/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130315.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, March 15, 2013, Vol. 17, No. 73 Headlines 12 CDT: Case Summary & 8 Unsecured Creditors 2700 JEROME AVE.: Case Summary & Unsecured Creditor 501 GRANT STREET: Can Obtain DIP Financing of Up to $85,000 A123 SYSTEMS: Cuts Estimated Creditor Recoveries By Half ABLECARE MEDICAL: Case Summary & 20 Largest Unsecured Creditors ABSORBENT TECHNOLOGIES: Section 341(a) Meeting Set for April 16 ADDCO LLC: Tiger Group to Conduct Sealed Bid Sale of Assets AHERN RENTALS: Seeks Approval of Work Letter on Exit Financing AJAX INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors AMERICAN AIRLINES: Requests More Time to File Reorganization Plan AMERICAN AIRLINES: Settles Antitrust Feud With Travelport ASARCO LLC: E.D. Mo. Court Stays Suit v. NL Industries et al. ATLANTIC & PACIFIC: Dist. Court Rules in Suit v. Pathmark, ASI AURORA USA: New US$250MM Senior Notes Get Moody's 'Caa1' Rating AXIALL CORP: Moody's Rates US$200-Mil. Secured Term Loan 'Ba1' BATH BRIDGEWATER: Judge Rejects Chapter 11 Plan BNP OIL & GAS: Appeal From Seashore Sale Approval Stayed BREAKWATER MARINA: Case Summary & 20 Largest Unsecured Creditors BYRD FOODS: Voluntary Chapter 11 Case Summary BYWATER PROPERTIES: Case Summary & Unsecured Creditor C.R. PEELE: Bankr. Court Enters Opinion on Bid to Dismiss DTC Suit C&H MECHANICAL: Case Summary & 20 Largest Unsecured Creditors CARRIBBEAN PETROLEUM: Injunction on Chartis Buyback Deal Denied CECIL BANCORP: Stegman & Company Raises Going Concern Doubt CENTRAL EUROPEAN: Voting Deadline on Exchange Moved to March 22 CENTRO COMPACTO: Case Summary & Unsecured Creditor CHEAPER PEEPERS: Voluntary Chapter 11 Case Summary CHRISTINE LARSEN: Bankruptcy Court Junks K. Preston Lawsuit CRYSTAL ROSE: Updated Case Summary & Creditors' Lists DEANNA ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors DECORO USA: Loses Bid for $560,000 Tax Refund DENSITY UTILITIES: Case Summary & 20 Largest Unsecured Creditors DESERT HOT: S&P Lowers Rating on 2006 & 2008 TABs to 'CCC+' DETROIT, MI: Michigan Expected to Announce Takeover of Finances DOLPHIN COVE: Voluntary Chapter 11 Case Summary GSC HOLDINGS: Case Summary & 3 Unsecured Creditors DORAL FINANCIAL: Reports $28.3-Mil. Net Income in 4th Qtr. 2012 DRI COMPANIES: Updated Case Summary & Creditors' Lists EASTMAN KODAK: Seeks Court Approval to Settle Rousselot Claims ENOVA MEDICAL: Case Summary & 20 Largest Unsecured Creditors EVERGLADES RE: S&P Gives Prelim. 'B(sf)' Rating to 2013-1 Notes FISKER AUTOMOTIVE: Founder & Chairman Steps Down FRANK PARSONS: International Paper's Response Deadline Extended GASCO ENERGY: Files Form 10-K, Incurs $22.2-Mil. Net Loss in 2012 GEOKINETICS INC: Confirmation of Prepack Plan Set for April 25 GEOKINETICS INC: Has Interim Order on $25MM DIP Loan GEOKINETICS INC: Wins Interim Approval of First Day Motions GEOKINETICS INC: Files Redacted Schedules Now, SOFAs Later GILBERT AUTO: Case Summary & 20 Largest Unsecured Creditors GOLD RESERVE: Updates Shareholders on U.S. Listing Status GROVES IN LINCOLN: Proposes Benchmark-Led Auction in May GROVES IN LINCOLN: Wells Fargo Allows Use of Cash Collateral GROVES IN LINCOLN: Wants to Assume Bonus Agreement With CFO GROVES IN LINCOLN: Case Summary & 20 Largest Unsecured Creditors H.J. HEINZ: S&P Rates $2.1-Bil. 2nd Lien Sr. Secured Notes 'BB-' HELLER EHRMAN: Status Conference on May 7 HB02WORKS LLC: Updated Case Summary & Creditors' Lists HIGH BANKS: Case Summary & Unsecured Creditor HOLLYWOOD BOULEVARD: Case Summary & 20 Largest Unsecured Creditors HOSTESS BRANDS: Bakers Union Fights Cake Buyers Over Jobs HOSTESS BRANDS: Says Justice Department Reviewing Flowers Deal HOSTESS BRANDS: Selects McKee Foods as Winning Bidder for Drake's HUNTER DEFENSE: Revenue Pressures Cue Moody's to Lower CFR to B3 J.F.B.C. LLC: Case Summary & Largest Unsecured Creditor JEFFERSON COUNTY, AL: Aims to File Chapter 9 Plan in Early June KARAM INC: Case Summary & 8 Unsecured Creditors LEE'S FOODSERVICE: Case Summary & 20 Largest Unsecured Creditors LEHMAN BROTHERS: Lands 'London Whale' Deposition in JPMorgan Row LLC CRAIG: Case Summary & 7 Unsecured Creditors LIGHTSQUARED INC: Wins Approval to Get Additional $5-Mil. DIP Loan LOCUST STREET: Voluntary Chapter 11 Case Summary MACCO PROPERTIES: U.S. Trustee Wants Case Converted to Chapter 7 MEDIPATTERN CORP: Enters Into MOU to Settle Outstanding Debt MERRILL COMMS: Moody's Removes Provisional Designation on B3 CFR MF GLOBAL: Wins Court Nod to Settle Intercompany Claims MF GLOBAL: Court Approves Supplements to Plan Outline MF GLOBAL: Judge Approves Accord with JPMorgan MILLER AUTOMOTIVE: Withdrawal Bid a Case of Forum Shopping MODERN PLASTICS: New Products Purchases $1.2-Mil. Mortgage Note MONITOR COMPANY: Has Until April 1 to Use Cash Collateral NACIO SYSTEMS: Court May Approve Release of $210,000 to NIG NTELOS HOLDINGS: S&P Retains 'BB-' CCR on CreditWatch Negative OCD LLC: Case Summary & 6 Largest Unsecured Creditors OLD COLONY: Can Access Wells Fargo Cash Collateral Until June 15 OYSTER LANDING: Case Summary & 11 Unsecured Creditors PALM BEACH PORT: Moody's Retains Stable Outlook and Ba1 Rating PATRIOT COAL: Seeks to Modify CBAs, Sues Peabody Energy PHILADELPHIA ENERGY: Moody's Assigns 'B1' Rating to US$500MM Loan PINNACLE AIRLINES: To Sell Engines, Aircraft Parts for $1.1-Mil. POMONA VALLEY: S&P Lowers Rating on Series 2002 Bonds to 'CCC' POWERWAVE TECHNOLOGIES: Committee Objects to Jones Day Release PROVINCE GRANDE: Case Summary & 20 Largest Unsecured Creditors PUERTO DEL REY: Luis R. Carrasquillo OK'd as Financial Consultant PUERTO DEL REY: Secured Creditor FirstBank Wants Case Dismissal RIO VISTA: Voluntary Chapter 11 Case Summary REVEL AC: CEO Resigns Weeks Before Expected Bankruptcy Filing REVSTONE INDUSTRIES: GM Opposes DiDonato as CRO over Ties with CEO SAVE MOST: Triggs & Reese OK'd as Accountant and Tax Professional SAVE MOST: Taps Lee R. Goldberg to Negotiate Settlement with SDCCU SEMCRUDE LP: No Rehearing in Cottonwood Case v. Ex-CEO Kivisto SOUTHERN AIR: Bankruptcy Court Confirms Reorganization Plan SPEEDWAY MOTORSPORTS: S&P Lowers Rating on 8.75% Notes to 'BB-' STAMP FARMS: Taps Miedema to Appraise 140-145 Irrigation Pivots STINGER WELDING: Voluntary Chapter 11 Case Summary STRADELLA INVESTMENTS: Plan Disclosures Hearing Moved to May 8 STRADELLA INVESTMENTS: R. Marschack Named Chapter 11 Trustee SUPERCONDUCTOR TECHNOLOGIES: Incurs $10.9-Mil. Net Loss in 2012 SURVEYMONKEY: S&P Assigns 'B' CCR & Rates $365MM Facilities 'B' SWISS CHALET: CPG Allowed Partial Discovery on Plan Carve-Out TENNECO INC: Fitch Raises Issuer Default Rating to 'BB+' TGAG LLC: Case Summary & 4 Largest Unsecured Creditors TRANS1 INC: PwC LLP Raises Going Concern Doubt TRAVELPORT LTD: Reports Financial Results for 4th Quarter 2012 TRIBUNE CO: S&P Assigns 'BB-' CCR & Rates $1.1BB Loan 'BB+' TRONOX LTD: Term Loan Increase No Impact on Moody's 'Ba3' CFR TRONOX LTD: S&P Affirms 'BB' CCR Following $200MM Add-On UNITED AIR: S&P Rates $1BB 5-Yr. Facility and $900MM Loan 'BB-' UNITED CONTINENTAL: Moody's Rates New Senior Debt Facility 'Ba2' VACHIRA PONGVITAYAPANU: Denied Chapter 7 Discharge of Debts VERIFONE INC: Poor Earnings Prompt Moody's to Review 'Ba3' CFR W.R. GRACE: Grace Catalysts Unit Announces Price Increase WATCO COS: S&P Assigns 'B' CCR & Rates $400MM Sr. Notes 'CCC+' ZACKY FARMS: Foster Farms Out of Creditors Committee ZACKY FARMS: Amends Bid to Tap King & Spalding as Counsel * Banks Bow to New York on Clawbacks * FASB Impairment Rule Could Hit U.S. Banks Reserves, Fitch Says * U.S. Public Finance Default Rate Remains Low in 2012, Fitch Says * U.S. Chamber Institute for Legal Reform Commends FACT Hearing * U.S. Foreclosure Filings Up 2% in February, RealtyTrac Says * Total Leverage Finance, High Yield Issuance Hit Record Levels * Deloitte Names Sheila Smith Restructuring Services Leader * WT Lee & Associates Says Foreclosure Settlement Insufficient * BOOK REVIEW: The Oil Business in Latin America: The Early Years ********* 12 CDT: Case Summary & 8 Unsecured Creditors -------------------------------------------- Debtor: 12 CDT, LLC 12 Cambridge Drive Trumbull, CT 06611 Bankruptcy Case No.: 13-50347 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Stephen P. Wright, Esq. GOLDMAN, GRUDER & WOODS, LLC 105 Technology Drive Trumbull, CT 06611 Tel: (203) 899-8900 Fax: (203) 899-8915 E-mail: swright@goldmangruderwoods.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 together with the petition, is available for free at http://bankrupt.com/misc/ctb13-50347.pdf The petition was signed by John J. Daley, III, managing member of Janick Company, LLC. 2700 JEROME AVE.: Case Summary & Unsecured Creditor --------------------------------------------------- Debtor: 2700 Jerome Ave. Realty Corp. 2700 Jerome Avenue Bronx, NY 10468 Bankruptcy Case No.: 13-10699 Chapter 11 Petition Date: March 10, 2013 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Sean H. Lane Debtor's Counsel: Albert H. Barkey, Esq. P.O. Box 1012 Cooper Station New York, NY 10276-1012 Tel: (212) 677-5776 Fax: (646) 219-3072 E-mail: ahbarkey@aol.com Scheduled Assets: $4,346,000 Scheduled Liabilities: $2,800,051 In its list of 20 largest unsecured creditors, the Company wrote only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Lawrence J. Berger, PC Attorney services $3,099 200 Madison Ave, Ste 1902 New York, NY 10016 The petition was signed by Carlos Abreu, president and secretary. 501 GRANT STREET: Can Obtain DIP Financing of Up to $85,000 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized 501 Grant Street Partners LLC to obtain postpetition financing in the form of a line of Credit of up to $85,000 from Theodore Fox or his designee. The outstanding amount due and owing pursuant to the Line of Credit will accrue interest at the rate of ten percent (10%) per annum. The Debtor agrees that it will use the advances made under the Line of Credit to pay ordinary, necessary, actual and reasonable allowed fees and expenses of its general insolvency counsel, the fees payable to the Office of the United States Trustee, and for no other purpose. Tge Debtor's counsel will retain in its client trust account $2,600 of the Line of Credit on account of OUST Fees. The aggregate amount of advances under the Line of Credit will become due and payable on March 29, 2013, unless earlier terminated upon the occurrence of certain events as described in the Order, including, among others, the approval in the Debtor's case of a disclosure statement describing any plan which does not provide for the payment in full of all indebtedness under the Line of Credit plus all interest accrued thereon and all other amounts payable to the DIP Lender, on the effective date of such plan. As security of all indebtedness under the Line of Credit, the DIP Lender is granted a first position lien on all assets of the Debtor's estate of any kind or nature whatsoever, and all proceeds, rents, or profits thereof, whether now existing or hereafter acquired. The DIP Lender's security interest in the Collateral will be subject only to senior, nonavoidable, valid, enforceable and perfected security interests and liens existing on the Petition Date, including the liens in favor of SA Challenger, Inc., or any of its predecessors, but only to the extent that such liens are senior, non-avoidable, valid, enforceable and perfected liens existing on the Petition Date. Additionally, all Indebtedness will be a Chapter 11 administrative expense in the Debtor's case pursuant to sections 503(b) and 507(a)(1) of the Bankruptcy Code; provided, however, such administrative claim will not extend to or include any recoveries or other proceeds of any transfers of any property or of any interest in any property of the Debtor avoided pursuant to sections 544, 545, 547, 548, 549, 550, 551, 553(b) or 724(a) o f the Bankruptcy Code. Except for any OUST Fees, all indebtedness of the DIP Lender will have priority under Sections 364(c)(1) of the Bankruptcy Code over all administrative expenses incurred in this case. About 501 Grant Street & Union Trust Building An involuntary Chapter 11 bankruptcy petition was filed against 501 Grant Street Partners LLC, based in Woodland Hills, California (Bankr. C.D. Calif. Case No. 12-20066) on Nov. 14, 2012. 501 Grant Street Partners owns the Union Trust Building in downtown Pittsburgh, Pennsylvania. It sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 12-23890) on Aug. 3, 2012, to avert a sheriff sale of the building. The August petition estimated under $50,000 in both assets and debts. In November 2012, U.S. Bankruptcy Judge Judith K. Fitzgerald dismissed 501 Grant Street Partners' Chapter 11 petition, paving for the sheriff sale of the Union Trust Building on Jan. 7, 2013. SA Challenger Inc., which acquired interest in the building's mortgage by U.S. Bank, has sought to foreclose on the Debtor's property. SA Challenger is seeking to collect $41.4 million. Earlier in November, at the lender's request, Judge Ward appointed the real estate firm CBRE to serve as receiver for the building, overseeing its operation and management until the sheriff sale takes place. The bankruptcy judge approved an involuntary Chapter 11 petition for 501 Grant, entering an order for relief on Dec. 13, 2012. The petitioning creditors are Allied Barton Security Services LLC, owed $960 for security services; Cost Company LP, $5,900 owed for masonry work; and MSA Systems Integration Inc., owed $2,401 for unpaid invoice. Malhar S. Pagay, Esq., at Pachulski Stang Ziehl & Jones LLP, represents the petitioning creditors. Attorneys at Levene, Neale, Bender, Yoo & Brill LLP represent the Debtor in the involuntary Chapter 11 proceeding. A123 SYSTEMS: Cuts Estimated Creditor Recoveries By Half -------------------------------------------------------- Lance Duroni of BankruptcyLaw360 reported that defunct battery maker A123 Systems Inc. on Tuesday slashed the projected returns for unsecured creditors under its liquidation plan by half, but also said it is challenging the flood of warranty and contract claims that led to the revision. The report related that in an amended disclosure statement filed in Delaware bankruptcy court, A123 cut the estimated recoveries for general unsecured creditors to 32.7%, down from 65%, two days after former top customer Fisker Automotive Inc. objected that the total claim and recovery numbers didn't add up. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designed, developed, manufactured and sold advanced rechargeable lithium-ion batteries and battery systems and provided research and development services to government agencies and commercial customers. A123 was the recipient of a $249 million federal grant from the Obama administration. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Brown Rudnick LLP and Saul Ewing LLP serve as counsel to the Official Committee of Unsecured Creditors. Prior to the bankruptcy filing, A123 had an agreement to sell an 80% stake in the business to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. When it filed for bankruptcy, the Debtors presented a deal to sell all assets to Johnson Controls Inc., subject to higher and better offers. At the auction in December 2012, most of the assets ended up being sold for $256.6 million to Wanxiang. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. A123 has filed a liquidating Chapter 11 plan designed to give holders of $143.75 million in subordinated notes a recovery of about 65%. General unsecured creditors with $124 million in claims are to have the same recovery. The plan provides for holders of $35.7 million in senior note claims to be paid in full. ABLECARE MEDICAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Ablecare Medical, Inc. 7798 Reading Road Cincinnati, OH 45237 Bankruptcy Case No.: 13-11030 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Southern District of Ohio (Cincinnati) Judge: Jeffery P. Hopkins Debtor's Counsel: Elliott Polaniecki, Esq. 9000 Plainfield Road Cincinnati, OH 45236 Tel: (513) 793-5999 Fax: (513) 793-4691 E-mail: e28p@aol.com Scheduled Assets: $4,408,059 Scheduled Liabilities: $3,826,638 A copy of the Company's list 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ohsb13-11030.pdf The petition was signed by Dinesh J. Martis, sole shareholder and president. ABSORBENT TECHNOLOGIES: Section 341(a) Meeting Set for April 16 --------------------------------------------------------------- A meeting of creditors in the bankruptcy case of Absorbent Technologies, Inc., will be held on April 16, 2013, at 1:30 p.m. at UST1, US Trustee's Office, Portland, Room 223. Creditors have until July 15 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. Absorbent Technologies Absorbent Technologies, Inc., filed a Chapter 11 petition (Bankr. D. Ore. Case No. 13-31286) on March 8, 2013, without citing a reason. David C. Moffenbeier signed the petition as CEO. Judge Trish M. Brown presides over the case. Gary U. Scharff, Esq., at the Law Office of Gary U. Scharff serves as the Debtor's counsel. The Beaverton, Oregon-based company develops, produces, and markets starch-based superabsorbent products and ingredients in the United States and internationally. It offers Zeba, a corn starch-based polymer that helps farmers grow bigger crops with less water. Placed near a plant's roots, Zeba serves as a Grape Nut-sized sponge that holds and distributes water as a plant needs it. The Debtor estimated assets and debts of at least $10 million. The Debtor has a manufacturing facility at 140 Queen Avenue SW, Albany, Oregon. Fluffco LLC and Ephesians Equity Group LLC own equity interests in privately held Absorbent Technologies. ADDCO LLC: Tiger Group to Conduct Sealed Bid Sale of Assets ----------------------------------------------------------- Tiger Group's Remarketing Services division is conducting a Sealed Bid Offering of assets of Addco, LLC, whose product lines included permanent dynamic message signs (DMS) and portable changeable message signs built for Intelligent Transportation System (ITS) and traffic control. The assets will be sold off in groups of 10 lots through a U.S. Bankruptcy Court-ordered sealed bid sale, with all bids due by 4:00 pm ET on March 21. Lots offered in the sealed bid lot catalog range from all assets to machinery and equipment; specific product lines; all of the company's inventory, including raw materials, components, finished goods and demo units; intellectual property, and various vehicles. Addco filed for voluntary Chapter 7 bankruptcy on January 11, 2013 in the U.S. Bankruptcy Court for the District of Delaware. Tiger is conducting the sale on behalf of Chapter 7 Bankruptcy Trustee George Miller. A preview of the assets being sold is being conducted, by appointment, at the 60-year-old company's 80,000- square-foot manufacturing facility, located at 240 Arlington Ave. East in St Paul. "We are working in cooperation with Addco's former management team to facilitate a sale comprised of lots that will appeal to competitors, dealers and distributors, and end-users," said Jeff Tanenbaum, president of Tiger Remarketing. "This process is designed to identify the highest and best bidders, while maintaining large enough lot packages to preserve enterprise opportunities. In other words, a bidder interested in servicing Addco's in-field equipment may only be interested in purchasing the company's parts inventory lots. By the same token, a company interested in stepping into Addco's shoes as a manufacturer could extend their bid to include the intellectual property and machinery and equipment lots. The sale will be awarded in consideration of the highest and best combination of bids." Mr. Tanenbaum added that the process includes a provision for a round of live bidding in the event that comparable bids for various lots are received from different parties. This phase would be conducted through a telephonic auction on March 25. Assets being sold include: -- Finished signs, message and character boards; -- An estimated $2.6 million inventory that includes replacement parts, components, sub-assemblies and raw materials for the company's full matrix signs, character signs and arrow boards, electrical components, printed circuit boards, metal stock, wire, cable, and more; -- Intellectual property, including domain name, patents, trademarks, and customer lists; and -- Manufacturing and assembly equipment from Addco's fully operable manufacturing facility, along with vehicles, material handling equipment, office furniture, network and office equipment. For more information about this sale, visit http://www.SoldTiger.comor call 800-758-8443, to speak with an auction team member. About Tiger Group Tiger Group -- http://www.TigerGroup.com-- provides asset valuation, advisory and disposition services to a broad range of retail, wholesale, and industrial clients. About Addco Addco, LLC is a St. Paul-based traffic safety and control equipment manufacturer. AHERN RENTALS: Seeks Approval of Work Letter on Exit Financing -------------------------------------------------------------- BankruptcyData reported that Ahern Rentals filed with the U.S. Bankruptcy Court a motion to enter into a work letter regarding exit financing and to pay the associated fees of Barclays Bank and Jefferies Finance as administrative expenses. The Debtors, BankruptcyData related, assert, "To obtain exit financing within the timeframe for emergence that the Debtor has targeted, and ensure that the exit financing it obtains is on the best possible terms, the Debtor has determined, in the exercise of its business judgment, to enter into the Work Letter with the Arrangers so that they can commence due diligence activities, assess potential terms and capitalization structures, determine the level of interest from potential lenders and engage counsel to perform legal and other due diligence and documentation, in all cases with respect to a potential Exit Financing Facility." About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- now offers rental equipment to customers through its 74 locations in Arizona, Arkansas, California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. In its schedules, the Debtor disclosed $485.8 million in assets and $649.9 million in liabilities. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. AJAX INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Ajax International Group LLC dba Taco Tico 13901 E. Gilbert Wichita, KS 67230 Bankruptcy Case No.: 13-10450 Chapter 11 Petition Date: March 8, 2013 Court: U.S. Bankruptcy Court District of Kansas (Wichita) Judge: Dale L. Somers Debtor's Counsel: Susan G. Saidian, Esq. Case, Moses, Zimmerman & Martin, P.A. 900 Olive Garvey Building 200 West Douglas Wichita, KS 67202 Tel: (316) 303-0100 Fax: (316) 265-8263 E-mail: sgsaidian@cmzwlaw.com - and ? William H. Zimmerman, Jr., Esq. Case, Moses, Zimmerman & Martin, P.A. 900 Olive Garvey Building 200 West Douglas Wichita, KS 67202 Tel: (316) 303-0100 Fax: (316) 265-8263 E-mail: whzbk@cmzwlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ksb13-10450.pdf The petition was signed by Mahmood Karim, CEO. AMERICAN AIRLINES: Requests More Time to File Reorganization Plan ----------------------------------------------------------------- Karen Jacobs, writing for Reuters, reported that American Airlines parent AMR Corp (AAMRQ.PK), which is planning to merge with US Airways Group (LCC.N), has asked a judge for another extension of its exclusive period to file a plan to exit bankruptcy. According to the Reuters report, the carrier and its unsecured creditors committee asked the U.S. Bankruptcy Court on Wednesday to extend the time during which creditors cannot pursue their own restructuring plans for the airline to May 29. Currently, American has until April 15 to file its reorganization plan. "The requested extensions are necessary in order to formulate, negotiate, and propose a Chapter 11 plan that implements the Merger," the carrier's filing said, Reuters cited. 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: Settles Antitrust Feud With Travelport --------------------------------------------------------- Dan Prochilo of BankruptcyLaw360 reported that American Airlines Inc. said Wednesday that it had settled its antitrust claims against airfare distributor Travelport Ltd., resolving its allegations that Travelport conspired with Orbitz Worldwide Inc. and other companies to block the now-bankrupt airline's attempt to create a competing online ticketing system. The report related that the arrangement calls for American Airlines' and Travelport's once-competing online systems to be integrated, enabling Travelport to still offer its customers access to American Airlines flights while allowing American Airlines to "merchandize its full line of products through Travelport." 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). ASARCO LLC: E.D. Mo. Court Stays Suit v. NL Industries et al. ------------------------------------------------------------- ASARCO LLC, a Delaware Corporation, Plaintiff, v. NL INDUSTRIES, INC., et al., Defendants, Case No. 4:11-CV-00864-JAR (E.D. Mo.), is a civil action brought by Asarco LLC under the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq., for contribution and cost recovery against these potentially responsible parties: * NL Industries, Inc., * Union Pacific Railroad Company, * St. Francois County Environmental Corporation, and * Delta Asphalt, Inc. Asarco filed for Chapter 11 bankruptcy on Aug. 9, 2005, and on Feb. 2, 2008, entered into a settlement agreement with the United States Environmental Protection Agency and the State of Missouri regarding its CERCLA-related liability at certain sites within the Southeast Missouri Mining District. The SEMO settlement was judicially approved and entered on May 12, 2008. Asarco paid approximately $80 million in settlement, which included response costs and natural resource damages. Asarco now seeks to recover monies it paid in its settlement with the United States and the State of Missouri regarding its environmental liability at the SEMO sites. NL, SFCEC, and Delta request the Court enter an order staying Asarco's claims until such time as the United States is able to make a final determination as to the remedy for all SEMO sites, natural resources damages are determined, and the United States' claims against them are fully resolved. Defendants assert that any other result will (1) require the District Court to speculate as to what action the government may take in the future, since the government has not made its final determinations; (2) require the government to be involved in expensive and voluminous discovery about potential future action it may take which will detract from the government's focus on remediating the SEMO Sites; and (3) expose the Defendants to inconsistent results and/or a double recovery -- one from Asarco, and one from the government -- all being inconsistent with CERLCA's statutory language. The Defendants also filed motions for summary judgment. Asarco opposes the Defendants' motions to stay, arguing that requiring it to wait for adjudication of its contribution claims will create a disincentive for PRPs to settle their CERCLA claims early, and is contrary to the stated policy goal of CERCLA Sec. 133(f). Moreover, if there is a significant delay, Asarco contends that the Defendants will seek to enter their own settlements with the government, which will give them contribution protection. Union Pacific argues that because it has never been identified as a PRP at any of the SEMO sites where Asarco has a contribution claim, it opposes any ruling on the motions to stay that would limit its right to engage in discovery on liability. Union Pacific does not, however, oppose a stay as between Asarco and any or all of the other Defendants. In a March 11, 2013 Memorandum and Order available at http://is.gd/AgPH4wfrom Leagle.com, District Judge John A. Ross found good cause to stay the action with respect to any apportionment or damages determination. While the Defendants request a limited stay of three years, they acknowledge this is an arbitrary time period. After consideration, Judge Ross stayed this matter until further Court order. The Court denied the Defendants' motions for summary judgment as premature in light of the stay ruling. The Court directed the parties to submit a joint proposed scheduling plan for discovery on the issue of liability and then set a scheduling/case management conference. About Asarco LLC Based in Tucson, Arizona, ASARCO LLC -- http://www.asarco.com/-- is an integrated copper mining, smelting and refining company. Grupo Mexico S.A. de C.V. is ASARCO's ultimate parent. ASARCO LLC filed for Chapter 11 protection (Bankr. S.D. Tex. Case No. 05-21207) on Aug. 9, 2005. Attorneys at Baker Botts L.L.P., and Jordan, Hyden, Womble & Culbreth, P.C., represented the Debtor in its restructuring efforts. On Dec. 9, 2009, Asarco Incorporated and Americas Mining Corporation's Seventh Amended Plan of Reorganization for the Debtors became effective and the ASARCO Asbestos Personal Injury Settlement Trust was created and funded with nearly $1 billion in assets, including more than $650 million in cash plus a $280 million secured note from Reorganized ASARCO. The Plan, which was confirmed both by the bankruptcy and district courts, reintegrated ASARCO LLC back to parent Grupo Mexico concluding the four-year Chapter 11 proceeding. ATLANTIC & PACIFIC: Dist. Court Rules in Suit v. Pathmark, ASI -------------------------------------------------------------- MacDonald Taylor filed a personal injury action on Dec. 16, 2011 against Pathmark Inc. and Advanced Snow and Ice Removal -- ASI -- arising out of a fall on the Pathmark's property. On May 4, 2012, ASI filed a third party complaint joining Grassman Landscape, Grassman & Son, and Grassman Landscape, Inc., as third party defendants. Before the Court is ASI's Motion for Summary Judgment, the Plaintiff's Response, as well as the Plaintiff's Motion for Leave to File First Amended Complaint, the Answer of Grassman to the Plaintiff's Motion for Leave to File an Amended Complaint, and ASI's Answer in Opposition to the Motion for Leave to File First Amended Complaint, together with the Plaintiff's Motion for Stay of the Pending Motion for Summary Judgment of the Defendant Advanced Snow and Ice Solutions, and the Responses of Grassman and ASI. In a March 11, 2013 Memorandum available at http://is.gd/hGAkYC from Leagle.com, Magistrate Judge David R. Strawbridge: -- granted the Plaintiff's Motion for Leave to File First Amended Complaint; -- denied the Plaintiff's Motion for Stay Pending Motion for Summary Judgment of ASI as Moot; and -- granted the Motion for Summary Judgment of ASI as to Count Two: Breach of Contract. The case is, MacDONALD TAYLOR, Petitioner, v. PATHMARK INC., et al., Respondents, Civil Action No. 11-7702 (E.D. Pa.). About Great Atlantic & Pacific Founded in 1859, Montvale, New Jersey-based Great Atlantic & Pacific is a supermarket retailer, operating under a variety of well-known trade names, or "banners" across the mid-Atlantic and Northeastern United States. A&P and its affiliates filed Chapter 11 petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010, in White Plains, New York. Before filing for bankruptcy in 2010, A&P operated 429 stores in eight states and the District of Columbia under the following trade names: A&P, Waldbaum's, Pathmark, Pathmark Sav-a-Center, Best Cellars, The Food Emporium, Super Foodmart, Super Fresh and Food Basics. A&P had 41,000 employees prior to the bankruptcy filing. In its petition, A&P reported total assets of $2.5 billion and liabilities of $3.2 billion as of Sept. 11, 2010. Paul M. Basta, Esq., James H.M. Sprayregen, Esq., and Ray C. Schrock, Esq., at Kirkland & Ellis, LLP, in New York, and James J. Mazza, Jr., Esq., at Kirkland & Ellis LLP, in Chicago, Illinois, served as counsel to the Debtors. Kurtzman Carson Consultants LLC acted as the claims and notice agent. Lazard Freres & Co. LLC served as the financial advisor. Huron Consulting Group served as management consultant. Dennis F. Dunne, Esq., Matthew S. Barr, Esq., and Abhilash M. Raval, Esq., at Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. The Bankruptcy Court entered an order Feb. 27, 2012, confirming a First Amended Joint Plan of Reorganization filed Feb. 17, 2012. A&P consummated its financial restructuring and emerged from Chapter 11 as a privately held company in March 2012. A&P sold or closed stores during the bankruptcy proceedings. It emerged from bankruptcy with 320 supermarkets. Among others, A&P sold 12 Super-Fresh stores in the Baltimore-Washington area for $37.83 million, plus the value of inventory. Thirteen other locations didn't attract buyers at auction and were closed mid- July 2011. Mount Kellett Capital Management LP, The Yucaipa Companies LLC and investment funds managed by Goldman Sachs Asset Management, L.P., provided $490 million in debt and equity financing to sponsor A&P's reorganization plan and complete its balance sheet restructuring. JP Morgan and Credit Suisse arranged a $645 million exit financing facility. AURORA USA: New US$250MM Senior Notes Get Moody's 'Caa1' Rating --------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Aurora USA Oil & Gas, Inc.'s proposed $250 million senior unsecured notes due 2020. Note proceeds will be used to fund its recent acreage acquisition in the Eagle Ford shale and associated capital expenditure requirements. The rating outlook is stable. "The full working interest acquired in the acreage adjacent to Aurora's non-operated acreage will give it the opportunity to operate the new acreage independent of Marathon Oil while increasing the proved reserves by 10%," commented Arvinder Saluja, Moody's Analyst. "However, the absolute debt goes from $395 million to $645 million with this acquisition on a pro forma basis." Issuer: Aurora USA Oil & Gas, Inc. Ratings assigned: $250 million Senior Unsecured Notes due 2020, Caa1 (LGD4, 61%) Ratings Unchanged: Corporate Family Rating, B3 Probability of Default Rating, B3-PD $365 million Senior Unsecured Notes due 2017, Caa1 (LGD4, 61%) Ratings Rationale: The Caa1 senior unsecured note rating reflects both the overall probability of default of Aurora, to which Moody's assigns a PDR of B3-PD, and a loss given default of LGD4-61%. The size of the senior secured revolver's priority claim relative to the senior unsecured notes results in the notes being rated one notch beneath the B3 Corporate Family Rating under Moody's Loss Given Default Methodology. The B3 CFR is supported by Aurora's strong full cycle metrics with production consisting of majority liquids, leverage which is expected to decline during 2013 assuming production grows in line with company expectations, the strong operational track record of Marathon Oil which is the operator of all of Aurora's current wells, a pro-forma cash balance and revolver availability large enough to fund the majority of its projected 2013 capital budget, and a large drilling inventory. The rating is restrained by concentration in a single field with a small number of wells on a relative basis. Aurora's position as a non-operating owner of minority interests in wells and acreage operated by Marathon has both positive and negative implications. Having a minority interest allows Aurora to diversify its drilling risk among a larger number of wells while benefitting from Marathon's strong operational track record. The arrangement also limits the control Aurora has over its capital spending budget. However, the new acreage will allow for discretion on capital allocation and the pace of development. The CFR assumes that Aurora will maintain adequate liquidity to fund its share of Marathon's drilling program and that production in the Sugarkane Field will grow in line with company expectations. Moody's could upgrade the ratings if Aurora achieves net proved developed reserves of at least 40 MMBOE and net average daily production in excess of 15 MBOE per day while maintaining debt to net proved developed reserves below $10 per BOE. Moody's could downgrade the ratings if Aurora fails to maintain adequate liquidity to fund its share of Marathon's drilling program, the production response to capital spending is not in line with company forecasts, or EBITDA / interest is expected to be below 2.5x on a quarterly run rate basis. The principal methodology used in this rating 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. Aurora USA Oil & Gas, Inc. owns minority non-operated interests in oil and gas wells and acreage in the Sugarkane Field within the Eagle Ford shale in Texas. Aurora is based in Perth, Australia. AXIALL CORP: Moody's Rates US$200-Mil. Secured Term Loan 'Ba1' -------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Eagle Spinco's $200 million secured term loan due 2017. ESC is a wholly-owned subsidiary of Axiall Corporation (formerly known as Georgia Gulf Corporation). The term loan was initially $279 million and was funded by a bank group led by Barclays Bank Plc in January 2013 to finance a portion of Georgia Gulf's merger with the chlor alkali and derivatives business of PPG Industries (Baa1 stable). Axiall recently drew on its revolver to pay down $79 million of the term loan, and the remaining $200 million is now being syndicated to investors. Moody's also affirmed Axiall's and Eagle Spinco's existing ratings including Axiall's SGL-1 Speculative Grade Liquidity rating. The outlook for Axiall and Eagle Spinco is stable. "We expect Axiall to repay this loan well before the maturity date as the company had over $200 million of cash as of December 31, 2012 and is expected to generate over $100 million of free cash flow in 2013," stated John Rogers, Senior Vice President at Moody's Investors Service. Ratings assigned: Eagle Spinco, Inc. Secured Term Loan due 2017 -- Ba1 (LGD2, 26%) Ratings affirmed: Axiall Corporation Corporate Family Rating at Ba2 Probability of Default Rating at Ba2-PD Speculative Grade Liquidity Rating at SGL-1 $450 Senior unsecured notes due 2023 at Ba3 (LGD5, 70%) Eagle Spinco, Inc. $688 million unsecured notes due 2021 at Ba3 (LGD5, 70%) Ratings Rationale: Axiall's Ba2 CFR reflects its position as one of the largest producers of chor alkali in North America after the merger with PPG's chlor alkali business, strong financial metrics (pro forma Debt/EBITDA of 2.6x and Retained Cash Flow/Net Debt of 29% based on 2012 results, including Moody's standard adjustments), conservative financial policies, the improvement in the company's vertical back integration and the expectation that Gulf Coast natural gas costs will provide a sustainable competitive advantage for exports. This term loan has guarantees from all of Axiall's and ESC's material domestic subsidiaries and a first lien on all assets except those assets supporting the company's $500 million asset based lending facility. The term loan has a second lien on the accounts receivables, inventory, and other assets supporting the ABL facility. Moody's expects Axiall will generate extremely strong financial metrics in 2013 with pro forma EBITDA of over $700 million and balance sheet debt of roughly $1.4 billion. Axiall will also have solid liquidity supported by the $500 million ABL facility that currently has less than $100 million of drawings. The key financial covenant in the ABL is a springing consolidated Fixed Charge Coverage Ratio of 1:1, once availability falls below $62.5 million. Axiall is not expected to approach the level of borrowing that would cause this covenant to be in effect. The outlook is stable. However, if the Aromatics and Building Products segments begin contributing greater than 20% of consolidated EBITDA, there could be some upside to the rating. A downgrade is unlikely, but could be possible if there were integration problems or a sustained weakening of credit metrics (over 3.5x Debt/EBITDA & less than 15% Retained Cash Flow/Debt). The principal methodology used in rating Axiall Corporation was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Axiall Corporation, headquartered in Atlanta, Georgia, is a producer of commodity chemicals including chlorovinyls (chlorine, caustic soda, vinyl chloride monomer, polyvinyl chloride resins and vinyl compounds), PVC fabricated products (pipe, siding, window profiles, moldings, etc.), and aromatics (cumene, phenol and acetone). In January 2013, Georgia Gulf Corporation merged with the chlor alkali and derivatives business of PPG Industries to form Axiall. The company expected to generate pro forma revenues of roughly $5 billion in 2013. BATH BRIDGEWATER: Judge Rejects Chapter 11 Plan ----------------------------------------------- Bankruptcy Judge Stephani W. Humrickhouse denied confirmation of Bath Bridgewater South, LLC's Chapter 11 plan. Pending before the Court is the matter taken under advisement in connection with the Court's Sept. 20, 2012 order, which approved the explanatory disclosure statement: specifically, whether creditor Capital Bank, NA has a deficiency claim, and if not, whether the Debtor's plan should be confirmed pursuant to the cramdown provisions of Sec. 1129(b) of the Bankruptcy Code. In a March 12, 2013 Order available at http://is.gd/X0r0NPfrom Leagle.com, the Court held that Capital does not have a deficiency claim so a cram down analysis has been undertaken, but the Debtor's treatment of Capital's second, smaller claim (account ending 1869) -- Claim #2 -- does not satisfy the fair and equitable test of Sec. 1129(b). For that reason, confirmation will be denied, but the Debtor will be given leave to amend the plan. Bath Bridgewater South, LLC, filed for Chapter 11 bankruptcy (Bankr. E.D.N.C. Case No. 11-06817) on Sept. 6, 2011. Judge Stephani W. Humrickhouse presides over the case. George M. Oliver, Esq., at Oliver Friesen Cheek, PLLC, 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 John W. Baldwin, member manager. An affiliate, Sailboat Properties LLC, filed for Chapter 11 petition (Bankr. E.D.N.C. Case No. 10-03718) on May 7, 2011. BNP OIL & GAS: Appeal From Seashore Sale Approval Stayed -------------------------------------------------------- On April 3, 2009, three major oil and gas service providers filed an involuntary petition (Bankr. S.D. Tex. Case No. 09-20206) against BNP Petroleum Corporation under Chapter 7 of the Bankruptcy Code. On August 5, 2009, BNP Petroleum moved to convert its case to Chapter 11, after which the Bankruptcy Court entered an order converting BNP Petroleum's case to Chapter 11. BNP Petroleum's affiliate, Texas-based BNP Oil & Gas Properties, Ltd. filed for Chapter 11 (Bank. S.D. Tex. Case No. 09-20612) on September 22, 2009. BNP Oil & Gas estimated its assets and debts at $1 million to $10 million as of the Petition Date. Judge Richard S. Schmidt presides over the case. On October 13, 2010, the Bankruptcy Court granted a motion to convert the Debtors' cases to Chapter 7 for cause and appointed Michael B. Schmidt as the Trustee of the Debtors' Chapter 7 estates. The BNP Petroleum and BNP Oil & Gas cases are jointly administered in the Bankruptcy Court. An appeal is before the U.S. District Court for the Southern District of Texas filed by Paul Black from the Bankruptcy Court's entry of a Final Sale Order approving the Joint Sale Motion and the Sale and Conveyance of Estates' Rights, Settlement Agreement, and Mutual Release between Toby Shor, Seashore Investments Management Trust, and 2004 GRAT and the Chapter 7 Trustee of the Debtors' estates. Mr. Black seeks to dissolve the Seashore Sale Agreement and substitute another agreement in its place. Seashore has moved to dismiss the appeal. Mr. Black then filed a motion to set aside the Seashore Sale Agreement with the Bankruptcy Court, which is actually a motion for relief from judgment or order under Federal Rule of Civil Procedure 60. The motion alleges the Bankruptcy Court's approval of the Seashore Sale Agreement was fraudulently obtained by Seashore. According to Mr. Black, if the Bankruptcy Court grants the relief requested in his Motion to Set Aside, then his appeal currently pending before the Court will be moot. As such, Mr. Black asks the Court to stay the appeal until such time that the Bankruptcy Court rules on his Motion to Set Aside. On February 27, 2013, Senior District Judge John D. Rainey granted Mr. Black's Motion to Abate Pending Ruling by the Bankruptcy Court, and stayed the appeal. If the Bankruptcy Court indicates that it will grant Mr. Black's Motion to Set Aside, Mr. Black will move the District Court for a remand of the case in order that the Bankruptcy Court may grant his motion, Judge Rainey said. If the Bankruptcy Court denies Mr. Black's Motion to Set Aside, the Parties will immediately notify the District Court, and the stay will be lifted, he added. The case before Judge Rainey is PAUL BLACK, et al., Appellants, v. MICHAEL B. SCHMIDT, Trustee, TOBY SHOR, SEASHORE INVESTMENTS MGMT. TRUST, & 2004 GRAT, Appellees, Civil Action No. 2:11-cv-258, (S.D. Tex.). A copy of the District Court's February 27, 2013 Memorandum Opinion & Order is available at http://is.gd/03zIrY from Leagle.com. BREAKWATER MARINA: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Breakwater Marina Inc. 5603 N. Waterfront Drive Tacoma, WA 98407 Bankruptcy Case No.: 13-41546 Chapter 11 Petition Date: March 10, 2013 Court: United States Bankruptcy Court Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: Nathan T. Riordan, Esq. RIORDAN LAW PS 600 Stewart St., Suite 1300 Seattle, WA 98101 Tel: (206) 903-0401 E-mail: nate@riordan-law.