/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130401.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, April 1, 2013, Vol. 17, No. 89 Headlines 22ND CENTURY: Amends 6.2 Million Common Shares Prospectus 243RD STREET BRONX: Liable for Payment of Interest, Fees to Lender 5 STAR WASHER: Case Summary & 20 Largest Unsecured Creditors AFFIRMATIVE INSURANCE: Borrows $4.8MM to Provide Liquidity AGRIPROCESSORS INC: Fails in Bid to Recoup Funds From Church Group AGRIPROCESSORS INC: Ch.7 Trustee Can Name Etana Jaffe as Defendant AGRIPROCESSORS INC: Chabad of Alpharetta's Judgment Bid Denied ALLIED NEVADA: CEO's Resignation No Impact on 'B3' Ratings AMARU INC: Employs Wei Wei & Co as New Accountants AMBAC FINANCIAL: Reminds Investors on Common Stock Cancellation AMERICAN AIRLINES: Investors Profit From Rise in Shares AMERICAN AIRLINES: Closes Private Offering of $663MM EETCs AMERICAN STORES: Moody's Withdraws 'Caa1' Senior Debt Rating AMF BOWLING: Aims for June 6 Confirmation of Plan AMPAL-AMERICAN ISRAEL: Rescinds Delisting Notice of Securities AMTRUST FINANCIAL: Beats FDIC on Entitlement to Tax Refund ARCHDIOCESE OF MILWAUKEE: Judge Cuts Off Lawyer Compensation ARCHDIOCESE OF MILWAUKEE: DOT Seeks Stay Relief to Recoup Property ARCHDIOCESE OF MILWAUKEE: Says OneBeacon Payment Not Estate Asset ARCHDIOCESE OF MILWAUKEE: Judge Disallows Victim's Claim No. 77 ARCHDIOCESE OF MILWAUKEE: Claimant Appeals Disallowance Order BELLMONT ROCK: Case Summary & 4 Unsecured Creditors BIG APPLE VOLKSWAGEN: Two Trials Can Be More Efficient Than One BON-TON STORES: Appoints New Member to its Board of Directors CDPHP UNIVERSAL: A.M. Best Lowers Issuer Credit Rating From 'bb' CELLULAR BIOMEDICINE: Names Radiology Professor to Board CENVEO CORP: Moody's Assigns 'Ba3' Rating to New US$360MM Loan CHARTIS EXCESS: Chapter 15 Case Summary D AND R ROOFING: Case Summary & 20 Largest Unsecured Creditors D MEDICAL: Voluntarily Deregisters Ordinary Shares with SEC DAYSTAR TECHNOLOGIES: Gets Nasdaq Listing Non-Compliance Notice DDR CORP: Fitch Assigns 'BB-' Rating to Class K Preferred Stock DIALOGIC INC: Incurs $4.66 Million Net Loss in Fourth Quarter DIOCESE OF WILMINGTON: Claim, Also Filed Against CBI, Disallowed DVORKIN HOLDINGS: Status Hearing on Plan Continued Until Aug. 6 DYNEGY INC: Said to Seek $1.8 Billion Covenant-Light Financing EASTMAN KODAK: Seeks Approval of New ORIC Policy Terms EDISON MISSION: Wants to Extend Lease Decision Period to July 15 EDISON MISSION: Asks Court to Set June 1 as Claims Bar Date EDUCATION MANAGEMENT: Moody's Raises CFR One Notch to 'Caa1' ELCOM HOTEL: Creditors Have Until May 7 to File Proofs of Claim EMPIRE RESORTS: Incurs $2.3 Million Net Loss in 2012 EXECUTIVE CENTER: Court Dismisses Chapter 11 Case FISKER AUTO: Said to Hire Kirkland, Explore Bankruptcy Options FREESEAS INC: Issues Add'l 390,000 Settlement Shares to Hanover FREDERICK'S OF HOLLYWOOD: Closes $10-Mil. Pref. Stock Offering FREDERICK'S OF HOLLYWOOD: Incurs $9.8 Million Net Loss in Q2 FRONTIER COMMS: Moody's Rates New US$750MM Sr. Notes Issue 'Ba2' GLOBAL FOOD: Incurs $3.1 Million Net Loss in 2012 GUITAR CENTER: Names Mike Pratt New Chief Executive Officer HARVEST SHARING: American Produce's Collection Suit Goes to Trial HEALTHEAST CARE: Moody's Affirms Ba1 Rating on $202MM Bonds HERCULES OFFSHORE: Fleet Status Report as of March 21 HRK HOLDINGS: Court Extends Plan Filing Period Until April 23 IDEARC INC: Trustee Says Verizon Should Be Liable for $2.85-Bil. INFUSION BRANDS: S. Stastney Replaces R. DeCecco as Chairman INOVA TECHNOLOGY: Amends Jan. 31 Quarterly Report JBS USA: Moody's Lifts Senior Secured Term Loan Rating to 'Ba2' JC PENNEY: Incurs $985 Million Net Loss in 2012 JEDD LLC: Liquidating Plan Outline Has Minor Amendments LEE BRICK & TILE: Plan Solicitation Exclusivity Expires May 14 LEHMAN BROTHERS: Barclays Files Brief vs. $1.5-Bil. Ruling LEHMAN BROTHERS: Third Distribution Totals $14.2 Billion LEHMAN BROTHERS: Enters Into Settlement Agreement with LBF LIBERTY UNION: A.M. Best Affirms 'B' Financial Strength Rating LIFECARE HOLDINGS: Enters Into Interim Management Deal with Vibra LONGVIEW POWER: Bank Debt Trades at 27% Off in Secondary Market LODGENET INTERACTIVE: Gets 2 Weeks Extension to Consummate Plan LYON WORKSPACE: Committee Balks at Motion to Incur DIP Financing LYON WORKSPACE: Files Schedules of Assets and Liabilities MERIDIAN SUNRISE: Proofs of Claims Due April 5, 2013 MERISEL INC: Saints Capital Hikes Stake to 95.5% at Feb. 4 MF GLOBAL: New York Attorney Opposes Confirmation of Plan MID KANSAS HOMES: Case Summary & 20 Largest Unsecured Creditors MOBIVITY HOLDINGS: Incurs $7.3 Million Net Loss in 2012 MPG OFFICE: Adopts Amended Retention Bonus Plan MTR GAMING: Moody's Changes Outlook to Stable & Keeps CFR at Caa1 MTS LAND: Proposing Full-Payment Chapter 11 Plan MW GROUP: Hearing on Disclosure Statements Continued to May 22 NAMCO LLC: Case Summary & 20 Largest Unsecured Creditors NAVISTAR INT'L: Fitch Rates New $300MM Sr. Unsecured Notes 'CCC' NAVISTAR INT'L: Moody's Rates $300MM Senior Notes 'B3' NEENAH FOUNDRY: Moody's Assigns 'B3' Rating to New $150MM Loan NEW ALBERTSON'S: Moody's Withdraws 'Caa1' Senior Debt Rating NORTHWEST PARTNERS: Tells Fannie Mae That Plan is Confirmable NOVADEL PHARMA: In Active Negotiations with Creditors to Cut Debt OMTRON USA: Stalking Horse, Bid Protections Okayed OTELCO INC: Case Summary & 30 Largest Unsecured Creditors PATRIOT COAL: Bondholders Want Trustee to Take Over PATRIOT ELECTRIC: Case Summary & 20 Largest Unsecured Creditors PINNACLE FOODS: Moody's Reviews Ratings for Upgrade After IPO PT BERLIAN LAJU TANKER: Parent Now in Chapter 15 PT BERLIAN: Chapter 15 Case Summary PULMONARY DISEASE: Case Summary & 20 Largest Unsecured Creditors PVL-HOLDINGS: Voluntary Chapter 11 Case Summary R&K FABRICATING: Court Trims Tokio Marine Claims Against Goza RAINBOW LAND: Plan Confirmation Hearing Rescheduled to June 12 READER'S DIGEST: General Claims Bar Date Set for May 6 READER'S DIGEST: Can Pay Prepetition Wages and Salaries READER'S DIGEST: Can Continue Paying Insurance Obligations RESIDENTIAL CAPITAL: Says FRB Review a Bankruptcy "Claim" RESIDENTIAL CAPITAL: Court Okays Claim Objection Procedures RESIDENTIAL CAPITAL: FTI Rollover Period Extended to Dec. 31 RESIDENTIAL CAPITAL: April 11 Hearing on Hudson, PwC & Pepper RESIDENTIAL CAPITAL: 2 RMBS Suits Remanded to State Court REVEL AC: Has Approval for Interim Loan With $20MM Fresh Cash REVOLUTION DAIRY: Panel Balks at Cash Use, Critical Vendors' Claim REVSTONE INDUSTRIES: Files Schedules of Assets and Liabilities RHYTHM & HUES: Court Approves Sale to Rival Prana Studios RIVER-BLUFF ENTERPRISES: Court Dismisses Ch. 11 Case ROVI CORP: Loan Repricing No Impact on Moody's 'Ba3' CFR SAND SPRING: Asks Court to Extend Plan Filing Until April 25 SCOTLAND-COLORADO: Bloomfield Awarded $115,460 in Fees SEAGIRT EQUITIES: Case Summary & 10 Unsecured Creditors SELECT TREE: Creditors Have Until April 15 to File Proofs of Claim SINCLAIR BROADCAST: Offering $600MM Sr. Notes at 100% Par Value SMART TECHNOLOGIES: Moody's Withdraws 'Caa1' Corp. Family Rating SMART ONLINE: Chief Financial Officer Resigns SMITH AUDIO: Court Declines IRS's Bid to Vacate Plan Order SOMERSET PROPERTIES: Gets 26th Interim Access to Cash Collateral SOUTHERN FOREST: Case Dismissed Due to Failure to File Plan, MORs SRA INTERNATIONAL: Moody's Changes Outlook on B2 CFR to Negative STANWICH FIN'L: Wagoner Rule Doesn't Bar Trustee's Suits STOCKTON, CA: To Have Decision by April 1 on Right to Bankruptcy T3 MOTION: Receives Extension for Listing on NYSE MKT TENET HEALTHCARE: Improving Finances Cue Moody's to Up CFR to B1 TNP STRATEGIC: In Forbearance Talk with KeyBank National TW TELECOM: Moody's Affirms 'Ba3 Corp. Family Rating TXU CORP: 2014 Loan Trades at 27% Off in Secondary Market UNIVERSAL HEALTH: Sale May Collapse; Trustee Sought UTSTARCOM HOLDINGS: Effects One-for-Three Reverse Stock Split VANGUARD NATURAL: Moody's Upgrades CFR to 'B1'; Outlook Stable VERMILLION INC: Bruce Huebner Appointed as New Board Chairman W.R. GRACE: Seeks Approval of 2013 Long-Term Incentive Plan W.R. GRACE: Asks Court to Approve Settlement With Markel W.R. GRACE: Wins OK to Provide $50MM for Retirement Plans WENDY'S INTERNATIONAL: Moody's Rates $300MM Senior Term Loan 'B1' WILCOX EMBARCEDERO: New Deal on Cash Use Required After Today Z TRIM HOLDINGS: Edward Smith Holds 77.5% Stake as of March 18 ZOGENIX INC: Board Approves $545,500 Cash Bonus for Executives * North American Chemical Bonds Offer Weak Protections * Moody's Notes Rising Biofuel Compliance Costs for U.S. Refiners * Moody's Issues New Report on Systemic Support for Bank Holdings * January, February Record Six Defaults for $2.8 Billion * Social Security Has No Bearing on Good Faith of Plan * AlixPartners' John Dischner Named to T&W's People to Watch List * Cadwalader Bags 2 IFLR Americas Financial Restructuring Awards * Hughes Watters Askanase Attorneys Named Texas Rising Stars * BOND PRICING -- For Week From March 25 - 29 ********* 22ND CENTURY: Amends 6.2 Million Common Shares Prospectus --------------------------------------------------------- 22nd Century Group, Inc., filed with the U.S. Securities and Exchange Commission amendment no.1 to the Form S-1 registration statement relating to the resale at various times by selling stockholders of up to 6,250,000 shares of common stock, par value $0.00001 per share, issuable (i) upon conversion of the Company's Series A-1 Preferred Stock and (ii) upon the exercise of Series B Warrants. These shares were privately issued to the selling stockholders in connection with a private placement transaction. The Company will not receive any proceeds from the sale of common stock by the selling stockholders, but the Company will receive funds from the exercise of the Series B Warrants, if exercised. The Company will pay the expenses incurred to register the shares for resale, but the selling stockholders will pay any underwriting discounts, commissions or agent's commissions related to the sale of their shares of common stock. The Company's common stock is traded on the OTC Bulletin Board under the symbol "XXII.OB". On March 15, 2013, the closing sale price of the Company's common stock was $0.99 per share. A copy of the amended prospectus is available for free at: http://is.gd/cXORVt About 22nd Century Clarence, New York-based 22nd Century Group, Inc., through its wholly-owned subsidiary, 22nd Century Ltd, is a plant biotechnology company using technology that allows for the level of nicotine and other nicotinic alkaloids (e.g., nornicotine, anatabine and anabasine) in tobacco plants to be decreased or increased through genetic engineering and plant breeding. Freed Maxick CPAs, PC, in Buffalo, New York, expressed substantial doubt about 22nd Century Group's ability to continue as a going concern following the results for the year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses from operations and, as of Dec. 31, 2011, has negative working capital of $1.9 million and a shareholders' deficit of $1.2 million. "Additional financing will be required during 2012 in order to satisfy existing current obligations and finance working capital needs, as well as additional losses from operations that are expected in 2012." The Company incurred a net loss of $1.34 million in 2011, following a net loss of $1.42 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.63 million in total assets, $4.99 million in total liabilities and a $2.35 million total shareholders' deficit. 243RD STREET BRONX: Liable for Payment of Interest, Fees to Lender ------------------------------------------------------------------ The confirmation hearing on 243rd Street Bronx R&R LLC'S Second Amended Plan of Reorganization was held Nov. 15, 2012. The Plan proposes to reinstate the mortgage debt held by the secured creditor, 243rd Street Lender LLC, so as to render the creditor unimpaired. Other parties are treated as follows: New York City lien charges and other priority claims are to be paid in full; lien claims held by three suppliers and unsecured claims are to be paid in full over four years, without interest; and the equity interest is to be retained. The Plan is to be funded by an equity contribution made by the old equity together with a substantial increase in the rent paid by the Debtor's principal tenant. Other than the Secured Creditor, all creditors who voted accepted the Plan; the Secured Creditor rejected it. The Secured Creditor initially raised numerous objections to confirmation. At the conclusion of the Confirmation Hearing, the Secured Creditor's objections had been substantially narrowed, and the Secured Creditor's counsel stated that "the secured creditor has no problems with reinstatement." The remaining issues raised by the Secured Creditor consisted of the Debtor's obligation to pay default interest and late fees, the amount of the lender's attorney's fees, and certain other expenses and charges. The remaining matters raised by the Debtor appeared to be limited to these issues as well. Nevertheless, after settlement negotiations subsequent to the confirmation hearing had broken down, the Court received a pleading styled an "Objection to the Mortgagee's Proofs of Claim" in which the Debtor sought to expunge the Secured Creditor's claim altogether or reduce it substantially on the ground that the creditor had acted in bad faith and unlawfully interfered with the Debtor's workout and/or settlement negotiations with a prior holder of the mortgage. After the Court raised a question as to the timeliness of this objection, the Debtor proposed to withdraw it but to retain the right to sue the Secured Creditor for damages in State court subsequent to confirmation of the Plan. The Secured Creditor has objected. In a March 21 ruling, Bankruptcy Judge Allan L. Gropper said the Debtor is responsible for payment of: 1. Interest at the non-default rate to the Effective Date of the Plan. 2. Prepetition Default interest of $291,488. 3. Attorney's fees in an amount to be determined. 4. Advances, taxes and similar charges, net of any taxes already paid. At the time of the Confirmation Hearing, the Plan lenders had escrowed $1,925,000 in support of confirmation. In addition, the State court receiver was holding $594,597, some of which has been used for the payment of taxes. According to Judge Gropper, it is unclear whether the total amount in escrow is sufficient to make all necessary payments to the Secured Creditor, as well as to fund the priority claims, the down-payment on the supplier and general unsecured claims and the professional and administrative charges of the case. To confirm the Plan, Judge Gropper directed the Debtor's counsel, on or before April 10, to settle on the Secured Creditor's counsel a form of confirmation order which, among other things, specifies that payments to be made under the Plan and the source of payment. Any party in interest may respond no later than April 19. In the meantime, on or before April 1, the Secured Creditor's counsel should file a detailed statement for all legal fees sought, showing hours billed and billing rates. The Debtor may respond in connection with its form of confirmation order. A copy of the Court's March 21, 2013 Decision is available at http://is.gd/7X3rdefrom Leagle.com. 243rd Street Bronx R&R LLC filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-13321). It operates a multifamily residential building in the Bronx. 5 STAR WASHER: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: 5 Star Washer Technical Services Inc. fdba Successor-in-Interest to 5 Star Washer Service Inc. 3748 Oak Orchard Road Albion, NY 14411-9529 Bankruptcy Case No.: 13-10738 Chapter 11 Petition Date: March 22, 2013 Court: U.S. Bankruptcy Court Western District of New York (Buffalo) Judge: Michael J. Kaplan Debtor's Counsel: Daniel F. Brown, Esq. ANDREOZZI, BLUESTEIN, FICKESS, MUHLBAUER WEBER, BROWN, LLP 333 International Drive, Suite B-4 Williamsville, NY 14221 Tel: (716) 633-3200 Fax: (716) 633-0301 E-mail: dfb@abfmwb.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 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/nywb13-10738.pdf The petition was signed by Becki L. Spears, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Stacy F. Spears and Becki L. Spears 13-10636 03/13/13 AFFIRMATIVE INSURANCE: Borrows $4.8MM to Provide Liquidity ---------------------------------------------------------- Affirmative Insurance Holdings, Inc., through one of its indirect, wholly-owned subsidiaries, entered into a $4.8 million loan secured by commercial real estate to provide liquidity to one of the Company's insurance company subsidiaries, Affirmative Insurance Company. The loan is evidenced by a promissory note secured by a mortgage, security agreement and assignment of leases and rents on real estate located in Baton Rouge, Louisiana. The Property is owned by the Company for investment purposes and includes a building of approximately 177,469 square feet, which is under a lease agreement with a federal agency. The promissory note bears interest at a per annum fixed rate of 4.95%. The promissory note requires monthly payments of principal and interest with the final payment due on the maturity date of Dec. 15, 2015. As security for payments, the Company has assigned rents due under the federal agency lease to a trustee. Pursuant to an escrow and servicing agreement, the trustee will receive rent due under the lease, make required payments due under the promissory note and maintain certain escrow accounts to pay for the necessary expenses of the Property until the promissory note is paid in full. About Affirmative Insurance Addison, Tex.-based Affirmative Insurance Holdings, Inc., is a distributor and producer of non-standard personal automobile insurance policies for individual consumers in targeted geographic markets. Non-standard personal automobile insurance policies provide coverage to drivers who find it difficult to obtain insurance from standard automobile insurance companies due to their lack of prior insurance, age, driving record, limited financial resources or other factors. Non-standard personal automobile insurance policies generally require higher premiums than standard automobile insurance policies for comparable coverage. The Company's balance sheet at Sept. 30, 2012, showed $349.9 million in total assets, $474.9 million in total liabilities, and a stockholders' deficit of $125 million. For the nine months ended Sept. 30, 2012, the Company had a net loss of $43.6 million on $154.4 million of total revenues, compared with a net loss of $17.4 million on $197.1 million of revenues for the same period of 2012. AGRIPROCESSORS INC: Fails in Bid to Recoup Funds From Church Group ------------------------------------------------------------------ Joseph E. Sarachek -- the Chapter 7 Trustee for Agriprocessors, Inc., one of the nation's largest kosher meatpacking and food- processing facilities before a 2008 immigration scandal and eventual bankruptcy that same year -- was barred from collecting funds the company, through its ex-president Sholom Rubashkin, allegedly transferred to Garnavillo Gospel Hall Association. The Chapter 7 Trustee initially sought to reclaim $164,375, arguing the funds were preferential or fraudulent transfers. At trial, the Trustee proceeded only on the fraudulent conveyance theory, and the parties stipulated that the checks at issue totaled $141,700. Garnavillo Gospel argued that, at most, it and its President Ron Wahls were a conduit for the transfers, which cannot be recovered from them as fraudulent transfers. Garnavillo Gospel alternatively argues that if it cannot be a conduit, Ron Wahls acted outside his authority -- and not as Church President -- on this matter, and Trustee can recover only against Mr. Wahls. The Chapter 7 Trustee claims he proved his case, and argued the Defendants could not be considered mere conduits. The Court disagreed with Chapter 7 Trustee and decided the case for Defendants. "While Garnavillo Gospel's treasurer handled most financial matters, as President, Wahls had the power to write and deposit checks for Garnavillo Gospel's benefit. Although he may have had authority to cash checks written to Garnavillo Gospel, he was not acting on the church's behalf when he cashed the checks from Debtor. Wahls did not ask Rubashkin to write the checks to Garnavillo Gospel, and no one else at Garnavillo had any knowledge of the checks. Wahls cashed the checks at his personal bank, not at Garnavillo Gospel's bank, and the money never entered Garnavillo Gospel's account. Neither Garnavillo Gospel nor Wahls kept any of the cash for their own benefit. Rather, per Rubashkin's instructions, Wahls distributed the money to individuals who performed work for Debtor. These workers were not members of Garnavillo Gospel. The only connection that Garnavillo Gospel has to the transfers is being listed as payee on a majority of the checks. This is not enough to find that Wahls was acting as an agent for Garnavillo Gospel. Wahls was acting in his individual capacity, and was 'not transacting on behalf of the principal.' Since Wahls was not acting on Garnavillo Gospel's behalf, he did not bind Garnavillo Gospel, and Garnavillo Gospel is not liable for any potentially fraudulent transfers," explained Bankruptcy Judge Thad J. Collins. The case is JOSEPH E. SARACHEK, in his capacity as Chapter 7 Trustee, Plaintiff, v. RON WAHLS; GARNAVILLO GOSPEL HALL ASSOCATION Defendants, Adv. Proc. No. 10-09196 (Bankr. N.D. Iowa). A copy of Judge Collins' March 28, 2013 Order is available at http://is.gd/Ft2hVAfrom Leagle.com. About Agriprocessors Inc. Headquartered in Postville, Iowa, Agriprocessors once produced half the kosher beef and 40% of the kosher poultry in the U.S. It filed for bankruptcy following a raid by immigration authorities in May 2008 on the plant in Postville, Iowa, where 389 workers were arrested for having forged immigration documents. The raid led to numerous federal criminal charges, including a high-profile case against Agriprocessors' President, Sholom Rubashkin. The Company filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 08-47472) on Nov. 4, 2008. The case was later transferred to Iowa (Bankr. N.D. Iowa Case No. 08-02751). Kevin J. Nash, Esq., at Finkel Goldstein Rosenbloom & Nash, represented the Company in its restructuring effort. The Debtor estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. SHF Industries Inc. purchased substantially all of the Debtor's assets for $8.5 million in July 2009, and renamed the company Agri Star. The Court approved the sale free and clear of all liens. Agriprocessors' case was then converted to liquidation under Chapter 7, at the consent of the Chapter 11 trustee appointed to take over the estate. The Chapter 11 trustee became the trustee in the Chapter 7 case to liquidate the Debtor's remaining assets and provide distributions to creditors. AGRIPROCESSORS INC: Ch.7 Trustee Can Name Etana Jaffe as Defendant ------------------------------------------------------------------ JOSEPH E. SARACHEK, in his capacity as CHAPTER 7 TRUSTEE, Plaintiff, v. ETANA JAFFE Defendant, Adv. Proc. No. 10-09170 (Bankr. N.D. Iowa), alleges that within two years of Agriprocessors Inc.'s the bankruptcy petition, the Defendant received at least 16 payments from the Debtor totaling $375,000. The Chapter 7 Trustee seeks to recover these transfers as fraudulent conveyances under 11 U.S.C. Sec. 548 or as preferential transfers to an insider under Sec. 547. The Amended Complaint inadvertently described Aaron Abraham Rubashkin as the insider instead of Defendant, Etana Jaffe. The Defendant moved for summary judgment on the Sec. 547 claim, arguing that none of the transfers to Etana Jaffe occurred within 90 days of the bankruptcy petition. The Defendant's basic argument was the Chapter 7 Trustee could not use the one-year period preceding the bankruptcy as the preference period rather than 90-day period for non- insiders because Defendant Etana Jaffe had not been designated as an insider. The Chapter 7 Trustee filed a Motion to Amend his Complaint to Correct Clerical Error and filed a Resistance to Defendant's Motion for Summary Judgment. The Defendant filed a Resistance to Trustee's Motion to Amend and filed a Cross Motion for Summary Judgment, arguing that the Trustee should not be able to amend his Complaint because any amendment would be futile. The Defendant argues futility of amendment because the Chapter 7 Trustee had denied that the Defendant was a creditor of the Debtor in response to a request for admission. The Trustee filed a Resistance to Defendant's Cross Motion for Summary Judgment. He argued that he is allowed to plead inconsistent theories of preference (which requires a debt) and fraudulent conveyance (no debt or insufficient debt). The Trustee also asserts that the Defendant herself had several times admitted and argued she owed a debt. In a March 28, 2013 Ruling available at http://is.gd/uvYVRvfrom Leagle.com, Bankruptcy Judge Thad J. Collins granted the Chapter 7 Trustee's Motion to Amend to Correct Clerical Error and denied the Defendant's Motion and Cross Motion for Summary Judgment on the Second Cause of Action. About Agriprocessors Inc. Headquartered in Postville, Iowa, Agriprocessors once produced half the kosher beef and 40% of the kosher poultry in the U.S. It filed for bankruptcy following a raid by immigration authorities in May 2008 on the plant in Postville, Iowa, where 389 workers were arrested for having forged immigration documents. The raid led to numerous federal criminal charges, including a high-profile case against Agriprocessors' President, Sholom Rubashkin. The Company filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 08-47472) on Nov. 4, 2008. The case was later transferred to Iowa (Bankr. N.D. Iowa Case No. 08-02751). Kevin J. Nash, Esq., at Finkel Goldstein Rosenbloom & Nash, represented the Company in its restructuring effort. The Debtor estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. SHF Industries Inc. purchased substantially all of the Debtor's assets for $8.5 million in July 2009, and renamed the company Agri Star. The Court approved the sale free and clear of all liens. Agriprocessors' case was then converted to liquidation under Chapter 7, at the consent of the Chapter 11 trustee appointed to take over the estate. The Chapter 11 trustee became the trustee in the Chapter 7 case to liquidate the Debtor's remaining assets and provide distributions to creditors. AGRIPROCESSORS INC: Chabad of Alpharetta's Judgment Bid Denied -------------------------------------------------------------- Bankruptcy Judge Thad J. Collins denied the defendant's motion for summary judgment in the clawback suit, JOSEPH E. SARACHEK, in his capacity as CHAPTER 7 TRUSTEE, PLAINTIFF, v. CHABAD OF NORTH FULTON, INC., f/k/a CHABAD OF ALPHARETTA, INC. DEFENDANT, Adv. Proc. No. 10-09131 (Bankr. N.D. Iowa). A copy of the Court's March 28, 2013 Ruling available at http://is.gd/7wGRMdfrom Leagle.com On March 10, 2008, Agriprocessors made a $50,000 payment to Chabad. The Chapter 7 Trustee originally claimed the $50,000 payment is a fraudulent conveyance recoverable under Sec. 548. The Defendant moved for summary judgment on the Sec. 548 claim, arguing that the $50,000 was repayment of a loan the Defendant made to the Debtor and was therefore an exchange for reasonably equivalent value. The Chapter 7 Trustee filed both a Resistance to the Motion for Summary Judgment and a Motion for Leave to Amend his Complaint. The Chapter 7 Trustee sought to amend his Complaint to recover the $50,000 as a preferential transfer under Sec. 547. In 2011, the Court granted the Defendant's Motion for Summary Judgment on the Sec. 548 claim and the Trustee's Motion to Amend to assert a Sec. 547 claim. The Defendant now moves for summary judgment on the Chapter 7 Trustee's Sec. 547 claim. The Defendant argues the Trustee cannot recover from the Defendant because the transfer occurred more than 90 days before the bankruptcy and the Defendant is not an insider. The Defendant also argues the transfer occurred in the ordinary course of business and may not be avoided under Sec. 547(c)(2). The Chapter 7 Trustee resists and argues that both the "insider" and "ordinary course of business" issues involve disputes of material fact. The Court agrees with the Chapter 7 Trustee. About Agriprocessors Inc. Headquartered in Postville, Iowa, Agriprocessors once produced half the kosher beef and 40% of the kosher poultry in the U.S. It filed for bankruptcy following a raid by immigration authorities in May 2008 on the plant in Postville, Iowa, where 389 workers were arrested for having forged immigration documents. The raid led to numerous federal criminal charges, including a high-profile case against Agriprocessors' President, Sholom Rubashkin. The Company filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 08-47472) on Nov. 4, 2008. The case was later transferred to Iowa (Bankr. N.D. Iowa Case No. 08-02751). Kevin J. Nash, Esq., at Finkel Goldstein Rosenbloom & Nash, represented the Company in its restructuring effort. The Debtor estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. SHF Industries Inc. purchased substantially all of the Debtor's assets for $8.5 million in July 2009, and renamed the company Agri Star. The Court approved the sale free and clear of all liens. Agriprocessors' case was then converted to liquidation under Chapter 7, at the consent of the Chapter 11 trustee appointed to take over the estate. The Chapter 11 trustee became the trustee in the Chapter 7 case to liquidate the Debtor's remaining assets and provide distributions to creditors. ALLIED NEVADA: CEO's Resignation No Impact on 'B3' Ratings ---------------------------------------------------------- Moody's Investors Service, Inc. reports that Allied Nevada Gold Corp.'s announcement that the company's president and chief executive officer Scott Caldwell will be stepping down will have no current impact on the company's B3 corporate family rating, B3- PD probability of default rating, B3 senior unsecured rating and SGL-3 speculative grade liquidity rating. The rating outlook is stable. Allied Nevada announced on March 27, 2013 that Mr. Caldwell will be stepping down as CEO and will be replaced, effective immediately, by Bob Buchan, currently the company's executive chairman. Previously, on January 2013, Allied Nevada appointed Randy Buffington, a former senior operations executive from Coeur d'Alene Mines Corporation, as chief operating officer. AMARU INC: Employs Wei Wei & Co as New Accountants -------------------------------------------------- Amaru, Inc., retained Wei, Wei & Co LLP. as the Company's new independent registered public accounting firm. This engagement was approved by the Board of Directors. During the years ended Dec. 31, 2012, and 2011 and any subsequent interim period through March 19, 2013, the Company has not consulted with Wei, Wei & Co LLP regarding the application of accounting principles related to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's financial statements or as to any disagreement or reportable event as described in Item 304(a)(1)(iv) and Item 304(a)(1)(v) of Regulation S-K under the Securities Act of 1933, as amended. About Amaru Inc. Singapore-based Amaru, Inc., a Nevada corporation, is in the business of broadband entertainment-on-demand, streaming via computers, television sets, PDAs (Personal Digital Assistant) and the provision of broadband services. The Company's business includes channel and program sponsorship (advertising and branding); online subscriptions, channel/portal development (digital programming services); content aggregation and syndication, broadband consulting services, broadband hosting and streaming services and E-commerce. After auditing the 2011 results, Wilson Morgan, LLP, in Irvine, California, noted that the Company has sustained accumulated losses from operations totalling $40.7 million at Dec. 31, 2011. This condition and the Company's lack of significant revenue, raise substantial doubt about the Company's ability to continue as going concern, the auditors said. Amaru reported a net loss from operations of $1.37 million in 2011, compared with a net loss from operations of $1.50 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.28 million in total assets, $3.08 million in total liabilities and $195,261 in total stockholders' equity. AMBAC FINANCIAL: Reminds Investors on Common Stock Cancellation --------------------------------------------------------------- Ambac Financial Group, Inc., seeks to remind investors, as previously reported, including on page 4 and elsewhere in Ambac's Annual Report on Form 10-K for the year ended Dec. 31, 2012, that the Company's Fifth Amended Plan of Reorganization, which was confirmed by the United States Bankruptcy Court for the Southern District of New York on March 14, 2012, provides for the Company's common stock to be cancelled. Accordingly, holders of the Company's common stock will not receive any distribution with respect to, or be able to recover any portion of, their investment in such securities. As such, all of the Company's currently outstanding equity securities will be cancelled and have no value upon its emergence from bankruptcy. On Nov. 8, 2010, Ambac filed for a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. The Bankruptcy Court entered an order confirming Ambac's plan of reorganization on March 14, 2012, however, Ambac is not currently able to estimate when it will be able to consummate such reorganization. Until the plan of reorganization is consummated and Ambac emerges from bankruptcy, it will continue to operate in the ordinary course of business as "debtor-in-possession" in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's principal operating subsidiary, Ambac Assurance Corporation, is a guarantor of public finance and structured finance obligations. About Ambac Financial Ambac Financial Group, Inc., headquartered in New York City, is a holding company whose affiliates provided financial guarantees and financial services to clients in both the public and private sectors around the world. Ambac Financial filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-15973) in Manhattan on Nov. 8, 2010. Ambac said it will continue to operate in the ordinary course of business as "debtor- in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. Ambac's bond insurance unit, Ambac Assurance Corp., did not file for bankruptcy. AAC is being restructured by state regulators in Wisconsin. AAC is domiciled in Wisconsin and regulated by the Office of the Commissioner of Insurance of the State of Wisconsin. The parent company is not regulated by the OCI. Ambac's consolidated balance sheet -- which includes non-debtor Ambac Assurance Corp -- showed US$30.05 billion in total assets, US$31.47 billion in total liabilities, and a US$1.42 billion stockholders' deficit, at June 30, 2010. On an unconsolidated basis, Ambac said in a court filing that it has assets of (US$394.5 million) and total liabilities of US$1.6826 billion as of June 30, 2010. Bank of New York Mellon Corp., as trustee to seven different types of notes, is listed as the largest unsecured creditor, with claims totaling about US$1.62 billion. The Blackstone Group LP is the Debtor's financial advisor. Kurtzman Carson Consultants LLC is the claims and notice agent. KPMG LLP is tax consultant to the Debtor. Anthony Princi, Esq., Gary S. Lee, Esq., and Brett H. Miller, Esq., at Morrison & Foerster LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Lazard Freres & Co. LLC is the Committee's financial advisor. Bankruptcy Judge Shelley C. Chapman entered an order confirming the Fifth Amended Plan of Reorganization of Ambac Financial Group, Inc. on March 14, 2012. The Plan provides for the full payment of secured claims and 8.5% to 13.2% recovery for general unsecured claims. Bankruptcy Creditors' Service, Inc., publishes AMBAC BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by Ambac Financial Group and the restructuring proceedings of Ambac Assurance Corp. (http://bankrupt.com/newsstand/or 215/945- 7000). AMERICAN AIRLINES: Investors Profit From Rise in Shares ------------------------------------------------------- Bill Rochelle, bankruptcy analyst and columnist for Bloomberg News, shared in an interview with Lee Pacchia at Bloomberg Law that investors who bought American Airlines stocks last year at $0.40 made a killing as the bankrupt airlines' stocks are currently trading at around $4. According to Mr. Rochelle, the holding company was solvent and people were buying stocks due to the company's capital structure. Chris Bagley, writing for Triangle Business Journal, noted that AMR, which has the publicly traded shares, its American Airlines subsidiary, and its sister American Eagle, were all able to borrow separately. Before the merger with US Airways was announced, people were already buying AMR stocks, Mr. Rochelle said. By the time the merger deal was announced, AMR stock prices rose to about 50% from the October 2012 price. Mr. Rochelle noted that under the proposed merger deal with US Airways, existing shareholders of AMR are not going to own either all or half of the merged airlines, but only 3.5% of the merged airlines, which, he said, means people are putting a "mighty high" value on the merged airlines. The Triangle Business Journal report also related that AMR shares fell below $1 in late 2011 when it filed for bankruptcy, and stayed there until the first week of January. 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: Closes Private Offering of $663MM EETCs ---------------------------------------------------------- American Airlines, Inc., the principal operating subsidiary of AMR Corporation, closed its private offering of two tranches of enhanced equipment trust certificates in the aggregate face amount of $663,378,000. The Certificates are comprised of a senior tranche of Class A Certificates with an interest rate of 4.000% per annum and a final expected distribution date of July 15, 2025 and a junior tranche of Class B Certificates with an interest rate of 5.625% per annum and a final expected distribution date of January 15, 2021. The Certificates represent an interest in the assets of two separate pass through trusts, each of which will hold equipment notes expected to be issued by American. The equipment notes are expected to be secured by eight currently owned Boeing 737-823 aircraft and one currently owned Boeing 777- 223ER aircraft, each of which aircraft is either unencumbered or is subject to a private mortgage financing, and four new Boeing 777-323ER aircraft currently scheduled for delivery to American during the period from April 2013 to July 2013. The Certificates were offered in the United States to qualified institutional buyers, as defined in, and in reliance on, Rule 144A under the Securities Act of 1933, as amended. The Certificates will not be registered under the Securities Act or applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state law. * * * "This is an alignment of the stars that hasn't been available to this company in years," Charles Mead and Mary Schlangenstein, writing for Bloomberg News, reported, citing Vicki Bryan, a senior bond analyst at Gimme Credit LLC, who upgraded AMR to "stable" from "deteriorating" in February. American's bankruptcy is "already in the rearview mirror and people are willing to invest in the new company," she said. "The market is favorable," Philip Baggaley, an analyst at Standard & Poor's in New York, said in a telephone interview with Bloomberg. "American in bankruptcy, but with a clear pathway to exiting bankruptcy and a better cost and capital structure, can finance at much better rates than American could before the bankruptcy, when its future was more uncertain." The Bloomberg News report, dated March 13, noted that S&P ranks the 4%, Class-A certificates BBB-, two steps below Fitch's BBB+ grade, and has a B+ rating on the 5.625%, Class-B debt, a level above Fitch's B ranking. US Airways is rated B3 by Moody's Investors Service and B- by S&P. 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 STORES: Moody's Withdraws 'Caa1' Senior Debt Rating ------------------------------------------------------------ Moody's Investors Service withdrew the ratings of all tranches of American Stores Company's senior unsecured notes following the closing of SUPERVALU, Inc.'s sale of ASC to AB Acquisition LLC, an affiliate of a Cerberus-led investor consortium. Moody's has withdrawn the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the rating. The following ratings are withdrawn: American Stores Company Senior Unsecured Debt (all tranches) at Caa1 on review for upgrade. AMF BOWLING: Aims for June 6 Confirmation of Plan ------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMF Bowling Worldwide Inc. filed a proposed reorganization plan to sell the bowling alley business to senior lenders in exchange for about $215 million in first-lien debt, under an agreement worked out before the Chapter 11 petition was filed in November. According to the report, AMF wants the judge to hold an April 21 hearing for approval of disclosure materials so creditors can vote on the plan. The company tentatively scheduled a June 6 confirmation hearing for approval of the plan. The report relates that senior lenders are to receive all the new stock and not less than $135 million cash supplied by a subgroup of the lenders in the form of a term loan. There were no offers to compete with the proposal from the senior lenders, so an auction was canceled. Holders of $80 million in second-lien debt are to receive warrants for 10% of the company that can't be exercised unless AMF is sold within three years. Even then, the warrants will have no value unless the sale price is 115% of the face amount of the first-lien debt, financing for the Chapter 11 case, and administrative expenses paid in full on emerging from bankruptcy. The recovery by unsecured creditors is still under negotiation, according to the disclosure statement. A liquidation analysis will be supplied later. A group of the first-lien lenders is supporting the Chapter 11 case with $50 million in fresh financing. About AMF Bowling Worldwide AMF Bowling Worldwide Inc. is the largest operator of bowling centers in the world. The Company and several affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case Nos. 12-36493 to 12-36508) on Nov. 12 and 13, 2012, after reaching an agreement with a majority of its secured first lien lenders and the landlord of a majority of its bowling centers to restructure through a first lien lender-led debt-for-equity conversion, subject to higher and better offers through a marketing process. At the time of the bankruptcy filing, AMF operated 262 bowling centers across the United States and, through its non-Debtor facilities, and 8 bowling centers in Mexico -- more than three times the number of bowling centers of its closest competitor. Debt for borrowed money totals $296 million, including $216 million on a first-lien term loan and revolving credit, and $80 million on a second-lien term loan. Mechanicsville, Virginia-based AMF first filed for bankruptcy reorganization in July 2001 and emerged with a confirmed Chapter 11 plan in February 2002 by giving unsecured creditors 7.5% of the new stock. The bank lenders, owed $625 million, received a combination of cash, 92.5% of the stock, and $150 million in new debt. At the time, AMF had over 500 bowling centers. Judge Kevin R. Huennekens oversees the 2012 case, taking over from Judge Douglas O. Tice, Jr. Patrick J. Nash, Jr., Esq., Jeffrey D. Pawlitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP; and Dion W. Hayes, Esq., John H. Maddock III, Esq., and Sarah B. Boehm, Esq., at McGuirewoods LLP, serve as the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker and financial advisor. McKinsey Recovery & Transformation Services U.S., LLC, serves as the Debtors' restructuring advisor. Kurtzman Carson Consultants LLC serves as the Debtors' claims and noticing agent. Kristopher M. Hansen, Esq., Sayan Bhattacharyya, Esq., and Marianne S. Mortimer, Esq., at Stroock & Stroock & Lavan LLP; and Peter J. Barrett, Esq., and Michael A. Condyles, Esq., at Kutak Rock LLP, represent the first lien lenders. An ad hoc group of second lien lenders are represented by Lynn L. Tavenner, Esq., and Paula S. Beran, Esq., at Tavenner & Beran, PLC; and Ben H. Logan, Esq., Suzzanne S. Uhland, Esq., and Jennifer M. Taylor, Esq., at O'Melveny & Myers LLP. The Official Committee of Unsecured Creditors retained Pachulski Stang Ziehl & Jones LLP as its lead counsel; Christian & Barton, LLP as its local counsel; and Mesirow Financial Consulting, LLC as its financial advisors. AMPAL-AMERICAN ISRAEL: Rescinds Delisting Notice of Securities -------------------------------------------------------------- On March 22, 2013, The NASDAQ Stock Market erroneously announced that it had delisted the common stock of Ampal-American Israel Corporation. Ampal-American Israel Corporation's stock remains listed on NASDAQ, but is currently suspended from trading on NASDAQ pending the outcome of its appeal of a NASDAQ Hearing Panel determination to delist the company's securities. Should the Hearing Panel determination to delist the company's securities be affirmed, NASDAQ will file a Form 25 with the Securities and Exchange Commission to complete the delisting. The delisting becomes effective ten days after the Form 25 is filed. About Ampal-American Ampal-American Israel Corporation -- http://www.ampal.com/-- acquired interests primarily in businesses located in Israel or that are Israel-related. Ampal-American filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29, 2012, to restructure the Company's Series A, Series B and Series C debentures. Bankruptcy Judge Stuart M. Bernstein presides over the case. Ampal-American sought bankruptcy protection in the U.S. because bankruptcy laws in Israel would lead to the Company's liquidation. Michelle McMahon, Esq., at Bryan Cave LLP, serves as the Debtor's counsel. Houlihan Lokey serves as investment banker. The petition was signed by Irit Eluz, chief financial officer, senior vice president. The Company scheduled $290,664,095 in total assets and $349,413,858 in total liabilities. A three-member official committee of unsecured creditors is represented by Brown Rudnick as counsel. AMTRUST FINANCIAL: Beats FDIC on Entitlement to Tax Refund ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that when a bank is taken over by regulators and the holding company goes bankrupt, a tax refund resulting from losses at the bank nonetheless belongs to the holding company. The Federal Deposit Insurance Corp., as receiver for the bank, only has a general unsecured claim, according to an opinion on March 26 by U.S. District Judge John R. Adams in Akron, Ohio. According to the report, Judge Adams said the tax-sharing agreement "unambiguously" created a "debtor-creditor relationship" between the holding company and the bank subsidiary. Judge Adams adopted the analysis of U.S. Bankruptcy Judge Sheri Bluebond in a case involving IndyMac Bancorp. The suit involved a $200 million tax refund for 2009. The FDIC claimed the right to collect all but $9 million of the refund. The district court suit is Federal Deposit Insurance Corp. v. AmFin Financial Corp., 11-cv-02574, U.S. District Court, Northern District of Ohio (Akron). The Chapter 11 case is In re AmFin Financial Corp., 09-bk-21323, U.S. Bankruptcy Court, Northern District of Ohio (Cleveland). About AmTrust Financial AmTrust Financial Corp. was the owner of the AmTrust Bank. AmTrust was the seventh-largest holder of deposits in South Florida, with $4.7 billion in deposits and 21 branches. In November 2008, the Office of Thrift Supervision issued a cease and desist order requiring AmTrust to improve its capital ratios. AmTrust Financial, together with affiliates that include AmTrust Management Inc., filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ohio Case No. 09-21323) on Nov. 30, 2009. The debtor subsidiaries include AmFin Real Estate Investments, Inc., formerly AmTrust Real Estate Investments, Inc. (Case No. 09-21328). G. Christopher Meyer, Esq., Christine M. Piepont, Esq., and Sherri L. Dahl, Esq., at Squire Sanders & Dempsey (US) LLP, in Cleveland, Ohio; and Stephen D. Lerner, Esq., at Squire Sanders & Dempsey (US) LLP, in Cincinnati, Ohio, served as counsel to the Debtors. Kurtzman Carson Consultants served as claims and notice agent. Attorneys at Hahn Loeser & Parks LLP serve as counsel to the Official Committee of Unsecured Creditors. AmTrust Management estimated $100 million to $500 million in assets and debts in its Chapter 11 petition. AmTrust Bank was not part of the Chapter 11 filings. On Dec. 4, 2009, AmTrust Bank was closed by regulators and the Federal Deposit Insurance Corporation was named receiver. New York Community Bank, in Westbury, New York, assumed all of the deposits of AmTrust Bank pursuant to a deal with the FDIC. AmTrust, nka AmFin Financial Corp., obtained confirmation of its Amended Joint Plan of Reorganization on Nov. 3, 2011. The plan was declared effective in December. ARCHDIOCESE OF MILWAUKEE: Judge Cuts Off Lawyer Compensation ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the judge overseeing the bankruptcy of the Archdiocese of Milwaukee cut off compensation last week to lawyers representing the archdiocese and counsel for the official creditors' committee representing victims of sexual abuse. The report recounts that the archdiocese filed papers in late January telling the judge how it paid $8.3 million in professional fees since filing for Chapter 11 protection in January 2011. The church said it would run out of cash by April if it were to continue paying lawyers and other professionals at the current rate. The committee opposed, saying the church's current financial problems resulted from a "misplaced, uneconomical and unsuccessful reorganization strategy." According to the report, U.S. Bankruptcy Judge Susan V. Kelley handed down an order on March 26 cutting off further monthly payment of attorneys' fees. The cessation of payments will also apply to a future claims representative, if one is appointed. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ARCHDIOCESE OF MILWAUKEE: DOT Seeks Stay Relief to Recoup Property ------------------------------------------------------------------ The Wisconsin Department of Transportation asked U.S. Bankruptcy Judge Susan Kelley to lift the automatic stay to allow the agency to acquire a property owned by the Archdiocese of Milwaukee. The agency wants to acquire the property located in Milwaukee, Wisconsin, for use in rebuilding Interstate Highway 1-94, according to court filings. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ARCHDIOCESE OF MILWAUKEE: Says OneBeacon Payment Not Estate Asset ----------------------------------------------------------------- The Archdiocese of Milwaukee asked a bankruptcy judge to deny the unsecured creditors' bid to treat payments from OneBeacon Insurance Co. as property of the Debtor's estate. The unsecured creditors' committee has requested that the payments made by OneBeacon on account of its duty to defend claims against the archdiocese be shared pro rata by all administrative creditors. The committee said those payments as well as OneBeacon's insurance policies are property of the estate. In a letter to U.S. Bankruptcy Judge Susan Kelley, the archdiocese said the request violates bankruptcy law and the Rules of Professional Conduct for Attorneys in Wisconsin. "The committee has no right to an insurer's payments for the cost of defense because that cost is unrelated to actual claims coverage under the policy," Daryl Diesing, Esq., at Whyte Hirschboeck Dudek S.C., wrote in the letter. The lawyer also said the committee's lawyers' demands are barred by the Wisconsin Supreme Court Rules governing the ethical conduct of lawyers in that state. