/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130311.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, March 11, 2013, Vol. 17, No. 69 Headlines 1250 OCEANSIDE: Hokulia Project Developers File Bankruptcy A123 SYSTEMS: Committee Objects to $1.5 Million for NEC Corp. ADAMAR OF NEW JERSEY: 10th Cir. Affirms Ruling on Gambling Debt ADVANCED COMPUTER: Wants April 30 Extension of Plan Deadline AEMETIS INC: Sprott Holds 10% Equity Stake at Dec. 31 AGFEED INDUSTRIES: Farm Credit Extends Forbearance Until May 1 AGRIPARTNERS LIMITED: TLC Mitigation Postpetition Loan Approved AIDA'S PARADISE: TD Bank Collateral Valued at $5.96 Million ALG INTERMEDIATE: S&P Assigns 'B' CCR & Rates $160MM Facility 'B+' ALPHA PARTNERS: Files Schedules of Assets and Liabilities AMERICA WEST: Judge Clears April Auction for Mine Operator AMERICAN SUZUKI: CBRE, Prudential Tapped as Real Estate Brokers AMERICAN SUZUKI: Wants to Expand PwC's Work as Tax Accountant AS SEEN ON TV: Completes Merger with eDiets.com ASSET ACCEPTANCE: S&P Puts 'B+' ICR on CreditWatch Developing ATHANASIOS III: Trustee Can't Act on Unsecured Creditors' Behalf ATP OIL: $135M Royalty Deals Off-Limits From Creditors, Suits Say ATP OIL: Court to Convene Mar. 28 Hearing on Gomez Wells' Shut-In ATP OIL: Gets Final Order on Securities Trading Limitations AVANTAIR INC: Issues $1.3 Million Additional Convertible Notes AVON PRODUCTS: Fitch Rates $1.5 Billion Sr. Unsecured Notes 'BB+' BERNARD L. MADOFF: Settlement Lets Merkin Use Part of $410MM BERNARD L. MADOFF: Picard Loses Intervention Bid in Fairfield Row BERNARD L. MADOFF: Exec Claims Prosecutors Gutted Legal Fund BIOVEST INT'L: Returns to Chapter 11 with Another Debt-Swap Plan BONDS.COM GROUP: Sells 20 Units to Trimarc for $2 Million BOWLES SUB: Wells Fargo Has Plan Objections; Hearing March 22 BRIER CREEK: Hires Grant Thornton as Accountants BRITISH AMERICAN: U.S. Court to Hear Suit Against Ex-Directors BUSINESS DEVELOPMENT: Sec. 341 Meeting Slated for March 20 CAELUS RE 2013: S&P Assigns 'BB-' Rating to Issued Notes CARL'S PATIO: Sale to Insiders Quickly Approved CARL'S PATIO: BGA Management Approved as Financial Advisor CASH STORE: Coliseum Capital Holds 16% Equity Stake at Dec. 31 CATALYST PAPER: Incurs $35.2 Million Net Loss in Fourth Quarter CENTENNIAL BEVERAGE: Hires Hank Dickerson as Real Estate Broker CENTER PLAZA: Kokolis Fails in Bid to Dismiss Wells Fargo Suit CHI OVERHEAD: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable CHINA EXECUTIVE: Merger with BETC Took Effect March 6 CHEROKEE SIMEON: AstraZeneca Unit Wants Ch. 11 Nixed Due to Cost CHRISTOPHER FRANK PAXOS: Court Rejects Motion to Quash Summons CHURCH STEET: Court Approves Reorganization Plan CLAIRE'S STORES: Plans to Offer $210 Million of Sr. Secured Notes CLAIRE'S STORES: Moody's Rates New $210MM First Lien Notes 'B2' CLAIRE'S STORES: S&P Rates $210-Mil. Senior Secured Notes 'B-' CUI GLOBAL: Intends to Acquire Orbital-UK for GBP17 Million CUI GLOBAL: Offering 7 Million Common Shares DAVE & BUSTER'S: Moody's Upgrades Rating on Senior Notes to 'B3' DAVID T. HALES: Plan Confirmation Hearing Continued to April 11 DEMCO INC: Sec. 341 Meeting Adjourned to April 17 DEWEY & LEBOEUF: Ex-Partners Make Case to Keep 2011 Bonuses DEX MEDIA EAST: Bank Debt Trades at 29% Off in Secondary Market DEX MEDIA WEST: Bank Debt Trades at 24% Off in Secondary Market DOWLING COLLEGE: Moody's Confirms Caa1 Rating on Two Bond Issues DRYSHIPS INC: Incurs $129.8 Million Net Loss in Fourth Quarter EASTMAN KODAK: Judge Clears New Financing Deal with Lenders EDISON MISSION: Wants to Extend PoJo Forbearance Deal to April 5 EDUCATION HOLDINGS: Wins OK for Ch. 11 Exit Plan EMG UTICA: Moody's Assigns B2 Rating to Proposed $325MM Loan EMPRESAS INTEREX: Plan Outline Hearing Scheduled for March 27 ENDEAVOUR INTERNATIONAL: Incurs $6.5-Mil. Net Loss in 4th Quarter EZE CASTLE: Moody's Assigns First-Time B2 CFR; Outlook is Stable FIRST PLACE: Chapter 7 Conversion Sought FRENCH QUARTER: Court Rules in Lawsuit Against Principal FRONTIER BANK: Closed; HeritageBank of The South Assumes Deposits GARY STANCIL: Ross Dembling et al. Dismissed From Lawsuit GATEHOUSE MEDIA: Incurs $30.3 Million Net Loss in Fiscal 2012 GMX RESOURCES: S&P Lowers Corporate Credit Rating to 'D' HAWKER BEECHCRAFT: To Protest $427.5-Mil. Air Force Contract HAWKER BEECHCRAFT: Blind Plaintiff Has Green Light to Hire Counsel HERCULES OFFSHORE: Board OKs Equity Grants for Executive Officers HERTZ GLOBAL: Share Repurchase Plan No Impact on Moody's B1 CFR HOSTESS BRANDS: U.S. Trustee Seeks Holdback on Professional Fees HOVNANIAN ENTERPRISES: Incurs $11.3-Mil. Loss in Fiscal Q1 IMAGINE FULFILLMENT: Court Rules on Summary Judgment Bids INVESTORS CAPITAL: Case Venue for 3 Units Tranferred to M.D. Tenn. INTELSAT SA: Plans to Redeem $915 Million 2017 PIK Notes JOHN FORSYTH: Judge Stays U.S. Actions vs. Canadian Company KIEBLER RECREATION: May Recoup $117K in Payments to JGM LAS VEGAS SANDS: Moody's Changes Outlook on All Ratings to Stable LCI HOLDING: US Wants Ch. 11 Sale Nixed Over $24-Mil. Tax Bill LCI HOLDING: Patient Care Ombudsman Taps SAK as Advisor LCI HOLDING: Replaces Young Conaway with Cole Schotz LEAGUE NOW: Consummates Reverse Merger with NYBD Holding LEUCADIA NATIONAL: Fitch Hikes LT Issuer Default Rating From 'BB' LEVEL 3: CEO James Crowe to Quit by End of 2013 LHC LLC: Seeks to Terminate Leaf Ice Centre Contract With CSCG LHC LLC: Wants Discovery of Club Sporting, Proposed Receiver LHC LLC: Seeks to Use Wells Fargo's Cash Collateral LITHIUM TECHNOLOGY: Cortis Capital Chairman Appointed to Board LODGENET INTERACTIVE: Wins Confirmation of Prepack Plan MF GLOBAL: Chapter 11 Trustee Files Cash Collateral Budgets MONITRONICS INT'L: Debt Amendments No Impact on Moody's B2 CFR NANA DEVELOPMENT: Moody's Rates Secured Notes and Term Loan 'B3' NANA DEVELOPMENT: S&P Rates Proposed Notes and Term Loan 'B+' NEAL DAVID ELINOFF: Lulu City Plan Objection Overruled NICHOLAS INNERBICHLER: 10th Cir. Affirms Ruling on Gambling Debt ORCHARD SUPPLY: Moody's Cuts CFR to Caa2; Outlook Stays Negative ORMET CORP: Proposes Evercore Group as Investment Banker ORMET CORP: Hiring Dinsmore as General Bankruptcy Counsel ORMET CORP: Morris Nichols to Serve as Delaware Counsel PACIFIC PARK: Foreclosure Action Gets Go Signal From Dist. Court PHILADELPHIA ENERGY: S&P Assigns 'B+' CCR; Outlook Stable READER'S DIGEST: Wants to Employ Evercore as Investment Banker READER'S DIGEST: Taps FTI Consulting as Financial Advisor READER'S DIGEST: Hires Sitrick as Communications Consultant RG STEEL: Wins Court Approval of Baltimore, Severstal Settlements RG STEEL: Amends Purchase Agreement to Resolve SNA Objection RG STEEL: Sets Framework For $100-Mil. in Clawback Suits RHYTHM & HUES: South Korean Firm's $17MM Offer to Lead Auction RHYTHM AND HUES: Sec. 341 Meeting of Creditors Set for March 15 RICKY LEE BUMGARDNER: Wins Confirmation of Plan RUBY WESTERN: S&P Assigns 'BB+' CCR & Rates $500MM Loan 'BB+' SAGITTARIUS RESTAURANTS: Moody's Rates New Sr. Debt Facility 'B2' SEALED AIR: Moody's Assigns B1 Rating to New US$425MM Sr. Notes SEALED AIR: S&P Rates $425MM Sr. Unsecured Notes Due 2023 'BB-' SEITEL INC: Moody's Assigns B3 Rating to New US$250MM Notes Issue SEITEL INC: S&P Assigns 'B' Rating to $250MM Notes Due 2019 SHREE-HARI: Motel Owner Wins Approval of Exit Plan SOLAR TRUST: Wins Confirmation of Plan After Committee Deal STEPHEN ALLEN WEST: US Trustee Response Deadline Moved to August SUDANO INC: S. Bongiovanni Can't Represent Mother in Appeal SUNSHINE HOTELS: Sec. 341 Meeting of Creditors on March 12 VERSO PAPER: Moody's Downgrades Rating on 2nd Lien Notes to Caa2 * Mortgage Buyer Falls Flat on Discounted Debt * Bankruptcy Judge Bruce Markell Steps Down to Teach * Moody's Maintains Negative Outlook on State Housing Agencies * Hawaiian Lawyer Wing Ng Suspended From 1-Year Law Practice * BOND PRICING -- For Week From March 4 to 8, 2013 ********* 1250 OCEANSIDE: Hokulia Project Developers File Bankruptcy ---------------------------------------------------------- 1250 Oceanside Partners and its affiliates sought Chapter 11 protection (Banrk. D. Haw. Lead Case No. 13-00353) on March 6, 2013 in Honolulu, Hawaii. Erin Miller and Nancy Cook Lauer, writing for West Hawaii Today, report that developer 1250 Oceanside and its two affiliated developers, Front Nine LLC and Pacific Star -- all Lyle Andersen companies -- are seeking Chapter 11 bankruptcy protection while they try to restructure $680 million in debt, most of which is held by new lender Sun Kona Finance LLC. The firms are the developers of the upscale Hokulia project on the Kona Coast. According to the report, Hawaii County's Corporation Counsel Lincoln Ashida said Friday, March 8, that Hawaii County taxpayers aren't likely to lose money because of bankruptcy filings by the three developers. According to the report, Mr. Ashida said Corporation Counsel attorneys attended the initial court hearing Thursday in U.S. Bankruptcy Court in Honolulu, and his office will keep close tabs on proceedings as they occur. Among others, Mr. Ashida said the county is a secured creditor for $20 million and it is on the top of the creditor list, with 80 Keopuka lots, valued at more than $20 million, as collateral. The report notes Red Hill 1250 Inc. was the general partner with Oceanside, holding 99% of the company. Red Hill's President and General Manager Craig Pickett said in a declaration filed March 6 that the three companies "intend to restructure and resolve their secured and unsecured debt . . . so that development of the Hokulia project can proceed to completion and to enable the future development of the Keopuka property." The report recounts Sun Kona, an affiliate of SunChase Holdings, acquired a $626 million loan from the Bank of Scotland Dec. 28. In January, Sun Kona put Mr. Pickett in charge of all three Hawaii companies now filing bankruptcy. According to the report, Oceanside listed assets of about $44.5 million. The total listed value of Front Nine's property is about $18.3 million, and Pacific Star has about $5.3 million in assets. A123 SYSTEMS: Committee Objects to $1.5 Million for NEC Corp. ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the creditors' committee for A123 Systems Inc. objects to giving Japan's NEC Corp. $1.5 million in partial reimbursement of expenses in preparation for bidding at the auction in December where most of the assets ended up being sold for $256.6 million to China's Wanxiang Group Corp. The report recounts that A123 said in a Feb. 20 court filing that NEC's participation helped raise the price by $100 million above the opening bid from Johnson Controls Inc. However, in papers filed March 7, the committee contends NEC would have participated in the auction with or without the expense reimbursement. The committee is resisting reimbursement to enhance recovery for unsecured creditors. The committee contends A123 didn't exercise proper business judgment in agreeing to reimbursement. The committee only had the ability to confer with A123 and didn't have veto rights under bidding procedures approved by the Delaware bankruptcy court in November. The report relates that there will be a March 13 hearing to decide on NEC's reimbursement. At the same hearing, the court is scheduled to consider disclosure materials that must be approved before creditors can vote on A123's Chapter 11 plan. About A123 Systems Based in Waltham, Massachusetts, A123 Systems Inc. designed, developed, manufactured and sold advanced rechargeable lithium-ion batteries and battery systems and provided research and development services to government agencies and commercial customers. A123 was the recipient of a $249 million federal grant from the Obama administration. A123 and U.S. affiliates, A123 Securities Corporation and Grid Storage Holdings LLC, sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case Nos. 12-12859 to 12-12861) on Oct. 16, 2012. A123 disclosed assets of $459.8 million and liabilities totaling $376 million. Lawyers at Richards, Layton & Finger, P.A., and Latham & Watkins LLP serve as the Debtors' counsel. Lazard Freres & Co. LLC acts as the Debtors' financial advisors, while Alvarez & Marsal serves as restructuring advisors. Logan & Company Inc. serves as the Debtors' claims and noticing agent. Brown Rudnick LLP and Saul Ewing LLP serve as counsel to the Official Committee of Unsecured Creditors. Prior to the bankruptcy filing, A123 had an agreement to sell an 80% stake in the business to Chinese auto-parts maker Wanxiang Group Corp. U.S. lawmakers opposed the deal over concerns on the transfer of American taxpayer dollars and technology to China. When it filed for bankruptcy, the Debtors presented a deal to sell all assets to Johnson Controls Inc., subject to higher and better offers. At the auction in December 2012, most of the assets ended up being sold for $256.6 million to Wanxiang. Wanxiang America Corporation and Wanxiang Clean Energy USA Corp. are represented in the case by lawyers at Young Conaway Stargatt & Taylor, LLP, and Sidley Austin LLP. JCI is represented in the case by Josh Feltman, Esq., at Wachtell Lipton Rosen & Katz LLP. A123 has filed a liquidating Chapter 11 plan designed to give holders of $143.75 million in subordinated notes a recovery of about 65%. General unsecured creditors with $124 million in claims are to have the same recovery. The plan provides for holders of $35.7 million in senior note claims to be paid in full. ADAMAR OF NEW JERSEY: 10th Cir. Affirms Ruling on Gambling Debt --------------------------------------------------------------- Adamar of New Jersey, Inc., a company that owns the Tropicana casino in Atlantic City, New Jersey, appeals the bankruptcy court's order finding that a gambling debt incurred by Nicholas Raymond Innerbichler was dischargeable. In its findings of fact and conclusions of law entered after a two-day trial, the bankruptcy court held that Adamar had failed to prove that Mr. Innerbichler's debt was obtained by fraud under 11 U.S.C. Sec. 523(a)(2)(A). The bankruptcy court entered judgment for Mr. Innerbichler on April 13, 2012, and Adamar timely appealed. The Debtor cross-appealed, arguing that the bankruptcy court erred in failing to award him fees under Sec. 523(d). Finding no error by the bankruptcy court, the United States Bankruptcy Appellate Panel, Tenth Circuit affirmed. "We are not persuaded that the bankruptcy court committed reversible error," said Hon. Honorable Howard R. Tallman, U.S. Judge, United States Bankruptcy Court for the District of Colorado, sitting by designation. Judge Tallman wrote the opinion for the three-judge panel. Mr. Innerbichler had been gambling in Atlantic City casinos, including the Tropicana, since at least 1992. In 2003 he sold his business, TAMSCO, for $68 million, and received approximately half of that amount as a 49% owner of the business. In August 2003, Mr. Innerbichler filled out a credit application with Adamar in which he listed his income as $250,000 per year and his assets at $30 million. Adamar reviewed his credit at that time, and again in January and July of 2004. Prior to January 2005, he had always paid his debts to Adamar. Between January 21 and January 23, 2005, Mr. Innerbichler signed markers with Adamar for a total amount of $550,000. The markers bore the legend, "I represent that I have received cash for the above amount and that said amount is on deposit in said bank or trust company in my name. It is clear from all claims and is subject to this check." When Adamar subsequently presented the markers to Mr. Innerbichler's bank for payment in March 2005, it learned that Mr. Innerbichler had stopped payment on them. Adamar obtained a judgment for $399,936.99 against Mr. Innerbichler in New Jersey state court in July 2006. Mr. Innerbichler paid Adamar $160,000 in partial satisfaction of the judgment before filing for Chapter 11 bankruptcy in June 2009. Shortly thereafter, Adamar filed its complaint under Sec. 523(a)(2)(A), objecting to discharge of the debt that remained outstanding. Mr. Innerbichler's case was converted to one under Chapter 7 on January 6, 2011. After a trial on the merits in April 2011, the bankruptcy court held that the gambling debt was dischargeable, but did not award Mr. Innerbichler costs and reasonable attorney's fees for the proceeding as permitted under Sec. 523(d). Both parties appealed the bankruptcy court's decision to the Tenth Court. The case is, ADAMAR OF NEW JERSEY, INC., Plaintiff-Appellant- Cross-Appellee, v. NICHOLAS RAYMOND INNERBICHLER, Defendant- Appellee-Cross-Appellant, BAP Nos. NM-12-032, NM-12-038 (10th Cir. BAP). A copy of the Tenth Circuit's Feb. 25, 2013 Opinion is available at http://is.gd/d9x6l3from Leagle.com. About Tropicana Entertainment Las Vegas, Nevada-based Tropicana Entertainment Inc., along with its affiliates, owns or operates nine casinos and resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey. The Company owns a development property in Aruba. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-10856) on May 5, 2008. Kirkland & Ellis LLP and Richards Layton & Finger, represent the Debtors in their restructuring efforts. Lazard Ltd. served as financial advisor and Kurtzman Carson Consultants LLC served as notice, claims, and balloting agent. Epiq Bankruptcy Solutions LLC served as the Debtors' Web site administration agent. AlixPartners LLP served as the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represented the Official Committee of Unsecured Creditors. Capstone Advisory Group LLC served as financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation of a reorganization plan in May 2009. Effective March 31, 2010, Tropicana emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, obtained approval of a separate Chapter 11 plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 protection (Bankr. D. N.J. Lead Case No. 09-20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the New Jersey cases. Manchester Mall was a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC served as claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Adamar of New Jersey and Manchester Mall later merged into Adamar of NJ In Liquidation LLC. The merger and name change was in accordance with an Amended and Restated Purchase Agreement, which governs the sale and transfer of the operations of the Tropicana Casino and Resort - Atlantic City, including substantially all of the New Jersey Debtors' assets, to Tropicana Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana AC Sub Corp., free and clear of any and all liens, claims and encumbrances. ADVANCED COMPUTER: Wants April 30 Extension of Plan Deadline ------------------------------------------------------------ Advanced Computer Technology, Inc., filed a motion with the U.S. Bankruptcy Court seeking an extension until April 30, 2013, of the deadline to file a Chapter 11 plan and disclosure statement. On Aug. 22, 2012, Debtor filed two separate motions for the turnover of property, requesting the following: a) The turnover to the Debtor of $262,307.60 deposited by the Public Buildings Authority of Puerto Rico in Civil Case No. KCD2004-0604, with the Clerk of the Court of First Instance of Puerto Rico, San Juan Section; b) The turnover to the Debtor of $692,340.24, deposited by Banco Santander Puerto Rico and Doral Bank in Civil Case No. KAC2009-1257, with the Clerk of the Court of First Instance. During a hearing held Sept. 25 on the Debtor's motion for leave to use Banco Bilbao Vizcaya Argentaria's cash collateral, the Debtor and BBVA agreed on a stipulation for the interim use of cash collateral and adequate protection, and for the Court to enter an order directing the Court of First Instance to turn over the funds deposited in Civil Cases Nos. KCD2004-0604 and KAC2009-1257 in order for those funds to be deposited with the Clerk of the Bankruptcy Court. On Nov. 30, 2012, the Bankruptcy Court entered the orders directing the Court of First Instance to turn over the funds deposited in Civil Cases Nos. KCD2004-0604 and KAC2009-1257 in order for those funds to be deposited with the Clerk of the Bankruptcy Court. On Dec. 5, 2012, the Debtor informed -- and requested -- the Court of First Instance to comply with the turnover orders. On Dec. 18, Gomez Holdings, Inc., filed an opposition to Debtor's motion for turnover in Civil Case No. KAC2009-1257. On Dec. 21, the Court of First Instance in Civil Case No. KAC2009-1257 entered an order for the turnover of funds as unopposed. On Dec. 28, the Court of First Instance in Civil Case No. KAC2009-1257 entered an order denying GHI's opposition. On Jan. 2, 2013, GHI filed a motion for reconsideration of the order of Dec. 21 and requested the stay of the turnover. On Jan. 4, GHI filed a motion for reconsideration of the Dec. 28 order, and also requested the stay of the turnover. On Jan. 23, 2013, the Court of First Instance in Civil Case No. KAC2009-1257 notified the entry of its order directing Debtor to respond to GHI's motions. The Debtor is currently preparing its response to GHI's motions. As to Civil Case No. KCD2004-0604, the Public Buildings Authority of Puerto Rico filed an opposition to the turnover order and requested the Court of First Instance not to proceed until its counsel returned from vacation. In addition, GHI filed a request for intervention under Rule 21 of the Rules of Civil Procedure of Puerto Rico in Civil Case No. KCD2004-0604. The Debtor is currently in the process of recovering the funds deposited with the Clerk of the Court of First Instance, which will allow it to determine the nature of its bankruptcy exit plan. Therefore, it is indispensable for the Debtor to recover the funds prior to the filing of its Plan and Disclosure Statement. About Advanced Computer San Juan, Puerto Rico-based Advanced Computer Technology, Inc., filed a Chapter 11 petition (Bankr. D.P.R. Case No. 12-04454) in Old San Juan on June 6, 2012. The Debtor, an information system consulting firm, disclosed $10.34 million in assets and $6.176 million in liabilities in its schedules. It said software and licenses rights are worth $6.30 million. The value of its 100% ownership of Sprinter Solutions, Inc., is unknown. The Debtor's only shareholder is Investigacion Y Programas, S.A. Its president is Jaime Romano and its secretary and chief executive officer is Osvaldo Karuzic, none of whom hold any shares in the Debtor. Bankruptcy Judge Brian K. Tester presides over the case. Charles Alfred Cuprill, Esq., at Charles A. Cuprill, PSC Law Offices, in San Juan, P.R., serves as the Debtor's counsel. William Santiago-Satre, Esq., at De Diego Law Offices, in Carolina, P.R., represents Banco Bilbao Vizcaya Argentaria Puerto Rico as counsel. AEMETIS INC: Sprott Holds 10% Equity Stake at Dec. 31 ----------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Sprott Inc. and Sprott Private Credit Trust disclosed that, as of Dec. 31, 2012, they beneficially own 17,320,343 common shares of Aemetis, Inc., representing 10.2% of the shares outstanding. A copy of the filing is available for free at: http://is.gd/zUrVPn About Aemetis Headquartered in Cupertino, California, Aemetis, formerly AE Biofuels Inc., is an advanced fuels and renewable chemicals company. Aemetis -- http://www.aemetis.com/-- owns and operates a 55 million gallon renewable fuels plant in California; and owns and operates a 50 million gallon capacity renewable chemicals and advanced fuels production facility on the east coast of India. Aemetis operates a research and development laboratory at the Maryland Biotech Center, and holds four granted patents and ten pending patents on its Z-microbe and related technology for the production of renewable fuels and chemicals. Aemetis incurred a net loss of $18.29 million in 2011, as compared with a net loss of $8.56 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $98.84 million in total assets, $87.46 million in total liabilities and $11.37 million in total stockholders' equity. AGFEED INDUSTRIES: Farm Credit Extends Forbearance Until May 1 -------------------------------------------------------------- AgFeed USA, LLC, a wholly owned subsidiary of AgFeed Industries, Inc., and certain subsidiaries of AgFeed USA, LLC, Farm Credit Services of America, FLCA, and Farm Credit Services of America, PCA, entered into an amendment to the Forbearance Agreement, dated Feb. 1, 2013, among the Borrowers and Farm Credit, with respect to AgFeed USA, LLC's Credit Agreement, dated June 6, 2006. In the Amendment, Farm Credit agreed that it will extend the period during which it will take no action to enforce its default remedies under the Credit Agreement and related security and other agreements until the earlier of (1) violation of the Forbearance Agreement or further breach of the Credit Agreement and related security and other agreements or (2) May 1, 2013. The Company is working closely with Farm Credit in reviewing its financing options. A copy of the Amended Forbearance is available at: http://is.gd/JyQ7WD About Agfeed Industries NASDAQ Global Market Listed AgFeed Industries, formerly known as M2 P2, LLC, is an international agribusiness with operations in the U.S. and China. AgFeed has two business lines: animal nutrition in premix, concentrates and complete feeds and hog production. In the U.S., AgFeed's hog production unit, M2P2, is a market leader in setting new standards for production efficiency and productivity. AgFeed believes the transfer of these processes, procedures and techniques will allow its new Western- style Chinese hog production units to set new standards for production in China. China is the world's largest pork market consuming 50% of global production and over 62% of total protein consumed in China is pork. Hog production in China currently enjoys income tax free status. AGRIPARTNERS LIMITED: TLC Mitigation Postpetition Loan Approved --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida authorized Agripartners Limited Partnership to obtain postpetition financing from TLC Mitigation, LLC, on an unsecured basis. As reported in the TCR on March 1, 2013, TLC Mitigation is already owed $268,788 for financing provided to the Debtor from Jan. 1, 2012, through the Petition Date. TLC Mitigation has agreed to provide the Debtor funding postpetition in an amount not to exceed $40,000 per month on a going forward basis in exchange for an administrative expense claim, which will be subordinate to the claim of Investors Warranty of America, Inc. About Agripartners Limited Partnership Agripartners Limited Partnership filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-19214) in Ft. Myers, Florida on Dec. 24, 2012. Philip J. Landau, Esq., at Shraiberg, Ferrara & Landau, P.A., serves as general bankruptcy counsel; Richard Hollander, Esq., at Miller & Hollander serves as local counsel. The Debtor estimated assets of at least $100 million and liabilities of at least $50 million. AIDA'S PARADISE: TD Bank Collateral Valued at $5.96 Million ----------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida entered an order valuing the collateral securing TD Bank, N.A.'s claim in the Chapter 11 case of Aida's Paradise, LLC, at $5,958,175. TD Bank, N.A., holds a first mortgage interest in property of the estate, which is comprised of: the former Salt Island restaurant; a miniature golf course, known as Volcano Island; a Dunkin' Donuts; and a billboard. The values of the properties comprising the collateral are: Property Value -------- ----- Former Salt Island restaurant $3,288,175 Mini Golf Course $700,000 Dunkin' Donuts $1,250,000 Billboard $720,000 The valuation is in relation to any proposed treatment under a plan of reorganization in the case. About Aida's Paradise Based in Maitland, Florida, Aida's Paradise LLC owns roughly three acres of developed real property on International Drive in Orlando, Florida. It leases various parcels of the I-Drive Property to three tenants: Volcano Island Mini Golf, Dunkin Donuts (aka Jennifer's Donuts), and CBS Outdoor (which operates an electronic billboard on site). Aida's Paradise filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 12-00189) on Jan. 6, 2012. Chief Karen S. Jennemann presides over the case. R. Scott Shuker, Esq., at Latham Shuker Eden & Beaudine LLP, serves as the Debtor's counsel. Terry J. Soifer and Consulting CFO, Inc., serves as its financial advisor. The petition was signed by Dr. Adil R. Elias, manager. In its schedules, the Debtor disclosed $15.0 million in total assets and $9.32 million in total liabilities. Aida's Paradise, LLC, filed a Plan of Reorganization, as amended, which contemplates that the Debtor will continue to manage and lease to tenants its I-Drive properties, and will continue to try to secure a new restaurant tenant. ALG INTERMEDIATE: S&P Assigns 'B' CCR & Rates $160MM Facility 'B+' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned U.S.-based resort management and packaged vacation provider ALG Intermediate Holdings B.V. a corporate credit rating of 'B'. The outlook is stable. At the same time, S&P assigned the $160 million first-lien credit facility (comprised of a $20 million revolver due 2018 and a $140 million term loan due 2019) its issue-level rating of 'B+', with a recovery rating of '2', indicating S&P's expectation for substantial (70% to 90%) recovery in the event of a payment default. ALG B.V. and ALG USA Holdings LLC are co-borrowers of this debt. In addition, S&P assigned the $75 million second-lien term loan due 2020 its issue-level rating of 'CCC+', with a recovery rating of '6', indicating S&P's expectation for negligible (0% to 10%) recovery in the event of a payment default. ALG Intermediate Holdings B.V. is the direct parent of the co-borrowers and will be a guarantor of the first-lien and second-lien credit facilities. Bain Capital used proceeds from the credit facilities and a $159 million equity contribution to acquire ALG from founder Mullen Family L.P. for $343.5 million. ALG is a vertically integrated travel company comprised of all-inclusive resort management company AMResorts, packaged vacation provider Apple Vacations, and destination management company Amstar. In addition to acquiring ALG, Bain is also acquiring affiliated entity Unlimited Vacation Club (UVC) from Mullen Family L.P. Mullen Family L.P. will retain control of related entity Mullen Real Estate Holdings (MREH). S&P has not incorporated the risk profiles of either UVC or MREH into ALG's credit risk profile, because S&P believes they are not strategic to ALG's operations and in the case of MREH, there is no common ownership control. As a result, S&P do not believe ALG would support these affiliated and related parties as they are currently organized and operated. The 'B' corporate credit rating reflects S&P's assessment of the company' s financial risk profile as "highly leveraged" and S&P's assessment of its business risk profile as "weak," according to its criteria. "Our assessment of ALG's financial risk profile as highly leveraged reflects our expectation for total lease-adjusted debt to EBITDA to be in the 6x area and for EBITDA margin to be about 4% in 2013. ALG's EBITDA margin is low and compares unfavorably with many other leisure sector companies, primarily because of the relatively modest mark-up the company receives on the gross sale of vacation packages (which can include hotel room, airfare, transportation, and other amenities). ALG recognizes the gross value of vacation packages sold (which comprises more than 90% of total revenue) in its financial statements. Partly mitigating the low EBITDA margin is management's assertion that ALG takes only a moderate level of inventory risk in booking vacation packages related solely to the chartering of full-plane flights, and that there are operating controls in place to ensure that vacation packages in the aggregate are not sold at a loss. Also, ALG's EBITDA coverage of interest expense is expected to be in the low- 2x area in 2013, which is good for the rating," S&P said. "Our assessment of ALG's business risk profile as weak reflects high levels of competition for discretionary leisure spending by the company's mostly U.S. and Canadian customer base, high levels of competition and travel-related event risk in the company's mostly Mexican and Caribbean all-inclusive resort market destinations, limited geographic and business diversity compared with other global leisure companies, and a limited track record of operating results. Partly mitigating these risk factors are a portfolio of long-term management contracts in the company's AMResorts resort management business (which is anticipated to be about 62% of 2013 EBITDA) that contain reasonable protections against cancellation, the company's focus on the affluent North American travel market, and the company's good position in, and the increasing popularity of, the all-inclusive resort vacation market," S&P added. ALPHA PARTNERS: Files Schedules of Assets and Liabilities --------------------------------------------------------- Alpha Partners Ltd. filed with the Bankruptcy Court for the Northern District of Texas its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $13,203,582 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $8,571,428 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $16,500,000 ----------- ----------- TOTAL $13,203,582 $25,071,428 Alpha Partners, Ltd., filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 13-30266) on Jan. 21, 2013. Judge Barbara J. Houser presides over the case. Curtis Castillo, P.C., serves as the Debtor's counsel. AMERICA WEST: Judge Clears April Auction for Mine Operator ---------------------------------------------------------- Marie Beaudette and Stephanie Gleason at Dow Jones' DBR Small Cap report that coal-mine operator America West Resources Inc. won bankruptcy court approval to auction its assets next month. About America West Based in Salt Lake City, Utah, America West Resources Inc. is a domestic coal producer engaged in the mining of clean and compliant (low-sulfur) coal. The majority of the Company's coal is sold to utility companies for use in the generation of electricity. America West Resources and three affiliates sought Chapter 11 protection (Banrk. D. Nev. Case Nos. 13-50201 to 13-50204) on Feb. 1, 2013, in Reno, Nevada. Nevada Bankruptcy Judge Bruce A. Markell on Feb. 5, 2013, entered an order transferring the bankruptcy case from Reno to Las Vegas. America West disclosed assets of $18.3 million and liabilities of $35.5 million as of Dec. 31, 2012. America West has tapped the law firm of Flaster/Greenberg P.C. as reorganization counsel; the Law Office of Illyssa I. Fogel as local counsel; and consulting firm CFCC Partners, LLC, as financial advisor. AMERICAN SUZUKI: CBRE, Prudential Tapped as Real Estate Brokers --------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California in late February entered orders authorizing American Suzuki Motor Corporation to employ CBRE, Inc., and Prudential California Realty as real estate brokers. CBRE and Prudential are marketing for sale certain real property of the Debtor. About American Suzuki Established in 1986, American Suzuki Motor Corporation is the sole distributor of Suzuki automobiles and vehicles in the United States. American Suzuki wholesales virtually all of its inventory through a network of independently owned and unaffiliated dealerships located throughout the continental United States. The dealers then market and sell the Suzuki Products to retail customers. Suzuki Motor Corp., the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki products. American Suzuki has 295 employees. There are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. American Suzuki filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC, absent higher and better offers. SMC is not included in the Chapter 11 filing. The Debtor disclosed assets of $233 million and liabilities totaling $346 million. Debt includes $32 million owing to the parent on a revolving credit and $120 million for inventory financing. There is about $4 million owing to trade suppliers. The Court approved the amended Chapter 11 Plan. Under the Company's amended Plan, its Motorcycles/ATV and Marine divisions, along with its continued Automotive parts and service operation, will be sold to a newly organized, wholly-owned subsidiary of Suzuki Motor Corporation, enabling those operations to continue uninterrupted. The new entity will use the ASMC brand name and operate in the continental U.S. ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of Freddie Reiss, Senior Managing Director at FTI Consulting, as chief restructuring officer, and has also added two independent Board members to assist it through this period. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., is the claims and notice agent. The Debtor has retained Imperial Capital, LLC as investment banker. SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern LLP. The Official Committee of Unsecured Creditors is represented by Irell & Manella LLP. AlixPartners, LLC serves as its financial advisor. American Suzuki Motor Corporation on March 1 disclosed that the Court approved the confirmation of the Company's Chapter 11 Plan, which creditors overwhelmingly accepted. Confirmation of the Plan clears the way for the Company to complete its restructuring process, which is expected to occur on March 31, 2013. AMERICAN SUZUKI: Wants to Expand PwC's Work as Tax Accountant ------------------------------------------------------------- American Suzuki Motor Corporation in late February filed a request to expand the scope of order authorizing the employment of PricewaterhouseCoopers, LLP as tax accountant, to include these supplemental services: a. audit for Debtor's fiscal year ending March 31, 2013, and any related work necessary to perform the audit; and b. accounting services relating to the Debtor's closing of any sale transaction that may be approved in the case. PwC will bill on an hourly basis for the supplemental services pursuant to the rates set forth in the application for an order authorizing the retention of PwC as tax consultant. All other aspects of PwC's engagement remain as set forth in the approved application. As reported in the TCR on Jan. 29, 2013, the Debtors will pay PwC on a fixed fee basis for each tax year. The fixed fee for the 2012 Tax Year Services is estimated to be $68,000 and 2013 Tax Year Services will be $78,000. Prior to the Petition Date, PwC obtained payment of $23,267 on the 2012 Tax Year Services and $10,000 on the 2013 Tax Year Services. Tax Compliance Fixed Fee Amount Paid Amount to be Engagement Letters Amount Prepetition Sought in Fee ------------------ ------ ----------- Application ------------- 2012 Tax Year Services $68,000 $23,267 $44,733 2013 Tax Year Services $78,000 $10,000 $68,000 For the tax consulting services, the hourly rates of PwC's personnel are: Partner $700 - $975 Managing Director $650 - $800 Director $550 - $715 Manager $475 - $585 Senior Associate $375 - $442 Associate $275 - $319 Paraprofessional $150 About American Suzuki Established in 1986, American Suzuki Motor Corporation is the sole distributor of Suzuki automobiles and vehicles in the United States. American Suzuki wholesales virtually all of its inventory through a network of independently owned and unaffiliated dealerships located throughout the continental United States. The dealers then market and sell the Suzuki Products to retail customers. Suzuki Motor Corp., the 100% interest holder in the Debtor, manufacturers substantially all of the Suzuki products. American Suzuki has 295 employees. There are approximately 220 automotive dealerships, over 900 motorcycle/ATV dealerships, and over 780 outboard marine dealerships. American Suzuki filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-22808) on Nov. 5, 2012, to sell the business to SMC, absent higher and better offers. SMC is not included in the Chapter 11 filing. The Debtor disclosed assets of $233 million and liabilities totaling $346 million. Debt includes $32 million owing to the parent on a revolving credit and $120 million for inventory financing. There is about $4 million owing to trade suppliers. The Court approved the amended Chapter 11 Plan. Under the Company's amended Plan, its Motorcycles/ATV and Marine divisions, along with its continued Automotive parts and service operation, will be sold to a newly organized, wholly-owned subsidiary of Suzuki Motor Corporation, enabling those operations to continue uninterrupted. The new entity will use the ASMC brand name and operate in the continental U.S. ASMC's legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of Freddie Reiss, Senior Managing Director at FTI Consulting, as chief restructuring officer, and has also added two independent Board members to assist it through this period. Rust Consulting Omni Bankruptcy, a division of Rust Consulting, Inc., is the claims and notice agent. The Debtor has retained Imperial Capital, LLC as investment banker. SMC is represented by lawyers at Klee, Tuchin, Bogdanoff & Stern LLP. The Official Committee of Unsecured Creditors is represented by Irell & Manella LLP. AlixPartners, LLC serves as its financial advisor. American Suzuki Motor Corporation on March 1 disclosed that the Court approved the confirmation of the Company's Chapter 11 Plan, which creditors overwhelmingly accepted. Confirmation of the Plan clears the way for the Company to complete its restructuring process, which is expected to occur on March 31, 2013. AS SEEN ON TV: Completes Merger with eDiets.com ----------------------------------------------- Under the terms of the merger agreement, As Seen On TV issued 19,077,252 shares of its common stock in exchange for all of the issues and outstanding shares of eDiets.com common stock. eDiets.com has now become a 100% wholly-owned subsidiary of As Seen On TV. The transaction is expected to be tax free to eDiets' shareholders and is being done on a stock-for-stock basis. Shares of eDiets common stock, which previously traded under the symbol "DIET," will now cease trading. Steve Rogai, CEO of As Seen On TV, Inc., stated, "We are pleased to announce the closing of the merger with eDiets and remain excited about the combined synergies of our two companies. There are tremendous combined savings and growth potential for both companies using our unique direct response and live shopping channel experience." Kevin Richardson, Chairman of eDiets, stated, "We are excited about the combined growth opportunities of our two companies as we leverage each other's strengths." Merger Highlights * The merger enhances As Seen On TV's ability to achieve its strategic objective of becoming one of the top providers of direct response marketing; * The merger will enable As Seen On TV to expand and diversify its product offering to its customers; * The merger will enable opportunities for increased growth through the expansion of channels of distribution for existing products and services; * Anticipated synergies from the merger, including operating a larger entity with greater critical mass of direct response marketing which could reduce the media buying pricing for the combined company and lower expenses due to an elimination in certain duplicate administrative costs (finance departments, legal, marketing and public company expenses); * The merger will enable opportunities for increased growth through the ability to cross-sell existing products and services. On Feb. 28, 2013, in connection with the closing of the Merger Kevin Richardson II, chairman of eDiets, was appointed to the Company's board of directors. Following these actions, the Company's board of directors is now comprised of Kevin Harrington, Steve Rogai, Dr. Randolph Pohlman, Greg Adams and Kevin Richardson. Pursuant to the terms of the Merger Agreement, the Company increased the size of its board of directors from four members to seven members and one former member of the eDiets.com board of directors was appointed to the Company board of directors. The board of directors expects to identify a sixth and seventh director and make the appointments in the near future. Mr. Richardson is considered an independent director as defined in the Nasdaq Stock Market Listing Rules. It is expected that Mr. Richardson and the other future new independent members of the Company's board of directors will be compensated for their services as directors in accordance with the Company's director compensation policy. About eDiets.com Inc. eDiets.com, Inc. is a leading provider of personalized nutrition, fitness and weight-loss programs. eDiets.com, Inc., features its award-winning, fresh-prepared diet meal delivery service as one of the more than 20 popular diet plans sold directly to members on its flagship site, http://www.eDiets.com/ About As Seen on TV Clearwater, Fla.