/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130620.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, June 20, 2013, Vol. 17, No. 169 Headlines ADCARE HEALTH: NYSE MKT Approves Listing Compliance Plan ADEPT TECHNOLOGIES: July 23 Hearing to Confirm Plan AFA INVESTMENT: Cash Collateral Termination Date Today AIR CANADA: Fitch Rates New $1 Billion Secured Term Loan at 'BB-' AIR CANADA: Moody's Rates Proposed $1 Billion Term Debt 'B2' AIR CANADA: S&P Assigns 'B' Rating to $1-Bil. Term Loan Due 2019 ALIXPARTNERS LLP: Moody's Lowers CFR to 'B2'; Outlook Stable AMERICAN AIRLINES: Spars with U.S. Bank Over Make-Whole Payments AMERICAN EQUITY: Fitch Rates $250MM Unsecured Notes 'BB' AMERICAN EQUITY: S&P Affirms 'BB+' Counterparty Credit Rating AMERICAN EUROPEAN: A.M. Best Cuts Finc'l. Strength Rating to 'B-' ARMORWORKS ENTERPRISES: Files for Chapter 11 With Plan ARMORWORKS ENTERPRISES: Sec. 341 Creditors' Meeting on July 23 ARMORWORKS ENTERPRISES: Proposes G&K and MCA as Professionals ARMORWORKS ENTERPRISES: Proposes Aug. 20 Claims Bar Date ATP OIL: Lenders Raises Cash Offer by $10 Million ATWOOD OCEANICS: Moody's Assigns 'Ba3' Rating to $150MM Notes ATWOOD OCEANICS: S&P Affirms 'BB' Rating to Sr. Unsecured Notes B.R. BROOKFIELD: Dist. Court Upholds Ruling on Integrity Claim BASHAS' INC: Ariz. Court Decertifies Working Condition Claim BLUE SPRINGS: Court Confirms Amended Plan BOULDER BRANDS: Moody's Assigns 'B1' Ratings to $320MM Debt BRIGHTSTAR CORP: Moody's Changes Outlook on 'Ba3' CFR to Negative BROOKFIELD RESIDENTIAL: Moody's Rates New $400MM Sr. Notes 'B2' BROOKFIELD RESIDENTIAL: S&P Rates $400MM Sr. Unsec. Notes 'BB-' BUILDERS GROUP: Section 341(a) Meeting Scheduled for July 19 CIMASA PROPERTIES: Motel Owner Files Ch.11 to Avoid Foreclosure CONGROLEUM CORP: Integrity Insurance Ducks Asbestos Coverage COUNTRYWIDE INSURANCE: A.M. Best Affirms 'C+' Fin. Strength Rating DALLAS ROADSTER: Court to Consider Plan Outline on July 22 DEEP PHOTONICS: Plans to Use Litigation Profits to Pay Creditors DELTA AIR: Fitch Affirms 'B+' Issuer Default Rating DEMCO INC: Creditors Have Until Aug. 1 to File Proofs of Claim DETROIT, MI: S&P Lowers Ratings on 3 COPs to D on Debt Non-Payment DETROIT, MI: Recovery Plan Dips Into Pensions to Keep City Afloat DESERT LAND: Gonzalez Loses Bid for Preliminary Injunction DOGWOOD PROPERTIES: Seeks Further Use of M&F Cash Collateral DRAGON BRIGHT: Incurs $908K Net Loss in 2012 EAST COAST BROKERS: Hearing on Case Dismissal Continued to June 24 EAST COAST BROKERS: Taps Warren Averett as Accountants EASTMAN KODAK: Creditors Agree to Backstop $406MM Rights Offering EASTMAN KODAK: Moxtek Opposes UK Pension Fund Agreement ENDO HEALTH: S&P Lowers CCR to 'BB-'; Outlook Stable ENRON CORP: Hearing Friday on Reduction of Skilling's Jail Time EXIDE TECHNOLOGIES: Consumer Watchdog Wants Vernon Plant Closed FHC HEALTH: Moody's Rates Proposed $165-Mil. Loans 'B1' FHC HEALTH: S&P Assigns 'BB-' Rating to Senior Secured Facilities FIBERFORGE CORPORATION: Shuts Operations, Starts Liquidation FR 160: Court Denies Motion for Relief of Stay, Case Dismissal FREEDOM MEDICAL: Defendants Win Summary Judgment on RICO Claims FREEPORT RENAISSANCE: Mall Operations to Continue FRIENDSHIP DAIRIES: Wants Solicitation Period Moved Until July 31 HAWAIIAN TELECOM: Clawback Suit Against Ex-CEO Goes to Trial HAWKER BEECHCRAFT: May Assume NORDAM Agreements HAWKER BEECHCRAFT: Newby's Discrimination Suit Dismissed HELLER ERHMAN: Judge Calls Out Filing "Flurry" HEMCON MEDICAL: Court Enters Discharge Order HILLTOP FARMS: Plan Confirmation Hearing Set for July 25 HJ HEINZ: S&P Lowers Corporate Credit Rating to 'BB-' HOWREY LLP: Settles With Dickstein, Novak Druce, Wilson Sonsini HW HEARTLAND: Settled With NBH Bank; Chapter 11 Case Dismissed IFA INSURANCE: A.M. Best Cuts Fin. Strength Rating to 'B-' IKARIA INC: S&P Lowers Rating on Senior Secured Facilities to 'B' IMAGEPOINT INC: Suit Against BFS Retail Goes to N.D. Ill. Court INTERFAITH MEDICAL: Merger With Brooklyn Hospital Hits Impasse INTERSTATE PROPERTIES: Cash Collateral Termination Date Extended INTERSTATE PROPERTIES: Has $14MM Loan; Wants Case Dismissed JAMES DALEY: Wins Test Case on Exemption for IRA JAMESTOWN LLC: No Unsecured Creditors Who Are Not Insiders JEFFERSON COUNTY, AL: Debt Plan Is Costly JHCI ACQUISITION: S&P Puts 'CCC+' Rating on CreditWatch Positive JONES GROUP: Moody's Downgrades CFR to 'Ba3'; Outlook Stable JOURNAL REGISTER: Expects to File Liquidating Plan JVMW PROPERTIES: Secured Creditor Wants Collateral Use Prohibited KALETA CAPITAL: Receiver Wins Approval of Accord with Insurers LAGUNA BRISAS: Receiver May Access Cash Collateral Until July 31 LAGUNA BRISAS: Orantes Firm Replaces Jonathan Hayes as Counsel LAST MILE: Has Green Light to Sell Assets to Lender LAST MILE: Emmet Marvin Replaces Lowenstein as Counsel LEED CORP: Chapter 11 Case Closed LIFE UNIFORM: U.S. Trustee Appoints 5-Member Creditors Panel MALUHIA DEVELOPMENT: Court Dismisses Bankruptcy Case MAXCOM TELECOM: Misses Interest Payment on 11% Senior Notes MFM DELAWARE: Wants to Hire Rosner Law Group as Bankr. Counsel MFM DELAWARE: Wants to Employ King & Spalding as Counsel MJS LAS CROABAS: FDIC-R Has Green Light to Foreclose MOOG INC: S&P Affirms 'BB' CCR & Raises Debt Rating to 'BB' MOTORCAR PARTS: Ernst & Young Raises Going Concern Doubt MTS LAND: Aug. 26 Confirmation Hearing on Third Amended Plan MUD KING: Hoover Slovacek Approved as Bankruptcy Counsel NATIONAL LITHO: Court Grants DIP Lender Superpriority Admin Claim NEW ENGLAND COMPOUNDING: Dist. Court Clarifies Preservation Order ONCURE HOLDINGS: Gets $25MM Bankruptcy Loan Greenlighted For Now ORCHARD SUPPLY: Gets Interim Nod for $176MM DIP Loan ORCHARD SUPPLY: Moody's Lowers CFR to Caa3 After Ch. 11 Filing PACERS INC: Cal. App. Ct. Upholds Counsel Disqualification PACIFIC COURIER: Gladfelder Sexual Harassment Suit Narrowed PARKWAY ACQUISITION: Parkway Hospital Lot Owner in Ch. 11 PATRIOT COAL: In Talks With Aurelius, Knighthead for Exit Funds PIPELINE DATA: Settlement Approved; Plan Quickly Filed PREMIER PAVING: May Use Wells Fargo's Cash Collateral Until July 1 PREMIER PAVING: Disclosure Statement Hearing Set for July 1 RACE POINT: S&P Assigns 'B+' CCR to 4 RPP Co-Borrowers RAM OF EASTERN: Plan Exclusivity to Expire Today RAM OF EASTERN: Gets Final OK to Use Cash Collateral RELIANCE GROUP: Deloitte Wins Dismissal of Lawsuit RESIDENTIAL CAPITAL: Proposes NewOak Capital as Consultant RESIDENTIAL CAPITAL: Use of AFI Cash Collateral Limited RESIDENTIAL CAPITAL: U.S. Trustee Supports Motion to Unseal RESIDENTIAL CAPITAL: Stipulation on MortgageIT Issue Approved RG STEEL: Seeks Court Approval to Hire APS International as Agent RHODE ISLAND: Moody's May Cut Ratings on 38 Studios Debt Default RHYTHM AND HUES: Settles Dispute With JS Communications RHYTHM AND HUES: Hires O'Connor Davies as Bankruptcy Accountants RHYTHM AND HUES: Plan Outline Deadline Extended to July 31 RITE AID: S&P Assigns 'CCC' Rating to $400MM Sr. Unsecured Notes RIVER CANYON: District Court Declines to Stay Confirmation Hearing ROTECH HEALTHCARE: Creditors Have Until July 12 to File Claims ROTECH HEALTHCARE: Creditors Committee Has OK to Retain Buchanan ROTECH HEALTHCARE: Has Court OK to Employ Deloitte as Auditor ROTECH HEALTHCARE: Creditors Panel Can Hire Grant Thornton ROTECH HEALTHCARE: Objects to Proposed Moelis Retention ROTECH HEALTHCARE: Equity Holders Lose Bid to Hire Moelis ROTHSTEIN ROSENFELDT: Trustee Wants Investors' Evidence Excluded SABANA DEL PALMAR: FDIC-R Has Green Light to Foreclose SAN DIEGO HOSPICE: Government Files $112 Million Claim SBM CERTIFICATE: SEC Wants Chapter 11 Trustee SCOOTER STORE: Numotion Offers Service to Ex-Alliance Customers SEA TRAIL: Chinese Investor Wins Auction With $8.5MM Offer SEVEN COUNTIES: Proofs of Claim Due Aug. 8 SEVEN COUNTIES: Appointment of Patient Care Ombudsman Waived SEVEN COUNTIES: Court DQs Lloyd & McDaniel as KERS' Counsel SPECIALTY PRODUCTS: Wants $1-Bil. Asbestos Appeal in 3rd Circ. SUGARLEAF TIMBER: Wants to Use Farm Credit's Cash Collateral SUPERMEDIA INC: Verizon Finishes Off Creditor Suit Over Spinoff T SORRENTO: Has OK to Hire Deverick to Appraise Real Property T SORRENTO: May Hire Dohmeyer to Testify on Interest Rates T SORRENTO: Files Second Amended Plan, Modifies Claims Treatment TOMSTEN INC: Has Court's Nod to Hire Baker Tilly as Accountant TOMSTEN INC: U.S. Trustee Forms Five-Member Committee TOMSTEN INC: Committee May Hire CBIZ Accounting as Fin'l Advisor TOMSTEN INC: Committee Taps Faegre Baker Daniels as Counsel TOMSTEN INC: Has OK to Hire Leonard Street as Corporate Counsel TOMSTEN INC: May Hire Lighthouse Management as Fin'l Consultant TOUSA INC: Bankruptcy Watchdog Balks at Liquidation Plan TPO HESS: Testing Bang Offer at July 17 Auction TRANSDIGM INC: Dividend Payout Triggers Moody's Downgrade Review TRIBUNE CO: Could Owe $500MM in Taxes on Cubs, Newsday Deals UNITED PROTECTION: Lack of Funding Prompts Bankruptcy Filing UNITEK GLOBAL: Standstill Period Extended Until June 30 VELATEL GLOBAL: Incurs $6.8 Million Net Loss in First Quarter VERTIS HOLDINGS: Plan Filing Deadline Extended Until Aug. 6 VERTIS HOLDINGS: Has Authority to Employ GA Keen as Broker VINTAGE CONDOMINIUM: Bank Wants Chapter 11 Trustee Appointed VINTAGE CONDOMINIUM: Ronald Ellett Okayed as Bankruptcy Counsel VYSTAR CORP: Incurs $2.7 Million Net Loss in 2012 W.R. GRACE: 3rd Circuit Hears Arguments on Postpetition Interest W.R. GRACE: Future Claims Representative Taps Orrick as Counsel W.R. GRACE: FCR Proposes Phillips as Co-Counsel W.R. GRACE: FCR Engages Lincoln Partners as Financial Adviser W.R. GRACE: National Aluminum Inks Agreement to Settle Claims W.R. GRACE: Chapter 11 Case Re-Assigned to Judge Carey W25 LLC: Obtains Confirmation of Third Amended Reorganization Plan WFO INC: Wins Court OK to Hire Parr Recovery as Recovery Agent WINDSORMEADE OF WILLIAMSBURG: Plan of Reorganization Effective ZELIENOPLE INVESTMENT: Involuntary Chapter 11 Case Summary ZIA SHADOWS: Dist. Ct. Rules on Las Cruces Summary Judgment Bid * AmeriBid to Auction Brick Commercial Building on July 9 * JPMorgan to Begin Disclosing Daily Liquid Assets in Money Funds * Suit Claims BofA Gave Bonuses to Foreclose on Clients * Wells Fargo Faces New Minnesota Securities-Lending Trial * Moody's Notes Declining Rate of Student Loan Defaults * Moody's Outlook on NA and EMEA Chemical Sectors is Negative * 'Naked' Liens Don't Open IRAs to Creditors: 6th Circ. * Supreme Court Takes Law Case; 2 Cases Could Join Next Week * Suit Tries Creative Approach Against Fannie and Freddie Bailout * New York State May Tighten Rein on Banking Consultants * Banks Balk at New Rules for Small Loans * Refinancings Plunge as Bond Yields Rise * More Than $100B in Private Equity Trapped in "Zombie Funds" * Mintz Levin Bankruptcy Attorneys Among Recommended by Legal 500 * PwC Expands U.S. Business Recovery Services * Recent Small-Dollar & Individual Chapter 11 Filings ********* ADCARE HEALTH: NYSE MKT Approves Listing Compliance Plan -------------------------------------------------------- AdCare Health Systems, Inc. on June 18 disclosed that, on June 13, 2013, the Company received a notice from the NYSE MKT LLC indicating that the Company's plan to regain compliance with certain of the Exchange's continued listing standards was accepted. As previously announced, on May 17, 2013, the Company received a deficiency letter from the Exchange indicating that the Company is not in compliance with Sections 134 and 1101 of the Exchange's Company Guide due to the Company's indication in its Form 12b-25, filed with the Securities and Exchange Commission on April 16, 2013, that the Company would not file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 with the SEC by the requisite deadline. The Company also received a deficiency letter from the Exchange on April 17, 2013 indicating that it is not in compliance with Sections 134 and 1101 of the Company Guide due to its failure to file its Annual Report on Form 10-K for the year ended December 31, 2012 with the SEC by the requisite deadline. The Company was afforded the opportunity to submit to the Exchange a plan to regain compliance. The Company submitted its compliance plan to the Exchange on May 1, 2013 and supplemented such plan on May 31, 2013. On June 13, 2013, the Exchange notified the Company that it accepted the Company's plan of compliance and granted the Company an extension to regain compliance with the continued listing standards of the Company Guide until: (i) July 16, 2013, with respect to the Annual Report; and (ii) Aug. 15, 2013, with respect to the Form 10-Q. The Company will be subject to periodic review by the Exchange staff during the extension periods. Failure to make progress consistent with the plan or to regain compliance with the continued listing standards by the end of the extension periods could result in the Company being delisted from the Exchange. About AdCare Health Systems AdCare Health Systems, Inc. (nyse mkt:ADK) (nyse mkt:ADK.PRA) -- http://www.adcarehealth.com-- is a recognized provider of senior living and health care facility management. The Company owns and manages long-term care facilities and retirement communities, and since the Company's inception in 1988, its mission has been to provide the highest quality of healthcare services to the elderly through its operating subsidiaries, including a broad range of skilled nursing and sub-acute care services. ADEPT TECHNOLOGIES: July 23 Hearing to Confirm Plan --------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Alabama will convene a hearing on July 23, 2013, at 9 a.m. to consider the confirmation of ADEPT Technologies, LLC's Chapter 11 Plan. Objections, if any, are due July 15. The Court approved the Disclosure Statement on June 5. Approval of the adequacy of the Disclosure Statement paved wave for the Debtor to begin solicitation of votes on the Plan. Interested parties may file written objections to the Plan no later than July 15. Creditors eligible to vote have until July 15, 2013 to cast their ballots for the Plan. July 22, 2013 is the last day for filing complaints under Sec. 727 of the Bankruptcy Code. The Chapter 11 Plan As reported by the Troubled Company Reporter on March 27, 2013, the Debtor delivered to the Bankruptcy Court a plan of reorganization and accompanying disclosure statement proposing a 10% recovery for allowed general unsecured claims. Secured creditors will be paid according to the following terms: * First Volunteer Bank will retain its lien on the collateral securing the Debtor's $129,536 prepetition loan until the time the debt is paid in full. FVB's secured claim will be paid through monthly payments of $943 per month until the balance is paid in full. * PNC Bank's $6.2 million secured claim will be paid through the execution of a new promissory note to be secured by the same collateral upon which PNC had a lien prepetition according to its same priority. * The Debtor will restructure its $2.2 million and $135,078 secured debt with Southern Development Council, Inc., and will assume the debt according to the terms and conditions of the existing finance agreements in place. SDC will retain its lien on the collateral securing the debt until the time the debt is paid in full. Brad Fielder, who owns 51% of the outstanding membership interests in the Debtor, and Chad Fielder, who owns the remaining 49% of the Debtor's outstanding stock, will retain their equity although they won't be paid until administrative, priority and unsecured claimants have been paid. A full-text copy of the Disclosure Statement dated Feb. 28, 2013, is available for free at http://bankrupt.com/misc/ADEPTds0228.pdf About ADEPT Technologies ADEPT Technologies, LLC, filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 12-83490) on Oct. 31, 2012, in Decatur, Alabama. The Debtor, which has principal assets located in Huntsville, Alabama, estimated assets of $10 million to $50 million and liabilities of up to $10 million. Judge Jack Caddell presides over the case. Kevin D. Heard, Esq., at Heard Ary, LLC, represents the Debtor as counsel. The petition was signed by Brad Fielder, managing member. AFA INVESTMENT: Cash Collateral Termination Date Today ------------------------------------------------------ AFA Investment Inc., et al., and the agent for the second lien lenders on May 30 agreed to a further extension of the termination date under the Interim Cash Collateral Order through and including June 20, 2013. King of Prussia, Pennsylvania-based AFA Foods Inc. was one of the largest processors of ground beef products in the United States. The Company had five processing facilities and two ancillary facilities across the country with annual processing capacity of 800 million pounds. AFA had seven facilities capable of producing 800 million pound of ground beef annually. Revenue in 2011 was $958 million. Yucaipa Cos. acquired the business in 2008 and currently owns 92% of the common stock and all of the preferred stock. AFA Foods, AFA Investment Inc. and other affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-11127) on April 2, 2012, after recent changes in the market for its ground beef products and the impact of negative media coverage related to boneless lean beef trimmings (BLBT) affected sales. Judge Mary Walrath presides over the case. Peter I Keane, Esq., Laura Davis Jones, Esq., Timothy P. Cairns, Esq., and Peter J. Keane, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Delaware; Tobias S. Keller, Esq., at Jones Day, in San Francisco, California; and Jeffrey B. Ellman, Esq., and Brett J. Berlin, Esq., at Jones Day, in Atlanta, Georgia, represent the Debtors. FTI Consulting Inc. serves as financial advisors and Imperial Capital LLC serves as marketing consultants. Kurtzman Carson Consultants LLC serves as noticing and claims agent. As of Feb. 29, 2012, on a consolidated basis, the Debtors' books and records reflected approximately $219 million in assets and $197 million in liabilities. AFA Foods, Inc., disclosed $615,859,574 in assets and $544,499,689 in liabilities as of the Petition Date. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed seven members to the official committee of unsecured creditors in the Chapter 11 cases of AFA Investment Inc., AFA Foods and their debtor-affiliates. The Committee has obtained approval to hire McDonald Hopkins LLC as lead counsel and Potter Anderson & Corroon LLP serves as co-counsel. The Committee also obtained approval to retain J.H. Cohn LLP as its financial advisor, nunc pro tunc to April 13, 2012. AFA, in its Chapter 11 case, sold plants and paid off the first- lien lenders and the loan financing the Chapter 11 effort. Remaining assets are $14 million cash and the right to file lawsuits. General Electric Capital Corp. and Bank of America Corp. provided about $60 million in DIP financing. The loan was paid off in July. In October 2012, the Bankruptcy Court denied a settlement that would have released Yucaipa Cos., the owner and junior lender to AFA Foods, from claims and lawsuits the creditors might otherwise bring, in exchange for cash to pay unsecured creditors' claims under a liquidating Chapter 11 plan. Under the deal, Yucaipa would receive $11.2 million from the $14 million, with the remainder earmarked for unsecured creditors. Asset recoveries above $14 million would be split with Yucaipa receiving 90% and creditors 10%. Proceeds from lawsuits would be divided roughly 50-50. AIR CANADA: Fitch Rates New $1 Billion Secured Term Loan at 'BB-' ----------------------------------------------------------------- Fitch Ratings has assigned ratings of 'BB-'/'RR2' to Air Canada's (AC) proposed US$1 billion senior secured term loan and proposed US$100 million senior secured revolving credit facility. The Issuer Default Rating (IDR) for Air Canada (AC) remains unchanged at 'B' with a Positive Outlook. Proceeds from the transaction will be used to fund a tender for AC's existing $900 million first-lien and $200 million second-lien high yield notes scheduled to mature in 2015 and 2016, respectively. The existing notes are also callable. The new term loan will feature a six-year maturity, while the new revolving credit facility will have a four-year maturity. The transaction will extend the company's largest debt maturities out to 2019, which Fitch believes is beyond the expected peak in AC's capital spending for new aircraft. The new credit facilities will also likely feature significantly lower interest rates than the outstanding high yield notes. The credit facilities will be secured by a first priority lien on AC's Pacific route authorities, accounts receivable, certain real estate, spare engines, ground equipment, and slots at LaGuardia, Heathrow, and Washington-Reagan. This is the same collateral pool that secures AC's existing secured notes, with the addition of 10 extra spare engines. Key Rating Drivers The 'BB-'/'RR2' rating is driven by Fitch's recovery analysis, which distributes an estimate of AC's distressed enterprise value to various classes of debt based on a going-concern assumption. The 'RR2' rating indicates Fitch's expectation that the secured credit facility holders would receive superior recovery of 71%-90% of principal in a distressed scenario. Fitch also performed a recovery analysis based on a liquidation scenario in which appraised values of the collateral were stressed. This analysis supported the 'RR2' result in the going-concern analysis. Per Fitch' recovery methodology, an 'RR2' rating is notched up two levels from the underlying IDR. Rating Sensitivities The secured credit facilities ratings are tied to AC's IDR and the collateral securing the facilities. Fitch could consider a negative rating action on the facilities if there were a significant devaluation of the collateral, or a downgrade of AC's IDR. A positive rating action on the facilities could follow an upgrade of AC's IDR. AC's IDR reflects the company's leveraged balance sheet, adequate liquidity position and high, but improving cost structure mitigated by AC's extensive global network and dominant market positions across all segments. The Rating Outlook for Air Canada's IDR remains positive, reflecting the company's continued efforts to reduce costs, pay down debt, and expand its presence in international markets. Fitch has assigned the following ratings: Air Canada -- Senior secured term loan B due 2019 'BB-'/'RR2'; -- Senior secured revolving credit facility 'BB-'/'RR2'. Fitch rates Air Canada as follows: -- Long-term IDR 'B'; -- Senior secured first-lien debt 'BB'/'RR1'; -- Senior secured second-lien debt 'BB-'/'RR2'. The Rating Outlook is Positive. AIR CANADA: Moody's Rates Proposed $1 Billion Term Debt 'B2' ------------------------------------------------------------ Moody's Investors Service assigned B2 senior secured ratings to Air Canada's proposed $1 billion term debt and $100 million (USD equivalent) revolving credit facility. Air Canada's Caa1 corporate family, Caa1-PD probability of default and SGL-3 speculative grade liquidity ratings were affirmed. The ratings outlook remains positive. Issuer: Air Canada Assignments: $100M Senior Secured Bank Credit Facility, Assigned B2, LGD2, 26% $1,000M Senior Secured Bank Credit Facility, Assigned B2, LGD2, 26% Affirmations: Probability of Default Rating, Affirmed Caa1-PD Speculative Grade Liquidity Rating, Affirmed SGL-3 Corporate Family Rating, Affirmed Caa1 Ratings Rationale: Proceeds from the new debt issues will be used to refinance Air Canada's existing $900 million (USD equivalent) and USD $200 million first and second lien debt instruments, respectively, for which the associated B2 and Caa2 ratings will be withdrawn once the new transaction closes. The new debt will be secured by the same diverse pool of collateral that supports the existing debt issues. Also, Moody's expects Air Canada may issue up to an additional $300 million of debt against this same collateral pool. This collateral includes accounts receivables, certain owned real property, certain Pacific routes and related gate leaseholds and landing slots, landing slots at London Heathrow's and New York's LaGuardia's airports, certain spare engines and ground equipment. The new debt ratings have been assigned pursuant to Moody's loss given-default methodology. Air Canada's Caa1 corporate family rating is primarily driven by its weak key credit metrics, including Moody's expectation that the company's adjusted leverage (Debt/ EBITDA) will remain around 8x through 2013. Added constraints include growing competition from lower-cost carriers, the potential that the significant capacity additions planned by Air Canada and its primary domestic competitor will pressure yields and/or margins, the company's very high cost structure arising from its legacy carrier status and Moody's expectation that the company's free cash flow will be modestly negative over the next few years due to elevated capital expenditures. Favorably, the rating reflects Air Canada's meaningful scale, leading market share of domestic, trans-border and international routes in and out of Canada and benefits from its position in the Star Alliance network. The positive ratings outlook reflects the potential that Air Canada's ratings could move higher if the company's earnings continue to improve through upcoming capacity additions. An upgrade could occur if adjusted leverage is sustained below 7.5x and cash is maintained above 15% of revenues. Downward rating pressure could occur if Debt/ EBITDA is forecast to rise above 9x or should cash trend towards 10% of revenues. The principal methodology used in this rating was the Global Passenger Airlines Industry Methodology published in May 2012. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Saint-Laurent, Quebec, Air Canada is the largest provider of scheduled passenger services in Canada. Revenues for 2012 were approximately $12 billion. AIR CANADA: S&P Assigns 'B' Rating to $1-Bil. Term Loan Due 2019 ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' issue- level rating and a '2' recovery rating to Air Canada's proposed US$1 billion term loan due 2019. A '2' recovery rating, indicates that lenders could expect substantial (70%-90%) recovery in the event of default. "We understand that net proceeds from the proposed term loan will be used to repay the company's existing 9.250% senior secured notes due 2015, 10.125% senior secured notes due 2015, and 12.000% senior second-lien notes due 2016, as well as to add cash to the company's balance sheet. We expect to withdraw the ratings on the existing secured notes on their repayment. While the proposed term loan will likely increase Air Canada's debt, this is offset by the increased liquidity and extended maturity profile the company will gain as well as lower interest costs and, as a result, we do not believe it materially alters Air Canada's financial risk profile," S&P said. "The ratings and outlook on Air Canada reflect what we view as the company's highly leveraged capital structure; weak cash flow protection measures; participation in the high-risk airline industry; and modest, albeit volatile, cash flow to cover relatively high fixed costs," said Standard & Poor's credit analyst Jamie Koutsoukis. "Mitigating these weaknesses, in our opinion, are the company's strong market position in Canada as the largest provider of commercial airline services; broad route network, providing some ability to offset domestic weakness; and good brand recognition," Ms. Koutsoukis added. RATINGS LIST Air Canada Corporate credit rating B-/Stable/-- Rating Assigned Proposed US$1.0 bil. term loan B Recovery rating 2 ALIXPARTNERS LLP: Moody's Lowers CFR to 'B2'; Outlook Stable ------------------------------------------------------------ Moody's Investors Service lowered AlixPartners, LLP's corporate family rating to B2 from B1 and probability of default rating to B2-PD from B1-PD. Moody's also assigned B1 ratings to the company's proposed first lien senior secured credit facility, consisting of a $75 million revolving credit facility due 2018 and a $750 million term loan due 2020. In addition, Moody's assigned a Caa1 rating to the proposed $250 million second lien senior secured term loan due 2021. The ratings outlook remains stable. AlixPartners will use proceeds from the proposed $750 million first lien term loan, $250 million second lien term loan and a $25 million equity contribution from Lakeview to refinance the existing first lien credit facility and second lien term loan, as well as fund a special dividend to current equity holders. The dividend transaction comes roughly a year after the closing of the LBO transaction in June 2012, when the company was acquired by funds advised and/or managed by CVC Capital Partners. The ratings are subject to review of final documentation. The downgrade of the CFR to B2 from B1 reflects the significant increase in leverage stemming from the proposed transaction and the shift to more aggressive financial policies. As a result of the proposed $191 million dividend, Moody's estimates that the company's leverage (pro-forma for the transaction and including Moody's standard adjustments), on a debt to EBITDA basis will be well over 6.5 times for the LTM period ended 3/31/2013, which is above the downgrade trigger of 6.0 times that was set for the B1 rating. The downgrade also reflects Moody's view that given AlixPartners' private equity ownership and the recent dividend transaction (approximately a year after the June 2012 LBO), the company will be managed to a higher leverage level than originally expected. The following summarizes the rating activity: Ratings downgraded: Corporate family rating to B2 from B1 Probability of default rating to B2-PD from B1-PD Ratings assigned: Proposed $75 million first lien senior secured revolving credit facility due 2018 at B1 (LGD3, 36%) Proposed $750 million first lien senior secured term loan due 2020 at B1 (LGD3, 36%) Proposed $250 million second lien senior secured term loan due 2021 at Caa1 (LGD5, 88%) Ratings to be withdrawn at transaction closing: $75 million first lien senior secured revolving credit facility due 2017 at Ba3 (LGD3, 36%) $100 million first lien senior secured term loan B-1 due 2017 at Ba3 (LGD3, 36%) $505 million first lien senior secured term loan B-2 due 2019 at Ba3 (LGD3, 36%) $210 million second lien senior secured term loan due 2019 at B3 (LGD5, 88%) Ratings Rationale: AlixPartners' B2 corporate family rating reflects its high pro forma leverage as measured by debt/EBITDA of approximately 6.7 times (adjusting for the transaction and including Moody's standard adjustments) for the LTM period ended 3/31/2013, expectations for modest improvement in credit metrics largely through EBITDA expansion, and relatively small scale. The rating also reflects the company's recent shift towards a more aggressive financial policy and Moody's expectation that the company will be managed to a fairly high leverage level over the intermediate term. The rating is also constrained by continued softness in the North American Turnaround & Restructuring Services business and ongoing risks associated with employee retention, particularly as the employment and macro-economic environment in the United States improves. Positive ratings consideration is given to the company's broad and counter-balancing portfolio of diversified consulting services that help to mitigate exposure to economic cycles, generally consistent track record of outperformance relative to expectations, and the relative stability of operating margins owing to a high proportion of variable expenses. The rating also derives support from the company's good pro forma liquidity and coverage with EBITDA less capex to interest of about 2.0 times. The stable outlook reflects Moody's expectation that AlixPartners' will consistently grow the top line and earnings despite continued softness in North American TRS, and apply free cash flow to debt reduction such that leverage will improve from initial pro forma levels to a level that is more representative of the current B2 rating. The stable outlook also reflects Moody's view that the company's qualitative factors -- "counter-balancing" business segments, stable operating margins and healthy free cash flow profile -- help to balance out its weak leverage profile. The ratings could be downgraded if debt to EBITDA is sustained above 7.0 times as a result of declining profitability or additional debt financed dividends/acquisitions or if EBITDA less capex to interest falls below 1.5 times. Greater than anticipated working capital usage that results in negative free cash flow or a material weakening of the liquidity profile could also pressure the ratings. The ratings could be upgraded if the company demonstrates a commitment to more conservative financial policies such that debt to EBITDA sustainably approaches 5.0 times and EBITDA less capex to interest exceeds 2.5 times. 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. AMERICAN AIRLINES: Spars with U.S. Bank Over Make-Whole Payments ---------------------------------------------------------------- Jacqueline Palank writing for Dow Jones' DBR Small Cap reports that American Airlines and U.S. Bank will square off Thursday before a federal appeals court over whether American owes its bondholders a penalty fee in connection with the prepayment of more than $1.3 billion in debt. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. In April 2013, AMR filed a Chapter 11 plan of reorganization that will carry out the merger. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. The hearing before the Court to consider confirmation of the Plan is scheduled for Aug. 15, 2013. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). AMERICAN EQUITY: Fitch Rates $250MM Unsecured Notes 'BB' -------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to American Equity Investment Life Holding Company's (AEL) proposed issuance of $250 million of senior unsecured notes due 2021. AEL's Long-term Issuer Default Rating is unaffected by this rating action. Fitch affirmed the ratings of AEL and its insurance operating subsidiaries with a Stable Outlook on April 12, 2013. Key Rating Drivers Fitch expects the majority of proceeds from the issuance to be used to fund the redemption of a portion of existing debt on the company's balance sheet. Issuance of the new senior debt is not expected to result in an increase in AEL's financial leverage ratio to a level above Fitch's rating trigger of 50%. The company's financial leverage was approximately 36% at March 30, 2013. AEL's recent financial performance has been in line with Fitch's expectations for the company's current ratings. AEL is headquartered in West Des Moines, Iowa and reported total GAAP assets of $36.9 billion and equity of $1.7 billion at March 31, 2013. AEILIC, the main operating subsidiary of AEL, is also headquartered in West Des Moines and had statutory capital and surplus of $1.7 billion at March 31, 2013. Rating Sensitivities The key rating triggers that could result in an upgrade include: -- Enhanced capitalization with RBC above 350% on a sustained basis. The key rating triggers that could result in a downgrade include: -- A reduction in capitalization with RBC below 300%; -- A sustained deterioration in operating results such that interest coverage is below 3x; -- Significant increase in lapse/surrender rates; -- Inability to maintain sufficient parent company liquidity to fund any potential forced repurchase of outstanding notes payable; -- Unexpected spike in credit related impairments; -- Financial leverage above 50%. The key rating triggers that could result in a narrowing of notching between the IDR of AEL and the IFS of AEILIC include: -- A sustainable decline in financial leverage below 30%; -- Sustained GAAP EBIT-based interest coverage above 8x. Fitch has assigned the following ratings: American Equity Investment Life Holding Company -- $250 million senior unsecured notes due 2021 'BB'. AMERICAN EQUITY: S&P Affirms 'BB+' Counterparty Credit Rating ------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BBB+' long-term insurer financial strength rating on American Equity Investment Life Insurance Co. (AEIL) and its 'BB+' long- term counterparty credit rating on the parent non-operating holding company, American Equity Investment Life Holding Co. (NYSE: AEL; collectively known as American Equity). S&P revised the outlook on all of these ratings to positive from stable. At the same time, S&P assigned a 'BB+' senior unsecured debt rating to AEL's proposed $250 million eight-year senior unsecured debt issue due in 2021. The ratings reflect S&P's view of the group's adequate business risk profile (BRP) and moderately strong financial risk profile (FRP), stemming from an adequate competitive position and moderately strong capital and earnings. American Equity faces low industry and country risk driven by low country and industry risks for its annuity operations. S&P's view of American Equity's low country risk is driven by stable economic growth prospects, relatively effective and stable political institutions, sophisticated financial systems, and strong payment culture in the U.S. "In our view, American Equity's annuity operations are exposed to low industry risks due to moderate product risk as demonstrated by a strong track record of maintaining asset-liability management mismatch within one year," said Standard & Poor's credit analyst Robert Hafner. The availability of fixed-income instruments of sufficient duration to match insurance liabilities in the capital markets greatly supports this capability. However, S&P sees sensitivity to interest rates and equity-market volatility as offsetting this strength somewhat and burdening long-term operating return prospects. S&P believes a weak global economy, persistent low interest rates, and intense competition will limit the sector's growth prospects and potential for higher operating margins. American Equity has a satisfactory BRP and adequate competitive position, reflecting its almost exclusive focus on fixed annuities, including a top-five position in fixed indexed annuities and steady profitable growth in its chosen business. S&P views American Equity's geographic diversification as positive, given its national presence. S&P views the company's other diversification as negative because American Equity is concentrated in just one line of business -- individual fixed annuities -- that comprise almost 100% of the company's total premiums. The issuer credit rating on AEL, the group's nonoperating holding company, is three notches lower than the ratings on the core operating companies, which is standard notching for U.S. insurance holding companies. AEL maintains fixed-charge coverage of more than 4x on financial leverage of about 35%. AEL has strong liquidity with very limited contingent collateral-posting exposure or ratings triggers. AEL's cash flow-to-liquidity requirements ratio exceeds 2x. The ratings assigned to the proposed $250 million eight-year senior unsecured notes reflect the counterparty credit ratings on AEL. The company intends to use the proceeds primarily to refinance existing debt. The outlook is positive. S&P expects American Equity to maintain a leading position in the fixed-annuity market and in fixed- indexed annuities in particular. S&P could raise the ratings by one notch in the next 18-24 months if American Equity's BRP remains satisfactory and its FRP improves to strong from moderately strong. This could occur if capital and earnings strengthen to a level that supports higher ratings, including capitalization that becomes sustainably redundant at the 'A' confidence level as measured by S&P's capital model. S&P could lower the ratings if capitalization deteriorates and becomes materially deficient at the 'BBB' confidence level. AMERICAN EUROPEAN: A.M. Best Cuts Finc'l. Strength Rating to 'B-' ----------------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B (Fair) from B+ (Good) and issuer credit rating to "bb+" from "bbb-" for American European Insurance Company and its wholly owned subsidiaries, Rutgers Casualty Insurance Company and Rutgers Enhanced Insurance Company. All three companies are headquartered in Cherry Hill, NJ, and collectively referred to as American European Insurance Group (AEIG). The outlook for these ratings has been revised to stable from negative. The rating downgrades reflect AEIG's historically poor operating performance and execution risk in replacing business previously assumed from Merchants Mutual Insurance Company (MMIC), an unaffiliated insurer. Other negative factors include the company's lack of scale driving its high and therefore uncompetitive expense ratio, as well as volatile total investment returns and competitive market conditions under which the group operates. Further, the group remains exposed to northeast storms that have impacted results over the past two years. Offsetting these negative factors is AEIG's solid capitalization and the recent actions taken by management to improve overall operating results. The outlook reflects A.M. Best's view that the company's strong level of capitalization will allow the necessary time for management's initiatives to gain traction in the medium term. AEIG's ratings could be negatively impacted if results do not materially improve in the near term. ARMORWORKS ENTERPRISES: Files for Chapter 11 With Plan ------------------------------------------------------ Military armor systems provider ArmorWorks Enterprises, LLC, and affiliate TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix on June 17, 2013, along with a plan that resolves a dispute with a minority shareholder and $3.5 million of financing that would save the company from running out of cash. ArmorWorks develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. Subsidiaries ShockRide, LLC, Mandall BarrierWorks, LLC, and Applied Heat Technologies, LLC, are self sufficient and thus were not included in the Chapter 11 filings. U.K.-based ArmourWorks International Limited and Canadian-based ArmourWorks International Limited are also not part of the U.S. bankruptcy. The Debtors have tapped Todd A. Burgess, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. Following record sales in 2011, ArmorWorks said that business deteriorated substantially in 2012 due to a decrease in spending by the defense industry. In 2012, the company incurred a net loss of $9.99 million on sales of $100.2 million compared with $27.9 million of net income on $314 million of sales the year before. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. Dispute With C Squared "Although the companies continue to operate, and I believe ultimately will 'weather the storm,' the ongoing litigation with C Squared has made it impossible for ArmorWorks to obtain working capital financing to replace the $40 million line of credit paid off in 2012. Without working capital financing, ArmorWorks is in jeopardy of running out of cash in the short term," William J. Perciballi, manager and founder of ArmorWorks. C Squared Capital Partners, L.L.C., is a passive investor in ArmorWorks and owns a 40% minority interest after making a $1 million passive investment in the business in 2001. Since 2001, C Squared has received distributions totaling $21.6 million, including the $1 million return of the initial investment. The company removed C Squared as passive manager in July 2009. Despite its representations to the U.S. Small Business Administration that it is a passive investor, over the past several years, C Squared has sought to assert control over ArmorWorks and to interject itself into the operations of the company. C Squared initiated litigation against ArmorWorks, AWI, and Mr. Perciballi in Maricopa County Superior Court (Case No. CV2011-008545 and CV2011-009812). The Maricopa County Superior Court in February 2013 ordered the company to amend AWE's articles of organization to reflect C Squared's status as manager. The Debtor believes that C Squared's actions create a potential violation under the False Claims Act, threatens ArmorWorks' status as a small business and may compromise ArmorWorks' U.S. Government security clearances, which in turn, would threaten ArmorWork's status as a U.S. Government prime contractor and subcontractor. Mr. Perciballi believes that with the bankruptcy filing, the ongoing dispute with C Squared will be resolved by allowing ArmorWorks to redeem C Squared's 40% minority interest, or alternatively, allow C Squared to purchase the 60% majority interest of AWI. $3.5 Million Financing On the Petition Date, the Debtors filed various first day motions, including requests to access DIP financing, pay employee wages and benefits and grant adequate assurance of payment to utilities. ArmorWorks has identified a lender that is willing to provide up to $3.5 million of debtor in possession financing. The primary terms of the DIP financing from Lancelot Armor, LLC are: a. Maximum Loan Amount: $3.5 million available in two (2) disbursements, (i) an initial disbursement of up to $875,000 upon entry of an order approving the financing on an interim basis, and (2) the balance upon entry of a final order approving the financing, subject to availability under the Borrowing Base. b. Use of Proceeds: The Debtors will use the proceeds of the loan for working capital and for payment of fees and expenses. c. Collateral: all real and personal property of the Debtors and the non-debtor subsidiaries of ArmorWorks, including a pledge of 100% of ArmorWorks' member interests in all subsidiaries, and a super-priority administrative expense claim pursuant to 11 U.S.C. Sec. 364(c) and (d). The collateral, priming liens, and super-priority administrative claim are subject to a $250,000 carve-out for the Debtors' professionals and any professionals retained by any statutory committee appointed in the cases. d. Interest Rate: 15% with an increase to 21% while any event of default exists. e. Fees: 5% origination fee paid prepetition upon execution of the DIP loan and security agreement, and $2,500 a month collateral monitoring fee. f. Expenses: Debtors responsible for all attorneys' fees and expenses incurred by lender. The Debtors provided a $30,000 expense deposit to the lender prepetition. g. Lockbox: Within 30 days of the initial Advance, the Debtors will establish a lockbox, into which all of the Debtors' receipts from any source whatsoever shall be deposited and to which only AWE willl access for so long as there has been no Event of Default on the Loan and only to the extent that the funds deposited therein are used in strict compliance with the budget. h. Maturity Date: The DIP facility will mature December 31, 2013. Subject to written notice, the Debtors may either (i) extend the maturity date to March 31, 2014 for a fee of 1% or (ii) extend the Maturity Date to June 30, 2014 for an additional fee of 1.5%. i. Payments: monthly interest only payments with all amounts due and owing paid on the Maturity Date. j. Stay Relief: automatic stay is modified to permit the Debtors to grant the liens and super-priority administrative claims, perform acts required under the loan documents, incur the obligations under the loan documents, and allow the Debtors to pay, and the lender to apply, payments under the DIP loan. The Debtors do not have a prepetition working capital lender and thus no creditor has a lien in the Debtors' cash collateral. The Chapter 11 Plan The Debtors' Chapter 11 plan provides for these terms: * There are no secured claims. To the extent there are any secured claims, the creditors will receive installment payments over 60 months on 5% simple interest or receive possession of their collateral. * Holders of general unsecured claims against ArmorWorks and TechFiber will be paid in installments. They will be paid an initial distribution equal to 20% of the allowed amount of their claim. The balance of the claims will be paid in annual distributions, equal to 20% of the allowed claim plus accrued interest, beginning on the first anniversary of the Effective Date and continuing on the anniversary date of each subsequent year until paid in full. The claims will accrue interest from and after the Effective Date at the rate of 5% per annum simple interest. All claims plus interest will be paid in full on or before the later of the fourth anniversary of the Effective Date or allowance of the Claim. Holders of unsecured claims are impaired and are entitled to vote on the Plan. * Holders of vendor claims against ArmorWorks and TechFiber will be paid an initial distribution equal to 25% of the allowed amount of their Claim, with the balance to be paid in annual distributions, equal to 25% of the allowed claim plus accrued interest, beginning on the first anniversary of the Effective Date and continuing on the anniversary date of each subsequent year until paid in full. The claims will accrue interest from and after the Effective Date at the rate of 5% per annum simple interest. The claims are impaired, and holders are entitled to vote to accept or reject the Plan. * On account of its equity interest, C Squared may elect, in full and final satisfaction of its 40 percent stake in the company, (a) accept a certain redemption amount from ArmorWorks; or (b) pay AWI the AWI Purchase Price to acquire AWI's 60% equity security interest in ArmorWorks. If C Squared fails to accept any of the offer, it will be deemed to have accepted ArmorWorks;' offer to pay the redemption amount. A copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/Armorworks_Plan_Outline.pdf ARMORWORKS ENTERPRISES: Sec. 341 Creditors' Meeting on July 23 -------------------------------------------------------------- There's a meeting of creditors of ArmorWorks Enterprises, LLC, on July 23, 2013, at 9:00 a.m. at US Trustee Meeting Room, 230 N. First Avenue, Suite 102, Phoenix, Arizona. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About ArmorWorks Enterprises ArmorWorks Enterprises, LLC, develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. ArmorWorks and subsidiary TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix, on June 17, 2013. The Debtors also filed a Chapter 11 plan with the Court on the same day. Subsidiaries ShockRide, LLC, Mandall BarrierWorks, LLC, and Applied Heat Technologies, LLC, are self sufficient and thus were not included in the Chapter 11 filings. U.K.-based ArmourWorks International Limited and Canadian-based ArmourWorks International Limited are also not part of the U.S. bankruptcy. The Debtors have tapped Todd A. Burgess, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. ARMORWORKS ENTERPRISES: Proposes G&K and MCA as Professionals ------------------------------------------------------------- ArmorWorks Enterprises, LLC, and affiliate TechFiber LLC seek Court authorization to employ Gallagher & Kennedy, P.A. and MCA Financial Group, Ltd. as estate professionals. The Debtors want G&K to serve as general bankruptcy and restructuring. The firm will charge the Debtors on an hourly basis at these rates: John R. Clemency, Shareholder $575 per hour; Todd A. Burgess, Shareholder $495 per hour; Julie Rystad, Shareholder $450 per hour; Lindsi M. Weber, Associate $350 per hour; and Rachel Milazzo, Paralegal $240 per hour. Other G&K attorneys and paralegals may render services to the Debtors as needed. Attorneys will charge $300 to $650 per hour and paralegals will bill $240 to $250 per hour. MCA will act as the Debtors' financial advisor, and will, among other things, assist with the preparation of statements and schedules, DIP and cash collateral budgets and forecasts, perform valuation and feasibility analysis, and to assist with formulation, negotiation, and confirmation of a chapter 11 reorganization plan. The current hourly rates for MCA's professionals expected to have primary responsibility for the engagement are: Morris C. Aaron, Senior Managing Director - $425 Paul Roberts & Karrilyn Thomas, Managing Directors - $350 Brian McHugh, Director - $295 Other MCA professionals and paraprofessionals may render services to the Debtors as needed. Generally, MCA's hourly rates fall within the following ranges: Senior Managing Directors - $425 Managing Directors - $350 Directors - $295 Administrative and research personnel - $95 About ArmorWorks Enterprises ArmorWorks Enterprises, LLC, develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. ArmorWorks and subsidiary TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix, on June 17, 2013. The Debtors also filed a Chapter 11 plan with the Court on the same day. Subsidiaries ShockRide, LLC, Mandall BarrierWorks, LLC, and Applied Heat Technologies, LLC, are self sufficient and thus were not included in the Chapter 11 filings. U.K.-based ArmourWorks International Limited and Canadian-based ArmourWorks International Limited are also not part of the U.S. bankruptcy. The Debtors have tapped Todd A. Burgess, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. ARMORWORKS ENTERPRISES: Proposes Aug. 20 Claims Bar Date -------------------------------------------------------- ArmorWorks Enterprises, LLC, and affiliate TechFiber LLC ask the Court to enter an order establishing a bar date for all creditors and equity security holders to file proofs of claim and interests in the Chapter 11 cases. The Debtors request that the Court set Monday, August 20, 2013, as the bar date. About ArmorWorks Enterprises ArmorWorks Enterprises, LLC, develops advanced survivability technology and designs and manufactures armor and protective products. ArmorWorks has produced over 1.25 million ceramic armor and composite armor protection components for a variety of personnel armor, aircraft, and vehicle applications. ArmorWorks and subsidiary TechFiber LLC sought Chapter 11 protection (Bankr. D. Ariz. Case Nos. 13-10332 and 13-10333) in Phoenix, on June 17, 2013. The Debtors also filed a Chapter 11 plan with the Court on the same day. Subsidiaries ShockRide, LLC, Mandall BarrierWorks, LLC, and Applied Heat Technologies, LLC, are self sufficient and thus were not included in the Chapter 11 filings. U.K.-based ArmourWorks International Limited and Canadian-based ArmourWorks International Limited are also not part of the U.S. bankruptcy. The Debtors have tapped Todd A. Burgess, Esq., at Gallagher & Kennedy, as counsel; and MCA Financial Group, Ltd., as financial advisor. ArmorWorks estimated $10 million to $50 million in assets and liabilities. As of May 26, 2012, ArmorWorks had total assets of $30.9 million and total liabilities of $12.04 million. ATP OIL: Lenders Raises Cash Offer by $10 Million ------------------------------------------------- A group of lenders led by Credit Suisse Group AG looking to buy ATP Oil & Gas Corp.'s oil and gas leases have upped their cash bid by $10 million, according to documents filed in Texas bankruptcy court. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that ATP Oil is preparing to go ahead on June 20 with the often-postponed hearing to approve the sale of assets to secured lenders largely in exchange for debt. According to the Bloomberg report, the lenders were in line to become the new owners after winning an auction in May. When the sale came to bankruptcy court for approval, there were objections based on allegations that some debt and expenses incurred during the Chapter 11 case won't be paid. The sale-approval hearing was postponed several times, to be rescheduled for June 20 and 21. As widely reported, the lenders filed a new version of the purchase agreement where the cash portion of the purchase price was raised by $10 million to $55 million, to insure sufficient cash for paying off debt coming ahead of bankruptcy financing. Bloomberg News relates that the nominal purchase price is $690.8 million, with most paid by an exchange for secured debt. In effect, the purchase price remained the same, although the cash portion was increased. Joseph Checkler, writing for Dow Jones' DBR Small Cap, says the decision to increase the cash portion of their $690 million bid could appease the bankruptcy judge overseeing ATP's Chapter 11 case. About ATP Oil & Gas Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A seven-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq., at Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATWOOD OCEANICS: Moody's Assigns 'Ba3' Rating to $150MM Notes ------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Atwood Oceanics, Inc.'s proposed $150 million senior unsecured notes, due 2020. Atwood's other ratings and stable outlook were unchanged. This issuance is an add-on to Atwood's 6.5% $450 million 2020 notes that were issued in January 2012. Net proceeds from this offering will increase revolver liquidity and ultimately fund general corporate needs. Issuer: Atwood Oceanics, Inc. Assignments: $150M Senior Unsecured Regular Bond/Debenture, Assigned Ba3 $150M Senior Unsecured Regular Bond/Debenture, Assigned a range of LGD5, 81% Ratings Rationale: The proposed notes will have identical terms and conditions as the existing 6.5% notes and will be treated as a single class of debt under the same indenture. Therefore, the new and the existing notes are both rated at the same Ba3 level. The unsecured notes are rated one notch below the Ba2 CFR because of the large priority claim secured credit facility in the capital structure. Atwood should have adequate liquidity through mid-2014, which is captured in Moody's SGL-3 Speculative Grade Liquidity rating. The company should be able to cover all basic cash requirements from its substantial operating cash flows generated by the working rigs. However, Atwood will need to either exercise its accordion option and upsize the revolver or secure additional external financing before taking delivery of its first drillship, Atwood Achiever, in October 2013. The revolver accordion, if exercised, could increase the commitment amount up to $1.3 billion upon inclusion of additional rigs (Condor, Mako and Manta,) in the collateral package. Atwood had $117 million of balance sheet cash and $160 million available under its $750 million revolving credit facility as of March 31, 2013. Subsequent to the quarter-end, the company made a $141 million payment to take early delivery of its third high-spec jackup rig (Atwood Orca) and announced a $107 million share buyback plan. Therefore, there is limited revolver liquidity now. The Ba2 Corporate Family Rating reflects Atwood's growing scale in the offshore drilling sector, rapid transformation to a high- quality rig fleet, diversified international presence, and strong contract coverage through 2014. The rating is also supported by the company's long operating track record and its history of conservative financial management. The CFR is held back by the cash flow concentration in a limited number of rigs relative to larger and higher rated offshore drillers; mobilization and start- up risks associated with the newly constructed drillships; and the expected increase in debt and financial leverage through 2014 as the company continues to grow its fleet. The rating also considers the inherent volatility of the marine drilling market and the large global supply of newbuilds in the 2013-2015 timeframe and their potential adverse impact on future dayrates. The stable outlook is underpinned by Atwood's drilling contracts and Moody's expectation of measured growth. The outlook could change to positive upon successful deployment Atwood Advantage. Enhanced scale and a more diversified revenue stream could prompt a positive rating action. In considering an upgrade, Moody's would look for strong forward contract coverage, a sustainable leverage ratio approaching 2.0x and a healthy dayrate environment. A downgrade is unlikely in 2013. However, ratings could come under pressure if Atwood is unable to sustain debt/EBITDA below 3.0x. Operational setbacks involving the larger rigs, significant construction or re-contracting delays, and liquidity challenges would pose the greatest risks to ratings given Atwood's substantial capital requirements through 2015. The principal methodology used in this rating was the Global Oilfield Services Rating Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Atwood Oceanics, Inc. is a Houston, Texas based international offshore drilling contractor with operations in Australia, Southeast Asia, West Africa, the US Gulf of Mexico and the Mediterranean. ATWOOD OCEANICS: S&P Affirms 'BB' Rating to Sr. Unsecured Notes --------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed its 'BB' issue-level rating and '3' recovery rating on Atwood Oceanics Inc.'s senior unsecured notes due 2020 after the company announced a proposed $200 million add-on to the issue. Atwood intends to use the net proceeds from this offering to ultimately fund its newbuild program, but proceeds will be used to reduce borrowings under the company's revolving credit facility in the short term. The ratings on Houston-based offshore driller company Atwood Oceanics Inc. is based on Standard & Poor's assessment of the company's "fair" business risk and "significant" financial risk. The ratings primarily reflect the company's participation in a highly competitive, cyclical industry; its small fleet size; and its considerable capital spending program. The ratings also incorporate the company's high asset and customer quality, a diversified international presence, its strong operating and profitable track record, good revenue visibility provided by its medium-term contracts, and its moderate debt levels. RATINGS LIST Atwood Oceanics Inc. Corporate Credit Rating BB/Stable/-- Ratings Affirmed Atwood Oceanics Inc. $650 Mil Sr. Unsecured Nts BB Recovery Rating 3 B.R. BROOKFIELD: Dist. Court Upholds Ruling on Integrity Claim -------------------------------------------------------------- A Wisconsin district court upheld the decisions of two bankruptcy judges dismissing the objection of B.R. Brookfield Commons No. 1 LLC, et al., to a claim by Valstone Asset Management LLC. The claim stemmed from a $2.5 million second mortgage B.R. Brookfield obtained from Integrity Development, secured by a shopping center property owned by B.R. Brookfield. The claim was later assigned to Valstone Asset Management LLC. B.R. filed for bankruptcy on June 10, 2011. It argued that the claim should be disallowed as an unsecured claim, on the basis of its being unsecured by equity in the shopping center. Judge Shapiro disagreed with B.R.'s contention and overruled its objection. He then retired and the bankruptcy case was reassigned to Judge Pepper. On reconsideration, Judge Pepper confirmed Judge Shapiro's previous ruling. On appeal, District Judge J.P. Stadtmueller agrees with the bankruptcy court's dismissal decision on the B.R. objection and ruled that the Integrity claim is allowed against B.R. The appeal is B.R. BROOKFIELD COMMONS NO. 1, LLC, and B.R. BROOKFIELD COMMONS NO. 2, LLC, Appellant, v. VALSTONE ASSET MANAGEMENT LLC, in its capacity as Attorney-in-Fact for TS7-E Grantor Trust, Appellee, Case No. 13-CV-310-JPS (E.D. Wis.). A copy of Judge Stadtmueller's May 24, 2013 Order is available at http://is.gd/2SY9P6from Leagle.com. BASHAS' INC: Ariz. Court Decertifies Working Condition Claim ------------------------------------------------------------ Senior District Judge Robert C. Broomfield in Arizona granted the request of Hispanic employees of Bashas' Inc. for class certification to the extent they are seeking certification of a class with respect to pay pursuant to Fed.R.Civ.P. 23(b)(3). Current and former Hispanic employees of Bashas' sued the grocery operator more than a decade ago alleging race and national origin discrimination in violation of Title VII of the 1964 Civil Rights Act as amended, 42 U.S.C. Sec. 2000e, et seq., for both disparate impact and disparate treatment, and intentional race discrimination in violation of 42 U.S.C. Sec. 1981. The Plaintiffs allege that Bashas' has discriminated against them with respect to pay and working conditions. In 2005, the Arizona District court denied certification of a pay class, but granted certification as to the working conditions claim. In the ensuing years, the action has not moved beyond the class certification stage. In light of the Supreme Court decision in Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___, 131 S.Ct. 2541, 180 L.Ed.2d 374 (2011), the Bashas' employees now sought certification of the pay claim. Also in light of Dukes, Bashas' asked the District Court to reconsider its decision certifying the working conditions claim, and decertify that claim. In its ruling, the District Court certifies a class as follows: "All Hispanic workers currently and formerly employed by defendant Bashas' Inc. in an hourly position at any Food city retail store since April 4, 1998, who have been subject to the challenged pay policies and practices." The Court also ruled that the working conditions claim is decertified. The case is Jose Parra, Gonzalo Estrada, and Aurelia Martinez, Plaintiffs, v. Bashas', Inc. Defendant, No. CIV-02-0591-PHX-RCB (D. Ariz.). A copy of the District Court's May 31, 2013 Order is available at http://is.gd/5FpLqtfrom Leagle.com. Plaintiffs Jose Parra, Gonzalo Estrada and Aurelia Martinez are represented by Andrew Joseph Kahn, Esq. and Elizabeth A. Lawrence, Esq. -- ajk@dcbsf.com and eal@dcbsf.com -- at Davis Cowell & Bowe LLP; and Jocelyn D. Larkin -- jlarkin@impactfund.org -- at Impact Fund. Bashas' Incorporated is represented by Stephanie J. Quincy, Esq., Douglas David Janicik, Esq., and Elizabeth Anne Shallop Call, Esq. -- squincy@steptoe.com djanicik@steptoe.com and bcall@steptoe.com at Steptoe & Johnson LLP. United Food and Commercial Workers Union, Intervenor; and Local 99 United Food and Commercial Workers Union, Intervenor, are represented by Elizabeth A. Lawrence, Esq., and Jennifer S. Wedel, Esq., at Davis Cowell & Bowe LLP. About Bashas' Inc. Bashas' Inc. is a 77-year-old grocery chain that owns 158 retail stores located throughout Arizona. It is doing business as National Grocery, Bashas Food, Bashas' United Drug, Food City, Eddie's Country Store, A.J. Fine Foods, Western Produce, Bashas' Distribution Center, Sportsman's, and Bashas' Dine. The Company and its affiliates filed for Chapter 11 bankruptcy protection on July 12, 2009 (Bankr. D. Ariz. Case No. 09-16050). Frederick J. Petersen, Esq., at Mesch, Clark & Rothschild, P.C., assisted the Debtors in their restructuring efforts. Michael W. Carmel, Ltd., served as the Debtors' co-counsel. Deloitte Financial Advisory LLP served as financial advisors. Epiq Bankruptcy Solutions, LLC, served as claims and notice agent. In its bankruptcy petition, Bashas' estimated assets and debts of $100 million to $500 million as of the Petition Date. Judge James M. Marlar confirmed Bashas' Chapter 11 reorganization plan in August 2010. BLUE SPRINGS: Court Confirms Amended Plan ----------------------------------------- Blue Springs Ford Sales, Inc., notified the U.S. Bankruptcy Court for the Western District of Missouri, at Kansas City, that the effective date of its Amended Plan of Reorganization is extended until June 25, 2013. The Court confirmed the Amended Plan on June 10 after determining that the Plan satisfies the confirmation requirements under Section 1129 of the Bankruptcy Code. The Plan contemplates the Debtor continuing its business operations without significant change and retaining its existing management. Creditors holding allowed administrative expense claims and creditors holding allowed priority tax claims will be paid in full. Secured creditors holding allowed secured claims will be paid in full according to their existing loan documents, except for modifying various maturity dates and, in some cases, interest rates, to "fit" with Reorganized Debtor's anticipated financial condition for the balance of those loans. Holders of general unsecured trade creditor claims will be paid in full and receive cash, with interest accruing at the Applicable Post-Judgment interest rate, in equal quarterly payments commencing on the Distribution Date and continuing on the Periodic Distribution Dates until the two year anniversary of the Effective Date. Holders of general unsecured tort claims, which remain disputed and unliquidated, will receive cash, with interest accruing at the Application Post-Judgment Interest rate in equal quarterly payments commencing on the Distribution Date and continuing on the Periodic Distribution Dates until the second anniversary of the Effective Date in the total amount of $50,000. Holders of allowed general unsecured gift card/coupon claims will receive a gift card in the face amount of their allowed claim. The gift card must be redeemed by June 1, 2014. The gift card will be non-transferrable. Holders of general unsecured insider claims will receive cash with interest accruing at the Applicable Post-Judgment Interest Rate in equal quarterly interest-only payments commencing 12 months from the Distribution Date and continuing on the Periodic Distribution Dates until the 10th anniversary of the Confirmation Date. Holders of equity securities in the Debtor will retain their equity securities in the Reorganized Debtor. The Debtor is represented by Michael M. Tamburini, Esq., James E. Bird, Esq., and Andrew J. Nazar, Esq., at Polsinelli PC, in Kansas City, Missouri. 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. BOULDER BRANDS: Moody's Assigns 'B1' Ratings to $320MM Debt ----------------------------------------------------------- Moody's Investors Service assigned new ratings to Boulder Brands Inc.'s new $75 million senior secured revolving credit facility and its $245 million senior secured Term Loan B. The B1 Corporate Family Rating and B1-PD Probability of Default Rating are unchanged. Moody' assigned the following ratings: Boulder Brands, Inc. $75 million senior secured revolver expiring 2018 at B1 (LGD 3, 49%) $245 million senior secured term loan expiring 2020 at B1 (LGD 3, 49%) The following ratings are unchanged: Boulder Brands, Inc. Corporate Family Rating of B1 Probability of Default Rating of B1-PD Speculative Grade Liquidity Rating of SGL-2 The outlook is stable. The following ratings will be withdrawn upon the closing of the new facilities: $60 million senior secured revolver expiring 2017 of B1 (LGD 3, 47%) $240 million senior secured term loan expiring 2018 of B1 (LGD 3, 47%) All ratings are subject to the conclusion of the syndication as proposed and Moody's review of final documentation. Ratings Rationale: The B1 Corporate Family Rating reflects Boulder's limited scale, moderately high leverage, and the niche nature of its product offering. The rating also reflects the favorable growth prospects of the functional food product category, which Moody's believes will result in strong organic growth, especially within the gluten free segment. Moody's also expects strong free cash flow, which will result in a meaningful reduction in debt. The stable outlook is based upon Moody's expectation that the company will continue to post robust organic revenue growth and generate stable free cash flow to reduce debt meaningfully over the next 12 to 18 months. The outlook also reflects the favorable growth prospects for functional foods and health and wellness products generally. The outlook also takes into account the company's small size and the niche nature of its product offering. There is limited upward pressure on the rating given the company's limited scale and niche product offering. Factors that could drive an upgrade include meaningful growth in size and scale, further product and geographic diversification, and debt to EBITDA of 3.5 times or less on a sustained basis. The ratings could be downgraded if the company's credit metrics fundamentally weaken, if liquidity is constrained, or if the company engages in any material debt funded acquisitions that would increase leverage above 5.0 times for a sustained period. Other considerations that could drive the rating down would be EBIT margins deteriorating meaningfully for a sustained period or any material product recalls or supply chain issues that fundamentally weaken its brand equity. 