/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130305.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, March 5, 2013, Vol. 17, No. 63 Headlines 107 4TH AVE: Updated Case Summary & Creditors' Lists 169-171 NOSTRAND: Case Summary & Unsecured Creditor 22ND CENTURY: H. Sicignano Has 16.6% Equity Stake at Feb. 25 22ND CENTURY: J. Pandolfino Owns 20.7% Equity Stake at Feb. 25 710 LONG RIDGE: Section 341(a) Meeting Scheduled for April 3 A & F ENTERPRISES: Updated Case Summary & Creditors' Lists ALLEN PARK, MI: S&P Lowers Rating on GO Bonds to 'B-' AMERICAN AIRLINES: Gets DOJ Info Request on US Airways Merger AMERICAN AIRLINES: JetBlue Wants to Expand Partnership AMERICAN AIRLINES: Yahoo! Credit Refund Approved AMERICAN AIRLINES: TAMC Woos Maintenance Workers AMERICAN AIRLINES: Files 2012 Annual Financial Report AMERICAN AXLE: Completes Sale of $400 Million of 6.25% Sr. Notes AMERICAN COMMERCE: Amends 2012 Annual and Quarterly Reports ANSUNG-USA LLC: Case Summary & 12 Largest Unsecured Creditors ARMSTRONG WORLD: Moody's Rates Senior Debt Facility 'B1' BABA LODGING: Voluntary Chapter 11 Case Summary BEALL CORP: Okayed to Sell Beall Bullet Division to Aulick BION ENVIRONMENTAL: To Issue Add'l 4MM Shares Under 2006 Plan CARL'S PATIO: Has Final OK to Obtain $3.75MM of DIP Financing CENTRAL EUROPEAN: Obtains $50MM Credit Facility From RTL Trading CHARLES W. BENNINGTON: May Begin Soliciting Plan Votes CHEM RX: Court Trims $9.8MM Clawback Suit Against Bellco CLEAR CHANNEL: Bank Debt Trades at 14% Off in Secondary Market COMMUNICOM CORP: Updated Case Summary & Creditors' Lists COMMUNITY FINANCIAL: Otter Creek Holds 16.5% Stake at Dec. 21 COMMUNITY TOWERS: Court Denies Confirmation of Chapter 11 Plan COMMUNITY WEST: W. Peeples Reports 21.5% Stake as of Oct. 8 CONEXANT SYSTEMS: Plan Offers 4.1% Recovery for Unsec. Creditors CONEXANT SYSTEMS: Soros DIP Financing Has Interim Approval CONEXANT SYSTEMS: Proposes to Implement Severance Program COOL MUSIC: Case Summary & 20 Largest Unsecured Creditors CORNERSTONE CHEMICAL: Moody's Rates New $220-Mil. Senior Notes B3 CORNERSTONE CHEMICAL: S&P Assigns Prelim. 'B- Corp. Credit Rating CROWN HOLDINGS: Fitch Affirms 'BB+' Issuer Default Rating DEX MEDIA EAST: Bank Debt Trades at 29% Off in Secondary Market DEX MEDIA WEST: Bank Debt Trades at 24% Off in Secondary Market DIAL GLOBAL: Lenders Agree to Recapitalize Credit Facilities DYNAMIC COMPUTER: Case Summary & 2 Unsecured Creditors EASTMAN KODAK: Seeks Approval to Cancel Contracts with OTC, et al. ECO BUILDING: Incurs $3.7 Million Net Loss in Dec. 31 Quarter EL FARMER: Has Access to BPPR Cash Collateral Until April 30 EMMIS COMMUNICATIONS: Sells 98% Title in Radio Network for $21MM ENDEAVOUR INT'L: Weak Liquidity Cues Moody's to Cut CFR to Caa3 ENDLESS MOUNTAINS: Voluntary Chapter 11 Case Summary EPICEPT CORP: Incurs $872,000 Net Loss in Fourth Quarter ESIO HOLDING: Bankruptcy Filing No Impact on Esio Water Status ESA ENVIRONMENTAL: 4th Cir. Says Hanover Can Keep $1.375MM FANNIE MAE: David Benson Succeeds Susan McFarland as CFO FLAMINGO 55: Nevada Court Won't Reinstate Grantham Lawsuit FRANK PARSONS: Suits v. Insurer, Int'l Paper Remain Pending FREESEAS INC: Issues 200,000 Additional Shares to Hanover GARY STANCIL: Gets Favorable Ruling in Suit v. Bradley Investments GMX RESOURCES: Gets NYSE Listing Non-Compliance Notice GRAN RANCHO: Case Summary & 2 Unsecured Creditors GREEN ENERGY: R. Thomson Discloses 32.6% Equity Stake at Dec. 31 HAMPTON ROADS: Names Schroeder as Bank's SVP-Commercial Banking HARLAN LABORATORIES: Moody's Affirms 'B3' CFR; Outlook Stable IBIO INC: Gets NYSE MKT Listing Non-Compliance Notice INKIA ENERGY: Fitch Hikes Issuer Default Rating to 'BB' IN THE PLAY: Involuntary Chapter 11 Case Summary JACKSONVILLE BANCORP: Sutherland Asset Owns 9.9% Stake at Feb. 18 JAWSS PARTNERSHIP: Case Summary & 6 Largest Unsecured Creditors JARDEN CORP: Share Repurchase No Impact on Moody's 'Ba3' CFR JGP PROPERTIES: Case Summary & 20 Largest Unsecured Creditors JORGE ANDRARDE: Voluntary Chapter 11 Case Summary K-V PHARMACEUTICALS: Creditors Ask Judge to Delay Plan Hearing LAGUNA BRISAS: Property Valued at $12 Million Per Stipulation LAGUNA BRISAS: Can Pay $22,000 Holdback Fees to General Counsel LAHAINA FASHIONS: Final Judgment in Suit vs. Bank of Hawaii Upheld LEHMAN BROTHERS: Sues Spanish Broadcasting in Delaware Court LEHMAN BROTHERS: Loses Nearly $10MM on Sale of Arts Park Village LEHMAN BROTHERS: LBI Trustee Seeks to Let Go of Dividends LEHMAN BROTHERS: AOZORA Claim Allowed for $480 Million LHC LLC: Section 341(a) Meeting Scheduled for March 28 LIME ENERGY: Gets Second Nasdaq Listing Non-Compliance Notice LONE PINE: S&P Cuts CCR to 'B-' & Rates Sr. Unsecured Notes 'CCC' MEDIACOM COMMUNICATIONS: S&P Affirms 'B+' CCR; Outlook Positive MERRILL COMMUNICATIONS: Loan Upsize No Impact on Moody's CFR MGM RESORTS: Moody's Says Distribution Policy is Credit Positive MISSION NEWENERGY: Posts $4 Million Net Profit in Half-Year 2012 MISTY MORNING: Case Summary & 20 Largest Unsecured Creditors MMM HOLDINGS: Moody's Affirms B2 Rating on Senior Secured Debt MRJP LLC: Case Summary & 13 Largest Unsecured Creditors MSR RESORT: Judge Won't Stay Plan Confirmation MTS LAND: Withdraws Motion to Incur Postpetition Financing NEW YORK SKYLINE: ESB Obtains Judgment Dismissing Skyline Claim NORANDA ALUMINUM: Moody's Cuts Rating on Senior Term Loan to 'B1' OHIO VALLEY: Moody's Lowers Bond Rating One Notch to 'Ba3' ORMET CORP: Secures Interim Approval of Wayzata DIP Loans ORMET CORP: Proposes Wayzata-Led Auction on May 13 ORMET CORP: Wins Approval for Kurtzman Carson as Claims Agent ORMET CORP: Section 341(a) Meeting Scheduled for April 11 OVERSEAS SHIPHOLDING: Severance & Incentive Plan Approvals Sought OXFORD BUILDING: REIT Services Provider in Chapter 11 OXFORD BUILDING: Section 341(a) Meeting Scheduled for April 10 OXFORD BUILDING: Meeting to Form Creditors' Panel on March 13 PAULS VALLEY HOSPITAL AUTHORITY: Chapter 9 Case Summary POLAR MOLECULAR: Ct. Grants Summary Judgment in Suit vs. Woodward PORTER BANCORP: Incurs $32.9 Million Net Loss in 2012 POWERWAVE TECHNOLOGIES: U.S. Trustee Objects to Bidding Procedures PROPHECY COAL: Tulgalgatai Sales Deal Expiry Constitutes Default QUALITY CANDY: Avoidance Suit Against Bardes Plastics Dismissed QUICK-MED TECHNOLOGIES: Appoints Two Directors to Board RADIAN GROUP: Completes Concurrent Common Stock Offerings R&A PETROLEUM: Court Threatens to Dismiss Chapter 11 RCN TELECOM: Moody's Affirms 'B1' CFR Following Term Loan Upsize RESIDENTIAL CAPITAL: Reduces Exclusivity Extension Bid to 60 Days RESIDENTIAL CAPITAL: Committee Has Conditional Support for CRO RESIDENTIAL CAPITAL: Seeks to Terminate FRB Foreclosure Review REVEL AC: Dennis Stogsdill Appointed Chief Restructuring Officer REVSTONE INDUSTRIES: PBGC to Bridge $46M Gap in Unit's Pension RIDGELAND APARTMENT: Can Hire CBRE Inc. as Appraiser RITE AID: Moody's Retains 'B3' Rating on 2 Certificate Classes ROYAL TOURS: Estate May Recoup 3 Payments From Patsy Hilliard RPP LLC: Voluntary Chapter 11 Case Summary RYAN INT'L: Case Converted to Chapter 7 Liquidation SCI REAL ESTATE: Liquidating Trustee Files Adversary Clawback SCOTELLE DEVELOPMENT: Case Summary & 8 Unsecured Creditors SECUREALERT INC: Sapinda Asia Hikes Stake to 62.7% at Dec. 3 SHELDRAKE LOFTS: OK'd to Sell Real Properties to Winning Bidder SIGNATURE STATION: Plan Filing Period Extended Until June 10 SINCLAIR BROADCAST: Asset Purchase No Impact on Moody's Ba3 CFR SNUFFER'S RESTAURANTS: Files Chapter 11, to Explore Sale SORENSON COMMUNICATIONS: Moody's Gives Caa2 Corp. Family Rating SPRINGHILL PARTNERS: Voluntary Chapter 11 Case Summary THELEN LLP: Bankruptcy Judge Blesses Partner Settlements TITAN INTERNATIONAL: Moody's Rates $275MM Add-on Sr. Notes 'B1' TXU CORP: 2017 Bank Debt Trades at 32% Off in Secondary Market TXU CORP: 2014 Bank Debt Trades at 28% Off in Secondary Market UNI-PIXEL INC: To Present at ROTH Capital Conference on March 19 VISUALANT INC: Amends Q4 Form 10-K to Update Risk Factors VITRO SAB: Reaches Accord With Dissenting Bondholders, Fintech W.R. GRACE: Post-Confirmation Report for Quarter Ended Dec. 31 W.R. GRACE: Libby Victims' Lawyers Seek $4-Mil. in Asbestos Deal W.R. GRACE: Releases 2012 Annual Financial Report WASHINGTON MUTUAL: High Court Asked to Consider Class Fee Notices WESTINGHOUSE SOLAR: Alpha Capital Owns 9% Stake at Feb. 27 YTB INTERNATIONAL: Files for Chapter 11 Bankruptcy * Fitch Says Recent Store Closure Trend Expected * Fitch Study Checks Impact of Industry Selection on Default * Sequestration Manageable for US Public Finance Firms, Fitch Says * Utility Downgrades Accelerate Significantly in 2012, Fitch Says * Budget Cuts Won't Impact Defense Industry in the Short Term * Global Corporate Default Rate Stays Low in 2012, Says Moody's * Banks Find More Wrongful Foreclosures Among Military Members * DOJ Takes Swipes at D.C. Circuit's Recess Appointment Ruling * Say-On-Pay Following in Footsteps of M&A Suits * RBS, Deutsche Bank Lose Appeal in Mortgage-Bond Lawsuit * Large Companies With Insolvent Balance Sheets ********* 107 4TH AVE: Updated Case Summary & Creditors' Lists ---------------------------------------------------- Lead Debtor: 107 4th Ave LLC 107 4th Ave. Brooklyn, NY 11217 Bankruptcy Case No.: 13-41048 Chapter 11 Petition Date: February 27, 2013 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtors' Counsel: Bruce Weiner, Esq. ROSENBERG MUSSO & WEINER LLP 26 Court Street, Suite 2211 Brooklyn, NY 11242 Tel: (718) 855-6840 Fax: (718) 625-1966 E-mail: rmwlaw@att.net Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- 109 4th Ave LLC 13-41049 Assets: $500,001 to $1,000,000 Debts: $1,000,001 to $10,000,000 109A 4th Ave LLC 13-41050 111-113 4th Avenue LLC 13-41051 Forte Investment LLC 13-41052 QuatroT LLC 13-41053 The petitions were signed by Domenick Tonacchio, managing member. A. In its list of 20 largest unsecured creditors, 107 4th Ave wrote only two entries: Entity Nature of Claim Claim Amount ------ --------------- ------------ Stucco Systems Inc. $120,000 620 New York Avenue Trenton, NJ 08638 RCI Plumbin 547 Midland Avenue Staten Island, NY 10306 $70,000 B. In its list of 20 largest unsecured creditors, 109 4th Ave wrote only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Stucco Systems Inc. $120,000 620 New York Avenue Trenton, NJ 08638 169-171 NOSTRAND: Case Summary & Unsecured Creditor --------------------------------------------------- Debtor: 169-171 Nostrand Avenue LLC 246-15 Jamaica Avenue Bellrose, NY 11426 Bankruptcy Case No.: 13-41115 Chapter 11 Petition Date: February 28, 2013 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Nancy Hershey Lord Debtor's Counsel: Narissa A. Joseph, Esq. LAW OFFICE OF NARISSA JOSEPH 277 Broadway, Suite 501 New York, NY 10007 Tel: (212) 233-3060 Fax: (212) 608-0304 E-mail: njosephlaw@aol.com Scheduled Assets: $3,000,020 Scheduled Liabilities: $2,000,000 The petition was signed by Assaf Moshe, president. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Willoughby Apartments, LLC Bank Loan $1,800,000 C/O Alexander T. Singer 26 Court Street Brooklyn, NY 11242 22ND CENTURY: H. Sicignano Has 16.6% Equity Stake at Feb. 25 ------------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Henry Sicignano III disclosed that, as of Feb. 25, 2013, he beneficially owns 6,084,927 shares of common stock of 22nd Century Group, Inc., representing 16.6% of the shares outstanding. A copy of the filing is available at: http://is.gd/AMLxTH About 22nd Century Clarence, New York-based 22nd Century Group, Inc., through its wholly-owned subsidiary, 22nd Century Ltd, is a plant biotechnology company using technology that allows for the level of nicotine and other nicotinic alkaloids (e.g., nornicotine, anatabine and anabasine) in tobacco plants to be decreased or increased through genetic engineering and plant breeding. Freed Maxick CPAs, PC, in Buffalo, New York, expressed substantial doubt about 22nd Century Group's ability to continue as a going concern following the results for the year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and, as of Dec. 31, 2011, has negative working capital of $1.9 million and a shareholders' deficit of $1.2 million. "Additional financing will be required during 2012 in order to satisfy existing current obligations and finance working capital needs, as well as additional losses from operations that are expected in 2012." The Company incurred a net loss of $1.34 million in 2011, following a net loss of $1.42 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.63 million in total assets, $4.99 million in total liabilities and a $2.35 million total shareholders' deficit. 22ND CENTURY: J. Pandolfino Owns 20.7% Equity Stake at Feb. 25 -------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Joseph Pandolfino disclosed that, as of Feb. 25, 2013, he beneficially owns 7,707,296 shares of common stock of 22nd Century Group, Inc., representing 20.7% of the shares outstanding. A copy of the filing is available at: http://is.gd/nTNcry About 22nd Century Clarence, New York-based 22nd Century Group, Inc., through its wholly-owned subsidiary, 22nd Century Ltd, is a plant biotechnology company using technology that allows for the level of nicotine and other nicotinic alkaloids (e.g., nornicotine, anatabine and anabasine) in tobacco plants to be decreased or increased through genetic engineering and plant breeding. Freed Maxick CPAs, PC, in Buffalo, New York, expressed substantial doubt about 22nd Century Group's ability to continue as a going concern following the results for the year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and, as of Dec. 31, 2011, has negative working capital of $1.9 million and a shareholders' deficit of $1.2 million. "Additional financing will be required during 2012 in order to satisfy existing current obligations and finance working capital needs, as well as additional losses from operations that are expected in 2012." The Company incurred a net loss of $1.34 million in 2011, following a net loss of $1.42 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.63 million in total assets, $4.99 million in total liabilities and a $2.35 million total shareholders' deficit. 710 LONG RIDGE: Section 341(a) Meeting Scheduled for April 3 ------------------------------------------------------------ A meeting of creditors in the bankruptcy case of 710 Long Ridge Road Operating Company II LLC and its affiliates will be held on April 3, 2013, at 10:00 a.m. at Suite 1401, One Newark Center. Creditors have until July 2 to file their proofs of claim. 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 710 Long Ridge 710 Long Ridge Road Operating Company II, LLC and four affiliates own sub-acute and long-term nursing care facilities for the elderly in Connecticut. The facilities are Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. 710 Long Ridge and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 13-13653 to 13-13657) on Feb. 24, 2013. The Debtors owe $18.9 million to M&T Bank and $7.99 million on loans from the U.S. Department of Housing and Urban Development Federal Housing Administration. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serve as counsel to the Debtors. Logan & Company, Inc. is the claims and notice agent. A & F ENTERPRISES: Updated Case Summary & Creditors' Lists ---------------------------------------------------------- Lead Debtor: A & F Enterprises, Inc. II 6501 W North Avenue Oak Park, IL 60302 Bankruptcy Case No.: 13-07930 Chapter 11 Petition Date: February 28, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Donald R. Cassling Debtors' Counsel: Michael C. Moody, Esq. O'ROURKE& MOODY 55 West Wacker Drive Suite 1400 Chicago, IL 60601 Tel: (312) 849-2020 Fax: (312) 849-2021 E-mail: mmoody@orourkeandmoody.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $100,001 to $500,000 Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- AbuBecker Inc. 13-07967 Assets: $500,001 to $1,000,000 Debts: $1,000,001 to $10,000,000 AEA Enterprises, Inc 13-07983 Assets: $500,001 to $1,000,000 Debts: $100,001 to $500,000 AEE Enterprises Inc 13-07990 Assets: $500,001 to $1,000,000 Debts: $100,001 to $500,000 East Peoria Enterprises Inc 13-07995 Assets: $500,001 to $1,000,000 Debts: $100,001 to $500,000 Fatma Enterprises Inc. 13-08007 Assets: $500,001 to $1,000,000 Debts: $100,001 to $500,000 Halima I, Inc. 13-08013 Assets: $500,001 to $1,000,000 Debts: $100,001 to $500,000 Sabah Restaurant Inc 13-08028 Assets: $500,001 to $1,000,000 Debts: $100,001 to $500,000 Westchester Enterprises Inc. 13-08041 Assets: $500,001 to $1,000,000 Debts: $100,001 to $500,000 Mahmoud Inc. 13-08049 Assets: $500,001 to $1,000,000 Debts: $100,001 to $500,000 El Sayed Inc 13-08057 Assets: $500,001 to $1,000,000 Debts: $100,001 to $500,000 Elham Inc 13-80639 Assets: $500,001 to $1,000,000 Debts: $100,001 to $500,000 The petitions were signed by Ali Alforookh, authorized signatory of AandF Enterprises, Inc., sole owner. A. A copy of A & F Enterprises II's list of its seven largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-07930.pdf B. A copy of AbuBecker's list of its nine largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-07967.pdf C. A copy of AEA Enterprises' list of its 15 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-07983.pdf D. A copy of AEE Enterprises' list of its 18 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-07990.pdf E. A copy of East Peoria Enterprises' list of its 16 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-07995.pdf F. A copy of Fatma Enterprises' list of its 11 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-08007.pdf G. A copy of Halima I's list of its 13 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-08013.pdf H. A copy of Sabah Restaurant's list of its 13 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-08028.pdf I. A copy of Westchester Enterprises' list of its 10 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-08041.pdf J. A copy of Mahmoud's list of its 16 largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-08049.pdf K. A copy of El Sayed's list of its three largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-08057.pdf L. A copy of Elham's list of its three largest unsecured creditors is available for free at http://bankrupt.com/misc/ilnb13-80639.pdf ALLEN PARK, MI: S&P Lowers Rating on GO Bonds to 'B-' ----------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term and underlying rating (SPUR) to 'B-' from 'B' on Allen Park City, Mich.'s unlimited-tax general obligation (GO) bonds and limited- tax GO bonds, some of which were issued by the Allen Park Building Authority, and the Allen Park Brownfield Redevelopment Authority. At the same time, Standard & Poor's removed the ratings from CreditWatch with negative implications. The outlook is stable. "The lowered rating reflects our view that, despite the state's installation of an emergency financial manager, who has developed a plan to improve the city's finances and return to a positive fund balance by fiscal 2015, the city remains severely pressured financially," said Standard & Poor's credit analyst Caroline West. "Even with the emergency financial manager's help, we believe the city still faces significant challenges to improve its financial standing," Ms. West added. As a result of the deteriorating finances, in October 2012, the governor of Michigan declared a financial emergency in the city after an extensive review of the city's financial standing, concluding that no satisfactory plan existed to solve the city's serious financial problems and that city officials could not solve these problems without outside assistance. Pursuant to Public Act 72, the governor appointed an emergency financial manager. AMERICAN AIRLINES: Gets DOJ Info Request on US Airways Merger ------------------------------------------------------------- AMR Corporation, the parent company of American Airlines, Inc., and US Airways Group, Inc. disclosed that, on March 4, 2013, each company received a request for additional information from the U.S. Department of Justice in connection with the proposed merger of the two airlines. A DOJ Second Request is a standard part of the regulatory process. A Second Request extends the waiting period under the Hart-Scott- Rodino Antitrust Improvements Act of 1976, as amended, during which the parties may not close the transaction, until 30 days after American Airlines and US Airways have substantially complied with the Second Request (or the waiting period is otherwise terminated by the DOJ). American Airlines and US Airways expect to respond promptly to the Second Request and to continue working cooperatively with the DOJ as it conducts its review of the proposed combination. American Airlines and US Airways continue to expect the combination to be completed in the third quarter of 2013. The merger is conditioned on the approval by the U.S. Bankruptcy Court for the Southern District of New York, regulatory approvals, approval by US Airways shareholders, other customary closing conditions, and confirmation and consummation of the Plan of Reorganization. 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. 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. AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. 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: JetBlue Wants to Expand Partnership ------------------------------------------------------ The Wall Street Journal's Susan Carey reports that JetBlue Airways Corp.'s Chief Executive Dave Barger said Monday at the J.P. Morgan aviation, transportation and defense conference in New York that he wants to expand and deepen the carrier's partnership with American Airlines later this year. JetBlue has a deal in which it feeds its passengers to some American Airlines international flights. WSJ notes American parent AMR Corp.'s proposed merger with US Airways Group Inc. will boost the combined carrier's presence in some markets where it overlaps with JetBlue. Those includes routes out of Boston and from New York to the West Coast, Mr. Barger said. Currently, American passengers can make connections to 26 JetBlue domestic routes that American doesn't serve, and JetBlue fliers can connect to 15 American international flights not flown by JetBlue. According to the WSJ report, Mr. Barger said further cooperation between the two would center at New York's John F. Kennedy International Airport, JetBlue's largest operation. 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. 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. AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. 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: Yahoo! Credit Refund Approved ------------------------------------------------ The U.S. Bankruptcy Court in Manhattan approved an agreement between AMR Corp. and Yahoo! Inc. The deal calls for payment by Yahoo! Inc. of $210,122 for refundable advertising credit due to AMR pursuant to their November 2011 contract. The agreement is available for free at http://is.gd/0tKjkQ 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. 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. AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. 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: TAMC Woos Maintenance Workers ------------------------------------------------ The Teamsters Airline Division and the Teamsters Aviation Mechanics Coalition (TAMC) on Feb. 16, 2013, disclosed that at many maintenance stations across the country, American Airlines mechanics and related workers have reached a majority of cards signed for Teamster representation. With a majority of cards at the major hubs in hand, the Teamsters Union is nearing majority support throughout the system and is one step closer to filing for an election with the National Mediation Board. The union has received the majority of cards in Tulsa, OK, Fort Worth, TX, Los Angeles, Miami, San Francisco, Newark, NJ, Tampa, Atlanta, Washington, DC, Las Vegas, San Antonio, Phoenix, New York's Kennedy airport and DWH in Texas. "With 11,000 workers spread out across the country, this has been a major undertaking that has been led by AA mechanics from the beginning," said Chris Moore, a representative of the Teamsters Airline Division and Chairman of the TAMC. "It is their passion and desire to improve their representation that drove this campaign and enabled us to get to this point in such a relatively short time." In September 2012, the AA mechanics kicked off their campaign to seek industry-leading representation with the Teamsters Union. While facing the challenges of bankruptcy and a merger with US Airways, the AA mechanics in conjunction with the TAMC and the Teamsters Airline Division have been working tirelessly to gain majority support for the union. "This is a huge step in the right direction in a short amount of time," said Joe Moberly, 24-year American Airlines mechanic at the Tulsa hub. "We are well on our way to being a part of the union that represents more aviation mechanics than any other in the nation -- the Teamsters." In addition to the announcement, Teamster organizers, Teamster mechanics from other airlines, AA mechanics and US Airways mechanics will engage in door-to-door canvassing over the weekend to gather even more cards. Founded in 1903, the International Brotherhood of Teamsters represents more than 80,000 workers throughout the airline industry in every craft and class, including 18,000 airline mechanics and related at 10 carriers -- more than any other union. 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. 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. AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. 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: Files 2012 Annual Financial Report ----------------------------------------------------- AMR Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $1.87 billion on $24.85 billion of total operating revenues for the year ended Dec. 31, 2012, as compared with a net loss of $1.97 billion on $23.97 billion of total operating revenues for the year ended Dec. 31, 2011, and a net loss of $471 million on $22.17 billion of total operating revenues for the year ended Dec. 31, 2010. The Company's balance sheet at Dec. 31, 2012, showed $23.51 billion in total assets, $31.49 billion in total liabilities and a $7.98 billion stockholders' deficit. In its Annual Report, AMR disclosed that its merger agreement with US Airways Group, Inc., contains certain termination rights and provides that the agreement may be terminated under specified circumstances, (i) AMR may be required to pay US Airways a termination fee of $135 million in the event it terminates the agreement to enter into a superior proposal and $195 million if US Airways terminates the Merger Agreement in the event of a knowing and deliberate breach of the Merger Agreement by AMR and (ii) US Airways may be required to pay AMR a termination fee of $55 million in the event it terminates the agreement to enter into a superior proposal and $195 million if AMR terminates the Merger Agreement in the event of a knowing and deliberate breach of the Merger Agreement by US Airways. A copy of the Form 10-K is available for free at: http://is.gd/01oBzL 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. 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. AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 ). AMERICAN AXLE: Completes Sale of $400 Million of 6.25% Sr. Notes ---------------------------------------------------------------- American Axle & Manufacturing, Inc., a wholly owned subsidiary of American Axle & Manufacturing Holdings, Inc., completed the closing of the sale of $400 million aggregate principal amount of 6.25% senior notes due 2021. The Notes are guaranteed on a senior unsecured basis by the Company and certain of AAM's current and future subsidiaries. The Notes were issued by AAM pursuant to an Indenture, dated as of Nov. 3, 2011, by and among AAM, the Guarantors and U.S. Bank National Association, as trustee, which governs the terms of the Notes. About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE: AXL) -- http://www.aam.com/-- manufactures, engineers, designs and validates driveline and drivetrain systems and related components and chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles and commercial vehicles. The Company's balance sheet at Dec. 31, 2012, showed $2.86 billion in total assets, $2.98 billion in total liabilities, and a $120.8 million total stockholders' deficit. * * * In January 2012, Fitch Ratings has affirmed the 'B+' Issuer Default Ratings (IDRs) of American Axle & Manufacturing. Fitch expects leverage to trend downward over the intermediate term, however, as the company gains traction on its new business wins. Looking ahead, Fitch expects free cash flow to be relatively weak, but positive, in 2012 with the steep ramp-up in new business and as the company continues to make investments in both capital assets and research and development work to support growth opportunities in its customer base and product offerings. Beyond 2012, free cash flow is likely to strengthen meaningfully as the new programs coming on line in the near term begin to produce higher levels of cash. In September 2012, Moody's Investors Service affirmed the B1 Corporate Family Rating (CFR) and Probability of Default Rating (PDR) of American Axle. American Axle carries a 'BB-' corporate credit rating from Standard & Poor's Ratings Services. "The 'BB-' corporate credit rating on American Axle reflects the company's 'weak' business risk profile and 'aggressive' financial risk profile, which incorporate substantial exposure to the highly cyclical light- vehicle market," S&P said, as reported by the TCR on Sept. 6, 2012. AMERICAN COMMERCE: Amends 2012 Annual and Quarterly Reports ----------------------------------------------------------- American Commerce Solutions, Inc., has amended its annual report on Form 10-K for the fiscal year ended Feb. 29, 2012, originally filed on May 23, 2012, to amend Item 9(A) Controls and Procedures. The material weaknesses assessed by the Company's management were: (1) the Company has not implemented measures that would prevent the chief executive officer and the chief financial officer from overriding the internal control system; and (2) the Company's board of directors has determined that the Company's audit committee does not have an independent "financial expert" as that term is defined under federal securities law. The Company does not believe that these material weaknesses have resulted in deficient financial reporting because both the chief executive officer and the chief financial officer are aware of their responsibilities under the SEC's reporting requirements and they both personally certify the Company's financial reports. "...[W]hile we have identified material weaknesses in our system of internal control over financial reporting, we believe we have taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles. Our management has determined that current resources would be appropriately applied elsewhere and when resources permit, it will address and remediate material weaknesses through implementing various controls or changes to controls. At such time as we have additional financial resources available to us, we intend to enhance our controls and procedures. We will not be able to assess whether the steps we intend to take will fully remedy the material weakness in our internal control over financial reporting until we have fully implemented them and sufficient time passes in order to evaluate their effectiveness." A copy of the Form 10-K, as amended, is available at: http://is.gd/knhANu The Company also amended its quartely reports on Forms 10-Q for the fiscal periods ending May 31, 2012, Aug. 31, 2012, and Nov. 30, 2012, to amend Item 4(T) Controls and Procedures. Copies of the amendments are available at: http://is.gd/XBdw4r http://is.gd/m7J8h0 http://is.gd/g9abkt About American Commerce American Commerce Solutions, Inc., headquartered in Bartow, Florida, is primarily a holding company with one wholly owned subsidiary; International Machine and Welding, Inc., is engaged in the machining and fabrication of parts used in heavy industry, and parts sales and service for heavy construction equipment. As reported in the TCR on May 28, 2012, Peter Messineo, CPA, of Palm Harbor, Florida, expressed substantial doubt about American Commerce's 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 recurring losses from continuing operations, has negative working capital and has used significant cash in support of its operating activities. Additionally, as of Feb. 29, 2012 the Company is in default of several notes payable. The Company's balance sheet at Nov. 30, 2012, showed $4.93 million in total assets, $4.38 million in total liabilities and $556,410 in total stockholders' equity. ANSUNG-USA LLC: Case Summary & 12 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: ANSUNG-USA, LLC 5200 E. Grand Avenue, #600 Dallas, TX 75223 Bankruptcy Case No.: 13-30994 Chapter 11 Petition Date: February 28, 2013 Court: U.S. Bankruptcy Court Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 E-mail: eric@ealpc.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 12 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/txnb13-30994.pdf The petition was signed by Sung Doo Kim, president. ARMSTRONG WORLD: Moody's Rates Senior Debt Facility 'B1' -------------------------------------------------------- Moody's Investors Service affirmed Armstrong World Industries, Inc.'s B1 Corporate Family Rating and B1-PD Probability Default Rating. Moody's also assigned a B1 rating to the company's senior secured bank credit facility consisting of a $250 million revolving credit facility, $500 million Term Loan A, and a $525 million Term Loan B. Proceeds from the proposed term loans will be used to refinance the company's existing debt. The company's speculative grade liquidity rating was affirmed at SGL-2. The rating outlook was changed to positive from stable. The following ratings/assessments were affected by this action: Corporate Family Rating affirmed at B1; Probability of Default Rating affirmed at B1-PD; Speculative Grade Liquidity Rating affirmed at SGL-2 $250 million Senior Secured Revolving Credit Facility due 2018 assigned B1 (LGD3, 42%); $500 million Senior Secured Term Loan A due 2018 assigned B1 (LGD3, 42%); and, $525 million Senior Secured Term Loan B due 2020 assigned B1 (LGD3, 42%). Ratings Rationale: Armstrong's B1 Corporate Family Rating reflects Moody's expectations that its operating margins will continue to improve as it reaps the benefits of its ongoing cost reduction initiatives, and a more favorable product and pricing mix. Armstrong should benefit from the recovery in the new housing construction and remodeling end markets, as the company is a North American market leader in providing flooring to these sectors. Additionally, Armstrong continues to benefit from the WAVE JV, a critical earnings and cash contributor. Moody's conservatively estimate that Armstrong's adjusted EBITA margin will likely be around 9.0% over the next 12 months, inclusive of WAVE. Leverage and interest coverage metrics are solid for the rating category. Moody's projects that the company will maintain interest coverage, defined as EBITA-to-interest expense, of approximately 3.0 times and leverage slightly below 4.0 times by the end of 2013 (all ratios adjusted per Moody's methodology). The ratings are constrained by the on-going economic malaise in Europe, from which Armstrong earns about 20% of its revenues, and the potential for material future dividends. The change in rating outlook to positive from stable reflects Moody's view that Armstrong's credit metrics will improve and become more supportive of the higher rating. Also, the company's good liquidity profile and extended debt maturity profile give Armstrong the ability to meet higher demand for its products in North America and to contend with the economic uncertainties in Europe. The B1 rating assigned to the $1.275 billion senior secured bank credit facility, the same rating as the corporate family rating, reflects the preponderance of secured bank debt in Armstrong's capital structure. The bank credit facility is comprised of a $250 million revolving credit facility maturing in 2018, $500 million term loan A maturing in 2018, and $525 million term loan B maturing in 2020. The revolving credit facility and term loans would be pari passu in a recovery scenario. Proceeds from the term loan will be used to pay off the company's current term loans, whose ratings, in addition to the rating for the existing revolver, will be withdrawn. A rating upgrade is possible if operating performance continues to improve and results in EBITA-to-interest expense trending towards 4.0 times and debt-to-EBITDA improving towards 3.0 times (all ratios include Moody's standard adjustments). Ongoing cash dividends commensurate with the strong equity earnings from the WAVE JV are critical to supporting an upgrade. The ratings could be downgraded if operating performance falls below expectations or if the company experiences erosion in financial performance due to an unexpected decline in its end markets. EBITA-to-interest expense trending below 3.0 times or debt-to-EBITDA sustained above 4.5 times (all ratios incorporate Moody's standard adjustments) could pressure the ratings. Deterioration in the company's liquidity profile, significant shareholder return activities, such as debt-financed dividends or share repurchases, or debt-financed acquisitions may also stress Armstrong's ratings. Any disruption in the reported equity earnings from the WAVE JV could pressure Armstrong's operating margins, potentially resulting in negative rating actions. The principal methodology used in this rating was the Global Manufacturing Industry Methodology published in December 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. Armstrong World Industries, Inc., headquartered in Lancaster, PA, is a global manufacturer of flooring products and ceiling systems for use primarily in the construction and renovation of residential, commercial and institutional buildings. Together, Armor TPG Holdings LLC and the Asbestos Personal Injury Settlement Trust own a controlling interest in Armstrong. Revenues for the 12 months through December 31, 2012 totaled approximately $2.6 billion. BABA LODGING: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: BABA Lodging, LLC aka Howard Johnson Country Hearth Inn 1984 Airline Drive Bossier City, LA 71111 Tel: (318) 742-6000 Bankruptcy Case No.: 13-10493 Chapter 11 Petition Date: February 28, 2013 Court: U.S. Bankruptcy Court Western District of Louisiana (Shreveport) Judge: Stephen V. Callaway Debtor's Counsel: Ashton DeVan Pardue, Esq. PARDUE LAW FIRM P.O. Box 728 Springfield, LA 70462 Tel: (225) 294-2120 Fax: (225) 294-4002 E-mail: adpardue@parduelawfirm.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Jagtar Otal, manager. BEALL CORP: Okayed to Sell Beall Bullet Division to Aulick ---------------------------------------------------------- The Hon. Elizabeth Perris of the U.S. Bankruptcy Court for the District of Oregon authorized Beall Corporation to sell its bullet division to Aulick Leasing Corp., a Nebraska corporation, the winning bidder, for $2,000,000, subject to an upward adjustment of $300,000 upon the satisfaction of certain conditions. There is no back up bidder for the bullet business. The Debtor has obtained Court approval of the procedures governing the sale of the assets. In this connection, the Debtor has received five qualified bids and held the auction for Debtor's Tank and Trailer Division, the Debtor's parts and services division, and the Debtor's Beall Bullet Division on Dec. 12, 2012. No qualified bid was received for the Debtor's Construction Division, and the Construction Division was not offered for sale at the auction. A copy of the sale order is available for free at http://bankrupt.com/misc/BEALLCORPORATION_sale_order.pdf Meanwhile, the bankruptcy judge authorized Beall to pay a retention bonus to Scott Koch. About Beall Corporation Portland, Oregon-based Beall Corporation, a manufacturer of lightweight, efficient, and durable tanker trucks, trailers and related products, filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 12-37291) on Sept. 24, 2012, estimating at least $10 million in assets and liabilities. Founded in 1905, Beall has four factories and nine sale branches across the U.S. The Debtor has 285 employees, with an average weekly payroll of $300,000. Judge Elizabeth L. Perris presides over the case. The Debtor has tapped Tonkon Torp LLP as counsel. The Debtor disclosed $14,015,232 in assets and $28,791,683 in liabilities as of the Chapter 11 filing. Wabash National Corporation on Feb. 4 successfully closed on its acquisition of certain assets of the tank and trailer business of Beall for $15 million. Robert D. Miller Jr., the U.S. Trustee for Region 18, appointed six members to the official committee of unsecured creditors. Ball Janik LLP represents the Committee. BION ENVIRONMENTAL: To Issue Add'l 4MM Shares Under 2006 Plan ------------------------------------------------------------- Bion Environmental Technologies, Inc., filed a Form S-8 with the U.S. Securities and Exchange Commission to register an additional 4,000,000 shares of the Company's common stock for issuance under the 2006 Consolidated Incentive Plan for a proposed maximum aggregate offering price of $7.6 million. This increase was approved by the Company's Board of Directors on Jan. 15, 2013. A copy of the prospectus is available at http://is.gd/sx0slu About Bion Environmental Bion Environmental Technologies Inc.'s patented and proprietary technology provides a comprehensive environmental solution to a significant source of pollution in US agriculture, large scale livestock facilities known as Confined Animal Feeding Operations. Bion's technology produces substantial reductions of nutrient releases (primarily nitrogen and phosphorus) to both water and air (including ammonia, which is subsequently re-deposited to the ground) from livestock waste streams based upon the Company's operations and research to date (and third party peer review). The Company reported a net loss applicable to the Company's common stockholders of $7.35 million on $0 of revenue for the year ended June 30, 2012, compared with a net loss applicable to the Company's common stockholders of $7.54 million on $0 of revenue for the same period during the prior year. GHP Horwath, P.C., in Denver, Colorado, 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 has not generated revenue and has suffered recurring losses from operations which raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Dec. 31, 2012, showed $8.27 million in total assets, $10.11 million in total liabilities, $20,400 in Series B Redeemable Convertible Preferred Stock, and a $1.85 million total deficit. CARL'S PATIO: Has Final OK to Obtain $3.75MM of DIP Financing ------------------------------------------------------------- The Bankruptcy Court has entered a final order authorizing Carl's Patio, Inc., et al., to obtain up to $3,746,902 in postpetition financing from prepetition lender Fifth Third Bank, collateralized by first priority interest in all now existing and hereafter acquired real and personal property of each Debtor's estate, but excluding claims of the Debtors under Chapter 5 of the Bankruptcy Code. Fifth Third will also have an allowed superpriority administrative claim pursuant to Section 364(c)(1) of the Bankruptcy Code, having priority in right of payment over any and all other obligations and all administrative expenses or priority claims. As of the Petition Date, Fifth Third Bank was owed not less than $5,211,595, secured by substantially all assets of the Debtors. The Debtors are also authorized to use cash collateral of Fifth Third Bank until the expiration of the lender's commitment to lend under the DIP Credit Agreement. As additional adequate protection for the diminution in the value of its interests in the prepetition collateral, including cash collateral, Wells Fargo is granted replacement liens in all Collateral, and an allowed superpriority administrative expense claim in each of the cases and any successor case. Wells Fargo will have the right to "credit bid" the amount of its claims during any sale of all or substantially all of the Debtors' assets. A copy of the Final DIP Order is available at: http://bankrupt.com/misc/carl'spatio.doc79.pdf About Carl's Patio Founded in 1993, Carl's Patio claims to be a leading retailer of upscale outdoor furniture and accessories. The company operates 10 retail locations and a warehouse in South Florida. The company has 68 employees. The company leases all its locations and doe not own any real property. Carl's Patio, Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. 