-based As Seen On TV, Inc., is a direct response marketing company. It identifies, develops, and markets consumer products. The Company reported a net loss of $8.07 million for the year ended March 31, 2012, compared with a net loss of $6.97 million during the prior fiscal year. The Company's balance sheet at Dec. 31, 2012, showed $16.08 million in total assets, $36.36 million in total liabilities and a $20.28 million total stockholders' deficiency. ASSET ACCEPTANCE: S&P Puts 'B+' ICR on CreditWatch Developing ------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its 'B+' issuer credit and 'BB' senior secured ratings on Asset Acceptance Capital Corp. (AACC) on CreditWatch with developing implications. The CreditWatch placement follows AACC's announcement that it has agreed to be acquired by Encore Capital Corp. (unrated) for $350 million to $400 million, depending on the actual closing date. Encore expects to close the acquisition during the second quarter of the year. Encore has stated publicly that it plans to prepay all of AACC's outstanding debt at merger closing. The CreditWatch developing reflects S&P's expectation that the merger will close as anticipated with Encore prepaying AACC's outstanding debt. "If that occurs, we will likely affirm and withdraw our issuer credit and senior secured ratings on AACC at closing," said Standard & Poor's credit analyst Kevin Cole. "If the merger does not close and AACC continues as a stand-alone entity, our ratings on the company will likely remain unchanged. If AACC is acquired and its debt remains outstanding, we would complete a credit assessment of the combined entity's credit profile and determine whether the current issue rating is still appropriate." ATHANASIOS III: Trustee Can't Act on Unsecured Creditors' Behalf ---------------------------------------------------------------- Peggy Hunt, as Chapter 7 trustee of the estate of Athanasios III, LLC, cannot seek relief based on deficient notice to unsecured creditors, nor can she seek relief for alleged due process violations on behalf of creditors of the Athanasios estate, District Judge Dale A. Kimball ruled. Accordingly, the U.S. District Court for the District of Utah denied the resolution sought in the appellate case styled as PEGGY HUNT, Trustee, Apellant, v. MEMORIAL BUILDING, LLC, Appellee, Case No. 2:11CV994 (DAK)(D. Utah). The issue on appeal is whether a bankruptcy court granting automatic stay relief is void as a matter of law because the stay relief was granted on no notice. More specifically, a Sept. 23, 2011 bankruptcy court order denied the Trustee's request to reconsider its ruling granting stay relief in favor of Memorial Building, which allowed Memorial to evict Athanasios from Memorial's property. The Trustee argued that certain creditors of the Debtor's estate did not receive proper notice of the stay motion or the Sept. 23 order. The District Court ruled the Trustee lacks standing to assert the alleged due process violations on behalf of creditors of the Debtor's bankruptcy estate. Even if the Trustee had standing to assert such rights, Judge Kimball affirmed the Bankruptcy Court's Sept. 23 Order Denying Reconsideration because the creditors' due process rights were not violated. A copy of Judge Kimball's March 1, 2013 Memorandum Decision and Order is available http://is.gd/67YHtTfrom Leagle.com. About Athanasios III Athanasios III, LLC, filed a voluntary bankruptcy petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case No. 10-32726) on Sept. 16, 2010. Steven R. Paul, Esq., at Nelson, Snuffer, Dahle & Poulsen, P.C., represented the Debtor. The case was converted into a Chapter 7 proceeding on April 28, 2011, and Peggy Hunt was appointed as Chapter 7 trustee the next day. ATP OIL: $135M Royalty Deals Off-Limits From Creditors, Suits Say ----------------------------------------------------------------- Linda Chiem of BankruptcyLaw360 reported that an investment bank and an energy company slapped ATP Oil & Gas Corp. with two adversary suits Friday accusing it of fraudulently selling $135 million in royalty interests as real property, attempts to prevent the Texas bankruptcy court from taking their interests to pay off ATP's creditors. The report related that a unit of global investment bank Macquarie Group Ltd. and Keba Energy LLC launched two separate suits claiming they were induced into buying $110 million and $25 million, respectively, in overriding oil and gas royalty interests. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. ATP OIL: Court to Convene Mar. 28 Hearing on Gomez Wells' Shut-In ----------------------------------------------------------------- Judge Marvin Isgur has scheduled a March 28 final hearing to consider ATP Oil & Gas Corporation's request to shut-in deepwater leases that involve five offshore blocks in the Mississippi Canyon known as the "Gomez Wells." Pending conclusion of the final hearing, Judge Isgur ruled, the Gomez Wells will not be shut-in unless required on an emergency operational basis. The Debtor previously reasoned that maintaining operations at the Gomez Wells will deplete estate cash and endanger its ability ro reorganize. The Court also ruled that pending the final hearing, $120,215 per day will be accrued in a reserve for the holders of NPI and ORRI (Overriding Royalty Interests) rights. In the event the Debtor is permitted to shut in the Gomez wells, the accrued reserve will be paid in this manner: (1) To the Debtor, to the extent the accrued revenues minus the accrued expenses (the accrued amounts are for the period from March 1, 2013 to the entry of an order on the Gomez Wells) is less than $28,817.20 per day. (2) The balance to the holders of the NPI and ORRI rights. (3) Only the amounts actually payable to the holders of NPI and ORRI rights under the Court Order will be required to be paid as a current obligation of the Estate for the period of production from March 1, 2013, through entry of an order authorizing the shut-in of the Gomez Wells. If the Debtor is not authorized to shut in the Gomez Wells, the reserve will be applied to the amounts otherwise due to the holders of NPI and ORRI rights. As previously reported on the March 1, 2013 edition of the Troubled Company Reporter, the Debtor's unsecured creditors support a shut-in of the Gomez Wells while some parties -- NGP Capital Resource Company, HBK Main Street Investments, L.P.. Sankaty ATP LLC, Sankaty Credit Opportunites IV, L.P., Sankaty Managed Account, L.P., Diamond Offshore Company, Greystar Corporation and Gomez Hub Pipeline Partners, LP -- have either expressed opposition to the shut-in request or concern of the original set court hearing. Since then, more parties have asserted their rights to oppose the shut-in request. They include Anadarko E&P Onshore LLC; ATP Infrastructure Partners, L.P.; Macquarie Investments LLC; Macquarie Americas Corporation; Keba Energy LLC; and Expeditors and Production Services, Inc. Among other things, these parties asserted that they should be given sufficient time to object in the matter and that the Debtor has not justified the request for a shut-in. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. ATP OIL: Gets Final Order on Securities Trading Limitations ----------------------------------------------------------- ATP Oil & Gas Corporation obtained a final order from a Texas bankruptcy court for the establishment of uniform procedures for transfers of equity securities. The procedures are designed to protect the Debtor's valuable tax attributes. Judge Marvin Isgur ruled that among other things, any entity who is currently or becomes a "Substantial Shareholder" must report to, or notify, the Court of its ownership, or intended transfer, of ATP equity securities. The Debtor will have 10 days from the receipt of such notice to serve an objection. A Substantial Shareholder refers to one who has beneficial ownership of (i) ATP common stock of at least 2,495,000 shares, (ii) ATP series A preferred stock totaling 35,285 shares, or (iii) ATP series B preferred stock totaling 75,971 shares. T. Paul Bulmahn and Taylor International Fund, Ltd. are identified Substantial Shareholders of the Debtor at the present time. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. AVANTAIR INC: Issues $1.3 Million Additional Convertible Notes -------------------------------------------------------------- Avantair, Inc., previously entered into a Note and Warrant Purchase Agreement providing for the issuance of an aggregate of up to $10 million in principal amount of senior secured convertible promissory notes and warrants to purchase up to an aggregate of 40,000,000 shares of common stock at an initial and additional closings. At the initial closing, which occurred on Nov. 30, 2012, the Company issued to certain members of the Board of Directors and their affiliates Notes in an aggregate principal amount of $2.8 million and Warrants to purchase an aggregate of 11,200,000 shares. Furthermore, on Feb. 1, 2013, the Company issued to nine accredited investors Notes in an aggregate principal amount of $637,500 and Warrants to purchase an aggregate of 2,550,000 shares. At an additional closing on Feb. 28, 2013, the Company issued to two accredited investors Notes in an aggregate principal amount of $1,350,000 and Warrants to purchase an aggregate of 5,400,000 shares of common stock. The Notes bear interest at an initial rate of 2.0% per annum, which will increase to 12.0% per annum if the Company is unsuccessful in obtaining stockholder approval by March 31, 2013, to increase the Company's authorized shares of common stock so that a sufficient number of shares are reserved for the conversion of the Notes. The Warrants are exercisable at an exercise price of $0.50 per share, which exercise price is subject to certain anti-dilution protections, but the Warrants may not be exercised unless a sufficient number of authorized shares of common stock are available for the exercise of the Warrants. The Warrants expire on Nov. 30, 2017. The Company entered into a Security Agreement dated Nov. 30, 2012, to secure its senior secured convertible promissory notes issued in the Financing. The Notes issued on Feb. 1, 2013, will be secured under the Security Agreement by a first priority security interest in substantially all of the assets of the Company that are not otherwise encumbered and excluding all aircraft, fractional ownership interests in aircraft, restricted cash, deposits on aircraft and flight hour cards. As previously reported, the Company also entered into a Registration Rights Agreement dated Nov. 30, 2012, pursuant to which the Company has agreed to register under the Securities Act of 1933, as amended, the shares of common stock issuable upon conversion of the Notes. About Avantair Inc. Headquartered in Clearwater, Fla., Avantair, Inc. (OTC BB: AAIR) -- http://www.avantair.com/-- sells fractional ownership interests in, and flight hour card usage of, professionally piloted aircraft for personal and business use, and the management of its aircraft fleet. According to AvData, Avantair is the fifth largest company in the North American fractional aircraft industry. Avantair also operates fixed flight based operations (FBO) in Camarillo, California and in Caldwell, New Jersey. Through these FBOs and its headquarters in Clearwater, Florida, Avantair provides aircraft maintenance, concierge and other services to its customers as well as to the Avantair fleet. The Company's balance sheet at Dec. 31, 2012, showed $81.56 million in total assets, $120.25 million in total liabilities, $14.84 million in series a convertible preferred stock, and a $53.53 million total stockholders' deficit. AVON PRODUCTS: Fitch Rates $1.5 Billion Sr. Unsecured Notes 'BB+' ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB+ ' rating to Avon Products, Inc.'s $1.5 billion senior unsecured notes issuance with the following tranches: -- $250 million due in 2016; -- $500 million due in 2020; -- $500 million due in 2023; -- $250 million due in 2043. The Rating Outlook is Stable. Avon intends to use the net proceeds, together with cash on hand, to refinance upcoming maturities and for general corporate purposes. Today's action is in alignment with management's goal of addressing the company's capital structure. The new notes contain a Change of Control Repurchase Event provision and interest step-up language. Upon the occurrence of both a Change of Control and rating downgrades below investment grade by two of the three rating agencies, unless Avon exercises its right to redeem the notes, the company will be required to make an offer to purchase the notes at a price equal to 101% of the aggregate principal amount plus accrued and unpaid interest. The note indenture contains limitations on liens and sale- leasebacks but does not contain financial covenants. Interest could be increased by a maximum of 200 basis points in addition to the stated rate at issuance based on the company's ratings. Fitch notes that Avon's $550 million three-year term loan requires that if the company raises at least $500 million in new debt, 50% of the net proceeds must be applied towards this facility. With $1.5 billion in gross proceeds Avon should be able to refinance the $600 million in privately placed notes including the $65 million make-whole and the $125 million 4.625% note due May 13, 2013 while still applying at least $500 million in required net issuance proceeds to its $550 million term loan due in 2015. KEY RATING DRIVERS: Avon's ratings are based on the continued decline in U.S. revenues, lack of sustainable operating income growth in key international markets, and weakened credit protection measures. Liquidity is likely to be lower versus historical levels as the company uses part of its cash to invest in restructuring, representative incentives, and other efforts to stabilize the business. Fitch recognizes that while there were some early signs of stabilization in Avon's Latin American and European segments which generate almost 90% of operating earnings before corporate overhead, it is too early to ascertain its sustainability. The emerging markets have proven to be a strong base of operations for the direct-selling distribution model; however, the level of competition has increased with marketers such as L'Oreal S.A. accelerating their investments in the region. Both Natura Cosmeticos S.A. and Avon have commented about the high level of competition in Brazil in the past several years. Given the increased presence of large multinational beauty care companies and further maturation of the emerging markets, Fitch believes that Avon is likely to find it more difficult to return to sustainable growth and that longer-term operating margin expansion may be limited. The Stable Outlook is due to Avon's adequate liquidity and execution of its plan to address its capital structure, which should allow management more time to execute its strategic goals. Fitch is encouraged by a number of the company's recent announcements or results. First, Avon cut its dividend by almost 75%, a deeper level than Fitch expected. While 2012's free cash flow (FCF) remained negative at $2 million, reducing the dividend outlay by $300 million should result in positive FCF in 2013 even if the company's financial performance were to remain flat. Nonetheless, FCF is benefitting from the dividend cut and working capital improvements, while cash flow from operations continued a four-year decline from $782 million to $556 million at the end of 2012. Second, the company was able to reduce debt by more than $110 million year over year given $337 million of FCF in the fourth quarter. Financial Performance: Consolidated revenues were essentially flat at $10.7 billion excluding a 5% drag from negative foreign exchange. Sales in Latin America increased 5% on a constant currency basis while sales in North America, Asia Pacific, and EMEA (Europe, Middle East, and Africa) declined 8%, 5%, and 1%, respectively. Consolidated adjusted EBIT margins (excluding impairments and restructuring charges) increased almost sequentially during the year from 3.8% to 9.2%. After years of leverage creep to a peak of approximately 3.5x in mid-2012, Avon's leverage tracked down modestly to 3.2x. Liquidity and Financial Flexibility: Avon announced that it has notified the holders of its $535 million privately placed notes that it will redeem those notes and make a required make-whole premium of approximately $65 million by the end of March 2013. The company cited that it is able to fund the redemption from cash on hand overseas. The company is also renegotiating its $1 billion revolving credit which is scheduled to mature in November 2013. Fitch expects that the company will be able to secure a new credit agreement. As mentioned previously, Avon has $125 million 4.625% notes due May 13, 2013. The company also has a 5.75%, $500 million notes due March 1, 2014. The $550 million term loan amortizes by $138 million in 2014. RATINGS SENSITIVITIES: Positive: Future developments that may, individually or collectively, lead to a positive rating action include: Although a positive rating action is not likely in the next 18 months, leverage in the low- to mid-2x range due to a restoration of consistent growth in Avon's major markets, a meaningful increase in operating earnings and cash flow, or greater than expected debt reduction, could lead to consideration of an upgrade. Generating FCF in excess of $200 million annually would also be viewed positively. Negative: Future developments that may, individually or collectively, lead to a negative rating action: Leverage maintained over 3x and diminishing FCF due to further deterioration of its base business, indicated by declining sales and margins in key geographical segments, or increased debt levels could result in a downgrade. Declining volumes and sales representative count in the key market of Latin America and Europe would also be viewed negatively. BERNARD L. MADOFF: Settlement Lets Merkin Use Part of $410MM ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that New York Attorney General Eric Schneiderman admits that part of a $410 million settlement with J. Ezra Merkin won't go immediately to victims of the Bernard Madoff Ponzi scheme. According to the report, although Mr. Schneiderman disclosed more about the settlement, the agreement itself remains a secret and the state attorney general won't say how much Mr. Merkin can use to fend off lawsuits brought by Irving Picard, the trustee for Bernard L. Madoff Investment Securities LLC. The report relates that Mr. Schneiderman filed more papers last week in opposition to Mr. Picard's efforts to halt the settlement. Mr. Picard contends that whatever Mr. Merkin can pay in settlement should all go to Madoff customers, not partly to investors in Mr. Merkin's own feeder funds. The dispute will be resolved by U.S. District Judge Jed Rakoff after a March 12 hearing. The report recounts that Mr. Schneiderman said in a previous court filing that "some of the money will be utilized to defend against or settle claims by the trustee against the funds and Merkin." In his new filing on March 5, Mr. Schneiderman said that "not one penny will revert to Merkin." In the new filing, Mr. Schneiderman said that an unspecified amount of the $410 million "has been set aside to fund and settle certain remaining or potential lawsuits." The attorney general said that Mr. Picard's case against Mr. Merkin is "the only significant" suit not already settled. In his new filing, Mr. Schneiderman doesn't say, as he did before, whether Mr. Merkin can use some of the $410 million to defend against Mr. Picard's suit on behalf of all Madoff customers. To the extent the reserve isn't used up, the attorney general said it will be distributed to investors in the Merkin funds. Mr. Schneiderman, the report relates, disclosed more about the settlement, although he didn't make the agreement itself public. He said that the $410 million represents $200 million in cash, with 95% derived from the sale of art. The other $210 million is from Mr. Merkin's investments in his feeder funds. Mr. Picard previously claimed that the settlement allows Mr. Merkin to transfer assets so they can't be reached by creditors. Mr. Schneiderman has explained in court papers that Mr. Merkin will transfer "certain illiquid assets" to his wife "in exchange for her transferring to him cash of equivalent value." Mr. Merkin ran feeder funds where he collected money from investors and turned the funds over to Madoff. When first announcing the settlement in June, Mr. Schneiderman said Mr. Merkin received "hundreds of millions dollars in management fees" in return for feeding Madoff new investors. When the settlement was first announced, Mr. Schneiderman said "most" of the $410 million will go to investors in Mr. Merkin's feeder funds. Mr. Picard and the Securities Investor Protection Corp. both believe the settlement agreement should be made public, they previously said in e-mailed statements. The dispute is now in Judge Rakoff's court after Mr. Picard sued last year in bankruptcy court following Mr. Schneiderman's announcement of the settlement. Mr. Picard contends he's entitled to first recoveries from Mr. Merkin and his funds because the money to be paid in the settlement was all stolen from Madoff customers. Mr. Picard says his recoveries will go to all Madoff victims, not just those injured by Mr. Merkin. Judge Rakoff took the suit out of bankruptcy court. Mr. Schneiderman has been telling Judge Rakoff that a bankruptcy trustee like Mr. Picard has no power to stop a state attorney general from enforcing police and regulatory powers. The lawyer for longtime Madoff employee Daniel Bonventre was in the U.S. Court of Appeals March 7 asking the panel of three judges to lift a freeze on his assets so he can pay the cost of defending against a 22-count indictment. The government contends his assets were all stolen from customers and can't be used. The dispute with Mr. Schneiderman in district Court is Picard v. Schneiderman, 12-cv-06733, U.S. District Court, Southern District New York (Manhattan). The lawsuit with Mr. Schneiderman in bankruptcy court is Picard v. Schneiderman, 12-01778, U.S. Bankruptcy Court, Southern District of New York (Manhattan). About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). BERNARD L. MADOFF: Picard Loses Intervention Bid in Fairfield Row ----------------------------------------------------------------- Sindhu Sundar of BankruptcyLaw360 reported that Madoff trustee Irving Picard on Friday lost his bid to intervene in a class action by institutional investors accusing Fairfield Greenwich Group and others of funneling investor funds into Bernard Madoff's Ponzi scheme when a New York federal judge ruled he is already opposing their $80 million settlement in a separate motion. The report related that U.S. District Judge Victor Marrero denied Mr. Picard's bid to intervene in the current action to participate in an upcoming hearing to argue against the settlement proposed in November. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). BERNARD L. MADOFF: Exec Claims Prosecutors Gutted Legal Fund ------------------------------------------------------------ Richard Vanderford of BankruptcyLaw360 reported that a sudden asset seizure by prosecutors has improperly wiped out a criminal defense fund for Daniel Bonventre, a former executive at Bernard Madoff's firm, his lawyer told the Second Circuit on Thursday. The report related that Mr. Bonventre, the director of operations at Bernard L. Madoff Investment Securities LLC, claims prosecutors began using civil proceedings to seize his assets after he refused to plead guilty and cooperate with the government. The seizure came about 10 months after charges were filed, the BLaw360 report added. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). BIOVEST INT'L: Returns to Chapter 11 with Another Debt-Swap Plan ---------------------------------------------------------------- Biovest International Inc., developer of what would be the first vaccine to treat lymphoma, filed a petition for Chapter 11 reorganization (Bankr. M.D. Fla. Case No. 13-02892) on March 6 in Tampa, Florida. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Biovest and majority owner Accentia Biopharmaceuticals Inc. (Case No. 08-17795) emerged from bankruptcy reorganization in November 2010 with a plan to pay creditors in full through distributions of new stock. According to the report, the new bankruptcy was accompanied by a proposed reorganization plan supported by secured lenders owed about $38.5 million. Total debt is $44.9 million, with assets listed in a court filing as being valued at $4.7 million. About $5.4 million is owing to unsecured creditors, according to a court paper. The plan calls for secured lenders Corp Real LLC and Laurus/Valens Funds to swap about $44 million in debt for 90% of the new stock. The lenders will also provide $5.6 million in new funds to support the bankruptcy. The new money is to be included in the debt swap. The plan provides for paying unsecured creditors in full with some of the new stock. The percentage of stock going to unsecured creditors isn't yet specified. Biovest said it intends to exit bankruptcy by mid-2013. The company is developing BiovaxID, a personalized cancer vaccine for some types of non-Hodgin's lymphoma. Sales for the fiscal year ended in September totaled $3.9 million, resulting in an $11.8 million operating loss. The secured debt is in default. The Company, which develops therapeutic cancer vaccines in the United States, is represented by Charles A. Postler of Stichter, Riedel, Blain & Prosser, the report related. BONDS.COM GROUP: Sells 20 Units to Trimarc for $2 Million --------------------------------------------------------- Bonds.com Group, Inc., entered into a Unit Purchase Agreement with Trimarc Capital Fund, L.P., pursuant to which, among other things, the Company sold to Trimarc 20 units for an aggregate purchase price of $2,000,000, with each unit consisting of (a) warrants to purchase 1,428,571.429 shares of the Company's Common Stock, par value $0.0001 per share, at an initial exercise price of $0.07 per share, and (b) 100 shares of the Company's Series E-2 Convertible Preferred Stock, par value $0.0001 per share. The shares of Series E-2 Preferred included in the Units issued pursuant to the Unit Purchase Agreement have an initial conversion price of $0.07 per share and are initially convertible for an aggregate of approximately 28,571,429 shares of the Company's Common Stock, and the Common Stock Warrants included in the Units issued pursuant to the Unit Purchase Agreement are initially exercisable for an aggregate of approximately 28,571,429 shares of the Company's Common Stock. In connection with and as a condition to the transactions contemplated by the Unit Purchase Agreement, on Feb. 28, 2013, the Company, Trimarc, Daher Bonds Investment Company, Mida Holdings, Oak Investment Partners XII, Limited Partnership, and GFINet Inc. entered into an Amended and Restated Series E Stockholders' Agreement. The A&R Series E Stockholders' Agreement amends and restates the Series E Stockholders' Agreement dated as of Dec. 5, 2011. The A&R Series E Stockholders' Agreement amends the Series E Stockholders' Agreement to provide, among other things that, so long as Trimarc continues to own at least 25% of the shares of Series E-2 Preferred acquired by it pursuant to the February 2013 Transaction, or 25% of the Common Stock issued upon the conversion thereof, (i) the Company is required to nominate and use its reasonable best efforts to cause to be elected and cause to remain a director on the Board, and (ii) each party to the Series E Stockholders' Agreement is required to vote all shares of voting capital stock of the Company owned by it, so as to elect, and not to vote to remove, one person designated by Trimarc. On Feb. 28, 2013, the Company, DBIC, Mida, Oak and GFI entered into the Amendment No. 1 to Second Amended and Restated Registration Rights Agreement, which amends the Second Amended and Restated Registration Rights Agreement dated as of Dec. 5, 2011. The Registration Rights Amendment clarifies that the Series E-2 Preferred and the Common Stock Warrants issued in connection with the February 2013 Transaction are securities covered under the terms of the Registration Rights Agreement and the registration rights. Additionally, on Feb. 28, 2013, Trimarc joined as a party to the Registration Rights Agreement, as amended by the Registration Rights Amendment. Trimarc Manager Elected to Board The Board expanded the size of the Board and elected Michael Trica as director to fill the vacancy created by that expansion. Mr. Trica was designated by Trimarc and elected to the Board pursuant to the A&R Series E Stockholders' Agreement. Michael Trica has served as portfolio manager of Trimarc since April 2006. He also is a Director of Oakum Bay Capital, LLC, investment advisor to Trimarc. From July 2008 to December 2011, Mr. Trica served as a portfolio manager for KVO Capital Management, LLC. Prior to founding Trimarc, Mr. Trica managed private portfolios from 1997 to 2006. Mr. Trica received a BS in Finance from the Wharton School at the University of Pennsylvania. Additionally, on Feb. 28, 2013, the Company entered into an Indemnification Agreement with Michael Trica. The Indemnification Agreement expands upon and clarifies certain procedural and other matters with respect to the rights to indemnification and advancement of expenses provided to directors of the Company pursuant to applicable Delaware law and the Company's bylaws. The Indemnification Agreement is consistent with similar agreements entered into with other directors of the Company. About Bonds.com Group Based in Boca Raton, Florida, Bonds.com Group, Inc. (OTC BB: BDCG) -- http://www.bonds.com/-- through its subsidiary Bonds.com, Inc., serves institutional fixed income investors by providing a comprehensive zero subscription fee online trading platform. The Company designed the BondStation and BondStationPro platforms to provide liquidity and competitive pricing to the fragmented Over- The-Counter Fixed Income marketplace. The Company differentiates itself by offering through Bonds.com, Inc., an inventory of more than 35,000 fixed income securities from more than 175 competing sources. Asset classes currently offered on BondStation and BondStationPro, the Company's fixed income trading platforms, include municipal bonds, corporate bonds, agency bonds, certificates of deposit, emerging market debt, structured products and U.S. Treasuries. The Company reported a net loss of $14.45 million in 2011, compared with a net loss of $12.51 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $9.45 million in total assets, $11.12 million in total liabilities and a $1.67 million total stockholders' deficit. Daszkal Bolton LLP, in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2011, citing recurring losses and negative cash flows from operations that raise substantial doubt about the Company's ability to continue as a going concern. BOWLES SUB: Wells Fargo Has Plan Objections; Hearing March 22 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Minnesota will convene a hearing March 22, 2013, at 9 a.m., to consider the confirmation of Fenton Sub Parcel A, LLC, and Bowles Sub Parcel A, LLC's Chapter 11 Plan. The hearing was previously scheduled for Feb. 13 but was deferred to March. The plan is facing an objection by Wells Fargo Bank, N.A., as trustee for the Registered Holders of J.P. Morgan Chase Commercial Mortgage Securities Corp., Commercial Mortgage Pass-Through Certificates, Series 2004-LN2, by and through CWCapital Asset Management LLC, solely in its capacity as special servicer. Wells Fargo opposes confirmation of the Joint Plan of Reorganization dated July 31, 2012 on these grounds: 1. The Plan is not fair and equitable because the proposed interest rate does not meet the legal standard; 2. The Debtors contend that the Plan is a 100% plan, however, a close reading of the Plan leads to a different conclusion -- the Plan states that it will pay unsecured creditors "up to" full allowed amount of their claim; and 3. The Plan is not fair and equitable because it modifies key loan provisions. The Plan As reported in the TCR on Oct. 11, 2012, the Joint Chapter 11 Plan filed by the Debtors anticipates that all property of the estate will be vested in the Reorganized Debtors. Wells Fargo Bank, N.A., a trustee for holders of $8.86 million in mortgage debt, will be paid in full from the income generated by the operation of the "Pool A Properties" or from the proceeds of the sale of the properties. Steven B. Hoyt's loan to the properties will be treated as an unsecured claim. Holders of unsecured claims totaling $814,000 will receive up to 100% of their claims, with interest, from distributions from excess cash generated by postpetition operations and from the sale(s) or refinancing and operations after the Lender is paid in full. The owners will retain their equity interests. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Bowles_Sub_DS_092812.pdf About StoneArch II/WCSE Entities StoneArch II/WCSE Minneapolis Industrial LLC in 2007 acquired various limited liability companies, which in turn owned 27 industrial multi-tenant properties located in Minneapolis/St. Paul in Minnesota. The properties were divided into four separate pools: A, B, C, and D. Fenton Sub Parcel D LLC and Bowles Sub Parcel D LLC, which jointly own the properties in pool D, sought Chapter 11 protection (Bankr. D. Minn. Case Nos. 11-44430 and 11-44434) on June 29, 2011. A Chapter 11 plan has been filed for the pool D debtors. The plan, if approved, would allow the existing owners to maintain operation of the properties. Bowles Sub Parcel A, LLC, and five other entities, which jointly own parcels A, B and C, filed for Chapter 11 protection (Bankr. D. Minn. Case Nos. 12-42765, 12-42768, 12-42769, 12-42770, 12-42772, and 12-42774) on May 8, 2012. Each of the May 8 Debtors estimated $10 million to $50 million in assets. Bowles Sub A disclosed $11,442,268 in assets and $9,716,342 in liabilities as of the Chapter 11 filing. The other May 8 debtors are Fenton Sub Parcel A, LLC, Bowles Sub Parcel B, LLC, Fenton Sub Parcel B, LLC, Bowles Sub Parcel C, LLC, and Fenton Sub Parcel C, LLC. Judge Kathleen H. Sanberg currently oversees the May 8 Debtors' cases. The May 8 Debtors tapped Lapp Libra Thomson Stoebner & Pusch as counsel. Steven B. Hoyt, as chief manager, signed the Chapter 11 petitions. BRIER CREEK: Hires Grant Thornton as Accountants ------------------------------------------------ Brier Creek Corporate Center Associates Limited, et al., ask the U.S. Bankruptcy Court for permission to employ Grant Thornton, LLP as accountants. The firm has agreed to provide various services, including: a. to prepare tax returns and financial statements as requested by Bankruptcy Counsel; b. to provide audit services for the Debtor; and, C. to perform such other accounting and consulting services as may be requested by Bankuptcy Counsel from time to time and in the interest of the Debtor. Grant Thornton will be paid on an hourly basis, in addition to reimbursement of actual and necessary expenses. The firm's hourly rates are: Professional Rates ------------ ----- Associate $151 Senior Associate $190 Manager $248 Senior Manager $281 Partner $380 A. Randolph Smith, II, tax partner at Grant Thornton, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Brier Creek Corporate Brier Creek Corporate Center Associates Limited and eight other related entities affiliates filed for Chapter 11 protection (Bankr. E.D.N.C. Lead Case No. 12-01855) on March 9, 2012. The Debtors own real property located in Wake County, North Carolina and Mecklenburg County, North Carolina. In most instances, the real property owned by the Debtors consists of land upon which is constructed commercial or industrial buildings consisting of office, service or retail space. The other debtors are Brier Creek Office #4, LLC; Brier Creek Office #6, LLC; Service Retail at Brier Creek, LLC; Service Retail at Whitehall II Limited Partnership; Shopton Ridge 30-C, LLC; Whitehall Corporate Center #4, LLC; Whitehall Corporate Center #5, LLC; and Whitehall Corporate Center #6, LLC. Brier Creek is a 106-acre development that is to have 2.8 million square feet of commercial space. Whitehall has 146 acres and will have 4 million square feet on completion. Brier Creek Corporate scheduled assets of $19,713,147 and liabilities of $18,086,183. Judge Stephani W. Humrickhouse oversees the case. Northen Blue, LLP, serves as counsel to the Debtors. C. Richard Rayburn, Jr. and the firm Rayburn Cooper & Durham, P.A., serve as special counsel. Grant Thornton LLP is the accountant. Bidencope & Associates was hired as appraiser. The petitions were signed by Terry Bradshaw, vice president. Brier Creek's other affiliated entities are Cary Creek Limited Partnership; Shopton Ridge Business Park Limited Partnership; AAC Retail Property Development and Acquisition Fund, LLC; American Asset Corporation Companies Limited; and American Asset Corporation. Cary Creek Limited Partnership filed a voluntary petition on Jan. 3, 2013. By order entered Jan. 10, 2013, the bankruptcy case of Cary Creek Limited Partnership was consolidated with the other debtors' cases and all of the cases are now being jointly administered for procedural purposes only. BRITISH AMERICAN: U.S. Court to Hear Suit Against Ex-Directors -------------------------------------------------------------- Bankruptcy Judge Erik P. Kimball tossed out the request of Lawrence Duprey and Vishnu Ramlogan to dismiss Count I of the adversary complaint filed against them by British American Insurance Company Limited, a Chapter 15 debtor. The Court also rejected the Defendants' request for the Court to abstain from adjudicating Count I. In Count I, British American Insurance Company Limited seeks damages for breach of fiduciary duty against its former directors, including the Defendants. The Defendants argue that the claim presented in Count I is a tort claim constituting intangible property located outside the United States and that the Bankruptcy Court is without jurisdiction to entertain such a claim in light of the provisions of 11 U.S.C. Sec. 1521(a)(5). The Defendants argue that the Court also lacks subject matter jurisdiction as Mr. Brian Glasgow, the foreign representative of BAICO in the nonmain chapter 15 case, lacks standing to pursue Count I because he represents only a branch of BAICO in Saint Vincent and the Grenadines and not the entire entity. The Defendants argue that permitting Mr. Glasgow to bring Count I under United States bankruptcy jurisdiction would have unintended and unwelcome consequences. In the alternative, the Defendants argue that the Court should abstain from adjudicating Count I under the permissive abstention provisions of 28 U.S.C. Sec. 1334(c)(1). Judge Kimball, however, held that: -- there is "related to" jurisdiction over Count I of the complaint under 28 U.S.C. Sec. 1334(b); -- 11 U.S.C. Sec. 1521(a)(5) does not present a limitation on the Court's subject matter jurisdiction; -- 11 U.S.C. Sec. 1521(a)(5) limits the Court's in rem jurisdiction but such jurisdiction is not implicated in Count I; and -- 28 U.S.C. Sec. 1334(c)(1) does not permit the Court to abstain from hearing Count I on a permissive basis. The lawsuit is styled as, BRITISH AMERICAN INSURANCE COMPANY LIMITED, Plaintiff, v. ROBERT FULLERTON, BRIAN BRANKER, RAMCHAND RAMNARINE, LAWRENCE DUPREY, VISHNU RAMLOGAN, SHIVA RAMBERRAN, GREEN ISLAND HOLDINGS, LLC, and CHARLES PRATT, Defendants, Adv. Proc. No. 11-03118 (Bankr. S.D. Fla.). A copy of the Court's Feb. 28, 2013 Memorandum Opinion is available at http://is.gd/d9Bu30from Leagle.com. About BAICO British American Insurance Company is a Nassau, Bahamas-based insurance and financial services company. BAIC is owned by Trinidad-based parent CL Financial. BAIC listed debt of $500 million to $1 billion and assets of more than $100 million in its Chapter 15 petition (Bankr. S.D. Fla. Case No. 09-3588). By order entered Aug. 4, 2009, the Eastern Caribbean Supreme Court in the High Court of Justice Saint Vincent and the Grenadines appointed Brian Glasgow as Judicial Manager for BAICO under Section 52 of the Insurance Act, No. 45 of 2003 of the Laws of Saint Vincent and the Grenadines. BUSINESS DEVELOPMENT: Sec. 341 Meeting Slated for March 20 ---------------------------------------------------------- The U.S. Trustee will convene a meeting of creditors pursuant to 11 U.S.C. 341(a) in the Chapter 11 case of Business Development and Management Inc., on March 20, 2013, at 12:30 p.m. The meeting will be held at U.S. Federal Bldg., 280 S. First St. #268, San Jose, California. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the Company's financial affairs and operations that would be of interest to the general body of creditors. According to the notice of bankruptcy filing, creditors are required to submit proofs of claim by June 18, 2013. The deadline to file a complaint to determine dischargeability of certain debts is May 20, 2013. Business Development and Management Inc., filed a bare-bones Chapter 11 petition (Bankr. N.D. Cal. Case No. 13-50418) in San Jose, California on Jan. 25, 2013. Santa Clara, California-based Business Development estimated assets of at least $10 million and liabilities not exceeding $10 million. The Debtor is represented by The Law Office of Linda Voss, in San Mateo, California. CAELUS RE 2013: S&P Assigns 'BB-' Rating to Issued Notes -------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned its 'BB-(sf)' rating to the notes issued by Caelus Re 2013 Ltd. (Caelus Re). The notes cover losses from hurricanes, earthquakes, and ensuing damage caused by related earth shake, fire following, and sprinkler leakage on a per-occurrence basis. The rating is based on the lower of the rating on the catastrophe risk ('BB-'), the rating on the assets in the collateral account ('AAAm'), and the rating on Nationwide Mutual Insurance Co. (A+/Stable/--). At closing, the notes will cover a 90% share of losses between the initial attachment point of $1.90 billion and the initial exhaustion point of $2.20 billion. The loss amount will be based on the paid losses and loss reserves of Nationwide, as adjusted by the related adjustment factors as applicable. S&P expects Nationwide to retain at least a 10% share of the ultimate net loss from an event. This is the third catastrophe bond sponsored by Nationwide. RATINGS LIST New Rating Caelus Re 2013 Ltd. Notes BB-(sf) CARL'S PATIO: Sale to Insiders Quickly Approved ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Carl's Patio Inc. received approval from the bankruptcy court in Delaware on March 5 to sell the business for $4.15 million to two former insiders affiliated with Weinberg Capital Group from Cleveland. The creditors' committee objected to the sale, contending it was being held too quickly. About Carl's Patio Founded in 1993, Carl's Patio sells upscale outdoor furniture and accessories in 10 retail locations in South Florida. The company leases all its locations and does not own any real property. Carl's Patio, Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. 13-10102) on Jan. 21, 2013, and immediately conveyed plans to sell the business to Weinberg Capital, absent higher and better offers. Carl's Patio estimated total assets and total debts of $10 million to $50 million. The Debtor owes $2.19 million on a secured revolver, and $3.01 million on a term loan from Fifth Third. The Debtor also has $600,000 of subordinated debt. Secured lender Fifth Third Bank, owed $5.25 million, has provided financing for the bankruptcy. CARL'S PATIO: BGA Management Approved as Financial Advisor ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Carl's Patio, Inc., et al., to employ BGA Management, LLC, doing business as Alliance Management, as financial advisor. Prepetition, Alliance assisted the Debtors with preparation of a confidential information memorandum for delivery to potential purchasers, contacted potential interested bidders and provided due diligence support for interested parties. During the pendency of the Chapter 11 cases, Alliance has agreed to, among other things, continue to asses and evaluate the Debtors' financial condition, and assist with the sale and liquidation of the assets. Alliance will bill its time for services rendered at these hourly rates: Professionals Rate ------------- ---- Michael Knight $450 Alex G. Smith, Chris Tomas, and James Cullen $375 Brock Kline and Justin Pugh $275 Deb Cramer $175 In addition to the fees, Alliance will be reimbursed for all reasonable business and travel expenses including charges for telephone, postage, fax and copying associated with Alliance's work. The Debtors paid Alliance a $25,000 prepetition retainer, which it applied to its fees and expenses in the ordinary course of business. About Carl's Patio Founded in 1993, Carl's Patio claims to be a leading retailer of upscale outdoor furniture and accessories. The company operates 10 retail locations and a warehouse in South Florida. The company has 68 employees. The company leases all its locations and do not own any real property. Carl's Patio, Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. 