; and b. authorizing the Chapter 11 trustee to allow the PBE trustee to use cash collateral until Dec. 31, 2013, subject to the terms agreed upon by the PCI Debtors and the PBE trustee and memorialized in a cash collateral agreement. The PBE Trustee said that the cash collateral is necessary for him to perform his statutory duties in 2013. The PBE trustee expects the expenses in the 2013 to include expenses incurred relating to the filing of2012 tax returns, administrative rent and storage, retention of data, claims reconciliation, treasury wind-down, estate management and miscellaneous expenses, finalizing sale of estate assets, professional fees and costs incurred in connection of evaluation and resolution of existing and prospective existing matters and adversary proceedings, and the bond of the trustee. As adequate protection from any diminution value of the lenders' collateral, the PBE Debtors will: (i) grant the PCI Debtors replacement liens in certain assets; (ii) maintain segregated accounts or books of account for all items of cash constituting cash collateral and items of cash not constituting cash collateral; and (iii) provide the PCI Debtors copies of the financial or operating reports as filed with the Office of the U.S. Trustee. About Petters Company, Inc. Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Fruth, Jamison & Elsass, PLLC, represents Douglas Kelley, the duly appointed Chapter 11 Trustee of Petters Company, Inc., et al. The trustee tapped Haynes and Boone, LLP as special counsel, and Martin J. McKinley as his financial advisor. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. PETTERS COMPANY: Mark A. Weisbart OK'd as Trustee's Local Counsel ----------------------------------------------------------------- The Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota authorized Douglas A. Kelley, the duly appointed Chapter 11 trustee for Petters Company, Inc., et al., to employ The Law Office of Mark A. Weisbart as local counsel. The firm is expected to advise and represent the trustee on matters arising in the Texas Bankruptcy cases. The hourly rates of the firm's personnel are: Mark Weisbart $450 James Brouner $400 Paralegals $85 To the best of the trustee's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Petters Company, Inc. Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Fruth, Jamison & Elsass, PLLC, represents Douglas Kelley, the duly appointed Chapter 11 Trustee of Petters Company, Inc., et al. The trustee tapped Haynes and Boone, LLP as special counsel, and Martin J. McKinley as his financial advisor. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. PETTERS COMPANY: Stuarts Walker Hersant OK'd as Cayman Counsel -------------------------------------------------------------- The Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota authorized Douglas A. Kelley, the duly appointed Chapter 11 trustee for Petters Company, Inc., et al., to employ Stuarts Walker Hersant as its counsel. As reported in the Troubled Company Reporter on Jan. 8, 2013, Stuarts Walker is expected to advise and represent the trustee on matters arising in the Cayman Islands arising from the adversary proceedings related to the bankruptcy cases. Richard Annette, a senior counsel at Stuarts Walker, told the Court that the hourly rates of Stuarts Walker are: Anthony Akiwumi $675 Sarah Dobbyn $675 Mr. Annette $600 Christopher Levers $450 Paul Murphy $450 To the best of the trustee's knowledge, Stuarts Walker does not hold or represent an interest materially adverse to the Debtors, the states or any class of creditors or equity security holders. About Petters Company, Inc. Based in Minnetonka, Minn., Petters Group Worldwide LLC is a collection of some 20 companies, most of which make and market consumer products. It also works with existing brands through licensing agreements to further extend those brands into new product lines and markets. Holdings include Fingerhut (consumer products via its catalog and Web site), SoniqCast (maker of portable, WiFi MP3 devices), leading instant film and camera company Polaroid (purchased for $426 million in 2005), Sun Country Airlines (acquired in 2006), and Enable Holdings (online marketplace and auction for consumers and manufacturers' overstock inventory). Founder and chairman Tom Petters formed the company in 1988. Petters Company, Inc., is the financing and capital-raising unit of Petters Group Worldwide. Thomas Petters, the founder and former CEO of Petters Group, has been indicted and a criminal proceeding against him is proceeding in the U.S. District Court for the District of Minnesota. Petters Company, Petters Group Worldwide and eight other affiliates filed separate petitions for Chapter 11 protection (Bankr. D. Minn. Lead Case No. 08-45257) on Oct. 11, 2008. In its petition, Petters Company estimated its debts at $500 million and $1 billion. Parent Petters Group Worldwide estimated its debts at not more than $50,000. Fruth, Jamison & Elsass, PLLC, represents Douglas Kelley, the duly appointed Chapter 11 Trustee of Petters Company, Inc., et al. The trustee tapped Haynes and Boone, LLP as special counsel, and Martin J. McKinley as his financial advisor. Petters Aviation, LLC, and affiliates MN Airlines, LLC, doing business as Sun Country Airlines, Inc., and MN Airline Holdings, Inc., filed separate petitions for Chapter 11 bankruptcy protection (Bankr. D. Minn. Case Nos. 08-45136, 08-35197 and 08-35198) on Oct. 6, 2008. Petters Aviation is a wholly owned unit of Thomas Petters Inc. and owner of MN Airline Holdings, Sun Country's parent company. PHARMACEUTICAL RESEARCH: S&P Withdraws 'B' Corporate Credit Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services withdrew its 'B' corporate credit rating on Raleigh, N.C.-based contract research organization Pharmaceutical Research Associates Inc. "We are withdrawing our 'B' corporate credit rating because this rating will reside at parent PRA International, the corporate parent and the issuer of the company's financial statements. Issue-level ratings at Pharmaceutical Research Associates, including the 'B' issue-level rating and '3' recovery rating on the senior secured credit facility and the 'B-' issue-level rating and '5' recovery rating on the second-lien term loan, are not affected," S&P said. PICCADILLY RESTAURANTS: Exclusivity Periods Extended Thru April 9 ----------------------------------------------------------------- Piccadilly Restaurants, LLC sought and obtained an extension until April 9, 2013, of the deadline to file its Chapter 11 plan and disclosure statement. The Debtors have to gain acceptance of a plan shall be extended up to and including June 10, 2013. Piccadilly Restaurants, LLC, and two affiliated entities sought Chapter 11 bankruptcy protection (Bankr. W.D. La. Case Nos. 12-51127 to 12-51129) on Sept. 11, 2012. The affiliates are Piccadilly Food Service, LLC, and Piccadilly Investments LLC. Piccadilly Restaurants, LLC, headquartered in Baton Rouge, Louisiana, is the largest cafeteria-style restaurant in the United States, with operations in 10 states in the Southeast and Mid- Atlantic regions. It is wholly owned by Piccadilly Investments, LLC. Piccadilly operates an institutional foodservice division through a wholly owned subsidiary, Piccadilly Food Service, LLC, servicing schools and other organizations. With a history dating back to 1944, the Company operates 81 restaurants at three owned and 78 leased locations. Then known as Piccadilly Cafeterias, Inc., the Company filed for Chapter 11 relief (Bankr. S.D. Fl. Case No. 03-27976) on Oct. 29, 2003. Paul Steven Singerman, Esq., and Jordi Guso, Esq., at Berger Singerman, P.A. represented the Debtor in the case. After Piccadilly declared bankruptcy under Chapter 11, but before its plan was submitted to the Bankruptcy Court for the Southern District of Florida, the Bankruptcy Court authorized Piccadilly to sell its assets to Yucaipa Cos., for about $80 million. In October 2004, the Bankruptcy Court confirmed the plan. Judge Robert Summerhays oversees the 2012 cases. Lawyers at Jones, Walker, Waechter, Poitevent, Carrere & Denegre, LLP, in New Orleans, serve as the 2012 Debtors' counsel. BMC Group, Inc., serves as claims agent, noticing agent and balloting agent. In its schedules, the Debtor disclosed $34,952,780 in assets and $32,000,929 in liabilities. New York-based vulture fund Atalaya Administrative LLC, in its capacity as administrative agent for Atalaya Funding II, LP, Atalaya Special Opportunities Fund IV LP (Tranche B), and Atalaya Special Opportunities Fund (Cayman) IV LP (Tranche B), the Debtors' prepetition secured lender, is represented in the case by lawyers at Carver, Darden, Koretzky, Tessier, Finn, Blossman & Areaux, L.L.C.; and Patton Boggs, LLP. Henry G. Hobbs, Jr., Acting United States Trustee for Region 5, has appointed seven members to the official committee of unsecured creditors in the Debtors' Chapter 11 cases. In October, the Committee sought and obtained Court approval to employ Frederick L. Bunol, Albert J. Derbes, IV, of The Derbes Law Firm, L.L.C. as attorneys. The Derbes Law Firm's published, normal rates which for the year 2012 are: Professional Rates ------------ ----- Frederick L. Bunol $225 per hour Albert J. Derbes, IV $295 per hour Eric J. Derbes $295 per hour Wilbur J. "Bill" Babin, Jr. $325 per hour Albert J. Derbes, III $350 per hour David Corkern $300 per hour Beau P. Sagona $295 per hour Melanie M. Mulcahy $250 per hour Daniel J. Poolson, Jr. $175 per hour Law Clerks $80 per hour Paralegals $75 per hour Legal Assistants $65 per hour Hugh J. Posner, C.P.A. $175 per hour The panel attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. PINNACLE AIRLINES: File Committee-Backed Reorganization Plan ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pinnacle Airlines Corp. filed a reorganization plan to emerge from Chapter 11 bankruptcy as a wholly owned subsidiary of Delta Air Lines Inc. Even though unsecured and union creditors will recover less than 1% on claims totaling as much as $690 million, the plan is supported by the official unsecured creditors' committee and the pilots' union. The U.S. Bankruptcy Court in New York will hold a hearing March 7 for approval of the explanatory disclosure statement. Once disclosure materials are approved, creditors will vote on the plan. Pinnacle wants the court to hold an April 17 confirmation hearing for approval of the plan. According to the report, the plan was laid out in an agreement among Delta, Pinnacle, and the creditors' committee announced on Jan. 3. After bankruptcy Pinnacle will continue as a feeder airline for Atlanta-based Delta operating 81 regional jets with 76 seats. Currently, Pinnacle is operating about 190 regional jets for Delta, mostly the 50-seat variety. The report notes that Delta is providing Pinnacle with $74.3 million in financing to continue operating while in Chapter 11. To prevent Pinnacle from running out of cash this month, Delta is increasing the secured loan by $30 million. Delta is now Pinnacle's only customer. Delta will loan an additional $22 million, with $20 million paid to Pinnacle pilots on emergence from Chapter 11. The payments to each pilot are on sliding scale depending on years of service. The longevity payments are part of a new contract negotiated by the union. Delta will convert some of the debt it holds against Pinnacle into all of the new stock. For unsecured claims, $2.25 million cash will be set aside. Although it will have an approved unsecured claim for $95.4 million, Delta won't receive any payments from the unsecured creditors' pool. Part of the agreement with unsecured creditors bars Delta or Pinnacle from suing to recover preferences, or payments within 90 days of bankruptcy. In return for contract concessions, the pilots and flight attendants will have approved unsecured claims. The pilots' claim is $138.5 million. Pinnacle now flies 41 of the larger regional jets for Delta, which will deliver another 40 larger regional jets to Pinnacle between the fall of 2013 and the end of 2014. Pilots who lose their jobs from a reduction in the size of the fleet will receive severance and other benefits financed with the $22 million loan. 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. PONCE TRUST: Files Schedules of Assets and Liabilities ------------------------------------------------------ Ponce Trust, LLC filed with the U.S. Bankruptcy Court for the Southern District of Florida its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $21,250,000 B. Personal Property $1,484,532 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $38,431,829 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $8,587,097 ----------- ----------- TOTAL $22,734,532 $47,018,926 A copy of the schedules is available for free at http://bankrupt.com/misc/PONCE_TRUST_sal.pdf About Ponce Trust Ponce Trust LLC, the developer and owner of the luxury residential condominium development known as 1300 Ponce, in Coral Gables, Florida, filed for Chapter 11 bankruptcy (S.D. Fla. Case No. 12-14247) on Feb. 22, 2012. Judge Robert A. Mark presides over the case. Andrea L. Rigali, Esq., Joel L. Tabas, Esq., and Mark S. Roher, Esq., at Tabas, Freedman, Soloff, Miller & Brown, P.A., serve as the Debtor's counsel. The petition was signed by Luis Lamar, vice president and manager. Ponce Trust sought Chapter 11 because of (a) the declining real estate market, (b) its inability to reduce condominium prices in response to changing market conditions, and (c) its inability, due to circumstances beyond the Debtor's control, to renew, repay, or refinance its secured mortgage debt owed to MUNB Loan Holdings, LLC, which matured in 2011. Prior to the Petition Date, MUNB initiated a foreclosure action against the Property in the Circuit Court of the 11th Judicial Circuit in and for Miami-Dade County, Florida. On July 21, 2011, the State Court entered an Order Appointing Receiver, which inter alia appointed Jeremy S. Larkin as receiver. Mr. Larkin is the President of NAI Miami Commercial Real Estate Services, Worldwide. 1300 Ponce contains 125 residential condominium units. As of the bankruptcy filing date, the Debtor has a remaining inventory of about 83 units and rented about 40 of those units. The Debtor intends to market the remaining Condominium Units for both sale and rental. The Debtor disclosed $22,734,532 in assets and $46,999,376 in liabilities as of the Chapter 11 filing. The residential condominium unit is worth $19 million. MUNB is owed $37.3 million. 1300 Ponce Holdings LLC, assignee of MUNB, is represented by Carlton Fields, P.A. The Court confirmed the Third Amended Chapter 11 Plan on Dec. 26, 2012. Joel L. Tabas named as disbursing agent. Status hearing scheduled for March 14, 2013 at 2 p.m. Under the Plan, 300 Ponce Holdings, which made an election under 11 U.S.C. Sec. 1111(b) to have one secured claim in the amount of $38,174,090, will be paid a stream of payments equal to or greater than its total claim from unit sales revenues and rental income. Unsecured creditors will be paid in monthly installments over seven years in graduated payments through the life of the Plan starting in November 2017. In April 2012, the U.S. Trustee said an official committee of unsecured creditors has not been appointed. PQ CORP: S&P Retains 'B+' CCR Following Repricing of $1.2BB Loan ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on PQ Corp. (including the 'B' corporate credit rating as well as the 'B+' issue rating and '2' recovery rating on the company's senior secured debt) remain unchanged following the proposed repricing of its $1.2 billion term loan B maturing 2017. The outlook remains stable. The '2' recovery rating indicates S&P's expectations of substantial recovery (70%-90%) in the event of a payment default. PQ is a specialty chemical producer that manufactures and markets inorganic specialty chemicals and specialty catalysts. The company produces sodium silicate, magnesium sulfate, zeolites, polyolefin catalysts, and other industrial chemicals. Through its 100%-owned subsidiary Potters Holdings II L.P., PQ makes glass beads for various industrial applications. The Carlyle Group is the majority owner of PQ. RATINGS LIST Ratings Unchanged PQ Corp. Corporate credit rating B/Stable/-- Senior secured US$600 mil second-lien nts due 2018 B- Recovery rating 5 US$1.22 bil first-lien term bank ln due 2017 B+ Recovery rating 2 POWERWAVE TECHNOLOGIES: Cash Use Requires Sale Deal by Feb. 9 ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Powerwave Technologies Inc. worked out an agreement with the lenders for permission to use cash so long as there is an agreement in principle signed by Feb. 19 to sell the business. According to the report, the bankruptcy court in Delaware signed a so-called cash collateral order. Without court permission, a company in bankruptcy reorganization is barred from using cash representing collateral for a secured lender's claim. The 3.875% subordinated notes last traded on Jan. 29 for 5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. Purchasers were offering Feb. 4 to buy the 2.75% senior convertible notes for 12 cents. About Powerwave Technologies Powerwave Technologies Inc. (NASDAQ: PWAV) filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-10134) on Jan. 28, 2013. Powerwave Technologies, 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. 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. Aside from a $35 million secured debt to P-Wave Holdings LLC, the Debtor owes $150 million in principal under 3.875% convertible subordinated notes and $106 million in principal under 2.5% convertible senior subordinated notes where Deutsche Bank Trust Company Americas is the indenture trustee. In addition, as of the Petition Date, the Debtor estimates that between $15 and $25 million is outstanding to its vendors. The Debtor is represented by attorneys at Proskauer Rose LLP and Potter Anderson & Corroon LLP. REGAL ENTERTAINMENT: Fitch Affirms 'B+' Issuer Default Rating ------------------------------------------------------------- Fitch Ratings has affirmed the 'B+' Issuer Default Rating (IDR) of Regal Entertainment Group and Regal Cinemas Corporation. The Outlook is Stable. The ratings and Stable Outlook reflect these considerations: -- Fitch believes movie exhibition will continue to be a key promotion window for the movie studios' biggest/most profitable releases. -- Box office revenue grew solidly in 2012 (+6.5% according to Box Office Mojo) driven mostly by attendance growth. The 2012 film slate was highlighted by The Avengers, The Dark Knight Rises, The Hunger Games, Skyfall, The Hobbit, and the Twilight Saga. -- Fitch recognizes that theater attendance is inherently volatile due to the quality of the film slate in any given year. The 2013 slate is promising with many sequels including, The Hunger Games: Catching Fire, Iron Man 3, Star Trek Into Darkness, The Hobbit: The Desolation of Smaug, and Thor: The Dark World. However, due to the strong 2012 performance, which will be a challenge to match, Fitch's current base case for 2013 is for attendance to decline in the low single digits. -- For the long term, Fitch continues to expect that the movie exhibitor industry will be challenged in growing attendance and any potential attendance declines will offset some of the growth in average ticket prices. The ratings factor in the intermediate/long-term risks associated with increased competition from at-home entertainment media, limited control over revenue trends, the pressure on film distribution windows, and increasing indirect competition from other distribution channels (such as VOD and other OTT services). Regal and its peers rely on the quality, quantity, and timing of movie product, all factors out of management's control. -- Fitch does not anticipate a significant decline in concession revenue per patron, but remains cautious that high-margin concessions (which represent 26% of Regal's total revenues and carry 87% gross margins), may be vulnerable to reduced per- guest concession spending due to economic cyclical factors or a re-acceleration of commodity prices. A slight deterioration in concession margin is factored into the current rating. While Fitch expects increased concession spend per guest, margins are expected to contract due to the lower margin premium menu offerings introduced by Regal and other theater circuits. -- Fitch believes that Regal will continue to focus free cash flow (FCF) deployment toward build-out/expansion of theaters, acquisition of theater assets, and/or for shareholder-friendly activities. SENSITIVITY/RATING DRIVERS -- Fitch weighs the prospective challenges facing Regal and its industry peers in arriving at the long-term credit ratings heavily. Significant improvements in the operating environment (e.g. sustainable increases in attendance) and sustained deleveraging could have a positive effect on the rating, though Fitch views this as unlikely. -- Fitch anticipates that Regal, and other movie exhibitors, will continue to consolidate. While not anticipated, a material debt-funded acquisition or return of capital to shareholders that would raise the unadjusted gross leverage beyond 4.5x could have a negative impact on the rating. -- In addition, meaningful, sustained declines in attendance and/or per-guest concession spending which drove leverage beyond 4.5x could pressure the rating as well. Liquidity As of Sept. 27, 2012, liquidity consisted of $253 million in cash and $82 million of availability under Regal Cinemas' $85 million revolving credit facility due May 2015. There are no significant maturities until 2017 when the term loan facility comes due. Fitch-calculated FCF for latest 12 months ended September 2012 was $136 million. Fitch expects 2012 FCF to be negative $50 million. Fitch's FCF calculation deducts both the $155 million special dividend and Regal's regular dividend. In 2013, including its regular dividend payment, Fitch expects FCF to be roughly $50 million to $75 million. The company does not have any pension obligations. Leverage As of Sept. 27, 2012, pro forma for the $250 million Regal issuance in January, gross debt totaled $2.25 billion and was made up of: -- Regal Cinemas' $990 million secured