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/wawb13-41546.pdf The petition was signed by Michael Marchetti, president. BYRD FOODS: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Byrd Foods of Virginia, Inc. P.O. Box 2638 Plant City, FL 33564 Bankruptcy Case No.: 13-03069 Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Eastern Shore Properties, Inc. 13-bk-03070 Stellaro Bay, Inc. 13-bk-03071 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Scott A. Stichter, Esq. STICHTER, RIEDEL, BLAIN & PROSSER 110 E. Madison Street, Suite 200 Tampa, FL 33602-4700 Tel: (813) 229-0144 Fax: (813) 229-1811 E-mail: sstichter.ecf@srbp.com Byrd Foods of Virginia's Estimated Assets: $1,000,001 to $10,000,000 Byrd Foods of Virginia's Estimated Debts: $10,000,001 to $50,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petitions were signed by Batista J. Madonia, president. Affiliates that filed separate Chapter 11 petitions: Petition Debtor Case No. Date ------ -------- ---- Circle M Ranch, Inc. 13-2896 03/06/13 East Coast Brokers & Packers, Inc. 13-2894 03/06/13 Madonia, Batista J. and Evelyn M. 13-2895 03/06/13 Oakwood Place, Inc. 13-2898 03/06/13 Ruskin Vegetable Corporation 13-2897 03/06/13 BYWATER PROPERTIES: Case Summary & Unsecured Creditor ----------------------------------------------------- Debtor: Bywater Properties, LLC 167 Massanetta Springs Road Harrisonburg, VA 22801 Bankruptcy Case No.: 13-50296 Chapter 11 Petition Date: March 8, 2013 Court: U.S. Bankruptcy Court Western District of Virginia (Harrisonburg) Judge: Rebecca B. Connelly Debtor's Counsel: Hannah White Hutman, Esq. HANNAH W. HUTMAN, PLLC 64 W. Water Street Harrisonburg, VA 22801 Tel: (540) 437-2970 Fax: (540) 437-2972 E-mail: hannah@hutmanlaw.com Scheduled Assets: $892,700 Scheduled Liabilities: $1,401,649 The petition was signed by James Watson, member/manager. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Business Finance Group 167 Massanetta $600,000 3930 Pender Drive, Suite 300 Springs Road Fairfax, VA 22030 Harrisonburg, VA 22801 C.R. PEELE: Bankr. Court Enters Opinion on Bid to Dismiss DTC Suit ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of North Carolina has issued an opinion on a motion to dismiss a breach of contract complaint entitled C.R. PEELE CONSTRUCTION CO., INC., PLAINTIFF, v. DTC ENGINEERS & CONSTRUCTORS, LLC, THE HANOVER INSURANCE COMPANY, DEFENDANTS, Adv. Proc. No. 12-00138-8-RDD, (Bankr. E.D.N.C.). C.R. Peele got involved in a first-tier subcontract on a federal construction project in 2008. DTC Engineers & Constructors, LLC, was the general contractor on the project, and The Hanover Insurance Company acted as the project's surety pursuant to a construction payment bond. The Plaintiff asserted it worked on the federal project, pursuant to a subcontract agreement, from November 2008 to September 2009. It alleged that $256,783.35 in properly invoiced progress payments remains unpaid. In its complaint, the Plaintiff asserted breach of contract against DTC and seeks relief in the form of restitution, quantum meruit, and unjust enrichment. It also asserts breach of the payment bond against Hanover. In response, the Defendants maintained that the Bankruptcy Court lacks subject matter jurisdiction. In a March 11, 2013 Opinion, Judge Randy D. Doub found that the substance of the Plaintiff's Complaint is insufficiently related to Plaintiff's plan of reorganization. The Plaintiff also did not meet its burden in convincing the Bankruptcy Court that the required subject matter jurisdiction exists for the Bankruptcy Court to hear the matter, the judge said. Hence, the Bankrupty Court no longer retains the necessary "related to" jurisdiction to adjudicate this adversary proceeding on the merits. The Bankruptcy Court allows the Plaintiff 30 days from the entry of its March 11 order to file with the U.S. District Court for the Eastern District of North Carolina a Motion to Withdraw the Reference pursuant to 28 U.S.C. Sec. 157(d) and to set forth the subject matter jurisdictional basis for the matter to be heard by the District Court. If no Motion to Withdraw the Reference is filed within 30 days of the March 11 order, the adversary proceeding will be dismissed, Judge Doub ordered. A copy of Judge Doub's March 11 Opinion is available at http://is.gd/aApbGdfrom Leagle.com. About C.R. Peele C.R. Peele Construction Co., Inc., is in the business of construction projects. The Company filed a Chapter 11 bankruptcy petition (Bankr. E.D. N.C. Case No. 10-05232) on June 30, 2010, and confirmed a plan of reorganization on April 18, 2012. C&H MECHANICAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: C&H Mechanical, Inc. 1033 North Delsea Drive Clayton, NJ 08312-1007 Bankruptcy Case No.: 13-15095 Chapter 11 Petition Date: March 12, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Camden) Judge: Judith H. Wizmur Debtor's Counsel: Edmond M. George, Esq. OBERMAYER, REBMANN, MAXWELL & HIPPEL, LLP 1617 JFK Boulevard, Suite 1900 Philadelphia, PA 19103 Tel: (215) 665-3140 Fax: (215) 665-3165 E-mail: edmond.george@obermayer.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/njb13-15095.pdf The petition was signed by Thomas J.P. Hugues, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Thomas J.P. Hugues 13-15122 03/12/13 CARRIBBEAN PETROLEUM: Injunction on Chartis Buyback Deal Denied --------------------------------------------------------------- Intertek USA, Inc. failed to convince the Delaware bankruptcy court to enjoin distribution of funds in an insurance policy buyback settlement in the bankruptcy cases of Caribbean Petroleum Corporation, et al. Intertek USA, one of the co-defendants with the Debtors in an October 2009 explosion incident-related litigation, is challenging a settlement between the Debtors and its insurer, Chartis Insurance Company. The Court-approved Settlement provides that Chartis bought back the policy it issued to the Debtors for $24 million. Intertek is insistent that the terms of the Buyback Order, as well as the Puerto Rican statute, require the Settlement Funds to be distributed only to Tort Claimants. Intertek has moved to enforce its interpretation of the Buyback Order, and has also moved to enjoin distribution of the Settlement Funds under an adversary case captioned INTERTEK USA, INC., Plaintiff, v. CARIBBEAN PETROLEUM CORPORATION, CARIBBEAN PETROLEUM REFINING, L.P., GULF PETROLEUM REFINING (PUERTO RICO) CORPORATION, FTI CONSULTING, INC., AS LIQUIDATING TRUSTEE, Defendants, Adv. Proc. No. 12-51001(KG) (Bankr. D. Del.). The Bankruptcy Court "finds that Intertek's arguments, while skillful advocacy, are neither persuasive nor timely," Judge Kevin Gross said in a March 11, 2013 Memorandum Opinion, a copy of which is available at http://is.gd/MPkRfrfrom Leagle.com. The Court denied Intertek's Injunction Motion on the settlement funds, saying that "the relief is not in the public interest because it would place finality of plan confirmation at risk and the uncertainty would indeed be disruptive of the bankruptcy process." About Caribbean Petroleum San Juan, Puerto Rico-based Caribbean Petroleum Corporation, aka CAPECO, owns and operates certain facilities in Bayomon, Puerto Rico, for the import, offloading, storage and distribution of petroleum products. Caribbean Petroleum sought Chapter 11 protection (Bankr. D. Del. Case No. 10-12553) on Aug. 12, 2010, nearly 10 months after a massive explosion at its major Puerto Rican fuel storage depot virtually shut down the company's operations. The Debtor estimated assets of US$100 million to US$500 million and debts of US$500 million to US$1 billion as of the Petition Date. Affiliates Caribbean Petroleum Refining, L.P., and Gulf Petroleum Refining (Puerto Rico) Corporation filed separate Chapter 11 petitions on Aug. 12, 2010. John J. Rapisardi, Esq., George A. Davis, Esq., Peter Friedman, Esq., and Zachary H. Smith, Esq., at Cadwalader, Wickersham & Taft LLP, in New York, serve as lead counsel to the Debtors. Mark D. Collins, Esq., and Jason M. Madron, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, serve as local counsel. The Debtors' financial advisor is FTI Consulting Inc. The Debtors' chief restructuring officer is Kevin Lavin of FTI Consulting Inc. Kurtzman Carson Consultants LLC serves as the noticing, claims and balloting agent to the Debtors. In December 2010, the Debtor won bankruptcy court approval to sell its business to Puma Energy International for US$82 million. Puma obtained Capeco's entire retail network, which consists of 157 locations, gasoline, diesel and other fuel storage facilities as well as undeveloped land and a private deep water jetty. The Fourth Amended Joint Plan of Liquidation for Caribbean Petroleum and its debtor affiliates became effective on June 3, 2011. CECIL BANCORP: Stegman & Company Raises Going Concern Doubt ----------------------------------------------------------- Cecil Bancorp, Inc., filed on March 8, 2013, its annual report for the year ended Dec. 31, 2012. Stegman & Company expressed substantial doubt about Cecil Bancorp's ability to continue as a going concern, citing the Company's elevated level of nonperforming assets and recurring operating losses. The Company reported a net loss of $20.3 million on $12.4 million of net interest income in 2012, compared with a net loss of $4.7 million on $13.5 million of net interest income in 2011. The Company's balance sheet at Dec. 31, 2012, showed $439.8 million in total assets, $425.7 million in total liabilities, and stockholders' equity of $14.1 million. A copy of the Form 10-K is available at http://is.gd/JfEzDm Elkton, Maryland-based Cecil Bancorp, Inc., is the holding company for Cecil Bank. The Bank conducts its business through its main office in Elkton, Maryland, and branches in Elkton, North East, Fair Hill, Rising Sun, Cecilton, Aberdeen, Conowingo, and Havre de Grace, Maryland. CENTRAL EUROPEAN: Voting Deadline on Exchange Moved to March 22 --------------------------------------------------------------- Central European Distribution Corporation on March 13 disclosed that CEDC'S subsidiary, CEDC Finance Corporation International, Inc., has extended the Consent Fee Deadline and the Early Voting Deadline in the Consent Solicitation relating to CEDC FinCo's Senior Secured Notes due 2016 from 5:00 p.m. EDT on March 14, 2013, to 5:00 p.m. EDT on March 22, 2013. CEDC FinCo is conducting an exchange offer for its outstanding 2016 Notes as described in the amended Offering Memorandum, date March 8, 2013, filed as an exhibit to the Tender Offer Statement on Schedule TO filed with the Securities and Exchange Commission on March 8, 2013. CEDC and CEDC Finco are also soliciting consents to a pre-packaged chapter 11 plan of reorganization that is included with the offering materials related to the exchange offer, and CEDC is conducting an exchange offer with respect to its Senior Notes due 2013. In connection with the exchange offer for the 2016 Notes, CEDC FinCo is soliciting consents for certain waivers and amendments under the indenture that governs the 2016 Notes as described in the Offering Memorandum. Under the terms of the consent solicitation, holders of 2016 Notes who deliver a consent by the Consent Fee Deadline upon the terms and conditions of the solicitation (including the condition that the consents of holders of at least 90% of the principal amount of the outstanding 2016 Notes are obtained by the Consent Fee Deadline) will receive a consent fee equal to 0.50% of the principal amount of 2016 Notes in respect of which consents are delivered. The Consent Fee Deadline and the Early Voting Deadline are each hereby extended to 5:00 p.m. EDT on March 22, 2013. The expiration date of the exchange offers and consent solicitation and the voting deadline (11:59 p.m. EDT on March 22)(11:2013) has not been changed. The exchange offers contemplate a financial restructuring that will reduce CEDC's and CEDC FinCo's debt by up to approximately $635 million. The Company believes that a successful restructuring will improve its financial strength and flexibility and enable it to focus on maximizing the value of its strong brands and market position. The restructuring is expected to have no effect on CEDC's operations in Poland, Russia, Hungary or Ukraine, all of which will continue doing business as usual. Obligations to all employees, vendors, and providers of credit support lines in Poland, Russia, Hungary and Ukraine will be honored in the ordinary course of business without interruption. The Company believes that its subsidiaries acting in Poland, Russia, Hungary and Ukraine have sufficient cash and resources on hand to meet all such obligations. 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 US$1.98 billion in total assets, US$1.73 billion in total liabilities, US$29.44 million in temporary equity, and US$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 US$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. CENTRO COMPACTO: Case Summary & Unsecured Creditor -------------------------------------------------- Debtor: Centro Compacto & Body Shop, Inc. P.O. Box 359 Aguada, PR 00602 Bankruptcy Case No.: 13-01890 Chapter 11 Petition Date: March 12, 2013 Court: U.S. Bankruptcy Court District of Puerto Rico (Old San Juan) Debtor's Counsel: Alberto O. Lozada Colon, Esq. Bufete Lozada Colon P.O. Box 430 Mayaguez, PR 00681-430 Tel: (787) 833-6323 E-mail: alberto3@coqui.net Scheduled Assets: $1,002,000 Scheduled Liabilities: $916,000 The petition was signed by Armando Lorenzo Quinones, president. The Company's list of its largest unsecured creditors filed with the petition contains only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ IRS -- $40,000 P.O. Box 7346 Philadelphia, PA 19101-7346 CHEAPER PEEPERS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Cheaper Peepers of New York - MD IV Inc 825 East Gate Boulevard Garden City, NY 11530 Bankruptcy Case No.: 13-71194 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Eastern District of New York (Central Islip) Judge: Alan S. Trust Debtor's Counsel: Richard E. Schrier, Esq. SCHRIER, FISCELLA & SUSSMAN LLC 825 E. Gate Blvd., Suite 320 Garden City, NY 11530 Tel: (516) 739-8000 The Debtor did not file a list of its largest unsecured creditors together with its petition. CHRISTINE LARSEN: Bankruptcy Court Junks K. Preston Lawsuit ----------------------------------------------------------- Bankruptcy Judge Alan Jaroslovsky dismissed with prejudice the adversary complaint captioned KIMBERLY PRESTON, Plaintiff(s), v. CHRISTINE RENEE LARSEN, Defendant(s), A.P. Case No. 11-1189 (Bankr. N.D. Cal.). Christine Renee Larsen filed for bankruptcy under Chapter 11 on Sept. 29, 2007 (Bankr. Ct. N.D. Cal. Case No. 07-11234), to reorganize her affairs involving services to be rendered for a planned subdivision. The Debtor confirmed a plan in May 2008 whereby she, through Pacific Sunset Development LLC, would complete the subdivision as a means of paying her creditors. After the Debtor confirmed her plan in 2008, consulting engineers known as Ombsberg & Preston under Kimberly Preston's leadership began work on the subdivision. In 2009, the Debtor signed a $120,857 promissory note in exchange for a release of a mechanic's lien on the subdivision. After the the Debtor converted her bankruptcy into a Chapter 7 proceeding in March 2011, Ms. Preston filed her complaint saying she has a claim against the Debtor which is not dischargeable pursuant to Sec. 523(a) of the Bankruptcy Code due to the Debtor's alleged fraud. Ms. Preston rests her argument on the theory that Ms. Larsen committed fraud by not volunteering the fact that she had filed a Chapter 11. In his ruling, Judge Jaroslovsky said "failure to mention a pending bankruptcy -- let alone one filed years before and with a confirmed plan -- cannot, as a matter of law, be the basis for rendering a debt nondischargeable." A copy of Judge Jaroslovsky's March 8, 2013 Memorandum Decision is available at http://is.gd/8yjIj9from Leagle.com. CRYSTAL ROSE: Updated Case Summary & Creditors' Lists ----------------------------------------------------- Lead Debtor: Crystal Rose Colorado, Inc. 636 Lookout Mountain Road Golden, CO 80401 Bankruptcy Case No.: 13-13419 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: A. Bruce Campbell Debtors' Counsel: Edward Levy, Esq. ATLAS LAW FIRM, P.C. 3900 E. Mexico Ave. Suite 700 Denver, CO 80210 Tel: (303) 481-6350 Fax: (303) 845-9221 E-mail: bknotices@debtbusterslaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that simultaneously filed separate Chapter 11 petition: Debtor Case No. ------ -------- Crystal Rose Management, Inc. 13-13420 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 The petitions were signed Jay Byerly, president. A. A copy Crystal Rose Colorado's list of nine unsecured creditors is available for free at http://bankrupt.com/misc/cob13-13419.pdf B. A copy of Crystal Rose Management's list of eight unsecured creditors is available for free at http://bankrupt.com/misc/cob13-13420.pdf DEANNA ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Deanna Enterprises, Inc. 333 NE 24th Street, Suite # 311 Miami, FL 33137 Bankruptcy Case No.: 13-15277 Chapter 11 Petition Date: March 8, 2013 Court: U.S. Bankruptcy Court Southern District of Florida (Miami) Judge: Robert A. Mark Debtor's Counsel: Timothy L. Grice, Esq. LAW OFFICE OF TIMOTHY L. GRICE, P.A. 319 Clematis Street, #213 West Palm Bch, FL 33401 Tel: (561) 802-4474 E-mail: TGrice@TimothyGriceLaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flsb13-15277.pdf The petition was signed by Veldrin Freemon, manager member. DECORO USA: Loses Bid for $560,000 Tax Refund --------------------------------------------- DeCoro USA, Ltd., filed papers in bankruptcy court asserting that it is entitled to a refund in the aggregate amount of $560,167.77 from losses incurred during the 2008 tax year. The Debtor requests that the court enter an order pursuant to 11 U.S.C. 505(a) determining that a tax refund is due, and ordering the Internal Revenue Service to turn over the $560,167.77 refund pursuant to 11 U.S.C. Sec. 542(b). The IRS contends in its response that the Court does not have jurisdiction to order such relief because the Debtor did not "properly request" the refund, as required by 11 U.S.C. Sec. 505(a)(2)(B)(i). The IRS further argues that the Debtor's Motion is procedurally defective because it should have been brought as an adversary proceeding. In a March 11, 2013 Memorandum Opinion available at http://is.gd/aK8nNlfrom Leagle.com, Bankruptcy Judge William L. Stocks ruled that the series of writings identified by the Debtor are insufficient to constitute an informal claim for refund because the writings, considered alone or together, do not advise the IRS of the nature of the a refund claim by the Debtor. Furthermore, the Plan of Reorganization asserted the Debtor's right to refund based on projected losses from the 2008 tax year but did not specify for which tax years the Debtor believed it was entitled to a refund. Accordingly, the Plan does not pin-point the area of dispute. The interrogatories served on the IRS are similarly vague with regard to the years at issue and the nature of the dispute between the Debtor and the IRS. The Debtor relies on the "various pleadings and papers filed with the Bankruptcy Court throughout this contested matter" which allegedly reference a claim for a refund of taxes. The Debtor does not identify any particular pleading or document which references the claim. The court has reviewed the voluminous record in this case and is unable to identify any reference to a refund claim by the Debtor which would have put the IRS on notice of such a claim. Accordingly, the Court denied the Debtor's Motion for Determination of Tax Refund and Turnover. Charlotte, North Carolina-based DeCoro USA is a sales and distribution arm of former leather upholstery giant DeCoro Ltd. The Company filed for Chapter 11 bankruptcy protection on May 12, 2009 (Bankr. M.D.N.C. Case No. 09-10846). Christine L. Myatt, Esq., who has an office in Greensboro, North Carolina, assists the Company in its restructuring efforts. The Company listed $1 million to $10 million in assets and debts. DENSITY UTILITIES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Density Utilities of Louisiana, LLC 543 Second Street, Suite 104 Macon, GA 31201 Bankruptcy Case No.: 13-50617 Chapter 11 Petition Date: March 8, 2013 Court: U.S. Bankruptcy Court Middle District of Georgia (Macon) Debtor's Counsel: Wesley J. Boyer, Esq. KATZ, FLATAU, POPSON AND BOYER, LLP 355 Cotton Avenue Macon, GA 31201 Tel: (478) 742-6481 E-mail: wjboyer_2000@yahoo.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/gamb13-50617.pdf The petition was signed by Miller L. Heath, III. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Density, Inc. 12-53125 10/31/12 DESERT HOT: S&P Lowers Rating on 2006 & 2008 TABs to 'CCC+' ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating to on Desert Hot Springs Redevelopment Agency, Calif.'s merged project area (MPA) series 2006 and 2008 tax allocation bonds (TABs) to 'CCC+' from 'B'. The outlook is stable. "The downgrade reflects our view of continued assessed value declines and the need for further draws on the reserve fund, which could potentially lead to a default in the next few years, assuming no assessed value growth in the near future," said Standard & Poor's credit analyst Michael Stock. The rating incorporates the successor agency's (SA) reliance on some of the debt service reserve to meet projected shortfalls. The stable outlook reflects the presence of a cash-funded debt service reserve and escrowed bonds, which S&P estimates can cover annual shortfalls for several years before depletion, assuming project area assessed value (AV) remains stable. The rating reflects what S&P views as: -- Significant and continuing AV declines in the MPA since fiscal 2008; -- The potential use of a portion of the cash-funded debt service reserves due to inadequate, 0.82x annual debt service coverage by pledged revenues in fiscal 2013 and inadequate coverage of 0.6x maximum annual debt service (MADS) in fiscal 2015; -- The MPA's high volatility ratio of 0.4; and -- Very high unemployment levels and low income indicators in the city. Securing the bonds are tax increment revenues from redevelopment agency's MPA net of the 20% of increment set aside for low- and moderate-income housing projects and senior pass-throughs. The stable outlook reflects S&P's view of the presence of a cash- funded debt service reserve and escrowed bonds, which it estimates can cover annual shortfalls for at least another year. S&P projects the need for further draws on the reserve fund, which it projects could be depleted and lead to a default in the next two- to-three years, assuming no AV growth in the near future. Although S&P don't expect to change the rating in the next year, should AV continue to decline or should the SA draw significantly on cash-funded debt service reserves in the next year, S&P could lower the rating. Should AV stabilize and recover to improve annual coverage, S&P could raise the rating. The MPA is in Desert Hot Springs, in California's Coachella Valley. The city attracts tourists for its natural hot mineral water spas and is a historically lower-income community, neighboring Palm Springs and other more affluent resort communities. DETROIT, MI: Michigan Expected to Announce Takeover of Finances --------------------------------------------------------------- Steve Neavling of Reuters reported that Michigan Governor Rick Snyder is expected to announce on Thursday an emergency state takeover of Detroit, putting a lawyer with extensive experience managing corporate bankruptcies in charge of the destitute city's finances. Reuters said the dramatic move will culminate the long decline of the once thriving center of the U.S. auto industry and birthplace of the Motown trend in popular music. Republican Snyder is "highly likely" to name an emergency financial manager for Detroit at a news conference scheduled for 2 p.m. local time on Thursday, a source with direct knowledge of the decision said, according to Reuters. The top candidate for the job is Kevyn Orr, 54, a partner in the Washington, D.C., law firm Jones Day, who has long experience handling corporate bankruptcy and restructuring cases, said another source with direct knowledge of the choice, Reuters added. The city, according to Reuters, could challenge the takeover in state court but such attempts have failed in Michigan in the past. Under Michigan state law, the financial manager will have broad powers to run the city, supplanting the elected city council and mayor, Reuters related. The manager could ultimately recommend that Detroit file the largest municipal bankruptcy in U.S. history. The manager will be able to renegotiate labor contracts, privatize services and sell certain city assets, Reuters added. A law passed in December 2012 that takes effect on March 28 will boost those powers, allowing the manager to terminate collective bargaining agreements with the city's 48 unions. DOLPHIN COVE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Dolphin Cove LLC 22819 Woodway Park Rd Woodway, WA 98020 Bankruptcy Case No.: 13-12162 Chapter 11 Petition Date: March 12, 2013 Court: U.S. Bankruptcy Court Western District of Washington (Seattle) Judge: Timothy W. Dore Debtor's Counsel: Larry B. Feinstein, Esq. VORTMAN & FEINSTEIN 500 Union Street, Suite 500 Seattle, WA 98101 Tel: (206) 223-9595 E-mail: feinstein2010@gmail.com Scheduled Assets: $4,600,000 Scheduled Liabilities: $2,808,515 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Randy Previs, managing member. GSC HOLDINGS: Case Summary & 3 Unsecured Creditors -------------------------------------------------- Debtor: GSC Holdings, LLC 4282 N. Drinkwater Boulevard Scottsdale, AZ 85251 Bankruptcy Case No.: 13-03555 Chapter 11 Petition Date: March 12, 2013 Court: U.S. Bankruptcy Court District of Arizona (Phoenix) Judge: George B. Nielsen, Jr. Debtor's Counsel: Lyndon B. Steimel, Esq. LAW OFFICE OF LYNDON B. STEIMEL 14614 N. Kierland Boulevard, #N-135 Scottsdale, AZ 85254 Tel: (480) 367-1188 Fax: (480) 367-1174 E-mail: lyndon@steimellaw.com Scheduled Assets: $3,171,466 Scheduled Debts: $1,741,068 A copy of the Company's list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/azb13-03555.pdf The petition was signed by Aron R. Mezo, managing member. DORAL FINANCIAL: Reports $28.3-Mil. Net Income in 4th Qtr. 2012 --------------------------------------------------------------- Doral Financial Corporation reported a net income of $28.3 million for the quarter ended December 31, 2012, compared to a net loss of $32.5 million for the quarter ended September 30, 2012 and net income of $11.7 million for the quarter ended December 31, 2011. For the year ended December 31, 2012, Doral reported a net loss of $3.3 million compared to a net loss of $10.7 million for the same period of 2011. "Over the past year, Doral improved revenue, capital and generated substantial benefits from our tax assets while making significant investments in credit and compliance. This year, we expect to be managing a multi-market growing and profitable banking operation and a newly created group focused on managing non-performing loans. In all, we expect this structural change to improve both operating results of our growing operations and transparency," said Glen Wakeman, CEO of Doral Financial Corporation. A copy of Doral Financial's earnings release for the quarter ended Dec. 31, 2012 is available for free at http://is.gd/UxgkXv About Doral Financial Based in New York City, Doral Financial Corp. (NYSE: DRL) -- http://www.doralfinancial.com/-- is a diversified financial services company engaged in mortgage banking, banking, investment banking activities, institutional securities and insurance agency operations. Its activities are principally conducted in Puerto Rico and in the New York City metropolitan area. Doral is the parent company of Doral Bank, a Puerto Rico based commercial bank; Doral Securities, a Puerto Rico based investment banking and institutional brokerage firm; Doral Insurance Agency Inc. and Doral Bank FSB, a federal savings bank based in New York City. * * * As reported by the Troubled Company Reporter on Dec. 19, 2012, Standard & Poor's Ratings Services lowered its issuer credit rating on Doral Financial Corp. to 'CCC-' from 'CCC+'. The outlook is negative. "Our two-notch downgrade of Doral reflects the institution's weakened capital position and very high nonperforming assets," said Standard & Poor's credit analyst Sunsierre Newsome. "We view Doral's capital and earnings as weak -- as our criteria define the term -- and we believe that the bank is at risk of breaching its regulatory requirements in case of plausible adverse developments, including higher credit losses and further weakening of the Puerto Rican economy." "Our revision of Doral's capital and earnings score to 'weak' from 'moderate' is responsible for one notch of the two-notch downgrade. We also believe that Doral's asset quality compares unfavorably with its Puerto Rican peers', which led us to lower the rating by another notch," S&P said. DRI COMPANIES: Updated Case Summary & Creditors' Lists ------------------------------------------------------ Lead Debtor: DRI Companies 17182 Armstrong Avenue Irvine, CA 92614 Bankruptcy Case No.: 13-12153 Chapter 11 Petition Date: March 11, 2013 Judge: Scott C. Clarkson Court: United States Bankruptcy Court Central District Of California (Santa Ana) Debtors' Counsel: Todd C. Ringstad, Esq. RINGSTAD & SANDERS LLP 2030 Main St #1200 Irvine, CA 92614 Tel: (949) 851-7450 E-mail: becky@ringstadlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- DRI Commercial Corporation 13-12154 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 DRI Residential Corporation 13-12156 Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 DRI Energy Corporation 13-12157 Assets: $500,001 to $1,000,000 Debts: $1,000,001 to $10,000,000 Lumeta, Inc. 13-12158 The petitions were signed by Timothy M. Davey, president. A. A copy of DRI Companies' list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb13-12153.pdf B. A copy of DRI Commercial's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb13-12154.pdf C. A copy of DRI Residential Corporation's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb13-12156.pdf D. A copy of DRI Energy Corporation's list of its 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cacb13-12157.pdf EASTMAN KODAK: Seeks Court Approval to Settle Rousselot Claims -------------------------------------------------------------- Eastman Kodak Co. asks U.S. Bankruptcy Judge Allan Gropper to approve a settlement of claims with Rousselot Inc. Rousselot asserts claims against Kodak under a supply agreement, and a stock purchase agreement they signed in 2011 in connection with its acquisition of Rousselot Peabody Inc. from Kodak. Under the deal, Rousselot can assert a claim of $697,781 against Kodak for gelatin products it sold to the company, and another $510,778 that was erroneously paid to Kodak. In return, the supplier agreed to waive about $581,944 owed by Kodak under the stock purchase agreement. Meanwhile, Kodak agreed to waive about $6 million still owed by Rousselot under the sale transaction, and another $80,661 under the supply agreement. As part of the settlement, the companies entered into a revised supply agreement, which also needs approval by the bankruptcy judge. A redacted copy of the supply agreement and the proposed settlement is available for free at http://is.gd/JmQsLD A court hearing is scheduled for March 20. Objections are due by March 18. 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. ENOVA MEDICAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Enova Medical Response, Inc. 14114 Victory Boulevard Suite 201 Van Nuys, CA 91401 Bankruptcy Case No.: 13-11653 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Alan M. Ahart Debtor's Counsel: Keith S. Dobbins, Esq. LAW OFFICE OF KEITH DOBBINS 21700 Oxnard St., Ste 1290 Woodland Hills, CA 91367 Tel: (818) 348-3442 Fax: (818) 348-6168 E-mail: kdobbinslaw@aol.com Scheduled Assets: $51,500 Scheduled Liabilities: $1,536,599 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/cacb13-11653.pdf The petition was signed by David Malintsyan, president. EVERGLADES RE: S&P Gives Prelim. 