/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130212.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, February 12, 2013, Vol. 17, No. 42 Headlines 21ST CENTURY: S&P Rates Series 2013A & 2013B Revenue Bonds 'BB-' 38 STUDIOS: Releases 401(k) Plans for Ex-Employees A&S GROUP: GGG Out After Managing Member Named Debtor's CEO A123 SYSTEMS: March 13 Hearing on Liquidating Plan Outline ADVANTAGE SALES: S&P Corrects Feb. 7 Ratings Release AHERN RENTALS: Bondholders File Rival Bankruptcy-Exit Plan AMEREN ENERGY: S&P Lowers CCR to 'CCC+' on Weak Power Prices AMERICAN AIRLINES: Boards to Meet Tomorrow; Deal May Be Unveiled AMERICAN AIRLINES: AEA Unions Object to Contract With Republic AMPAL-AMERICAN: Committee Moves to Force Payment of Fees AMPAL-AMERICAN: Bondholders Seek to Examine Treaty Dispute API TECHNOLOGIES: S&P Puts 'B' CCR on CreditWatch Negative ARIZONA GRANUALATION: Case Summary & 20 Largest Unsec. Creditors AVAYA INC: Moody's Rates New Exchange Notes Caa1; Affirms B3 CFR BERNARD L. MADOFF: Trustee Has $90.3MM Judgment Against Peter CABLEVISION SYSTEMS: Bresnan Sale No Impact on Moody's 'Ba2' CFR CAMP INTERNATIONAL: Moody's Cuts First Lien Debt Rating to 'B3' CCH II: Moody's Changes Outlook to Stable After Bresnan Purchase CHINA NATURAL: Hedge Fund Asks Court to Put Firm in Chapter 11 CHINA NATURAL GAS: Involuntary Chapter 11 Case Summary CIRCLE FAMILY: Case Summary & 20 Largest Unsecured Creditors COCOPAH NURSERIES: Court OKs Hochman Salkin as Tax Counsel COLLEGE BOOK: Bradley Arant Resigns as Debtor's Counsel COLFAX CORP: S&P Rates $2 Billion Senior Secured Facility 'BB+' COMMONWEALTH EDISON: Fitch Affirms 'BB+' Preferred Stock Rating COMMUNITY HEALTHCARE OF DOUGLAS: Case Summary & Creditors' List CONTINENTAL AIRLINES: Dreamliner Woes No Impact on Moody's Rating CRAWFORDSVILLE LLC: Committee Retains SugarFGH as Counsel DOLLAR GENERAL: Moody's Eyes Possible Ratings Upgrade EDUCATION HOLDINGS: Has $7 Million Loan Approved EL FARMER: Hires Modesto Bigas as Counsel FLAT OUT: Seeks to Auction Flat Top Grill Assets FRIENDSHIP DAIRIES: Can Employ Raymond Hunter as Dairy Consultant FRIENDSHIP DAIRIES: Robbins Salomon Replaces Levenfeld GAMETECH INT'L: Charles Jobson Discloses 4.7% Equity Stake GEOKINETICS INC: Voting Deadline for Prepackaged Plan on March 8 GEOMET INC: Robeco No Longer Owned Shares as of Dec. 31 GLYECO INC: Amends Asset Purchase Pact with Renew Resources GOLD PROPERTIES: Case Summary & 20 Largest Unsecured Creditors GRAND JUNCTION: Case Summary & 20 Largest Unsecured Creditors GREEN EARTH: Former Mid-West Fuels President Named to Board GREEN ENERGY: Chiropractic Associates Director Named to Board GSC GROUP: Kaye Scholer Can't Keep Fees: Says U.S. Trustee HAMPTON ROADS: Davidson Kempner No Longer Had Shares as of Dec. 31 HIGH LINER: Credit Facility Changes No Impact on Moody's 'B1' CFR HORIZON LINES: Acquires Three Vessels for $91.8 Million HOSTESS BRANDS: Has Green Light to Auction Brands in March HOSTESS BRANDS: Workers Seeking Higher Wages From Buyers HYPERTENSION DIAGNOSTICS: Issues $200,000 Notes to 2 Directors IMAGEWARE SYSTEMS: Traditional Investment Holds 7.6% Equity Stake INDIEPUB ENTERTAINMENT: Suspends Reporting Obligations with SEC INTELLIPHARMACEUTICS: Isa Odidi Discloses 40.8% Equity Stake ISOLA USA: Heavy Debt Burden Cues Moody's to Cut CFR to 'Caa2' ISTAR FINANCIAL: Diamond Hill Discloses 5.5% Equity Stake ISTAR FINANCIAL: BlackRock Discloses 6.8% Equity Stake JEFFERSON COUNTY: Indenture Trustee Seeks to Spread Payments JEFFERSON COUNTY: S&P Lowers Rating on Sewer Warrants to 'D' JEFFERSON COUNTY: Bondholders Sue Over Sewer Payments LEGENDS GAMING: Debtor and Chickasaws Sue One Another LEHMAN BROTHERS: LBI Trustee Earmarks $15.2 Billion for Clients LEHMAN BROTHERS: Standard Chartered Suit Dismissal Approved LEVI STRAUSS: Reports $143.8 Million Net Income in Fiscal 2012 LHI HOLDCO: S&P Assigns 'B-' CCR; Rates $10MM Revolver 'B+' LIGHTSQUARED INC: Seeks Plan Filing Exclusivity Until May 31 LIGHTSQUARED INC: Build-Out Loan Will Now be Made In Two-Drawings LONG ISLAND COLLEGE HOSPITAL: Officials Vote to Shut Down LPATH INC: Ailsa Craig Trust Discloses 4.9% Equity Stake LSP ENERGY: Creditors Voting on 32% Plan for Unsecured Creditors LYONDELL CHEMICAL: BNY Defends $18-Bil. Debt Addition in Suit MCCLATCHY CO: Contrarius Holds 10.6% of Class A Shares MCCLATCHY CO: Incurs $30 Million Net Loss in Fourth Quarter MF GLOBAL: JPMorgan Tells Some Creditors Payment May be Higher MICROSEMI CORP: S&P Rates $726MM Loan 'BB'; Retains 'BB-' CCR MICHAEL BROTHERS: Case Summary & 5 Largest Unsecured Creditors MOHEGAN TRIBAL: Moody's Views Market East Partnership Favorably MOMENTIVE SPECIALTY: Unit Issues $1.1 Billion Sr. Secured Notes MORGANS HOTEL: MFS No Longer Owns Common Shares NEW LEAF: Incurs $2.8 Million Net Loss in First Quarter NEW LIGHT: Case Summary & 2 Unsecured Creditors NEXSTAR BROADCASTING: ABRY Affiliates to Resell 3-Mil. Shares NICHOLAS A. CLEMENTE: Voluntary Chapter 11 Case Summary NORTEL NETWORKS: US Unit, Bondholders Want Trial By Fall NYTEX ENERGY: Has 5MM Shares Available Under Amended Equity Plan ORAGENICS INC: Koski Family Discloses 45.4% Equity Stake PACIFIC THOMAS: Court Orders Appointment of Chapter 11 Trustee PARK-OHIO INDUSTRIES: S&P Affirms 'B' CCR; Outlook Positive PATRIOT COAL: Wins OK for Bryan Cave as Local Counsel PICCADILLY RESTAURANTS: Protiviti Okayed as Committee's Advisor PINNACLE AIRLINES: Ryan Morris Discloses 4.7% Equity Stake POWER BALANCE: To Seek Approval of Plan Disclosures in March POWERWAVE TECHNOLOGIES: Hiring Approvals Sought QUANTUM FUEL: Hudson Bay Discloses 5.1% Equity Stake QUANTUM CORP: Amends Credit Agreement with Wells Fargo PROVIDENT ROYALTIES: Trustee Settles Creditor Suit Over Fees RADIOSHACK CORP: Walgreen Exec. Named Chief Executive Officer RADIAN GROUP: Mortgage Insurance Unit Adds Sales Professionals RESIDENTIAL CAPITAL: Examiner's Prebankruptcy Report Delayed Again RG STEEL: Wants to Sell Louisville Property for $400,000 Cash RHYTHM & HUES: Animator Files Ch.11 After Planned Sale Breaks Down RITE AID: To Amend and Restate Revolving Credit Facility ROCK ENERGY: Taps Andrew Gaudielle to Evaluate Red Arrow Mine ROTECH HEALTHCARE: Robeco No Longer Owns Common Shares SAN BERNARDINO: Small Municipal Union Aims for Big Ruling SAN DIEGO HOSPICE: U.S. Trustee to Name Health Care Ombudsman SAN DIEGO HOSPICE: Section 341(a) Meeting Scheduled for March 13 SANUWAVE HEALTH: Prudential Financial Ceases to Hold 5% Stake SCHUTJER BOGAR: Harrisburg Firm Said To Be Nearing Bankruptcy SCITOR CORP: Good Market Position Prompts Moody's to Keep B2 CFR SEALY CORP: Hudson Bay Discloses 9.6% Equity Stake SECUREALERT INC: Inks Settlement Agreement with Borinquen SINCLAIR BROADCAST: Reports $59.4 Million Net Income in 4th Qtr. SMF ENERGY: Liquidating Plan Effective Dec. 28, 2012 SPRINT NEXTEL: Incurs $1.3 Billion Net Loss in Fourth Quarter STAR EMS: Case Summary & 18 Largest Unsecured Creditors STEREOTAXIS INC: CFO Steps Down to Pursue New Career Opportunity SUNSHINE HOTELS: Wins Interim Approval for Gallagher as Counsel SUNSHINE HOTELS: Wins Interim Approval to Use Cash Collateral SUNSHINE HOTELS: Section 341(a) Meeting Scheduled for March 12 T SORRENTO: Watchdog Wants Case Dismissal; RMR Seeks Stay Relief T-L CHEROKEE: Seeks to Use Cole Taylor's Cash Collateral T-L CHEROKEE: Section 341(a) Meeting Scheduled for March 15 TANGLEWOOD FARMS: Suit v. Augusta Seed Survives Dismissal Bid TEMBEC: Moody's Changes Outlook on 'B3' CFR to Negative TITAN PHARMACEUTICALS: Amends Facility Agreement with Deerfield TRAK GROUP: Voluntary Chapter 11 Case Summary TRANS-LUX CORP: Amends 27.1-Mil. Common Shares Resell Prospectus TRANS-LUX CORP: Holders Have Until April 19 to Exercise Warrants TRAVELCLICK INC: S&P Revises Outlook on 'B' CCR to Stable TRI-CHEK SEEDS: Case Converted to Chapter 7 TWCC HOLDING: Debt Repricing No Impact on Moody's 'Ba3' CFR UNITED WESTERN: Has Opposition to Disclosure Approval UNIVERSAL HEALTH: BankUnited Wants Chapter 11 Case Dismissed UNIVISION COMMUNICATIONS: S&P Rates $1.5BB Loan Due 2020 'B+' UPLAND, CA: San Bernardino County Lawsuit Could Force Bankruptcy USG CORP: Incurs $12 Million Net Loss in Fourth Quarter VANDERRA RESOURCES: RSI Bros. to Auction Furniture, Equipment VAREL FUNDING: S&P Withdraws 'CCC+' Corporate Credit Rating VELOCITY INTERNATIONAL: Case Summary & Creditors List VI-JON INC: S&P Withdraws 'B' Corporate Credit Rating VILLAGIO PARTNERS: Broker Represented Both Seller and Buyer VUZIX CORP: To Effect a 1-for-75 Reverse Common Stock Split W.R. GRACE: Iridian Discloses 6% Stake in Grace Equity W.R. GRACE: Has $111.6 Million Net Loss in Fourth Quarter WEST CORP: S&P Affirms 'B+' CCR; Rates Two Secured Loans 'B+' WPCS INTERNATIONAL: Hudson Bay Discloses 9.9% Equity Stake XZERES CORP: Amends Periodic Reports to Comply with Regulation ZACKY FARMS: Family Trust Still Vying to Buy Assets ZACKY FARMS: Buyer Cries Foul over Sale of Turkey Inventory ZOGENIX INC: Arda Minocherhomjee Quits From Board of Directors * Debtor Also May File Suit for Chapter 13 Estate * Rule 60(b) Allows Moving Effective Date of Rejection * 5th Cir. Says State Court Finding on Status of Debt Final * Solar Panel Oversupply Has Long-Term Benefit, Resnick Says * 2013 Debt Maturities of $21-Bil. Grow to $258-Bil. in 2017 * Junk Bond Default Rates Decline Again in January * Libor Accords Leave Banks Facing "Massive" State Claims * Elizabeth Warren Not Ready to Back Down on U.S. Consumer Bureau * State Lawsuits Could Add to S&P Foreclosure * Large Companies With Insolvent Balance Sheets ********* 21ST CENTURY: S&P Rates Series 2013A & 2013B Revenue Bonds 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' long-term rating to the Indiana Finance Authority's $12.945 million series 2013A educational facilities revenue bonds and $555,000 series 2013B taxable educational facilities revenue bonds issued for 21st Century Charter School at Gary Inc. (21st Century). The outlook is stable. "The rating reflects S&P's view of 21st Century's strong business position and solid demand characteristics that support the achievability of the school's expansion plans," said Standard & Poor's credit analyst Avanti Paul. The bond proceeds will largely be used to finance the construction of a facility on land donated by Gary, in addition to purchasing the existing facility and fully funding a capitalized interest and debt service reserve fund. The stable outlook reflects S&P's view that the school will maintain its strong demand profile and continue to meet its coverage and cash reserve projections during the next 12 months. 38 STUDIOS: Releases 401(k) Plans for Ex-Employees -------------------------------------------------- Jeffrey Grubb, writing for Venture Beat, reports that 38 Studios released the 401(k) retirement savings plans for its former employees. The report notes 38 Studios in May laid off its entire staff, ended their health care plan, and froze the tax-free retirement-savings accounts. The studio was out of money and already missed several loan payments guaranteed by Rhode Island state. The report also notes 38 Studios founder, former Major League Baseball pitcher Curt Schilling Schilling, and many of its ex- officers are facing trial. The report says Rhode Island sued them for financial misconduct, and trial is likely still months away. 38 Studios LLC, a video-game developer founded by former Boston Red Sox pitcher Curt Schilling, filed for liquidation on June 8, 2012, without attempting to reorganize. Although based in Providence, Rhode Island, the company filed the Chapter 7 petition in Delaware (Case No. 12-11743). A&S GROUP: GGG Out After Managing Member Named Debtor's CEO ----------------------------------------------------------- U.S. Bankruptcy Judge Wendy L. Hagenau approved a motion by Donald F. Walton, United States Trustee for Region 21, to disqualify GGG Inc. as A&S Group Inc.'s financial consultant. On Sept. 27, 2012, the Court entered an Order approving the employment of GGG Inc. Katie S. Goodman is the managing partner of GGG Inc., and the individual designated as the primary person who would work on the Debtor's case. On Oct. 22, 2012, the Debtor's principals, Sami Durukan and Apel Dido, elected Ms. Goodman as chief executive officer and Director of the Debtor. Mr. Durukan and Mr. Dido then resigned as directors and officers of the Debtor. Ms. Goodman became to sole director of the Debtor. Therefore, according to the U.S. Trustee, Ms. Goodman is not disinterested and cannot be retained under 11 U.S.C. Sec. 327(a). 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. A123 SYSTEMS: March 13 Hearing on Liquidating Plan Outline ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that A123 Systems Inc., which sold its automotive lithium- ion batteries business, filed a liquidating Chapter 11 plan giving holders of $143.8 million in subordinated notes and $124 million of general unsecured claims a recovery of about 65%. According to the Disclosure Statement dated Feb. 6, 2013, holders of $35.7 million in senior note claims will be paid in full. The disclosure statement says it's unlikely there will be any distribution for shareholders. A March 13 hearing is scheduled for approval of the disclosure statement. The report notes that although unsecured, senior notes will be paid in full as a consequence of enforcement of provisions in the subordinated notes, under which distributions to the junior creditors go to senior noteholders until they are paid in full. The Bloomberg report notes that investors are predicting that holders of subordinated notes will recover more than the disclosure statement predicts. Trace, the bond-price reporting system of the Financial Industry Regulatory Authority, reports that the convertible subordinated notes traded Feb. 7 for 73 cents on the dollar, compared with 65 cents in the disclosure statement. The notes have more than trebled in price, having sold as low as 21.25 cents on the day of bankruptcy in October. Explaining the discrepancy between the bond price and the disclosure statement, David Epstein, a managing director with CRT Capital Group LLC in Stamford, Connecticut, told Bloomberg that "the market is saying that the general unsecured claims are inflated on a net basis." About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designed, developed, manufactured and sold advanced rechargeable lithium-ion batteries and battery systems and provided research and development services to government agencies and commercial customers. A123 was the recipient of a $249 million federal grant from the Obama administration. Pre-bankruptcy, A123 had an agreement to sell an 80% stake to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. Brown Rudnick LLP and Saul Ewing LLP serve as counsel to the Official Committee of Unsecured Creditors. The Debtor at the end of January closed the sale of substantially all assets to Wanxiang and Navitas Systems LLC. Substantially all of A123 Systems, Inc.'s non-government business assets have been acquired by A123 Systems, LLC, a newly formed, wholly owned subsidiary of Wanxiang, and the company's government business, including U.S. military contracts, has been acquired by Navitas through a separate asset purchase agreement. The deal had the support of A123's committee of unsecured creditors and was approved by a U.S. government panel that oversees foreign investment. ADVANTAGE SALES: S&P Corrects Feb. 7 Ratings Release ---------------------------------------------------- Standard & Poor's Ratings Services corrected its original article published on February 7, 2013. The ratings agency noted that some ratios in the last paragraph of the report were misstated. The corrected version is as follows: S&P said that it assigned issue ratings to Irvine, Calif.-based Advantage Sales & Marketing Inc.'s proposed first-lien and second- lien term loans. S&P assigned a 'B+' issue rating to the $907.5 million first-lien term loan due December 2017 with a recovery rating of '4', indicating S&P's expectation for average (30% to 50%) recovery for first-lien secured lenders in the event of a payment default. Concurrently, S&P assigned a 'B-' issue rating to the $300 million second-lien secured term loan due June 2018. S&P assigned a recovery rating of '6' to the second-lien loan, indicating its expectation for negligible (0% to 10%) recovery for second-lien secured lenders in the event of a payment default. The 'B+' corporate credit rating on Advantage Sales & Marketing remains unchanged. The outlook is stable. The proposed refinancing is leverage neutral. The transaction would increase the first-lien term loan by $50 million and would decrease the second-lien term loan by $50 million through the creation of new first-lien and second-lien debt tranches, as permitted by the existing credit agreement. The refinancing aims to lower interest rates and remove financial maintenance covenants, with springing covenants still applying to the revolver. The maturity dates would remain unchanged compared with the existing first-lien and second-lien debt tranches. S&P estimates the company will have about $1.4 billion in debt outstanding following the refinancing. The ratings on sales and marketing agency Advantage Sales & Marketing reflect S&P's assessment that the company's business risk profile will remain "fair" and its financial risk profile will remain "highly leveraged" over the next 12 months. S&P's business risk profile assessment primarily reflects the favorable industry dynamics and S&P's belief that Advantage will increase sales and profits as consumer packaged-goods producers will increase outsourcing of sales and marketing functions. Primary factors in S&P's financial risk profile assessment include weak credits ratios, an "adequate" liquidity profile, and S&P's view that financial policy is "very aggressive". S&P forecasts total debt to EBITDA will remain between 5x and 6x, funds from operations (FFO) to total debt will remain in the high single digit area, and EBITDA interest coverage will remain in the low to mid 2x area through the end of 2014, which is about consistent with a "highly leveraged" financial risk profile. (For the complete corporate credit rating rationale, see the summary analysis on Advantage Sales & Marketing, published Jan. 15, 2013.) RATINGS LIST Advantage Sales & Marketing Inc. Corporate credit rating B+/Stable/-- Ratings Assigned Advantage Sales & Marketing Inc. $907.5 million first-lien term loan due 2017 B+ Recovery rating 4 $300 million second-lien term loan due 2018 B- Recovery rating 6 AHERN RENTALS: Bondholders File Rival Bankruptcy-Exit Plan ---------------------------------------------------------- Jacqueline Palank at Daily Bankruptcy Review reports bondholders hope to own Ahern Rentals at the end of its restructuring, setting the stage for a showdown with the equipment-rental company's current owners. About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- now offers rental equipment to customers through its 74 locations in Arizona, Arkansas, California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. In its schedules, the Debtor disclosed $485.8 million in assets and $649.9 million in liabilities. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. The Debtor's Plan lists $379.2 million in debt held by major lenders plus much smaller amounts held by others. According to The Review-Journal's report, Judge Beesley said he does not think Ahern's plan offers full repayment -- known as present value -- so the owners cannot hang on to their entire positions under bankruptcy law. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. AMEREN ENERGY: S&P Lowers CCR to 'CCC+' on Weak Power Prices ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Ameren Energy Generating Co. to 'CCC+' from 'B-'. S&P also lowered the ratings on GenCo's senior unsecured debt to 'CCC+' from 'B' and revised the recovery rating to '3' from '2', which indicates S&P's expectation of meaningful (50%-70%) recovery in the event of a payment default. The outlook is negative, reflecting S&P's expectation that continued weak power prices will materially weaken the company's cash flow measures and ability to meet its financial commitments. The downgrade on Ameren Energy Generating Co. reflects S&P's view that the company's business model is vulnerable based on its diminished competitive position within the markets it serves and S&P's expectation for continued weak power prices. S&P expects that the company's cash flow will materially decrease as a result of significant margin compression. The negative outlook reflects S&P's base case scenario that the company's financial measures and profit margins will meaningfully deteriorate over the next few years because of continued weak power prices. These trends could result in lower ratings during the next 12 months and, absent a reversal of price trends, could lead to a payment default or debt restructuring. Key assumptions include continued weak U.S. economic growth, low gas prices, and heat rates that gradually reduce the company's annual electricity generation to about 16 terawatt hours. "We could lower the ratings if business trends remain negative or our assessment of the company's liquidity further weakens because of a worse-than-expected cash burn rate, which would most likely occur if the market price for electricity remains well below $40 per megawatt hour. We could revise the outlook to stable if financial measures consistently improve so that FFO to debt is greater than 7% and debt to EBITDA is less than 9x, which would most likely occur if the market price for natural gas improves to more than $4.30 per million cubic feet, resulting in higher electricity pricing and improved financial performance," said Standard & Poor's credit analyst Gabe Grosberg. AMERICAN AIRLINES: Boards to Meet Tomorrow; Deal May Be Unveiled ---------------------------------------------------------------- The Wall Street Journal's Mike Spector reports that people close to the discussions said the boards of American Airlines parent AMR Corp. and US Airways Group Inc. are scheduled to meet separately on Wednesday, Feb. 13, to consider approval of the airlines' merger. The sources said the two carriers could disclose a deal later that day or on Thursday. They said that nearly all the significant points of the deal have been finalized. The sources told WSJ that some outstanding issues remained, which could delay the scheduled board meetings and the announcement of the merger by a day or perhaps into next week. WSJ also reports that advisers on Monday were preparing presentations for the boards on the merger. WSJ notes the parties are racing to finish a deal before Friday, when nondisclosure agreements that some AMR bondholders signed expire. If the negotiations aren't completed by then, the bondholders could agree to extend the confidentiality agreements, though all those who have signed them would need to agree, the people said. The sources told WSJ that any deal would provide that: -- US Airways Chief Executive Doug Parker would run the combined airline as CEO. -- AMR CEO Tom Horton would become nonexecutive board chairman for a limited term. The sources told WSJ the exact length of Mr. Horton's term was still being negotiated on Monday. -- AMR creditors would own roughly 72% of the merged airline, and US Airways shareholders 28%. The sources told WSJ that the airlines are still discussing the exact makeup of the board, including the number of directors and who would appoint them. They are also negotiating potential equity awards and other compensation for the airline's new management and other employees as part of AMR's plan to emerge from bankruptcy proceedings. People familiar with the matter also told WSJ that AMR's unsecured creditors committee was scheduled to meet Monday and discuss the merger. The committee's advisers over the past year pushed AMR to consider a merger before emerging from bankruptcy proceedings. Creditors, including AMR bondholders who have formed their own committee, must approve AMR's bankruptcy-exit plan. Susan Carey at Daily Bankruptcy Review reports as AMR Corp. and US Airways intensify their talks on a possible merger that could be announced in the coming days, US Airways pilots on Friday widely approved a provisional labor agreement that would help smooth the path toward a combination, their union said. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. American Airlines, American Eagle and the AmericanConnection carrier serve 260 airports in more than 50 countries and territories with, on average, more than 3,300 daily flights. The combined network fleet numbers more than 900 aircraft. The Company reported a net loss of $884 million on $18.02 billion of total operating revenues for the nine months ended Sept. 30, 2011. AMR recorded a net loss of $471 million in the year 2010, a net loss of $1.5 billion in 2009, and a net loss of $2.1 billion in 2008. AMR's balance sheet at Sept. 30, 2011, showed $24.72 billion in total assets, $29.55 billion in total liabilities, and a $4.83 billion stockholders' deficit. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 ). AMERICAN AIRLINES: AEA Unions Object to Contract With Republic -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports the three labor unions for American Eagle Airline Inc., the feeder airline subsidiary of AMR Corp., came out opposing court approval of a contract for Republic Airways Holdings Inc. to fly 53 regional jets. The contract comes to court for consideration at a Feb. 14 hearing. According to the report, the agreement with Republic represents the first time American has contracted with a regional carrier other than subsidiary American Eagle. Republic will fly larger regional jets with 76 seats each. AMR would have been unable to contract with Republic until the newly negotiated contacts with American Eagle workers became effective last year. The three unions urge the bankruptcy judge to disallow "outsourcing" of work their members could perform. The report relates that the unions for the pilots, flight attendants and ground workers fault AMR's motion for being devoid of the financial underpinnings justifying a contract with Republic. The flight attendants contend there was no "legitimate business justification" for outsourcing and the resulting harm to American Eagle. 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 ). AMPAL-AMERICAN: Committee Moves to Force Payment of Fees -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the official creditors' committee for Ampal-American Israel Corp. wants the bankruptcy judge to hold the company's board of directors in contempt of court for failing to pay approved attorneys' fees. Brown & Rudnick LLP, lawyers for the creditors' committee, explained in court papers how the bankruptcy court in New York entered an order in January approving payment of about $650,000 in fees. At the same time, the court approved about $700,000 in fees for Bryan Cave LLP, Ampal's attorneys. Committee lawyers told the judge that the Ampal board voted to pay each firm only $250,000. The judge scheduled a Feb. 14 hearing to consider holding the directors in contempt or compelling them to pay approved fees. The committee concedes that the "availability of cash has been an issue of concern." The committee says there was a $3.5 million tax refund and income from subsidiaries to pay fees. Moreover, the committee believes Ampal has been paying non-U.S. professionals. About Ampal-American Ampal-American Israel Corporation -- http://www.ampal.com/-- acquired interests primarily in businesses located in Israel or that are Israel-related. Ampal-American filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29, 2012, to restructure the Company's Series A, Series B and Series C debentures. Bankruptcy Judge Stuart M. Bernstein presides over the case. Ampal-American sought bankruptcy protection in the U.S. because bankruptcy laws in Israel would lead to the Company's liquidation. Michelle McMahon, Esq., at Bryan Cave LLP, serves as the Debtor's counsel. Houlihan Lokey serves as investment banker. The petition was signed by Irit Eluz, chief financial officer, senior vice president. The Company scheduled $290,664,095 in total assets and $349,413,858 in total liabilities. A three-member official committee of unsecured creditors is represented by Brown Rudnick as counsel. In January, the Debtors' exclusive plan-filing rights were terminated. The committee filed its own Chapter 11 plan where unsecured creditors would receive 100% of the preferred stock of the reorganized Debtor or a cash payment. AMPAL-AMERICAN: Bondholders Seek to Examine Treaty Dispute ---------------------------------------------------------- Katy Stech at Dow Jones' DBR Small Cap reports that bondholders behind Ampal-American Israel Corp., a struggling transportation and energy investor, said they need more information from President Yosef Maiman and billionaire Sam Zell about the future of an Egyptian natural-gas pipeline that has sat dormant after several years of terrorist attacks. About Ampal-American Ampal-American Israel Corporation -- http://www.ampal.com/-- acquired interests primarily in businesses located in Israel or that are Israel-related. Ampal-American filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29, 2012, to restructure the Company's Series A, Series B and Series C debentures. Bankruptcy Judge Stuart M. Bernstein presides over the case. Ampal-American sought bankruptcy protection in the U.S. because bankruptcy laws in Israel would lead to the Company's liquidation. Michelle McMahon, Esq., at Bryan Cave LLP, serves as the Debtor's counsel. Houlihan Lokey serves as investment banker. The petition was signed by Irit Eluz, chief financial officer, senior vice president. The Company scheduled $290,664,095 in total assets and $349,413,858 in total liabilities. A three-member official committee of unsecured creditors is represented by Brown Rudnick as counsel. API TECHNOLOGIES: S&P Puts 'B' CCR on CreditWatch Negative ---------------------------------------------------------- Standard & Poor's Ratings Services said that it placed its 'B' corporate credit rating on API Technologies Corp. on CreditWatch with negative implications. At the same time, S&P withdrew the 'B' issue-level rating and '3' recovery rating (indicating expectations of meaningful [50%-70%] recovery in the event of a payment default) on the existing secured credit facility, which was refinanced with a new facility that S&P do not rate. "The CreditWatch placement reflects weaker-than-expected credit metrics resulting from less-than-expected improvements in operating performance and higher debt, including a modest increase from the recent refinancing," said Standard & Poor's credit analyst Chris Mooney. S&P had previously assumed that debt to EBITDA would improve to 4.5x-5x by mid-2013, but this seems less likely as the ratio was still 7x in the 12 months ending Aug. 31, 2012. Similarly, S&P had assumed funds from operation (FFO) to debt would improve to between 10% and 15% from less than 5% for the most recent period. API recently announced that it repaid its $184 million term loan with proceeds from a new $165 million term loan and $29 million of borrowings under a new $50 million asset-based loan facility. S&P believes this will result in an improved liquidity profile, with increased covenant headroom and a larger revolver. "We assess API's business risk as "vulnerable" because of its relatively small revenue base; participation in fragmented markets in which competitors are often larger; and considerable uncertainty surrounding the U.S. defense industry, API's primary end market. We assess API's financial risk profile as "highly leveraged" given its weak credit protection measures, acquisitive growth strategy, and significant ownership by private-equity firm Vintage Capital Management," S&P said. S&P will assess API's future earnings and cash generation potential and plan to resolve the CreditWatch listing in the coming weeks. S&P likely will lower the rating unless it believes the company will be able to restore credit metrics to the levels S&P previously expected over the next several quarters. ARIZONA GRANUALATION: Case Summary & 20 Largest Unsec. Creditors ---------------------------------------------------------------- Debtor: Arizona Granualation Technologies, LLC 1850 N. Higley Road Mesa, AZ 85205 Bankruptcy Case No.: 13-01782 Chapter 11 Petition Date: February 8, 2013 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: Redfield T. Baum, Sr. Debtor's Counsel: Allan D. Newdelman, Esq. ALLAN D. NEWDELMAN, P.C. 80 E. Columbus Avenue Phoenix, AZ 85012 Tel: (602) 264-4550 Fax: (602) 277-0144 E-mail: anewdelman@qwestoffice.net Scheduled Assets: $4,663,344 Scheduled Liabilities: $6,072,031 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/azb13-01782.pdf The petition was signed by Jerry Butel, president/owner. AVAYA INC: Moody's Rates New Exchange Notes Caa1; Affirms B3 CFR ---------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Avaya's proposed junior lien Exchange Notes due 2021 and affirmed the B3 corporate family rating and existing B1 1st lien senior secured and Caa2 unsecured debt ratings. The notes are being offering in exchange for the company's USD700 million cash pay 9.75% Unsecured Senior Notes due 2015 and 10.125/10.875% USD834 million PIK/Toggle Unsecured Senior Notes due 2015 (both rated Caa2). The ratings outlook remains negative. Ratings Rationale The higher rating (Caa1) on the Exchange Notes reflects its junior lien, which places it above any remaining Unsecured Notes (Caa2) and domestic pension and trade liabilities in the capital structure but below the existing senior secured debt (rated B1). The ratings on the debt are determined in conjunction with Moody's Loss Given Default Methodology. The exchange will close provided the company gets acceptance from greater than 50% of the existing Unsecured Note holders and Unsecured Notes may remain outstanding after completion of the offer. LGD assessments could be revised depending on the amount of notes exchanged. If successful, the exchange will pave the way for extending the large amount of debt that currently is due in 2015 (USD1.5 billion in unsecured notes and USD2.7 billion in senior secure term debt). The senior secured debt jumps to 2017 and 2018 if certain provisions are met including refinancing at least USD750 million of the unsecured notes due 2015. The B3 corporate family rating and negative ratings outlook continues to reflect Avaya's very large debt burden (leverage greater than 8x) and declining revenue trends. Issuer: Avaya, Inc. Ratings Affirmed with LGD Revisions: Corporate Family Rating: B3 Probability of Default: B3-PD Senior Secured Bank Credit Facilities, revised to a range of B1, LGD2, 28% from a range of B1 LGD2, 27% USD1009M 7% Senior Secured Notes, revised to a range of B1, LGD2, 28% from a range of B1 LGD2, 27% USD700M and USD834M Senior Unsecured Notes revised to a range of Caa2, LGD5, 90% from a range of Caa2 LGD, 82% Assignments: Proposed Exchange Secured (junior priority) Notes, Assigned Caa1, LGD5, 72% The principal methodology used in rating Avaya was the Global Communications Equipment Industry Methodology published in June 2008. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Avaya is a global leader in enterprise telephony systems with USD5.2 billion of revenues for the LTM period ended September 30, 2012. BERNARD L. MADOFF: Trustee Has $90.3MM Judgment Against Peter ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Peter Madoff, brother of Bernard Madoff, consented to the entry of a $90.3 million judgment in favor of the trustee liquidating Bernard L. Madoff Investment Securities Inc. The judgment represent the entire amount trustee Irving Picard was hoping to recover in a lawsuit filed in 2009 in U.S. Bankruptcy Court in Manhattan. In return for the judgment, Mr. Picard agreed in papers filed with the bankruptcy court on Feb. 6 to drop his lawsuits against Peter's wife Marion and daughter Shana. Peter, 67, was sentenced in December to 10 years in prison for his role as Madoff's chief compliance officer. He also agreed to forfeit $143 billion and give up all his property. He pleaded guilty in June to two felony counts. The lawsuit against Peter is Picard v. Madoff (In re Bernard L. Madoff Investment Securities Inc.), 09-1503, U.S. Bankruptcy Court, Southern District New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.) The SIPA Trustee has said that as of March 31, 2012, through prepetition litigation and other settlements, he has successfully recovered, or reached agreements to recover, more than $9 billion -- over 50% of the principal lost in the Ponzi scheme by those who filed claims -- for the benefit of all customers of BLMIS. The liquidation has so far has cost the Securities Investor Protection Corp. $1.3 billion, including $791 million to pay a portion of customers' claims. Mr. Picard has so far made only one distribution in October of $325 million for 1,232 customer accounts. Uncertainty created by various appeals has limited Mr. Picard's ability to distribute recovered funds. CABLEVISION SYSTEMS: Bresnan Sale No Impact on Moody's 'Ba2' CFR ---------------------------------------------------------------- Moody's Investors Service said that Cablevision Systems Corporation's plan to sell Bresnan Broadband Holdings LLC is credit positive but does not impact Cablevision's Ba2 corporate family rating or stable outlook. Cablevision expects to receive net proceeds of approximately USD600 million, boosting short term liquidity. Moody's maintains separate corporate family ratings for Cablevision and Bresnan (B1 Stable) since the two have separate, ring fenced financing, and Cablevision lenders do not have direct access to Bresnan cash flow. The Bresnan sale would therefore provide cash to Cablevision without any meaningful impact on the ongoing cash flow available to service its debt. Cablevision did not disclose its expected use of proceeds. The company's operating strategy of increased investment and more aggressive pricing elevates credit risk and positions the company weakly within its Ba2 CFR. Cablevision's leverage was 5.3 times debt-to-EBITDA for the trailing twelve months ended September 30, 2012, and Moody's believes credit metrics will deteriorate based on full year results given the negative impact on operations from Hurricane Sandy. The cash injections from the Bresnan sale and the previously announced settlement of litigation with DISH Network LLC (subsidiary of Dish Network Corporation, DISH, Ba2 Stable) could strengthen the credit profile if Cablevision applies some portion of proceeds to debt reduction, which Moody's considers reasonably likely. The principal methodology used in rating Cablevision was the Global Cablevision Cable Television Industry published in July 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Cablevision Systems Corporation serves approximately 2.9 million video customers, 2.8 million high speed data customers, and 2.3 million voice customers in and around the New York metropolitan area. Cablevision is the direct parent of CSC Holdings, LLC, which also owns Newsday LLC, the publisher of Newsday and other niche publications. Bresnan Broadband Holdings, LLC and its subsidiaries own and operate cable television systems serving customers in Colorado, Wyoming, Montana and Utah. Following the leveraged buyout in December 2010, Bresnan is currently an indirect, wholly-owned subsidiary of Cablevision Systems Corporation. As of September 30, 2012, Bresnan had 304,000 video subscribers, 285,000 high speed data subscribers, and 169,000 phone subscribers, and its last twelve months revenue was approximately USD500 million. CAMP INTERNATIONAL: Moody's Cuts First Lien Debt Rating to 'B3' --------------------------------------------------------------- Moody's Investors Service affirmed CAMP International Holding Company's corporate family rating at B3. Concurrently, the company's first lien credit facility rating was lowered to B3 from B1, in consideration of the company's plan to upsize its existing first lien term loan to USD370 million and repay its USD115 million second lien term loan. Pro forma for the proposed transaction, the company's funded debt would be comprised entirely of first lien debt. The ratings outlook remains stable. Proceeds from the proposed transaction are expected to be used to refinance the company's existing USD255 million first lien and USD115 million second lien debt facilities. Drawings under the company's revolver are expected to be used to finance transaction- related expenses including the call premium and accrued interest associated with the second lien debt expected to be repaid. The proposed transaction is expected to moderately improve the company's liquidity position by reducing annual interest expense going forward. Ratings affirmed (with updated LGD assessments): Corporate family rating, at B3 Probability of default rating, at B3-PD USD115 million second lien term loan due November 2019, at Caa2 (LGD-5, 85%) Ratings lowered: USD30 million first lien revolver due May 2017, to B3 (LGD-3, 48%) from B1 (LGD-3, 32%) Proposed USD370 million first lien term loan (upsized from USD255 million) due May 2019, to B3 (LGD-3, 48%) from B1 (LGD- 3, 32%) These ratings are subject to Moody's review of final documentation following completion of the proposed refinancing. Assuming substantially all of the second lien debt is repaid, the second lien instrument rating will be withdrawn. Ratings Rationale CAMP's B3 CFR reflects very high financial leverage and small revenue scale balanced by a relatively stable subscription-based business. At September 30, 2012, debt/EBITDA (on a Moody's adjusted basis) stood at over 8.5x and debt/revenues approximated 5x, high for the rating category. CAMP has attained a good business position as a provider of business aircraft maintenance tracking services, which supports the CFR. The company has a small but stable and geographically diversified subscriber base which it has maintained through historically high subscriber renewal rates and long-term exclusive arrangements with several business aircraft manufacturers. The ratings also reflect increased integration risk from the company's acquisitive business strategy. The stable rating outlook is supported by an adequate liquidity profile and the expectation of healthy free cash flow generation and moderate credit metric improvement. The ratings could be downgraded if financial policies become more aggressive, liquidity weakens or the company fails to demonstrate credit improvement through earnings growth or debt repayment. Although not anticipated over the intermediate term, upward rating momentum would depend on an expectation of debt to EBITDA below 6x, free cash flow to debt above 10% and sustained adequate liquidity. The principal methodology used in this rating was the Global Aerospace and Defense published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. CAMP International Holding Company, based in Ronkonkoma, New York provides maintenance tracking, inventory control and flight scheduling services management programs. Revenues for the twelve months ended September 30, 2012 approximated USD75 million. In May of 2012 CAMP was acquired through a leveraged buy-out by affiliates of the financial sponsor GTCR, LLC in a USD700 million transaction. CCH II: Moody's Changes Outlook to Stable After Bresnan Purchase ---------------------------------------------------------------- Moody's Investors Service changed the outlook for CCH II, LLC (CCH II), an indirect intermediate holding company of Charter Communications, Inc. (Charter) to stable from positive. Moody's also affirmed CCH II's Ba3 corporate family rating. The outlook revision follows the company's announced plan to acquire Bresnan Broadband Holdings LLC (Bresnan, B1 Stable) for approximately USD1.625 billion. Moody's estimates the debt funded transaction will increase leverage to slightly over 5 times on a pro forma basis based on the twelve months EBITDA of the combined companies through September 30, 2012. Charter's leverage was approximately 4.9 times, pro forma for redemption of the CCH II notes, based on results through September. Moody's also changed the outlooks of all rated Charter operating subsidiaries to stable from positive and affirmed all existing ratings. A summary of the ratings action follows. CCH II, LLC Outlook, Changed To Stable from Positive Corporate Family Rating, Affirmed Ba3 Probability of Default Rating, Affirmed Ba3-PD Senior Unsecured Bonds, Affirmed B2 CCO Holdings, LLC Outlook, Changed To Stable from Positive Senior Unsecured Bonds, Affirmed B1 Senior Unsecured Shelf, Affirmed (P)B1 Charter Communications Operating, LLC Outlook, Changed To Stable from Positive Senior Secured Bank Credit Facility, Affirmed Baa3 Ratings Rationale Pro forma for the acquisition, Moody's estimates credit metrics appropriate for a Ba3 corporate family rating. However, the incremental debt incurred to fund the transaction would delay the previously expected decline in leverage, making an upgrade to Ba2 significantly less likely over the next year. As such, Moody's revised the outlook to stable. Moody's believes the acquisition would favorably expand Charter's scale, increasing total revenue to about USD7.9 billion from about USD7.4 billion. Bresnan subscriber penetration and revenue per homes passed metrics are better than Charter's, and over the past year, Bresnan has added high speed data and phone subscribers at a faster rate than most peers, including Charter, and kept video subscribers about flat, also better than most peers including Charter. Moody's estimates minimal cost synergies since Bresnan currently benefits from the scale of its existing owner, Cablevision Systems Corporation, for program and equipment purchasing and corporate costs. However, Moody's also considers integration risk modest, given the positive momentum of the Bresnan operations and that Charter's chief executive officer Tom Rutledge has familiarity with the Bresnan asset from his experience as chief operating officer of Cablevision. Charter's Ba3 corporate family rating reflects its moderately high financial risk, with leverage of just under 5 times debt-to-EBITDA (pro forma for redemption of the CCH II notes), and potentially increasing slightly with the Bresnan