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ARCHDIOCESE OF MILWAUKEE: Judge Disallows Victim's Claim No. 77 --------------------------------------------------------------- U.S. Bankruptcy Judge Susan Kelley issued an order disallowing Claim No. 77 filed against the Archdiocese of Milwaukee. The claimant, who asserts claims for clergy abuse, and whose name has been withheld in court papers, was only referred to in court papers as Claimant A-13. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ARCHDIOCESE OF MILWAUKEE: Claimant Appeals Disallowance Order ------------------------------------------------------------- A claimant appealed a bankruptcy judge's decision, which disallowed his claim against the Archdiocese of Milwaukee. The claimant, who was only identified in court papers as Claimant A-282, wants his appeal to review the decision heard by the U.S. District Court for the Eastern District of Wisconsin. In a March 4 memorandum decision, U.S. Bankruptcy Judge Susan Kelly disallowed Claim No. 394 filed by one of the victims of sexual abuse allegedly perpetrated by Fr. Lawrence Murphy while serving at St. John's School for the Deaf. Judge Kelley in the March 4 order corrected herself and reversed a November 2012 order allowing Claimant A-282 to submit as evidence the communications made during a confidential pre-bankruptcy mediation session between the claimant and the Archdiocese of Milwaukee. "The Court will grant the Debtor's motion for reconsideration of the Mediation Order, and will not allow any statements made in the mediation to be considered in deciding the claim objection," Judge Kelley said. The judge added: "The Court sincerely regrets that this change of direction likely will cause Claimant A-282 consternation and anguish. With the exclusion of the mediation communications, the settlement and release results in disallowance of his proof of claim. But the Order disallowing Claimant A-282's claim will be immediately appealable. If the district court reverses and allows consideration of the mediation communications, then the Claimant can move forward to defend his claim using that evidence. However, if this Court's decision is affirmed, then the Claimant will not have endured the emotional turmoil of litigating the claim objection, only to see the result overturned on appeal because the Court's Mediation Order was reversed. The Court will issue an Order vacating the prior Order and disallowing Claimant A-282's claim." On April 24, 2012, the archdiocese filed an objection to the claim and a motion for summary judgment in support of its objection. The objection was based on the settlement and complete release that the victim signed after participating in a mediation program established by the Archdiocese of Milwaukee for victims of sexual abuse. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) BELLMONT ROCK: Case Summary & 4 Unsecured Creditors --------------------------------------------------- Debtor: Bellmont Rock Holdings, LLC aka Federal JER Associates I, LLC Federal Del Rey Associates, LLC 4023 Kennett Pike, Suite 644 Wilmington, DE 19807 Bankruptcy Case No.: 13-10590 Chapter 11 Petition Date: March 22, 2013 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Christopher S. Sontchi Debtor's Counsel: Donna L. Harris, Esq. PINCKNEY, HARRIS & WEIDINGER, LLC 1220 N. Market Street, Suite 950 Wilmington, DE 19801 Tel: (302) 504-1499 - Direct Fax: (302) 442-7046 E-mail: dharris@phw-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company's list of its four largest unsecured creditors is available for free at: http://bankrupt.com/misc/deb13-10590.pdf The petition was signed by Ximena Suarez, manager. BIG APPLE VOLKSWAGEN: Two Trials Can Be More Efficient Than One --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. District Judge Paul G. Gardephe in New York wrote in an opinion on March 24 that allowing a bankruptcy judge to issue an advisory opinion in a fraudulent transfer suit is more efficient, even though there may be some duplication of proceedings in district court. According to the report, Judge Gardephe said he would follow the "emerging consensus" in New York that bankruptcy judges don't ordinarily have the right under the Supreme Court's Stern v. Marshall opinion to issue final rulings in fraudulent transfer suits. In the interest of judicial economy, he allowed the suit to go to trial in bankruptcy court, rejecting the defendant's plea that holding one trial in district court is preferable. Judge Gardephe said the bankruptcy judge has handled the bankruptcy and "is more familiar with avoidance claims, which are customarily adjudicated by bankruptcy courts because they are core proceedings." The report relates that along with the request to withdraw the suit from bankruptcy court, the defendant asked the district court to rule on the right to a jury trial. On a procedural point, Judge Gardephe said the question of waiver of jury trial should be decided by the bankruptcy court because filing the motion to withdraw the reference didn't automatically halt proceedings before the bankruptcy judge. Judge Gardephe thus is allowing the bankruptcy judge to decide whether the defendant is entitled to a jury trial. If there is a right to a jury, the suit may end up in Judge Gardephe's courtroom for trial. The case is Nisselson v. Salim (In re Big Apple Volkswagon LLC), 12-cv-00092, U.S. District Court, Southern District of New York (Manhattan). Big Apple Volkswagen LLC sought bankruptcy protection (Bankr. S.D.N.Y. Case No. 11-11388) in Manhattan on March 30, 2011. The Debtor, an auto dealer on Boston Post Road in the Bronx, New York, filed for Chapter 11 protection to prevent Volkswagen Credit Inc. from taking possession. The lender, according to the Debtor, confiscated the keys and titles to the dealership's 76 new and seven used autos. BON-TON STORES: Appoints New Member to its Board of Directors ------------------------------------------------------------- The Bon-Ton Stores, Inc.'s Board of Directors has unanimously elected Jeffrey B. Sherman to its Board effective March 21, 2013. Mr. Sherman will serve on the Human Resources and Compensation Committee. Mr. Sherman, 64, has been President of The Echo Design Group, a company that designs, manufactures and distributes accessories and home products, since 2010. From 2008 to 2010, he served as President and Chief Executive Officer of Hudson's Bay Trading Company, a retailer with over 600 retail locations in Canada and the United States. Prior to that, Mr. Sherman served as President and Chief Operating Officer of the Polo Retail Group of Ralph Lauren Corporation, as Chief Executive Officer of Limited Stores and in positions of increasing responsibility for over 30 years with Federated Department Stores, including President and Chief Operating Officer of Bloomingdale's. Mr. Sherman received his M.B.A. from New York University and a B.S. degree from New York City College. Mr. Sherman serves on the Board of Directors of United Way, New York City. Tim Grumbacher, Chairman Emeritus of the Board, stated, "We are very pleased to welcome Jeff as a member of our Board of Directors. Jeff possesses extraordinary experience in the retail and apparel industries. I believe his expertise and vast knowledge will be invaluable to Bon-Ton. We welcome Jeff's insight and counsel as we continue to execute our business strategies for profitable growth and increased shareholder value." The Company also announced that Bud Bergren has informed the Board of Directors he will not be standing for reelection to the Board. Mr. Bergren's term as director will expire effective as of the 2013 annual meeting of shareholders. Mr. Grumbacher said, "The Board of Directors and I would personally like to thank Bud for his contributions and dedicated service. We were very fortunate to have had his counsel and support and wish him the best." About Bon-Ton Stores The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 273 department stores, which includes 11 furniture galleries, in 24 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson Pirie Scott, Elder-Beerman, Herberger's and Younkers nameplates and, in the Detroit, Michigan area, under the Parisian nameplate. For the 53 weeks ended Feb. 2, 2013, the Company incurred a net loss of $21.55 million on $2.91 billion of net sales, as compared with a net loss of $12.12 million on $2.88 billion of net sales for the 52 weeks ended Jan. 28, 2012. The Company's balance sheet at Feb. 2, 2013, showed $1.63 billion in total assets, $1.52 billion in total liabilities and $110.60 million in total shareholders' equity. * * * As reported by the TCR on July 13, 2012, Moody's Investors Service revised The Bon-Ton Stores, Inc.'s Probability of Default Rating to Caa1/LD from Caa3. The Caa1/LD rating reflects the company's exchange of $330 million of new senior secured notes due 2017 for $330 million of its unsecured notes due 2014. Moody's also affirmed the company's Corporate Family Rating at Caa1 and affirmed the Caa3 rating assigned to the company's senior unsecured notes due 2014. Moody's said the affirmation of the company's 'Caa1' corporate family rating reflects the company's persistent negative trends in sales and operating margins and uncertainties that the company's strategies to reverse these trends will be effective. CDPHP UNIVERSAL: A.M. Best Lowers Issuer Credit Rating From 'bb' ---------------------------------------------------------------- A.M. Best Co. has placed under review with negative implications the financial strength rating (FSR) of B+ (Good) and issuer credit rating (ICR) of "bbb-" of Capital District Physicians' Health Plan, Inc. (CDPHP). Additionally, A.M. Best has downgraded the FSR to C++ (Marginal) from B (Fair) and ICR to "b+" from "bb" of CDPHP's subsidiary, CDPHP Universal Benefits, Inc. (UBI) (both of Albany, NY). These ratings also have been placed under review with negative implications. The rating actions on UBI primarily reflect the significant decline in its statutory capital and net losses reported through year-end 2012, which directly affected its reported risk-adjusted capital. Additionally, offsetting these negative rating actions is UBI's strong revenue growth trend, which has placed a strain on its capital as well. CDPHP has historically issued surplus notes to provide capital support to UBI. CDPHP's ratings recognize its adequate risk- adjusted capital, favorable revenue growth trend and leading market position in the greater capital district marketplace. A.M. Best notes that CDPHP faces competitive market pressure and an uncertain outcome in New York State based on its health insurance exchanges over the near term. All ratings will remain under review pending A.M. Best's examination of the organization's year-end 2012 financial results. CELLULAR BIOMEDICINE: Names Radiology Professor to Board -------------------------------------------------------- Cellular Biomedicine Group Inc. announced the appointment of Dr. Jianping Dai to the Board of Directors. Dr. Dai is a professor of radiology in the Beijing Neurosurgical Institute and Beijing Tiantan Hospital, Capital Medical University. He also serves as the President of Capital Medical University School of Medical Imaging and Informatics. He served as the President of Beijing Tiantan Hospital Affiliated of Capital Medical University from 1993 to 2008. He is a foreign associate of the Institute of Medicine (IOM) of the National Academies. Previously Dr. Dai served as President of the Chinese Society of Radiology, Vice President of the Chinese Hospital Association and Chairman of the Neuroimaging Center, Beijing Tiantan Hospital. Beijing Tiantan Hospital is the largest center for clinical treatment, teaching and research in neurology in Asia, and is a partner with WHO (World Health Organization) on neurology training cooperation. Dr. Dai is the recipient of several awards from the Chinese government due to his outstanding contribution to his country and has focused his research on interventional therapy for cerebrovascular disease and functional neuroimaging. Dr. Steve Liu, Chairman and CEO of CBMG said, "Dr. Dai is widely known for his outstanding contributions to the development of neurology in China. His diplomatic ability and extensive experience in the medical community in China will be a great asset to the CBMG Board." In connection with Dr. Dai's appointment to the Board, and in accordance with a letter agreement between Dr. Dai and the Company, Dr. Dai will be paid $30,000 per year for his services as a director. In addition, Dr. Dai will be entitled to receive a non-qualified stock option under the Company's Amended and Restated 2011 Incentive Stock Option Plan to purchase up to 5,300 shares of common stock. The exercise price of the option will be set by the administrator of the plan on the effective date of the option grant. About Cellular Biomedicine Group Cellular Biomedicine Group, Inc., formerly known as EastBridge Investment Group Corp., develops proprietary cell therapies for the treatment of certain degenerative diseases and cancers. The Company's developmental stem cell, progenitor cell, and immune cell projects are the result of research and development by scientists and doctors from China and the United States. The Company's flagship GMP facility, consisting of eight independent cell production lines, is designed, certified and managed according to U.S. standards. To learn more about CBMG, please visit: http://www.cellbiomedgroup.com/ Tarvaran Askelson & Company, LLP, in Laguna Niguel, California, expressed substantial doubt about EastBridge Investment's ability to continue as a going concern, following its audit of the Company's financial statements for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred significant losses and that the Company's viability is dependent upon its ability to obtain future financing and the success of its future operations. The Company's balance sheet at Sept. 30, 2012, showed $6.7 million in total assets, $4.5 million in total liabilities, and stockholders' equity of $2.2 million. CENVEO CORP: Moody's Assigns 'Ba3' Rating to New US$360MM Loan -------------------------------------------------------------- Moody's Investors Service rated Cenveo Corporation's new $360 million term loan Ba3. As part of the same rating action, Cenveo's corporate family rating and probability of default rating were affirmed at B3 and B3-PD respectively. The company's senior secured second lien notes were affirmed at B3, and its senior unsecured notes at Caa2. Cenveo's speculative grade liquidity rating was also affirmed, at SGL-3 (adequate liquidity). The outlook remains negative. Proceeds from the new $360 million term loan due 2020 (TLB) plus a new unrated $200 million asset-backed revolving term loan (ABL) due 2018 will repay a $386 million term loan (TLB) due 2016 and borrowings under the company's existing $170 million revolving term loan (RTL) due 2014. Since the transaction leaves Cenveo's credit metrics unchanged, the company's CFR is unaffected and was affirmed at B3. The transaction provides a four year window free of debt maturities. Cenveo's next maturity is 2017 when $360 million comes due, followed by $400 million in 2018. The new credit facilities mature in 2018 and 2020 if the outstanding notes issues due in 2017 are refinanced; otherwise, they mature 90 days prior to obligations. While a positive development, the transaction has no impact on Cenveo's SGL-3 speculative graded liquidity rating (adequate). However, presuming ongoing maintenance of financial covenant compliance, the extended maturity date is likely to ensure adequate liquidity for the next three years. Cenveo Corporation is a wholly-owned subsidiary of Cenveo, Inc. (Cenveo), a publicly traded holding company. While all debt instruments are issued by Cenveo Corporation, since Cenveo Inc. guarantees all of Cenveo Corporation's debt and financial statements are issued only by Cenveo Inc., Moody's maintains corporate-level ratings and the associated outlook at Cenveo Inc. Rating Actions: Issuer: Cenveo Corporation Senior Secured Term Loan assigned Ba3 (LGD2, 23%) Issuer: Cenveo Inc. Outlook, unchanged at Negative Speculative Grade Liquidity Rating, affirmed at SGL-3 Corporate Family Rating, affirmed at B3 Probability of Default Rating, affirmed at B3-PD Issuer: Cenveo Corporation Senior Secured Bank Credit Facility, affirmed at Ba3 (LGD2, 19%) [will be withdrawn in due course] Senior Secured Second Lien Notes, affirmed at B3 with the LGD Assessment revised to (LGD4, 54%) from (LGD4, 58%) Senior Unsecured Regular Bond/Debenture, affirmed at Caa2 with the LGD Assessment revised to (LGD5, 85%) from (LGD5, 87%) The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. Ratings Rationale Cenveo is weakly positioned at the B3 rating level primarily because of elevated leverage (Y/E 2012 Debt/EBITDA was 6.5x) and a limited ability to reduce debt (FCF/Debt was 3.2% at December 31, 2012). The commercial printing industry is in secular decline which is also a negative consideration. Revenues declined nearly 6% in 2012. However, with management limiting capital spending to 2% of revenues, Cenveo is able to generate $50 million-to-$60 million per year of free cash flow, and ongoing refinance activities provide the company with much-needed time to reduce its nearly $1.5 billion of debt (after Moody's standard adjustments). Rating Outlook Owing to recent revenue declines at Cenveo and an ongoing secular decline in the industry, the rating outlook is negative. What Could Change the Rating - Up? A positive rating action would require expectations of Debt/EBITDA leverage being less than 4.5x on a sustained basis along with free cash flow in excess of 5% of total debt. With current Debt/EBITDA at 6.5x, reaching the upgrade trigger implies debt reduction of 30% and/or EBITDA growth of 45%. Given this and given that an upgrade would also require solid liquidity arrangements, an absence of near-term refinance risks, improved industry fundamentals, and a stable business platform displaying top-line growth, Cenveo's ratings are likely to be constrained at the B3 level for some time. What Could Change the Rating - Down? Cenveo's ratings could be downgraded if liquidity and refinance issues arise or if debt reduction activities falter whether because of poor results or a management decision. Owing to their potential impact of future refinance activities, a downwards revision in existing financial guidance or a decrease in annual 'same store' revenue could also result in a downgrade. The principal methodology used in this rating was the Global Publishing Industry Methodology published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Stamford, Connecticut, Cenveo Corporation, a wholly-owned subsidiary of Cenveo, Inc. (Cenveo, a publicly traded holding company), with annual revenues of approximately $1.8 billion, is involved in commercial printing and packaging (43% of revenue), envelopes (39% of revenue), and form and label manufacturing (18% of revenue). CHARTIS EXCESS: Chapter 15 Case Summary --------------------------------------- Chapter 15 Debtor: Chartis Excess Limited 30 North Wall Quay, IFSC Dublin 1, Ireland Chapter 15 Case No.: 13-10526 Chapter 15 Petition Date: March 25, 2013 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Foreign Representative: Alexander Rosati Foreign Representative's Counsel: Howard Seife, Esq. CHADBOURNE & PARKE, LLP 30 Rockefeller Plaza New York, NY 10112 Tel: (212) 408-5361 Fax: (212) 541-5369 E-mail: hseife@chadbourne.com Estimated Assets: $100,000,001 to $500,000,000 Estimated Debts: $100,000,001 to $500,000,000 The Company did not file a list of creditors together with its petition. D AND R ROOFING: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: D and R Roofing Co., Inc. 116 Davis Street Douglas, MA 01516 Bankruptcy Case No.: 13-40678 Chapter 11 Petition Date: March 22, 2013 Court: U.S. Bankruptcy Court District of Massachusetts (Worcester) Judge: Melvin S. Hoffman Debtor's Counsel: Robert Osol, Esq. MELIA & OSOL 16 Harvard Street Worcester, MA 01609 Tel: (508) 753-5552 Fax: (508) 798-4040 E-mail: rosol@melia-osol.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 is available for free at http://bankrupt.com/misc/mab13-40678.pdf The petition was signed by Richard J. Ezold, Sr., president. D MEDICAL: Voluntarily Deregisters Ordinary Shares with SEC ----------------------------------------------------------- D. Medical Industries Ltd.'s Board of Directors approved the filing of a Form 15F with the Securities and Exchange Commission to voluntarily deregister its ordinary shares under the Securities Exchange Act of 1934. The Company intends to file the Form 15F on or about March 29, 2013. The Company's reporting obligations under the Exchange Act will be suspended immediately upon the filing of Form 15F and will terminate 90 days thereafter if there are no objections from the SEC. The Company reserves the right to delay or withdraw the filing for any reason prior to their effectiveness. Following the deregistration, the Company's ordinary shares may continue to be quoted on the OTC Markets Group Inc. electronic quotation service if market makers commit to make a market in the Company's shares. However, the Company has not arranged for quotation on the Pink Sheets or listing or quotation on any other exchange or quotation medium within the U.S. Thus, the Company can provide no assurance that trading in its ordinary shares will be quoted on the Pink Sheets or otherwise. The Company's ordinary shares will continue to trade on the Tel Aviv Stock Exchange Ltd. In deciding to voluntarily deregister its ordinary shares, the Company's Board of Directors considered several factors, including the following: * low U.S. trading volume; * high public company costs in the U.S., including those associated with preparation and filing of the Company's periodic reports with the SEC; * significant management time spent on U.S. regulatory compliance; and * the potential impact of deregistration on Company shareholders resident in the U.S. In addition, D. Medical filed a post-effective amendment no.1 to the Form F-1 originally filed on May 25, 2010, a post-effective amendment no.1 to the Form F-3 registration statement originally filed on Sept. 2, 2011, and a post-effective amendment no.1 to the Form S-8 registration statement originally filed Dec. 28, 2010. The Company amended the Registration Statements to withdraw from registration the securities registered but remain unsold. About D. Medical D. Medical -- http://www.dmedicalindustries.com/-- is a medical device company that holds through its subsidiaries a portfolio of products and intellectual property in the area of insulin and drug delivery. D. Medical has developed durable and semi-disposable insulin pumps, which continuously infuse insulin into a patient's body, using its proprietary spring-based delivery technology. D. Medical believes that its spring-based delivery mechanism is cost- effective compared to the motor and gear train mechanisms that drive competitive insulin pumps and also allows it to incorporate certain advantageous functions and design features in its insulin pumps. The Company reported a net loss of NIS 48.30 million on NIS 1.51 million of sales for 2011, compared with a net loss of NIS 45.89 million on NIS 1.26 million of sales for 2010. The Company's balance sheet at Sept. 30, 2012, showed NIS8.7 million in total assets, NIS7.7 million in total liabilities, and equity of NIS1.0 million. As reported by the Troubled Company Reporter on July 18, 2012, Kesselman & Kesselman, in Haifa, Israel, expressed substantial doubt about D. Medical Industries Ltd.'s ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has suffered recurring losses and negative cash flows from operations. DAYSTAR TECHNOLOGIES: Gets Nasdaq Listing Non-Compliance Notice --------------------------------------------------------------- DayStar Technologies Inc. received notice from The Nasdaq Stock Market on March 20, 2013, that the staff is of the view that on at least two occasions over the past five months, the Company has violated the shareholder approval requirements set forth in Listing Rule 5635(c). The notice states that these violations form an additional concern under Listing Rule 5101 and a separate and additional basis for delisting the Company's securities from The Nasdaq Stock Market. The staff letter also raised "public interest" concerns regarding: i. the Company's lack of revenue to date, current and planned operating business; ii. the magnitude of the share issuances following the Company's reverse stock split on April 9, 2012, under which the Company's number of total shares outstanding ("TSO") rose from 1.56 million on May 11, 2012 to 4.3 million by January 7, 2013 and was expected to continue to grow; iii. the lack of oversight by the Company's prior Interim Chief Executive Officer with respect to the Company's operations, especially given that, during his tenure as Chief Executive Officer, Mr. Lacey certified each of the Company's periodic reports filed with the SEC as to their accuracy and completeness, as required by the Sarbanes-Oxley Act of 2002, taken together with the staff's concerns regarding the Company's current limited business activity, and the concern about shareholder approval violations; iv. the Company's ability to continue to comply with Nasdaq's listing standards given that in its Form 10-Q for the period ended September 30, 2012, the Company reported stockholders' equity of $2,663,519, since its inception, the Company has incurred losses, including a $3.8 million loss for the nine months ended September 30, 2012 and losses of $3.4 million and $28.1 million for the years ended December 31, 2011 and 2010, and that the Company's CFO advised the staff that it expects to report stockholders' equity below the minimum $2.5 million requirement for continued listing on The Nasdaq Capital Market, as prescribed in Listing Rule 5550(b)(1) when it files its Annual Report on Form 10-K for the year ended December 31, 2012; v. the history of the Company's non-compliance with the Listing Rules, having received notifications for failure to evidence compliance on thirteen (13) separate occasions, ten (10) of those occurring within the past three and a half years, including minimum bid price in September 2009 and April 2011; the periodic filing obligation in November 2012; minimum stockholders' equity in November 2010; the shareholder approval rules with respect to equity compensation and private placements in November 2010; annual meeting of shareholders in January 2010 and January 2013; majority independent board of directors in November 2011; and audit committee composition in May 2010 and November 2011; vi. whether 200,000 shares of restricted common stock issued to Brendan MacMillan should have required shareholder approval; and vii. whether 185,717 shares issued to five employees as inducement compensation in November 2012, 1,034,001 shares issued to nine employees as inducement compensation in December 2012 and 239,000 shares issued to three individuals as compensation for consulting work in December 2012 required shareholder approval. The Nasdaq Hearings Panel will consider these matters in rendering a determination regarding the Company's continued listing on The Nasdaq Capital Market at a hearing scheduled for March 28, 2013. The Company has worked diligently to address the concerns raised in the staff letter, including the retention of a new management team, and at its in person meeting with the Hearings Panel on March 28 will present its proposed future operating plan that it believes addresses many of the concerns raised in the staff letter. There can be no assurance given that the Hearings Panel will grant the Company's request for continued listing, and if it does not, the Company's common stock will be moved to another exchange and delisted from The NASDAQ Capital Market. About DayStar Technologies DayStar Technologies -- http://www.daystartech.com/-- is a developer of solar photovoltaic products based upon CIGS thin film deposition technology and is currently embarked on a strategy of strategic partnerships to enter new markets within the global renewal energy industry including ownership and construction of solar and renewable power plants. DDR CORP: Fitch Assigns 'BB-' Rating to Class K Preferred Stock --------------------------------------------------------------- Fitch Ratings has assigned a 'BB-' rating to the $150 million 6.25% Class K cumulative redeemable preferred stock issued by DDR Corp. (NYSE: DDR). DDR expects to use the net proceeds from the offering to redeem a portion of its 7.375% Class H cumulative redeemable preferred stock, which consisted of $205 million of outstanding securities as of Dec. 31, 2012. Fitch currently rates DDR as follows: -- Issuer Default Rating (IDR) 'BB+'; -- $815 million unsecured revolving credit facilities 'BB+'; -- $350 million unsecured term loans 'BB+'; -- $1.8 billion senior unsecured notes 'BB+'; -- $317.9 million senior unsecured convertible notes 'BB+'; -- $405 million preferred stock 'BB-'. The Rating Outlook is Positive. Key Rating Drivers The Positive Outlook reflects Fitch's expectation that DDR's credit profile will improve to a level consistent with a 'BBB-' IDR over the next 12-24 months. The Outlook also reflects the expansion of net operating income from a prime shopping center portfolio, a granular roster of retailer tenants, and a fixed- charge coverage ratio that is expected to sustain at levels appropriate for the 'BBB-' rating due to upward leasing spreads and joint venture cash flow growth. The Outlook also takes into account the company's good access to capital on increasingly favorable terms, and adequate liquidity position including a large unencumbered pool. Leverage remains consistent with the 'BB+' rating, although Fitch anticipates that DDR's management team will continue to utilize equity issuances and retained cash flow from organic growth and redevelopment to reduce leverage to a level consistent with a 'BBB-' IDR. High-Quality Portfolio The prime portfolio, which DDR defines as assets in higher barrier-to-entry markets with strong household income profiles, represented 89.3% of total net operating income in the trailing 12 months ended fourth quarter 2012 (4Q'12), up from 81.6% at the beginning of 2010 and 70.0% at the beginning of 2009. DDR continues to acquire high quality assets on balance sheet and in joint ventures while selling lower quality assets, and Fitch expects this strategy of portfolio recycling to continue going forward. Strong Tenant Roster As of Dec. 31, 2012, top tenants by base rental revenue were Wal- Mart Stores, Inc. (3.2% of rental revenues, Fitch IDR of 'AA' with a Stable Outlook), TJX Companies (2.5%), Bed Bath & Beyond (2.3%), PetSmart (2.3%), and Kohl's Corporation (2.2%, Fitch IDR of 'BBB+' with a Stable Outlook). For 2012, weighted average lease terms were 8.2 years on new leases and 5.2 years on renewals, signaling cash flow stability absent tenant bankruptcies. Fitch's most recent U.S. Retail Stats Quarterly report noted generally steady operating and credit trends across the U.S. retail sector. Improving Fixed-Charge Coverage Fixed-charge coverage continues to improve and was 2.0x in 2012 pro forma for the class K preferred stock offering, up from 1.7x in 2011 and 1.6x in 2010. Fitch defines fixed-charge coverage as recurring operating EBITDA including Fitch's estimate of recurring cash distributions from unconsolidated entities less recurring capital expenditures and straight-line rent adjustments divided by total interest incurred and preferred stock dividends. New supply is limited, resulting in improved property-level fundamentals. Same-store net operating income (NOI) grew by 3.4% in 2012 due to continued positive leasing spreads of 7.0%, coupled with occupancy gains. Recent same-store NOI results exceeded the 10-year average of 1.5% from 2003-2012 and contributed towards the improvement in coverage. Additionally, DDR's 2012 joint venture with Blackstone Real Estate Partners VII and growth in Sonae Sierra Brasil BV Sarl distributions resulted in recurring unconsolidated entity cash flow to DDR of $37.3 million annually, more than 2x levels achieved in 2011 and bolstering corporate earnings power going forward. Fitch anticipates that low same-store NOI growth as well as incremental earnings from re-development will result in fixed- charge coverage sustaining in the low 2x range, which is appropriate for a 'BBB-' rating. In a stress case not anticipated by Fitch in which DDR's results revert to 2009 levels, coverage would fall below 2x, which would be more consistent with a 'BB+' rating. Strong Access to Capital Capital access remains solid and terms continue to improve. In June 2012, the company issued $300 million 4.625% senior unsecured notes due 2022 priced to yield 4.865% to maturity, or 325 basis points over the benchmark treasury rate and in July 2012, DDR issued $200 million 6.5% Class J preferred stock. In November 2012, DDR re-opened the 4.625% notes due 2022 and priced $150 million to yield 3.465% to maturity, or 185 basis points over the benchmark treasury rate. DDR also accessed the secured debt market and its at-the-market equity offering program in 4Q'12. In January 2013, the company refinanced its unsecured revolving credit facilities with a pricing reduction to LIBOR plus 140 basis points (a decrease of 25 basis points from the previous rate) and refinanced its secured term loan with a pricing reduction to LIBOR plus 155 basis points (a decrease of 15 basis points from the previous rate). DDR subsequently issued $150 million of 6.25% class K preferred stock. Adequate Liquidity Liquidity coverage, defined as liquidity sources divided by liquidity uses, is 1.3x for the period from Jan. 1, 2013 to Dec. 31, 2014. Liquidity sources include unrestricted cash, availability under the company's unsecured revolving credit facilities, and projected retained cash flows from operating activities after dividends and distributions. Liquidity uses include pro rata debt maturities and projected recurring capital expenditures and redevelopment expenditures. Assuming a 75% refinance rate on upcoming secured debt maturities, liquidity coverage would be strong at 3.1x. As of Dec. 31, 2012, the company had no unsecured debt maturities through May 2015. The debt maturity schedule as of Dec. 31, 2012 had 2.5% maturing in 2013, 7.7% maturing in 2014, and 20.7% in 2015. Notably, the weighted average debt duration is approximately 5 years as of Dec. 31, 2012, indicating appropriate long-term asset and liability matching. DDR also has contingent liquidity from a large unencumbered property pool that is consistent with a 'BB+' rating. Unencumbered properties valued at an 8% capitalization rate, and a 50% haircut on unencumbered land covered unsecured debt by 1.8x as of Dec. 31, 2012. A haircut on land is conservative given impairments incurred on DDR's land during previous years. The covenants in the company's debt agreements do not restrict financial flexibility. Leverage Consistent with 'BB+' IDR Net debt-to-recurring operating EBITDA was 7.4x in 4Q'12 (8.0x for FY2012) compared with 8.2x as of Dec 31, 2011 and 8.6x as of Dec. 31, 2010. Organic EBITDA growth and equity-funded acquisitions have resulted in declines in leverage. However, Fitch anticipates that favorable fundamentals and continued ATM utilization will push leverage below 7x over the next 12-to-24 months, which would be appropriate for a 'BBB-' rating. In a stress case not anticipated by Fitch in which DDR's results revert to 2009 levels, leverage would sustain above 7x, which would be more consistent with a 'BB+' rating. Preferred Stock Notching The 'BB-' rating of the preferred stock (a two-notch differential from the IDR) is consistent with Fitch's criteria for corporate entities with an IDR of 'BB+'. Based on Fitch's research on 'Treatment and Notching of Hybrids in Nonfinancial Corporate and REIT Credit Analysis,' these preferred securities are deeply subordinated and have loss absorption elements that would likely result in poor recoveries in the event of a corporate default. Positive Outlook The Positive Outlook reflects Fitch's expectation that the portfolio will remain almost entirely prime, coverage will sustain above 2.0x, leverage will sustain below 7.0x, and unencumbered asset coverage will sustain above 2.0x. Rating Sensitivities The following factors may result in an IDR upgrade to 'BBB-': -- Fitch's expectation of fixed-charge coverage sustaining above 2.0x (2012 pro forma coverage was 2.0x); -- Fitch's expectation of leverage sustaining below 7.0x (leverage was 7.4x in 4Q'12); -- Fitch's expectation of unencumbered asset coverage of unsecured debt sustaining above 2.0x (unencumbered assets - valued as 2012 unencumbered NOI divided by a stressed capitalization rate of 8% plus a 50% haircut to land - to unsecured debt was 1.8x). The following factors may have a negative impact on DDR's ratings and/or Outlook: -- Fitch's expectation of fixed-charge coverage sustaining below 1.8x; -- Fitch's expectation of leverage sustaining above 8.5x; -- Base case liquidity coverage sustaining below 1.0x. DIALOGIC INC: Incurs $4.66 Million Net Loss in Fourth Quarter ------------------------------------------------------------- Dialogic Inc. reported a net loss of $4.66 million on $37.91 million of total revenue for the three months ended Dec. 31, 2012, as compared with a net loss of $9.16 million on $50.01 million of total revenue for the same period during the prior year. For the 12 months ended Dec. 31, 2012, the Company incurred a net loss of $37.77 million on $159.96 million of total revenue, as compared with a net loss of $54.80 million on $198.08 million of total revenue during the previous year. The Company's balance sheet at Dec. 31, 2012, showed $123.38 million in total assets, $141.22 million in total liabilities and a $17.84 million total stockholders' deficit. In December 2012, the Company initiated a plan to further streamline operations and reduce operating costs, including specific workforce reductions. In the fourth quarter of 2012, the company recorded $2.3 million for severance and related charges for workforce reductions that were implemented in the first quarter of 2013. In total, the Company recorded $5.8 million for severance and related charges for the full year 2012. "Throughout 2012 we focused on transitional activities including operational, organizational, and financial initiatives that significantly improved the health of the company," said Kevin Cook, President and CEO. "We successfully realigned our product organization to focus on our most promising solutions, evolved the talent on our senior management team and Board of Directors, eliminated $22.8 million in operating expenses year over year and restructured our long-term debt." A copy of the press release is available for free at: http://is.gd/Qrbtrb About Dialogic Milpitas, Cal.-based Dialogic Inc. provides communications platforms and technology that enable developers and service providers to build and deploy innovative applications without concern for the complexities of the communication medium or network. Bankruptcy warning The Company has said in regulatory filings that, "In the event of an acceleration of our obligations under the Term Loan Agreement or Revolving Credit Agreement and our failure to pay the amounts that would then become due, the Revolving Credit Lender or Term Lenders could seek to foreclose on our assets. As a result of this, we would likely need to seek protection under the provisions of the U.S. Bankruptcy Code and/or our affiliates might be required to seek protection under the provisions of applicable bankruptcy codes. In that event, we could seek to reorganize our business, or we or a trustee appointed by the court could be required to liquidate our assets." DIOCESE OF WILMINGTON: Claim, Also Filed Against CBI, Disallowed ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware issued an order disallowing Claim No. 70 filed against the Catholic Diocese of Wilmington. The bankruptcy court authorized the trustee of the Catholic Diocese of Wilmington Inc. Qualified Settlement Fund to make no distribution to the holder of the claim from the trust. The trustee objected to the claim after she found out that a similar claim was filed by the same creditor in the bankruptcy case of The Christian Brothers' Institute and The Christian Brothers of Ireland, Inc. The case is pending before the U.S. Bankruptcy Court in Manhattan. About the Diocese of Wilmington The Diocese of Wilmington covers Delaware and the Eastern Shore of Maryland and serves about 230,000 Catholics. In 2009, the Delaware diocese became the seventh Roman Catholic diocese to file for Chapter 11 protection to deal with lawsuits for sexual abuse. Previous filings were by the dioceses in Spokane, Washington; Portland, Oregon; Tucson, Arizona; Davenport, Iowa, Fairbanks, Alaska; and San Diego, California. The Diocese filed for Chapter 11 protection (Bankr. D. Del. Case No. 09-13560) on Oct. 18, 2009. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Diocese. The Ramaekers Group, LLC, is the financial advisor. The petition says assets range $50 million to $100 million while debts are between $100 million to $500 million. The bankruptcy filing automatically stayed eight consecutive abuse trials scheduled in Delaware scheduled to begin Oct. 19, 2009. There were 131 cases filed against the Diocese, with 30 scheduled for trial, as of the bankruptcy filing. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000). DVORKIN HOLDINGS: Status Hearing on Plan Continued Until Aug. 6 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois continued until Aug. 6, 2013, at 10:30 a.m., the status hearing on Dvorkin Holdings, LLC's Chapter 11 Plan and explanatory Disclosure Statement. Dvorkin Holdings, LLC, a holding company that has interests in 40 non-debtor entities, filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 12-31336) in Chicago on Aug. 7, 2012. The Debtor disclosed $69,894,843 in assets and $9,296,750 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Jack B. Schmetterer oversees the case. Michael J. Davis, Esq., at Springer, Brown, Covey, Gaetner & Davis, in Wheaton, Illinois, served as counsel to the Debtor. The petition was signed by Loran Eatman, vice president of DH-EK Management Corp. The Bankruptcy Court in October 2012 granted the request of Patrick S. Layng, the U.S. Trustee for the Northern District of Illinois, to appoint Gus Paloian as the Chapter 11 trustee. Lender, FirstMerit Bank, N.A., also sought appointment of a chapter 11 trustee. Seyfarth Shaw LLP represents the trustee in the sale of certain assets, including real property. DYNEGY INC: Said to Seek $1.8 Billion Covenant-Light Financing -------------------------------------------------------------- Dynegy Inc. is seeking $1.8 billion of loans to refinance debt, reports Krista Giovacco at Bloomberg News, citing a person with knowledge of the matter. Credit Suisse Group AG is leading the transaction, which includes a $500 million term loan B-1 portion that will mature in two years, a $500 million revolving line of credit due in five years and an $800 million term B-2 piece that expires in seven years, said the person, who asked not to be identified because the deal is private. The transaction "refinances high-cost debt and significantly reduces our annual interest expense," Laura Hrehor, managing director of investor relations at Dynegy said in a telephone interview. "It simplifies our capital structure and removes an existing ring-fencing structure at our coal and gas plants that will free up cash that's currently restricted." Dynegy, based in Houston, is hosting a lender meeting April 2 at 2 p.m. in New York, the person said, according to the report. The loans are covenant-light, meaning they will not contain financial maintenance requirements. The company had about $1.4 billion of long-term debt as of Dec. 31, according to a March 14 regulatory filing. Dynegy's $837 million and $517 million of loans outstanding under a credit pact that expires in August 2016 pay interest at 7.75 percentage points more than the London interbank offered rate with a 1.5% minimum on the lending benchmark, according to data compiled by Bloomberg. It has a $150 million credit line that expires in January 2014 that pays interest at 3.25 percentage points more than Libor, the data show. About Dynegy Through its subsidiaries, Houston, Texas-based Dynegy Inc. (NYSE: DYN) -- http://www.dynegy.com/-- produces and sells electric energy, capacity and ancillary services in key U.S. markets. The power generation portfolio consists of approximately 12,200 megawatts of baseload, intermediate and peaking power plants fueled by a mix of natural gas, coal and fuel oil. Dynegy Holdings LLC and four other affiliates of Dynegy Inc. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-38111) on Nov. 7, 2011, to implement an agreement with a group of investors holding more than $1.4 billion of senior notes issued by Dynegy's direct wholly-owned subsidiary, Dynegy Holdings, regarding a framework for the consensual restructuring of more than $4.0 billion of obligations owed by DH. If this restructuring support agreement is successfully implemented, it will significantly reduce the amount of debt on the Company's consolidated balance sheet. Dynegy Holdings disclosed assets of $13.77 billion and debt of $6.18 billion. Dynegy Inc. on July 6, 2012, filed a voluntary petition to reorganize under Chapter 11 (Bankr. S.D.N.Y. Case No. 12-36728) to effectuate a merger with Dynegy Holdings, pursuant to Holdings' Chapter 11 plan. Dynegy Holdings and its affiliated debtor-entities are represented in the Chapter 11 proceedings by Sidley Austin LLP as their reorganization counsel. Dynegy and its other subsidiaries are represented by White & Case LLP, who is also special counsel to the Debtor Entities with respect to the Roseton and Danskammer lease rejection issues. The financial advisor is FTI Consulting. The Official Committee of Unsecured Creditors in Holdings' cases has tapped Akin Gump Strauss Hauer & Feld LLP as counsel. Dynegy Holdings and its parent, Dynegy Inc., completed their Chapter 11 reorganization and emerged from bankruptcy Oct. 1, 2012. Under the terms of the DH/Dynegy Plan, DH merged with and into Dynegy, with Dynegy, Inc., remaining as the surviving entity. Dynegy Northeast Generation, Inc., Hudson Power, L.L.C., Dynegy Danskammer, L.L.C. and Dynegy Roseton, L.L.C., won confirmation of their plan of liquidation in March 2013, allowing the former operating units of Dynegy to consummate a settlement agreement resolving some lease trustee claims and sell their facilities. EASTMAN KODAK: Seeks Approval of New ORIC Policy Terms ------------------------------------------------------ Eastman Kodak Co. seeks a court order authorizing the company to agree to the accommodations requested by Old Republic Insurance Co. as condition for the renewal of its insurance policies. The insurance firm and its Canada-based affiliate earlier agreed to continue to provide insurance coverage to Kodak for the policy year May 1, 2013-May 1, 2014 on the condition that Kodak gets approval of the accommodations requested by the firms. ORIC requested that any post-petition obligations under the policies as well as those obligations connected with future renewal of Kodak's insurance coverage be entitled to priority under section 503(b) of the Bankruptcy Code. The firm also requested that those obligations be considered as necessary expenses of Kodak's estate and paid in the ordinary course of business. ORIC also wants the automatic stay lifted without further court order to allow the firm to cancel its insurance policies for the year May 1, 2012-May 1, 2013. A court hearing is scheduled for April 17. Objections are due by April 10. 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. EDISON MISSION: Wants to Extend Lease Decision Period to July 15 ---------------------------------------------------------------- Edison Mission Energy and its affiliates seek entry of an order extending by 90 days the time period within which the Debtors must assume or reject unexpired leases of nonresidential real property through and including July 15, 2013. As of the Petition Date, the Debtors are parties to several Unexpired Leases. These include the leveraged leases with respect to the Powerton Generating Station and Units 7 and 8 of the Joliet Generating Station operated by Midwest Generation LLC (MWG), three leases of offices that manage the Debtors' regional operations, and a quarry lease pursuant to which Lincoln Stone Quarry Inc. leases certain premises located at the Joliet facility to MWG. These chapter 11 cases remain in their early stages and the initial 90 days of these chapter 11 cases have been very active. The Debtors are focused on right-sizing their balance sheets and streamlining their operations through the tools afforded under the Bankruptcy Code. At the same time, many of the Debtors' restructuring-related initiatives are still at their inception and require careful consideration and analysis. In addition, and in close coordination with the Committee and a group of certain holders of Edison Mission Energy's senior unsecured notes, the Debtors continue to pursue the settlement contemplated in that certain Transaction Support Agreement between EME, Edison International, and the members of the Noteholder Group. The TSA is subject to an ongoing investigation by the Debtors in consultation with its major stakeholders to determine whether in fact to move forward with the settlement. The Debtors' initial 120-day period to assume or reject the Unexpired Leases expires on April 16, 2013. The Debtors seek a 90-day extension of the period to continue to evaluate the Unexpired Leases and all restructuring initiatives and begin to move forward, hand in hand with their major creditor constituencies, on a path to maximize the value of the Debtors' estates. The Debtors submit that all parties will be best served by an extension, which will avoid needless distraction and provide the appropriate environment for the major stakeholders in these chapter 11 cases to work collaboratively regarding the Unexpired Leases toward a value-maximizing restructuring. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. In its schedules, Edison Mission Energy disclosed total assets of assets of $5,721,559,170 and total liabilities of $6,202,215,094 as of the Petition Date. Kirkland & Ellis LLP is serving as legal counsel to EME, Perella Weinberg Partners, LP is acting as financial advisor and McKinsey Recovery & Transformation Services U.S., LLC is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case and is represented by the law firms Akin Gump and Perkins Coie. The Committee also has tapped Blackstone Advisory Partners as investment banker and FTI Consulting as financial advisor. EDISON MISSION: Asks Court to Set June 1 as Claims Bar Date ----------------------------------------------------------- Edison Mission Energy requests that the Bankruptcy Court establish these deadlines for filing proofs of claim: * June 1, 2013, as the general deadline for Claimants (other than governmental units) to file prepetition claims; * June 15, 2013, as the deadline for governmental units to file prepetition claims; and * deadlines for Claimants to file Claims related to amended scheduled amounts or rejected executory contracts or unexpired leases. The Debtors anticipate a substantial number of holders of claims in these cases. On February 14, 2013, each of the Debtors filed schedules of assets and liabilities and statements of financial affairs. The Debtors' Schedules include over 4,800 known creditors. Accordingly, the Debtors believe that their estates will benefit from the setting of a bar date through clear procedures to promptly and accurately identify the full nature, extent, and scope of all claims that may be asserted against their estates. To accomplish this, the Debtors require complete and accurate information regarding the nature, amount, and status of all such claims. Thus, the Debtors believe it is appropriate to begin the claims analysis and reconciliation process in accordance with clearly established procedures that will limit confusion on the part of creditors and simplify the estates' claims administration process. The Debtors intend to send notice of proposed bar dates on or about five business days after the entry of the Order and to publish notice in newspapers on the same date. The Debtors propose that any Claimant who is required, but fails, to file a Proof of Claim in accordance with the Order on or before the applicable Bar Date, or by other order of the Court, will be forever barred from asserting such Claim against the Debtors. Furthermore, the Debtors' property will be forever discharged from any and all indebtedness or liability with respect to the Claim, and such holder will not (a) be treated as a creditor with respect to the Claim; (b) be permitted to vote to accept or reject any plan of reorganization filed in these chapter 11 cases; (c) participate in any distribution in these chapter 11 cases on account of such Claim; or (d) be permitted to receive further notices regarding such Claim. A copy of the motion and claims filing procedures is available for free at http://bankrupt.com/misc/em_bardate.pdf About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. In its schedules, Edison Mission Energy disclosed total assets of assets of $5,721,559,170 and total liabilities of $6,202,215,094 as of the Petition Date. Kirkland & Ellis LLP is serving as legal counsel to EME, Perella Weinberg Partners, LP is acting as financial advisor and McKinsey Recovery & Transformation Services U.S., LLC is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case and is represented by the law firms Akin Gump and Perkins Coie. The Committee also has tapped Blackstone Advisory Partners as investment banker and FTI Consulting as financial advisor. EDUCATION MANAGEMENT: Moody's Raises CFR One Notch to 'Caa1' ------------------------------------------------------------ Moody's Investors Service upgraded Education Management LLC's ("Education Management" - an indirect wholly owned subsidiary of Education Management Corporation) corporate family rating to Caa1 from Caa2, the probability of default rating to Caa1-PD from Caa2- PD, and the ratings on the senior secured bank debt to Caa1 from Caa2. The speculative grade liquidity rating was upgraded to SGL-3 from SGL-4. The ratings outlook was changed to stable from negative. The ratings upgrade reflects the company's improved debt maturity profile following the recent completion of a previously announced private debt exchange. The transaction reduced debt and removed the issue associated with the springing maturity, whereby the senior secured credit facilities would have matured on March 1, 2014 if the company had not addressed the $375 million 8.75% senior notes due 2014 by that date. As part of the exchange, consenting holders of the $375 million 8.75% senior unsecured notes due 2014 received cash consideration and new 15% senior unsecured notes due 2018 (unrated). Approximately $201 million of new notes were outstanding at closing of the debt exchange. Cash interest on the new notes accrues at a rate of 15% a year and also includes a 1% PIK component beginning in 2014 that steps-up 1% annually until maturity. The Caa1 corporate family rating captures the uncertain timing of a recovery in on-campus enrollments at The Art Institutes, which account for the bulk of the company's EBITDA. A return to positive new on-campus student enrollments for The Art Institutes is critical to restoring EBITDA growth. On-campus enrollments have generally turned positive at the company's other systems (South University/Brown Mackie/Argosy), although in combination, these account for only a small portion of EBITDA. The upgrade of the speculative grade liquidity rating reflects the company's improved debt maturity profile because of the exchange offer. The SGL-3 speculative grade liquidity rating reflects Moody's view that the company will maintain an adequate liquidity profile over the next 12 months, supported by its unrestricted cash balance, expectations for modest positive free cash flow, and available capacity under the revolving credit facility. Weighing down on the liquidity profile is the limited cushion under the financial maintenance covenants governing the credit agreement. Ratings upgraded: Corporate family rating to Caa1 from Caa2 Probability of default rating to Caa1-PD from Caa2-PD $328 million senior secured revolving credit facility due 2015 to Caa1 (LGD4, 51%) from Caa2 (LGD3, 46%) $741 million senior secured term loan due 2016 to Caa1 (LGD4, 51%) from Caa2 (LGD3, 46%) $344 million senior secured term loan due 2018 to Caa1 (LGD4, 51%) from Caa2 (LGD3, 46%) Speculative grade liquidity rating to SGL-3 from SGL-4 Rating withdrawn: $375 million 8.75% senior unsecured notes due June 1, 2014 at Ca (LGD6, 92%) Ratings Rationale: Education Management's Caa1 corporate family rating reflects Moody's expectation that leverage will increase to about 5.0 times and that EBITDA less capex to interest will hover around 1.8 times over the next 12 to 18 months (Moody's adjusted). The rating also captures declining total enrollments and profitability levels, and the ongoing challenging operating environment due to the reduced availability of student loans, negative industry press, and increased regulatory risk given the company's reliance on Title IV student loans. In addition, the company recently received a subpoena from the Division of Enforcement of the Securities and Exchange Commission ("SEC") relating to its valuation of goodwill and the bad debt allowance for student receivables. There is also the potential for increased competition from non-profit institutions. Education Management's rating derives some support from its business position as one of the largest providers of post-secondary education in the U.S., significant scale, the diversity of its academic programs, credit metrics that are generally good for the ratings category and Moody's opinion that the near-term liquidity profile is adequate. The stable outlook reflects Moody's expectation that any declines in Education Management's EBITDA for fiscal 2014 will be modest and that it will maintain an adequate liquidity profile. The ratings could be downgraded the if the business (particularly The Art Institutes new on-campus enrollments) does not turn around such that it appears likely that EBITDA will meaningfully decline in fiscal 2014 from fiscal 2013 levels. A narrowing of cushion under financial covenants, negative annual free cash flow, and/or any unfavorable outcome related to the pending SEC investigation or 2011 qui tam action could result in a downgrade. The ratings could be upgraded if Education Management demonstrates sustained improvement in new enrollment trends, increases its quarterly EBITDA on a year-over-year basis, and enhances cushion under its financial covenants, assuming pending regulatory and legal issues are resolved in a satisfactory manner. 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. Education Management LLC, based in Pittsburgh, Pennsylvania, is one of the largest providers of private post-secondary education in North America, based on student enrollment and revenue. The company reported revenues of approximately $2.6 billion for the twelve months ended December 31, 2012. ELCOM HOTEL: Creditors Have Until May 7 to File Proofs of Claim --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida established May 7, 2013, as the deadline for any individual or entity to file proofs of claim against Elcom Hotel & Spa LLC and Elcom Condominium LLC. The Court also set April 8, 2013, as the deadline to file a complaint to determine dischargeability of certain debts. About Elcom Hotel Elcom Hotel & Spa LLC and Elcom Condominium LLC sought Chapter 11 protection (Bankr. S.D. Fla. Case Nos. 13-10029 and 13-10031) on Jan. 2, 2013, with plans to sell their hotel and condominium property. Elcom Condominium owns nine of the hotel condominium units at the One Bal Harbor Resort & Spa. The resort is located on five acres of land in Bal Harbor, Florida. The building and improvements consist of 185 luxury residential condominium units and 124 hotel condominium units. Elcom Hotel owns the hotel lot. Elcom Hotel disclosed $10,378,304 in assets and $20,010,226 in liabilities as of the Chapter 11 filing. The Debtor owes OBH Funding, LLC, $1.8 million on a mortgage and F9 Properties, LLC, formerly known as ANO, LLC, $9 million on a mezzanine loan secured by a lien on the ownership interests in the project's owner. OBH Funding and ANO are owned by Thomas D. Sullivan, the manager of the Debtors. Attorneys at Kozyak Tropin & Throckmorton, P.A., serve as bankruptcy counsel to the Debtor. Duane Morris LLP is the special litigation, real estate, and hospitality counsel. Algon Capital, LLC, d/b/a Algon Group's Troy Taylor is the Debtors' Chief Restructuring Officer. EMPIRE RESORTS: Incurs $2.3 Million Net Loss in 2012 ---------------------------------------------------- Empire Resorts, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss applicable to common shares of $2.26 million on $71.97 million of net revenues for the year ended Dec. 31, 2012, as compared with a net loss applicable to common shares of $1.57 million on $70.19 million of net revenues during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $52.44 million in total assets, $27.63 million in total liabilities and $24.81 million in total stockholders' equity. A copy of the Form 10-K is available for free at: http://is.gd/HfADWx About Empire Resorts Based in Monticello, New York, Empire Resorts, Inc. (NASDAQ: NYNY) -- http://www.empireresorts.com/-- owns and operates Monticello Casino & Raceway, a video gaming machine and harness racing track and casino located in Monticello, New York, 90 miles northwest of New York City. EXECUTIVE CENTER: Court Dismisses Chapter 11 Case ------------------------------------------------- The Hon. Victoria S. Kaufman of the U.S. Bankruptcy Court for the Central District of California has granted Executive Center of Simi Valley LLC's motion for dismissal of its Chapter 11 case. As reported by the Troubled Company Reporter on Jan. 28, 2013, the case was filed to put a stop a state court action seeking to appoint a receiver on properties commonly known as 30077 and 30101 Agoura Court, Agoura Hills CA 91301. The Agoura properties were foreclosed upon Nov. 2, 2012, secured by creditor Platinum Courtyard, LLC. The Debtor still owns 1445 East Los Angeles Ave., Simi Valley CA 93065. The Debtor has never missed payment on that property. The Debtor has 471,782.37 in unsecured debt and said it can handle on its own. About Executive Center Executive Center of Simi Valley LLC, which operates the Agoura Hills Corporate Center, filed for Chapter 11 (Bankr. C.D. Cal. Case No. 12-11527) on Feb. 16, 2012. Judge Victoria S. Kaufman presides over the case. Janet A. Lawson, Esq., in Ventura, California, serves as the Debtor's counsel. The Debtor scheduled $29,576,254 in assets and $19,093,382 in debts. The petition was signed by Arnold A. Klein, managing partner. FISKER AUTO: Said to Hire Kirkland, Explore Bankruptcy Options -------------------------------------------------------------- Emily Glazer, Sharon Terlep and Mike Ramsey, writing for The Wall Street Journal, report that people familiar with the matter said Fisker Automotive Inc. has hired restructuring lawyers at Kirkland & Ellis LLP to prepare for a possible bankruptcy filing, though no final decisions have been made. According to WSJ, Fisker faces an April 22 deadline to make a loan payment to the U.S. Department of Energy. Fisker currently carries about $192 million in debt under the DOE's Advanced Technology Vehicles Manufacturing Loan Program. WSJ says Fisker and the DOE have declined to reveal the precise amount Fisker owes on April 22. Fisker, WSJ relates, furloughed 200 U.S. workers in late March for a limited time to conserve cash. WSJ says a Fisker spokesman declined to comment on Kirkland & Ellis. WSJ says a DOE spokesman said the agency "is committed to the best outcome for taxpayers." Fisker's equipment and property are pledged as collateral on its loan, so the U.S. government would likely control the company in the event of a bankruptcy-protection filing. According to WSJ, people familiar with the matter have said Fisker's talks with Chinese auto makers, Zhejiang Geely Holding Group and Dongfeng Motor Group Co., have hit rough patches of late because of Fisker's desire to try to move forward with U.S. production at a former General Motors Co. plant in Delaware that Fisker now owns. The company is still reaching out to investment firms to try and find a buyer or additional money, said a person familiar with Fisker's plans. WSJ also relates people familiar with the matter said the Department of Energy has retained investment bank Houlihan Lokey Inc. to track the company's fundraising efforts. The report also notes Fisker in December 2012 said it was working with Evercore Partners Inc. to find potential investors or partners to raise money. Fisker later hired Huron Consulting Group Inc. to help manage day-to-day operations during negotiations, including one of its own serving as chief administrative officer. Anaheim, Calif.-based Fisker is the maker of a $100,000 sports car. It was funded in part by an Obama administration program to promote clean-energy vehicles. FREESEAS INC: Issues Add'l 390,000 Settlement Shares to Hanover --------------------------------------------------------------- The Supreme Court of the State of New York, County of New York, entered a revised order on March 20, 2013, approving, among other things, the fairness of the terms and conditions of an exchange pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended, in accordance with a stipulation of settlement between FreeSeas Inc., and Hanover Holdings I, LLC, in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 152140/2013. Hanover commenced the Action against the Company on March 8, 2013, to recover an aggregate of $1,264,656 of past-due accounts payable of the Company, plus fees and costs. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on March 20, 2013. Pursuant to the terms of the Settlement Agreement approved by the Order, on March 20, 2013, the Company issued and delivered to Hanover 350,000 shares of the Company's common stock, $0.001 par value. The Settlement Agreement provides that the Initial Settlement Shares will be subject to adjustment on the trading day immediately following the Calculation Period to reflect the intention of the parties that the total number of shares of Common Stock to be issued to Hanover pursuant to the Settlement Agreement be based upon a specified discount to the trading volume weighted average price of the Common Stock for a specified period of time subsequent to the Court's entry of the Order. Hanover demonstrated to the Company's satisfaction that it was entitled to receive 390,000 Additional Settlement Shares, and that the issuance of those Additional Settlement Shares to Hanover would not result in Hanover exceeding the beneficial ownership limitation. Accordingly, on March 21, 2013, the Company issued and delivered to Hanover 390,000 Additional Settlement Shares pursuant to the terms of the Settlement Agreement approved by the Order. About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. As reported in the Troubled Company Reporter on July 18, 2012, Ernst & Young (Hellas) Certified Auditors Accountants S.A., in Athens, Greece, expressed substantial doubt about FreeSeas' ability to continue as a going concern, following its audit of the Company's financial statements for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. "In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements with banks." The Company's balance sheet at June 30, 2012, showed US$120.8 million in total assets, US$104.1 million in total current liabilities, and shareholders' equity of US$16.7 million. FREDERICK'S OF HOLLYWOOD: Closes $10-Mil. Pref. Stock Offering -------------------------------------------------------------- Frederick's of Hollywood Group Inc. has closed a $10 million Series B Convertible Preferred Stock financing with Five Island Asset Management LLC, a subsidiary of Harbinger Group Inc. The Series B preferred stock is convertible into an aggregate of 40,000,000 shares of the Company's common stock at a conversion price of $0.25 per share, subject to adjustment. Dividends on the Series B preferred stock are payable in cash at an annual rate of 9%, or, at the Company's discretion, payable in additional shares of Series B preferred stock at an annual rate of 12%. The Company also issued to the Purchaser warrants to acquire up to an aggregate of 10,246,477 shares of common stock at exercise prices ranging from $0.01 to $1.21 per share. The Series B preferred stock ranks senior to the Company's Series A Convertible Preferred Stock. The holder of the Series A Convertible Preferred Stock waived its anti-dilution adjustment otherwise applicable as a result of this transaction. Under the terms of the agreement, the Purchaser is entitled to appoint 35%, or not less than two individuals to serve on the Company's Board of Directors. Upon full conversion and exercise of all preferred stock, the Purchaser would own a majority of the Company's common stock and be entitled to appoint a majority of the Company's Board of Directors. The Company will formally announce the appointment of the new board members in the coming weeks. "This $10 million capital infusion will play an important role in stabilizing our business and will allow us to improve sales by maintaining appropriate inventory levels," stated Thomas Lynch, the Company's Chairman and Chief Executive Officer. "We are excited to have received this vote of confidence from Five Island Asset Management, as they share the same long-term vision of what Frederick's of Hollywood means to the market. We are looking forward to sharing that vision with our current and future customers domestically and internationally." Further details concerning the transaction and the terms of the preferred stock is available for free at http://is.gd/dGkm4I About Frederick's of Hollywood Frederick's of Hollywood Group Inc. (NYSE Amex: FOH) -- http://www.fredericks.com/-- through its subsidiaries, sells women's intimate apparel, swimwear and related products under its proprietary Frederick's of Hollywood brand through 122 specialty retail stores, a world-famous catalog and an online shop. Frederick's of Hollywood sought bankruptcy in July 10, 2000. On Dec. 18, 2002, the court approved the company's plan of reorganization, which became effective on Jan. 7, 2003, with the closing of the Wells Fargo Retail Finance exit financing facility. The Company incurred a net loss of $6.43 million for the year ended July 28, 2012, compared with a net loss of $12.05 million for the year ended July 30, 2011. The Company's balance sheet at Jan. 26, 2013, showed $40.27 million in total assets, $55.83 million in total liabilities and a $15.56 million total shareholders' deficiency. FREDERICK'S OF HOLLYWOOD: Incurs $9.8 Million Net Loss in Q2 ------------------------------------------------------------ Frederick's of Hollywood Group Inc. reported a net loss of $9.87 million on $24.28 million of net sales for the three months ended Jan. 26, 2013, as compared with a net loss of $3.53 million on $32.52 million of net sales for the three months ended jan. 28, 2012. For the six months ended Jan. 26, 2013, the Company incurred a net loss of $14.95 million on $46.74 million of net sales, as compared with a net loss of $5.87 million on $60.88 million of net sales for the six months ended Jan. 28, 2012. The Company's balance sheet at Jan. 26, 2013, showed $40.27 million in total assets, $55.83 million in total liabilities and a $15.56 million total shareholders' deficiency. "We are disappointed by the operational and financial issues that have held us back from reconnecting with our customers, which led to sales results that were counter to much of the retail sector. Therefore, we have implemented a plan to refocus on our lingerie products. This plan included the $10 million capital infusion from Five Island Asset Management LLC, a subsidiary of Harbinger Group Inc., which was announced just last week. This capital infusion will play an important role in stabilizing our business and will allow us to improve sales by maintaining appropriate inventory levels in the categories our customers are looking for. We are continuing to balance our revenues and expenses, including having me assume the responsibilities of President and COO," stated Mr. Thomas Lynch, the Company's Chairman and CEO. A copy of the press release is available for free at: http://is.gd/W7t3ns Effective March 15, 2013, Don Jones was terminated without cause by the Company from his position as President and Chief Operating Officer. Thomas Lynch, the Company's Chairman and Chief Executive Officer, will assume Mr. Jones' responsibilities on an interim basis. On March 21, 2013, the Company and Mr. Jones entered into a Separation Agreement and General Release. In consideration of his execution of a general release of claims in favor of the Company, Mr. Jones is entitled to receive severance in the amount of $200,000 (six months' base salary), which will be paid in accordance with the Company's customary payroll procedures, subject to applicable deductions and withholdings, beginning on the first payroll date following the expiration of the Revocation Period. In addition, consistent with the terms of Mr. Jones's prior agreements with the Company, (i) 150,000 stock options with an exercise price of $0.62 per share are or will become exercisable as scheduled and will remain exercisable until September 7, 2021, (ii) 28,000 stock options with an exercise price of $0.40 per share will be exercisable for a period of three (3) months after the Termination Date and (iii) 92,000 shares of restricted stock issued to Mr. Jones will remain or will become vested as scheduled. About Frederick's of Hollywood Frederick's of Hollywood Group Inc. (NYSE Amex: FOH) -- http://www.fredericks.com/-- through its subsidiaries, sells women's intimate apparel, swimwear and related products under its proprietary Frederick's of Hollywood brand through 122 specialty retail stores, a world-famous catalog and an online shop. Frederick's of Hollywood sought bankruptcy in July 10, 2000. On Dec. 18, 2002, the court approved the company's plan of reorganization, which became effective on Jan. 7, 2003, with the closing of the Wells Fargo Retail Finance exit financing facility. The Company incurred a net loss of $6.43 million for the year ended July 28, 2012, compared with a net loss of $12.05 million for the year ended July 30, 2011. FRONTIER COMMS: Moody's Rates New US$750MM Sr. Notes Issue 'Ba2' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 (LGD 4-56%) rating to Frontier Communications Corporation's proposed $750 million new senior unsecured notes due 2024. The proceeds of the notes along with cash on hand will be used to redeem existing debt. The outlook is stable. Issuer: Frontier Communications Corporation Assignments: US$750M Senior Unsecured Regular Bond/Debenture, Assigned Ba2 (LGD4, 56 %) Rating Rationale Frontier's Ba2 corporate family rating reflects its large scale of operations, its strong and predictable cash flows and management's stated commitment to de-lever its balance sheet, demonstrated by its recent dividend reduction and meaningful debt reduction thus far in 2013. These factors are offset by the company's challenged competitive position versus cable operators, its declining revenues and the possibility that the company may not have the flexibility to continue to adequately invest in network modernization. Moody's expects significant debt repayment for the full year 2013, resulting in leverage falling slightly below 4.0x (Moody's adjusted) by year end. Moody's projects that Frontier's leverage will remain in the mid-to-high 3x range into 2014 despite some modest debt reduction unless the company can reverse the decline in revenue and begin to recapture market share. Moody's expects Frontier to generate over $250 million of annual free cash flow over the next few years and expects the company to use the vast majority of its free cash flow to reduce debt. However, Frontier's credit profile could weaken if future free cash flows decline due to revenue erosion, margin weakness, higher cash taxes or pension contributions. Negative rating pressure could develop if Frontier's revenue trajectory does not improve, which would likely result in weaker free cash flow and leverage remaining in the high 3x range. Also the ratings could be lowered if the Company's liquidity becomes strained or if a material amount of free cash flow is directed to anything but debt reduction. Positive rating momentum could develop if Frontier's financial profile strengthens as evidenced by margin expansion and revenue growth. Moody's could upgrade Frontier's rating if the Company's leverage (total adjusted debt-to-EBITDA) could be sustained under 3x and its free cash flow increases to mid-single digit percentage of its total debt. The principal methodology used in this rating was Global Telecommunications Industry 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. Frontier Communications Company is an Incumbent Local Exchange Carrier headquartered in Stamford, CT. Following the Company's merger with a company spun out of Verizon Communications' northern and western operations in a reverse Morris Trust transaction, Frontier became the fifth largest wireline telecommunications company in the US. GLOBAL FOOD: Incurs $3.1 Million Net Loss in 2012 ------------------------------------------------- Global Food Technologies, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $3.07 million on $377,036 of sales for the year ended Dec. 31, 2012, as compared with a net loss of $3.68 million on $133,078 of sales during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $1.50 million in total assets, $4.30 million in total liabilities, all current, and a $2.80 million total stockholders' deficit. Squar, Milner, Peterson, Miranda & Williamson, LLP, in Newport Beach, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred a significant accumulated deficit through Dec. 31, 2012, has significant negative cash flow from operating activities for the year ended Dec. 31, 2012, and has negative working capital at Dec. 31, 2012. These factors raise substantial doubt about the Company's ability to continue as a going concern. A copy of the Form 10-K is available for free at: http://is.gd/igYSXE About Global Food Headquartered in Hanford, California, Global Food Technologies, Inc., is a life sciences company focused on food safety processes for the food processing industry by using its proprietary scientific processes to substantially increase the shelf life of commercially packaged seafood and to make those products safer for human consumption. The Company has developed a process using its technology called the "iPuraT Food Processing System". The System is installed in processor factories in foreign countries with the product currently sold in the United States. GUITAR CENTER: Names Mike Pratt New Chief Executive Officer ----------------------------------------------------------- Guitar Center, Inc., announced that Mike Pratt has been appointed Chief Executive Officer and a member of the Company's Board of Directors effective April 1, 2013. Mr. Pratt succeeds Marty Hanaka, the Company's Interim Chief Executive Officer, who will remain on the Board and assist in the transition. Since 2008, Mr. Pratt has served as President and Chief Operating Officer of leading Canadian consumer electronics retailers Best Buy Canada and Future Shop. He began his career more than 20 years ago with Future Shop, which was acquired by Best Buy Canada in 2001. During Pratt's tenure, Best Buy Canada grew from 165 to 275 stores and greatly expanded its e-commerce activities and web presence. "There's no question that Guitar Center is North America's leader in musical instruments and related products, and there's a long legacy of success that I greatly admire," said Pratt. "Over the last few months, I've had the chance to look at the Company even more closely, and I came away very impressed with its dynamic, multi-format business model with strong in-store and web-based brands. I'm excited about this opportunity and looking forward to working with Guitar Center's management team and dedicated associates to build the business at retail and online." "Mike is a proven leader in the retail industry with an impressive track record of success," stated Matt Levin, a Managing Director at Bain Capital Partners, a leading global private investment firm which owns the business through an affiliate. "We are thrilled to attract an executive of his caliber to lead Guitar Center. We also want to thank Marty Hanaka for his efforts in providing valuable leadership continuity during this interim period." Pursuant to his employment agreement, Mr. Pratt will receive a base annual salary of $750,000, subject to increase by the Board of Directors of the Company in its discretion. Mr. Pratt will be eligible to earn an annual incentive bonus at a target of 100% of his annual base salary, and a maximum bonus potential of 200% of base salary, based on performance criteria established by the Board for each fiscal year during his employment. Mr. Pratt will also receive a signing bonus of $100,000 and an inducement bonus of up to $296,500 to compensate him for recoupable incentive compensation for the completed 2012 fiscal year at his former employer. Mr. Pratt will receive no additional compensation for his service as a director of the Company. About Guitar Center Guitar Center, Inc., headquartered in Westlake Village, Cal., is the largest musical instrument retailer with 312 stores and a direct response segment, which operates its Web sites. It operates three distinct musical retail business - Guitar Center (about 70% of revenue), Music & Arts (about 7% of revenue), and Musician's Friend (its direct response subsidiary with 24% of revenue). Total revenue is about $2 billion. The Company reported a net loss of $236.94 million in 2011, a net loss of $56.37 million in 2010, and a net loss of $189.85 million in 2009. The Company's balance sheet at June 30, 2012, showed $1.82 billion in total assets, $1.94 billion in total liabilities and a $122.39 million total stockholders' deficit. Bankruptcy Warning The Company said in its annual report for the year ended Dec. 31, 2011, that its ability to make scheduled payments or to refinance its debt obligations depends on the Company and Holdings' financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond its control. The Company cannot provide any assurance that it will maintain a level of cash flows from operating activities sufficient to permit it to pay the principal, premium, if any, and interest on its indebtedness. If the Company cannot make scheduled payments on its debt, the Company will be in default and, as a result: * its debt holders could declare all outstanding principal and interest to be due and payable; * the lenders under the Company's senior secured credit facilities could terminate their commitments to lend the Company money and foreclose against the assets securing their borrowings; and * the Company could be forced into bankruptcy or liquidation. * * * As reported in the Troubled Company Reporter on Feb. 28, 2011, Moody's Investors Service affirmed Guitar Center, Inc.'s Caa2 Corporate Family Rating and the $622 million existing term loan rating of Caa1 due October 2014. The Probability of Default Rating was revised to Caa2/LD from Caa2 while the Speculative Grade Liquidity assessment was changed to SGL-2 from SGL-3. The rating outlook remains stable. The Caa2/LD Probability of Default rating reflects Moody's view that the extended deferral of interest on the Holdco notes constitutes a distressed exchange under Moody's definition and also anticipates that additional exchanges of this nature are possible over the near term. The Limited Default designation was prompted by the company's executed amendment of the HoldCo notes, which allows for a deferral of 50% of the interest payments for 18 months. Moody's views this as a distressed exchange that provides default avoidance. This LD designation applies to the proposed follow-on amendment to defer the HoldCo note interest payments by another six months. Subsequent to the actions, Moody's will remove the LD designation and the PDR will be Caa2 going forward. HARVEST SHARING: American Produce's Collection Suit Goes to Trial ----------------------------------------------------------------- Colorado District Judge Philip A. Brimmer denied the Motion for Summary Judgment filed by American Produce, LLC, in its lawsuit against Harvest Sharing Inc., and Harvest's officers. Judge Brimmer said there are genuine disputes of material fact that precludes summary judgment in favor of American Produce. Denver-based American Produce sued Harvest Sharing, Inc., to collect $26,170 in payment on perishable goods sold. William R. McKnight was a member and president of Harvest's board of directors. The parties dispute whether Diane McKnight was an officer of Harvest during the relevant period. Ms. McKnight had the authority to issue checks on behalf of the company and she once signed a credit application on behalf of Harvest. Harvest is a commission merchant as that term is defined by the Perishable Agricultural Commodities Act. Harvest functioned as a commission merchant pursuant to a license issued by the Secretary of Agriculture. The lawsuit is, AMERICAN PRODUCE, LLC, a limited liability company, Plaintiff, v. HARVEST SHARING, INC., d/b/a FOOD SHARING AMERICA, a Colorado corporation, WILLIAM R. MCKNIGHT, an individual, DIANE K. MCKNIGHT, an individual, Defendants, Civil Action No. 11-cv-00241-PAB-KLM (D. Colo.). A copy of the Court's March 27, 2013 Order is available at http://is.gd/a1UWskfrom Leagle.com. On Jan. 20, 2011, Harvest filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Colorado. HEALTHEAST CARE: Moody's Affirms Ba1 Rating on $202MM Bonds ----------------------------------------------------------- Moody's Investors Service affirmed the Ba1 long-term bond rating assigned to HealthEast Care System's US$202 million of outstanding bonds issued by the St. Paul Housing & Redevelopment Authority. The outlook remains stable. Rating Rationale The affirmation of the Ba1 rating and maintenance of the stable outlook reflect stabilized financial performance in the past two fiscal years, growth in cash and investments, leading market share in the primary service area, and HealthEast's conservative capital structure. These positive factors are challenged by cash balances that remain very light, relatively weak debt coverage measures, and some variability in patient volume trends. The installation of a new electronic medical record system is expected to result in a reduction in cash in fiscal year 2014 and the system-wide implementation of the new EMR technology also poses operational risks for HealthEast. Strengths - Financial performance in FY 2012 was consistent with the prior year with a 2.3% operating margin and 6.6% operating cash flow margin (bad debt reflected as a reduction from revenue); year-to- date FY 2013 performance is strong and management has budgeted a 3.0% operating margin in FY 2013, which Moody's believes is achievable given the recent favorable trends in operating profitability - HealthEast has maintained its leading market share in its primary service area (32.5%); the market is highly consolidated among payers, providers, and physicians, and Minnesota is a Certificate of Need (CON) state, which creates a barrier to entry in the healthcare marketplace - New Chief Executive Officer (CEO) brings renewed focus to improving operating results, as the system moves forward with a "lean" approach to remove costs and create value; multi-year projections show further improvement to the operating margin and balance sheet metrics - Debt is all fixed rate with no derivatives Challenges - Low levels of liquidity, as evidenced by 53 days cash on hand and 46% cash-to-debt at fiscal yearend (FYE) 2012; balance sheet measures are expected to improve by FYE 2013, but decline again when the system installs a new EMR in 2014 - Leveraged balance sheet evidenced by low cash-to-debt ratio, high adjusted debt-to-cash flow (5.6 times), weak adjusted maximum annual debt service (MADS) coverage (1.99 times), and high debt- to-capitalization ratio (60.1%) in FY 2012; when converting non- cancelable operating leases to a debt-like equivalent, leverage is increased by an additional $110.9 million and cash-to- comprehensive debt declines to 31.0% - While major bricks and mortar construction is complete on HealthEast's campuses, the system will be investing heavily in a new EMR that will result in an increase in debt and decline in cash; the entire cost of implementation will total $145 million to be funded partially through debt (up to $60 million) and cash flow; Moody's notes that the implementation of this new technology also poses operational risks in terms of possible volume declines and higher than anticipated expenses of training staff on the IT platform - Inpatient volumes declined in FY 2012 by 1.4%, although observation stays were up by 4.2% and overall combined volumes (inpatient admissions and observations stays) were essentially flat; total surgical volumes were flat in FY 2012 after several years of declines Outlook The stable outlook reflects Moody's belief that the system's financial performance and balance sheet measures will not be materially affected by the EMR implementation. What Could Make The Rating Go Up Substantial growth in unrestricted cash and investments, while maintaining or improving upon operating profits and debt coverage measures. What Could Make The Rating Go Down Material decline in cash balances, deterioration in operating performance, shift in volume and change in competitive position, major operational disruptions associated with the EMR implementation. The principal methodology used in this rating was Not-For-Profit Healthcare Rating Methodology published in March 2012. HERCULES OFFSHORE: Fleet Status Report as of March 21 ----------------------------------------------------- Hercules Offshore, Inc., posted on its Web site at http://www.herculesoffshore.com/a report entitled "Hercules Offshore Fleet Status Report". The Fleet Status Report includes the Hercules Offshore Rig Fleet Status (as of March 21, 2013), which contains information for each of the Company's drilling rigs, including contract dayrate and duration. The Fleet Status Report also includes the Hercules Offshore Liftboat Fleet Status Report, which contains information by liftboat class for February 2013, including revenue per day and operating days. The Fleet Status Report is available for free at http://is.gd/RIxmt2 About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. Hercules incurred a net loss of $127 million in 2012, a net loss of $76.12 million in 2011, and a net loss of $134.59 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed $2.01 billion in total assets, $1.13 billion in total liabiities, and $882.76 million in stockholders' equity. * * * The Troubled Company Reporter said on March 23, 2012, that Moody's Investors Service upgraded Hercules Offshore, Inc., Corporate Family Rating (CFR) and Probability of Default Rating (PDR) to B3 from Caa1 contingent upon the completion of its recently announced recapitalization plan. Hercules' B3 CFR reflects its jackup fleet, which consists primarily of standard specification rigs with an average age of about 30 years. Its rigs are geographically concentrated in the Gulf of Mexico (GoM), a market that experienced a slow-down after the Macondo well incident. However, over the last year a pick-up in permitting and activity levels in the GoM, has led to higher dayrates. For Hercules, the improving market conditions have stabilized its cash flow from operations, which are expected continue to improve for at least the next 18 to 24 months as old contracts roll into new contracts with higher dayrates. These improving market conditions support the decision to upgrade Hercules' CFR at this time. As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based Hercules Offshore Inc. to 'B' from 'B-'. "The upgrade reflects the improving market conditions in the Gulf of Mexico and our expectations that Hercules' fleet will continue to benefit," said Standard & Poor's credit analyst Stephen Scovotti. HRK HOLDINGS: Court Extends Plan Filing Period Until April 23 ------------------------------------------------------------- The Hon. K. Rodney May of the U.S. Bankruptcy Court for the Middle District of Florida has extended, at the behest of HRK Holdings, LLC, and HRK Industries, LLC, the exclusive periods during which the Debtors have to file a Chapter 11 Plan and disclosure statement until April 23, 2013, and to solicit acceptances of that plan until June 22, 2013. The Debtors said that they have several projects pending that won't be concluded prior to Feb. 22, 2013, that have a direct impact on a plan of reorganization, including, among other things: a. working with engaged investment brokers and potential purchasers in negotiating the terms of additional property sales. The Debtors have two letters of intent from prospective purchasers and are currently negotiating asset purchase agreements for the sale of additional property; and b. working with engaged investment brokers in negotiations with potential investment partners to recapitalize the Debtor's assets. The Debtors sought the extension of the Exclusive Periods to allow them the time necessary to focus on the Projects. The Debtors, together with their investment brokers, are negotiating with a number of potential purchasers. The Debtors said that the outcome of these negotiations will impact the Debtors' strategy for exiting the Chapter 11 cases. According to the Debtors, their attention to the projects at this stage in the cases is beneficial to the estates by increasing income and stability of the Debtors' operations. About HRK Holdings Based in Palmetto, Florida, HRK Holdings LLC owns roughly 675 contiguous acres of real property in Manatee County, Florida. Roughly 350 acres of the property accommodates a phosphogypsum stack system, called Gypstaks, a portion of which was used as an alternate disposal area for the management of dredge materials pursuant to a contract with Port Manatee and as authorized under an administrative agreement with the Florida Department of Environmental Protection. The remaining acres of usable land are either leased to various tenants or available for sale. HRK Industries holds various contracts and leases associated with the Debtors' property. HRK Holdings and HRK Industries LLC filed for Chapter 11 protection (Bankr. M.D. Fla. Case Nos. 12-09868 and 12-09869) on June 27, 2012. Judge K. Rodney May oversees the case. Barbara A. Hart, Esq., at Stichter, Riedel, Blain & Prosser, P.A., represents the Debtors. HRK Holdings disclosed $33,366,529 in assets and $26,092,559 in liabilities in its revised schedules. According to the Debtors, the bankruptcy filing was necessitated by the immediate need to sell a portion of the remaining property to create liquidity for (a) funding the urgent management of the site-related environmental concerns; the benefit of creditors; funding a litigation filed by the Debtors; and funding of expenses related to additional sales of the remaining property. IDEARC INC: Trustee Says Verizon Should Be Liable for $2.85-Bil. ---------------------------------------------------------------- Chris Dolmetsch and Tiffany Kary, writing for Bloomberg News, report that Verizon Communications Inc., the second-biggest U.S. telephone company, was sued for $2.85 billion in debt and interest stemming from its relationship with bankrupt directory company Idearc. According to the report, the suit involves the non-payment of debt evidenced by 8% senior notes due 2016 that were issued pursuant to an agreement between Idearc and U.S. Bank N.A. as indenture trustee dated November 2006, according to court filings. The trustee filed the suit in New York State Supreme Court in Manhattan March 29. The report recounts that Verizon spun off Idearc, its directory business, in 2006. Creditors contend the spinoff, designed to generate $9.5 billion for Verizon, left Idearc with so much debt it was insolvent and destined to collapse. It filed for bankruptcy 28 months after the spinoff. "Because Verizon never properly incorporated Idearc (for which it acted as promoter in arranging the indebtedness and was a direct beneficiary thereof) Verizon is liable for the indebtedness at this time," the trustee said in the March 29 court filing. A federal judge in Dallas in January said Verizon would probably win a lawsuit over the 2006 spinoff of Idearc, rejecting claims that the business was insolvent at the time of the deal. Idearc had a value of at least $12 billion, and the "only credible evidence" shows the business was solvent when it was spun off, U.S. District Judge A. Joe Fish in Dallas said in the January decision. Judge Fish ordered U.S. Bancorp, which sued Verizon on behalf of Idearc creditors, to explain why its claims were viable following the ruling on valuation. The judge said it "appears" creditors will be unable to prove their case "so that all of the plaintiff's remaining legal claims will fail." The case is U.S. Bank National Association, solely in its capacity as indenture trustee v. Coticchio, 651132/2013, New York State Supreme Court (Manhattan). About Idearc Inc. Headquartered in D/FW Airport, Texas, Idearc, Inc., now known as SuperMedia Inc., is the second largest U.S. yellow pages publisher. Idearc was spun off from Verizon Communications, Inc. Idearc and its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 09-31828) on March 31, 2009. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represented the Debtors in their restructuring efforts. The Debtors tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on the official committee of unsecured creditors. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. Idearc completed its debt restructuring and its plan of reorganization became effective as of Dec. 31, 2009. In connection with its emergence from bankruptcy, Idearc changed its name to SuperMedia Inc. Under its reorganization, Idearc reduced its total debt from more than $9 billion to $2.75 billion of secured bank debt. SuperMedia and three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10545) on March 18, 2013, to effectuate a merger of equals with Dex One Corp. INFUSION BRANDS: S. Stastney Replaces R. DeCecco as Chairman ------------------------------------------------------------ The Board of Directors of Infusion Brands International, Inc., accepted Robert DeCecco III's resignation as Chairman on Feb. 18, 2013. Mr. DeCecco remains the Company's current President, Chief Executive Officer, and a Director. There were no disagreements or disputes between Mr. DeCecco and the Company which led to the resignation. On Feb. 18, 2013, the Board accepted Mary B. Mather's resignation as Secretary and appointed Mrs. Mather as the Company's Treasurer. Mrs. Mather remains the Company's current Chief Financial Officer. There were no disagreements or disputes between Mrs. Mather and the Company which led to the resignation. On Feb. 18, 2013, the Board appointed Allen Clary as Secretary of the Company. Mr. Clary currently serves as the Company's Chief Operating Officer and has served in this position since June 2011. He has also served in this capacity from July 2009 to May 2010 before pursuing and founding the personal productivity website jibidee.com. From 2005 to 2009, Allen held Senior Manager positions with Ideal Consulting and Tribridge, Inc., and was a General Manager of Fortis Software from 2003 to 2005. Mr. Clary holds an engineering degree from the University of Florida and an M.B.A. from the University of South Florida where he serves on the Advisory Board to the USF Center for Entrepreneurship and to the Tampa Bay Web Venture Entrepreneurs organization. On Feb. 18, 2013, the Board appointed Shad Stastney as Chairman and Chief Strategy Officer of the Company. In conjunction with his appointment, he entered into an at-will employment relationship with the Company. In consideration for his services, he will receive a base salary of $175,000 and will be recommended for grants of stock options of the Company. Payment of this base salary is deferred until, and the date on which such options are to be awarded is, the later of (i) January 1, 2014, or (ii) the date on which the Company's securities held by the Company's principal shareholder, Vicis Capital Master Fund, have been redeemed in full. Mr. Stastney has executed a standard and customary non-disclosure and non-competition agreement in conjunction with the employment arrangement. Mr. Stastney is the Chief Operating Officer and Head of Research for Vicis Capital, LLC, a company he jointly founded in 2004. Mr. Stastney also jointly founded Victus Capital Management LLC in 2001. From 1998 through 2001, Mr. Stastney worked with the corporate equity derivatives origination group of Credit Suisse First Boston, eventually becoming a Director and Head of the Hedging and Monetization Group, a joint venture between derivatives and equity capital markets. In 1997, he joined Credit Suisse First Boston's then-combined convertible/equity derivative origination desk. From 1994 to 1997, he was an associate at the law firm of Cravath, Swaine and Moore in New York, in their tax and corporate groups, focusing on derivatives. He graduated from the University of North Dakota in 1990 with a B.A. in Political Theory and History, and from the Yale Law School in 1994 with a J.D. degree focusing on corporate and tax law. Mr. Stastney is a director of China Hydro (NYSE:CHC), Master Silicone Carbide (PINK:MAST), China New Energy (PINK:CNER), Zurvita Holdings, Inc. (PINK:ZRVT), OptimizeRX (PINK:OPRX), Ambient (NASDAQ:AMBT), and netTALK.com (PINK:NTLK). Mr. Stastney is a member of Vicis Capital, LLC, the investment advisor to Vicis Capital Master Fund, which is the beneficial owner of approximately 91.1% of the Company's issued and outstanding common stock. About Infusion Brands Infusion Brands International, Inc. is a global consumer products company. Its wholly owned operating subsidiary, Infusion Brands, Inc. specializes in building and marketing profitable brands through international direct-to-consumer channels of distribution. On Dec. 16, 2010, as part of its quasi-reorganization in order to change its business model from that of an acquisition strategy to a singular operating model as a consumer products company which builds and markets brands internationally through direct-to- consumers channels of distribution, OmniReliant Holdings, Inc. entered into an agreement and plan of merger with Infusion Brands International, Inc., a Nevada corporation and the Company's wholly-owned subsidiary. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, the Company merged with and into Infusion Brands International, Inc., solely to effect a name change of the Company. Meeks International LLC, in Tampa, Florida, expressed substantial doubt about the Company's ability to continue as a going concern following the financial results for the year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred significant recurring losses from operations and is dependent on outside sources of financing for continuation of its operations and management is restructuring and redirecting its operating initiatives that require the use of its available capital resources. The Company reported a net loss of $6.94 million on $17.94 million of product sales in 2011, compared with a net loss of $16.07 million on $7.17 million of product sales in 2010. The Company's balance sheet at Sept. 30, 2012, showed $8.28 million in total assets, $11.87 million in total liabilities, $37.88 million in redeemable preferred stock, and a $41.47 million total shareholders' deficit. INOVA TECHNOLOGY: Amends Jan. 31 Quarterly Report ------------------------------------------------- Inova Technology Inc. has amended its quarterly report on Form 10-Q for the quarter ended Jan. 31, 2013, that was originally filed with the U.S. Securities and Exchange Commission on March 18, 2013. The Amendment was filed to submit Exhibit 101. In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, new certifications by the Company's principal executive officer and principal financial officers are filed as exhibits. A copy of the Amended Form 10-Q is available for free at: http://is.gd/qq3b05 About Inova Technology Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA) -- http://www.inovatechnology.com/-- through its subsidiaries, provides information technology (IT) consulting services in the United States. It also manufactures radio frequency identification (RFID) equipment; and provides computer network solutions. The company was formerly known as Edgetech Services Inc. and changed its name to Inova Technology, Inc., in 2007. The Company reported a net loss of $1.24 million for the year ended April 30, 2012, compared with a net loss of $3.35 million during the prior year. The Company's balance sheet at Jan. 31, 2013, showed $6.26 million in total assets, $20.73 million in total liabilities and a $14.46 million total stockholders' deficit. MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that Inova incurred losses from operations for the years ended April 30, 2012, and 2011 and has a working capital deficit as of April 30, 2012, which raise substantial doubt about Inova's ability to continue as a going concern. JBS USA: Moody's Lifts Senior Secured Term Loan Rating to 'Ba2' --------------------------------------------------------------- Moody's Investor's Service upgraded the ratings of JBS USA LLC following the upgrade on March 22, 2013 of the Corporate Family Rating of JBS S.A., which is the ultimate parent of JBS USA and guarantor of its debt. The rating outlook is stable. In addition, Moody's has removed the rating affirmation for JBS USA, LLC's $468 million senior secured term loan due 2018. The Ba3 rating for this term loan was affirmed on March 22, 2013 due to an internal administrative error. The rating for JBS USA, LLC's senior secured term loan has been upgraded to Ba2 from Ba3. Ratings upgraded: JBS USA, LLC: US$468 million Senior Secured Bank Term Loan (guaranteed by JBS S.A.) maturing May 2018 to Ba2 from Ba3. Ratings previously upgraded on March 22, 2013: JBS USA, LLC: US$700 million 11.625% Senior Unsecured Notes (guaranteed by JBS S.A.) due May 2014 to Ba3 from B1; US$650 million 7.25% Senior Unsecured Notes (guaranteed by JBS S.A.) due June 2021 to Ba3 from B1. JBS USA, LLC and JBS USA Finance, Inc. as co-issuers: US$700 million 8.25% Senior Unsecured Notes (guaranteed by JBS S.A.) due February 2020 to Ba3 from B1. Ratings Rationale JBS USA's ratings are driven primarily by the Corporate Family Rating of JBS S.A (Ba3, stable), which controls JBS USA Holdings and its wholly-owned subsidiary JBS USA LLC in all material aspects. In addition, JBS S.A. guarantees JBS USA's unrated $850 million asset based revolving credit facility (ABR) due June 2016, its senior secured term loan due May 2018 and its senior unsecured notes due May 2014, February 2020, and June 2021. JBS USA in turn provides an upstream guarantee of JBS S.A.'s $300 million 10.5% senior notes due 2016. Thus, Moody's would expect any future changes to JBS USA's ratings to mirror changes to JBS S.A.'s Corporate Family rating. JBS USA, LLC operates the U.S. beef and pork segments and the Australian beef and lamb operations of JBS S.A., one of the largest protein operators in the world. JBS USA is owned by an intermediate holding company, JBS USA Holdings, which also owns a controlling 75.5% equity interest in Pilgrim's Pride Corporation, one of the leading poultry producers in the United States. Reported sales for JBS S.A., JBS USA Holdings, and JBS USA for the twelve months ended December, 2012 were approximately BRL 75.7 billion (USD 36.9 billion), $28.8 billion, and $20.6 billion, respectively. The principal methodology used in this rating was Global Food - Protein and Agriculture Industry published in September 2009. JBS USA Finance, Inc., the co-issuer of the notes due May 2014, February 2020 and June 2021 is a special purpose entity wholly- owned by JBS USA LLC. It has no subsidiaries and no operations or assets other than those incidental to maintaining its corporate existence. JC PENNEY: Incurs $985 Million Net Loss in 2012 ----------------------------------------------- J.C. Penney Company, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $985 million on $12.98 billion of total net sales in 2012, as compared with a net loss of $152 million on $17.26 billion of total net sales during the prior year. The Company's balance sheet at Feb. 2, 2013, showed $9.78 billion in total assets, $6.61 billion in total liabilities and $3.17 billion in total stockholders' equity. A copy of the Form 10-K is available for free at: http://is.gd/x9cCyX About J.C. Penney Plano, Texas-based J.C. Penney Company, Inc. is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. Revenues are about $14 billion. The Company carries Moody's Investors Service's B3 Corporate Family Rating with negative outlook. Early in March 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Penney to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P lowered the issue- level rating on the company's unsecured debt to 'CCC+' from 'B-' and maintained its '3' recovery rating on this debt, indicating S&P's expectation of meaningful (50% to 70%) recovery for debtholders in the event of a payment default. "The downgrade reflects the performance erosion that has accelerated throughout the previous year and seems likely to persist over the next 12 months," explained Standard & Poor's credit analyst David Kuntz. At the same time, Fitch Ratings downgraded the Company's Issuer Default Ratings to 'B-' from 'B'. The Rating Outlook is Negative. The rating downgrades reflect Fitch's concerns that there is a lack of visibility in terms of the Company's ability to stabilize its business in 2013 and beyond after a precipitous decline in revenues leading to negative EBITDA of $270 million in 2012. Penney, Fitch said, will need to tap into additional funding to cover a projected FCF shortfall of $1.3 billion to $1.5 billion in 2013, which could begin to strain its existing sources of liquidity. In February 2013, Penney received a notice of default from a law firm representing more than 50% of its 7.4% Debentures due 2037. The Company has filed a lawsuit in Delaware Chancery Court seeking to block efforts by the bondholder group to declare a default on the 2037 bonds. Penney also asked lawyers at Brown Rudnick LLP to identify the investors they represent. JEDD LLC: Liquidating Plan Outline Has Minor Amendments ------------------------------------------------------- JEDD, LLC filed with the U.S. Bankruptcy Court for the Middle District of Tennessee an amendment to its Disclosure Statement dated Oct. 18, 2012. The amendment provides that, among other things: I. In Article III, Progress of the Chapter 11 Case to Date, the fourth and fifth paragraphs are deleted and replaced with the following: "In compliance with the guidelines with the Office of the United States Trustee, the Debtor filed on July 16, 2012, Aug. 15, 2012, Sept. 17, 2012, Oct. 15, 2012, Nov. 15, 2012, Dec. 17, 2012, Jan. 17, 2013, and Feb. 15, 2013, monthly operating reports detailing results of operations of the Debtor during the postpetition period..." II. In Article VIII, Implementation of the Chapter 11 Plan of Liquidation, the introduction, Subsection A, Subsection B, and Subsection D of Article VIII are deleted and replaced with the following: "In general, the Plan is a plan of liquidation. The means for the execution of the Plan include the surrender of collateral to each of the four secured creditors by foreclosure or transfer as described below, the liquidation of any assets of the Debtor by a Liquidating Agent. A copy of the Amendment to the Plan is available for free at http://bankrupt.com/misc/JEDD_LLC_ds_amendment.pdf The Plan As reported in the Troubled Company Reporter on Oct. 26, 2012, according to the explanatory disclosure statement, the Debtor will surrender or release collateral to each of its four secured creditors, and distribution of proceeds from the liquidation to priority claimants and then to non-insider creditors. The Debtor will transfer by deeds its parcels of real property to the secured creditors -- Clayton Bank and Trust, Peoples Bank and Trust Co., Progressive Savings Bank, and Union Bank -- not later than 18 months after the effective date. Under the Plan, only the scheduled non-insider unsecured creditors, who hold total claims of $306,105, would share any funds remaining after the administrative and priority claims totaling $143,727 are paid. Membership interests in the Debtor will be terminated. About JEDD LLC JEDD, LLC, filed a bare-bones Chapter 11 petition (Bankr. M.D. Tenn. Case No. 12-05701) on June 20, 2012, in Cookeville, Tennessee. JEDD is generally in the business of developing, marketing and selling real estate in the Big South Fork area near Jamestown, Tennessee. According to http://www.tnrecprop.com/, JEDD has activity and developments in Fentress County, including Flat Rock Reserve, Nichol Creek FARMS, Fortune 7 Homes, Island in the Sky, Concierge Services, Hunter's Ridge, River Park and Clear Fork. JEDD has filed schedules disclosing $13,377,782 in total assets and $13,694,539 in total liabilities. Paul "Doug" Gates, a co-founder and VP of operations, signed the Chapter 11 petition. Mr. Gates is also the CEO of Fortune 7 Inc., owner and operator of three engineering firms specializing in electrical, microwave and construction engineering. Judge Keith M. Lundin oversees the case. Lawyers at Gullett Sanford Robinson & Martin, PLLC, serve as the Debtor's counsel. LEE BRICK & TILE: Plan Solicitation Exclusivity Expires May 14 -------------------------------------------------------------- The Hon. Rand D. Doub of the U.S. Bankruptcy Court for the Eastern District of North Carolina has extended, at the behest of Lee Brick & Tile Company, to extend until May 14, 2013, the period during which the Debtor must solicit acceptances of its plan of reorganization, to accommodate the continued April 11, 2013 date of the confirmation hearing. The Debtor filed its Plan and Disclosure Statement on Nov. 15, 2012. As reported by the Troubled Company Reporter on March 26, 2013, payments provided under the terms of the Plan will be made from those monies remaining after satisfaction of Class 1, Class 2, and Class 3, and after debt service payments as otherwise provided in the Plan, and after payment of normal operating expenses and retention of sufficient operating reserve of the Reorganized Debtor, derived from the following sources: (i) the Debtor's Cash on Hand at Effective Date; (ii) net sale proceeds from any other Retained Assets designated for sale as provided in the terms of the Plan; (iii) revenues from the business operations of the Reorganized Debtor; (iv) net proceeds from the Debtor's collection of accounts receivable and tax refunds, if any; (v) net proceeds from recoveries of Designated Litigation, if any, and (vi) voluntary capital contributions from shareholders or loans from a shareholder(s) made on a basis subordinate to the interests of Class 4, 5, 6, 7, 8, 9, and 10 allowed claims. Capital Bank, N.A., formerly known as NAFH National Bank, successor by merger with Capital Bank, filed an objection to the Plan, which separately classifies Capital Bank's claim into secured and unsecured portions. The Plan proposes to allow Capital Bank a Class 4 Secured Claim in the amount of $8,500,000 and a Class 9 Unsecured Deficiency Claim in the amount of $4,895,490.39. Each class sets forth alternative repayment proposals for the Secured Claim and the Unsecured Claim. On March 5, 2013, the Debtor sought the extension of the period for the Debtor to solicit acceptances of its Plan. The Debtor assured the Court that the best interests of the Debtor, its creditors and estate will be served by the extension. Paul A. Fanning, counsel for Capital Bank, consented to the extension. About Lee Brick Sanford, North Carolina-based Lee Brick & Tile Company filed a bare-bones Chapter 11 petition (Bankr. E.D.N.C. Case No. 12-04463) on June 15, 2012, in Wilson on June 15, 2012. Lee Brick -- http://www.leebrick.com/-- began its operations in 1951 after Hugh Perry and 10 local businessmen from Lee County decided three years prior to invest in the business of brickmaking. In the late 1950's Hugh Perry bought out the investing partners, making Lee Brick a solely owned and operated family company. Hugh Perry named his son Frank president in 1970, which he served until 1999 and currently serves as CEO. Since 1999 Don Perry succeeded his father and serves as the company's president. Frank Perry, along with his sons Don and Gil, and brother-in-law JR (rad) Holton have helped guide the family business through revolutionary changes in brick manufacturing that few people in the ceramic industry could have ever anticipated. Judge Randy D. Doub presides over the case. Kevin L. Sink, Esq., at Nicholls & Crampton, P.A., serves as the Debtor's counsel. The petition was signed by Don W. Perry, president. The Debtor, in its amended schedules, disclosed $27,851,968 in assets and $14,136,003 in liabilities as of the Chapter 11 filing. In the original schedules, the Debtor scheduled $27,851,968 in assets and $14,135,140 in liabilities. Lender Capital Bank is owed $13.0 million, of which $6.5 million is secured. LEHMAN BROTHERS: Barclays Files Brief vs. $1.5-Bil. Ruling ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Barclays Plc filed the last brief last week on the question of whether U.S. District Judge Katherine B. Forrest was correct when she ruled in June 2012 that the bankruptcy judge was wrong in requiring the bank to pay $1.5 billion to the trustee liquidating the brokerage subsidiary of Lehman Brothers Holdings Inc. The dispute, the report relates, has been tentatively set for argument during the last week of May in the U.S. Court of Appeals in Manhattan. James W. Giddens, the Lehman brokerage trustee, wants the circuit court to reinstate a ruling from the bankruptcy judge giving him $1.5 billion. The London-based bank says it's entitled to keep the $1.5 billion and recover even more from the Lehman brokerage trustee. According to the report, in the brief, Barclays pointed out how it bought Lehman's North American Investment banking business "amid the chaos and financial uncertainty of September 2008." Without the sale, there would have been a "catastrophic liquidation," Barclays says, with billions in losses for the Lehman broker and its customers. As a consequence of the losses avoided by the sale, Barclays points to how the trustee will be able to pay customer claims in full. Mr. Giddens, the Bloomberg report discloses, contends the appeal comes down to whether the bankruptcy judge approved a sale of the Lehman broker and in the process gave the parties "pre-approval" to modify the contract without notice to the court or interested parties. Mr. Giddens says that that allowing a bankrupt to modify an approved sale agreement "would pose a grave danger" to bankruptcy sales. The report notes that the appeal in large part centers around a so-called clarification letter not even written when the bankruptcy judge approved the sale. Barclays says it paid $50 billion for the Lehman brokerage "amidst a worldwide financial crisis." The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011 and implemented in March 2012, with the third distributions just now announced. Lehman's brokerage subsidiary is under control of Giddens, a trustee appointed under the Securities Investor Protection Act. The Lehman brokerage has yet to make a first distribution to noncustomers. The Barclays appeal in the court of appeals is Giddens v. Barclays Capital Inc. (In re Lehman Brothers Holdings Inc.), 12-02328, 2nd U.S. Circuit Court of Appeals (Manhattan). The Barclays appeal in district court was Barclays Capital Inc. v. Giddens (In re Lehman Brothers Inc.), 11-cv-06052, U.S. District Court, Southern District of New York (Manhattan). About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: Third Distribution Totals $14.2 Billion -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that reorganized Lehman Brothers Holdings Inc. laid out details on the distribution to be made on April 4 to creditors with approved claims. The distribution will be the third since Lehman emerged from Chapter 11 reorganization last year. According to the report, the third distribution will amount to $14.2 billion, including $9.4 billion to non-affiliated creditors. Creditors whose claims were approved since the last distribution will receive $370 million to catch up. Affiliates will receive $4.4 billion. For senior unsecured claims of the Lehman holding company, the new distribution will be almost 5%, for a total of 14.8% since emergence from bankruptcy. General unsecured creditors will see another 4.7 percent, for a total of 13.9% since bankruptcy. At Lehman Commercial Paper Inc., unsecured creditors will see another 14.4% for a total of 40%. Unsecured creditors of Lehman Brothers Special Financing Inc. will receive another 2.5% for a total of 24.6% so far. Lehman said the fourth distribution will be made at the end of September. The Lehman parent announced March 27 there is a settlement with Swiss affiliate Lehman Brothers Finance AG. Details weren't disclosed. Lehman said papers will be filed "in coming weeks," in advance of an approval hearing on April 24. In January 2012 the Lehman parent was saying $63.5 million would be sufficient to cover the Swiss affiliate's claim. The Swiss subsidiary was making claims totaling about $16 billion. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: Enters Into Settlement Agreement with LBF ---------------------------------------------------------- Lehman Brothers Holdings Inc. on March 27 disclosed that it and certain of its affiliates entered into a settlement agreement with Lehman Brothers Finance AG, LBHI's Swiss affiliate. The settlement is subject to approval by both the United States Bankruptcy Court for the Southern District of New York and LBF's creditor's committee. A copy of the settlement agreement and a summary of its material terms will be set forth in the motions, which both LBHI, in connection with its chapter 11 case, and LBF, in connection with its chapter 15 case, will file in the coming weeks, seeking Bankruptcy Court approval of the settlement. At present it is anticipated that a hearing on the motions will take place on April 24, 2013. The chapter 11 plan, related disclosure statement and other filings, including the filing referred to above, can be found at http://www.lehman-docket.comin the "Key Documents" section. Questions relating to the distribution can be directed to the Debtors' claims agent, Epiq Systems, Inc., at 1-866-879-0688 (U.S.) and 1-503-597-7691 (Non-U.S.). 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. LIBERTY UNION: A.M. Best Affirms 'B' Financial Strength Rating -------------------------------------------------------------- A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating of B (Fair) and issuer credit rating of "bb" of Liberty Union Life Assurance Company (Liberty Union Life) (Madison Heights, MI). The revised outlook and rating affirmations for Liberty Union Life reflect its improvement in capital levels and favorable near-term reported and projected operating earnings growth. Liberty Union Life's capital levels of both absolute and risk-adjusted capital and surplus have increased over the past two years. The company's operating earnings have been driven by rate increases and a lower near-term claims trend, and Liberty Union Life's projected operating earnings are expected to slightly improve ahead of the implementation of the Patient Protection and Affordable Care Act (PPACA) in the Michigan marketplace. Offsetting factors include Liberty Union Life's near-term decline in revenue, its concentration of business in the highly regulated small group major medical market and a competitively challenged southeastern Michigan market. The company's concentration of business in the highly regulated and volatile small group major medical market exposes it to regulatory and market risks. Competition in the Michigan small group market is intense, and Liberty Union Life is challenged to grow its membership base. Future positive rating actions could occur if Liberty Union Life significantly grows its non-major medical line of business, improve its net income growth trends, reduce its concentration of business and sizably grow its absolute and risk-adjusted capital and surplus levels. Alternatively, negative rating actions could occur if the company reports a decline in operating performance that results in a material depletion in both its absolute risk- adjusted capital and surplus levels. LIFECARE HOLDINGS: Enters Into Interim Management Deal with Vibra ----------------------------------------------------------------- LCI Holdco, LLC, parent company of LifeCare Holdings Inc., on March 27 disclosed that its wholly-owned subsidiary, Complex Care Hospital of Idaho, has entered into an Interim Management Agreement with Vibra Hospital of Boise, LLC, an affiliate of Vibra Healthcare, LLC, an operator of Long Term Acute Care hospitals and inpatient rehabilitation hospitals in markets across the country. Under the Interim Management Agreement, Vibra will assume day-to- day operations of the Boise hospital upon approval of the motion filed today; a hearing on the motion is scheduled for Tuesday, April 2. LifeCare will continue its responsibilities for billing, collections and payment of employees under the management agreement. LifeCare also on March 27 executed an agreement for Vibra's acquisition of substantially all of the assets of CCHI and the continued employment of CCHI's employees. The proposed sale is subject to terms set forth in the agreement including customary conditions such as Bankruptcy Court and regulatory approval. As previously announced, LifeCare is also proceeding with the sale of its other 26 hospitals to Hospital Acquisition, LLC, an acquisition vehicle formed by LifeCare's senior secured lenders. A hearing on this sale motion is scheduled for Tuesday, April 2 as well. These transactions will allow LifeCare to dramatically improve its debt structure and enhance its ability to pursue strategic growth opportunities. Relationships with referring hospitals and physicians in the communities Lifecare continues to serve will continue as normal, as does the Company's commitment to providing compassionate, high quality care to patients recovering from catastrophic illness or injury. "I want to express my appreciation to the employees and physicians of Complex Care Hospital of Idaho for their compassionate, high quality care of our patients, and I'm pleased we were able to negotiate an agreement with Vibra Healthcare that will allow them to continue to provide this care," said LifeCare Holdings Chairman and Chief Executive Officer Phillip B. Douglas. "Over the next few weeks, we will work diligently with Vibra to ensure a seamless transition for patients and families." Information about the Company's Chapter 11 cases, including access to court documents, can be obtained in the News section of the Company's Web site at http://www.Lifecare-Hospitals.com About LifeCare Hospitals LCI Holding Company, Inc., and its affiliates, doing business as LifeCare Hospitals, operate eight "hospital within hospital" facilities and 19 freestanding facilities in 10 states. The hospitals have about 1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle Group, which holds 93.4% of the stock following a $570 million acquisition in August 2005. LCI Holding Company, Inc., and its affiliates, including LifeCare Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to secured lenders. Ken Ziman, Esq., and Felicia Perlman, Esq., at Skadden, Arps, Slate Meagher & Flom LLP, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Huron Management Services LLC will provide the Debtors an interim chief financial officer and certain additional personnel; and (ii) designate Stuart Walker as interim chief financial officer. The steering committee of lenders is represented by attorneys at Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent under the prepetition and postpetition secured credit facility is represented by Simpson Thacher & Barlett LLP. The Debtors disclosed assets of $422 million and liabilities totaling $575.9 million as of Sept. 30, 2012. As of the bankruptcy filing, total long-term obligations were $482.2 million consisting of, among other things, institutional loans and unsecured subordinated loans. A total of $353.4 million is owing under the prepetition secured credit facility. A total of $128.4 million is owing on senior subordinated notes. LifeCare Hospitals of Pittsburgh, LLC, a debtor-affiliate disclosed $24,028,730 in assets and $484,372,539 in liabilities as of the Chapter 11 filing. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP. FTI Consulting, Inc., serves as its financial advisor. LONGVIEW POWER: Bank Debt Trades at 27% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Longview Power LLC is a borrower traded in the secondary market at 73.45 cents-on- the-dollar during the week ended Friday, March 31, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents a drop of 0.17 percentage points from the previous week, the Journal relates. The loan matures on February 28, 2014. The Company pays 225 basis points above LIBOR to borrow under the facility. Longview is a special purpose entity created to construct, own, and operate a 695 MW supercritical pulverized coal-fired power plant located in Maidsville, West Virginia, just south of the Pennsylvania border and approximately 70 miles south of Pittsburgh. The project is owned 92% by First Reserve Corporation (First Reserve or sponsor), a private equity firm specializing in energy industry investments, through its affiliate GenPower Holdings (Delaware), L.P., and 8% by minority interests. LODGENET INTERACTIVE: Gets 2 Weeks Extension to Consummate Plan --------------------------------------------------------------- LodgeNet Interactive Corporation and its domestic subsidiaries entered into amendment no.1 to the Plan Support and Lockup Agreement, dated Dec. 30, 2012, with consenting lenders. The PSA Amendment extends the date upon which the Consenting Lenders have the ability to terminate the Plan Support Agreement if the Company has not consummated the Plan from March 22, 2013, to April 5, 2013. Pursuant to the PSA Amendment, the Consenting Lenders also consented to the amendment of the Investment Agreement. LodgeNet and all of its direct and indirect domestic subsidiaries filed a voluntary petition for reorganization in order to effectuate the Company's pre-packaged plan of reorganization, which is based on the recapitalization in which a syndicate of investors led by an affiliate of Colony Capital, LLC, will invest $60 million, as previously disclosed. On March 20, 2013, the Company and Col-L Acquisition, LLC, in its capacity as Purchaser Representative, entered into Amendment No. 2 to that certain Investment Agreement, dated Dec. 30, 2012, as previously amended. The IA Amendment extends the date upon which the Purchaser Representative and Purchasers have the ability to terminate the Investment Agreement if the parties have not closed on the transactions contemplated by the Investment Agreement from March 22, 2013, to April 5, 2013. A copy of the Amended Plan Support Agreement is available at: http://is.gd/8F6d0V A copy of the Amended Investment Agreement is available at: http://is.gd/KnY6me About LodgeNet Sioux Falls, South Dakota-based LodgeNet Interactive Corporation (Nasdaq: LNET) -- http://www.lodgenet.com/-- provides interactive media and connectivity services to hospitality and healthcare businesses and the consumers they serve. Recently named by Advertising Age as one of the Leading 100 US Media Companies, LodgeNet Interactive serves roughly 1.5 million hotel rooms worldwide in addition to healthcare facilities throughout the United States. As of Sept. 30, 2012, LodgeNet, on a consolidated basis, reported $292 million in assets and $449 million in liabilities. LodgeNet Interactive and its affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-10238) on Jan. 27, 2013, with a prepackaged Chapter 11 plan of reorganization. The plan extends the maturity date and modifies a $332.6 million term loan and $21.5 million revolver. Colony Capital, LLC, is acquiring 100% of the new shares of the reorganized company for $60 million. Weil, Gotshal & Manges LLP serves as counsel to the Debtors; Leonard Street and Deinard is the co-counsel; Miller Buckfire & Co., LLC and Moorgate Bankers are the investment banker; FTI Consulting, Inc. is the financial advisor; and Kurtzman Carson Consultants is the claims and notice agent. LYON WORKSPACE: Committee Balks at Motion to Incur DIP Financing ---------------------------------------------------------------- The Official Committee of Unsecured Creditors in Lyon Workspace Products, L.L.C.'s cases filed an objection to the Debtor's motion to incur postpetition financing, citing that it appears to the Committee that the lenders are seeking to significantly improve their position at the expense of the Debtors' already vulnerable unsecured creditors. The Debtor on Jan. 23 obtained interim approval of its request to obtain postpetition financing and provide security and other relief to Capital One Leverage Finance Corp., as agent to the lenders. The Debtor has sought to: a) obtain postpetition financing up to the aggregate principal amount of $22,327,344 from Capital One Leverage Finance Corp., Cole Taylor Bank or one of their affiliates, provided that the DIP Credit Facility: (i) have priority over any and all administrative expenses, subject to the carveout; (ii) be secured by perfected first priority security interests in and liens upon all unencumbered prepetition and postpetition property of the Debtor, including, but not limited to, real property; and b) use cash collateral, and other collateral in which the secured lenders have interests both for operating purposes and to pay down the Prepetition Debt, and provide adequate protection with respect to any diminution in the value of the secured lenders' interests in the prepetition collateral. As of the Petition Date, the prepetition agent asserts that the value of the prepetition lenders' interest in the prepetition collateral was not less than $19,500,000. A copy of the interim order is available for free at http://bankrupt.com/misc/LYONWORKSPACE_dipfinancing_orderb.pdf http://bankrupt.com/misc/LYONWORKSPACE_dipfinancing_orderc.pdf About Lyon Workspace Lyon Workspace Products, L.L.C. and seven affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 13-2100) on Jan. 19, 2012. Lyon Workspace -- http://www.lyonworkspace.com/-- is a manufacturer and supplier of locker and storage products. It has 400 full-time employees, 53% of whom are salaried employees. The weekly payroll is $200,000. Eight percent of the employees are members of the Local Union No. 1636 of the United Steelworkers of America, A.F.L.-C.I.O. The Debtor disclosed $41,275,474 in assets and $37,248,967 in liabilities as of the Chapter 11 filing. Attorneys at Perkins Coie LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. LYON WORKSPACE: Files Schedules of Assets and Liabilities --------------------------------------------------------- Lyon Workspace Products, L.L.C. filed with the U.S. Bankruptcy Court for the Northern District of Illinois its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $9,015,000 B. Personal Property $32,260,474 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $20,170,898 E. Creditors Holding Unsecured Priority Claims Unknown F. Creditors Holding Unsecured Non-priority Claims $17,070,069 ----------- ----------- TOTAL $41,275,474 $37,248,967 The deadline to file the schedules of assets and liabilities and statements of financial affairs was on March 4, 2013, after the Court granted an extension. About Lyon Workspace Lyon Workspace Products, L.L.C. and seven affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 13-2100) on Jan. 19, 2012. Lyon Workspace -- http://www.lyonworkspace.com/-- is a manufacturer and supplier of locker and storage products. It has 400 full-time employees, 53% of whom are salaried employees. The weekly payroll is $200,000. Eight percent of the employees are members of the Local Union No. 1636 of the United Steelworkers of America, A.F.L.-C.I.O. The Debtor disclosed $41,275,474 in assets and $37,248,967 in liabilities as of the Chapter 11 filing. Attorneys at Perkins Coie LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. MERIDIAN SUNRISE: Proofs of Claims Due April 5, 2013 ---------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Washington established April 5, 2013, as the deadline for any individual ord entity to file proofs of claim against Meridian Sunrise Village LLC. Meridian Sunrise Village LLC filed a Chapter 11 petition (Bankr. W.D. Wash. Case No. 13-40342) in Tacoma, Washington, on Jan. 18, 2013. The Debtor, a single asset real estate under 11 U.S.C. Sec. 101(51B), disclosed $70.6 million in total assets and $65.9 million in total liabilities in its schedules. The Debtor owns the property known as the New Meridian Sunrise Village in 10507 156th St. E. Puyallup, Washington. The Debtor has valued the property at $70 million, which property secures debt of $64.4 million to U.S. Bank, National Association. A copy of the schedules attached to the petition is available at http://bankrupt.com/misc/wawb13-40342.pdf MERISEL INC: Saints Capital Hikes Stake to 95.5% at Feb. 4 ---------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Saints Capital Granite, L.P., and Saints Capital Granite, LLC, disclosed that, as of Feb. 4, 2013, they beneficially own 47,500,000 shares of common stock of Merisel, Inc., representing 95.5% of the shares outstanding. Saints Capital previously reported beneficial ownership of 5,000,000 common shares or a 69.3% equity stake as of Nov. 21, 2012. A copy of the amended filing is available at http://is.gd/XKMOHE About Merisel Merisel operates in a single reporting segment, the visual communications services business. It entered that business beginning March 2005, through a series of acquisitions, which continued through 2006. These acquisitions include Color Edge, Inc., and Color Edge Visual, Inc.; Comp 24, LLC; Crush Creative, Inc.; Dennis Curtin Studios, Inc.; Advertising Props, Inc.; and Fuel Digital, Inc. The Company's balance sheet at Sept. 30, 2012, showed $23.3 million in total assets, $34.1 million in total liabilities, and a stockholders' deficit of $10.8 million. "The Company had a cash balance of $286,000 at Sept. 30, 2012, and experienced reduced revenues for the three and nine months ended Sept. 30, 2012, compared to the same periods in 2011, resulting in a net loss and net cash used in operating activities for the interim periods then ended. Additionally, during October 29th and 30th the Company's Carlstadt, New Jersey facility experienced significant damage due to Hurricane Sandy. The Company will incur additional expenses for the replacement/repair of damaged equipment and to continue to service its client base until the facility is fully operational. It is anticipated that the additional costs incurred will exceed the insurance proceeds; the extent to which is uncertain. These factors raise substantial doubt about the Company's ability to continue as a going concern," according to the Company's quarterly report for the period ended Sept. 30, 2012. MF GLOBAL: New York Attorney Opposes Confirmation of Plan --------------------------------------------------------- Preet Bharara, U.S. attorney for the Southern District of New York, said it supports the objection filed by the U.S. trustee to the confirmation of MF Global Holdings Ltd.'s liquidation plan. In a March 27 filing, the U.S. attorney said the proposed plan contains "impermissible releases and immunities that potentially implicate non-debtor liabilities to the United States and other governmental units." U.S. Trustee Tracy Hope Davis, who was assigned to oversee MF Global's bankruptcy case, previously objected to the liquidation plan, saying it does not comply with U.S. bankruptcy law. Ms. Davis criticized a provision that allows payment of fees and expenses to the indenture trustee and a group of so-called creditor co-proponents without court review and approval. The U.S. trustee also said the plan provides for third-party releases and contains injunction provisions that are "overly broad." About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. On Oct. 31, 2011, 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), 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. On Nov. 7, 2011, the United States Trustee appointed the statutory creditors' committee in the Debtors' cases. At the behest of the Statutory Creditor's Committee, the Court directed the U.S. Trustee to appoint a chapter 11 trustee. On Nov. 28, 2011, the Bankruptcy Court entered an order approving the appointment of Louis J. Freeh, Esq., of Freeh Group International Solutions, LLC, as Chapter 11 trustee. On Dec. 19, 2011, MF Global Capital LLC, MF Global Market Services LLC and MF Global FX Clear LLC filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15808, 11-15809 and 11-15810). On Dec. 27, the Court entered an order installing Mr. Freeh as Chapter 11 Trustee of the New Debtors. On March 2, 2012, MF Global Holdings USA Inc. filed a voluntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-10863), and Mr. Freeh also was installed as its Chapter 11 Trustee. 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 Chapter 11 Trustee has tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. The Official Committee of Unsecured Creditors has retained Capstone Advisory Group LLC as financial advisor, while lawyers at Proskauer Rose LLP serve as counsel. 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. MID KANSAS HOMES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Mid Kansas Homes and Movers, LLC 1731 N. 9th Street Salina, KS 67401 Bankruptcy Case No.: 13-10602 Chapter 11 Petition Date: March 22, 2013 Court: U.S. Bankruptcy Court District of Kansas (Wichita) Judge: Robert E. Nugent Debtor's Counsel: Nicholas R. Grillot, Esq. REDMOND & NAZAR, LLP 245 N. Waco, Suite 402 Wichita, KS 67202 Tel: (316) 262-8361 Fax: (316) 263-0610 E-mail: ngrillot@redmondnazar.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/ksb13-10602.pdf The petition was signed by Daniel J. Huehl. MOBIVITY HOLDINGS: Incurs $7.3 Million Net Loss in 2012 ------------------------------------------------------- Mobivity Holdings Corp. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $7.33 million on $4.07 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $16.31 million on $2.52 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $3.35 million in total assets, $9.74 million in total liabilities and a $6.39 million total stockholders' deficit. M&K CPAS, PLLC, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring operating losses and negative cash flows from operations and dependence on additional financing to fund operations which raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "The outstanding principal on our bridge notes totals $4,342,418 at December 31, 2012, and the entire principal and accrued interest at 10% annually are due April 15, 2013. As of the date of this report, we do not have the ability repay the bridge notes, there is no certainty that we will have the liquidity necessary to settle the bridge notes including accrued interest at the maturity date, nor is it certain that the bridge lenders will agree to an extension of the maturity date or an accommodation favorable to us. Our obligations under the bridge notes are secured by all of our assets. If we are unable to repay or refinance our obligations under those notes by April 15, 2013, the holders of the notes will have the right to foreclose on their security interests and seize our assets. To avoid such an event, we may be forced to seek bankruptcy protection, however a bankruptcy filing would, in all likelihood, materially adversely affect our ability to continue our current level of operations. In the event we are not able to refinance or repay the notes, but negotiate for a further extension of the maturity date of the notes, we may be required to pay significant extension fees in cash of shares of our equity securities or otherwise make other forms of concessions that may adversely impact the interests of our common stockholders." A copy of the Form 10-K is available for free at: http://is.gd/VY0ZMt About Mobivity Holdings Mobivity Holdings Corp. was incorporated as Ares Ventures Corporation in Nevada in 2008. On Nov. 2, 2010, the Company acquired CommerceTel, Inc., which was wholly-owned by CommerceTel Canada Corporation, in a reverse merger. Pursuant to the Merger, all of the issued and outstanding shares of CommerceTel, Inc., common stock were converted, at an exchange ratio of 0.7268-for-1, into an aggregate of 10,000,000 shares of the Company's common stock, and CommerceTel, Inc., became a wholly owned subsidiary of the Company. In connection with the Merger, the Company changed its corporate name to CommerceTel Corporation on Oct. 5, 2010. In connection with the Company's acquisition of assets from Mobivity, LLC, the Company changed its corporate name to Mobivity Holdings Corp. and its operating company to Mobivity, Inc, on Aug. 23, 2012. MPG OFFICE: Adopts Amended Retention Bonus Plan ----------------------------------------------- The board of directors of MPG Office Trust, Inc., adopted an amendment to the MPG Office Trust, Inc., Retention Bonus Plan on March 20, 2013. The amendment provides that, with respect to any retention bonus awarded to a participant during 2013 after a completed 2013 calendar quarter, any amount of the retention bonus that would have otherwise been paid to the participant for a previously completed 2013 calendar quarter will instead be paid to the participant as part of the final installment payment of the retention bonus in accordance with the terms of the Plan. The terms of the Plan otherwise remain unchanged. The Board of Directors adopted the Retention Plan to provide eligible employees with certain cash retention bonus payments in connection with their continued employment with the Company. Pursuant to the Retention Plan, each participant will be eligible to receive payment of a retention bonus in an amount determined by the Compensation Committee of the Board of Directors and paid as follows, subject to the participant's continued employment with the Company: * 12.5% of the retention bonus will be paid to the participant on the last day of each calendar quarter of 2013; and * 50% of the retention bonus will be paid to the participant on the last day of the first calendar quarter of 2014. Pursuant to the Retention Plan, the Compensation Committee has the authority to award retention bonuses at any time during the term of the Retention Plan, including after the completion of one or more calendar quarters in 2013. Those retention bonuses may be in the form of a reallocation of amounts forfeited by participants whose employment with the Company has terminated. A copy of the Amended Bonus Plan is available for free at: http://is.gd/qcBBQm About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- is the largest owner and operator of Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high- quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. The Company has been focused on reducing debt, eliminating repayment and debt service guarantees, extending debt maturities and disposing of properties with negative cash flow. The first phase of the Company's restructuring efforts is substantially complete and resulted in the resolution of 18 assets, relieving the Company of approximately $2.0 billion of debt obligations and potential guaranties of approximately $150 million. For the year ended Dec. 31, 2012, the Company reported net income of $396.11 million, as compared with net income of $98.22 million on $234.96 million of total revenue during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $1.46 billion in total assets, $1.98 billion in total liabilities and a $518.32 million total deficit. MTR GAMING: Moody's Changes Outlook to Stable & Keeps CFR at Caa1 ----------------------------------------------------------------- Moody's Investors Service changed MTR Gaming Group, Inc.'s ratings outlook to stable from negative. Moody's also affirmed the company's Caa1 corporate family rating, Caa1-PD probability of default rating, and the Caa1 rating on the senior secured second lien notes. An SGL-3 speculative grade liquidity rating was assigned. The change in the ratings outlook reflects improvements in MTR's credit metrics in recent periods. The company's leverage decreased from around 7.0 times in 2011 to 6.0 times in 2012, owing to its successful introduction of video lottery terminals at Scioto Downs. Increased EBITDA generated from the Scioto Downs property in Ohio more than offset declines at the company's other two gaming facilities in West Virginia and Pennsylvania, which continue to be adversely impacted by increased gaming competition. The SGL-3 speculative grade liquidity rating reflects Moody's expectation that MTR will maintain an adequate liquidity profile over the next twelve months supported by its large cash balance, expectations for positive free cash flow (before the remaining $25 million VLT licensing fee for Scioto Downs), and available capacity under its revolving credit facility. Weighing down on these positive factors is the limited projected cushion (as per Moody's forecast) under one of the financial covenants governing the revolving credit facility. Ratings affirmed: Corporate family rating at Caa1 Probability of default rating at Caa1-PD $571 million senior secured second lien notes due 2019 at Caa1 (LGD4, 51%). Revised from (LGD4, 52%). Rating Assigned: Speculative Grade Liquidity Rating at SGL-3 Ratings Rationale: MTR's Caa1 CFR reflects Moody's view that leverage will modestly weaken near-term from the current level of about 6.0 times as EBITDA growth in Scioto Downs does not fully offset declines at Mountaineer and Presque Isle Downs. Moody's expects that competition in Ohio will intensify and apply varying degrees of pressure to all three of MTR's gaming facilities. Specifically, Thistledown Racetrack and Northfield Park are introducing VLT's in 2013, and there are four other VLT facilities that may open in 2014. The rating also reflects the company's thin coverage of interest expense, small scale, and dependence on customers from Ohio for a large majority of its gaming revenues. The rating is supported by the company's ample cash balance, long dated capital structure, and the timely opening and successful ramp-up of Scioto Downs. The rating also captures MTR's ongoing efforts to retain its customer base through investments in facility improvement (particularly at Mountaineer). Moody's could upgrade MTR's ratings if it maintains or improves EBITDA levels despite competitive headwinds and/or reduces debt such that leverage is sustained below 6.0 times and EBITDA less capex to interest exceeds 1.0 time. Increased scale and diversification would also be supportive of an upgrade. Moody's could downgrade MTR's ratings if consolidated EBITDA meaningfully declines such that leverage approaches 7.0 times, EBITDA less capex to interest falls well below one time, and/or free cash flow turns negative on a sustained basis. A weakening of the company's liquidity profile, such as a breach of financial covenants or material reduction in the cash balance, could also result in ratings pressure. The principal methodology used in this rating was the Global Gaming 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. MTR Gaming Group, Inc. (Nasdaq: MNTG), through its subsidiaries, owns and operates Mountaineer Casino, Racetrack & Resort in Chester, West Virginia; Presque Isle Downs & Casino in Erie, Pennsylvania and Scioto Downs in Columbus, Ohio. MTR reported net revenues of approximately $490 million for the fiscal-year ended Dec 31, 2012. MTS LAND: Proposing Full-Payment Chapter 11 Plan ------------------------------------------------ MTS Land, LLC, and MTS Golf, LLC, are proposing a 100% payment Chapter 11 plan, according to the Third Amended Joint Plan of Reorganization dated March 1, 2013. All creditors with allowed claims will be paid the amount of their allowed claims in full through the Plan. Holders of equity securities of Debtors will retain all of their legal interests. U.S. Bank National Association, owed $32,450,046 as of the Petition Date, will receive through a restated maturity date or that date that is the 5th anniversary of the Effective Date, monthly principal and interest payments on the secured portion of the outstanding balance of the restated USB Note amortized over a period of 25 years. The USB Loan Maturity Date may be extended for up to 4 additional periods of 6 months each, subject to certain conditions including the payment of an extension fee of 0.25% of the then outstanding principal balance of the Restated USB Note. General Unsecured Claims, owed $2,098,425 per the schedules, will be paid in full in Cash, plus post-Effective Date interest at the Unsecured Interest Rate: a. In the event that USB is determined by the Bankruptcy Court to be entitled to the 1111(b) Election and elects to make it: on the latest of: (i) the 1st anniversary of the Effective Date; (ii) such date as may be fixed by the Bankruptcy Court; (iii) the 14th Business Day after such Claim is Allowed; or (iv) such date as the Holder of such Claim and Reorganized Debtor have agreed or will agree. b. In the event that USB is determined by the Bankruptcy Court to be entitled to the 1111(b) Election and elects not to make it: The total amount of Allowed General Unsecured Claims (including the Allowed unsecured portion of the USB Claims) plus interest at the Unsecured Interest Rate, will be paid in 60 equal monthly payments beginning on the 14th Business Day of the 1st full month after the Effective Date, and on the same day of each subsequent month; provided, however, in the event that the Class 1 USB Loan Claims and the Class 2 Hertz Loan Claims are paid in full prior to the 60th month, then all net proceeds from the sale of the remaining Real Property will be distributed Pro Rata among the Holders of Allowed General Unsecured Claims until paid in full. On the Effective Date, without any further action by Debtors or Reorganized Debtor, MTS Golf will be merged and consolidated into MTS Land, as the Reorganized Debtor. The Debtors have a commitment for the Exit Financing from Robert Flaxman. The Exit Loan will be in the amount of $9,625,000 if Reorganized Debtor proceeds with development using R-43 Zoning or $12,085,000 if Reorganized Debtor proceeds with the Amended and Restated Development Agreement, or such additional amount as agreed to by Reorganized Debtor. The Exit Loan is in addition to a $7 million dollar principal paydown to USB by the Guarantor, which will be paid by the Guarantor, Jamie Sohacheski. The Exit Loan proceeds will be used to pay the payments required under the Plan, including Allowed Administrative Claims, post- Effective Date operational costs and entitlement and development costs for the SUP Approval or the R-43 Zoning, as applicable. A copy of the Disclosure Statement for the Debtors' Third Amended Joint Plan of Reorganization is available at: http://bankrupt.com/misc/mtsland.doc493.pdf About MTS Land MTS Land, LLC, and MTS Golf, LLC, own and operate the now dormant Mountain Shadows Golf Club. They filed separate Chapter 11 petitions (Bankr. D. Ariz. Case Nos. 12-16257 and 12-16257) in Phoenix on July 19, 2012. Mountain Shadows Golf Club -- http://www.mountainshadowsgolfclub.com/-- is an 18 hole, par 56 course located at Paradise Valley. Nestled in the foothills of Camelback Mountain, the 3,081-yard Executive course claims to be one of the most scenic golf courses in Arizona. MTS Land and MTS Golf are affiliates of Irvine, Cal.