13-10102) on Jan. 21, 2013, and immediately conveyed plans to sell the business to Weinberg Capital, absent higher and better offers. Bayard, P.A., represents the Debtor in its restructuring efforts. BGA Management, LLC, doing business as Alliance Management, serves as financial advisor, and Epiq Bankruptcy Solutions LLC serves as claims and noticing agent. Carl's Patio estimated total assets and total debts of $10 million to $50 million. The Debtor owes $2.19 million on a secured revolver, and $3.01 million on a term loan from Fifth Third. The Debtor also has $600,000 of subordinated debt. CASH STORE: Coliseum Capital Holds 16% Equity Stake at Dec. 31 -------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, Coliseum Capital Management, LLC, and its affiliates disclosed that, as of Dec. 31, 2012, they beneficially own 2,804,578 common shares of The Cash Store Financial Services Inc. representing 16% of the shares outstanding. A copy of the filing is available for free at http://is.gd/bZ7npt About Cash Store Financial Cash Store Financial is the only lender and broker of short-term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store Financial operates 512 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 25 branches in the United Kingdom. Cash Store Financial is a Canadian corporation that is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States. The Company's balance sheet at Dec. 31, 2012, showed C$207.69 million in total assets, C$169.93 million in total liabilities and C$37.76 million in shareholders' equity. * * * As reported in the Feb. 8, 2013 edition of the TCR, Standard & Poor's Ratings Services lowered its issuer credit rating on Cash Store Financial (CSF) to 'CCC+' from 'B-'. The outlook is negative. "The downgrades follow a proposal by the payday loan registrar in Ontario to revoke CSF's payday lending licenses and CSF's announcement that it has discontinued its payday loan product in the region," said Standard & Poor's credit analyst Igor Koyfman. The company's businesses in Ontario, which account for approximately one-third of its store count, will begin offering a new line of credit product to its customers. S&P believes this is to offset the loss of its payday lending product; however, this is a relatively new product, and S&P believes that it will be challenging for the company to replace its lost earnings from the payday loan product. S&P also believe that the registrar's proposal could lead to similar actions in other territories. CATALYST PAPER: Incurs $35.2 Million Net Loss in Fourth Quarter --------------------------------------------------------------- Catalyst Paper said results in the fourth quarter were negatively impacted by lower sales volumes, higher maintenance spending and a stronger Canadian dollar. The company posted a net loss of $35.2 million for the quarter ended Dec. 31, 2012, in contrast to net earnings of $655.7 million in the third quarter, when the one-time gains realized on emergence from creditor protection were booked. The results in the fourth quarter were negatively impacted by lower sales volumes, higher maintenance spending and a stronger Canadian dollar. "We saw lower prices for coated and newsprint and weaker demand across our paper product lines in 2012. However, capacity reductions helped mitigate the demand impacts," said Catalyst President and CEO Kevin J. Clarke. "Pulp prices took a hit as markets weakened in China due to overstocked inventories. These sorts of challenges aren't going away, but with a better cost structure across all product segments, and continued market share momentum, we're better positioned to take them on." Net earnings of $583.2 million for 2012 were heavily impacted by one-time non-cash restructuring credits and fair value accounting adjustments. This compared with a $974.0 million net loss in 2011 which was driven largely by asset impairment charges. Catalyst entered creditor protection on Jan. 31, 2012, and exited on September 13, having achieved a US$390.4 million or 60% reduction in its debt, savings in annual interest expense of US$33.9 million, and a range of other cost reductions. The restructuring included the permanent closure of its Snowflake mill at the end of the third quarter. Results from this discontinued operation are excluded from those being reported, with comparative periods having been restated accordingly. Total liquidity stood at $97.9 million at the end of 2012, compared to $96.7 million a year earlier. Catalyst issued 14,400,000 new common shares to holders of its now-cancelled 2016 Notes upon its exit from creditor protection in September. A further 127,571 common shares were issued in December to unsecured creditors who elected this option in lieu of participating in the proceeds pool from specified asset sales. On Jan. 7, 2013, Catalyst's new common shares were listed on the Toronto Stock Exchange under the symbol "CYT". A copy of the press release is available for free at: http://is.gd/x5r5ER About Catalyst Paper Catalyst Paper Corp. -- http://www.catalystpaper.com/-- manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With four mills, located in British Columbia and Arizona, Catalyst has a combined annual production capacity of 1.9 million tons. The Company is headquartered in Richmond, British Columbia, Canada and its common shares trade on the Toronto Stock Exchange under the symbol CTL. Catalyst on Dec. 15, 2011, deferred a US$21 million interest payment on its outstanding 11.00% Senior Secured Notes due 2016 and Class B 11.00% Senior Secured Notes due 2016 due on Dec. 15, 2011. Catalyst said it was reviewing alternatives to address its capital structures and it is currently in discussions with noteholders. Perella Weinberg Partners served as the financial advisor. In early January 2012, Catalyst entered into a restructuring agreement, which will see its bondholders taking control of the company and includes an exchange of debt for equity. The agreement said it would slash the company's debt by C$315.4 million ($311 million) and reduce its cash interest expenses. Catalyst also said it will continue to "operate and satisfy" its obligations to customers, trade creditors, employees and retirees in the ordinary course of business during the restructuring process. On Jan. 17, 2012, Catalyst applied for and received an initial court order under the Canada Business Corporations Act (CBCA) to commence a consensual restructuring process with its noteholders. Affiliate Catalyst Paper Holdings Inc., filed for creditor protection under Chapter 15 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 12-10219) on the same day and sought recognition of the Canadian proceedings. Catalyst joins a line of paper producers that have succumbed to higher costs, increased competition from Asia and Europe, and falling demand as more advertisers and readers move online. In 2011, Cerberus Capital-backed NewPage Corp. filed for bankruptcy protection, followed by SP Newsprint Co., owned by newsprint magnate and fine art collector Peter Brant. In December, Wausau Paper said it will close its Brokaw mill in Wisconsin, cut 450 jobs and exit its print and color business. The Supreme Court of British Columbia granted Catalyst creditor protection under the CCAA until April 30, 2012. As reported by the TCR on July 2, 2012, Catalyst received approval for its reorganization plan from the Supreme Court of British Columbia. The Company's second amended plan under the Companies' Creditors Arrangement Act received 99% support from creditors. In the Sept. 17, 2012, edition of the TCR, Catalyst Paper has successfully completed its previously announced reorganization pursuant to its Second Amended and Restated Plan of Compromise and Arrangement under the Companies' Creditors Arrangement Act. Catalyst Paper's balance sheet at Sept. 30, 2012, showed C$1.04 billion in total assets, C$887.3 million in total liabilities and C$152.8 million in equity. CENTENNIAL BEVERAGE: Hires Hank Dickerson as Real Estate Broker --------------------------------------------------------------- Centennial Beverage Group LLC asks the U.S. Bankruptcy Court for permission to employ Hank Dickerson & Company as lease and real estate broker in connection with various store locations being sold by the Debtor and a warehouse location. Pursuant to the Debtors' motion to sell 13 store locations, Cheers Spirits and Liquor, LLC, intends to accept an assignment of lease, or to lease or sublease certain of the of the properties upon which the Debtor is currently operating stores, or has in the past operated stores. The Debtor has entered into agreement with Hank Dickerson to serve as lease broker in connection with any lease transactions entered in connection with the sale. In addition, JWV Associates, Ltd., an entity in which the Debtor owns a 99% interest, owns a warehouse space in Arlington, Texas. The Debtor has been leasing the property but no longer requires the use of the property. JWV has decided to sell the property. JWV and the Debtor have entered into agreement with Hank Dickerson in connection with any sale of certain of the Debtor's properties, including the warehouse property. Hank Dickerson will be paid pursuant to Sec. 328 of the Bankruptcy Code. Upon full execution of a lease, lease assignment, or sublease and the placement of $50,000 and each individual store's first month's rent into escrow, as well as the receipt by Cheers of a TABC license for each individual store, the Debtor will pay Hank Dickerson $25,000 per store. Hank Dickerson will be responsible for all costs and expenses related to consummating the lease transactions. Upon the consummation of the sale of the Warehouse Property and any of the properties listed therein, Hank Dickerson will be paid 5% of the gross sales price of such sale. John F. Dickerson attests that Hank Dickerson is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Centennial Beverage Centennial Beverage Group LLC, a chain of 23 liquor stores in Texas, filed a petition for Chapter 11 reorganization (Bankr. N.D. Tex. Case No. 12-37901) amid lower sales brought by competition from big-box retailers. The 75-year-old-company once had 70 stores throughout Texas. They are now concentrated in the Dallas-Fort Worth area. Sales for the year ended in November were $158 million. Year-over-year, revenue was down 50%, according to a court filing. In its schedules, the Debtors disclosed $24,053,049 in assets and $48,451,881 in liabilities as of the Petition Date. Robert Dew Albergotti, Esq., at Haynes And Boone, LLP, in Dallas, serves as counsel. CENTER PLAZA: Kokolis Fails in Bid to Dismiss Wells Fargo Suit -------------------------------------------------------------- Stella Kokolis, et al., failed to convince a New York district court to dismiss, or abstain from hearing, an action captioned as WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Trustee for the Registered Holders of LSTAR COMMERCIAL MORTGAGE TRUST 2011-1, COMMERCIAL MORTGAGE PASS-THROUGH: CERTIFICATE, SERIES 2011-1, Acting Through Its Special Servicer, HUDSON AMERICAS, LLC, Plaintiff, v. STELLA KOKOLIS, Individually and as Executrix of the ESTATE OF PETER KOKOLIS, SPYRO KOKOLIS and RONALD KOKOLIS, Defendants, Case No. 12-cv-2433 (DLI) (JO) (E.D.N.Y.) Initiated on May 15, 2013, the Wells Fargo action seeks to enforce a guaranty agreement entered into by Peter Kokolis, deceased, in relation to a $1.08 million loan Center Plaza LLC obtained from Citibank FSB in 2006. The Promissory Note on the Loan and the Guaranty were subsequently assigned to Wells Fargo, et al. The Plaintiff alleged that the defendants are liable for the outstanding balance on the Loan pursuant to the Guaranty. In July 2011, Center Plaza defaulted on the Loan. On Dec. 15, 2011, the Plaintiff filed an action in Florida state court seeking to foreclose the property. The Florida Action was stayed when Center Plaza filed for bankruptcy protection in the U.S. District Court for the Middle District of Florida on Feb. 21, 2012. The bankruptcy petition was subsequently dismissed in August 2011 and the stay on the Florida Action was lifted. In its March 1, 2013 decision, Judge Dora Irizarry opined that New York Estates, Powers and Trust Law Sec. 12-1.11 does not bar the Wells Fargo action and the Plaintiff need not show that it has foreclosed on the Florida Property and could not satisfy the Loan through the foreclosure before bringing an action against Defendants to collect on the Guaranty. "It would be imprudent," Judge Irizarry added, "to abstain here because Plaintiff potentially would be deprived of the benefit of its bargain in obtaining the Guaranty for additional security for the loan." A copy of Judge Irizarry's March 1, 2013 Memorandum and Order is available at http://is.gd/i2XCiWfrom Leagle.com. CHI OVERHEAD: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Rating Services said it assigned its 'B' corporate credit rating to Arthur, Ill.-based C.H.I. Overhead Doors Inc. The rating outlook is stable. At the same time, S&P assigned its 'B' issue rating to CHI's proposed senior secured first-lien credit facilities (the same as the corporate credit rating) with a '4' recovery rating, which indicates S&P's expectation for average (30% to 50%) recovery in the event of a payment default. "The rating reflects Standard & Poor's Ratings Services expectation that following the proposed refinancing of its existing debt and the return of capital to shareholders, leverage is likely to decline to 5x or below over the next several quarters resulting in our 'aggressive' financial risk profile assessment," said Standard & Poor's credit analyst Tobias Crabtree. In addition, the rating incorporates S&P's view of CHI's liquidity position as "adequate", and that its expected covenant cushion will be at least 20% over this time period. The rating and outlook also reflects S&P's view of its "vulnerable" business profile which results from the company's small market share relative to its competitors and its single manufacturing facility, despite the company's good profitability and high variable cost structure. CHI is the fourth largest manufacturer of residential sectional, commercial sectional, and rolling steel doors in the U.S. The company builds all products to order and delivers directly to its customers. The company files private financial statements. The stable rating outlook reflects S&P's expectation that CHI's operating results will modestly improve from its recent levels given modest increases in repair and remodeling spending. As a result, S&P expects CHI to continue to generate positive free cash flow, further reduce indebtedness, and improve leverage to 5x or lower by the end of 2013, a level S&P considers in-line with the current rating. S&P's operating assumptions include modest sales growth and stable EBITDA margins. The outlook also incorporates S&P's view that the company's liquidity, primarily from funds from operations and availability on its revolving credit facility, will remain adequate and that its covenant cushion will be at least 20% over this time period. S&P might downgrade the company if weaker-than-expected operating performance results in reduced free cash flow generation, minimal debt repayment, and covenant cushion falling below 10%. EBITDA would have to decline more than 15% from S&P's projected 2013 level, which would likely result in leverage of about 6x and FFO to debt sustained below 10%. In addition, S&P could lower the ratings if the company were to pursue a more aggressive financial policy with regards to returns of capital to its controlling shareholders. At this time, an upgrade seems less likely given the company's vulnerable business profile which is a result of its small market share relative to competitors and single manufacturing facility, despite its good profitability and highly variable cost structure. CHINA EXECUTIVE: Merger with BETC Took Effect March 6 ----------------------------------------------------- The merger of Beyond Extreme Training Corp. with and into China Executive Education Corp. pursuant to Section 92A.180(2) of Nevada Revised Statute became effective on March 6, 2013. CEEC is the corporation surviving the merger, and as a result of the merger is now a privately held wholly-owned subsidiary of the rollover shareholders Kaien Liang, Pokai Hsu, Tingyuan Chen, Yen Chen Chi, Huang-Jen Chou, ChiaYeh Lin, China Berkshire Surpass Buffett Co., Ltd., and Zhicheng Zheng. CEEC filed a final amendment to thetTransaction Statement on Schedule 13E-3 filed by the Rollover Shareholders, CEEC, and CTEC on Oct. 16, 2012, as amended. Pursuant to the terms of the merger, each outstanding share of common stock will be cancelled and converted into the right to receive $0.324 per share in cash, without interest. A copy of the Amended Schedule 13E-3 is available at: http://is.gd/Jyc4VB In a separate regulatory filing, CEEC filed a Form 15 with the SEC to voluntarily terminate the registration of its common stock and suspend its duty to file reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934. As of March 6, 2013, there was only one holder of the common shares. About China Executive Hangzhou, China-based China Executive Education Corp. is an executive education company with operations in Hangzhou and Shanghai, China. It operates comprehensive business training programs that are designed to fit the needs of Chinese entrepreneurs and to improve their leadership, management and marketing skills, as well as bottom-line results. Albert Wong & Co, in Hong Kong, China, issued a "going concern" qualification on the financial statements for the year ended Dec. 31, 2011. The independent auditors noted that the Company has accumulated deficits as at Dec. 31, 2011, of $17,466,892 including net losses of $5,478,202 for the year ended Dec. 31, 2011, which raised substantial doubt about the Company's ability to continue as a going concern. The Company reported a net loss of US$5.47 million in 2011, compared with a net loss of US$8.54 million in 2010. China Executive's balance sheet at Sept. 30, 2012, showed US$9.01 million in total assets, US$28.20 million in total liabilities and a US$19.18 million total stockholders' deficiency. CHEROKEE SIMEON: AstraZeneca Unit Wants Ch. 11 Nixed Due to Cost ---------------------------------------------------------------- Jamie Santo of BankruptcyLaw360 reported that an AstraZeneca PLC affiliate that owns a contaminated chemical manufacturing site near San Francisco asked a Delaware bankruptcy judge Friday to dismiss its Chapter 11 case, saying it can no longer afford to continue the process. The report related that the emergency motion filed by Cherokee Simeon Venture I LLC, which purchased the property from Zeneca Inc., comes just days before the court was scheduled to hear a motion from CSV's secured creditor seeking to toss the case as a bad-faith filing. About Cherokee Simeon Cherokee Simeon Venture, I, LLC, is an AstraZeneca Plc affiliate that owns a contaminated former acid-factory site in Richmond, California. Cherokee Simeon sought Chapter 11 protection (Bankr. D. Del. Case No. 12-12913) on Oct. 23, 2012. Cherokee Simeon disclosed $33,600,000 in assets and $17,954,851 in debts in its schedules. Rafael Xavier Zahralddin-Aravena, Esq., at Elliott Greenleaf represents the Debtor. CHRISTOPHER FRANK PAXOS: Court Rejects Motion to Quash Summons -------------------------------------------------------------- In the case, is, SPIRIT SPE PORTFOLIO 2007-1 LLC, Plaintiff, v. CHRISTOPHER PAXOS, Defendant, Adv. Proc. No. 12-6112 (Bankr. N.D. Ohio), Bankruptcy Judge Russ Kendig denied the Defendant's motion to quash summons and complaint. Christopher Frank Paxos filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Case No. 12-61280) May 4, 2012. The The Plaintiff filed a complaint on Aug. 13, 2012 seeking a determination of nondischargeability under 11 U.S.C. Sec. 523(a)(2)(A), (B) and (a)(4). A copy of the Court's March 6, 2013 Memorandum of Opinion is available at http://is.gd/rmOp5B from Leagle.com. CHURCH STEET: Court Approves Reorganization Plan ------------------------------------------------ The Hon. Keith M. Lundin of the U.S. Bankruptcy Court for the Middle District of Tennessee (Nashville Division) confirmed the second amended joint plan of reorganization proposed by Church Street Health Management, LLC, n/k/a CS DIP, LLC, and its debtor affiliates and the Official Committee of Unsecured Creditors appointed in the Chapter 11 cases. Pursuant to the Plan, as of the Effective Date, all property of the Debtors' estates will vest in each of the Post-Confirmation Debtors and the Initial Trust Assets will be transferred to the Liquidating Trust. Before the confirmation hearing, the Plan was amended to resolve potential objections to confirmation of National Union Fire Insurance Company of Pittsburgh, Pa., and Continental Casualty Company. The Court also overruled the objection filed by CSHM LLC after finding it to be without merit. Bill Rochelle, the bankruptcy columnist for Bloomberg News, recopunts that the Debtor, now called CS DIP LLC, sold the business to first-lien lenders in exchange for $25 million in debt. Unsecured creditors were told they would recover less than 1 percent on their claims. The plan creates a structure for former patients to recover from insurance coverage should there be a settlement in class-action lawsuits. The provider of malpractice insurance is denying responsibility for covering the claims. About Church Street Church Street Health Management, LLC, which provided management services for 67 dental practices in 22 states, filed a Chapter 11 petition (Bankr. M.D. Tenn. Case No. 12-01573) in Nashville, Tennessee, on Feb. 20, 2012. The following day, four affiliates, Small Smiles Holding Company, LLC, Forba NY, LLC, EEHC, Inc., and Forba Services, LLC, filed their Chapter 11 petitions (Case Nos. 12-01574 to 12-01577). As of the Petition Date, the Debtors' assets have book value of $895 million, with debt totaling $303 million. There is about $131.5 million owing on first-lien obligations, plus $25.6 million on a second-lien obligation. There is an additional $152 million on three subordinated debts. The company's finances are structured to comply with Islamic Shariah financing regulations. In the Chapter 11 cases, the Debtors have engaged Waller Lansden Dortch & Davis, LLP as bankruptcy counsel, and Alvarez & Marsal Healthcare Industry Group, LLC, as financial and restructuring advisor. Martin McGahan, a managing director at A&M, will serve as chief restructuring officer of Church Street. Morgan Joseph TriArtisan, LLC, is the investment banker. Garden City Group is the claims and notice agent. Garrison Investment Group is providing funding for the Chapter 11 case. The credit agreement will provide the Debtor with up to an aggregate principal amount of $12 million in a revolving credit facility. Church Street Health Management LLC changed its name as a result of the sale of the business to existing first-lien lenders in exchange for $25 million in debt. The new name for the company in Chapter 11 is CS DIP LLC. The U.S. Trustee for Region 8 removed two creditors from the Official Unsecured Creditors Committee. Through the sale of assets approved by the Court, these two members no longer have debts against the Debtors. The Committee tapped Gilbert LLP as special insurance and mass tort counsel. CLAIRE'S STORES: Plans to Offer $210 Million of Sr. Secured Notes ----------------------------------------------------------------- Claire's Stores, Inc., intends to offer $210 million aggregate principal amount of senior secured first lien notes due 2020. The Company intends to use the net proceeds of the offering, together with cash on hand, to purchase up to $210 million aggregate principal amount of its 9.25% senior notes due 2015 and its 9.625%/10.375% senior toggle notes due 2015 pursuant to an Offer to Purchase dated March 1, 2013 or a subsequent redemption. The notes are being offered only to "qualified institutional buyers" in reliance on Rule 144A under the Securities Act of 1933, as amended, and outside the United States only to non-U.S. persons in reliance on Regulation S under the Securities Act. The notes have not been and will not be registered under the Securities Act or any 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 securities laws. About Claire's Stores Claire's Stores, Inc. -- http://www.clairestores.com/-- operates as a specialty retailer of fashion accessories and jewelry for preteens and teenagers, as well as for young adults in North America and internationally. It offers jewelry products that comprise costume jewelry, earrings, and ear piercing services; and accessories, including fashion accessories, hair ornaments, handbags, and novelty items. Based in Pembroke Pines, Florida, Claire's Stores operates under two brands: Claire's(R), which operates worldwide and Icing(R), which operates only in North America. As of Jan. 31, 2009, Claire's Stores, Inc., operated 2,969 stores in North America and Europe. Claire's Stores also operates through its subsidiary, Claire's Nippon, Co., Ltd., 213 stores in Japan as a 50:50 joint venture with AEON, Co., Ltd. The Company also franchises 198 stores in the Middle East, Turkey, Russia, South Africa, Poland and Guatemala. * * * As reported by the TCR on Oct. 1, 2012, Moody's Investors Service upgraded Claire's Stores, Inc.'s Corporate Family and Probability of Default ratings to Caa1 from Caa2. The upgrade of Claire's Corporate Family Rating to Caa1 reflects its ability to address its substantial term loan maturity in 2014 by refinancing it with a $625 million add-on to its existing senior secured first lien notes due 2019. Claire's Stores, Inc., carries a 'B-' Corporate Credit Rating from Standard & Poor's Ratings Services. CLAIRE'S STORES: Moody's Rates New $210MM First Lien Notes 'B2' --------------------------------------------------------------- Moody's Investors Service rated Claire's Stores, Inc.'s proposed $210 million senior secured first lien notes due 2020 B2. At the same time, Moody's affirmed Claire's Corporate Family Rating at Caa1, its Probability of Default Rating at Caa1-PD, and its Speculative Grade Liquidity rating at SGL-2. The rating outlook remains stable. The proceeds of the $210 million proposed senior unsecured notes will be used to fund the tender offer of a portion of Claire's $522 million senior unsecured notes due 2015. In the event that less than $210 million of senior notes is tendered, Claire's intends to redeem up to $210 million in notes on or after June 1, 2013. Moody's views this refinancing as a credit positive event as it extends the maturity of $210 million in debt to 2019 from 2015 and will result in lower interest expense. The following rating is assigned subject to review and receipt of final documentation: $210 million senior secured first lien notes due 2020 at B2 (LGD 3, 32%) The following ratings are affirmed and LGD point estimates changed: Corporate Family Rating at Caa1 Probability of Default Rating at Caa1-PD $115 million revolving credit facility at B2 (LGD 3, to 32% from 29%) $1,125 million senior secured first lien notes due 2019 at B2 (LGD 3, to 32% from 29%) $450 million senior secured second lien notes due 2019 at Caa2 (LGD 4, to 64% from 62%) Senior unsecured notes due 2015 at Caa2 (LGD 4, to 64% from 62%) Senior subordinated notes due 2017 at Caa3 (LGD 6, 94%) Speculative Grade Liquidity rating at SGL-2 Ratings Rationale: Claire's Caa1 Corporate Family Rating reflects its very high leverage and weak interest coverage. Moody's estimates Claire's debt to EBITDA was 7.9 times for the twelve months ended February 2, 2013, and interest coverage pro forma for the refinancing is 1.1 times. Moody's also expects credit metrics will remain weak and at levels consistent with a Caa1 rating over the next twelve months given Claire's substantial level of debt (nearly $2.4 billion) relative to its earnings, along with Moody's expectation that the European economic environment will remain challenging over the next year. Close to 40% of Claire's sales are in Europe. The Caa1 also considers that Claire's is still facing about $312 million of senior notes maturing in 2015. Claire's $115 million revolving credit facility expiring in September 2017 has a springing maturity to April 1, 2015, if the company's senior unsecured notes are not refinanced or repaid by March 31, 2015. Favorable rating consideration is given to Claire's value positioned price points, international geographic presence, well known brand name, and high margins relative to its specialty peers. Also considered is Claire's good liquidity profile as indicated by its SGL-2 Speculative Grade Liquidity rating. The stable outlook incorporates Moody's expectation that Claire's earnings will improve modestly, but not enough to meaningfully improve its credit metrics. A higher rating would require Claire's operating performance to improve or absolute debt levels to fall such that the company can achieve and maintain EBITA to interest expense above 1.25 times and debt to EBITDA below 7.5 times. Ratings could be downgraded if Claire's operating performance, liquidity, and/or interest coverage deteriorate, or if the company's probability of default were to increase for any reason. The principal methodology used in this rating was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Claire's Stores, Inc., headquartered in Hoffman Estates, IL, is a specialty retailer of value-priced jewelry and fashion accessories for pre-teens and young adults. It operates 3,085 stores and franchises 392 stores in North America, Europe, the Middle East, Central America, South America, and Asia. Revenues are about $1.6 billion. CLAIRE'S STORES: S&P Rates $210-Mil. Senior Secured Notes 'B-' -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' issue-level rating to Claire's Stores Inc.'s $210 million senior secured first-lien notes. S&P also assigned a recovery rating of '3'. Concurrently, S&P lowered the issue-level rating on the company's revolving credit facility due 2017 and first-lien notes due 2019 to 'B-' from 'B' and revised the recovery rating to '3', indicating S&P's expectation of meaningful (50%-70%) recovery in the event of default, from '2'. The downgrade of the revolving credit facility and first-lien notes reflects the increase in first-lien debt used to repay lower ranking debt. At the same time, S&P is affirming all other ratings on the company, including its 'B-' corporate credit rating. The outlook is stable. According to the company, Claire's Stores will use the proceeds of the first-lien note issuance to pay for the tender offer of its senior notes due 2015 and senior toggle notes due 2015. The stable outlook reflects S&P's view that performance will trend up slightly over the next 12 months, with modestly positive revenues and margin gains. S&P believes that credit protection measures are unlikely to change meaningfully from current levels and that the company will remain highly leveraged with thin cash flow protection measures. The outlook incorporates S&P's expectation that liquidity will remain adequate over the next 12 months, and the company will continue refinancing upcoming debt maturities. "Given the company's highly leveraged capital structure and thin interest coverage, an upgrade is not a near-term consideration. We would predicate any upward ratings movement on EBITDA growth greater than 35% of our expectation, which would result in leverage less than 6x and interest coverage modestly more than 2x," said Standard & Poor's credit analyst David Kuntz. S&P could consider downgrading the company if its performance and liquidity position were to deteriorate to such an extent that S&P concludes that cash on hand is insufficient to cover operational shortfalls. This could result from a substantial erosion of performance, with EBITDA more than 25% less than S&P's expectations. At that time, interest coverage would be modestly less than 1x. CUI GLOBAL: Intends to Acquire Orbital-UK for GBP17 Million ----------------------------------------------------------- CUI Global, Inc., has signed a Shareholder Purchase Agreement to acquire 100% of the capital stock of Orbital Gas Systems Limited, a United Kingdom-based provider of natural gas infra-structure and advanced technology, including metering, odorization, remote telemetry units and a diverse range of personalized gas engineering solutions to the gas utilities, power generation, emissions, manufacturing and automotive industries. Effective upon completion of the acquisition, Orbital-UK will become a wholly owned subsidiary of CUI Global. Andrew Ridge will continue as the managing director of Orbital-UK. William Clough will remain as president and CEO of CUI Global, and assume the role of CEO of Orbital-UK. CUI Global does not expect any organizational changes to Orbital-UK's operations in the United Kingdom or elsewhere. "We believe the acquisition offers significant synergies for revenue growth. Orbital-UK's internationally recognized expertise in the natural gas industry, including bringing together the patented VE-technology with the Vergence(R) device from CUI Global offer natural gas operators/users a comprehensive solution set for the next generation of energy metering systems," stated William Clough, CUI Global's president & CEO. While the Vergence Technology allows the natural gas operator to quickly and accurately obtain Calorific Value (CV), Wobbe Index (WI), Relative Density (RD), and Compression Factor (Z) in less than three seconds; that analysis takes place after an 8 to 10 minute delay in capturing the natural gas sample from the pipeline. The patented VE-Probe, on the other hand, allows the sample to be obtained from the pipeline in less than two seconds. Combining the two technologies, allows for a packaged device that provides the natural gas operator/user a complete energy analysis (from sample to results) in less than five (5) seconds - a process that now takes from 12 to as much as 40 minutes - giving the operator the ability to obtain almost "real-time" results simply unavailable from any other current technologies. In addition, Orbital-UK's in-house engineering capabilities, manufacturing relationships, and R&D infrastructure are expected to accelerate the adoption of the Vergence device, while allowing the company to control all calibration, packaging, delivery, engineering support and more within the Orbital-UK facilities; thus allowing CUI Global to capture an even larger percentage of operating margins from the final, packaged device. Anticipated cost synergies include leveraging existing sales and distribution infrastructure for cross-selling opportunities. The acquisition will also immediately add significant revenues and earnings to CUI Global. The SPA calls for purchase of all of the outstanding shares in Orbital-UK and its subsidiary for a gross purchase price of GBP17 million. The transaction is expected to close by April 30, 2013, subject to customary closing conditions, including regulatory approval. The purchase is to be funded in part by a future equity offering and available cash resources. Orbital-UK's unaudited historical results for calendar year 2012 show that it produced net income of approximately $3.1 million on gross revenues in excess of $23 million. An unaudited pro forma condensed combined statement of operations for FY 2012 results in net earnings of $511,399 or $0.03 earnings per share on gross revenues of more than $63.9 million. With Orbital-UK's capabilities, reputation, and extensive contacts throughout the natural gas industry, this acquisition allows CUI Global to speed up and enhance the development and adoption of its proprietary Vergence Technology. In addition, Orbital-UK will be working to rapidly bring its natural gas product line to a broader international market using CUI Global's market partners and global distribution capabilities. "This transaction effectively positions CUI Global for even more accelerated growth," explained Clough. "Orbital-UK's talent base of technical employees and their world-class engineering and support team, not to mention their sterling reputation within the natural gas industry, will enable us to speed market adoption of our Vergence GasPT2 device; while CUI Global's established network of global distributors will allow Orbital-UK to market its broad portfolio of natural gas products to a much larger audience." "This is a very significant company milestone for Orbital," explained Orbital-UK's managing director, Andy Ridge. "With the combination of these two companies we will now be able to expand our programs and services for our existing customer base, as well as pursue growth opportunities across a much broader market. As part of a global entity, we expect enhanced visibility in the market and heightened awareness for our company offerings. Further, the addition of the Vergence GasPT2 technology to our current product line is expected to increase our ability to penetrate new markets and thereby grow our core business." Since it was formed in 1984, Orbital-UK has focused its attention on providing superior customer service, advanced technology solutions and a dedication to product quality unequaled in the natural gas industry. Orbital-UK's customers, including National Grid (the national gas transmission company for the UK), all of the UK's Gas distribution networks, and others such as Jaguar Motor Cars, BMW, and more, have come to rely on its team of talented and knowledgeable employees for crucial engineering support and specialized knowledge. Its value-added services and innovative products reduce the time it takes to identify, design and begin cost effective delivery of new technology to the natural gas and other industries. "The acquisition of Orbital-UK, with the associated increase in revenues and earnings, and the dramatic increase in our ability to penetrate the natural gas market, while capturing even more operational margin, all combine to further our strategy of making opportunistic, synergistic acquisitions of either technology, personnel, or companies that will increase our growth and, thereby, enhance our shareholder value - this transaction certainly encapsulates all of those positive elements," Clough concluded. A copy of the Share Purchase Agreement is available at: http://is.gd/CzqXMf About CUI Global Tualatin, Ore.-based CUI Global, Inc., formerly known as Waytronx, Inc., is a platform company dedicated to maximizing shareholder value through the acquisition, development and commercialization of new, innovative technologies. CUI Global reported a net loss allocable to common stockholders of $48,763 in 2011, compared with a net loss allocable to common stockholders of $7.01 million in 2010. As reported by the TCR on April 8, 2011, Webb & Company, in Boynton Beach, Florida, expressed substantial doubt about CUI Global's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $7,015,896, a working capital deficiency of $675,936 and an accumulated deficit of $73,596,738 at Dec. 31, 2010. Webb & Company did not include a "going cocern qualification" in its report on the Company's 2011 financial results. The Company's balance sheet at Sept. 30, 2012, showed $36.61 million in total assets, $11.79 million in total liabilities and $24.82 million in total stockholders' equity. CUI GLOBAL: Offering 7 Million Common Shares -------------------------------------------- CUI Global, Inc., filed a Form S-1 registration statement with the U.S. Securities and Exchange Commission relating to the offering of 7,000,000 shares of the Company's common stock at a public offering price of $[ ] per share. The Company's common stock is currently quoted on the NASDAQ Capital Market tier of The NASDAQ Stock Market under the symbol "CUI". On Feb. 27, 2013, the last reported sale price of the Company's common stock on the NASDAQ Capital Market was $5.51 per share. A copy of the prospectus is available for free at http://is.gd/DMiR07 About CUI Global Tualatin, Ore.-based CUI Global, Inc., formerly known as Waytronx, Inc., is a platform company dedicated to maximizing shareholder value through the acquisition, development and commercialization of new, innovative technologies. CUI Global reported a net loss allocable to common stockholders of $48,763 in 2011, compared with a net loss allocable to common stockholders of $7.01 million in 2010. As reported by the TCR on April 8, 2011, Webb & Company, in Boynton Beach, Florida, expressed substantial doubt about CUI Global's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $7,015,896, a working capital deficiency of $675,936 and an accumulated deficit of $73,596,738 at Dec. 31, 2010. Webb & Company did not include a "going cocern qualification" in its report on the Company's 2011 financial results. The Company's balance sheet at Sept. 30, 2012, showed $36.61 million in total assets, $11.79 million in total liabilities and $24.82 million in total stockholders' equity. DAVE & BUSTER'S: Moody's Upgrades Rating on Senior Notes to 'B3' ---------------------------------------------------------------- Moody's Investors Service changed Dave & Buster's Inc.'s ratings outlook to positive from stable and upgraded the senior unsecured notes rating to B3 from Caa1. Moody's also affirmed the company's B3 corporate family rating, B3-PD probability of default rating, and the Ba3 ratings on the senior secured credit facilities. The outlook revision reflects Dave & Buster's solid operating performance in recent periods characterized by positive comparable store revenues and expanding operating margins that has contributed to improvements in its credit profile. Debt to EBITDA should decline to the low 5.0 times range for fiscal 2012 from 6.0 times in fiscal 2011 (Moody's adjusted). The outlook also reflects Moody's expectation that the company will sustain positive comparable store revenues such that leverage further improves. Ratings affirmed: Corporate Family Rating at B3 Probability of Default Rating at B3-PD $50 million senior secured revolving credit facility due 2015 at Ba3 (LGD2, 12%) $148 million senior secured term loan due 2016 at Ba3 (LGD2, 12%) Rating upgraded: $200 million senior unsecured notes due 2018 to B3 (LGD4, 58%) from Caa1 (LGD4, 58%) Ratings Rationale: Dave & Buster's B3 corporate family rating reflects Moody's expectation that leverage will decline to or below 5.0 times and EBITA to interest will exceed 1.0 times over the next 12 to 18 months. The rating also considers the highly capital intensive nature of the Dave & Buster's business model that constrains free cash flow generation, exposure to trends in discretionary consumer spending, and the company's somewhat limited scale and scope. The rating also considers past aggressive financial policy, including a dividend recapitalization in 2011. Notwithstanding these concerns, the rating captures Dave & Buster's leading position in the niche combined food & entertainment industry, strong brand recognition, diverse geographic footprint, and the resilience of its operating performance during the downturn. The rating also derives support from the company's expanding EBITDA margins and solid comparables store revenues in recent periods. Moody's could upgrade the ratings if Dave & Buster sustains positive comparable store revenues and grows EBITDA such that leverage is sustained below 5.0 times and EBITA to interest exceeds 1.0 times. The upgrade is also dependent on capital spending being within Moody's expectation. Moody's could revise the ratings outlook to stable if EBITDA growth stalls. Moody's could downgrade the ratings if comparable store revenues turn negative, operating margins weaken such that debt to EBITDA increases well above 6.0 times and EBITA to interest falls below 1.0 times. Greater than anticipated capital spending could also pressure the ratings. Debt financed dividends or a material weakening of the company's liquidity profile could also result in a ratings downgrade. The principal methodology used in this rating was the Global Restaurant 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. Headquartered in Dallas, Texas, Dave & Buster's, Inc. is a leading operator of large format, high volume specialty restaurant- entertainment complexes. The company operates under the names Dave & Buster's and Dave & Buster's Grand Sports Caf�, and owns approximately 61 stores in the United States, including one franchises in Canada. Revenues for the last twelve months ended October 28, 2012 were approximately $586 million. The company is primarily owned by affiliates of Oak Hill Capital Partners. DAVID T. HALES: Plan Confirmation Hearing Continued to April 11 --------------------------------------------------------------- In the Chapter 11 case of David T. Hales and Wendy H. Hales, Bankruptcy Judge William T. Thurman ruled that based on the representations of counsel and the Court's review of the record, all requirements for confirmation of the Debtors' chapter 11 plan have not been met. The Court will continue the confirmation hearing to April 11, 2013 at 11:30 a.m. The Debtors are directed to submit a Report of Class Ballot Voting by April 9. A hearing on contested valuation of real property and confirmation of the Debtors' Chapter 11 plan was held Feb. 22. David Troy Hales; John Bagley, Esq., attorney for the Debtors; Mark Middlemas, Esq., attorney for HSBC Bank; and Peter Kuhn, Esq., attorney for the US Trustee, appeared. At the hearing, the Court resolved the dispute concerning the correct date of valuation for the Vernal real property as a motion for partial summary judgment. The Court ruled that the proper date of valuation is the effective date of the plan. The Court will issue additional written findings memorializing its decision. The Parties also have stipulated to the value of allowed secured claims 4, 6, 8, and 10 at $210,000 per claim. Claims 4, 6, 8, and 10 are the sole claims consisting of Class 6 of the Debtors' Plan and based on the stipulation of value, the Debtors orally modified the Plan to pay Class 6 claims in the stipulated amount of the value of the collateral at 4% interest from the effective date of the plan. Payment of each claim will be at a fixed monthly payment of $1,000 until paid in full. A copy of the Court's March 6, 2013 Order is available at http://is.gd/xKDewwfrom Leagle.com. David T. Hales and Wendy H. Hales filed a joint Chapter 11 petition (Bankr. D. Utah Case No. 11-20884) on Jan. 25, 2011. DEMCO INC: Sec. 341 Meeting Adjourned to April 17 ------------------------------------------------- The meeting of creditors pursuant to 11 U.S.C. 341(a) in the Chapter 11 case of Demco, Inc., aka Decommissioning & Environmental Management Company, has been adjourned to April 17, 2013, at 1:00 p.m. The meeting will be held at Buffalo UST - Olympic Towers. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the Company's financial affairs and operations that would be of interest to the general body of creditors. About Demco Inc. Demco, Inc., aka Decommissioning & Environmental Management Company, is a specialty trade contractor based in West Seneca, New York, which provides demolition services, nuclear work, environmental clean-up, disaster response and a variety of other services throughout the United States and, on a project-by-project basis, internationally. Some of Demco's better known demolition projects in the past have included the Rocky Flats Nuclear Power Plant, Yankee Stadium, the Orange Bowl, Buffalo Memorial Auditorium, and the Sunflower Army Ammunition Plant. Demco filed for Chapter 11 protection (Bankr. W.D.N.Y. Case No. 12-12465) on Aug. 6, 2012. Bankruptcy Judge Michael J. Kaplan presides over the case. Daniel F. Brown, Esq., at Andreozzi, Bluestein, Fickess, Muhlbauer Weber, Brown, LLP, represent the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. The petition was signed by Michael J. Morin, controller. Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three creditors to serve on the Official Committee of Unsecured Creditors. DEWEY & LEBOEUF: Ex-Partners Make Case to Keep 2011 Bonuses ----------------------------------------------------------- Helen Christophi of BankruptcyLaw360 reported that six former Dewey & LeBoeuf LLP attorneys urged a New York bankruptcy court Thursday to reject Dewey's objection to their 2011 bonus pay, saying they had submitted substantial evidence that the firm promised them the bonuses and that its objection couldn't pass muster. The report related that the objection was filed in a response to Dewey's "books and records" objection to their claims for bonus pay for work performed in 2011. The attorneys are Jason Behrens, Geoffrey Butler, Lauren Cook, Lauren King, Sophie Melniker and David C. Miller, the report added. About Dewey & LeBoeuf Dewey & LeBoeuf LLP sought Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 12-12321) to complete the wind-down of its operations. The firm had struggled with high debt and partner defections. Dewey disclosed debt of $245 million and assets of $193 million in its chapter 11 filing late evening on May 29, 2012. Dewey & LeBoeuf LLP operated as a prestigious, New York City- based, law firm that traced its roots to the 2007 merger of Dewey Ballantine LLP -- originally founded in 1909 as Root, Clark & Bird -- and LeBoeuf, Lamb, Green & MacCrae LLP -- originally founded in 1929. In recent years, more than 1,400 lawyers worked at the firm in numerous domestic and foreign offices. At its peak, Dewey employed about 2,000 people with 1,300 lawyers in 25 offices across the globe. When it filed for bankruptcy, only 150 employees were left to complete the wind-down of the business. Dewey's offices in Hong Kong and Beijing are being wound down. The partners of the separate partnership in England are in process of winding down the business in London and Paris, and administration proceedings in England were commenced May 28. All lawyers in the Madrid and Brussels offices have departed. Nearly all of the lawyers and staff of the Frankfurt office have departed, and the remaining personnel are preparing for the closure. The firm's office in Sao Paulo, Brazil, is being prepared for closure and the liquidation of the firm's local affiliate. The partners of the firm in the Johannesburg office, South Africa, are planning to wind down the practice. The firm's ownership interest in its practice in Warsaw, Poland, was sold to the firm of Greenberg Traurig PA on May 11 for $6 million. The Pension Benefit Guaranty Corp. took $2 million of the proceeds as part of a settlement. Judge Martin Glenn oversees the case. Albert Togut, Esq., at Togut, Segal & Segal LLP, represents the Debtor. Epiq Bankruptcy Solutions LLC serves as claims and notice agent. The petition was signed by Jonathan A. Mitchell, chief restructuring officer. JPMorgan Chase Bank, N.A., as Revolver Agent on behalf of the lenders under the Revolver Agreement, hired Kramer Levin Naftalis & Frankel LLP. JPMorgan, as Collateral Agent for the Revolver Lenders and the Noteholders, hired FTI Consulting and Gulf Atlantic Capital, as financial advisors. The Noteholders hired Bingham McCutchen LLP as counsel. The U.S. Trustee formed two committees -- one to represent unsecured creditors and the second to represent former Dewey partners. The creditors committee hired Brown Rudnick LLP led by Edward S. Weisfelner, Esq., as counsel. The Former Partners hired Tracy L. Klestadt, Esq., and Sean C. Southard, Esq., at Klestadt & Winters, LLP, as counsel. Dewey filed a Chapter 11 Plan of Liquidation and an accompanying Disclosure Statement on Nov. 21, 2012. It filed amended plan documents on Dec. 31, in an attempt to address objections lodged by various parties. A second iteration was filed Jan. 7, 2013. The plan is based on a proposed settlement between secured lenders and Dewey's official unsecured creditors' committee, as well as a settlement with former partners. On Feb. 27, 2013, the Bankruptcy Court confirmed Dewey & Leboeuf's Second Amended Chapter 11 Plan of Liquidation dated Jan. 7, 2013, As of the Effective Date of the Plan, the Debtor will be dissolved. DEX MEDIA EAST: Bank Debt Trades at 29% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media East LLC is a borrower traded in the secondary market at 71.17 cents-on-the-dollar during the week ended Friday, March 8, 2013, a drop of 0.25 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 250 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014. The loan is one of the biggest gainers and losers for the week ended March 8, among 239 widely quoted syndicated loans with five or more bids in secondary trading. About R.H. Donnelley & Dex Media East Dex One, headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-11852) on May 28, 2009. They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. Dex One reported a net loss of $518.96 million in 2011 compared with a net loss of $923.59 million for the eleven months ended Dec. 31, 2010. DEX MEDIA WEST: Bank Debt Trades at 24% Off in Secondary Market --------------------------------------------------------------- Participations in a syndicated loan under which Dex Media West LLC is a borrower traded in the secondary market at 75.63 cents-on- the-dollar during the week ended Friday, March 8, 2013, a drop of 0.47 percentage points from the previous week according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. The Company pays 450 basis points above LIBOR to borrow under the facility. The bank loan matures on Oct. 24, 2014, and carries Moody's Caa3 rating. The loan is one of the biggest gainers and losers for the week ended March 8, among 239 widely quoted syndicated loans with five or more bids in secondary trading. About R.H. Donnelley & Dex Media East Dex One, headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-11852) on May 28, 2009. They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. Dex One reported a net loss of $518.96 million in 2011 compared with a net loss of $923.59 million for the eleven months ended Dec. 31, 2010. DOWLING COLLEGE: Moody's Confirms Caa1 Rating on Two Bond Issues ---------------------------------------------------------------- Moody's Investors Service confirmed the Caa1 rating on Dowling College's Series 1996 and 2002 bonds. The Series 2002 bonds were issued through the Town of Brookhaven Industrial Development Agency, and the Series 1996 bonds were issued through the Suffolk County Industrial Development Agency. The rating has been removed from review for downgrade. The outlook is negative. Ratings Rationale: The Caa1 rating is based on weak student demand metrics coupled with a trend of decline in enrollments, thin operating margins, and very low unrestricted liquidity. The rating also reflects the college's unusually high operating dependence on student charges, recent turnover in presidential position, and Moody's expectation that operations are likely to remain challenged, especially in the near term, driven by fall 2012 enrollment decline. Challenges: - Challenged market position evidenced by a trend of enrollment declines and weak student demand metrics. In fall 2012, Dowling enrolled 3,034 full-time equivalent (FTE) students, 10% below the fall 2011 level, at its two campuses on the southern shore of Long Island, NY. Dowling's weak freshmen selectivity (fall 2012: 78.3%) and matriculation levels (fall 2012: 18.4%) further highlight the significant amount of competition from both other local private and public universities. - Thin liquidity position with expendable financial resources covering debt by a weak 0.12 times and operating expenses by 0.10 times in FY 2012. The college's unrestricted monthly liquidity provided a very low 19 days coverage of cash expenses in FY 2012. - Weak operating performance due to continuous decline in enrollments. The average operating margins between FY 2010 and FY 2012 was a negative 0.3% and the operating margin in FY 2010 and 2011 was inflated by one time gifts of $4 million received in each year, received from a board member. The three-year average operating margin would have been much lower absent these gifts. The FY 2012 operating cash flow margin of 7% provided a 0.92 coverage of annual debt service. - Undiversified revenue base with student charges accounting for 94.4% of the operating revenues in FY 2012. - Presidential transition brings challenges for the college as the interim president establishes an effective working relationship with the board and the management. The college has had multiple presidents over the last decade. Strengths: - Large enrollment base of 3,034 full-time equivalent students in fall 2012 and diversified program offerings including degrees in arts, sciences, business administration, and education. The total enrollment, however, has declined 32% from fall 2009 enrollment of 4,425 FTE. - Trend of growth in net tuition per student. In FY 2012, the college generated $16,617 of net tuition per student, a 5.3% increase over FY 2011. Outlook: The negative outlook reflects Moody's view that operations will remain challenged in the near-term, in spite of the expense reduction measures taken recently, as the college adjusts to a significantly lower enrollment base in a competitive market environment. The outlook also incorporates Moody's assumption that the college will continue to provide appropriate information regularly on a timely basis. Should appropriate disclosure from the college not be forthcoming, Moody's will consider withdrawing Moody's ratings on the bonds due to lack of sufficient information. What Could Make The Rating Go Up A rating upgrade is highly unlikely in the intermediate term. In the long term, significant growth in liquidity, coupled with strengthening of operating performance and stabilization of enrollment. What Could Make The Rating Go Down The rating could be downgraded in the event that the college does not demonstrate significant progress towards improving its student market position and at least stabilizing enrollment, and filling the presidential position permanently. In addition, borrowing without commensurate growth of financial resources, inadequate annual debt service coverage, and inability to achieve at least balanced operating performance, absent unusual levels of philanthropic support from the board, could result in a downgrade. Methodology: The principal methodology used in this rating was U.S. Not-for- Profit Private and Public Higher Education published in August 2011. DRYSHIPS INC: Incurs $129.8 Million Net Loss in Fourth Quarter -------------------------------------------------------------- Dryships Inc. reported a net loss attributable to the Company of US$129.84 million on US$282.86 million of revenue for the three months ended Dec. 31, 2012, as compared with a net loss attributable to the Company of US$6.22 million on US$328.18 million of revenue for the same period a year ago. For the year ended Dec. 31, 2012, Dryships incurred a net loss attributable to the Company of US$246.77 million on US$1.21 billion of revenue, as compared with a net loss attributable to the Company of US$70.12 million on US$1.07 billion of revenue during the prior year. The Company's balance sheet at Dec. 31, 2012, showed US$8.87 billion in total assets, US$5.01 billion in total liabilities and US$3.86 billion in total stockholders' equity. George Economou, Chairman and Chief Executive Officer of the Company, commented, "We continue to be bearish about the short- term performance of the shipping markets. Both tanker and drybulk spot charter rates continue to hover around historic lows. Unfortunately this comes at a time when most of our lucrative legacy charters expire. "As we have mentioned in previous quarters, low-cost financing for traditional shipping assets is generally less available than before and therefore the optimization of our newbuilding programs is our top priority right now. We sold our only two unfinanced tankers and eliminated approximately $100 million in CAPEX. With respect to our Drybulk newbuilding program in China, we are still in discussions with the shipyards in this respect to reduce and prolong our CAPEX program. This process was never going to be easy but we still believe a deal with a shipyard could be struck. Alternatively, we are seeing interest for our vessels in the S&P market." A copy of the press release is available for free at: http://is.gd/SnSjQ2 About DryShips Inc. Based in Greece, DryShips Inc. -- http://www.dryships.com/-- -- owns and operates drybulk carriers and offshore oil deep water drilling units that operate worldwide. As of Sept. 10, 2010, DryShips owns a fleet of 40 drybulk carriers (including newbuildings), comprising 7 Capesize, 31 Panamax and 2 Supramax, with a combined deadweight tonnage of over 3.6 million tons and 6 offshore oil deep water drilling units, comprising of 2 ultra deep water semisubmersible drilling rigs and 4 ultra deep water newbuilding drillships. DryShips's common stock is listed on the NASDAQ Global Select Market where it trades under the symbol "DRYS". On Nov. 25, 2010, DryShips Inc. entered into a waiver letter for its US$230.0 million credit facility dated Sept. 10, 2007, as amended, extending the waiver of certain covenants through Dec. 31, 2010. EASTMAN KODAK: Judge Clears New Financing Deal with Lenders ----------------------------------------------------------- Joseph Checkler at Daily Bankruptcy Review reports a judge on Friday approved changes to Eastman Kodak Co.'s bankruptcy financing that gives the company more flexibility of time and money as it continues its pursuit of a Chapter 11 exit plan that would keep it viable. Eastman Kodak previously said it has reached an agreement with the Steering Committee of the Second Lien Noteholders to amend the terms for a previously-announced interim and exit financing package. The amendments provide Kodak with additional flexibility to successfully execute its reorganization objectives and emerge from Chapter 11 in mid-2013. As part of the agreement, certain terms of the financing have been amended. Kodak now is committed to achieving at least $600 million in cash proceeds through the disposition of any combination of specified non-Commercial Imaging assets, which include its Document Imaging and Personalized Imaging businesses, and trademarks and related rights. 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 PoJo Forbearance Deal to April 5 ---------------------------------------------------------------- Edison Mission Energy and Midwest Generation LLC seek entry of an order authorizing the Debtors to perform under a forbearance agreement dated as of March 1, 2013, with respect to the leveraged leases of the Powerton Generating Station in Pekin, Ill., and Units 7 and 8 of the Joliet Generating Station in Joliet, Ill. (PoJo Facilities). As reported in the Troubled Company Reporter on Dec. 26, 2012, Edison Mission Energy and Midwest Generation, LLC, sought and obtained approval from the Bankruptcy Court to perform under a forbearance agreement dated as of Dec. 16, 2012, with respect to obligations related to MWG's Powerton and Joliet Generating Stations in Illinois (PoJo Facilities). Pursuant to the Original Forbearance Order, on February 15, 2013, MWG made a payment of approximately $7.1 million of the approximately $75 million in Basic Lease Rent that became due and owing on January 2, 2013, under the Lease. Approximately two weeks before the expiration of the original 60-day forbearance period provided under the Original Forbearance Order, the PoJo Debtors, the Certificate Holders, the Equity Investors, and the Owner Trusts began discussing a possible extension to the Original Forbearance Agreement to continue discussions and facilitate further diligence regarding MWG's financial condition. On March 1, 2013, the parties entered into the Amended Forbearance Agreement, which, among other things, extends the initial 60-day forbearance period until April 5, 2013. The Amended Forbearance Agreement is on substantially similar terms as the Original Forbearance Agreement; provided, however, that the Amended Forbearance Agreement extends the Forbearance Period and facilitates the reasonable exchange of due diligence among the parties as set forth in greater detail in the Amended Forbearance Agreement. The Debtors believe that entering into and performing under the Amended Forbearance Agreement is a critical component of their restructuring efforts because it affords the PoJo Debtors, Certificate Holders, Owner Trusts, and other stakeholders further time to review, perform due diligence, and analyze restructuring options related to the PoJo Facilities without the threat of imminent litigation. The possibility of a default under the Lease Indentures could impair the Debtors' ability to maintain stability of their operations while simultaneously maintaining their flexibility to consider all potential options associated with the PoJo Facilities. The Amended Forbearance Agreement ensures that the status quo at the PoJo Facilities will continue, thereby allowing ongoing diligence and analysis to continue without the overhang of potential litigation. By avoiding the cost and distraction inherent in such potential litigation, while at the same time continuing the opportunity for a review and dialogue regarding the PoJo Facilities, the Debtors further ensure value preservation for the benefit of all parties in interest. 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 HOLDINGS: Wins OK for Ch. 11 Exit Plan ------------------------------------------------ The prepackaged reorganization plan for online educator Education Holdings 1 Inc. was approved at a confirmation hearing March 7 in U.S. Bankruptcy Court in Delaware. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors voted in favor of the plan before the Chapter 11 filing on Jan. 21. Holders of $69.4 million in senior notes are predicted to have a 75.4% recovery while junior noteholders owed $43.1 million are expected to take home a distribution worth less than 1%, according to the explanatory disclosure statement that the judge on March 7 found was adequate. Sindhu Sundar of BankruptcyLaw360 reports that U.S. Bankruptcy Judge Brendan L. Shannon confirmed Education Holdings' modified Chapter 11 plan filed March 3, saying it can now proceed to implement it. General Electric Capital Corp., its units and other senior secured lenders will be the exit financing lenders. The Framingham, Massachusetts-based company owned the Princeton Review college preparatory business until it was sold in March 2012 to Charlesbank Capital Partners. The sole business now is Penn Foster Education Group Inc. and an affiliate. According to the Bloomberg report, the plan provides for the $36.3 million term loan and revolving credit from General Electric Capital Corp. as agent to be revised after bankruptcy. The $7 million second-lien term loan will be paid in full with new second-lien notes. Holders of the $69.4 million in senior notes are being given $15 million in new senior subordinated notes, $40 million in preferred stock and 30% of the new common stock. Holders of $43.1 million in junior subordinated notes are to receive 70% of the new common stock Falcon Investment Advisors LLC and Sankaty Advisors LLC both hold $56.3 million in senior and junior notes, according to a court filing. About Education Holdings 1 Education Holdings 1, Inc., is a holding company that through its Penn Foster division, operates the oldest and one of the largest distance career schools in the world - generating over 150,000 new enrollments annually for its accredited, career-focused, online degree and vocational programs in the U.S., Canada and over 150 other countries in the world. In March 2012, Education Holdings sold its higher education readiness (HER) division, including the name and brand the Princeton Review, to an affiliate of Charlesbank Capital Partners. Education Holdings, just three years after acquiring using borrowed funds the Penn Foster distance career schools for $170 million, sought Chapter 11 protection (Bankr. D. Del. Case No. 13- 10101) on Jan. 21, 2013, with a bankruptcy-exit plan negotiated with major debt holders. Penn Foster Education Group, Inc. nor Penn Foster Inc. are not included in the Chapter 11 filings. EMG UTICA: Moody's Assigns B2 Rating to Proposed $325MM Loan ------------------------------------------------------------ Moody's Investors Service assigned a B2 Corporate Family Rating to EMG Utica, LLC and a B2 rating to its proposed $325 million senior secured term loan due 2020. This is the first time that Moody's has rated EMG Utica. The outlook is stable. "EMG Utica's B2 CFR incorporates its 100% concentration in the high potential but relatively unproven Utica play, execution risk from rapid infrastructure development, lack of meaningful cash inflows in the near-term, and the single B rating of its core customers who are expected to provide the bulk of volumes to be gathered and processed," commented Saulat Sultan, Moody's Vice President. "However, the rating is supported by significant upfront equity contributions primarily by EMG but also by MarkWest to the JV in the future, primarily fee-based customer contracts, and the two parties' prior success as JV partners in developing midstream assets in Marcellus." EMG Utica, LLC is a holding company formed by energy private equity firm The Energy and Minerals Group to hold its equity interest in MarkWest Utica EMG, LLC (MarkWest Utica EMG or the JV, not rated) -- a joint venture with MarkWest Energy Partners, L.P. (MarkWest, Ba2, stable) to develop significant, integrated midstream infrastructure in the emerging Utica Shale in Ohio. The JV was formed in December 2011 and the two partners announced an amended and restated limited liability agreement (JV agreement) in February 2013 that resulted in EMG increasing its initial capital investment in the Utica Joint Venture from $500 million to $950 million. Proceeds from the new term loan will be used to fund a portion of EMG's capital commitments to the JV, prefund six quarters of construction period interest and create a six month debt service reserve account. The JV will pay distributions to its two owners from available cash (as defined in the partnership agreement) in the ratio of 60% to MarkWest and 40% to EMG Utica, based on certain capital investment thresholds. The security under the proposed term loan is mainly EMG's equity interests in the JV and MarkWest has the right under the JV agreement to acquire EMG's interest at the greater of market value and debt outstanding, in case of a default as defined in the JV agreement. EMG and MarkWest will each have an equal number of seats on the JV's board. The two companies have previously successfully partnered in the development of midstream infrastructure in the Marcellus Shale play through the MarkWest Liberty JV (MarkWest Liberty). Rating Assignments: Corporate Family Rating of B2 Probability of Default Rating of B2-PD $325 million Senior Secured Term Loan due 2020, Rated B2 (LGD 4, 52%) Ratings Rationale: EMG Utica's B2 CFR is constrained by its concentration in the Utica shale which has high potential but is still relatively unproven compared to other more developed plays. There is also meaningful execution risk from the JV's rapid infrastructure development plans (in anticipation of rapid production growth) and lack of meaningful distributions from the JV until late in 2014. The CFR also reflects the single B rating of its core customers, namely Antero Resources LLC (B1, stable), Rex Energy Corporation (B2, stable), and Gulfport Energy Corporation (B3, stable). The rating is supported by significant upfront equity contributions primarily by EMG but also by MarkWest in the future to the JV, prior successful development of midstream assets in Marcellus by these two parties as JV partners, and 100% fee-based existing contracts that limit commodity price risk and come into play as production by the JV's customers ramps up. EMG Utica's ongoing liquidity requirements will be minimal especially given the prefunding of six quarters of construction period interest and creation of a debt service reserve account. There are no mandatory debt amortization requirements until September 2015 other than immediate leverage-based cash flow sweep provisions and EMG Utica has the right but not the obligation to contribute up to 10% of additional capital requirements of the JV after certain capital investment thresholds are met. The new term loan is being issued by EMG Utica which is a holding company that owns EMG's equity interests in the JV. Consequently, any debt issued at the JV level (including trade payables) will be structurally senior to the proposed debt. The JV agreement allows for relatively minimal debt at the JV level, thereby limiting the amount of structurally senior debt. The B2 rating on the term loan reflects both the overall probability of default of EMG Utica, to which Moody's had assigned a Probability of Default of B2-PD, and a loss given default of LGD 4 (52%) under Moody's Loss Given Default Methodology. The stable outlook is based on Moody's expectation that the JV will execute its business plan and achieve its targeted operational milestones and financial metrics. Moody's could consider a ratings upgrade if the JV consistently meets or exceeds its operational and financial targets for a sustained period and debt / EBITDA ratio falls below 6.0x. A significant delay in facilities coming online or a meaningful cost overrun could result in a ratings downgrade. Moody's could also take a negative ratings action if development in Utica by its core customers slows down (whether due to deterioration in return economics or for other reasons) or if their credit profile weakens meaningfully. Given its status as a major partner to the JV, a change in MarkWest's credit ratings or outlook could also lead to a negative ratings action. Material changes at the JV level leading to adverse credit implications for EMG Utica could also result in a ratings downgrade. The principal methodology used in rating EMG Utica was the Global Midstream Energy 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. EMG Utica, LLC is headquartered in Houston, Texas. EMPRESAS INTEREX: Plan Outline Hearing Scheduled for March 27 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Puerto Rico will convene a hearing on March 27, 2013, at 9 a.m., to consider adequacy of information in the Disclosure Statement explaining Empresas Interex Inc.'s Chapter 11 Plan. Objections, if any, are due 14 days prior to the hearing. As reported in the TCR on Feb. 25, 2013, under the Plan, DF Services LLC, owed $6,648,614 on a secured claim (Class 1) is impaired but will have a 100% recovery. The claimant will receive payment in cash and in full 100% of its claim commencing with the sale of the seventh residence of those pending to be sold, and the necessary subsequent residences to be sold at the rate of 70% from the gross proceeds of the sale of each such residences, until full payment. DF will retain a second mortgage for $10,000,000 on the residential housing development, subordinated and subject to that for $700,000 in favor of Interamerican University of Puerto Rico. Other secured creditors, namely Banco Popular de Puerto Rico, owed $1,367,037 on a secured claim (Class 2); Oriental Bank, owed $300,000 (Class 3), and the Center for Collection of Municipal Income, owed $86,697 (Class 4), are also impaired but will receive a 100% recovery. BPPR will receive a promissory note with an estimated balance of $183,296 as of Nov. 30, 2011, line of credit for $600,000, and secured mortgage note for $583,741. Holders of general unsecured claims (Class 5) are impaired but will have 100% recovery. They will be paid in full satisfaction of their claims through 60 consecutive monthly installments, without interest. They will recover 9% during the first yea, 12% during the following second and third years, 25% during the fourth year, with the remaining balance of 42% during the fifth year. Shareholders (Class 6) are unimpaired under the Plan. "The Debtor believes that the Plan provides the quickest recovery to Creditors and will maximize the return thereto on their Claims. ACCORDINGLY, THE DEBTOR URGES ALL CREDITORS TO VOTE IN FAVOR OF THE PLAN," according to the Disclosure Statement. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Empresas_Interex_DS.pdf About Empresas Interex Inc. San Juan, Puerto Rico-based Empresas Interex Inc. is engaged in the development, construction, and lease of real estate. One of the Debtor's construction project is known as Ciudad Atlantis at Hato Bajo Ward, Arecibo, Puerto Rico. Empresas Interex filed for Chapter 11 bankruptcy (Bankr. D.P.R. Case No. 11-10475) on Dec. 7, 2011. Bankruptcy Judge Mildred Caban Flores presides over the case. The company disclosed $11,412,500 in assets and $9,335,561 in liabilities. ENDEAVOUR INTERNATIONAL: Incurs $6.5-Mil. Net Loss in 4th Quarter ----------------------------------------------------------------- Endeavour International Corporation reported a net loss of $6.45 million on $97.61 million of revenue for the quarter ended Dec. 31, 2012, as compared with a net loss of $44.64 million on $16.63 million of revenue for the same period during the prior year. For the year ended Dec. 31, 2012, the Company incurred a net loss of $126.22 million on $219.05 million of revenue, as compared with a net loss of $130.99 million on $60.09 million of revenue during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $1.43 billion in total assets, $1.29 billion in total liabilities, $43.70 million in series C convertible preferred stock and $99.43 million in stockholders' equity. "In 2012, the Company undertook two major development projects and a sizable acquisition resulting in increased oil production and reserves in the U.K. North Sea. Although the path to growth was challenging, we were able to manage through a series of complex business transactions to close on the additional working interest at Alba and bring the Bacchus development on-line. We remain confident that Rochelle production will be on-line soon demonstrating the quality of this important asset," said William L. Transier, chairman, chief executive officer and president. "Our ability to increase our liquidity quickly shows the perseverance of our management team to handle unexpected events for the benefit of all stakeholders." A copy of the press release is available for free at: http://is.gd/Igejzj About Endeavour International Houston-based Endeavour International Corporation (NYSE: END) (LSE: ENDV) is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the United States. * * * As reported by the TCR on March 5, 2013, Moody's Investors Service downgraded Endeavour International Corporation's Corporate Family Rating to Caa3 from Caa1. Endeavour's Caa3 CFR reflects its weak liquidity, small production and proved reserve scale, geographic concentration and the uncertainties regarding its future performance given the inherent execution risks related to its offshore North Sea operations for a company of its size. In the Feb. 22, 2013, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Houston, Texas-based Endeavour International Corp. (Endeavour) to 'CCC+' from 'B-'. The rating action reflects S&P's expectation that Endeavour could have insufficient liquidity to meet its needs due to the delay in production from its Rochelle development. EZE CASTLE: Moody's Assigns First-Time B2 CFR; Outlook is Stable ---------------------------------------------------------------- Moody's Investors Service assigned ratings to Eze Castle Software, Inc., including a B2 Corporate Family Rating, B1 to the 1st Lien debt and Caa1 to the 2nd Lien debt. The ratings outlook is stable. The term loan proceeds and equity provided by affiliates of private equity sponsor Texas Pacific Group will be used to acquire Eze Software from ConvergEx. This is the first time Moody's has rated Eze Software debt. Ratings Rationale: The B2 CFR reflects Moody's expectation for Eze Software's high initial 6.6 times debt to EBITDA (all financial metrics reflect Moody's standard adjustments) to decline slowly but steadily. At least 4% revenue growth in 2013 and moderate EBITDA expansion on steady profit margins should drive the deleveraging. Financial leverage is high for the B2 rating category, so there is limited flexibility for any operational interruption. Eze Software's history of high customer subscription renewal, good liquidity and expectations of at least $30 million in annual free cash flow provides some support. Deleveraging is likely to be slow as acquisitions are possible, and there is the ongoing risk of cash distributions to equity holders. The stable ratings outlook reflects Moody's expectations for uninterrupted revenue and EBITDA growth to drive steady debt to EBITDA improvements and free cash to debt of at least 5% over the next 12 to 18 months. The ratings could be downgraded if client retention declines, there is pricing pressure or cost management issues, Moody's expects profitability growth to slow, or if Moody's expects debt to EBITDA to remain above 6 times or free cash flow to debt to be below 4%. The ratings could be raised if revenue grows substantially, and profit margins and free cash flow generation expand, leading Moody's to expect debt to EBITDA below 5 times and free cash flow to debt of at least 10%. The following ratings (assessments) were assigned: Corporate Family Rating, B2 Probability of Default Rating, B2-PD Senior Secured 1st Lien Revolving Credit Facility due 2018, B1 (LGD3, 33%) Senior Secured 1st Lien Term Loan due 2020, B1 (LGD3, 33%) Senior Secured 2nd Lien Term Loan due 2021, Caa1 (LGD5, 87%) The principal methodology used in this rating was Global Software Industry published in October 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. Eze Software provides OMS, EMS, portfolio management and accounting software and services to hedge funds, other institutional investors and brokerage firms in the U.S., Europe and Asia. The company is being purchased by affiliates of TPG Capital. Moody's expects 2013 revenue of at least $230 million. FIRST PLACE: Chapter 7 Conversion Sought ---------------------------------------- BankruptcyData reported that First Place Financial filed with the U.S. Bankruptcy Court a motion to convert its Chapter 11 reorganization case to a liquidation case under Chapter 7. The motion explains, "Given that all of the Debtor's primary creditors received direct payment in satisfaction of their claims, pursuant to the terms of the Amended [Asset Purchase Agreement], and the Debtor has no funds to distribute under a chapter 11 plan, the Debtor determined that it would be in the best interest of all creditors and stakeholders to convert this case to a proceeding under chapter 7 of the Bankruptcy Code," according to the BankruptcyData report. The Court scheduled a March 27, 2013 hearing on the matter. About First Place First Place Financial Corp. is a $3.1 billion financial services holding company, based in Warren, Ohio. The First Place bank subsidiary isn't in bankruptcy. First Place filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-12961) in Delaware on Oct. 28, 2012, to sell its bank unit to Talmer Bancorp, Inc., absent higher and better offers. The Debtor declared $175 million in total assets and $65.6 million in total liabilities as of Oct. 26, 2012. The Debtor has tapped Patton Boggs LLP and The Bayard Firm, PA as legal counsel, and FTI Consulting, Inc., as financial advisor. Donlin, Recano & Company, Inc. -- http://www.donlinrecano.com/-- is the claims and notice agent. The Official Committee of Trust Preferred Securities tapped to retain Kirkland & Ellis as counsel; Klehr Harrison Harvey Branzburg as co-counsel; Holdco Advisors as financial advisor; and Rothschild as investment banker and financial advisor. FRENCH QUARTER: Court Rules in Lawsuit Against Principal -------------------------------------------------------- Nevada District Judge Robert C. Jones denied motions filed by both plaintiffs and the defendant in the lawsuit styled, OSCAR RENTERIA and DENISE RENTERIA, individually and in their capacities as Co- Trustees of the RENTERIA FAMILY TRUST, Plaintiffs, v. EUGENE CLEVELAND CANEPA, an individual, Defendant, No. 3:11-cv-00534-RCJ- CWH (D. Nev.). Before the Court are the Plaintiffs' Motion for Attorney's Fees, Motion for Status Conference, and Motion to File Surreply; and the Defendant's Motion to Set Aside Judgment. The lawsuit involves the Plaintiffs' attempt to collect payment on 2006 loans to French Quarter, Inc., and its principal, the defendant Eugene Cleveland Canepa. The parties agreed the aggregate principal amount on the loans was $845,000. On April 9, 2007, the Plaintiffs demanded that the Defendant pay the notes. The Plaintiffs allege that the Defendant failed to pay the notes, amounting to a default under the notes' contracts and triggering a total of $44,250 in late fees. The Defendant denies these allegations. French Quarter filed a voluntary Chapter 11 petition on Aug. 3, 2007. In August 2007, the Plaintiffs, Defendant, French Quarter, and others executed a settlement agreement resolving disputes between French Quarter, its creditors, and other parties. The settlement agreement gives the Plaintiffs "an allowed unsecured claim against [French Quarter's estate] in the amount of $887,000 . . . without prejudice to [Plaintiffs] claiming any pre- or postpetition Interest and attorneys fees as allowed by the Bankruptcy Code." The agreement further explains that "[t]he parties hereto agree, and [Defendant] further warrants and represents, that [Defendant] was a co-maker on [Plaintiffs' notes] in the amount of $845,000 and that these loans are valid and binding." Finally, the agreement provides that "[Plaintiffs] expressly reserve[] all rights and claims against [Defendant] for the full balance of [Plaintiffs' notes] including without limitation, unpaid principal, interest and attorneys fees." The settlement was approved by the Nevada Bankruptcy Court on Sept. 8, 2008. On Nov. 30, 2008, the Plaintiffs filed a post-settlement claim against French Quarter, seeking a total of $1,158,216.48 in principal charges, interest accrued through Aug. 3, 2007, late charges up to that date, and attorneys' fees. On Sept. 30, 2009, the Defendant objected to the Plaintiffs' claim against French Quarter, objecting to the amount of the attorneys' fees as well as the accrual of postpetition interest. In May 2010, the bankruptcy estate of French Quarter distributed $354,800 to the Plaintiffs. The Plaintiffs allege they applied this amount to the notes, covering the accrued interest up to May 2010 as well as $4,146.85 of the late fees, leaving approximately $38,103.15 in late fees. The interest accrued on the notes from May 2010 through July 2011 is $115,767. The Plaintiffs allege that the Defendant owes them $1,003,017, reflecting the principal, $845,000, the interest accrued from May 2010 through July 2011, $115,767, remaining late fees, $38,103, and attorneys' fees, $4,147. The Plaintiffs filed their Complaint on July 26, 2011. The Defendant filed his Answer on Sept. 19, 2011. On Oct. 12, the Plaintiffs filed a Motion for Judgment on the Pleadings. The Defendant failed to oppose the Motion. On July 3, 2012, the Court entered an Order granting the Plaintiffs' Motion for Judgment on the Pleadings on the basis of breach of contract, and judgment was entered. The Plaintiffs were awarded the full contractual amount of $845,000, plus $115,767 in interest accrued between May 2010 and July 2011, and $38,103 in late fees. On July 17, 2012, the Plaintiffs filed a Motion for Attorney's Fees, which was unopposed. On Nov. 20, the Defendant filed a Motion to Set Aside Judgment. On Dec. 7, the Plaintiffs opposed the Motion to Set Aside Judgment. On Dec. 14, the Defendant filed a reply in support of the Motion to Set Aside Judgment. A copy of the Court's March 5, 2013 Order is available at http://is.gd/yjyacjfrom Leagle.com. French Quarter Inc. operates a bar, Men's Club -- http://www.mensclublv.com/-- in Las Vegas. It filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 07-14813) on Aug. 3, 2007, estimating $1 million to $100 million in both assets and debts. Bankruptcy Judge Linda B. Riegle oversees the case. Jeffrey R. Sylvester, Esq., at Sylvester & Polednak, Ltd., served as the Debtor's counsel. FRONTIER BANK: Closed; HeritageBank of The South Assumes Deposits ----------------------------------------------------------------- Frontier Bank of LaGrange, Ga., was closed on March 8, 2013, by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with HeritageBank of the South of Albany, Ga., to assume all of the deposits of Frontier Bank. The nine branches of Frontier Bank will reopen during their normal business hours as branches of HeritageBank of the South. Depositors of Frontier Bank will automatically become depositors of HeritageBank of the South. Deposits will continue to be insured by the FDIC. Customers of Frontier Bank should continue to use their existing branch until they receive notice from HeritageBank of the South that it has completed systems changes to allow other HeritageBank of the South branches to process their accounts as well. As of Dec. 31, 2012, Frontier Bank had around $258.8 million in total assets and $224.1 million in total deposits. In addition to assuming all of the deposits of the failed bank, HeritageBank of the South agreed to purchase essentially all of the assets. Customers with questions about the transaction should call the FDIC toll-free at 1-866-674-8944. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/frontier-ga.html The FDIC estimates that the cost to the Deposit Insurance Fund will be $51.6 million. Compared to other alternatives, HeritageBank of the South's acquisition was the least costly resolution for the FDIC's DIF. Frontier Bank is the fourth FDIC- insured institution to fail in the nation this year, and the first in Georgia. The last FDIC-insured institution closed in the state was Hometown Community Bank, Braselton, on Nov. 16, 2012. GARY STANCIL: Ross Dembling et al. Dismissed From Lawsuit --------------------------------------------------------- In the case, GARY STANCIL, Plaintiff, v. BRADLEY INVESTMENTS, LLC, et al., Defendants, Adv. Proc. No. 12-10006 (Bankr. D.D.C), the Bankruptcy Court previously dismissed the claims against Ross Dembling, Lawrence Posner, Corinna Posner, Joseph Zytnick, and P. Hannah Davis Zytnick -- with defendant Bradley Investments LLC, referred to in the pleadings as the "Lien Holders" -- and gave Mr. Stancil 21 days to file an amended complaint. The court also gave Mr. Stancil 14 days to show cause why the claim for willful violation of the automatic stay against Bradley Investments ought not be dismissed on the same grounds as those upon which the claims against the other Lien Holders were dismissed. Mr. Stancil filed an amended complaint but failed to plead that the noteholder (Greg Friedman) or trustee under the deed of trust (Susan Friedman) was the Lien Holders' agent. Moreover, Mr. Stancil did not show cause why the claim against Bradley Investments ought not be dismissed. In a Feb. 27, 2013 Memorandum Decision available at http://is.gd/mlV5JNfrom Leagle.com, Bankruptcy Judge S. Martin Teel, Jr., dismissed the adversary proceeding as to Ross Dembling, Lawrence Posner, Corinna Posner, Joseph Zytnick, P. Hannah Davis Zytnick, and Bradley Investments LLC. The defendants are entitled to finality with respect to their dismissal from the adversary proceeding, the judge said. Gary Stancil filed for Chapter 11 bankruptcy (Bankr. D.D.C. Case No. 11-00747) on Oct. 6, 2011. GATEHOUSE MEDIA: Incurs $30.3 Million Net Loss in Fiscal 2012 ------------------------------------------------------------- GateHouse Media, Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $30.33 million on $490.96 million of total revenues for the year ended Dec. 30, 2012, as compared with a net loss of $22.22 million on $516.96 million of total revenue for the year ended Jan. 1, 2012. The Company incurred a net loss of $26.64 million on $547.81 million of total revenues for the year ended Dec. 31, 2010. The Company's balance sheet at Dec. 30, 2012, showed $469.76 million in total assets, $1.30 billion in total liabilities, and a $834.15 million total stockholders' deficit. Bankruptcy Warning "Our ability to make payments on our indebtedness as required depends on our ability to generate cash flow from operations in the future. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. "There can be no assurance that our business will generate cash flow from operations or that future borrowings will be available to us in amounts sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. Currently we do not have the ability to draw upon our revolving credit facility which limits our immediate and short-term access to funds. If we are unable to repay our indebtedness at maturity we may be forced to liquidate or reorganize our operations and business under the federal bankruptcy laws." A copy of the Form 10-K is available for free at: About GateHouse Media GateHouse Media, Inc. -- http://www.gatehousemedia.com/-- headquartered in Fairport, New York, is one of the largest publishers of locally based print and online media in the United States as measured by its 97 daily publications. GateHouse Media currently serves local audiences of more than 10 million per week across 21 states through hundreds of community publications and local Web sites. GMX RESOURCES: S&P Lowers Corporate Credit Rating to 'D' -------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on U.S.-based exploration and production company GMX Resources Inc. to 'D' from 'CCC', indicating a default. S&P also lowered the issue-level rating on GMX's senior secured notes due 2017 to 'D' from 'CCC-'. At the same time S&P revised the recovery rating on GMX's senior secured notes due 2017 to '4', indicating S&P's expectation of average recovery (30% to 50%) in the event of a payment default, from '5'. "The downgrades follow GMX's March 4 announcement that it failed to make the scheduled interest payment on its senior secured second-priority notes due 2018," said Standard & Poor's credit analyst Paul Harvey. (These notes are not rated.) The company continues to review possible financial solutions to address its liquidity needs, which include a possible restructuring of its debt. The improved recovery score reflects the use of GMX's Dec. 31, 2012, SEC PV-10 calculation, S&P's valuation of $128.4 million reflected the removal of GMX's Haynesville/Bossier proved undeveloped reserves, which had a negative value of about $48 million. At the request of GMX we will withdraw all ratings following the rating action. HAWKER BEECHCRAFT: To Protest $427.5-Mil. Air Force Contract ------------------------------------------------------------ Brian Mahoney of BankruptcyLaw360 reported that the successor company to the bankrupt Hawker Beechcraft Corp. said Friday that it plans to formally protest the U.S. Air Force's $427.5 million contract for light air support to a Sierra Nevada Corp. venture, saying it was "perplexed" that its lower bid was unsuccessful. The report related that Beechcraft Corp. said it had met with Air Force officials since losing the contract last week but wasn't satisfied that the contract, meant to provide light air support aircraft to the Afghan air force, had been awarded fairly. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan will give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal has support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The Official Committee of Unsecured Creditors selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee's financial advisor is FTI Consulting, Inc. HAWKER BEECHCRAFT: Blind Plaintiff Has Green Light to Hire Counsel ------------------------------------------------------------------ Magistrate Judge Kenneth G. Gale in Kansas revised his prior order and granted the request of Harold Nyanjom to appoint counsel to prosecute his lawsuit against Hawker Beechcraft Corp. The Court previously granted Mr. Nyanjom's motion to proceed in forma pauperis, thus establishing his inability to afford counsel. Since the entry of the Court's initial order denying appointment of counsel, Hawker Beechcraft has filed it's "Suggestion of Bankruptcy," notifying Mr. Nyanjom that it has filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court, Southern District of New York. According to the magistrate judge, this brings into play fairly complicated legal rules relating to litigation involving a party that is currently in -- or is coming out of -- bankruptcy. While Mr. Nyanjom might well be able to present the facts of his case at a trial without assistance of an attorney, the magistrate judge said the procedural issues leading up to any determination of the merits of the case are more complicated and difficult for a pro se party to navigate. In addition, Mr. Nyanjom has now informed the Court that he is blind. "This obviously complicates his ability to conduct the necessary legal research and serves as a basis to distinguish Plaintiff from other pro se litigants," the magistrate judge noted. "The Court is not finding that Plaintiff's blindness, in and of itself, entitles him to appointment of counsel. Rather, the Court has various types of assistance available for litigants with disabilities. Taken in conjunction with Defendant's bankruptcy, however, the Court finds that the appointment of counsel in this matter is appropriate." The case before the District Court is, HAROLD M. NYANJOM, Plaintiff, v. HAWKER BEECHCRAFT CORP., Defendant, Case No. 12-1438-JTM-KGG (D. Kan.). A copy of the magistrate judge's March 6, 2013 order is available at http://is.gd/50Mcb5from Leagle.com. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft reported a net loss of $631.90 million on $2.43 billion of sales in 2011, compared with a net loss of $304.30 million on $2.80 billion of sales in 2010. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012. Hawker is 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet at Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative is Kirkland & Ellis LLP, its financial advisor is Perella Weinberg Partners LP and its restructuring advisor is Alvarez & Marsal. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Sidley Austin LLP serves as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. serves as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represents an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represents an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- hold claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, is represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case has selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee's financial advisor is FTI Consulting, Inc. Hawker and its affiliates filed for bankruptcy, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The plan proposed to give 81.9% of the new stock to holders of $1.83 billion of secured debt, while 18.9% of the new shares are for unsecured creditors. The proposal had the support from 68% of secured creditors and holders of 72.5% of the senior unsecured notes. The pre-negotiated Plan was filed June 30, 2012. In July 2012, Hawker disclosed it was in exclusive talks with China's Superior Aviation Beijing Co. for the purchase of Hawker's corporate jet and propeller plane operations out of bankruptcy for $1.79 billion. In October 2012, Hawker unveiled that those talks have collapsed amid concerns a deal with Superior wouldn't pass muster with a U.S. government panel and other cross-cultural complications. Sources told The Wall Street Journal that Superior encountered difficulties separating Hawker's defense business from those units in a way that would make both sides comfortable the deal would get U.S. government clearance. The sources told WJS the defense operations were integrated in various ways with Hawker's civilian businesses, especially the propeller plane unit, in ways that proved difficult to untangle. Thereafter, Hawker said it intends to emerge from bankruptcy as an independent company. On Oct. 29, 2012, Hawker filed a modified reorganization plan and disclosure materials. Hawker said the plan was supported by the official creditors' committee and by a "substantial majority" of holders of the senior credit and a majority of holders of senior notes. Hawker said it will either sell or close the jet-manufacturing business. The revised plan still offers 81.9% of the new stock in return for $921 million of the $1.83 billion owing on the senior credit. Unsecured creditors are to receive the remaining 18.9% of the new stock. Holders of the senior credit will receive 86% of the new stock. The senior credit holders are projected to have a 43.1% recovery from the plan. General unsecured creditors' recovery is a projected 5.7% to 6.3%. The recovery by holders of $510 million in senior notes is predicted to be 9.2% to 10%. The modified Plan was approved by the Bankruptcy Court Feb. 1, 2013, and became effective Feb. 15. Hawker Beechcraft changed its name to Beechcraft Corporation. HERCULES OFFSHORE: Board OKs Equity Grants for Executive Officers ----------------------------------------------------------------- The Compensation Committee of the Board of Directors of Hercules Offshore, Inc., approved equity grants for certain of its executive officers. Pursuant to the Company's Policy Regarding the Granting of Equity-Based Compensation Awards, the Committee is authorized to approve annual equity grants at its meeting during the first or second quarter of each year. The Annual Equity Grants were made pursuant to the Company's 2004 Amended and Restated Long-Term Incentive Plan to each of John T. Rynd, chief executive officer and president; Stephen M. Butz, executive vice president and chief financial officer; James W. Noe, executive vice president; Terrell L. Carr, senior vice president, Worldwide Drilling Operations; and Todd A. Pellegrin, senior vice president, Worldwide Liftboat Operations. Each of the executive officers received restricted stock awards, which vest 1/3 per year on each of the first three anniversaries of the grant date, and performance-based restricted stock awards, which vest in full on the third anniversary of the grant date, subject to the achievement of Company performance objectives with respect to two metrics to be measured over the period from Jan. 1, 2013, through Dec. 31, 2015. Threshold, target and maximum performance objectives have been established for each metric, with the officer vesting 50% more shares at the maximum level, 50% fewer shares at the threshold level, with vesting prorated between levels, and no shares will be issued with respect to a particular metric if the threshold performance objective is not met with respect to such metric. The Performance Awards for all of the executive officers other than Mr. Rynd will be paid out with equity, up to the target goal set for each executive officer, with anything above target being paid out in cash in an amount equal to the value of the equity that would be issuable for the achievement of such performance metrics. For Mr. Rynd, the Performance Award will be paid out with equity up to the target goal set for him, with anything above target being paid out in cash on a prorated basis between pre- determined cash amounts for the target ($50,000) and maximum levels ($900,000). At the target level, the Performance Awards and the Restricted Stock Awards are 70% and 30%, respectively, of the total target grant for Mr. Rynd, and 55% and 45%, respectively, of the total target grant for the other executive officers. The number of shares issuable to each of the executive officers if the target objectives are achieved with respect to each metric is as set forth below: Restricted Performance Total Executive Officer Stock Award Award(Target) Target Grant ----------------- ----------- ------------- ------------ John T. Rynd 97,566 202,434 300,000 James W. Noe 49,779 60,840 110,619 Stephen M. Butz 49,779 60,840 110,619 Terrell L. Carr 32,356 39,547 71,903 Todd A. Pellegrin 18,252 22,308 40,560 The Committee also approved the payouts for the 2012 performance equity grants, which paid out at the threshold level for the available days metric and at the maximum level for the stock price metric. Director Resignation Policy The Board of Directors of the Company, upon recommendation of the Nominating and Governance Committee, recently approved an amendment to the Company's Corporate Governance Guidelines. The Corporate Governance Guidelines were amended to provide that a director who receives a greater number of votes "withheld" than votes "for" his or her election in an uncontested election will promptly tender his or her resignation to the Board for consideration in accordance with the procedures set forth in the Corporate Governance Guidelines. The Nominating and Governance Committee will then make a recommendation to the Board to accept or reject the resignation offer. The Board will then act on the tendered resignation, taking into account the recommendation of the Nominating and Governance Committee, and will disclose its decision regarding the tendered resignation and, if the Board elects not to accept the resignation, the primary rationale for that decision. The Corporate Governance Guidelines can be found in the Corporate Governance section of the Company's Web site at http://www.herculesoffshore.com/ 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. HERTZ GLOBAL: Share Repurchase Plan No Impact on Moody's B1 CFR --------------------------------------------------------------- Hertz Global Holdings, Inc., parent of The Hertz Corporation, plan to repurchase approximately $472 million worth of its common shares is a negative credit development, says Moody's Investors Service. Nevertheless, because the transaction is not expected to materially weaken the company's financial metrics and liquidity profile, Hertz's B1 Corporate Family Rating, as well as the Ba1 rating of its first lien term loan, B2 rating of its senior unsecured debt and SGL-3 Speculative Grade Liquidity rating, are unaffected at this time. Hertz's rating outlook remains stable. HOSTESS BRANDS: U.S. Trustee Seeks Holdback on Professional Fees ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that when Hostess Brands Inc. comes to bankruptcy court on March 19 for approval of about $8.6 million in professional fees covering the last quarter of 2012, the U.S. Trustee will ask the judge to hold back payment of some of the fees until the outcome of the case is better known. The report relates that in papers filed this week, the Justice Department's bankruptcy watchdog notes that the opening bids for most Hostess assets total $856.3 million, not enough to pay $1.04 billion in secured debt. According to the report, the U.S. Trustee says it's therefore not clear whether there will be cash left over for payment of expenses of the Chapter 11 effort or claims entitled to priority. The fees to be reviewed on March 19 cover the period when Hostess was struck by the bakery workers' union and forced to begin liquidating. About Hostess Brands Founded in 1930, Irving, Texas-based Hostess Brands Inc., is known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder. Hostess has 36 bakeries, 565 distribution centers and 570 outlets in 49 states. Hostess filed for Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Hostess Brands disclosed assets of $982 million and liabilities of $1.43 billion as of the Chapter 11 filing. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess has hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, are representing the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November 2012 opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process was expected to be completed in one year. At an auction Feb. 28, 2013, Flowers Foods Inc. won the majority of Hostess's bread-making business, including its Wonder brand, when no offers surfaced to challenge a $360 million bid. Mexico City-based Grupo Bimbo topped Flowers' $30 million opening offer for the Beefsteak rye-bread brand, with a winning offer of $31.9 million. March 13 will be the auction for the snack cake business where the opening bid of $410 million cash will come from affiliates of Apollo Global Management LLC and C. Dean Metropoulos & Co. The major sales will close out on March 15 with an auction to learn if $56.35 million is the most to be earned from selling some of the remaining bread businesses and the Drakes cakes operation. HOVNANIAN ENTERPRISES: Incurs $11.3-Mil. Loss in Fiscal Q1 ---------------------------------------------------------- Hovnanian Enterprises, Inc., reported a net loss of $11.31 million on $358.21 million of total revenues for the three months ended Jan. 31, 2013, as compared with a net loss of $18.26 million on $269.59 million of total revenues for the same period during the prior year. For the 12 months ended Oct. 31, 2012, the Company reported a net loss of $66.19 million on $1.48 billion of total revenues, compared with a net loss of $286.08 million on $1.13 billion of total revenues for the same period a year ago. The Company's balance sheet at Jan. 31, 2013, showed $1.58 billion in total assets, $2.06 billion in total liabilities and a $481.23 million total deficit. "Provided there are no adverse changes in current market conditions, we anticipate our deliveries, revenues and gross margin will increase in fiscal 2013 compared with fiscal 2012 with the greatest improvement in these metrics expected to occur during the second half of the fiscal year," said Ara K. Hovnanian, chairman of the Board, president and chief executive officer. "In addition, we are optimistic that the recent increases in net contracts we have reported will continue and could lead to our best spring selling season in years. Given the size of our contract backlog, the average gross margin on homes currently in contract backlog and assuming that market conditions remain stable, we are pleased to project our return to profitability for fiscal 2013. It has been a long and difficult cycle, but we finally see the benefits of the many steps we have taken to prepare ourselves for this inevitable market upturn." A copy of the press release is available for free at: http://is.gd/eluojF About Hovnanian Enterprises Red Bank, New Jersey-based Hovnanian Enterprises, Inc. (NYSE: HOV) -- http://www.khov.com/-- founded in 1959 by Kevork S. Hovnanian, is one of the nation's largest homebuilders with operations in Arizona, California, Delaware, Florida, Georgia, Illinois, Kentucky, Maryland, Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian Homes, Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes, Oster Homes and CraftBuilt Homes. As the developer of K. Hovnanian's Four Seasons communities, the Company is also one of the nation's largest builders of active adult homes. * * * As reported by the TCR on Nov. 7, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Hovnanian Enterprises Inc. to 'CCC+' from 'CCC-' and removed it from CreditWatch positive. "We raised our corporate credit rating to reflect operating performance that is better than we expected, resulting in narrowing pretax losses," said credit analyst George Skoufis. "It also reflects improved liquidity following the recent debt issuances that will extend the bulk of the company's 2016 maturities to 2020 and reduce its overall interest burden." In the Dec. 11, 2012, edtiiton of the TCR, Fitch Ratings has affirmed the ratings for Hovnanian Enterprises, Inc. (NYSE: HOV), including the company's Issuer Default Rating (IDR), at 'CCC'. The rating for HOV is influenced by the company's execution of its business model, land policies, and geographic, price point and product line diversity. The rating additionally reflects the company's liquidity position, substantial debt and high leverage. Hovnanian carries 'Caa2' corporate family and probability of default ratings from Moody's. Moody's said in April 2012 that the Caa2 corporate family rating reflects Hovnanian's elevated debt leverage weak gross margins, continued operating losses, negative cash flow generation, and Moody's expectation that the conditions in the homebuilding industry over the next one to two yeas will provide limited opportunities for improvement in the company's operating and financial metrics. In addition, the ratings consider Hovnanian's negative net worth position, which Moody's anticipates will be further weakened by continuing operating losses and impairment charges. As a result, adjusted debt leverage, currently standing at 149%, is likely to increase further. IMAGINE FULFILLMENT: Court Rules on Summary Judgment Bids --------------------------------------------------------- In the case, IMAGINE FULFILLMENT SERVICES, LLC, Plaintiff, v. DC MEDIA CAPITAL, LLC, Defendant, Adv. Proc. Case No. 12-ap-01514 (Bankr. C.D. Cal.), Los Angeles Bankruptcy Judge Julia W. Brand ruled on (1) Imagine Fulfillment Services, LLC's Motion for Partial Summary Judgment, or in the Alternative, Summary Adjudication of Facts; and (2) DC Media Capital LLC's Motion for Partial Summary Judgment as to Second and Fifth Affirmative Defenses. Imagine Fulfillment seeks summary judgment that three prepetition transfers to DC Media are avoidable preferences under 11 U.S.C. Section 547(b). DC Media seeks summary judgment that the transfers are not avoidable because the defenses set forth in section 547(c)(2) and section 547(c)(9) apply. Prior to the Petition Date, a dispute arose between Imagine Fulfillment and DC Media. DC Media sued IFS in Los Angeles Superior Court (Case No. BC408418) for, among other things, breach of contract and damages. On Dec. 16, 2011, the Superior Court entered judgment in the State Court Action in favor of DC Media and against Imagine Fulfillment for, among other things, breach of contract and damages, in the amount of $2,356,546, plus prejudgment interest, attorneys' fees and costs. The Judgment includes pre-judgment interest of $967,776, attorneys' fees of $541,946.50 and costs of $29,556.42 for a total of $3,997,223. On Dec. 27, 2011, DC Media filed a Notice of Judgment Lien with the California Secretary of State. On Jan. 24, 2012, DC Media recorded an Abstract of Judgment with the Los Angeles County Recorder. On Feb. 7, IFS filed a notice of appeal of the Judgment. This appeal was pending as of the Petition Date and remains pending. On March 5, 2012, DC Media caused the Los Angeles County Sheriff's Office to levy upon Imagine Fulfillment's Wells Fargo bank account. The Sheriff seized $81,196, which the Sheriff continues to hold and has not turned over to DC Media. As of the Petition Date, Imagine Fulfillment had not satisfied the Judgment. DC Media was a creditor of Imagine Fulfillment during the period from Dec. 16, 2011, through March 25, 2012. During this period, Imagine Fulfillment did not own real property. Both Imagine Fulfillment and DC Media have provided evidence regarding Imagine Fulfillment's solvency during the 90 days before the Petition Date. Imagine Fulfillment introduced evidence showing the value of its assets and liabilities as stated on its balance sheet at the time of each of the transfers at issue. Date Value of Assets and Liabilities ---- ------------------------------- December 27, 2011 Assets $472,217 Liabilities $780,315 December 31, 2011 Assets $683,802 Liabilities $871,900 January 24, 2012 Assets $596,969 Liabilities $941,968 March 5, 2012 Assets $653,929 Liabilities $951,770 March 31, 2012 Assets $908,227 Liabilities $1,176,256 In addition, Imagine Fulfillment contends that the Judgment is a liability that, when added to its balance sheet liabilities, establishes its insolvency at each of the relevant times. DC Media introduced an appraisal of certain of Imagine Fulfillment's assets. DC Media also introduced evidence in the form of Imagine Fulfillment's business records to show that Imagine Fulfillment's cash in its checking account as of Dec. 27, 2011, was $231,965 instead of negative $65,151, as stated on Imagine Fulfillment's balance sheet and that its accounts receivable as of Dec. 27, 2011 was $413,650 instead of $394,779 as provided in the balance sheet. This results in an asset value of Imagine Fulfillment's assets as of Dec. 27, 2011 of $788,204, according to DC Media. In addition, DC Media presented evidence that Imagine Fulfillment overstated its accounts payable by $24,291 and its customer depositions by $29,191 and asserts that Imagine Fulfillment's accrued state income tax liabilities by $12,590 should not be included in the calculation of Imagine Fulfillment's liabilities. From this, DC Media asserts that Imagine Fulfillment was solvent on Dec. 27, 2011 and that a triable issue of material fact exists with respect to Imagine Fulfillment's solvency. Imagine Fulfillment seeks summary judgment that (i) the filing of the Notice of Judgment Lien with the California Secretary of State -- Transfer One -- (ii) the recording of the Abstract of Judgment with the Los Angeles County Recorder -- Transfer Two -- and (iii) the Sheriff's levy on IFS bank account -- Transfer Three -- are avoidable preferences under section 547(b). DC Media argues that the Court must deny Imagine Fulfillment's Motion because genuine issues of material fact remain as to (1) whether Transfer One was made during the 90-day window, (2) whether IFS was insolvent on the transfer dates, and (3) whether DC Media will receive more from the transfers than it would receive in a hypothetical chapter 7 liquidation. DC Media seeks summary judgment that (1) Transfer One is not avoidable pursuant to section 547(c)(2) because the filing of the Notice of Judgment Lien was made in the ordinary course of business and according to ordinary business terms, and (2) Transfer Two is not avoidable pursuant to section 547(c)(9) because Imagine Fulfillment owns no real property, and therefore the Abstract of Judgment is less than the $5,850 minimum amount that Imagine Fulfillment may recover as a preferential transfer. In its ruling, the Court granted summary judgment as to each element of Transfer One, other than the last element, that the transfer allows DC Media to receive more than it would in a hypothetical chapter 7 liquidation. The Court denied Imagine Fulfillment's Motion with respect to Transfer Two. The Court granted summary judgment as to Transfer Three. The Court denied DC Media's Motion. A copy of the Court's March 6, 2013 Memorandum Of Decision is available at http://is.gd/n2USZbfrom Leagle.com. Imagine Fulfillment Services, LLC, based in Torrance, California, filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case No. 12-20544) on March 25, 2012. Judge Julia W. Brand oversees the case. Aram Ordubegian, Esq., at Arent Fox LLP, represents the Debtor. In its petition, the Debtor estimated both assets and debts to be between $1 million to $10 million. The petition was signed by Andy Arvidson, managing member. INVESTORS CAPITAL: Case Venue for 3 Units Tranferred to M.D. Tenn. ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Kentucky, Bowling Green Division, granted, in part, and denied, in part, the request of creditors, Capital Bank N.A. and PBI Bank Inc., to dismiss the Chapter 11 cases of Investors Capital Partners II LP, Investors Capital Partners I LP, Investors Land Partners II LP, and Investors Towne Center Partners I, LP, for improver venue. The Kentucky Court ruled that: * Case No. 12-11676 styled Investors Capital Partners I, LP; * Case No. 12-11677 styled Investors Land Partners II, LP; and * Case No. 13-10004 styled Investors Towne Center Partners I LP are transferred to the U.S. Bankruptcy Court for the Middle District of Tennessee. Investors Capital Partners II LP; Investors Capital Partners I LP and Investors Land Partners II, LP (Bankr. W.D. Ky. Case Nos. 12-11675, 12-11676, and 12-11677) filed voluntary Chapter 11 petitions on Dec. 19, 2012. Investors Towne Center Partners I LP filed its Chapter 11 petition (Bankr. W.D. Ky. Case No. 13-10004) on Jan. 2, 2013. Debtor Inv. Cap. II, is a Tennessee limited partnership with its principal assets in Barren County, Kentucky. The Court said it is undisputed by all parties that venue for that case is proper in Kentucky Court. Debtor Inv. Cap. I and Debtor Towne Center I, are Tennessee limited partnerships with their principal assets in Tennessee. Debtor Inv. Land II is a Delaware limited partnership with its principal assets in Tennessee. None of these Debtors have ever registered to do business in Kentucky, nor do they have assets in Kentucky. Capital Bank is a secured creditor of Inv. Cap. I. PBI is a secured creditor of Inv. Land II. The Banks contend that the Inv. Land II, Inv. Cap. I and Towne Center cases should be dismissed or transferred to the Middle District of Tennessee for improper venue. The Debtors contend venue is proper in the Kentucky Court pursuant to 28 U.S.C. Sec. 1408 and 1409. Each of the Debtor companies are limited partnerships. The general partner of Debtor Inv. Land II is Investors Land Fund Services II, LLC, which is owned 100% by Investors Equity Partners I, LLC. The general partner of Debtor Inv. Cap. I is Investors Capital Fund Services I, LLC. The general partner of Debtor Inv. Cap. II is Investors Capital Fund Services II, LLC. The general partner of Debtor Towne Center is Investors Towne Center Fund Services I, LLC. Investors Equity Partners II, LLC is the 100% owner of the three general partners, Fund Services I, Fund Services II and Towne Center Fund Services I. At the top of the Organizational Chart is Investors Equity Holdings, LLC which owns 76% of Investors Equity Partners I, LLC and Investors Equity Partners II, LLC. James E. Himelrick is the Chairman and President of Investors Equity Holdings, LLC. He is also a 45% owner of Investors Equity Holdings, LLC, along with Robert Pierce who owns 44.1% and Robert Keith who owns 10%. A copy of the Court's March 7, 2013 Memorandum-Opinion is available at http://is.gd/FpRzKSfrom Leagle.com. About Investors Capital Brentwood, Tennessee-based Investors Capital Partners II, LP and two affiliates sought Chapter 11 protection (Bankr. W.D. Ky. Case Nos. 12-11575 to 11677) in Bowling Green, Kentucky, on Dec. 19, 2012. ICP II estimated assets of at least $10 million and liabilities of less than $10 million. It owns a 35-acre commercial development near Glasgow, Kentucky. The ICP II property is home to a Marquee Cinema, Dollar Tree, and Aaron's Rents and also consists of seven parcels of undeveloped land. Debtor-affiliate Investors Capital Partners I, LP owns multiple parcels of undeveloped land near Nolensville, Tennessee. Investors Land Partners II, LP owns partially developed land, consisting of six adjoining parcels of real property, near Nashville, Tennessee. In court filings, the Debtors said that their lenders have attempted to foreclose against the assets of the Debtors, and the Debtors have been unable to reach agreements with their lenders that would allow the Debtors to reorganize their debts in an orderly manner; thus, the Debtors have little option except for the development of a joint plan to reorganize operations and restructure debts for the benefit of all creditors and parties in interest. INTELSAT SA: Plans to Redeem $915 Million 2017 PIK Notes -------------------------------------------------------- Intelsat (Luxembourg) S.A. issued a notice of redemption pursuant to the indenture governing its 11 1/2% / 12 1/2% Senior PIK Election Notes due 2017 that it intends to redeem $915,000,000 aggregate principal amount of the 2017 PIK Notes on April 5, 2013, at a redemption price equal to 105.75% of the principal amount of the 2017 PIK Notes, plus accrued and unpaid interest thereon to the redemption date. The Redemption is conditioned on the completion of one or more debt financings on or prior to the Redemption Date by Intelsat Luxembourg on terms satisfactory to Intelsat Luxembourg providing funds sufficient for Intelsat Luxembourg to pay the aggregate redemption payment for the portion of the outstanding 2017 PIK Notes to be redeemed on the Redemption Date. About Intelsat Luxembourg-based Intelsat is the leading provider of satellite services worldwide. For over 45 years, Intelsat has been delivering information and entertainment for many of the world's leading media and network companies, multinational corporations, Internet Service Providers and governmental agencies. Intelsat's satellite, teleport and fiber infrastructure is unmatched in the industry, setting the standard for transmissions of video, data and voice services. From the globalization of content and the proliferation of HD, to the expansion of cellular networks and broadband access, with Intelsat, advanced communications anywhere in the world are closer, by far. Intelsat S.A. incurred a net loss of $145 million in 2012, a net loss of $433.99 million in 2011, and a net loss of $507.76 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed $17.30 billion in total assets, $18.53 billion in total liabilities and a $1.27 billion total Intelsat S.A. stockholders' deficit and $45.67 million in noncontrolling interest. JOHN FORSYTH: Judge Stays U.S. Actions vs. Canadian Company ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York has entered an interim order imposing a stay on all proceedings in the U.S. against The John Forsyth Shirt Company Ltd. and its assets and any attempt to collect thereon or terminate executory contracts. The temporary restraining was requested by BDO Canada Limited, the monitor appointed in the Canadian proceedings of John Forsyth and its affiliates. U.S. Bankruptcy Judge Shelley C. Chapman will convene a hearing on March 18, 2013, at 2:00 p.m. to consider final approval of BDO Canada's request for approval of the stay on a permanent basis. Objections are due March 11. Restructuring BDO Capital is asking the U.S. Bankruptcy Court to enter an order recognizing as "foreign main proceedings" pursuant to Section 1517 of the Bankruptcy Code the Forsythe Entities' proceedings under Canada's Companies Creditors Arrangement Act, R.S.C. 1985, c. C-36, pending before the Ontario Superior Court of Justice. To effectuate a restructuring of their business in the Canadian proceedings, the Forsyth Entities anticipate (a) relocating their administrative offices from one location in Mississagua, Ontario, to another location still in Mississagua, (b) closing their Cambridge, Ontario location, (c) terminating or laying off certain employees, (d) selling their property in Cordele, Georgia, (e) relocating their U.S. sales office from its current Manhattan site to a less costly location in the same geographical region, and (f) seeking alternative, long-term suppliers of goods to diminish their dependence on Manunion. The Forsyth Entities intend to prepare and present a plan to their creditors in the Canadian Proceedings. Wells Fargo provides Forsyth Canada and Forsyth USA with revolving credit facilities in the combined maximum principal amount of CDN$12 million, which are secured by substantially all of the Forsyth Entities' assets. As of the Petition Date, the outstanding amount of indebtedness under the Wells Fargo Facilities is $8.3 million. Employee Layoffs The company said there are 160 full-time employees in Ontario and nine full-time employees in the United States. As of the date the CCAA cases were commenced, 112 of the Canadian employees and one United States employee have been terminated in compliance with applicable law. Forsyth says it has insufficient funds to satisfy future anticipated amounts owing to the employees and may require further terminations or layoffs in connections with other anticipated restructuring steps. About John Forsyth John Forsyth and its affiliates are collectively in the business of manufacturing, distributing, and selling apparel in both Canada and the United States. The vast majority of Forsyth's operations are in Canada. Forsyth says it acquired PremiumWear, Inc., in 2007 but shut it down after three years, faced intense competition in the apparel industry, and saw an increase in labor costs. Adding to its woes, in late 2012, the Canadian Government stopped a program that granted the company remission discounts, thus the company became insolvent. Forsyth, with the support of its largest secured creditors, Wells Fargo Capital Finance Corporation Canada and Wells Fargo Capital Finance, LLC, filed an application under the CCAA before the Ontario Court, on Feb. 20, 2013, seeking among other things, the authorization to file of a plan of compromise or arrangement with their creditors. The Ontario Court entered the initial order in the Canadian Proceedings on February 22, 2013. BDO Canada Limited, as monitor in the CCAA proceedings and as foreign representative in the U.S., filed a Chapter 15 petition for John Forsyth and its affiliates (Bankr. S.D.N.Y. Case No. 13-10526) on Feb. 25, 2013. John Forsyth estimated assets of up to US$10 million and liabilities of US$10 million to US$50 million in the Chapter 15 petition. The Forsyth Entities' collective liabilities total approximately CDN$17.1 million, approximately CDN$9 million of which are secured (including capital lease and mortgage obligations) as of the CCAA filing. KIEBLER RECREATION: May Recoup $117K in Payments to JGM ------------------------------------------------------- DAVID O. SIMON, TRUSTEE, Plaintiff, v. JGM ASSOCIATES, LP, Defendant, Adv. Proc. No. 12-1138 (Bankr. N.D. Ohio), alleges Kiebler Recreation LLC made four payments to JGM Associates during the 90 days before Kiebler filed its bankruptcy case. The chapter 7 trustee asserts that the payments are preferences which he can avoid and recover for the estate. He also asks that JGM's claim be disallowed. JGM's position is that the ordinary course of business exception is a complete defense to this action. In a Feb. 28, 2013 Memorandum of Opinion is available at http://is.gd/uJM7knfrom Leagle.com, Bankruptcy Judge Pat E. Morgenstern-Clarren entered judgment on the complaint in favor of the Chapter 7 trustee avoiding the preferential transfers, authorizing recovery in the amount of $116,767, and disallowing JGM's claims filed in the Debtor's case. About Kiebler Recreation Kiebler Recreation, LLC, filed a voluntary Chapter 11 bankruptcy petition Bankr. N.D. Ohio Case No. 10-15099) on May 26, 2010. Prior to ceasing business activity at some point after the Petition Date, Kiebler operated a recreational and tourist property in Chautauqua County, New York, known as Peek'n Peak Resort. Peek'n Peak Resort -- http://www.pknpk.com/-- is a recreational and leisure facility in Findley Lake, New York. The Company estimated assets and debts at $10 million to $50 million as of the Petition Date. Robert C. Folland, Esq., at Thompson Hine LLP, originally served as counsel to the Debtor. On June 8, 2011, the United States Trustee selected David O. Simon as Chapter 11 Trustee. On April 5, 2012, the Chapter 11 Trustee filed a Motion to Convert the case from a case under Chapter 11 to one under Chapter 7. On May 15, the Court entered an Order converting the case from a case under Chapter 11 to one under Chapter 7. Mr. Simon is the duly authorized and acting Chapter 7 trustee. Kohrman, Jackson & Krantz P.L.L. serves as counsel to the Trustee. The bankruptcy trustee tapped Jones Lang LaSalle Americas, Inc., as investment banker/business broker to market the Debtor's assets. The Debtor's case was transferred from Judge Randolph Baxter to Judge Pat E. Morgenstern-Clarren effective Aug. 16, 2011. In September 2011, the Bankruptcy Court authorized the Chapter 11 Trustee for Kiebler Recreation, to sell substantially all of the Debtor's assets, except for the Fairways Condominiums. Scott Enterprises, an Erie, Pa.-based hospitality development company, emerged as the top bidder for the Peek'n Peak Resort. Scott submitted the top bid of $11.3 million. The Chapter 11 trustee separately struck a deal with lender PNC Bank to sell certain real property and personal property known as the Fairways Condominiums contiguous to and part of the Peek 'N Peak Resort, located in French Creek, New York. An affiliate, Kiebler Slippery Rock, LLC, filed a separate petition (Bankr. N.D. Ohio Case No. 09-19087) on Sept. 25, 2009. The Committee of Unsecured Creditors of Kiebler Slippery Rock obtained confirmation of a liquidating plan on Jan. 31, 2011, and the case was closed pursuant to a final decree effective March 29, 2011. Chardon, Ohio-based Kiebler Slippery Rock was represented by Andrew L. Turscak Jr., Esq., Mark A. Weintraub, Esq., and Robert C. Folland, Esq., at Thompson Hine LLP. It estimated assets and debts at $10 million to $50 million. LAS VEGAS SANDS: Moody's Changes Outlook on All Ratings to Stable ----------------------------------------------------------------- Moody's Investors Service revised Las Vegas Sands Corp.'s rating outlook to stable from positive following the company's disclosure in its December 31, 2012 10-K filed on Friday, March 1, 2013 that it informed the Securities and Exchange Commission that an internal review found the casino operator had likely violated the Foreign Corrupt Practices Act. LVSC's Ba2 Corporate Family Rating, Ba2-PD Probability of Default Rating, Ba2 senior secured loan rating, and SGL-1 Speculative Grade Liquidity Rating were affirmed. The rating outlook revision to stable from positive considers that while Moody's does not currently believe this disclosure puts LVSC's Ba2 issuer and issue-level ratings at risk, the uncertainty surrounding this disclosure makes it less likely that Moody's will consider a higher rating for LVSC within the next 6 to 12 month period. LVSC has stated that it is currently unable to determine the timing and probability of the outcome of this matter, the extent of materiality, or the range of reasonably possible loss, if any. "LVSC has already achieved the quantitative measures it needs to achieve a higher rating -- debt/EBITDA at or below 3.0 times," stated Keith Foley, a Senior Vice President at Moody's. "At this point, the primary obstacle to a higher rating is LVSC's current inability to provide independent verification that the FCPA issue will be resolved in a manner that does not materially impair the company's reputation or financial profile," added Foley. The stable rating outlook also incorporates Moody's opinion that favorable gaming demand trends in Macau and Singapore will provide LVSC the opportunity to maintain consolidated debt/EBITDA at or below 3.0 times over the long - term despite Moody's expectation that future large cash dividends are possible. LVSC's disclosure with respect to the FCPA relates to a series of business transactions conducted in China and led by former executives of the company. On February 9, 2011, LVSC received a subpoena from the SEC requesting that the company produce documents relating to its compliance with the FCPA (the company has also been advised that the Department of Justice is conducting a similar investigation). After the company received the subpoena from the SEC, its Board of Directors authorized its Audit Committee, comprised of three independent members of the Board of Directors, to investigate matters raised in the subpoena. While the Audit Committee reported preliminary findings that there were likely violations of the books and records and internal controls provisions of the FCPA, it also reported that the preliminary findings do not have a material impact on the company's financial statements, do not warrant any restatement of past financial statements, and do not represent a material weakness in the company's internal controls. The investigation by the Audit Committee, though largely completed, remains ongoing. Ratings Rationale: LVSC's Ba2 Corporate Family Rating reflects its strong performance and the favorable growth prospects for the company's Asian gaming assets along with its low leverage - Moody's expects debt/EBITDA to remain at or below 3.0 times. Debt/EBITDA for the fiscal year- ended December 31, 2012 was about 2.9 times. The ratings also incorporate Moody's view that LVSC's consolidated free cash flow will exceed $1.0 billion in fiscal 2013, the high quality of LVSC's gaming and resort assets, and the company's ability to maintain a very good liquidity profile despite making large special dividend payments to shareholders. Key risks include Moody's opinion that LVSC will pursue further and significant development activity. Also considered is that company is currently subject to investigations by the Securities and Exchange Commission and Department of Justice, some or all of which may be related. LVSC's ratings could go up if the company provides independent verification that the FCPA issue will be resolved in a manner that does not materially impair LVSC's reputation or financial profile. A higher rating also requires that Moody's believes LVSC will maintain debt/EBITDA -- without giving consideration to cash balances -- at or below 3.0 times -- and adhere to a long-term financial policy that is consistent with a higher rating. The degree of ratings improvement, however, is limited at this time given the secured nature of the company's entire debt capital structure, a characteristic that Moody's does not believe is consistent with an investment grade rating. A negative rating action could result if for any reason it appears that LVSC's debt/EBITDA will rise above 3.5 times for an extended period of time. Independent of any quantitative measures, a negative rating action could occur if the SEC, DOJ, and/or other relevant regulatory body uncover any material corporate governance issues as a result of their investigations. The principal methodology used in this rating was Global Gaming published in December 2009. Las Vegas Sands Corp (NYSE: LVS) owns and operates hotel and casino integrated resort facilities in Las Vegas, NV, Bethlehem, PA, Macau, China and Singapore. The company reported consolidated annual net revenue of about $11.1 billion for the fiscal year ended Dec. 31, 2012. LCI HOLDING: US Wants Ch. 11 Sale Nixed Over $24-Mil. Tax Bill -------------------------------------------------------------- Lance Duroni of BankruptcyLaw360 reported that the U.S. government asked a Delaware bankruptcy judge Friday to upend the proposed sale of LifeCare Holdings Inc.'s 27 hospitals, saying the private equity-owned company can't pay potentially $24 million in taxes on the deal. The report related that Texas-based Lifecare -- owned by Carlyle Group LP -- has received a $320 million credit bid for its assets from lenders but the stalking horse bid is substantially higher than the tax basis of the assets, resulting in a big tax bill that the company concedes it can't cover, according to court documents. 