acquisition. This leverage poses risk considering the pressure on revenue from its increasingly mature core video offering (which represents about half of total revenue) and the intensely competitive environment in which it operates. Moody's expects Charter's initiatives to enhance its product set, especially the video offering, and to implement changes to its selling strategy and organizational structure will keep operating and capital expenditures elevated, pressuring both EBITDA and free cash flow over the next several quarters, but greater penetration of all products and continued expansion of the commercial business should yield more EBITDA. Also, capital intensity will likely moderate, albeit at a level higher than peers, facilitating growing free cash flow. The company's substantial scale and Moody's expectations for operational improvements and growth in high speed data and commercial phone customers, along with the meaningful perceived asset value associated with its sizeable (over 5 million) customer base, support the rating, as does the company's good liquidity. The stable outlook incorporates expectations for leverage below 5.5 times debt-to-EBITDA, positive free cash flow and maintenance of good liquidity. Moody's would consider an upgrade with continued improvements in both financial and operating metrics and a commitment to a better credit profile. Specifically, Moody's could upgrade the CFR based on expectations for sustained leverage below 4.5 times debt-to- EBITDA and free cash flow-to-debt in excess of 5%, along with maintenance of good liquidity. A higher rating would require clarity on fiscal policy, as well as product penetration levels more in line with industry averages and growth in revenue and EBITDA per homes passed. Moody's would likely downgrade ratings if ongoing basic subscriber losses, declining penetration rates, and/or a reversion to more aggressive financial policies contributed to expectations for leverage above 6 times debt-to-EBITDA and / or low single digit or worse free cash flow-to-debt. One of the largest domestic cable multiple system operators serving approximately 4 million residential video customers (5.3 million customers in total), Charter Communications, Inc., maintains its headquarters in Stamford, Connecticut. Its annual revenue is approximately USD7.4 billion. Bresnan Broadband Holdings, LLC and its subsidiaries own and operate cable television systems serving customers in Colorado, Wyoming, Montana and Utah. Following the leveraged buyout in December 2010, Bresnan is currently an indirect, wholly-owned subsidiary of Cablevision Systems Corporation (Cablevision, Ba2 CFR). As of September 30, 2012, Bresnan had 304,000 video subscribers, 285,000 high speed data subscribers, and 169,000 phone subscribers, and its last twelve months revenue was approximately USD500 million. The principal methodology used in rating CCH II was the Global Cable Television Industry Methodology published in July 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CHINA NATURAL: Hedge Fund Asks Court to Put Firm in Chapter 11 -------------------------------------------------------------- Katy Stech at Dow Jones' DBR Small Cap reports that a Hong Kong- based hedge fund is trying to push China Natural Gas Inc. into bankruptcy in New York as it tries to recover $41.1 million in notes from the natural-gas pipeline operator, which said it became the first Chinese natural-gas company to trade publicly in the U.S. China Natural Gas, through its wholly owned subsidiaries and variable interest entity (VIE), Xi'an Xilan Natural Gas Co., Ltd. (XXNGC) and subsidiaries of its VIE, which are located in Hong Kong, Shaanxi Province, Henan Province and Hubei Province in the People's Republic of China (PRC), engages in sales and distribution of natural gas and gasoline to commercial, industrial and residential customers through fueling stations and pipelines, construction of pipeline networks, installation of natural gas fittings and parts for end-users, and conversions of gasoline- fueled vehicles to hybrid (natural gas/gasoline) powered vehicles at automobile conversion sites. CHINA NATURAL GAS: Involuntary Chapter 11 Case Summary ------------------------------------------------------ Alleged Debtor: China Natural Gas, Inc. fka Coventure International, Inc. 90 Park Avenue, Suite 1625 New York, NY 10016 Case Number: 13-10419 Involuntary Chapter 11 Petition Date: February 8, 2013 Court: Southern District of New York (Manhattan) Petitioner's Counsel: Adam P. Strochak, Esq. WEIL, GOTSHAL & MANGES, LLP 1300 Eye Street, NW, Suite 900 Washington, DC 20005 Tel: (202) 682-7001 Fax: (202) 857-0939 E-mail: adam.strochak@weil.com China Natural Gas, Inc's petitioners: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Abax Lotus Ltd. Principal and interest $9,096,121 c/o Abax Global Capital due on guaranteed (Hong Kong) Limited Senior Notes 8 Finance Street, Ste 6708, 67th Flr. Two International Finance Centre Central and Western Dist., Hong Kong Abax Nai Xin A Ltd. Principal and interest $32,173,756 c/o Abax Global Capital due on guaranteed (Hong Kong) Limited Senior Notes 8 Finance Street, Ste 6708, 67th Flr. Two International Finance Centre Central and Western Dist., Hong Kong Lake Street Fund LP Principal and interest $1,019,078 1224 East Green St., due on guaranteed Suite 200 Senior Notes Pasadena, CA 91106-3171 CIRCLE FAMILY: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Circle Family Healthcare Network, an Illinois Not-For-Profit Corporation fka Circle Family Care, Inc. an Illinois Not-for-profit Corporation 5002 W. Madison Street Chicago, IL 60644 Bankruptcy Case No.: 13-04747 Chapter 11 Petition Date: February 8, 2013 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: A. Benjamin Goldgar Debtor's Counsel: Robert R. Benjamin, Esq. GOLAN & CHRISTIE, LLP 70 West Madison Street, Suite 1500 Chicago, IL 60602 Tel: (312) 263-2300 Fax: (312) 263-0939 E-mail: rrbenjamin@golanchristie.com Scheduled Assets: $782,608 Scheduled Liabilities: $3,054,004 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/ilnb13-04747.pdf The petition was signed by Andre L. Hines, executive director. COCOPAH NURSERIES: Court OKs Hochman Salkin as Tax Counsel ---------------------------------------------------------- Cocopah Nurseries of Arizona, Inc., sought and obtained permission from the U.S. Bankruptcy Court to employ Hochman, Salkin, Rettig, Toscher & Perez, P.C. as special tax counsel. Hochman will assist the Debtors and their lead counsel Squire Sanders (US) LLP in connection with tax disputes under these potential project categories: (i) legal research of the California tax liabilities at issue; (ii) communications with the Debtors, Squire Sanders, the Board, and any other parties relevant to the Tax Dispute; (iii) contribution to briefs; (iv) trial preparation including discovery; (v) co-counsel at trial and in the Section 505 tax litigation; and (vi) fee application preparation. The hourly rates for Hochman professionals and para-professionals range between $450 to $675 for partners, $350 to $375 for associates, and $175 for legal assistants. The firm's Kurt Kawafuchi attests the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Cocopah Nurseries Cocopah Nurseries of Arizona, Inc., and three affiliates sought Chapter 11 protection (Bankr. D. Ariz. Lead Case No. 12-15292) on July 9, 2012. The affiliates are Wm. D. Young & Sons, Inc.; Cocopah Nurseries, Inc.; and William Dale Young & Sons Trucking and Nursery. Cocopah Nurseries is a Young-family owned agricultural enterprise with operations in Arizona and California. The core business involves the cultivation of palm trees and other trees used for landscaping purposes, as well as the associated farming of citrus, dates, and other crops. The Debtors presently own more than 250,000 palm trees in various stages of the tree-growth cycle. Cocopah has 250 full-time salaried employees, and taps an additional 50 to 250 contract laborers depending on the season. Revenue in 2010 was $23 million, down from $57 million in 2006. Judge Eileen W. Hollowell presides over the case. The Debtors' counsel are Craig D. Hansen, Esq., and Bradley A. Cosman, Esq., at Squire Sanders (US) LLP. The petitions were signed by Darl E. Young, authorized representative. Attorneys for Rabobank, N.A., are Robbin L. Itkin, Esq., and Emily C. Ma, Esq., at Steptoe & Johnson LLP, and S. Cary Forrester, Esq., at Forrester & Worth, PLLC. Non-debtor affiliate Jewel Date Company, Inc., is represented by Michael W. Carmel, Ltd., as counsel. COLLEGE BOOK: Bradley Arant Resigns as Debtor's Counsel ------------------------------------------------------- Bradley Arant Boult Cummings LLP has stepped down as bankruptcy counsel to College Book Rental Company, LLC. The Court approved the removal of Bradley Arant as there were no objections to the withdrawal. As reported in the Nov. 13, 2012 edition of the TCR, Robert H. Waldschmidt, the Chapter 11 trustee in the bankruptcy case of the Debtor, has also tapped Bradley Arant as special counsel to: (1) assist in preparation of schedules, and initial documents required in the case, (2) represent the estate in ongoing litigation pending in state courts involving the Debtor, and (3) represent in any litigation commenced in the Bankruptcy Court. About College Book Four creditors filed an involuntary Chapter 11 bankruptcy petition against Murray, Kentucky-based College Book Rental Company, LLC (Bankr. M.D. Ky. Case No. 12-09130) in Nashville on Oct. 4, 2012. Bankruptcy Judge Marian F. Harrison oversees the case. The petitioning creditors are represented by Joseph A. Kelly, Esq., at Frost Brown Todd LLC. The petitioning creditors are David Griffin, allegedly owed $15 million for money loaned; Commonwealth Economics, allegedly owed $15,000 for unpaid services provided; John Wittman, allegedly owed $158 for unpaid services provided; and CTI Communications, allegedly owed $21,793 for unpaid services provided. The owners of College Book Rental consented to the Chapter 11 case and the appointment of a Chapter 11 trustee to run CBR. CBR is co-owned by Chuck Jones of Murray and David Griffin of Nashville, Tenn. An agreed order for relief under Chapter 11 was entered on Oct. 15, 2012. Robert H. Waldschmidt was appointed as trustee the next day. COLFAX CORP: S&P Rates $2 Billion Senior Secured Facility 'BB+' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' issue-level rating and '2' recovery rating to Colfax Corp.'s proposed $2 billion senior secured credit facility, which refinances Colfax's existing credit facility that the company put in place to back its acquisition of Charter International. The recovery rating of '2' reflects S&P's expectation for substantial recovery prospects (70%-90%) in the event of a payment default. The total facility size should remain unchanged. The company seeks to upsize its term loan A-1 by $150 million, upsize its revolving credit facility by $200 million, and reduce its term loan B by $350 million. The 'BB' corporate credit rating and stable outlook remain unchanged. S&P expects the credit facility to consist of a $300 million USD revolver, $333 million term loan A-1, $456 million term loan A-2, EUR157 million term loan A-3, and a $541 million term loan B, as well as a $200 million multicurrency revolver co-borrowed by Colfax UK Holdings Ltd., which is also the sole borrower of term loans A-2 and A-3. RATINGS LIST Colfax Corp. Corporate Credit Rating BB/Stable/-- New Ratings Colfax Corp. Senior Secured $300 million USD revolver BB+ Recovery rating 2 $333 million term loan A-1 BB+ Recovery rating 2 $541 million term loan B BB+ Recovery rating 2 Colfax UK Holdings Ltd. $456 million term loan A-2 BB+ Recovery rating 2 EUR157 million term loan A-3 BB+ Recovery rating 2 Colfax Corp. Colfax UK Holdings Ltd. Senior Secured $200 million multicurrency rev BB+ Recovery rating 2 COMMONWEALTH EDISON: Fitch Affirms 'BB+' Preferred Stock Rating --------------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDR) and instrument ratings of Exelon Corp. and each of its existing operating subsidiaries, including Exelon Generation Company, Commonwealth Edison Company, PECO Energy Company and Baltimore Gas and Electric Co. The Rating Outlook for Comed has been revised to Positive from Stable. The Rating Outlook for all other entities remains Stable. The ratings of EXC and Exgen reflect recent steps taken by management to solidify their credit quality and ratings in the face of a persistently low power price environment that is pressuring wholesale and retail profit margins. The positive actions include substantial reductions in both capex and the common stock dividend. Consequently, credit protection measures are expected by Fitch to remain strong during a low point in the commodity cycle and compare favorably to Fitch's target ratios and their respective peer groups. The EXC and Exgen ratings also reflect ample liquidity, and a competitive nuclear fleet that is low on the dispatch curve and stands to benefit from new and existing environmental regulations that impose additional costs on coal plants. The consolidated rating also benefits from the earnings contribution of three regulated utilities, which account for about 50% of earnings and cash flow. KEY RATING DRIVERS EXC and Exgen Dividend Reduction: EXC's dividend was reduced 40%, saving approximately $700 million annually. Fitch expects Exgen will be the primary beneficiary of the dividend reduction and to apply a significant portion of the savings to debt reduction. The new dividend takes effect in the second quarter of 2013. Reduced Capex: In November 2012, management lowered Exgen's capex budget by $2.3 billion over the five year period 2013 - 2017. The capex reduction includes approximately $1.025 billion from the deferral of planned nuclear uprates and $1.25 billion from eliminating unidentified wind and solar investments. The reductions meaningfully reduced pressure on credit quality measures. Financial Position: The combined reductions of the common stock dividend and capex have strengthened the financial positions of both EXC and Exgen. Cash flow measures are particularly strong. Fitch estimates EXC's adjusted ratio of FFO/interest to be in excess of 6.0x over the next several years and FFO/debt approximately 30%. Fitch estimates Exgen's adjusted ratio of FFO/interest to be in excess of 7.0x over the next several years and FFO/debt in excess of 40%. Liquidity: Liquidity is ample and debt maturities should be manageable. On a consolidated basis committed credit facilities aggregate $8.4 billion, including $5.7 billion at Exgen and $500 million at EXC, and extend to 2017. Moreover, Fitch expects Exgen to be free cash flow positive over the next several years. Low Commodity Price Environment: Low power prices, weak demand and aggressive competitive pricing behavior have adversely affected Exgen's wholesale and retail margins and are expected by Fitch to persist for several more years. It does appear however, that we are in the low point of the commodity cycle with limited downside risk. Moreover, the lower dividend and spending plan have positioned both EXC and Exgen to withstand further stresses. Comed Credit Metrics: Over the next several years, Fitch expects Comed to sustain the improvement in credit metrics achieved in 2012, largely due to a rate increase implemented Jan. 1, 2013 and a new regulatory paradigm in Illinois that allows for annual rate adjustments to earn a return on new investments and recover changes in the cost of service. Fitch estimates the ratio of EBITDA/interest will average about 5.0x and FFO/interest about 4.5x over the next several years. Over the same period FFO/debt is expected by Fitch to average about 18% and Debt/EBITDA about 3.9x. Regulatory Environment: Illinois implemented a formula based rate plan (FRP) in October 2011 that fundamentally changed regulation of electric delivery service in Illinois. While the FRP remains less favorable than initially expected by Fitch, it does provide for annual rate adjustments, recognizes planned capital additions and includes a true-up mechanism that combine to reduce, albeit not eliminate, rate lag. The primary negatives are a relatively low formula based return on equity (ROE) and reliance on an average, rather than year-end rate base, which reduces the revenue requirement. FRP Appeal: Following its initial FRP decision, Comed filed an appeal with the Illinois Commerce Commission (ICC) and in October 2012 the ICC reversed its position on the treatment of the Comed's pension asset. The reversal restored about $135 million of revenue in 2012. The ICC maintained its position on the use of an average, rather than year-end, rate base and capital. Following the rehearing order, Comed filed an appeal in state court regarding the use of an average rate base and the interest rate used to calculate the carrying cost on reconciliation adjusted balances. Recent Comed Rate Case: On Dec. 19, 2012, the ICC issued an order in Comed's second FRP filing. The decision was more constructive than the previous order, but continues to rely on an average rate base and capital structure. The ICC granted Comed a $72.6 million rate increase compared to $74.2 million supported by the company. The allowed ROE was 9.71% based on the pre-established formula (3.91% Treasury yield plus 580 basis points), compared to 10.05% in the prior case. Prospectively, Comed will file an annual FRP each May with new rates effective the following January. Since Treasury rates are unlikely to fall there is limited downside on the ROE. Rising Capex: Capital expenditures are forecasted to rise to approximately $4.3 billion over the three-year period 2013-2015, compared to $3.3 billion in the prior three-year period. The higher outlays are primarily driven by the Illinois Energy Infrastructure Modernization Act (EIMA), which requires Comed to invest an incremental $1.3 billion on electric system upgrades over five years and an additional $1.3 billion for smart grid deployment over 10 years. The legislation provides for recovery through the FRP filings. Commodity Price Exposure: Ratings benefit from the absence of commodity price exposure and the associated cash flow volatility. Liquidity: A $1 billion unsecured credit facility provides ample liquidity. Annual debt maturities will require on-going capital market access. Like-Kind-Exchange: Comed's exposure to the IRS's disallowance of the tax benefits associated with a like-kind-exchange is a credit concern, however the issue is not likely to be resolved for several years and was not factored into the rating decision. As of Jan. 28, 2013, EXC's potential tax and after-tax interest that could become payable, excluding penalties, is $860 million, of which $260 million would be paid by Comed. PECO Financial Position: Historical and projected credit measures are well in excess of Fitch's target ratios for the current rating category and the companies' peer group of 'BBB+' distribution utilities. In 2013, Fitch estimates EBITDA/interest of approximately 7.0x, FFO/interest 5.0x and FFO/Debt about 20%. Regulatory Environment: In February 2012, HB 1294 was signed into law. The legislation is intended to encourage utilities to invest in infrastructure by providing cost recovery through an automatic adjustment mechanism. Under the law, utilities will file a long- term infrastructure improvement plan starting in 2013 and the Pennsylvania Public Utility Commission (PUC) will establish a distribution system investment charge (DSIC) to recover the invested capital. The DSIC will be updated quarterly. The new legislation also allows rate filings to include fully forecasted test years, significantly reducing regulatory lag. Commodity Price Exposure: Ratings benefit from the absence of commodity price exposure and the associated cash flow volatility. BG&E Financial Position: The BG&E rating reflects historical and projected credit measures that are consistent with the rating category. In 2013, Fitch estimates EBITDA/interest of approximately 5.5x, FFO/interest 4.5x and FFO/Debt about 20%. Regulatory Recovery Mechanisms: Rate adjustment mechanisms outside of base rate cases tend to stabilize BG&E's on-going cash flow. These include decoupling for both residential and certain commercial gas and electricity deliveries and purchased gas and purchased power recovery mechanisms. Regulatory Environment: The regulatory environment in Maryland remains challenging largely due to regulatory lag and the authorization of equity returns that are among the lowest in the industry. The MPSC has been resistant to adopting forward looking test years or other approaches to shorten regulatory lag. Rate Filing: On July 27, 2012, BG&E filed a request with the MPSC for electric and gas distribution rate increases. Including updates during the rate proceedings the electric and gas rate requests were $130.1 million and $45.6 million, respectively. The increases are premised on a 10.5% return on equity (ROE). A decision is required in February 2013. RATING SENSITIVITIES What Could Trigger A Negative Rating Action: -- Lack of rate support for utility infrastructure investments or changes in the commodity cost recovery provisions in Illinois, Pennsylvania or Baltimore. -- More aggressive growth strategy that increased business risk and/or leverage. -- Sustained nuclear outage. -- Increase in risk appetite as evidenced by change in hedging strategy at Exgen. What Could Trigger A Positive Rating Action: --Other than an unexpected change in business strategy (i.e. additional sources of regulated earnings and cash flow), positive rating action at parent is unlikely at the present rating level. --For Comed, a constructive decision in Comed's next FRP proceeding that supports infrastructure investments and strengthens cash flow could lead to a one-notch upgrade. Fitch has affirmed these ratings with a Stable Outlook: Exelon Corp. -- Issuer Default Rating (IDR) at 'BBB+'; -- Senior unsecured debt at 'BBB+'; -- Junior Subordinated Notes at 'BBB-' -- Commercial paper at 'F2'; -- Short-term IDR at 'F2'. Exelon Generation Co., LLC -- Issuer Default Rating (IDR) at 'BBB+'; -- Senior unsecured debt at 'BBB+'; -- Commercial paper at 'F2'; -- Short-term IDR at 'F2'. PECO Energy Co. -- Issuer Default Rating (IDR) at 'BBB+'; -- First mortgage bonds at 'A'; -- Senior unsecured debt at 'A-'; -- Preferred stock at 'BBB'; -- Commercial paper at 'F2'; -- Short-term IDR at 'F2'. PECO Energy Capital Trust III -- Preferred stock at 'BBB'. PECO Energy Capital Trust IV -- Preferred stock at 'BBB'. Baltimore Gas and Electric Company -- Issuer Default Rating (IDR) at 'BBB; -- First mortgage bonds at 'A-'; -- Senior unsecured debt at 'BBB+'; -- Pollution Control Bonds at 'BBB+' -- Preferred stock to at 'BBB-'; -- Short-term IDR at 'F2'; -- Commercial paper at 'F2'. Fitch has affirmed these ratings with a Positive Outlook: Commonwealth Edison Company -- Issuer Default Rating (IDR) at 'BBB-; -- First mortgage bonds at 'BBB+'; -- Senior unsecured debt at 'BBB'; -- Preferred stock at 'BB+'; -- Short-term IDR at 'F3'; -- Commercial paper at 'F3'. ComEd Financing Trust III -- Preferred stock at 'BB+'. COMMUNITY HEALTHCARE OF DOUGLAS: Case Summary & Creditors' List --------------------------------------------------------------- Debtor: Community Healthcare of Douglas, Inc. dba Southeast Arizona Medical Center 2174 W. Oak Avenue Douglas, AZ 85607 Bankruptcy Case No.: 13-01738 Chapter 11 Petition Date: February 8, 2013 Court: U.S. Bankruptcy Court District of Arizona (Tucson) Judge: Brenda Moody Whinery Debtor's Counsel: Michael W. Carmel, Esq. MICHAEL W. CARMEL, LTD. 80 E. Columbus Avenue Phoenix, AZ 85012-4965 Tel: (602) 264-4965 Fax: (602) 277-0144 E-mail: michael@mcarmellaw.com Scheduled Assets: $8,904,666 Scheduled Liabilities: $3,446,633 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/azb13-01738.pdf The petition was signed by Ann L. Benson, chief executive officer. CONTINENTAL AIRLINES: Dreamliner Woes No Impact on Moody's Rating ----------------------------------------------------------------- Moody's Investors Service says that the ongoing grounding of the Boeing B787-8 Dreamliner does not affect the ratings it has assigned to Continental Airlines, Inc.'s (B2 stable) Series 2012- 1, Series 2012-2 or Series 2012-3 Enhanced Equipment Trust Certificates. The respective A and B tranche ratings of the Series 2012-1 and Series 2012-2 EETCs remain Baa2 and Ba2, respectively. The rating on the C-tranche that Continental subsequently issued with its Series 2012-3C EETC remains B1. Moody's does not see the Dreamliner's current plight exerting pressure on the EETC ratings in the near term because of the cross-default and cross- collateralization features of these EETCs and the importance to Continental of the other aircraft that serve as collateral for these financings. Continental Airlines, Inc. is an airline operating company subsidiary of United Continental Holdings, Inc., which is also the parent of United Air Lines, Inc. Combined with their regional airline partners, these airlines operate an average of 5,472 flights a day to 381 airports on six continents from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York/Newark Liberty, San Francisco, Tokyo, and Washington D.C. CRAWFORDSVILLE LLC: Committee Retains SugarFGH as Counsel --------------------------------------------------------- The Official Committee of Unsecured Creditors of Crawfordsville, LLC, asks the U.S. Bankruptcy Court for permission to retain Sugar Felsenthal Grais & Hammer LLP as counsel. The firm will provide various services, including: a. advising the Official Committee on all legal issues as they arise; b. representing and advising the Official Committee regarding the terms of any sales of assets or plans of reorganization or liquidation, and assisting the Official Committee in negotiations with the Debtor, its secured creditors, the IC Committee and other parties-in-interest; and c. investigating the Debtor's assets and pre-bankruptcy conduct, and investigating the validity, priority and extent of any liens asserted against the Debtor's assets. The discounted billing rates for SugarFGH attorneys for the 2012 calendar year range from $265.50 per hour for associates to $589.50 per hour for senior partners. The discounted billing rates for SugarFGH paraprofessionals for the 2012 calendar year range from $112.50 to $198 per hour. The standard hourly rates for the 2012 calendar year of the SugarFGH professionals presently expected to have primary responsibility for providing services to the Committee, as discounted by 10%, are: Professional Hourly Rate ------------ ----------- Aaron L. Hammer (Senior Partner) $589.50 Etahn M. Cohen (Partner) $495 Mark S. Melickian (Counsel) $472.50 Michael A. Brandess (Associate) $315 Jack R. O'Connor (Associate) $265.50 The firm attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Crawfordsville Crawfordsville, LLC, and three affiliates sought Chapter 11 protection (Bankr. S.D. Iowa Lead Case No. 12-03748) in Council Bluffs, Iowa, on Dec. 7, 2012. Crawfordsville filed schedules disclosing $5.17 million in assets and $32.2 million in liabilities, including $19.6 million owed to secured creditors. The Debtor owns parcels of land in Montgomery County, Indiana. A debtor-affiliate, Brayton LLC, disclosed assets of $14.2 million and liabilities of $27.8 million in its schedules. The Debtor owns the 20-acre of land and buildings known as Goldfinch Place in Audobon County, Iowa, which is valued at $1.68 million. The schedules say the company has $10.5 million in claims for disgorgement and damages resulting from fraudulent conveyances and preferential payments to dissociated partners. Crawfordsville, et al., are subsidiaries of hog raiser Natural Pork Production II, LLP, which filed for Chapter 11 bankruptcy (Bankr. S.D. Iowa Case No. 12-02872) on Sept. 11, 2012, in Des Moines. DOLLAR GENERAL: Moody's Eyes Possible Ratings Upgrade ----------------------------------------------------- Moody's Investors Service placed Dollar General Corporation's long term ratings on review for upgrade. The Speculative Grade Liquidity rating of SGL-1 remains unchanged. The following ratings are placed on review for upgrade: (LGD assessments are subject to change.) Corporate Family Rating at Ba1 Probability of Default Rating at Ba1-PD Senior secured term loan first out tranche at Ba1 (LGD 3, 43%) Senior secured term loan first loss tranche at Ba2 (LGD 4, 68%) Senior unsecured notes at Ba2 (LGD 5, 86%) Senior unsecured shelf at (P) Ba2 Ratings Rationale The review for upgrade acknowledges the addition of two independent board members resulting in the board of directors no longer being controlled by KKR as Buck Holdings, LP (who is controlled by KKR) now owns less than 20% of Dollar General. The review for upgrade also acknowledges Dollar General's clearly stated financial policy, the cornerstone of which is its announced 3.0 times lease adjusted debt to EBITDAR target and its intention to put in place an unsecured capital structure. Additionally, the action reflects Moody's expectation that Dollar General's operating performance will continue to be solid given the strong fundamentals of the dollar store sector. The review for upgrade will assess Dollar General's intentions to migrate to an investment grade capital structure with the increased financial flexibility that would be afforded by a predominantly unsecured debt profile. This assessment would include the potential refinancing of its senior secured term loan due 2014.The review for upgrade will also focus on Dollar General's new store openings, how the continued expansion into California performs, and Dollar Generals future plans for its DG Markets format. The review for upgrade will also consider Dollar General's operating performance expectations, its liquidity, and its future expectations for share repurchases. Dollar General's SGL-1 could be impacted as the 2014 term loan maturity approaches, should it not be refinanced in a timely manner. 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. Dollar General Corporation, headquartered in Goodlettsville, Tennessee, owns and operates over 10,300 extreme value general merchandise stores in 40 states. Revenues are about USD16 billion. EDUCATION HOLDINGS: Has $7 Million Loan Approved ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Education Holdings 1 Inc. received bankruptcy court approval for a $7 million loan to carry the online educator until the March 7 confirmation hearing for approval of the prepackaged reorganization plan. 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. EL FARMER: Hires Modesto Bigas as Counsel ----------------------------------------- El Farmer Inc. asks the U.S. Bankruptcy Court for the District of Puerto Rico for permission to employ Modesto Bigas Law Office as counsel. A $1,000 retainer was paid by the Debtor against which the law firm would bill on the basis of $250 per hour plus expense for work performed by Modesto Bigas Mendez, Esq.; attorney Alexandra Bigas Valendon, $200 per hour, upon application and the approval of the Court. The firm attests that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. El Farmer Inc. filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-09687) in Old San Juan, Puerto Rico on Dec. 7, 2012. The Debtor scheduled $18.3 million in assets and $12.0 million in liabilities, including $11.0 million owed to secured creditor Banco Popular De Puerto Rico. The Debtor owns farm lands in Isabela, Puerto Rico. FLAT OUT: Seeks to Auction Flat Top Grill Assets ------------------------------------------------ Rachel Feintzeig at Dow Jones' DBR Small Cap reports that flat Out Crazy LLC wants to put its Flat Top Grill chain on the auction block, but the company is still on the hunt for an official lead bidder. About Flat Out Crazy Flat Out Crazy LLC and its affiliates operate two Asian-inspired restaurant chains that began in Chicago. Flat Top Grill, which currently has 15 locations, is a full-service fast-casual create- your-own stir-fry concept. Stir Crazy Fresh Asian Grill, which has 11 locations, is a full-service casual Asian restaurant offering the flavors of Chinese, Japanese, Thai and Vietnamese food. The Debtors have 1,200 employees. Flat Out Crazy and 13 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22094) in White Plains, New York on Jan. 25, 2013. The Debtors have tapped Squire Sanders (US) LLP as counsel; Kurtzman Carson Consultants, LLC, as claims, noticing and administrative agent; Getzler Henrich as their financial advisor and William H. Henrich and Mark Samson from Getzler Henrich as their co-chief restructuring officers; and (c) J.H. Chapman Group, L.L.C, as their investment bankers. The Debtors disclosed total assets of $28.0 million and liabilities of $37.5 million as of Nov. 28, 2012. FRIENDSHIP DAIRIES: Can Employ Raymond Hunter as Dairy Consultant ----------------------------------------------------------------- The Bankruptcy Court authorized Friendship Dairies to employ Raymond Hunter, Ph.D., and Emerald Agriculture as special dairy business consultants of the Debtor. As reported in the TCR on Nov. 9, 2012, Dr. Hunter's services will include conducting an assessment of the current state of the dairy herd and business, suggesting a reporting system through which parties in interest can be assured concerning the fundamental physical and financial performance of the herd, conducting a strategic analysis of the business, and reviewing the Debtor's physical and financial projections to provide objectivity as to how the business might be expected to perform. Dr. Hunter will be authorized and instructed to share all findings, conclusions, and work product with the Debtor and the Creditor Committee. Emerald Agriculture will serve at the hourly rate of $375 for Mr. Hunter, and $125 for Dennis March, plus reimbursable expenses. About Friendship Dairies Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor estimated assets and debts of $10 million to $50 million. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C., serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. FRIENDSHIP DAIRIES: Robbins Salomon Replaces Levenfeld ------------------------------------------------------ The Official Committee of Unsecured Creditors of Friendship Dairies filed papers in December asking the U.S. Bankruptcy Court for permission to retain Robbins, Salomon & Patt, Ltd., as counsel of record in the Chapter 11 case in place of Levenfeld Pearlstein LLC. On Nov. 13, 2012, the Bankruptcy Court entered an order authorizing the retention of Levenfeld to represent the Committee. On Nov. 30, 2012, Steve Jakubowski -- who has been the lead lawyer handling the representation of the Committee in the case -- left Levenfeld and joined Robbins Salomon. The Committee desires to continue to retain the services of Mr. Jakubowski and substitute Robbins Salomon as its lead counsel in place of Levenfeld, effective as of Dec. 3, 2012. Steve Jakubowski attests that Robbins Salomon does not hold any interest adverse to the estate with respect to the matter on which it is to be employed. The Committee's new counsel can be reached at: Steve Jakubowski, Esq. ROBBINS, SALOMON & PATT, LTD. 180 North LaSalle Street, Suite 3300 Chicago, IL 60601 Telephone: (312) 456-0191 E-mail: sjakubowski@rsplaw.com About Friendship Dairies Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor estimated assets and debts of $10 million to $50 million. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Mullin, Hoard & Brown as local counsel. GAMETECH INT'L: Charles Jobson Discloses 4.7% Equity Stake ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Charles Jobson disclosed that, as of Dec. 31, 2012, he beneficially owns 556,363 shares of common stock of Gametech International, Inc., representing 4.7% of the shares outstanding. Mr. Jobson previously reported beneficial ownership of 1,061,488 common shares or a 8.94% equity stake as of Dec. 31, 2011. A copy of the amended filing is available for free at: http://is.gd/r4CTWi About GameTech International Based in Reno, Nevada, GameTech develops and manufactures gaming entertainment products and systems. GameTech holds a significant position in the North American bingo market with its interactive electronic bingo systems, portable and fixed-based gaming units, and complete hall management modules. It also holds a significant position in select North American VLT markets, primarily Montana, Louisiana, and South Dakota, where it offers video lottery terminals and related gaming equipment and software. It also offers Class III slot machines and server-based gaming systems. GameTech International, Inc. and its wholly owned subsidiaries have filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-11964) on July 2, 2012, to effect a restructuring of the company's debt obligations. GameTech disclosed total assets of $27.22 million and total liabilities of $22.88 million as of Jan. 29, 2012. GameTech's $16 million secured credit matured on June 30. Three days earlier, the loan was purchased by YIGT. Before bankruptcy, GameTech rejected an offer from YIGT to combine the two companies. GameTech said in a court filing that it was hoping for a more favorable transaction. GameTech said that YIGT purchased the loan at discount from lenders US Bank NA and Bank of the West. Judge Peter J. Walsh presides over the case. The Debtors are represented by Greenberg Traurig, LLP. Kinetic Advisors, LLC, serves as the Debtors' financial advisor. As reported by the TCR on Dec. 19, 2012, GameTech obtained approval of its Chapter 11 plan on December 13. According to the report, unsecured creditors with claims estimated to range between $1.5 million and $1.7 million were told in the disclosure statement to expect a recovery between 36% and 70%. Unsecured creditors were the only class to vote on the plan. GEOKINETICS INC: Voting Deadline for Prepackaged Plan on March 8 ---------------------------------------------------------------- Geokinetics Inc. was commencing a solicitation of votes for its pre-packaged Chapter 11 plan of reorganization from holders of the Company's 9.75% senior secured notes due 2014, Series B-1 Senior Convertible Preferred Stock, par value $10.00 per share, and Series C-1 Senior Preferred Stock, par value $10.00 per share. Votes on the prepackaged plan of reorganization must be received by the voting agent by 12:00 p.m. (prevailing Eastern Time) on March 8, 2013, unless this deadline is extended. Copies of the Company's plan of reorganization and solicitation and disclosure statement may be accessed at http://www.GOKRestructuring.com. Parties seeking additional information about the balloting process may contact GCG, the voting agent for the solicitation, at (800) 761-8709. Consistent with the previously announced restructuring support agreement, holders of more than 70% in aggregate principal amount of its Senior Secured Notes and holders of more than two-thirds of the Senior Preferred Stock have agreed to vote in favor of the chapter 11 plan. If, at the end of the solicitation period, the requisite number and amount of holders of Senior Secured Notes and Senior Preferred Stock vote in favor of the plan as required by the Bankruptcy Code, the Company intends to seek to implement its recapitalization plan through an expedited chapter 11 bankruptcy process. At the conclusion of the Chapter 11 bankruptcy process, the holders of the Senior Secured Notes would become the stockholders of the reorganized Company, with the interests of current stockholders being cancelled. The plan of reorganization envisions that unsecured creditors of the Company will be paid in full either in the ordinary course of business or at the conclusion of the chapter 11 cases. Importantly, the proposed balance sheet reorganization is not expected to have an impact on the Company's operations. As part of the restructuring process, the Company expects to enter into a new credit facility to provide liquidity for operations after the restructuring. During the restructuring process, subject to conditions in the restructuring support agreement, the Company will seek authority from the bankruptcy court to obtain up to $25 million of debtor in possession financing provided by certain holders of the Senior Secured Notes and fully backstopped by two of the largest holders of Senior Secured Notes. This debtor in possession financing will fund certain of the Company's operations during the chapter 11 process and will be converted into common stock of the reorganized Company on the effective date of the Chapter 11 plan. The Company's emergence from Chapter 11 will be subject to, among other things, bankruptcy court approval of the solicitation and disclosure statement, exit financing and confirmation of the plan of reorganization. RSA Amendment On Feb. 4, 2013, Geokinetics, Geokinetics Holdings USA, Inc., a wholly owned subsidiary of the Company, and the Company's other direct and indirect domestic subsidiaries entered into Amendment One to the Restructuring Support Agreement, dated Jan. 15, 2013, with American Securities Opportunities Advisors, LLC, Gates Capital Management, Inc., and other parties thereto, as beneficial owners of, or advisors, nominees or investment managers for beneficial owners of, more than 70% in aggregate principal amount of Holdings' 9.75% Senior Secured Notes due 2014, and Avista Capital Partners, L.P. and Avista Capital Partners (Offshore), L.P., the largest holders of the Company's outstanding Series B-1 Senior Convertible Preferred Stock, Series C-1 Senior Preferred Stock and Series D Junior Preferred Stock. The Amendment, among other things, (i) extends the date by which the Company must commence the solicitation of votes to accept or reject the Joint Chapter 11 Plan of Reorganization of the Company and the Subsidiaries from Jan. 31, 2013, to Feb. 8, 2013, before the Noteholders may terminate the Agreement, (ii) provides that the Noteholders may terminate the Agreement if (a) the Company has not filed petitions commencing the Chapter 11 case as soon as practicable after, and in no event before, the close of the Solicitation and (b) American Securities and Gates have not executed an agreement authorizing and approving a form of shareholders' agreement prior to the filing of petitions commencing the Chapter 11 case, and (iii) extends the deadline by which American Securities and Gates must execute an agreement authorizing and approving a form of shareholders' agreement from Feb. 15, 2013, to March 15, 2013, before triggering the right of the Preferred Stockholders to terminate the Agreement as to those Preferred Stockholders only. A copy of the amendment is available at http://is.gd/j9AYfu About Geokinetics Inc. Headquartered in Houston, Texas, Geokinetics Inc., a Delaware corporation founded in 1980, provides seismic data acquisition, processing and integrated reservoir geosciences services, and land, transition zone and shallow water OBC environment geophysical services. These geophysical services include acquisition of 2D, 3D, time-lapse 4D and multi-component seismic data surveys, data processing and integrated reservoir geosciences services for customers in the oil and natural gas industry, which include national oil companies, major international oil companies and independent oil and gas exploration and production companies worldwide. The Company's balance sheet at Sept. 30, 2012, showed $415.71 million in total assets, $590.79 million in total liabilities, $90.72 million in mezzanine equity, and a $265.80 million total stockholders' deficit. * * * In the Oct. 5, 2011, edition of the TCR, Moody's Investors Service downgraded Geokinetics Holdings, Inc.'s (Geokinetics) Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to Caa2 from B3. "The downgrade to Caa2 is driven by Geokinetics' lower than expected margins in its international markets, constrained liquidity and weak leverage metrics," commented Andrew Brooks, Moody's Vice-President. "The negative outlook highlights the company's continuing tight liquidity and weak financial metrics even in an improved oil and gas operating environment." As reported by the TCR on Oct. 3, 2011, Standard & Poor's Ratings Services lowered its corporate credit and senior secured ratings on Geokinetics Holdings Inc. (Geokinetics) to 'CCC+' from 'B-'. The rating action reflects uncertainty surrounding the costs, damage to reputation, and effect on operations following a liftboat accident in the Southern Gulf of Mexico that led to four fatalities, including two Geokinetics employees and two subcontractors. GEOMET INC: Robeco No Longer Owned Shares as of Dec. 31 ------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Robeco Investment Management, Inc., disclosed that, as of Dec. 31, 2012, it does not beneficially own any shares of common stock of GeoMet, Inc. A copy of the filing is available for free at http://is.gd/u1lHsR About Geomet Inc. Houston, Texas-based GeoMet, Inc., is an independent energy company primarily engaged in the exploration for and development and production of natural gas from coal seams (coalbed methane) and non-conventional shallow gas. Its principal operations and producing properties are located in the Cahaba and Black Warrior Basins in Alabama and the central Appalachian Basin in Virginia and West Virginia. It also owns additional coalbed methane and oil and gas development rights, principally in Alabama, Virginia, West Virginia, and British Columbia. As of March 31, 2012, it owns a total of 192,000 net acres of coalbed methane and oil and gas development rights. "As of May 11, 2012, we had $148.6 million outstanding under our Fifth Amended and Restated Credit Agreement," the Company said in its quarterly report for the period ending March 31, 2012. "As of March 31, 2012, we were in compliance with all of the covenants in our Credit Agreement. The Credit Agreement provides, however, that if the amount outstanding at any time exceeds the 'borrowing base', we must provide additional collateral to the lenders or repay the excess as provided in the Credit Agreement. The borrowing base is set in the sole discretion of our lenders in June and December of each year based, in part, on the value of our estimated reserves as determined by the lenders using natural gas prices forecasted by the lenders." "Due to the decline in the bank group's price projections, we expect our outstanding loan balance at the June determination date will exceed the new borrowing base, resulting in a borrowing base deficiency. We do not have additional collateral to provide to the lenders and we expect that our operating cash flows would be insufficient to repay the expected borrowing base deficiency, as required under the Credit Agreement. As such, unless we amend the Credit Agreement, we may be in default under the agreement when the borrowing base is determined in June 2012. In addition, the elimination of the unused availability under the borrowing base, which is a factor in our working capital covenant, may result in a future default of that covenant under the Credit Agreement." The Company said it has begun discussions with its bank group. According to the Company, "Until the borrowing base for June 2012 has been determined, we will not know the amount of the deficiency. As of March 31, 2012, the debt is classified as long- term as we are not in violation of any debt covenants. Should we be in violation of any covenants which have not been waived or have a borrowing base deficiency as of June 30, 2012, some or all of the debt will be reclassified to current. There are no assurances that we will be able to amend our Credit Agreement or obtain a waiver. If we do obtain a waiver or an amendment, there can be no assurance as to the cost or terms of such an amendment." "These conditions raise substantial doubt about our ability to continue as a going concern for the next twelve months." The Company's balance sheet at Sept. 30, 2012, showed $108.08 million in total assets, $171.67 million in total liabilities, $33.28 million in mezzanine equity, and a $96.86 million total stockholders' deficit. GLYECO INC: Amends Asset Purchase Pact with Renew Resources ----------------------------------------------------------- As reported by GlyEco, Inc., on a current report on Form 8-K filed by the Company with the Securities and Exchange Commission on Oct. 9, 2012, and subsequently amended on Nov. 2, 2012, GlyEco Acquisition Corp. #5, an Arizona corporation and wholly-owned subsidiary of the Company, acquired the business and all of the glycol-related assets of Renew Resources, LLC, effective Oct. 29, 2012, pursuant to the Asset Purchase Agreement, dated Oct. 3, 2012, as amended, by and among Acquisition Sub, Renew Resources, and Todd M. Bernard, the selling principal of Renew Resources On Jan. 31, 2013, the Parties entered into an Amendment No. 2 to Asset Purchase Agreement, pursuant to which the Parties effectuated the final allocation of the purchase price for the transaction. The Parties agreed to an aggregate purchase price of $150,000 consisting of (i) $15,000 in cash, (ii) $35,000 in liabilities paid, and (iii) 200,000 shares of the Company's Common Stock with a fair value of $0.50 per share (based upon the volume of shares sold at this price for the same type of unregistered and restricted security). A copy of the Amended Asset Purchase Agreement is available at: http://is.gd/8Mdusj About GlyEco, Inc. Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company formed to roll-out its proprietary and patent pending glycol recycling technology that transforms waste glycols, a hazardous material, into profitable green products. Jorgensen & Co., in Lehi, Utah, expressed substantial doubt about GlyEco's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has not yet achieved profitable operations and is dependent on the Company's ability to raise capital from stockholders or other sources and other factors to sustain operations. The Company's balance sheet at Sept. 30, 2012, showed $1.55 million in total assets, $2.24 million in total liabilities and a $685,243 total stockholders' deficit. GOLD PROPERTIES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Gold Properties, Inc. P.O. Box 2708 Winter Haven, FL 33883 Bankruptcy Case No.: 13-01607 Chapter 11 Petition Date: February 8, 2013 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Tanya M. Comparetto, Esq. Tanya M Comparetto, P.A. 1937 East Edgewood Drive Lakeland, FL 33803 Tel: (863) 686-6883 Fax: (863) 616-9143 E-mail: Tanya@tmclaw.net Scheduled Assets: $2,576,629 Scheduled Liabilities: $1,207,549 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/flmb13-01607.pdf The petition was signed by Stephen L. Gold, president. GRAND JUNCTION: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Grand Junction, LLC 2330 Parkway Pigeon Forge, TN 37863 Bankruptcy Case No.: 13-50198 Chapter 11 Petition Date: February 8, 2013 Court: U.S. Bankruptcy Court Eastern District of Tennessee (Greeneville) Judge: Marcia Phillips Parsons Debtor's Counsel: Dean B. Farmer, Esq. HODGES, DOUGHTY & CARSON, PLLC P.O. Box 869 Knoxville, TN 37901 Tel: (865) 292-2307 Fax: (865) 292-2252 E-mail: dfarmer@hdclaw.com Scheduled Assets: $5,129,476 Scheduled Liabilities: $4,180,463 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/tneb13-50198.pdf The petition was signed by John Chapman, chief manager. GREEN EARTH: Former Mid-West Fuels President Named to Board ----------------------------------------------------------- Green Earth Technologies, Inc., announced the addition of John Thomas, a seasoned executive with more than 30 years' experience and former President of the Mid-West Fuels Value Chain to the GET Board of Directors. Mr. Thomas will serve as an independent director. Mr. Thomas has previously held senior management positions with affiliates and subsidiaries of BP plc including Senior Vice President, Global Marketing for Castrol; President, US Convenience Retail; President, West Coast Retail (Arco); Head of Retail Marketing in the United Kingdom, and European Marketing Manager in Brussels. Mr. Thomas previously served as Chairman of the API Marketing Committee and was a Board member of the Joint Coalition, an industry wide "think tank." Mr. Thomas received his Bachelor of Science and Master of Business Administration degrees from Syracuse University. "Mr. Thomas has tremendous experience in brand building and the launch of new lubricant products and his expertise will be of great benefit to the company," said David Buicko, Chairman of Green Earth Technologies. "GET is still a relatively young company; however it has already developed an exciting line of market leading products. The company has created a culture of innovation and has a pipeline of new opportunities going forward," said Thomas. "I am pleased to join the GET Board of Directors and hope that my business, marketing and brand experience will contribute to the successful launch and marketing of many new innovative products in the future." About Green Earth Technologies White Plains, N.Y.-based Green Earth Technologies, Inc. (OTC QB: GETG) -- http://www.getg.com/-- markets, sells and distributes bio-degradable performance and cleaning products. The Company's product line crosses multiple industries including the automotive aftermarket, marine and outdoor power equipment markets. Green Earth reported a net loss of $11.26 million for the year ended June 30, 2012, compared with a net loss of $12.21 million during the prior fiscal year. Friedman LLP, in East Hanover, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended June 30, 2012. The independent auditors noted that the Company's losses, negative cash flows from operations, working capital deficit and its ability to pay its outstanding liabilities through fiscal 2013 raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $3.78 million in total assets, $12.63 million in total liabilities and a $8.85 million total stockholders' deficit. GREEN ENERGY: Chiropractic Associates Director Named to Board ------------------------------------------------------------- The Board of Directors of Green Energy Management Services Holdings, Inc., elected Dr. Robert Thomson as a director of the Company, effective Jan. 31, 2013, to replace the vacancy created by the resignation of Mr. William D'Angelo. Dr. Thomson is expected to be named to the Audit Committee and the Compensation Committee. The Board has determined that Dr. Thomson is an independent director within the meaning of applicable listing rules of The New York Stock Exchange, as amended from time to time, and the rules promulgated by the SEC. Dr. Thomson, 53, serves as the clinical director of Chiropractic Associates of Mandeville, LA, a position he has held since July 2002. As a former President of the Louisiana Chiropractic Association of Louisiana, he is actively involved in regulation and procedures of care givers in his association. Dr. Thomson has also been actively involved in the "waste to energy" industry for the past 20 years. Dr. Thomson was an original founding member and served on the Board of Director of Tempico, Inc., a medical waste processing company, where he was instrumental in assisting with the creation of a process that converted components of the municipal waste stream to reusable pulp. Dr. Thomson also served on the Board of Directors of Tempico Medical Waste Processing, Inc., where a similar process was used that ultimately rendered the medical waste stream harmless. Dr. Thomson served as a member of the Board of Directors of both companies for nearly 15 years and has other broad experience in clean energy alternatives. Dr. Thomson currently consults in the field medical waste processing on an as needed basis. Dr. Thomson is a graduate from Louisiana State University (pre-med), Canada College (pre-med) and Western States Chiropractic College. Dr. Thomson served in the U.S. Coast Guard and the U.S. Coast Guard Reserve. The Company has not entered into any material plan, contract or arrangement to which Dr. Thomson is a party or in which Dr. Thomson participates, nor has any grant or award of the Company's common stock has been made to Dr. Thomson, in connection with his election. The Company may grant equity or cash awards to Dr. Thomson in the future in consideration for his services as a director. Meanwhile, on Dec. 31, 2012, the Company sold to Water Tech World Wide, LLC, (i) an 8% secured promissory note, (ii) a warrant and (iii) a second warrant, for gross proceeds of $310,000. Dr. Thomson is the sole managing member of the Lender and has the sole voting and dispositive power over the shares of the Company's common stock underlying the Warrants owned by the Lender. The Note matures on the earlier of (i) Feb. 28, 2013, and (ii) the date when the Company consummates a debt or equity financing resulting in gross proceeds to the Company of at least $310,000 and maybe prepaid in whole or in part at any time without premium or penalty. In the event the Company does not repay the Lender any outstanding principal and any accrued but unpaid interest under the Note on or before the Initial Maturity Date, the Initial Maturity Date will be extended until the date when the Company consummates that Financing and repays the unpaid principal amount and interest due hereunder. The Company further agreed to make mandatory payments to the Lender as funds are paid to and received by the Company under that certain Sales and User Agreement, dated as of Nov. 2, 2010, entered into by and between The Riverbay Fund, Inc., and Green Energy Management Services, Inc., the Company's wholly-owned subsidiary. The Note is secured by all of the Company's rights, title and interests in any Riverbay Payments and any other accounts receivable due to the Company from Riverbay under the Riverbay Agreement. The Note contains customary events of default upon the occurrence of which, subject to any cure period, the full principal amount of the Note, together with any other amounts owing in respect thereof, to the date of that event of default, will become immediately due and payable without any action on the part of the Lender. The Company plans to use the net proceeds of the sale of these securities as general working capital. The First Warrant entitles the Lender to purchase 19,035,638 shares of the Company's common stock, $0.001 par value per share, at an exercise price of $0.001 per share. The Second Warrant entitles the Lender to purchase to purchase 2,337,707 shares of Common Stock at an exercise price of $0.01 per share. The Warrants will be exercisable from issuance until 3 years after the Effective Date. The number of shares of Common Stock issuable upon exercise of the Warrants is subject to adjustment in the event of any change in the Common Stock, including changes by reason of stock dividends, stock splits, reclassifications, mergers, consolidations or other changes in the capitalization of Common Stock. A copy of the Form 8-K is available for free at: http://is.gd/1oafYN About Green Energy Baton Rouge, Louisiana-based Green Energy Management Services Holdings, Inc., is a full service energy management company. GEM provides its clients all forms of energy efficiency solutions mainly based in two functional areas: energy efficient lighting upgrades and efficient water utilization. GEM is currently primarily involved in the distribution of energy efficient light emitting diode ("LED") units (the "Units") to end users who utilize substantial quantities of electricity. GEM is also currently involved in the initial stages of customer installation of its Water Management System. GEM structures its contracts with no upfront or maintenance costs to its customers and shares in the achieved energy, water utilization and maintenance savings. In its audit report for the 2011 results, MaloneBailey, LLP, in Houston, Texas, expressed substantial doubt about Green Energy Management Services Holdings' ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations. The Company reported a net loss of $19.25 million on $116,550 of revenue for 2011, compared with a net loss of $1.91 million on $291,311 of revenue for 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.34 million in total assets, $4.83 million in total liabilities, all current, and a $3.49 million total stockholders' deficit. Bankruptcy Warning "As of September 30, 2012, we had cash of $13,996 and contract receivables of $32,193. With the funds that we currently have on hand and the potential third party financing to monetize the revenues projected from our agreement with Co-op City, pursuant to which we have received approximately $21,000 per month to date, we believe that we will be able to sustain our current level of operations for approximately the next 12 months. "Risk Factors for the matters for which a negative outcome could result in payments by us of substantial monetary damages, or changes to our products or our business, which may have a material and adverse impact on our business, financial condition or results of operations or force us to file for bankruptcy and/or cease our operations." GSC GROUP: Kaye Scholer Can't Keep Fees: Says U.S. Trustee ---------------------------------------------------------- Linda Chiem of BankruptcyLaw360 reported that the trustee for investment management firm GSC Group Inc. fired back Thursday at Kaye Scholer LLP in a battle over fees it earned from GSC's Chapter 11 bankruptcy in New York, saying Kaye Scholer's admitted mistakes were serious enough to force it to pay back the fees. U.S. Trustee Tracy Hope Davis asked the New York bankruptcy court to reject Kaye Scholer's contentions that there was no evidence that it set out to deceive or failed to correct erroneous disclosures when its partners did not properly disclose that Robert Manzo was an independent contractor instead of an executive director of Capstone Advisory Group LLC. About GSC Group Florham Park, New Jersey-based GSC Group, Inc. -- http://www.gsc.com/-- was a private equity firm that specialized in mezzanine and fund of fund investments. Originally named Greenwich Street Capital Partners Inc. when it was a subsidiary of Travelers Group Inc., GSC became independent in 1998 and at one time had $28 billion of assets under management. Market reverses, termination of some funds, and withdrawal of customers' investments reduced funds under management at the time of bankruptcy to $8.4 billion. GSC Group, Inc., filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 10-14653) on Aug. 31, 2010. Michael B. Solow, Esq., at Kaye Scholer LLP, served as the Debtor's bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's notice and claims agent. Capstone Advisory Group LLC served as the Debtor's financial advisor. The Debtor estimated its assets at $1 million to $10 million and debts at $100 million to $500 million as of the Chapter 11 filing. Since Jan. 7, 2011, the Debtors have been operated by James L. Garrity Jr., as Chapter 11 trustee for the Debtors. The Chapter 11 trustee tapped Shearman & Sterling LLP as his counsel, and Togut, Segal & Segal LLP as his conflicts counsel. No committee of unsecured creditors has been appointed in the case. The Chapter 11 trustee completed the sale of business in July 2011 and filed a liquidating Chapter 11 plan and explanatory disclosure statement in late August. The bankruptcy court authorized the trustee to sell the business to Black Diamond Capital Finance LLC, as agent for the secured lenders. Proceeds were used to pay secured claims. The price paid by the lenders' agent was designed for full payment on $256.8 million in secured claims, with $18.6 million cash left over. Black Diamond bought most assets with a $224 million credit bid, a $6.7 million note, $5 million cash, and debt assumption. A minority group of secured lenders filed an appeal from the order allowing the sale. Through a suit in state court, the minority lenders failed to halt Black Diamond from completing the sale. The Chapter 11 Trustee and Black Diamond have filed rival repayment plans for GSC Group. The Chapter 11 trustee reached a handshake deal on Dec. 13, 2011, ending the dispute with Black Diamond that delayed a $235 million asset sale. Adam Goldberg, Esq., and Douglas Bacon, Esq., at Latham & Watkins, represent Black Diamond Capital Management, LLC, as counsel. Patrick J. Nash, Jr., Esq., and Paul Wierbicki, Esq. of Kirkland & Ellis LLP serve as counsel to Black Diamond Capital Management, LLC. HAMPTON ROADS: Davidson Kempner No Longer Had Shares as of Dec. 31 ------------------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Davidson Kempner Partners and its affiliates disclosed that, as of Dec. 31, 2012, they do not beneficially own any shares of common stock of Hampton Roads Bankshares, Inc. A copy of the filing is available at http://is.gd/7ZOP8l About Hampton Roads Bankshares Hampton Roads Bankshares, Inc. (NASDAQ: HMPR) -- http://www.hamptonroadsbanksharesinc.com/-- is a bank holding company that was formed in 2001 and is headquartered in Norfolk, Virginia. The Company's primary subsidiaries are Bank of Hampton Roads, which opened for business in 1987, and Shore Bank, which opened in 1961. Currently, Bank of Hampton Roads operates twenty- eight banking offices in the Hampton Roads region of southeastern Virginia and twenty-four offices in Virginia and North Carolina doing business as Gateway Bank & Trust Co. Shore Bank serves the Eastern Shore of Maryland and Virginia through eight banking offices and 15 ATMs. Effective June 17, 2010, the Company and its banking subsidiary, Bank of Hampton Roads ("BOHR"), entered into a written agreement with the Federal Reserve Bank of Richmond and the Bureau of Financial Institutions of the Virginia State Corporation Commission. The Company's other banking subsidiary, Shore Bank, is not a party to the Written Agreement. Under the terms of the Written Agreement, among other things, BOHR agreed to develop and submit for approval plans to (a) strengthen board oversight of management and BOHR's operations, (b) strengthen credit risk management policies, (c) improve BOHR's position with respect to loans, relationships, or other assets in excess of $2.5 million which are now, or may in the future become, past due more than 90 days, are on BOHR's problem loan list, or adversely classified in any report of examination of BOHR, (d) review and revise, as appropriate, current policy and maintain sound processes for determining, documenting, and recording an adequate allowance for loan and lease losses, (e) improve management of BOHR's liquidity position and funds management policies, (f) provide contingency planning that accounts for adverse scenarios and identifies and quantifies available sources of liquidity for each scenario, (g) reduce the Bank's reliance on brokered deposits, and (h) improve BOHR's earnings and overall condition. The Company reported a net loss of $98 million in 2011, compared with a net loss of $210.35 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.07 billion in total assets, $1.88 billion in total liabilities and $187.96 million in total shareholders' equity. HIGH LINER: Credit Facility Changes No Impact on Moody's 'B1' CFR ----------------------------------------------------------------- Moody's Investors Service reports that High Liner Foods' (TSX: HLF) recently completed amendments to its Term Loan B (rated B2) and ABL (unrated) credit facilities are a credit positive. However, the amendments to its credit facilities does not affect High Liner's B1 Corporate Family Rating, B2 rating on its Term Loan B, or stable rating outlook. The principal methodology used in rating High Liner Foods, Inc. was the Global Packaged Goods Industry Methodology published in December 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. High Liner Foods, Inc. (TSX: HLF), headquartered in Lunenburg, Nova Scotia, is a North American processor and marketer of prepared, value-added frozen seafood serving the retail and food service markets. The company's brands include High Liner, Mirabel, Fisher Boy, Sea Cuisine, Viking, FPI, Icelandic Seafood, Samband, and Royal Sea. Additionally, the company produces private label processed seafood. In December 2011, High Liner acquired the US subsidiary (Icelandic USA) and Asian procurement operations of Icelandic Group h.f., for approximately USD233 million. High Liner's revenues for the twelve months ending September 29, 2012 were approximately USD895 million (C$902 million). HORIZON LINES: Acquires Three Vessels for $91.8 Million ------------------------------------------------------- Horizon Lines, Inc., through its newly formed subsidiary Horizon Lines Alaska Vessels, LLC, acquired off charter three Jones Act qualified, D-7 vessels for a purchase price of approximately $91.8 million. Financing for the acquisition of the Vessels, and associated fees and expenses, was arranged via two separate term loans totaling approximately $95.8 million at a weighted average interest rate of 9.8%, and both maturing on Sept. 30, 2016. Horizon's Alaska trade is served by this fleet of Vessels -- the Horizon Anchorage, the Horizon Kodiak, and the Horizon Tacoma. The Vessels are designed especially for the demanding Alaska weather conditions and for the specific port characteristics in Anchorage, Kodiak and Dutch Harbor. The Vessels, built in 1987, are each diesel powered, with a maximum speed of 20 knots and have 1,668 twenty-foot equivalent units of cargo capacity. $20 Million Term Loan Agreement On Jan. 31, 2013, Horizon and those of its subsidiaries that are parties to the 11.00% First Lien Senior Secured Notes due 2016, the 13.00%-15.00% Second Lien Senior Secured Notes due 2016, and the 6.00% Series A Convertible Senior Secured Notes due 2017 entered into a $20 million term loan agreement with certain lenders and U.S. Bank National Association, as administrative agent, collateral agent, and ship mortgage trustee. The loan under the $20 million Agreement matures on Sept. 30, 2016, and accrues interest at 8.00% per annum, payable quarterly commencing March 31, 2013, with interest calculated assuming accrual beginning Jan. 8, 2013. The $20 million Agreement is secured by substantially all of the assets of the Loan Parties that secure the Notes, on a priority basis relative to the Notes. The $20 million Agreement does not provide for any amortization, and the full outstanding amount of the loan is payable on Sept. 30, 2016. The covenants in the $20 million Agreement are substantially similar to the negative covenants contained in the indentures governing the Notes, which indentures permit the incurrence of the term loan borrowed under the $20 million Agreement and the contribution of such amounts to Horizon Alaska. The proceeds of the loan borrowed under $20 million Agreement were contributed to Horizon Alaska to enable it to acquire the Vessels. Horizon Alaska is an "unrestricted subsidiary" under the Indentures. $75 Million Term Loan Agreement On Jan. 31, 2013, Horizon Alaska, together with newly formed subsidiaries Horizon Lines Alaska Terminals, LLC, and Horizon Lines Merchant Vessels, LLC, entered into an approximately $75.8 million term loan agreement with certain lenders and U.S. Bank National Association, as the administrative agent, collateral agent and ship mortgage trustee. The obligations are secured by substantially all of the assets of Horizon Alaska, Horizon Vessels, and Alaska Terminals, including the Vessels. The loan under the $75 million Agreement accrues interest at 10.25% per annum, payable quarterly commencing March 31, 2013. Amortization of loan principal is payable in equal quarterly installments, commencing on March 31, 2014, and each amortization installment will equal 2.5% of the total initial loan amount. The full remaining outstanding amount of the loan under the $75 million Agreement is payable on Sept. 30, 2016. The proceeds of the loan under the $75 million Agreement were utilized by Horizon Alaska to acquire the Vessels. The $75 million Agreement contains negative covenants including limitations on the incurrence of indebtedness, liens, asset sales, investments and dividends. The agent and the lenders under the $75 million Agreement have acknowledged they have been notified that they do not, pursuant to the loan, have any recourse to the stock or assets of Horizon or any of its subsidiaries. Defaults under the $75 million Agreement do not give rise to any remedies under Horizon's ABL facility or the Indentures. In connection with the Vessel purchases and financing, on Jan. 31, 2013, Horizon also entered into a second amendment to the ABL Credit Agreement, by and among Horizon, Horizon Lines, LLC, the guarantors party thereto, the lenders party thereto and Wells Fargo Capital Finance, LLC, as administrative agent. Horizon further entered into a new Intercreditor Agreement, by and among Horizon, Horizon Lines, LLC, each of the other grantors from time to time party thereto, Wells Fargo Capital Finance, LLC, in its capacity as agent under the ABL Credit Agreement, and U.S. Bank National Association, in its capacity as administrative agent, collateral agent, and ship mortgage trustee under the $20 million Agreement, and in its capacity as trustee and collateral agent for each of the Notes. Horizon entered into the ABL Facility Amendment and the Intercreditor Agreement to allow for the $20 Million Agreement to be guaranteed by the same entities that guarantee the existing indebtedness represented by borrowings under the ABL Credit Agreement and the Notes and to be secured by liens on the collateral securing the Notes, on a relative priority basis to the Notes. Horizon, through one of its subsidiaries, is leasing the Vessels from Horizon Alaska under a bareboat charter on terms at least as favorable as would have been obtained by Horizon with a third party. The initial term of the bareboat charter expires in December 2019, with an ability to extend. The obligations under the bareboat charter are guaranteed by the Loan Parties and such guarantee, along with the bareboat charter, have been pledged as collateral by Horizon Alaska under to $75 Million Agreement. About Horizon Lines Charlotte, N.C.-based Horizon Lines, Inc. (NYSE: HRZ) is the nation's leading domestic ocean shipping and integrated logistics company. The Company owns or leases a fleet of 20 U.S.-flag containerships and operates five port terminals linking the continental United States with Alaska, Hawaii, Guam, Micronesia and Puerto Rico. The Company provides express trans-Pacific service between the U.S. West Coast and the ports of Ningbo and Shanghai in China, manages a domestic and overseas service partner network and provides integrated, reliable and cost competitive logistics solutions. Horizon Lines reported a net loss of $229.41 million in 2011, a net loss of $57.97 million in 2010, and a net loss of $31.27 million in 2009. The Company's balance sheet at Sept. 23, 2012, showed $620.50 million in total assets, $617.47 million in total liabilities and $3.02 million in total stockholders' equity. Refinancing The Company was not in compliance with the maximum senior secured leverage ratio and the minimum interest coverage ratio under its Senior Credit Facility at the close of its third fiscal quarter ended Sept. 25, 2011. Non-compliance with these financial covenants constituted an event of default, which could have resulted in acceleration of the maturity. None of the indebtedness under the Senior Credit Facility or Notes was accelerated prior to the completion of a comprehensive refinancing on Oct. 5, 2011. The Senior Credit Facility and 99.3% of the 4.25% Convertible Senior Notes were repaid as part of the refinancing. In addition, as a result of the completion of the refinancing, the short-term obligations under the Senior Credit Facility, the Notes and the Bridge Loan have been classified as long-term debt. As a result of the efforts to refinance the Company's debt and the 2011 amendments to the Senior Credit Facility, the Company paid $17.3 million in financing costs and recorded a loss on modification of debt of $0.6 million during 2011. * * * In June 2012, Moody's Investors Service affirmed Horizon Lines, Inc.'s Corporate Family Rating (CFR) and Probability of Default Rating ("PDR") at Caa2 and removed the LD ("Limited Default") designation from the rating in recognition of the conversion to equity of the $228 million of Series A and Series B Convertible Senior Secured notes due in October 2017 ("Notes"). Moody's said the affirmation of the Corporate Family and Probability of Default ratings considers that total debt has been reduced by the conversion of the Notes, but also recognizes the significant operating challenges that the company continues to face. HOSTESS BRANDS: Has Green Light to Auction Brands in March ---------------------------------------------------------- Dow Jones Newswires' Rachel Feintzeig reports that Bankruptcy Judge Robert Drain in White Plains, N.Y., on Monday cleared Hostess Brands Inc. to proceed with several of the sale processes it has unveiled during the past several weeks: $410 million is being offered by private-equity firms Apollo Global Management LLC and Metropoulos & Co., as lead bidder, for most of the Hostess cakes business, including brands such as Twinkie, Dolly Madison, Ho Hos and Ding Dongs. That bid also covers five bakeries and certain equipment. If Apollo and Metropoulos don't emerge as the owner of the Twinkie assets, they will be eligible for a breakup fee of $12.3 million. $27.5 million is being offered by McKee Foods Corp., the maker of Little Debbie snack cakes, as lead bidder, for Hostess's Drake's brand. The offer doesn't include the Drake's plant in New Jersey. McKee Foods would receive $687,500 if it doesn't win at auction. $28.9 million is being tendered by a subsidiary of United States Bakery Inc., a Portland, Ore., company also known as Franz Family Bakery, as lead bidder, for Hostess's bread brands including Sweetheart, Eddy's, Standish Farms and Grandma Emilie's. That bid also includes four bakeries, 14 depots and equipment. The auction for the Twinkie assets is scheduled for March 13, according to a Hostess spokesman, the report relates, and auctions for the Drake's assets and the four bread brands are slated for March 15. Judge Drain will hold a sale hearing March 19 to consider approval of the winning bidders. In January, Hostess won permission to auction off five of its major bread brands -- including Wonder and Nature's Pride -- along with 20 plants and 38 depots. Flowers Foods Inc., based in Thomasville, Ga., and the maker of Tastykakes, is the stalking horse in that contest, offering $360 million. The auction is set to take place on Feb. 28, with a sale hearing on March 5. According to Dow Jones, Lisa Laukitis, a Jones Day attorney representing Hostess, said in court Monday that Hostess has drummed up stalking-horse bids totaling more than $856 million. Union Sought Change of Rules Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the bakery workers' union was in bankruptcy court seeking a change in rules for auctioning off the snack cake business belonging to Hostess Brands Inc. A strike by the union was the reason the baker of Wonder bread was forced to shut down and liquidate. The report relates that Hostess had no alternative aside from liquidation when the bakery union struck in November after the company implemented a concessionary contract the bankruptcy judge approved in October. The contract required Hostess to insist that any purchaser recognize the union as the workers' bargaining agent and negotiate a contract. According to the report, the union objects because Hostess is proposing to sell the snack cake business without requiring a buyer to negotiate a new union contract. The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union raised the same objection when the judge approved auction procedures for most of the bread business. The judge deferred ruling, saying the issue was properly the subject of objection to a sale once the highest bid is selected at auction. The union, the report discloses, also wants the judge to insert a provision in the sale saying that the bankruptcy court isn't relieving a buyer of its obligations under labor laws to recognize and negotiate with the union. The hearing the U.S. Bankruptcy Court in White Plains, New York, will establish rules governing the auction to determine whether the $410 bid from Apollo Global Management LLC and C. Dean Metropoulos & Co. is the best offer for a majority of the snack cake business. The judge already approved procedures leading up to a Feb. 28 auction for most of the bread business where the opening bid is $390 million. Twinkles' Change Of Owners Steven M. Davidoff, writing for The New York Times' DealBook blog, reported that the same machinations that nearly caused the demise of the Twinkies brand may be the same machinations that could save it. The DealBook related that the Twinkies, which was an in-house invention of Continental Baking Company, has passed the hands of many owners and will soon pass to another owner, in an attempt to save the 83-year old cream-filled snack and other assortment of baked products owned by Hostess Brands. Liquidation, according to DealBook, has proved to be the Twinkie's savior as bankruptcy has given Hostess Brands freedom from its 394 union contracts and more than $2 billion pension liabilities and the value of the Twinkie has been reduced solely to what people were willing to pay for the brand. Two private equity firms, C. Dean Metropoulos & Company and Apollo Global Management, have agreed to pay $410 million to buy the Hostess business, including Twinkies, the DealBook noted. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. DHostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process is expected to be completed in one year. HOSTESS BRANDS: Workers Seeking Higher Wages From Buyers -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the bakery workers' union, whose strike caused Hostess Brands Inc. to liquidate, held a press conference to announce it's held talks with prospective purchasers of the maker of Wonder bread. According to the report, Hostess was prohibiting the buyers from talking to the union, the workers' representative previously said. To gain access to the buyers, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union signed a confidentiality agreement. The report relates that union leader David Durkee said his membership will fight to be a part of Hostess' future. He believes the workers can negotiate better wages with buyers than they were receiving from Hostess. Hostess has contracts to sell various parts of the business to several buyers for more than $850 million in total. There will be auctions to test the market for higher bids. The first auction will take place Feb. 28 for most of the Hostess bread business. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. DHostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process is expected to be completed in one year. HYPERTENSION DIAGNOSTICS: Issues $200,000 Notes to 2 Directors -------------------------------------------------------------- HDI Plastics, Inc., a wholly owned subsidiary of Hypertension Diagnostics, Inc., executed a Secured Promissory Note in a principal amount of $200,000 in favor of Mark Schwartz and Alan Stern, directors of the Company. The Note bears interest at an annual rate of 18%, payable monthly, and is guaranteed by the Company. The Note matures on Feb. 1, 2014, at which time all principal and accrued and unpaid interest on the Note is due. The Note is secured by certain equipment of HDI Plastics pursuant to a negotiated Security Agreement executed by HDI Plastics in favor of Messrs. Schwartz and Stern. In connection with the issuance of the Note, the Company issued to each of Messrs. Schwartz and Stern a warrant to purchase 3,333,333 shares of common stock, par value $0.01 per share, of the Company for an exercise price of $0.03 per share, subject to appropriate adjustment for stock splits, combinations and similar recapitalization events. The warrants contained other customary terms and conditions. The warrants expire on Feb. 4, 2018. Pursuant to the terms of the Note and Security Agreement, HDI Plastics may raise an additional $300,000 on the same terms and conditions as those set forth in the Note, Security Agreement and Warrants. About Hypertension Diagnostics Minnetonka, Minnesota-based Hypertension Diagnostics, Inc., was previously engaged in the design, development, manufacture and marketing of proprietary devices. In August 2011, the Company sold its medical device inventory, subleased its office and manufacturing facility, and entered into a limited license agreement with a company controlled by Jay Cohn, a founder and at that time, a director of the Company. In September 2011, the Company formed HDI Plastics Inc. ("HDIP"), a wholly owned- subsidiary, leased a facility for warehouse and processing of recycled plastic, purchased selected manufacturing assets and began engaging in the business of plastics reprocessing in Austin, Tex. On March 29, 2012, the Company ceased operations at the Austin facility and it is currently seeking to relocate the processing facility to a new location. The Company currently has a plan to resume production around Feb. 1, 2013, assuming adequate capital is obtained to do so. The Company's balance sheet at Sept. 30, 2012, showed $1.1 million in total assets, $2.0 million in total liabilities, and a stockholders' deficit of $909,741. As reported in the TCR on Oct. 2, 2012, Moquist Thorvilson Kaufmann & Pieper LLC, in Edina, Minnesota, expressed substantial doubt about Hypertension's ability to continue as a going concern. The independent auditors noted that the Company had net losses for the years ended June 30, 2012, and 2011, and has a stockholders' deficit at June 30, 2012. IMAGEWARE SYSTEMS: Traditional Investment Holds 7.6% Equity Stake ----------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Traditional Investment Fund, LTD, and Thomas L. Wallace disclosed that, as of Dec. 20, 2011, they beneficially own 6,000,000 shares of common stock of Imageware Systems, Inc., representing 7.63% of the shares outstanding. A copy of the filing is available for free at http://is.gd/JvCESO About ImageWare Systems Headquartered in San Diego, California, ImageWare Systems, Inc., is a leader in the emerging market for software-based identity management solutions, providing biometric, secure credential, law enforcement and enterprise authorization. Its "flagship" product is the IWS Biometric Engine. Scalable for small city business or worldwide deployment, the Company's biometric engine is a multi- biometric platform that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. The Company's identification products are used to manage and issue secure credentials, including national IDs, passports, driver licenses, smart cards and access control credentials. Its law enforcement products provide law enforcement with integrated mug shot, fingerprint LiveScan and investigative capabilities. The Company also provides comprehensive authentication security software. The Company reported a net loss of $3.18 million in 2011, compared with a net loss of $5.05 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $10.49 million in total assets, $8.35 million in total liabilities and $2.14 million in total shareholders' equity. INDIEPUB ENTERTAINMENT: Suspends Reporting Obligations with SEC --------------------------------------------------------------- indiePub Entertainment Inc. filed a Form 15 with the U.S. Securities and Exchange Commission to voluntarily terminate registration of its common stock and suspend its duty to file reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934. There were only 160 holders of the common shares as of Feb. 6, 2013. About indiePub indiePub Entertainment, Inc., formerly Zoo Entertainment, Inc., is a developer, publisher and distributor of interactive entertainment software for digital distribution channels. The Company reported a net loss of $25.87 million in 2011, compared with a net loss of $14.03 million in 2010. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, EisnerAmper LLP, in Edison, New Jersey, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has both incurred losses and experienced net cash outflows from operations since inception. The Company's balance sheet at Sept. 30, 2012, showed $1.94 million in total assets, $7.44 million in total liabilities and a $5.49 million total stockholders' deficit. INTELLIPHARMACEUTICS: Isa Odidi Discloses 40.8% Equity Stake ------------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Isa Odidi and his affiliates disclosed that, as of Jan. 10, 2013, they beneficially own 8,179,721 shares of common stock of Intellipharmaceutics International, Inc., representing 40.8% of the shares outstanding. A copy of the filing is available at http://is.gd/GEm8JM About Intellipharmaceutics International Intellipharmaceutics International Inc. is a pharmaceutical company specializing in the research, development and manufacture of novel and generic controlled-release and targeted-release oral solid dosage drugs. Deloitte LLP, in Toronto, Canada expressed substantial doubt about Intellipharmaceutics' ability to continue as a going concern. The independent auditors noted that of the Company's recurring losses from operations and accumulated deficit. The Company reported a net loss of US$6.14 million on US$107,091 of research and development revenue for fiscal 2012, compared with a net loss of US$4.88 million on US$501,814 of research and development revenue for fiscal 2011. The Company's balance sheet at Nov. 30, 2012, showed US$2.47 million in total assets, US$4.24 million in total liabilities, and a stockholders' deficit of US$1.77 million. ISOLA USA: Heavy Debt Burden Cues Moody's to Cut CFR to 'Caa2' -------------------------------------------------------------- Moody's Investors Service has downgraded Isola USA's Corporate Family Rating (CFR) to Caa2 from B3, and the Probability of Default Rating (PDR) to Caa2-PD from B3-PD, reflecting the rating agency's view that Isola's overall debt load may be unsustainable over the long term, accentuated by Moody's expectations of continuing softness in the company's key printed circuit board end markets over the next year, which will further stress the company financial profile. Concurrently, Moody's downgraded Isola's senior secured first-lien term loan rating to B3 from B1. The rating outlook was changed to negative from stable, given the rating agency's view that absent a material turnaround in the company's business or meaningful debt reduction through additional equity capital the probability of default will remain elevated. Ratings Rationale The Caa2 Corporate Family Rating reflects the heightened probability of a debt restructuring absent equity infusion given Isola's relatively weak credit metrics, in light of approaching debt maturities in 2015 and the PIK accretion of the subordinated notes. The rating also incorporates the company's small scale relative to larger vertically integrated competitors, which are typically divisions of larger companies with greater financial and R&D resources than Isola. Moody's expects Isola's high financial leverage at the mid 5x total debt to EBITDA (Moody's adjusted) levels to remain at current range given modest opportunity for organic deleveraging. The rating also reflects the variability in the company's cash generation given its limited visibility into end-market demand, and its exposure to the volatile semiconductor industry and to OEMs in the highly cyclical technology, telecommunications and networking market segments. The rating benefits from Isola's increasing focus on higher quality laminates for the end PCB products which carry higher margins and its close relationships with OEMs, which aids the design and fabrication process. Moody's notes that earlier in 2012, the company announced plans for an initial public offering, the proceeds of which were slated to pay down some existing debt. However, as the general business conditions in the key printed circuit boards end markets that use Isola's high end laminates are expected to remain choppy over the next year, the probability of a successful IPO launch has diminished while the company's debt balances grow with the accretion of the PIK notes. Isola maintains adequate liquidity supported by cash balances of roughly USD60 million as of September 30, 2012. Moody's expects profitability to remain flat in the near term with modest improvement in the latter half of 2013 as a result of the continued mix shift to more specialized higher margin laminate products. With expected working capital needs to fund mid to high single-digit revenue growth and capex estimated in the range of 3% to 4% of revenue, Moody's anticipates negative to breakeven free cash flow over the coming year, which would not allow the company to materially reduce the company's financial leverage. What Could Change the Rating - UP Ratings could be upgraded if the company were to successfully address its upcoming maturities, demonstrate sustainable improvement in operating performance, or obtain equity funding such that its total debt to EBITDA (Moody's adjusted) is reduced below 5.0x. What Could Change the Rating - DOWN Ratings could be downgraded if the company is unable to improve its operating performance, the company's liquidity position were to weaken or failure to address its upcoming maturities, leading to heightened risk of a default. Rating Actions: Corporate Family Rating downgraded to Caa2 from B3 Probability of Default Rating downgraded to Caa2-PD from B3-PD Sr. Secured First Lien Term Loan downgraded to B3 (LGD-3, 30%) from B1 (LGD-2, 25%) The principal methodology used in rating Isola USA Corp. was the Global Distribution & Supply Industry Methodology published in November 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. ISTAR FINANCIAL: Diamond Hill Discloses 5.5% Equity Stake --------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Diamond Hill Capital Management, Inc., disclosed that, as of Dec. 31, 2012, it beneficially owns 4,644,073 shares of common stock of iStar Financial Inc. representing 5.5% of the shares outstanding. Diamond Hill previously reported beneficial ownership of 5,141,989 common shares or a 6.3% equity stake as of Dec. 30, 2011. A copy of the amended filing is available at http://is.gd/b02SwR About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. The Company reported a net loss of $25.69 million in 2011, compared with net income of $80.20 million in 2010. iStar Financial's balance sheet at Sept. 30, 2012, showed $6.94 billion in total assets, $5.52 billion in total liabilities, $14.20 million in redeemable noncontrolling interests, and $1.40 billion in total equity. * * * In March 2012, Fitch affirmed the company's 'B-' issuer default rating. The IDR affirmation is based on a manageable debt maturity profile of the company, pro forma for the recently- consummated secured financing that extends certain of the company's debt maturities, relieving the overhang of significant unsecured debt maturities in 2012 and 2013. While this 2012 financing does not reduce the amount of total debt outstanding, the company's debt maturity profile is more manageable over the next two years, with only 48% of debt maturing pro forma, down from 61%. Given the mild improvement in commercial real estate fundamentals and value stabilization, the company's loan and real estate owned portfolio performance will likely improve going forward, which should increase the company's ability to repay upcoming indebtedness. As reported by the TCR on Oct. 5, 2012, Standard & Poor's Ratings Services affirmed its 'B+' long-term issuer credit rating on iStar Financial Inc. In October 2012, Moody's Investors Service upgraded the corporate family rating to B2 from B3. The current rating reflects the REIT's success in extending near term debt maturities and improving fundamentals in commercial real estate. The ratings on the October 2012 senior secured credit facility takes into account the asset coverage, the size and quality of the collateral pool, and the term of facility. ISTAR FINANCIAL: BlackRock Discloses 6.8% Equity Stake ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that, as of Dec. 31, 2012, it beneficially owns 5,690,847 shares of common stock of iStar Financial Inc. representing 6.8% of the shares outstanding. BlackRock previously reported beneficial ownership of 4,984,092 common shares or a 6.08% equity stake as of Dec. 30, 2011. A copy of the amended filing is available at: http://is.gd/TpEWWb About iStar Financial New York-based iStar Financial Inc. (NYSE: SFI) provides custom- tailored investment capital to high-end private and corporate owners of real estate, including senior and mezzanine real estate debt, senior and mezzanine corporate capital, as well as corporate net lease financing and equity. The Company, which is taxed as a real estate investment trust, provides innovative and value added financing solutions to its customers. The Company reported a net loss of $25.69 million in 2011, compared with net income of $80.20 million in 2010. iStar Financial's balance sheet at Sept. 30, 2012, showed $6.94 billion in total assets, $5.52 billion in total liabilities, $14.20 million in redeemable noncontrolling interests, and $1.40 billion in total equity. * * * In March 2012, Fitch affirmed the company's 'B-' issuer default rating. The IDR affirmation is based on a manageable debt maturity profile of the company, pro forma for the recently- consummated secured financing that extends certain of the company's debt maturities, relieving the overhang of significant unsecured debt maturities in 2012 and 2013. While this 2012 financing does not reduce the amount of total debt outstanding, the company's debt maturity profile is more manageable over the next two years, with only 48% of debt maturing pro forma, down from 61%. Given the mild improvement in commercial real estate fundamentals and value stabilization, the company's loan and real estate owned portfolio performance will likely improve going forward, which should increase the company's ability to repay upcoming indebtedness. As reported by the TCR on Oct. 5, 2012, Standard & Poor's Ratings Services affirmed its 'B+' long-term issuer credit rating on iStar Financial Inc. In October 2012, Moody's Investors Service upgraded the corporate family rating to B2 from B3. The current rating reflects the REIT's success in extending near term debt maturities and improving fundamentals in commercial real estate. The ratings on the October 2012 senior secured credit facility takes into account the asset coverage, the size and quality of the collateral pool, and the term of facility. JEFFERSON COUNTY: Indenture Trustee Seeks to Spread Payments ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the indenture trustee for Jefferson County, Alabama sewer bondholders filed papers in bankruptcy court for permission to accelerate maturity of bonds among the $3.2 billion that haven't already come due. The report notes that even if the indenture trustee can accelerate maturity of the bonds, it doesn't mean the county is required to pay immediately. Accelerating the bonds would kick in a provision in the indenture where future payments would be applied both to principal and interest. Bank of New York Mellon, the indenture trustee, is acting because holders of some $792 million in previously matured bonds didn't consent to the use of reserves to pay $18.2 million in principal coming due Feb. 1. For lack of consent, the indenture trustee didn't make the Feb. 1 payments, according to the report. According to the report, the bank filed a second set of papers asking the bankruptcy judge in Birmingham, Alabama, to resolve disputes with bond insurers about interpretation of provisions in the indentures. The indenture trustee takes the position that the so-called automatic stay doesn't apply to acceleration of the bonds under Section 922 of the U.S. Bankruptcy Code. That section says that the stay doesn't preclude payment from "pledged special revenues." If the stay does apply, the indenture trustee wants the bankruptcy judge to modify the stay to allow acceleration of the bonds. 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: S&P Lowers Rating on Sewer Warrants to 'D' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its underlying ratings (SPURs) to 'D' from 'C' on Jefferson County, Ala.'s series 1997A, 2001A, 2003-B-8, 2003 B-1-A through series 2003 B-1-E, and series 2003 C-1 through 2003 C-10 sewer system revenue warrants (Sewer Warrants). "The downgrade follows the suspension of payments by the trustee, the Bank of New York Mellon," said Standard & Poor's credit analyst James Breeding. According to the trustee, the scheduled principal and interest payments due on both the fixed-rate and auction-rate warrants were not made on Feb. 1, 2013. The trustee issued a notice on Feb, 1, indicating that it was suspending any distribution of net system revenues and any draws on insurance policies securing the Sewer Warrants until further notice. The trustee had been applying net system revenues to the payment of interest and principal due by reason of maturity or sinking fund redemption on the Sewer Warrants. Previously, holders of certain bank warrants, which are on an accelerated repayment schedule and which had principal payments overdue, had consented to the trustee's making distributions on the Sewer Warrants as if no payment defaults had occurred on the bank warrants. However, according to the notice filed, the trustee has been informed that those holders of the bank warrants are no longer willing to consent. As a result, the trustee is suspending any distributions of net system revenues to make principal and interest payments on the Sewer Warrants. As of Sept. 30, 2010 (the latest audit available), Jefferson County had sewer revenue warrants outstanding of $3.16 billion. Three series of Sewer Warrants are in a fixed-rate mode (series 1997A, 2001A, and 2003B-8), two are in an auction-rate mode (series 2003B-1 and 2003C), and the remainder were issued as variable-rate warrants. Standard & Poor's does not maintain a rating on the variable-rate warrants. JEFFERSON COUNTY: Bondholders Sue Over Sewer Payments ----------------------------------------------------- Katy Stech at Daily Bankruptcy Review reports that pressed by an impatient group of creditors, the bank in charge of distributing sewer revenue to Jefferson County, Ala., bondholders owed some $3.2 billion has turned to the county's bankruptcy judge for help in determining whether it can accelerate some debt payments and make bond insurers pay for them. 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. LEGENDS GAMING: Debtor and Chickasaws Sue One Another ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the confirmation hearing Feb. 6 where casino operator Legends Gaming LLC was intending to have approval of a Chapter 11 reorganization plan instead is turning into a litigation meltdown with an affiliate of the Chickasaw Nation that was under contract to buy the facility. The report recounts that the bankruptcy court in Shreveport, Louisiana, approved disclosure materials in November allowing creditors to vote in anticipation of the Feb. 6 confirmation hearing. The gaming properties in Bossier City, Louisiana, and Vicksburg, Mississippi, were to be sold under the plan to the Chickasaws for $125 million. The tribe 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 casino as a result withdrew the plan and canceled confirmation hearing. The bone of contention revolves around cash flow which declined in the last part of 2012. According to the report, the tribe and the casino filed lawsuits against one another. The casino claims the tribe is in breach of contract. The tribe contends the casino violated the contract by not making needed investments and not operating the casino in the ordinary course of business. The abandoned plan was designed for a 67% recovery for the first- lien lenders, according to the disclosure statement. The second- lien lenders, owed $116.3 million, were to receive nothing. 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: LBI Trustee Earmarks $15.2 Billion for Clients --------------------------------------------------------------- The trustee liquidating Lehman Brothers Holdings Inc.'s brokerage asked the U.S. Bankruptcy Court in Manhattan to approve the final allocation of about $15.2 billion in securities and cash to the fund of customer property. The assets to be allocated include $10.863 billion worth of securities and $1.691 billion of total cash held in accounts for the benefit of customers. A list of these assets can be accessed for free at http://is.gd/kTis2x The Lehman trustee has about $25.7 billion in assets under his control. The assets represent cash and securities from the brokerage's legacy bank and custodial accounts, recoveries from third parties, and dividends earned on legacy property and trustee-invested cash. From this pool of property, reserves have been set aside of $4.6 billion on account of continuing uncertainty resulting from the Barclays Capital Inc. litigation and appeal, according to a court filing. Daniel McIsaac, director at the Financial Services Regulatory Practice of KPMG LLP, and two senior managers at Deloitte & Touche LLP filed declarations in support of the proposed allocation of customer properties. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. (http://bankrupt.com/newsstand/or 215/945-700) LEHMAN BROTHERS: Standard Chartered Suit Dismissal Approved ----------------------------------------------------------- The U.S. Bankruptcy Court in Manhattan approved an agreement, which calls for the dismissal of Lehman Brothers Holdings Inc.'s lawsuit against Standard Chartered Bank and Standard Chartered Bank Korea. The lawsuit filed last year was halted pursuant to an earlier order from the bankruptcy court. In its lawsuit, Lehman asserted claims for fraudulent transfers and asked for reclassification of the banks' claims. Under the deal, both sides agreed for the dismissal of the lawsuit and the allowance of the banks' claims under Lehman's Chapter 11 plan. SCBK can assert a claim of more than $36.4 million against Lehman while the other bank can assert a claim of more than $25.6 million. The deal is formalized in an 11-page agreement, which can be accessed for free at http://is.gd/3e3Bjv 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) LEVI STRAUSS: Reports $143.8 Million Net Income in Fiscal 2012 -------------------------------------------------------------- Levi Strauss & Co. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing net income attributable to the Company of $143.85 million on $4.61 billion of net revenues for the year ended Nov. 25, 2012, compared with net income attributable to the Company of $137.95 million on $4.76 billion of net revenue for the year ended Nov. 27, 2011, and net income attributable to the Company of $156.50 million on $4.41 billion of net revenues for the year ended Nov. 28, 2010. The Company's balance sheet at Nov. 25, 2012, showed $3.17 billion in total assets, $3.26 billion in total liabilities, $7.88 million in temporary equity, and a $101.50 million total stockholders' deficit. "In 2012, we made some tough choices and executed significant changes to set the company on a path towards driving sustainable profitable growth," said Chip Bergh, president and chief executive officer. "We have a largely new leadership team, sharper strategies and a new organization model designed to win in the marketplace. We're focused on driving our profitable core businesses, expanding beyond the core to develop a more balanced portfolio, becoming a best-in-class retailer and making our cost structure more competitive." A copy of the Form 10-K is available for free at: http://is.gd/G0mP6l About Levi Strauss & Co. Headquartered in San Francisco, California, Levi Strauss & Co. -- http://www.levistrauss.com/-- is one of the world's leading branded apparel companies. The Company designs and markets jeans, casual and dress pants, tops, jackets and related accessories, for men, women and children under the Levi's(R), Dockers(R) and Signature by Levi Strauss & Co.(TM). The Company markets its products in three geographic regions: Americas, Europe, and Asia Pacific. * * * In April 2012, Standard & Poor's Ratings Services assigned its 'B+' rating (same as the corporate credit rating) to San Francisco-based Levi Strauss & Co.'s proposed $350 million senior unsecured notes due 2022. "The ratings on Levi Strauss reflect our view that the company's financial profile continues to be 'aggressive,' particularly since the company's balance sheet remains highly leveraged and we expect cash flow protections measures to continue to be weak. In addition, we continue to consider Levi Strauss' business risk profile to be 'weak,' given its continuing participation in the highly competitive denim and casual pants market, which is subject to fashion risk and still-weak consumer spending, and our expectation that the company's business focus will remain narrow. We believe the company benefits from its strong, well-recognized Levi's brand, long operating history, and distribution channel diversity (both by retail customer and geography)," S&P said. In April 2012, Moody's Investors Service affirmed Levi Strauss & Co ("LS&Co) B1 Corporate Family and Probability of Default Ratings. Moody's also assigned a B2 rating to the company's proposed $350 million senior unsecured notes due 2022 and affirmed the B2 ratings of the company's other series of unsecured debt. Levi Strauss' B1 Corporate Family Rating reflects the company's negative trends in operating margins reflecting inconsistent execution as well as input cost pressures. The ratings also reflect the company's still significant debt burden, which has been increasing due to the company's continued investment in its own retail stores and its sizable underfunded pension. Debt/EBITDA (incorporating Moody's standard analytical adjustments) was 5.1 times for the LTM period ending 2/26/2012. The rating take into consideration the company's significant global scale, with revenues near $5 billion, its operations in over 110 countries and the ownership of the iconic Levi's trademark. * * * This concludes the Troubled Company Reporter's coverage of Levi Strauss until facts and circumstances, if any, emerge that demonstrate financial or operational strain or difficulty at a level sufficient to warrant renewed coverage. LHI HOLDCO: S&P Assigns 'B-' CCR; Rates $10MM Revolver 'B+' ----------------------------------------------------------- Standard & Poor's Ratings Services assigned D'Iberville, Miss.- based LHI Holdco LLC its 'B-' corporate credit rating. The outlook is positive. "At the same time, we assigned Land Holdings I LLC's proposed $10 million super priority revolver due 2018 our 'B+' issue-level rating (two notches above the corporate credit rating), with a recovery rating of '1', indicating our expectation that lenders will receive very high (90% to 100%) recovery in the event of a payment default," S&P said. S&P also assigned the company's $162.5 million term loan due 2020 S&P's 'B-' issue-level rating (at the same level as the corporate credit rating), with a recovery rating of '3', indicating S&P's expectation that lenders will receive meaningful (50% to 70%) recovery in the event of a payment default. LHI Holdco is the direct parent of the borrower and will be a guarantor of the credit facility. The company plans to use proceeds from the proposed transaction, in conjunction with $103 million of equity from the company's sponsor and $20 million of equipment financing, to: -- Fund the development and construction of Scarlett's Pearl Casino Resort; -- Establish an interest reserve to fund debt service through the construction period and the first few months following the opening of the casino; and -- Fund transaction fees and expenses. The 'B-' corporate credit rating reflects S&P's assessment of LHI Holdco's business risk profile as "vulnerable" and its financial risk profile as "highly leveraged," according to S&P's criteria. S&P's business risk profile assessment of "vulnerable" reflects the construction and execution risks associated with developing a gaming property, as well as LHI Holdco's reliance on a single asset in a highly competitive market with well-established operators to meet fixed charges. These risks are somewhat mitigated by S&P's favorable view of the location and its expectation that the property will be of high asset quality compared with other properties in the market. "Our financial risk profile assessment of "highly leveraged" reflects our belief that new gaming projects are often somewhat slow to ramp up operations because of uncertain demand and challenges in managing initial costs effectively, which can lead to poor profitability, particularly in the first few months. In addition, we believe liquidity could be pressured if the opening of the casino is delayed. LHI Holdco relies on a single property for cash flow generation, and we estimate that the interest reserve will provide a limited cushion after the 17-month construction period has ended. Despite these risks, we are forecasting that the property will generate cash flow sufficient to cover fixed charges upon opening," S&P said. LIGHTSQUARED INC: Seeks Plan Filing Exclusivity Until May 31 ------------------------------------------------------------- LightSquared Inc. is seeking an extension of its exclusive periods to file a Plan of Reorganization and to solicit acceptances for that plan through May 31, 2013, and July 31, 2013. A hearing was scheduled Jan. 31 but was continued to Feb. 11, 2013, at 3:30 p.m. As reported in the TCR on Jan. 25, 2013, according to the Debtors: -- Pursuant to the 2010 FCC Change of Control Order, they were subject to certain network build-out and coverage milestones requiring, among other things, that they construct a terrestrial broadband network capable of providing coverage to at least 100 million Americans by Dec. 31, 2012. -- At the time the Chapter 11 cases were initiated, the only "solution" to the GPS concerns that formally had been proposed was to indefinitely suspend the FCC authorizations on which the Debtor's terrestrial broadband network is premised. -- The Debtor has made substantial and tangible progress on a regulatory resolution that will permit it to deploy a 4G terrestrial wireless network. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. LIGHTSQUARED INC: Build-Out Loan Will Now be Made In Two-Drawings ------------------------------------------------------------------ Dot six Corp., as Borrower, and the DIP Guarantors (the "Inc. Obligors") under the Senior Secured, Super-Priority Credit Agreement dated July 19, 2012, informs the Bankruptcy Court that in accordance with paragraph 12 of the Final Order, the Inc. Obligors intend to further amend the DIP Agreement such that, among others: (i) The Build-Out Loan will now be made in two-drawings, instead of a single-drawing, to Borrower, on or before Feb. 15, 2013. The Initial Build-Out Loan Amount in the aggregate amount of of $365,000 will be made on Feb. 15, 2013. The second drawing will be made on or before March 29, 2013, in an aggregate principal amount of $10,435,000 (the Build-Out Loan Commitment of $10,800,000 less the Initial Build-Out Amount). (ii) The following milestones will now apply: Milestone Date --------- ---- Final RF design Oct. 15, 2012 Initial Long Lead Search rings released Feb. 22, 2013 Map showing proposed sites Feb. 22, 2013 Validate existence of equipment sufficient for site build-out April 1, 2013 Remaining Search rings released April 1, 2013 Sites leased covering 50% of the targeted population April 30, 2013 Sites zoned covering 50% of the targeted population June 15, 2013 Sites leased covering 90% of the targeted population June 15, 2013 Sites zoned covering 90% of the targeted population Aug. 1, 2013 Construction of sites complete Sept. 1, 2013 Substantial on-air service being provided from sites Sept.20, 2013 Responses or objections, if any, must be filed with the Bankruptcy court so as to be actually received no later than Feb. 13, 2013, at 4:00 p.m. If an objection is received by the Objection Deadline, a hearing will be held on Feb. 27, 2013, at 2:00 p.m. A copy of the Notice of Amendment to DIP Agreement is available at: http://bankrupt.com/misc/lightsquared.doc518.pdf As reported in the TCR on July 31, 2012, the Bankruptcy Court authorized on a final basis, Lightsquared Inc., et al., to obtain up to the principal amount of $41.4 million from U.S. Bank National Association, as arranger, administrative agent, and collateral agent. A copy of the Final Order is available at: http://bankrupt.com/misc/lightsquared.doc224.pdf About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, as the Company seeks to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. LONG ISLAND COLLEGE HOSPITAL: Officials Vote to Shut Down --------------------------------------------------------- Laura Kusisto at Dow Jones' DBR Small Cap reports that state university officials on Friday voted to close Long Island College Hospital, a money-losing downtown Brooklyn institution whose possible demise has sparked outrage and sadness among workers and community members. LPATH INC: Ailsa Craig Trust Discloses 4.9% Equity Stake -------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Ailsa Craig Trust and Michael Svensson, as Trustee of the Ailsa Craig Trust disclosed that, as of Oct. 5, 2012, they beneficially own 648,858 shares of common stock of Lpath, Inc., representing 4.95% of the shares outstanding. A copy of the filing is available for free at http://is.gd/MBwkgw About Lpath, Inc. San Diego, Calif.-based Lpath, Inc. is a biotechnology company focused on the discovery and development of lipidomic-based therapeutics, an emerging field of medical science whereby bioactive lipids are targeted to treat human diseases. The Company reported a net loss of $3.11 million in 2011, compared with a net loss of $4.60 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $18.77 million in total assets, $12.98 million in total liabilities, and $5.79 million in total stockholders' equity. LSP ENERGY: Creditors Voting on 32% Plan for Unsecured Creditors ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that LSP Energy LP, which completed the sale of its 837-megawatt electric generating plant in December, scheduled a March 25 confirmation hearing for approval of the Chapter 11 plan with a projected recovery of 32% for holders of $42.9 million in unsecured claims. According to the report, the U.S. Bankruptcy Court in Delaware approved explanatory disclosure materials on Feb. 6, allowing creditors to vote on the plan and schedule the confirmation hearing. The report relates that the plan calls for full payment in cash to holders of $221.3 million in secured bonds. As the result of a settlement on the bondholders' additional claim for premature payment, the holders will receive 15.2% of the $80 million make- whole claim. About LSP Energy LSP Energy Limited, which owned and operated an electricity generation facility located in Batesville, Mississippi, filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 12-10460) on Feb. 10, 2012. Judge Mary F. Walrath oversees the case. Lawyers at Whiteford Taylor & Preston LLC serve as the Debtors' counsel. LSP has a $20 million secured loan provided by lenders including John Hancock Financial Services Inc. LSP was forced into bankruptcy following mechanical problems that took one of three units out of service. Bondholders have claims for $211 million on two series of secured bonds. In addition, there was a $3.9 million working capital facility and $23.3 million in secured debt owing to an affiliate of Siemens AG, which repairs and maintains the facility. The Debtor has completed the sale of its 837-megawatt electric generating plant in Batesville, Mississippi, to South Mississippi Electric Power Assn. for $272.6 million. LYONDELL CHEMICAL: BNY Defends $18-Bil. Debt Addition in Suit ------------------------------------------------------------- Natalie Rodriguez of BankruptcyLaw360 reported that The Bank of New York Mellon Corp. told a New York state appeals court Thursday that tacking on $18 billion in senior debt to an intercreditor agreement didn't change its deal with hedge funds that are now suing for losses tied to Basell AF SCA's buyout of Lyondell Chemical Co. BNY Mellon is appealing a lower court's March ruling that dismissed only one of three claims in a suit lodged by hedge funds, the report added. About Lyondell Chemical LyondellBasell Industries is one of the world's largest polymers, petrochemicals and fuels companies. Luxembourg-based Basell AF and Lyondell Chemical Company merged operations in 2007 to form LyondellBasell Industries, the world's third largest independent chemical company. LyondellBasell became saddled with debt as part of the US$12.7 billion merger. Len Blavatnik's Access Industries owned the Company prior to its bankruptcy filing. On Jan. 6, 2009, LyondellBasell Industries' U.S. operations, led by Lyondell Chemical Co., and one of its European holding companies -- Basell Germany Holdings GmbH -- filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code to facilitate a restructuring of the company's debts. The case is In re Lyondell Chemical Company, et al., Bankr. S.D.N.Y. Lead Case No. 09-10023). Seventy-nine Lyondell entities filed for Chapter 11. Luxembourg-based LyondellBasell Industries AF S.C.A. and another affiliate were voluntarily added to Lyondell Chemical's reorganization filing under Chapter 11 protection on April 24, 2009. Deryck A. Palmer, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, served as the Debtors' bankruptcy counsel. Evercore Partners served as financial advisors, and Alix Partners and its subsidiary AP Services LLC, served as restructuring advisors. AlixPartners' Kevin M. McShea acted as the Debtors' Chief Restructuring Officer. Clifford Chance LLP served as restructuring advisors to the European entities. LyondellBasell emerged from Chapter 11 bankruptcy protection in May 2010, with a plan that provides the Company with US$3 billion of opening liquidity. A new parent company, LyondellBasell Industries N.V., incorporated in the Netherlands, is the successor of the former parent company, LyondellBasell Industries AF S.C.A., a Luxembourg company that is no longer part of LyondellBasell. LyondellBasell Industries N.V. owns and operates substantially the same businesses as the previous parent company, including subsidiaries that were not involved in the bankruptcy cases. LyondellBasell's corporate seat is Rotterdam, Netherlands, with administrative offices in Houston and Rotterdam. MCCLATCHY CO: Contrarius Holds 10.6% of Class A Shares ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Contrarius Investment Management Limited and Contrarius Investment Management (Bermuda) Limited disclosed that, as of Dec. 31, 2012, they beneficially own 6,493,431 shares of Class A common stock of The McClatchy Company representing 10.6% of the shares outstanding. A copy of the filing is available at: http://is.gd/QoE3QV About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local Web sites in each of its markets which extend its audience reach. The Web sites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Sept. 23, 2012, showed $2.88 billion in total assets, $2.67 billion in total liabilities, and $210.29 million in stockholders' equity. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. McClatchy Co. carries a 'B-' Corporate Credit Rating from Standard & Poor's Ratings Services. MCCLATCHY CO: Incurs $30 Million Net Loss in Fourth Quarter ----------------------------------------------------------- The McClatchy Company reported a net loss of $30.01 million on $355.66 million of revenue for the three months ended Dec. 30, 2012, compared with net income of $42 million on $351.43 million of revenue for the three months ended Dec. 25, 2011. For the year ended Dec. 30, 2012, the Company reported a net loss of $144,000 on $1.23 billion of revenue, as compared with net income of $54.38 million on $1.26 billion of revenue for the year ended Dec. 25, 2011. Commenting on McClatchy's results, Pat Talamantes, McClatchy's President and CEO, said, "As we look back on 2012, we see a year in which the company made great progress on many fronts. Our successful transition to a hybrid print and digital media company continued as we were able to grow our nontraditional revenue sources with new product introductions while cultivating and enhancing our existing products. In addition, we were able to strengthen the company's capital structure by refinancing a good portion of our debt at a lower interest rate while extending the maturity date by five years." A copy of the press release, as amended, is available at: http://is.gd/3M0nxk About The McClatchy Company Sacramento, Calif.-based The McClatchy Company (NYSE: MNI) -- http://www.mcclatchy.com/-- is the third largest newspaper company in the United States, publishing 30 daily newspapers, 43 non-dailies, and direct marketing and direct mail operations. McClatchy also operates leading local Web sites in each of its markets which extend its audience reach. The Web sites offer users comprehensive news and information, advertising, e-commerce and other services. Together with its newspapers and direct marketing products, these interactive operations make McClatchy the leading local media company in each of its premium high growth markets. McClatchy-owned newspapers include The Miami Herald, The Sacramento Bee, the Fort Worth Star-Telegram, The Kansas City Star, The Charlotte Observer, and The News & Observer (Raleigh). The Company's balance sheet at Sept. 23, 2012, showed $2.88 billion in total assets, $2.67 billion in total liabilities, and $210.29 million in stockholders' equity. * * * McClatchy carries a 'Caa1' corporate family rating from Moody's Investors Service. In May 2011, Moody's changed the rating outlook from stable to positive following the company's announcement that it closed on the sale of land in Miami for $236 million. The outlook change reflects Moody's expectation that McClatchy will utilize the net proceeds to reduce debt, including its underfunded pension position, which will reduce leverage by approximately half a turn and lower required contributions to the pension plan over the next few years. McClatchy Co. carries a 'B-' Corporate Credit Rating from Standard & Poor's Ratings Services. MF GLOBAL: JPMorgan Tells Some Creditors Payment May be Higher -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that JPMorgan Chase Bank NA's objection to disclosure materials for creditors of MF Global Holdings Ltd., parent company of the liquidating commodity broker, contains good news for creditors of finance subsidiary MF Global Finance USA Inc. According to the report, JPMorgan explains how the disclosure statement should be improved to tell creditors of the finance subsidiary why their recovery could increase from the range of 14.2% to 33.6% to as much as 25.3% to 59.6%. JPMorgan is a lender and agent for lenders owed $1.18 billion. The disclosure statement comes up for approval at a Feb. 14 hearing in U.S. Bankruptcy Court in New York. If approved, creditors can begin voting on the Chapter 11 plan. The report adds that the U.S. Trustee also filed an objection. She faults the plan and disclosure statement for the lack of court scrutiny before paying fees of creditors who filed the plan. She also faults the disclosure statement for not revealing the size of the fees and expenses to be reimbursed. The report explains that JPMorgan's objection stems from loan transactions in the days before bankruptcy when the MF Global holding company borrowed $931 million and downstreamed $928 million to the finance company. Because the finance company was already liable for the loan, receiving the loan proceeds from the holding company would make the finance subsidiary liable on the same debt to both the holding company and the lenders. The bank says the disclosure statement should be improved by telling creditors of the finance company that they have objections to double liability for the same debt. If one liability is knocked out, about 30% of the finance company's entire debt load disappears, with the result that recoveries by its creditors may increase by 6.1% to as much as 26.3%, and possibly more, the bank calculates. Sapere Wealth Management LLC, a commodity customer of the brokerage subsidiary which lost several litigations in bankruptcy court, also objected to the disclosure statement. The losing efforts included an attempt at having brokerage distribution rules applied to the MF Global Holdings. If it succeeds on appeal, Sapere says that $4 billion in customer claims will come ahead of other customers. Sapere wants the disclosure statement modified to explain why other creditors' recoveries will fall substantially should it succeed on appeal. Sapere also wants a delay in the disclosure hearing because the plan was substantially revised early this month when holding company trustee Louis Freeh became a co-proponent. The Chapter 11 Plan Louis Freeh, the trustee for MF Global Holdings Ltd., and creditors filed a jointly proposed plan on Feb. 2. 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. Creditors proposing the plan 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 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. MICROSEMI CORP: S&P Rates $726MM Loan 'BB'; Retains 'BB-' CCR ------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB' issue-level rating and '2' recovery rating to California-based Microsemi Corp.'s $726 million senior secured term loan due 2020. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery in the event of payment default. The 'BB-' corporate credit rating and stable outlook on Microsemi remain unchanged and reflect S&P's expectation that the company's expanded product and market position through past acquisitions will support positive revenue growth and consistent profitability in the intermediate term despite near-term integration risks. The rating also reflects Microsemi's "significant" financial risk profile and "weak" business risk profile. RATING LIST RATINGS UNCHANGED Microsemi Corp. Corporate credit rating BB-/Stable RATINGS ASSIGNED Microsemi Corp. $726 mil. senior secured term loan due 2020BB Recovery rating MICHAEL BROTHERS: Case Summary & 5 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Michael Brothers, Inc. P.O. Box 92 Elkton, VA 22827-0000 Bankruptcy Case No.: 13-50163 Chapter 11 Petition Date: February 9, 2013 Court: United States Bankruptcy Court Western District of Virginia (Harrisonburg) Judge: Rebecca B. Connelly Debtor's Counsel: James Spencer Sease, Esq. JAMES S. SEASE, PC Bank of America Building, Suite 200 10458 Buckley Hall Road P.O. Box 715 Mathews, VA 23109 Tel: (804) 725-4700 Fax: (804) 725-4704 E-mail: jseaselaw@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its five largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/vawb13-50163.pdf The petition was signed by Verlin Erwin Michael, president. MOHEGAN TRIBAL: Moody's Views Market East Partnership Favorably --------------------------------------------------------------- Moody's Investors Service reports that Mohegan Tribal Gaming Authority's announcement that it will enter into a partnership agreement with Market East Associates L.P. (Market East, unrated) is viewed favorably. The principal methodology used in rating Mohegan tribal Gaming Authority was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Moody's revised Mohegan Tribal's ratings on February 28, 2012 as follows: Issuer level ratings upgraded: Corporate Family Rating to Caa1 from Caa3 Probability of Default Rating to Caa1/LD from Caa3 New issue rating assigned: 9.5% USD225 million first in second out term loan B due 2016 at B3 (LGD 3, 34%) Non-tendered issue ratings upgraded: USD66.4 million 8% senior subordinated notes (stub) due 2012 to Caa3 (LGD 6, 95%) from Ca (LGD 5, 85%) USD21.2 million 7.125% senior subordinated notes (stub) due 2014 (stub) to Caa3 (LGD 6, 95%) from Ca (LGD 5, 85%) USD9.7 million 6.875% senior subordinated notes (stub) due 2015 (stub) to Caa3 (LGD 6, 95%) from Ca (LGD 5, 85%) Non-tendered issue ratings downgraded: 11.5% USD0.2 million second lien notes (stub) due 2017 to Caa3 (LGD 5, 87%) from Ca (LGD 3, 30%) 6.125% USD15.8 million senior unsecured notes (stub) due 2013 to Caa3 (LGD 5, 87%) from Ca (LGD 3, 37%) Mohegan Tribal Gaming Authority owns and operates a gaming and entertainment complex located near Uncasville, Connecticut, known as Mohegan Sun, and a gaming and entertainment facility offering slot machines and harness racing in Plains Township, Pennsylvania, known as Mohegan Sun at Pocono Downs. MOMENTIVE SPECIALTY: Unit Issues $1.1 Billion Sr. Secured Notes --------------------------------------------------------------- Momentive Specialty Chemicals Inc. enters into the following agreements on Jan. 31, 2013. 1. First-Priority Supplemental Indenture and First-Priority Senior Secured Notes due 2020 Hexion U.S. Finance Corp., a wholly-owned subsidiary of Momentive Specialty Chemicals Inc., entered into a first supplemental indenture among the Issuer, the Registrant, the other subsidiaries of the Registrant party thereto and Wilmington Trust, National Association, as trustee, to an indenture, dated as of March 14, 2012, among the Issuer, the Registrant, the Subsidiary Guarantors and the Trustee, pursuant to which the Issuer issued $1,100,000,000 aggregate principal amount of First-Priority Senior Secured Notes due 2020, which mature on April 15, 2020. The Notes were offered as additional notes under the Indenture with substantially the same terms as all other outstanding notes under the Indenture, with interest accruing from Oct. 15, 2012. A copy of the Indenture is available for free at http://is.gd/f01jxp 2. Registration Rights Agreement In connection with the issuance of the Notes, the Issuer, the Registrant and the Subsidiary Guarantors entered into a registration rights agreement with J.P. Morgan Securities LLC, as representative of the initial purchasers, relating to, among other things, the exchange offer for the Notes and the related guarantees. Subject to the terms of the Registration Rights Agreement, the Issuer, the Registrant and the Subsidiary Guarantors will use their commercially reasonable efforts to register with the Securities and Exchange Commission notes having substantially identical terms as the Notes as part of offers to exchange freely tradable exchange notes for Notes within 365 days after the issue date of the Notes. The Issuer, the Registrant and the Subsidiary Guarantors will use their commercially reasonable efforts to cause the exchange offer to be consummated by the 30th day after the Effectiveness Target Date. A copy of the Registration Rights Agreement is available at http://is.gd/UNaOGv 3. Amended and Restated First/Second Lien Intercreditor Agreement The Registrant entered into an amended and restated intercreditor agreement among the Trustee on behalf of the holders of the Notes and the Existing Notes, JPMorgan Chase Bank, N.A., as Intercreditor Agent, Wilmington Trust Company, as trustee and collateral agent for the noteholders under the Second Secured Notes Indenture, Wilmington Trust, National Association, as senior priority agent for the holders of the 1.5 Lien Notes, Momentive Specialty Chemicals Holdings LLC, the Registrant, the Issuer and the Subsidiary Guarantors. The First/Second Lien Intercreditor Agreement governs the relative rights of the secured parties under the Notes, the Existing Notes, the Second-Priority Notes, and the 1.5 Lien Notes, and certain other matters relating to priority and the administration and enforcement of security interests. The First/Second Lien Intercreditor Agreement also makes certain other amendments and modifications resulting from the Registrant's entry into the Second-Priority Supplemental Indenture. A copy of the Intercreditor Agreement is available at: http://is.gd/1oiUnI 4. Additional Secured Party Consent The Trustee, as trustee and as Authorized Representative, JPMorgan Chase Bank, N.A., as Applicable First Lien Representative and collateral agent, the Registrant, Holdings, the Issuer and the subsidiaries of the Registrant identified therein entered into an Additional Secured Party Consent to the Third Amended and Restated Collateral Agreement, dated as of Jan. 29, 2010, among the Registrant, Holdings, the Issuer, the other subsidiaries of the Registrant party thereto and JPMorgan Chase Bank, N.A., as Applicable First Lien Representative. Pursuant to the Secured Party Consent, the Authorized Representative, representing holders of the Notes, has become a party to the Collateral Agreement on behalf of those holders and has appointed and authorized the Applicable First Lien Representative to act as collateral agent on behalf of the Authorized Representative and the holders of the Notes and to exercise various powers under the Collateral Agreement. A copy of the Additional Secured Party Consent is available for free at http://is.gd/A0rKSm 5. Second Joinder and Supplement to the 1.5 Lien Intercreditor Agreement The Trustee entered into a second joinder and supplement to the intercreditor agreement, dated as of Jan. 29, 2010, among JPMorgan Chase Bank, N.A., as intercreditor agent, Wilmington Trust, National Association (as successor by merger to Wilmington Trust FSB), as trustee and as collateral agent for the existing 8.875% senior secured notes due 2018. Pursuant to the Joinder to the 1.5 Lien Intercreditor Agreement, the Trustee agreed to act under the 1.5 Lien Intercreditor Agreement as senior-priority agent for the holders of the Notes as if it had originally been party to the 1.5 Lien Intercreditor Agreement as a senior-priority agent. The 1.5 Lien Intercreditor Agreement governs the relative priorities of the respective security interests in the Registrant's and certain subsidiaries' assets securing (i) the Notes and the Existing Notes, (ii) the 1.5 Lien Notes and (iii) the borrowings under the senior secured credit facilities of the Registrant, and certain other matters relating to the administration of security interests. A copy of the Second Joinder and Supplement is available at: http://is.gd/E1QYD4 6. Second-Priority Supplemental Indenture and Second-Priority Senior Secured Floating Rate Notes due 2014 The Registrant entered into a second supplemental indenture among the Issuer, Hexion Nova Scotia, the Registrant, the Subsidiary Guarantors and the Second-Priority Trustee, governing the Second- Priority Notes, to an indenture, dated as of Nov. 3, 2006, among the Second-Priority Issuers, the Registrant, the guarantors party thereto and the Second-Priority Trustee, in connection with the early settlement of the tender offer for the Second-Priority Senior Secured Floating Rate Notes due 2014. The Second-Priority Supplemental Indenture eliminates substantially all of the restrictive covenants and certain events of default in the Second- Priority Indenture and releases all of the collateral securing the Second-Priority Notes. About Momentive Specialty Momentive Specialty Chemicals, Inc., headquartered in Columbus, Ohio, is a leading producer of thermoset resins (epoxy, formaldehyde and acrylic). The company is also a supplier of specialty resins for inks and specialty coatings sold to a diverse customer base as well as a producer of commodities such as formaldehyde, bisphenol A, epichlorohydrin, versatic acid and related derivatives. Momentive Specialty reported net income of $118 million on $5.20 billion of net sales in 2011, compared with net income of $214 million on $4.59 billion of net sales in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.44 billion in total assets, $4.60 billion in total liabilities and a $1.16 billion total deficit. * * * Momentive Specialty carries a 'B-' issuer credit rating from Standard & Poor's Ratings Services. It has 'B3' corporate family and probability of default ratings from Moody's Investors Service. As reported in the Oct. 27, 2010 edition of TCR, Moody's Investors Service assigned a 'Caa1' rating to the guaranteed senior secured second lien notes due 2020 of Momentive Specialty (formerly known as Hexion Specialty Chemicals Inc.). Proceeds from the notes were allocated for the repayment of $533 million of guaranteed senior secured second lien notes due 2014. "With this refinancing Hexion will have refinanced or extended the maturities on the vast majority of the debt that was originally slated to mature prior to 2015. There is less than $600 million of this debt remaining, which should be much easier to for the company to refinance as its credit metrics improve further," stated John Rogers, Senior Vice President at Moody's. MORGANS HOTEL: MFS No Longer Owns Common Shares ----------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Massachusetts Financial Services Company disclosed that, as of Dec. 31, 2012, it does not beneficially own any shares of common stock of Morgans Hotel Group Co. MFS previously reported beneficial ownership of 1,762,663 common shares or a 5.7% equity stake as of Dec. 31, 2011. A copy of the amended filing is available at http://is.gd/uT7qNF About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company reported a net loss of $87.95 million in 2011, a net loss of $83.64 million in 2010, and a net loss of $101.60 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $577.02 million in total assets, $702.21 million in total liabilities, $6.39 million in redeemable noncontrolling interest, and a $131.58 million total deficit. NEW LEAF: Incurs $2.8 Million Net Loss in First Quarter ------------------------------------------------------- New Leaf Brands, Inc., filed this week its quarterly report on Form 10-Q disclosing a net loss of $2.76 million on $- of net sales for the three months ended March 31, 2012, as compared with a net loss of $1.61 million on $687,586 of net sales for the same period a year ago. The Company's balance sheet at March 31, 2012, showed $1.81 million in total assets, $4.90 million in total liabilities and a $3.08 million total stockholders' deficit. "The Company has a history of recurring losses from continuing operations, deficiencies in working capital and limited cash on hand as of March 31, 2012. To date, it has also been unable to generate sustainable cash flows from operating activities. In addition, the Company has $4,477,834 in current liabilities payable within the next twelve months including an obligation which is currently in default... For the three months ended March 31, 2012, the Company's loss from continuing operations was $2,760,073. As of March 31, 2012, the Company's cash and cash equivalents and working capital deficiency are $154,436 and $ 3,792,401) respectively. Collectively, these factors raise substantial doubt about the Company's ability to continue as a going concern." New Leaf was delayed in filing the Form 10-Q because the Company needed additional time to complete the review of its financial statements. A copy of the Form 10-Q is available for free at: http://is.gd/8T3CDS About New Leaf Old Tappan, N.J.