/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130523.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, May 23, 2013, Vol. 17, No. 141 Headlines 1250 OCEANSIDE: Has Authority to Hire Rick Robinson as CRO 1250 OCEANSIDE: Seeks Extension of Lot Purchase Maturity Date 1250 OCEANSIDE: Has Authority to Employ Carlsmith Ball as Counsel 143-159 CLASSON: MRC Buys Defaulted Note on Condo 146-148 CORTLANDT: Voluntary Chapter 11 Case Summary 1ST GPS INC: Updated Case Summary & Unsecured Creditors 200 WEA: Case Summary & 6 Unsecured Creditors 56 WALKER: Case Summary & 13 Unsecured Creditors ACTIVECARE INC: Incurs $2.4 Million Net Loss in March 31 Quarter ADVANCED MEDICAL: Incurs $605,500 Net Loss in First Quarter AEON LLC: Appeals Court Says $3,173 Transfer to APM Was Fraudulent AEROGROW INTERNATIONAL: Justin Borus Held 18% Stake at May 31 AHERN RENTALS: Hearing Today on Payment of Commitment Fees AIR MEDICAL: Moody's Retains 'B2' CFR over Dividend Announcement AIR MEDICAL: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable ALPHA PARTNERS: Curtis Castillo Approved as Bankruptcy Counsel ALPHA PARTNERS: Frost Bank Wants Case Dismissal AMARU INC: To Restate Previously Filed Periodic Reports AMERICAN BUILDERS: S&P Assigns BB- CCR & Rates $1.25BB Loan BB+ AMERICAN PETRO-HUNTER: Delays Form 10-Q for First Quarter APPLIED DNA: Incurs $3.1 Million Net Loss in March 31 Quarter ASSURED PHARMACY: Incurs $1.1 Million Net Loss in 1st Quarter ATP OIL: Asset Sale Evidentiary Hearing Continued to June 4 ATP OIL: Statutory Lien Holders Withdraw Notices of Examination ATP OIL: Locke Lord Represents Creditors; SEACOR Substitutes Atty. ATWATER REDEVELOPMENT: Moody's Lowers Rating on Bonds to 'Ba2' AUTO-SWAGE PRODUCTS: Case Summary & 20 Largest Unsecured Creditors AXION INTERNATIONAL: Incurs $7.3MM Net Loss in First Quarter BIOFUELS POWER: Delays Form 10-Q for First Quarter BLUE COAT: Moody's Assigns 'B2' Rating to New $700MM Debt BLUE COAT: S&P Rates $25MM Revolver Debt & $675 Term Loan 'BB-' BLUE SPRINGS: Ford Motor Financing Increased to $1 Million BOMBARDIER INC: Moody's Says SkyWest Order is Credit Negative BOOMERANG SYSTEMS: Delays Form 10-Q for First Quarter CARESTREAM HEALTH: S&P Puts 'B+' CCR on CreditWatch Negative CASALE MARBLE: Case Summary & 20 Largest Unsecured Creditors CATASYS INC: Reports $2.6 Million Net Income in First Quarter CBS I LLC: May 29 Status Hearing on Plan Disclosures CENTENNIAL BEVERAGE: Selling Remaining Assets to Cheers Spirits CENTRAL ENERGY: Incurs $485,000 Net Loss in First Quarter CENTRAL EUROPEAN: Court OKs Hiring of Bankruptcy Professionals CENTRAL EUROPEAN: U.S. Trustee Unable to Form Creditors Committee CHARTIS EXCESS: U.S. Court Recognizes Irish Proceedings CHEYENNE HOTEL: Can Employ Hunter Realty as Listing Agent CHRYSLER GROUP: Two Summary Judgment Bids on Dealer LOIs Denied CINEMARK USA: Moody's Rates New $530MM Sr. Unsecured Notes 'B2' CINEMARK USA: S&P Assigns 'BB-' Rating to $530MM Senior Notes CJI LLC: Case Summary & 5 Largest Unsecured Creditors CLEAR CHANNEL: Commences Private Offer for 10.75% Senior Notes COATES INTERNATIONAL: Incurs $805,800 Net Loss in First Quarter COMMSCOPE HOLDING: Senior Unsecured Notes Get Moody's Caa1 Rating COMMUNICATION INTELLIGENCE: Incurs $1.2 Million Net Loss in Q1 COMMUNITY HOME: Court OKs Deal on Use of Cash Collateral COOPER-BOOTH: Succumbs to Ch. 11 After Cigarette Smuggling Probe COOPER-BOOTH: Taps Maschmeyer as Bankruptcy Counsel COOPER-BOOTH: Proposes ESBA as Financial Advisor CYCLONE POWER: Incurs $668,800 Net Loss in First Quarter DAIS ANALYTIC: Incurs $306,000 Net Loss in First Quarter DBSI INC: Goldsmith's Motions in Litigation Trustee's Suit Denied DERBY DEVELOPMENT: Court Says Architect's Mechanic Lien Not Valid DOLPHIN DIGITAL: Delays Form 10-Q for First Quarter DR TATTOFF: Incurs $1.2 Million Net Loss in First Quarter EARTHBOUND HOLDINGS: S&P Revises Outlook & Affirms 'B-' CCR ECO BUILDING: Delays Form 10-Q for First Quarter EGPI FIRECREEK: Delays First Quarter Form 10-Q for Review EPAZZ INC: Delays First Quarter Form 10-Q to Complete Review FLAT OUT: Authorized to Implement Employee Retention Program FISHER ISLAND: June 20 Hearing on Show Cause and Case Dismissal FOREVERGREEN WORLDWIDE: Delays Form 10-Q for First Quarter GABRIEL TECHNOLOGIES: Qualcomm Inc. Wants Case Converted to Ch.7 GATZ PROPERTIES: Long Island Golf Course Has $6MM Opening Bid GENELINK INC: Incurs $353,700 Net Loss in First Quarter GGW BRANDS: Trustee to Sue for Ownership of Girls Gone Wild Name GLOBE ENERGY: Moody's Assigns B2 Rating to New $350MM Term Loan GLOBE ENERGY: S&P Assigns 'B' CCR & Rates $350MM Loan Due 2019 'B' GOSPEL RESCUE: Ordered to File Affidavits on 5 Claim Objections GREEN EARTH: Incurs $2.2 Million Net Loss in March 31 Quarter HAMPTON CAPITAL: May 30 Hearing on Private Sale HEALTHWAREHOUSE.COM INC: Karen Singer Held 8.3% Stake at May 7 HEALTHWAREHOUSE.COM INC: Lloyd Miller Owned 8.3% Stake at May 7 HIGHWAY TECHNOLOGIES: Sale Falls Apart, Files Ch.11 to Liquidate HOLLYFRONTIER CORP: S&P Raises Corp. Credit Rating From 'BB+' HORNE INTERNATIONAL: Delays Q1 Form 10-Q, Expects $217,000 Loss HYPERTENSION DIAGNOSTICS: Had $628,500 Net Loss in March 31 Qtr. ICEWEB INC: Incurs $2.1 Million Net Loss in March 31 Quarter IEC ELECTRONICS: Gets NYSE MKT Listing Non-Compliance Notice IN PLAY: Claims Due June 10; No Official Committee Formed INERGETICS INC: Incurs $2 Million Net Loss in First Quarter INTELSAT JACKSON: S&P Assigns 'B' Rating to $2BB Senior Notes INTERNATIONAL LEASE: Fitch to Rate Senior Unsecured Notes 'BB' INTERNTAIONAL LEASE: Moody's Rates Floating Rate Notes 'Ba3' IZEA INC: Incurs $883,800 Net Loss in First Quarter J.C. PENNEY: Term Loan Upsize No Impact on Fitch's 'BB-' Rating J.C. PENNEY: $500MM Loan Increase No Impact on Moody's 'Caa1' CFR J.C. PENNEY: S&P Lowers Rating on Senior Secured Term Loan to 'B-' K-V PHARMACEUTICAL: Seeks More Time to Improve Plan Proposals KESTREL TECHNOLOGIES: RAPTr Sold for $1.5 Million Cash KIDSPEACE CORP: Nonprofit Files Ch. 11 to Restructure Bonds LA FRONTERA: S&P Assigns 'BB-' Rating to $1.15BB Term Loan B LAKELAND INDUSTRIES: In Financing Talks; Gets Nasdaq Notice LATTICE INC: Incurs $116,800 Net Loss in First Quarter LYON WORKSPACE: Creditors Have Until June 28 to File Claims MAJESTIC STAR: S Corp. Status Isn't Property for Bankr. Purposes MALUHIA DEVELOPMENT: U.S. Trustee Seeks Chapter 7 Conversion MIDSTATES PETROLEUM: S&P Affirms B- Rating to Sr. Unsecured Notes MMODAL INC: S&P Raises Corp. Credit Rating to 'B'; Outlook Stable MONTANA ELECTRIC: Cash Collateral Use Further Extended MONTANA ELECTRIC: Trustee Taps Eide Bailly as Accountants MOUNTAINEER GAS: Fitch Hikes Issuer Default Rating to 'BB+' NAMCO LLC: Plan Offers to Pay Creditors in Installments NEFF RENTAL: S&P Revises Outlook to Positive & Affirms 'B' CCR NNN 3500: U.S. Bank Balks at Bid for Aug. 27 Exclusivity Extension NORSE ENERGY: Land Owners Sue Over Force Majeure OVERLAND STORAGE: Business Combination with Tandberg Proposed PACIFIC THOMAS: Ch.11 Trustee Taps California Capital as Broker PACIFIC THOMAS: Ch.11 Trustee Hires DSI as Consultant PF CHANG: S&P Revises Outlook to Negative & Affirms 'B' CCR PICACHO HILLS: Receiver Directed to Complete Liquidation Sale PLC SYSTEMS: Incurs $7.8 Million Net Loss in First Quarter PWK TIMBERLAND: Files Schedules of Assets and Liabilities RAM OF EASTERN N.C.: No Creditors Committee Formed RAM OF EASTERN N.C.: Oliver Friesen Approved as Bankruptcy Counsel RAM OF EASTERN N.C.: Pittard Perry OK'd for Accounting Services READER'S DIGEST: Negotiates New Lease With Landlord REVEL AC: Completes Financial Restructuring; Exits Chapter 11 REVSTONE INDUSTRIES: Exclusive Plan Deadline Extended to July 31 ROTECH HEALTHCARE: To Continue Sale Process for Business SCHOOL SPECIALTY: Moody's Affirms 'B3' CFR; Outlook Negative SECUREALERT INC: Incurs $1.5 Million Net Loss in March 31 Qtr. SELWYN RESOURCES: Project Sale Gets OK; Prepares for Liquidation SILLER PARTNERSHIP: Texas Appeals Court Upholds Order in LPP Suit SPRINGLEAF FINANCE: Fitch to Rate New $250MM Unsecured Notes 'CCC' SUNRISE REAL ESTATE: Delays Form 10-Q for First Quarter SUNSTONE COMPONENTS: Has Interim Access to Cash SUNSTONE COMPONENTS: Meeting of Creditors Scheduled for June 17 T3 MOTION: Incurs $566,000 Net Loss in First Quarter TARGETED MEDICAL: Incurs $270,000 Net Loss in First Quarter TBSF2 LLC: Voluntary Chapter 11 Case Summary TELKONET INC: Incurs $411,800 Net Loss in First Quarter TEREX CORP: S&P Raises Senior Secured Notes Rating to 'BB+' THEA BOWMAN: S&P Lowers Rating on Revenue Bonds to 'BB-' THERMOENERGY CORP: Incurs $1.1 Million Net Loss in 1st Quarter TITAN PHARMACEUTICALS: Posts $6MM Net Income in First Quarter TPO HESS: Files Prepack for Quick Sale to Bang Printing TRANS ENERGY: Incurs $2.7 Million Net Loss in First Quarter TRANS-LUX CORP: Delays Form 10-Q for First Quarter UNIVERSAL BIOENERGY: Delays Q1 Form 10-Q for Business Matters UNIVERSAL HEALTH: Trustee Taps Kapila & Company as Accountants UNIVERSAL HEALTH: Trustee Taps Trenam Kemker as Special Counsel UNIVERSAL SOLAR: Delays Form 10-Q for First Quarter US AIRWAYS: Fitch Assigns 'B-' Rating to $400MM Unsecured Notes US AIRWAYS: S&P Assigns 'CCC+' Rating to Senior Unsecured Notes US FOODS: S&P Assigns 'B-' Rating to $2.1BB Sr. Secured Term Loan VALLEYCREST COMPANIES: Moody's Rates $265MM Term Loan 'B3' VANTAGE ONCOLOGY: Moody's Rates $250MM Sr. Secured Notes 'B2' VELATEL GLOBAL: Delays Form 10-Q for First Quarter VENTANA 20/20: Has Deal with East West; Case Dismissed VERMILLION INC: Incurs $2.5 Million Net Loss in First Quarter VINTAGE CONDOMINIUM: Condos, Bank in Fight for Control VUZIX CORP: Incurs $936,000 Net Loss in First Quarter WAVE SYSTEMS: Registers 1.8 Million Class A Shares with SEC WELCH ENTERPRISES: Bankruptcy Administrator Wants Case Dismissed WIRECO WORLDGROUP: S&P Puts 'B+' CCR on CreditWatch Negative WORLD SURVEILLANCE: Incurs $517,000 Net Loss in First Quarter * S&P Raises Rating on 3 Natural Gas Prepay Transactions * Settlements Prompt Moody's to Lift Ratings on MBIA Entities * Canadian Life Insurers Reap Rewards of Wealth Management Sales * ILR Applauds Passage of Asbestos Trust Transparency Bill * National Credit Default Rates Down in April 2013, Report Shows * Uptick in REIT Conversions Drive Concerns Over REIT Status * Recent Small-Dollar & Individual Chapter 11 Filings ********* 1250 OCEANSIDE: Has Authority to Hire Rick Robinson as CRO ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Hawaii authorized 1250 Oceanside Partners, et al., to employ G. Rick Robinson as chief restructuring officer for a limited period of six months from and after an order approving the employment application. Mr. Robinson will be paid $15,000 per month, plus general excise tax, and will be reimbursed for all travel and other necessary expenses. In the event an order confirming the Debtors' reorganization plan is entered during the six-month period of Mr. Robinson's retention, he will be paid a bonus of $25,000. About 1250 Oceanside Partners 1250 Oceanside Partners, Front Nine LLC, and Pacific Star Company LLC, owners of the 1,800-acre Hokuli'a luxury real estate development near Kona on the island of Hawaii, sought Chapter 11 protection (Bankr. D. Hawaii Lead Case No. 13-00353) on March 6, 2013, in Honolulu. The Debtors were formed by developer Lyle Anderson and were part of his development "empire", which included developments in Hawaii, Arizona, New Mexico and Scotland. The secured lender, Bank of Scotland, declared a default and obtained control of the Debtors in January 2008. Development of the property, which has 3.5 miles of waterfront on the Kona coast, stopped after the developers were declared in default under the loan. Oceanside and Front Nine own most of the land within the Hokuli'a project, which is the principal development. Pacific Star owns the land referred to as "Keopuka", near Hokuli'a. The Hokuli'a was to have 730 residential units, an 18-hole golf course, club and other amenities. The Debtors say their assets are worth $68.1 million while they are jointly liable to $625 million of debt to Sun Kona Finance LLC, which acquired the Hawaii loan from Bank of Scotland. 1250 OCEANSIDE: Seeks Extension of Lot Purchase Maturity Date ------------------------------------------------------------- 1250 Oceanside Partners is a Hawaii limited partnership which was formed to develop a luxury residential and recreational community located in Kona on the Island of Hawaii. Oceanside's principal development project is commonly known as Hokuli'a or the Hokuli'a Project. The Hokuli'a development includes an 18-hole golf course, which has been completed and is in operation, and related facilities, an approximately 140-acre shoreline park, a trail system, and approximately 665 single family residential and residential/agricultural lots, ranging in size from one to three acres. Subdivision approval of the initial phase of the Hokuli'a Project was obtained in 1999, and sales of lots commenced. Soon thereafter, Oceanside encountered various setbacks and complications, chief among which was a lawsuit filed in 2000 by certain individuals and a non-profit organization seeking to stop development of the project as planned. The plaintiffs in the lawsuit, known as the "Kelly Litigation," were successful, and, in September 2003, further development of the project was permanently enjoined. Pursuant to a settlement agreement with the plaintiffs, entered into in 2006, the injunction was lifted and development was allowed to proceed, but other events, including a separate lawsuit relating to a "bypass highway" that Oceanside was obligated to construct, a five-year economic recession, and an unexpectedly weak real estate market continued to frustrate Oceanside's development plans, and the project remains unfinished. Although Oceanside's development plans were significantly frustrated, over two hundred lots were sold to third-party purchasers. Many of the sales were financed through "carry back" (purchase money) notes and mortgages in favor of Oceanside. The Carryback Notes generally had 10 year terms with a 30-year amortization schedule. Oceanside pledged many (possibly all) of the Carryback Notes and Mortgages as they arose to Finova Capital Corporation to secure additional financing for the Hokuli'a Project. Pursuant to (i) a Loan and Security Agreement between Oceanside and Textron Financial Corporation, and (ii) a Release and Reconveyance and Assignment of Installment Notes and Mortgages between Oceanside, Textron, and the successor-in-interest of Finova Capital Corporation, both dated June 29, 2006, the security interests in the then-existing Carryback Notes and Mortgages were assigned to Textron, and Textron agreed to provide Oceanside with further financing secured by qualifying Carryback Notes and Mortgages arising thereafter. On June 26, 2008, Textron notified Oceanside of certain alleged events of default and declared the entire outstanding balance of the debt immediately due and payable. In January, 2013, Textron assigned all its interest in the pledged Carryback Notes and Mortgages to Sun Kona Finance II, LLC. Beginning no later than November, 2003, and continuing through 2012, Oceanside has approved various requests from lot buyers to extend note maturity dates. Lot buyers for whom extension requests have been granted must continue to make quarterly payments of principal and interest on the same 30-year amortization schedule as provided in the Carryback Notes, but the date of the final balloon payment was extended. Although those requests have in the past been conditioned upon a principal reduction payment from the lot owner, Oceanside seeks authority from the U.S. Bankruptcy Court for the District of Hawaii to grant extensions with or without requiring those payments, in its business discretion. Only five Carryback Note obligors are currently making payments. Of these five, one has a balloon payment coming due in June of this year, and three balloon payments will come due next year. An extension request is currently pending from Holua Kai, LLC, the owner of Lot 204. Accordingly, Oceanside seeks the Court's authority to grant the request by the owner of Lot 204. Furthermore, Oceanside requests that the Court enter an order authorizing it to grant extensions to other obligors on Carryback Notes on the same terms; namely, that any extension will be for no longer than one year at a time, will be conditioned upon the obligor's not commencing any action against Oceanside in connection with their lot purchase, and will be disclosed in Oceanside's monthly operating reports; and provided further that the lender to which the Carryback Notes have been pledged consents to the extension. A hearing on the request will be held on June 17, 2013, at 10:30 a.m. About 1250 Oceanside Partners 1250 Oceanside Partners, Front Nine LLC, and Pacific Star Company LLC, owners of the 1,800-acre Hokuli'a luxury real estate development near Kona on the island of Hawaii, sought Chapter 11 protection (Bankr. D. Hawaii Lead Case No. 13-00353) on March 6, 2013, in Honolulu. The Debtors were formed by developer Lyle Anderson and were part of his development "empire", which included developments in Hawaii, Arizona, New Mexico and Scotland. The secured lender, Bank of Scotland, declared a default and obtained control of the Debtors in January 2008. Development of the property, which has 3.5 miles of waterfront on the Kona coast, stopped after the developers were declared in default under the loan. Oceanside and Front Nine own most of the land within the Hokuli'a project, which is the principal development. Pacific Star owns the land referred to as "Keopuka", near Hokuli'a. The Hokuli'a was to have 730 residential units, an 18-hole golf course, club and other amenities. The Debtors say their assets are worth $68.1 million while they are jointly liable to $625 million of debt to Sun Kona Finance LLC, which acquired the Hawaii loan from Bank of Scotland. 1250 OCEANSIDE: Has Authority to Employ Carlsmith Ball as Counsel ----------------------------------------------------------------- 1250 Oceanside Partners, et al., sought and obtained authority from the U.S. Bankruptcy Court for the District of Hawaii to employ Carlsmith Ball, LLP, as special counsel, nunc pro tunc March 6, 2013. About 1250 Oceanside Partners 1250 Oceanside Partners, Front Nine LLC, and Pacific Star Company LLC, owners of the 1,800-acre Hokuli'a luxury real estate development near Kona on the island of Hawaii, sought Chapter 11 protection (Bankr. D. Hawaii Lead Case No. 13-00353) on March 6, 2013, in Honolulu. The Debtors were formed by developer Lyle Anderson and were part of his development "empire", which included developments in Hawaii, Arizona, New Mexico and Scotland. The secured lender, Bank of Scotland, declared a default and obtained control of the Debtors in January 2008. Development of the property, which has 3.5 miles of waterfront on the Kona coast, stopped after the developers were declared in default under the loan. Oceanside and Front Nine own most of the land within the Hokuli'a project, which is the principal development. Pacific Star owns the land referred to as "Keopuka", near Hokuli'a. The Hokuli'a was to have 730 residential units, an 18-hole golf course, club and other amenities. The Debtors say their assets are worth $68.1 million while they are jointly liable to $625 million of debt to Sun Kona Finance LLC, which acquired the Hawaii loan from Bank of Scotland. 143-159 CLASSON: MRC Buys Defaulted Note on Condo ------------------------------------------------- Madison Realty Capital (MRC), an institutionally backed commercial real estate investment firm and asset manager specializing in flexible debt and equity financing solutions for middle-market transactions throughout the United States, announced the closing of $13 million in financing for the third-party purchase of a defaulted note. The note, originated by Community Preservation Corporation (CPC) and carrying an outstanding principal balance of approximately $17 million, is secured by a condominium development located at 143-159 Classon Avenue in the Clinton Hill section of Brooklyn, New York. MRC funded $9 million to the borrower at closing, and provided a commitment for an additional $4 million of construction financing, subject to satisfaction of various conditions. The loan will finance the borrower's purchase of the existing debt from CPC, as well as construction costs needed to obtain a certificate of occupancy for a portion of the project. "Our track record in note purchase financing, combined with our fully integrated real estate platform, allows us to understand the nuances of a complicated real estate transaction such as this and close in a relatively quick timeframe," said Josh Zegen, Co- Founder and Managing Member of MRC. "Both note sellers and borrowers value the certainty of execution we bring to all transactions. Once again, we were able to facilitate the right structure for this deal with a superior risk adjusted return." The property is comprised of two contiguous residential buildings located at 143 and 159 Classon Avenue. 143 Classon Avenue is a five-story building containing approximately 37,492 sellable square feet across 17 residential units. 159 Classon Avenue, also a five-story building, contains approximately 35,210 sellable square feet across 20 residential units. Common recreation spaces are located in the cellar. Tenants have use of individual storage lockers in the sub-cellar of 143 Classon Avenue, while the sub- cellar of 159 Classon Avenue offers parking for 18 cars. The property broke ground in 2007 but the difficult economic environment caused the original developers to file for bankruptcy. The project is in various stages of completion, with 143 Classon Avenue almost finished and 159 Classon Avenue requiring significant construction work before receiving its final certificate of occupancy. Madison Realty Capital (MRC) Founded in 2004, Madison Realty Capital is an institutionally backed commercial real estate firm specializing in flexible debt and equity financing solutions for middle-market transactions throughout the United States. MRC invests in the multifamily, retail, office and industrial sectors and has completed approximately $1 billion of transactions in 28 states to date. MRC's vertically integrated platform encompasses origination, servicing, asset management, property management and construction management expertise to maximize the value of its investments. 146-148 CORTLANDT: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: 146-148 Cortlandt Street, LLC 150 Cortlandt Street, LLC Sleepy Hollow, NY 10591 Bankruptcy Case No.: 13-22762 Chapter 11 Petition Date: May 14, 2013 Court: United States Bankruptcy Court Southern District of New York (White Plains) Judge: Robert D. Drain Debtor's Counsel: Jonathan S. Pasternak, Esq. DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP One North Lexington Avenue White Plains, NY 10601 Tel: (914) 681-0200 Fax: (914) 684-0288 E-mail: jpasternak@ddw-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Cirilo Rodriguez, managing member. 1ST GPS INC: Updated Case Summary & Unsecured Creditors ------------------------------------------------------- Lead Debtor: 1st GPS Inc. dba GS Auto Body and Fiberglass 3613 Foothill Blvd La Cresenta, CA 91214 Bankruptcy Case No.: 13-22675 Chapter 11 Petition Date: May 14, 2013 Court: United States Bankruptcy Court Central District Of California (Los Angeles) Judge: Richard M. Neiter Debtors' Counsel: Neil C. Evans, Esq. LAW OFFICES OF NEIL C EVANS 13351 D Riverside Dr Ste 612 Sherman Oaks, CA 91423 Tel: (818) 802-8333 Fax: (818) 707-8983 Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliates that simultaneously filed separate Chapter 11 petitions: Debtor Case No. ------ -------- GPSH Inc. 13-22677 dba Pierre Garden Restaurant Assets: $0 to $50,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by Petros Gumrikyan, president. A. In its list of 20 largest unsecured creditors, 1st GPS Inc wrote only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Khachik Kesheshyan, Alleged $1,400,000 Shaheed Kesheshyan, Fraudulent Hamlet Derhovanessian, Conveyance c/o Michael Rubin & Assoc 18321 Ventura Blvd, Ste 815 Tarzana, CA 91356 B. In its list of 20 largest unsecured creditors, GPSH Inc wrote only one entry: Entity Nature of Claim Claim Amount ------ --------------- ------------ Khachik Kesheshyan, Alleged $1,400,000 Shaheed Kesheshyan, Fraudulent Hamlet Derhovanessian, Conveyance c/o Michael Rubin & Assoc 18321 Ventura Blvd, Ste 815 Tarzana, CA 91356 200 WEA: Case Summary & 6 Unsecured Creditors --------------------------------------------- Debtor: 200 WEA Parking Corp. 200 West End Avenue New York, NY 10023 Bankruptcy Case No.: 13-11583 Chapter 11 Petition Date: May 14, 2013 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Debtor's Counsel: Gabriel Del Virginia, Esq. LAW OFFICES OF GABRIEL DEL VIRGINIA 880 Third Avenue, 13th Floor New York, NY 10022 Tel: (212) 371-5478 Fax: (212) 371-0460 E-mail: gabriel.delvirginia@verizon.net Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's six largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/nysb13-11583.pdf The petition was signed by Eric Brown, president. 56 WALKER: Case Summary & 13 Unsecured Creditors ------------------------------------------------ Debtor: 56 Walker LLC 56 Walker Street New York, NY 10003 Bankruptcy Case No.: 13-11571 Chapter 11 Petition Date: May 13, 2013 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Jonathan S. Pasternak, Esq. DELBELLO DONNELLAN WEINGARTEN WISE & WIEDERKEHR, LLP One North Lexington Avenue White Plains, NY 10601 Tel: (914) 681-0200 Fax: (914) 684-0288 E-mail: jpasternak@ddw-law.com Scheduled Assets: $23,000,000 Scheduled Liabilities: $15,996,104 The petition was signed by Guy Morris, managing member. Debtor's List of 13 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ John Morris $1,750,000 c/o Jenny's Jump Drive Austin, TX 78733 Charles Tomaselli, Esq. $120,000 Dickerson Tomaselli & Mullen 600 Madison Ave., Ste 2200 New York, NY 10022 NYC Department of Finance $54,256 345 Adams Street, 3rd Floor Attn: Legal Affairs Division Brooklyn, NY 11201-3719 Leonardo Labanco $54,000 56 Walker Street New York, NY 10013 Sunshine Quality $30,000 Construction Kevin McKeown $29,885 Kushner Studios $17,000 Architects Advanced Plumbing $17,000 AF Interiors $16,000 La Reddola Lester & $9,316 Associates NYC Water Board $5,452 City of NY Dept Unknown Finance John L. Sampson Unknown ACTIVECARE INC: Incurs $2.4 Million Net Loss in March 31 Quarter ---------------------------------------------------------------- ActiveCare, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.40 million on $4.84 million of total revenues for the three months ended March 31, 2013, as compared with a net loss of $1.80 million on $180,315 of total revenues for the same period during the prior year. For the six months ended March 31, 2013, the Company incurred a net loss of $6.03 million on $7.34 million of total revenues, as compared with a net loss of $5.96 million on $349,483 of total revenues for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $10.95 million in total assets, $17.78 million in total liabilities and a $6.82 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/Q6o84K About ActiveCare South West Valley City, Utah-based ActiveCare, Inc., is organized into three business segments based primarily on the nature of the Company's products. The Stains and Reagents segment is engaged in the business of manufacturing and marketing medical diagnostic stains, solutions and related equipment to hospitals and medical testing labs. The CareServices segment is engaged in the business of developing, distributing and marketing mobile health monitoring and concierge services to distributors and customers. The Chronic Illness Monitoring segment is primarily engaged in the monitoring of diabetic patients on a real time basis. The Company's business plan is to develop and market products for monitoring the health of and providing assistance to mobile and homebound seniors and the chronically ill, including those who may require a personal assistant to check on them during the day to ensure their safety and well being. ActiveCare incurred a net loss of $12.36 million for the year ended Sept. 30, 2012, compared with a net loss of $7.89 million during the prior year. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012, citing recurring operating losses and an accumulated deficit which conditions raise substantial doubt about the Company's ability to continue as a going concern. ADVANCED MEDICAL: Incurs $605,500 Net Loss in First Quarter ----------------------------------------------------------- Advanced Medical Isotope Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $605,514 on $24,804 of revenues for the three months ended March 31, 2013, as compared with a net loss of $1.15 million on $48,584 of revenues for the three months ended March 31, 2012. The Company's balance sheet at March 31, 2013, showed $759,271 in total assets, $9.04 million in total liabilities and a $8.28 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/fxbgrM Kennewick, Washington-based Advanced Medical Isotope Corporation is engaged in the production and distribution of medical isotopes and medical isotope technologies that are changing the practice of medicine and ushering in a new era of improved patient care. Isotopes are a form of chemical element with the same atomic number as another element but with a different atomic mass. Medical isotopes are used in molecular imaging, therapy, and nuclear medicine to diagnose, manage and treat diseases. HJ & Associates, LLC, in Salt Lake City, Utah, expressed substantial doubt about Advanced Medical's ability to continue as a going concern following the annual results for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses, used significant cash in support of its operating activities and, based upon current operating levels, requires additional capital or significant restructuring to sustain its operation for the foreseeable future. The Company reported a net loss of $8.6 million on $247,968 of revenues in 2012, compared with a net loss of $2.7 million on $393,603 of revenues in 2011. AEON LLC: Appeals Court Says $3,173 Transfer to APM Was Fraudulent ------------------------------------------------------------------ The Appellate Division of the Supreme Court of New York, Third Department, has upheld a ruling by the New York Supreme Court, holding that a $3,173 transfer by Aeon LLC was both actually and constructively fraudulent under the Debtor and Creditor Law. In 2008, a $54,000 money judgment was rendered against Aeon LLC in favor of Beatrice Bernasconi. Aeon didn't satisfy the judgment and filed for bankruptcy in April 2010. Thereafter, Aeon Property Management LLC or APM incurred expenses to improve a property managed by APM and owned by Aeon at 727 West Court Street in the City of Ithaca, Tompkins County. When the bankruptcy court ordered that Aeon's bankruptcy case be dismissed on Jan. 21, 2011, but before the order of dismissal was entered the next day, Aeon transferred its entire remaining bank balance of $3,173 to APM's bank account. Ms. Bernasconi then commenced a proceeding to set aside the transfer as fraudulent. The NY Supreme Court found that the transfer was indeed fraudulent. In an April 11, 2013 Memorandum and Order, the Appeals Court noted that a close relationship exists between the parties to the transfer as Cynthia Yahn is the sole member and manager of both AEON and APM. "She clearly made the transfer in immediate response to the Bankruptcy Court's order of dismissal with full knowledge of Aeon's outstanding debt to petitioner and, following the transfer, she remained in control of the property through her control of APM," the Appeals Court said. "Yahn's decision to incur various expenses for repairs to property owned by Aeon during the pendency of its bankruptcy petition and while it was insolvent is sufficient to establish that the transfer immediately following the dismissal of the bankruptcy petition was not made in good faith and, therefore, was made without fair consideration," the Appeals Court opined. The lack of fair consideration, Aeon's insolvency at the time that the transfer was made and the unsatisfied judgment in favor of petitioner conclusively establish that the transfer was constructively fraudulent, the Appeals Court concluded. The appeal is In the Matter of BEATRICE BERNASCONI, Respondent, v. AEON, LLC, et al., Appellants, Case No. 514550 (N.Y. App. Div.). A copy of the Appeals Court's April 11, 2013 Memorandum and Order is available at http://is.gd/L6gLFqfrom Leagle.com. Sharon M. Sulimowicz, Esq. -- sharon@smsattorneyatlaw.com -- represent the Appellants. Edward Y. Crossmore, Esq. -- ruth@crossmore.com -- of The Crossmore Law Office represents the Respondent. AEROGROW INTERNATIONAL: Justin Borus Held 18% Stake at May 31 ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Justin B. Borus and his affiliates disclosed that, as of March 31, 2013, they beneficially owned 1,075,911 shares of common stock of AeroGrow International, Inc., representing 18.2% of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/VnOLJk About AeroGrow Boulder, Colo.-based AeroGrow International, Inc., is a developer, marketer, direct-seller, and wholesaler of advanced indoor garden systems designed for consumer use and priced to appeal to the gardening, cooking, and healthy eating, and home and office decor markets. The Company reported a net loss of $3.55 million for the year ended March 31, 2012, a net loss of $7.92 million for the year ended March 31, 2011, and a net loss of $6.33 million for the year ended March 31, 2010. The Company's balance sheet at Dec. 31, 2012, showed $4.13 million in total assets, $4.31 million in total liabilities and a $185,890 total stockholders' deficit. AHERN RENTALS: Hearing Today on Payment of Commitment Fees ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Ahern Rentals Inc. is arranging $740 million in financing, enough to pay off about $270 million in junior secured financing and avoid a court fight requiring a judge to decide between the reorganization proposed by the company and the junior lenders' competing plan. The company wants the bankruptcy judge in Reno, Nevada, to hold a hearing May 23 for approval to pay $20 million commitment fees to Jefferies Finance LLC for locking in the newest piece of financing, a $415 million secured bridge loan. The court is already scheduled at the May 23 hearing to approve commitment fees for $495 million in financing required for approval of the equipment-rental firm's Chapter 11 plan. Ahern says it will go ahead with the hearing for paying about $3 million in fees to Bank of America NA, Merrill Lynch Pierce Fenner & Smith Inc. and Jefferies for a $350 million asset-backed loan. Originally, Ahern intended for the court May 23 to approve $5.68 million in fees for a $145 million term loan commitment with Jefferies and Husky Finance Holdings LLC. With the advent of the new $415 million in financing, Ahern says it will drop the Jefferies-Husky loan and not pay the associated fee. The new $415 million Jefferies loan will enable Ahern when the plan becomes effective to pay off the second-lien debt as well as an existing term loan. Paying off the second-lien debt would avoid a confirmation fight because the junior lenders voted as a class against Ahern's plan, meaning that it could only be approved using the so-called cramdown process. The new loans in total would enable Ahern to pay off about $216 million projected to be outstanding on the loan financing the Chapter 11 case and $111.5 million on the term loan, along with the junior secured loan. The creditors' committee is generally supportive of paying the commitment fees, although it wants the new Jefferies commitment extended into July in case there is a protracted fight during Plan confirmation. About Ahern Rentals Founded in 1953 with one location in Las Vegas, Nevada, Ahern Rentals Inc. -- http://www.ahern.com/-- 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. Privately held 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 and DLA Piper LLP (US) 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. In December 2012, the Court terminated Ahern's exclusive right to propose a plan, saying the company failed to negotiate in good faith after a year in Chapter 11. Certain holders of the Debtor's 9-1/4% senior secured second lien notes due 2013 proposed in February their own Plan to complete with Ahern's proposal. The Noteholder Group consists of Del Mar Master Fund Ltd.; Feingold O'Keeffe Capital, LLC; Nomura Corporate Research & Asset Management Inc.; Och-Ziff Capital Management Group; Sphere Capital, LLC - Series B; and Wazee Street Capital Management, LLC. They are represented by Laurel E. Davis, Esq., at Fennemore Craig Jones Vargas, Kurt A. Mayr, Esq., and Daniel S. Connolly, Esq., at Bracewell & Giuliani LLP. In March 2013, the Court approved disclosure materials explaining both plans. Ahern and the lenders both propose paying unsecured claims in full. The lenders' plan fully pays unsecured creditors when the plan is implemented. The Ahern plan pays them over a year, thus giving unsecured creditors the right to vote only on the Debtor's plan. Ahern's Plan offers the junior lenders $160 million cash and new debt if they accept the plan. Otherwise, they are slated to receive all new debt, for eventual full payment. The lenders' plan pays all creditors in full other than the $267.7 million in second-lien debt that converts to equity. Plan confirmation hearing is set to begin in June. AIR MEDICAL: Moody's Retains 'B2' CFR over Dividend Announcement ---------------------------------------------------------------- Moody's Investors Service affirmed Air Medical Group Holdings, Inc.'s B2 Corporate Family Rating following the announcement that its indirect parent holding company, Air Medical Holdings, LLC, plans to fund a one-time dividend to shareholders with proceeds from a proposed $200 million HoldCo contingent cash pay term loan due 2018. Moody's assigned a Caa1 to the proposed unsecured HoldCo contingent cash pay term loan. At the same time, Moody's affirmed the B2 ratings on the company's $260 million senior secured term loan B-1 due 2018, $40 million senior secured term loan B-2 due 2015, and $490.5 million senior secured notes due 2018. The rating outlook is stable. The affirmation of Air Medical's B2 Corporate Family Rating reflects Moody's view that the company is weakly positioned in the B2 rating category pro forma for the dividend, but that profitability growth over the next 12 to 18 months will strengthen credit metrics to levels that are more appropriate for the rating. Pro forma for the transaction, debt/EBITDA increases to roughly 6.1 times compared to 5.0 times for the twelve month period ended March 31, 2013. The expansion of bases coupled with a moderate amount of growth in organic same-base flight volumes should generate enough incremental earnings to reduce adjusted debt/EBITDA to below 5.5 times. The Caa1 assigned to Air Medical Holdings, LLC's HoldCo contingent cash pay term loan considers its structural subordination to all liabilities at Air Medical Group Holdings, Inc., including a $125 million asset based revolver (not rated; to be upsized from $100 million), $260 million term loan B-1, $40 million term loan B-2, and $490.5 million senior secured notes. The HoldCo contingent cash pay term loan will be a senior unsecured obligation of Air Medical Holdings, LLC and will not be guaranteed by Air Medical Group Holdings, Inc. or any of its subsidiaries. The company will be required to pay interest in cash so long as there is restricted payment capacity available under the credit agreement. If not, the company will have the option to pay interest in kind (PIK) at a rate of 0.75% higher than the cash interest rate. Rating assigned: Air Medical Holdings, LLC: $200 million HoldCo cash pay term loan due 2018 at Caa1 (LGD 6, 92%) Ratings affirmed/LGD assessments revised: Air Medical Group Holdings, Inc.: Corporate Family Rating at B2 Probability of Default Rating at B2-PD $260 million senior secured B-1 term loan due 2018, to B2 (LGD 3, 44%) from B2 (LGD 4, 55%) $40 million senior secured B-2 term loan due 2015, to B2 (LGD 3, 44%) from B2 (LGD 4, 55%) $490.5 million 1st lien senior secured notes due 2018, to B2 (LGD 3, 44%) from B2 (LGD 4, 55%) The rating on the HoldCo contingent cash pay term loan is subject to review of final documentation. Upon completion of the transaction, the Corporate Family and Probability of Default ratings will be moved to Air Medical Holdings, LLC from Air Medical Group Holdings, Inc. Ratings Rationale: Air Medical's B2 Corporate Family Rating reflects its high pro forma leverage of approximately 6 times along with Moody's expectation that leverage will remain above 5.0 times over the next 12 to 18 months, as the company utilizes cash flow to fuel the expansion of its bases into new geographic regions rather than reducing debt. The rating is also constrained by the company's relatively small absolute size and high bad debt expense, principally tied to the self-pay portion of Air Medical's revenues. The rating also reflects aggressive financial policies, evidenced by the special dividend to shareholders, funded with $200 million of incremental debt. Partially offsetting these risk factors are the company's historically solid EBITDA margins and its strong market position as the largest independent provider of community-based air ambulance services in the United States. The stable ratings outlook reflects Moody's expectation that modest earnings improvement and free cash flow generation should enable Air Medical's key credit metrics to improve at a pace that strengthens its positioning within the B2 rating category. An upgrade is unlikely in the near term given high financial leverage and aggressive financial policies. Over the medium term, Air Medical's ratings could be upgraded if it generates more robust earnings and cash flow from operations through increase in scale and profitability, and the company reduces leverage such that adjusted total debt to EBITDA approaches 4.0 times on a sustainable basis. Air Medical's ratings could be downgraded if the company continues an aggressive pace of financial policies and shareholder-friendly initiatives, if the company undertakes a significant acquisition which increases execution risks, or if leverage increases such that debt-to-EBITDA leverage increases above 6.0 times on a sustained basis. In addition, the ratings could be downgraded if liquidity materially deteriorates. A material upsizing of the proposed Holdco term loan could lead to a negative outlook or downgrade. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Lewisville, Texas, Air Medical is the largest independent provider of air medical services in the world, operating through subsidiaries, Air Evac Lifeteam, Med-Trans Corporation, EagleMed, Reach Air Medical Services, and AirMedCare, which collaborate with leading hospital systems, medical centers and EMS agencies to offer access to emergency medical care. As of March 26, 2013, the company operated a fleet of 244 helicopters and airplanes, providing services from 204 bases across 27 states in the United States. The company is majority owned by financial sponsor Bain Capital Partners, LLC. For the twelve months ended March 31, 2013, Air Medical's generated revenues were approximately $561 million. AIR MEDICAL: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable ---------------------------------------------------------------- Standard & Poor's Rating Services said it assigned Lewisville, Texas-based Air Medical Holdings LLC its 'B' corporate credit rating. The outlook is stable. In conjunction with this assignment, S&P withdrew its 'B' corporate credit rating on Air Medical Group Holdings, a wholly owned subsidiary of Air Medical Holdings LLC. At the same time, S&P assigned Air Medical Holdings LLC's contingent cash pay term loan an issue-level rating of 'CCC+', with a recovery rating of '6', indicating S&P's expectation for negligible (0%-10%) recovery in the event of a payment default. "Standard & Poor's Ratings Services' ratings on Air Medical Holdings LLC reflect its "highly leveraged" financial risk profile based on its debt-to-EBITDA ratio of about 6x and modest expectations of free cash flow," said credit analyst Lucy Patricola. "The company's "weak" business risk profile reflects its narrow business focus on emergency air transportation, exposure to reimbursement risk, and limited size and diversity." S&P's stable rating outlook reflects its expectations that Air Medical will manage its expansion plans as S&P had expected and sustain current operating trends such that debt leverage remains above 5x and cash flow is modestly positive. The rating includes tolerance for some volatility around S&P's base case because of external factors such as weather and uncompensated care. S&P could raise ratings if the company's revenue and earnings growth accelerate so that debt-leverage, adjusted for operating leases, approaches 4.5x and free cash flow becomes more robust. At current debt levels, Air Medical would achieve these credit measures if EBITDA expands by about 30% and stays at that level. However, S&P believes it is more likely to achieve this leverage target by paying down debt. S&P could lower the ratings if liquidity becomes constrained such that revolver availability and cash on hand fall below $10 million. This could result from drastic changes in either reimbursement (likely commercial), FAA regulations that increase costs, or overly rapid expansion. ALPHA PARTNERS: Curtis Castillo Approved as Bankruptcy Counsel -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Alpha Partners, Ltd., to employ Curtis | Castillo PC as counsel. The firm's Mark A. Castillo and Joshua L. Shepherd will lead the engagement. The compensation to be paid the firm will be based upon the hourly rates charged in bankruptcy and non-bankruptcy matters by its respective attorneys and legal assistants for legal services rendered. The firm's rates are: Professional Rates ------------ ----- Mark A. Castillo $415 Joshua L. Shepard $250 Clerk $95 to $150 Paralegal $175 to $350 On Jan. 21, 2013, James T. Maxwell, a limited partner of the Debtor and the president of the Debtor's general partner, ZVN, Inc., initiated the process to wire a prepaid retainer to the firm, on behalf of the Debtor, in the amount of $15,000. Mr. Castillo attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. A hearing on the application is set for March 20, 2013, at 1:15 p.m. The Debtor said it has sought bankruptcy relief to obtain the breathing spell afforded by Section 362 of the Bankruptcy Code so that it may analyze its options and utilize the bankruptcy forum for the orderly and efficient reorganization or liquidation of its assets and work towards satisfaction of its outstanding obligations. About Alpha Partners 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. The Debtor disclosed $13,203,582 in assets and $25,071,428 in liabilities as of the Chapter 11 filing. ALPHA PARTNERS: Frost Bank Wants Case Dismissal ----------------------------------------------- Frost Bank is seeking dismissal of the Chapter 11 case of Alpha Partners, Ltd. Frost, a creditor and party-in-interest, explained that the case can serve no benefit to any of the parties-in-interest. As a passive holding company, the Debtor has no employees, conducts no active business and thus generates no revenue from operations. According to Frost, the case was commenced by the Debtor in an attempt to impose the automatic stay against actions pursued by the Texas Department of Insurance against the Debtor's wholly owned subsidiary, Santa Fe Auto Insurance Company. The Debtor, Frost related, is a holding company whose primary assets consist of 100% equity interest in Santa Fe and certain surplus debentures issued by Santa Fe with an aggregate face value of $13,500,000. As of the Petition Date, the Debtor was indebted to Frost under the terms of the Loan Documents in an amount of no less than $9,273,435.92 About Alpha Partners 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. The Debtor disclosed $13,203,582 in assets and $25,071,428 in liabilities as of the Chapter 11 filing. AMARU INC: To Restate Previously Filed Periodic Reports ------------------------------------------------------- The Board of Directors of Amaru, Inc., was notified by Wei Wei & Co. LLP., its current independent registered public accounting firm who is re-auditing the financial statements for the Company's fiscal year ended Dec. 31, 2011, that certain adjustments were not properly reflected in 2011 Financial Statements and have a material impact on previously issued unaudited interim financial statements contained in the Company's quarterly reports. Consequently, the Company has been advised by Wei Wei that the quarterly reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012, and Sept. 30, 2012, cannot be relied upon. According to Wei Wei, the following adjustments were not properly reflected in the 2011 Financial Statements: 1. Impairment in the Company's two investments totaling approximately $492,000; 2. Accrued interest in the amount of approximately $187,000; and 3. Investment made by the Company in the amount of $200,000 and loan received from a shareholder in the same amount. Not properly recording the adjustments resulted in: (i) a net overstatement of investments as of Dec. 31, 2011, of approximately $292,000; (ii) an understatement of liabilities as of Dec. 31, 2011, of approximately 387,000; and (iii) an understatement of expenses of approximately $679,000 and related understatement of net loss for the same amount for the year ended Dec. 31, 2011. The Company will file an amended Form 10-K for the fiscal year 2011 and amended quarterly reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012, and Sept. 30, 2012. Meanwhile, the Company notified the U.S. Securities and Exchange Commission that it was unable to file its quarterly report on Form 10-Q for the period ended March 31, 2013, in a timely manner because the Company was not able to complete timely its financial statements without unreasonable effort or expense. About Amaru Inc. Singapore-based Amaru, Inc., a Nevada corporation, is in the business of broadband entertainment-on-demand, streaming via computers, television sets, PDAs (Personal Digital Assistant) and the provision of broadband services. The Company's business includes channel and program sponsorship (advertising and branding); online subscriptions, channel/portal development (digital programming services); content aggregation and syndication, broadband consulting services, broadband hosting and streaming services and E-commerce. After auditing the 2011 results, Wilson Morgan, LLP, in Irvine, California, noted that the Company has sustained accumulated losses from operations totalling $40.7 million at Dec. 31, 2011. This condition and the Company's lack of significant revenue, raise substantial doubt about the Company's ability to continue as going concern, the auditors said. Amaru reported a net loss from operations of $1.37 million in 2011, compared with a net loss from operations of $1.50 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $3.28 million in total assets, $3.08 million in total liabilities and $195,261 in total stockholders' equity. AMERICAN BUILDERS: S&P Assigns BB- CCR & Rates $1.25BB Loan BB+ --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB-' corporate credit rating to Beloit, Wis.