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 percent 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. LCI HOLDING: Patient Care Ombudsman Taps SAK as Advisor ------------------------------------------------------- Suzanne Koenig, the patient care ombudsman for LCI Holding Company, Inc. asks the the U.S. Bankruptcy Court for the District of Delaware for permission to employ SAK Management Services, LLC, as medical operations advisor. The ombudsman relates that SAK specializes in the distressed management of health care businesses and she is the president of SAK. The ombudsman requires the assistance of SAK to assist in appropriately and adequately discharging her duties as ombudsman in the cases. SAK will, among other things: a) reviewing license and governmental permits; b) interview representatives of the Debtors, patients, family members, staff or employees, as appropriate; and c) review various financial information, including, without limitation, current financial statements, cash projections, accounts receivable reports and accounts payable reports. According to the ombudsman, the Debtors also agreed to pay SAK a $100,000 advance payment retainer. SAK would apply the retainer as travel related expenses are incurred and would reflect any such payments on fee applications. At the end of the Ombudsman's appointment, if any retainer monies remain, such monies would be applied to any fees allowed by the Court or returned to the Debtors, if there are any excess amounts. SAK will bill the estates at these discounted hourly rates: Suzanne Koenig $450 Joyce Ciyou $400 Patricia Higgins $400 Donna Iversen $400 Mary Blyth $400 Elise Gropper $400 Jerry Harris $375 Helen Colon $250 To the best of the ombudsman's knowledge, SAK is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About LifeCare 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. LCI HOLDING: Replaces Young Conaway with Cole Schotz ---------------------------------------------------- LCI Holding Company, Inc., and its debtor affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Cole, Schotz, Meisel, Forman & Leonard, P.A., as their conflicts counsel, nunc pro tunc to February 1, 2013. The Debtors previously retained Young Conaway Stargatt & Taylor, LLP, as their conflicts counsel, but elected to substitute Cole Schotz for Young Conaway upon the move of David Hurst, Esq., from Young Conaway to Cole Schotz in February. Cole Schotz professionals will be paid the following hourly rates: $365 to $785 for members and special counsel, $210 to $400 for associates, and $165 to $245 for paralegals. The primary professionals who will take a lead role in representing the Debtors are: David R. Hurst, Esq., to be paid $575 per hour, Sanjay Bhatnagar, Esq., to be paid $345 per hour, and Pauline Z. Ratkowiak, paralegal, to be paid $235 per hour. The firm will also be reimbursed for any necessary out-of-pocket expenses. David R. Hurst, Esq., a member of Cole, Schotz, Meisel, Forman & Leonard, P.A., assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors. He disclosed that Young Conaway has received a $25,000 retainer from the Debtors. To the extent that any portion of the retainer remains after application to Young Conaway's outstanding invoices, Young Conaway will transfer the balance of the retainer to Cole Schotz. The Debtors request that all notices, pleading, orders, complaints and other documents served or required to be served in the case be served upon: David R. Hurst, Esq. COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A. 500 Delaware Avenue, Suite 1410 Wilmington, DE 19801 Tel: (302) 652-3131 Fax: (646) 563-7952 E-mail: dhurst@coleschotz.com About LifeCare 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. LEAGUE NOW: Consummates Reverse Merger with NYBD Holding -------------------------------------------------------- League Now Holdings Corporation consummated a Share Exchange with NYBD Holding, Inc., on March 4, 2013, pursuant to which the holders of NYBD received 28,500,000 shares of League Now that had been previously issued to third parties in exchange for 100% of the issued and outstanding capital of NYBD. A copy of the Share Exchange Agreement is available at http://is.gd/8jBlup It is the intention of management of League Now that this transaction be treated as a "reverse merger" with NYBD treated as the successor issuer to League Now for SEC reporting and accounting purposes. On March 1, 2013, the Company filed an Amendment to the Articles of Incorporation changing the name of the company to NYBD Holding, Inc. The Company's board of directors agreed to sell its subsidiary, Infiniti Systems Group, Inc., together with its operations and assets, to the former officer and director of League Now Holdings Corporation. Under the terms of the sale, the purchasers agreed to assume all associated debt as consideration. As of Dec. 31, 2012, the liabilities of Infiniti Systems Group, Inc., exceeded assets by $1,093,864 and for the year ended Dec. 31, 2012, Infiniti Systems Group, Inc., incurred a loss of $168,244. As a result of the Share Exchange Agreement and disposition of Infiniti Systems Group, Inc., the operations of Registrant., will consist entirely of the operations of NYBD Holding, Inc. Under the terms of the Share Exchange, control of the Company was transferred to the previous shareholders of NYBD Holding, Inc., and are held by Haim Yeffet, who now controls 28,500,000 shares of the Company's common stock, representing approximately 50.1% of the total issued and outstanding common stock. Mr. Yeffet holds no additional shares of the Company. Under the terms of the Share Exchange, NYBD Holding were permitted to nominate representatives to serve on the Board of Directors to fill the seats vacated by prior directors. Accordingly, John Bianco resigned as an officer and director concurrent with the appointment of the following individuals to the Board of Directors and to serve in the capacities indicated until the next annual meeting of shareholders: Haim Yeffet - Chairman; President; Secretary; Director Mr. Yeffet was born in 1950 in a kibbutz in the Galilee region of Israel. He served in a commando unit of the Israeli army. In 1972, Mr. Yeffet opened his first restaurant in Israel named "Mrs. Tops". He emigrated to the United States in 1973 and opened the first fast food kosher restaurant in Miami beach. An avid entrepreneur, Mr. Yeffet opened a convenience store in Hollywood Beach and, in 1988, started a home construction business and kosher restaurant in Sunnyland, Florida, and in 1992 he opened an internet cafe and sandwich shop in South Beach. He presently owns a restaurant and bar in Coconut Grove, a kosher restaurant in Miami beach and manages NYBD Holding, Inc. Charles Neustein - Director Mr. Neustein has been practicing law for over 40 years in Miami- Dade County and has focused primarily on complex commercial litigation, bankruptcy home foreclosures, and commercial foreclosure actions in Miami-Dade County and throughout the State of Florida. He received is Juris Doctorate from Washington & Lee University School of Law and his Bachelor of Arts from the University of Miami. He served as a Municipal Court Judge for the City of North Miami Beach from 1975-1976. Morty Etgar - Director Mr. Etgar is a certified public accountant and, since 1994, has managed his own practice in Florida where clients consists of a variety of mid-size enterprises, including international entities, foreign investors in the US, US investors and expanding operations into foreign markets, real estate, and multiple location wholesalers. He is licensed as a CPA in Connecticut, Florida and Israel. He graduated with a B.SC. degree in Mathematics and Physics from The Hebrew University in Jerusalem, received a degree in accounting from Tel-Aviv University, and earned a Masters Degree in Taxation from FIU in Florida. Kenneth Wiedrich - Treasurer, Chief Financial Officer Mr. Wiedrich served as Chief Financial Officer of Unico, Inc., a mining operation based in San Diego, California, from 2007 until 2012. Previously, he served as controller for Javelin Advisory Group, Inc., a boutique financial advisory business where his duties including managing the financial accounting and SEC reporting for multiple small-cap public companies. He has worked as a financial professional and Chief Financial Officer for several private companies over his career. He received his Bachelor of Science degree in Business from Northern State University, South Dakota. About League Now Brecksville, Ohio-based League Now Holdings Corporation, through its subsidiary, Infiniti Systems Group, Inc., provides technology integration services to businesses in the midwestern United States. As reported in the TCR on April 23, 2012, Harris F. Rattray CPA, in Pembroke Pines, Florida, expressed substantial doubt about League Now's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditor noted that the Company has incurred accumulated net losses of $207,200 and needs to raise additional funds to meet its obligations and sustain its operations. The Company's balance sheet at Sept. 30, 2012, showed $1.59 million in total assets, $1.81 million in total liabilities and a $217,959 total stockholders' deficiency. LEUCADIA NATIONAL: Fitch Hikes LT Issuer Default Rating From 'BB' ----------------------------------------------------------------- Fitch Ratings has upgraded the long-term IDR of Leucadia National Corp. to 'BBB-' from 'BB'. Concurrently, Fitch downgraded Jefferies Group LLC's long-term Issuer Default Rating (IDR) and short-term IDR to 'BBB-' and 'F3', respectively, from 'BBB' and 'F2'. The Outlooks on all ratings are Stable. The rating actions follow the completion of the previously announced merger between Leucadia and Jefferies. The ratings of the two issuers have been equalized, as Jefferies is considered a core subsidiary of Leucadia under Fitch's criteria 'Rating FI Subsidiaries and Holding Companies'. This is based on Jefferies' significance relative to Leucadia's equity and the likely role it will play in the combined company's future strategic direction. Key executive management will be shared by both firms although each will retain a separate Board of Directors. Fitch believes that management has discretion to move capital between Jefferies and Leucadia, although that is not expected under normal market conditions. The ratings also reflect the operating parameters set out by Jefferies and Leucadia management, including: -- Maintaining Leucadia's debt-to-equity ratio below 0.5x, assuming Leucadia's two largest investments are fully impaired and the DTA is excluded from the calculation; -- Maintaining Leucadia's ratio of minimum liquid assets to parent company debt below 1.0x; -- Maintaining Leucadia's minimum cash and equivalents (including short-term U.S. Government and Agency securities) of at least 10% of book value (excluding Jefferies); and -- Limiting Leucadia's single largest investment to 20% of book value with all other investments limited to 10% of book value (both excluding Jefferies). KEY RATING DRIVERS - JEFFERIES In Fitch's view, Jefferies has become more exposed to the market risk inherent in the other subsidiaries' investments at Leucadia. Conversely, becoming a privately-owned company may help insulate Jefferies from external market pressures similar to those experienced in November 2011. Fitch believes that management's interest would generally be aligned between Leucadia and Jefferies, particularly now that the firms will be managed by Jefferies' CEO and President. Fitch would not expect Jefferies' core business strategies and operations to be materially impacted by the ownership change, although management's ability to balance time demands between Jefferies and Leucadia will be an important consideration. Fitch's rating view also incorporates an assumption that Jefferies will continue to maintain its current liquidity, leverage and funding profile post-transaction. The conversion to private ownership and becoming a direct subsidiary of Leucadia is expected to provide several tangible financial benefits to Jefferies. For example, it allows Jefferies to terminate the dividends on its common stock, which totaled approximately $60 million per year. Furthermore, Jefferies will no longer be required to make minority interest distributions to Jefferies High Yield Holdings, which have totaled $110 million over the last three fiscal years. Finally, Leucadia also will have the ability to limit Jefferies' Federal income tax distributions by utilizing the $4.7 billion of net operating losses available at Leucadia. KEY RATING DRIVERS - LEUCADIA The upgrade of Leucadia's rating reflects Leucadia's highly liquid and lowly leveraged balance sheet, which the new management team from Jefferies has represented that it is committed to maintaining. Additionally, a wholly owned Jefferies is expected to add value to Leucadia in terms of deal flow and expertise. Leucadia's ratings have been sensitive to succession issues in recent years. The recent management changes, with Joseph Steinberg remaining as Chairman and the introduction of the Jefferies executive management team, alleviates these concerns in the near to intermediate term. Key man risk continues to be an issue for Jefferies, although Fitch recognizes that the company has executed on a number of fronts to broaden and deepen its management team. RATING SENSITIVITIES Positive rating drivers over the longer-term would include Leucadia's demonstrated commitment to a conservative liquidity profile, limited investment concentrations and reduced leverage at the parent company. For Jefferies, continued improvement in profitability and compensation cost containment would contribute to positive rating momentum over time. The integration between Jefferies and Leucadia will play an important role in the longer- term value and risk profile of the combined franchise, in Fitch's view. Jefferies' and Leucadia's ratings could be negatively impacted by a material increase in leverage or a less conservative liquidity and/or funding profile at either entity. Jefferies' leverage remains at historically low levels and Fitch expects that over time, if markets remain stable, it may increase modestly. Ratings would also be negatively impacted if Fitch perceives the risks taken in Leucadia's investment portfolio as increasing materially from current levels. Fitch will continue to assess the ability of Jefferies' management team to run both companies effectively. Furthermore, the unanticipated departure of key executives at either Jefferies or Leucadia could result in negative actions. Jefferies, a Delaware-incorporated holding company, is a well- established full-service investment bank and institutional securities firm primarily serving middle-market clients and investors. Its primary broker/dealer operating subsidiary, Jefferies & Company, Inc., holds the vast majority of the firm's consolidated assets and is regulated by the SEC. At Nov. 30, 2012, Jefferies had U.S. GAAP total assets of $36.3 billion and shareholders' equity of $3.4 billion (including non-controlling interests). Leucudia is a holding company, which operates similarly to a closed-end alternative fund. It has roughly $9.3 billion in assets and $6.8 billion in book equity. The company has been managed by partners Ian Cumming and Joseph Steinberg since 1978. Fitch has downgraded these ratings: Jefferies Group LLC -- Long-term IDR to 'BBB-' from 'BBB'; Outlook Stable; -- Short-term IDR to 'F3' from 'F2'; -- Senior unsecured debt to 'BBB-' from 'BBB'; -- Short-term debt to 'F3' from 'F2'; -- Subordinated debt to 'BB' from 'BB+'. Station Place Securitization Trust, Series 2012-1 -- Senior secured notes to 'BBB-' from 'BBB'. Station Place Securitization Trust, Series 2013-1 -- Senior secured notes to 'BBB-' from 'BBB'. Fitch has upgraded the following ratings: Leucadia National Corp -- Long-term IDR to 'BBB-' from 'BB'; Outlook Stable; -- Senior unsecured debt to 'BBB-' from 'BB'; -- Senior Subordinated debt to 'BB+' from 'BB-'. Leucadia's ratings have been removed from Rating Watch Positive. The ratings of Jefferies, Station Place Securitization Trust, series 2012-1 and Station Place Securitization Trust, series 2013-1 have been removed from Rating Watch Negative. LEVEL 3: CEO James Crowe to Quit by End of 2013 ----------------------------------------------- Level 3 Communications, Inc., said that its chief executive officer, James Q. Crowe, has informed the Board of Directors of his intention to transition out of his position as CEO by the end of 2013. Consequently, the Board has formed a Transition Planning Committee to assist it with the process of identifying and selecting a new chief executive officer, and with the planning for the leadership transition. The timing of the transition is subject to change at the Board's discretion in consultation with Mr. Crowe. "It has been a privilege to lead Level 3's incredibly talented people through times of great challenge and great opportunity," said Crowe. "I am extraordinarily proud of what we have accomplished together. For some time, the Board and I have been considering CEO succession. Given the company's financial and operational strength, we have concluded that it is an appropriate time to begin the transition to new leadership with new perspectives. With our unique global network, the industry's most comprehensive portfolio of advanced IP/optical services and an increasingly strong financial position, Level 3 is extraordinarily well positioned to benefit from the worldwide explosion of voice, data and video carried over the Internet. For my part, I stand ready to assist the Board in assuring that the transition is successful and will offer my full support to my successor." "The Board of Directors is committed to ensuring that, through this process, we select the right CEO to follow Jim and to ensure that we capitalize on the extraordinary opportunities ahead," said Walter Scott, Jr., chairman of the Board of Level 3. "On behalf of the entire Level 3 organization, I want to thank Jim for his visionary leadership, for his dedication and for all that he has done to build Level from the ground up. It is no exaggeration to say that, without Jim, there would be no Level 3." About Level 3 Communications Headquartered in Broomfield, Colorado, Level 3 Communications, Inc., is a publicly traded international communications company with one of the world's largest communications and Internet backbones. Level 3 incurred a net loss of $422 million in 2012, a net loss of $756 million in 2011, and a $622 net loss in 2010. The Company's balance sheet at Dec. 31, 2012, showed $13.30 billion in total assets, $12.13 billion in total liabilities and $1.17 billion in total stockholders' equity. * * * As reported by the TCR on April 2, 2012, Fitch Ratings upgraded Level-3 Communications' Issuer Default Rating to 'B' from 'B-' on Oct. 4, 2011, and assigned a Positive Outlook. The rating action followed LVLT's announcement that the company closed on its previously announced agreement to acquire Global Crossing Limited (GLBC) in a tax-free, stock-for-stock transaction. In the July 20, 2012, edition of the TCR, Moody's Investors Service affirmed Level 3 Communications, Inc.'s corporate family and probability of default ratings at B3. The Company's B3 ratings are based on expectations that net synergies from the recently closed acquisition of Global Crossing Ltd. will reduce expenses sufficiently such that Level 3 will be modestly cash flow positive (on a sustained basis) by late 2013. Level 3 carries a 'B-' corporate credit rating from Standard & Poor's Ratings Services. LHC LLC: Seeks to Terminate Leaf Ice Centre Contract With CSCG -------------------------------------------------------------- Months before filing for bankruptcy, LHC, LLC, fired Club Sporting Consulting Group, Inc., as manager for its Leafs Ice Centre facility but now wants to use provisions of the Bankruptcy Code to formally terminate the contract. Prepetition, Club Sporting assisted the Debtor in the operation of Leafs Ice Centre pursuant to a Professional Management Services Agreement dated June 16, 2012, and generated gross revenue of $3.1 million in 2012. Due to serious issues relating to Club Sporting's management of the Leafs Ice Centre, on Feb. 4, 2013, the Debtor, acting under its newly reconstituted board of directors, removed the firm from its management and operational responsibilities. The Debtor has replaced Club Sporting with Fairview Facilities Management, LLC. Under the new contract, Fairview is providing improved management and support, and the Debtor expects to realize substantial savings from the operations of Leafs Ice Centre. Accordingly, the Club Sporting contract is of no value to the Debtor and its estate and is an unnecessary component of the Debtor's reorganization. The Debtor seeks to reject the Club Sporting contract pursuant to Sec. 365 of the Bankruptcy Coded. After entry of the rejection order, Club Sporting will have 30 days to file a claim for rejection damages, if any. About LHC LLC LHC, LLC owns and operates a multiple sheet ice rink facility commonly known as the "Leafs Ice Centre" at 801 Wesemann Drive, West Dundee, Illinois. The facility was constructed in 2007 using proceeds from the sale of sports facility revenue bonds by the Illinois Finance Authority. LHC, LLC, filed for Chapter 11 petition (Bank. N.D. Ill. Case No. 13-07001) on Feb. 25, 2013. Peter A. Buh signed the petition as president. The Debtor estimated assets and debts of at least $10 million. Judge Donald R. Cassling presides over the case. The Debtor is represented by Crane Heyman Simon Welch & Clar. LHC LLC: Wants Discovery of Club Sporting, Proposed Receiver ------------------------------------------------------------ LHC, LLC, asks for authority from the Bankruptcy Court to conduct discovery of various third parties relating to the Debtor's assets, liabilities, financial affairs and issues in the Chapter 11 case. Club Sporting Consulting Group, Inc., previously operated the Debtor's ice rink facility but has been with Fairview Facilities Management, LLC, in February 2013 due to certain issues. The Debtor now wants to conduct discovery of Club Sporting, and Club Sporting's Don LaPato and Hailey Kenny, Cordes & Company, among other people. Prepetition, Club Sporting assisted the Debtor in the operation of Leafs Ice Centre pursuant to a Professional Management Services Agreement dated June 16, 2012, and generated gross revenue of $3.1 million in 2012. In December 2012, Wells Fargo Bank, N.A., as successor bond trustee under the bonds issued to finance construction of Leafs Ice Centre, commenced a foreclosure against the Debtor in the Circuit Court of the Sixteenth Judicial Circuit, Kane County, Illinois. The parties were engaged in negotiations. Wells Fargo terminated the forbearance discussions in February when Wells Fargo informed the Debtor that it would proceed with the hearing on the appointment of Cordes & Company as receiver on Feb. 25. This decision by the lender triggered the filing of the Chapter 11 case. The Debtor told the Bankruptcy Court that Club Sporting, Cordes and others have possession of relevant information and documents. The Debtor said in the footnote to its court filing that Wells Fargo initially suggested to the Debtor that Cordes could serve as a mediator. Then, upon the filing of the foreclosure, the lender sought to have Cordes appointed as receiver. Then, during forbearance negotiations with the Debtor after the filing of the foreclosure, the Lender sought to have Cordes serve as "overseer." Ultimately, the lender's counsel retained Cordes as its forensic accountant. The Debtor has been providing Cordes with access to its facility and records over the last week. Cordes has also obtained information and documents concerning the Debtor from third parties. About LHC LLC LHC, LLC owns and operates a multiple sheet ice rink facility commonly known as the "Leafs Ice Centre" at 801 Wesemann Drive, West Dundee, Illinois. The facility was constructed in 2007 using proceeds from the sale of sports facility revenue bonds by the Illinois Finance Authority. LHC, LLC, filed for Chapter 11 petition (Bank. N.D. Ill. Case No. 13-07001) on Feb. 25, 2013. Peter A. Buh signed the petition as president. The Debtor estimated assets and debts of at least $10 million. Judge Donald R. Cassling presides over the case. The Debtor is represented by Crane Heyman Simon Welch & Clar. LHC LLC: Seeks to Use Wells Fargo's Cash Collateral --------------------------------------------------- LHC, LLC, seeks approval from the Bankruptcy Court to use cash that allegedly serves as collateral for claims asserted by Wells Fargo Bank, N.A., as indenture trustee for bonds used to finance the construction of the Debtor's Leafs Ice Centre. The Debtor says it generates more than sufficient cash flow to cover all operating, management and other expenses relating to its business. The Debtor submitted cash flow projections for the period March through April. The Debtor says that use of cash collateral will permit it to sustain business operations and reorganize its financial affairs through the implementation of a successful plan of reorganization. The Debtor says it will provide adequate protection to Wells Fargo in the form of sufficient cash reserves for the payment of postpetition real estate taxes, and replacement liens, among other things. About LHC LLC LHC, LLC owns and operates a multiple sheet ice rink facility commonly known as the "Leafs Ice Centre" at 801 Wesemann Drive, West Dundee, Illinois. The facility was constructed in 2007 using proceeds from the sale of sports facility revenue bonds by the Illinois Finance Authority. LHC, LLC, filed for Chapter 11 petition (Bank. N.D. Ill. Case No. 13-07001) on Feb. 25, 2013. Peter A. Buh signed the petition as president. The Debtor estimated assets and debts of at least $10 million. Judge Donald R. Cassling presides over the case. The Debtor is represented by Crane Heyman Simon Welch & Clar. LITHIUM TECHNOLOGY: Cortis Capital Chairman Appointed to Board -------------------------------------------------------------- The board of directors of Lithium Technology Corporation, pursuant to Section 3.1 of the Company's bylaws, which authorizes the remaining duly sitting Board members to fill vacancies on the Board, unanimously appointed Graham Norton-Standen to the Board. Additionally, the Board unanimously appointed Mr. Norton-Standen to serve as the chairman of the Board, to serve until his successor has been duly appointed and qualified. Mr. Norton-Standen, age 55, currently serves as a managing partner of VRDT Corporation, chairman of Cortis Capital LLP, and managing partner of Applied Intelligence Resource. Mr. Norton-Standen's experience as a board member and chairman for other entities led the Company to conclude that he was qualified to serve as a director of the Company. The board now consists of the following board members: * Graham Norton-Standen (Chairman) * Hugorinus C. Nujit * Martin Koster (CEO) * William (Bill) Armstrong * Clemens Eppo Marie van Nispen tot Severear About Lithium Technology Plymouth Meeting, Pa.-based Lithium Technology Corporation is a mid-volume production stage company that develops large format lithium-ion rechargeable batteries to be used as a new power source for emerging applications in the automotive, stationary power, and national security markets. The Company was not able to file its annual report for the period ended Dec. 31, 2011, and its quarterly reports for the succeeding periods. For the nine months ended Sept. 30, 2011, the Company reported a net loss of $12.26 million on $6.06 million of total revenue. The Company reported a net loss of $7.25 million on $6.35 million of products and services sales for the year ended Dec. 31, 2010, compared with a net loss of $10.51 million on $7.37 million of product and services sales during the prior year. The Company's balance sheet at Sept. 30, 2011, showed $8.83 million in total assets, $35.09 million in total liabilities and a $26.26 million total stockholders' deficit. Going Concern As reported by the TCR on April 8, 2011, Amper, Politziner & Mattia, LLP, Edison, New Jersey, after auditing the Company's financial statements for the year ended Dec. 31, 2010, noted that the Company has recurring losses from operations since inception and has a working capital deficiency that raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning The Form 10-Q for the quarter ended Sept. 30, 2011, noted that the Company's operating plan seeks to minimize its capital requirements, but the expansion of its production capacity to meet increasing sales and refinement of its manufacturing process and equipment will require additional capital. The Company raised capital through the sale of securities closing in the second quarter of 2011 and realized proceeds from the licensing of its technology pursuant to the terms of a licensing agreement and the sale of inventory used in manufacturing its batteries as part of the establishment of a joint venture in the fourth quarter of 2011, but is continuing to seek other financing initiatives and needs to raise additional capital to meet its working capital needs, for the repayment of debt and for capital expenditures. Such capital is expected to come from the sale of securities. The Company believes that if it raises approximately $4 million in additional debt and equity financings it would have sufficient funds to meet its needs for working capital, capital expenditures and expansion plans through the year ending Dec. 31, 2012. No assurance can be given that the Company will be successful in completing any financings at the minimum level necessary to fund its capital equipment, debt repayment or working capital requirements, or at all. If the Company is unsuccessful in completing these financings, it will not be able to meet its working capital, debt repayment or capital equipment needs or execute its business plan. In that case the Company will assess all available alternatives including a sale of its assets or merger, the suspension of operations and possibly liquidation, auction, bankruptcy, or other measures. These conditions raise substantial doubt about the Company's ability to continue as a going concern. LODGENET INTERACTIVE: Wins Confirmation of Prepack Plan ------------------------------------------------------- A U.S. bankruptcy judge in New York approving the prepackaged Chapter 11 plan for LodgeNet Interactive Corp. Before the Chapter 11 filing, the plan was accepted by affected creditors. Colony Capital LLC is the leader of a group investing $60 million and taking ownership under the plan. Unsecured creditors are being paid in full, according to Bloomberg News. Maria Chutchian of BankruptcyLaw360 reported that a New York bankruptcy judge on Thursday gave LodgeNet the go-ahead to implement its Chapter 11 plan, including a strategic partnership with DirecTV Group Inc., overruling opponents who tried to stand in the way of the company's takeover by private real estate investment firm Colony Capital LLC. The BLaw report related that U.S. Bankruptcy Judge Shelley C. Chapman's approval allows Los Angeles-based Colony to enter into a deal with DirecTV to make LodgeNet and DirecTV strategic partners in the hospitality and health care markets. 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. MF GLOBAL: Chapter 11 Trustee Files Cash Collateral Budgets ----------------------------------------------------------- Pursuant to the Final Cash Collateral Order, Louis Freeh, the Chapter 11 trustee for MF Global Holdings Ltd. and its debtor affiliates submitted to Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York cash collateral budgets approved in February 2013. The Chapter 11 trustee expected to have $9 million in cash available for use for the week ending March 15, 2013, and $8.97 million for the week ending March 22, 2013. Schedules of the Cash Collateral Forecast are available for free at http://is.gd/xl1EuV About MF Global New York-based MF Global (NYSE: MF) -- http://www.mfglobal.com/-- is one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm is also one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. MF Global Holdings Ltd. and MF Global Finance USA Inc. filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Case Nos. 11-15059 and 11-5058) on Oct. 31, 2011, after a planned sale to Interactive Brokers Group collapsed. As of Sept. 30, 2011, MF Global had $41,046,594,000 in total assets and $39,683,915,000 in total liabilities. It is easily the largest bankruptcy filing so far this year. Judge Honorable Martin Glenn presides over the Chapter 11 case. J. Gregory Milmoe, Esq., Kenneth S. Ziman, Esq., and J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, serve as bankruptcy counsel. The Garden City Group, Inc., serves as claims and noticing agent. The petition was signed by Bradley I. Abelow, Executive Vice President and Chief Executive Officer of MF Global Finance USA Inc. The Securities Investor Protection Corporation commenced liquidation proceedings against MF Global Inc. to protect customers. James W. Giddens was appointed as trustee pursuant to the Securities Investor Protection Act. He is a partner at Hughes Hubbard & Reed LLP in New York. Jon Corzine, the former New Jersey governor and co-CEO of Goldman Sachs Group Inc., stepped down as chairman and chief executive officer of MF Global just days after the bankruptcy filing. U.S. regulators are investigating about $633 million missing from MF Global customer accounts, a person briefed on the matter said on Nov. 3 last year, according to Bloomberg News. MONITRONICS INT'L: Debt Amendments No Impact on Moody's B2 CFR -------------------------------------------------------------- Moody's Investor Service said that Monitronics International Inc.'s proposed amendment to its credit facility has no impact on ratings or the stable ratings outlook (B2 CFR); however, the amendment is credit positive as it aims to reduce pricing on the term loans and extend the maturity date on the revolver. Monitronics International Inc. provides alarm monitoring services to more than 800,000 residential and commercial customers. Annual revenues approximate $350 million. Monitronics is owned by Ascent Capital Group, Inc. (ticker: ASCMA). NANA DEVELOPMENT: Moody's Rates Secured Notes and Term Loan 'B3' ---------------------------------------------------------------- Moody's Investors Service has assigned a B3 rating to NANA Development Corporation's proposed $275 million senior secured notes due 2019 and $100 million senior secured term loan due 2018. The B3 corporate family rating has been affirmed. Moody's did not rate the company's proposed $125 million ABL facility. The ratings outlook remains negative. Proceeds from the new issue of senior secured notes and term loan combined with borrowings under the company's proposed ABL are expected to be used to refinance the company's existing first lien and second lien term loans. Ratings assigned: $275 million senior secured notes due 2019, B3 (LGD-4, 58%) $100 million term loan due 2018, B3 (LGD-4, 58%) Ratings affirmed: Corporate Family Rating, B3 Probability of Default, B3-PD The following ratings will be withdrawn upon the close of the transaction: $175 million ($162 million outstanding) first lien term loan due 2016, B1 (LGD-3, 32%) $260 million ($241 million outstanding) second lien term loan due 2016, Caa1 (LGD-5, 70%) Upon conclusion of the proposed transaction, ratings for NANA's existing first and second lien term loans will be withdrawn. The proposed senior notes and term loan ratings have been assigned subject to Moody's review of final documentation following completion of the proposed transaction. Ratings Rationale: The affirmation of the B3 CFR is supported by the moderate improvement to the company's liquidity profile as a result of the proposed transaction, including increased covenant headroom under the proposed facilities (activated if revolver availability falls below a minimum threshold), an extended debt maturity profile and moderately lower principal amortization payments than under the existing debt structure. The outlook remains negative because of uncertainty over the impact of defense budget cuts in the company's largest business segment, Federal Contract Services and continued delays in large projects on Alaska's North Slope included in the company's Oilfield & Mining Support segment. In addition, the company's internally generated free cash flow generation combined with expected royalty contributions are expected to moderately cover $20 million of amortization payments as well as dividends expected to be paid to its parent, NANA Regional Corporation, Inc. inclusive of general and administrative cost reimbursements. NANA's credit metrics are expected to be in line with the rating category including debt/EBITDA trending towards 5.5x and EBIT/interest coverage of slightly over 1.0 times over the next year, on a Moody's adjusted basis. The B3 rating also reflects the volatility in the company's cash flow that could result from changes in commodity prices affecting its Oilfield & Mining Support segment and variability in proceeds from Red Dog Mine- related royalty contributions. The company's low margins, recent operating challenges within its Oilfield Mining & Support segment and weak free cash flow generation also constrain its ratings. At the same time, the rating reflects the benefits derived from the diversity of the portfolio of businesses the company operates and long-term relationships with the Department of Defense, Teck Resources (operator of the Red Dog Mine) and high credit quality customer base in the Oil & Gas sector are also factored in the ratings. Moody's expects revenues and overall margins to moderately increase over the intermediate term as continued growth in the Oilfield and Mining Support segment, primarily the company's work in the Gulf Coast region, serves to offset slower than expected growth in the Federal Contract Services segment as a result of overall fiscal budget austerity measures. In addition, savings derived from cost cutting efforts including consolidating administrative functions over the last year should moderately contribute to an improvement in EBITDA margins, offsetting some of the expected pressure on gross margins in the Federal Service segment. The ratings are also supported by expected continued equity contributions from NRC. NRC is NANA's ultimate parent but a non- guarantor of NANA's debts. NRC receives royalty proceeds from its Red Dog Mine ownership. Those royalty proceeds are subsequently down-streamed to NANA through an equity contribution agreement. While the amount of cash generated from the mine is susceptible to variations in prices for zinc and output from the mine, Moody's expects royalty contributions will continue to be a meaningful source of income to service debt and fund business growth. Separately, NANA's credit agreements benefit from the restriction in the size of dividends up-streamed to NRC. Downward rating momentum would develop if the company is not successful in executing on the proposed refinancing that is expected to benefit its liquidity profile. In addition, continued low or negative free cash flow generation (after dividends) and/or any weakening of the company's liquidity profile post the proposed refinancing could also exert downward pressure on ratings. Stabilization of the outlook would be predicated on the expectation that the company's free cash flow generation and proceeds from royalty contributions received would comfortably cover expected cash uses. Upward rating momentum, not currently anticipated, would depend on debt/EBITDA approaching 4.0x on a sustained basis and free cash flow to debt in the high to mid- single digit percentage range. 