-based New Leaf Brands, Inc., is a diversified beverage holding company acquiring brands, distributors and manufacturers within the beverage industry. EisnerAmper LLP, in New York City, expressed substantial doubt about New Leaf's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company has suffered recurring losses from operations, has a working capital deficiency, was not in compliance with certain financial covenants related to debt agreements, and has a significant amount of debt maturing in 2012. The Company reported a net loss of $6.68 million on $2.27 million of net sales for 2011, compared with a net loss of $9.13 million on $4.26 million of net sales for 2010. NEW LIGHT: Case Summary & 2 Unsecured Creditors ----------------------------------------------- Debtor: New Light Christian Center 1841 Parker Street Berkeley, CA 94703 Bankruptcy Case No.: 13-40757 Chapter 11 Petition Date: February 8, 2013 Court: U.S. Bankruptcy Court Northern District of California (Oakland) Judge: Roger L. Efremsky Debtor's Counsel: Marc Voisenat, Esq. LAW OFFICES OF MARC VOISENAT 1330 Broadway, #734 Oakland, CA 94612 Tel: (510) 272-9710 E-mail: voisenatecf@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its two largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/canb13-40757.pdf The petition was signed by Michael Hester, president. NEXSTAR BROADCASTING: ABRY Affiliates to Resell 3-Mil. Shares ------------------------------------------------------------- Nexstar Broadcasting Group, Inc., said that the funds affiliated with ABRY Partners, LLC, intend to offer 3 million shares of Class A common stock of the Company for sale in an underwritten offering. In addition, the selling stockholders have granted the underwriter a 30-day option to purchase up to an additional 450,000 shares of Class A common stock on the same terms and conditions. BofA Merrill Lynch is acting as sole underwriter of the offering. The offering consists entirely of secondary shares to be sold by the selling stockholders. The Company will not sell any shares in the offering and will not receive any proceeds from the offering. Closing of the offering is expected to occur on or about Feb. 12, 2013, subject to customary closing conditions. A shelf registration statement relating to the shares has been declared effective by the Securities and Exchange Commission. To Buys KSEE(TV) for 426.5MM Nexstar Broadcasting Group, Inc.'s wholly-owned indirect subsidiary, Nexstar Broadcasting, Inc., has entered into a definitive agreement to acquire the assets of KSEE(TV), the NBC affiliate serving the Fresno, California market, from Granite Broadcasting Corporation for $26.5 million in a transaction that is expected to be immediately accretive to Nexstar. Under the terms of the agreement, Nexstar acquired all of KSEE(TV)'s non-FCC license assets from Granite for $20 million and will file a license transfer application with the FCC. Upon FCC approval of the license transfer, Nexstar will pay Granite the remaining $6.5 million of the total purchase price. Nexstar has entered into a Time Brokerage Agreement with Granite whereby it will operate KSEE(TV) immediately, while awaiting FCC approval for the closing of the transaction. Commenting on the agreement, Nexstar Broadcasting Group President and Chief Executive Officer, Perry A. Sook said, "With our agreement last November to acquire KGPE-TV, the CBS affiliate serving the Fresno, California market, we are delighted to announce the acquisition of the market's NBC affiliate, KSEE. KSEE squarely meets our acquisition criteria as it further expands our revenue, scale and operating base, creates another duopoly market for Nexstar and is financially accretive." The proposed transaction will result in Nexstar operating one station or providing sales and other services to another station in 26 of the 41 markets where it operates (which assumes the completion of the acquisitions of five stations from Newport Television, LLC and Smith Broadcasting both of which were announced in November 2012). In addition, it will expand to 72 the number of stations and related digital signals that Nexstar either owns or provides sales and other services. Mr. Sook added, "Consistent with Nexstar's other recently announced acquisitions, the purchase price for KSEE is approximately 5.0 times the station's average 2012/2013 pro-forma cash flow. Under Nexstar's ownership, the station will realize additional retransmission revenues as well as synergistic operating improvements, and as a result, on a pro-forma basis the acquisition will be immediately accretive to results." Nexstar intends to finance the station acquisition with existing cash on hand. The license acquisition portion of the transaction is subject to FCC approval and other customary approvals and is expected to close mid-year 2013. "Granite has owned KSEE since 1993 and we have greatly valued the opportunity to serve the communities of California's Central Valley," said Peter Markham, CEO of Granite. "Fortunately, this transaction maximizes value at Granite and will pass on this great asset and a dedicated group of talented employees to a new owner also committed to broadcast excellence." Nielsen Media's 2012-2013 Local Market Estimates ranks Fresno, California as the 55th largest television market in the country. About Nexstar Broadcasting Group Irving, Texas-based Nexstar Broadcasting Group Inc. currently owns, operates, programs or provides sales and other services to 62 television stations in 34 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama, New York, Rhode Island, Utah and Florida. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX, MyNetworkTV and The CW and reaches approximately 13 million viewers or approximately 11.5% of all U.S. television households. The Company reported a net loss of $11.89 million in 2011, a net loss of $1.81 million in 2010, and a net loss of $12.61 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $611.35 million in total assets, $771.63 million in total liabilities and a $160.27 million total stockholders' deficit. * * * As reported by the TCR on Oct. 26, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Irving, Texas-based Nexstar Broadcasting Group Inc. and on certain subsidiaries to 'B+' from 'B'. "The rating action reflects our view that the stations that Nexstar will acquire from Newport will improve the company's business risk profile and that trailing-eight-quarter leverage will improve to 6x or less over the intermediate term," said Standard & Poor's credit analyst Daniel Haines. In the Oct. 26, 2012, edition of the TCR, Moody's Investors Service upgraded the corporate family and probability of default ratings of Nexstar Broadcasting, Inc. (Nexstar) to B2 from B3. The upgrade and positive outlook incorporate expectations for continued improvement in the credit profile resulting from both the transaction and Nexstar's operating performance. NICHOLAS A. CLEMENTE: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Nicholas A. Clemente, P.C. Two Logan Square 100 N. 18th Street, 12th Floor Philadelphia, PA 19109 Bankruptcy Case No.: 13-11166 Chapter 11 Petition Date: February 8, 2013 Court: U.S. Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Jean K. FitzSimon Debtor's Counsel: Michael J. Duffy, Esq. DUFFY LAW, LLC 1500 Market Street 12th Floor, East Tower Philadelphia, PA 19102 Tel: (856) 857 7379 E-mail: mduffy@mduffylaw.com Estimated Assets: $100,001 to $500,000 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 Nicholas A. Clemente, president. NORTEL NETWORKS: US Unit, Bondholders Want Trial By Fall -------------------------------------------------------- Peg Brickley, writing for Dow Jones Newswires, reports that U.S. investors are pushing to go to trial by the fall over how to divide Nortel Networks Corp.'s $7.3 billion pile of money, but officials looking out for Canadian and European creditors say the international cash clash could take much longer to sort out. The report relates Ernst & Young Inc., in its role as monitor of Nortel Canada's insolvency proceedings, listed 2 1/2 pages of issues that remain to be decided. "Based on the expected number and complexity of outstanding issues . . . it is submitted that efforts be made to prioritize and synthesize the issues prior to addressing a workable schedule to deal with them," the Canadian Nortel officials wrote. According to the report, U.S. bondholders, in contrast, said "too much time has passed in this case," with spending on lawyers and advisers topping $700 million and the meters still running. After three years in mediation, bondholders say, all the combatants know their positions, and eight days of trial in September ought to be enough time to wrap things up. The report says Nortel's U.S. arm is asking for an October trial date. The report notes Justice Geoffrey Morawetz in Toronto and Judge Kevin Gross in Wilmington, Del., will decide what issues will be addressed, when and how, before the sale proceeds are released from lockboxes. All told, there's about $10 billion sitting in Nortel's coffers, waiting to be handed out. According to the report, bondholders are looking for 100 cents on the dollar, plus interest over the four years of the bankruptcy, a reward they contend is justified by Nortel's solvency. Dow Jones says prices for Nortel's bonds dropped in recent weeks, after the failure of a third effort to mediate a peaceful end to the long-running fight over who should reap the rewards of bankruptcy auctions of the company's telecommunications businesses and its patent portfolio. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation and its various affiliated entities provided next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel did business in more than 150 countries around the world. Nortel Networks Limited was the principal direct operating subsidiary of Nortel Networks Corporation. On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent Nortel Networks Corporation, NNI's direct corporate parent Nortel Networks Limited and certain of their Canadian affiliates commenced a proceeding with the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (Canada) seeking relief from their creditors. Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. That same day, the Monitor sought recognition of the CCAA Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No. 09-10164) under Chapter 15 of the U.S. Bankruptcy Code. That same day, NNI and certain of its affiliated U.S. entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10138). In addition, the High Court of England and Wales placed 19 of NNI's European affiliates into administration under the control of individuals from Ernst & Young LLP. Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world. On May 28, 2009, at the request of administrators, the Commercial Court of Versailles, France, ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in U.S. Bankruptcy Court for recognition of the English Proceedings as foreign main proceedings under Chapter 15. U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors' general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The United States Trustee appointed an Official Committee of Unsecured Creditors in respect of the U.S. Debtors. An ad hoc group of bondholders also was organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. An Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Since the commencement of the various insolvency proceedings, Nortel has sold its business units and other assets to various purchasers. Nortel has collected roughly $9 billion for distribution to creditors. Of the total, $4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law NYTEX ENERGY: Has 5MM Shares Available Under Amended Equity Plan ---------------------------------------------------------------- The Board of Directors of NYTEX Energy Holdings, Inc., has adopted Amendment No. 1 to the 2013 Equity Incentive Plan. This Plan is intended to encourage ownership of NYTEX common stock by officers, employees, consultants, and directors of the Company and its affiliates and to provide additional incentive for them to promote the success of the Company's business. The Plan allows for the grant of equity based awards including non-statutory stock options, incentive stock options, stock appreciation rights, performance shares, performance units, restricted stock, restricted stock units, or any other type of award permitted under the Plan. Amendment No. 1 to the Plan adjusts the aggregate number of shares of NYTEX common stock reserved for issuance under the Plan from 20,000,000 shares to 5,000,000 shares. A copy of Amendment No. 1 to the Plan is available at http://is.gd/QQgbAM About NYTEX Energy Located in Dallas, Texas, Nytex Energy Holdings, Inc., is an energy holding company with operations centralized in two subsidiaries, Francis Drilling Fluids, Ltd. ("FDF") and NYTEX Petroleum, Inc. ("NYTEX Petroleum"). FDF is a 35 year old full- service provider of drilling, completion and specialized fluids and specialty additives; technical and environmental support services; industrial cleaning services; equipment rentals; and transportation, handling and storage of fluids and dry products for the oil and gas industry. NYTEX Petroleum, Inc., is an exploration and production company focusing on early stage development of minor oil and gas resource plays within the United States. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Whitley Penn LLP, in Dallas, Texas, expressed substantial doubt about Nytex Energy's ability to continue as a going concern. The independent auditors noted that the Company is not in compliance with certain loan covenants related to two debt agreements. The Company's balance sheet at Sept. 30, 2012, showed $11.59 million in total assets, $5.05 million in total liabilities and $6.54 million in total equity. ORAGENICS INC: Koski Family Discloses 45.4% Equity Stake -------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Koski Family Limited Partnership disclosed that, as of Oct. 23, 2012, they beneficially own 13,464,627 shares of common stock of Oragenics, Inc., representing 45.4% of the shares outstanding. Koski Family previously reported beneficial ownership of 13,438,465 common shares or a 45.7% equity stake as of July 31, 2012. A copy of the amended filing is available at: http://is.gd/lKEfrd About Oragenics Inc. Tampa, Fla.-based Oragenics, Inc. -- http://www.oragenics.com/-- is a biopharmaceutical company focused primarily on oral health products and novel antibiotics. Within oral health, Oragenics is developing its pharmaceutical product candidate, SMaRT Replacement Therapy, and also commercializing its oral probiotic product, ProBiora3. Within antibiotics, Oragenics is developing a pharmaceutical candidate, MU1140-S and intends to use its patented, novel organic chemistry platform to create additional antibiotics for therapeutic use. In its audit report on the Company's 2011 financial statements, Mayer Hoffman McCann P.C., in Clearwater, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses, negative operating cash flows and has an accumulated deficit. The Company reported a net loss of $7.67 million in 2011, compared with a net loss of $7.80 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $12.58 million in total assets, $1.75 million in total liabilities, all current, and $10.83 million in total shareholders' equity. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2011, that its loan agreement with the Koski Family Limited Partnership matures in three years and select material assets of the Company relating to or connected with its ProBiora3, SMaRT Replacement Therapy, MU1140 and LPT3-04 technologies have been pledged as collateral to secure the Company's borrowings under the Loan Agreement. This secured indebtedness could impede the Company from raising the additional equity or debt capital the Company needs to continue its operations even though the amount borrowed under the Loan Agreement automatically converts into equity upon a qualified equity financing of at least $5 million. The Company's ability to repay the loan will depend largely upon the Company's future operating performance and the Company cannot assure that its business will generate sufficient cash flow or that the Company will be able to raise the additional capital necessary to repay the loan. If the Company is unable to generate sufficient cash flow or are otherwise unable to raise the funds necessary to repay the loan when it becomes due, the KFLP could institute foreclosure proceedings against the Company's material intellectual property assets and the Company could be forced into bankruptcy or liquidation. PACIFIC THOMAS: Court Orders Appointment of Chapter 11 Trustee -------------------------------------------------------------- The Bankruptcy Court, having determined that the appointment of a trustee is in the best interests of the estate pursuant to 11 U.S.C. Sec. 1104(a) and (b), has directed the United States Trustee to appoint a Chapter 11 trustee in the Chapter 11 case of Pacific Thomas Corporation. During the period prior to the appointment of a Chapter 11 trustee, the Debtor is directed to collect rents and hold them in the appropriate debtor-in-possession accounts. Until such time, however, that the funds are turned over to a Chapter 11 trustee, the Debtor will make no disbursements from the DIP account. The Court had previously denied the motion of the Debtor for continued use of collateral and further ordered the Debtor to show cause, if there be any, why a Chapter 11 trustee should not be appointed. About Pacific Thomas Corp. Walnut Creek, California, Pacific Thomas Corporation filed a Chapter 11 petition (Bankr. N.D. Calif. Case No. 12-46534) in Oakland on Aug. 6, 2012, estimating in excess of $10 million in assets and liabilities. The Debtor is related to Pacific Thomas Capital, which specializes in real estate services, focusing on the investment, ownership and development of commercial real estate properties, according to http://www.pacificthomas.com/ Real estate activities has spanned throughout the Hawaiian Islands as well as U.S. West Coast locations in California, Nevada, Arizona and Utah. Hawaii based activities are managed under the name Thomas Capital Investments. Bankruptcy Judge M. Elaine Hammond presides over the case. Anne- Leith Matlock, Esq., at Matlock Law Group, P.C. The petition was signed by Jill V. Worsley, COO, secretary. In its schedules, the Debtor disclosed $19,960,679 in assets and $16,482,475 in liabilities as of the petition date. PARK-OHIO INDUSTRIES: S&P Affirms 'B' CCR; Outlook Positive ----------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its ratings, including the 'B' corporate credit rating, on Park-Ohio Industries Inc., a wholly owned subsidiary of Park Ohio Holdings Corp. (not rated). At the same time, S&P revised the outlook to positive from stable. "The outlook revision reflects Park-Ohio's improving operating performance and credit measures resulting from stability in most end markets," said Standard & Poor's credit analyst Sarah Wyeth. Despite its partially debt-funded 2012 acquisition of Fluid Routing Solutions Inc. (FRS), S&P expects the company to report leverage, measured by total debt to EBITDA, at the end of 2012 of about 4x, down from about 5x last year. Stable operating performance and a less aggressive financial policy could result in metrics remaining below 5x, a level that could support a higher rating. The ratings on Park-Ohio reflect the company's "highly leveraged" financial risk profile and its "weak" business risk profile as a diversified operator of logistics and manufacturing business serving cyclical and competitive end markets. Despite softness in some end markets, notably defense and steel, Park-Ohio is benefitting from stability in many of its other markets, such as rail, process improvement, and auto suppliers. S&P expects markets to modestly improve in 2013. S&P also expects the company to benefit from the higher margin business of FRS. S&P's forecast assumes: -- U.S. GDP grows by 2.3% in 2013. -- U.S. equipment investment grows by 10% in 2013, an improvement from the 7% we expected in 2012. -- Park-Ohio maintains a high-single-digit EBITDA margin, in line with recent performance. -- The company uses some if its free cash flow to reduce debt, resulting in leverage of less than 4x. S&P expects Park-Ohio to continue to operate in three business segments that serve a variety of end markets, including transportation, semiconductors, industrial equipment, agricultural equipment, construction equipment, and aerospace. The supply technologies segment, which generates about 43% of the company's sales, supplies production components via supply-chain management and wholesale distribution services. The engineered products segment (about 28% of sales, formerly known as manufactured products) designs and produces forged and machined products for specific customer applications. The assembly component segment (about 29% of sales, formerly known as aluminum products) engineers, casts, and manufactures various aluminum components for original equipment manufacturers, primarily in the auto industry. This segment includes results from FRS. Park-Ohio's credit quality results from the cyclical, competitive, and seasonal characteristics of its end markets. Auto and heavy- duty truck manufacturing accounted for 19% and 7% of net sales in 2011, respectively, a significant exposure to these highly cyclical markets. S&P believes outsourcing among U.S. manufacturers could provide further growth, though at a lower rate, in the long term. The company's weak business risk profile benefits from S&P's expectation of a continued broad product line, a relatively large and diverse customer base, and good geographic diversity--foreign sales represent about 24% of revenues. S&P expects generally stable end-market demand, coupled with the FRS acquisition, to contribute to modest improvements in the company's operating performance, which could result in EBITDA margin of about 9% in 2013, up from 8% in 2011. S&P views the company's management and governance to be "fair." As of Sept. 30, 2012, total debt to EBITDA was about 4.1x, and funds from operations to total debt was about 15%, better than S&P's expectations of 5x-6x and 10%, respectively. The ratings do not incorporate large debt-financed acquisitions. The outlook is positive. S&P believes Park-Ohio may maintain credit measures that are consistent with a one-notch higher rating. S&P could raise the ratings if the company maintains debt to EBITDA of 4x-5x in a stable operating environment. This could occur if stability in most industrial end markets offsets weakness in defense markets, resulting in modest topline growth, and the company maintains high-single-digit EBITDA margins. S&P could revise the outlook to stable if the company pursues debt-funded acquisitions that result in leverage greater than 5x or if the larger economy weakens, pressuring equipment spending. PATRIOT COAL: Wins OK for Bryan Cave as Local Counsel ----------------------------------------------------- The Bankruptcy Court authorized Patriot Coal Corp., et al., to employ Bryan Cave LLP as local restructuring and corporate counsel for the Debtors, effective as of Nov. 27, 2012. The Debtors' retention of Bryan Cave on corporate, benefits, and securities matters pursuant to the Order Authorizing the Debtors To Retain Ordinary Course Professionals, Nunc Pro Tunc to the Petition Date (Docket No. 263) will be modified to be a retention pursuant to Section 327(a) of the Bankruptcy Code, effective as of Dec. 1, 2012. Bryan Cave will provide these legal services: (a) advising the Debtor with respect to its rights and obligations as a debtor-in-possession and regarding other matters of bankruptcy law; (b) preparation and filing of any petitions, motions, applications, schedules, statements of financial affairs, plans of reorganization, disclosure statements, and other pleadings and documents that may be required in this case; (c) representation of the Debtor at hearings to consider plans of reorganization, disclosure statements, confirmation and related hearings, and any adjourned hearings thereof; (d) representation of the Debtor in adversary proceedings and other contested matters; (e) representation of the Debtor in connection with debtor-in- possession financing arrangements; (f) compliance with securities laws and corporate governance issues; and (g) any other matter that may arise in connection with the Debtor's reorganization proceedings and its business operations. The Debtors have agreed to compensate Bryan Cave for professional services at its normal and customary hourly rates, except that Lloyd Palans, Esq., has agreed that for purposes of these Chapter 11 cases, his hourly rate in 2013 will be $675, rather than his customary hourly rate of $895. Bryan Cave's hourly rates are: Partners and Counsel $370 - $820 Associates $210 - $465 Legal Assistants $155 - $260 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. PICCADILLY RESTAURANTS: Protiviti Okayed as Committee's Advisor --------------------------------------------------------------- The Official Committee of Unsecured Creditors of Piccadilly Restaurants, LLC, et al., sought and obtained approval from the U.S. Bankruptcy Court to retain Protiviti Inc. as financial advisor. The firm agreed to provide various services, including: (a) review and analysis of the Debtors' weekly financial and cash flow performance as compared to its budget; (b) review and analysis of Debtors' business segment and location- by-location analyses of profitability to determine profitable and unprofitable locations or business segments; (c) review of the Debtors' historical operating results, recent performance, business plan and associated restructuring initiatives and advise the Committee regarding the Debtors business plans, cash flow forecasts, financial projections, cash flow reporting, claims, and plan alternatives; (d) advising the Committee with respect to available capital restructuring relating to the current DIP facility and sale and financing alternatives, including providing options regarding potential courses of action and assisting with the design, structuring and negotiation of alternative restructuring and/or transaction structures; and (e) assisting the Committee in identifying and valuing undisclosed assets, if any and consult with the Debtors and their advisors on the progress of asset sales, locations, identification, and value. The current hourly rates of Protiviti professionals and paraprofessionals assigned to the Chapter 11 cases are: Professional Level Standard Billing Rates (hourly) ------------------ ------------------------------- Managing Directors $525 - $590 Directors and Associate Directors $375 - $465 Senior Managers and Managers $265 - $370 Senior Consultants and Consultants $150 - $275 Administrative $80 - $100 Notwithstanding these hourly rates, Protiviti has agreed that its fees will be a fixed fee amount of $25,000 for the months of November and December 2012 and $20,000 per month thereafter, which is a significant and substantial discount. Protiviti has advised the Committee that it will not seek reimbursement of any travel expenses. Michael Atkinson, managing director, attests that the firm is a "disinterested person" within the meaning of Sec. 101(14) of the Bankruptcy Code. About Piccadilly Restaurants 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. PINNACLE AIRLINES: Ryan Morris Discloses 4.7% Equity Stake ---------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Ryan J. Morris and his affiliates disclosed that, as of Jan. 28, 2013, they beneficially own 907,200 shares of common stock of Pinnacle Airlines Corp. representing 4.78% of the shares outstanding. A copy of the filing is available at: http://is.gd/E3ILHp 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. The U.S. Bankruptcy Court in New York will hold a hearing March 7 for approval of the explanatory disclosure statement in connection with the reorganization plan of Pinnacle Airlines Corp. POWER BALANCE: To Seek Approval of Plan Disclosures in March ------------------------------------------------------------ District Judge Edward M. Chen vacated an upcoming case management conference slated for Feb. 14 in the lawsuit, C.F.C., minor, by and through CHRISTINE F., his parent and guardian, on behalf of himself and all others similarly situated, Plaintiff, v. POWER BALANCE LLC; a Delaware Limited Liability Company, Defendants, Case No. 3:11-CV-00487-EMC (N.D. Calif.). The Plaintiff filed the request to vacate. According to the Plaintiff's counsel, the Plaintiff is informed by Garrick Hollander of the law firm Winthrop Couchot, counsel for Power Balance, which is in bankruptcy, that (1) Power Balance is currently preparing a Disclosure Statement; (2) a hearing regarding the Disclosure Statement is set for March 2013; and (3) a hearing regarding confirmation of the Debtor's Chapter 11 Plan of Reorganization is expected to take place in May or June 2013. The Plaintiff proposed that the case management conference be held after June 2013, which is the expected date for the hearing regarding Power Balance's Chapter 11 Plan. Attorneys for Plaintiff, C.F.C., a minor, by and through, Christine F., his parent and guardian, are: Mark N. Todzo, Esq. Howard Hirsch, Esq. LEXINGTON LAW GROUP San Francisco, CA E-mail: mtodzo@lexlawgroup.com - and - Christopher M. Burke, Esq. SCOTT + SCOTT LLP San Diego, CA E-mail: cburke@scott-scott.com A copy of the Court's Feb. 5 order is available at http://is.gd/EQJdWpfrom Leagle.com. About Power Balance Technologies Power Balance LLC filed for Chapter 11 (Bankr. C.D. Calif. Case No. 11-25982) on Nov. 18, 2011. Judge Theodor Albert presides over the case. Garrick A. Hollander, Esq., at Winthrop Couchot, serves as the Debtor's counsel. In its petition, Power Balance estimated $1 million to $10 million in assets and $10 million to $50 million in debts. The petition was signed by Henry G. Adamanym, Jr., chairman. Power Balance -- http://www.powerbalance.com-- is the creator of the original Power Balance Performance Technology(TM) silicone wristband and the leader in the market for Performance Technology sports accessories. The company is headquartered in Orange County, CA and distributes its products in the US and internationally in more than 40 countries. POWERWAVE TECHNOLOGIES: Hiring Approvals Sought ----------------------------------------------- BankruptcyData reported that Powerwave Technologies filed with the U.S. Bankruptcy Court motions to retain: -- Proskauer Rose (Contact: Mark K. Thomas) as counsel at the following hourly rates: partner at $550 to 1,200, senior counsel at 450 to 1,050, associate at 205 to 750 and paraprofessional at 100 to 315; -- Potter Anderson & Corroon (Contact: Jeremy W. Ryan) as co- counsel at the following hourly rates: partner at $440 to 720, counsel at 310 to 450, associate at 255 to 425, paralegal at 80 to 245; -- Kurtzman Carson Consultants (Contact: Albert Kass) as administrative agent; Sandler O'Neill & Partners (Contact: Timothy P. O'Connor) as investment banker for a monthly fee of $100,000 and a $1.5 million restructuring fee; and -- Conway MacKenzie (Contact: Timothy A. Turek) as financial advisor at the following (discounted) hourly rates: senior managing director at $795, managing director at 620, director at 475 and senior associate at 375. 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. QUANTUM FUEL: Hudson Bay Discloses 5.1% Equity Stake ---------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Hudson Bay Capital Management, L.P., and Sander Gerber disclosed that, as of Dec. 31, 2012, they beneficially own warrants to purchase up to 2,874,291 shares of common stock of Quantum Fuel Systems Technologies Worldwide, Inc., representing 5.14% of the shares outstanding. Hudson Bay previously reported beneficial ownership of 1,848,290 common shares and warrants to purchase up to 6,949,679 shares of common stock as of March 16, 2012. A copy of the filing is available for free at http://is.gd/TZm7X2 About Quantum Fuel Lake Forest, Calif.-based Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced vehicle propulsion systems, fuel storage technologies, and alternative fuel vehicles. Quantum's portfolio of technologies includes electronic and software controls, hybrid electric drive systems, natural gas and hydrogen storage and metering systems and other alternative fuel technologies and solutions that enable fuel efficient, low emission, natural gas, hybrid, plug-in hybrid electric and fuel cell vehicles. As reported in the TCR on March 30, 2012, Haskell & White LLP, in Irvine, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that Company incurred significant operating losses and used a significant amount of cash in operations during the eight months ended Dec. 31, 2011. The Company's balance sheet at Sept. 30, 2012, showed $65.6 million in total assets, $45.8 million, and stockholders' equity of $19.8 million. According to the Company's quarterly report for the period ended Sept. 30, 2012, the Company expects that its existing sources of liquidity will only be sufficient to fund its activities through Dec. 31, 2012. "In order for us to have sufficient capital to execute our business plan, fund our operations and meet our debt obligations over this twelve month period, we will need to raise additional capital and/or monetize certain assets. We are considering various cost-effective capital raising options and alternatives including the sale of Schneider Power and/or other assets, and the sale of equity and debt securities. Although we have been successful in the past in raising capital, we cannot provide any assurance that we will be successful in doing so in the future to the extent necessary to be able to fund all of our growth initiatives, operating activities and obligations through Sept. 30, 2013, which raises substantial doubt about our ability to continue as a going concern." QUANTUM CORP: Amends Credit Agreement with Wells Fargo ------------------------------------------------------ Quantum Corporation, on Jan. 31, 2013, entered into a Fourth Amendment to Credit Agreement and First Amendment to Security Agreement, among the Company, Wells Fargo Capital Finance LLC, as administrative agent and the Lenders, pursuant to which, among other amendments, the maximum principal amount of loans that is available to be borrowed under the Credit Agreement was amended to be the lesser of (x) $55,000,000 and (y) the amount of the borrowing base, which consists of a cash component, an account component and an inventory component. In addition, the financial covenants were amended to require that the Company maintain a Fixed Charge Coverage Ratio of at least 1.10 for the 12 month period ending on the last day of any fiscal quarter during which a financial covenant period is in effect. A financial covenant period commences on any date on which (a) Liquidity is less than $16,500,000 or (b) Pure Availability is less than $10,000,000, and will continue until the later of (x) the last day of the first full fiscal quarter after the date such period commenced and (y) the last day of the fiscal quarter in which, for a period of sixty consecutive days, (i) Liquidity is greater than or equal to $16,500,000 and (ii) Pure Availability is greater than or equal to $10,000,000. A copy of the Fourth Amendment is available for free at: http://is.gd/p9oidn About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com/-- is a storage company specializing in backup, recovery and archive. Quantum provides a comprehensive, integrated range of disk, tape, and software solutions supported by a world-class sales and service organization. The Company reported a net loss of $8.81 million for the fiscal year ended March 31, 2012, compared with net income of $4.54 million during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $377.94 million in total assets, $450.02 million in total liabilities and a $72.08 million stockholders' deficit. PROVIDENT ROYALTIES: Trustee Settles Creditor Suit Over Fees ------------------------------------------------------------ Linda Chiem of BankruptcyLaw360 reported that the trustee for defunct Provident Royalties LLC and brokerages that sold securities as part of Provident's alleged $485 million Ponzi scheme have settled a suit brought by creditors seeking to recoup $13.1 million in broker fees, according to a Texas federal court order Wednesday. Milo H. Segner Jr., trustee for PR Liquidating Trust and Summit Brokerage Services Inc., Wedbush Morgan Securities Inc. and DeWaay Financial Network LLC, went into court-ordered mediation in November over the disputed brokerage fees and whether they should be returned to creditors, the report related. About Provident Royalties Based in Dallas, Texas, Provident Royalties LLC owned working interests in oil and gas properties primarily in Oklahoma. Provident and its affiliates filed for Chapter 11 (Bankr. N.D. Tex. Case No. 09-33886) on June 22, 2009. Judge Harlin DeWayne Hale presides over the case. Epiq Bankruptcy Solutions, LLC is the claims and noticing agent. The United States Trustee for the Northern District of Texas appointed nine members to the Official Committee of Unsecured Creditors. On July 2, 2009, the Securities and Exchange Commission filed, under seal, a complaint with the District Court for the Northern District of Texas against the Debtors and certain of their principals and managing partners on allegations that they sold stock and limited partnership interest to over 7,700 investors as part of a $485 million Ponzi scheme. On July 2, 2009, the District Court appointed Dennis L. Roossien, Jr., at Munsch Hardt Kopf & Harr P.C. in Dallas, Texas, as receiver for the Debtors. On July 20, 2009, the Bankruptcy Court named Mr. Roossien, Jr., as the Debtors' Chapter 11 trustee. Mr. Roossien, Jr., hired Patton Boggs, LLP, as his special counsel. Patton Boggs, LLP, was Debtors' counsel before the appointment of Mr. Roossien, Jr., as Chapter 11 trustee. Mr. Roossien, Jr., also selected Munsch Hardt Koph & Harr, P.C., as counsel. Gardere, Wynne, Sewell, LLP represents the official committee of unsecured creditors. Rochelle McCullough, LLP represents the official investors committee. The Company, in its petition, estimated between $100 million and $500 million each in assets and debts. As reported in the Troubled Company Reporter on June 21, 2010, the Chapter 11 Trustee, the official committee of unsecured creditors and the official investors committee for Provident Royalties LLC and its affiliates obtained confirmation of their plan of liquidation. The Plan provides 100% return to all creditors on their claims with interest, and creates a liquidating trust to pursue claims against third parties for the benefit of holders of preferred stock interests. RADIOSHACK CORP: Walgreen Exec. Named Chief Executive Officer ------------------------------------------------------------- RadioShack Corp. announced that Joseph C. Magnacca, an experienced retail executive and merchant, has been appointed chief executive officer of the Company effective February 11. Mr. Magnacca has also been named a member of the RadioShack's Board of Directors. Mr. Magnacca, 50, is currently executive vice president and president of Daily Living Products and Solutions for Walgreen Co., where he oversees all of Walgreen's marketing and merchandising operations across more than 8,000 stores. He has also been responsible for the integration of the Duane Reade drugstore chain. He was president of Duane Reade at the time of its acquisition by Walgreens in 2010, and before that chief merchandising officer, undertaking the successful transformation of Duane Reade through the creation of an innovative urban operating model and customer experience. Mr. Magnacca's previous senior management experience includes merchandising and marketing roles at two of Canada's leading retail chains. He spent seven years as senior vice president at Shoppers Drug Mart, where he was instrumental in the Company's turnaround, and 15 years at Loblaw, where he began his career. In 2010, Joe was named Merchant of the Year for Drugstore Retailing by Chain Drug Review magazine. "Joe is a leader with significant experience in transforming iconic brand names into strong operating businesses," said Daniel R. Feehan, non-executive chairman of RadioShack. "We believe he will be a catalyst for change at RadioShack in refining our merchandising strategies, reinvigorating the shopping experience for our customers and building sustainable value for our shareholders." "I am delighted to join RadioShack and to be part of this team as we build upon the strengths of such a great brand. I see advantages in being a small box retailer in the consumer electronics space today, particularly with the broad retail footprint and convenience RadioShack offers its customers. I believe my experiences will help the team identify and execute on new opportunities that can return this great company to a position of prominence in the lexicon of American retailers," said Mr. Magnacca. In connection with Mr. Magnacca's appointment as CEO, the following sets forth Mr. Magnacca's base salary, sign-on bonus, stock option and restricted stock grant information. Base Salary $1,000,000 per year Sign-On Bonus $1,000,000 paid within 15 days of start date Restricted Stock 500,000 Stock Options 2,500,000 CFO to Get $1.5MM Bonus As previously reported in a Form 8-K filed on Oct. 5, 2012, on Sept. 26, 2012, the Board of Directors of the Company approved, among other items, a one-time cash retention bonus of $750,000 payable to Mr. Dorvin Lively, the Company's Executive Vice President and Chief Financial Officer. The retention bonus is payable to Mr. Lively on Oct. 1, 2013, provided Mr. Lively is employed by the Company at that time. On Feb. 6, 2013, the Management Development and Compensation Committee of the Board of Directors of the Company increased this one-time cash retention bonus from $750,000 to $1,500,000. All other terms and