-based American Builders & Contractors Supply Co. Inc. (ABC Supply Co.). The outlook is stable. At the same time, S&P assigned its 'BB+' (two notches higher than the corporate credit rating) issue rating to ABC Supply Co.'s $1.25 billion senior secured bank term loan B due 2020. The recovery rating is '1', indicating S&P's expectation of very high (90% to 100%) recovery for lenders under our default scenario. In addition, S&P assigned its 'B' (two notches lower than the corporate credit rating) issue rating to ABC Supply Co.'s $500 million senior unsecured notes due 2021. The recovery rating is '6', indicating S&P's expectation of negligible (0% to 10%) recovery for noteholders under our default scenario. "The rating on ABC Supply Co. reflects what we consider to be the combination of its 'fair' business risk profile and 'aggressive' financial risk profile," said Standard & Poor's credit analyst Maurice Austin. S&P's view of the company's fair business risk assessment incorporates its leading position in a very attractive roofing market, a relatively large size and scale of operations, significant business diversification, and some exposure to volatile construction cycles and unpredictable weather patterns. The stable rating outlook reflects S&P's expectation that the company will continue to generate positive free cash flow and maintain strong liquidity while reducing total leverage (including lease obligations) from 5.5x to about 4.5x by year-end 2013. A downgrade is less likely in the near term, given S&P's favorable outlook for home construction and remodeling spending. However, S&P could consider a negative rating action if the increase in remodeling spending fails to materialize as S&P expected, resulting in ABC Supply Co.'s sales growth under 4%, relative to S&P's expectation of 10% growth. Consequently, leverage would remain above 5x, which S&P considers weak based on its aggressive financial risk assessment. A higher rating is unlikely in the near term given S&P's view that credit measures will initially be weak relative to the 'BB-' rating and are likely to only improve to the midpoint of ranges S&P considers consistent with an aggressive financial profile and the current corporate credit rating. The company used the transaction's proceeds to fund the buyout of the minority shareholders pursuant to the redemption agreement and for the payment of the stock appreciation rights, as well as for repaying existing debt and paying transaction fees and expenses. AMERICAN PETRO-HUNTER: Delays Form 10-Q for First Quarter --------------------------------------------------------- American Petro-Hunter Inc. was not able to file its quarterly report on Form 10-Q for the period ended March 31, 2013. The Company said information necessary for the filing of a complete and accurate Form 10-Q could not be gathered within the prescribed time period without unreasonable effort and expense. About American Petro-Hunter Wichita, Kansas-based American Petro-Hunter, Inc., is an oil and natural gas exploration and production (E&P) company with current projects in Payne and Lincoln Counties in Oklahoma. American Petro-Hunter disclosed a net loss of $3.30 million on $308,770 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $2.73 million on $317,931 of revenue during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $1.65 million in total assets, $1.64 million in total liabilities and $12,242 in total stockholders' equity. Weaver Martin & Samyn, LLC, in Kansas City, Missouri, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and is dependent upon the continued sale of its securities or obtaining debt financing for funds to meet its cash requirements. These factors raise substantial doubt about the Company's ability to continue as a going concern. APPLIED DNA: Incurs $3.1 Million Net Loss in March 31 Quarter ------------------------------------------------------------- Applied DNA Sciences, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $3.12 million on $344,605 of revenues for the three months ended March 31, 2013, as compared with a net loss of $1.54 million on $518,402 of revenues for the same period a year ago. For the six months ended March 31, 2013, the Company incurred a net loss of $11.83 million on $662,275 of revenues, as compared with a net loss of $3.95 million on $1.03 million of revenues for the six months ended March 31, 2012. The Company's balance sheet at March 31, 2013, showed $5.07 million in total assets, $8.84 million in total liabilities and a $3.77 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/z6ds5r About Applied DNA Stony Brook, N.Y.-based Applied DNA Sciences, Inc., is principally devoted to developing DNA embedded biotechnology security solutions in the United States. The Company's shares of common stock are quoted on the OTC Bulletin Board under the symbol "APDN." Applied DNA incurred a net loss of $7.15 million for the year ended Sept. 30, 2012, compared with a net loss of $10.51 million for the year ended Sept. 30, 2011. ASSURED PHARMACY: Incurs $1.1 Million Net Loss in 1st Quarter ------------------------------------------------------------- Assured Pharmacy, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.13 million on $2.89 million of sales for the three months ended March 31, 2013, as compared with net loss of $897,027 on $3.64 million of sales for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $2.33 million in total assets, $9.56 million in total liabilities and a $7.23 million stockholders' deficit. Bankruptcy Warning "Our business is highly leveraged and the successful implementation of the foregoing plan necessitates that we reach an agreement with our existing debt holders to extend the maturity date of debt securities which came due in 2012. As of March 31, 2013, we had $540,310 in debt securities which were due in the year 2012, which included $500,000 in principal amount of unsecured convertible debentures. We are attempting to extend the maturity date of all outstanding debt securities which were due in 2012, but can provide no assurance that the holders of such securities will agree to extend the maturity date on these securities on acceptable terms. We are also discussing the possibility of these debt holders converting the securities into equity. If our debt holders choose not to convert certain of these securities into equity, we will need to repay such debt, or reach an agreement with the debt holders to extend the terms thereof. If we are forced to repay the debt, this need for funds would have a material adverse impact on our business operations, financial condition and prospects, would threaten our ability to operate as a going concern and may force us to seek bankruptcy protection." A copy of the Form 10-Q is available for free at: http://is.gd/lOkvZz About Assured Pharmacy Headquartered in Frisco, Texas, Assured Pharmacy, Inc., is engaged in the business of establishing and operating pharmacies that specialize in dispensing highly regulated pain medication for chronic pain management. The Company was organized as a Nevada corporation on Oct. 22, 1999, under the name Surforama.com, Inc., and previously operated under the name eRXSYS, Inc. The Company changed its name to Assured Pharmacy, Inc., in October 2005. Assured Pharmacy disclosed a net loss attributable to the Company of $4 million on $14.14 million of sales for the year ended Dec. 31, 2012, as compared with a net loss attributable to the Company of $3.27 million on $16.44 million of sales in 2011. BDO USA, LLP, in Dallas, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. ATP OIL: Asset Sale Evidentiary Hearing Continued to June 4 ----------------------------------------------------------- ATP Oil & Gas Corporation has continued the evidentiary hearing on its motion to sell substantially all of its Shelf and Deepwater Assets to Tuesday, June 4, 2013, at 9:30 a.m. Credit Suisse AG, the administrative and collateral agent for the lenders under the Debtor's Senior Secured Superpriority Debtor-in- Possession Credit Agreement dated as of August 29, 2012, was designated as the highest and best bidder of ATP's Assets at the auction held May 7, 2013, with a bid of $690,800,000. The proposed sale was to come before Honorable Marvin Isgur last May 9 for approval. These parties have also filed objections and reservation of rights to the proposed Asset Purchase Agreement and Proposed Sale Order filed with the notice designating Credit Suisse AG as the successful bidder: * SEACOR Marine LLC * Bluewater Industries, L.P. * Omega Natchiq, Inc. * Greystar Corporation * ATP Infrastructure Partners, L.P. * EFS-R LLC and GE Energy Financial Services, Inc. * Total E&P USA, Inc. * NGP Capital Resources Company * CLMG Corp. and Beal Bank USA * Macquarie Investments LLC * Seamar Divers International, LLC * Energy XXI GOM, LLC, Energy XXI Gulf Coast, Inc., and Energy XXI (Bermuda), Ltd. * Gregg Davis, Oligocene Partnership, Ltd., Michael Clark, Mark Gillespie, Ed Stengel, John Sansbury, George Canjar, the Suzanne K. Bellis Survivor's Trust Share One, Suzanne K. Bellis Trustee, and Bellis Family Ventures, LLC, (the ORRI Group) * Harvey Gulf International Marine, LLC, Hornbeck Offshore Services, LLC, Expeditors & Production Services, Inc., EPS Cargo Handlers Company, EPS Logistics Company, Barry Graham Oil Service, L.L.C., Gulf Offshore Logistics, L.L.C., Martin Holdings, L.L.C., CPort/Stone, L.L.C., Offshore Service Vessels, L.L.C., Warrior Energy Services Corporation, Fastorq, L.L.C., Stabil Drill Specialties, L.L.C., Workstrings International, L.L.C., Superior Energy Services, L.L.C. d/b/a Superior Completion Services, International Marine, LLC, Champion Technologies, Inc., Offshore Energy Services, Inc., Schlumberger Technology Corporation, M-I, L.L.C., Smith International, Inc., Wireline Control Services, LLC, Nabors Offshore Corporation, Canrig Drilling Technology, Ltd., Supreme Service & Specialty Co., Inc., Frank's Casing Crew and Rental Tools, Inc., BEE MAR, L.L.C., and Era Helicopters, L.L.C. (the Statutory Lien Objectors) * the United States, on behalf of the Department of the Interior and Environmental Protection Agency * Davis Offshore, L.P. and Calypso Exploration, LLC f/k/a Stephens Production Company, LLC * BP Exploration & Production, Inc. and BP America Production Company The parties object to the Sale Motion to the extent any relief granted would impair their rights and remedies under their respective agreements with ATP. Bluewater said the sale should not be approved unless there is provision for all Senior Liens to be paid in full. Bluewater said any order approving the sale should not affect its lien rights. The Department of Interior and the Environmental Protection Agency says the Court should not approve the sale absent provisions to ensure the Debtor could perform its decommissioning obligations and other environmental obligations. Aside from opposing the Debtor's pending sale motion, BP objects to the Debtor's request for authority to assume and assign certain executory contracts and unexpired leases under assumption and assignment procedures in conjunction with proposed sale of the Deepwater Property assets. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. ATP OIL: Statutory Lien Holders Withdraw Notices of Examination --------------------------------------------------------------- Statutory Lien Holders -- secured creditors in ATP Oil & Gas Corporation's Chapter 11 case -- withdraw their Notice of 2004 Examination of Credit Suisse AG, Cayman Islands Branch and Notice of 2004 Examination of ATP Oil & Gas Corporation, pursuant to the parties' agreement regarding the production of documents responsive to the document requests set forth in the Notices. The withdrawal is without prejudice to the Statutory Lien Holders' respective rights to seek further discovery relating to any document requests set forth in the Notices, as applicable, in connection with any current or subsequent contested matters or otherwise. The Statutory Lien Holders are Harvey Gulf International Marine, LLC, Hornbeck Offshore Services, LLC, Expeditors & Production Services, Inc., EPS Cargo Handlers Company, EPS Logistics Company, Barry Graham Oil Service, L.L.C., Gulf Offshore Logistics, L.L.C., Martin Holdings, L.L.C., CPort/Stone, L.L.C., Offshore Service Vessels, L.L.C., Warrior Energy Services Corporation, Fastorq, L.L.C., Stabil Drill Specialties, L.L.C., Workstrings International, L.L.C., Superior Energy Services, L.L.C., d/b/a Superior Completion Services, International Marine, LLC, Champion Technologies, Inc. Offshore Services, Inc., Schlumberger Technology Corporation, M-I, LLC, Smith International, Inc., Wireline Control Services, LLC, Nabors Offshore Corporation, Canrig Drilling Technology, Ltd., Supreme Service & Specialty Co., Inc., Frank's Casing Crew and Rental Tools, Inc., BEE MAR, L.L.C., and Era Helicopters, L.L.C. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. ATP OIL: Locke Lord Represents Creditors; SEACOR Substitutes Atty. ----------------------------------------------------------------- Locke Lord LLP disclosed in an amended statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure that it represents these creditors in ATP Oil & Gas Corporation's Chapter 11 case: * BP Exploration & Production, Inc. and BP America Production Company * Total E&P USA, Inc. * ENERGY XXI GOM, LLC, ENERGY XXI GULF COAST, INC., and ENERGY XXI (BERMUDA), LTD. Meanwhile, SEACOR Marine, LLC, the Plaintiff in Adversary No. 12- 03450, has designated and sought leave to substitute James J. Ormiston, Esq., of Looper Reed & McGraw, P.C., in place of Ben L. Aderholt, Esq., of Looper, Esq., of Reed & McGraw, P.C. as its attorney in charge. ATP is unopposed to the substitution. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. ATWATER REDEVELOPMENT: Moody's Lowers Rating on Bonds to 'Ba2' -------------------------------------------------------------- Moody's Investors Service downgraded to Ba2 from Ba1 the rating of the successor agency to the Atwater Redevelopment Agency's Series 2007A and B bonds and assigned a negative outlook. The rating action affects approximately $9.3 million of outstanding debt. Rating Rationale The downgrade is driven by projections that show that as a result of changes to California law that dissolved redevelopment agencies (RDAs) and changed the method by which the successors agencies to the RDAs receive incremental tax revenues to pay debt service on tax allocation bonds, debt service coverage will be insufficient in alternating semi-annual periods beginning in the first-half of 2014-assuming no growth in or declining assessed values (AV) to the project area. Moody's does not expect a default on the bonds in the short- to medium- term given the reserve fund surety provided by Radian (Ba1 negative) and Moody's expectation that the successor agency, Merced county auditor and California's Department of Finance will work out an arrangement to set aside sufficient funds from the second half of the year to cover any debt service shortfalls in the first half of every year beginning in 2014. These factors do not completely offset the low coverage and uncertainty of how the provisions of the statutes will be implemented. Moody's views these as significant credit weaknesses and underpinning the negative outlook Moody's assigned. Other factors affecting the rating include a project area with a small AV; the city's location in the midst of California's agricultural Central Valley, which was among the hardest hit areas for property value and AV declines; socio-economic indicators that are higher than might be expected; the depth of incremental AV which provides protection against economic and real estate downturns; and a top taxpayer profile which, while concentrated, is not unusually so for a redevelopment project area. On an annual basis, debt service coverage levels are lean and expected to remain so. Strengths - Socio-economic indicators that are somewhat higher than would be expected from a Central Valley community dependent on agriculture - Strong ratio of incremental AV to the total AV of the project area Challenges - Assuming no further growth in the project area AV, debt service coverage in the first half or each year after 2014 will be insufficient, and the trustee will be required to tap the debt service reserve surety Outlook The negative outlook incorporates the uncertainties of whether and how the county auditor, city and state will establish reserves to prevent a continued use of the debt service surety, which increases the probability of default on the bonds. What Could Move The Rating-Up - Sizable increase in incremental AV of the project area, leading to greater debt service coverage in all semi-annual periods - Establishment and track record of use of reserve by the county auditor to prevent reserve fund surety taps What Could Move The Rating-Down - Failure by the county auditor and city to establish reserves to prevent taps on the surety and failure to reimburse the surety - Protracted decline in the district's assessed valuation The principal methodology used in this rating was Moody's Analytic Approach To Rating California Tax Allocation Bonds published in December 2003. AUTO-SWAGE PRODUCTS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Auto-Swage Products, Inc. 726 River Road Shelton, CT 06484 Bankruptcy Case No.: 13-50742 Chapter 11 Petition Date: May 14, 2013 Court: United States Bankruptcy Court District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsel: Barbara H. Katz, Esq. LAW OFFICE OF BARBARA H. KATZ 57 Trumbull Street New Haven, CT 06510 Tel: (203) 772-4828 E-mail: barbarakatz@snet.net Scheduled Assets: $1,231,234 Scheduled Liabilities: $856,798 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/ctb13-50742.pdf The petition was signed by Keith Brenton, president. AXION INTERNATIONAL: Incurs $7.3MM Net Loss in First Quarter ------------------------------------------------------------ Axion International Holdings, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss attributable to common shareholders of $7.28 million on $1.75 million of revenue for the three months ended March 31, 2013, as compared with a net loss attributable to common shareholders of $1.75 million on $2.29 million of revenue for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $6.29 million in total assets, $15.29 million in total liabilities, $6.11 million in 10% convertible preferred stock, and a $15.12 million total stockholders' deficit. "This quarter showed that with a normalized sales mix across customers, geographies, and products AXION can achieve improved margins. We saw a reduction in customer concentration and started the process of becoming a more vertically integrated manufacturer. Based on increased new customer adoptions and the robustness of our sales pipeline, we are confident that we can increase the volume of our sales at improving margins to generate positive earnings," stated AXION president and CEO Steve Silverman. "We are at a critical point in time with regards to the total volume of plastic being manufactured. Our financial models indicate that as we achieve the higher volumes projected, and with AXION operating its own facility and reducing our reliance on contract manufacturing where warranted, we will see reduced costs and higher margins." A copy of the Form 10-Q is available for free at: http://is.gd/27AkUl In April 2006, the Company commenced an action against Tonga Partners, L.P., Cannell Capital, L.L.C. and J. Carlo Cannell in the United States District Court, Southern District of New York for disgorgement of short-swing profits pursuant to Section 16 of the Exchange Act. In an opinion and order dated Sept. 26, 2008, Justice Kimba M. Wood of the District Court granted the Company summary judgment in the amount of $4,965,898. In connection with the Defendants' appeal of the District Court's summary judgment to the United States Court of Appeals for the Second Circuit, the Defendants posted a cash appeal bond of approximately $5,000,000. After the Defendants exhausted all opportunities for judicial review of the District Court's summary judgment, including filing for a writ of certiorari to the United States Supreme Court which was denied, the appeal bond was released to the Company. On May 14, 2013, the Company received approximately $3,100,000 which represents the amount of the appeal bond net of attorney's fees and costs. About Axion International New Providence, N.J.-based Axion International Holdings, Inc. (OTC BB: AXIH) - http://www.axionintl.com/-- is the exclusive licensee of patented and patent-pending technologies developed for the production of structural plastic products such as railroad crossties, pilings, I-beams, T-Beams, and various size boards including a tongue and groove design that are utilized in multiple engineered design solutions such as rail track, rail and tank bridges (heavy load), pedestrian/park and recreation bridges, marinas, boardwalks and bulk heading to name a few. RBSM LLP, in New York, the auditor, issued a going concern qualification each in the Company's financial statements for the years ended Dec. 31, 2010, and 2011. RBSM LLP noted that the Company has incurred significant operating losses in current year and also in the past. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern, it said. Axion International reported a net loss of $9.93 for the 12 months ended Dec. 31, 2011, compared with a net loss of $7.10 million for the 12 months ended Sept. 30, 2010. BIOFUELS POWER: Delays Form 10-Q for First Quarter -------------------------------------------------- Biofuels Power Corp. said its financial statements for the quarter ended March 31, 2013, are not yet ready for distribution as a result of recent measures the Company has taken with regard to efforts to sign operating agreements which will effect subsequent events at the balance sheet date. Biofuels Power Humble, Tex.-based Biofuels Power Corporation is a distributed energy company that is pioneering the use of biodiesel to fuel small electric generating facilities that are located in close proximity to end-users. BPC's first power plant is currently located near Houston, Texas in the city of Oak Ridge North. Biofuels Power disclosed net income of $342,456 on $0 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $1.28 million on $0 of revenue during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $1.23 million in total assets, $5.47 million in total liabilities and a $4.24 million total stockholders' deficit. Clay Thomas, P.C., in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered significant losses and will require additional capital to develop its business until the Company either (1) achieves a level of revenues adequate to generate sufficient cash flows from operations; or (2) obtains additional financing necessary to support its working capital requirements. These conditions raise substantial doubt about the Company's ability to continue as a going concern. BLUE COAT: Moody's Assigns 'B2' Rating to New $700MM Debt --------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Blue Coat Systems, Inc.'s proposed senior secured credit facilities comprising a $25 million revolving credit facility and a $675 million term loan. Moody's also affirmed Blue Coat's B2 Corporate Family Rating (CFR) and revised its Probability of Default Rating (PDR) to B2-PD, from B3-PD. Blue Coat will use the net proceeds from the term loans and drawings under the revolving credit facility, coupled with about $33 million of cash on hand, to refinance existing credit facilities and fund an acquisition of a target company. Moody's will withdraw the ratings for Blue Coat's existing credit facilities at the close of the proposed transaction. The rating outlook is stable. Ratings Rationale: The prospective acquisition will broaden Blue Coat's portfolio of web security offerings and provide the opportunity to cross-sell complementary products to a large installed base. The target's network monitoring technologies and software-based advanced threat protection solutions are complementary to Blue Coat's web security solutions and will benefit Blue Coat's competitive position in its core content security market segment. Notwithstanding the strategic merits of the combination, the debt-financed purchase of the target company, which does not generate profits and has modest revenues, will erode Blue Coat's financial cushion in the existing B2 CFR. Moody's expects Blue Coat's total debt-to-EBITDA leverage to increase by approximately 1.3x to 4.3x (excluding certain non- recurring expenses) at the close of the transaction, partially offsetting the deleveraging attained since the close of Blue Coat's leveraged buyout in February 2012. Furthermore, the acquisition of the target's cash-absorptive operations will constrain Blue Coat's EBITDA growth and free cash flow in the next 12-to-18 months. The affirmation of the B2 CFR reflects Moody's view that Blue Coat will prioritize integrating the recent acquisitions (the proposed acquisition as well as the acquisition of certain assets of Netronome completed in May 2013). The affirmation also recognizes Blue Coat's meaningful improvement in profitability through cost efficiencies and improved sales execution in the last twelve months. Moody's expects organic revenue growth and stable EBITDA margins in Blue Coat's Secure Web Gateway and WAN optimization segments to support free cash flow in the high single digit percentage of total debt. The B2 CFR reflects Blue Coat's moderately high leverage, particularly in the context of its higher proportion of revenues derived from one-time product sales relative to similarly rated peer software companies. The rating additionally reflects Blue Coat's moderate operating scale and narrow product concentration within the enterprise IT security infrastructure market. The rating is constrained by Blue Coat's aggressive acquisition strategy and potential for increases in debt to fund acquisitions and/or shareholder returns. Blue Coat's credit profile benefits from the company's leading market position in the niche Anti-Virus/Web/Malware appliance segment of content security market and its well-regarded products in the WAN Optimization market. Both market segments have good growth prospects as a result of growth in data traffic and increasing risk and costs of IT security breaches. Blue Coat has a large and diverse installed base of enterprise customers that drive majority of its new sales. The rating is also supported by the predictability of Blue Coat's revenues from maintenance and support agreements and the company's track record of high customer renewal rates, especially among its larger enterprise customers. The stable ratings outlook reflects Moody's expectations that Blue Coat's revenue will grow and it will manage total debt-to-EBITDA leverage in the 4.0x to 5.0x range in the next 12-to-18 months. Moody's expects Blue Coat to produce free cash flow in the high single digit percentage of total debt during this period. Moody's revised Blue Coat's PDR to B2-PD, from B3-PD, and changed the mean family recovery rate assumption at default to 50% from 65%, to reflect the lack of maintenance covenant in the term loan facility and as a result, potential for lower recovery for the new senior secured credit facilities relative to the previous facilities. Given Blue Coat's moderately high leverage and aggressive financial policies, upward rating movement is not expected in the intermediate term. However, Moody's could raise Blue Coat's ratings if the company demonstrates organic revenue growth and if Moody's believes the company could sustain adjusted debt to EBITDA of less than 4.0x and generate free cash flow in excess of 10% of total debt. Conversely, Blue Coat's ratings could be lowered if weak liquidity or profitability, increasing competition, or aggressive financial policies lead Moody's to believe that Blue Coat is unlikely to maintain total debt to EBITDA leverage below 6.0x and free cash flow falls to the low single digit percentage of total debt for an extended period of time. Moody's has taken the following rating actions: Issuer: Blue Coat Systems, Inc. Corporate Family Rating -- Affirmed, B2 Probability of Default Rating -- Revised to B2-PD, from B3-PD $25 million Senior Secured Revolving Credit Facility due 2017 -- Affirmed, B2, (LGD3, 33%), to be withdrawn upon closing of refinancing $500 million Senior Secured First Lien Term Loan due 2018 -- Affirmed, B2, (LGD3, 33%), to be withdrawn upon closing of refinancing $25 million Senior Secured Revolving Credit Facility due 2018 -- Assigned B2 (LGD3, 49%) $675 million Senior Secured First Lien Term Loan -- Assigned B2 (LGD3, 49%) Outlook -- Stable Headquartered in Sunnyvale, CA, Blue Coat Systems, Inc., is a leading provider of Internet security and wide area network acceleration solutions that help enterprises to secure and optimize their IT networks. Blue Coat reported $448 million in revenues under U.S. GAAP in the twelve months ended January 2013. The principal methodology used in rating Blue Coat Systems, Inc was the Global Software Industry Methodology published in May 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. BLUE COAT: S&P Rates $25MM Revolver Debt & $675 Term Loan 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Sunnyvale, Calif.-based Blue Coat Systems Inc. The outlook is stable. In addition, S&P assigned a 'BB-' issue rating and '2' recovery rating to the company's $25 million senior secured revolving credit facility (fully drawn at closing) and $675 million first- lien term loan. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of payment default. S&P expects the company to use the proceeds from the facilities to refinance existing debt and to purchase Jordan, which is a provider of threat protection security solutions. "The rating reflects Blue Coat's 'weak' business risk profile and 'aggressive' financial risk profile, incorporating relatively narrow product focus and high leverage," said Standard & Poor's credit analyst Katarzyna Nolan. Blue Coat's significant level of recurring revenue, growing addressable markets and stable cash flow generation partially offset these factors. Blue Coat is a niche participant in the global market for enterprise security software with significantly fewer resources than the major competitors such as Cisco Systems or McAfee (a division of Intel). In addition, the company has a secondary market position in the wide area network (WAN) optimization products, substantially behind the industry leader, Riverbed Technology. Furthermore, evolving market and customer requirements will necessitate ongoing investment in product development; S&P expects Blue Coat's annual research and development to remain at approximately 14% of revenues. These factors are partly offset by the company's established position in the secure Web gateway market, and significant customer switching costs. The company's two recent acquisitions of Crossbeam and Netronome, as well as the planned acquisition of Jordan, complement and enhance Blue Coat's existing security product suite and should provide for cross-sell opportunities across the company's diverse customer base. The stable rating outlook on Blue Coast Systems Inc. is based on Standard & Poor's Ratings Services' expectation that Blue Coat will maintain consistent profitability, supported by the company's diverse and recurring revenue base. S&P may lower the rating if the company's profitability is reduced due to integration issues or increased competition resulting in Blue Coat's financial profile to deteriorate significantly. This would be evidenced if leverage is sustained in the mid-5x area or free operating cash flow (FOCF) to debt is in the mid-single-digit percentages on a sustained basis. An upgrade in the near term is unlikely, given that the company's ownership structure likely precludes sustained leverage reduction. BLUE SPRINGS: Ford Motor Financing Increased to $1 Million ---------------------------------------------------------- Blue Springs Ford Sales, Inc., asks the U.S. Bankruptcy Court for the Western District of Missouri to allow it to obtain up to $1 million in additional financing from Ford Motor Credit Company. Under the DIP Order, the aggregate principal amount of postpetition advances was not to exceed the lesser of: (i) $8,000,000 (the "Original Cap"), or (ii) the "Advance Formula". The Advance Formula is defined in the DIP Order as the Original Cap less the outstanding balance of the Prepetition Indebtedness. The Debtor relates that FMCC has fully supported improved sales by extending credit to the Debtor, which permitted the Debtor to acquire the inventory necessary to support the corresponding increased vehicle sales. As of May 1, 2013 the outstanding principal balance due on the Prepetition Indebtedness is $34,195, and the outstanding principal balance due for postpetition advances made by FMCC to the Debtor is $8,329,395. FMCC and the Debtor have agreed that the DIP Order would be amended to increase the aggregate principal amount $9,000,000 (the "New Cap"), or (ii) the Advance Formula. The Advance Formula will be defined in the Amended DIP Order as the New Cap less the outstanding balance of the Prepetition Indebtedness. No other or further amendments to the DIP Order are requested. A copy of the motion is available for free at http://bankrupt.com/misc/BLUESPRINGS_dipfinancing.pdf Blue Springs Ford Blue Springs Ford Sales, Inc. -- http://www.bluespringsford.com/ -- is a Ford dealer, serving Blue Springs in Missouri. A jury verdict assessing actual damages of $171,500 and punitive damages in the amount of $1.75 million (54 times the actual damages) prompted Blue Springs Ford to seek Chapter 11 protection. The judgment was on account of a suit filed by a customer in Circuit Court of Jackson County, Missouri, under a variety of legal claims, including, but not limited to, the company's alleged failure to adequately disclose a full detailed vehicle history report in connection with a sale of a used Ford. Blue Springs Ford filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-10982) on March 21, 2012, listing $10 million to $50 million in assets and debts. Christopher A. Ward, Esq., at Polsinelli Shughart PC, serves as the Debtor's counsel. Donlin Recano & Company Inc. serves as the Debtor's claims agent. Delaware Bankruptcy Judge Mary F. Walrath in a March 28 order transferred the case's venue following an oral motion by the judgment, creditors Kimberly and Michael von David, at a March 23 hearing. The case was transferred to the U.S. Bankruptcy Court Western District of Missouri Court (Case No. 12-41176) and assigned to the Hon. Jerry W. Venters. Under the Plan, all allowed general unsecured claims are to be paid in full, with interest at the applicable post-judgment interest rates. BOMBARDIER INC: Moody's Says SkyWest Order is Credit Negative ------------------------------------------------------------- Moody's Investors Service said that the May 21, 2013 firm order from SkyWest, Inc. for 40 E-175 regional jets is credit positive for regional airframer Embraer SA and credit negative for Bombardier Inc. At an estimated current market value of about $28 million for the E-175, the value of the firm order approximates $1.1 billion, and the value for a conditional purchase agreement governing another 60 E-175 jets is roughly $1.8 billion. However, SkyWest likely received a significant discount relative to current market prices because an order of this size meaningfully extends the life of the program. Still, the order is credit positive for Embraer because the 40 firm aircraft meaningfully increases the E-175 backlog to almost 150 planes and will keep the production line running and boost operating cash flow through 2015. Perhaps most significantly, though, the order represents an important expansion of the relationship with SkyWest, whose current operating fleet is comprised of nearly 90% Bombardier Inc. aircraft. Headquartered in Sao Jose does Campos, Sao Paolo, Brazil, Embraer is the leading producer of regional jet airplanes with a growing defense business and a line of business jets. The company generated revenue approximating $6.2 billion for the twelve-month period ended March 2013. Headquartered in Montreal, Quebec, Canada, Bombardier Inc. is a diversified manufacturing company that operates through two business segments: Bombardier Aerospace ("BA") and Bombardier Transportation ("BT"). Most of BA's business is conducted within Bombardier Inc. itself, while BT is a subsidiary of Bombardier. The company generated revenue approximating $16.8 billion for the twelve-month period ended December 2012. On January 14, 2013, Moody's upgraded Bombardier's speculative grade liquidity rating to SGL-2 from SGL-3 and affirmed the company's Ba2 Corporate Family rating, Ba2-PD Probability of Default rating, and Ba2 senior unsecured ratings. Bombardier's rating outlook remains negative. The liquidity rating action recognizes the closing of Bombardier's $2 billion notes offering, which will boost its consolidated cash position to an estimated $5 billion. BOOMERANG SYSTEMS: Delays Form 10-Q for First Quarter ----------------------------------------------------- Boomerang Systems, Inc., was unable to file its quarterly report on Form 10-Q for the quarter ended March 31, 2013, within the prescribed period because of a delay in completing the audit for this period as a result of management requiring additional time to compile and verify the data required to be included in the report. The Company expects to file within the extension period. The Company estimates that its results of operations for the six months ended March 31, 2013, as reflected in its consolidated statements of operations to be included in its Form 10-Q for the six months ended March 31, 2013, will reflect the following changes: For the six months ended March 31, 2013, the Company expects to report a decrease in revenues to $289,234 from $380,778 for the six months ended March 31, 2012. For the six months ended March 31, 2013, the Company expects to report that it incurred a net loss of approximately $6 million, compared to a net loss of approximately $6.1 million for the six months ended March 31, 2012. Also, for the six months ended March 31, 2013, the Company expects to report loss per common share on a fully diluted basis of approximately $0.80 compared to loss per common share on a fully diluted basis of approximately $0.84 for the six months ended March 31, 2012. About Boomerang Systems Headquartered in Morristown, New Jersey, Boomerang Systems, Inc. (Pink Sheets: BMER) through its wholly owned subsidiary, Boomerang Utah, is engaged in the design, development, and marketing of automated racking and retrieval systems for automobile parking and automated racking and retrieval of containerized self-storage units. Boomerang incurred a net loss of $17.42 million for the fiscal year ended Sept. 30, 2012, compared with a net loss of $19.10 million during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $7.32 million in total assets, $22.96 million in total liabilities and a $15.63 million total stockholders' deficit. Bankruptcy Warning "Our operations may not generate sufficient cash to enable us to service our debt. If we were to fail to make any required payment under the notes and agreements governing our indebtedness or fail to comply with the covenants contained in the notes and agreements, we would be in default. Our debt holders would have the ability to require that we immediately pay all outstanding indebtedness. If the debt holders were to require immediate payment, we might not have sufficient assets to satisfy our obligations under the notes or our other indebtedness. In such event, we could be forced to seek protection under bankruptcy laws, which could have a material adverse effect on our existing contracts and our ability to procure new contracts as well as our ability to recruit and/or retain employees. Accordingly, a default could have a significant adverse effect on the market value and marketability of our common stock," the Company said in its annual report for the year ended Sept. 30, 2012. CARESTREAM HEALTH: S&P Puts 'B+' CCR on CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services said that it placed its 'B+' corporate credit rating on Rochester, N.Y.-based Carestream Health Inc. on CreditWatch with negative implications. The CreditWatch listing indicates that S&P could either affirm or lower the rating following the completion of S&P's analysis. The CreditWatch listing reflects S&P's initial assessment that the proposed dividend recapitalization could materially degrade Carestream's financial risk profile, which S&P currently views as "aggressive." "Although cash flow generation should provide some capacity for subsequent debt reduction, we believe prospective credit measures could deteriorate and remain outside of our expectations for the current 'B+' rating for a prolonged period," said Standard & Poor's credit analyst Svetlana Olsha. Those include debt to EBITDA of 4x-5x and funds from operations to debt of about 15%. Carestream currently has "adequate" sources of liquidity to cover its needs over the next 12 to 18 months. S&P will review the impact of the proposed refinancing transaction on the company's liquidity but would expect liquidity to remain adequate with sources continuing to exceed uses by 1.2x or more and for net sources to remain positive, even if EBITDA drops 15% from projected levels. The '2' recovery and 'BB-' issue-level ratings on the company's existing $2 billion senior secured credit facility are unaffected because S&P expects that Carestream will repay existing debt using the proceeds from the new financing. In resolving the CreditWatch listing, Standard & Poor's will assess Carestream's operating performance prospects, cash flow generation, deleveraging profile and financial policy in light of the sizeable dividend and new financing, as well as the impact of these actions on the company's credit measures. S&P could lower the corporate credit rating by one notch if S&P believes that Carestream will be unlikely to meet S&P's expectations at the current rating. CASALE MARBLE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Casale Marble Imports, Inc. 750 SW 17th Avenue Delray Beach, FL 33444 Bankruptcy Case No.: 13-21220 Chapter 11 Petition Date: May 14, 2013 Court: United States Bankruptcy Court Southern District of Florida (West Palm Beach) Judge: Erik P. Kimball Debtor's Counsel: Brett A Elam, Esq. THE LAW OFFICES OF BRETT A. ELAM, P.A. 105 S Narcissus Ave # 802 West Palm Beach, FL 33401 Tel: (561) 833-1113 E-mail: belam@brettelamlaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/flsb13-21220.pdf The petition was signed by Donato Walter Casale, president. CATASYS INC: Reports $2.6 Million Net Income in First Quarter ------------------------------------------------------------- Catasys, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $2.61 million on $135,000 of total revenues for the three months ended March 31, 2013, as compared with a net loss of $3.37 million on $93,000 of total revenues for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $3.33 million in total assets, $14.25 million in total liabilities and a $10.92 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/mLkf0N About Catasys Inc. Based in Los Angeles, California, Hythiam, Inc., n/k/a Catasys, Inc., is a healthcare services management company, providing through its Catasys(R) subsidiary specialized behavioral health management services for substance abuse to health plans. Catasys disclosed a net loss of $11.64 million on $541,000 of total revenues for the 12 months ended Dec. 31, 2012, as compared with a net loss of $8.12 million on $267,000 of total revenues in 2011. Rose, Snyder & Jacobs LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred significant operating losses and negative cash flows from operations during the year ended Dec. 31, 2012, which raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "As of March 28, 2013, we had a balance of approximately $1.6 million cash on hand. We had working capital deficit of approximately $376,000 at December 31, 2012 and have continued to deplete our cash position subsequent to December 31, 2012. We have incurred significant net losses and negative operating cash flows since our inception. We could continue to incur negative cash flows and net losses for the next twelve months. Our current cash burn rate is approximately $450,000 per month, excluding non- current accrued liability payments. We expect our current cash resources to cover expenses into July 2013, however delays in cash collections, revenue, or unforeseen expenditures could impact this estimate. We are in need to obtain additional capital and while we are currently in discussions with our existing shareholders regarding additional financing there is no assurance that additional capital can be raised in an amount which is sufficient for us or on terms favorable to our stockholders, if at all. If we do not obtain additional capital, there is a significant doubt as to whether we can continue to operate as a going concern and we will need to curtail or cease operations or seek bankruptcy relief. If we discontinue operations, we may not have sufficient funds to pay any amounts to stockholders." CBS I LLC: May 29 Status Hearing on Plan Disclosures ---------------------------------------------------- The hearing to approve the adequacy of the disclosure statement for debtor CBS I, LLC's Plan of Reorganization has been continued to May 29, 2013, at 9:30 a.m. As reported in the Troubled Company Reporter on Jan. 9, 2013, under the Plan dated Nov. 14, 2012, the classification and treatment of claims under the plan are: A. Administrative claims and priority tax claims will be paid in full in cash on or prior to the Effective Date. B. Holders of allowed secured claims of U.S. Bank will receive a refinanced secured loan, which will modify the U.S. Bank loan to allow Debtor to obtain secondary financing on the property of up to $750,000 in the future in order to repair, remodel, and make capital improvements to the Property. C. The holders of U.S. Bank's allowed general unsecured deficiency claims will receive payment of 5% of their allowed deficiency claim without interest or $99,885. This amount will be paid in 60 equal monthly payments in the amount of $1,664.75 to begin on the first of the month immediately following the Effective Date of the Plan. D. Holders of other general unsecured claims will receive payment of 100% of their claims to be paid in six months after entry of the confirmation order with simple interest at a rate of 3%. E. Insiders who hold unsecured claims will receive no payments. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/CBS_I_ds_2amended.pdf 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. CENTENNIAL BEVERAGE: Selling Remaining Assets to Cheers Spirits --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas authorized Centennial Beverage Group, LLC to sell the remaining assets to Cheers Spirits & Liquor LLC. The closing of the asset sale will be consummated on a store by store basis. 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 2012 were $158 million. Year-over-year, revenue was down 50%, according to a court filing. In its schedules, the Debtor 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. The Official Committee of Unsecured Creditors has retained Munsch Hardt Kopf & Harr, P.C. as its attorneys, and Lain, Faulkner & Co., P.C. as financial advisors CENTRAL ENERGY: Incurs $485,000 Net Loss in First Quarter --------------------------------------------------------- Central Energy Partners LP filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $485,000 on $1.31 million of revenues for the three months ended March 31, 2013, as compared with a net loss of $447,000 on $1.30 million of revenues for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $8.98 million in total assets, $9.58 million in total liabilities and a $592,000 total partners' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/oAgbYu About Central Energy Dallas, Tex.-based Central Energy Partners LP is a publicly-traded Delaware limited partnership. It currently provides liquid bulk storage, trans-loading and transportation services for hazardous chemicals and petroleum products through its wholly-owned subsidiary, Regional Enterprises, Inc. ("Regional"). Central Energy Partners LP filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $1.03 million on $5.47 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $1.36 million on $6.84 million of revenue during the prior year. Montgomery Coscia, LLP, in Plano, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing insufficient cash flow to pay its current obligations and contingencies as they become due. Bankruptcy Warning "If the Partnership does not have sufficient cash reserves, its ability to pursue additional acquisition transactions will be adversely impacted. Furthermore, despite significant effort, the Partnership has thus far been unsuccessful in completing an acquisition transaction. There can be no assurance that the Partnership will be able to complete an accretive acquisition or otherwise find additional sources of working capital. If an acquisition transaction cannot be completed or if additional funds cannot be raised and cash flow is inadequate, the Partnership and/or Regional would be required to seek other alternatives which could include the sale of assets, closure of operations and/or protection under the U.S. bankruptcy laws." CENTRAL EUROPEAN: Court OKs Hiring of Bankruptcy Professionals -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Central European Distribution Corporation, et al., to employ: 1. Skadden, Arps, Slate, Meagher & Flom LLP and affiliates as bankruptcy counsel; 2. Houlihan Lokey Capital, Inc. as financial advisor and investment banker; 3. Alvarez & Marsal North America, LLC and Alvarez & Marsal CIS LLP to provide a chief restructuring officer and certain additional personnel and (ii) designate Maxim Frangulov as chief restructuring officer; 4. KPMG LLP as service provider for tax compliance and tax consulting matters; and 5. Garden City Group, Inc. (GCG, Inc.) as voting agent and special noticing agent for publicly held securities. As reported in the Troubled Company Reporter on April 12, 2013, -- Skadden Arps agreed to render services at these hourly rates: partner at $825 to 1,220, counsel at 830 to 930 and associate at 360 to 795; -- Houlihan Lokey agreed for a monthly fee of $100,000 and a $750,000 opinion fee; -- A&M's personnel's hourly rates are: managing director at $675 to 875, director at 475 to 675, associate at 375 to 475 and analyst at 275 to 375; -- KPMG's personnel hourly rates are: partner and managing director at $555 to 730, senior manager/director at 390 to 630 and manager at 330 to 510. To the best of the Debtor's knowledge, the firms are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. On April 7, 2013, CEDC and two subsidiaries sought bankruptcy protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan that reduces debt by US$665.2 million. Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as legal counsel to the Debtor. Houlihan Lokey is the investment banker. Alvarez & Marsal will provide the chief restructuring officer. GCG Inc. is the claims and notice agent. The Bankruptcy Court approved the Disclosure Statement and confirmed the Second Amended and Restated Joint Prepackaged Plan of Reorganization. No Committee was appointed in the cases. CENTRAL EUROPEAN: U.S. Trustee Unable to Form Creditors Committee ----------------------------------------------------------------- Roberta A. Deangelis, U.S. Trustee for Region 3 notified the Bankruptcy Court that she was unable to appoint an official committee of unsecured creditors in the Chapter 11 cases of Central European Distribution Corporation, et al. According to the Trustee, no unsecured creditor responded to the U.S. Trustee's communication/contact for service on the committee. About CEDC Mt. Laurel, New Jersey-based Central European Distribution Corporation is one of the world's largest vodka producers and Central and Eastern Europe's largest integrated spirit beverages business with its primary operations in Poland, Russia and Hungary. On April 7, 2013, CEDC and two subsidiaries sought bankruptcy protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10738) with a prepackaged Chapter 11 plan that reduces debt by US$665.2 million. Attorneys at Skadden, Arps, Slate, Meagher & Flom LLP serve as legal counsel to the Debtor. Houlihan Lokey is the investment banker. Alvarez & Marsal will provide the chief restructuring officer. GCG Inc. is the claims and notice agent. The Bankruptcy Court approved the Disclosure Statement and confirmed the Second Amended and Restated Joint Prepackaged Plan of Reorganization. CHARTIS EXCESS: U.S. Court Recognizes Irish Proceedings ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York recognized the proceeding concerning Chartis Excess Limited's scheme of arrangement sanctioned by a court in Ireland as a foreign main proceeding pursuant to section 1517(b)(1) of the Bankruptcy Code. The Court's order provides that nothing in the order or the scheme will terminate or render unenforceable the General Guarantee Agreement dated May 28, 1998, pursuant to which National Union Fire Insurance Company of Pittsburgh, Pennsylvania, USA agreed to guarantee the obligations of the Company (under its former name: Starr Excess Liability Insurance About Chartis Excess Limited Chartis Excess Limited, an Irish member of American International Group Inc., filed a petition under Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 13-10526) in Manhattan on March 25, 2013, to seek recognition of its scheme of arrangement sanctioned by a court in Ireland. Chartis is a non-life insurance and reinsurance company, which operates from its head office in Ireland and through branch offices in Bermuda and the United Kingdom. The Company is a member of a group of insurance companies known as the AIG Group. Alexander Rosati serves as foreign representative. Howard Seife, Esq., at Chadbourne & Parke, LLP, is the counsel in the U.S. case. The Debtor estimated assets and debts in excess of $100 million. CHEYENNE HOTEL: Can Employ Hunter Realty as Listing Agent --------------------------------------------------------- Cheyenne Hotels LLC sought and obtained approval from the U.S. Bankruptcy Court to employ Hunter Realty Associates, Inc. as listing agent for the Debtor's Hotel Property. The Debtor's principal asset consists of a hotel located in Salida, Colorado operating under the trade name "Hampdon Inn & Suites." The Debtor's interest in the Hotel Property is subject to secured claims. The Debtor has negotiated an Exclusive Listing Contract with the Broker. The Listing Contract calls for a listing price of $10,500,000, for a six-month term, and a commission of 3% of the sales price if no other broker is involved in the sale, and an additional 1% of the sales price if another broker is involved. The Listing Contract is subject to approval by this Court. Danny Givertz attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Cheyenne Hotel Investments Cheyenne Hotel Investments LLC filed for Chapter 11 bankruptcy protection (Bankr. D. Colo. Case No. 11-25379) on June 28, 2011, disclosing assets of $12,912,702 and liabilities of $8,074,325 as of the Petition Date. Thomas F. Quinn, Esq., represents the Debtor as counsel. Cheyenne Hotel Investments, LLC, owns a property consisting of a 104 room hotel located in Colorado Springs, and known as Homewood Suites by Hilton. CHRYSLER GROUP: Two Summary Judgment Bids on Dealer LOIs Denied --------------------------------------------------------------- Before the U.S. District Court for the Eastern District of Michigan in the litigation between Chrysler Group LLC and several of its dealer parties is the issue of whether New Chrysler issued to its remaining rejected dealers its "customary and usual" letter of intent to enter into a sales and service agreement Upon the 2009 bankruptcy of Chrysler LLC (Old Chrysler), Congress enacted in December 2009, Section 747 of the Consolidated Appropriations Act of 2010 to grant arbitration rights to dealerships that were rejected in Chrysler's bankruptcy. Those arbitration determinations however gave rise to the ligitation because the parties disagree as to what happens next after those arbitration rulings. In addition to Chrysler Group LLC (New Chrysler), there are two different groups of dealers who became parties to the action. First, eight dealers whose franchise agreements were rejected by Old Chrysler and who prevailed in Section 747 arbitrations with New Chrysler became parties in these consolidated actions: (1) Livonia Chrysler Group LLC; (2) Village Chrysler Jeep, Inc. d/b/a Village Automotive Center; (3) Fox Hills Motor Sales, Inc. d/b/a Fox Hills Chrysler Jeep; (4) Boucher Imports, Inc. d/b/a Frank Boucher Chrysler); (5) Jim Marsh American Corp.; (6) Spitzer Autoworld Akron, LLC; (7) BGR, LLC d/b/a Deland Dodge; and (8) Sowell Automotive, Inc., d/b/a Dodge City Chrysler Jeep -- collectively, the Rejected Dealers). Second, there are a number of existing dealers who became parties because they oppose New Chrysler establishing or relocating a dealer who prevailed in a Section 747 arbitration into their area without following the provisions of state-law dealer acts -- the Interested Dealers. After due deliberation, the Michigan District Court, in a March 27, 2012 Opinion and Order, declared that the sole and exclusive remedy for a dealer rejected by Old Chrysler who prevails in a Section 747 arbitration with New Chrysler is a customary and usual letter of intent ("LOI") to enter into a sales and service agreement with New Chrysler. Section 747 does not provide reinstatement of a rejected dealer who prevails in a Section 747 arbitration with New Chrysler, nor does it authorize an award of monetary damages, the District Court further declared. The March 27 Order, however, does not dispose of all claims and counterclaims in the action. The matter is now before the District Court on two summary judgment motions: (1) Livonia's Motion for Summary Judgment, wherein Livonia asks the Court to rule that the LOI it was issued by New Chrysler is not New Chrysler's "customary and usual" LOI and it is not in compliance with the Act; and (2) New Chrysler's Motion for Summary Judgment, wherein it asks the Court to rule that, with respect to all of the claims of Rejected Dealers, there is no genuine issue of material fact that they were provided LOIs that were customary and usual, in compliance with Section 747. In an April 11, 2013 opinion, the District Court rejects that argument that New Chrysler does not have a 'customary and usual' LOI because (i) they always vary to some extent, and (ii) New Chrysler has later modified provisions when entering into settlement agreement with other parties. Judge Sean F. Cox said that "[b]y using the phrase 'customary and usual,' Congress appeared to reference a typical or usual LOI. It could have required the issuance of a specific or standard LOI, but chose not to do so." Instead, he held that "the proper inquiry is to the LOIs New Chrysler issued, not whether New Chrysler and other parties subsequently negotiated settlements wherein New Chrysler agreed to modify terms." The judge also clarified that the rejected dealers are not entitled to LOIs that state their previous franchises are being reinstated. Judge Cox further held that contrary to New Chrysler's assertion, rejected dealeres who signed the LOIs to them are not precluded from arguing that those LOIs do not comply with the Act. Accordingly, the District Court denied the parties' motions for summary judgment. The matter will proceed to a bench trial on Tuesday, July 9, 2013, at 8:30 a.m., Judge Cox ruled. Moreover, the District Court will hold a Final Pretrial Conference on Monday, June 3, 2013, at 2:30 p.m. The action is Chrysler Group LLC, Plaintiff, v. South Holland Dodge, Inc., et al., Defendants; Consolidated with Livonia Chrysler Jeep, Inc., a Michigan for profit corporation, Plaintiff, v. Chrysler Group, LLC, et al., Defendants; Consolidated with Chrysler Group LLC, Plaintiff, v. Sowell Automotive, Inc., et al., Defendants, Case Nos. 10-12984, 10-13290, 10-13908 (E.D. Mich.) A copy of Judge Cox's April 11, 2013 Opinion and Order is available at http://is.gd/q3G9Icfrom Leagle.com. About Chrysler Group Chrysler Group LLC, formed in 2009 from a global strategic alliance with Fiat Group, produces Chrysler, Jeep(R), Dodge, Ram Truck, Mopar(R) and Global Electric Motorcars (GEM) brand vehicles and products. Headquartered in Auburn Hills, Michigan, Chrysler Group LLC's product lineup features some of the world's most recognizable vehicles, including the Chrysler 300, Jeep Wrangler and Ram Truck. Fiat will contribute world-class technology, platforms and powertrains for small- and medium-sized cars, allowing Chrysler Group to offer an expanded product line including environmentally friendly vehicles. Chrysler LLC and 24 affiliates on April 30, 2009, sought Chapter 11 protection from creditors (Bankr. S.D.N.Y (Mega-case), Lead Case No. 09-50002). The U.S. and Canadian governments provided Chrysler LLC with $4.5 billion to finance its bankruptcy case. In connection with the bankruptcy filing, Chrysler reached an agreement to sell all assets to an alliance between Chrysler and Italian automobile manufacturer Fiat. Under the terms approved by the Bankruptcy Court, the company formerly known as Chrysler LLC in June 2009, formally sold substantially all of its assets to the new company, named Chrysler Group LLC. * * * Chrysler has a 'B1' corporate family rating from Moody's. Moody's upgraded the rating from 'B2' to 'B1' in February 2013. Moody's said that the upgrade reflects Moody's expectation that Chrysler will be able to sustain the progress it has made during the past 18 months in strengthening its competitive position in North America. CINEMARK USA: Moody's Rates New $530MM Sr. Unsecured Notes 'B2' --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the proposed $530 million senior unsecured notes of Cinemark USA, Inc. (Cinemark). The company plans to use proceeds primarily to redeem its existing 8.625% senior unsecured bonds ($470 million outstanding). The transaction does not meaningfully alter total debt or the mix of debt capital, and all other ratings, including Cinemark's B1 corporate family rating, are unchanged. A summary of this action follows. Cinemark USA, Inc. Senior Unsecured Bonds, Assigned B2, LGD4, 66% 8.625% Senior Unsecured Bonds, B2, LGD adjusted to LGD4, 66% from LGD4, 67% 5.125% Senior Unsecured Bonds, B2, LGD adjusted to LGD4, 66% from LGD4, 67% Senior Secured Bank Credit Facility, Ba1, LGD adjusted to LGD2, 15% from LGD2, 16% Ratings Rationale: Cinemark reported leverage of approximately 5.1 times debt-to- EBITDA (per Moody's adjustments, including the capitalization of operating leases) for the twelve months ended March 31. Adjusted for the proposed transaction and the previously announced acquisition of theaters from Rave Real Property Holdco, LLC (Rave), Moody's estimates comparable leverage. The transaction favorably extends the maturity profile and will likely reduce annual interest expense. Given the sizeable cash balance (approximately $725 million as of March 31, with approximately $240 million likely to be used to fund the Rave acquisition), the debt issuance demonstrates the desire to maintain financial flexibility rather than to improve credit metrics by repaying debt with cash on hand. This behavior is in line with the company's track record. However, the cash balance positions the company well to execute on potential acquisitions, which could improve the credit profile. Cinemark's B1 corporate family rating incorporates its high leverage (approximately 5.1 times debt-to-EBITDA), which poses challenge for operating in an inherently volatile industry reliant on movie studios for product to drive the attendance that leads to cash flow from admissions and concessions. Very good liquidity, including a sizeable cash balance (approximately $725 million as of March 31, with the Rave acquisition likely to use up about $240 million of cash), enables the company to better manage attendance related volatility and indicates the ability to improve the credit profile, though the company has to date demonstrated limited desire to do so. Cinemark also benefits from scale and geographic diversity, as well as good growth prospects for its international business. Moody's considers North American theatrical exhibition a mature industry with low-to-negative growth potential, high fixed costs and increasing competition from alternative media and anticipates attendance growth will lag behind population growth for the foreseeable future, with year to year volatility driven by the popularity of the product. However, the industry remains viable and stable throughout economic cycles. Cinemark differentiates itself from rated peers with its industry leading margins and the better growth prospects in its international operations. Cinemark's ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside Cinemark's core industry and believes Cinemark's ratings are comparable to those of other issuers with similar credit risk. 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 Plano, Texas, Cinemark Holdings, Inc., which owns Cinemark USA, Inc. (Cinemark), operates 467 theatres with 5,259 screens in 39 U.S. states, Brazil, Mexico, Argentina and 10 other Latin American countries. Its annual revenue is approximately $2.4 billion. CINEMARK USA: S&P Assigns 'BB-' Rating to $530MM Senior Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned Plano, Texas-based Cinemark USA Inc.'s proposed $530 million senior notes due 2023 an issue-level rating of 'BB-', with a recovery rating of '4'. The '4' recovery rating indicates S&P's expectation of average (30% to 50%) recovery for noteholders in the event of a payment default. The 'BB-' issue rating is at the same level as the 'BB-' corporate credit rating on the company, as per S&P's notching criteria for a recovery rating of '4'. The company will use net proceeds from the transaction to redeem its senior unsecured notes due 2019. Leverage increases modestly, to 4.8x from 4.7x, for the 12 months ended March 31, 2013. S&P expects EBITDA coverage of interest to improve to about 5.1x from about 4.5x pro forma for the transaction. The 'BB-' corporate credit rating on parent company Cinemark Holdings Inc. reflects Standard & Poor's expectation that leverage and capital spending will remain relatively high, but that Cinemark will continue to be among the most profitable theater chains, despite potential for some slowing of its long-term growth. S&P considers the company's business risk profile to be "fair" (based on its criteria) because of its consistent operating performance, despite the inherent unpredictably of the movie business. Relatively high leverage and aggressive capital spending plans underpins S&P's view that Cinemark's financial risk profile is "aggressive." RATINGS LIST Cinemark Holdings Inc. Cinemark USA Inc. Corporate Credit Rating BB-/Stable/-- Cinemark USA Inc. $530 mil sr unsecd nts due 2023 BB- Recovery Rating 4 CJI LLC: Case Summary & 5 Largest Unsecured Creditors ----------------------------------------------------- Debtor: CJI, LLC 6231 Cove Creek Ct Burr Ridge, IL 60527 Bankruptcy Case No.: 13-20276 Chapter 11 Petition Date: May 14, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: Matthew E. McClintock, Esq. GOLDSTEIN & MCCLINTOCK LLLP 208 South LaSalle Street Suite 1750 Chicago, IL 60604 Tel: (312) 337-7700 E-mail: mattm@restructuringshop.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company's five largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ilnb13-20276.pdf The petition was signed by Joseph A. Peterchalk, sole and sole member. CLEAR CHANNEL: Commences Private Offer for 10.75% Senior Notes -------------------------------------------------------------- Clear Channel Communications, Inc. on May 21 disclosed that it has commenced a private offer to holders of CCU's outstanding 10.75% Senior Cash Pay Notes due 2016 and 11.00%/11.75% Senior Toggle Notes due 2016 to exchange any and all Outstanding Notes for its newly issued Senior Notes due 2021. The Exchange Offer, which is only available to holders of Outstanding Notes that have certified their status as (i) both a "qualified institutional buyer" as that term is defined in Rule 144A under the Securities Act of 1933, as amended and an institutional "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, or (ii) not a "U.S. person" as that term is defined in Rule 902 under the Securities Act, is being made pursuant to an Offering Circular dated May 21, 2013, and is exempt from registration under the Securities Act. Eligible Holders of Outstanding Notes must submit a letter of transmittal on or prior to 11:59 p.m., New York City time, on June 18, 2013 unless extended, in order to be eligible to receive New Notes in the Exchange Offer. A participating holder that tenders Outstanding Notes will receive the following consideration on the closing date of the Exchange Offer: Clear Channel CUSIP Nos. Communications, Inc. Outstanding Notes to be Exchanged Outstanding Cash Pay Notes 184502BB7 Outstanding Toggle Notes 184502BE1 Consideration for each $1,000 Principal Amount of Outstanding Notes Tendered on or Prior to 5:00 p.m., New York City time, Outstanding on June 4, 2013, unless extended Aggregate (the "Early Tender Date") Principal Amount $796,250,000 $1,000 of New Notes $1,282,493,821 (1) $930 of New Notes and $70 of cash Consideration for each $1,000 Principal Amount of Outstanding Notes Tendered After the Early Tender Date $950 of New Notes $880 of New Notes and $70 of cash (1) Amount includes outstanding toggle notes held by CCU and its subsidiaries. Accrued and unpaid interest on accepted Outstanding Notes will be paid in cash on the closing date of the Exchange Offer. Tenders of Outstanding Notes may be withdrawn prior to 5:00 p.m., New York City time, on June 4, 2013, unless extended by us. Consummation of the Exchange Offer is subject to the satisfaction or waiver of certain conditions, including the receipt of valid tenders of Outstanding Notes, not withdrawn, of at least $500.0 million principal amount (excluding Outstanding Notes held by CCU or any of its affiliates). CCU reserves the right, in its sole discretion, to waive or modify any one or more of the conditions to the Exchange Offer. Holders of greater than $550.0 million of principal amount of the Outstanding Notes (not including subsidiaries of CCU that hold Outstanding Notes) have agreed to tender their Outstanding Notes in the Exchange Offer. The New Notes will accrue interest at the rate of (i) 12.0% per annum in cash and (ii) 2.0% per annum through the issuance of PIK notes, and will mature on February 1, 2021. The Outstanding Notes are, and the New Notes will be, fully and unconditionally guaranteed, jointly and severally, on a senior basis by CCU's parent, Clear Channel Capital I, LLC, and all of CCU's existing domestic wholly-owned restricted subsidiaries. The New Notes and related guarantees will be offered only in reliance on exemptions from registration under the Securities Act. The New Notes and the related guarantees have not been registered under the Securities Act, or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States without registration or an applicable exemption from the Securities Act and applicable state securities or blue sky laws and foreign securities laws. Documents relating to the Exchange Offer will only be distributed to holders of the Outstanding Notes that complete and return a letter of eligibility confirming that they are Eligible Holders. Holders of the Outstanding Notes that desire a copy of the eligibility letter may contact D.F. King & Co., Inc., the exchange agent and information agent for the Exchange Offer, by calling toll-free (800) 829-6554 or at (212) 269-5550 (banks and brokerage firms) or visit the website for this purpose at http://www.dfking.com/ccu This press release is for informational purposes only and shall not constitute an offer to sell or exchange nor the solicitation of an offer to buy the New Notes or any other securities. The Exchange Offer is not being made to any person in any jurisdiction in which the offer, solicitation or sale is unlawful. Any offers of the New Notes will be made only by means of the Offering Circular. About Clear Channel Communications San Antonio, Texas-based Clear Channel Communications, Inc., an indirect subsidiary of CC Media Holdings, Inc. (OTCBB: CCMO), is one of the leading global media and entertainment companies specializing in radio, digital, outdoor, mobile, live events, and on-demand entertainment and information services for local communities and providing premier opportunities for advertisers. CC Media Holdings Inc. -- http://www.ccmediaholdings.com/-- is a global media and entertainment company. Its businesses include radio and outdoor displays. Clear Channel's balance sheet at March 31, 2013, showed $15.51 billion in total assets, $23.72 billion in total liabilities and a $8.20 billion total shareholders' deficit. As reported by the Troubled Company Reporter on May 21, 2013, Moody's Investors Service said that Clear Channel Communications, Inc.'s upsize of the term loan D to $4 billion from $1.5 billion will not impact the Caa1 facility rating assigned. Clear Channel's Corporate Family Rating is unchanged at Caa2. The outlook remains Stable. As reported by the Troubled Company Reporter on May 21, 2013, Standard & Poor's Ratings Services announced that its issue-level rating on San Antonio, Texas-based Clear Channel Communications Inc.'s senior secured term loan remains unchanged at 'CCC+' following the company's upsize of the loan to $4 billion from $1.5 billion. The rating on parent company CC Media Holdings Inc. remains at 'CCC+' with a negative outlook, which reflects the risks surrounding the long-term viability of the company's capital structure. COATES INTERNATIONAL: Incurs $805,800 Net Loss in First Quarter --------------------------------------------------------------- Coates International, Ltd., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $805,848 on $4,800 of sublicensing fee revenue for the three months ended March 31, 2013, as compared with a net loss of $1.39 million on $4,800 of sublicensing fee revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $2.42 million in total assets, $4.92 million in total liabilities and a $2.50 million total stockholdes' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/lKrdq6 About Coates International Based in Wall Township, N.J., Coates International, Ltd. (OTC BB: COTE) -- http://www.coatesengine.com/-- was incorporated on August 31, 1988, for the purpose of researching, patenting and manufacturing technology associated with a spherical rotary valve system for internal combustion engines. This technology was developed over a period of 15 years by Mr. George J. Coates, who is the President and Chairman of the Board of the Company. The Coates Spherical Rotary Valve System (CSRV) represents a revolutionary departure from the conventional poppet valve. It changes the means of delivering the air and fuel mixture to the firing chamber of an internal combustion engine and of expelling the exhaust produced when the mixture ignites. Coates International disclosed a net loss of $4.53 million on $0 of sales for the year ended Dec. 31, 2012, as compared with a net loss of $2.99 million on $125,000 of sales for the year ended Dec. 31, 2011. Cowan, Gunteski & Co., P.A., in Tinton Falls, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing negative cash flows from operations, recurring losses from operations, and a stockholders' deficiency that raise substantial doubt about the Company's ability to continue as a going concern. COMMSCOPE HOLDING: Senior Unsecured Notes Get Moody's Caa1 Rating ----------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to CommScope Holding Company Inc.'s proposed senior unsecured notes. Moody's also revised the rating of CommScope Inc.'s senior secured term loan to Ba2 from Ba3 and affirmed all other ratings, including the Corporate Family Rating ("CFR") of B2. Proceeds of the proposed debt will be used to fund a distribution to shareholders and for general corporate purposes. The debt-funded dividend is detrimental to the credit profile but does not impact the CFR or stable outlook. The incremental debt would increase the adjusted financial leverage to approximately 5.4x Debt/EBITDA on a pro forma basis for the twelve months ended March 31, 2013. Leverage is expected to decline towards 5x by the end of the year as the company continues to implement margin improvement strategies as well as benefit from the strength in the wireless segment. While leverage levels increase with the transaction, CommScope's credit metrics remain within the range acceptable for the B2 rating. Funded debt will, however, be higher than at the close of Carlyle's 2011 buyout ($3.1 billion vs. $2.7 billion for the buyout). Given the cyclical nature of the business, leverage could easily surpass the level at close of the buyout. Though carrier spending related to Long Term Evolution (LTE) network build outs in the US has greatly benefited CommScope recently and lends support to CommScope's 2013 plan, spending patterns remain unpredictable in the long term and related growth volatile. Ratings Rationale: The B2 rating reflects the high financial leverage, the frequency and severity of downturns in the connectivity industry and challenges in predicting carrier spending patterns. The high financial risk is balanced by the company's leading positions across multiple end-markets, CommScope's scale and the seasoned management team which has steered the company through multiple industry cycles. The ratings also reflect the concentration in the wireless carrier business which has been impacted by inherent large fluctuations in telecom carrier build-out and upgrade spending. Although it has been difficult to predict performance in this and other key end markets, CommScope has good cash flow generating capabilities in up and down markets. Moody's expects modest growth over the next twelve months primarily driven by wireless carrier infrastructure spending. Given the sensitivity to the global economy however, overall revenues could easily decline if the environment worsens. While the business is cyclical, revenues are expected to organically grow at 2% to 4% on average over the next several years. The stable rating outlook assumes that credit measures will improve in the near-term and the company will maintain a good liquidity position. Ratings could face downward pressure if leverage trends towards 6.5x or there is a deterioration in Commscope's core markets. Additional debt financed shareholder distributions could also negatively impact the ratings. Given the aggressive financial policies of the company, an upgrade is unlikely in the near term. The ratings on the individual debt instruments were determined in conjunction with Moody's Loss Given Default methodology and reflect the instruments relative positions in the capital structure. Assignments: Issuer: CommScope Holding Company, Inc. Proposed Senior Unsecured Regular Bond/Debenture, Caa1, LGD6, 93 % Upgrades: Issuer: CommScope, Inc. Senior Secured Bank Credit Facility, Upgraded to Ba2 LGD2, 21 % from Ba3 LGD2, 28 % Affirmations: Issuer: CommScope, Inc. Corporate Family Rating at B2 Probability of Default Rating at B2-PD Senior Unsecured Regular Bond/Debenture, Affirmed B3, revised to LGD4, 65 % from LGD5, 76 % Outlook: Issuer: CommScope, Inc. Stable Upon the closing of debt at the parent level, the corporate family rating will be moved to CommScope Holding Company, Inc. from CommScope Inc. The principal methodology used in this rating was the Global Manufacturing 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. CommScope Inc., headquartered in Hickory, North Carolina, is a leading global provider of connectivity and infrastructure solutions targeted towards cable and telecom service providers as well as the enterprise market. The company had LTM revenues of over $3 billion for the period ended March 31, 2013. COMMUNICATION INTELLIGENCE: Incurs $1.2 Million Net Loss in Q1 -------------------------------------------------------------- Communication Intelligence Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.19 million on $235,000 of total revenue for the three months ended March 31, 2013, as compared with a net loss of $819,000 on $667,000 of total revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $1.98 million in total assets, $1.50 million in total liabilities and $486,000 in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/wxP9U4 About Communication Intelligence Redwood Shores, California-based Communication Intelligence Corporation is a supplier of electronic signature products and the recognized leader in biometric signature verification. In its audit report accompanying the financial statements for 2011, PMB Helin Donovan, LLP, in San Francisco, Calif., expressed substantial doubt about Communication Intelligence's ability to continue as a going concern. The independent auditors noted that of the Company's significant recurring losses and accumulated deficit. The Company reported a net loss of $4.50 million for 2011, compared with a net loss of $4.16 million for 2010. COMMUNITY HOME: Court OKs Deal on Use of Cash Collateral -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Mississippi signed an agreed order that resolves Edwards Family Partnership, LP and Beher Holdings Trust's second motion to prohibit Community Home Financial Services, Inc.'s use of cash collateral, or, in the alternative, for adequate protection. The agreed order provides that, among other things: 1. Beginning on May 1, 2013, and continuing until further order of the Court, the Debtor will place all collections on the home improvement loan transaction into a separate escrow account established by the Debtor at Wells Fargo Bank. The Debtor will provide EFP and BHT with internet access to view the account. 2. By May 3, the Debtor will provide a three month budget of the expenditures it anticipates during that time period and only those expenses that are in the budget will be paid from the escrow account. 3. All funds collected on the home improvement loan transaction loans will be held in the escrow account and not dispersed, other than to pay budgetary items, unless ordered otherwise by the Court. About Community Home Financial Community Home Financial Services, Inc., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No. 12-01703) on May 23, 2012. Community Home Financial is a specialty finance company located in Jackson, Mississippi, providing contractors with financing for their customers. CHFS operates from one central location providing financing through its dealer network throughout 25 states, Alabama, Delaware, and Tennessee. The Debtor, in an amended schedule, disclosed $46,285,699 in assets and $30,271,339 in liabilities as of the Chapter 11 filing. Judge Edward Ellington presides over the case. Derek A. Henderson, Esq., at Derek A. Henderson Law Office, in Jackson, Mississippi; Jonathan Bissette Esq., at Wells Marble & Hurst, PLLC, in Jackson, Mississippi; and Roy H. Liddell, Esq., at Wells Marble & Hurst, PLLC, in Ridgeland, Mississippi, represent the Debtor as counsel. COOPER-BOOTH: Succumbs to Ch. 11 After Cigarette Smuggling Probe ---------------------------------------------------------------- Cooper-Booth Wholesale Company, L.P. and two affiliates sought Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 13-14519) in Philadelphia on May 21, 2013, after the U.S. government seized its bank accounts to recover payments made by a large customer caught smuggling Virginia-stamped cigarettes into New York. Serving the mid-Atlantic region, Cooper Booth is one of the top 20 convenience store wholesalers in the country. Cooper supplies cigarettes, snacks, beverages and other food items from Hershey's, Lellogg's, Bic, and Mars to convenience stores. Cooper Booth has been in the wholesale distribution business since 1865 when the Booth Tobacco Company was incorporated in Lancaster, Pennsylvania. The company has been family owned and operated for three generations. "The Debtors were experiencing sales growth, were operating profitably, and the future was bright and prosperous," Barry Margolis, president of Cooper-Booth Management Company, explains in court filings. However, just last week, the company learned that one of its customers, with multiple locations in Virginia, was accused of smuggling Virginia stamped cigarettes into New York. As part of the investigation, the U.S. Government on Thursday last week seized the main operating account of Wholesale at PNC Bank, National Association, to recover payments for merchandise made by the customer that was arrested, putting the company in the precarious position of not being able to access funds to run the day-to-day operations of the business. In reaction to the seizure warrant, PNC declared the Debtor in default of their prepetition credit facilities. Accordingly, the Debtors sought Chapter 11 so that they can protect their assets while they reorganize their affairs. The Company's assets include $700,000 in cash, $2.1 million in the garnished account at PNC Bank, accounts receivable of $28.3 million, inventory of $23.1 million, and equipment of $5.8 million. As of the Petition Date, the Debtors' total consolidated funded senior debt obligations were approximately $10.7 million and consisted of, among other things, $7.72 million owing on a revolving line of credit facility, $2.83 million owing on a line of credit for the purchase of equipment, and $166,000 due on a corporate VISA Card. PNC Bank asserts that the letter of credit facility is secured by all personal property owned by Wholesale. Unsecured trade payables totaled $22.8 million as of May 21, 2013. First Day Motions To minimize the adverse effects of the Chapter 11 filing on the business, the Debtors have filed a variety of "first day" motions. The Debtors filed, among other things, a request to use cash collateral. The Debtors say they require the ability to use cash and the proceeds of existing accounts receivable to maintain the operation of their business and preserve its value as a going concern. The Debtors also sought approval to pay wages and benefits owed to 250 employees, prohibit utility companies from discontinuing service, and honor and maintain customer programs. The Debtors ask the Court to extend the deadline to file the formal schedules of assets and liabilities and statement of financial affairs. The Debtors said that they won't be able to complete the documents by the 14-day deadline established by the Bankruptcy Rules. COOPER-BOOTH: Taps Maschmeyer as Bankruptcy Counsel --------------------------------------------------- Cooper-Booth Wholesale Company, L.P. and two affiliates seek approval from the bankruptcy court to hire Maschmeyer Karalis P.C. as counsel. The Debtors have selected MK because of the firm's considerable experience in Chapter 11 proceedings and in other areas of law applicable to the bankruptcy cases. The current rates of MK's personnel are: Hourly Rate ----------- Shareholders $500 Associates $190 to $420 Paralegals $120 MK does not hold nor represent any interest adverse to the Debtors and is a "disinterested person" within the meaning of Sec. 101(14) of the Bankruptcy Code. On the Petition Date, MK received a retainer of $200,000 from the Debtors. It has received no other payments from the Debtors within one year of the Petition Date. Special Counsel The Debtor said in the affidavit explaining the details of the bankruptcy filing that it is also seeking to employ Blank Rome LLP as special counsel. The services which Blank Rome will provide to the Debtors include, but are not limited to, providing advice and representation concerning the seizure warrant issued by the U.S. District Court for the Eastern District of New York, including negotiations with federal agencies concerning the seizure warrant. The application was not available in the docket as of the Petition Date. COOPER-BOOTH: Proposes ESBA as Financial Advisor ------------------------------------------------ Cooper-Booth Wholesale Company, L.P. and two affiliates seek approval to hire Executive Sounding Board Associates, Inc., as financial advisors. ESBA will, among other things, assist the Debtors with the development, evaluation, negotiation and execution of any potential plan of reorganization or restructuring transaction. On the petition date, ESBA received a retainer in the amount of $100,000. The firm's Michael DuFrayne will lead the project. His billing rate is $525 per hour but will be discounted to $495 per hour for this engagement. Other ESBA professionals will charge at these rates: Managing Directors $495 to $550 Directors $350 to $425 Consultants $250 to $345 ESBA will also seek to be reimbursed for reasonable out-of-pocket expenses. Mr. DuFrayne can be reached at: Micahel DuFrayne Managing Director EXECUTIVE SOUNDING BOARD ASSOCIATES INC. Tel: (215) 568-5788 Fax: (215) 568-5769 E-mail: mdufrayne@esba.com CYCLONE POWER: Incurs $668,800 Net Loss in First Quarter -------------------------------------------------------- Cyclone Power Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $668,886 on $251,441 of revenues for the three months ended March 31, 2013, as compared with a net loss of $776,592 on $0 of revenues for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $1.38 million in total assets, $4.14 million in total liabilities and a $2.76 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/bpxUiC About Cyclone Power Pompano Beach, Fla.-based Cyclone Power Technologies, Inc. (Pink Sheets: CYPW) is a clean-tech engineering company, whose business is to develop, commercialize and license its patented Rankine cycle engine technology for applications ranging from renewable power generation to transportation. The Company is the successor entity to the business of Cyclone Technologies LLLP, a limited liability limited partnership formed in Florida in June 2004. Cyclone Technologies LLLP was the original developer and intellectual property holder of the Cyclone engine technology. Cyclone Power disclosed a net loss of $3 million on $1.13 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $23.70 million on $250,000 of revenue in 2011. Mallah Furman, in Mallah Furman, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company's dependence on outside financing, lack of sufficient working capital, and recurring losses raises substantial doubt about its ability to continue as a going concern. DAIS ANALYTIC: Incurs $306,000 Net Loss in First Quarter -------------------------------------------------------- Dais Analytic Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $306,149 on $620,042 of revenue for the three months ended March 31, 2013, as compared with a net loss of $18,383 on $1.03 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $1.08 million in total assets, $4.26 million in total liabilities and a $3.18 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/lQG88d About Dais Analytic Odessa, Fla.-based Dais Analytic Corporation has developed and patented a nano-structure polymer technology, which is being commercialized in products based on the functionality of these materials. The initial product focus of the Company is ConsERV, an energy recovery ventilator. The Company also has new product applications in various developmental stages. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, Cross, Fernandez & Riley LLP, in Orlando, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses since inception and has a working capital deficit and stockholders' deficit of $3.22 million and $4.90 million at Dec. 31, 2011. The Company reported a net loss of $2.33 million in 2011, compared with a net loss of $1.43 million in 2010. DBSI INC: Goldsmith's Motions in Litigation Trustee's Suit Denied ----------------------------------------------------------------- The lawsuit JAMES R. ZAZZALI, as Litigation Trustee for the DBSI Estate Litigation Trust, Plaintiff, v. MARTY GOLDSMITH and JOHN DOE 1-10, Defendants, Adv. No. 12-06056-TLM (Bankr. D. Idaho), seeks certain alleged fraudulent transfers made by certain of DBSI's affiliated debtors and consolidated non-debtors. Under the complaint, the DBSI Trustee alleged that Marty Goldsmith received about $29 million in exchange for purposefully selling substantially overvalued 180-acre real property located in Ada County, Idaho -- the Tanana Valley. In April 2006, Mr. Goldsmith and Kastera LLC -- an entity organized by two members of the Debtor's senior management -- executed a real estate purchase and sale agreement to transfer the Tanana Valley for $35.8 million. In October 2006, Debtor DBSI 2006 Land Opportunity Fund LLC or LOF funded $3 million of the $3.4 million earnest money deposit for the Tanana Valley purchase. The Trustee asserts that the $3 million went from LOF to Kastera to Mr. Goldsmith, and Kastera was a mere conduit. The $3 million transfer is the first transfer the Trustee seeks to avoid as fraudulent. In February 2007, Tanana Valley LLC (TVLLC) was formed, who executed a $26.35 million loan with Debtor DBSI 2006 Secured Notes Corp or "Secured Notes." The loan was transferred from Secured Notes to non-debtor DBSI Redemption Reserve, then transferred to TitleOne Corporation as the closing agent for the Tanana Valley sale. Of this amount, $25.4 million was for the benefit of Mr. Goldsmith. The $25.4 million is the second transfer the Trustee seeks to avoid as fraudulent. Before the Idaho bankruptcy court are the Defendant's Motion for Judgment on the Pleadings (Rule 12(c) Motion) and Motion to Dismiss for Failure to Join a Party Pursuant to Rule 19 (Rule 12(b)(7) Motion). On his Rule 12(b)(7) Motion, Mr. Goldsmith argues that TVLLC is an indispensable party to the complaint. The Trustee counters that no joinder of any other party is required under the facts established by the Amended Complaint. In an April 11, 2013 ruling, Bankruptcy Judge Terry L. Myers said "At this stage, Trustee has sufficiently alleged facts supporting maintenance of this action without joining TVLLC. First, Trustee adequately alleged Kastera/TVLLC was a conduit for the LOF funds in the Initial Transfer, and TVLLC and the escrow a conduit for the Secured Notes funds paid Goldsmith in the Closing Transfer. Second, even if Goldsmith's argument about Kastera/TVLLC being more than a mere conduit is ultimately provable, this does not necessarily mean Kastera/TVLLC need be joined before Trustee seeks relief from Goldsmith as a subsequent transferee." On his Rule 12(c) Motion, Mr. Goldsmith contended that all constructive fraud causes of action fail because he provided "reasonable equivalent value" in connection with the Initial and Closing Transfers. He also raised arguments premised on the assumption that TVLLC is the party making the transfers. He also attacks the Trustee's unjust enrichment count. To these, Judge Myers said Rule 12(c) motions have little utility where factual disputes exist and the plaintiff's allegations must be accepted as true. Accordingly, the Bankruptcy Court denied the Defendant's Rule 12(b)(7) Motion and Rule 12(c) Motion. A copy of Judge Myers' April 11, 2013 Memorandum of Decision is available at http://is.gd/vz2GVnfrom Leagle.com. About DBSI Inc. Headquartered in Meridian, Idaho, DBSI Inc. and its affiliates were engaged in numerous commercial real estate and non-real estate projects and businesses. On Nov. 10, 2008, and other subsequent dates, DBSI and 180 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-12687). DBSI estimated assets and debts between $100 million and $500 million as of the Chapter 11 filing. Lawyers at Young Conaway Stargatt & Taylor LLP represent the Debtors as counsel. The Official Committee of Unsecured Creditors tapped Greenberg Traurig, LLP, as its bankruptcy counsel. Kurtzman Carson Consultants LLC is the Debtors' notice claims and balloting agent. Joshua Hochberg, a former head of the Justice Department fraud unit, served as an Examiner and called the seller and servicer of fractional interests in commercial real estate an "elaborate shell game" that "consistently operated at a loss" in his report released in October 2009. McKenna Long & Aldridge LLP was counsel to the Examiner. On Sept. 11, 2009, the Honorable Peter J. Walsh entered an Order appointing James R. Zazzali as Chapter 11 trustee for the Debtors' estates. On Oct. 26, 2010, the trustee won confirmation of the Second Amended Joint Chapter 11 Plan of Liquidation for DBSI, paving the way for it to pay creditors and avoid years of expensive litigation over its complex web of affiliates. The plan, which was declared effective Oct. 29, 2010, was co-proposed by DBSI's unsecured creditors committee. Pursuant to the confirmed Chapter 11 plan, the DBSI Real Estate Liquidating Trust was established as of the effective date and certain of the Debtors' assets, including the Debtors' ownership interest in Florissant Market Place was transferred to the RE Trust. Mr. Zazzali and Conrad Myers were appointed as the post- confirmation trustees. Messrs. Zazzali and Myers are represented by lawyers at Blank Rime LLP and Gibbons P.C. DERBY DEVELOPMENT: Court Says Architect's Mechanic Lien Not Valid ----------------------------------------------------------------- A Connecticut bankruptcy court ruled in favor of The Community Preservation Corporation in the adversary proceeding it commenced against Mario Paniccia and Viking Acquisitions, LLC (Bankr. D. Conn., Adv. Pro. No. 11-5036). The suit was filed to challenge the validity of a mechanic's lien allegedly transferred to Viking. The suit was brought in the bankruptcy case of Derby Development Corp. The Debtor has a 15-unit apartment complex in Derby, Conneticut, owned by David Paniccia. The defendant, Mario Paniccia, is David's uncle and an architect who claims he provided pre-bankruptcy architectural services to the Debtor. CPC and Mario are listed as secured creditors in the Debtor's case. The Debtor filed several plans of reorganization. Class 2 in each plan classified Mario as a the holder of a secured claim. CPC argued that Mario's vote should not be counted because he is an insider, to which the Debtor responded that Mario had transferred the Mechanic's Lien to Viking. As a consequence, the Debtor's Plan was unconfirmable because there was no acceptance by any impaired class, the only plan before the court is CPC's Third Amended Plan. The CPC Plan notes that Class 2 consists of the Mechanic's Lien now or formerly held by Mario Paniccia, an insider or affiliate of Derby, and which was originally scheduled by Derby in the amount of no more than $160,000. Bankruptcy Judge Alan H.S. Shiff notes that the undisputed facts received into evidence support CPC's challenge to Mario's claim that he is the current holder of the Mechanic's Lien with standing to defend its viability. There was no mention or implication that a release agreement between Mario and Viking is also a mechanism to re-assign the Mechanic's Lien to Mario. But, the judge continued, even if Mario may be considered a bona fide holder of the Mechanic's Lien who, therefore, has standing to seek its allowance as a secured claim, CPC argued that its challenge should be sustained on two bases: Mario did not comply with the statutory requirements for the creation of a mechanic's lien, and alternatively, even if a mechanic's lien was actually created, Mario failed to maintain its perfection. Even if the procedural requirements had been satisfied and the Mechanic's Lien had been created, CPC's second argument as to why the Mechanic's Lien is not valid is persuasive, the Bankruptcy Court held. Connecticut law requires that after a mechanic's lien has been perfected by recording, it will "not continue in force" for more than one year from the date of perfection unless the lienholder commences an action to foreclose the lien and records a lis pendens on the land records. "Here, Mario would have had to take action to maintain the Mechanics Lien within one year of August 3, 2009. He failed to do so," Judge Shiff said. A copy of the Judge Shiff's April 10, 2013 Memorandum of Decision is available at http://is.gd/ZMK7Yyfrom Leagle.com. Patrick M. Birney, Esq. -- pbirney@rc.com -- Martin A. Onorato, Esq. -- monorato@rc.com -- and Elizabeth K. Wright, Esq. -- ewright@rc.com -- of ROBINSON & COLE, LLP, at 280 Trumbull Street, Hartford, Conn., represent Community Preservation Corporation. Jane I. Milas, Esq. -- jmilas@garciamilas.com -- of GARCIA & MILAS, at 44 Trumbull Street, New Haven, Conn., represents Mario Paniccia. Anthony J. LaBella, Esq., of URY & MOSKOW, LLC, at 883 Black Rock Turnpike, Fairfield, Conn., represent Viking Acquisitions, LLC. About Derby Development Derby Development Corporation filed for Chapter 11 bankruptcy (Bankr. D. Conn. Case No. 10-50259) on Feb. 5, 2010. The Debtor owns real property in Derby, Connecticut, which consists of a building with approximately 15 residential rental units. Peter L. Ressler, Esq., at Groob Ressler & Mulqueen, serves as counsel to the Debtor. DOLPHIN DIGITAL: Delays Form 10-Q for First Quarter --------------------------------------------------- Dolphin Digital Media, Inc., said its Form 10-Q for the period ended March 31, 2013, could not be filed within the prescribed time because additional time is required by the Company's management and auditors to prepare certain financial information to be included in that report. About Dolphin Digital Coral Gables, Florida-based Dolphin Digital Media, Inc., is dedicated to the twin causes of online safety for children and high quality digital entertainment. By creating and managing child-friendly social networking websites utilizing state-of the- art fingerprint identification technology, Dolphin Digital Media, Inc. has taken an industry-leading position with respect to internet safety, as well as digital entertainment. The Company reported a net loss of $1.23 million in 2011, compared with a net loss of $5.63 million in 2010. The Company's balance sheet at June 30, 2012, showed $2.55 million in total assets, $5.92 million in total liabilities, all current, and a $3.37 million total stockholders' deficit. DR TATTOFF: Incurs $1.2 Million Net Loss in First Quarter --------------------------------------------------------- Dr. Tattoff, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.25 million on $910,138 of revenue for the three months ended March 31, 2013, as compared with a net loss of $617,917 on $764,504 of revenue for the three months ended March 31, 2012. The Company's balance sheet at March 31, 2013, showed $2.39 million in total assets, $3.93 million in total liabilities and a $1.53 million total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/I3Mqkp About Dr. Tattoff Beverly Hills, Calif.-based Dr. Tattoff, Inc., currently operates or provides management services to five laser tattoo and hair removal clinics located in Texas and California, all of which operate under the Company's registered trademark "Dr. Tattoff." Dr. Tattoff disclosed a net loss of $2.83 million on $3.20 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $2.47 million on $2.66 million of revenue during the prior year. SingerLewak LLP, in Los Angeles, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company's current liabilities exceeded its current assets by approximately $1,547,000, has shareholders' deficit of approximately $806,000, has suffered recurring losses and negative cash flows from operations, and has an accumulated deficit of approximately $7,407,000 at Dec. 31, 2012, which conditions raise substantial doubt about the Company's ability to continue as a going concern. EARTHBOUND HOLDINGS: S&P Revises Outlook & Affirms 'B-' CCR ----------------------------------------------------------- Standard & Poor's Ratings Services revised its rating outlook on San Juan Bautista, Calif.-based Earthbound Holdings III LLC to negative from developing. S&P also affirmed the corporate credit rating at 'B-'. On March 31, 2013, Earthbound had approximately $342 million of total debt outstanding. "The outlook revision reflects our belief that Earthbound will have difficulty complying with its financial covenants over the near term, given its weaker-than-expected operating performance and continued tight covenant cushion," said Standard & Poor's credit analyst Jeff Burian. "While operating results showed some improvement, we estimate that Earthbound's covenant cushion level was very limited at the end of the first quarter of 2013. As a result, we believe that the company's liquidity position may weaken and that it may not be able to remain in compliance with its covenants during the next several quarters when covenant levels become more restrictive." Although Earthbound's credit agreement has equity cure rights, these rights are limited to two per year and Earthbound has already received a cure of about $9 million during the first quarter of 2013. The company has not announced plans to restore covenant cushion via any type of amendment process. The ratings on Earthbound reflect Standard & Poor's view of the company's narrow product focus, limited international presence, and its participation in the produce industry, which S&P believes is subject to uncontrollable factors such as potential supply disruption, weather, and crop disease. Additionally, S&P considered the company's good market positions in the expanding organic produce category, its customer diversity, and its well- recognized brand name. The ratings also reflect Earthbound's significant debt burden, very aggressive financial policy, and our assessment of its less- than-adequate liquidity. "We could consider lowering the ratings if the company is unable to demonstrate a credible plan to remedy its covenant cushion and is unable to remain in compliance with its financial covenants," said Mr. Burian. ECO BUILDING: Delays Form 10-Q for First Quarter ------------------------------------------------ Eco Building Products, Inc., said its quarterly report could not be filed within the prescribed time period due to the Company requiring additional time to prepare and review the quarterly report for the period ended March 31, 2013. That delay could not be eliminated by the Company without unreasonable effort and expense. In accordance with Rule 12b-25 of the Securities Exchange Act of 1934, the Company will file its Form 10-Q no later than five calendar days following the prescribed due date. About Eco Building Vista, Calif.