/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130318.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 18, 2013, Vol. 17, No. 76 Headlines 1220 SOUTH OCEAN: Court Approves Hiring of Rappaport as Counsel 250 AZ: Court Permits Hiring of Breen Olson as Attorneys 710 LONG RIDGE: U.S. Trustee to Appoint Patient Care Ombudsman 710 LONG RIDGE: Taps Coles Schotz as Counsel & Alvarez as Advisor A123 SYSTEMS: Judge Says Creditors Can Vote on Liquidation Plan A123 SYSTEMS: Fisker in Talks With New Owner for Battery Contract A1A GOLD: Case Summary & 5 Unsecured Creditors ABUNDANT LIFE: Case Summary & 20 Largest Unsecured Creditors ACME ACRES: Case Summary & Top Unsecured Creditors ADAMS PRODUCE: Court Okays Hiring of Dent Baker as Accountant ADVANCED INTERACTIVE: Ends Up in Chapter 7 Liquidation AHERN RENTALS: To Pay Fees for Attracting Exit Lenders ALCO CORP: Wins Confirmation of Amended Reorganization Plan ALAN MURRAY: Court Cuts Committee Counsel's Fee to $6,000 ALETHEIA RESEARCH: Court Okays Greenberg Glusker as Counsel ALETHEIA RESEARCH: Court Okays Avant Advisory as Financial Advisor ALETHEIA RESEARCH: Jeffrey Golden Appointed as Chapter 11 Trustee ALETHEIA RESEARCH: U.S. Trustee Forms 3-Member Committee ALETHEIA RESEARCH: Files Schedules of Assets and Liabilities ALPHA PARTNERS: Taps Alan B. Rich as Special Litigation Counsel AMEREN CORP: S&P Affirms 'CCC+' Corporate Credit Rating AMEREN ENERGY: Poor Performance Prompts Moody's to Cut CFR to B3 AMERICAN AIRLINES: AMR's Republic Deal Approved AMERICAN AIRLINES: Seeks Last Exclusivity Expansion AMERIGAS PARTNERS: Fitch Affirms 'BB' Issuer Default Ratings AMERICAN SUZUKI: Prudential California's Broker Services ARCAPITA BANK: Seeking Additional Agreements to Accompany Plan ASBURY AUTOMOTIVE: S&P Raises Corporate Credit Rating to 'BB' ATARI INC: Game-Maker Gets Final $15 Million Loan Approval ATARI INC: Taps Akin Gump, BMC, Hunton, Perella & Protiviti Firms ATARI INC: Committee Hires Cooley as Counsel & Duff as Advisor BASIN STREET: Illinois Court Junks Suit on Plan Conspiracy Charges BEALL CORP: Seeks Court Okay to Hire Eide Bailly as Accountants BENADA ALUMINUM: Court OKs Committee Hiring of Deloitte Financial BERNARD L. MADOFF: Customers In Line for Add'l $505MM Distribution BERNARD L. MADOFF: Swaps Not Completely Protected, Rakoff Rules BRIER CREEK: Court Okays Hiring of Grant Thornton as Accountants CANYONS AT DEBEQUE: Hires Fairfield and Woods as Mediator CARL'S PATIO: Taps CBIZ Accounting, Cross Simon, Platzer Swergold CARY CREEK: Wins Court's Interim Approval of DIP Financing CASCADE AG: Committee Can Retain Schwabe Williamson as Counsel CBS I: Court Approves Hiring of Kenneth Funsten as Expert Witness CEDAR ARCH: Case Summary & 20 Largest Unsecured Creditors CENTENNIAL BEVERAGE: Court Okays Hiring of Haynes & Boone CENTENNIAL BEVERAGE: Court OKs Hiring of Hank Dickerson as Broker CENTENNIAL BEVERAGE: Court Approves RGS LLC as Financial Advisor CENTURYLINK INC: Moody's Cuts Debt Rating to Ba2; Assigns Ba1 CFR CHARLES GLUTH: Case Summary & 20 Largest Unsecured Creditors COLLECTIVE BRANDS: Loan Increase Cues Moody's to Cut Rating to B2 DEX MEDIA WEST: Bank Debt Trades at 24% Off in Secondary Market DETROIT, MI: Jones Day Lawyer to Lead Detroit Restructuring DOUGLAS DYNAMICS: Moody's Retains B1 CFR and Senior Loan Ratings EDUCATION HOLDINGS: Prepackaged Plan Declared Effective ERNESTO PEREZ: Ex-Wife's Bid to Dismiss Case Partially Denied EXETER HOLDING: State Court to Hear Suits v. First American et al EXPERT GLOBAL: S&P Puts B Issuer Credit Rating on CreditWatch Neg FKF 3 LLC: Default Judgment Entered in Clawback Suits FERRAIOLO CONSTRUCTION: Voluntary Chapter 11 Case Summary FIBERTOWER CORP: Keeps Chapter 11 Control Amid Wind-Down GF 5001: Case Summary & 9 Largest Unsecured Creditors GILBERT AUTO: Case Summary & 20 Largest Unsecured Creditors GLATFELTER COMPANY: Dresden Papier Purchase is Credit Positive GULF FLEET: Trustee Gets Favorable Ruling in Suit vs. Triple "C" HARSCO CORP: Moody's Cuts Senior Unsecured Debt Rating to 'Ba1' HAVRE AERIE: Groven's $290,700 Judgment Lien Avoidable HERTZ CORP: Moody's Rates New $250 Million Senior Notes 'B2' HERTZ CORP: S&P Assigns 'B' Rating to $250MM Sr. Unsecured Notes HORNBECK OFFSHORE: Moody's Assigns Ba3 Rating to New Notes Issue HORNBECK OFFSHORE: S&P Rates $450MM Senior Unsecured Notes 'BB-' HOSTESS BRANDS: Bakery Union Objects to Job Losses From Strike INDIA STREET: Case Summary & 3 Unsecured Creditors INFOLINK GROUP: Dist. Court Says Plan Order Binding on Prontocom ISOLA USA: S&P Lowers Corp. Credit Rating to 'B-'; Outlook Neg. JDS HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors JEAD AUTO: Voluntary Chapter 11 Case Summary JILL HOLDINGS: S&P Revises Outlook to Positive & Affirms 'B-' CCR K-V PHARMACEUTICAL: Renews Fight with FDA Over Drug KEVEN McKENNA: $2,000 Judgment for Ex-Paralegal Affirmed LEGENDS GAMING: Wants to Take Chickasaw Tribe's $6.25 Million LEROY BYRD: Abandons Stake in Idaho Property Under Confirmed Plan LIFECARE HOLDINGS: IRS Wants Cash for Tax Claim After Auction LOMBARDI AND LOMBARDI: Voluntary Chapter 11 Case Summary LON MORRIS: Cleans Up Mistakes, Sells Mineral Rights LUCILLE INC: Case Summary & 3 Unsecured Creditors MERRILL CORP: S&P Raises CCR to 'B-' & Rates $30MM Facility 'B+' MF GLOBAL: To Circulate Supplemental Disclosure Materials NATIONAL CENTURY: Credit Suisse to Pay $400M to End Fraud Suits NATURAL PORK: Taps Bose McKinney as Indiana Real Estate Counsel NATURAL PORK: Has Court Okay to Hire Frost PLLC as Tax Accountants NATURAL PORK: Court Okays Variant Capital as Investment Banker OASIS OIL: Case Summary & Top Unsecured Creditors OMTRON USA: Can Hire BrightFields as Environmental Consultant OMTRON USA: Court Extends Plan Filing Period Until June 10 OMTRON USA: Has Court's Nod to Hire Mentor Group as Appraiser OMTRON USA: Committee Can Hire Womble Carlyle as Bankr. Counsel ORBITZ WORLDWIDE: Moody's Assigns 'B2' Rating to $450MM Bank Debt ORMET CORP: $90-Mil. DIP Financing Slammed By PBGC, Creditors PACIFIC RUBIALES: Moody's Rates New US$1-Bil. Notes Offer 'Ba2' PATRIOT COAL: Files Motion to Reject CBAs With UMMA PEAK RESORTS: Can Use Rossignol Ski Cash Collateral PEAK RESORTS: Can Obtain $2-Mil. of Financing PULSE ELECTRONICS: Has Forbearance Agreement With Oaktree QUALTEQ INC: Creditors Begin Voting on Full-Payment Plan REGEN BIOLOGIC: FDA Says It Caved to Politics In Clearing Implant RESIDENTIAL CAPITAL: Fed, Ally Balk at Bid to End Consent Decree RESIDENTIAL CAPITAL: Ally Objects to Changes to Protective Order RESTAURANT HOLDING: Moody's Changes Ratings Outlook to Negative REVEL AC: Casino to File Prepackaged Chapter 11 March 22 RG STEEL: Sues 34 Companies to Seek Payment of More Than $2.5-Mil. RHYTHM AND HUES: Court Approves JS-Led Auction on March 27 RHYTHM AND HUES: Gets Final Nod for Fox & Universal DIP Financing RHYTHM AND HUES: Can Hire Houlihan Lokey as Investment Banker ROTHSTEIN ROSENFELDT: Ponzi Victims Slam $72M Ch. 11 TD Bank Deal S & S FOOD: Former Officer's Debt Not Dischargeable SABRA HEALTH: Proposed $50MM Stock Issue Gets Moody's B3 Rating SABRA HEALTH: S&P Assigns 'CCC+' Rating to $50MM Series A Shares SENTINEL MANAGEMENT: Allocation of Settlement Proceeds Upheld SK FOODS: Court Denies Motion for Rehearing in "Nageley" Suit SMART TECHNOLOGIES: High Business Risk Prompts Moody's 'Caa1' CFR SMART TECHNOLOGIES: S&P Assigns 'B' CCR; Outlook Stable SRAM LLC: Moody's Assigns B1 Rating to US$725MM Sr. Debt Facility SRAM LLC: S&P Assigns 'BB-' Rating to $725MM Sr. Secured Facility SUNTECH POWER: Maxim Predicts "Likely" Default, Bankruptcy SUNTECH POWER: Misses Payment on 3% Convertible Senior Notes T SORRENTO: Stays in Ch 11; Must File & Confirm Plan by May 8 TG INVESTMENT: Case Summary & 2 Unsecured Creditors THOR INDUSTRIES: Tennessee State Bank Supplements Stay Motion TRIANGLE MAINTENANCE: Ct. Sides With Defendant in Suit vs. Liberty TRIBUNE CO: Trustee Wins Control of $46MM Clawback Suits TRINITY COAL: Seeks Exemption From Mining Regulations TWIN RIVER: Moody's Rates New US$285MM Senior Bank Facility 'B1' TWIN RIVER: S&P Affirms 'BB-' CCR & Rates $285MM Facility 'BB-' UNITED AIRLINES: Ch. 11 Bars DHL Antitrust Suit, 2nd Circ. Told US BENTONITE: Voluntary Chapter 11 Case Summary USA COMMERCIAL: Deloitte Liable for Execs' Fraud, 9th Circ. Told VAUGHAN CO: Court Narrows Claims in Trustee's Suit vs. Wilson VITRO SAB: Settlement With Bondholders Approved in Dallas VWR FUNDING: Moody's Alters Outlook on 'B3' CFR to Stable WILLIAMS LOVE: Settles Pfizer Case, Pays Bills & Emerges Ch. 11 * DSH Payment Reductions Pose Challenges to States and Hospitals * Fraudulently Transferred Property Isn't Estate Property * Student Loan Guarantee Amounts to Separate Obligation * Valuation Date for Lien Strip Off Is Petition Date * Oversight of Student Loan Servicers to be Increased * Senate Says JPMorgan Misled Regulators and Investors * Fed Cites Weakness in Capital Reserves at Goldman, JPMorgan Hit * 11th Cir. Appoints Cynthia Jackson as M.D. Fla. Bankruptcy Judge * BOND PRICING: For Week From March 11 to 15, 2013 ********* 1220 SOUTH OCEAN: Court Approves Hiring of Rappaport as Counsel --------------------------------------------------------------- 1220 South Ocean Boulevard LLC, obtained formal Court approval of Kenneth S. Rappaport, Esq., and the law firm of Rappaport Osborne & Rappaport, PL, as its counsel, nunc pro tunc to Sept. 21, 2012 The Debtor turns to Rappaport to, among other things, represent the Debtor in negotiation with its creditors in the preparation of a plan. Mr. Rappaport, Esq., attested that his firm is disinterested as required by 11 U.S.C. Sec. 327(a). About 1220 South Ocean Boulevard 1220 South Ocean Boulevard, LLC, filed a bare-bones Chapter 11 petition (Bankr. S.D. Fla. Case No. 12-32609) in its home-town in West Palm Beach, Florida. The Debtor disclosed $74 million in total assets and $41.5 million in liabilities as of Sept. 7, 2012. 1220 South Ocean is a resort located in Palm Beach. Owned by real estate developer Dan Swanson, president of Addison Development, 1220 South Ocean sits on 2.5 private and secure acres of land, has 20,000 square feet of living plus an additional 7,000 square feet of loggias, garages & guest house. The resort is located four miles to Palm Beach International Airport. Mr. Swanson other developments include the Phipps Estates in Palm Beach and Addison Estates at the Boca Hotel. Judge Erik P. Kimball oversees the case. Kenneth S. Rappaport, Esq., in Boca Raton, Florida, serves as counsel to the Debtor. 250 AZ: Court Permits Hiring of Breen Olson as Attorneys -------------------------------------------------------- 250 AZ, LLC, obtained court approval to employ Breen, Olson & Trenton, LLP, as its attorneys. As reported by the Troubled Company Reporter on Feb. 1, 2013, the Debtor selected BO&T because BO&T has substantial experience in matters relating to insolvency, reorganization and bankruptcy law. The firm's hourly rates are: Attorneys $350 Paralegals $150 Law Clerk/Bookkeeper $50 to $150 Prepetition, BO&T did extensive work for the Debtor to identify potential capital sources for the multiple LLC's that were owners of the 250 East Fifth Street Building an in "rolling up" those interests into 250 AZ LLC. The firm was paid $342,927 for legal services incurred for the various members of the Debtor. BO&T said it has no connection with any other parties-in-interest or their respective attorneys in this proceeding, which would create a disqualification or conflict of interest. About 250 AZ, LLC 250 AZ, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 13-00851) in Tucson, Arizona, on Jan. 22, 2013. In its schedules, the Debtor disclosed $25 million in assets and $70.8 million in liabilities. 250 AZ owns an 84.70818% tenant in common interest in a 29-story office building located at 250 East Fifth Street, in Cincinnati, Ohio. Breen Olson & Trenton, LLP, serves as counsel to the Debtor. 710 LONG RIDGE: U.S. Trustee to Appoint Patient Care Ombudsman -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey has designated the bankruptcy cases of 710 Long Ridge Road Operating Company II, LLC, and its affiliates as a health care business case within the meaning of Section 101(27A) of the Bankruptcy Code. The U.S. Trustee will appoint a patient care ombudsman in accordance with Section 333 of the Bankruptcy Code. About 710 Long Ridge 710 Long Ridge Road Operating Company II, LLC and four affiliates own sub-acute and long-term nursing care facilities for the elderly in Connecticut. The facilities, which are managed by HealthBridge Management LLC, are Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. 710 Long Ridge and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 13-13653 to 13-13657) on Feb. 24, 2013 to modify their collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU. The Debtors owe $18.9 million to M&T Bank and $7.99 million on loans from the U.S. Department of Housing and Urban Development Federal Housing Administration. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serves as counsel to the Debtors. Logan & Company, Inc. is the claims and notice agent. Alvarez & Marsal Healthcare Industry Group, LLC, is the financial advisor. 710 LONG RIDGE: Taps Coles Schotz as Counsel & Alvarez as Advisor ----------------------------------------------------------------- 710 Long Ridge Road Operating Company II, LLC, and its affiliates are seeking to employ Cole, Schotz, Meisel, Forman & Leonard, P.A., as their general bankruptcy counsel; and Alvarez & Marsal Healthcare Industry Group, LLC, as their financial advisors. Cole Schotz, among others, will advise the Debtors of their rights, powers and duties as debtors-in-possession; advise the Debtors in the negotiation with respect to use of cash collateral and DIP financing; advise and prepare various pleadings & responses to be filed in the Chapter 11 cases; and help the Debtors in formulating, negotiating and promulgating a Chapter 11 plan. Cole Schotz has a bankruptcy retainer of $286,005, which will be held to secure payment of the firm's allowed postpetition fees and expenses and applied to the firm's final invoice and fee application approved by the Court. A&M, among others, will assist the Debtors in the evaluation of and feedback on management's rolling 13-week cash flow forecast; assist in monthly operating reports; and assist in preparing statements of financial affairs and schedules of liabilities. A&M's hourly rates are: Managing Directors $650 - 850 Directors $450 - 650 Analysts/Associates $250 - 450 A&M will receive a $125,000 monthly fee. Both firms have assured the Court that they are "disinterested persons" as defined in the Bankruptcy Code. About 710 Long Ridge 710 Long Ridge Road Operating Company II, LLC and four affiliates own sub-acute and long-term nursing care facilities for the elderly in Connecticut. The facilities, which are managed by HealthBridge Management LLC, are Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. 710 Long Ridge and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 13-13653 to 13-13657) on Feb. 24, 2013 to modify their collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU. The Debtors owe $18.9 million to M&T Bank and $7.99 million on loans from the U.S. Department of Housing and Urban Development Federal Housing Administration. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serve as counsel to the Debtors. Logan & Company, Inc. is the claims and notice agent. Alvarez & Marsal Healthcare Industry Group, LLC, is the financial advisor. A123 SYSTEMS: Judge Says Creditors Can Vote on Liquidation Plan --------------------------------------------------------------- Michael Bathon, writing for Bloomberg News, reported that A123 Systems Inc. (AONEQ), the bankrupt former electric-car battery maker, won court approval to seek votes from creditors on its repayment plan. U.S. Bankruptcy Judge Kevin Carey approved A123's disclosure statement, an outline of its liquidation plan used by creditors to decide whether to vote for or against the plan, the Bloomberg report said, citing court documents filed in Wilmington, Delaware. The company will seek court approval of the plan that distributes the proceeds from selling off substantially all of its assets at a hearing scheduled for April 30, court papers show, Bloomberg said. Bloomberg related that A123 got court approval Dec. 11 to sell the majority of its assets to the U.S. unit of Wanxiang Group Co., China's biggest auto-parts maker. Wanxiang America Corp. acquired substantially all of A123's automotive, grid and commercial business assets for about $256.6 million. The deal received approval from the Committee on Foreign Investment in the U.S. on Jan. 29. CFIUS, as it is known, is a federal interagency group led by the Treasury Department that reviewed the sale after members of Congress expressed national security concerns over allowing a foreign competitor to obtain the technology developed with government backing. 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. An amended Plan slashed the projected returns for unsecured creditors to 32.7%, down from 65%. 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 SYSTEMS: Fisker in Talks With New Owner for Battery Contract ----------------------------------------------------------------- Patrick Fitzgerald at Daily Bankruptcy Review reports Fisker Automotive Inc., the struggling maker of $100,000 sports cars powered by lithium ion batteries, is in talks with A123 Systems' new owner on a revamped battery-supply deal while sparring with the part of the battery maker's estate left behind in bankruptcy. 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. A1A GOLD: Case Summary & 5 Unsecured Creditors ---------------------------------------------- Debtor: A1A Gold, Inc. dba A1A Liquors & Gas A1A Express 586 Timber Trace Court Orange Park, FL 32073 Bankruptcy Case No.: 13-01529 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court Middle District of Florida (Jacksonville) Debtor's Counsel: Jason A. Burgess, Esq. THE LAW OFFICES OF JASON A. BURGESS, LLC 118 West Adams Street, Suite 900 Jacksonville, FL 32202 Tel: (904) 354-5065 E-mail: jason@jasonaburgess.com Scheduled Assets: $1,800,000 Scheduled Liabilities: $2,099,615 A copy of the Company's list of its five largest unsecured creditors is available for free at: http://bankrupt.com/misc/flmb13-01529.pdf The petition was signed by Bhavesh Patel, president. ABUNDANT LIFE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Abundant Life Trust 5077-109 Fruitville Road, #133 Sarasota, FL 34232 Bankruptcy Case No.: 3-03221 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: Miriam L. Sumpter Richard, Esq. FRESH START LAW FIRM, INC. 505 East Jackson Street, Suite 303 Tampa, FL 33602 Tel: (813) 387-7724 Fax: (813) 387-7727 E-mail: miriam@freshstartlawfirm.com Scheduled Assets: $3,850,003 Scheduled Liabilities: $8,732,770 A copy of the Company's list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb13-03221.pdf The petition was signed by Aleksandr Filipskiy, co-trustee. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Keeping Kids in Their Home Foundation Corp. 13-00433 01/15/13 ACME ACRES: Case Summary & Top Unsecured Creditors -------------------------------------------------- Debtor: Acme Acres, LLC 7811 Chubb Road Northville, MI 48168 Bankruptcy Case No.: 13-45044 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Walter Shapero Debtors' Counsel: John J. Stockdale, Jr., Esq. SCHAFER AND WEINER, PLLC 40950 Woodward, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: jstockdale@schaferandweiner.com - and ? Michael E. Baum, Esq. SCHAFER AND WEINER, PLLC 40950 Woodward Avenue, Suite 100 Bloomfield Hills, MI 48304 Tel: (248) 540-3340 E-mail: mbaum@schaferandweiner.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- C&R Leasing Group, LLC 13-45045 Assets: $500,001 to $1,000,000 Debts: $1,000,001 to $10,000,000 Jackie's Transport, Inc. 13-45047 Assets: $500,001 to $1,000,000 Debts: $1,000,001 to $10,000,000 Northville Stock Yard, LLC 13-45048 Assets: $100,001 to $500,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Michael Bates, member. A. A copy of Acme Acres' list of its two largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb13-45044.pdf B. A copy of C&R Leasing Group's list of its two largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb13-45045.pdf C. A copy of Jackie's Transport's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb13-45047.pdf D. A copy of Northville Stock Yard's list of its two largest unsecured creditors is available for free at: http://bankrupt.com/misc/mieb13-45048.pdf Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Michael G. Bates 12-66229 11/30/12 ADAMS PRODUCE: Court Okays Hiring of Dent Baker as Accountant ------------------------------------------------------------- Adams Produce Company, LLC, et al., obtained the U.S. Bankruptcy Court for the Northern District of Alabama's permission to employ Dent, Baker & Company, LLP, as their accountant to analyze and prepare their 2011 and 2012 income tax returns and state franchise tax returns. The Troubled Company Reporter reported on Feb. 19, 2013, that the Debtors had requested that Dent Baker not be required to file an application for compensation and reimbursement of expenses, provided that Dent Baker's fees and expenses do not exceed $30,000. In the event the fees exceed $30,000, Dent Baker will be required to file an application for compensation and reimbursement of expenses. The Debtors will compensate Dent Baker on an hourly basis. To the best of the Debtors' knowledge, Dent Baker is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Adams Produce Adams Produce Company, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-02036) on April 27, 2012, in its home-town in Birmingham, Alabama. Privately held Adams Produce is a distributor of fresh fruits and vegetables to restaurants, government and hospitality establishments across the Southeastern United States. With over 400 employees, Adams Produce services the states of Alabama, Arkansas, Florida, Georgia, Mississippi, and Tennessee. The company was founded by Edwin Calvin Adams in 1903. Adams Produce disclosed $19,545,473 in assets and $41,569,039 and liabilities as of the Chapter 11 filing. A debtor-affiliate, Adams Clinton Business Park, LLC, estimated up to $10 million in assets and liabilities. The Debtors owe PNC Bank, National Association, $750,000 under a term loan, $1.35 million under a real estate loan, and $3.4 million under a revolver. The Debtors are also indebted $2 million under promissory notes. Adams owes $4.4 million in accounts payable to trade and other creditors, and $10.2 million to agricultural commodity suppliers. The Debtors have tapped Burr & Forman as attorneys; CRG Partners Group LLC as financial advisor; and CRG's Thomas S. O'Donoghue, Jr. as chief restructuring officer; and Donlin Recano & Company Inc. as the claims and notice agent. Brian R. Walding, Esq., at Walding LLC, in Birmingham, Alabama, represents the Ad Hoc Committee of Non-Insider Employees as counsel. The Bankruptcy Administrator said that it is not feasible to form a committee of unsecured creditors in the Debtor's case in view of the fact that an insufficient number of unsecured creditors were willing to serve. ADVANCED INTERACTIVE: Ends Up in Chapter 7 Liquidation ------------------------------------------------------ Jamie Santo of BankruptcyLaw360 reported that Advanced Interactive Systems Inc., a provider of high-tech training systems for law enforcement and the military, filed for Chapter 7 in Delaware bankruptcy court on Thursday as it prepares to be liquidated. The report said the Seattle-based company, whose products included weapons-training systems and modular firing ranges, listed assets of about $24.2 million against debts of nearly $72.7 million, according to court documents signed by Chief Financial Officer Michael John Allen. AIS did not provide any explanation for its descent into Chapter 7, according to BLaw360. AHERN RENTALS: To Pay Fees for Attracting Exit Lenders ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that second-lien lenders won't be taking over Ahern Rentals Inc. by default. The closely owned equipment-rental company is going to bankruptcy court for permission to pay fees to prospective lenders for attempting to arrange more than $340 million in loans to finance an exit from bankruptcy reorganization. The report recounts that in December the bankruptcy judge in Reno, Nevada, ended Ahern's exclusive right to propose a plan, saying the company failed to negotiate in good faith after a year in Chapter 11. The lenders responded in February by filing a plan of their own to compete with Ahern's reorganization proposal. According to the report, on March 13, Ahern filed papers seeking permission to pay Barclays Plc and Jefferies Finance LLC $100,000 toward expenses in investigating the possibility of being so- called exit lenders. In addition, Ahern needs a minimum of $200,000 for the lenders' lawyers. Ahern wants the bankruptcy judge to consider the request at a March 19 hearing. The lenders' plan pays all creditors in full other than the $267.7 million in second-lien debt that converts to equity. Ahern's plan also says creditors will be fully paid. The $236.7 million in principal amount of 9.25% second-lien notes last traded on Feb. 27 for 71 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The notes have more than tripled in price since December 2011. About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- now offers rental equipment to customers through its 74 locations in Arizona, Arkansas, California, Colorado, Georgia, Kansas, Maryland, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia and Washington. Ahern Rentals filed a voluntary Chapter 11 petition (Bankr. D. Nev. Case No. 11-53860) on Dec. 22, 2011, after failing to obtain an extension of the Aug. 21, 2011 maturity of its revolving credit facility. In its schedules, the Debtor disclosed $485.8 million in assets and $649.9 million in liabilities. Judge Bruce T. Beesley presides over the case. Lawyers at Gordon Silver serve as the Debtor's counsel. The Debtor's financial advisors are Oppenheimer & Co. and The Seaport Group. Kurtzman Carson Consultants LLC serves as claims and notice agent. The Official Committee of Unsecured Creditors has tapped Covington & Burling LLP as counsel, Downey Brand LLP as local counsel, and FTI Consulting as financial advisor. Counsel to Bank of America, as the DIP Agent and First Lien Agent, are Albert M. Fenster, Esq., and Marc D. Rosenberg, Esq., at Kaye Scholer LLP, and Robert R. Kinas, Esq., at Snell & Wilmer. Attorneys for the Majority Term Lenders are Paul Aronzon, Esq., and Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy LLP. Counsel for the Majority Second Lienholder are Paul V. Shalhoub, Esq., Joseph G. Minias, Esq., and Ana M. Alfonso, Esq., at Willkie Farr & Gallagher LLP. Attorney for GE Capital is James E. Van Horn, Esq., at McGuirewoods LLP. Wells Fargo Bank is represented by Andrew M. Kramer, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C. Allan S. Brilliant, Esq., and Glenn E. Siegel, Esq., at Dechert LLP argue for certain revolving lenders. Attorneys for U.S. Bank National Association, as successor to Wells Fargo Bank, as collateral agent and trustee for the benefit of holders of the 9-1/4% Senior Secured Notes Due 2013 under the Indenture dated Aug. 18, 2005, is Kyle Mathews, Esq., at Sheppard, Mullin, Richter & Hampton LLP and Timothy Lukas, Esq., at Holland & Hart. ALCO CORP: Wins Confirmation of Amended Reorganization Plan ----------------------------------------------------------- Judge Mildred Caban Flores of the U.S. Bankruptcy Court for the District of Puerto Rico issued an opinion and order on March 11, 2013, confirming the Amended Chapter 11 Plan of Reorganization filed by Alco Corporation. The Court finds that the Plan sets forth realistic and attainable goals and is not part of a visionary scheme to take advantage of the reorganization process. Management has taken the necessary measures to implement its new business strategy and is capable of performing its duties under the Amended Plan, Judge Flores held. The Court overruled the objection to confirmation filed by Betteroads Asphalt Corporation, Petroleum and Emulsion Manufacturing Corporation, and Betterecycling Corporation. The Court further denied the Betteroads Group's request to convert the case to Chapter 7. The Betteroads Group had argued the Debtor is administratively insolvent and will be unable to pay administrative expenses upon the effective date of the Amended Plan. The Plan considers the full payment of all administrative, secured creditors and priority claims and a 50% dividend to the general unsecured creditors on monthly installments within 5 years from the effective date. A copy of the Bankruptcy Court's March 11, 2013 Opinion and Order is available at http://is.gd/Q1uMZRfrom Leagle.com. About Alco Corp. Alco Corporation in Dorado, Puerto Rico, filed for Chapter 11 bankruptcy (Bankr. D. P.R. Case No. 12-00139) on Jan. 12, 2012. Carmen D. Conde Torres, Esq., and C. Conde & Associates represent the Debtor in its restructuring effort. Alco tapped Jimenez Vasquez & Associates, PSC, as accountants. The Debtor scheduled $11.2 million in assets and $7.76 million in debts. The petition was signed by Alfonso Rodriguez, president. ALAN MURRAY: Court Cuts Committee Counsel's Fee to $6,000 --------------------------------------------------------- Casey White, Esq., was an attorney duly appointed to represent the Creditors' Committee in the Chapter 11 case of Alan and Elizabeth Murray. She served as its counsel for a little over a month, during which time she conducted a deposition of the Murrays and prepared opposition to the Murrays' proposed Chapter 11 plan. She now seeks as compensation $8,126.25 in fees and $1,425.50 in expenses. Citing not a single statute, case, rule or authority, the Murrays filed an 8-page opposition to the application, arguing that the Creditors' Committee was improperly constituted, its members were bent on destroying the Murrays, and that Ms. White acted in furtherance of their desires instead of taking actions more in keeping with the best interests of general unsecured creditors. "Factually, most of the allegations made by the Murrays are true. The Committee was improperly constituted, and was motivated by interests not consistent with general unsecured creditors. It eventually dissolved after the court estimated the disputed claims of most of its members at zero and one member of the Committee broke ranks and supported the plan. However, White played no role in constituting the Committee and took action as instructed until the Committee was dissolved. The Murrays make no supported legal argument as to why these facts result in White being uncompensated, leaving it up to the court to identify the applicable law," said Bankruptcy Judge Alan Jaroslovsky. Judge Jaroslovsky noted that when a professional employed by a creditor without an order of the court seeks compensation from the bankruptcy estate, the professional must make the showings required by Sec. 503(b) of the Bankruptcy Code, including benefit to the estate. There is no such requirement for counsel for a Creditors' Committee duly appointed under Sec. 1103. Such a professional need only show, pursuant to Sec. 330(a)(1)(a), only reasonable fees for actual and necessary services rendered. The judge noted that Section 330(a)(3)(C), not cited by the Murrays, does require the court to consider, among six other factors, whether the services "were necessary to the administration of, or beneficial at the time at which the service was rendered toward the completion of" the case. However, this requirement must be interpreted in the light of the special circumstances of a committee counsel. According to Judge Jaroslovsky, "White has not met her burden of showing that all of her services benefitted the unsecured creditors. While much of her work, especially in deposing the Murrays, was clearly necessary and beneficial to unsecured creditors, her action in filing opposition to the Murrays' plan can only be characterized as furtherance of the vendettas of the individual committee members and not in the best interests of general unsecured creditors. Her primary argument advanced only the position of the majority of the committee members, that the plan improperly modified their rights as tenants, and was completely at odds with the best interests of general unsecured creditors. The rest of her arguments constituted only a mud-on- the-wall attempt to defeat the plan, not a measured response to the plan and a good faith attempt to improve it for the benefit of the Committee's proper constituency. The court cannot allow compensation from the estate for this improvidently-made objection." "The court has identified about $3,500.00 in fees and expenses in White's application as being related to the preparation and prosecution of the objection to confirmation. Section 330 allows the court to reduce the fees of a committee counsel to the extent that services rendered did not benefit the committee's constituency. . . . The court finds that it is appropriate to reduce White's compensation in this case. "Taking all of the factors into consideration, the court finds that White should not be compensated for services and expenses related to the objection to confirmation and that $6,000.00 is a fair and reasonable allowance for her compensable services. The court makes no finding that White acted improperly, but does find that her fees and expenses related to the objection to the plan were not in furtherance of the interests of the general unsecured creditors and therefore should not be paid by the estate." The Murrays' objection to Ms. White's application for compensation will be sustained in part and overruled in part, and Ms. White will receive total compensation of $6,000.00 for her services and expenses as counsel for the Creditors' Committee. A copy of the Court's March 13, 2013 Memorandum is available at http://is.gd/N7eIagfrom Leagle.com. Alan and Elizabeth Murray filed a joint Chapter 11 bankruptcy petition (Bankr. N.D. Cal. Case No. 11-10535) on Feb. 15, 2011. Bankruptcy Judge Alan Jaroslovsky, who oversees the case, confirmed the Murrays' Chapter 11 plan of reorganization in an order dated Dec. 3, 2012. At one time, the U.S. Trustee and the official committee of unsecured creditors filed objections to the Plan. The U.S. Trustee later withdraw his objection and the Creditors' Committee was dissolved. ALETHEIA RESEARCH: Court Okays Greenberg Glusker as Counsel ----------------------------------------------------------- Aletheia Research And Management, Inc., obtained permission from the U.S. Bankruptcy Court for the Central District of California to employ Greenberg Glusker Fields Claman & Machtinger LLP as general bankruptcy counsel, effective as of and retroactive to Nov. 11, 2012. As reported by the Troubled Company Reporter on Jan. 11, 2013, Greenberg Glusker will, among other things, assist with its operations as debtor and debtor-in-possession, including the filings to be made in conjunction therewith and the gathering and reporting of information related to the Debtor's assets, liabilities and financial condition at these hourly rates: Brian L. Davidoff, Attorney $590 Jeffrey A. Krieger, Attorney $475 Benjamin Alexander, Attorney $440 Amber M. Burroff, Attorney $290 Sofia M. Aguilar, Attorney $275 Kaitlin J. Woodson, Paralegal $70 Brian L. Davidoff, Esq., a partner at Greenberg Glusker, attests to the Court that the firm does not hold or represent any interest adverse to the Debtor's estates, and is "disinterested" as that term is defined in 11 U.S.C. Sec. 101(14). About Aletheia Research Aletheia Research and Management, Inc., filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-47718) on Nov. 11, 2012. Attorneys at Greenberg Glusker represent the Debtor. Avant Advisory Group, LLC, is the financial advisor. The board voted in favor of a bankruptcy filing due to the Company's financial situation and ongoing litigation. According to the list of top largest unsecured creditors, Proctor Investments has unliquidated and disputed claims of $16 million on account of pending litigation. An official committee of unsecured creditors was appointed in December 2012. The Committee is represented by Pachulski Stang Ziehl & Jones LLP while Brandlin & Associates provides financial advisory services. Jeffrey I. Golden was appointed as Chapter 11 Trustee in January 2013. Baker & Hostetler LLP is the Trustee's special counsel and Ernst & Young LLP is his advisory services provider. ALETHEIA RESEARCH: Court Okays Avant Advisory as Financial Advisor ------------------------------------------------------------------ Aletheia Research And Management, Inc., obtained authorization from the U.S. Bankruptcy Court for the Central District of California to employ Avant Advisory Group, LLC, as financial advisor, effective as of and retroactive to Nov. 14, 2012. As reported by the Troubled Company Reporter on Jan. 11, 2013, Avant Advisory will, among other things: a. investigate the assets of the estate; b. prepare the required Schedules of Assets and Liabilities and Statement of Financial Affairs, and report to the Court and to the U.S. Trustee; c. assist with a potential sale of assets; d. investigate and evaluate claims against the estate; and e. assist with the prosecution of claims against various third parties and any other matters relevant to the case and litigation in which the estate may be involved. Avant Advisory will be paid at these hourly rates: Michael M. Ozawa $495 Matthew Sedigh $325 Kathryn Tran $250 Managing Directors $395 to $495 Principal Consultants $295 to $395 Consultants $250 to $325 Para Professionals/Analysts $175 to $225 Administrative Staff $75 to $100 Michael Ozawa, a partner and managing director in the Los Angeles office of Avant Advisory, attests to the Court that the firm does not hold or represent any interest adverse to the Debtor's estates, and is "disinterested" as that term is defined in 11 U.S.C. Sec. 101(14). About Aletheia Research Aletheia Research and Management, Inc., filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-47718) on Nov. 11, 2012. Attorneys at Greenberg Glusker represent the Debtor. Avant Advisory Group, LLC, is the financial advisor. The board voted in favor of a bankruptcy filing due to the Company's financial situation and ongoing litigation. According to the list of top largest unsecured creditors, Proctor Investments has unliquidated and disputed claims of $16 million on account of pending litigation. An official committee of unsecured creditors was appointed in December 2012. The Committee is represented by Pachulski Stang Ziehl & Jones LLP while Brandlin & Associates provides financial advisory services. Jeffrey I. Golden was appointed as Chapter 11 Trustee in January 2013. Baker & Hostetler LLP is the Trustee's special counsel and Ernst & Young LLP is his advisory services provider. ALETHEIA RESEARCH: Jeffrey Golden Appointed as Chapter 11 Trustee ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California approved the U.S. Trustee's appointment of Jeffrey I. Golden as Chapter 11 Trustee in Aletheia Research And Management, Inc.'s bankruptcy case. The appointment and approval were based on a court-approved stipulation between the Debtor and the Official Committee of Unsecured Creditors directing the U.S. Trustee to appoint a Chapter 11 Trustee in the Debtor's case. Mr. Golden filed his notice of acceptance as Chapter 11 Trustee on January 17, 2013. About Aletheia Research Aletheia Research and Management, Inc., filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-47718) on Nov. 11, 2012. Attorneys at Greenberg Glusker represent the Debtor. Avant Advisory Group, LLC, is the financial advisor. The board voted in favor of a bankruptcy filing due to the Company's financial situation and ongoing litigation. According to the list of top largest unsecured creditors, Proctor Investments has unliquidated and disputed claims of $16 million on account of pending litigation. An official committee of unsecured creditors was appointed in December 2012. The Committee is represented by Pachulski Stang Ziehl & Jones LLP while Brandlin & Associates provides financial advisory services. Jeffrey I. Golden was appointed as Chapter 11 Trustee in January 2013. Baker & Hostetler LLP is the Trustee's special counsel and Ernst & Young LLP is his advisory services provider. ALETHEIA RESEARCH: U.S. Trustee Forms 3-Member Committee -------------------------------------------------------- Jill M. Sturtevant, Acting United States Trustee for Region 16, appointed three members to the official committee of unsecured creditors in the Chapter 11 case of Aletheia Research and Management, Inc. The Creditors Committee members are: 1. Jones Day Attn: Bennett L. Spiegel, Esq. 555 S. Flower Street, 50th Floor Los Angeles, CA 90071 Tel: (213)243-2311 Fax: (213)243-2539 E-mail: blspiegel@jonesday.com 2. David Bunzel c/o Brownstein Hyatt 410 17th Street, Suite 2200 Denver, CO 80202 Tel: (914)725-6310 Fax: (914)206-3657 E-mail: maxethan2012@gmail.com 3. Nai Li Mow 575 N. Rockingham Avenue Los Angeles, CA 90049 Fax (310)471-4314 E-mail: WMOW88@aol.com About Aletheia Research Aletheia Research and Management, Inc., filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-47718) on Nov. 11, 2012. Attorneys at Greenberg Glusker represent the Debtor. The board voted in favor of a bankruptcy filing due to the company's financial situation and ongoing litigation. According to the list of top largest unsecured creditors, Proctor Investments has unliquidated and disputed claims of $16 million on account of pending litigation. ALETHEIA RESEARCH: Files Schedules of Assets and Liabilities ------------------------------------------------------------ Aletheia Research and Management, Inc., filed with the U.S. Bankruptcy Court for the Central District of California its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $0 B. Personal Property $6,492,105 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $2,532,733 E. Creditors Holding Unsecured Priority Claims $872,873 F. Creditors Holding Unsecured Non-priority Claims $14,051,852 ----------- ----------- TOTAL $6,492,105 $17,457,458 A copy of the Debtor's schedules is available for free at: http://bankrupt.com/misc/ALETHEIA_RESEARCH_sal.pdf About Aletheia Research Aletheia Research and Management, Inc., filed a bare-bones Chapter 11 petition (Bankr. C.D. Calif. Case No. 12-47718) on Nov. 11, 2012. Attorneys at Greenberg Glusker represent the Debtor. The board voted in favor of a bankruptcy filing due to the company's financial situation and ongoing litigation. According to the list of top largest unsecured creditors, Proctor Investments has unliquidated and disputed claims of $16 million on account of pending litigation. ALPHA PARTNERS: Taps Alan B. Rich as Special Litigation Counsel --------------------------------------------------------------- Alpha Partners Ltd. seeks permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ Alan B. Rich, Esq., as its special litigation counsel. The Debtor relates that Mr. Rich has represented it in a federal case filed by Lincoln General Insurance Company pending in the District Court. The Debtor needs Mr. Rich to continue his representation as he is intimately familiar with the issues involved. Mr. Rich's hourly rate is $700 but he has charged a discounted rate of $450 per hour in the Federal Case. The Debtor does not believe that any conflict of interest exists with regard to the representation by Mr. Rich. 