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. Boulder Brands, Inc. is a consumer foods company that markets and manufactures a wide array of consumer food products for sale primarily in the U.S. and Canada. The business consists of two segments; 1) the Smart Balance segment with branded products in spreads, butter, grocery and milk; and 2) The Natural segment with Earth Balance, Glutino and Udi's branded products. The company generated revenue of $397 million for the twelve months ended March 31, 2013. BRIGHTSTAR CORP: Moody's Changes Outlook on 'Ba3' CFR to Negative ----------------------------------------------------------------- Moody's Investors Service changed the rating outlook on Brightstar Corp.'s debt to negative from stable. Moody's affirmed the debt ratings, including the Ba3 corporate family rating. The change in the outlook was prompted, in part, by Moody's views that leverage and free cash flow profile will likely be strained through 2014 as Brightstar invests greater financial resources to continue expanding its capabilities beyond its core global mobile distribution business. Issuer: Brightstar Corp. Outlook Actions: Outlook, Changed To Negative from Stable Affirmations: Probability of Default Rating, Affirmed Ba3-PD Corporate Family Rating, Affirmed Ba3 $350M 9.5% Senior Unsecured Regular Bond/Debenture, Affirmed B1 Ratings Rationale: Moody's believes that while Brightstar's strategy to broaden its product and services is prudent, the necessary investments, greater staffing requirements and added execution risks stand to pressure the credit metrics in the near term. Moreover, the low operating margins, between 2% to 4% over time, provide limited flexibility for operational missteps as Brightstar tries to build market share in the rapidly growing, but highly competitive, service of complete life cycle management of smartphones. Moody's is also concerned about Brightstar's sizable working capital needs and reliance on external financing during periods of significant revenue growth. This can result in extended periods of negative free cash flow and higher-than-normal debt levels, which may increase Brightstar's adjusted debt/EBITDA above 4.0 times through mid-2014. Moody's does note Brightstar's position as one of the leading global distributors of mobile products, and its capabilities as a supplier of distribution, logistics, inventory management and supply-chain services to its customers. Brightstar revamped its senior financial management team and is working to remediate control deficiencies identified by its auditors. Moody's notes that Brightstar has adequate liquidity, with about $117 million cash and equivalents on hand at March 31, 2013 although Moody's anticipates negative free cash flow over the coming year. Moody's also expects Brightstar to continue paying at least a portion of its preferred stock dividends so as not to trigger a penalty accrual rate. The outlook may be stabilized if management shows tangible progress in margin improvement towards 4% adjusted operating margin range, and retained cash flow to debt (Moody's adjusted) is maintained in the middle of the 10% to 20% range, while maintaining good liquidity. While not expected in the near term, ratings could be upgraded if Brightstar's revenue and operating profits continue to grow. These positive results could be demonstrated if Brightstar expands operating margins above 4.5% (Moody's adjusted) on a sustained basis, reduces operating and free cash flow margin volatility, generates consistently positive free cash flow leading to improved internal liquidity and sustains leverage below 2.5x total debt to EBITDA (Moody's adjusted). Ratings could be downgraded if Brightstar witnessed material vendor losses or intense competition from distributors and vendors/OEMs causing market share losses, pricing pressure and/or substantial margin erosion as well as a significant decline in internal liquidity. Additionally, if the company incurs a disproportionate amount of debt relative to additive EBITDA growth to pursue an acquisition or investment expected to result in total debt to EBITDA (Moody's adjusted) sustained above 4x, the rating could be downgraded. The principal methodology used in this rating was Global Distribution & Supply Chain Services Methodology published in November 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Brightstar Corp., based in Miami, Florida, is a leading global value-added distributor of wireless handsets, smartphones, tablets and their related accessories serving major technology original equipment manufacturers, network operators and retailers. BROOKFIELD RESIDENTIAL: Moody's Rates New $400MM Sr. Notes 'B2' --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the proposed new $400 million senior unsecured notes due 2022 of Brookfield Residential Properties, Inc. Brookfield Residential Properties Inc. and Brookfield Residential US Corporation are co-issuers of the proposed notes. At the same time, Moody's affirmed the company's B1 corporate family rating, B1-PD probability of default rating, B2 rating for the existing $600 million 6.5% senior unsecured notes due 2020, and SGL-2 speculative grade liquidity rating. The rating outlook is stable. Ratings Rationale: The following rating actions were taken: $400 million senior unsecured notes due 2022, assigned a B2, LGD4-62%; Corporate family rating, affirmed at B1; Probability of default rating, affirmed at B1-PD; $600 million 6.5% senior unsecured notes due 2020, affirmed at B2, LGD4-62%; Speculative grade liquidity rating, affirmed at SGL-2; The rating outlook is stable. Approximately $310 million of the net proceeds from the new $400 million senior unsecured note offering will be used to repay the company's outstanding project debt in the U.S. and reduce the amounts outstanding under revolving credit facilities in the U.S. and Canada. The remainder of the net proceeds will increase cash on Brookfield's balance sheet. The transaction will result in pro forma adjusted homebuilding debt to capitalization rising to 50% from 48% at March 31, 2013. Following the note offering, Brookfield expects to put in place a new $200 million senior unsecured revolving credit facility due 2017. While the transactions result in higher debt levels, they improve the company's liquidity by putting in place permanent financing and increasing revolver capacity. The B1 corporate family rating reflects Brookfield's relatively short operating track record in its current configuration; complex capital structure; moderate size and concentration; the generally increased risk of a business model that incorporates substantial land development vs. a pure homebuilding model, although Brookfield has a very good track record in its land development activities; typically low cash balances; and the risk of potential overbuild in the Greater Toronto Area. At the same time, the rating incorporates the company's solid positions in many of the markets it serves; healthy gross margins and profitability, augmented by its expertise in land development; and moderate homebuilding debt to capitalization. The rating is also supported by the small amount of recourse joint venture debt, and by substantial land holdings (20 years of total land supply, and 18 years of owned land supply), which reduces its need to constantly invest in new lot inventory. While the company's extensive land holdings map to a low rating on Moody's homebuilding methodology grid, Moody's employs a qualitative override based on its judgment that the land is fairly valued and that the Canadian housing market enjoys certain features and support mechanisms that are currently lacking in the US housing market. Moody's views Brookfield as being strongly positioned in its rating category. The stable outlook reflects Moody's expectations for continued improvement in the company's operating performance, including relatively healthy gross margins, combined with the maintenance of the homebuilding debt to capitalization ratio below 55%. Brookfield has a good liquidity profile, reflected in Moody's SGL- 2 speculative grade liquidity assessment. The SGL-2 is supported by the company's pro forma cash position of $114 million, pro forma availability of $760 million under various secured and unsecured revolving credit facilities totaling approximately $1 billion (including the new $200 million revolver); comfortable room under financial covenants; and substantial land supply that can be sold to raise funds. The liquidity is, however, constrained by annual maturities of portions of its credit facilities and remaining project debt through 2018 and expected land investments that consume cash. The proposed new and the existing notes, which are unsecured and rated B2, are notched down from the corporate family rating because of the significant amount of secured debt in the capital structure. Upward rating pressure may result if the company's grows its size and scale, maintains solid profitability and liquidity, reduces debt leverage to below 45%, and simplifies its capital structure. Should the company's debt leverage rise above 55%, homebuilding interest coverage decline below 2.0x, the business model begin to encompass higher risk attributes, or liquidity deteriorate, negative rating pressure may occur. The principal methodology used in this rating was the Global Homebuilding Industry Methodology published in March 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. Brookfield Residential Properties is a land developer and a homebuilder, established in March 2011 through the merger between Brookfield Homes Corporation and BPO Residential (the residential land and housing division of Brookfield Office Properties). In 2012, approximately 56% of the company's revenues were generated in Canada and 44% in the U.S. In the trailing 12-month period ending March 31, 2013, Brookfield generated approximately $1.4 billion in revenue and $97 million in net income. BROOKFIELD RESIDENTIAL: S&P Rates $400MM Sr. Unsec. Notes 'BB-' --------------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B+' corporate credit rating on Brookfield Residential Properties Inc. (BRP). The outlook is stable. At the same time, S&P assigned a 'BB-' issue-level rating and a '2' recovery rating to the proposed offering of $400 million of senior unsecured notes due 2022. The '2' recovery rating indicates prospects for a substantial recovery (70% to 90%) of principal in the event of payment default. The company plans to use proceeds from the notes to repay project-level debt and borrowings under its secured credit facilities, including debt incurred subsequent to the first quarter, as well as raise cash for general corporate purposes. "The ratings reflect an aggressive financial risk profile because of BRP's weak EBITDA-based metrics," said Standard & Poor's credit analyst George Skoufis. "We acknowledge the reduction in secured debt that will result from the proposed refinancing, yet we expect BRP to maintain access to six separate credit facilities with total capacity growing to $1.1 billion, which is significant relative to its size," he added. S&P views the business risk profile as "weak." BRP's operations rely on the cyclical and capital-intensive land development and homebuilding businesses. Over the near to intermediate term, the company should be well positioned to produce growth out of both segments as housing continues to steadily recover. S&P also views BRP's management and governance as "fair." "The outlook is stable. We expect continued stability in BRP's Canadian markets and steady recovery in the U.S. housing markets to support revenue and EBITDA growth leading to steady credit metrics and continued adequate liquidity. The land development business, while cyclical, should support BRP's growth as many homebuilders continue to invest in new land to support future growth. We would consider raising the rating if housing and land sales are more robust than we assume, primarily due to sustainable improvement in the U.S. housing market and steady performance in Canada, resulting in improved cash flow such that debt to EBITDA improves to the 3x to 4x range. Alternatively, we could lower the ratings if the recovery in the U.S. falters or the Canadian housing market softens such that debt to EBITDA doesn't improve over the next two years and/or liquidity becomes constrained," S&P noted. BUILDERS GROUP: Section 341(a) Meeting Scheduled for July 19 ------------------------------------------------------------ A meeting of creditors in the bankruptcy case of Builders Group & Development Corp. will be held on July 19, 2013, at 9:00 a.m. at 341 Meeting Room, Ochoa Building, 500 Tanca Street, First Floor, San Juan. Creditors have until Oct. 17, 2013, to submit their proofs of claim. For governmental agencies, the bar date will be Dec. 16, 2013. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Builders Group & Development Corp., doing business as Cupey Professional Mall, sought Chapter 11 protection (Bankr. D.P.R. Case No. 13-04867) on June 12 in San Juan, Puerto Rico, its home- town. The company sought bankruptcy on the eve of a foreclosure sale of its property. The Debtor estimated at least $10 million in assets and liabilities in its petition. The Debtor is represented by G A Carlo-Altieri & Associates. Jose M. Monge Robertin, CPA, serves as accountant. CIMASA PROPERTIES: Motel Owner Files Ch.11 to Avoid Foreclosure --------------------------------------------------------------- CIMASA Properties, LLC, owner of the Quality Inn motel in Morehead City, North Carolina, sought Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 13-03675) on June 7, 2013. Judge Randy D. Doub presides over the case. George M. Oliver, Esq., at Oliver Friesen Cheek, PLLC, serves as the Debtor's counsel. The motel operator scheduled $4,122,315 in assets and $3,576,178 in liabilities. A list of the Company's six largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/nceb13-3675.pdf The petition was signed by Steven Arp, member/manager. Chris Bagley, writing for the Triangle Business Journal, reports that the bankruptcy appeared to be aimed at staving off a foreclosure action by First Bank of Troy. CIMASA Properties owes First Bank $2.7 million on a mortgage. CIMASA also owes nearly $800,000 to a second secured lender and about $150,000 to a range of trade creditors. According to Mr. Bagley, one of CIMASA's minority owners is suing it in Mecklenburg County for money owed. CONGROLEUM CORP: Integrity Insurance Ducks Asbestos Coverage ------------------------------------------------------------ Ama Sarfo of BankruptcyLaw360 reported that New Jersey appeals court upheld a liquidation court ruling that struck bankrupt Congoleum Corp.'s requests for excess insurance coverage from Integrity Insurance Co. for asbestos-related claims because the claims' liability and value allegedly weren't fixed by a deadline in Integrity's amended liquidation closing plan. According to the report, the Congoleum Plan Trust told the Appellate Division it only sought approval for claims that were identified, processed and settled before the June 2009 deadline. The Appellate Division said the claims couldn't be approved, the report related. About Congoleum Corporation Based in Mercerville, New Jersey, Congoleum Corporation (PINKSHEETS: CGMCQ) -- http://www.congoleum.com/-- manufactures resilient sheet and tile and plank flooring products available in a wide variety of product features, designs and colors. The Company filed for Chapter 11 protection on December 31, 2003 (Bankr. D. N.J. Case No. 03-51524) as a means to resolve claims asserted against it related to the use of asbestos in its products decades ago. Richard L. Epling, Esq., Robin L. Spear, Esq., and Kerry A. Brennan, Esq., at Pillsbury Winthrop Shaw Pittman LLP, and Paul S. Hollander, Esq., and James L. DeLuca, Esq., at Okin, Hollander & DeLuca, LLP, represent the Debtors. The Asbestos Claimants' Committee is represented by Peter Van N. Lockwood, Esq., and Ronald Reinsel, Esq., at Caplin & Drysdale, Chtd. The Bondholders' Committee is represented by Michael S. Stamer, Esq., and James R. Savin, Esq., at Akin Gump Strauss Hauer & Feld LLP. Nancy Isaacson, Esq., at Goldstein Isaacson, PC, represents the Official Committee of Unsecured Creditors. R. Scott Williams, Esq., at Haskell Slaughter Young & Rediker, LLC, the Court-appointed Futures Claimants Representative, is represented by Roger Frankel, Esq., Richard Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick Herrington & Sutcliffe LLP, and Stephen B. Ravin, Esq., at Forman Holt Eliades & Ravin LLC. American Biltrite, Inc. (AMEX: ABL), which owns 55% of Congoleum, is represented by Matthew Ward, Esq., Mark S. Chehi, Esq., Christopher S. Chow, Esq., and Matthew P. Ward, Esq., at Skadden Arps Slate Meagher & Flom. Various entities have filed bankruptcy plans for the Debtors. In February 2008, the legal representative for future asbestos- related claimants; the asbestos claimants' committee; the official Committee of holders of the Company's 8-5/8% Senior Notes due August 1, 2008; and Congoleum jointly filed a joint plan of reorganization. Various objections to the Joint Plan were filed. In June 2008, the Bankruptcy Court issued a ruling that the Joint Plan was not legally confirmable. In August 2008, the Bondholders' Committee, the ACC, the FCR, representatives of holders of prepetition settlements and Congoleum entered into a term sheet describing the proposed material terms of a new plan of reorganization and a settlement of avoidance litigation with respect to prepetition claim settlement. Certain insurers and a large bondholder filed objections to the Litigation Settlement or reserved their rights to object to confirmation of the Amended Joint Plan. The Bankruptcy Court approved the Litigation Settlement in October 2008. The Amended Joint Plan was filed in November 2008. In January 2009, certain insurers filed a motion for summary judgment seeking denial of confirmation of the Amended Joint Plan. On February 26, 2009, the Bankruptcy Court rendered an opinion denying confirmation of the Amended Joint Plan. Moreover, the Bankruptcy Court dismissed Congoleum's bankruptcy case. On February 27, 2009, Congoleum and the Bondholders' Committee appealed the Order of Dismissal and the ruling denying plan confirmation to the U.S. District Court for the District of New Jersey. The District Court overturned the dismissal order, and assumed jurisdiction of the bankruptcy proceedings. In June 2010, Congoleum Corporation obtained from the District Court of New Jersey an order confirming Congoleum's Plan of Reorganization. COUNTRYWIDE INSURANCE: A.M. Best Affirms 'C+' Fin. Strength Rating ------------------------------------------------------------------ A.M. Best Co. has revised the outlook to stable from negative and affirmed the financial strength rating of C+ (Marginal) and the issuer credit rating of "b-" of Country-Wide Insurance Company (CWIC) (New York, NY). The revision in the outlook for both ratings reflects the effect of management's continued efforts to improve performance in light of the recent regulatory changes within New York State regarding the insurance claim timeframes specific to Personal Injury Protection (PIP) claims going forward. This recent change will allow an insurance company to deny suspected abusive or fraudulent PIP claims when it has requested information from a health care provider to support its position that the treatment rendered was medically necessary, and such evidence is not provided within the allotted 120-day period. Management expects this change to lessen reserve requirements and loss adjustment expenses over time. The ratings, however, continue to reflect CWIC's continued underperformance (although improved) of its underwriting returns due to levels of previous elevated exposure growth, continued elevated gross and net underwriting leverage, historical unfavorable loss reserve development trends and dependence on reinsurance, all of which have led to the company's recent marginal risk-adjusted capitalization. These negative rating attributes are partially offset by management's continued proactive efforts to improve and buttress the stringent underwriting and claims controls, as well as its efforts to fortify reserves and lower its reinsurance dependency by reducing its quota share reinsurance contract in the current year. A.M. Best does not expect to upgrade or downgrade (or place a positive/negative outlook on) the ratings of CWIC in the near to mid-term. Such actions would ensue if the group continues to improve its performance and add to capital to surplus, or conversely, was to resume incurring material losses in its underwriting results despite recent corrective efforts, or have further substantial adverse reserve development relative to its peers, as well as the industry's averages. DALLAS ROADSTER: Court to Consider Plan Outline on July 22 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Texas will convene an adequacy hearing on July 22, 2013, at 10:30 a.m., for the Third Amended Disclosure Statement describing the Chapter 11 plan of Dallas Roadster Limited. Interested parties are given until July 15 to file written objections on the Third Amended Disclosure Statement. The Third Amended Disclosure Statement, dated May 24, 2013, provides additional information concerning the background, characterization, treatment and nature of certain classes under the plan -- specifically Claim Classes 7, 8, 11 & 12: Class 7 Investors -- are creditors who have loaned the Debtor Money, but whose loans are not in writing and no explicit repayment terms were agreed on. The Disclosure Statement notes that none of the members of this Class is an insider of Dallas Roadster. Class 8 Alberto Dal Cin -- is someone who has historically loaned money to the Debtor and has received repayment for such loans. The Plan characterizes Class 8 Claim as an unsecured claim to be repaid in the amount of whatever is determined to be his net investment in Dallas Roadster. The Plan contemplates that his net investment will be repaid by monthly payments of $8,000 each. Classes 11 & 12 (and IEDA Classes 9 and 10) Subrogation Rights -- these classes are both related to contingent claims. The Plan states that the Debtor will have a right of subrogation in the event it is required to make any payments by virtue of its contingent liability. A full-text copy of the 3rd Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/DALLASROADSTER_3rdAmdDS.PDF As reported by The Troubled Company Reporter on Feb. 6, 2013, the Bankruptcy Court denied approval of the Second Disclosure Statement. The Court overruled objections regarding restrictions on Debtors' expenditures but the Court sustained objections with respect to, among other things, disclosures regarding litigation costs, treatment of insider claims, and subrogation rights. Objections were filed by Texas Capital Bank, N.A., and Alberto Dal Cin. The TCR also reported on June 3, 2013, that the Court entered a ruling that the Debtors will have until Aug. 15, 2013 to either confirm a plan of reorganization or convert their cases into Chapter 7 proceedings. If the Debtors fail to timely comply with the case resolution deadline, the U.S. Trustee may upload an order converting the cases to Chapter 7 without the requirement for further notice or hearing. The Debtors may obtain an extension of the case resolution deadline though for cause on motion filed before the case resolution deadline. About Dallas Roadster and IEDA Enterprises Dallas Roadster, Limited, owns and operates an auto dealership with locations in both Richardson and Plano, Texas. IEDA Enterprises, Inc., is the general partner of Roadster. Dallas Roadster and IEDA Enterprises filed for Chapter 11 bankruptcy (Bankr. E.D. Tex. Case Nos. 11-43725 and 11-43726) on Dec. 12, 2011. Chief Judge Brenda T. Rhoades oversees both cases. J. Bennett White, P.C., replaced DeMarco Mitchell, PLLC, as the Debtors' bankruptcy counsel. Dallas Roadster disclosed $9,407,469 in assets and $4,554,517 in liabilities as of the Chapter 11 filing. The Debtors' assets were placed under the care of a receiver on Nov. 16, 2011, pursuant to a state court action by Texas Capital Bank, National Association. No trustee has been appointed in the Chapter 11 cases. DEEP PHOTONICS: Plans to Use Litigation Profits to Pay Creditors ---------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that laser manufacturer Deep Photonics Corp. submitted its Chapter 11 reorganization plan, which relies on the proceeds of pending litigation in Oregon against its former CEO as well as future company profits to repay its general unsecured creditors in full. According to the report, the company owes about $3.2 million to its unsecured creditors, about $1.9 million of which is held by the defendants in the state litigation against former CEO Joseph G. LaChapelle, other former employees, a competitor and a former customer. About Deep Photonics Deep Photonics Corporation filed a Chapter 11 petition (Bankr. D. Ore. Case No. 12-35626) on July 20, 2012. Deep Photonics designs and manufactures innovative solid-state fiber lasers. The Debtor scheduled $75,111,128 in assets and $4,917,393 in liabilities. Bankruptcy Judge Trish M. Brown presides over the case. Timothy J. Conway, Esq., at Tonkon Torp LLP, serves as the Debtor's counsel. The petition was signed by Theodore Alekel, president. DELTA AIR: Fitch Affirms 'B+' Issuer Default Rating --------------------------------------------------- Fitch Ratings has revised Delta Air Lines, Inc.'s (DAL) Rating Outlook to Positive from Stable. In addition, Fitch has affirmed DAL's Issuer Default Rating (IDR) at 'B+'. The Positive Outlook revision is driven by Delta's continued solid operating performance, industry leading unit revenue growth, improving balance sheet, and continuing positive free cash flow generation, all of which could combine to move DAL's credit profile into the 'BB' rating category in the next 12 months. The ratings are also supported by DAL's competitive position in the U.S. airline industry, strong labor relations, credit metric levels, liquidity position, impact of net operating losses on cash taxes, ROIC focus, and structural cost reduction efforts. The company's Trainer fuel refinery strategy is a potential source of savings and competitive advantage in the intermediate term, but the project is still in its early stages at this point and remains unproven. The ratings are also supported by underlying improvements in the airline industry including consolidation among the legacy carriers and capacity constraint, which have led to an improved risk profile and better profitability for the industry as a whole. Key credit concerns include the company's underfunded pension, recently initiated shareholder focused cash deployment actions, average age of the aircraft fleet, and near-term pressures on non- fuel CASM, partly offset by structural cost reduction actions. Other concerns include industry risks that are typical for any airline, including fuel prices, event risk, and macroeconomic concerns. Key Rating Drivers: Fitch views Delta as one of the strongest competitors among the legacy airlines in recent years, consistently outperforming its peers in several areas. Monthly unit revenue growth (PRASM) has topped the industry average for nearly two years driven by market share gains in corporate travel, and by continued capacity constraint. Delta's strategy to win high margin corporate accounts and expand its presence in the lucrative New York market is making significant progress. Revenue from corporate travelers rose by 11% in 2012 despite an overall decrease in capacity. Fitch believes the recent investment in Virgin Atlantic could provide another boost to Delta's corporate market share later this year as the company begins to offer more frequent service from New York to London. In addition, capacity discipline has kept load factors in the mid 80% range, and Delta plans to keep capacity flat to slightly down in 2013, which is in line with expectations for most other U.S. airlines. Fitch expects that industry-wide capacity constraint should foster an environment where Delta can continue to generate meaningful unit revenue growth, which should continue through 2013 based on sustained high load factors and steady demand for air travel. However, the pace is expected to moderate compared to the significant gains in 2011 and 2012. The Positive Outlook also reflects DAL's above average operating margins. Latest 12 months (LTM) EBITDA margin as of March 31, 2013 was 11.2%, which was higher than all other major U.S. carriers with the exception of Southwest. Delta maintains a unit cost advantage over most of the industry due to the costs it was able shed in bankruptcy, and the synergies realized after the merger with Northwest Airlines. Delta is facing some near-term headwinds in the cost area as the higher wage rates agreed to in last year's pilot contract start to take effect. However, these pressures are partially mitigated by the $1 billion structural cost reduction program started in 2012. Initiatives include reducing its fleet of regional jets, redesigning its maintenance program, and increasing employee productivity. Fitch expects EBITDA margins to remain relatively flat in the intermediate term, but to remain in the double digits, representing solid results for a typically low-margin industry. Significant debt reduction in recent years also contributes to DAL's improving credit profile. On an unadjusted basis, Delta has paid down just over $4 billion since year-end 2009. Adjusted debt, which includes operating leases, is down by $6.5 billion over the same time period. Debt reduction was $1 billion in 2012 and approximately $400 million in the first quarter of 2013. Fitch's projections incorporate modest additional debt reduction in the rest of 2013, but the company has the opportunity to reduce debt more than $1.5 billion through debt maturities and amortization as well as buying out operating leases. Debt maturities through the end of 2015 total approximately $4 billion. Adjusted leverage (gross adjusted debt/EBITDAR) as of March 31, 2013 was 4.1x, which is below most industry peers and is down significantly from as high as 9.5x at year-end 2009. Fund from operations (FFO) adjusted leverage was 5.5x, reflecting the full impact of DAL's high pension contributions. The company remains committed to further debt reduction and expects to reach its goal of $10 billion in adjusted net debt (calculated differently than Fitch's amounts) this year. Delta has also set a new goal of reducing adjusted net debt to $7 billion over the next five years. Fitch views DAL's focus on improving the health of its balance sheet to be a notable credit positive. Consistent free cash flow (FCF) generation has been a distinguishing factor for Delta, with four consecutive years of positive FCF. From 2009-2012, Delta generated cumulative FCF of $3.2 billion or 2.4% of cumulative revenue. This is slightly lower on a percentage of revenue basis compared to United, but well above most other U.S. airlines, which generated either negative or minimal free cash for the period. Delta generated $508 million in free cash in 2012, which is significant given that average fuel prices that were higher than those seen in 2008. Fitch conservatively projects FCF could be lower in 2013 due to increased capital spending, but is expected to rebound beginning in 2014 when capital expenditures are expected to be lower. Liquidity and financial flexibility remain consistent with the rating. Delta had $3.6 billion of cash on hand at the end of the first quarter plus $1.8 billion in availability under various credit facilities. Cash plus revolver capacity equates to 14% of LTM revenue, which is at the low end of the peer group. However, current liquidity is sufficient to cover near term maturities and day to day operations. In addition, Delta has lighter capital spending than some of its airline peers given its strategy of purchasing older planes, thus avoiding the capital requirements that accompany heavy delivery schedules of new aircraft. Primary rating concerns include cash commitments for Delta's significantly underfunded pension plan and newly implemented dividend and share repurchase programs. Required pension contributions are expected to be around $700 million annually for the next 10 years, representing a significant and inflexible cash commitment. In recent years Delta has produced ample cash flow to meet these requirements, but pension contributions could become a meaningful burden in the event of an economic downturn. DAL's pension deficit was approximately $13.3 billion at the end of 2012, and it was only 38% funded. Delta has implemented a dividend of $200 million/year and intends to buy back $500 million in shares over the next three years. Although the cash commitments represent a concern given DAL's pension obligations and still high debt levels, Fitch notes that Delta initiated its dividend/repurchase programs at relatively modest amounts, and Fitch forecasts the company should maintain the ability to invest in the business or pay down debt unless cash flow becomes strained. Other concerns include industry risks that are typical for any airline, including fuel prices, event risk, and macroeconomic concerns. The industry remains highly leveraged to the overall macroeconomic environment. A future downturn could significantly impact the demand for air travel resulting in lower yields and load factors and higher unit costs. Somewhat offsetting this risk is the correlation between oil prices and economic activity. In a recession scenario, oil prices would likely drop, lowering the company's largest expense item. The airline industry also remains highly competitive. Not only do domestic carriers compete with one another, but increasingly, well-funded Middle Eastern carriers are growing their international footprints, creating more competition for lucrative long-haul routes. Recovery Ratings: The notching for Delta's secured debt (see below) reflects Fitch's recovery expectations under a scenario in which distressed enterprise value is allocated to the various debt classes. Senior debt which is secured both by aircraft and non- aircraft collateral (including slots, gates, routes, ground equipment, etc.) is expected to receive substantial recovery (91%- 100%, implying a rating of 'RR1') in a default scenario. Rating Sensitivities A positive rating action could be considered if adjusted leverage declines below 4.0x, the company continues to pay down meaningful amounts of debt, and FCF generation is stronger than expected. Successful implementation of cost saving measures which offset higher labor costs and help to maintain operating margins would also be viewed as a credit positive. A negative rating action is not anticipated at this time, but potential negative rating drivers include a steep macroeconomic decline or an unexpected fuel or demand shock. Ratings could also be pressured if Delta were to increase dividends or share repurchases to an extent that impacts the health of the balance sheet. Fitch has affirmed Delta's ratings as follows: Delta Air Lines, Inc. -- IDR at 'B+'; -- $1.2 billion senior secured revolving credit facility due 2016 at 'BB+/RR1'; -- $1.4 billion senior secured term loan due 2017 at 'BB+/RR1'. DEMCO INC: Creditors Have Until Aug. 1 to File Proofs of Claim -------------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of New York established Aug. 1, 2013, as the deadline for any individual or entity to file proofs of claim against Demco, Inc. Demco, Inc., aka Decommissioning & Environmental Management Company, is a specialty trade contractor based in West Seneca, New York, which provides demolition services, nuclear work, environmental clean-up, disaster response and a variety of other services throughout the United States and, on a project-by-project basis, internationally. Some of Demco's better known demolition projects in the past have included the Rocky Flats Nuclear Power Plant, Yankee Stadium, the Orange Bowl, Buffalo Memorial Auditorium, and the Sunflower Army Ammunition Plant. Demco filed for Chapter 11 protection (Bankr. W.D.N.Y. Case No. 12-12465) on Aug. 6, 2012. Bankruptcy Judge Michael J. Kaplan presides over the case. Daniel F. Brown, Esq., at Andreozzi, Bluestein, Fickess, Muhlbauer Weber, Brown, LLP, represents the Debtor in its restructuring effort. The Debtor estimated assets and debts at $10 million to $50 million. The petition was signed by Michael J. Morin, controller. Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three creditors to serve on the Official Committee of Unsecured Creditors. First Niagara Bank, the cash collateral lender, is represented by William F. Savino, Esq., at Damon Morey. DETROIT, MI: S&P Lowers Ratings on 3 COPs to D on Debt Non-Payment ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its long-term and underlying ratings (SPURs) to 'D' from 'CC' on the city of Detroit, Mich.'s series 2005A, 2006A, and 2006B pension obligation certificates of participation. "The downgrade reflects non-payment of debt service on the scheduled principal and interest payment date of June 15," said Standard & Poor's credit analyst Jane Hudson Ridley. DETROIT, MI: Recovery Plan Dips Into Pensions to Keep City Afloat ----------------------------------------------------------------- Chris Christoff & Steven Church, writing for Bloomberg News, reported that Detroit Emergency Manager Kevyn Orr's proposal to cut pension benefits previously thought sacrosanct for 30,000 workers and retirees may tip Detroit into bankruptcy if unions don't play along. According to the report, getting dispassionate bondholders to take partial payment will be easier than wresting retirement cuts from unions, said Ken Schneider, a Detroit bankruptcy lawyer. He said Orr's June 20 meeting with unions and creditors meant to frame negotiations over $17 billion in debt and obligations may presage the largest U.S. municipal bankruptcy. "It's one thing for union leaders to say, 'This was forced on us by a court,' and something else to say, 'We agreed to this,'" Schneider said in a telephone interview with Bloomberg. "That's a harder sell to your members." Orr's plan will test retirees' contention that Michigan's constitution protects vested pension benefits, the report pointed out. No such shield exists, the state-appointed manager's advisers said June 14 when they unveiled his plan to restructure Michigan's largest city, a former auto-manufacturing powerhouse that lost one-quarter of its population since 2000. Orr has said that if he doesn't get what he wants, Chapter 9 bankruptcy would be a last resort. Detroit missed a $39.7 million payment on debt issued to bolster its pensions that was due June 14, its first failure to repay bondholders, the report recalled. The city has about $1.5 billion of such obligations, which Fitch Ratings cut yesterday to D, its lowest credit grade. DESERT LAND: Gonzalez Loses Bid for Preliminary Injunction ---------------------------------------------------------- District Judge Robert C. Jones in Nevada denied the Plaintiff's Motion for Preliminary Injunction in the lawsuit, TOM GONZALES, Plaintiff, v. DESERT LAND, LLC et al., Defendants, No. 3:11-cv- 00613-RCJ-VPC (D. Nev.). A copy of the Court's May 28, 2013 Order is available at http://is.gd/vzWWYDfrom Leagle.com. On Dec. 7, 2000, Tom Gonzales loaned $41.5 million to Defendants Desert Land, LLC and Desert Oasis Apartments, LLC to finance their acquisition and/or development of land ("Parcel A") in Las Vegas, Nevada. The loan was secured by a deed of trust. On May 31, 2002, Desert Land and Desert Oasis Apartments, as well as Desert Ranch, LLC (the "Desert Entities"), each filed for bankruptcy, and Judge Jones jointly administered those three bankruptcies while sitting as a bankruptcy judge. Judge Jones confirmed the second amended plan, and the Confirmation Order included a finding that a settlement had been reached under which Gonzales would extinguish his note and reconvey his deed of trust, Gonzales and another party would convey their fractional interests in Parcel A to Desert Land so that Desert Land would own 100% of Parcel A, Gonzales would receive Desert Ranch's 65% in interest in another property, and Gonzales would receive $10 million if Parcel A were sold or transferred after 90 days (the "Parcel Transfer Fee"). Gonzales appealed the Confirmation Order, and the Bankruptcy Appellate Panel affirmed, except as to a provision subordinating Gonzales's interest in the Parcel Transfer Fee to up to $45 million in financing obtained by the Desert Entities. Gonzales sued Desert Land, Desert Oasis Apartments, Desert Oasis Investments, LLC, Specialty Trust, Specialty Strategic Financing Fund, LP, Eagle Mortgage Co., and Wells Fargo (as trustee for a mortgage-backed security) in state court for: (1) declaratory judgment that a transfer has occurred entitling him to the Parcel Transfer Fee; (2) declaratory judgment that the lender Defendants knew of the bankruptcy proceedings and the requirement of the Parcel Transfer Fee; (3) breach of contract (for breach of the Confirmation Order); (4) breach of the implied covenant of good faith and fair dealing (same); (5) judicial foreclosure against Parcel A under Nevada law; and (6) injunctive relief. Defendants removed to the Bankruptcy Court. The Bankruptcy Court recommended withdrawal of the reference because Judge Jones issued the underlying Confirmation Order while sitting as a bankruptcy judge. One or more parties so moved, and the Court granted the motion. The Court dismissed the second and fifth causes of action. The first, third, fourth, and sixth claims against the Desert Entities and Eagle Mortgage Co. remained at that stage, and the Court later granted Defendants' counter-motion for summary judgment. Most recently, the Plaintiff asked the Court to reconsider and to clarify which, if any, of its claims remained, and the Defendants asked the Court to certify its March 4, 2013 summary judgment order under Rule 54(b) and to enter judgment in their favor on all claims. The Court denied the motion to reconsider, clarified that it had intended to rule on all claims, certified the March 4, 2013 ruling for immediate appeal, and invited the Defendants to submit a proposed judgment, as the Plaintiffs had not yet done so. The Defendants have now submitted a proposed judgment, and the Plaintiff has asked the Court to enjoin the Defendants from further encumbering Parcel A with loans or mechanic's liens until the Court of Appeals rules. In denying the Plaintiff's Motion for Preliminary Injunction, Judge Jones said the Plaintiff has not shown a likelihood of irreparable harm, because his claim is one for payment of money under the Confirmation Order, i.e., the Parcel Transfer Fee. That measure of relief cannot be irreparably lost by any liens over- encumbering Parcel A. The transfer of Parcel A is simply the trigger for the payment of the Parcel Transfer Fee under the Confirmation Order. Plaintiff has no direct interest in Parcel A itself. Even if the Court of Appeals were to reverse on this point and hold that the Plaintiff has an immediately enforceable equitable lien against Parcel A itself to secure the payment of the Parcel Transfer Fee, the Plaintiff's right to the title of the land is not at risk, and any lost value of that collateral through encumbrance or waste is plainly reparable with money damages. The Plaintiff can be assured that the Court will, if the Court of Appeals reverses and rules that the Plaintiff has an equitable lien against Parcel A, ensure that he is fully compensated, i.e., that the Court will retain jurisdiction to adjudicate any deficiency after foreclosure of Parcel A to satisfy the Parcel Transfer Fee. Specialty Trust, Inc., Debtor, In Re, is represented by Douglas D. Gerrard, Esq., at Gerrard, Cox & Larsen; and Michelle N. Kazmar, Esq., and Sallie B. Armstrong, Esq., -- sarmstrong@downeybrand.com -- at Downey Brand LLP. The lawyers also represent defendants Specialty Mortgage Corp., and Specialty Strategic Financing Fund LLC. Eagle Mortgage Company, Inc., Defendant, is represented by Eagle Mortgage Company, Inc. Tom Gonzales is represented by Carol L. Harris, Esq., Matthew S. Carter, Esq., and J. Randall Jones, Esq. -- c.harris@kempjones.com m.carter@kempjones.com and r.jones@kempjones.com -- at Kemp, Jones & Coulthard, LLP; Janet L. Chubb, Esq., and Louis Martin Bubala, III -- jchubb@armstrongteasdale.com and lbubala@armstrongteasdale.com -- at Armstrong Teasdale, LLP; and Steven Mishan, Esq., at The Law Offices of Steven Mishan, P.A. DOGWOOD PROPERTIES: Seeks Further Use of M&F Cash Collateral ------------------------------------------------------------ Dogwood Properties, G.P., filed a second motion seeking authority from the U.S. Bankruptcy Court for the Western District of Tennessee, Western Division, to further use cash collateral securing its prepetition indebtedness with Merchants & Farmers Bank. The Debtor is obligated to M&F on eight individual Promissory Notes secured by deeds of trust and assignments of rents on eight single-family rental homes. One of the M&F properties is located at 2281 Ardmore, in Memphis, Tennessee. On January 22, 2013, 2281 Ardmore was vandalized. Dogwood filed an insurance claim for damage caused by the vandalism event with its insurance provider, Builders Mutual. Dogwood received a check in the amount of $19,379 from Builders Mutual. Contractor Chad Wilson has provided an estimate of repair and restoration cost to Dogwood. Chad Wilson estimates that total repair and restoration cost will be $22,400. By the Motion, the Debtor seeks authority to use the insurance proceeds to repair damage to the house located at 2281 Ardmore. M&F objects to the Debtor's motion, complaining that (a) the insurance proceeds were not turned over to M&F Bank in accordance with the prepetition loan documents; (b) the Debtor submitted no other competing bids or repair estimates other than that of Mr. Wilson; (c) the Debtor provided no information regarding Mr. Wilson's contractor credentials, licenses, and insurance; and (d) 2281 Ardmore Cove is in Frayser. Without waiving any legal right or privilege, including, but not limited to, valuation of M&F Properties, M&F Bank offers full and final release of its lien on 2281 Ardmore Cove in exchange for the insurance check in the amount of $19,379. A hearing on the Debtor's request will be held on June 19, 2013, at 10:00 AM. Russell W. Savory, Esq., at Gotten, Wilson, Savory & Beard, PLLC, in Memphis, Tennessee, for the Debtor. Brent A. Heilig, Esq., in Memphis, Tennessee, for M&F. About Dogwood Dogwood Properties, G.P., owns and operates 110 single-family rental homes, all located in Shelby and DeSoto counties in Tennessee. The total value of its real estate holdings is estimated to be $9,985,000. Dogwood has nine secured lenders who are owed a total of approximately $14,486,000. Dogwood Properties filed a Chapter 11 petition (Bankr. W.D. Tenn. Case No. 13-21712) on Feb. 16, 2013. Judge Jennie D. Latta presides over the case. Gotten, Wilson, Savory & Beard, PLLC, serves as the Debtor's counsel. DRAGON BRIGHT: Incurs $908K Net Loss in 2012 -------------------------------------------- Dragon Bright Mintai Botanical Technology (Cayman) Limited filed on June 17, 2013, its annual report on Form 20-F for the fiscal year ended Dec. 31, 2012. Albert Wong & Co., in Hong Kong, noted that the Group reported a total comprehensive loss of approximately $0.9 million for the year ended Dec. 31, 2012, and had accumulated losses attributable to owners of the Company of approximately $2.3 million at Dec. 31, 2012. "In addition, the Group has a limited operating history and generated revenue US$14,982 in 2012. These conditions raise substantial doubt about the Group's ability to continue as a going concern." The Company reported a net loss of $907,804 on $14.092 of revenue in 2012, compared to a net loss of $1.9 million on $47 of revenue in 2011. The Company's balance sheet at Dec. 31, 2012, showed $2.6 million in total assets, $1.6 million in total liabilities, and equity of $1.0 million. Dragon Bright Mintai Botanical Technology (Cayman) Limited is a holding company established on Feb. 17, 2011, as an exempted company incorporated with limited liability under the laws of the Cayman Islands. The Company is in the initial stages of developing a business in the forest seedling industry. Its main business is the mass propagation and sale of bamboo-willow seedlings and its secondary business is the sale of bamboo-willows as wood pulp generated from our trial bamboo-willow tree plantation business. EAST COAST BROKERS: Hearing on Case Dismissal Continued to June 24 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Florida, in a pro memo, continued until June 24, 2013, the hearing to consider U.S. Trustee's motion to dismiss the Chapter 11 cases of East Coast Brokers & Packers, Inc. As reported by the Troubled Company Reporter on May 29, 2013, Guy G. Gebhardt, the Acting U.S. Trustee for Region 21, by and through Denise E. Barnett, requested that the Court enter an order dismissing the cases, or in the alternative, converting the cases based on the Debtors' failure to provide proof of insurance coverage on substantial amount of the Debtors' real and personal property and other matters. As reported by the TCR on May 9, 2013, MLIC Asset Holdings LLC and MLIC CB Holdings LLC asked the Bankruptcy Court to appoint a Chapter 11 trustee, or dismiss the Debtors' cases. According to the MLIC entities, the Debtors, among other things, had mishandled the potential rents from employees, failed to pay taxes, failed to maintain insurance, has inadequate security regarding the Debtors' personal and real property, and delayed the filing of schedules and reports required under the Bankruptcy Code. About East Coast Brokers & Packers, Inc. East Coast Brokers & Packers, Inc., along with four related entities, sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 13-02894) in Tampa, Florida, on March 6, 2013. East Coast Brokers & Packers disclosed $12,663,307 in assets and $75,181,975 in liabilities as of the Chapter 11 filing. Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, serves as counsel to the Debtors. According to the docket, the Chapter 11 plan and disclosure statement are due July 5, 2013. An official committee of unsecured creditors has not been appointed in the case. EAST COAST BROKERS: Taps Warren Averett as Accountants ------------------------------------------------------ East Coast Brokers & Packers, Inc., et al., ask the U.S. Bankruptcy Court for the Middle District of Florida for permission to employ Warren Averett LLC as certified public accountants. Warren Averett will, among other things, prepare the Debtors' federal and state tax returns and assist in the preparation of the Debtors' monthly operating reports. The hourly rates of Warren Averett's personnel are: Partner $300 Senior Manager $225 Manager $185 - $205 Senior $130 - $145 Associates $70 - $80 Supervisor $70 Warren Averett requires a $10,000 retainer before beginning the services. The retainer will be paid by Batista J. Madonia, III also known as Batista J. Madonia, Jr., a non-debtor. To the best of the Debtors' knowledge, Warren Averett is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About East Coast Brokers & Packers, Inc. East Coast Brokers & Packers, Inc., along with four related entities, sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 13-02894) in Tampa, Florida, on March 6, 2013. East Coast Brokers & Packers disclosed $12,663,307 in assets and $75,181,975 in liabilities as of the Chapter 11 filing. Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, serves as counsel to the Debtors. According to the docket, the Chapter 11 plan and disclosure statement are due July 5, 2013. An official committee of unsecured creditors has not been appointed in the case. EASTMAN KODAK: Creditors Agree to Backstop $406MM Rights Offering ----------------------------------------------------------------- Eastman Kodak Company on June 18 disclosed that, subject to Court approval, key creditors have agreed to backstop a $406 million rights offering for common stock in the company upon its emergence from Chapter 11. Kodak expects to use the proceeds of the rights offering to fund distributions under Kodak's revised Plan of Reorganization, including the repayment of its second lien creditors, who will no longer receive equity in the Plan. The proposed rights offering permits Kodak to offer its creditors up to 34,000,000 shares of common stock for the per share purchase price of $11.94, equivalent to approximately 85% of the equity of Kodak upon emergence. The mechanics of the offering will be detailed in full in the relevant Court filings. The creditors proposing the backstop commitment are GSO Capital Partners, BlueMountain Capital, George Karfunkel, United Equities Group and Contrarian Capital. "Attracting this additional funding is a strong vote of confidence in both Kodak's Plan of Reorganization and in the actions we have taken during our restructuring to create a solid future for our company," said Antonio M. Perez, Kodak's Chairman and Chief Executive Officer. "This agreement, which serves as a critical component of the capital structure for the emerging Kodak, positions us to comprehensively settle our obligations with our various key creditor constituencies." Kodak's Official Committee of Unsecured Creditors has worked closely with the company and the backstop commitment parties, and has informed Kodak that it fully supports the backstop commitment and related rights offering. Kodak has filed a motion to approve the backstop commitment with the U.S. Bankruptcy Court for the Southern District of New York, which is scheduled to be heard on June 25, 2013, at the same hearing as Kodak's motion to approve its Amended Disclosure Statement. Kodak also filed on June 18 an Amended Plan of Reorganization. In the coming days, Kodak intends to file a proposed Order regarding the Rights Offering Procedures and an Amended Disclosure Statement describing its Amended Plan. All of these are subject to Court approval. EASTMAN KODAK: Moxtek Opposes UK Pension Fund Agreement ------------------------------------------------------- Moxtek Inc. is opposing the technical aspects of Eastman Kodak Co.'s proposal to sell its personalized imaging and document imaging businesses to its U.K. pension fund to settle $2.8 billion of claims. In a June 17 filing, Moxtek criticized Kodak for giving insufficient information about its treatment of their license agreement and how the proposed deal would affect its rights under the agreement. Moxtek also said the information provided by Kodak isn't enough to convince creditors that the consideration received from the U.K. pension fund is "fair and reasonable." The tech company pointed out that aside from the insufficient appraisal or valuation information, the proposed asset sale "is not subject to higher and better offers or a public auction." Moxtek Inc. is represented by: David H. Leigh, Esq. RAY QUINNEY & NEBEKER P.C. 36 South State Street, Suite 1400 P.O. Box 45385 Salt Lake City, Utah 84145-0385 Telephone: (801) 532-1500 Facsimile: (801) 532-7543 E-mail: dleigh@rqn.com - and - Jeffrey A. Wurst, Esq. Jonathan S. Bodner, Esq. RUSKIN MOSCOU FALTISCHEK, P.C. East Tower, 15th Floor 1425 RXR Plaza Uniondale, New York 11556-1425 Tel: (516) 663-6600 About Eastman Kodak Rochester, New York-based Eastman Kodak Company and its U.S. subsidiaries on Jan. 19, 2012, filed voluntarily Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-10202) in Manhattan. Subsidiaries outside of the U.S. were not included in the filing and are expected to continue to operate as usual. Kodak, founded in 1880 by George Eastman, was once the world's leading producer of film and cameras. Kodak sought bankruptcy protection amid near-term liquidity issues brought about by steeper-than-expected declines in Kodak's historically profitable traditional businesses, and cash flow from the licensing and sale of intellectual property being delayed due to litigation tactics employed by a small number of infringing technology companies with strong balance sheets and an awareness of Kodak's liquidity challenges. In recent years, Kodak has been working to transform itself from a business primarily based on film and consumer photography to a smaller business with a digital growth strategy focused on the commercialization of proprietary digital imaging and printing technologies. Kodak has 8,900 patent and trademark registrations and applications in the United States, as well as 13,100 foreign patents and trademark registrations or pending registration in roughly 160 countries. Attorneys at Sullivan & Cromwell LLP and Young Conaway Stargatt & Taylor, LLP, serve as counsel to the Debtors. FTI Consulting, Inc., is the restructuring advisor. Lazard Freres & Co. LLC, is the investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Official Committee of Unsecured Creditors has tapped Milbank, Tweed, Hadley & McCloy LLP, as its bankruptcy counsel. Michael S. Stamer, Esq., David H. Botter, Esq., and Abid Qureshi, Esq., at Akin Gump Strauss Hauer & Feld LLP, represent the Unofficial Second Lien Noteholders Committee. The Retirees Committee has hired Haskell Slaughter Young & Rediker, LLC, and Arent Fox, LLC as Co-Counsel; Zolfo Cooper, LLC, as Bankruptcy Consultants and Financial Advisors; and the Segal Company, as Actuarial Advisors. Robert J. Stark, Esq., Andrew Dash, Esq., and Neal A. D'Amato, Esq., at Brown Rudnick LLP, represent Greywolf Capital Partners II; Greywolf Capital Overseas Master Fund; Richard Katz, Kenneth S. Grossman; and Paul Martin. Kodak completed the $527 million sale of digital-imaging technology on Feb. 1, 2013. Kodak intends to reorganize by focusing on the commercial printing business. At the end of April 2013, Kodak filed a proposed reorganization plan offering 85 percent of the stock to holders of the remaining $375 million in second-lien notes. The other 15 percent is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. ENDO HEALTH: S&P Lowers CCR to 'BB-'; Outlook Stable ---------------------------------------------------- Standard & Poor's Ratings Services said it lowered all of its ratings on pharmaceuticals company Endo Health Solutions Inc. by one notch, including the corporate credit rating, which S&P lowered to 'BB-' from 'BB'. The rating outlook is stable. "The rating action reflects our revised perception that Endo's financial policies, including our expectation of debt-financed acquisitions, will be indicative of an "aggressive" financial risk profile, with adjusted leverage rising to and sustained above 4x and funds from operations (FFO) to debt in the 12% to 20% range," said credit analyst Gail Hessol. "We continue to view Endo's business risk profile as "fair", because we expect product diversity to improve, despite still-significant product and therapeutic concentrations." The rating outlook is stable, reflecting S&P's view that Endo will continue to generate discretionary cash flow in excess of $100 million per year in 2013 and 2014, and that leverage will rise but remain below 5x. S&P could raise the rating if the company stabilizes its revenue and earnings base and S&P become convinced that leverage would remain below 4x. This could result from of a combination of developments: if the pace of Lidoderm and Opana revenue declines is slower than we expect; if growth in the company's generic drugs or new drugs in its pipeline exceed S&P's expectations; and if acquired businesses make a meaningful contribution. Leverage could also remain below 4x if acquisition activity is more moderate than S&P anticipates, if the company meaningfully pays down debt, or if it achieves higher than anticipated cost synergies from acquired companies. S&P could lower the rating if it expects leverage to rise above 5x. This could occur if revenue from branded products drops more rapidly than S&P expects, if cost reduction efforts are not as successful as it anticipates, or if the company becomes more aggressive in terms of acquisition activity. ENRON CORP: Hearing Friday on Reduction of Skilling's Jail Time --------------------------------------------------------------- John R. Emshwiller, writing for The Wall Street Journal, reports that a hearing is scheduled for Friday in a Houston federal court on whether to substantially reduce former Enron Corp. Chief Executive Jeffrey Skilling's 24-year prison sentence. Mr. Emshwiller's report also notes of the growing debate about the rules for punishing white-collar criminals. According to Mr. Emshwiller, observers say Mr. Skilling's sentence helped boost penalties for economic crimes. A copy of the article is available at http://is.gd/dnLgWcfrom WSJ [subscription required]. About Enron Corp. Based in Houston, Texas, Enron Corporation filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 01-16033) on Dec. 2, 2001, following controversy over accounting procedures that caused its stock price and credit rating to drop sharply. Enron hired lawyers at Togut Segal & Segal LLP; Weil, Gotshal & Manges LLP; Venable; Cadwalader, Wickersham & Taft, LLP for its bankruptcy case. The Official Committee of Unsecured Creditors in the case tapped lawyers at Milbank, Tweed, Hadley & McCloy LLP. The Debtors won confirmation of their Plan in July 2004, and the Plan was declared effective on Nov. 17, 2004. After approval of the Plan, the new board of directors decided to change the name of Enron Corp. to Enron Creditors Recovery Corp. to reflect the current corporate purpose. ECRC's sole mission is to reorganize and liquidate certain of the operations and assets of the "pre- bankruptcy" Enron for the benefit of creditors. ECRC has been involved in the MegaClaims Litigation, an action against 11 major banks and financial institutions that ECRC believes contributed to Enron's collapse; the Commercial Paper Litigation, an action involving the recovery of payments made to commercial paper dealers; and the Equity Transactions Litigation, which ECRC filed against Lehman Brothers Holdings, Inc., UBS AG, Credit Suisse and Bear Stearns to recover payments made to the four banks on transactions involving Enron's stock while the company was insolvent. EXIDE TECHNOLOGIES: Consumer Watchdog Wants Vernon Plant Closed --------------------------------------------------------------- On June 17, Exide Technologies won a temporary reprieve that prevents the Department of Toxic Substances Control (DTSC) from enforcing its shutdown of the company's Vernon plant. A broad coalition of residents, factory workers and community leaders are asking Judge Luis Lavin and public agencies to put the health of local communities, and families, before Exide's bottom line. The group says that allowing the company to restart operations threatens Californians with renewed pollution of their air and water. A copy of the press release by the group is available for free at http://is.gd/zdUw9h About Exide Technologies Headquartered in Princeton, New Jersey, Exide Technologies (NASDAQ: XIDE) -- http://www.exide.com/-- manufactures and distributes lead acid batteries and other related electrical energy storage products. Exide first sought Chapter 11 protection (Bankr. Del. Case No. 02-11125) on April 14, 2002 and exited bankruptcy two years alter. Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP represented the Debtors in their successful restructuring. Exide Technologies returned to Chapter 11 bankruptcy (Bankr. D. Del. Case No. 13-11482) on June 10, 2013. For the new case, Exide has tapped Anthony W. Clark, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, and Pachulski Stang Ziehl & Jones LLP as counsel; Alvarez & Marsal as financial advisor; Sitrick And Company Inc. as public relations consultant and GCG as claims agent. The Debtor disclosed $1.89 billion in assets and $1.14 billion in liabilities as of March 31, 2013. Exide's international operations were not included in the filing and will continue their business operations without supervision from the U.S. courts. The Company has also established two separate toll-free information lines: one for U.S. suppliers, 888- 985-9831 and another for other interested parties, 855-291-0287. FHC HEALTH: Moody's Rates Proposed $165-Mil. Loans 'B1' ------------------------------------------------------- Moody's Investors Service assigned a B1 rating to FHC Health Systems, Inc.'s proposed $25 million senior secured revolving credit facility and $140 million senior secured term loan. At the same time Moody's affirmed the B2 Corporate Family Rating and changed the probability of default rating to B3-PD. The rating outlook remains stable. Proceeds from the proposed transaction will be used to refinance the company's existing first and second lien term loans, pay fees and expenses, as well as increase balance sheet cash by approximately $29 million. The following rating actions were taken: $25 million senior secured revolving credit facility, assigned B1 (LGD2, 29%); $140 million senior secured term loan, assigned B1 (LGD2, 29%); Corporate Family Rating, affirmed at B2; Probability of Default Rating, downgraded to B3-PD from B2-PD. The following ratings for FHC Health Systems, Inc. are affirmed and will be withdrawn upon close of the proposed transaction: $15 million (originally $175 million) first lien term loan, due December 2013, affirmed at Ba2 (LGD2, 12%); $89 million second lien term loan, due June 2014, affirmed at B2 (LGD4, 55%). The outlook remains stable. Ratings Rationale: FHC's B2 Corporate Family Rating reflects the company's high revenue concentration in its public sector segment from which it derives about 75% of its revenue, as well as the company's reliance on certain key contracts and the risk of the loss of one of these key contracts. FHC's low margin, which is anticipated to continue to be pressured because of competition as well as the full effect of the company's risk contract with Massachusetts, continues to weigh on the ratings. Offsetting some of these risks are the Mental Health Parity Act and Health Care Reform that are expected to widen the company's customer base and increase demand for its products and services. Further supporting the rating is FHC's enhanced liquidity profile, including reduced interest expense and an improved debt maturity schedule. The rating also derives support from debt leverage and coverage metrics (debt-to- EBITDA, free cash flow-to-debt and [EBITDA-CAPEX]-to-interest expense) that are strong for the rating category and from the expectation that these metrics will continue to improve. The stable outlook reflects the company's good liquidity profile with the expectation that the company will continue to maintain strong adjusted credit metrics, generate positive free cash flow, and reduce debt. The ratings could be downgraded if FHC is unable to renew existing contracts or win new contracts sufficiently to offset potential losses in revenue and EBITDA such that adjusted debt to EBITDA were to increase to over 4.5 times. Additional margin pressure and a deterioration in the company's ability to generate positive free cash flow and maintain sufficient liquidity could also negatively affect the rating. Lastly, debt financed dividends and/or acquisitions could also lead to a downgrade. A positive rating action could be supported by reduced near-term risk of large contract losses with growth in revenue and EBITDA from existing and new contract wins. An improvement in the company's EBITDA margins while increasing revenue diversity in FHC's segments and contract base could also lead to positive rating pressure. The principal methodologies used in rating FHC Health Systems, Inc. were Global Business & Consumer Service Industry published in October 2010, and Loss Given Default for Speculative-Grade Non- Financial Companies in the U.S., Canada and EMEA published in June 2009. 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. FHC Health Systems, Inc. provides behavioral health care services in the U.S. through its wholly owned subsidiary, ValueOptions, Inc. ValueOptions provides behavioral managed care programs to the public sector, employer groups, health plans, and federal agencies. Headquartered in Norfolk, Virginia, FHC's revenue for the last twelve month period ended March 31, 2013 was approximately $1.1 billion. FHC HEALTH: S&P Assigns 'BB-' Rating to Senior Secured Facilities ----------------------------------------------------------------- Standard & Poor's Rating Services said it affirmed its 'B' corporate credit rating on Norfolk, Va.-based FHC Health Systems Inc. The outlook is stable. At the same time, S&P assigned its 'BB-' issue-level ratings on the company's senior secured credit facilities with recovery ratings of '1', indicating expectations for a very high recovery (90%-100%) in the event of a payment default. "The ratings on FHC Health Systems Inc. reflect its vulnerable business risk profile and its significant financial risk profile," said Standard & Poor's credit analyst James Sung. S&P bases the vulnerable business risk profile assessment on the company's narrow product scope, key client concentrations, and below average EBITDA margins, which are slightly offset by the company's long-standing expertise in its industry and favorable growth opportunities over the long term. S&P bases the significant financial risk profile largely on the company's aggressive financial policies, which stem from its largely private equity ownership structure. Pro forma for the transaction, the company's adjusted debt leverage will be 3.1x, as of March 31, 2013. The stable outlook reflects S&P's expectation that FHC's leverage will remain consistent with a significant financial risk profile over long term. For 2013, S&P expects revenues of more than $1.3 billion, adjusted EBITDA of more than $65 million, and an EBITDA margin in the mid-single digits. Adjusted debt/EBITDA could decrease to 2.6x by year-end 2013, with interest coverage of 5x and FFO to debt of about 25% in 2013. S&P could consider lowering the rating if revenue growth falls significantly short of expectations and operating margins contract, thereby increasing leverage to 4.5x or more. The loss of one or two key clients, although highly unlikely over the 12 months, coupled with medical cost pressure, would be one potential downside scenario. Any rating upside over the next 12 months is limited, but S&P would consider an upgrade after 12 months if the company can grow and diversify its business profile while improving EBITDA margins, with debt leverage of less than 3.5x on a sustained basis. FIBERFORGE CORPORATION: Shuts Operations, Starts Liquidation ------------------------------------------------------------ Fiberforge Corporation has ceased operations and has executed and filed an Assignment for the Benefit of Creditors in Chancery Court of the State of Delaware on June 11, 2013. "Although Fiberforge had a multitude of successful products and growing interest in both the Automotive and Aerospace Industries, the company itself struggled to reach sustained profitability with its broad offerings of engineering services, parts manufacture, and automated equipment." Development Specialists, Inc. ("DSI") has been appointed as the Assignee for the Benefit of Creditors. By operation of this Assignment, all of the assets of Fiberforge are transferred to the Assignee for the purposes of sale and/or liquidation. The Assignee will market the assets in a manner to maximize value for the creditors and stakeholders of the Company. In order to accomplish this, DSI as Assignee will prepare, organize and effectuate a sale process for both the physical and intellectual property of the Company. The sale process will be subject to Court approval and will provide for higher and better offers subject to the terms of an acceptable stalking horse bid(s). Per Mr. Wheeler, from DSI, "We hope to find a bidder that will want to purchase the entire package of physical and IP assets; if not, we will attempt to liquidate each separately. If buyers for these lots cannot be located, we will explore a more typical wind down auction process." Fiberforge's manufacturing technology was developed to enable volume production of ultralight, advanced-thermoplastic composite structures made with carbon and glass fibers for diverse applications like helicopter load floors, skateboards, jet engine components, and auto bodies. Mr. Victor, agent for the Assignee, explains, "Although Fiberforge had a multitude of successful products and growing interest in both the Automotive and Aerospace Industries, the company itself struggled to reach sustained profitability with its broad offerings of engineering services, parts manufacture, and automated equipment." He believes that Fiberforge's remaining manufacturing equipment and intellectual property are on the cutting edge of advanced thermoplastic manufacturing technology, an assertion that the Assignee is confident will be borne out by a vigorous and competitive sale process. The net proceeds from the sale(s) of the assets will be paid to the creditors in accordance with the priorities established by law. FR 160: Court Denies Motion for Relief of Stay, Case Dismissal -------------------------------------------------------------- The Hon. Randolph J. Haines of the U.S. Bankruptcy Court for the District of Arizona, in a minute entry order, denied motions of Flagstaff Ranch Golf Club for relief from the automatic stay and to dismiss the Chapter 11 case of FR 160 LLC. As reported by the Troubled Company Reporter on March 21, 2013, FRGC, owner and operator of various parcels within the Debtor's Flagstaff Ranch, sought case dismissal, saying that while the Debtor may have sufficient funds to compensate its outstanding creditors, it has no income, no cash on hand, and apparently no prospect of future earnings. That motion was denied on Feb. 5, 2013, and the Court ordered that the Debtor promptly make court- ordered adequate protection payments to FRGC as a condition of the automatic stay remaining in place. On Feb. 19, FRGC submitted its renewed motion for dismissal, or in the alternative, conversion of the Debtor's Chapter 11 case to Chapter 7. FRGC reiterated that the Debtor has virtually no money of its own, and will have no money to pay the upcoming property taxes or continued adequate protection payments as ordered by the Court unless it is able to sell lots. According to FRGC, the Debtor's lack of funds necessary to operate is what prompted it to improperly spend the proceeds from Lot 132 on adequate protection payments and in clear violation of the sale proceeds order. In a court filing dated March 15, 2013, the Debtor objected to the dismissal motion. According to the Debtor, FRGC said that the Debtor's assets have appreciated by more than $500,000 since the commencement of this case. The Debtor said that it is paying monthly adequate protection payments to FRGC and will be able to propose an amended plan of reorganization that has a reasonable possibility of being confirmed before the hearing on the renewed motion to dismiss. The Debtor stated that it has replaced the funds from the proceeds of a sale of a lot secured by FRGC's deed of trust to pay the FRGC. About FR 160 FR 160 LLC, originally named IMH Special Asset NT 160 LLC, was formed for the purpose of owning 51 residential lots and Tract H at the Flagstaff Ranch Golf Club Community generally located in Coconino County, Arizona. In January 2011, to resolve disputes with the golf club, the parties entered into an agreement where FR 160 delivered to the golf club a promissory note in the amount of $4,950,000, a promissory note of $720,000 and a deed of trust on the real property. FR 160 failed to make certain payments and the golf club initiated the non-judicial foreclosure process. FR 160 commenced bankruptcy to