'B(sf)' Rating to 2013-1 Notes --------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B(sf)' preliminary rating to the Series 2013-1 notes to be issued by Everglades Re Ltd. The notes provide indemnified coverage to Citizens Property Insurance Corp. during a three-year risk period for losses in Florida from hurricanes on a per-occurrence basis. The preliminary rating is based on the lower of the rating on the catastrophe risk ('B'), the rating on the assets in the collateral account ('AAAm'), and the ('A+') issuer credit rating on Citizens. The notes will cover ultimate net losses from hurricanes between the initial attachment point of $5.139 billion and the initial exhaustion point of $5.389 billion. This is the second Everglades issuance rated by Standard & Poor's. RATINGS LIST Preliminary Ratings Assigned Everglades Re Ltd. Series 2013-1 Notes B(sf) FISKER AUTOMOTIVE: Founder & Chairman Steps Down ------------------------------------------------ The Wall Street Journal's Joseph B. White and Neal E. Boudette report that Henrik Fisker, founder and executive chairman of electric-car startup Fisker Automotive Inc., said in an email sent Wednesday to a small number of journalists that he has "left the company" because of "disagreements" over business strategy with the ailing company's management. Reached by phone, Mr. Fisker confirmed that he sent the email and that he had resigned, WSJ relates. The report notes Fisker management has been looking into selling the company in recent weeks, weighing bids including a $350 million offer from China's Dongfeng Motor Corp. Fisker Automotive is the maker of the Karma, a battery-powered luxury sports that sells for about $100,000. The report notes the Company received backing from the U.S. government but ran into technical and financial troubles stemming from both the Karma and a second model that was supposed to be built at a former General Motors Co. plant in Delaware. FRANK PARSONS: International Paper's Response Deadline Extended --------------------------------------------------------------- Bankruptcy Judge Robert A. Gordon signed off on a Fifth Stipulation and Consent Order between Edward T. Gavin, the duly appointed Trustee of the FPI Liquidating Trust, and defendant International Paper Company, extending to March 15 the time for the Defendant to file an answer, motion or otherwise to the Trustee's complaint. International Paper requested a further extension of time to file an answer, motion or otherwise respond to the Complaint so that the Parties can continue settlement discussions. International Paper is represented by David M. Banker, Esq. -- dbanker@lowenstein.com -- at Lowenstein Sandler LLP. The case is, EDWARD T. GAVIN, as Trustee of the FPI Liquidating Trust, Plaintiff, v. INTERNATIONAL PAPER COMPANY, Defendant, Adv. Proc. No. 12-00895-RAG (Bankr. D. Md.). A copy of the March 7, 2013 stipulation and consent order is available at http://is.gd/lv3osDfrom 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. GASCO ENERGY: Files Form 10-K, Incurs $22.2-Mil. Net Loss in 2012 ----------------------------------------------------------------- Gasco Energy, Inc., filed on March 6, 2013, its annual report on Form 10-K for the year ended Dec. 31, 2012. KPMG LLP, in Denver, Colorado, expressed substantial doubt about Gasco Energy's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations. The Company reported a net loss of $22.2 million on $8.9 million of revenues in 2012, compared with a net loss of $7.3 million on $18.3 million of revenues in 2011. The Company's balance sheet at Dec. 31, 2012, showed $53.9 million in total assets, $36.2 million in total liabilities, and stockholders' equity of $17.7 million. According to the regulatory filing, to continue as a going concern, the Company must generate sufficient operating cash flows, secure additional capital or otherwise pursue a strategic restructuring, refinancing or other transaction to provide it with additional liquidity. "The Company has engaged a financial advisor to assist it in evaluating such potential strategic alternatives. It is possible these strategic alternatives will require the Company to make a pre-package, pre-arranged or other type of filing for protection under Chapter 11 of the U.S. Bankruptcy Code." A copy of the Form 10-K is available at http://is.gd/zXkTR9 Denver, Colo.-based Gasco Energy, Inc. (NYSE MKT: GSX) is a natural gas and petroleum exploitation, development and production company engaged in locating and developing hydrocarbon resources, primarily in the Rocky Mountain region and in California's San Joaquin Basin. Gasco's principal business is the acquisition of leasehold interests in petroleum and natural gas rights, either directly or indirectly, and the exploitation and development of properties subject to these leases. Gasco focuses its drilling efforts in the Riverbend Project located in the Uinta Basin of northeastern Utah, targeting the oil-bearing Green River Formation and the natural gas-prone Wasatch, Mesaverde, Blackhawk, Mancos, Dakota and Morrison formations. GEOKINETICS INC: Confirmation of Prepack Plan Set for April 25 -------------------------------------------------------------- Geokinetics Inc., the world's second-largest provider of seismic data, will seek approval of its prepackaged Chapter 11 reorganization plan and explanatory disclosure statement at a hearing on April 25, 2013 at 10:00 a.m. Objections to confirmation of the Plan and adequacy of the information in the Disclosure Statement are due April 12, 2013. Geokinetics and its affiliates on the Petition Date filed a reorganization plan negotiated with their credit facility lenders, holders of their 9.75% senior secured notes due 2014, and largest holder of the Company's preferred stock. The Chapter 11 Plan provides for these terms: (i) Holders of the $300 million of senior secured notes will receive newly issued common equity of the Company representing 100% of the Company's issued and outstanding common stock after the issuance (subject to dilution for a management incentive plan and repayment of DIP financing). The Debtors believe that based on the valuation analysis, the value of the new common stock that will be distributed to noteholders is $224 million. Holders of Senior Secured Notes are Impaired. Recovery: 70 percent. (ii) Holders of claims for $50 million in loans plus accrued interest outstanding under the revolving credit facility provided by Whitebox Advisors LLC, as agent, will be repaid in full. They will be repaid from proceeds of an exit facility and are unimpaired. Recovery 100%: (iii) Holders of general unsecured claims estimated to be between $9 million and $13.2 million will be paid in full. They are unimpaired and deemed to accept the Plan. Recovery: 100% (iv) Holders of $141 million of Series B-1 Preferred Stock and Series C-1 Preferred Stock are to receive $6 million in cash in exchange for the cancellation of the preferred stock. The holders of the senior preferred stock are impaired. Recovery: 4% (iv) Holders of junior preferred equity interest and the GOK common stock won't receive anything and their interests will be cancelled. Holders of the stock are impaired and deemed to reject the Plan. Recovery: 0% In February, GCG Inc. began solicitation of votes on the Plan from holders of the Notes, the Series B-1 and Series C-1 preferred stock. Holders of 85% of the notes (96% in amount) and holders of all of the preferred stock voted in favor of the Plan. The Debtors expect a streamlined confirmation process and are targeting confirmation within 45 days. A copy of the Plan is available for free at: http://bankrupt.com/misc/Geokinetics_Disc_Statement.pdf A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Geokinetics_Disc_Statement.pdf About Geokinetics Inc. Headquartered in Houston, Texas, Geokinetics Inc., a Delaware corporation founded in 1980, provides seismic data acquisition, processing and integrated reservoir geosciences services, and land, transition zone and shallow water OBC environment geophysical services. The Company's balance sheet at Sept. 30, 2012, showed $415.71 million in total assets, $590.79 million in total liabilities, $90.72 million in mezzanine equity, and a $265.80 million total stockholders' deficit. For the first three quarters of 2012, the net loss was $64.5 million. For 2011, there was a $231.2 million net loss on revenue of $763.7 million. Geokinetics Inc. and its nine affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10472) on March 10, 2013, with a prepackaged Chapter 11 plan that converts $300 million of senior secured notes into 100% of the reorganized Company's common stock. Akin Gump Strauss Hauer & Feld LLP serves as counsel to the Debtors; Richards, Layton & Finger, P.A., is co-counsel; Rothschild Inc. is the financial advisor and investment banker; UHY LLP is the independent auditor; and GCG, Inc., is the claims agent and administrative agent. GEOKINETICS INC: Has Interim Order on $25MM DIP Loan ---------------------------------------------------- Geokinetics Inc. has arranged superpriority secured postpetition financing of up to $25 million from holders of senior secured notes. The proposed DIP facility is backstopped in full by two of the Debtors' largest prepetition secured creditors, American Securities Opportunities Advisors, LLC and Gates Capital Management, Inc. The Debtors at a hearing March 12 obtained approval of the request to obtain DIP financing and use cash collateral subject to a lien in connection with the prepetition credit agreement or the 9.7% senior secured notes due 2014. The DIP lenders have agreed to provide the Debtors access to $15 million upon interim approval of the financing. A final hearing on the DIP financing is slated for April 3, 2013, at 2:00 p.m. Objections are due March 27, 2013. The DIP facility offered by noteholders provides the most operational flexibility to the Debtors among the proposals received by Rothschild, Inc., the Debtors' financial advisors. The DIP facility allows for repayment of the principal outstanding amounts in new common stock pursuant to and after confirmation of the Plan. In addition, the DIP facility is the only proposed financing available that provides for the consensual priming of the liens securing the senior notes and does not provide for the priming of the liens securing the exit credit agreement. Under the proposed DIP facility, each senior noteholders that is an accredited investor holding at least $1 million in aggregate principal amount of senior notes may elect to be a DIP lender by contacting the agent for the DIP facility within 5 days of the entry of the interim order. The agent under the DIP facility is CantorFitzgerald Securities. The DIP facility will mature in four months. The DIP obligations will bear interest at 9.25% per annum, with interest rising to 11.25% per annum upon occurrence of an event of default. As adequate protection for the diminution of value on account of the Debtors' use of cash collateral, U.S. Bank National Association, as collateral trustee for each of the exiting credit facility and senior notes, and as the indenture trustee, will receive postpetition security interest and liens, superpriority administrative claims, and payment of fees and expenses. The DIP financing agreement contains certain milestones, including entry of the interim DIP order within 20 days following the Petition Date, confirmation of the Plan within 45 days following the Petition Date, and the effective date of the Plan occurring within 60 days following the Petition Date. About Geokinetics Inc. Headquartered in Houston, Texas, Geokinetics Inc., a Delaware corporation founded in 1980, provides seismic data acquisition, processing and integrated reservoir geosciences services, and land, transition zone and shallow water OBC environment geophysical services. The Company's balance sheet at Sept. 30, 2012, showed $415.71 million in total assets, $590.79 million in total liabilities, $90.72 million in mezzanine equity, and a $265.80 million total stockholders' deficit. For the first three quarters of 2012, the net loss was $64.5 million. For 2011, there was a $231.2 million net loss on revenue of $763.7 million. Geokinetics Inc. and its nine affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10472) on March 10, 2013, with a prepackaged Chapter 11 plan that converts $300 million of senior secured notes into 100% of the reorganized Company's common stock. Akin Gump Strauss Hauer & Feld LLP serves as counsel to the Debtors; Richards, Layton & Finger, P.A., is co-counsel; Rothschild Inc. is the financial advisor and investment banker; UHY LLP is the independent auditor; and GCG, Inc., is the claims agent and administrative agent. GEOKINETICS INC: Wins Interim Approval of First Day Motions ----------------------------------------------------------- At a hearing on March 12, Geokinetics Inc., won interim approval of first day its motions. A final hearing of the first day pleadings is scheduled for April 4, 2013, at 2:00 p.m. at U.S. Bankruptcy Court, 824 Market St., 5th Fl., Courtroom #5, Wilmington, Delaware. Objections are due by March 27, 2013. The Debtors sought permission to pay prepetition claims of certain critical vendors. These vendors do not have written contracts with the Debtors for this arrangement, might be entitled to administrative priority pursuant to Sec. 503(b)(9) or could not be replaced within a reasonable time and on terms as beneficial to the Debtors as those already in place. The Debtors have also identified as critical vendors their landowners -- if one landowner in an operation area is not compensated under a seismic access agreement, neighboring landowners may refuse to allow the Debtors onto their land for fear that they won't be compensated. The Debtors estimate that the maximum amount needed to pay the prepetition claims of critical vendors, excluding landowners, is approximately $8.7 million. Maximum amount needed to pay the prepetition claims of critical landowners is $500,000. The Debtors also sought permission to honor obligations to 50 vendors in Angola and Bangladesh. Because of the unstable economic, political and social environments in Angola and Bangladesh, and the likelihood that vendors in those countries will neither understand nor regard this bankruptcy filing, the Debtors submit that payment of up approximately $600,000 to vendors in those countries is necessary and appropriate. The Debtors say that they have incurred, and are currently incurring, significant net operating losses ("NOLs"), amounting to $300 million as of the Petition Date, translating to potential tax savings of $115 million. The Debtors' NOLs can be carried forward to up to 20 subsequent tax years to offset the Debtors' future taxable income. The tax attributes could be adversely affected if too many 5% or greater blocks of any class of equity securities are created or too many shares are added to or sold from such blocks such that an ownership changed is triggered. In addition, an ownership change may be deemed to occur on the last day of the tax year in which a "50-percent shareholder" declares its stock in the debtor corporation to be worthless for federal or state tax purposes. Under the proposed rules, persons who own (or would own as a result of a proposed transfer) at least 4.75% of the outstanding shares of common stock or preferred stock are required to provide notice of their status "substantial shareholders". At the behest of the Debtors, the judge entered an interim order providing that at least 20 days prior to the proposed date of any transfer of equity securities that would result in an entity becoming a substantial shareholder, the entity must file with the Court a notice of intent to purchase shares. Substantial equity holders intending to dispose of shares that would result in a person or entity ceasing to be a substantial shareholder, the entity must file a notice of intent to sell 20 days before the proposed date of the transaction. The Debtors also filed a motion to determine adequate assurance of payment for future utility service providers. The Debtors have 60 utility provides and believe that $150,000 in utility costs are outstanding. The judge granted the Debtors' request to pay prepetition wages and benefits of employees. Payment to each employee will not exceed $11,725 as required by 11 U.S.C. Sec. 507(a). The Debtors and its non-debtor subsidiaries have 4,000 employees around the world, of whom 962 are employed domestically, by debtor Geokinetics Services Corp. At the April 3 hearing, the bankruptcy judge will consider approval to the Debtors' second-day pleadings, which comprise applications to employ Akin Gump Strauss Hauer & Feld LLP as counsel, Richards, Layton & Finger, P.A. as co-counsel; Rothschild Inc. as financial advisor and investment banker; GCG, Inc., as administrative agent, and UHY LLP as independent auditor. The Debtors have obtained approval to employ GCG as claims agent. About Geokinetics Inc. Headquartered in Houston, Texas, Geokinetics Inc., a Delaware corporation founded in 1980, provides seismic data acquisition, processing and integrated reservoir geosciences services, and land, transition zone and shallow water OBC environment geophysical services. The Company's balance sheet at Sept. 30, 2012, showed $415.71 million in total assets, $590.79 million in total liabilities, $90.72 million in mezzanine equity, and a $265.80 million total stockholders' deficit. For the first three quarters of 2012, the net loss was $64.5 million. For 2011, there was a $231.2 million net loss on revenue of $763.7 million. Geokinetics Inc. and its nine affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10472) on March 10, 2013, with a prepackaged Chapter 11 plan that converts $300 million of senior secured notes into 100% of the reorganized Company's common stock. GEOKINETICS INC: Files Redacted Schedules Now, SOFAs Later ---------------------------------------------------------- Geokinetics Inc. and its affiliates filed with the Bankruptcy Court their formal schedules of assets and liabilities. The lead debtor, Geokinetics Inc., disclosed: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $78,832,198 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $350,000,000 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $2,845,110 ----------- ----------- TOTAL $78,832,198 $352,845,110 The debtor-affiliates disclosed: Entity Assets Liabilities ------ ----------- ----------- Geokinetics USA, Inc. $101,351,122 $352,000,016 Advanced Seismic Tech. Inc. $78,832,198 $352,845,110 Geokinetics Services Corp. $8,673,935 $351,635,651 Geokinetics Acquisition Company $7,224,999 $350,698,249 Geokinetics Processing, Inc. $5,363,912 $350,071,961 Geokinetics International, Inc. $5,606,837 $350,000,000 Geokinetics Int'l Holdings, Inc. $33,540 $350,000,000 Geokinetics Management, Inc. $0 $350,000,000 Geokinetics Holdings USA, Inc. $0 $350,000,000 The Debtors sought permission to file portions of their schedules and statements and list of creditors under seal to protect confidential information. The Debtors explained that oil and gas exploration is an exceptionally competitive industry, and the location of where certain companies are conducting exploration operations is highly confidential. Companies must determine the ownership of minerals that is oftentimes severed from the ownership of the surface estate, enter into lease agreements with the mineral estate owners, conduct seismic operations, and drill exploration wells, among numerous other activities, before a company can begin to operate a production well. If such information were not confidential companies, could simply wait for their competitors those activities and then lease the surrounding mineral estates without incurring the risk borne by the company performing the initial exploration activities. The Debtors said that a recent single breach of confidentiality resulted in losses totaling several million dollars. The Court also ruled that the Debtors may redact their bankruptcy schedules by replacing customer names with "Customer." To differentiate between multiple customers, the Debtors will reference ach customer by the number assigned to the license agreement between the Debtors and the applicable customer. The Debtors sought and obtained an extension until June 10, 2013, of the deadline to file their schedules of assets and liabilities. The Debtors explained that they have voluminous books and records as well as complex accounting systems. The Debtors' their operations generate revenues in multiple currencies. Additionally, the Debtors entered into agreements with thousands of landowners to permit the Debtors to conduct operations on the landowners' property. Copies of the schedules are available for free at: http://bankrupt.com/misc/Geokinetics_SALs.pdf http://bankrupt.com/misc/Geokinetics_USA_Inc_SALs.pdf http://bankrupt.com/misc/Adv_Seismic_SALs.pdf http://bankrupt.com/misc/Geokinetics_SC_SALs.pdf http://bankrupt.com/misc/Geokinetics_AC_SALs.pdf http://bankrupt.com/misc/Geokinetics_Processing_SALs.pdf http://bankrupt.com/misc/Geokinetics_Intl_SALs.pdf http://bankrupt.com/misc/Geokinetics_IH_SALs.pdf http://bankrupt.com/misc/Geokinetics_Mgt_SALs.pdf http://bankrupt.com/misc/Geokinetics_USA_SALs.pdf About Geokinetics Inc. Headquartered in Houston, Texas, Geokinetics Inc., a Delaware corporation founded in 1980, provides seismic data acquisition, processing and integrated reservoir geosciences services, and land, transition zone and shallow water OBC environment geophysical services. The Company's balance sheet at Sept. 30, 2012, showed $415.71 million in total assets, $590.79 million in total liabilities, $90.72 million in mezzanine equity, and a $265.80 million total stockholders' deficit. For the first three quarters of 2012, the net loss was $64.5 million. For 2011, there was a $231.2 million net loss on revenue of $763.7 million. Geokinetics Inc. and its nine affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10472) on March 10, 2013, with a prepackaged Chapter 11 plan that converts $300 million of senior secured notes into 100% of the reorganized Company's common stock. Akin Gump Strauss Hauer & Feld LLP serves as counsel to the Debtors; Richards, Layton & Finger, P.A., is co-counsel; Rothschild Inc. is the financial advisor and investment banker; UHY LLP is the independent auditor; and GCG, Inc., is the claims agent and administrative agent. GILBERT AUTO: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Gilbert Auto Ford, LLC P.O. Box 497 Walla Walla, WA 99362 Bankruptcy Case No.: 13-01010 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Eastern District of Washington (Spokane/Yakima) Judge: Frank L. Kurtz Debtor's Counsel: Barry W. Davidson, Esq. DAVIDSON BACKMAN MEDEIROS 601 W Riverside Avenue Suite 1550 Spokane, WA 99201 Tel: (509) 624-4600 Fax: (509) 623-1660 E-mail: bdavidson@dbm-law.net 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/waeb13-01010.pdf The petition was signed by Mark W. Gilbert, managing member. GOLD RESERVE: Updates Shareholders on U.S. Listing Status --------------------------------------------------------- Gold Reserve Inc. on March 14 disclosed that as of the close of business today the Company's common shares will be suspended from trading on the NYSE MKT (GRZ). The Company anticipates that the common shares will begin to trade on the OTCQB Marketplace thereafter. Once a trading symbol is issued investors will be able to view the Real Time Level II stock quotes. As reported by the Troubled Company Reporter on March 12, 2013, Gold Reserve Inc. advised its shareholders that on March 8, 2013, the Company was notified by the NYSE-MKT that its appeal with an independent panel relating to the continued listing of the Company's shares on the Exchange has been denied. The Exchange expects to suspend trading of the Company's shares and file an application with the SEC to delist the Company's shares from the Exchange "as soon as is practicable," but has not given the Company any particular dates for those actions. Gold Reserve Inc. -- http://www.goldreserveinc.com-- is an exploration-stage company. The Company is engaged in the business of acquiring, exploring and developing mining projects. As of December 31, 2011, the Company had not generated any revenues. The Company's subsidiaries include Gold Reserve Corporation, Gold Reserve de Barbados Limited, Gold Reserve de Venezuela, CA, Compania Aurifera Brisas del Cuyuni, SA, GR El Choco Limited and GRI Minerales El Choco CA. As of December 31, 2011, the Company had no revenue producing mining operations. GROVES IN LINCOLN: Proposes Benchmark-Led Auction in May -------------------------------------------------------- The Groves in Lincoln Inc., owner the Groves independent living facility in Lincoln, Massachusetts, filed together with its bankruptcy petition a motion to sell substantially all assets for up to $35 million to an affiliate of Benchmark Assisted Living LLC, absent higher and better offers. Under an asset purchase agreement, BSL Lincoln LLC has agreed to purchase the assets for $30 million in cash plus an additional payment of up to $5 million contingent upon the success and timing of the purchaser's receipt of approvals to construct an Assisted Living/Alzheimer's Care facility on the property that purchaser is buying from the Company. The Groves is asking the Bankruptcy Court to hold a hearing on March 26 to approve procedures for holding an auction and soliciting other bids. The Debtor and the bondholders have agreed to permit counteroffers in the form of either a purchase or proposal for restructuring under a Chapter 11 plan. To participate in an auction, interested parties must submit an asset purchase agreement that offers a cash purchase price of at least $31.1 million or a plan sponsor agreement that offers at least $1.1 million more than the value Benchmark is offering. Bidders are required to submit an irrevocable cash deposit of $1 million. The Debtor acceded to the stalking horse bidder's request for bid protections, including a break-up fee of $900,000 plus reimbursement of expenses of $100,000. The Debtor proposes a May deadline for initial bids as well as an auction for the assets two business days after the bid deadline. The Debtor proposes a sale hearing three business days after the bid deadline. The bond trustee is prohibited from submitting a credit bid. As required for not-for-profit entities in Massachusetts, the Debtor provided to the Attorney General of Massachusetts on the Petition Date a notice of sale of substantially all of its assets. The APA with the Benchmark unit requires that the sale order be entered within 60 days after the entry of the bid procedures order and that the Proposed Sale be consummated on the 10th business day after the non-bankruptcy required approvals and the Non-AL/ALZ required approvals have been obtained but no later than 60 days after the entry of the sale order. Benchmark is based in Wellesley, Massachusetts and is one of the largest providers of assisted and independent senior housing in New England. $88-Mil. in Bonds Ever since opening in July 2010, The Groves has struggled to maintain a sufficient pace of new resident reservations and move- ins for the Company to maintain financial viability. Before the facility opened, there were reservations for 75% of the units. By the time the facility was available for use, cancellations brought occupancy down to 65%. The Debtor owes $88.34 million in Massachusetts Development Finance Agency bonds that were sold in 2009 to finance the project. The Debtor also owes two non-debtor members -- Masonic Health System of Massachusetts Inc. and New England Deaconess Association-Abundant Life Communities Inc. -- a total of $20.6 million, which obligations are subordinated to the rights and interests of the bond trustee under the bonds. The Debtor also has accrued liability for entrance fee refunds of $47,724,019 as of the Petition Date. Only $22,000 is owed for goods and services supplied before the petition date. 51% Recovery for Bondholders The Company has agreed, pursuant to a stipulation with Wells Fargo Bank, National Association, as the bond trustee, concerning use of cash collateral, that all proceeds of the proposed sale will be turned over to the bond trustee in payment of the bonds. The Debtor agreed that certain reserve funds are not property of the estate, thus those funds, too, will be available to pay the bonds. Assuming that the stalking horse bid from Benchmark emerges as the best offer, the reserve funds and the sale proceeds will provide bondholders with $45.3 million, yielding a recovery of 51% on the outstanding bonds. The Company expects its Chapter 11 plan to reflect a waiver of MHS and DALC's claims. Similarly, no distribution will be available to MHS or DALC on account of their member interests. Prepetition, another party, a not-for-profit entity, submitted an offer to become 100% sponsor of The Groves and to restructure the bonds. The Debtor and MHS agreed that the Debtor should commence the Chapter 11 cases with Benchmark as purchaser. The Debtor's investment banker may be reached at: RBC Capital Markets 677 Broadway, Suite 700 Albany, NY 12207 Att'n: David B. Fields, Director Telephone: 518-432-5078 E-mail: David.Fields@rbccm.com About Groves at Lincoln The Groves in Lincoln Inc., along with affiliates, sought Chapter 11 protection (Bankr. D. Mass. Case No. 13-11329) in Boston on March 11, 2013. Groves is a Massachusetts not-for-profit corporation organized in 2006 for the purpose of developing and operating a senior independent living facility in Lincoln, Massachusetts to be known as The Groves in Lincoln. This facility now consists of 168 independent living units on a 34-acre campus with a mix of apartments, cottages, and related common areas including community center, dining rooms, lounges, barbershop/beauty salon, library, fitness center and pool. Groves has 26 full-time employees and 22 part-time employees as of the bankruptcy filing. The Debtors tapped Murtha Cullina LLP as counsel, Verdolino & Lowey, P.C. as accountants and financial advisors, and RBC Capital Markets LLC as investment banker. GROVES IN LINCOLN: Wells Fargo Allows Use of Cash Collateral ------------------------------------------------------------ The Groves in Lincoln Inc. asks the Bankruptcy Court for approval to use cash collateral to fund its business operations, preserve the value of its assets and business, and to avoid irreparable harm to the Groves independent living facility and its bankruptcy estate, pending completion of the proposed sale of the assets. Wells Fargo Bank, N.A., which in its capacity as trustee for holders of outstanding tax-exempt bonds in the outstanding amount of approximately $88,430,000, holds a lien on substantially all assets of Groves. The Debtor and the bond trustee have agreed to terms of an interim order granting the Debtors access to cash collateral. The parties agree that as adequate protection for any diminution in the value of cash collateral resulting from Groves' use thereof through entry of a final order, the bond trustee will have superpriority administrative expense claim pursuant to 11 U.S.C. Sec. 507(b), replacement liens, and supplemental liens. The bond trustee consents to certain expenses and professional fees incurred during the pendency of the Chapter 11 Case which shall be superior in all instances to the liens and claims of the Bond Trustee and all other parties. The "Carve Out" means (a) the Broker's fees and expenses, (b) the fees and expenses of other professionals retained by Groves or a Committee, capped at the amounts set forth in the budget, plus (c) the statutory fees of the United States Trustee pursuant to 28 U.S.C. Sec. 1930 and the fees of the Clerk of the Bankruptcy Court. The proposed interim order contains an acknowledgment by Groves that the bond trustee has a valid claim, a perfected first priority lien, etc. Having reviewed the bond claims and liens, Groves does not regard this provision as a give-up since Groves concluded that there is no basis for challenge. However, the interim order preserves the right of an official committee, if one is appointed in the near term, to make up its own mind, and to challenge the Bond-related claims and liens if the committee concludes there is a basis to do so. The interim order contains waivers of various statutory rights and contemplates that upon entry of a final order, the waiver will include the estate's rights under Section 506(c) of the Bankruptcy Code. This concession on Groves' part is balanced, however, by a post-termination provision giving Groves the right, if use of cash collateral under the interim order or final order is terminated, to use funds under the Liquidity Support Agreement, as amended, dated Nov. 1, 2009 -- which currently has an undrawn balance of $2,583,732 -- for operating expenses and professional fees of the Debtor without budgetary restriction, subject to certain terms and conditions. About Groves at Lincoln The Groves in Lincoln Inc., along with affiliates, sought Chapter 11 protection (Bankr. D. Mass. Case No. 13-11329) in Boston on March 11, 2013, with a deal to sell to an affiliate of Benchmark Assisted Living LLC, for up to $35 million. Groves is a Massachusetts not-for-profit corporation organized in 2006 for the purpose of developing and operating a senior independent living facility in Lincoln, Massachusetts to be known as The Groves in Lincoln. This facility now consists of 168 independent living units on a 34-acre campus with a mix of apartments, cottages, and related common areas including community center, dining rooms, lounges, barbershop/beauty salon, library, fitness center and pool. Groves has 26 full-time employees and 22 part-time employees as of the bankruptcy filing. The Debtors tapped Murtha Cullina LLP as counsel, Verdolino & Lowey, P.C. as accountants and financial advisors, and RBC Capital Markets LLC as investment banker. GROVES IN LINCOLN: Wants to Assume Bonus Agreement With CFO ----------------------------------------------------------- The Groves in Lincoln, Inc., and The Apartments at the Groves, Inc. ask the Bankruptcy Court for authority to assume an incentive compensation agreement dated Jan. 25, 2013, with chief financial officer Toby Shea. The Company entered into the Agreement to incentivize Mr. Shea to achieve a successful resolution of the Company's financial problems through either a sale of The Groves or a restructuring of the $88,430,000 bonds accompanied by replacement of Masonic Health System of Massachusetts Inc. as sponsor. Mr. Shea will earn a bonus equal to one year's salary ($250,000) if he is successful in achieving a restructuring or sale producing what the Agreement defines as Successful Target Value, provided that Mr. Shea continuously serves as CFO through the time of the closing. The Agreement defines Successful Target Value as a value for the Company and/or its constituents of not less than 80% of the amount that would be realized if the Company were able to consummate the non-binding letter of intent that it had in hand at the time of the Agreement. The letter of intent, predecessor to the Asset Purchase Agreement that is the subject of the Company's sale motion of even date herewith, provided for sale of The Groves in exchange for a non-contingent payment of $30 million and a contingent payment of $5 million. The Agreement provides no "consolation prize" for partial success. If Mr. Shea's efforts do not yield Successful Target Value so as to trigger the bonus, he gets zero. Mr. Shea has more than 15 years of experience working for regional and national commercial banking institutions. As an investment banker, he served more than 30 nonprofit providers of senior living facilities in the Northeast region, including raising capital, assisting with strategic planning, and providing other consulting and investment banking services. Mr. Shea served as lead underwriter/investment banker on more than $1 billion in new financings. Mr. Shea joined MHS as its chief financial officer in April 2010. He joined as CFO for Groves and Apartments in April 2012. The Debtor claims that the assumption of the Agreement satisfied the "business judgment rule" required by 11 U.S.C. Sec. 365(a) for the assumption of a contract. The Debtor said that the incentive payment provided in the Agreement is not a retention plan or severance payment because it is contingent on the success of the Sale/Restructuring Process. About Groves at Lincoln The Groves in Lincoln Inc., along with affiliates, sought Chapter 11 protection (Bankr. D. Mass. Case No. 13-11329) in Boston on March 11, 2013, with a deal to sell to an affiliate of Benchmark Assisted Living LLC for up to $35 million. Groves is a Massachusetts not-for-profit corporation organized in 2006 for the purpose of developing and operating a senior independent living facility in Lincoln, Massachusetts to be known as The Groves in Lincoln. This facility now consists of 168 independent living units on a 34-acre campus with a mix of apartments, cottages, and related common areas including community center, dining rooms, lounges, barbershop/beauty salon, library, fitness center and pool. Groves has 26 full-time employees and 22 part-time employees as of the bankruptcy filing. The Debtors tapped Murtha Cullina LLP as counsel, Verdolino & Lowey, P.C. as accountants and financial advisors, and RBC Capital Markets LLC as investment banker. GROVES IN LINCOLN: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: The Groves in Lincoln, Inc. fka The Groves in Lincoln - Deaconess, Inc. One Harvest Circle Lincoln, MA 01773 Bankruptcy Case No.: 13-11329 Affiliate that filed separate Chapter 11 petition: Entity Case No. ------ -------- The Apartments at the Groves, Inc. 13-11330 Chapter 11 Petition Date: March 11, 2013 Court: U.S. Bankruptcy Court District of Massachusetts (Boston) Judge: Henry J. Boroff Debtors' Counsel: Daniel C. Cohn, Esq. MURTHA CULLINA, LLP 99 High Street Boston, MA 02110 Tel: (617) 457-4155 E-mail: dcohn@murthalaw.com - and ? Ryan M. MacDonald, Esq. Murtha Cullina, LLP 99 High Street Boston, MA 02110 Tel: (617) 457-4000 Fax: (617) 482-3868 E-mail: rmacdonald@murthalaw.com Debtor's Accountants and Financial Advisors: VERDOLINO & LOWEY, P.C. Debtor's Investment Banker: RBC CAPITAL MARKETS, LLC The Groves in Lincoln's Estimated Assets: $10,000,001 to $50,000,000 The Groves in Lincoln's Estimated Debts: $100,000,001 to $500,000,000 The petitions were signed by David C. Turner, president & CEO. Groves in Lincoln's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Delphi Construction Trade $5,137 130 Overland Road Waltham, MA 02451 Ahearn Equipment Trade $3,802 460 Main Street Spencer, MA 01562 Atlantic Charter Trade $1,751 P.O. Box 3127 Boston, MA 02241-3127 Lalicata Landscape Products Trade $1,345 Overhead Door Company of Danvers Trade $1,197 Signet Electronic Systems Inc. Trade $1,069 Tighe & Bond Trade $759 Ace Service Company, Inc. Trade $694 Home Depot Trade $605 Bulbs.com Trade $593 Supreme Industrial Products In Trade $585 W.B. Mason Company, Inc. Trade $564 Pittsburgh Paints Trade $557 CES Inc. Trade $416 Willco Sales and Service Inc. Trade $273 Coca-Cola Refreshments Trade $218 Stanley Steemer of Boston Trade $179 Golden Tones, Inc. Trade $150 Poland Springs Trade $123 Swanson Buick-GMC Truck Inc. Trade $103 H.J. HEINZ: S&P Rates $2.1-Bil. 2nd Lien Sr. Secured Notes 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its issue-level and recovery ratings to H.J. Heinz Co.'s proposed $2.1 billion second- lien senior secured notes due 2020. S&P assigned a 'BB-' issue rating to the notes, and assigned a recovery rating of '4' (indicating S&P's expectation of average [30% to 50%] recovery in the event of a payment default). Heinz will use proceeds from the notes offering along with the new term loan credit facilities and equity contributions from 3G Capital and Berkshire Hathaway to fund the purchase of the company, repay existing debt, and pay related fees and expenses. S&P estimates that the Pittsburgh- based company will have roughly $13.9 billion of adjusted debt outstanding following its leveraged buyout. On March 12, 2013, S&P indicated that it would lower the long-term corporate credit rating to 'BB-' from 'BBB+', and the short-term rating to 'B' from 'A-2' following its resolution of the CreditWatch listing. The downgrade would reflect S&P's view that Heinz's financial risk profile will be 'highly leveraged' following its leveraged buyout. S&P understands that the company intends to roll over $868 million of notes consisting of $231.1 million debentures due 2028, $202.2 million notes due 2030, and $435.1 million notes due 2032. As a result of S&P's expected outcome upon resolution of the CreditWatch listing, it expects to lower the senior unsecured debt rating to 'BB-' (from 'BBB+') and assign a '4' recovery rating, indicating S&P's expectation of average (30% to 50%) recovery in the event of a payment default. Heinz's business risk profile remains 'strong.' Key credit factors in S&P's assessment of Heinz's business risk profile