-based Eco Building Products is a manufacturer of proprietary wood products treated with an eco-friendly proprietary chemistry that protects against mold, rot, decay, termites and fire. Sam Kan & Company, in Alameda, Calif., expressed substantial doubt about Eco's ability to continue as a going concern following the fiscal 2012 financial results. The independent auditors noted that the Company has generated minimal operating revenues, losses from operations, significant cash used in operating activities and its viability is dependent upon its ability to obtain future financing and successful operations. The Company's balance sheet at Dec. 31, 2012, showed $5.03 million in total assets, $10.88 million in total liabilities and a $5.85 million total stockholders' deficit. The Company reported a net loss of $11.2 million on $3.7 million of revenue in fiscal 2012, compared with a net loss of $6.0 million on $1.3 million of revenue in fiscal 2011. EGPI FIRECREEK: Delays First Quarter Form 10-Q for Review --------------------------------------------------------- EGPI Firecreek, Inc., is delayed in filing its quarterly report on Form 10-Q for the quarter ended March 31, 2013, in order to enable its independent registered public accounting firm to complete its review of the Company's financial statements to be contained in the Report and for XBRL processing requirements. About EGPI Firecreek Scottsdale, Ariz.-based EGPI Firecreek, Inc. (OTC BB: EFIR) was formerly known as Energy Producers, Inc., an oil and gas production company focusing on the recovery and development of oil and natural gas. The Company has been focused on oil and gas activities for development of interests held that were acquired in Texas and Wyoming for the production of oil and natural gas through Dec. 2, 2008. Historically in its 2005 fiscal year, the Company initiated a program to review domestic oil and gas prospects and targets. As a result, EGPI acquired non-operating oil and gas interests in a project titled Ten Mile Draw located in Sweetwater County, Wyoming for the development and production of natural gas. In July 2007, the Company acquired and began production of oil at the 2,000 plus acre Fant Ranch Unit in Knox County, Texas. This was followed by the acquisition and commencement in March 2008 of oil and gas production at the J.B. Tubb Leasehold Estate located in the Amoco Crawar Field in Ward County, Texas. The Company reported a net loss of $4.97 million in 2011, compared with a net loss of $4.48 million in 2010. In its audit report for the 2011 results, M&K CPAS, PLLC, in Houston, Texas, noted that the Company has suffered recurring losses and negative cash flows from operations that raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $2.35 million in total assets, $6.49 million in total liabilities, all current, $1.86 million in series D preferred stock, and a $6.01 million total shareholders' deficit. EPAZZ INC: Delays First Quarter Form 10-Q to Complete Review ------------------------------------------------------------ Epazz, Inc., said it has experienced delays in completing its financial statements for the quarter ended March 31, 2013, as its auditor has not had sufficient time to review the financial statements. As a result, the Company is delayed in filing its Form 10-Q for the quarter ended March 31, 2013. About EPAZZ Inc. Chicago, Ill.-based EPAZZ, Inc., was incorporated in the State of Illinois on March 23, 2000, to create software to help college students organize their college information and resources. The idea behind the Company was that if the information and resources provided by colleges and universities was better organized and targeted toward each individual, the students would encounter a personal experience with the college or university that could lead to a lifetime relationship with the institution. This concept is already used by business software designed to retain relationships with clients, employees, vendors and partners. In its report on the financial statements for 2011, Lake & Associates CPA's LLC, in Schaumburg, Illinois, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has a significant accumulated deficit and continues to incur losses. The Company's viability is dependent upon its ability to obtain future financing and the success of its future operations. The Company reported a net loss of $336,862 in 2011, compared with net income of $120,785 in 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.42 million in total assets, $1.98 million in total liabilities and a $561,200 total stockholders' deficit. Bankruptcy Warning The Company said in its 2011 annual report that it cannot be certain that any financing will be available on acceptable terms, or at all, and the Company's failure to raise capital when needed could limit its ability to continue and expand its business. The Company intends to overcome the circumstances that impact its ability to remain a going concern through a combination of the commencement of additional revenues, of which there can be no assurance, with interim cash flow deficiencies being addressed through additional equity and debt financing. The Company's ability to obtain additional funding for the remainder of the 2012 year and thereafter will determine its ability to continue as a going concern. There can be no assurances that these plans for additional financing will be successful. Failure to secure additional financing in a timely manner to repay the Company's obligations and supply the Company sufficient funds to continue its business operations and on favorable terms if and when needed in the future could have a material adverse effect on its financial performance, results of operations and stock price and require the Company to implement cost reduction initiatives and curtail operations. Furthermore, additional equity financing may be dilutive to the holders of the Company's common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary to raise additional funds, and may require that the Company relinquish valuable rights. In the event that the Company is unable to repay its current and long-term obligations as they come due, the Company could be forced to curtail or abandon its business operations, or file for bankruptcy protection; the result of which would likely be that the Company's securities would decline in value or become worthless. FLAT OUT: Authorized to Implement Employee Retention Program ------------------------------------------------------------ The Hon. Robert D. Drain of the U.S. Bankruptcy Court Southern District of New York authorized Flat Out Crazy, LLC, et al., to implement an employee retention program for certain non-insider key employees and make payments thereunder. The Court ruled that the retention program is approved in its entirety, and the Debtors are authorized to implement the retention program and to make payments to eligible corporate employees thereunder in the Debtors' sole discretion; provided, that The HillStreet Fund, IV L.P., will make the payments to eligible store managers under the retention program immediately upon the closing of the sale transactions to HillStreet and the payments will not be subject to reimbursement by, or a claim against, the Debtors. About Flat Out Crazy Flat Out Crazy LLC and its affiliates operate two Asian-inspired restaurant chains that began in Chicago. Flat Top Grill, which currently has 15 locations, is a full-service fast-casual create- your-own stir-fry concept. Stir Crazy Fresh Asian Grill, which has 11 locations, is a full-service casual Asian restaurant offering the flavors of Chinese, Japanese, Thai and Vietnamese food. The Debtors have 1,200 employees. Flat Out Crazy and 13 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22094) in White Plains, New York on Jan. 25, 2013. The Debtors have tapped Squire Sanders (US) LLP as counsel; Kurtzman Carson Consultants, LLC, as claims, noticing and administrative agent; William H. Henrich and Mark Samson from Getzler Henrich as their co-chief restructuring officers; and J.H. Chapman Group, L.L.C, as their investment bankers. The Debtor disclosed $24,339,542 in assets and $15,899,166 in liabilities as of the Chapter 11 filing. An official committee of unsecured creditors has been appointed in the Debtors' cases. The Committee tapped to retain Kelley Drye & Warren LLP as its counsel and CBIZ Accounting, Tax and Advisory of New York, LLC as financial advisor. Tracy Hope Davis, the U.S. Trustee for Region 2, appointed Alan Chapell, as the consumer privacy ombudsman in the Debtors' cases. FISHER ISLAND: June 20 Hearing on Show Cause and Case Dismissal --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida continued until June 20, 2013, at 3 p.m., the hearing to consider the motion to show cause and dismiss the Chapter 11 case of Fisher Island Investments, Inc., et al. Petitioning creditors, Solby+Westbrae Partners, 19 SHC, Corp., Ajna Brands, Inc., 601/1700 NBC, LLC, Axafina, Inc., and Oxana Adler, LLM notified the Court, on Sept. 18, 2012, that they had withdrawn their respective petitions and further confirm that they are not prosecuting or seeking an order for relief in the Debtors' involuntary bankruptcy cases. In this relation, the petitioning creditors request that the Court dismiss their involuntary petitions and the bankruptcy cases. About Fisher Island Investments Solby+Westbrae Partners; 19 SHC Corp.; Ajna Brands Inc.; 601/1700 NBC LLC; Axafina Inc.; and Oxana Adler, LLM, filed an involuntary Chapter 11 petition against Miami Beach, Florida-based Fisher Island Investments, Inc. (Bankr. S.D. Fla. Case No. 11-17047) on March 17, 2011. On the same date, involuntary Chapter 11 petitions were also filed against the Company's affiliates, Mutual Benefits Offshore Fund, LTD (Bankr. S.D. Fla. Case No. 11-17051) and Little Rest Twelve, Inc. (Bankr. S.D. Fla. Case No. 11-17061). Judge A. Jay Cristol presides over the case. The case was previously assigned to Judge Laurel M. Isicoff. Petitioning creditors are represented by Craig A. Pugatch, Esq., and George L. Zinkler, Esq., at Rice Pugatch Robinson & Schiller, P.A., 101 NE 3 Ave. Suite 1800, Fort Lauderdale FL 33301. John F. O'Sullivan, Esq., at Hogan Lovells US LLP, Patricia A. Redmond, Esq., at Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A.,, and Terrance A. Dee, Esq., at DiBello, Lopez & Castillo, P.A., represent Alleged Debtor Fisher Island Investments, Inc., as counsel. Donald F. Walton, the U.S. Trustee for Region 21, appointed James S. Feltman as an examiner in the involuntary cases. Greenberg Traurig, P.A., serves as counsel for the examiner while Leshaw Law, P.A., is the co-counsel. FOREVERGREEN WORLDWIDE: Delays Form 10-Q for First Quarter ---------------------------------------------------------- Forevergreen Worldwide Corp. is unable, without unreasonable effort and expense, to file the Form 10-Q for the period ended March 31, 2013, within the prescribed time period due to its difficulty in obtaining and completing the financial and other information required for that report. About ForeverGreen Worldwide Orem, Utah-based ForeverGreen Worldwide Corporation is a holding company that operates through its wholly owned subsidiary, ForeverGreen International, LLC. The Company's product philosophy is to develop, manufacture and market the best of science and nature through innovative formulations as it produces and manufactures a wide array of whole foods, nutritional supplements, personal care products and essential oils. Forevergreen Worldwide disclosed a net loss of $884,858 on $12.48 million of net revenues for the year ended Dec. 31, 2012, as compared with a net loss of $1.45 million on $13.70 million of net revenues for the year ended Dec. 31, 2011. The Company's balance sheet at Dec. 31, 2012, showed $1.39 million in total assets, $5.90 million in total liabilities, and a $4.51 million total stockholders' deficit. Sadler, Gibb & Associates, LLC, in Salt Lake City, UT, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered accumulated net losses of $35,458,353 and has had negative cash flows from operating activities during the year ended Dec. 31, 2012, of $8,860. These matters raise substantial doubt about the Company's ability to continue as a going concern. GABRIEL TECHNOLOGIES: Qualcomm Inc. Wants Case Converted to Ch.7 ---------------------------------------------------------------- Qualcomm Incorporated, a creditor of Gabriel Technologies Corporation, et al., filed a motion with the U.S. Bankruptcy Court seeking to convert the Debtor's chapter 11 case to a liquidation in chapter 7 or, in the alternative, to appoint a chapter 11 trustee. About Gabriel Technologies Gabriel Technologies Corporation and one subsidiary filed separate Chapter 11 petitions (Bankr. N.D. Cal. Case No. 13-30340 and 13-30341) on Feb. 14, 2013, in San Francisco, after losing in a patent dispute with smartphone chips maker Qualcomm Inc. Gabriel Technologies, through its debtor-subsidiary Trace Technologies, LLC, holds significant intellectual property assets directed toward location-based products and services through global positioning systems. Gabriel Technologies disclosed $15 million in assets and $15 million in liabilities as of Jan. 31, 2013. The Debtors tapped the law firm of Meyers Law Group, P.C. as general bankruptcy counsel. A three-member official committee of unsecured creditors has been appointed in the case. Pachulski Stang Ziehl & Jones LLP represents the Committee. The Debtor filed a Plan of Reorganization that proposes to substantively consolidate the Debtors' estates into the Chapter 11 estate of Gabriel, and upon the Effective Date, all those assets will become the property of the Reorganized Debtor. Secured claims filed against the Debtors will be paid by proceeds recovered from Qualcomm Incorporated in a lawsuit involving royalties, and from another lawsuit involving royalties captioned Gabriel Technologies Corporation, etc. v. Keith Feilmeier, et al. Unsecured Claims will also be paid from the proceeds of the two lawsuits, after all secured claims have been paid. Allowed General unsecured claims will accrue an interest of 10% per annum. GATZ PROPERTIES: Long Island Golf Course Has $6MM Opening Bid ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that when the Long Island National Golf Course in Riverhead, New York, goes up for auction on June 24, the first bid of $6 million will be made by Golf Riverhead LLC. The bankruptcy court in Central Islip, New York, approved sale procedures on May 17. Competing bids are due June 17. A hearing to approve a sale is set for June 26. The club previously said there are a "myriad" of interested buyers. The public course is worth $7.7 million, according to a court filing when the Chapter 11 reorganization began in July. About Gatz Properties Gatz Properties LLC filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 12-74493) on July 20, 2012, in Central Islip, New York. The Company scheduled $7,877,511 in assets and $7,892,130 in liabilities. Bankruptcy Judge Alan S. Trust oversees the Debtor's case. Salvatore LaMonica, Esq., at LaMonica Herbst and Maniscalco, in Wantagh, New York, serves as counsel. GENELINK INC: Incurs $353,700 Net Loss in First Quarter ------------------------------------------------------- Genelink, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $353,771 on $399,896 of revenues for the three months ended March 31, 2013, as compared with a net loss of $105,673 on $771,664 of revenues for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $1.23 million in total assets, $4.25 million in total liabilities and a $3.01 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/CH2CEu About Genelink Based in Orlando, Fla., GeneLink, Inc., is a solution provider in the genetically customized nutritional and personal care marketplace. Genelink disclosed a net loss of $3.05 million on $2.13 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $3.83 million on $4.68 million of revenue during the prior year. Hancock Askew & Co., LLP, in Savannah, GA, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company incurred significant net losses in 2012 and 2011, has a working capital deficit and a significant accumulated deficit. These items raise substantial doubt as to the Company's ability to continue as a going concern. GGW BRANDS: Trustee to Sue for Ownership of Girls Gone Wild Name ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the trustee for the company producing the "Girls Gone Wild" video series will be starting a lawsuit to recover ownership of the trademarks. The report relates that, as told in court filing by trustee R. Todd Neilson, an affiliate named GGW Marketing owned the trademarks until November 2011 when they were transferred for nothing to an entity named Path Media Holdings LLC. The trustee says the transfer was designed to shelter assets while the company was in litigation with Wynn Las Vegas LLC. The trustee says the company had a license to use the trademarks until the license was canceled a few days before the Chapter 11 filing in February. The company received a short-term license to use the marks until May 31. The report relates that this week the bankruptcy court in Los Angeles gave Mr. Neilson the right to reinstate the corporate existence of GGW Marketing, which had been dissolved, and then put the entity into bankruptcy. The bankruptcy court authorized the trustee to file fraudulent-transfer lawsuits to recover ownership of the marks. Without the marks, Mr. Neilson says the company can't survive. The trustee's papers allege that the company's founder Joe Francis controls Path Media, the company currently holding ownership of the marks. Mr. Francis previously contended that he wasn't a company officer and had no ownership interest. The trustee was appointed following allegations that the company was paying his personal expenses. About GGW Brands Santa Monica, California-based GGW Brands, LLC, the company behind the "Gils Gone Wild" video, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-15130) on Feb. 27, 2013. Judge Sandra R. Klein oversees the case. The company is represented by the Law Offices of Robert M. Yaspan. The company disclosed $0 to $50,000 in estimated assets and $10 million to $50 million in estimated liabilities in its petition. Affiliates GGW Events LLC, GGW Direct LLC and GGW Magazine LLC also sought Chapter 11 protection. In April 2013, R. Todd Neilson, an ex-FBI agent, was appointed as Chapter 11 Trustee to take over the companies. Mr. Neilson has investigated failed solar-power company Solyndra and was involved in the Mike Tyson and Death Row Records bankruptcy cases. GLOBE ENERGY: Moody's Assigns B2 Rating to New $350MM Term Loan --------------------------------------------------------------- Moody's Investors Service assigned a first time corporate family rating of B2 to Globe Energy Services, LLC (GES), and a B2 rating to the company's proposed $350 million term loan maturing 2019. The net proceeds from this offering will be used to primarily refinance an existing $320 million term loan (unrated) put in place in late 2012 to acquire Paul Musslewhite Trucking LLC (Musslewhite), an oilfield services competitor with primary presence in the Permian basin. The rating outlook is stable. Issuer: Globe Energy Services, LLC Ratings assigned: Corporate Family Rating, B2 Probability of Default Rating, B2-PD $350 million Term Loan B due 2019, B2 (LGD4, 53%) Ratings Rationale: The B2 CFR reflects GES's modest scale, fragmented, yet growing, nature of the fluid services industry, disproportionate reliance on EBITDA from recently acquired Musslewhite, customer concentration with top three customers, geographic concentration weighted to one hydrocarbon producing basin, and exposure to volatility of US energy drilling activity. Moody's notes that of the pro forma 2012 EBITDA for the combined entity, roughly 60% was contributed by Musslewhite which only accounted for 45% of the pro forma revenues. However, the rating recognizes the combined entity's dominant position in the Permian with the majority of revenues tied to production activities, favorable current trends in both drilling and production in North America, long history and relatively predictable water production profile in the Permian, expectation of good cash flow generation and debt metrics, and track record of customer relationships. The B2 rating on the $350 million term loan, the same as the CFR, reflects its dominant position in the company's capital structure. The facility is secured by a first lien against the fixed assets and a second lien on accounts receivable and inventory. The B2 rating on the term loan also reflects both the overall probability of default of GES, to which Moody's has assigned a B2-PD Probability of Default Rating, and a loss given default of LGD 4, 53%, under Moody's Loss Given Default Methodology. In addition to the term loan, GES will have a $60 million ABL credit facility. The ABL revolver will have a first lien on accounts receivable and inventory. GES is expected to have good liquidity through at least the first half of 2014, primarily due to strong expected free cash flow generation. Moody's expects that GES's internally generated cash flow will cover capital expenditures over the next year leaving room for voluntary prepayment of a portion of the term loan. The company will have a borrowing base governed $60 million asset- based revolving credit facility that matures in 2018. Alternate liquidity is limited given that substantially all of the company's assets will be pledged under the revolving credit facility and the senior secured term loan. The stable outlook reflects the need for services provided by GES as the production and drilling activity is expected to remain robust in the Permian basin, good liquidity, and an expectation that the management will further integrate the Musslewhite acquisition while continuing to build the combined company's track record and invest adequately to maintain capabilities and safety standards. An upgrade is currently unlikely. However, Moody's could consider an upgrade if there is a material increase in geographic diversity, product line balance, and scale that is funded conservatively. The ratings could be lowered if leverage sustains above 3x and EBIT interest coverage below 4x, fluid services industry fundamentals worsen in the Permian on a prolonged basis, liquidity deteriorates, or the company generates negative free cash flow for more than two quarters. The principal methodology used in this rating was Global Oilfield Services 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. Global Energy Services LLC is an oilfield services company that provides a variety of fluid management and wellsite services to exploration and production companies and other oilfield service contractors operating primarily in the Permian Basin. GES also has a presence in the mid-continent region, Eagle Ford Shale, and East Texas. GES is a private company based in Snyder, Texas, and is majority held by a private equity sponsor (Altpoint Capital, 49% ownership) and management (31%). GLOBE ENERGY: S&P Assigns 'B' CCR & Rates $350MM Loan Due 2019 'B' ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Snyder, Texas-based Globe Energy Services LLC. The outlook is stable. At the same time, S&P assigned its 'B' issue rating (the same as the corporate credit rating) to Globe's proposed $350 million term loan B due 2019. The recovery rating is '3', indicating S&P's expectation of meaningful (50% to 70%) recovery in the event of a payment default. "The ratings on Globe Energy Services LLC reflect our view of the company's 'vulnerable' business risk and 'highly leveraged' financial risk profiles and our assessment of liquidity as 'adequate'," said Standard & Poor's credit analyst Paul Harvey. These assessments reflect Globe's limited scale of operations in the oilfield services industry, participation in a highly fragmented industry with low technological complexity, and exposure to the often volatile drilling levels and resulting well count of the exploration and production industry. On the other hand, near-term financial measures should be well within S&P's expectations for the rating, supported by low maintenance capital spending and resulting free cash flow. S&P expects the company to use its cash flows for debt repayment and organic growth. In addition, S&P expects Globe and Musslewhite's core market in the Permian Basin to continue to generate above-average margins, despite generally weaker oilfield services market conditions, that should support earnings and expectations for free operating cash flow. The stable outlook reflects S&P's expectation that Globe will maintain debt leverage of 3.5x or less, while successfully integrating the acquisition of Musslewhite. S&P expects Globe to use free cash flow for debt repayment and reinvestment in the company. S&P would consider an upgrade if Globe can increase its scale of operations more consistent with a 'B+' level rating, such as annual EBITDA of $150 million to $200 million. At the same time, Globe would need to reduce its reliance on the fluid handling business and enter another core market outside the Permian Basin. S&P could lower ratings if it expects debt leverage to exceed 6x without a near-term remedy. This would most likely occur over the next 12 to 18 months if Globe deviates from S&P's expectations and pursues aggressively funded acquisitions or other leveraging transactions. In addition, S&P could lower ratings if Globe is unable to complete the integration of the Musslewhite acquisition and margins fall significantly below expectations. Globe is a privately held company, with the majority owned by Altpoint Capital (48%) and management (31%). S&P expects Globe to use proceeds from the term loan to refinance debt related to its December 2012 acquisition of Paul Musslewhite Trucking Co. LLC (Musslewhite) and general purposes. GOSPEL RESCUE: Ordered to File Affidavits on 5 Claim Objections --------------------------------------------------------------- Gospel Rescue Ministries of Washington, D.C. Inc. has been ordered by a bankruptcy court in Washington D.C. to file affidavits establishing amounts on claims asserted by five claimants. The Debtor objected to, and sought the disallowance of, the claims of General Electric Capital Corporation, De Lage Landen Financial Services, Comptroller of Maryland, MegaPath Corporation, and Colonial Life Insurance. Bankruptcy Judge S. Martin Teel, Jr. said the affidavits should establish the amounts the Debtor determine are excessive, and be served on the claimants. A copy of Judge Teel's April 10, 2013 Memorandum Decision and Order is available at http://is.gd/vQrw8Mfrom Leagle.com. About Gospel Rescue Ministries Gospel Rescue Ministries of Washington, D.C. Inc., filed a Chapter 11 petition (Bankr. D. D.C. Case No. 12-00405) on May 30, 2012, estimating assets of $10 million to $50 million and debts of up to $10 million. Judge S. Martin Teel, Jr. presides over the case. Paul Sweeney and the law firm of Yumkas, Vidmar & Sweeney LLC serve as bankruptcy counsel. According to the Web site http://www.grm.org, in the heart of Washington D.C., Gospel Rescue Ministries strives to be a shelter in the storm of substance abuse, hunger, and homelessness. GRM is a non-denominational Christian social service agency that provides hope, help, and healing to men and women in a variety of ways, from sheltering the homeless and feeding the hungry, to educating men and women, healing them from addictions, and providing them with the vocational skills and spiritual strength to change their lives. Michael J. Corttese, the CEO and president, worked at World Bank Group and International Finance Corp. for 30 years, before joining GRM as volunteer in 1998. GREEN EARTH: Incurs $2.2 Million Net Loss in March 31 Quarter ------------------------------------------------------------- Green Earth Technologies, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.17 million on $2.03 million of net sales for the three months ended March 31, 2013, as compared with a net loss of $611,000 on $1.52 million of net sales for the same period during the prior year. For the nine months ended March 31, 2013, the Company incurred a net loss of $7.15 million on $5.39 million of net sales for the three months ended March 31, 2013, as compared with a net loss of $7.56 million on $4.94 million of net sales for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $10.15 million in total assets, $24.49 million in total liabilities and a $14.33 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/GHW11g About Green Earth Technologies White Plains, N.Y.-based Green Earth Technologies, Inc. (OTC QB: GETG) -- http://www.getg.com/-- markets, sells and distributes bio-degradable performance and cleaning products. The Company's product line crosses multiple industries including the automotive aftermarket, marine and outdoor power equipment markets. Green Earth reported a net loss of $11.26 million for the year ended June 30, 2012, compared with a net loss of $12.21 million during the prior fiscal year. Friedman LLP, in East Hanover, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended June 30, 2012. The independent auditors noted that the Company's losses, negative cash flows from operations, working capital deficit and its ability to pay its outstanding liabilities through fiscal 2013 raise substantial doubt about its ability to continue as a going concern. HAMPTON CAPITAL: May 30 Hearing on Private Sale ----------------------------------------------- The U.S. Bankruptcy Court for the Middle District of North Carolina will convene a hearing on May 30, 2013, at 10 a.m., to consider approval of Hampton Capital Partners, LLC's private sale of real property in an auction led by Lady Builders, LLC. The Debtor sought permission to privately sell its primary manufacturing plant in Aberdeen, North Carolina known as 3140 NC 5 Highway, Aberdeen, North Carolina, for $1,750,000 The property is encumbered by the postpetition and prepetition secured claims of Bank of America, N.A.; a junior lien held by Ronile, Inc., and a secured claim of The Moore County Tax Collector amounting to $114,146. Binswanger has marketed the property to numerous potential interested parties, and the Debtor believes that the proposed sale is the highest and best price available in the current market. The agreement includes a commitment to close and consummate the sale promptly following entry of an order approving the sale, assuming no stay thereof, and in no event later than May 30, 2013. About Hampton Capital Partners Hampton Capital Partners, LLC, an Aberdeen, N.C.-based manufacturer of residential and commercial tufted carpets under the Gulistan name, filed a Chapter 11 petition (Bankr. M.D.N.C. Case No. 13-bk-80015) on Jan. 7, 2013. The Company has been producing carpet under the Gulistan name since 1924, although it traces its roots back to 1818, when an Armenian textile importer established a business in Turkey. The company began manufacturing carpet in Aberdeen in 1957, and was acquired by J.P. Stevens & Co. Inc. in 1964. Over the last 25 years, Gulistan Carpet has undergone several ownership changes. In addition to its headquarters and manufacturing operations in Aberdeen, the company has a plant in Wagram, N.C. Northen Blue, LLP, serves as counsel to the Debtor. Getzler Henrich & Associates LLC is the financial consultant. Five creditors have been appointed to serve on the Official Committee of Unsecured Creditors. HEALTHWAREHOUSE.COM INC: Karen Singer Held 8.3% Stake at May 7 -------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Karen Singer reported that, as of May 7, 2013, she beneficially owned 2,176,015 shares of common stock of HealthWarehouse.com, Inc., representing 8.3% of the shares outstanding. Ms. Singer previously reported beneficial ownership of 1,899,828 common shares or a 14.7% equity stake as of June 28, 2012. A copy of the amended filing is available at: http://is.gd/HNu53q About HealthWarehouse.com HealthWarehouse.com, Inc., headquartered in Florence, Kentucky, is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare e-commerce company that sells brand name and generic prescription drugs as well as over-the-counter ("OTC") medical products. In the auditors' report accompanying the consolidated financial statement for the year ended Dec. 31, 2011, Marcum LLP, in New York, expressed substantial doubt about HealthWarehouse.com's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. The Company reported a net loss of $5.71 million in 2011, compared with a net loss of $3.69 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.69 million in total assets, $8.52 million in total liabilities and a $6.83 million total stockholders' deficiency. HEALTHWAREHOUSE.COM INC: Lloyd Miller Owned 8.3% Stake at May 7 --------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Lloyd I. Miller, III, disclosed that, as of May 7, 2013, he beneficially owned 2,176,015 shares of common stock of HealthWarehouse.com, Inc., representing 8.3% of the shares outstanding. Mr. Miller previously reported beneficial ownership of 1,899,828 common shares or a 14.7% equity stake as of June 28, 2012. A copy of the amended regulatory filing is available for free at http://is.gd/ZF0odW About HealthWarehouse.com HealthWarehouse.com, Inc., headquartered in Florence, Kentucky, is a U.S. licensed virtual retail pharmacy ("VRP") and healthcare e-commerce company that sells brand name and generic prescription drugs as well as over-the-counter ("OTC") medical products. In the auditors' report accompanying the consolidated financial statement for the year ended Dec. 31, 2011, Marcum LLP, in New York, expressed substantial doubt about HealthWarehouse.com's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. The Company reported a net loss of $5.71 million in 2011, compared with a net loss of $3.69 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.69 million in total assets, $8.52 million in total liabilities and a $6.83 million total stockholders' deficiency. HIGHWAY TECHNOLOGIES: Sale Falls Apart, Files Ch.11 to Liquidate ---------------------------------------------------------------- Highway Technologies Inc. filed a Chapter 11 petition May 22 (Bankr. D. Del. Case No. 13-11326) after shutting down the business on May 17. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Houston-based company had been in buyout talks with a competitor until the prospective buyer decided to drop out on May 14. The company then shut down its 32 locations in 13 states, firing most of the 825 workers. According to the report, the company intends to hire Hilco Industrial LLC to sell the assets either at auction or as a standalone businesses. The bankruptcy will be financed with a $3 million loan provided by a group of pre-bankruptcy lenders including Oak Hill Special Opportunities Fund LP. Assets were listed for $55 million, with debt totaling $102 million, including $66.8 million in secured debt. Trade suppliers are owed $23 million. There is $88.7 million in potential liability on surety bonds. The current owners acquired the business in 2007. In August 2010, "financial irregularities and unreported losses were discovered," according to a court filing. HOLLYFRONTIER CORP: S&P Raises Corp. Credit Rating From 'BB+' ------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Dallas-based HollyFrontier Corp. and subsidiary Frontier Oil Corp. to 'BBB-' from 'BB+'. The outlook is stable. At the same time, S&P raised the issue-level rating on HollyFrontier's senior unsecured debt to 'BBB-' from 'BB+'. The upgrade reflects HollyFrontier's long track record of being among the most profitable refineries in the U.S. combined with very conservative financial measures that it has sustained throughout the cycle. Over the past two years, the company has benefited from favorable pricing on West Texas Intermediate crude (WTI) relative to Brent and Louisiana Light Sweet crude. While S&P expects the company's profitability advantage to decrease over the next 12 to 24 months due to a contraction of the differential, S&P believes that HollyFrontier is better situated than its peers. Due to the proximity of its refineries to growing domestic oil fields, S&P expects the company will likely enjoy a $3 to $5 per barrel feedstock advantage relative to the bulk of U.S. refiners that operate in the Gulf Coast. Still, HollyFrontier's business risk position is tempered by the extreme volatility of oil refining margins and its more modest scale relative to investment- grade peers. The stable outlook on the rating reflects HollyFrontier's above- average profitability compared with that of its peers and its very low financial leverage measures. In particular, S&P would expect the company to maintain close to zero net debt during most years and less than 1x-1.5x gross adjusted debt to EBITDA under midcycle conditions, recognizing that EBITDA will be highly volatile along with refining margins. "Given our assessment of HFC's business risk and the inherent volatility of the industry, we currently view an upgrade as unlikely without increased scale and asset diversity or preemptive pay down of balance sheet debt. We could lower the rating if the company encounters operational difficulties, engages in a leveraging transaction, or pursues less conservative financial policies or if we believe the HollyFrontier's historical profitability will become less sustainable," said Standard & Poor's credit analyst Nora Pickens. HORNE INTERNATIONAL: Delays Q1 Form 10-Q, Expects $217,000 Loss --------------------------------------------------------------- Due to reduced staffing levels, Horne International, Inc., experienced delays in closing its quarter, and consequently its independent registered public accounting firm was unable to complete its review of the Company's Quarterly Report on Form 10-Q within the prescribed time period without unreasonable effort or expense. The Form 10-Q will be filed no later than the fifth calendar day following the prescribed due date. The Company expects to report a net loss of approximately $(217,900) on revenues of approximately $14,000 for the three months ended March 31, 2013, compared to net loss of approximately $(336,000) on revenues of approximately $1.430 million for the quarter ended March 25, 2012. The anticipated net loss is primarily due to the significant amount of low margin revenues. Fairfax, Va.-based Horne International, Inc., is an engineering services company focused on provision of integrated, systems approach based solutions to the energy and environmental sectors. Stegman & Company, in Baltimore, Maryland, expressed substantial doubt about Horne International's ability to continue as a going concern. The independent auditors noted that the Company has experienced continuing net losses for each of the last four years and as of Dec. 31, 2012, current liabilities exceeded current assets by $2.26 million. The Company reported a net loss of $1.6 million on $4.1 million of revenue in 2012, compared with a net loss of $121,000 on $5.7 million of revenue in 2011. The Company's balance sheet at Dec. 31, 2012, showed $1.2 million in total assets, $3.2 million in total liabilities, and a stockholders' deficit of $2.0 million. HYPERTENSION DIAGNOSTICS: Had $628,500 Net Loss in March 31 Qtr. ---------------------------------------------------------------- Hypertension Diagnostics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $628,578 on $821,000 of total revenues for the three months ended March 31, 2013, as compared with net income of $5,605 on $1.84 million of total revenues for the same period during the prior year. For the nine months ended March 31, 2013, the Company incurred a net loss of $1.40 million on $48,880 of total revenues, as compared with a net loss of $1.22 million on $3.03 million of total revenues for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $1.06 million in total assets, $2.49 million in total liabilities and a $1.42 million total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/sI4Oo8 About Hypertension Diagnostics Minnetonka, Minnesota-based Hypertension Diagnostics, Inc., was previously engaged in the design, development, manufacture and marketing of proprietary devices. In August 2011, the Company sold its medical device inventory, subleased its office and manufacturing facility, and entered into a limited license agreement with a company controlled by Jay Cohn, a founder and at that time, a director of the Company. In September 2011, the Company formed HDI Plastics Inc. ("HDIP"), a wholly owned- subsidiary, leased a facility for warehouse and processing of recycled plastic, purchased selected manufacturing assets and began engaging in the business of plastics reprocessing in Austin, Tex. On March 29, 2012, the Company ceased operations at the Austin facility and it is currently seeking to relocate the processing facility to a new location. The Company currently has a plan to resume production around Feb. 1, 2013, assuming adequate capital is obtained to do so. As reported in the TCR on Oct. 2, 2012, Moquist Thorvilson Kaufmann & Pieper LLC, in Edina, Minnesota, expressed substantial doubt about Hypertension's ability to continue as a going concern. The independent auditors noted that the Company had net losses for the years ended June 30, 2012, and 2011, and has a stockholders' deficit at June 30, 2012. ICEWEB INC: Incurs $2.1 Million Net Loss in March 31 Quarter ------------------------------------------------------------ Iceweb, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.12 million on $455,144 of sales for the three months ended March 31, 2013, as compared with a net loss of $1.49 million on $1.13 million of sales for the same period during the prior year. For the six months ended March 31, 2013, the Company incurred a net loss of $2.91 million on $768,555 of sales, as compared with a net loss of $2.52 million on $1.89 million of sales for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $1.47 million in total assets, $3.39 million in total liabilities and a $1.91 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/zuJXVP About IceWEB Sterling, Va.-based IceWEB, Inc., manufactures and markets purpose-built appliances, network and cloud-attached storage solutions and delivers on-line cloud computing application services. The Company's customer base includes U.S. government agencies, enterprise companies, and small to medium sized businesses (SMB). D'Arelli Pruzansky, P.A., in Boca Raton, Florida, expressed substantial doubt about IceWEB's ability to continue as a going concern. The independent auditors noted that the Company had net losses of $6,485,048 for the year ended Sept. 30, 2012. The Company reported a net loss of $6.5 million on $2.6 million of sales in fiscal 2012, compared with a net loss of $4.7 million on $2.7 million of sales in fiscal 2011. IEC ELECTRONICS: Gets NYSE MKT Listing Non-Compliance Notice ------------------------------------------------------------- IEC Electronics Corp. on May 21 disclosed it received a notice on May 20, 2013 from the NYSE MKT that the Company's failure to timely file its Quarterly Report on Form 10-Q for the quarter ended March 29, 2013 with the SEC does not satisfy a condition for the Company's continued listing on the Exchange and also is a material violation of its listing agreement with the Exchange. Therefore, the Exchange is authorized to suspend and remove the Company's securities from the Exchange unless prompt corrective action is taken, including submission of a plan by June 3, 2013 addressing how it intends to regain compliance with the listing standards by August 15, 2013. The Company intends to submit such a plan within the time established by the Exchange. If the Exchange accepts the plan, the Exchange may permit the Company to continue its listing during the plan implementation period, subject to periodic review of its progress. If the plan is not timely submitted or is not accepted by the Exchange, the Company will be subject to delisting proceedings. If the plan is accepted and the Company is not in compliance by August 15, 2013, or the Company does not make consistent progress in implementing the plan, the Exchange will initiate delisting proceedings as appropriate. About IEC Electronics Headquartered in Newark, New York, IEC Electronics Corporation -- http://www.iec-electronics.com-- is a provider of electronic manufacturing services ("EMS") to advanced technology companies primarily in the military and aerospace, medical, industrial and communications sectors. The Company specializes in the custom manufacture of high reliability, complex circuit cards, system level assemblies, a wide array of custom cable and wire harness assemblies, precision sheet metal products, and advanced research and testing services. IEC Electronics also has operations in Rochester, NY, Albuquerque, NM and Bell Gardens, CA. IN PLAY: Claims Due June 10; No Official Committee Formed --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado established June 10, 2013, as the deadline for any individual or entity to file proofs of claim against In Play Membership Golf, Inc. Governmental entities have until Oct. 23, 2013 to file their proofs of claims. Meanwhile, Richard A. Wieland, U.S. Trustee for Region 19, notified the U.S. Bankruptcy Court for the District of Colorado that he was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of In Play Membership Golf, Inc. He explained that there were too few unsecured creditors who are willing to serve on the committee. About In Play Membership In Play Membership Golf, Inc., doing business as Deer Creek Golf Club and Plum Creek Golf and Country Club, filed a Chapter 11 petition (Bankr. D. Col. Case No. 13-14422) in Denver on March 22, 2013. The Debtor estimated assets and liabilities of at least $10 million. According to the docket, the Chapter 11 plan and disclosure statement are due July 22, 2013. In Play Membership Golf, Inc., doing business as Deer Creek Golf Club and Plum Creek Golf and Country Club, filed a Chapter 11 petition (Bankr. D. Col. Case No. 13-14422) in Denver on March 22, 2013. The Debtor estimated assets and liabilities of at least $10 million. According to the docket, the Chapter 11 plan and disclosure statement are due July 22, 2013. INERGETICS INC: Incurs $2 Million Net Loss in First Quarter ----------------------------------------------------------- Inergetics, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss applicable to common shareholders of $2.02 million on $6,775 of total revenues for the three months ended March 31, 2013, as compared with a net loss applicable to common shareholders of $1.79 million on $8,497 of total revenues for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $715,268 in total assets, $6.70 million in total liabilities, $7.72 million in preferred stock, and a $13.72 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/qmz1Gf About Inergetics Paramus, N.J.