stop the trustee's sale of the property. It filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 12-13116) in Phoenix on June 12, 2012. FR 160, which claims to be a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), estimated assets of up to $50 million and debts of up to $100 million. Attorneys at Snell & Wilmer L.L.P., in Phoenix, serve as counsel. The U.S. Trustee has not appointed an official committee in the case due to an insufficient number of persons holding unsecured claims against the Debtor that have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint a committee should interest develop among the creditors. Attorneys at Gordon Silver, in Phoenix, represent creditor Flagstaff Ranch Golf Club as counsel. The Amended Plan dated April 1, 2013, provides that funds to be used to make cash payments under the Amended Plan have been or will be generated from (i) the new value contributed by IMHFC in the amount of $500,000 to be deposited with the Debtor by no later than the Effective Date, (ii) the revenues derived from the sale of lots by the Debtor or the Reorganized Debtor; and (iii) the net proceeds from any Debtor Causes of Action. FREEDOM MEDICAL: Defendants Win Summary Judgment on RICO Claims --------------------------------------------------------------- Freedom Medical, Inc. is in the business of purchasing and refurbishing medical equipment and then reselling, renting, and servicing it. The Company filed a lawsuit, alleging that a number of former employees, along with several companies controlled by them and various associated individuals, combined together to steal its inventory and business opportunities in violation of the Racketeer Influenced and Corrupt Organizations Act. The Company also brought a number of state law claims against different configurations of defendants. The lawsuit is FREEDOM MEDICAL, INC. v. THOMAS R. GILLESPIE, III, et al., Civil Action No. 06-3195 (E.D. Pa.). The original complaint named 17 individual defendants and 6 corporate defendants. Currently, 11 defendants remain. In two separate motions, four of the remaining defendants sought summary judgment on all claims. One summary judgment motion is filed by U.S. Med-Equip, Inc., Gurmit Bhatia, and Gregory Salario. The other motion is filed by Sandra "Dawn" Hall. The U.S. District Court for the Eastern District of Pennsylvania held that summary judgment record does not demonstrate that the defendants banded together to pursue the common objective of stealing equipment from Freedom Medical or that it was part of an overall, concerted plan. Accordingly, District Judge Mary A. McLaughlin concludes that Freedom Medical has failed to establish all necessary elements of its substantive RICO claim or RICO conspiracy claim against any of the four moving defendants, and they are, therefore, entitled to summary judgment on those claims. The Court will also grant summary judgment in favor of Ms. Hall on all of the state law claims alleged against her, but will deny the U.S. Med Defendants' motion for summary judgment on the state law claims against them. Freedom Medical filed for bankruptcy on Dec. 29, 2004 (Bankr. E.D. Pa. Case No. 04-37092). A copy of Judge McLaughlin's May 23, 2013 Memorandum is available at http://is.gd/ClqzLkfrom Leagle.com. FREEPORT RENAISSANCE: Mall Operations to Continue ------------------------------------------------- Nick Crow, writing for Journal Standard, reports that Joan Welt, manager of Lincoln Mall, said mall operations will remain intact during Freeport Renaissance LLC's bankruptcy proceedings. Freeport, the owners of Lincoln Mall, filed for Chapter 11 (Bankr. N.D. Ill. Case No. 13-81624) on May 1, 2013. Freeport listed under $1 million in both assets and debts. A copy of Freeport's bankruptcy petition is available at no charge at http://bankrupt.com/misc/ilnb13-81624.pdf George P. Hampilos, Esq., at Hampilos & Langley, Ltd., serves as the Debtor's counsel. The petition was completed by Shahram Elyaszadeh, a managing member. "It's very short term," said Ms. Welt, according to the report. "The owners are just taking care of a few things." "This is just a reorganization," Ms. Welt said. "The owners don't think that it will take long." The Lincoln Mall, 1265 W. Galena Ave., employs more than 60 people and has spots for 15 different businesses, the report notes. FRIENDSHIP DAIRIES: Wants Solicitation Period Moved Until July 31 ----------------------------------------------------------------- Friendship Dairies asks the U.S. Bankruptcy Court for the Northern District of Texas to extend, for the third time, its exclusive period to solicit acceptances for the proposed Chapter 11 Plan until July 31, 2013. The Court has rescheduled to June 20 the hearing to consider adequacy of information in the Disclosure Statement. The reschedule was intended for the principal parties to convene a meeting to negotiate terms of a consensual plan. According to the Debtor, presuming the Disclosure Statement is approved, the earliest a confirmation hearing could be scheduled would be July 2013. About Friendship Dairies Friendship Dairies filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-20405) in Amarillo, Texas, on Aug. 6, 2012. The Debtor operates a dairy near Hereford, Deaf Smith County, Texas. The dairy consists of 11,000 head of cattle, fixtures and equipment. The Debtor also farms 5,000 acres of land for production of various crops used in feeding for the cattle. The Debtor owes McFinney Agri-Finance, LLC, $16 million secured by the Debtor's property, which is appraised at more than $24 million. The Debtor disclosed $44,421,851 in assets and $45,554,951 in liabilities as of the Chapter 11 filing. Bankruptcy Judge Robert L. Jones oversees the case. J. Bennett White, P.C., serves as the Debtor's counsel. The petition was signed by Patrick Van Adrichem, partner. The U.S. Trustee appointed a six-member creditors committee in the Debtor's case. The Committee tapped Levenfeld Pearlstein as lead counsel, and Mullin, Hoard & Brown as local counsel. HAWAIIAN TELECOM: Clawback Suit Against Ex-CEO Goes to Trial ------------------------------------------------------------ District Judge Susan Oki Mollway in Hawaii denied motions for summary judgment lodged by counterparties to the lawsuit, SHULTS & TAMM (Litigation Trustee), Plaintiff, v. MICHAEL S. RULEY, Defendant, Civil No. 12-702 SOM/BMK (D. Hawaii). Shults & Tamm, A Law Corporation, is a Litigation Trustee suing Michael Ruley, a former Chief Executive Officer and a Director of Hawaiian Telecom Communications, Inc., to recover allegedly preferential and fraudulent transfers pursuant to the Bankruptcy Code. Mr. Ruley moved for summary judgment on all counts, and the Trustee moved for summary judgment with respect to Counts III and IV. Mr. Ruley was the CEO of Hawaiian Telecom from October 1, 2004, until he resigned in February 2008. A copy of the District Court's May 31, 2013 Order is available at http://is.gd/dVuieMfrom Leagle.com. Shults & Tamm, A Law Corporation, as Litigation Trustee, is represented by Christopher J. Muzzi, Esq. -- cmuzzi@hilaw.us -- at Moseley Biehl Tsugawa Lau & Muzzi. Michael S. Ruley is represented by Chuck C. Choi, Esq., Jackson D. Toof, Esq., and Neil J. Verbrugge, Esq. -- cchoi@hibklaw.com and nverbrugge@hibklaw.com -- at Wagner Choi & Verbrugge; and Timothy F. Brown, Esq. -- timothy.brown@arentfox.com -- at Arent Fox LLP. About Hawaiian Telcom Based in Honolulu, Hawaii, Hawaiian Telcom Communications, Inc.-- http://www.hawaiiantel.com/-- operates a telecommunications company, which offers an array of telecommunications products and services including local and long distance service, high-speed Internet, wireless services, and print directory and Internet directory services. The Company and seven of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13086) on Dec. 1, 2008. Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware on Dec. 30, 2008, approved the transfer of the Chapter 11 cases to the U.S. Bankruptcy Court for the District of Hawaii before Judge Lloyd King (Bankr. D. Hawaii Lead Case No. 08-02005). Richard M. Cieri, Esq., Paul M. Basta, Esq., and Christopher J. Marcus, Esq., at Kirkland & Ellis LLP, represented the Debtors in their restructuring efforts. The Debtors tapped Lazard Freres & Co. LLC as investment banker; Zolfo Cooper Management LLC as business advisor; Deloitte & Touche LLP as independent auditors; and Kurztman Carson Consultants LLC as notice and claims agent. An official committee of unsecured creditors was appointed and represented by Christopher J. Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi LLC, in Honolulu, Hawaii. When the Debtors filed for protection from their creditors, they disclosed total assets of $1,352,000,000 and total debts of $1,269,000,000 as of Sept. 30, 2008. Judge King entered on Dec. 30, 2009, an order confirming a plan of reorganization for Hawaiian Telcom. The plan was declared effective in October 2010 after the Reorganized Debtors obtained the backing of the U.S. Federal Communications Commission and the Hawaii Public Utilities Commission. Shults & Tamm was appointed the litigation trustee, and is represented by Christopher Muzzi, Esq., at Moseley Biehl Tsugawa Lau & Muzzi in Honolulu. HAWKER BEECHCRAFT: May Assume NORDAM Agreements ----------------------------------------------- Raytheon Aircraft Company, the predecessor of Hawker Beechcraft Corporation, and the NORDAM Group, Inc., are parties to prepetition master agreements that allow Hawker to issue purchase orders that NORDAM must fill. Pursuant to its confirmed plan, Hawker assumed the master agreements and some of the outstanding purchase orders but rejected the majority of the outstanding purchase orders. NORDAM objected arguing that Hawker cannot assume the master agreements and some of the purchase orders without also assuming all of the purchase orders. The Court conducted a one day trial at which it heard the testimony of four witnesses and received the relevant agreements and other documents into evidence. In a June 13, 2013 Post-Trial Findings of Fact and Conclusions of Law available at http://is.gd/DpZK0Vfrom Leagle.com, Bankruptcy Judge Stuart M. Bernstein overruled NORDAM's objection. NORDAM and the Debtors have been commercial counterparties since the mid-1990s. Prior to July 25, 2003, the Debtors manufactured the plastic and radome components designed by NORDAM for their aircraft. Through a series of agreements entered into on that date, Raytheon outsourced the manufacture of these components to NORDAM. First, the parties entered into two asset purchase agreements, the Asset Purchase Agreement (Radomes) and the Asset Purchase Agreement (Plastics). Raytheon sold NORDAM the tooling needed to manufacture the components. In exchange, NORDAM paid $200,000 in cash and delivered a $6.3 million nonrecourse note for the plastics tooling, and a $1 million nonrecourse note for the radomes tooling. Raytheon retained a security interest in the tooling as collateral for the notes. Second, the parties entered into two purchase and support agreements, the Master Purchase and Support Agreement, as amended, and the Master Purchase and Support Agreement, as amended. NORDAM agreed to manufacture and deliver the components ordered by Raytheon under separate purchase orders issued by Raytheon that incorporated the general terms and conditions in the Master Agreements. James H.M. Sprayregen, Esq., Paul M. Basta, Esq., Patrick J. Nash, Jr., Esq., Ross M. Kwasteniet, Esq., and Scott A. McMillin, Esq. -- patrick.nash@kirkland.com ross.kwasteniet@kirkland.com and scott.mcmillin@kirkland.com -- at Kirkland & Ellis LLP, New York, argue for the Reorganized Debtors. Jocelyn Keynes Szekretar, Esq. -- jkeynes@halperinlaw.net -- at Halperin Battaglia Raicht, LLP; and Steven W. Soule, Esq. -- ssoule@hallestill.com -- at Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., argue for NORDAM Group, Inc. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The Debtor was 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet as of Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative was Kirkland & Ellis LLP, its financial advisor was Perella Weinberg Partners LP and its restructuring advisor was Alvarez & Marsal. Epiq Bankruptcy Solutions LLC served as claims and notice agent. Sidley Austin LLP served as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. served as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represented an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represented an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- held claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, was represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee's financial advisor served as FTI Consulting, Inc. Hawker Beechcraft on Feb. 19 disclosed that it has formally emerged from the Chapter 11 process as a new company. The company changed its name to Beechcraft Corp. The company's Joint Plan of Reorganization was approved by the Bankruptcy Court on Feb. 1, 2013, and became effective on Feb. 15. The Plan offers 81.9% of the new stock in return for $921 million of the $1.83 billion owing on the senior credit. Unsecured creditors are to receive the remaining 18.9% of the new stock. Holders of the senior credit will receive 86% of the new stock. The senior credit holders are projected to have a 43.1% recovery from the plan. General unsecured creditors' recovery is a projected 5.7% to 6.3%. The recovery by holders of $510 million in senior notes is predicted to be 9.2% to 10%. HAWKER BEECHCRAFT: Newby's Discrimination Suit Dismissed -------------------------------------------------------- District Judge Julie A. Robinson dismissed, with prejudice, the employment discrimination lawsuit filed by Patricia A. Newby against her former employer, Hawker Beechcraft Corporation. The U.S. District Court for the District of Kansas held that Mr. Newby's claim is the type of claim included in Class B of the Debtor's Amended Plan, whose plan has been confirmed on Feb. 27, 2013 by a New York bankruptcy court. The confirmation of the Plan provided for the discharge of the Debtor from debts and claims that arose before Feb. 1, 2013, in return for the distributions, rights and treatment provided in the Amended Plan. The lawsuit is PATRICIA A. NEWBY, Plaintiff, v. HAWKER BEECHCRAFT CORPORATION, and CLAY GRAHAM, Defendants, Case No. 12-1301-JAR-DJW (D. Kan.). A copy of Judge Robinson's May 29, 2013 Order is available at http://is.gd/7HVSnxfrom Leagle.com. About Hawker Beechcraft Hawker Beechcraft Acquisition Company, LLC, headquartered in Wichita, Kansas, manufactures business jets, turboprops and piston aircraft for corporations, governments and individuals worldwide. Hawker Beechcraft Inc. and 17 affiliates filed for Chapter 11 reorganization (Bankr. S.D.N.Y. Lead Case No. 12-11873) on May 3, 2012, having already negotiated a plan that eliminates $2.5 billion in debt and $125 million of annual cash interest expense. The Debtor was 49%-owned by affiliates of Goldman Sachs Group Inc. and 49%-owned by Onex Corp. The Company's balance sheet as of Dec. 31, 2011, showed $2.77 billion in total assets, $3.73 billion in total liabilities and a $956.90 million total deficit. Other claims include pensions underfunded by $493 million. Hawker's legal representative was Kirkland & Ellis LLP, its financial advisor was Perella Weinberg Partners LP and its restructuring advisor was Alvarez & Marsal. Epiq Bankruptcy Solutions LLC served as claims and notice agent. Sidley Austin LLP served as legal counsel and Houlihan Lokey Howard & Zukin Capital Inc. served as financial advisor to the DIP Agent and the Prepetition Agent. Wachtell, Lipton, Rosen & Katz represented an ad hoc committee of senior secured prepetition lenders holding 70% of the loans. Milbank, Tweed, Hadley & McCloy LLP represented an ad hoc committee of holders of the 8.500% Senior Fixed Rate Notes due 2015 and 8.875%/9.625% Senior PIK Election Notes due 2015 issued by Hawker Beechcraft Acquisition Company LLC and Hawker Beechcraft Notes Company. The members of the Ad Hoc Committee -- GSO Capital Partners, L.P. and Tennenbaum Capital Partners, LLC -- held claims or manage accounts that hold claims against the Debtors' estates arising from the purchase of the Senior Notes. Deutsche Bank National Trust Company, the indenture trustee for senior fixed rate notes and the senior PIK-election notes, was represented by Foley & Lardner LLP. An Official Committee of Unsecured Creditors appointed in the case selected Daniel H. Golden, Esq., and the law firm of Akin Gump Strauss Hauer & Feld LLP as legal counsel. The Committee's financial advisor served as FTI Consulting, Inc. Hawker Beechcraft on Feb. 19, 2013, disclosed that it has formally emerged from the Chapter 11 process as a new company. The company changed its name to Beechcraft Corp. The Plan offers 81.9% of the new stock in return for $921 million of the $1.83 billion owing on the senior credit. Unsecured creditors are to receive the remaining 18.9% of the new stock. Holders of the senior credit will receive 86% of the new stock. The senior credit holders are projected to have a 43.1% recovery from the plan. General unsecured creditors' recovery is a projected 5.7% to 6.3%. The recovery by holders of $510 million in senior notes is predicted to be 9.2% to 10%. HELLER ERHMAN: Judge Calls Out Filing "Flurry" ---------------------------------------------- Jacqueline Palank, writing for The Wall Street Journal, reported that a bankruptcy judge says a recent "flurry" of court filings by Heller Ehrman LLP may "dramatically" affect the defunct law firm's quest to chase down unfinished business profits. According to the report, Judge Dennis Montali of the U.S. Bankruptcy Court in San Francisco handed Heller a mild scolding Saturday as he called for a status conference to discuss the new and "challenging" issues the firm's lawyers have introduced as its remaining unfinished business lawsuits head to trial. In bankruptcy, Heller sued dozens of law firms that took on its former partners following its 2008 dissolution, the WSJ report noted. The lawsuits aim to recover its share of the profits from continued client relationships. Most of the suits settled, but four remain against Davis Wright Tremaine LLP, Foley & Lardner LLP, Jones Day LLP and Orrick, Herrington & Sutcliffe LLP. In March, Montali ruled that Heller is entitled to some of the profits but left the specific amount undetermined. Judge Montali now says that in an "otherwise innocuous and routine" filing, Heller "unleashed" a new request: for him to determine the specific amount of those profits to which Heller's entitled, without going to trial. "To make the matters more challenging to the court, it is asked to permit excess pages for, and allow filing of, a motion it has not had time to study and thus does not even know the theory on which it is based, notwithstanding the promise of plaintiff to file it by June 14," the judge wrote, WSJ related. "On that date plaintiff filed a flurry of things." Then, "to further complicate matters," the judge said, Heller also requested to avoid a jury trial, as three of the four law firms it's suing have demanded, the report further related. "That motion, if granted, will dramatically affect the future disposition of the three adversary proceedings with jury demands and perhaps even the fourth (Jones Day)," the judge added, WSJ cited. Montali called a status conference for Tuesday "to sort through what comes next," the report said. "No party should file anything else related to these matters before that hearing," added the judge. About Heller Ehrman Headquartered in San Francisco, California, Heller Ehrman, LLP -- http://www.hewm.com/-- was an international law firm of more than 730 attorneys in 15 offices in the United States, Europe, and Asia. Heller Ehrman filed a voluntary Chapter 11 petition (Bankr. N.D. Cal., Case No. 08-32514) on Dec. 28, 2008. Members of the firm's dissolution committee led by Peter J. Benvenutti approved a plan dated Sept. 26, 2008, to dissolve the firm. The Hon. Dennis Montali presides over the case. Pachulski Stang Ziehl & Jones LLP assisted the Debtor in its restructuring effort. The Official Committee of Unsecured Creditors is represented by Felderstein Fitzgerald Willoughby & Pascuzzi LLP. The firm estimated assets and debts at $50 million to $100 million as of the Petition Date. According to reports, the firm had roughly $63 million in assets and 54 employees at the time of its filing. On Aug. 13, 2010, the Court confirmed Heller's Joint Plan of Liquidation. HEMCON MEDICAL: Court Enters Discharge Order -------------------------------------------- The U.S. Bankruptcy Court for the District of Oregon on May 29 entered an order discharging HemCon Medical Technologies, Inc. from, among other things: a) any debt that arose prior to the date of entry of the order confirming the plan and from any kind of debt specified in Section 502(g), (h) or (i) or the Bankruptcy Code; and b) any judgment is void to the extent it is a determination of the Debtor's liability with respect to any discharged debt. As reported by the Troubled Company Reporter on May 28, 2013, Judge Elizabeth Perris confirmed the Debtor's Fifth Amended Plan of Reorganization after determining that the Plan satisfies the requirements under Section 1129 of the Bankruptcy Code. Providence Health Services-Oregon, Biomedical Research Services, Inc., CH Realty III/Portland Industrial, LLC, Total Resources International, Inc., and the United States of America filed objections to the confirmation of the Plan. Each of the objections, if not resolved, was withdrawn or is overruled. The Confirmation Order provides that the Agreement for Purchase and Sale of Stock made as of April 18, 2013, among TriStar Wellness Solutions, Inc., or its assigns, and the Debtor is amended to provide that the Purchase Price is $3,000,000. The Debtor, the Reorganized Debtor and the Plan Agent are authorized to execute any documents and take all other actions necessary or appropriate to cause all Equity Interests in the Debtor to be cancelled as of the Effective Date and to issue 100 shares of common stock to TriStar in exchange for the payment of the Purchase Price of $3,000,000. The Assignment and Assumption of Executory Contracts as set forth in the Debtor's Notice of Assumption and Assignment of Executory Contracts and Cure Amounts, except for the distribution agreement with Cardinal Health Canada which is rejected, are approved. The cure amount payable to CH Realty III/Portland Industrial, LLC, will be $8,020. A full-text copy of the Confirmation Order, dated May 6, 2013, is available for free at: http://bankrupt.com/misc/HEMCONplanorder0506.pdf About HemCon Medical Technologies Portland, Oregon-based HemCon Medical Technologies Inc., fdba HemCon, Inc. filed a Chapter 11 bankruptcy petition (Bankr. D. Ore. Case No. 12-32652) on April 10, 2012, estimating up to $50 million in assets and liabilities. Founded in 2001, HemCon -- http://www.hemcon.com/-- is a diversified medical technology company that develops, manufactures and markets innovative wound care, anti-microbial and oral care products for the military, emergency medical, surgical, dental and over-the-counter markets. HemCon has subsidiaries in the United Kingdom and Europe. The bankruptcy filing comes after an en banc decision by the U.S. Court of Appeals for the Federal Circuit on March 15, 2012, which affirmed an award of $34.2 million in damages to Marine Polymer Technologies Inc. in a patent infringement case initiated in 2006. HemCon's European subsidiary is not subject to the Chapter 11 proceedings. Judge Elizabeth L. Perris presides over the case. Attorneys at Tonkon Torp LLP represent the Debtor. The petition was signed by Nick Hart, CFO. The Official Committee of Unsecured Creditors appointed Marine Polymer as its chair. HILLTOP FARMS: Plan Confirmation Hearing Set for July 25 -------------------------------------------------------- The U.S. Bankruptcy Court for the District of South Dakota will convene a telephonic confirmation hearing on July 25, 2013, at 9:30 a.m. (Central) for the Modified Plan of Reorganization filed by Hilltop Farms, LLC. Any written objections to the Plan must be filed to be received by the Court no later than July 12, 2013. Ballots to be cast on the Debtor's Modified Plan should be filed no later than July 12, 2013. The Debtor obtained Court approval of its Amended Disclosure Statement on June 7, 2013. The Amended Disclosure Statement was filed shortly before the Court entered a ruling on its approval. It discloses that the Modified Plan provides the Debtor will pay $98.11 per month to the priority creditor; $40,827.74 per month to impaired secured creditors under Claim Classes 1 through 3; and an estimated $835.00 per month to unsecured creditors under Claim Class 8 for the first year of the Plan, for a total of approximately $41,760.85 per month. The approximate total monthly payment of $41,760.85 will be paid from the net cash flow each month as projected. The Debtor will continue to be managed and operated by Wilhelmus and Olga Reuvekamp who will take a combined draw totaling $7,500 per month, as funds are available, increasing nominally for necessary living expenses. A full-text copy of the Amended Disclosure Statement dated June 7, 2013, is available at: http://bankrupt.com/misc/HILLTOPFARMS_AmdDSJune07.pdf About Hilltop Farms Elkton, South Dakota-based Hilltop Farms, LLC, owns properties in Brookings County, South Dakota. It filed a Chapter 11 petition (Bankr. D.S.D. Case No. 12-40768) on Nov. 2, 2012, in Sioux Falls, South Dakota. It disclosed assets of $13.1 million and $13.5 million in liabilities as of Nov. 2, 2012. Laura L. Kulm Ask, Esq., at Gerry & Kulm Ask, Prof LLC, serves as counsel to the Debtor. Judge Charles L. Nail, Jr., presides over the case. Daniel M. McDermott, U.S. Trustee for Region 12, was unable to form an official committee of unsecured creditors in the Debtor's case. HJ HEINZ: S&P Lowers Corporate Credit Rating to 'BB-' ----------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on Pittsburgh-based H.J. Heinz Co. by five notches to 'BB-' from 'BBB+'. At the same time, S&P removed all of its ratings on the company from CreditWatch, where they had been placed with negative implications on Feb. 14, 2013, following the company's announcement that it was being acquired by 3G and Berkshire. The outlook is stable. S&P also lowered the ratings on Heinz's rollover unsecured debt tranches to 'BB-' from 'BBB+', and assigned '4' recovery ratings to the following issues: -- $231.1 million 6.375% U.S. dollar debentures due July 2028; -- GBP125 million 6.25% British pound notes due February 2030; -- $435.1 million 6.75% U.S. dollar notes due March 2032; and -- $931.0 million ($627 million carrying value) 7.125% U.S. dollar notes due August 2039. The '4' recovery rating indicates S&P's expectation of average recovery (30%-50%) in the event of a default. S&P also lowered the ratings on Heinz's non-tendered unsecured debt tranches to 'BB-' from 'BBB+', and assigned '4' recovery ratings to the following issues: -- $58.3 million 2% notes due September 2016; -- $17.7 million 1.5% notes due March 2017; -- $34.4 million 3.125% notes due September 2021; and -- $5.8 million 2.85% notes due March 2022. S&P understands that the following rated debt and preferred stock issues will be repaid in mid-July when they are due, and S&P will withdraw the ratings following their repayment. S&P lowered the ratings on these issues as follows: -- $500 million 5.35% notes due July 2013; lowered to 'BB-' from 'BBB+' and assigned a '4' recovery rating. -- $350 million 8% preferred stock due July 2013; lowered to 'B-' from 'BBB-'. S&P also lowered its short-term and commercial paper ratings to 'B' from 'A-2', and withdrew these ratings, as it did with its ratings on all refinanced debt. S&P's ratings on Heinz's new senior secured credit facilities and second-lien notes are unchanged. Pro forma for the transaction, S&P estimates Heinz will have $14.2 billion in reported debt outstanding. Including S&P's adjustments for operating leases and pension obligations, S&P estimates that Heinz will have roughly $14.6 billion in adjusted debt outstanding after the transaction. (Fully adjusted for preferred stock treated as debt for analytical purposes, adjusted debt will be about $22.6 billion.) "The downgrade reflects our belief that following the buyout and recapitalization, Heinz has a materially weaker credit profile," said Standard & Poor's credit analyst Bea Chiem. Heinz's adjusted debt has increased from approximately $5.4 billion before the buyout to approximately $14.6 billion following this transaction. Because of the increased debt, and S&P's view that the company has a more aggressive financial policy given its new ownership, S&P has revised its view of Heinz's financial risk profile to "highly leveraged" from "intermediate." S&P's assessment of Heinz's business risk profile as "strong" has not changed. "We expect credit protection measures to modestly improve with debt repayment and cost savings," said Ms. Chiem. "Still, we estimate that credit measures will remain highly leveraged during the next several years." HOWREY LLP: Settles With Dickstein, Novak Druce, Wilson Sonsini --------------------------------------------------------------- David McAfee of BankruptcyLaw360 reported that The Chapter 11 trustee in Howrey LLP's bankruptcy has reached settlements with three law firms that hired former Howrey partners -- Dickstein Shapiro LLP, Novak Druce & Quigg LLP and Wilson Sonsini Goodrich & Rosati PC -- he told a California bankruptcy court. According to the report, in July 2012, U.S. Bankruptcy Judge Dennis Montali gave Howrey trustee Allan B. Diamond the go-ahead to subpoena 70 law firms that hired former Howrey partners in order to analyze the defunct firm's assets. About Howrey LLP Three creditors filed an involuntary Chapter 7 petition (Bankr. N.D. Cal. Case No. 11-31376) on April 11, 2011, against the remnants of the Washington-based law firm Howrey LLP. The filing was in San Francisco, where the firm had an office. The firm previously was known as Howrey & Simon and Howrey Simon Arnold & White LLP. The firm at one time had more than 700 lawyers in 17 offices. The partners voted to dissolve in March 2011. The firm specialized in antitrust and intellectual-property matters. The three creditors filing the involuntary petition together have $36,600 in claims, according to their petition. The involuntary chapter 7 petition was converted to a chapter 11 case in June 2011 at the request of the firm. In its schedules filed in July, the Debtor disclosed assets of $138.7 million and liabilities of $107.0 million. Representing Citibank, the firm's largest creditor, is Kelley Cornish, Esq., a partner at Paul, Weiss, Rifkind, Wharton & Garrison. Representing Howrey is H. Jason Gold, Esq., a partner at Wiley Rein. The Official Committee of Unsecured Creditors is represented in the case by Bradford F. Englander, Esq., at Whiteford, Taylor And Preston LLP. In September 2011, Citibank sought conversion of the Debtor's case to Chapter 7 or, in the alternative, appointment of a Chapter 11 Trustee. The Court entered an order appointing a Chapter 11 Trustee. In October 2011, Allan B. Diamond was named as Trustee. HW HEARTLAND: Settled With NBH Bank; Chapter 11 Case Dismissed -------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas dismissed the Chapter 11 case of HW Heartland, L.P. The Debtor has reached a settlement of the claims of NBH Bank, N.A. In this relation, the Debtor said it is in the best interests of the estate to dismiss the bankruptcy case because the Debtor also intends to satisfy all claims of other creditors in due course with additional equity investments from the Debtor's limited partner. In its May 30 order, the Court held that the Debtor, and all parties in active concert with the Debtor (including the Debtor's direct or indirect equity interest owners), are enjoined from: a) commencing another case for or against the Debtor for a period of six months after the date of the order; b) commencing any case that would stay the lender's right (i) to receive from escrow and file in the real property records the deed in lieu of foreclosure described in the agreement or (ii) if permitted by the agreement, to conduct a foreclosure of the property -- certain tracts of raw land, developed lots and related assets located in Kaufman County, Texas -- on July 2, 2013, or thereafter as described in the agreement; and c) commencing any action in any court seeking to enjoin or stay the lender (i) from receiving from escrow and filing in the real property records the deed in lieu of foreclosure described in the agreement, or (ii) if permitted by the agreement, to conducting a foreclosure of the property on July 2, 2013, or thereafter as described in the agreement. About HW Heartland HW Heartland, L.P., filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 12-35790) in its hometown in Dallas on Sept. 3, 2012. The Debtor estimated assets and debts of at least $10 million. Judge Barbara J. Houser oversees the case. The Debtor tapped Stephen M. Pezanosky, Esq., at Haynes and Boone, LLP, in Dallas, as counsel. The petition was signed by Lance Fair, authorized signatory for HW Heartland GP, LLC, the sole general partner of the Debtor. IFA INSURANCE: A.M. Best Cuts Fin. Strength Rating to 'B-' ---------------------------------------------------------- A.M. Best Co. has downgraded the financial strength rating to B- (Fair) from B+ (Good) and issuer credit rating to "bb-" from "bbb- " of IFA Insurance Company (IFA) (Clark, NJ). The outlook for both ratings is negative. The rating downgrades reflect IFA's net losses from Superstorm Sandy in the fourth quarter of 2012 and the first quarter of 2013, as well as changes in the New Jersey tax laws and the treatment of income taxes and deferred tax assets, which were necessitated by the deterioration in the company's capital position. The most recent financial results follow IFA's unprofitable operating performance in recent years, which is a result of the company's adverse trends in bodily injury and personal injury protection loss experience in the New Jersey personal automobile market. Although the company continues to refine its underwriting criteria and implement rate increases in response to market trends and conditions, uncertainty exists regarding its ability to improve operating performance, given the competitive operating environment of the New Jersey automobile market and the continued challenging interest rate environment. Further downward rating actions may occur if IFA's underwriting results continue to deteriorate, in conjunction with a corresponding loss of its risk-adjusted capitalization. IKARIA INC: S&P Lowers Rating on Senior Secured Facilities to 'B' ----------------------------------------------------------------- Standard & Poor's Rating Services said it lowered its corporate credit rating on Hampton, N.J.