13-10102) on Jan. 21, 2013, and immediately conveyed plans to sell the business to Weinberg Capital, absent higher and better offers. Carl's Patio estimated total assets and total debts of $10 million to $50 million. The Debtor owes $2.19 million on a secured revolver, and $3.01 million on a term loan from Fifth Third. The Debtor also has $600,000 of subordinated debt. Attorneys at Platzer, Swergold, Karlin, Levine, Goldberg & Jaslow, LLP, in New York, N.Y., represent the Official Committee as lead counsel. Attorneys at Cross & Simon, P.C., in Wilmington, Del., represent Committee as local counsel. CBIZ MHM, LLC, serves as the Committee's financial advisors. CENTRAL EUROPEAN: Obtains $50MM Credit Facility From RTL Trading ---------------------------------------------------------------- Central European Distribution Corporation and Roust Trading Ltd. have entered into a credit facility with an aggregate principal amount of $50 million. Most of the Company's subsidiaries are guarantors under the RTL Credit Facility. The RTL Credit Facility benefits from security granted by certain of the Company's subsidiaries in Russia over inventory of specified brands with an aggregate value of goods in circulation at any time not less than 2,170,000,000 Russian rubles (approximately $70 million) calculated by reference to the balance sheet value of the goods (excluding VAT). Pursuant to the terms of the RTL Credit Facility, $50 million aggregate principal amount of the 3% senior notes due 2013 issued by the Company to RTL in May, 2012, is being converted into a new term loan from Roust Trading to the Company in an aggregate principal amount of $50 million. The amounts owed under the RTL Credit Facility are to be used for working capital and general corporate purposes. The RTL Credit Facility has a final maturity date falling 12 months after the date on which the Conversion takes place. Subject to certain conditions, CEDC may voluntarily prepay the whole or any part of the RTL Credit Facility by giving not less than 5 business days' notice to Roust Trading. The RTL Credit Facility bears interest at 3.00% per annum and accrued interest under the RTL Credit Facility will be payable by the Company on March 18, 2013, Sept. 18, 2013, and the Final Maturity Date. On the last day of the first interest period under the RTL Credit Facility, the Company will also pay to Roust Trading an amount equal to the amount of interest accrued on $50 million of the RTL Notes between Sept. 18, 2012, and the day falling immediately prior to the date on which the Conversion takes place. The RTL Credit Facility requires the Company and the guarantors to make a number of customary representations and comply with a number of customary undertakings. The RTL Credit Facility is governed by and construed in accordance with English law. A copy of the Form 8-K is available for free at: http://is.gd/4yMqR9 About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. Ernst & Young Audit sp. z.o.o., in Warsaw, Poland, expressed substantial doubt about Central European's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that certain of the Company's credit and factoring facilities are coming due in 2012 and will need to be renewed to manage its working capital needs. The Company's balance sheet at Sept. 30, 2012, showed $1.98 billion in total assets, $1.73 billion in total liabilities, $29.44 million in temporary equity, and $210.78 million in total stockholders' equity. Liquidity The Company's Convertible Senior Notes are due on March 15, 2013. The Company has said its current cash on hand, estimated cash from operations and available credit facilities will not be sufficient to make the repayment of principal on the Convertible Notes and, unless the transaction with Russian Standard Corporation is completed the Company may default on them. The Company's cash flow forecasts include the assumption that certain credit and factoring facilities coming due in 2012 would be renewed to manage working capital needs. Moreover, the Company had a net loss and significant impairment charges in 2011 and current liabilities exceed current assets at June 30, 2012. These conditions, the Company said, raise substantial doubt about its ability to continue as a going concern. * * * As reported by the TCR on Aug. 10, 2012, Standard & Poor's Ratings Services kept on CreditWatch with negative implications its 'CCC+' long-term corporate credit rating on U.S.-based Central European Distribution Corp. (CEDC), the parent company of Poland-based vodka manufacturer CEDC International sp. z o.o. "The CreditWatch status reflects our view that uncertainties remain related to CEDC's ongoing accounting review and that CEDC's liquidity could further and substantially weaken if there was a breach of covenants which could lead to the acceleration of the payment of the 2016 notes, upon receipt of a written notice of 25% or more of the noteholders," S&P said. As reported by the TCR on Jan. 16, 2013, Moody's Investors Service has downgraded the corporate family rating (CFR) and probability of default rating (PDR) of Central European Distribution Corporation (CEDC) to Caa3 from Caa2. "The downgrade follows CEDC announcement on the 28 of December that it had agreed with Russian Standard a revised transaction to repay its $310 million of convertible notes due March 2013 which, in Moody's view, has increased the risk of potential loss for existing bondholders", says Paolo Leschiutta, a Moody's Vice President - Senior Credit Officer and lead analyst for CEDC. CHARLES W. BENNINGTON: May Begin Soliciting Plan Votes ------------------------------------------------------ Charles W. Bennington and Christina M. Bennington won Bankruptcy Court approval of the disclosure statement explaining their Plan of Reorganization. Utah Bankruptcy Judge R. Kimball Mosier allowed the Benningtons to circulate the plan documents to creditors, and begin soliciting plan votes. The voting deadline is 4:00 p.m. Mountain Time on April 5, 2013 (or, if later, the day that is 31 days after the date that Solicitation Packages are mailed, provided, however, that in no event will the Voting Deadline be later than April 10). The hearing to consider confirmation of the Plan is scheduled for April 17 at 2:00 p.m., at the U.S. Bankruptcy Court in Salt Lake City. Any objection to confirmation of the Plan must be filed no later than 4:00 p.m. Mountain Time on the Voting Deadline. A copy of the Court's Feb. 28, 2013 Order is available at http://is.gd/7KUSW6from Leagle.com. Charles W. Bennington and Christina M. Bennington filed for Chapter 11 bankruptcy (Bankr. D. Utah Case No. 12-27710) on June 13, 2012. CHEM RX: Court Trims $9.8MM Clawback Suit Against Bellco -------------------------------------------------------- Bankruptcy Judge Mary F. Walrath granted, in part, and denied, in part, the motion filed by Bellco Drug Corp. to dismiss the clawback lawsuit launched by AP Services, LLC, as Trustee of the CRC Litigation Trust. On May 8, 2012, the Trustee sued Bellco, alleging, inter alia, that Bellco received 64 preferential transfers in the aggregate amount of $9,807,000 -- Count I. The Trustee alternatively alleges the Transfers were fraudulent conveyances under 11 U.S.C. section 548 -- Count II -- or unauthorized post-petition transfers under section 549 -- Count III. Additionally, the Trustee seeks to recover the Transfers under section 550(a) -- Count IV -- and to disallow Bellco's claims under section 502(d) -- Count V. Bellco contends the lawsuit fails to state a claim for relief. Judge Walrath ruled that the Motion to Dismiss is: -- denied with respect to Count I; and -- granted with respect to Counts II and III. Judge Walrath granted the Trustee leave to amend the Complaint within 30 days of the Court's order. The lawsuit is, AP SERVICES, LLC, AS TRUSTEE OF THE CRC LITIGATION TRUST Plaintiff, v. BELLCO DRUG CORP. Defendant, Adv. Proc. No. 12-50702 (Bankr. D. Del.). A copy of the Court's March 1, 2013 Memorandum Opinion is available at http://is.gd/msXzrzfrom Leagle.com. About Chem RX Corp. Long Beach, N.Y.-based Chem RX Corporation, aka Paramount Acquisition Corp. -- http://www.chemrx.net/-- was a major institutional pharmacy serving the New York City metropolitan area, as well as parts of New Jersey, upstate New York, Pennsylvania and Florida. The Company and five affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 10-11567) on May 11, 2010. Dennis A. Meloro, Esq., and Scott D. Cousins, Esq., at Greenberg Traurig, LLP, in Delaware, represented the Company in its restructuring. Cypress Holdings, LLC, served as the Company's financial advisor. RSR Consulting, LLC, provided a chief restructuring officer. Brunswick Group LLP served as the Company's public relations consultant. Grant Thornton LLP served as the Company's independent auditor. Lazard Middle Market LLC acted as the Company's investment banker. Eichen & Dimeglio PC was the Company's tax advisor. Kurtzman Carson Consultants was the Company's claims and notice agent. Attorneys at White & Case and Fox Rothschild LLP served as co-counsel to the Official Committee of Unsecured Creditors Chanin Capital Partners LLC served as Restructuring and Financial Advisor for the Official Committee of Unsecured Creditors. The Company disclosed $169,690,868 in assets and $178,281,128 in debts as of Feb. 28, 2010. Chem Rx changed its name to CRC Parent Corp. following the sale of its business to PharMerica Corp. at a bankruptcy court-sanctioned auction. PharMerica paid $70.6 million and assumed specified liabilities. The deal enabled PharMerica to move into the New York and New Jersey markets. On April 11, 2011, the Court entered an Order confirming the Debtors' Second Amended Joint Plan of Liquidation. CLEAR CHANNEL: Bank Debt Trades at 14% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which Clear Channel Communications, Inc., is a borrower traded in the secondary market at 85.89 cents-on-the-dollar during the week ended Friday, March 1, 2013, a drop of 0.28 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 365 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 30, 2016, and carries Moody's 'Caa1' rating and Standard & Poor's 'CCC+' rating. The loan is one of the biggest gainers and losers for the week ended March 1 among 238 widely quoted syndicated loans with five or more bids in secondary trading. About Clear Channel San Antonio, Texas-based CC Media Holdings, Inc. (OTC BB: CCMO) -- http://www.ccmediaholdings.com/-- is the parent company of Clear Channel Communications, Inc. CC Media Holdings is a global media and entertainment company specializing in mobile and on-demand entertainment and information services for local communities and premier opportunities for advertisers. The Company's businesses include radio and outdoor displays. For the six months ended June 30, 2012, the Company reported a net loss attributable to the Company of $182.65 million on $2.96 billion of revenue. Clear Channel reported a net loss of $302.09 million on $6.16 billion of revenue in 2011, compared with a net loss of $479.08 million on $5.86 billion of revenue in 2010. The Company had a net loss of $4.03 billion on $5.55 billion of revenue in 2009. The Company's balance sheet at June 30, 2012, showed $16.45 billion in total assets, $24.31 billion in total liabilities, and a $7.86 billion total shareholders' deficit. Bankruptcy Warning At March 31, 2012, the Company had $20.7 billion of total indebtedness outstanding. The Company said in its quarterly report for the period ended March 31, 2012, that its ability to restructure or refinance the debt will depend on the condition of the capital markets and the Company's financial condition at that time. Any refinancing of the Company's debt could be at higher interest rates and increase debt service obligations and may require the Company and its subsidiaries to comply with more onerous covenants, which could further restrict the Company's business operations. The terms of existing or future debt instruments may restrict the Company from adopting some of these alternatives. These alternative measures may not be successful and may not permit the Company or its subsidiaries to meet scheduled debt service obligations. If the Company and its subsidiaries cannot make scheduled payments on indebtedness, the Company or its subsidiaries, as applicable, will be in default under one or more of the debt agreements and, as a result the Company could be forced into bankruptcy or liquidation. * * * As reported in the TCR on Oct. 17, 2012, Fitch Ratings has affirmed the 'CCC' Issuer Default Rating (IDR) of Clear Channel Communications, Inc. The Rating Outlook is Stable. Fitch's ratings concerns center on the company's highly leveraged capital structure, with significant maturities in 2016; the considerable and growing interest burden that pressures FCF; technological threats and secular pressures in radio broadcasting; and the company's exposure to cyclical advertising revenue. The ratings are supported by the company's leading position in both the outdoor and radio industries, as well as the positive fundamentals and digital opportunities in the outdoor advertising space. COMMUNICOM CORP: Updated Case Summary & Creditors' Lists -------------------------------------------------------- Lead Debtor: Communicom Corp. of America, LLC 3200 Cherry Creek Drive South Suite 200 Denver, CO 80209 Bankruptcy Case No.: 13-12694 Chapter 11 Petition Date: February 27, 2013 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Lee M. Kutner, Esq. KUTNER MILLER BRINEN, P.C. 303 E. 17th Ave., Ste. 500 Denver, CO 80203 Tel: (303) 832-2400 E-mail: lmk@kutnerlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Communicom Broadcasting, LLC 13-12695 Assets: $1,000,001 to $10,000,000 Debts: $10,000,001 to $50,000,000 Communicom Co. of Michigan, Limited Partnership 13-12697 Assets: N/A Debts: $10,000,001 to $50,000,000 Communicom Co. of Louisiana, Limited Partnership 13-12699 Assets: N/A Debts: $10,000,001 to $50,000,000 Communicom Co. of Arizona, Limited Partnership 13-12703 Assets: N/A Debts: $10,000,001 to $50,000,000 Communicom Co. of Phoenix, Limited Partnership 13-12704 The petitions were signed by Richard L. Kylberg, Jr., manager. A. In its list of 20 largest unsecured creditors, Communicom Corp. of America wrote only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ First Citizens Bank $10,800,000 and Trust Company 700 17th Street Suite 1000 Denver, CO 80202 B. In its list of 20 largest unsecured creditors, Communicom Broadcasting wrote only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ First Citizens Bank $10,800,000 and Trust Company 700 17th Street Suite 1000 Denver, CO 80202 C. A copy of Communicom Co. of Michigan's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob13-12697.pdf D. A copy of Communicom Co. of Louisiana's list of its 19 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob13-12699.pdf E. A copy of Communicom Co. of Arizona's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob13-12703.pdf COMMUNITY FINANCIAL: Otter Creek Holds 16.5% Stake at Dec. 21 ------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Otter Creek Management, Inc., and its affiliates disclosed that, as of Dec. 21, 2012, they beneficially own 920,000 shares of common stock of Community Financial Shares, Inc., representing 16.5% of the shares outstanding. A copy of the filing is available for free at http://is.gd/bDovlZ About Community Financial Glen Ellyn, Illinois-based Community Financial Shares, Inc., is a registered bank holding company. The operations of the Company and its banking subsidiary consist primarily of those financial activities common to the commercial banking industry. All of the operating income of the Company is attributable to its wholly- owned banking subsidiary, Community Bank-Wheaton/Glen Ellyn. BKD, LLP, in Indianapolis, Indiana, issued a going concern qualification on the consolidated financial statements for the year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and is undercapitalized. The Company reported a net loss of $11.01 million on net interest income (before provision for loan losses) of $10.77 million in 2011, compared with a net loss of $4.57 million on net interest income (before provision for loan losses) of $10.40 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $334.17 million in total assets, $328.69 million in total liabilities and $5.48 million in total shareholders' equity. COMMUNITY TOWERS: Court Denies Confirmation of Chapter 11 Plan -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California denied the confirmation of Community Towers, I, LLC, et al.'s Joint Chapter 11 Plan. The Court, in its order, related that a plan of reorganization must satisfy Section 1129(a)(1) to (16) to be confirmed. If a class of creditors rejects the plan, it can be confirmed only if the standards of Section 1129(b) are met. Creditor CIBC Inc., voted against the Joint Plan and opposed confirmation contending that the Joint Plan: (1) improperly includes a third party release in violation of Section 524; (2) violates Section 1129(a)(11) because it is not feasible; and (3) is not fair and equitable to CIBC because the interest rate proposed to be paid is inadequate to compensate CIBC for the risk inherent in its loan to Debtors. The Plan The Debtors' Joint Plan provides that Debtors will continue to operate Community Towers, and requires the payment of allowed claims. The property will continue to generate rents, which will be used to pay claims. The Joint Plan projects annual rental increases of 3-5%, rental rates at $1.60 sq. ft., and a 3% annual increase in expenses. Unsecured claims total approximately $95,000. These claims will be paid in full over twelve months with interest at the legal rate. John and Rosalie Feece, insiders, have a claim of $6,621,000 as of the petition date. The claim will be paid over five years with interest at 6%. Payment of the claim is subordinated to those of general unsecured creditors. The Joint Plan provides that CIBC will retain its lien against Debtors' property. Debtors intend to make interest only payments at 6% for five years to CIBC on its secured claim. CIBC will be paid its secured claim in full no later than five years after the Joint Plan becomes effective. About Community Towers I Community Towers I LLC is a real estate investment company. Community Towers I LLC and various affiliates -- Community Towers II, LLC, Community Towers III, LLC, Community Towers IV, LLC -- filed a Chapter 11 petition (Bankr. N.D. Calif. Lead Case No. 11-58944) on Sept. 26, 2011, in San Jose, California. Community Towers I disclosed $51,939,720 in assets and $39,479,784 in liabilities as of the Chapter 11 filing. COMMUNITY WEST: W. Peeples Reports 21.5% Stake as of Oct. 8 ----------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, William R. Peeples disclosed that, as of Oct. 8, 2012, he beneficially owns 1,347,900 shares of common stock of Community West Bancshares representing 21.5% of the shares outstanding. A copy of the filing is available at: http://is.gd/8HEgRr About Community West Goleta, Calif.-based Community West Bancshares ("CWBC") was incorporated in the State of California on Nov. 26, 1996, for the purpose of forming a bank holding company. On Dec. 31, 1997, CWBC acquired a 100% interest in Community West Bank, National Association. Effective that date, shareholders of CWB became shareholders of CWBC in a one-for-one exchange. The acquisition was accounted at historical cost in a manner similar to pooling- of-interests. Community West Bancshares is a bank holding company. CWB is the sole bank subsidiary of CWBC. CWBC provides management and shareholder services to CWB. The Company reported net income of $3.17 million in 2012, as compared with a net loss of $10.48 million in 2011. The Company's balance sheet at Dec. 31, 2012, showed $532.10 million in total assets, $479.05 million in total liabilities and $53.05 million in stockholders' equity. Consent Agreement According to the regulatory filing for the quarter ended June 30, 2012, the Bank entered into a consent agreement with the Comptroller of the Currency ("OCC"), the Bank's primary banking regulator, which requires the Bank to take certain corrective actions to address certain deficiencies in the operations of the Bank, as identified by the OCC (the "OCC Agreement"). "Article III of the OCC Agreement requires a capital plan and requires that the Bank achieve and maintain a Tier 1 Leverage Capital ratio of 9% and Total Risk-Based Capital ratio of 12% on or before May 25, 2012. The Bank's Board of Directors has incorporated a three-year capital plan into the Bank's strategic plan. The Bank successfully met the minimum capital requirements as of May 25, 2012. Notwithstanding that the Bank has achieved the required minimum capital ratios required by the OCC Agreement, the existence of a requirement to maintain a specific capital level in the OCC Agreement means that the Bank may not be deemed "well capitalized" under applicable banking regulations." "While the Bank believes that it is in substantial compliance with the OCC Agreement, no assurance can be given that the OCC will concur with the Bank's assessment. Failure to comply with the provisions of the OCC Agreement may subject the Bank to further regulatory action, including but not limited to, being deemed undercapitalized for purposes of the OCC Agreement, and the imposition by the OCC of prompt corrective action measures or civil money penalties," the Company said in its quarterly report for the period ended Sept. 30, 2012. CONEXANT SYSTEMS: Plan Offers 4.1% Recovery for Unsec. Creditors ---------------------------------------------------------------- Conexant Systems Inc. filed together with its bankruptcy petition a proposed reorganization plan that was negotiated with secured lender, QP SFM Capital Holdings Limited, an entity managed by Soros Fund Management LLC. The Plan contemplates a substantial reduction in funded debt obligations by converting the secured portion of the $175 million of 11.25% senior secured notes held by Soros to new common stock and $76 million in pay-in-kind notes. The prearranged restructuring is supported by Conexant's existing sponsors, Golden Gate Private Equity, Inc. and August Capital. The parties have entered into a Restructuring Support Agreement, which binds the parties to support the Debtors' chapter 11 plan of reorganization. The RSA requires the Debtors to: -- seek approval of the disclosure statement within 45 days after the Petition Date. -- schedule a confirmation hearing within 7 days after the voting deadline outlined in the disclosure statement (subject to the Bankruptcy Court's availability). -- obtain entry of the confirmation order within 85 days of the Petition Date. -- consummate the plan of reorganization within 120 days of the Petition Date. Soros has agreed to provide Conexant with $15 million in senior secured debtor in possession financing for working capital during the chapter 11 cases. The DIP Financing will convert into equity in the reorganized Debtors on the effective date of the Plan. According to the accompanying Disclosure Statement, the Plan provides for these terms: 1. Soros will convert the secured portion of its existing senior secured notes claim totaling approximately $80 million into (a) new equity in the reorganized Debtors and (b) $76 million in unsecured "payable in kind" ("PIK") notes to be issued by a newly formed holding company on the effective date of the Plan. Projected recovery by Soros is 41%. 2. Holders of administrative claims, non-priority tax claims and other secured claims will recover 100% provided that the claims do not exceed the caps set for those claims. 3. Holders of allowed unsecured claims will receive a pro rata share of $2.0 million; provided that if the class of unsecured creditors votes in favor of the Plan, Soros has agreed to waive its unsecured deficiency claim totaling approximately $114.5 million. If unsecured creditors accept the Plan, they'll recover 4.1% but if they reject, they'll recover only 1.2%. 4. Holders of existing interests in Conexant will not receive any distribution on account of their interests, and the existing interests will be cancelled and discharged on the effective date. Only Soros and the general unsecured claimants are voting on the Plan. The equity holders are deemed to reject the Plan on account of their 0% recovery. The Plan provides that if a "363 Triggering Event" occurs -- and is not waived by Sorus -- the Debtor will no longer pursue confirmation of the Plan and will instead commence an auction process pursuant to Section 363 of the Bankruptcy Code with which Sorus would serve as the stalking horse bidder. Sorus will no longer have any obligation to support the Plan and each party will have to support a Sec. 363 sale upon occurrence of various events, including (i) administrative claims exceeding the cap of $17.5 million, non-priority claims exceeding the cap of $1 million, or other secured claims exceeding the cap of $1 million, or (ii) the company's failure to achieve the milestones set for the in the RSA, (iii) the termination of the Debtor's exclusive right to propose a plan. In the event of a sale, the Debtors will seek approval of customary bidding procedures and a hearing to approve the sale on an expedited timeline. The equity sponsors, Golden Gate Private Equity, Inc. and August Capital, have agreed, among other things, that they (i) won't join in any discussions regarding an alternative reorganization plan, (ii) will not impair any of the Company's tax attributes by transferring ownership of shares on or before the earlier the effective date of the Plan or Dec. 31, 2013, and (iii) support the sale in the event of a 363 Triggering Event. The reorganized Debtors will implement a management incentive plan for up to 15% of the equity in the reorganized Company, or the non-equity equivalent thereof. On the effective date of the restructuring, the reorganized Debtors will pay emergence bonuses to certain members of the senior management team and employees in an amount of up to $1.5 million. In the motion seeking approval of the Disclosure Statement, the Debtors proposed this timeline: Event Date ----- ---- Deadline for objections to Disclosure Statement April 1, 2013 Voting record date April 8, 2013 Deadline to solicit votes on the Plan April 12, 2013 Deadline to submit ballots on the Plan May 9, 2013 Deadline to file Plan confirmation Objections May 9, 2013 Confirmation hearing on Plan May 16, 2013 A copy of the Plan is available for free at: http://bankrupt.com/misc/Conexant_Prearranged_Plan.pdf A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Conexant_Disc_Statement.PDF About Conexant Newport Beach, California-based Conexant Systems, Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- is a fabless semiconductor company. Conexant's comprehensive portfolio of innovative semiconductor solutions includes products for imaging, audio, embedded-modem, and video applications. Outside the United States, the Company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore, and Israel. Conexant Systems, Inc. filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-10367) on Feb. 28, 2013, with an agreement for a balance sheet restructuring with equity sponsors and sole secured lender, QP SFM Capital Holdings Limited, an entity managed by Soros Fund Management LLC. Kirkland & Ellis LLP and Klehr Harrison Harvey Branzburg LLP are serving as legal counsel and Alvarez & Marsal is acting as restructuring advisor to Conexant. Akin Gump Strauss Hauer & Feld LLP and Pepper Hamilton LLP are serving as legal counsel and Blackstone Advisory Partners L.P. as restructuring advisor to the secured lender. Soros' counsel can be reached at: Michael S. Stamer, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park Bank of America Tower New York, NY 10036 Facsimile: (212) 872-1002 E-mail: mstamer@akingump.com CONEXANT SYSTEMS: Soros DIP Financing Has Interim Approval ---------------------------------------------------------- Conexant Systems Inc. can now access $5 million of the $15 million of debtor-in-possession financing being provided by an entity managed Soros Fund Management LLC after the judge granted interim approval to the loan at a hearing March 1. The bankruptcy judge will consider final approval of the DIP financing, which would allow the Debtor to access the remaining $10 million, at a hearing before April 12, 2013. Soros' QP SFM Capital Holdings Limited, which is already owed $175 million on account of 11.25% senior secured notes, has agreed to provide $15 million in incremental liquidity for the pre- arranged Chapter 11 restructuring on these terms: -- Interest rate would be Adjusted LIBOR plus 7% with default interest at +2%; -- The DIP financing will mature 120 days; -- Upon the receive of net cash proceeds in excess of $150,000 from an asset sale, the Debtors will promptly prepay the term loan in an amount equal to 100% of the net cash proceeds, -- The DIP obligations will have priority over any and all administrative expenses, subject to carve-out for U.S. Trustee fees and professional fees of the Debtors and a statutory committee; -- As the DIP financing contemplates providing the DIP lender with priming liens on the liens granted prepetition pursuant to 11 U.S.C. Sec. 364(d), the Debtors will grant adequate protection in the form of liens and superpriority administrative claims; -- Parties-in-interest will until the earlier of 75 days from the date of the of the interim order or 60 days from the date a statutory committee is first appointed to investigate the validity, perfection and enforceability of the liens of Soros. About Conexant Newport Beach, California-based Conexant Systems, Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- is a fabless semiconductor company. Conexant's comprehensive portfolio of innovative semiconductor solutions includes products for imaging, audio, embedded-modem, and video applications. Outside the United States, the Company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore, and Israel. Conexant Systems, Inc. filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-10367) on Feb. 28, 2013, with an agreement for a balance sheet restructuring with equity sponsors and sole secured lender, QP SFM Capital Holdings Limited, an entity managed by Soros Fund Management LLC. Kirkland & Ellis LLP and Klehr Harrison Harvey Branzburg LLP are serving as legal counsel and Alvarez & Marsal is acting as restructuring advisor to Conexant. Akin Gump Strauss Hauer & Feld LLP and Pepper Hamilton LLP are serving as legal counsel and Blackstone Advisory Partners L.P. as restructuring advisor to the secured lender. CONEXANT SYSTEMS: Proposes to Implement Severance Program --------------------------------------------------------- Conexant Systems Inc. and its affiliates seek authority from the Bankruptcy Court to implement a severance program and pay $235,000 to 25 recently terminated employees on account of the program. To ensure the viability of their business, the Debtors have taken steps to reduce costs and increase their productivity. From 2006 to 2011, the Debtors reduced employee workforce from 3,120 to just over 406 worldwide. Immediately before the Petition Date, the Debtors terminated 25 employees. Prepetition the Debtors did not have a severance policy that was consistently applied throughout the organization. Given the lack of an official policy, the Chapter 11 filing and management's ongoing efforts to control costs, many employees perceive a lack of job security. Accordingly, the Debtors, with the support of the secured lender, propose a severance program that would help alleviate concerns of the Debtors' workforce by increasing job security and ensuring operational stability. The severance program provides terminated employees severance payments ranging from two to four weeks of pay depending on their length of employment in addition to certain Consolidated Omnibus Budget Reconciliation Act ("COBRA") benefits: Years of Employment Severance Amount COBRA Benefits ------------------- ---------------- -------------- Less than One Year 2 Weeks Pay 20.5% of Severance Less than Two 3 Weeks Pay 20.5% of Severance Greater than Two 4 Weeks Pay 20.5% of Severance The program applies only to the non-insider employees. Any payments of severance obligations will be reduced, dollar for dollar, by any amounts paid to the employee under the WARN Act or any applicable law related to the termination of the employment. About Conexant Newport Beach, California-based Conexant Systems, Inc. (NASDAQ: CNXT) -- http://www.conexant.com/-- is a fabless semiconductor company. Conexant's comprehensive portfolio of innovative semiconductor solutions includes products for imaging, audio, embedded-modem, and video applications. Outside the United States, the Company has subsidiaries in Northern Ireland, China, Barbados, Korea, Mauritius, Hong Kong, France, Germany, the United Kingdom, Iceland, India, Israel, Japan, Netherlands, Singapore, and Israel. Conexant Systems, Inc. filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-10367) on Feb. 28, 2013, with an agreement for a balance sheet restructuring with equity sponsors and sole secured lender, QP SFM Capital Holdings Limited, an entity managed by Soros Fund Management LLC. Kirkland & Ellis LLP and Klehr Harrison Harvey Branzburg LLP are serving as legal counsel and Alvarez & Marsal is acting as restructuring advisor to Conexant. Akin Gump Strauss Hauer & Feld LLP and Pepper Hamilton LLP are serving as legal counsel and Blackstone Advisory Partners L.P. as restructuring advisor to the secured lender. COOL MUSIC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Cool Music Network LLC 641 E. 22nd Street Lawrence, KS 66046 Bankruptcy Case No.: 13-20425 Chapter 11 Petition Date: February 28, 2013 Court: U.S. Bankruptcy Court District of Kansas (Kansas City) Debtor's Counsel: Jeffrey A. Deines, Esq. LENTZ CLARK DEINES, P.A. 9260 Glenwood Overland Park, KS 66212 Tel: (913) 648-0600 Fax: (913) 648-0664 E-mail: jdeines@lcdlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ksb13-20425.pdf The petition was signed by Joe Comparato, CEO. CORNERSTONE CHEMICAL: Moody's Rates New $220-Mil. Senior Notes B3 ----------------------------------------------------------------- Moody's Investors Service assigned to Cornerstone Chemical Company a B2 Corporate Family Rating and B3 rating to the company's $220 million senior secured notes due 2018. Proceeds from the offering will be used to refinance existing debt, fund a sponsor dividend, and pay related fees and expenses. The rating outlook is stable. "Cornerstone has done well in transitioning to a standalone entity since its carve-out from Cytec about two years ago, but will need to start generating free cash flow to maintain the assigned B2 CFR," said Ben Nelson, Moody's lead analyst for Cornerstone. Assignments: Issuer: Cornerstone Chemical Company Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2-PD Senior Secured Notes due 2018, Assigned B3 (LGD4 58%) Outlook, Stable Ratings Rationale: The assigned ratings are first-time ratings for Cornerstone, and subject to Moody's review of final terms and conditions of the proposed dividend recapitalization transaction. The B2 CFR is weakly positioned due to single site operating risk, reliance on volatile commodity chemicals, historical lack of cash flow generation, and the lack of cash equity after the proposed dividend. Pro forma financial leverage is relatively modest for the rating category, but capital intensity limits the company's prospective ability to generate free cash flow. Cost advantages associated with synergistic manufacturing processes, long-term customer relationships, formula-based customer contracts, diverse end markets, and a good liquidity position support the rating. The rating also recognizes Cornerstone's successful transition to a standalone entity since its carve-out from Cytec in early 2011. Cornerstone produces acrylonitrile, melamine, and sulfuric acid, as well as various co-products, out of a single manufacturing complex located on the Mississippi River near New Orleans, Louisiana. The company benefits from logistical advantages associated with the site, and operating cost offsets provided by customer facilities located on the site, steam generated from its own operations and spent acid returned from an on-site tenant. Tenants also provide a source of demand for some of Cornerstone's intermediate chemicals. The economics of the complex are reliant on these various interdependencies and the impact of an operational disruption, even if limited to certain units, could have a meaningful adverse impact on profitability. Indeed, single site risk is a principal rating constraint and necessitates that the company maintain strong credit measures for its rating category. Moody's expects low-cost natural gas will provide domestic petrochemical companies with a moderate competitive advantage versus international competitors. Notwithstanding solid domestic merchant market positions, Moody's believes that the company has limited market power and essentially is a price taker which generates commodity-like profit margins. This heightens the importance on formula-based contracts with pass-through arrangements to help maintain profitability. Cornerstone has these contracts for most acrylonitrile and sulfuric acid production, but is more exposed to market conditions with respect to melamine. This segment saw tightening during the past year due to the start- up of new capacity in the industry. Moody's anticipates continued volatility in melamine margins, though ongoing recovery in the key housing end market and regulatory support should tighten the global supply/demand balance. Moody's views the proposed dividend recapitalization transaction as aggressive in part because it removes all of the cash equity that the private equity sponsor used to capitalize the initial transaction two years ago, and due to concerns that the additional debt could result in stressed credit metrics in a downturn scenario. That said, credit measures are relatively strong for the rating category on a pro forma basis for the twelve months ended November 30, 2012. Moody's estimates financial leverage in the high 3 times Debt/EBITDA and interest coverage near 3 times EBITDA/Interest. Capital intensity limits prospects for free cash flow, which Moody's expects will be roughly breakeven in 2013 and with solid execution should improve in 2014. The rating assumes that the company will apply some of its cash flow to credit- friendly purposes, such as repaying debt and improving liquidity, in advance of a downturn. The stable rating outlook assumes that Cornerstone will continue to improve its operations, stay on track to generate free cash flow in the mid single digit range in 2014, and maintain at least $60 million of available liquidity. Moody's could downgrade the ratings with expectations for financial leverage in excess of 5 times, sustained negative free cash flow, or deterioration in liquidity. An adverse operational event or upsizing the transaction to facilitate a larger sponsor dividend could also have negative rating implications. Upward rating momentum is limited at present. Moody's could upgrade the rating if Cornerstone reduces absolute debt levels and builds up a substantial liquidity position to help offset the operating risk associated with its single site profile. The principal methodology used in this rating was the Global Chemical Industry 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. Cornerstone Chemical Company produces petrochemicals such as acrylonitrile, melamine, and sulfuric acid. Private equity firm H.I.G. Capital has owned the company since its carve-out from Cytec Industries in February 2011. Headquartered in Waggaman, La., Cornerstone generated $597 million of revenue for the twelve months ended November 30, 2012. CORNERSTONE CHEMICAL: S&P Assigns Prelim. 