-based Inergetics, Inc., formerly Millennium Biotechnologies Group, Inc., is a holding company for its subsidiary Millennium Biotechnologies, Inc. Millennium is a research based bio-nutraceutical corporation involved in the field of nutritional science. Millennium's principal source of revenue is from sales of its nutraceutical supplements, Resurgex Select(R) and Resurgex Essential(TM) and Resurgex Essential Plus(TM) which serve as a nutritional support for immuno-compromised individuals undergoing medical treatment for chronic debilitating diseases. Millennium has developed Surgex for the sport nutritional market. The Company's efforts going forward will focus on sales of Surgex in powder, bar and ready to drink forms. Inergetics disclosed a net loss of $4.27 million in 2012, as compared with a net loss of $5.47 million in 2011. Friedman LLP, in Marlton, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred substantial accumulated deficits and operating losses and has a working capital deficiency of $4,518,870. These conditions raise substantial doubt about the Company's ability to continue as a going concern. INTELSAT JACKSON: S&P Assigns 'B' Rating to $2BB Senior Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' issue-level rating and '4' recovery rating to Intelsat Jackson Holdings S.A.'s (Intelsat Jackson) proposed $2 billion senior guaranteed notes due 2023, to be issued at Intelsat Jackson. S&P's 'CCC+' issue-level rating and '6' recovery rating on Intelsat Jackson's 6.625% senior unguaranteed notes due 2022 remain unchanged following the company's announcement that it will issue a $635 million add-on to these notes, bringing the total amount outstanding to about $1.3 billion. "We expect the company to use proceeds from the proposed transactions to refinance its high coupon 11.25% senior notes due 2017 at Intelsat Luxembourg S.A. (Intelsat Luxembourg), as well as to refinance its existing senior unsecured credit facilities due 2014 at Intelsat Jackson, of which about $868 million is outstanding. At the same time, we have revised our recovery rating on the company's existing senior guaranteed debt at Intelsat Jackson to '4' from '3'. The '4' recovery rating indicates our expectation for average (30% to 50%) recovery for noteholders in the event of a payment default. The recovery rating revision reflects the incremental $1.13 billion of senior guaranteed debt at Intelsat Jackson following the proposed refinancing transactions. The 'B' issue-level rating on the existing senior guaranteed debt remains unchanged," S&P said. "Our 'B' corporate credit rating and stable outlook on parent Luxembourg-based fixed satellite service (FSS) provider Intelsat S.A. (formerly known as Intelsat Global Holdings S.A.), is not immediately affected by the proposed transactions, though we view it as a credit positive that will have material annual interest expense savings. The refinancing follows a recent series of transactions that have reduced the company's debt balances and interest costs, including the initial public offering (IPO) of Intelsat S.A. in April 2013 and refinancing of high coupon debt at Intelsat Luxembourg. In total, we estimate that 2013 refinancing and debt repayment activity (excluding the proposed transaction) has reduced annual interest expense by about $180 million. As a result, we expect that free operating cash flow (FOCF) will be in the $400 million to $450 million area over the next two years. Accordingly, despite our expectation for low-single-digit percent revenue growth over this period, we believe that adjusted leverage could begin to approach the mid-7x area by 2014, down from 8.0x as of March 31, 2013. Currently upgrade potential would be dependent on leverage reduction below 7x on a sustained basis, as well as ongoing positive FOCF generation and margin stability. Barring deterioration in operating trends, we believe this could occur in 2015 at the earliest, and as a result we could raise the rating if we believe the company remains on this trajectory," S&P noted. Ratings List Intelsat S.A. Corporate Credit Rating B/Stable/-- New Rating Intelsat Jackson Holdings S.A. $2 Bil. Senior Guaranteed Notes Due 2023* B Recovery Rating 4 *Guaranteed by subsidiaries of Intelsat Jackson. Ratings Unchanged; Recovery Rating Revised To From Intelsat Jackson Holdings S.A. Senior Guaranteed Notes B B Recovery Rating 4 3 INTERNATIONAL LEASE: Fitch to Rate Senior Unsecured Notes 'BB' -------------------------------------------------------------- Fitch Ratings expects to assign a rating of 'BB' to International Lease Finance Corp.'s (ILFC) benchmark size senior unsecured notes issuance under its shelf registration. The proposed notes are expected to mature in 2016. KEY RATING DRIVERS The expected debt issuance does not affect ILFC's existing long- term Issuer Default Rating (IDR) of 'BB' or its other debt ratings. Fitch notes that the proposed issuance is consistent with ILFC's overall financing plans to repay its debt obligations, purchase aircraft and for general corporate purposes. The notes are expected to rank equally in right of payment with existing senior unsecured debt. Covenants are expected to be consistent with previously issued senior unsecured debt including a limitation restricting ILFC's ability to incur liens to secure indebtedness in excess of 12.5% of ILFC's consolidated net tangible assets (excluding secured debt issued by certain non- restricted subsidiaries of ILFC). The Rating Outlook for ILFC remains Stable. For further information on ILFC's existing ratings, please refer to Fitch's press release 'Fitch Affirms International Lease Finance Corp's Ratings on Potential Sale' dated Dec. 10, 2012. RATING SENSITIVITIES In December 2012, ILFC's parent, American International Group, entered into an agreement to sell a majority stake in ILFC to a consortium of Chinese firms. Many details of the proposed transaction have yet to be finalized and Fitch will continue to assess the potential changes to ILFC's corporate governance and long-term strategy. A meaningful change in ILFC's growth plans may influence Fitch's long-term view of the ratings. Furthermore, any adverse impact on the company's current funding facilities or future availability of credit may have a negative impact on its ratings. ILFC's ratings are constrained by the company's lack of profitability in fiscal years 2010 and 2011, which was caused by significant impairment charges on older aircraft, as well as the weighted average age of its fleet, which is older than other Fitch-rated peers. In addition to the factors outlined above, negative momentum for the ratings and/or Outlook could result from inability to access capital markets to fund debt maturities or purchase commitments, deterioration in operating cash flow or a permanent increase in balance sheet leverage. Positive drivers would include consistent profitability, demonstrated funding flexibility, commitment to reduced leverage levels and more clarity with respect to ILFC's ownership group, long-term strategy and corporate governance structure. ILFC is a market leader in the leasing and remarketing of commercial jet aircraft to airlines around the world. As of March 31, 2013, ILFC owned an aircraft portfolio with a net book value of approximately $34 billion, consisting of 919 jet aircraft, on lease to approximately 175 customers in over 79 countries. Fitch expects to assign the following ratings: -- Proposed benchmark size senior unsecured notes due 2016 at 'BB'. Fitch currently rates ILFC and its related subsidiaries as follows: International Lease Finance Corp. -- Long-term IDR 'BB'; Outlook Stable; -- $3.9 billion senior secured notes 'BBB-'; -- Senior unsecured debt 'BB'; -- Preferred stock 'B'. Delos Aircraft Inc. -- Senior secured debt 'BB'. Flying Fortress Inc. -- Senior secured debt 'BB'. ILFC E-Capital Trust I -- Preferred stock 'B'. ILFC E-Capital Trust II -- Preferred stock 'B'. INTERNTAIONAL LEASE: Moody's Rates Floating Rate Notes 'Ba3' ------------------------------------------------------------ Moody's Investors Service assigned a Ba3 rating to International Lease Finance Corporation's (ILFC) floating rate senior unsecured notes due 2016 (Notes). ILFC's Ba3 Corporate Family rating and positive outlook are unchanged. Ratings Rationale: The Ba3 rating assigned to the Notes is based upon terms and ranking that is consistent with ILFC's existing unsecured debt. ILFC's ratings also reflect its strong global franchise positioning, operational and aircraft fleet diversity, manageable customer risk exposures, and resilient operating cash flow. In recent years, ILFC has extended its debt maturity profile, strengthened liquidity management, and reduced leverage. ILFC's ratings are constrained by challenges relating to sustaining lease margin improvements and generating attractive returns on equity. Additionally, ILFC's business is exposed to the effects of economic cyclicality on air travel volumes, aircraft demand and lease rates, and airline credit quality. Other factors that affect lease rates and operating performance include fuel price volatility and new aircraft production rates. Additional credit challenges include the monoline nature of ILFC's business, its exposure to aircraft residual value risks, and its reliance on confidence-sensitive wholesale funding. ILFC's parent American International Group, Inc. (AIG; Baa1 issuer rating) announced the sale of ILFC to Jumbo Acquisition Limited, a consortium of investors based primarily in China. ILFC's rating outlook is positive, based on the potential that the sale of ILFC to the new investor group will stabilize the company's ownership, lead to new business opportunities, and increase its access to funding. However, the extent to which ILFC's credit profile will benefit from the sale depends on the consortium members' strategic and financial objectives and their influence on ILFC's growth rate, portfolio concentrations and financial leverage. The principal methodology used in this rating was the Finance Company Global Rating Methodology published March 2012. International Lease Finance Corporation, headquartered in Los Angeles, California, is a major owner-lessor of commercial aircraft. IZEA INC: Incurs $883,800 Net Loss in First Quarter --------------------------------------------------- Izea, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $883,830 on $1.38 million of revenue for the three months ended March 31, 2013, as compared with a net loss of $917,190 on $1.61 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $1.01 million in total assets, $2.96 million in total liabilities and a $1.94 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/0VPAex About IZEA, Inc. IZEA, Inc., headquartered in Orlando, Fla., believes it is a world leader in social media sponsorships ("SMS"), a rapidly growing segment within social media where a company compensates a social media publisher to share sponsored content within their social network. The Company accomplishes this by operating multiple marketplaces that include its platforms SocialSpark, SponsoredTweets and WeReward, as well as its legacy platforms PayPerPost and InPostLinks. The Company has incurred significant losses from operations since inception and has an accumulated deficit of $20.9 million as of June 30, 2012. Cross, Fernandez & Riley, LLP, in Orlando, Florida, expressed substantial doubt about IZEA's ability to continue as a going concern, following the Company's results for the fiscal year ended Dec. 31, 2011. The independent auditors noted that the Company has incurred recurring operating losses and had an accumulated deficit at Dec. 31, 2011, of $18.1 million. J.C. PENNEY: Term Loan Upsize No Impact on Fitch's 'BB-' Rating --------------------------------------------------------------- Fitch Ratings has made no changes to its ratings on J.C. Penney Corporation, Inc., following the company's announcement that it has upsized its new five-year senior secured term loan facility. J.C. Penney increased the loan to $2.25 billion from $1.75 billion after getting an amendment to its credit facility, which had previously limited the incremental amount of first- and second- lien debt to $1.75 billion. Fitch rates the new term loan 'BB-/RR1', indicating outstanding recovery prospects (91% - 100%) in a distressed scenario, and the unsecured notes are rated 'B-/RR4', indicating average recovery prospects (31% - 50%), in spite of the incremental $500 million in secured debt. This is based on Fitch's recovery analysis that assigns a liquidation value under a distressed scenario of $5.7 billion as of May 4, 2013 for J.C. Penney. Fitch views the injection of additional capital via the expected new $2.25 billion secured term loan as a positive to fund operations in 2013 given projected cash burn of $1.7 billion-$1.9 billion, with first quarter cash burn of approximately $960 million. Fitch currently assumes EBITDA of negative $500 million on top-line contraction in the high single digits, $800 million in capex, and potential working capital use of $200 million-$300 million. Beyond 2013, Fitch estimates that the company will have to generate a minimum of $750 million-$800 million in EBITDA to fund ongoing capex in the $400 million range and cash interest expense of $360 million-$375 million. This would require the company to return sales to about $14 billion, or 8% above 2012 levels, and realize gross margins in the 39%-40% range given the current cost structure, and some expected incremental investments in areas such as advertising and marketing to prop up sales via a return to a high-low pricing strategy. This appears to be an ambitious level, and FCF is still expected to be materially negative in 2014. However, the pace of decline should be less than what was seen in 2012 and the first quarter of 2013 (top-line decline of 24.8% and 16.4%, respectively) due to several factors including: the reintroduction of coupons, which is under way; the imminent completion of the very extensive and disruptive home furnishings makeover; the reintroduction of critical brands such as St. John's Bay in major categories; and the addition of new brands. The speed and ability of the company to stabilize sales and return to positive comparable store sales (comps) growth will determine additional funding requirements in 2014 and beyond. As of now, Fitch expects liquidity, between the new term loan and the $1.85 billion credit facility, to be adequate through 2014. The new $2.25 billion term loan facility will be secured by (a) first lien mortgages on owned and ground leased stores (subject to certain restrictions primarily related to Principal Property owned by J.C. Penney Corporation, Inc.), the company's headquarters and related land, and nine owned distribution centers; (b) a first lien on intellectual property (trademarks including J.C. Penney, Liz Claiborne, St. John's Bay, and Arizona), machinery, and equipment; (c) a stock pledge of J.C. Penney Corporation and all of its material subsidiaries and all intercompany debt; and (d) second lien on inventory and accounts receivable that back the $1.85 billion asset-backed (ABL) facility. The upsizing of the term loan maxes out the incremental amount of first- and second-lien debt J.C. Penney can incur under its amended credit facility, although it could try to tap into the $400 million accordion feature on its revolver, and could issue unsecured, subordinated debt, convertible notes or preferred equity. The proceeds of the term loan will be used to fund operations, working capital, and capital expenditures and to repay the company's $254.5 million outstanding 7 1/8% debentures due 2023 (of which $242.8 million in principal amount or 95.4% of the outstanding value have been validly tendered as of the end of May 20, 2013) to get rid of all restrictive covenants to enable the company to issue and secure the term loan of this size. Fitch currently rates J.C. Penney as follows: J.C. Penney Co., Inc. -- Issuer Default Rating (IDR) 'B-'. J.C. Penney Corporation, Inc. -- IDR 'B-'; -- $1.85 billion senior secured bank credit facility 'BB-/RR1'; -- $2.25 billion senior secured term loan 'BB-/RR1'; -- Senior unsecured notes and debentures 'B-/RR4'. The Rating Outlook is Negative. RATING SENSITIVITIES A negative rating action could occur on worse-than-expected deterioration in EBITDA that further constrains cash flow and liquidity, and impedes the company's day-to-day operations. A positive rating action could occur if the top-line starts to stabilize, the company realizes more normalized gross margin levels, and does not need additional financing to fund operations. J.C. PENNEY: $500MM Loan Increase No Impact on Moody's 'Caa1' CFR ----------------------------------------------------------------- Moody's Investor's Service stated that J.C. Penney Company, Inc.'s Caa1 Corporate Family Rating and negative outlook are not currently impacted by the increase to $2.25 billion from its previously announced $1.75 billion senior secured term loan due 2020. In addition, the increase will not change the B2 rating on the $2.25 billion term loan, the Caa2 senior unsecured notes rating, nor the SGL-3 Speculative Grade Liquidity rating. The larger size of the term loan will further bolster JCP's liquidity. Thus, it provides JCP with additional financial flexibility to address its operating performance weakness. However, the ratings are not currently impacted as JCP's credit metrics and operating performance remain very fragile. Although first quarter operating results largely met Moody's expectations, operating performance was very weak. In addition, Moody's forecasts that JCP will continue to experience a sizable cash flow burn in the second and third quarters of 2013. JCP generated about $960 million in negative cash flow in the first quarter. Moody's estimates that JCP will likely burn an additional $1.4 billion of cash flow in the second and third quarters of 2013 before turning free cash flow positive in the fourth quarter. 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. J.C. Penney Company, Inc. is one of the U.S.'s largest department store operators with about 1,100 locations in the United States and Puerto Rico. It also operates a website, www.jcp.com. Revenues are about $13 billion. J.C. PENNEY: S&P Lowers Rating on Senior Secured Term Loan to 'B-' ------------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its rating on J.C. Penney Corp. Inc.'s (a subsidiary of J.C. Penney Co. Inc.) senior secured term loan to 'B-' from 'B' and revised the recovery rating to '2' from '1'. The '2' recovery rating indicates S&P's expectation for a substantial recovery (albeit at the high end of the 70%-90% range) in the event of a payment default. The lower ratings reflect a decline in recovery estimates for term loan lenders because of the upsizing. The company plans to use the proceeds from the term loan to fund operating needs, working capital requirements, and the tender for its debentures due 2023. At the same time, S&P affirmed all other ratings on the company, including the 'CCC+' corporate credit rating. The outlook is negative. "The rating on Penney reflects Standard & Poor's assessment that the company's business risk profile is "vulnerable" and its financial risk profile is "highly leveraged." Our business risk assessment incorporates our analysis that the department store industry is highly competitive, with large, well-established participants," said credit analyst David Kuntz. "Based on this environment, we believe further performance difficulties may cause the company to lose market share to other players, such as Macy's, Kohl's Corp., Sears, other department stores, or off-price retailers. We believe there could be further meaningful changes over the next few months as the new CEO reassesses the "shops," promotional, and marketing strategies that contributed to Penney's poor performance over the past year. In our opinion, the company will implement these changes over the next few months, but its ability to stabilize operations remains highly uncertain." The negative outlook reflects S&P's view that further operational issues are likely over the next year as the company refines its "shops", marketing, and promotional strategies and that success remains uncertain. Although S&P believes the company has alleviated some of the very near term concerns with the recent draw down and term loan issuance, S&P do not believe that the company will generate sufficient operating cash flows to cover working capital and capital expenditures. Although S&P expects some recovery of EBITDA over the next 12 months, it do not believe credit protection measures will be meaningful with coverage substantially below 1.0x. S&P could consider lowering its rating if performance weakened further such that it believed the company would likely default within the next 12 months. In such a scenario, the company is unable to stabilize operations, leading to a cash burn that is meaningfully higher than S&P's forecast. Under this scenario, vendors would tighten turns leading to a substantial decline in cash on hand. Although S&P considers the possibility for an upgrade to be remote, key positives would include performance recovery much earlier than S&P currently expects as the company implements its revised strategy. Another important component would be sufficient cash flow from operations that cover ongoing working capital needs and capital expenditures. Any consideration for an upgrade would require sustained leverage below 7.0x and interest coverage above 1.5x. K-V PHARMACEUTICAL: Seeks More Time to Improve Plan Proposals ------------------------------------------------------------- K-V Pharmaceutical Company and its debtor affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to further extend their exclusive plan filing deadline through and until Aug. 16, 2013, and their exclusive plan solicitation period through and until Sept. 16, 2013. The additional time will be used by the Debtors to seek to have both a group of holders of KV's 2.5% Contingent Convertible Subordinated Notes due 2033 and the ad hoc group of holders of KV's 12% Senior Secured Notes due March 15, 2015, improve their plan proposals and allow the Debtors to choose the proposal that is in the best interests of the their estates and their creditors. The Investors proposed an alternative plan that, although subject to further negotiations, offered a superior restructuring alternative to the Debtors-proposed plan because, among other reasons, it provided enhanced recoveries to creditors throughout the Debtors' capital structure. Subsequent to the filing of the Investor Proposal, the Ad Hoc Senior Noteholder Group, who was a supporter of the Debtors' existing Plan, proposed an alternative that would result in further increased recoveries to the Debtors' creditors, as compared to both the original Plan and the Investor Proposal. Following a chambers conference with the Court on May 8, the DIP Agent agreed to waive defaults under the DIP Facility related to the Debtors' failure to reach the Disclosure Statement milestones, as well as an extension of the milestones generally. A hearing on the Debtors' request will be held on May 30, 2013, at 10:00 a.m. (Eastern time). Objections are due May 23. 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. KESTREL TECHNOLOGIES: RAPTr Sold for $1.5 Million Cash ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Kestrel Technologies Inc. was authorized by the bankruptcy court this week to sell the RAPTr fixed-income order management system for $1.5 million to Technology Funding LLC. Although an auction was scheduled, none was held because there were no competing offers. Kestrel Technologies, Inc., sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 12-15052) in Manhattan on Dec. 31, 2012. Heidi J. Sorvino, Esq., at Hodgson Russ LLP, serves as counsel. The Debtor estimated assets of at least $1 million and liabilities of at least $10 million. KIDSPEACE CORP: Nonprofit Files Ch. 11 to Restructure Bonds ----------------------------------------------------------- KidsPeace Corp., a provider of behavioral services for children, filed a petition for Chapter 11 reorganization (Bankr. E.D. Pa. Case No. 13-14508) on May 21 in Reading, Pennsylvania. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the company seeks to restructure $51.3 million in bonds and negotiate a shortfall in pension funding with the Pension Benefit Guaranty Corp. The nonprofit organization operates a 96-bed pediatric psychiatric hospital in Orefield, Pennsylvania. Based in Schnecksville, Pennsylvania, the organization also operates residential treatment facilities, foster care services, and outpatient services. Assets are $86.7 million, and debt on the books is $158.6 million, according to a court filing. Revenue in 2012 was $119.9 million, resulting in a $4.6 million loss. There is an agreement to restructure the so-called 1998 and 1999 bonds by giving the holders $24 million in new 30-year bonds with interest at 7.5 percent. The indenture trustee for the bonds is UMB Bank from St. Louis. The organization intends to use bankruptcy to negotiate with the PBGC over a $100 million shortfall in the pension plan. KidsPeace blamed bankruptcy on the reduction in Medicaid reimbursement rates and declining enrollment in various programs as states increase eligibility standards. LA FRONTERA: S&P Assigns 'BB-' Rating to $1.15BB Term Loan B ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB-' rating and '2' recovery rating to La Frontera Generation LLC's first-lien senior secured $1.15 billion term loan B. The '2' recovery rating indicates substantial recovery (70% to 90%) of principal in a default scenario. The outlook is stable. La Frontera is a single-purpose entity issuing project finance debt that owns two combined-cycle natural gas turbine (CCGT) facilitates with total operating capacity of 3,000 megawatts in ERCOT North. While S&P considers La Frontera's obligations to be nonrecourse to that of ultimate parent NextEra Energy Inc., the lack of certain structural features such as an independent director and a nonconsolidation opinion prevents S&P from treating those obligations as bankruptcy remote, and as a result, the rating is weak-linked to the parent company. The project will initially be capitalized with $1.15 billion of debt and it will use initial term loan proceeds to fund a $1 billion dividend to NextEra. "The stable outlook on La Frontera reflects our expectations of low refinancing risk at maturity due to improving, albeit likely volatile, power market conditions in ERCOT. We would consider a downgrade if we expected debt service to fall substantially below 2x or if forecast refinancing risk increased to more than $100 per kilowatt. Such a scenario would most likely happen due to lower merchant power revenues or unanticipated operational difficulties," said Standard & Poor's credit analyst Nora Pickens. An upgrade is unlikely at this time, but could occur if the project mitigates its exposure to merchant market risk by entering into new hedging agreements that increase cash flow predictability or if S&P has higher confidence in ERCOT market conditions such that energy prices there rise and stabilize for an extended period of time. As such, S&P could consider an upgrade if it expected debt service coverage to rise to more than 5x and refinancing risk to remain minimal in 2020. LAKELAND INDUSTRIES: In Financing Talks; Gets Nasdaq Notice ----------------------------------------------------------- Lakeland Industries, Inc. on May 21 disclosed that the Company accepted a commitment letter from a bank for a Senior Credit Facility subject to certain terms and conditions and is currently working towards closing this financing. However, no assurances can be given that this transaction or any transaction will be consummated. The Company has received a letter from The Nasdaq Stock Market notifying the Company that it is not in compliance with the Nasdaq Listing Rule 5250(c)(1) because it had not filed its Annual Report on Form 10-K for the fiscal year ended January 31, 2013 on a timely basis with the Securities and Exchange Commission. Under Nasdaq rules, the Company has 60 calendar days, or until July 16, 2013, to regain compliance with Nasdaq's filing requirements for continued listing. The Company has filed its 2013 Form 10-K and believes it is now in full compliance. Declining sales in FY13 led to quarterly losses in Brazil, which led to the necessity of writing off all goodwill, certain intangibles, and deferred tax assets of Brazil. These factors led to a default on the TD Bank loan, which in turn created substantial doubt about our ability to continue as a going concern. Successful completion of the proposed new financing, in management's opinion, would relieve this condition. Thus, the Company engaged with new lenders and considered other options, such as the sale of the Company, the sale of assets which has occurred, and a refinance of the TD Bank loan. The Company will continue pursuing all options to maximize stockholder value. During the course of the year: -- The Company recorded a $10 million goodwill and other intangibles impairment charge against its Brazil operations as a result of poor sales and operating losses in Brazil in the fourth quarter of fiscal 2013, which we reported on March 7, 2013. -- The Company recorded a $7.9 charge to settle the adverse arbitration award in Brazil. -- The Company recorded a valuation allowance of $4.5 million against its deferred tax asset. -- While the Company sustained a $1.0 million operating loss, this includes a $1.6 million operating loss from Brazil, meaning the rest of Lakeland worldwide reported operating income of $0.6 million. -- The Company has taken an additional $800,000 markdown on the Indian assets held for sale due to the difficulty in disposing of this property and the likely realizable value. -- Excluding Brazil sales, Lakeland worldwide sales have had sequential growth for four consecutive quarters starting with Q4 fiscal 2012 as the low point resulting from the termination of the Company's supply contract with DuPont. -- The Company has paid a total of $1.6 million against the Brazil settlement liability since September 2012 through March 2013, all of which came from operating cash flow in the US with no additional borrowing needed from its TD facility in the US. -- External sales growth in China, UK and Chile remain very strong. Commenting on the financial results and recent developments, Lakeland Industries President and Chief Executive Officer Christopher J. Ryan said, "We are disappointed about our operations in Brazil affecting the rest of the Company in this way. Our other operations are solid, and management is currently exploring our options in Brazil." Net Sales. Net sales from continuing operations decreased $1.2 million, or 1.3%, to $95.1 million for the year ended January 31, 2013, compared to $96.3 million for the year ended January 31, 2012. The net decrease was mainly due to a $9.8 million decrease in domestic sales, partially offset by a $8.6 million increase in foreign sales. The net decrease in the US was comprised mainly of a decrease in US disposables sales, resulting from the loss of the Tyvek license from DuPont. This decrease in US sales was offset by significant increases in foreign sales, including a $1.2 million increase in sales by Qualytextil, SA in Brazil, a $3.2 million increase in European sales and a $1.8 million growth in combined Chile and Argentina sales. External sales from China were flat for the fourth quarter FY13 but were up for the full year 15.7%. Sales in Brazil have decreased in Q4FY13 and we expect next fiscal year's sales to be lower in Brazil. Net sales from continuing operations in Q4 FY13 increased by $3.2 million, or 16.0%, to $23.4 million from Q4 of FY12. This increase was due to an increase in foreign sales, from $10.6 million in Q4 FY12 to $11.3 million in Q4 FY13. Of these amounts, sales in Brazil were $2.7 million and $2.7 million for Q4 of FY12 and FY13, respectively. Gross Profit. Gross profit from continuing operations decreased $1.5 million, or 5.1%, to $27.3 million for the year ended January 31, 2013, from $28.8 million for the year ended January 31, 2012. Gross profit as a percentage of net sales decreased to 28.7% for the year ended January 31, 2013, from 29.9% for the year ended January 31, 2012. The major factors driving the changes in gross margins were: -- Disposables gross margin increased by 4.0 percentage points in FY13 compared with FY12. This increase was mainly due to changes in the sales mix to primarily Lakeland branded products this year, while last year had more than 50% of North American disposable sales were DuPont products at a lower margin. This year's margin was lower than it otherwise would be as a result of lower volume and an increase in inventory reserves against Tyvek items remaining. -- Brazil gross margin was 31.1% for this year compared with 42.8% last year, primarily due to issues with a contract with the Brazilian Navy. The Brazilian currency weakened significantly earlier in the year, thereby greatly increasing the cost of material purchased from a USA supplier. Further, due to the length of time elapsed since the bid was submitted in respect of the Navy contract, there were increases in the material cost, along with a need to change certain components at a higher cost. There were also similar issues with several utility contracts. -- Glove margins increased 5.0 percentage points primarily from improved product mix. -- Chemical margins were decreased by 8.5 percentage points due to different sales mix. -- Canada gross margin decreased by 1.9 percentage points primarily due to discounting remaining Tyvek inventory. -- UK margins decreased by 1.5 percentage points primarily from higher volume from larger sales at lower margins. -- Argentina margins decreased by 9.2 percentage points due to lack of capital. -- Chile margins increased by 8.1 percentage points as a result of stronger sales mix. Operating Expenses. Operating expenses from continuing operations increased $1.3 million, or 4.9%, to $28.3 million for the year ended January 31, 2013, from $27.0 million for the year ended January 31, 2012. As a percentage of net sales, operating expenses increased to 29.8% for the year ended January 31, 2013, from 28.1% for the year ended January 31, 2012. The increase in operating expenses in the year ended January 31, 2013, as compared to the year ended January 31, 2012, included: -- $0.7 million increase in sales salaries due to the hiring of additional sales people to support growth in the US, Asia, and South America. -- $0.6 million increase in commissions, of which 0.5 million was in Brazil, relating to higher commissions on large bid contracts delivered in Q1-Q3 of FY13. -- $0.1 million increase in sales administrative salaries due to increase in customer service capacity in Alabama. -- $0.1 million increase in insurance due to increased claims experience. -- $0.1 million increase in employee benefits due to increase in unemployment expense. -- $0.1 million increase in bad debt resulting from one large account in Chile. -- $0.2 million increase in professional fees as a result of the issues in Brazil. -- (0.1) million decrease in administrative salaries, which includes a $0.6 million accrual for the contract termination of the President of the Brazilian subsidiary offset against $(0.7) million reduction in administrative salaries in Brazil, throughout the year, which is the result of our efforts to reduce costs. A total of 10 employees in administration and sales were terminated in Brazil in FY13. A new law was passed in Brazil resulting in lower payroll taxes, officers in Brazil took a 10% payroll cut for two quarters, and the depreciated currency resulted in lower payroll expense in Brazil. -- $(0.2) million decrease in research and development due to large R&D expenses in FY12. -- $(0.3) million in decreased freight out expense due to more consolidated shipping and better management oversight. Operating Profit/(Loss). Operating profit/(loss) from continuing operations decreased by $2.7 million to $(1.0) million from $1.7 million for the prior year. Operating profit as a percentage of net sales decreased to (1.1)% for the year ended January 31, 2013, from 1.8% for the year ended January 31, 2012, primarily due to sharply lower volume in disposables in the US due to the termination of the Company's Tyvek and Tychem supply agreement by DuPont, a $0.6 million charge for contract termination of the President of the Brazilian subsidiary, issues in Brazil with the Navy and other contracts caused by a currency devaluation earlier in the year and weak volume in Brazil, mainly due to lack of large bid contracts in Q4 of FY13. Without Brazil's FY13 operating loss of $1.6 million, the Company would have had operating income of $0.6 million. Interest Expense. Interest expense increased by $0.2 million for the year ended January 31, 2013, compared to the year ended January 31, 2012, because of term loan borrowing in 2012 to fund capital expansion in Brazil and Mexico outstanding throughout FY13 and also borrowing in Brazil at higher rates prevailing in Brazil and the US. Further, the Company paid higher interest rates on its TD facility in FY13 as a result of several amendments during FY13. Other Expenses - Net. The increase in other expenses resulted mainly from the $10.0 million write down of goodwill in Brazil and the $7.9 million arbitration settlement, with two of the former owners of the Company's subsidiary in Brazil. Income Tax Expense. Income tax expenses from continuing operations consist of federal, state and foreign income taxes. Income tax expense increased $5.3 million to $5.0 million for the year ended January 31, 2013, from $(0.3) million for the year ended January 31, 2012. The Company's effective tax rate was meaningless for the fiscal years ended January 31, 2013 and 2012. Our effective tax rate varied from the federal statutory rate of 34% due primarily to the $7.9 million arbitration settlement in Brazil, which did not get a tax benefit, $10.0 million goodwill and other intangibles write-off in Brazil and the establishment of a $4.5 million valuation allowance for deferred tax assets. The Company's income taxes in the current year were benefited by losses in the US and a "check-the-box" US tax benefit from the losses in India at a higher rate than most of the foreign income. Further, there was a $4.5 million valuation allowance charged to tax expense this year relating to the deferred tax asset. Net Income/(Loss). Net income/(loss) from continuing operations decreased $26.9 million to a loss of $(25.8) million for the year ended January 31, 2013, from $1.1 million for the year ended January 31, 2012. The decrease in net income was primarily a result of arbitration settlement and goodwill and other intangibles impairment charge in Brazil. Fourth Quarter Results Continuing Operations. The sales in Brazil in Q4 of FY13 and FY12 had no large bid sales and were $353,000 lower than the prior year. The increase in sales in other foreign jurisdictions is primarily due to the introduction of new products and new marketing material targeting specific markets. Factors effecting 4QFY13 results included: -- A goodwill and other intangibles impairment charge of $10.0 million in Brazil. -- $0.6 million separation accrual in Brazil for a departing executive. -- A loss of $0.2 million on foreign exchange in Brazil. -- A valuation allowance for deferred tax in the amount of $4.5 million. -- The Company continues to see price increases in its Chinese manufacturing operations with labor source availability a concern. -- As a result of general elections in the fourth quarter, the public tenders were very weak in Brazil across all markets throughout the quarter resulting in weaker sales. -- In Q4 the Company began initiatives to "right size" the Brazilian operation. This initiative is expected to be complete in Q2 FY14. About 70% of the severance and labor reductions costs were recognized in November and January of Q4. -- Lakeland Europe and Lakeland China both experienced strong Q4 sales closing FY13 with record sales for each division. Discontinued Operations. In Q4FY12, the Company commenced its efforts to market its property in India. Based on the difficulty in marketing this property in Q4FY13, the Company determined carrying value exceeded projected undiscounted cash flows and recorded a loss of $800,000 to reduce carrying value to future value. Management's Comments Mr. Ryan continued, "Lakeland will continue to seek to reduce operating costs, dispose of low ROI assets and increase sales. We hope to completely stabilize the Company by the end of the third quarter with more restructuring and reduction in both debt and operating costs." About Lakeland Industries, Inc. Headquartered in Ronkonkoma, New York, Lakeland Industries, Inc. -- http://www.lakeland.com/-- is a global manufacturer of industrial protective clothing for industry, municipalities, healthcare and first responders on the federal, state and local levels. LATTICE INC: Incurs $116,800 Net Loss in First Quarter ------------------------------------------------------ Lattice Incorporated filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $116,827 on $2.18 million of revenue for the three months ended March 31,2013, as compared with net income of $28,760 on $2.08 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $5.51 million in total assets, $7.29 million in total liabilities, $1.89 million in equity attributable to shareowners of the Company and $120,133 in equity attributable to noncontrolling interest. A copy of the Form 10-Q is available for free at: http://is.gd/R1dfck About Lattice Inc. Pennsauken, New Jersey-based Lattice Incorporated provides telecommunications services to correctional facilities and specialized telecommunication service providers in the United States. Lattice Incorporated disclosed a net loss of $570,772 on $10.77 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $6.06 million on $11.44 million of revenue for the year ended Dec. 31, 2011. Rosenberg Rich Baker Berman & Company, in Somerset, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has a history of operating losses, has a working capital deficit and requires additional working capital to meet its current liabilities. These factors raise substantial doubt about the Company's ability to continue as a going concern. LYON WORKSPACE: Creditors Have Until June 28 to File Claims ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois established June 18, 2013, as the deadline for any individual or entity to file proofs of claim against Lyon Workspace Products, L.L.C., et al. The court also set July 18 as the governmental unit bar date. Proofs of claims must be submitted to: Kurtzman Carson Consultants LLC Attn: Lyon Workspace Products, L.L.C. 2335 Alaska Avenue El Segundo, CA 90245 About Lyon Workspace Lyon Workspace Products, L.L.C. and seven affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 13-2100) on Jan. 19, 2012. Lyon Workspace -- http://www.lyonworkspace.com/-- was a manufacturer and supplier of locker and storage products. It had 400 full-time employees, 53% of whom are salaried employees. Eight percent of the employees are members of the Local Union No. 1636 of the United Steelworkers of America, A.F.L.-C.I.O. The Debtor disclosed $41,275,474 in assets and $37,248,967 in liabilities as of the Chapter 11 filing. Attorneys at Perkins Coie LLP serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. MAJESTIC STAR: S Corp. Status Isn't Property for Bankr. Purposes ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in Philadelphia issued a 55-page, single-spaced decision dealing with tax-loss carrybacks, tax-loss carryforwards, S corporation status, QSub status, and the question of what tax attributes and rights are or aren't property of a bankrupt company. According to the report, the Third Circuit in Philadelphia, in an opinion by Circuit Judge Kent A. Jordan, concluded that the S corporate tax status of a non-bankrupt parent isn't property of a bankrupt subsidiary. In reaching the result, Judge Jordan disagreed with lower courts having a contrary conclusion. No other federal circuit court has addressed the question, Judge Jordan said. The issue arose in the completed reorganization of casino operator Majestic Star Casino LLC. The genesis of the dispute arose before implementation of the Chapter 11 plan in December 2011. The company in bankruptcy was a subsidiary of a nonbankrupt parent. The parent, owned by an individual, previously elected so- called S status where income and losses of the subsidiary passed directly through to the individual shareholder. The bankrupt subsidiary was known as a qualified subchapter S subsidiary, or QSub, which meant that it too wasn't subject to federal taxes. During bankruptcy, the owner, as sole shareholder of the non- bankrupt parent, terminated S status, which had the effect of ending the bankrupt subsidiary's QSub status. The bankrupt company sued in bankruptcy court, alleging that QSub status was a property right the owner had no right to terminate. The bankruptcy court agreed and commanded the owner to restore S status to the non-bankrupt parent and Qsub status to the bankrupt entity, now out of bankruptcy. The bankruptcy judge allowed a direct appeal to the circuit court, which reversed May 21. Judge Jordan, the report discloses, said that whether tax status is "property" is a question of federal tax law, not state law. If it is property, the second question is whether the status is property of the parent or the subsidiary. The opinion describes how the U.S. Supreme Court ruled in 1966 in a case called Segal v. Rochelle that a tax-loss carryback is property of a bankrupt estate. In a 1991 decision the U.S. Court of Appeals in New York in a case called Prudential Lines extended the Segal doctrine to rule that taxloss carryforwards likewise are bankrupt estate property. Since then lower courts expanded the doctrine to include S corporate status as a bankrupt's property. Judge Jordan analyzed S corporate status as being different from net operating losses, because tax losses are set in stone by events occurring before bankruptcy. By contrast, S or QSub status can be terminated, at the whim of the shareholder. In a pronouncement of importance beyond the case, Judge Jordan rejected the notion that status must be property just because it's valuable. He went on to reject the idea that S status was a property interest of the subsidiary. Judge Jordan next analyzed QSub status. He pointed out that a Qsub doesn't even exist for federal tax purposes. He said it's treated as having been liquidated into the parent. Even if Qsub status were property, it's not property of the subsidiary, Judge Jordan said. Jordan reversed and sent the case back to bankruptcy court with instructions to dismiss the suit for lack of standing by the formerly bankrupt subsidiary. He said that any property right belonged to the owner of the parent and that the subsidiary didn't have standing to sue because it couldn't exercise decision-making power belonging to the owner. Judge Jordan also said there was no property right in the subsidiary because the right to elect S status wasn't a right the subsidiary had before bankruptcy. Judge Jordan's opinion points out how the ruling by the bankruptcy court would have led to inequitable results. If the owner could be forced to reinstate S and QSub status, the bankrupt company would retain the income it generated although tax liability would pass along to the individual owner who wouldn't have access to income to pay the taxes. Judge Jordan also pointed out how allowing the bankruptcy court ruling to stand would permit the bankrupt company to avoid liability for cancellation of indebtedness income without reducing tax attributes. The Internal Revenue Service took the appeal alongside the estate of the owner who had died. The appeal is Majestic Star Casino LLC v. Barden Development Inc. (IN re Majestic Star Casino LLC), 12-3200, U.S. Third Circuit Court of Appeals (Philadelphia). A copy of the Third Circuit's May 21 Opinion is available at http://is.gd/1ZiJQIfrom Leagle.com. About Majestic Star Headquartered in Poughkeepsie, New York City, Majestic Capital, Ltd., fdba CRM Holdings, Inc., filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 11-36225) on April 29, 2011. Affiliates also sought Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 11-36221 - 11-36234) on April 29, 2011. Bankruptcy Judge Cecelia G. Morris presides over the case. Thomas Genova, Esq., at Genova & Malin, Attorneys represents the Debtors in their restructuring effort. Murphy & King, P.C. serves as the Debtors' co-counsel. The Debtors tapped Michelman & Robinson, LLP, as special counsel, and Day Seckler, LLP, as accountants and financial advisors. The Debtor disclosed $436,191,000 in assets and $421,757,000 in liabilities as of Dec. 31, 2010. Bruce F. Smith, Esq., and Steven C. Reingold, Esq., at Jager Smith P.C., represent the Official Committee of Unsecured Creditors. The Committee has also tapped J.H. Cohn LLP as its financial advisors. MALUHIA DEVELOPMENT: U.S. Trustee Seeks Chapter 7 Conversion ------------------------------------------------------------ William T. Neary, the United States Trustee for Region 6, filed a motion with the U.S. Bankruptcy Court seeking to dismiss or convert the chapter 11 case of Maluhia Development Group LLC, dba MDG, to chapter 7. The Debtor does not oppose dismissal. According to the U.S. Trustee, the bankruptcy had been pending for over three years. While the Debtor filed a proposed disclosure statement and plan of reorganization in July 6, 2012, no plan has been confirmed by court-ordered confirmation deadlines. The Debtor is also delinquent in filing of operating reports for January, February, and March 2013. About Maluhia Development Chicago, Illinois-based Maluhia Development Group, LLC, dba MDG, filed for Chapter 11 bankruptcy protection (Bankr. N.D. Texas Case No. 10-30475) on Jan. 21, 2010. Rakhee V. Patel, Esq., at Pronske & Patel, P.C., assists the Company in its restructuring effort. The Debtor disclosed $14,734,422 in assets and $16,643,988 in liabilities as of the Chapter 11 filing. MIDSTATES PETROLEUM: S&P Affirms B- Rating to Sr. Unsecured Notes ----------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B-' senior unsecured note ratings on Houston-based Midstates Petroleum Co. Inc. and removed them from CreditWatch where S&P placed them with developing implications on April 4, 2013, following the announcement that the company would acquire Panther Energy LLC. The 'B' corporate credit rating and positive outlook on Midstates are unaffected. At the same time, S&P assigned its 'B-' issue rating (one notch lower than the corporate credit rating) to the company's proposed $700 million senior unsecured notes due 2021. The senior unsecured recovery rating is '5', indicating S&P's expectation of modest (10% to 30%) recovery in the event of a payment default. S&P notes that its recovery assessment is near the bottom of the modest category. An increase to the company's $425 million committed borrowing base without a commensurate increase in S&P's estimated reserve value could result in a lower senior unsecured rating. "The ratings on Midstates reflect its 'vulnerable' business risk, 'aggressive' financial risk, and 'adequate' liquidity based on S&P's assessment of the company's limited scale of operations, aggressive debt leverage, and high capital spending levels," said Standard & Poor's credit analyst Paul Harvey. The positive outlook reflects the potential for an upgrade over the next 12 months if Midstates can maintain reserves above 120 mmboe (minimum 35% to 40% proved developed) and a proved developed reserve life of at least 4.5 years. To accomplish this, Midstates will need to successfully integrate the Panther acquisition as well as continue to successfully develop its Mississippian and Wilcox assets, which S&P views with some uncertainty given Midstates' short history using horizontal drilling in these plays. S&P could maintain the rating if Midstates fails to maintain production of at least 20,000 boe per day or its proved developed reserve life falls below 4 years. In addition, S&P could maintain the rating if forecasted debt leverage exceeds 4x with no near- term remedy. This could occur if crude oil prices fall below $75 per barrel without a compensating reduction in capital spending. The exploration and production company intends to use proceeds to fund its acquisition of Panther Energy and refinance borrowings under its credit facility. MMODAL INC: S&P Raises Corp. Credit Rating to 'B'; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Franklin, Tenn.-based MModal Inc. to 'B' from 'CCC+'. The outlook is stable. At the same time, S&P raised its issue-level rating on the company's $520 million senior secured facilities, which consist of a $75 million revolving credit facility due 2017 and a $445 million term loan due 2019, to 'B+' from 'B-'. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery in the event of payment default. In addition, S&P raised its issue-level rating on the company's $250 million unsecured notes due 2020 to 'CCC+' from 'CCC-'. The '6' recovery rating indicates S&P's expectation for negligible (0% to 10%) recovery in the event of payment default. "The upgrade reflects our view that the amended credit agreement covenants will significantly reduce the risk of covenant violation," said Standard & Poor's credit analyst David Tsui. A generally weaker-than-expected medical transcription business environment and MModal's slower-than-expected product transition in 2012 led to low-single-digit revenue growth for the year. We expect revenue growth in 2013 to be flat, as the company transitions its strategy to one that better serves the current competitive and demand environment. S&P views MModal's business risk profile as "weak" because of its narrow focus on the generally fragmented U.S. clinical documentation industry, which includes a more diversified direct competitor with greater financial resources. In S&P's assessment, the company's financial risk profile is "highly leveraged," reflecting pro forma operating-lease adjusted leverage of about 6.8x as of March 31, 2013. S&P expects MModal to generate positive, albeit minimal, free operating cash flow, in 2013. In S&P's assessment, the company's management and governance is "fair". MModal is a provider of clinical narrative capture services, speech and natural language understanding technology, and clinical documentation workflow solutions to the U.S. health care industry. The stable outlook reflects S&P's view that the company's highly recurring revenue base and diversified customer base will continue to support modest free operating cash flow (FOCF) generation, despite strong competitive pressure and slower-than-expected product demand. S&P could lower the rating if revenue declines significantly, or if competitive pressures cause a substantial deterioration in EBITDA margins, leading to FOCF generation sustained at below 2% of total adjusted debt level or covenant cushion of less than 10%. S&P would consider an upgrade over the intermediate term if product transition takes hold such that consistent revenue growth and consistent profitability leads to debt-to-EBITDA sustained at or below the 5x area. MONTANA ELECTRIC: Cash Collateral Use Further Extended ------------------------------------------------------ Judge Ralph B. Kirscher of the U.S. Bankruptcy Court for the District of Montana approved stipulation allowing Southern Montana Electric Generation and Transmission Cooperative, Inc., to further use the Cash Collateral in accordance to a Supplemental Budget. About Southern Montana Electric Based in Billings, Montana, Southern Montana Electric Generation and Transmission Cooperative, Inc., was formed to serve five other electric cooperatives. The city of Great Falls later joined as the sixth member. Including the city, the co-op serves a population of 122,000. In addition to Great Falls, the service area includes suburbs of Billings, Montana. Southern Montana filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. Timothy Gregori signed the petition as general manager. Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in Billings, Montana, serves as the Debtor's counsel. After filing for reorganization in October, the co-op agreed to a request for appointment of a Chapter 11 trustee. Lee A. Freeman was appointed as the Chapter 11 trustee in December 2011. He is represented by Joseph V. Womack, Esq., at Waller & Womack, and John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M. Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett, P.C. MONTANA ELECTRIC: Trustee Taps Eide Bailly as Accountants --------------------------------------------------------- Lee A. Freeman, the Chapter 11 Trustee for Southern Montana Electric Generation and Transmission Cooperative, Inc., sought and obtained authority from the U.S. Bankruptcy Court for the District of Montana to employ Eide Bailly as audit and tax accountants. The following Eide Bailly professionals will be paid in accordance with the firm's customary hourly rates: Name Title Hourly Rate ---- ----- ----------- Jeremy Bendewald Principal $275 Jason Olson Senior Manager $220 Liz Hanson Senior Associate $190 Alex Schroeder Associate $160 About Southern Montana Electric Based in Billings, Montana, Southern Montana Electric Generation and Transmission Cooperative, Inc., was formed to serve five other electric cooperatives. The city of Great Falls later joined as the sixth member. Including the city, the co-op serves a population of 122,000. In addition to Great Falls, the service area includes suburbs of Billings, Montana. Southern Montana filed for Chapter 11 bankruptcy (Bankr. D. Mont. Case No. 11-62031) on Oct. 21, 2011. Southern Montana estimated assets of $100 million to $500 million and estimated debts of $100 million to $500 million. Timothy Gregori signed the petition as general manager. Malcolm H. Goodrich, Esq., at Goodrich Law Firm, P.C., in Billings, Montana, serves as the Debtor's counsel. After filing for reorganization in October, the co-op agreed to a request for appointment of a Chapter 11 trustee. Lee A. Freeman was appointed as the Chapter 11 trustee in December 2011. He is represented by Joseph V. Womack, Esq., at Waller & Womack, and John Cardinal Parks, Esq., Bart B. Burnett, Esq., Robert M. Horowitz, Esq., and Kevin S. Neiman, Esq., at Horowitz & Burnett, P.C. MOUNTAINEER GAS: Fitch Hikes Issuer Default Rating to 'BB+' ----------------------------------------------------------- Fitch Ratings has upgraded the Issuer Default Rating (IDR) of Mountaineer Gas Company to 'BB+' from 'BB' and senior unsecured debt to 'BBB-' from 'BB+'. The Rating Outlook is Stable. Approximately $90 million of long-term debt is affected by this rating action. The upgrade reflects the realization of substantial improvement in MGC's financial results driven by a relatively average 2012/2013 winter heating season. Fitch expects further progress in 2013 as MGC will benefit from a full year of higher rates that became effective Nov. 1, 2012 following the outcome of the 2011 General Rate Case (GRC). Fitch had expected MGC to realize this improvement last year, but the 2011/2012 winter heating season was one of the warmest on record, which impeded earnings. KEY RATING DRIVERS -- Substantially improved financial profile; -- Constructive outcome to the 2011 GRC; -- Adequate liquidity; -- Low risk, regulated utility; Strong First Quarter 2013 Earnings MGC reported substantially higher earnings in the 2013 first quarter as average weather conditions drove higher volumes of natural gas sales. EBITDA, driven principally by higher natural gas sales, grew over 50% to approximately $24 million from the prior year period. MGC typically earns approximately 70% of EBITDA in the March Quarter, providing the foundation for a strong performance in 2013. For the LTM period ended March 31, 2013, EBITDA to Interest improved to 4.3x from 2.6x in the like 2012 period, while Funds From Operations (FFO) to Interest improved to 4.9x from 3.6x over the same period. Fitch expects calendar year 2013 coverage metrics to widen slightly reflecting a full year of higher rates from the 2011 GRC which became effective Nov. 1, 2012. Leverage measures are strong. FFO to Debt is expected to remain above 25% and Debt to EBITDA is expected to remain relatively stable at 3.0x over the three year forecast period. All credit metrics compare favorably to peers and Fitch rating category guideline ratios. MGC may experience modest margin pressure in 2014 and 2015 as operating expenses increase. Routine expense items including pensions and property taxes, are not on riders. Still, Fitch expects EBITDA to Interest to remain above 4x over the three year forecast period. Constructive GRC Outcome The Public Service Commission of West Virginia (PSCWV) approved a $6.265 million rate increase effective Nov. 1, 2012 representing approximately 60% of MGC's revised revenue request. The new rates are based on an authorized return on equity of 9.9%. The revenue increase is collected through higher monthly customer charges providing modestly greater stability to earnings and cash flows which are modestly less dependent on sales volumes and seasonal consumption patterns. In April 2013, the PSCWV authorized an additional $522 thousand annual revenue increase. MGC's margins are largely volume based subjecting it to weather as well as customer conservation and efficiency. Also regulatory lag is a concern based on historic test years and the absence of riders or trackers for routine expense items. Adequate Liquidity MGC's seasonal gas supply needs, in recent years, were procured under an Asset Management Agreement with Sequent (a subsidiary of AGL Resources). Related financing and working capital requirements were minimized as MGC would only draw gas as needed. Going forward, MGC will manage its own gas inventories and supplies and working capital and short term borrowing needs will likely peak early in the 2013/2014 heating seasonal. MGC has ample capacity under its $70 million bank credit facility to manage its working capital needs through the peak heating season period. The facility matures in 2014. In 2012, MGC refinanced a $20 million debt maturity and the next debt maturity is in 2017. RATING SENSITIVITIES -- A Positive rating action is not likely over the next two years. Fitch would consider an upgrade based on earnings and cash flow stability if MGC's tariff structure permitted weather normalization or revenue decoupling. Future developments that may, individually or collectively, lead to negative rating action include: -- An increase in leverage or distributions to owners -- Deterioration in operating performance from unfavorable regulatory outcomes or inability to recover in a timely manner higher operating or capital expenditures. NAMCO LLC: Plan Offers to Pay Creditors in Installments ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Namco LLC filed a reorganization plan along with disclosure materials telling unsecured creditors with $30 million to $35 million in claims how they stand to recover 5 percent to 7 percent over three years after emergence from bankruptcy. According to the report, the plan sponsors will provide $3 million in working capital in return for the new equity. The plan sponsors to become the new equity holders are an affiliate of Garmark and a company affiliated with C. Mark Scott. The Plan provides for these terms: * Senior-secured lenders owed $9.3 million are to be paid in full, in cash, and thus can't vote on the plan. * Second-lien creditors, also owed $9.3 million, will be given a $6 million, three-year note bearing interest to be paid with more notes at 8 percent in the first year, followed by cash interest payments at 12 percent for the remainder of the term. The second-lien creditors will also have a $3.3 million deficiency to be treated as an unsecured claim. The second-lien recovery is pegged at 65 percent plus the value of the deficiency claim. * Unsecured creditors are to share $2 million, with $500,000 cash paid on emergence from Chapter 11. The remainder will be paid in equal installments on the first through third anniversaries of emergence. In addition, unsecured creditors will receive 5 percent of proceeds over $30 million if the company is sold within three years of emergence. * Existing ownership by Garmark Partners II LLC and J.H. Whitney & Co. will be extinguished. The report notes that emergence from Chapter 11 reorganization also depends on a exit loan in an amount not yet specified from a lender not yet identified publicly. The company scheduled a June 24 hearing for approval of the disclosure statement and projects emerging from bankruptcy in July. About Namco Manchester, Connecticut-based Namco, LLC, is a 37-store retailer of swimming pools and accessories owned 50-50 by Garmark Partners II LLC and J.H. Whitney & Co. It filed a petition for Chapter 11 protection (Bankr. D. Del. Case No. 13-10610) on March 24, 2013, in Wilmington. Judge Peter J. Walsh presides over the case. Anthony M. Saccullo, Esq., at A.M. Saccullo Legal, LLC, and Thomas H. Kovach, Esq., at Thorp Reed & Armstrong, LLP, serve as the Debtor's counsel. Olshan Frome & Wolosky, LLP, is the Debtor' general bankruptcy counsel. Epiq Bankruptcy Solutions, LLC, is the Debtor's claims and noticing agent. Clear Thinking Group, LLC, serves as the Debtor's restructuring agent. In its Petition, the Debtor estimated its assets and debts at between $10 million to $50 million each. The Petition was signed by Lee Diercks, chief restructuring officer. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the Official Committee of Unsecured Creditors. The reorganization of the Debtor is being financed with a $16 million loan provided by Salus Capital Partners LLC, owed $9.3 million on a prepetition revolving credit. NEFF RENTAL: S&P Revises Outlook to Positive & Affirms 'B' CCR -------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its long- term rating outlook on Miami, Fla.-based Neff Rental LLC to positive from stable. At the same time, S&P affirmed its 'B' corporate credit rating on the company. S&P also raised its rating on the senior secured notes to 'B' from 'B-' and revised the recovery rating to '4' from '5' based on improving collateral and recovery prospects. The '4' recovery rating indicates S&P's expectation for average (30%-50%) recovery in the event of payment default. "The outlook revision reflects improvement in Neff's credit metrics, which exceed ratios comparable for the current rating," said Standard & Poor's credit analyst John Sico. Conditions in the equipment rental sector continue to improve, though construction spending remains somewhat sluggish, and S&P expects Neff's equipment rental operations to continue to outperform the broad industry sector. The ratings on Miami-based Neff reflect Standard & Poor's assessment of the company's "weak" business risk profile and its "aggressive" financial risk profile. The company is a regional provider in the highly competitive and fragmented construction equipment rental industry. Neff is owned by financial sponsor Wayzata Investment Partners, which bought the company out of bankruptcy and funded a return of capital with debt financing. S&P's view of "fair" management and governance reflects the private financial ownership. The outlook is positive. S&P could raise the ratings on Neff by one notch if the operating performance continues beyond its expectations because of the recovery in the construction spending cycle. S&P could revise the outlook to stable if Neff's operating performance weakens or its cash flow generation and earnings prospects falter. NNN 3500: U.S. Bank Balks at Bid for Aug. 27 Exclusivity Extension ------------------------------------------------------------------ NNN 3500 Maple 26 LLC asks the U.S. Bankruptcy Court to extend until Aug. 27, 2013, the deadline to file its Chapter 11 plan and disclosure statement. U.S. Bank National Association, as Trustee, successor-in-interest to Bank of America, N.A., as Trustee for the Registered Holders of Wachovia Bank Commercial Mortgage Trust, Commercial Mortgage Pass- Through Certificates, Series 2006-C23, by and through CWCapital Asset Management LLC, as Special Servicer, filed an opposition to the Debtor's Motion. U.S. Bank said the only asset of the bankruptcy case is the Debtor's 2.125% interest in its property. For this and other reasons, the Debtor cannot confirm a Chapter 11 Plan, the bank contends. Granting additional exclusivity is an unneeded exercise in futility that will benefit no one, according to the U.S. Bank, saying the Debtor has no equity in the Property, no firm and binding commitment for new equity and, for many reasons, has no ability to confirm any plan of reorganization. While the Debtor did file a plan of reorganization on February 28, 2013 -- the deadline imposed by the Bankruptcy Code -- it has not filed a disclosure statement and has not made any meaningful progress toward obtaining confirmation of a Plan. Rather, U.S. Bank continued, the Debtor (i) appears to seek an extension of exclusivity to further delay the Trust's ability to enforce its rights under the Loan Documents; and (ii) has failed to establish any "cause" warranting extension of its exclusive period and the request for an extension should be denied. NNN 3500 Maple 26, LLC, based in Costa Mesa, Calif., filed for Chapter 11 bankruptcy (Bankr. C.D. Cal. Case No. 12-23718) on Nov. 30, 2012. Judge Scott C. Clarkson presides over the case. In its schedules, the Debtor disclosed $45,563,241 in total assets and $46,658,593 in total liabilities. NORSE ENERGY: Land Owners Sue Over Force Majeure ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that 86 property owners filed suit in bankruptcy court alleging that oil and gas leases on their 6,300 acres terminated because Norse Energy Corp. USA failed to drill wells or pay royalties. In January 2011 the company sent land owners a letter declaring a so-called force majeure. Norse said that the New York governor's executive order in December 2010 putting a moratorium on hydraulic fracturing entitled the company to declare a force majeure, an outside event beyond the company's control that excuses the failure of performance of a contract. According to the report, the land owners want the bankruptcy court to declare that force majeure is inapplicable and that the leases all expired by their terms because Norse hasn't paid royalties and didn't drill wells. About Norse Energy Norse Energy Corp. USA filed a Chapter 11 bankruptcy petition (Bankr. W.D.N.Y. Case No. 12-13685) on Dec. 7, 2012. The Debtor is the U.S. subsidiary of Norse Energy Corp. ASA from Lysaker, Norway. The Debtor is the holder of oil and gas leases on 130,000 acres in central and western New York. The oil and gas exploration and production company said financial problems were the result of a moratorium on drilling in New York. The Debtor disclosed $12.6 million in assets and $36 million in liabilities in its schedules. The Debtor is represented by Janet G. Burhyte, Esq., at Gross, Shuman, Brizdle & Gilfillan, P.C., in Buffalo, New York. Norse has a $3.8 million loan financing bankruptcy. It requires proposing a reorganization plan or beginning to sell the assets by July. OVERLAND STORAGE: Business Combination with Tandberg Proposed ------------------------------------------------------------- Cyrus Capital Partners, L.P., submitted a non-binding written proposal to Overland Storage, Inc., for a combination between Overland Storage and Tandberg Data in which the Company would be the surviving entity. Under the proposal, the Company's shareholders would own 50 percent of the Company after the Combination and Tandberg's shareholders would own the remaining 50 percent. The proposed Combination is subject to a number of conditions, including, among other things, the satisfactory completion of due diligence and the negotiation and execution of definitive documents with representations, warranties, covenants and conditions typical and appropriate for transactions of this type. The Combination may result in the Company's Common Stock being eligible for termination of registration under Section 12 of the Act or delisting from the NASDAQ Capital Market. "[W]e believe that now is the time to effect a business combination of Overland and Tandberg," said Stephen C. Freidheim of Cyrus Capital Partners L.P. "Currently Overland is not free cash flow positive and the company is burning cash as it completes its business transition and strategy implementation. A deal with Tandberg will greatly improve both the size and scale of the business and will allow the combined entity, in our opinion, to generate significant free cash flow versus historical performance." About Overland Storage San Diego, Cal.-based Overland Storage, Inc. (Nasdaq: OVRL) -- http://www.overlandstorage.com/-- is a global provider of unified data management and data protection solutions designed to enable small and medium enterprises (SMEs), corporate departments and small and medium businesses (SMBs) to anticipate and respond to change. The Company incurred a net loss of $16.16 million for the fiscal year 2012, compared with a net loss of $14.49 million for the fiscal year 2011. For the nine months ended March 31, 2013, the Company incurred a net loss of $14.22 million on $35.95 million of net revenue, as compared with a net loss of $13.46 million on $44.33 million of net revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $38.40 million in total assets, $44.79 million in total liabilities and a $6.38 million total shareholders' deficit. Moss Adams LLP, in San Diego, California, issued a "going concern" qualification on the consolidated financial statements for the year ended June 30, 2012. The independent auditors noted that the Company's recurring losses and negative operating cash flows raise substantial doubt about the Company's ability to continue as a going concern. PACIFIC THOMAS: Ch.11 Trustee Taps California Capital as Broker --------------------------------------------------------------- Kyle Everett, the appointed chapter 11 Trustee in the bankruptcy case of Pacific Thomas Corporation, asks the U.S. Bankruptcy Court for permission to employ Brian Collins of California Capital & Investment Group, Inc., as the Trustee's real estate broker for the sale of the Debtor's property. Brian Collins attests that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. California Capital will be paid 1.5% of the purchase price at the time of sale, subject to Court approval of the sale and up to 1% to any broker who procured the buyer. This exclusive authorization and right for California Capital to sell the Premises, subject to approval of the Court, will be for the period May 15, 2013 to November 15, 2013. The firm may be reached at: Brian Collins CALIFORNIA CAPITAL & INVESTMENT GROUP 314 Frank Ogawa Plaza Ste. 340 Oakland, CA 94612 Tel: (510) 463-6356 E-mail: bcollins@californiagroup.com About Pacific Thomas Corp. Walnut Creek, California-based Pacific Thomas Corporation filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 12-46534) in Oakland on Aug. 6, 2012, estimating in excess of $10 million in assets and liabilities. The Debtor is related to Pacific Thomas Capital, which specializes in real estate services, focusing on the investment, ownership and development of commercial real estate properties, according to http://www.pacificthomas.com/ Real estate activities has spanned throughout the Hawaiian Islands as well as U.S. West Coast locations in California, Nevada, Arizona and Utah. Hawaii based activities are managed under the name Thomas Capital Investments. Bankruptcy Judge M. Elaine Hammond presides over the case. Anne- Leith Matlock, Esq., at Matlock Law Group, P.C., represents the Debtor as counsel. The petition was signed by Jill V. Worsley, COO and secretary. In its schedules, the Debtor disclosed $19,960,679 in assets and $16,482,475 in liabilities as of the petition date. PACIFIC THOMAS: Ch.11 Trustee Hires DSI as Consultant ----------------------------------------------------- Kyle Everett, the chapter 11 Trustee in the bankruptcy case of Pacific Thomas Corporation, asks the U.S. Bankruptcy Court for permission to employ Development Specialists, Inc., to provide consultant and management services during the pendency of this case. DSI will not separately charge the Debtor's estate for the fees and expenses that it would ordinarily be entitled to receive as a retained professional. Instead, DSI's fees will be included as part of and within the limits of the general statutory fee that the Chapter 11 Trustee will seek pursuant to Section 326(a) of the Bankruptcy Code. Mr. Everett -- keverett@dsi.biz -- has been with DSI for over 10 years and is currently the vice-president and general manager of the San Francisco office. While at DSI he has been involved in a number of significant engagements both in and out of court and has been a financial consultant in insolvency matters for over 25 years. Mr. Everett attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Pacific Thomas Corp. Walnut Creek, California-based Pacific Thomas Corporation filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 12-46534) in Oakland on Aug. 6, 2012, estimating in excess of $10 million in assets and liabilities. The Debtor is related to Pacific Thomas Capital, which specializes in real estate services, focusing on the investment, ownership and development of commercial real estate properties, according to http://www.pacificthomas.com/ Real estate activities has spanned throughout the Hawaiian Islands as well as U.S. West Coast locations in California, Nevada, Arizona and Utah. Hawaii based activities are managed under the name Thomas Capital Investments. Bankruptcy Judge M. Elaine Hammond presides over the case. Anne- Leith Matlock, Esq., at Matlock Law Group, P.C., represents the Debtor. The petition was signed by Jill V. Worsley, COO and secretary. In its schedules, the Debtor disclosed $19,960,679 in assets and $16,482,475 in liabilities as of the petition date. PF CHANG: S&P Revises Outlook to Negative & Affirms 'B' CCR ----------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on Scottsdale, Ariz.-based P.F. Chang's China Bistro Inc. to negative from stable. At the same time, S&P affirmed all of its ratings on the company, including its 'B' corporate credit rating, 'B+' ratings on the revolver and term loan, and 'CCC+' rating on the senior notes. The outlook revision reflects lackluster performance in the past several quarters, when credit protection metrics declined below S&P's expectations due to a continued declines in customer traffic, and higher-than-expected transaction related expenses tied to the Centerbridge leveraged buyout (LBO). It also incorporates S&P's view that improvement in profits will be limited over the next 12 months due to continued negative comparable-restaurant sales. "The speculative-grade rating on P.F. Chang's reflects its "highly leveraged" financial risk profile as a result of the Centerbridge LBO," said credit analyst Diya Iyer. "It also incorporates our "vulnerable" assessment of the company's business risk profile, reflecting its singular focus on Asian cuisine and concentration in California, Arizona, Florida, and Texas." The negative outlook reflects S&P's expectation that credit measures remain weak but continued operational erosion coupled with limited debt reduction will result in slightly better credit measures in the coming year. S&P could lower the rating if negative same-restaurant sales trends persist and the company does not achieve the cost reduction targets in food and labor costs in the coming year. This would result in gross margin falling 50 bps or sales declining in the high-single-digit range, resulting in an EBITDA decline in fiscal 2013. It could also occur if SG&A grows at more than double the low-single-digit rate S&P is forecasting. In this scenario, interest coverage would approach the low 1.0x range and liquidity would erode due to a decline in free cash flow generation. S&P could revise the outlook to stable if the company improves gross margin 100 bps above its expectations or sales increase 10% in the coming year, resulting in a 23% increase in EBITDA and leverage below 6.0x. However, given P.F. Chang's expected credit measures and restaurant expansion plans, and S&P's industry outlook, it is not expecting to revise its outlook over the next one year. PICACHO HILLS: Receiver Directed to Complete Liquidation Sale ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Mexico denied the motion to dismiss the Chapter 11 case of Picacho Hills Utility Company, Inc. The Court also ordered that the case will be suspended until after Robert Martin, in his capacity as a state court receiver of the Debtor's assets, has sold the receivership assets in accordance with a court order entered in the action pending in the Third Judicial District Court, Dona Ana County, New Mexico. The case will be reactivated automatically upon the closing of a receiver asset sale. After the receiver's sale has been completed and the state court judge in the receiver action has ruled on any fee applications, the net proceeds would be tendered to the Court registry, unless alternative arrangement are made that are acceptable to Debtor's major creditors or approved by the Court. As reported in the Troubled Company Reporter on May 6, 2013, Bankruptcy Judge David T. Thuma finds that the receiver should be excused from turnover. About Picacho Hills Utility Picacho Hills Utility Company, Inc., filed a Chapter 11 petition (Bankr. D. N.M. Case No. 13-10742) on March 7, 2013. The Debtor is represented by William F. Davis & Associates, P.C. The Debtor estimated assets of at least $10 million and debts of at least $1 million. PHUC is a public utility as defined by the New Mexico Public Utility Act, Sec. 62-3-3.G. and provides water and sewer service to approximately one thousand residences in Dona Ana County, New Mexico. PHUC is 100% owned by Stephen C. Blanco, who is its president. PLC SYSTEMS: Incurs $7.8 Million Net Loss in First Quarter ---------------------------------------------------------- PLC Systems Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $7.80 million on $348,000 of revenues for the three months ended March 31, 2013, as compared with a net loss of $6.77 million on $20,000 of revenues for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $3.56 million in total assets, $22.87 million in total liabilities and a $19.30 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/zhwyYE About PLC Systems Milford, Massachusetts-based PLC Systems Inc. is a medical device company specializing in innovative technologies for the cardiac and vascular markets. The Company's key strategic growth initiative is its newest marketable product, RenalGuard(R). RenalGuard is designed to reduce the potentially toxic effects that contrast media can have on the kidneys when it is administered to patients during certain medical imaging procedures. PLC Systems disclosed a net loss of $8.38 million on $1.08 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $5.75 million on $671,000 of revenue in 2011. McGladrey LLP, in Boston, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has sustained recurring net losses and negative cash flows from continuing operations, which raises substantial doubt about its ability to continue as a going concern. PWK TIMBERLAND: Files Schedules of Assets and Liabilities --------------------------------------------------------- PWK Timberland, LLC filed with the U.S. Bankruptcy Court for the Western District of Louisiana its schedules of assets and liabilities, disclosing: Name of Schedule Assets Liabilities ---------------- ----------- ----------- A. Real Property $14,451,298 B. Personal Property $587,150 C. Property Claimed as Exempt D. Creditors Holding Secured Claims $0 E. Creditors Holding Unsecured Priority Claims $0 F. Creditors Holding Unsecured Non-priority Claims $1,792,957 ----------- ----------- TOTAL $15,038,448 $1,792,957 A copy of the schedules is available for free at http://bankrupt.com/misc/PWK_TIMBERLAND_sal.pdf In a separate filing, the U.S. Trustee for Region 5 rescheduled until May 16, 2013, the meeting of creditors. About PWK Timberland Lake Charles, Louisiana-based PWK Timberland LLC sought Chapter 11 protection (Bankr. W.D. La. Case No. 13-20242) on March 22, 2013. Gerald J. Casey, Esq., serves as counsel to the Debtor. The Debtor estimated assets of at least $10 million and liabilities of up to $10 million. The Debtor's Chapter 11 plan is due Sept. 18, 2013. RAM OF EASTERN N.C.: No Creditors Committee Formed -------------------------------------------------- The Bankruptcy Administrator for the Eastern District of North Carolina notified the Court that it was unable to appoint an official committee of unsecured creditors in the Chapter 11 case of Ram of Eastern North Carolina, LLC. The Bankruptcy Administrator explained that despite efforts to contact unsecured creditors, sufficient indications of willingness to serve on a committee were not received from persons eligible to serve on such a committee. About RAM of Eastern North Carolina RAM of Eastern North Carolina, LLC, formerly Grantham Crossing, LLC, filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-01125) in Wilson, North Carolina, on Feb. 21, 2013. The Debtor, which owns commercial and residential rental properties in Craven and Carteret Counties, North Carolina, disclosed $11.7 million in total assets and $7.70 million in total liabilities in its schedules. George M. Oliver, Esq., at Oliver Friesen Cheek, PLLC, serves as bankruptcy counsel to the Debtor. RAM OF EASTERN N.C.: Oliver Friesen Approved as Bankruptcy Counsel ------------------------------------------------------------------ The Hon. J. Rich Leonard of the U.S. Bankruptcy Court for the Eastern District of North Carolina authorized Ram of Eastern North Carolina, LLC, to employ George Mason Oliver and Oliver Friesen Cheek, PLLC, as counsel. Mr. Oliver and the firm will advise and represent the Debtor throughout the Chapter 11 proceeding. The Debtor was charged a retainer of $32,500. Of the amount the firm received $7,500 on Jan. 3, 2012, and the balance of $25,000 on Feb. 12, 2013, from the Debtor. These funds were deposited into the firm's trust account to secure future fees and expenses incurred by the firm on behalf of the Debtor. From these trust funds, $18,158 was paid to the firm for fees and expenses incurred prepetition for the period of Dec. 9, 2011, to Feb. 21, 2013, leaving a balance in the trust account for anticipated fees expected to arise during the course of the Chapter 11 bankruptcy. To the best of the Debtor's knowledge, the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About RAM of Eastern North Carolina RAM of Eastern North Carolina, LLC, formerly Grantham Crossing, LLC, filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-01125) in Wilson, North Carolina, on Feb. 21, 2013. The Debtor, which owns commercial and residential rental properties in Craven and Carteret Counties, North Carolina, disclosed $11.7 million in total assets and $7.70 million in total liabilities in its schedules. George M. Oliver, Esq., at Oliver Friesen Cheek, PLLC, serves as bankruptcy counsel to the Debtor. RAM OF EASTERN N.C.: Pittard Perry OK'd for Accounting Services --------------------------------------------------------------- The Hon. J. Rich Leonard of the U.S. Bankruptcy Court for the Eastern District of North Carolina authorized Ram of Eastern North Carolina, LLC to employ Pittard Perry & Crone, Inc., as accountant. As reported in the Troubled Company Reporter on April 22, 2013, the firm will be retained to prepare the Debtor's tax returns and providing general tax consulting and advice. The Debtor has chosen the firm because it is experienced in these matters and is well qualified to perform the work required in the case. The firm understands that compensation can only be paid to the Firm after notice to creditors and approval by the Court pursuant to the Bankruptcy Administrator's guidelines. Services will be rendered at the hourly rate of $220. The firm attests that it and all its members are "disinterested" as the term is defined in Section 101 of the Bankruptcy Code. About RAM of Eastern North Carolina RAM of Eastern North Carolina, LLC, formerly Grantham Crossing, LLC, filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 13-01125) in Wilson, North Carolina, on Feb. 21, 2013. The Debtor, which owns commercial and residential rental properties in Craven and Carteret Counties, North Carolina, disclosed $11.7 million in total assets and $7.70 million in total liabilities in its schedules. George M. Oliver, Esq., at Oliver Friesen Cheek, PLLC, serves as bankruptcy counsel to the Debtor. READER'S DIGEST: Negotiates New Lease With Landlord --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Reader's Digest Association negotiated a new lease with the landlord at the headquarters in White Plains, New York, to reduce rental expense by $3.3 million a year. The report recounts that at the conclusion of Reader's Digest's prior bankruptcy reorganization, the company leased three floors at 44 South Broadway in White Plains and gave the landlord a $4.8 million letter of credit as security. According to the report, the revised lease, coming to bankruptcy court for approval on May 31, has Reader's Digest giving up the two higher floors. The landlord will allow six months free rent and provide Reader's Digest a $500,000 credit for refurbishing the remaining floor. The landlord will draw down the letter of credit while being given a $5.7 million unsecured claim for the remaining damages resulting from termination of the original lease. About Reader's Digest Reader's Digest is a global media and direct marketing company that educates, entertains and connects consumers around the world with products and services from trusted brands. For more than 90 years, the flagship brand and the world's most read magazine, Reader's Digest, has simplified and enriched consumers' lives by discovering and expertly selecting the most interesting ideas, stories, experiences and products in health, home, family, food, finance and humor. RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No. 13-22233) filed for Chapter 11 protection on Feb. 17, 2013, with an agreement with major stakeholders for a pre-negotiated chapter 11 restructuring. Under the plan, the Debtor will issue the new stock to holders of senior secured notes. RDA Holding Co. listed total assets of $1,118,400,000 and total liabilities of $1,184,500,000 as of the Petition Date. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Evercore Group LLC is the investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Reader's Digest, together with its 47 affiliates, first sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24, 2009 and exited bankruptcy Feb. 19, 2010. Under the Plan, holders of allowed general unsecured claims in such sub-class will receive their pro rata share of the GUC distribution; holders of allowed general unsecured claims of Reader's Digest will also receive their pro rata share of the RDA GUC distribution and the senior noteholder deficiency claims in such sub-class shall be deemed waived solely for purposes of participating in the GUC distribution and the RDA GUC distribution. The Official Committee of Unsecured Creditors is represented by Otterbourg, Steindler, Houston & Rosen, P.C. The Committee tapped Alvarez & Marsal North America, LLC, as financial advisors. Reader's Digest comes to bankruptcy court in White Plains on June 28 for a confirmation hearing on approval of the reorganization plan modified to win support from the official creditors' committee. The $500,000 pot for unsecured creditors was increased by $3.875 million. The changes raised the unsecured creditors' recovery from 0.1 percent to 3 percent. REVEL AC: Completes Financial Restructuring; Exits Chapter 11 ------------------------------------------------------------- Revel AC Inc. on May 21 disclosed that it has successfully completed its financial restructuring and emerged from Chapter 11 of the United States Bankruptcy Code. Through the restructuring plan, which has been approved by both the U.S. Bankruptcy Court for the District of New Jersey (Camden) and the New Jersey Casino Control Commission, Revel has reduced its outstanding debt by approximately $1.2 billion, or 82%, and its annual interest expense on a cash basis by $98 million, or 96%. With the completion of the restructuring on May 21, Revel closed on its exit financing, which provides a $75 million revolver to fund working capital and a $275 million term loan to pay expenses related to the restructuring and repay the outstanding borrowings under the debtor-in-possession financing. Jeffrey Hartmann, Revel's Interim Chief Executive Officer said, "We view this as a significant milestone for Revel and now turn our undivided attention towards growing our casino revenue base and are singularly focused on attracting guests to the property through an expanding range of amenities and exciting new programming. We have already made progress on this front with the recent opening of Pearl Lounge, our players' lounge and high-limit slots area, and Relish, a 24-hour, three-meal-per-day restaurant, and our guests can look forward to additional positive developments in the coming months. Greater casino floor appeal, new gaming rewards, seven-day-a-week programming, and the upcoming openings of a Noodle Bar and HQ Beach Club will all add to our unique offering and further solidify our position as the premier casino resort in the Northeast." "This is truly a monumental day for Revel. Thanks to the support of our lenders and the dedication of our fantastic employees, we have completed a transformational financial restructuring not only successfully, but in time for the important summer season," commented Dennis Stogsdill, Revel's Chief Restructuring Officer. "With a right-sized balance sheet, reduced debt load, and improved cash flow, we have emerged from this process stronger and better positioned for success." Revel's legal advisor in connection with the restructuring was Kirkland & Ellis LLP. Alvarez & Marsal served as its restructuring advisor and Moelis & Company served as its investment banker. REVSTONE INDUSTRIES: Exclusive Plan Deadline Extended to July 31 ---------------------------------------------------------------- At the behest of Revstone Industries, LLC, et al., the U.S. Bankruptcy Court for the District of Delaware extended the period during which the Debtors have the exclusive right to file a Chapter 11 plan and solicit acceptances of that plan. The Debtors sought to extend the Exclusive Filing Periods from the current April 2, 2013 deadline for Revstone and Spara, and the current May 7, 2013 deadline for Greenwood and US Tool, through and including July 31, 2013, for all of the jointly administered Debtors. The Debtors also sought to extend the Exclusive Solicitation Period from the current June 1, 2013 deadline for Revstone and Spara, and the current July 8, 2013 deadline in Greenwood and US Tool, through and including Sept. 30, 2013 for all of the jointly administered Debtors. The Debtors said that they have made significant progress in the Chapter 11 cases; however, significant tasks lie ahead and certain contingencies remain, warranting an extension of the Exclusive Periods. The Debtors are developing a comprehensive process for the sale and restructuring of the assets of the Debtors and the Debtors' interest in their subsidiary companies. In the near term, the Debtors said, they will continue to devote substantial time to developing and completing the process for sale and restructuring of their assets, and intend to move expeditiously to prepare and file a plan in the Chapter 11 cases. Since the commencement of the Chapter 11 cases, the Debtors have, among other things: a. appointed two independent managers to the boards of each of the Debtors and created an independent restructuring committee consisting the independent managers to address all decisions regarding the Debtors' Chapter 11 cases and the restructuring efforts of Revstone, Spara, and their subsidiaries, including asset sales; b. investigated several sources of debtor in possession financing for these Chapter 11 cases and conducted discussions with potential DIP financiers; c. developed alternatives for the auction of assets of US Tool, negotiated the retention of an auctioneer for the assets, litigated Boston Finance Group's relief from stay motion seeking to foreclose on US Tool assets and cooperated with BFG to support the auction of the US Tool assets; d. engaged in settlement discussions and prepared a strategy for response to the Committee of Unsecured Creditor's pending motion to appoint a Chapter 11 trustee in these cases; and e. developed detailed financial projections and scenarios for the Debtors' business operations, and conducted weekly calls with Committee advisers on budget. Meanwhile, a meeting of creditors under 11 U.S.C. Sec. 341(a) was set for May 15. About Revstone Industries, Greenwood Forgings, & US Tool & Engineering Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. A motion for joint administration of the cases has been filed. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. ROTECH HEALTHCARE: To Continue Sale Process for Business -------------------------------------------------------- Rotech Healthcare Inc. on May 21 disclosed that it informed the U.S. Bankruptcy Court that simultaneous with its pursuit of confirmation of its joint plan of reorganization by August, the Company will continue its prepetition marketing efforts to identify a buyer for its business. "Although we have already pursued a sale and other strategic options for a number of years, in light of the formation of the equity committee and the possibility that our shareholders will lose the ten cents per share that was negotiated prepetition, we want to take the extra step of continuing our sale process in order to ensure that we have exhausted every possible source of value for our shareholders," said Rotech CEO Steven Alsene. "Regardless of which path we follow, we remain steadfast in our commitment to pay trade creditors and vendors in full upon emergence from Chapter 11." Any party interested in learning more about Rotech's sale process should contact Barclays. During last week's proceedings, over the objections of the equity committee, the Bankruptcy Court also gave final approval of Rotech's $30 million debtor-in-possession financing facility which helps to ensure that the Company will have sufficient liquidity to meet its vendor obligations during its Chapter 11 cases. Rotech filed for Chapter 11 on April 8, 2013 and also filed a pre- arranged plan of reorganization that converts more than $300 million of the Company's 10.5% Secured Second Lien Notes into common equity of the reorganized Company, thereby eliminating this tranche of secured debt and its related interest expense. Rotech intends to file an amended plan and will seek approval of a disclosure statement on June 13th. Wachtell Lipton Rosen & Katz serves as legal advisor to each of the Consenting Noteholders holding Second Lien Secured Notes. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP is the special healthcare regulatory counsel; Barclays Capital Inc. is the financial advisor; Alix Partners, LLP is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders are represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. A hearing is scheduled for May 16 on approval of disclosure materials explaining the plan. The plan is supported by holders of a majority of the first- and second-lien secured notes. The $290 million in 10.5 percent second-lien notes are to be exchanged for the new equity. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. SCHOOL SPECIALTY: Moody's Affirms 'B3' CFR; Outlook Negative ------------------------------------------------------------ Moody's Investors Service affirmed the B3 Corporate Family Rating and B3-PD Probability of Default Rating to School Specialty, Inc. Concurrently, Moody's affirmed the Caa1 rating on the company's proposed $145 million senior secured term loan which has been upsized from $125 million. Incremental proceeds from the upsized term loan are expected to fund a higher cash payment to the company's existing debtor-in-possession ("DIP") facilities. The outlook has been revised to negative. The following ratings have been affirmed: - Corporate Family Rating of B3 - Probability of Default Rating of B3-PD - $145 (upsized from $125) million senior secured term loan due 2013 of Caa1 (LGD 4, 63%) from (LGD 4, 64%) The rating outlook has been revised to negative. Ratings Rationale: The revised outlook reflects higher leverage of roughly 5.2 times (including Moody's standard adjustments) as a result of the incremental term loan without meaningful improvement to liquidity. In Moody's view, the incremental proceeds from the term learn used to fund a higher cash payment to DIP lenders suggests that valuation expectations to monetize in a timely manner may have moderated. The B3 CFR reflects School Specialty's declining revenue, significant seasonality, and weak profitability due to its heavy reliance on budget-constrained state and local government spending which Moody's expects will remain under pressure over the next 12 to 18 months. School Specialty's extensive national distribution, diverse product offering are positive rating factors. Moody's expects that School Specialty will maintain an adequate liquidity profile during the next 12 to 18 months supported by modest cash flow from operations ("CFO"), the expectation that working capital swings will be managed prudently, sufficient revolver availability and lack of near term debt maturities. Further, Moody's believes covenant headroom to the proposed covenants in the term loan agreement will be sufficient. The Caa1 rating on the $145 million senior secured term loan reflects its first priority lien on all property and assets (excluding current assets) and a second priority lien on all current assets securing School Specialty's $175 million ABL revolver. Further, it benefits from upstream guarantees of the borrower's present and future direct and indirect subsidiaries. To be upgraded, School Specialty will need to generate revenue growth and improve free cash flow-to-net debt to low single digits and restore its profitability such that EBIT margins are sustained about 5%. School Specialty could be downgraded if further execution of its turnaround plan is not successful or the loss of a key contract resulting in further deterioration in revenue and profitability such that EBIT margins fail to be sustained around 2% and debt-to- EBITDA exceeding 5.0 times by the end of FY2015. School Specialty, Inc., based in Greenville, WI, is a national distributor of K-12 educational products and solutions that address a broad spectrum of educational needs. The company offers products through two operating groups: Accelerated Learning and Educational Resources. Total revenue for the twelve month period ending January 26, 2013 was roughly $690 million. The principal methodology used in this rating was the Global Packaged Goods published in December 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. SECUREALERT INC: Incurs $1.5 Million Net Loss in March 31 Qtr. -------------------------------------------------------------- SecureAlert, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.49 million on $4.80 million of total revenues for the three months ended March 31, 2013, as compared with a net loss of $1.96 million on $3.16 million of total revenues for the same period during the prior year. For the six months ended March 31, 2013, the Company incurred a net loss of $2.06 million on $10.39 million of total revenues, as compared with a net loss of $3.58 million on $6.90 million of total revenues for the same peirod a year ago. The Company's balance sheet at March 31, 2013, showed $29.72 million in total assets, $8.17 million in total liabilities and $21.54 million in total equity. A copy of the Form 10-Q is available for free at: http://is.gd/6TBm3E Sandy, Utah-based SecureAlert, Inc., markets and deploys offender management programs, combining patented GPS tracking technologies, fulltime 24/7/365 intervention-based monitoring capabilities and case management services. As reported in the TCR on Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, expressed substantial doubt about SecureAlert's ability to continue as a going concern, citing losses, negative cash flows from operating activities, notes payable in default and accumulated deficit. SELWYN RESOURCES: Project Sale Gets OK; Prepares for Liquidation ---------------------------------------------------------------- Selwyn Resources Ltd. on May 21 disclosed that, in connection with the sale of the Company's remaining interest in the Selwyn Project to Chihong Canada Mining Ltd., Chihong Canada has advised the Company that the sole outstanding Chinese governmental approval, being that of the Foreign Exchange Administration of Yunnan Province, has been obtained. With the receipt of the SAFE Approval, all conditions to closing of the Transaction, other than delivery of customary closing documentation and payment of the purchase price, have been satisfied. Accordingly, the Company announces that the Transaction is expected to close on June 3, 2013. The Company also disclosed that it has retained PricewaterhouseCoopers Inc. to act as the liquidator of the Company if shareholders approve a special resolution providing for the voluntary liquidation of the Company. Shareholders will be asked to vote on this resolution at the annual and special meeting of shareholders to be held on June 17, 2013. The information circular for the Meeting is expected to be mailed to shareholders and posted on SEDAR on or about Wednesday, May 22, 2013. Shareholders should expect to receive the information circular and proxy on or around May 30, 2013. It is important that all shareholders carefully read the information circular and follow the steps outlined in the proxy to vote your shares. If a shareholder has any questions or requires assistance in voting, please contact Laurel Hill Advisory Group 1-877-452-7184. In advance of the Meeting, the Company will be working with PricewaterhouseCoopers Inc. to design a liquidation plan that will consider not only the sale of the ScoZinc Mine and related assets but also the sale of Selwyn as a going concern (subject to a further shareholder approval). If the proposal to liquidate the Company is approved, the current board and management of the Company will cease to exercise any powers in respect of the Company and PricewaterhouseCoopers Inc., as liquidator, will oversee a process of the orderly wind-up of the Company. In undertaking this process, the liquidator will look to maximize the distribution available for payment to the shareholders after the proper settling all of the Company's liabilities. If shareholders authorize the liquidation of the Company, and assuming the Company cannot be sold as a whole, the Company expects that the aggregate distribution that will be made to shareholders will be between approximately $0.096 to $0.125 in cash per common share. The Company estimates that after closing the Transaction it will have cash available for distribution to shareholders of up to approximately $0.05 per common share which, if paid, would lower a future payout to between $0.046 and $0.075 per share. It is expected that the liquidation process will take 12 - 18 months. However, no assurance can be given as to the actual amount of or, as this is at the discretion of the liquidator, the timing of distributions to shareholders. In determining its estimate of the cash available for a distribution to shareholders, the Company has taken into account working capital requirements, payments due to the liquidator, employee severance obligations, payments due after closing relating to the sale of the Selwyn Project and the repayment of the debt facility with Waterton Global Value, L.P. The low end of the distribution range has been estimated on the assumption that a buyer cannot be found for the ScoZinc Mine and the site is decommissioned instead of being sold. The high end of the distribution range has been estimated on the assumption that the ScoZinc Mine can be sold as a going concern at its book value. For further information and details with respect to the liquidation proposal, including the estimated range of distributions to shareholders, reference should be made to the Circular which will be filed on SEDAR under the Company's profile at http://www.sedar.com Dr. Harlan Meade, the Chief Executive Officer and President of the Company, said: "In proposing the sale of our interest in the Selwyn Project, the board of directors of the Company was of the view that the best strategy for the Company was to focus on the development of the ScoZinc Mine rather than to continue to try and finance Selwyn's share of project costs and risk default of its obligations under the Selwyn Joint Venture Agreement. But it is clear that a significant group of shareholders prefers that an alternative path be considered that would result in the distribution of the proceeds of the sale to shareholders and the disposition of the ScoZinc Mine. Accordingly, the board of directors of Selwyn determined that the most equitable option would be to present the liquidation proposal to all of the shareholders of the Company and, if approved, that there be a fair and orderly wind-up of the Company." Headquartered in Vancouver, British Columbia, Selwyn Resources Ltd. -- http://www.selwynresources.com/-- is a metal exploration and development company. The Company operates in two projects Selwyn Project and ScoZinc project. SILLER PARTNERSHIP: Texas Appeals Court