diff --git a/Changelog.asciidoc b/Changelog.asciidoc
index 68cad387..2d62ae86 100644
--- a/Changelog.asciidoc
+++ b/Changelog.asciidoc
@@ -1,6 +1,19 @@
 = Changelog
 
 
+v1.2POST1 (2017.2; issue #127)::
+
+Changes since v1.1:
+
+- WinFsp-FUSE now supports BSD flags (Windows file attributes) during `getattr` and `fgetattr`. It also adds the `chflags` operation. BSD flags support requires use of the `FSP_FUSE_CAP_STAT_EX` capability and the new `struct fuse_stat_ex` which includes an `st_flags` field. If the preprocessor macro `FSP_FUSE_USE_STAT_EX` is defined before inclusion of `<fuse.h>` then `struct fuse_stat` will also be defined to include the `st_flags` field.
+- WinFsp-FUSE also adds the following OSXFUSE operations: `setcrtime`, `setchgtime`. These can be used to set the creation (birth) time and change (ctime) time of a file.
+- New `GetDirInfoByName` file system operation adds fast queries of directory info by file name rather than pattern [e.g. `FindFirstFileW(L"foobar", FindData)`]. Tests with fsbench showed that such queries are sped up by an order of magnitude when using `GetDirInfoByName` in MEMFS. Case-sensitive FUSE file systems get this optimization for free. The .NET layer also adds `GetDirInfoByName`.
+- New `FspFileSystemOperationProcessId` API adds support for getting the originating process ID (PID) during `Create`, `Open` and `Rename` calls. FUSE file systems can now access `fuse_context::pid`. The .NET layer also adds `GetOperationProcessId`.
+- New command line tool `fsptool` allows command line access to some WinFsp features.
+- The WinFsp launcher now passes the name of the user who launched the file system as a special parameter %U. This is useful to file systems that use the launcher infrastructure, such as SSHFS-Win. [Please note that in earlier betas the user name was passed as parameter %3; the previous method was insecure and is no longer supported.]
+- Important GitHub issues fixed: #96, #97, #103, #107, #127
+
+
 v1.2 (2017.2)::
 
 Changes since v1.1:
diff --git a/src/launcher/launcher.c b/src/launcher/launcher.c
index c217eb4d..6c4abe52 100644
--- a/src/launcher/launcher.c
+++ b/src/launcher/launcher.c
@@ -23,12 +23,16 @@
 #define PROGNAME                        "WinFsp.Launcher"
 
 BOOL CreateOverlappedPipe(
-    PHANDLE PReadPipe, PHANDLE PWritePipe, PSECURITY_ATTRIBUTES SecurityAttributes, DWORD Size,
+    PHANDLE PReadPipe, PHANDLE PWritePipe,
+    DWORD Size,
+    BOOL ReadInherit, BOOL WriteInherit,
     DWORD ReadMode, DWORD WriteMode)
 {
     RPC_STATUS RpcStatus;
     UUID Uuid;
     WCHAR PipeNameBuf[MAX_PATH];
+    SECURITY_ATTRIBUTES ReadSecurityAttributes = { sizeof(SECURITY_ATTRIBUTES), 0, ReadInherit };
+    SECURITY_ATTRIBUTES WriteSecurityAttributes = { sizeof(SECURITY_ATTRIBUTES), 0, WriteInherit };
     HANDLE ReadPipe, WritePipe;
     DWORD LastError;
 
@@ -48,13 +52,13 @@ BOOL CreateOverlappedPipe(
     ReadPipe = CreateNamedPipeW(PipeNameBuf,
         PIPE_ACCESS_INBOUND | FILE_FLAG_FIRST_PIPE_INSTANCE | ReadMode,
         PIPE_TYPE_BYTE | PIPE_READMODE_BYTE | PIPE_WAIT | PIPE_REJECT_REMOTE_CLIENTS,
-        1, Size, Size, 120 * 1000, SecurityAttributes);
+        1, Size, Size, 120 * 1000, &ReadSecurityAttributes);
     if (INVALID_HANDLE_VALUE == ReadPipe)
         return FALSE;
 