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. In its schedules of assets and liabilities, the Debtor disclosed $13,203,582 in assets and $25,071,428 in liabilities. AMEREN CORP: S&P Affirms 'CCC+' Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Ameren Corp., Ameren Illinois, and Ameren Missouri to 'BBB' from 'BBB-' and placed the corporate credit and long-term debt ratings on CreditWatch with positive implications. S&P affirmed the 'CCC+' ratings, including the corporate credit rating, on Ameren Energy Generating Co. (GenCo). The outlook is negative. S&P raised the rating on Ameren Corp.'s senior unsecured debt to 'BBB-' from 'BB+' and the ratings on Ameren Illinois and Ameren Missouri's senior secured debt to 'A-' from 'BBB+'. S&P also raised the short-term rating on Ameren and its regulated subsidiaries to 'A-2' from 'A-3'. The upgrades reflect management's commitment to credit quality, increased certainty in terms of strategic direction, and its efficient execution of its revised strategy to exit the merchant business. This definitive agreement materially improves Ameren's business risk profile, allowing management to focus on its regulated strategy. In addition, the upgrade reflects S&P's view that even if the announced transaction does not close, Ameren would still sell its merchant business to another third party under similar terms. The placement of the Ameren, AI, and AM ratings on CreditWatch with positive implications reflects the high probability of a further upgrade following the completion of the merchant sale. The CreditWatch placement also reflects S&P's base case post transaction forecast that has FFO to debt of about 20% and debt to EBITDA at about 4x. These financial measures are consistent with the significant financial risk profile category and when viewed together with Ameren's excellent business risk profile, could support a modestly higher rating. "Key risks to our forecast include the outcomes of future rate cases and our expectations for continued weak economic growth within the company's regulated service territory. We could upgrade Ameren and its regulated subsidiaries if the company closes the transaction in a timely manner while meeting our expected financial measures," said Standard & Poor's credit analyst Gabe Goldberg. The negative rating outlook on GenCo reflects S&P's base case scenario that the company's financial measures and profit margins will meaningfully deteriorate over the next few years because of continued weak power prices. These trends could result in lower ratings during the next 12 months and, absent a reversal of price trends, could lead to a payment default or debt restructuring. Key assumptions include continued weak U.S. economic growth, low gas prices, and heat rates that gradually reduce the company's annual electricity generation to about 16 terawatt hours. S&P could lower the ratings if business trends remain negative or S&P's assessment of the company's liquidity further weakens because of a worse-than-expected cash burn rate, which would most likely occur if the market price for electricity remains well below $40 per megawatt hour. S&P could revise the outlook to stable if financial measures consistently improved so that FFO to debt were greater than 7% and debt to EBITDA were less than 9x, which would most likely occur if the market price for natural gas improved to more than $4.30 per million cubic feet, resulting in higher electricity pricing and improved financial performance. AMEREN ENERGY: Poor Performance Prompts Moody's to Cut CFR to B3 ---------------------------------------------------------------- Moody's Investors Service downgraded the senior unsecured and Corporate Family Rating of Ameren Energy Generating Company to B3 from B2 and the Probability of Default Rating to B3-PD from B2-PD. The rating outlook is negative. This rating action concludes the review of Ameren Genco's ratings that has been ongoing since Moody's last rating action on the company on January 10, 2013. Ratings Downgraded: Ameren Genco Corporate Family Rating to B3 from B2; Ameren Genco Probability of Default Rating to B3-PD from B2-PD; $275 million Senior notes Series F 7.95% due 2032 downgraded to B3 (LGD 4, 51%) from B2 (LGD 4, 51%); $300 million Senior notes Series H 7.00% due 2018 downgraded to B3 (LGD 4, 51%) from B2 (LGD 4, 51%); $250 million Senior notes Series I 6.30% due 2020 downgraded to B3 (LGD 4, 51%) from B2 (LGD 4, 51%). Rating Affirmed: Ameren Genco's Speculative Grade Liquidity Rating of SGL-3 Ratings Rationale The downgrade of Ameren Genco's ratings considers the company's weak cash flow generating prospects, declining liquidity, and the continued depressed power market conditions in the Midwest region. It is also prompted by the announcement that Dynegy, Inc. (B2 Corporate Family Rating, stable) had reached an agreement to acquire Ameren Genco and the rest of Ameren Corporation's (Ameren, Baa3 senior unsecured, stable) merchant coal fired generating portfolio. "The terms and conditions of the acquisition by Dynegy will leave Ameren Genco with limited financial flexibility and finite liquidity resources to weather an anticipated prolonged period of low power prices", said Toby Shea, Vice President and Senior Analyst. Although Moody's views the planned sale as credit positive for Ameren as it will eliminate its higher risk, merchant generating business, it will not change Ameren's current Baa3 senior unsecured rating or stable rating outlook. Dynegy has indicated it intends to hold Ameren Genco and the other Ameren merchant generation assets it is acquiring in a Special Purpose Vehicle (SPV) that will be largely ring fenced from the rest of the company. Dynegy does not intend to provide any guarantees or other extraordinary support for Ameren Genco or its debt obligations, although Dynegy may be able to generate some incremental cost savings and synergies from its ownership of other coal fired generating assets in southern Illinois. Dynegy has a much lower rating than Ameren Genco's current parent company and does not possess as much financial capability or liquidity resources to support the additional liquidity needs of the Ameren merchant coal fired generating assets that may arise before there is a sustained recovery in power prices. To support the company's liquidity, as part of the transaction, Ameren will assure that Ameren Genco will have $205 million of cash at closing, partly from proceeds from the exercise of a put option allowing Ameren Genco to sell three gas fired plants to the Ameren parent company in exchange for cash. The entire SPV, which will consist of Ameren Genco, Ameren Energy Resources (AERG), and their energy trading affiliate Ameren Energy Marketing (AEM), is expected to have in the range of $220 million of cash at closing, its sole source of liquidity going forward. Ameren's guarantee of existing hedge positions and associated collateral obligations will stay in effect but may liquidate positions that are beyond 2015, which is about two years beyond the fourth quarter 2013, when the closing is expected to take place. Ameren's total potential liability under these guarantees was around $200 million at the end of 2012 but may be reduced over time as positions mature or are determined to be unnecessary. Ameren Genco should be free cash flow neutral in 2013 with the help of the tax monetization of its net operating losses, as provided by the tax sharing agreement with other Ameren affiliates. Moreover, Ameren will fund any operating cash flow shortfalls prior to closing, which minimizes the potential for a payment default. Moody's projects Ameren Genco to have a total free cash flow deficit of about $60 million in 2014 and $30 million in 2015. In comparison, Ameren Genco is expected to have around $130 million of excess liquidity available (net of working capital and other funding requirements) at closing. Post closing, Ameren Genco will not have access to any external bank credit facilities or other extraordinary sources of support in the event of unexpected events or larger than anticipated calls on liquidity. If successful, Dynegy will be acquiring the Ameren Genco assets for relatively little consideration, agreeing to provide just $25 million in support for working capital purposes to two of Ameren Genco's merchant affiliate companies that will be held within the same SPV as Ameren Genco. Dynegy views Ameren Genco and the other Ameren merchant generating assets as essentially an option on the recovery of power markets if prices improve. The ability of these merchant assets to generate sufficient free cash flow to service its $825 million of debt will depend to a large degree on a recovery in power prices well before the first $300 million tranche of this debt is due in 2018. The negative outlook reflects the execution risk inherent in obtaining regulatory approvals and closing the transaction, which is expected to occur in the fourth quarter of this year, and the prospect that power prices will not improve enough for the company to be comfortably free cash flow positive well before the first tranche of debt is due in 2018. The methodologies used in this rating were Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009, and Unregulated Utilities and Power Companies published in August 2009. Ameren Energy Generating Company, headquartered in Collinsville, Illinois is a merchant generating subsidiary of Ameren Corporation, a public utility holding company headquartered in St. Louis, Missouri. AMERICAN AIRLINES: AMR's Republic Deal Approved ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp. secured approval from the bankruptcy judge at a hearing March 12 for an agreement where Republic Airways Holdings Inc. will fly 47 regional jets under the American Eagle banner. AMR said there was no other way it could obtain so many of the 76-seat regional jets so quickly. The larger regional jets are more economical to operate than the smaller models now in the American Eagle fleet. The airline is selling $663 million in debt secured by aircraft at a record-low 4%. The bankruptcy judge gave AMR authority to pay off $1.32 billion in existing aircraft debt to take advantage of lower interest rates. Bondholders are appealing because the judge ruled they aren't entitled to a so-called make-whole premium in compensation for early payoff. It remains to be seen whether AMR can complete the refinancing while facing appeal. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN AIRLINES: Seeks Last Exclusivity Expansion --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that although AMR Corp. has a formal merger agreement with US Airways Group Inc., the parent of American Airlines Inc. for a last time is seeking an expansion of the exclusive right to propose a Chapter 11 reorganization plan. According to the report, the airline and the official creditors' committee together are requesting an extension of so-called exclusivity until May 29. More extensions aren't possible because bankruptcy law limits exclusivity to 18 months after a Chapter 11 filing. The report relates that AMR says more time is needed to work out intricacies in the reorganization plan that will implement the merger. The bankruptcy judge in New York is scheduled to give the merger preliminary approval at a March 27 hearing. AMR expects the merger to be completed in the third quarter following confirmation of a Chapter 11 reorganization plan. The plan will allow existing AMR shareholders to receive 3.5% of the stock in the merged companies. AMR stock has risen 60% this month, including 8.11% March 13 to close at $4 in over-the-counter trading. The stock was about $1.30 before the merger was announced. The stock could have been purchased for less than 40 cents in October. The plan also gives stock in the merged companies to AMR creditors. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. AMR and US Airways Group, Inc., on Feb. 14, 2013 announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERIGAS PARTNERS: Fitch Affirms 'BB' Issuer Default Ratings ------------------------------------------------------------ Fitch Ratings has affirmed the 'BB' Issuer Default Ratings (IDR) and 'BB' senior unsecured debt ratings of AmeriGas Partners, LP and its fully guaranteed financing co-borrower AmeriGas Finance Corp. The rating Outlook is revised to Stable from Negative. Approximately $2.3 billion in outstanding long term debt is affected. The Outlook revision to Stable reflects a recovery in APU's profitability following the unprecedented mild winter of 2011/2012. APU generates the bulk of its earnings and cash flows in the heating season, principally the quarter ended March 31. Fitch expects Debt to EBITDA to be slightly under 4.0x for the fiscal year ended Sept. 30, 2013 and FFO to debt to approximate 19%, both key APU credit benchmarks for a Stable Outlook. Key Rating Drivers -- Improved profitability and credit metrics -- Demand and negative volume trends; -- Weather sensitivity; -- Volatile commodity pricing; -- Market and geographic reach Improved Financial Profile Despite a warmer than average winter heating season with heating degree days running approximately 6% below average (but 10% colder than last year), Fitch models APU EBITDA between $580 million to $620 million in fiscal year ended Sept. 30, 2013, a level that would support leverage of slightly less than 4x and FFO to Debt of 19% to 20%. Given the warmer than normal winter heating season, Fitch believes the current period provides a good baseline to model 2014 and 2015. In base forecasts assuming normal weather, APU's credit measures improve modestly in 2014. Liquidity is satisfactory. APU has modest debt maturities through 2018 and a $525 million bank facility that matures in 2016 and which provides sufficient capacity to meet seasonal borrowing needs. APU is cash flow positive in Fitch's base forecast, although distribution coverage, at 1.2x, is below historical levels following increases in quarterly distributions as well as more units outstanding as part of the Heritage acquisition. Demand and Negative Volume Trends Residential heating remains the largest use for propane. Residential heating, irrespective of fuel, exhibits a natural decline curve from efficiency and customer conservation. In addition, propane is subject to customer switching to natural gas or electricity, which in the case of the former is lower cost than propane but may not be available and in the case of the later, may be price competitive and doesn't require an expensive furnace or boiler outlay. APU believes retail propane consumption in the U.S. is declined at a 2.9% rate based on historical industry data from 2005 to 2011. APU itself sold approximately 1,02 billion gallons of propane in fiscal year 2012 which included nine months of Heritage, a volume level that approximated its 2007 gallons sold. While volume trends are negative, margins have been maintained and retail and wholesale price spreads are currently at the widest levels in recent years. Weather Sensitivity APU is heavily dependent on the key heating season. Volatile Commodity Pricing Propane pricing and supply has historically been volatile. Propane itself is a byproduct, principally natural gas processing, and supply has benefitted from the shale drilling boom, particularly for 'wet' gas. Consequently, wholesale prices are currently running at 2005 levels which has permitted wider margins and more competitive propane pricing vis-a-vis other fuels. Market and Geographic Scale APU is the largest retail propane distributor in the U.S. spanning all 50 states. The company leverages its large distribution network with its cylinder exchange business and national accounts business which services large regionally diverse corporate users. Rating Sensitivities -- An upgrade is not deemed likely over the next 12 to 24 months; -- An acceleration of declining volume trends coupled with margin erosion would likely result in a negative rating action. Fitch Has Affirmed the Following Ratings With a Stable Outlook: AmeriGas Partners, L.P./AmeriGas Finance Corp. Issuer Default Rating at 'BB' Senior Unsecured Debt at 'BB' AP Eagle Finance Corp. is no longer a co-borrower and its ratings are withdrawn. AMERICAN SUZUKI: Prudential California's Broker Services -------------------------------------------------------- Prudential California Realty as American Suzuki Motor Corporation's real estate broker will market for sale the Debtor's properties at (i) 2005 Hillman Circle, Orange, California and (ii) 20593 Manzanita Avenue, Yorba Linda, California. As reported by the Troubled Company Reporter on March 11, 2013, the U.S. Bankruptcy Court for the Central District of California in late February entered orders authorizing American Suzuki Motor Corporation to employ Prudential California Realty as real estate broker. Prudential California is expected: (a) in conjunction with the Debtor, to analyze, review and inspect the Debtor's Real Estate; (b) to analyze and prepare all documentation necessary to list and advertise the Real Estate for sale as may be necessary and appropriate; (c) to list the Real Estate with the most favorable listing services available; to inspect the Real Estate as necessary to respond to purchaser's inquiries; and to solicit reasonable offers of purchasers; (d) to convey all reasonable purchase offers to the Debtor and to the Debtor's counsel, and subject to the Debtor's approval and this Court's authorization, to negotiate and confirm the acceptance of the best offer; and (e) subject to Court approval, to cause to be prepared and submitted to escrow on behalf of the Debtor any and all documents necessary to consummate a sale of the Real Estate. The Broker will be compensated for its services in an amount equal to five percent (5%) of the gross sales price for the applicable Real Estate. The Broker attested it is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. ARCAPITA BANK: Seeking Additional Agreements to Accompany Plan -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Arcapita Bank BSC, a Bahrainian investment bank reorganizing in New York, is hedging its bets about going ahead with a hearing on March 26 for approval of disclosure materials explaining the Chapter 11 reorganization plan filed on Feb. 8. The report relates that although the plan is "confirmable," Arcapita said it would be preferable to work out additional agreements with interested parties in portfolio investments not in bankruptcy. Consequently, Arcapita filed papers this week seeking an expansion of the exclusive right to solicit acceptances of a plan from April 9 to July 7. The bankruptcy court previously ended Arcapita's exclusive plan- filing rights, while leaving the door open to further extensions of exclusive solicitation rights. Arcapita said the plan filed in February contains an allocation of value representing unanimous agreement among creditors' committee members. The plan was accompanied by a 167-page disclosure statement explaining the exceptionally complicated capital structure proposed for the reorganized company. The plan is complicated because the existing capital structure and the capital structure for the reorganized company both comply with Islamic Shariah financing regulations. About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group had roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. ASBURY AUTOMOTIVE: S&P Raises Corporate Credit Rating to 'BB' ------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Asbury Automotive Group Inc. to 'BB' from 'BB-'. At the same time, S&P raised its issue-level ratings on the company's 8.375% $200 million senior subordinated notes due 2020 and 7.625% $143.2 million subordinated notes due 2017 to 'B+' (two notches lower than the corporate credit rating) from 'B'. The '6' recovery rating on the notes remains unchanged and indicates S&P's expectation that lenders would receive negligible (0 to 10%) recovery in the event of a payment default. "Our ratings on Asbury reflect its "fair" business risk profile characterized by thin margins and cyclical sales, stable and higher margin service profits, a somewhat recession-resistant business model, and improved EBITDA. The ratings also reflect Asbury's "significant" financial risk profile, which incorporates its improved debt leverage and free operating cash flow to debt," S&P noted. "We believe Asbury will continue to benefit from a recovery in U.S. light vehicles sales, and expand earnings and lower leverage because it has largely finished building out its infrastructure and automated system to gain benefits of scale in its light vehicle retail business," said Standard & Poor's credit analyst Nancy Messer. Asbury is one of the five U.S. auto retailers S&P rates, all of which are consolidators in the highly competitive and fragmented U.S. light vehicle retailing industry. S&P's stable rating outlook on Asbury reflects S&P's belief that the company's financial policy and operating expertise will enable it to sustain its improved credit measures in line with expectations for the rating. ATARI INC: Game-Maker Gets Final $15 Million Loan Approval ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that video-game maker Atari Inc. filed a Chapter 11 petition on Jan. 21 in New York and was given final approval last week for a $5 million loan from funds affiliated with Alden Global Capital Ltd. The loan requires filing a Chapter 11 plan or papers to sell the business within two months of the bankruptcy filing. Atari is using bankruptcy to separate from the similarly bankrupt French parent Atari SA. About Atari Atari -- http://www.atari.com-- is a multi-platform, global interactive entertainment and licensing company. Atari owns and/or manages a portfolio of more than 200 games and franchises, including world renowned brands like Asteroids(R), Centipede(R), Missile Command(R), Pong(R), Test Drive(R), Backyard Sports(R), and Rollercoaster Tycoon(R). Atari Inc. and its U.S. affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) on Jan. 21, 2013, to break away from their unprofitable French parent company and secure independent capital. A day after its American unit filed for Chapter 11 bankruptcy protection, Paris-based Atari S.A. took a similar measure under Book 6 of that country's commercial code. Atari S.A. said it was filing for legal protection because its longtime backer BlueBay has sought to sell its 29% stake and demanded repayment by March 31 on a credit line of $28 million that it cut off in December. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP are proposed to serve as lead counsel for the U.S. companies in their Chapter 11 cases. BMC Group is the claims and notice agent. Protiviti Inc. is the financial advisor. ATARI INC: Taps Akin Gump, BMC, Hunton, Perella & Protiviti Firms ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved Atari Inc. and its debtor-affiliates' applications to employ: 1) Akin Gump Strauss Hauer & Feld as counsel; 2) BMC Group Inc. as claims and noticing agent; 3) Hunton & Williams LLP as general bankruptcy counsel; 4) Perella Weinberg Partners LP as investment banker; and 5) Protiviti Inc. as financial advisor. Akin Gump and Hunton & Williams, among others, will advise the Debtors with respect to their powers and duties as debtors-in- possesion; help preserve the Debtors' estates; draft and prepare necessary pleadings and papers; represent the Debtors in negotiations; take all necessary and appropriate actions in connection with any plan of reorganization or liquidation; etc. But as general bankruptcy counsel, Hunton & Williams will also represent the Debtors in connection with obtaining the use of any potential postpetition financing including but not limited to helping the Debtors obtain post-petition loans; advise the Debtors in connection with any potential sale of assets; appear before the Court, any appellate courts and the United States Trustee and protect the interests of the Debtors' estates before those courts and the United States Trustee; provide non-bankruptcy services to the Debtors to the extent requested by the Debtors; and consult with the Debtors regarding tax matters. Both firms said they will work closely with each other and other professionals retained by the Debtors to avoid any unnecessary duplication of services. Akin Gump's current hourly rates are: $510 - $1,200 for partners; $415 - $880 for counsel and associates; and $145 - $325 for paraprofessionals. The current hourly rates for the Akin Gump attorneys with primary responsibility for Atari are: Ira S. Dizengoff (Partner) $1,100 Scott L. Alberino (Partner) $875 Kristine G. Manoukian (Associate) $675 Eric Seitz (Associate) $500 The hourly rates for the attorneys at Hunton & Williams who are expected to have primary responsibility for the representation of the Debtors are: Peter S. Partee, Sr. $995 Michael P. Richman $995 Andrew Kamensky $700 Richard P. Norton $805 Robert A. Rich $495 Other attorneys at Hunton & Williams who may have responsibility for particular issues arising in these Chapter 11 Cases bill at hourly rates ranging from $180.00 to $995.00 per hour. Paralegals who may have responsibility for particular issues arising in these Chapter 11 Cases bill at hourly rates ranging from $145 to $330 per hour. As investment banker, Perella Weinberg will review the Debtors' financial condition and outlook; assist in the development of financial data and presentations to the Debtors' Board of Directors, various creditors, and other parties; analyze the Debtors' financial liquidity and evaluate alternatives to improve such liquidity; evaluate the Debtors' debt capacity and alternative capital structures; participate in negotiations among the Debtors and their creditors, suppliers, lessors and other interested parties; advise the Debtors and negotiate with lenders with respect to potential waivers or amendments of various credit facilities; identify potential purchasers and advise and assist the Debtors in analyzing, structuring, planning, negotiating and effecting any transaction; etc. Perella will be paid a monthly retainer fee of $100,000. In addition, the Debtors have agreed to pay a $1,000,000 Transaction Fee payable upon the consummation of the first Transaction -- acquisition of all or a portion of the Debtors' business, equity or assets. Succeeding Transaction Fees will be based on this structure: Transaction Value for applicable Transaction and Transaction Fee all prior consummated Transactions Percentage ---------------------------------- --------------- $30,000,000 to $50,000,000 3% Any amount above $50,000,000 to $100,000,000 5% Any amount above $100,000,000 6% As financial advisor, Protiviti will assist the Debtors with the administration of their debtor-in-possession financing, including weekly reporting, cash management, and responses to due diligence requests; provide the Debtors' accounting department with assistance and guidance regarding chapter 11 protocols and policies; assist with vendor communications and negotiations of post-petition trade terms and utility deposits; assist with projecting cash flows through a potential sale or plan confirmation; interface with creditor groups and prepare any required/agreed upon flash reporting; assist with/prepare Monthly Operating Reports; assist counsel in preparing evidence and rendering testimony as needed to address contested motions; accumulate, reconcile, and adjudicate claims filed; assist with claims disbursement; etc. Protiviti's current hourly rates, net of the 5% negotiated discount, are: Managing Director $532 - $560 Directors / Assoc. Directors $356 - $441 Managers $251 - $342 Sr. Consultants / Consultants $142 - $247 Administrative $90 - $90 BMC Group, among others, will notify all potential creditors of the Debtors' bankruptcy filing and of the Section 341 first meeting of creditors; maintain an official copy of the Debtors' schedules of assets and liabilities and statements of financial affairs; notify creditors of the existence and amount of their claims; notify creditors about the bar date for filing claims; etc. The Debtors have paid BMC Group a $5,000 retainer. BMC Group's fees and expenses will be an administrative expense of the Debtors' estates. All firms have attested to their "disinterestedness" in the case. About Atari Atari -- http://www.atari.com-- is a multi-platform, global interactive entertainment and licensing company. Atari owns and/or manages a portfolio of more than 200 games and franchises, including world renowned brands like Asteroids(R), Centipede(R), Missile Command(R), Pong(R), Test Drive(R), Backyard Sports(R), and Rollercoaster Tycoon(R). Atari Inc. and its U.S. affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) on Jan. 21, 2013, to break away from their unprofitable French parent company and secure independent capital. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP serve as lead counsel for the U.S. companies in their respective Chapter 11 cases. Akin Gump Strauss Hauer & Feld also serves as counsel. BMC Group is the claims and notice agent. Protiviti Inc. is the financial advisor. Perella Weinberg Partners LP is the investment banker. Attorneys for (i) Alden Global Distressed Opportunities Master Fund, L.P., (ii) Alden Global Value Recovery Master Fund, L.P., and (iii) Turnpike Limited, are Robert G. Burns, Esq., Andrew J. Schoulder, Esq., and Kurt A. Mayr II, Esq.. at Bracewell & Giuliani LLP. ATARI INC: Committee Hires Cooley as Counsel & Duff as Advisor -------------------------------------------------------------- The Official Committee of Unsecured Creditors in Atari Inc. and its debtor-affiliates Chapter 11 cases seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to retain Duff & Phelps Securities LLC as its financial advisor. The Committee also sought and obtained the Court's permission to retain Cooley LLP as its counsel. Duff & Phelps, among others, will review and analyze the Debtors' operations, financial condition, cash flows, business plan, strategy, and operating forecasts; evaluate the Debtors' assets and liabilities and strategic and financial alternatives; assist in the determination of an appropriate go-forward capital structure for the Debtors; determine a theoretical range of values for the Debtors on a going concern basis; evaluate the Debtors' debt capacity in light of its projected cash flows; assist the Committee in developing, evaluating, structuring and negotiating the terms and conditions of a restructuring or Plan; assist the Committee in monitoring a sales process and evaluating bids to purchase; assist the Committee in analyzing any new debt and/or equity capital; etc. The Committee requests that Duff & Phelps be entitled to a $50,000 monthly fee and a restructuring fee of up to $700,000 based on the recovery received by general unsecured creditors. The Court will hear the Committee's request on March 20, 2013. As counsel, Cooley will attend Committee meetings; review the Debtors' financial information furnished to the Committee; negotiate the budget and the use of cash collateral and DIP financing; review and investigate liens of purportedly secured parties; review and investigate intercompany transactions; confer with the Debtors' management, advisors and counsel; coordinate efforts to sell the Debtors' assets in a manner that maximizes the value for unsecured creditors; etc. Cooley professionals who will be involved in the case and their hourly rates are: Cathy Hershcopf Partner $845 Jeffrey L. Cohen Partner $695 Alex R. Velinsky Associate $475 Robert B. Winning Associate $435 Rebecca Goldstein Paralegal $270 Both firms assured the Court that they are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. About Atari Atari -- http://www.atari.com-- is a multi-platform, global interactive entertainment and licensing company. Atari owns and/or manages a portfolio of more than 200 games and franchises, including world renowned brands like Asteroids(R), Centipede(R), Missile Command(R), Pong(R), Test Drive(R), Backyard Sports(R), and Rollercoaster Tycoon(R). Atari Inc. and its U.S. affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Lead Case No. 13-10176) on Jan. 21, 2013, to break away from their unprofitable French parent company and secure independent capital. Peter S. Partee, Sr. and Michael P. Richman of Hunton & Williams LLP serve as lead counsel for the U.S. companies in their respective Chapter 11 cases. Akin Gump Strauss Hauer & Feld also serves as counsel. BMC Group is the claims and notice agent. Protiviti Inc. is the financial advisor. Perella Weinberg Partners LP is the investment banker. Attorneys for (i) Alden Global Distressed Opportunities Master Fund, L.P., (ii) Alden Global Value Recovery Master Fund, L.P., and (iii) Turnpike Limited, are Robert G. Burns, Esq., Andrew J. Schoulder, Esq., and Kurt A. Mayr II, Esq.. at Bracewell & Giuliani LLP. BASIN STREET: Illinois Court Junks Suit on Plan Conspiracy Charges ------------------------------------------------------------------ Chief District Judge James F. Holderman dismissed for lack of personal jurisdiction the plaintiffs' claims in a nine-count complaint that alleges 12 defendants conspired to fraudulently obtain approval of a reorganization plan in the bankruptcy case of Basin Street #2 Limited Partnership (BS2LP). The complaint is styled as HR PROPERTIES OF DELAWARE LLC, and THE ROYAL TRUST OF NEW ORLEANS, Plaintiffs, v. ADAMS AND REESE LLP, BASIN STREET STUDIOS LLC, PELICAN LOOP DEVELOPMENT CO. LLC, ARETE WEALTH MANAGEMENT LLC, STRATEGIC BUSINESS DEVELOPMENT, LLC, GREEN COAST ENTERPRISES LLC, RON NAKAMOTO, ROBIN B. CHEATHAM, LISA M. HEDRICK, ALEXANDER S. KELSO, Jr., WILLIAM BRADSHAW II, and JAMES DAVIDSON, Defendants, Case No. No. 11-C 8638 (N.D. Ill.). BS2LP's bankruptcy case is captioned In re Basin Street #2 Limited Partnership, Case No. 06-B-11359 (Bankr. E.D. La.). Under their complaint, the plaintiffs asserted that approval of BS2LP's 6th Amended Plan of Reorganiztion was detrimental to them. The transaction at issue involved the sale of "the Winn Dixie Property" in New Orleans, Louisiana, from BS2LP to Basin Street Studios LLC (BSS), which allegedly had the effect of destroying "Plaintiffs' interest in BS2LP . . . [and] Plaintiffs' business opportunity to further develop [the Winn Dixie] property." The District Court addressed two pending motions to dismiss or, in the alternative, to transfer the complaint filed by two groups -- the law firm defendants and the Green Coast defedants. Plaintiffs are given until March 26, 2013, to file a statement showing cause why the case should not be dismissed in its entirety for failure to serve the remaining defendants pursuant to the 120- day time period set forth in Federal Rule of Civil Procedure 4(m). Defendants BSS, Pelican Loop, Arete Wealth, Strategic Business Development, and Messrs. Nakamoto and Davidson have not yet filed appearances in the case. A copy of Judge Holderman's March 12, 2013 Memorandum Opinion and Order is available at http://is.gd/fJa2dhfrom Leagle.com. BEALL CORP: Seeks Court Okay to Hire Eide Bailly as Accountants --------------------------------------------------------------- Beall Corporation seeks the U.S. Bankruptcy Court for the District of Oregon's permission to employ Eide Bailly LLP as its accountants. Eide Bailly is expected to assist the Debtor with the preparation of its federal and state tax returns and supporting schedules, prepare any bookkeeping entries necessary in connection with preparation of Debtor's tax returns, and prepare and post any adjusting entries. The Eide Bailly professionals who will be primarily responsible for providing services and their current billing rates are: John W. Jacobsen Partner $325 Maria J. Christiaens Partner $275 Janel Keenan Manager $240 Edie Hansen Manager $225 Nicole Rittierodt Senior Associate $175 Cedric Snelling Associate $150 Bill Schrock Associate $150 To the best of the Debtor's knowledge, the partners and associates of Eide Bailly do not have any connection with Debtor, its creditors, any other party in interest, or their respective attorneys or accountants, except as disclosed in a Rule 2014 Statement. About Beall Corporation Portland, Oregon-based Beall Corporation, a manufacturer of lightweight, efficient, and durable tanker trucks, trailers and related products, filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 12-37291) on Sept. 24, 2012, estimating at least $10 million in assets and liabilities. Founded in 1905, Beall has four factories and nine sale branches across the U.S. The Debtor has 285 employees, with an average weekly payroll of $300,000. Judge Elizabeth L. Perris presides over the case. The Debtor has tapped Tonkon Torp LLP as counsel. The Debtor disclosed $14,015,232 in assets and $28,791,683 in liabilities as of the Chapter 11 filing. Wabash National Corporation on Feb. 4 successfully closed on its acquisition of certain assets of the tank and trailer business of Beall for $15 million. Robert D. Miller Jr., the U.S. Trustee for Region 18, appointed six members to the official committee of unsecured creditors. Ball Janik LLP represents the Committee. BENADA ALUMINUM: Court OKs Committee Hiring of Deloitte Financial ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Bernada Aluminum Products LLC obtained permission from the U.S. Bankruptcy Court for the Middle District of Florida to retain Deloitte Financial Advisory Services LLP as its financial advisor, nunc pro tunc to Oct. 25, 2012. As reported by the Troubled Company Reporter on Dec. 26, 2012, Deloitte Financial will, among other things: a) assist and advise the Committee in connection with its identification, development, and implementation of strategies related to the Debtor's business plan and other matters, as agreed, relating to the restructuring, liquidation or sale, as the case may be, of the Debtor's business operations; b) assist the Committee in understanding the business and financial impact of various operational, financial, and strategic restructuring alternatives on the Debtor; c) assist the Committee in its analysis of the Debtor's financial restructuring process, including its review of the Debtor's development of plans of reorganization and related disclosure statements; d) assist the Committee in its review of various financial reports prepared for submission to the applicable court, and, as mutually agreed, other reports that may be requested by parties-in-interest; and e) assist and advise the Committee in its analysis of liquidation scenarios. Deloitte Financial will be paid $325 per hour for its services. Narendra Ganti, a partner at Deloitte Financial, attested to the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Benada Benada Aluminum Products LLC was formed in 2011 to purchase assets of two aluminum products manufacturing companies. It purchased via 11 U.S.C. Sec. 363 the Sanford facility of Florida Extruders International (Case No. 08-07761). It also purchased the assets Miami, Florida-based Benada Aluminum of Florida Inc. The Debtor has since consolidated operations and operates only out of its location in Sanford. The Company filed for Chapter 11 protection on Aug. 1, 2012 (Bankr. M.D. Fla. Case No. 12-10518). Judge Karen S. Jennemann presides over the case. R. Scott Shuker, Esq., at Latham Shuker Eden & Beaudine LLP, represents the Debtor. The Debtor disclosed $22,009,272 in assets and $11,698,426 in liabilities as of the Chapter 11 filing. Wells Fargo is represented by Michael Demont, Esq., and Jay Smith, Esq., at Smith Hulsey & Busey, in Jacksonville, Florida. FTL Capital is represented by Christopher J. Lawhorn, Esq., at Bryan Cave LLP in St. Louis, Missouri. Triton Capital Partners Ltd. serves as exclusive financial advisor and investment banker with respect to providing assistance with turnaround management. The Debtor was authorized by the bankruptcy judge at a Sept. 25, hearing to sell an aluminum extrusion press for $2.9 million to Tubelite Inc. The Court confirmed the Debtor's Chapter 11 reorganization plan in March 2013. BERNARD L. MADOFF: Customers In Line for Add'l $505MM Distribution ------------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the customers of Bernard L. Madoff Investment Securities Inc. are in line to receive an additional distribution of $505 million. The distribution will be the third made by trustee Irving Picard since the world's largest-ever Ponzi scheme surfaced in late 2008. The bankruptcy judge in New York approved the new distribution on March 13. There were two objections. According to the report, the new distribution will bring the total so far to more than $5.4 billion, or almost 43% of customers' claims. Including $806 million provided by the Securities Investor Protection Corp., Mr. Picard previously distributed almost $5 billion to customers. The distribution is being made from the $9.32 billion Mr. Picard has recovered so far. He is precluded from paying out almost $2.5 billion held in reserve for disputed claims. In addition, Mr. Picard is holding back $1.3 billion while courts rule on whether customers are entitled to interest on their claims to take into consideration the time-value of money. The report relates that most of the new distribution is attributable to more than $1 billion in a settlement escrow set free in February. The funds Mr. Picard holds don't include an additional $2.2 billion that was forfeited to the government. Late last year, the government began the process of eventually distributing the forfeited funds to customers. Who will receive the forfeited funds or when isn't yet known, Mr. Rochelle points out. The government may or may not distribute the funds to the same universe of customers receiving payment from Mr. Picard. About 2,200 customers have approved claims. Half already have been paid in full as a result of advances from SIPC, whose fund pays as much as $500,000 per claim. When customers have recovered 100%, SIPC stands next in line to recoup its advances, including costs of the liquidation. Unsecured creditors will have a recovery only after SIPC is fully repaid. 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: Swaps Not Completely Protected, Rakoff Rules --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the ABN Amro Bank NV and the trustee for Bernard L. Madoff Investment Securities Inc. were given a split decision March 14 by U.S. District Judge Jed Rakoff on an esoteric question involving swaps, Ponzi schemes and the safe harbor in bankruptcy. According to the report, the question before Judge Rakoff was whether the safe harbor stretches to protect financial institutions from suits by bankruptcy trustees that aren't expressly within the scope of the safe harbor. At the bottom line, Judge Rakoff said that banks involved in swaps have some, although not total, immunity from being sued for receipt of money stolen from Madoff customers. More precisely, Judge Rakoff dismissed the suits to the extent they sought recovery for reduction in collateral supporting swaps. He is allowing the suits to continue for withdrawals subsequently used to provide collateral for swaps. The report recounts that Madoff trustee Irving Picard sued in bankruptcy court, contending the bank's affiliate in Ireland was the subsequent recipient of $267 million initially paid by the Madoff firm to a feeder fund. At the bank's request, Judge Rakoff removed the suit from bankruptcy court to decide threshold questions that could result in dismissal of the suit. The bank explained how it had swap transactions with a feeder fund and that the money traceable to Madoff was paid pursuant to the swap. The bank argued that the safe harbor requires dismissal because Section 546(g) of the Bankruptcy Code precludes a trustee from suing to recover a payment received in a swap. Mr. Picard argued that the bank wasn't automatically entitled to dismissal on account of the swap. He contended that the bank was being sued as a subsequent recipient of fraudulently transferred funds and that the safe harbor for swaps only protects an initial recipient. The bank contended that the distinction didn't matter because Congress intended to give the widest possible protection to parties involved in swaps. Mr. Rochelle says Judge Rakoff's rationale isn't clear because he only filed a three-page order laying out the result. He said he will write an opinion "in due course" explaining how he reached the decision. Other institutions affected by the March 14 ruling include Citibank NA, Rye Select Broad Market XL Fund LP and Fortis Prime Fund Solutions Custodial Services (Ireland) Ltd. Because Judge Rakoff's ruling didn't completely dispose of the suit, the trustee and the bank may not have a right to appeal. They can, however, ask Judge Rakoff to certify the importance of the issue and request that the Court of Appeals allow what's called an interlocutory appeal to dispose of a pivotal legal issue. The case involving ABN Amro and swaps is part of Securities Investor Protection Corp. v. Bernard L. Madoff Investment Securities LLC, 12-mc-00115, U.S. District Court, Southern District 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.). BRIER CREEK: Court Okays Hiring of Grant Thornton as Accountants ---------------------------------------------------------------- Brier Creek Corporate Center Associates Limited, et al., obtained permission from the U.S. Bankruptcy Court to employ Grant Thornton, LLP as accountants. The Troubled Company Reporter reported on March 11, 2013, that the firm has agreed to, among others: a. prepare tax returns and financial statements as requested by Bankruptcy Counsel; b. provide audit services for the Debtor; and, C. perform such other accounting and consulting services as may be requested by Bankruptcy 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, attested 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. CANYONS AT DEBEQUE: Hires Fairfield and Woods as Mediator --------------------------------------------------------- Debtors Canyons at DeBeque Ranch, LLC, and Bluestone Ridge Ranch East, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the District of Colorado to employ Fairfield and Woods, P.C., to provide mediation services. Caroline Fuller, Esq., will be in charge of the Parties' account. Ms. Fuller has practiced bankruptcy for over 25 years, and has acted as a mediator for approximately two years. Ms. Fuller's current hourly rate is $425. Ms. Fuller assures the Court she does not hold or represent any interest materially adverse to the Debtors' estates on matters for which she is to be employed. About Canyons @ DeBeque Ranch Canyons @ DeBeque Ranch, LLC, filed a Chapter 11 petition (Bankr. D. Colo. Case No. 12-24993) in Denver on July 18, 2012. Affiliate Bluestone Ridge Ranch East, LLC, aka Bluestone Ridge Ranch PUD, based in Butte, Montana, filed a separate Chapter 11 petition (Bankr. D. Colo. Case No. 12-24994) on the same day. Judge Elizabeth E. Brown oversees the case. The Debtor is represented by Jeffrey S. Brinen, Esq., at Kutner Miller Brinen, P.C., serves as counsel to the Debtor. Canyons @ DeBuque disclosed $12,115,374 in assets and $7,182,814 in liabilities as of the Chapter 11 filing. CARL'S PATIO: Taps CBIZ Accounting, Cross Simon, Platzer Swergold ----------------------------------------------------------------- The Official Committee of Unsecured Creditors in Carl's Patio, Inc., et al.'s bankruptcy case sought and obtained permission from the U.S. Bankruptcy Court for the District of Delaware to retain: 1) CBIZ Accounting, Tax and Advisory of New York, LLC, as financial advisor; 2) Cross & Simon LLC, as Delaware counsel; and 3) Platzer, Swergold, Karlin, Levine, Goldberg & Jaslow, LLP, as lead counsel. As financial advisor, CBIZ Accounting will analyze the Debtors' current financial position, business plans, cash flow projections, restructuring programs, financial statements, and other relevant reports; analyze the financial ramifications of the Debtors' proposed transactions; provide hypothetical liquidation analyses; review valuations of the Debtors' corporate assets; evaluate potential fraudulent conveyances; assist in the analysis of the reporting regarding cash collateral and any DIP financing arrangements and budgets; etc. CBIZ's current hourly rates are: Directors and Managing Directors $395 - $595 Managers and Senior Managers $310 - $410 Senior Associates and Staff $130 - $310 As counsel, Cross & Simon and Platzer Swergold will both be providing the Committee with advice concerning its rights and duties, representing the Committee, and preparing all necessary documents in connection with the Debtors' Chapter 11 cases on behalf of the Committee. They are also expected to take all necessary actions to protect and preserve the Committee's rights; and represent the Committee at hearings, meetings, and conferences on matters pertaining to the Debtors' affairs. However, both firms will take necessary precautions not to duplicate each other's efforts. Cross & Simon's current hourly rates are: Partners and Counsel $475 Associates $395 Paraprofessionals $180 Platzer's current hourly rates are: Partners and Counsel $510 - $690 Associates $205 - $510 Paraprofessionals $195 All the firms attested that they are "disinterested" as that term is defined in Section 101(14) of the Bankruptcy Code. 