conditions regarding the one-time cash retention bonus remain unchanged. About Radioshack RadioShack sells consumer electronics and peripherals, including cellular phones. It operates roughly 4,700 stores in the U.S. and Mexico. It also operates about 1,500 wireless phone kiosks in Target stores. The company also generates sales through a network of 1,100 dealer outlets worldwide. Revenues for the last 12 months' period ending June 30, 2012, were roughly $4.4 billion. The Company's balance sheet at Sept. 30, 2012, showed $2.23 billion in total assets, $1.57 billion in total liabilities and $662.4 million in total stockholders' equity. * * * As reported by the TCR on Nov. 23, 2012, Standard & Poor's Ratings Services lowered its corporate credit and senior unsecured debt ratings on Fort Worth, Texas-based RadioShack Corp. to 'CCC+' from 'B-'. The outlook is negative. "The downgrade of RadioShack reflects our view that it will be very difficult for the company to improve its gross margin in the fourth quarter of this year, given the highly promotional nature of year-end holiday retailing in the wireless and consumer electronic categories," said Standard & Poor's credit analyst Jayne Ross. In the July 27, 2012, edition of the TCR, Fitch Ratings has downgraded its long-term Issuer Default Rating (IDR) for RadioShack Corporation to 'CCC' from 'B-'. The downgrade reflects the significant decline in RadioShack's profitability, which has become progressively more pronounced over the past four quarters. RADIAN GROUP: Mortgage Insurance Unit Adds Sales Professionals -------------------------------------------------------------- Radian Guaranty Inc., the mortgage insurance (MI) subsidiary of Radian Group Inc., on Feb. 7 announced the addition of three mortgage industry professionals to strengthen its sales team across the Midwest and in Tennessee. With more than 20 years of experience in the mortgage industry, Kevin Rice is based in Boise, Idaho and will serve as the senior account manager covering Idaho; Montana; Spokane, Washington; and Jackson, Wyoming. Mark Baker will serve as the senior account manager for Tennessee, a territory he has represented for close to a decade while employed by another private mortgage insurer. Jim Honeck, who will serve as a director of new business development for Radian, is responsible for developing new customer relationships in Illinois, Wisconsin, Minnesota, Iowa and Missouri. Mr. Honeck joins Radian with more than 22 years of experience in the private mortgage insurance industry. Prior to joining Radian, Mr. Rice was a training consultant for the sales organization at Wells Fargo Home Mortgage, although he spent the majority of his 20 year career working in both the retail and wholesale channels for well-known lenders including Clearpoint Funding, Wells Fargo Home Mortgage and Caliber Funding, LLC. Having spent much of his career serving the Tennessee area, Baker will pick up where he left off by nurturing current customer relationships in this state for Radian. Before joining Radian, Mr. Honeck was employed by another private mortgage insurer, where he maintained number one market share in his territory for more than 12 years. Mr. Honeck is a member of the Wisconsin Mortgage Bankers Association and has served as Director of the Northeast Chapter. "Radian is excited to expand our sales team by adding these seasoned professionals to our roster . . . who together bring 60+ years of experience in the mortgage and mortgage insurance industries to our all-star team," stated Brien McMahon, Radian's chief franchise officer. "In a market that is still challenging for many, we are very proud of our success over the last year, where we close to doubled our NIW goal in 2012. We owe our success to our many loyal lending partners, and it feels great to expand our team to serve them even better than we do today!" About Radian Group Headquartered in Philadelphia, Radian Group Inc. -- http://www.radian.biz-- provides private mortgage insurance and related risk mitigation products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty Inc. These services help promote and preserve homeownership opportunities for homebuyers, while protecting lenders from default-related losses on residential first mortgages and facilitating the sale of low-downpayment mortgages in the secondary market. * * * As reported by the Troubled Company Reporter on Oct. 17, 2012, Standard & Poor's Rating Services raised its long-term issuer credit ratings on Radian Group Inc. (RDN) to 'CCC+' from 'CCC-' and MGIC Investment Corp. (MTG) to 'CCC+' from 'CCC'. The financial strength ratings for both RDN's and MTG's respective operating companies are unchanged. The outlook on both companies is negative. "The outlook for each company is negative, reflecting the continuing risk of significant adverse reserve development; the current trajectory of operating performance; and the expected impact ongoing losses will have on their capital positions," S&P said in October 2012. "We expect operating performance to deteriorate for the rest of the year for both companies, reflecting the affect of normal adverse seasonality on new notices of delinquency and cure rates, and the lack of greater improvement in the job markets." RESIDENTIAL CAPITAL: Examiner's Prebankruptcy Report Delayed Again ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a lawyer for Arthur J. Gonzalez, the former bankruptcy judge serving as examiner for Residential Capital LLC, told the court that the investigation won't be completed and the report filed until early May, about a month late. According to Bloomberg News, the examiner received about 2 million pages of documents in late January and early this month, lawyer Howard Seife told U.S. Bankruptcy Judge Martin Glenn. Consequently, it won't be feasible to file the report by the current target in early April. The delay was the second for the ResCap examiner's report, Bloomberg News notes. Originally, the report was to be due early this month. Bloomberg recounts that Judge Gonzalez was appointed in July to investigate Ally Financial Inc. and Cerberus Capital Management LP, ResCap's proposed sale and reorganization plan, the role of ResCap's board, alternatives to ResCap's proposals, claims against officers and directors, claims ResCap proposes to release, and the value of the releases. ResCap is Ally's mortgage-servicing subsidiary. When Judge Gonzalez sought the first extension for completing the report, he said the delay meant the report would be more costly. Originally, he estimated the investigation would cost $29 million to $36 million. Jonathan Randles of BankruptcyLaw360 reports that Gonzalez said his team will need more time to complete the report after receiving about 2 million more documents than it had expected at the end of January, 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 ). RG STEEL: Wants to Sell Louisville Property for $400,000 Cash ------------------------------------------------------------- Debtor RG Steel Wheeling, LLC, seeks Bankruptcy Court authorization to sell its real estate located in Louisville, Kentucky to World Class Corrugating LLC for $400,000 in cash, including a $75,000 cash payment from the buyer for its right to access the Louisville Property prior to the purchase. The $75,000 cash payment will be applied to the purchase price in the event the motion is granted and the sale of the Louisville Property closes by the applicable deadline. According to papers filed with the Court, the Debtors ceased operations at the Louisville Property and terminated their employees at this location in the summer of 2012, and subsequently sold certain equipment, inventory, and other personal property that had been located in or used at the Louisville location both prior to the Petition Date and subsequent to the Petition Date. Any liens or security interests that do exist on the Louisville Property, including those of the Debtors' second-lien and third- lien secured lenders, will attach to the proceeds of the Louisville Property. Moreover, the Debtors propose that the absence of objection by any purported lienholders or other holders of in rem claims against the Louisville Property to this Motion should be deemed "consent" to the sale of the Louisville Property free and clear of their liens or claims within the meaning of the Bankruptcy Code. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. RHYTHM & HUES: Animator Files Ch.11 After Planned Sale Breaks Down ------------------------------------------------------------------ David S. Cohen, writing for Variety.com, reports that visual effects company Rhythm & Hues was slated to file for Chapter 11 bankruptcy in Los Angeles Monday night. According to Variety, Prime Focus, the India-based visual effects and 3D conversion company, had hoped to buy Rhythm & Hues, but negotiations broke down after Prime Focus was unable to assemble the necessary financing. According to the report, on Sunday, even as the BAFTA awards were being handed out in London, R&H began calling its employees and clients to inform them of the bankruptcy. Numerous R&H employees were told Sunday they should not report on Monday because their jobs had been terminated. The Variety report relates that, following a company-wide meeting on Monday, Lee Berger, president of R&H's film division, told Variety that R&H would formally file bankruptcy papers Monday night. "We hope to be in front of a bankruptcy court by Wednesday," Mr. Berger said. "In the meantime, we're still open on the shows that are inhouse. We've got commitments from the studios we're working for for financing." According to a report by Deadline.com Monday afternoon, Mr. Berger issued this statement: "Tonight R&H is filing for Chapter 11 reorganization in the U.S. Bankruptcy Court and hope to be in front of a Bankruptcy judge in the next couple days. In the meantime, all of our offices remain open, our clients are aware of the process; we have obtained commitments for financing to complete projects in house at the quality level the studios have come to expect. Following the filing, R+H will be seeking to secure financing for future growth. I believe that we are going to come out of this situation stronger, more efficient, and as prolific as we are now." According to the Variety report, Fox and Universal are believed to have put up those funds to ensure completion on Fox's next "Percy Jackson" pic and U's "R.I.P.D." Warner Bros. has three projects at R&H, "300: Battle of Artemesia," "The Seventh Son" and "Category 6," and will evaluate how to proceed on a case-by-case basis. Variety notes Lionsgate pulled its work for "The Hunger Games: Catching Fire" when R&H got into financial trouble and before the company decided to declare bankruptcy. The Variety report says R&H is hoping for fast exit from bankruptcy. Variety relates R&H's big release for 2012, "Life of Pi," had won four Visual Effects Society Awards, including the organization's equivalent of best picture and won the BAFTA for visual effects. R&H is famed for its creatures and animals and created the digital animals on "Life of Pi" and "Snow White and the Huntsman," both up for the vfx Oscar. According to the Variety report, Bob Baradaran, a partner at Greenberg Glusker, serves as R&H's outside general counsel. He told Variety: "Going forward, (R&H is) going to proceed with the projects we currently have in the pipeline, completing them on time and at high quality. While that is proceeding, we will be actively negotiating with potential third parties who have shown an interest in investing in or acquiring the company to assure its long-term viability." RITE AID: To Amend and Restate Revolving Credit Facility -------------------------------------------------------- Rite Aid Corporation provided an update on its previously announced debt refinancing transactions that would extend the maturity of a portion of its outstanding indebtedness and lower interest expense. The refinancing transactions are now expected to include: * the amendment and restatement of Rite Aid's existing revolving credit facility; * the refinancing of Rite Aid's $1.039 billion Tranche 2 Term Loan due 2014 and a cash tender offer for Rite Aid's $410.0 million aggregate principal amount of 9.750% Senior Secured Notes due 2016 with the proceeds of a new $1.125 billion first lien term loan, together with borrowings under the amended revolving credit facility. Rite Aid has currently received signed commitments for a $1.5 billion revolving credit facility. To the extent that Rite Aid receives additional commitments for the revolving credit facility, these proceeds will be used to prepay a portion of its $331.7 million Tranche 5 Term Loan due 2018; * a cash tender offer for Rite Aid's $470.0 million aggregate principal amount of 10.375% Senior Secured Notes due 2016 with the proceeds from a new $470 million second lien term loan,together with borrowings under the amended revolving credit facility ; and * a cash tender offer for Rite Aid's $180.3 million aggregate principal amount of 6.875% Senior Debentures due 2013 with available cash. These refinancing transactions are subject to customary terms and conditions. Rite Aid's results of operations and guidance will likely be impacted by fees, expenses and charges related to the refinancing transactions. Rite Aid intends to redeem any 9.750% Notes and 10.375% Notes not tendered in the tender offers and related consent solicitations. Rite Aid intends to satisfy and discharge any 6.875% Debentures that remain outstanding after the tender offer and consent solicitation. Holders of untendered 6.875% Debentures that are satisfied and discharged will continue to receive regular interest payments and repayment of their 6.875% Debentures will be made at maturity on Aug. 15, 2013. About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, is one of the nation's leading drugstore chains with 4,626 stores in 31 states and the District of Columbia and fiscal 2012 annual revenues of $26.1 billion. Rite Aid reported a net loss of $368.57 million for the fiscal year ended March 3, 2012, a net loss of $555.42 million for the year ended Feb. 26, 2011, and a net loss of $506.67 million for the year ended Feb. 27, 2010. * * * As reported by the TCR on Feb. 7, 2013, 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 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. Rite Aid carries a 'B-' corporate credit rating from Standard & Poor's Ratings Services. ROCK ENERGY: Taps Andrew Gaudielle to Evaluate Red Arrow Mine ------------------------------------------------------------- Rock Energy Resources, Inc., has engaged Andrew Gaudielle, a mining engineer, as a consultant, to coordinate with the mining engineering firm, SRK Consulting, to update the evaluation of existing resources and operations at the Red Arrow Mine in Mancos, Colorado. The Company will pay Mr. Gaudielle a stock grant of 100,000 restricted common shares and expenses. On Jan. 30, 2013, Rocky V. Emery, the Chairman of the Board of Directors and Chief Executive Officer of Company resigned from these positions, citing personal health reasons. Mr. Emery's resignation was not the result of any disagreement over Company's operations, policies or practices. About Rock Energy Houston-based Rock Energy Resources, Inc., an independent oil and natural gas company, explores, develops, and produces natural gas and crude oil properties in the United States. Rock Energy reported a net loss of $8.02 million for the nine months ended Sept. 30, 2012, compared with a net loss of$729,493 for the same period during the prior year. The Company's balance sheet at Sept. 30, 2012, showed $5.60 million in total assets, $12.89 million in total liabilities and a $7.28 million total stockholders' deficit. ROTECH HEALTHCARE: Robeco No Longer Owns Common Shares ------------------------------------------------------ In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Robeco Investment Management, Inc., disclosed that, as of Dec. 31, 2012, it does not beneficially own any shares of common stock of Rotech Healthcare Inc. Robeco Investment previously reported beneficial ownership of 1,343,256 common shares or a 5.19% equity stake as of Dec. 31, 2011. A copy of the amended filing is available for free at http://is.gd/1H4aj9 About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities and a $346.22 million total stockholders' deficiency. Bankruptcy Warning "In the event that we lack the ability to generate adequate cash to support our ongoing operations, we may need to access the financial markets by seeking additional debt or equity financing. As disclosed in our Risk Factors, there may be uncertainty surrounding our ability to access capital in the marketplace. The Company may be unable to secure the $15.0 million in additional financing permitted to it under the Indentures for our Senior Secured Notes and our Senior Second Lien Notes or to refinance its indebtedness on commercially reasonable terms, in which case it would need to identify alternative options to address its current and prospective credit situation, such as a sale of the Company or other strategic transaction, or a transformative transaction, such as a possible restructuring or reorganization of the Company's operations which could include filing for bankruptcy protection," the Company said in its quarterly report for the period ended Sept. 30, 2012. * * * As reported by the TCR on Aug. 21, 2012, Standard & Poor's Ratings Services lowered its rating on Orlando, Fla.-based Rotech Healthcare Inc. to 'CCC-' from 'B'. "The ratings reflect Rotech's highly leveraged financial risk profile, dominated by its weak liquidity position, high debt burden and overall sensitivity of credit metrics to the uncertain reimbursement environment," said Standard & Poor's credit analyst Tahira Wright. In the Aug. 30, 2012, edition of the TCR, Moody's Investors Service downgraded Rotech Healthcare, Inc.'s Corporate Family Rating to Caa3 from B3 and Probability of Default Rating to Caa3 from B2. This rating action is based on Moody's expectation that Rotech's liquidity and credit metrics -- which are already weak -- will deteriorate further over the next few quarters. Moody's expects continued top-line pressure from Medicare reimbursement cuts in 2013. SAN BERNARDINO: Small Municipal Union Aims for Big Ruling --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a union representing 54 midlevel city managers in San Bernardino, California, is trying to make law that would govern any other California cities filing for Chapter 9 municipal bankruptcy. According to the report, the San Bernardino Public Employees Association contends in papers filed Feb. 8 in U.S. Bankruptcy Court in Riverside, California, that the city in substance has refused to negotiate, thus violating state law governing city workers. The association, the report relates, wants U.S. Bankruptcy Judge Meredith Jury to rule at a March 6 hearing that it can sue the city in state court to enforce state municipal employee labor law. The association claims it's not trying to force the city to pay anything. It only wants a declaration of rights and a court order that the city must turn over financial information. Strapped for cash, the city said it had no alternative aside from halting payments to the California Public Employees' Retirement System. Otherwise, there wouldn't be enough cash to cover city workers' salaries for essential services. The city and the state pension system are in litigation over whether payments must resume. A victory by the pension system would establish a precedent saying that municipal workers' pensions can escape unscathed in bankruptcy, forcing bondholders and other creditors to sustain all losses. About San Bernardino San Bernardino, California, filed an emergency petition for municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 12-28006) on Aug. 1, 2012. San Bernardino, a city of about 210,000 residents roughly 65 miles (104 km) east of Los Angeles, estimated assets and debts of more than $1 billion in the bare-bones bankruptcy petition. The city council voted on July 10, 2012, to file for bankruptcy. The move lets San Bernardino bypass state-required mediation with creditors and proceed directly to U.S. Bankruptcy Court. The city is represented that Paul R. Glassman, Esq., at Stradling Yocca Carlson & Rauth. San Bernardino joined two other California cities in bankruptcy: Stockton, an agricultural center of 292,000 east of San Francisco, and Mammoth Lakes, a mountain resort town of 8,200 south of Yosemite National Park. SAN DIEGO HOSPICE: U.S. Trustee to Name Health Care Ombudsman ------------------------------------------------------------- The U.S. Bankruptcy Court has directed the United States Trustee to appoint a patient care ombudsman in the Chapter 11 case of San Diego Hospice & Palliative Care Corporation. 11 U.S.C. Section 333(a) requires the court to direct the U.S. Trustee to appoint patient care ombudsman. According to the Court, it appears from the Court records of the within case that a patient care ombudsman should be appointed; unless on motion of the U.S. Trustee or a party-in-interest filed not later than 21 days after the commencement of the case, finds that the appointment of a patient care ombudsman is not necessary for the protection of patients under the specific circumstances of the case pursuant to Fed.R.Bankr.P Rule 2002.2(a). A status conference is scheduled for March 14, 2013, at 11:00 a.m. before Judge Margaret M. Mann. About San Diego Hospice San Diego Hospice & Palliative Care Corporation filed a Chapter 11 petition (Bankr. S.D. Calif. Case No. 13-01179) in San Diego on Feb. 4,, 2013, estimating total assets and liabilities of at least $10 million. The Debtor is the operator of the San Diego Hospice and The Institute for Palliative Medicine, one of the largest community- owned, not-for-profit hospices in the country. Even before the bankruptcy filing, the Debtor has been under a federal investigation, focusing whether it allowed patients to stay in the program even when their diagnosis changed. The Debtor said that it will meet with government agencies to address their concerns, explore partnerships with other health care organizations, and work to restructure and resize San Diego Hospice. The Debtor said it has encouraged Scripps Health, the region's largest provider of health care services, to enter the hospice business. Procopio, Cory, Hargreaves & Savitch LLP serves as counsel to the Debtor. SAN DIEGO HOSPICE: Section 341(a) Meeting Scheduled for March 13 ---------------------------------------------------------------- A meeting of creditors in the bankruptcy case of San Diego Hospice & Palliative Care Corporation will be held on March 13, 2013, at 10:00 a.m. at 402 W. Broadway, Emerald Plaza Building, Suite 660 (B), Hearing Room B, San Diego, CA 92101. 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 San Diego Hospice San Diego Hospice & Palliative Care Corporation filed a Chapter 11 petition (Bankr. S.D. Calif. Case No. 13-01179) in San Diego on Feb. 4,, 2013, estimating total assets and liabilities of at least $10 million. The Debtor is the operator of the San Diego Hospice and The Institute for Palliative Medicine, one of the largest community- owned, not-for-profit hospices in the country. Even before the bankruptcy filing, the Debtor has been under a federal investigation, focusing whether it allowed patients to stay in the program even when their diagnosis changed. The Debtor said that it will meet with government agencies to address their concerns, explore partnerships with other health care organizations, and work to restructure and resize San Diego Hospice. The Debtor said it has encouraged Scripps Health, the region's largest provider of health care services, to enter the hospice business. Procopio, Cory, Hargreaves & Savitch LLP serves as counsel to the Debtor. SANUWAVE HEALTH: Prudential Financial Ceases to Hold 5% Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Prudential Financial, Inc., disclosed that, as of Dec. 31, 2012, it has ceased to be deemed the beneficial owner of more than 5% of the outstanding Common Stock of SANUWAVE Health, Inc. A copy of the filing is available for free at: http://is.gd/rfGQi1 About SANUWAVE Health Alpharetta, Ga.-based SANUWAVE Health, Inc., is an emerging global regenerative medicine company focused on the development and commercialization of noninvasive, biological response activating devices for the repair and regeneration of tissue, musculoskeletal and vascular structures. BDO USA, LLP, in Atlanta, Georgia, expressed substantial doubt about SANUWAVE's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and is economically dependent upon future issuances of equity or other financing to fund ongoing operations. For the nine months ended Sept. 30, 2012, the Company reported a net loss of $4.70 million on $627,153 of revenue, compared with a net loss of $7.82 million on $577,180 of revenue for the same period a year ago. The Company's balance sheet at Sept. 30, 2012, showed $2.28 million in total assets, $7.80 million in total liabilities and a $5.52 million total stockholders' deficit. Bankruptcy Warning "The continuation of our business is dependent upon raising additional capital. We expect to devote substantial resources to continue our research and development efforts, including clinical trials. Because of the significant time it will take for our products to complete the clinical trial process, and for us to obtain approval from regulatory authorities and successfully commercialize our products, we will require substantial additional capital. We incurred a net loss of $4,707,212 for the nine months ended September 30, 2012 and a net loss of $10,238,797 for the year ended December 31, 2011. These operating losses create uncertainty about our ability to continue as a going concern. As of September 30, 2012, we had cash and cash equivalents of $361,263. We are working with select accredited investors to raise up to $1.25 million in capital in a private placement. The accredited investors will receive a convertible promissory note that will convert, at the Company?s option, at the completion of a larger funding which is expected to close no later than the first quarter of 2013. If these efforts are unsuccessful, we may be forced to seek relief through a filing under the U.S. Bankruptcy Code," the Company said in its quarterly report for the period ended Sept. 30, 2012. SCHUTJER BOGAR: Harrisburg Firm Said To Be Nearing Bankruptcy ------------------------------------------------------------- Zack Needles, writing for The Legal Intelligencer, reports that Harrisburg, Pa.-based firm Schutjer Bogar spent a year expanding across the country to meet the needs of a single client, but now that relationship has soured and the firm's principals say the resulting loss of revenue has put the firm on the brink of bankruptcy and possible dissolution. On the Net: http://schutjerbogar.com/ SCITOR CORP: Good Market Position Prompts Moody's to Keep B2 CFR ---------------------------------------------------------------- Moody's Investors Service has affirmed the ratings of Scitor Corporation, including the Corporate Family Rating of B2. Concurrently, the B2 rating on Scitor's USD305 million first lien credit facility has been affirmed. The rating outlook is stable. Ratings: Corporate Family, affirmed at B2 Probability of Default, affirmed at B2-PD USD30 million first lien revolver due February 2016, affirmed at B2, LGD3, to 47% from 46% USD275 million first lien term loan due February 2017, affirmed at B2, LGD3, to 47% from 46% Outlook, Stable Ratings Rationale The B2 Corporate Family Rating reflects high financial leverage and an aggressive financial policy against a favorable prime position within an intelligence services contracting niche. The company's niche should continue seeing reasonably steady demand despite fiscal austerity ahead. Scitor's good market position offers protection against a federal contracting environment that is expected to continue being pressured over the next few years. The company's highly cleared and credentialed workforce provide a scientific and technical expertise that classified agencies will likely continue requiring and will continue to procure commercially. Programs that improve the effectiveness of reconnaissance and surveillance investments -- a historical area of focus by the company -- should experience resilient funding despite fiscal austerity. Budget pressures may however lower margins across the contracting industry. Scitor's cost base reductions of the past two years anticipated the tightening procurement trend and should support bidding prospects. However Scitor's margins will likely decline in coming years as its contract portfolio gets re-competed and the profit margin earned on contracts entered in headier times (particularly on the company's fixed price and time/materials based work) declines. Scitor's cost base reductions also protect against the loss of market share. High financial leverage and an aggressive financial policy factor into the B2 CFR. Scitor has historically undertaken a leveraged dividend transaction as its leverage metrics moderated. Pro forma for the exchange of preferred into common stock that occurred in January 2013, debt to EBITDA declined to the low 5x range (Moody's adjusted basis, FY2012), from the mid-7x level that followed the company's last dividend payment of Q2-FY2011. The leverage ratio improvement stems mainly from conversion of preferred to common stock and to a lesser extent from debt prepaid; EBITDA on a Moody's adjusted basis slightly declined over FY2012. The B2 CFR also considers risks stemming from revenue concentration. Loss of a key contract would lower the revenue base. Further, Scitor's high degree of specialization has won it a number of, what are typically lucrative, sole-source contracts. With procurement reforms taking hold, justification for sole source awards will become more challenging for federal purchasing managers. While its market position seems good, a portion of the company's sole source work could transition to more competitive procurement formats and potential for revenue volatility will accompany the transition. Revenues declined about 7% in FY2012 but the earnings impact was muted, in part because revenues from subcontractors, on which the company earns minimal income, comprised the bulk of the sales drop off. Moody's anticipates the ability to replace subcontracted with direct labor will probably diminish over time. The rating outlook is stable. Free cash flow in the USD20 million to USD30 million range (FCF/debt of about 5%) over the near term seems achievable and would raise the USD57 million of unrestricted cash that existed at September 30, 2012. The cash balance provides liquidity in excess of the USD30 million revolver commitment, favorable in light of the sequestration threat. Although the revolver size is rather small, there are no near-term scheduled debt amortizations and covenant headroom should remain good. The stable rating outlook recognizes potential that, over the intermediate-term, a leveraged dividend transaction could be sought by the company's ownership, which would weaken credit metrics, but to levels likely still compatible with the rating. Upward rating movement would depend upon expectation of debt to EBITDA sustained at 4x or below and free cash flow to debt of 10% or higher. Downward rating movement would depend on expectation of debt to EBITDA above 6x, weakening liquidity, or a lack of free cash flow. Scitor Corporation is a provider of engineering, management consulting and information services for highly classified programs to the U.S. intelligence community. Revenues in FY2012 were approximately USD540 million. The company is majority-owned by Leonard Green & Partners. The principal methodology used in this rating was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SEALY CORP: Hudson Bay Discloses 9.6% Equity Stake -------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Hudson Bay Capital Management, L.P., and Sander Gerber disclosed that, as of Dec. 31, 2012, they beneficially own 343,763 shares of 8% Convertible Preferred Stock due July 15, 2016, convertible into 11,307,396 shares of common stock of Sealy Corporation representing 9.67% of the shares outstanding. A copy of the filing is available at: http://is.gd/OEa7HG About Sealy Corp. Trinity, North Carolina-based Sealy Corp. (NYSE: ZZ) -- http://www.sealy.com/-- is the largest bedding manufacturer in the world with sales of $1.5 billion in fiscal 2008. The Company manufactures and markets a broad range of mattresses and foundations under the Sealy(R), Sealy Posturepedic(R), including SpringFree(TM), PurEmbrace(TM) and TrueForm(R); Stearns & Foster(R), and Bassett(R) brands. Sealy operates 25 plants in North America, and has the largest market share and highest consumer awareness of any bedding brand on the continent. In the United States, Sealy sells its products to approximately 3,000 customers with more than 7,000 retail outlets. Sealy Corporation incurred a net loss of $1.17 million for the 12 months ended Dec. 2, 2012, a net loss of $9.88 million for the 12 months ended Nov. 27, 2011, and a net loss of $13.73 million for the 12 months ended Nov. 28, 2010. The Company's balance sheet at Dec. 2, 2012, showed $1 billion in total assets, $1.05 billion in total liabilities, $11.03 million in redeemable noncontrolling interest, and a $57.52 million stockholders' deficit. * * * Sealy carries 'B' local and issuer credit ratings, with stable outlook, from Standard & Poor's. SECUREALERT INC: Inks Settlement Agreement with Borinquen --------------------------------------------------------- SecureAlert, Inc., entered into a "Settlement Agreement and Royalty and Share Buy Back" with Borinquen Container Corporation, a shareholder of the Company and Sapinda Asia Limited. As of the date of the Agreement, both Borinquen and Sapinda Asia were beneficial owners of more than 10% of the Company's issued and outstanding voting securities. The Agreement concludes a transaction originally agreed upon pursuant to a "Royalty and Stock Purchase Agreement" entered into by the Company, Borinquen and Tetra House Pte Ltd., on Sept. 5, 2012. The Company filed a Current Report on Form 8-K on Sept. 11, 2012, reporting entry into the Royalty Purchase Agreement. Under the Royalty Purchase Agreement, the Company agreed to purchase from Borinquen a royalty granted by the Company to Borinquen under a "Royalty Agreement" dated July 1, 2011, which required the Company to pay Borinquen a royalty of 20% of the Company's net revenues from a territory comprising Spain, Portugal, and the Spanish-speaking countries of Central and South America and the Caribbean. The Company filed a Current Report on Form 8-K to report the entry into the Royalty Agreement on Aug. 10, 2011. Under the terms of the Royalty Agreement the Registrant had the option to buy back the Royalty by Sept. 30, 2012. The Royalty Purchase Agreement was intended by the Registrant to effect the exercise of the repurchase right contained in the Royalty Agreement. The purchase price for the Royalty under the Royalty Purchase Agreement was agreed to be $13,100,000, payable in two installments: (1) $6,000,000 on or before Sept. 17, 2012, and (2) $7,100,000 on or before Nov. 16, 2012. In addition, THP was granted the right to purchase from Borinquen all shares of common and preferred stock of the Company beneficially owned by Borinquen at a price not to exceed $0.025 per share. Funds for the purchase were to be made available to the Company under a Loan and Security Agreement entered into on Aug. 19, 2012, by the Company and Sapinda Asia. The Company filed a Current Report on Form 8-K to report this transaction on Aug. 25, 2012. Sapinda Asia failed to fund the Loan and Security Agreement in an amount sufficient to meet the deadlines for the payments to Borinquen under the Royalty Purchase Agreement. Borinquen extended the deadline for payment under the Royalty Purchase Agreement to Oct. 19, 2012. The deadline was subsequently extended again, first to Nov. 17, 2012, and then to Dec. 19, 2012. Borinquen terminated the Royalty Purchase Agreement on December 26, 2012 after the Registrant failed to make the full payments required by the agreement. On Feb. 1, 2013, Borinquen and the Company agreed to settle the defaults under the terminated Royalty Purchase Agreement and to release the Royalty to the Company, in consideration of the Company's payment of $13,000,000. Funds for the purchase were provided by Sapinda Asia, pursuant to the Loan and Security Agreement; the obligation of the Registrant to repay the loan is secured by the Royalty repurchased from Borinquen. In addition to the sale of the Royalty to the Company, Borinquen granted Sapinda Asia the option to purchase all of the shares of the Company beneficially owned by Borinquen and to release the shares upon receipt of a payment from Sapinda Asia of $3,000,000 by Feb. 28, 2013. Borinquen also granted a revocable proxy to Sapinda Asia, permitting Sapinda Asia to vote the shares of the Company's voting securities held by Borinquen. The proxy is valid for one year, unless terminated earlier by Borinquen, and is renewable for up to four additional years. Sapinda Asia also agreed under the Royalty Purchase Agreement to loan the Registrant an additional $1,200,000 for working capital. This loan is to be established as an unsecured revolving line of credit continuing through June 30, 2014, and bears interest at 10 percent for borrowed funds and 3 percent on unused funds. Upon execution and closing of the Royalty Purchase Agreement, the parties released each other from any claims they might have under the July 1, 2011, Royalty Agreement and the Sept. 5, 2012 Royalty Purchase Agreement, as amended. A copy of the Settlement Agreement is available at: http://is.gd/xNk7Ms On Feb. 1, 2013, Larry G. Schafran, a director of the Company since October 2006, tendered his resignation from the Board of Directors of the Company. During his tenure on the Board of Directors, Mr. Schafran had served as a member and chairman of the Audit Committee of the Board of Directors of the Registrant until Dec. 28, 2012. At the time of his resignation, Mr. Schafran was a member of the Nominating Committee of the Board of Directors of the Registrant. Mr. Schafran was not a nominee for election at the Company's upcoming Annual Meeting of Shareholders, scheduled for Feb. 28, 2013. Mr. Schafran informed the Board of his resignation and his reasons for terminating his association with the Registrant by letter addressed to the Chairman of the Board of Directors. The Company's Board of Directors disagrees with the position asserted by Mr. Schafran in his letter of resignation. About SecureAlert Inc. Sandy, Utah-based SecureAlert, Inc. (OTC BB: SCRA) -- http://www.securealert.com/-- is an international provider of electronic monitoring systems, case management and services widely utilized by more than 650 law enforcement agencies worldwide. SecureAlert incurred a net loss attributable to SecureAlert common stockholders of $19.93 million on $19.79 million of total revenues for the year ended Sept. 30, 2012, compared with a net loss attributable to SecureAlert common stockholders of $11.92 million on $17.96 million of total revenues during the prior fiscal year. SecureAlert's balance sheet at Sept. 30, 2012, showed $26.53 million in total assets, $22.10 million in total liabilities and $4.42 million in total equity. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended Sept. 30, 2012, citing losses, negative cash flows from operating activities, notes payable in default and an accumulated deficit, which conditions raise substantial doubt about its ability to continue as a going concern. SINCLAIR BROADCAST: Reports $59.4 Million Net Income in 4th Qtr. ---------------------------------------------------------------- Sinclair Broadcast Group, Inc., reported net income of $59.39 million on $329.51 million of total revenues for the three months ended Dec. 31, 2012, compared with net income of $23.24 million on $212.77 million of total revenues for the same period during the prior year. For the 12 months ended Dec. 31, 2012, the Company reported net income of $144.95 million on $1.06 billion of total revenues, as compared with net income of $76.17 million on $765.28 million of total revenues during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $2.72 billion in total assets, $2.82 billion in total liabilities and a $100.05 million total stockholders' deficit. "2012 was a remarkable year for our Company," commented David Smith, President and CEO of Sinclair. "We successfully closed on 30 TV stations, recorded record levels of political advertising, benefited from a rebound in the automotive advertising category, and achieved historic levels in key financial metrics. As we look forward to 2013, we are very excited about our prospects, including starting the year with the Super Bowl on our 11 CBS stations. While we have led the current consolidation trend in the broadcast industry, we believe there are still many opportunities for us to continue to acquire quality television assets, unlock hidden value, and strengthen our competitive position." A copy of the press release is available for free at: http://is.gd/b5wdO1 About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. The Company said in the Form 10-Q for the quarter ended March 31, 2012, that any insolvency or bankruptcy proceeding relating to Cunningham, one of its LMA partners, would cause a default and potential acceleration under a Bank Credit Agreement and could, potentially, result in Cunningham's rejection of the Company's seven LMAs with Cunningham, which would negatively affect the Company's financial condition and results of operations. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.- based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. In September 2010, Moody's raised its ratings for Sinclair Broadcast and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. SMF ENERGY: Liquidating Plan Effective Dec. 28, 2012 ---------------------------------------------------- BankruptcyData reported that on December 28, 2012, the Amended Joint Plan of Liquidation, dated October 16, 2012, as modified for SMF Energy (nka SMF Energy Liquidating Trust) became effective, and the Company emerged from Chapter 11 protection. On January 4, 2012, the Company entered into a liquidating trust agreement with Soneet R. Kapila, in his capacity as liquidating trustee, for the purpose of creating a liquidating trust, the report added. On the Plan's effective date an oversight committee was formed, which consists of three members selected by the unsecured creditors' committee, the report said. About SMF Energy SMF Energy Corporation, a provider of fuel and lubricants for the trucking, manufacturing and construction industries, and three of its subsidiaries filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Lead Case No. 12-19084) on April 15, 2012. The affiliates are SMF Services, Inc., H&W Petroleum Company, Inc., and Streicher Realty, Inc. Fort Lauderdale, Florida-based SMF Energy -- dba Streicher Mobile Fueling and SMF Generator Fueling Services -- disclosed $37.0 million in assets and $25.17 million in liabilities as of Dec. 31, 2011. SMF sought bankruptcy protection after Wells Fargo Bank, N.A., shut off access to a revolving credit loan and declared a default. The bank is owed $11.2 million, including $8 million on a revolving credit secured by all assets. SMF Energy disclosed $16,387,456 in assets and $31,160,009 in liabilities as of the Chapter 11 filing. On March 22, 2012, the Company appointed Soneet Kapila of Kapila & Company, Ft. Lauderdale, Florida, as its chief restructuring officer. Judge Raymond B. Ray oversees the case. Lawyers at Genovese Joblove & Battista, P.A., serves as the Debtors' counsel. Trustee Services Inc. serves as claims agent. Bayshore Partners, LLC, serves as their investment banker. The petition was signed by Soneet R. Kapila, the CRO. The Debtors tapped Harry Stampler and Stampler Auctions for the sale and liquidation of the assets of the Debtors located at 200 West Cypress Creek Road, Suite 400, Fort Lauderdale, Florida through an auction sale scheduled for July 19, 2012, at the Property. Steven R. Turner, the Assistant U.S. Trustee 21, appointed three members to the Official Committee of Unsecured Creditors. Robert Paul Charbonneau and the law firm of Ehrenstein Charbonneau Calderin represent the creditors. The Debtors entered into an agreement for Sun Coast Resources to acquire assets associated with the Debtors' business in their various operating locations in the State of Texas for $4 million, absent higher and better offers. The Texas assets yielded no competing bids from other parties. Competing bids were submitted with respect to the assets and vehicle outside Texas, under which Sun Coast was also the stalking horse bidder with a total offer of $5 million. The auction raised the value of the assets by $1.75 million. The sales, which closed in June, generated $10.75 million. The Debtors in August filed a Plan of liquidation. Wells Fargo Bank N.A., the secured lender, has been partly paid from the sale proceeds, pursuant to the cash collateral order. Holders of unsecured claims estimated to total $5.7 million will recover up to 70%. Each holder of an unsecured claim not more than $1,000 or who elect to reduce the claim to $1,000 will recover 100% in cash on the effective date. Holders of equity interests will only receive distributions after claimants are paid in full. SPRINT NEXTEL: Incurs $1.3 Billion Net Loss in Fourth Quarter ------------------------------------------------------------- Sprint Nextel Corp. reported a net loss of $1.32 billion on $9 billion of net operating revenues for the quarter ended Dec. 31, 2012, compared with a net loss of $1.30 billion on $8.72 billion of net operating revenues for the same quarter a year ago. The Company incurred a net loss of $4.32 billion on $35.34 billion of net operating revenues for the year ended Dec. 31, 2012, as compared with a net loss of $2.89 billion on $33.67 billion of net operating revenues during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $51.57 billion in total assets, $44.48 billion in total liabilities and $7.08 billion in total shareholders' equity. "Sprint's strong performance was fueled by record wireless service revenue on the Sprint platform due to year-over-year postpaid ARPU growth and Sprint platform net additions," said Dan Hesse, Sprint CEO. "As a result, quarterly Adjusted OIBDA* performance improved year-over-year in spite of significant cost increases related to Network Vision and the iPhone, both of which are key investments for our business that we expect will improve the customer experience and lead to growth in the years ahead." A copy of the press release is available for free at: http://is.gd/7GEHnE About Sprint Nextel Overland Park, Kan.