include its broad portfolio of branded products, strong geographic diversity, and history of relatively stable operating margins. However, the company is exposed to volatile commodity costs and participates in the highly competitive packaged food industry. Heinz's strong business risk profile also reflects the company's diversified product categories and strong brand names. For the complete corporate credit rationale, see Standard & Poor's research report on H.J. Heinz, published on March 12, 2013 on RatingsDirect. RATINGS LIST H.J. Heinz Co. Corporate credit rating BBB+/Watch Neg/A-2 NEW RATING H.J. Heinz Co. Senior secured Proposed $2.1 bil. 2nd lien notes notes due 2020 BB- Recovery rating 4 HELLER EHRMAN: Status Conference on May 7 ----------------------------------------- Bankruptcy Judge Dennis Montali will hold a status conference in four adversary proceedings initiated by Heller Ehrman LLP -- by and through its plan administrator, Michael Burkart -- to schedule trial and take up any other matters on May 7, 2013, at 1:30 p.m. On Monday, Judge Montali ruled that four law firms subject to those lawsuits -- Jones Day, Davis Wright Tremaine LLP, Foley & Lardner LLP and Orrick, Herrington & Sutcliffe LLP -- owe Heller Ehrman's estate for the profits they made on work that originated at Heller before its demise. Jacqueline Palank, writing for Dow Jones Newswires, reported the trial will be held to determine the specific dollar amounts, if any, the firms must pay Heller. Dow Jones said the court's ruling is likely to be appealed. In 2010, the Heller Ehrman plan administrator filed multiple adversary proceedings against various law firms to which Heller's former shareholders transferred, seeking to recover profits those firms earned while completing former Heller client matters that were pending but unfinished on the date of the Debtor's dissolution. Many of the lawsuits have been settled, but the actions against the four law firms remain pending. Heller has filed motions for partial summary judgment contending that as a matter of undisputed fact, it has established the existence of three elements of fraudulent transfer actions and the absence of an essential element of a "safe harbor" defense to such actions. The law firms opposed, and filed cross-motions for summary judgment. In Monday's ruling, the Court granted Heller's motions for partial summary judgment and denied the cross-motions. "The court is satisfied that Heller is entitled to partial summary judgment on all of the issues raised by it in the [motions for partial summary judgment] and that Defendants are not entitled to summary judgment on their cross-motions. What remains, therefore, is proof at trial of the extent of Heller's damages, namely the amount earned by Defendants as profit on the unfinished business," said Judge Montali. A copy of Judge Montali's March 11, 2013 Memorandum Decision is available at http://is.gd/2FBxq1from Leagle.com. Before its dissolution in September 2008, Heller was a global law firm with approximately 700 lawyers. Heller was a limited liability partnership composed of eight partners, all of which were professional corporations. The shareholders of those corporations provided the legal services to Heller's clients and delegated the management of Heller to officers and committees composed of Shareholders. In September 2008, Bank of America declared Heller to be in default of its covenants relating to a $35 million revolving line of credit and a $10 million long-term loan, and eventually seized control of Heller's bank accounts. As a result, the partners voted to dissolve the firm on Sept. 26, 2008, pursuant to a written dissolution plan. Heller notified clients that it would cease providing legal services by Oct. 31, 2008. Heller included in its Dissolution Plan a provision now commonly referred to as the "Jewel Waiver," waiving any rights and claims under the doctrine of Jewel v. Boxer, 156 Cal.App.3d 171 (1994) "to seek payment of legal fees generated after the departure date of any lawyer or group of lawyers with respect to non-contingency/non- success fee matters only." Thereafter, Heller's Dissolution Committee learned that its secured lenders had filed a financing statement with the Secretary of State in September 2008. Recognizing that Heller could possibly avoid the liens under the Bankruptcy Code's preference provisions, Heller filed for Chapter 11 bankruptcy. About Heller Ehrman Headquartered in San Francisco, California, Heller Ehrman, LLP -- http://www.hewm.com/-- was an international law firm of more than 730 attorneys in 15 offices in the United States, Europe, and Asia. Heller Ehrman filed a voluntary Chapter 11 petition (Bankr. N.D. Cal., Case No. 08-32514) on Dec. 28, 2008. Members of the firm's dissolution committee led by Peter J. Benvenutti approved a plan dated Sept. 26, 2008, to dissolve the firm. The Hon. Dennis Montali presides over the case. Pachulski Stang Ziehl & Jones LLP assisted the Debtor in its restructuring effort. The Official Committee of Unsecured Creditors is represented by Felderstein Fitzgerald Willoughby & Pascuzzi LLP. The firm estimated assets and debts at $50 million to $100 million as of the Petition Date. According to reports, the firm had roughly $63 million in assets and 54 employees at the time of its filing. The Court confirmed Heller Ehrman's Plan of Liquidation in September 2010. HB02WORKS LLC: Updated Case Summary & Creditors' Lists ------------------------------------------------------ Lead Debtor: HB02WORKS, LLC 5197 Brandywine Lane Frisco, TX 75034 Bankruptcy Case No.: 13-40635 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtors' 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 Affiliates that simultaneously filed separate Chapter 11 petitions: Debtor Case No. ------ -------- HB02 America, LLC 13-40636 Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Michael D. Kindcade, Owner/COO. A. A copy of HB02WORKS's list of its 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txeb13-40635.pdf B. A copy of HB02 America's list of its 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txeb13-40636.pdf HIGH BANKS: Case Summary & Unsecured Creditor --------------------------------------------- Debtor: High Banks Ranch Limited Partnership 525 Harlow Road Springfield, OR 97477 Bankruptcy Case No.: 13-60735 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court District of Oregon Judge: Thomas M. Renn Debtor's Counsel: Julia I. Manela, Esq. THE SCOTT LAW GROUP 497 Oakway Rd #245 Eugene, OR 97401 Tel: (541) 868-8005 E-mail: ecf@scott-law-group.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Hamilton W Budge Jr. Attorney $20,000 725 Country Club Rd Eugene, OR 97401 The petition was signed by Blake R. Hastings, general partner. HOLLYWOOD BOULEVARD: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Hollywood Boulevard Cinema, LLC 1001 W. 75th Street, Suite 153 Woodridge, IL 60517 Bankruptcy Case No.: 13-09232 Chapter 11 Petition Date: March 8, 2013 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Paula K. Jacobi, Esq. BARNES & THORNBURG, LLP 1 North Wacker Drive, Suite 4400 Chicago, IL 60606 Tel: (312) 214 4866 Fax: (312) 759-5646 E-mail: pjacobi@btlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb13-09232.pdf The petition was signed by Ted C. E. Bulthaup III, manager. HOSTESS BRANDS: Bakers Union Fights Cake Buyers Over Jobs --------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that a Hostess Brands Inc. bakers union continued to battle with the bankrupt snack icon Tuesday when it challenged the proposed sales of some of Hostess' cake brands, saying none of the potential purchasers have committed to preserving jobs. The report related that the Bakery Confectionery Tobacco Workers and Grain Millers International Union said in a court filing that the proposed sale orders for Hostess' Drake's brand, as well as a few others, have gone as far as to disclaim any obligation to consider employing any workers. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November 2012 opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process was expected to be completed in one year. HOSTESS BRANDS: Says Justice Department Reviewing Flowers Deal -------------------------------------------------------------- Dawn McCarty, writing for Bloomberg News, reported that Hostess Brands Inc. Chief Executive Officer Greg Rayburn said Flowers Foods Inc. (FLO)'s bid to buy most of the bankrupt baking company's bread brands is going through U.S. Justice Department review. Hostess is working closely with the department to clear "hurdles," Rayburn said in an interview on Bloomberg Television's "In the Loop" with Betty Liu. Flowers, based in Thomasville, Georgia, made the only qualified offer for Hostess's Wonder, Butternut, Home Pride, Merita and Nature's Pride brands, as well as 20 bread plants, 38 depots and other assets, Bloomberg related. Hostess, based in Irving, Texas, declared the $360 million bid the highest and best, eliminating the need for the scheduled Feb. 28 auction. A March 19 hearing has been set in U.S. Bankruptcy Court in White Plains, New York, for review and approval of the purchase, Bloomberg said. The deal is also subject to regulatory approvals, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and closing conditions, Flowers said in a Feb. 28 regulatory filing. The planned sales of most of Hostess's bread business shouldn't be approved as currently structured because the buyers would be improperly released from liabilities and legal obligations, Bloomberg related Manhattan U.S. Attorney Preet Bharara's March 1 objection to agreements reached with Flowers and Grupo Bimbo SAB (BIMBOA), which plans to buy the Beefsteaks brand for about $31.9 million. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November 2012 opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process was expected to be completed in one year. HOSTESS BRANDS: Selects McKee Foods as Winning Bidder for Drake's ----------------------------------------------------------------- Hostess Brands Inc. on March 14 announced that the stalking horse bid submitted by McKee Foods Corporation for the Drake's(R) snack cake brand will be the bid presented for approval to the U.S. Bankruptcy Court as no other qualified bids were received for those assets. McKee has agreed to pay $27.5 million for the Drake's(R) brand and certain equipment. Drake's products include Ring Dings, Yodels, Devil Dogs, Yankee Doodles, Sunny Doodles, and Drake's Coffee Cake. The Company will ask the U.S. Bankruptcy Court for the Southern District of New York to approve the transaction at a hearing on April 9. Separately, Hostess Brands will proceed with an auction for its Sweetheart(R), Eddy's(R), Standish Farms(R), and Grandma Emilie's(R) bread brands on March 15 after the Company received additional qualified offers. United States Bakery, Inc., as the stalking horse bidder, has agreed to pay $30 million for the brands, four bakeries, and 14 depots, plus certain equipment. The Company's other proposed transactions include: -- The sale of the majority of the Company's snack cake business to affiliates of Apollo Global Management, LLC and Metropoulos & Co. Apollo and Metropoulos have agreed to pay $410 million for the assets, which include both Hostess(R) and Dolly Madison(R) branded products, five bakeries and certain equipment. Among the products included are the Company's Twinkies(R), Ho Hos(R), Ding Dongs(R), and Donettes(R) snack cakes. -- The sale of the majority of the Company's bread business, including its Wonder(R) brand, to Flowers Foods, Inc. for $360 million. The agreement includes, in addition to the brands, 20 bakeries, 38 depots and other assets. -- The sale of the Beefsteak(R) bread brand to Grupo Bimbo, S.A.B. de C.V. for $31.9 million. Hostess Brands will seek Court approval of the above transactions on March 19. Jones Day provided legal advice to Hostess Brands on all of the transactions. Perella Weinberg Partners served as the Company's financial advisor. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November 2012 opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process was expected to be completed in one year. HUNTER DEFENSE: Revenue Pressures Cue Moody's to Lower CFR to B3 ---------------------------------------------------------------- Moody's Investors Service downgraded Hunter Defense Technologies, Inc.'s ratings including its Corporate Family Rating to B3 from B2 and Probability of Default Rating to B3-PD from B2-PD. Concurrently, Moody's lowered the ratings on the company's first and second lien bank debt to B2 and Caa2, respectively. The ratings outlook changed to stable from negative. Ratings downgraded: Corporate Family Rating to B3 from B2; Probability of Default Rating to B3-PD from B2-PD; $20 million first lien revolver due August 2013, to B2 (LGD-3, 39%) from B1 (LGD-3, 39%) $149 million outstanding first lien term loan (originally $200 million) due August 2014, to B2 (LGD-3, 39%) from B1 (LGD-3, 39%) $44 million outstanding second lien term loan (originally $80 million) due February 2015, to Caa2 (LGD-5, 88%) from Caa1 (LGD-5, 89%) Outlook, stable Ratings Rationale: The ratings downgrade was prompted by Moody's expectation that leverage and interest coverage metrics over the next twelve to eighteen months will weaken and will be more reflective of a B3 CFR. Operating performance is expected to continue to be pressured by defense budget cuts including mandatory budget cuts through Sequestration and uncertainty regarding the extension of the Continuing Resolution expiring at the end of the month. Lower U.S. troop levels combined with lower than anticipated international sales to offset the lower domestic sales have pressured both revenues and profitability. In addition, the combination of meaningful debt maturities coming due within the next eighteen months and anticipated tight covenant headroom have also been considered in the ratings. The stable rating outlook is supported by the company's relatively consistent backlog levels that provide a degree of near-term revenue visibility and an adequate liquidity profile supported by continued positive free cash flow generation. Hunter Defense's B3 corporate family rating reflects the company's relatively small revenue scale, credit metrics that are likely to be reflective of the B3 rating category over the intermediate term and the historically volatile nature of shelter sales. Performance volatility from quarter to quarter stems from the timing of orders and Department of Defense funding delays. Furthermore, the realization of orders in the company's backlog could also be affected by delays resulting from defense budget pressures. However, the ratings also consider the ongoing long-term U.S. military demand for Hunter's technologically advanced mobile shelter systems and related products for military training purposes as well as ongoing military maintenance needs. Other factors underlying the B3 CFR include the company's effective focus on working capital management and the resulting ability to use approximately $70 million of generated cash flow to permanently repay debt since mid-2011. Hunter's ratings could be subject to downward revision if the company's liquidity position weakens including not extending upcoming debt maturities, or if debt is increased for large levered acquisitions or equity distributions in particular. Credit metrics that may result in a downgrade include EBIT/interest declining below 1.0x and debt/EBITDA exceeding 6.0x on a sustained basis. The ratings could be upgraded if the company is able to achieve EBIT/interest coverage above 1.5x and debt/EBITDA improving to and sustained below 5.0x. In addition, a refinancing extending debt maturities and increasing covenant headroom would also support positive ratings consideration. The principal methodology used in this rating was the Global Aerospace and Defense published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. Hunter Defense Technologies, Inc., headquartered in Solon, OH, is a provider of tactical shelters, CBRN (chemical, biological, radiological, nuclear) filters and collective protective systems, and mobile power and temperature control equipment for the U.S. military and Homeland Security. Annual revenues approximate $250 million. Hunter Defense is majority owned by the private equity firm Metalmark Capital. J.F.B.C. LLC: Case Summary & Largest Unsecured Creditor ------------------------------------------------------- Debtor: J.F.B.C., LLC 950 Grand Bay Wilmer Road S. Mobile, AL 36608 Bankruptcy Case No.: 13-00830 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Southern District of Alabama (Mobile) Debtor's Counsel: Robert M. Galloway, Esq. GALLOWAY WETTERMARK EVEREST RUTENS & GAILLARD P.O. Box 16629 Mobile, AL 36616-0629 Tel: (251) 476-4493 E-mail: bgalloway@gallowayllp.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 In its list of 20 largest unsecured creditors, the Company placed only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Bank First $3,000,000 P.O. Box 1248 Columbus, MS 39703 The petition was signed by Percy Joseph Roberts, owner. JEFFERSON COUNTY, AL: Aims to File Chapter 9 Plan in Early June --------------------------------------------------------------- Katy Stech, writing for Dow Jones' Daily Bankruptcy Review, reported that Jefferson County, Ala., leaders expect to file a bankruptcy-exit plan to the court in early June that will show how much it intends to pay back bondholders who extended $3.6 billion to fix its leaky sewer system, a county official said. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley Arant Boult Cummings LLP and Klee, Tuchin, Bogdanoff & Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. KARAM INC: Case Summary & 8 Unsecured Creditors ----------------------------------------------- Debtor: Karam Inc. 1210 N. 12th Street Murray, KY 42071-3588 Bankruptcy Case No.: 13-50197 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Western District of Kentucky (Paducah) Debtor's Counsel: Michael Allan Noll, Esq. NOLL LAW OFFICE 2950 Breckenridge Lane, Suite 13 Louisville, KY 40220 Tel: (502) 272-0777 Fax: (502) 459-4277 E-mail: Mike@NollLawOffice.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's eight largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/kywb13-50197.pdf The petition was signed by Sewa S. Bhinder, president. LEE'S FOODSERVICE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Lee's Foodservice Parts & Repairs, Inc. fdba Lee's Oven Repair Service fdba Howard Equipment Services, Inc. fdba Howard Transport Company 230 Laura Dr. Addison, IL 60101 Bankruptcy Case No.: 13-09454 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: William J. Factor, Esq. Jeffrey K. Paulsen, Esq. THE LAW OFFICE OF WILLIAM J. FACTOR, LTD 1363 Shermer Road, Suite 224 Northbrook, IL 60062 Tel: (847) 239-7248 Fax: (847) 574-8233 E-mail: wfactor@wfactorlaw.com jpaulsen@wfactorlaw.com Scheduled Assets: $804,091 Scheduled Liabilities: $1,106,522 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/ilnb13-09454.pdf The petition was signed by Brian Anderson, president. LEHMAN BROTHERS: Lands 'London Whale' Deposition in JPMorgan Row ---------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that Lehman Brothers Holdings Inc. may question a former JPMorgan Chase Bank NA trader known as the "London Whale" after a New York bankruptcy judge said Wednesday that he could not restrict Lehman's efforts to prove its case that the bank was integral to its downfall. The report related that U.S. Bankruptcy Judge James M. Peck granted Lehman's bid to obtain a subpoena against former JPMorgan trader Bruno Iksil, who became notorious for causing billions in losses in trades. Iksil lives in France, which is where he will be deposed, the report added. 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. LLC CRAIG: Case Summary & 7 Unsecured Creditors ----------------------------------------------- Debtor: LLC Craig 95 3824 S. Jones Boulevard, #F Las Vegas, NV 89103 Bankruptcy Case No.: 13-11935 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court District of Nevada (Las Vegas) Judge: Linda B. Riegle Debtor's Counsel: David Mincin, Esq. MINCIN LAW, PLLC 528 S. Casino Center, #325 Las Vegas, NV 89101 Tel: (702) 589-9881 Fax: (702) 388-4393 E-mail: dmincin@lawlasvegas.com Scheduled Assets: $2,617,095 Scheduled Liabilities: $7,976,591 A copy of the Company's list of its seven largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/nvb13-11935.pdf The petition was signed by Alizera Kaveh, manager. LIGHTSQUARED INC: Wins Approval to Get Additional $5-Mil. DIP Loan ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York amended its earlier order that authorized Lightsquared Inc. and its affiliates to obtain $41.4 million loan from U.S. Bank National Association. In a March 13 decision, the bankruptcy court authorized Lightsquared to borrow an additional $5 million loan, increasing the total amount of loan from $41.4 million to $46.4 million. More than $1.8 million of the $5 million loan will come from Mast OC I Master Fund, L.P. while more than $1.646 million will come from Mast Credit Opportunities I Master Fund Ltd. The bankruptcy court also ordered the company to use the new loan only for general corporate purposes. A copy of the March 13 order is available for free at http://is.gd/VNNpOZ About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented LightSquared from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LOCUST STREET: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Locust Street Lofts, L.P. 416 N. 23rd Street St. Louis, MO 63103 Bankruptcy Case No.: 13-41942 Chapter 11 Petition Date: March 8, 2013 Court: U.S. Bankruptcy Court Eastern District of Missouri (St. Louis) Debtor's Counsel: Vincent D. Vogler, Esq. THE VOGLER LAW FIRM, P.C. Two City Place Drive, Suite 150 P.O. Box 419037 St. Louis, MO 63141-9037 Tel: (314) 567-7970 E-mail: vdvogler@earthlink.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 Bill L. Bruce, manager. MACCO PROPERTIES: U.S. Trustee Wants Case Converted to Chapter 7 ---------------------------------------------------------------- Richard A. Wieland, United States Trustee for Region 20, asks the Bankruptcy Court to convert the Chapter 11 case of Macco Properties Inc. to one under Chapter 7 of the Bankruptcy Code, citing: 1. The debtor has failed to satisfy all outstanding creditor claims upon the closing of the sale of Macco's membership interest in MA Cedar Lake Apartments, LLC, to 250 West, LLC, and Jennifer A. Price. Macco previously held a 100% membership interest in Cedar Lake. 2. This case has been pending since October 2010. When Price sought the Court's approval of the sale of this debtor's estate to her, she represented that All America Bank and the remaining creditors would be "satisfied in full." Rather than abide by those terms and her representations, the debtor has filed objections to claims. "Simply stated, for Price to represent that all estate claims will be paid at closing and then subsequently object to those claims is incongruoous," the UST said. 3. The actions of the debtor since the sale closing are indicative of an inability to reorganize. This is demonstrated by utilizing delay tactics, such as claim objections and delay of payment of creditors, to avoid the commitments previously promised to obtain a benefit (approval of the sale). 4. Subsequent to the Nov. 28, 2012 sale closing, the debtor-in- possession's payment for insurance coverage was returned for insufficient funds. 5. The UST believes that since the closing additional administrative claims approximating $165,000 now exist and have gone unpaid. 6. The debtor is delinquent in filing of the monthly operating reports. The last monthly operating report was filed by the Chapter 11 trustee through Nov. 28, 2012. 7. The debtor has underpaid disbursement fees owed pursuant to 28 U.S.C. Section 1930(a)(6). The debtor is delinquent $650 and is currently accruing additional fees for the first quarter of 2013. A copy of the UST Motion is available at: http://bankrupt.com/misc/maccoproperties.doc1446.pdf About Macco Properties Oklahoma City, Oklahoma-based Macco Properties, Inc., is a property management company that is the sole or controlling member and/or manager of numerous multi-family residential rental units in Oklahoma City, Oklahoma, Wichita, Kansas, and Dallas, Texas, and several and commercial business properties in Oklahoma City, Oklahoma, and Holbrook, Arizona. The Company filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10-16682) on Nov. 2, 2010. The Debtor disclosed $50,823,581 in total assets, and $4,323,034 in total liabilities. Receivership Services Corp., a division of the Martens Cos., serves as property manager for the six Wichita apartment complexes caught up in the bankruptcy of Macco Properties of Oklahoma City. Michael E. Deeba, the Chapter 11 trustee, is represented by Christopher T. Stein, of counsel to the firm of Bellingham & Loyd, P.C. Grubb & Ellis/Martens Commercial Group LLC, to act as the Chapter 11 Trustee's exclusive listing broker/realtor for properties. The trustee wants to real estate holdings wants to sell some of the property off, including a luxury high-rise condominium in Dallas valued at more than $2.5 million and several run-down apartment complexes in the metro area. The Official Unsecured Creditors' Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City, Oklahoma. MEDIPATTERN CORP: Enters Into MOU to Settle Outstanding Debt ------------------------------------------------------------ The Medipattern Corporation on March 13 disclosed that it has received an offer for the settlement of approximately $5,673,876.36, which includes principal and interest owning to certain holders of notes issued by the Company in December 2012, March 2011 and May 2010. The 2012 Notes are secured by a general security agreement, pursuant to which the Company granted the holders a security interest over all of the assets and intellectual property of the Company. The 2011 Notes are secured by a technology security agreement, pursuant to which the Company granted the holders a security interest over certain intellectual property of the Company. On February 17, 2013, the collateral agent under the General Security Agreement and Technology Security Agreement, on behalf of the holders of 2012 Notes, delivered a written demand to the Company for the full redemption of the 2012 Notes, including all accrued interest in connection therewith. Also on February 17, 2013, the collateral agent, on behalf of the holders of the 2011 Notes and the 2010 Notes, delivered written notice to the Company that an Event of Default had occurred and declared the principal amount and all accrued and unpaid interest in connection therewith immediately due and payable. As part of the demand for payment under the Notes, the Lenders postponed enforcing their rights under the Notes, the General Security Agreement and the Technology Security Agreement for a period of thirty days in hopes of reaching a negotiated settlement with the Company of all Indebtedness. The Company and the Lenders have entered into a memorandum of understanding in respect of the settlement of all outstanding Indebtedness owed by the Company to the Lenders. The principal terms of the MOU are as follows: (a) The Company shall establish a wholly-owned subsidiary ("Newco") to be incorporated under the laws of the state of Delaware, United States, or such other state as the parties shall agree; (b) The board of directors of Newco shall consist of a minimum of three members, with no fewer than two members to be appointed by the collateral agent and one member appointed by the Company; (c) Following the establishment of Newco, the Company shall effect a transfer to Newco of the entirety of its operations and all of its assets relating to its "Visualize: Vascular(TM)" and "B-CAD(R)" product/service offerings and the commercial rights associated therewith; (d) For regulatory purposes, the Company shall maintain an office for Newco in such a location and for the necessary period of time that it takes to provide for a seamless transfer of all FDA, ISO, QSR and related approvals and certifications necessary to operate the "Visualize: Vascular" and "B- CAD" businesses; (e) Transfer to Newco all of the Indebtedness owed to the Lenders pursuant to the Notes, including the New Notes (as defined below), all additional accrued interest and any other costs or fees owing to the Lenders; (f) The Company and Newco will enter into a royalty agreement(s) relating to the "Visualize: Vascular" and "B-CAD" businesses, with the principal terms as outlined below: "Visualize: Vascular" Royalty (i) Newco shall pay to the Company a royalty (the "Visualize Royalty") equal to: (1) $1.00 per paid scan over 5,000 paid scans per month; and (2) $1.50 per paid scan over 15,000 paid scans per month; (ii) Newco shall be granted a perpetual option to purchase the Visualize Royalty (the "Visualize Purchase Option"). The Visualize Purchase Option may not be exercised by Newco prior to the date that is eighteen months from the closing of the restructuring transactions set forth in this Agreement (the "Visualize Purchase Option Start Date"); (iii) If Newco exercises the Visualize Purchase Option prior to the date that is six (6) months from the Visualize Purchase Option Start Date, then the purchase price for the Visualize Royalty paid by Newco, shall be equal to the greater of three times (3x) the aggregate sum of all royalty payments for the previous twelve (12) month period or $1,000,000; and (iv) Following the date that is six (6) months from the Visualize Purchase Option Start Date, the purchase price for the Visualize Royalty paid by Newco, shall be equal to three times (3x) the aggregate sum of all royalty payments for the previous twelve (12) month period. "B-CAD" Royalty (i) Newco shall pay to the Company a royalty (the "B- CAD Royalty") equal to $150.00 per B-CAD license sold; (ii) Newco shall be granted a perpetual option to purchase the B-CAD Royalty (the "B-CAD Purchase Option"). The B- CAD Purchase Option may not be exercised by Newco prior to the date that is eighteen (18) months from the closing of the restructuring transactions set forth in this Agreement (the "B-CAD Purchase Option Start Date"); (iii) If Newco exercises the B-CAD Purchase Option prior to the date that is six (6) months from the B-CAD Purchase Option Start Date, then the purchase price for the B-CAD Royalty paid by Newco, shall be equal to the greater of three times (3x) the aggregate sum of all royalty payments for the previous twelve (12) month period or $150,000; and (iv) Following the date that is six (6) months from the B-CAD Purchase Option Start Date, the purchase price for the B-CAD Royalty paid by Newco, shall be equal to three times (3x) the aggregate sum of all royalty payments for the previous twelve (12) month period. (g) Upon completion of all of the above referenced transactions and any others necessary to give full effect to the intent of the parties pursuant to the MOU (the "Closing"), the Lenders shall enter into full and final releases with the Company in respect of the total Indebtedness owing to the Lenders in exchange for the issuance of shares of Newco, such number of shares to be determined by the board of directors of Newco in relation to the proportionate amount of the total Indebtedness being settled by each Lender; and (h) Following Closing, the collateral agent will seek new partners and additional funding, through the issuance of additional equity of Newco, to ensure the long term viability of Newco. Pursuant to the terms of the MOU, the Company received $154,000 under the term debt facility announced on November 7, 2012. Medipattern issued $154,000 of secured notes under the Facility. The New Notes mature on June 30, 2013, and will bear interest at the rate of 6% per annum, calculated monthly and payable at maturity. The New Notes are secured by the General Security Agreement and are subject to certain redemption and repayment rights. The New Notes will be repaid as part of the Debt Settlement. The New Notes are subject to a four month and one day resale restriction. The securities offered in the placement have not been and will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons except in certain transactions exempt from the registration requirements of the U.S. Securities Act. The Corporation also announced the resignation of one of its directors, Howard Rosen. Mr. Rosen has advised Medipattern that he has decided to spend more time focusing on his other business pursuits. At this time, the Board of Directors would like to express its gratitude to Mr. Rosen for his time and efforts over the many years he has served as a director of Medipattern. About the Medipattern Corporation Medipattern(R) -- http://www.medipattern.com-- engages in the development and commercialization of healthcare solutions that positively impact people's lives through the prevention of disease and analysis of medical images and data. MERRILL COMMS: Moody's Removes Provisional Designation on B3 CFR ---------------------------------------------------------------- Moody's removed the provisional designation on Merrill Communications LLC's (New) B3 corporate family rating, $30 million first-out senior secured revolver Ba3 rating, and $430 million senior secured term loan B1 rating. Moody's also assigned the company a B3-PD probability of default rating. The provisional ratings were assigned pending the execution of the proposed restructuring support agreement and the closing of the financing. The ratings outlook is stable. Ratings assignments: Issuer: Merrill Communications LLC (New) Corporate Family Rating of B3 Probability of Default Rating of B3-PD US$30 million first-out senior secured revolving credit facility due 2018 at Ba3 (LGD1, 1%) US$430 million senior secured term loan due 2018 at B1 (LGD3, 31%) Moody's also revised the PDR of Merrill Corporation (the pre- restructuring entity) to D-PD from Ca/LD-PD to reflect the closing of Merrill's out-of-court debt restructuring. Moody's viewed the July 2012 revolver extension as a default on the first lien revolver and term loan. The conversion of the second lien term loan into HoldCo notes and equity is considered by Moody's as a default on the second lien obligation. Moody's affirmed the CFR and instrument ratings of the pre-restructuring entity and will withdraw them and the pre-restructuring entity's PDR within three business days following this rating action. Ratings Rationale: The B3 CFR reflects Merrill's relatively high leverage and adequate interest coverage pro-forma for the out-of-court debt restructuring. The restructuring does not materially change debt levels, and Merrill's debt/EBITDA (including the HoldCo notes), will remain in the mid-5 times range and interest coverage (including both senior secured and HoldCo note interest) will improve slightly to the high-1 times (EBITDA-CapEx)/interest expense from mid-1 times. However, Merrill will benefit from substantially improved liquidity, due to meaningful free cash flow generation and long term debt maturities. The rating also incorporates the dependence of the company's earnings on volatile capital markets cycles and its operations in the highly competitive transaction services, legal and regulatory businesses, partially offset by Merrill's strong position in the majority of its markets. The stable outlook reflects Moody's expectations of steady near- term operating performance and substantial improvement in cash flow generation post-restructuring due in part to the expectation of PIK interest on the holdco notes. The ratings could be downgraded if Merrill's operating performance, liquidity or market position deteriorate, or if Moody's comes to expect that debt/EBITDA will be sustained above 6 times (including Moody's adjustments). The ratings could be upgraded if Merrill steadily grows profitability, demonstrates a commitment to debt reduction and substantially improves credit metrics. A ratings upgrade will likely require debt/EBITDA sustained below 4.5 times (including Moody's adjustments) and a good liquidity position including FCF/debt over 10%. The methodologies used in this rating were Global Business & Consumer Service Industry Rating Methodology published in October 2010, and Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Merrill Communications LLC (New) 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 fiscal year ended January 31, 2013. MF GLOBAL: Wins Court Nod to Settle Intercompany Claims ------------------------------------------------------- U.S. Bankruptcy Judge Martin Glenn approved the agreement resolving JP Morgan Chase Bank N.A.'s dispute with MF Global Holdings Ltd. over the value of intercompany claims. Under the deal, MF Global will subordinate $275 million of its $1.887 billion claim against its finance unit below JPMorgan's $1.2 billion claim against the estate. As part of the settlement, JPMorgan agreed to vote in favor of MF Global's liquidation plan, and withdrew its earlier request to pursue MF Global Finance USA Inc.'s claim to knock out a $928 million claim against the finance unit. JPMorgan's claim is associated with the $1.2 billion revolving credit facility it arranged for MF Global, of which about $928 million was transferred to the finance unit before the bankruptcy. The transfer resulted in the finance unit owing money to both MF Global and the lenders, including JPMorgan. JPMorgan, which has claims against both MF Global and the finance unit, is currently projected to recoup up to 73 cents on the dollar but that figure could increase as a result of the settlement. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said on Nov. 3 last year, according to Bloomberg News. MF GLOBAL: Court Approves Supplements to Plan Outline ----------------------------------------------------- U.S. Bankruptcy Judge Martin Glenn approved the supplements to the disclosure statement describing MF Global Holdings Ltd.'s proposed liquidation plan. The supplements contain a revision to provisions of the plan outline governing the settlement of intercompany claims, set-offs and allowance of so-called "liquidity facility unsecured claims." MF Global revised the provisions as part of a settlement it reached with JPMorgan Chase Bank N.A. to resolve the bank's request to pursue claims against the company as well as its objections to the settlement. Judge Glenn authorized the trustee of MF Global and his co-plan proponents to continue to solicit votes on the liquidation plan. The bankruptcy judge ordered the plan proponents to file an affidavit regarding votes on the plan by 12:00 p.m. (Eastern time) on March 29. Any creditor entitled to vote must submit its ballot by 4:00 p.m., on March 25. The hearing to consider confirmation of the liquidation plan will begin at 10:00 a.m., on April 5. Objections to the plan must be filed by 4:00 p.m., on March 25. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said on Nov. 3 last year, according to Bloomberg News. MF GLOBAL: Judge Approves Accord with JPMorgan ---------------------------------------------- Nick Brown, writing for Reuters, reported that a bankruptcy judge on Wednesday approved a settlement that will increase JPMorgan Chase & Co's potential recoveries from the liquidation of MF Global Holdings to as much as 76 cents for every dollar in claims. The deal resolves a complaint from JPMorgan over the value of an intercompany settlement among MF Global affiliates, according to Reuters. That complaint had posed a potentially significant obstacle to getting creditor support and court approval for MF Global's payout plan. Reuters related that in an order entered in U.S. Bankruptcy Court in Manhattan, Judge Martin Glenn approved a supplement to the payback plan that raises the maximum projected recovery for JPMorgan for its $1.2 billion loan. Its recovery had maxed out at about 73 percent in an earlier version of the plan. The settlement also provides for a slight increase in the size of JPMorgan's claim. The supplement, Reuters added, decreases the projected maximum payout for unsecured creditors of MF Global's finance unit to 34.4 cents on the dollar, down from 39 cents in the earlier plan. There was little change for unsecured creditors of MF's parent entity, with a maximum projected recovery of roughly 34 percent of claims, according to Reuters. Commodity trader customers of MF Global's broker-dealer unit are expected to recover all of their money. About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said on Nov. 3 last year, according to Bloomberg News. MILLER AUTOMOTIVE: Withdrawal Bid a Case of Forum Shopping ---------------------------------------------------------- Miller Automotive Group Inc. -- d/b/a Miller Chrysler Dodge, d/b/a Miller Chrysler Dodge Jeep, Inc. -- filed a Chapter 11 petition (Bankr. W.D. Mo. Case No. 13-20027) on Jan. 11, 2013. On Jan. 29, Bankruptcy Judge Dennis R. Dow issued an order approving use of cash collateral. However, on Feb. 11, the Bankruptcy Court denied the Debtor's request for continued use of cash collateral. The Debtor initiated a proceeding before the District Court, arguing that the adverse impact of the Bankruptcy Court's Feb. 11 decision justifies withdrawing the reference to the Bankruptcy Court. The Debtor expressed concern about what it perceives to be procedural impediments to its effort to have its Emergency Motion to Withdraw Reference considered. However, Senior District Judge Ortrie D. Smith denied the Debtor's Request to Withdraw Reference in a March 11, 2013 Order available at http://is.gd/DFb5Yefrom Leagle.com. "The Court has no doubt that it has the power to withdraw the reference of this bankruptcy proceeding to the Bankruptcy Court . . . . The Court is not convinced that it should do so, much less (as Debtor intimates) that it must do so. In large measure, Debtor seeks withdrawal as part of an effort to persuade a different judge to do what the Bankruptcy Court has already declined to do -- a classic case of forum shopping. Permitting withdrawal of the reference for such a purpose defeats the entire reason bankruptcy courts exist and renders the practice of routinely referring bankruptcy cases to bankruptcy courts an exercise in futility. It is also worth noting that Debtor cites no authority suggesting withdrawal of the reference is justified in these circumstances, and those courts that have addressed section 157(d) have created standards that clearly counsel against granting Debtor's motion." "To the extent Debtor seeks withdrawal of the reference simply to revisit (or even initially consider) core bankruptcy proceedings, the Court concludes the matter is best left with the bankruptcy court." All other motions for relief are denied without prejudice to the Debtor's right to direct those requests to the Bankruptcy Court. MODERN PLASTICS: New Products Purchases $1.2-Mil. Mortgage Note --------------------------------------------------------------- New Products Corporation (NPC) has purchased the mortgage loan for Modern Plastics Corporation, a neighboring manufacturing company that went out of business and is now in bankruptcy. Bank of America, which owned the mortgage note, with an unpaid balance of approximately $1.2 million, recently offered it for sale through a sealed bid process. NPC was the highest bidder. "NPC's purchase of this mortgage reflects an ongoing commitment to our community," said Cheryl Miller, NPC's president and CEO. "I am also following in the footsteps of my grandfather and dad, who led the company for many years. They often made equipment and property purchases, designed to contribute to our company's success and longevity." Modern Plastics Corporation was owned by Cheryl Miller's uncle, now deceased. "As owners of Modern Plastics' mortgage, we can have a greater say in what happens to the real estate and buildings that are pending resolution in bankruptcy court," said Cheryl Miller, NPC's president and CEO. "We want to ensure our operations are not totally encircled by Harbor Shores, and that Modern Plastics' property is developed in a way that creates job opportunities for people in Benton Harbor." Because of the change in ownership of Modern Plastics' mortgage, the previously scheduled March 6 bankruptcy hearing about the pending decision of real estate and buildings was rescheduled to 10 a.m. on Wednesday, May 1, 2013, in Bankruptcy Court in Kalamazoo. MONITOR COMPANY: Has Until April 1 to Use Cash Collateral --------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware gave interim authority for Monitor Company Group Limited Partnership, et al., to use until April 1 the cash collateral to satisfy their administrative obligations in connection with their Chapter 11 cases while they perform their obligations after the sale of substantially all of their assets to Deloitte Consulting LLP and DCSH Limited. Judge Sontchi will convene a hearing on April 1 to consider final approval of the cash collateral use request. Objections to the final approval are due March 25. About Monitor Company Monitor Company Group LP -- http://www.monitor.com/-- is a global consulting firm with 1,200 personnel in offices across 17 countries worldwide. Founded in 1983 by six entrepreneurs, and headquartered in Cambridge, Massachusetts, Monitor advises for- profit, sovereign, and non-profit clients on growing their businesses and economies and furthering their charitable purposes. Monitor and several affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 12-13042 to 12-13062) on Nov. 7, 2012. Judge Hon. Christopher S. Sontchi presides over the case. Pepper Hamilton LLP and Ropes & Gray LLP serve as the Debtors' counsel. The financial advisor is Carl Marks Advisory Group LLC. Epiq Bankruptcy Solutions, LLC is the claims and noticing agent. The petitions were signed by Bansi Nagji, president. Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the Committee of Unsecured Creditors as counsel. Bank of America is represented in the case by Jinsoo Kim, Esq., and Timothy Graulich, Esq., at Davis Polk & Wardwell LLP; and Mark D. Collins, Esq., at Richards Layton & Finger PA. J. Gregory Milmoe, Esq., and Shana A. Elberg, Esq., at Skadden Arps Slate Meagher & Flom LLP in New York; and Mark Chehi, Esq., and Christopher DiVirgilio, Esq., at Skadden Arps in Delaware, represent Deloitte Consulting LLP. Caltius Partners IV LP; Caltius Partners Executive IV, LP; and CP IV Pass-Through (Monitor) LP are represented by John Sieger, Esq., at Katten Muchin Rosenman LLP. Monitor's consolidated unaudited financial statements as of June 30, 2012, which include the assets and liabilities of non- Debtor foreign subsidiaries, reflected total assets of roughly $202 million (including $93 million in current assets) and total liabilities of roughly $200 million. Monitor filed for bankruptcy to sell substantially all of their businesses and assets to Deloitte Consulting LLP, a Delaware registered limited liability partnership and DCSH Limited, a UK company limited by shares, subject to higher or otherwise better offers. The base purchase price set forth in the Stalking Horse Agreement is $116.2 million, plus (i) assumption of certain liabilities and (ii) certain cure costs for assumed contracts. The Stalking Horse Agreement provides for the Stalking Horse Bidder to receive a combined breakup fee and expense reimbursement of $4 million. The Debtors propose to hold an auction on Nov. 28, 2012, at the offices of the Sellers' counsel, Ropes & Gray LLP in New York. Closing of the deal must occur by the earlier of (i) 30 days following entry of the Sale Order and (ii) Feb. 28, 2013. NACIO SYSTEMS: Court May Approve Release of $210,000 to NIG ----------------------------------------------------------- Bankruptcy Judge Alan Jaroslovsky said the only assets left in NACIO Systems, Inc.'s failed Chapter 11 case, now converted to Chapter 7, are about $377,000 which are the proceeds from the recovery and liquidation of two generators by Chapter 7 Trustee Jeffry Locke. Creditor Nacio Investment Group, LLC, claims a security interest in these proceeds. Mr. Locke and NIG reached a compromise whereby NIG would be paid $210,000 in return for a release of its security interest. The matter came on for hearing on March 8, 2013, after due notice. No party objected on the grounds that the settlement was not in the best interests of the estate. However, two law firms with Chapter 11 administrative expense claims objected on the grounds that they had competing secured claims in the same proceeds. The court felt unable to approve the compromise in the face of these competing claims, and instead set the matter for trial. "Upon reflection, the court sees no problem with the settlement as proposed. It meets all the requirements for a reasonable settlement notwithstanding the strength of Locke's legal position, considering the length of time the dispute has been pending and the cost of litigating it further. There is no need for NIG and Locke to spend further funds litigating with each other if they have reached an amicable and reasonable settlement. Thus, the court is willing to reconsider and approve the settlement so long as the rights of the objecting parties are preserved," said Judge Jaroslovsky. The Court noted there are three ways that Mr. Locke and NIG can eliminate the competing claims of the objecting parties. First, the objecting parties may simply fail, after the trial now set, to show that they have a valid security interest in the generator proceeds. Second, Mr. Locke may obtain a judicial determination that the Chapter 7 administrative expenses exceed the generator proceeds and have priority, pursuant to Sec. 726(b) of the Bankruptcy Code, over the Chapter 11 administrative expenses which are the basis of the objecting parties' claims. Third, Mr. Locke may obtain an order surcharging the interests of the objecting parties pursuant to Sec. 506(c). "The problem the court had with the settlement at the time of the hearing was that Locke seemed to be asking the court to assume that under Sec. 726(b) or Sec. 506(c) the objecting parties could have no interest in the generator proceeds. Until these matters are actually adjudicated, the claims must be considered valid," said Judge Jaroslovsky. Contrary to representations made in court, it appears that one objecting party, DeMartini & Walker LLP, has no allowed claim. In a March 11, 2013 Memorandum After Sua Sponte Reconsideration available at http://is.gd/3zIJvyfrom Leagle.com, Judge Jaroslovsky said he is willing to approve the compromise so long as the rights of the objecting parties are not prejudiced. If Mr. Locke and NIG wish to have their compromise approved on these terms, Mr. Locke may submit a form of order which counsel for NIG and the objecting parties have approved as to form. The parties may then use the trial date set in the adversary proceeding to obtain an adjudication of the rights of the objecting parties. Nacio Systems, Inc. -- http://www.nacio.com/-- filed a second chapter 11 petition (Bankr. N.D. Cal. Case No. 08-10078) on Jan. 18, 2008; was represented by Craig K. Welch, Esq., at Welch and Olrich, L.L.P., in Petaluma, Cal.; and estimated its assets and debts at less than $10 million. Nacio Systems first sought Chapter 11 protection in 2002, and emerged under a plan of reorganization in 2003. NTELOS HOLDINGS: S&P Retains 'BB-' CCR on CreditWatch Negative -------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB-' corporate credit and other ratings on Waynesboro, Va.-based regional wireless provider NTELOS Holdings Corp. remain on CreditWatch with negative implications. S&P placed the ratings on CreditWatch on Dec. 17, 2012, based on its view that Japan-based SoftBank's (BBB/Watch Neg/--) proposed acquisition of Sprint Nextel (B+/Watch Pos/--) could lessen prospects for NTELOS to renew its wholesale services agreement with Sprint Nextel under favorable terms when it ends in July 2015. "The CreditWatch status reflects the possibility that Softbank's pending purchase of 70% of Sprint Nextel, if completed, could improve Sprint Nextel's liquidity and make it more likely for Sprint Nextel to consider investing in its own network in the NTELOS footprint instead of renewing its wholesale services agreement with NTELOS," said Standard & Poor's credit analyst Richard Siderman. Under its current agreement with Sprint Nextel, which runs through July 2015, NTELOS is the exclusive personal communication services (PCS) provider to Sprint Nextel's code- division multiple access (CDMA) customers in NTELOS's western Virginia and West Virginia service areas. NTELOS operates its own retail wireless business with about 440,000 customers at Dec 31, 2012. Sprint Nextel guarantees NTELOS minimum monthly revenues of $9 million under the current contract, but actual revenues have risen well above the guarantee level, now averaging about $14 million monthly and accounting for around 40% of NTELOS's total service revenues. S&P's current rating already cites as a material risk the potential that the Sprint Nextel wholesale contract might not be renewed, or might be renegotiated on considerably less favorable terms. The negative CreditWatch indicates that Softbank's acquisition of Sprint Nextel could increase that risk. NTELOS reported about $490 million of debt outstanding on Dec 31, 2012. In resolving the CreditWatch, S&P will assess the improvement to Sprint Nextel's liquidity if Softbank closes on its acquisition of 70% of Sprint Nextel. That assessment will, in turn, reflect S&P's view of credit support for Sprint Nextel, if any, from higher rated Softbank. S&P would downgrade NTELOS if S&P viewed the Softbank transaction as markedly improving Sprint Nextel's liquidity, thereby increasing the chance that Sprint Nextel might consider investing in its own network in the NTLEOS footprint and either not renew its wholesale services agreement with NTELOS or enter into a new agreement, after the current one expires, under terms significantly less favorable to NTELOS. A downgrade based on that scenario would likely be limited to a single notch. However, if other developments suggest that there is a significant likelihood that the wholesale contract would not be renewed or would be renegotiated under materially less favorable terms, the magnitude of a downgrade could be greater. OCD LLC: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------- Debtor: OCD, LLC 800 Westchester Avenue Rye Brook, NY 10573 Bankruptcy Case No.: 13-22416 Chapter 11 Petition Date: March 12, 2013 Court: U.S. Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Lawrence R. Reich, Esq. REICH REICH & REICH, P.C. 235 Main Street, Suite 450 White Plains, NY 10601 Tel: (914) 949-2126 Fax: (914) 949-1604 E-mail: reichlaw@aol.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Charles E. Dewey, Jr., managing member. Debtor's List of Its Six Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ R Botsford Custom Woodworking, LLC Services $240,000 171 Bushy Hill Road Newton, CT 06470 LORIAN AT PROSPECT PEAK Services $153,000 HOME OWNERS ASSOC. P O BOX 983 TELLURIDE, CO 81435 Mount Sneffles Services $60,000 22412 Government Springs Road Montrose, CO 81403 R Botsford Custom Woodworking, LLC Services $20,000 George Farley, PC Services $15,000 Holland & Hart Services $1,500 OLD COLONY: Can Access Wells Fargo Cash Collateral Until June 15 ---------------------------------------------------------------- The Bankruptcy Court has authorized Old Colony, LLC, to use cash collateral of Wells Fargo Bank, N.A., through June 15, 2013, consistent with the proposed budget for the weekly period from Feb. 4, 2013, through July 1, 2013. The Adequate Protection Liens previously approved by the Court will remain in full force and effect in the Post-Petition Collateral against which Wells Fargo and JH Lending Trust, held liens as of the Petition Date in the Pre-Petition Collateral. The Adequate Protection Liens, however, will not cover any cause of action or proceeds thereof recovered pursuant to Chapter 5 of the Bankruptcy Code. As additional adequate protection for the use of Wells Fargo's alleged cash and non-cash collateral, the Debtor will pay to Wells Fargo the amount of $40,000 on the first day of each of February, March, April, and May, 2013, and $20,000 on the first day of June, 2013. The Court will conduct a continued hearing with respect to use of alleged cash collateral on June 26, 2013, at 2:00 p.m. in Boston, Mass., by videoconference. About Old Colony, LLC Saugus, Massachusetts-based Old Colony, LLC, is a limited liability company organized under the laws of the State of Wyoming on or about May 11, 2007. Roughly 73.14% of the ownership interests in Old Colony are held by Joseph Cuzzupoli and John Bullock. The Debtor owns and operates an 83-room mountainside hotel located at 3345 West Village Drive, Teton Village, Wyoming, doing business under the name ?Inn at Jackson Hole?. Additionally, the Debtor leases premises to a third party operator of an on-site 60-seat restaurant and bar doing business as ?Masa Sushi.? As of the Petition Date, the Inn was encumbered by mortgages held by Wells Fargo and JH Lending Trust. Wells Fargo asserts that as of the Petition Date, the amount due to it which was secured by a mortgage against the Inn was $17,783,019.99. JH Lending Trust alleges that the amount of $3,414,999.60 was outstanding as of the Petition Date and secured by its mortgage against the Inn. Old Colony filed for Chapter 11 bankruptcy protection (Bankr. D. Mass. Case No. 10-21100) on Oct. 11, 2010. Donald F. Farrell, Jr., Esq., at Anderson Aquino LLP; James M. Liston, Esq., at Bartlett Hackett Feinberg, Esq.; and Jeffrey D. Ganz, Esq., at Reimer & Braunstein LLP, assist the Debtor in its restructuring effort. In its schedules, the Debtor disclosed $2,571,684 in assets and $21,363,064 in liabilities. OYSTER LANDING: Case Summary & 11 Unsecured Creditors ----------------------------------------------------- Debtor: Oyster Landing, LLC 1508 Military Cutoff Road, Suite 302 Wilmington, NC 28403 Bankruptcy Case No.: 13-01524 Chapter 11 Petition Date: March 8, 2013 Court: U.S. Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: George M. Oliver, Esq. OLIVER FRIESEN CHEEK, PLLC P.O. Box 1548 New Bern, NC 28563 Tel: (252) 633-1930 Fax: (252) 633-1950 E-mail: efile@ofc-law.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 11 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nceb13-01524.pdf The petition was signed by Jon T. Vincent, manager. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- B&K Coastal, LLC 11-08609 11/09/11 PALM BEACH PORT: Moody's Retains Stable Outlook and Ba1 Rating -------------------------------------------------------------- Moody's Investors Service, Inc. maintains Palm Beach Port District's (FL) Ba1 rating with a stable outlook on about $37 million of outstanding revenue bonds. Rating Rationale: The Ba1 rating reflects the niche port's small size and concentrated operations, with the majority of revenues derived from a few tenants and commodities; exposure to the highly competitive market in southern Florida and the economically sensitive cruise industry. The rating also recognizes the improving financial profile given the successful solicitation of new business and the continued maintenance of satisfactory internal liquidity. The rating also factors the port's recently improved financial margins in FY 2012 that may weaken slightly in FY 2013 due to the day cruise vessel ceasing operations while the vessel owner seeks a new operating company. The new vessel only sailed for three months, illustrating the need for strong liquidity and strategic capital investment to attract and maintain a diversity of tenants. Outlook The stable outlook reflects Moody's view that the port is likely to renew its long-term contract with its largest tenant Tropical Shipping that expires in June 2013 and the port's financial metrics will remain satisfactory near FY 2012 levels despite the port's exposure to economically sensitive business partners and trade routes within a highly competitive market. What Could Change The Rating -- UP? The rating could be upgraded if the port renews its long-term contract with its largest tenant and maintains the financial performance experienced in FY 2012 with net revenue debt service coverage exceeding 1.5 times and liquidity maintained at levels above 350 days cash on hand, at a minimum. What Could Change The Rating -- DOWN? The rating could be downgraded if the port's market position deteriorates; it loses a large tenant that is not immediately replaced; fails to continue to generate new business to diversify revenue sources to compensate for the large swings in operating performance; and/or the port's financial position declines with liquidity below 250 days cash on hand and debt service coverage below the rate covenant. Strengths - Multi-year contracts with largest tenants with minimum annual revenue guarantees - New business grew revenues to pre-recession levels in FY 2012 - Financial margins notably improved in FY 2012 after four years of very tight debt service coverage that slightly exceeded the 1.1 times rate covenant in FY 2011 and FY 2010 after falling well below 1.0 times in FY 2009 and FY 2008 - Satisfactory liquidity of approximately $11.5 million (including available construction funds) at the end of FY 2012 provides key credit support given the port's historically volatile operating profile - Authority to levy property taxes up to $200,000 annually for operations and, with voter approval, to issue general obligation debt secured by an unlimited property tax, but these scenarios are unlikely Challenges - Weak market position defined by a small scale of operations, exposure to economically-sensitive passenger cruise market and Caribbean trade, competition from larger nearby facilities at Port Everglades and Port of Miami, and revenue concentration in two top customers - Volatile performance with large swings in cargo levels and cruise travel demand - Significant revenue concentration from two tenant contracts limits financial flexibility and the largest customer, Tropical Shipping is currently renegotiating its contract that expires this summer - Ceasing of the day cruise operation may result in a loss of budgeted revenues if not replaced soon which may result in flat financial performance in FY 2013 compared to FY 2012 The principal methodology used in this rating was Moody's Rating Methodology for U.S. Ports published in February 2005 PATRIOT COAL: Seeks to Modify CBAs, Sues Peabody Energy ------------------------------------------------------- Patriot Coal Corporation on March 14 filed a motion with the Bankruptcy Court in St. Louis seeking to modify collective bargaining agreements with the United Mine Workers of America (UMWA). Patriot is filing this motion now to obtain critical financial relief in a timeframe that avoids severe business disruption. The proposed modifications include the establishment of a Voluntary Employee Beneficiary Association (VEBA) trust to provide healthcare for UMWA-represented retirees, as well as changes to wages, benefits and work rules for UMWA-represented employees. This filing follows more than four months of negotiations between representatives of Patriot subsidiaries and the UMWA. The Company is committed to continuing efforts to reach a consensual agreement while this motion is addressed by the court. Also on March 14, Patriot filed an initial lawsuit against Peabody Energy Corporation to ensure that Peabody does not attempt to use Patriot's bankruptcy to escape Peabody's own healthcare obligations to certain retirees. "The actions we have taken [Thurs]day are necessary for the survival of Patriot and the preservation of more than 4,000 jobs. Without the cost relief we are seeking, all of these jobs will be lost and it will no longer be possible to provide healthcare for more than 23,000 employees, retirees and their dependents. Our labor and retiree benefit costs have risen to levels that simply cannot be sustained given the challenges facing the Company and our industry," stated Patriot President and Chief Executive Officer Bennett K. Hatfield. "All of our employees and retirees are being asked to make sacrifices to help Patriot emerge from bankruptcy. These sacrifices include reductions in compensation and benefits for salaried, union and nonunion employees." "The approval of this motion will be the single most important action necessary to ensure Patriot's financial viability and successful reorganization," continued Mr. Hatfield. "It is critical that we quickly achieve these savings within the timeframe provided by our debtor-in-possession financing." Patriot's UMWA labor costs are not competitive with other coal producers that operate under more flexible work rules and a significantly lower labor cost structure. The Company's proposal seeks to adjust wages, benefits and work rules for its unionized employees to a level consistent with the regional labor market. The Company can no longer afford to pay above-market wages and benefits to its 1,600 union employees as compared to its 1,300 nonunion miners doing exactly the same jobs. As part of the proposal, Patriot intends to offer its union employees the same healthcare benefits it provides to nonunion employees. Patriot is also seeking to modify its unsustainable payments for UMWA-related retiree healthcare liabilities, which total approximately $1.6 billion. The Company's proposal would transition certain of its UMWA-related healthcare obligations to a VEBA trust to provide retirees with meaningful long-term healthcare benefits. Funding for the VEBA would consist of: (i) an allowed unsecured claim that will represent a meaningful ownership stake in the reorganized company and could be monetized for significant value, (ii) profit sharing, up to a maximum of $300 million and (iii) an initial cash contribution of $15 million. Patriot would also honor retiree medical obligations incurred prior to July 1, 2013, to allow sufficient time for the VEBA to be established. The VEBA trust would be designed and administered by the UMWA or the UMWA Health and Retirement Funds. Patriot would continue to provide healthcare for its entire active workforce and their eligible family members, and for more than 2,300 individuals who receive healthcare pursuant to the Coal Industry Retiree Health Benefit Act of 1992 (Coal Act). Patriot spent approximately $14 million on Coal Act liabilities in 2012. "We very much regret the necessity of these changes to our employees' and retirees' wages and benefits," concluded Mr. Hatfield. "However, these actions are necessary for Patriot to become viable and continue to provide more than 4,000 jobs. We believe the alternative of liquidating Patriot would do far greater damage to the employees and retirees who depend on this company." Also on March 14, Patriot filed a lawsuit against Peabody seeking a declaration from the Bankruptcy Court that any relief Patriot is able to obtain through its motion would not relieve Peabody of its own obligations to certain retirees. In connection with Patriot's 2007 spinoff, Peabody agreed to pay the healthcare costs for thousands of retirees who were employed by Peabody entities that were transferred to Patriot in the spinoff. Patriot believes that Peabody might argue that Patriot's financial condition and unavoidable actions in the Bankruptcy Court will allow Peabody to stop paying for or cut the healthcare of more than 3,000 individuals. Together with the official committee of unsecured creditors, Patriot continues to investigate potential claims against Peabody. Patriot has filed this initial lawsuit in conjunction with the timing of the Company's retiree healthcare motion filed today. Patriot's bankruptcy filing in July 2012 resulted from exceptionally weak coal markets, coupled with increasing costs and unsustainable legacy liabilities. Leading up to the filing, coal markets suffered from declining pricing and demand brought on by slowing global economic growth, inexpensive natural gas and heightened regulation of coal-fueled electricity generation. Since the bankruptcy filing coal markets have deteriorated further. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PHILADELPHIA ENERGY: Moody's Assigns 'B1' Rating to US$500MM Loan ----------------------------------------------------------------- Moody's Investors Service assigned a B1 corporate family rating to Philadelphia Energy Solutions Refining & Marketing LLC, and a B1 rating to the company's US$500 million term loan maturing 2018. PES is wholly owned by Philadelphia Energy Solutions LLC which is jointly owned by The Carlyle Group (two-third ownership) and Sunoco, Inc. (one-third). The rating outlook is stable. "Philadelphia Energy Solutions' refinery assets have been operational under new management since September 2012, and are expected to benefit from good refining industry fundamentals prevailing currently," commented Arvinder Saluja, Moody's Analyst. "The term loan will increase liquidity and capital spending flexibility, but over the next year its proceeds may also be used to pay a $200 million dividend to the owners." Issuer: Philadelphia Energy Solutions Refining & Marketing LLC Ratings assigned: Corporate Family Rating, B1 Probability of Default Rating, B1-PD $500 million Term Loan due 2018, B1 (LGD4, 50%) Ratings Rationale: The B1 CFR reflects PES's short track record as an independent refiner outside Sunoco's larger refinery system, limited audited financial data, and low asset diversification as a single site refinery complex. The rating also considers larger refining industry challenges, including the volatility of crack spreads and risk associated with regulatory capital expenditure requirements which may not produce any additional cashflows. The rating is supported by the management team's substantial refining industry experience, an expectation of continued strong financial performance aided by more robust refining dynamics in the US, potential for advantaged crudes from unconventional oil plays in the US and Canada, large combined refining capacity, and demand- supply imbalance in the PADD I region due to refinery closures over the past few years. The B1 rating on the $500 million term loan reflects both the overall probability of default of PES, to which Moody's has assigned at B1-PD Probability of Default Rating, and a loss given default of LGD 4, 50%, under Moody's Loss Given Default Methodology. In addition to the term loan, PES has a $100 million ABL credit facility, with a borrowing base of $59.5 million, as of September 8, 2012. The term loan is expected to have a first lien against the majority of PES' real property (including the refineries), while the credit facility has a first lien on working capital assets not covered by a crude supply and product offtake agreement with JP Morgan. As a result of the term loan having discreet assets as collateral and the view that the refineries should provide sufficient value for the debt holders, even in the event of distress, the notes are rated in line with the CFR. The stable outlook reflects PES's large refining total capacity of 335,000 bpd, current favorable industry dynamics, adequate liquidity, and an expectation that the management will prudently build the company's track record and invest adequately to maintain capabilities and high safety standards. An upgrade is unlikely given PES's current scale and asset concentration and the uncertainty posed by its private equity ownership structure and future exit risk. However, Moody's could consider an upgrade if there is a material increase in operational diversity and scale that is funded conservatively, if recent and ongoing operational improvements materially and permanently strengthen margins, and improved logistical capabilities give a relatively long-term advantaged crude procurement benefit. The ratings could be lowered if future audited statements are not made available at regular intervals, if PES pays additional aggressive dividends to its owners, if operations are interrupted or regional refining dynamics deteriorate on a prolonged basis, if leverage increases materially, or liquidity deteriorates. The principal methodology used in this rating was the Global Refining and Marketing Rating Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Philadelphia Energy Solutions Refining & Marketing LLC owns a refinery complex in Philadelphia with two refineries, Girard Point (190,000 bpd throughput) and Pointe Breeze (145,000 bpd throughput). These assets were previously owned by Sunoco, and in September 2012 were sold to Philadelphia Energy Solutions. PINNACLE AIRLINES: To Sell Engines, Aircraft Parts for $1.1-Mil. ---------------------------------------------------------------- Pinnacle Airlines Corp. said it plans to sell de minimis assets including two General Electric model engines, and aircraft parts for $1.1 million. A list of the assets is available for free at http://is.gd/wpuvpv The assets will be sold free and clear of all liens, claims, encumbrances or interests unless an objection is filed by March 25. About Pinnacle Airlines Pinnacle Airlines Corp. (NASDAQ: PNCL) -- http://www.pncl.com/-- a $1 billion airline holding company with 7,800 employees, is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 80 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at 11 major U.S. airports. Pinnacle Airlines Inc. and its affiliates, including Colgan Air, Mesaba Aviation Inc., Pinnacle Airlines Corp., and Pinnacle East Coast Operations Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-11343) on April 1, 2012. Judge Robert E. Gerber presides over the case. Lawyers at Davis Polk & Wardwell LLP, and Akin Gump Strauss Hauer & Feld LLP serve as the Debtors' counsel. Barclays Capital and Seabury Group LLC serve as the Debtors' financial advisors. Epiq Systems Bankruptcy Solutions serves as the claims and noticing agent. The petition was signed by John Spanjers, executive vice president and chief operating officer. As of Oct. 31, 2012, the Company had total assets of $800.33 million, total liabilities of $912.77 million, and total stockholders' deficit of $112.44 million. Delta Air Lines, Inc., the Debtors' major customer and post- petition lender, is represented by David R. Seligman, Esq., at Kirkland & Ellis LLP. The official committee of unsecured creditors tapped Morrison & Foerster LLP as its counsel, and Imperial Capital, LLC, as financial advisors. The U.S. Bankruptcy Court in New York will hold a hearing March 7 for approval of the explanatory disclosure statement in connection with the reorganization plan of Pinnacle Airlines Corp. POMONA VALLEY: S&P Lowers Rating on Series 2002 Bonds to 'CCC' -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on Pomona Valley Educational Joint Powers Authority (Pomona Unified School District), Calif.'s lease revenue (qualified zone academy bonds) series 2002, MBIA Insurance Corp. GIC facility-backed issue to 'CCC' from 'B'. "This downgrade follows Standard & Poor's downgrade of MBIA Insurance Corp. to 'CCC' from 'B' on Feb. 28, 2013," said Standard & Poor's credit analyst Jeff Previdi. POWERWAVE TECHNOLOGIES: Committee Objects to Jones Day Release -------------------------------------------------------------- BankruptcyData reported that Powerwave Technologies' official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the Debtors' motion for approval of a stipulation between the Debtors and Jones Day, under which the Debtors waive and discharge any right to challenge or object to the final invoice or the retainer and Jones Day's application of the retainer to its final invoice in exchange for return of the balance of the retainer. According to the BankruptcyData report, citing court documents, the committee states, "Thus, the Committee does not object to the return of estate funds, or a release with respect to the Final Invoice or Retainer. However, in the Stipulation, the Debtor seeks to grant Jones Day a comprehensive release without providing any consideration or credible explanation." 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. PROVINCE GRANDE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Province Grande Olde Liberty, LLC pka SilverDeer Olde Liberty AA Lots, LLC 300 W. Millbrook Road Raleigh, NC 27609 Bankruptcy Case No.: 13-01563 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Eastern District of North Carolina (Wilson) Judge: J. Rich Leonard Debtor's Counsel: William P. Janvier, Esq. JANVIER LAW FIRM, PLLC 1101 Haynes Street, Suite 102 Raleigh, NC 27604 Tel: (919) 582-2323 Fax: (866) 809-2379 E-mail: bill@janvierlaw.com Scheduled Assets: $2,200,000 Scheduled Liabilities: $7,022,505 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/nceb13-01563.pdf The petition was signed by Richard Wolf, manager. Affiliate that filed separate Chapter 11 petition: Petition Debtor Case No. Date ------ -------- ---- SilverDeer, LLC 10-08980 11/01/10 PUERTO DEL REY: Luis R. Carrasquillo OK'd as Financial Consultant ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico authorized Puerto Del Rey, Inc., to employ Luis R. Carrasquillo as financial consultant. The Debtor needed an experienced financial consultant to assist its management in the financial restructuring of its affairs by providing advice in strategic planning and the preparation of the Debtor's plan of reorganization and disclosure statement, and participating in the Debtor's negotiations with financial institutions, lessors, and creditors. Accordingly, the Debtor proposed to employ Luis R. Carrasquillo Ruiz, CPA, on the basis of a $15,000 in advance, paid by the Debtor, against which Carrasquillo will bill on the standard rates: Professional Position Hourly Rate ------------ -------- ----------- CPA Luis R. Carrasquillo Partner $160 CPA Marcelo Gutierrez Senior CPA $125 Other CPAs $90 to $125 Lionel Rodriquez Perez Senior Accountant $85 Carmen Callejas Echevarna Senior Accountant $80 Alfredo J. Segarra Senior Accountant $75 Sandra Zavala Diaz Junior Account $60 Janet Marrero Admin. and Support $40 Iris L. Franqul Admin. And Support $40 About Puerto del Rey Puerto del Rey, Inc., owner of the Puerto Del Rey Marina, filed a petition for Chapter 11 protection on Dec. 28 in Old San Juan, Puerto Rico (Bankr. D.P.R. Case No. 12-10295), owing $43 million to secured lender First Bank Puerto Rico Inc. The 22-acre facility in Fajardo, Puerto Rico, has 918 wet slips and dry storage for 600 boats. Bankruptcy was designed to forestall creditors from attaching assets. The Debtor disclosed assets of $99.8 million and liabilities totaling $44.4 million PUERTO DEL REY: Secured Creditor FirstBank Wants Case Dismissal --------------------------------------------------------------- Secured creditor FirstBank Puerto Rico, asks the U.S. Bankruptcy Court for the District of Puerto Rico to enter an order dismissing the Chapter 11 case of Puerto Del Rey, Inc., or, alternatively, for abstention under Section 305 of the Bankruptcy Code or 28 U.S.C. Section 1334(c)(1). According to FirstBank, the Debtor has failed to obtain authorization to use cash collateral in its case to the detriment of FirstBank and there is prima facie evidence of the Debtor's bad-faith in commencing its case. About Puerto del Rey Puerto del Rey, Inc., owner of the Puerto Del Rey Marina, filed a petition for Chapter 11 protection on Dec. 28 in Old San Juan, Puerto Rico (Bankr. D.P.R. Case No. 12-10295), owing $43 million to secured lender First Bank Puerto Rico Inc. The 22-acre facility in Fajardo, Puerto Rico, has 918 wet slips and dry storage for 600 boats. Bankruptcy was designed to forestall creditors from attaching assets. The Debtor disclosed assets of $99.8 million and liabilities totaling $44.4 million RIO VISTA: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: Rio Vista Properties 690 LLC 690 Kinderkamack Road Oradell, NE 07649 Bankruptcy Case No.: 13-15033 Chapter 11 Petition Date: March 12, 2013 Court: U.S. Bankruptcy Court District of New Jersey (Newark) Judge: Morris Stern Debtor's Counsel: Philip Guarino, Esq. MAVROUDIS RIZZO & GUARINO, LLC 690 Kinderkamack Road, Suite 300 Oradell, NJ 07649 Tel: (201) 262 3001 E-mail: guarinolaw@gmail.