-based Crown Realty & Development Inc. MTS Land and MTS Golf each estimated assets and debts of $10 million to $50 million. Judge Charles G. Case II oversees the Debtors' cases. Lawyers at Gordon Silver serve as the Debtors' counsel. The petition was signed by Robert A. Flaxman, administrative agent. Lender U.S. Bank is represented by Steven D. Jerome, Esq., and Evans O'Brien, Esq., at Snell & Wilmer L.L.P. The U.S. Trustee for Region 14 advised the Court that an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against the Debtors have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint a committee if interest develop among the creditors. MW GROUP: Hearing on Disclosure Statements Continued to May 22 -------------------------------------------------------------- The Bankruptcy Court for the Western District of North Carolina has continued the hearing on approval of the disclosure statements with respect to (a) the Chapter 11 Plan of Liquidation filed by Bank of America, N.A., and (b) the First Amended Plan of Reorganization filed by MW Group, LLC, to May 22, 2013. The evidentiary hearing on valuation of the Debtor's real property will commence on May 22, 2013, at 9:30 a.m., and will continue as necessary on May 23, 2013, at 9:30 a.m. Pre-trial briefs with respect to valuation of Debtor's real property, which will not exceed 15 pages in length, will be filed and served on or before May 17, 2013. Bank and Debtor will file a final list of all fact and expert witnesses whom the party expects to call (either in person or by deposition designations) at the valuation hearing on or before May 17, 2013. The parties will exchange lists and/or copies of all exhibits to be offered and all schedules, summaries, diagrams, and charts to be used in their respective cases on or before May 17, 2013. Motions in limine or objections to the admission of exhibits will be filed on or before May 20, 2013. The Court will rule on any such motions at the outset of the valuation hearing. About MW Group Charlotte, North Carolina-based MW Group, LLC, filed for Chapter 11 bankruptcy (Bankr. W.D.N.C. Case No. 11-32674) on Oct. 21, 2011. The Debtor scheduled assets of $10.32 million and liabilities of $8.42 million. Donald R. James signed the petition as manager. The Debtor's assets consist of 36.5 acres of vacant land, 48 condo units for rent, and 200 apartments known as Weyland and Weyland II, located in Charlotte, Mecklenburg County, North Carolina. The Debtor is represented by Christine L. Myatt, Esq., at Nexsen Pruet, PLLC, in Greensboro, North Carolina. No official committee of unsecured creditors has been appointed in the case. NAMCO LLC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Namco, LLC aka Namco BranchBrook 100 Sanrico Drive Manchester, CT 06042 Bankruptcy Case No.: 13-10610 Chapter 11 Petition Date: March 24, 2013 Court: U.S. Bankruptcy Court District of Delaware (Delaware) Judge: Peter J. Walsh Debtor's Counsel: Anthony M. Saccullo A.M. SACCULLO LEGAL, LLC 27 Crimson King Drive Bear, DE 19701 E-mail: ams@saccullolegal.com - and ? Thomas H. Kovach, Esq. THORP REED & ARMSTRONG, LLP 824 N. Market Street, Suite 710 Wilmington, DE 19801 Tel: (302) 250-4726 Fax: (302) 421-9439 E-mail: tkovach@thorpreed.com Debtor's General Bankruptcy Counsel: OLSHAN FROME & WOLOSKY, LLP Debtor's Claims and Noticing Agent: EPIQ BANKRUPTCY SOLUTIONS, LLC Debtor's Restructuring Agent: CLEAR THINKING GROUP, LLC Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Lee Diercks, chief restructuring officer. Debtor's List of Its 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Wil-Bar International Trade Debt $2,786,824 50 Cabot Court Hauppauge, NY 11788 Waterway Trade Debt $2,582,167 2200 East Sturgis Road Oxnard, CA 93030 Asahi Chemical Corp. Trade Debt $2,444,082 2-10 Ogawa-Cho Kanda Chiyoda-K6 Tokyo, Japan SwimLine Trade Debt $2,150,199 191 Rodeo Drive Edgewood, NY 11717 John Forman Promissory Note $1,297,387 72 Hillburn Lane North Barrington, IL 60010 Terrace Living Co. Trade Debt $1,081,925 21045 Avenida Magnifica Lake Forest, CA 92630 Inland Mid-Atlantic Management Trade Debt ? Landlord $948,312 4687 Paysphere Circle Chicago, IL 60674 Sinoc Trade Debt $770,396 c/o Solstice Leisure Company, Ltd. 17-19 Chatham Road South Suite 1903, Empress Plaza Tsim Sha Tsui, Kowloon, Hong Kong Vinyl Works Canada Trade Debt $598,036 P.O. Box 96/2174 Barber Road Port Colborne, Ontario Canada L3K 5V7 Damco Trade Debt ? Freight $555,396 2 Giralda Farms Madison, NJ 07940 International Leisure Products Trade Debt $502,724 191 Rodeo Drive Edgewood, NY 11717 Centro GA Waterbury, LLC Trade Debt ? Landlord $430,730 P.O. Box 713465 Cincinnati, OH 45271 Baystate Pool Supplies, Inc. Trade Debt $382,606 P.O. Box 15000 Lewiston, ME 04245-9553 RBF International Ltd. Trade Debt $340,357 780 Nobel Street Jerome, Quebec Canada J7Z 7A3 L.B. International Trade Debt $284,679 150 Engineers Road Hauppauge, NY 11788 Smartpool Trade Debt $274,879 P.O. Box 4642 New York, NY 10163 Wego Chemical & Mineral Trade Debt $267,043 239 Great Neck Road Great Neck, NY 11021 Arch Chemical, Inc. Trade Debt $260,292 P.O. Box 945582 Atlanta, GA 30394 Ocean Blue Water Products Trade Debt $246,478 Waltann Green Brook I, LLC Trade Debt ? Landlord $233,772 NAVISTAR INT'L: Fitch Rates New $300MM Sr. Unsecured Notes 'CCC' ---------------------------------------------------------------- Fitch Ratings assigns a rating of 'CCC'/'RR4' to Navistar International Corporation's (NAV) proposed issuance of $300 million senior unsecured notes maturing November 2021. The Rating Outlook is Positive. Proceeds will be used to repay a portion of Navistar, Inc.'s $1 billion senior secured bank term loan. A full list of ratings is shown at the end of this release. NAV announced last week it would reduce its $1 billion senior secured term loan using proceeds from the new notes, and seek lender consent to extend the maturity to 2017 from 2014. Other proposed changes include amendments to certain covenants to provide additional operating flexibility, and an adjustment to collateral as a consequence of the reduced loan amount. These changes would not have a material impact, in Fitch's view, on the loan's priority status in Navistar's debt structure or on recovery prospects for the loan. Key Rating Drivers The Positive Outlook incorporates the favorable impact of NAV's planned refinancing on liquidity, meaningful progress in executing NAV's transition to its revised engine strategy, and the appointment of a permanent CEO effective in April 2013. In addition, the company continues to restructure operations to cut costs and improve efficiency which can be expected to support margins over the long term. Following the planned refinancing, total debt would remain unchanged, but extending the maturity date of the term loan would improve the company's liquidity profile by reducing the large amount of debt maturing in 2014. The shift of $300 million of debt from a secured to unsecured basis would improve recovery prospects modestly for unsecured debtholders. Near-term concerns remain, however, including declines in the company's market share, high warranty costs, operating losses, negative free cash flow, and tepid demand for trucks that reflects slow economic growth and cost pressures faced by truck purchasers related to fuel costs and driver availability. The ratings also incorporate concerns surrounding the availability and use of emissions credits, which began to run out in the second fiscal quarter of 2013 for some heavy duty engines. In addition, NAV is still working to achieve on-board diagnostics (OBD) certification in 2013 for certain engines. As a result, occasional gaps in deliveries could exacerbate market share concerns while NAV implements its revised engine strategy. NAV's share in its traditional heavy and medium truck and bus markets was 18% in the first fiscal quarter of 2013 compared to 23% in fiscal 2012 and 34% as recently as 2010. Emission credits are a particular concern in 10 states that use California Air Resources Board (CARB) standards which do not allow the use of non-conformance penalties (NCPs). There are sufficient emissions credits to support medium- duty engine sales into 2014. Fitch expects manufacturing free cash flow (FCF) to be negative through at least the first half of fiscal 2013 due to seasonally low cash flow; delays in deliveries due to the depletion of emissions credits; and expenditures related to warranties, NCPs, and ongoing pension contributions. FCF could be pressured if industry demand for trucks does not improve or the company's market share does not recover. Liquidity is well above $1 billion which provides a cushion to absorb negative cash flow in the near term. NAV's manufacturing cash and marketable securities declined to just under $1.2 billion at Jan. 31, 2013 from $1.5 billion at Oct. 31, 2012. This level of cash, combined with availability under a $175 million ABL facility, is sufficient to mitigate near-term liquidity concerns while NAV makes the transition to its revised engine strategy. Cash balances could weaken modestly before the company begins shipping heavy duty trucks with its own proprietary MaxxForce 13- liter engines that include Selective Catalytic Reduction (SCR) aftertreatment technology by the end of the fiscal second quarter. Current maturities of manufacturing long-term debt were modest at $125 million at Jan. 31, 2013. Debt maturities exceed $1.5 billion in 2014 but would decline by approximately $1 billion upon completion of NAV's planned amendments and debt issuance. Scheduled to mature in October 2014 is $570 million of subordinated convertible debt. Sales declined 12% year-over-year in the first quarter of 2013 due to weak industry demand for trucks and NAV's declining market share. EBITDA was slightly above break-even in the first quarter of fiscal 2013. Results could improve during the year if NAV executes its revised engine strategy on time and begins to rebuild market share. In order to rebuild its operating performance and preserve cash, NAV is limiting capital spending, cutting back on certain investments associated with NAV's global expansion, and focusing engineering efforts on its engine strategy. Restructuring should also help control NAV's costs over the long term, including workforce reductions. NAV estimates these actions will reduce its cost structure by $175 million or more beginning in 2013. Warranty expense more than doubled in 2012 to $895 million, mostly related to complexity surrounding engine emissions regulations. The charges included more than $400 million of adjustments to pre- existing warranties. As NAV incorporates improvements in newer engines, warranty expense should decline in 2013. However, cash charges are likely to increase in the near term as NAV makes repairs related to accrued warranty liabilities. Pension contributions represent a recurring use of cash, but required contributions during the next few years should be slightly lower than originally anticipated due to MAP-21 legislation passed in 2012. The legislation allows a portion of required contributions to be temporarily deferred, but the total obligation is unaffected. NAV estimates it will be required to contribute $166 million in 2013 and at least $200 million annually between 2014 and 2016. NAV contributed $157 million in 2012. NAV's net pension obligations increased to $2.1 billion at the end of fiscal 2012 from $1.8 billion in 2011. NAV's revised engine strategy involves combing NAV's advanced exhaust gas recirculation (EGR) technology with Cummins SCR engines and emissions technology. In December 2012, NAV launched on time the ProStar with the Cummins ISX 15-liter engine and is scheduled to phase in its own 13-liter SCR engines beginning in April 2013, followed by medium-duty engines later in 2013 or 2014. NAV will require approval by the EPA and CARB of its reconfigured emissions compliant engines as well as approval of on-board diagnostics. Rating Sensitivities Fitch could take a positive rating action if manufacturing FCF returns toward a sustainable breakeven level during 2013, the SCR engine strategy is implemented on time, the company's market share begins to recover, and earnings improve steadily. Fitch could take a negative rating action if NAV's market share fails to recover materially as it gradually completes the transition to SCR emissions technology, or if FCF and liquidity do not begin to recover after the middle of fiscal 2013. If sales volumes are low or margins remain pressured, FCF could be impaired, making it difficult to fund capital expenditures, pension contributions and higher interest expense associated with an increase in debt during late fiscal 2012. Five investors have accumulated, in aggregate, more than 60% of NAV's common shares, which contributes to some uncertainty about long-term operating and financial policies. The ratings could also be negatively affected depending on the outcome of the SEC's investigation of the company's accounting and disclosure practices. The Recovery Rating (RR) of '1' for Navistar Inc.'s $1 billion term loan supports a rating of 'B', three levels above NAV's Issuer Default Rating (IDR), as the loan can be expected to recover more than 90% in a distressed scenario based on a strong collateral position. The RR '4' for NAV's senior unsecured debt indicates average recovery prospects in a distressed scenario. The RR '6' for the senior subordinated convertible notes reflects a low priority position relative to NAV's other debt. Navistar Financial Corporation (NFC) Fitch believes NFC is core to NAV's overall franchise, and the IDR of the finance subsidiary is directly linked to that of its ultimate parent due to the close operating relationship and importance to NAV, as substantially all of NFC's business is connected to the financing of new and used trucks sold by NAV and its dealers. The linkage also reflects the potential that, under a stress scenario, NAV may seek to extract capital and/or unencumbered assets from NFC. The relationship between NAV and NFC is formally governed by the Master Intercompany Agreement. Also, there is a requirement referenced in NFC's credit agreement requiring Navistar, Inc. or NAV to own 100% of NFC's equity at all times. Fitch views NFC's operating performance and overall credit metrics as neutral to NAV's rating. NFC's performance has not changed materially compared to Fitch's expectations, but its financial profile remains tied to NAV's operating and financial performance. Total financing revenue declined in first quarter 2013 on continued reduction of NFC's retail portfolio balance and lower wholesale financing volume to dealers. The average receivables balance declined to $1.7 billion at Jan. 31, 2013 compared to $2.5 billion one-year prior. NFC's asset quality remains stable, reflecting the mature retail portfolio which is running off. Charge-offs and provisioning volatility has declined as NFC focuses on its wholesale portfolio, which historically has experienced lower loss rates relative to the retail portfolio. Absent material dividends to the parent, Fitch expects NFC's leverage to improve and stay below historical levels due to reduced financing needs. Balance sheet leverage, as measured by total debt to equity fell to a historical low of 2.5x in first quarter 2013. Management believes NFC can more effectively operate with a leverage target between 5x and 6x, consistent with historical levels and with other Fitch-rated captives. The company may also reestablish dividends from NFC to NAV in efforts to maintain adequate asset coverage and leverage, as well as to enhance liquidity at NAV in the medium to longer term. Liquidity is adequate at Jan. 31, 2013, with $13.1 million of unrestricted cash and approximately $1.1 billion of availability under its various borrowing facilities. In February 2013, NFC completed a refinancing of a portion of its borrowing facilities which Fitch believes mitigates some potential near-term liquidity constraints. The RR '4' for NFC's senior secured credit facilities supports a rating equalized with the IDR of 'CCC', reflecting average recovery prospects in a distressed scenario. As of Jan. 31, 2013, Fitch's ratings covered approximately $2.9 billion of debt at NAV and $1.6 billion of outstanding debt at the Financial Services segment, the majority of which is at NFC. Fitch rates the following: -- Proposed issuance of $300 million senior unsecured notes 'CCC'/'RR4'. Fitch's ratings for NAV are: Navistar International Corporation -- Long-term IDR 'CCC'; -- Senior unsecured notes 'CCC'/'RR4'; -- Senior subordinated notes 'CC'/'RR6'. Navistar, Inc. -- Long-term IDR 'CCC'; -- Senior secured bank term loan 'B'/'RR1'. Cook County, Illinois -- Recovery zone revenue facility bonds (Navistar International Corporation Project) series 2010 'CCC'. Illinois Finance Authority (IFA) -- Recovery zone revenue facility bonds (Navistar International Corporation Project) series 2010 'CCC'. Navistar Financial Corporation -- Long-term IDR 'CCC'; -- Senior secured bank credit facilities 'CCC'/'RR4'. The Rating Outlook is positive. NAVISTAR INT'L: Moody's Rates $300MM Senior Notes 'B3' ------------------------------------------------------ Moody's Investors Service assigned a B3 rating to $300 million of senior unsecured notes issued by Navistar International Corporation. Proceeds from the issuance will be used to reduce the outstanding amount under the company's first-lien term loan from $990 million to approximately $692 million. It is anticipated that concurrent with the issuance of the new notes and pay down of the term loan, the maturity of the term loan will be extended from July 2014 to August 2017. Navistar's existing ratings are unaffected by this transaction. These ratings include: B3 Corporate Family Rating; B3-PD Probability of Default Rating; Ba3 on first lien secured debt; B3 on senior unsecured debt; and SGL-3 Speculative Grade Liquidity rating. The rating outlook remains stable. Ratings Rationale Navistar's ratings reflect the challenges the company faces in transitioning to SCR emissions technology, contending with falling demand in the heavy truck market, and adjusting to budgetary cutbacks that are reducing its military sales. The company must also address component defects that contributed to approximately $400 million in warranty accruals throughout 2012. Notwithstanding these challenges Moody's recognizes that Navistar maintains a high level of customer loyalty among many truck purchasers, it has a sound dealer network and the company's strategy for strengthening the competitiveness of its trucks and engines is viable. In addition, despite the softening near-term outlook for North American truck sales, there is considerable pent-up demand. A key challenge facing Navistar is maintaining adequate liquidity as it implements its product strategy in anticipation of an eventual rebound of truck demand. The principal source of liquidity for Navistar's manufacturing operations is the cash and marketable securities position that stood at $1.2 billion at January 2013. Key liquidity requirements include approximately $125 million in current maturities of long-term debt, approximately $350 million in minimum levels of cash needed to fund working capital and daily operating activities. This leaves approximately $725 million to cushion against negative operating cash flow that might result from difficulties in executing the company's operating plan or a delayed rebound in truck demand. Moody's notes that Navistar's liquidity profile will benefit from the proposed extension of the term loan maturity to 2017. However, Moody's also expects that during the near-term, the company will also have to contend with the October 2014 maturity of approximately $570 million of senior subordinated convertible notes. The principal methodology used in this rating was the Global Heavy Manufacturing Industry Methodology published in November 2009, the Finance Company Global Rating Methodology published in March 2012, and The Rating Relationship Between Industrial Companies And Their Captive Finance Subsidiaries Industry Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. NEENAH FOUNDRY: Moody's Assigns 'B3' Rating to New $150MM Loan -------------------------------------------------------------- Moody's Investors Service assigned first time public ratings to Neenah Foundry Company - Corporate Family at B2 and Probability of Default Ratings at B2-PD. In a related action, Moody's assigned a B3 rating to the new $150 million senior secured term loan. The rating outlook is stable. Funding under the new senior secured term loan, along with nominal funding under a new $100 million senior secured asset based revolving credit facility (unrated), will be used to refinance existing debt, and pay fees and expenses related to the transaction. The following ratings were assigned: Corporate Family Rating, B2; Probability of Default, B2-PD; B3 (LGD4, 61%), for the $150 million senior secured term loan. Ratings Rationale: Neenah's B2 Corporate Family Rating reflects the company's leadership position in the production of castings and forging products balanced by the company's high leverage, cyclical end markets, modest size, and regional focus. Demand for Neenah's products has been driven by the recovery in the commercial vehicle industry and stabilizing macroeconomic conditions over the recent years in North America. These conditions, along with limited industry capacity, have supported Neenah's ability to implement price increases across the company's industrial and municipal segments which have improved profit margins and credit metrics. In addition, the company's business profile benefits from the top ten customers (about 55% of 2012 revenues) having an average relationship history of 31 years. Neenah's credit metrics have also benefited from the reduction of approximately $155 million in debt upon emergence from Chapter 11 in July 2010. For the fiscal September 30, 2012, pro forma debt/EBITDA (including Moody's standard adjustments) approximated 3.9x and EBIT/interest coverage approximated 1.8x. Neenah's revenue base maps to the B range under the Global Automotive Parts Supplier Methodology and is generated primarily in North America, which limits the company to the macroeconomic conditions of one region. Moody's expects North American commercial vehicle build rates over the coming quarters to reflect some softening in commercial vehicle demand, given the modest macroeconomic growth environment and the potential adverse impact of U.S. government fiscal spending policies. The trucking industry also is experiencing increased competition from rail as companies focus on cutting further their logistics costs. However, Neenah does benefit from customer diversity with the largest customer representing 9.4% of 2012 revenues. Further, profit margins should be protected from raw material cost fluctuations, as management has indicated that the surcharge mechanism on its metallic material costs protects approximately 75% of the company raw material spending. The stable outlook incorporates Neenah's modest size and pro forma credit metrics. Neenah's adequate liquidity profile is expected to provide sufficient operating flexibility to manage through the risk of softening commercial vehicle and municipal demand over the coming quarters. Neenah is anticipated to have an adequate liquidity profile over the near-term supported by availability under a $100 million asset based revolving credit facility and expected positive free cash flow generation. The company is anticipated to have nominal cash balances as of the closing of the refinancing transaction. Moody's believes that Neenah is positioned to generate positive free cash flow over the near-term supported by pricing actions initiated in fiscal 2012 somewhat offset by weakening demand for commercial vehicles in North America and the potential adverse funding impact of government debt reduction policies on municipalities. Borrowing base availability under the asset based revolving credit facility is expected to support operating flexibility over the near-term. Financial covenants under the term loan are anticipated to include a minimum fixed charge coverage and maximum total net leverage test. The asset based revolver financial covenant is expected to be a springing minimum fixed charge coverage test. An improvement in Neenah's rating or outlook could result from the ability to sustain current market share and pricing trends such that EBIT/Interest is sustained above 3.3x and Debt/EBITDA below 3.5x while demonstrating a financial policy that is focused on debt reduction rather than shareholder returns. The outlook or rating could be lowered if the North American commercial vehicle and casting markets experience weaker demand trends resulting in EBIT margins falling below 5%, EBIT/Interest approaching 2x and debt/EBITDA above 4.5x. A deteriorating liquidity profile or the initiation of large shareholder distributions could also lower the company's rating or outlook. The principal methodology used in this rating was the Global Automotive Supplier Industry Methodology published in January 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Neenah Foundry Company, headquartered in Neenah, Wisconsin, manufactures gray and ductile iron castings and forged components for sale to industrial and municipal customers. Industrial castings are custom engineered and produced for customers in several industries, including the medium- and heavy-duty truck components, farm equipment, and HVAC industries. Municipal castings include manhole covers and frames, storm sewer frames and grates, tree grates, and specialty castings. Neenah is a wholly owned subsidiary of Neenah Enterprises, Inc. which is controlled by private investment funds affiliated with Golden Tree Asset Management. Revenues for fiscal year-end September 30, 2012 were $557 million. NEW ALBERTSON'S: Moody's Withdraws 'Caa1' Senior Debt Rating ------------------------------------------------------------ Moody's Investors Service withdrew the ratings of all tranches of New Albertson's Inc.'s senior unsecured notes following the closing of SUPERVALU, Inc.'s sale of NAI to AB Acquisition LLC, an affiliate of a Cerberus-led investor consortium. Moody's has withdrawn the ratings because it believes it has insufficient or otherwise inadequate information to support the maintenance of the rating. The following ratings are withdrawn: New Albertson's Inc. Senior Unsecured Debt (all tranches) at Caa1 on review with direction uncertain. NORTHWEST PARTNERS: Tells Fannie Mae That Plan is Confirmable ------------------------------------------------------------- Contrary to assertions by the Federal National Mortgage Association, debtor Northwest Partners says its amended reorganization plan: -- is confirmable; -- properly classifies the Fannie Mae deficiency claim; -- satisfies the absolute priority rule; and -- is fair and equitable. Fannie Mae assets a secured claim as of the petition date of over $13.3 million dollars yet, secured by the Debtor's apartment complex in Reno, Nevada, valued at only $13.0 million. Fannie Mae is opposing confirmation of the Plan and instead wants relief from the automatic stay with respect to the Debtor's property. The Plan provides that the current general partners of the Debtor will contribute such funds as are necessary to implement the Plan. The Debtor amended the Plan on Jan. 9, 2013, to provide that: 1. The Washoe HOME claim will not bear any interest prior to or after the Effective Date. The balance owed on the Washoe County HOME claim will be paid on or before July 1, 2049, or such other date as the Debtor may propose at the Confirmation Hearing which is approved by the Court. 2. Allowed Unsecured Claims will receive quarterly pro rata disbursements of $5,000 commencing on the first day of the month at least 90 days following the Effective Date, and continuing on the first day of each and every third month thereafter, until such claims are paid in full. To the extent that the Debtor is unable to make such payment, the general partners of the Debtor will contribute such sums as are necessary to make the payment. All potential insider claims will be subordinated to trade creditor claims. 3. There will be no distribution under the plan to insiders. A copy of the Amended Plan is available for free at http://bankrupt.com/misc/NORTHWEST_PARTNERS_planamendment.pdf About Northwest Partners Northwest Partners owns the 268-unit Austin Crest Apartment in Northwest Reno, Nevada. It filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 11-53528) on Nov. 17, 2011. Judge Bruce T. Beesley oversees the case. The Debtor scheduled $13,513,361 in assets and $14,135,158 in liabilities. The petition was signed by Robert F. Nielsen, president of IDN I, the Debtor's general partner. Alan R. Smith, Esq., at the Law Offices of Alan R. Smith, in Reno, Nev., represents the Debtor as counsel. Attorneys at Snell & Wilmer L.L.P., in Las Vegas, Nev., represent Fannie Mae as counsel. Under the Plan, the Debtor will continue to operate its business of leasing its property post-confirmation. The income generated will be used to fund the Plan. The equity owners of the Debtor will contribute funds as are necessary to implement the Plan. NOVADEL PHARMA: In Active Negotiations with Creditors to Cut Debt ----------------------------------------------------------------- NovaDel Pharma Inc. reported unaudited financial results for the twelve months ended Dec. 31, 2012. As previously reported, the Company has entered into negotiations for the sale of its intellectual property and certain other assets to SUDA LTD, an Australian company listed on the ASX. An agreement has not as yet been reached. In addition, the Company is seeking a purchaser for its NitroMist(R) and ZolpiMist(TM) licenses together with the related NDA's. It is currently appealing the FDA fees levied on these products and they continue to be an impediment to the sale of the licenses. The Company, at the end of March 2012, deregistered its common stock and exited the Securities and Exchange Commission reporting system. The Company recorded a loss of $1,200,000 or $(0.01) per share for the twelve months ended Dec. 31, 2012, compared to a net loss of $5,341,000 or $(0.04) per share in the 12 months ended Dec. 31, 2011. During the twelve months of 2012, the Company earned royalties from the license of NitroMist and ZolpiMist in the amount of $471,000. The Company also received $200,000 from the sale of NitroMist rights outside the US, Canada and Mexico. Also included in revenue is the recognition of previously received payments under various license agreements. In January 2013, the Company terminated its ZolpiMist license agreement with Rechon Life Science AB. Rechon breached the initial performance clause of the license and under the terms of the agreement the license was terminated. Expenses for the 12 months ended Dec. 31, 2012, were $2,572,000 as compared to $4,700,000 and include amounts to maintain and expand the Company's intellectual property base, as well as an expense accrual under a severance agreement with a former officer of the Company. The Company continues to closely manage its expenses as well as actively negotiate with its creditors to reduce its outstanding debts. As of Dec. 31, 2012, the Company has approximately $30,000 in cash and cash equivalents. The current liabilities of the Company, at Dec. 31, 2012, of $4,365,000 include fees due to the FDA approximating $2,800,000. The imposition of these fees is an impediment to the Company's ability to raise capital to continue to develop its product opportunities or find a strategic partner. The Company has filed an appeal with the FDA for relief of the fees currently imposed and future fees relating to its licensed and marketed products. There is no assurance that the Company's request will be granted nor is the Company certain as to the time frame for a response to its request of the FDA. The remaining liabilities at Dec. 31, 2012, of $5,170,000 reflect deferred revenue to be recognized over the term of various license agreements. About Novadel Pharma NovaDel Pharma Inc. -- http://www.novadel.com/-- is a specialty pharmaceutical company that develops oral spray formulations of marketed pharmaceutical products. The Company's patented oral spray drug delivery technology seeks to improve the efficacy, safety, patient compliance, and patient convenience for a broad range of prescription pharmaceuticals. OMTRON USA: Stalking Horse, Bid Protections Okayed -------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of North Carolina issued an amended order in connection with Omtron USA, LLC's selection of a stalking horse bidder. The amended order entered last month provides that the Debtor will consult with the Official Committee of Unsecured Creditors prior to designating one or more bids as a stalking horse. The Debtor is also authorized to provide any stalking horse bidder with these protections: a) a break-up fee, in an amount to be negotiated by the Debtor based on the totality of the circumstances, including, without limitation, the purchase price and other terms and conditions of the stalking horse agreement; b) reasonable expense reimbursement for any stalking horse bidder for costs and fees incurred by such stalking horse bidder related to due diligence and transaction costs; c) the total of the break-up fee and the expense reimbursement will not exceed, in combined total, 3% of the aggregate sale price of the identified sale assets. A copy of the Plan Amendment is available for free at http://bankrupt.com/misc/NORTHWEST_PARTNERS_planamendment.pdf About Omtron USA Omtron USA bought poultry producer Townsends Inc. out of bankruptcy in 2011, shut down operations in later that year, and filed its own Chapter 11 petition (Bankr. D. Del. Case No. 12- 13076) on Nov. 9, 2012, in Delaware. On Dec. 21, 2012, the Delaware Court entered its order granting the transfer of the Debtor's case to U.S. Bankruptcy Court for the Middle District of North Carolina, under Case No. 12-81931. John H. Strock, III, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, serves as counsel to the Debtor. Duff & Phelps Securities LLC serves as investment banker, Upshot Services LLC as its claims and noticing agent. The Debtor listed $40,633,406 in assets and $4,518,756 and liabilities. Omtron paid $24.9 million in February 2011 for the North Carolina operations belonging to Townsends Inc. The three-member Official Committee of Unsecured Creditors tapped to retain Lowenstein Sandler LLP and Womble Carlyle Sandridge & Rice, LLP, as its counsel and CohnReznick, LLP, as its financial advisor. OTELCO INC: Case Summary & 30 Largest Unsecured Creditors --------------------------------------------------------- Affiliated entities that simultaneously filed Chapter 11 petitions: Debtor Case No. ------ -------- Otelco Inc. 13-10593 505 Third Avenue East Oneonta, AL 35121 Blountsville Telephone LLC 13-10594 Brindlee Mountain Telephone LLC 13-10595 Communications Design Acquisition LLC 13-10596 CRC Communications LLC 13-10597 Granby Telephone LLC 13-10598 Hopper Telecommunications LLC 13-10599 I-Land Internet Services LLC 13-10600 Mid-Maine Telecom LLC 13-10601 Mid-Maine TelPlus LLC 13-10602 Otelco Telecommunications LLC 13-10604 Pine Tree Telephone LLC 13-10606 Saco River Telephone LLC 13-10607 Shoreham Telephone LLC 13-10608 War Telephone LLC 13-10609 Otelco Telephone LLC 13-10605 Otelco Mid-Missouri LLC 13-10603 Chapter 11 Petition Date: March 24, 2013 Court: United States Bankruptcy Court District of Delaware Debtors' Bankruptcy Counsel: Edmon L. Morton, Esq. YOUNG, CONAWAY, STARGATT & TAYLOR The Brandywine Bldg. 1000 West Street, 17th Floor P.O. Box 391 Wilmington, DE 19899 Tel: 302 571-6600 Fax: 302-571-1253 - and - Maris J. Kandestin, Esq. Robert S. Brady, Esq. YOUNG CONAWAY STARGATT & TAYLOR, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 - and - Rachel C. Strickland, Esq. Jennifer J. Hardy, Esq. Jack M. Tracy, II, Esq. WILLKIE FARR & GALLAGHER LLP 787 Seventh Avenue New York, NY 10019-6099 Tel: 212-728-8000 Debtors' Corporate Counsel: DORSEY & WHITNEY LLP Debtors' Investment Bankers & Financial Advisors: EVERCORE GROUP LLC Debtors' Claims & Notice Agent: KURTZMAN CARSON CONSULTANTS, LLC Total Assets at Sept. 30, 2012: $168,490,060 Total Liabilities at Sept. 30, 2012: $310,064,158 The petitions were signed by Michael D. Weaver, Chief Executive Officer. Consolidated List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Arab Electric Cooperative Inc. Trade $379,807 PO Box 770 331 South Brindlee Mountain Pkwy Arab, AL 35016 c/o Joe Van Bunch General Manager Tel: 256-586-3196 Fax: 256-586-4943 Fairpoint Communications Inc. Trade $282,768 800 Hinesburg Road South Burlington, VT 05403 c/o Tom Nolting Tel: 802-860-2323 Level 3 Communications Trade $135,170 1015 Locust, Suite 300 St. Louis, MO 63101 c/o Ruben Chapa Account director Tel: 314-242-5603 National Cable Television Trade $97,222 Cooperative Alabama Power Trade $97,066 Central Maine Power Company Trade $72,154 ANPI Trade $47,589 American Electric Power Co. Inc. Trade $47,500 (AEP Pole) MaineCom LLC Trade $34,089 Neustar Inc. Trade $21,941 EarthLink Inc. Trade $20,000 Innovative Network Solutions Trade $16,331 Intrado Inc. Trade $10,399 SegTEL Inc. Trade $8,200 Fox Sports Net South Trade $7,533 Green Mountain Power Trade $6,861 Mosaic Technology Trade $6,661 U.S. Cellular Corporation Trade $6,426 Frontier Communications Corp. Trade $5,400 SportSouth Trade $5,282 Google Inc. Trade $5,110 Northland Telephone Company of Maine Inc. Trade $4,500 iN DEMAND Trade $4,406 Budget Document Technology Trade $4,386 Graybar Electric Company Inc. Trade $3,811 KLC Realty LLC Trade $3,027 ADTRAN Inc. Trade $3,012 Alabama Public Service Commission Trade $2,800 Allen, Benjamin C Trade $2,922 Bubier, Dale Trade $2,976 PATRIOT COAL: Bondholders Want Trustee to Take Over --------------------------------------------------- Tiffany Kary, writing for Bloomberg News, reports that two Patriot Coal Corp. bondholders, claiming the majority of the company's 99 units in bankruptcy don't have obligations to unions and retirees, are seeking the appointment of a trustee to oversee how assets are distributed. According to the report, Aurelius Capital Management LP and Knighthead Capital Management LLC, said in court papers filed March 28 in U.S. Bankruptcy Court in St. Louis that the U.S. mining company's bankruptcy is being mismanaged because it assumes all the units have obligations to the collective bargaining or retiree health care agreements of the United Mine Workers of America. Their bid for a trustee sets up a dispute over how bondholders and unions are treated in the Chapter 11 case. Patriot filed for bankruptcy to reorganize and shed some of the $1.6 billion it estimates is owed to pay for lifetime health care for 8,100 retirees. The company said in a statement March 29 that it will oppose the bondholders' request. The motion "is a misguided, costly and disruptive distraction at a time when the company is focused on achieving the cost savings it needs to reorganize successfully and protect the interests of all stakeholders," Michael Freitag, a Patriot spokesman, said in the statement. The report relates that Aurelius and Knighthead own 3.25% notes due 2013 and a majority of the 8.25% notes due 2018, the funds said. They seek an independent Chapter 11 trustee to oversee the case and said that without one, the company is moving "inexorably towards liquidation." "Compounding the problem, rather than moving expeditiously to take the non-obligor debtors out of bankruptcy, the debtors-in- possession have spent nine months negotiating with the UMWA about these illegal proposals," the funds wrote. Patriot has proposed moving retiree health-care benefits to a trust, known as a Voluntary Employee Beneficiary Association or VEBA. The VEBA would be funded by all of the company's 99 units, including 13 of them that don't have obligations to unions and retirees, the funds said. While the amount Patriot would owe retirees under the new agreements hasn't been determined, it's estimated at $1 billion, according to court papers. Patriot has proposed pay cuts and benefit changes for unionized employees in bankruptcy, and also sued Peabody Energy Corp. to force its former parent to keep paying for the healthcare costs of certain retirees who were employed by Peabody before Patriot's 2007 spinoff. 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. PATRIOT ELECTRIC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Patriot Electric and Mechanical Inc. 717 E. Ordnance Road, Suite 203-204 Curtis Bay, MD 21226 Bankruptcy Case No.: 13-15055 Chapter 11 Petition Date: March 22, 2013 Court: U.S. Bankruptcy Court District of Maryland (Baltimore) Judge: Robert A. Gordon Debtor's Counsel: Ronald J. Drescher, Esq. DRESCHER & ASSOCIATES, P.A. 4 Reservoir Circle, Suite 107 Baltimore, MD 21208 Tel: (410)484-9000 E-mail: ecf@drescherlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- TW3 Properties LLC 13-15058 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Talbot Watkins, III, president. A copy of Patriot Electric and Mechanical's list of its 20 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/mdb13-15055.pdf PINNACLE FOODS: Moody's Reviews Ratings for Upgrade After IPO ------------------------------------------------------------- Moody's Investors Service placed the ratings of Pinnacle Foods Finance LLC, including its B2 Corporate Family Rating, Ba3 senior secured rating and Caa1 senior unsecured rating under review for upgrade following the successful launch of an initial public offering ("IPO") of its common stock. Moody's also affirmed the company's SGL-2 Speculative Grade Liquidity rating. Rationale For Ratings Review The ratings review is based on the significant decline in financial leverage that will result from at least $589 million in planned debt repayments using IPO proceeds and cash. Proforma the debt reductions, Moody's estimates that debt/EBITDA leverage will fall comfortably below 5 times from just over 6 times prior to the IPO. Moody's had previously said that if Pinnacle reduced debt/EBITDA below 5.5 times, the ratings could be upgraded. Pinnacle sold 29 million shares for $20 per share raising approximately $580 million and could raise as much as $88 million more if the underwriters exercise their green shoe option to purchase up to 4.4 million additional shares. Pinnacle plans to use cash and IPO proceeds to redeem $465 million of 9.25% senior unsecured notes due 2015 and $124 million of its senior secured Term Loan B due 2014. Pinnacle has not said how it will apply any incremental green shoe option proceeds. Moody's review will focus primarily on the amount and use of net IPO and green shoe proceeds, future financial policies related to acquisitions and dividend payout rates and understanding any other potential shifts in future business strategy. "The IPO and debt reduction to follow will significantly improve Pinnacle's overall credit profile including reduced financial leverage and extension of its maturity schedule, both of which are significant credit positives " said Brian Weddington, a Moody's Senior Credit Officer. Moody's estimates that the planned debt reduction will generate cash interest savings of about $55 million. It also reduces the amount of the company's nearest debt maturities through a $124 million repayment of the $243 million Term Loan B that is due April 2014 and the avoidance of an accelerated maturity of the $450 million Term Loan F due 2018, which would have expired at the end of 2014 if at that time any more than $150 million of the 9.25% unsecured notes remained outstanding. However, the cash interest savings will be offset by the institution of a generous quarterly cash dividend that Pinnacle intends to set initially at $0.18 per share or about $80 million on an annualized basis. "We believe that Pinnacle should be able to generate enough cash flow to fund the planned dividend payments internally," said Weddington, "nevertheless, at over 90% of proforma 2012 earnings, the payout rate appears aggressive relative to peer average around 50%." Ratings placed under review for upgrade: Pinnacle Foods Finance LLC: Corporate Family Rating at B2; Probability of Default Rating at B2-PD; $150 million senior secured revolving loan expiring April 2017 at Ba3; $243 million senior secured Term Loan B due April 2014 at Ba3; $638 million senior secured Extended Term Loan B due October 2016 at Ba3; $398 million senior secured Term Loan E due October 2018 at Ba3; $449 million proposed senior secured Term Loan F, due 2018 at Ba3; $465 million senior unsecured notes due April 2015 at Caa1; $400 million senior unsecured notes due September 2017 at Caa1. LGD Rates To Be Revised: LGD senior secured bank credit facilities (Domestic) at LGD3 - 32%; LGD senior unsecured debt (Domestic) at LGD5 - 86%. Rating Affirmed: Speculative Grade Liquidity Rating at SGL-2. The principal methodology used in this rating was Global Packaged Goods published in December 2012. Headquartered in Parsippany, New Jersey, Pinnacle Foods Finance LLC -- through its wholly-owned operating company, Pinnacle Foods Group -- manufactures and markets branded convenience food products in the US and Canada. Its brands include Birds Eye, Voila, Hungry-Man and Swanson frozen dinners, Vlasic pickles, Mrs. Paul's and Van de Kamp's frozen prepared sea food, Aunt Jemima frozen breakfasts, Log Cabin and Mrs. Butterworth's syrup and Duncan Hines cake mixes. Annual net sales are approximately $2.5 billion. Pinnacle Foods Finance LLC is controlled by investment funds associated with or designated by The Blackstone Group, which following the IPO owns between approximately 70% of the common shares. PT BERLIAN LAJU TANKER: Parent Now in Chapter 15 ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that PT Berlian Laju Tanker Tbk, an Indonesian operator of about 70 tankers, is the subject of another bankruptcy proceeding, this time a Chapter 15 cross-border bankruptcy filed March 26 in New York. PT Berlian was already the subject of an involuntary Chapter 11 bankruptcy filed in December in New York by investor Gramercy Distressed Opportunity Fund II along with two sister funds. In addition, more than a dozen subsidiaries have been under Chapter 11 protection in New York since last year. In March 2012, PT Berlian put the subsidiaries into Chapter 15 proceedings in Manhattan to complement a bankruptcy reorganization in Singapore, where the subsidiaries are based. In April the U.S. judge ruled that Singapore is home to the so- called foreign main proceeding for the operating subsidiaries. In June 2012, Indonesian bank PT Bank Mandiri (Persero) Tbk began involuntary bankruptcy proceedings in Indonesia against the PT Berlian parent, followed by the involuntary petition the Gramercy funds filed in New York in December. With creditors voting in favor, the Indonesian court approved the parent's bankruptcy reorganization on March 22. The company filed the new Chapter 15 so the U.S. Court can enforce the Indonesian restructuring. About PT Berlian Creditors of PT Berlian Laju Tanker Tbk filed an involuntary Chapter 11 bankruptcy petition in U.S. Bankruptcy Court against the Indonesian ship operator (Bankr. S.D.N.Y. Case No. 12-14874) on Dec. 13, 2012. The petition was filed by Gramercy Distressed Opportunity Fund II, Gramercy Distressed Opportunity Fund, and Gramercy Emerging Markets Fund. The creditors, all located in Greenwhich, Conn., are allegedly owed $125.5 million. PT Berlian Laju Tanker Tbk is the largest Indonesian shipping company, focusing on liquid bulk cargo, with operations primarily in Asia with some expansion into the Middle East and Europe. Indonesia-based PT Berlian Laju Tanker Tbk filed Chapter 15 bankruptcy petitions in New York for subsidiaries (Bankr. S.D.N.Y. Lead Case No. 12-11007) on March 14, 2012, to prevent creditors from seizing the company's vessels when they call on U.S. ports. Cosimo Borrelli, appointed vice president for restructuring for PT Berlian, signed the Chapter 15 petitions for Chembulk New York Pte Ltd and 12 other entities. The Berlian group operates 72 vessels, of which 50 are owned. In January 2012, the Berlian Group violated covenants under a $685 million loan agreement. Creditors took steps to arrest certain vessels operated by companies in the Berlian Group. In order to prevent ship arrests and other collection efforts, the Berlian Group initiated proceedings in the High Court of the Republic of Singapore on March 12, 2012. The Singapore court entered orders prohibiting for three months any arrest of vessels or collection effort. The Berlian Group filed the Chapter 15 petitions to obtain entry of an order enjoining creditors from seizing vessels that are at port in the United States. The Debtors do not have assets in the U.S. other than the transitory basis vessels that are in the U.S. The U.S. Bankruptcy Judge in April 2012 ruled that Indonesia is the home to the so-called foreign main proceeding. PT BERLIAN: Chapter 15 Case Summary ----------------------------------- Chapter 15 Debtor: PT Berlian Laju Tank Tbk Wisma BSG 10th Floor JI. Abdul Muis No. 40, Jakarta 10160 Indonesia as Foreign Representative Chapter 15 Case No.: 13-10901 Chapter 15 Petition Date: March 26, 2013 U.S. Court: United States Bankruptcy Court Southern District of New York (Manhattan) U.S. Judge: Hon. Stuart M. Bernstein Foreign Representative's U.S. Counsel: Kenneth R. Puhala, Esq. SCHNADER HARRISON SEGAL & LEWIS LLP 140 Broadway, Suite 3100 New York, NY 10005 Tel: (212) 973-8140 Fax: (212) 972-8798 E-mail: kpuhala@schnader.com Estimated Assets: $500,000,001 to $1,000,000,000 Estimated Liabilities: More than $1,000,000,000 Affiliated cases filed in U.S. Bankruptcy Court for the Southern District of New York: Entity Case No. Petition Date ------ -------- ------------- Chembulk New York Pte Ltd 12-11007 03/13/2012 Chembulk Barcelona Pte Ltd 12-11009 03/13/2012 Chembulk Gibraltar Pte Ltd 12-11010 03/13/2012 Chembulk Hong Kong Pte Ltd 12-11011 03/13/2012 Chembulk Houston Pte Ltd 12-11012 03/13/2012 Chembulk Kobe Pte Ltd 12-11013 03/13/2012 Chembulk New Orleans Pte Ltd 12-11014 03/13/2012 Chembulk Savannah Pte Ltd 12-11015 03/13/2012 Chembulk Shanghai Pte Ltd 12-11016 03/13/2012 Chembulk Ulsan Pte Ltd 12-11017 03/13/2012 Chembulk Virgin Gorda Pte Ltd 12-11018 03/13/2012 Chembulk Yokohama Pte Ltd 12-11019 03/13/2012 PT Berlian Laju Tanker Tbk 12-14874 12/13/2012 (same debtor) PULMONARY DISEASE: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Pulmonary Disease and Critical Care Associates, P.A. 10710 Charter Drive, Suite 310 Columbia, MD 21044 Bankruptcy Case No.: 13-14974 Chapter 11 Petition Date: March 22, 2013 Court: U.S. Bankruptcy Court District of Maryland (Baltimore) Judge: Nancy V. Alquist Debtor's Counsel: Aryeh E. Stein, Esq. MERIDIAN LAW, LLC 600 Reisterstown Road, Suite 700 Baltimore, MD 21208 Tel: (443) 326-6011 E-mail: astein@meridianlawfirm.