-based Sprint Nextel Corp. (NYSE: S) -- http://www.sprint.com/-- is a communications company offering a comprehensive range of wireless and wireline communications products and services that are designed to meet the needs of individual consumers, businesses, government subscribers and resellers. * * * As reported by the TCR on Oct. 17, 2012, Standard & Poor's Ratings Services said its ratings on Overland Park, Kan.-based wireless carrier Sprint Nextel Corp., including the 'B+' corporate credit rating, remain on CreditWatch. "The CreditWatch update follows the announcement that Sprint Nextel has agreed to sell a majority stake to Softbank," said Standard & Poor's credit analyst Allyn Arden. In the Oct. 17, 2012, edition of the TCR, Moody's Investors Service has placed all the ratings of Sprint Nextel, including its B1 Corporate Family Rating, on review for upgrade following the announcement that the Company has entered into a series of definitive agreements with SOFTBANK CORP. As reported by the TCR on Aug. 8, 2012, Fitch Ratings affirms, among other things, the Issuer default rating (IDR) of Sprint Nextel and its subsidiaries at 'B+'. The ratings for Sprint reflect the ongoing execution risk both operationally and financially regarding several key initiatives that the company expects will improve cash generation, network performance and longer-term profitability. STAR EMS: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Star EMS 2117 E. University Dr Edinburg, TX 78541 Bankruptcy Case No.: 13-70072 Chapter 11 Petition Date: February 8, 2013 Court: United States Bankruptcy Court Southern District of Texas (McAllen) Judge: Richard S. Schmidt Debtor's Counsel: Jose Luis Flores, Esq. LAW OFFICE OF JOSE LUIS FLORES 1111 W Nolana McAllen, TX 78504 Tel: (956) 682-0924 Fax: (956) 682-3838 E-mail: bklaw@jlfloreslawfirm.com Scheduled Assets: $3,715,133 Scheduled Liabilities: $1,238,826 A copy of the Company's list of its 18 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/txsb13-70072.pdf The petition was signed by Rodolfo Martinez, Jr., owner. STEREOTAXIS INC: CFO Steps Down to Pursue New Career Opportunity ---------------------------------------------------------------- Stereotaxis, Inc., has announced that Sam Duggan, chief financial officer, will resign from the Company, effective Feb. 22, 2013. Serving as Stereotaxis CFO since October 2011, Mr. Duggan is leaving to accept a CFO position with a large, privately held company headquartered in St. Louis. Martin Stammer, Vice President and Controller, will assume the role of Interim CFO. Michael Kaminski, Stereotaxis chief executive officer, said, "Sam joined the company during a difficult period and has been instrumental in significantly reducing our cost structure and improving our financial performance. We will miss his thoughtful counsel and collaborative leadership but wish him great success in this new opportunity at a much larger company." Upon Mr. Duggan's departure, Mr. Stammer will be promoted to Principal Accounting Officer and Interim CFO. Since joining the Company in October 2009, he has assumed increasing levels of responsibility. Promoted to Corporate Controller in August 2011, he was then named Vice President and Controller in August 2012. "Marty has proven to be a valuable member and leader within our financial organization over the past few years, playing a key role in developing and executing our strategic financial initiatives, as well as securing essential funding and banking relationships," said Mr. Kaminski. "We are very confident in his ability to seamlessly assume the role of interim CFO and continue to advance our goals of delivering expected results and strengthening our financial position." About Stereotaxis Based in St. Louis, Mo., Stereotaxis, Inc., designs, manufactures and markets the Epoch Solution, which is an advanced remote robotic navigation system for use in a hospital's interventional surgical suite, or "interventional lab", that the Company believes revolutionizes the treatment of arrhythmias and coronary artery disease by enabling enhanced safety, efficiency and efficacy for catheter-based, or interventional, procedures. For the year ended Dec. 31, 2011, Ernst & Young LLP, in St. Louis, Missouri, expressed substantial doubt about Stereotaxis' ability to continue as a going concern. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. The Company reported a net loss of $32 million for 2011, compared with a net loss of $19.9 million for 2010. The Company's balance sheet at Sept. 30, 2012, showed $35.17 million in total assets, $50.42 million in total liabilities and a $15.25 million total stockholders' deficit. SUNSHINE HOTELS: Wins Interim Approval for Gallagher as Counsel --------------------------------------------------------------- Sunshine Hotels, LLC and Sunshine Hotels II, LLC, sought and obtained interim approval to employ the firm of Gallagher & Kennedy, P.A. as general bankruptcy and restructuring counsel. The Court granted interim approval following a hearing on Feb. 6. A final hearing on the application is scheduled for March 6. G&K has advised the Debtors that the current hourly rates for the attorneys expected to have primary responsibility for this representation are: John R. Clemency $575 per hour Craig Solomon Ganz $425 per hour Tyler J. Carrell $300 per hour Other G&K attorneys and paralegals may render services to the Debtors as needed at these hourly rates: Category Hourly Rate -------- ----------- Shareholders $400 to $600 Associates $275 to $375 Paralegals $200 to $250 G&K received $106,000 from Sunshine and $103,000 from Sunshine II as retainer. To the best knowledge of the Debtors, G&K does not hold or represent any interest adverse to the Debtors. About Sunshine Hotels Sunshine Hotels, LLC and Sunshine Hotels II, LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-01560 and 13-01561) on Feb. 4, 2013, in Yuma Arizona. Sunshine Hotels owns SpringHill Suites by Marriott hotel, a three- story building with 63 suites with indoor pool, spa, meeting room and fitness room on a 2.26-acre property in Hisperia, California. The property is valued at $9.20 million and secures a $5.72 million debt. Sunshine Hotels II owns the Courtyard by Marriott hotel, which has a four-story building with 131 rooms and 4 suites with restaurant and bar, indoor pool, conference center on a 2.74-acre property in Hisperia, California. The property is valued at $20.4 million and secures a $13 million debt. SUNSHINE HOTELS: Wins Interim Approval to Use Cash Collateral ------------------------------------------------------------- Bankruptcy Judge Brenda Moody Whinery entered an interim order authorizing Sunshine Hotels, LLC and Sunshine Hotels II, LLC, to use cash collateral, pending a final hearing on March 6, 2013 at 2:00 p.m. Use of cash collateral will be limited to payment of ordinary and necessary-postpetition expenses in accordance with a budget. The cash collateral cannot be used to pay management fees and commissions and fees, and the line item relating to mortgage interest payments will be removed from the budgets, according to the order. The Debtors believe that no other party than Square Mile Capital Management, LLC claims or has an interest in their cash collateral. The Debtors do not concede that any creditor holds a perfected interest in cash but they are willing to treat Square Mile as though they have cash collateral interests. As adequate protection of any demonstrated interest in cash collateral, the Debtors have agreed to grant a replacement lien on all postpetition assets, of the same type as served as collateral for any loan prepetition. The Debtors say the replacement liens and the equity cushion already provided by their real and personal property will provide adequate protection. Objections to the cash collateral motion are due 5 days prior to the March 6 hearing. A copy of the budget attached to the interim order is available for free at: http://bankrupt.com/misc/SunshineHotels_Interim_Cash.pdf About Sunshine Hotels Sunshine Hotels, LLC and Sunshine Hotels II, LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-01560 and 13-01561) on Feb. 4, 2013, in Yuma Arizona. Sunshine Hotels owns SpringHill Suites by Marriott hotel, a three- story building with 63 suites with indoor pool, spa, meeting room and fitness room on a 2.26-acre property in Hisperia, California. The property is valued at $9.20 million and secures a $5.72 million debt. Sunshine Hotels II owns the Courtyard by Marriott hotel, which has a four-story building with 131 rooms and 4 suites with restaurant and bar, indoor pool, conference center on a 2.74-acre property in Hisperia, California. The property is valued at $20.4 million and secures a $13 million debt. The Debtors have tapped the firm of Gallagher & Kennedy, P.A. as general bankruptcy and restructuring counsel. SUNSHINE HOTELS: Section 341(a) Meeting Scheduled for March 12 -------------------------------------------------------------- A Chapter 11 meeting of creditors in the bankruptcy case of Sunshine Hotels, LLC, will be held on March 12, 2013, at 9:00 a.m. at US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, AZ. 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 Sunshine Hotels Sunshine Hotels, LLC and Sunshine Hotels II, LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-01560 and 13-01561) on Feb. 4, 2013, in Yuma Arizona. Sunshine Hotels owns SpringHill Suites by Marriott hotel, a three- story building with 63 suites with indoor pool, spa, meeting room and fitness room on a 2.26-acre property in Hisperia, California. The property is valued at $9.20 million and secures a $5.72 million debt. Sunshine Hotels II owns the Courtyard by Marriott hotel, which has a four-story building with 131 rooms and 4 suites with restaurant and bar, indoor pool, conference center on a 2.74-acre property in Hisperia, California. The property is valued at $20.4 million and secures a $13 million debt. The Debtors have tapped the firm of Gallagher & Kennedy, P.A. as general bankruptcy and restructuring counsel. T SORRENTO: Watchdog Wants Case Dismissal; RMR Seeks Stay Relief ---------------------------------------------------------------- T Sorrento, Inc., is facing an uphill battle in its restructuring efforts. The United States Trustee is seeking dismissal or conversion of the case to a liquidation under Chapter 7. RMR Investments Inc., the Debtor's secured lender, is seeking relief from the automatic stay to foreclose on the Debtor's property. A hearing on the matters were slated for Jan. 25. No ruling has been posted on the Court docket. According to the U.S. Trustee, the Debtor's case involves undeveloped real property with no activity for eight months. Other than the filing of operating reports, the hiring of counsel, and the denial of an extension of exclusivity, there has been no activity in the case. The operating reports show no income and no activity. No party has filed a plan in the case. The case should be dismissed or converted to chapter 7 because reorganization is not feasible, the U.S. Trustee said. RMR, meanwhile, asserts the Debtor owes it in excess of $14,356,631 in pre-bankruptcy obligations related to the properties. RMR contends the Debtor has no equity in the properties, as the value of the properties is significantly less than the amount RMR is owed under the loan documents. RMR asserts the Debtor does not have a reasonable likelihood of confirming a bankruptcy plan. William T. Neary, the United States Trustee, is represented in the case by: Mary Frances Durham, Esq. United States Department of Justice Office of the United States Trustee 1100 Commerce Street, Room 976 Dallas, TX 75242 Tel: (214) 767-1241 E-mail: maryfrances.durham@usdoj.gov About T Sorrento Clark, Nevada-based T Sorrento, Inc., is a wholly owned subsidiary of Transcontinental Realty Investors, Inc., a Nevada corporation. T Sorrento filed for a Chapter 11 petition (Bankr. D. Nev. Case No. 12-13907) in Las Vegas on April 2, 2012. At the behest of RMR Investments, Inc., the Nevada Bankruptcy Court transferred the venue of the case to the Northern District of Texas, Dallas Division, as the Debtor's principal office and principal place of business are located in Dallas and the mailing address for each of the Debtor's officers is also located in Dallas, Texas. The case was transferred to the Northern District of Texas by a June 27, 2012 court order. Dallas Bankruptcy Judge Barbara J. Houser oversees the case. T Sorrento disclosed assets of $17.4 million and debts of $5.4 million in its schedules. The Debtor's Schedule A states it owns six lots (about 30 acres) at "Mira Lago" in Farmers Branch, two lots (24 acres) at Valley Branch Circle in Farmers Branch, 5.7 acres in McKinney and less than an acre in Irving. The total value of the real property is stated as $17,442,754. The Debtor has no personal property. The Debtor disclosed it has secured debt held by two entities totaling $5,121,368. Property taxes owed total $90,000. Six unsecured creditors are owed a total of $235,203. Lender RMR Investments is represented by Mark E. Andrews, Esq., and Stephen K. Lecholop II, Esq., at Cox Smith Matthews Incorporated. T-L CHEROKEE: Seeks to Use Cole Taylor's Cash Collateral -------------------------------------------------------- T-L Cherokee South, LLC, asks the Bankruptcy Court for permission to use certain cash and cash equivalents that allegedly serve as Cole Taylor Bank's collateral for claims asserted against the Debtor and its property. The Debtor said its operational problems are principally due to the general economic problems facing this country over the last several years. Despite these issues, the Debtor generates substantial rental income at the Property and is developing alternative exit strategies from the Chapter 11 case. The Debtor added in the court filing that it has several options for an exit strategy from Chapter 11. For instance, the Debtor, together with its affiliated debtors, continues to seek refinancing sources to replace the Lender and/or capital investments that would be utilized to fund a Plan of Reorganization. Additionally, the Debtors are analyzing the concept of substantive consolidation as a means for implementing a joint reorganization. The Debtor is also exploring other exit strategies from the Chapter 11 case. Cole Taylor Bank asserts a first position mortgage lien and claim against its shopping center property which purportedly secures a senior mortgage indebtedness of $14.35 million. In addition to its mortgage liens on the property, Cole Taylor asserts a security interest in and lien upon the rents being generated at the property. The Debtor proposes to use cash collateral and provide adequate protection to Cole Taylor upon these terms and conditions: A. The Debtor will permit Cole Taylor to inspect, upon reasonable notice, within reasonable hours, the Debtor's books and records; B. The Debtor will maintain and pay premiums for insurance to cover all of its assets from fire, theft and water damage; C. The Debtor will maintain sufficient cash reserves for the payment of current real estate taxes when such real estate taxes become due and payable; D. The Debtor shall, upon reasonable request, make available to Cole Taylor evidence of that which purportedly constitutes its collateral or proceeds; E. The Debtor will properly maintain the property in good repair and properly manage such Property; and F. Cole Taylor will be granted valid, perfected, enforceable security interests in and to the Debtor's postpetition assets, including all proceeds and products which are now or hereafter become property of the estate to the extent and priority of its alleged pre-petition liens, if valid, but only to the extent of any diminution in the value of the assets serving as collateral. A hearing on the request is scheduled for Feb. 15, 2013 at 1:00 p.m. About T-L Cherokee T-L Conyers LLC, T-L Cherokee South, LLC, and two affiliates sought Chapter 11 protection in Hammond, Indiana, on Feb. 1, 2013. The Debtors are represented by David K. Welch, Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtors own various shopping centers in Georgia and Kansas. T-L Cherokee South (Bankr. N.D. Ind. Case No. 13-20283) estimated assets and debts of $10,000,001 to $50,000,000. T-L Cherokee owns and operates a commercial shopping center in Overland Park, Kansas known as "Cherokee South Shopping Center". The Debtors are entities managed by Westchester, Illinois-based Tri-Land Properties, Inc., which sought Chapter 11 protection (Case No. 12-22623) on July 11, 2012. T-L CHEROKEE: Section 341(a) Meeting Scheduled for March 15 ----------------------------------------------------------- The U.S. Trustee has scheduled a meeting of creditors in the bankruptcy case of T-L Conyers LLC, on March 15, 2013, at 9:00 a.m. at Hammond - 1st Floor, Suite 1700. Creditors have until June 13, 2013, to file their proofs of claims while governmental units have until July 31, 2013, to file their proofs of claims. 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 T-L Cherokee T-L Conyers LLC, T-L Cherokee South, LLC, and two affiliates sought Chapter 11 protection in Hammond, Indiana, on Feb. 1, 2013. The Debtors are represented by David K. Welch, Esq., at Crane, Heyman, Simon, Welch & Clar, in Chicago. The Debtors own various shopping centers in Georgia and Kansas. T-L Cherokee South (Bankr. N.D. Ind. Case No. 13-20283) estimated assets and debts of $10,000,001 to $50,000,000. T-L Cherokee owns and operates a commercial shopping center in Overland Park, Kansas known as "Cherokee South Shopping Center". The Debtors are entities managed by Westchester, Illinois-based Tri-Land Properties, Inc., which sought Chapter 11 protection (Case No. 12-22623) on July 11, 2012. TANGLEWOOD FARMS: Suit v. Augusta Seed Survives Dismissal Bid ------------------------------------------------------------- Bankruptcy Judge J. Rich Leonard denied the request of Augusta Seed Corporation to dismiss the complaint filed by James B. Angell, the Chapter 7 trustee of Tanglewood Farms, Inc. of Elizabeth City. The lawsuit seeks to recover $100,000 in alleged fraudulent transfers made to Augusta Seed by the Debtor. Tanglewood Farms, Inc. of Elizabeth City filed a voluntary Chapter 11 petition (Bankr. E.D.N.C. Case No. 10-06719) on Aug. 20, 2010. The case was subsequently converted to a case under chapter 7 on July 12, 2011. Prior to conversion, the debtor was in the business of purchasing, selling, and storing grain. James H. Winslow was the president and 100% stockholder of the debtor. Augusta Seed argues that the complant fails to state a claim upon which relief can be granted pursuant to Rule 7012 of the Federal Rules of Bankruptcy Procedure, incorporating Rule 12(b)(6) of the Federal Rules of Civil Procedure. Augusta Seed also asserts that the trustee has failed to state with particularity the circumstances which constitute fraud pursuant to Rule 7009 of the Federal Rules of Bankruptcy Procedure, incorporating Rule 9(b) of the Federal Rules of Civil Procedure. In response, the trustee states that the complaint, as filed, contains sufficient factual allegations to show a plausible claim for relief under the relevant Bankruptcy Code provisions, and that Rule 9(b) is not applicable to the complaint because the trustee makes no allegations of actual intent to defraud. Judge Leonard held that the complaint alleges facts sufficient to show that the transfers were made while the debtor was insolvent or that debtor was left with unreasonably small capital as a result of the transfer. The case is, JAMES B. ANGELL, CHAPTER 7 TRUSTEE Plaintiff, v. AUGUSTA SEED CORPORATION, Defendant, Adv. Proc. No. 12-00192-8-JRL (Bankr. E.D.N.C.). A copy of the Court's Feb. 7, 2013 Order is available at http://is.gd/g14CSIfrom Leagle.com. About Tanglewood Farms, and James Howard and Billie Reid Winslow Based in Elizabeth City, North Carolina, Tanglewood Farms, Inc. of Elizabeth City filed for Chapter 11 bankruptcy protection on August 20, 2010 (Bankr. E.D.N.C. Case No.10-06719). Trawick H. Stubbs, Jr., Esq., at Stubbs & Perdue, P.A., represents the Debtor. The Debtor estimated assets between $1 million and $10 million, and debts between $10 million and $50 million. James Howard Winslow and Billie Reid Winslow filed for Chapter 11 (Bankr. E.D.N.C. Case No. 10-06745) on August 23, 2010. TEMBEC: Moody's Changes Outlook on 'B3' CFR to Negative ------------------------------------------------------- Moody's Investors Service lowered Tembec's Speculative Grade Liquidity rating to SGL-4 from SGL-2 and changed the rating outlook to negative from stable to reflect a weak near term liquidity profile. As part of the same rating action, Tembec's Corporate Family Rating (CFR) and senior secured bond rating were affirmed at B3. Ratings Changed: Outlook, to Negative from Stable Speculative Grade Liquidity, to SGL-4 from SGL-2 Ratings Rationale Tembec's B3 CFR reflects the company's weak liquidity, high leverage and the company's significant exposure to the volatile market pulp and wood products industry segments. The rating considers management's ability to extract operational improvements to enhance the company's below industry average operating margins and the company's execution on a number of expansions and cost reduction projects. The company's leading market position in the specialty dissolving pulp segment and the diversification provided by operations in several different sectors support the rating. While credit metrics are weak for the rating category on a trailing twelve months basis, the rating anticipates some improvement over the next 12-18 months. Tembec is undertaking a major boiler/turbine expansion (that includes a "green" purchase power agreement) at its Temiscaming mill without any liquidity cushion, although Moody's presumes the company can delay spending on the project to meet its obligations. The downgrade of Tembec's Speculative Grade Liquidity rating to SGL-4 reflects the company's continued negative cashflow generation stemming from high capital expenditure and weak operating performance. At December 2012, the company had approximately CND56 million of unrestricted cash, and net availability of approximately CND22 million on the company's committed CND200 million asset-based revolving credit facility (ABL, net of borrowing base eligibility, availability block and approximately CND48 million of letter of credit use) that matures in February 2016. Moody's estimates that Tembec's cash burn will be approximately USD35 million over the next 12 months, excluding any further spending on the USD190 million cogeneration project at its Temiscaming mill in Quebec (CND78 million spent as of December 2012). Tembec is currently negotiating the sale of its British Columbia NBSK pulp mill which may be sold later this year and the proceeds would facilitate Tembec's aggressive capital spending plans. The company has modest debt maturities of USD16 million over the next 12 months and does not have any significant debt maturities until 2016 (drawings under ABL) and 2018 (USD305 million senior secured notes). The company does not have financial covenants. Most of the company's assets are encumbered. The negative rating outlook reflects the company's liquidity pressures and the execution risk of completing the company's significant cogeneration project at its Temiscaming mill in Quebec. Tembec's ratings could be downgraded if pulp market conditions deteriorate, leading to a further deterioration in liquidity arrangements and normalized (RCF-Capex)/TD were to remain negative. An upgrade would be considered if normalized RCF/TD and (RCF-Capex)/TD measures approach 10% and 5%, respectively, on a sustainable basis, with a materially stronger liquidity profile. The principal methodology used in rating Tembec was the Global Paper and Forest Products Industry Methodology published in September 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. Headquartered in Montreal, Quebec, Tembec is an integrated paper and forest products company with operations primarily in Canada and a mill in France. The company's main operating segments include market pulp, wood products and paper. TITAN PHARMACEUTICALS: Amends Facility Agreement with Deerfield --------------------------------------------------------------- The Facility Agreement dated as of March 11, 2011, between Titan Pharmaceuticals, Inc., and the "Deerfield" lender was amended to provide that the exercise price of the 6,000,000 warrants previously issued to Deerfield may be satisfied through a reduction in the principal amount of the Company's outstanding indebtedness to Deerfield. A copy of the amendment agreement is available at http://is.gd/SdTO45 About Titan Pharmaceuticals South San Francisco, California-based Titan Pharmaceuticals is a biopharmaceutical company developing proprietary therapeutics primarily for the treatment of central nervous system disorders. The Company's balance sheet at Sept. 30, 2012, showed $10.74 million in total assets, $37.87 million in total liabilities, and a $27.13 million total stockholders' deficit. Following the 2011 results, OUM & Co. LLP, in San Francisco, California, expressed substantial doubt about Titan's ability to continue as a going concern. The independent auditors noted that the Company's cash resources will not be sufficient to sustain its operations through 2012 without additional financing, and that the Company also has suffered recurring operating losses and negative cash flows from operations. TRAK GROUP: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Trak Group, Inc. aka Trak 10 3420 W. Walnut Street Garland, TX 75042 Tel: (214) 674-6745 Bankruptcy Case No.: 13-40381 Chapter 11 Petition Date: February 8, 2013 Court: U.S. Bankruptcy Court Eastern District of Texas (Sherman) Debtor's Counsel: Mohammed S. Sajeel Khaleel, Esq. KHALEEL & ASSOCIATES 9401 LBJ Freeway, Suite 400 Dallas, TX 75243 Tel: (972) 808-0777 E-mail: skhaleel@khaleellaw.com Scheduled Assets: $579,683 Scheduled Liabilities: $1,003,018 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Khalid Bin Rezwan, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Khalid Bin Rezwan 13-40376 02/08/13 TRANS-LUX CORP: Amends 27.1-Mil. Common Shares Resell Prospectus ---------------------------------------------------------------- Trans-Lux Corporation filed an amendment no.2 to the Form S-1 registration statement relating to the sale by Richard V. Aghababian, Allan Brumberger, Peter Cardasis, et al., of up to 27,190,000 shares of the Company's common stock. All of these shares of the Company's common stock are being offered for resale by the selling stockholders. The selling stockholders will offer their shares at a fixed price of $0.39 per share until the Company's common shares are quoted on the Over-the-Counter Bulletin Board, and thereafter, at prevailing market prices or privately negotiated prices. The Company will not receive any proceeds from the sale of these shares by the selling stockholders. The Company will bear all costs relating to the registration of these shares of its common stock, other than any selling stockholders' legal or accounting costs or commissions. The Company's common stock is quoted on the OTCQB under the symbol "TNLX". The last reported sale price of the Company's common stock as reported by the OTCQB on Feb. 6, 2013, was $0.30 per share. A copy of the amended prospectus is available at: http://is.gd/rtErP8 About Trans-Lux Corporation Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a designer and manufacturer of digital signage display solutions for the financial, sports and entertainment, gaming and leasing markets. The Company reported a net loss of $1.42 million in 2011, compared with a net loss of $7.03 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $23.62 million in total assets, $20.37 million in total liabilities, and $3.25 million in total stockholders' equity. TRANS-LUX CORP: Holders Have Until April 19 to Exercise Warrants ---------------------------------------------------------------- As part of Trans-Lux Corporation's restructuring plan, on Nov. 14, 2011, the Company completed the sale of an aggregate of $8.3 million of securities consisting of 416,500 shares of the Company's Series A Convertible Preferred Stock, par value $0.001 per share having a stated value of $20.00 per share and convertible into 50 shares of the Company's Common Stock, par value $0.001 per share and 4,165,000 one-year warrants. These securities were issued at a purchase price of $20,000 per unit. Each Unit consists of 1,000 shares of Preferred Stock, which have subsequently converted into 50,000 shares of Common Stock and 10,000 A Warrants. Each A Warrant entitles the holder to purchase one share of the Company's Common Stock and a three- year warrant, at an exercise price of $0.20 per share. Each B Warrant will entitle the holder to purchase one share of the Company's Common Stock at an exercise price of $0.50 per share. The exercise period under the A Warrants was originally set to expire on Nov. 14, 2012, and was previously extended by the Company's Board of Directors through Feb. 12, 2013. On Feb. 5, 2013, the Board of Directors of the Company unconditionally further extended the exercise period of the Company's outstanding A Warrants. Holders of the A Warrants may now exercise their rights thereunder through April 19, 2013. The Board of Directors provided for this additional extension because the Company's Registration Statement relating in part to the resale of the common shares underlying the A Warrants has not yet been declared effective by the Securities and Exchange Commission. About Trans-Lux Corporation Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a designer and manufacturer of digital signage display solutions for the financial, sports and entertainment, gaming and leasing markets. The Company reported a net loss of $1.42 million in 2011, compared with a net loss of $7.03 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $23.62 million in total assets, $20.37 million in total liabilities, and $3.25 million in total stockholders' equity. TRAVELCLICK INC: S&P Revises Outlook on 'B' CCR to Stable --------------------------------------------------------- Standard & Poor's Ratings Services revised the outlook on its 'B' corporate credit rating on New York City-based TravelClick Inc. to stable from negative. At the same time S&P raised the recovery rating on the company's $195 million term loan and $20 million revolving credit facility, both due 2016, to '3' from '4' reflecting business risk profile improvement from recent acquisitions. The '3' recovery rating indicates S&P's expectation of meaningful recovery (50% to 70%) in the event of payment default. The 'B' issue level rating on these credit facilities remains unchanged. "The outlook revision reflects our expectation that the covenant cushion expanded in the fourth quarter of 2012, as a weak 2011 fourth quarter rolled off, and that the company is likely to maintain adequate covenant headroom through 2013," said Standard & Poor's credit analyst Christian Frank. "This follows a covenant cushion that was below 10% at Sept. 30, 2012," added Mr. Frank. The ratings reflect the company's "weak" business risk profile, deriving from its narrow market focus partly offset by its relatively high recurring revenue base; its "aggressive" financial risk profile with pro forma leverage that S&P expects declined to the low-4x area as of Dec. 31, 2012; and an acquisitive growth strategy. S&P expects the company to generate high single-digit revenue growth in fiscal 2013 with modest free operating cash flow (FOCF) due to continued investment in product development and sales and marketing. TravelClick provides e-commerce solutions to independent and chain hotels. TRI-CHEK SEEDS: Case Converted to Chapter 7 ------------------------------------------- Bankruptcy Judge Susan D. Barrett converted the Chapter 11 case of Tri-Chek Seeds, Inc., to a liquidation under Chapter 7, at the behest of Carolina Eastern Warehouse, Inc. and Crop Production Services, Inc. The creditors asked the Court to either convert to Chapter 7 or dismiss the case. Judge Barrett found conversion to be in the best interest of creditors and the estate as there appears to be equity in some of the assets and because of various pre- and post- petition transfers. The United States Trustee and five other unsecured creditors, Kimberly Seeds International, Inc., Langston Companies, Missouri Southern Seed Corp., Cedar Rock Farms, Inc. and Christian County Grain, Inc., supported Carolina and CPS's Motion. The Debtor's lender, Suntrust Bank, has barred the Debtor from using cash collateral. On Dec. 27, 2012, Carolina filed its Motion to Convert or Dismiss because of the Debtor's failure to file any operating reports. On Jan. 7, 2013 CPS joined in the Motion citing that the Debtor had paid various pre-petition expenses of Scott Gunter, the sole shareholder, and without the operating reports creditors were unable to monitor the Debtor's activities to ensure such conduct did not continue post-petition. A copy of the Court's Feb. 7, 2013 Opinion and Order is available at http://is.gd/tshhSTfrom Leagle.com. Tri-Chek Seeds, Inc., filed its chapter 11 bankruptcy petition (Bankr. S.D. Ga. Case No. 12-11409) on Aug. 7, 2012. Judge Susan D. Barrett oversees the case. Todd Boudreaux, Esq., at Shepard Plunkett Hamilton Boudreaux, represents the Debtor as counsel. In its petition, the Debtor estimated $1 million to $10 million in both assets and debts. A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/gasb12-11409.pdf The petition was signed by Scott D. Gunter, president. TWCC HOLDING: Debt Repricing No Impact on Moody's 'Ba3' CFR ----------------------------------------------------------- Moody's Investors Service said that TWCC Holding Corp.'s proposed amendment to reprice its senior secured credit facility will positively impact its cash flow and therefore credit, but it is not material enough to impact its Ba3 Corporate Family Rating or its debt ratings. The rating outlook is stable. Moody's expects all other terms of the credit agreement will remain in place, including the tenor and maintenance covenants. The transaction will not immediately impact the level of debt outstanding, or its leverage which was around 5.0x for YE 2012 (pro-forma for acquisitions). Moody's estimates the company to have interest savings in the range of USD11-12 million annually, which will improve its already strong free cash flow (USD145 million over LTM 9/30/12) and interest coverage ratios. Based on the 25% of excess cash flow sweep required under its credit agreement, Moody's expects the higher cash flow to lead to greater levels of debt pay down over time. The company also has the ability to pay dividends if its pro-forma secured leverage is under 5.0x and its pro-forma total leverage is under 7.0x (each as calculated under its bank agreement), however, any dividend payment requires the vote of each majority owner, including NBCUniversal Media, LLC (Baa2 senior unsecured) as well as its private equity owners, Bain Capital and Blackstone. Despite a challenging year for the most part of 2012 driven by unusual weather patterns, Moody's expects the company to resume revenue growth across all its distribution platforms in 2013. Moody's does not expect any material change in its debt levels in the near term and expect some natural de-leveraging to occur as a result of EBITDA growth. TWCC Holding Corp. d/b/a The Weather Channel Companies, headquartered in Atlanta, GA is a multi-platform media and information company focused on providing weather information to consumers and businesses via a variety of distribution platforms. Content is delivered to individuals most notably through its national U.S. cable network "The Weather Channel", the Internet and mobile and to businesses through its professional information services. UNITED WESTERN: Has Opposition to Disclosure Approval ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that United Western Bancorp Inc., the holding company for a bank taken over by regulators in January 2011, will face opposition from the U.S. Trustee and JPMorgan Chase Bank NA at a Feb. 21 hearing for approval of disclosure materials explaining the proposed liquidating Chapter 11 plan. According to the report, previously seeking conversion of the Chapter 11 case to liquidation in Chapter 7, the U.S. Trustee faults the disclosure statement for failure to explain why lawsuits can't be prosecuted just as effectively and more inexpensively through conversion to Chapter 7 and appointment of a trustee. The bank contends the plan can't be approved because it ignores subordination provisions in loan agreements by allowing junior creditors to be paid before JPMorgan's claim is paid in full. United Western filed a Chapter 11 petition to continue a lawsuit against the U.S. Comptroller of the Currency alleging that the regulatory takeover of the bank subsidiary was "arbitrary and capricious." The other main asset is a tax refund of $4.85 million which the Federal Deposit Insurance Corp. claims as receiver for the failed bank subsidiary. About United Western United Western Bancorp, Inc., along with two affiliates, filed for Chapter 11 protection (Bankr. D. Colo. Case No. 12-13815) on March 2, 2012. Harvey Sender, Esq., at Sender & Wasserman, P.C., represents the Debtor. Judge A. Bruce Campbell presides over the case. United Western listed the value of the assets as "unknown" while showing $53.3 million in debt, including a $12.3 million secured claim owing to JPMorgan Chase Bank NA. The holding company listed assets of $2.221 billion and liabilities of $2.104 billion on the June 30, 2010, balance sheet, the last financial statement filed before the bank was taken over. United Western's deposits and branches were transferred by the Federal Deposit Insurance Corp. to First-Citizens Bank & Trust Co. of Raleigh, North Carolina. When the bank was taken over, it had $1.65 billion in deposits, the FDIC said. The cost of the takeover to the FDIC was $313 million, the FDIC said in a statement at the time. UNIVERSAL HEALTH: BankUnited Wants Chapter 11 Case Dismissed ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Universal Health Care Group Inc., the owner of an insurance company and three health-maintenance organizations, won't be in Chapter 11 long if lender BankUnited NA has its way. The report relates that the bank, owed $36.5 million, filed papers just the day after the bankruptcy filing asking the bankruptcy judge to dismiss the Chapter 11 case on an expedited basis. According to the report, the bank explained that its collateral and Universal's only assets are the insurance companies and HMOs that operate in Florida, Texas and Nevada. Florida regulators filed papers two days before bankruptcy initiating a receivership in state court where the two Florida businesses would be taken over and customers disbursed to other providers. Since bankruptcy can't stop the regulatory takeover, BankUnited says that the Universal holding company will end up with no assets. Consequently, the case should be dismissed immediately, in the bank's opinion. The bank, the report discloses, wants the case dismissed so it can complete foreclosure of the operating companies that was scheduled for later this month. If the bank forecloses, it may be able to head off a receivership by regulators, sell the businesses, and thus preserve some of its collateral. The bank expects Texas and Nevada regulators to commence regulatory takeovers of their own. The insurance companies can't use bankruptcy to forestall regulatory takeovers because insurance companies are prohibited from filing any form of bankruptcy. Florida regulators told the state court that the company overstated assets and has a capital insufficiency. About Universal Health Care Universal Health Care Group, Inc., filed a Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida regulators moved to put two of the company's subsidiaries in receivership. Universal Health Care estimated assets of up to $100 million and debt of less than $50 million in court filings in Tampa, Florida. Harley E Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, serves as counsel to the Debtor. UNIVISION COMMUNICATIONS: S&P Rates $1.5BB Loan Due 2020 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned New York City-based Spanish language TV and radio broadcaster Univision Communications Inc.'s proposed $1.5 billion term loan due 2020 and up to $500 million revolving credit facility due 2018 an issue-level rating of 'B+' (one notch above S&P's 'B' corporate credit rating on the company). S&P also assigned the debt a recovery rating of '2', indicating its expectation for substantial (70% to 90%) recovery for lenders in the event of a payment default. The corporate credit rating on New York City-based Univision Communications Inc., the leader in U.S. Hispanic media, reflects the company's steep debt leverage and weak interest coverage because of its 2007 leveraged buyout (LBO), advertising pricing that is not commensurate with its audience share, and weak trends in radio advertising. S&P regards Univision's financial risk profile as "highly leveraged," (based on S&P's criteria), because of the company's extremely high lease-adjusted debt to EBITDA of 11.8x as of Sept. 30, 2012. The proposed transaction does not reduce leverage or improve EBITDA coverage of interest. Univision's business risk profile is "satisfactory," supported by its position as the market-leading U.S.