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. CARY CREEK: Wins Court's Interim Approval of DIP Financing ---------------------------------------------------------- The Hon. Stephani W. Humrickhouse of the U.S. Bankruptcy Court for the Eastern District of North Carolina has granted Cary Creek Limited Partnership request to access postpetition financing and use cash collateral on an interim basis up to March 31, 2013. As reported by the Troubled Company Reporter on Jan. 18, 2013, the Debtor will use the financing from AAC Retail Property Development and Acquisition Fund, LLC, to timely pay the on-going costs of operating, preserving, and protect the business and property of the estate, and preserve the going-concern value of the Property for the benefit of creditors and the estate. The postpetition financing would be a credit facility in an amount not to exceed $300,000. A hearing will be held at 2:00 p.m. on March 20, 2013, at which time the Court will further consider the Debtor's request for authority to use cash collateral and obtain postpetition financing. About Cary Creek Cary Creek Limited Partnership sought Chapter 11 protection (Bankr. E.D.N.C. Case No. 13-00041) on Jan. 3, 2013. Cary Creek is the owner of 1009 acres of land located adjacent to the west boundary of NC Highway 55 immediately sought of its interchange with NC-540/I-540, in Cary, Wake County, North Carolina. The property is managed by American Asset Corporation. The primary secured creditor is Bank of America, N.A. BofA has a first mortgage lien on the Debtor's property. Cary Creek is seeking joint administration of its Chapter 11 case with the consolidated Chapter 11 cases of Brier Creek Corporate Center Associates Limited Partnership, et al., which sought bankruptcy protection on March 9, 2012 (Bankr. E.D.N.C. Lead Case No. 12-01855). Brier Creek, et al., own real property located in Wake County, North Carolina and Mecklenburg County, North Carolina. Cary Creek and the Brier Creek Debtors are parties to litigation pending in the Bankruptcy Court against BofA, Adv. Proc. No. 12-00121. The BofA litigation was instituted on Oct. 13, 2011, in Mecklenburg County Superior Court, and was removed and subsequently transferred to the Bankruptcy Court after the Brier Creek Debtors filed for Chapter 11 bankruptcy protection in March 2012. Cary Creek is related to the Brier Creek Debtors through common ownership, common property management, and common secured and unsecured creditors. CASCADE AG: Committee Can Retain Schwabe Williamson as Counsel -------------------------------------------------------------- Cascade Ag Services, Inc., sought and obtained permission from the U.S. Bankruptcy Court for the Western District of Washington to employ Schwabe, Williamson & Wyatt, P.C. as counsel. The Firm has agreed to render services in the general representation of the Committee in the bankruptcy proceedings and to perform necessary related legal services. The Firm's conflicts department conducted a search of the Firm's client data base. The search revealed no actual conflicts based on the creditor and interest holder information provided to the Firm. The report and subsequent investigation, however, did reveal that the Firm does represent Columbia Bank in connection with other unrelated matters. Out of abundance caution, the Firm sought a waiver letter with respect to that representation. The Committee believes that (a) the Firm has no interest adverse to the Committee or the Chapter 11 estate in any of the matters in which the Firm will be engaged; and (b) employment of the Firm will be in the best interests of the Committee, the estate, and its unsecured creditors. About Cascade AG Cascade AG Services, Inc., dba Pleasant Valley Farms, fdba Mountain View Produce, Inc., fdba Staffanson Harvesting LLC, fdba Sterling Investment Group, L.L.C., is a vegetable processing company that processes Washington-grown cucumbers and cabbage into pickles and sauerkraut. The Debtor filed for Chapter 11 bankruptcy (Bankr. W.D. Wash. Case No. 12-18366) on Aug. 13, 2012. It scheduled $25,820,499 in assets and $22,255,482 in liabilities. Lawyers at Cairncross & Hempelmann PS, in Seattle, serve as the Debtor's counsel. Clyde A. Hamstreet & Associates, LLC, is the Debtor's chief restructuring officer and financial advisor. The petition was signed by Craig Staffanson, president. The U.S. Trustee appointed seven creditors to the Official Unsecured Creditors' Committee. Lawrence R. Ream, Esq., at Schwabe, Williamson & Wyatt PC, Seattle, represents the Committee as counsel. DIP lender One PacificCoast Bank, FSB, is represented by Brad T. Summers, Esq., and David W. Criswell, Esq., at Ball Janik LLP. CBS I: Court Approves Hiring of Kenneth Funsten as Expert Witness ----------------------------------------------------------------- CBS I, LLC, obtained permission from the U.S. Bankruptcy Court for the District of Nevada to employ Kenneth Funsten, CFA of the firm of FamCo Advisory Services as an expert witness. Mr. Funsten will provide report of expert opinion as to objections to Proofs of Claims; provide report of expert opinion as to appropriate interest rate, feasibility, and other plan confirmation issues; and testify at Plan Confirmation or any other evidentiary hearings as expert witness. Mr. Funsten will have an initial retainer of $18,000. About CBS I CBS I, LLC, filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-16833) on June 7, 2012. The Company is a limited liability company whose sole asset consists of 71,546 square feet of gross rentable building area on a site containing approximately 206,474 net square feet or 4.74 acres, located at 10100 West Charleston Boulevard, in Las Vegas, Nevada. Debtor is owned by Jeff Susa (25%), Breslin Family Trust (25%), M&J Corrigan Family Trust (25%) and S&L Corrigan Family Trust (25%). The Debtor scheduled assets of $19,356,448 and liabilities of $19,422,805. Judge Mike K. Nakagawa presides over the case. Jeff Susa signed the petition as manager. The bankruptcy filing came after U.S. Bank, trustee for holders of the $16.4 million mortgage, initiated foreclosure proceedings and filed a lawsuit May 24, 2012, in Clark County District Court asking that a receiver be appointed to take control of the Summerlin building in Howard Hughes Plaza at 10100 West Charleston Blvd., just west of Hualapai Way. Zachariah Larson, Esq., at Marquis Aurbach Coffing, in Las Vegas, represents the Debtor as bankruptcy counsel. Dimitri P. Dalacas, Esq., at Flangas McMillan Law Group, in Las Vegas, represents the Debtor as special counsel. CEDAR ARCH: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Cedar Arch Dairies, LLC fdba Cedar Arch Dairies, LLC as Successor to Cedar Arch Dairy Operations, LLC by Merger 710 East 600 North Firth, ID 83236 Bankruptcy Case No.: 13-40256 Chapter 11 Petition Date: March 13, 2013 Court: United States Bankruptcy Court District of Idaho (Pocatello) Judge: Jim D. Pappas Debtor's Counsel: Brent T. Robinson, Esq. POB 396 Rupert, ID 83350 Tel: (208) 436-4717 E-mail: btr@idlawfirm.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/idb13-40256.pdf The petition was signed by Gaylen Clayson, managing member. CENTENNIAL BEVERAGE: Court Okays Hiring of Haynes & Boone --------------------------------------------------------- Centennial Beverage Group LLC obtained court approval to employ Haynes & Boone, LLP, as its attorneys. The Troubled Company Reporter reported on March 14, 2013, that compensation will be payable to Haynes on an hourly basis, plus reimbursement of actual, necessary expenses incurred by Haynes. The firm's rates are: Hourly Professional Rates ------------ ----- Robert D. Albergotti, Partner $810 Ian Peck, Partner $535 John Middleton, Associate $369 Jarom Yates, Associate $324 Kimberly Morzak, Paralegal $234 The Debtor believes that Haynes and Boone does not represent or hold any interest adverse to the Debtor, and attests the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Prepetition, Haynes served as general corporate counsel to Centennial. 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 to the Debtor. RGS LLC serves as the Debtor's financial advisor. CENTENNIAL BEVERAGE: Court OKs Hiring of Hank Dickerson as Broker ----------------------------------------------------------------- Centennial Beverage Group LLC obtained the U.S. Bankruptcy Court's 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. The Troubled Company Reporter reported on March 11, 2013, that pursuant to the Debtor's 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. RGS LLC serves as the Debtor's financial advisor. CENTENNIAL BEVERAGE: Court Approves RGS LLC as Financial Advisor ---------------------------------------------------------------- Centennial Beverage Group LLC obtained the U.S. Bankruptcy Court's permission to employ RGS LLC as financial advisor. The Troubled Company Reporter reported on March 13, 2013, that the firm will: a. provide financial advisory services in connection with the evaluation of various restructuring alternatives for the Debtor; b. prepare financial analyses and cash flow forecasts relating to the various alternative; and c. negotiate regarding DIP financing, preparation of bankruptcy schedules and statements, liquidation analysis, claim analysis, and plan preparation; and d. provide other services in connection with the restructuring process as management may request. RGS's principal, Matt Donnell, has developed significant relevant experience and expertise regarding the Debtor that will assist him in providing effective and efficient services in the Chapter 11 case. Compensation will be payable to RGS on an hourly basis, plus reimbursement of actual, necessary expenses incurred by RGS. Mr. Donnell's hourly fee is $275. Prior to the petition date, RGS received a retainer of $7,625 for work to be performed by RGS. The firm was also paid $12,375 for work performed pre-petition relating to the bankruptcy filing. RGS was not a creditor of the Debtor when the bankruptcy was filed. Mr. Donnell attests that the firm 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. RGS LLC serves as the Debtor's financial advisor. CENTURYLINK INC: Moody's Cuts Debt Rating to Ba2; Assigns Ba1 CFR ----------------------------------------------------------------- Moody's Investors Service downgraded CenturyLink, Inc.'s senior unsecured debt rating to Ba2 from Baa3 and assigned a Corporate Family Rating of Ba1. As part of the rating action, Moody's has downgraded the short- term rating of CenturyLink to Not Prime from Prime-3 and assigned a speculative grade liquidity rating of SGL-4. The senior unsecured ratings of Embarq Corporation and Qwest Corporation were confirmed at Baa3 while the ratings of all other subsidiaries were downgraded by one notch. The downgrade reflects Moody's expectation that CenturyLink's leverage (Debt to EBITDA) will remain elevated as a result of its decision to abandon its long-standing leverage target (Debt to EBITDA) of the low two's to 2.5 times and resume share repurchases. The company also announced a 26% reduction in its common stock dividend. The outlook for CenturyLink's ratings is stable. The rating action concludes the review of CenturyLink's ratings that was initiated on February 13, 2013. Moody's has taken These rating actions: CenturyLink, Inc. Corporate Family Rating: Assigned Ba1 Probability of Default Rating: Assigned Ba1-PD Senior Unsecured Commercial Paper: Downgraded to NP, from P-3 Speculative Grade Liquidity rating: Assigned SGL-4 Senior Unsecured Regular Bond/Debenture: Downgraded to Ba2 (LGD5, 85%), from Baa3 Senior Unsecured Bank Credit Facility: Baa3 (LGD3, 37%), from Baa3 Senior Unsecured Shelf: Downgraded to (P)Ba2, from (P)Baa3 Preferred Shelf: Downgraded to (P)Ba3, from (P)Ba2 Outlook: Stable, from Ratings Under Review Qwest Communications International Inc. Senior Unsecured Regular Bond/Debenture: Downgraded to Ba1 (LGD4, 63%), from Baa3 Outlook: Stable, from Ratings Under Review Qwest Capital Funding Inc. Senior Unsecured Regular Bond/Debenture: Downgraded to Ba1 (LGD4, 63%), from Baa3 Outlook: Stable, from Ratings Under Review Qwest Corporation Senior Unsecured Regular Bond/Debenture: Baa3 (LGD3, 31%), from Baa3 Outlook: Stable, from Ratings Under Review Mountain States Telephone & Telegraph Co. Outlook: Stable, from Ratings Under Review Northwestern Bell Telephone Company Outlook: Stable, from Ratings Under Review Embarq Corporation Senior Unsecured Regular Bond/Debenture: Baa3 (LGD3, 37%), from Baa3 Outlook: Stable, from Ratings Under Review Centel Capital Corp. Senior Unsecured Regular Bond/Debenture: Downgraded to Baa3 (LGD3, 31%), from Baa2 Outlook: Stable, from Ratings Under Review Embarq Florida, Inc. Senior Secured First Mortgage Bonds: Downgraded to Baa2 (LGD2, 12%), from Baa1 Outlook: Stable, from Ratings Under Review Carolina Telephone & Telegraph Co. Senior Secured First Mortgage Bonds: Downgraded to Baa2 (LGD2, 12%), from Baa1 Outlook: Stable, from Ratings Under Review United Telephone Co. of Pennsylvania Senior Secured First Mortgage Bonds: Downgraded to Baa2 (LGD2, 12%), from Baa1 Outlook: Stable, from Ratings Under Review Ratings Rationale: "The downgrade of CenturyLink's rating reflects Moody's view that management's tolerance for higher financial leverage is inconsistent with an investment grade rated wireline telecom service provider," stated Dennis Saputo, Moody's Senior Vice President. On February 13, 2013, the company announced revisions to its capital allocation strategy including a new goal to maintain leverage at less than 3.0 times Debt to EBITDA (about 3.5 times including Moody's standard adjustments for leases and pensions). Consequently, the company's leverage will remain elevated compared to Moody's prior view. And, while the 26% reduction in the common stock dividend would, all else being equal, be considered a positive development for bondholders, it does not offset the negative impact of management's tolerance for higher leverage. Furthermore, CenturyLink's announcement that it is likely to direct more cash to repurchase common stock than it saves from reducing its dividend by 26% is negative for its credit rating. Finally, Moody's believes that the company is unlikely to return to its prior leverage target as the new capital structure supports higher equity returns and reduces the imbalance between its cost of debt and cost of equity. CenturyLink's Ba1 Corporate Family Rating largely reflects the challenges that it faces in reversing the downward pressure on revenues and sustaining EBITDA margins exacerbated by a tolerance for higher leverage. At the same time, the ratings benefit from the predictability of the company's cash flows and its broad scale of operations. Moody's believes that revenue expansion will prove elusive for the next two to three years as modest growth in enterprise and hosting services fail to offset ongoing consumer and wholesale weakness. More significantly, EBITDA will come under pressure as merger synergies from recent acquisitions fade and ongoing efforts to improve business efficiency fail to offset the negative margin impact of an unfavorable product mix shift. In addition, the company is likely to continue investing in various growth opportunities (enterprise, hosting, broadband, etc.) in an effort to drive long-term revenue and profit growth. These investments will initially pressure overall margins before they begin producing a return. Capital spending is expected to remain relatively stable over the next few years with the company continuing to expand its IPTV footprint and invest in other growth initiatives (i.e. data center capacity, managed hosting and broadband expansion). Interest expense will trend up slowly, but steadily due mainly to higher interest costs on refinanced debt. And, cash taxes will begin to absorb an increasing percentage of the company's pretax income beginning in 2015, when CenturyLink is expected to have fully utilized its federal income tax net operating loss carry forwards. Consequently, Moody's believes that the boost to free cash flow generated by the dividend reduction will erode over time. Even after the 26% reduction, CenturyLink's dividend will still consume almost half of its discretionary cash flow. CenturyLink had a history of temporarily exceeding its target leverage, followed by decisive debt reduction. However, past instances of higher leverage were primarily driven by strategic M&A and offered post-transaction cash flow growth. In this instance, CenturyLink may fund a portion of its planned share repurchases with debt, a strategy that will not benefit future leverage (i.e. Debt/EBITDA) levels. "We view the new leverage guidelines as permanent," continued Saputo. While management has indicated that the company could take as much as two years to complete the current share repurchase authorization, even if CenturyLink stops or pauses the repurchase activity, acquisitions and/or new share repurchase authorizations are likely over the next few years, and leverage will likely remain close to or very slightly above current levels. LTM to December 31, 2012, Debt to EBITDA (Moody's adjusted) was 3.3 times. Moody's had previously identified Debt to EBITDA (Moody's adjusted) above 3.0 times as a downgrade trigger. The stable outlook reflects Moody's view that the Company will continue to generate healthy levels of free cash flow while maintaining leverage very comfortably below its revised goal of less than 3.0 times Debt/EBITDA (excluding Moody's adjustments). Pushing leverage all the way to the new target would be inconsistent with a Ba1 CFR. CenturyLink currently has a weak liquidity profile and is assigned a Speculative Grade Liquidity ("SGL") rating of SGL-4 largely due to Moody's expectations concerning the timing of share repurchases which for its analysis is expected to be $875 million in 2013, $1.0 billion in 2014 and $125 million in 2015. At the end of 2012, CenturyLink had almost $200 million in cash and about $1.2 billion available under its credit facility. For 2013, Moody's expects CenturyLink to generate about $5.6 billion in cash flow from operations (including integration costs, synergies and pension funding) while investing about $2.9 billion in the network and paying dividends of about $1.3 billion, resulting in about $1.4 billion of free cash flow. Debt maturities total $1.1 billion and share repurchases are expected to be $875 million in 2013. While Moody's recognizes that the Company has predictable cash flow generation and should be well in compliance with its financial covenants during 2013, Moody's estimates that without raising external capital, CenturyLink borrowings under its credit facility would peak at about $1.4 billion during 2Q and 3Q of 2013 and that the company would end the year with less than $700 million available under its revolver. Moody's expects free cash flow in 2014 to be close to the $1.4 billion generated in 2013. In 2014, debt maturities total $700 million and share repurchases are expected to total $1.0 billion. CenturyLink's existing $2.0 billion revolving credit facility expires in April 2017. The facility, which has 18 lenders, has same day availability and does not contain a material adverse change clause. The company's ability to borrow under the facility reduces commensurately with the amount outstanding under the company's commercial paper programs, which in turn is effectively limited to the amount available under the credit facility. Based on its expectations of the company's operating performance, Moody's estimates CenturyLink will maintain ample cushion under the financial covenants contained in the revolving credit facility. The facility contains various covenants, including two financial covenants that limit total funded debt to consolidated EBITDA to no more than 4.0 times (as defined under the credit agreement) and consolidated interest expense and preferred stock dividends to consolidated EBITDA to not less than 1.5 times. Moody's estimates the company is well in compliance with a debt ratio of about 2.6 and interest coverage of about 5.7 times on December 31, 2012. The facility also contains covenants limiting Qwest Corp. debt of 2.85x ongoing and 2.35x prior to the incurrence of additional debt. Borrowings under the credit facility are guaranteed by two of the company's wholly-owned subsidiaries, Embarq Corp. and Qwest Communications International Inc. ("QCII") and one of QCII's wholly-owned subsidiaries, Qwest Services Corporation. The downgrade of CenturyLink's senior unsecured rating from Baa3 to Ba2 reflects its junior position in the capital structure and the relatively significant amount of senior debt that is likely to remain outstanding at Qwest Corporation. Moody's confirmed the Baa3 rating on CenturyLink's credit facility reflecting the structural seniority provided by the subsidiary guarantees. The senior unsecured debt of Qwest Corporation, the Company's largest operating subsidiary, is confirmed at Baa3 based on its structural seniority and relatively low leverage of about 2.2 times Debt to EBITDA (Moody's adjusted) as of LTM September 30, 2012. Moody's notes that CenturyLink plans to refinance maturing debt at Qwest Corporation at this entity. Consequently, Moody's expects leverage at Qwest Corporation to increase for the next few years, at least, since Moody's expects its EBITDA to continue to decline. The senior unsecured debt of Qwest Communications International, Inc. ("QCII) and Qwest Capital Funding, Inc. (which is guaranteed by QCII) is downgraded from Baa3 to Ba1 in accordance with our LGD methodology reflecting its intermediate position in the capital structure between Qwest Corporation and CenturyLink, Inc. The senior unsecured debt of Embarq Corporation is confirmed at Baa3. CenturyLink has indicated that it plans to refinance debt that matures at this entity at the parent company level (CenturyLink, Inc.). Consequently, Moody's expects leverage at Embarq Corporation (3.1 times Debt to EBITDA, Moody's adjusted, as of LTM September 30, 2012) to decline over time. The senior secured debt of Embarq's operating subsidiaries, Embarq Florida, Inc., United Telephone Company of Pennsylvania, and Carolina Telephone & Telegraph Company are all downgraded from Baa1 to Baa2. These securities benefit from structural seniority and the pledge of assets of the operating companies. The senior unsecured debt of Centel Capital Corporation (guaranteed by its direct parent, Centel Corporation) has been downgraded from Baa2 to Baa3 reflecting its structural subordination to the secured debt of the subsidiaries of Centel Corporation, which include Embarq Florida. Although unlikely given the company's new leverage target, Moody's could raise CenturyLink's ratings if leverage were to be sustained below 3.0x (Debt / EBITDA, Moody's adjusted) and free cash flow to debt were in the high single digits. More importantly, Moody's would need evidence that management is committed to a more conservative financial policy. Moody's could lower the ratings further if one of these occurs: a) leverage (Debt / EBITDA, Moody's adjusted) were to exceed 3.4x or free cash flow to debt fell below 5% on a sustained basis; b) revenues or EBITDA materially underperformed Moody's expectations; c) management were to signal further tolerance of additional financial leverage. The principal methodology used in this rating was the Global Telecommunications Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CHARLES GLUTH: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Charles Gluth and Son Roofers, Inc. 2550 Colfax Street Gary, IN 46406 Bankruptcy Case No.: 13-20755 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court Northern District of Indiana (Hammond Division) Judge: J. Philip Klingeberger Debtor's Counsel: Frederick L. Carpenter, Esq. DANIEL L. FREELAND & ASSOCIATES, P.C. 9105 Indianapolis Boulevard Highland, IN 46322 Tel: (219) 922-0800 E-mail: dlf9601b@aol.com - and ? Daniel L. Freeland, Esq. DANIEL L. FREELAND & ASSOCIATES, P.C. 9105 Indianapolis Boulevard Highland, IN 46322 Tel: (219) 922-0800 E-mail: dlf9601b@aol.com - and ? Sheila A. Ramacci (EW), Esq. DANIEL L. FREELAND & ASSOCIATES, P.C. 9105 Indianapolis Boulevard Highland, IN 46322 Tel: (219) 922-0800 Fax: (219) 922-1261 E-mail: dlf9601b@aol.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/innb13-20755.pdf The petition was signed by Herve Poirier, president. COLLECTIVE BRANDS: Loan Increase Cues Moody's to Cut Rating to B2 ----------------------------------------------------------------- Moody's Investors Service downgraded Collective Brands' senior secured term loan to B2 (LGD3, 44%) from B1 (LGD3, 41%). This concludes the review for downgrade initiated on February 14, 2013. Moody's also affirmed the company's B2 Corporate Family Rating and B2-PD Probability of Default Rating. The rating outlook remains negative. These ratings were affirmed: Corporate Family Rating at B2 Probability of Default Rating at B2-PD This rating was downgraded (and LGD assessments amended): Senior secured term loan due 2019 to B2 (LGD3, 44%) from B1 (LGD3, 41%) Ratings Rationale: The downgrade of senior secured term loan rating reflects the closing of an "add-on" of $225 million to the existing term loan, which increased the amount outstanding to $530 million. Proceeds from the add-on were used to fund a distribution to the company's owners. The downgrade reflects the increased amount of secured debt in the company's capital structure without any corresponding increase in any junior capital support. Collective's B2 Corporate Family Rating takes into consideration its recent trend of positive same store sales and improved operating margins at its domestic business, as well as the company's aggressive financial policies evidenced by the recent shareholder distribution. The B2 CFR reflects the company's high financial leverage following the acquisition with debt/EBITDA (incorporating Moody's standard analytical adjustments) in excess of 6 times, the still low operating margins of its domestic Payless ShoeSource business and a strained economic situation for its core customer base. The rating benefits from the company's good overall liquidity profile, as Moody's expects the company will remain cash flow positive and will have access to a $250 million (unrated) asset based revolver. The ratings take into consideration Payless still strong brand equity notwithstanding recent operating challenges, its scale in the retail footwear segment, and a meaningful and growing international presence. Ratings could be upgraded if Collective can sustain positive results from its domestic business while experiencing continued positive growth in its international markets. Quantitatively ratings could be upgraded if EBITA/interest expense is sustained above 1.75 times, and debt / EBITDA is sustained below 5.25 times. The rating outlook could be stabilized if over the course of 2013 the company demonstrates revenue and operating margin stability while maintaining debt/EBITDA near 6 times. Ratings could be downgraded if the company's good liquidity profile were to erode, if recent positive trends in sales and margins were to reverse, or financial policies become more aggressive. Quantitatively, ratings could be lowered if debt/EBITDA is sustained above 6.25 times or if EBITA/interest expense fell below 1.25 times. 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. 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 75.67 cents-on- the-dollar during the week ended Friday, March 15, 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 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 15, among 238 widely quoted syndicated loans with five or more bids in secondary trading. About R.H. Donnelley & Dex Media East Dex One, headquartered in Cary, North Carolina, is a local business marketing services company that includes print directories and online voice and mobile search. R.H. Donnelley Corp. and 19 of its affiliates, including Dex Media East LLC, Dex Media West LLC and Dex Media Inc., filed for Chapter 11 protection (Bank. D. Del. Case No. 09-11833 through 09-11852) on May 28, 2009. They emerged from bankruptcy on Jan. 29, 2010. On the Effective Date and in connection with its emergence from Chapter 11, RHD was renamed Dex One Corporation. Dex One reported a net loss of $518.96 million in 2011 compared with a net loss of $923.59 million for the eleven months ended Dec. 31, 2010. DETROIT, MI: Jones Day Lawyer to Lead Detroit Restructuring ----------------------------------------------------------- BankruptcyData reported that Michigan Governor Rick Snyder, through the State of Michigan's Local Emergency Financial Assistance Loan Board, named Kevyn Orr, a Partner in Jones Day's Business Restructuring & Reorganization Practice, to serve as Detroit's Emergency Financial Manager. According to a Jones Day release, Orr, a University of Michigan graduate (J.D. 1983; B.A. in Political Science 1979), has practiced in the areas of business restructuring, financial institution regulation and commercial litigation for almost 30 years, the BankruptcyData report related. He has played a leading role in many of the nation's highest profile business restructurings, including serving as counsel to Chrysler in its April 30, 2009 Chapter 11 filing. Before entering private practice, he held several leadership positions in the U.S. Government related to financially distressed organizations, including serving as Director of the Executive Office for United States Trustees at the U.S. Department of Justice; Assistant General Counsel of the Complex Litigation and Bankruptcy Section, Resolution Trust Corporation and Counsel, Litigation Section, Federal Deposit Insurance Corporation. BankruptcyData said Orr described this leadership role as the 'Olympics of restructuring' and commented, 'Detroit is a great city. It is a storied city in American history. It's the arsenal of democracy. It was a key component of freeing the world of fascism. I feel compelled to do this job.' DOUGLAS DYNAMICS: Moody's Retains B1 CFR and Senior Loan Ratings ---------------------------------------------------------------- Moody's Investors Service says liquidity helps Douglas Dynamics maintain ratings despite weak operating performance in 2012. Douglas Dynamics is the North American leader in the design, manufacture, sale and support of snow and ice control equipment through its Western, Fisher, and Blizzard brands. On March 9, 2011, Moody's upgraded Douglas Dynamics's Corporate Family Rating to B1 from B2, and assigned a B1 rating to the proposed $125 million senior secured term loan facility. EDUCATION HOLDINGS: Prepackaged Plan Declared Effective ------------------------------------------------------- BankruptcyData reported that Education Holdings 1's Modified Prepackaged Chapter 11 Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Company's Plan on March 7, 2013. BankruptcyData related that the primary purpose of the Debtor's Plan is to effectuate the restructuring of the Company's capital structure in order to bring it into alignment with the Company's present and future operating prospects and to provide the Company with greater liquidity. Marie Beaudette at Dow Jones' DBR Small Cap reports that the Massachusetts company that recently sold the Princeton Review test-preparation company has emerged from Chapter 11 protection under the control of its lenders. 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. ERNESTO PEREZ: Ex-Wife's Bid to Dismiss Case Partially Denied ------------------------------------------------------------- Bankruptcy Judge Enrique Lamoutte has denied in part a motion to dismiss the case In re ERNESTO ANTONIO MELENDEZ PEREZ CHAPTER 11 Debtor, Case No. 12-03808 (Bankr. D. P.R.), with respect to obligations to pay $2,000 per month and certain mortgage payments. The Motion to Dismiss was brought by Mr. Perez's former spouse, Margarita Diaz Rivera, who alleged that "the debtor [failed] to pay any domestic support obligation that first becomes payable after the date of the filing of the petition." Mr. Melendez filed for a bankruptcy petition on May 16, 2012. He included Mrs. Diaz in the schedule of unsecured creditors for an unliquidated and disputed unsecured claim regarding a conjugal partnership liquidation. The couple divorced in 2003. They have two daughters. Judge Lamoutte held that is it is uncontested that the $3,000 monthly payment, the health insurance coverage for Mrs. Diaz, and the disability insurance policy naming Mrs. Diaz as the sole beneficiary constitute domestic support obligations under 11 U.S.C. Sec. 101(14A). "Thus, the same must be currently paid," the judge said. The additional $2,000 monthly payment and the mortgage payment of Mrs. Diaz's residence, however, are not domestic support obligations under 11 U.S.C. Sec. 101(14A), but rather form part of the liquidation and division of conjugal assets property settlement agreed upon by the parties during their divorce proceedings, the judge opined. The bankruptcy court will hold an evidentiary hearing regarding the life insurance policy obligation to determine the intent of the parties at the time of the divorce proceedings and thus, determine whether the same constitutes a domestic support obligation or forms part of the property settlement. The evidentiary hearing has been scheduled for May 29, 2013 at 9:30 a.m. A copy of Judge Lamoutte's March 11, 2013 Opinion and Order is available for free at http://is.gd/ELitFDfrom Leagle.com. EXETER HOLDING: State Court to Hear Suits v. First American et al ----------------------------------------------------------------- At the behest of First American Title Insurance Company of New York, Bankruptcy Judge Alan S. Trust abstained from hearing four removed actions and remanded these actions to state court to be prosecuted to judgment: -- EXETER HOLDING, LTD., Plaintiff, v. AFC REAL ESTATE, LLC, 1.2.3. HOLDING CORP., ALAN KASPER, and ELVIRA PALAZZO, Defendants (Bankr. E.D.N.Y. Adv. Proc. No. 12-8392); -- 1.2.3. HOLDING CORP., Plaintiff, v. EXETER HOLDING, LTD., Defendant (Bankr. E.D.N.Y. Adv. Proc. No. 12-8393); -- EXETER HOLDING, LTD., Plaintiff, v. FIRST AMERICAN TITLE INSURANCE COMPANY OF NEW YORK, Defendant (Bankr. E.D.N.Y. Adv. Proc. No. 12-8395); and -- VERA PALAZZO, Plaintiff, v. 1.2.3. HOLDING CORP., and EXETER HOLDING, LTD., Defendants (Bankr. E.D.N.Y. Adv. Proc. No. 12-8410) Prior to the bankruptcy filing, Exeter Holding, Ltd., was a party to a number of lawsuits that were pending in the New York State Supreme Court. In October and November 2012, the Debtor removed each of the actions to the Bankruptcy Court. Three of the Removed Actions -- 12-8392, 12-8393 and 12-8410 -- involve a series of interrelated disputes among the Debtor, AFC Real Estate LLC, 1.2.3. Holding Corp., Alan Kasper and his wife, Elvira Palazzo (also called Vera Palazzo), regarding the priority of liens on and title to real property located at 106 Trafalgar Drive, Shirley, New York. The Debtor and Palazzo each hold mortgages on the Shirley Property which they are each seeking to foreclose. 1.2.3. Holding holds title to the Shirley Property, which it acquired in part from AFC and in part from another entity that is not a party to any Removed Action. The Debtor sued AFC, 1.2.3. Holding, Kasper, and Palazzo seeking to set aside the deed from AFC to 1.2.3. as a fraudulent conveyance (Adv. Proc. No. 12-8392). 1.2.3. Holding is seeking to have the Debtor's mortgage declared null and void (Adv. Proc. No. 12-8393). Palazzo sued 1.2.3. Holding and the Debtor to foreclose her mortgage, which she claims has priority over the Debtor's mortgage (Adv. Pro. No. 12-8410-ast). The fourth Removed Action, 12-8395-ast, is unrelated and involves claims by the Debtor against First American Title Insurance Company. The Debtor seeks $320,000 in damages and other relief for First American's alleged failure to disclose the existence of prior liens against three properties located at 728 Berriman Street, Brooklyn, New York; 59-36 161st Street, Flushing, New York; and 61-18 Parson Boulevard, Flushing, New York, resulting in the Debtor being deprived of a priority lien position against these properties. The Debtor further alleges that it retained First American to record documents necessary to perfect Debtor's mortgage lien, but that First American "failed to timely record the documents" which resulted in the Debtor not being named as a defendant in a foreclosure action. Thus, the Debtor is claiming, in part, that due to First American's conduct, the Debtor was denied the opportunity to challenge the priority or validity of another party's mortgage lien that was foreclosed, divesting the Debtor of an enforceable lien against the subject properties. The Court scheduled pretrial conferences in each Removed Action for Dec. 5, 2012. At the Initial Conferences, the Court directed counsel for each non-Debtor party to file a brief by Jan. 4, 2013, addressing (1) whether the Court should abstain from hearing the Removed Action(s), and (2) the implications of abstention on the Removed Actions. The Court directed the Debtor to file a response by Jan. 18, 2013. On Jan. 4, First American filed a brief in support of abstention and remand in the First American Action. No other non-Debtor party filed a brief as directed. On Jan. 18, the Debtor filed a brief in opposition to abstention and remand in each Removed Action. On Jan. 29, First American filed a statement pursuant to Bankruptcy Rule 7008(a) stating that the Debtor's claims against it are non-core, and that it does not consent to entry of a final judgment. To date, no other non-Debtor party has filed a Bankruptcy Rule 7008(a) statement. Additionally, neither First American nor any other non-Debtor party has filed a proof of claim in the Debtor's main bankruptcy case; the bar date to file prepetition claims ran on Jan. 30, 2013. In each Removed Action, the Debtor filed a statement pursuant to Bankruptcy Rule 7008(a) stating that the Debtor's claims are core and consenting to entry of final judgment by the Court. The Debtor has filed proposed discovery control plans in all four Removed Actions. Judge Trust ruled that: -- with respect to the First American Action, 12-8395, abstention is mandated under 28 U.S.C. Sec. 1334(c)(2); permissive abstention is warranted under Sec. 1334(c)(1); and the First American Action is remanded to the New York Supreme Court, County of Queens, pursuant to 28 U.S.C. Sec. 1452(b) and Bankruptcy Rule 5011(c); -- with respect to the three Shirley Actions -- 12-8392, 12-8393-ast and 12-8410-ast -- permissive abstention is warranted under Sec. 1334(c)(1), and those actions are remanded to the New York Supreme Court, County of Suffolk, pursuant to Sec. 1452(b) and Bankruptcy Rule 5011(c); and -- all parties to the Removed Actions are authorized to return to the respective State Court handling each Removed Action to prosecute such Action through to judgment on the merits, and any appeals therefrom; however, no party to a Removed Action will be allowed to enforce a judgment against Debtor or against property of the Debtor's bankruptcy estate without first obtaining leave of the Bankruptcy Court; and -- all unexpired deadlines in the Bankruptc Court's Initial Adversary Scheduling Orders issued in each Removed Action are vacated. A copy of the Court's March 13 Decision and Order is available at http://is.gd/s2Q1JWfrom Leagle.com. EXPERT GLOBAL: S&P Puts B Issuer Credit Rating on CreditWatch Neg ----------------------------------------------------------------- Standard & Poor's Rating Services said that it placed its ratings, including its 'B' issuer credit rating, on Expert Global Solutions LLC (EGS) on CreditWatch with negative implications. "The CreditWatch placement reflects our expectation that EGS will likely violate a leverage covenant unless it amends its debt agreement," said Standard & Poor's credit analyst Kevin Cole. "We believe that the debtholders will most likely agree to some easing of the existing covenants but could also require EGS to pay a higher interest rate on the debt." The company may also have to tighten covenant headroom, meaning it could be at risk of further violations. EGS has reported worse-than-expected operating results since its recapitalization and acquisition of APAC Customer Services Inc. (not rated) in April 2012. EGS' debt agreements include covenants that periodically tighten. The company's leverage ratio (operating company debt over EBITDA plus certain synergy assumptions), as defined in its credit agreement, has risen steadily over the past few quarters. S&P believes that the company will likely breach its covenant maximum, which will be 4.25x as of March 31, 2013. The company will not have technically breached that covenant until it is scheduled to report first- quarter results in mid-May. The company's performance has been worse than expected over the past few quarters due to disappointing volumes in its collections and customer service businesses. Although S&P believes that volumes have stabilized and could increase in 2013, the company's credit metrics will likely worsen in the next few quarters. "We plan to resolve the CreditWatch placement once we know the terms of any potential amendment between EGS and its lenders," said Mr. Cole. S&P could lower the ratings on EGS by at least one notch, depending on the level of covenant headroom the company has going forward and how much its debt servicing costs increase. If the company is unable to amend its credit agreement during the next few weeks, S&P could lower the ratings by multiple notches. FKF 3 LLC: Default Judgment Entered in Clawback Suits ----------------------------------------------------- Bankruptcy Judge Cecelia G. Morris granted the request of Gregory Messer, Trustee of the FKF Trust, for entry of default judgments against seven defendants. Judge Morris said defendants Gary M. Ricci; GMR, LLC; 333, LLC; Conrad Roncati; and Ariston Properties, L.L.C., failed to establish good cause sufficient to set aside the entries of default. The Trustee commenced the adversary proceeding on July 18, 2012. The Trustee seeks to recover $3,193,750 from GMR LLC; Gary M. Ricci; and Conrad Roncati, jointly and severally, for breach of contract and turnover of property of the estate. The Complaint also seeks to recover $1,100,000 from Ariston; 333 LLC; One Development of Edgewater, L.L.C.; and One Degree, LLC, jointly and severally, for certain alleged fraudulent transfers made by the Debtor to these entities. At the center of both of these claims is an alleged loan made by the Debtor to GMR and its principal, Gary M. Ricci. The Trustee alleges that in April 2006, GMR presented the Debtor with an amended note, promising to repay $1,500,000, together with interest, on the Note's maturity date. The Note replaced a previous promissory note. In total, the Trustee alleges that the Debtor loaned various entities $1,100,000 in cash, with the remaining $400,000 in principal attributable to another transfer to Ricci. Contemporaneous with the execution of the Note, Ricci and Roncati allegedly guaranteed the full, prompt, and unconditional repayment of the loan. In addition, Ricci and Roncati pledged their membership interests in Ariston and GMR, respectively, to the Debtor as additional security for GMR's obligations under the Note. The Trustee served a copy of the complaint upon all Defendants on July 24, 2012. The deadline to file an answer, or otherwise reply expired on Aug. 22, 2012 without a response from any of the Defendants. At the Trustee's request, the Clerk of Court entered a default against all the Defendants on Sept. 6, 2012. On Sept. 5, 2012, the Trustee requested that another summons be issued. The second summons was issued by the Clerk's Office and GMR, Ricci, Ariston, and Roncati were re-served at different addresses on Sept. 10. The deadline to file an answer or otherwise reply to the Second Summons expired Oct. 9 without a response from any of these Defendants. Thereafter, the Trustee requested that a second default be entered against GMR, Ricci, Ariston, and Roncati. The Trustee states that the Clerk's Office advised that the defaults previously entered were valid. On Nov. 15, 2012, the Trustee filed a Motion for Default Judgment, which was served upon all Defendants at all addresses previously utilized by the Trustee for service. The deadline to file a response expired Dec. 10 without a response from any of the Defendants. On Dec. 21, 2012, Ricci filed an objection on behalf of himself, GMR, and 333. On Dec. 26, Roncati filed an objection, through counsel, on behalf of himself and Ariston. On Jan. 4, 2013, the Trustee filed a response to the objections. On Jan. 18, 2012, Ricci filed a letter with the Court regarding his failure to appear at the Jan. 8 hearing, in which he advised the Court that he was under the impression that he did not need to attend the hearing. The case is, Gregory Messer, as Trustee of the FKF Trust, Plaintiff, v. GMR, LLC, Ariston Properties, L.L.C., One Development of Edgewater, L.L.C., One Degree, LLC, 333, LLC, Gary M. Ricci, and Conrad Roncati, Defendants, Adv. Proc. No. 12-09072 (Bankr. S.D.N.Y.). Mr. Messer is represented by Klestadt & Winters, LLP's Fred Stevens, Esq. -- fstevens@klestadt.com -- and Maeghan J. McLoughlin, Esq. -- mmcloughlin@klestadt.com The Law Offices of Charles Shaw, P.C., in Dumont, New Jersey -- charles@charlesshawlaw.com -- argues for Conrad Roncati and Ariston Properties, LLC. A copy of the Court's March 13, 2013 Memorandum Decision is available at http://is.gd/CJiVcHfrom Leagle.com. Three creditors filed an involuntary Chapter 11 petition (Bankr. S.D.N.Y. Case No. 10-37170) against FKF 3, LLC, on July 19, 2010. The Debtor consented to the order for relief, and the Court entered it on Aug. 9, 2010. On April 18, 2011, the Court confirmed the Joint Plan of Liquidation of FKF 3, LLC, pursuant to which the FKF Trust was created and Gregory Messer was appointed trustee. FERRAIOLO CONSTRUCTION: Voluntary Chapter 11 Case Summary --------------------------------------------------------- Debtor: Ferraiolo Construction, Inc. fka Ferraiolo Precast, Inc. Ferraiolo Corp. Ferraiolo Real Estate Company, Inc. 28 Gordon Drive Rockland, ME 04841 Bankruptcy Case No.: 13-10164 Chapter 11 Petition Date: March 13, 2013 Court: U.S. Bankruptcy Court District of Maine (Bangor) Judge: Louis H. Kornreich Debtor's Counsel: George J. Marcus, Esq. MARCUS, CLEGG & MISTRETTA, P.A. One Canal Plaza, Suite 600 Portland, ME 04101-4102 Tel: (207) 828-8000 E-mail: bankruptcy@mcm-law.