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/mdb13-14974.pdf The petition was signed by David O. Nyanjom, president. PVL-HOLDINGS: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: PVL-Holdings, LLC 3455 Cliff Shadows Parkway, Suite 220 Las Vegas, NV 89129 Bankruptcy Case No.: 13-12464 Chapter 11 Petition Date: March 26, 2013 Court: U.S. Bankruptcy Court District of Nevada (Las Vegas) Judge: Bruce T. Beesley Debtor's Counsel: Matthew L. Johnson, Esq. MATTHEW L. JOHNSON & ASSOCIATES, P.C. 8831 W. Sahara Avenue Las Vegas, NV 89117 Tel: (702) 471-0065 Fax: (702) 471-0075 E-mail: annabelle@mjohnsonlaw.com Scheduled Assets: $12,575,000 Scheduled Liabilities: $12,570,300 The Company's list of its largest unsecured creditors filed with the petition does not contain any entry. The petition was signed by Thomas J. DeVore, COO of LEHM, LLC, its manager. Affiliates that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- B-NGAE1, LLC 12-17954 07/06/12 B-PWR, LLC 12-13827 03/30/12 R&K FABRICATING: Court Trims Tokio Marine Claims Against Goza ------------------------------------------------------------- Bankruptcy Judge Marvin Isgur granted, in part, and denied, in part cross-defendant Louis F. "Bud" Goza's Motion to Dismiss cross-plaintiff Tokio Marine & Nichido Fire Insurance's First Amended Cross-Claim. Tokio asserts causes of action against Goza for (1) fraud; (2) negligence, negligent misrepresentation & gross negligence; (3) conversion; (4) violations of Texas Theft Liability Act; (5) conspiracy to defraud; and (6) tortious interference with contract. According to Judge Isgur, Tokio's fraud claim against Goza should be dismissed in part. Tokio has not pled sufficient facts to show that Goza participated in the filing of the allegedly fraudulent insurance claim. Tokio has however pled sufficient facts to show that Goza knew of the fraudulent claim shortly after its filing and failed to remedy the fraud. The conspiracy to defraud claim will not be dismissed, for the same reason. The remainder of Tokio's claims against Goza should be dismissed for failure to state a claim, said Judge Isgur. The dispute concerns a proof of claim filed in R&K Fabricating, Inc.'s chapter 11 bankruptcy case. The proof of claim is based on a default judgment that Tokio obtained against R&K in a state court action in the amount of $311,345. The default judgment relates to six forklifts that were claimed to be damaged while in R&K's possession during Hurricane Ike. The Trustee alleges that the default judgment is based on a fraudulent claim filed by Universal Forklift Supply, LLC, the company that leased the Forklifts to R&K. The Trustee brought suit against UFS; its principals Wyendell Steve Evans and Louis F. "Bud" Goza; and Tokio seeking a declaratory judgment that (1) the judgment lien held by Tokio and UFS was an avoidable preference under 11 U.S.C. Sec. 547; (2) the disallowance of Tokio and UFS' claims against the estate; and (3) a breach of contract and fraud judgment against UFS, Evans and Goza. Tokio filed a cross-claim against UFS for breach of contract and against UFS, Evans, and Goza for fraud. The Court previously issued a Memorandum Opinion and Report and Recommendation on Nov. 29, 2012, denying UFS and Evans' motions to dismiss; and granting Goza's motions to dismiss for failure to state a claim, subject to repleading. In an Order issued on the same date, the Court recommended that the District Court temporarily withdraw the reference in Adversary Proceeding No. 12-03177. Following withdrawal of the reference the Court, among other things, recommended that the District Court grant Tokio 21 days to amend its complaint against Goza. The Court also recommended that the District Court again refer the Adversary Proceeding to the Bankruptcy Court until the Adversary is ready for trial. The District Court adopted the Nov. 29, 2012 Report and Recommendation on Jan. 3, 2013. The case before Judge Isgur is captioned, MICHAEL J. DURRSCHMIDT Plaintiff(s), v. FROST NATIONAL BANK, et al Defendant(s), Adv. Proc. No. 12-03177 (Bankr. S.D. Tex.). A copy of Judge Isgur's March 27, 2013 Memorandum Opinion is available at http://is.gd/hqf1KRfrom Leagle.com. R&K Fabricating, Inc., manufactures frac tanks. Ricardo Gonzalez is the principal owner of R&K. As a result of the 2008 financial crisis, R&K began receiving cancellation notices on tank orders and becoming delinquent on its accounts payable. This led to R&K filing a voluntary chapter 11 petition (Bankr. S.D. Tex. Case No. 10-33878) on May 5, 2010. Mr. Gonzalez filed an individual case (Case No. 10-33880) on the same day. On March 25, 2011, an Agreed Motion to Appoint Trustee was filed by the United States Trustee, and Michael Durrschmidt was named the Chapter 11 Trustee on March 31, 2011. RAINBOW LAND: Plan Confirmation Hearing Rescheduled to June 12 -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Nevada has rescheduled the confirmation hearing on Rainbow Land & Cattle Company's amended Chapter 11 Plan to June 12, 2013, at 1:30 p.m. The Bankruptcy Court approved the disclosure statement explaining the Debtor's Chapter 11 Plan of Reorganization. These dates were previously set by the Court: Plan Objection Deadline Feb. 22, 2013 Replies to Plan Objections March 1, 2013 Voting Deadline Feb. 22, 2013 Ballot Summary March 4, 2013 Plan Confirmation Hearing March 11, 2013 The Debtor intends to sell or refinance its property prior to the expiration of a deferral period of three years. Postpetition and during the Deferral Period, interest, attorneys' fees and other charges will continue to accrue on the Zions Bank and Heise Loans. The Plan designates four classes of claims. The Zions Bank allowed secured claim (Class 1) in the amount of $1,319,909 and the F. Heise Land & Livestock Company allowed secured claim (Class 2) of $809,092 will be paid in full in cash no later than the conclusion of the Deferral Period. Allowed unsecured claims (Class 3) will be paid on or before the conclusion of the Deferral Period. Holders of membership interests (Class 4) will retain their interests in the Reorganized Debtor, but will receive no distribution until Classes 1 through 3 are paid in full. A copy of the Amended Disclosures is available at: http://bankrupt.com/misc/rainbowland.doc93.pdf About Rainbow Land Rainbow Land & Cattle Company, LLC, is the owner of approximately 466 acres of undeveloped real property located in Caliente, Nevada, and approximately 133 acre feet of water appurtenant to the property. The Property was financed by Zions First National Bank at the time of the purchase. Rainbow Land filed a Chapter 11 petition (Bankr. D. Nev. Case No. 12-14009) on April 4, 2012. It scheduled $15.43 million in assets and $2.50 million in liabilities. The Debtor owns approximately 579.48 undeveloped acres of real property located in Caliente, Nevada, along with 466.79 acre feet of water rights. The Debtor is owned by John Huston, 45.2381%; Jan J. Cole, 45.2381%; and Clarence Burr, 9.52381%. Judge Bruce A. Markell presides over the case. The Law Offices of Alan R. Smith serves as bankruptcy counsel. The petition was signed by John H. Huston, managing member. Smith Larsen & Wixom represents Zions Bank as counsel. READER'S DIGEST: General Claims Bar Date Set for May 6 ------------------------------------------------------ Judge Robert D. Drain has set the general bar date for filing claims against RDA Holding Co. and its affiliates at May 6, 2013 at 5:00 p.m. (Eastern Time). In addition, the Governmental Bar Date is set on August 16, 2013 at 5:00 p.m. (Eastern Time). About Reader's Digest Reader's Digest is a global media and direct marketing company that educates, entertains and connects consumers around the world with products and services from trusted brands. For more than 90 years, the flagship brand and the world's most read magazine, Reader's Digest, has simplified and enriched consumers' lives by discovering and expertly selecting the most interesting ideas, stories, experiences and products in health, home, family, food, finance and humor. RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No. 13-22233) filed for Chapter 11 protection on Feb. 17, 2013 with an agreement with major stakeholders for a pre-negotiated chapter 11 restructuring. Under the plan, the Debtor will issue the new stock to holders of senior secured notes. RDA Holding Co. listed total assets of $1,118,400,000 and total liabilities of $1,184,500,000 as of the Petition Date. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Evercore Group LLC is the investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Reader's Digest, together with its 47 affiliates, first sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24, 2009 and exited bankruptcy Feb. 19, 2010. READER'S DIGEST: Can Pay Prepetition Wages and Salaries ------------------------------------------------------- The Bankruptcy Court has authorized RDA Holding Co. and its affiliates to pay prepetition wages, salaries, and other compensation and benefits; maintain employee benefits programs; and pay of related administrative obligations. The Court also directs applicable banks and other financial institutions to receive, process, honor, and pay all checks presented for payment and to honor all fund transfer requests. About Reader's Digest Reader's Digest is a global media and direct marketing company that educates, entertains and connects consumers around the world with products and services from trusted brands. For more than 90 years, the flagship brand and the world's most read magazine, Reader's Digest, has simplified and enriched consumers' lives by discovering and expertly selecting the most interesting ideas, stories, experiences and products in health, home, family, food, finance and humor. RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No. 13-22233) filed for Chapter 11 protection on Feb. 17, 2013 with an agreement with major stakeholders for a pre-negotiated chapter 11 restructuring. Under the plan, the Debtor will issue the new stock to holders of senior secured notes. RDA Holding Co. listed total assets of $1,118,400,000 and total liabilities of $1,184,500,000 as of the Petition Date. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Evercore Group LLC is the investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Reader's Digest, together with its 47 affiliates, first sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24, 2009 and exited bankruptcy Feb. 19, 2010. READER'S DIGEST: Can Continue Paying Insurance Obligations ---------------------------------------------------------- Judge Robert D. Drain has authorized RDA Holding Co. and its affiliates to maintain their insurance policies in accordance with practices and procedures that were in effect before the commencement of the Debtors' chapter 11 cases. The Debtors are authorized to pay all Insurance Obligations, including Brokers' Fees, arising under or relating to the Insurance Policies. Judge Drain directs all banks and other financial institutions at which the Debtors maintain their disbursement accounts are authorized and directed at the Debtors' direction, to receive, process, honor, and pay, to the extent of funds on deposit, any and all checks drawn or electronic fund transfers requested or to be requested by the Debtors in respect of the Insurance Obligations. The Debtors are authorized to issue new postpetition checks, or effect new electronic fund transfers, on account of the Insurance Obligations to replace any prepetition checks or electronic fund transfer requests that may be lost or dishonored or rejected as a result of the commencement of the Debtors' chapter 11 cases. About Reader's Digest Reader's Digest is a global media and direct marketing company that educates, entertains and connects consumers around the world with products and services from trusted brands. For more than 90 years, the flagship brand and the world's most read magazine, Reader's Digest, has simplified and enriched consumers' lives by discovering and expertly selecting the most interesting ideas, stories, experiences and products in health, home, family, food, finance and humor. RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No. 13-22233) filed for Chapter 11 protection on Feb. 17, 2013 with an agreement with major stakeholders for a pre-negotiated chapter 11 restructuring. Under the plan, the Debtor will issue the new stock to holders of senior secured notes. RDA Holding Co. listed total assets of $1,118,400,000 and total liabilities of $1,184,500,000 as of the Petition Date. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Evercore Group LLC is the investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Reader's Digest, together with its 47 affiliates, first sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24, 2009 and exited bankruptcy Feb. 19, 2010. RESIDENTIAL CAPITAL: Says FRB Review a Bankruptcy "Claim" --------------------------------------------------------- Residential Capital, in response to the objections raised by The Board of Governors of the Federal Reserve System, Ally Financial, Inc., and pro se creditor Frank Reed, maintain that their obligation to conduct the independent foreclosure review is a bankruptcy "claim" within the defined scope of Section 101(5)(B) of the Bankruptcy Code as a result of the changed landscape in their situation since the Petition Date. The Debtors add that the foreclosure review process represents the single greatest administrative expense of their estates. They estimate that the process will cost $374 million. "Because neither bankruptcy law nor the alleged purpose of the FRB Foreclosure Review is advanced by the continued payment of millions of dollars to professional consultants, the Court should confirm the classification of the obligation now so that the Debtors may end the immense cash drain on their estates," the Debtors argue in court papers. The Official Committee of Unsecured Creditors, meanwhile, stated in court papers it supports the Debtors' motion and believes the massive expenditure of estate resources on a process recognized to be wasteful and not beneficial to borrowers should cease immediately. Both the Debtors and the Committee point out that ResCap no longer own any operating business and thus no longer engage in mortgage servicing, foreclosure or similar activities in which there might be a legitimate public policy interest. They also ask the Court to overrule the objections and approve the motion. ResCap Should Negotiate Review Process, Court Says Steven Church, writing for Bloomberg News, reported that during the March 21 hearing on the Debtors' motion, Judge Martin Glenn suggested that the Debtors should try to negotiate a new foreclosure-review process with federal regulators before seeking a bankruptcy court order to halt the existing program. According to the Bloomberg report, Judge Glenn told ResCap that he won't rule immediately on the request to halt the review, which may yield $35 million to $60 million to homeowners who have been harmed. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Court Okays Claim Objection Procedures ----------------------------------------------------------- The Bankruptcy Court authorized Residential Capital LLC and its affiliates to establish procedures for claims objection, borrower claims, claims settlement, and for amending their schedules of assets and liabilities in order for to expedite the process of reconciling more than 6,400 filed claims and more than 1,000 scheduled claims, and reduce their administrative burden imposed on the Court and their estates. The Court also permitted the Debtors to establish procedures for the management and administration of adversary proceedings that have been filed or will be filed in the Chapter 11 cases by third party borrowers and former borrowers related to current or former residential mortgage loans. The proposed AP Procedures establish mechanisms for the efficient intake and review of the AP Actions, to be followed by an informal meeting with the AP Plaintiffs and a pre-trial status conference before the Court, all to take place before any of the parties to the AP Action are required to devote time and resources to litigation. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: FTI Rollover Period Extended to Dec. 31 ------------------------------------------------------------ Residential Capital LLC and its affiliates filed a Third Addendum to their engagement letter with FTI Consulting, Inc., to provide that the "Rollover Period" as defined in the engagement agreement will be extended from March 31, 2013, through and including December 31, 2013, subject to (i) further extension upon the written consent of the Official Committee of Unsecured Creditors. Residential Capital previously obtained approval from the U.S. Bankruptcy Court for the Southern District of New York to employ FTI Consulting Inc. as its financial adviser. The Rollover Provision refers to fees FTI is entitled to that are in excess of the previous monthly caps. The period during which the Rollover Provision is applicable is currently scheduled to expire on March 31, 2013. The Debtors believe that extension of the expiry date of the Rollover Provision is appropriate because, due to a change in circumstances, FTI has been required to expend time greater than was anticipated over periods different than projected at the outset of the Debtors' Chapter 11 cases. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: April 11 Hearing on Hudson, PwC & Pepper ------------------------------------------------------------- The Bankruptcy Court entered a fourth interim order authorizing the Debtors to compensate PricewaterhouseCoopers LLP for services it rendered in connection with the FRB foreclosure review. A final hearing on the Debtors' motion to compensate PwC is set for April 11, 2013. The Court entered a third interim order authorizing the Debtors to employ Hudson Cook, LLP, as their special counsel. A final hearing on the employment application is scheduled for April 11, 2013. The Court entered a fourth interim order authorizing the Debtors to employ Pepper Hamilton LLP as special foreclosure review counsel. A final hearing to consider the employment application is set for April 11, 2013. As reported in the Oct. 2 edition of the TCR, the Official Committee of Unsecured Creditors opposed the Debtors' request to pay $250 million in fees to PricewaterhouseCoopers for mortgage foreclosure review services raises serious questions regarding the best interests of the estates, not the least of which is why the Debtors -- or federal regulators, for that matter -- should prefer to continue these vast expenditures rather than to devise a more streamlined method to redirect more money to pay borrowers. The Creditors Committee has agreed for GMAC Mortgage LLC to pay PwC, and two other firms during the 90 days following entry of interim orders. The TCR reported in September 2012 that in connection with the agreement with Residential Capital, Ally Financial Inc. and Ally Bank to develop and implement risk management and corporate governance procedures in order to ensure prospective compliance with applicable foreclosure-related regulations and laws, Debtor GMAC Mortgage LLC agreed to pay for an extensive, independent file review regarding certain residential foreclosure actions and foreclosure sales prosecuted by the Debtors. Pepper Hamilton partner Gary Apfel, Esq., began representing Debtor GMAC Mortgage, LLC, and Ally Financial Inc. in connection with the Foreclosure Review in October 2011. Since that time, Mr. Apfel has been instrumental in providing legal advice and assistance to the independent consultant with respect to the bankruptcy workstream, the Debtors tell the Court. Pursuant to the FRB Foreclosure Review requirement, the Debtors hired PricewaterhouseCoopers, LLP, as independent consultant. PwC has been tasked with (i) working to plan and develop procedures for conducting the FRB Foreclosure Review; (ii) identifying loan populations for review; (iii) monitoring a borrower outreach complaint process; (iv) reviewing a sample of more than 5,000 loan files, as well as more than 12,000 borrower outreach complaints, for missing documentation or other issues; and (v) developing a recommended remediation in the event that PwC identifies errors. Hudson Cook began representing Debtor GMAC Mortgage, LLC, and Ally Financial in connection with a review of foreclosure and loan files in June 2011, focusing on four operational Foreclosure Review "workstreams." Since that time, Hudson Cook has been instrumental in providing legal advice and assistance to PricewaterhouseCoopers LLP with respect to the Foreclosure Review, the Debtors tell the Court. In the course of that work, the Debtors note, Hudson Cook has developed significant familiarity with the issues specific to the Foreclosure Review. The Debtors agreed to pay PwC according to the firm's hourly rates: Partner $630 Managing Director $610 Senior Manager/Director $470 Manager $370 Senior Associate $300 Associate $235 The Debtors estimated that the cost of the FRB Foreclosure Review could reach approximately $180 million, although based on subsequent events, it has become apparent that the costs of compliance with the FRB Foreclosure Review could increase well above that amount, perhaps reaching $250 million. The Debtors have sought the Court's authority to employ Hudson Cook, nunc pro tunc to May 14, 2012, for the firm to continue its Foreclosure Review services. Hudson Cook is providing legal assistance in connection with PwC's review of loan files. Hudson Cook will be paid a monthly pay of the greater of $50,000 and the dollar value of the time billed at the firm's rates. Hudson Cook's hourly rates range from $400 to $665 for partners; $240 to $375 for associates; and $185 to $230 for legal assistants. The firm will also be reimbursed for any out-of- pocket expenses it incurs. Pepper Hamilton will work with PwC to continue developing and refining the processes for the Foreclosure Review, and provide legal advice and assistance to PwC in connection with bankruptcy issues related to the Foreclosure Review. Pepper Hamilton will be paid according to its hourly rates of $675 to $850 for partners, $235 to $500 for associates, and $210 to $220 for paraprofessionals. Pepper Hamilton will also be reimbursed for any out-of-pocket expenses it incurs. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: 2 RMBS Suits Remanded to State Court --------------------------------------------------------- Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York issued two separate orders on March 20 remanding to state courts two lawsuits filed by purchasers of residential mortgage-backed securities issued and sold by Deutsche Bank AG, Deutsche Bank Securities, Inc., ACE Securities Corp., Deutsche Alt-A Securities, Inc. and DB Structured Products, Inc. Bayerische Landesbank, which purchased approximately $585 million of Defendants' RMBS in 14 issuing trusts between 2006 and 2007, and Sealink Funding, Ltd., which purchased approximately $960 million of Defendants' RMBS in nineteen issuing trusts between 2006 and 2007, allege in separate complaints that the Defendants created, issued, and/or sold RMBS that they claimed were supported by mortgages that complied with stated underwriting guidelines and were prudent investments. The Defendants allegedly knew the mortgages violated these standards and that the RMBS were not prudent investments. According to the Complaint, the Defendants, as the sponsors and underwriters of the RMBS, had exclusive access to information about the quality of the mortgage pools, including access to the loan files and the results of their own due diligence. In contrast, the Plaintiff alleges that it did not have access to the loan files or due diligence results and reasonably relied on the Defendants' representations regarding the quality of the mortgage pools backing the RMBS. The actions were originally filed in a New York state court. In November last year, the Defendants removed the actions to the U.S. District Court for the Southern District of New York on the basis that some of the trusts are "related to" the bankruptcy proceedings of two groups of non-defendants: Residential Capital, LLC, and its debtor affiliates acted as sponsor, depositor and/or issuer for some of the securitization trusts; and American Home Mortgage Holdings, Inc., originated and sold loans to Deutsche Bank that were securitized in some of the nineteen trusts. In their motion to remand, the Plaintiffs argue that the Bankruptcy Court should remand the case to New York state court for three reasons: (1) The Bankruptcy Court lacks "related to" subject matter jurisdiction under Sec. 1334(b) of Title 28 of the U.S. Code because (i) the mere filing of a proof of claim for indemnification does not create "related to" jurisdiction because a party cannot be indemnified for its own fraud; (ii) any effect of the Defendants' proofs of claim on the bankruptcy estate is speculative at best; (iii) none of the ResCap Debtors have sought to impact claims by third parties like the Plaintiffs against defendants that are not Debtors or affiliates; (iv) the actions cannot affect the AHM bankruptcy proceedings because a plan has already been confirmed; and (v) the Defendants' claims are contingent and unliquidated, and they will have to be either denied or reduced to a liquidated amount before there can be any effect on the bankruptcy estate. (2) Even if the Bankruptcy Court finds "related to" jurisdiction, mandatory abstention is required pursuant to Section 1334(c)(2) because each of the six factors in the applicable test are present in the cases. (3) Even if the Bankruptcy Court finds that "related-to" jurisdiction exists and mandatory abstention is not required, permissive abstention is warranted under Section 1334(c)(1) for several reasons: (i) none of the Defendants are debtors in the bankruptcy proceeding; (ii) state law issues overwhelmingly predominate; (iii) nearly all of the Defendants have their primary place of business in New York; and (iv) the outcome of the actions will not have any effect on the administration of a bankruptcy proceeding. Judge Glenn, in his rulings, concluded that the Bankruptcy Court has "related to" jurisdiction over the actions but the cases should nevertheless be remanded to state court based on permissive abstention. Judge Glenn explained that the outcome of the actions has a "conceivable effect" on the ResCap Chapter 11 proceeding because the ResCap Debtors may be obligated to indemnify the Defendants if they are found liable in the case. In addition, the ResCap Debtors may also be obligated to pay a portion of the Defendants' attorneys' fees in light of the proofs of claim timely filed by the Defendants against the ResCap Debtors. However, Judge Glenn said "not all cases properly removed to federal court based on Section 1334(b) jurisdiction must remain in federal court." He opined that the cases should be litigated in the New York Supreme Court, Commercial Division, in Manhattan because that court is already handling similar cases. In fact, another Bankruptcy Court has remanded to the Commercial Division several RMBS cases brought by the Plaintiffs. The cases, he said, can most efficiently be handled by the same judge in the same court. The cases are SEALINK FUNDING, LTD., Plaintiff, v. DEUTSCHE BANK AG, et al., Defendants, Case No. 12-12020 (MG), Adv. Proc. No. 12- 02051 (MG)(S.D.N.Y.)., and BAYERISCHE LANDESBANK, Plaintiff, v. DEUTSCHE BANK AG, et al., Defendants, Case No. 12-12020 (MG), Adv. Proc. No. 12-01884 (MG)(S.D.N.Y.). The Plaintiffs are represented by: David L. Wales, Esq. Rebecca E. Boon, Esq. Katherine A. Stefanou, Esq. BERNSTEIN LITOWITZ BERGER & GROSSMAN LLP 1285 Avenue of the Americas New York, NY 10019 Tel: 212-554-1400 Fax: 212-554-1444 E-mail: DWales@blbglaw.com Rebecca.Boon@blbglaw.com katherine.stefanou@blbglaw.com The Defendants are represented by: David J. Woll, Esq. Isaac M. Rethy, Esq. SIMPSON THACHER & BARTLETT LLP 425, Lexington Avenue New York, NY 10017 Tel: 212-455-2000 Fax: 212-455-2502 E-mail: dwoll@stblaw.com jrethy@stblaw.com - and - Richard Owens, Esq. LATHAM & WATKINS LLP 885 Third Avenue New York, NY 10022-4834 Tel: 212-906-1396 E-mail: richard.owens@lw.com About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). REVEL AC: Has Approval for Interim Loan With $20MM Fresh Cash ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Revel casino in Atlantic City, New Jersey, commenced a prepackaged Chapter 11 reorganization on March 25 and received interim approval of a loan from the U.S. Bankruptcy Judge in Camden, New Jersey. The interim loan, provided by some of the existing lenders, includes $20 million in fresh cash. The entire loan of $250 million will be up for approval at an April 18 hearing. The loan is evenly divided between a revolving credit and term loan. It includes the conversion of pre-bankruptcy debt into a loan incurred during the Chapter 11 process. About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. Revel AC Inc. along with four affiliates sought bankruptcy protection (Bankr. D.N.J. Lead Case No. 13-16253) on March 25, 2013, in Camden, New Jersey, with a prepackaged plan that reduces debt by $1.25 billion. Revel's legal advisor in connection with the restructuring is Kirkland & Ellis LLP. Alvarez & Marsal serves as its restructuring advisor and Moelis & Company serves as its investment banker for the restructuring. Epiq Bankruptcy Solutions is the claims and notice agent. Already accepted by creditors, Revel's reorganization plan is designed to reduce debt for borrowed money by 82 percent, from $1.52 billion to $272 million. For a projected 19 percent recovery, holders of an $896 million secured term loan are to receive all the new equity. General unsecured creditors are to be paid in full. REVOLUTION DAIRY: Panel Balks at Cash Use, Critical Vendors' Claim ------------------------------------------------------------------ The Official Committee of Unsecured Creditors in the Chapter 11 case of Revolution Dairy, LLC, et al., last month conveyed objections to the Debtors' motion for an order (i) authorizing use of cash collateral from Feb. 16, 2013, to March 31, 2013; (ii) authorizing payment of prepetition claims to certain critical vendors; (iii) authorizing interim payments to accountants and attorneys. The Committee stated that, among other things: I. It is too early in the case to make any final decisions regarding the perfection or enforceability of specific liens, especially liens relating to the allegedly secured creditors identified in the cash collateral motion. II. The Debtors have failed to establish that certain vendors are "critical vendors." III. The Debtors' request related to reclamation rights under Section 546(c) is vague and ambiguous. The Committee related that its counsel has not had the opportunity to fully review underlying loan documents, analyze asserted liens, determine perfection issues, and research other matters potentially relevant to the cash collateral motion. Accordingly, in addition to the limited objections, the Committee expressly reserves the right to assert additional objections to the cash collateral motion and the relief reflected therein as new information is discovered. Rabo Agrifinance, Inc., the major secured creditor also objected to the motion for use of cash derived from the sale of milk and the sale of surplus cattle (cull cows and calves) and surplus feed, by the dairies. RAF recognizes and agrees that the Debtors must use certain amounts of RAF's cash collateral for their operations in order to keep the Debtors' dairy herds healthy and producing milk. However, the Debtors' other cash collateral requests (such as paying so called "critical vendors" on account of their prepetition claims and funding retainers for the Debtors' counsel and counsel for the Committee) go beyond what is authorized by the Bankruptcy Code, and must be denied. RAF also notified the Court that it does not consent to the Debtor's use of cash collateral absent acceptable cash collateral agreement and adequate protection stipulation. The Debtor, in its motion, requested for authorization to: a. use cash proceeds by dairy to pay expenses incurred by the Debtors postpetition in the ordinary course of business for the period Feb. 16, to March 31; b. pay certain prepetition claims to these critical vendors: 1. IFA (feed); 2. Judd Harward (hay); 3. each of the farmers providing silage; 3. Dr. Ekins (veterinary services); 4. Jim Huggard (boiler plumber); 5. Sandra Lister (secretary); 6. G&L (propane provider); 7. Verizon Wireless; 8. Worker Compensation Fund; and c. waive formal notice under Section 546(c) from the Vendors who have provided feed inventory, livestock and fuel within 45 days prior to the Petition Date and which was still in existence and in the possession of the Debtors as of the petition date. According to the Debtor, Rabo enjoys an equity cushion of approximately $3 million. In addition, the cash collateral sought to be used will produce additional milk proceeds in an amount more than the cash collateral used. A copy of the budget is available for free at http://bankrupt.com/misc/REVOLUTIONDAIRY_cashcoll.pdf Previously, the Hon. R. Kimball Mosier authorized the interim use of cash collateral, granting of replacement liens for secured creditors, partial payment of prepetition claim of Judd Harward and provisional retainer deposits to proposed accountants. The secured creditors consist of Rabo Agrifinance, Inc.; Metropolitan Life Insurance Company; Delta cache, LLC; Cargill, Inc.; and Intermountain Farmers Association. As adequate protection from any diminution value of the lender's collateral, the Debtor will grant the secured creditors a replacement lien in postpetition property acquired. Additionally, in accordance to the cash collateral budget, the Debtors were authorized to pay $100,000 on account of the prepetition claim of Judd Harward. The Debtors were also authorized to employ Genske, Mulder & Co., as accountants, the Debtors are authorized to fund an initial postpetition retainer deposit of $3,000 per Debtor and, in additional, a monthly retainer deposit of $3,000 per Debtor/month. About Revolution Dairy Revolution Dairy LLC is one of the largest dairy farms in Utah. Revolution Dairy and affiliate Highline Dairy, LLC, filed bare- bones Chapter 11 petitions (Bankr. D. Utah Case Nos. 13-20770 and 13-20771) in Salt Lake City on Jan. 27, 2013. Each of the Debtors estimated $10 million to $50 million in assets and liabilities. Managers of Revolution and Highline -- Robert and Judith Bliss -- also sought Chapter 11 protection (Case No. 13-20772). Revolution Dairy, LLC, is represented by Prince, Yeates & Geldzahler. Highline Dairy is represented by Parsons Kinghorn & Harris. Robert and Judith Bliss are represented by Berry & Tripp. The Debtors have sought joint administration of their cases. The U.S. Trustee appointed five members to the official committee of unsecured creditors in the Chapter 11 case of Revolution Dairy LLC, Highline Dairy, LLC; and Robert and Judith Bliss, dba Bliss Dairy. REVSTONE INDUSTRIES: Files Schedules of Assets and Liabilities -------------------------------------------------------------- Affiliates of Revstone Industries LLC filed their schedules of assets and liabilities with the Bankruptcy Court, disclosing: Company Assets Liabilities ------- ------ ----------- Greenwood Forgings, LLC $17,810,867 $11,366,138 US Tool & Engineering, LLC $1,071,250 $10,363,938 Lead debtor Revstone Industries disclosed $29,484,422 in assets and $138,214,348 in liabilities in its own schedules. Copies of the schedules are available for free at http://bankrupt.com/misc/RevstoneIndustries_SAL1.pdf http://bankrupt.com/misc/RevstoneIndustries_SAL2.pdf A previous request by Greenwood Forging and US Tool & Engineering faced an objection from the statutory committee of unsecured creditors. 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. RHYTHM & HUES: Court Approves Sale to Rival Prana Studios --------------------------------------------------------- Ben Fritz, writing for The Wall Street Journal, reports that Rhythm & Hues Studios Inc., has been acquired by 34x118 Holdings Inc., an affiliate of competitor Prana Studios Inc., which emerged the winner from a bankruptcy auction that ended late Thursday night and was approved by a judge on Friday. The winning bid, according to the report, included: * $1.2 million of cash, * assumption of the outstanding balance on debtor-in-possession financing of up to $17 million, and * certain other payment and debt obligations. The report notes Houlihan Lokey Capital Inc., which managed the sales process, received five bids by a deadline of March 22. Of those, three were deemed "qualified bidders." The other qualified bidders included Brave Vision Investments Limited, which is connected to Chinese-American film distributor China Lion Film Distribution Inc. and visual effects firm Prime Focus, a unit of India's Prime Focus Ltd. The report says South Korean media firm JS Communications Co. was named the stalking horse bidder in early March with an offer worth $17 million. However, the company decided not to proceed, leaving Rhythm & Hues without a floor for offers as the auction process began Wednesday. According to a Bloomberg News report last month, JS signed a letter of intent to buy the business and pay off the bankruptcy financing. In addition, JS agreed to pay $1 million cash. Together with other assets, R&H predicted that the sale would pay $1.5 million of expenses in Chapter 11, $2.8 million in priority claims, while leaving enough cash for a 5.8% recovery by unsecured creditors. The WSJ report notes Prana's winning bid also had to be approved by Twentieth Century Fox, owned by News Corp., and Universal Pictures, owned by Comcast Corp., the two studios that provided DIP financing to Rhythm & Hues. Prana, which has offices in Los Angeles and Mumbai, does visual effects and animation work including the coming "Cars" spinoff "Planes" for Walt Disney Co. "While remaining a stand-alone company focusing on cutting-edge visual effects and innovative technology, R&H will be complemented by Prana's world-class long-form animation," Prana senior vice president of visual effects Jeffrey A. Okun said in a statement, according to WSJ. About Rhythm and Hues Rhythm and Hues, Inc., aka Rhythm and Hues Studios Inc., filed its Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-13775) in Los Angeles on Feb. 13, 2013, estimating assets ranging from $10 million to $50 million and liabilities ranging from $50 million to $100 million. Judge Neil W. Bason oversees the case. Brian L. Davidoff, Esq., C. John M Melissinos, Esq., and Claire E. Shin, Esq., at Greenberg Glusker, serve as the Debtor's counsel. Houlihan Lokey Capital Inc., serves as investment banker. The petition was signed by John Patrick Hughes, president and CFO. R&H provided visual effects and animation for more than 150 feature films and has received Academy Awards for Babe and the Golden Compass, an Academy Award nomination for The Chronicles of Narnia and Life of Pi. R&H owned a 135,000 square-foot facility in El Segundo, California, and had more than 460 employees. Key clients Universal City Studios LLC and Twentieth Century Fox, a division of Twentieth Century Fox Film Corporation, provided DIP financing. They are represented by Jones Day's Richard L. Wynne, Esq., and Lori Sinanyan, Esq. RIVER-BLUFF ENTERPRISES: Court Dismisses Ch. 11 Case ---------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California dismissed and closed the Chapter 11 case of River?Bluff Enterprises, Inc. River-Bluff Enterprises, Inc., filed a Chapter 11 petition (Bankr. E.D. Cal. Case No. 12-92017) in Modesto, Cal. on July 20, 2012. The Debtor estimated assets of $10 million to $50 million and liabilities of at least $1 million. Judge Ronald H. Sargis presides over the case. David C. Johnston, Esq., at Johnston & Johnston, serves as bankruptcy counsel. The Debtor disclosed $15,629,454 in assets and $10,081,740 in liabilities as of the Chapter 11 filing. The petition was signed by Roger Haney, president. ROVI CORP: Loan Repricing No Impact on Moody's 'Ba3' CFR -------------------------------------------------------- Moody's Investors Service said Rovi Corporation's proposed amendment to reduce pricing on US$540 million of existing senior secured term loan B credit facility is modestly credit positive. If successful, the company will realize approximately US$2 to US$5 million in annual interest expense savings. However, Rovi's Ba3 corporate family rating and the Ba2 ratings for its senior secured credit facilities are not affected at the present time as the anticipated savings are very small relative to Rovi's US$1.4 billion of outstanding debt and the company continues to face challenges in offsetting the decline in its legacy analog video protection business through growth in new product categories. Headquartered in Santa Clara, California, Rovi Corporation provides integrated solutions to media entertainment market. SAND SPRING: Asks Court to Extend Plan Filing Until April 25 ------------------------------------------------------------ Sand Spring Capital III, LLC, et al., ask the U.S. Bankruptcy Court for the District of Delaware to extend the Debtors' excusive periods to file a Chapter 11 plan and to solicit acceptances of that plan through and including April 25, 2013, and June 25, 2013, respectively. On Nov. 15, 2012, the Court entered its fourth order extending the Debtors' Exclusive Plan Filing Period to Feb. 28, 2013, and the Debtors' Exclusive Solicitation Period to May 13, 2013. The Debtors told the Court that since the entry of the Fourth Extension Order, the Debtors and their advisors have continued to work diligently toward a resolution of these cases. According to the Debtors, there have been numerous negotiations and discussions with various parties in interest regarding a Chapter 11 plan that can be supported by the Debtors' stakeholders. The parties in interest have received copies of Chapter 11 plan drafts, and the Debtors continue to review and consider comments. The Debtors believe that it is imperative that they file a plan that is confirmable to end the litigation and outrageous costs necessarily caused thereby, and to deliver to investors the value that was originally intended by the commencement of the cases. The Debtors said that they continue to prepare for the hearing to estimate the Debtors' alleged indemnification obligations to Cantor Fitzgerald & Co., which litigation has exacerbated the costs being born by the Debtors and their estates. These preparations include considerable discovery obligations, significant pretrial issues, and extensive trial preparations. In the event that the Debtors' are unable to finalize a consensual plan, the estimation of the Debtors' alleged indemnification obligations may represent a considerable matter in the cases, and the outcome of the estimation hearing may provide the Debtors with additional information that could be necessary to confirm a plan. Since the entry of the Fourth Extension Order, the Debtors have also continued to focus on the administration of their estates. The Debtors have, among other things: (i) continued to work to maximize the value of their investment holdings, which efforts have included analyses regarding the value and plan for certain of the Debtors' non-Collybus investments; (ii) obtained court approval of a second return of investor principal; (iii) corresponded with their investors regarding the progress of the cases; and (iv) conducted weekly teleconferences with and forwarded information upon request to the Committee of Unsecured Creditors and other parties in interest. About Sand Spring Nine funds advised by Commonwealth Advisors Inc. of Baton Rouge, Louisiana, sought Chapter 11 protection on Oct. 25, 2011, after failing to work out a reorganization plan acceptable to all investors. Lead Debtor is Sand Spring Capital III, LLC (Bankr. D. Del. Case No. 11-13393). Kenneth J. Enos, Esq., at Young, Conaway, Stargatt & Taylor, Wilmington, Delaware serves as counsel to the Debtors. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The funds were formed from 2005 to 2007 under Walter Morales, president and chief investment manager, and attracted 456 investors, according to filings in U.S. Bankruptcy Court in Wilmington, Delaware. Last year, investors filed class-action and derivative suits alleging mismanagement, misrepresentation, and breach of fiduciary duty. According to Bloomberg News, the U.S. Securities and Exchange Commission initiated a formal investigation in July 2009. The funds were unable or unwilling to satisfy investors' redemption demands, which would have required liquidation of "their holdings in an illiquid market and at depressed prices." The funds, Commonwealth and Morales negotiated a prepackaged Chapter 11 plan, which was accepted by all classes of creditors except one. Because third-party contributions required unanimous approval, the funds said they filed in Chapter 11 so they could have "further discussions with their investors with the oversight of this court." SCOTLAND-COLORADO: Bloomfield Awarded $115,460 in Fees ------------------------------------------------------ Bankruptcy Judge Thomas E. Carlson awarded the Bloomfield Law Group, Inc., counsel to Scotland-Colorado, LLC, $115,460 for fees and expenses incurred as counsel for the Debtor, over the objections of Robert Howie and Brenda Hally, the sole members of the Debtor. Bloomfield seeks allowance of total fees and expenses in the amount of $152,291. That amount includes $86,716 in fees and expenses awarded on Bloomfield's first interim fee application, of which the Debtor has paid $61,432. Bloomfield seeks an additional $65,875 in fees and costs in its final fee application. The Howies contend Bloomfield should be denied all fees. They contend that Bloomfield committed malpractice by giving the couple bad advice as to how to save the Residence. The Howies contend that Bloomfield had an attorney-client relationship with them, as well as with the LLC. They contend they made known to Bloomfield that their first priority was to save the Howies' residence. They contend that Bloomfield breached the standard of care in advising them to transfer the Residence to the Debtor postpetition. The Howies also contend that the fee sought is unreasonably large in light of the nature of the case and the results achieved. Scotland-Colorado's principal assets consist of heavily encumbered real property. The Debtor filed a chapter 11 petition (Bankr. N.D. Cal. Case No. 11-30246) on Jan. 23, 2011, to stop a foreclosure on one of those properties. The Debtor listed under $10 million in both assets and debts. Judge Thomas E. Carlson oversees the case. Neil Jon Bloomfield, Esq. -- njbloomfield@njblaw.com -- serves as the Debtor's counsel. The petition was signed by Robert J. Howie, manager. In its schedules, the Debtor listed these properties: (a) three single-family rental homes in Colorado, each with equity of $13,000 or less; (b) vacant land in Lodi, California valued at $300,000 and subject to secured debt of $620,000; (c) a warehouse in Oakland, California valued at $400,000 and subject to secured debt of $887,000; and (d) an unspecified percentage interest in the Howies' residence, which property was valued at $2 million and subject to secured debt of $2.7 million. The junior encumbrances on the Lodi and Oakland properties had been guaranteed by the Howies. Neither Debtor nor the Howies had sufficient income to pay full debt service going forward on the Lodi property, the Oakland property, or the Residence. Robert Howie is an experienced trial lawyer. He participated actively with Bloomfield in developing a strategy for saving the properties. The basic approach they decided upon was to rely upon the automatic stay to stop collection, and hope that the real estate market would recover, that Robert Howie's income would increase, and/or that lenders would renegotiate various loans on terms favorable to the Debtor. Bloomfield prepared four different reorganization plans, none of which were confirmed. The Debtor and the Howies were able to resolve some of their financial difficulties without confirming a plan. They were able to keep the Colorado properties, none of which had been seriously in default. They were also able to obtain a release of the personal guarantee executed by the Howies, by surrendering the Lodi and Oakland properties to the lender. They were not, however, able either to confirm a plan restructuring the debt on the Residence or to reach an agreement with the senior lender that would enable them to keep the Residence. It is the failure to save the Residence that is the source of the Howies' dissatisfaction with Bloomfield. "It is difficult to see how the Residence could ever have been saved," according to Judge Carlson in last week's ruling. At the time the Debtor filed its chapter 11 petition, the arrears under the senior loan against the Residence were $88,000. Neither the Debtor nor the Howies had sufficient income to make regular debt-service payments going forward, let alone cure the large arrearage. Robert Howie hoped that the delay created by the automatic stay would induce the senior lender voluntarily to modify the loan and/or that the income from Robert Howie's law practice would rise sufficiently to fund resumption of payments. Neither happened. Title to the Residence was in the name of the Howies at the time the Debtor filed its chapter 11 petition. It was Robert Howie who suggested that the Debtor had an interest in the Residence. He told Bloomfield that part of the purchase price had been paid with the Debtor's funds. That the Debtor claimed an ownership interest in the Residence meant that the Residence was protected by the automatic stay without the Howies having to file bankruptcy themselves. A one-half interest in the Residence was formally conveyed to the Debtor post-petition. According to Judge Carlson, the Debtor and the Howies would have faced great obstacles in reinstating the loans on the Residence, whether ownership was shared by the Howies and the Debtor, or whether title was held by the Howies alone. Chase (the holder of the senior loan against the Residence) successfully objected to confirmation of a plan proposing to restructure the senior debt on two grounds: that the Debtor's plan could not modify the obligations of non-debtors (the Howies); and that the plan was not filed in good faith, because the Howies' postpetition transfer to the Debtor was an inappropriate attempt to avoid the bar on modification of debt secured only by their principal residence. The Howies contend that they were harmed by Bloomfield failing to warn them not to transfer the Residence to the Debtor. But Judge Carlson said the Howies would have been precluded by 11 U.S.C. section 1123(b)(5) from modifying their obligation to Chase even if they had retained full title to the Residence and filed their own bankruptcy petition. They would have been permitted to cure the arrearage while they made regular payments going forward, but they lacked sufficient income to do so. A copy of Judge Carlson's March 28, 2013 Memorandum Decision is available at http://is.gd/QTQqVefrom Leagle.com. SEAGIRT EQUITIES: Case Summary & 10 Unsecured Creditors ------------------------------------------------------- Debtor: Seagirt Equities, LLC 5150 Overland Avenue Culver City, CA 90230 Bankruptcy Case No.: 13-17597 Chapter 11 Petition Date: March 22, 2013 Court: U.S. Bankruptcy Court Central District of California (Los Angeles) Judge: Barry Russell Debtors' Counsel: Jerome Bennett Friedman, Esq. FRIEDMAN LAW GROUP, P.C. 1900 Avenue of the Stars, 11th Floor Los Angeles, CA 90067-4409 Tel: (310) 552-8210 Fax: (310) 733-5442 E-mail: jfriedman@jbflawfirm.