term loans (due 2017); -- Regal Cinemas' $400 million unsecured notes (due 2019); -- Regal's $525 million unsecured notes (due 2018); and -- Regal's $250 million unsecured notes (due 2025). Fitch calculates Regal's pro forma consolidated lease adjusted gross leverage at 5.1x and unadjusted gross leverage at 4.6x. While pro forma unadjusted gross leverage is currently outside of Fitch's longer term parameters, Fitch forecasts leverage to be below 4.5x at year-end 2012. There is tolerance in the current rating for leverage to go above 4.5x for a short period of time due to fluctuations in the box office. Recovery Regal's Recovery Ratings reflect Fitch's expectation that the enterprise value of the company and, thus, recovery rates for its creditors, will be maximized in a restructuring scenario (as a going concern) rather than a liquidation. Fitch estimates a distressed enterprise valuation of $1.7 billion, using a 5x multiple and including an estimate for Regal's roughly 20% stake in National CineMedia, LLC of approximately $190 million. Based on this enterprise valuation, which is before any administrative claims, overall recovery relative to total current debt outstanding is approximately 75%. The 'RR1' Recovery Rating for the company's credit facilities reflects Fitch's belief that 91%-100% expected recovery is reasonable. While Fitch does not assign Recovery Ratings for the company's operating lease obligations, it is assumed the company rejects only 30% of its remaining $3.2 billion in operating lease commitments due to their significance to the operations in a going-concern scenario and is liable for 15% of those rejected values (at a net present value). Fitch's recovery analysis shows 84% recovery for Regal Cinemas' senior unsecured notes (equal in ranking to the rejected operating leases), which maps to an 'RR2' Recovery Rating. The 'RR6' assigned to Regal's senior unsecured notes reflects the structural subordination of the notes and Fitch's expectation for zero recovery. Fitch has affirmed the following ratings: Regal -- IDR at 'B+'; -- Senior unsecured notes at 'B-/RR6'. Regal Cinemas -- IDR at 'B+'; -- Senior secured credit facility at 'BB+/RR1'; -- Senior unsecured notes at 'BB/RR2'. The Rating Outlook is Stable. RESIDENTIAL CAPITAL: Creditors Generally Oppose Trust Settlement ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the official committee for Residential Capital unsecured creditors came out in opposition to the approval of a proposed $8.7 billion settlement to compromise claims against ResCap for including substandard mortgages in 392 securitization trusts sold between 2004 and 2007. According to the report, the committee says in its papers filed Feb. 1 that the settlement is opposed by every constituency in the bankruptcy aside from the securitization trusts that would receive the $8.7 billion claim. Others opposing include an ad hoc group of senior secured noteholders, the indenture trustee for $1 billion in unsecured notes, and bond insurers Financial Guaranty Insurance Co. and MBIA Insurance Corp. The bankruptcy court in New York will consider approving the settlement at a March 18 hearing. The committee, the report relates, argues that bankruptcy law doesn't allow approving a settlement universally opposed by creditors. The committee says it was "dismayed" to learn that structuring the settlement was dominated by and for the benefit of ResCap's non-bankrupt parent Ally Financial Inc. The committee contends that the trusts were promised an $8.7 billion claim in exchange for assuring Ally that its exposure would be limited to $750 million through a companion settlement. The committee says the claims of the securitization trusts instead should be resolved though a "global negotiating process" involving "all major constituencies," as opposed to the pending settlement orchestrated by Ally. The committee contends that the $8.7 billion settlement is billions higher than the company's own estimates of its exposure. The committee contends that losses suffered by the trusts stem more from the collapse in the housing market than ResCap's faulty underwriting policies. The committee notes that losses by the trusts were modest until the housing market declined. The report relates that the securitization trusts being offered the settlement represent 1.6 million mortgages with $221 billion in original principal balances. The settlement was negotiated with holders of 25% of the securities issued by 328 of the trusts. If court approves, indenture trustees for each of the trusts can elect whether to accept or reject taking a portion of the $8.7 billion in approved claims to be paid through a reorganization plan. The security holders with whom the settlement was negotiated will direct their trustees to accept, according to ResCap's court filing. ResCap said that the settlement disposes of the single largest group of disputed claims in the Chapter 11 reorganization. The $8.7 billion in approved claims will be against ResCap affiliates Residential Funding LLC and GMAC Mortgage LLC. ResCap's $2.1 billion in third-lien 9.625% secured notes due 2015 last traded on Feb. 1 for 108.25 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $473.4 million of ResCap senior unsecured notes due April 2013 last traded on Jan. 31 for 33.25 cents on the dollar, a 41.5% increase since Dec. 19, according to Trace. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Insurers Cry Foul Over $8.7B MBS Settlement ---------------------------------------------------------------- Brian Mahoney of BankruptcyLaw360 reported that bankrupt Residential Capital LLC's insurer-creditors on Friday blasted its proposed $8.7 billion settlement with 392 securitization trusts over warranty breaches tied to residential mortgage-backed securities, saying the deal was designed to protect the interests of the mortgage company's parent Ally Financial Inc. The objectors -- which include MBIA Inc., Wilmington Trust NA and Assured Guaranty Municipal Corp. -- told U.S. Bankruptcy Judge Martin Glenn that ResCap's decision to grant an allowed of $8.7 billion for contractual loan repurchase claims was, in MBIA's words, "a thinly veiled mechanism to promote an Ally Financial- sponsored plan," the report related. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000 ). RESIDENTIAL CAPITAL: Ally CEO Threatens to Withdraw $750M Deal -------------------------------------------------------------- Brian Mahoney of BankruptcyLaw360 reported that the CEO of auto lender Ally Financial Inc. told investors Tuesday that the company was prepared to withdraw its $750 million pre-petition settlement with creditors of its bankrupt mortgage servicing arm Residential Capital LLC if they can't "expeditiously" agree to the settlement terms. In a fourth-quarter earnings call, Ally chief Michael Carpenter said the company was ready to "go the litigation route" if the agreement, designed to distance Ally from liability over the ResCap's failure, falls through, the report related. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000 ). REVLON CONSUMER: S&P Assigns 'B' Rating to $400MM Sr. Unsec. Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B' senior unsecured debt rating to New York, N.Y.-based Revlon Consumer Products Corp.'s (a wholly owned subsidiary of Revlon Inc., here referred to as "Revlon") proposed $400 million senior unsecured notes due 2021. The recovery rating on the notes is '5', indicating S&P's expectation of modest recovery (10%-30%) in a default scenario. "We expect the company to use proceeds from the proposed transaction to refinance the outstanding $330 million senior secured notes due 2015, to partially prefund the outstanding $48 million senior subordinated term debt coming due in October, and to make an approximately $20 million excess cash flow payment on its term loan. We estimate that this proposed transaction is roughly leverage neutral with pro forma leverage in the low 5x area compared with 5.3x for the 12 months ending Sept. 30, 2012," S&P said. "Our ratings on Revlon reflect our view that the company's financial risk profile continues to be "aggressive," based on its aggressive financial policy and still-high leverage, despite its positive free cash flow generation and improved credit measures over the past few years (the company has used cash flows to reduce debt). We also take into consideration MacAndrews & Forbes' majority ownership ability to control the board. In addition, we continue to consider Revlon's business risk profile to be "weak," supported by its participation in the intensely competitive mass- market cosmetics industry and its concentrated distribution focus in the U.S. (the company sells primarily in the mass channel). Outside the U.S., the company sells its products in most distribution channels," S&P added. RATINGS LIST Revlon Consumer Products Corp. Corporate credit rating B+/Stable/-- New Ratings Revlon Consumer Products Corp. $400 million senior unsecured notes due 2021 B Recovery rating 5 REVSTONE INDUSTRIES: Creditors Demand Ch. 11 Trustee ---------------------------------------------------- Lance Duroni of BankruptcyLaw360 reported that unsecured creditors of Revstone Industries LLC moved to appoint a Chapter 11 trustee over the manufacturer's bankruptcy on Monday amid their investigation of the company's owner and chairman, George S. Hofmeister. The motion, filed in Delaware bankruptcy court by Revstone's official committee of unsecured creditors, did not explain the committee's basis for the appointment, which was filed under seal in a separate memorandum, the report related. The move, however, appears to be connected to the committee's investigation of Hofmeister, the report added. About Revstone Industries, Greenwood Forgings, & US Tool & Engineering Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. A motion for joint administration of the cases has been filed. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. RITE AID: Fitch Assigns 'BB-' Rating to New $1.72BB Revolver Loan ----------------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB-/RR1' to Rite Aid Corporation's proposed new $1.725 billion secured revolving credit facility due 2018, $900 million senior secured term loan B due 2020, and $470 senior secured second lien term loan due 2020. The Rating Outlook is Stable. The proceeds will be used to refinance Rite Aid's existing $1.175 billion ABL facility due 2015, $1.039 billion first lien secured term loan due 2014, $410 million first lien secured notes due 2016, and $450 million second lien secured notes due 2016, leaving it with the same mix of first and second lien secured debt post refinancing. Further, the company plans to redeem $186 million of senior unsecured notes due 2013 with cash on hand. The ratings continue to reflect the following: -- Rite Aid's high leverage and operating statistics that significantly trail its two major competitors; -- Strong market share position as the third largest U.S. drug retailer; -- Management's concerted efforts to improve the productivity of its store base and manage liquidity through a series of refinancings that have pushed out debt maturities to 2017, working capital reductions and other cost cutting initiatives. Rite Aid's same store sales have been positive in six of the last eight quarters. Underlying prescription count has been stable at flat to positive 1%, with volume growth in the 3%-4% range over the last year as Rite Aid benefited from the impasse between Walgreens and Express Scripts (ESRX). The strong generic wave boosted gross margins, and EBITDA will surpass $1 billion for the first time in fiscal 2013. However, Fitch Ratings expects that it could be challenging for Rite Aid to maintain EBITDA above $1 billion given potential share losses to larger competitors, ongoing pressure on pharmacy reimbursement rates with less benefit from generics in 2013 and beyond, and giveback of a portion of ESRX volume. Rite Aid's operating metrics still significantly lag those of its largest and well-capitalized competitors, with average weekly prescriptions per store of approximately 1,200 and an EBITDA margin of 4.1% (versus Walgreens' EBITDA margin at 6.6% and CVS's retail EBITDA margin at 10.6%). Beyond the benefit from the generic wave and the recent benefit from gaining script volume from Walgreens, Fitch does not expect meaningful top-line and EBITDA expansion over the next couple of years. Rite Aid has largely been unable to participate in the strong industry growth largely due to capital constraints, and the company's inability to appropriately invest in its stores remains an ongoing concern. The Wellness+ loyalty card program and recent remodeling activity have helped the company to stabilize its prescription volume and see modest front-end growth. However, capital spending remains below levels required to remain competitive, and the company's market share could continue to weaken over time, even in markets where it has a top-three position. Adjusted debt/EBITDAR and EBITDAR/interest plus rent improved modestly in the LTM ended Dec. 1, 2012, to 6.9x and 1.4x, respectively and are expected to end fiscal 2013 at these levels. Credit metrics are expected to be in the 7x-7.5x range in fiscal 2014-2016, assuming same store sales growth in the +/- 1% range and EBITDA in the range of $850 million-$1 billion. At Dec. 1, 2012, Rite Aid had cash of $264 million and excess borrowing capacity of $1,057 million under its credit facility. The company has maintained liquidity in the $850 million to $1.2 billion range for the past 12 quarters. Recovery Considerations The issue ratings shown above are derived from the Issuer Default Rating (IDR) and the relevant Recovery Rating. Fitch's recovery analysis assumes a liquidation value under a distressed scenario of approximately $6 billion on inventory, receivables, owned real estate and prescription files. The $1.725 billion revolving credit facility, term loans, and the $650 million senior secured notes due August 2020 have a first lien on the company's cash, accounts receivable, investment property, inventory and prescription lists, and are guaranteed by Rite Aid's subsidiaries giving them an outstanding recovery (91%-100%). The $1.725 billion revolving credit facility is due to mature in 2018. However, there is a springing maturity in the event that Rite Aid does not repay, refinance or otherwise extend the $500 million 7.5% second lien notes or the $810 million senior notes prior, both due in 2017, to 91 days before their respective maturities. The senior secured credit facility will require the company to maintain a minimum fixed charge coverage ratio of 1.0x only if availability on the revolving credit facility is less than $150 million. Rite Aid's senior secured term loan notes, which have a second lien on the same collateral as the revolver and term loans, are also expected to have outstanding recovery prospects. Given the amount of secured debt in the company's capital structure, the unsecured guaranteed notes are assumed to have below-average recovery prospects (11%-30%) and unsecured notes and convertible bonds are assumed to have poor recovery prospects (0%-10%) in a distressed scenario. Sensitivity/Rating Drivers Positive: A positive rating action is unlikely at this point, given the lack of visibility on EBITDA growth and debt reduction. Negative: A negative rating action could result from deteriorating sales and profitability trends. Fitch currently rates Rite Aid Corporation as follows: -- IDR 'B-'; -- Secured revolving credit facility and term loans 'BB-/RR1'; -- First and second lien senior secured notes 'BB-/RR1'; -- Guaranteed senior unsecured notes 'CCC+/RR5'; -- Non-guaranteed senior unsecured notes 'CCC/RR6'. The Rating Outlook is Stable. RITE AID: Moody's Reviews 'Caa1' CFR for Possible Upgrade --------------------------------------------------------- Moody's Investors Service has placed Rite Aid Corporation's Caa1 Corporate Family Rating and Caa1-PD Probability of Default Rating on review for upgrade. The Speculative Grade Liquidity rating of SGL-3 remains unchanged. At the same time, Moody's assigned a B1 rating to Rite Aid's proposed $1.725 billion asset based revolving credit facility, a B1 to the proposed $900 million first lien term loan, and a B3 to the proposed $470 million second lien term loan. The proceeds from the proposed facilities along with excess cash will be used to repay in full Rite Aid's $1.039 billion first lien term loan due 2014 and $186.3 million senior unsecured notes due 2013 and to refinance its $410 million first lien notes due 2016 and $470 million second lien notes due 2016. The following ratings are assigned and are subject to the successful closing of the transaction and review of final documentation: Proposed $1.725 billion asset based revolving credit facility due 2018 at B1 (LGD 2, 26%) Proposed $900 million first lien term loan due 2020 at B1 (LGD 2, 26%) Proposed $470 million second lien term loan due 2020 at B3 (LGD 4, 57%) The following ratings are placed on review for upgrade and LGD point estimates are subject to change: Corporate Family Rating at Caa1 Probability of Default Rating at Caa1-PD $330 million senior secured first lien term loan due 2018 at B2 (LGD 2, 27%) $650 million 8% senior secured first lien notes due 2020 at B2 (LGD 2, 27%) Senior secured second lien notes due 2017 and 2019 at Caa1 (LGD 4, 58%) Guaranteed senior unsecured notes due 2017 and 2020 at Caa2 (LGD 5, 82%) Senior unsecured notes due 2015, 2027, and 2028 at Caa3 (LGD 6, 95%) The following ratings are affirmed to be withdrawn upon the closing of the transaction and their repayment in full: $1.039 billion senior secured first lien term loan due 2014 at B2 (LGD 2, 27%) $410 million 9.75% senior secured first lien notes due 2016 at B2 (LGD 2, 27%) $470 million 10.375% second lien notes due 2016 at Caa1 (LGD 4, 58%) $186.3 million senior unsecured notes due 2013 at Caa3 (LGD 6, 95%) Ratings Rationale: The review for upgrade was triggered by Rite Aid's announcement that it is pursuing a refinancing of its $1.039 billion first lien term loan due 2014 as well as of some of its higher coupon debt due in 2016. The successful completion of this transaction will eliminate a substantial upcoming maturity. In addition, it will reduce Rite Aid's all in borrowing costs as a result of a significantly lower coupon on about $880 million of debt. The review for possible upgrade also acknowledges the continued improvement in Rite Aid's operating income, a trend which Moody's believes is sustainable. The review for upgrade will focus on the terms of the final closing of the proposed transaction. In particular, the review will look at the amount and maturities of the facilities after closing as well as the pricing. The review for upgrade will also focus on Rite Aid's liquidity and expectations for future operating performance included level of EBIT growth. Should the transaction close as proposed, Moody's expects to raise Rite Aid's Corporate Family Rating one notch to B3 and its Probability of Default rating to one notch to B3-PD. Rite Aid's existing debt issue ratings are also likely to be upgraded by one notch. Additionally upon conclusion of the review, Moody's expects to revisit Rite Aid's Speculative Grade Liquidity rating of SGL-3 which may result in an upgrade of the SGL-3. The assignment of a B1 rating to Rite Aid's proposed $1.725 billion asset based revolving credit facility and $900 million term loan assumes the successful completion of the transaction and is based upon a one notch upgrade of the Corporate Family Rating to B3. The assignment of B3 to Rite Aid's proposed $470 million second lien term loan is also based upon the same assumptions. The B1 rating on the first lien debt -- two notches above the Corporate Family Rating -- also recognizes the credit support provided by the significant amount of debt that ranks less senior in the capital structure. The principal methodology used in this rating 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. Rite Aid Corporation, headquartered in Camp Hill, Pennsylvania, operates over 4,600 drug stores in 31 states and the District of Columbia. Revenues are about $26 billion. ROTHSTEIN ROSENFELDT: Some Creditors May Recoup 100% Under Plan --------------------------------------------------------------- The trustee liquidating the law firm once run by Ponzi schemer Scott Rothstein filed a proposed liquidating Chapter 11 plan designed for full payment to holders of more than $141 million in unsecured claims. Paul Brinkmann, writing for the South Florida Business Journal, reports that Herbert Stettin, the trustee envisions a $182 million payout, which would be 100% for some of the creditors. If approved, TD Bank would get a bar order in the plan that would prevent it from being sued further in regards to Scott Rothstein's Ponzi scheme. TD Bank is also listed as a $132 million subordinated creditor, which surprised some observers, but the chance of TD getting paid is zero, according to a disclosure statement. According to the Business Journal, the plan would culminate three years of bankruptcy court proceedings for RRA. The $182 million involved settlements or clawing back money from TD Bank, Gibraltar Private Bank & Trust, accounting firm Berenfeld Spritzer Shechter & Sheer, the family of auto dealer Ed Morse and Miami businessman Ira Sochet, among others. However, the trustee says in the plan that he only has $79 million on hand now. According to the plan, TD Bank would pay and additional $72.45 million into the bankruptcy estate, but some attorneys said it's odd that the plan contemplates it getting up to $132 million back if all the other creditors are paid in full. The Business Journal notes Bill Scherer, Fort Lauderdale attorney who represented the so-called Razorback investors, said of the plan: "TD Bank is trying to avoid responsibility and punitive damages. They've got a billion dollars worth of exposure out there, which they're trying to settle for $72.45 million." According to Bill Rochelle, the bankruptcy columnist for Bloomberg News, the plan is financed in large part by a settlement of a $1.2 billion lawsuit the trustee filed against TD Bank NA. The complaint alleged that the bank allowed Rothstein to use its name and facilities to deceive investors. The bank settled by agreeing to pay about $72.5 million. Accompanying disclosure materials predict a "significant" recovery by holders of $26 million in subordinated claims. If funds remain after claims are fully paid, the bank receives the excess. Full payment takes into account how some creditors may have recoveries from other sources. Creditors aren't being permitted to recover more than their claims. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case filed a bankruptcy plan and disclosure statement on Aug. 17. The plan was filed and signed by the Committee attorney, Michael Goldberg of Akerman Senterfitt, and not by the court-appointed trustee Herbert Stettin. The plan calls for the creation of a liquidating trust and four classes of claimants. A date for confirmation of the plan was left blank. RS HOLDINGS: Case Summary & 7 Largest Unsecured Creditors --------------------------------------------------------- Debtor: RS Holdings, LLC 5002 Elpine Way Palm Beach Gardens, FL 33418 Bankruptcy Case No.: 13-12575 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Erik P. Kimball Debtor's Counsel: Aaron A. Wernick, Esq. FURR & COHEN 2255 Glades Road # 337W Boca Raton, FL 33431 Tel: (561) 395-0500 Fax: (561) 338-7532 E-mail: awernick@furrcohen.com Scheduled Assets: $958,202 Scheduled Liabilities: $2,202,925 A copy of the Company's list of its seven largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb13-12575.pdf The petition was signed by Sriram Srinivasan, managing member. SAN DIEGO HOSPICE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: San Diego Hospice & Palliative Care Corporation 4311 Third Avenue San Diego, CA 92103 Bankruptcy Case No.: 13-01179 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Judge: Christopher B. Latham Debtor's Counsel: Jeffrey Isaacs, Esq. PROCOPIO, CORY, HARGREAVES & SAVITCH, LLP 525 B. Street, Suite 2200 San Diego, CA 92101 Tel: (619) 238-1900 E-mail: jeffrey.isaacs@procopio.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by William H. Parker, chief operating officer. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wells Fargo - Credit Card Loan $4,000,000 Payment Remittance Center P.O. Box 54349 Los Angeles, CA 90054-0349 Brookwood Crossroads Investors Commercial $2,557,034 72 Cherry Hill Drive, 2nd floor Property Lease Beverly, MA 01915 Price Family Charitable Fund Loan $800,000 Attn: Chris Stockton 7979 Ivanhoe, Suite 520 La Jolla, CA 92037 Heatlh Insurance IBNR ? Cigna Employee Health $496,125 231 La Salle Street Insurance Chicago, IL 60604 Glenview Assisted Living/Glenb Glenbrook Facility $347,424 1950 Calle Barcelona Carlsbad, CA 92009 Hospiscript Services, LLC Patient Care $179,873 Cigna Employee Health $171,000 Insurance Employment Development Unemployment Insurance $162,266 Medline Industries, Inc. Medical Supplies $158,087 Cardinal Distribution Pharmacy Supplies $124,690 Scripps Health Patient Care $114,042 UCSD Medical Center Patient Care $100,723 Outcome Resources, LLC Medical Equipment $95,977 Ghana Education Grant $92,000 Cyprus Grant $80,160 Cigna Medical Insurance $77,696 Plan Withholding Deliver-It, LLC Delivery of $76,955 Pharmaceuticals The Corridor Group, Inc. Consultant $63,730 Allscripts Software Maintenance $53,132 T-Mobile Phone $51,781 SATCON TECHNOLOGY: Fails to Find Buyer, Seeks Ch. 7 Liquidation --------------------------------------------------------------- After failing to find a buyer or funding to maintain operations, Satcon Technology Corp. is asking the Bankruptcy Court to convert its bankruptcy case to liquidation proceedings under Chapter 7. Since entering court protection in October, Boston-based Satcon and its subsidiaries have been financing their combined Chapter 11 cases with cash collateral in the hope of landing either a buyer or additional capital, but access to those funds was set to expire Wednesday after a planned sale failed, Jamie Santo of BankruptcyLaw360 reported. Satcon, which once employed nearly 500 people to assemble and sell solar-panel products such as inverters, will shut down and let the bankruptcy court liquidate its business, according to reporting by Katy Stech at Dow Jones' DBR Small Cap. Bloomberg News' Bill Rochelle recounts that under court-approved sale procedures, bids were due Feb. 1. The bank, holding $14.5 million in secured debt, concluded that none of the bids was satisfactory. The bank gave notice that it wouldn't consent to the use of cash beyond Feb. 6. With no acceptable buyer and no right to use cash, the company said the "only option" is to convert to liquidation in Chapter 7, according to Bloomberg. BankruptcyData reported that Satcon withdrew from U.S. Bankruptcy Court consideration its Jan. 23 emergency motion for approval of revised bid and sale procedures with respect to the sale of substantially all of the Debtors" assets. The Debtors also filed a notice with the Court that the auction related to the sale has been canceled, the report added. 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. SAVE MOST: Can Access JPMC Cash Collateral Until June 30 -------------------------------------------------------- The Bankruptcy Court has authorized Save Most Desert Rancho, Ltd., to use cash collateral of JPMorgan Chase Bank, N.A., until June 30, 2013, with respect to JPMC's claim secured by the Debtor's Laguna Hills, California property. As stipulated, on the first day of each month, commencing effective Feb. 1, 2012, the Debtor will pay to JPMC an amount equal to interest on the Loan calculated at the non-default rate of interest as well as any impounded amounts due under the Loan Documents. JPMC, will, to the extent of the amount of cash collateral used by the Debtor pursuant to this Order, a first priority replacement lien in (a) all pre-petition and post-petition Rents; (b) all leases and occupancy agreements affecting the Debtor's Laguna Hills Property; and (c) all associated proceeds and products. About Save Most Desert Rancho Save Most Desert Rancho, Ltd., filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-23173) in Santa Ana, California on Nov. 15. The Laguna Hills-based company disclosed $10,134,997 in assets and $14,874,770 in liabilities as of the Chapter 11 filing. The petition was signed by Charles Kaminskas for Brighton Park, LP, general partner. Michael G. Spector, Esq., in Santa Ana, Calif., represents the Debtor as counsel. SAVE MOST: SDCCU Consents to Use of Cash Collateral Until May 31 ---------------------------------------------------------------- Save Most Desert Rancho, Ltd., asks the Bankruptcy Court for authorization to use cash collateral of Secured Creditor San Diego County Credit Union, through May 31, 2013. SDCCU assets that the Note issued by the Debtor in the original principal amount of $9,730,000 is secured by a Deed of Trust on the Debtor's real and personal property in Riverside County, commonly known as 200 South Main Street, Corona, California, as well as an assignment of Rents on the Property. SDCCU consents to the use of its cash collateral provided: * Use of its cash collateral will be limited to the payment of cash operating expenses approved by the Lender. * As adequate protection, Lender will be granted replacement liens in all of the Debtor's postpetition revenue collected form the Property. * Should the protections granted to the Lender be inadequate, the Lender may seek allowance of claims against the Debtor's estate with the priority described in Section 507(b) of the Bankruptcy Code. About Save Most Desert Rancho Save Most Desert Rancho, Ltd., filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-23173) in Santa Ana, California on Nov. 15. The Laguna Hills-based company disclosed $10,134,997 in assets and $14,874,770 in liabilities as of the Chapter 11 filing. The petition was signed by Charles Kaminskas for Brighton Park, LP, general partner. Michael G. Spector, Esq., in Santa Ana, Calif., represents the Debtor as counsel. SCHOOL SPECIALTY: Feb. 25 Final Hearing on $50MM Loan Plus Roll-Up ------------------------------------------------------------------ School Specialty Inc., won interim approval of its request to obtain $50 million of DIP financing from Bayside Finance LLC, the agent for the prepetition term loan lenders. The judge will consider final approval of the DIP financing at a hearing Feb. 25, 2013. Various parties already conveyed objections at the Jan. 31 hearing to consider interim approval. The U.S. Trustee says it does not object to funding to the extent actually necessary to stabilize the Debtors' business pending a final hearing but objected to attempts in the proposed interim order that provides the lenders with a vehicle to roll-up the prepetition secured debt. The Steering Committee of Convertible Noteholders of School Specialty, Inc., holding approximately 99% of the $157.5 million face amount of the unsecured 3.75% Convertible Subordinated Debentures due 2026, said that it can provide alternative financing on a non-priming basis to the Debtors. The Steering Committee recounts that on Jan. 23, 2013, it delivered a commitment to provide the same $50 million of new capital offered by Bayside at a substantially lower interest rate (9.5% instead of 15.5%), without the $1.65 million in fees and potential $1.5 million "break-up fee" required under the Bayside DIP Facility, on a junior third lien basis, and fully convertible into equity on the effective date of a plan of reorganization (the "Junior DIP Facility"). According to the Steering Committee, the fact that its proposed Junior DIP Facility is convertible into equity in a reorganized debtor rather than required to be repaid preserves liquidity for the reorganized estates. Moreover, its notes that the Junior DIP Facility does not circumvent the Debtors' exercise of their fiduciary obligations to maximize the value of their estates for the benefit of all creditors, unlike the proposed roll-up of the Bayside prepetition Term Loan and a forced sale to Bayside in only 56 days. "If the Bayside DIP Facility is approved, the Debtors would be effectively precluded from considering any alternative, superior restructuring proposals, including a plan that would provide a refinancing, negotiated settlement, or alternative treatment of Bayside's prepetition debt under Section 1129(b) of the Bankruptcy Code," the Steering Committee said in court filings. Notwithstanding the objections, Bankruptcy Judge Kevin Carey gave interim approval of the DIP financing, acknowledging that the Debtors have an immediate need to obtain cash to continue operations. Written objections to the final approval of the DIP loan are due Feb. 15. The Steering Committee of Noteholders is represented by: Thomas F. Driscoll III, Esq. Ian Connor Bifferato, Esq. Thomas F. Driscoll III, Esq. BIFFERATO LLC 800 N. King Street P.O. Box 2165 Wilmington, Delaware 19899-2165 Telephone: (302) 225-7600 Facsimile: (302) 254-5383 - and - Carmen H. Lonstein Shima S. Roy Erin E. Broderick BAKER & McKENZIE LLP 300 East Randolph Street, Suite 5000 Chicago, IL 60601 Tel: (312) 861-8000 Fax: (312) 861-2899 E-mail: carmen.lonstein@bakermckenzie.com shima.roy@bakermckenzie.com erin.broderick@bakermckenzie.com Summary of Bayside DIP Facility The postpetition financing consists of (i) a credit facility of $50 million of new money funding from Bayside, (ii) a conversion or roll up- of the $94.7 pre-bankruptcy term loan owed to Bayside into a post-bankruptcy secured facility, and (iii) a $175 million revolving credit to subsume the pre-bankruptcy revolver -- ABL Roll-Up. Prepetition, the Debtors owed $92 million under a term loan were Bayside Financial is the agent. The Debtors also owe $47.6 million on a secured revolving credit with Wells Fargo Capital Finance LLC as agent. The Debtors said the DIP facilities are the best and only viable financing options available to the Debtors. The Debtors said the Court's approval of the DIP facilities and the use of cash collateral will enable the Debtors to pursue approval of the sale of their assets without delay. The DIP lenders will provide $25 million upon interim approval of the DIP facility. The DIP facility will incur interest at LIBOR rate +14% per annum. The default rate is +3% per annum, calculated on an actual 360 day basis. The commitment fee is $1,000,000 and the closing fee is $500,000. The DIP facility will mature June 30, 2013. But the DIP lenders under the Bayside DIP facility have set milestones, including: -- Entry of the bid procedures order on or before Feb. 8, 2013; -- Deadline of submission of bids on or before March 19, 2013; -- Auction date on or before March 25, 2013; -- Sale hearing to approve auction results on or before March 27, 2013; -- Closing date for sale to occur on ore before April 11, 2013. The ABL DIP Facility requires an auction before March 29, 2013, a sale order by March 31, and a closing date by April 15, 2013. About School Specialty Based in Greenville, Wisconsin, School Specialty is a supplier of educational products for kindergarten through 12th grade. Revenue in 2012 was $731.9 million through sales to 70 percent of the country's 130,000 schools. School Specialty and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 (Bankr. D. Del. Lead Case No. 13-10125) on Jan. 28, 2013, to facilitate a sale to lenders led by Bayside Financial LLC, absent higher and better offers. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. Alvarez & Marsal North America LLC is the restructuring advisor and Perella Weinberg Partners LP is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. The petition estimated assets of $494.5 million and debt of $394.6 million. SCHOOL SPECIALTY: Wins Approval for KCC as Claims & Notice Agent ---------------------------------------------------------------- School Specialty Inc. and its affiliates obtained an order appointing Kurtzman Carson Consultants LLC as claims and noticing agent. KCC will assume full responsibility for the distribution of notices and maintenance, processing and docketing of proofs of claim filed in the Debtors' Chapter 11 cases. Although the Debtors have not yet filed their schedules of assets and liabilities, they anticipate there will be in excess of 16,000 entities to be noticed. The Debtors provided a $10,000 retainer to KCC. About School Specialty Based in Greenville, Wisconsin, School Specialty is a supplier of educational products for kindergarten through 12th grade. Revenue in 2012 was $731.9 million through sales to 70 percent of the country's 130,000 schools. School Specialty and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 (Bankr. D. Del. Lead Case No. 13-10125) on Jan. 28, 2013, to facilitate a sale to lenders led by Bayside Financial LLC, absent higher and better offers. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. Alvarez & Marsal North America LLC is the restructuring advisor and Perella Weinberg Partners LP is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. The petition listed assets of $494.5 million and debt of $394.6 million. SCHOOL SPECIALTY: Removes Break-Up Fee, Still Seeks Quick Sale -------------------------------------------------------------- School Specialty Inc. at a hearing on Feb. 11 at 11:00 a.m. (ET) will seek approval of revised procedures for an auction where term loan lenders would buy the assets in exchange for secured debt, unless another party steps in. The Debtors have signed an asset purchase agreement dated Jan. 28, 2013, with Bayside School Specialty LLC, a company formed by prepetition term loan lenders. Bayside's offer will be $95 million in the form of a credit bid in an amount of the outstanding obligation under the prepetition term loan and the DIP loans. The original procedures provided that, to participate in the auction, interested parties' initial offers must exceed Bayside's stalking horse offer by at least $4.5 million. The revised procedures reduce the overbid amount to $1.65 million from $4.5 million. The Debtors, however, have retained the quick sale timeline they originally proposed. The Debtors propose that the deadline for initial bids be set March 19 and the auction be set for March 25 at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York. The Debtors will obtain approval of the sale to the winning bidder by March 27. The original procedures proposed that Bayside will receive a $2.85 million break-up fee, which represents 3% of the purchase price, in the event it is outbid at the auction. The revised procedures removed the break-up fee and stated that Bayside will only be entitled to an expense reimbursement of up to $1 million. Interested parties can contact: Derron Slonecker Agnes Tang PERELLA WEINBERG PARTNERS 767 Fifth Avenue New York, NY Tel: 212-287-3361 212-287-3168 E-mail dslonecker@pwpartners.com atang@pwpartners.com Bayside as Lead Bidder The company blamed the bankruptcy on cuts in state budgets for education. It said the global financial crisis that began in 2008 has had an extremely negative impact on the funding that is available for schools. On Jan. 4, 2013, the Debtors failed to comply with the month-end $20 million liquidity covenant triggered events of default under their revolving senior secured asset-credit facility and their term loan. Accordingly, Bayside Financial LLC, as administrative agent and collateral agent, accelerated the debt under the term loan. Bayside Financial is the agent for term loan lenders owed $92 million. The Debtors also owe $47.6 million on a secured revolving credit with Wells Fargo Capital Finance LLC as agent. In addition, there is $157.5 million owing on convertible subordinated debentures. The Debtors determined that a going concern sale of the assets would likely provide the most effective and efficient means to maximize a return for the Debtors, their estates and all parties- in-interest. Notwithstanding the deal with Bayside, to ensure that the Debtors receive the highest or best offer for the assets, upon approval of the bid procedures, the Debtors said they will launch a marketing process and contact a wide range of potential strategic investors and financial investors, including existing stakeholders that might be interested in purchasing some or all of the Debtors' assets. About School Specialty Based in Greenville, Wisconsin, School Specialty is a supplier of educational products for kindergarten through 12th grade. Revenue in 2012 was $731.9 million through sales to 70 percent of the country's 130,000 schools. School Specialty and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 (Bankr. D. Del. Lead Case No. 13-10125) on Jan. 28, 2013, to facilitate a sale to lenders led by Bayside Financial LLC, absent higher and better offers. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. Alvarez & Marsal North America LLC is the restructuring advisor and Perella Weinberg Partners LP is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. The petition listed assets of $494.5 million and debt of $394.6 million. SEA LAUNCH: Boeing Co. Says Partners Owe $350M Over Satellite Co. ----------------------------------------------------------------- Sindhu Sundar of BankruptcyLaw360 reported that The Boeing Co. hit its Russian and Ukrainian Sea Launch LLC joint venture partners with a lawsuit Friday accusing them of skipping out on more than $350 million they are allegedly on the hook for over the failure of a commercial satellite launching company that went bankrupt in 2009. In a complaint filed in California federal court, the Chicago- based aerospace giant says its Russia-based partner S.P. Korolev Rocket and Space Corp. Energia and Ukrainian partner KB Yuzhnoye refused to carry out their obligations under their joint venture agreement, the report related. About Sea Launch Sea Launch Company, L.L.C., is a satellite-launch services provider that offers commercial space launch capabilities from the Baikonur Space Center in Kazakhstan. Its owners include Boeing Co., RSC Energia, and Aker ASA. Sea Launch filed for Chapter 11 on June 22, 2009 (Bankr. D. Del. Case No. 09-12153). Joel A. Waite, Esq., and Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, serve as the Debtor's counsel. At the time of the filing, the Company said its assets range from US$100 million to US$500 million and debts are at least US$1 billion. SIERRA NEGRA: Disclosure Statement Hearing Tomorrow --------------------------------------------------- The Bankruptcy Court will convene a hearing Feb. 8 to consider approval of the disclosure statement explaining the Chapter 11 Plan for Sierra Negra Ranch, LLC, as well as a motion by creditor Global Water Resources, Inc., for dismissal of the bankruptcy case, unless the parties agree to another delay. The hearing on the Debtor's plan and the lender's dismissal motion was moved to Feb. 8 pursuant to a stipulation submitted by the parties. There's also a pending motion by Global to force the Debtor to reject, or assume and cure their executory contract. The Plan, as proposed, contemplates a restructuring of the Arbitration Award dated April 20, 2012, against Debtor, which resulted from protracted Arbitration Proceedings between Debtor and Global, and full payment of all unsecured claims. The Plan specifically provides for these terms: * The allowed secured claim of global Water (Class 1) with an estimated claim of $4,621,128, and allowed general unsecured claims (Class 4), with estimated claims of $210,000, are the only impaired classes and are entitled to vote to accept or reject the Plan. * Other secured claims (Class 2), priority unsecured claims (Class 3), and equity securities (Class 5) are unimpaired. * For the first 24 months after the Effective Date, Reorganized Debtor will distribute to Global interest-only payments. Beginning on the 25h month through the 5th anniversary of the Effective Date, Reorganized Debtor will distribute to Global monthly principal and interest payments on the outstanding balance of the claim amortized over a period of 30 years at the Global Restated Interest Rate. * Each creditor with an allowed general unsecured claim will, in full and final satisfaction of such claim, be paid in full in cash, plus post-effective date interest at the unsecured interest rate, on the 90th Business Day after the Effective Date. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/sierranegra.DS.doc100.pdf Global in its dismissal motion says the Debtor has no business to reorganize and this is a two-party dispute that should be resolved outside of the bankruptcy court. Global also says the Debtor filed its petition solely as a tactic to stay a sheriff's sale set for Aug. 23 and delay payment of Global's claim. Global asserts the bankruptcy case was filed in bad faith. Global says the Debtor has very limited cash on hand and does not have a way of accumulating more. The Debtor stayed the sale, preventing the prompt resolution of a two-party dispute that was about to be resolved. The dispute between Global and the Debtor was resolved by the arbitration award and resulting judgment. About Sierra Negra Las Vegas, Nevada-based Sierra Negra Ranch, LLC, is a limited liability company organized in November 2004 to purchase an aggregate of approximately 2,757.5 acres of undeveloped land (26 acres of which were subsequently deeded for use as a regional sewer and water plan location) in the Tonopah area of incorporated Maricopa County, west of Phoenix, Arizona. Debtor's membership interests are held by SNR Management holding a 40% interest and various other accredited investors who collectively hold the remaining 60% interest. It filed a bare-bones Chapter 11 petition (Bankr. D. Nev. Case No. 12-19649) in Las Vegas on Aug. 21, 2012. Candace C. Clark, Esq., and Gerald M. Gordon, Esq., at Gordon Silver, in Las Vegas, Nev., represent the Debtor as counsel. In its amended schedules, the Debtor disclosed $26,197,986 in total assets and $4,801,931 in total liabilities. The Debtor is "Single Asset Real Estate" as defined in 11 U.S.C. Sec 101(51B) and its asset is located in Maricopa County, Arizona. SK REAL PROPERTY: Case Summary & 2 Unsecured Creditors ------------------------------------------------------ Debtor: SK Real Property Associates, L.L.C. 2855 Eudora Trail Duluth, GA 30097 Bankruptcy Case No.: 13-52395 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Leslie M. Pineyro, Esq. JONES AND WALDEN, LLC 21 Eighth Street, NE Atlanta, GA 30309 Tel: (404) 564-9300 Fax: (404) 564-9301 E-mail: lpineyro@joneswalden.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its two unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ganb13-52395.pdf The petition was signed by Song U. Kye, manager. SOUTHERN MODULAR: Court Dismisses Involuntary Chapter 11 Case ------------------------------------------------------------- The Bankruptcy Court has granted the motion of Southern Modular Industries of Texas, LP, for the dismissal of its involuntary Chapter 11 case. At the hearing, the Debtor presented testimony indicating that there are no funds available for distribution to creditors. The petitioning creditors did not oppose the dismissal. The Debtor earlier told the Court that the involuntary petition should be dismissed because all of its assets were secured by a first lien held by Beach Business Bank, Costa Mesa, California, in the amount of $1,250,000. With no employees, assets, and/or business operations, conversion to Chapter 7 would be inappropriate, the Company said. Southern Modular also said it has no plan(s) and/or means to reinitiate business operations. "It is in the best interests of Southern Modular and its creditors to dismiss the case since there is no business to reorganize, and a Chapter 7 trustee would not have anything to distribute to the unsecured creditors and the administration would cause the estate to incur additional administrative expenses it cannot pay," the Company said in its filing. About Southern Modular Crawford Electric Supply, American Builders & Contractors Supply Co. Inc., and Southwest Texas Distribution Inc. signed a Chapter 11 bankruptcy petition to place Southern Modular Industries of Texas, LP, into involuntary bankruptcy (Bankr. S.D. Tex. Case No. 12-37798) on Oct. 22, 2012 in Houston. On Oct. 29, 2012, Chief U.S. Bankruptcy Judge Jeff Bohm signed an order approving the transfer of the bankruptcy case to Bankruptcy Judge Letitia Z. Paul. SPANSION INC: Employee Not Entitled to Retention Bonus ------------------------------------------------------ Bankruptcy Judge Kevin J. Carey sustained the Claim Agent's objection to claim number 1193 filed by John Darilek, a former employee of Spansion Inc. According to Judge Carey, Mr. Darilek is not entitled to the bonus payment and Claim number 1193 should be disallowed and expunged in full. Mr. Darilek sought payment of $23,557 for retention bonus and asserted that part of the claim ($10,950) is entitled to priority treatment under Bankruptcy Code Sec. 507(a)(4). The Claim Agent, appointed pursuant to Spansion's confirmed Second Amended Joint Plan of Reorganization, seeks to disallow and expunge the Claim in full since Mr. Darilek was no longer employed by the Debtors on the date bonus awards were paid. Mr. Darilek filed a pro se response to the Claim Objection, arguing that the Debtors were required to pay the retention bonus because his termination was part of the Debtors' reduction in workforce, rather than Mr. Darilek's voluntary termination of employment. Spansion implemented a reduction in work force about a week before seeking bankruptcy protection in 2009. Mr. Darilek was one of 736 employees terminated in the RIF. A copy of the Court's Feb. 4, 2013 Memorandum is available at http://is.gd/T7Q5jVfrom Leagle.com. About Spansion Spansion Inc. -- http://www.spansion.com/-- is a Flash memory solutions provider, dedicated to enabling, storing and protecting digital content in wireless, automotive, networking and consumer electronics applications. Spansion, previously a joint venture of AMD and Fujitsu, is the largest company in the world dedicated exclusively to designing, developing, manufacturing, marketing, selling and licensing Flash memory solutions. Spansion Inc., Spansion LLC, Spansion Technology LLC, Spansion International, Inc., and Cerium Laboratories LLC filed voluntary petitions for Chapter 11 bankruptcy on March 1, 2009 (Bankr. D. Del. Lead Case No. 09-10690). On Feb. 9, 2009, Spansion's Japanese subsidiary, Spansion Japan Ltd., voluntarily entered into a proceeding under the Corporate Reorganization Law (Kaisha Kosei Ho) of Japan to obtain protection from its creditors as part of the company's restructuring efforts. None of Spansion's subsidiaries in countries other than the United States and Japan are included in the U.S. or Japan filings. Michael S. Lurey, Esq., Gregory O. Lunt, Esq., and Kimberly A. Posin, Esq., at Latham & Watkins LLP, served as bankruptcy counsel. Michael R. Lastowski, Esq., at Duane Morris LLP, served as the Delaware counsel. Epiq Bankruptcy Solutions LLC, is the claims agent. The United States Trustee appointed an official committee of unsecured creditors in the case. As of Sept. 30, 2008, Spansion disclosed total assets of US$3,840,000,000, and total debts of US$2,398,000,000. Spansion Japan Ltd. filed a Chapter 15 petition on April 30, 2009 (Bankr. D. Del. Case No. 09-11480). The Chapter 15 Petitioner's counsel is Gregory Alan Taylor, Esq., at Ashby & Geddes. Spansion Japan had US$10 million to US$50 million in assets and US$50 million to US$100 million in debts. Spansion submitted its first plan of reorganization on Oct. 26, 2009, and gained approval from the U.S. Bankruptcy Court on its amended disclosure statement on Dec. 22, 2009. Spansion received confirmation from the U.S. Bankruptcy Court for its plan on April 16, 2010, and emerged from Chapter 11 protection May 10, 2010. Spansion entered Chapter 11 reorganization with more than $1.5 billion in debt. Spansion emerged a well-capitalized company with less than $480 million in debt and roughly $230 million in cash, which is supplemented with an undrawn credit line of up to $65 million. SPEEDY CASH: S&P Affirms 'B' Issuer Credit Rating ------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B' issuer credit rating on Speedy Cash Holdings Corp. (SC). The outlook remains stable. At the same time, S&P affirmed its 'B' issue credit and '4' recovery ratings on the firm's proposed upsized $440 million senior secured notes. The ratings affirmation follows SC's agreement to acquire Wage Day Advance Ltd., a U.K.-based Internet payday lender. "After the acquisition, we estimate that SC's debt to adjusted EBITDA and adjusted EBITDA to interest expense on a pro forma basis will be 3.5x-4.0x and 2.5x-3.0x, respectively, commensurate with the current ratings," said Standard & Poor's credit analyst Igor Koyfman. (We adjusted EBITDA for operating leases and nonrecurring items.) "Although S&P believes that the acquisition will help expand SC's geographic reach, S&P views online small- dollar lending as highly competitive and barriers to entry as limited, adding significant uncertainty about the performance of the acquired business." SC is planning to finance the acquisition by raising $100 million senior secured notes under its existing indenture. It will pay about $78 million (GBP49 million) up front and potentially up to GBP56 million more, contingent on Wage Day's ability to meet specific performance objectives during full-year 2013 and 2014. Even if Wage Day meets the high-end performance objectives, S&P expects SC to maintain debt to adjusted EBITDA of less than 4.0x and adjusted EBITDA to interest expense of more than 2.5x. The outlook is stable. S&P could lower the rating if SC's credit measures deteriorate--for example, because of adverse legislative or regulatory actions that lead to financial underperformance or a large debt-funded acquisition that does not produce proportionate EBITDA. Specifically, S&P could lower the rating if its expectation for debt to adjusted EBITDA exceeds 5.0x or if EBITDA to interest expense falls to less than 2.0x. S&P could raise the rating if SC increases its product and geographic diversification without significantly increasing leverage. Specifically, S&P could upgrade SC if it successfully integrates Wage Day and its other recent acquisition and continues to establish a strong financial track record over the next few years. STARZ LLC: S&P Affirms 'BB' Rating on Senior Notes Due 2019 ----------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BB' issue-level rating and '4' recovery rating on Starz LLC's senior notes due 2019. The '4' recovery rating indicates S&P's expectation of average (30% to 50%) recovery for debtholders in the event of a payment default. Starz is proposing a $150 million add-on to the existing $500 million notes. The company intends to use the proceeds from the transaction to reduce outstanding borrowing on its $1 billion revolving credit facility due 2016. Starz drew $550 million under its revolving credit facility to help fund a $1.8 billion cash distribution to Liberty Media Corp. in connection with its spin-off from Liberty Media in January 2013. Pro forma for the cash distribution to Liberty Media, adjusted debt leverage and EBITDA interest coverage as of Sept. 30, 2012, were 2.7x and 7.1x, respectively. S&P expects debt leverage will remain near its current level at the end of 2013. S&P is expecting low- to mid-single-digit percentage revenue growth in 2013 from subscriber increases and resumption of growth at the company's distribution and animation businesses. However, S&P is expecting a low-single-digit percentage decline in EBITDA due to higher investment in original programming and library content. RATINGS LIST Starz LLC Corporate Credit Rating BB/Stable/-- Ratings Affirmed; Recovery Ratings Unchanged Starz LLC Senior Secured $650 mil notes due 2019 BB Recovery Rating 4 SUNSHINE HOTELS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Sunshine Hotels, LLC dba Springhill Suites 3023 E. Andy Devine Avenue Kingman, AZ 86401 Bankruptcy Case No.: 13-01560 Affiliate that simultaneously sought Chapter 11 protection Debtor Case No. ------ -------- Sunshine Hotels II, LLC 13-01561 Chapter 11 Petition Date: February 4, 2013 Court: U.S. Bankruptcy Court District of Arizona (Yuma) Judge: Brenda Moody Whinery Debtor's Counsel: John R. Clemency, Esq. GALLAGHER & KENNEDY, P.A. 2575 East Camelback Road, Suite 1100 Phoenix, AZ 85016 Tel: (602) 530-8040 E-mail: john.clemency@gknet.com Sunshine Hotels' Scheduled Assets: $9,686,801 Sunshine Hotels' Scheduled Liabilities: $5,810,923 Sunshine Hotels II's Scheduled Assets: $21,180,523 Sunshine Hotels II's Scheduled Liabilities: $13,060,960 The petitions were signed by Nilay S. Patel, member manager. A. A copy of Sunshine Hotels' list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/azb13-01560.pdf B. Sunshine Hotels II's list of its 20 largest unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ U.S. Foods Vendor $5,271 File 6993 Los Angeles, CA 90074 Compwest Insurance Co. Workers Comp $4,802 Dept. 9669 Insurance Los Angeles, CA 90084-9669 Professional Cleaners Services $3,107 10751 Redlands Avenue Hesperia, CA 92345 Charter Business Communications Services $2,696 Bijal Patel Wages $2,542 AETNA Services $1,876 Laura Crites Wages $1,349 Travis Navarro Wages $1,192 Derek Jones Wages $1,101 Southern Wine & Spirits Vendor $789 Magic Touch Pool Services Services $655 Isidro Coronel Wages $604 Jonathan Vargas Wages $574 Young's Market Company LLC Services $567 C&T Event Decorators Services $559 Rachel Klein Wages $541 Erika Rojas Wages $518 Sarah Stitzer Wages $508 Walters Wholesale Electric Co. Services $492 Refrigeration Guarantee Services $480 TEXAS WYOMING: Former President & COO Allowed $162,500 in Claims ---------------------------------------------------------------- Bankruptcy Judge D. Michael Lynn ruled Charles C. Lawrence, the former consulting director, president, and chief operating officer for Texas Wyoming Drilling Inc., is entitled to a general unsecured claim for $162,500, consisting of $130,000 in salary plus $32,500 in benefits. Mr. Lawrence filed the Claim on Oct. 13, 2009, contending he was involuntarily terminated on the date Texas Wyoming's Chapter 11 case was converted to Chapter 7. Mr. Lawrence asserts is entitled to an administrative claim in the amount of $232,750. John Dee Spicer, the chapter 7 trustee, objected to Mr. Lawrence's Claim No. 82. A copy of the Court's Feb. 4, 2013 Memorandum Opinion is available at http://is.gd/Mcp6Kvfrom Leagle.com. About Texas Wyoming Drilling Drilling contractor and service company Texas Wyoming Drilling, Inc. -- http://www.texaswyoming.com-- sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 07-41650) on April 16, 2007, and was represented by Jeffery D. Carruth, Esq., Mark A. Castillo, Esq., and Stephanie Diane Curtis, Esq., at The Curtis Law Firm, P.C., in Dallas. The Debtor estimated its assets and debts at more than $1 million to $100 million at the time of the filing. The Bankruptcy Court confirmed Texas Wyoming's Chapter 11 plan on Nov. 13, 2008, and that plan was declared effective before the end of the year. The Reorganized Debtor commenced post-confirmation litigation (Bankr. N.D. Tex. Adv. Pro. No. 09-04015) on Apr. 29, 2009, against recipients of dividends, asserting that dividend payments were avoidable as fraudulent transfers. On July 14, 2009, following a material default under the chapter 11 plan, the Court, sua ponte based on 11 U.S.C. Sec. 1112(b)(4)(N), converted the Reorganized Debtor's chapter 11 case to a Chapter 7 proceeding, and the U.S. Trustee appointed John Dee Spicer to serve as the Chapter 7 Trustee. The recipients moved for summary judgment, arguing, inter alia, that debtor lacked standing to pursue the avoidance claims. The Honorable Dennis Michael Lynn disagrees, and gave Mr. Spicer the green light to pursue his claims against the recipients. TOPAZ POWER: Moody's Rates $590 Million Senior Secured Loans 'B1' ----------------------------------------------------------------- Moody's Investors Service assigned a rating of B1 to approximately $560 million of 7-year senior secured term loans and $30 million of 4-year senior secured revolving credit facilities for Topaz Power Holdings, LLC. Proceeds will be used to repay approximately $528 million of term loans currently scheduled to mature in November 2014 along with balances outstanding under a $45 million revolving credit facility terminating in May of this year and to pay expenses and swap breakage. The outlook for Topaz has been revised to stable from negative. Ratings Rationale: The B1 rating is driven primarily by the inherent volatility underlying Topaz's ability to generate cash flow, which is highly dependent on merchant power sales. The company's existing hedges, which are in place for about 1,107 MWs of its 1,883 MW portfolio, expire at the end of 2014; as a result, over 80% of gross margins generated over the life of the financing are expected to be derived from the sale of merchant energy. The rating also considers the relatively modest leverage employed in the project's capital structure and projected cash flow metrics that generally score toward the upper end of the B range indicated in Moody's rating methodology for Power Generation Projects (the Methodology) in most years. The rating and stable outlook also reflect the meaningful reduction in refinancing risk that is expected as a result of the maturity extensions of its term loan and its revolving credit facilities and considers the improving fundamentals for power sales in the Electric Reliability Council of Texas (ERCOT) market as a result of growing demand and declining reserve margins. The rating and stable outlook further recognizes the successful 2012 restructuring of Topaz's hedges, which resolved issues with its counterparty and enabled Topaz to maintain cash flow stability on a portion of its portfolio through 2014. The rating and outlook consider the multi-asset nature of the portfolio, which mitigates operational risk to some degree as well as structural protections that remain in place for the lenders, including a 100% sweep of excess cash flow for debt repayment and six month cash funded debt service reserve. Moody's notes however that, as currently contemplated, the refinancing will provide some additional flexibility to Topaz in the areas of asset sales and change of control and will also allow the cash funded debt service reserve to be replaced with a letter of credit drawn under the revolving credit facility. Moody's views these revisions as a weakening of lender protections. Although cash flows from Topaz's 335 MW Barney Davis Unit 1 and 674 MW Barney Davis Unit 2, along with 98 MWs of peaking capacity at Laredo 4 remain hedged through 2014, hedges on its 678 MW Nueces Bay expired at the end of 2012. The terms of the Barney Davis hedges were also revised to be financial rather than physical contracts, adding a modest level of potential cash flow variability to the project. Based on Topaz's base case projections, over the life of the financing, less than 15% of the portfolio's projected gross margins are expected to be derived from hedged assets. In a less robust power pricing scenario examined by Moody's, hedged margins make up less than 20% of the total over the life of the financing. The rating recognizes the substantial amount of equity that is incorporated into the project's capital structure (greater than 50%) and the continued deleveraging that will occur as 100% of excess cash flow (in excess of $15 million that may be retained) is required to repay debt; however, the rating also considers that the pace of debt repayment has not been as robust as assumed at the time of the original 2008 financing, and recognizes the future pace of repayment is highly dependent on merchant market conditions. The rating considers Topaz's recent financial and operational performance which reflects the impacts of continuing weak power markets and recent unscheduled outages. As a result, absent the refinancing, the company anticipates it will be in violation of its existing facilities financial covenants when it reports results for the period ending December 31, 2012. The most significant outages involved unscheduled repairs due to turbine blade cracking in the GE 7FA gas turbines that are installed at Barney Davis Unit 2 and Nueces Bay. GE has identified the problem as a fleet wide issue; and Topaz has been adhering to published guidelines for inspections and repairs. According to the independent engineer, a root cause for at least a portion of the problem has now been determined by GE and Topaz has plans in place for future monitoring and modifications which have been incorporated into its operating and maintenance budgets. All of the engines are covered by long term service agreements with GE. The stable outlook assumes the potential covenant violations, and the upcoming May 2013 maturity of Topaz's existing revolving credit facility, will be addressed by either the refinancing, or by amendment and extension of the existing revolving credit facility. Given the project's current level of merchant exposure, the rating is unlikely to be upgraded in the near term. Longer term, there could be upward pressure on the rating if it were to enter additional hedge agreements locking in cash flows at levels management is currently expecting, or if debt reduction were to occur at a significantly faster pace than anticipated. Downward rating pressure could develop if the refinancing or amendment and extension of credit facilities are not completed as anticipated. The rating could also be revised downward if Topaz experiences significant operating challenges or if financial metrics are significantly weaker than anticipated. The ratings are predicated upon final documentation in accordance with Moody's current understanding of the transaction and final debt sizing and model outputs consistent with initially projected credit metrics and cash flows. Should the proposed financing be completed, Moody's will withdraw the B1 ratings assigned to the existing Topaz senior secured term loan due 2014 (Cusip: 89054FAD6) and the senior secured revolver due 2013(Cusip: 89054FAC8) at or after financial close. The principal methodology used in this rating was Power Generation Projects published in December 2012. Topaz Power Holdings, LLC owns a portfolio of five generating units in southern Texas with a combined