Upholds Order in LPP Suit ----------------------------------------------------------------- The Court of Appeals of Texas, Fourth District, affirmed a trial court judgment entered in favor of defendant LLP Mortgage, Ltd. in a wrongful foreclosure suit brought by the Sillers. In 1967, four Siller brothers -- Abel, Mario, Santiago and Jose, Jr. -- purchase 520 acres of land in La Salle County, formed a partnership and used the property for farming and grazing land. In the late 1970s, three of the brothers sought a $234,000 loan from the Small Business Administration. They signed a promisory note and pledged their interest in the property as loan collateral. Jose left the partnership in 1983. By the 1990s, the partnership encountered more difficulties making payments on the SBA loan. In July 1999, to prevent foreclosure on the property, the partnership filed a Chapter 11 bankruptcy petition. The Debtor listed SBA as having a $108,500 claim. In December 1999, a plan of reorganization was confirmed in the Debtor's case. SBA assigned the Promissory Note and Deed of Trust to LLP Mortgage following the partnership's bankruptcy. LPP sought the foreclosure of the La Salle Property when the Sillers failed to make the first annual payment required by the confirmed Plan. In September 2001, the county attorney for La Salle County handled the foreclosure sale and sold the property to LPP Mortgage for $125,237. The Sillers then sued LPP Mortgage for wrongful foreclosure. After a jury verdict in favor of the Sillers, the trial court rendered a judgment notwithstanding the verdict in favor of LPP Mortgage. On appeal, the Sillers argue that the trial court erred in (1) applying the doctrine of judicial estoppel, (2) applying the doctrine of res judicata, and (3) finding that there was no evidence to support the jury's finding that the notice of foreclosure sale had not been posted on the courthouse bulletin board for 21 days prior to the foreclosure sale. On review, the Appeals Court finds find no abuse of discretion by the trial court in applying the doctrine of judicial estoppel. "After filing for bankruptcy and successfully preventing the foreclosure of the property, the Sillers are now taking the opposite position in this lawsuit that the property was not owned by the partnership. Further, there is evidence that the federal bankruptcy court accepted the Sillers' prior position that the property was owned by the partnership." Having found no abuse of discretion by the trial court in applying the doctrine of judicial estoppel, the Appeals Court finds no need to determine whether the trial court erred in applying the doctrine of res judicata. The Appeals Court adds that the evidence is undisputed that the notice of foreclosure sale was posted on the bulletin board of the La Salle County Courthouse for the required number of days. It was posted on August 9, 2001 and removed after the foreclosure sale on September 4, 2001, more than 21 days after it was posted. The appeal is Abel M. SILLER, Enriqueta Siller, Mario M. Siller, Angelina Siller, Santiago Siller, and Virginia Siller, Appellants/Cross-Appellees, v. LPP MORTGAGE, LTD, Appellee/Cross- Appellant, No. 04-11-00496-CV (Tex. App.) A copy of the appeals court's April 10, 2013 Memorandum Opinion is available at http://is.gd/aBEr37from Leagle.com. SPRINGLEAF FINANCE: Fitch to Rate New $250MM Unsecured Notes 'CCC' ------------------------------------------------------------------ Fitch Ratings expects to rate Springleaf Finance Corporation's proposed seven-year, $250 million senior unsecured notes due 2020 'CCC/RR4'. Proceeds from the issuance are expected to be used for general corporate purposes. KEY RATING DRIVERS The expected rating on the proposed unsecured notes will be equalized with the ratings assigned to SLFC's Issuer Default Rating (IDR) and existing unsecured debt, as the new notes will rank equally in right of payment with all of the company's existing and future senior unsubordinated notes. The expected Recovery Ratings (RRs) assigned to the proposed issuance reflect average recovery prospects in a distressed scenario based upon collateral coverage for the senior unsecured notes. The senior unsecured note issuance is not expected to materially impact SLFC's leverage, as measured by total debt to shareholders' equity. As of March 31, 2013, leverage stood at 9.09x and is expected to decrease to 8.95x on a pro forma basis. Fitch's pro forma calculation of leverage takes into account SLFC's $782.5 million securitization transaction in April 2013, which resulted in a $714.9 million mandatory repayment of its secured term loan and a $500 million prepayment of its secured term loan in May 2013 using unrestricted cash, as well as this proposed $250 million issuance. Fitch expects leverage will remain elevated in the immediate term until SLFC returns to profitability, as current operating losses are expected to continue to hamper its equity base. RATING SENSITIVITIES - IDRS, SENIOR UNSECURED NOTES Fitch believes that positive ratings momentum could be driven by the stabilization of operating performance resulting in a return to profitability, continued improvement in asset quality performance particularly in SLFC's real estate loan portfolio, and successful execution of funding and liquidity initiatives for 2013. A substantial reduction in balance sheet leverage to previously targeted levels would also be viewed positively by Fitch. Conversely, negative rating actions could be driven by material deterioration in operating performance resulting in further operating losses. Should liquidity be insufficient to repay upcoming debt maturities, or a material increase in balance sheet leverage over and above current levels, these would also likely yield negative rating actions. The RR assigned to the senior unsecured notes are also sensitive to changes in values of SLFC's unencumbered assets which ultimately affect the level of available collateral coverage, and subsequently the notching of the senior unsecured notes to below the current IDR. Fitch expects to assign the following ratings: Springleaf Finance Corporation -- Senior unsecured notes 'CCC/RR4'(exp). SUNRISE REAL ESTATE: Delays Form 10-Q for First Quarter ------------------------------------------------------- Sunrise Real Estate Group, Inc., said it will be delayed in the filing of its 10-Q for the period ended March 31, 2013, due to a delay in the preparation of its financial statements. About Sunrise Real Estate Headquartered in Shanghai, the People's Republic of China, Sunrise Real Estate Group, Inc. was initially incorporated in Texas on Oct. 10, 1996, under the name of Parallax Entertainment, Inc. On Dec. 12, 2003, Parallax changed its name to Sunrise Real Estate Development Group, Inc. On April 25, 2006, Sunrise Estate Development Group, Inc., filed Articles of Amendment with the Texas Secretary of State, changing the name of Sunrise Real Estate Development Group, Inc. to Sunrise Real Estate Group, Inc., effective from May 23, 2006. The Company and its subsidiaries are engaged in the property brokerage services, real estate marketing services, property leasing services and property management services in China. In its report accompanying the 2011 financial statements, Kenne Ruan, CPA, P.C., in Woodbridge. CT, USA, noted that the Company has significant accumulated losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. The Company incurred a net loss of US$1.41 million in 2011 and a net loss of US$25,487 in 2010. The Company's balance sheet at Sept. 30, 2012, showed US$39.87 million in total assets, US$34.44 million in total liabilities and US$5.43 million in total shareholders' equity. SUNSTONE COMPONENTS: Has Interim Access to Cash ----------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized, on an interim basis, Sunstone Components Group, Inc., et al. to: -- to enter into the stipulation regarding use of cash collateral, provision of adequate protection and debtor-in- possession financing with Comerica Bank pursuant to which the Debtors seek, among other things, authority for postpetition financing in the amount of $218,655; -- to use cash collateral in which Snowbird Capital Mezzanine Fund I, LP, asserts a security interest pursuant to that certain Secured Note and Warrant Purchase Agreement, dated as of April 15, 2008, and in which an entity named Hexagon Metrology, Inc., may have an interest under a judgment lien. Comerica has agreed (a) to provide the Debtors with financing in the total amount of $218,655; (b) to provide a carve out for professionals; and (c) to the Debtors' continued use of cash. The Hon. Meredith A. Jury on May 1 had disapproved a stipulation for the provision of gap period financing which was entered between the Debtors and Comerica Bank. The Court said, in its order, that the purported Debtor is not a trustee and the provisions of Section 364 do not apply. About Sunstone Components Group Headquartered in Temecula, California, Sunstone Components Group is a provider of precision metal stamping and insert injection moldings Snowbird Capital Mezzanine Fund, a subordinate secured lender owed $6.7 million by Sunstone Components Group, Inc., filed an involuntary Chapter 11 bankruptcy petition for Sunstone on April 5, 2013 (Bankr. C.D. Cal. Case No. 13-16232). The Debtor is represented by attorneys at Landau Gottfried & Berger, LLP. The petitioner tapped Arent Fox, LLP as counsel. Comerica Bank, owed about $5.1 million, is the senior secured lender. The bank is providing an additional $220,000 loan for the bankruptcy. On May 2, 2013, the company consented to being in Chapter 11 in order to sell substantially all of the Company's assets. SUNSTONE COMPONENTS: Meeting of Creditors Scheduled for June 17 --------------------------------------------------------------- The U.S. Trustee for region 16 will convene a meeting of creditors in the Chapter 11 cases of Sunstone Components Group and Sunstone Advantage, Inc. on June 17, 2013, at 2:30 p.m. In a separate order, the Court said that since the involuntary Chapter 11 petition was filed against the Debtor, no pleading or other defense to the petition has been filed. In this connection, the Debtor is ordered to file a list containing the name and address of each entity included on Schedule D, E, F, G, and H as precribed by the Official Forms. The Debtor is also ordered to file schedules, statement and a verified Statement of Social Security Number(s). About Sunstone Components Group Headquartered in Temecula, California, Sunstone Components Group is a provider of precision metal stamping and insert injection moldings Snowbird Capital Mezzanine Fund, a subordinate secured lender owed $6.7 million by Sunstone Components Group, Inc., filed an involuntary Chapter 11 bankruptcy petition for Sunstone on April 5, 2013 (Bankr. C.D. Cal. Case No. 13-16232). The Debtor is represented by attorneys at Landau Gottfried & Berger, LLP. The petitioner tapped Arent Fox, LLP as counsel. Comerica Bank, owed about $5.1 million, is the senior secured lender. The bank is providing an additional $220,000 loan for the bankruptcy. On May 2, 2013, the company consented to being in Chapter 11 in order to sell substantially all of the Company's assets. T3 MOTION: Incurs $566,000 Net Loss in First Quarter ---------------------------------------------------- T3 Motion, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $566,004 on $1.48 million of net revenues for the three months ended March 31, 2013, as compared with a net loss of $1.57 million on $1.40 million of net revenues for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $3.07 million in total assets, $19.63 million in total liabilities, all current, and a $16.55 million total stockholders' deficit. "The Company has incurred significant operating losses and has used substantial amounts of working capital in its operations since its inception (March 16, 2006). Further, at March 31, 2013, the Company had an accumulated deficit of $(76,980,775) and used cash in operations of $(1,614,252) for the three months ended March 31, 2013. These factors raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time." A copy of the Form 10-Q is available for free at: http://is.gd/xKFN43 About T3 Motion Costa Mesa, Calif.-based T3 Motion, Inc., develops and manufactures T3 Series vehicles, which are electric three-wheel stand-up vehicles that are directly targeted to the public safety and private security markets. T3 Motion reported a net loss of $21.52 million on $4.51 million of net revenues for the year ended Dec. 31, 2012, as compared with a net loss of $5.50 million on $5.29 million of net revenues during the prior year. TARGETED MEDICAL: Incurs $270,000 Net Loss in First Quarter ----------------------------------------------------------- Targeted Medical Pharma, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $270,277 on $2.81 million of total revenue for the three months ended March 31, 2013, as compared with a net loss of $975,917 on $1.37 million of total revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $12.22 million in total assets, $14.20 million in total liabilities and a $1.98 million total shareholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/DL2X80 About Targeted Medical Los Angeles, Calif.-based Targeted Medical Pharma, Inc., is a specialty pharmaceutical company that develops and commercializes nutrient- and pharmaceutical-based therapeutic systems. Targeted Medical disclosed a comprehensive loss of $9.58 million on $7.29 million of total revenue for the year ended Dec. 31, 2012, as compared with a comprehensive loss of $4.18 million on $8.81 million of total revenue during the prior year. EFP Rotenberg, LLP, in Rochester, New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has losses for the year ended Dec. 31, 2012, totaling $9,586,182 as well as accumulated deficit amounting to $13,684,789. Further the Company does not have adequate cash and cash equivalents as of Dec. 31, 2012, to cover projected operating costs for the next 12 months. As a result, the Company is dependent upon further financing, related party loans, development of revenue streams with shorter collection times and accelerating collections on the Company's physician managed and hybrid revenue streams. TBSF2 LLC: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: TBSF2 LLC 3830 Valley Centre Dr. #705-322 San Diego, CA 92130 Bankruptcy Case No.: 13-05016 Chapter 11 Petition Date: May 14, 2013 Court: United States Bankruptcy Court Southern District of California (San Diego) Judge: Laura S. Taylor Debtor's Counsel: Edward Jun Fetzer, Esq. LAW OFFICES OF EDWARD J. FETZER, ESQ. 402 West Broadway, Suite 400 San Diego, CA 92101 Tel: (619) 595-4833 E-mail: edwardfetzer@gmail.com Scheduled Assets: $2,500,200 Scheduled Liabilities: $1,639,215 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Michael Harbushka, manager. TELKONET INC: Incurs $411,800 Net Loss in First Quarter ------------------------------------------------------- Telkonet, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $411,846 on $3.12 million of total net revenues for the three months ended March 31, 2013, as compared with a net loss of $728,824 on $1.92 million of total net revenues for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $14.56 million in total assets, $5.36 million in total liabilities, $3.43 million in total redeemable preferred stock, and $5.75 million in total stockholders' equity. "I am extremely pleased with the revenue growth we achieved in the first quarter, a quarter which, historically, has been our slowest. We continue to see strength across all of our addressable market sectors and the success we're having in establishing strategic partnerships is allowing us to quickly and efficiently enter new and abundant marketplaces. The increase of over $1.0 million in revenue for the quarter indicates the increasing demand for our energy management technology solutions and that we have become a recognized leader in this rapidly- expanding industry," stated Jason Tienor, CEO of Telkonet. A copy of the Form 10-Q is available for free at: http://is.gd/BSfpMq On May 14, 2013, Telkonet entered into an employment agreement with each of Jason L. Tienor, the Company's President and Chief Executive Officer, and Jeffrey J. Sobieski, the Company's Chief Technology Officer, for a term commencing effective as of May 1, 2013, and expiring on May 1, 2015. The terms of each of these employment agreements will automatically renew for an additional 24 months unless the parties mutually agree or unless the agreement is terminated in accordance with its terms. Pursuant to their respective employment agreements, Mr. Tienor and Mr. Sobieski will receive a base salary of $206,000 and $195,700, respectively, and bonuses and benefits based on the Company?s internal policies and on participation in the Company?s incentive and benefit plans. In addition, on May 14, 2013, the Company entered into an employment agreement with each of Richard E. Mushrush, the Company's Chief Financial Officer, Matthew P. Koch, the Company's Chief Operating Officer and Gerrit J. Reinders, the Company's Executive Vice President of Sales and Marketing, for a term commencing as of May 1, 2013 and expiring as of May 1, 2014. The terms of each of these employment agreements will automatically renew for an additional 12 months unless the parties mutually agree or unless the agreement is terminated in accordance with its terms. Pursuant to their respective employment agreements, Messrs. Mushrush, Koch and Reinders receive a base salary of $113,300, $133,900 and $154,500, respectively, and bonuses and benefits based on the Company's internal policies and on participation in the Company's incentive and benefit plans. A copy of the Form 8-K is available for free at: http://is.gd/OezWqg About Telkonet Milwaukee, Wisconsin-based Telkonet, Inc., is a clean technology company that develops and manufactures proprietary energy efficiency and smart grid networking technology. Telkonet disclosed net income of $390,080 on $12.75 million of total net revenue for the year ended Dec. 31, 2012, as compared with a net loss of $1.90 million on $11.18 million of total net revenue during the prior year. Baker Tilly Virchow Krause, LLP, in Milwaukee, Wisconsin, issued "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has a history of operating losses and negative cash flows from operations, and an accumulated deficit of $117,954,116 that raise substantial doubt about the Company's ability to continue as a going concern. TEREX CORP: S&P Raises Senior Secured Notes Rating to 'BB+' ----------------------------------------------------------- Standard & Poor's Ratings Services raised its issue ratings and revised its recovery ratings on Terex Corp.'s senior secured and senior unsecured debt issues to reflect improved recovery prospects following the company's repayment of senior secured term debt. S&P revised the senior secured recovery rating to '1', indicating its expectation of very high (90%-100%) recovery for lenders in a payment default scenario, from '2'. In addition, S&P raised its issue-level rating on these securities to 'BB+' (two notches higher than the 'BB-' corporate credit rating) from 'BB'. S&P revised the senior unsecured recovery rating to '4', indicating its expectation for average (30%-50%) recovery, from '5'. S&P raised the unsecured issue-level ratings to 'BB-' from 'B+'. The rating actions reflect the company's repayment of $220 million of term loans and plans to repay an additional $30 million in July. S&P's estimates for recovery at simulated default improved for the senior secured and unsecured lenders as a result of the debt reduction. The other elements of our recovery analysis remain broadly consistent with S&P's previous analysis, including an estimated gross enterprise value at default of about $1.5 billion. RATINGS LIST Terex Corp. Corporate Credit Rating BB-/Positive/-- Ratings Raised, Recovery Ratings Revised To From Terex Corp. Senior Secured BB+ BB Recovery Rating 1 2 Senior Unsecured BB- B+ Recovery Rating 4 5 THEA BOWMAN: S&P Lowers Rating on Revenue Bonds to 'BB-' -------------------------------------------------------- Standard & Poor's Ratings Services lowered its long-term rating on Indiana Finance Authority's educational facilities revenue bonds issued on behalf of the Drexel Foundation for Educational Excellence (Drexel) for the benefit of Thea Bowman Charter School (TBLA) to 'BB-' from 'BB+'. The outlook is negative. "The downgrade reflects our view of TBLA's technical default in fiscal 2012 due to its failure to meet its 1.25x maximum annual debt service coverage covenant," said Standard & Poor's credit analyst Avani Parikh. S&P understands the school has not missed a debt service payment and has requested waivers for fiscals 2012 and 2013, although no information regarding whether the waivers will be provided is available at this time. In addition, weakened operating performance in fiscal 2012, slim coverage based on the fiscal 2013 budget, systematic administrative issues that have led to poor financial visibility and highly variable funding level pressure the rating. According to management, the state recently passed legislation that relieves charter schools of their common school loans, which for TBLA reduces maximum annual debt service (MADS) by approximately $1 million and may result in the school meeting the covenant for fiscal 2013. The negative outlook reflects S&P's view of the school's technical default due to failure to meet its covenant for debt service coverage with very weak MADS coverage in fiscal 2012 and the expectation that coverage may remain slim through at least fiscal 2014. Further, the outlook reflects declining operating margins and the volatile funding levels, which S&P believes may continue to pressure operations. S&P could consider further negative rating action if enrollment weakens, management does not improve its delays in financial reporting and governance issues, operating margins remain negative, liquidity weakens from current levels or if the academy does not reach coverage of at least 1.25x by fiscal 2014 year end. The Drexel Foundation is a nonprofit corporation founded to enhance the educational opportunities of inner-city youth. It currently operates one school, TBLA. Chartered in February 2003, by BSU, TBLA is a public charter school serving more than 1,400 students in grades K-12 on two campuses in Gary, Ind., approximately 35 miles southeast of Chicago, Ill. THERMOENERGY CORP: Incurs $1.1 Million Net Loss in 1st Quarter -------------------------------------------------------------- ThermoEnergy Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $1.07 million on $1 million of revenue for the three months ended March 31, 2013, as compared with a net loss of $1.54 million on $1.68 million of revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $5.93 million in total assets, $17.46 million in total liabilities and a $11.52 million total stockholders' deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/XbRgdp About ThermoEnergy Corporation Little Rock, Ark.-based ThermoEnergy Corporation is a clean technologies company engaged in the worldwide development of advanced municipal and industrial wastewater treatment systems and carbon reducing clean energy technologies. The Company incurred a net loss of $7.38 million for the year ended Dec. 31, 2012, as compared with a net loss of $17.38 million on $5.58 million of revenue in 2011. Grant Thornton LLP, in Westborough, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company incurred a net loss of $7,382,000 during the year ended Dec. 31, 2012, and, as of that date, the Company's current liabilities exceeded its current assets by $7,094,000 and its total liabilities exceeded its total assets by $10,611,000. These conditions, among other factors, raise substantial doubt about the Company's ability to continue as a going concern. TITAN PHARMACEUTICALS: Posts $6MM Net Income in First Quarter ------------------------------------------------------------- Titan Pharmaceuticals, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income and comprehensive income of $6 million on $5.17 million of total revenue for the three months ended March 31, 2013, as compared with a net loss and comprehensive loss of $5.16 million on $1.27 million of total revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, the Company's balance sheet showed $23.53 million in total assets, $26.58 million in total liabilities and a $3.04 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/2O9fp6 About Titan Pharmaceuticals South San Francisco, California-based Titan Pharmaceuticals is a biopharmaceutical company developing proprietary therapeutics primarily for the treatment of central nervous system disorders. Following the 2011 results, OUM & Co. LLP, in San Francisco, California, expressed substantial doubt about Titan's ability to continue as a going concern. The independent auditors noted that the Company's cash resources will not be sufficient to sustain its operations through 2012 without additional financing, and that the Company also has suffered recurring operating losses and negative cash flows from operations. TPO HESS: Files Prepack for Quick Sale to Bang Printing ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that TPO Hess Holdings Inc., doing business as commercial and educational printer D.B. Hess Co., and affiliate The Press of Ohio commenced a partly prepackaged Chapter 11 reorganization (Bankr. D. Del. Case No. 13-11327) on May 22. The prepackaged plan will be financed by a sale of the business for $19.3 million to Bang Printing of Ohio Inc. There will be an auction to determine if there is a higher price for the Kent, Ohio-based business. The plan offers $1.5 million, or a 2 percent recovery, to holders of $74 million in second-lien notes. The noteholders already accepted the plan unanimously. First-lien debt of $11.9 million will be paid in full. Unsecured creditors with $20 million in claims will be paid nothing and weren't allowed to vote on the plan. A court filing listed $14.2 million in debt owing to trade suppliers. The report relates that the company wants the bankruptcy court in Delaware to hold a confirmation hearing on July 24 for approval of the plan. Unsecured creditors will be given notice of their right to object. The case is TPO Hess Holdings Inc., 13-11327, U.S. Bankruptcy Court, District of Delaware (Wilmington). TRANS ENERGY: Incurs $2.7 Million Net Loss in First Quarter ----------------------------------------------------------- Trans Energy, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.69 million on $3.60 million of revenues for the three months ended March 31, 2013, as compared with a net loss of $1.49 million on $2.91 million of revenues for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $85.10 million in total assets, $79.41 million in total liabilities and $5.68 million in total stockholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/MCp5Gx About Trans Energy St. Mary's, West Virginia-based Trans Energy, Inc. (OTC BB: TENG) -- http://www.transenergyinc.com/-- is an independent energy company engaged in the acquisition, exploration, development, exploitation and production of oil and natural gas. Its operations are presently focused in the State of West Virginia. In its audit report on the Company's 2011 results, Maloney + Novotny, LLC, in Cleveland, Ohio, noted that the Company has generated significant losses from operations and has a working capital deficit of $18.37 million at Dec. 31, 2011, which together raises substantial doubt about the Company's ability to continue as a going concern. TRANS-LUX CORP: Delays Form 10-Q for First Quarter -------------------------------------------------- Trans-Lux Corporation was unable to file its report on Form 10-Q for the quarter ending March 31, 2013, within the prescribed time period because of pending additional information necessary for finalizing its Form 10-Q. In the three months ended March 31, 2013, as compared to the corresponding period for the prior year, the Company's revenues decreased $1.5 million or 26.9 percent, cost of revenues decreased $1.3 million or 28.1 percent, general and administrative expenses decreased $675,000 or 26.1 percent and the change in warrant liabilities decreased to a charge of $68,000 from a gain of $108,000. These changes result in a decrease of $262,000 in the loss from continuing operations. The Company also recorded a $1 million gain on the sale of its Santa Fe, New Mexico, real estate property, which is included in discontinued operations. As a result, net loss decreased $1.4 million to $304,000 in 2013 from $1.7 million in 2012. About Trans-Lux Corporation Norwalk, Conn.-based Trans-Lux Corporation (NYSE Amex: TLX) is a designer and manufacturer of digital signage display solutions for the financial, sports and entertainment, gaming and leasing markets. The Company reported a net loss of $1.42 million in 2011, compared with a net loss of $7.03 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $23.62 million in total assets, $20.37 million in total liabilities, and $3.25 million in total stockholders' equity. UNIVERSAL BIOENERGY: Delays Q1 Form 10-Q for Business Matters ------------------------------------------------------------- Universal Bioenergy, Inc., has been unable to complete its Form 10-Q for the quarter ended March 31, 2013, within the prescribed time because of delays in completing the preparation of its financial statements and its management discussion and analysis. Those delays are primarily due to Company's dedication to business matters. This has taken a significant amount of management's time away from the preparation of the Form 10-Q and delayed the preparation of the unaudited financial statements for the quarter ended March 31, 2013. About Universal Bioenergy Headquartered in Irvine, California, Universal Bioenergy Inc. develops markets alternative and natural energy products including, natural gas, solar, biofuels, wind, wave, tidal, and green technology products. Universal Bioenergy disclosed a net loss of $3.65 million on $50.51 million of revenues for the year ended Dec. 31, 2012, as compared with a net loss of $2.23 million on $71.74 million of revenues during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $7.99 million in total assets, $9.44 million in total liabilities, and a $1.46 million total stockholders' deficit. Bongiovanni & Associates, CPA'S, in Cornelius, North Carolina, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring operating losses, has an accumulated deficit, has negative working capital, and has yet to generate an internal cash flow that raises substantial doubt about its ability to continue as a going concern. UNIVERSAL HEALTH: Trustee Taps Kapila & Company as Accountants -------------------------------------------------------------- Soneet R. Kapila, the duly appointed Chapter 11 trustee for Universal Health Care Group, Inc., asks the Bankruptcy Court for permission to employ Kapila & Company as financial advisors and accountants. To the best of the trustee's knowledge, K&C has no connection with the Debtors, creditors, or any other party-in-interest. About Universal Health Care Universal Health Care Group, Inc., owns an insurance company and three health-maintenance organizations that provide managed care services for government sponsored health care programs, focusing on Medicare and Medicaid. Universal Health was founded in 2002 by Dr. A.K. Desai and grew its operations of offering Medicare plans to more than 37,000 members to over 20 states. Universal Health filed a Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida regulators moved to put two of the company's subsidiaries in receivership. Universal Health Care estimated assets of up to $100 million and debt of less than $50 million in court filings in Tampa, Florida. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, serves as counsel to the Debtor. UNIVERSAL HEALTH: Trustee Taps Trenam Kemker as Special Counsel --------------------------------------------------------------- Soneet R. Kapila, the duly appointed Chapter 11 trustee for Universal Health Care Group, Inc., asks the Bankruptcy Court for permission to employ Trenam, Kemker, Scharf, Barkin, Frye, O'Neill & Mullis, P.A. as its special counsel to render general bankruptcy services. According to the trustee, no fee will be paid to Trenam without an application to and an order from the Court. To the best of the trustee's knowledge, Trenam has no connection with the Debtor, creditors or party-in-interest. About Universal Health Care Universal Health Care Group, Inc., owns an insurance company and three health-maintenance organizations that provide managed care services for government sponsored health care programs, focusing on Medicare and Medicaid. Universal Health was founded in 2002 by Dr. A.K. Desai and grew its operations of offering Medicare plans to more than 37,000 members to over 20 states. Universal Health filed a Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 13-01520) on Feb. 6, 2013, after Florida regulators moved to put two of the company's subsidiaries in receivership. Universal Health Care estimated assets of up to $100 million and debt of less than $50 million in court filings in Tampa, Florida. Harley E. Riedel, Esq., at Stichter Riedel Blain & Prosser, in Tampa, serves as counsel to the Debtor. UNIVERSAL SOLAR: Delays Form 10-Q for First Quarter --------------------------------------------------- Universal Solar Technology, Inc., has been unable to complete its quarterly report on Form 10-Q for the period ended March 31, 2013, within the prescribed time because of certain delays that have prevented the Company from preparing a complete filing. The Company was therefore unable to file its Quarterly Report on Form 10-Q in a timely manner without unreasonable effort or expense. The Company expects to file its Quarterly Report within the extension period. About Universal Solar Headquartered in Zhuhai City, Guangdong Province, in the People's Republic of China, Universal Solar Technology, Inc., was incorporated in the State of Nevada on July 24, 2007. It operates through its wholly owned subsidiary, Kuong U Science & Technology (Group) Ltd., a company incorporated in Macau, the People's Republic of China on May 10, 2007, and its subsidiary, Nanyang Universal Solar Technology Co., Ltd., a wholly foreign owned enterprise registered on Sept. 8, 2008 under the wholly foreign- owned enterprises laws of the PRC. The Company primarily manufactures, markets and sells silicon wafers to manufacturers of solar cells. In addition, the Company manufactures photovoltaic modules with solar cells purchased from third parties. Universal Solar disclosed a net loss of $5.66 million on $649,616 of sales for the year ended Dec. 31, 2012, as compared with a net loss of $2.70 million on $3.28 million of sales during the prior year. The Company's balance sheet at Dec. 31, 2012, showed $6.37 million in total assets, $15.56 million in total liabilities and a $9.19 million total stockholders' deficiency. Paritz & Company, P.A., in Hackensack, New Jersey, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has not generated cash from its operation, has stockholders' deficiency of $9,191,918 and has incurred net loss of $9,887,181 since inception. These circumstances, among others, raise substantial doubt about the Company's ability to continue as a going concern. US AIRWAYS: Fitch Assigns 'B-' Rating to $400MM Unsecured Notes --------------------------------------------------------------- Fitch Ratings has assigned a rating of 'B-/RR6' to the proposed $400 million unsecured notes to be issued by US Airways Group, Inc. In addition, Fitch has downgraded US Airways' senior unsecured convertible notes to 'CCC+/RR6' from 'B-/RR6', reflecting that the convertibles do not benefit from a guarantee from US Airways, Inc. as do the new unsecured notes. The Issuer Default Ratings (IDR) for US Airways Group, Inc. and its primary operating subsidiary US Airways, Inc. (LCC) remain unchanged at 'B+' with a Positive Outlook. A full rating list is shown at the end of this release. US Airways Group, Inc. is expected to issue $400 million in senior unsecured notes with the proceeds to be used for general corporate purposes. The notes will feature a five-year tenor and will be fully and unconditionally guaranteed by US Airways, Inc. The notes will be rank pari passu with all senior unsecured indebtedness of both US Airways Group, Inc. and US Airways, Inc. Following the proposed merger with American Airlines, the notes will be also be guaranteed by AMR Corporation and American Airlines, Inc. Key Rating Drivers The 'B-/RR6' rating is driven by Fitch's recovery analysis, which reflects recovery expectations under a scenario in which distressed enterprise value is allocated to the various debt classes. An 'RR6' rating reflects the expectation that unsecured noteholders would likely experience below-average recovery due to the significant amount of secured debt in US Airways' capital structure. LCC's IDR continues to reflect the transformation of the company's business model which has significantly improved its financial profile since the credit crisis. Over the past year LCC produced record revenues, profitability and cash flow, despite a lackluster macro environment and volatile fuel prices. As a result, LCC's credit metrics have notably improved. While significant risks remain, Fitch believes LCC is in a better position to withstand a weak operating environment or higher fuel costs. Other factors supporting the ratings include structural changes in the U.S. airline industry and LCC's relative cost position (including no defined benefit pension plan), which give the company significant operating leverage in a growing economy. Fitch's primary concerns for LCC on a standalone basis include the company's high debt levels, and limitations on its ability to reduce network capacity based on current pilot contracts, in addition to the cyclicality and event risk inherent in the airline industry. Although LCC's unhedged fuel strategy poses a risk in a severe fuel spike scenario, current industry fundamentals enable LCC and its peers to largely pass on higher fuel costs through higher fares when demand is rising, or cut capacity when demand is falling. The Positive Rating Outlook reflects the potential credit benefits over the next one to two years from LCC's pending merger with American Airlines. Fitch maintains its view that the proposed merger enhances LCC's network and credit profile but expects potential benefits to be realized over the longer term. Rating Sensitivities: The ratings on the unsecured notes are tied to US Airways' IDR. An upgrade or downgrade of the notes could follow a rating action on the underlying IDR. An upgrade could also follow improvement in the recovery prospects for the notes through either a rising enterprise value for US Airways or a material change in US Airways' capital structure. Fitch has assigned the following ratings: US Airways Group, Inc. -- Senior unsecured notes due 2018 'B-/RR6'. Fitch has downgraded the following ratings: US Airways Group, Inc. -- Senior unsecured convertible notes to 'CCC+/RR6' from 'B-/RR6' Fitch rates US Airways as follows: US Airways Group, Inc. -- IDR 'B+'; -- Senior secured term loan due 2014 'BB+/RR1'. US Airways, Inc. -- IDR 'B+'; -- Proposed senior secured term loan B1 due 2019 'BB+/RR1'; -- Proposed senior secured term loan B2 due 2016 'BB+/RR1'. The Rating Outlook is Positive. US AIRWAYS: S&P Assigns 'CCC+' Rating to Senior Unsecured Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' issue-level rating to US Airways Group Inc.'s senior unsecured notes due 2018, with a '5' recovery rating, indicating S&P's expectation of modest (10%-30%) recovery in a default scenario. The company will use proceeds for general corporate purposes. The 'B-' corporate credit rating is unchanged and the outlook is positive. S&P's ratings on US Airways Group Inc. reflect its substantial debt and lease burden and participation in the high-risk U.S. airline industry. The ratings also incorporate benefits from the company's operating costs, which are than those of other legacy airlines. Tempe, Ariz.-based US Airways is the fifth-largest U.S. airline, carrying about 9% of industry traffic. S&P characterizes the company's business profile as "weak", its financial profile as "highly leveraged", and its liquidity as "adequate" under S&P's criteria. On Feb. 14, 2013, US Airways and AMR Corp. (parent of American Airlines Inc.) announced a merger agreement. S&P will evaluate the merger (which is subject to regulatory review and other conditions) and how it fits into AMR's plan to emerge from bankruptcy, and S&P could place ratings on CreditWatch with positive implications if it believes it is likely S&P would rate the merger entity 'B' (S&P do not foresee a likelihood of a higher rating, nor do it believes it likely that S&P would lower the corporate credit rating). The timing of any CreditWatch placement or rating change would depend on both availability of information needed to judge merger effects and greater clarity. Ratings List US Airways Group Inc. Corporate Credit Rating B-/Positive/-- New Rating US Airways Group Inc. Senior Unsecured Notes Due 2018 CCC+ Recovery Rating 5 US FOODS: S&P Assigns 'B-' Rating to $2.1BB Sr. Secured Term Loan ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B-' issue rating to Rosemont, Ill.-based US Foods Inc.'s proposed $2.1 billion senior secured term loan maturing March 31, 2019, and '5' recovery rating, indicating that lenders could expect modest (10% to 30%) recovery in the event of a payment default. At the same time, S&P assigned its 'BB-' issue rating to the company's existing $1.1 billion asset-backed revolving credit facility maturing May 11, 2016, and a '1' recovery rating, indicating that lenders could expect very high (90% to 100%) recovery in the event of a payment default. The ratings are subject to change and assume the transaction is completed on substantially the terms presented to S&P. S&P expects the net proceeds from the proposed term loan will be used to repay the company's existing $417 million and $1.674 billion senior secured term loans, both of which mature on March 31, 2017. S&P expects to withdraw the ratings on the existing term loans upon their repayment. All of S&P's other ratings on the company, including the 'B' corporate credit rating, remain unchanged. The outlook is stable. Pro forma for the proposed transaction, total debt outstanding is about $4.85 billion. S&P's US Foods ratings reflect Standard & Poor's analysis that the company's financial risk profile will remain "highly leveraged" for the foreseeable future. This is based on S&P's opinion that the company has a very aggressive financial policy and significant debt burden. S&P also believes the company's performance will improve over the remainder of 2013 relative to the first quarter ended March 31, 2013, which was particularly weak across most of the foodservice distribution industry. S&P's "fair" business risk assessment reflects the company's participation in an intensely competitive, low-margin industry. The company benefits from its satisfactory market position, relatively stable historic industry demand, and broad geographic diversification within the U.S. RATING LIST US Foods Inc. Corporate credit rating B/Stable/-- Ratings Assigned US Foods Inc. Senior secured $1.1 billion revolver due 2016 BB- Recovery rating 1 $2.1 billion term loan due 2019 B- Recovery rating 5 VALLEYCREST COMPANIES: Moody's Rates $265MM Term Loan 'B3' ---------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating, B2-PD probability of default rating to ValleyCrest Companies, LLC, and a B3 rating to the company's $265 million first lien senior secured term loan due 2019. The rating outlook is stable. This is the first time Moody's has assigned public ratings to ValleyCrest. The following rating actions have been taken: Corporate family rating, B2 assigned; Probability of default rating, B2-PD assigned; $265 million first lien senior secured term loan due 2019, assigned B3, LGD4-61%; Rating outlook is stable. Ratings Rationale: The proceeds from the senior secured term loan will be used to retire outstanding borrowings under the company's existing term loan facility. In conjunction with the term loan, the company is putting in place a new $75 million first lien senior secured revolving credit facility (unrated) due 2018, which is intended to be used for working capital purposes. ValleyCrest's B2 corporate family rating reflects its high financial leverage, relatively low operating margins, modest interest coverage, modest size and scale, and competitive forces in its core landscape maintenance and development businesses. The ratings are supported by the company's strong position in the markets it serves, its recurring contractual cash flows from the landscape maintenance business, solid long-term diverse customer relationships, and adequate liquidity profile. Additionally, the company's focus on growing and solidifying its landscape maintenance operations, which provide stronger and more consistent margins than its other lines of business, is also a credit positive. The stable outlook reflects Moody's expectation that the company's core maintenance operations will continue generating performance relatively consistent with its historical trends. Additionally, the outlook incorporates Moody's expectation that ValleyCrest will improve the profitability of its other lines of business, and reduce financial leverage over the intermediate time horizon. ValleyCrest has an adequate liquidity position, which, however, is constrained by limited cash balances, seasonal working capital swings that consume cash flows and utilize revolving credit facility. At the close of the transaction the company is expected to have approximately $5 million of cash on hand. As a part of this transaction ValleyCrest is putting in place a new $75 million first lien senior secured ABL revolving credit facility due 2018, and will need to maintain a fixed charge coverage ratio above 1.0x if a) the availability under the facility at any time is below the lesser of $7.5 million or 10% of the credit facility size, and b) the availability under the facility during three consecutive business days is below the lesser of $9.375 million or 12.5% of the credit facility size. In Moody's view the company should maintain adequate facility availability and be in compliance with its covenants over the next 12 to 18 months. ValleyCrest's liquidity is also supported by lack of debt maturities until 2018. The ratings could experience a downward pressure if the adjusted debt-to-EBITDA increases above 6.0x, operating margins weaken, interest coverage declines below 1.0x, or if liquidity deteriorates. The ratings could be considered for an upgrade if the company's adjusted debt-to-EBITDA declines below 4.5x, operating profitability improves markedly, interest coverage exceeds 2.5x, while the company builds size and scale and maintains solid liquidity. The B3 rating assigned to the proposed $265 million senior secured term loan due 2019 is one notch below the corporate family rating of B2. The ABL benefits from a first lien on the company's receivables. The term loan has a second-priority interest in the ABL assets, and a first priority interest in fixed assets and inventory. The principal methodology used in this rating was the 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. Founded in 1949 and headquartered in Calabasas, California, ValleyCrest Companies LLC ("ValleyCrest") is a national provider of landscape maintenance services, installation and ancillary services, operating through five principal divisions that include Landscape, Maintenance, U.S. Lawns, Nursery, and Golf. The company's customers include corporate campuses, office buildings, municipal properties, hotels, resorts, sports venues, golf courses, theme parks, museums, etc. ValleyCrest, the issuer of the rated debt, is wholly owned by E.I.I. Holding Co., a Delaware C- corporation that is itself wholly owned by ValleyCrest Holding Co In its fiscal year ended April 30, 2013, ValleyCrest generated approximately $900 million in revenues. VANTAGE ONCOLOGY: Moody's Rates $250MM Sr. Secured Notes 'B2' ------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Vantage Oncology, LLC's proposed $250 million senior secured notes. At the same time, the company's B2 corporate family rating was affirmed and probability of default rating changed to B2-PD from B3-PD. The rating outlook remains stable. Proceeds from the proposed bond offering will be used to refinance the company's existing senior secured credit facilities. The follow rating actions were taken: $250 million senior secured notes, assigned B2 (LGD4, 52%); Corporate family rating, affirmed at B2; Probability of default rating, upgraded to B2-PD from B3-PD; The following ratings were affirmed and will be withdrawn at closing: $25 million senior secured revolving credit facility, due 2016, affirmed at B2 (LGD3, 32%); $220 million senior secured term loan, due 2017, affirmed at B2 (LGD3, 32%). Ratings Rationale: The B2 corporate family rating considers Vantage's small revenue base, high leverage of approximately 5 times and meaningful exposure to Medicare and Medicaid. It is Moody's expectation the company will generate a reduced level of positive free cash flow due to increased capital expenditures from the rationalized levels of the past 12 to 18 months as the company replaces its aging linear accelerators. The rating also considers declines in prostate treatment volumes as well as the negative impact of the current reimbursement rate environment. Moody's anticipates the company will work to mitigate these headwinds by effectively managing expenses and continuing to exhibit total treatment growth. The B2 rating is further supported by the company's good liquidity profile with no meaningful near-term debt maturities. The stable rating outlook reflects the company's good liquidity position and Moody's expectation that management will continue to maintain conservative financial policies. The rating outlook could be changed to negative or ratings could be downgraded if the company's liquidity profile weakens and/or free cash flow turns negative on a sustained basis. The ratings could also be downgraded if the company experiences a meaningful reduction in visits such that its EBITDA contracts and adjusted debt leverage excluding preferred stock adjustments increases to above 5.5 times on a sustained basis. Debt financed acquisitions or additional reimbursement rate declines could also have negative rating implications. The ratings could be upgraded if the company is able to exhibit sustained improvement in its cost reduction efforts while meaningfully increasing its revenue base and its adjusted debt to EBITDA excluding preferred stock adjustments declines to below 3.5 times on a sustained basis. A ratings upgrade would also require a more stable reimbursement environment. The principal methodology used in this rating was the Global Healthcare Service Providers published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Vantage Oncology, LLC is a provider of radiation therapy and related oncology services to cancer patients. The company is owned by Oak Hill Capital Partners ("Oak Hill"). Revenue for the fiscal year ended December 31, 2012 was approximately $167 million. VELATEL GLOBAL: Delays Form 10-Q for First Quarter -------------------------------------------------- VelaTel Global Communications, Inc., was unable to file its Form 10-Q for the period ended March 31, 2013, in a timely manner because the Company was not able to complete its financial statements by the time required for the Company to timely file its Form 10-Q. The Company's Form 10-K for the period ended Dec. 31, 2012, has not been filed with the Securities and Exchange Commission. About VelaTel Global VelaTel acquires spectrum assets through acquisition or joint venture relationships, and provides capital, engineering, architectural and construction services related to the build-out of wireless broadband telecommunications networks, which it then operates by offering services attractive to residential, enterprise and government subscribers. VelaTel currently focuses on emerging markets where internet penetration rate is low relative to the capacity of incumbent operators to provide comparable cutting edge services, or where the entry cost to acquire spectrum is low relative to projected subscribers. VelaTel currently has project operations in People's Republic of China, Croatia, Montenegro and Peru. Additional target markets include countries in Latin America, the Caribbean, Southeast Asia and Eastern Europe. VelaTel's administrative headquarters are in Carlsbad, California. For more information, please visit www.velatel.com. After auditing the 2011 results, Kabani & Company, Inc., in Los Angeles, California, expressed substantial doubt as to the Company's ability to continue as a going concern. The independent auditors noted that the Company has incurred a net loss for the year ended Dec. 31, 2011, cumulative losses of $254 million since inception, a negative working capital of $16.4 million and a stockholders' deficiency of $9.93 million. The Company reported a net loss of $21.79 million in 2011, compared with a net loss of $66.62 million in 2010. The Company's balance sheet at Sept. 30, 2012, showed $21.55 million in total assets, $26.54 million in total liabilities and a $4.99 million total stockholders' deficiency. VENTANA 20/20: Has Deal with East West; Case Dismissed ------------------------------------------------------ The Hon. Eileen W. Hollowell of the U.S. Bankruptcy Court for the District of Arizona dismissed the Chapter 11 case of Ventana 20/20 L.P. The Debtor said that the dismissal of the case will implement the settlement agreement with East West Bank. As reported in the Troubled Company Reporter on April 12, 2013, the settlement with its senior secured creditor, East-West Bank, has terms that will allow the Debtor to repay other creditors much faster, than if any plan of reorganization were confirmed. As a condition to dismissal of the case, the Debtor has agreed to, among other things: a. Following dismissal of the case, the Debtor will be enjoined and won't sell, transfer or convey all or any portion of its Prima County property except as provided by the parties' settlement agreement and in accordance with its terms. b. Any subsequent bankruptcy case filed within 24 months following the entry of the dismissal order, in which Ventana 20/20 is the Debtor, or which involves the Greens at Ventana Property or any Collateral of East West Bank in the real or personal property of the Debtor, will be assigned to the Arizona Bankruptcy Court, and specifically to Judge Hollowell, or her succeeding bankruptcy Judge, to the extent possible. c. The Debtor won't file a subsequent bankruptcy case after the dismissal of this case or consent to an involuntary bankruptcy case before East West has been paid the full repayment amount. e. The Bank will be entitled to immediate stay relief in any subsequent voluntary or involuntary bankruptcy filing that affects the Property. About Ventana 20/20 LP Ventana 20/20 LP filed bare-bones Chapter 11 petition (Bankr. D. Ariz. Case No. 12-17493) in Tucson on Aug. 3, 2012. The Debtor disclosed $14,542,797 in assets and $10,938,012 in liabilities. John Murphy, as manager of the Debtor, signed the Chapter 11 petition. Mr. Murphy is the founder, chairman and CEO of the 20/20 Group of companies. As a value investor, he has led or participated in over $1 billion of multi-family acquisitions across North America. Bankruptcy Judge Eileen W. Hollowell oversees the case. Frederick J. Petersen, Esq., at Mesch, Clark & Rothschild, P.C., serves as the Debtor's counsel. Donald L. Schaefer, court appointed receiver for the Debtors, is represented by Warren J. Stapleton, Esq., at Osborn Maledon, P.A. In September, the United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Ventana 20/20 LP. The U.S. Trustee said it attempted to solicit creditors interested in serving on the Unsecured Creditors' Committee from the 20 largest unsecured creditors. After excluding governmental units, secured creditors and insiders, the U.S. Trustee has been unable to solicit sufficient interest in serving on the Committee, to appoint a proper Committee. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. VERMILLION INC: Incurs $2.5 Million Net Loss in First Quarter ------------------------------------------------------------- Vermillion, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $2.57 million on $328,000 of total revenue for the three months ended March 31, 2013, as compared with a net loss of $1.77 million on $312,000 of total revenue for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $6.50 million in total assets, $4.22 million in total liabilities and $2.27 million in total stockholders' equity. The recently completed investment transaction was structured to provide funding for the company's 2013-2015 strategic plan. "This investment in Vermillion positions us to improve the quality of care for women with ovarian cancer," said Thomas McLain, Vermillion's president and CEO. "It provides both strategic and financial resources to build on our early success with OVA1 as the first FDA-cleared multi-biomarker blood test to aid in the diagnosis and treatment of ovarian cancer." "Our experience in growing the OVA1 market with Quest Diagnostics has defined the key factors for building market awareness and expanding its use," continued McLain. "In 2013 and 2014 we will focus on positioning the patient outcome and cost advantages of the on-label usage of OVA1 versus off-label usage of CA-125 for the pre-surgical triage of suspicious ovarian masses." A copy of the Form 10-Q is available for free at: http://is.gd/NTqvPx About Vermillion Vermillion, Inc. is dedicated to the discovery, development and commercialization of novel high-value diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. Vermillion, along with its prestigious scientific collaborators, has diagnostic programs in oncology, hematology, cardiology and women's health. The Company filed for Chapter 11 on March 30, 2009 (Bankr. D. Del. Case No. 09-11091). Vermillion's legal advisor in connection with its successful reorganization efforts wass Paul, Hastings, Janofsky & Walker LLP. Vermillion emerged from bankruptcy in January 2010. The Plan called for the Company to pay all claims in full and equity holders to retain control of the Company. Vermillion incurred a net loss of $7.14 million in 2012, as compared with a net loss of $17.79 million in 2011. BDO USA, LLP, in Austin, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring losses and negative cash flows from operations and an accumulated deficit, all of which raise substantial doubt about the Company's ability to continue as a going concern. VINTAGE CONDOMINIUM: Condos, Bank in Fight for Control ------------------------------------------------------ Vintage Condominium Development LLC, the owner of the Vintage condominium development in Gilbert, Arizona, filed a petition for Chapter 11 protection (Bankr. D. Ariz. Case No. 13-08431) on May 17, three weeks after the state court appointed a receiver at the behest of the secured lender. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the bankruptcy began with a so-called bare-bones filing where no papers accompanied the three-page petition other than a list of creditors. The case quickly turned into a fight for control between the owner and the lender. The report recounts that the lender Parkway Bank & Trust Co., owed $12.3 million, had a receiver appointed after giving notice of default on April 12. The project has 107 units. Only two were sold to third parties, according to court filings. According to the report, events in the few days after bankruptcy read like a soap opera, with both sides using self-help to recover or retain control of the property. After the Chapter 11 filing on May 17, the owner showed the bankruptcy petition and took possession from the receiver. The same day, the receiver called the police who, according to the owner, refused to intervene and give the receiver possession in view of bankruptcy. On the early morning of May 18, the receiver's agents entered the office and changed the locks, according to a court filing by the owner. On May 20, the owner filed a lawsuit in bankruptcy court alleging that the receiver violated the so-called automatic bankruptcy stay by interfering with the owner's right to possession of the property. The bank responded the same day by filing papers asking the bankruptcy judge to excuse the receiver from any obligation to return possession to the lender. Gilbert is about 25 miles (40 kilometers) southeast of Phoenix, north of Chandler and south of Mesa. The petition lists assets and debt both exceeding $10 million. VUZIX CORP: Incurs $936,000 Net Loss in First Quarter ----------------------------------------------------- Vuzix Corporation filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $936,298 on $739,184 of total sales for the three months ended March 31, 2013, as compared with a net loss of $844,483 on $1.11 million of total sales for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $3.08 million in total assets, $10.14 million in total liabilities and a $7.05 million total stockholders' deficit. A copy of the Form 10-Q is available for free at: http://is.gd/UOLgsT About Vuzix Corp. Rochester, New York-based Vuzix Corporation (TSX-V: VZX) OTC BB: VUZI) -- http://www.vuzix.com/-- is a supplier of Video Eyewear products in the defense, consumer and media & entertainment markets. Vuzix reported net income of $322,840 on $3.22 million of total sales for the year ended Dec. 31, 2012, as compared with a net loss of $3.87 million on $4.82 million of total sales during the prior year. EFP Rotenberg, LLP, in Rochester, New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred substantial losses from operations in recent years. In addition, the Company is dependent on its various debt and compensation agreements to fund its working capital needs. The Company was not in compliance with its financial covenants under a senior secured debt holder and had other debts past due in some cases. These conditions raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "We have engaged an investment banking firm to assist us with respect to a planned public stock offering of up to $15,000,000. Our future viability is dependent on our ability to execute these plans successfully. If we fail to do so for any reason, we would not have adequate liquidity to fund our operations, would not be able to continue as a going concern and could be forced to seek relief through a filing under U.S. Bankruptcy Code." WAVE SYSTEMS: Registers 1.8 Million Class A Shares with SEC ----------------------------------------------------------- Wave Systems Corp. disclosed in a regulatory filing that Cranshire Capital Master Fund, Ltd, and Anson Investments Master Fund, LP, may sell up to 1,204,820 shares of Wave's Class A common stock, par value $0.01 per share, and up to 602,410 shares of Wave's Class A common stock, par value $0.01 per share, issuable upon the exercise of warrants. The Company will not receive any proceeds from the sale of these shares of Class A common stock by the selling stockholders. Wave's Class A common stock is traded on the Nasdaq Capital Market under the symbol "WAVX." The last reported sale price of the Company's Class A common stock on the Nasdaq Capital Market on May 9, 2013, was $0.49 per share. A copy of the Form S-3 prospectus is available for free at: http://is.gd/WrJrRH About Wave Systems Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. KPMG LLP, in Boston Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that Wave Systems Corp. has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. For the 12 months ended Dec. 31, 2012, the Company incurred a net loss of $33.96 million, as compared with a net loss of $10.79 million in 2011. The Company's balance sheet at March 31, 2013, showed $10.77 million in total assets, $22.19 million in total liabilities and a $11.42 million total stockholders' deficit. WELCH ENTERPRISES: Bankruptcy Administrator Wants Case Dismissed ---------------------------------------------------------------- Travis M. Bedsole, Jr., Bankruptcy Administrator for the Southern District of Alabama, filed a motion with the U.S. Bankruptcy Court to dismiss the chapter 11 case of Welch Enterprises, LLC, saying the Debtor has failed to comply with the Order entered by the Court on January 28, 2013, that required it to file: -- BA-2 quarterly fee statement for March 2013; -- Quarterly fee due for March 2013; and -- 2012 Tax Returns A hearing on the motion is set for May 28, 2013, at 8:30 a.m. at Courtroom 2, 201 St. Louis Street, in Mobile, Alabama. About Welch Enterprises Welch Enterprises, LLC, a Grove Hill, Alabama-based logging company, filed a Chapter 11 petition (Bankr. S.D. Ala. Case No. 13-00255) in Mobile, Alabama, on Jan. 25, 2013. The Debtor disclosed $13.3 million in assets and $1.41 million in liabilities in its schedules. WIRECO WORLDGROUP: S&P Puts 'B+' CCR on CreditWatch Negative ------------------------------------------------------------ Standard & Poor's Ratings Services said it placed its ratings, including the 'B+' corporate credit rating, on Kansas City, Mo.- based WireCo WorldGroup Inc. on CreditWatch with negative implications. The CreditWatch placement means S&P could affirm or lower the ratings after it completes its review. "The CreditWatch placement reflects our view of the company's relatively high debt, its net leverage covenant cushion of less than 10%, and uncertainty about how the company plans to reduce debt," said Standard & Poor's credit analyst Megan Johnston. During the past year, WireCo has increased debt to about $900 million from about $600 million in order to pursue acquisitions, but has failed to realize EBITDA gains from those acquisitions due to challenging operating conditions in a number of its key product lines and markets. As a result, performance has fallen short of S&P's previous expectations. S&P originally expected 2012 adjusted EBITDA of about $150 million, with adjusted debt to EBITDA of about 6x; however, WireCo's 2012 adjusted EBITDA was about $115 million, with adjusted debt to EBITDA of 8.2x. In addition, S&P estimates headroom on the company's net leverage covenant to be less than 10%, which is in line with a "less than adequate" liquidity assessment. S&P expects these measures to remain weak for the next several quarters, given lower rig counts, which affects demand for products WireCo sells to the oil and gas market, ongoing weakness in Europe, where WireCo has a large exposure, and an overall competitive environment. S&P's corporate credit rating on WireCo, a manufacturer of steel wire rope, reflects what S&P considers to be the company's "weak" business risk and its "aggressive" financial risk profiles. The company is exposed to intensely competitive and cyclical end markets, import penetration concerns, and aggressive debt leverage for the rating. WireCo's penetration into higher-margin businesses somewhat offsets these factors. In resolving the CreditWatch listing, S&P will review its performance expectations and WireCo's liquidity position, and assess its aggressive financial risk profile to determine whether a lower rating is warranted. This will include meeting with management to discuss near-term operating and financial prospects. Key factors in S&P's analysis will include a review of the company's overall strategy, its plans to reduce debt, and its need for covenant relief. S&P expects to resolve the CreditWatch listing within the next several weeks. WORLD SURVEILLANCE: Incurs $517,000 Net Loss in First Quarter ------------------------------------------------------------- World Surveillance Group Inc. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $517,081 on $526,177 of net sales for the three months ended March 31, 2013, as compared with a net loss of $1.39 million on $146,729 of net sales for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $3.89 million in total assets, $16.59 million in total liabilities and a $12.69 million total stockholders' deficit. Bankruptcy Warning "Our indebtedness at March 31, 2013 was $16,591,883. A portion of such indebtedness reflects judicial judgments against us that could result in liens being placed on our bank accounts or assets. We are continuing to review our ability to reduce this debt level due to the age and/or settlement of certain payables but we may not be able to do so. This level of indebtedness could, among other things: * make it difficult for us to make payments on this debt and other obligations; * make it difficult for us to obtain future financing; * require us to redirect significant amounts of cash from operations to servicing the debt; * require us to take measures such as the reduction in scale of our operations that might hurt our future performance in order to satisfy our debt obligations; and * make us more vulnerable to bankruptcy or an unwanted acquisition on terms unsatisfactory to us." A copy of the Form 10-Q is available for free at: http://is.gd/l4jk6Q Settles with Brio Brio Capital L.P., the holder of several warrants dating back to 2006, filed an action against the Company on March 28, 2011, in New York Supreme Court for, among other things, the issuance of approximately 6.2 million shares of common stock, par value $0.00001 per share, of the Company upon the exercise of certain warrants. The New York Supreme Court granted a non-final Summary Judgment Order in favor of Brio in December 2011 requiring the Company to issue 6,215,543 shares of Common Stock. Certain other claims relating to this Action remained outstanding. On Dec. 31, 2012, World Surveillance Group Inc. reached a settlement with Brio Capital, L.P., and Brio Capital Master Fund Ltd. and entered into a Settlement Agreement resolving all remaining issues in the Action, without admitting any liability or wrongdoing on the part of the Company. The Settlement Agreement was contingent on the approval by the Court pursuant to Section 3(a) (10) of the Securities Act of 1933, as amended. Notably, that Approval was granted by Order dated May 9, 2013, by the Hon. Marcy Friedman of the New York Supreme Court. As a result of the Settlement Agreement, Brio has no further rights of any kind whatsoever with respect to the Action or the above referenced warrants. Under the terms of the Settlement Agreement, the Company is required to issue a number of shares of Common Stock in 12 monthly installments equal to $31,250 divided by the price that is the average of the closing price of the Company's Common Stock for the last three trading days of the month immediately preceding the month in which the shares are due to be issued. Pursuant to the Section 3(a) (10) approval, the shares of Common Stock issued to Brio will be freely tradable upon issuance. Pursuant to the Settlement Agreement, Brio agreed not to sell publicly on any trading day in excess of 25 percent of the daily trading volume of the Company's Common Stock; provided, however, that such provision does not apply to sales at or more than $0.06 per share. A copy of the Settlement Agreement is available for free at: http://is.gd/FzZwOl About World Surveillance World Surveillance Group Inc. designs, develops, markets and sells autonomous lighter-than-air (LTA) unmanned aerial vehicles (UAVs) capable of carrying payloads that provide persistent security and/or wireless communication from air to ground solutions at low, mid and high altitudes. The Company's airships, when integrated with electronics systems and other high technology payloads, are designed for use by government-related and commercial entities that require real-time intelligence, surveillance and reconnaissance or communications support for military, homeland defense, border control, drug interdiction, natural disaster relief and maritime missions. The Company is headquartered at the Kennedy Space Center, in Florida. World Surveillance disclosed a net loss of $3.36 million on $272,201 of net revenues for the year ended Dec. 31, 2012, as compared with a net loss of $1.12 million on $19,896 of net revenues in 2011. Rosen Seymour Shapss Martin & Company LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has experienced significant losses and negative cash flows, resulting in decreased capital and increased accumulated deficits. These conditions raise substantial doubt about its ability to continue as a going concern. * S&P Raises Rating on 3 Natural Gas Prepay Transactions -------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on three natural gas prepay transactions, following the May 10, 2013, upgrade of two insurance companies that are counterparties in the transactions, MBIA Inc. and National Public Finance Guarantee Corp. The financial strength rating on National Public Finance Guarantee Corp. was raised to 'A' from 'BBB', and it was removed from CreditWatch positive. At the same time, S&P raised the rating on parent MBIA Inc. to 'BBB' from 'B-', and removed it from CreditWatch positive. Based on S&P's analysis of the transaction documents, the ratings on these gas prepay transactions are linked to the ratings on the affected counterparties and to the ratings on other parties to the transaction. The rating actions and weak links are as follows: -- S&P raised its rating on Salt Verde Financial Corp.'s (Gas Prepay) subordinated bonds series 2007 to 'BBB' from 'B-', and S&P revised the outlook to stable. The rating continues to be weak-linked to the rating and outlook on MBIA Inc., which acts as the debt-service reserve fund provider. -- S&P raised its ratings on Southern California Public Power Authority's (Gas Prepay) series 2007A and 2007B to 'A-' from 'BB', and S&P revised the outlook to negative. The rating is weak-linked to The Goldman Sachs Group Inc. (A- /Negative/A-2), which serves as guarantor to J. Aron, the gas provider. -- S&P raised its rating on Tennessee Energy Acquisition Corp.'s (Gas Prepay) series 2006C to 'BBB' from 'BB'. The rating was weak-linked to the rating and outlook on National Public Finance Guarantee Corp., which acts as the surety bond provider. However, since S&P upgraded National Public Finance Guarantee to 'A', the rating on this transaction is now weak-linked to the rating on Depfa Bank PLC (BBB/Stable/A-2), which is the provider of the Guaranteed Investment Contract. The outlook is now stable. STANDARD & POOR'S 17G-7 DISCLOSURE REPORT SEC Rule 17g-7 requires an NRSRO, for any report accompanying a credit rating relating to an asset-backed security as defined in the Rule, to include a description of the representations, warranties and enforcement mechanisms available to investors and a description of how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. The Rule applies to in-scope securities initially rated (including preliminary ratings) on or after Sept. 26, 2011. If applicable, the Standard & Poor's 17g-7 Disclosure Report included in this credit rating report is available at: http://standardandpoorsdisclosure-17g7.com RATING ACTIONS Salt Verde Financial Corp. (Gas Prepay) Series To From 2007 Subordinate bonds BBB/Stable B-/Negative Southern California Public Power Authority (Gas Prepay) Series To From 2007A and 2007B bonds A-/Negative BB/Developing Tennessee Energy Acquisition Corp. (Gas Prepay) Series To From 2006C bonds BBB/Stable BB/Developing * Settlements Prompt Moody's to Lift Ratings on MBIA Entities ------------------------------------------------------------- Moody's Investors Service upgraded the insurance financial strength ratings of MBIA Insurance Corporation (MBIA Corp., to B3 from Caa2 IFS), National Public Finance Guarantee Corporation (National, to Baa1 from Baa2 IFS), MBIA UK Insurance Limited (MBIA UK, to B1 from B3 IFS), MBIA Mexico S.A de C.V. (MBIA Mexico, to B3 from Caa2 IFS) as well as the ratings of MBIA Inc. (senior to Ba3 from Caa1), the group's ultimate holding company. The rating action also has implications for the various transactions wrapped by the MBIA group as discussed later in this press release. Rationale: Moody's stated that these rating actions reflect the overall positive effect that MBIA's recent settlements with various counterparties have had on the group's credit profile. The settlement of put-back recoverables owed to MBIA and of claims owed by MBIA related to insured exposures, including risky commercial real estate resecuritizations, under terms broadly consistent with MBIA's reserves, have, in aggregate, improved the group's liquidity profile and reduced the volatility of its insured risk portfolio. Additionally, the bank-led litigation related to the MBIA group's 2009 restructuring was dismissed as part of these settlements, reducing legal risk. Specifically, the settlement with Bank of America alleviated liquidity strains that could have triggered regulatory action at MBIA Corp. Proceeds from the Bank of America and Flagstar settlements allowed MBIA Corp. to repay and extinguish a $1.7 billion loan that National had extended to MBIA Corp., thereby eliminating a substantial risk from National's balance sheet and a major obstacle to National's payment of dividends to MBIA Inc. The end of the restructuring litigation and the reduced financial exposure to MBIA Corp. improves National's prospects for underwriting new transactions. Ratings Rationale: MBIA Insurance Corporation The B3 IFS rating, positive outlook, of MBIA Corp. reflects the firm's improved capital and liquidity profile following settlements of putback receivables and insured claims with major counterparties. MBIA Corp. has been able to alleviate liquidity pressures that could have prompted regulatory action. However, the insurer remains exposed to substantial insured risks, including certain commercial real estate exposures that could yield high losses in a stress scenario. Further improvement in the rating is most likely to result from a continuation of the recent trend toward elimination of the insurers' most troublesome exposures via favorable settlements. The B3 IFS rating, positive outlook of MBIA Mexico, S.A. de C.V. (MBIA Mexico) reflects the formal and informal support from MBIA Corp., in the context of the insurer's limited size and standalone financial profile. Its rating is expected to remain closely linked to that of its parent. Ratings Rationale: National Public Finance Guarantee The Baa1 IFS rating, positive outlook, of National reflects the insurer's improved credit profile following the repayment of the loan from its weaker affiliate, MBIA Corp., and the termination of the litigation related to the group's 2009 restructuring. While National's insured portfolio is expected to generate losses that are well covered by its claims paying resources, its business position is characterized by a lack of participation in the market for the last five years, and by its continued affiliation with the much weaker MBIA Corp. The positive outlook reflects the trend of developments at MBIA Corp., which would be favorable to National if it were to continue. Ratings Rationale: MBIA UK The B1 IFS rating, positive outlook, of MBIA UK reflects its meaningful stand-alone financial resources relative to its insured risks, as well as its limited standalone business profile and pressures stemming from its weaker parent, MBIA Corp. MBIA Corp.'s support of MBIA UK, in the form of excess of loss reinsurance and net worth maintenance agreements, is subordinated to insured claims and thus of limited value, in Moody's opinion, due to MBIA Corp.'s weak credit profile. Ratings Rationale: MBIA Inc. The Ba3 senior unsecured debt rating, positive outlook, of MBIA Inc. reflects the improving credit profile of its subsidiaries and the expected resumption of dividend payments from National. Its high debt burden and meaningful asset risks, reflecting the deterioration of its wind-down operations, remain a distinct weakness, however, resulting in its positioning five rating notches below the IFS rating of its lead insurance subsidiary, National, rather than the more typical three notches. What Could Change the Ratings Up Or Down? National's rating could be raised if the insurer were able to establish a more solid market position, marked by underwriting of high quality risks at attractive prices. Meaningful improvements at MBIA Corp., either through risk reduction or capital enhancement would also be a positive rating driver for National, as well as for MBIA Corp. itself, as those improvements would reduce the contingent risk of a call on National's resources. The ratings of MBIA Corp. could be downgraded if the insurer were to experience greater than expected claims that would cause liquidity stress, but the ratings could be upgraded if there were material risk reduction in the insurer's portfolio due to improving credit trends, amortization or commutations. Rating List Upgrades: Issuer: MBIA Inc. Senior Unsecured Regular Bond, Upgraded to Ba3, from Caa1 Issuer: MBIA Insurance Corp. Insurance Financial Strength, Upgraded to B3, from Caa2 Subordinate Surplus Notes, Upgraded to Ca (hyb), from C (hyb) Issuer: National Public Finance Guarantee Corp. Insurance Financial Strength, Upgraded to Baa1, from Baa2 Issuer: MBIA UK Insurance Limited Insurance Financial Strength, Upgraded to B1, from B3 Issuer: MBIA Mexico S.A de C.V. Insurance Financial Strength, Upgraded to B3, from Caa2, and to B1.mx from Caa2.mx Affirmations: Issuer: MBIA Insurance Corporation Pref. Stock Preferred Stock, Affirmed C (hyb) Non-cumulative Preferred Stock, Affirmed C (hyb) Outlook Actions: Issuer: MBIA Inc. Outlook, Changed To Positive from Rating under Review for Downgrade Issuer: MBIA Insurance Corporation Outlook, Changed To Positive from Rating under Review for Downgrade Issuer: MBIA UK Insurance Limited Outlook, Changed To Positive from Negative Issuer: National Public Finance Guarantee Corp. Outlook, Changed To Positive from Rating under Review for Downgrade Issuer: MBIA Mexico S.A de C.V. Outlook, Changed To Positive from Developing Treatment of Wrapped Transactions Moody's ratings on securities that are guaranteed or "wrapped" by a financial guarantor are generally maintained at a level equal to the higher of the following: a) the rating of the guarantor (if rated at the investment grade level); or b) the published underlying rating (and for structured securities, the published or unpublished underlying rating). Moody's approach to rating wrapped transactions is outlined in Moody's special comment "Assignment of Wrapped Ratings When Financial Guarantor Falls Below Investment Grade" (May, 2008); and Moody's November 10, 2008 announcement "Moody's Modifies Approach to Rating Structured Finance Securities Wrapped by Financial Guarantors". As a result of this rating action, the Moody's-rated securities that are guaranteed or "wrapped" by MBIA Corp., National, MBIA Mexico, and MBIA UK are upgraded, except those with equal or higher published underlying ratings (and for structured finance securities, except those with equal or higher published or unpublished underlying ratings). The principal methodology used in this rating was Moody's Rating Methodology for the Financial Guaranty Insurance Industry published in September 2006. * Canadian Life Insurers Reap Rewards of Wealth Management Sales ---------------------------------------------------------------- Wealth management sales in both North America and Asia were important sources of growth for the big three Canadian insurers during the first quarter of 2013, says Moody's Investors Service in a new report on first quarter results for the 3 largest Canadian life insurers. "Asian franchises yielded double-digit wealth sales growth and continued to provide valuable exposure to higher growth rates and expanding markets," says David Beattie in the report "Q1 2013 Canadian Insurance Results: Wealth Management Leads Top Line Momentum; Market Impacts Relatively Benign." "Profitability lags the top line momentum as Canadian insurers active in Asia are investing heavily in these businesses," says Beattie. "At some point we expect higher levels of profitability to emerge." The growth in wealth management comes as the big three insurers-- Manulife Financial Corporation, Sun Life Financial and Great West Lifeco - carry out planned reductions in the sale of products with policyholder friendly guarantee features, which dampened their results. Such products include segregated funds and universal life. Spread compression, declining investment income and the costs of hedging, however, is creating pressure on earnings, which may increase insurers' appetite for risk, although there is yet no evidence of increased credit provisions or impairments. "The challenge of how to return to pre-crisis levels of profitability absent a rise in interest rates remains the most significant strategic dilemma facing the sector," says Beattie. Moody's says the first quarter passed uneventfully for the big three Canadian insurers in terms of impact from the financial markets, with the exception of Manulife Financial Corporation (MFC)'s C$350 million charge arising from interest rate exposure, which was partially offset by a gain on equity markets exposure. * ILR Applauds Passage of Asbestos Trust Transparency Bill ---------------------------------------------------------- Harold Kim, executive vice president of the U.S. Chamber Institute for Legal Reform (ILR), made the following statement on May 21 applauding the House Judiciary Committee's passage of the "Furthering Asbestos Claim Transparency (FACT) Act of 2013" (H.R. 982). The legislation would require asbestos personal injury settlement trusts authorized by federal bankruptcy law to disclose information on their claims on a quarterly basis and respond to information requests from parties to asbestos litigation. "The asbestos compensation system should not allow fraud and abuse to drain the funds available to deserving claimants. Exploitation of the system also saddles solvent companies, their shareholders, and employees with paying unjust claims. "Asbestos bankruptcy trusts have operated without adequate oversight for too long. Courts around the country have uncovered examples in which plaintiffs' lawyers have filed inconsistent or fraudulent claims with multiple trusts and in the court system. The bipartisan FACT Act would discourage such wrongdoing. "We commend the House Judiciary Committee for passing this important legislation, and urge both the House and Senate to swiftly follow suit." ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels. The U.S. Chamber of Commerce -- http://www.uschamber.com-- is the world's largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations. * National Credit Default Rates Down in April 2013, Report Shows ---------------------------------------------------------------- Data through April 2013, released on May 21 by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed a decrease in national default rates during the month. The national composite hit its post-recession low of 1.42% in April, down from 1.50% in March. The first mortgage default rate moved down to 1.31% in April from 1.41% in March. The auto loan default rate posted a 1.07% rate in April, down from its 1.11% March level. The bank card default rate increased in April, it posted 3.61% in April vs. 3.51% in March. "Consumer financial condition continues to improve", says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. "Continued improvements in the economy and declining consumer debt are resulting in lower consumer default rates for mortgages and automobiles. Bank cards, where default patterns are more volatile, saw a small uptick in the latest month. While unemployment remains elevated, these data suggest that for many consumers the recession is definitely behind us. "All five cities saw lower default rates in April. Chicago, Los Angeles and Miami hit new post-recession lows. Miami was down by 0.72 percentage points since March and 1.00 percentage point since February 2013. Dallas was down by 0.20 percentage points, Chicago by 0.14, and Los Angeles by 0.12 percentage points. New York was marginally down by 0.01 percentage point. Miami had the highest default rate at 2.21% and Dallas - the lowest at 1.00% among the five cities. All five cities remain below default rates they posted a year ago, in April 2012." The table below summarizes the April 2013 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision. S&P/Experian Consumer Credit Default Indices National Indices Index April 2013 March 2013 April 2012 Index Level Index Level Index Level Composite 1.42 1.50 1.86 First Mortgage 1.31 1.41 1.76 Second Mortgage 0.62 0.69 0.93 Bank Card 3.61 3.51 4.49 Auto Loans 1.07 1.11 1.07 Source: S&P/Experian Consumer Credit Default Indices Data through April 2013 The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs: Metropolitan April 2013 March 2013 April 2012 Statistical Area Index Level Index Level Index Level New York 1.78 1.79 1.78 Chicago 1.70 1.83 2.21 Dallas 1.00 1.20 1.25 Los Angeles 1.36 1.48 1.88 Miami 2.21 2.93 3.14 Source: S&P/Experian Consumer Credit Default Indices Data through April 2013 About S&P Dow Jones Indices S&P Dow Jones Indices LLC -- http://www.spdji.com-- is a part of McGraw Hill Financial. It is the world's largest, global resource for index-based concepts, data and research. About Experian Experian -- http://www.experianplc.com-- is a global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft. Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2013 was US$4.7 billion. Experian employs approximately 17,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil. * Uptick in REIT Conversions Drive Concerns Over REIT Status ------------------------------------------------------------ A surge in companies filing for REIT status could be leading to an increase in scrutiny over which companies should qualify. According to a report issued by BDO USA, LLP, a leading accounting and consulting organization, failure to qualify as a REIT is among the top risks for REITs, with 100 percent of REITs analyzed citing it. While general economic conditions are also cited by 100 percent of REITs as a key risk consideration, the threat of property illiquidity decreased from 89 percent to 82 percent, which may indicate that the real estate industry is turning a corner. The 2013 BDO RiskFactor Report for REITs, which analyzes the most recent SEC 10-K filings for the 100 largest publicly traded REITs in the U.S., finds that access to capital continues to be a top risk; however, this year only 94 percent of REITs cited it as a risk versus 97 percent last year. This slight decrease could further underscore a positive change in market conditions. Strong competition for lessees and prime real estate, on the other hand, is more of a concern this year for REITs than the previous year, jumping in rank from fifth to third. REITs also continue to cite indebtedness as a top risk (85 percent), which may be a sign that many REITs have underlying properties that have unfavorable loan to value ratios. "Competition for tenants across the commercial and residential real estate sectors is something to watch this year. On the residential side, the multi-family segment has led most of the discussion around market improvement, but, as housing buys pick up, rental properties could suffer," said Stuart Eisenberg, partner and Real Estate practice leader at BDO USA, LLP. "The commercial space continues to struggle with high competition due to conservative growth and spending practices." Additional findings from the 2013 BDO RiskFactor Report for REITs include: -- New Regulations Threaten Healthcare Real Estate, While Retail Could Be Past Its Crisis. In recent months, health care real estate was identified as a bright spot in the industry. However, healthcare policy may create a cost-cutting environment that could negatively impact the sector. This could be contributing to the jump in REITs citing healthcare reform as a risk (24 percent, up from 14 percent). Conversely, the retail real estate space, which faced many years of low consumer spending coupled with competition from online retailers, could be heading into a period of recovery. Only 29 percent of REITs note the loss of a major anchor or tenant as a risk, compared to 31 percent last year. -- Climate Change and Natural Disasters Raise Concerns over Insurance. Hurricane Sandy exposed many businesses to staggering financial loss as a result of long-term business interruption as well as massive property damage. This may be the impetus for 90 percent of REITs citing natural disasters as a top threat, up 7 percent from last year. This also is likely driving REIT concern over insurance premiums as well as the risk of being under or uninsured for liabilities (87 percent). -- Concern over Cyber Security Shows Significant Increase. The number of REITs that cite security breaches as a concern jumped from 25 percent to 39 percent. While this risk falls last in the top twenty-five risks highlighted above, the potential loss as a result of a breach can be severe, as it exposes businesses to a number of potential risks, including liability claims, reputational damage and regulatory penalties. It is likely that the financial impact of such an event as well as the increased prevalence of attacks could be driving this change in sentiment. -- Favorable Interest Rate Environment Has Risky Fate. Similar to last year, REITs continue to be an attractive investment, due to their high performing dividend yield and a low interest rate environment. Despite a slight decrease in the number of REITs citing an increase in interest rates as a risk (88 percent, down from 92 percent), the increase in interest rates could have a fundamental impact on cash flow and distributions. About BDO BDO -- http://www.bdo.com-- is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through 45 offices and more than 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of 1,204 offices in 138 countries. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Gregory Roos Bankr. N.D. Cal. Case No. 13-31123 Chapter 11 Petition filed May 9, 2013 In re BRAE, Inc. Bankr. N.D. Fla. Case No. 13-40292 Chapter 11 Petition filed May 9, 2013 See http://bankrupt.com/misc/flnb13-40292.pdf represented by: Allen Turnage, Esq. Law Office of Allen Turnage E-mail: service@turnagelaw.com In re Greencook Services, LLC Bankr. S.D. Fla. Case No. 13-20846 Chapter 11 Petition filed May 9, 2013 See http://bankrupt.com/misc/flsb13-20846.pdf Represented by: Robert C Furr, Esq. Furr & Cohen E-mail: bnasralla@furrcohen.com In re Novamise Fleury Bankr. S.D. Fla. Case No. 13-20889 Chapter 11 Petition filed May 9, 2013 In re Hollinshead Properties, Inc. Bankr. C.D. Ill. Case No. 13-70957 Chapter 11 Petition filed May 9, 2013 See http://bankrupt.com/misc/ilcb13-70957.pdf represented by: Jeffrey D Richardson, Esq. The Law Office of Jeffrey D. Richardson E-mail: jdrdec@aol.com In re Christos Dimas Bankr. N.D. Ill. Case No. 13-19818 Chapter 11 Petition filed May 9, 2013 In re John Crane Bankr. D. Md. Case No. 13-18223 Chapter 11 Petition filed May 9, 2013 In re Eduardo Cortes Bankr. D.N.J. Case No. 13-20217 Chapter 11 Petition filed May 9, 2013 In re Lucia's Day Care Center, LLC dba Kinder College Bankr. D.N.J. Case No. 13-20239 Chapter 11 Petition filed May 9, 2013 See http://bankrupt.com/misc/njb13-20239.pdf represented by: Leonard S. Singer, Esq. Zazella & Singer, Esqs. E-mail: zsbankruptcy@gmail.com In re Alice Jimenez Bankr. S.D.N.Y. Case No. 13-11517 Chapter 11 Petition filed May 9, 2013 In re Arcangelo DiOdoardo Bankr. E.D. Pa. Case No. 13-14147 Chapter 11 Petition filed May 9, 2013 In re Vikram Patel Bankr. W.D. Tenn. Case No. 13-24981 Chapter 11 Petition filed May 9, 2013 In re Olympia Petroleum Management, LLC Bankr. N.D. Tex. Case No. 13-42269 Chapter 11 Petition filed May 9, 2013 See http://bankrupt.com/misc/txnb13-42269.pdf represented by: David R. Gibson, Esq. The Gibson Law Group E-mail: my.lawyer@sbcglobal.net In re David Barker Bankr. D. Ariz. Case No. 13-07885 Chapter 11 Petition filed May 10, 2013 In re Kathleen Gross Bankr. D. Ariz. Case No. 13-07910 Chapter 11 Petition filed May 10, 2013 In re Roy Spiller Bankr. E.D. Ark. Case No. 13-12760 Chapter 11 Petition filed May 10, 2013 In re First Step Realty, Inc. Bankr. E.D. Ark. Case No. 13-12767 Chapter 11 Petition filed May 10, 2013 See http://bankrupt.com/misc/areb13-12767.pdf represented by: Sheila F. Campbell, Esq. SHEILA CAMPBELL, P.A. E-mail: campbl@sbcglobal.net In re George Lanting Bankr. E.D. Cal. Case No. 13-13388 Chapter 11 Petition filed May 10, 2013 In re Your Keys Realty, LLC Bankr. D. Conn. Case No. 13-20951 Chapter 11 Petition filed May 10, 2013 See http://bankrupt.com/misc/ctb13-20951.pdf represented by: Peter L. Ressler, Esq. GROOB RESSLER & MULQUEEN, P.C. E-mail: ressmul@yahoo.com In re Robert Smith Bankr. M.D. Fla. Case No. 13-02919 Chapter 11 Petition filed May 10, 2013 In re Greater Mount Pleasant Missionary Baptist Church, Inc. Bankr. N.D. Fla. Case No. 13-40295 Chapter 11 Petition filed May 10, 2013 See http://bankrupt.com/misc/flnb13-40295.pdf represented by: Thomas B. Woodward, Esq. THOMAS B. WOODWARD, ATTY. E-mail: woodylaw@embarqmail.com In re Linda Henderson Bankr. M.D. Ga. Case No. 13-10594 Chapter 11 Petition filed May 10, 2013 In re Eco Coastal Homes, Inc. Bankr. D. Mass. Case No. 13-12799 Chapter 11 Petition filed May 10, 2013 See http://bankrupt.com/misc/mab13-12799.pdf Filed as Pro Se In re Bucknell Transmissions, Inc. Bankr. D. Mass. Case No. 13-30520 Chapter 11 Petition filed May 10, 2013 See http://bankrupt.com/misc/mab13-30520.pdf represented by: Steven Weiss, Esq. SHATZ, SCHWARTZ & FENTIN, P.C. E-mail: sweiss@ssfpc.com In re Dad's Wine Bar, LLC dba Freakin' Frog Whisky Attic Bankr. D. Nev. Case No. 13-14130 Chapter 11 Petition filed May 10, 2013 See http://bankrupt.com/misc/nvb13-14130.pdf represented by: Jonathan B. Goldsmith, Esq. GOLDSMITH & ASSOCIATES E-mail: jonathan@vegaslawsite.com In re Ralph Coppola Bankr. D. Nev. Case No. 13-50931 Chapter 11 Petition filed May 10, 2013 In re Centro de Ayuda Social, Inc. Bankr. D. P.R. Case No. 13-03820 Chapter 11 Petition filed May 10, 2013 See http://bankrupt.com/misc/prb13-03820.pdf represented by: Francisco J. Ramos, Esq. E-mail: fjramos@coqui.net In re Aluve Restaurants, Inc. dba The Taco Maker (Sabana Grande) Bankr. D. P.R. Case No. 13-03849 Chapter 11 Petition filed May 10, 2013 See http://bankrupt.com/misc/prb13-03849.pdf represented by: Nydia Gonzalez Ortiz, Esq. SANTIAGO & GONZALEZ E-mail: bufetesg@gmail.com In re Robert Robinson Bankr. E.D. Va. Case No. 13-71784 Chapter 11 Petition filed May 10, 2013 In re Kasia Kowalski Bankr. W.D. Wis. Case No. 13-12370 Chapter 11 Petition filed May 10, 2013 In re George Hayduke Bankr. D. Ariz. Case No. 13-8030 Chapter 11 Petition filed May 13, 2013 In re Precision Real Property, LLC Bankr. D. Ariz. Case No. 13-08025 Chapter 11 Petition filed May 13, 2013 See http://bankrupt.com/misc/azb13-8025.pdf represented by: Mark J. Giunta, Esq. Law Office Of Mark J. Giunta E-mail: markgiunta@giuntalaw.com In re Ballybunion Investments, LLC Bankr. N.D. Cal. Case No. 13-31157 Chapter 11 Petition filed May 13, 2013 See http://bankrupt.com/misc/canb13-31157.pdf represented by: Kayla Grant, Esq. Law Office of Kayla Grant E-mail: kayla.grant@gmail.com In re CJG Ventures, LLC Bankr. N.D. Cal. Case No. 13-52612 Chapter 11 Petition filed May 13, 2013 See http://bankrupt.com/misc/canb13-52612p.pdf See http://bankrupt.com/misc/canb13-52612c.pdf Filed pro se In re Ultiprf, LLC Bankr. N.D. Cal. Case No. 13-52602 Chapter 11 Petition filed May 13, 2013 See http://bankrupt.com/misc/canb13-52602.pdf represented by: Christopher Alliotts, Esq. Law Offices of Christopher Alliotts E-mail: Chris@DebtFreeMonterey.com In re Jack White Entertainment, LLC dba Little Monkey Bizness Bankr. D. Colo. Case No. 13-18067 Chapter 11 Petition filed May 13, 2013 See http://bankrupt.com/misc/cob13-18067p.pdf See http://bankrupt.com/misc/cob13-18067c.pdf represented by: Jeffrey S. Brinen, Esq. Kutner Miller Brinen, P.C. E-mail: jsb@kutnerlaw.com In re Management R Us, Inc. Bankr. S.D. Fla. Case No. 13-21140 Chapter 11 Petition filed May 13, 2013 See http://bankrupt.com/misc/flsb13-21140.pdf represented by: Brian K. McMahon, Esq. E-mail: briankmcmahon@gmail.com In re Abercorn Street Parking, LLC Bankr. S.D. Ga. Case No. 13-40851 Chapter 11 Petition filed May 13, 2013 See http://bankrupt.com/misc/gasb13-40851p.pdf See http://bankrupt.com/misc/gasb13-40851c.pdf represented by: C. James McCallar, Jr., Esq. McCallar Law Firm E-mail: mccallar@mccallarlawfirm.com In re Douglas Heitmeier Bankr. E.D. La. Case No. 13-11320 Chapter 11 Petition filed May 13, 2013 In re Franco Smiroldo Bankr. D. Md. Case No. 13-18381 Chapter 11 Petition filed May 13, 2013 In re Gregory Drennan Bankr. D. Md. Case No. 13-18321 Chapter 11 Petition filed May 13, 2013 In re Julie Drennan Bankr. D. Md. Case No. 13-18321 Chapter 11 Petition filed May 13, 2013 In re Lawrence DuBuske Bankr. D. Mass. Case No. 13-12837 Chapter 11 Petition filed May 13, 2013 In re Jeanne Vandecar Bankr. E.D. Mich. Case No. 13-49741 Chapter 11 Petition filed May 13, 2013 In re Richard Vandecar Bankr. E.D. Mich. Case No. 13-49741 Chapter 11 Petition filed May 13, 2013 In re Joseph Davey Bankr. D.N.H. Case No. 13-11248 Chapter 11 Petition filed May 13, 2013 In re BlinkGroup Management LP Bankr. E.D.N.Y. Case No. 13-72556 Chapter 11 Petition filed May 13, 2013 See http://bankrupt.com/misc/nyeb13-72556.pdf Filed pro se In re Donald Macina Bankr. N.D.N.Y. Case No. 13-11233 Chapter 11 Petition filed May 13, 2013 In re Dwayne Handley Bankr. S.D.N.Y. Case No. 13-36105 Chapter 11 Petition filed May 13, 2013 In re Settlers Ridge No. 3, L.P. dba StonePepper's Grill Bankr. W.D. Pa. Case No. 13-22082 Chapter 11 Petition filed May 13, 2013 See http://bankrupt.com/misc/pawb13-22082.pdf represented by: Robert O. Lampl, Esq. E-mail: rol@lampllaw.com In re Mushtaq Ahmed Bankr. C.D. Cal. Case No. 13-22572 Chapter 11 Petition filed May 14, 2013 In re Wasilk Klimenko Bankr. C.D. Cal. Case No. 13-22578 Chapter 11 Petition filed May 14, 2013 In re Jennifer Mumford Bankr. D. D.C. Case No. 13-00306 Chapter 11 Petition filed May 14, 2013 In re William Brooks Bankr. S.D. Ga. Case No. 13-10860 Chapter 11 Petition filed May 14, 2013 In re Ronald Odom Bankr. N.D. Ga. Case No. 13-11260 Chapter 11 Petition filed May 14, 2013 In re Solidyne Corporation Bankr. N.D. Ill. Case No. 13-20252 Chapter 11 Petition filed May 14, 2013 See http://bankrupt.com/misc/ilnb13-20252.pdf represented by: John J. Lynch, Esq. LAW OFFICES OF JOHN J LYNCH, P.C. E-mail: jjlynch@jjlynchlaw.com In re American Artisan & Traditional Homes, Inc. Bankr. S.D. Iowa Case No. 13-01410 Chapter 11 Petition filed May 14, 2013 Filed as Pro Se In re Ian James Bankr. M.D. La. Case No. 13-10658 Chapter 11 Petition filed May 14, 2013 In re Jaime Soto Bankr. D. Nev. Case No. 13-14219 Chapter 11 Petition filed May 14, 2013 In re Patriot Automotive, Inc. Bankr. D. N.J. Case No. 13-20616 Chapter 11 Petition filed May 14, 2013 See http://bankrupt.com/misc/njb13-20616.pdf represented by: Elissa Westbrook Smith, Esq. MCDOWELL POSTERNOCK LAW, P.C. E-mail: esmith@mcdowellposternocklaw.com In re Golf USA, Inc. Bankr. W.D. Okla. Case No. 13-12248 Chapter 11 Petition filed May 14, 2013 See http://bankrupt.com/misc/okwb13-12248.pdf represented by: Douglas N. Gould, Esq. DOUGLAS N. GOULD, PLC E-mail: dg@dgouldlaw.com In re Woodland Ave Real Estate, LLC Bankr. E.D. Pa. Case No. 13-14339 Chapter 11 Petition filed May 14, 2013 See http://bankrupt.com/misc/paeb13-14339.pdf represented by: David B. Smith, Esq. SMITH KANE, LLC E-mail: dsmith@smithkanelaw.com In re Luis Alonso Ballate Bankr. D. P.R. Case No. 13-03914 Chapter 11 Petition filed May 14, 2013 In re 4 Estrellas Luminosas, Inc. Bankr. D. P.R. Case No. 13-03925 Chapter 11 Petition filed May 14, 2013 See http://bankrupt.com/misc/prb13-03925.pdf represented by: MIRIAM SOCORRO LOZADA RAMIREZ, Esq. E-mail: miriamlozada@gmail.com In re Collin Brown Bankr. D. S.C. Case No. 13-02868 Chapter 11 Petition filed May 14, 2013 In re Haywood Enterprises, Inc. dba Eagle Sheet Metal Bankr. E.D. Va. Case No. 13-71835 Chapter 11 Petition filed May 14, 2013 See http://bankrupt.com/misc/vaeb13-71835.pdf represented by: Kelly Megan Barnhart, Esq. ROUSSOS, LASSITER, GLANZER & BARNHART E-mail: barnhart@rlglegal.com - and ? Robert V. Roussos, Esq. ROUSSOS, LASSITER, GLANZER & BARNHART E-mail: roussos@rlglegal.com In re Patrick Shockley Bankr. W.D. Wash. Case No. 13-14482 Chapter 11 Petition filed May 14, 2013 In re OCLA, LLC Bankr. E.D. Wis. Case No. 13-26681 Chapter 11 Petition filed May 14, 2013 See http://bankrupt.com/misc/wieb13-26681.pdf represented by: Thomas J. Kasen, Esq. KASEN LAW OFFICES S.C. E-mail: kasenlawoff@msn.com ********* 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, 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 ***