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $10,000,001 to $50,000,000 Affiliates that simultaneously filed for Chapter 11 protection: Debtor Case No. ------ -------- Smith Street Realty, LLC 13-17596 Assets: $1,000,001 to $10,000,000 Debts: $10,000,001 to $50,000,000 Smith Warren, LLC 13-17599 Assets: $1,000,001 to $10,000,000 Debts: $10,000,001 to $50,000,000 1870 Realty, LLC 13-17600 Assets: $1,000,001 to $10,000,000 Debts: $10,000,001 to $50,000,000 Executive Commercial Properties at 13-17601 Nostrand, LLC Boneh Construction Corp. 13-17602 KFM Holdings Corp. 13-17603 The petitions were signed by Renee Davis, president of JAM Property Management, Inc., manager. A. A copy of Smith Street Realty's list of its 19 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/cacb13-17596.pdf B. A copy of Seagirt Equities' list of its 10 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/cacb13-17597.pdf C. A copy of Smith Warren's list of its 19 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/cacb13-17599.pdf D. A copy of 1870 Realty's list of its 11 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/cacb13-17600.pdf SELECT TREE: Creditors Have Until April 15 to File Proofs of Claim ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of New York established April 15, 2013, as the deadline for any individual or entity to file proofs of claim against Select Tree Farms, Inc. The Court also set May 15, 2013, as governmental units' bar date. About Select Tree Farms Select Tree Farms, Inc., filed a Chapter 11 petition (Bankr. W.D.N.Y. Case No. 12-10669) on March 7, 2012. Select Tree Farms scheduled $11,450,989 in assets and $5,959,983 in liabilities. The petition was signed by George A. Schichtel, president. The Debtor's owner, George A. Schichtel and Debra G. Schichtel, filed for Chapter 11 bankruptcy on the same day (Bankr. W.D.N.Y. Case No. 12-10670). Ms. Schichtel suffered a stroke around October 2012 and became comatose and was intubated. She passed away Nov. 14, 2012. Judge Carl L. Bucki presides over the case. William F. Savino, Esq., and Beth Ann Bivona, Esq., at Damon Morey LLP, serve as the Debtors' counsel. NextPoint LLC serves as the Debtors' financial advisor. Garry M. Graber, Esq., and Steven W. Wells, Esq., at Hodgson Russ LLP, represent Evans Bank, N.A., the primary secured creditor. SINCLAIR BROADCAST: Offering $600MM Sr. Notes at 100% Par Value --------------------------------------------------------------- Sinclair Broadcast Group, Inc.'s wholly-owned subsidiary, Sinclair Television Group, Inc., is offering $600 million aggregate principal amount of Senior Unsecured Notes. The Notes are expected to mature in 2021 and to be guaranteed by Sinclair and certain of Sinclair's subsidiaries. STG has priced the offering at 100% of their par value and will bear interest at a rate of 5.375% per annum payable semi-annually on April 1 and October 1, commencing Oct. 1, 2013. The net proceeds from the private placement of Notes are intended to pay down outstanding indebtedness under STG's bank credit facility. This private placement of Notes is conditioned on customary closing conditions. This private placement of Notes is expected to close on April 2, 2013, subject to customary closing conditions. Credit Facility Refinancing STG intends to refinance its existing bank credit facility via an amendment and restatement to raise new term loan and revolving commitments and to introduce increased operating flexibility into the new bank credit facilities. Sinclair is seeking $900 million of new term loans, which is expected to consist of $500 million in new term A loans maturing April 2018 and $400 million in new term B loans maturing April 2020. In addition, Sinclair will seek to obtain a new $100 million revolving line of credit maturing April 2018. The new term loans, cash on hand or a draw under the new revolving line of credit, are expected to be used refinance amounts outstanding under the existing bank credit facility and to fund the previously announced acquisitions of the Barrington Broadcasting Group and certain of the Cox Media Group television stations, which acquisitions are expected to close in the second quarter of 2013. Due to timing related to the closing and funding of the acquisitions, approximately $445 million of the new term loan commitments are expected to be drawn on a delayed basis. In connection with this refinancing, Sinclair will seek to introduce additional operating flexibility into the new bank credit facilities, including, increased incremental loan capacity, increased television station acquisition capacity and increased flexibility under the negative covenants. About Sinclair Broadcast Based in Baltimore, Maryland, Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) -- http://www.sbgi.net/-- one of the largest and most diversified television broadcasting companies, currently owns and operates, programs or provides sales services to 58 television stations in 35 markets. The Company's television group reaches roughly 22% of U.S. television households and includes FOX, ABC, CBS, NBC, MNT, and CW affiliates. The Company's balance sheet at Dec. 31, 2012, showed $2.72 billion in total assets, $2.82 billion in total liabilities and a $100.05 million total deficit. "Any insolvency or bankruptcy proceeding relating to Cunningham, one of our LMA partners, would cause a default and potential acceleration under the Bank Credit Agreement and could, potentially, result in Cunningham's rejection of our seven LMAs with Cunningham, which would negatively affect our financial condition and results of operations," the Company said in its annual report for the period ended Dec. 31, 2012. * * * As reported by the TCR on Feb. 24, 2011, Standard & Poor's Ratings Services raised its corporate credit rating on Hunt Valley, Md.- based TV broadcaster Sinclair Broadcast Group Inc. to 'BB-' from 'B+'. The rating outlook is stable. "The 'BB-' rating on Sinclair reflects S&P's expectation that the company could keep its lease-adjusted debt to EBITDA below historical levels throughout the election cycle, absent a reversal of economic growth, meaningful debt-financed acquisitions, or significant shareholder-favoring measures," explained Standard & Poor's credit analyst Deborah Kinzer. In September 2010, Moody's raised its ratings for Sinclair Broadcast and subsidiary Sinclair Television Group, Inc., including the Corporate Family Rating and Probability-of-Default Rating, each to Ba3 from B1, and the ratings for individual debt instruments. Moody's also assigned a B2 (LGD 5, 87%) rating to the proposed $250 million issuance of Senior Unsecured Notes due 2018 by STG. The Speculative Grade Liquidity Rating remains unchanged at SGL-2. The rating outlook is now stable. SMART TECHNOLOGIES: Moody's Withdraws 'Caa1' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service has withdrawn all ratings on SMART Technologies Inc. as the ratings were based on a proposed senior secured notes offering that was cancelled on March 26. The affected ratings consist of a Caa1 corporate family rating, Caa1- PD probability of default rating, Caa1 senior secured notes rating, and SGL-3 speculative-grade liquidity rating. SMART Technologies Inc. is a leading global provider of interactive displays (whiteboards, flat panels and projectors) largely for the K-12 school market, but also for business use. Revenue for the twelve months ended December 31, 2012 was $632 million, with about 63% generated in North America, 28% in Europe, Middle East and Africa, and the remaining 9% from the rest of the world. SMART is headquartered in Calgary, Alberta, Canada. SMART ONLINE: Chief Financial Officer Resigns --------------------------------------------- Thaddeus J. Shalek notified the Board of Directors of Smart Online, Inc., of his resignation from his positions with the Company, including as Chief Financial Officer, effective as of April 1, 2013. The Board accepted Mr. Shalek's resignation and has not elected a new Chief Financial Officer to replace him at this time. About Smart Online Durham, North Carolina-based Smart Online, Inc., develops and markets a full range of mobile application software products and services that are delivered via a SaaS/PaaS model. The Company also provides Web site and mobile consulting services to not-for- profit organizations and businesses. The Company's balance sheet at Sept. 30, 2012, showed $1.9 million in total assets, $27.8 million in total liabilities, and a stockholders' deficit of $25.9 million. Cherry, Bekaert & Holland, L.L.P., in Raleigh, North Carolina, expressed substantial doubt about Smart Online's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31 2011. The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficiency as of Dec. 31, 2011. SMITH AUDIO: Court Declines IRS's Bid to Vacate Plan Order ---------------------------------------------------------- Bankruptcy Judge Janice Miller Karlin denied the request of the United States of America, on behalf of the Internal Revenue Service, to set aside the confirmation of Smith Audio Visual, Inc.'s Chapter 11 plan. According to the IRS, Smith Audio did not properly serve a copy of its disclosure statement and plan on the IRS, which prevented the IRS from timely objecting to the treatment of its claims under the plan. The IRS seeks to vacate the Journal Entry of Confirmation entered on Aug. 15, 2012. According to Judge Karlin, "In denying relief to the IRS, the Court does not imply that the IRS acted with bad faith or intentionally sat on its rights with respect to this claim. The Court is also not condoning Smith Audio's failure to comply with the local rule requiring service at a particular address and requiring notice to the United States Attorney. Instead, the Court is focused more squarely on the need for finality in the Chapter 11 confirmation process, and on the concepts of due process. IRS had clearly submitted itself to this Court's jurisdiction with respect to its claim when it filed its proof of claim, and was required to act accordingly. Had the IRS timely sought relief from the order confirming the plan and approving the disclosure statement after being properly served with those pleadings by the BNC at the very electronic address it selected -- rather than waiting well over two months to seek relief -- the outcome of this matter may have been different. This is especially true given the fact that it was Smith Audio's failure to follow the local rule and to serve pleadings at the address requested in IRS' proof of claim that exacerbated the problem, and given the apparent windfall that it may receive as a result. As it stands, however, the Court finds that the extraordinary relief IRS seeks under [Fed.R.Bankr.P.] Rule 60(b) is not appropriate in this case and denies the IRS' motion." IRS filed a proof of claim, indicating that its total claim was for $178,525.41 -- $153,641 was secured by property of Smith Audio, $24,084.31 was entitled to priority treatment, and $799.96 was unsecured non-priority debt. IRS later amended its proof of claim on Sept. 25, 2012 -- more than a month after plan confirmation -- to remove any secured claim and to assert that $128,960 of the $178,525 debt was entitled to priority treatment, with the remainder being a general unsecured claim. Smith Audio filed its Chapter 11 plan on June 11, 2012. The Court confirmed the plan at a hearing held on Aug. 8, 2012. In its plan, Smith Audio placed the IRS' unsecured priority claim in Class 4, and indicated that it would be paid $24,084 together with interest at the rate of 4.5%. This amount is equal to the amount of the priority claim asserted by the IRS in its initial proof of claim. The plan did not recognize a secured claim by the IRS, treating the remainder of its claim as a general unsecured claim under Class 9. The plan provided that Class 9 creditors would receive 50% of the amount of their claims, with no interest. A copy of the Court's March 28, 2013 Memorandum Opinion and Order is available at http://is.gd/QjokJofrom Leagle.com. Smith Audio Visual, Inc., filed for Chapter 11 bankruptcy (Bankr. D. Kan. Case No. 11-42026) on Dec. 16, 2011, listing under $1 million in both assets and debts. A copy of the petition is available at http://bankrupt.com/misc/ksb11-42026.pdf Charles T. Engel, Esq. -- chuck@engellawpa.com -- at Engel Law, P.A. SOMERSET PROPERTIES: Gets 26th Interim Access to Cash Collateral ---------------------------------------------------------------- In February, the Hon. Stephani W. Humrickhouse of the U.S. Bankruptcy Court for the Eastern District of North Carolina, in a 26th interim order, authorized Somerset Properties SPE, LLC's continued access to $620,372 of cash collateral. The Court also ordered that the Debtor will segregate cash collateral and not commingle any other funds with cash collateral in the DIP account. A copy of the budget is available for free at http://bankrupt.com/misc/SOMERSETPROPERTIES_cashcoll_order.pdf As reported in the Troubled Company Reporter on June 26, 2012, CSFB 2001-CP4 Bland Road, LLC, and CSFB 2001-CP4 Falls of Neuse, LLC, claim to be the current holders of loans to Somerset, each in the original principal amount of $15,500,000, and further claim that the Loans are secured by liens on all of Somerset's assets. CSFB 2001-CP4 Bland Road, LLC, and CSFB 2001-CP4 Falls of Neuse, LLC, claim to be North Carolina limited liability companies created for and owned by a securitized trust that purchased the Loans from the original lender and to whom the Loans were transferred and assigned by the Trust in anticipation of foreclosure. LNR Partners, LLC, is the "Special Servicer" of the Loans, and the non-owner manager and representative of CSFB 2001-CP4 Bland Road, LLC and CSFB 2001-CP4 Falls of Neuse, LLC. Midland Loan Services, Inc., is the "Master Servicer" of the Loans, asserts that it is not a manager or representative of CSFB 2001-CP4 Bland Road, LLC, and CSFB 2001-CP4 Falls of Neuse, LLC, and asserts no interest in cash collateral. The Debtor disputes the claims of the lenders and Midland. Pursuant to the order, the lenders are granted liens in all of the Debtor's postpetition leases, rents, royalties, issues, profits, revenue, income, deposits, securities, and other benefits of the Properties to the same extent, priority, and perfection as they have in that collateral pre-petition. About Somerset Properties Raleigh, North Carolina-based Somerset Properties SPE, LLC, owns six office buildings in Raleigh, North Carolina. The Company filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 10-09210) on Nov. 8, 2010. William P. Janvier, Esq., at Janvier Law Firm, PLLC, in Raleigh, N.C., represents the Debtor as bankruptcy counsel. The law firm of Blanchard, Miller, Lewis & Isley, P.A., in Raleigh, N.C., is the Debtor's special counsel. The Company disclosed $36.50 million in assets and $28.83 million in liabilities as of the Chapter 11 filing. SOUTHERN FOREST: Case Dismissed Due to Failure to File Plan, MORs ----------------------------------------------------------------- The Hon. William R. Sawyer of the U.S. Bankruptcy Court for the Middle District of Alabama has dismissed Southern Forest Land, Inc.'s Chapter 11 case. Britt B. Griggs, attorney for the bankruptcy administrator for this district, sought on Feb. 15, 2013, the dismissal of the Debtor's case, alleging that the Debtor has not paid the quarterly fees that have come due in this case. The Debtor, said Mr. Griggs, is delinquent for quarterly fees for the third and fourth quarters of 2012. The Debtor also failed to file: a. a plan of reorganization and a disclosure statement, even though they were due to be filed by Sept. 14, 2012. and b. monthly financial reports. The last monthly operating report was for June 2012. About Southern Forest Land Troy, Alabama-based Southern Forest Land, Inc., filed for Chapter 11 bankruptcy (Bankr. M.D. Ala. Case No. 12-10464) on March 20, 2012, estimating $10 million to $50 million in both assets and debts. Judge William R. Sawyer presides over the case. Collier H. Espy, Jr., at Espy, Metcalf & Espy, P.C., serves as the Debtor's counsel. The petition was signed by Grable L. Ricks, III, president. The Debtor, in its amended schedules, disclosed $13,320,669 in assets and $15,385,671 in liabilities. The Bankruptcy Administrator for the Middle District of Alabama said an official committee of unsecured creditors could not be appointed in the case. SRA INTERNATIONAL: Moody's Changes Outlook on B2 CFR to Negative ---------------------------------------------------------------- Moody's Investors Service changed the rating outlook of SRA International, Inc. to Negative from Stable and concurrently affirmed the B2 Corporate Family Rating. An initial Speculative Grade Liquidity rating of SGL-3, denoting an adequate liquidity profile, has been assigned. Ratings affirmed: Corporate Family, B2 Probability of Default, B2-PD $100 million guaranteed first lien revolver due 2016, B1, LGD 3, 33% $875 million guaranteed first lien term loan due 2018, B1, LGD 3, 33% $400 million guaranteed senior unsecured notes due 2019, Caa1, LGD 5, to 85% from 86% Ratings assigned: Speculative Grade Liquidity, SGL-3 Rating Outlook: To Negative from Stable Ratings Rationale: The rating outlook change to Negative reflects a more challenging operating environment for federal and defense services contractors as US fiscal austerity takes hold and procurement reforms heighten competition. Despite reducing debt by $160 million (13%) since the company's LBO of July 2011, credit metric gains have been minimal because revenues and earnings have declined. At December 31, 2012 debt to EBITDA on a Moody's adjusted basis was high at 6.6x. On a year-over-year basis over the first half of FYE 06/30/13, revenues and EBITDA declined about 10% and 9%, respectively (Moody's adjusted basis). Budgetary caps from sequestration will depress revenue opportunities for defense services contractors this year and next. The next-twelve-month free cash flow to debt ratio may only attain the mid-single digit percentage level, which would be low for a defense services issuer at the B2 CFR level. The affirmation of the B2 CFR reflects SRA's wide bid pipeline, demonstrated good cost control and expectation that free cash flow generation will get put toward term loan reduction. President Obama's recent signing of a defense appropriations bill for FY13 should loosen what had become a constrained procurement environment as a result of the Continuing Resolution budget authority that the federal government was operating under. SRA's funded backlog level could, in turn, benefit. Although SRA initially lost the re-competition of its largest contract (an information technology services support contract with the FDIC that represented 7% of H1-FY13 revenues) in October 2012, the award was protested, the protest was upheld and the contract competition has re-started. An outcome is expected within the next two quarters and a win by SRA could also help moderate the declining revenue trend. The company's liquidity profile is adequate, as denoted by the assignment of a Speculative Grade Liquidity rating of SGL-3. The term loan matures in 2018 and there are no annual debt amortizations scheduled. A free cash flow generative operating position is expected near-term, and seasonal working capital needs can probably be met through only light borrowings under the $100 million revolver. Covenant headroom under the first lien bank credit facility is and should remain ample near-term. Adequate liquidity affords SRA time to potentially build backlog, boost earnings and make progress toward more supportive credit metrics. The rating would likely be downgraded with debt to EBITDA continuing close to 7x, free cash flow to debt at 5% or less, or weakening liquidity. Stabilization of the rating would depend on expectation of debt to EBITDA descending to below 6x, free cash flow to debt approaching 10%, and continued liquidity profile adequacy. Upward rating momentum, not currently anticipated, would depend on expectation of debt to EBITDA descending to the 5x level, with free cash flow approaching 15% and an improved liquidity position. The principal methodology used in this rating was the Global Aerospace and Defense Industry Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. SRA International, Inc. provides technology and consulting services primarily to U.S. federal government organizations. Revenues for the twelve months ended December 31, 2012 were $1.6 billion. The company underwent a leveraged buy-out in July 2011 led by financial sponsor Providence Equity Partners. STANWICH FIN'L: Wagoner Rule Doesn't Bar Trustee's Suits -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. District Judge Stefan R. Underhill in Bridgeport, Connecticut, ruled on March 26 in reversing the bankruptcy court that a 1991 case from the U.S. Court of Appeals in New York known as Wagoner doesn't preclude a trustee from bringing fraudulent transfer claims against third parties. According to the report, the so-called Wagoner rule prohibits anyone standing in the shoes of a company from bringing claims for defrauding the company if management cooperated in the fraud. In those situations, Wagoner said, the claims belong to creditors individually and can't be asserted by a trustee or the company itself. The case before Judge Underhill involved a complaint asserting claims against an investment bank and lawyers under Sections 544 and 548 of the U.S. Bankruptcy Code. The claims included fraudulent transfer. The bankruptcy court ruled that Wagoner barred a trustee from bringing all claims against third parties who participated in the fraud. Judge Underhill disagreed. He said that Wagoner precludes only claims like aiding and abetting although it doesn't preclude pure fraudulent transfer claims where Congress imbued trustees with the right to assert those claims under Sections 544 and 548. The case is Ivy Barnum & O'Mara LLC v. Bear Stearns & Co. Inc. (In re Stanwich Financial Services Corp.), 11-cv-01838, U.S. District Court, District of Connecticut (Bridgeport). Stanwich Financial Services Corp., filed for chapter 11 protection on June 25, 2001, in the U.S. Bankruptcy Court for the District of Connecticut (Bankr. Case No. 01-50831). Robert U. Sattin, Esq., at Reid and Riege, PC, in Hartford, represented the Debtor. The Committee, represented by Diedre A. Martini, Esq., and Pamela B. Corrie, Esq., at Ivey Barnum & O'Mara, in Greenwich, commenced an adversary proceeding (Adv. Pro. No. 02-05023) against a long list of alleged recipients of fraudulent transfers on May 3, 2002. STOCKTON, CA: To Have Decision by April 1 on Right to Bankruptcy ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the bankruptcy judge concluded the trial March 27 where Stockton, California, laid out a case proving its eligibility for municipal bankruptcy in Chapter 9. The judge said he will issue his decision by April 1. The judge will deal with several arguments lodged by creditors opposing Stockton's right to remain in bankruptcy: Did the city negotiate in good faith with creditors before bankruptcy, and did the city manufacture insolvency by manipulating the budget and taxes? About Stockton, Calif. The City of Stockton, California, filed a Chapter 9 petition (Bankr. E.D. Calif. Case No. 12-32118) in Sacramento on June 28, 2012, becoming the largest city to seek creditor protection in U.S. history. The city was forced to file for bankruptcy after talks with bondholders and labor unions failed. Stockton estimated more than $1 billion in assets and in excess of $500 million in liabilities. The city, with a population of about 300,000, identified the California Public Employees Retirement System as the largest unsecured creditor with a claim of $147.5 million for unfunded pension costs. In second place is Wells Fargo Bank NA as trustee for $124.3 million in pension obligation bonds. The list of largest creditors includes $119.2 million owing on four other series of bonds. The city is being represented by Marc A. Levinson, Esq., and John W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The petition was signed by Robert Deis, city manager. Mr. Levinson also represented the city of Vallejo, Calif. in its 2008 bankruptcy. Vallejo filed for protection under Chapter 9 (Bankr. E.D. Calif. Case No. 08-26813) on May 23, 2008, estimating $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Vallejo Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. Bankruptcy Judge Michael McManus released Vallejo from bankruptcy on Nov. 1, 2011. T3 MOTION: Receives Extension for Listing on NYSE MKT ----------------------------------------------------- T3 Motion, Inc., has received written notification regarding the results of its appeal held on March 4, 2013, before the Panel of the NYSE MKT, LLC, regarding the Company's compliance with the continued listing standards of the Exchange. After considering the Company's presentations, as well as prior written submissions the Panel unanimously decided to defer further action on the appeal. The Panel concluded that it would test the Company's representations over the next two months before making its final decision. As such, the Panel requested the Staff to provide a report of the Company's operations through May 15, 2013. While the Company did not dispute that it was financially impaired when the staff first cited it for noncompliance with the continued listing standards, the Company now contends that recently it has attracted new equity capital and a new CEO, has reduced product costs as well as operating expenses, obtained an agreement to outsource manufacturing, arranged a factoring agreement and is continuing to develop its dealer network. Should the Staff's report conclude that the Company is no longer financially impaired, this delisting proceeding will be dismissed. Should the Staff's Report not so conclude, the Company will have until the close of business on the second business day after the Company receives the Staff's Report to submit to the Panel a written response. The Panel will then render its final decision in writing. About T3 Motion Costa Mesa, Cal.-based T3 Motion, Inc., develops and manufactures T3 Series vehicles, which are electric three-wheel stand-up vehicles that are directly targeted to the public safety and private security markets. After auditing the 2011 results, KMJ Corbin & Company LLP, in Costa Mesa, California, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses and has had negative cash flows from operations since inception, and at Dec. 31, 2011, has an accumulated deficit of $54.9 million. The Company reported a net loss of $5.50 million in 2011, compared with a net loss of $8.32 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $2.81 million in total assets, $4.48 million in total liabilities, and a $1.66 million total stockholders' deficit. Bankruptcy Warning "Our principal capital requirements are to fund our working capital requirements, invest in capital equipment, to make debt service payments and the continued costs of public company filing requirements. We have historically funded our operations through debt and equity financings, and the Company will require additional debt or equity financing in the future to maintain operations. The Company cannot make any assurances that additional financings will be completed on a timely basis, on acceptable terms or at all. If the Company is unable to complete a debt or equity offering, or otherwise obtain sufficient financing when and if needed, it would negatively impact our business and operations, which could cause the price of our common stock to decline. It could also lead to the reduction or suspension of our operations and ultimately force us to go out of business. Currently, the Company does not have sufficient cash to pay its current obligations including but not limited to payroll for its employees. If the Company does not succeed in raising additional outside capital in the short term, the Company will be forced to seek strategic alternatives which could include bankruptcy or reorganization," the Company said in its quarterly report for the period ended Sept. 30, 2012. TENET HEALTHCARE: Improving Finances Cue Moody's to Up CFR to B1 ---------------------------------------------------------------- Moody's Investors Service upgraded Tenet Healthcare Corporation's Corporate Family Rating to B1 from B2 and Probability of Default Rating to B1-PD from B2-PD. Moody's also upgraded the ratings on Tenet's senior secured debt to Ba3 (LGD 3, 38%) from B1 (LGD 3, 39) and senior unsecured debt to B3 (LGD 5, 86%) from Caa1 (LGD 5, 87%). The outlook for the ratings was revised to stable from positive. The upgrade of the rating reflects Moody's expectation of improving free cash flow and modest reduction of leverage from EBITDA growth. Moody's also expects that Tenet will remain disciplined with respect to shareholder initiatives and the use of additional leverage. Following is a summary of Moody's rating actions. 6.25% senior secured notes due 2018, to Ba3 (LGD 3, 38%) from B1 (LGD 3, 39%) 8.875% senior secured notes due 2019, to Ba3 (LGD 3, 38%) from B1 (LGD 3, 39%) 4.75% senior secured notes due 2020, to Ba3 (LGD 3, 38%) from B1 (LGD 3, 39%) 4.5% senior secured notes due 2021, to Ba3 (LGD 3, 38%) from B1 (LGD 3, 39%) 9.875% senior notes due 2014, to B3 (LGD 5, 86%) from Caa1 (LGD 5, 87%) 9.25% senior notes due 2015, to B3 (LGD 5, 86%) from Caa1 (LGD 5, 87%) 6.75% senior notes due 2020, to B3 (LGD 5, 86%) from Caa1 (LGD 5, 87%) 8.0% senior notes due 2020, to B3 (LGD 5, 86%) from Caa1 (LGD 5, 87%) 6.875% senior notes due 2031, to B3 (LGD 5, 86%) from Caa1 (LGD 5, 87%) Corporate Family Rating, to B1 from B2 Probability of Default Rating, to B1-PD from B2-PD Ratings affirmed: Speculative Grade Liquidity Rating, SGL-2 Ratings Rationale Tenet's B1 Corporate Family Rating reflects Moody's expectation of improvements in, but still modest, free cash flow. The rating also incorporates Moody's expectation that the company will continue to see improvements in operating performance, driven by cost savings initiatives and benefits from capital investment. However, weak volume trends and reimbursement pressures will continue to challenge revenue growth in the near term. The stable outlook reflects Moody's expectation that EBITDA will continue to grow modestly despite challenges in the sector. Leverage will likely improve slightly but remain high given relatively low free cash flow and the lack of pre-payable debt in the capital structure. Moody's expects the company to remain active with respect to share repurchases but limit increases in leverage to fund shareholder initiatives. Given that it will be challenging to reduce leverage meaningfully given many of the challenges facing the sector, Moody's does not expect an upgrade of the rating in the near term. However, the rating could be upgraded if the company is able to sustain leverage approaching 4.0 times while improving free cash flow. Moody's could downgrade the rating if a decline in operating performance results in an expectation that debt to EBITDA will be sustained above 5.0 times or if free cash flow, prior to discretionary reinvestment in the business, is expected to be negative. Furthermore, a significant debt financed acquisition or shareholder initiative could result in a downgrade of the ratings. The principal methodology used in this rating was the Global Healthcare Service Providers 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. Tenet, headquartered in Dallas, Texas, is one of the largest for- profit hospital operators by revenues. At December 31, 2012 the company's subsidiaries operated 49 hospitals as well as 117 free- standing and provider-based outpatient centers. The company also offers other services, including revenue cycle management, health care information management and patient communications services. Tenet generated revenue of approximately $9.1 billion for the twelve months ended December 31, 2012 after considering the provision for doubtful accounts. TNP STRATEGIC: In Forbearance Talk with KeyBank National -------------------------------------------------------- TNP Strategic Retail Trust, Inc., is actively negotiating a forbearance agreement with KeyBank National Association with respect to a revolving credit facility, dated Dec. 17, 2010, in the maximum principal amount of $45,000,000. TNP Strategic previously reported that it may not be in compliance with certain provisions related to two of its secured loans: the Revolving Credit Facility and the Loan Agreement, dated Nov. 9, 2012, with DOF IV REIT Holdings, LLC, representing a total indebtedness of approximately $67.2 million under both loans. "Although we can give no assurance as to our success in negotiating a forbearance agreement with respect to the Revolving Credit Facility, we expect such agreement will be finalized and will involve an accelerated payment date and include more severe restrictions on our ability to pay distributions until we have repaid the amount owed under the facility." With respect to the DOF Loan, the Company has received correspondence from Torchlight acknowledging that certain previously disclosed defaults have been cured. The Revolving Credit Facility is secured by five properties and the DOF Loan is secured by the Lahaina Gateway shopping center. About TNP Strategic TNP Strategic Retail Trust, Inc., was formed on Sept. 18, 2008, as a Maryland corporation. The Company believes it qualifies as a real estate investment trust under the Internal Revenue Code of 1986, as amended, and has elected REIT status beginning with the taxable year ended Dec. 31, 2009, the year in which the Company began material operations. The Company was initially capitalized by the sale of 22,222 shares of common stock for $200,000 to Thompson National Properties, LLC, on Oct. 16, 2008. TNP Strategic's balance sheet at Sept. 30, 2012, showed $272.33 million in total assets, $197.98 million in total liabilities and $74.34 million in total equity. The Company reported a net loss of $11.63 million for the nine months ended Sept. 30, 2012, compared with a net loss of $4.39 million for the same period a year ago. TW TELECOM: Moody's Affirms 'Ba3 Corp. Family Rating ---------------------------------------------------- Moody's Investors Service assigned a Baa3 rating to the proposed $100 million revolving credit facility due 2018 and $470 million senior secured term loan B due 2020 to be issued by tw telecom holdings inc., a wholly-owned subsidiary of tw telecom inc. Moody's also affirmed TWTC's Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating (PDR) and SGL-1 Speculative Grade Liquidity Rating. The rating outlook is stable. The new revolver will replace TWTH's existing $80 million revolver scheduled to mature December 2014. Net proceeds from the new term loan B will be used to retire the existing term loan B facility maturing December 2016 (approximately $463 million outstanding). Moody's views the refinancing transaction favorably due to the extension of the debt maturity structure and comparatively lower interest rate on the new credit facilities. The collateral package and subsidiary and parent guarantees are expected to be substantially similar to the existing credit facilities. The new term loan B will have negative covenants that are expected to mirror the covenants governing TWTH's $480 million 5.375% senior notes due 2022 (the "2022 notes") issued in October 2012. Moody's notes that TWTC's total debt to EBITDA, at 3.7x (Moody's adjusted), was temporarily elevated as of December 2012 due to the 2022 notes issuance. Net proceeds from the 2022 notes, which were included in TWTC's $974 million cash and marketable securities balance at year end 2012, are expected to fund the conversion obligation for the 2.375% senior convertible debentures due 2026 (approximately $374 million outstanding) to the extent holders elect to convert the debentures when they become putable on April 1, 2013. If any portion of the convertible obligation has not converted when it becomes callable on April 6, 2013 and debenture holders elect to convert at that time, Moody's believes the company has sufficient liquidity if TWTC elects to redeem the obligation with cash. Consequently, Moody's expects financial leverage to revert to the 3x level by year end 2013. Ratings Assigned: Issuer: tw telecom holdings inc. $100 Million Senior Secured Revolving Credit Facility due April 2018 -- Baa3 (LGD-2, 14%) $470 Million Senior Secured Term Loan B due April 2020 - Baa3 (LGD-2, 14%) Ratings Affirmed: Issuer: tw telecom inc. Corporate Family Rating -- Ba3 Probability of Default -- Ba3-PD Speculative Grade Liquidity - SGL-1 Issuer: tw telecom holdings inc. $430 Million 8% Senior Unsecured Notes due March 2018 -- B1, LGD assessment revised to (LGD-5, 70%) $480 Million 5.375% Senior Unsecured Notes due October 2022 -- B1, LGD assessment revised to (LGD-5, 70%) The assigned ratings are subject to review of final documentation and no material change in the terms and conditions of the transaction as advised to Moody's. Moody's will withdraw the Baa3 ratings on the existing senior secured credit facilities and B2 rating on the 2.375% senior convertible debentures once these obligations are retired. Ratings Rationale TWTC's Ba3 Corporate Family Rating reflects the company's successful track record of revenue growth, operational execution and consistently low customer churn, while recognizing the challenging position as a competitive telecommunications provider. Moody's expects TWTC to operate at adjusted total debt to EBITDA leverage in the range of 2.5x to 3.0x (incorporating Moody's standard adjustments) over the next 12 to 24 months, with moderate free cash flow generation, given that the business remains highly capital intensive. Debt repayment is possible since roughly one- third of the pro forma debt structure consists of an amortizing pre-payable term loan. However, debt reduction will be limited by TWTC's likely plans to direct free cash flow towards stock purchases. As of December 2012, $278 million was available under the existing $300 million share repurchase authorization. Despite elevated levels of capital spending and relatively high leverage, the company's strong operating performance driven by consistent revenue growth in the enterprise customer and data and internet services segments, and strong margins that stem from TWTC's significant fiber infrastructure, are credit positives for the ratings. TWTC's results reinforce its differentiated business model that relies on its own purpose-built fiber-rich network with direct connections to major customers, eliminating the need to rely on incumbent carriers for a critical portion of its last mile connections. TWTC continues to have success targeting medium-to- large enterprise customers rather than small-to-medium sized business (SMB) customers, and the company's stake is built on its near-nationwide scalable operating platform interconnected across 75 markets in the US. Rating Outlook The stable rating outlook reflects Moody's expectation that EBITDA growth and margins will contract somewhat in 2013 due to higher operating and SG&A expenses as TWTC expands its sales, support and technical staff to grow market share with new product offerings, accelerate future revenue growth and offset lower growth trends for service installations. Moody's also believes the company will continue to effectively manage cash spending through cost efficiency efforts and operating productivity improvements. What Could Change the Rating - Up? An upgrade is unlikely until Moody's believes the operating pressure on competitive telecom providers will be alleviated over a sustained period. However, upward rating pressure could develop if earnings growth leads to stronger free cash flow generation such that TWTC's free cash flow exceeds 10% of its total adjusted debt, and the company's leverage, as measured by total debt to EBITDA on a Moody's adjusted basis, is expected to be maintained below 2.5x. What Could Change the Rating - Down? The rating and/or outlook is likely to come under pressure if TWTC's operating performance deteriorates due to heightened price competition, increasing revenue/customer churn, changes in the regulatory environment or weakness in the US economy beyond Moody's current expectations, such that EBITDA erodes, free cash flow becomes negative or leverage cannot be maintained below 3.5x total debt to EBITDA (Moody's adjusted). Additionally, if an increase in stock repurchase activity depletes cash balances, ratings could be pressured. The principal methodology used in rating tw telecom inc. was the Global Telecommunications 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. With head offices in Littleton, Colorado, tw telecom inc. is a competitive communications provider. The company provides managed network services, Internet access, virtual private network, voice and data services, and network security to enterprise organizations and communications services companies throughout the US. TWTC's footprint extends to 75 of the top 100 markets in the US. Revenue for the fiscal year ended December 31, 2012 totaled approximately $1.47 billion. TXU CORP: 2014 Loan Trades at 27% Off in Secondary Market --------------------------------------------------------- Participations in a syndicated loan under which TXU Corp., now known as Energy Future Holdings Corp., is a borrower traded in the secondary market at 73.46 cents-on-the-dollar during the week ended Friday, March 31, 2013, according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents an increase of 0.60 percentage points from the previous week, the Journal relates. The loan matures on October 10, 2014. The Company pays 350 basis points above LIBOR to borrow under the facility. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80%-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. * * * As reported by the TCR on Aug. 15, 2012, Moody's downgraded the Corporate Family Rating (CFR) of EFH to Caa3 from Caa2 and affirmed its Caa3 Probability of Default Rating (PDR) and SGL-4 Speculative Grade Liquidity Rating. The downgrade of EFH's CFR to Caa3 from Caa2 reflects the company's financial distress and limited financial flexibility. In the Feb. 1, 2013, edition of the TCR, Fitch Ratings has lowered the Issuer Default Ratings (IDR) of Energy Future Holdings Corp (EFH) and Energy Future Intermediate Holding Company LLC (EFIH) to 'Restricted Default' (RD) from 'CCC' on the conclusion of the debt exchange and removed the Rating Watch Negative. As reported by the TCR on Feb. 4, 2013, Standard & Poor's Ratings Services said it raised its corporate credit ratings on EFH, EFIH, TCEH, and Energy Future Competitive Holdings Co. (EFCH) to 'CCC' from 'D' following the completion of several debt exchanges, each of which S&P considers distressed. UNIVERSAL HEALTH: Sale May Collapse; Trustee Sought --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that although Universal Health Care Group Inc. was given authority by the bankruptcy court in Tampa, Florida, on March 11 to sell five subsidiaries, the sale didn't occur fast enough because two were taken over by state insurance regulators. Earlier in March, barely four weeks after filing for Chapter 11 protection, the court authorized selling the insurance subsidiaries for $33.3 million cash. Before the sales could be completed, Florida regulators took over the two subsidiaries operating in that state. The buyer, an affiliate of CarePoint Insurance Co., exercised its right to terminate the acquisition of the two subsidiaries, to which $18 million of the purchase price had been allocated. According to the report, an ad hoc group of shareholders has filed papers asking the judge to revoke the sale of the other three subsidiaries. Now that the two Florida insurance companies have been taken over, there is no longer an urgent need for selling the other three. The equity holders believe more-favorable terms can be arranged if there is more time to market the three subsidiaries. The U.S. Trustee also has filed papers seeking appointment of a Chapter 11 trustee or conversion of the case to liquidation in Chapter 7. He said there has been a "pattern of dishonesty or gross mismanagement." The bankruptcy watchdog for the Justice Department said he uncovered transfers for the benefit of insiders while the company was insolvent along with "increasing compensation to insiders, while the company's illiquidity is increasing." About Universal Health Care Universal Health Care Group, Inc., owns an insurance company and three health-maintenance organizations that provide managed care services for government sponsored health care programs, focusing on Medicare and Medicaid. Universal Health was founded in 2002 by Dr. A.K. Desai and grew its operations of offering Medicare plans to more than 37,000 members to over 20 states. Universal Health filed a Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida regulators moved to put two of the company's subsidiaries in receivership. Universal Health Care estimated assets of up to $100 million and debt of less than $50 million in court filings in Tampa, Florida. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, serves as counsel to the Debtor. UTSTARCOM HOLDINGS: Effects One-for-Three Reverse Stock Split ------------------------------------------------------------- UTStarcom Holdings Corp. announced official results of its extraordinary meeting of shareholders, held on March 21, 2013, at 1:00 p.m. local time in Beijing, China. 1. The shareholders approved, effective as of 4:30 p.m. Eastern Standard Time on March 21, 2013, as an ordinary resolution, in accordance with Article 49 of the Company's Amended and Restated Memorandum and Articles of Association, that the authorized share capital of the Company be amended by the consolidation of the existing 750,000,000 Ordinary Shares of US$0.00125 par value each into 250,000,000 Ordinary Shares of US$0.00375 par value each, such that: (i) the authorized share capital of the Company is amended to US$943,750 divided into 250,000,000 Ordinary Shares of a par value of US$0.00375 each and 5,000,000 Preference Shares of a par value of US$0.00125 each; (ii) each existing issued 3 Ordinary Shares of US$0.00125 par value each be consolidated into 1 Ordinary Share of US$0.00375 par value each and the register of members of the Company be updated accordingly; and (iii) any fractions of a share that result from the consolidation be automatically repurchased by the Company at the Market Price of such fractions on the date of this Extraordinary Meeting. 