'B- Corp. Credit Rating ----------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its preliminary 'B-' corporate credit rating to Cornerstone Chemical Co. At the same time, S&P assigned its preliminary 'B' issue- level rating to the company's proposed $220 million senior secured notes due 2018, with a preliminary recovery rating of '3', indicating S&P's expectation for meaningful (50% to 70%) recovery in the event of a payment default. All ratings are based on preliminary terms and conditions. The outlook is stable. Cornerstone plans to use the proceeds from the proposed notes offering to refinance its existing debt, fund a $73 million dividend to sponsors, and pay fees and expenses. The company also plans to put in place a new asset-based lending (ABL) revolving credit facility (unrated), which is expected to be undrawn at close. "The preliminary ratings on Cornerstone reflect our assessment of the company's business risk profile as vulnerable and financial risk profile as aggressive, as defined by our criteria," said Standard & Poor's credit analyst Danny Krauss. The ratings also reflect Standard & Poor's assessment of liquidity as "less than adequate," as volatile raw material prices and inventory builds prior to turnaround periods lead to significant draws on the ABL intra-month. With annual revenues of about $600 million (for the 12 months ended Nov. 30, 2012), Cornerstone is a producer of intermediate and building block chemicals, primarily acrylonitrile, melamine, and sulfuric acid. The outlook is stable. S&P expects that the company should benefit over the next year from what it believes will be modest economic growth in the U.S., including a gradual recovery in the housing market. S&P assumes that management and the company's owners will be supportive of credit quality and, therefore, S&P have not factored into its analysis any additional dividends or debt-funded acquisitions. Based on S&P's scenario forecasts, over the next 12 months the company will maintain credit metrics in line with its expectations at the current rating, including FFO to total adjusted debt of above 12% and adjusted debt to EBITDA of 4x-5x. S&P could raise the ratings by one notch if the company is able to improve earnings and generate moderately positive free cash flow in 2013, allowing it to maintain adequate liquidity levels even after considering intra-month working capital swings. Based on S&P's scenario forecasts it could consider a higher rating if EBITDA margins rise by 100 basis points from 2012 levels, along with a 5% increase in revenues. In such a scenario, S&P would expect FFO-to-debt to approach 20%. The ratings could come under pressure if the downside risks to S&P's forecast were to materialize, such as a significant operating disruption to the manufacturing site, or a substantial reduction in demand for one of the company's key products. We also view the possibility of a spike in raw material costs, particularly around the time when the company is undertaking inventory building as part of a turnaround, as a key risk factor for liquidity. Based on S&P's downside scenario, it could consider a negative rating action if revenues fell by 15% or more, coupled with a drop in EBITDA margins of 200 basis points from its current expectations. At this point, S&P would expect the FFO-to- debt ratio to drop to the mid-single digits. CROWN HOLDINGS: Fitch Affirms 'BB+' Issuer Default Rating --------------------------------------------------------- Fitch Ratings has affirmed the ratings for Crown Holdings, Inc., and its subsidiaries, Crown Cork & Seal Company, Inc., Crown Americas, LLC., and Crown European Holdings, SA. The Rating Outlook is Stable. Key Rating Drivers Support for Crown's ratings is due to the solid cash flows associated with its contractual commitments, stable demand characteristics, strong market share and cost pass-through despite current weakened global economic environment. Crown's geographical diversification across both mature and emerging markets with a diverse customer mix results in a balanced revenue stream that should lend greater stability through economic cycles. Fitch Ratings currently expects cash generation to increase over the long term due to past capital investments in developing market regions. Increased beverage can volume demand should continue across the majority of Crown's regions in 2013. Cost restructuring efforts in European food and aerosol should at least offset negative effects from economic pressure. Supply and demand characteristics should remain firm for most of Asia with 3.6 billion of capacity expansions, primarily outside of China expected in 2013. This comes after Crown added more than 4.1 billion in capacity across Asia with more than half within China the previous two years. Consequently, when combined with other beverage can capacity expansions, the can industry reported pricing pressures from regional imbalances in China during the fourth quarter. Crown has prudently pulled back on some expansion projects for 2013, reflecting the lower demand growth although the overall China market should continue strong growth this year to absorb the majority of the current imbalances. Past capacity rationalizations and selective-mix realignments by the can industry in its mature markets also provides pricing stability. Crown's liquidity is very good and includes its sustainable free cash flow (FCF) generation, cash and availability under its revolving facility and securitization programs. At the end of fourth quarter 2012, Crown had approximately $1.5 billion in liquidity primarily from its $1.2 billion secured credit facilities ($45 million drawn) that will mature in June 2015. In 2012, FCF (less minority distributions) was $266 million including insurance proceeds. In 2013, Fitch expects material growth in FCF to at least $380 million as a result of several factors. These include lower growth-related capital spending, expectations for completed restructuring projects, lower pension contributions, and ramp-up in productivity related to the organic capacity expansions. Crown has indicated initial capital spending estimates of $230 million for 2013 compared to spending of $324 million in 2012 and $401 million for 2011. Crown has considerable ability to move cash through various mechanisms to fund cash requirements in the U.S. Cash at the end of the fourth quarter 2012 was $350 million. At December 31, 2012, Crown had $100 million of available capacity under its $200 million North American facility that matures in December 2015 and $41 million of available capacity under a new Euro110 ($144) million European securitization facility maturing in July 2017. Crown targets the majority of its excess cash for shareholder friendly initiatives since Crown is within company leverage targets. Accordingly, almost three quarters of Crown's FCF during the past four years has been used for partner dividends or share repurchases. Expectations are for Crown to pace share repurchases to the level of free cash flow. Crown's board of directors has authorized a stock repurchase program of up to $800 million through the end of 2014. Crown also pays out approximately $80 to $85 million in minority distributions but does not have a dividend. Fitch does not expect any significant minority interest acquisitions given Crown's past focus. Crown's near- to medium-term maturities are relatively modest (under $150 million) during the next four years and are primarily related to term loan amortization. The term loans mature in June 2016. The next significant maturity for Crown's unsecured notes is Euro 500 million due in 2018. Crown has significant cushion under its present covenants. Leverage at the end of the fourth quarter of 2012 was approximately 3.3 times (x). Fitch views the top end of the expected leverage range for the rating below the low to mid 3x range. Fitch expects leverage will moderate going forward from term loan repayments and EBITDA growth. Credit risks which Fitch believes are manageable include the increase in revenue exposure to more volatile, higher-growth emerging markets, exposure to weather and crop disturbances affecting food pack, macro events outside the control of the company, the asbestos liability and pension deficit. In late 2011, Crown took steps to address its growing pension deficit in the U.S. with funding from proceeds of an add-on $350 million term loan that has substantially diminished any contribution requirements for the next couple of years. The GAAP funding levels at the end of 2012 for the U.S. and non-U.S plans were 80% and 87% on benefit obligations of $1.6 billion and $3.6 billion respectively. Crown expects pension contributions in 2013 of approximately $85 million, less than the $103 million in 2012. Rating Sensitivities Negative: Future developments that may, individually or collectively, lead to negative rating include: -- Crown adopting more aggressive financial policies or operating performance deteriorated resulting in material erosion to Crown's credit profile particularly pushing sustained leverage greater than 3.5x. -- Large debt financed acquisition that would significantly increase leverage. -- Considerable increase in asbestos liability. -- Significant change in operating trends across the emerging market regions. -- Macro events outside the company's control. -- Significantly reduced free cash flow prospects. Positive: Crown would need to change its current financial policies. In particular, this would require the company to commit to a reduced, more conservative financial leverage policy, less than 2.5x, and increased free cash generation relative to adjusted debt greater than 10%. As a result, Fitch's sensitivities do not currently anticipate developments with a material likelihood, individually or collectively, of leading to a rating upgrade. Fitch affirms the following ratings: Crown: -- Issuer Default Rating (IDR) at 'BB+'; CCS: -- IDR at 'BB+'; -- Senior unsecured notes at 'BB'; CA: -- IDR at 'BB+'; -- Senior secured term facility at 'BBB-'; -- Senior secured revolving facility at 'BBB-'; -- Senior unsecured notes at 'BB+'; CEH: -- IDR at 'BB+'; -- Senior secured euro term facility at 'BBB-'; -- Senior secured euro revolving facility at 'BBB-'; -- Senior unsecured notes at 'BB+'. DEX MEDIA EAST: Bank Debt Trades at 29% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media East LLC is a borrower traded in the secondary market at 71.42 cents-on- the-dollar during the week ended Friday, March 1, 2013, a drop of 0.58 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014. The loan is one of the biggest gainers and losers for the week ended March 1 among 238 widely quoted syndicated loans with five or more bids in secondary trading. About R.H. Donnelley & Dex Media East Dex One, headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-11852) on May 28, 2009. They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. Dex One reported a net loss of $518.96 million in 2011 compared with a net loss of $923.59 million for the eleven months ended Dec. 31, 2010. DEX MEDIA WEST: Bank Debt Trades at 24% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media West LLC is a borrower traded in the secondary market at 76.10 cents-on- the-dollar during the week ended Friday, March 1, 2013, a drop of 0.50 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014, and carries Moody's Caa3 rating. The loan is one of the biggest gainers and losers for the week ended March 1 among 238 widely quoted syndicated loans with five or more bids in secondary trading. About R.H. Donnelley & Dex Media Based in Cary, North Carolina, R.H. Donnelley Corp., fka The Dun & Bradstreet Corp. (NYSE: RHD) -- http://www.rhdonnelley.com/-- publishes and distributes print and online directories in the U.S. It offers print directory advertising products, such as yellow pages and white pages directories. R.H. Donnelley Inc., Dex Media, Inc., and Local Launch, Inc., are the company's only direct wholly owned subsidiaries. Dex Media East LLC is a publisher of the official yellow pages and white pages directories for Qwest Communications International Inc. in the states, where Qwest is the primary incumbent local exchange carrier, such as Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota and South Dakota. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media, Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09- 11852) on May 28, 2009, after missing a $55 million interest payment on its senior unsecured notes. James F. Conlan, Esq., Larry J. Nyhan, Esq., Jeffrey C. Steen, Esq., Jeffrey E. Bjork, Esq., and Peter K. Booth, Esq., at Sidley Austin LLP, in Chicago, represented the Debtors in their restructuring efforts. Edmon L. Morton, Esq., and Robert S. Brady, Esq., at Young, Conaway, Stargatt & Taylor LLP, in Wilmington, Delaware, served as the Debtors' local counsel. The Debtors' financial advisor was Deloitte Financial Advisory Services LLP while its investment banker was Lazard Freres & Co. LLC. The Garden City Group, Inc., served as claims and noticing agent. The Official Committee of Unsecured Creditors tapped Ropes & Gray LLP as its counsel, Cozen O'Connor as Delaware bankruptcy co-counsel, J.H. Cohn LLP as its financial advisor and forensic accountant, and The Blackstone Group, LP, as its financial and restructuring advisor. The Debtors emerged from Chapter 11 bankruptcy proceedings at the end of January 2010. * * * In early April 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Cary, N.C.-based Dex One Corp. and related entities to 'CCC' from 'SD' (selective default). The rating outlook is negative. "At the same time, we affirmed our issue-level rating on Dex Media East Inc.'s $672 million outstanding term loan, Dex Media West Inc.'s $594 million outstanding term loan, and R.H. Donnelley Inc.'s $866 million outstanding term loan due 2014 at 'D'. The recovery rating on these loans remains at '5', indicating our expectation of modest (10% to 30%) recovery for lenders in the event of a payment default," S&P said. "The company's March 9, 2012 amendment allows for ongoing subpar repurchases of its term debt until 2013, as long as certain conditions are met. Additionally, on March 22, 2012, the company announced the commencement of a cash tender offer to purchase a portion of its senior subordinated notes due in 2017 below par. The term loan and subordinated notes are trading at a significant discount to their par values, providing the company an economic incentive to pursue a subpar buyback. We believe that these circumstances suggest a high probability of future subpar buybacks, which are tantamount to default under our criteria," S&P said. "The 'CCC' corporate credit rating reflects our view that Dex One's business will remain under pressure given the unfavorable outlook for print directory advertising. We view the company's rising debt leverage, low debt trading levels, weak operating outlook, and steadily declining discretionary cash flow as indications of financial distress. As such, we continue to assess the company's financial risk profile as 'highly leveraged,' based on our criteria. We regard the company's business risk profile as 'vulnerable,' based on significant risks of continued structural and cyclical decline in the print directory sector. Structural risks include increased competition from online and other distribution channels as small business advertising expands across a greater number of marketing channels," S&P said. DIAL GLOBAL: Lenders Agree to Recapitalize Credit Facilities ------------------------------------------------------------ Dial Global, Inc. on March 4 disclosed that the Company, its lenders and certain of its stockholders have agreed to recapitalize the Company's existing credit facilities, other obligations and equity interests. Spencer Brown, Dial Global's Chief Executive Officer, said, "The new agreements with our lenders represent a significant step forward for the Company. Once these transactions close, we will have de-levered our balance sheet and decreased cash interest expense. The agreements will provide us with greater flexibility to actively manage and grow our business. We look forward to closing these transactions in April and focusing on serving our clients." As part of the recapitalization, the Company has entered into an Amended and Restated Credit Agreement, by and among the Company, General Electric Capital Corporation, as administrative agent and collateral agent, and the lenders party thereto, which provides for a $15 million paydown of the Company's existing term loan and revolving credit commitments. The maturity date under the First Lien Credit Agreement is October 21, 2016. The Company also entered into a Priority Second Lien Credit Agreement among the Company, the administrative agent, the syndication agent and the lender party thereto, pursuant to which such lender agreed to invest an additional $31.5 million through a term loan facility to the Company, with a maturity date of July 21, 2017. In connection with such lender's agreement to extend credit under the Priority Second Lien Credit Agreement, the Company agreed to issue it penny warrants to purchase 7.5% of the Company's common stock exercisable immediately following the consummation of the recapitalization. The effectiveness of each credit agreement is subject to the satisfaction of certain conditions. The lenders under the Company's existing Second Lien Credit Agreement, dated as of October 21, 2011 agreed, subject to the satisfaction of specified conditions, to restructure their existing approximately $93 million in second lien obligations by amending and restating the Second Lien Credit Agreement to provide for a $30 million term loan that matures five years after the expected closing of the recapitalization and exchanging approximately $63 million in remaining obligations under the existing Second Lien Credit Agreement for a new series of preferred stock of the Company. As part of these agreements, these holders of preferred stock will be granted certain corporate governance rights. The Company also agreed to issue the 2L lenders for nominal consideration warrants to purchase 12.0% of the Company's common stock in connection with the exchange of a portion of the existing second lien obligations for preferred stock, which warrants will be exercisable at various dates after the recapitalization if the Company does not retire the $30 million second lien term loan and the preferred stock held by such 2L lenders prior to the specified dates. Under various subscription and exchange agreements between the Company and the holders of the Company's PIK Notes and Series A Preferred Stock, such holders have agreed, subject to the satisfaction of certain specified conditions, to exchange their PIK Notes and Series A Preferred Stock for equity securities of the Company and have further agreed to make an additional equity infusion of $16.5 million. The recapitalization is expected to become effective on or around April 16, 2013, subject to the satisfaction or waiver of certain conditions precedent set forth in the First Lien Credit Agreement, the Second Lien Credit Agreement and the other transaction documents. There can be no assurances that the recapitalization will be consummated on the terms described herein, or at all. About Dial Global Headquartered in New York City, Dial Global, Inc. -- http://www.dialglobal.com-- is an independent, full-service network radio company that distributes, produces, or syndicates programming and services to more than 8,500 radio stations nationwide. The Company produces and distributes over 200 news, sports, music, talk and entertainment radio programs, services and digital applications, as well as audio content from live events, turn-key music formats (the 24/7 Radio Formats), prep services, jingles and imaging. In addition, the Company is the largest sales representative for independent third party providers of audio content. The Company has no operations outside the United States, but sells to customers outside of the United States. The Company's balance sheet at Sept. 30, 2012, showed $380.9 million in total assets, $385.2 million in total liabilities, $10.5 million of Series A Preferred Stock, and a stockholders' deficit of $14.8 million. "...[I]f an event of default under the Credit Facilities occurs and results in an acceleration of the Credit Facilities, a material adverse effect on us and our results of operations would likely result or we may be forced to (1) attempt to restructure our indebtedness, (2) cease our operations or (3) seek protection under applicable state or federal laws, including but not limited to, bankruptcy laws. If one or more of foregoing events were to occur, this would raise substantial doubt about the Company's ability to continue as a going concern," the Company said in its quarterly report for the period ended Sept. 30, 2012. DYNAMIC COMPUTER: Case Summary & 2 Unsecured Creditors ------------------------------------------------------ Debtor: Dynamic Computer, Inc. Calle Zambese, #210 San Juan, PR 00926 Bankruptcy Case No.: 13-01573 Chapter 11 Petition Date: February 28, 2013 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Carlos Rodriguez Quesada, Esq. LAW OFFICE OF CARLOS RODRIGUEZ QUESADA P.O. Box 9023115 San Juan, PR 00902-3115 Tel: (787) 724-2867 E-mail: cerqlaw@coqui.net Scheduled Assets: $60,708 Scheduled Liabilities: $1,404,141 A copy of the Company's list of its two unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/prb13-01573.pdf The petition was signed by Walter I. Montalvo, president. EASTMAN KODAK: Seeks Approval to Cancel Contracts with OTC, et al. ------------------------------------------------------------------ Eastman Kodak Co. asked for approval from the U.S. Bankruptcy Court for the Southern District of New York to cancel contracts with Eloquent Inc., Open Text Corp. and TARGUS Information Corp. The contracts are listed at http://is.gd/FZlPHR A court hearing is scheduled for March 20. Objections are due by March 13. About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. ECO BUILDING: Incurs $3.7 Million Net Loss in Dec. 31 Quarter ------------------------------------------------------------- Eco Building Products, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $3.70 million on $1.36 million of total revenue for the three months ended Dec. 31, 2012, as compared with a net loss of $1.72 million on $996,845 of total revenue for the same period a year ago. For the six-month ended Dec. 31, 2012, the Company incurred a net loss of $6.53 million on $2.42 million of total revenue, as compared with a net loss of $3.31 million on $1.68 million of total revenue for the same period during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $5.03 million in total assets, $10.88 million in total liabilities and a $5.85 million total stockholders' deficit. A copy of the Form 10-Q, as amended on Feb. 26, 2013, is available at http://is.gd/3QAIEX The purpose of the amendment was to furnish the XBRL presentation not filed with the original 10Q filed on Feb. 19, 2012, and to make minor revisions to the original filing regarding rounding errors on the Statement of Cash Flows. About Eco Building Vista, Calif.-based Eco Building Products is a manufacturer of proprietary wood products treated with an eco-friendly proprietary chemistry that protects against mold, rot, decay, termites and fire. The Company reported a net loss of $11.2 million on $3.7 million of revenue in fiscal 2012, compared with a net loss of $6.0 million on $1.3 million of revenue in fiscal 2011. Sam Kan & Company, in Alameda, Calif., expressed substantial doubt about Eco's ability to continue as a going concern following the fiscal 2012 financial results. The independent auditors noted that the Company has generated minimal operating revenues, losses from operations, significant cash used in operating activities and its viability is dependent upon its ability to obtain future financing and successful operations. The Company's balance sheet at Sept. 30, 2012, showed $5.32 million in total assets, $9.54 million in total liabilities and a $4.22 million total stockholders' deficit. EL FARMER: Has Access to BPPR Cash Collateral Until April 30 ------------------------------------------------------------ El Farmer, Inc., asks the U.S. Bankruptcy Court for the District of Puerto Rico to approve a stipulation authorizing the use of Banco Popular de Puerto Rico's cash collateral until April 30, 2013. The Debtor's indebtedness to Banco Popular de Puerto as of the filing date is $11,694,429. Prepetition, the Debtor negotiated with BPPR a restructuring plan related to the secured loans, however, it was never formalized. The Debtor signed the Term sheet agreeing to the terms of the Restructuring Plan on Dec. 12, 2012. BPPR also holds and controls a commercial account into which all accounts receivables of the Debtor are deposited by the Debtor's principal client, Suiza Dairy, Inc. The Debtor and the Bank have agreed on the Debtor's continued use of cash collateral. The bank has consented to the Debtor's use of $71,822 of the cash collateral for January; $73,940 for February; 75,322 for March and $76,725 for April, for payment of the on- going business expenses. For the total amount generated from the sale of milk to Suiza, Suiza will pay directly to Pan American, $76,108 for January; $78,712 for February; $80,473 for March; and $82,134 for April. In the same period, Suiza will disburse directly to BDE $4,978. A copy of the stipulation is available for free at http://bankrupt.com/misc/ELFARMER_cashcoll.pdf The Court also approved a stipulation with Pan American which provides that: 1. An authorized representative of Pan American will verify on- site the periodic needs for feed of the Debtor and as a result will issue a purchase order for feed and grain according to the needs of the Debtor's operation. The order will be immediately processed by Pan American after its approval by the Debtor. 2. The resulting invoice from Pan American will be delivered immediately to Suiza Dairy, Inc. which will immediately process and disburse the invoiced amount to an authorized representative of Pan American who will personally retrieve the payment from Suiza's commercial offices. 3. At no time hereafter, Suiza will deliver to Pan American payments in excess of the amount listed for each requested between January 2013, and April 2013 unless specifically authorized by an order from the Bankruptcy Court and an agreement between Pan American, the Debtor and the Bank. The amount needed by the Debtor is the net amount of 476,108 in January, $78,712 in February, $80,472 in March and 82,134 in April. $64,000 will periodically be available from Suiza Dairy, Inc. A copy of the stipulation is available for free at: http://bankrupt.com/misc/ELFARMER_cashcoll_b.pdf 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. EMMIS COMMUNICATIONS: Sells 98% Title in Radio Network for $21MM ---------------------------------------------------------------- Emmis Communications Corporation, through its subsidiaries, sold its 98% ownership interest in a national radio network in Slovakia to Bauer Media Group, a German company, for approximately 16 million Euros (approximately $21 million), inclusive of payments for working capital. About $18 million of the net proceeds were used to reduce amounts outstanding under Emmis' senior credit facility. The remaining net proceeds, after transaction costs, are being retained in Europe and will be used to help fund the costs associated with Emmis' Hungarian legal claim before the International Centre for Settlement of Investment Disputes. The transaction includes customary representations, warranties and covenants. In calendar 2012, this entity reported net revenues and EBITDA of approximately $10.4 million and $3.2 million, respectively. A copy of the Share Purchase Deed is available for free at: http://is.gd/w2xnFC About Emmis Communications Headquartered in Indianapolis, Indiana, Emmis Communications Corporation -- http://www.emmis.com/-- owns and operates 22 radio stations serving New York, Los Angeles, Chicago, St. Louis, Austin, Indianapolis, and Terre Haute, as well as national radio networks in Slovakia and Bulgaria. The company also publishes six regional and two specialty magazines. The Company's balance sheet at Aug. 31, 2012, showed $287.53 million in total assets, $258.60 million in total liabilities, $46.88 million in series A cumulative convertible preferred stock, and a $17.94 million total deficit. * * * Emmis carries Caa2 corporate family rating and a Caa3 probability of default rating from Moody's. In July 2011, Moody's Investors Service placed the ratings of Emmis on review for possible upgrade following the company's earnings release for 1Q12 (ended May 31, 2011) including additional disclosure related to the pending sale of controlling interests in three radio stations. The sale of the majority ownership to GCTR will generate estimated net proceeds of approximately $100 million to $120 million, after taxes, fees and related expenses. Emmis will retain a minority equity interest in the operations of the three stations and Moody's expects senior secured debt to be reduced resulting in improved credit metrics. ENDEAVOUR INT'L: Weak Liquidity Cues Moody's to Cut CFR to Caa3 --------------------------------------------------------------- Moody's Investors Service downgraded Endeavour International Corporation's Corporate Family Rating to Caa3 from Caa1, its first priority notes rating to Caa3 from Caa1, and its second priority notes to Ca from Caa2. Endeavour's Speculative Grade Liquidity rating was changed to SGL-4 from SGL-2 and the outlook was changed to negative from stable. "The recent storm-related production delay on Endeavour-operated East Rochelle well in the U.K. North Sea came at an inopportune time given significantly weaker than expected liquidity and its limited flexibility to delay capital spending obligations given its primarily non-operator status on its reserves base," commented Saulat Sultan, Moody's Vice President. "The company's small scale and geographic concentration in the North Sea, as well as high leverage levels, further exacerbate the impact of these events." Ratings Rationale: Endeavour's Caa3 CFR reflects its weak liquidity, small production and proved reserve scale, geographic concentration and the uncertainties regarding its future performance given the inherent execution risks related to its offshore North Sea operations for a company of its size. The company has high debt levels and limited operational control over its property base as it is primarily owns non-operating working interests assets except in the Rochelle field. Endeavour is in the process of moving its drilling operations to West Rochelle in an effort to allow start-up of the Rochelle development. However, the additional cost incurred adds to an already very strained liquidity position, with the risks of further production delays and cost overruns still remaining. The company relies on its $125 million revolving credit facility that matures in October 2013 and cash on hand for its liquidity needs. While Endeavour had cash on balance sheet of approximately $75 million as of September 30, 2012 (fourth quarter and full year 2012 results are scheduled to be released on March 6, 2013), semi- annual coupon payments on its first priority and second priority notes of approximately $33 million are due in the first quarter of 2013. With delayed cash flows from Rochelle production and the upcoming revolver maturity, Endeavour's liquidity is under very significant pressure. The company's plans to explore several strategic alternatives, including a possible sale or merger of the company, further add to uncertainty. The Caa3 rating on the first priority notes and the Ca rating on the second priority notes reflect both the overall probability of default of Endeavour, to which Moody's assigns a PDR of Caa3-PD, and loss given default of LGD 3 (38%) and LGD 5 (75%), respectively. The first priority notes and second priority notes have first and second priority liens on 65% of the capital stock of Endeavour's primary foreign subsidiaries and an unsecured intercompany loan payable by the primary foreign subsidiary and all future foreign intercompany loans. Therefore the first priority notes and second priority notes have a superior claim to foreign subsidiary assets over Endeavour's 5.5% convertible senior notes due 2016 and the 11.5% convertible bonds due 2016. The negative outlook reflects the uncertainty around liquidity, operational performance, production growth, and funding through 2013. The ratings could be downgraded if Endeavour's liquidity were to further deteriorate. Moody's could revise the outlook to stable if the company sufficiently addresses its liquidity needs for the next 12-18 months and is able to achieve its production targets without delays or cost overruns. Downgrades: Issuer: Endeavour International Corporation Probability of Default Rating, Downgraded to Caa3-PD from Caa1- PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-2 Corporate Family Rating, Downgraded to Caa3 from Caa1 First Priority Notes, Downgraded to Caa3, LGD 3 (38%) from Caa1, LGD 3 (43%) Second Priority Notes, Downgraded to Ca, LGD 5 (75%) from Caa2, LGD 5 (72%) Outlook Actions: Issuer: Endeavour International Corporation Outlook, Changed to Negative from Stable The principal methodology used in rating Endeavour International Corporation was the Global Independent Exploration and Production Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Endeavour International Corporation is a publicly traded independent exploration and production company headquartered in Houston, Texas. ENDLESS MOUNTAINS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Endless Mountains Investors, LLC 1340 Zipp Road Pennsburg, PA 18073 Bankruptcy Case No.: 13-11637 Chapter 11 Petition Date: February 27, 2013 Court: United States Bankruptcy Court Eastern District of Pennsylvania (Philadelphia) Judge: Eric L. Frank Debtor's Counsel: Joshua T. McNamara, Esq. JOSHUA T. MCNAMARA, ATTORNEY AT LAW 2201 Pennsylvania Avenue, Suite 104 Philadelphia, PA 19130 Tel: (215) 260-8012 E-mail: jmcnamaralaw@comcast.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by E. Wayne Poolus, manager. EPICEPT CORP: Incurs $872,000 Net Loss in Fourth Quarter -------------------------------------------------------- Epicept Corporation reported a net loss of $872,000 on $91,000 of total revenue for the three months ended Dec. 31, 2012, as compared with a net loss of $3.45 million on $207,000 of total revenue for the same period during the prior year. For the year ended Dec. 31, 2012, the Company incurred a net loss of $2.57 million on $7.80 million of total revenue, as compared with a net loss of $15.65 million on $944,000 of total revenue during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $1.32 million in total assets, $15.29 million in total liabilities and a $13.97 million total stockholders' deficit. Robert Cook, Interim President and CEO of EpiCept, commented, "While we are focused on completing the merger with Immune that we announced in November 2012, we also remain committed to advancing our clinical programs to the greatest extent possible. We are working with the National Cancer Institute to initiate the second phase (the Phase II portion) of its study of crolibulinTM in the treatment of anaplastic thyroid cancer. Also, in conjunction with Immune we have renewed talks with several prospective partners concerning the potential out-licensing of AmiKetTM. We remain very enthusiastic about the proposed merger with Immune Pharmaceuticals as we believe this transaction will provide EpiCept shareholders the opportunity both to benefit from the further development of EpiCept's pipeline and to share in the enormous potential that exists in Immune's pipeline with bertilimumab and the NanomAb(R) technology. We expect to close the transaction in the second quarter of 2013." A copy of the press release is available for free at: http://is.gd/ULgQwO About EpiCept Corporation Tarrytown, N.Y.-based EpiCept Corporation (Nasdaq and Nasdaq OMX Stockholm Exchange: EPCT) -- http://www.epicept.com/-- is focused on the development and commercialization of pharmaceutical products for the treatment of cancer and pain. The Company's lead product is Ceplene(R), approved in the European Union for the remission maintenance and prevention of relapse in adult patients with Acute Myeloid Leukemia (AML) in first remission. In the United States, a pivotal trial is scheduled to commence in 2011. The Company has two other oncology drug candidates currently in clinical development that were discovered using in-house technology and have been shown to act as vascular disruption agents in a variety of solid tumors. The Company's pain portfolio includes EpiCept(TM) NP-1, a prescription topical analgesic cream in late-stage clinical development designed to provide effective long-term relief of pain associated with peripheral neuropathies. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Deloitte & Touche LLP, in Parsippany, New Jersey, noted that the Company's recurring losses from operations and stockholders' deficit raise substantial doubt about its ability to continue as a going concern. ESIO HOLDING: Bankruptcy Filing No Impact on Esio Water Status -------------------------------------------------------------- Esio Water and Beverage Development Corp. would like to clarify that its legal status has not been affected by the bankruptcy filing by Esio Holding Company, LLC. On February 23, 2013, Esio Holding Company, LLC and Esio Franchising, LLC, a subsidiary of EHC, filed a Chapter 11 petition in U.S. Bankruptcy Court, District of Arizona. Esio Water and Beverage Development Corp. is a separate corporate entity, with separate shareholder ownership, that has entered into various franchising agreements with EFC with respect to the Dallas/Ft. Worth region. Esio Water and Beverage Development Corp. was not part of the bankruptcy filing by EHC and EFC. The Company also notes that it is current with all of its filings with the Securities and Exchange Commission. The impact of the bankruptcy filing by EHC and EFC upon the business of Esio Water and Beverage Development Corp. is not known at the present time and may not be fully determined for several months. About Esio Water and Beverage Development Corp. Esio Water and Beverage Development Corp. Is headquartered in Scottsdale, Arizona, and its common stock trades on the OTC Bulletin Board under the symbol "ESWB". ESA ENVIRONMENTAL: 4th Cir. Says Hanover Can Keep $1.375MM ---------------------------------------------------------- The U.S. Court of Appeals for the Fourth Circuit, in a split decision, upheld a district court decision affirming the award of summary judgment to The Hanover Insurance Co. by the bankruptcy court overseeing the case of ESA Environmental Specialists, Inc. The bankruptcy court concluded that ESA's transfer of $1.375 million to Hanover within 90 days of ESA's filing a petition for bankruptcy was not an avoidable preference under 11 U.S.C. Sec. 547(b). The Trustee in bankruptcy of ESA Environmental Specialists took an appeal from the lower courts' decision. ESA was an environmental and industrial engineering firm that sought and performed construction projects under contract with the federal government. Pursuant to the Miller Act, ESA was required to obtain and furnish to the government two types of surety bonds as a condition precedent "[b]efore any contract of more than $100,000 [could be] awarded for the construction, alteration, or repair of any public building or public work of the Federal Government." The surety bonds functioned to secure ESA's obligation to complete its contract and pay its vendors and subcontractors. After ESA filed for Chapter 11 bankruptcy (Bankr. W.D. N.C. Case No. 07-31532) on Aug. 1, 2007, Hanover drew on the Letter of Credit and received the $1,375,000 payment from SunTrust. ESA's case was later converted to Chapter 7 liquidation. Stanley Campbell was duly appointed as the Chapter 7 trustee for ESA. The appellate case is, STANLEY MARVIN CAMPBELL, Plaintiff- Appellant, v. THE HANOVER INSURANCE COMPANY, Defendant-Appellee, No. 11-2150 (4th Cir.). A copy of the Fourth Circuit's March 1, 2013 decision is available at http://is.gd/NCPzSXfrom Leagle.com. Allen Burton Shuford, Esq. -- bshuford@thebaingroup.net -- at The Bain Group, PLLC, in Charlotte, North Carolina, represents the ESA Trustee. William L. Esser, Esq. -- willesser@parkerpoe.com -- at Parker, Poe, Adams & Bernstein, LLP, in Charlotte, argues for Hanover. FANNIE MAE: David Benson Succeeds Susan McFarland as CFO -------------------------------------------------------- Fannie Mae appointed David C. Benson, age 53, as Executive Vice President and Chief Financial Officer of the company, effective as of the first day following the filing of the company's annual report on Form 10-K for the year ended Dec. 31, 2012. Mr. Benson will succeed Susan R. McFarland as Fannie Mae's Chief Financial Officer. Ms. McFarland will be resigning as Executive Vice President and Chief Financial Officer effective as of the first day following the filing of the company's 2012 Form 10-K. She will remain employed by the company as a senior adviser for a transition period that will end no later than June 30, 2013. Once he becomes Executive Vice President and Chief Financial Officer, Mr. Benson will cease serving as Fannie Mae's Executive Vice President - Capital Markets, Securitization & Corporate Strategy, a position he has held since September 2012. Mr. Benson previously served as Fannie Mae's Executive Vice President - Capital Markets from April 2009 to September 2012. He also served as Treasurer from June 2010 to January 2012. Mr. Benson previously served as Fannie Mae's Executive Vice President -- Capital Markets and Treasury from August 2008 to April 2009, as Fannie Mae's Senior Vice President and Treasurer from March 2006 to August 2008, and as Fannie Mae's Vice President and Assistant Treasurer from June 2002 to February 2006. Prior to joining Fannie Mae in 2002, Mr. Benson was Managing Director in the fixed income division of Merrill Lynch & Co. From 1988 through 2002, he served in several capacities at Merrill Lynch in the areas of risk management, trading, debt syndication and e-commerce based in New York and London. On Feb. 21, 2013, Fannie Mae also appointed Andrew J. Bon Salle as Executive Vice President - Single-Family Underwriting, Pricing & Capital Markets, effective as of the first day following the filing of the company's 2012 Form 10-K. Mr. Bon Salle is currently Fannie Mae's Senior Vice President and Head of Underwriting and Pricing. About Fannie Mae Federal National Mortgage Association, aka Fannie Mae, is a government-sponsored enterprise that was chartered by U.S. Congress in 1938 to support liquidity, stability and affordability in the secondary mortgage market, where existing mortgage-related assets are purchased and sold. Fannie Mae has been under conservatorship, with the Federal Housing Finance Agency acting as conservator, since Sept. 6, 2008. As conservator, FHFA succeeded to all rights, titles, powers and privileges of the company, and of any shareholder, officer or director of the company with respect to the company and its assets. The conservator has since delegated specified authorities to Fannie Mae's Board of Directors and has delegated to management the authority to conduct day-to-day operations. The U.S. Department of the Treasury owns Fannie Mae's senior preferred stock and a warrant to purchase 79.9% of its common stock, and Treasury has made a commitment under a senior preferred stock purchase agreement to provide Fannie with funds under specified conditions to maintain a positive net worth. Fannie Mae reported a net loss of $16.85 billion in 2011, a net loss of $14.01 billion in 2010, and a net loss of $72.02 billion in 2009. The Company's balance sheet at June 30, 2012, showed $3.19 trillion in total assets, $3.19 trillion in total liabilities, and $2.77 billion in total equity. FLAMINGO 55: Nevada Court Won't Reinstate Grantham Lawsuit ---------------------------------------------------------- Nevada District Judge Kent J. Dawson declined to reinstate a lawsuit commenced by Gregory Grantham and John Saba against Timothy Cory, the Chapter 7 Trustee of the consolidated bankruptcy estates of Flamingo 55, Inc. and Vegas Townhome Partners, LP. Grantham et al. appealed the dismissal order. In several proceedings before Judge Bruce Markell, the Bankruptcy Court determined that a parcel of land containing 54 unimproved lots in Las Vegas Nevada was the property of the bankruptcy estate of Flamingo 55. Subsequently, Grantham et al. contended before the Bankruptcy Court that a ruling by the United States Court of Appeals for the Ninth Circuit demonstrates that property which the Trustee sold actually was the property of a partnership between Flamingo 55, Inc. and BA. Grantham et al. sought dissolution of the partnership and contended that the proceeds of that sale constitute partnership property and that the Trustee is wrongfully withholding funds in which the partnership has an interest. The Bankruptcy Court dismissed the action because Grantham et al. were seeking to litigate issues already decided by the Bankruptcy Court and the Ninth Circuit's decision did not affect the Bankruptcy Court's prior determinations that the Property was part of the bankruptcy estate. The District Court reviewed the issues presented in the appeal de novo. Based on this review, Judge Dawson said the Bankruptcy Court was correct in its determination that Grantham et al. failed to state a viable claim. The claims and issues raised in the Dissolution Complaint have previously been litigated between the parties. The Bankruptcy Court has determined more than once that the Property did not belong to any partnership between BA and Flamingo 55 and that it was properly included in the bankruptcy estate. An involuntary Chapter 7 bankruptcy petition was filed against Flamingo 55, Inc., (Bankr. D. Nev. Case No. 03-1947) on July 31, 2003. On Jan. 15, 2004, Timothy Cory was added as Chapter 7 trustee. Vegas Townhome Partners, L.P., filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 03-25222) on Dec. 12, 2003. On March 18, 2004, Vegas Townhome's Chapter 11 case was converted to a Chapter 7 case and Mr. Cory was added to the Vegas Townhome case as Chapter 7 trustee. On May 12, 2004, the Chapter 7 case of Flamingo 55 and Vegas Townhome were consolidated and the Trustee was confirmed as the trustee for the consolidated case. Before the Flamingo 55 bankruptcy, the Property was conveyed to entities controlled by Grantham et al. The Chapter 7 Trustee brought a fraudulent transfer action against Grantham et al. This action was settled on Aug. 3, 2004 when Grantham et al. signed a Quitclaim Deed conveying all right, title, and interest in and to the Property to Flamingo 55. The Bankruptcy Court approved settlement of the Fraudulent Transfer Action on Sept. 22, 2004. On May 7, 2004, Grantham et al. filed a proof of claim against the Debtors' estate, asserting a secured claim for $5,000,000 against the Property. The Trustee objected to the claim and on Nov. 16, 2004, the Bankruptcy Court entered an order disallowing the Claim. Grantham et al.appealed the Claim Order to the District Court. The District Court upheld the decision of the Bankruptcy Court and Grantham et al. unsuccessfully appealed to the Ninth Circuit. On Nov. 30, 2004, the Bankruptcy Court entered an Order authorizing the Trustee to sell the real property of the estate, including the Property. Grantham et al. acknowledged in their objection to the sale, that the Property was property of the bankruptcy estate. Grantham et al. filed a notice of appeal of the Sale Order, which they moved to dismiss on March 4, 2005. On Feb. 1, 2005, Grantham et al. filed a complaint against the Chapter 7 Trustee in an adversary proceeding, case no. 05-01020- BAM -- First Adversary Complaint -- seeking a declaratory judgment that Grantham et al. are the owners of the Property and entitled to an equitable lien on the Property, and seeking a constructive trust on the Property in their favor. The Bankruptcy Court granted summary judgment on the claims raised in the First Adversary Complaint and ruled that the estate owned the Property and that Grantham et al. lacked a claim to the Property. The Property was eventually sold in July 2005 and the Chapter 7 Trustee retained the proceeds from the sale. On Nov. 19, 2005, Grantham et al. filed a claim based on subrogation in the consolidated case. The Trustee filed an objection to the Subrogation Claim. The Bankruptcy Court disallowed the Subrogation Claim and issued an opinion in which the Bankruptcy Court held that Grantham et al.'s interest in Flamingo 55 was equity interest only and not an interest in the ownership of the Property. The Bankruptcy Court found that the Trustee's claim to the property had priority over any alleged subrogation claim and "As of [the Trustee's] appointment, he had the status of a bona fide purchaser of the . . . Property without notice of [Plaintiffs'] claimed subrogation interest." Grantham et al. moved for reconsideration of the Order, which the Bankruptcy Court denied. Grantham et al. then appealed to the District Court, which affirmed the Bankruptcy Court's ruling. Grantham et al. appealed to the Ninth Circuit, which affirmed the Bankruptcy Court's disallowance of the subrogation claim. In its opinion, the Ninth Circuit noted the Bankruptcy Court's determination that BA was partners with Flamingo 55, and stated that "We clarify that it is [BA's] position as a partner or coventurer in the development enterprise that distinguished it as a joint borrower rather than a mere surety, guarantor or accommodation comaker." Grantham et al. contend that this language established BA's interest in the Property. On Sept. 27, 2011, Grantham et al. filed a complaint against Defendants in District Court. Based on the Ninth Circuit's ruling, Grantham et al. sought dissolution of the partnership between BA and Flamingo 55 and further sought judgment against the Defendants based on the Trustee's sale of the Property. Judge Philip M. Pro referred the matter to the Bankruptcy Court because the claims were core proceedings. Grantham et al.'s Dissolution Complaint claimed that the Ninth Circuit had "determined that Grantham and Saba's predecessor in interest Broadway-Acacia, LLC, and the debtor Flamingo 55, Inc., were partners or coventurers in a venture to develop certain property." On Feb. 24, 2012, the Chapter 7 Trustee filed a Motion to Dismiss the Complaint, which the Bankruptcy Court granted on April 6, 2012. The case is, GREGORY E. GRANTHAM, et al., Plaintiffs/Appellants, v. TIMOTHY S. CORY, et al., Defendants/Appellees, Case No. 2:12- CV-00671-KJD-CWH (D. Nev.). A copy of the Court's Feb. 28, 2013 order is available at http://is.gd/7BMn6Wfrom Leagle.com. FRANK PARSONS: Suits v. Insurer, Int'l Paper Remain Pending ----------------------------------------------------------- Bankrutcy Judge Robert A. Gordon signed off on two stipulations that extend the time for defendants to respond to lawsuits filed by Edward T. Gavin, the duly appointed Trustee of the FPI Liquidating Trust. The Trust sued the defendants to avoid preferential transfers, recover property, and for related relief. The stipulations extend the response deadline to: -- February 22, 2013, for The Insurance Company of the State of Pennsylvania, which is represented by Adam L. Rosen, Esq. -- ARosen@silvermanacampora.com -- at SILVERMAN ACAMPORA LLP, in Jericho, New York. A copy of the stipulation is available at http://is.gd/Ivpfnifrom Leagle.com. -- February 25, 2013, for International Paper Company, which is represented by David M. Banker, Esq. -- dbanker@lowenstein.com -- at LOWENSTEIN SANDLER LLP, in New York NY 10020. A copy of the stipulation is available at http://is.gd/TZtWEpfrom Leagle.com. About Frank Parsons Headquartered in Hanover, Maryland, Frank Parsons, Inc. -- http://www.frankparsons.com/-- aka Frank Parsons Paper Company Inc., was the largest employee-owned, business products, technology, and office supplies company in the United States, offering more than 180,000 products from companies such as Avery, Fujifilm, Hewlett Packard, IBM, Sony, Xerox, Xiotech, and more. Frank Parsons is an approved contractor on the GSA Schedule and an authorized AbilityOne Distributor. The company holds several environmental certifications, including FSC, SFI, and PEFC. Frank Parsons filed for Chapter 11 bankruptcy protection (Bankr. D. Md. Case No. 11-10338) on Jan. 6, 2011. The Debtor estimated its assets and debts at $10 million to $50 million. Judge Robert A. Gordon presides over the case. Gary H. Leibowitz, Esq., and Irving Edward Walker, Esq., at Cole Schotz Meisel Forman & Leonard, PA, served as the Debtor's bankruptcy counsel. The Debtor also tapped SSG Capital as an investment banker to explore strategic options. WeinsweigAdvisors LLC served as the financial advisor to the Debtor. Delaware Claims Agency, LLC, acted as the claims and noticing agent. Brent C. Strickland, Esq., at Whiteford, Taylor & Preston L.L.P., in Baltimore, Maryland, and Bradford J. Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware, served as counsel to the Official Committee of Unsecured Creditors formed in the Chapter 11 case. Frank Parsons changed its name to "FPI Liquidation Corp." after closing of the sale of substantially all of its assets to TSRC, Inc., in May 2011. Pursuant to an asset purchase agreement, the Buyer paid $2,000,000, plus 50 % of the book value of the Closing Inventory, for the purchased assets. Edward T. Gavin, who serves as trustee of the FPI Liquidating Trust, is represented by lawyers at Whiteford Taylor Preston LLP, and Pachulski Stang Ziehl & Jones LLP. FREESEAS INC: Issues 200,000 Additional Shares to Hanover --------------------------------------------------------- The Supreme Court of the State of New York, County of New York, on Feb. 13, 2013, entered an order approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with a stipulation of settlement between FreeSeas Inc., and Hanover Holdings I, LLC, in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 150802/2013. Hanover commenced the Action against the Company on Jan. 28, 2013, to recover an aggregate of $740,651 of past-due accounts payable of the Company, plus fees and costs. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on Feb. 13, 2013. As previously reported, pursuant to the terms of the Settlement Agreement approved by the Order, on Feb. 13, 2013, the Company issued and delivered to Hanover 185,000 shares of the Company's common stock, $0.001 par value. The Settlement Agreement provides that the Initial Settlement Shares will be subject to adjustment on the trading day immediately following the "Calculation Period" to reflect the intention of the parties that the total number of shares of Common Stock to be issued to Hanover pursuant to the Settlement Agreement be based upon a specified discount to the trading volume weighted average price of the Common Stock for a specified period of time subsequent to the Court's entry of the Order. Based on the adjustment formula, on Feb. 19, 2013, the Company issued and delivered to Hanover 90,000 Additional Settlement Shares, on Feb. 25, 2013, the Company issued and delivered to Hanover another 90,000 Additional Settlement Shares, and on Feb. 26, 2013, the Company issued and delivered to Hanover another 90,000 Additional Settlement Shares. On Feb. 27, 2013, the Company issued and delivered to Hanover 100,000 Additional Settlement Shares pursuant to the terms of the Settlement Agreement approved by the Order. The following day, the Company issued and delivered to Hanover 100,000 Additional Settlement Shares pursuant to the terms of the Settlement Agreement approved by the Order. A copy of the Form 8-K is available for free at: http://is.gd/oyNdO9 About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. As reported in the Troubled Company Reporter on July 18, 2012, Ernst & Young (Hellas) Certified Auditors Accountants S.A., in Athens, Greece, expressed substantial doubt about FreeSeas' ability to continue as a going concern, following its audit of the Company's financial statements for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. "In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements with banks." The Company's balance sheet at June 30, 2012, showed US$120.8 million in total assets, US$104.1 million in total current liabilities, and shareholders' equity of US$16.7 million. GARY STANCIL: Gets Favorable Ruling in Suit v. Bradley Investments ------------------------------------------------------------------ Judge S. Martin Teel, Jr., of the United States Bankruptcy Court for the District of Columbia denied a motion for summary judgment filed by 12th Street Real Estate, LLC, in the case GARY STANCIL, Plaintiff, v. BRADLEY INVESTMENTS, LLC, et al., Defendants, Case No. 11-00747, Adversary Proceeding No. 12-10006. The lawsuit seeks to invalidate a foreclosure sale wherein 12th Street acquired real property that is owned 50-50 by Mr. Stancil and his mother. The Court granted Mr. Stancil's motion for summary judgment on his claim for turnover of the Property and net rents. His motion for summary judgment on his claim of willful violation of the automatic stay will be granted as to the defendants Greg and Susan Friedman, and will be denied as to the other defendants, Judge Teel ruled. The issue of whether Mr. Stancil is entitled to punitive damages is reserved for trial, along with the issue of the amount of other damages to be awarded to him, the Court said. A copy of the Bankruptcy Court's February 23, 2013 Memorandum Of Decision and Order is available at http://is.gd/195ExIfrom Leagle.com. Gary Stancil filed for Chapter 11 bankruptcy (Bankr. D.D.C. Case No. 11-00747) on Oct. 6, 2011. GMX RESOURCES: Gets NYSE Listing Non-Compliance Notice ------------------------------------------------------ GMX Resources Inc. on March 4 disclosed that that the Company has been notified by the New York Stock Exchange that it is not in compliance with one of the continued listing standards of the NYSE. The Company is considered below criteria established by the NYSE because the Company's total market capitalization has been less than $50 million over a consecutive 30 trading day period and its last reported shareholders' equity was less than $50 million. In accordance with NYSE procedures, the Company has 45 days from receipt of the notice to submit a plan to the NYSE demonstrating how it intends to comply with the NYSE's continued listing standards within 18 months. The Listings and Compliance Committee of the NYSE will then review the business plan for final disposition. In the event that the Committee accepts the plan, the Company will be subject to quarterly monitoring for compliance with the business plan and the Company's stock will continue to trade on the NYSE during the plan period, subject to the Company's compliance with other NYSE continued listing requirements. In the event the Committee does not accept the business plan, the Company will be subject to suspension by the NYSE and delisting procedures. Bakken Operations Update The Lange 44-31-2H, located in Sections 30 & 31, Township 147N Range 99W in McKenzie County, North Dakota is currently producing with a peak 24 hour flow rate of 2,402 BOEPD. The Company has an 89% working interest and this well targeted the Middle Bakken with a total depth of 20,255' and a lateral length of 8,630'. The well was drilled parallel to the Lange 11-30-1H. The Helmerich & Payne FlexRig 3(TM) #255 has been relocated to Sections 16 & 21, Township 143N Range 99W in Billings County, North Dakota. Plans called for the FlexRig 3(TM) to drill two Middle Bakken wells off the same pad. The Company completed the drilling of the Fairfield State 21-16-1H-RE in January 2013, and has now reached total depth on the Fairfield 21-16-2H. The Fairfield 21-16-2H achieved a new Company record for spud to total depth of 21 days which is eight days faster than any previously drilled well. Both wells are planned as 9,850' horizontal laterals. The Company plans to fracture stimulate the wells simultaneously. The pad drilling and zipper-frac is expected to reduce the overall project costs in which the Company has a 96% working interest. The Company expects to have both wells contributing to production early in the second quarter weather permitting. Notice Regarding Interest Payment The Company is filing today with the SEC information required on Form 8-K regarding its failure to pay an interest payment due March 4, 2013 on its Senior Secured Second-Priority Notes due 2018, and related triggering events. GMX Resources Inc. is an oil and gas exploration and production Company with assets in the Williston Basin, Denver Julesburg ("DJ") Basin and East Texas Basin. GRAN RANCHO: Case Summary & 2 Unsecured Creditors ------------------------------------------------- Debtor: Gran Rancho Rancho Jubilee, LLC aka Gran Rancho Jubilee 23-04 94th. Street Queens, NY 11369 Bankruptcy Case No.: 13-41062 Chapter 11 Petition Date: February 27, 2013 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtor's Counsel: Nestor Rosado, Esq. LAW OFFICE OF NESTOR ROSADO PC 55 Overlook Terrace Suite 1H New York, NY 10033 Tel: (212) 781-4808 Fax: (212) 781-6004 E-mail: neslaw2@msn.com Scheduled Assets: $563,000 Scheduled Liabilities: $1,174,657 A copy of the Company's list of its two largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/nyeb13-41062.pdf The petition was signed by Domingo Taveras. GREEN ENERGY: R. Thomson Discloses 32.6% Equity Stake at Dec. 31 ---------------------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Robert B. Thomson, managing member of Water Tech World Wide, LLC, disclosed that, as of Dec. 31, 2012, he beneficially owns 21,420,798 shares of common stock of Green Energy Management Services Holdings, Inc., representing 32.6% of the shares outstanding. Water Tech beneficially owns 21,373,345 common shares as of that date. On Jan. 31, 2013, the Board of Directors of the Company elected Dr. Thomson as a director, effective immediately, to replace the vacancy created by the resignation of Mr. William D'Angelo. A copy of the regulatory filing is available for free at: http://is.gd/D7MLav 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." HAMPTON ROADS: Names Schroeder as Bank's SVP-Commercial Banking --------------------------------------------------------------- Hampton Roads Bankshares, Inc., announced that John R. Schroeder has joined Shore Bank's commercial banking team in Rehoboth Beach, Delaware, as Senior Vice President - Commercial Banking, reporting to James D. Barr, Delaware Market President for Shore Bank. Mr. Schroeder brings over 35 years of experience in commercial banking in southern Delaware and surrounding areas. Douglas J. Glenn, president and chief executive officer of the Company and chief executive officer of BHR, said, "We are very pleased to welcome John to our team. He brings a proven track record, deep knowledge of the markets in the Delaware region, and decades of experience across all aspects of commercial real estate finance, including origination, underwriting, structuring, and servicing." Prior to joining Shore Bank, Mr. Schroeder served as Senior Vice President with Applied Bank in Rehoboth Beach, Delaware. From 1994 to 2009, he served as a Vice-President and commercial relationship manager with PNC and its predecessors Baltimore Trust and Mercantile Peninsula Bank. From 1984 to 1994, Mr. Schroeder worked for Second National Federal Savings Bank in the Delaware markets. Prior to that, he began his banking career as a Branch Manager for Sussex Trust Company. Mr. Schroeder earned a BA in Political Science from the University of Delaware. He is also a graduate of the University of Virginia's Graduate School of Retail Bank Management. From 1988 to 2002 Mr. Schroeder was an elected member of the Delaware House of Representatives, serving on the Education, Environmental, Agricultural and Bond Committees during his seven terms. Mr. Schroeder also served on the Family Law Commission of Delaware and currently serves on the Greater Lewes Foundation, the Sussex County Land Trust, the Delaware Open Space Council and the Rehoboth Art League. 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. HARLAN LABORATORIES: Moody's Affirms 'B3' CFR; Outlook Stable ------------------------------------------------------------- Moody's Investors Service affirmed the B3 Corporate Family Rating and B3-PD Probability of Default Rating of Harlan Laboratories, Inc. and assigned a B1 rating to the proposed $200 million first lien term loan and a Caa2 rating to the proposed $85 million second lien facility. The rating outlook is stable. Ratings Affirmed: Corporate Family Rating, B3 Probability of Default Rating, B3-PD Ratings Assigned: Proposed $20 million First Lien Revolving Credit Facility, due 2016, B1 (LGD3, 33%) Proposed $200 million First Lien Term Loan, due 2016, B1 (LGD3, 33%) Proposed $85 million Second Lien Term Loan, due 2017, Caa2 (LGD5, 81%) The outlook is stable. Ratings to be withdrawn upon repayment: Harlan Laboratories: First Lien Revolving Credit Facility, due 2013, B3 (LGD3, 46%) First Lien Term Loan, due 2014, B3, (LGD3 46%) Harlan Netherlands B.V.: First Lien EURO Revolving Credit Facility, due 2013, B3 (LGD3, 46%) Ratings Rationale: The B3 Corporate Family Rating is constrained by Harlan's small absolute size, high financial leverage, and limited free cash flow. A challenging industry environment, along with operational missteps, have resulted in stagnant revenue and earnings over the past several years. Moody's expects a number of these challenges to persist, thereby limiting near-term growth and deleveraging opportunities. The ratings are supported by the relative stability and high barriers to entry in the research models and services business and Harlan's solid position worldwide in that market. The ratings are also supported by Harlan's good customer and end- market diversity. Further, Moody's expects the company to maintain adequate liquidity over the next 12 months and believes that the company's value exceeds the debt. Although not anticipated, if Harlan demonstrates sustainable revenue growth and EBITDA improvement such that adjusted leverage approaches 5.0 times, and free cash flow to debt exceeds 5% Moody's could upgrade the ratings. Upward rating action would further be supported by improvement in the overall preclinical services market. Sustained negative free cash flow or a decline in EBITDA such that leverage was expected to be sustained above 7.0x could lead to a ratings downgrade. Further, if the company's organic growth trends are consistently worse than other industry peers, Moody's could downgrade the ratings. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Harlan Laboratories, headquartered in Indianapolis, Indiana, is a global provider of products and services used in discovery and development research in the pharmaceutical, biotechnology, agrochemical, industrial chemical, and food industries. The company's businesses include research models and services, including laboratory diets and bedding, and biomedical products and pre-clinical contract research services, including toxicology, environmental chemistry and pharmanalytics. For the twelve months ended December 2012, Harlan generated net sales approximating $347 million. Harlan is privately held with majority ownership by Genstar Capital. IBIO INC: Gets NYSE MKT Listing Non-Compliance Notice ----------------------------------------------------- iBio, Inc. on March 4 disclosed that it has been notified by the NYSE MKT Staff that the Company is currently not in compliance with the listing standard set forth in Section 1003(a)(ii) of the NYSE MKT Company Guide. This standard applies if a listed company has stockholders' equity of less than $4,000,000 and net losses in three of its most recent four years. As previously announced, in December 2012 the Company submitted, and the Exchange subsequently accepted a plan of compliance which is intended to restore the Company's compliance with the Exchange's continued listing criteria set forth in Section 1003(a)(iii) of the NYSE MKT Company Guide. These listing criteria apply if a listed company has stockholders' equity of less than $6,000,000 and net losses in its five most recent years. Due to the higher stockholder's equity requirement contained in Section 1003(a)(iii), the Company is not required to submit an additional plan of compliance in connection with the deficiency noticed in the Exchange's most recent correspondence. The Company, pursuant to an extension of time previously granted by the Exchange, must regain compliance with Exchange's continued listing standards, including the criteria contained in each of Section 1003(a)(ii) and Section 1003(a)(iii), by October 14, 2013. During this extension period, the Company will be subject to periodic review by the Staff of the Exchange. The failure by the Company to make progress consistent with the accepted plan or to regain compliance with the continued listing standards by the end of the extension period could result in the Company being delisted from the Exchange. About iBio Inc. Based in Newark, Del., iBio, Inc. -- http://www.ibioinc.com-- is a biotechnology company focused on commercializing its proprietary technologies, the iBioLaunch(TM) platform for vaccines and therapeutic proteins, as well as the iBioModulator(TM) platform for vaccine enhancement. * * * As reported in the TCR on Oct. 16, 2012, CohnReznick LLP, in Eatontown, N.J., expressed substantial doubt about iBio's ability to continue as a going concern. The independent auditors noted that the Company has incurred net losses and negative cash flows from operating activities for the years ended June 30, 2012, and 2011, and has an accumulated deficit as of June 30, 2012. INKIA ENERGY: Fitch Hikes Issuer Default Rating to 'BB' ------------------------------------------------------- Fitch Ratings has upgraded Inkia Energy's Ltd foreign and local currency Issuer Default Ratings (IDRs) to 'BB' from 'BB-'. The rating action affects USD300 million of senior unsecured notes due 2021. The Rating Outlook is Stable. The rating upgrade reflects the completion of Kallpa's expansion and conversion to combined-cycle capacity in August 2012, which will result in higher cash flow generation starting in 2013. The rating upgrade also reflects the repayment of intermediate holding company debt that was limiting the flow of dividends from Edegel to Inkia. Inkia's ratings are supported by the strength of the credit quality of its most important subsidiary, Kallpa, which is an 857 MW (megawatt) Peruvian thermoelectric generation company. Inkia has a 75% participation in Kallpa, whose credit quality is supported by its contractual position and competitive cost structure. Inkia's ratings also incorporate the geographic diversification of its assets, large expansion project, and expected improvements in its financial profile following the completion of these projects. Credit Profile Linked to Kallpa Kallpa's credit quality is supported by its competitive cost structure and its contracted position. Kallpa has entered into 34 power purchase agreements (PPAs). These PPAs, combined, amount to approximately 734 MW of annual contracted capacity, on average, over the next 12 years. These agreements add to cash flow stability and predictability. They are denominated in USD, reducing the company's exposure to foreign exchange risk, as the bulk of the company's debt is denominated in the same currency. In August 2012, Kallpa completed its expansion project, which increased the plant's installed capacity to 857 MW from 581 MW and improved its efficiency through the installation of a 289 MW combined-cycle unit. Kallpa's financial profile improved as a result of this expansion. This company is expected to represent approximately 60% of Inkia's consolidated EBITDA and 40% of cash flow distributions to Inkia. Kallpa's EBITDA should increase by approximately USD100 million to USD150 million and decrease leverage at this subsidiary to between 2.5-3.0x by 2013. High Leverage During Expansion Inkia's stand-alone financial profile is currently weak for the rating category. Following the completion of Kallpa's expansion project, Inkia's consolidated financial profile started improving and is expected to continue strengthening to a level consistent with the assigned rating. As of Sept. 2012, Inkia's consolidated leverage, as measured by total senior debt to EBITDA, was high at approximately 5.9x. The high leverage level resulted mostly from project-financed debt issued at the Kallpa level to finance the expansion project. In 2013, consolidated leverage, excluding the Cerro del Aguila project related debt, is expected to improve to approximately 3.5x to 4.0x as Kallpa would report a full year of operations. As of Sept. 2012, Inkia's consolidated EBITDA (plus dividends) and net cash flow from operations (CFO) were USD143 million and USD77 million, respectively. Inkia had total consolidated debt of USD 1,015 million as of Sept. 30, 2012. After giving equity credit to a USD169 million intercompany loan from its parent, Israel Corp., Inkia's adjusted debt was USD845 million. Inkia's debt as of Sept. 2012 was composed of approximately USD300 million at the holding company level and the balance was debt at its subsidiaries. Adequate Liquidity Position Inkia's liquidity position is adequate. As of Sept. 30, 2012, the company's consolidated cash position amounted to USD221 million, of which approximately USD100 million was at the holding company and USD121 million was at consolidated subsidiaries. The company's liquidity position is supported by its cash on hand, readily monetizable assets, as well as dividends and disbursements, which range between USD20 million and USD30 million, from its different subsidiaries. Inkia owns 21% of Edegel, which is the largest generation company in Peru, with a current market capitalization of approximately USD2.4 billion. The company also benefits from favorable access to the local capital markets to finance investment projects at the subsidiaries' level. Currently, the company has been able to secure through banks 100% of the required funds to finance the construction of the Cerro del Aguila hydroelectric generation plant. Inkia also benefits from the financial flexibility provided by intercompany debt with its ultimate shareholder as this subordinated debt does not carry a fixed amortization schedule and does not share collateral (shares on assets) with Inkia's bonds. Asset Diversification Inkia's ratings also take into consideration the company's geographic diversification. Excluding its Peruvian operations, the company generated approximately 35% of its 2012 consolidated EBITDA (plus dividends) from assets located in Bolivia (rated 'BB- ' by Fitch), Chile (rated 'A+'), the Dominican Republic (rated 'B') and El Salvador (rated 'BB'). Over the past few years, cash flow from these assets was of strategic importance for Inkia. With the completion of Kallpa's expansion, this asset is expected to represent a significant portion of cash distributions to the holding company starting in 2013. The consolidated credit metrics of Inkia should continue to be characterized by relatively high leverage ratios in the medium term, as the company continues its expansion strategy and finances growth with debt at project level and to a lesser extent at the holding company level. On a stand-alone basis, Inkia's holding company credit metrics will improve in 2013 to levels consistent with the assigned rating. Debt Structurally Subordinated Inkia's debt is structurally subordinated to debt at the operating companies. As of Sept. 30, 2012, total debt at the subsidiary level amounted to approximately USD531 million or 63% of total consolidated adjusted debt. The bulk of this debt is represented by notes issued by Kallpa to fund the capacity expansion. This project-finance-like debt has a standard covenants package including dividend restrictions and limitations on additional indebtedness. Specifically, Kallpa is restricted from making dividend payments to Inkia if its debt service coverage ratio (DSCR) falls below 1.2x. Fitch's expects Kallpa's DSCR to reach its lowest point in 2014 at 1.5x. Key Rating Drivers A negative rating action could be triggered by a combination of the following factors: leverage does not moderate at Kallpa after it completes its combined cycle expansion project; Inkia pursues additional opportunities in generation without an adequate amount of additional equity; or the company's asset portfolio becomes more concentrated in countries with high political and economic risk. Although a positive rating action is not expected in the near future, any combination of the following factors could be considered: the Peruvian operation's cash flow contribution increases beyond current expectations; and/or leverage declines materially. IN THE PLAY: Involuntary Chapter 11 Case Summary ------------------------------------------------ Alleged Debtor: In The Play, Inc. 335 North Broad St. Lansdale, PA 19446 Case Number: 13-11666 Involuntary Chapter 11 Petition Date: February 27, 2013 Court: Eastern District of Pennsylvania (Philadelphia) Judge: Eric L. Frank Petitioner's Counsel: Garabed Kendikian, Esq. LAW OFFICES OF CHARLES KENDIKIAN, LLC 1476 West Main St. Lansdale, PA 19446 Tel: (215) 855 5550 E-mail: charles@cklawoffices.com In The Play, Inc.'s petitioners: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Richard Strauss Unpaid Loans $479,443 125 Brinkley Drive Sellersville, PA 18960 JAAZ, LLC Unpaid Loans $409,166 94 Warner Court Glastonbury, CT 06033 Andrew Michelin Unpaid Loans $157,522 150 Brock South Montreal West, QC H4X 2E8 Canada JACKSONVILLE BANCORP: Sutherland Asset Owns 9.9% Stake at Feb. 18 ----------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Sutherland Asset I, LLC, and its affiliates disclosed that, as of Feb. 18, 2013, they beneficially own 5,340,000 shares of common stock of Jacksonville Bancorp, Inc., representing 9.98% of the shares outstanding. A copy of the filing is available for free at http://is.gd/eyrLFl About Jacksonville Bancorp Jacksonville Bancorp, Inc., a bank holding company, is the parent of The Jacksonville Bank, a Florida state-chartered bank focusing on the Northeast Florida market with approximately $583 million in assets and eight full-service branches in Jacksonville, Duval County, Florida, as well as the Company's virtual branch. The Jacksonville Bank opened for business on May 28, 1999, and provides a variety of community banking services to businesses and individuals in Jacksonville, Florida. According to the Form 10-Q for the period ended June 30, 2012, the Bank was adequately capitalized at June 30, 2012. Depository institutions that are no longer "well capitalized" for bank regulatory purposes must receive a waiver from the FDIC prior to accepting or renewing brokered deposits. The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") generally prohibits a depository institution from making any capital distribution (including paying dividends) or paying any management fee to its holding company, if the depository institution would thereafter be undercapitalized. The Bank had a Memorandum of Understanding ("MoU") with the FDIC and the Florida Office of Financial Regulation that was entered into in 2008, which required the Bank to have a total risk-based capital of at least 10% and a Tier 1 leverage capital ratio of at least 8%. Recently, on July 13, 2012, the 2008 MoU was replaced by a new MoU, which, among other things, requires the Bank to have a total risk-based capital of at least 12% and a Tier 1 leverage capital ratio of at least 8%. "We did not meet the minimum capital requirements of these MOUs at June 30, 2012, and Dec. 31, 2011, when the Bank had total risk-based capital of 8.09% and 9.85% and Tier 1 leverage capital of 5.26% and 6.88%, respectively." Jacksonville's balance sheet at Sept. 30, 2012, showed $551.55 million in total assets, $537.97 million in total liabilities and $13.57 million in total shareholders' equity. JAWSS PARTNERSHIP: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Jawss Partnership dba Warhorse Inn 19420 E. Main St. Parker, CO 80138 Bankruptcy Case No.: 13-12726 Chapter 11 Petition Date: February 27, 2013 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Matthew R. Osborne, Esq. MATTHEW R. OSBORNE PC 2055 S. Oneida St. Ste. 370 Denver, CO 80224 Tel: (303) 759-7018 E-mail: matthewosbornelaw@gmail.com Scheduled Assets: $1,217,800 Scheduled Liabilities: $661,312 A copy of the Company's list of its six largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/cob13-12726.pdf The petition was signed by Michael Bahr, owner. JARDEN CORP: Share Repurchase No Impact on Moody's 'Ba3' CFR ------------------------------------------------------------ Moody's reports that Jarden Corporation's announcement on February 28, 2013, that it had initiated a $250 million accelerated share repurchase is negative for Jarden's credit profile, but not enough to alter its Ba3 Corporate Family Rating or stable outlook. The principal methodology used in this rating was the Global Consumer Durables published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Jarden Corporation is a provider of a diverse range of consumer products with a portfolio of over 100 brands sold globally. Jarden operates in three primary business segments through a number of well recognized brands, including: Outdoor Solutions: Abu Garcia, Aero, Berkley, Campingaz and Coleman, ExOfficio, Fenwick, Gulp!, Invicta, K2, Marker, Marmot, Mitchell, Penn, Rawlings, Shakespeare, Stearns, Stren, Trilene, V�lkl and Zoot; Consumer Solutions: Bionaire, Breville, Crock-Pot, FoodSaver, Health o meter, Holmes, Mr. Coffee, Oster, Patton, Rival, Seal-a-Meal, Sunbeam, VillaWare and White Mountain; and Branded Consumables: Ball, Bee, Bernardin, Bicycle, Billy Boy, Crawford, Diamond, Dicon, Fiona, First Alert, First Essentials, Hoyle, Kerr, Lehigh, Lifoam, Lillo, Loew Cornell, Mapa, NUK, Pine Mountain, Quickie, Spontex and Tigex. The company reported net sales of approximately $6.7 billion for the year ended December 31, 2012. JGP PROPERTIES: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: JGP Properties, L.L.C. dba Ridge Pointe Apartments 8900 Old Santa Fe Road Kansas City, MO 64138 Bankruptcy Case No.: 13-40618 Chapter 11 Petition Date: February 28, 2013 Court: U.S. Bankruptcy Court Western District of Missouri (Kansas City) Judge: Cynthia A. Norton Debtor's Counsel: Neil S. Sader, Esq. THE SADER LAW FIRM, LLC 2345 Grand Boulevard, Suite 1925 Kansas City, MO 64108-2663 Tel: (816) 561-1818 Fax: (816) 561-0818 E-mail: nsader@saderlawfirm.com Scheduled Assets: $4,137,000 Scheduled Liabilities: $8,002,935 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/mowb13-40618.pdf The petition was signed by Jeremy Dale Price, administrative member. JORGE ANDRARDE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Jorge Andrarde Amigo Construction, Inc. 4263 Ocean Side Boulevard Ocean Side, CA 92056 Bankruptcy Case No.: 13-11347 Chapter 11 Petition Date: February 28, 2013 Court: U.S. Bankruptcy Court Central District of California (San Fernando Valley) Judge: Alan M. Ahart Debtor's Counsel: Sergio J. Siderman, Esq. LA BANKRUPTCY GROUP, LLC 700 S. Flower Street, Suite 2710 Los Angeles, CA 90017 Tel: (213) 622-8352 Fax: (213) 927-3630 E-mail: ssiderman@labklaw.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by George Andrade, director. K-V PHARMACEUTICALS: Creditors Ask Judge to Delay Plan Hearing -------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that creditors of women's health care company K-V Pharmaceutical Co. on Friday urged the bankruptcy judge overseeing the company's Chapter 11 proceedings to postpone a hearing this month so the parties can work out a proposal better than the current plan to reorganize K-V with the help of an $85 million loan. The report related that K-V reached a financing deal with senior noteholders, the largest of which is Silver Point Capital LP, in December. The financing is intended to take advantage of a $60 million settlement with Hologic Inc., the report added. About K-V Pharmaceutical K-V Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4, 2012, filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V employed Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V tapped Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. LAGUNA BRISAS: Property Valued at $12 Million Per Stipulation ------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved a stipulation determining the value of Laguna Brisas, LLC's property to be $12 million. The stipulation was entered among the Debtor, Wells Fargo Bank, N.A., as trustee for the registered holders of Banc of America Commercial Mortgage Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-3 by and through CWCapital Asset Management LLC, solely in its capacity as Special Servicer, Kay Nam Kim, and Mehrdad Elie. The stipulation resolves the Debtor's motion to determine value of commercial real property. About Laguna Brisas Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Campbell, since Oct. 3, 2011. M. Jonathan Hayes, Esq., at the Law Office of M. Jonathan Hayes represents the Debtor in its restructuring effort. Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy" Kim -- represents the Debtor as special counsel. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. The Debtor's Plan provides that Wells Fargo Bank will be paid in full, at a contract interest rate of 6.23%, or roughly $57,000 per month. General unsecured claims will be paid in full, pro-rata, in monthly installment of $43,000 over 58 months. General unsecured claims, which are impaired under the Plan, are estimated to aggregate $2.475 million. The Court has scheduled a hearing on the Debtor's Disclosure Statement on Feb. 21, 2013, at 10:30 a.m. LAGUNA BRISAS: Can Pay $22,000 Holdback Fees to General Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized Laguna Brisas, LLC, to use cash collateral to pay holdback allowed fees of its general counsel -- M. Jonathan Hayes, Esq. at the Law Office of M. Jonathan Hayes. The receiver is authorized to make payment to Mr. Hayes of $22,000. At the hearing, the Court noted that it previously allowed fees to the Debtor's general counsel but ordered payment of $22,000 of those fees to be held back pending the continued hearing on use of cash collateral. About Laguna Brisas Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Calif. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Campbell, since Oct. 3, 2011. M. Jonathan Hayes, Esq., at the Law Office of M. Jonathan Hayes represents the Debtor in its restructuring effort. Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy" Kim -- represents the Debtor as special counsel. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. The Debtor's Plan provides that Wells Fargo Bank will be paid in full, at a contract interest rate of 6.23%, or roughly $57,000 per month. General unsecured claims will be paid in full, pro-rata, in monthly installment of $43,000 over 58 months. General unsecured claims, which are impaired under the Plan, are estimated to aggregate $2.475 million. The Court has scheduled a hearing on the Debtor's Disclosure Statement on Feb. 21, 2013, at 10:30 a.m. LAHAINA FASHIONS: Final Judgment in Suit vs. Bank of Hawaii Upheld ------------------------------------------------------------------ The Intermediate Court of Appeals of Hawaii on February 21, 2013, affirmed a final judgment entered by the Circuit Court of the Second Circuit on July 8, 2010, in favor of Bank of Hawaii in the case LAHAINA FASHIONS, INC. v. BANK OF HAWAII. Lahaina initiated the lawsuit against Bank of Hawai'i, Hawaiian Trust Company, Ltd., Hawai'i Real Estate Equity Fund, and Pacific Century Trust on June 25, 2007, asserting claims against the Bank for fraud, conspiracy to defraud, breach of fiduciary duty, and tortious interference with prospective business advantage. Following a jury trial, the Circuit Court of the Second Circuit on July 8, 2010, entered final judgment in favor of Bank of Hawaii. Lahaina appealed. On appeal, Lahaina claims that the Circuit Court erred in (1) denying its motion to correct the verdict and enter a judgment and its motion to deny the Defendants' proposed findings of fact and conclusions of law and to resubmit to the jury; (2) granting the Defendants' motion for judgment as a matter of law as to Lahaina's breach-of-fiduciary-duty claim; (3) excluding from evidence the Plaintiff's Exhibit 81, which consists of (i) an e-mail from the Bank's attorney James K. Tam to an officer at the Bank, and (ii) a letter from Lahaina's attorney, David H. Nakamura, to Attorney Tam; and (4) refusing to disclose all of the Defendants' attorney-client communications concerning the property in question from 1994 through 2002. The Defendants filed a cross-appeal, asserting that the Circuit Court erred in denying three pre-judgment motions in which the Defendants argued that Lahaina's tortious-interference claim was barred by the statute of limitations. The Court of Appeals concluded that the Circuit Court correctly denied Lahaina's Motion to Correct Verdict and Enter Judgment and its Motion to Resubmit because the jury had been discharged and lacked the authority to amend its verdict. Besides, the Court added, there was no valid basis for amending the Verdict Form. The February 21, 2013 decision further held that: -- Lahaina failed to show that the Circuit Court erred in granting the Defendants' motion for JMOL on its breach-of- fiduciary-duty claim; -- the Circuit Court did not abuse its discretion in excluding Exhibit 81; -- the Circuit Court did not err in limiting the discovery of attorney-client communications; and -- the Defendants' cross-appeal is moot. The case is captioned LAHAINA FASHIONS, INC., a Hawai'i corporation, Plaintiff-Appellant/Cross-Appellee, v. BANK OF HAWAII, a Hawai'i corporation; HAWAIIAN TRUST COMPANY, LTD., as Trustee for Hawai'i Real Estate Equity Fund; HAWAI'I REAL ESTATE EQUITY FUND; PACIFIC CENTURY TRUST, a division of Bank of Hawai'i as Trustee of the Hawai'i Real Estate Equity Fund, Defendants- Appellees/Cross-Appellants and JOHN DOES 1-10, AND DOE ENTITIES 1-10, Defendants, No. 30644. Joseph M. Alioto, Esq. -- jmalioto@aliotolaw.com -- and James M. Dombroski, Esq. -- Jdomski@aol.com -- represent the Plaintiff-Appellant/Cross-Appellee. Terence J. O'Toole, Esq. -- totoole@starnlaw.com -- and Andrew Lautenbach, Esq. -- alautenbach@starnlaw.com -- represent the Defendants-Appellees/Cross-Appellants. A copy of the Appeals Court's February 21, 2013 Opinion is available at http://is.gd/6Sj7MCfrom Leagle.com. Lahaina Fashions, Inc., filed a voluntary Chapter 11 bankruptcy petition with the United States Bankruptcy Court for the District of Hawai'i on July 13, 2001. LEHMAN BROTHERS: Sues Spanish Broadcasting in Delaware Court ------------------------------------------------------------ Spanish Broadcasting System, Inc. on March 4 disclosed that on February 14, 2013, Lehman Brothers Holdings, Inc., purporting to own approximately 39% of the outstanding SBS Series B Preferred Stock, filed a complaint against the Company in the Delaware Court of Chancery alleging a violation of the Preferred Stock Certificate of Designations. More specifically, the Complaint alleges that SBS has failed in its obligations regarding its required preferred stock dividend payments. The Company denies the allegations contained in the Lehman complaint and, to the contrary, asserts that it has been and continues to be in full and complete compliance with all of its obligations under the Certificate of Designations for the Series B Preferred Stock, as fully disclosed in the Company's filings with the Securities and Exchange Commission dating back to 2009. Accordingly, the Company believes that the Complaint's allegations are frivolous and wholly without merit and intends to contest such allegations vigorously. The Company has retained Skadden, Arps, Slate, Meagher and Flom LLP to represent it in connection with the Lehman action. In addition, the Company notes that the day before the filing of the Complaint, the judge presiding over the Lehman bankruptcy proceedings denied Lehman's objection to the Company's Proof of Claim in an unrelated litigation in which the Company is asserting almost $50 million in damages as part of a Proof of Claim filed in 2009 relating to a Lehman affiliate's willful failure, prior to its bankruptcy filing, to fund its commitment under the Company's then extant revolving credit facility. A trial date has not yet been set for this matter. About Spanish Broadcasting Headquartered in Coconut Grove, Florida, Spanish Broadcasting System, Inc. -- http://www.spanishbroadcasting.com/-- owns and operates 21 radio stations targeting the Hispanic audience. The Company also owns and operates Mega TV, a television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico. Its revenue for the twelve months ended Sept. 30, 2010, was approximately $140 million. The Company's balance sheet at Sept. 30, 2012, showed $473.83 million in total assets, $427.51 million in total liabilities, $92.34 million in cumulative exchangeable redeemable preferred stock, and a $46.03 million total stockholders' deficit. 