-based Spanish-language TV and radio broadcaster. S&P expects Univision to maintain "adequate" liquidity, supplemented by positive discretionary cash flow, despite leverage remaining very high. The company still faces meaningful refinancing hurdles, with roughly $3.1 billion maturing in 2017. Univision's ability to refinance the remainder of its 2017 maturities will likely rely on its ability to repay debt and grow EBITDA over the next five years. S&P assess Univision's management and governance as "fair." Univision's operations include TV and cable networks and TV station groups, radio stations, and online content. It is the largest Spanish-language radio broadcaster in the U.S. Univision's market-leading position relies on its popular primetime programming under a favorable low-cost, long-term contract with Grupo Televisa S.A., and has held its leading position despite several new competitors. The Univision network reaches virtually all U.S. Hispanic households, and often generates audience ratings higher than some of the four major English-language TV networks. Univision has not narrowed the gap between Spanish language and English language advertising rates for several years, but revenue and EBITDA growth have been sustained by an increase in advertising sales volumes and higher retransmission fees from multichannel video providers. UPLAND, CA: San Bernardino County Lawsuit Could Force Bankruptcy ---------------------------------------------------------------- Joe Nelson and Sandra Emerson, writing for San Bernardino Sun, report that the city manger for Upland, Calif., Stephen Dunn, said San Bernardino County's lawsuit against Upland and two transportation agencies in which the county seeks to recoup a portion of a $102 million legal settlement could force Upland into bankruptcy. The Sun reports Mr. Dunn said Upland has spent roughly $6 million from its general fund over the past nine years to defend itself in the litigation -- money the city desperately needed. As a result, the city's general fund reserves have dipped below $1 million in the last year, he said. The report recounts the county filed its lawsuit against Upland, Caltrans and San Bernardino Associated Governments -- the county's transportation planning agency also known as SanBAG -- in November 2004 in an effort to show they were partly liable for damages Rancho Cucamonga developer Jeff Burum claimed the county flood- control district caused to his 434-acre residential and retail development in Upland. In November 2006, the county settled with the developer's investor group, Colonies Partners LP, for $102 million. The report says the settlement is now the focus of a broad conspiracy and bribery case in which prosecutors allege bribes were used to elicit the settlement in Colonies' favor. USG CORP: Incurs $12 Million Net Loss in Fourth Quarter ------------------------------------------------------- USG Corporation reported a net loss of $12 million on $815 million of net sales for the three months ended Dec. 31, 2012, compared with a net loss of $100 million on $726 million of net sales for the same period during the prior year. For the 12 months ended Dec. 31, 2012, the Company incurred a net loss of $125 million on $3.22 billion of net sales, as compared with a net loss of $390 million on $2.91 billion of net sales during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $3.72 billion in total assets, $3.70 billion in total liabilities and $19 million in total stockholders' equity including noncontrolling interest. "Our wallboard results were the strongest we have seen in over three years, and we achieved our fourth consecutive quarter of positive adjusted operating profit," said James S. Metcalf, Chairman, President and CEO. "The results for Worldwide Ceilings and L&W Supply show the commercial markets remain choppy, but we continue to see signs of a housing recovery." "While I am pleased with the progress on Our Plan to Win in 2012, there is more work to be done," Metcalf said. "Our focus remains on achieving positive net earnings, and I look forward to continued growth in 2013." A copy of the press release is available for free at: http://is.gd/25xAhF About USG Corporation Based in Chicago, Ill., USG Corporation -- http://www.usg.com/-- through its subsidiaries, manufactures and distributes building materials producing a wide range of products for use in new residential, new nonresidential and repair and remodel construction, as well as products used in certain industrial processes. The company filed for Chapter 11 protection on June 25, 2001 (Bankr. Del. Case No. 01-02094). When the Debtors filed for protection from their creditors, they disclosed $3.252 billion in assets and $2.739 billion in liabilities. The Debtors emerged from bankruptcy protection on June 20, 2006. The Company reported a net loss of $390 million in 2011 and a net loss of $405 million in 2010. * * * As reported by the TCR on Aug. 15, 2011, Standard & Poor's Ratings Services lowered its corporate credit rating on USG Corp. to 'B' from 'B+'. "The downgrade reflects our expectation that USG's operating results and cash flow are likely to be strained over the next year due to the ongoing depressed level of housing starts and still- weak commercial construction activity," said Standard & Poor's credit analyst Thomas Nadramia. "It is now more likely, in our view, that any meaningful recovery in housing starts may be deferred until late 2012 or into 2013. As a result, the risk that USG's liquidity in the next 12 to 24 months will continue to erode (and be less than we incorporated into our prior ratings) has increased. The ratings previously incorporated a greater improvement in housing starts, which would have enabled USG to reduce its negative operating cash flow in 2012 and achieve breakeven cash flow or better by 2013." In the Sept. 11, 2012, edition of the TCR, Fitch Ratings has affirmed USG Corporation's (NYSE: USG) ratings, including the company's Issuer Default Rating (IDR) at 'B-'. The Rating Outlook has been revised to Stable from Negative. The ratings for USG reflect the company's leading market position in all of its businesses, strong brand recognition, its large manufacturing network and sizeable gypsum reserves. Risks include the cyclicality of the company's end-markets, excess capacity currently in place in the U.S. wallboard industry, volatility of wallboard pricing and shipments and the company's high leverage. As reported by the TCR on Dec. 5, 2012, Moody's Investors Service affirmed USG Corporation's Caa1 Corporate Family Rating and Caa1 Probability of Default Rating. USG's Caa1 Corporate Family Rating reflects its high debt leverage characteristics, despite Moody's expectation of improving operating performance. VANDERRA RESOURCES: RSI Bros. to Auction Furniture, Equipment ------------------------------------------------------------- Vanderra Resources, LLC, obtained approval in January of its expedited application to employ RSI Bros. Auctioneers as online auctioneer to assist with liquidating the Debtor's furniture and equipment located at 2525 Ridgmar Boulevard, Fort Worth, Texas and all other remaining personal property. The firm, among other things, will assist the Debtor in: a. conducting online public auctions of the Subject Property in two phases: the first phase by auctioning the bulk of the Subject Property, by year end, and the second phase by auctioning the remaining Subject Property, including any information technology of the Debtor, once the Debtor no longer needs to use the Headquarters; b. advertising the Subject Property, using direct mail, trade journals, and newspapers to attract the best possible buyers to auction; and c. posting an advertising brochure and "catalog of sale" of the Subject Property to RSI's website. As compensation for its Services, RSI charges a buyer's premium of 15%. No fee is charged directly to the Debtor. RSI, however, will seek the reimbursement of its actual and necessary expenses, which it estimates will be $1,150. Kyle Rosen attests that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Vanderra Resources Vanderra Resources LLC is an innovator and leader in the oil-field services industry, providing one stop solutions for the setup of drilling sites, including the construction of well site locations and roads, compressor pads, pipelines, and frac ponds. Vanderra Resources filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-45137) in Fort Worth, Texas, on Sept. 9, 2012. The Debtor estimated assets and debts of at least $10 million. The Debtor filed for bankruptcy to address its legacy debt issues, to finalize its restructuring into a smaller, more profitable company, and to preserve and enhance its going concern value for the benefit of its vendors, customers, creditors, employees, and all stakeholders. Bankruptcy Judge D. Michael Lynn oversees the Debtor's case. Kevin M. Lippman, Esq., and Davor Rukavina, Esq., at Munsch Hardt Kopf & Harr, P.C., serve as the Debtor's counsel. The petition was signed by George Langis, president and chief operating officer. VAREL FUNDING: S&P Withdraws 'CCC+' Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services said it withdrew its 'CCC+' corporate credit rating and other ratings on Carrollton, Texas- based Varel Funding LLC. Varel is a provider of drill bit applications to the oil and gas and mining and industrial industries. "We withdrew our ratings after all the rated debt at Varel Funding LLC was repaid as part of a recapitalization," said Standard & Poor's credit analyst Stephen Scovotti. As part of the recapitalization, a new credit facility and mezzanine facility was put in place at Varel International Energy Services Inc. Standard & Poor's will continue to rate Varel International Energy Services Inc. VELOCITY INTERNATIONAL: Case Summary & Creditors List ----------------------------------------------------- Debtor: Velocity International, Inc. aka Velocity Broadcasting Velocity World Media 625 Liberty Avenue, 24th Floor Pittsburgh, PA 15222 Bankruptcy Case No.: 13-20557 Chapter 11 Petition Date: February 8, 2013 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Donald R. Calaiaro, Esq. CALAIARO & CORBETT, P.C. 310 Grant Street, Suite 1105 Pittsburgh, PA 15219-2230 Tel: (412) 232-0930 Fax: (412) 232-3858 E-mail: dcalaiaro@calaiarocorbett.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 19 largest unsecured creditors is available for free at http://bankrupt.com/misc/pawb13-20557.pdf The petition was signed by Kaveri Subbarao, general counsel. VI-JON INC: S&P Withdraws 'B' Corporate Credit Rating ----------------------------------------------------- Standard & Poor's Ratings Services said that it withdrew its ratings on Vi-Jon Inc., including its 'B' corporate credit rating, based on the issuer's request. VILLAGIO PARTNERS: Broker Represented Both Seller and Buyer ----------------------------------------------------------- Compass Care Holdings, Ltd., debtor-affiliate of Villagio Partners, Ltd., in December withdrew its motion for authority to employ Colliers Appelt Womack, Inc. as broker, and a related motion to assume an executory contract, without prejudice to re-file. On Oct. 25, 2012, Compass Care filed a motion seeking to employ Colliers Appelt Womack, doing business as Colliers International, to act as its real estate broker and assist in the marketing, negotiation and sale of certain real property. At the Dec. 3, 2012 hearing on the Motion, the Court expressed concern over the conflict arising under the Bankruptcy Code with the Broker representing both the Debtor-seller and the proposed buyer. Specifically, the Court inquired how the Broker could be "disinterested" under 11 U.S.C. Sec. 327(a). Compass Care requested additional time to provide a brief with case authority addressing the Court's question. But Compass Care did not locate any case law directly addressing the Court's concern. Accordingly to resolve the Court's concern, Compass Care withdrew the Motion. The Debtor said it will file an amended motion to employ Colliers, wherein Colliers will only represent the Debtor in the potential sale of certain real property, and the prospective buyer would no longer be represented by the broker or any of its agents, on an intermediary basis or otherwise. About Villagio Partners et al. Villagio Partners Ltd., along with six affiliates, filed separate Chapter 11 petitions (Bankr. S.D. Tex. Case Nos. 12-35928, 12-35930 to 12-35932, 12-35934, 12-35936 and 12-35937) in Houston on Aug. 6, 2012. The Debtors are engaged primarily in the business of owning and operating commercial retail shopping centers and offices. The Debtors' commercial real properties are located in and around the Houston Metropolitan area, including Katy, Humble and The Woodlands. The petitions were signed by Vernon M. Veldekens, CEO for The Marcel Group. The Marcel Group -- http://www.themarcelgroup.com/ -- is an integrated commercial real estate firm specializing in development, construction, design, engineering, master planning, leasing and property management. Village Partners, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets and debts of at least $10 million. It says that a real property in Katy, Texas, is worth $24.6 million. The affiliated debtors are Compass Care Holdings Ltd., Cinco Office VWM, Greens Imperial Center, Inc., Marcel Construction & Maintenance, Ltd., Tidwell Properties, Inc., and Research-New Trails Partners, Ltd. Bankruptcy Judge Marvin Isgur presides over the cases. Simon Richard Mayer, Esq., and Wayne Kitchens, Esq., at Hughes Watters Askanase, LLP, in Houston, represent the Debtors as counsel. VUZIX CORP: To Effect a 1-for-75 Reverse Common Stock Split ----------------------------------------------------------- Vuzix Corporation received all the necessary regulatory approvals, including the approval of the TSX Venture Exchange and the Financial Industry Regulatory Authority to effectuate a reverse split of its issued and outstanding common stock on a 1 to 75 basis. The Split was previously approved at the special meeting of the shareholders of the Company, held on Nov. 30, 2012. The Shares began trading on a split-adjusted basis on Feb. 6, 2013. In accordance with FINRA's procedures for reverse stock splits, Vuzix' ticker symbol on the OTCBB will be "VUZID" for a period of 20 business days beginning Feb. 6, 2013, after which time, the symbol will revert back to "VUZI". The Company's ticker symbol will remain unchanged on the TSXV. Any fractional shares resulting from the Split will be rounded up to the nearest whole post-split share. Paul Travers, chief executive officer of Vuzix, said that, "We believe the higher split-adjusted stock price will be in the best interest of our shareholders by making it easier to effect transactions in our stock, broaden our audience and shareholder base and ultimately enhance our valuation as we move forward and grow the Company. While the Split did not change the market capitalization of Vuzix, the higher share price is designed to make it easier for shareholders to hold Vuzix stock in their brokerage accounts and to appeal to major customers that look at our share price when deciding to add us as a new supplier." Vuzix shareholders who hold shares in brokerage accounts, also known as holding the shares in "street name", will note that the number of Vuzix shares are automatically adjusted to reflect the number of shares as adjusted by the reverse stock split. Shareholders of record who hold physical stock certificates will receive letters of transmittal from the Vuzix' transfer agent, Computershare, or they can call 781-575-2879 to get information on exchanging their old stock certificates for new stock certificates reflecting the adjusted number of shares as a result of the reverse stock split. About Vuzix Corp. Rochester, New York-based Vuzix Corporation (TSX-V: VZX) OTC BB: VUZI) -- http://www.vuzix.com/-- is a supplier of Video Eyewear products in the defense, consumer and media & entertainment markets. The Company reported a net loss of $3.87 million in 2011, a net loss of $4.55 million in 2010, and a net loss of $3.25 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $2.50 million in total assets, $7.32 million in total liabilities and a $4.82 million total stockholders' deficit. After auditing the 2011 annual report, EFP Rotenberg, LLP, in Rochester, New York, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred substantial losses from operations in recent years. In addition, the Company is dependent on its various debt and compensation agreements to fund its working capital needs. And while there are no financial covenants with which the Company must comply with, these debts are past due in some cases. Bankruptcy Warning The Company said in its 2011 annual report that its future viability is dependent on its ability to execute these plans successfully. If the Company fails to do so for any reason, the Company would not have adequate liquidity to fund its operations, would not be able to continue as a going concern and could be forced to seek relief through a filing under U.S. Bankruptcy Code. W.R. GRACE: Iridian Discloses 6% Stake in Grace Equity ------------------------------------------------------ In a January 31 regulatory filing with the U.S. Securities and Exchange Commission, Iridian Asset Management LLC disclosed that it beneficially owns 6% of the shares of common stock of W.R. Grace & Co. According to the filing, there were 75,313,364 shares of common stock outstanding as of October 31, 2012. Based on such information, Iridian reports beneficial ownership of 4,515,563 shares of common stock, representing 6% of the common stock outstanding. Iridian is a Delaware company majority owned by Arovid Associates LLC. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Grace is still awaiting the effective date of the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Has $111.6 Million Net Loss in Fourth Quarter --------------------------------------------------------- W.R. Grace & Co. 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. 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 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. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. On April 20, 2012, the company filed a motion with the Bankruptcy Court to approve definitive agreements among itself, co-proponents of the Plan, BNSF railroad, several insurance companies and the representatives of Libby asbestos personal injury claimants, to settle objections to the Plan. Pursuant to the agreements, the Libby claimants and BNSF would forego any further appeals to the Plan. Grace is still awaiting the effective date of the Plan. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) WEST CORP: S&P Affirms 'B+' CCR; Rates Two Secured Loans 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed all existing ratings, including the 'B+' corporate credit rating, on Omaha, Neb.-based business process outsourcer West Corp. The rating outlook is stable. At the same time, S&P assigned the company's proposed secured term loans due 2016 and 2018 an issue-level rating of 'B+' (the same as the 'B+' corporate credit rating on the company), with a recovery rating of '3', indicating S&P's expectation for meaningful (50% to 70%) recovery for the bondholders in the event of a payment default. "The rating on West Corp. reflects S&P's expectation that leverage will remain high, in the 5x to 6x area over the intermediate term, as the company continues its acquisition-oriented growth strategy," said Standard & Poor's credit analyst Daniel Haines. This expectation underscores S&P's assessment of West Corp.'s financial risk profile as "highly leveraged" (based on S&P's criteria). West has been an active acquirer of automated services companies as it seeks to expand its presence in higher-margin areas. S&P views West's business risk profile as "fair," based on its good EBITDA margin and revenue stability. S&P believes these dynamics will result in West achieving low- to mid-single-digit percentage revenue and EBITDA growth, on average, over the intermediate term, with slightly lower leverage. West Corp. is a business process outsourcer of conferencing services, public safety services, automated alerts, notifications services, and agent-based and automated call center services, with operations in the U.S., the U.K., and many other countries. The company has a good EBITDA margin and competitive position in the fragmented, highly competitive market for communication services. West competes against larger peers with significant offshore operations, and often against clients' in-house staff. The market for conferencing services also is competitive, despite higher margins. West constantly strives to increase call volume and reduce costs to offset steadily declining pricing. This trade-off will likely hurt its EBITDA margin over time. Nonetheless, S&P believes longer-term trends generally will continue to favor outsourcers such as West, as companies continue outsourcing noncore functions to extract operating efficiencies. Under S&P's base-case scenario, it expects modest revenue and EBITDA growth in 2013, reflecting growth in conferencing minutes and acquisitions, and also ongoing declines in conference-minute rates. S&P expects a slight EBITDA margin deterioration from continuous pricing pressure and strong growth in its lower-margin business. WPCS INTERNATIONAL: Hudson Bay Discloses 9.9% Equity Stake ---------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Hudson Bay Capital Management, L.P., and Sander Gerber disclosed that, as of Dec. 31, 2012, they beneficially own: * $1,358,000 principal amount of 4% Senior Secured Convertible Notes due June, 05, 2014, convertible into 3,604 shares of common stock; and * Warrants to purchase up to 5,404,061 shares of common stock, which expire on Feb., 18, 2016, of WPCS International Incorporated representing 9.99% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/uuiLj8 About WPCS International Exton, Pennsylvania-based WPCS International Incorporated provides design-build engineering services that focus on the implementation requirements of communications infrastructure. The Company provides its engineering capabilities including wireless communication, specialty construction and electrical power to the public services, healthcare, energy and corporate enterprise markets worldwide. As reported by the TCR on Dec. 8, 2011, WPCS International and its United Stated based subsidiaries, previously entered into a loan agreement, dated April 10, 2007, as extended, modified and amended several times, with Bank of America, N.A. The Company is seeking alternative debt financing and has conducted discussions with other senior lenders to replace the Loan Agreement. The Company may not be successful in obtaining alternative debt financing or additional financing sources may not be available on acceptable terms. If the Company is required to repay the Loan Agreement, the Company has sufficient working capital to repay the outstanding borrowings. J.H. COHN LLP, in Eatontown, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended April 30, 2012. The independent auditors noted that the Company is in default of certain covenants of its credit agreement and has incurred operating losses, negative cash flows from operating activities and has a working capital deficiency as of April 30, 2012. These matters raise substantial doubt about the Company's ability to continue as a going concern. WPCS reported a net loss attributable to the Company of $20.54 million for the year ended April 30, 2012, compared to a net loss attributable to the Company of $36.83 million during the prior fiscal year. The Company's balance sheet at Oct. 31, 2012, showed $21.47 million in total assets, $14.69 million in total liabilities and $6.78 million in total equity. "At October 31, 2012, the Company had cash and cash equivalents of $921,206 and working capital of $1,265,636, which consisted of current assets of $15,897,614 and current liabilities of $14,631,978, and on December 4, 2012, repaid the existing loan with Sovereign. However, the Company's outstanding obligations under the Zurich Agreement and Indemnity Agreement raise substantial doubt about the Company's ability to continue as a going concern," according to the Company's Form 10-Q for the period ended Oct. 31, 2012. XZERES CORP: Amends Periodic Reports to Comply with Regulation -------------------------------------------------------------- Xzeres Corp. filed with the U.S. Securities and Exchange Commission an amendment to its annual report on Form 10-K/A to incorporate the revised disclosures the Company made in its Form 10-K for the year ended Feb. 29, 2012, as amended, in order to more fully comply with Item 308 of Regulation S-K. A copy of the amended Form 10-K is available at http://is.gd/P1eZO7 Separately, the Company filed an amendment to its quarterly report on Form 10-Q for the period ended Nov. 30, 2012, to more fully comply with Item 308 of Regulation S-K. A copy of the amended Form 10-Q is available for free at http://is.gd/Wk1JFr About XZERES Corp. Headquartered in Wilsonville, Oregon, XZERES Corp. designs, develops, and markets distributed generation, wind power systems for the small wind (2.5kW-100kW) market as well as power management solutions. As reported by the Troubled Company Reporter on July 3, 2012, Silberstein Ungar, PLLC, in Bingham Farms, Michigan, expressed substantial doubt about XZERES' ability to continue as a going concern, following its audit of the Company's financial position and results of operations for the fiscal year ended Feb. 29, 2012. The independent auditors noted that the Company has incurred losses from operations, has negative working capital, and is in need of additional capital to grow its operations so that it can become profitable. The Company's balance sheet at Nov. 30, 2012, showed $4.11 million in total assets, $5.13 million in total liabilities and a $1.02 million total stockholders' deficit. ZACKY FARMS: Family Trust Still Vying to Buy Assets --------------------------------------------------- Marie Beaudette at Dow Jones' DBR Small Cap reports that a family trust says it's prepared to outbid a $32.1 million offer to purchase the assets of poultry producer Zacky Farms out of bankruptcy. In papers filed with the U.S. Bankruptcy Court in Sacramento, Calif., the Robert D. and Lillian D. Zacky Trust said it would increase its offer to provide another $500,000 to the company's unsecured creditors. About Zacky Farms Fresno, California-based Zacky Farms LLC, whose operations include the raising, processing and marketing of poultry products, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No. 12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly 1,000 employees and operates in multiple plants, farms and offices in California, including operations in Los Angeles, Fresno, Tulare, Kings, San Joaquin and San Bernardino Counties. The company blames high feed prices for losses in recent years. The Company has plans to sell itself to pay creditors. Bankruptcy Judge Thomas Holman presides over the case. The petition was signed by Keith F. Cooper, the Debtor's sole manager. An official committee of unsecured creditors has been appointed in the case. Lowenstein Sandler represents the Committee. The Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan, Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron. The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky Trust U/D/T dated July 26, 1988, is represented by Thomas Walper, Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP. ZACKY FARMS: Buyer Cries Foul over Sale of Turkey Inventory ----------------------------------------------------------- P.J. Huffstutter, writing for Reuters, reported that attorneys for the buyer of bankrupt Zacky Farms LLC filed papers with the U.S. District Bankruptcy Court in Sacramento claiming Zacky Farms has sped up the sale and delivery of more than $1 million worth of whole turkey inventory to Stater Bros. Markets, a private grocery retailer based in Southern California. According to the report, the sale of the inventory had been originally scheduled from January 30 through March 8. Instead, "Zacky revised the delivery schedules to deliver five or six loads a day" so all of the meat would be delivered to the retailer weeks before the bankruptcy court's expected approval of the sale of Zacky Farms, attorneys for Pitman Family Farms said. Reuters said Pitman Family's agreement to buy Zacky Farms out of Chapter 11 bankruptcy was based on Pitman having access to that inventory of frozen birds "to help offset losses that will be incurred after the approved sale," according to the court papers. Pitman's attorneys are asking the court that it escrow the proceeds from the "objectionable sale of these assets" for the time being, Reuters added, citing court filings. About Zacky Farms Fresno, California-based Zacky Farms LLC, whose operations include the raising, processing and marketing of poultry products, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Calif. Case No. 12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly 1,000 employees and operates in multiple plants, farms and offices in California, including operations in Los Angeles, Fresno, Tulare, Kings, San Joaquin and San Bernardino Counties. The company blames high feed prices for losses in recent years. The Company has plans to sell itself to pay creditors. Bankruptcy Judge Thomas Holman presides over the case. The petition was signed by Keith F. Cooper, the Debtor's sole manager. An official committee of unsecured creditors has been appointed in the case. Lowenstein Sandler represents the Committee. The Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan, Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron. The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky Trust U/D/T dated July 26, 1988, is represented by Thomas Walper, Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP. ZOGENIX INC: Arda Minocherhomjee Quits From Board of Directors -------------------------------------------------------------- Arda M. Minocherhomjee, Ph.D., resigned from the Board of Directors of Zogenix, Inc. Dr. Minocherhomjee's decision to resign from the Board did not result from any disagreement with the Company concerning any matter relating to its operations, policies or practices. In connection with this resignation, pursuant to the bylaws of the Company, the Board voted to decrease the size of the Board from nine to eight members. About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Ernst & Young LLP, in San Diego, Calif., issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses from operations and lack of sufficient working capital. The Company reported a net loss of $83.90 million in 2011, a net loss of $73.56 million in 2010, and a net loss of $45.88 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $91.30 million in total assets, $78.01 million in total liabilities and $13.28 million in total stockholders' equity. * Debtor Also May File Suit for Chapter 13 Estate ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that lower courts under the U.S. Court of Appeals for the Sixth Circuit in Cincinnati are divided on the question of whether a Chapter 13 trustee alone has standing to file a lawsuit on behalf of the estate. According to the report, U.S. District Judge Michael W. Watson in Columbus, Ohio, sided with the five circuit courts to address the issue and held that the bankrupt has standing to sue as well as the trustee. Watson denied a motion to dismiss a suit brought by the Chapter 13 bankrupt. He conditioned denial on a commitment by the debtor that she would turn proceeds of the lawsuit over to the trustee for creditors under her confirmed plan. The case is Boddie v. PNC Bank NA, 12-cv-158, U.S. District Court, Southern District of Ohio (Columbus). * Rule 60(b) Allows Moving Effective Date of Rejection ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that making rejection of a lease retroactive to the filing date was a mistake the bankruptcy judge could correct under Fed.R.Civ.P. Rule 60(b), U.S. District Judge R. Brooke Jackson in Denver ruled on Feb. 4. The report recounts that before a Chapter 11 filing, the bankrupt company vacated real property and surrendered possession. About two months after filing, the company filed a motion to reject the lease as of the Chapter 11 filing date. The landlord didn't oppose, and the bankruptcy judge signed an order making rejection effective as of the filing date. The landlord later objected, contending it was entitled to an administrative claim covering the period between the filing date and the date of the order authorizing rejection. The bankruptcy judge agreed. The report relates that on appeal, Judge Jackson held that the bankruptcy judge had power under Rule 60(b) to modify the prior order because he hadn't noticed that the debtor didn't give facts to support extraordinary relief making rejection effective as of the filing date. Mr. Rochelle says that the opinion by Jackson is a tour de force in making sense out of a tangled record where the landlord's lawyer wasn't up to snuff. The case is Epic Energy Resources Inc. v. Terrance Point Partnership LLC, 12-01046, U.S. District Court, District of Colorado (Denver). * 5th Cir. Says State Court Finding on Status of Debt Final ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that once a state court decides that a debt relates to marital property and not to a contractual claim, the bankruptcy court can't recharacterize the obligation, under an opinion by the U.S. Court of Appeals in New Orleans. The report recounts that a woman made a loan to a man before they married to help finance his business. After they divorced, the matrimonial court held the man liable to repay the debt as part of an obligation to provide support or maintenance. When the man filed bankruptcy, the former wife prevailed on the bankruptcy judge to declare that the debt wasn't discharged because it was a support obligation exempted from discharge under Section 523(a)(15) of the Bankruptcy Code. The husband appealed, arguing that the obligation was a commercial debt not eligible for exception from discharge. According to the report, Circuit Judge Jennifer W. Elrod disagreed. Judge Elrod said it was up to the state matrimonial court to determine the nature of the obligation. Once the state court said it was in the nature of support, the bankruptcy court wasn't in a position to rule otherwise. The report notes that of significance in states with the concept of community property, Judge Elrod said it didn't matter for bankruptcy purposes whether the property in question was or wasn't community. The opinion doesn't include analysis of case law saying that a bankruptcy court has the ability to decide whether an obligation among former spouses is support, which isn't discharged, or division of marital property, which is. The case is Kinkade v. Kinkade, 12-30525, 5th U.S. Circuit Court of Appeals (New Orleans). * Solar Panel Oversupply Has Long-Term Benefit, Resnick Says ------------------------------------------------------------ The current oversupply of solar modules which is putting tremendous pressure on the industry and its financial backers has led to a generally negative view of the solar industry. However, according to Dr. Harry A. Atwater, Director of the Resnick Sustainability Institute at Caltech, while the current oversupply of silicon solar panels is painful in the short term, it is a boon for long term adoption of solar energy. This viewpoint was shared during this week's VX 2013 Conference in Los Angeles. "There has never been a better time to go 'long' on innovative solar technology," said Mr. Atwater, who is also the Howard Hughes Professor and Professor of Applied Physics and Materials Science at the California Institute of Technology. "If we invest now, by the time the industry recovers from today's oversupply crisis, very advanced innovations will have emerged that can fuel the next wave of solar technology. These will build on the momentum created by the current phase of the market and dramatically expand the usefulness and adoption of solar." Mr. Atwater explained how the market got into its current state and how this is, in fact, a good thing. Since 2000, photovoltaics (PV or solar power) has grown up from a 'boutique' research-and- development scale enterprise to become a global industry with a comprehensive supply chain, equipment industry, photovoltaic systems distribution and installation businesses, and new modes for project finance. In the last three years, this has led to PV manufacturing capacity continuing to rocket forward. Today it stands at a worldwide module production capacity of 60 GW (Gigawatts) peak. The problem for manufacturers is that in 2012 there was worldwide demand for only 35 GW of modules and 2013 demand is currently forecast in the 40 GW range. So right now, the industry is 'underwater.' This has given rise to dramatic, unexpected module price reductions over the past 24 months and has caused dislocation in the photovoltaics manufacturing industry: the oversupply quandary has generated bankruptcies of less-competitive manufacturers and those short of the cash needed to sustain operations through the oversupply period. But, ironically, this dislocation has been great for consumers; it is now a great time for them to purchase, install, and use solar power - which means that solar power is gaining a meaningful role in the market. "This period in the history of the solar market is like the 'dotcom bubble'," said Mr. Atwater. "During that era, there was a lot of financial and entrepreneurial pain, but vast amounts of infrastructure, market exposure and adoption occurred which catalyzed today's dramatic growth in worldwide use of the Web. We believe the same is true of solar." Therefore, while there has been a dramatic pullback of private equity and venture capital investment in innovative solar technologies, those who go long on solar now -- supporting the innovations that are currently underway -- will benefit greatly. New Solar Innovations are Emerging In addition to his role as head of the Resnick Sustainability Institute and professorship at Caltech, Mr. Atwater leads a project that recently received a $2.4 million grant from the U.S. Advanced Research Projects Agency for Energy (ARPA-E) to set the groundwork for solar modules in the 50+ percent efficiency range. Mr. Atwater is also a co-founder of Alta Devices, which uses gallium arsenide to enable the world's most efficient thin film solar and has the potential to completely change the way solar energy is used. Mr. Atwater's other work in solar includes: discovery of materials that are both readily available from the earth and enable highly efficient solar energy; and design of nanomaterials that, when distributed over large areas, can increase light capture to significantly change the cost and efficiency of solar. About The Resnick Sustainability Institute The Resnick Institute -- http://resnick.caltech.edu-- is Caltech's studio focused on the breakthroughs that will change the balance of the world's sustainability. It marries bold creativity and deep scientific knowledge by encouraging original thinking and orthogonal ideas. The Resnick Institute works with some of the world's top and emerging scientists - at the California Institute of Technology and beyond. Current projects at the Resnick Institute include research into energy generation, such as advanced photovoltaics, photoelectrochemical solar fuels, cellulosic biofuels, and wind energy system design; energy conversion work on batteries and fuel cells; and energy efficiency and management such as fuel efficient vehicles, green chemical synthesis, thermoelectric materials, and advanced research on electrical grid control and distribution. * 2013 Debt Maturities of $21-Bil. Grow to $258-Bil. in 2017 ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, says that according to a report from Moody's Investors Service, the ability of financially weak companies to refinance maturing debt has left junk-rated companies with only $21 billion in bonds and bank debt maturing this year. Maturing junk debt of non-financial companies climbs to $79 billion in 2015 and reaches a peak of $258 billion in 2017, Moody's said. Accommodating bond markets have been moving the so-called debt maturity wall steadily into the future. This time last year, $246 billion in maturities were to occur in 2016. The ability to refinance near-term maturities means that the peak was pushed out one year to 2017. Companies most likely to go bankrupt in the near term are those with the lowest credit ratings. Among businesses with Moody's ratings of B3 or lower, the combined debt is $14 billion maturing this year and next. * Junk Bond Default Rates Decline Again in January -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, says that according to a report Feb. 7 from Moody's Investors Service, bond markets seemingly unafraid of lending to weak credits contributed to another decline in the junk-bond default rate. In January, worldwide junk defaults declined to 2.5% from 2.6% in December. There were four defaults last month, compared with eight in January 2012. In the U.S., the junk default rate contracted to 3% from 3.3% in December. One year ago, the default rate was actually lower, 2.3%. Moody's projects that the worldwide junk-bond default rate will decline further to 2.7% by the end of 2013. Moody's is also predicting a 2.7% junk default rate in the U.S. at year's end. The junk-bond default rate averaged 4.8% since 1983, Moody's says. The peak for defaults was 14% in 2009. * Libor Accords Leave Banks Facing "Massive" State Claims --------------------------------------------------------- David McLaughlin, writing for Bloomberg News, reported that a multistate probe of alleged manipulation of interest rates threatens to leave banks liable for billions of dollars in estimated state and local losses from the scandal, even as they settle with national regulators. New York Attorney General Eric Schneiderman is helping lead a probe into claims that banks rigged global benchmarks for borrowing, adding to investigations by other authorities, including the U.S. Justice Department, according to Bloomberg. Royal Bank of Scotland Group Plc agreed yesterday to pay about $612 million to U.S. and U.K. regulators to resolve their claims. Bloomberg related that the London interbank offered rate is the basis for more than $300 trillion of securities and the banks that set the rate stand accused of rigging it for years to boost profits. Five years after alarm bells first sounded, regulators are handing out fines and criminal sanctions to those responsible for rate manipulation, Bloomberg noted. "The damage to public entities is a matter of great concern to state and local governments," Schneiderman said in an interview with Bloomberg. "These were allegations of really despicable conduct." More than 12 states are participating in the probe, according to a person familiar with the matter who requested anonymity because he isn't authorized to speak publicly. States have joined forces as banks reach settlements to resolve liability tied to Libor, or the London interbank offered rate, according to Bloomberg. Barclays Plc in June agreed to pay 290 million pounds ($454 million), and in December, UBS AG agreed to pay 1.4 billion Swiss francs ($1.5 billion). By acting together, state attorneys general can amass potentially large claims against banks and gain leverage in any settlement negotiations, Stephen Houck, an attorney at Menaker & Herrmann LLP and a former chief of the New York attorney general's antitrust bureau, told Bloomberg. Antitrust law allows states to seek triple damages. * Elizabeth Warren Not Ready to Back Down on U.S. Consumer Bureau ----------------------------------------------------------------- Cheyenne Hopkins, writing for Bloomberg News, reported that despite last month's ruling on recess appointments that casted doubt over the legality of the U.S. consumer bureau and its director, Senator Elizabeth Warren, the agency's most ardent champion, said she is not yet ready to trim its powers in return for its survival although she didn't rule any option in or out. "A strong independent consumer agency is good for families and lenders that follow the rules and good for the economy as a whole," Warren said yesterday in an interview with Bloomberg. "I will keep fighting for that." Bloomberg related that Warren, 63, who has styled herself as an anti-Wall Street crusader, was passed over to be the first director of the Consumer Financial Protection Bureau even though she conceived it as a Harvard University professor and organized it as a White House adviser. After that defeat, Warren ran for Senate from Massachusetts and won. Now, just a few weeks into her new job, she finds herself making the case for the agency all over again -- this time as a senator with a vote on the crucial Banking Committee, Bloomberg pointed out. * State Lawsuits Could Add to S&P Foreclosure --------------------------------------------- Jeannette Neumann, writing for The Wall Street Journal, reported that Standard & Poor's Ratings Services could face a much higher legal bill than the $5 billion sought by the federal government as more and more states join the battle against the credit-ratings firm. WSJ noted that 13 states and the District of Columbia have followed in the Justice Department's footsteps, filing separate lawsuits against S&P on Tuesday. The California attorney general alone is suing S&P for about $4 billion to recover funds for two of the country's largest public pension funds, according to its lawsuit. Other states, such as Colorado and Arkansas, are demanding S&P give back the revenue it earned on precrisis ratings of hundreds of securities, the report added. To recall, the Justice Department sued S&P for allegedly causing some banks and credit unions to lose $5 billion after relying on the company's ratings of mortgage-linked securities. However, the $5 billion claim, which S&P has dismissed as "meritless," is only part of the legal battle being fought by the world's largest credit-ratings firm by number of deals rated. * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ ------ ------- ABSOLUTE SOFTWRE ABT CN 128.8 (7.2) 2.7 ACELRX PHARMA ACRX US 28.2 (0.3) 13.1 AK STEEL HLDG AKS US 3,903.1 (91.0) 630.3 AMC NETWORKS-A AMCX US 2,152.9 (915.4) 505.9 AMER AXLE & MFG AXL US 2,866.0 (120.8) 271.3 AMER RESTAUR-LP ICTPU US 33.5 (4.0) (6.2) AMERISTAR CASINO ASCA US 2,096.6 (25.6) (26.5) AMYLIN PHARMACEU AMLN US 1,998.7 (42.4) 263.0 ARRAY BIOPHARMA ARRY US 128.4 (31.7) 64.0 AUTOZONE INC AZO US 6,398.0 (1,591.4) (682.2) BERRY PLASTICS G BERY US 5,050.0 (313.0) 482.0 BLUELINX HOLDING BXC US 595.4 (1.6) 264.0 CABLEVISION SY-A CVC US 7,285.3 (5,730.1) (85.3) CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CHOICE HOTELS CHH US 483.1 (569.4) 7.5 CIENA CORP CIEN US 1,881.1 (89.0) 730.7 CINCINNATI BELL CBB US 2,752.3 (684.6) (68.2) COMVERSE INC CNSI US 823.2 (28.4) (48.9) DELTA AIR LI DAL US 44,352.0 (48.0) (5,061.0) DIRECTV DTV US 20,353.0 (4,735.0) 953.0 DOMINO'S PIZZA DPZ US 441.0 (1,345.5) 74.0 DUN & BRADSTREET DNB US 1,821.6 (765.7) (615.8) DYNEGY INC DYN US 5,971.0 (1,150.0) 1,364.0 EXONE CO/THE XONE US 27.4 (0.7) (7.3) FAIRPOINT COMMUN FRP US 1,798.0 (220.7) 31.1 FERRELLGAS-LP FGP US 1,429.0 (69.6) (70.7) FIESTA RESTAURAN FRGI US 289.7 6.6 (13.1) FIFTH & PACIFIC FNP US 843.4 (192.2) 33.5 FREESCALE SEMICO FSL US 3,171.0 (4,531.0) 1,186.0 GENCORP INC GY US 908.1 (164.3) 48.1 GLG PARTNERS INC GLG US 400.0 (285.6) 156.9 GLG PARTNERS-UTS GLG/U US 400.0 (285.6) 156.9 GRAHAM PACKAGING GRM US 2,947.5 (520.8) 298.5 GRAMERCY CAPITAL GKK US 2,236.3 (293.1) - HCA HOLDINGS INC HCA US 28,075.0 (8,341.0) 1,591.0 HOVNANIAN ENT-A HOV US 1,684.2 (485.3) 870.1 HOVNANIAN ENT-B HOVVB US 1,684.2 (485.3) 870.1 HUGHES TELEMATIC HUTC US 110.2 (101.6) (113.8) HUGHES TELEMATIC HUTCU US 110.2 (101.6) (113.8) INCYTE CORP INCY US 296.5 (220.0) 141.1 INFOR US INC LWSN US 5,846.1 (480.0) (306.6) IPCS INC IPCS US 559.2 (33.0) 72.1 ISTA PHARMACEUTI ISTA US 124.7 (64.8) 2.2 JUST ENERGY GROU JE US 1,510.8 (273.1) (287.1) JUST ENERGY GROU JE CN 1,510.8 (273.1) (287.1) LEHIGH GAS PARTN LGP US 303.2 (38.1) (18.9) LIMITED BRANDS LTD US 6,427.0 (515.0) 973.0 LIN TV CORP-CL A TVL US 864.4 (35.0) 67.2 LORILLARD INC LO US 3,424.0 (1,564.0) 1,364.0 MARRIOTT INTL-A MAR US 5,865.0 (1,296.0) (1,532.0) MERITOR INC MTOR US 2,341.0 (1,011.0) 224.0 MONEYGRAM INTERN MGI US 5,150.6 (161.4) (35.5) MORGANS HOTEL GR MHGC US 577.0 (125.2) (8.7) MPG OFFICE TRUST MPG US 1,867.2 (729.2) - NATIONAL CINEMED NCMI US 828.0 (347.7) 107.6 NAVISTAR INTL NAV US 9,102.0 (3,260.0) 1,484.0 NEXSTAR BROADC-A NXST US 611.4 (160.3) 35.1 NPS PHARM INC NPSP US 165.5 (46.7) 121.9 NYMOX PHARMACEUT NYMX US 2.1 (7.7) (1.6) ODYSSEY MARINE OMEX US 33.6 (22.2) (25.4) ORGANOVO HOLDING ONVO US 9.0 (27.4) 7.3 PALM INC PALM US 1,007.2 (6.2) 141.7 PDL BIOPHARMA IN PDLI US 249.9 (115.5) 170.6 PEER REVIEW MEDI PRVW US 2.1 (3.4) (4.0) PHILIP MORRIS IN PM US 37,670.0 (1,853.0) (426.0) PLAYBOY ENTERP-A PLA/A US 165.8 (54.4) (16.9) PLAYBOY ENTERP-B PLA US 165.8 (54.4) (16.9) PRIMEDIA INC PRM US 208.0 (91.7) 3.6 PROTECTION ONE PONE US 562.9 (61.8) (7.6) QUALITY DISTRIBU QLTY US 513.1 (19.7) 62.0 REALOGY HOLDINGS RLGY US 7,351.0 (1,742.0) (484.0) REGAL ENTERTAI-A RGC US 2,198.1 (552.4) 77.4 REGULUS THERAPEU RGLS US 40.7 (8.5) 21.0 RENAISSANCE LEA RLRN US 57.0 (28.2) (31.4) REVLON INC-A REV US 1,236.6 (649.3) 88.1 RLJ ACQUISITI-UT RLJAU US 0.0 (0.0) (0.0) RURAL/METRO CORP RURL US 303.7 (92.1) 72.4 SALLY BEAUTY HOL SBH US 1,969.9 (157.2) 637.4 SAREPTA THERAPEU SRPT US 53.1 (4.6) (13.0) SHUTTERSTOCK INC SSTK US 46.7 (29.9) (32.9) SINCLAIR BROAD-A SBGI US 2,245.5 (52.4) (14.1) TAUBMAN CENTERS TCO US 3,152.7 (86.1) - TESLA MOTORS TSLA US 809.2 (27.9) (101.3) TESORO LOGISTICS TLLP US 291.3 (78.5) 50.7 THERAPEUTICS MD TXMD US 3.5 (4.3) (1.1) THRESHOLD PHARMA THLD US 86.2 (44.1) 68.2 ULTRA PETROLEUM UPL US 2,593.6 (109.6) (266.6) UNISYS CORP UIS US 2,420.4 (1,588.7) 482.1 VECTOR GROUP LTD VGR US 885.6 (102.9) 243.0 VERISIGN INC VRSN US 2,100.5 (9.3) 986.5 VIRGIN MOBILE-A VM US 307.4 (244.2) (138.3) VISKASE COS I VKSC US 334.7 (3.4) 113.5 WEIGHT WATCHERS WTW US 1,198.0 (1,720.4) (273.7) ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Carmel Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2013. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***