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by John M. Mavroudis, managing member. REVEL AC: CEO Resigns Weeks Before Expected Bankruptcy Filing ------------------------------------------------------------- The Associated Press reported that Kevin DeSanctis, the man who guided Atlantic City's Revel casino-hotel through its tortuous development, only to see it struggle amid the cutthroat East Coast gambling market, is stepping down as head of the $2.4 billion resort. The company announced Wednesday that DeSanctis and chief investment officer Michael Garrity will resign from their positions with Revel Atlantic City but retain their jobs with Revel Group, the holding company that developed the resort and holds its license, AP said. There, they will work on developing amenity projects for Revel. Taking over the resort's day-to-day operations is Jeffrey Hartmann, a 20-year veteran of the casino, hospitality and leisure industry, AP related, citing the company announcement. His duties will begin once he is approved by New Jersey casino regulators. The moves, AP noted, come less than two weeks before Revel is expected to file a pre-packaged Chapter 11 bankruptcy filing that will wipe out about two-thirds of its debt and give lenders a greater equity stake in the resort in return. REVSTONE INDUSTRIES: GM Opposes DiDonato as CRO over Ties with CEO ------------------------------------------------------------------ Jamie Santo of BankruptcyLaw360 reported that General Motors LLC on Wednesday blasted a motion by bankrupt Revstone Industries LLC to employ a chief restructuring officer, claiming the proposed candidate's long history with the auto-parts conglomerate's embattled founder will prohibit him from acting independently. According to the report, in an objection filed in Delaware bankruptcy court, GM said that while it approves the appointment of an independent fiduciary who would keep Revstone head George S. Hofmeister from administering the company's bankruptcy case, it opposes the selection of John C. DiDonato, who has close ties with Hofmeister. 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. SAVE MOST: Triggs & Reese OK'd as Accountant and Tax Professional ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized Save Most Desert Rancho, Ltd, to employment Triggs & Reese, Inc. as accountant and tax professional. The firm will: a. review company's books on a quarterly basis, prepare adjusting journal entries; b. prepare quarterly financial statements on the income tax basis; and c. prepare Federal and California income tax returns annually. The firm's Joseph H. Reese will bill the Debtor at $110 per hour for accounting services and $145 per hour for tax services. The Debtor agreed to provide a $5,000 retainer. The firm attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Save Most Desert Rancho Save Most Desert Rancho, Ltd., filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-23173) in Santa Ana, California on Nov. 15, 2012. The Laguna Hills-based company disclosed $10,134,997 in assets and $14,874,770 in liabilities as of the Chapter 11 filing. The petition was signed by Charles Kaminskas for Brighton Park, LP, general partner. The Law Offices of Michael G. Spector serves as Chapter 11 insolvency counsel. SAVE MOST: Taps Lee R. Goldberg to Negotiate Settlement with SDCCU ------------------------------------------------------------------ Save Most Desert Rancho, Ltd., asks the U.S. Bankruptcy Court for the Central District of California for permission to employ the Law Offices of Lee R. Goldberg, as special counsel to: 1) negotiate and document a settlement of the San Diego County Credit Union (SDCCU) Litigation; 2) negotiate, document and close the proposed transaction for the sale of the Debtor's real property located 200 South Main St., Corona, California; and 3) negotiate, document and close the proposed condemnation proceeding with the Riverside County Transportation Corridor agency. The firm is to be compensated pursuant to Section 330 of the Bankruptcy Code on a flat fee basis in the amount of $14,000 to be paid from the cash collateral account of SDCCU and paid upon Court approval of the employment application. The firm's efforts to negotiate and document the settlement of the SDCCU Litigation are for the benefit of non-debtor, and the Debtor will not be liable for payment of such services. Since the firm's representation is anticipated to result in a global resolution of many issues involving many parties, it was necessary for the firm to complete a thorough analysis of the time involved and the benefits to be conferred on the various parties. The firm believes that it will devote between 25 to 30 hours in negotiating with potential buyers, drafting the sale agreement, managing overbids and communicating with potential buyers to insure the highest and best price for the Corona Property. Given the complexity of these issues, the firm would normally charge $450 per hour for such services (estimated total of $11,250 to $13,500). Instead, the firm has agreed to charge a flat-fee of $8,500 for these services. Additionally, the firm believes that it will devote between 20 to 25 hours in negotiating final resolution of the condemnation issues. The firm's normal rate for such services is $450 per hour (estimated for a total of $9,000 to $11,250). However, the firm has agreed to charge a flat-fee of $5,500 for these services. Thus, the estate will receive a substantial benefit from the reduction. Moreover, the source of payment is the cash collateral of SDCCU. To the best of the Debtor's knowledge, the firm represents no interests adverse to the Debtor or the estate in the matters upon which the firm is to be engaged. As of the Petition Date, the Debtor owed the firm the sum of $1,617; which claim has been waived by the firm. About Save Most Desert Rancho Save Most Desert Rancho, Ltd., filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-23173) in Santa Ana, California on Nov. 15, 2012. The Laguna Hills-based company disclosed $10,134,997 in assets and $14,874,770 in liabilities as of the Chapter 11 filing. The petition was signed by Charles Kaminskas for Brighton Park, LP, general partner. The Law Offices of Michael G. Spector serves as Chapter 11 insolvency counsel. SEMCRUDE LP: No Rehearing in Cottonwood Case v. Ex-CEO Kivisto -------------------------------------------------------------- Delaware District Judge Sue L. Robinson denied the request of Thomas L. Kivisto, former CEO of SemGroup L.P., for rehearing in the lawsuit, COTTONWOOD PARTNERSHIP, LLP, ET AL., Appellants, v. THOMAS L. KIVISTO, ET AL., Appellees, Civ. No. 11-1174-SLR (D. Del.). An appointed committee of the debtors' unsecured creditors filed suit in bankruptcy court against Mr. Kivisto and certain other parties on Feb. 17, 2009. Cottonwood Partnership, L.L.P.; Dunbar Family Parnership, L.P.; Rosen Family, L.L.C.; Warren F. Kruger; Katherine A. Kruger; David S. Kruger; and Kathryn E. Shelley filed suit against Mr. Kivisto, PricewaterhouseCoopers LLC, and John Does 1-25 in the Tulsa County District Court in Oklahoma on Dec. 22, 2010. Each of Cottonwood et al. formerly held limited partnership units in SemGroup. On the theory that the defendants in the Oklahoma litigation owed duties to Cottonwood et al. individually, Cottonwood et al. sought monetary damages from PwC for professional negligence and violation of the Oklahoma Accountancy Act, and from Mr. Kivisto for negligent misrepresentation, fraud, and breach of fiduciary duty. On May 4, 2011, Kivisto filed an emergency motion in the bankruptcy court to enforce the provisions of the order confirming the debtors' fourth amended joint plan and to enforce the provisions of the confirmed plan and other relief. The litigation trust established under SemGroup's plan and SemGroup joined Mr. Kivisto in the motion to enjoin. The Trust averred that the claims asserted by Cottonwood et al. are derivative claims that belong to the Trust and, pursuant to the confirmed plan and confirmation order, cannot not be brought by any other party. The bankruptcy court entered an opinion and order dated Oct. 7, 2011, granting the motion to enjoin. The bankruptcy court found that it has subject matter jurisdiction, the matter is a core proceeding, and the claims in Cottonwood et al.'s Oklahoma litigation are derivative causes of action alleging injury to SemGroup in its corporate capacity. Cottonwood et al. filed their notice of appeal from the bankruptcy court's opinion and order on Oct. 21, 2011. On Nov. 15, 2012, the District Court issued a memorandum order that, inter alia, affirmed the finding by the bankruptcy court that Cottonwood et al.'s claims against PwC are derivative and reversed and remanded the bankruptcy court's finding that Cottonwood et al.'s claims against Mr. Kivisto are derivative. In his motion for rehearing, Mr. Kivisto asserts that the bankruptcy court's conclusion was a factual finding and does not present a mixed question of law and fact. As such, he asserts that the District Court erred in evaluating the injury under a plenary standard rather than a clearly erroneous standard. According to Judge Robinson, the District Court found that the bankruptcy court did not properly consider, or take into account, all of Cottonwood et al.'s allegations, such as allegations that Mr. Kivisto made fraudulent and negligent misrepresentations to them personally or that Mr. Kivisto owed them a distinct fiduciary duty, under Oklahoma law, due in part to the length and nature of Mr. Kivisto's relationship with them. In that regard, the District Court reversed and remanded for further proceedings consistent with the memorandum order. Therefore, the District Court is not persuaded that a motion for rehearing is necessary to correct manifest errors of law or fact. Mr. Kivisto has failed to demonstrate any of the grounds to warrant a rehearing of the Nov. 15, 2012 memorandum order. Mr. Kivisto merely reasserts arguments that were already made in his briefing on appeal and that the Court considered in its memorandum order. A copy of the Court's March 12, 2013 Memorandum Order is available at http://is.gd/D2YLEbfrom Leagle.com. About SemGroup, L.P. SemGroup, L.P. -- http://www.semgrouplp.com/-- is a midstream service company that provides diversified services for end users and consumers of crude oil, natural gas, natural gas liquids and refined products. Services include purchasing, selling, processing, transporting, terminalling and storing energy. SemGroup serves customers in the United States, Canada, Mexico and Wales. SemGroup L.P. and its debtor-affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-11525) on July 22, 2008. John H. Knight, Esq., L. Katherine Good, Esq. and Mark D. Collins, Esq., at Richards Layton & Finger; Harvey R. Miller, Esq., Michael P. Kessler, Esq., and Sherri L. Toub, Esq., at Weil, Gotshal & Manges LLP; and Martin A. Sosland, Esq., and Sylvia A. Mayer, Esq., at Weil Gotshal & Manges LLP, represented the Debtors in their restructuring efforts. Kurtzman Carson Consultants L.L.C. served as the Debtors' claims agent. The Blackstone Group L.P. and A.P. Services LLC acted as the Debtors' financial advisors. Margot B. Schonholtz, Esq., and Scott D. Talmadge, Esq., at Kaye Scholer LLP; and Laurie Selber Silverstein, Esq., at Potter Anderson & Corroon LLP, represented the Debtors' prepetition lenders. SemGroup L.P.'s affiliates, SemCAMS ULC and SemCanada Crude Company, sought protection under the Companies' Creditors Arrangement Act (Canada) on July 22, 2008. Ernst & Young, Inc., is the appointed monitor of SemCanada Crude Company and its affiliates' reorganization proceedings before the Canadian Companies' Creditors Arrangement Act. SemGroup LP won confirmation from the Bankruptcy Court of its Fourth Amended Plan of Reorganization on Oct. 28, 2008. The Plan, which distributed more than $2.5 billion in value to stakeholders, was declared effective on Nov. 30, 2008. As part of the Plan, the Reorganized Debtors entered into two new credit facilities aggregating $625 million in financing; entered into a $300 million Second Lien Term Facility; created a new corporate structure, including issuing shares of common stock and warrants; and distributed approximately $500 million of cash and approximately $1 billion in value of new common stock and warrants to thousands of creditors in accordance with the Plan. SOUTHERN AIR: Bankruptcy Court Confirms Reorganization Plan ----------------------------------------------------------- Southern Air Holdings, Inc. on March 14 disclosed that it has received confirmation of its "pre-arranged" Plan of Reorganization (Plan) from the U.S. Bankruptcy Court in Wilmington, Delaware, which has been overseeing the Company's Chapter 11 proceedings following its voluntary filing on September 28, 2012. The Plan received substantial support from key secured creditors as well as unsecured creditors. The confirmation clears the way for Southern Air to emerge from its court-supervised financial restructuring as expected, within the next few weeks. Daniel J. McHugh, Southern Air CEO, said, "We are very pleased to receive court approval of our Plan of Reorganization and hope to exit Chapter 11 in just a matter of weeks. This was a critical part of our overall transformation. We have used this process to dramatically change and improve our capital structure, substantially reduce our debt and other legacy costs, strengthen our balance sheet, and enhance our competitiveness with new financial flexibility. "We will emerge as a well-capitalized carrier delivering safe, high quality air cargo services. As part of our strategic transformation, we have realigned our operations and capabilities and transitioned to a modern, fuel-efficient fleet of 777s and 747-400s serving global customers. Our operations and corporate activities are now in Northern Kentucky (the Cincinnati airport) near our largest hub of activity where we are even better able to satisfy the needs of our customers and grow our business for the long term to benefit our business partners and employees for years to come. "It is thanks to the hard work and dedication of the Southern Air team and the support of our lenders and business partners that we have been able to move through this process successfully, fulfilling customer requirements as scheduled and providing high quality air cargo services without interruption. As a result of our transformation, Southern Air is better positioned for the future both financially and operationally to grow profitably as an air cargo industry leader," concluded McHugh. About Southern Air Based in Norwalk, Connecticut, military cargo airline Southern Air Inc. -- http://www.southernair.com/-- its parent Southern Air Holdings Inc. and their affiliated entities filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12690 to 12-12707) in Wilmington on Sept. 28, 2012, blaming the decline in business from the U.S. Department of Defense, which reduced its troop count in Afghanistan and hired Southern Air less frequently. Bankruptcy Judge Christopher S. Sontchi presides over the case. Brian S. Rosen, Esq., Candace Arthur, Esq., and Gabriel Morgan, Esq., at Weil, Gotshal & Manges LLP; and M. Blake Cleary, Esq., and Maris J. Kandestin, Esq., at Young, Conaway, Stargatt & Taylor, serve as the Debtor's counsel. Zolfo Cooper LLC serves as the Debtors' bankruptcy consultant and special financial advisor. Kurtzman Carson Consultants, LLC, serves as claims and notice agent. CF6-50, LLC, debtor-affiliate, disclosed $338,925,282 in assets and $288,000,000 in liabilities as of the Chapter 11 filing. The petition was signed by Jon E. Olin, senior vice president. Canadian Imperial Bank of Commerce, New York Agency, the DIP agent and prepetition agent, is represented by Matthew S. Barr, Esq., and Samuel Khalil, Esq., at Milbank Tweed Hadley & McCloy LLP; and Mark D. Collins, Esq., and Katherine L. Good, Esq., at Richards Layton & Finger PA. Stephen J. Shimshak, Esq., and Kelley A. Cornish, Esq., at Paul Weiss Rifkind Wharton & Garrison LLP; and Mark E. Felger, Esq., at Cozen O'Connor, represent Oak Hill Capital Partners II, LP, OH Aircraft Acquisition LLC, and Oak Hill Cargo 360 LLC. The Debtors' Plan provides that lenders agreed to accept ownership of the company as payment for their $288 million loan. On Nov. 21, 2012, Roberta DeAngelis, U.S. Trustee for Region 3, appointed the statutory committee of unsecured creditors. Lowenstein Sandler PC and Pachulski, Stang, Ziehl & Jones LLP serves as its co-counsels, and Mesirow Financial Consulting LLC serves as its financial advisor. SPEEDWAY MOTORSPORTS: S&P Lowers Rating on 8.75% Notes to 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services revised its recovery rating on Speedway Motorsport Inc.'s 8.75% senior notes due 2016 and 6.75% senior notes due 2019 to '5', indicating S&P's expectation for modest (10% to 30%) recovery for noteholders in the event of a payment default, from '3' (50% to 70% recovery expectation). In accordance with S&P's notching criteria, it subsequently lowered its issue-level rating on the notes to 'BB-' from 'BB'. The issue-level rating was removed from CreditWatch, where it was placed with negative implications on Jan. 8, 2013. The downgrade reflects the closing of the company's $100 million add-on to its existing 6.75% notes and a new $350 million first- lien facility, consisting of a $100 million revolving credit facility and $250 million delayed draw term loan both due 2018. The company used the add-on notes to repay the outstanding $100 million balance on the company's former term loan. The company will use the delayed draw term loan to help repay the $275 million 8.75% notes, when they become callable in June 2013. S&P previously discussed this scenario and potential rating action in its research update on Speedway, published Jan. 8, 2013. The net increase in the term loan results in a higher level of secured debt outstanding under S&P's simulated default scenario versus its previous analysis. This reduces the recovery prospects for the senior notes sufficiently enough to warrant the lower recovery rating of '5' on the senior notes. S&P's ratings on the 8.75% senior notes will be withdrawn when the issue is redeemed. RATINGS LIST Speedway Motorsports Inc. Corporate Credit Rating BB/Stable/-- Recovery Rating Revision; Downgraded Speedway Motorsports Inc. To From Senior Unsecured 8.75% notes due 2016 BB- BB Recovery Rating 5 3 6.75% notes due 2019 BB- BB Recovery Rating 5 3 STAMP FARMS: Taps Miedema to Appraise 140-145 Irrigation Pivots --------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Michigan authorized Stamp Farms, L.L.C., et al., to employ Miedema Appraisals, Inc., to perform an appraisal of the 140-145 irrigation pivots and possibly related irrigation equipment consisting of generators and pumps. The Debtors sought authorization to auction substantially all of their assets used in connection with the Debtors' farming business and to sell any remaining unsold assets, if any by public auction or in private sales. To facilitate the sale process, the Debtors seek approval of the engagement of Miedema. The Debtors relate that they had filed an application to employ Ritchie Bros. as auctioneers and appraisers of certain of the Debtors' assets, however, Ritchie Bros.' scope of work doesn't include the appraisal of certain irrigation pivots and possibly related irrigation equipment. To the best of the Debtors' knowledge, Miedema is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Stamp Farms Stamp Farms, L.L.C., and three affiliates sought Chapter 11 protection (Bankr. W.D. Mich. Lead Case No. 12-10410) on Nov. 30, 2012, in Grand Rapids, Michigan. Stamp Farms began in 1968 with its purchase of 168 acres of farmland in Decatur, Michigan. The family was also heavily involved in the swine industry, operating a 500 sow swine operation until 1995. In 1997, Mike Stamp took over operations of Stamp Farms' 1500 acres and has grown the farm operation to cover 20,000+ acres across six southwestern Michigan counties. Debtor Stamp Farms sells its grain to Northstar Grain, L.L.C., solely owned by Mike Stamp, which conducts a grain elevator business on land it owns and leases and upon which buildings, grain storage bins, grain loading and related equipment and rail spurs are located. Stamp Farms estimated at least $10 million in assets and at least $50 million in liabilities in its bare-bones petition. Mr. Stamp also filed a Chapter 11 petition (Case No. 12-10430). Judge Scott W. Dales oversees the case. The Debtor has hired the law firm of Varnum LLP as counsel. O'Keefe & Associates Consulting, L.L.C. serves as financial restructuring advisors . The Official Committee of Unsecured Creditors tapped to retain Robbins, Salomon & Patt, Ltd., as its counsel, STINGER WELDING: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Stinger Welding, Inc. P.O. Box 280 Coolidge, AZ 85128 Bankruptcy Case No.: 13-03312 Chapter 11 Petition Date: March 8, 2013 Court: U.S. Bankruptcy Court District of Arizona (Tucson) Judge: Brenda Moody Whinery Debtor's Counsel: Franklin D. Dodge, Esq. RYAN RAPP & UNDERWOOD, P.L.C. 3200 N. Central Avenue, #1600 Phoenix, AZ 85012 Tel: (602) 280-1000 Fax: (602) 385-6706 E-mail: tdodge@rrulaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Stephanie Jordan, corporate secretary. STRADELLA INVESTMENTS: Plan Disclosures Hearing Moved to May 8 -------------------------------------------------------------- The hearing on the approval of the disclosure statement explaining Stradella Investment, Inc.'s First Amended Chapter 11 Plan of Reorganization is continued to May 8, 2013, at 01:30 PM, before Judge Catherine E. Bauer of the U.S. Bankruptcy Court for the Central District of California. About Stradella Investments San Juan Capistrano, California-based Stradella Investments, Inc., filed for Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 10-23193) on Sept. 19, 2010. Timothy J. Yoo, Esq., at Levene Neale Bender Rankin & Brill LLP, assists the Debtor in its restructuring effort. The Debtor disclosed $25,000,000 in assets and $121,000,671 in liabilities in its schedules. The Debtor's primary assets is a $25 million promissory note in its favor made out by RM Eagle, LLC, in connection with the purchase of certain real property. RM Eagle defaulted on a construction loan with respect to the development of the Property, and the lender foreclosed on RM Eagle. An affiliate of Stark Investments is currently the title holder of the Property. The Note is secured by a deed of trust on the Property. The Debtor filed a First Amended Chapter 11 Plan of Reorganization on Feb. 13, 2013. Under the Plan, creditors are to be paid in full over time from the proceeds of the Debtor's assets. General unsecured creditors in Class 3 will be paid from any amounts remaining from the proceeds of the Note after Secured Creditors in Class 1 and Class 2 are paid. Class 4 Equity Interests in the Debtor will retain their interests. STRADELLA INVESTMENTS: R. Marschack Named Chapter 11 Trustee ------------------------------------------------------------ The U.S. Trustee assigned in the Chapter 11 case of Stradella Investments, Inc., notified the U.S. Bankruptcy Court for the Central District of California that it has appointed Richard A. Marschack as Trustee for the Debtor. The appointment, according to the U.S. Trustee, was made after consultation with the counsel for the Debtor and for creditor Ronald Schwartz, movant for Chapter 11 Trustee. About Stradella Investments San Juan Capistrano, California-based Stradella Investments, Inc., filed for Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 10-23193) on Sept. 19, 2010. Timothy J. Yoo, Esq., at Levene Neale Bender Rankin & Brill LLP, assists the Debtor in its restructuring effort. The Debtor disclosed $25,000,000 in assets and $121,000,671 in liabilities in its schedules. The Debtor's primary assets is a $25 million promissory note in its favor made out by RM Eagle, LLC, in connection with the purchase of certain real property. RM Eagle defaulted on a construction loan with respect to the development of the Property, and the lender foreclosed on RM Eagle. An affiliate of Stark Investments is currently the title holder of the Property. The Note is secured by a deed of trust on the Property. The Debtor filed a First Amended Chapter 11 Plan of Reorganization on Feb. 13, 2013. Under the Plan, creditors are to be paid in full over time from the proceeds of the Debtor's assets. General unsecured creditors in Class 3 will be paid from any amounts remaining from the proceeds of the Note after Secured Creditors in Class 1 and Class 2 are paid. Class 4 Equity Interests in the Debtor will retain their interests. SUPERCONDUCTOR TECHNOLOGIES: Incurs $10.9-Mil. Net Loss in 2012 --------------------------------------------------------------- Superconductor Technologies Inc. filed on March 8, 2013, its annual report on Form 10-K for the year ended Dec. 31, 2012. Marcum LLP, in Los Angeles, California, expressed substantial doubt about Superconductor Technologies' ability to continue as a going concern. The independent auditors noted that the Company has incurred significant net losses since its inception, has an accumulated deficit of $261,944,000, and expects to incur substantial additional losses and costs to sustain operations. The Company reported a net loss of $10.9 million on $3.5 million of revenues in 2012, compared with a net loss of $13.4 million on $3.5 million of revenues in 2011. The Company's balance sheet at Dec. 31, 2012, showed $12.0 million in total assets, $1.7 million in total liabilities, and stockholders' equity of $10.3 million. A copy of the Form 10-K is available at http://is.gd/xrwoog Santa Barbara, Cal.-based Superconductor Technologies Inc. develops and commercializes high temperature superconductor ("HTS") materials and related technologies. SURVEYMONKEY: S&P Assigns 'B' CCR & Rates $365MM Facilities 'B' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned Palo Alto, Calif.- based online survey provider SurveyMonkey.com LLC (doing business as SurveyMonkey Inc.) its 'B' corporate credit rating. The outlook is stable. At the same time, S&P assigned SurveyMonkey's $365 million senior secured credit facilities S&P's issue-level rating of 'B' (the same as its corporate credit rating on the company), with a recovery rating of '3', indicating S&P's expectation for meaningful (50% to 70%) recovery for lenders in the event of a payment default. The facility consists of a $50 million revolving credit facility due 2018 and a $315 million term loan due 2019. SurveyMonkey used the debt proceeds to buy out certain existing shareholders and refinance existing debt. The 'B' corporate credit rating reflects the company's niche business focus and aggressive financial profile. S&P views the company's business risk profile as "weak" as it has a narrow product focus, small scale, and relatively low barriers to entry compared with most rated peers. Pro forma for the transaction, lease-adjusted leverage is 5.8x (5.2x excluding preferred stock) and EBITDA coverage of interest is 3.5x, based on preliminary 2012 results. In S&P's view, the company's financial risk profile is "highly leveraged" due to its significant debt load. S&P views SurveyMonkey's management and governance as "fair." SurveyMonkey is a leading online survey tool for individual survey creation, response collection, and result analysis. Although SurveyMonkey's subscriber base has grown rapidly, the company operates on a limited scale and has a narrow business focus. The vast majority of the company's revenue comes from online surveys. At this time, there is no major online survey competitor, but the possibility of a new product or significantly better-capitalized competitor gaining market share is a risk. The company has grown through a combination of organic growth, international expansion, and acquisitions. SurveyMonkey spends very little on marketing. Instead, its customers spread awareness by sending out surveys to colleagues, classmates, and friends. Over the last few years, the company has focused on expanding internationally and now supports 15 languages. About one-third of customers are international. The company has also grown through acquisitions. In January 2012, the company acquired Zoomerang, which had been SurveyMonkey's closest competitor. This acquisition increased the company's installed base of subscribers. SurveyMonkey has exhibited healthy profitability. The company has a gross margin of more than 90% and an EBITDA margin in the mid- 40% area due to minimal cost of revenue and marketing expenses. The company has not significantly raised prices but has been able to increase average revenue per user (ARPU) by introducing premium packages with additional features. SurveyMonkey offers monthly and annual paid subscriptions. Churn has come down as the percentage of subscribers using annual plans has increased. S&P expects churn levels to remain steady over the intermediate term. SWISS CHALET: CPG Allowed Partial Discovery on Plan Carve-Out ------------------------------------------------------------- Bankruptcy Judge Enrique S. Lamoutte has partially allowed CPG/GS NPR, LLC's discovery request in the Swiss Chalet, Inc. Chapter 11 case in relation to a bankruptcy plan-required carve-out amount. Confirmed on Feb. 3, 2012, the Debtor's Plan of Reorganization required "the transmittal of additional cash from CPG/GS to the Debtor to complete the $910,637.52 'Carve-Out Cash (SCI)', 'to the extent that available Cash in the SCI estate is insufficient to cover the amount of SCI's Carve-Out Accounts.'" However, when the Debtor posted its February 2012 monthly operating report, CPG inquired why the Debtor contended it had no available cash as of the Feb. 21 Effective Date when the February 2012 MOR showed otherwise. CPG then sought in April 2012 -- via a motion to compel -- the return of $541,221 cash collateral it had wired to the Debtor. CPG also sought discovery on the Carve-Out and the Debtor's CRIM payments. The Debtor sustained that CPG's intended discovery is unnecessary because an agreement was reached with CPG at a Feb. 21 meeting as to the Carve-Out amount. In a March 11, 2013 order, Judge Lamoutte allowed CPG to conduct discovery on the alleged agreement on the Carve-Out and on certain unsworn statements filed with the bankruptcy court. The parties are to conclude discovery within 60 days from the entry of the Court's order. Discovery on all other matters, the judge ruled, is held in abeyance until the dispute on whether or not there was an carve-out agreement was reached is ultimately resolved. A copy of Judge Lamoutte's March 11 Opinion and Order is available at http://is.gd/TAhaGwfrom Leagle.com. The court said it cannot make a ruling regarding CPG's interrogatories and request for production of documents and admissions since the same have not been filed and, thus, they cannot be examined under the scope of Fed. R. Civ. P. 26. A pre-trial hearing on the contested matter is scheduled for May 28, 2013 at 2:00 p.m. About The Swiss Chalet The Swiss Chalet Inc., developed the Gallery Plaza Condominium and Atlantis Condominium in San Juan, Puerto Rico. SCI also owns the DoubleTree Hotel in Condado, San Juan, Puerto Rico, adjacent to the Gallery Plaza. SCI filed a Chapter 11 petition (Bankr. D.P.R. Case No. 11-04414) on May 27, 2011. Charles A. Cuprill, P.S.C. Law Offices, in San Juan, P.R., serves as its bankruptcy counsel. CPA Luis R. Carrasquillo & Co., P.S.C., serves as its financial consultants. In its schedules, the Debtor disclosed total assets of $115,580,977 and total debts of $138,603,384. The petition was signed by Arnold Benus, director. The Debtor's Joint Amended Plan of Reorganization was confirmed on Feb. 2, 2012. TENNECO INC: Fitch Raises Issuer Default Rating to 'BB+' -------------------------------------------------------- Fitch Ratings has upgraded Tenneco Inc.'s Issuer Default Rating (IDR) to 'BB+' from 'BB'. In addition, Fitch has affirmed TEN's secured Term Loan A and secured revolving credit facility ratings at 'BBB-' and upgraded TEN's senior unsecured ratings to 'BB' from 'BB-'. Fitch's ratings apply to an $850 million secured revolving credit facility, a $241 million secured Term Loan A and $725 million in senior unsecured notes. The Rating Outlook for TEN is Stable. Key Rating Drivers The upgrade of TEN's ratings reflects the continued strengthening in the auto supplier's credit profile as global auto sales have grown and demand for the company's technologies remains strong. TEN remains a top global supplier of emission control and vehicle suspension components, with a strong presence in both the original equipment and aftermarket segments. In addition to the company's traditional light vehicle business, increasingly stringent regulations in a number of regions governing commercial truck and off-highway vehicle emissions are driving further growth opportunities and higher margins. Primary risks to the company's credit profile include industry cyclicality, which could become more pronounced as commercial vehicles comprise a larger proportion of the company's sales mix, volatile raw material costs and higher fuel prices; although the company's lowered cost structure and strengthened balance sheet have improved its ability to withstand another downturn in global demand. Fitch expects demand for TEN's products, especially in its Clean Air division, to grow over the next several years as global emissions requirements tighten. In particular, TEN continues to capture new business in the global on-highway commercial vehicle and off-highway specialty vehicle markets as emission requirements in those segments become more restrictive. In the off-highway market, tightening regulations for locomotives and water-borne vessels are presenting potential new opportunities for additional demand growth. As a result of these factors, Fitch expects TEN's revenue stream to become increasingly diversified over the next several years. Fitch also expects the company's revenue to grow at a rate in excess of global light vehicle production as its product penetration increases and as it transitions into the new market segments. In addition to emission control products, new technologies in the company's Ride Performance division, including active and lower-cost semi-active suspension systems, will also contribute to increased revenues and margins. Based on increasing demand from the commercial vehicle and off- highway segments, the proportion of TEN's original equipment revenue tied to those segments could more than double within five years, to about 30% from 13% in 2012. This growth, on top of the expected rise in global light vehicle production, is expected to result in a substantial increase in the company's original equipment revenue over the intermediate term. Combined with the permanent changes to the company's cost structure, including new or expanded manufacturing facilities in a number of low-cost countries and cost reduction activities currently underway in Europe, as well as the higher margins that the commercial and off- highway business typically generates, Fitch expects higher business levels to support margins at or above current levels over the intermediate term. Fitch's calculated EBITDA margin was 8.8% in 2012, but excluding substrate revenues, which are largely passed through to customers with only a small markup, Fitch estimates TEN's EBITDA margin would have been about 11% for the year. Fitch expects TEN's credit profile to strengthen over the intermediate term on higher business levels and continued discipline on controllable costs. Fitch projects that EBITDA gross leverage will show a further modest decline during 2013, potentially to around 1.5x, and is likely to decline further over the next couple of years. TEN's management has stated that the company is targeting net leverage of 1.0x in order to provide sufficient financial flexibility in the case of a downturn. Fitch views this low leverage target positively, as it suggests that leverage reduction will remain a top priority for the company over the intermediate term. TEN's actual net leverage at Dec. 31, 2012, was 1.5x. Fitch notes that the company has the flexibility to use excess free cash flow to prepay amounts outstanding on the secured Term Loan A without penalty. The greatest risk to TEN's credit profile in the near term is the potential for a decline in global vehicle production driven by a slowing global economy. This risk is offset somewhat by the company's increasingly diverse customer base, lowered cost structure, and tightening global emissions regulations, which will drive the market for emission control solutions regardless of global economic conditions. This is especially true for commercial and off-road vehicles, which will continue to increase TEN's installed penetration rates over the intermediate term. In addition, the company's lack of meaningful debt maturities until 2017 further mitigates near-term liquidity risk in a weakened demand environment. Rising vehicle fuel prices also present a risk in that they could result in a decline in overall vehicle demand, as well as a shift in demand toward smaller vehicles that are less profitable for TEN. Volatile raw material costs are also a risk, although TEN mitigates this risk by passing along a substantial portion of the change in its material costs to its original equipment customers. Offsetting increased material costs in the aftermarket business is more challenging, however. In 2012, TEN's credit profile strengthened modestly on continued improvements in the company's operating performance and a slight reduction in debt. As of Dec. 31, 2012, TEN's EBITDA leverage (as calculated by Fitch) stood at 1.8 times (x), down from 2.0x at year-end 2011, while total debt of $1.18 billion was down from $1.22 billion. Funds from operations (FFO) adjusted leverage was 2.7x at year-end 2012, down from 3.2x at year-end 2011. Free cash flow grew substantially in 2012, to $109 million from $32 million in 2011, despite a $43 million increase in capital spending to $256 million. Over the intermediate term, Fitch expects free cash flow to remain positive, but it will be constrained somewhat by relatively high capital spending tied to growing production levels and cash costs tied to the company's European cost reduction program. On the latter topic, Fitch estimates that cash costs to implement the European cost reduction program could total roughly $90 million over the course of 2013 and 2014. Although revenue increased only 2.2% in 2012, to $7.4 billion, margins grew on improved manufacturing efficiencies and cost controls. Fitch's calculated EBITDA margin was 8.8% in 2012 versus 8.5% in 2011, and the free cash flow margin grew to 1.5% from 0.4%. Overall liquidity remained relatively strong, with $223 million in cash and marketable securities and $710 million in availability on the company's secured revolver, while short-term debt maturities (including current maturities of long-term debt) totaled $113 million. Long-term debt maturities are comparatively light until 2017, when the final $125 million payment on the company's Term Loan A and any outstanding revolver borrowings come due. The funded status of TEN's global pension plans improved slightly in 2012, with the plans' funded status increasing to 68% at year- end 2012 from 67% at year-end 2011. However, in the U.S., TEN's plans were only 60% funded at Dec. 31, 2012, up from 58% at the end of 2011. As with many corporate plans, the continued low funded status was primarily due to historically low long-term interest rates, with TEN using a 4.1% discount rate to value its projected benefit obligation in 2012, down from 4.8% in 2011. On a dollar basis, however, TEN's global plans were only underfunded by $285 million ($186 million in the U.S.), which Fitch believes is manageable, given the company's liquidity position and free cash flow prospects. TEN has estimated that required cash contributions to its global pension plans will be $59 million in 2013, up from $48 million in 2012. TEN's secured revolver and secured Term Loan A are both rated one- notch above the company's IDR to reflect their substantial collateral coverage, which includes virtually all of the company's U.S. assets and up to 66% of its first-tier foreign subsidiaries. As detailed in Fitch's criteria report, 'Recovery Ratings and Notching Criteria for Non-Financial Corporate Issuers', 'BBB-' is the highest rating that may be assigned to an issuance or facility of an issuer with an IDR of 'BB+' or lower. TEN's senior unsecured notes are rated one notch below the company's IDR to reflect the substantial amount of secured debt in the company's capital structure. Assuming a fully-drawn revolver, about 60% of TEN's long-term debt would be secured, reducing potential recoveries for unsecured creditors. Rating Sensitivities Positive: Further developments that may, individually or collectively, lead to a positive rating action include: -- A continued decline in leverage to the low 1x level; -- Further growth in the company's free cash flow and free cash flow margin; -- Maintaining a value-added margin above 10%; -- Improvement in the funded status of the company's pension plans. Negative: Further developments that may, individually or collectively, lead to a negative rating action include: -- A severe decline in global vehicle production that leads to reduced demand for TEN's products; -- A debt-financed acquisition that weakens credit metrics for a prolonged period; -- Shareholder-friendly actions that result in a significant increase in leverage or decline in liquidity; -- A reversal in the company's focus on reducing operating leverage. Fitch has taken the following rating actions on TEN with a Stable Rating Outlook: -- Issuer Default Rating (IDR) upgraded to 'BB+' from 'BB'; -- Secured Term Loan A rating affirmed at 'BBB-'; -- Secured revolving credit facility rating affirmed at 'BBB-'; -- Senior unsecured notes rating upgraded to 'BB' from 'BB-'. TGAG LLC: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------ Debtor: TGAG, LLC dba The Goddard School 62 Triangle Center Drive Yorktown Heights, NY 10598 Bankruptcy Case No.: 13-22403 Chapter 11 Petition Date: March 11, 2013 Court: United States Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Rosemarie E. Matera, Esq. KURTZMAN MATERA, PC 664 Chestnut Ridge Road Spring Valley, NY 10977 Tel: (845) 352-8800 Fax: (845) 352-8865 E-mail: law@kmpclaw.com Scheduled Assets: $3,364,500 Scheduled Liabilities: $1,826,385 A copy of the Company's list of its four unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/nysb13-22403.pdf The petition was signed by April Fatato, managing member. TRANS1 INC: PwC LLP Raises Going Concern Doubt ---------------------------------------------- TranS1 Inc. filed on March 7, 2013, its annual report on Form 10-K for the year ended Dec. 31, 2012. PricewaterhouseCoopers LLP, in Raleigh, N.C., expressed substantial doubt about TranS1's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations. The Company reported a net loss of $29.9 million on $14.6 million of revenue for 2012, compared with a net loss of $18.3 million on $19.2 million of revenue for 2011. The Company's balance sheet at Dec. 31, 2012, showed $32.2 million in total assets, $11.1 million in total liabilities, and stockholders' equity of $21.1 million. A copy of the Form 10-K is available at http://is.gd/NwQO1K Raleigh, N.C.