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. NANA Development Corporation maintains an investment portfolio of various business segments including contract services, hospitality/tourism, management services and oilfield and mining services. One of NANA's main objectives is to invest in businesses that create long-term job growth for the Inupiat community. NANA's last twelve months ended December 31, 2012 revenues totaled $1.6 billion. NANA is the business arm of NANA Regional Corporation. NRC was formed as one of the 13 Native Corporations that followed the Alaskan Native Claims Settlement Act. NRC has land surface and subsurface rights of 2.3 million acres in Northwest Alaska. NRC is owned by over 12,500 members of the Inupiat community. NANA DEVELOPMENT: S&P Rates Proposed Notes and Term Loan 'B+' ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' issue-level rating to NANA Development Corp.'s proposed $275 million senior secured notes and $100 million term loan. The recovery rating is '3', indicating S&P's expectation of meaningful recovery (50%-70%) in a default scenario. In addition, the transaction also includes a new $125 million asset-based loan (ABL) facility (not rated), which represents a $40 million increase to NANA's existing revolving credit facility, with a $20 million sublimit for the issuance of letters of credit. S&P expects NANA to have $65 million outstanding under the new ABL facility at close of the transaction. NANA will use the proceeds from the proposed transaction mostly to repay and replace its existing ABL, and pay down the amount outstanding on its existing first- and second-lien term loans. The 'B+' corporate credit and existing issue-level ratings remain on CreditWatch with negative implications, reflecting S&P's view of greater prospects for diminished covenant headroom under its existing secured total leverage covenant over the next 12 months. S&P expects to remove the ratings from CreditWatch and assign a stable outlook upon the successful completion of the transaction, reflecting the removal of near-term covenant-related risks and an extended maturity profile. There is a springing fixed-charge coverage and minimum EBIT test under the ABL facility if availability falls below $25 million. However, S&P expects availability to exceed the threshold during the next 12 months given its expectation of positive free operating cash flow generation. The ratings S&P assigned to the proposed senior secured notes and term loan are subject to receipt of final documentation. (Privately held NANA does not publicly release financial statements.) RATINGS LIST NANA Development Corp. Corporate Credit Rating B+/Watch Neg/-- New Ratings NANA Development Corp. Senior Secured $275 mil sr secd notes B+ Recovery Rating 3 $100 mil term loan B+ Recovery Rating 3 NEAL DAVID ELINOFF: Lulu City Plan Objection Overruled ------------------------------------------------------ Neal David Elinoff, the owner of a condominium in Telluride, Colorado, removed an impediment to confirmation of his Chapter 11 exit plan after Bankruptcy Judge Michael E. Romero overruled objections lodged by Lulu City Condominium Association, Inc. Judge Romero, however, did not gave his approval to the plan yet. Instead, he granted the Debtor leave to file an affidavit in support of confirmation of the Amended Chapter 11 Plan within two weeks. The Court will review the matter for confirmation following submission of the affidavit. Lulu City is the homeowner association for the Condominium pursuant to the Amended and Restated Declaration recorded Oct. 16, 2006. The Debtor granted a first deed of trust against the Condominium in favor of Bank of America, securing a promissory note in the original principal amount of $374,500. The Debtor granted a second deed of trust against the Condominium in favor of JPMorgan Chase Bank, N.A. securing a promissory note in the original principal amount of $75,000. The parties stipulated the value of the Condominium does not exceed the amounts owed to the holders of the first and second deeds of trust. On July 20, 2007, Lulu City levied a special assessment for a remodel of its common elements. All owners were given the option of either paying their respective share of special assessment in cash or having Lulu City pay the special assessment for them using an association bank loan. The Debtor chose the latter option, and the association bank loan paid the Debtor's entire $69,397 share of the special assessment in full. As a result, the parties entered into an Agreement for Association Financing of Special Assessment Lulu City Condominium Association, Inc., and the "Principal Amount Financed" totaled $69,397. The Agreement was drafted by Diane Wolfson, association counsel for Lulu City and owner/controller of the association management company for Lulu City. The Agreement was executed by the Debtor and recorded in the real property records of San Miguel County on November 8, 2007. More than two years later, Lulu City recorded a document entitled Release of Association Lien Created by Loan Agreement in the real property records. From 2007 through the date of filing for bankruptcy relief, the Debtor paid the monthly amounts due under the Agreement. Lulu City filed Proof of Claim No. 28 asserting a secured claim for pre-petition assessments owed by the Debtor in the total amount of $7,042. The Debtor's Amended Chapter 11 Plan provides for the treatment of Lulu City's claim in Class 9, proposing any claim of Lulu City arising from the Agreement is an unsecured claim to be treated under Class 13 of the Plan. Class 13 provides allowed claims of unsecured creditors of the Debtor shall receive pro rata share of distributions from a general claims fund after payment in full of allowed administrative and unsecured tax claims. Objections to confirmation of the Amended Plan were filed by five creditors, but Lulu City's objection is the only remaining unresolved objection to confirmation. Lulu City disputes the proposed treatment of its claim and asserts the special assessment is a statutory lien which continues against the Condominium. The Amended Plan recognizes the instant dispute, providing for alternative treatment of Lulu City's claim. If the obligation arising under the Agreement is determined to be unsecured the Debtor will retain the Condominium, and any outstanding regular monthly assessments will be paid on the effective date. If the Condominium is determined to still be encumbered by the obligation under the Agreement, the Amended Plan proposes to surrender the Condominium to the holders of the Class 7, 8 and 9 claims. Lulu City's Objection to confirmation of the Amended Plan raised several other issues. However, Lulu City later stipulated the issues raised in the Objection are limited to only the nature and extent of the Class 9 Claim and the amount of its administrative claim, if any. Lulu City expressly waived all other objections to confirmation previously raised in the filed Objection.5 A copy of the Court's March 7, 2013 Order is available at http://is.gd/aNZPAjfrom Leagle.com Neal David Elinoff -- ods Elinoff Gallery Inc., dba Elinoff & Co., fmem LSMFT, LLC, and dba Neal Elinoff Real Estate -- owns real property located at 280 South Mahoney Drive, #6H, in Telluride, Colorado. He filed a Chapter 11 bankruptcy petition (Bankr. D. Colo. Case No. 10-31659) on Aug. 25, 2010. Judge Michael E. Romero oversees the case. The Law Office of Bonnie Bell Bond, Esq. -- bonnie@bellbondlaw.com -- serves as the Debtor's counsel. The Debtor scheduled assets of $3,797,948 and liabilities of $5,453,941 in his petition. A list of the Debtor's 20 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/cob10-31659.pdf NICHOLAS INNERBICHLER: 10th Cir. Affirms Ruling on Gambling Debt ---------------------------------------------------------------- Adamar of New Jersey, Inc., a company that owns the Tropicana casino in Atlantic City, New Jersey, appeals the bankruptcy court's order finding that a gambling debt incurred by Nicholas Raymond Innerbichler was dischargeable. In its findings of fact and conclusions of law entered after a two-day trial, the bankruptcy court held that Adamar had failed to prove that Mr. Innerbichler's debt was obtained by fraud under 11 U.S.C. Sec. 523(a)(2)(A). The bankruptcy court entered judgment for Mr. Innerbichler on April 13, 2012, and Adamar timely appealed. The Debtor cross-appealed, arguing that the bankruptcy court erred in failing to award him fees under Sec. 523(d). Finding no error by the bankruptcy court, the United States Bankruptcy Appellate Panel, Tenth Circuit affirmed. "We are not persuaded that the bankruptcy court committed reversible error," said Hon. Honorable Howard R. Tallman, U.S. Judge, United States Bankruptcy Court for the District of Colorado, sitting by designation. Judge Tallman wrote the opinion for the three-judge panel. Mr. Innerbichler had been gambling in Atlantic City casinos, including the Tropicana, since at least 1992. In 2003 he sold his business, TAMSCO, for $68 million, and received approximately half of that amount as a 49% owner of the business. In August 2003, Mr. Innerbichler filled out a credit application with Adamar in which he listed his income as $250,000 per year and his assets at $30 million. Adamar reviewed his credit at that time, and again in January and July of 2004. Prior to January 2005, he had always paid his debts to Adamar. Between January 21 and January 23, 2005, Mr. Innerbichler signed markers with Adamar for a total amount of $550,000. The markers bore the legend, "I represent that I have received cash for the above amount and that said amount is on deposit in said bank or trust company in my name. It is clear from all claims and is subject to this check." When Adamar subsequently presented the markers to Mr. Innerbichler's bank for payment in March 2005, it learned that Mr. Innerbichler had stopped payment on them. Adamar obtained a judgment for $399,936.99 against Mr. Innerbichler in New Jersey state court in July 2006. Mr. Innerbichler paid Adamar $160,000 in partial satisfaction of the judgment before filing for Chapter 11 bankruptcy in June 2009. Shortly thereafter, Adamar filed its complaint under Sec. 523(a)(2)(A), objecting to discharge of the debt that remained outstanding. Mr. Innerbichler's case was converted to one under Chapter 7 on January 6, 2011. After a trial on the merits in April 2011, the bankruptcy court held that the gambling debt was dischargeable, but did not award Mr. Innerbichler costs and reasonable attorney's fees for the proceeding as permitted under Sec. 523(d). Both parties appealed the bankruptcy court's decision to the Tenth Court. The case is, ADAMAR OF NEW JERSEY, INC., Plaintiff-Appellant- Cross-Appellee, v. NICHOLAS RAYMOND INNERBICHLER, Defendant- Appellee-Cross-Appellant, BAP Nos. NM-12-032, NM-12-038 (10th Cir. BAP). A copy of the Tenth Circuit's Feb. 25, 2013 Opinion is available at http://is.gd/d9x6l3from Leagle.com. About Tropicana Entertainment Las Vegas, Nevada-based Tropicana Entertainment Inc., along with its affiliates, owns or operates nine casinos and resorts in Indiana, Louisiana, Mississippi, Nevada and New Jersey. The Company owns a development property in Aruba. Tropicana Entertainment LLC and certain affiliates filed for Chapter 11 protection (Bankr. D. Del. Case No. 08-10856) on May 5, 2008. Kirkland & Ellis LLP and Richards Layton & Finger, represent the Debtors in their restructuring efforts. Lazard Ltd. served as financial advisor and Kurtzman Carson Consultants LLC served as notice, claims, and balloting agent. Epiq Bankruptcy Solutions LLC served as the Debtors' Web site administration agent. AlixPartners LLP served as the Debtors' restructuring advisor. Stroock & Stroock & Lavan LLP and Morris Nichols Arsht & Tunnell LLP represented the Official Committee of Unsecured Creditors. Capstone Advisory Group LLC served as financial advisor to the Creditors' Committee. The OpCo Debtors, a group of Tropicana entities owning casinos and resorts in Atlantic City, New Jersey and Evansville, Indiana obtained confirmation of a reorganization plan in May 2009. Effective March 31, 2010, Tropicana emerged from the Chapter 11 reorganization process as an Carl Icahn-owned entity. A group of Tropicana entities, known as the LandCo Debtors, which own Tropicana casino property in Las Vegas, obtained approval of a separate Chapter 11 plan. On April 29, 2009, non-debtor units of the OpCo Debtors, designated as the New Jersey Debtors -- Adamar of New Jersey, Inc., and its affiliate, Manchester Mall, Inc. -- filed for Chapter 11 protection (Bankr. D. N.J. Lead Case No. 09-20711) to effectuate a sale of the Atlantic City Resort and Casino to a group of investors-led by Carl Icahn. Judge Judith H. Wizmur presides over the New Jersey cases. Manchester Mall was a wholly owned subsidiary of Adamar that owns and operates certain real property utilized in the New Jersey Debtors' business operations. Ilana Volkov, Esq., and Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, in Hackensack, New Jersey, represented the New Jersey Debtors. Kurtzman Carson Consultants LLC served as claims and notice agent. Adamar disclosed $500 million to $1 billion both in total assets and debts in its petition. Manchester Mall disclosed $1 million to $10 million in total assets, and less than $50,000 in total debts in its petition. Adamar of New Jersey and Manchester Mall later merged into Adamar of NJ In Liquidation LLC. The merger and name change was in accordance with an Amended and Restated Purchase Agreement, which governs the sale and transfer of the operations of the Tropicana Casino and Resort - Atlantic City, including substantially all of the New Jersey Debtors' assets, to Tropicana Entertainment Inc., Tropicana Atlantic City Corp., and Tropicana AC Sub Corp., free and clear of any and all liens, claims and encumbrances. ORCHARD SUPPLY: Moody's Cuts CFR to Caa2; Outlook Stays Negative ---------------------------------------------------------------- Moody's Investors Service lowered Orchard Supply Hardware Stores Corp's Corporate Family Rating to Caa2 from Caa1. The Caa2 rating assigned to the company's secured term loan was affirmed. The rating outlook remains negative. The following ratings were lowered: Corporate Family Rating to Caa2 from Caa1 Probability of Default Rating to Caa2-PD from Caa1-PD The following ratings were affirmed: Senior Secured Term Loan due 2013 at Caa2 (LGD 4, 61%) Senior Secured Term Loan due 2015 at Caa2 (LGD 4, 61%) Ratings Rationale: The downgrade reflects very weak credit metrics (Moody's adjusted Debt/EBITDA over 8 times) and the company's lack of meaningful progress in addressing the upcoming maturity of its $55 million secured term loan due in December 2013. While OSH has adequate near term sources of liquidity, with cash and available credit of $40 million as of February 2013, the company has obtained a waiver from its term loan lenders related to the leverage ratio covenant for the fiscal quarters ending February 2, 2013 and the quarter ending May 4, 2013, it will need to test this covenant as of August 3, 2013 and a further waiver will likely be required. Absent an extension of the December 2013 term loan tranche, the company's Senior Secured asset-based revolver will come due 90 days prior to the maturity of this facility. Given the pending events that could pressure liquidity in the second part of 2013 Moody's believes the probability of a default, including by way of a transaction that Moody's would deem a distressed exchange, has risen. The rating outlook is negative. Ratings could be lowered if the company were unable to make meaningful progress addressing its late 2013 debt maturities or if the probability of a default were to otherwise increase. Ratings could be upgraded if the company were to make progress extending its debt maturity profile, while also demonstrating positive trends in operating performance which would be evidenced by positive same store sales and improved operating margins. The principal methodology used in this rating was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Orchard Supply Hardware Stores Corporation, headquartered in San Jose, California, is a neighborhood hardware and garden store focused on paint, repair and the backyard. As of February 2, 2013 the Company had 89 stores in California. ORMET CORP: Proposes Evercore Group as Investment Banker -------------------------------------------------------- Ormet Corporation and its affiliates seek Court approval to hire Evercore Group L.L.C. as financial advisor and investment banker, nunc pro tunc to the Petition Date. Since August 2012, Evercore provided extensive services to the Debtors in preparation for the Debtors' restructuring efforts, including conducting comprehensive solicitation processes for potential purchasers and/or investors in the Debtors. Evercore received payments totaling $700,000 and expense reimbursements of $27,400 prepetition within one year prior to the bankruptcy filing. It is not owed anything for work provided prepetition. Postpetition, Evercore has agreed to render these services: (a) Reviewing and analyzing the Debtors' business, operations and financial projections; (b) Advising and assisting the Debtors in a restructuring, financing and/or sale transaction, if the Debtors determine to undertake such a transaction; (c) Providing financial advice in developing and implementing a Restructuring; (d) If the Debtors pursue a financing, assisting the Debtors in structuring and effecting a financing, identifying potential Investors and, at the Debtors' request, contacting such investors, and working with the Debtors m negotiating with potential investors; and, (e) If the Debtors pursue a sale, assisting the Debtors in structuring and effecting a sale, identifying interested parties and/or potential acquirers and, at the Debtors' request, contacting such interested parties and/or potential acquirors, and advising the Debtors in connection with negotiations with potential interested parties and/or acquirors and aiding in the consummation of a sale transaction. The Debtors have agreed to pay the firm in accordance with this fee and expense structure: (1) Monthly Fee: $100,000 per month. (2) Restructuring Fee: $3 million upon consummation of any Restructuring. (3) Sale Fee: $3 million upon consummation of any sale. (4) Financing Fee: Upon consummation of any financing, 1.0% of senior secured facilities including debtor-in-possession financing, 2.0% of junior secured and senior unsecured debt; 3.0% of mezzanine and subordinated debt and 5.0% of equity and equity-linked securities and obligations. However, there is no financing fee for financing funded by Wayzata Investment Partners or their affiliates, or any current shareholder of the Company or its affiliates. (5) Multiple Fees: Evercore is not entitled to both a Restructuring Fee and a Sale Fee in connection with a single transaction or single series of transactions. But otherwise, more than one fee and more than one of each fee may be due. For example, Financing Fees may be in addition to a Sale Fee or Restructuring Fee on account of the same transaction. (6) Credits: $25,000 of each Monthly Fee and 50% of any Financing Fee will be credited once against any Restructuring Fee or Sale Fee. Crediting applies without duplication and only to the extent that the all fees due Evercore are fully paid and finally approved. (7) Expenses: The Debtors will reimburse Evercore for its reasonable and documented expenses, including the reasonable fees, disbursements and other charges of Evercore's counsel (without the requirement that the retention of such counsel be approved by the Bankruptcy Court). A hearing on the application is slated for March 20. Objections are due March 13. About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on Feb. 25, 2013, with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Attorneys at Dinsmore & Shohl LLP and Morris, Nichols, Arsht & Tunnell LLP serve as counsel to the Debtors. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung and Paul Billyard serve as investment bankers to the Debtor. ORMET CORP: Hiring Dinsmore as General Bankruptcy Counsel --------------------------------------------------------- Ormet Corporation and its affiliates filed papers with the Bankruptcy Court seeking approval to hire Dinsmore & Shohl LLP as their general bankruptcy counsel, nunc pro tunc to the Petition Date. For professional services, Dinsmore's fees are based upon the standard hourly rates of professionals and paraprofessionals. Presently, the firm's current hourly rates range from $225 to $850 for partners, $140 to $575 for of counsel, $140 to $350 for associates, and $125 to $230 for paralegals. Dinsmore has represented the Debtors on various matters for several years and has become generally familiar with the Debtors' debt and capital structure and business affairs. Since its engagement, the firm has received payments of $1.354 million for prepetition services and expenses incurred for or on behalf of the Debtors in connection with the preparation and commencement of the Chapter 11 proceedings and other matters, including $812,000 during the 90 days immediately preceding the Petition Date. Dinsmore has performed its legal services under a general retainer. The balance in the retainer after applying payment of prepetition services is $235,000. A hearing on the application is slated for March 20. Objections are due March 13. About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on Feb. 25, 2013, with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Attorneys at Dinsmore & Shohl LLP and Morris, Nichols, Arsht & Tunnell LLP serve as counsel to the Debtors. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung and Paul Billyard serve as investment bankers to the Debtor. ORMET CORP: Morris Nichols to Serve as Delaware Counsel ------------------------------------------------------- Ormet Corporation and its affiliates seek the Court's authority to employ Morris, Nichols, Arsht & Tunnell LLP as Delaware bankruptcy co-counsel, nunc pro tunc to the Petition Date. Prepetition, on Dec. 2, 2012, the Debtors engaged Morris Nichols. Morris Nichols was paid amounts totaling $62,400 in connection with pre-petition advice, services, and expenses regarding financial restructuring, including, inter alia, the preparation and filing of the chapter 11 cases. As of the Petition Date, Morris Nichols held a balance of $80,000 as an advance payment for services to be rendered and expenses to be incurred in connection with its representation of the Debtors. The Debtors believe the services of Morris Nichols postpetition are necessary to enable them to faithfully execute their duties as debtors in possession. Subject to Court approval, the Debtors propose to pay Morris Nichols its customary hourly rates in effect from time to time as set forth herein, plus reimbursement of actual, necessary expenses incurred by Morris Nichols on the Debtors' behalf. Morris Nichols' current hourly rates are: Category Hourly Rate -------- ----------- Partners $525 to $820 Associates $330 to $500 Paraprofessionals $225 to $285 Case Clerks $145 A hearing on the application is slated for March 20. Objections are due March 13. About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on Feb. 25, 2013, with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Attorneys at Dinsmore & Shohl LLP and Morris, Nichols, Arsht & Tunnell LLP serve as counsel to the Debtors. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung and Paul Billyard serve as investment bankers to the Debtor. PACIFIC PARK: Foreclosure Action Gets Go Signal From Dist. Court ---------------------------------------------------------------- Chief District Judge Anthony Ishii upheld a lower court order that refused to halt an automatic stay relief order that allows U.S. Bank N.A. to proceed with a foreclosure action against Pacifica Park Apartments LLC, a copy of which March 1, 2013 ruling is available at http://is.gd/uAzUcgfrom Leagle.com. The appellate case is captioned as PACIFICA PARK APARTMENTS, LLC, Appellant, v. U.S. BANK NATIONAL ASSOCIATION, Appellee. Case No. CIV-F-13-0164 (AWI)(E.D. Calif.) The issue on appeal are two specific and limited decisions -- automatic stay relief and cash collateral use -- by Bankruptcy Judge Richard Lee. Pacifica Park, dba Citrus Plaza Shopping Center, filed for a voluntary Chapter 11 petition on Dec. 6, 2012 (Bankr. E.D. Cal. Case No. 12-60039). The Debtor was represented by Marcus A. Torigian, Esq. -- Marcus@torigianlaw.com -- with offices at 2033 S. Court St, in Visalia, California. The entire bankruptcy case was dismissed on Jan. 31, 2013. When Pacifica Park filed for bankruptcy, it listed an interest in the Citrus Plaza Shopping Center in Exeter, California. U.S. Bank, as a secured creditor and who also has interest in the Property, sought a stay modification to allow foreclosure on the Property. The Debtor also sought court authority to use cash collateral. Judge Lee denied the Debtor's request and granted U.S. Bank's stay motion. Subsequently, at the Debtor's request, Judge Lee also denied a stay of the U.S. Bank Stay Relief order pending the Debtor's appeal. Judge Ishii agreed with the bankruptcy court's finding that the "subsequent dismissal of the overall bankruptcy case independently ended the automatic stay for all of Pacifica Park's assets, including the property." PHILADELPHIA ENERGY: S&P Assigns 'B+' CCR; Outlook Stable --------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Philadelphia, Pa.-based Philadelphia Energy Solutions Refining and Marketing LLC (PES). The outlook is stable. At the same time, S&P assigned its 'BB-' issue-level rating (one notch higher than the corporate credit rating) to PES' proposed $500 million term loan B due 2018. S&P assigned a '2' recovery rating to the debt, indicating its expectation of substantial (70% to 90%) recovery if a payment default occurs. The ratings on PES reflect the company's "weak" business risk and "aggressive" financial risk profiles. Credit factors that influence the rating include the company's concentrated asset base, management's lack of a track record in operating the refinery complex, and its participation in the competitive and highly volatile refining industry. "The ratings also reflect PES' relatively low leverage and moderate size, scale and complexity," said Standard & Poor's credit analyst Nora Pickens. PES, a joint venture between The Carlyle Group and Sunoco Inc., acquired the 335,000 barrel per day (bpd) refinery complex in September 2012. Sunoco put the asset up for sale in 2011 following several years of poor financial results. Under terms of the deal, Carlyle paid $175 million and Sunoco contributed the refinery to PES in exchange for a one-third nonoperating ownership interest. Carlyle owns the remaining two-thirds and maintains a majority voting position on the company's board of directors. "The stable outlook reflects our expectation that PES will maintain adequate liquidity and that fundamentals, particularly benchmark crack spreads, will remain supportive for PES to maintain credit measures commensurate with the rating. We could lower the rating if industry conditions weaken materially or if the company has unplanned downtime such that financial performance deteriorates leading to total debt to EBITDA above 3.5x-4.0x. Given PES' concentrated geographic and asset position, we view an upgrade as unlikely. However, we could consider it if the company improves its business risk profile by increasing the size and diversity of its refining assets, or diversifies its cash flow into more stable sources such as logistics assets," S&P said. READER'S DIGEST: Wants to Employ Evercore as Investment Banker -------------------------------------------------------------- RDA Holding Co. and its affiliates ask the Bankruptcy Court for authority to employ Evercore Group L.L.C., as investment bankers. Evercore has agreed to provide these services: a) Reviewing and analyzing the Debtors' business, operations and financial projections; b) Advising and assisting the Debtors in a Restructuring,4 Financing and/or Sale transaction if the Debtors determine to undertake such a transaction; c) Providing financial advice in developing and implementing a Restructuring, which would include (i) assisting the Debtors in developing a restructuring plan or plan of reorganization, including a plan of reorganization pursuant to the Bankruptcy Code; (ii) advising the Debtors on tactics and strategies for negotiating with various stakeholders regarding the Plan; (iii) providing testimony, as necessary, with respect to matters on which Evercore has been engaged to advise the Debtors in any proceedings under the Bankruptcy Code that are pending before a court exercising jurisdiction over the Debtors; and, (iv) providing the Debtors with other financial restructuring advice as Evercore and the Debtors may deem appropriate. d) If the Debtors pursue a Financing, assisting the Debtors in (i) structuring and effecting a Financing; (ii) i Identifying potential Investors and, at the Debtors' request, contacting such Investors; and (iii) working with the Debtors in negotiating with potential Investors. e) If the Debtors pursue a Sale, assisting the Debtors in (i) structuring and effecting a Sale; (ii) identifying interested parties and/or potential acquirors and, at the Debtors' request, contacting such interested parties and/or potential acquirors; and, (iii) advising the Debtors in connection with negotiations with potential interested parties and/or acquirors and aiding in the consummation of a Sale transaction. Evercore has agreed to this compensation package: a) Monthly Fee: $150,000 until consummation of a Restructuring or termination. b) Restructuring Fee: $4,750,000 upon consummation of a Restructuring. c) Financing Fee: A percentage upon consummation of any Financing. d) Sale Fee: The greater of $1,000,000 and 1.25% of Aggregate Consideration, upon consummation of any Sale. e) Multiple Fees: If a single transaction is both a Restructuring and a Sale, only the greater of the resulting Restructuring Fee and Sale Fee will be due. Otherwise, single (or multiple) transactions may give rise to multiple fees. f) Pre-Arranged Plan: If pre-packaged or other pre-arranged Plan will result in a Restructuring, Financing or Sale, then half of the related fees are due upon execution of definitive agreements or delivery of binding consents with respect to such Plan, with the balance due upon Plan consummation. g) Crediting: 50% of Monthly Fees actually paid and finally approved plus $450,000 will be credited once against any Restructuring, Financing or Sale Fee. If a series of transactions results in both a Restructuring Fee and a Sale Fee being paid, then 50% of the lesser such fee will be credited against the greater fee. If a pre-arranged Plan is not later consummated, then any initial fees paid on account of that Plan may be credited against any subsequent fees that may be due. h) Expenses: The Debtors will reimburse Evercore's reasonable and documented expenses, including reasonable and documented legal expenses. To the best of the Debtors' knowledge, Evercore is a "disinterested person," as that phrase is defined in Bankruptcy Code Sec. 101(14), as modified by Bankruptcy Code Sec. 1107(b), and does not hold or represent an interest adverse to the estates. 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. 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: Taps FTI Consulting as Financial Advisor --------------------------------------------------------- RDA Holding Co. filed papers with the Bankruptcy Court seeking authority to employ FTI Capital Advisors, LLC, as international financial advisor and investment banker, nunc pro tunc to the Petition Date. FTI will provide the financial advisory and investment banking services with respect to the Debtors' international operations pursuant to the Engagement Letter. FTI has provided, and will continue to provide, subject to Court approval certain investment banking services with respect to the Debtors' direct and indirect foreign subsidiaries, including without limitation: a. Work with the Debtors' management team to make determinations with respect to marketing processes, sales structures, and tax considerations; b. Conduct a solicitation of third party companies and potential financial investors to engage in sale and intellectual property licensing transactions on terms acceptable to the Debtors; c. Work with the Debtors' management to prepare confidential information memorandums about the Debtors' international businesses; d. Assist the Debtors with the preparation of management presentation materials for meetings with interested third parties; e. Assist the Debtors in establishing criteria for potential buyers, and identifying, screening and ranking prospective buyers; f. Establish a process for soliciting third parties for the sale transactions, including bidding procedures and timing; g. Establish appropriate data rooms and support prospective buyer due diligence processes; h. Solicit indications of interest and assist the Debtors in valuing initial bids, investigating the feasibility of proposed transactions, and determining which prospective buyers to select for final bids; i. Support the Debtors in negotiating asset sale and licensing agreements with prospective purchasers; j. Advise the Debtors in negotiations with other stakeholders that are necessary to effectuate smooth transitions; and k. Work with the Debtors' inside and outside counsel to ensure that sales transactions move toward timely closings. FTI has provided, and will continue to provide certain financial advisory and restructuring services with respect to the Debtors' direct and indirect foreign subsidiaries, including: a. Work with the Debtors and Evercore Group L.L.C. in a complementary manner to assist with the Debtors restructuring; b. Provide financial cash flow forecasting by country and for the overall international business, both pre and post-shut down of entities in various countries; c. Quantify the potential wind down / liquidation costs by country, including severance liability, trade claims; d. Evaluate termination liabilities relating to key contracts by region, both in the context of a restructuring and in the ordinary course; e. Analyze the impact that key contracts may have upon the operational costs of the remaining business; f. Analyze the impact of intercompany liabilities and cash pooling on potential recoveries and solvency or liabilities by country or legal entity; g. Confirm and quantify decisions regarding which countries should be shut down or operated and the timing of potential shut downs and, if requested to do so by the Debtors, provide project management and other advisory services to support the Debtors' implementation of such decisions; h. Evaluate the financial impacts of different restructuring regimes on wind down costs and procedures by country; i. Assist in the preparation of plan of reorganization documentation, liquidation analyses, required financial reporting, liquidity management, first day motions and schedules; j. Analysis of liquidating trust scenarios as outlined by counsel to the Debtors, Weil, Gotshal & Manges, LLP; and k. Other work as directed by the Debtors that is acceptable to FTI. The Debtors said they require the services to be provided by FTI throughout these chapter 11 cases. The services that FTI has provided, and will continue to provide, to the Debtors are necessary to enable the Debtors to maximize the value of their estates. Although there is currently no engagement agreement to do so, one or more of the Debtors' non-debtor international subsidiaries may in the future also engage FTI, FTIC or an affiliate to provide supplemental services not in conflict with the services being provided to the Debtors. FTI will seek the Debtors' consent to any such supplemental engagement. All of the services that FTI will provide to the Debtors will be undertaken at the Debtors' request and will be appropriately directed by the Debtors so as to avoid duplicative efforts among the professionals retained in these chapter 11 cases. Although the Debtors have contemporaneously hereto filed an application to retain Evercore as their investment banker, such retention explicitly carves out services related to the Debtors' direct and indirect foreign subsidiaries. FTI will use reasonable efforts to coordinate with the Debtors' other retained professionals, including Evercore, to avoid any unnecessary duplication of services. The Debtors will compensate FTI in accordance with the terms and conditions of the Engagement Letter, which provide a compensation structure in relevant part as follows: a. Retainer: The Debtors have paid FTI non-refundable retainers totaling $300,000. b. Success Fees: Upon the closing of the first sale transaction, the Debtors will pay FTI a success fee equal to the greater of (i) $500,000 and (ii) (x) the product of the Gross Value of the transaction and 1% (y) less $300,000. To the extent any additional transactions close, the Debtors will pay FTI additional Success Fees if the sum of the Gross Value of all transactions exceeds $80 million, and in such case, the Success Fee for each transaction shall equal 1% of the Gross Value of all transactions which have closed less all prior Success Fees and retainers paid. c. Post-December 1, 2012 Advisory Fees: In addition to the retainer amounts previously paid and the Success Fees, FTI had charged the Debtors for advisory services provided from December 1, 2012, on an hourly rate schedule with rates ranging from $315 for a consultant to $895 per hour for a senior managing director. The range of hourly billing rates for FTIC employees based outside the U.S. effective January 1, 2013 is from $280 for an analyst to $1,110 for a senior managing director. During the 90-day period prior to the bankruptcy filing date, FTI received from the Debtors (i) the sum of $500,000 as "Cash on Account" as an advance payment for its fees for services and reimbursable expenses and (ii) payments aggregating $1,040,240.73 in respect of invoices for services and reimbursement of expenses. On February 15, 2013, FTI applied $364,314.10 of the Cash on Account to unpaid invoices for services and reimbursement of expenses. As of the Petition Date, FTI has a remaining Cash on Account credit balance in the amount of $135,685.90. To the best of the Debtors' knowledge, FTI Consulting is a "disinterested person," as that phrase is defined in Bankruptcy Code Sec. 101(14), as modified by Bankruptcy Code Sec. 1107(b), and does not hold or represent an interest adverse to the estates. 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. 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: Hires Sitrick as Communications Consultant ----------------------------------------------------------- RDA Holding Co. and its affiliates asks the Court for authority to employ Sitrick and Company as communications consultant, nunc pro tunc to the Petition Date, to provide these services: a) Develop and implement communications programs and related strategies and initiatives for communications with the Debtors' key constituencies regarding the Debtors' operations and progress through the chapter 11 process; b) Develop public relations initiatives for the Debtors to maintain public confidence and internal morale during the chapter 11 process; c) Prepare press releases and other public statements for the Debtors, including statements relating to major chapter 11 events; d) Prepare other forms of communication to the Debtors' key constituencies and the media; e) Develop and maintain a website containing communications materials for various constituencies regarding the restructuring; and f) Perform such other communications consulting services as may be requested by the Debtors. Sitrick's standard hourly billing rates range from $195 to $895, depending on the professional performing the services. Sitrick received from the Debtors an aggregate of $145,000 as advance payments for professional services performed and expenses incurred. Sitrick has used the advance payments to credit the Debtors' account, and has reduced the balance of the credit available to the Debtors by the amount of such charges. As of February 16, 2013, Sitrick has a remaining credit balance in favor of the Debtors in the amount of $11,750. To the best of the Debtors' knowledge, Sitrick is a "disinterested person," as that phrase is defined in Bankruptcy Code Sec. 101(14), as modified by Bankruptcy Code Sec. 1107(b), and does not hold or represent an interest adverse to the estates. 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. 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. RG STEEL: Wins Court Approval of Baltimore, Severstal Settlements ----------------------------------------------------------------- RG Steel LLC obtained court approval for a settlement with the Supervisor of Assessments for Baltimore County regarding its assessment on the company's Sparrows Point property. The settlement resolves Sparrows Point property assessment for the years 2009, 2010, and 2011. Under the deal, RG Steel and Baltimore County agreed to waive further appeals on the property assessment by setting the market value at $203.9 million for each of the tax years. In addition, the amount on which RG Steel would actually be taxed would be phased in. Both agreed that the phased in assessment for 2009 would be $153.3 million while the phased in assessment for 2010 and 2011 would be $178.6 million and $203.9 million, respectively. The deal will also result in a reduction, refund or credit of approximately $830,000 against Sparrows Point's real estate tax liability for 2011, which was previously calculated at $2.9 million. The agreement is available for free at http://is.gd/IwPohK RG Steel also obtained court approval to enter into an agreement resolving Severstal US Holdings II, LLC's objection to the settlement. The agreement is available for free at http://is.gd/WQB9DG About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. RG STEEL: Amends Purchase Agreement to Resolve SNA Objection ------------------------------------------------------------ RG Steel Wheeling LLC and Bounty Minerals LLC amended their agreement to provide for certain limitations on Bounty's right to conduct operations on the surface of the land overlying RG Steel's West Virginia property. RG Steel said the inclusion of those limitations in the agreement resolves SNA Carbon LLC's objection to the sale of the West Virginia property to Bounty. Last month, SNA Carbon asked U.S. Bankruptcy Judge Kevin Carey to deny approval of the sale, saying it might jeopardize the operations of Mountain State Carbon LLC, the company's joint venture with RG Steel. SNA Carbon also said it is unable to confirm if the property is related to MSC's operations since RG Steel did not provide legal descriptions of the property. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. RG STEEL: Sets Framework For $100-Mil. in Clawback Suits -------------------------------------------------------- Jamie Santo of BankruptcyLaw360 reported that bankrupt RG Steel LLC and creditors hammered out a mediation framework in Delaware bankruptcy court Thursday designed to handle the hundreds of suits launched by the defunct steelmaker in an attempt to claw back more than $100 million in alleged preferential payments. The report related that companies targeted by the more than 600 adversary complaints launched by RG Steel since January had responded with a host of objections to the proposed mediation process, including the steelmaker's plan to have creditors split the costs. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owns Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012, to pursue a sale of the business. The bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion as of the Chapter 11 filing. The Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. An official committee of unsecured creditors has been appointed in the case. Kramer Levin Naftalis & Frankel LLP represents the Committee. Huron Consulting Services LLC serves as its financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. RHYTHM & HUES: South Korean Firm's $17MM Offer to Lead Auction -------------------------------------------------------------- The Wall Street Journal's Ben Fritz reports that a Bankruptcy Judge in Los Angeles on Friday approved a request to make South Korean media company JS Communications Co. the "stalking horse" bidder for Rhythm & Hues Studios Inc., said the troubled visual- effects company's attorney, Brian Davidoff, Esq., at Greenberg Glusker Fields Claman & Machtinger LLP. According to the WSJ report, Rhythm & Hues, in a court filing Thursday, disclosed it received a bid valued at about $17 million from JS. Specifically, JS is offering to assume nearly $16 million of debtor-in-possession loans from two studios for which Rhythm & Hues is doing work and to pay $1 million in cash to help satisfy other liabilities. The report relates Peter S. Fishman, a director at advisory firm Houlihan Lokey, which is helping to facilitate a sale, said in a filing that JS's letter of intent offers the best terms for the estate and its creditors of the proposals received. Mr. Fishman also said Houlihan has received nondisclosure agreements from about 20 prospective buyers, of which around 10 have conducted on- site due diligence. He said he expected to receive more bids before a proposed deadline of March 22. 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. R&H has 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 has a 135,000 square-foot facility in El Segundo, California. It has more than 460 employees. The Debtor is represented by Brian L. Davidoff, Esq., C. John M Melissinos, Esq., and Claire E. Shin, Esq., at Greenberg Glusker, in Los Angeles, California. The petition was signed by John Patrick Hughes, president and CFO. Key clients Universal City Studios LLC and Twentieth Century Fox, a division of Twentieth Century Fox Film Corporation, are providing DIP financing. They are represented by Jones Day's Richard L. Wynne, Esq., and Lori Sinanyan, Esq. RHYTHM AND HUES: Sec. 341 Meeting of Creditors Set for March 15 --------------------------------------------------------------- The U.S. Trustee will convene a meeting of creditors in the Chapter 11 cases of Rhythm and Hues, Inc., aka Rhythm and Hues Studios Inc., on March 15, 2013, at 1:15 p.m. The meeting will be held at RM 2610, 725 S Figueroa St., Los Angeles, California. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the Company's financial affairs and operations that would be of interest to the general body of creditors. About 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. R&H has 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 has a 135,000 square-foot facility in El Segundo, California. It has more than 460 employees. The Debtor is represented by Brian L. Davidoff, Esq., C. John M Melissinos, Esq., and Claire E. Shin, Esq., at Greenberg Glusker, in Los Angeles, California. The petition was signed by John Patrick Hughes, president and CFO. Key clients Universal City Studios LLC and Twentieth Century Fox, a division of Twentieth Century Fox Film Corporation, are providing DIP financing. They are represented by Jones Day's Richard L. Wynne, Esq., and Lori Sinanyan, Esq. RICKY LEE BUMGARDNER: Wins Confirmation of Plan ----------------------------------------------- Ricky Lee Bumgardner won confirmation of his second amended plan of reorganization. Bankruptcy Judge Stephani W. Humrickhouse said the Plan has been filed in good faith, is feasible, and, as amended at the hearing, dedicates all projected disposable income to unsecured creditors. The Plan also satisfies the absolute priority rule by successfully meeting the requirements of the new value exception. The Court overruled objections of the bankruptcy administrator and Bank of America. Mr. Bumgardner is the owner of 10 properties in Onslow County, North Carolina. His primary liabilities are those incurred for the purchase of his residence, two triplexes, two single-family rental properties, and an undeveloped lot referred to by the debtor as the "Telephone Pole Lot." Mr. Bumgardner owned two additional properties at the time he filed his petition, but voluntarily surrendered both to PNC Bank post-petition. The Marital Residence is owned by Mr. Bumgardner and his non-debtor wife and secures a loan from First Federal Bank; the remaining nine properties are titled in the debtor's name only. Each unit in the triplexes has a distinct address, and those six units along with the two single-family properties secure debts to JP Morgan Chase Bank, all eight of which the debtor rents out year-round as his primary source of income. The Telephone Pole Lot is security for a debt to PNC Bank. Mr. Bumgardner also owns interests in a number of business entities: Alliance Construction Corp of NC, Inc. (49% interest); Alliance Electric, Inc. (100% interest); Alliance Reconstruction and Restoration, Inc. (25% interest); JDR Motors, Inc. (35% interest); and Rick's Eating Establishments, Inc. (25% interest). Mr. Bumgardner is also a manager of Alliance U.S. Properties, LLC, which is owned by his wife and father-in-law. Alliance U.S. Properties owns a condominium in Wilmington, North Carolina, which is subject to a deed of trust to Chase. Mr. Bumgardner sought Chapter 11 protection (Bankr. E.D.N.C. Case No. 10-09785) on Nov. 29, 2010, and filed a disclosure statement and plan of reorganization on July 8, 2011. The disclosure statement was conditionally approved on July 11, 2011. In general, the debtor's second amended plan of reorganization contemplates continued ownership of the Marital Residence, the Chase Properties, and the Telephone Pole Lot, with the debtor reserving the right to surrender or liquidate all or a portion of those assets to pay secured creditors. Claims will be paid primarily through the proceeds of the rental income derived from the Chase Properties. The debtor proposes to pay $24,000, together with interest at a fixed rate of 1.5% per annum, to unsecured creditors in bi-annual installments over 60 months, which amount is based on the debtor's projected disposable income over the term of the Plan pursuant to 11 U.S.C. Sec. 1129(a)(15)(B). Finally, the Plan states that the debtor will invoke the "new value exception" to the absolute priority rule, if necessary to overcome the objection of a rejecting impaired unsecured class. The debtor's Plan sets forth 16 classes of creditors, three of which are unimpaired. Thirteen classes -- Classes IV through XVI -- are impaired, and, as the latest ballot report indicates, all of those impaired classes, with the exception of Class XVI, have accepted the plan. Bank of America has the largest general unsecured claim, originally listed at $5,102,450.21 and arising out of a promissory note that was executed by Alliance Construction Corp of NC, Inc. and guaranteed by the debtor in favor of Bank of America. Bank of America filed an amended proof of claim on Oct. 11, 2012, reducing its claim by approximately $1.5 million to $3,592,243. As a result, the estimated aggregate amount of liquidated unsecured claims against the debtor is $5,043,959. A copy of the Court's Feb. 28, 2013 Order is available at http://is.gd/uKq8ggfrom Leagle.com. RUBY WESTERN: S&P Assigns 'BB+' CCR & Rates $500MM Loan 'BB+' ------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB+' corporate credit rating to Ruby Western Pipeline Holdings LLC and Ruby Western Pipeline Holdings B LLC (Western Pipeline). In addition, S&P assigned an issue-level rating of 'BB+' and a recovery rating of '3' to Western Pipeline's $500 million senior secured term loan due 2020. The '3' recovery rating indicates that lenders can expect meaningful (50% to 70%) recovery if a payment default occurs. The outlook is stable. S&P also affirmed its 'BBB-' corporate credit rating on Ruby Pipeline LLC (Ruby) and maintained its stable outlook. S&P views Ruby's ratings on a stand-alone basis without assuming any implicit parent support or impact from their credit quality. Both owners' consent is required for major transactions, including a bankruptcy filing. As such, the addition of Western Pipeline's debt does not alter S&P's view on Ruby's credit rating. Western Pipeline's ratings reflect its "strong" business risk profile and "aggressive" financial risk profiles as S&P's criteria define the terms. Western Pipeline is the holding company that owns Global Infrastructure Partners' (GIP's) 50% interest in Ruby. Ruby is a 683-mile, 1.5-billion-cubic-feet-per-day natural gas pipeline that extends from the Rockies production basin at Opal, Wyo., to Malin, Ore. Ruby, which began operations in July 2011, is 50% owned by Kinder Morgan Inc.) and 50% by GIP. Pro forma for the term loan issuance, Western Pipeline will have $500 million of debt. Western Pipeline's 'BB+' corporate credit rating reflects the company's dependence on residual equity distributions from Ruby to provide cash flow for debt service. S&P do not factor sponsor support into Western Pipeline's rating. Positively, Western Pipeline's cash flow stability is enhanced due to its first claim to Ruby's cash distributions, up to $91 million per year, through its Class A ownership interest. S&P expects Ruby's total distributions to be about $130 million in 2013, which S&P believes provides meaningful cushion to the $91 million to be distributed to Western Pipeline. As such, Western Pipeline's distributions from Ruby will not be disproportionately affected if Ruby's distributions are lower than expected. S&P also views the risk of Ruby's distributions to Western Pipeline being disrupted in the near term as remote given the predictability of Ruby's cash flow coming from long-term take-or-pay transportation contracts. However, the risk of cash flow pressure at Ruby and its ability to make distribution payments to Western Pipeline is present over the long term due to potentially lower recontracted rates when its contracts expire given the existing low level of basis spreads. "The stable outlook on Western Pipeline reflects S&P's belief that its cash flows will remain constant, debt leverage will steadily decline, and liquidity will remain adequate.," said Standard & Poor's credit analyst William Ferara S&P could lower Western Pipeline's rating if the distributions it receives from Ruby were to decline such that its stand-alone debt to EBITDA does not decrease in line with S&P's expected trajectory (such as 4x in 2015). Given Western Pipeline's structural subordination to Ruby, any positive ratings action would be unlikely unless Ruby's rating were to be raised. SAGITTARIUS RESTAURANTS: Moody's Rates New Sr. Debt Facility 'B2' ----------------------------------------------------------------- Moody's Investors Service affirmed Sagittarius Restaurants, LLC's Caa1 corporate family rating and Caa1-PD probability of default rating. Moody's also assigned B2 ratings to the company's proposed first lien senior secured credit facilities, consisting of a $40 million revolving credit facility due 2018 and a $175 million term loan due 2018. The ratings outlook remains stable. Proceeds from the proposed bank debt will be used to refinance existing bank debt and to redeem a portion of the outstanding 13% PIK notes. Moody's views the financing favorably since it extends debt maturities, lowers the blended cost of capital, and allows the company to execute on its store revitalization initiative. Ratings affirmed: Corporate family rating at Caa1 Probability of default rating at Caa1-PD Ratings assigned: Proposed $40 million first lien senior secured revolving credit facility due 2018 at B2 (LGD2, 25%) Proposed $175 million first lien senior secured term loan due 2018 at B2 (LGD2, 25%) Ratings affirmed and to be withdrawn: Senior secured revolving credit facility due 2015 at B1 (LGD2, 13%) Senior secured term loan due 2015 at B1 (LGD2, 13%) Ratings Rationale: The Caa1 corporate family rating reflects the company's high financial leverage and weak coverage of interest expense. Moody's expects Sagittarius' pro forma debt to EBITDA will be in the 7.0 times range for 2012, adjusted for the proposed debt refinancing. This would represent an almost full-turn increase from 2011 as EBITDA has modestly declined, largely because of higher commodity costs and weak comparable restaurant sales trends, and consolidated debt levels have increased. Moody's expects the company's debt to EBITDA to remain elevated given expectations for soft operating trends short-term and the high accretion rate (13%) on the PIK subordinated notes at both its operating and holding companies. The corporate family rating also incorporates Del Taco's small size and revenue base, single concept profile and geographic concentration in one state (California) that has exhibited higher than average unemployment. Positively, the rating considers good brand recognition as a niche regional Mexican fast food concept, its planned efforts to re-vitalize the restaurant base, and modest maintenance capital spending. The rating also derives support from its good pro forma liquidity profile and expectations for positive free cash flow, which benefits from the presence of PIK notes in the capital structure. The stable outlook reflects Moody's expectation that the company's restaurant revitalization initiatives will gradually lead to improvements in comparable restaurant sales such that EBITDA improves. The ratings could be pressured if comparable restaurant sales are consistently negative or debt to EBITDA materially increases from initial pro forma levels of 7.0 times. A downgrade could also occur in the event liquidity were to deteriorate. Positive rating pressure could develop if the company is able to successfully execute its business strategy and development plan, mitigate the impact of any commodity inflation and demonstrate steady growth in operating profit and debt protection metrics. Quantitatively, debt to EBITDA would need to be maintained on a sustainable basis at below 6.5 times and EBITA to Interest materially above 1.0 times while maintaining positive free cash flow. The principal methodology used in this rating was the Global Restaurant 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. Sagittarius Restaurants LLC, headquartered in Lake Forest, California, operates and franchises Mexican QSRs under the Del Taco brand name. The company had 551 units in 17 states as of 2012 year-end. Revenues were approximately $360 million for the twelve months ended September 30, 2012. Sagittarius is owned by a consortium of private equity firms. SEALED AIR: Moody's Assigns B1 Rating to New US$425MM Sr. Notes --------------------------------------------------------------- Moody's Investors Service affirmed the Ba3 Corporate Family Rating and the Ba3-PD Probability of Default Rating of Sealed Air Corp. and assigned a B1 rating to the proposed $425 million senior unsecured notes due 2023. A Speculative Grade Liquidity rating of SGL-2 was also assigned. The ratings outlook is stable. The proceeds of the notes will be used to fund the tender offer of the company's outstanding $400 million 7.875% senior notes due 2017, which commenced on March 7. In conjunction with the tender offer, Sealed Air is soliciting consents of holders of the notes to eliminate certain of the restrictive covenants in the indenture. The consent payment deadline is March 20, 2013 and the tender offer will expire on April 3, 2013, unless earlier terminated by the company. The company expects the early payment date to occur on March 21, 2013. Moody's took the following rating actions: Sealed Air Corp. Affirmed Ba3 corporate family rating Affirmed Ba3-PD probability of default rating Assigned B1 (LGD 5-70%) to $425 million of senior unsecured notes due 2023 Affirmed $500 million Sr. Sec. Revolving Credit Facility due 10/03/2016, Ba1 (LGD 2-16% from 17%) Affirmed $200 million Sr. Sec. Multi Curr. Rev. Credit Facility due 10/03/2016, Ba1 (LGD 2-16% from 17%) Affirmed $794.61 million Sr. Sec. Term Loan A due 10/03/2016, Ba1 (LGD 2-16% from 17%) Affirmed CAD 82.71 million Sr. Sec. Term Loan A due 10/03/2016, Ba1 (LGD 2-16% from 17%) Affirmed JpnY 6,353.60 million (originally JPY 6,400 million) Sr Sec Term Loan A1 due 10/03/2016, Ba1 (LGD 2-16% from 17%) Affirmed $609.5 million Sr Sec Term Loan B1 due 10/03/2018, Ba1 (LGD 2-16% from 17%) Affirmed $750 million 8.375% Senior Notes due 09/15/2021, B1 (LGD 5-70% from 72%) Affirmed $400 million 7.875% Senior Notes due 06/15/2017, B1 (LGD 5-70% from 72%) (To be withdrawn after transaction closes) Affirmed $750 million 8.125% Senior Notes due 09/15/2019, B1 (LGD 5-70% from 72%) Affirmed $425 million 6.500% Senior Notes due 12/01/2020, B1 (LGD 5-70% from 72%) Affirmed $450 million 6.875% Senior Notes due 07/15/2033, B1 (LGD 5-70% from 72%) Assigned Speculative Grade Liquidity Rating SGL-2. Sealed Air B.V. Affirmed EUR 55.78 million Sr. Sec. Term Loan A due 10/03/2016, Ba1 (LGD 2-16% from 17%) Affirmed EUR 150 million Sr Sec Term Loan B1 due 10/03/2018, Ba1 (LGD 2-16% from 17%) Ratings Rationale: The Ba3 corporate family rating reflects the company's scale (as measured by revenue), wide geographic exposure and low customer concentration of sales. Sealed Air has a track record of successful innovation and continues to invest in R&D. The company is also an industry leader in certain segments. The company's customer base is highly diverse, with no single customer representing more than 10% of its 2012 net sales. Sealed Air has maintained long-term relationships with many of its top customers and has a significant base of equipment installed on the customers' premises. Approximately 50% of sales are from food and food processing related end markets. The company also has a good liquidity profile supported by cash on the balance sheet, cash flow generation and availability under revolving credit facilities. The rating is restrained by weakness in certain credit metrics, a disparate product line and the concentration of sales in cyclical and event risk prone segments. The rating is also restrained by the significant competition in the fragmented market, some commoditized products, the mixed contract and cost pass through position, and uncertainty of the timing of the asbestos related liability and related tax refunds. Despite an overlap in customers and distribution channels, Sealed Air's product lines are substantially unrelated. Sealed Air has a significant exposure to cyclical and event risk prone end markets (protective packaging and meat). All of the company's segments operate in competitive and fragmented markets and will need to continue to develop new products and innovate in order to maintain their competitive advantage as many innovations eventually may be copied. The ratings could be downgraded if there is deterioration in credit metrics or the operating and competitive environment. Sealed Air will also need to maintain adequate liquidity including sufficient cash on hand to cover the asbestos related liability and daily cash needs, sufficient availability under the revolver, and adequate cushion under financial covenants. Specifically, the rating could be downgraded if debt to EBITDA remains above 5.3 times, EBITA interest coverage remains below 2.2 times, free cash flow to debt remains below the mid-single digits, and/or the EBITA margin declines below 10.5%. The ratings could be upgraded if Sealed Air sustainably improves credit metrics within the context of a stable operating and competitive environment. Sealed Air will also need to maintain a good liquidity profile including sufficient cash on hand to cover daily cash needs and a significant portion of the asbestos related liability, sufficient availability under the revolver, and adequate cushion under financial covenants. Specifically, the ratings could be upgraded if debt to EBITDA declines below 4.6 times (including the asbestos related liability), EBITA interest coverage rises above 3.2 times, free cash flow to debt increases above 8%, and/or the EBITA margin rises above 14%. The principal methodology used in this rating was the Global Packaging Manufacturers: Metal, Glass, and Plastic Containers Industry Methodology published in June 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. SEALED AIR: S&P Rates $425MM Sr. Unsecured Notes Due 2023 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'BB-' senior unsecured debt rating and '4' recovery rating to Sealed Air Corp.'s proposed $425 million senior unsecured notes due 2023. The '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery in the event of a payment default. All of S&P's other ratings on Sealed Air Corp., including the 'BB- ' corporate credit rating, remain unchanged. The outlook is stable. The company plans to use proceeds of the notes offering to redeem its $400 million 7.875% notes due 2017. Standard & Poor's ratings on Sealed Air Corp. reflect the company's strong business risk profile and aggressive financial risk profile, including the increased debt leverage resulting from its $4.7 billion acquisition of Diversey Holdings Inc. in October 2011. With sales of about $7.6 billion in 2012 (excluding the recently sold Diversey Japan business), Sealed Air is a leading global manufacturer of various packaging and performance-based materials and equipment systems that serve an array of food, industrial, medical, and consumer applications. Its acquired operations include cleaning and hygiene products and related institutional and industrial cleaning services. Sealed Air generates more than 60% of its revenue outside North America and 24% from developing regions. RATINGS LIST Sealed Air Corp. Corporate credit rating BB-/Stable/-- New Rating Sealed Air Corp. $425 mil. notes due 2023 Senior unsecured BB- Recovery rating 4 SEITEL INC: Moody's Assigns B3 Rating to New US$250MM Notes Issue ----------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Seitel's proposed $250 million senior unsecured notes due 2019. At the same time Moody's affirmed Seitel's B3 Corporate Family Rating and the SGL-2 Speculative Grade Liquidity rating. The rating outlook is stable. Net proceeds from the note offering together with cash on hand, will be used to repurchase the existing $275 million 9.75% senior notes. Moody's will withdraw the rating on the 9.75% notes upon their full redemption. The new note rating is subject to us receiving final documentation. "The new notes will push out Seitel's debt maturity and lower interest cost," commented Sajjad Alam, Moody's Analyst. "The planned $25 million debt reduction will also reduce future debt service burden and improve leverage metrics, although these benefits would accrue in exchange for lower near term liquidity." Issuer: Seitel, Inc. Assignments: Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD4, 56 %) Affirmations: Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Speculative Grade Liquidity Rating, Affirmed SGL-2 Ratings Rationale: The new notes are rated B3, the same level as the CFR, reflecting the relatively small amount of priority-claim secured debt ($30 million ABL revolver) in Seitel's capital structure. However, if the relative proportion of secured debt were to increase, the notes could get notched down from the CFR to Caa1. The notes will have upstream guarantee from all of Seitel's domestic restricted subsidiaries. Seitel's B3 CFR reflects its small size within the oilfield services industry, high leverage considering the cyclical nature of the seismic services business and the significant ongoing capital expenditures necessary to acquire new data and maintain competitive advantage. The rating also considers the private ownership of the company and its hard-to-value data library. The rating is supported by Seitel's significant market position as a seismic data provider in North America, its strong margins and flexible cost structure, and healthy industry fundamentals. The SGL-2 Speculative Grade Liquidity rating reflects good liquidity through early 2014. Proforma for refinancing transactions, Seitel would have $30 million of cash at December 31, 2012 and a $30 million undrawn secured revolving credit facility. Operating cash flow and cash on hand should fully cover all of Seitel's 2013 capital expenditures as Moody's expects the company to generate free cash flow. The SGL-2 is tempered by the relatively small size of the revolving credit facility and limited alternate liquidity given that the company's assets are encumbered. The stable outlook reflects Moody's view that Seitel will manage its capital budget and liquidity prudently. Given Seitel's small size within the broader oilfield services industry and the highly volatile nature of seismic services demand, an upgrade to B2 is unlikely without a significant reduction in leverage. An upgrade is possible if Seitel can sustain debt/cash EBITDA below 2x. Deterioration in operating performance or additional borrowings that raises leverage above 4x or erodes combined cash and revolver liquidity below $60 million could prompt a downgrade. The principal methodology used in rating Seitel was the Global Oilfield Services Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Seitel, Inc. is a Houston, Texas based provider of seismic data and related services to the oil and gas industry in North America. SEITEL INC: S&P Assigns 'B' Rating to $250MM Notes Due 2019 ----------------------------------------------------------- Standard & Poor's Ratings Services said it has assigned its 'B' issue-level rating and '3' recovery rating to Houston, Texas-based Seitel Inc.'s proposed $250 million senior unsecured notes due 2019. The '3' recovery rating indicates S&P's expectation of meaningful (50% to 70%) recovery in the event of a default. The company expects to use the proceeds of the proposed notes to refinance its existing $275 million of senior unsecured notes due 2014 (the remaining $25 million will be funded with cash). The ratings on seismic data provider Seitel Inc. reflect S&P's assessment of the company's "vulnerable" business risk, "aggressive" financial risk, and "adequate" liquidity. The ratings incorporate the company's large onshore seismic data library in key North American resource plays, as well as the uptick in North American exploration and production (E&P) spending over the last three years, which has improved Seitel's liquidity and debt leverage measures. RATINGS LIST Seitel Inc. Corporate credit rating B/Stable/-- New Rating Proposed $250 mil sr unsecd nts due 2019 B Recovery rating 3 SHREE-HARI: Motel Owner Wins Approval of Exit Plan -------------------------------------------------- Bankruptcy Judge Stacey G.C. Jernigan confirmed the Fifth Amended Plan of Reorganization filed by Shree-Hari, Inc. d/b/a Motel 6, after all objections to the Plan were resolved. The plan confirmation hearing began Jan. 29, 2013, and was continued until Feb. 7, 2013. The Fifth Amended Plan was filed Feb. 27. A copy of the Court's March 5, 2013-dated Findings of Fact, Conclusions of Law and Order is available at http://is.gd/J7Um2Rfrom Leagle.com. Shree-Hari, Inc., dba Motel 6, based in Cleburne, Texas, filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 12-30847) in Dallas, on Feb. 6, 2012. Judge Stacey G. Jernigan oversees the case. Christina W. Stephenson, Esq., and Rakhee V. Patel, Esq., at Pronske & Patel, P.C., serves as the Debtor's counsel. In its petition, Shree-Hari estimated $1 million to $10 million in assets and debts. The petition was signed by Ketan Bhakta, director. SOLAR TRUST: Wins Confirmation of Plan After Committee Deal ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Solar Millennium Inc. received court approval of a Chapter 11 reorganization plan March 7, thanks to a settlement hammered out by the official creditors' committee with the liquidators for the German parent Solar Millennium AG. The committee had sued the German parent and affiliates in November, objecting to the parent's $211 million in claims. Without the settlement, the parent would have received the same distribution as other unsecured creditors. The settlement increased the recovery by unsecured creditors to a range of 43% to 55% on $42.5 million in claims. The settlement gave the parent an unsecured claim of $100 million, coupled with a sharing of distributions with other unsecured creditors. The parent's recovery under the settlement was projected to range from 8% to 11%. The parent and other unsecured creditors voted for the plan. Solar Millennium sold two of its solar power projects, intended eventually to generate $110 million in value, according to a court filing. About Solar Millennium Solar Trust of America LLC, Solar Millennium Inc., and nine affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11136) on April 2, 2012. Solar Trust is a joint venture created by Solar Millennium AG and Ferrostaal AG to develop solar projects at locations in California and Nevada. Located in the "Solar Sun Belt" of the American Southwest, the project sites have extremely high solar radiation levels, and allow the Debtors' projects to harness high levels of solar power generation. Projects include the rights to develop one of the world's largest permitted solar plant facilities with capacity of 1,000 MW in Blythe, California. Two other projects contemplated 500 MW solar power facilities in Desert Center, California and Amargosa Valley, Nevada. Although the Debtors have obtained highly valuable transmission right and permits, each project is only in the developmental phase and does not generate revenue for the Debtors. Ferrostaal ceased providing funding two years ago and SMAG, due to its own deteriorating financial condition, stopped providing funding after December 2011. NextEra Energy Resources LLC committed to provide a postpetition secured credit facility and has expressed an interest in serving as stalking horse purchaser for certain of the Debtors' assets. Attorneys at Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. K&L Gates LLP is the special corporate counsel. Ridgecrest Solar Power Project, LLC, and two entities filed for Chapter 11 protection (Bankr. D. Del. Case Nos. 12-11204 to 12-11206) on April 10, 2012. Ridgecrest Solar, et al., are affiliates of Solar Trust of America LLC. STA Development, LLC, one of the debtors that filed for bankruptcy April 2, owns 100% of the interests in Ridgecrest, et al. Ridgecrest Solar Power estimated up to US$50,000 in assets and debts. Ridgecrest Solar I, LLC, estimated up to US$50,000 in assets and up to US$10 million in liabilities. In July 2012, NextEra Energy Inc. received formal authority to buy the unfinished 1,000-megawatt facility in Blythe, California, owned by Solar Millennium Inc. NextEra is paying US$10 million in cash plus as much as $40 million when the project is finished. The Delaware Bankruptcy Court also approved the sale of the 500- megawatt project under development in Desert Center, California, to BrightSource Energy Inc. for a price that may reach about US$30 million. STEPHEN ALLEN WEST: US Trustee Response Deadline Moved to August ---------------------------------------------------------------- Bankruptcy Judge Paul Manners signed off on a stipulation and consent order between debtor Stephen Allen West, Jr., and Judy A. Robbins, the United States Trustee for Region 4, to further extend the time within which the United States Trustee may file any objection or other responsive pleading that she may have to the Debtor's Motion for an Order Administratively Closing Case Subject to Reopening for Entry of Discharge, but have not agreed to extend the time within which any creditor or any other party in interest may object to the Motion. The parties agree to extend the U.S. Trustee's response deadline to Aug. 30, 2013. A copy of the Stipulation and Consent Order dated Feb. 25, 2013, is available at http://is.gd/3ltO5afrom Leagle.com. Stephen Allen West, Jr., filed for Chapter 11 bankruptcy (Bankr. D. Md. Case No. 08-19180). Counsel to the Debtor is: Mary Joanne Dowd, Esq. ARENT FOX LLP Washington, DC Tel: (202) 857-6000 Fax: (202) 857-6395 E-mail: Dowd.mary@arentfox.com SUDANO INC: S. Bongiovanni Can't Represent Mother in Appeal ----------------------------------------------------------- Sebastian Bongiovanni, Jr., is enjoined from representing her mother, Mildred, in the Chapter 11 cases of Sudano, Inc., Sortino Realty Corp. and Couva Associates Ltd, according to Chief District Judge Carol Bagley Amon in a March 1, 2013 order in response to Mr. Bongiovanni's notice of appeal styled as SEBASTIAN BONGIOVANNI, Jr. O.B.O. MILDRED BONGIOVANNI Appellant, v. JANICE GRUBIN, Trustee, et al., Appellees, Case No. No. 12-cv-6387 (CBA)(E.D.N.Y.). The U.S. District Court for the Eastern District of New York agreed with Janice Grubin that the assignment of rights against the estate of S. Bongiovanni Jr. does not confer standing to bring claims against Ms. Grubin -- who served as trustee for the estates of Sudano, Sortino and Couva -- or against the Debtor estates themselves. Moroever, the District Court noted, because any shares of the Debtor corporations held by Mrs. Bongiovannio were canceled upon confirmation of the reorganization plan in 2005, the assignment of such non-existent shares to Bongiovanni Jr. cannot not confer standing unto him. Bongiovanni Jr. may assist and advise his mother as an "advisor out of court." Out of consideration for Mrs. Bongiovanni's interests, the Court accepted the Notice of Appeal, the Designation of Record of Appeal, the Statement of Issues, and the December 12 appeal brief; but going forward, the district judge said, Bongiovanni Jr. may not sign or file legal papers, advance claims, correspond with opposing counsel, or argue or otherwise appear before the Court on Mrs. Bongiovanni's behalf in the appeal. Judge Amon has given Ms. Grubin until March 12 to file a response to Mrs. Bongiovanni's brief. Mrs. Bongiovanni's reply brief is due by March 26. A copy of Judge Amon's March 1, 2013 order is available at http://is.gd/dEbsJPfrom Leagle.com. SUNSHINE HOTELS: Sec. 341 Meeting of Creditors on March 12 ---------------------------------------------------------- The U.S. Trustee will convene a meeting of creditors in the Chapter 11 case of Sunshine Hotels LLC on March 12, 2013, at 9:30 a.m. The meeting will be held at US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, Arizona. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible officer of the Debtor under oath about the Company's financial affairs and operations that would be of interest to the general body of creditors. About Sunshine Hotels Sunshine Hotels, LLC and Sunshine Hotels II, LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-01560 and 13-01561) on Feb. 4, 2013, in Yuma Arizona. Sunshine Hotels owns SpringHill Suites by Marriott hotel, a three- story building with 63 suites with indoor pool, spa, meeting room and fitness room on a 2.26-acre property in Hisperia, California. The property is valued at $9.20 million and secures a $5.72 million debt. Sunshine Hotels II owns the Courtyard by Marriott hotel, which has a four-story building with 131 rooms and 4 suites with restaurant and bar, indoor pool, conference center on a 2.74-acre property in Hisperia, California. The property is valued at $20.4 million and secures a $13 million debt. VERSO PAPER: Moody's Downgrades Rating on 2nd Lien Notes to Caa2 ---------------------------------------------------------------- Moody's Investors Service downgraded Verso Paper Holdings LLC's second lien notes to Caa2 (LGD5 79%) from Caa1 (LGD5 72%). Moody's also affirmed the B3 corporate family rating, B3-PD probability of default rating, the negative outlook and the SGL-3 speculative grade liquidity rating, reassigned them to Verso and withdrew them from Verso Paper Finance Holdings LLC, as all rated debt now resides at Verso. The rating action reflects the impact of Verso's recently completed debt exchange, which eliminated all debt at the Holdco and added $73 million of principal to the first lien notes at Verso. Downgrades: Issuer: Verso Paper Holdings LLC Senior Subordinated Regular Bond/Debenture Aug 1, 2016, Downgraded to LGD6, 94 % from LGD6, 91 % Senior Secured Bank Credit Facility May 4, 2017, Downgraded to LGD2, 24 % from LGD2, 21 % Senior Secured Regular Bond/Debenture Feb 1, 2019, Downgraded to Caa2 from Caa1 Senior Secured Regular Bond/Debenture Feb 1, 2019, Downgraded to LGD5, 79 % from LGD5, 72 % Senior Secured Regular Bond/Debenture Jan 15, 2019, Downgraded to LGD2, 24 % from LGD2, 21 % Senior Secured Regular Bond/Debenture Jan 15, 2019, Downgraded to LGD4, 54 % from LGD3, 47 % Upgrades: Issuer: Verso Paper Holdings LLC Senior Secured Regular Bond/Debenture Aug 1, 2014, Upgraded to LGD5, 79 % from LGD5, 87 % Reinstatements: Issuer: Verso Paper Holdings LLC Speculative Grade Liquidity Rating, Reinstated to SGL-3 Corporate Family Rating, Reinstated to B3 Probability of Default Rating, Reinstated to B3-PD Outlook Actions: Issuer: Verso Paper Finance Holdings LLC Outlook, Changed To Rating Withdrawn From Negative Affirmations: Issuer: Verso Paper Holdings LLC Senior Subordinated Regular Bond/Debenture Aug 1, 2016, Affirmed Caa2 Senior Secured Bank Credit Facility May 4, 2017, Affirmed Ba3 Senior Secured Bank Credit Facility May 4, 2017, Affirmed Ba3 Senior Secured Regular Bond/Debenture Aug 1, 2014, Affirmed Caa2 Senior Secured Regular Bond/Debenture Jan 15, 2019, Affirmed B3 Senior Secured Regular Bond/Debenture Jan 15, 2019, Affirmed Ba3 Withdrawals: Issuer: Verso Paper Finance Holdings LLC Probability of Default Rating, Withdrawn , previously rated B3-PD Speculative Grade Liquidity Rating, Withdrawn , previously rated SGL-3 Corporate Family Rating, Withdrawn , previously rated B3 Ratings Rationale: The company's B3 CFR reflects its significant adjusted leverage at over 8x, its weak financial performance and the expectation that the company will continue to face secular demand declines for the various grades of coated paper it produces. Financial performance is expected to improve over the next 12 to 18 months through productivity gains and cost rationalization. The rating is supported by the company's vertically integrated, relatively low cost asset base and its strong market position as the second largest producer of coated papers in North America. The rating of the second lien notes was downgraded because their expected recovery will be diluted with an increase in notes ranking ahead of them, and a decrease in debt ranking behind them. The ratings of the remaining tranches of debt remain the same, however, the loss-given-default for all debt (except the asset based revolver - ABL facility) has deteriorated somewhat, for the same reason. Verso has adequate liquidity (SGL-3), with $62 million of cash and $142 million of committed unused bank lines available (as at December 2012) to fund an expected free cash flow use of $10 million over the next year. With most of Verso's assets secured, the company has limited alternative liquidity. The negative rating outlook reflects the risk of continued deterioration in the company's operating and financial performance, potential increased competition from the largest coated paper manufacturer, NewPage Corporation, as it emerged from bankruptcy protection in December, 2012, with much lower leverage than Verso, as well as the potential for constrained liquidity. A downgrade is likely if Verso's normalized RCF/TD and (RCF- CapEx)/TD remains below 2% and 0%, respectively, for a sustained period of time. Moody's will consider an upgrade if Verso improves its liquidity position and if it is able to de-lever such that it can sustain RCF/TD above 5% and (RCF-CapEx)/TD above 3%. The principal methodology used in this rating was Global Paper and Forest Products Industry published in September 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Memphis, Tennessee, Verso is the second largest coated paper producer in North America producing both coated groundwood and coated freesheet. The company operates eight paper machines at three mills in the US (Maine and Michigan), with total paper production capacity of approximately 1.5 million tons. * Mortgage Buyer Falls Flat on Discounted Debt ---------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that an opinion issued last week by a federal district judge in Omaha, Nebraska, indicates that purchasers buying defaulted mortgages at discount might sometimes end up paying bankrupt homeowners rather than making a profit. According to the report, U.S. District Judge Joseph F. Bataillon, ending an opinion in a nascent class lawsuit brought on behalf of homeowners who filed bankruptcy, said he was "troubled by the prospect that this case may involve a third-party debt buyer attempting to collect money from a consumer on a debt she does not owe." The report relates that the case involved a homeowner who abandoned a home after filing for Chapter 7 bankruptcy. Bankruptcy discharged the mortgage debt as an obligation owing by the homeowner. The mortgage remained a lien on the home. The debt evidently was sold to a collection agency, which sent letters to a homeowner making an offer where she could pay about one-third of the mortgage debt for a "complete satisfaction of the lien on the property." The mortgage buyer filed a motion to dismiss the class suit brought by the homeowner under the federal Fair Debt Collection Practices Act. Judge Bataillon, the report relates, denied the motion in 17-page opinion on March 4, refusing to accept the defendant's numerous arguments that it wasn't trying to collect a debt erased in bankruptcy. Relying on opinions from the U.S. appeals courts in Atlanta and Cincinnati, he said the collection letter was "at best confusing to an unsophisticated consumer and at worst an intentionally misleading attempt to induce unsuspecting consumers into paying money on nonexistent debts." Although the letter said that the debt was discharged, Judge Bataillon characterized the letter as implying that payment was obligatory. He said the letter showed an intent to collect the underlying debt, not enforce a security interest. Judge Bataillon said that a suit under FDCPA "is not defeated by clever arguments for technical loopholes that seek to devour the protections Congress intended." The case is Donnelly-Tovar v. Select Portfolio Servicing Inc., 12-cv-00203, U.S. District Court, District of Nebraska (Omaha). * Bankruptcy Judge Bruce Markell Steps Down to Teach ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that U.S. Bankruptcy Judge Bruce A. Markell in Las Vegas will step down from the bench in July to become the Jeffrey Stoops Professor of Law at Florida State University. Judge Markell was appointed to the bankruptcy court in 2004. He graduated No. 1 in his class at the University of California at Davis, King Hall School of Law, where he was editor-in-chief of law review. Before becoming a judge, he was on the law faculties at the University of Nevada, Las Vegas, and Indiana University. He also had been a visiting professor at Harvard University. Judge Markell worked up from associate to a partner at Sidley & Austin LLP. Judge Markell said in an interview he is returning to teaching because "I like the academic style." "I still have lots left to write," he said. Las Vegas will have vacancies in two of the city's three bankruptcy judgeships. Bankruptcy Judge Linda B. Riegle previously announced she will step down in August, to work part time as a judge in Las Vegas on what's called recall status. At FSU, Judge Markell will teach bankruptcy, contracts and secured transactions. * Moody's Maintains Negative Outlook on State Housing Agencies -------------------------------------------------------------- Moody's Investors Service continues to have a negative outlook on the state housing finance agency sector as the US housing market improves but many of the drivers of HFA credit quality do not. Economic conditions such as high unemployment continue to challenge low and moderate income homeowners and renters that are the HFA's natural customers, while low interest rates continue to diminish returns on HFA investments, says the rating agency in a new report. Low conventional mortgage rates also persist, eroding the advantages of HFA-issued, tax-exempt bonds. "While the fundamental supply and demand conditions in the US housing market have improved, HFA credit drivers are more tied to various indicators in the broader US economy and capital markets, especially unemployment and interest rates," says Rachael McDonald, Moody's Vice President and Senior Analyst and lead author of "Outlook for US State Housing Finance Agencies for 2013 Remains Negative." "We expect these economic headwinds will continue to drive near- term challenges for HFAs," says Moody's McDonald. Most HFAs are well-positioned to take advantage should the economic recovery pick up, says Moody's. HFAs have generally maintained stable financial performance during the sluggish post- crisis economy. They have also made operational changes that will serve them well should stronger economic growth take a firm hold. Beyond high unemployment and low interest rates, current low home prices -- compared to when most HFA loans were originated -- also continue to challenge HFAs. Approximately 47% of HFA single family whole loan portfolios were originated between 2006 and 2008, when home prices in the US were at their peak. Additional drivers of the negative outlook are the weakening credit quality of counterparties, the high liquidity fees for variable rate debt, and the cloud of uncertainty hanging over government policy. "Changes to the business model or elimination of Fannie Mae and Freddie Mac, or changes to the role of the Federal Housing Administration could impact the ability of many HFAs to originate and package loans," says Moody's McDonald. "There is also uncertainty around the fate of some federal subsidy programs that are utilized by the HFAs as well as the municipal bond tax exemption. It is unclear when the direction of these policy issues will be resolved." * Hawaiian Lawyer Wing Ng Suspended From 1-Year Law Practice ------------------------------------------------------------ Wing C. Ng has been suspended from the practice of law in Hawaii for one year and one day effective as of April 1, 2013. The Supreme Court of the State of Hawaii entered the suspension order on March 1, 2013 in the case captioned OFFICE OF DISCIPLINARY COUNSEL, Petitioner, v. WING C. NG, Respondent, Case No. CAD-12-0000414, a copy of which is available at http://is.gd/gWjiT3from Leagle.com. In the March 1 order, the Supreme Court held that Mr. Ng was inexperienced in bankruptcy law at the time of the filing of a Chapter 11 bankruptcy proceeding in a Hawaii bankruptcy court. The Supreme Court also ruled that Mr. Ng's filing of a Chapter 7 petition was a bad faith attempt to further delay a California litigation. The Court also held that Mr. Ng has committed multiply ethical violations and refused to acknowledge the wrongful nature of his conduct. Mr. Ng is also compelled to pay all appropriate costs of the sanctions proceeding in addition to any other requirements for reinstatement imposed by the rules of the Hawaii Supreme Court. * BOND PRICING -- For Week From March 4 to 8, 2013 -------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AES EASTERN ENER 9.00 1/2/2017 1.750 AES EASTERN ENER 9.67 1/2/2029 4.125 AGY HOLDING COR 11.00 11/15/2014 49.375 AHERN RENTALS 9.25 8/15/2013 68.000 ALION SCIENCE 10.25 2/1/2015 52.538 AMBAC INC 6.15 2/7/2087 13.962 ATP OIL & GAS 11.88 5/1/2015 4.500 ATP OIL & GAS 11.88 5/1/2015 4.375 ATP OIL & GAS 11.88 5/1/2015 4.375 AXL-CALL03/13 7.88 3/1/2017 102.875 BUFFALO THUNDER 9.38 12/15/2014 31.000 CENGAGE LEARN 12.00 6/30/2019 30.625 CENGAGE LEARNING 13.75 7/15/2015 20.500 CHAMPION ENTERPR 2.75 11/1/2037 0.500 DOWNEY FINANCIAL 6.50 7/1/2014 64.250 DYN-RSTN/DNKM PT 7.67 11/8/2016 4.500 EASTMAN KODAK CO 7.00 4/1/2017 12.775 EASTMAN KODAK CO 7.25 11/15/2013 13.250 EASTMAN KODAK CO 9.20 6/1/2021 11.000 EASTMAN KODAK CO 9.95 7/1/2018 12.260 EDISON MISSION 7.50 6/15/2013 51.000 FIBERTOWER CORP 9.00 11/15/2012 3.000 FIBERTOWER CORP 9.00 1/1/2016 12.000 FORD MOTOR CRED 6.52 3/10/2013 100.000 FULL GOSPEL FAM 8.40 6/17/2031 10.067 GE-CALL03/13 5.13 3/15/2020 100.000 GEOKINETICS HLDG 9.75 12/15/2014 51.250 GEOKINETICS HLDG 9.75 12/15/2014 55.625 GLB AVTN HLDG IN 14.00 8/15/2013 21.000 GMX RESOURCES 4.50 5/1/2015 35.000 GMX RESOURCES 9.00 3/2/2018 20.000 HAWKER BEECHCRAF 8.50 4/1/2015 9.000 HAWKER BEECHCRAF 8.88 4/1/2015 16.000 HORIZON LINES 6.00 4/15/2017 30.000 INTL LEASE FIN 6.38 3/25/2013 100.127 JAMES RIVER COAL 3.13 3/15/2018 25.000 JAMES RIVER COAL 4.50 12/1/2015 34.375 LAS VEGAS MONO 5.50 7/15/2019 21.000 LBI MEDIA INC 8.50 8/1/2017 26.875 LEHMAN BROS HLDG 0.25 12/12/2013 22.000 LEHMAN BROS HLDG 0.25 1/26/2014 22.000 LEHMAN BROS HLDG 1.00 10/17/2013 22.000 LEHMAN BROS HLDG 1.00 3/29/2014 22.000 LEHMAN BROS HLDG 1.00 8/17/2014 22.000 LEHMAN BROS HLDG 1.00 8/17/2014 22.000 LEHMAN BROS HLDG 1.25 2/6/2014 22.000 MASHANTUCKET PEQ 8.50 11/15/2015 7.125 MASHANTUCKET PEQ 8.50 11/15/2015 7.125 MASHANTUCKET TRB 5.91 9/1/2021 7.500 MF GLOBAL LTD 9.00 6/20/2038 80.000 NUVASIVE INC 2.25 3/15/2013 100.000 OVERSEAS SHIPHLD 8.75 12/1/2013 51.000 PENSON WORLDWIDE 12.50 5/15/2017 41.500 PENSON WORLDWIDE 12.50 5/15/2017 24.500 PLATINUM ENERGY 14.25 3/1/2015 51.500 PLATINUM ENERGY 14.25 3/1/2015 51.500 PMI CAPITAL I 8.31 2/1/2027 0.125 PMI GROUP INC 6.00 9/15/2016 32.250 POWERWAVE TECH 1.88 11/15/2024 2.375 POWERWAVE TECH 1.88 11/15/2024 2.375 POWERWAVE TECH 2.75 7/15/2041 2.375 POWERWAVE TECH 3.88 10/1/2027 3.150 POWERWAVE TECH 3.88 10/1/2027 2.250 RESIDENTIAL CAP 6.88 6/30/2015 29.500 RLGY-CALL03/13 12.38 4/15/2015 100.875 SAVIENT PHARMA 4.75 2/1/2018 27.000 SCHOOL SPECIALTY 3.75 11/30/2026 45.125 TERRESTAR NETWOR 6.50 6/15/2014 10.000 TEXAS COMP/TCEH 10.25 11/1/2015 9.625 TEXAS COMP/TCEH 10.25 11/1/2015 11.250 TEXAS COMP/TCEH 10.25 11/1/2015 10.500 TEXAS COMP/TCEH 10.50 11/1/2016 15.875 TEXAS COMP/TCEH 10.50 11/1/2016 9.500 TEXAS COMP/TCEH 15.00 4/1/2021 22.900 TEXAS COMP/TCEH 15.00 4/1/2021 25.750 THQ INC 5.00 8/15/2014 45.500 TL ACQUISITIONS 10.50 1/15/2015 35.000 TL ACQUISITIONS 10.50 1/15/2015 22.625 USEC INC 3.00 10/1/2014 34.000 VALERO LOGISTICS 6.05 3/15/2013 100.570 VERSO PAPER 11.38 8/1/2016 49.887 WCI COMMUNITIES 4.00 8/5/2023 0.375 WCI COMMUNITIES 4.00 8/5/2023 0.375 ********* 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 ***