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by John Ferraiolo, president and treasurer. FIBERTOWER CORP: Keeps Chapter 11 Control Amid Wind-Down -------------------------------------------------------- Marie Beaudette at DBR Small Cap reports that a bankruptcy judge said FiberTower Corp. can keep control over its Chapter 11 case while it works to wind down its business. As reported in the March 12 edition of the TCR, the Debtors asked the Court to further extend the period by which they have exclusive right to propose a plan until Aug. 12, 2013, and solicit acceptances of that plan until Oct. 11. The Debtors said in court filings that they require the additional time to propose, and solicit acceptances for, a Chapter 11 plan because, as a result of the Federal Communications Commission's denial of their applications, the entry into the term sheet with the so-called Participating Carriers, and the Debtors' negotiations with respect sales of their assets, they are still deliberating the terms of a Chapter 11 plan. In addition, the Debtors said they need additional time to negotiate and finalize the terms of any plan with the holders of 2016 Notes, among other interested parties. Lastly, the additional time will extend the Exclusivity Period beyond the shut-down date under the Carrier Term Sheet and thereby provide the Debtors with clarity with respect to proposing a Chapter 11 plan. About FiberTower Corporation FiberTower Corporation, FiberTower Network Services Corp., FiberTower Licensing Corp., and FiberTower Spectrum Holdings LLC filed for Chapter 11 protection (Bankr. N.D. Tex. Case Nos. 12-44027 to 12-44031) on July 17, 2012, together with a plan support agreement struck with prepetition secured noteholders. FiberTower is an alternative provider of facilities-based backhaul services, principally to wireless carriers, and a national provider of millimeter-band spectrum services. Backhaul is the transport of voice, video and data traffic from a wireless carrier's mobile base station, or cell site, to its mobile switching center or other exchange point. FiberTower provides spectrum leasing services directly to other carriers and enterprise clients, and also offer their spectrum services through spectrum brokerage arrangements and through fixed wireless equipment partners. FiberTower's significant asset is the ownership of a national spectrum portfolio of 24 GHz and 39 GHz wide-area spectrum licenses, including over 740 MHz in the top 20 U.S. metropolitan areas and, in the aggregate, roughly 1.72 billion channel pops (calculated as the number of channels in a given area multiplied by the population, as measured in the 2010 census, covered by these channels). FiberTower believes the Spectrum Portfolio represents one of the largest and most comprehensive collections of millimeter wave spectrum in the U.S., covering areas with a total population of over 300 million. As of the Petition Date, FiberTower provides service to roughly 5,390 customer locations at 3,188 deployed sites in 13 markets throughout the U.S. The fixed wireless portion of these hybrid services is predominantly through common carrier spectrum in the 11, 18 and 23 GHz bands. FiberTower's biggest service markets are Dallas/Fort Worth and Washington, D.C./Baltimore, with additional markets in Atlanta, Boston, Chicago, Cleveland, Denver, Detroit, Houston, New York/New Jersey, Pittsburgh, San Antonio/Austin/Waco and Tampa. As of June 30, 2012, FiberTower's books and records reflected total combined assets, at book value, of roughly $188 million and total combined liabilities of roughly $211 million. As of the Petition Date, FiberTower had unrestricted cash of roughly $23 million. For the six months ending June 30, 2012, FiberTower had total revenue of roughly $33 million. With the help of FTI Consulting Inc., FiberTower's preliminary valuation work shows that the Company's enterprise value is materially less than $132 million -- i.e., the approximate principal amount of the 9.00% Senior Secured Notes due 2016 outstanding as of the Petition Date. The preliminary valuation work is based upon the assumption that FiberTower's spectrum licenses will not be terminated. Fibertower Spectrum disclosed $106,630,000 in assets and $175,501,975 in liabilities as of the Chapter 11 filing. Judge D. Michael Lynn oversees the Chapter 11 case. Lawyers at Andrews Kurth LLP serve as the Debtors' lead counsel. Lawyers at Hogan Lovells and Willkie Farr and Gallagher LLP serve as special FCC counsel. FTI Consulting serve as financial advisor. BMC Group Inc. serve as claims and noticing agent. The petitions were signed by Kurt J. Van Wagenen, president. Wells Fargo Bank, National Association -- as indenture trustee and collateral agent to the holders of 9.00% Senior Secured Notes due 2016 owed roughly $132 million as of the Petition Date -- is represented by Eric A. Schaffer, Esq., at Reed Smith LLP. An Ad Hoc Committee of Holders of the 9% Secured Notes Due 2016 is represented by Kris M. Hansen, Esq., and Sayan Bhattacharyya, Esq., at Stroock & Stroock & Lavan LLP. Wells Fargo and the Ad Hoc Committee also have hired Stephen M. Pezanosky, Esq., and Mark Elmore, Esq., at Haynes and Boone, LLP, as local counsel. U.S. Bank, National Association -- in its capacity as successor indenture trustee and collateral agent to holders of the 9.00% Convertible Senior Secured Notes due 2012, owed $37 million as of the Petition Date -- is represented by Michael B. Fisco, Esq., at Faegre Baker Daniels LLP, as counsel and J. Mark Chevallier, Esq., at McGuire Craddock & Strother PC as local counsel. William T. Neary, the U.S. Trustee for Region 6 appointed five members to the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee is represented by Otterbourg, Steindler, Houston & Rosen, P.C., and Cole, Schotz, Meisel, Forman & Leonard, P.A. Goldin Associates, LLC serves as its financial advisors. GF 5001: Case Summary & 9 Largest Unsecured Creditors ----------------------------------------------------- Debtor: GF 5001 Washington, LLC 5001 W. Washington Chicago, IL 60644 Bankruptcy Case No.: 13-10247 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtors' Counsel: Lester A. Ottenheimer, III, Esq. OTTENHEIMER LAW GROUP, LLC 750 Lake Cook Road, Suite 140 Buffalo Grove, IL 60090 Tel: (847) 520-9400 Fax: (847) 520-9410 E-mail: lottenheimer@olawgroup.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- GF 6 Mason, LLC 13-10248 Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Silas Shadid, managing member. A. A copy of GF 5001 Washington's list of its nine largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/ilnb13-10247.pdf B. A copy of GF 6 Mason's list of its 12 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/ilnb13-10248.pdf GILBERT AUTO: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Gilbert Auto of Walla Walla, LLC dba Gilbert Chrysler Jeep Dodge Ram P.O. Box 497 Walla Walla, WA 99362 Bankruptcy Case No.: 13-01066 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court Eastern District of Washington (Spokane/Yakima) Judge: Frank L. Kurtz Debtors' Counsel: Barry W. Davidson, Esq. DAVIDSON BACKMAN MEDEIROS, PLLC 601 W. Riverside Avenue, Suite 1550 Spokane, WA 99201 Tel: (509) 624-4600 Fax: (509) 623-1660 E-mail: bdavidson@dbm-law.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- Gilbert Chevrolet, LLC 13-01067 Assets: $1,000,001 to $10,000,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Mark W. Gilbert, member. A. A copy of Gilbert Auto of Walla Walla's list of its 20 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/waeb13-01066.pdf B. A copy of Gilbert Chevrolet's list of its 20 largest unsecured creditors filed with the petition is available for free at http://bankrupt.com/misc/waeb13-01067.pdf GLATFELTER COMPANY: Dresden Papier Purchase is Credit Positive -------------------------------------------------------------- Moody's Investors Service commented that P. H. Glatfelter Company (Glatfelter, Ba1 stable) announcement that it had signed a definitive agreement to acquire German based nonwoven wallpaper base producer Dresden Papier GmbH (Dresden Papier, not rated) for EUR160 million (approximately $209 million) is credit positive. The deal modestly increases the Glatfelter's scale, product and geographic diversification, and is consistent the company's growth strategy in acquiring leading businesses to offset the company's declining paper based operations. The company's Ba1 corporate family rating, Ba1 senior unsecured rating, SGL-1 liquidity rating and stable outlook remain unchanged. The principal methodology used in rating Glatfleter was the Global Paper and Forest Products Industry Rating Methodology published in September 2009. Headquartered in York, Pennsylvania, P. H. Glatfelter Company manufactures specialty papers and fiber-based engineered products. 2012 revenue was $1.6 billion, with about two-thirds of the company's sales generated from assets located in North America and the balance from operating assets located in Europe. GULF FLEET: Trustee Gets Favorable Ruling in Suit vs. Triple "C" ---------------------------------------------------------------- ALAN GOODMAN, TRUSTEE FOR THE GULF FLEET LIQUIDATING TRUST, Plaintiff, v. TRIPLE "C" MARINE SALVAGE, INC., Defendant, Adversary Case No. 12-05024, involves preference claims by Alan Goodman, the trustee of the Gulf Fleet Liquidating Trust against Triple "C" Marine Salvage, Inc. The court previously granted in part and denied in part the Trustee's motion for summary judgment on its preference claims as well as Triple "C"'s defenses. The court granted the motion with respect to the Trustee's case-in- chief and Triple "C"'s new value defenses, but denied the motion with respect to Triple "C"'s ordinary course defense. On Jan. 17, 2013, the court conducted a one-day trial on Triple "C"'s ordinary course defense, and took the case under advisement following the trial. After considering the trial record, the parties' arguments, and the relevant authorities, Judge Robert Summerhays of the U.S. Bankruptcy Court for the Western District of Louisiana grants judgment in favor of the Trustee on his section 547(b) preference claim in the amount of $27,400. The Court directs the Trustee to prepare and submit a judgment that reflects the Court's ruling. A copy of the Bankruptcy Court's March 12, 2013 Decision is available at http://is.gd/Ab3Ysifrom Leagle.com. About Gulf Fleet Lafayette, Lousiana-based Gulf Fleet Holdings, Inc. -- along with affiliates Star Marine, LLC; Gulf Wind, LLC; Gulf Service, LLC; Gulf Worker, LLC; Hercules Marine, LLC; Gulf Fleet, LLC; Gulf Fleet Marine, Inc.; Gulf Fleet Management, LLC; Gulf Fleet Offshore, LLC; and Gulf Ocean Marine Services, LLC -- filed for Chapter 11 bankruptcy protection on May 14, 2010 (Bankr. W.D. La. Case No. 10-50713). Gulf Fleet owned and operated a fleet of offshore and fast supply vessels that supported oil and gas exploration and production companies and other oilfield service companies. Gulf Fleet also operated an independent vessel brokerage business. Gulf Fleet estimated $100 million to $500 million in assets and $50 million to $100 million in debts in its Chapter 11 petition. In their schedules, affiliate Gulf Fleet, LLC, disclosed $2,088,277 in assets and $83,891,116 in liabilities; Gulf Fleet Management, LLC, disclosed $943,256 in assets and $45,071,399 in liabilities; and Gulf Ocean Marine Services, LLC, disclosed $15,777,138 in assets and $79,513,230 in liabilities. R. Michael Bolen, U.S. Trustee for Region 5 appointed seven members to the official committee of unsecured creditors. The Committee is represented by Alan H. Goodman, Esq., Christopher D. Johnson, Esq., and Hugh M. Ray, Jr., Esq. HARSCO CORP: Moody's Cuts Senior Unsecured Debt Rating to 'Ba1' --------------------------------------------------------------- Moody's Investors Service downgraded Harsco Corp.'s senior unsecured ratings to Ba1 from Baa3, and downgraded its commercial paper rating to Not-Prime from Prime-3. In addition, Moody's has assigned the company a Ba1 Corporate Family Rating, a Ba1-PD Probability of Default Rating, and an SGL-3 Speculative Grade Liquidity Rating. The rating outlook is stable. This concludes the review for possible downgrade initiated on December 11, 2012. These rating actions were taken: Corporate family rating, Ba1 assigned; Probability of default rating, Ba1-PD assigned; Senior unsecured ratings, downgraded to Ba1 (LGD4-54%) from Baa3; Senior unsecured shelf rating, downgraded to (P)Ba1 from (P)Baa3; Subordinated shelf rating, downgraded to (P)Ba2 from (P)Ba1; Preferred shelf rating, downgraded to (P)Ba3 from (P)Ba2; Commercial paper rating, downgraded to Not-Prime from Prime-3; and, Speculative grade liquidity rating, SGL-3 assigned Rating Rationale The downgrade of Harsco's ratings reflects Moody's view that the company's future level of earnings relative to its debt service requirements and the amount of debt utilized in its capital structure will result in key credit metrics reflecting a Ba credit profile. Further, Moody's expects key end markets to remain weak over the near term. Harsco relies heavily on global non- residential construction and infrastructure spending, which, in Moody's view, will remain weak for the remainder of the year and well into 2014. The global steel industry currently has weak growth prospects. Steel demand in the US does not support a sustainable recovery over the next 12-18 months, and the European steel industry remains under pressure. Although Moody's anticipates some rebound in the US non-residential construction sector, which would benefit Harsco's Infrastructure business, uncertain economic conditions in Europe may offset any gains, particularly in the United Kingdom and several other Western European countries. In aggregate, Western Europe accounts for about 36% of Harsco's total revenues. Moody's forecasts Harsco's interest coverage, defined as EBIT-to-interest expense, approaching 3.0 times over the next 18 months, debt-to-EBITDA slightly over 3.0 times, and debt-to-book capitalization close to 65% by the end of 2014 (all ratios incorporate Moody's standard adjustments). Harsco's Ba1 Corporate Family Rating benefits from its competitive position in various infrastructure, industrial service and manufacturing businesses, its moderate size, and its diverse global footprint, all of which provide an offset to the weak credit metrics. Solid backlog in excess of $4.9 billion at the end of fiscal 2012 provides a good base for recurring revenues within the Metals and Minerals segment. Also, Moody's anticipates some operating improvement as Harsco benefits from past restructuring efforts and a renewed focus on cash generation and business unit alignment. The SGL-3 speculative grade liquidity rating reflects Moody's expectation that Harsco will maintain an adequate liquidity profile over the next 12 months. Constraining the liquidity rating is Harsco's need for significant levels of maintenance and growth capital expenditures, which limits its ability to generate large amounts of free cash flow. Although revolver availability should be sufficient to fund potential operating cash shortfalls and to redeem the company's $150 million Notes due September 2013, the usage of the revolver to refinance long-term debt limits Harsco's liquidity as well. The stable rating outlook encompasses Moody's expectations that key credit metrics will improve gradually over the next 12 to 18 months, becoming more supportive of the corporate family rating. Also, Harsco's business profile and availability under the revolving credit facility gives it the financial flexibility to support growth initiatives and to contend with the global economic uncertainties, especially in Western Europe. The Ba1 rating assigned to $850 million in senior unsecured notes -- the same as the corporate family rating -- reflects their position as the preponderance of committed debt in Harsco's capital structure. Positive rating actions over the intermediate term are unlikely as Harsco needs to demonstrate its ability to improve and sustain operating margins and cash flows. However, over the longer term, adjusted EBIT-to-interest expense remaining above 4.5 times, adjusted debt-to-EBITDA sustained below 3.0 times, adjusted debt- to-book capitalization sustained below 50%, and an improved liquidity profile would be supportive of positive rating actions. A rating downgrade could result if Harsco is not achieving the expected level of operating margin improvement following its cost reduction programs or if financial performance deteriorates due to a further decline in the company's end markets. Adjusted EBIT-to- interest expense sustained below 2.75 times, adjusted debt-to- EBITDA above 3.5 times for an extended period of time, or deterioration in the liquidity profile could pressure the ratings. The principal methodology used in this rating was the Global Steel Industry Methodology 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. Harsco Corporation, headquartered in Camp Hill, PA, is a diversified industrial service company focused on global markets for infrastructure access, outsourced services to metal industries, metal recovery & mineral-based products, railway track maintenance and certain industrial equipment. Revenues for the 12 months through December 31, 2012 totaled approximately $3.0 billion. HAVRE AERIE: Groven's $290,700 Judgment Lien Avoidable ------------------------------------------------------ HAVRE AERIE #166 EAGLES, Plaintiff, v. KAYCEE GROVEN, Defendant, Adv No. 12-00027 (Bankr. D. Mont.), seeks to avoid, under 11 U.S.C. Sec. 547(b), a judicial lien obtained by Kaycee Groven and to have Groven's claim declared wholly unsecured. In a March 14, 2013 Memorandum of Decision available at http://is.gd/b0lyKdfrom Leagle.com, Bankruptcy Judge Ralph B. Kirscher said judgment shall be entered against Groven avoiding her judicial lien as a preference under Sec. 547(b), and allowing Groven's claim as an unsecured nonpriority claim. The Havre Eagles Club is a not-for-profit corporation organized under Montana law. On April 19, 2012, the Montana Twelfth Judicial District Court, Hill County, entered a judgment in favor of the Defendant and against the Debtor, in the amount of $290,780.75. Havre Aerie #166 Eagles, aka Fraternal Order of Eagles, filed its Chapter 11 case (Bankr. D. Mont. Case No. 12-60679), eight days later on April 27. A copy of the petition is available at http://bankrupt.com/misc/mtb12-60679.pdf The Debtor is represented by Steven M. Johnson, Esq. -- sjohnson@chjw.com -- at Church, Harris, Johnson & Williams, P.C. Groven was represented by Philip Alder Hohenlohe, Esq., at Hohenlohe Jones PLLP. The Defendant obtained her state court judgment within 90 days before the filing of the Havre Eagle Club's Chapter 11 petition on an otherwise unsecured debt for the sum of $290,780.75, which gave rise, at the time the judgment was entered, to a statutory judgment lien under Montana Code Annotated, Sec. 25-9-301(2) against the Debtor's real property located at 202 First Street in Havre, Montana, that constitutes the club house of Havre Eagles Club. According to Judge Kirscher, Groven's judgment lien is a transfer as defined by 11 U.S.C. Sec. 101(54) made for or on account of an antecedent debt owed by the Havre Eagles Club before the transfer was made, as those terms are used in 11 U.S.C. Sec. 547(b). The Transfer was made on or within 90 days before the date the Debtor's petition was filed. The Transfer, i.e. Groven's judicial lien/judgment lien, was to or for the benefit of a creditor, i.e. Defendant Groven. The fair valuation (fair market value) value of the Debtor's real estate and building and real estate fixtures located thereon is $132,500, and the fair valuation of the Debtor's liquor license is $62,500. The real property is encumbered by a first priority real estate trust indenture lien in favor of Independence Bank which secures a promissory note in favor of Independence Bank. The balance owing on the promissory note secured by a trust indenture against the Debtor's real estate in favor of Independence Bank is $118,000 as established by the terms of the Stipulation for Treatment of Independence Bank's Secured Claim under the Debtor's Chapter 11 Plan filed Nov. 16, 2012. The judgment lien that arose by entry of the Defendant's judgment against Plaintiff is a second priority lien and is junior to the lien of trust indenture securing the claim of Independence Bank, which is secured by first priority lien against the Havre Eagles Club's real property. HERTZ CORP: Moody's Rates New $250 Million Senior Notes 'B2' ------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to The Hertz Corporation's $250 million of senior unsecured notes. Proceeds from the issuance, along with approximately $225 million of cash, will fund a share repurchase of about $475 million by Hertz's parent company - Hertz Global Holdings, Inc. (Hertz Holdings). The transaction will not materially weaken Hertz's financial metrics and liquidity profile. Hertz's B1 Corporate Family Rating (CFR), as well as the Ba1 rating of its first lien term loan, B2 rating of its existing senior unsecured debt and SGL-3 Speculative Grade Liquidity rating, are affirmed. Hertz's rating outlook remains stable. Hertz Holdings' has an outstanding $475 million 5.25% convertible note that matures in June 2014. The notes are trading at a significant premium to par with a current market value of approximately $1.1 billion. Hertz currently has a policy of using a combination of cash and common share to settle the conversion of notes. With the current repurchase of common shares, Hertz intends to change its settlement policy for the convertible notes to one of 100% shares. Given Hertz's intended settlement policy for the convertible notes, the current share repurchase will afford the company a partial hedge against future increases in share price, and prevent any further dilutive impact to its weighted average fully diluted shares outstanding. Hertz has approximately $17.6 billion in total debt on a fully- adjusted basis. Consequently, the $250 million in additional debt to fund the share repurchase will have a very modest negative impact on Hertz's credit metrics. However, Moody's notes that key restraints to Hertz's current B1 rating level include the company's need to: 1) reduce its high level of corporate debt (currently $6.4 billion) and 2) bolster its liquidity position given its significant dependence on continued access to the ABS market. Although relatively modest, the $475 million share repurchase will increase Hertz's corporate debt and narrow its cash liquidity position. At year-end 2012 Hertz had debt/EBITDA of 4.5x, and EBITA/interest of 1.8x, (all figures reflect Moody's standard adjustments for pensions and operating leases). In addition, during 2013 Hertz will continue to benefit from a stable used car market, a relatively prudent management of overall fleet size by the major US car rental companies, ongoing realization of operating and vehicle purchasing synergies following the acquisition of Dollar Thrifty, and healthy demand in the equipment rental sector. Hertz's liquidity profile, as reflected in the company's SGL-3 Speculative Grade Liquidity rating, is adequate. It is supported by availability of approximately $1.1 billion under a $1.8 billion ABL facility that matures in 2016, approximately $533 million in unrestricted cash, and the proceeds from the sale of vehicles and equipment. The key uses of cash include vehicle and equipment purchases. Funding these purchases will require Hertz to renew various maturing asset-backed-security (ABS) facilities on an ongoing basis. Moody's believes that the company's existing sources of liquidity, its solid operating performance, the appetite of the ABS market for securities supported by car rental assets, and Hertz's pro-active strategy of planning facility renewals well in advance of maturity will help preserve an adequate liquidity profile. The principal methodology used in this rating was the Global Equipment and Automobile Rental 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. HERTZ CORP: S&P Assigns 'B' Rating to $250MM Sr. Unsecured Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services said that it has assigned its 'B' issue-level rating to Hertz Corp.'s $250 million senior unsecured notes. The recovery rating is '5', indicating S&P's expectation that lenders would receive modest (10%-30%) recovery of principal in the event of a payment default. Hertz Corp. is the major operating subsidiary of Hertz Global Holdings Inc. The company will use proceeds to replenish a portion of its liquidity after using approximately $467 million to repurchase its shares. S&P's ratings on Park Ridge, N.J.-based car renter and equipment renter Hertz Global Holdings Inc., and its major operating subsidiary Hertz Corp., reflect an aggressive financial profile and the price competitive, cyclical nature of on-airport car rentals and equipment rentals. The ratings also incorporate the company's position as the largest global car rental company and the strong cash flow its businesses generate. S&P characterizes Hertz's business risk profile as "fair," its financial risk profile as "aggressive," and its liquidity as "adequate" under S&P's criteria. The outlook is stable. S&P anticipates Hertz's credit metrics will remain stable or improve modestly through 2013, with higher earnings and cash flow offsetting the incremental debt from the 2012 acquisition of competitor Dollar Thrifty Automotive Group Inc. S&P expects funds from operations (FFO) to debt of about 20% and EBITDA to interest coverage in the mid-4x area. S&P could raise the ratings if better-than-expected earnings or significant debt reduction resulted in FFO to debt increasing to the mid-20% area on a sustained basis. Although S&P considers it less likely, it could lower the ratings if demand fell significantly or used car prices declined substantially, resulting in a loss upon the sale of vehicles that causes FFO to debt to decline to the mid- teens percentage area on a sustained basis. RATINGS LIST Hertz Corp. Corporate Credit Rating B+/Stable/-- New Ratings Hertz Corp. Senior unsecured $250 mil. notes B Recovery Rating 5 HORNBECK OFFSHORE: Moody's Assigns Ba3 Rating to New Notes Issue ---------------------------------------------------------------- Moody's assigned a Ba3 rating to Hornbeck Offshore Services, Inc.'s proposed notes due 2021. The Ba3 Corporate Family Rating, Ba3 rating on the existing rated notes and the stable outlook remain unchanged. Hornbeck plans to use the proceeds from the offering to fund a tender offer for the $250 million senior notes due 2017, and for general corporate purposes, which may include retirement of other debt, or acquisition or construction of vessels. Upon completion of the tender the ratings on the notes due 2017 will be withdrawn. "The transaction enhances liquidity and adds to Hornbeck's already substantial cash balance, a majority of which will likely be used to pay for additional vessels over the next 12-18 months," commented Arvinder Saluja, Moody's Analyst. "However, credit metrics are stressed and if the expected improvement in financial performance fails to occur as planned in 2013 and 2014, we could move to a negative outlook or lower the rating." Ratings Rationale: The Ba3 CFR reflects Hornbeck's high quality fleet of vessels, good market position, and geographic diversification, which may offset some volatility inherent in the oilfield services industry. Hornbeck is larger than most of its Ba3 peers with over $2.5 billion of fixed assets, however its rating is pressured by its high leverage approaching 6.5x with this transaction. However, activity in the Gulf of Mexico (GOM) is expected to increase above pre-Macondo levels over the next year due to heavy spending by the E&P companies in 2013. The demand for Hornbeck's vessels should remain robust through 2014-15. Moody's expects leverage to improve once the newbuilds under Hornbeck's fifth newbuild program are delivered (beginning in late 2013 through early 2015) and begin to generate revenues for the company. Additionally, Moody's expects that the company will enter into several long-term contracts in 2013 to provide greater certainty on the expected earnings improvement. The proposed notes are rated at Ba3 (LGD4-59%), in line with the CFR, since the size of the senior secured revolver's potential priority claim relative to the senior unsecured notes is not large enough to result in the notes being notched below the CFR given the assumed levels of revolver usage. The stable outlook incorporates Moody's expectation of increasing EBITDA, bringing Debt/EBITDA back toward the 3.5x maximum sustained long-term leverage target by 2014 which Moody's views as appropriate for the Ba3 CFR. An increase in scale with assets approaching $3 billion, a larger worldwide market share, continued geographic diversification, and Debt/EBITDA sustained around 2.0x could result in an upgrade. An increase in leverage, caused by either a severe market contraction or the failure to contract out the new vessels, with Debt/EBITDA sustained above 4.0x could result in a downgrade. The principal methodology used in this rating was the Global Oilfield Services Rating Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Hornbeck Offshore Services, Inc. provides marine transportation services to exploration and production, oilfield service, offshore construction, and U.S. military customers. HORNBECK OFFSHORE: S&P Rates $450MM Senior Unsecured Notes 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned issue-level and recovery ratings to Covington, La.-based Hornbeck Offshore Services Inc.'s $450 million senior unsecured notes due 2021. The assigned issue rating on the notes is 'BB-' (one notch higher than the corporate credit rating). The recovery rating on this debt is '2', indicating S&P's expectation of a substantial (70% to 90%) recovery in the event of default. If the company were to upsize the size of the issue, S&P could lower the recovery rating and issue level rating on the company's senior unsecured notes. The company will use the proceeds to refinance $250 million of existing 8% senior notes due 2017 and for general corporate purposes. The rating on marine service provider Hornbeck Offshore Services Inc. reflects the company's position in the volatile and cyclical marine services industry, as well as healthy market conditions in the Gulf of Mexico. Standard & Poor's rating on Hornbeck also incorporates its adequate liquidity of about $876 million, including $576 million of cash as of Dec. 31, 2012 prior to receiving proceeds from the proposed note offering. RATINGS LIST Hornbeck Offshore Services Inc. Corporate credit rating B+/Stable/-- Ratings Assigned $450 mil sr unsecd notes due 2021 BB- Recovery rating 2 HOSTESS BRANDS: Bakery Union Objects to Job Losses From Strike -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the bakery workers' union, whose strike caused the liquidation of Hostess Brands Inc., complained that none of the purchasers has "committed to preserve a single job." The Debtor announced there were no bids to compete with $27.5 million offer from McKee Foods Corp. for the Drake's business including Coffee Cakes, Devil Dogs, Ring Dings and Yodels. The auction was canceled. A hearing to approve the sale is set for April 9 in White Plains, New York. According to the report, the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union filed a set of papers on March 12 objecting to aspects of sales coming up for approval on March 19. The union said that none of the purchasers has "engaged in any meaningful discussions with representatives of labor." Indeed, the union says the buyers "affirmatively disclaimed any obligation even to 'consider' employing a single worker." The union, the report relates, wants the bankruptcy judge to rule that the sales in no manner insulate the buyers from compliance with labor law. The union doesn't want to be foreclosed from contending that the buyers are successors to Hostess and bound by union agreements or obligations to labor. The union again contends that the sales should be disapproved because the judge didn't compel the buyers to abide by the contracts that the bankruptcy court imposed on union workers. It was the court's imposition of the concessions that prompted the bakery union to strike and force Hostess into liquidation. Hostess also received no bids to compete with the $410 million offer for the snack-cake business made by affiliates of Apollo Global Management LLC and C. Dean Metropoulos & Co. Similarly, there were no bids to compete with the $360 million offer from Flowers Foods Inc. for most of the bread business, including the Wonder brand. There was an auction for the Beefsteak rye bread business where Mexican baker Grupo Bimbo SAB came out on top with an offer of $31.9 million. The sales are up for approval March 19. Joseph Checkler at Daily Bankruptcy Review reports that Hostess Brands is defending the upcoming sales of its various bakery businesses against the objections of its bakers union and others, arguing the deals are its only viable option. Hostess, according to BankruptcyLaw360, said offers made to the International Union of Operating Engineers before the company decided to liquidate its assets were moot because it no longer had employees working for it. 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. INDIA STREET: Case Summary & 3 Unsecured Creditors -------------------------------------------------- Debtor: India Street Ventures, LLC 1337 India Street Units U-100 and U-200 San Diego, CA 92101 Bankruptcy Case No.: 13-02561 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court Southern District of California (San Diego) Judge: Louise DeCarl Adler Debtor's Counsel: David B. Golubchik, Esq. LEVENE, NEALE, BENDER, YOO & BRILL, LLP 10250 Constellation Boulevard, Suite 1700 Los Angeles, CA 90067 Tel: (310) 229-1234 E-mail: dbg@lnbyb.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/casb13-02561.pdf The petition was signed by Damon Barone, managing member of manager. INFOLINK GROUP: Dist. Court Says Plan Order Binding on Prontocom ---------------------------------------------------------------- District Judge Kenneth A. Marra denied Prontocom, Inc.'s bankruptcy appeal challenging the order confirming the Second Amended Chapter 11 Plan of Reorganization for Infolink Global Corporation, Infolink Group, Inc. and Infolink Information Services, Inc. The Plan was proposed by creditor James C. Kurzweg and Infolink Equity Group in Bankruptcy Case No. 10-26423-AJC. On appeal, Prontocom asserted that the bankruptcy court erred by ordering an account held in the name of Prontocom, Inc., to turn over cash and other assets to the reorganized debtor without obtaining personal jurisdiction over Prontocom. In a March 11, 2013 order, the District Court found that a substantive legal relationship existed between Prieur Leary, Infolink's president and Prontocom, and that as Prontocom was adequately represented by Mr. Leary, Prontocom is bound by the bankruptcy court's order. The appeals case is captioned PRIEUR J. LEARY, III and PRONTOCOM, INC., Appellants, v. INFOLINK GLOBAL CORPORATION, Reorganized Debtor Appellee, Case No. 12-21339-CIV-MARRA, Bankruptcy Case No. 10-26423-BKC-AJC (S.D. Fla.). A copy of Judge Lamoutte's March 11, 2013 Opinion and Order is available at http://is.gd/SuPVdMfrom Leagle.com. Infolink Group, Inc., fka Infolink.com, Inc., and Infolink Information Services, Inc., filed chapter 11 petitions (Bankr. D. Del. Case Nos. 10-10981 and 10-10982) on March 24, 2010, and the cases were transferred (Bankr. S.D. Fla. Case Nos. 10-26423 and 10-26436) to Florida on June 2, 2010. Drew M. Dilworth in Miami, Fla., serves as the Chapter 11 Trustee in the Debtors' cases, and is represented by Allison R. Day, Esq. -- aday@gjb-law.com -- and Carlos E. Sardi, Esq. -- csardi@gjb-law.com -- at Genovese Joblove & Battista, P.A., and Geoffrey S. Aaronson, Esq. -- gaaronson@aspalaw.com -- in Miami, Fla. ISOLA USA: S&P Lowers Corp. Credit Rating to 'B-'; Outlook Neg. --------------------------------------------------------------- Standard and Poor's Ratings Services lowered its corporate credit rating on Chandler, Ariz.-based Isola USA Corp. to 'B-' from 'B'. The outlook is negative. At the same time, S&P lowered its rating on the company's $210 million senior secured loans due 2015 to 'B-' from 'B'. The '3' recovery rating indicates S&P's expectation for meaningful recovery (50% to 70%) in the event of payment default. "The downgrade reflects lower-than-expected profits in the quarter ended December 2012 and expectations for a similarly weak first half of 2013," said Standard & Poor's credit analyst Christian Frank. "As a result, we expect leverage to increase to the 10x area (about 7x excluding the company's convertible preferred certificates) over the next two quarters. The negative outlook reflects our view that increased price competition in the market for the company's high-performance products could erode its profitability more than we currently expect," added Mr. Frank. With facilities in Asia, Europe, and the U.S., Isola designs, develops, and manufactures laminates and other printed circuit board (PCB) inputs. Its products are used in application-specific PCBs for a wide variety of electronic products used for servers and storage, networking, automotive, military, and medical applications. * * * Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Moody's Investors Service and Standard & Poor's aren't on the same page when it comes to Isola USA Corp. Saying in February that Isola's "debt load may be unsustainable over the long term," Moody's assigned a Caa2 corporate grade. On March 14, S&P lowered the corporate rating to B-, two levels higher than Moody's. S&P characterized Isola as "highly leveraged" and noted that annual revenue was $556 million, down 7% from a year earlier. Where Moody's said liquidity is "adequate," S&P called it "less than adequate." JDS HOSPITALITY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: JDS Hospitality, LLC 2701 Hazel Street Carthage, MO 64836 Bankruptcy Case No.: 13-30170 Chapter 11 Petition Date: March 13, 2013 Court: United States Bankruptcy Court Western District of Missouri (Joplin) Judge: Cynthia A. Norton Debtor's Counsel: Mariann Morgan, Esq. CHECKETT & PAULY 517 S. Main St. Carthage, MO 64836 Tel: (417) 358-4049 Fax: (417) 358-6341 E-mail: maw@cp-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/mowb13-30170.pdf The petition was signed by Daljeet Mann, manager. JEAD AUTO: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: JEAD Auto Supply Inc. 1810 East Tremont Avenue Bronx, NY 10456 Bankruptcy Case No.: 13-10773 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Morse Geller, Esq. MORSE GELLER & ASSOC. 277 Sycamore Street West Hempstead, NY 11552 Tel: (516) 564-6734 Fax: (516) 564-6734 E-mail: mgadv1@aol.com Scheduled Assets: $6,082,390 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by David Barbag, president. JILL HOLDINGS: S&P Revises Outlook to Positive & Affirms 'B-' CCR ----------------------------------------------------------------- Standard & Poor's Ratings Services revised the rating outlook on Jill Holdings LLC to positive from negative. At the same time, S&P affirmed all its ratings, including its 'B-' corporate credit rating, on the Quincy, Mass.