-based TranS1 Inc. is a medical device company focused on designing, developing and marketing products to treat degenerative conditions of the spine affecting the lumbar region. TRAVELPORT LTD: Reports Financial Results for 4th Quarter 2012 ------------------------------------------------------------- Travelport Limited on March 12 announced its financial results for the fourth quarter and full year ended December 31, 2012. Commenting on the company's performance, Gordon Wilson, President and CEO of Travelport, said: "Travelport's strategic growth plans continue to gain momentum. We broadened our travel content, improved our point of sale platform delivery, grew our payments business and developed greater distribution capabilities for ancillary products and services. Our key underlying business performance indicators of RevPas and Gross Margin have improved every quarter of this year compared to 2011." These results are being released following a Travelport announcement of a proposed comprehensive refinancing plan. 2012 Highlights: -- Increased hotel content to over 375,000 bookable properties and more than 950,000 room offers; -- Signed 35 new airline and merchandizing content agreements, including: -- Air Canada, Air China, China Southern, Delta Airlines, KLM, Lufthansa, Qantas and South African Airways -- Low cost airlines such as easyJet, Kulula, RAK Airways and Transavia; -- Won customers in all regions and key countries, including Canada, Russia, the UK and the USA; -- Grew eNett business settling transactions in 2012 with 18x increase over 2011; -- Executed strategic partnerships in Asia: -- Secured long-term agreement to run the Japan Airlines AXESS GDS -- Extended co-operation with Chinese GDS, TravelSky, to include hotels; -- Recognized by both the travel and technology industries with awards in all regions, including 'Best GDS'(Asia Pacific) and 'IT Team of the Year' in the American Business Awards. Financial Highlights for Fourth Quarter 2012 (in $ millions) Q4 2012 Q4 2011 Change % Change Net Revenue 457 465 (8) (2) Operating (Loss) Income (17) 4 (21) * EBITDA 41 62 (21) (34) Adjusted EBITDA 89 106 (17) (16) * Not meaningful Travelport RevPas increased 5% to $5.47 for the fourth quarter of 2012. The loss of the Master Services Agreement ("MSA") with United Airlines contributed approximately $26 million to the decline in net revenue and $19 million to the decline in each of operating income, EBITDA and Adjusted EBITDA for the fourth quarter of 2012 compared to 2011. Excluding the impact of this loss, net revenue for the fourth quarter of 2012 increased $18 million from the fourth quarter of 2011, both operating income and EBITDA declined by $2 million, compared to 2011, and Adjusted EBITDA increased by $2 million compared to 2011. The average rate of agency commissions increased 1% for the fourth quarter of 2012. Financial Highlights for the Full Year 2012 (in $ millions) 2012 2011 Change % Change Net Revenue 2,002 2,035 (33) (2) Operating Income 138 200 (62) (31) EBITDA 371 427 (56) (13) Adjusted EBITDA 455 507 (52) (10) Travelport RevPas increased 3% to $5.28 for the full year 2012. The loss of the MSA with United Airlines contributed approximately $69 million to the decline in net revenue and $50 million to the decline in each of operating income, EBITDA and Adjusted EBITDA in 2012 compared to 2011. Excluding the impact of this loss, net revenue for 2012 increased $36 million from 2011, and operating income, EBITDA and Adjusted EBITDA declined by $12 million, $6 million and $2 million respectively, compared to 2011. The average rate of agency commissions increased 1% for the full year 2012. Interest costs of $290 million for the full year 2012 were $3 million higher due to higher effective interest rates. Travelport generated $181 million in net cash from operating activities of continuing operations for the full year 2012, a $57 million increase from 2011, due to improved operating working capital and lower interest payments, partially offset by a decline in Adjusted EBITDA. For the full year 2012 free cash flow was $73 million, unlevered free cash flow was $305 million and including other financing and investing activities net cash and cash equivalents decreased by $14 million. Travelport's net debt was $3,183 million as of December 31, 2012, which comprised debt of $3,430 million less $110 million in cash and cash equivalents and less $137 million of cash held as collateral. About Travelport Limited Travelport Limited, headquartered in Atlanta, Ga., is a provider of critical transaction processing solutions and data to companies operating in the global travel industry. With a presence in over 170 countries, approximately 3,500 employees and 2012 net revenue of more than $2 billion, Travelport is comprised of the global distribution system (GDS) business, which includes the Galileo and Worldspan brands, its Airline IT Solutions business and a majority joint venture in eNett. At Sept. 30, 2012, the Company had total current assets of US$617.0 million and total current liabilities of US$728.0 million. Travelport Limited's working capital deficit was US$111 million as of Sept. 30, 2012. TRIBUNE CO: S&P Assigns 'BB-' CCR & Rates $1.1BB Loan 'BB+' ----------------------------------------------------------- Standard & Poor's Ratings Services assigned Chicago, Ill.-based Tribune Co. a 'BB-' corporate credit rating. The outlook is stable. At the same time, S&P assigned Tribune's $1.1 billion first-lien term loan due 2019 a 'BB+' issue-level rating (two notches higher than the corporate credit rating), with a recovery rating of '1', indicating S&P's expectation for very high (90% to 100%) recovery for debtholders in the event of a payment default. S&P views Tribune's business risk profile as "fair," mainly reflecting S&P's view that television broadcasting has become a much larger portion of the company's EBITDA and offers a significant element of stability to profitability and cash flow, notwithstanding the unfavorable fundamentals of the newspaper business. The business risk profile is also supported by a stream of cash distributions from the company's equity investments, notably a 31% stake in Television Food Network, G.P., a 32% state in CareerBuilder LLC, and a 28% stake in Classified Ventures LLC. Despite the company's relatively moderate leverage, S&P considers Tribune's financial policy "aggressive," based on S&P's expectation that the company's equity owners will be eager to monetize their investments, which could entail dividends financed by debt and/or asset sales. Tribune recently hired advisors to explore the sale of its newspaper assets. S&P also believes that the company's equity investments are nonstrategic. Tribune could be interested in selling its stake in TV Food; however, agreeing to a value with Scripps Networks Interactive Inc. may prove to be a difficult gating factor, in S&P's view. Following Tribune's emergence from bankruptcy, a new CEO was put in place. However, given the uncertainty surrounding the company's financial policy and business plans, S&P currently views the management and governance of the company as "weak." The company's broadcasting operations provide diversification and stability, although they face a variety of long-term risks. Operating performance of the broadcasting segment's group of 23 large-market TV stations is cyclical and sensitive to the timing of elections, but generates good cash flow. Slightly less than half of the company's broadcasting revenue comes from CW- affiliated television stations, which S&P views as less desirable than major network stations because of less popular primetime content (which represents about 7% of advertising revenue from these stations) as well as less negotiating power with advertisers and with cable and satellite operators for retransmission fees. The company's publishing operations consist primarily of eight metropolitan papers and related websites. The company's two largest papers, the Los Angeles Times and the Chicago Tribune, account for roughly 60% of the segment's revenue and slightly more than half of its EBITDA. Despite cost reductions, operating cash flow from this segment fell about 40% from 2008 through 2011 due to the secular decline in print advertising revenues. S&P believes that profitability at the publishing segment will continue to decline, as additional cost cuts may be insufficient to offset long-term pressures of readership declines and advertising moving online. TRONOX LTD: Term Loan Increase No Impact on Moody's 'Ba3' CFR ------------------------------------------------------------- Moody's Investors Service said Tronox Limited's (NYSE: TROX) plan to upsize its proposed term loan due 2020 to $1.5 billion from $1.3 billion does not impact the firm's Ba3 Corporate Family Rating ratings on its outstanding debt or its rating outlook. Tronox Limited, with its US headquarters in Stamford, CT, is the world's fifth largest producer of titanium dioxide and a producer of titanium ore feedstocks through the recently acquired Exxaro Mineral Sands business. It operates three plants in Hamilton, MS, Botlek, The Netherlands, and Kwinana, Australia. Tronox Limited's revenues were $2.1 billion for the year ended December 31, 2012 (pro forma for the Exxaro Mineral Sands acquisition). TRONOX LTD: S&P Affirms 'BB' CCR Following $200MM Add-On -------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BBB-' issue rating and '1' recovery rating on the term loan issued by Tronox Pigments (Netherlands) BV -- a subsidiary of Tronox Ltd. -- remain unchanged following the company's $200 million increase in the proposed term loan to $1.5 billion. All of S&P's other ratings on Tronox, including the 'BB' corporate credit rating, also remain unchanged. The outlook remains stable. Tronox will use the proceeds to refinance its existing term loan, for potential strategic alternatives, and for general corporate purposes. The '1' recovery rating on Tronox's proposed term loan indicates S&P's expectation of a very high (90% to 100%) recovery in the event of a payment default. RATINGS LIST Tronox Ltd. Corporate credit rating BB/Stable/-- Ratings Unchanged Tronox Pigments (Netherlands) BV $1.5 bil term loan* BBB- Recovery rating 1 *$200 million added to existing loan. UNITED AIR: S&P Rates $1BB 5-Yr. Facility and $900MM Loan 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' issue rating and '1' recovery rating to United Air Lines Inc. and Continental Airlines Inc.'s $1 billion, five-year revolving credit facility and $900 million six-year term loan B. The '1' recovery rating indicates S&P's expectation of very high (90%-100%) recovery in a payment default scenario. United Air Lines Inc. and Continental Airlines Inc. are co-borrowers and are subsidiaries of United Continental Holdings Inc. (each rated B/Stable/--). United Continental Holdings Inc. guarantees the bank facilities. Collateral consists of United's international routes to China, Hong Kong, and London's Heathrow International Airport, as well as related gates, and airport takeoff and landing slots. Also included are domestic take-off and landing slots at Washington Reagan Airport, New York La Guardia Airport, and Newark Airport. The appraised value of the international routes, gates, and slots comprises about 73% of the total, and domestic slots 27%. An independent appraiser valued the international route rights (and related gates and slots), using a discounted free cash flow approach, based on United's revenues and operating costs on these routes and on the appraiser's projections. The discount rate used is lower than the appraiser's previous valuations, based on declining interest rates and greater stability in the U.S. airline industry, which results in a higher appraised value. In S&P's analysis it applied the higher discount rate previously used, which resulted in a lower value. A different appraiser valued the domestic slots. In S&P's analysis of a simulated default scenario, it applied discounts and thus estimated recovery on the various types of collateral as follows: -- 60% recovery for routes to China and Hong Kong, which are high-growth markets with barriers to entry in the case of the China routes; -- 50% for routes to London Heathrow, which has open access for routes between the U.S. and European Union but scarce takeoff and landing slots; -- 75% for domestic slots at Reagan Airport; and -- 60% for slots at La Guardia and Newark (lower because the slots exist under a series of temporary, but repeatedly renewed, orders by the U.S. Department of Transportation). The description of collateral in the credit agreement does not specify that liens and security interests in non-U.S. collateral, principally airport takeoff and landing slots, are being perfected. This is consistent with what other U.S. airlines have said in connection with other route financings. This creates some uncertainty, particularly surrounding the London Heathrow slots (non-U.S. assets) because it is their scarcity value, rather than that of the international routes (U.S. assets), that represents most of the value relating to operations to Heathrow. The issue of nonperfection of security interests in non-U.S. assets arose also in connection with certain secured notes in American Airlines Inc.'s bankruptcy proceedings. Currently, it appears that American will not seek to challenge the security status of its Heathrow slots collateral. S&P used a lower recovery for these routes than for the China and Hong Kong ones because of the nonperfection issue, as well as the slower growth prospects of Heathrow routes. The discrete asset valuation assumptions yield a stressed collateral value of about $1.96 billion. S&P estimates about $1.94 billion in first-lien secured claims outstanding (revolver and term loan, plus six months of accrued interest on debt). Therefore, under the simulated default scenario, full collateral coverage indicates a '1' recovery rating. Under S&P's criteria, this results in a 'BB-' issue rating, two notches higher than its 'B' corporate credit ratings on United and Continental. The guaranty by United Continental Holdings does not add recovery value in our analysis. RATINGS LIST United Air Lines Inc. Continental Airlines Inc. United Continental Holdings Inc. Corporate Credit Rating B/Stable/-- New Ratings United Air Lines Inc. Continental Airlines Inc. $1 bil revolving credit fac BB- Recovery Rating 1 $900 mil term loan B BB- Recovery Rating 1 UNITED CONTINENTAL: Moody's Rates New Senior Debt Facility 'Ba2' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the new first lien senior secured credit facility that UAL announced on March 12, 2013. Moody's also affirmed the respective B2 Corporate Family and B2-PD Probability of Default ratings of United Continental Holdings, Inc. and Continental Airlines, Inc. as well as the debt and Enhanced Equipment Trust Certificate ratings of these two issuers or of United Air Lines, Inc. Moody's also affirmed the SGL-2 Speculative Grade Liquidity rating of UAL and withdrew the SGL-2 Speculative Grade Liquidity rating assigned to Continental as the company is closer to completing the legal entity merger of the two airlines, which it expects to occur in 2013. The rating outlook is stable. United and Continental will be co-borrowers on the new facility, which will provide a $1.0 billion revolving commitment due in 2018 and a $900 million term loan due in 2019. UAL will guarantee the obligations under this new credit facility. The proceeds of the term loan along with cash on hand will fund the refinancing of United's $1.2 billion first lien senior secured term loan due 2014. The new revolver will replace the companies' existing $500 million revolver due January 31, 2015. Ratings Rationale: The affirmation of the Corporate Family and Probability of Default ratings considers the group's good liquidity profile, competitive market position and supportive credit metrics. The ratings anticipate that UAL will sustain its current sound credit profile notwithstanding expected negative free cash flow generation in at least the next two years because of higher capital expenditures for new aircraft and other capital investments. While UAL could also experience modest pressure on operating cash flow should industry demand weaken because of lower than expected economic growth, continued careful management of capacity should enable the company to manage such pressures. Moody's expects the new revolver to remain undrawn, and in conjunction with the group's $6.5 billion of unrestricted cash supports the SGL-2 Speculative Grade Liquidity rating. The borrowers will need to comply with a minimum collateral coverage ratio of 1.67 times and maintain at least $3.0 billion of liquidity. Additionally, no less than 66% of the company's eligible slots at Newark-Liberty International Airport must remain a part of the collateral and there is a 1.1 times fixed charge coverage test for restricted payments and other defined transactions. The company is expected to maintain adequate cushion for compliance with these covenants. The stable outlook reflects Moody's belief that challenging elements of the integration of the airline operations have been substantially addressed, alleviating potential challenges in upcoming quarters as the company focuses on improving its traffic and revenue performance. Good liquidity, supported by unrestricted cash in excess of $6.0 billion at December 31, 2012 and the new $1.0 billion revolver, provides sufficient cushion to fund remaining integration costs, debt maturities and or collateral calls in the event cash flow from operations was to unexpectedly decline. The stable outlook also anticipates ongoing capacity discipline by UAL, and the industry, and vigilance in controlling non-fuel costs by UAL; each of which should help mitigate pressure on earnings during periods of declining passenger counts. Sustained stronger credit metrics such as Funds from operations + interest to interest of at least 3.0 times, Debt to EBITDA below 5.5 times and or Free Cash Flow to Debt of at least 4% could positively pressure the ratings. The ratings could face downwards pressure if the company is unable to maintain its EBIT margin above 5% while its cost of jet fuel surpassed $3.40 per gallon or if aggregate liquidity including cash and availability on revolving credit facilities was sustained below $4.0 billion. Sustained negative free cash flow generation, Debt to EBITDA of more than 7.0 times or Funds from operations + interest to interest of below 2.0 times could also lead to a negative rating action. Downgrades: Issuer: Cleveland (City of) OH Senior Unsecured Revenue Bonds Sep 15, 2027, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Dec 1, 2019, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Issuer: Continental Airlines, Inc. Senior Secured Regular Bond/Debenture Sep 15, 2015, Downgraded to a range of LGD2, 22 % from a range of LGD2, 19 % Senior Unsecured Conv./Exch. Bond/Debenture Jan 15, 2015, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Issuer: Denver (City & County of) CO Senior Unsecured Revenue Bonds Oct 1, 2032, Downgraded to a range of LGD5, 74 % from a range of LGD4, 66 % Issuer: Harris County Industrial Dev Corp, TX Senior Unsecured Revenue Bonds Jul 1, 2019, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Issuer: Hawaii Department of Transportation Senior Unsecured Revenue Bonds Nov 15, 2027, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jun 1, 2020, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Issuer: Houston (City of) TX Senior Unsecured Revenue Bonds Jul 15, 2030, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jul 15, 2038, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jul 15, 2027, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jul 15, 2027, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jul 15, 2017, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jul 15, 2029, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jul 15, 2029, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jul 1, 2021, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jul 1, 2022, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jul 1, 2029, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jul 1, 2029, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Issuer: New Jersey Economic Development Authority Senior Unsecured Revenue Bonds Apr 1, 2028, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Sep 15, 2019, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Sep 15, 2023, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Sep 15, 2029, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Nov 15, 2030, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Nov 15, 2030, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Jun 1, 2033, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Senior Unsecured Revenue Bonds Sep 15, 2027, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Issuer: Port Authority of New York and New Jersey Revenue Bonds Dec 1, 2015, Downgraded to a range of LGD5, 74 % from a range of LGD5, 71 % Upgrades: Issuer: United Air Lines, Inc. Senior Secured Bank Credit Facility Feb 1, 2014, Upgraded to a range of LGD2, 23 % from a range of LGD2, 25 % Assignments: Issuer: Continental Airlines, Inc. Senior Secured Bank Credit Facility, Assigned Ba2 Senior Secured Bank Credit Facility, Assigned Ba2 Senior Secured Bank Credit Facility, Assigned a range of LGD2, 22 % Senior Secured Bank Credit Facility, Assigned a range of LGD2, 22 % Affirmations: Issuer: Cleveland (City of) OH Senior Unsecured Revenue Bonds Sep 15, 2027, Affirmed B3 Senior Unsecured Revenue Bonds Dec 1, 2019, Affirmed B3 Issuer: Continental Airlines Finance Trust II Pref. Stock Preferred Stock Nov 15, 2030, Affirmed Caa1 Issuer: Continental Airlines, Inc. Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured Enhanced Equipment Trust Jun 2, 2013, Affirmed B1 Senior Secured Enhanced Equipment Trust Jun 2, 2015, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Jun 2, 2015, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Apr 15, 2015, Affirmed B2 Senior Secured Enhanced Equipment Trust Jul 2, 2014, Affirmed B2 Senior Secured Enhanced Equipment Trust Apr 1, 2021, Affirmed B1 Senior Secured Enhanced Equipment Trust Apr 29, 2018, Affirmed B1 Senior Secured Enhanced Equipment Trust Apr 15, 2015, Affirmed Ba2 Senior Secured Enhanced Equipment Trust Jul 2, 2014, Affirmed Ba2 Senior Secured Enhanced Equipment Trust Jan 2, 2017, Affirmed Ba2 Senior Secured Enhanced Equipment Trust Sep 15, 2018, Affirmed Ba2 Senior Secured Enhanced Equipment Trust Nov 1, 2017, Affirmed Ba2 Senior Secured Enhanced Equipment Trust Feb 2, 2020, Affirmed Ba1 Senior Secured Enhanced Equipment Trust Sep 15, 2021, Affirmed Ba2 Senior Secured Enhanced Equipment Trust May 1, 2022, Affirmed Ba3 Senior Secured Enhanced Equipment Trust Oct 2, 2019, Affirmed Ba3 Senior Secured Enhanced Equipment Trust Dec 15, 2015, Affirmed Ba1 Senior Secured Enhanced Equipment Trust May 10, 2017, Affirmed Ba2 Senior Secured Enhanced Equipment Trust Jul 12, 2020, Affirmed Ba2 Senior Secured Enhanced Equipment Trust Apr 11, 2020, Affirmed Ba2 Senior Secured Enhanced Equipment Trust Apr 29, 2022, Affirmed Ba2 Senior Secured Enhanced Equipment Trust Apr 15, 2015, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Jul 2, 2014, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Apr 1, 2015, Affirmed Baa3 Senior Secured Enhanced Equipment Trust Mar 24, 2013, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Jan 2, 2018, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Sep 15, 2017, Affirmed Baa2 Senior Secured Enhanced Equipment Trust May 1, 2018, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Aug 2, 2020, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Sep 15, 2021, Affirmed Baa2 Senior Secured Enhanced Equipment Trust May 1, 2022, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Oct 2, 2022, Affirmed Baa3 Senior Secured Enhanced Equipment Trust Jun 15, 2021, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Sep 15, 2021, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Sep 15, 2021, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Nov 10, 2019, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Jul 12, 2022, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Apr 11, 2024, Affirmed Baa2 Senior Secured Enhanced Equipment Trust Apr 29, 2026, Affirmed Baa2 Senior Secured Equipment Trust Jul 2, 2018, Affirmed B1 Senior Secured Equipment Trust Sep 1, 2019, Affirmed B1 Senior Secured Equipment Trust Apr 19, 2014, Affirmed B1 Senior Secured Equipment Trust Apr 19, 2022, Affirmed Ba2 Senior Secured Equipment Trust Apr 19, 2022, Affirmed Baa2 Senior Secured Equipment Trust Jul 8, 2016, Affirmed Baa2 Senior Secured Regular Bond/Debenture Mar 13, 2013, Affirmed Ba3 Senior Secured Regular Bond/Debenture Sep 15, 2015, Affirmed Ba2 Senior Unsecured Conv./Exch. Bond/Debenture Jan 15, 2015, Affirmed B3 Issuer: Denver (City & County of) CO Senior Unsecured Revenue Bonds Oct 1, 2032, Affirmed B3 Issuer: Harris County Industrial Dev Corp, TX Senior Unsecured Revenue Bonds Jul 1, 2019, Affirmed B3 Issuer: Hawaii Department of Transportation Senior Unsecured Revenue Bonds Nov 15, 2027, Affirmed B3 Senior Unsecured Revenue Bonds Jun 1, 2020, Affirmed B3 Issuer: Houston (City of) TX Senior Unsecured Revenue Bonds Jul 15, 2030, Affirmed B3 Senior Unsecured Revenue Bonds Jul 15, 2038, Affirmed B3 Senior Unsecured Revenue Bonds Jul 15, 2027, Affirmed B3 Senior Unsecured Revenue Bonds Jul 15, 2027, Affirmed B3 Senior Unsecured Revenue Bonds Jul 15, 2017, Affirmed B3 Senior Unsecured Revenue Bonds Jul 15, 2029, Affirmed B3 Senior Unsecured Revenue Bonds Jul 15, 2029, Affirmed B3 Senior Unsecured Revenue Bonds Jul 1, 2021, Affirmed B3 Senior Unsecured Revenue Bonds Jul 1, 2022, Affirmed B3 Senior Unsecured Revenue Bonds Jul 1, 2029, Affirmed B3 Senior Unsecured Revenue Bonds Jul 1, 2029, Affirmed B3 Issuer: New Jersey Economic Development Authority Senior Unsecured Revenue Bonds Apr 1, 2028, Affirmed B3 Senior Unsecured Revenue Bonds Sep 15, 2019, Affirmed B3 Senior Unsecured Revenue Bonds Sep 15, 2023, Affirmed B3 Senior Unsecured Revenue Bonds Sep 15, 2029, Affirmed B3 Senior Unsecured Revenue Bonds Nov 15, 2030, Affirmed B3 Senior Unsecured Revenue Bonds Nov 15, 2030, Affirmed B3 Senior Unsecured Revenue Bonds Jun 1, 2033, Affirmed B3 Senior Unsecured Revenue Bonds Sep 15, 2027, Affirmed B3 Issuer: Port Authority of New York and New Jersey Revenue Bonds Dec 1, 2015, Affirmed B3 Issuer: United Air Lines, Inc. Senior Secured Bank Credit Facility Feb 1, 2014, Affirmed Ba3 Senior Secured Enhanced Equipment Trust Jan 15, 2016, Affirmed Ba3 Senior Secured Enhanced Equipment Trust Jan 15, 2017, Affirmed Baa3 Senior Secured Pass-Through Jul 2, 2014, Affirmed B1 Senior Secured Pass-Through Jul 2, 2019, Affirmed Ba3 Senior Secured Pass-Through Jul 2, 2022, Affirmed Baa3 Senior Secured Pass-Through Nov 1, 2016, Affirmed Baa2 Issuer: United Continental Holdings, Inc. Probability of Default Rating, Affirmed B2-PD Speculative Grade Liquidity Rating, Affirmed SGL-2 Corporate Family Rating, Affirmed B2 Withdrawals: Issuer: Continental Airlines, Inc. Speculative Grade Liquidity Rating, Withdrawn , previously rated SGL-2 The principal methodology used in this rating was the Global Passenger Airlines Industry Methodology published in May 2012 and Enhanced Equipment Trust and Equipment Trust Certificates 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. United Continental Holdings, Inc. (NYSE: UAL) is the holding company for both United Airlines and Continental Airlines. Together with United Express, Continental Express and Continental Connection, these airlines operate more than 5,500 flights a day to more than 375 airports on six continents from their hubs in Chicago, Cleveland, Denver, Guam, Houston, Los Angeles, New York/Newark Liberty, San Francisco, Tokyo and Washington, D.C. VACHIRA PONGVITAYAPANU: Denied Chapter 7 Discharge of Debts ----------------------------------------------------------- Judge Jerome Feller of the U.S. Bankruptcy Court for the Eastern District of New York denied a discharge of the debts of Vachira Pongvitayapanu, also known as Jimmy Lo, pursuant to 11 U.S.C. Section 727(a)(4)(A). Beer Sheva Realty Corp., a long-time judgment creditor of Mr. Lo, objects to Mr. Lo's discharge under 11 U.S.C. Section 727(a)(4)(A) on grounds that he committed false oaths in his Chapter 7 bankruptcy case with respect to his place of residence, the amount and source of his income, and his interest in a jewelry business. Chapter 7 of the Bankruptcy Code is designed to provide individual debtors the opportunity for a "fresh start" through the discharge of personal liability for prepetition debts. Judge Feller holds that Beer Sheva has made showings that raise serious concerns about Mr. Lo's conduct in his bankruptcy case. Yet, Mr. Lo's responses come through counsel, fail to address serious allegations, are often opaque, and, at times, flippant. It is clear that "[a] debtor cannot, merely by playing ostrich and burying his head deeply enough in the sand, disclaim all responsibility for statements which he has made under oath," he adds. For this reason, the Court sustains Beer Sheva's objection to Mr. Lo's discharge pursuant to 11 U.S.C. Section 727(a)(4)(A). The bankruptcy case is In re Vachira Pongvitayapanu aka Jimmy Lo aka Jimmy Pongvitayapanu, Chapter 7 Debtor, Case No. 1-05-31722- jf. The adversary proceeding is Beer Sheva Realty Corp., Plaintiff, v. Vachira Pongvitayapanu aka Jimmy Lo, Defendant, Adv. Proc. No. 1-07-1162-jf. Neal M. Rosenbloom, Esq. -- nrosenbloom@gwfglaw.com -- at Goldberg Weprin Finkel Goldstein LLP, in New York, represent Beer Sheva. Stuart P. Gelberg, Esq., in Garden City, represent Vachira Pongvitayapanu. A copy of the Bankruptcy Court's February 27, 2013 Order is available at http://is.gd/BTlinTfrom Leagle.com. In 1984, Mr. Lo established a jewelry business called National Jewelry For Less, Inc. NJFL did business under the trade name Golden Apple Discount Jewelry, and was located at 460 Sunrise Highway in Valley Stream, New York. NJFL remained in business for some 10 years, and at one time had assets valued at $1 million. Mr. Lo also played a role in the formation of Siam Jewelers Inc., a company incorporated in 1986 or 1987, and purportedly owned by Sam Speciale and Mr. Lo's sister, Rattanavade. In January 1991, the Sheriff of Nassau County seized over $300,000 worth of NJFL's jewelry, as a result of a debt owed to Newsday, Inc. On March 11, NJFL filed for Chapter 11 bankruptcy protection. VERIFONE INC: Poor Earnings Prompt Moody's to Review 'Ba3' CFR -------------------------------------------------------------- Moody's Investors Service placed VeriFone, Inc.'s Ba3 Corporate Family Rating, its B1-PD probability of default rating, and the Ba3 rating for its senior secured credit facilities under review for downgrade. The rating action was prompted by management's significantly reduced earnings expectations and reflects growing uncertainty in executing plans to resume revenue and earnings growth amid senior management turnover. Separately, as part of the ratings actions Moody's assigned VeriFone a speculative grade liquidity rating of SGL-2 reflecting the company's good liquidity. Ratings Rationale: VeriFone announced that its long-term Chief Executive Officer has decided to step down, within days after announcing plans to address product and sales execution missteps that, in addition to weak demand for point of sale terminals, led to a significantly reduced revenue and earnings outlook for fiscal 2013. VeriFone's execution challenges in part stem from its strategy to transform its business toward a multi-year services-based model from the predominantly one-time hardware sales oriented model. Moody's estimates that VeriFone's total debt-to-EBITDA leverage could approach 4.0x (Moody's adjusted) in the next 12 months, about a turn higher than previous expectations, and the company's annual free cash flow will likely fall short of Moody's initial estimates by about $50 to $100 million in fiscal 2013. Additionally, the deleveraging has been slower-than-anticipated since the Point acquisition closed in December 2011. The ratings review will focus on VeriFone's ability to timely execute the plans to stabilize and grow revenue, and stem market share losses under the new senior management team. Moody's will also assess new management's commitment to reduce leverage, while increasing investments in the business to restore its competitive position in multiple markets. The review will also focus on management's strategy to balance growth in revenues under multi- year services agreement without impairing near term revenue prospects, and improving earnings in the face of growing competition. The following ratings were placed under review for downgrade: Issuer: VeriFone, Inc. Corporate Family Rating -- Ba3 Probability of Default Rating -- B1-PD $426 million Senior Secured Revolving Credit Facility due May 2016 -- Ba3 LGD3 (33%) $981 million (outstanding) Senior Secured Term Loan due May 2016 -- Ba3 LGD3 (33%) $99 million (outstanding) Senior Secured Term Loan due May 2018 -- Ba3 LGD3 (33%) Outlook Actions: Outlook, Changed To Rating Under Review From Stable Moody's assigned the following rating: Issuer: VeriFone, Inc. Speculative Grade Liquidity rating -- SGL-2 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. Headquartered in San Jose, California, VeriFone is a leading provider of point of sale payment systems, solutions and services. W.R. GRACE: Grace Catalysts Unit Announces Price Increase --------------------------------------------------------- Grace Catalysts Technologies, an operating segment of W.R. Grace & Co. on March 13 announced pricing and market related actions in its Refining Technologies business. Grace is discontinuing the rare earth surcharge pricing mechanism it instituted in 2010 in response to the high volatility in the costs of various rare earths used in Grace's FCC catalysts and additives. Rare earth costs have stabilized in the past six months and the company believes the surcharge mechanism is no longer appropriate. Grace will reset the base price for FCC catalysts and additives to reflect current rare earth costs, and then raise those base prices for FCC catalysts and additives 10 percent, as contract terms allow. The price increases are necessary due to significant investments made in the businesses over the past few years and to support continued investment in R&D, technical services, and planned capital investments. 