capacity of 1,883 MW. The portfolio includes Barney M. Davis 335 MW Unit 1 and 674 MW Unit 2 (conventional steam and combined cycle, respectably), Laredo Energy Center 98 MW Unit 4 and 98 MW Unit 5 (both simple cycle), and the 678 MW Nueces Bay Energy Center (combined cycle). Topaz, formed in 2004, is an indirect, majority-owned subsidiary of Carlyle/Riverstone Global Energy and Power Fund III, L.P., which has ownership interests in companies in various sectors of the energy industry. TRAINOR GLASS: Plan Filing Period Extended Until March 11 --------------------------------------------------------- The Bankruptcy Court has extended Trainor Glass Company's exclusive periods to file and solicit acceptances of a Plan until March 11, 2013, and May 8, 2013, respectively. As reported in the TCR on Feb. 5, 2013, the Debtor cited that it has been working to liquidate its assets and has been consulting and working with the Official Committee of Unsecured Creditors and First Midwest Bank to formulate a plan. The Committee and First Midwest Bank support the requested extension of exclusivity. About Trainor Glass Trainor Glass Company, doing business as Trainor Modular Walls, Trainor Solar, and Trainor Florida, filed for Chapter 11 bankruptcy (Bankr. N.D. Ill. Case No. 12-09458) on March 9, 2012. Trainor was founded in 1953 by Robert J. Trainor Sr. to pursue a residential glass business in Chicago, Illinois. Trainor's business model was focused on quality fabrication, design, engineering, and installation of glass products and framing systems in virtually every architectural application, including (a) new construction, (b) green-building solutions, (c) building rehabilitation, (d) storefronts and entrances, (e) tenant interiors, and (f) custom-specialty work. The Hon. Carol A. Doyle oversees the Chapter 11 case. David A. Golin, Esq., Michael L. Gesas, Esq., and Kevin H. Morse, Esq., at Arnstein & Lehr LLP, serve as the Debtor's counsel. High Ridge Partners, Inc., serves as its financial consultant. The Debtor has tapped Cole, Martin & Co., Ltd., to render certain auditing services related to the Debtor's 401(k) and profit sharing plan. The Debtor scheduled $14,276,745 in assets and $64,840,672 in liabilities. A three-member official committee of unsecured creditors has been appointed in the case. The committee retained Sugar Felsenthal Grais & Hammer LLP as counsel. TRANS NATIONAL COMMS: Proposes $14-Mil. Sale to Blue Casa --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Trans National Communications International Inc., a Boston-based reseller of telecommunications services, signed Blue Casa Telephone LLC to pay $14 million cash for the assets, including accounts receivable. There will be a Feb. 13 hearing for approval of procedures to solicit competing bids. According to the report, Blue Casa is a local exchange carrier controlled by private-equity investor Garrison Investment Group. The sale will require approval from the Federal Communications Commission. About Trans National Communications Based in Boston, Massachusetts, Trans National Communications filed for Chapter 11 bankruptcy protection (Bankr. D. Mass. Case No. 11-19595) on Oct. 9, 2011, estimating $1 million to $10 million in assets and $10 million to $50 million in debts. Judge William C. Hillman oversees the case. Harold B. Murphy, Esq. and Christopher M. Condon, Esq., at Murphy & King, serve as the Debtor's counsel. Verdolino & Lowey, P.C., serves as the Debtor's financial advisors. Mintz Levin Cohn Ferris Glovsky and Popeo PC serves as the Debtor's special telecommunications counsel. The Staten Group and Bruce E. Rogoff, as chief restructuring officer and advisor. Anthony L. Gray, Esq., at Pollack & Flanders, LLP; and Kenneth M. Misken, Esq., at Miles & Stockbridge, P.C., represent the Official Committee of Unsecured Creditors. VELO HOLDINGS: Taken Over by Secured Lenders -------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Velo Holdings Inc. implemented the bankruptcy reorganization plan on Feb. 4 where first-lien lenders took ownership of the direct marketer in exchange for debt. The bankruptcy court in New York approved the plan in a Jan. 23 confirmation order. According to the report, the disclosure statement projected a 57% to 60% recovery by first-lien lenders initially owed $386 million. Second-lien creditors owed $210 million came away with nothing. Unsecured creditors owed $36 million carved up $375,000 for a 1% recovery. The report relates that first-lien lenders received the new stock with an expected value ranging between $30 million and $40 million, according to the disclosure statement. In addition, senior creditors were given a new $80 million term loan payable in five years with interest at 15%. The lenders' recovery is supplemented by $20 million that was transformed into a post-bankruptcy secured loan and $75.5 million in payments made on secured debt during bankruptcy. 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. W.R. GRACE: Reports $111.6-Mil. Net Loss in Fourth Quarter 2012 --------------------------------------------------------------- W.R. Grace & Co. on Feb. 6 announced a fourth quarter net loss of $111.6 million, or $1.48 per diluted share. The loss was due to a $365.0 million non-cash charge recorded in the quarter to adjust the company's asbestos-related liability as previously announced on January 24, 2013. Net income for the prior-year quarter was $58.1 million, or $0.77 per diluted share. Adjusted EPS for the 2012 fourth quarter was $1.11 per diluted share compared with $0.89 per diluted share for the prior-year quarter. Net income for the full year ended December 31, 2012, was $94.1 million, or $1.23 per diluted share, compared with $269.4 million, or $3.57 per diluted share for the prior year. Adjusted EPS for the full year was $4.17 per diluted share compared with $3.94 per diluted share for the prior year. "I am pleased with our strong finish to the year," stated Fred Festa, Grace's Chairman and Chief Executive Officer. "All three operating segments demonstrated solid organic growth and strong increases in operating earnings. This performance, combined with our disciplined expense control, allowed us to improve margins and stay on track with our longer-term earnings goals." Fourth Quarter Results Fourth quarter sales of $797.8 million declined 3.4 percent compared with the prior-year quarter as higher sales volumes (+5.7 percent) and improved base pricing (+2.1 percent) were offset by lower rare earth surcharges (-9.2 percent) and unfavorable currency translation (-2.0 percent). Sales in emerging regions represented 39.1 percent of sales and grew 16.1 percent compared with the prior-year quarter. Acquisitions, net of divestitures, contributed $3.0 million (+0.4 percent) to sales in the quarter. Gross profit of $300.3 million increased 4.3 percent compared with the prior-year quarter. Gross margin of 37.6 percent increased 270 basis points compared with the prior-year quarter, exceeding the top-end of the company's target range of 35 to 37 percent. Adjusted EBIT of $133.4 million increased 23.3 percent compared with $108.2 million in the prior-year quarter. The increase was due to higher segment operating income in all three operating segments and lower corporate expenses. Adjusted EBIT margin improved to 16.7 percent compared with 13.1 percent in the prior- year quarter. Adjusted EBIT Return On Invested Capital was 36.3 percent on a trailing four-quarter basis, compared with 35.4 percent for the prior year. The increase in Adjusted EBIT Return On Invested Capital primarily was due to higher earnings and improved working capital. Full Year Results Sales for the full year ended December 31, 2012, decreased 1.8 percent to $3.16 billion as improved base pricing (+4.1 percent) and higher sales volumes (+2.9 percent) were offset by lower rare earth surcharges (-5.3 percent) and unfavorable currency translation (-3.5 percent). Sales in emerging regions represented 37.0 percent of sales and grew 15.2 percent compared with the prior year. Gross profit of $1.17 billion increased 0.4 percent compared with the prior year. Gross margin of 37.0 percent increased 80 basis points compared with the prior year. Adjusted EBIT was $517.4 million, an increase of 8.1 percent compared with the prior year. The improvement in Adjusted EBIT was due to improved pricing, higher sales volumes and lower expenses. Catalysts Technologies Sales down 10.7 percent; segment operating income up 5.9 percent Fourth quarter sales for the Catalysts Technologies operating segment, which includes specialty catalysts and additives for refinery, plastics and other chemical process applications, were $328.3 million, a decrease of 10.7 percent compared with the prior-year quarter. The decrease was due to lower rare earth surcharges (-20.6 percent) and unfavorable currency translation (- 1.8 percent), which more than offset increased sales volumes (+8.0 percent) and improved base pricing (+3.7 percent). Sales volumes and base pricing of FCC catalysts increased approximately 12 percent compared with the prior-year quarter. Double-digit percentage increases in polypropylene catalyst sales offset lower polyethylene catalyst sales. Segment gross margin was 41.0 percent compared with 38.0 percent in the prior-year quarter. The increase in gross margin primarily was due to improved base pricing and lower unit manufacturing costs resulting from increased operating leverage and productivity initiatives. Segment operating income was $102.6 million compared with $96.9 million in the prior-year quarter. Segment operating margin was 31.3 percent, an increase of 490 basis points compared with the prior-year quarter. Materials Technologies Sales up 2.7 percent; segment operating income up 20.3 percent Fourth quarter sales for the Materials Technologies operating segment, which includes packaging technologies and engineered materials for consumer, industrial, coatings and pharmaceutical applications, were $210.1 million compared with $204.5 million in the prior-year quarter. The 2.7 percent increase was due to higher sales volumes (+5.0 percent) and improved pricing (+0.9 percent) which more than offset unfavorable currency translation (-3.2 percent). Sales in emerging regions, which represented 43.1 percent of sales, grew 6.8 percent largely due to strong sales in developing Asian countries, including China. Segment gross margin was 34.3 percent compared with 31.9 percent in the prior-year quarter. The increase in gross margin was due to increased operating leverage and lower manufacturing costs. Segment operating income was $39.7 million, an increase of 20.3 percent compared with the prior-year quarter. Segment operating margin was 18.9 percent, an increase of 280 basis points compared with the prior-year quarter. Construction Products Sales up 2.3 percent; segment operating income up 53.3 percent Fourth quarter sales for the Construction Products operating segment, which includes specialty construction chemicals and specialty building materials used in commercial, infrastructure and residential construction, were $259.4 million, an increase of 2.3 percent compared with the prior-year quarter. Higher sales volumes (+2.8 percent) and improved pricing (+0.8 percent) were offset partially by unfavorable currency translation (-1.3 percent). The acquisition of Rheoset Industria during the third quarter contributed $7.9 million to sales, which more than offset a $4.9 million decrease in sales due to the 2011 divesture of the vermiculite business. Sales of Construction Products in emerging regions, which represented 37.0 percent of sales, increased 20.3 percent compared with the prior-year quarter due to strong sales in Latin America, the Middle East and emerging Asia. Sales in North America, which represented 38.6 percent of sales, decreased 4.1 percent due to lower sales of specialty building materials, primarily residential reroofing products. Sales of specialty construction chemicals in North America increased approximately 9 percent. Sales in Western Europe, which represented 13.6 percent of sales, decreased 17.6 percent compared with the prior-year quarter due to unfavorable currency translation and the continuing weak construction environment. Segment gross margin of 36.1 percent increased 340 basis points compared with the prior-year quarter primarily due to improved raw material cost recovery, operating leverage and a favorable sales mix comparison between the acquired and divested businesses. Segment operating income of $32.5 million increased 53.3 percent compared with the prior-year quarter primarily due to improved gross margin. Segment operating margin improved to 12.5 percent, an increase of 410 basis points compared with the prior-year quarter. Other Expenses Total corporate expenses of $23.4 million decreased 13.3 percent compared with the prior-year quarter, due to cost reduction initiatives in 2012 and legal and licensing costs in the prior- year quarter. Defined benefit pension expense for the fourth quarter was $18.0 million compared with $15.9 million for the prior-year quarter. The 13.2 percent increase primarily was due to year-over-year changes in actuarial assumptions including lower discount rates and a lower expected long-term rate of return on plan assets. Interest expense was $12.4 million for the fourth quarter compared with $10.8 million for the prior-year quarter. The annualized weighted average interest rate on pre-petition obligations for the fourth quarter was 3.6 percent. Income Taxes Grace recorded a tax benefit of $139.3 million in the fourth quarter, reflecting a $135.3 million tax benefit from the $365.0 million asbestos-related charge and a $44.0 million tax benefit resulting from the release of valuation allowances on state deferred tax assets. Cash Flow Net cash provided by operating activities for the year ended December 31, 2012, was $453.6 million compared with $219.4 million in the prior year. The improved cash flow was due to reduced working capital requirements and lower pension contributions. Adjusted Free Cash Flow was $421.2 million for the year ended December 31, 2012, compared with $278.4 million in the prior year. 2013 Outlook As of February 6, 2013, Grace expects 2013 Adjusted EBIT to be in the range of $560 million to $580 million, an increase of 8 to 12 percent compared with 2012 Adjusted EBIT of $517.4 million. The company expects 2013 Adjusted EBITDA to be in the range of $685 million to $705 million. The following assumptions are components of Grace's 2013 outlook: -- Consolidated sales in the range of $3.2-$3.3 billion with organic growth of 6-8 percent offset by headwinds of approximately $120 million due to lower rare earth- related pricing and unfavorable currency; -- Gross margin in the range of 36-38 percent; -- Adjusted EBIT margin improvement of approximately 100 basis points; -- Capital expenditures in the range of $180-200 million; -- Adjusted Free Cash Flow greater than $400 million; -- A book effective tax rate of 34.0 percent and a cash tax rate of 14.0 percent; and -- Diluted shares outstanding at year end of approximately 78 million. Although Grace adjusted the recorded value of its asbestos-related liability in the 2012 fourth quarter, the ultimate cost of settling this liability will be based on the value of the consideration transferred to the asbestos trusts at emergence and may vary from the current estimate. Therefore, Grace is unable to make a final estimate of the income effects of the consummation of the Joint Plan of Reorganization (the "Joint Plan"). When the Joint Plan is consummated, Grace expects to reduce its liabilities subject to compromise, including asbestos-related contingencies, recognize the value of the deferred payments and the warrant and recognize expense for the costs of consummating the Joint Plan and the income tax effects of these items. Chapter 11 Proceedings On April 2, 2001, Grace and 61 of its United States subsidiaries and affiliates, including its primary U.S. operating subsidiary, W. R. Grace & Co.-Conn., filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware in order to resolve Grace's asbestos-related liabilities. On January 31, 2011, the Bankruptcy Court issued an order confirming Grace's Joint Plan. On January 31, 2012, the United States District Court issued an order affirming the Joint Plan, which was reaffirmed on June 11, 2012 following a motion for reconsideration. Five parties have appeals pending before the Third Circuit Court of Appeals. The timing of Grace's emergence from Chapter 11 will depend on the satisfaction or waiver of the remaining conditions set forth in the Joint Plan. The Joint Plan sets forth how all pre-petition claims and demands against Grace will be resolved. 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. The Debtors' filed their Chapter 11 Plan and Disclosure Statement on Nov. 13, 2004. On Jan. 13, 2005, they filed an Amended Plan and Disclosure Statement. The hearing to consider the adequacy of the Debtors' Disclosure Statement began on Jan. 21, 2005. The Debtors' exclusive period to file a chapter 11 plan expired on July 23, 2007. Estimation of W.R. Grace's asbestos personal injury liabilities commenced on Jan. 14, 2008. WAGSTAFF MINNESOTA: Joins Forces With Creditors on Exit Plan ------------------------------------------------------------ Wagstaff Minnesota Inc. and its affiliated debtors, and the official committee of unsecured creditors appointed in the case have co-proposed a bankruptcy exit plan for the Debtors. On Jan. 31, 2013, the Debtors and the Committee filed with the Bankruptcy Court in Minnesota a Joint Plan of Liquidation accompanied by a Disclosure Statement. Revised plan documents were filed the next day. The parties was slated to return to the Bankruptcy Court Feb. 7 at 10:00 a.m. for a hearing on the Debtors' "Expedited Motion to shorten time of notice periods and objection deadline related to plan confirmation, and to schedule an expedited plan confirmation hearing". The Committee on Dec. 13, 2012, filed its own Plan for debtors Wagstaff Texas, Inc. and D & D Idaho Food, Inc. The Debtors also have filed their own exit plan last year. Hearings to consider approval of the disclosure statement was continued to Jan. 10 and then to Jan. 31. With the filing of the Joint Plan, the Committee on Feb. 1 filed a notice abandoning its earlier Plan. Under the Debtors and the Committee's Joint Plan, the Debtors will assign all of their remaining assets to trusts that will liquidate the assets and distribute the cash proceeds of those assets to creditors as set forth in the trust documents. The Debtors expect to emerge from chapter 11 this year. The Debtors initially explored several options to reorganize and maximize the value of their business. These options included (i) repairing the relationship with their franchisor, KFC Corporation and moving forward; (ii) re-branding the Debtors' network of restaurants; (iii) selling the restaurants as going-concern network of KFCC-branded restaurants; and (iv) otherwise liquidating the restaurants. The relationship with KFCC went south, however. KFCC continued to refuse to engage in any meaningful discussions or negotiations. The Debtors deemed that assumption of the KFCC franchise licenses was likely impossible. The dispute reached the U.S. Court of Appeals for the Eighth Circuit, on the Debtors' appeal from lower court rulings. In June 2012, the Debtors and KFCC reached an accord resolving all their disputes. The deal required the Debtors to continue operating under KFC limited license agreements while pursuing the sale of substantially all of their assets. The Debtors anticipate that as of the date of the hearing to confirm their plan, all of the Debtors' operating restaurants will have been sold or closed, and the Debtors will no longer be operating any restaurants pursuant to KFC limited license agreements. To date, the Debtor have sold or disposed of these assets: Debtor(s) Counterparty Asset Disposed of Amount --------- ------------ ----------------- ------ D&D Property Sarbjit and Unimproved commercial - Sukhvinder real property at Takhar 1472 HWY 99E, Gridley, CA Wagstaff Treadwell Certain property $500,000 Texas and Restaurants Wagstaff of Oklahoma Properties Texas Perella Leased real $2,750,000 Weinberg properties (credit bid) Partners Asset Based Value Master Fund I L.P. Wagstaff AFC Restaurants $13,800,000 Management Enterprises in Minn. and Calif. Corporation, Wagstaff Minnesota, Wagstaff Properties Minnesota, Wagstaff Properties, D&D Property Investments, and D&D Food Management (CA&MN Debtors) CA&MN LT Investment Some restaurants $1,000,000 Debtors Properties in Minn. D&D Idaho LT Investment Some restaurants $850,000 Food, and in Idaho & Ore. D&D Property Investments, Wagstaff Robert Carle Restaurants in Alaska $1,070,000 Atte Alaska Inc. and Wagstaff Atte Alaska LLC As of the Petition Date, the Debtors estimate that, in the aggregate, (i) certain of the Debtors and D & D Idaho Food, Inc. owed General Electric Capital Corp. an amount exceeding $45 million, (ii) the Texas Debtors owed approximately $3.2 million to Perella Weinberg Partners Asset Based Value Master Fund I L.P. and Perella Weinberg Partners ABV Opportunity Master Fund II A L.P., and (iii) the Idaho Debtors owed approximately $11.6 million to PWP. The Debtors have been able to return approximately (a) $19.4 million to GECC and (b) $4.9 million to PWP from sales of the secured creditors' collateral and adequate protection payments that were made throughout these Chapter 11 Cases. The Debtors anticipate that, through the Joint Plan and the liquidation of the remaining collateral securing the GECC debt, GECC may receive additional amounts of approximately $1.8 million through the close of the Debtors' chapter 11 cases. Overall, it is anticipated recovery for GECC and PWP in these cases will be approximately 33% (PWP) to 47% (GECC) of their total claims. As of the Petition Date, the Debtors estimate that they had, in the aggregate, accrued unsecured obligations (not including any unsecured deficiency claims of GECC or PWP) of approximately $1.2 million. During the pendency of these cases, due to, among other things, the rejection of