-based women's specialty apparel retailer. "The outlook revision reflects our expectation that Jill will maintain its recent good operating performance over the next 12 months, leading to improved credit protection measures and an enhanced liquidity position," said Standard & Poor's credit analyst Kristina Koltunicki. In September 2012, Jill ended its forbearance agreement by paying down $25 million of its term loan B and entered into a new $30 million subordinated debt issue, which S&P do not rate. This transaction provided additional liquidity to the company by alleviating immediate covenant pressures. The ratings on Jill reflect its "vulnerable" business risk profile and "highly leveraged" financial risk profile. The company's vulnerable business risk profile incorporates its participation in the highly fragmented specialty apparel sector with intense competition from a number of different retailers, including department stores, other specialty retailers, and mass merchandisers. Jill is a smaller participant than many of its direct competitors, in both store count and sales, which, in S&P's opinion, limits its ability to reach and retain customers more competitively. The company outperformed S&P's expectations in 2012, given its better merchandise offerings which led to an increase of full- price selling over the year. In S&P's view, the company's reduction of promotional activities will continue to benefit margins. Even though the company has taken steps to remedy issues that triggered weak performance in 2011, S&P remains cognizant that operating volatility may resurface, given the discretionary and fashion-sensitive nature of the business. The positive outlook reflects S&P's expectation that credit protection measures will improve over the next 12 months as the company continues to propel sales with a better merchandise assortment. In S&P's view, the company will manage its cost structure well over the next year which should benefit margins. S&P also anticipates that Jill will have no issues complying with its covenants over the next year. S&P could raise the rating if the company continues to demonstrate positive operating trends such that adjusted debt to EBITDA declines below 5x and interest coverage increases to about 2x on a sustained basis. An upgrade would occur at the end of fiscal 2013 at the earliest. For this to occur, EBITDA would need to increase by approximately 5% and exhibit relatively limited volatility over the next 12 months. Alternatively, S&P could revise its outlook to stable or lower its rating if weaker-than-expected performance results in EBITDA declines of approximately 20%, which would lead to an increase of leverage to the high-5x area. S&P could also lower the rating if the company's liquidity position becomes pressured. For this to occur, there would be EBITDA deterioration such that financial covenant cushion falls to less than 15%. K-V PHARMACEUTICAL: Renews Fight with FDA Over Drug --------------------------------------------------- Patrick Fitzgerald at Daily Bankruptcy Review reports that K-V Pharmaceutical Co. is asking an appellate court to revive its lawsuit against the Food and Drug Administration over the agency's decision to let so-called compounding pharmacies produce far- cheaper versions of the company's premature-birth drug. About K-V Pharmaceutical K-V Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4, 2012, filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V employed Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V tapped Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five members to serve in the Official Committee of Unsecured Creditors. Kristopher M. Hansen, Esq., Erez E. Gilad, Esq., and Matthew G. Garofalo, Esq., at Stroock & Stroock & Lavan LLP, represent the Creditors Committee. Weil, Gotshal & Manges LLP's Robert J. Lemons, Esq., and Lori R. Fife, Esq., represent an Ad Hoc Senior Noteholders Group. The Plan provides that in full satisfaction, settlement, release. KEVEN McKENNA: $2,000 Judgment for Ex-Paralegal Affirmed -------------------------------------------------------- SUMNER STONE, Appellant, v. LISA GEREMIA, CHAPTER 7 TRUSTEE FOR KEVEN A. McKENNA and THOMAS P. QUINN, CHAPTER 7 TRUSTEE FOR KEVEN A. McKENNA P.C., Appellees, C.A. No. 11-631 (D. R.I.), is a pro se appeal seeking review of a final decision entered by the U.S. Bankruptcy Court for the District of Rhode Island. In 2010, Sumner Stone was working as a paralegal for Attorney Keven A. McKenna and his law firm McKenna P.C. On Stone's final day on the job, he claims he was assaulted by McKenna. Stone filed a workers' compensation claim, and the Workers' Compensation Court determined that he was entitled to benefits. McKenna responded by filing multiple pleadings in the WCC and various lawsuits in state courts to contest that determination. Eventually, both McKenna and the law firm filed for Chapter 11 bankruptcy and Stone filed his claims in those consolidated actions. Stone's claims against the firm totaled $677,263; and his claims against McKenna individually totaled $642,450. Ultimately, trustees were appointed in both bankruptcy cases and the cases were consolidated. The cases were also converted to Chapter 7 bankruptcies, as a result of McKenna's failure to meet the requirements of 11 U.S.C. Sections 1121(e) and 1129(e). The trustee for the law firm reached a settlement with Stone on the workers' compensation award, pursuant to which Stone received weekly benefits, totaling $33,173.99, for a two-year period. Stone also claimed that the firm had failed to pay him earned wages in the amount of $2,985. Judge Arthur Votolato of the Bankruptcy Court heard the trustees' objections to Stone's claims and, in a Decision and Order entered Dec. 2, 2011, decided in favor of the firm on all but one issue. Judge Votolato granted Stone's claim for unpaid wages in the amount of $2,000. As to the remaining issues, Judge Votolato disallowed Stone's claims, citing Stone's lack of evidentiary support for each allegation. The Bankruptcy Court ruling was reported in the Dec. 7, 2011 edition of the Troubled Company Reporter. Stone appeals that judgment. In a March 13, 2013 Memorandum and Order available at http://is.gd/zP23C2from Leagle.com, Senior District Judge Ronald R. Lagueux affirmed the decision and findings of Judge Votolato. "This Court concludes the Bankruptcy Judge made no clearly erroneous findings of fact nor error of law. Judgment shall enter for Stone for $2,000.00 in unpaid wages against Defendants. Judgment shall enter for Defendants on all of Stone's remaining claims," said the District Court. About Keven A. McKenna Keven A. McKenna P.C. filed a Chapter 11 bankruptcy petition for his law firm (Bankr. D. R.I. Case No. 10-10256) on Jan. 25, 2010, and for himself (Bankr. D. R.I. Case No. 10-10274) the next day. Mr. McKenna disclosed $751,000 in assets and $45,700 in liabilities in his bankruptcy petition. His firm estimated debts between $100,000 and $500,000. At the behest of the Official Committee of Unsecured Creditors, the Bankruptcy Court on Nov. 18, 2010, appointed Providence bankruptcy lawyer Thomas P. Quinn as Chapter 11 trustee of McKenna PC to take over management of the law firm. Chief District Judge Mary M. Lisi affirmed the Chapter 11 trustee appointment order in a May 31, 2011 Memorandum and Order. On May 4, 2011, the U.S. Trustee's Motion to Convert the individual case to Chapter 7 was granted, for cause, on the ground that Mr. McKenna failed to meet the requirements of 11 U.S.C. Sections 1121(e) and 1129(e), i.e., filing a confirmable reorganization plan within the applicable time limits. Lisa A. Geremia, Esq., was appointed Chapter 7 Trustee. The Chapter 11 trustee is represented by: Thomas P. Quinn, Esq. Stefanie D. Howell, Esq. McLAUGHLIN & QUINN, LLC 148 West River Street, Suite 1E Providence, RI 02904 Tel: 401-421-5115 E-mail: tquinn@mclaughlinquinn.com showell@mclaughlinquinn.com LEGENDS GAMING: Wants to Take Chickasaw Tribe's $6.25 Million ------------------------------------------------------------- Stephanie Gleason at DBR Small Cap reports that the owner of Diamond Jacks casinos responded to a lawsuit filed by its one-time purchaser, a Chickasaw Nation-backed company, saying that their sale agreement wasn't conditioned on the financial performance of the casinos and that it is entitled to the $6.25 million being held in escrow. About Legends Gaming Legends Gaming LLC, owns gaming facilities located in Bossier City, Louisiana, and Vicksburg, Mississippi, operating under the DiamondJack's trade name. Legends Gaming LLC, and five related entities, including Louisiana Riverboat Gaming Partnership, filed Chapter 11 petitions (Bankr. W.D. La. Case No. 12-12013) in Shreveport, Indiana, on July 31, 2012, to sell the business for $125 million to Global Gaming Solutions LLC, absent higher and better offers. Legends Gaming acquired the business from Isle of Capri Casinos Inc., in 2006 for $240 million. After breaching covenant with lenders, the Debtors in March 2008 sought Chapter 11 protection, jointly administered under Louisiana Gaming Partnership (Case No. 08-10824). The Debtors emerged from bankruptcy in September 2009 and retained ownership and operation of two "DiamondJacks" hotels and casinos in Bossier City and Vicksburg. The Plan restructured $162.1 million owed to the first lien lenders and $75 million owed to secured lien lenders, which would be paid in full, with interest, over time. The Debtors' properties comprise 60,000 square feet of gaming space with 1,913 slot machines, 48 table games and 693 hotel rooms. Revenues in fiscal 2011 were $99.8 million in Louisiana and $39.7 million in Mississippi. As of July 31, 2012, first lien lenders are owed $181.2 million and second lien lenders are owed $114.7 million. Louisiana Riverboat Gaming Partnership disclosed $104,846,159 in assets and $298,298,911 in liabilities as of the Chapter 11 filing. Attorneys at Heller, Draper, Hayden Patrick & Horn serve as counsel to the Debtors. Sea Port Group Securities, LLC is the financial advisor. Kurtzman Carson Consultants LLC as is the claims and notice agent. The Debtors have tapped Jenner & Block LLP as special counsel. LEROY BYRD: Abandons Stake in Idaho Property Under Confirmed Plan ----------------------------------------------------------------- Bankruptcy Judge Frank L. Kurtz confirmed the First Amended Plan of Reorganization, filed on Nov. 2, 2012, by Chapter 11 debtors LeRoy J. and Irene Ann Byrd. The Plan has been accepted in writing by the creditors and equity security holders whose acceptance is required by law. Pursuant to the Plan, as amended, the Debtors will surrender and abandon their interest in real property commonly known as 6300 E. Seltice Way, Post Falls, Idaho, which secures the claim of Global Credit Union, to Global in full satisfaction of the secured portion of Global's claim. To the extent Global's post- confirmation execution of its rights against the Collateral does not fully satisfy Global's claim resulting in Global having an unsecured deficiency under applicable law, Global will be allowed to amend its proof of claim filed July 12, 2012, post- confirmation, to include the amount of the unsecured deficiency, and Global will be treated as the holder of an unsecured claim under Class 22 (Unsecured Creditors) and its allowed unsecured claim against the Debtors only will be paid as the holder of a Class 22 claim. The Plan also provides that, within 180 days of the Effective Date, the Debtors will have the right to elect to retain their interests or either interest they have in Trendwest and/or Vacation International, their interest in Logan Square, LLC, Hi- Tech Property, 140 shares of Flathead Holding Co., any Miscellaneous Stocks, Interests, and Partial Entity Interests, and/or any specific piece of Equipment listed on the schedule of equipment. The Debtors will have a non-exclusive right to submit an offer(s) to purchase from the Chapter 11 Bankruptcy Estate any of the Trendwest and/or Vacation International, their interest in Logan Square, LLC, Hi-Tech Property, 140 shares of Flathead Holding Co., any Miscellaneous Stocks, Interests, and Partial Entity Interests, and/or any specific piece of Equipment listed on the schedule of equipment. The Debtors' interest in the 140 shares of Flathead Holding, Co. stock and their interest in the Jewell Basin Real Estate will be sold the same as the other property to be sold under the Plan, and the Net Proceeds of Sale will be disbursed, to the extent sufficient, as follows: first, the Allowed Claims of Class 1 (Administrative) pro rata until paid in full; second, the Allowed Claim of Class 3 (IRS), to the extent tax liability is created by the sale; third, the Allowed Claims of Class 2 (Wages) pro rata until paid in full; fourth, the Allowed Claim of Class 3 (IRS) until paid in full; and fifth, the Allowed Claims of any Class 22 (Unsecured Creditors), pro rata; The objection by Banner Bank to confirmation of the Debtors' Plan and claim of homestead exemption in the Debtors' Home are withdrawn by Banner Bank in their entirety, and the Debtors' claim of exemption in the Debtors' Home is allowed in the full amount claimed as exempt. The objection by Global Credit Union to confirmation of the Plan is withdrawn by Global Credit Union in its entirety. A copy of the Court's March 14, 2013 Findings of Fact is available at http://is.gd/dyWlRXfrom Leagle.com. LeRoy J. and Irene Ann Byrd -- d/b/a Byrd Family Limited Partnership; d/b/a Logan Square, LLC; d/b/a Geiger & Electric 90, Partnership; d/b/a Hi-Tech Post Falls, LLC; d/b/a Rowan Medical & Diagnostics, sole proprietorship; d/b/a Rowan Research, Inc., d/b/a KBFB, LLC; and d/b/a KBF, LLC -- filed a joint Chapter 11 bankruptcy petition (Bankr. E.D. Wash. Case No. 12-02173) on May 10, 2012. LIFECARE HOLDINGS: IRS Wants Cash for Tax Claim After Auction ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that when hospital owner LifeCare Holdings Inc. sells the business at auction on March 20, the Internal Revenue Service wants some of the cash being carved out to pay professional expenses and wind-down costs. The report relates that according to papers filed by the Justice Department, cash being set aside for lawyers and other expenses is more than $3 million. The sale price exceeds the tax basis in the property, generating a tax liability of $24 million, according to the government's filing. There won't be any cash to pay the taxes, which will represent an expense of the Chapter 11 case that should be paid in full. LifeCare already said the Chapter 11 case will "most likely" be converted to a liquidation in Chapter 7 following its sale. The government insists on having a pro-rata share of the cash and conversion of the Chapter 11 case to liquidation in Chapter 7. The hospital operator couldn't find a buyer offering enough to pay off the $353.4 million owing on the secured credit facility with JPMorgan Chase Bank NA as agent. Consequently, senior lenders signed an agreement to buy the operation in exchange for $320 million in secured debt, plus cash for pay professional expenses and wind-down costs after the sale. Competing bids were due March 13. If there is no competition, the hearing to approve the sale will take place March 21. If there is a competing bid, the auction will occur March 20, followed by a sale-approval hearing on April 2. About LifeCare Hospitals LCI Holding Company, Inc., and its affiliates, doing business as LifeCare Hospitals, operate eight "hospital within hospital" facilities and 19 freestanding facilities in 10 states. The hospitals have about 1,400 beds at facilities in Louisiana, Texas, Pennsylvania, Ohio and Nevada. LifeCare is controlled by Carlyle Group, which holds 93.4% of the stock following a $570 million acquisition in August 2005. LCI Holding Company, Inc., and its affiliates, including LifeCare Holdings Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13319) on Dec. 11, 2012, with plans to sell assets to secured lenders. Ken Ziman, Esq., and Felicia Perlman, Esq., at Skadden, Arps, Slate Meagher & Flom LLP, serve as counsel to the Debtors. Rothschild Inc. is the financial advisor. Huron Management Services LLC will provide the Debtors an interim chief financial officer and certain additional personnel; and (ii) designate Stuart Walker as interim chief financial officer. The steering committee of lenders is represented by attorneys at Akin Gump Strauss Hauer & Feld LLP and Blank Rome LLP. The agent under the prepetition and postpetition secured credit facility is represented by Simpson Thacher & Barlett LLP. The Debtors disclosed assets of $422 million and liabilities totaling $575.9 million as of Sept. 30, 2012. As of the bankruptcy filing, total long-term obligations were $482.2 million consisting of, among other things, institutional loans and unsecured subordinated loans. A total of $353.4 million is owing under the prepetition secured credit facility. A total of $128.4 million is owing on senior subordinated notes. LifeCare Hospitals of Pittsburgh, LLC, a debtor-affiliate disclosed $24,028,730 in assets and $484,372,539 in liabilities as of the Chapter 11 filing. The Official Committee of Unsecured Creditors is represented by Pachulski Stang Ziehl & Jones LLP. FTI Consulting, Inc., serves as its financial advisor. LOMBARDI AND LOMBARDI: Voluntary Chapter 11 Case Summary -------------------------------------------------------- Debtor: Lombardi and Lombardi Inc. 256 4th Avenue Brooklyn, NY 11215 Bankruptcy Case No.: 13-41421 Chapter 11 Petition Date: March 13, 2013 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Nancy Hershey Lord Debtor's Counsel: Bruce Weiner, Esq. ROSENBERG MUSSO & WEINER LLP 26 Court Street, Suite 2211 Brooklyn, NY 11242 Tel: (718) 855-6840 Fax: (718) 625-1966 E-mail: rmwlaw@att.net Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $500,001 to $1,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Anthony Lombardi, president. LON MORRIS: Cleans Up Mistakes, Sells Mineral Rights ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the endgame for Lon Morris College demonstrates how bankruptcy liquidations are an exercise in tying up loose ends and fixing mistakes. The bank lender, owed $2.8 million, thought it had a lien on the entire athletic building. Before the campus in Jacksonville, Texas, was sold at auction in January, it turned out that the legal description of the property on the bank's mortgage covered only two-thirds of the athletic building. Not able to afford litigating with the bank over proceeds from sale, the administrator under the college's Chapter 11 plan worked out a settlement generating $125,000 for creditors. The bank's collateral included mineral right under lands in Texas, Louisiana and New Mexico. The mineral rights will be sold for $1 million, with the bank receiving $875,000, plus ownership of the entire athletic building. There won't be a hearing on the settlement and mineral-rights sale unless a creditor objects. About Lon Morris College Lon Morris College was founded in 1854 as a not-for-profit religiously affiliated two-year degree granting institution. Over the past 158 years, the College has impacted the lives of countless members of the local Jacksonville community in Texas. Lon Morris College filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 12-60557) in Tyler, on July 2, 2012, after lacking enough endowments to pay teachers, vendors and creditors. In May 2012, the Debtor missed two payrolls and vendor payables, utilities, and long term debt were also past due. From a headcount of 1,070 in 2010, enrolments have been down to 547 in 2012. The president of the College has resigned, as have members of the board of trustees. Judge Bill Parker oversees the case. Bridgepoint Consulting LLC's Dawn Ragan took over management of the College as chief restructuring officer. Attorneys at Webb and Associates, and McKool Smith P.C., serve as counsel to the Debtor. Capstone Partners serves as financial advisor. According to its books, on April 30, 2012, the College had roughly $35 million in assets, including $11 million in endowments and restricted funds, and $18 million in funded debt and $2 million in trade and other liabilities. The Debtor disclosed $29,957,488 in assets and $15,999,058 in liabilities as of the Chapter 11 filing. Amegy Bank is represented in the case by James Matthew Vaughn, Esq., at Porter Hedges LLP. The college has a Chapter 11 plan on file to be funded by a sale of the properties. The bankruptcy judge entered an order confirming the Plan in February 2013 and simultaneously approved the sale of the assets to several buyers for a combined $2.2 million. LUCILLE INC: Case Summary & 3 Unsecured Creditors ------------------------------------------------- Debtor: Lucille, Inc. P.O. Box 76895 Tampa, FL 33675 Bankruptcy Case No.: 13-03254 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court Middle District of Florida (Tampa) Debtor's Counsel: David W. Steen, Esq. DAVID W. STEEN, P.A. 13902 North Dale Mabry Highway, Suite 110 Tampa, FL 33618 Tel: (813) 251-3000 Fax: (813) 251-3100 E-mail: dwsteen@dsteenpa.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $50,001 to $100,000 A copy of the Company's list of its three largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/flmb13-03254.pdf The petition was signed by Linda Wilcox, president. Affiliate that filed separate Chapter 11 petition: Entity Case No. Petition Date ------ -------- ------------- Linda A. Wilcox 12-00888 01/24/12 MERRILL CORP: S&P Raises CCR to 'B-' & Rates $30MM Facility 'B+' ---------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on U.S.-based document services company Merrill Corp. to 'B-' from 'D'. The outlook is stable. At the same time, S&P assigned the company's $30 million revolving credit facility due 2018 a 'B+' issue-level rating with a recovery rating of '1', indicating S&P's expectation for very high (90%-100%) recovery for lenders in the event of a payment default. In addition, S&P assigned the company's $430 million first-lien term loan due 2018 a 'B' issue-level rating with a recovery rating of '2' (70%-90% recovery expectation). The company also issued $186.5 million unsecured pay-in-kind (PIK) holding company notes due 2023, which are unrated. The refinancing addressed the maturity default on the company's previous term loan that expired in December 2012 and the subsequent cross default on the second-lien term loan due November 2013. As a result of the refinancing, the company does not have any significant maturities until 2018, when the first-lien facilities are due. S&P continues to view Merrill Corp.'s financial risk profile as "highly leveraged" because of its high debt leverage and historically narrow cushion of covenant compliance. Merrill Corp.'s business risk profile, in S&P's opinion, is "vulnerable" because of historical volatility in operating performance given the company's reliance on the financial services industry, and intense competition in niche segments of the printing and document services industry. S&P views the company's management and governance as "weak" primarily because of protracted execution delays in refinancing that lead to the recent technical default on its December obligations. Merrill is structured as two distinct operating units: legal and financial transaction services (LFTS) and marketing and communication solutions (MCS). The MCS segment provides compliance and marketing services primarily for insurance companies and mutual funds. Although services to businesses dominate revenues, Merrill is still exposed to declining trends in print volumes with keen competition for printing. The company's results also mirror volatile conditions in financial services and the legal field. For the fiscal year ended Jan. 31, 2013, S&P believes the company continued to benefit from growth at DataSite and in the transaction and compliance services segment. Merrill should also benefit from the California election services business during the election year. Still, S&P expects negative secular trends in print volumes should persist for the foreseeable future, though it currently accounts for less than 15% of revenues. In fiscal-year 2013, S&P expects revenue growth to be at a mid- to high-single- digit percent rate and expect the company to sustain EBITDA margin over the next 12 months partially from growth at the higher margin DataSite business. In fiscal-year 2014, S&P expects revenue and EBITDA to be relatively flat. In the most recent quarter, operating performance was broadly in line with S&P's expectations as revenue increased 17%, while EBITDA jumped roughly 60% due to cost reductions and improved revenue at all of the company's segments, most notably at DataSite and transaction and compliance services. The EBITDA margin was roughly 14% over the last 12 months. Capital spending and working capital needs are manageable. S&P expects Merrill Corp. will convert about 30% to 40% of EBITDA into discretionary cash flow in fiscal 2013 and 2014 as a result of a decrease in cash interest payments due to the new PIK holding company notes. At transaction close, the leverage covenant was set with a cushion of 25%. MF GLOBAL: To Circulate Supplemental Disclosure Materials --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors of MF Global Holdings Ltd. will be receiving supplemental disclosure materials telling them how much their recovery under the Chapter 11 plan will be affected by a settlement with JPMorgan Chase Bank NA, as agent for banks owed about $1.17 billion. Then report recounts that MF Global Holding and its commodity brokerage went into bankruptcy in 2011, when a $1.6 billion shortfall was discovered in money that should have been segregated for customers. Several creditors and Louis Freeh, the holding company's Chapter 11 trustee, proposed a plan to which JPMorgan was partly opposed. The disclosure statement previously approved by the bankruptcy judge told creditors with $1.13 billion in unsecured claims against the parent why they could expect a recovery of 13.4% to 39.1%. As a consequence of a settlement with JPMorgan, the supplemental materials tell unsecured creditors their recovery is now 11.4% to 34.4%. Bank lenders will have the same recovery on their $1.17 billion claim against the holding company. Because of the settlement, the predicted recovery is now 18% to 41.5% for holders of $1.19 billion in unsecured claims against the finance subsidiary, one of the companies under the umbrella of the holding company trustee. Previously, the predicted recovery was 14.7% to 34% on bank lenders' claims against the finance subsidiary. JPMorgan benefits from the settlement because most of the claims against the finance subsidiary are on account of money owed to the lenders for which the bank is agent. The bankruptcy judge left the holding company on track for a confirmation hearing on April 5 to approve the plan. Objections to the plan are due March 25. About MF Global New York-based MF Global -- http://www.mfglobal.com/-- was one of the world's leading brokers of commodities and listed derivatives. MF Global provides access to more than 70 exchanges around the world. The firm also was one of 22 primary dealers authorized to trade U.S. government securities with the Federal Reserve Bank of New York. MF Global's roots go back nearly 230 years to a sugar brokerage on the banks of the Thames River in London. 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. 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. Louis J. Freeh was named the Chapter 11 Trustee for the bankruptcy cases of MF Global Holdings Ltd. and its affiliates. The Chapter 11 Trustee tapped (i) Freeh Sporkin & Sullivan LLP, as investigative counsel; (ii) FTI Consulting Inc., as restructuring advisors; (iii) Morrison & Foerster LLP, as bankruptcy counsel; and (iv) Pepper Hamilton as special counsel. An Official Committee of Unsecured Creditors has been appointed in the case. The Committee has retained Capstone Advisory Group LLC as financial advisor. 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. NATIONAL CENTURY: Credit Suisse to Pay $400M to End Fraud Suits --------------------------------------------------------------- Daniel Wilson of BankruptcyLaw360 reported that Credit Suisse Group AG on Thursday agreed to pay $400 million to settle multidistrict and other litigation brought by National Century Financial Enterprises Inc. bondholders, ending claims over its alleged role in the bankrupt health care finance company's $3 billion fraud scheme. According to the bank, the deal ends all noteholder claims against it in New York, Ohio and any other courts for allegedly turning a blind eye to NCFE's Ponzi scheme while serving as a lender and underwriter to the company, the BLaw360 report said. About National Century Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- was the largest issuer of medical accounts receivable asset backed securities in the United States before it collapsed in bankruptcy in November 2002 amid allegations of widespread fraud and misappropriation of assets. To date, 10 senior executives of the company have been convicted or pled guilty to federal charges of conspiracy, securities fraud, wire fraud, and money laundering arising out of the NCFE securitization program. NCFE -- through the CSFB Claims Trust, the Litigation Trust, the VI/XII Collateral Trust, and the Unencumbered Assets Trust -- is in the midst of liquidating estate assets. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. S.D. Ohio Case No. 02-65235). The Court confirmed the Debtors' Fourth Amended Plan of Liquidation on April 16, 2004. Paul E. Harner, Esq., at Jones Day, represented the Debtors. NATURAL PORK: Taps Bose McKinney as Indiana Real Estate Counsel --------------------------------------------------------------- Natural Pork Production II, LLP, has sought authorization from the U.S. Bankruptcy Court for the Southern District of Iowa to employ Bose, McKinney & Evans, LLP, as special Indiana real estate and environmental counsel. The Firm will advise, counsel and represent the Debtor regarding matters of the Indiana real estate and environmental law in connection with the Debtor's plans to sell, liquidate and otherwise dispose of certain of its real estate and other assets located in the State of Indiana. The Firm will be paid at these hourly rates: Gary L. Chapman $450 Daniel P. McInerny $405 Michael A. Lang $225 The Firm has received a $5,000 retainer and requests that the Court authorize the Debtor to provide the Firm with an additional $5,000 to bring the total amount of the postpetition retainer to $10,000 in order to guarantee payment of its postpetition services and costs in connection with this Chapter 11 case. To the best of the Debtor's knowledge, the Firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Natural Pork Hog raiser Natural Pork Production II, LLP, filed for Chapter 11 bankruptcy (Bankr. S.D. Iowa Case No. 12-02872) on Sept. 11, 2012, in Des Moines. The Company formerly did business as Natural Pork Production, LLC. It does business as Crawfordsville, LLC, Brayton, LLC, South Harlan, LLC, and North Harlan, LLC. The Debtor disclosed $31.9 million in asset and $27.9 million in liabilities, including $7.49 million of secured debt in its schedules. Bankruptcy Judge Anita L. Shodeen oversees the case. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., in Des Moines, Iowa, represent the Debtor as general reorganization counsel. John C. Pietila, Esq., at Davis, Brown, Koehn, Shors & Roberts, P.C., in West Des Moines, Iowa, represents the Debtor as special corporate counsel, effective as of the Petition Date. Aaron L Hammer, Esq., Mark S. Melickian, Esq., and Michael A. Brandess, Esq., at Sugar, Felsenthal Grais & Hammer LLP, in Chicago, represent the Official Committee of Unsecured Creditors. Conway MacKenzie, Inc., serves as its financial advisor. Gary W. Koch, Esq., and Michael S. Dove, Esq., represent AgStar Financial Services, ACA, and AgStar Financial Services, FLCA, as counsel. Michael P. Mallaney, Esq., at Hudson Mallaney Schindler & Anderson, in West Des Moines, Iowa, represent the IC Committee as counsel. NATURAL PORK: Has Court Okay to Hire Frost PLLC as Tax Accountants ------------------------------------------------------------------ Natural Pork Production II, LLP, has obtained authorization from the U.S. Bankruptcy Court for the Southern District of Iowa to employ Daniel M. Peregrin, CPA, and Frost, PLLC, as its tax accountants. As reported by the Troubled Company Reporter on Feb. 11, 2013, the Debtor requires the services of Frost to render professional services to assist the Debtor with its corporate tax analysis, tax accounting and tax reporting obligations, including consultation and advice on past and future partnership tax returns, tax-related issues arising from or in connection with transactions and the pending adversary proceedings, and assistance with providing adequate information in any disclosure statement regarding Federal Tax consequences of any plan, as required under Section 1125(a)(1) of the Bankruptcy Code. About Natural Pork Production II Hog raiser Natural Pork Production II, LLP, filed for Chapter 11 bankruptcy (Bankr. S.D. Iowa Case No. 12-02872) on Sept. 11, 2012, in Des Moines. The Company formerly did business as Natural Pork Production, LLC. It does business as Crawfordsville, LLC, Brayton, LLC, South Harlan, LLC, and North Harlan, LLC. The Debtor disclosed $31.9 million in asset and $27.9 million in liabilities, including $7.49 million of secured debt in its schedules. Bankruptcy Judge Anita L. Shodeen oversees the case. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., in Des Moines, Iowa, represent the Debtor as general reorganization counsel. John C. Pietila, Esq., at Davis, Brown, Koehn, Shors & Roberts, P.C., in West Des Moines, Iowa, represents the Debtor as special corporate counsel, effective as of the Petition Date. Aaron L Hammer, Esq., Mark S. Melickian, Esq., and Michael A. Brandess, Esq., at Sugar, Felsenthal Grais & Hammer LLP, in Chicago, represent the Official Committee of Unsecured Creditors. Conway MacKenzie, Inc., serves as its financial advisor. Gary W. Koch, Esq., and Michael S. Dove, Esq., represent AgStar Financial Services, ACA, and AgStar Financial Services, FLCA, as counsel. Michael P. Mallaney, Esq., at Hudson Mallaney Schindler & Anderson, in West Des Moines, Iowa, represent the IC Committee as counsel. NATURAL PORK: Court Okays Variant Capital as Investment Banker -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Iowa has granted Natural Pork Production II, LLP, permission to employ Variant Capital Advisors LLC as its investment banker in its Chapter 11 case and in the Chapter 11 cases of its affiliated debtors Brayton LLC, Crawfordsville, LLC, and South Harlan, LLC. As reported by the TCR on Feb. 7, 2013, Variant Capital will assist the Debtors with strategic advisory services in connection with the auction and sale of several of their operating assets. About Natural Pork Production II Hog raiser Natural Pork Production II, LLP, filed for Chapter 11 bankruptcy (Bankr. S.D. Iowa Case No. 12-02872) on Sept. 11, 2012, in Des Moines. The Company formerly did business as Natural Pork Production, LLC. It does business as Crawfordsville, LLC, Brayton, LLC, South Harlan, LLC, and North Harlan, LLC. The Debtor disclosed $31.9 million in asset and $27.9 million in liabilities, including $7.49 million of secured debt in its schedules. Bankruptcy Judge Anita L. Shodeen oversees the case. Donald F. Neiman, Esq., and Jeffrey D. Goetz, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., in Des Moines, Iowa, represent the Debtor as general reorganization counsel. John C. Pietila, Esq., at Davis, Brown, Koehn, Shors & Roberts, P.C., in West Des Moines, Iowa, represents the Debtor as special corporate counsel, effective as of the Petition Date. Aaron L Hammer, Esq., Mark S. Melickian, Esq., and Michael A. Brandess, Esq., at Sugar, Felsenthal Grais & Hammer LLP, in Chicago, represent the Official Committee of Unsecured Creditors. Conway MacKenzie, Inc., serves as its financial advisor. Gary W. Koch, Esq., and Michael S. Dove, Esq., represent AgStar Financial Services, ACA, and AgStar Financial Services, FLCA, as counsel. Michael P. Mallaney, Esq., at Hudson Mallaney Schindler & Anderson, in West Des Moines, Iowa, represent the IC Committee as counsel. OASIS OIL: Case Summary & Top Unsecured Creditors ------------------------------------------------- Debtor: Oasis Oil, LLC 23400 Michigan Avenue, Suite 301 Dearborn, MI 48124 Bankruptcy Case No.: 13-45008 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court Eastern District of Michigan (Detroit) Judge: Marci B. McIvor Debtors' Counsel: John C. Lange, Esq. GOLD, LANGE & MAJOROS, P.C. 24901 Northwestern Highway, Suite 444 Southfield, MI 48075 Tel: (248) 350-8220 E-mail: jlange@glmpc.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $0 to $50,000 Affiliate that simultaneously filed for Chapter 11: Debtor Case No. ------ -------- 4407 Fort Operations, LLC 13-45009 Assets: $0 to $50,000 Debts: $0 to $50,000 The petitions were signed by Michael Hamame, managing member. A. A copy of Oasis Oil's list of five unsecured creditors is available for free at: http://bankrupt.com/misc/mieb13-45008.pdf B. A copy of 4407 Fort Operations' list of its five unsecured creditors is available for free at: http://bankrupt.com/misc/mieb13-45009.pdf OMTRON USA: Can Hire BrightFields as Environmental Consultant ------------------------------------------------------------- Omtron USA, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the Middle District of North Carolina to employ BrightFields, Inc., as environmental consultant. BrightFields will perform seven Phase I Environmental Site Assessment updates and one Phase I ESA for the Vehicle Maintenance Facility in order to assist the Debtor and its investment banker, Duff & Phelps Securities, LLC, in the sale of its core assets. BrightFields will receive a flat fee of $25,500 to complete the ESAs. This flat fee includes the cost of the Phase I updates on seven of the properties, a Phase I of one property and anticipated travel costs to conduct the ESAs of $2,100. To the best of the Debtor's knowledge, BrightFields is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Omtron USA Omtron USA bought poultry producer Townsends Inc. out of bankruptcy in 2011, shut down operations in later that year, and filed its own Chapter 11 petition (Bankr. D. Del. Case No. 12- 13076) on Nov. 9, 2012, in Delaware. On Dec. 21, 2012, the Delaware Court entered its order granting the transfer of the Debtor's case to U.S. Bankruptcy Court for the Middle District of North Carolina, under Case No. 12-81931. John H. Strock, III, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, serves as counsel to the Debtor. Duff & Phelps Securities LLC serves as investment banker. The Debtor listed $40,633,406 in assets and $4,518,756 and liabilities. Omtron paid $24.9 million in February 2011 for the North Carolina operations belonging to Townsends Inc. The three-member Official Committee of Unsecured Creditors tapped to retain Lowenstein Sandler LLP and Womble Carlyle Sandridge & Rice, LLP, as its counsel and CohnReznick, LLP, as its financial advisor. OMTRON USA: Court Extends Plan Filing Period Until June 10 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of North Carolina has extended, at the behest of Omtron USA, LLC, the period during which the Debtor has the exclusive right to file a Chapter 11 plan until June 10, 2013, and the period during which the Debtor has the exclusive right to solicit acceptances of that plan until Aug. 6, 2013. Since the Petition Date, the Debtor has been embroiled in litigation concerning the transfer of the case to the Court from Delaware. The Debtor said that it has also spent a significant amount of time in this case attempting to resolve numerous issues with respect to the employment of various professionals and service providers in this case. The Court approval of professionals and service providers was not resolved until the end of January. The Debtor has also engaged in preliminary negotiations with the attorneys for the majority of poultry litigants to come to a consensual process for the resolution of more than 130 poultry farmer claims. The Debtor said that Duff & Phelps, its investment bankers, are in the process of marketing and selling substantially all of the assets of the Debtor as a "going concern" and that process is well underway. "It is anticipated that there will be a motion filed with this Court to approve procedures relating to bidding and the process for the sale and auction of the assets no later than Aug. 1, 2013," the Debtor stated. According to the Debtor, the requested relief will extend the Exclusive Periods to allow for the finalization of the sale process, including the review of various bids that are received, negotiations of an asset purchase agreement and the auction of the assets and approval of the successful bidder as the purchaser of the assets. The Debtor said that the protection of the Exclusive Periods will allow the Debtor to focus on maximizing recoveries for creditors and negotiating a proper wind down of the estate, without the distraction of any competing plans. "The Debtor continues to work in good faith to move all parties towards compromise and consensual resolution, most notably by working with the litigation claimants' counsel to establish a consensual expedited claims resolution processes," the Debtor stated. About Omtron USA Omtron USA bought poultry producer Townsends Inc. out of bankruptcy in 2011, shut down operations in later that year, and filed its own Chapter 11 petition (Bankr. D. Del. Case No. 12- 13076) on Nov. 9, 2012, in Delaware. On Dec. 21, 2012, the Delaware Court entered its order granting the transfer of the Debtor's case to U.S. Bankruptcy Court for the Middle District of North Carolina, under Case No. 12-81931. John H. Strock, III, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, serves as counsel to the Debtor. Duff & Phelps Securities LLC serves as investment banker. The Debtor listed $40,633,406 in assets and $4,518,756 and liabilities. Omtron paid $24.9 million in February 2011 for the North Carolina operations belonging to Townsends Inc. The three-member Official Committee of Unsecured Creditors tapped to retain Lowenstein Sandler LLP and Womble Carlyle Sandridge & Rice, LLP, as its counsel and CohnReznick, LLP, as its financial advisor. OMTRON USA: Has Court's Nod to Hire Mentor Group as Appraiser ------------------------------------------------------------- Omtron USA, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the Middle District of North Carolina to employ The Mentor Group, Inc., as appraiser, nunc pro tunc to Dec. 18, 2012. Mentor will appraise the Debtor's core assets in order to assist the Debtor and its investment banker, Duff & Phelps Securities, LLC, in determining certain baseline values for the Debtor's assets for the sale process. Mentor will receive a flat fee of $23,000 to complete the appraisal. The Debtor noted that Mentor completed a comprehensive appraisal of its assets in March 2011, and that the appraisal is being performed to refresh the values established in the 2011 appraisal. To the best of the Debtor's knowledge, Mentor is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Omtron USA Omtron USA bought poultry producer Townsends Inc. out of bankruptcy in 2011, shut down operations in later that year, and filed its own Chapter 11 petition (Bankr. D. Del. Case No. 12- 13076) on Nov. 9, 2012, in Delaware. On Dec. 21, 2012, the Delaware Court entered its order granting the transfer of the Debtor's case to U.S. Bankruptcy Court for the Middle District of North Carolina, under Case No. 12-81931. John H. Strock, III, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, serves as counsel to the Debtor. Duff & Phelps Securities LLC serves as investment banker. The Debtor listed $40,633,406 in assets and $4,518,756 and liabilities. Omtron paid $24.9 million in February 2011 for the North Carolina operations belonging to Townsends Inc. The three-member Official Committee of Unsecured Creditors tapped to retain Lowenstein Sandler LLP and Womble Carlyle Sandridge & Rice, LLP, as its counsel and CohnReznick, LLP, as its financial advisor. OMTRON USA: Committee Can Hire Womble Carlyle as Bankr. Counsel --------------------------------------------------------------- The Official Committee of Unsecured Creditors in the Omtron USA, LLC, bankruptcy case sought and obtained authorization from the U.S. Bankruptcy Court for the Middle District of North Carolina to retain Womble Carlyle Sandridge & Rice, LLP, as co-counsel, nunc pro tunc to Nov. 29, 2012. The Committee also obtained permission from the Court to retain Lowenstein Sandler PC as counsel, effective as of Nov. 29, 2012. Womble Carlyle will, among other things, assist the Committee in investigating the acts, conduct, assets, liabilities, and financial condition of the Debtor, the operation of the Debtor's businesses, potential claims, and any other matters relevant to the case, to the sale of assets or to the formulation of a plan of reorganization, at these hourly rates: Partners $290 to $700 Of Counsel $290 to $685 Associates $190 to $440 Senior Counsel $260 to $390 Counsel $260 to $470 Paralegals $65 to $295 To the best of the Debtor's knowledge, Womble Carlyle is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Omtron USA Omtron USA bought poultry producer Townsends Inc. out of bankruptcy in 2011, shut down operations in later that year, and filed its own Chapter 11 petition (Bankr. D. Del. Case No. 12- 13076) on Nov. 9, 2012, in Delaware. On Dec. 21, 2012, the Delaware Court entered its order granting the transfer of the Debtor's case to U.S. Bankruptcy Court for the Middle District of North Carolina, under Case No. 12-81931. John H. Strock, III, Esq., at Fox Rothschild LLP, in Wilmington, Delaware, serves as counsel to the Debtor. Duff & Phelps Securities LLC serves as investment banker. The Debtor listed $40,633,406 in assets and $4,518,756 and liabilities. Omtron paid $24.9 million in February 2011 for the North Carolina operations belonging to Townsends Inc. The three-member Official Committee of Unsecured Creditors tapped to retain Lowenstein Sandler LLP and Womble Carlyle Sandridge & Rice, LLP, as its counsel and CohnReznick, LLP, as its financial advisor. ORBITZ WORLDWIDE: Moody's Assigns 'B2' Rating to $450MM Bank Debt ----------------------------------------------------------------- Moody's Investors Service rated Orbitz Worldwide, Inc.'s proposed $450 million first lien credit facility B2 and affirmed the B2 Corporate Family Rating. The Speculative Grade Liquidity Rating was lowered to SGL-3 from SGL-2. The ratings outlook remains stable. Proceeds from the proposed $400 million in term loans, along with cash on hand, will be used to refinance Orbitz's existing term loan. The new $50 million revolver is expected to be undrawn at closing with approximately $5 million in letters of credit reducing availability. Ratings assigned (and Loss Given Default Assessments): - Proposed $50 million first lien revolver due 2017, B2 (LGD3, 47%) - Proposed $150 million first lien term loan B due 2017, B2 (LGD3, 47%) - Proposed $250 million first lien term loan C due 2019, B2 (LGD3, 47%) Ratings affirmed: - Corporate Family Rating, B2 - Probability of Default Rating, B2-PD - $72.5 million first lien revolver due July 2013, B2 (LGD3, 47%), to be withdrawn upon closing - $440 (originally $600) million first lien term loan due July 2014, B2 (LGD3, 47%) -- to be withdrawn upon closing Rating lowered: Speculative Grade Liquidity Rating, to SGL-3 from SGL-2 Ratings Rationale: The downgrade in Orbitz's liquidity rating to SGL-3 from SGL-2 reflects a smaller revolver commitment post-refinancing (to $50 million from $72.5 million) and limited financial flexibility over the next four quarters. Moody's anticipates just $20 million of cash flow generation in 2013 after consideration of tax sharing arrangements with the founding airlines, known occupancy tax litigation expense, higher interest on the new credit facility, and 10% amortization on the term loan B. Meanwhile, Orbitz affiliate Travelport LLC announced a debt restructuring earlier this week. "We think there is some possibility that Orbitz will need to cash collateralize or otherwise fund roughly $72 million of letters of credit currently provided by Travelport primarily on behalf of Orbitz's European business" said Moody's analyst Suzanne Wingo. Although Orbitz reported a cash balance of $130 million at the end of 2012, a significant portion is effectively owed to merchants and hence needed for daily operations. Some of the letters of credit could be moved to Orbitz's new revolver, reducing its effective availability. The stable outlook reflects Moody's expectation for 4-6% revenue growth in 2013, driven in part by the full year impact of a new private label account added in the fourth quarter of 2012. The ratings could be downgraded if liquidity deteriorates, revenue or profitability declines, or incremental debt causes debt / EBITDA to reach 5x or more. The ratings could be raised if Orbitz grows its market share and revenue base through an improved business mix such that total debt / EBITDA could be sustained below 3.5x, and pre-tax income above $50 million, through economic cycles. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Orbitz Worldwide, Inc. is a global online travel agency, operating a portfolio of consumer and corporate travel brands including Orbitz.com, CheapTickets, HotelClub and ebookers. Affiliates of The Blackstone Group (including Travelport Limited) own approximately 53% of Orbitz's stock (ticker: OWW). Revenues are expected to exceed $800 million in 2013. ORMET CORP: $90-Mil. DIP Financing Slammed By PBGC, Creditors ------------------------------------------------------------- Lance Duroni of BankruptcyLaw360 reported that creditors, including the Pension Benefit Guaranty Corp., cried foul on Friday over Ormet Corp.'s $90 million bankruptcy financing package, saying it contains "unreasonable and overreaching" terms benefiting lenders led by the private equity firm planning to scoop up the aluminum smelter's assets. The report related that in an objection filed in Delaware bankruptcy court, Ormet's unsecured creditors committee balked at the company's bid to grant liens on avoidance actions to the debtor-in-possession lenders -- suitor Wayzata Investment Partners LLC and Wells Fargo Capital Finance LLC. 