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) WATCO COS: S&P Assigns 'B' CCR & Rates $400MM Sr. Notes 'CCC+' -------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to Watco Cos. LLC. The outlook is stable. S&P also assigned a 'CCC+' issue rating to the company's $400 million senior notes due 2023, with a recovery rating of '6', indicating S&P's expectation that lenders would receive negligible recovery (0-10%) in the event of a payment default. Watco Finance Corp. is a co-issuer of the notes. "The ratings on Watco reflect the company's significant debt levels, capital intensity, and acquisitive growth strategy," said Standard & Poor's credit analyst Lisa Jenkins. Partially offsetting these weaknesses are the company's sizeable market position as the second-largest short-line railroad operator in the U.S. and its participation in the relatively stable North American freight railroad industry. We characterize Watco's business risk profile as "fair" and its financial risk profile as "highly leveraged." In addition to operating a portfolio of short-line railroads, Watco also operates two other businesses: a mechanical services business that repairs railcars and a business that provides terminal and port services. Watco developed its current business mix through a series of acquisitions, which has left the company with a highly leveraged balance sheet. Debt to EBITDA is currently close to 6x on a reported basis but is closer to 5x on a pro forma basis, factoring in a full year's worth of earnings from recent acquisitions. S&P expects the company to continue to make acquisitions from time to time, and S&P believes credit metrics will vary depending on the timing and magnitude of these investments. S&P's ratings incorporate an expectation that the company will manage its acquisition program in such a way as to maintain debt to EBITDA between 5x and 6x. In calculating this ratio, S&P has given partial equity credit to the company's preferred stock and have included debt associated with several variable interest entities that are not guarantors of the notes but which S&P views as an integral part of the company's terminal and port services business. While the company's private ownership limits the company's access to funding sources, adding to financial risk, S&P believes that it also provides an incentive for management to operate the business in a prudent fashion and to take a disciplined approach to future acquisition activity. S&P's assessment of the company's business risk profile reflects the company's participation in an industry with favorable fundamentals, offset by risks associated with some customer concentration and an active acquisition program. While Watco operates three business segments, its short-line railroad portfolio accounts for almost two-thirds of total company revenues. Within the short-line rail service segment, revenues are somewhat concentrated by customer, with the top 10 accounting for about 30% of revenues. Watco transports a variety of commodities, but it has some concentration in agriculture (22% of segment revenues), minerals (25%), and energy and chemicals (21%). Its non-transportation businesses also have significant customer concentration. The outlook is stable. S&P expects Watco to benefit from recent acquisitions and the slowly recovering U.S. economy over the coming year. However, S&P also expects the company to continue to pursue acquisitions, which will likely result in continued high leverage. If the company continues to successfully diversify its operations, generates improved operating results, and pursues a financial policy that S&P believes will result in sustained debt to EBITDA of 4.5x or below, it could raise the ratings. If the company is more aggressive than S&P expects on the acquisition front or encounters unexpected operating issues, resulting in debt to EBITDA increasing to above 7x, S&P might lower the ratings. ZACKY FARMS: Foster Farms Out of Creditors Committee ---------------------------------------------------- August B. Landis, Acting U.S. Trustee for Region 17, amended, for the second time, the Official Committee of Unsecured Creditors in the Chapter 11 case of Zacky Farms, LLC due to the Jan. 22, 2013 resignation from the unsecured creditors committee of Foster Farms, LLC & Foster Poultry Farms, a single appointee. The Committee now comprises of: 1. Western Milling, LLC Attn: Mark La Bounty P.O. Box 1029 Goshen, CA 93227 Tel: (559) 302-1685 E-mail: mlabounty@westernmilling.com 2. Associated Feed & Supply Attn: Scott Tyson P.O. Box 2367 Turlock, CA 95381 Tel: (209) 667-2708 E-mail: scottt@associatedfeed.com 3. Sealed Air Corporation (Cryovac) Attn: Michael Wallace P.O. Box 464 Duncan, SC 29334 Tel: (864) 433-2465 E-mail: michael.wallace@sealedair.com 4. Axis Media Management Inc. Attn: Tony Naish 30495 Canwood St, Suite 211 Agoura Hills, CA 91301 Tel: (818) 264-1555 E-mail: tony@axismedia.org 5. International Paper Company Attn: Vic Kawamura 1002 15th St SW, Suite 200 Auburn, WA 98001 Tel: (253) 288-4620 E-mail: vic.kawamura@ipaper.com About Zacky Farms Fresno, California-based Zacky Farms LLC, whose operations include the raising, processing and marketing of poultry products, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Cal. Case No. 12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly 1,000 employees and operates in multiple plants, farms and offices in California, including operations in Los Angeles, Fresno, Tulare, Kings, San Joaquin and San Bernardino Counties. The company blames high feed prices for losses in recent years. The Debtor disclosed $72,233,554 in assets and $67,345,041 in liabilities as of the Chapter 11 filing. The Company has plans to sell itself to pay creditors. Zacky Farms LLC received bankruptcy-court approval to sell its assets to the Robert D. and Lillian D. Zacky Trust. Kurtzman Carson Consultants LLC will provide administrative services and FTI Consulting, Inc., serves as the Debtor's Chief Restructuring Officer. Bankruptcy Judge Thomas Holman presides over the case. The petition was signed by Keith F. Cooper, the Debtor's sole manager. An official committee of unsecured creditors has been appointed in the case. Lowenstein Sandler represents the Committee. The Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan, Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron. The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky Trust U/D/T dated July 26, 1988, is represented by Thomas Walper, Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP. ZACKY FARMS: Amends Bid to Tap King & Spalding as Counsel --------------------------------------------------------- Zacky Farms, LLC amended its application to employ King & Spalding LLP as special counsel for complex transactions and related matters retroactive to Nov. 28, 2012, and to compensate King & Spalding pursuant to Sections 330 and 331 of the Bankruptcy Code. The Court, in its order dated Dec. 21, 2012, denied the Debtor's application to employ King & Spalding because the scope of the requested employment authority goes far beyond a "specified special purpose" for which K&S may be employed. Furthermore, the Court cannot determine whether paragraph 4 of the proposed order "[K&S] will be compensated in accordance with the terms set forth in the Application, and subject to the procedures set forth sections 330 and 331. . ." asks the court to abdicate its mandate to award "reasonable compensation for actual, necessary services" and "reimbursement of actual, necessary expenses." In the amended application, the Debtor stated that King & Spalding will, among other things: 1. advise the Debtor with respect to the due diligence process for potential purchasers of the Debtor's assets, including, without limitation, assisting the Debtor in its efforts to compile information and data related to such due diligence process; 2. advise the Debtor with respect to any special legal issues that may arise in connection with the sale process, including, without limitation, antitrust, environmental, intellectual property, real estate, labor and employee benefits issues; and 3. work with FFWP in preparing for and conducting an auction whereby substantially all of the assets of the Debtor will be sold to the highest or otherwise best bidder. Subject to Court approval, the Debtor has reached an agreement to pay King & Spalding a blended hourly rate of $500 per hour, increasing to $525 per hour for services rendered after Jan. 31, 2013, for each attorney, paraprofessional, project assistant or other hourly timekeeper devoting time to this matter under this engagement. Although the Debtor proposes to pay King & Spalding on a blended rate basis, for informational purposes, the current standard hourly rates of attorneys resident in King & Spalding's Atlanta office range from a low of $275 per hour for the firm's most junior associates to as much as $990 per hour for certain of the firm's most senior partners, and the standard hourly rates of paralegals and legal assistants resident in King & Spalding's Atlanta office range from $150 to $285. The King & Spalding professionals and paraprofessionals expected to be most active in the Debtor's chapter 11 case and their hourly rates include: Paul Ferdinands, partner $785 W. Austin Jowers, partner $600 Jeffrey Dutson, associate $465 Annie Carroll, associate $385 Missy Heinz, senior paralegal $285 Nick Dale, paralegal $160 As of the Petition Date, the Debtor did not owe King & Spalding any amounts. During the 90 days prior to the Petition Date, the Debtor did not make any payments to King & Spalding. To the best of the Debtor's knowledge, King & Spalding does not represent or hold any interest adverse to the Debtor or its estate with respect to the matters on which King & Spalding is proposed to be retained and employed by the Debtor. About Zacky Farms Fresno, California-based Zacky Farms LLC, whose operations include the raising, processing and marketing of poultry products, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Cal. Case No. 12-37961) on Oct. 8, 2012 in Sacramento. The company has roughly 1,000 employees and operates in multiple plants, farms and offices in California, including operations in Los Angeles, Fresno, Tulare, Kings, San Joaquin and San Bernardino Counties. The company blames high feed prices for losses in recent years. The Debtor disclosed $72,233,554 in assets and $67,345,041 in liabilities as of the Chapter 11 filing. The Company has plans to sell itself to pay creditors. Zacky Farms LLC received bankruptcy-court approval to sell its assets to the Robert D. and Lillian D. Zacky Trust. Kurtzman Carson Consultants LLC will provide administrative services and FTI Consulting, Inc., serves as the Debtor's Chief Restructuring Officer. Bankruptcy Judge Thomas Holman presides over the case. The petition was signed by Keith F. Cooper, the Debtor's sole manager. An official committee of unsecured creditors has been appointed in the case. Lowenstein Sandler represents the Committee. The Lowenstein team includes Kenneth A. Rosen, Bruce S. Nathan, Jeffrey D. Prol, Wojciech F. Jung and Keara Waldron. The Debtor's DIP lender, The Robert D. Zacky and Lillian D. Zacky Trust U/D/T dated July 26, 1988, is represented by Thomas Walper, Esq., at Munger Tolles & Olson LLP; and McKool Smith LLP. * Banks Bow to New York on Clawbacks ------------------------------------ Liz Moyer at The Wall Street Journal reported that three more top banks, including Citigroup Inc., will broaden their clawback policies to cover more executives, increase disclosures or add potential triggers. The moves increase to six the number of leading financial companies that have bowed to pressure from the New York City's Comptroller's Office, according to the WSJ report. WSJ further reported that Comptroller John C. Liu also appears to have broken new ground, with Capital One Financial Corp. agreeing to make public the total dollar amount of pay it claws back. Capital One will become the first bank to make public the amount of pay it claws back from executives, WSJ said. The agreements, which Mr. Liu's office plans to announce on Thursday, come after four months of negotiations, according to WSJ. As comptroller, Mr. Liu oversees New York City's pension funds, which are major shareholders of the banks. In addition to Capital One and Citigroup, Wells Fargo & Co. also agreed to broaden clawback policies to cover misconduct that causes financial or reputational harm, although the Citi and Wells changes are less expansive than Capital One's, WSJ related. According to WSJ, clawbacks have taken on added scrutiny nearly a year since J.P. Morgan took a $6.2 billion trading hit in what has become known as the "London whale" blunder. J.P. Morgan clawed back two years of total annual compensation, including restricted stock, and canceled options grants, from three London-based managers who had direct responsibility for the trading portfolio at the heart of the losses. * FASB Impairment Rule Could Hit U.S. Banks Reserves, Fitch Says ---------------------------------------------------------------- Approval of a Financial Accounting Standards Board (FASB) proposal on the treatment of credit losses for loans and other financial assets could eventually force U.S. banks to book expected losses early, putting pressure on reserve levels and reported earnings. Fitch Ratings sees the potential for use of the loss model under this new FASB proposal to drive U.S. institutions to report asset values more conservatively than international counterparts applying the proposed new IFRS credit loss standard. The FASB loan loss proposal, released in December and open for public comment until April 30, would change the way in which banks account for expected losses on loans and other debt securities and financial assets. Unlike the current loss reserve rules that allow institutions to wait until losses are incurred before boosting provisions, the new approach would require a more timely recognition of future losses as expected cash flows change. In contrast to the current system, in which multiple impairment models relying on an "incurred loss" approach are used, the new framework would lead to a single "expected credit loss" model, in which management would be required to incorporate more forward- looking information in reporting on credit losses. As well as using available current and historical data, they would also need to consider forecasts of future losses. On the balance sheet, U.S. banks would be required to reflect current loss expectations in the "allowance for credit losses" account. The income statement would capture deterioration or improvement in credit loss expectations through changes in the provision for bad debt expense. Fitch believes that the use of this model is likely to lead to quarterly adjustments in expected loss projections, possibly leading to more volatility in provision expense and reported earnings. However, banks could also conceivably take large one- time charges at first signs of distress in their loan portfolios, then look for opportunities to smooth earnings volatility over time through reserve releases or reverse provisions If the proposal is adopted, the rule would likely take some time to go into effect. Banks will require time to improve their accounting and reporting systems to collect the type of data that will be needed to estimate prospective losses. We believe the rule would not go into effect until 2015 or later. At that time, assuming a prospective approach to loan losses leads to increased bookings of provisions, most banks will likely report one-time hits to earnings. Like the FASB, the International Accounting Standards Board (IASB) is seeking public comment on proposed changes in credit loss treatment. The IASB exposure draft on the subject (open for comment until July) does not go as far as the FASB proposal in encouraging a move away from the levels of provisions booked under an "incurred loss" standard. This could set up a situation in which U.S. banks are ultimately required to report greater expected credit losses, leading to more conservatism in reporting and potentially larger loss provisions relative to their European, Canadian and other international competitors. This could derail the process of international accounting convergence on credit losses and lead to less clarity in comparing bank balance sheets and income statements around the world. Ultimately the method used by banks to estimate expected losses, as well as the time horizon over which these estimates are made, will be important in providing a reasonable picture of banks' financial positions. * U.S. Public Finance Default Rate Remains Low in 2012, Fitch Says ------------------------------------------------------------------ The weak U.S. economic recovery continued to pressure state and local government revenue and spending in 2012, resulting in a modest, but persistent, negative rating drift among U.S. public finance ratings, according to a new Fitch Ratings' report. Downgrades topped upgrades by nearly 2 to 1 -- echoing 2011's ratio. However, the volume of rating actions contracted year over year, with the vast majority of ratings -- 92.7% -- remaining the same, up from 88.3% in 2011. Fitch recorded a single U.S. public finance default in 2012. The resulting U.S. public finance default rate for the year remained low at 0.03% mirroring 2011 and historical trends. The average annual default rate held steady at 0.04% (1999-2012). Fitch's U.S. public finance rating distribution reflects a low propensity to default, with the vast majority of securities rated investment grade. At year-end 2012, the rating mix by broad category remained on par with year-earlier levels, with 'AAA', 13%; 'AA', 50%; 'A', 27%; 'BBB', 8%; and the remaining 2% at speculative grade('BB' or lower). Fitch's new study provides data and analysis on the performance of Fitch's U.S. public finance ratings in 2012 and over the long term, covering the period 1999-2012. The report provides summary statistics on the year's key rating trends. The report is titled 'Fitch Ratings U.S. Public Finance 2012 Transition and Default Study' and is available on Fitch's web site under Credit Market Research. * U.S. Chamber Institute for Legal Reform Commends FACT Hearing --------------------------------------------------------------- Lisa Rickard, President of the U.S. Chamber Institute for Legal Reform, made the following statement regarding [Wednes]day's House Judiciary Committee hearing on the Furthering Asbestos Claim Transparency (FACT) Act (H.R. 982). "For too long, asbestos bankruptcy trusts have operated without adequate oversight. Courts around the country have uncovered examples in which plaintiffs' lawyers have filed inconsistent or fraudulent claims with multiple trusts and in the court system. This abuse shortchanges legitimate asbestos claimants while hurting solvent companies, their shareholders and employees. "The bipartisan Furthering Asbestos Claim Transparency (FACT) Act addresses this problem by requiring the trusts to file quarterly reports on their claims to the federal bankruptcy courts. This commonsense legislation would help discourage fraud and abuse in the asbestos compensation system. "We commend Representatives Farenthold and Matheson for introducing the FACT Act, as well as Chairman Goodlatte and the House Judiciary Committee for holding [Wednes]day's hearing. We urge swift House and Senate passage of this important legislation." * U.S. Foreclosure Filings Up 2% in February, RealtyTrac Says ------------------------------------------------------------- RealtyTrac(R) on March 14 released its U.S. Foreclosure Market Report(TM) for February 2013, which shows foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 154,281 U.S. properties in February, an increase of 2 percent from the previous month but still down 25 percent from February 2012. The report also shows one in every 849 U.S. housing units with a foreclosure filing during the month. "At a high level the U.S. foreclosure inferno has been effectively contained and should be reduced to a slow burn in the next two years," said Daren Blomquist, vice president at RealtyTrac. "But dangerous foreclosure flare-ups are still popping up in states where foreclosures have been delayed by a lengthy court process or by new legislation making it more difficult to foreclose outside of the court system. Foreclosure starts have been steadily building in those states over the last several months and likely will end up as bank repossessions or short sales later this year. "These new foreclosure hot spots include states like Washington, where seven straight months of rising foreclosure activity pushed the state's foreclosure rate to fifth highest nationwide -- the highest it's ever been in our report -- and Maryland, where eight straight months of rising foreclosure activity placed the state's foreclosure rate among the top 10 nationwide for the first time since July 2010," Mr. Blomquist noted. High-level findings from the report: -- U.S. foreclosure starts increased 10 percent from the previous month after three consecutive monthly decreases, but were still down 25 percent from February 2012. -- Foreclosure starts increased from the previous month in 32 states and were up from a year ago in 16 states, including Nevada (up 334 percent), Maryland (up 319 percent), Washington (up 172 percent), New York (up 139 percent), and New Jersey (up 70 percent). -- U.S. bank repossessions (REO) decreased 11 percent from the previous month and were down 29 percent from February 2012 to the lowest level since September 2007 -- a 65-month low. -- Bank repossessions decreased from the previous month in 32 states and were down from a year ago in 41 states, including Oregon (down 78 percent), Massachusetts (down 69 percent), Nevada (down 59 percent), Georgia (down 58 percent), and California (down 49 percent). -- Florida posted the nation's highest state foreclosure rate for the sixth consecutive month in February, reporting one in every 282 housing units with a foreclosure filing during the month. -- Florida cities accounted for seven of the nation's 10 highest metro foreclosure rates in February, led by the Miami, Orlando, Ocala, Tampa and Palm Bay metro areas in the top five spots. Florida's foreclosure rate ranked highest among the states for the sixth month in a row in February. One in every 282 Florida housing units had a foreclosure filing during the month -- more than three times the national average. A total of 31,726 Florida properties had a foreclosure filing during the month, up 6 percent from the previous month and up 20 percent from February 2012 to a 16-month high. Nevada foreclosure starts in February increased 334 percent from a year ago to a 17-month high, keeping the state's foreclosure rate as the second highest nationwide for the fifth month in a row. One in every 320 Nevada housing units had a foreclosure filing in February, more than twice the national average. Despite the third straight month-over-month decrease in foreclosure activity in February, Illinois posted the nation's third highest state foreclosure rate for the second month in a row: one in every 417 housing units with a foreclosure filing. A total of 12,671 Illinois properties had a foreclosure filing in February, down 10 percent from the previous month and down 5 percent from February 2012. Ohio foreclosure activity increased 26 percent from the previous month and was up 12 percent from a year ago, boosting the state's foreclosure rate to the fourth highest among the states. Ohio foreclosure activity has increased on an annual basis in 11 out of the past 13 months. Washington foreclosure activity increased on an annual basis for the seventh consecutive month in February, helping to push the state's foreclosure rate to fifth highest nationwide. February's No. 5 ranking was the highest foreclosure rate ranking for Washington since RealtyTrac began issuing its report in January 2005. A total of 4,362 Washington properties had a foreclosure filing during the month, an increase of 123 percent from February 2012 and one in every 656 housing units. Maryland foreclosure activity increased on an annual basis for the eighth consecutive month in February, driven largely by a 319 percent jump in foreclosure starts, lifting the state's foreclosure rate to the ninth highest nationwide. February was the first month since July 2010 that Maryland's foreclosure rate ranked among the top 10 nationwide. Foreclosure activity was flat or decreased from a year ago in the other four states with foreclosure rates among the top 10: Arizona at No. 6 (one in 704 housing units with a foreclosure filing); Georgia at No. 7 (one in 705 housing units); Utah at No. 8 (one in 713 housing units); and Michigan at No. 10 (one in 724 housing units). Although California foreclosure starts rebounded 47 percent in February from an 88-month low in January, overall foreclosure activity in the state was down from a year ago for the 15th straight month, dropping the foreclosure rate down to No. 13 nationwide. February was the first month since December 2006 where the California foreclosure rate was not ranked among the top 10 state foreclosure rates nationwide. Reporting one in every 219 housing units with a foreclosure filing in February, the Miami metro area posted the nation's highest foreclosure rate among metropolitan statistical areas with a population of 200,000 or more. Six other Florida metro areas documented foreclosure rates in the top 10: Orlando at No. 2 (one in 225 housing units with a foreclosure filing); Ocala at No. 3 (one in 243 housing units); Tampa at No. 4 (one in 253 housing units); Palm Bay at No. 5 (one in 260 housing units); Jacksonville at No. 8 (one in 302 housing units); and Naples at No. 9 (one in 318 housing units). Foreclosure activity increased from a year ago in all seven Florida cities with top 10 metro foreclosure rates. Other cities with foreclosure rates in the top 10 were Las Vegas at No. 6 (one in 283 housing units); Rockford, Ill., at No. 7 (one in 291 housing units); and Chicago at No. 10 (one in 331 housing units). Five cities posted annual increases in foreclosure activity among the nation's 20 largest metropolitan areas in terms of population: Baltimore (up 145 percent), Seattle (up 129 percent), New York (up 44 percent), Tampa (up 24 percent), and Miami (up 20 percent). About RealtyTrac Inc. RealtyTrac -- http://www.realtytrac.com-- is a supplier of U.S. real estate data, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 100 million homes nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 20 categories of key housing-related facts provided by RealtyTrac's wholly-owned subsidiary, Homefacts(R). RealtyTrac's foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate. * Total Leverage Finance, High Yield Issuance Hit Record Levels --------------------------------------------------------------- Total leverage finance and high yield issuance have hit record levels, but overall outstandings have hardly budged as the principal drivers of supply have been repricings and recapitalizations, according to the latest report of Morgan Joseph TriArtisan LLC's newly renamed Recapitalization & Restructuring Group (changed to reflect an expanding focus on debt placements). James D. Decker, a Managing Director who heads the Group, points out that demand is being spurred by new CLOs, legacy CLOs and retail inflows. However, he notes that in the absence of meaningful M&A activity the market is being characterized by increasing leverage, decreasing pricing and looser structure. At the same time, the Report suggests that "overheating of the high yield market could indeed lead to a bubble bursting." This, it contends, "would not be dissimilar to the 2007 loan market that eventually choked on the volume of mega-LBOs." The report states that while 2012 high yield issuance at $350 billion was nearly triple the trailing 12-year average, actual yields were approximately half the 25 year average. And while noting that spreads at 591 bps closely approximate historical averages, it observes that "it is debatable if high yield bonds have ever been at more risk to rising rates." In the circumstances, MJTA suggests as a possibility a rebalancing of leveraged debt from bonds to loans that could possibly fuel a further loan market rally. Whether the result of an increasing rate environment or higher defaults, "loans become more favorable investments given their floating rates, greater seniority and covenant protections." The result could be a loan-from-bond refinancing, which should drive even lower yields and looser structures for leveraged loan borrowers, the Report states. In other areas, the MJTA Recapitalization and Restructuring Report observes: -- Sun-setting CLOs are expected to increase from under $20 billion in 2012 to approximately $60 billion in 2013, despite consensus forecasts of between $60 and $80 billion (up from $55 billion last year). On a net basis, 2013 should actually be a weaker year for CLO investment into leveraged loans, with spreads nonetheless being pushed to new lows reflecting demand for yield by retail and alternative investors. -- Competition for Asset Based Loans remains fierce, with fourth quarter average spreads pushed to new post financial crisis lows, breaching the 200 bps mark for only the second time and hitting that mark for the first time since the various European crises. Lenders continue to show willingness to "stretch" against more non-traditional collateral or even air balls, so long as the non- collateral supported pieces is both a small percentage of the overall facility and can be amortized quickly. -- For middle market borrowers with a minimum EBITDA in the $15 to $20 million range and strong operating trends, cash flow senior lending has become generally available at leverage levels as high as 3 to 4 times. Borrowers with sub-$15 million EBITDA are seeing new lenders enter the market, though the market is neither consistent nor efficient. Pricing can vary widely and terms often depend on the type of lender and their funding as the credit itself. About Morgan Joseph TriArtisan LLC Morgan Joseph TriArtisan LLC -- http://www.mjta.com-- is an investment bank engaged in providing financial advice, capital raising and private equity investing. The firm's services include mergers, acquisitions and restructuring advice, in addition to private placements and public offerings of equity and debt. * Deloitte Names Sheila Smith Restructuring Services Leader ----------------------------------------------------------- Sheila T. Smith, principal, Deloitte Financial Advisory Services LLP (Deloitte FAS) has been named restructuring services leader for the Americas region. Ms. Smith is currently the co-leader of Deloitte FAS' Corporate Restructuring Group in the U.S., a role she will continue in addition to her expanded responsibilities. "Our clients realize that huge cross-border opportunities exist in South America, but those opportunities can also present distinct and unexpected challenges. We help our clients navigate those challenges to first avoid and then correct the critical issues they face. Our global depth and breadth of technical and industry experience allow us to bring the right resource to bear on a troubled company situation, tailored to the specific marketplace nuances, legal and regulatory frameworks where the company resides," said Ms. Smith. "Sheila is a seasoned, restructuring and bankruptcy professional with more than 20 years of experience serving a host of clients ranging from manufacturing and retail to distribution and technology," said John Trinta, managing director, Deloitte Americas LLC. "She has been a driving force in the restructuring practice in the Americas region, and I have no doubt that she will build on our existing foundation to help us leap ahead in the marketplace." Ms. Smith was the first-ever New York Institute of Credit (NYIC) Executive Woman of the Year recipient in 2008, as well as the first Deloitte professional ever inducted into the American College of Bankruptcy. She has also received numerous industry recognitions including the 2012 Turnaround Management Association's Chairman's Award, a place on the 2010 Turnarounds & Workouts-Top Restructuring People to Watch and the 2005 recipient of the Outstanding Individual Contribution Award. A resident of Boston, Ms. Smith earned a bachelor's and a master's degree from the State University of New York at Buffalo, as well as an MBA from Boston University. About Global Financial Advisory Services Deloitte member firms provide the broadest range of advisory services around M&A transactions, restructurings, raising capital, and forensic investigations. Its member firms also offer a number of specialist multi-situational capabilities including business modelling, PPP, and infrastructure advisory and valuations. Its network comprises more than 9,000 financial advisory professionals focused on providing high quality financial advice and execution; delivering integrated solutions to clients ranging from multinational corporates and sovereign wealth funds to private equity, owner-managed businesses, creditors, shareholders, and government institutions. * WT Lee & Associates Says Foreclosure Settlement Insufficient -------------------------------------------------------------- A recent foreclosure settlement between banks and homeowners resulted in $9.3 billion going to the homeowners -- but according to the lawyers at WT Lee & Associates, this arrangement may be more advantageous to the banks than to the homeowners themselves. To illustrate their point, the firm points to a recent Bloomberg Businessweek report, which makes similar observations. According to the report, the results of the settlement may ultimately be insufficient to truly aid homeowners. WT Lee & Associates has issued a new statement to the press, commenting on the article and on the settlement itself. The case itself began in 2011, when the Office of the Comptroller of the Currency signed consent decrees with some of the nation's largest banks, ordering them to review their foreclosures and to compensate homeowners for any mistakes that were uncovered. According to Businessweek, however, the case ultimately glossed over many of these crucial errors and foreclosure flaws. Though the OCC claimed that the process revealed relatively few errors on the part of the banks, independent reporting from The Wall Street Journal revealed that, at some banks, error rates topped 20 percent. Businessweek continues by reporting that, just last week, the OCC releases the full details of the settlement -- and that some of the details suggest that the settlement has been "watered down" to protect the banks and to harm homeowners. This finding has won a comment from WT Lee & Associates. "As could be expected, the new $9.3 billion settlement benefits the banks more than the homeowners," says the new press statement from WT Lee & Associates. "The banks being allowed to count $10,000 of assistance to the homeowner as $100,000 towards the settlement is an outrage." Despite the disappointing results of the settlement, the firm continues by noting that there is still hope for homeowners seeking assistance or compensation. "Despite the banks attempting to bypass the agreements they have made to provide homeowners help, WT Lee & Associates will continue to fight to get our clients the modifications they deserve," the firm concludes. The legal team at WT Lee & Associates offers services to clients around the country, including representation in bankruptcy cases and in foreclosure litigation. However, the firm's true mission is to help homeowners and their families avert foreclosure. As such, WT Lee & Associates emphasizes its consultation and representation services in home loan modification. WT Lee & Associates is a law firm that strives to help homeowners remain in their homes, even during periods of financial crisis. The firm offers a number of foreclosure prevention services, including guidance through the loan modification process. Additionally, WT Lee & Associates provides services in real estate litigation, in bankruptcy law, and in upholding the rights extended through the Fair Credit Reporting Act and the Fair Debt Collection Practices Act. * BOOK REVIEW: The Oil Business in Latin America: The Early Years ----------------------------------------------------------------- Author: John D. Wirth, Ed. Publisher: Beard Books Paperback: 322 pp. (Reprint) List price: US$34.95 Buy a copy for yourself and one for a colleague on-line at http://www.beardbooks.com/beardbooks/oil_business_in_latin_america.html Review by Gail Owens Hoelscher This book grew out of a 1981 meeting of the American Historical Society. It highlights the origin and evolution of the state- owned petroleum companies in Argentina, Mexico, Brazil, and Venezuela. Argentina was the first country ever to nationalize its petroleum industry, and soon it was the norm worldwide, with the notable exception of the United States. John Wirth calls this phenomenon "perhaps in our century the oldest and most celebrated of confrontations between powerful private entities and the state." The book consists of five case studies and a conclusion, as follows: * Jersey Standard and the Politics of Latin American Oil Production, 1911-30 (Jonathan C. Brown) * YPF: The Formative Years of Latin America's Pioneer State Oil Company, 1922-39 (Carl E. Solberg) * Setting the Brazilian Agenda, 1936-39 (John Wirth) * Pemex: The Trajectory of National Oil Policy (Esperanza Duran) * The Politics of Energy in Venezuela (Edwin Lieuwen) * The State Companies: A Public Policy Perspective (Alfred H. Saulniers) The authors assess the conditions at the time they were writing, and relate them back to the critical formative years for each of the companies under review. They also examine the four interconnecting roles of a state-run oil industry and distinguish them from those of a private company. First, is the entrepreneurial role of control, management, and exploitation of a nation's oil resources. Second, is production for the private industrial sector at attractive prices. Third, is the integration of plans for military, financial, and development programs into the overall industrial policy planning process. Finally, in some countries is the promotion of social development by subsidizing energy for consumers and by promoting the government's ideas of social and labor policy and labor relations. The author's approach is "conceptual and policy oriented rather than narrative," but they provide a fascinating look at the politics and development of the region. Mr. Brown provides a concise history of the early years of the Standard Oil group and the effects of its 1911 dissolution on its Latin American operations, as well as power struggles with competitors and governments that eventually nationalized most of its activities. Mr. Solberg covers the many years of internal conflict over oil policy in Argentina and YPF's lack of monopoly control over all sectors of the oil industry. Mr. Wirth describes the politics and individuals behind the privatization of Brazil's oil industry leading to the creation of Petrobras in 1953. Mr. Duran notes the wrangling between provinces and central government in the evolution of Pemex, and in other Latin American countries. Mr. Lieuwin discusses the mixed blessing that oil has proven for Venezuela., creating a lopsided economy dependent on the ups and downs of international markets. Mr. Saunders concludes that many of the then-current problems of the state oil companies were rooted in their early and checkered histories." Indeed, he says, "the problems of the past have endured not because the public petroleum companies behaved like the public enterprises they are; they have endured because governments, as public owners, have abdicated their responsibilities to the companies." Jonh D. Wirth is Gildred Professor of Latin American Studies at Standford University. ********* 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 ***