certain executory contracts, the Debtors' estimate that the anticipated amount of Allowed unsecured claims may have increased to more than $2.5 million. The Debtors anticipate that the only significant source of recovery available to general unsecured creditors, if any, will be the proceeds of any litigation brought by the trustee for the Liquidating Trust. Significantly all of the Debtors' physical assets have been liquidated and those that have not been liquidated are subject to liens in favor of GECC. The Creditors' Committee believes that returns from the Estates' litigation assets may provide significant returns to unsecured creditors in the range of 25% to 75% of Allowed general unsecured claims (excluding GECC and PWP's unsecured deficiency claims). Meanwhile, the Committee's Plan filed in December provided for the liquidation of the remaining assets of Wagstaff Texas and D&D Idaho Food, and distribution of proceeds to creditors in accordance with the Bankruptcy Code. That plan projects secured creditors will recover 100% of debt owed by Wagstaff Texas and D&D Idaho Food, while unsecured creditors are to recoup up to 83%. About Wagstaff Properties Hanford, California-based Wagstaff Properties LLC and its debtor- affiliates filed for Chapter 11 protection (Bankr. D. Minn. Case No. 11-43074) on April 30, 2011. The cases are jointly administered with Wagstaff Minnesota, Inc. (Case No. 11-43073). The Debtors are corporations and limited liability companies that are owned in whole or in part by Denman Wagstaff and his wife, along with various other minority or equal owners. Pursuant to franchise agreements, the Debtor corporations owned and operated 80 "KFC" restaurants in Alaska, California, Idaho, Minnesota, Oregon, and Texas, with a corporate headquarters in Hanford, California. The Debtors that are limited liability companies each owned real property that was leased to certain of the Debtor corporations operating the restaurants. Wagstaff Properties estimated assets and liabilities at $10 million to $50 million in its petition. Judge Dennis D O'Brien oversees the cases, taking over from Judge Nancy C. Dreher in November 2012. Peitzman Weg LLP and Fredrikson & Byron, P.A., serve as the Debtors' Co-Bankruptcy Counsel. The Debtors also hired these professionals: Adair & Evans as Controller/CFO, Accountant, and Tax Advisor; Alvarez & Marsal North America LLC acts as Financial Advisor; Trinity Capital LLC as Investment Banker to the Texas Debtors; Epiq Bankruptcy Solutions LLC as Administrative Agent; Terra Properties as Real Estate Broker to D&D Property Investments; Jones & Malhotra as 401(k) Auditor; Newmark Grubb Knight Frank as Real Estate Consultant; and M. Green and Company LLP as Independent Certified Public Accountant. On June 8, 2011, the U.S. Trustee appointed the Creditors' Committee. The members of the Creditors' Committee are (i) Prime Source Food Service Equipment, Inc., (ii) Hart Property Consultants, and (iii) Powerhouse Repair. The Committee is represented by Aaron L. Hammer, Esq. SUGAR FELSENTHAL GRAIS & HAMMER LLP 30 N La Salle Street, Suite 3000 Chicago, IL 60602 Tel: 312-704-9400 E-mail: ahammer@sugarfgh.com - and - Deborah C. Swenson, Esq. LOMMEN ABDO COLE KING & STAGEBERG PA 2000 IDS Center 80 S. Eighth St. Minneapolis, MN 55402 Tel: 612 336-9351 Email: debs@lommen.com - and - Richard S. Lauter, Esq. Thomas R. Fawkes, Esq. FREEBORN & PETERS LLP 311 S Wacker Dr, Ste 3000 Chicago, IL 60606 Tel: 312-360-6000 E-mail: rlauter@freebornpeters.com tfawkes@freebornpeters.com WAUPACA FOUNDRY: Moody's Sees Loan Upsizing as Credit Negative -------------------------------------------------------------- The announcement by Waupaca Foundry, Inc. that it has increased the size of the upsized term loan by $50,000,000 is a credit negative development for the company. The further increase in the term loan will be used to support a larger special dividend to Waupaca's sponsors. However, Moody believes the company's credit metrics, including pro forma Debt/EBITDA of about 3.4x, continue to support the B1 Corporate Family Rating, B2 rating on the upsized term loan, and stable rating outlook. The last rating action for Waupaca Foundry, Inc. was on January 31, 2013 when the Corporate Family Rating was affirmed at B1 with a stable rating outlook. The principal methodology used in this rating was the Global Automotive Supplier Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Waupaca Foundry, Inc., headquartered in Waupaca, Wisconsin, is a leading iron foundry and manufacturer of gray, ductile and compacted graphite iron castings. The company's products are sold into the commercial vehicle, off-highway, agriculture, construction, hydraulic, and materials handling markets. Revenues for fiscal year 2012 were approximately $1.7 billion. The company is a wholly-owned subsidiary of affiliates of KPS Capital Partners, LP. WINECARE STORAGE: Seeks Chapter 11, Blames Hurricane Sandy ---------------------------------------------------------- WineCare Storage LLC filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-10268) in Manhattan on Jan. 29, 2013. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that WineCare Storage is one of innumerable small businesses in New York disrupted if not destroyed by Hurricane Sandy in October. In WineCare's case, the hurricane has deprived customers of access to their valuable wine collections. According to the report, the Manhattan-based company was holding 27,000 cases of customers' wine when the hurricane hit. The computer system that kept track of the location of each customer's wine in the climate-controlled warehouse was destroyed. WineCare was forced to move the wine to a new location before the computer system was restored. Consequently, it wasn't possible to record the locations to which each case was moved. Customers have been demanding and suing for possession of their wines. WineCare says that at least 95% of the wine is undamaged. Each customer's wine can't be located without taking a case-by- case inventory in the new warehouses. The Debtor disclosed $238,000 in assets and debt of $1.1 million. Because the wine belongs to customers, it's not listed among the assets. Customers include individuals and restaurants. YEHUD-MONOSSON: SIST Founder Sued for Fraudulent Transfers ---------------------------------------------------------- Tim Ryan, writing for The Shawano Leader, reports that a bankruptcy trustee filed a lawsuit against Samanta Roy Institute of Science and Technology Inc. founder Avraham Cohen of fraudulently transferring funds from a bankrupt subsidiary. The lawsuit was filed Friday in U.S. Bankruptcy Court in Minnesota by the trustee appointed to administer the Chapter 7 bankruptcy of SIST subsidiary Yehud-Monosson USA Inc., which includes two other SIST subsidiaries, Midwest Oil of Minnesota, LLC, and Midwest Oil of Anoka, LLC. The complaint alleges Yehud-Monosson transferred more than $31,000 from the insolvent company within a year of the bankruptcy filing and another $2,500 within the following year. The transfers were made from the Midwest Oil of Anoka bank account. About Yehud-Monosson USA Yehud-Monosson USA, Inc., for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 11-11278) on March 23, 2011. Rebekah M. Nett, Esq., at Westview Law Center, PLC, in St. Paul, MN, served as the Debtor's counsel. The Company estimated $1 million to $10 million in assets and debts. A federal judge ordered it converted to Chapter 7 -- basically taking financial control away from SIST -- and a trustee was appointed in June 2011. The Shawano Leader reports the case was sent to federal bankruptcy court in Minnesota. Yehud-Monosson listed more than $6.2 million in liabilities and nearly $7 million in assets, which included four properties in Minnesota, when the bankruptcy was filed. Among the largest secured creditors involved the case are Vermilion State Bank, holding a $2.2 million mortgage; William A. Egan, of St. Paul, Minn., holding a $2 million mortgage; Tiger Peg Capital Corp. of Houston, Texas, with an $893,000 mortgage; and American Bank of St. Paul, Minn., with a $594,000 mortgage. The filing also lists more than $250,000 owed to unsecured creditors, including nearly $89,000 in real estate taxes. About Samanta Roy Institute Based in Wilmington, Delaware, Dr. R.C. Samanta Roy Institute of Science & Technology, Inc., is the parent corporation of U.S. Acquisitions and Oil, MidWest Oil of Wisconsin, MidWest Oil of Minnesota, MidWest Oil of Shawano, MidWest Properties of Shawano, and MidWest Hotels and Motels of Shawano. They operate entities and holding companies owning real property leased to subsidiaries. Through affiliates, they own, among other things, hotels, gas stations, and an amusement park/racetrack. They use income from their business enterprises to fund not-for-profit educational activities. SIST and its subsidiary companies first filed for Chapter 11 bankruptcy on March 16, 2009. The cases were dismissed on Sept. 22, 2009. SIST again filed for Chapter 11 bankruptcy on Feb. 21, 2011 (Bankr. D. Del. Lead Case No. 11-10504). Rebekah M. Nett, Esq., at Westview Law Center, PLC, represents the Debtors. In their petition, the Debtors estimated both assets and debts of between $1 million and $10 million. * Earned-Income Credit Validly Exempted From Creditors' Claims -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Bankruptcy Appellate Panel for the Tenth Circuit in Denver ruled on Feb. 4 that exempting the earned-income tax credit from claims of creditors only in bankruptcy isn't a violation of the U.S. Constitution. According to the report, the appellate panel gave U.S. Bankruptcy Judge Janice Miller Karlin in Topeka, Kansas, the highest compliment by relying on her opinion to explain why the Kansas statute is constitutional. Kansas is one of several states adopting a statute that makes a tax refund stemming from the federal and state earned income credits immune from creditors' claims, although only for someone in bankruptcy. The credit is designed to relieve low income taxpayers from the burden of paying payroll deductions for Social Security and Medicare. The bankruptcy trustee objected to the exemption, contending it violated the Uniformity and Supremacy Clauses of the federal Constitution because it didn't apply equally to individuals not in bankruptcy. Judge Karlin rejected the argument in an opinion adopted by U.S. Bankruptcy Judge Terrence L. Michael in Tulsa, Oklahoma, who wrote the decision for the appellate panel. Judge Michael said that after Judge Karlin wrote her opinion, the U.S. Court of Appeals in Cincinnati upheld a bankruptcy-only exemption in the face of constitutional attack. The case is Williamson v. Westby (In re Westby), 12-027, U.S. Tenth Circuit Bankruptcy Appellate Panel (Denver). * Lender Not Required to Take Title to Abandoned Collateral ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Boston ruled on Feb. 1 that filing bankruptcy by itself doesn't entitle homeowners to walk away from all burdens of home ownership. The report recounts that a couple owned a home where the mortgage debt was considerably more than the market value. After they attempted to surrender the home, the lender refused to foreclose or take title. The homeowners, after receiving a discharged, sued the lender, claiming a violation of the discharge injunction. On agreed facts, the bankruptcy court dismissed the suit and was upheld by the Bankruptcy Appellate Panel. According to the report, on a second appeal, the Circuit Judge Juan R. Torruella upheld the two lower courts. The homeowners relied on a First Circuit opinion called Pratt where an auto lender was found in violation of the discharge injunction for refusing to take title or release the lien on an auto that was worthless. Judge Torruella said that autos and homes are different because real property has some value and unlike a car might appreciate in price. Judge Torruella, the report notes, found differences in the two cases because the lender in Pratt refused to release the lien unless paid in full on a debt that had been discharged. In the homeowners' case, the lender offered either a settlement or a so- called short sale where the home would be sold for less than the debt. Judge Torruella, the report discloses, said there is no authority "to support the proposition that a homeowner may walk away, with no strings attached, from their legally owned residence," thereby placing the burdens of the property on "their neighbors, their town, and their city." The judge said the idea of a "fresh start" through bankruptcy "does not countenance that result. He cited Pratt for the proposition that nothing in Section 521(a)(2) of the U.S. Bankruptcy Code "remotely suggests that the secured creditor is required to accept possession" of the collateral. The case is Canning v. Beneficial Maine Inc. (In re Canning), 12-9002, 1st U.S. Circuit Court of Appeals (Boston). * Fitch Sees More Bankruptcy Filings in U.S. Coal Industry ---------------------------------------------------------- The deep commodity pricing trough and demand destruction could lead to one or more bankruptcy filings in the U.S. coal industry, according to a new Fitch Ratings report. Bond prices of two coal producers are trading at deeply distressed levels. Fitch's 2013 outlook for the coal industry is negative, driven by a number of market, pricing, regulatory and macroeconomic conditions. Fitch believes that 2013 will be the trough year for coal pricing. Two coal producers have significant default risk based on the secondary market trading prices of their securities. Since 1994, there have been 11 mining company defaults among producers with assets of at least $25 million as of the bankruptcy filing date. Three of these defaults occurred in 2002, driven by the effects of rising operating costs compounded by fixed-price sales contracts at the time. Patriot Coal Corp., which filed for bankruptcy in 2012, was more than 11x the size (in terms of assets) of the next largest defaulted coal company. Fitch's report provides an update of recent developments in the on-going Patriot case. The full report 'U.S. Coal Bankruptcies: Future, Present, Past' is available at http://www.fitchratings.com/ * Moody's Notes Stable Outlook in 4Q 2012 for US Property Market ---------------------------------------------------------------- The outlook for the major US property markets was stable in the fourth quarter of 2012, according to Moody's Investors Service's Red-Yellow-Green quarterly property assessment. The overall composite score for the US has been Green 67 for seven quarters running. "The stable outlook is consistent with the generally slow pace of both construction and absorption, which, respectively, represent the supply and demand components of real estate," said Moody's Vice President - Senior Credit Officer Keith Banhazl. Moody's Red-Yellow-Green report scores commercial real estate markets on a scale of 0 (weak) to 100 (strong) and describes them by traffic light colors, with scores of 0-33 identified as Red, 34-66 as Yellow, and 67-100 as Green. The latest report reflects data from third-quarter 2012. Sector Analysis The Red-Yellow-Green Report contains a total of 388 individual market scores, approximately 55 markets per property sector. California metros topped five of the seven property sectors (Los Angeles for industrial and limited-service hotel, Oakland for multi-family and San Francisco for retail and CBD office). Multifamily remained the highest-scoring sector with a score that held at Green 85. Upcoming multifamily supply exceeded forecast demand by 0.5%, the same as last quarter. Suburban office gained two points to Yellow 55. The sector's 17.2% vacancy rate, while high, improved by 0.2% from last quarter and 0.8% from the same quarter last year. CBD office remained Green 70 and its recovery continues to lead that of suburban office by a considerable margin. Full-service hotel remained at Yellow 63, and limited-service hotel, at Yellow 66. An increase in each sector's RevPAR lag to its baseline target countered modest improvements in the supply- demand relationship. Retail vacancy edged downward to 12.9% from 13.0% the previous quarter, but the sector's score remained stable, at Yellow 66. Metropolitan Market Analysis Below is a list of the scores of the top 10 cities found most frequently in CMBS based on dollar volume, with the previous quarter's scores in parentheses: New York: 73 (75) Los Angeles: 79 (77) Washington, DC: 64 (68) Chicago: 65 (63) Dallas: 58 (56) Philadelphia: 63 (61) Miami: 73 (74) Atlanta: 57 (55) Houston: 71 (69) San Francisco: 79 (78) The five highest scoring markets in the US: San Francisco: 79 (78) Los Angeles: 79 (77) Honolulu: 78 (78) Orange County, CA: 76 (74) San Diego: 74 (69) And the five lowest scoring: Trenton: 38 (44) Detroit: 48 (48) Phoenix: 50 (50) Las Vegas: 51 (51) Hartford: 52 (62) * Junk-Company Liquidity Strengthens in January ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the percentage of junk-rated companies with the weakest liquidity matched a record low in January. The liquidity-stress index declined in January to 3.1% from 3.6% in December, Moody's Investors Service said in a Feb. 1 report. The January figure matched a record made in July. Over the last 10 years, the average for the liquidity-stress index has been 7.4%. It measures the percentage of junk-rated companies with the weakest liquidity. The high for the index was 20.9% in March 2009. Moody's said that junk companies are able to enhance liquidity as a result of "strong market access." The generosity of credit markets for financially weak companies continues unabated, Moody's said. In January sales of junk bonds were 4.5% more than the same month the year before, Moody's reported. * Schools Suing Former Students Shows Crisis in Loans to Poor ------------------------------------------------------------- Janet Lorin (jlorin@bloomberg.net), writing for Bloomberg News, reported that needy U.S. borrowers are defaulting on almost $1 billion in federal student loans earmarked for the poor, leaving schools such as Yale University and the University of Pennsylvania with little choice except to sue their graduates. The record defaults on federal Perkins loans may jeopardize the prospects of current students since they are part of a revolving fund that colleges give to students who show extraordinary financial hardship, according to the Bloomberg report. Bloomberg related that Yale, Penn and George Washington University have all sued former students over nonpayment, court records show. While no one tracks the number of lawsuits, students defaulted on $964 million in Perkins loans in the year ended June 2011, 20 percent more than five years earlier, government data show. Unlike most student loans -- distributed and collected by the federal government -- Perkins loans are administered by colleges, which use repayment money to lend to other poor students. "If you borrow to go to school, it may not be just the government that ends up coming after you if you can't pay," Deanne Loonin, an attorney with the National Consumer Law Center, a nonprofit advocacy group in Boston, told Bloomberg. "We offer credit very easily." If the student doesn't benefit financially from the education, "the government or the school comes after them very aggressively." The increase in the amount of defaulted loans among poor students comes as President Barack Obama says he wants to expand access to college for working-class families and increase funding for the Perkins program, Bloomberg related. Under his proposal, the pot for Perkins loans would increase to $8.5 billion from about $1 billion. The Education Department would service the loans instead of colleges. The cases are George Washington University v. Graff, 2012- sc3- 3308, District of Columbia Superior court (Washington); University of Pennsylvania v. Lopinto, 1211011562, Philadelphia County Court of Common Pleas; Yale University v. Triggs, CV-12- 6027993-S, Connecticut Superior Court (New Haven). * Standard & Poor's Faces U.S. Suit over Mortgage Bond Ratings -------------------------------------------------------------- Jean Eaglesham (jean.eaglesham@wsj.com), Jeannette Neumann (jeannette.neumann@wsj.com ) and Evan Perez (evan.perez@wsj.com), writing for The Wall Street Journal, reported that the Justice Department sued Standard & Poor's Ratings Services late Monday, alleging the firm ignored its own standards to rate mortgage bonds that imploded in the financial crisis and cost investors billions. The civil charges by U.S. Attorney General Eric Holder against the New York company, one of the bond-rating industry's three giants, are the first federal enforcement action against a credit-rating firm over the crisis, WSJ said. Several state attorneys general are likely to join. S&P said in a statement earlier Monday that the government suit would be "entirely without factual or legal merit," and denied wrongdoing. The two sides have discussed a possible settlement for about four months, WSJ said citing people close to the negotiations, but S&P balked over concerns that a deal could sink the company. The government was seeking penalties of more than $1 billion, WSJ added citing another person close to the talks said, which would be the biggest sanction imposed on a firm related for its actions in the crisis. S&P officials also were rattled that the government was pushing the company to admit wrongdoing that could leave it more vulnerable to pending or new lawsuits by investors, according to WSJ. WSJ, citing people familiar with the probe, said for about three years, the government has been investigating whether S&P managers pushed to weaken company standards for rating mortgage-linked deals or ignored the standards entirely. S&P said Monday that it "would be wrong" to contend that its ratings were "motivated by commercial considerations and not issued in good faith." S&P added that the government's allegations stem from S&P's rating of collateralized debt obligations, or CDOs, issued in 2007 that included bundles of subprime mortgages. The government, according to the WSJ report, is targeting about 30 of those deals, which plummeted in value soon after being sold