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 RUBIALES: Moody's Rates New US$1-Bil. Notes Offer 'Ba2' --------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Pacific Rubiales Energy Corp.'s offering of up to $1 billion senior unsecured notes due 2023, equal to PRE's Corporate Family Rating and reflecting their pari passu status with the company's other debt obligations. PRE will use the net proceeds from the offering to repay borrowings under its bank credit facilities and for general corporate purposes, including acquisitions and to further bolster its liquidity. The rating outlook is stable. Ratings Rationale: PRE'S Ba2 CFR reflects the company's improving production, reserves and cash flow profile, and its progress on overcoming infrastructure constraints to grow production. PRE's production has continued to increase largely in line with expectations, with an average production of 97,000 net BOE/day up some 13% in 2012 (exit rate 108,149 BOE/day) and proved reserves increasing about 4% to 331.3 million BOE. PRE continues to derive most of its growth from development of the core Rubiales/Piriri and Quifa heavy oil fields. However, the company is also diversifying through acquisitions to provide new exploration and development opportunities not only in Colombia, but also in Peru, Guatemala, Guyana, Brazil and Papua New Guinea. The Ba2 CFR also incorporates the risks of PRE's relatively high concentration of production and proved reserves in the Rubiales and Quifa concessions, which contributed about 83% of production and 28% of proved reserves in 2012, but which are expected to decline relative to the company's total production and reserves as it targets almost doubling net production to the area of 200,000 BOE/day in 2016. With the expiration of its Rubiales/Piriri concessions in July 2016, PRE will need to make steady progress on the Quifa field and other prospects such as CPE-6 and Sabanero in the Llanos Basin, on the La Creciente gas field and related LNG project, and Block Z-1 offshore Peru. While acquisitions and exploration outside Colombia could modestly diversify operations over the next few years, these efforts will also entail exploration and political risk as well as potential leveraging impacts. Finally, PRE's spending and leverage profile will continue to reflect investment in strategic infrastructure projects such as the Bicentennial Pipeline and an LNG export facility that will require substantial investment to monetize its oil and gas reserves and deliver product to market. Moody's expects rising production and an outlook for reasonably high crude oil prices to continue to support strong cash margins and improving leverage metrics for PRE. While a higher capital budget of $1.7 billion in 2013 will likely result in negative cash flow, the company's ability to internally fund capital spending is increasing, despite rising cost pressures, higher finding and development costs and sizeable infrastructure investment. In monitoring PRE's progress and momentum for a higher rating, Moody's will be looking for further production growth and asset diversification, as well as results from the STAR in-situ enhanced recovery program and prospects for more widespread adoption for heavy oil development, including potential new contracts on the Rubiales/Piriri concessions. The principal methodology used in rating Pacific Rubiales was the Independent Exploration and Production (E&P) Industry Methodology published in December 2008. PATRIOT COAL: Files Motion to Reject CBAs With UMMA --------------------------------------------------- Patriot Coal Corporation, et al., ask the U.S. Bankruptcy Court for the Eastern District of Missouri for an order (1) authorizing those Debtors that are signatories to collective bargaining agreements with the United Mine Workers of America to reject such collective bargaining agreements pursuant to Section 1113 of the Bankruptcy Code; (2) implementing the terms of the Debtors' Section 1113 proposal; (3) authorizing the Debtors to terminate retiree benefits for certain of their current retirees pursuant to Section 1114 of the Bankruptcy Code; and (4) implementing the terms of the Debtors' Section 1114 proposal. The statutory predicates for the relief in this motion are Sections 1113 and 1114 of the Bankruptcy Code. The reasons for this Motion are articulated in the Memorandum of Law filed [under seal] contemporaneously with the motion. According to papers filed with the Court, the Motion to Reject Collective Bargaining Agreements and to Modify Retiree Benefits Pursuant to 11 U.S.C. Sections 1113, 1114, the Memorandum in support of the Motion and the declarations and exhibits filed in support of the Motion contain certain highly confidential and sensitive information, including information about the Debtors' liquidity, near-term financial outlook and business plan, all of which constitutes "confidential . . . commercial information" under Section 107(b)(1) of the Bankruptcy Code. According to Patriot, disclosure of the Confidential Information would cause significant harm to the Debtors' commercial relationships and competitive position. The hearing to consider the Motion is scheduled for April 10, 2013, at 10:00 a.m. and April 11, 2013, at 10:00 a.m. The hearing may be adjourned or canceled by the Debtors by notice filed with Bankruptcy Court, or announcement at the April 10, 2013 hearing. A copy of the Motion is available at: http://bankrupt.com/misc/patriotcoal.doc3214.pdf A copy of the Motion to Seal is available at: http://bankrupt.com/misc/patriotcoal.doc3213.pdf * * * Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports Patriot Coal Corp. started proceedings in bankruptcy court March 14 against the mine workers' union to save $150 million a year by trimming wages and benefits under the collective bargaining agreement and reducing health benefits for retirees. Without changes, Patriot said it "will run out of money and will be forced to liquidate," with the loss of 4,200 jobs, including 1,650 workers represented by the United Mine Workers of America. After months of extensive negotiations, the company says the union unjustifiably refused to grant the concessions. Based in St. Louis, where the bankruptcy is now pending, Patriot says the union contract calls for "substantially above-market wages and benefits," making hourly costs 90% higher. The company points out that workers pay almost nothing toward health care and have 47 paid days off a year. With regard to the obligation of providing lifetime health care for retirees, Patriot said the present value of the obligation is $1.6 billion. It is currently providing health care for 8,100 retirees. In addition to changing the union contract, saving $75 million, Patriot intends to save another $75 million annually by creating a trust to take over liability for retiree health care, providing what the company calls "meaningful benefits." As a companion to the wage and benefit initiative, Patriot started a lawsuit in bankruptcy court March 14 against Peabody Energy Corp., prior owner of some of the mines. The suit is designed to stop Peabody from reducing health benefits for some workers. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis & Frankel LLP serves as its counsel. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PEAK RESORTS: Can Use Rossignol Ski Cash Collateral --------------------------------------------------- The Bankruptcy Court has ratified Peak Resorts, Inc.'s prior use of Rossignol Ski Company, Incorporated's cash collateral and authorized the Debtor's future use of cash collateral of Rossignol. Rossignol asserts that it holds a valid, perfected, first priority purchase money security interest in the ski and snowboard rental inventory bearing the tradenames "Rossignol" and "Caber" for use in the Debtor's ski area operations together with the rental revenues of said Collateral and all proceeds of thereof. Pursuant to the Stipulation, the parties have agreed that the total amount due to Rossignol on its prepetition general unsecured claim is $237,754. The value of the Collateral is stipulated and agreed to be $110,000. As ordered, the Debtor will be permitted to use the Collateral and the cash collateral and will pay to Rossignol, out of such cash collateral the sum of $110,000, which amount will be paid in up to four installments: a. on or before Feb. 7, 2013, a sum equal to 20% of the gross rental revenue received by the Debtor, not to exceed $36,667 from the Rental Revenue for the 30 day period preceding Jan. 20, 2013. b. on or before Feb. 24, 2013, a sum equal to 20% of the gross rental revenue received by the Debtor, not to exceed $36,667 from the Rental Revenue for the 34 day period preceding Feb. 17, 2013; c. on or before March 31, 2013, a sum equal to 20% of the gross Rental Revenue received by the Debtors, not to exceed $36,667 from the Rental Revenue for the 42 days period preceding March 31, 2013; d. The balance of the Secured Claim, if any, will be paid upon the earlier of: (i) when the Collateral is sold pursuant to sale under 11 U.S.C. Section 363; (ii) from gross Rental Revenues received in December 2013. The balance of Rossignol's pre=petition general unsecured claim in the amount of $127,753.79 will be treated as a general unsecured claim and will be treated as a general unsecured claim and will be paid in accordance with the Bankruptcy Code. If any of the payments are not received by Rossignol within 7 days after the due date, upon 5 business days' notice to Debtor's counsel, counsel for FDIC-Reciever, counsel for the Official Creditors Committee and the United States Trustee, Rossignol will be entitled to obtain, on a ex parte basis, an order granting it relief from the automatic stay. About Peak Resorts Peak Resorts, Inc., dba Greek Peak Mountain Resort, and four affiliates filed for Chapter 11 bankruptcy (Bankr. N.D.N.Y. Case Nos. 12-31471 to 12-31473, 12-31475 and 12-31476) in Syracuse on Aug. 1, 2012. The affiliates are Hope Lake Investors LLC, V.R.P.D. II L.P., REDI LLC, and A.R.K. Enterprises Inc. Peak Resorts owns 888.5 acres of real estate, including the "Greek Peak Mountain Resort", a four-season resort development located in Virgil, New York. The 888.5-acre property is located 8 miles from Cortland, New York and has the largest day trip area in Central New York state. REDI LLC owns 402.7 acres of adjacent property. Hope Lake Investors owns the Hope Lake Lodge & Cascades Indoor Water Park, a 151-room hotel and resort facility in Virgil, Cortland County. The Debtors have a total of 264 employees. Chief Bankruptcy Judge Robert E. Littlefield Jr. presides over the case. Lawyers at Harris Beach PLLC serve as the Debtors' counsel. The Debtors scheduled these assets and debts: Scheduled Assets Scheduled Liabilities ---------------- --------------------- Hope Lake $27,180,635 $48,800,528 Peak Resorts $12,991,230 $26,558,438 REDI, LLC $1,298,401 $3,851,808 The petitions were signed by Allen R. Kryger, president. PEAK RESORTS: Can Obtain $2-Mil. of Financing --------------------------------------------- On Feb. 15, 2013, the Bankruptcy Court entered a second final order authorizing Peak Resorts, Inc., et al., to obtain post- petition financing in the aggregate amount not exceeding $2,004,454 from the Federal Deposit Insurance Corporation, in its capacity as Receiver for Tennessee Commerce Bank, to fund the post-petition operating expenses of the Debtors incurred in the ordinary course of business and to pay certain other costs and expenses of administration, in accordance with the Third Amended DIP Agreement. All terms and covenants set forth in the DIP Agreement and approved by the First Final Order will continue in full force and effect except as expressly modified by the Third Amended DIP Agreement and this Second Final Order. Interest on the DIP Loan will accrue at the rate of 9% annually. The DIP Loan will mature on March 31, 2013, unless extended by the DIP Lender in its sole discretion. The Debtors and the DIP Lender anticipate that the DIP Loan will be paid either by a sale of substantially all of the Assets under Section 363 of the Bankruptcy Code, a refinancing of the DIP Loan and/or other subordinate financial obligations of the Debtors, be amortized and paid out pursuant to a plan of reorganization. A copy of the Second Final Order is available at: http://bankrupt.com/misc/peakresorts.doc306.pdf A copy of the First Final Order is available at: http://bankrupt.com/misc/peakresorts.doc113.pdf About Peak Resorts Peak Resorts, Inc., dba Greek Peak Mountain Resort, and four affiliates filed for Chapter 11 bankruptcy (Bankr. N.D.N.Y. Case Nos. 12-31471 to 12-31473, 12-31475 and 12-31476) in Syracuse on Aug. 1, 2012. The affiliates are Hope Lake Investors LLC, V.R.P.D. II L.P., REDI LLC, and A.R.K. Enterprises Inc. Peak Resorts owns 888.5 acres of real estate, including the "Greek Peak Mountain Resort", a four-season resort development located in Virgil, New York. The 888.5-acre property is located 8 miles from Cortland, New York and has the largest day trip area in Central New York state. REDI LLC owns 402.7 acres of adjacent property. Hope Lake Investors owns the Hope Lake Lodge & Cascades Indoor Water Park, a 151-room hotel and resort facility in Virgil, Cortland County. The Debtors have a total of 264 employees. Chief Bankruptcy Judge Robert E. Littlefield Jr. presides over the case. Lawyers at Harris Beach PLLC serve as the Debtors' counsel. The Debtors scheduled these assets and debts: Scheduled Assets Scheduled Liabilities ---------------- --------------------- Hope Lake $27,180,635 $48,800,528 Peak Resorts $12,991,230 $26,558,438 REDI, LLC $1,298,401 $3,851,808 The petitions were signed by Allen R. Kryger, president. PULSE ELECTRONICS: Has Forbearance Agreement With Oaktree --------------------------------------------------------- Pulse Electronics Corporation on March 11, 2013, entered into a Forbearance Agreement with Oaktree Capital Management L.P., relating to Pulse's credit agreement, by and among the Company, Pulse Electronics (Singapore) Pte Ltd, certain other subsidiaries of the Company, the lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent. Under the Forbearance Agreement, Oaktree, as the sole Lender under the credit agreement, agreed to forebear from taking any action, including, without limitation, an acceleration of any of the obligations secured under the credit agreement, permitted to be taken by Oaktree under the credit agreement and the related loan documents in connection with certain specified default or event of default. Under the Forbearance Agreement, a Specified Default is defined as (i) any default resulting from the Company's, Borrower's or any Subsidiaries' failure to satisfy financial covenants of the credit agreement as of the last day of each of the Test Periods ending on the following dates: December 28, 2012, March 31, 2013, June 30, 2013, September 30, 2013 and December 31, 2013, (ii) any incurrence or settlement of any pension plan obligation not in the ordinary course prior to December 31, 2013 and not exceeding $6,500,000 in the aggregate, of which no more than $1,500,000 can be paid in any year and (iii) only until January 1, 2014 and not at any time thereafter, any default resulting from the Company's litigation against Halo and the Turkish VAT-related dispute, provided that, with respect to the litigation against Halo, the Company files an appeal following the court judgment in November 2012. "Although we anticipate meeting our covenants in the future, our ability to remain in compliance with the covenants may be adversely affected by future events potentially beyond our control. Violating any of these covenants could result in being declared in default, which may result in our lenders electing to declare our outstanding borrowings immediately due and payable and terminate all commitments to extend further credit. If the lenders accelerate the repayment of borrowings, we cannot provide assurance that we will have sufficient liquidity to repay our credit facilities or other indebtedness. In addition, certain domestic and international subsidiaries have pledged the shares of certain subsidiaries, as well as accounts receivable, inventory, machinery and equipment, intellectual property and other assets as collateral. If we default on our obligations, our lenders may take possession of the collateral and may license, sell or otherwise dispose of those related assets in order to satisfy our obligations," Pulse said. As of Dec. 28, 2012, Pulse had aggregate long-term debt, excluding debt discounts, of roughly $125.8 million. Pulse on Nov. 20, 2012, entered into a credit agreement with Oaktree pursuant to which Oaktree extended a new $75.0 million senior secured Term A Loan and exchanged approximately $28.5 million principal amount and unpaid interest of the Company's outstanding senior convertible notes for a new $28.5 million secured Term B Loan. The Company used approximately $55.0 million of the proceeds to retire its senior credit facility and is using the remaining $20.0 million for working capital, transaction fees, general business purposes, and to increase cash on hand. The interest rate on the Term A Loan is 12.0% per annum, and the interest rate on the Term B Loan is 10.0% per annum. Interest on each term loan may, at the Company's election, be paid in cash or paid in kind (in the form of additional principal) for the first three years. The Company plans to pay the interest due on these term loans in the form of additional principal for the first three years. The new term loans mature on Nov. 20, 2017, and are secured by a first lien on the collateral that secured the Company's pre-existing senior secured credit facility and on its available unencumbered assets. The term loans are non-amortizing and may be prepaid without any penalty. While the Term B Loan is not junior in relative lien priority to the Term A Loan, the Term B Loan may not be repaid until the Term A Loan is paid in full. Pulse incurred $4.2 million of loan costs and fees related to the Oaktree term loans, which have been capitalized as debt issuance costs and are being amortized using the effective interest rate method through the maturity date of the debt. Pulse said it is being required by the lender to maintain an unrestricted cash balance of $10.0 million (subject to the forbearance agreement dated March 11, 2013) and capital expenditures are limited to $10.0 million in fiscal 2013 subject to forbearance, $12.0 million in fiscal 2014, and $14.0 million in fiscal 2015 and in each fiscal year thereafter. San Diego, California-based Pulse Electronics Corporation -- http://www.pulseelectronics.com/-- is a global producer of precision-engineered electronic components and modules, operating in three business segments: Network product group; Power product group; and Wireless product group. As of Dec. 28, 2012, Pulse had $188 million in total assets. QUALTEQ INC: Creditors Begin Voting on Full-Payment Plan -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors of Qualteq Inc., previously a provider of production services for direct-marketing firms, can begin voting on the liquidating Chapter 11 plan. The bankruptcy judge in Chicago approved voting materials on March 13. The report relates that the explanatory disclosure statement tells unsecured creditors with about $9.8 million in claims how they should be paid in full from a liquidating trust. The confirmation hearing for approval of the plan is set for April 23. Lenders with mortgages on real estate securing about $34 million will be paid in full from sales of the underlying properties. The plan was spawned by a $51.2 million sale of the business completed in November. The buyer, Valid USA Inc., paid $51.2 million. The disclosure statement reveals a projected $13.7 million left over for the company's owners after creditors are paid. The trustee was appointed at the request of Bank of America NA. About QualTeq Inc. South Plainfield, New Jersey-based QualTeq, Inc., engaged in the design, manufacture, and personalization of plastic cards in the United States. The company manufactured magnetic, contact, and dual interface smart cards. Qualteq Inc. and 17 affiliated companies filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 11-12572) on Aug. 14, 2011. Debtor Avadamma LLC disclosed $38,491,767 in assets and $36,190,943 in liabilities as of the Petition Date. The case was transferred to Chicago from Delaware in February 2012. At the request of Bank of America NA, the bankruptcy judge in Chicago appointed Fred C. Caruso of Development Specialists, Inc., as Chapter 11 trustee in May 2012. During the Delaware proceedings, the Debtors hired Fox Rothschild LLP, as local counsel and K&L Gates LLP acted as general bankruptcy counsel. Scouler & Company was tapped as restructuring advisors. The Debtors are currently represented by Harley J. Goldstein, Esq., and Matthew E. McClintock, Esq., at Chicago firm, Goldstein & McClintock LLC. In the Delaware proceedings, Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed four unsecured creditors to serve on the Official Committee of Unsecured Creditors. The Committee has hired Lowenstein Sandler PC as counsel and Eisneramper LLP as accountants and financial advisors. Cozen O'Connor serves as the Committee's Co-Counsel In November 2012, the Qualteq trustee completed the sale of the business for $51.2 million to Valid USA Inc. The price included $46.1 million in cash plus the assumption of liabilities. The Chapter 11 Trustee is represented by Kirkland & Ellis. REGEN BIOLOGIC: FDA Says It Caved to Politics In Clearing Implant ----------------------------------------------------------------- Erica Teichert of BankruptcyLaw360 reported that The U.S. Food and Drug Administration said Thursday it had acted within its authority when it rescinded marketing clearance for a ReGen Biologics Inc. knee implant -- an action the company says drove it into bankruptcy -- because the device had gotten initial approval only due to "severe political pressure." According to the report, FDA attorneys claimed during a summary judgment hearing Thursday that the agency was under "one of the most severe political pressures" it had ever seen when it first approved ReGen's collagen meniscus implant, Menaflex. About ReGen ReGen Biologics Inc., filed for Chapter 11 protection following a decision by the Food & Drug Administration in March 2011 to rescind approval of its meniscus implant. ReGen Biologics in Hackensack, New Jersey, sought Chapter 11 protection (Bankr. D. Del. Case No. 11-11083) on April 8, 2011. An affiliate, RBio, Inc., also sought protection from creditors (Case No. 11-11084). Attorneys at Pillsbury Winthrop Shaw Pittman LLP and Phillips, Goldman & Spence represent the Debtors. ReGen disclosed $1,496,261 in assets and $5,208,393 in liabilities as of the Chapter 11 filing. RESIDENTIAL CAPITAL: Fed, Ally Balk at Bid to End Consent Decree ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Residential Capital LLC, the mortgage-servicing subsidiary of non-bankrupt Ally Financial Inc., is attempting to scuttle a consent decree with the Federal Reserve Board and the Federal Deposit Insurance Corp. by calling the obligation a "claim" that can be paid in cash like other unsecured claims. The report recounts that in April 2011, ResCap and other mortgage servicers signed a consent order with the FDIC and the Fed requiring an extensive review of past foreclosures to find those that were improper and compensate homeowners who suffered as a result. Costing $300,000 a day, ResCap said in court papers filed in February that the review is the single-largest expense in the Chapter 11 reorganization begun in May. ResCap cited an agreement that 10 lenders made in January to pay billions of dollars to end the review process. Consequently, ResCap believes the consent order is nothing more than an unsecured, pre-bankruptcy claim because the liability can be quantified in dollars. According to the report, the Fed shot back March 13 saying the bankruptcy court has no power to limit the agencies' police and regulatory powers. They even dispute the idea that the bankruptcy court has any jurisdiction to disturb an action taken by the Fed. The Fed points to the underlying law enabling the consent decree in the first place. The Fed says it only has power to require restitution and reimbursement and doesn't have authority to assess a monetary penalty for "engaging in unsafe or unsound practices." The report adds that Ally likewise objects, pointing to multiple instances during the Chapter 11 case when ResCap said it would abide by the consent decree. Ally says the $3 billion sale of the mortgage-servicing business was accompanied by an undertaking to comply with the consent decree. Ally argues it was importuned to provide $220 million in financing on the representation that ResCap would abide by the consent decree. The issue comes up at a March 21 hearing in U.S. Bankruptcy Court in Manhattan. Bending to creditor criticism, ResCap terminated the pre- bankruptcy agreement with Ally intended as the foundation for a Chapter 11 plan. ResCap is also giving creditors the right to sue Ally if there isn't agreement on a consensual plan by May, when an examiner will be issuing a report. ResCap sold the most of the business to two buyers for a combined $4.5 billion. The remaining assets are worth $1 billion, the company said in a court filing. ResCap's $2.1 billion in third-lien 9.625% secured notes due in 2015 last traded March 13 for 110.125 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The $473.4 million of ResCap senior unsecured notes due in April last traded on March 8 for 30.938 cents on the dollar, a 31.6% increase since Dec. 19, according to Trace. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Ally Objects to Changes to Protective Order ---------------------------------------------------------------- BankruptcyData reported that Ally Financial Inc. filed with the U.S. Bankruptcy Court an objection to the examiner's motion for an order modifying the uniform protective order for examiner discovery. Ally, according to BankruptcyData, asserts, 'Whereas the Examiner has justified its extraordinary request to limit parties' ability to clawback privileged documents based on its need to complete its report in a timely manner, this justification does not apply to any other party. As such, Ally requests clarification that the proposed modifications apply solely to the Examiner -- a clarification that the Examiner has indicated that it does not oppose.' The Debtors filed a joinder to the objection, explaining, 'Most significantly, Debtors agree with AFI that modification of the Protective Order cannot change the obligations imposed by the rules governing discovery of privileged documents. As such, the Debtors request that any modification permit a party to seek leave of Court to make a request for the return of privileged information, even after the proposed deadline for automatic clawbacks has passed,' BankruptcyData said. The examiner filed a response to the objections, stating, 'The Examiner's proposed order would fairly preserve the parties' ability to assert appropriate claims of inadvertent production subject only to reasonable time limits on such assertions to provide the Examiner with the certainty and finality critical to his task. The Examiner is not asking anyone to waive privilege, only to raise it by a time certain,' BankruptcyData added. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. The sale of the assets, subject to satisfaction of customary closing conditions including certain third party consents, is expected to close in the first quarter of 2013. The partnership of Ocwen and Walter defeated the last bid of $2.91 billion from Fortress Investment Group's Nationstar Mortgage Holdings Inc., which acted as stalking horse bidder, at an auction that began Oct. 23, 2012. The $1.5 billion offer from Warren Buffett's Berkshire Hathaway Inc. was declared the winning bid for a portfolio of loans at the auction on Oct. 25. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESTAURANT HOLDING: Moody's Changes Ratings Outlook to Negative --------------------------------------------------------------- Moody's Investors Service changed the ratings outlook of Restaurant Holding Company to negative from stable while affirming its long term ratings, including the B3 Corporate Family Rating and Caa1-PD Probability of Default Rating. The outlook revision reflects Moody's expectation that RHC's operating trends will remain under pressure near-term, owing to weak macroeconomic factors in Puerto Rico, volatile commodity prices, and the intense competitive environment among quick service restaurants ("QSR"). In the past two quarters of fiscal 2013, Caribbean's comparable restaurant sales declined in the mid single-digit percentage range on a year-over-year basis. Moody's is concerned that comparable restaurant sales will remain negative over coming quarters as the aforementioned challenges persist. Ratings affirmed: Corporate Family Rating at B3 Probability of Default Rating at Caa1-PD $22.5 million senior secured revolving credit facility due 2016 at B3 (LGD3, 32%). Revised from (LGD3, 31%) $182 million senior secured term loan due 2017 at B3 (LGD3, 32%). Revised from (LGD3, 31%) Ratings Rationale: RHC's B3 CFR reflects its high financial leverage of about 5.5 times and Moody's expectation that it will increase to the 6.0 times range (excluding preferred stock adjustment) over the next 12 to 18 months as EBITDA levels modestly deteriorate. The rating also reflects the company's high exposure to consumer spending patterns, modest scale, and narrow geographic concentration. The rating is supported by the company's leading position in the Puerto Rico QSR segment as a result of its exclusive development agreement within Puerto Rico and the strength of the Burger King brand. The rating also reflects sufficient coverage of cash interest expense (on an EBITDA less capex basis) and Moody's expectation that RHC will maintain an adequate liquidity profile near-term. Moody's could downgrade RHC's ratings if its operating metrics such as same store sales, customer traffic, and operating profit continue to decline resulting in debt to EBITDA (excluding preferred equity adjustment) approaching 6.5 times, EBITDA less capex to interest falling to one time, or sustained negative free cash flow. Downward ratings pressure could also result if the company's liquidity profile weakens. Given the weak economic environment in Puerto Rico, positive ratings momentum is not expected in the near term, but could occur if the company is able to develop a track-record of improved operating performance, increase its scale and geographic diversification, and sustain debt to EBITDA below 5.0 times. 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. Restaurant Holding Company, through an exclusive territorial development agreement with Burger King Corporation, is the sole franchisee of Burger King restaurants in Puerto Rico with approximately 179 units as of January 2013. In 2011 the company's subsidiary Latin American Subs, LLC acquired the rights to operate the Firehouse Subs franchise in Puerto Rico and currently there are seven Firehouse Subs restaurants operating. Caribbean is a wholly-owned subsidiary of BKH Acquisition Corp., which in turn is majority-owned by Castle Harlan Partners, a private equity firm that purchased the company in 2004. REVEL AC: Casino to File Prepackaged Chapter 11 March 22 -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Revel casino in Atlantic City, New Jersey, said that it expects to file a prepackaged Chapter 11 reorganization around March 22. According to the report, with the reorganization to have been accepted by creditors in advance, the casino said it should be able to complete the bankruptcy process within 60 days. The plan is to cut debt by about $1 billion. The casino will have a new chief executive officer to guide the bankruptcy. Jeffrey Hartmann is replacing Kevin DeSanctis as CEO. The chief investment officer of the casino also stepped down. Mr. DeSanctis and the chief investment officer will retain their positions with the Revel Group holding company that owns the casino. The holding company will lose its ownership through bankruptcy. Mr. Hartmann had been in several capacities with the Mohegan Sun casino in Connecticut since 1994, ending his career there as chief executive in 2012. About Revel AC Revel AC, Inc. -- http://www.revelresorts.com/-- owns and operates Revel, a Las Vegas-style, beachfront entertainment resort and casino located on the Boardwalk in the south inlet of Atlantic City, New Jersey. In 2012, Revel warned federal regulators about a potential bankruptcy or foreclosure, citing its growing debt load of more than $1.3 billion and the possibility that revenue will remain depressed. At Sept. 30, 2012, the Company had $1.14 billion in total assets, $1.39 billion in total liabilities and a $243.12 million total owners' deficit. * * * As reported by the TCR on Feb. 22, 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Atlantic City- based Revel AC Inc., the operator of the Revel resort, to 'D' from 'CCC'. The rating actions follow the company's announcement that it plans to restructure through a prepackaged Chapter 11 reorganization, and that it did not make the scheduled interest payment due Feb. 19, 2013, under its term loan agreement. RG STEEL: Sues 34 Companies to Seek Payment of More Than $2.5-Mil. ------------------------------------------------------------------ RG Steel Wheeling, LLC filed lawsuits against J & B Welding Inc. and 31 other companies that purchased steel products from the company prior to its bankruptcy filing. The lawsuits, which were filed separately on March 8 in the U.S. Bankruptcy Court for the District in Delaware, seek payment of more than $1.98 million, plus interest. The company's affiliate, RG Steel Sparrows Point LLC, also filed two separate lawsuits against Consolidated Systems Inc. and NK Steel LLC to seek payment of $549,875, plus interest for steel products purchased. The lawsuits were filed in the same court. 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 AND HUES: Court Approves JS-Led Auction on March 27 ---------------------------------------------------------- The Hon. Neil W. Bason of the U.S. Bankruptcy Court for the Central District of California approved on March 13 Rhythm And Hues, Inc.'s bid and auction procedures. When R&H went about setting up a sale, no buyer was under contract. Before the hearing, Japanese entertainment and content media company JS Communications Co. signed a letter of intent to buy the business. As reported by the Troubled Company Reporter on March 11, 2013, The Wall Street Journal's Ben Fritz reported that JS Communications Co., the "stalking horse" bidder, is offering to assume nearly $16 million of debtor-in-possession loans from two studios for which the Debtor is doing work and to pay $1 million in cash to help satisfy other liabilities. Under a letter of intent entered with the Debtor on March 7, 2013, JS Communications has until March 19 to submit a definitive, signed Asset Purchase Agreement and pay a cash deposit of $425,000. If offers from other interested buyers are submitted to the Debtor, an auction will be held on March 27, 2013, commencing at 10:00 a.m. Pacific time. In accordance with the Bid Procedures, bids must be submitted by March 22, 2013, at 5:00 p.m. Pacific time. A Submitted Bid must provide for a purchase price that exceeds the APA Purchase Price by at least $525,000 and be comprised of at least: (i) payment of the cure amounts, if any, (ii) either (x) payment in full of the DIP loan obligations in cash at the closing of the sale, or (y) assumption of the DIP loan obligations; (iii) assumption of all other assumed liabilities set forth in the APA; and (iv) $1,525,000 in cash in immediately available funds to be delivered to the Debtor's estate at the closing. A Submitted Bid must propose that the Prospective Bidder is not acquiring the rights to receive the first $5 million of payments on account of those certain shareholder notes owned by the Debtor, or provide additional consideration to match the benefit to the estate under the terms of the APA. A Submitted Bid must be accompanied by a good faith deposit of at least $425,000 by wire transfer, certified or cashier's check. The Good Faith Deposit will be held in a segregated debtor in possession bank account. A Qualified Bidder may increase its bid as many times as it chooses, provided that each subsequent bid must exceed the prior bid for the assets by at least $100,000. The increase may take the form of an all cash bid, the assumption of debt, or a combination of both. JS Communications will be entitled to a Break-Up Fee of $425,000, if the Debtor chooses an offer from another buyer who pays at least $525,000 in cash above the APA purchase price. A hearing on the approval of the sale will be held on March 28, 2013, commencing at 3:00 p.m. A copy of the Bid Procedures is available for free at: http://bankrupt.com/misc/RHYTHM_AND_HUES_bidprocedures.pdf 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: Gets Final Nod for Fox & Universal DIP Financing ----------------------------------------------------------------- The Hon. Neil W. Bason of the U.S. Bankruptcy Court for the Central District of California has granted Rhythm And Hues, Inc., final approval to obtain $17.1 million of DIP financing from key clients Universal City Studios LLC and Twentieth Century Fox, a division of Twentieth Century Fox Film Corporation. As reported by the Troubled Company Reporter on Feb. 21, 2013, the Court, following an initial hearing on the DIP financing on Feb. 15, granted interim approval of the loan and allowed the Debtor to borrow as much as $11 million pending final approval. The Debtor stated that while the principal purpose of the loan is to allow it to finish existing projects for Universal and Fox, it will also allow the Debtor to remain in business for approximately the next 75 days and, potentially for additional time as new work is bid and secured. During the next two months, the Debtor intends to continue to market the business to third party buyers with the potential goal of entering into a sale or other financing transaction, allowing R&H to exit its Chapter 11 case as a healthier company. The loan from Fox and Universal are provided on favorable terms: the loan bears interest at a fixed rate of 6% per annum and will not mature until the earlier of Dec. 31, 2015 (almost three years from today) and the effective date of a reorganization plan. Default interest will be 9% per annum. The DIP Loan will be in the maximum of $17.086 million to be advanced in four installments: (1) $6 million to be advanced upon entry of an order approving the DIP Loan on an interim basis; (2) $5 million to be advanced on Feb. 19, 2013; (3) $4 million to be advanced on March 18, 2013, but only after entry of an order approving the DIP Loan on a final basis; and (4) $1.586 million to be advanced on April 8, 2013. In addition, there is a loan allowance amount for the lenders' counsel up to $500,000. The DIP Loan will be secured by a first priority security interest on substantially all of the Debtor's assets, subject to a carve- out for (a) allowed and unpaid fees and expenses in an amount not to exceed (i) $1 million for the Debtor's restructuring counsel, Greenberg Glusker Fields Claman & Machtinger LLP; (ii) $500,000 for the Debtor's financial consultant, Scouler & Company LLC; (iii) $50,000 for counsel for the Official Committee of Unsecured Creditors, if any; and (iv) $150,000 for the Debtor's broker/ investment banker, and (b) all accrued and unpaid fees that arise pursuant to 28 U.S.C. Sec. 1930. 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. RHYTHM AND HUES: Can Hire Houlihan Lokey as Investment Banker ------------------------------------------------------------- Rhythm And Hues, Inc., sought and obtained authorization from the Hon. Neil W. Bason of the U.S. Bankruptcy Court for the Central District of California employ Houlihan Lokey Capital, Inc., as investment banker. Houlihan Lokey will, among other things: a. review the Debtor's financial condition, operations, competitive environment, prospects and related matters; b. assist the Debtor in the development, preparation and distribution of selected information, documents, plans and other materials in an effort to create interest in and to consummate any transaction, including, if appropriate, assisting the Debtor in the prepartion of an offering memorandum; c. solicit and evaluate indications and proposals regarding any transaction from current and potential equity investors, acquirers and strategic partners; and d. assist the Debtor with the development, structuring, negotiation and implementation of any transaction, including participating as representative of the Debtor in negotiations with creditors and other parties involved in any transaction, including the DIP lenders. Houlihan Lokey will earn a monthly fee of $75,000 for each of the first two 30-day periods following the Effective Date of the in the letter agreement between the Debtor and Houlihan Lokey. The first Monthly Fee on account of the first 30-day period following the Effective Date must be paid to Houlihan Lokey by the Debtor promptly following entry of a final order approving Houlihan Lokey's employment pursuant to the Agreement. The Monthly Fee for the second 30-day period will be paid to Houlihan Lokey by the Debtor on the later of: (i) the 30th day following the Effective Date; and (ii) the date of entry of a final order of the Court approving Houlihan Lokey's employment. Upon the closing of a transaction, the Debtor will pay Houlihan Lokey from the gross proceeds of the transaction and from other liquid assets of the Debtor, as a cost of the transaction, a cash fee based upon Aggregate Gross Consideration, calculated as follows: (i) for AGC up to $30 million, a Transaction Fee of $850,000; plus (ii) for additional AGC in excess of $30 million up to $35 million, 2% of the additional AGC; plus (iii) for all additional AGC in excess of $35 million, 4% of the additional AGC. Peter S. Fishman, Director of Houlihan Lokey, attested to the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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. ROTHSTEIN ROSENFELDT: Ponzi Victims Slam $72M Ch. 11 TD Bank Deal ----------------------------------------------------------------- Sindhu Sundar of BankruptcyLaw360 reported that Scott Rothstein's Ponzi scheme victims piled on his firm's Chapter 11 plan Wednesday, targeting a $72 million settlement with TD Bank NA that allegedly gives the bank too much power over payments to creditors while shielding it from suits over its own alleged role in the $1.2 billion scheme. The report related that in more than a dozen objections filed in Florida bankruptcy court, the scheme's victims and creditors of the bankrupt Rothstein Rosenfeldt Adler PA decried the TD Bank settlement as an "unfair and inequitable" deal. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- has been suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed November 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on January 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case filed a bankruptcy plan and disclosure statement on Aug. 17. The plan was filed and signed by the Committee attorney, Michael Goldberg of Akerman Senterfitt, and not by the court-appointed trustee Herbert Stettin. The plan calls for the creation of a liquidating trust and four classes of claimants. A date for confirmation of the plan was left blank. S & S FOOD: Former Officer's Debt Not Dischargeable --------------------------------------------------- Bankruptcy Judge Barbara J. Houser ruled that S&S Food Corporation is entitled to a judgment against Sadruddin Sherali for actual damages of $694,356, exemplary damages of $500,000, and attorney's fees of $15,000. These amounts are excepted from Mr. Sherali's discharge under 11 U.S.C. Sec. 523(a)(4). Mr. Sherali was the company's sole officer, director and shareholder from Jan. 1, 2006, until Dec. 9, 2011. On Dec. 9, 2011, Mr. Sherali ceased being an officer, employee, director and shareholder of S&S when Dominic W. Lam Inc. was the high bidder at an auction of the stock of reorganized S&S. The auction was conducted in connection with a hearing on confirmation of S&S' Second Amended Plan of Reorganization in its bankruptcy case. The Court confirmed S&S' plan of reorganization and Dominic W. Lam Inc. became the sole shareholder of S&S when the plan became effective. Mr. Sherali is a debtor in a Chapter 7 bankruptcy case (Bankr. N.D. Tex. Case No. 12-34480). S&S asserts an unliquidated claim. S & S FOOD CORPORATION, Plaintiff, v. SADRUDDIN SHERALI, Defendant, Adv. Proc. No. 12-03198 (Bankr. N.D. Tex.), was filed to determine the debts owed to the plaintiff and to determine dischargeability of those debts. A copy of the Court's March 14, 2013 Findings of Fact and Conclusions of Law is available at http://is.gd/3zRqhafrom Leagle.com. Dallas-based S & S Food Corporation filed for Chapter 11 bankruptcy (Bankr. N.D. Tex. Case No. 11-32325) on April 4, 2011, listing assets of $1,290,010 and debts of $2,280,706. Judge Barbara J. Houser oversees the case. Joyce W. Lindauer, Esq. -- courts@joycelindauer.com -- served as the Debtor's counsel. A list of the Company's eight largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/txnb11-32325.pdf The petition was signed by Sadrudon Sherali, president. S&S Food -- dba Star Food Mart; and dba Star Laundry Mat -- in Dallas, also sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 08-32225) on May 6, 2008, estimating $1 million to $10 million in both assets and debts. Judge Houser oversaw that case too. John E. Leslie, Esq. -- arlingtonlaw@aol.com -- in Arlington, Texas, served as counsel in the 2008 case. SABRA HEALTH: Proposed $50MM Stock Issue Gets Moody's B3 Rating --------------------------------------------------------------- Moody's Investors Service has assigned a B3 rating to the proposed $50 million preferred stock of Sabra Health Care REIT, Inc., currently being marketed. The rating outlook remains stable. Net proceeds from this offering are expected to be used to reduce the balance on the REIT's secured revolving credit facility. These ratings were assigned with a stable outlook: Sabra Health Care REIT, Inc. --$50 million preferred stock at B3; senior unsecured shelf at (P)B1; preferred stock shelf at (P)B3. Ratings Rationale: Sabra's B3 preferred stock rating reflects Moody's standard notching practice for REITs with senior unsecured ratings below Ba2. Sabra's B1 senior unsecured and B1 corporate family ratings reflect the REIT's small size, early stage of growth, and tenant concentration with Genesis HealthCare LLC, the parent company of Sun Healthcare Group, Inc. Sabra's asset type concentration in skilled nursing facilities also remains a key credit challenge as this sector is highly regulated and dependent on government reimbursements through Medicare and Medicaid, which Moody's views as particularly at risk for rate cuts in the current fiscal environment. As key credit strengths, Moody's notes that Sabra has demonstrated substantial progress in growing its portfolio and reducing its former 100% tenant concentration with Sun. Genesis, who recently acquired Sun, comprised 65% of Sabra's annualized revenues as of 4Q12 and Moody's expects this concentration will decrease further as the REIT continues its active pace of growth. Moody's also views favorably Sabra's strategic focus on increasing its presence in private pay senior housing investments. Sabra has sufficient financial capacity to fund continued growth. The REIT had $126 million of liquidity as of 4Q12, including $17 million of cash and $109 million available on its secured revolver. Proceeds from the proposed $50 million preferred equity offering will be used to reduce its line balance. Sabra has no significant debt maturities until 2015 when its line and $87 million of mortgages come due. Moody's also notes that the REIT's modest leverage profile and sound fixed charge coverage are additional credit positives supporting its ratings. The stable outlook reflects Moody's expectation that Sabra will continue to execute on its strategic growth and diversification, while maintaining modest leverage and sound liquidity. Moody's indicated that a rating upgrade would likely reflect reduced tenant concentration (largest tenant less than 50% of revenues), maintenance of fixed charge coverage above 2.5x and Net Debt/EBITDA below 6x on a sustained basis. Sound property coverage ratios across all significant leases would also be necessary for a ratings upgrade. Negative rating pressure would likely result from sustained, substantial deterioration in property coverage ratios, fixed charge coverage below 2.2x, or material increases in secured debt, which could create subordination and pressure on the senior unsecured debt rating. The last rating action with respect to Sabra Health Care REIT, Inc. was on April 19, 2012, when the ratings were upgraded to B1 from B2 with a stable outlook. The principal methodology used in this rating was Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. Sabra Health Care REIT, Inc. [Nasdaq: SBRA] is a self-managed real estate investment trust that, through its subsidiaries, owns and invests in real estate serving the healthcare industry. Sabra leases properties to tenants and operators throughout the United States. As of March 11, 2013, and after giving effect to the announced Bee Cave Preferred Equity Investments, Sabra's portfolio included 119 real estate properties held for investment and leased to operators/tenants under triple-net lease agreements (consisting of (i) 96 skilled nursing/post-acute facilities, (ii) 22 senior housing facilities, and (iii) one acute care hospital), three mortgage loan investments and two preferred equity investments. SABRA HEALTH: S&P Assigns 'CCC+' Rating to $50MM Series A Shares ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' rating to the proposed $50 Million Series A cumulative redeemable preferred shares issued by Sabra Health Care REIT Inc.. S&P believes Sabra intends to use proceeds from the offering to repay borrowing on its amended secured revolving credit facility, which had $92.5 million outstanding as of Dec. 31, 2012, and for general corporate purposes, which may include funding future acquisitions. Based on S&P's criteria, it ascribes minimal equity credit to the proposed preferred stock. Irvine, Calif.