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. LEHMAN BROTHERS: Loses Nearly $10MM on Sale of Arts Park Village ---------------------------------------------------------------- Lehman Brothers Holdings Inc. lost $9.85 million on the sale of Arts Park Village in Hollywood out of foreclosure, the South Florida Business Journal reported. The company seized the 4.1-acre commercial site by foreclosing on WSG Hollywood Developer's $16.6 million mortgage, according to the report. On February 7, Lehman's affiliate FL Young Circle sold the property for $6.75 million to MG3 Hollywood as part of the company's Chapter 11 plan. In 2008, WSG Hollywood obtained city approval for a $114 million 25-storey project. The developer never started construction, according to the report. 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. LEHMAN BROTHERS: LBI Trustee Seeks to Let Go of Dividends --------------------------------------------------------- The trustee for Lehman Brothers Inc. asked the U.S. Bankruptcy Court in Manhattan for permission to distribute funds tied to securities that will be delivered to customers. The funds consist of cash dividends and interest received by the Lehman estate subsequent to September 19, 2008. The Lehman estate received those funds from various issuers and depositories on account of securities in the possession of the trustee. The proposed distribution won't harm customers who did not entrust those securities to the Lehman brokerage, according to the trustee's lawyer, James Kobak, Jr., Esq., at Hughes Hubbard & Reed LLP, in New York. Customer property held by the estate as of September 19, 2008, would continue to be treated as the body of property available to satisfy customer net equity claims, according to the lawyer. Mr. Kobak said the proposed distribution is intertwined with the settlements proposed by the trustee, resolving nearly $44 billion in customer claims by Lehman Brothers Holdings Inc. and the liquidators for Lehman Brothers International (Europe). "Without the certainty provided by the proposed settlements, both as to overall dollar value and as to the treatment of specific securities, significant obstacles would continue to impede a full distribution of property to customers," Mr. Kobak said in court papers. A court hearing is scheduled for April 16. Objections are due by April 3. 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. LEHMAN BROTHERS: AOZORA Claim Allowed for $480 Million ------------------------------------------------------ Lehman Brothers Holdings Inc. asks the Bankruptcy Court to approve a settlement it entered into with Aozora Bank, Ltd., allowing Aozora's Claim No. 13903, originally asserting $480,748,699, as a non-priority, senior, non-subordinated general unsecured claim against LBHI in Class 5 under the Plan in the amount of $469,933,558. Aozora Bank is a former lender to LBHI's Japan subsidiary. 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. LHC LLC: Section 341(a) Meeting Scheduled for March 28 ------------------------------------------------------ A meeting of creditors in the bankruptcy case of LHC, LLC, will be held on March 28, 2013, at 1:30 p.m. at 219 South Dearborn, Office of the U.S. Trustee, 8th Floor, Room 802, Chicago, Illinois 60604. 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. LHC, LLC, filed for Chapter 11 petition (Bank. N.D. Ill. Case No. 13-07001) on Feb. 25, 2013. Peter A. Buh signed the petition as president. The Debtor estimated assets and debts of at least $10 million. Judge Donald R. Cassling presides over the case. The Debtor is represented by Crane Heyman Simon Welch & Clar. LIME ENERGY: Gets Second Nasdaq Listing Non-Compliance Notice ------------------------------------------------------------- Lime Energy Co. on March 4 disclosed that, on March 1, 2013, Lime Energy Co. received a second compliance notice from The NASDAQ Stock Market Market indicating that it has not regained compliance with the minimum bid price requirement of $1.00 as set forth in NASDAQ Marketplace Rule 5550(a)(2). However, the NASDAQ staff has determined that the Company is eligible for an additional 180 day grace period, or until August 26, 2013, to regain compliance with NASDAQ Listing Rule 5550(a)(2). This additional 180 day period relates exclusively to the bid price deficiency. The Company may be delisted during the 180 days for failure to maintain compliance with any other listing requirements for which it is currently on notice or which occurs during this period. NASDAQ's determination to grant the additional 180 day period was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the NASDAQ Capital Market, with the exception of the bid price requirement, and the Company's written notice to NASDAQ of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. The Company can regain compliance with NASDAQ Listing Rule 5550(a)(2) by maintaining a closing bid price of at least $1.00 per share for a minimum of ten consecutive business days; NASDAQ, however, in its discretion, may require that the Company maintain a closing bid price of at least $1.00 per share for a period in excess of ten consecutive business days, but generally no more than 20 consecutive business days, before determining that the Company has demonstrated an ability to maintain long-term compliance. If compliance cannot be demonstrated by August 26, 2013, NASDAQ will provide written notification that the Company's securities will be delisted. At that time, the Company may appeal the delisting determination to a Hearings Panel. The Company previously received a written notification from NASDAQ on August 29, 2012, indicating that the minimum bid price of the Company's common stock had fallen below $1.00 for 30 consecutive trading days and that it was therefore not in compliance with NASDAQ Listing Rule 5550(a)(2). LONE PINE: S&P Cuts CCR to 'B-' & Rates Sr. Unsecured Notes 'CCC' ----------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Calgary, Alta.-based independent exploration and production (E&P) company Lone Pine Resources to 'B-' from 'B'. At the same time, Standard & Poor's lowered its issue-level rating on Lone Pine's senior unsecured notes to 'CCC' from 'CCC+'. The '6' recovery rating on the notes is unchanged. Standard & Poor's also removed the ratings from CreditWatch, where they were placed with negative implications Dec. 7, 2012. The outlook is negative. "The downgrade reflects our expectation that the company's business risk profile would not be able to support a 'B' rating even if it is able to conclude a transformative transaction by asset sales or securing a joint venture partner to continue developing its upstream resources," said Standard & Poor's credit analyst Aniki Saha-Yannopoulos. S&P expects Lone Pine's cash flow will continue to deteriorate through 2013, due to declining production, higher-than-expected operating costs and wider differentials realized on Canadian crude compared with West Texas Intermediate (WTI). Under S&P's price assumptions and with no change in its current capital structure, it believes the company will exit 2013 with debt-to-EBITDAX about 4.5x, and that there is significant risk that it will be unable to comply with its 4x debt-to-EBITDA covenant in 2013. The ratings on Lone Pine reflect Standard & Poor's view of the company's "vulnerable" business risk profile and "highly leveraged" financial risk profile. The ratings also reflect what Standard & Poor's views as Lone Pine's operations in the E&P industry, declining production, weak realized commodity prices, deteriorating credit measures, and less-than-adequate liquidity. Lone Pine is a small E&P company with most of its production from Alberta. The company's capex budget focuses mostly on the liquids play, especially the Evi field. It had a reserve base of 401 billion cubic feet equivalent as of Dec. 31, 2011, and an average production of 82.4 million cubic feet a day for third quarter of 2012. As of Sept. 30, 2012, the company had about C$468 million in adjusted debt, which includes adjustments for operating leases (about C$14 million) and asset-retirement obligations (about C$11 million). The negative outlook reflects Standard & Poor's expectation that Lone Pine's production and cash flow will continue to decline through 2013 and it will be challenged to continue exploiting its resource base. Specifically, S&P's cash flow and spending forecasts for the company include S&P's expectations that the company debt-to-EBITDAX ratios will continue to deteriorate through 2013 and its liquidity will remain less-than-adequate. A further negative rating action could occur if Lone Pine's liquidity remains persistently less-than-adequate and net liquidity decreases and stays below C$50 million. Based on S&P's 2013 forecast, it has estimated this minimum liquidity requirement (C$50 million) to be the funding shortfall for the year, because the company will generate C$70 million-C$90 million in EBITDA but S&P expects fixed charges to be higher at about C$120 million- C$140 million (capex and interest expenses) in 2013. S&P would consider revising the outlook to stable if Lone Pine's liquidity improves to and stays at adequate levels and debt-to- EBITDAX stays below 5.5x. This would be possible if the company completes a transformative asset sale such that it improves both liquidity and capital spending opportunities for the company. MEDIACOM COMMUNICATIONS: S&P Affirms 'B+' CCR; Outlook Positive --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Middletown, N.Y.-based cable systems operator Mediacom Communications Corp., and revised the rating outlook to positive from stable. "The outlook revision reflects a continued improvement in operating metrics in the fourth quarter of 2012, and our expectation that fully adjusted debt to EBITDA could decline to the mid-5x area or below in 2013," said Standard & Poor's credit analyst Michael Altberg. Additionally, S&P has revised its business risk profile assessment to "satisfactory" from "fair," in line with other midsize cable operator peers, based on a continued deceleration in video subscriber losses and healthy growth in data and business services revenue. Although video subscriber losses remain at the high end of cable peers at 6.5% in the fourth quarter, this is a considerable improvement from the double-digit losses experienced in the second half of 2011. High-speed data (HSD) and telephony penetration remain below industry averages. Partly tempering these factors are the growth and stability of the company's revenues and EBITDA, its healthy average revenue per user (ARPU) gains over the past two years, and its good cost management of non-programming expenses, which has contributed to the EBITDA growth. Mediacom is the eighth-largest cable operator based on subscribers, primarily servicing small to midsize markets in the Midwest and Southeast. In S&P's view, Mediacom faces significant competitive pressures on both its video customer base from the satellite TV providers and, to a lesser extent, on its data customers from the local telephone companies. However, the company's generally more rural markets limit video competition from the local telephone operators, at least in the near-to-medium term. Currently, S&P estimates AT&T's u-Verse and Verizon's FiOS product are available to only about 7% and 1.3%, respectively, of Mediacom's homes. Mediacom also has a small triple-play overlap with telephone provider CenturyLink (2.4%), which recently began introducing its own IPTV video service in select markets. "The positive rating outlook reflects the potential for an upgrade over the next 12 months if operating metrics continue to improve and we believe leverage will decline below 5.5x and remain at that level on a sustained basis. We believe this would entail management's commitment to a more conservative financial policy than historically demonstrated. As a result of our revision of Mediacom's business risk profile to satisfactory, we have loosened our leverage threshold for an upgrade to below 5.5x from our previous target of below 5.0x. Assuming low-single-digit percent EBITDA growth and that the company continues to use FOCF to repay debt, we believe it can achieve these credit metrics in 2013. However, sustainability of these credit metrics will depend on longer term financial policy," S&P said. "Conversely, we could lower the rating if Mediacom pursues a more aggressive financial policy such that leverage exceeds 7.0x on a sustained basis. Again, we have loosed our previous 6.5x threshold for a downgrade based on our revised business risk assessment. We believe a downgrade scenario is less likely given the stable performance inherent in the cable-TV business, and that leverage increasing above 7x would most likely be the result of shareholder returns or debt financed acquisitions," S&P added. MERRILL COMMUNICATIONS: Loan Upsize No Impact on Moody's CFR ------------------------------------------------------------ Moody's Investors Service reports that the (P)Ba3 and (P)B1 ratings assigned to Merrill Communications LLC's proposed first- out revolver and senior secured term loan, respectively, as well as the (P)B3 Corporate Family Rating, are not impacted by the proposed change in debt structure. The principal methodology used in rating Merrill Corporation was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Merrill Communications LLC provides document and data management services, litigation support, branded communication programs, fulfillment, imaging, and printing services to the financial, insurance, legal, life sciences and other market segments. The company generated approximately $842 million of revenue for the twelve months ended January 31, 2013. MGM RESORTS: Moody's Says Distribution Policy is Credit Positive ---------------------------------------------------------------- Moody's Investors Service commented that MGM Resorts International's (B2/stable) announcement that it has adopted a distribution policy by its 51% owned subsidiary, MGM China Holdings Limited, is a credit positive. MGM China said it will make semi-annual distributions in an amount up to 35% of its consolidated annual profits subject to its then financial position, business performance, operating climate, and approval by its Board of Directors. The principal methodologies used in rating MGM were Global Gaming rating methodology published in December 2009 and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. MGM Resorts International owns and operates casino and hotel properties throughout the US. The company also has a 50% interest in CityCenter Holdings, LLC, a mixed-use project on the Las Vegas Strip and currently, a 50% interest in MGM Grand Paradise Macau, a hotel-casino resort in Macau S.A.R. MGM generates approximately $9.0 billion of net revenue annually. MISSION NEWENERGY: Posts $4 Million Net Profit in Half-Year 2012 ---------------------------------------------------------------- Mission NewEnergy Limited delivered to the U.S. Securities and Exchange Commission its Half-Year Financial Report for the period ended Dec. 31, 2012. The Company reported net profit of $4.04 million on $8.62 million of total revenue for the six months ended Dec. 31, 2012, as compared with net profit of $3.76 million on $20.32 million of total revenue for the same period during the prior year. Included in the $8.6 million revenue for the six months ended Dec. 31, 2012, is the recognition of a gain of $7.7 million from re- structuring of the Company's Series 2 convertible note. The Company's consolidated balance sheet at Dec. 31, 2012, showed $7.05 million in total assets, $27.29 million in total liabilities and a $20.24 million net deficit. A copy of the half-year report is available for free at: http://is.gd/DD0aWn About Mission NewEnergy Based in Subiaco, Western Australia, Mission NewEnergy Limited is a producer of biodiesel that integrates sustainable biodiesel feedstock cultivation, biodiesel production and wholesale biodiesel distribution focused on the government mandated markets of the United States and Europe. The Company is not operating its biodiesel refining segment. The refineries are being held in care and maintenance either awaiting a return to positive operating conditions or the sale of assets. The Company has materially diminished its Jatropha contract farming operation and the company is now focused on divesting the remaining Indian assets. The Company intends to cease all Indian operations. Grant Thornton Audit Pty Ltd, in Perth, Australia, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company incurred operating cash outflows of A$4.9 million during the year ended June 30, 2012, and, as of that date, the consolidated entity's total liabilities exceeded its total assets by A$24.4 million. The Company reported a net loss of A$6.1 million on A$38.3 million of revenue in fiscal 2012, compared with a net loss of $21.7 million on A$16.4 million of revenue in fiscal 2011. MISTY MORNING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Misty Morning Dairy, LLC 3743 Wood Road Fennimore, WI 53809-9693 Bankruptcy Case No.: 13-10856 Chapter 11 Petition Date: February 27, 2013 Court: United States Bankruptcy Court Western District of Wisconsin Judge: Robert D. Martin Debtor's Counsel: Claire Ann Resop, Esq. STEINHILBER, SWANSON & RESOP 122 W. Washington Ave., Suite 850 Madison, WI 53703-2718 Tel: (608) 630-8990 E-mail: cresop@swansonresop.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/wiwb13-10856.pdf The petition was signed by Randall D. Mouw, member. MMM HOLDINGS: Moody's Affirms B2 Rating on Senior Secured Debt -------------------------------------------------------------- Moody's Investors Service affirmed the B2 senior secured debt rating of MMM Holdings, Inc.'s $505 million ($475 million term loan and $30 million revolver) senior secured credit facility. The affirmation reflects changes made to the credit facility from the original rating assignment on October 10, 2012, including a $25 million increase in the amount of the term loan and the addition of MSO of Puerto Rico, Inc. (MSO, unrated), an unregulated subsidiary of MMM, as a co-borrower. The Ba2 insurance financial strength rating of MMM's regulated insurance subsidiary, MMM Healthcare, Inc. was also affirmed. The outlook on the ratings remains stable. Ratings Rationale: Moody's stated that the credit facility, which was issued on December 12, 2012, includes a $275 million term loan at MMM and a $200 million term loan at MSO, both of which are cross guaranteed and cross collateralized. In addition, the credit facility is guaranteed by the parent company InnovaCare, Inc. (unrated). The ratings, as well as the terms and financial covenants of the credit facility, reflect the consolidated financial results and credit profile of MMM, which effectively receives the cash flows that are used to service the loan. According to the rating agency, the proceeds of the loan were used to fund a shareholder dividend as well as prepay the amounts outstanding under MMM's prior credit facility. The new debt level will result in pro-forma 2012 financial leverage metrics for MMM of approximately 65% (Debt/Capital) and 2.2x (Debt/EBITDA), while the EBITDA/Interest ratio is expected to be approximately 5x. Moody's noted that the company has generated consistent earnings and cash flow over the last several years, which has benefited from MMM's improved medical management initiative, led by its development of exclusive independent practice association relationships. The rating agency added that in addition to MMM's leveraged capital structure, the ratings reflect the large amount of goodwill on the balance sheet; 100% concentration in Puerto Rico; and the company's dependence on Medicare Advantage products. Moody's Senior Vice President, Steve Zaharuk, stated that, "The major concern with MA business is the change in government reimbursement levels under the healthcare reform act. It is not clear how current MA members will respond to the resulting benefit and premium changes that will likely result from the reduced reimbursement levels over the next several years." However, the rating agency noted that despite recent reductions in the level of reimbursements to managed care companies, membership growth has remained solid, especially for MMM in Puerto Rico, where the company's income margins provide the flexibility to offer a competitive benefit plan without raising premiums. Moody's said that if MMM continues to 1) produce EBITDA margins above 10%, 2) reduces Debt/EBITDA below 1.5x, 3) demonstrates consistent annual Medicare Advantage net membership growth of at least 3%, and 4) improves its NAIC risk-based capital (RBC) ratio on a sustained basis of at least 100% of company action level (CAL), then the ratings could be upgraded. However, 1) if annual EBITDA margins fall below 5%, 2) if membership declines in any year by 25% or more, 3) if the RBC ratio declines below 50% of CAL, 4) if financial leverage continues to increase to fund stockholder dividends, or 5) if there is a breach in any of the financial covenants in its credit agreement, then the ratings could be downgraded. The following ratings were affirmed with a stable outlook: MMM Holdings, Inc. -- senior secured debt rating at B2, long term corporate family rating at B2; MMM Healthcare, Inc. -- insurance financial strength rating at Ba2. The principal methodology used in these ratings was Moody's Rating Methodology for U.S. Health Insurance Companies published in May 2011. Moody's insurance financial strength ratings are opinions of the ability of insurance companies to pay punctually senior policyholder claims and obligations. InnovaCare, Inc., the parent company of MMM Holdings, is a privately-owned company incorporated in Puerto Rico. MSO of Puerto Rico, Inc. is an independent unregulated subsidiary of MMM Holdings that provides management support and services to the provider networks of MMM Holding's regulated insurance subsidiaries (MMM Healthcare and Preferred Medicare Choice, Inc.). As of September 30, 2012, MMM Holdings reported stockholders' equity of approximately $402 million. MMM's total revenues for the first nine months of 2012 were $1.7 billion with 217,200 Medicare members in Puerto Rico. MRJP LLC: Case Summary & 13 Largest Unsecured Creditors ------------------------------------------------------- Debtor: MRJP, LLC 7942 Hallie Dr. Ypsilanti, MI 48198 Bankruptcy Case No.: 13-43573 Chapter 11 Petition Date: February 27, 2013 Court: United States Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Phillip J. Shefferly Debtor's Counsel: David G. Dragich, Esq. HARRINGTON DRAGICH PLLC 21043 Mack Avenue Grosse Pointe Woods, MI 48236 Tel: (313) 886-4550 E-mail: ddragich@harringtondragich.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 13 largest unsecured creditors is available for free at http://bankrupt.com/misc/mieb13-43573.pdf The petition was signed by John Cueter, member. MSR RESORT: Judge Won't Stay Plan Confirmation ---------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that a New York bankruptcy judge refused Thursday to grant alternative investment fund Five Mile Capital LP's bid for a limited stay of MSR Resort Golf Course LLC's Chapter 11 plan confirmation and $1.5 billion sale to a Singaporean wealth fund. The report related that U.S. Bankruptcy Judge Sean H. Lane said Five Mile, which aggressively challenged the resort owner's plan confirmation, failed to establish a factual or legal basis for the stay. Judge Lane approved the reorganization plan and asset sale to Government of Singapore Investment Corp. (Realty) Private Ltd., the report noted. About MSR Resort MSR Hotels & Resorts, formerly known as CNL Hotels & Resorts Inc., owned a portfolio of eight luxury hotels with over 5,500 guest rooms, including the Arizona Biltmore Resort & Spa in Phoenix, the Ritz-Carlton in Orlando, Fla., and Hawaii's Grand Wailea Resort Hotel & Spa in Maui. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. MSR Resort Golf Course LLC and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the filings are Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, serve as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., is the Debtors' financial advisor. Kurtzman Carson Consultants LLC is the Debtors' claims agent. The five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010, according to court filings. In its schedules, debtor MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. The Official Committee of Unsecured Creditors is represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. MTS LAND: Withdraws Motion to Incur Postpetition Financing ------------------------------------------------------------ MTS Land, LLC, and MTS Golf, LLC, notify the U.S. Bankruptcy Court for the District of Arizona that they have withdrawn their motion for authorization to obtain postpetition financing from Jaime Sohacheski, and allow the tax DIP lenders' claim as a secured priming lien replacing the property tax liens. U.S. Bank National Association, a secured creditor, objected to the proposed final order, stating that there was no evidence presented at the Aug. 22, 2012, or Oct. 29, 2012, hearings on the motion that the DIP Loan was the result of arm's-length negotiations. To the contrary, all of the evidence on the issue indicated that Jaime Sohacheski was the decision maker on both sides of the transaction (for the Debtors and the DIP Lender). The Debtors, in their motion, stated that the DIP Lender agreed to establish an unsecured credit facility in favor of the Debtors pursuant to the DIP Agreement and the Note by which Debtors may obtain loans from time to time in an aggregate amount up to $1,080,000. The Debtors would use the loan to fund their business operations. About MTS Land MTS Land, LLC, and MTS Golf, LLC, own and operate the now dormant Mountain Shadows Golf Club. They filed separate Chapter 11 petitions (Bankr. D. Ariz. Case Nos. 12-16257 and 12-16257) in Phoenix on July 19, 2012. Mountain Shadows Golf Club -- http://www.mountainshadowsgolfclub.com/-- is an 18 hole, par 56 course located at Paradise Valley. Nestled in the foothills of Camelback Mountain, the 3,081-yard Executive course claims to be one of the most scenic golf courses in Arizona. MTS Land and MTS Golf are affiliates of Irvine, Calif.-based Crown Realty & Development Inc. MTS Land and MTS Golf each estimated assets and debts of $10 million to $50 million. Judge Charles G. Case II oversees the Debtors' cases. Lawyers at Gordon Silver serve as the Debtors' counsel. The petition was signed by Robert A. Flaxman, administrative agent. Lender U.S. Bank is represented by Steven D. Jerome, Esq., and Evans O'Brien, Esq., at Snell & Wilmer L.L.P. The U.S. Trustee for Region 14 advised the Court that an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against the Debtors have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint a committee if interest develop among the creditors. According to the disclosure statement in support of their First Amended Chapter 11 Plan of Reorganization that was filed mid- January, debtors MTS Land, LLC, and MTS Golf, LLC, have a 100% payment plan notwithstanding that the plan impairs certain classes of creditors. NEW YORK SKYLINE: ESB Obtains Judgment Dismissing Skyline Claim --------------------------------------------------------------- In the Chapter 11 case of New York Skyline, Inc., two adversary proceedings concern numerous disputes between the parties arising under certain lease and license agreements, as modified and amended: -- EMPIRE STATE BUILDING COMPANY L.L.C. and EMPIRE STATE BUILDING, INC., Plaintiffs, v. NEW YORK SKYLINE, INC., Defendant. -- NEW YORK SKYLINE, INC., Plaintiff, v. EMPIRE STATE BUILDING COMPANY L.L.C., EMPIRE STATE BUILDING, INC. and EMPIRE STATE BUILDING ASSOCIATES L.L.C. Defendants. The instant dispute relates to the claim by New York Skyline, Inc., asserted in the Twelfth Claim for Relief in its Third Amended Complaint, dated July 29, 2009, that its landlord, the Empire State Building Company, overcharged it for electricity in breach of the lease. The lease included several technical terms and concepts relating to the computation of electrical charges, and required extrinsic evidence to explain their meaning. The U.S. Bankruptcy Court for the Southern District of New York ordered a separate trial, and at the conclusion of Skyline's direct case, ESB moved for judgment on partial findings pursuant to Rule 52(c) of the Federal Rules of Civil Procedure, made applicable to these adversary proceedings by Rule 7052 of the Federal Rules of Bankruptcy Procedure. The Court reserved decision. According to Judge Stuart M. Bernstein, the evidence showed that ESB complied with the lease requirements for computing what Skyline had to pay, and except for two instances that ESB corrected, Skyline did not challenge this conclusion. Instead, Skyline's opposition came down to the argument that the lease methodology did not accurately estimate electricity consumption, overcharged Skyline, and ignored other (and fairer) ways to compute consumption. "Be that as it may, this is a contract case, and Skyline is bound by the agreement it made with ESB. Accordingly, ESB's motion for judgment on partial findings dismissing the [Twelfth Claim for Relief in the Third Amended Complaint] is granted," Judge Bernstein ruled. The Court has considered Skyline's remaining arguments, and to the extent not specifically addressed, concluded that they lack merit. The parties are directed to contact chambers and arrange a pre- trial conference for the purpose of scheduling the trial on the remaining issues. David S. Tannenbaum, Esq. -- dtannenbaum@sterntannenbaum.com -- Francine N. Nisim, Esq. -- fnisim@sterntannenbaum.com -- Brian J. Damiano, Esq. -- bdamiano@sterntannenbaum.com -- of STERN TANNENBAUM & BELL LLP, in New York, represent Empire State Building Company L.L.C., Empire State Building, Inc., and Empire State Building Associates L.L.C. Charles A. Stewart, III, Esq. -- cstewart@somlaw.com -- and Elin M. Frey, Esq., of STEWART OCCHIPINTI, LLP, in New York, represent New York Skyline, Inc. A copy of the Bankruptcy Court's February 22, 2013 Memorandum Decision is available at http://is.gd/s2wzolfrom Leagle.com. Manhattan-based New York Skyline, Inc. -- http://www.skyride.com/ -- operates the NYSKYRIDE attraction at the Empire State building. The Company sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-10181) on Jan. 12, 2009. Mark A. Frankel, Esq., at Backenroth Frankel & Krinsky, LLP, assists the company in its restructuring efforts. The Company estimated its assets and debts between $10 million and $50 million at the time of the filing. NORANDA ALUMINUM: Moody's Cuts Rating on Senior Term Loan to 'B1' ----------------------------------------------------------------- Moody's Investors Service downgraded the senior secured term loan rating of Noranda Aluminum Acquisition Corporation to B1 from Ba3. At the same time, Moody's affirmed all other ratings of Noranda, including the company's B2 Corporate Family Rating, B2-PD Probability of Default Rating and Caa1 rating on the company's senior unsecured notes. The SGL-3 Speculative Grade Liquidity Rating remains unchanged. The outlook is negative. The downgrade in the senior secured term loan rating to B1 reflects the $110 million add on to the term loan (increasing the term loan to approximately $430 million) versus the originally intended $60 million increase and the commensurate reduction in proceeds from the company's unsecured note issue. Consequently, under Moody's Loss Given Default Methodology, the shift in the level of secured versus unsecured debt in the capital structure results in less underlying loss absorption to the secured debt. Proceeds from the term loan and the note issue will be used to tender for and repay outstanding balances under the $275 million in floating rate global notes due May 2015. Downgrades: Issuer: Noranda Aluminum Acquisition Corporation Senior Secured Bank Credit Facility Feb 18, 2019, Downgraded to B1, LGD3, 34% from Ba3, LGD3, 32% Affirmations: Issuer: Noranda Aluminum Acquisition Corporation Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Unsecured Regular Bond/Debenture, Affirmed Caa1, LGD5, 81% (from LGD5, 83%) Senior Unsecured Regular Bond/Debenture May 15, 2015, Affirmed Caa1, LGD5, 81% Ratings Rationale: Noranda's B2 Corporate Family Rating reflects the company's strong relationships with its customer base and good position within markets served. Additionally, continued focus on cost control and cost reduction under its "Cost-Out, Reliability and Effectiveness"(CORE) program, as well as the benefits to its overall cost position from its alumina refinery and bauxite operations are expected to continue to provide some mitigation to the volatility of aluminum prices and input costs. These latter benefits are derived from the earnings generated by third party sales of both excess bauxite and aluminum, which the company views as a reduction to overall production costs in its primary aluminum operations. At the same time, the rating reflects Noranda's relatively small size, its earnings leverage to performance of the primary metal business, fundamental challenges in the aluminum markets, and the reliance of this business on a single smelter and refinery - which leaves the company exposed to any future disruptions at the New Madrid, Missouri smelter and Gramercy, Louisiana refinery. While the downstream operations add a level of relative stability, their EBITDA contribution is still likely to remain small relative to the more commodity-like primary aluminum and alumina segments, absent a significant increase in production capacity. The upstream primary operations will remain the dominant earnings driver and will continue to reflect the cyclicality of the aluminum price and demand levels. The rating also reflects the company's exposure to volatility in the cost of key inputs such as energy and caustic soda. Moody's believes that meaningful improvement in the company's credit metrics will likely be impeded by continued weakness in the global aluminum markets within the foreseeable time horizon as a result of lingering global economic uncertainty and sluggish demand. Moreover, while aluminum prices remain weak, the company continues to be exposed to volatility in the costs of key inputs such as energy and caustic soda. Consequently, Moody's expects debt protection metrics such as debt-to-EBITDA to trend at or slightly above 5.5 times while EBIT-to-interest to average around 1.0 times within the next 12 to 18 months. The SGL-3 speculative grade liquidity rating reflects Moody's expectations for reduced EBITDA and cash flow, leading to higher borrowings under the company's revolver (ABL) in the next 12 months. Furthermore, it is unlikely that the company will scale back capital expenditures in the near term as the company must invest in improving the reliability of its operations given its reliance on both a single-location smelter and refinery. As a result, Moody's believes that Noranda will generate negative free cash flow (cash from operations less capital expenditures and dividends) during the forecast period. The negative outlook incorporates Moody's expectation that earnings and cash flow generation will remain weak in 2013 absent a catalyst that could lead to a broad based recovery in aluminum prices over the next 12 to 18 months. Consequently, leverage is expected to remain high over the same period. The negative outlook also reflects Moody's view that the company may experience further deterioration in its credit and liquidity profiles. The Caa1 rating on the senior unsecured notes reflects the effective subordination of these instruments to a substantial amount of first lien secured debt and priority accounts payable, and the expectation of a considerable loss in value in a default scenario. Noranda's rating could be downgraded if LME aluminum prices were to further decline from currently weak levels and production costs were to escalate, or the company's operations encountered disruptions leading to deterioration in operating performance and credit metrics. Furthermore, the rating could be downgraded should the company engage in aggressive financial policies that result in a material impact on its leverage profile. Specifically, the rating could be lowered if credit metrics were to deteriorate and unlikely to improve such that adjusted debt-to-EBITDA were sustained above 5.5 times, EBIT-to-interest below 1.0 times, or if cash flow remained negative over a longer than expected time horizon. At this point, a positive outlook or upgrade is unlikely, given Moody's expectations for reduced profitability, weaker credit metrics, the company's relatively small size, reliance on one smelter and refinery, exposure to the cyclicality of aluminum price and demand swings. In addition, uncertainty over financial policies is a further limiting factor. The principal methodology used in this rating was Global Mining Industry published in May 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 Franklin, Tennessee, Noranda Aluminum Acquisition Corporation directly owns Noranda Aluminum, Inc. and indirectly controls Noranda Aluminum Inc.'s subsidiaries (Moody's collectively refers to the group of companies as "Noranda"). The group's ultimate parent and holding company is Noranda Aluminum Holding Corporation. Noranda is involved in primary aluminum production at its New Madrid, Missouri smelter and in downstream operations through four rolling mills. During the fiscal year ending December 31, 2012, Noranda shipped approximately 497 million pounds of primary aluminum to external customers and 379 million pounds of fabricated products, generating revenues of $1.4 billion. OHIO VALLEY: Moody's Lowers Bond Rating One Notch to 'Ba3' ---------------------------------------------------------- Moody's Investors Service has downgraded Ohio Valley General Hospital's bond rating to Ba3 from Ba2, affecting $25.7 million of outstanding bonds issued by the Allegheny County Hospital Development Authority, PA. The outlook remains negative. Ratings Rationale: The downgrade to Ba3 from Ba2 reflects Ohio Valley's continued operating losses and volume declines during FY 2012, higher operating losses through six months of FY 2013, growth in pension liability, increasing risk to Medicare cuts given the hospital's high Medicare level, and expected increase in capital spending. The rating also reflects the hospital's small size in a competitive market, dependence on a limited number of physicians for admissions, high debt load and risks related to the hospital's asset allocation. The hospital's strengths include a strong liquidity position, somewhat improved (thought still weak) operating performance and conservative debt structure. The negative outlook reflects the risks of continued volume and market share declines, and operating losses that are likely to continue in FY 2013. Challenges - Continued admissions decline in FY 2012 and six months FY 2013; admissions fell 2.8% in FY 2012 and 3.1% through six months FY 2013 compared to the same period a year prior. - Competitive market place for the primary service area; according to management, market share declined to 20% in 2012 from 21% in FY 2011. - Small size hospital with less than $70 million operating revenue and fewer than 4,000 admissions, contributing to a high dependency on a relatively few physicians. - Debt load is relatively high compared to hospital size and operating cash flow; low MADS coverage at 1.69 times in FY 2012. Debt to revenue is high at 55% (Ba median is 32%) and debt-to-cash flow is unfavorably high at 8.44 times (Ba median is 6.5 times). - Investment allocation to equities is high (68.7%), which is a risk given dependency on investment returns to support capital spending; system had a negative $10 million swing in FY 2012 with an investment loss of $1.0 million compared to a gain of $9.2 million in FY 2011. - Unfunded pension liability grew to $17.6 million in FY 2012 from $6.5 million in FY 2011, with funded ratio falling to 65% in FY 2012 compared to 83% in FY 2011. - Medicare as a percentage of gross revenues grew to a high 58% in FY 2012 from 55% in FY 2011 (Ba median is 45%); system remains vulnerable to potential payment reductions at the federal level. Strengths - Strong liquidity position with 275 days of cash on hand at December 31, 2012, providing a good cushion of 134% cash-to- debt. - Slightly improved operating performance, with operating cash flow margin at 4.8% in FY 2012, up from 3.0% in FY 2011; however, operating decline is evident in 6-month FY 2013 interims. - Limited debt structure risks, with mostly fixed rate debt. Outlook The negative outlook reflects the challenges of continuing to reduce large operating losses, which is necessary to meet planned increased capital spending levels, cover debt service, reduce reliance on investment returns and minimize vulnerability to potential Medicare cuts What Could Make The Rating Go Up With a negative outlook, a rating upgrade is not likely in the short-term period; over the longer-term, an upgrade would be considered as a result of significant and sustained operating improvement and at least volume stability. What Could Make The Rating Go Down Continuation of operating losses at current levels with no further improvement, volume declines; decline in cash levels; an increase in either direct debt or indirect debt The principal methodology used in this rating was Not-For-Profit Healthcare Rating Methodology published in March 2012. ORMET CORP: Secures Interim Approval of Wayzata DIP Loans --------------------------------------------------------- Ormet Corp. received court approval for financing from proposed stalking horse bidder and current lender Wayzata Investment Partners LLC. A hearing to consider approval of the DIP financing is slated for March 20 at 9:30 a.m. Objections are due March 13, 2013, at 4:00 p.m. The Debtors would be able to access $15 million of the $30 million term-loan being provided by Wayzata pending final approval. The term loan would bear interest at 10%. The Debtors also obtained approval of a $60 million revolving credit that in substance replaces an existing facility. Wells Fargo Capital Finance LLC is the administrative agent under the revolving facility. The DIP Facilities would mature within 9 months after the Petition Date. Wayzata is under contract to buy the business in exchange for the bankruptcy loans and $130 million of an existing term loan, unless outbid at an auction for the assets. Wayzata will also cover some expenses of the Chapter 11 case. The loan from Wayzata is subject to these sale milestones: (1) By no later than the date that is the later of (a) 30 days after the Petition Date or (b) 15 days following the formation of an unsecured creditors committee, an order will be entered by the Bankruptcy Court approving the bidding procedures. (2) By no later than 45 days after the date of entry of the bid procedures order, the Debtors will have commenced the auction. (3) By no later than 90 days after the Petition Date, an order will be entered by the Bankruptcy Court approving the transaction. About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Attorneys at Dinsmore & Shohl LLP and Morris, Nichols, Arsht & Tunnell LLP serve as counsel to the Debtors. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung -- lloyd.sprung@evercore.com -- and Paul Billyard -- billyard@evercore.com -- serve as investment bankers to the Debtor. Wayzata is represented by: Scott L. Alberino, Esq. Joanna Newdeck, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP 1333 New Hampshire Ave., N.W. Washington, D.C. 20036-1564 E-mail: salberino@akingump.com jnewdeck@akingump.com Wells Fargo is represented by: Daniel Fiorillo, Esq. OTTERBOURG, STEINDLER, HOUSTON & ROSEN, P.C. 230 Park Avenue New York, NY 10169 E-mail: dfiorillo@oshr.com ORMET CORP: Proposes Wayzata-Led Auction on May 13 -------------------------------------------------- Bankruptcy Judge Mary F. Walrath in Delaware will convene a hearing May 20, 2013 at 9:30 a.m. to consider Ormet Corp.'s request to commence a sale process for substantially all assets where Wayzata Investment Partners LLC would open the auction. The Debtors have signed a deal to sell the business to Wayzata in exchange for a credit bid consisting of $30 million from the DIP financing Wayzata is providing the bankruptcy estate, and $130 million from a prepetition term loan. The Debtors propose a two-phase auction process whereby bids are solicited from other potential buyers and, assuming the Debtors receive at least one qualified bid in addition to Wayzata's, an auction occurs. Under the proposed bidding procedures: -- Prospective bidders must submit an executed confidentiality agreement no later than May 3, 2013; -- Bidders will have opportunity to conduct reasonable due diligence until May 8, 2013; -- Initial bids are due May 8, 2013 at 5:00 p.m.; -- Initial bids must have an initial overbid of $1 million in cash; -- If at least one qualified bid is received, an auction will be conducted at 10:00 a.m. (prevailing Eastern time) on May 13, 2013 at the offices of Dinsmore & Shohl LLP, 255 E. 5th St., Suite 1900, Cincinnati, OH 45202; -- If an auction is conducted, the qualified bidder with the next highest or otherwise best bid may be designated as the potential backup bidder, which will be required to keep its initial bid open and irrevocable until the earlier of 5:00 p.m. (prevailing Eastern Time) on the date that is 30 days after the date of entry of the sale order; and -- The Court will convene a hearing to consider approval of the prevailing bid at a hearing to take place not later than May 15, 2013. The Debtors will consult with the agent under the Debtors' postpetition superpriority senior secured revolving credit facility, Wayzata, any official committee of unsecured creditors appointed in the Debtors' cases, and the representative of the United Steel, Paper, and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers' International Union; provided that the Debtors will not be required to consult with any party that submits a bid that remains open if the Debtors determined that the participation would have a chilling effect on potential bidding. To recognize Wayzata's expenditure of time, energy and resources, it will receive an expense reimbursement of up to $1 million in the event it is outbid at the auction. Objections to the proposed bidding procedures are due March 13, 2013 at 4:00 p.m. About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Attorneys at Dinsmore & Shohl LLP and Morris, Nichols, Arsht & Tunnell LLP serve as counsel to the Debtors. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung -- lloyd.sprung@evercore.com -- and Paul Billyard -- billyard@evercore.com -- serve as investment bankers to the Debtor. ORMET CORP: Wins Approval for Kurtzman Carson as Claims Agent ------------------------------------------------------------- Ormet Corp. sought and obtained approval of its application to employ Kurtzman Carson Consultants LLC as an official claims and noticing agent of the Court effective as of the Petition Date. On account of its consulting services, KCC personnel will charge based on a 20% discounted rate: Position Hourly Rate -------- ----------- Clerical $32 to $48 Project Specialist $64 to $112 Technology/Programming Consultant $80 to $160 Consultant $100 to $160 Senior Consultant $180 to $220 Senior Managing Consultant $236 Weekend, holidays and overtime Waived Travel expenses and working meals Waived For its noticing services, KKC will charge $50 per 1,000 e-mails, and $0.10 per page for electronic noticing. For its claims administration services, KCC will charge $0.10 per creditor per month but is waiving the fee for its public website hosting services. Prior to the Petition Date, the Debtors paid KCC a $20,000 retainer. KCC has represented that it neither holds nor represents any interest materially adverse to the Debtors' estates in connection with any matter on which it would be employed and that it is a "disinterested person," as referenced in Sec. 327(a) of the Bankruptcy Code and as defined in Sec. 101(14). About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Attorneys at Dinsmore & Shohl LLP and Morris, Nichols, Arsht & Tunnell LLP serve as counsel to the Debtors. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung -- lloyd.sprung@evercore.com -- and Paul Billyard -- billyard@evercore.com -- serve as investment bankers to the Debtor. ORMET CORP: Section 341(a) Meeting Scheduled for April 11 --------------------------------------------------------- A meeting of creditors in the bankruptcy case of Ormet Corporation will be held on April 11, 2013, at 1:30 p.m. at the J. Caleb Boggs Federal Building, 2nd Floor, Room 2112, in Wilmington, Delaware. 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 Ormet Corporation Ormet Corporation filed for Chapter 11 petition (Bank. D. Del. Case No. 13-10334) on Feb. 25, 2013. Ormet is headquartered at its smelting operations located along the Ohio River, in Hannibal, Ohio. Ormet Corporation is a holding Company with its wholly owned subsidiary, Ormet Primary Aluminum Corporation (OPAC), as the Debtors' operating entity, which includes the smelter operation in Hannibal, Ohio and a refinery operation in Burnside, Louisiana. James Burns Riley signed the petition as chief financial officer, treasurer and secretary. On the petition date, the Debtor disclosed assets of $406,819,000 and liabilities of $416,009,000. The Debtor's general bankruptcy counsel is Dinsmore & Shohl LLP. Kurtzman Carson Consultants, LLC, serves as the Debtor's claims and noticing agent. The Company and its debtor-affiliates previously filed for chapter 11 protection on January 30, 2004 (Bankr. S.D. Ohio Case No. 04- 51255). The Company's chapter 11 plan was confirmed by the Court in April 2005. Under the confirmed Plan, Ormet was authorized to break labor contracts, which resulted in conflicts with the United Steelworkers of America. Following emergence from bankruptcy, the Company made a series of strategic decisions, resulting from market conditions, to focus on the production of primary aluminum. In the fourth quarter of 2006, the Company idled the alumina refinery plant in Burnside and in the fourth quarter of 2007, the Company curtailed operations at the billet casting plant at the Hannibal Facility. Also in 2007, the Company ceased operation at its Burnside Terminal, classifying the terminal as "held for sale" on the Company's balance sheet. In May 2007, Matlin Patterson completed the sale of all of its interest in the Company. OVERSEAS SHIPHOLDING: Severance & Incentive Plan Approvals Sought ----------------------------------------------------------------- BankruptcyData reported that Overseas Shipholding Group filed with the U.S. Bankruptcy Court a motion to implement a severance plan. According to the report, under the plan, participants whose employment is terminated without cause will be entitled to two weeks of pay for every year of continuous service, with a minimum of eight weeks of salary up to a maximum of 52 weeks of salary. The report related that, according to the Debtors, the value of all benefits in the severance vested through 2012, assuming hypothetically that all eligible employees were terminated, is approximately $13.4 million. The Debtors also filed a motion to implement a non-executive incentive plan with an estimated plan cost of $9.8 million, the BData report further related. The Court scheduled a March 21, 2013 hearing on the motions. About Overseas Shipholding Overseas Shipholding Group, Inc., headquartered in New York, is one of the largest publicly traded tanker companies in the world, engaged primarily in the ocean transportation of crude oil and petroleum products. OSG owns or operates 111 vessels that transport oil and petroleum products throughout the world. Overseas Shipholding Group and 180 affiliates filed voluntary Chapter 11 petitions (Bankr. D. Del. Lead Case No. 12-20000) on Nov. 14, 2012, disclosing $4.15 billion in assets and $2.67 billion in liabilities. Greylock Partners LLC Chief Executive John Ray serves as chief reorganization officer. Cleary Gottlieb Steen & Hamilton LLP serves as OSG's Chapter 11 counsel, while Chilmark Partners LLC serves as financial adviser. Kurtzman Carson Consultants LLC is the claims and notice agent. The Export-Import Bank of China, owed $312 million used for the construction of five tankers, is represented by Louis R. Strubeck, Jr., Esq., and Kristian W. Gluck, Esq., at Fulbright & Jaworski LLP in Dallas; David L. Barrack, Esq., and Beret Flom, Esq., at Fulbright & Jaworski in New York; and John Knight, Esq., and Christopher Samis, Esq., at Richards Layton & Finger PA. Chilmark Partners, LLC serves as financial and restructuring advisor. Akin Gump Strauss Hauer & Feld LLP, and Pepper Hamilton LLP, serve as co-counsel to the official committee of unsecured creditors. FTI Consulting, Inc., is the financial advisor and Houlihan Lokey Capital, Inc., is the investment banker. OXFORD BUILDING: REIT Services Provider in Chapter 11 ----------------------------------------------------- Oxford Building Services, Inc., Oxford Property Services, Inc., and Origin PR LLC sought Chapter 11 protection (Bankr. D.N.J. Lead Case No. 13-13821) on Feb. 26, 2013, in Newark, New Jersey. Oxford is a national organization providing a full spectrum of facility maintenance, housekeeping, janitorial and security services for office building real estate investment trusts ("REITs"), retail and entertainment REITs, national retailers and chain stores. Oxford also optimizes the facility maintenance process for companies with multi-unit facility management needs through the use of software, vendor management tools, statistical modeling and analysis, paperless invoicing and a transaction/call center. Oxford Building, the lead debtor, is the sole member of Origin and owns 100% of the outstanding stock of OPS. Warren A. Usatine, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as counsel to the Debtors. Oxford Property estimated assets and debts of $10 million to $50 million. Oxford Building estimated at least $1 million in assets and liabilities. The Debtors are asking the Court to extend by 30 days until April 11, 2013, their deadline to file schedules of assets and liabilities, and statements of financial affairs. The Debtors also filed a motion to direct ADP and TD Bank, N.A., to honor certain prepetition gross-salaries and payroll taxes of their employees. The Debtors are seeking joint administration of their Chapter 11 cases. The Debtors' exclusive period to propose a Chapter 11 plan expires June 26, 2013. OXFORD BUILDING: Section 341(a) Meeting Scheduled for April 10 -------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Oxford Property Services, Inc., will be held on April 10, 2013, at 9:00 a.m. at Suite 1401, One Newark Center. Creditors have until July 9 to submit their proofs of claim. 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 Oxford Building Services Oxford Building Services, Inc., Oxford Property Services, Inc., and Origin PR LLC sought Chapter 11 protection (Bankr. D.N.J. Lead Case No. 13-13821) on Feb. 26, 2013, in Newark, New Jersey. Oxford is a national organization providing a full spectrum of facility maintenance, housekeeping, janitorial and security services for office building real estate investment trusts ("REITs"), retail and entertainment REITs, national retailers and chain stores. Warren A. Usatine, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as counsel to the Debtors. Oxford Property estimated assets and debts of $10 million to $50 million. Oxford Building estimated at least $1 million in assets and liabilities. OXFORD BUILDING: Meeting to Form Creditors' Panel on March 13 ------------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on March 13, 2013, at 10:00 a.m. in the bankruptcy cases of Oxford Property Services, Inc., Oxford Building Services, Inc., and Origin PR LLC. The meeting will be held at: United States Trustee's Office One Newark Center 1085 Raymond Blvd. 14th Floor, Room 1401 Newark, NJ 07102 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' cases. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Oxford Building Services Oxford Building Services, Inc., Oxford Property Services, Inc., and Origin PR LLC sought Chapter 11 protection (Bankr. D.N.J. Lead Case No. 13-13821) on Feb. 26, 2013, in Newark, New Jersey. Oxford is a national organization providing a full spectrum of facility maintenance, housekeeping, janitorial and security services for office building real estate investment trusts ("REITs"), retail and entertainment REITs, national retailers and chain stores. Warren A. Usatine, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., serve as counsel to the Debtors. Oxford Property estimated assets and debts of $10 million to $50 million. Oxford Building estimated at least $1 million in assets and liabilities. PAULS VALLEY HOSPITAL AUTHORITY: Chapter 9 Case Summary ------------------------------------------------------- Debtor: Pauls Valley Hospital Authority dba Pauls Valley General Hospital 100 Valley Drive Pauls Valley, OK 73075 Bankruptcy Case No.: 13-10791 Chapter 9 Petition Date: March 1, 2013 Court: U.S. Bankruptcy Court Western District of Oklahoma (Oklahoma City) Debtor's Counsel: Chad J. Kutmas, Esq. MCDONALD, MCCANN & METCALF, LLP 15 E. Fifth Street, Suite 1800 Tulsa, OK 74103 Tel: (918) 430-3700 Fax: (918) 430-3770 E-mail: ckutmas@mmmsk.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The petition was signed by Tim Gamble, chairman. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ McKesson Trade Debt $571,612 McKesson Technologies Inc. P.O. Box 98347 Chicago, IL 60693-8347 United States Treasury Taxes $423,540 Internal Revenue Service P.O. Box 105083 Atlanta, GA 30348-5083 P V General Hosp Foundation Trade Debt $365,290 100 Valley Drive Pauls Valley, OK 73075 Chris Whybrew Trade Debt $260,000 1215 W. Edgewater Place Broken Arrow, OK 74012 Cimarron Ins Exchange, RRG Trade Debt $197,025 OHCA premium account Trade Debt $141,827 Premium payment Total Medical Personnel Stafng Trade Debt $138,945 Connect Health Professionals Trade Debt $128,026 Mitchell Charles Trade Debt $76,577 Midland Group Trade Debt $73,740 Reavis DME Trade Debt $64,587 Ok State/Educa Grp Ins Board Trade Debt $56,361 Em-Care Physician Services Trade Debt $56,250 Medical Solutions Trade Debt $50,008 Oklahoma Tax Commission Taxes $44,537 Administrative Consultant Svcs Trade Debt $42,467 Oklahoma Blood Institute Trade Debt $42,069 Oklahoma Employment Sec. Comm. Unemployment $41,896 Insurance/Taxes Chickasaw Telecom, Inc. Trade Debt $40,877 J & J Health Care Systems Trade Debt $36,092 POLAR MOLECULAR: Ct. Grants Summary Judgment in Suit vs. Woodward ----------------------------------------------------------------- District Judge Thomas L. Ludington entered on February 22, 2013, an order granting individual defendants' motion for summary judgment in PETROLEUM ENHANCER, LLC v. WOODWARD. Polar Molecular Corporation is a wholly owned subsidiary of Interpleader-Plaintiff Polar Molecular Holding Corporation. PMC was engaged in the petroleum-additive business. In 2006, PMC was in default on a loan for which it had pledged allegedly valuable intellectual property as collateral. Polar Holding was also undergoing an internal dispute between two shareholders and board members regarding the business strategy of PMC. This dispute eventually caused one of those directors, Richard Socia, to organize an enterprise called Petroleum Enhancer, LLC to purchase the lender's interest in PMC's promissory note and collateral. Petroleum Enhancer was incorporated in March 2007, Mr. Socia resigned from Polar Holding's board less than one month later, and Petroleum Enhancer acquired PMC's loan shortly thereafter. In 2007, Petroleum Enhancer brought suit in the United States District Court for the Eastern District of Michigan against Lester Woodward, an escrow agent in possession of PMC's collateral, alleging that PMC was in default on the payment of its promissory note. Polar Holding and PMC intervened in the lawsuit and filed counterclaims against Petroleum Enhancer and a third-party complaint against a number of additional parties, including Mr. Socia. After a round of dispositive motions and an appeal to the Sixth Circuit, Polar Holding is back before the Michigan District Court asserting claims for breach of fiduciary duty, civil conspiracy, and tortious interference against three Individual Defendants: Mr. Socia, Bruce Becker, and Carl Hill (the Individual Defendants). On November 2, 2012, the Individual Defendants moved for summary judgment asserting that they are entitled to judgment as a matter of law on all three of Polar Holding's claims. Judge Ludington granted the Individual Defendants' motion for summary judgment. Polar Holding's motion to strike is denied as moot and it claims are dismissed with prejudice. "This resolves the last pending issue and closes the case," said the court. The case is PETROLEUM ENHANCER, LLC, A Michigan Limited Liability Company, Plaintiff/Counter-Defendant, Honorable Thomas L. Ludington v. LESTER R. WOODWARD, Defendant, and POLAR MOLECULAR CORP., Intervenor-Plaintiff, POLAR MOLECULAR HOLDING CORP., Interpleader-Plaintiff/Third-Party Counter-Plaintiff v. AFFILIATED INVESTMENTS, LLC, BARBARA SOCIA as Personal Representative of the Estate of Richard J. Socia, Deceased, CARL HILL, BRUCE BECKER, A. RICHARD NELSON, Third-Party Defendants; and In re: POLAR MOLECULAR CORP. POLAR MOLECULAR CORP., Plaintiff, v. PETROLEUM ENHANCER, LLC., Defendant, Case Nos. 07-12425, 09-10247. A copy of the District Court's February 22, 2013 Opinion and Order is available at http://is.gd/N9vIyifrom Leagle.com. Polar Molecular Corp. filed for Chapter 11 in January 2008 in the United States Bankruptcy Court for the District of Colorado. PMC filed a second Chapter 11 bankruptcy petition in the same court in August 2008. PMC's Chapter 11 bankruptcy case was subsequently converted to a Chapter 7 liquidation, and the bankruptcy court appointed a trustee to act as the representative of PMC's estate. PORTER BANCORP: Incurs $32.9 Million Net Loss in 2012 ----------------------------------------------------- Porter Bancorp, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $32.93 million on $57.72 million of interest income for the year ended Dec. 31, 2012, as compared with a net loss of $107.30 million on $73.55 million of interest income during the prior year. The Company incurred a net loss of $4.38 million on $86.40 million of interest income in 2010. The Company's balance sheet at Dec. 31, 2012, showed $1.16 billion in total assets, $1.11 billion in total liabilities and $47.19 million in total stockholders' equity. Crowe Horwath, LLP, in Louisville, Kentucky, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred substantial losses in 2012, 2011 and 2010, largely as a result of asset impairments. In addition, the Company's bank subsidiary is not in compliance with a regulatory enforcement order issued by its primary federal regulator requiring, among other things, increased minimum regulatory capital ratios. Additional significant asset impairments or continued failure to comply with the regulatory enforcement order may result in additional adverse regulatory action. "These events raise substantial doubt about the Company's ability to continue as a going concern." A copy of the Form 10-K is available for free at: http://is.gd/nHkcMP About Porter Bancorp Porter Bancorp, Inc., is a bank holding company headquartered in Louisville, Kentucky. Through its wholly-owned subsidiary PBI Bank, the Company operates 18 full-service banking offices in twelve counties in Kentucky. POWERWAVE TECHNOLOGIES: U.S. Trustee Objects to Bidding Procedures ------------------------------------------------------------------ BankruptcyData reported that the U.S. Trustee assigned to the Powerwave Technologies case filed with the U.S. Bankruptcy Court an objection to the Debtors' motion bidding procedures related to the sale of substantially all the Debtors' assets. The U.S. Trustee states, "The Debtor seeks authority to provide to a stalking horse bidder a breakup fee plus an expense reimbursement not to exceed 4% of its cash bid. As no stalking horse has been identified, the U.S. Trustee objects to the approval of any breakup fee in these circumstances. Breakup fees are ordinarily predicated on the stalking horse having placed the estate's property in a sales posture to attract other bidders to the auction, actually serving as a catalyst to attract additional bids, or in some other way preserving or enhancing the value of the estate," the report cited. 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. Kurtzman Carson Consultants serves as administrative agent and Conway MacKenzie serves as financial advisor. A seven-member official committee of unsecured creditors was appointed in the Chapter 11 case. PROPHECY COAL: Tulgalgatai Sales Deal Expiry Constitutes Default ---------------------------------------------------------------- Further to the news release dated November 15, 2012, Prophecy Coal Corp. on March 1 disclosed that it continues the discussion with Tethys and its representatives regarding the purchase of Tulgalgatai coal licenses. Pursuant to the credit agreement between Prophecy and the Company's creditor, Waterton Global Value, L.P., the expiry of the original purchase and sales agreement with Tethys constituted a default under the Credit Agreement. Waterton has agreed to waive the default, subject to (a) Prophecy setting aside $3.5 million in escrow for purchase of the Licences and repayment of the loan; (b) Prophecy agreeing to issue 2 million common shares to Waterton, subject to TSX exchange approval; and (c) Prophecy agreeing to pledge additional security to Waterton. About Prophecy Coal Prophecy Coal Corp. -- http://www.prophecycoal.com-- is a Canadian TSX listed company engaged in developing energy projects in Mongolia. The Company's wholly-owned subsidiary Prophecy Power Generation LLC is advancing plans for a proposed 600 MW coal mine- mouth power plant, which has been permitted by the Mongolian government, adjacent to its Chandgana coal deposit. Chandgana Coal LLC, a Prophecy Coal Corp. wholly-owned private Mongolian subsidiary, is expected to supply 3.5 million tonnes of coal per year to Prophecy Power Generation LLC for 25 years. Chandgana Coal LLC controls over 1.2 billion tonnes of thermal coal in the measured and indicated categories, including two mining licenses containing 124 million tonnes of measured resource with a strip ratio of 0.7 to 1. A mineral reserve, which is the economically mineable part of a measured or indicated mineral resource demonstrated by at least a prefeasibility study, has not been estimated for the project. Mineral resources that are not mineral reserves do not have demonstrated economic viability. QUALITY CANDY: Avoidance Suit Against Bardes Plastics Dismissed --------------------------------------------------------------- Bardes Plastics, Inc., which supplies packaging products to Quality Candy Shoppes/Buddy Squirrel of Wisconsin, Inc., won dismissal of a lawsuit that seeks to recoup $19,775.96 in payments made by Quality Candy in the 90 days before it filed for bankruptcy. District Judge J.P. Stadtmueller adopted a report and recommendation from U.S. Bankruptcy Judge Margaret Dee McGarity, which includes proposed findings of fact and conclusions of law, regarding a motion for summary judgment filed by Bardes. Judge McGarity recommended that Bardes's motion for summary judgment be granted and that the adversary proceeding be dismissed. The trustee for Quality Candy commenced the lawsuit against Bardes on Nov. 29, 2011. Bardes moved for summary judgment, offering two affirmative defenses: (1) the ordinary course of business defense under 11 U.S.C. Sec. 547(c)(4); and (2) the new value defense under 11 U.S.C. Sec. 547(c)(2). The bankruptcy judge held that Bardes met its burden of proof as to both of the offered affirmative defenses. The judge noted that the payments fit the established practice of the parties' business relationship, which undisputedly showed seasonal variations. That is, though the timing of payment changed from 80 days at the beginning of the preference period to just 30 days at the end, this change fit the long-established pattern of the business relationship and did not evince the "aggressive collection practices" sought to be eliminated by the preference recovery scheme. The bankruptcy judge further concluded that Bardes showed that it gave "new value" in exchange for the preferential transfers as Bardes continued to do business with debtor as usual during the preference period: the Debtor ordered product, Bardes shipped product on unsecured credit, and the Debtor paid invoices as it had in prior years. Quality Candy used packaging purchased from Bardes, and between 2003 to 2009, the Debtor purchased an average of $262.280.82 in supplies from Bardes. The Debtor's business was seasonal, with August through January being the busiest months, and the sales history from 2004 to 2009 shows that the vast majority of sales, measured by the number of orders placed, the number of pieces ordered, and the sales volume, occurred between August and January of each year. According to the District Court, the history of payments showed a pattern. Bardes sent invoices on the same date as each delivery. The Debtor typically paid the invoices within or close to the 30 days set forth on the invoices during December to July, but frequently required additional time to pay the invoices from August to November. This pattern makes sense, the District Court said, because in August to November the production was increased to meet seasonal demand, but the sales were delayed. The lawsuit before the District Court is, ASSET RENEWAL SERVICES, INC., as Trustee for Helminiak Confections of Wisconsin, Inc., Plaintiff, v. BARDES PLASTICS, INC., Defendant, Case No. 12-CV- 1113-JPS (E.D. Wis.). A copy of the District Court's Feb. 28, 2013 Order is available at http://is.gd/CC6ZSsfrom Leagle.com. Quality Candy Shoppes/Buddy Squirrel of Wisconsin Inc. sold candies and similar confections, and distributed packaged products through retail locations in southern Wisconsin and throughout the United States. Quality Candy filed for Chapter 11 bankruptcy (Bankr. E.D. Wis. Case No. 11-02846) on Jan. 15, 2010, with $3.4 million in debt and $4.4 million in total assets. On Sept. 30, 2010, the confirmed plan vested the trustee, Asset Renewal Services, Inc., with the right to administer all remaining assets of the Debtor, including any funds recovered through preference claims. QUICK-MED TECHNOLOGIES: Appoints Two Directors to Board ------------------------------------------------------- Dale Bergman and Paul Jenssen were appointed to the board of directors of Quick-Med Technologies, Inc., on Feb. 28, 2013. Mr. Bergman, 57, has practiced corporate and securities law for over 25 years, with specialty in advising emerging and mid-market public companies in their growth. Since March 2011, he has been a partner in the Ft. Lauderdale office of Roetzel & Andress, LPA. From May 2009 to March 2011, he was a partner in the Ft. Lauderdale office of Arnstein & Lehr and from January 2004 to April 2009, he was a member of Kluger, Peretz, Kaplan & Berlin, P.L., a Miami-Florida based law firm. Mr. Bergman does not currently serve as a director of any reporting companies. Mr. Bergman, who is a member of the Florida and New York bars, holds a bachelor's degree from Columbia College of Columbia University and a J.D. from Harvard Law School. The Company believes that his lengthy experience in advising emerging and mid-market public companies in their growth makes him a valuable addition to the board of directors. The board of directors expects to appoint Mr. Bergman to its audit committee. There is no material plan, contract or arrangement to which Mr. Bergman is a party or in which he participates that is entered into or material amendment in connection with the triggering event or any grant or award to Mr. Bergman or modification thereto, under any such plan, contract or arrangement in connection with any such event. As previously reported, effective as of Jan. 10, 2013, the Company appointed Mr. Paul Jenssen, 56, as its Chief Financial Officer, corporate treasurer and secretary. Mr. Jenssen will be working under a consulting agreement, will be paid a weekly retainer of $1,120 for the first eight hours of work. Time above eight hours will be paid at $125/hour, with a certain discount for the initial period. In addition he may be granted stock options at the Company's discretion. Mr. Jenssen has over 35 years of experience in strategic planning, process improvement, finance and accounting. He started his career at Deloitte Touche (1978-1984) before becoming Treasurer at Associated Press (1984-1998). In addition to working as a consultant since 1998, he was the CFO, COO and a Senior Managing Director at Rothschild North America investment bank (1998-2006). From 2006 until the present, Mr. Jenssen was the President of Jenssen Consulting, a business involved in providing strategic planning, process improvement, finance and accounting related services. Mr. Jenssen does not serve as a director of any other reporting company. Mr. Jenssen is a CPA, has an MBA from Columbia University in New York and has held several securities licenses. The registrant believes that Mr. Jenssen's financial and investment banking experiences makes him a valuable addition to its board of directors. There are no arrangements or understandings between Mr. Bergman or Mr.Jenssen and any other persons pursuant to which either of them was selected as a director. There is no family relationship between Mr. Bergman or Mr. Jenssen and any of the other executive officers or directors of the Company. About Quick-Med Gainesville, Fla.-based Quick-Med Technologies, Inc., is a life sciences company focused on developing proprietary, broad-based technologies in the consumer and healthcare markets. Its four core technologies are: (1) Novel Intrinsically Micro-Bonded Utility Substrate (NIMBUS(R)), a family of advanced polymers bio- engineered to have antimicrobial, hemostatic, and other properties that can be used in a wide range of applications, including wound care, catheters, tubing, films, and coatings; (2) Stay Fresh(R), a novel antimicrobial based on sequestered hydrogen peroxide, that can provide durable antimicrobial protection to items such as textiles through numerous laundering cycles; (3) NimbuDerm(TM), a novel copolymer for application as a persistent hand sanitizer with long lasting protection against germs; and (4) MultiStat(R), a family of advanced patented methods and compounds shown to be effective in skin therapy applications. The Company's balance sheet at Sept. 30, 2012, showed $1.4 million in total assets, $9.8 million in total liabilities, and a stockholders' deficit of $8.4 million. Daszkal Bolton LLP, in Boca Raton, Florida, expressed substantial doubt about Quick-Med's ability to continue as a going concern. The independent auditors noted the the Company has experienced recurring losses and negative cash flows from operations for the years ended June 30, 2012, and 2011, and has a net capital deficiency. RADIAN GROUP: Completes Concurrent Common Stock Offerings --------------------------------------------------------- Radian Group Inc. on March 4 disclosed that it has completed its previously announced concurrent public offerings of 39.1 million shares of common stock and $400 million principal amount of convertible senior notes due 2019. The Company received aggregate net proceeds, after underwriting discounts and commissions and estimated offering expenses, of approximately $299.5 million from the Common Stock Offering and $389.8 million from the Convertible Notes Offering. The Company intends to use the proceeds from the offerings to fund working capital requirements and for general corporate purposes, including additional capital support for its mortgage insurance business. Morgan Stanley & Co. LLC and Goldman, Sachs & Co. acted as joint book-running managers for the offerings, Dowling & Partners Securities, LLC, Keefe, Bruyette & Woods, Inc., Macquarie Capital (USA) Inc. and Wells Fargo Securities, LLC acted as co-managers for the Common Stock Offering and Keefe, Bruyette & Woods, Inc. acted as co-manager for the Convertible Notes Offering. The notes are the Company's unsecured obligations. The notes will pay interest semi-annually on March 1 and September 1 at a rate of 2.25% per year, and will mature on March 1, 2019. Prior to December 1, 2018, the notes will be convertible only upon specified events and during specified periods and, thereafter, at any time. The notes will initially be convertible at a conversion rate of 94.3396 shares of the Company's common stock per $1,000 principal amount of notes, corresponding to an initial conversion price of approximately $10.60 per share of the Company's common stock. The conversion rate will be subject to adjustment upon certain events, but will not be adjusted for accrued and unpaid interest. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company's option. The Company will have the right to redeem all or part of the notes on or after March 8, 2016 if the last reported sale price of its common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period. The shares and notes were issued pursuant to an effective shelf registration statement that was previously filed with the Securities and Exchange Commission on Form S-3 and declared effective on August 20, 2012. The offerings were made by means of a prospectus and related prospectus supplements. A copy of the prospectus supplement and the accompanying base prospectus for each of the offerings has been filed with the SEC and is available for free on the SEC's Web site: http://www.sec.gov.Alternatively, copies may be obtained from Morgan Stanley & Co. LLC, Attn: Prospectus Department, 180 Varick Street, 2nd Floor, New York, New York 10014, by calling (866) 718-1649 or by e-mailing prospectus@morganstanley.com and from Goldman, Sachs & Co., Attn: Prospectus Department, 200 West Street, New York, NY 10282, by calling (866) 471-2526 or by e-mailing prospectus-ny@ny.email.gs.com 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 March 4, 2013, Standard & Poor's Ratings Services said that it has affirmed all of its ratings on Radian Group Inc. At the same time, S&P revised the outlook to stable from negative. S&P also assigned its 'CCC+' senior unsecured debt rating to the company's proposed $350 million convertible senior notes. 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." R&A PETROLEUM: Court Threatens to Dismiss Chapter 11 ---------------------------------------------------- Bankruptcy Judge R. Kimball Mosier in Utah held a hearing Feb. 26 on the U.S. Trustee's Motion to Convert or Dismiss the Chapter 11 case of R&A Petroleum, LLC, and the Court's related Order to Show Cause. As a result of the hearing, the Court set these deadlines: 1) No later than March 12, 2013, Russell S. Walker and Oliver K. Myers must file a Sec. 329 Statement with the Court outlining the services rendered by the Debtor's attorneys both pre-petition and post-petition for which they received $5,000 from the Debtor; 2) No later than March 12, 2013, the Debtor must file an application to employ Woodbury Kesler with the Court, along with an affidavit in support of such application and a proposed order approving the employment of the firm as the Debtor's counsel; 3) No later than March 12, 2013, the Debtor must file its Statement of Financial Affairs and Schedule of Assets and Liabilities with the Court; 4) No later than March 12, 2013, the Debtor must provide its Initial Financial Report to the U.S. Trustee, and file with the Court its Monthly Operating Reports for the months of December, 2012 and January, 2013; and 5) No later than March 12, 2013, the Debtor, through counsel, must file a formal objection to the dismissal of the case for failure of counsel to appear at the 341 meeting held on January 10, 2013, and file a notice of hearing on that objection to be served on all parties on the mailing matrix. If the Debtor or its counsel fail to fully comply with any of the deadlines, the case will be dismissed based upon a declaration of the United States Trustee, and without further notice or hearing. A copy of the Court's Feb. 28, 2013 Order is available at http://is.gd/2MfnD1from Leagle.com. R&A Petroleum LLC, based in Clearfield, Utah, filed for Chapter 11 bankruptcy (Bankr. D. Utah Case No. 12-35509) on Dec. 12, 2012. Judge R. Kimball Mosier oversees the case. Russell S. Walker, Esq., at Woodbury & Kesler, serves as the Debtor's counsel. In its petition, the Debtor estimated $500,001 to $1 million in assets, and $1 million to $10 million in debts. The petition was signed by Arshi Singh, member. RCN TELECOM: Moody's Affirms 'B1' CFR Following Term Loan Upsize ---------------------------------------------------------------- Moody's Investors Service affirmed the B1 corporate family rating of RCN Telecom Services, LLC following its announced plan to upsize its term loan by $33 million to $808 million. The incremental proceeds will fund a larger dividend of approximately $205 million compared to the $172 million previously expected. Moody's also affirmed the B1 rating on the first lien bank debt. RCN Telecom Services, LLC Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B1 Senior Secured Bank Credit Facility, Affirmed B1 Ratings Rationale: The upsize increases pro forma leverage by approximately 0.2 times to 5.2 times debt-to-EBITDA from 5 times as previously expected and 4 times currently. It also adds slightly under $2 million of annual interest expense. However, Moody's still expects RCN to continue to generate positive free cash flow-to-debt in the 4% to 6% range and to lower leverage to the mid 4 times range over the next 18 months. However, the greater debt burden leaves less flexibility should operations falter. Despite RCN's high leverage (about 5.2 times debt-to-EBITDA pro forma for the proposed transaction), expectations for the company to continue generate positive free cash flow from its attractively bundled video, high speed data and voice services in densely populated markets support its B1 corporate family rating. The financial sponsor ownership constrains the rating; notwithstanding expectations for leverage to decline from both EBITDA growth and debt reduction over at least the next year or two, beyond that time the equity owners will likely seek incremental returns of capital, which could lead to an increase in leverage or limit the application of free cash flow to debt reduction. As an overbuilder in most markets, RCN faces intense competition from larger and better capitalized cable, direct broadcast satellite (DBS) and telecom operators. The company's upgraded network allows it to offer an attractive package to both residential and commercial customers, but price pressure remains a risk, and the battle for subscribers could limit growth (albeit less so in the Lehigh Valley market, which represents about 40% of EBITDA and in which RCN acts as an incumbent). The lack of scale together with weak EBITDA margins relative to cable peers also constrains the rating. Given the competition and RCN's size, Moody's expects margins to remain below peers, particularly as programming costs, especially the sports content prevalent in RCN's urban markets, escalate. The stable outlook assumes continued application of free cash flow to debt reduction and modest EBITDA growth will facilitate a decline in leverage to the mid 4 times range over the next 18 months. Deteriorating operating performance or an inability to lower leverage to 4.5 times over the next 18 months could pressure the rating down. Over the longer term another debt-financed dividend or an acquisition resulting in leverage sustained above 4.75 times debt-to-EBITDA could warrant a downgrade. An erosion of the liquidity profile could also have negative ratings implications. The current leverage profile, lack of scale, overbuilder model, and the financial sponsor ownership limit upward ratings momentum and a positive rating action is highly unlikely. However, Moody's could consider a positive action with a commitment to a more conservative financial profile characterized by leverage trending toward and remaining below 3.25 times debt-to-EBITDA on a sustained basis. An upgrade would also require good liquidity and expectations for stable to improving subscriber trends. The principal methodology used in this rating was the Global 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. Based in Princeton, New Jersey, RCN Telecom Services, LLC (RCN) provides bundled cable, high-speed Internet and voice services to residential and small-medium business customers primarily located in high-density Northeast (Washington, D.C.; Philadelphia and Lehigh Valley, PA; New York City; Boston) and Chicago markets. The company serves approximately 339 thousand video, 344 thousand high speed data, and 189 thousand voice customers, and its annual revenue is approximately $563 million. ABRY Partners, LLC owns approximately two-thirds of the company, Spectrum Equity owns approximately 20%, and management and other equity investors own the remainder. RESIDENTIAL CAPITAL: Reduces Exclusivity Extension Bid to 60 Days ----------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of Residential Capital, LLC, and its debtor affiliates, in court papers, expressed initial skepticism over the exclusivity motion, asserting that it raised the prospect that the Debtors were seeking an extension of exclusivity only to propose a non-consensual, plan sponsored by its parent, Ally Financial, Inc. However, the Committee will endorse the further extension of the Debtors' exclusivity subject after obtaining the Debtors' assurance that they would commit to an alternative path forward in their Chapter 11 cases that is not conditioned on satisfaction of Ally's demands. The Debtors also agreed to (i) refrain from filing a nonconsensual plan during the exclusivity extension, (ii) consent to a motion by the Committee seeking standing to bring estate causes of action against Ally, (iii) adjourn for a short period of time the hearing on the proposed settlement with the residential mortgage-backed securities trust to facilitate negotiations with the objectors, and (iv) allow their plan support agreement with Ally to expire. Wilmington Trust, National Association, solely in its capacity as indenture trustee for various series of senior unsecured notes, states that it does not oppose further extension of the Debtors' exclusivity in light of the agreement they entered into with the Committee. The Trustee, however, indicates that it remains concerned about the status of the bankruptcy cases, particularly the stalled mediation, and the multiple positions the Debtors have taken to the detriment of Residential Capital's creditors. The Trustee says it hopes to use the next 60 days to engage in a constructive dialogue, to the extent possible, but will also use the time to prepare for other alternatives, such as developing a plan that does not release estate claims and third-party claims and instead establishes a litigation trust to pursue estate claims to judgment or other resolution. The Debtors add that the agreement with the Committee evidences the commitment of both parties to the plan process. The Debtors note that, given the divergent interests of their creditors, it is quite possible that no plan will be fully supported by all creditor constituencies. For that reason, a critical component of the Progress Plan is the Committee's pledge to bring parties to the table to participate in negotiations on the intercreditor issues that the Debtors believe are critical for a successful conclusion to these cases. The Debtors assert that the only creditor group, the Ad Hoc Group of Junior Secured Noteholders, to oppose the Exclusivity Motion did so with the self-serving intention of attempting to gain control over these cases and enhance their undersecured position. In light of the agreement with the Committee, the Debtors have amended their request for an extension to file a Chapter 11 plan from 90 days to only 60 days, through and including April 30, 2013, and an extension of the period during which they have the exclusive right to solicit acceptances thereof through and including July 1, 2013. * * * Judge Martin Glenn signed a bridge order extending the period by which the Debtors have exclusive right to file a plan of reorganization until March 5, 2013, provided, however, that in the event the hearing on the Motion is adjourned, the Exclusive Plan Period will be automatically extended through any such adjourned dates. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Committee Has Conditional Support for CRO -------------------------------------------------------------- Residential Capital, LLC, and its debtor affiliates are seeking permission from Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to appoint Lewis Kruger as chief restructuring officer pursuant to Section 363(b) of the Bankruptcy Code. The Official Committee of Unsecured Creditors relates that it supports a conditional appointment of the chief restructuring officer in the Debtors' bankruptcy cases under a revised scope of authority. The Committee says it is clear that the Chapter 11 cases could benefit from a fresh perspective in the form of an independent CRO who is prepared to work constructively with all parties towards the resolution of disputed claims and confirmation of a consensual plan, and it is in this context that the Committee is prepared to agree to a modest extension of exclusivity. For the appointment of a CRO to be productive, however, it is important that he be given decision-making power, and the Committee says the Debtors have agreed on a revised scope of the CRO's authority. The Committee and Wilmington Trust, National Association, solely in its capacity as indenture trustee for various series of senior unsecured notes, note that they were excluded by the Debtors in the negotiations regarding the appointment of a CRO, although they now support the CRO appointment. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Seeks to Terminate FRB Foreclosure Review -------------------------------------------------------------- Residential Capital LLC and its affiliates ask the Court to determine that (i) for purposes of any proposed plan, Debtor GMAC Mortgage, LLC's obligation to pay for an independent file review regarding certain residential foreclosure actions and foreclosure sales -- FRB Foreclosure Review -- is a general unsecured claim in an amount to be determined, and (ii) the automatic stay prevents the Federal Reserve Board, the Federal Deposit Insurance Corporation, and other governmental entities from taking any action to enforce the claim against the Debtors outside of the consent order dated April 13, 2011. According to the Debtors, they diligently have been following the mandates imposed by the FRB Foreclosure Review for the past year and a half and are spending approximately $300,000 per day to support that review. That expenditure represents by far the single most costly administrative expense of the Debtors' estates, Gary S. Lee, Esq., at Morrison & Foerster LLP, in New York, tells the Court. At that time the Consent Order was entered, the Debtors were not provided with an option to make a lump sum payment to satisfy the obligations imposed by the costly FRB Foreclosure Review, Mr. Lee says. The Debtors estimated that, as of the Petition Date, the performance of the FRB Foreclosure Review may cost as much as $180 million. By August, the Debtors' estimate of the cost of the FRB Foreclosure Review had risen to $250 million. Since August, the FRB has imposed still further changes to the scope of the Foreclosure Review, and the Debtors believe that the cost of the review may balloon still further if nothing is done to stem the costs, perhaps reaching $415 to $459 million. Mr. Lee relates the Debtors dutifully have been complying with the FRB Foreclosure Review obligation under the paradigm that the injunctive obligations, as viewed by the governmental entities, represented an obligation whose nature went beyond that of mere compensation to borrowers. However, on January 7, 2013, the FRB, FDIC, and other governmental entities reached a settlement, pursuant to which ten of the country's largest mortgage servicers could satisfy foreclosure review requirements in their respective consent orders -- virtually identical to those requirements imposed upon the April 2011 Consent Order Debtors -- by making a lump sum payment into a settlement fund to be distributed among an even larger population of borrowers than are the subject of the Foreclosure Review process, and providing certain borrower assistance. This settlement concretely demonstrates that in fact GMAC Mortgage's FRB Foreclosure Review obligation can easily be quantified, can be satisfied by an alternative "right to payment," and represents a general unsecured claim against the Debtors, Mr. Lee asserts. 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). REVEL AC: Dennis Stogsdill Appointed Chief Restructuring Officer ---------------------------------------------------------------- The board of directors and sole members of Revel AC, Inc., and certain of its direct and indirect subsidiaries appointed Dennis E. Stogsdill, age 42, to serve as Chief Restructuring Officer of the Companies, subject to regulatory approval. On Feb. 22, 2013, Mr. Stogsdill's petition for temporary key licensure with the New Jersey Casino Control Commission was approved and he was appointed as the CRO of the Companies. Mr. Stogsdill was appointed CRO in connection with the restructuring announced by the Company on Feb. 19, 2013, and the Company's engagement of Alvarez & Marsal North America, LLC, as its restructuring advisor. In his position as CRO, Mr. Stogsdill will (A) subject to supervision by the Company's Chief Executive Officer, perform certain activities and services customarily performed by a chief financial officer, including without limitation having control over (i) the treasury and cash management functions of the Companies, and (ii) the development of any short-term cost reduction programs or cash conservation measures with respect to the Companies and any underlying analysis thereof, and (B) perform analyses with respect to any elements of the restructuring process with respect to the Companies. Alan Greenstein will remain the Company's Chief Financial Officer and Senior Vice President of Finance focused on accounting operations including credit, cashiering and regulatory reporting and compliance but will not have responsibility over certain matters customarily performed by a chief financial officer. Over the past five years, Mr. Stogsdill has served as a Managing Director of A&M. Mr. Stogsdill does not have any family relationships with any of the Company's directors or officers. Mr. Stogsdill and his team will serve as independent contractors to the Companies and will report to the Chief Executive Officer. About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. In 2012, Revel warned federal regulators about a potential bankruptcy or foreclosure, citing its growing debt load of more than $1.3 billion and the possibility that revenue will remain depressed. At Sept. 30, 2012, the Company had $1.14 billion in total assets, $1.39 billion in total liabilities and a $243.12 million total owners' deficit. * * * As reported by the TCR on Feb. 22, 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Atlantic City- based Revel AC Inc., the operator of the Revel resort, to 'D' from 'CCC'. The rating actions follow the company's announcement that it plans to restructure through a prepackaged Chapter 11 reorganization, and that it did not make the scheduled interest payment due Feb. 19, 2013, under its term loan agreement. REVSTONE INDUSTRIES: PBGC to Bridge $46M Gap in Unit's Pension -------------------------------------------------------------- Lance Duroni of BankruptcyLaw360 reported that the Pension Benefit Guaranty Corp. said Friday that it is stepping in to cover a $46 million hole in the pension plan of auto parts supplier Metavation LLC, a nondebtor affiliate of bankrupt Revstone Industries LLC. The PBGC acted due to concerns over Revstone's plan to sell its stake in Southfield, Mich.-based Metavation, which owes retirement benefits to over 1,500 current and future retirees, according to a statement from the agency, the report cited. About Revstone Industries, Greenwood Forgings, & US Tool & Engineering Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. A motion for joint administration of the cases has been filed. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. RIDGELAND APARTMENT: Can Hire CBRE Inc. as Appraiser ---------------------------------------------------- Ridgeland Apartment Holdings, LLC, won Bankruptcy Court authority to employ CBRE, Inc., as appraiser to the Debtor effective Feb. 1, 2013, pursuant to a Feb. 28, 2013 order available at http://is.gd/5wgrCZfrom Leagle.com. Ridgeland Apartment Holdings, LLC, in Salt Lake City, Utah, filed for Chapter 11 bankruptcy (Bankr. D. Utah Case No. 12-35417) on Dec. 10, 2012. Judge Joel T. Marker oversees the case. Knute A. Rife, Esq., at Rife Law Office, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. The petition was signed by Shane Baldwin, principal of member/manager. On Feb. 19, 2013, Bixby Bridge Fund I, LLC, won relief from the automatic stay to exercise all of its legal, contractual and equitable rights available to it under its Senior Loan Documents, including without limitation, the sale of its collateral. Attorneys for Bixby Bridge Fund I, LLC, are Lon A. Jenkins, Esq., at Jones Waldo Holbrook & McDonough, PC; and Robert L. LaBate, Esq., and Richard Bixter, Esq., at Holland & Knight. RITE AID: Moody's Retains 'B3' Rating on 2 Certificate Classes -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Rite Aid Pass- Through Trust Certificates, Series 1999-1 as follows: Class A-1, Affirmed at B3; previously on Nov 29, 2000 Downgraded to B3 Class A-2, Affirmed at B3; previously on Nov 29, 2000 Downgraded to B3 Ratings Rationale: The rating of the certificate was affirmed based on the value of the real estate collateral relative to the outstanding loan balance, the rating of Rite Aid Corporation (senior unsecured rating Caa2, stable outlook) and the support provided by a residual value insurance provider, which is a rated entity. The principal methodology used in this rating was "Commercial Real Estate Finance: Moody's Approach to Rating Credit Tenant Lease Financings" published in November 2011. No model was used in this review. Moody's ratings are determined by a committee process that considers both quantitative and qualitative factors. The rating action is a result of Moody's on-going surveillance of commercial mortgage backed securities transactions. Moody's prior full review is summarized in a press release dated February 29, 2012. Deal Performance The Certificates are supported by a portfolio of 53 drug stores with a total 841,411 square feet located in 14 states and the District of Columbia. Each property is subject to a fully bondable, triple net lease guaranteed by Rite Aid Corporation, which provides pharmacy services as well as over-the-counter medication and household items. Residual insurance covers 51 of the 53 properties and is provided by Hartford Fire Insurance Company (senior unsecured rating of A2, stable outlook). The two properties not covered by the residual insurance secure loans that fully amortize by the lease expiration. The transaction has amortized 31% since securitization. The current balance is $136 PSF compared to $199 PSF at securitization. The Class A-1 is scheduled to fully amortize by July 2, 2016 and the Class A-2 will have a balloon amount of $51 million which will be $69 PSF, and is protected by the residual insurance. ROYAL TOURS: Estate May Recoup 3 Payments From Patsy Hilliard ------------------------------------------------------------- Bankruptcy Judge Catharine R. Caron in Greensboro, North Carolina, granted, in part, and denied, in part, the motion for summary judgment filed by the Chapter 7 trustee for Royal Tours Inc. in the Trustee's lawsuit against Patsy M. Hilliard. Gerald S. Schafer, the Chapter 7 Trustee, filed an adversary proceeding on June 11, 2012, to recoup $52,500 from Patsy Hilliard. Lee Hilliard and Patsy Hilliard married on April 23, 1975. They were both officers of the Debtor. Lee and Patsy Hilliard entered into a Separation Agreement and Property Settlement on Aug. 5, 2008. In the Separation Agreement, Lee Hilliard and the Defendant agreed that the Defendant would resign as a director and officer of the Debtor and the Defendant agreed to a cash payment in lieu of equitable distribution. The Chapter 7 Trustee alleges that pursuant to 11 U.S.C. Sec. 547, the 12 monthly $3,500 payments paid to the Defendant by Royal Tours in the 12 months immediately preceding the bankruptcy filing are preferences, and the Trustee argues that he is entitled to summary judgment as a matter of law. The Chapter 7 Trustee also alleges that pursuant to 11 U.S.C. Sec. 549, he is entitled to the three $3,500 monthly payments made post-petition in the months of December 2010, January 2011 and February 2011 by the Debtor to the Defendant before the Debtor converted to a Chapter 7 case. According to Judge Caron, the Chapter 7 Trustee's claim for preferences fails as a matter of law with respect to the 12 monthly payments. The debt paid through the Debtor by Lee Hilliard to the Defendant was not a debt owed by the Debtor. The debt was a debt owed by Lee Hilliard to the Defendant as part of a Cash Distribution in the Separation Agreement. As such, the Trustee is not entitled to a judgment as a matter of law for the 12 $3,500 monthly payments paid by the Debtor immediately preceding the filing of the Petition. With respect to the other three monthly payments, Judge Caron said there is no dispute that the Defendant received three $3,500 monthly payments from the Debtor post-petition for the months of December 2010, January 2011, and February 2011 that were not authorized by the Bankruptcy Code or by the Court. As such, as a matter of law, the Trustee's claim for monies pursuant to 11 U.S.C. Sec. 549(a) is awarded. The lawsuit is, GERALD S. SCHAFER, TRUSTEE, Plaintiff, v. PATSY M. HILLIARD, Defendant, Adv. Proc. No. 12-02037 (Bankr. M.D.N.C.). A copy of Judge Caron's March 1, 2013 Memorandum Opinion is available at http://is.gd/wxnaFwfrom Leagle.com. Royal Tours, Inc., filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 10-12057) on Nov. 12, 2010. On Feb. 22, 2011, the case converted to Chapter 7. Gerald S. Schafer was appointed the Chapter 7 Trustee. RPP LLC: Voluntary Chapter 11 Case Summary ------------------------------------------ Debtor: RPP, LLC 1000 Rockpointe Boulevard Pittsburgh, PA 15084 Bankruptcy Case No.: 13-20868 Chapter 11 Petition Date: February 28, 2013 Court: U.S. Bankruptcy Court Western District of Pennsylvania (Pittsburgh) Debtor's Counsel: Elliott J. Schuchardt, Esq. SCHUCHARDT LAW FIRM U.S. Steel Tower, Suite 660 600 Grant Street Pittsburgh, PA 15219 Tel: (412) 414-5138 Fax: (412) 428-9080 E-mail: elliott016@gmail.com Scheduled Assets: $6,710,000 Scheduled Liabilities: $6,200,000 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Rock Ferrone, managing member. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Rock Airport Of Pittsburgh, LLC 09-23155 04/30/09 RYAN INT'L: Case Converted to Chapter 7 Liquidation --------------------------------------------------- Brian Mahoney of BankruptcyLaw360 reported that an Illinois federal judge on Thursday agreed to convert the Chapter 11 bankruptcy of the government air transport Ryan International Airlines Inc. into a Chapter 7 liquidation after the company failed to find a new investor and sold off its remaining its brand and stock to AJet Holdings LLC. The report related that U.S. Bankruptcy Judge Thomas Lynch agreed to convert the case to Chapter 7, one week after approving a plan for AJet to pay $800,000 to acquire all of Ryan's stock as well as its name, goodwill and right to continue leasing its office space at its former headquarters in Rockford, Ill. About Ryan International Ryan International Airlines, Inc., filed for Chapter 11 protection (Bankr. N.D. Ill. Case No. 12-80802) in its hometown in Rockford, Illinois, on March 6, 2012. Ryan International, which filed for bankruptcy along with 10 affiliates, estimated assets and debts of up to $100 million. Ryan and its affiliates -- http://www.flyryan.com/-- provided commercial air charter services, to a diverse mix of customers including U.S., Canadian and British military entities, the Department of Homeland Security, the U.S. Marwill Service, leisure travelers, professional and college sports teams and an ad hoc charter services. Ryan had 460 employees, with the cockpit crew, flight attendants and dispatchers represented by labor unions. Matthew M. Hevrin, Esq., and Thomas J. Lester, Esq., at Hinshaw & Culbertson LLP, serve as the Debtors' counsel. Silverman Consulting serves as financial advisor. The petition was signed by Mark A. Robertson, executive vice president. On March 19, 2012, the U.S. Trustee for Region 11 appointed the official committee of unsecured creditors of the Debtors. Brian J Lohan, Esq., Lydia R. H. Slaby, Esq., Matthew A. Clemente, Esq., Matthew G. Martinez, Esq., at Sidney Austin LLP, in Chicago; and Michael G. Burke, Esq., at Sidney Austin LLP, in New York City, represent the Creditors' Committee as counsel. INTRUST Bank, the prepetition lender owed $53.2 million, is represented by Thomas P. Sandquist, Esq., of WilliamsMcCarthy LLP; and Edward J. Nazar, Esq., at Redmond & Nazar LLP. The Bankruptcy Court later dismissed the Chapter 11 proceeding of Ryan 763K, a debtor-affiliate of Ryan International. SCI REAL ESTATE: Liquidating Trustee Files Adversary Clawback ------------------------------------------------------------- Hackard Law attorneys regularly represent plaintiffs and defendants in adversary cases, including clawbacks, in federal bankruptcy courts. The process of representation is often initiated by a preliminary review of our prospective client's case. A part of this review is the use of the PACER online system (Public Access to Court Electronic Records) made available by the Federal Courts. The firm was recently asked to review a case just filed last month, and the case's merits aside, it is noteworthy for its paper heft. In 2011 Los Angeles-based SCI Real Estate Investments and related SCI entities filed for Chapter 11 Bankruptcy in the Central District of California. Now some 114 defendants have been sued by the SCI Bankruptcy Liquidating Trustee for the avoidance of alleged fraudulent transfers. The complaint seeks a number of remedies that will likely be fully and vigorously litigated. That said the complaint with its exhibits tops the paper charts at 1812 pages. Those defendants that were served by mail received a ten pound plus package of paper pleadings comprised of an adversary complaint and 12 exhibits. While the merits of a case cannot be measured in pounds of paper produced, a newly served defendant can't help but be challenged by a stack of documents over six inches high. Hackard Law -- http://www.ponziclawbacks.com-- focuses on transactional and litigation matters. About SCI Real Estate Investments Los Angeles, California-based SCI Real Estate Investments, LLC, filed for Chapter 11 bankruptcy protection (Bankr. C.D. Calif. Case No. 11-15975) on Feb. 11, 2011. Jeffrey W. Dulberg, Esq., at Pachulski Stang Ziehl & Jones LLP, serves as the Debtor's bankruptcy counsel. Haskell & White LLP as accountant. Kennerly, Lamishaw & Rossi LLP as special real estate counsel. The Debtor disclosed $55,431,222 in assets and $69,514,028 in liabilities as of the Chapter 11 filing. Peter C. Anderson, the U.S. Trustee for Region 16, appointed three members to the official committee of unsecured creditors in the Chapter 11 cases of SCI Real Estate Investments. Levene, Neale, Bender, Yoo & Brill L.L.P., represents the Committee as its general bankruptcy counsel. SCOTELLE DEVELOPMENT: Case Summary & 8 Unsecured Creditors ---------------------------------------------------------- Debtor: Scotelle Development, LLC aka Willow Vista Plaza 44-875 Deep Canyon Road, Suite 1 Palm Desert, CA 92260 Bankruptcy Case No.: 13-13482 Chapter 11 Petition Date: February 28, 2013 Court: U.S. Bankruptcy Court Central District of California (Riverside) Judge: Deborah J. Saltzman Debtor's Counsel: Garrick A. Hollander, Esq. WINTHROP COUCHOT PROFESSIONAL CORPORATION 660 Newport Center Drive, Suite 400 Newport Beach, CA 92660 Tel: (949) 720-4150 Fax: (949) 720-4111 E-mail: ghollander@winthropcouchot.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its eight largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/cacb13-13482.pdf The petition was signed by David H. Stoltzman and Mary K. Stoltzman, managing members. SECUREALERT INC: Sapinda Asia Hikes Stake to 62.7% at Dec. 3 ------------------------------------------------------------ In an amended Schedule 13D filing with the U.S. Securities and Exhange Commission, Sapinda Asia Limited disclosed that, as of Dec. 3, 2012, it beneficially owns 970,120,201 shares of common stock of SecureAlert, Inc., representing 62.7% of the shares outstanding. Sapinda Asia previously reported beneficial ownership of 97,807,290 common shares or a 14.3% equity stake as of April 20, 2012. On Feb. 4, 2013, Sapinda Asia converted $2,000,000 aggregate principal amount in the Convertible Debenture at a rate of $0.0225 per Common Share, receiving a total of 94,509,600 Common Shares. The original conversion price of $0.03 per Common Share was subsequently changed to $0.0225 per Common Share, as disclosed in the Company's Form 10-Q filed on Feb. 14, 2013. Sapinda Asia entered into the Loan and Security Agreement on Dec. 3, 2012, with the Company pursuant to which among other things Sapinda Asia loaned $16,640,000 to the Company for repurchase of the Royalty and to fund general corporate purposes. This loan is convertible into Common Shares at a rate of $0.0225 per share, for a total of 739,555,556 Common Shares, beginning March 1, 2013. Any accrued and unpaid interests and fees under the Loan and Security Agreement are also convertible into Common Shares at a rate of $0.0225 per share. A copy of the amended regulatory filing is available at: http://is.gd/attrhL 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. 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. The Company's balance sheet at Dec. 31, 2012, showed $28.39 million in total assets, $23.40 million in total liabilities and $4.99 million in total equity. SHELDRAKE LOFTS: OK'd to Sell Real Properties to Winning Bidder --------------------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York authorized Sheldrake Lofts LLC to sell real property and related assets to The Joint Venture of Halpern Real Estate Ventures and Rosen Management Corp., the winning bidder in an auction held Dec. 19, 2012. The Joint Venture of Halpern submitted the highest and best offer for the purchased assets, in the amount of $3,500,000 and Remediation Capital Funding, LLC (the back-up bidder) submitted the second highest and best bid in the amount of $3,450,000. The purchased assets include the real property, including those located in the Village of Mamaroneck: (a) 188 Waverly Avenue, (b) 206 Waverly Avenue, (c) 208 Waverly Avenue, (d) 270 Waverly Avenue, (e) 147 Plaza Avenue, (f) E Plaza Ave (section/block/lot 8-103-12B), and (g) E Plaza Ave.; (ii) all of the development rights of the Debtor relating to the real property; (iii) all construction drawings of the Debtor relating to the real property; (iv) the approved site plan relating to the real property; and (v) all of the benefits, terms and conditions of the owner of the real property in accordance with the settlement between the Debtor and the Village. The auction was held December where the stalking horse bidder was Continental Ventures Realty, offered to pay $2,750,000, conditioned on a prohibition against credit bidding, and a 5% break up fee/expense reimbursement. About Sheldrake Lofts New Rochelle, New York-based Sheldrake Lofts LLC owns several contiguous parcels of real property in the Village of Mamaroneck situated along the Sheldrake River: 270 Waverly Avenue, 206-208 Waverly Avenue, 188 Waverly Avenue. It filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 10-23650) on Aug. 10, 2010. David H. Wander, Esq., at Davidoff, Malito & Hutcher, LLP, serves as the Debtor's bankruptcy counsel. The Debtor estimated its assets at $50 million to $100 million and its debts at $10 million to $50 million as of the Petition Date. SIGNATURE STATION: Plan Filing Period Extended Until June 10 ------------------------------------------------------------ The Bankruptcy Court extended Signature Station, LP's exclusive period to file a Plan and Disclosure Statement through and including June 10, 2013. In its motion, the Debtor says it is continuing to operate at a profit post-petition and is current on all post-petition payments to creditors. Further, the case has been pending just three months. According to papers filed with the Court, an extension of the exclusivity period will enable it to continue its efforts to refinance the Regions loan and to negotiate with creditors and propose a plan of reorganization to which the creditors will consent. Signature Station, LP, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-75646) in Atlanta on Oct. 11, 2012. The Debtor is a Single Asset Real Estate as defined in 11 U.S. Sec. 101(51B). The Debtor said that as of March 6, 2012, its property was appraised for $18.8 million. Bankruptcy Judge Margaret Murphy presides over the case. Howick, Westfall, McBryan & Kaplan, LLP, serves as counsel. In its schedules, the Debtor disclosed $20,743,936 in total assets and $14,420,265 in total liabilities as of the Petition Date. Ron C. Bingham, II, Esq., at Stites & Hargbison, PLLC, in Atlanta, Ga., represents Regions Bank as counsel. SINCLAIR BROADCAST: Asset Purchase No Impact on Moody's Ba3 CFR --------------------------------------------------------------- Moody's Investors Service reports that Sinclair Broadcast Group, Inc. has announced its agreement to purchase the broadcast assets of 18 television stations owned by Barrington Broadcasting Group, LLC for $370 million and operate or provide sales services to an additional six stations. This announcement follows Sinclair's confirmation that it entered into an agreement to purchase the stock and broadcast assets of four Cox Media stations for $95 million (adjusting for working capital benefit) and entered into an agreement to provide sales services to a fifth station. There is no immediate impact to ratings nor the stable outlook as Moody's expects overall financial metrics and operating performance to remain within the Ba3 category for the Corporate Family Rating. As of December 31, 2012, Moody's estimates Sinclair's 2-year average debt-to-EBITDA ratio pro forma for completed acquisitions at roughly 5.0x (including Moody's standard adjustments, prior to the pending Barrington and Cox transactions) and Moody's expects the announced acquisitions to result in less than a 0.2x increase in leverage for 2013, remaining below Moody's downgrade trigger of 5.50x (2-year average, including Moody's standard adjustments). The 24 network stations from Barrington consist of six NBC affiliates, six ABC, four CBS, three FOX, and five CW in markets ranked #68 to #199 with some overlap in Sinclair's existing footprint. The five stations in the Cox transaction are located in markets ranked #91 to #158 with no overlap. Sinclair's focus has typically been on larger, mid-sized markets with 77% of its current stations located in the largest 75 U.S. markets. The addition of Barrington and Cox stations delivers geographic, network and market size diversity. Sinclair expects to bring meaningful revenue and expense synergies to the transactions, notably higher retransmission fees, to boost free cash flow and offset the negative impact of incremental acquisition debt. "Moody's believes risks associated with rapid expansion and serial acquisitions will be mitigated by Sinclair's decision to set up a new subsidiary, Chesapeake TV, with additional management and retained staff from Barrington to focus on small market operations and acquisitions. Steven Marks, COO of Sinclair, will continue to manage Sinclair's existing mid-sized market station group while Steve Pruett, a longstanding broadcasting executive, has been appointed COO of Chesapeake TV to focus on small market operations and expansion," stated Carl Salas, Moody's VP and Senior Analyst. Moody's believes it is critical to augment executive management of operations given the increasing number of television stations and markets covered by Sinclair's broadcast footprint. The transactions are expected to close in 2Q2013 with both acquisitions subject to FCC approval and antitrust clearance needed for the Barrington purchase. Funding for these transactions will come from $25 million in cash for upfront deposits and up to $440 million from the issuance of new bank facilities and potentially new notes. This transaction represents continuing debt-financed activity by Sinclair following the purchase of stations from Newport Television, Freedom Communications, Four Points Media, among others in the last 18 months. The proposed acquisitions further expand Sinclair's footprint to an estimated 27.3% of U.S. television households and bring geographic and network diversification while adding market size diversity. Sinclair will be one of the largest affiliate partners for ABC, CBS and NBC. Although Sinclair remains one of the largest Fox affiliate members, going forward, Fox stations will represent only 24% of its total station count. Sinclair plans to sell two stations and assign a local marketing agreement and purchase option on a third station to remain compliant with FCC ownership conflict rules. Additionally, the license assets of another four stations will be purchased by Cunningham Broadcasting Corporation (a variable interest entity of Sinclair) and Howard Stirk Holdings, a newly formed entity. Sinclair's Ba3 Corporate Family Rating reflects moderately high leverage with 2-year average debt-to-EBITDA ratios of less than 5.2x estimated for December 2013 (including Moody's standard adjustments) and pro forma for the announced transactions. Moody's believes Sinclair will continue to generate mid-single digit free cash flow-to-debt ratios and apply free cash flow to reduce debt balances, in the absence of additional acquisitions. Ratings reflect moderately high financial risk, the inherent cyclicality of the broadcast television business, and increasing media fragmentation. Sinclair Broadcast Group, Inc., headquartered in Hunt Valley, MD, and founded in 1986, is a television broadcaster, operating 112 stations in 61 markets pro forma for the announced transactions. The station group reaches 29.8% of U.S. television households and includes 27 FOX, 20 CW, 20 MNT, 17 ABC, 15 CBS, 11 NBC affiliates, plus two other stations. SNUFFER'S RESTAURANTS: Files Chapter 11, to Explore Sale -------------------------------------------------------- Snuffer's Restaurants Inc. has sought Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Case No. 13-_____) in Dallas. Steve McCartin, Esq., at Gardere Wynne Sewell, serves as bankruptcy counsel to Snuffer's. Lance Murray, writing for Dallas Business Journal, reports that Mr. McCartin said two of the company's seven restaurants are not involved in the bankruptcy filing. Mr. McCartin also said Snuffer's will continue operating normally while it restructures and explores sale opportunities. According to Business Journal, Snuffer's blamed debt accumulated during the ongoing recession for the bankruptcy filing, but said that company's restaurants return a positive cash flow and had more than $14 million in annual sales. The closely-held company has operated in the Dallas-Fort Worth area for 35 years. The report notes Snuffer's -- http://www.snuffers.com/-- was founded in 1978 by restaurateur Pat Snuffer and since has expanded to locations elsewhere in Dallas, Addison, Plano, Rockwall, Highland Village and Southlake. SORENSON COMMUNICATIONS: Moody's Gives Caa2 Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service assigned to Sorenson Communications, Inc. a Caa2 Corporate Family Rating, a Caa2-PD Probability of Default Rating and B1 ratings to the proposed Senior Secured Revolving Credit Facility due October 2014 and Senior Secured Term Loan due October 2014. The rating outlook is stable. The proceeds of the new term loan and balance sheet cash will be used to redeem fully the existing term loan due August 2013 and pay transaction fees and expenses. Ratings Rationale: The Caa2 Corporate Family Rating is driven primarily by the risk of material Video Relay Services reimbursement rate cuts by the Federal Communications Commission's Telecommunications Relay Services Fund and concerns about the sustainability of the capital structure. Higher than anticipated rate reductions would impact revenue and profitability adversely, driving debt to EBITDA above 7 times, a level which is consistent with other issuers in the Caa category. The probability of default over the next two years is significant given these operating performance risks, Sorenson's limited liquidity and the looming debt maturities in late 2014 and early 2015. Support for the ratings comes from Sorenson's dominant share of the VRS market, history of cash flow generation, solid EBITDA margins and the potential for growth from new products serving the hard of hearing telephone market. The stable outlook reflects Moody's expectation of moderate revenue growth in 2013 driven by new products for the hard of hearing, partially offset by lower VRS reimbursement rates. Given the uncertainty related to future VRS reimbursement rates, Moody's base case expectation is for annual mid to high single digit reductions in VRS reimbursement rates by the FCC. The VRS subscriber count and utilization of Sorenson's VRS services should remain steady over the next few years. A downgrade could occur if VRS rate cuts are more severe than anticipated or if a near term debt restructuring becomes likely, leading to a heightened near term probability of default. Moody's notes that the debt-for-debt exchange proposed by Sorenson in late 2012 would have likely constituted a default under Moody's definitions. The CFR could be raised if the FCC adopts a long-term rate structure that mitigates the risk of near term profitability declines and the company refinances its 2014 and 2015 debt maturities. Ratings and LGD Assessments Assigned: Corporate Family Rating, Caa2 Probability of Default Rating, Caa2-PD Senior Secured Revolving Credit Facility due October, 2014, B1 (LGD1, 1%) Senior Secured Term Loan due October, 2014, B1 (LGD2, 17%) The principal methodology used in this rating was Global Business and Consumer Service published in October 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Sorenson is the leading provider of IP-based video communication technology and services to the deaf and hard of hearing. The company's sign language interpreters join telephone calls by or to deaf customers via its videophones. The service is provided free of charge to qualified deaf individuals as mandated by the Americans with Disabilities Act of 1990. Moody's expects 2013 revenues of over $500 million. SPRINGHILL PARTNERS: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: SpringHill Partners 16 E. Old Willow Road Prospect Heights, IL 60070 Bankruptcy Case No.: 13-07724 Chapter 11 Petition Date: February 27, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Janet S. Baer Debtor's Counsel: Linda Spak, Esq. SPAK & ASSOC 6938 N Kenton Lincolnwood, IL 60712 Tel: (312) 372-8703 Fax: (773) 338-4956 E-mail: attorneyspak@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by John Livaditis, partner. THELEN LLP: Bankruptcy Judge Blesses Partner Settlements -------------------------------------------------------- Max Stendahl of BankruptcyLaw360 reported that a New York federal judge on Friday approved settlements between the trustee for bankrupt Thelen LLP and three former partners who agreed to repay compensation from business completed after the law firm dissolved in 2008. The report related that U.S. Bankruptcy Judge Allan L. Gropper signed off on the clawback deal between Yann Geron, the Chapter 7 trustee for Thelen, and former partners Christopher D. Baker, Brian R. Gallagher and Darlene H. Smith. The partners each agreed to pay 68 percent of the claims asserted against them, the report said. About Thelen LLP Thelen LLP, formerly known as Thelen Reid Brown Raysman & Steiner -- http://thelen.com/-- is a bicoastal American law firm in process of dissolution. It was formed as a product between two mergers between California and New York-based law firms, mostly recently in 2006. Its headcount peaked at roughly 600 attorneys in 2006, and had 500 early in 2008, with offices in eight cities in the United States, England and China. In October 2008, Thelen's remaining partners voted to dissolve the firm. As reported by the Troubled Company Reporter on Sept. 22, 2009, Thelen LLP filed for Chapter 7 protection. The filing was expected due to the timing of a writ of attachment filed by one of Thelen's landlords, entitling the landlord to $25 million of the Company's assets. The landlord won approval for that writ in June 2009, but Thelen could void the writ by filing for bankruptcy within 90 days of that court ruling. Thelen, according to AM Law Daily, has repaid most of its debt to its lending banks. TITAN INTERNATIONAL: Moody's Rates $275MM Add-on Sr. Notes 'B1' --------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Titan International, Inc.'s proposed add-on offering of $275 million of senior notes due 2017. Note proceeds are expected to pay down $175 million of European credit facilities-related debt incurred as part of the acquisition of the remaining interest in Titan Europe in October of last year as well as provide additional balance sheet cash. Concurrently, Titan's B1 Corporate Family Rating was affirmed. The Speculative Grade Liquidity rating was raised to SGL-2 from SGL-3 based on the expected refinancing of the majority of Titan Europe-related short-term debt maturities in connection with the proposed refinancing. Titan's ratings outlook is stable. Ratings assigned: $275 million Senior Secured Notes due 2017, at B1 (LGD-4, 50%) Ratings affirmed (with updated LGD assessments): Corporate Family Rating, at B1 Probability of Default Rating, at B1-PD $200 million Senior Secured Notes due 2017, at B1 (LGD-4, 50% from LGD-4, 54%) Ratings upgraded: Speculative Grade Liquidity Rating, to SGL-2 from SGL-3 Outlook, stable Ratings Rationale: Titan's B1 CFR reflects credit metrics that are strong for the rating category which partially mitigates the highly cyclical nature of the company's business segments and its aggressive acquisition strategy. Credit metrics have benefited from strong performance in the company's agricultural and earthmoving segments. Moody's believes that the company's credit profile can withstand a moderate degree of earnings volatility as well as moderate leverage increase emanating from recent and potential near term acquisitions. Factors that could result in a weakening of credit metrics over the intermediate term include integration risk from the rapid increase in foreign-based acquisitions, particularly in Europe where macroeconomic conditions remain weak, and the high likelihood that additional acquisitions could result in higher debt-levels. Partially mitigating this concern is the continued strong U.S. farm income levels supporting the company's agricultural business domestically and the larger scale/diversity obtained from the company's wider global footprint. The stable outlook reflects Moody's expectation for the company to maintain credit metrics in line with a B1 CFR and a good liquidity profile. Titan's B1 senior secured notes rating reflects both the overall probability of default of Titan, reflected in the B1-PD PDR, and a loss given default of LGD-4, 50%. The senior secured notes are rated in line with the B1 CFR and constitute the majority of the company's debt structure. The short-term liquidity rating was upgraded to SGL-2 based on the anticipation that the proposed transaction will refinance the majority of Titan Europe-related short-term debt maturities. At December 31, 2012, most of the company's $145.8 million of reported short-term debt was comprised of Titan Europe debt. The company's good liquidity profile, reflected in the SGL-2 liquidity rating, is characterized by healthy cash balances, expectation of continued positive free cash flow generation over the next year and no meaningful near-term debt maturities proforma for the proposed transaction. The ratings could be downgraded if the company's liquidity or operating performance substantially deteriorates and/or the company shifts to a less conservative financial policy including completing a meaningful debt-financed acquisition such that total debt/EBITDA is expected to be sustained at over 4.5 times or EBITDA/interest at about 2.0 times. The ratings could be upgraded if the company demonstrates the ability to effectively integrate recent and planned acquisitions and Moody's comes to expect that debt/EBITDA will be maintained below 3.0 times and free cash flow to debt above 8% through economic cycles. The principal methodology used in rating Titan was the Global Heavy Manufacturing Rating Methodology published in November 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. Titan, headquartered in Quincy, IL is a manufacturer of wheels, tires and assemblies for off-highway vehicles serving the agricultural, earthmoving/construction and consumer end markets. Last twelve months ended December 31, 2012 revenues totaled $1.8 billion. Proforma for recent acquisitions, revenues approximate $2.4 billion. TXU CORP: 2017 Bank Debt Trades at 32% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 67.64 cents-on-the-dollar during the week ended Friday, March 1, 2013, a drop of 0.27 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2017, and carries Moody's 'Caa3' rating and Standard & Poor's 'CCC' rating. The loan is one of the biggest gainers and losers for the week ended March 1 among 238 widely quoted syndicated loans with five or more bids in secondary trading. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. The Company's balance sheet at Dec. 31, 2011, showed $44.07 billion in total assets, $51.83 billion in total liabilities, and a $7.75 billion total deficit. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. * * * In late January 2012, Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. TXU CORP: 2014 Bank Debt Trades at 28% Off in Secondary Market -------------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 72.18 cents-on-the-dollar during the week ended Friday, March 1, 2013, a drop of 0.77 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 350 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 10, 2014. The loan is one of the biggest gainers and losers for the week ended March 1 among 238 widely quoted syndicated loans with five or more bids in secondary trading. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. The Company's balance sheet at Dec. 31, 2011, showed $44.07 billion in total assets, $51.83 billion in total liabilities, and a $7.75 billion total deficit. Energy Future had a net loss of $1.91 billion on $7.04 billion of operating revenues for the year ended Dec. 31, 2011, compared with a net loss of $2.81 billion on $8.23 billion of operating revenues during the prior year. * * * In late January 2012, Moody's Investors Service changed the rating outlook for Energy Future Holdings Corp. (EFH) and its subsidiaries to negative from stable. Moody's affirmed EFH's Caa2 Corporate Family Rating (CFR), Caa3 Probability of Default Rating (PDR), SGL-4 Speculative Grade Liquidity Rating and the Baa1 senior secured rating for Oncor. EFH's Caa2 CFR and Caa3 PDR reflect a financially distressed company with limited flexibility. EFH's capital structure is complex and, in our opinion, untenable which calls into question the sustainability of the business model and expected duration of the liquidity reserves. UNI-PIXEL INC: To Present at ROTH Capital Conference on March 19 ---------------------------------------------------------------- UniPixel, Inc., has been invited to present at the ROTH Capital Partners 25th Annual Growth Stock Conference being held on March 17-20, 2013, at The Ritz Carlton in Dana Point, Calif. UniPixel President and CEO Reed Killion is scheduled to present on Tuesday, March 19, 2013, at 4:30 p.m. Pacific time, with one-on- one meetings held throughout the day as well as on Monday. He will be joined by Robert Petcavich, the company's senior vice president and chief technology officer. Management will discuss the Company's progress towards revolutionizing the touch screen market, including its recently signed agreement with a major PC maker. The presentation will be webcast live at http://wsw.com/webcast/roth27/unxl/,which will be available for replay in the investor relations section at www.unipixel.com. About Uni-Pixel Inc. The Woodlands, Tex.-based Uni-Pixel, Inc. (OTC BB: UNXL) -- http://www.unipixel.com/-- is a production stage company delivering its Clearly Superior(TM) Performance Engineered Films to the Lighting & Display, Solar and Flexible Electronics market segments. Uni-Pixel incurred a net loss of $9.01 million in 2012, as compared with a net loss of $8.56 million in 2011. The Company's balance sheet at Dec. 31, 2012, showed $14.71 million in total assets, $348,683 in total liabilities and $14.36 million in total shareholders' equity. VISUALANT INC: Amends Q4 Form 10-K to Update Risk Factors --------------------------------------------------------- Visualant, Incorporated, filed with the U.S. Securities and Exchange Commission an amendment to its quarterly report on Form 10-Q for the quarter ended Dec. 31, 2012, which was originally filed with the Securities and Exchange Commission on Feb. 11, 2013, for the sole purpose of updating the Company's Risk Factors that are included in Item 1A. No other changes have been made to the Form 10-Q. The Amendment does not reflect events that have occurred after the Feb. 11, 2013, filing date of the Form 10-Q, or modify or update the disclosures presented therein, except to reflect the amendment. A copy of the Amended Form 10-Q is available for free at: http://is.gd/XhbZYU About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant incurred a net loss of $2.72 million for the year ended Sept. 30, 2012, compared with a net loss of $2.39 million for the same period during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $4.69 million in total assets, $4.94 million in total liabilities, $38,490 in noncontrolling interest and a $280,232 total stockholders' deficit. PMB Helin Donovan, LLP, in Nov. 10, 2012, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has sustained a net loss from operations and has an accumulated deficit since inception which raise substantial doubt about the Company's ability to continue as a going concern. VITRO SAB: Reaches Accord With Dissenting Bondholders, Fintech -------------------------------------------------------------- Vitro, S.A.B. de C.V. said Monday it has entered into agreements that will enable the Company to definitively conclude its restructuring process. The agreements will end all litigation between Vitro and certain creditors in Mexico and the United States over the past two years, allowing Vitro to conclude its restructuring. The Company said it is confident that these agreements position Vitro to create more value for all its stakeholders, including employees, suppliers, creditors and shareholders, and in particular its customers, especially those in the U.S. Specifically, the agreements are a settlement agreement between Vitro and certain non-consenting creditors and other parties, and a separate agreement between Vitro and its financial partner, Fintech. "These agreements allow us to close the book on a challenging period for our Company, and focus entirely on our business and meeting our customers' needs," said Adrian Sada Gonzalez, Vitro's Chairman of the Board of Directors. He also commented, "Thanks to the valuable participation of our directors and the strong support of Fintech and its Director, David Martinez, we have reached a satisfactory conclusion in this matter and are ready to take advantage of the extraordinary opportunities that exist today for Vitro." David Martinez said, "The financial restructuring of Vitro's indebtedness has achieved its objective of creating low and sustainable leverage after a decade of high debt levels. We are excited to participate as a financial partner in this new stage and are fully confident that under the leadership of Adrian Sada and its focused management, the Company will capitalize on its outstanding growth prospects, including those in the North American market." The Company said it looks forward to executing its strategic plan for growth internationally, primarily in the U.S., which in 2012 accounted for sales of approximately US$446 million a year -- US$329 million for packaging and US$117 million in flat glass -- as well as focusing on strengthening customer relationships and seeking new business opportunities abroad. "Once we implement these agreements, the Board's mandate is clear: focusing on developing business lines, maintaining the healthy financial profile we have achieved and generating long-term value for our shareholders," said Hugo A. Lara Garcia, Vitro's CEO. The key terms of the settlement agreement are: 1. Fintech will purchase from the members of the Ad Hoc Group all of their holdings of bonds and pay to the Indenture Trustees and the Ad Hoc Group members an amount to cover fees, costs, and expenses incurred by the Indenture Trustees and the Ad Hoc Group members. 2. Certain of the settling parties have agreed to grant one another mutual releases, which cover, among other things, all claims related to the court proceedings and certain costs and fees. 3. The parties will consensually dismiss all suits, actions, appeals, and amparos between and among them in Mexico and in the United States. The key terms of the agreement which was reached with Fintech are: 1. Fintech will acquire the substantial majority of the bonds from the non-consenting creditors, will relinquish the legal actions against Vitro and its subsidiaries in the U.S. and Mexico associated with these bonds and will consent to the Concurso Plan that was approved by the Federal Courts of Mexico, in respect of these bonds and claims. These actions will increase the approval rate of such plan to almost 99% of the recognized creditors; 2. Vitro will cease collection actions in Mexico for costs and damages against the non-consenting creditors and drop the lawsuits it filed in the U.S., thus ending all legal proceedings against them; and 3. As consideration for the withdrawal of the awarded claims and for ending the associated legal proceedings related to the requests for involuntary bankruptcies in the U.S., Fintech will receive shares of a wholly owned subsidiary of Vitro, representing up to 13% of its equity (a participation that will be determined based upon its audited financial statements as of December 31, 2012), and a note for US$235 million with a two year maturity, which will be issued by such subsidiary. Claudio Del Valle, Vitro's Chief Restructuring Officer, said "Fintech's participation was crucial in order to establish the foundation for the agreements we have reached. It provided a means by which the non-consenting creditors could exit their positions, and allowed Vitro to gain a new partner in Fintech which we are sure will add value to the Company, as Fintech shares our vision for the business." "We appreciate the support the Federal Government of the United Mexican States has provided to Vitro in its restructuring," said Alejandro Sanchez Mujica, Vitro's Executive Legal President and General Counsel. The execution of the agreement with Fintech is subject to relevant government approvals, and the authorization of the different courts involved. The settlement agreement is subject to the authorization of the courts in Mexico and the United States, as well as certain other closing conditions. For further information, please contact: MEDIA INVESTOR RELATIONS MEXICO Roberto Riva Palacio Vitro, S.A.B. de C.V. Tel: + 52 (81) 8863-1661 E-mail: rriva@vitro.com U.S.A. Liz Cohen Tel: (212) 445-8044 E-mail: liz.cohen@webershandwick.com MEXICO Jesus N. Medina Vitro S.A.B. de C.V. Tel: + 52 (81) 8863-1730 E-mail: jnmedina@vitro.com U.S.A. Kay Breakstone /Barbara Cano Tel: (646) 452-2332 / 2334 E-mail: kbreakstone@breakstonegroup.com bcano@breakstonegroup.com About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. But an appellate court in Mexico reinstated the reorganization in April 2011. Following the reinstatement, Vitro SAB on April 14, 2011, re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754). The Vitro parent received sufficient acceptances of its reorganization by using the US$1.9 billion in debt owing to subsidiaries to vote down opposition by bondholders. The holders of US$1.2 billion in defaulted bonds opposed the Mexican reorganization plan because shareholders could retain ownership while bondholders aren't being paid in full. Vitro announced in March 2012 that it has implemented the reorganization plan approved by a judge in Monterrey, Mexico. In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. Blackstone Advisory Partners L.P. serves as financial advisor to the Committee. The U.S. Vitro companies sold their assets to American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., for US$55 million. U.S. subsidiaries of Vitro SAB are having their cases converted to liquidations in Chapter 7, court records in January 2012 show. In December, the U.S. Trustee in Dallas filed a motion to convert the subsidiaries' cases to liquidations in Chapter 7. The Justice Department's bankruptcy watchdog said US$5.1 million in bills were run up in bankruptcy and hadn't been paid. On June 13, 2012, U.S. Bankruptcy Judge Harlin "Cooter" Hale in Dallas entered a ruling that precluded Vitro from enforcing its Mexican reorganization plan in the U.S. Vitro's appeal is pending. In November, the U.S. Court of Appeals Judge Carolyn King ruled that Vitro SAB won't be permitted to enforce its bankruptcy reorganization plan in the U.S. She said that Vitro "has not shown that there exist truly unusual circumstances necessitating the release" preventing bondholders from suing subsidiaries. W.R. GRACE: Post-Confirmation Report for Quarter Ended Dec. 31 -------------------------------------------------------------- W.R. Grace & Co. and its debtor affiliates filed a post- confirmation quarterly summary report for the quarter ended Dec. 31, 2012, disclosing that at the end of the quarter, it had $1,064,232,174 in cash and disbursements totaling $1,164,487,108, composed of $563,532 for administrative claims of bankruptcy professionals and $1,163,923,576 for disbursements made in the ordinary course. A full-text copy of the Post-Confirmation Report for the quarter ended Dec. 31, 2012, is available for free at: http://bankrupt.com/misc/gracedec2012pcr.pdf 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: Libby Victims' Lawyers Seek $4-Mil. in Asbestos Deal ---------------------------------------------------------------- Lawyers for the asbestos victims in the Libby and Lincoln County areas are asking for more than $4 million as part of a settlement with W.R. Grace & Co., various news sources report. That money was intended to cover the victims' ongoing medical costs but a group of attorneys involved in the case, including some from the Kalispell area, said they put in more than 16,000 hours into the case. The money requested would add up to around 20% of the $19.6 million settlement that the company agreed to last year. A March 1 fairness hearing was held on the request, according to an Associated Press report. The Libby settlement, which reached last year, followed decades of asbestos exposure from a Grace mine outside the town of Libby that so far has killed an estimated 400 people and sickened more than 2,000, AP related. Asbestos dust from the mine once blanketed the town, and contaminated mine waste was widely used by residents and local officials in construction projects, as a soil supplement in home gardens and for other purposes, AP noted. AP, citing documents submitted to the court, said the plaintiffs' attorneys described their fee request as reasonable given the time and effort they put into lawsuits filed against Grace. Total costs and fees requested topped $5 million, but almost $1 million of that amount would be returned for the benefit of the victims, according to documents filed by the attorneys, AP said. The attorneys said they were entitled to up to 40 percent of their client's share of the settlement under their retainer contracts, but opted for a lesser percentage that would come from all qualifying victims and not just the attorneys' clients, AP added. AP said the attorneys are from three law firms: McGarvey, Heberling, Sullivan and McGarvey P.C. of Kalispell; Lewis, Slovak, Kovachich and Marr P.C. of Great Falls; and Murtha Cullina LLP, which has offices in multiple locations. A separate legal settlement between Libby victims and the state of Montana to cover damages for failing to intervene sooner included $14 million in attorney fees, AP noted. 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: Releases 2012 Annual Financial Report ------------------------------------------------- W.R. Grace & Co., on February 27, 2013, filed with the U.S. Securities and Exchange Commission its annual financial report for the year ended December 31, 2012, in Form 10-K. A summary of Grace's financial performance for the year ended December 31, 2012, compared with the prior year: * Net sales decreased 1.8% to $3,155.5 million, as improved base pricing and higher sales volumes were offset by lower rare earth surcharges and unfavorable currency translation. * Gross margin increased 80 basis points to 37.0%. * Adjusted EBIT increased 8.1% to $517.4 million. * Grace net income decreased 65.1% to $94.1 million or $1.23 per diluted share due to a $365.0 million non-cash adjustment to its asbestos-related liability. * Adjusted EBIT Return On Invested Capital was 36.3% on a trailing four quarters basis compared with 35.4% in the prior year. A full-text copy of Grace's 2012 Annual Report on Form 10-K is available for free at http://is.gd/Wm4lWk 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) WASHINGTON MUTUAL: High Court Asked to Consider Class Fee Notices ----------------------------------------------------------------- Evan Weinberger of BankruptcyLaw360 reported that a member of a $13 million class action settlement with Washington Mutual Inc. has asked the U.S. Supreme Court to determine whether class members should receive a detailed justification of proposed attorneys' fees and enough time to object to them before a judge can approve a settlement. The report related that in a petition for certiorari filed in February but made public Friday, counsel for Brenda S. Komar referred to a September 2011 $1.7 million attorneys' fee award approved by a federal court. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. Records filed Jan. 24, 2012, say that Washington Mutual Inc., former owner of the biggest U.S. bank to fail, has spent $232.8 million on bankruptcy professionals since filing its Chapter 11 case in September 2008. In March 2012, the Debtors' Seventh Amended Joint Plan of Affiliated, as modified, and as confirmed by order, dated Feb. 23, 2012, became effective, marking the successful completion of the chapter 11 restructuring process. The Plan is based on a global settlement that removed opposition to the reorganization and remedy defects the judge identified in September. The plan is designed to distribute $7 billion. Under the reorganization plan, WaMu established a liquidating trust to make distributions to parties-in-interest on account of their allowed claims. WESTINGHOUSE SOLAR: Alpha Capital Owns 9% Stake at Feb. 27 ---------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Alpha Capital Anstalt disclosed that, as of Feb. 27, 2013, it beneficially owns 2,168,936 shares of common stock of Westinghouse Solar, Inc., representing 9.99% of the shares outstanding. A copy of the filing is available at: http://is.gd/T8hiDZ About Westinghouse Campbell, Calif.-based Westinghouse Solar, Inc., is a designer and manufacturer of solar power systems and solar panels with integrated microinverters. The Company designs, markets and sells these solar power systems to solar installers, trade workers and do-it-yourself customers in the United States and Canada through distribution partnerships, the Company's dealer network and retail outlets. As reported in the TCR on April 16, 2012, Burr Pilger Mayer, Inc., in San Francisco, California, expressed substantial doubt about Westinghouse Solar'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 significant operating losses and has negative cash flow from operations. The Company's balance sheet at Sept. 30, 2012, showed $4.4 million in total assets, $5.6 million in total liabilities, and a stockholders' deficit of $1.2 million. YTB INTERNATIONAL: Files for Chapter 11 Bankruptcy -------------------------------------------------- Tim Logan at the St. Louis Post-Dispatch reported that YTB International's long run of troubles finally landed it in bankruptcy court Friday. The Wood River-based online marketing firm, which a few years ago ranked among the fastest-growing companies in the travel industry, filed for Chapter 11 bankruptcy protection in federal court in East St. Louis, the report said. The company plans to stay in business, the report added, citing YTB President and Chief Executive Andrew Cauthen as saying in a press release. According to the press release, YTB has lined up a lender's commitment for financing during bankruptcy, and it expects to emerge from bankruptcy "after a relatively short period of time." The Post-Dispatch related that in its heyday, in 2008, YTB brought nearly 20,000 online travel agents to its annual convention in St. Louis and reported $45 million in revenue in a quarter -- mostly from selling travel-sales websites to those agents. It employed hundreds and envisioned a big campus in Wood River and it sold an aspirational lifestyle of travel and leisure, fronted by a charismatic, father-son duo -- J. Lloyd Tomer and his son Scott -- who were YTB's chairman and CEO, respectively, and the largest shareholders in the publicly traded company, the report further related. The Post-Dispatch recalled that then-California Attorney General Jerry Brown sued, calling YTB a "gigantic pyramid scheme," and while the case was eventually settled, it has been downhill ever since. The settlement forced changes to YTB's business model and the bad publicity drove agents away, the report noted. Revenue fell sharply and the company had to sell off land and buildings to stay afloat. In the last four years, YTB has spiraled through board members and executives, tried out new business models and launched a merger only to later pull out, according to the report. Wood River, Ill.-based YTB International, Inc., is a marketer and provider of internet-based business solutions offering travel- related services, as well as shopping opportunities through 730 affiliate stores and 21 featured stores. It operates through its two wholly-owned subsidiaries and their respective subsidiaries: YTB, Inc., and YTB Travel Network, Inc. * Fitch Says Recent Store Closure Trend Expected ------------------------------------------------ Abercrombie & Fitch's recently announced store closures may be a harbinger of things to come for other retailers, the potential ramifications of which remain to be seen for U.S. CMBS, according to Fitch Ratings. Other retailers like Best Buy, Sears, J.C. Penney, Office Depot, and Barnes & Noble have also announced store closures. JC Penney, in particular, is of some concern for Fitch-rated CMBS, a sizeable percentage of which contain JC Penney as part of the collateral makeup. One development that may help stem the pain of recent store closures is that other retailers like Wal-Mart, Costco, Dollar Stores, and Forever 21 are actively expanding their store base and looking to expand. That said, the advent of online shopping as an alternative to traditional brick-and-mortar shopping may limit the ultimate need for store space, which in turn could have implications for CMBS over time. * Fitch Study Checks Impact of Industry Selection on Default ------------------------------------------------------------ Over the period 1980 to 2012, consistently avoiding the top five defaulting sectors results in a 60% reduction in the high yield market's average annual default rate -- from 4.6% to 1.8%, according to a new Fitch Ratings study. The top five defaulting sectors experienced an average annual rate of 13.9% over the 33-year period. The results both build a case for diversification and illustrate that industry selection is a critical component of managing portfolio default risk. Since 1980, roughly half of the 25 sectors tracked by Fitch have produced average annual default rates in a range of 3% - 5%, quite close to the long-term market average of 4.6%. However, there is strong variability over shorter horizons and this presents both risk and opportunity. Fitch examined industry default patterns over a period spanning three decades and $617 billion in defaults and assumed annual sector rotation. The top five defaulting sectors while representing an average 22% of market volume accounted for 70% of default volume. Industries are always in flux; therefore, historical behavior is not necessarily predictive of future performance. But much can be learned from the drivers of default risk. Poorly managed growth, overcapacity, product or business obsolescence, cyclicality -- all of these have had an impact. Fitch's new study titled 'Fitch U.S. High Yield Default Insight - The Impact of Industry Selection on Default Risk' also looks at implications for diversification. * Sequestration Manageable for US Public Finance Firms, Fitch Says ------------------------------------------------------------------ Fitch believes that sequestration will present both economic and fiscal challenges to state and local governments, hospitals, and other public sector issuers, which have already faced significant pressures in recent years. However, any credit impact will be isolated and no near-term rating actions are anticipated. We continue to believe that broader cuts that the federal government may implement as it confronts deficit reduction are the larger concern for public finance credits. The $85 billion in sequestration of federal spending authority is only 0.5% of U.S. GDP, although the economic impact will be felt more heavily in areas with higher presence of federal government employees, contractors, and related businesses. The cuts are split equally between domestic and defense spending in dollar terms but, in percentage terms, the cuts are higher on the defense side including civilian personnel and defense contractors. Fitch believes most areas with large federal government and/or military concentration are well-equipped to handle the potential impact. The possibility of the sequester has been known for some time and Fitch expects that state and local governments have assessed and, in some cases, developed contingencies to handle its effects as well as the risk of federal deficit reduction more broadly. However, some smaller localities that are heavily dependent on federal activity will be more vulnerable to the economic and revenue impact of the sequester than states and larger, more diverse, municipalities. In such cases, we will pay particular attention to how entities respond to maintain budget balance. Fitch believes the impact on economically sensitive revenue from reduced spending on federal programs, particularly the military in affected areas, will be greater than the direct impact of cuts to state and local governments. Because the largest federal aid programs to the states (including Medicaid) are exempt from the cuts, federal aid reductions to states and local governments are expected to be less than 1% of overall state and local revenues. Grants on special education, housing, and social service programs are not exempt. Cities with high populations of residents that take advantage of those programs may thus feel more impact. However, these grant levels are small compared to overall budgets and we expect some programs will be reduced or eliminated rather than backfilled. Direct federal funding makes up only about 4% of local government revenue in aggregate (according to data provided by the U.S. Census Bureau for fiscal 2010), so aid reductions will not have much direct budgetary impact. School districts derive 9% of their revenues from direct federal aid and may be more effected by cuts than other local governments. States themselves are likely to see little net fiscal impact, as Fitch believes most of their reductions will be passed through to local units. Hospitals are facing a 2% reduction in payments from Medicare due to sequestration. While Medicare comprises roughly 40% of hospital revenues, we believe the reduction should be manageable, as many use conservative assumptions surrounding governmental reimbursement in their budgeting process. During the sluggish economy, hospitals have been able to maintain solid operating performances due to strong expense control. However, cost-cutting opportunities are becoming rarer. Fitch says: "For the higher education sector, the main concern centers on the receipt of federal research grants. While a cut back in the level of receipts will pose some disruption, we expect the large research institutions that are the primary recipients of these grants to have the ability to absorb this potential funding reduction. "The U.S. Department of Housing and Urban Development's public housing capital fund budget, which provides for debt service on some Fitch-rated bonds, will be subject to the sequester. However, the reduction amounts are absorbable, given high coverage levels. "With respect to the U.S. transportation sector, sequestration is expected to have limited initial impact. Regarding airports, funding cuts are expected to yield travel delays as air traffic controllers and security personnel are furloughed. Should this scenario play out, passenger activity at airports could decline as travelers seek alternative options, resulting in decreased airport facility and related revenues. We believe it is unlikely that such revenue reductions would exceed downside scenarios already factored into current ratings." "At ports, dredging activities by the U.S. Army Corps of Engineers could be slowed, and grants for security and other projects could also be affected, although credit quality is not likely to be weakened. Regarding transit entities, the impact is expected to primarily be on capital projects that may be slowed as federal support declines. Fuel tax revenues that flow into the Federal Highway Trust Fund to support GARVEE bonds are not expected to be sequestered." * Utility Downgrades Accelerate Significantly in 2012, Fitch Says ----------------------------------------------------------------- Credit downgrades of utility companies accelerated significantly in 2012, reflecting tougher industry and macroeconomic conditions that could persist through 2013 in some regions, according to a new Fitch Ratings report. On a global basis, 40 Fitch-rated utilities were downgraded in 2012 compared to 24 in 2011, a 67% increase. Underlying factors include depressed power prices in the U.S., the adverse effects of the Eurozone crisis and tougher regulation across the Latin America and Asia-Pacific (APAC) regions. In the U.S., the outlook for utilities is stable, notwithstanding the meaningful rise in credit rating downgrades and likelihood of increasing headwinds in 2013. The negative outlook for competitive U.S. merchant generators is primarily a function of relatively low power price realizations and rising cost structures. The outlook for Latin American utilities in 2013 is stable, notwithstanding challenging environments in Brazil and Argentina. In the Eurozone, the outlook is negative for select regions including Iberia, Italy, Germany and the Nordic countries, reflecting secular industry changes and a less predictable regulatory/political environment. The outlook in the APAC is broadly stable with the exception of India. The full Fitch report is 'Global Utility Downgrades Accelerate in 2012'. * Budget Cuts Won't Impact Defense Industry in the Short Term ------------------------------------------------------------- With budget negotiations in gridlock, the effects of sequestration are about to become a reality for the US defense industry, Moody's Investors Service says in a new report, "Sequestration Impact to be Tempered, but Bigger Cuts Still to Come." Nonetheless, the near-term credit risk for most Moody's-rated defense contractors is expected to be modest. "Although sequestration would call for incremental defense spending cuts beyond those already implemented under the Budget Control Act of 2011, Moody's believes the cuts slated for this year will be tempered by legislative action following either a firm budget agreement or, more likely, a further extension of the continuing resolution," says Senior Vice President Russell Solomon. "We ultimately expect a compromise that limits the severity of incremental cuts to less than the 9% defined by the full sequester scheduled to take effect on 1 March." The more important risk for defense contractors relates to the ultimate magnitude and form of the spending cuts that will be included in any longer-term budget agreement, Solomon says. Moody's believes that steeper cuts are likely to be at least planned for by the 2014-15 timeframe, and that defense spending could fall to about $450 billion-$500 billion from peak levels approximating $700 billion per annum in 2010-2011 by the second half of this decade. Cuts of that magnitude would require more significant adjustments on the part of defense contractors, says Assistant Vice President Bruce Herskovics. "The companies that will do best in the new environment will be those with more diverse product and service offerings, while the stability of a company's capital structure and liquidity profile will also be important credit considerations during the transition period." In terms of ratings, Moody's expects the impact of sequestration to be relatively muted for the time being. The agency's analysis suggests up to one notch of downward pressure on the average rating of speculative-grade companies, and little impact on those of investment-grade companies in the foreseeable future. But one- off rating adjustments beyond this range cannot be ruled out, and companies will broadly need to adjust to the coming more austere budgetary environment, which will be characterized by a protracted period of declining military outlays in the longer term, Moody's warns. * Global Corporate Default Rate Stays Low in 2012, Says Moody's --------------------------------------------------------------- Against a macroeconomic backdrop of a continued economic uncertainty in Europe, corporate defaults among Moody's-rated issuers were up in 2012, the rating agency says in its 26th annual default study, "Corporate Default and Recovery Rates, 1920-2012." The study provides updated statistics on the default, loss and rating transition experience of corporate bond and loan issuers in 2012, as well as for 1920-2012 period. "World-wide, 58 Moody's-rated corporate issuers defaulted in 2012, compared with 37 in 2011," says Vice President and Senior Analyst Sharon Ou. "Along with increasing financial stress from the European sovereign debt crisis at the beginning of the year, defaults were elevated in the first quarter, when 23 companies defaulted, while in the subsequent quarters there were 11 or 13 defaults." Defaults in 2012 were led by the consumer industries and capital industries sectors, Ou says. Together they registered 23, or 40%, of the year's count. The former includes the beverage, food, tobacco, consumer goods, healthcare, and gaming and leisure industries, while the latter includes the automotive, capital equipment, chemicals, construction and building, forest products and paper, and metals and mining industries. Across regions, defaults remained concentrated in North America last year, where 44 issuers defaulted on $29.0 billion of debt. Elsewhere, nine defaults occurred in Europe, four in Latin America and one in Africa. "Last year's default count of 58 matched almost exactly our year- ago forecast of 63 defaults," says Managing Director of Credit Policy Research, Albert Metz. "The overall incidence of defaults remained low in 2012, due mainly to an extremely accommodative monetary environment allowing distressed borrowers to access the debt markets and refinance debt on favorable terms." Moody's global speculative-grade default rate ended 2012 at 2.6%, up from the year-end 2011 level of 1.9% and consistent with the rating agency's year-ago forecast of 2.9%. The default rate for all Moody's-rated corporate issuers rose to 1.3% at the end of 2012 from 0.9% at the end of 2011, which likewise was consistent with the agency's year-ago forecast of 1.4%. Looking ahead, Moody's speculative-grade default rate forecasting model predicts that the global rate will remain low in 2013, and finish the year at 2.7%. If realized, this will be just above last year's closing level of 2.6%, and well below the average of 4.7% since 1983. "We believe the monetary environment will remain accommodative in the near future," Metz says. "Financial market conditions have been relatively benign in recent months, and the downside risks facing the global economic recovery have diminished since the end of last year." * Banks Find More Wrongful Foreclosures Among Military Members -------------------------------------------------------------- Jessica Silver-Greenberg and Ben Protess, writing for The New York Times' DealBook blog, reported that the nation's biggest banks wrongfully foreclosed on more than 700 military members during the housing crisis and seized homes from roughly two dozen other borrowers who were current on their mortgage payments, findings that eclipse earlier estimates of the improper evictions. The DealBook report said Bank of America, Citigroup, JPMorgan Chase and Wells Fargo uncovered the foreclosures while analyzing mortgages as part of a multibillion-dollar settlement deal with federal authorities, according to people with direct knowledge of the findings. In January, regulators ordered the banks to identify military members and other borrowers who were evicted in violation of federal law. The analysis, which was turned over to regulators in recent days, provides the first detailed glimpse into the extent of wrongful foreclosures amid the collapse of the housing market, the DealBook related. While lenders previously acknowledged that they relied on faulty documents to push through foreclosures, the banks claimed borrowers were rarely evicted by mistake, including military personnel protected by federal law. That thesis, which underpinned the government's response to the financial crisis, helps explain why homeowners languished for years without relief, the DealBook noted. The revelations of more pervasive harm could provide fresh ammunition for Wall Street critics and prompt regulators to adopt a tougher stance, according to DealBook. The DealBook related that complaints that active military personnel and National Guard members were losing their homes while deployed in war zones set off national outrage and prompted Congressional hearings in 2011. In 2011, JPMorgan settled claims that it inappropriately foreclosed on 18 military service members and overcharged 6,000. Bank of America and Morgan Stanley also struck a pact with the Justice Department to settle claims they foreclosed on 178 military members between 2006 and 2009. * DOJ Takes Swipes at D.C. Circuit's Recess Appointment Ruling -------------------------------------------------------------- Mike Scarcella, writing for The American Lawyer's Legal Times blog, reported that the U.S. Department of Justice has offered its first extended, public analysis of the controversial court ruling in Washington that invalidated President Barack Obama's recess appointments to a federal labor board. The report said top DOJ officials have until March 8 to decide whether to ask the U.S. Court of Appeals to reconsider its conclusion that Obama overstepped his authority last year when he used his recess appointment power to install three members on the National Labor Relations Board. On Thursday night, DOJ, in a pending labor dispute in a federal appeals court in Philadelphia, offered a glimpse of legal arguments the government could make in asking the full D.C. Circuit to overturn the three-judge panel decision in Noel Canning v. NLRB, according to Legal Times. "The Noel Canning decision conflicts with nearly two centuries of Executive Branch practice and the decisions of three other Courts of Appeals, two of them sitting en banc," Beth Brinkmann, a top DOJ Civil Division appellate lawyer, said in the brief in the U.S. Court of Appeals for the Third Circuit, Legal Times cited. The ruling's constitutional conclusions, Brinkmann continued, "threaten a serious disruption of the separation of powers." The D.C. Circuit ruling, written by then Chief Judge David Sentelle, determined that the president can only make an appointment under "the recess" of the Senate, Legal Times related. That interpretation narrows the scope of when a president can use the recess appointment power. In the papers in the Third Circuit, Brinkmann said the word "the" doesn't carry the specificity the D.C. Circuit assigned to it, Legal Times said. * Say-On-Pay Following in Footsteps of M&A Suits ------------------------------------------------ Sue Reisinger, writing for The American Lawyer's Corporate Counsel blog, reported that a new type of securities lawsuit against corporations over say-on-pay advisory votes is so similar to shareholder suits filed over mergers and acquisitions that a new M&A litigation study includes a look at the say-on-pay suits. According to "Shareholder Litigation Involving Mergers and Acquisitions", (http://is.gd/egPwuc) the new suits are being filed by the same plaintiff law firms that file M&A actions, the report said. The shareholder litigants make the same claims about a company's faulty disclosure, and they pursue the same general strategy of seeking an injunction in hopes of getting a quick settlement, according to Robert Daines, a Stanford law and business professor and co-director of Stanford's Rock Center on Corporate Governance, who is co-author of the report released by Cornerstone Research. At least 24 of these lawsuits were filed last year and plaintiff law firms recently announced investigations of 33 more companies, the study states, according to Corporate Counsel. The Corporate Counsel related that the suits stem from the Dodd- Frank Wall Street Reform and Consumer Protection Act of 2010, which requires a say-on-pay advisory vote on executive compensation each year so the new litigation attacks the adequacy of compensation disclosures in annual proxy statements, including the increases in the number of stock shares authorized for equity compensation plans, explains the study. * RBS, Deutsche Bank Lose Appeal in Mortgage-Bond Lawsuit --------------------------------------------------------- David McLaughlin, writing for Bloomberg News, reported that Royal Bank of Scotland Group Plc, Deutsche Bank AG (DBK) and Wells Fargo & Co. (WFC) must face claims from a pension fund over $1.3 billion in mortgage bonds and potentially billions more, a federal appeals court ruled. The U.S. Court of Appeals in Manhattan on March 2 reversed a lower-court ruling that dismissed the case against the banks and NovaStar Mortgage Inc. over loans bundled into securities before the financial crisis, the Bloomberg report said. The claims by the New Jersey Carpenters Health Fund "permit us to draw the reasonable inference" that the banks are liable under federal securities laws, the appeals court said in its decision, according to Bloomberg. Bloomberg related that the New Jersey fund filed a class-action complaint over $1.3 billion in bonds sold to investors in 2007, according to court papers. The fund claimed that the securities were riskier than promised and that offering documents contained material misstatements and omissions about the loans backing them. RBS, Frankfurt-based Deutsche Bank and Wachovia, now part of San Francisco-based Wells Fargo, were underwriters, according to court papers. They failed to conduct adequate due diligence related to NovaStar's loan origination practices and compliance with underwriting guidelines, according to the complaint. The case is New Jersey Carpenters Health Fund v. Royal Bank of Scotland Group Plc (RBS), 12-1707, U.S Court of Appeals for the Second Circuit (Manhattan). * Large Companies With Insolvent Balance Sheets ----------------------------------------------- Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------ -------- ------- ABSOLUTE SOFTWRE ABT CN 121.7 (14.0) (11.3) 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 2,618.9 (882.4) 524.0 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 6,662.2 (1,567.4) (1,108.4) BERRY PLASTICS G BERY US 5,050.0 (313.0) 482.0 CABLEVISION SY-A CVC US 7,285.3 (5,730.1) (85.3) CAESARS ENTERTAI CZR US 27,998.1 (331.6) 905.3 CAPMARK FINANCIA CPMK US 20,085.1 (933.1) - CENTENNIAL COMM CYCL US 1,480.9 (925.9) (52.1) CHOICE HOTELS CHH US 510.8 (548.9) 57.3 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 44,550.0 (2,131.0) (4,998.0) DENNY'S CORP DENN US 324.9 (4.5) (27.2) DIRECTV DTV US 20,555.0 (5,031.0) 13.0 DOMINO'S PIZZA DPZ US 441.0 (1,345.5) 74.0 DUN & BRADSTREET DNB US 1,821.6 (765.7) (615.8) DYAX CORP DYAX US 55.5 (51.6) 33.4 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 902.5 (126.9) 36.4 FOREST OIL CORP FST US 2,201.9 (42.8) (101.2) FREESCALE SEMICO FSL US 3,171.0 (4,531.0) 1,186.0 GENCORP INC GY US 919.3 (388.8) 49.5 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 CN 1,510.8 (273.1) (287.1) JUST ENERGY GROU JE US 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 3,396.0 (1,777.0) 1,176.0 MARRIOTT INTL-A MAR US 6,342.0 (1,285.0) (1,298.0) 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) NATIONAL CINEMED NCMI US 810.5 (356.4) 129.6 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 151.1 (54.6) 87.9 NYMOX PHARMACEUT NYMX US 2.1 (7.7) (1.6) ODYSSEY MARINE OMEX US 33.6 (22.2) (25.4) ORBITZ WORLDWIDE OWW US 834.3 (142.7) (247.7) 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 513.6 (18.4) 77.6 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) SINCLAIR BROAD-A SBGI US 2,245.5 (52.4) (14.1) TAUBMAN CENTERS TCO US 3,268.5 (344.9) - TESORO LOGISTICS TLLP US 291.3 (78.5) 50.7 THERAPEUTICS MD TXMD US 3.5 (4.3) (2.2) THRESHOLD PHARMA THLD US 86.2 (44.1) 68.2 TOWN SPORTS INTE CLUB US 403.9 (55.5) (7.8) 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 1,218.6 (1,665.5) (229.9) WESTMORELAND COA WLB US 971.2 (252.7) 10.1 ********* 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 ***