to investors. The suit alleges that S&P from September 2004 through October 2007 "knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors in" CDOs and securities backed by residential mortgages, WSJ related. S&P "falsely represented that its credit ratings of RMBS and CDO tranches were objective, independent, uninfluenced by any conflicts of interest that might compromise S&P's analytical judgment, and represented S&P's true current opinion regarding the credit risks" of the securities, WSJ further related, citing the lawsuit. The firm's "desire for increased revenue and market share" led it to "downplay and disregard the true extent of the credit risks," the suit alleges. * BlackRock Sued by Funds over Securities Lending Fees ------------------------------------------------------ Andrew Zajac (azajac@bloomberg.net), writing for Bloomberg's Businessweek, reported that BlackRock Inc. (BLK), the world's biggest money manager, is accused in a lawsuit by two pension funds of reaping "grossly excessive" compensation from securities- lending returns associated with iShares Inc. "Defendants have systematically violated their fiduciary duties, setting up an excessive fee structure designed to loot securities lending returns properly due to iShares investors," the funds, which invest in iShares, said in a complaint in federal court in Nashville, Tennessee, Businessweek related. Businessweek said the pension funds allege that BlackRock affiliates collected 40 percent of revenue earned from securities lending transactions as compensation. Blackrock said the suit is without merit and will contest it, according to Businessweek. The suit, filed by Laborers Local 265 Pension Fund, based in Cincinnati, and Plumbers and Pipefitters Local No. 572 Pension Fund, of Nashville, names BlackRock Institutional Trust Co., iShares Trust, iShares Inc. and nine other BlackRock affiliates, Businessweek related. Also named are BlackRock president Robert Kapito, Michael Latham, the chairman of Ishares Inc., and seven other officials of whom are trustees of iShares Trust and directors of iShares Inc. The case is Laborers Local 265 Pension Fund v. iShares Trust, 13- cv-00046, U.S. District Court, Middle District of Tennessee, (Nashville). * Bankruptcy Filings Fell Lowest in Five Years ---------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, says that based on reports from Epiq Systems Inc., Moody's Investors Service and Sageworks Inc., bankruptcy filings fell to the lowest in five years last month and will probably continue to drop. According to data compiled by Epiq from court records, the 78,500 bankruptcies of all types in January were 15% fewer on a daily basis than in the same month in 2012. Business bankruptcies shrank even more. January's 3,700 commercial filings were down about 26% from a year earlier, to the fewest in almost six years, Epiq reported. The 674 January Chapter 11 filings, in which larger companies and formerly wealthy individuals seek to reorganize or sell assets, were the fewest since April 2008. The January filings continued a pattern established last year, when total bankruptcies declined 14% from 2011. States with the most filings per capita were Tennessee, Alabama and Georgia. Nevada fell out of the top three. Statistics indicate there will be no increase in business bankruptcies in coming months. Even among junk-rated companies with the weakest liquidity, Moody's reported that companies with little cash numbered the fewest in 10 years. The default rate for junk-rated companies ended the fourth quarter at 3.2%, according to Moody's, down from 3.6% when the third quarter ended. Moody's predicts the rate will decline to 3% by year's end, compared with the 4.5% average since 1993 and the 14% peak in 2009. For smaller, closely held companies, fewer bankruptcies are in the future. The predicted default rate this year for all industries is 4.4 percent, compared with 4.5% last year, according to a study of 6,600 businesses by Sageworks, a provider of private-company financial information. Bankruptcies declined in all 50 states last year to a total of about 1.19 million from 1.38 million in 2011. The 2011 bankruptcies represented a 12% decline from the 1.56 million in 2010, the most since the record of 2.1 million set in 2005. That year, in the two weeks before bankruptcy laws tightened, 630,000 American sought bankruptcy protection. * Pie Shrinks For Bankruptcy Attorneys as Filings Drop Again ------------------------------------------------------------ Brian Mahoney of BankruptcyLaw360 reported that the number of federal bankruptcy filings fell sharply for the second straight year in 2012, according to government data released on Monday, a drop that may reflect a credit lending market increasingly willing to risk capital on cash-starved companies. During the calendar year of 2012, 1.22 million bankruptcies were filed in U.S. federal courts, compared to 1.41 million filings in 2011 and 1.53 million in 2010, according to report by the Administrative Office of the U.S. Courts, the BLaw report said. A copy of the table illustrating the bankruptcies for the 12-month period ended Dec. 31, 2012, is available at http://is.gd/2YMYJT * 5th Cir. Appoints Jason Woodard as N.D. Miss. Bankruptcy Judge ---------------------------------------------------------------- The Fifth Circuit Court of Appeals appointed Bankruptcy Judge Jason D. Woodard to a fourteen-year term of office in the Northern District of Mississippi, effective January 17, 2013, (Houston). Honorable Jason D. Woodard United States Bankruptcy Court 703 Hwy 145 North Aberdeen, MS 39730 Telephone: 662-369-2624 Fax: 662-369-2635 Law Clerks: Jamie F. Wiley Lucy Coolidge Term expiration: January 15, 2027 * 9th Cir. Appoints Daniel Collins as Arizona Bankruptcy Judge -------------------------------------------------------------- The Ninth Circuit Court of Appeals appointed Bankruptcy Judge Daniel P. Collins to a fourteen-year term of office in the District of Arizona, effective January 18, 2013, (Case). Honorable Daniel P. Collins United States Bankruptcy Court U.S. Courthouse and Federal Building 230 N. First Ave., Ste. 101 Phoenix, AZ 85003 Telephone: 602-682-4222 Fax: 602-682-4223 Shirley Dunbar Judicial Assistant Telephone: 602-682-4224 Fax: 602-682-4225 Douglas Magnuson Law Clerk Telephone: 602-682-4226 Fax: 602-682-4227 Term expiration: January 17, 2027 * Daniel McElhinney Joins DRC's Business Development Team --------------------------------------------------------- Donlin, Recano & Company, Inc. disclosed that Daniel McElhinney has joined the firm as a Director. Based in New York, Dan is part of DRC's national business development team, focusing on developing and maintaining relationships with DRC's growing list of clients. "The experience, talent and ambition Dan brings to DRC is expected to help define and grow our market share in 2013," says Scott Stuart, Esq., Executive Director of DRC. A seasoned bankruptcy veteran, Dan began his career as a law clerk to then Chief Judge Arthur J. Gonzalez in the Southern District of New York and then, practiced in the Business Reorganization and Restructuring Department at Willkie Farr & Gallagher LLP, where he represented clients such as ATX Communications, Classic Communications, Werner Ladder, Safelite Glass Corp. and Episcopal Health Services. Prior to joining DRC, Dan was most recently a Managing Director with Epiq Bankruptcy Solutions. Dan holds a BA from Hamilton College and received his J.D. from Brooklyn Law School. He is also a member of the American Bankruptcy Institute, the Turnaround Management Association and the New York Institute of Credit. About Donlin Recano Donlin Recano -- http://www.donlinrecano.com-- is a division of DF King Worldwide -- http://www.king?worldwide.com-- and a provider of claims, noticing, balloting and technology solutions. It also provides bondholder identification services, pre?pack bankruptcy solicitation and balloting, crisis communications, financial printing services and call center services through one of the largest and most technologically advanced call centers in the country. King Worldwide is a financial communications, proxy solicitation and stakeholder management company, serving over 1,000 public company, mutual fund family and private equity firm clients domiciled in North America, Europe and Asia. * Greenberg Traurig Fla. Bankruptcy Head Will Open Solo Firm ------------------------------------------------------------ Jim Leshaw, a business lawyer who has been helping clients successfully close deals and minimize risks for twenty five years, is leaving Greenberg Traurig to form his own law practice, according to a press statement dated Feb. 4, 2013. He was with the firm for more than 23 years and is the long-time head of its Florida Business Reorganization & Restructuring Practice. Leshaw, the press release related, has handled a wide variety of business matters including: mergers, acquisitions, cross-border insolvency transactions, financings, contract drafting and negotiations, and bet-the-company litigation, to name a few. His clients include domestic and offshore businesses and entrepreneurs to multinational, Fortune 500 companies, private equity firms and their portfolio companies. He is also adept at helping other attorneys resolve disputes for their clients in his role as an experienced mediator and arbitrator, the statement added. Leshaw is a Supreme Court Certified Circuit Court Mediator, who is on the Roster of Mediators for the United States Bankruptcy Courts for the Southern District of Florida, the Southern and Eastern Districts of New York and the District of Delaware. He also is a member of the AAA panel of commercial arbitrators. Leshaw, the statement said, will focus his new law practice on providing general counsel services for domestic and offshore businesses; bankruptcy, restructurings and workouts; corporate advice and counsel; mergers and acquisitions of healthy and financially distressed businesses; litigation counseling and oversight; and mediation and arbitration. The firm, to be known as Leshaw Law, P.A., will maintain two offices: James P.S. Leshaw, Esq. Leshaw Law, P.A. 1395 Brickell Avenue, Ste. 800 Miami, FL 33131 Telephone (305) 477-1758 E-mail Jim@LeshawLaw.com - and - James P.S. Leshaw, Esq. Leshaw Law, P.A. 240 Crandon Blvd., Ste. 248 Key Biscayne, FL 33149 Telephone (305) 361-7593 For more information, visit www.LeshawLaw.com Leshaw earned his Bachelor of Arts in Political Science and Religion from Tufts University and his juris doctorate from New York University School of Law, the statement related. Don Silver (donsil@boardroompr.com) and Teresa Shum (tshum@boardroompr.com) of Boardroom Communications (Tel: (954) 370-8999) for Leshaw Law, P.A. * Groom Law Group Adds Seasoned Skadden Litigator in DC ------------------------------------------------------- Groom Law Group Chartered announced on Feb. 4 that Edward Meehan has joined the firm's ERISA litigation group. Prior to joining Groom, Mr. Meehan spent 23 years at Skadden, Arps, Slate, Meagher & Flom LLP, where he was a partner in the litigation group. Mr. Meehan is an experienced litigator, having tried several dozen cases and hundreds of contested hearings before courts, arbitrators, and administrative agencies, according to the press statement. He has substantial experience in disputes involving employee benefits, including pension and health plans, often in the context of Chapter 11 or other corporate restructurings. Representative matters include work for American Airlines and Eastman Kodak on retiree health benefit issues, for Hayes-Lemmerz International, Inc. on pension and retiree health matters, and for US Airways on pension issues. In addition to his work on employee benefit matters, Mr. Meehan has defended class actions and other complex disputes across a wide range of industries. He also has represented clients in connection with Department of Labor and Securities and Exchange Commission investigations. "We are very pleased to have Ed join our firm," said John McGuiness, Executive Principal of Groom Law Group. "Litigation related to retirement and healthcare plans continues to escalate. Our litigation group has tried nearly a dozen cases in recent years, including two cases in which Ed served as co-counsel. He is widely-regarded as a first-rate trial attorney and his courtroom skills will serve our clients well. He is a terrific addition to our team." "I have worked with Groom as co-counsel for over a decade as we tried cases together on pension and retiree benefits matters," said Mr. Meehan. "It was a natural fit for me to join Groom to concentrate my trial and other court experience in the growing ERISA litigation field." Mr. Meehan joins one of the most well-regarded ERISA litigation groups in the U.S. The firm has 19 attorneys who specialize in this area and its litigation group is ranked nationally by Chambers USA and The U.S. Legal 500. The attorneys in Groom's litigation group defend cases across the country brought against plan sponsors, financial institutions, managed care organizations, service providers, and other clients who are seeking practical, tough-minded representation in employee benefits disputes. Mr. Meehan may be reached at: Edward J. Meehan, Esq. GROOM LAW GROUP, CHARTERED 1701 Pennsylvania Avenue, N.W. Washington, DC 20006-5811 Tel: (202) 861-2602 Fax: (202) 659-4503 Email: emeehan@groom.com * KCC Recognized as Finalist in M&A Advisor's Turnaround Awards --------------------------------------------------------------- The M&A Advisor recognized KCC, a Computershare company, as a finalist in the 7th Annual Turnaround Awards. A leading administrative-support services provider for the legal and financial industries, KCC was nominated for the fourth consecutive year in the "Turnaround Product/Service of the Year" category for its corporate restructuring administration services. KCC has been a finalist for this award for three consecutive years. "Client service and innovative solutions have been the foundation of our offerings for more than a decade," said KCC President, Bryan Butvick. "This recognition inspires us to continue to add substantive value to the corporate restructuring process in progressive ways through our people practices and technology." The Turnaround Awards recognize excellence in deal-making in the distressed investing, restructuring and turnaround marketplace. An independent panel of turnaround industry experts will select the final award recipients and winners will be revealed at the 7th Annual M&A Advisor Turnaround Awards Gala on Wednesday, March 6 at the Colony Hotel in Palm Beach, FL. "We are pleased that KCC is once again among our finalists for the Turnaround Awards," said Roger Aguinaldo, CEO and Founder of The M&A Advisor. "The deal teams represented in our 2013 Turnaround Award finalist group have demonstrated creativity and perseverance in today's challenging climate." As a claims and noticing agent for the country's largest Chapter 11 proceedings, KCC provides claims administration, noticing, document production, balloting & solicitation and disbursement services as well as a specialized suite of escrow and public securities services. KCC's clients include Residential Capital LLC, Eastman Kodak Company, LightSquared Inc., Overseas Shipholding Inc., and Hostess Brands Inc., among many others. About KCCKCC KCCKCC -- http://www.kccllc.com-- is a Computershare company. It provides administrative-support services that help legal professionals realize time and cost efficiencies. With an integrated suite of corporate restructuring, class action and legal document management solutions, KCC alleviates the administrative challenges of today's legal processes and procedures. KCC has gained client and industry recognition for its industry expertise, professional-level client service and proprietary technologies. About Computershare About Computershare Limited -- http://www.computershare.com-- is a global market leader in transfer agency and share registration, employee equity plans, proxy solicitation and stakeholder communications. It also specializes in corporate trust services, tax voucher solutions, bankruptcy administration and a range of other diversified financial and governance services. Computershare is represented in all major financial markets and has over 10,000 employees worldwide. * Pepper Hamilton Picks Louis J. Freeh as Next Chair ---------------------------------------------------- Pepper Hamilton LLP has named Louis J. Freeh as its next Chair, the firm said in a press statement. Outgoing Chair Nina M. Gussack made the announcement on Feb. 5. The transition will take place later this month. "Judge Freeh is the right person to assume the Chair position at Pepper Hamilton," said Gussack. "I look forward to supporting him as his vision and leadership continue to move us forward as a law firm always at the forefront of innovation." Freeh succeeds Gussack, who is completing her second and final three-year term as Chair. Gussack will continue her full-time practice of law and serve as Chair of Pepper's nationally recognized Health Effects Litigation Practice, a role she retained while serving as Chair of the firm. Gussack explained that the firm's commitment to professional management and succession planning have positioned the firm well going forward. "We recruited Scott Green to serve in the new role of Chief Executive Officer. We redefined the role of Managing Partner and elected Tom Cole, a highly respected Pepper partner, to that position. And, we recruited Louis Freeh and his colleagues. All the pieces are in place for accelerated growth and performance, and I am very pleased," said Gussack. Freeh said that he was honored by the selection, adding that he was following in significant footsteps. "Nina has done a tremendous job in both leading the firm and managing one of the largest and most dynamic practices in the country," said Freeh. "On her watch, Pepper has become bigger, stronger, bolder, more diverse, more global, and more profitable. I am excited about being elected Chair of a great firm whose future has never been brighter." Gussack also announced that in addition to electing Freeh, the Executive Committee had elected two Vice Chairs, Julia D. Corelli and Thomas M. Gallagher. Corelli is a Corporate & Securities lawyer and co-Chair of Pepper's Commercial Department. Gallagher is a litigator and Chair of the firm's White Collar Litigation and Investigations Practice Group. According to Gussack, Corelli and Gallagher bring a depth of experience to their new roles that will benefit Pepper as the firm continues to grow and expand. "Julie and Tom, along with Scott Green and Tom Cole, comprise a leadership group whose insight and experience will be instrumental in working together with Louie and the Executive Committee as we move ahead," said Gussack. About Pepper Hamilton Pepper Hamilton LLP is a multi-practice law firm with more than 500 lawyers in seven states and the District of Columbia. The firm provides corporate, litigation and regulatory legal services to leading businesses, governmental entities, nonprofit organizations and individuals throughout the nation and the world. The firm was founded in 1890. CONTACT: William L. McCusker Chief Marketing Officer Pepper Hamilton LLP 215.981.4227 (Direct) mccuskerw@pepperlaw.com Mr. Freeh may be reached at: Louis J. Freeh, Esq. PEPPER HAMILTON LLP The New York Times Building 37th Floor 620 Eighth Avenue New York, NY 10018-1405 Tel: (212) 808-2720 Fax: (212) 286-9806 Email: louisjfreeh@pepperlaw.com * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Phillip Klingler Bankr. D. Ariz. Case No. 13-01137 Chapter 11 Petition filed January 28, 2013 In re Edward Barsky Bankr. C.D. Calif. Case No. 13-12277 Chapter 11 Petition filed January 28, 2013 In re Fumiko Robinson Bankr. S.D. Fla. Case No. 13-11794 Chapter 11 Petition filed January 28, 2013 In re William Bass Bankr. S.D. Fla. Case No. 13-11806 Chapter 11 Petition filed January 28, 2013 In re Josias Belorme Bankr. S.D. Fla. Case No. 13-11814 Chapter 11 Petition filed January 28, 2013 In re Engage Creative, Inc. Bankr. N.D. Ill. Case No. 13-03095 Chapter 11 Petition filed January 28, 2013 See http://bankrupt.com/misc/ilnb13-03095.pdf represented by: Sean P. Fleming, Esq. LAW OFFICE OF SEAN P. FLEMING E-mail: info@seanfleminglaw.com In re David Ruggio Bankr. N.D. Ill. Case No. 13-03100 Chapter 11 Petition filed January 28, 2013 In re Agustin Vaquero-Arenas Bankr. D. Nev. Case No. 13-10607 Chapter 11 Petition filed January 28, 2013 In re Valley View Farms LLC Bankr. D.N.J. Case No. 13-11521 Chapter 11 Petition filed January 28, 2013 See http://bankrupt.com/misc/njb13-11521.pdf represented by: Joseph J. Mania, III, Esq. LAW OFFICE OF JOSEPH J. MANIA III E-mail: jmbanklaw@gmail.com In re Dockrell Beach Yacht Club Bankr. D.N.J. Case No. 13-11522 Chapter 11 Petition filed January 28, 2013 See http://bankrupt.com/misc/njb13-11522.pdf represented by: Joseph J. Mania, III, Esq. LAW OFFICE OF JOSEPH J. MANIA III E-mail: jmbanklaw@gmail.com In re James Reynolds Bankr. D.N.M. Case No. 13-10214 Chapter 11 Petition filed January 28, 2013 In re Allysa Leigh Corp. Bankr. E.D.N.Y. Case No. 13-70443 Chapter 11 Petition filed January 28, 2013 See http://bankrupt.com/misc/nyeb13-70443.pdf represented by: Irwin Popkin, Esq. E-mail: ipopkin@yahoo.com In re Carmen NY LLC dba Ciano Bankr. S.D.N.Y. Case No. 13-10255 Chapter 11 Petition filed January 28, 2013 See http://bankrupt.com/misc/nysb13-10255.pdf represented by: Joel M. Shafferman, Esq. SHAFFERMAN & FELDMAN, LLP E-mail: joel@shafeldlaw.com In re Tar Branch Towers, LLC Bankr. M.D.N.C. Case No. 13-50096 Chapter 11 Petition filed January 28, 2013 See http://bankrupt.com/misc/ncmb13-50096.pdf represented by: Erik Mosby Harvey CAROLINA LAW PARTNERS E-mail: emh@carolinalawpartners.com In re Inmobiliaria Raver, Inc. Bankr. D.P.R. Case No. 13-00531 Chapter 11 Petition filed January 28, 2013 See http://bankrupt.com/misc/prb13-00531.pdf represented by: Roberto Roman Valentin, Esq. E-mail: romanlaw@prtc.net In re Inversiones Raver Inc. Bankr. D.P.R. Case No. 13-00532 Chapter 11 Petition filed January 28, 2013 See http://bankrupt.com/misc/prb13-00532.pdf