-based Sabra is a self-administered and self-managed health care REIT. With an enterprise value of $1.4 billion, Sabra is the smallest REIT S&P rates. The company's portfolio of 119 health care properties is diversified across 27 states, but concentrated by tenant, with Genesis HealthCare LLC (B/Stable/--), contributing roughly 64% of its revenue. Sabra's health care portfolio is heavily weighted toward skilled nursing/post-acute facilities, which contribute roughly 82% of its revenue and are subject to potentially volatile government reimbursement programs such as Medicare and Medicaid. S&P's base-case scenario assumes that Sabra's same-store revenue grows 1.5% in 2013 and the company pursues $180 million of leverage-neutral investments at an 8.5% yield in the latter part of the year. Under this scenario, S&P estimates that Sabra's debt-to-EBITDA will decline to 5.3x-5.7x in 2013 (from 6.2x in 2012) and fixed-charge coverage will strengthen to 2.4x-2.6x (from 2.3x). S&P's stable outlook on Sabra reflects S&P's expectation for steady near-term core cash flow, given negligible scheduled lease expirations until 2020 and S&P's expectations for relatively flat tenant-level rent coverage (EBITDAR coverage was 1.5x during fiscal 2012). S&P also expects profitable leverage-neutral investments leading to modest improvement in EBITDA-based credit metrics and maintenance of adequate liquidity. S&P do not foresees taking any negative rating actions in the near term, given S&P's expectation for modest improvement in EBITDA- based credit metrics. However, S&P would consider lowering the ratings if liquidity becomes less than adequate, Sabra funds growth with a greater proportion of debt such that leverage exceeds 7.5x EBITDA, or FCC dips below 1.8x. This could result from the company pursuing more aggressive than expected debt- financed growth or restructuring leases for tenants that can't absorb or mitigate potential future reimbursement cuts. Near-term upgrades remain unlikely due to Sabra's smaller and less diversified revenue base, and less-flexible capital structure. Longer-term, S&P would consider raising the ratings one notch if the company continues to execute on a growth and funding strategy that improves its tenant diversification, while maintaining adequate rent coverage cushion, operate with FCC near the mid-to- high end of S&P's forecast range, and preserves its currently adequate liquidity. RATING LIST Sabra Health Care REIT Inc. Corporate credit rating B+/Stable/-- RATING ASSIGNED Sabra Health Care REIT Inc. $50 mil Series A preferred stock due 2018 CCC+ SENTINEL MANAGEMENT: Allocation of Settlement Proceeds Upheld ------------------------------------------------------------- PENSON GHCO n/k/a PENSON FUTURE and PENSON FINANCIAL FUTURES, INC., et al., Appellants, v. FREDERICK J. GREDE, not individually but as Liquidation Trustee of the Sentinel Liquidation Trust, Appellee, Nos. 12-CV-06388 (N.D. Ill.), seeks to overturn the Bankruptcy Court's approval of the Liquidation Trustee's allocation of certain settlement proceeds and related litigation expenses among two creditor groups. Penson seeks to overturn the Bankruptcy Court's June 20, 2012 Order Approving Allocation of Settlement Proceeds. Sentinel, a futures commission merchant and investment advisor, filed a voluntary Chapter 11 petition on Aug. 17, 2007. Earlier that day, Sentinel sold most of the securities it held on behalf of the so-called Seg 1 Customers -- a group of Sentinel customer accounts that included Penson et al. -- to Citadel Equity Fund and Citadel Limited Partnership for approximately $318 million. On Aug. 28, 2007, the Bankruptcy Court approved the appointment of Mr. Grede to serve as Sentinel's Chapter 11 trustee. Mr. Grede and the Official Committee of Unsecured Creditors proposed a plan of liquidation, which the Bankruptcy Court confirmed on Dec. 15, 2008. The Plan created the Liquidation Trust to pursue the claims and causes of action belonging to Sentinel's bankruptcy estate and to make distributions to creditors. The Plan also created a distinct tranche of the Liquidation Trust -- Tranche P -- for personal causes of action that Sentinel customers had against third parties. The Plan and the agreement creating the Liquidation Trust entitled these assigning customers to proceeds of any Non-Estate Claims, distributed to them on a pro rata basis. The Plan also provided that Sentinel's former customers and other general secured creditors would receive proceeds from Sentinel's liquidation of its estate assets and litigation. Under the Plan, customers who had received a distribution of the Citadel Proceeds, such as Seg 1 Customers, would not receive any additional distributions until those customers and creditors who did not receive such a distribution -- NonCitadel Beneficiary Customers -- received a percentage distribution equal to the distribution that the Seg 1 Customers and others previously had received, including the distribution of the Citadel Proceeds. The Trustee now serves as the trustee for this Liquidation Trust, which includes the claims assigned to Tranche-P. According to the Liquidation Trust Agreement, in the event the Trustee compromises or otherwise settles both an Estate Claim and a Non-Estate claim against the same defendant or group of defendants, the Liquidation Trustee "'in consultation with the Liquidation Trust Committee, in his good faith judgment based upon the merits of the respective claims, shall allocate a portion of such proceeds to Tranche-P on account of the Tranche-P Electors' Non-Estate Claims' and must seek Court approval of that allocation." According to Penson et al., "[e]very dollar of recoveries allocated to Tranche P and every dollar of expenses paid by the Liquidation Trust and not reimbursed to the Liquidation Trust from Tranche P's share of recoveries reduces the Percentage Recovery received by the NonCitadel Beneficiary Customers and non-customer creditors from the Liquidation Trust on account of their allowed claims, thereby reducing the Sec 1 Customers potential recovery from the Liquidation Trust and increasing their potential liability in Seg 1 Cases." In August 2011, the Trustee settled certain Estate Claims and Non- Estate Claims for $41,000,000, of which the Trustee received approximately $39,000,000 for distribution in accordance with the terms of the Plan and Trust Agreement. On Nov. 15, 2011, the Trustee filed a motion seeking the Bankruptcy Court's approval of his allocation of the Settlement Proceeds. The Trustee sought to allocate 60% of the Settlement Proceeds to the estate, and 40% to Tranche P. He also estimated that roughly $10 million in expenses should be apportioned to Tranche P based on the expenses that the Liquidation Trust had paid pursuing Non-Estate Claims on behalf of Tranche P. He also stated that he would reserve $2.5 million for future Tranche P litigation costs and expenses. Penson et al. believe that this allocation of expenses was insufficient as the Trustee "failed to properly allocate all expenses incurred by the Liquidation Trust pursuing Non-Estate Claims." Penson et al., therefore, objected to the approval of the Allocation Motion. The Bankruptcy Court, after considering the briefs of the parties and oral argument, overruled the objections and granted the Allocation Motion. Penson et al. elevated the matter to the District Court. In a March 12, 2013 Memorandum Opinion and Order available at http://is.gd/CUJ4dzfrom Leagle.com, District Judge Amy J. St. Eve affirmed the Bankruptcy Court order. According to Judge St. Eve, Penson et al. "simply cite to no specific evidence in the record that indicates that the Trustee acted inequitably and have not offered any reason why the Court should substitute its own judgement for the reasonable, informed judgment of the Bankruptcy Judge based on the evidence before it." The judge said Penson et al. "merely reiterate the same arguments, based on the presumption that the Trustee had an obligation to specifically allocate certain joint expenses to Tranche P prior to allocating settlements, which the Bankruptcy Court rejected. Based on the Appellants' failure to put forth any evidence undermining the Bankruptcy Court's finding, and the reasonable discretion the Trustee utilized in allocating the proceeds, the Court finds that the Bankruptcy Court did not clearly err by granting the Allocation Motion." The appellants also include IFX Markets, Inc., IPGL, Ltd., ABN AMRO Clearing Chicago LLC, Country Hedging, Inc., Crossland, LLC, Farr Financial Inc., Velocity Futures, LLC, FCStone LLC, Cadent Financial Services et al., Rand Financial Services, Inc., TradeMaven Clearing LLC, UBS Securities, LLC and American National Trading Corp., et al. Collectively, they are the Seg 1 Customers. About Sentinel Management Based in Northbrook, Illinois, Sentinel Management Group Inc. -- http://www.sentinelmgi.com/-- was a full service firm offering a variety of security solutions. The Company filed a voluntary Chapter 11 petition (Bankr. N.D. Ill. Case No. 07-14987) on Aug. 17, 2007. Ronald Barliant, Esq., Randall Klein, Esq., and Kathryn A. Pamenter, Esq., at Goldberg, Kohn, Bell & Black Rosenbloom & Moritz, Ltd., represented the Debtor. Lawyers at Quinn, Emanuel Urquhart Oliver & Hedges, LLP, represented the Official Committee of Unsecured Creditors. When the Debtor sought bankruptcy protection, it estimated assets and debts of more than $100 million. On Aug. 28, 2007, the Court approved Frederick Grede as the Debtor's Chapter 11 Trustee. Marc I. Fenton, Esq., at DLA Piper US LLP, and Vincent E. Lazar, Esq, at Jenner & Block LLP, represent the Chapter 11 Trustee. The Court confirmed the Fourth Amended Chapter 11 Plan of Liquidation for Sentinel on Dec. 15, 2008, which created a Liquidation Trust. The Plan became effective Dec. 17, 2008, and Mr. Grede was appointed Liquidation Trustee. SK FOODS: Court Denies Motion for Rehearing in "Nageley" Suit ------------------------------------------------------------- In the Chapter 11 case of SK Foods, L.P., Nageley, Meredith & Miller, Inc. filed a motion for rehearing or reconsideration of a ruling entered by the U.S. District Court for the Eastern District of California on December 21, 2012. Nageley presented three bases for rehearing or reconsideration: (1) The Court did not consider the meet and confer requirements of Local Rule 37-251; (2) Farella Braun + Martel LLP opposed the motion filed by Bradley D. Sharp, the Chapter 11 trustee, as an interested party at a time in which there was an on-going meet and confer duty; and (3) Nageley's actions were reasonable and the Court's award of sanctions was an abuse of discretion. Magistrate Judge Sheila K. Oberto denied Nageley's request, saying rehearing of the Court's Order is unwarranted and Nageley failed to submit an affidavit or brief with the requisite information. The case is NAGELEY, MEREDITH & MILLER, INC., Appellant, v. BRADLEY D. SHARP, CHAPTER 11 TRUSTEE, Appellee, Case No. 2:12-CV- 00940-JAM, No. 2:12-CV-00942-JAM., 2:12-CV-00943-JAM, (E.D. Cal.). A copy of the District Court's March 11, 2013 Order is available at http://is.gd/WxcyxOfrom Leagle.com. About SK Foods SK Foods LP ran a tomato processing facility. It filed for Chapter 11 bankruptcy protection after being dropped by its lending group. Creditors filed an involuntary Chapter 11 petition against SK Foods LP and affiliate RHM Supply/ Specialty Foods Inc. (Bankr. E.D. Cal. Case No. 09-29161) on May 8, 2009. SK Foods had said it was preparing to file a voluntary Chapter 11 petition when the creditors initiated the involuntary case. The Company later put itself into Chapter 11 and Bradley D. Sharp was appointed as Chapter 11 trustee. The Debtors were authorized on June 26, 2009, to sell the business for $39 million cash to a U.S. arm of Singapore food processor Olam International Ltd. The replacement cost for the assets is $139 million, according to Olam. As reported by the Troubled Company Reporter on Feb. 19, 2010, a federal grand jury returned a seven-count indictment charging Frederick Scott Salyer, former owner and CEO of SK Foods, with violations of the Racketeer Influenced and Corrupt Organizations Act, in connection with his direction of various schemes to defraud SK Foods' corporate customers through bribery and food misbranding and adulteration, and with wire fraud and obstruction of justice. Salyer supporters launched a Web site which can be accessed from two addresses: http://www.operationrottentomato.com/and http://www.scott-salyer.com/ SMART TECHNOLOGIES: High Business Risk Prompts Moody's 'Caa1' CFR ----------------------------------------------------------------- Moody's Investors Service assigned ratings to SMART Technologies Inc. including a Caa1 corporate family rating, Caa1-PD probability of default rating, and SGL-3 speculative-grade liquidity rating, and assigned a Caa1 rating to the proposed $250 million senior secured notes to be co-issued by SMART's subsidiaries, SMART Technologies ULC and SMART Technologies Finance Inc. SMART, ULC and Finance have been assigned stable outlooks. This is the first time Moody's has rated SMART. Net proceeds from the notes issue and $45 million of SMART's cash will be used to repay SMART's existing $289 million term loan. The notes will be guaranteed by SMART, and by ULC and Finance's material subsidiaries and will be secured by substantially all assets of the issuers and guarantors. Ratings Assigned: SMART Technologies Inc. Corporate Family Rating, Caa1 Probability of Default Rating, Caa1-PD Speculative Grade Liquidity Rating, SGL-3 SMART Technologies ULC and SMART Technologies Finance Inc. $250 million senior secured notes due March 2020, Caa1 (LGD4, 53%) Outlook: SMART Technologies Inc., SMART Technologies ULC and SMART Technologies Finance Inc. Assigned as Stable Ratings Rationale: SMART's Caa1 CFR primarily reflects high business risk resulting from its steeply declining revenue trend, meaningful dependence on budget-constrained education markets, competitive pressures from other technological products, and high leverage (estimated adjusted Debt/ EBITDA of about 6x for fiscal 2013). The rating also considers that large and better capitalized technology companies could enter the market and take away share. There is also a lack of forward visibility in the enterprise segment's growth prospects and Moody's is uncertain recent restructuring initiatives will have sustainable benefits. The rating benefits from the company's global leadership position in interactive displays, a large installed base which could provide replacement revenue opportunities, low penetration rates particularly in emerging markets and adequate liquidity position. Moody's expects revenue to continue declining by double digits and leverage to be maintained around 6x through the next 12 to 18 months. SMART's liquidity is adequate. The company has pro forma cash of about $100 million, full availability under its proposed $30 million revolving credit facility, and Moody's expects near breakeven annual free cash flow. Debt maturities are limited until March 2018 when the revolver matures. SMART will not have to comply with its lone leverage covenant unless revolver utilization exceeds a certain threshold, and Moody's expects a cushion of around 20% to that covenant. The outlook is stable because Moody's anticipates the company will have enough liquidity to sustain its operations through the next 12 to 18 months. The rating would likely be upgraded if SMART strengthens its liquidity profile, reverses the decline in revenue, expands EBITDA margin towards the mid-teens, and sustains adjusted Debt/ EBITDA below 5x and EBIT/ Interest above 1.5x. The rating could be downgraded if SMART's liquidity position worsens or if free cash flow generation remains negative for an extended period. The principal methodology used in this rating was Global Technology Hardware published in September 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. SMART Technologies Inc. provides interactive displays (whiteboards, flat panels and projectors) largely for the K-12 school market, but also for business use. Revenue for the twelve months ended December 31, 2012 was $632 million, with about 63% generated in North America, 28% in Europe, Middle East and Africa, and the remaining 9% from the rest of the world. SMART is headquartered in Calgary, Alberta, Canada. SMART TECHNOLOGIES: S&P Assigns 'B' CCR; Outlook Stable ------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating, and stable outlook, to Calgary, Alta- based interactive display provider SMART Technologies Inc. At the same time, S&P assigned its 'B' issue-level rating, and '3' recovery rating, to the company's proposed US$250 million senior secured notes. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery for creditors in the event of a default. The US$30 million revolving credit facility is not rated by Standard & Poor's. "The ratings on SMART reflect our assessment of the company's 'weak' business risk profile and our expectation that the company will maintain credit metrics consistent with a 'highly leveraged' financial risk profile over the next year," said Standard & Poor's credit analyst David Fisher. SMART is a leading provider of touch-sensitive interactive whiteboards (IWB) and related interactive display technologies, interactive response systems, and ancillary software, primarily targeting the kindergarten to grade-12 school education market. The company develops, assembles, and markets hardware and software products that enable group collaboration and interactive learning by both local and remote participants. SMART pioneered the IWB product category and remains a global market share leader according to Futuresource Consulting Ltd. For the 12 months ended Dec. 31, 2012, the company posted reported revenue and adjusted EBITDA of US$632 million and US$59 million, respectively. The stable outlook reflects S&P's expectation that recent restructuring actions should enable SMART to generate EBITDA in the range of US$50 million-US$60 million in the next 12 months, resulting in adjusted debt-to-EBITDA in the 5x-6x range. S&P could consider lowering the ratings if trailing 12 months EBITDA declines materially below US$50 million. S&P believes this could occur if school board funding constraints or pricing pressures increase more than S&P currently expects. While unlikely in the near term, S&P could consider raising the ratings if adjusted debt-to-EBITDA improved to the 3x-4x range on a sustained basis, driven by improved EBITDA generation and a lessened dependence on interactive whiteboards in the education market. SRAM LLC: Moody's Assigns B1 Rating to US$725MM Sr. Debt Facility ----------------------------------------------------------------- Moody's Investors Service revised SRAM LLC's rating outlook to stable from negative due to improvement in SRAM's operating performance and credit metrics and Moody's expectation that credit metrics will get better as the company repays debt with free cash flow. At the same, Moody's rated SRAM's $725 million senior secured credit facility B1 and affirmed the B1 Corporate Family Rating. The credit facility is comprised of a $675 million term loan and a $50 million undrawn revolver. Proceeds from the new credit facility will be used to repay the existing first lien term loan in full and all but $40 million of the second lien term loan. The SGL-3 speculative grade liquidity rating will be withdrawn as SRAM no longer files public financial statements. "The outlook change reflects the improvement in SRAM's credit metrics over the last year and our view that metrics will continue getting better over the next 12 -18 months," said Kevin Cassidy, Senior Credit Officer at Moody's Investors Service. For example, debt to EBITDA decreased by almost a turn since December 2011 to 5.4 times at December 2012 from 6.3 times and Moody's thinks it will approach 5 times in 2013 and be below 5 times in 2014. These ratings were assigned: $675 Million First Lien Term Loan at B1 (LGD 3, 45%); $50 Million First Lien Revolver at B1 (LGD 3, 45%); These ratings were affirmed/LGD assessments revised: Corporate Family Rating at B1; Probability of Default Rating at B1-PD; $185 Million Second Lien Term Loan at B3 (LGD 6, 91% from LGD 5, 86%); These ratings were affirmed, but will be withdrawn at close: $605 Million First Lien Term Loan at Ba3 (LGD 3, 35%); $50 Million First Lien Revolver at Ba3 (LGD 3, 35%); This rating is withdrawn: Speculative grade liquidity rating at SGL-3 Rating Rationale The B1 Corporate Family Rating reflects SRAM LLC's modest scale with about $630 million of revenue, narrow product focus in bicycle component parts, susceptibility to discretionary consumer spending, and weak (albeit improving) credit metrics with debt to EBITDA around 5.4 times. The ratings are also constrained by the company's history of shareholder friendly activities such as dividends and share repurchases as well as by the potential for future acquisitions. SRAM's rating benefits from its: 1) strong operating margins with EBITA to revenue around 20%; 2) adequate operating performance; 3) good market position within the bicycle component industry; 4) extensive product portfolio within the premium bicycle component segment; and 5) strong brand recognition among bike enthusiasts and dealers. The rating also benefits from the stable industry dynamics and the wide range of countries the company operates in, but it is constrained by SRAM's significant European revenue exposure at almost 50%. The stable outlook reflects Moody's view that SRAM's operating performance and credit metrics should continue improving in the near to midterm. The ratings are unlikely to be upgraded in the near term. This is because of SRAM's moderate size and soft credit metrics. SRAM's credit metrics need to be stronger than similarly rated consumer durables companies because of its size and history of aggressive financial policies. Key credit metrics necessary for an upgrade to be considered in the longer term would be debt to EBITDA approaching 3 times and interest coverage moving toward 4 times (currently 2.5 times). Ratings could be downgraded if credit metrics do not improve as expected. For example, Moody's could downgrade the ratings if debt to EBITDA is sustained above 5.5 times or if EBITA margins fall to the low double digits. Another aggressive debt funded shareholder return in the next few years could also spark a downgrade. The principal methodology used in rating SRAM was the Global Consumer Durables rating methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Chicago, Illinois, SRAM Corporation is a global manufacturer and designer of premium bicycle components. Revenue for the year ended December 31, 2012, approximated $630 million. SRAM LLC: S&P Assigns 'BB-' Rating to $725MM Sr. Secured Facility ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on U.S. bicycle components maker SRAM LLC to 'BB-' from 'B+'. The outlook is stable. At the same time, S&P assigned SRAM's proposed $725 million senior secured credit facility an issue-level rating of 'BB-', with a recovery rating of '4', indicating S&P's expectation for average (30% to 50%) recovery for lenders in the event of a payment default. The proposed facility consists of a $50 million senior secured revolving credit facility due 2018 and a $675 million senior secured term loan due 2020. S&P also raised its issue-level rating on the existing senior secured term loan to 'BB-'from 'B+'. However, S&P expects to withdraw this rating after the close of the proposed transaction. The recovery rating on this debt remains '4', indicating S&P's expectation for average (30% to 50%) recovery for lenders in the event of a payment default. The company expects to use proceeds from the proposed transaction to refinance the company's existing senior secured credit facilities and to repay $145 million of its second-lien credit facility. "The upgrade reflects our expectation that SRAM will generate modest EBITDA growth over the next two years," said Standard & Poor's credit analyst Michael Halchak. S&P expects that the company will utilize excess cash flow to repay debt such that leverage is in the mid-4x at the end of 2013 and falls to below 4x by the end of 2014. Additionally, the proposed transaction extends the maturity profile for the company and will likely cause a reduction in interest expense as the proceeds from the proposed offering repays higher coupon second- lien debt. The corporate credit rating on SRAM LLC reflects Standard & Poor's Ratings Services' assessment of the company's business risk profile as "weak," and of the company's financial risk profile as "aggressive," according to S&P's criteria. S&P's assessment of SRAM's business risk profile as weak reflects its position as the distant second largest operator in the highly competitive bicycle component market--a market in which participants need to perpetually innovate products to remain competitive, and the generally discretionary nature of its product offering. SRAM's strong EBITDA growth in recent years (the result of its ability to increase market share and contain costs) somewhat tempers those factors. S&P's assessment of SRAM's financial risk profile as aggressive reflects its relatively high debt leverage. Although S&P expects the company to use excess cash to repay debt at least until leverage reaches 3.5x, the company has previously exhibited shareholder-friendly actions such as its debt-financed dividend in 2008 and in the second quarter of 2011, when SRAM increased its leverage by refinancing its existing debt and acquiring all equity interests held by Trilantic Capital Partners. However, since the 2011 transaction, SRAM has utilized approximately $88 million of excess cash to repay debt. SUNTECH POWER: Maxim Predicts "Likely" Default, Bankruptcy ---------------------------------------------------------- Justin Doom, writing for Bloomberg News, reported that Suntech Power Holdings Co. (STP), the Chinese solar-panel maker that announced a forbearance agreement for $541 million in convertible debt due tomorrow, fell to a record low after Maxim Group LLP said the company is "likely" to default and enter bankruptcy. Bloomberg, on March 15, said Suntech tumbled 22 percent to 65 cents at the close in New York, the lowest since it began trading in December 2005. The bonds increased to 32 cents on the dollar. There is "no legal way around the March 15 maturity," Aaron Chew, a Maxim analyst based in New York, wrote in a note to investors, citing the bond prospectus, Bloomberg said. Bloomberg recalled that the company said in a statement March 11 that about 60 percent of the bondholders had agreed to wait until May 15 before exercising their rights. Such a delay isn't allowed "without the consent of the holders of each outstanding note affected," according to the prospectus, Bloomberg noted. Some of the remaining 40 percent of bondholders said they weren't contacted by the Wuxi, China-based company about a forbearance and want to be paid on schedule. A default would be the first for a bond issued by a company in mainland China, according to Bloomberg. Suntech, the largest solar panel maker in 2011, has reported losses for the past two years and had about $2 billion of debt as of the end of August, according to a bondholder presentation in November filed with the Securities and Exchange Commission. If Suntech is taken over by the local Wuxi government, such a bailout is "likely to be targeted only at local employment and bank debt" and will come "at the expense of stock and bond holders," Chew wrote, Bloomberg related. He rates Suntech a sell, with a 12-month price target of $0. SUNTECH POWER: Misses Payment on 3% Convertible Senior Notes ------------------------------------------------------------ Suntech Power Holdings Co., Ltd., on March 15, 2013, did not make a required payment due under its 3.00% Convertible Senior Notes Due 2013. The Notes matured on March 15, 2013, and as of that date an aggregate principal amount of US$541 million of the Notes remained outstanding. On March 11, Suntech said it has entered into a forbearance agreement with holders of more than 60% of its 3% Convertible Notes, for which a principal payment of US$541 million is due March 15, 2013. Under the forbearance agreement, in the event the Company failed to make payments due under the Notes on March 15, the signing bondholders agree not to exercise their rights under the Notes and the related indenture until May 15, subject to certain market-standard early termination events. Suntech said the forbearance agreement will enable the Company to continue to work with holders of the Notes with a view to achieving a consensual restructuring. David King, Suntech's CEO, said, "The forbearance agreement demonstrates bondholders' support for Suntech and provides an excellent platform to further discussions towards a mutually agreeable restructuring of the Notes. We are making progress and are working to find a resolution soon. At the same time, we are continuing our cost and operational review to further improve our efficiency." Cassandra Sweet and Kathy Chu, writing for The Wall Street Journal, said it wasn't clear what the Chinese solar-panel company's plans were for repaying investors. A Suntech spokesman declined to comment. On March 14, Suntech said it has been contacted by the New York Stock Exchange, Inc. regarding that day's unusual trading activity relating to its American depositary shares. "Management of the Company is not aware of undisclosed events that triggered such trading activity. The Company is aware of recent market rumors and third party reports regarding the Company's financial position and other matters," according to the Company's regulatory statement. Early this month, Susan Wang was appointed chairwoman of the Company's board of directors, effective March 4. A director of Suntech since April 2009, Ms. Wang replaced Dr. Zhengrong Shi, who will remain a director of Suntech. "I'm pleased to have been elected chairwoman of Suntech's Board of Directors," said Ms. Wang. "Suntech's board and management team are focused on resolving critical capital structure initiatives and charting Suntech's path forward as a leading supplier of solar products." Ms. Wang formerly served as the Executive Vice President of Corporate Development and Chief Financial Officer for Solectron Corporation, a worldwide provider of electronics manufacturing services, where she worked from 1984 until 2002 and during which she helped to guide Solectron's revenue growth from $40 million in 1984 to over $14 billion in 2002. Prior to Solectron, Ms. Wang held financial and managerial positions with Xerox Corporation and Westvaco Corporation. About Suntech Wuxi, China-based Suntech Power Holdings Co., Ltd. (NYSE: STP) produces solar products for residential, commercial, industrial, and utility applications. With regional headquarters in China, Switzerland, and the United States, and gigawatt-scale manufacturing worldwide, Suntech has delivered more than 25,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. T SORRENTO: Stays in Ch 11; Must File & Confirm Plan by May 8 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has denied the motion of U.S. Trustee William T. Neary to dismiss or to convert T Sorrento, Inc.'s Chapter 11 case to a liquidation under Chapter 7. The Court also denied secured lender RMR Investments Inc.'s motion to lift the automatic stay. The Court ordered that the Debtor file and confirm a Chapter 11 Plan by May 8, 2013. If the Debtor fails to confirm a Chapter 11 Plan by this date, the Court reserves the right to grant the relief requested in the motion to dismiss and the motion to lift automatic stay upon subsequent request by the U.S. Trustee or RMR. As reported by the Troubled Company Reporter on Feb. 12, 2013, the U.S. Trustee sought the dismissal of the Debtor's case, saying that the Debtor's case involves undeveloped real property with no activity for eight months and that there has been no activity in the case. RMR sought relief from the automatic stay to foreclose on the Debtor's property, claiming that the Debtor has no equity in the properties, as the value of the properties is significantly less than the amount RMR is owed under the loan documents. The Debtor said in a filing dated Dec. 17, 202, that it had a significant contract for the sale of one of its parcels that could have satisfied the majority of the direct uncontested debt alleged by RMR. According to the Debtor, RMR supported this sale and the parties had a general agreement and understanding that they would allow the sale to play out before taking substantive action against the other in the case. The sale terminated on Nov. 14, 2012, after the buyer was unable to complete a final checklist item. "Following the termination of the contract, the counsel for the Debtor and RMR have been in consistent contact on another possible sale opportunity and overall workout. The parties have been unable to reach an agreement to date and only recently did RMR take any adverse steps in this case. As a result of the recent developments on the pending sale and RMR's position with respect to lift stay, the Debtor will be filing a plan and has a reasonable likelihood of confirming the plan within a reasonable period of time," the Debtor stated. The Debtor admitted that it does not have an ongoing business operation and resulting figures that would be reflected on the operating reports. The Debtor denied that there has been no activity during this case. The Debtor also denied having been in Chapter 11 for eight months with no activity. The Debtor said, "There is no substantial or continuing loss to the property in this case -- it is undeveloped land and the Debtor has escrowed 2012 property taxes with its lender. Additionally, to the extent cause can be shown, the Debtor will cure any acts or omissions within a reasonable period of time and will show a reasonable likelihood of confirming a plan within a reasonable period of time. About T Sorrento Clark, Nevada-based T Sorrento, Inc., is a wholly owned subsidiary of Transcontinental Realty Investors, Inc., a Nevada corporation. T Sorrento filed for a Chapter 11 petition (Bankr. D. Nev. Case No. 12-13907) in Las Vegas on April 2, 2012. At the behest of RMR Investments, Inc., the Nevada Bankruptcy Court transferred the venue of the case to the Northern District of Texas, Dallas Division, as the Debtor's principal office and principal place of business are located in Dallas and the mailing address for each of the Debtor's officers is also located in Dallas, Texas. The case was transferred to the Northern District of Texas by a June 27, 2012 court order. Dallas Bankruptcy Judge Barbara J. Houser oversees the case. T Sorrento disclosed assets of $17.4 million and debts of $5.4 million in its schedules. The Debtor's Schedule A states it owns six lots (about 30 acres) at "Mira Lago" in Farmers Branch, two lots (24 acres) at Valley Branch Circle in Farmers Branch, 5.7 acres in McKinney and less than an acre in Irving. The total value of the real property is stated as $17,442,754. The Debtor has no personal property. The Debtor disclosed it has secured debt held by two entities totaling $5,121,368. Property taxes owed total $90,000. Six unsecured creditors are owed a total of $235,203. Lender RMR Investments is represented by Mark E. Andrews, Esq., and Stephen K. Lecholop II, Esq., at Cox Smith Matthews Incorporated. TG INVESTMENT: Case Summary & 2 Unsecured Creditors --------------------------------------------------- Debtor: TG Investment Property, LLC 2300 Bushwood Drive Elgin, IL 60124 Bankruptcy Case No.: 13-09937 Chapter 11 Petition Date: March 13, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Timothy A. Barnes Debtor's Counsel: Timothy C. Culbertson, Esq. LAW OFFICES OF TIMOTHY C. CULBERTSON 1107 Lincoln Ave. Fox River Grove, IL 60021 Tel: (847) 913-5945 Fax: (847) 574-8220 E-mail: tcculb@yahoo.com Estimated Assets: $1,000,001 to $100,000,000 Estimated Debts: $1,000,001 to $100,000,000 A copy of the Company's list of its two unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ilnb13-09937.pdf The petition was signed by Chris Giotakis, managing member. THOR INDUSTRIES: Tennessee State Bank Supplements Stay Motion ------------------------------------------------------------- Tennessee State Bank filed with the U.S. Bankruptcy Court for the Eastern District of Tennessee a supplement to its motion for relief of the automatic stay in the Chapter 11 cases of Thor Industries, LLC. On Aug. 17, 2012, TSB requested the Court to grant stay relief to permit it to enforce its interests under a certain Deed of Trust and other security instruments. In the supplemental motion, among other things: 1. TSB represents that as of Aug. 16, 2012, the amount owing on the Thor Note is $8,606,673. As of Jan. 10, 2013, the indebtedness has increased to a total of $8,869,537, including $100,626 for professional fees and expenses through Dec. 12, 2012. The daily interest accrual is $1,360. 2. TSB also represents the amount owing on the Wilrite Note is $389,359 as of Aug. 16, 2012. As of Jan. 10, 2013, the indebtedness has increased to $399,052. The daily interest accrual is $62. 3. The Debtor and TSB appeared before the Court on Sept. 17, 2012, for the trial of the motion, but the parties negotiated for several hours instead of proceeding with the contested hearing. Six weeks later, the Debtor and TSB reached an agreement on several issues pertaining to the motion and other pending motions, but the parties disagreed on an unanticipated issue. About Thor Industries Lake City, Tennessee-based Thor Industries, LLC, filed a Chapter 11 petition (Bankr. E.D. Tenn. Case No. 12-50625) in Greenville on March 30, 2012. The Debtor disclosed $11.97 million in assets and $10.0 million in liabilities as of the Chapter 11 filing. The Debtor owns the property in Mountain Lake Marina & RV Resort in Campground Road, Lake City, Tennessee, worth $11 million and securing an $8.52 million debt. The Debtor also owns a property Hickory Bluff Marina, in Camden County, Georgia, worth $875,000 and securing a $375,000 loan. Judge Marcia Phillips Parsons oversees the case. Dean B. Farmer, Esq., at Hodges, Doughty & Carson PLLC represents the Debtor in its restructuring efforts. The petition was signed by R. Steven Williams, Sr., chief manager. Samuel K. Crocker, U.S. Trustee for Region 8, was unable to form a committee of unsecured creditors because there were an insufficient number of unsecured creditors interested in forming a committee. TRIANGLE MAINTENANCE: Ct. Sides With Defendant in Suit vs. Liberty ------------------------------------------------------------------ Panola Construction Company entered into a contract with Mississippi State University for the renovation of Spencer Track located in Starkville, Mississippi. Panola then entered into a subcontract with Triangle Maintenance Service LLC, a limited liability company doing business in Lowndes County, Mississippi. In accordance with Section 31-5-3 et seq., of the Mississippi Code, Panola, as principal on a construction project with a state entity, entered into a bonding contract with Liberty Mutual Insurance Company whereby Liberty acted as a surety for construction on the Project. When Panola later failed to pay Triangle Maintenance, the latter sought to collect under the bond. Triangle Maintenance filed for Chapter 11 on Nov. 3, 2011. On Feb. 17, 2012, the Debtor filed the lawsuit TRIANGLE MAINTENANCE SERVICE, LLC., Plaintiff, v. LIBERTY MUTUAL INSURANCE COMPANY Defendant, Adv. Proc. No. 12-01019, seeking payment under the bond and alleging that it is owed $13,150 by Panola for its work on the Project. On Dec. 13, 2012, Liberty Mutual filed a motion for summary judgment. Triangle Maintenance filed a response on Jan. 24, 2013. The Court must decide whether the Complaint was filed after the statute of limitations had run, and therefore, whether Liberty Mutual's Motion for Summary Judgment is due to be granted. The sole factual dispute is whether the last date Triangle Maintenance performed labor was Feb. 8, 2011, or Feb. 18, 2011. Judge Jason D. Woodard of the U.S. Bankruptcy Court for the Northern District of Mississippi ruled that the last date on which Triangle performed labor or supplied materials to Panola on the Project was Feb. 8, 2011. "Despite casting the most generously favorable light on the evidence and pleadings of Plaintiff, this Court concludes that there is a dearth of proper evidence which might support denying Defendant's Motion. As the last day of work was performed on February 8, 2011, and Plaintiff did not file its Complaint until February 17, 2012, the Complaint was filed outside the statute of limitations. Thus, there is no genuine issue of material fact as to the threshold statute of limitations issue, and Defendant is entitled to a judgment as a matter of law," Judge Woodward concluded. "Based on these findings and conclusions, summary judgment for Defendant based on the statute of limitations is appropriate in this case," he added. A copy of the Bankruptcy Court's March 12, 2013 Memorandum Opinion is available at http://is.gd/gMg3IBfrom Leagle.com. About Triangle Maintenance Triangle Maintenance Service, LLC filed for Chapter 11 (Bankr. N.D. Miss. Case No. 11-15142) on Nov. 3, 2011. Triangle Maintenance estimated its assets and debts at $1 million to $10 million as of the Petition Date. Craig M. Geno, Esq., of Harris Jernigan & Geno, PLLC serves as its counsel. TRIBUNE CO: Trustee Wins Control of $46MM Clawback Suits -----------------------------------------=-------------- Jamie Santo of BankruptcyLaw360 reported that Tribune Co.'s litigation trustee on Thursday won control of clawback suits originally launched by the media giant's now-disbanded creditors committee in an attempt to recover $46 million in allegedly preferential payments made to 18 terminated Tribune executives. The report related that rejecting objections from Tribune and the targeted executives, U.S. Bankruptcy Judge Kevin J. Carey approved trustee Marc S. Kirschner's motion to replace the committee as plaintiff in the 18 avoidance actions, whose ownership had been at issue because of a debatable definition in the company's confirmed Chapter 11 plan. About Tribune Co. Headquartered in Chicago, Illinois, Tribune Co. -- http://www.tribune.com/-- is a media company, operating businesses in publishing, interactive and broadcasting, including ten daily newspapers and commuter tabloids, 23 television stations, WGN America, WGN-AM and the Chicago Cubs baseball team. The Company and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors have $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP serve as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP is the Committee's financial advisor. Landis Rath Moelis & Company serves as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represents the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups have delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. The bankruptcy court has scheduled a May 16 hearing on Tribune's plan. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending four years of reorganization. The reorganization allowed a group of banks and hedge funds, including Oaktree Capital Management and JPMorgan Chase & Co., to take over the media company. TRINITY COAL: Seeks Exemption From Mining Regulations ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the involuntary bankruptcy filed against Trinity Coal Corp. by three lenders will give the bankruptcy judge in Lexington, Kentucky, a chance to decide whether coal mines in Chapter 11 can be exempted from state regulations. The report relates that with support from the banks, Trinity filed papers seeking appointment of a chief restructuring officer. One phrase in the request stuck in the craw of West Virginia mine regulators. They objected to a provision in the proposed retention under which the CRO won't be required to register with the state as an officer of a coal-mine operator. Under regulations, the state has the power to ban someone from service with a coal-mine operator. West Virginia authorities speculate that the company or the proposed CRO are concerned that the restructuring officer will be banned from the industry on account of serving on behalf of Trinity. Lawyers for the state contend that a federal court has no power to exempt a bankrupt company from compliance with state regulations protecting health and safety. The bankruptcy judge will consider the issue at an April 2 hearing. About Trinity Coal Trinity Coal Corp. is a coal mining company that owns coal deposits located in the Appalachian region of the eastern United States, specifically, in Breathitt, Floyd, Knott Magoffin, and Perry Counties in eastern Kentucky and in Boone, Fayette, Mingo, McDowell and Wyoming Counties in West Virginia. Trinity's coal mining operations are organized into six distinct coal mining complexes. Three complexes are located in Kentucky and are referred to as Prater Branch Resources, Little Elk Mining and Levisa Fork. The Kentucky Operations produced compliance and low sulfur steam coal. Three complexes are located in West Virginia and are referred to as Deep Water Resources, North Springs Resources and Falcon Resources. Trinity is a wholly owned subsidiary of privately held multinational conglomerate Essar Global Limited. Credit Agricole Corporate & Investment Bank, ING Capital LLC and Natixis, New York Branch filed an involuntary petition for relief under Chapter 11 against Trinity Coal Corporation and 15 affiliates (Bankr. E.D. Ky. Lead Case No. 13-50364). The three entities say they are owed a total of $104 million on account loans provided to Trinity. On Feb. 14, 2013, Austin Powder Company, Whayne Supply Company and Cecil I. Walker Machinery Co. filed an involuntary petition for relief under Chapter 11 (Bankr. E.D. Ky. Case No. 13-50335) against Frasure Creek Mining, LLC. On Feb. 19, 2013, Credit Agricole, ING Capital and Natixis joined as petitioning creditors. TWIN RIVER: Moody's Rates New US$285MM Senior Bank Facility 'B1' ---------------------------------------------------------------- Moody's Investors Service upgraded Twin River Management Group, Inc.'s Corporate Family Rating to B1, Probability of Default Rating to B2-PD and senior secured term loan due 2015 to B1. Moody's also assigned B1 ratings to Twin River's proposed $285 million senior secured bank credit facility comprised of a $260 million term loan and a $25 million revolver, both expiring in 2018. The rating outlook is stable. The bank facilities will be guaranteed by Twin River's parent and all operating subsidiaries. Ratings of the new facilities are subject to final documentation. Ratings Rationale: The upgrade reflects Twin River's improved operating performance, higher earnings and voluntary debt reduction which have helped improve the company's leverage and coverage metrics. The upgrade also reflects the approval of table games for Twin River which will provide incremental earnings that Moody's expects the company will use to further reduce debt in anticipation of expanded gaming supply in Massachusetts, possibly as early as mid-2016. The proceeds of the proposed term loan will be used to refinance the $214 million currently outstanding under the company's term loan due 2015, pay a $50 million dividend and related fees and expenses. The proposed refinancing is expected to materially lower Twin River's cost of debt, extend its debt maturity profile by about three years, and facilitate further debt reduction. The company has repaid approximately $60 million since December 10, 2010. Twin River's debt/EBITDA was 2.9 times and EBIT/interest to 2.8 times for the LTM period ended September 30, 2012. Pro forma for the proposed transaction, debt/EBITDA is estimated to be 3.25 times and EBIT/cash interest is about 5.6 times. Twin River's stable rating outlook reflects Moody's expectation that Twin River will use at least 50% of excess free cash flow to reduce debt in order to maintain an appropriate capital structure in anticipation of challenging operating conditions once new competition opens in Massachusetts. Ratings upside is limited at this time given Twin River's small scale, limited diversification, and the expected opening of additional competition in Massachusetts. Ratings could improve if Twin River's operating performance shows further resilience to competition from Massachusetts and can maintain EBIT/interest expense of more than 2.5 times and debt/EBITDA below 3.5 times. Ratings could be lowered if debt/EBITDA rises and is sustained above 5.0 times for any reason or if monthly gaming revenue trends in Rhode Island deteriorate in advance of the opening of gaming in Massachusetts. Ratings upgraded: Corporate Family Rating to B1 from B2 Probability of Default Rating to B2-PD from B3-PD Ratings upgraded and to be withdrawn upon transaction closing: $214 million (outstanding) senior secured term loan due 2015 to B1 (LGD 3, 35%) from B2 (LGD 3, 35%) Ratings assigned: $260 million proposed senior secured term loan due 2018 at B1 (LGD 3, 35%) $25 million proposed senior secured revolver expiring 2018 at B1 (LGD 3, 35%) The principal methodology used in this rating was the Global Gaming 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. Twin River Management Group, Inc.'s (formerly known as BLB Management Services, Inc.) operating subsidiary, UTGR, Inc., owns and operates the Twin River casino located near Providence, Rhode Island. The Twin River casino operates approximately 4,750 video lottery terminals (VLTs) on behalf of the State of Rhode Island. Twin River is entitled to a 27.8% share of the VLT income. The company is private and does not disclose public financials. TWIN RIVER: S&P Affirms 'BB-' CCR & Rates $285MM Facility 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit rating, on Lincoln, R.I.-based Twin River Worldwide Holdings Inc. The outlook is stable. At the same time, S&P assigned Twin River Management Group Inc.'s proposed $285 million senior secured credit facility due 2018 S&P's 'BB-' issue-level rating (the same as the corporate credit rating), with a recovery rating of '3', indicating S&P's expectation for meaningful (50% to 70%) recovery in the event of a payment default. Parent Twin River Worldwide Holdings and its operating subsidiaries guarantee the facility. The company expects to use the proceeds from the issuance to refinance its current credit facility, pay a $50 million dividend to its owners, and pay fees and expenses related to the transaction. Standard & Poor's Ratings Services' corporate credit rating on Twin River Worldwide Holdings Inc. reflects S&P's assessment of the company's financial risk profile as "significant" and S&P's assessment of the company's business risk profile as "vulnerable," according to S&P's criteria. "Our assessment of the company's business risk profile as vulnerable reflects its reliance on a single property for cash flow, despite the property's favorable location; competitive dynamics in the region; and the stringent revenue allocation structure imposed by the State of Rhode Island on video lottery terminal (VLT) win, which limits profitability. Twin River's business risk profile also reflects our expectation for a substantial increase in competition located in Massachusetts starting in 2016, which we expect will result in a meaningful decline in the customer base and cash flow generation, despite some mitigation from the addition of table games at the property," S&P said. "Our assessment of Twin River's financial risk profile as significant reflects its strong liquidity profile and our expectation that credit measures will gradually improve over the next few years, because we expect the company to largely apply positive free operating cash flow (FOCF) to debt repayment. Under our long-term forecast, we believe leverage could increase to about 3x after incorporating a full year of Massachusetts gaming. Although credit measures weaken under this scenario, leverage remains within our 4x leverage threshold at the current rating," S&P added. Twin River's primary source of cash flow is its Twin River Casino in Lincoln, R.I., operated through the company's UTGR subsidiary. It is about six miles from Providence, and currently the closest gaming facility to the Boston market (about 50 miles away). Its closest competitor is Newport Grand Slots in Newport, R.I., featuring around 1,000 VLTs, compared with Twin River's approximately 4,700 machines. Additionally, the governor and legislature of Rhode Island recently approved a law authorizing table games at Twin River and Newport Grand, and in November 2012, voters approved the implementation of table games at Twin River. Twin River also competes with Foxwoods and Mohegan Sun, full-scale casino resorts in Connecticut. Despite significant competition in the Northeast gaming market, Twin River increased its market share after a meaningful renovation and expansion in 2007. In 2012, VLT win at Twin River grew approximately 3%; S&P estimates that the market as a whole declined approximately 5%. S&P estimates Twin River's market share for the same period was roughly 27%. S&P defines the market to include both properties in Rhode Island and Mohegan Sun and Foxwoods in Connecticut, and S&P relies on VLT revenue information reported by the Rhode Island Lottery and slot win data reported by the Connecticut Division of Special Revenue. UNITED AIRLINES: Ch. 11 Bars DHL Antitrust Suit, 2nd Circ. Told --------------------------------------------------------------- Dan Prochilo of BankruptcyLaw360 reported that United Airlines Inc. told the Second Circuit on Wednesday that a district court's decision to let DHL's cargo-price-fixing antitrust suit proceed sets a precedent that will undermine the purpose and effectiveness of bankruptcy protections. The report related that United, which filed for Chapter 11 in December 2002, told the appeals panel that delivery company DHL, a United customer and creditor, filed its antitrust suit too late. According to United, DHL's complaint dredges up allegations about United's pre-reorganization conduct that all became moot points, the report added. About UAL Corp. Based in Chicago, Illinois, UAL Corporation (NASDAQ: UAUA) -- http://www.united.com/-- is the holding company for United Airlines, Inc. United Airlines is the world's second largest air carrier. The airline flies to Brazil, Korea and Germany. The company filed for Chapter 11 protection on Dec. 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represented the Debtors in their restructuring efforts. Fruman Jacobson, Esq., at Sonnenschein Nath & Rosenthal LLP represented the Official Committee of Unsecured Creditors before the Committee was dissolved when the Debtors emerged from bankruptcy. Judge Eugene R. Wedoff confirmed the Debtors' Second Amended Plan on Jan. 20, 2006. The company emerged from bankruptcy protection on Feb. 1, 2006. US BENTONITE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: US Bentonite Processing 152 North Durbin Street, Suite 120 Casper, WY 82601 Bankruptcy Case No.: 13-20211 Chapter 11 Petition Date: March 14, 2013 Court: U.S. Bankruptcy Court District of Wyoming (Cheyenne) Judge: Peter J. McNiff Debtor's Counsel: Bradley T. Hunsicker, Esq. WINSHIP & WINSHIP, P.C. 100 N. Center, 6th Floor Casper, WY 82602 Tel: (307) 234-8991 Fax: (307) 234-1116 E-mail: brad@winshipandwinship.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Todd Druse, CFO. USA COMMERCIAL: Deloitte Liable for Execs' Fraud, 9th Circ. Told ---------------------------------------------------------------- Beth Winegarner of BankruptcyLaw360 reported that a Nevada federal court erred when it excused financial advisers Deloitte & Touche LLP from liability for breaching a contract and allowing insiders at USA Commercial Mortgage Co. to steal from the now-bankrupt mortgage company and defraud investors, the company argued Friday, urging the Ninth Circuit to revive the case. According to the report, the liquidating trust for USA Commercial -- which went bankrupt in 2006 -- argued that the misdeeds of mortgage-company CEO Thomas Hantges and President Joseph Milanowski could not be imputed to the company as a whole. About USA Commercial Based in Las Vegas, Nevada, USA Commercial Mortgage Company, dba USA Capital -- http://www.usacapitalcorp.com/-- provides more than $1 billion in short-term and permanent financing to homebuilders, commercial developers, apartment owners and institutions nationwide. The Company and its debtor-affiliates filed for chapter 11 protection on April 13, 2006 (Bankr. D. Nev. Case Nos. 06-10725 to 06-10729). Lenard E. Schwartzer, Esq., at Schwartzer & Mcpherson Law Firm, and Annette W. Jarvis, Esq., at Ray Quinney & Nebeker, P.C., represented the Debtors in their restructuring efforts. Thomas J. Allison, a senior managing director at Mesirow Financial Interim Management LLC, served as Chief Restructuring Officer for the Debtors. Susan M. Freeman, Esq., and Rob Charles, Esq., at Lewis and Roca LLP represented the Official Committee of Unsecured Creditors of USA Commercial Mortgage Company. Edward M. Burr at Sierra Consulting Group, LLC, provided financial advice to the Creditors Committee of USA Mortgage. Marc A. Levinson, Esq., and Jeffery D. Hermann, Esq., at Orrick, Herrington & Sutcliffe LLP, and Bob L. Olson, Esq., and Anne M. Loraditch, Esq., at Beckley Singleton, Chartered, represented the Official Committee of Equity Security Holders of USA Capital Diversified Trust Deed Fund, LLC. FTI Consulting, Inc., provided financial advice to the Equity Committee of USA Diversified. Candace C. Carlyon, Esq., and Shawn w. Miller, Esq., at Shea & Carlyon, Ltd., and Jeffrey H. Davidson, Esq., Frank A. Merola, Esq., and Eve H. Karasik, Esq., at Stutman, Treister & Glatt, PC, represented the Official Committee of Equity Security Holders of USA Capital First Trust Deed Fund, LLC. Matthew A. Kvarda, at Alvarez & Marsal, LLC, provided financial advise to the Equity Committee of USA First. When the Debtors filed for protection from their creditors, they estimated assets of more than $100 million and debts between $10 million and $50 million. The Debtor's Chapter 11 plan of reorganization was confirmed on Jan. 8, 2007. USACM Liquidating Trust was created pursuant to the Debtors' Third Amended Joint Chapter 11 Plan of Reorganization, which became effective March 12, 2007. Under the Joint Plan, the Trust obtained the right to enforce USACM's causes of action. VAUGHAN CO: Court Narrows Claims in Trustee's Suit vs. Wilson ------------------------------------------------------------- JUDITH A. WAGNER, Chapter 11 Trustee of the bankruptcy estate of the Vaughan Company, Realtors, Plaintiff, v. KATHLEEN WILSON, Defendant, Adv. Proc. No. 12-01142J (Bankr. N.M.), is one of many adversary proceedings initiated by the Trustee seeking to recover payments made by VCR to parties who invested in VCR's promissory note program. The Trustee asserts that VCR operated as a Ponzi scheme. She seeks to recover certain transfers made to Kathleen Wilson under several theories, including avoidance of transfers under the actual fraud and constructive fraud provisions of 11 U.S.C. Section 548 and applicable state law. Ms. Wilson has filed a motion to dismiss the complaint. After consideration of the Motion to Dismiss and the Trustee's response to the motion, Bankruptcy Judge Robert H. Jacobvitz finds that the Motion to Dismiss should be granted as to the Trustee's claims for turnover (Count 1) and for fraudulent transfers under state law based on insider status (Count 7); denied as to claims for actual and constructive fraud under the Bankruptcy Code and state law (Counts 2 through 6) and disallowance/equitable subordination of Ms. Wilson's claim (Count 9); and denied without prejudice as to claims for undisclosed fraudulent transfers under state law (Count 8). A copy of the Bankruptcy Court's March 11, 2013 Memorandum Opinion is available at http://is.gd/Alr1Zufrom Leagle.com. About Vaughan Company The Vaughan Company, Realtors, descended into bankruptcy after Douglas F. Vaughan, the former controlling shareholder, used the company to run a Ponzi scheme from 1993 until January 2010. Mr. Vaughan has entered into a plea agreement with the United States, admitting guilt to various securities violations. In March 2010, the Securities and Exchange Commission filed fraud charges against Mr. Vaughan, a New Mexico realtor, and obtained an emergency court order to halt his $80 million Ponzi scheme. The SEC's complaint, filed in federal court in Albuquerque, alleges Mr. Vaughan through his company issued promissory notes that he claimed would generate high fixed returns for investors. Mr. Vaughan also used another entity -- Vaughan Capital LLC -- to solicit investors for different types of real estate-related investments, such as buying residential properties at distressed prices. Mr. Vaughan relied entirely on new money raised from investors through both companies to fund Vaughan Company's ever- increasing obligations to note holders. The SEC also charged both of Mr. Vaughan's companies in the enforcement action. Neither Mr. Vaughan nor his companies are registered with the SEC to offer securities under the federal securities laws. The Vaughan Company Realtors filed for Chapter 11 protection on Feb. 22, 2010 (Bankr. N.M. Case No. 10-10759). George D. Giddens, Jr., Esq., represents the Debtor in its restructuring efforts. The Company estimated both assets and debts of between $1 million and $10 million. Judith A. Wagner was appointed as Chapter 11 Trustee. Mr. Vaughan filed a separate Chapter 11 petition (Bankr. D. N.M. Case No. 10-10763) on Feb. 22, 2010. The case was converted to a chapter 7 proceeding on May 20, 2010. Yvette Gonzales is the duly appointed trustee of the Chapter 7 estate. VITRO SAB: Settlement With Bondholders Approved in Dallas --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Vitro SAB received approval March 14 from the bankruptcy judge in Dallas for a settlement with dissenting U.S. bondholders. According to the report, the judge is allowing immediate implementation of the agreement where bondholders will receive cash equal to 85.25% of their principal holdings of $1.2 billion of bonds in default since May 2009. In addition, bondholders are being reimbursed $57.5 million for legal expenses from fighting in courts in the U.S. and Mexico. The settlement was the result of bondholders' victory in late November when the U.S. Court of Appeals in New Orleans ruled that Vitro's Mexican reorganization plan wasn't worthy of enforcement in the U.S. The report relates that the bondholders taking part in the settlement own about 60% of $1.2 billion in principal amount of defaulted bonds. The settlement calls for Fintech Investments Ltd. to purchase the bonds from the holders and reimburse the legal expenses. About Vitro SAB Headquartered in Monterrey, Mexico, Vitro, S.A.B. de C.V. (BMV: VITROA; NYSE: VTO), through its two subsidiaries, Vitro Envases Norteamerica, SA de C.V. and Vimexico, S.A. de C.V., is a global glass producer, serving the construction and automotive glass markets and glass containers needs of the food, beverage, wine, liquor, cosmetics and pharmaceutical industries. Vitro is the largest manufacturer of glass containers and flat glass in Mexico, with consolidated net sales in 2009 of MXN23,991 million (US$1.837 billion). Vitro defaulted on its debt in 2009, and sought to restructure around US$1.5 billion in debt, including US$1.2 billion in notes. Vitro launched an offer to buy back or swap US$1.2 billion in debt from bondholders. The tender offer would be consummated with a bankruptcy filing in Mexico and Chapter 15 filing in the United States. Vitro said noteholders would recover as much as 73% by exchanging existing debt for cash, new debt or convertible bonds. Concurso Mercantil & Chapter 15 Proceedings Vitro SAB on Dec. 13, 2010, filed its voluntary petition for a pre-packaged Concurso Plan in the Federal District Court for Civil and Labor Matters for the State of Nuevo Leon, commencing its voluntary concurso mercantil proceedings -- the Mexican equivalent of a prepackaged Chapter 11 reorganization. Vitro SAB also commenced parallel proceedings under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 10-16619) in Manhattan on Dec. 13, 2010, to seek U.S. recognition and deference to its bankruptcy proceedings in Mexico. Early in January 2011, the Mexican Court dismissed the Concurso Mercantil proceedings. But an appellate court in Mexico reinstated the reorganization in April 2011. Following the reinstatement, Vitro SAB on April 14, 2011, re-filed a petition for recognition of its Mexican reorganization in U.S. Bankruptcy Court in Manhattan (Bankr. S.D.N.Y. Case No. 11-11754). The Vitro parent received sufficient acceptances of its reorganization by using the US$1.9 billion in debt owing to subsidiaries to vote down opposition by bondholders. The holders of US$1.2 billion in defaulted bonds opposed the Mexican reorganization plan because shareholders could retain ownership while bondholders aren't being paid in full. Vitro announced in March 2012 that it has implemented the reorganization plan approved by a judge in Monterrey, Mexico. In the present Chapter 15 case, the Debtor seeks to block any creditor suits in the U.S. pending the reorganization in Mexico. Chapter 11 Proceedings A group of noteholders opposed the exchange -- namely Knighthead Master Fund, L.P., Lord Abbett Bond-Debenture Fund, Inc., Davidson Kempner Distressed Opportunities Fund LP, and Brookville Horizons Fund, L.P. Together, they held US$75 million, or approximately 6% of the outstanding bond debt. The Noteholder group commenced involuntary bankruptcy cases under Chapter 11 of the U.S. Bankruptcy Code against Vitro Asset Corp. (Bankr. N.D. Tex. Case No. 10-47470) and 15 other affiliates on Nov. 17, 2010. Vitro engaged Susman Godfrey, L.L.P. as U.S. special litigation counsel to analyze the potential rights that Vitro may exercise in the United States against the ad hoc group of dissident bondholders and its advisors. A larger group of noteholders, known as the Ad Hoc Group of Vitro Noteholders -- comprised of holders, or investment advisors to holders, which represent approximately US$650 million of the Senior Notes due 2012, 2013 and 2017 issued by Vitro -- was not among the Chapter 11 petitioners, although the group has expressed concerns over the exchange offer. The group says the exchange offer exposes Noteholders who consent to potential adverse consequences that have not been disclosed by Vitro. The group is represented by John Cunningham, Esq., and Richard Kebrdle, Esq. at White & Case LLP. A bankruptcy judge in Fort Worth, Texas, denied involuntary Chapter 11 petitions filed against four U.S. subsidiaries. On April 6, 2011, Vitro SAB agreed to put Vitro units -- Vitro America LLC and three other U.S. subsidiaries -- that were subject to the involuntary petitions into voluntary Chapter 11. The Texas Court on April 21 denied involuntary petitions against the eight U.S. subsidiaries that didn't consent to being in Chapter 11. Kurtzman Carson Consultants is the claims and notice agent to Vitro America, et al. Alvarez & Marsal North America LLC, is the Debtors' operations and financial advisor. The official committee of unsecured creditors appointed in the Chapter 11 cases of Vitro America, et al., has selected Sarah Link Schultz, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Dallas, Texas, and Michael S. Stamer, Esq., Abid Qureshi, Esq., and Alexis Freeman, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, as counsel. Blackstone Advisory Partners L.P. serves as financial advisor to the Committee. The U.S. Vitro companies sold their assets to American Glass Enterprises LLC, an affiliate of Sun Capital Partners Inc., for US$55 million. U.S. subsidiaries of Vitro SAB are having their cases converted to liquidations in Chapter 7, court records in January 2012 show. In December, the U.S. Trustee in Dallas filed a motion to convert the subsidiaries' cases to liquidations in Chapter 7. The Justice Department's bankruptcy watchdog said US$5.1 million in bills were run up in bankruptcy and hadn't been paid. On June 13, 2012, U.S. Bankruptcy Judge Harlin "Cooter" Hale in Dallas entered a ruling that precluded Vitro from enforcing its Mexican reorganization plan in the U.S. Vitro's appeal is pending. In November 2012, the U.S. Court of Appeals Judge Carolyn King ruled that Vitro SAB won't be permitted to enforce its bankruptcy reorganization plan in the U.S. She said that Vitro "has not shown that there exist truly unusual circumstances necessitating the release" preventing bondholders from suing subsidiaries. In early March 2013, Vitro announce a settlement that will end all litigation between Vitro and certain creditors in Mexico and the United States over the past two years. VWR FUNDING: Moody's Alters Outlook on 'B3' CFR to Stable --------------------------------------------------------- Moody's Investors Service affirmed the ratings of VWR Funding, Inc., including the B3 Corporate Family Rating and B3-PD Probability of Default Rating. Moody's also affirmed the SGL-2 Speculative Grade Liquidity Rating. Concurrently Moody's changed the outlook for VWR to stable from positive. The change in the rating outlook to stable reflects Moody's view that VWR's adjusted debt to EBITDA will remain in the 7.0 times range over the next 12-18 months. While Moody's expects the company to benefit from recent organizations changes and improvement in cash generation, deleveraging will be constrained by funding constraints by VWR's customers as well as less favorable terms in its contract with Merck KGaA beginning in April 2014. Ratings affirmed: Corporate Family Rating, B3 Probability of Default Rating, B3-PD Speculative Grade Liquidity Rating, SGL-2 $241 Revolving Credit Facility due 2016, B1 (LGD-2, 25%) $594 Million USD Senior Secured Term Loan B due 2017, B1 (LGD- 2, 25%) EUR581 Million Euro Senior Secured Term Loan B due 2017, B1 (LGD-2, 25%) $750 Million 7.25% Senior Notes due 2017, Caa1 (LGD-4, 69%) The rating outlook is stable. Ratings Rationale: VWR's B3 Corporate Family Rating reflects the company's high leverage and modest interest coverage and free cash flow relative to debt. The ratings are supported by VWR's good scale and market position as the #2 global life science distributor (behind Thermo Fisher, Baa1) as well as the stability of revenue and profitability. The company has demonstrated consistent revenue growth and improved profit margins driven both by organic growth and acquisitions. While the company's acquisition strategy has added to its global scale and geographic diversity, it increases the complexity of the organization and could pose some business practice compliance risk, particularly in emerging markets. Moody's could upgrade the ratings if VWR grows revenue and EBITDA such that its expect adjusted leverage will be sustained below 6.5 times and free cash flow will remain above 3% of total adjusted debt. If Moody's expects sustained negative free cash flow or leverage to rise above 8 times either due to deterioration in EBITDA, acquisitions or shareholder friendly payouts, it could downgrade the ratings. Further, material deterioration in liquidity including failure to extend its AR facility could also lead to pressure on the ratings. The principal methodology used in this rating was the Global Distribution & Supply Chain Services published in November 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. VWR Funding, Inc., headquartered in Radnor, Pennsylvania, is a global leader in the distribution of laboratory scientific supplies, including chemicals, glassware, equipment, instruments, protective clothing, and production supplies. Services include technical services, onsite storeroom services and laboratory and furniture design, supply and installation. The company serves customers in the pharmaceutical, biotechnology, medical device, chemical, technology, food processing and consumer product industries, as well as governmental agencies, universities and research institutes, and environmental organizations. For the twelve months ended December 31, 2012, VWR reported revenues of $4.1 billion. The company is privately owned, with majority ownership by Madison Dearborn. WILLIAMS LOVE: Settles Pfizer Case, Pays Bills & Emerges Ch. 11 --------------------------------------------------------------- Jeffrey Manning, writing for The Oregonian, reported that Williams Love O'Leary & Powers, in an unusual move, it has been able to pay its bills and emerge from Chapter 11 bankruptcy after setting a big case. The same prolonged legal battle with Pfizer Inc. that forced the firm to file for bankruptcy in 2011 also resulted in a settlement sufficient to pay its bills, although exact terms of the settlement reached last year are confidential, the report said. The Oregonion related that the case against the pharmaceutical giant concerned 500 women who said they developed cancer as a result of hormone replacement therapy. Pursuing Pfizer cost the law firm some $3 million. Attorney Albert Kennedy of Tonkon Torp represented the Williams firm and says emerging intact from a Chapter 11 filing with all bills paid is unheard of for a law firm, The Oregonian further related. "What usually happens is Chapter 11 is almost always used to facilitate an orderly liquidation of the firm," Mr. Kennedy told The Oregonian, praising the partners for their dedication to Williams Love. "The biggest single key," said Kennedy, "was the commitment of the partners to stay together and make this work." About Williams Love O'Leary & Powers Williams, Love, O'Leary & Powers, P.C. is a law firm specializing in the areas of medical and pharmaceutical products liability and mass tort litigation. Based in Portland, Oregon, Williams Love, fdba Williams, Dailey & O'Leary, P.C., dba WLOP and WDO.com, filed for Chapter 11 bankruptcy (Bankr. D. Ore. Case No. 11-37021) on Aug. 14, 2011. Judge Elizabeth L. Perris presides over the case. The Debtor disclosed $8,602,955 in assets and $6,734,830 in liabilities as of the Chapter 11 filing. The petition was signed by Michael L. Williams, its president. Albert N. Kennedy, Esq., and Michael W. Fletcher, Esq., at Tonkon Torp LLP, in Portland, Oregon, represent the Debtor as counsel. In September 2012, Judge Perris said she would confirm the third amended Chapter 11 plan of Williams Love. Sterling Savings Bank voted in favor of the Debtor's plan. * DSH Payment Reductions Pose Challenges to States and Hospitals ---------------------------------------------------------------- The upcoming reductions called for in the Affordable Care Act to federal disproportionate share hospital payments, estimated to rise to $17 billion annually by 2019, will lead to political and budgetary pressure on state governments as they seek to replace the lost funds says Moody's Investors Service. Hospitals providing high levels of charity care and with heavy Medicaid loads will be most vulnerable to budget shortfalls because of the DSH reductions. Pressures will be greatest in states that opt out of Medicaid expansion, but have a relatively high proportion of uninsured residents, says Moody's in the report "Reduction of Medicaid & Medicare Disproportionate Share Hospital Payments a Looming Challenge for States and Hospitals." The DSH reductions are expected to be covered by the lower cost of charity care, as the Affordable Care Act is aimed at lowering the ranks of the uninsured. However, states that opt out of the Medicaid expansion, as the June 2012 Supreme Court ruling on the Affordable Care Act allows, may face large uninsured populations at the same time that the DSH payments decline. "States that opt out of Medicaid expansion will have to choose whether to compensate for the shortfalls with their own funds or leave hospitals to absorb the costs, which will increase rating pressure on the hospitals," says Nicole Johnson, a Moody's Senior Vice President. "States that choose to fund uncompensated care costs themselves could face budgetary strain." States use federal Medicaid and Medicare DSH funding, to help hospitals with large numbers of Medicaid and low-income uninsured patients provide care. To date, governors in 14 states have recommended against Medicaid expansion, and the governors of three states are leaning in this direction. Seven of those 14 states already have above average levels of uninsured adults that would qualify for Medicaid under the Affordable Care Act. At the hospital level, large urban "safety net" hospitals that typically treat large populations of Medicaid and uninsured patients are most at risk from the DSH phase-out, says Moody's. The increased costs could lead to pressure on some hospital ratings unless they are offset by higher Medicaid and private insurance rates, lower numbers of uninsured patients, or backfill funding from states, says Moody's. Moody's notes that Medicaid DSH payments are scheduled to be restored in federal fiscal year 2022, but federal budget austerity could alter that, as actions to reduce the federal deficit have already pushed back increased DSH payments once. * Fraudulently Transferred Property Isn't Estate Property --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Denver ruled March 12 that fraudulently transferred property, until it's recovered, isn't property of the estate, and the automatic stay doesn't apply. The Court of Appeals weighed on one side of an issue that has divided federal appellate courts. The report recounts that the federal appeals court in New Orleans was the first to decide the issue in a 1983 opinion concluding that fraudulently transferred property is estate property even before recovery, thus invoking the automatic stay under Section 326(a) of the U.S. Bankruptcy Code prohibiting interference with a property interest. In 1992, the U.S. Court of Appeals in New York came down the other way, holding it isn't estate property until recovered. According to the report, writing for a three-judge panel in Denver, U.S. Circuit Judge Paul J. Kelly Jr. sided with the New York court. Following what he said he saw as the plain meaning of the statute, he held that unrecovered property isn't subject to the automatic stay because it's not yet estate property. He conceded that both sides present "plausible arguments regarding Congress's intent." Judge Kelly's opinion also addressed the mootness and appealability of an order that's equivalent to modification of the automatic stay. The case is Rajala v. Gardner, 12-03113, U.S. Court of Appeals for the 10th Circuit (Denver). * Student Loan Guarantee Amounts to Separate Obligation ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Cincinnati ruled on March 12 that if a student loan is discharged because the bank lender failed to answer, the default judgment isn't binding on the guarantor of the debt. The case is Alfes v. Educational Credit Management Corp. (In re Alfes), 11-02159, U.S. Court of Appeals for the Sixth Circuit (Cincinnati). * Valuation Date for Lien Strip Off Is Petition Date ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that on the question -- when an individual in Chapter 13 intends to "strip off" a second mortgage, should the home be valued as of the petition date, the date the plan is confirmed, or the date when the lawsuit with the junior mortgage lender is finished? -- U.S. District Judge James F. Holderman in Chicago concluded that the petition date is the proper valuation date. The case is Marsh v. U.S. Department of Housing and Urban Development (In re Marsh), 13-cv-00666, U.S. District Court, Northern District Illinois (Chicago). * Oversight of Student Loan Servicers to be Increased ----------------------------------------------------- The Blog of Legal Times reported that the Consumer Financial Protection Bureau moved to step up its supervision of the student loan market, proposing a rule that would bring the largest non- bank loan servicers under its direct oversight. Outstanding student loan debt in the United States tops $1 trillion -- second only to mortgages in household debt -- and delinquency rates have been rising, according to the BLT. The proposed rule, BLT related, would give the CFPB authority to directly supervise non-bank companies if they service more than 1 million student loans. Servicers collect monthly payments, maintain account records and answer questions from borrowers. The rule would cover seven companies that together service 49 million federal and private student loans -- about 70 percent of the market. "Our rule would bring new oversight to the student loan market and help ensure that tens of millions of borrowers are not treated unfairly by their servicers," said CFPB Director Richard Cordray in a conference call with reporters, BLT related. Cordray noted that a student loan is often a person's first major financial decision, and that borrowers have no control or choice over who services their debt. BLT, however, said the proposed rule has a loophole, one that's dictated by the Dodd-Frank Act. That is, the CFPB can supervise "larger participant" non-bank loan servicers, and also has the authority to supervise banks with more than $10 billion in assets, including taking a close look at their student loan portfolios but a bank with less than $10 billion in assets falls outside agency jurisdiction. The most notable may be Sallie Mae, which along with its subsidiaries manages or services $234 billion in education loans, according to the company's website, BLT said. However, Sallie Mae is also a bank, offering savings accounts, money market funds and certificates of deposits, and so is seemingly exempt from CFPB oversight. The agency will accept comments on its proposed rule for the next 60 days. * Senate Says JPMorgan Misled Regulators and Investors ------------------------------------------------------ Aruna Viswanatha and Emily Flitter, writing for Reuters, reported that JPMorgan Chase & Co (JPM.N) ignored risks, misled investors, fought with regulators and tried to work around rules as it dealt with mushrooming losses in a derivatives portfolio, a Senate report alleged in a damning review of the largest U.S. bank's management. Senior managers at the bank were told for months about the bad derivatives bets that ended up costing the bank more than $6.2 billion but did little to rein them in, according to the Permanent Subcommittee on Investigations report on Thursday, the Reuters report said. The Senate report came on the same day the U.S. Federal Reserve separately asked JPMorgan to improve its capital planning process as part of an annual "stress tests" of banks, according to Reuters. The barrage of bad news for JPMorgan, long seen as the safest and best-managed U.S. bank, could taint the reputation of the bank, as well as Chief Executive Jamie Dimon, Reuters said. Dimon has been one of the most outspoken critics of Washington's attempts to tightly regulate Wall Street after the 2007-2009 financial crisis. The report, Reuters added, also gives ammunition to advocates calling for stricter financial reform regulations. In particular, the 301-page Senate report will likely give new energy to regulators crafting the Volcker rule, which proposes to put limits on banks betting with their own funds. According to Reuters, committee sources said the losses from the trades appeared to total more than $6.2 billion but these sources said they could not determine how much because the trades originally made by the bank's Chief Investment Office were moved to other parts of the bank. * Fed Cites Weakness in Capital Reserves at Goldman, JPMorgan Hit ----------------------------------------------------------------- Michael R. Crittenden, Shayndi Raice and Suzanne Kapner, writing for The Wall Street Journal, reported that the the Federal Reserve Thursday dealt a blow to J.P. Morgan Chase & Co. and Goldman Sachs Group Inc., citing weaknesses in their "stress test" capital planning that could hamper their funneling more dividends and share buybacks to investors. The central bank also denied capital plans submitted by BB&T Corp. BBT and Ally Financial Inc. but the Fed at the same time cleared 14 other banks to boost payouts to shareholders, including Citigroup Inc. and Bank of America Corp., both of which in past years had capital requests rejected by the central bank, the WSJ report related. WSJ added that the Fed also approved a reduced repurchase plan from American Express Co., in the only instance of a bank winning approval for a plan resubmitted to the regulator under a new stress-test wrinkle this year. The Fed said the results show the banking system has grown stronger since the financial crisis, in large part because banks and securities firms are paying out less than they did before the 2008 meltdown, WSJ related. WSJ said the actions underscore the government's increased role in the banking sector since the financial crisis. Regulators over the last few years have pushed banks to build up capital buffers and improve risk management to more realistically account for potential losses. * 11th Cir. Appoints Cynthia Jackson as M.D. Fla. Bankruptcy Judge ------------------------------------------------------------------ The Eleventh Circuit Court of Appeals appointed Bankruptcy Judge Cynthia C. Jackson to a fourteen-year term of office in the Middle District of Florida, effective March 5, 2013 (vice, Briskman). Honorable Cynthia C. Jackson George C. Young Federal Building and Courthouse 400 w. Washington Street Suite 6400 Orland, FL 32801 Telephone: 407-237-8141 Term expiration: March 4, 2027 * BOND PRICING: For Week From March 11 to 15, 2013 -------------------------------------------------- Company Coupon Maturity Bid Price ------- ------ -------- --------- AES EASTERN ENER 9.00 1/2/2017 1.75 AES EASTERN ENER 9.67 1/2/2029 4.13 AGY HOLDING COR 11.00 11/15/2014 55.00 AHERN RENTALS 9.25 8/15/2013 71.00 ALION SCIENCE 10.25 2/1/2015 58.50 ATP OIL & GAS 11.88 5/1/2015 5.50 ATP OIL & GAS 11.88 5/1/2015 5.50 ATP OIL & GAS 11.88 5/1/2015 4.50 BUFFALO THUNDER 9.38 12/15/2014 31.00 CENGAGE LEARN 12.00 6/30/2019 29.50 CENGAGE LEARNING 13.75 7/15/2015 20.38 CHAMPION ENTERPR 2.75 11/1/2037 0.50 DOWNEY FINANCIAL 6.50 7/1/2014 64.25 DYN-RSTN/DNKM PT 7.67 11/8/2016 4.50 EASTMAN KODAK CO 7.00 4/1/2017 13.00 EASTMAN KODAK CO 7.25 11/15/2013 13.63 EASTMAN KODAK CO 9.20 6/1/2021 11.00 EASTMAN KODAK CO 9.95 7/1/2018 12.26 EDISON MISSION 7.50 6/15/2013 52.00 FIBERTOWER CORP 9.00 11/15/2012 3.00 FIBERTOWER CORP 9.00 1/1/2016 12.00 FULL GOSPEL FAM 8.40 6/17/2031 10.07 GEOKINETICS HLDG 9.75 12/15/2014 51.25 GEOKINETICS HLDG 9.75 12/15/2014 55.63 GLB AVTN HLDG IN 14.00 8/15/2013 21.00 GMX RESOURCES 4.50 5/1/2015 35.00 GMX RESOURCES 9.00 3/2/2018 20.00 HAWKER BEECHCRAF 8.50 4/1/2015 9.00 HAWKER BEECHCRAF 8.88 4/1/2015 16.00 HORIZON LINES 6.00 4/15/2017 30.00 INTL LEASE FIN 6.38 3/25/2013 100.04 JAMES RIVER COAL 3.13 3/15/2018 24.00 JAMES RIVER COAL 4.50 12/1/2015 30.00 LAS VEGAS MONO 5.50 7/15/2019 20.00 LBI MEDIA INC 8.50 8/1/2017 27.50 LEHMAN BROS HLDG 0.25 12/12/2013 22.00 LEHMAN BROS HLDG 0.25 1/26/2014 22.00 LEHMAN BROS HLDG 1.00 10/17/2013 22.00 LEHMAN BROS HLDG 1.00 3/29/2014 22.00 LEHMAN BROS HLDG 1.00 8/17/2014 22.00 LEHMAN BROS HLDG 1.00 8/17/2014 22.00 LEHMAN BROS HLDG 1.25 2/6/2014 22.00 MASHANTUCKET PEQ 8.50 11/15/2015 7.50 MASHANTUCKET PEQ 8.50 11/15/2015 7.50 MASHANTUCKET TRB 5.91 9/1/2021 7.50 MF GLOBAL LTD 9.00 6/20/2038 80.00 OVERSEAS SHIPHLD 8.75 12/1/2013 61.45 PENSON WORLDWIDE 12.50 5/15/2017 24.63 PENSON WORLDWIDE 12.50 5/15/2017 41.50 PLATINUM ENERGY 14.25 3/1/2015 51.50 PLATINUM ENERGY 14.25 3/1/2015 51.50 PMI CAPITAL I 8.31 2/1/2027 0.88 PMI GROUP INC 6.00 9/15/2016 32.25 POWERWAVE TECH 1.88 11/15/2024 2.38 POWERWAVE TECH 1.88 11/15/2024 2.38 POWERWAVE TECH 3.88 10/1/2027 2.38 POWERWAVE TECH 3.88 10/1/2027 3.15 RESIDENTIAL CAP 6.88 6/30/2015 29.50 RLGY-CALL03/13 12.38 4/15/2015 100.63 SAVIENT PHARMA 4.75 2/1/2018 27.00 SCHOOL SPECIALTY 3.75 11/30/2026 45.13 STATION CASINOS 6.63 3/15/2018 0.13 TERRESTAR NETWOR 6.50 6/15/2014 10.00 TEXAS COMP/TCEH 10.25 11/1/2015 10.50 TEXAS COMP/TCEH 10.25 11/1/2015 12.20 TEXAS COMP/TCEH 10.25 11/1/2015 10.75 TEXAS COMP/TCEH 10.50 11/1/2016 9.38 TEXAS COMP/TCEH 10.50 11/1/2016 15.88 TEXAS COMP/TCEH 15.00 4/1/2021 26.00 TEXAS COMP/TCEH 15.00 4/1/2021 25.00 THQ INC 5.00 8/15/2014 47.25 TL ACQUISITIONS 10.50 1/15/2015 20.38 TL ACQUISITIONS 10.50 1/15/2015 20.38 USEC INC 3.00 10/1/2014 36.19 VERSO PAPER 11.38 8/1/2016 55.90 WCI COMMUNITIES 4.00 8/5/2023 0.38 WCI COMMUNITIES 4.00 8/5/2023 0.38 WCI COMMUNITIES 6.63 3/15/2015 0.38 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Joseph Medel C. Martirez, Carmel Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2013. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***