2. The shareholders approved, effective as of 4:30 p.m. Eastern Standard Time on March 21, 2013, as a special resolution, that the Amended and Restated Memorandum and Articles of Association of the Company currently in effect be amended and restated by their deletion in their entirety and the substitution in their place of the Amended and Restated Memorandum and Articles of Association attached to the proxy statement previously distributed to shareholders. On March 15, 2013, the Company received a formal notice from NASDAQ that it was not in compliance with the listing requirements due to the Company's Ordinary Shares closing below the $1.00 per share minimum bid price for 30 consecutive business days. The Company has 180 days to regain compliance with the listing standards. To regain compliance, the closing bid price of the Company's Ordinary Shares must be at least $1.00 per share for a minimum of ten consecutive business days during the stated 180-day period. As a result of the meeting, the one-for-three reverse split of the Company's Ordinary Shares became effective as of 4:30 Eastern Standard time on March 21, 2013, with trading currently expected to commence on the post-reverse split-adjusted basis on the NASDAQ Global Select Market as of the opening of trading on Friday, March 22, 2013. The Company's Ordinary Shares will continue to be reported on the NASDAQ Global Select Market under the symbol "UTSI," although NASDAQ will add the letter "D" to the end of the trading symbol for a period of 20 trading days to indicate that the reverse share split has occurred. The Company's Ordinary Shares will have a new CUSIP number upon the effectiveness of the reverse share split. Every three shares of the Company's issued and outstanding Ordinary Shares, upon effectiveness of the reverse share split, will convert automatically into one issued and outstanding share of the Company's Ordinary Shares, subject to the elimination of fractional shares, with an increase in the par value per share from $0.00125 to $0.00375. The reverse share split will affect all issued and outstanding Ordinary Shares, as well as Ordinary Shares underlying stock options, restricted stock units, and other Ordinary Share-based equity grants outstanding immediately prior to the effectiveness of the reverse share split. The Company's transfer agent will distribute to shareholders of record on March 21, 2013, instructions regarding how to exchange certificates representing the previously outstanding shares for certificates representing the new issued shares. No fractional shares will be issued in connection with the reverse share split. Shareholders who would otherwise hold a fractional Ordinary Share will receive a cash payment in lieu of such fractional share based on the closing price of the Ordinary Shares on the NASDAQ Global Select Market on the trading day immediately before the effective date of the reverse share split. At 4:30 p.m., Eastern Standard time, on March 21, 2013, UTStarcom Holdings Corp., effected a one-for-three reverse share split whereby each existing issued three ordinary shares of UTStarcom was consolidated into one ordinary share of UTStarcom. UTS Holdings is authorized to issue 250,000,000 ordinary shares of a nominal or par value of US$0.00375 each and 5,000,000 preference shares of a nominal or par value of US$0.00125 each. About UTStarcom, Inc. UTStarcom, Inc. (Nasdaq: UTSI) -- http://www.utstar.com/-- is a global leader in IP-based, end-to-end networking solutions and international service and support. The Company sells its solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. The Company's headquarters are currently in Alameda, California, with its research and design operations primarily in China. The Company had income of $11.77 million in 2011, following a net loss of $65.29 million in 2010, and a net loss of $225.70 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $505.93 million in total assets, $279.29 million in total liabilities and $226.64 million in total equity. VANGUARD NATURAL: Moody's Upgrades CFR to 'B1'; Outlook Stable -------------------------------------------------------------- Moody's Investors Service upgraded Vanguard Natural Resources, LLC's Corporate Family Rating and Probability of Default Rating to B1 and B1-PD from B2 and B2-PD, respectively. In a related action, Moody's upgraded Vanguard's senior unsecured notes due 2020 to B3 from Caa1. The outlook is stable. "Vanguard's upgrade to B1 reflects the increase in its predominantly proved developed reserve base, and associated expected increase in production in 2013," stated Arvinder Saluja, Moody's Analyst. "Even though the acquisitions were initially funded through revolver borrowings, the company has shown a willingness to issue equity to reduce that indebtedness." Ratings upgraded: Issuer: Vanguard Natural Resources, LLC Corporate Family Rating, B1 from B2 Probability of Default Rating, B1-PD from B2-PD $550 million Senior Unsecured Notes, B3 (LGD5, 86%) form Caa1 (LGD5, 83%) Ratings affirmed: Speculative Grade Liquidity Rating, SGL-3 Ratings Rationale Vanguard's B1 CFR reflects its scale, geographical diversity, long-lived and predominately proved developed reserve base, balanced exposure to oil and natural gas production, low operational risk, and low F&D costs and capital expenditure requirements. Furthermore, Vanguard's predictable production profile and active hedging strategy provides for greater certainty in balancing distributions consistent with its acquisitive, MLP corporate finance model. The rating is, nevertheless, restrained by its high leverage, and the risks inherent in its business model which requires continuous high distributions and growth through acquisitions funded with external financing. The company completed three acquisitions in 2012 totaling $780 million, funded primarily through revolver borrowings, which added roughly 89 mmboe of, mostly natural gas, proved reserves. In February 2013, Vanguard announced an acquisition in the Permian Basin from Range Resources for $275 million, and expects to close the transaction by April 2013. This latest acquisition increases proved reserves by 23 mmboe and immediate daily production by 2.9 mboe, 60% of which is liquids. The debt taken on from these acquisitions increased Vanguard's leverage profile. However, as demonstrated in the past, management is prone to issuing equity to support its growth, most recently completing an equity offering in February 2013 which brought in $246 million of cash. Moody's estimates Vanguard's pro-forma leverage on production and PD reserves, post-acquisition in the Permian, to be approximately $65,000/boe and $9.5/boe respectively. Its leverage on production is relatively high compared to other B1 peers; however, it is counter-balanced by a stable and predictable production profile that allows the company to hedge its forecasted production out many years, with 95% of production hedged in 2013 and over 85% in 2014. Moody's notes that over 90% of gas production is hedged for 2015 and 2016 as well. Hedging provides stability of future cash flows and allows for reinvestment, distributions, debt service and capital raise requirements to be anticipated with more precision. The B3 rating on the $550 million senior notes reflects both the overall probability of default of Vanguard, to which Moody's assigns a PDR of B1-PD, and a loss given default of LGD 5 (86%). The company has a $1.5 billion senior secured revolving credit facility with a borrowing base of $1.2 million. The senior notes are unsecured and therefore subordinated to the senior secured credit facility's potential priority claim to the company's assets. The size of the potential senior secured claims relative to the unsecured notes outstanding results in the senior notes being notched two ratings below the B1 CFR under Moody's Loss Given Default Methodology. A further upgrade to Vanguard's ratings is currently unlikely. However, Moody's could upgrade the ratings if scale increases with average daily production of at least 60 mboe/d with a commensurate increase in proved developed reserves. Moody's could downgrade the ratings if leverage is expected to increase with debt / proved developed reserves sustained above $12.00/boe beyond 2013, if distribution coverage falls below 1.1x, or if Vanguard's business risk profile deteriorates. The principal methodology used in this rating was Global Independent Exploration and Production Industry 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. Vanguard Natural Resources, LLC is an independent exploration and production company headquartered in Houston, Texas. VERMILLION INC: Bruce Huebner Appointed as New Board Chairman ------------------------------------------------------------- The Board of Directors of Vermillion, Inc., elected Bruce A. Huebner to replace James S. Burns as Chairman of the Board, effective March 18, 2013. Mr. Huebner has been a member of the Board since May 2011 and recently served as the Company's Interim President and Chief Executive Officer. Mr. Burns will continue to serve as a member of the Board. The Company and Mr. Huebner entered into a short term consulting agreement for transition services dated as of March 18, 2013. Pursuant to the terms of the Consulting Agreement, Mr. Huebner will assist the Company as needed to aid in the integration and transition of the Company's new President and Chief Executive Officer. Mr. Huebner will be paid $15,000 per month until the Consulting Agreement expires or is terminated, prorated for partial months. For any services in excess of 40 hours per week (on average) provided during a month, the Company will pay Mr. Huebner at the rate of $250 per hour. The Consulting Agreement, which is cancelable upon notice by either party, has an initial term of three months, after which it may be renewed for an additional six month term by mutual agreement of the Company and Mr. Huebner. The Company currently has no other consulting agreements with directors, officers or former directors and officers of the Company. On March 18, 2013, the Board granted Thomas McLain, the Company's President and Chief Executive Officer, an option to purchase 400,000 shares of the Company's common stock, subject to approval by the Company's stockholders of an increase in the number of shares authorized under the Company's 2010 Stock Incentive Plan. The options will vest in 48 equal monthly installments, with the first installment vesting on April 1, 2013, provided that in the event Mr. McLain is terminated "without cause" or "for good reason" within 12 months following a "change of control", 100% of any then-unvested shares under Company stock options then held by Mr. McLain will vest upon the date of that termination. A copy of the Consulting Agreement is available for free at: http://is.gd/ldJ8Am About Vermillion Vermillion, Inc. is dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in oncology, hematology, cardiology and women's health. The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del. Case No. 09-11091). Vermillion's legal advisor in connection with its successful reorganization efforts wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged from bankruptcy in January 2010. The Plan called for the Company to pay all claims in full and equity holders to retain control of the Company. Vermillion incurred a net loss of $7.14 million in 2012, as compared with a net loss of $17.79 million in 2011. The Company's balance sheet at Dec. 31, 2012, showed $8.63 million in total assets, $3.96 million in total liabilities and $4.66 million in total stockholders' equity. BDO USA, LLP, in Austin, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring losses and negative cash flows from operations and an accumulated deficit, all of which raise substantial doubt about the Company's ability to continue as a going concern. W.R. GRACE: Seeks Approval of 2013 Long-Term Incentive Plan ----------------------------------------------------------- W.R. Grace & Co. and its debtor affiliates ask Judge Judith Fitzgerald of the U.S. Bankruptcy Court for the District of Delaware to approve a long-term incentive plan for employees. The 2013 incentive plan consists of grants of options to purchase W.R. Grace's common stock, and performance units that provide opportunities to receive cash awards to be paid in early 2016, as determined by the company's financial performance over the three year period from January 1, 2013 until December 31, 2015. The incentive plan would cost $18.9 million, if targets are met. W.R. Grace also asked for court approval to grant common stock to its directors in accordance with an updated annual retainer plan for directors. Continuing the long-term incentive compensation strategy for the 2013 plan will allow W.R. Grace's management "to more effectively and efficiently align the interests of eligible employees with the interests of the debtors' shareholders," according to W.R. Grace lawyer, Kathleen Makowski, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware. A court hearing is scheduled for April 22. Objections are due by April 5. 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. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Asks Court to Approve Settlement With Markel -------------------------------------------------------- W.R. Grace & Co. and its debtor affiliates asked the U.S. Bankruptcy Court for the District of Delaware to approve a settlement of claims with Markel International Insurance Co. Limited. The claims stem from a three-year excess liability insurance policy that provided insurance coverage to W. R. Grace. Markel's remaining coverage obligation under the policy is $1.027 million. Under the deal, Markel will make a lump sum payment of $914,201 to the company. The settlement amount will be held by W.R. Grace for the benefit of a trust created to pay asbestos-related claims. The agreement also includes a mutual release of all claims between the companies under the insurance policy, according to court filings. A copy of the agreement can be accessed for free at http://is.gd/3qcntt A court hearing is scheduled for April 22. Objections are due by April 5. 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. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000) W.R. GRACE: Wins OK to Provide $50MM for Retirement Plans --------------------------------------------------------- W.R. Grace & Co. received the green light to contribute about $50 million this year to its retirement plans for U.S.-based employees. The 2013 contribution would yield as much as $18.5 million in cash tax savings, and maintain the plan's funding levels at 90%, according to court filings. In 2011, W.R. Grace yielded about $56 million in cash tax savings from its 245.6 million contribution. Meanwhile, the company yielded about $38 million in cash tax savings from its $109.3 million contribution in the first quarter of 2012. 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. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. 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) WENDY'S INTERNATIONAL: Moody's Rates $300MM Senior Term Loan 'B1' ----------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Wendy's International, Inc.'s proposed $300 million senior secured term loan A. Moody's also affirmed Wendy's B2 Corporate Family Rating and B2-PD Probability of Default Rating as well as its B1 senior secured term loan B and revolver ratings and Caa1 senior unsecured note ratings. The outlook is positive. Ratings Rationale: Proceeds from the proposed $300 million term loan A will be used to partially refinance Wendy's term loan B facility. There will be no additional material changes to the credit facility such as covenants, maturities or various basket levels. The B2 CFR reflects Wendy's relatively high leverage and significant capital expenditure requirements to reimage restaurants as well as our view that soft consumer spending, high level of promotions and discounting by competitors and commodity inflation will continue to pressure earnings. The ratings are supported by Wendy's strong brand awareness, improved operating metrics, the ultimate benefits from re-imaged restaurants, meaningful scale and good liquidity. The positive outlook reflects Moody's view that credit metrics should gradually improve as the benefits from re-imaged restaurants, new product offerings and initiatives, and a continued focus on cost savings drive improved earnings despite soft consumer spending and commodity inflation. The positive outlook also reflects Moody's expectation that liquidity will remain good and there is an evidenced progress towards refinancing the company's unsecured notes due June 2014. Ratings assigned are: $300 million senior secured term loan A, due 2018 rated B1 (LGD 3, 39%) Ratings affirmed and LGD point estimates adjusted are: Corporate Family Rating at B2 Probability of Default Rating at B2-PD $1.125 billion senior secured term loan B, due 2019 at B1 (LGD 3, 39% from LGD 3, 40%) $200 million revolving credit facility, due 2017 at B1 (LGD 3, 39% from LGD 3, 40%) $100 million 7% senior unsecured notes due 12/15/2025 at Caa1 (LGD 6, 92% from LGD 6, 91% ) $225 million 6.2% senior unsecured notes due 6/14/2014 at Caa1 (LGD 6, 92% from LGD 6, 91% ) The outlook is positive. A ratings upgrade would require a sustained strengthening of debt protection metrics. Specifically, debt to EBITDA below 4.75 times and EBITA coverage of interest of above 1.75 times. A higher rating would also require documented progress towards re-financing its 6% $225 million unsecured notes due June 15, 2014, well in advance of maturity while maintaining good liquidity. Factors that could result in a stabilization of the outlook include a decline in operating performance that results in a sustained weakening of debt protection metrics or an inability to successfully refinance the June 2016 notes well in advance of maturity. Whereas, a downgrade could occur if debt to EBITDA migrates toward 6.5 times or EBITA coverage of interest fell below 1.0 times on a sustained basis. A deterioration in liquidity for any reason could also result in negative ratings pressure. The principal methodology used in this rating was the Global Restaurant Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Wendy's International, LLC., a wholly owned subsidiary of The Wendy's Company, Inc., owns, operates and franchises approximately 6,560 quick-service hamburger restaurants. Annual revenues are approximately $2.5 billion. WILCOX EMBARCEDERO: New Deal on Cash Use Required After Today ------------------------------------------------------------- The Hon. Roger L. Efremsky of the U.S. Bankruptcy Court for the Northern District of California approved a stipulation extending the term of Wilcox Embarcadero Associates, LLC's use of cash collateral. The order entered in January provides that the Debtor is authorized to use the cash collateral of Wells Fargo Bank, N.A., provided that Wells is granted adequate protection on the terms and conditions set forth in the agreement to extend term of stipulation. The Debtor's right to use cash collateral will terminate on the earlier of (i) March 31, 2013, (ii) or an event of default under the stipulation, (iii) or the date the stipulation ceases to be in full force and effect for any reason. The Debtor will continue to make payments on the Note in the sum of $33,454 per month on the first day of each month. Wells will continue to receive monthly payments in the sum of $33,454 on the first day of each month until there is a final order on use of cash collateral, a plan of reorganization or another agreement between the parties. Stipulation with Owens Mortgage The Debtor and secured creditor Owens Mortgage Investment Fund entered into a stipulation authorizing the Debtor's use of cash collateral, modifying automatic stay, granting postpetition liens and granting adequate protection. Pursuant to the stipulation, the Debtor's right to use cash collateral will terminate on the earlier of (i) March 31, 2013, (ii) or an event of default under the stipulation, (iii) or the date the stipulation ceases to be in full force and effect for any reason. The Debtor will continue to make payments on the Note in the sum of $7,000 per month on the first day of each month. As reported in the Troubled Company Reporter on Jan. 22, 2013, the Debtor related that on June 19, 2006, the Debtor executed a Fixed Rate Note and Deed of Trust payable to Owens in the amount of $2,640,000 secured by the Debtors sole real property asset located at 1001 22nd Ave., Oakland, California; the Note was due and payable on June 27, 2008. The Owens Deed of Trust contains an assignment of rents. The Owens Deed of Trust is junior to a First Deed of Trust issued to Greater Bay Bank, N.A. which is held by Wells Fargo Bank, N.A. The Note was subsequently modified, extending the date on which it was due and payable to Feb. 1, 2012. The current balance due on the Note, asserted by Owens as of Oct. 31, 2012, is $3,297,570; the balance due on the Wells Fargo Note, as of Nov. 6, 2012 is $5,813,258. About Wilcox Embarcadero Wilcox Embarcadero Associates, LLC, filed a Chapter 11 petition in Oakland (Bankr. N.D. Cal. Case No. 12-40758) on Jan. 26, 2012. Wilcox operates a commercial building, leasing warehouse, wholesale, retail and office space. Wilcox operates in the Bay Area and has been in business for 10 years. The Debtor says it is a single asset real estate case. Steele, George, Schofield & Ramos LLP represents the Debtor in its restructuring efforts. In its schedules, The Debtor disclosed $10.2 million in assets and under $8.6 million in liabilities. The Debtor's property secures an $8.55 million debt to Wells Fargo and Owens Mortgage Investment Fund, LP. The Debtor said it incurred financial difficulty when its primary lender, the holder of the First Deed of Trust, refused to extend, modify or refinance the loan. The Debtor is in negotiations with a new lender to take out the lender, but needs more time to accomplish this task. Z TRIM HOLDINGS: Edward Smith Holds 77.5% Stake as of March 18 -------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Edward B. Smith, III, and his affiliates disclosed that, as of March 18, 2013, they beneficially own 32,902,218 shares of common stock of Z Trim Holdings, Inc., representing 77.5% of the shares outstanding. Mr. Smith previously reported beneficial ownership of 32,338,079 common shares or a 78.9% equity stake as of Dec. 7, 2012. A copy of the amended filing is available at http://is.gd/eAMpPo About Z Trim Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food ingredient company which provides custom product solutions that help answer the food industry's problems. Z Trim's revolutionary technology provides value-added ingredients across virtually all food industry categories. Z Trim's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. M&K CPAs,PLLC, in Houston, Texas, expressed substantial doubt about the Company's ability to continue as a going concern following the 2011 financial results. The independent auditors noted that the Company had a working capital deficit and reoccurring losses as of Dec. 31, 2011. The Company reported a net loss of $6.94 million in 2011, compared with a net loss of $10.91 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $4.41 million in total assets, $24.99 million in total liabilities, $6.36 million in total commitment and contingencies, and a $26.93 million total stockholders' deficit. ZOGENIX INC: Board Approves $545,500 Cash Bonus for Executives -------------------------------------------------------------- The Board of Directors of Zogenix, Inc., approved, effective as of March 15, 2013, cash bonus payments for the 2012 fiscal year to be paid to the Company's executive officers. The Compensation Committee of the Board previously approved those bonus payments, subject to full Board approval. Pursuant to the Company's Annual Incentive Plan, each Named Executive Officer is eligible for a performance bonus based upon the achievement of certain corporate performance goals approved by the Board and, with respect to the Named Executive Officers other than the Company's Chief Executive Officer, individual performance objectives. The bonuses to be paid to the Named Executive Officers are: Name Bonus ------------------------- -------- Roger L. Hawley $178,399 Stephen J. Farr, Ph.D. $150,645 Ann D. Rhoads $129,071 Cynthia Y. Robinson, Ph.D. $87,466 Pursuant to the Company's Annual Incentive Plan, each Named Executive Officer is eligible for a performance bonus based upon the achievement of certain corporate performance goals approved by the Board and, with respect to the Named Executive Officers other than the Company's Chief Executive Officer, individual performance objectives. Under the Plan, the target levels for executive bonuses for the 2012 fiscal year were as follows: 50% of base salary (100% of which was based on corporate goals) for Roger L. Hawley, the Company's Chief Executive Officer; 45% of base salary (80% of which was based on corporate goals and 20% of which was based on individual performance) for each of Stephen J. Farr, Ph.D., the Company's President, and Ann D. Rhoads, the Company's Executive Vice President and Chief Financial Officer; and 35% of base salary (60% of which was based on corporate goals and 40% of which was based on individual performance) for Cynthia Y. Robinson, Ph.D., the Company's Chief Development Officer. In addition, the Board determined to not continue to designate a Chief Operating Officer, effective as of March 15, 2013; however, Dr. Farr, the former COO, will remain President. The Board approved, effective as of March 15, 2013, an Amendment and Restatement of the Plan, pursuant to which the weighting of the portions of cash bonus payments that are based on corporate performance goals and individual performance objectives were changed for the Named Executive Officers other than the Company's Chief Executive Officer, which remains 100% based on the achievement of corporate goals. The Amended Plan was previously approved by the Compensation Committee, subject to full Board approval. The Company expects to adopt a similar annual incentive program for future fiscal years, which will reward achievement at specified levels of corporate and individual performance and will contain target bonuses. About Zogenix Inc. Zogenix, Inc. (NASDAQ: ZGNX), with offices in San Diego and Emeryville, California, is a pharmaceutical company commercializing and developing products for the treatment of central nervous system disorders and pain. Zogenix incurred a net loss of $47.38 million in 2012, as compared with a net loss of $83.90 million in 2011. The Company's balance sheet at Dec. 31, 2012, showed $80.68 million in total assets, $66.21 million in total liabilities and $14.47 million in total stockholders' equity. Ernst & Young LLP, in San Diego, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring losses from operations and lack of sufficient working capital which raise substantial doubt about the Company's ability to continue as a going concern. * North American Chemical Bonds Offer Weak Protections ------------------------------------------------------ Bonds issued by North American chemical companies have the weakest covenant quality scores among 18 broad sectors of North American non-financial companies, Moody's Investors Service says in a new report. Chemical company bonds also have the weakest cash leakage, risky investments and debt-incurrence provisions. "Our review of 24 chemical bond deals in our High-Yield Covenant Database revealed that they have weaker covenant protections than most of the more than 700 other North American non-financial company bonds in the database," says Vice President -- Senior Credit Officer William Reed in "Protections for North American Chemical Bonds Rank Among Weakest Measured." The chemical bonds had an average Covenant Quality Score of 4.02 on Moody's five-point scale, Reed says, in which 5.0 represents the weakest covenant protection and 1.0, the strongest. This compares with an average of 3.41 for the larger set of 18 industry sectors in Moody's North American non-financial company database. In addition, out of the 18 broad sectors, the chemical bonds had the weakest average scores for protection against restricted payments, investments in risky assets, debt incurrence and change of control. The weak scores were driven primarily by large, quantifiable carve-outs that are higher than in other sectors. For chemical bonds, the average restricted payments, permitted investments and debt carve-outs as a percentage of total assets were 18.3%, 12.4%, and 35.8 %, respectively, compared with averages of 7.7%, 7.8%, and 24.6%, respectively, for the other sectors. Chemical bonds in the data base also offer very weak protection against structural subordination and the ability to incur additional liens. The chemical companies in Moody's sample scored an average of 3.87 for structural subordination, compared with 2.75 for other types of non-financial companies, and 4.82 for liens on unsecured bond deals, compared with 4.03. The higher rated speculative grade issues from Ashland, GrafTech International Ltd. and Methanex all used high-yield lite covenant packages, in line with other North American issues. Those companies have healthy Ba1-Ba3 long-term ratings. Their traditional businesses have recently operated at cyclical peaks, and their investors have not demanded strong protection against rising leverage. The one outlier is Huntsman International, which used a high-yield lite package in its latest bond issue despite the bond being rated B1 at issuance. Moody's notes, however, that Huntsman's long-term Corporate Family Rating is Ba3, and that the company has robust cash flow generation given current market conditions. In addition, 42% of bonds with traditional high-yield packages received very weak covenant scores of between 4.2 and 5.0, compared with 14.5% for the larger group of North American bonds. Bonds issued by Celanese Corporation and Rockwood Specialties received two of the five weakest CQ scores for high-yield packages in Moody's database but also have Corporate Family Ratings in the Ba category. * Moody's Notes Rising Biofuel Compliance Costs for U.S. Refiners ----------------------------------------------------------------- A dramatic rise in the cost of complying with federal renewable fuel requirements poses a headwind for the US refining and marketing industry over the next two years and potentially beyond, Moody's Investors Service says in a new report. Prices are spiking for renewable identification numbers, or RINs, which the US Environmental Protection Agency uses to track whether fuel refiners, blenders and importers are meeting their renewable- fuel volume obligations. "US refining companies either amass RINs through their blending efforts or buy them on the secondary market in order to meet their annual renewable-fuel obligations," says Vice President -- Senior Analyst Saulat Sultan in "US Refiners' Biofuel Compliance Costs Spike, But Longer-Term Effects Appear Manageable." "It isn't yet clear whether recent price increases reflect a potential shortfall in RIN availability in 2014, or more structural and permanent changes for the refining industry," Sultan says. The impact of higher RIN prices will depend on a company's ability to meet its RIN requirements internally, as well as the amount of RINs it can carry over to 2014 and gasoline export opportunities, Sultan says. Refiners carried over about 2.6 billion excess RINs to 2013 from 2012, but the EPA expects a lower quantity to be carried over to 2014. "RIN purchasing costs can be sizable, even while refiners are generally enjoying a period of strong profitability, such as they are now," Sultan says. "Integrated refining and marketing companies including Phillips 66, Marathon Petroleum and Northern Tier Energy LLC are likely to be better positioned than sellers that do not blend most of their gasoline, such as Valero Energy, CVR Refining LLC and PBF Energy, or refiners with limited export capabilities, such as HollyFrontier." At the same time, increasing ethanol blending, which is used to generate enough RINs to comply with federal regulations, raises potential legal issues for refiners. This is because gasoline demand is flat or declining and exceeding the 10% threshold (the so-called "blend wall") could attract lawsuits from consumers whose vehicle warranties prohibit using fuel with a higher percentage. Moody's does not believe that companies will raise the ethanol content without some protection from the federal government, however. "We believe US refiners, blenders and importers will increasingly rely on secondary-market RINs to meet their regulatory obligations," Sultan says. "This will keep RIN prices high in the near term due to limited supply, but over the longer term companies likely will pass on higher compliance costs to consumers." * Moody's Issues New Report on Systemic Support for Bank Holdings ----------------------------------------------------------------- Moody's new special comment titled, "Reassessing Systemic Support in US Bank Ratings -- An Update and FAQs" revisits the Dodd-Frank Act's Title II Orderly Liquidation Authority. The OLA creates a legal structure for the FDIC to resolve troubled systemically important US financial institutions. The challenges that remain surrounding its successful implementation, however, have to date led Moody's to maintain systemic rating uplift in its credit assessments of eight US banking groups. The rating agency expects to update its support assumptions for these banking groups by the end of 2013. The FDIC's proposed approach to implementing OLA is "single entry receivership." Under this approach, the FDIC would impose losses on bank holding company shareholders and creditors and use the holding company's resources to recapitalize its systemically important operating subsidiaries. "Although the FDIC has made considerable progress in identifying the hurdles to resolving these complex, interconnected institutions, challenges to implementation remain," says David Fanger, a Moody's Senior Vice President and co-author of the report. In the report, Moody's discusses the four main challenges facing the US bank regulators in implementing single entry receivership: 1) the need for cross-border regulatory coordination; 2) the capital structure of these banks; 3) the complexity of these firms' legal, funding, and operational structures; and 4) the high degree of interconnectedness among these firms. "The FDIC's biggest challenge is the need for increased international regulatory cooperation," noted Fanger. "This is because these systemically important banks operate in many parts of the world under legal and regulatory frameworks that are outside the FDIC's ability to control." Recognizing the direction and progress the FDIC was making with OLA and increasing the resolvability of these firms, in June 2012 Moody's assigned negative outlooks to the supported holding company debt ratings (that benefit from up to two notches of uplift) of the affected large banking groups while assigning stable outlooks to the supported ratings of their operating banks (that benefit from one to three notches of uplift). By year-end 2013 Moody's expects to update its support assumptions -- either maintaining or lowering them -- for those eight systemically important US banking groups. The report also provides responses to frequent questions from market participants, including a detailed diagram of the resolution framework and a discussion of bail-in capacity for systemically important US bank holding companies. * January, February Record Six Defaults for $2.8 Billion -------------------------------------------------------- The U.S. high yield par default rate continues to track closely to the 2012 year-end rate of 1.9%, according to Fitch Ratings. At the end of February, it slipped modestly to 1.8% (mostly due to the market's larger size), and Fitch projects a similar level for the first quarter. Defaults in February included Reader's Digest and chipmaker Conexant Systems, affecting a combined $0.7 billion in bonds and bringing the year-to-date tally to $2.8 billion (and issuer count to six). This compares with $2.5 billion in defaults and six issuers in the first two months of 2012. To date, March has added filings from gaming operator Revel AC, Inc. and phone directory publisher Dex Media, and two missed interest payments from oil and gas company GMX Resources and healthcare concern Rotech. These add an estimated $1.5 billion to the year's default tally. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that according to Fitch, there were 32 defaults totaling $20.5 billion for all of 2012. * Social Security Has No Bearing on Good Faith of Plan ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in San Francisco joined sister appeals courts from New Orleans and Denver by ruling that Social Security payments can't be taken into consideration in deciding whether an individual's proposed Chapter 13 plan satisfied the so-called good-faith test. The case is Drummond v. Welsh (In re Welsh), 12-60009, 9th U.S. Circuit Court of Appeals (San Francisco). * AlixPartners' John Dischner Named to T&W's People to Watch List ----------------------------------------------------------------- AlixPartners, the global business-advisory firm, on March 27 officially congratulated John A. Dischner, a managing director in the firm's Turnaround & Restructuring Services unit, for his being named to Turnaround & Workout's "People to Watch-2013; Business Professionals Making Their Mark" list. Mr. Dischner, who joined AlixPartners in 1998, is an expert in liquidity management, cost reduction, business-plan development and asset sales. In his time with the firm, he has held both advisory and officer roles in a wide variety of large and middle- market companies, including in the manufacturing, consumer- products, environmental-services, telecommunications, real-estate, homebuilding and financial-services industries. Said Lisa Donahue, managing director at AlixPartners and co-lead of the Turnaround & Restructuring Services unit: "AlixPartners warmly congratulates John on this honor. He is one of our best and brightest, and he embodies our firm's unparalleled dedication to client service and true results." Recently, Mr. Dischner was chief financial officer for a leading technology-product manufacturer, where he played a major role in an out-of-court restructuring that reduced overhead by 30%, cut inventory levels by 35% and eliminated unprofitable products. Earlier in his career at AlixPartners, his engagements included: -- Provo Craft and Novelty Inc., where, as CFO, his department's work included the restatement of two years of financials, and the development of a go-forward business plan; -- Reddy Ice Holdings Inc., where, as senior vice president of finance, he implemented a "fresh-start" accounting system and developed a new internal-audit system; -- General Growth Properties Inc., where, as financial advisor, he was instrumental in a spinoff company, Howard Hughes Corp., involving more than $2 billion in assets; -- Levitt & Sons Inc., where, as executive vice president of restructuring, he was involved in all aspects of liquidity management, bank negotiation and assets sales; -- Refco Inc., where he led an international term in managing cash, liquidity and the sale or wind-down of operations; -- Parmalat USA Corp., where he helped manage all key aspects of the company's restructuring, including liquidity management and business-plan development; -- Harnischfeger Inc., where he served as treasurer and managed liquidity of a $1 billion division and was also involved in key aspects of the acquisition of financing; -- Safety-Kleen Corp., where he managed an accounts-receivable process-improvement project and also played a key role in budget- plan development and the acquisition of financing; and -- USN Communications Inc., where he developed cash-forecasting tools and assisted in key aspects of asset sales and the transitioning of key finance functions to a buyer Dischner, who lives in suburban Chicago, has an MBA from Carnegie Mellon University and a bachelor's degree in economics from Northwestern University. About Turnarounds & Workouts Turnarounds & Workouts (http://www.strategicmgtpartners.com/twtop12.html#TW)analyzes the industry and provides lists annually of the outstanding firms for various constituencies working in the bankruptcy, corporate renewal, investment, turnaround and restructuring industry. About AlixPartners AlixPartners, LLP -- http://www.alixpartners.com-- is a global business-advisory firm offering comprehensive services in four major areas: enterprise improvement, turnaround and restructuring, financial-advisory services and information-management services. Founded in 1981, the firm has offices around the world. * Cadwalader Bags 2 IFLR Americas Financial Restructuring Awards ---------------------------------------------------------------- Cadwalader Wickersham and Taft LLP, a counselor to global financial institutions and corporations, on March 27 disclosed that the Firm was honored with two awards in both Deal and Team categories at this year's IFLR Americas Awards Ceremony held at the Essex House in New York City on March 21, 2013. The awards annually recognize firms involved in the most innovative and successful transactions of the past year. For the second year in a row, the Financial Services, Capital Markets, and Financial Restructuring Groups were recognized for their groundbreaking work and picked up awards for "Structured Finance and Securitization Team of the Year" and "Restructuring Deal of the Year." Cadwalader's representation in the "Restructuring Deal of the Year" was led by Washington-based partner Mark Ellenberg, Financial Services partner Lary Stromfeld, and Litigation partner Howard Hawkins, all of whom advised Morgan Stanley on the closeout of its complex trading books with Lehman Brothers and affiliates. Restructuring partner Peter Friedman, Litigation special counsel Ellen Halstead, and Restructuring senior associate John H. Thompson assisted in representing the financial services firm with respect to $1.4 billion in claims related to the closeout and the valuation of those losses. The team led an ad hoc group of major financial institutions in negotiating with the debtors for a novel rules-based framework for the determination of derivatives claims known as the "Derivatives Framework." "This was a very complex and dynamic matter which required an innovative and tailor-made approach for the client. We are very fortunate to have a long standing relationship with Morgan Stanley and I would like to thank all involved for their hard work," remarked Mark Ellenberg. "With a filing of this magnitude -- more than six times larger than any previous in the U.S. -- it was important to come up with new strategies given the historic precedent of the liquidation. Under the new 'framework,' our clients' claims were eventually allowed in an amount exceeding 85 percent, which is among the highest percentages afforded to broker dealers with claims against Lehman in relation to their trading contract portfolios." "These two awards are a tribute to the breadth of Cadwalader's derivatives expertise, both in regard to creating financial products in the new environment and resolving difficult issues arising out of an extremely complex bankruptcy. Our technical expertise and our commercial awareness help our clients on all points of the spectrum," commented Lary Stromfeld. Litigation partner Howard Hawkins added, "Our litigation expertise in building and presenting the evidentiary record for Morgan Stanley's highly complex derivatives claim and its valuation plainly contributed to the Morgan Stanley claim becoming the lynchpin of the Lehman global derivatives claims settlement." Financial Restructuring Co-head John Rapisardi stated, "We are very pleased to continue our close relationship with Morgan Stanley and I would like to congratulate our team members on this well-deserved honor." In addition to the "Structured Finance and Securitization Team of the Year" award, the group was short-listed for the "Structured Finance and Securitization Deal of the Year," which involved advising UBS AG on the issuance of the Fisher Enhanced Big Cap Growth Securities Structured Note and ETN valued at nearly $2 billion (notional) and $200 million for the ETN. The deal was cited by Bloomberg as the largest U.S. equity-linked structured note in at least two years. Financial Services partner Ray Shirazi led the team which included Partners David Miller, Mark Howe, Steven Lofchie and James Frazier and Special Counsels Brian Foster, Shlomo Boehm and Daniel Mulcahy. The Financial Services Group is led by Steven Lofchie and Richard Schetman, the Capital Markets team is headed by Michael Gambro and Patrick Quinn and the Restructuring Group is led by John Rapisardi and George Davis. "We are once again very pleased that the talented attorneys working these transactions have been recognized for their outstanding achievements by the IFLR," said Christopher White, Cadwalader Chairman. "With the assistance of colleagues from other practice areas, such as Litigation, Financial Services, Capital Markets and Financial Restructuring, our lawyers continue to distinguish themselves as innovators working on the most challenging problems faced by the most sophisticated clients in the market today." About Cadwalader, Wickersham & Taft LLP Established in 1792, Cadwalader, Wickersham & Taft LLP -- http://www.cadwalader.com-- is an international law firm, with offices in New York, London, Charlotte, Washington, Houston, Beijing, Hong Kong and Brussels. The firm offers legal expertise in antitrust, banking, business fraud, corporate finance, corporate governance, energy, environmental, financial restructuring, healthcare, intellectual property, litigation, mergers and acquisitions, private equity, private wealth, real estate, regulation, securitization, structured finance, and tax. About IFLR IFLR is a magazine for in-house counsel and practitioners in the financial markets, covering the innovations in areas such as capital markets, banking, project finance, corporate governance, bankruptcy, litigation, fund management, and M&A. The International Financial Law Review awards are based on research from IFLR's journalists in consultation with private practice lawyers, in-house counsel and financing specialists at investment banks around the world. * Hughes Watters Askanase Attorneys Named Texas Rising Stars ------------------------------------------------------------ Hughes Watters Askanase L.L.P. (HWA) attorneys Allison D. Byman, Erica Hakimi and Simon R. Mayer have been recognized by Law & Politics Magazine and Texas Monthly Magazine for the list of 2013 Texas Rising Stars. Ms. Hakimi joined HWA in late February as Senior Counsel in the Commercial Litigation Practice area. She is on the list of 2013 Texas Rising Stars in the Employment Litigation category. Ms. Byman and Mr. Mayer support the firm's Business Bankruptcy Practice area, which is led by Wayne Kitchens, a co-managing partner with HWA. Both are on the 2013 list in the Bankruptcy & Creditor/Debtor Rights category. Rising Stars recognizes the state's top up-and-coming lawyers who are 40 years old or younger, or who have been in practice for 10 years or less. The survey from which Rising Stars are selected is based on nominations, personal observation and attorney-led research. This critical research process is so exclusive that no more than 2.5 percent of the lawyers in the state are named to the Texas Rising Stars list. "Allison, Erica and Simon are talented and dedicated young attorneys whom we are privileged to have as members of the HWA legal team. My fellow partners and I appreciate their professionalism and their ongoing contributions to our firm and our clients," commented Wayne Kitchens, co-managing partner of HWA. Ms. Byman was named one of the Texas Rising Stars (Bankruptcy & Creditor/Debtor Rights) in 2010. She was appointed as a Chapter 7 Bankruptcy Trustee for the Southern District of Texas in April 2012 and joined HWA as an Of Counsel attorney in May 2012. Ms. Byman earned a Bachelor of Arts degree in Political Science, cum laude, from Texas A&M University in 2000 and a Doctor of Jurisprudence degree from the University of Houston Law Center in 2003. She was admitted to the State Bar of Texas in 2003 and is also admitted to practice in the United States Court of Appeals, Fifth Circuit, and the U.S. District Courts of Texas for the Northern, Southern, Eastern and Western Districts. Ms. Hakimi has taken and defended more than 250 depositions during her career and served as first chair in 10 jury trials, bench trials and arbitrations. She currently is a member of the State Bar of Texas Labor and Employment Law Section. Ms. Hakimi earned a Bachelor of Science degree in psychology in 1998 form University of Houston and a Doctor of Jurisprudence degree from South Texas College of Law Center in 2001. She was admitted to the United States District Court for the Southern District of Texas in 2001 and was licensed to practice law in Texas in November 2001. Ms. Hakimi started her legal career at Gregg M. Rosenberg & Associates where she was named one of the Texas Rising Stars (Employment Litigation) in 2004. After serving as the founder and principal of The Hakimi Law Firm in Houston for seven years, she joined Epstein, Becker & Green P.C. as Of Counsel where she was named as one of the Texas Rising Stars in 2012 (Employment Litigation). Mr. Mayer was named to the list of Texas Rising Stars in 2012. He joined the firm as an associate in 2007 after earning his Doctor of Jurisprudence degree from South Texas College of Law and being admitted to the State Bar of Texas. He earned a Bachelor of Arts degree in philosophy from Trinity University in 1998. Mr. Mayer is an active member of the Houston Bar Association. Mr. Mayer was recognized in 2012 with a President's Award for outstanding contributions as co-chair of the John J. Eikenburg Law Week Fun Run Committee. He is the president-elect of the Houston Bar Association Bankruptcy Committee for 2012-2013 and the president for 2013-2014. Mayer served as the treasurer for 2010-11 and vice president for 2011-12 for the Houston Association of Young Bankruptcy Lawyers. About Hughes Watters Askanase For 35 years, Hughes Watters Askanase, L.L.P. -- http://www.hwa.com-- is a law firm that concentrates its practice on representation of commercial and consumer lenders, including banks and credit unions; business bankruptcy; business planning and strategy; default servicing; real estate and finance; commercial and consumer financial services litigation; and estate planning and probate. * BOND PRICING -- For Week From March 25 - 29 --------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AES EASTERN ENER 9.0 1/2/2017 1.75 AES EASTERN ENER 9.7 1/2/2029 4.13 AGY HOLDING COR 11.0 11/15/2014 51.06 AHERN RENTALS 9.3 8/15/2013 78.50 AIR-CALL04/13 1.8 2/1/2026 99.08 AIR-CALL04/13 1.8 2/1/2026 99.25 ALION SCIENCE 10.3 2/1/2015 60.00 ATP OIL & GAS 11.9 5/1/2015 6.88 ATP OIL & GAS 11.9 5/1/2015 6.88 ATP OIL & GAS 11.9 5/1/2015 7.25 BUFFALO THUNDER 9.4 12/15/2014 31.00 CENGAGE LEARN 12.0 6/30/2019 22.00 CENGAGE LEARNING 13.8 7/15/2015 20.38 CHAMPION ENTERPR 2.8 11/1/2037 0.50 DELTA AIR 1993A1 9.9 4/30/2049 21.75 DEX ONE CORP 14.0 1/29/2017 44.00 DOWNEY FINANCIAL 6.5 7/1/2014 63.00 DYN-RSTN/DNKM PT 7.7 11/8/2016 4.50 EASTMAN KODAK CO 7.0 4/1/2017 13.00 EASTMAN KODAK CO 7.3 11/15/2013 13.50 EASTMAN KODAK CO 9.2 6/1/2021 10.35 EASTMAN KODAK CO 10.0 7/1/2018 12.67 EDISON MISSION 7.5 6/15/2013 52.96 EDMC-CALL04/13 8.8 6/1/2014 100.00 ELEC DATA SYSTEM 3.9 7/15/2023 97.00 FAIRPOINT COMMUN 13.1 4/1/2018 1.00 FAIRPOINT COMMUN 13.1 4/1/2018 1.00 FAIRPOINT COMMUN 13.1 4/2/2018 0.92 FIBERTOWER CORP 9.0 11/15/2012 3.00 FIBERTOWER CORP 9.0 1/1/2016 12.00 FULL GOSPEL FAM 8.4 6/17/2031 10.07 GE-CALL04/13 6.1 10/15/2026 100.03 GEOKINETICS HLDG 9.8 12/15/2014 51.13 GEOKINETICS HLDG 9.8 12/15/2014 51.50 GLB AVTN HLDG IN 14.0 8/15/2013 21.00 GMX RESOURCES 4.5 5/1/2015 33.00 GMX RESOURCES 9.0 3/2/2018 20.25 HAWKER BEECHCRAF 8.5 4/1/2015 9.00 HAWKER BEECHCRAF 8.9 4/1/2015 1.25 JAMES RIVER COAL 3.1 3/15/2018 19.95 JAMES RIVER COAL 4.5 12/1/2015 33.00 LAS VEGAS MONO 5.5 7/15/2019 20.00 LBI MEDIA INC 8.5 8/1/2017 30.25 LEHMAN BROS HLDG 0.3 12/12/2013 23.50 LEHMAN BROS HLDG 0.3 1/26/2014 23.50 LEHMAN BROS HLDG 1.0 10/17/2013 23.50 LEHMAN BROS HLDG 1.0 3/29/2014 23.50 LEHMAN BROS HLDG 1.0 8/17/2014 23.50 LEHMAN BROS HLDG 1.0 8/17/2014 23.50 LEHMAN BROS HLDG 1.3 2/6/2014 23.50 LEHMAN BROS INC 7.5 8/1/2026 21.50 MASHANTUCKET PEQ 8.5 11/15/2015 7.50 MASHANTUCKET PEQ 8.5 11/15/2015 7.50 MASHANTUCKET TRB 5.9 9/1/2021 7.50 MF GLOBAL LTD 9.0 6/20/2038 73.50 OVERSEAS SHIPHLD 8.8 12/1/2013 77.59 PENSON WORLDWIDE 12.5 5/15/2017 24.38 PENSON WORLDWIDE 12.5 5/15/2017 41.50 PLATINUM ENERGY 14.3 3/1/2015 51.50 PLATINUM ENERGY 14.3 3/1/2015 51.50 PMI CAPITAL I 8.3 2/1/2027 0.63 PMI GROUP INC 6.0 9/15/2016 31.01 POWERWAVE TECH 1.9 11/15/2024 2.25 POWERWAVE TECH 1.9 11/15/2024 2.25 POWERWAVE TECH 3.9 10/1/2027 2.25 POWERWAVE TECH 3.9 10/1/2027 1.00 RESIDENTIAL CAP 6.9 6/30/2015 29.38 SAVIENT PHARMA 4.8 2/1/2018 27.00 SCHOOL SPECIALTY 3.8 11/30/2026 44.50 TERRESTAR NETWOR 6.5 6/15/2014 10.00 TEXAS COMP/TCEH 10.3 11/1/2015 8.79 TEXAS COMP/TCEH 10.3 11/1/2015 10.00 TEXAS COMP/TCEH 10.3 11/1/2015 10.25 TEXAS COMP/TCEH 10.5 11/1/2016 15.88 TEXAS COMP/TCEH 10.5 11/1/2016 9.00 TEXAS COMP/TCEH 15.0 4/1/2021 25.50 TEXAS COMP/TCEH 15.0 4/1/2021 27.58 THQ INC 5.0 8/15/2014 47.25 TL ACQUISITIONS 10.5 1/15/2015 17.13 TL ACQUISITIONS 10.5 1/15/2015 17.13 USEC INC 3.0 10/1/2014 32.00 VERSO PAPER 11.4 8/1/2016 58.73 WCI COMMUNITIES 4.0 8/5/2023 0.38 WCI COMMUNITIES 4.0 8/5/2023 0.38 WCI COMMUNITIES 6.6 3/15/2015 0.38 ********* 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 ***