represented by: Roberto Roman Valentin, Esq. E-mail: romanlaw@prtc.net In re Universal Electronics Inc. Bankr. M.D. Tenn. Case No. 13-00662 Chapter 11 Petition filed January 28, 2013 See http://bankrupt.com/misc/tnmb13-00662.pdf represented by: Janieka (Jennie) V. Smith-Howard, Esq. TAX PLANNING AND DEFENSE, APLC E-mail: jennie@taxplanninganddefense.com In re Carter Family Bowl, Inc. Bankr. M.D. Fla. Case No. 13-00983 Chapter 11 Petition filed January 29, 2013 See http://bankrupt.com/misc/flmb13-00983.pdf represented by: Robert B. Branson, Esq. Law Office of Robert B. Branson PA E-mail: lawbankruptcy1@aol.com In re Dames Point Holdings, LLC fka B & B Properties Bankr. M.D. Fla. Case No. 13-00516 Chapter 11 Petition filed January 29, 2013 See http://bankrupt.com/misc/flmb13-00516.pdf represented by: Gust G. Sarris, Esq. Affinity Law Firm, P.L. E-mail: gsarris@affinitylawfirm.com In re Flagler Forest Products, Incorporated dba Woody's Bar-B-Q Bankr. M.D. Fla. Case No. 13-00482 Chapter 11 Petition filed January 29, 2013 See http://bankrupt.com/misc/flmb13-00482.pdf represented by: Scott W Spradley, Esq. Law Offices of Scott W Spradley PA E-mail: scott.spradley@flaglerbeachlaw.com In re Minnie E. Bowdish Irrevocable Trust Bankr. M.D. Fla. Case No. 13-00503 Chapter 11 Petition filed January 29, 2013 See http://bankrupt.com/misc/flmb13-00503p.pdf See http://bankrupt.com/misc/flmb13-00503c.pdf represented by: Brett A. Mearkle, Esq. Law Office of Brett A. Mearkle E-mail: bmearkle@mearklelaw.com In re Thomas Smith Bankr. S.D. Fla. Case No. 13-12000 Chapter 11 Petition filed January 29, 2013 In re Larry Jackson Bankr. N.D. Ga. Case No. 13-51633 Chapter 11 Petition filed January 29, 2013 In re Peter Groves Bankr. N.D. Ind. Case No. 13-10165 Chapter 11 Petition filed January 29, 2013 In re Joao Brito Bankr. D. Mass. Case No. 13-40198 Chapter 11 Petition filed January 29, 2013 In re Philip Calandra Bankr. E.D. Mich. Case No. 13-41551 Chapter 11 Petition filed January 29, 2013 In re Ireland Sandrock Systems, Inc. dba American Burger Bar - St. Paul fdba American Burger Emporium fdba Barbara Jeans American Caf� Bankr. D. Minn. Case No. 13-30380 Chapter 11 Petition filed January 29, 2013 See http://bankrupt.com/misc/mnb13-30380.pdf represented by: Steven B. Nosek, Esq. E-mail: snosek@visi.com In re Marty Taylor Bankr. D. Nev. Case No. 13-10624 Chapter 11 Petition filed January 29, 2013 In re 2160 Candia Road, LLC Bankr. D.N.H. Case No. 13-10191 Chapter 11 Petition filed January 29, 2013 See http://bankrupt.com/misc/nhb13-10191.pdf represented by: Raymond J. DiLucci, Esq. Raymond J. DiLucci, P.A. E-mail: info@nhbankruptcy.com In re Robert J. Trobe Corp. Bankr. D.N.J. Case No. 13-11638 Chapter 11 Petition filed January 29, 2013 See http://bankrupt.com/misc/njb13-11638.pdf represented by: Leonard C. Walczyk, Esq. Wasserman, Jurista & Stolz E-mail: lwalczyk@wjslaw.com In re Two Four Pets, Inc. dba Pet House & Pet Hotel Bankr. D.P.R. Case No. 13-00586 Chapter 11 Petition filed January 29, 2013 See http://bankrupt.com/misc/prb13-00586.pdf represented by: Teresa M Lube Capo, Esq. Lube & Soto Law Offices PSC E-mail: lubeysoto@gmail.com In re The Cafe at Arena 1 Bankr. S.D. Tex. Case No. 13-30379 Chapter 11 Petition filed January 29, 2013 Filed pro se In re MarKitchen, Inc. t/a Martini Kitchen & Bubble Bar Bankr. E.D. Va. Case No. 13-30437 Chapter 11 Petition filed January 29, 2013 See http://bankrupt.com/misc/vaeb13-30437.pdf represented by: Kevette B. Elliott, Esq. Elliott Law Office E-mail: attykbe@aol.com In re Renee Solar Bankr. E.D. Va. Case No. 13-10427 Chapter 11 Petition filed January 29, 2013 In re James McClain Bankr. W.D. Wash. Case No. 13-10748 Chapter 11 Petition filed January 29, 2013 In re Clarence Shipman Bankr. N.D. Ala. Case No. 13-40160 Chapter 11 Petition filed January 30, 2013 In re Stephen Russo Bankr. S.D. Ala. Case No. 13-00308 Chapter 11 Petition filed January 30, 2013 In re Progressive Investment Group LLC Bankr. D. Ariz. Case No. 13-01273 Chapter 11 Petition filed January 30, 2013 See http://bankrupt.com/misc/azb13-01273.pdf represented by: Dennis J. Wortman, Esq. DENNIS J. WORTMAN, P.C. E-mail: djwortman@azbar.org In re Mervin Davis Bankr. C.D. Calif. Case No. 13-10627 Chapter 11 Petition filed January 30, 2013 In re Yok Pung Chan Bankr. C.D. Calif. Case No. 13-12433 Chapter 11 Petition filed January 30, 2013 In re Michael Reyes Bankr. C.D. Calif. Case No. 13-12491 Chapter 11 Petition filed January 30, 2013 In re Charles Faulkner Bankr. C.D. Calif. Case No. 13-12511 Chapter 11 Petition filed January 30, 2013 In re William Petersen Bankr. N.D. Calif. Case No. 13-10182 Chapter 11 Petition filed January 30, 2013 In re Vincent Tang Bankr. N.D. Calif. Case No. 13-50525 Chapter 11 Petition filed January 30, 2013 In re Guy Morris Bankr. D. Colo. Case No. 13-11238 Chapter 11 Petition filed January 30, 2013 In re Brighter Future Learning Center, LLC Bankr. D. Colo. Case No. 13-11184 Chapter 11 Petition filed January 30, 2013 See http://bankrupt.com/misc/cob13-11184.pdf represented by: Mark D. Zimmerman, Esq. E-mail: nordichawk@juno.com In re JDDCT, Inc. dba Village Pizza Bankr. D. Colo. Case No. 13-11209 Chapter 11 Petition filed January 30, 2013 See http://bankrupt.com/misc/cob13-11209.pdf represented by: Ken McCartney, Esq. THE LAW OFFICES OF KEN MCCARTNEY, P.C. E-mail: bnkrpcyrep@aol.com In re Vani Mini Mart, LLC Bankr. D. Conn. Case No. 13-30202 Chapter 11 Petition filed January 30, 2013 See http://bankrupt.com/misc/ctb13-30202.pdf represented by: Jefferson Hanna, III, Esq. E-mail: jeffersonhanna@sbcglobal.net In re Horace Ferguson Bankr. M.D. Fla. Case No. 13-00522 Chapter 11 Petition filed January 30, 2013 In re Gloria Verbeke Bankr. N.D. Ill. Case No. 13-03556 Chapter 11 Petition filed January 30, 2013 In re Hamid Mojtahedi Bankr. N.D. Ind. Case No. 13-10176 Chapter 11 Petition filed January 30, 2013 In re Charles Adams Bankr. S.D. Ind. Case No. 13-00786 Chapter 11 Petition filed January 30, 2013 In re RS Gregson, LLC dba Sylvan Learning Center Bankr. E.D. La. Case No. 13-10206 Chapter 11 Petition filed January 30, 2013 See http://bankrupt.com/misc/laeb13-10206p.pdf See http://bankrupt.com/misc/laeb13-10206c.pdf represented by: Richard W. Martinez, Esq. RICHARD W. MARTINEZ, APLC E-mail: richard@rwmaplc.com In re Manor Ventures LLC Bankr. E.D.N.Y. Case No. 13-40508 Chapter 11 Petition filed January 30, 2013 See http://bankrupt.com/misc/nyeb13-40508.pdf represented by: M. David Graubard, Esq. KERA & GRAUBARD E-mail: dgraubard@keragraubard.com In re Twelve Oaks Development, LLC Bankr. M.D. Tenn. Case No. 13-00745 Chapter 11 Petition filed January 30, 2013 See http://bankrupt.com/misc/tnmb13-00745.pdf represented by: Roy C. Desha, Jr., Esq. DESHA WATSON, PLLC E-mail: bknotice@deshalaw.com In re Adobe Energy Company Bankr. S.D. Tex. Case No. 13-30415 Chapter 11 Petition filed January 30, 2013 See http://bankrupt.com/misc/txsb13-30415.pdf represented by: Richard L. Fuqua, II, Esq. FUQUA & ASSOCIATES, P.C. E-mail: fuqua@fuquakeim.com In re Catfish Entertainment, LLC Bankr. N.D. Ala. Case No. 13-80284 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/alnb13-80284.pdf represented by: S Mitchell Howie, Esq. E-mail: mitch@huntsvillelaw.info In re Gregory Miller Bankr. S.D. Ala. Case No. 13-00322 Chapter 11 Petition filed January 31, 2013 In re Steinhoff Enterprises, LLC Bankr. D. Ariz. Case No. 13-01394 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/azb13-01394.pdf represented by: Charles R Hyde, Esq. Law Offices of C.R. Hyde E-mail: crhyde@gmail.com In re Best Vision Family Corp. Bankr. C.D. Calif. Case No. 13-11851 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/cacb13-11851.pdf represented by: Giovanni Orantes, Esq. Orantes Law Firm PC E-mail: go@gobklaw.com In re Michael Giubbini Bankr. C.D. Calif. Case No. 13-10241 Chapter 11 Petition filed January 31, 2013 In re Malcolm Enterprises Inc. dba Spa on the Plaza dba The Spa at InterContinental dba Escape Day Spa dba Gaia Green Packaging Bankr. N.D. Calif. Case No. 13-50580 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/canb13-50580.pdf represented by: Jason Vogelpohl, Esq. Central Coast Bankruptcy E-mail: jason@centralcoastbankruptcy.com In re Outriggers Restaurant LLC Bankr. D. Conn. Case No. 13-50144 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/ctb13-50144.pdf represented by: Peter L. Ressler, Esq. Groob Ressler & Mulqueen E-mail: ressmul@yahoo.com In re Stuart Bannatyne Bankr. D. Conn. Case No. 13-50154 Chapter 11 Petition filed January 31, 2013 In re TR Enterprises, Inc. Bankr. D. Mass. Case No. 13-40236 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/mab13-40236.pdf represented by: Gregory D. Oberhauser, Esq. Law Office of Gregory D. Oberhauser E-mail: gregory@oberhauserlaw.com In re Bear Brewing Corp. dba Whittier House Bankr. D.N.H. Case No. 13-10248 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/nhb13-10248.pdf represented by: Franklin C. Jones, Esq. Wensley & Jones, PLLC E-mail: fjones@joneswensley.com In re 726 Liberty Corporation Bankr. E.D.N.Y. Case No. 13-70508 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/nyeb13-70508.pdf Filed pro se In re Hashi Sushi Fusion Inc. Bankr. S.D.N.Y. Case No. 13-10270 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/nysb13-10270.pdf represented by: Nestor Rosado, Esq. E-mail: neslaw2@msn.com In re Shoff Construction Bankr. W.D. Pa. Case No. 13-20445 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/pawb13-20445.pdf represented by: Michael J. Henny, Esq. Law Offices of Michael J. Henny E-mail: m.henny@hennylaw.com In re Carla Sanders Bankr. M.D. Tenn. Case No. 13-00773 Chapter 11 Petition filed January 31, 2013 In re Alan Cooper Bankr. W.D. Wash. Case No. 13-10855 Chapter 11 Petition filed January 31, 2013 In re Cottage Meadow, LLC Bankr. W.D. Wash. Case No. 13-40656 Chapter 11 Petition filed January 31, 2013 See http://bankrupt.com/misc/wawb13-40656.pdf represented by: Michael P. Harris, Esq. E-mail: mph4@quidnunc.net In re Aufmuth, Inc. Bankr. D. Ariz. Case No. 13-01466 Chapter 11 Petition filed February 1, 2013 See http://bankrupt.com/misc/azb13-01466.pdf represented by: Eric Slocum Sparks, Esq. ERIC SLOCUM SPARKS, P.C. E-mail: law@ericslocumsparkspc.com In re Sunrise Oil Inc. Bankr. D. Ariz. Case No. 13-01472 Chapter 11 Petition filed February 1, 2013 Filed as Pro Se In re Tucson Aviation Supply, LLC Bankr. D. Ariz. Case No. 13-01495 Chapter 11 Petition filed February 1, 2013 See http://bankrupt.com/misc/azb13-01495.pdf represented by: Eric Slocum Sparks, Esq. ERIC SLOCUM SPARKS, P.C. E-mail: law@ericslocumsparkspc.com In re Aaron Rubin Bankr. D. Ariz. Case No. 13-01496 Chapter 11 Petition filed February 1, 2013 In re Nickson's Machine Shop, Inc. Bankr. C.D. Calif. Case No. 13-10272 Chapter 11 Petition filed February 1, 2013 See http://bankrupt.com/misc/cacb13-10272.pdf represented by: John E. Hinden, Esq. E-mail: ccman53@hotmail.com In re Robert Lund Bankr. C.D. Calif. Case No. 13-10715 Chapter 11 Petition filed February 1, 2013 In re Miguel Lopez Bankr. C.D. Calif. Case No. 13-10718 Chapter 11 Petition filed February 1, 2013 In re Lenore Pride Bankr. C.D. Calif. Case No. 13-12806 Chapter 11 Petition filed February 1, 2013 In re 28-32 Girard, LLC Bankr. D. Conn. Case No. 13-20223 Chapter 11 Petition filed February 1, 2013 See http://bankrupt.com/misc/ctb13-20223.pdf represented by: Jefferson Hanna, III, Esq. E-mail: jeffersonhanna@sbcglobal.net In re Perry Family Investments, Ltd. Bankr. M.D. Fla. Case No. 13-01270 Chapter 11 Petition filed February 1, 2013 See http://bankrupt.com/misc/flmb13-01270.pdf represented by: Kenneth D. Herron, Jr., Esq. WOLFF, HILL, MCFARLIN & HERRON, P.A. E-mail: kherron@whmh.com In re John Brown Bankr. M.D. Fla. Case No. 13-01275 Chapter 11 Petition filed February 1, 2013 In re Aundre Thompson Bankr. N.D. Ga. Case No. 13-52017 Chapter 11 Petition filed February 1, 2013 In re Joesph Wilkerson Bankr. S.D. Ill. Case No. 13-40098 Chapter 11 Petition filed February 1, 2013 In re Erich Snyder Bankr. S.D. Ill. Case No. 13-40100 Chapter 11 Petition filed February 1, 2013 In re Chris Davlantes Bankr. D. Kans. Case No. 13-20228 Chapter 11 Petition filed February 1, 2013 In re Richard Theriault Bankr. D. Mass. Case No. 13-10610 Chapter 11 Petition filed February 1, 2013 In re Medical Investment Group, Inc. Bankr. D. Mass. Case No. 13-10611 Chapter 11 Petition filed February 1, 2013 See http://bankrupt.com/misc/mab13-10611.pdf represented by: George J. Nader, Esq. RILEY & DEVER, P.C. E-mail: nader@rileydever.com In re Strategic Product Development, Inc. Bankr. D. Mass. Case No. 13-10612 Chapter 11 Petition filed February 1, 2013 See http://bankrupt.com/misc/mab13-10612.pdf represented by: George J. Nader, Esq. RILEY & DEVER, P.C. E-mail: nader@rileydever.com In re Ice Hut Development, LLC Bankr. D. Mass. Case No. 13-10613 Chapter 11 Petition filed February 1, 2013 In re Guillermo Guevara Bankr. D. Nev. Case No. 13-10835 Chapter 11 Petition filed February 1, 2013 In re Toros Yeranosian Bankr. D. Nev. Case No. 13-10845 Chapter 11 Petition filed February 1, 2013 In re Joseph Frioni Bankr. W.D. Pa. Case No. 13-20470 Chapter 11 Petition filed February 1, 2013 In re William Gregg Bankr. D. S.C. Case No. 13-00665 Chapter 11 Petition filed February 1, 2013 In re Nathan Nevils Bankr. M.D. Tenn. Case No. 13-00860 Chapter 11 Petition filed February 1, 2013 In re Central Texas Cable Partners Inc. dba Reveille Broadband Bankr. W.D. Tex. Case No. 13-10184 Chapter 11 Petition filed February 1, 2013 See http://bankrupt.com/misc/txwb13-10184.pdf represented by: Ron Satija, Esq. HALL ATTORNEYS, P.C. E-mail: rsatija@hallattorneys.com In re Eye City LLC Bankr. W.D. Tex. Case No. 13-60061 Chapter 11 Petition filed February 1, 2013 See http://bankrupt.com/misc/txwb13-60061.pdf represented by: John A. Montez, Esq. MONTEZ & WILLIAMS, P.C. E-mail: johna.montez@yahoo.com In re Meadowdale Premier Property Corporation aka Richard Williams Charlotte Williams dba Meadowdale Apts Bankr. W.D. Wash. Case No. 13-10901 Chapter 11 Petition filed February 1, 2013 See http://bankrupt.com/misc/wawb13-10901.pdf Filed as Pro Se In re Grant Sheppard Bankr. W.D. Wash. Case No. 13-40691 Chapter 11 Petition filed February 1, 2013 In re B. Parsons Bankr. E.D. Wis. Case No. 13-21203 Chapter 11 Petition filed February 1, 2013 In re Lawrence Dodge Bankr. C.D. Calif. Case No. 13-11037 Chapter 11 Petition filed February 2, 2013 In re George Bialecki Bankr. N.D. Ill. Case No. 13-04126 Chapter 11 Petition filed February 2, 2013 In re North Galloway Tire & Service, Inc. dba Jordan's Car Care Center #1 Bankr. N.D. Tex. Case No. 13-30522 Chapter 11 Petition filed February 2, 2013 See http://bankrupt.com/misc/txnb13-30522.pdf represented by: Howard Marc Spector, Esq. Spector & Johnson, PLLC E-mail: hspector@spectorjohnson.com In re Robert Mintz Bankr. C.D. Calif. Case No. 13-12888 Chapter 11 Petition filed February 3, 2013 In re In The Zone Sports Bar And Grill, Inc. Bankr. D. Colo. Case No. 13-11469 Chapter 11 Petition filed February 3, 2013 See http://bankrupt.com/misc/cob13-11469.pdf represented by: Philipp C. Theune, Esq. E-mail: ptheune@powelltheune.com In re Derald Martin Bankr. W.D. Wash. Case No. 13-10943 Chapter 11 Petition filed February 3, 2013 In re E. Barnes Bankr. N.D. Ala. Case No. 13-80310 Chapter 11 Petition filed February 4, 2013 In re Douglas Hammond Bankr. N.D. Ala. Case No. 13-80318 Chapter 11 Petition filed February 4, 2013 In re Hee Lee Bankr. C.D. Calif. Case No. 13-12008 Chapter 11 Petition filed February 4, 2013 In re Parties by Panache Inc. Bankr. C.D. Calif. Case No. 13-11052 Chapter 11 Petition filed February 4, 2013 See http://bankrupt.com/misc/cacb13-11052.pdf represented by: Jefford C. Davis, Esq. GJefford C. Davis & Associates E-mail: njjop@aol.com In re BA Wilson Construction, Inc. Bankr. M.D. Fla. Case No. 13-00638 Chapter 11 Petition filed February 4, 2013 See http://bankrupt.com/misc/flmb13-00638.pdf represented by : Bryan K. Mickler, Esq. Mickler & Mickler E-mail: court@planlaw.com In re C & L Dining, Inc. dba Happy Buddha dba Buddha Bar & Grill Bankr. M.D. Fla. Case No. 13-01447 Chapter 11 Petition filed February 4, 2013 See http://bankrupt.com/misc/flmb13-01447.pdf represented by: Susan D. Lasky, Esq. Susan D Lasky PA E-mail: slaskylbrpa@bellsouth.net In re Community Fellowship Christian Church & Family Life Center Inc. Bankr. N.D. Ga. Case No. 13-10293 Chapter 11 Petition filed February 4, 2013 See http://bankrupt.com/misc/ganb13-10293.pdf represented by: W. Kevin Snyder, Esq. Lacy & Snyder LLP E-mail: kevin@lacysnyder.com In re Eastville Development Corp. Bankr. N.D. Ga. Case No. 13-52195 Chapter 11 Petition filed February 4, 2013 Filed pro se In re Macon Gooch Bankr. N.D. Ga. Case No. 13-52214 Chapter 11 Petition filed February 4, 2013 In re Royal Estates Corp. Bankr. N.D. Ga. Case No. 13-52196 Chapter 11 Petition filed February 4, 2013 Filed pro se In re The Preserve at Camp Valley, Inc. Bankr. N.D. Ga. Case No. 13-52207 Chapter 11 Petition filed February 4, 2013 Filed pro se In re William Krystopowicz Bankr. N.D. Ga. Case No. 13-52397 Chapter 11 Petition filed February 4, 2013 In re Indiana Laminated Wall Corp. Bankr. N.D. Ind. Case No. 13-20296 Chapter 11 Petition filed February 4, 2013 See http://bankrupt.com/misc/innb13-20296p.pdf See http://bankrupt.com/misc/innb13-20296c.pdf represented by: Shawn D. Cox, Esq. Gouveia & Associates E-mail: geglaw@gouveia.comcastbiz.net In re Jackson Simpson Bankr. W.D. La. Case No. 13-80133 Chapter 11 Petition filed February 4, 2013 In re Roger Tillman Bankr. W.D. Mich. Case No. 13-00787 Chapter 11 Petition filed February 4, 2013 In re Georgia Smith Bankr. D. Nev. Case No. 13-10848 Chapter 11 Petition filed February 4, 2013 In re Valley Brook Nursery LLC Bankr. D.N.J. Case No. 13-12171 Chapter 11 Petition filed February 4, 2013 See http://bankrupt.com/misc/njb13-12171.pdf represented by: Andre L. Kydala, Esq. E-mail: kydalalaw@aim.com In re The Gathering Horse, LLC Bankr. S.D.N.Y. Case No. 13-10360 Chapter 11 Petition filed February 4, 2013 See http://bankrupt.com/misc/nysb13-10360.pdf represented by: David R. Biondi, Esq. E-mail: davidr.biondi@yahoo.com In re Ocean Sports Inc. dba Desert Divers Scuba Center Worldwide Diving Services, Inc. Bankr. D. Ariz. Case No. 13-01583 Chapter 11 Petition filed February 5, 2013 See http://bankrupt.com/misc/azb13-01583.pdf represented by: Eric Slocum Sparks, Esq. ERIC SLOCUM SPARKS, P.C. E-mail: law@ericslocumsparkspc.com In re Competition Tire & Svc LLC Bankr. D. Ariz. Case No. 13-01586 Chapter 11 Petition filed February 5, 2013 See http://bankrupt.com/misc/azb13-01586.pdf represented by: Eric Slocum Sparks, Esq. ERIC SLOCUM SPARKS, P.C. E-mail: law@ericslocumsparkspc.com In re Abraham Rosenfeld Bankr. C.D. Calif. Case No. 13-13049 Chapter 11 Petition filed February 5, 2013 In re Dikran Papazian Bankr. C.D. Calif. Case No. 13-13075 Chapter 11 Petition filed February 5, 2013 In re Astec, Ltd. dba Sprouts Extraordinaire Bankr. D. Colo. Case No. 13-11602 Chapter 11 Petition filed February 5, 2013 See http://bankrupt.com/misc/cob13-11602p.pdf See http://bankrupt.com/misc/cob13-11602c.pdf represented by: Jeffrey S. Brinen, Esq. KUTNER MILLER BRINEN, P.C. E-mail: jsb@kutnerlaw.com In re Max Polo Bankr. M.D. Fla. Case No. 13-01479 Chapter 11 Petition filed February 5, 2013 In re Polo Plastic Surgery, P.A. Bankr. M.D. Fla. Case No. 13-01480 Chapter 11 Petition filed February 5, 2013 See http://bankrupt.com/misc/flmb13-01480.pdf represented by: Buddy D. Ford, Esq. BUDDY D. FORD, P.A. E-mail: Buddy@tampaesq.com In re Bartholomew Caso Bankr. S.D. Fla. Case No. 13-12673 Chapter 11 Petition filed February 5, 2013 In re William Smith Bankr. N.D. Ga. Case No. 13-40295 Chapter 11 Petition filed February 5, 2013 In re Holwest VI LLC Bankr. N.D. Ga. Case No. 13-52536 Chapter 11 Petition filed February 5, 2013 Filed as Pro Se In re Derek Nevinger Bankr. N.D. Ill. Case No. 13-04437 Chapter 11 Petition filed February 5, 2013 In re Richard Ng Bankr. N.D. Ill. Case No. 13-80361 Chapter 11 Petition filed February 5, 2013 In re Chem-Trol, Inc. Bankr. D. Kans. Case No. 13-20241 Chapter 11 Petition filed February 5, 2013 See http://bankrupt.com/misc/ksb13-20241.pdf represented by: Jeffrey A. Deines, Esq. LENTZ CLARK DEINES, P.A. E-mail: jdeines@lcdlaw.com In re Trailblazers Int'l Christian Center, Inc. Bankr. D. Md. Case No. 13-11958 Chapter 11 Petition filed February 5, 2013 See http://bankrupt.com/misc/mdb13-11958.pdf represented by: David W. Cohen, Esq. LAW OFFICE OF DAVID W. COHEN E-mail: dwcohen79@jhu.edu In re Normal Enterprises, LLC dba Beards Party Store Bankr. D. Mich. Case No. 13-30368 Chapter 11 Petition filed February 5, 2013 See http://bankrupt.com/misc/mieb13-30368p.pdf See http://bankrupt.com/misc/mieb13-30368c.pdf represented by: Peter T. Mooney, Esq. SIMEN, FIGURA & PARKER, PLC E-mail: pmooney@sfplaw.com In re Quality Logging, Inc. aka Lee Evans, Jr. dba Quality Logging Bankr. E.D.N.C. Case No. 13-00738 Chapter 11 Petition filed February 5, 2013 See http://bankrupt.com/misc/nceb13-00738.pdf represented by: George M. Oliver, Esq. OLIVER FRIESEN CHEEK, PLLC E-mail: efile@ofc-law.com In re Disposal Corporation of America Bankr. E.D. Pa. Case No. 13-11034 Chapter 11 Petition filed February 5, 2013 See http://bankrupt.com/misc/paeb13-11034.pdf represented by: Ronald J. Pressley, Esq. RONALD J. PRESSLEY, P.C. E-mail: rjp@rjpressley.com In re Rohr Industries, Inc. Bankr. W.D. Pa. Case No. 13-10149 Chapter 11 Petition filed February 5, 2013 See http://bankrupt.com/misc/pawb13-10149.pdf represented by: Louis A. Margiotti, Esq. LAW OFFICE OF LOUIS A. MARGIOTTI E-mail: louislaw@blackonyx.net In re Timothy Fettroll Bankr. M.D. Tenn. Case No. 13-00952 Chapter 11 Petition filed February 5, 2013 In re Suleman Sohani Bankr. W.D. Tenn. Case No. 13-21223 Chapter 11 Petition filed February 5, 2013 In re Sedgwrick Pitts Bankr. E.D. Tex. Case No. 13-60086 Chapter 11 Petition filed February 5, 2013 In re Santano Galo Bankr. S.D. Tex. Case No. 13-30764 Chapter 11 Petition filed February 5, 2013 In re W. Nawrocki Bankr. E.D. Wis. Case No. 13-21311 Chapter 11 Petition filed February 5, 2013 ********* 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 ***