     WritePipe = CreateFileW(PipeNameBuf,
         GENERIC_WRITE, FILE_SHARE_READ | FILE_SHARE_WRITE,
-        SecurityAttributes, OPEN_EXISTING, WriteMode, 0);
+        &WriteSecurityAttributes, OPEN_EXISTING, WriteMode, 0);
     if (INVALID_HANDLE_VALUE == WritePipe)
     {
         LastError = GetLastError();
@@ -552,7 +556,6 @@ NTSTATUS SvcInstanceCreateProcess(PWSTR UserName,
     STARTUPINFOEXW StartupInfoEx;
     HANDLE ChildHandles[3] = { INVALID_HANDLE_VALUE, INVALID_HANDLE_VALUE, 0/* DO NOT CLOSE!*/ };
     HANDLE ParentHandles[2] = { INVALID_HANDLE_VALUE, INVALID_HANDLE_VALUE };
-    SECURITY_ATTRIBUTES PipeAttributes = { sizeof(SECURITY_ATTRIBUTES), 0, TRUE };
     PPROC_THREAD_ATTRIBUTE_LIST AttrList = 0;
     SIZE_T Size;
     NTSTATUS Result;
@@ -570,16 +573,16 @@ NTSTATUS SvcInstanceCreateProcess(PWSTR UserName,
          */
 
         /* create stdin read/write ends; make them inheritable */
-        if (!CreateOverlappedPipe(&ChildHandles[0], &ParentHandles[0], &PipeAttributes, 0,
-            0, 0))
+        if (!CreateOverlappedPipe(&ChildHandles[0], &ParentHandles[0],
+            0, TRUE, FALSE, 0, 0))
         {
             Result = FspNtStatusFromWin32(GetLastError());
             goto exit;
         }
 
         /* create stdout read/write ends; make them inheritable */
-        if (!CreateOverlappedPipe(&ParentHandles[1], &ChildHandles[1], &PipeAttributes, 0,
-            FILE_FLAG_OVERLAPPED, 0))
+        if (!CreateOverlappedPipe(&ParentHandles[1], &ChildHandles[1],
+            0, FALSE, TRUE, FILE_FLAG_OVERLAPPED, 0))
         {
             Result = FspNtStatusFromWin32(GetLastError());
             goto exit;
@@ -628,8 +631,28 @@ NTSTATUS SvcInstanceCreateProcess(PWSTR UserName,
             CREATE_SUSPENDED | CREATE_NEW_PROCESS_GROUP | EXTENDED_STARTUPINFO_PRESENT, 0, 0,
             &StartupInfoEx.StartupInfo, ProcessInfo))
         {
-            Result = FspNtStatusFromWin32(GetLastError());
-            goto exit;
+            if (ERROR_NO_SYSTEM_RESOURCES != GetLastError())
+            {
+                Result = FspNtStatusFromWin32(GetLastError());
+                goto exit;
+            }
+
+            /*
+             * On Win7 CreateProcessW with EXTENDED_STARTUPINFO_PRESENT
+             * may fail with ERROR_NO_SYSTEM_RESOURCES.
+             *
+             * In that case go ahead and retry with a CreateProcessW with
+             * bInheritHandles==TRUE, but without EXTENDED_STARTUPINFO_PRESENT.
+             * Not ideal, but...
+             */
+            StartupInfoEx.StartupInfo.cb = sizeof StartupInfoEx.StartupInfo;
+            if (!CreateProcessW(Executable, CommandLine, 0, 0, TRUE,
+                CREATE_SUSPENDED | CREATE_NEW_PROCESS_GROUP, 0, 0,
+                &StartupInfoEx.StartupInfo, ProcessInfo))
+            {
+                Result = FspNtStatusFromWin32(GetLastError());
+                goto exit;
+            }
         }
     }
     else
@@ -1045,6 +1068,10 @@ exit:
 
     SvcInstanceRelease(SvcInstance);
 
+    if (STATUS_TIMEOUT == Result)
+        /* convert to an error! */
+        Result = 0x80070000 | ERROR_TIMEOUT;
+
     return Result;
 }