-based Ikaria Inc. to 'B' from 'B+'. The outlook is stable. "At the same time, we lowered our issue-level rating on subsidiary Ikaria Acquisition Inc.'s senior secured credit facilities to 'B' from 'BB' and and revised the recovery rating to '3', indicating our expectation for meaningful (50%-70%) recovery of principal in the event of payment default, from '1'. We also assigned a 'B' issue-level rating to its first-lien term loan and a 'CCC+' to its second-lien term loan. The recovery ratings are '3' and '6', respectively. The '6' recovery rating reflects our expectation for negligible (0%-10%) recovery in the event of payment default," S&P said. The rating actions follow a restructuring of Ikaria's business model that removes any benefit to creditors from its early stage pipeline, along with a leveraged dividend to sponsors. Pro forma this transaction, Ikaria's debt will increase by $676 million and, even though EBITDA and cash flow will increase with research & development expense being shifted to a separate entity, Ikaria's leverage ratio increases sharply. "The lower ratings on Ikaria Inc. reflect slightly increased business risk, although still in the "weak" category, characterized by its heavy reliance on the INOMAX therapy for all of its revenues and earnings. Additionally, Ikaria has near-term patent expirations that could drive increasing competition and a limited late-stage pipeline, the benefits of which are more than a year away if the products are approved by the FDA and successfully commercialized," said credit analyst John Babcock. "The company's financial risk profile remains "highly leveraged", reflecting our projections for a debt-to-EBITDA ratio of 7.5x in 2013. It also incorporates the company's very aggressive financial policy, highlighted by a significant dividend to its equity holders and prefunded R&D expense that gives equity holders potential upside from early stage pipeline while excluding debtholders from the benefits of this investment." "Our stable rating outlook reflects our expectation that Ikaria's INOMAX therapy will be protected by recent patent protection measures and that demand, coupled with modest price increases, will continue to result in free cash flow generation. We anticipate the company will use this free cash flow to reduce its debt burden. However, we expect the company's adjusted debt-to- EBITDA ratio to remain above 6x for the foreseeable future," S&P noted. S&P could lower the rating if competitors are successful in getting around the patent protection for INOMAX, thereby diminishing Ikaria's medium and long term prospects. This would result in a "vulnerable" business risk profile and drive a sharp reduction in EBITDA of more than $50 million from S&P's 2014 projections. S&P estimates this would result in neutral cash flow, limiting the company's ability to make required debt amortization payments and ability to refinance, if necessary. While unlikely, S&P could raise its corporate credit rating if Ikaria were to reduce adjusted leverage to about 5x. S&P estimates that the company would have to reduce its debt burden by more than $500 million to get leverage to that level. IMAGEPOINT INC: Suit Against BFS Retail Goes to N.D. Ill. Court --------------------------------------------------------------- BFS Retail & Commercial Operations, LLC, convinced Tennessee District Judge Karen K. Caldwell to transfer the venue of the lawsuit filed against it by ImagePoint Inc. to the U.S. District Court for the Northern District of Illinois pursuant to the forum- selection clause contained in the contract between the parties. Judge Caldwell denied BFS Retail's request to dismiss the lawsuit. ImagePoint filed for Chapter 11 bankruptcy in 2009. Knoxville, Tennessee-based ImagePoint, Inc. -- http://www.imagepoint.com/-- provided fully integrated branding solutions for businesses. Its services included concept design to delivering a broad spectrum of facility branding solutions; project management expertise to provide complete turnkey services to navigate through local permitting and surveying, on through to installation with a network of pre-qualified installers; and a nationwide preventive and on-call maintenance service program to keep brand image consistently clean and bright. ImagePoint initially filed the lawsuit as an adversary proceeding in the bankruptcy court for the Eastern District of Tennessee as part of its Chapter 11 bankruptcy case. The case was later converted to a Chapter 7 bankruptcy. ImagePoint then moved without opposition to withdraw the reference of this matter to the bankruptcy court and the District Court, E.D. Tenn. assumed jurisdiction over the matter. The action is now brought by James R. Martin on ImagePoint's behalf. Mr. Martin was the president of ImagePoint from 1986 until 2006 and its CEO until it ceased operating in 2009. He is also a secured creditor of ImagePoint and was substituted as the Plaintiff in this matter because he has a contractual right to collect on ImagePoint's accounts receivable. A copy of Judge Caldwell's June 6, 2013 Opinion and Order is available at http://is.gd/xmTjHffrom Leagle.com. The case in Tennessee is, IMAGEPOINT, INC. by JAMES R. MARTIN, Secured Creditor, Plaintiff v. BFS RETAIL & COMMERCIAL OPERATIONS, LLC Defendant, Civil Action No. 3:12-410 (E.D. Tenn.). ImagePoint, Inc., is represented by John A. Lucas, Esq., and Lane Elizabeth McCarty, Esq., at Wagner, Myers & Sanger, PC BFS Retail & Commercial Operations LLC is represented by Joi Monique Thomas, Esq., Robert J. Labate, Esq., and Christopher J. Murdoch, Esq. -- joi.thomas@hklaw.com robert.labate@hklaw.com and chris.murdoch@hklaw.com -- at Holland & Knight LLP; and Madison L. Martin, Esq. -- madison.martin@stites.com -- at Stites & Harbison, PLLC. INTERFAITH MEDICAL: Merger With Brooklyn Hospital Hits Impasse -------------------------------------------------------------- Barbara Benson, writing for Crain's New York Business, reports that court document filed last week in Interfaith Medical Center's Chapter 11 case revealed that Interfaith and Brooklyn Hospital Center have agreed to a standstill of their planned merger. This was confirmed June 18 by a hospital spokeswoman, Crain's says. The report notes Brooklyn Hospital Center and Interfaith Medical Center, which filed for bankruptcy in December, signed a nonbinding memorandum of understanding in February in which they agreed to negotiate a merger. According to Crain's, the court document said that since the signing of the MOU "there has not been any further movement" on the merger, and the deal "may have reached an impasse." Crain's notes Interfaith has only enough cash to operate through July, and has a closing plan ready in case in does not get funding through the state or through Chapter 11 proceedings. According to Crain's, one reason for the roadblock is that the state has not given Brooklyn Hospital the $1.6 million it needs to investigate the hospital's finances and its worthiness as a potential merger partner. The report relates Interfaith's board and management met last week with the state Department of Health and with the Dormitory Authority of New York State, which was $12.2 million by Interfaith at the time of its bankruptcy filing. The hospital's officials were told there would be no state funding for Brooklyn Hospital to conduct its due diligence. About Interfaith Medical Center Headquartered in Brooklyn, New York, Interfaith Medical Center, Inc., operates a 287-bed hospital on Atlantic Avenue in Bedford- Stuyvesant and an ambulatory care network of eight clinics in central Brooklyn, in Crown Heights and Bedford-Stuyvesant. The Company filed for Chapter 11 protection (Bankruptcy E.D. N.Y. Case No. 12-48226) on Dec. 2, 2012. The Debtor disclosed $111,872,972 in assets and $193,540,998 in liabilities as of the Chapter 11 filing. Alan J. Lipkin, Esq., at Willkie Farr & Gallagher LLP, serves as bankruptcy counsel to the Debtor. Nixon Peabody LLP is the special corporate and healthcare counsel. CohnReznick LLP serves as financial advisor. Donlin, Recano & Company, Inc. serves as administrative agent. The Official Committee of Unsecured Creditors tapped Alston & Bird LLP as its counsel, and CBIZ Accounting, Tax & Advisory of New York, LLC as its financial advisor. Eric M. Huebscher, the patient care ombudsman tapped the law firm of DiConza Traurig LLP, as his counsel. INTERSTATE PROPERTIES: Cash Collateral Termination Date Extended ---------------------------------------------------------------- The Hon. Margaret H. Murphy of the U.S. Bankruptcy Court for the Northern District of Georgia earlier this month gave her stamp of approval on a consent order extending until June 28, 2013, at 5 p.m., the termination date in the order authorizing Interstate Properties, LLC to use cash collateral in which American National Insurance Company assert an interest. All other conditions of the cash collateral order dated March 27 remain in full force and effect. As reported by the Troubled Company Reporter on April 12, 2013, ANICO asserts that it holds a valid lien in The Crossings Shopping Center and all or substantially all of the Debtor's personal property used in operating of shopping center, to secure a loan which as of the Petition Date, totals $14.2 million, excluding any accruing post-petition interest or fees. As adequate protection, the Debtor will pay ANICO at least $101,128.41 per month. ANICO is granted a replacement lien to the same extent, validity, and priority as its prepetition liens, upon all post-petition petition property of the Debtor. ANICO is granted a super-priority administrative claim to the extent that the other forms of adequate protection granted are insufficient to adequately protect ANICO for the Debtor's use of the cash collateral. As additional adequate protection of ANICO's interests in the cash collateral, each month the Debtor will wire to ANICO: (i) $14,045.78 for property taxes, and (ii) $6,941.67 for insurance for The Crossings Shopping Center. The payments will be made on the 15th day of the month. About Interstate Properties Interstate Properties, LLC, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-76037) in Atlanta on Oct. 17, 2012. George M. Geeslin, Esq., who has an office in Atlanta, Georgia, serves as the Debtor's bankruptcy counsel. The Debtor owns and operates, among others, two shopping centers, one located in Elkview, West Virginia, and one located in Decatur, Georgia. In its schedules, as amended, the Debtor disclosed $73,002,403 in total assets and $62,264,480 in total liabilities. American National Insurance Company is represented by Sean C. Kulka, Esq. INTERSTATE PROPERTIES: Has $14MM Loan; Wants Case Dismissed ----------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia will convene a hearing on July 8, 2013, at 3 p.m., to consider Interstate Properties LLC's motion to dismiss its Chapter 11 case. Objections, if any, are due June 27. The Debtor explained that it has received and accepted an offer to refinance its indebtedness (i.e. $14,000,000) from UBS Investment Bank. As a condition to the refinance, UBS required that the case be dismissed. Also as a condition of the dismissal of the case, all creditors will be paid an acceptable amount. On information of belief, all other creditors are willing to allow dismissal. American National Insurance Company, largest creditor that holds a security interest in the Debtor's shopping center located at 223 Crossings Mall Road, Elkview, West Virginia, together with a first priority lien on substantially all other property of the Debtor. The claim of Anico is in excess of $12,000,000. About Interstate Properties Interstate Properties, LLC, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 12-76037) in Atlanta on Oct. 17, 2012. George M. Geeslin, Esq., who has an office in Atlanta, Georgia, serves as the Debtor's bankruptcy counsel. The Debtor owns and operates, among others, two shopping centers, one located in Elkview, West Virginia, and one located in Decatur, Georgia. In its schedules, as amended, the Debtor disclosed $73,002,403 in total assets and $62,264,480 in total liabilities. American National Insurance Company is represented by Sean C. Kulka, Esq. JAMES DALEY: Wins Test Case on Exemption for IRA ------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that an individual bankrupt named James Daley became the test case for a theory that would have caused individual retirement accounts at some brokerage firms to lose their status as assets exempt from claims of creditors in bankruptcy. The report recounts that James Daley signed a standard-form brokerage agreement when he opened a $64,000 rollover IRA with Merrill Lynch & Co. The agreement gave the broker a lien on the account to cover any other debt he might have to Merrill from any other account. As it turned out, Mr. Daley never had any other Merrill accounts and never owed the broker anything. Mr. Daley's bankruptcy trustee nonetheless took the position that the mere inclusion of the right to a lien destroyed the exempt status of the IRA. The bankruptcy and district courts agreed with the trustee. The U.S. Court of Appeals in Cincinnati disagreed with the lower courts, reversed, and pronounced the IRA was an exempt asset. According to the report, Circuit Judge Jeffrey S. Sutton said that the proscription against lending to the holder of the account was never violated because no loan was ever made. His conclusion was supported by friend-of-the-court briefs submitted by the brokerage industry. While the litigation with Mr. Daley was proceeding, the Internal Revenue Service issued an announcement saying provisions of the type in a brokerage agreement by themselves do not result in a loss of exempt status. The case is Daley v. Mostoller (In re Daley), 12-06103, U.S. Court of Appeals for the Sixth Circuit (Cincinnati). JAMESTOWN LLC: No Unsecured Creditors Who Are Not Insiders ---------------------------------------------------------- Jamestown LLC said in a court filing it doesn't have unsecured creditors who are not insiders. The Debtor filed with the Bankruptcy Court on May 28 an empty list of creditors purportedly holding the 20 largest unsecured claims. Jamestown LLC filed a Chapter 11 petition (Bankr. W.D. Mo. Case No. 13-60728) on May 7, 2013. The petition was signed by Stephen Cope as managing member. The Debtor estimated assets of at least $10 million and debts of at least $1 million. Douglas L. Healy, Esq., at Healy & Healy serves as the Debtor's counsel. Judge Arthur B. Federman presides over the case. This is the Company's second bankruptcy filing. In May 2010, Jamestown filed a Chapter 11 petition in Missouri. About six months after the Petition Date, the Bankruptcy Court dismissed the Chapter 11 case upon the request of the U.S. Trustee for Region 13. The U.S. Trustee told the Court that the Debtor failed to provide proof of insurance and failed to file applications and amendments as requested. JEFFERSON COUNTY, AL: Debt Plan Is Costly ----------------------------------------- Kelly Nolan and Katy Stech, writing for The Wall Street Journal, reported that escaping the largest U.S. municipal failure could leave Jefferson County, Ala., in an even deeper hole. According to the WSJ report, the county's plan to emerge from bankruptcy protection hinges in part on the sale of $1.9 billion of new debt this fall to refinance debt tied to its troubled sewer system. But some observers call terms of the new debt onerous. The proposal for the refinancing, which has been approved by a majority of county commissioners, includes a set of bonds that schedule larger debt payments in the later years of the financing, WSJ noted. About $474 million are a type of debt called capital- appreciation bonds. Such bonds have been derided by California's treasurer as "terrible" for their backloaded payments, and Michigan has banned their sale by municipalities. All told, Jefferson County taxpayers would stand to repay nearly $6.9 billion over the four-decade term of the financing, more than three times the amount the county initially plans to borrow, the report pointed out. That is perhaps billions more than they would pay under a plan whose payments would be more evenly distributed, said a potential investor. Municipal bonds sold to fund water and sewage projects often cost the issuer no more than two times the initial amount borrowed after about 30 years, the report said. At current interest rates, a home buyer with good credit can expect to pay less than double the cost of a home over the life of a 30-year mortgage. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff& Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. JHCI ACQUISITION: S&P Puts 'CCC+' Rating on CreditWatch Positive ---------------------------------------------------------------- Standard & Poor's Ratings Services said it placed its 'CCC+' corporate credit rating on JHCI Acquisition Inc. on CreditWatch with positive implications. S&P also assigned a 'B-' rating to the company's proposed first-lien debt, with a recovery rating of '3', indicating S&P's expectation that lenders would receive a meaningful recovery (50% to 70%) if a payment default occurs. S&P also assigned a 'CCC' rating to the company's second lien facility, with a recovery rating of '6', indicating S&P's expectation that lenders would receive negligible recovery (0% to 10%) if a payment defaults. Upon successful completion of the proposed refinancing, S&P expects to raise the corporate credit rating to 'B-' and remove the rating from CreditWatch. The issue ratings on JHCI's new debt are based on the anticipated 'B-' corporate credit rating, and, accordingly, are not on CreditWatch. Neither are the company's existing issue ratings, which S&P will withdraw when the refinancing is complete. "The CreditWatch placement follows JHCI's announcement that it is entering into new credit agreements that will refinance existing debt coming due in June and December 2014 and improve liquidity," said Standard & Poor's credit analyst Lisa Jenkins. S&P had lowered JHCI's ratings to their current level on April 1, 2013, due to the refinancing risk the company faces. Standard & Poor's characterizes JHCI's business risk profile as "weak" and its financial risk profile as "highly leveraged," as S&P's criteria define the terms. Although the proposed refinancing will address upcoming debt maturities and improve liquidity, JHCI remains highly leveraged. Total debt to EBITDA is currently more than 9x and funds from operations to total debt is about 10%. JHCI generated weaker-than-expected operating performance in 2012. Management hasimplemented various initiatives to improve operating efficiency and business prospects, and these are beginning to bear fruit. However, it will take time for the full benefit of these efforts to be reflected in financial results. JONES GROUP: Moody's Downgrades CFR to 'Ba3'; Outlook Stable ------------------------------------------------------------ Moody's Investors Service lowered The Jones Group Inc. Corporate Family Rating to Ba3 from Ba2. Moody's also lowered the company's Probability of Default Rating to Ba3-PD from Ba2-PD and the ratings assigned to Jones' senior unsecured notes to B1 from Ba3. The company's Speculative Grade Liquidity Rating of SGL-2 was affirmed. The rating outlook is stable. The rating actions conclude the review for downgrade which commenced on April 25, 2013. The following ratings were lowered: The Jones Group Inc. Corporate Family Rating to Ba3 from Ba2 Probability of Default Rating to Ba3-PD from Ba2-PD $250 million senior unsecured notes due 2014 to B1 (LGD 4, 66%) from Ba3 (LGD 4, 66%) $400 million senior unsecured notes due 2019 to B1 (LGD 4, 66%) from Ba3 (LGD 4, 66%) $250 million senior unsecured notes due 2034 to B1 (LGD 4, 66%) from Ba3 (LGD 4, 66%) The following rating was affirmed: Speculative Grade Liquidity Rating at SGL-2 Ratings Rationale: The downgrade of Jones' ratings primarily reflects Moody's expectations that notwithstanding measures the company is taking to reduce operating costs in its wholesale business and to accelerate the closure of approximately 170 underperforming retail stores, that credit metrics are likely to remain elevated for an extended period of time. Moody's expects debt/EBITDA is likely remain in the mid to high four times range for the next 12 to 18 months as margins remain low for the company. While recent cost savings measures should have some positive impact over time, the company's high exposure to moderate price points and pressure on its Jones branded product is likely to limit further upside on margins. Jones Ba3 Corporate Family Rating reflects the company's weak performance in its owned retail business and its moderate priced brands, evidenced by the company's low operating margins -- reported operating margins remain below 5%. The rating reflects Moody's expectations that cost savings measures and the closure of underperforming retail stores should over time enable the company to improve operating margins. Though Moody's thinks the pricing challenges at its moderate price point brands are likely to persist. Moody's believes recent acquisitions that bolstered the company's presence at higher price points and international markets, such as Stuart Weitzman and Kurt Geiger, are positive for the company, though these brands currently represent only around 15% of total revenues. Moody's expects credit metrics to remain weak with Debt/EBITDA expected to be sustained in the mid to high four times range over the next 12 months. Jones' overall liquidity profile is good, underpinned by access to a $650 million credit facilities and meaningful cash balances ($150 million as of fiscal year end 2012). These resources amply cover the company's $250 million debt maturity in late 2014. The company's Speculative Grade Liquidity rating of SGL-2 reflects the company's good overall liquidity position. The company is expected to maintain positive free cash flow, though its seasonal working capital requirements will necessitate temporary borrowings under its asset based credit facility. The company has $250 million of senior unsecured notes coming due in November 2014 however cash on hand, free cash flow, and access to its $650 million asset-based revolver amply cover this debt maturity. The company is subject only to a springing financial covenant in its asset-based revolver if availability is below certain thresholds, which Moody's does not expect will be tested. The company's trademarks are unencumbered, which provides the company with additional alternative sources of financing as well. The stable rating outlook reflects Moody's expectations that the company's operating margins will begin to stabilize in the second half of 2013 and begin to show some signs of recovery in 2014 as the benefits of cost savings initiatives are realized. Moody's also expects the company will maintain its good liquidity profile and balanced financial policies. Ratings could be upgraded if the company demonstrates sustained performance across its businesses, which would be evidenced by stable sales and improved operating margins. Quantitatively, ratings could be upgraded if Debt/EBITDA was below 3.5 times and EBITA/Interest Expense was sustained above 3.0 times while maintaining a good liquidity profile. Ratings could be downgraded if the company's cost saving initiatives do not lead to operating margin improvement, if the company's financial policies were to become more aggressive or liquidity were to become more constrained. Quantitatively, ratings could be lowered if debt/EBITDA was sustained above 5 times or if interest coverage approached 1.75 times. The principal methodology used in this rating was the Global Apparel Companies Industry Methodology published in May 2013. 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 New York, NY, The Jones Group Inc. designs and markets women's apparel, footwear, jeanswear, jewelry and handbags through department stores, mid-tier chains, upscale department stores and its own retail chains with a meaningful presence outside the United States as well. The company's owned brands include Nine West, Jones New York, Anne Klein, Stuart Weitzman, Gloria Vanderbilt and Kurt Geiger. LTM revenues exceed $3.8 billion. JOURNAL REGISTER: Expects to File Liquidating Plan -------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Journal Register Co. won't join the ranks of companies where the business was sold in Chapter 11, leaving insufficient cash to pay expenses incurred during bankruptcy. According to the report, now formally named Pulp Finish I Co., Journal Register sold the newspaper business in April to lender and owner Alden Global Capital Ltd., mostly in exchange for $114.15 million in secured debt and $6 million cash. The company said in a court filing that it expects to be filing a liquidating Chapter 11 plan and explanatory disclosure statement "in the near future." The report notes that in a request for a three-month expansion of the exclusive right to propose a plan, the company said that a plan is the "most efficient means" for wrapping up the bankruptcy. The statement implies that the company and creditors believe there is enough cash for full payment of expenses incurred during bankruptcy and priority claims that must be paid in full in cash. At a June 25 hearing, the judge will decide on expanding so-called exclusivity until Sept. 30. About Journal Register Journal Register Company -- http://www.JournalRegister.com/-- is the publisher of the New Haven Register and other papers in 10 states, including Philadelphia, Detroit and Cleveland, and in upstate New York. JRC is managed by Digital First Media and is affiliated with MediaNews Group, Inc., the nation's second largest newspaper company as measured by circulation. Journal Register, along with its affiliates, first filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 09-10769) on Feb. 21, 2009. Attorneys at Willkie Farr & Gallagher LLP, served as counsel to the Debtors. Attorneys at Otterbourg, Steindler, Houston & Rosen, P.C., represented the official committee of unsecured creditors. Journal Register emerged from Chapter 11 protection under the terms of a pre-negotiated plan. Journal Register returned to bankruptcy (Bankr. S.D.N.Y. Lead Case No. 12-13774) on Sept. 5, 2012, to sell the business to 21st CMH Acquisition Co., an affiliate of funds managed by Alden Global Capital LLC. The deal is subject to higher and better offers. Journal Register exited the 2009 restructuring with $225 million in debt and with a legacy cost structure, which includes leases, defined benefit pensions and other liabilities that have become unsustainable and threatened the Company's efforts for a successful digital transformation. Journal Register managed to reduce the debt by 28% with the Company servicing in excess of $160 million of debt. Alden Global is the holder of two terms loans totaling $152.3 million. Alden Global acquired the stock and the term loans from lenders in Journal Register's prior bankruptcy. Journal Register disclosed total assets of $235 million and liabilities totaling $268.6 million as of July 29, 2012. This includes $13.2 million owing on a revolving credit to Wells Fargo Bank NA. Bankruptcy Judge Stuart M. Bernstein presides over the 2012 case. Neil E. Herman, Esq., Rachel Jaffe Mauceri, Esq., and Patrick D. Fleming, Esq., at Morgan, Lewis & Bockius, LLP; and Michael R. Nestor, Esq., Kenneth J. Enos, Esq., and Andrew L. Magaziner, Esq., at Young Conaway Stargatt & Taylor LLP, serve as the 2012 Debtors' counsel. SSG Capital Advisors, LLC, serves as financial advisors. American Legal Claims Services LLC acts as claims agent. The petition was signed by William Higginson, executive vice president of operations. Otterbourg, Steindler, Houston & Rosen, P.C., represents Wells Fargo. Akin, Gump, Strauss, Hauer & Feld LLP, represents the Debtors' Tranche A Lenders and Tranche B Lenders. Emmet, Marvin & Martin LLP, serves as counsel to Wells Fargo, in its capacity as Tranche A Agent and the Tranche B Agent. The Official Committee of Unsecured Creditors appointed in the case has retained Lowenstein Sandler PC as counsel and FTI Consulting, Inc. as financial advisor. JVMW PROPERTIES: Secured Creditor Wants Collateral Use Prohibited ----------------------------------------------------------------- Banco Popular de Puerto Rico asked the U.S. Bankruptcy Court for the District of Puerto Rico to prohibit JVMW Properties Management Corp. from using the cash collateral securing its prepetition indebtedness. According to BPPR, it should not be forced, through the non- consented use of its cash collateral, to place its property and collateral at substantial risk by essentially 'financing' a bankruptcy proceeding that appears to have minimum, if any, probability of reorganization and where the likelihood of BPPR recovering on the used cash collateral is remote. BPPR told the Bankruptcy Court that the Debtor has not requested an order authorizing the use of cash collateral, yet, upon information sufficient to form a belief, the Debtor has used, without any authorization, the cash collateral of BPPR after the Petition Date. BPPR also filed a separate motion asking the Bankruptcy Court to lift the automatic stay and allow BPPR to continue and conclude a foreclosure process commenced prior to the Petition Date. In response to BPPR's motion, the Debtor argued that the motions, under which BPPR claims to be entitled to all proceeds derived from the Debtor's real property, will be denied upon the misleading allegations, which clearly lack specificity in defining the particular properties and rent proceeds over which cash collateral protections are to be afforded. The Debtor further argued that BPPR is not entitled to all postpetition rent proceeds from the Debtor's properties. Mont Blanc's Condominium Council of Owners joined in the Debtor's response. Mont Blanc agreed with the Debtor's statement that failure to pay the operating expenses will cause extreme hardship and actual and impending irreparable losses and damages that will preclude the Debtor's reorganization under Chapter 11. Responding to the Debtor and Mont Blanc, BPPR maintained that it holds a valid security interest over the cash collateral generated by its real estate collateral. That security interest, according to BPPR, extends to rents and cash collateral generated postpetition as provided by Section 552(b)(2) of the Bankruptcy Code which explicitly sets forth the requirements to have a valid security interest over cash collateral that is, as in this case, composed of rents. A hearing on BPPR's motions will be held on June 19, 2013, at 9:30 a.m. Luis C. Marini-Biaggi, Esq., and Nayuan Zouairabani, Esq., at O'Neill & Borges LLC, in San Juan, Puerto Rico, serves as counsel for BPPR. Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC, in Guaynabo, Puerto Rico, represents the Debtor. Luis R. Vivas Ugartemendia, Esq., in Guaynabo, Puerto Rico, serves as counsel for Mont Blanc. JVMW Properties Management Corp filed a Chapter 11 petition (Bankr. D.P.R. Case No. 13-02532) on April 1, 2013. The petition was signed by Julio Blanco D'Arcy, as president. The Debtor scheduled assets of $15,694,947 and liabilities of $25,782,161. KALETA CAPITAL: Receiver Wins Approval of Accord with Insurers -------------------------------------------------------------- District Judge Nancy F. Atlas in Houston, Texas, approved a settlement agreement between the receiver for Kaleta Capital Management, BusinessRadio Network, L.P., and Daniel Frishberg Financial Services, Inc.; and American International Specialty Lines Insurance Company; Chartis, Inc.; Chartis Claims, Inc.; and American International Companies regarding the remaining proceeds of an errors and omissions insurance policy purchased by DFFS relating to claims against BizRadio and DFFS, and all entities they own or control. The Court also approved a proposed plan for the allocation of the Insurance Settlement proceeds among the Receivership Estate and the 14 parties who made timely claims against the "Policy Claimants." The Court also approved the Receiver's settlement of his claims against Alfred Fase Kaleta, a principal in two or more of the Receivership Entities. In November 2009, the Securities and Exchange Commission commenced an enforcement action against Albert Kaleta, Daniel Frishberg, and Kaleta Capital Management allegedly perpetrated several frauds related to promissory-note securities. In one such scheme, these individuals and entities solicited investors, to make loans to various entities related to a radio station. The SEC alleges violations of the anti-fraud provisions of the federal securities laws. The Court appointed Thomas Taylor as receiver over KCM on Dec. 2, 2009. On June 17, 2010 the Court expanded the Receivership Estate to include BizRadio and DFFS. The lawsuit is, SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. ALBERT FASE KALETA and KALETA CAPITAL MANAGEMENT, et al., Defendants, BUSINESSRADIO NETWORK, L.P. /d/b/a BizRadio and DANIEL FRISHBERG FINANCIAL SERVICES, INC., d/b/a DFFS CAPITAL MANAGEMENT, INC., Relief Defendants, Civil Action No. H-09-3674 (S.D. Tex.). A copy of Judge Atlas' May 31, 2013 Memorandum and Order is available at http://is.gd/YaRbvhfrom Leagle.com. The Securities and Exchange Commission is represented by Timothy Sean McCole, of the Securities and Exchange Commission. Receiver Thomas Taylor -- taylor@tltaylorlaw.com -- is represented by Andrew M. Goforth, Esq. -- goforth@tltaylorlaw.com -- at The Taylor Law Offices, P.C. BusinessRadio Network, L.P., and Daniel Frishberg Financial Services, Inc., are represented by Robert D. Axelrod, Esq., at Axelrod Smith & Kirshbaum. ProTechnik Inc., and Brian De Armas, Consol Defendants, are represented by Michael Wayne Weston, Esq., and Pete W. Weston, Esq., at Weston Associates PLLC. Albert F. Kaleta, Consol Defendant, is represented by Dinesh HariKiran Singhal, ESq. -- DineshSinghal@gmail.com -- at The Singhal Law Firm. Wallace Bajjali Development Partners, L.P., Movant, is represented by Susan Kopecky Hellinger, Esq. -- shellinger@porterhedges.com -- at Porter Hedges LLP. South Texas Broadcasting, Inc., interested party, is represented by Joseph G. Epstein, Esq. -- jepstein@winstead.com -- at Winstead PC. John W. Saunders, interested party, is represented by William E Schweinle, Jr., Esq., at Schweinele Parish PC. Barbara Doreen House, interested party, is represented by David A Bryant, Jr, Esq., at The Bryant Law Firm. Diane Collins, interested party, is represented by Troy Ted Tindal, Esq., Schmidt Law Firm, PLLC. Ronald Ellisor, interested party, is represented by Charles Littleton Fridge, III, Esq., at Fridge Resendez & Wise LLC; Charles Thomas Schmidt, Esq. -- firm@schmidtfirm.com -- at Schmidt Law Firm; and Troy Ted Tindal, Esq., at Schmidt Law Firm, PLLC. LaVonne Ellisor, interested party, is represented by Charles Littleton Fridge, III, Fridge Resendez & Wise LLC, Charles Thomas Schmidt, Schmidt Law Firm & Troy Ted Tindal, Schmidt Law Firm, PLLC. Ivan Curiel, interested party, is represented by Charles Littleton Fridge, III, Fridge Resendez & Wise LLC & Troy Ted Tindal, Schmidt Law Firm, PLLC. Joanne Cassidy, interested party, is represented by Ashish Mahendru, Esq., at Mahendru PC. Connie T Kaleta, interested party, is represented by Dinesh HariKiran Singhal, Esq., at The Singhal Law Firm. LAGUNA BRISAS: Receiver May Access Cash Collateral Until July 31 ---------------------------------------------------------------- The U.S. Bankruptcy Court has approved a seventh stipulation authorizing the receiver for Laguna Brisas LLC to continue accessing cash collateral on an interim basis. The latest stipulation, approved by the bankruptcy judge mid-May, grants Byron Chapman, the state court receiver, access to cash collateral from May 1 through July 31, 2013. The stipulation was signed by the receiver and secured creditors Wells Fargo, Kay Nam Kim and Mehrdad Elie. As adequate protection, Wells Fargo, Kim and Elie will, among other things, receive replacement liens. A hearing on the Debtor's disclosure statement and Wells Fargo's motion to appoint a Chapter 11 trustee is currently set for June 21. Wells Fargo Bank is the Trustee for the registered holders of Banc of America Commercial Mortgage Inc., Commercial Mortgage Pass- Through Certificates, Series 2006-3. CWCapital Asset Management LLC is the special servicer. Attorneys for Wells Fargo Bank can be reached at: Hamid R. Rafatjoo Keith C. Owens Jennifer L. Nassiri VENABLE LLP 2049 Century Park East, Suite 2100 Los Angeles, CA 90067 Tel: (310) 229-9900 Fax: (310) 229-9901 E-mail: hrafatjoo@venable.com kowens@venable.com jnassiri@venable.com About Laguna Brisas Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Chapman of Rim Hospitality, since Oct. 3, 2011. Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy" Kim -- represents the Debtor as special counsel. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. LAGUNA BRISAS: Orantes Firm Replaces Jonathan Hayes as Counsel -------------------------------------------------------------- Laguna Brisas LLC asks the U.S. Bankruptcy Court for permission to employ Orantes Law Firm, P.C. as general insolvency counsel. The Debtor initially tapped M. Jonathan Hayes, Esq., at the Law Office of M. Jonathan Hayes, as counsel. A substitution of counsel form reflecting that Orantes became the Debtor's new counsel was executed and filed on April 23, 2013. The Orantes Law Firm will provide various services, including: a. to bring forward a plan of reorganization expeditiously, as well as provide the Debtor more general services, such as to advise the Debtor with respect to compliance with the requirement of the Office of the United States Trustee; b. to advise the Debtor regarding matters of bankruptcy law, including their rights and remedies in regard to their assets and in regard to the claims of creditors; and c. to represent the Debtor in the proceedings or hearings in the bankruptcy Court and in any action in any other court where the Debtor's rights under the Bankruptcy Code may be litigated or affected, subject to the Firm's specific agreement. Giovanni Orantes, Esq., will charge at a discounted hourly rate of $400. The firm's associates will charge $350 and paralegals $129 to $200. Mr. Orantes attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm acknowledges that for the last year the Debtor's managing member Dae In Kim worked with the Orantes Law Firm. The firm can be reached at: Giovanni Orantes, Esq. Thomas Y. Lucero, Esq. THE ORANTES LAW FIRM, P.C. 3435 Wilshire Blvd. Suite 2920 Los Angeles, CA 90010 Tel: (213) 389-4362 Fax: (877) 789-5776 E-mail: go@gobklaw.com About Laguna Brisas Laguna Beach, California-based Laguna Brisas LLC, doing business as Best Western Laguna Brisas Spa Hotel, is owned by A&J Mutual, LLC, which is owned and operated by Dae In "Andy" Kim and his wife Jane. The Company owns a Best Western Plus Hotel and Spa in Laguna Beach, California. The Company filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-12599) on Feb. 29, 2012. Bankruptcy Judge Mark S. Wallace presides over the case. The Debtor filed the Chapter 11 petition to stop foreclosure sale of the first priority trust deed holder, Wells Fargo Bank. The hotel has been in possession of and operated by a receiver, Bryon Chapman of Rim Hospitality, since Oct. 3, 2011. Johnny Kim, Esq. -- no relation to the Debtor's insider, "Andy" Kim -- represents the Debtor as special counsel. The Debtor disclosed $15,097,815 in assets and $13,982,664 in liabilities. The petition was signed by Dae In "Andy" Kim, managing member. LAST MILE: Has Green Light to Sell Assets to Lender --------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York approved Last Mile, Inc.'s sale of assets to GLC Leveraged Capital Advisors, LLC, pursuant to a credit bid of all of GLC's claims against the Debtor arising under a senior, secured, super- priority debtor-in-possession credit agreement, dated as of Sept. 10, 2012, among the Debtor, the lenders party thereto and GLC, as agent. The Debtor has conducted an extensive marketing process. The Debtor determined that the GLC offer constitutes the highest and best offer for the acquired assets. Upon closing, GLC will deliver (a) an amount sufficient to cover the Debtor expenses to counsel for the Debtor, and (b) the initial amount plus an amount sufficient to cover the Committee expenses to counsel for the Committee, in each case to hold in a separate interest bearing accounts to effectuate the transactions contemplated by the exit term sheet. About Last Mile Based in Lebanon, Pennsylvania, Last Mile Inc., aka Sting Communications, is a telecommunications services company delivering advanced Ethernet transport services. It specializes in designing, implementing and managing Wide Area Networks that leverage the power of Internet Protocol to link the customers' locations securely, efficiently and cost effectively to support delivery of advanced applications, voice, data and video at scalable broadband speeds. Last Mile filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-14769) on Oct. 12, 2011. Judge Sean H. Lane presides over the case. Thomas A. Pitta, Esq. at Emmet, Marvin & Martin, LLP represents the Debtor in its restructuring effort. In its schedules, the Debtor disclosed $11,757,058 in assets and $23,300,655 in liabilities. Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Last Mile Inc., aka Sting Communications. Halperin Battaglia Raicht, LLP, serves as counsel for the Committee. LAST MILE: Emmet Marvin Replaces Lowenstein as Counsel ------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of New York authorized Last Mile Inc. doing business as Sting Communications, to employ Emmet, Marvin & Martin LLP as substitute counsel effective as of April 15, 2013. On Dec. 15, 2011, the Court entered an order approving the retention of Lowenstein Sandler PC (now known as Lowenstein Sandler LLP) as counsel. Thomas A. Pitta, the primary attorney working on the matter at Lowenstein, resigned from Lowenstein to join Emmet as of April 15, 2013. In light of the involvement of the attorney, the Debtor decided to retain Emmet as their new bankruptcy counsel effective as of April 15, 2013. To the best of the Debtor's knowledge, Emmet is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Last Mile Based in Lebanon, Pennsylvania, Last Mile Inc., aka Sting Communications, is a telecommunications services company delivering advanced Ethernet transport services. It specializes in designing, implementing and managing Wide Area Networks that leverage the power of Internet Protocol to link the customers' locations securely, efficiently and cost effectively to support delivery of advanced applications, voice, data and video at scalable broadband speeds. Last Mile filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 11-14769) on Oct. 12, 2011. Judge Sean H. Lane presides over the case. Thomas A. Pitta, Esq., at Emmet, Marvin & Martin, LLP represents the Debtor in its restructuring effort. In its schedules, the Debtor disclosed $11,757,058 in assets and $23,300,655 in liabilities. Tracy Hope Davis, the U.S. Trustee for Region 2, appointed three unsecured creditors to serve on the Official Committee of Unsecured Creditors of Last Mile Inc., aka Sting Communications. Halperin Battaglia Raicht, LLP, serves as counsel for the Committee. LEED CORP: Chapter 11 Case Closed --------------------------------- The U.S. Bankruptcy Court for the District of Idaho closed the Chapter 11 case of The Leed Corporation, according to court documents dated May 23. The Debtor, in its motion, said there are no unresolved adversary proceedings or contested matters that require that the case remain open. The Debtor has substantially consummated the Fifth Amended Plan of Reorganization, which was confirmed on Oct. 25, 2012. The Debtor filed a statistical report on May 23, 2013. About The Leed Corporation Twin Falls, Idaho-based The Leed Corporation -- dba Green Cut Sprinklers and Landscaping, Leed Corp., Quality Built Homes, Green Cut Construction, Shoshone Developers, Desert Green Sprinklers & Landscaping, Green Cut Lawn Care, and Desert Green -- is a real estate developer, including new construction and land development, as well as landscaping and related care and maintenance of existing real estate in southern Idaho, primarily based out of Shoshone, Idaho. The Company filed for Chapter 11 protection (Bankr. D. Idaho Case No. 10-40743) on April 29, 2010. Robert J. Maynes, Esq., who has an office in Idaho Falls, Idaho, assists the Debtor in its restructuring effort. The Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in debts in its Chapter 11 petition. In October 2012, Leed obtained confirmation of its Fifth Amended Chapter 11 Plan after addressing feasibility concerns. Under the Plan, reorganizing the Debtor's operation consists of three components, namely (1) the landscaping operations, (2) the remaining eight rental properties, which will be liquidated, and (3) the winding down of construction operations, consisting of the Old School Project, Desert Rose and Riverview Subdivisions. LIFE UNIFORM: U.S. Trustee Appoints 5-Member Creditors Panel ------------------------------------------------------------ Roberta A. DeAngelis, the U.S. Trustee for Region 3, appointed five members to the official committee of unsecured creditors in the Chapter 11 cases of Life Uniform Holding Corp. The Creditors Committee members are: 1. Angelica Corporation Attn: Lew Belote 1105 Lakewood Parkway, Suite 210 Alpharetta, GA 30009 Tel: (678) 823-4100 Fax: (678) 823-4165 2. Simon Property Group, Inc. Attn: Ronald Tucker, Esq. 225 W. Washington St. Indianapolis, IN 46204 Tel: (317) 263-2346 Fax: (317) 263-7901 3. Strategic Partners, Inc. Attn: Bob Pierpoint 9800 DeSoto Ave. Chatsworth, CA 91311 Tel: (818) 617-2102 4. Koi Design, LLC Attn: Jeremy Husk 1757 Stanford Street Santa Monica, CA 90404 Tel: (310) 828-0055 ext. 213 Fax: (310) 828-0099 5. Dansko, LLC Attn: Cindy Worthington 33 Federal Road West Grove, PA 19390 Tel: (610) 869-8335 ext. 1170 Fax: (610) 869-9224 About Life Uniform Life Uniform was founded in 1965 when Angelica Corporation decided to enter the retail uniform industry. The first Life Uniform store opened in 1965 in Clayton, Missouri. At present, Life Uniform is the nation's largest independently owned medical professional supplier. Life Uniform Holding Corp., Healthcare Uniform Company, Inc., and Uniform City National Inc. filed Chapter 11 petitions (Bankr. D. Del. Case Nos. 13-11391 to 13-11393) on May 29, 2013. The petitions were signed by Bryan Graiff, COO, CFO, VP, secretary, and treasurer. The lead debtor estimated assets and debts of at least $10 million. First lien lender Capitalsource is owed on a $11.5 million revolver and $26 million term loan. Sun Uniforms Finance LLC is owed $6.1 million in principal on a second lien note and holds two additional notes, each in the original principal of $1.08 million. Angelica Corp. holds an unsecured junior subordinate not in the principal amount of $5.48 million. Klehr Harrison Harvey Branzburg, LLP, serves as the Debtors' counsel. Epiq Bankruptcy Solutions acts as the Debtors' claims and noticing agent. The Debtors' financial advisor is Capstone Advisory Group, LLC. Sun Uniform LLC acquired Life Uniform in July 2004. Since the acquisition by Sun the company addressed sagging profitability and overhead issues and quickly drove increases in profitability through a combination of store rationalization and sensible corporate overhead initiatives. However, recent performance has been declining in terms of revenue. This is due to the company's liquidity issues, which prevented the company from completing its e-commerce system upgrade, encourage better pricing from vendors, and maintain sufficient capital. The company has signed a deal to sell all assets to Scrubs and Beyond, LLC for $22.625 million, absent higher and better offers at a court-sanctioned auction. MALUHIA DEVELOPMENT: Court Dismisses Bankruptcy Case ---------------------------------------------------- Bankruptcy Judge Harlin D. Hale ordered the dismissal of the case of Maluhia Development Group, LLC. The Bankruptcy Court's ruling, entered on May 22, 2013, stemmed the request of William T. Neary, the U.S. Trustee for Region 6, for a dismissal or a Chapter 7 conversion of Maluhia's bankruptcy case. The Debtor did not oppose the request. As reported by the Troubled Company Reporter on May 23, 2013, the U.S. Trustee, in filing its Motion to Dismiss, reasoned that the bankruptcy case had been pending for over three years, and while the Debtor filed a proposed disclosure statement and plan of reorganization in July 2012, no plan was confirmed by court- ordered confirmation deadlines. The Debtor is also delinquent in filing of operating reports for January to March 2013, the U.S. Trustee added. In line with the case dismissal order, the Debtor is directed to remit all outstanding U.S. Trustee fees without delay. 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. MAXCOM TELECOM: Misses Interest Payment on 11% Senior Notes ----------------------------------------------------------- Maxcom Telecomunicaciones, S.A.B. de C.V., elected not to make the June 18 scheduled interest payment of approximately US$11 million on its 11% Senior Notes due 2014, according to a statement. Maxcom said that it intends to utilize the 30-day grace period w to allow the Company to continue discussions with a new investor and certain of the noteholders to recapitalize and reorganize the Company's debt. Maxcom believes that it is prudent to utilize such grace period to implement a comprehensive recapitalization that would significantly reduce Maxcom's debt service expense and position Maxcom for growth with a US$45 million capital infusion. Maxcom, private equity firm Ventura Capital Privado, S.A. de C.V., an ad hoc committee representing a significant amount of the Senior Notes and certain of its current equity holders have been negotiating the terms of restructuring and recapitalization agreements, which would be implemented through a voluntary, prepackaged Chapter 11 filing under the U.S. Bankruptcy Code and an equity tender offer in accordance with U.S. and Mexican securities laws. The Company intends to operate in the ordinary course of business during this period and continue to provide a high level of responsiveness to its customers, vendors and business partners. No assurances can be given that a proposed recapitalization and restructuring will be successful or that holders of Maxcom's debt obligations and/or relevant stakeholders will reach an agreement. If a consensual, pre-packaged Chapter 11 restructuring cannot be implemented, Maxcom may be forced to file for bankruptcy or concurso mercantil without the support of a significant portion of its creditors. A failure to complete a restructuring through pre- packaged restructuring Chapter 11, or otherwise, could have a material adverse effect on the business or the interests of holders of Maxcom's debt and equity securities. The Company has engaged Lazard and its alliance partner Alfaro, Davila y Rios, S.C. as its financial advisor and Kirkland & Ellis, LLC and Santamarina y Steta, S.C. as its U.S. and Mexican legal advisors to assist the Company in evaluating potential restructuring proceedings, including the commencement of a Chapter 11 case. The Ad Hoc Committee has retained Cleary Gottlieb Steen & Hamilton, LLP and Cervantes Sainz, S.C., as its U.S. and Mexican legal advisors. Ventura has retained VACE Partners as its financial advisor, and Paul Hastings LLP and Jones Day as its U.S. and Mexican legal advisors, respectively. Prepack Chapter 11 Kathryn Brenzel of BankruptcyLaw360 reported that Mexico's Maxcom Telecomunicaciones SAB said it's eyeing a prepackaged Chapter 11 in the U.S. as a possible key to new capital and reorganization, following a private equity firm's failed takeover and news that Maxcom will delay paying $11 million in interest on outstanding senior debt. According to the report, the telecommunications company is mulling bankruptcy proceedings and a possible takeover as part of restructuring and recapitalization agreements, Maxcom said in a statement. About Maxcom Maxcom Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico City, Mexico, is a facilities-based telecommunications provider using a "smart-build" approach to deliver last-mile connectivity to micro, small and medium-sized businesses and residential customers in the Mexican territory. Maxcom launched commercial operations in May 1999 and is currently offering local, long distance, data, value-added, paid TV and IP-based services on a full basis in greater metropolitan Mexico City, Puebla, Tehuacan, San Luis, and Queretaro, and on a selected basis in several cities in Mexico. * * * Maxcom carries a 'CC' corporate credit rating from Standard & Poor's Ratings Services and a "Caa1" from Moody's Investors Service. MFM DELAWARE: Wants to Hire Rosner Law Group as Bankr. Counsel -------------------------------------------------------------- MFM Delaware, Inc., et al., are seeking bankruptcy court authority to retain The Rosner Law Group LLC as their bankruptcy counsel, nunc pro tunc to May 24, 2013. The Debtors anticipate RLG to, among other things: (1) advise them of their rights, powers and duties as debtors and debtors-in-possession; (2) take all necessary action to protect and preserve the estates of the Debtors; (3) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, reports, and papers in connection with the administration of the Debtors' estates; and (4) present on behalf of the Debtors anticipated sale and cash collateral financing motions and all related transactions and any related revisions, amendments, etc. The RLG principal attorneys and paralegal presently designated to represent the Debtors and their current hourly rates are: Frederick B. Rosner, attorney $375/hour Scott J. Leonhardt, attorney $325/hour Julia B. Klien, attorney $250/hour Paralegals $150-200/hour RLG will be charging for its legal services on an hourly basis in accordance with its customary rates and will seek reimbursement of actual and necessary out-of-pocket expenses. RLG is also seeking a $15,000 postpetition retainer. Frederick Rosner, Esq., assures the Court that his firm does not represent any interest adverse to that of the Debtors. A June 25, 2013 hearing has been set for the Debtors' request. About MFM Industries Cat litter maker MFM Delaware, Inc., and affiliate MFM Industries, Inc. sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11359 and 13-11360) on May 28, 2013. Founded in 1964 as a clay-based absorbents supplier, MFM is supplier of cat litter in the U.S. The company produces 100,000 tons of cat litter a year, representing 1 percent of the total market. Its private label market share is 20 percent. The company's cat litter products are comprised of a blend of fuller's earth clay, sodium bentonite and scenting properties. Clay is supplied from a leased clay mine in Ocala, Florida, and is transported five miles away to the company's manufacturing plant in Reddick, Florida. Direct Capital Partners, LLC, acquired a majority stake in the company in 1997. MFM DELAWARE: Wants to Employ King & Spalding as Counsel -------------------------------------------------------- MFM Delaware, Inc., et al., seek permission from the Bankruptcy Court to employ King & Spalding LLP as their counsel, nunc pro tunc to May 24, 2013. As bankruptcy and restructuring counsel to the Debtors, K&S is expected to, among other things: (1) advise the Debtors on their powers and duties as debtors-in- possession in the continued management and operation of their business; (2) take all necessary action to protect and preserve the Debtors' estates; (3) negotiate and prepare on the Debtors' behalf a plan, disclosure statement, and all related documents; and (4) advise the Debtors on finance and finance-related matters, and on intellectual property rights and licensing strategies. To the best of the Debtors' knowledge, K&S neither holds nor represents any interest adverse to their estates. The Debtors believe K&S is a "disinterested person" within the meaning of Sec. 101(14) and 327(a) of the Bankruptcy Code. The current standard hourly rates of attorney's resident in K&S's New York and Atlanta offices range from a low of $290 per hour for the firm's most junior associates to as much as $1,150 per hour for certain of the firm's most senior partners, and the current standard hourly rates of paralegals and legal assistants resident in K&S's New York and Atlanta offices range from a low of $160 to a high of $315. The K&S professionals and paraprofessionals expected to be most active in the Debtors' cases and their current hourly rates are: Arthur J, Steinberg, Partner, New York $1,090 per hour Jeff Dutson, Associate, Atlanta $500 per hour Annie R. Carroll, Associate, Atlanta $385 per hour Missy Heinz, Senior Paralegal, Atlanta $285 per hour The firm also expects to be reimbursed for actual and necessary expenses it incurs in line with the services to be rendered. About MFM Industries Cat litter maker MFM Delaware, Inc., and affiliate MFM Industries, Inc. sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11359 and 13-11360) on May 28, 2013. Founded in 1964 as a clay-based absorbents supplier, MFM is supplier of cat litter in the U.S. The company produces 100,000 tons of cat litter a year, representing 1 percent of the total market. Its private label market share is 20 percent. The company's cat litter products are comprised of a blend of fuller's earth clay, sodium bentonite and scenting properties. Clay is supplied from a leased clay mine in Ocala, Florida, and is transported five miles away to the company's manufacturing plant in Reddick, Florida. Direct Capital Partners, LLC, acquired a majority stake in the company in 1997. MJS LAS CROABAS: FDIC-R Has Green Light to Foreclose ---------------------------------------------------- Bankruptcy Judge Enrique S. Lamoutte in Puerto Rico granted the Federal Deposit Insurance Corporation, as receiver for Westernbank Puerto Rico, relief from the automatic stay in the Chapter 11 case of MJS Las Croabas Properties, Inc., to permit FDIC-R to enforce its loan documents against the Debtor including, without limitation, a foreclosure of the Debtor's property in a district action. Judge Lamoutte said FDIC-R has proven there is no equity in the Property and the Debtor has failed to prove that it can successfully reorganize in a reasonable amount of time. A copy of the Court's May 29, 2013 Opinion and Order is available at http://is.gd/BpNHHqfrom Leagle.com. In a separate order also on May 29, Judge Lamoutte denied the Debtor's Motion for Turnover of Property and granted FDIC-R's motion to excuse turnover, pursuant to 11 U.S.C. section 543(d)(1). FDIC-R argued that "the interests of creditors . . . would be better served by permitting a custodian to continue in possession, custody, or control" of the Debtor's Property. A copy of the Court's May 29 Opinion and Order is available at http://is.gd/pG2OWsfrom Leagle.com. The Debtor financed the construction and development of The Ocean Club at Seven Seas entirely with financing obtained from Westernbank with the loans that constitute the outstanding debt that is the subject of FDIC-R's proof of claims. On April 30, 2010, the Puerto Rico Commissioner of Financial Institutions closed Westernbank and FDIC-R was appointed receiver of Westernbank. On March 15, 2012, FDIC-R filed a Complaint in the U.S. District Court for the District of Puerto Rico seeking to enforce its loan documents against the Debtor including, without limitation, a foreclosure of the Property. On April 30, 2012, FDIC-R won appointment of a receiver for the Debtor's Property. When the Debtor filed for Chapter 11, it owed FDIC-R a total of roughly $20,478,704.36 for the loan granted to MJS Las Croabas, Inc. The Mortgage Deeds securing the MJS Loan and reflecting FDIC-R's first priority liens in the Property are perfected. In addition, the Debtor provided a Guarantee of the amounts owed by a related debtor, Sabana del Palmar, Inc., Case No. 12-6177 ESL, U.S. Bankruptcy Court for the Middle District of Puerto Rico to FDIC-R, and the debt owed pursuant to the guarantee was approximately $40,709,406 as of the Petition Date. FDIC-R holds approximately 79% of the unsecured claims in this case. MJS Las Croabas Properties, Inc., is a real estate company formed in 2004 for the purpose of purchasing real property and constructing residential units for marketing and resale to third parties in a development located in Fajardo, Puerto Rico known as The Ocean Club at Seven Seas. The Property is worth $7,150,000 and consisted of 66 remaining unsold units plus two undeveloped adjacent lots. Of the remaining 66 Units, 7 had been approved by the Court for sale but none of the sales had closed. MJS Las Croabas Properties is a corporation wholly owned by Gulfcoast Irrevocable Trust XIII. It has no employees. Michael Scarfia, Sr., is the sole officer of MJS Las Croabas Properties and the sole trustee and beneficiary of Trust XIII. Mr. Scarfia is an experienced real estate developer. MJS Las Croabas Properties, Inc., filed for Chapter 11 protection (Bankr. D.P.R. Case No. 12-05710) on July 19, 2012. MOOG INC: S&P Affirms 'BB' CCR & Raises Debt Rating to 'BB' ----------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Moog Inc. The outlook is stable. S&P also raised the subordinated debt rating to 'BB' from 'B+' and revised the recovery rating to '4' from '6', indicating expectations of an average recovery (30%-50%) in the event of a payment default. The ratings on East Aurora, N.Y.-based Moog reflect S&P's expectation that the company should maintain debt to EBITDA of less than 4x despite debt-financed acquisitions. Moog is a major provider of highly engineered motion control systems for critical applications, including aircraft flight controls and industrial processes. The ratings incorporate our view of the company's "fair" business risk profile, which is characterized by its significant niche positions within the cyclical and competitive commercial aerospace and industrial markets. The "significant" financial risk assessment reflects credit ratios that S&P expects will remain in line with its expectations for the rating (debt to EBITDA of 2.5x-3.5x) due to strong demand from the commercial aerospace market and contributions from acquisitions, as well as the company's "adequate" liquidity. "We expect sales in fiscal 2013 to increase about 5% as strength in the commercial aerospace market and the contribution from acquisitions offset weakness in the industrial segment and some areas of defense," said credit analyst Christopher DeNicolo. "However, EBITDA margins will likely be moderate due to the lower margins in the industrial segment." S&P believes that credit ratios will be fairly stable in fiscal 2013 (ending Sept. 30, 2013) due to flat earnings and modest increases in debt to fund acquisitions, with debt to EBITDA of about 3x and funds from operations to debt of 30%-35%. Credit ratios could improve further in 2014, but will depend on the level of debt-financed acquisitions. The outlook is stable. S&P expects Moog's credit metrics to remain in line with its expectations for the rating (debt to EBITDA of less than 4.0x) due to the strong commercial aerospace market and contributions from its acquisitions, which offset weaknesses in the industrial segment, lower U.S. defense spending, and debt to fund continued small- to mid-sized acquisitions. S&P could lower the ratings if the company's debt-financed acquisitions increase leverage significantly or its operating performance is weaker than expected, resulting in debt to EBITDA of more than 4x. S&P could raise the ratings if the company articulates a more limited acquisition strategy that results in sustained debt to EBITDA of less than 2.5x and management commits to maintaining leverage at this level. MOTORCAR PARTS: Ernst & Young Raises Going Concern Doubt -------------------------------------------------------- Motorcar Parts of America, Inc., filed on June 17, 2013, its annual report on Form 10-K for the fiscal year ended March 31, 2013. Ernst & Young LLP, in Los Angeles, California, noted that the Company's wholly owned subsidiary Fenwick Automotive Products Limited has recurring operating losses since the date of acquisition and has a working capital and an equity deficiency. "In addition, Fenco has not complied with certain covenants of its loan agreements with its bank. These conditions relating to Fenco coupled with the significance of Fenco to the Consolidated Companies, raise substantial doubt about the Consolidated Companies' ability to continue as a going concern." According to the regulatory filing, during May 2013, Fenco appointed a new board of independent directors, hired an independent chief restructuring officer and all its previously existing officers resigned from Fenwick Automotive Products Limited ("FAPL"). "As a result of the loss of control of Fenco, the Company will likely deconsolidate the financial statements of Fenco from its consolidated financial statements during the first quarter of fiscal 2014. On June 10, 2013, each of FAPL, Introcan and Introcan's subsidiaries, Flo-Pro Inc., LH Distribution Inc., Rafko Logistics Inc., Rafko Holdings Inc. and Rafko Enterprises Inc. filed a voluntary petition for relief under Chapter 7 of Title 11 of the United States Code in the U.S. Bankruptcy Court for the District of Delaware. As of March 31, 2013, Fenco's financial statements are included in the consolidated financial statements of the Company. The Company reported a net loss of $91.5 million on $406.3 million of sales in fiscal 2013, compared to a net loss of $48.5 million on $363.7 million of sales in fiscal 2012. "During fiscal 2013, our undercar product line segment recorded a non-cash goodwill and intangible asset impairment charge of $68,356,000 and $16,330,000, respectively. After recording the impairment charge, we had no goodwill or intangible assets attributable to our undercar product line segment remaining on our consolidated balance sheet at March 31, 2013. "During fiscal 2012, Fenco discontinued the CV axle product line and shut down the related facility located in Bedford, New Hampshire. As a result Fenco recorded an impairment loss of approximately $1,031,000, which represents the write-off of the carrying amount of plant and equipment." The Company's balance sheet at March 31, 2013, showed $367.1 million in total assets, $370.6 million in total liabilities, and a stockholders' deficit of $3.5 million. A copy of the Form 10-K is available at http://is.gd/iiEuzV Torrance, California-based Motorcar Parts of America, Inc. (Nasdaq: MPAA) is a remanufacturer of alternators and starters utilized in imported and domestic passenger vehicles, light trucks and heavy duty applications. Motorcar Parts of America's products are sold to automotive retail outlets and the professional repair market throughout the United States and Canada, with remanufacturing facilities located in California, Mexico and Malaysia, and administrative offices located in California, Tennessee, Mexico, Singapore and Malaysia. MTS LAND: Aug. 26 Confirmation Hearing on Third Amended Plan ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Arizona continued until Aug. 26, 2013, at 10 a.m. the confirmation hearing for MTS Land LLC' Third Amended Chapter 11 Plan. At the hearing, the Court will also consider the limited objection filed by the U.S. Trustee for Region 14. The U.S. Trustee's objection is based upon one defect -- the Debtors' proposed exculpation clause at Section 9.5 of the Plan. According to the U.S. Trustee, the proposed release of potential claims is not in the best interests of creditors or other parties in interest, because the releases do not benefit the estate. The Plan As reported by the Troubled Company Reporter on April 10, 2013, the Debtors' Third Amended Joint Plan, as Modified, was filed with the Bankruptcy Court on April 2, 2013. The Debtors' Plan is a 100% payment plan. All creditors with Allowed Claims will be paid the amount of their Allowed Claims in full through the Plan. The Holders of Equity Securities of Debtors will retain all of their legal interests. Class 1 is comprised of the Secured Portion of the Allowed USB Loan Claim, with an estimated Claim of $32,450,046.03 as of the Petition Date. Beginning on the 14th Business Day of the 1st full month after the Effective Date, and on each subsequent month up to and through the Restated UBS Loan Maturity Date, Reorganized Debtor will distribute to USB monthly principal and interest payments on the Secured Portion of the outstanding balance of the Restated USB Note amortized over a period of 25 years at the Restated USB Interest Rate. The Restated USB Loan Maturity Date will be 5th anniversary of the Effective Date, provided that at the option of Reorganized Debtor, the Restated USB Loan Maturity Date may be extended for up to 4 additional periods of 6 months each, subject to the certain conditions including the payment of an extension fee of 0.25% of the then outstanding principal balance of the Restated USB Note. Except to the extent that a Creditor with an Allowed General Unsecured Claim agrees to less favorable treatment, each Creditor with an Allowed General Unsecured Claim, will, in full and final satisfaction of such Claim, be paid in full in Cash, plus post- Effective Date interest at the Unsecured Interest Rate. a. In the event that USB is determined by the Bankruptcy Court to be entitled to the 1111(b) Election and elects to make it: on the latest of: (i) the 1st anniversary of the Effective Date, as soon thereafter as is practical; (ii) such date as may be fixed by the Bankruptcy Court, or as soon thereafter as is practicable; (iii) the 14th Business Day after such Claim is Allowed, or as soon thereafter as is practicable; or (iv) such date as the Holder of such Claim and Reorganized Debtor have agreed or will agree. b. In the event that USB is determined by the Bankruptcy Court to be entitled to the 1111(b) Election and elects not to make it: The total amount of Allowed General Unsecured Claims (including the Allowed unsecured portion of the USB Claims) plus interest at the Unsecured Interest Rate, will be paid in 60 equal monthly payments beginning on the 14th Business Day of the 1st full month after the Effective Date, and on the same day of each subsequent month; provided, however, in the event that the Class 1 USB Loan Claims and the Class 2 Hertz Loan Claims are paid in full prior to the 60th month, then all net proceeds from the sale of the remaining Real Property will be distributed Pro Rata among the Holders of Allowed General Unsecured Claims until paid in full. A copy of the Amended Disclosure Statement for the Debtors' Third Amended Joint Plan, as Modified, is available at: http://bankrupt.com/misc/mtsland.doc546.pdf About MTS Land MTS Land, LLC, and MTS Golf, LLC, own and operate the now dormant Mountain Shadows Golf Club. They filed separate Chapter 11 petitions (Bankr. D. Ariz. Case Nos. 12-16257 and 12-16257) in Phoenix on July 19, 2012. Mountain Shadows Golf Club -- http://www.mountainshadowsgolfclub.com/-- is an 18 hole, par 56 course located at Paradise Valley. Nestled in the foothills of Camelback Mountain, the 3,081-yard Executive course claims to be one of the most scenic golf courses in Arizona. MTS Land and MTS Golf are affiliates of Irvine, Cal.-based Crown Realty & Development Inc. MTS Land and MTS Golf each estimated assets and debts of $10 million to $50 million. Judge Charles G. Case II oversees the Debtors' cases. Gerald M. Gordon, Esq., Robert C. Warnicke, Esq., and Teresa M. Pilatowicz, Esq., at Gordon Silver, represent the Debtor. The petition was signed by Robert A. Flaxman, administrative agent. Lender U.S. Bank is represented by Steven D. Jerome, Esq., and Evans O'Brien, Esq., at Snell & Wilmer L.L.P. The Plan filed in the Debtors' cases provides that all creditors with allowed claims will be paid the amount of their allowed claims in full through the Plan. Holders of equity securities of Debtors will retain all of their legal interests. The U.S. Trustee for Region 14 advised the Court that an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against the Debtors have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint a committee if interest develop among the creditors. MUD KING: Hoover Slovacek Approved as Bankruptcy Counsel -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas authorized Mud King Products, Inc., to employ Hoover Slovacek as counsel. Mud King Products, Inc., filed a Chapter 11 petition (Bank. S.D. Tex. Case No. 13-32101) on April 5, 2013. The petition was signed by Erich Mundinger as vice president. The Debtor disclosed $18,959,158 in assets and $3,351,216 in liabilities as of the Chapter 11 filing. Melissa Anne Haselden, Esq., at Hoover Slovacek, LLP represents the Debtor in its restructuring effort. Judge Karen K. Brown presides over the case. The U.S. Trustee was unable to appoint an official committee of unsecured creditor. NATIONAL LITHO: Court Grants DIP Lender Superpriority Admin Claim ----------------------------------------------------------------- Judge Laurel M. Isicoff ruled that National Acquisition, LLC is entitled to a superpriority administrative claim for $199,633, subject to notice and hearing, attorney's fees and costs, in the bankruptcy case of National Litho, LLC (Case No. 12-27566, Bankr. S.D. Fla.). A copy of Judge Isicoff's May 23, 2013 Order is available at http://is.gd/pCe0Snfrom Leagle.com. National Acquisition is the DIP Lender of National Litho, which filed for Chapter 11 bankruptcy protection on July 22, 2013. The Debtor's case was converted into a Chapter 7 proceeding two days before the entry of a final order on the DIP financing motion. Before the Court entered its ruling, the Chapter 7 Trustee and Lake Holdings LLC filed objections to the claim allowance request. NEW ENGLAND COMPOUNDING: Dist. Court Clarifies Preservation Order ----------------------------------------------------------------- At the behest of the Chapter 11 Trustee of New England Compounding Pharmacy, Massachusetts District Judge Dennis Saylor, IV, modified the so-called Preservation Order to clarify that nothing in the order in anyway restricts, limits or impairs the Chapter 11 Trustee's ability to reject unexpired leases of NECC or applies to any property not subject to the Preservation Order. Nothing in the order will be deemed to impose upon the Chapter 11 Trustee any obligation (including, without limitation, any payment obligation) to any lessor of equipment or the lessor of the premises operated by NECC, or to entitle the Lessor to any claim or administrative expense in NECC's bankruptcy case or otherwise against NECC's bankruptcy estate, including, without limitation, arising after the effective date of any rejection of any unexpired lease of NECC by the Chapter 11 Trustee under section 365 of the Bankruptcy Code. On June 12, 2013, in the case of In Re: New England Compounding Pharmacy Products Liability Litigation, Court Case Number 13 md 02419 FDS (Lead Case), the Massachusetts District Court entered an Order, directing any party to this case, or any interested third party, to appear and show cause why partial relief from the terms of a Preservation Order (docketed in Erkan v. New England Compounding Pharmacy, Civil Action No. 12 12052 FDS) barring the disposal or destruction of certain property that is or was in the possession of NECC should not be granted. A copy of Judge Saylor's Further Order Concerning Preservation of NEC Property dated June 12 is available at http://is.gd/XyyBgq from Leagle.com. About New England Compounding New England Compounding Pharmacy Inc., filed a Chapter 11 petition (Bankr. D. Mass. Case No. 12-19882) in Boston on Dec. 21, 2012, after a meningitis outbreak linked to an injectable steroid, methylprednisolone acetate ("MPA"), manufactured by NECC, killed 39 people and sickened 656 in 19 states, though no illnesses have been reported in Massachusetts. The Debtor owns and operates the New England Compounding Center is located in Framingham, Mass. In October 2012, the company recalled all its products, not just those associated with the outbreak. The company said at the outset of bankruptcy that it would work with creditors and insurance companies to structure a Chapter 11 plan dealing with personal injury claims. Daniel C. Cohn, Esq., at Murtha Cullina LLP, serves as the Debtor's counsel. Verdolino & Lowey, P.C. is the financial advisor. The Debtor estimated assets and liabilities of at least $1 million. An official unsecured creditors' committee was formed to represent individuals with personal-injury claims. The members selected Brown & Rudnick LLP to be the committee's lawyers. ONCURE HOLDINGS: Gets $25MM Bankruptcy Loan Greenlighted For Now ---------------------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that a Delaware bankruptcy judge gave private equity-owned cancer center operator OnCure Holdings Inc. an interim go-ahead for a $25 million post- petition loan, despite the U.S. Trustee's Office's objection to how the credit facility was structured. According to the report, an attorney for the U.S. Trustee's Office had argued that a provision that allows $15 million of the debtor- in-possession financing provided by a group of OnCure's prepetition lenders to be rolled up into an earlier loan of equal value, but at a better interest rate, ought to be delayed. About OnCure Holdings Headquartered in Englewood, Colorado, OnCure Holdings, Inc. -- http://www.oncure.com-- is a provider of management services and facilities to oncology physician groups throughout the country. OnCure Holdings and its affiliates delivered their voluntary petitions for protection under Chapter 11 of the Bankruptcy Code on June 14, 2013, to the U.S. Bankruptcy Court for the District of Delaware. Paul E. Harner, Esq., and Keith A. Simon, Esq., at Latham & Watkins LLP, in New York, serve as the Debtors' lead bankruptcy counsel. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware, serves as the Debtors' local Delaware counsel. ORCHARD SUPPLY: Gets Interim Nod for $176MM DIP Loan ---------------------------------------------------- Jamie Santo of BankruptcyLaw360 reported that a Delaware bankruptcy judge gave his blessing to a slate of first-day motions for Orchard Supply Hardware Stores Corp., including debtor-in- possession facilities totaling $176 million, designed to keep the home-and-garden chain operating while it pursues a Chapter 11 sale to Lowe's Home Improvement LLC. According to the report, hamstrung by a crushing debt load, Orchard entered court protection after securing a $205 million stalking-horse deal to sell the bulk of its stores to industry giant Lowe's and a pair of DIP agreements from prepetition lenders. As reported in the June 19, 2013 edition of the TCR, the DIP facility comprises: * a $140 million senior secured superpriority revolving credit and a $7.1 million senior secured superprority first in last out term loan facility from existing ABL lenders led by Wells Fargo Bank, National Association, as sole administrative agent and collateral agent and Wells Fargo Bank, National Association and Bank of America, N.A., as the initial revolving lenders and FILO term lenders. * a $17.2 million senior secured superpriority term loan facility from the existing ABL lenders led by Wells Fargo as agent and Wells Fargo and 1903 Onshore Funding, LLC as the initial supplemental term lenders. * a $12 million delayed drawn term loan credit facility from certain prepetition term lenders led by Gleacher Products Corp., as lenders. About Orchard Supply San Jose, Cal.-based Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. It was spun off from Sears Holdings Corp. in 2012. Orchard Supply and its two affiliates delivered their voluntary petitions for protection under Chapter 11 of the Bankruptcy Code on June 16, 2013. The case is pending at the United States Bankruptcy Court for the District of Delaware before Hon. Christopher S. Sontchi. Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Chun I. Jang, Esq., and Daniel M. Simon, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker. FTI Consulting, Inc., serves as the Debtors' financial advisors. A&G Realty Partners, LLC, serves as the Debtors' real estate advisors. BMC Group Inc. is the Debtors' claims and noticing agent. ORCHARD SUPPLY: Moody's Lowers CFR to Caa3 After Ch. 11 Filing -------------------------------------------------------------- Moody's Investors Service downgraded Orchard Supply Hardware Stores Corporation's Probability of Default Rating (PDR) to D-PD from Caa2-PD following the company's announcement on June 17, 2013 that it filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware. The Corporate Family Rating was downgraded to Caa3 from Caa2 as well. The rating outlook is stable Shortly following these rating actions, Moody's will withdraw all of OSH's ratings because of its bankruptcy filing. The following ratings were downgraded: Orchard Supply Hardware Stores Corporation Corporate Family Rating to Caa3 from Caa2 Probability of Default Rating to D-PD from Caa2-PD Orchard Supply Hardware Corporation Senior secured term loan to Caa3 (LGD 3, 38%) from Caa2 (LGD 4, 61%). Ratings Rationale: The downgrade of the CFR and PDR reflect the company's bankruptcy filing. Moody's assessment of loss given default assumes a greater than average family recovery rate for the debt capitalization at default and consequently a moderate expected loss for the senior secured term loan. The principal methodology used in this rating was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. As of June 16, 2013 the Company has 89 stores in California and two stores in Oregon. Revenues were approximately $657 million in fiscal 2012. PACERS INC: Cal. App. Ct. Upholds Counsel Disqualification ---------------------------------------------------------- Midway Venture LLC appealed an order granting Peter Luster's motion to disqualify Midway's counsel in its action against him for interference with contractual relations and prospective economic advantage. The action was filed in October 2010, alleging that Mr. Luster, a former principal of Pacers Inc., was involved in situations that disrupted the operations of a gentlemen's club Midway acquired from Pacers. In the action, Mr. Luster filed a motion to disqualify Midway's counsel, Ernest Franceschi. Mr. Luster argued that because Mr. Franceschi served as Midway's manager during negotiations of the contractual relationships that are the subject of its action against him, Mr. Franceschi was a material witness to the disputed issues in the case and therefore has a conflict of interest. In a June 4, 2013 Order, the Court of Appeals of California, Fourth District, affirmed the trial court ruling disqualifying Mr. Franceschi as Midway's counsel in the case. The appeals case is MIDWAY VENTURE, LLC, Plaintiff and Appellant, v. PETER LUSTER, et al., Defendants and Respondents, Case No. D0612609 (Cal. App.). A copy of the Appellate Court's June 4, 2013 order is available at http://is.gd/syozM5from Leagle.com. Ernest J. Franceschi, Jr., Esq., of Franceschi Law Corporation, represents Midway Venture. David B. Norris, Esq. -- dbn@norrislegal.com -- of the Law Offices of David Baxter Norris, represents Peter Luster. Pacers, Inc., located in San Diego, Calif., sought Chapter 11 protection (Bankr. S.D. Calif. Case No. 09-12738) on August 27, 2009, is represented by Michael T. O'Halloran, Esq., in San Diego, and estimated its assets at less than $500,000 and debts at more than $1 million at the time of the filing. PACIFIC COURIER: Gladfelder Sexual Harassment Suit Narrowed ----------------------------------------------------------- In the lawsuit AMY GLADFELDER v. PACIFIC COURIER SERVICES, LLC, et al., Case No. 3:12-CV-02161-SI (D. Ore.), District Judge Michael H. Simon dismissed the plaintiff's ninth claim on wrongful constructive termination. Amy Gladfelder, a former staff accountant at Pacific Courier Services, alleged that PCS owner James Holman sexually harassed her during her employment at PCS. In her nine-count lawsuit, Ms. Gladfelder asserted torts of intentional infliction of emotional distress, negligent infliction of emotional distress and wrongful constructive termination. Judge Simon also ruled that because Ms. Gladfelder has a right to have her "day in court" without undue delay, Mr. Holman's Motion to Stay Case is denied. A copy of Judge Simon's May 28, 2013 Opinion and Order is available at http://is.gd/HbBYG9from Leagle.com. Pacific Courier Services LLC filed for bankruptcy protection on Jan. 29, 2013. Patrick L. McGuigan, Esq. -- plmcguigan@hkm.com -- of HKM Employment Attorneys PLLC, in Portland, Oregon, represents Amy Gladfelder. Christopher E. Hawk, Esq., of Gordon & Rees LLP, in Portland, Oregon, represents Pacific Courier Services. PARKWAY ACQUISITION: Parkway Hospital Lot Owner in Ch. 11 --------------------------------------------------------- Parkway Acquisition I, LLC filed a Chapter 11 petition (Bankr. S.D.N.Y. Case NO. 13-12015) in Manhattan on June 17, 2013. The Debtor owns the real property located at 70-35 113th Street, Forest Hills, New York. The property formerly housed the Parkway Hospital but the property has essentially laid vacant since the closure of the hospital in 2008 and the bankruptcy filing of the hospital. Although it fell into foreclosure in January 2011, the property has attracted a renewed interest form a financially sound investor group led by Ellie Weinstein, MD. The Debtor accordingly sought Chapter 11 protection to hopefully implement a transfer and redevelopment of the property in furtherance of a plan of reorganization. Auberge Grand Central LLC is the current holder of a mortgage in the principal sum of $8.9 million. The property is technically in the possession of a receiver, Israel Rubin. The Debtor intends to quickly file a plan of reorganization that addresses all of the outstanding debts of the property. Chief among these debts is the payments of real estate taxes of approximately $4 million and a restructuring of the mortgage, through a cure and reinstatement or a discounted pay-off. The new investor group acknowledges the principal debt but will challenge default interest and other accruals. The company says that given the zoning restrictions, it would be difficult for the property to be sold to a real estate developer. An initial case conference is slated for July 17, 2013. The Chapter 11 plan and disclosure statement are due Oct. 15, 2013. Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein LLP, serves as counsel. Judge Allan l. Gropper was initially assigned to the case but the case was quickly transferred to Judge Shelly C. Chapman. In its schedules of assets and liabilities, the Debtor valued the property at $8.99 million. It said that liabilities total $13.9 million. PATRIOT COAL: In Talks With Aurelius, Knighthead for Exit Funds --------------------------------------------------------------- Tiffany Kary, writing for Bloomberg News, reports that Patriot Coal Corp. revealed in court papers it is in talks with Aurelius Capital Management LP and Knighthead Capital Management LLC over a potential investment of "hundreds of millions of dollars" that would help fund its reorganization, and seeks court permission to pay them fees. Patriot is negotiating with the two investors, who may participate in a rights offering that could serve as the basis for an exit from its Chapter 11 case. The potential investment "if consummated, will involve Knighthead and Aurelius providing and/or backstopping hundreds of millions of dollars of financing for the debtors' estates," Patriot's lawyers said, according to the report. The report notes Knighthead holds $57.4 million of Patriot's 8.25 percent senior notes due 2018, or 23 percent of them, and Aurelius owns $77.9 million of the same notes, or 31 percent of them. Aurelius also owns $19.7 million of Patriot's 3.25 percent senior notes due 2013, or 10 percent of the total amount. About Patriot Coal St. Louis-based Patriot Coal Corporation (NYSE: PCX) is a producer and marketer of coal in the eastern United States, with 13 active mining complexes in Appalachia and the Illinois Basin. The Company ships to domestic and international electricity generators, industrial users and metallurgical coal customers, and controls roughly 1.9 billion tons of proven and probable coal reserves. Patriot Coal and nearly 100 affiliates filed voluntary Chapter 11 petitions in U.S. bankruptcy court in Manhattan (Bankr. S.D.N.Y. Lead Case No. 12-12900) on July 9, 2012. Patriot said it had $3.57 billion of assets and $3.07 billion of debts, and has arranged $802 million of financing to continue operations during the reorganization. Davis Polk & Wardwell LLP is serving as legal advisor, Blackstone Advisory Partners LP is serving as financial advisor, and AP Services, LLC is providing interim management services to Patriot in connection with the reorganization. Ted Stenger, a Managing Director at AlixPartners LLP, the parent company of AP Services, has been named Chief Restructuring Officer of Patriot, reporting to the Chairman and CEO. GCG, Inc. serves as claims and noticing agent. The U.S. Trustee appointed a seven-member creditors committee. Kramer Levin Naftalis& Frankel LLP serves as its counsel. HoulihanLokey Capital, Inc., serves as its financial advisor and investment banker. Epiq Bankruptcy Solutions, LLC, serves as its information agent. On Nov. 27, 2012, the New York bankruptcy judge moved Patriot's bankruptcy case to St. Louis. The order formally sending the reorganization to Missouri was signed December 19 by the bankruptcy judge. The New York Judge in a Jan. 23, 2013 order denied motions to transfer the venue to the U.S. Bankruptcy Court for the Southern District of West Virginia. PIPELINE DATA: Settlement Approved; Plan Quickly Filed ------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Pipeline Data Inc. filed a liquidating Chapter 11 plan two hours after the bankruptcy court in Delaware approved a settlement with secured noteholders. The settlement was the product of a settlement hammered out by mediator Robert J. Rosenberg. Pipeline processed credit cards and sold the business in March to Calpian Inc. for $9.75 million. According to the report, the settlement with senior convertible noteholders, approved on June 17, pays the lenders $13.3 million, for a total recovery of $19 million given $5.7 million already received. If the company generates cash beyond $4.475 million, the lenders will receive 60 percent of the excess. The report notes that unsecured creditors receive nothing. A hearing date will be set for approval of the explanatory disclosure statement once the document is filed. About Pipeline Data Pipeline Data Inc., a processor of debit and credit cards for smaller retailers, filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-13123) on Nov. 19, 2012, in Delaware with plans for selling the business as a going concern. Alpharetta, Georgia-based Pipeline Data provided credit and debit card payment processing services to approximately 15,000 merchants. Attorneys at Whiteford Taylor Preston LLC, in Wilmington, Delaware, and Kirkland & Ellis L.L.P. serve as counsel. AlixPartners L.L.P. is the financial advisor. Dragonfly Capital Partners L.L.C. is the investment banker. The Debtor estimated assets of $1 million to $10 million and debts of $50 million to $100 million. Pipeline, which sought bankruptcy together with affiliates, owes $66.6 million in principal and interest to first-lien creditors who have liens on all assets. In its schedules, Pipeline Data disclosed $4,491,699 in total assets and $61,595,942 in total liabilities. Ten affiliates of the Debtor filed separate petitions for Chapter 11 (Bankr. D. Del. Case Nos. 12-13124 to 12-13131; Case No. 12-13133 and 12-13134). The cases are jointly administered under Case No. 12-13123). After the bankruptcy court in Delaware approved selling the business in January 2013 to Applied Merchant Systems West Coast Inc. for $9.85 million, the deal fell through. The court later authorized the second-place bidder, Calpian Inc., to buy the operation for $9.75 million. The sale was completed on March 15. PREMIER PAVING: May Use Wells Fargo's Cash Collateral Until July 1 ------------------------------------------------------------------ Premier Paving, Inc., sought and obtained approval from the Hon. Michael E. Romero of the U.S. Bankruptcy Court for the District of Colorado to use the cash collateral of Wells Fargo Bank, NA, until July 1, 2013. Aaron A. Garber, Esq., at Kutner Miller Brinen, P.c., the attorney for the Debtor, said that the Debtor and Wells Fargo, a secured creditor of the Debtor with a first lien on certain assets of the Debtor, including cash collateral, accounts receivable, equipment and inventory, have entered into previous cash collateral agreements that have been approved by the Court, the last of which expired on June 1, 2013. Mr. Garber stated that the Debtor and Wells Fargo have reached further agreement for the Debtor to continue to use cash collateral to meet its operational needs and generate new revenues through July 1, 2013. To the extent that Wells Fargo or any other party possesses a properly perfected security interest in the Debtor's cash collateral, as adequate protection for the Debtor's use of cash collateral, the Debtor will continue to provide the party with a replacement lien on all inventory, equipment, accounts and general intangibles generated by the Debtor postpetition to the extent that the use of cash collateral results in a decrease in the value of the secured party's interest in the property. The Debtor will pay Wells Fargo the sum of $25,000 per month, with the first payment having been due on June 30, 2012. A copy of the stipulation and budget is available for free at: http://is.gd/1w3W7P Wells Fargo is represented by: Douglas W. Brown BROWN, BERARDINI & DUNNING, P.C. 2000 S. Colorado Boulevard Tower Two, Suite 700 Denver, Colorado 80222 Tel: (303) 329-3363 E-mail: dbrown@bbdfirm.com About Premier Paving Headquartered in Denver, Colorado Premier Paving Inc. -- http://www.premierpavinginc.com/-- operates a full-service highway construction company, which services include paving, grading and milling, geo-textiles, trucking, traffic control and quality control. Premier Paving also owns and operates an asphalt plant. Premier Paving filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 12-16445) on April 2, 2012. Judge Michael E. Romero presides over the case. In its petition, the Debtor estimated up to $50 million in assets and debts. The petition was signed by David Goold, treasurer. Lee M. Kutner, Esq., at Kutner Miller Brinen, P.C., serves as the Debtor's counsel. Pinnacle Real Estate Advisors LLC provides professional broker services related to the sale of certain of the Debtor's real estate assets. The Official Unsecured Creditors Committee is represented by Onsager, Staelin & Guyerson, LLC. PREMIER PAVING: Disclosure Statement Hearing Set for July 1 ----------------------------------------------------------- A hearing to consider the adequacy of the disclosure statement explaining Premier Paving, Inc.'s plan of reorganization will be held on July 1, 2013, at 03:00 p.m. Under the Plan, the Debtor will restructure its debt and obligations and continue to operate in the ordinary course of business and continue with its efforts to sell or refinance the obligations associated with its asphalt plant. All classes of claims, except Class 12(a)(Allowed Unsecured Claims of less than or equal to $1,000) and Class 12(d)(Insider Unsecured Claims, will receive a 100% recovery of their claim amount. Holders of Class 12(a) Claims will recover 50%, while holders of Class 12(d) Claims will not receive anything. All creditors, except Suncor Energy and the convenience class, are paid over seven years. Suncor Energy will be paid at an accelerated rate because it is the only asphalt cement provider in Colorado. Asphalt cement is a petroleum-based product that, when mixed with rock, forms the basis of the Debtor's product produced at the asphalt plant. The Debtor's product is unique and proprietary in its design. The Debtor is contractually bound to provide its proprietary asphalt product to its customers. Accordingly, the Debtor must maintain its relationship with Suncor Energy, which stated that it will cease its relationship with the Debtor unless it is paid in an accelerated rate. The Debtor will pay the principal portion of the secured claim of its primary secured creditor, Wells Fargo Bank, N.A., over seven years, in order to also maximize the payment to unsecured creditors and provide sufficient cash flow for business operations. A full-text copy of the Disclosure Statement dated June 7, 2013, is available for free at: http://bankrupt.com/misc/PREMIERPAVINGds0607.pdf About Premier Paving Headquartered in Denver, Colorado Premier Paving Inc. -- http://www.premierpavinginc.com/-- operates a full-service highway construction company, which services include paving, grading and milling, geo-textiles, trucking, traffic control and quality control. Premier Paving also owns and operates an asphalt plant. Premier Paving filed for Chapter 11 bankruptcy (Bankr. D. Colo. Case No. 12-16445) on April 2, 2012. Judge Michael E. Romero presides over the case. In its petition, the Debtor estimated up to $50 million in assets and debts. The petition was signed by David Goold, treasurer. Lee M. Kutner, Esq., at Kutner Miller Brinen, P.C., serves as the Debtor's counsel. Pinnacle Real Estate Advisors LLC provides professional broker services related to the sale of certain of the Debtor's real estate assets. The Official Unsecured Creditors Committee is represented by Onsager, Staelin & Guyerson, LLC. RACE POINT: S&P Assigns 'B+' CCR to 4 RPP Co-Borrowers ------------------------------------------------------ Standard & Poor's Ratings Services assigned a 'B+' corporate credit rating to the four Race Point Power (RPP) co-borrowers (Race Point Power II LLC, Race Point Power III LLC, Race Point Power IV LLC, and NeoElectra Lux S.ar.l.) and lowered its rating to 'B+' from 'BB' on the co-borrowers' $275 million (with an estimated $69.5 million outstanding as of Jan. 2013), seven-year senior secured term loan. At the same time, S&P revised its recovery rating on the loan to '3' from '1'. The recovery rating of '3' indicates S&P's expectation for meaningful (50% to 70%) recovery of principal in the event of a payment default. The outlook is negative. The 'B+' corporate credit rating is assigned based on the methodology S&P uses for project developers, which applies to independent corporate project developers, corporate utility subsidiaries, or structured, closed-end portfolios. S&P views the issuer as a corporate project developer, in its analytical judgment. The rating reflects S&P's quality of cash flow (QCF) score of '8' and anticipated parent-only credit ratios for RPP. S&P's QCF score reflects its view of the concentration of distributions from NeoElectra's assets in Spain and the nation's tough fiscal and economic environment, which has increased Spanish regulatory risk. "The 'B+' rating reflects our view of regulatory risk and concentration in Spanish power plants, a limited ability to absorb further revenue taxes or a tariff reduction on Spanish assets, poor performance from some of the U.S assets, and the effects of double leverage on the portfolio overall," said Standard & Poor's credit analyst Tony Bettinelli. The negative outlook reflects S&P's view of the regulatory uncertainty regarding persistent tariff deficits in Spain and the possibility that project revenue could be further reduced by future legislation in Spain. RAM OF EASTERN: Plan Exclusivity to Expire Today ------------------------------------------------ RAM of Eastern North Carolina LLC's time to file its Plan of Reorganization and Disclosure Statement is to expire today, absent further extension from the Court. On May 28, the Hon. J. Rich Leonard of the U.S. Bankruptcy Court for the Eastern District of North Carolina extended until June 20, the Debtor's exclusive plan filing period. 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: Gets Final OK to Use Cash Collateral ---------------------------------------------------- Bankruptcy Judge J. Rich Leonard granted RAM of Eastern California, LLC final authority to access cash collateral to be used for its postpetition, necessary and reasonable operating and other expenses. Prior to filing for bankruptcy, Wells Fargo Bank, N.A., Sound Bank and First South Bank -- the secured creditors -- perfected security interests in the Debtor's real property assets. In relation to the Final Cash Collateral Use Order, the Debtor is required to submit monthly budgets to Wells Fargo every month up and to confirmation of its bankruptcy plan. The Debtor is also ordered to continue to make adequate payment to Wells Fargo on a monthly basis in the amount of $10,200. The Debtor is also required to remain current in the payment of all postpetition tax liabilities. The Debtor is prohibited from disposing of any asset to which the Secured Creditors' lien may attach out of the ordinary course of its business without the advance written consent of the Secured Creditor, and, as necessary, the approval of the Court. The Debtor will not dispose of any assets in a bulk sale without the prior notice to the secured creditors and, as necessary, the approval of this Court. The Debtor has a June 20 deadline to file a Chapter 11 plan. 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. RELIANCE GROUP: Deloitte Wins Dismissal of Lawsuit -------------------------------------------------- Judge Eileen Bransten of the Supreme Court, New York County, granted Deloitte & Touche LLP's motion for summary judgment and dismissed the lawsuit, THE RGH LIQUIDATING TRUST, on behalf of: RELIANCE GROUP HOLDINGS, INC.; THE GENERAL UNSECURED CREDITORS OF RELIANCE GROUP HOLDINGS, INC. RELIANCE FINANCIAL SERVICES CORP. (n/k/a Reorganized RFS Corporation); and THE GENERAL UNSECURED CREDITORS OF RELIANCE FINANCIAL SERVICES CORP., Plaintiffs, v. DELOITTE & TOUCHE LLP and JAN A. LOMMELE, Defendants (N.Y.). The action is based upon the Defendants' allegedly improper performance of actuarial and accounting services for Reliance Group Holdings, Inc., Reliance Financial Services Corp., and Reliance Insurance Company. The RGH Liquidating Trust commenced this action in January 2006, asserting fraud claims on behalf of the general unsecured creditors of RGH and RFS, including a syndicate of 15 banks that collectively loaned RFS $237.5 million; the Pension Benefit Guaranty Corporation; and two former employees of RGH and RFS, David Woodward and Christine Howard. In November 2007, Plaintiff filed an Amended Complaint, asserting one cause of action for actuarial fraud and one cause of action for accounting and auditing fraud. The Defendants move for summary judgment, seeking dismissal of the Amended Complaint, as it remains, in its entirety. In particular, Defendants seek dismissal as to the claims of the Banks, the PBGC, and Woodward and Howard. According to the Amended Complaint, the Banks included Chemical Bank, Bank of America of Illinois, Bank of New York, Bankers Trust Company, Credit Lyonnais New York Branch, Credit Lyonnais Caymen Islands Branch, National Westminster Bank USA, Bank of Montreal, Corestates Bank, N.A., Union Bank, ABN AMRO Bank N.V., New York Branch, Sanwa Bank California, Banque Paribas, New York Branch, The Yasuda Trust and Banking Co., Ltd., and PNC Bank, National Association. A copy of the Court's June 6, 2013 slip opinion is available at http://is.gd/bxURmBfrom Leagle.com. About Reliance Group Holdings Headquartered in New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- owned 100% of the stock of Reliance Financial Services Corporation, which, in turn, owned 100% of the stock of Reliance Insurance Company. RIC generated upwards of 90% of the income of RGH, whose principal business was its ownership, through RFS, of RIC and its property and casualty insurance subsidiaries. On May 29, 2001, the Commonwealth Court of Pennsylvania placed RIC in rehabilitation, and named the Pennsylvania Insurance Commissioner as RIC's rehabilitator. RIC entered liquidation on Oct. 3, 2001, and the Commissioner was appointed liquidator. RGH and RFS filed for Chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403), disclosing $12,598,054,000 in assets and $12,877,472,000 in liabilities. On April 22, 2005, RFS's plan of reorganization, approved by the bankruptcy court, went into effect and RFS emerged from bankruptcy as Reorganized RFS Corporation. Under RFS's bankruptcy plan, its litigation claims and those of its general unsecured creditors were assigned to RGH. The bankruptcy court confirmed RGH's First Amended Plan effective Dec. 1, 2005, which created a liquidating trust. RESIDENTIAL CAPITAL: Proposes NewOak Capital as Consultant ---------------------------------------------------------- Residential Capital LLC and its affiliates seek the Bankruptcy Court's authority to employ NewOak Capital Advisors LLC as a consultant, nunc pro tunc to May 24, 2013, to provide these services: (a) Analysis and confirmation of the tranche structure of the FGIC Insured Trusts and FGIC guarantees associated with the settlement with the Financial Guaranty Insurance Corporation; (b) Calculation of the expected lifetime losses from the date of issuance for each of the 61 mortgage pools underlying each of the FGIC Insured Trusts; (c) Calculation of the expected lifetime losses from the date of issuance for each of the tranches in the securitizations that are not guaranteed by FGIC; and (d) Provision of other expert-related testimony, consulting or advisory services as may be needed in connection with the FGIC Settlement. NewOak may provide similar valuation services in connection with an independent analysis of the claims asserted by MBIA Insurance Corporation. NewOak will be paid a combination of flat-rates and hourly rates. The firm will receive a flat-rate of $1,000 for each of the 61 individual mortgage pools underlying the RMBS trusts for which NewOak performs an expected lifetime loss calculation; and a flat- rate of $1,000 for each CUSIP, tranche, or class of certificates not guaranteed by FGIC for which NewOak performs an expected lifetime loss calculation. For NewOak's other consulting and potential expert witness services, it will be paid the following hourly rates: Partners $950 Managing Directors $750 Director/Associate $600 Associate $500 Analyst $400 The firm will also be paid its necessary out-of-pocket expenses. Ron D'Vari, Chief Executive Officer of NewOak Capital Advisors LLC, assures the Court that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtors and their estates. The Court was slated to consider approval of the employment application on June 19, 2013, at 12:00 p.m. (ET). Objections were due June 18. Gary S. Lee, Esq., Lorenzo Marinuzzi, Esq., and James A. Newton, Esq., at Morrison & Foerster LLP, in New York, filed the employment application on behalf of the Debtors. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Use of AFI Cash Collateral Limited ------------------------------------------------------- Judge Martin Glenn signed off on a stipulation, which provides that Residential Capital LLC and its affiliates' rights to use cash collateral of Ally Financial Inc. pursuant to the AFI DIP and cash collateral order are terminated as of June 14, 2013, except that the Debtors are permitted to use Cash Collateral from the period beginning on June 13, 2013, through and including June 27, 2013, solely for payment of (i) the cash collateral costs subject to the certain caps, and (ii) the adequate protection payments. The stipulation was signed by Gary S. Lee, Esq., and Todd M. Goren, Esq., at Morrison & Foerster LLP, in New York, for the Debtors; Richard M. Cieri, Esq., Ray C. Schrock, Esq., and Stephen E. Hessler, Esq., at Kirkland & Ellis LLP, in New York, for Ally Financial Inc. and Ally Bank; J. Christopher Shore, Esq., and Harrison Denman, Esq., at White & Case LLP, in New York, for the Ad Hoc Group of Holders of Junior Secured Notes; and Gerard Uzzi, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, for the Ad Hoc Group of Holders of Junior Secured Notes. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: U.S. Trustee Supports Motion to Unseal ----------------------------------------------------------- Tracy Hope Davis, the U.S. Trustee for Region 2, supports Berkshire Hathaway, Inc.'s motion seeking an order unsealing the report of the Chapter 11 examiner in Residential Capital's cases arguing that, although there are occasions that examiner reports are appropriately filed under temporary seal, the strong presumption of public access to bankruptcy records should be abridged only in accordance with the specific standards of Section 107 of the Bankruptcy Code. The U.S. Trustee argues that, in this case, the Examiner's Report was temporarily sealed based on the Debtors' oral application under Section 105. Courts may balance competing statutory interests of public access and confidentiality in Section 107 when temporarily sealing documents pending an opportunity for a full hearing, the U.S. Trustee says. The general equitable authority of the Court found in Section 105 should not be substituted, however, for a statutory provision that specifically deals with the sealing of documents, the U.S. Trustee asserts. Section 107 provides both a presumptive right of public access -- and an absolute right of United States Trustee access -- to documents filed in bankruptcy courts, the U.S. Trustee further asserts. The Debtors, according to the U.S. Trustee, have not demonstrated that they have met the requirements for temporary seal and similarly, because relief under Section 107 has not been sought, it is unclear whether any of the parties to the Plan Support Agreement can satisfy the specific requirements of Section 107. The Debtors should be required to satisfy those standards and not be permitted to circumvent Section 107 by relying instead on the Court's general equitable powers under Section 105 -- even if the sealing is of limited duration, the U.S. Trustee further argues. A hearing on Berkshire's Motion to Unseal will be held on June 26, 2013, at 10:00 a.m. Trial Attorney Eric J. Small, Esq., in New York, represents the U.S. Trustee. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Stipulation on MortgageIT Issue Approved ------------------------------------------------------------- The Bankruptcy Court approved the stipulation between Debtor Residential Funding Company, LLC, and MortgageIT, Inc., which stipulation directs MortgageIT to pay RFC $200,000 in exchange for the dismissal of a lawsuit RFC filed against MortgageIT in federal court. The payment arises from MortgageIT's alleged breach of a prepetition contract with RFC relating to the sales of residential mortgage loans. RFC filed the lawsuit, pending in the U.S. District Court for the District of Minnesota, on account of the alleged breaches. DB Structured Products, Inc., MortgageIT, Inc. and MortgageIT Holdings, Inc., are represented by Steven Wilamowsky, Esq., at Bingham McCutchen LLP, in New York. The Debtors are represented by Gary S. Lee, Esq., and Norman S. Rosenbaum, Esq., at Morrison & Foerster LLP, in New York. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RG STEEL: Seeks Court Approval to Hire APS International as Agent ----------------------------------------------------------------- RG Steel Sparrows Point LLC filed a motion seeking approval from the U.S. Bankruptcy Court for the District of Delaware to employ APS International. RG Steel tapped the firm to serve as agent of the company and its affiliates, RG Steel Warren LLC and RG Steel Wheeling LLC, in connection with the lawsuits they filed against George Kelk Corp. and nine other defendants. The other defendants are BIMAC Inc., Golden Ocean Management AS, International Freight Systems Inc., Opta Minerals Inc., PCL (Shipping) Pte. Ltd., Transport Sales and Service, United Bulk Carriers International Navegacao Lda?Madeira, and Veitsch-Radex America Inc. APS' primary task as agent is to serve complaints and summonses on the defendants, which are all based outside of the United States. RG Steel anticipates that it will take three months to one year or more to serve the complaints and summonses. BIMAC Inc. may be reached at: Jeffrey Vanacore Perkins Coie LLP 30 Rockefeller Plaza, 22nd Floor New York, NY 10112 George Kelk Corporation may be reached at: George Kelk, President George Kelk Corporation 48 Lesmill Road CANADA Don Mills, ON M3B 2T5 Golden Ocean Management AS may be reached at: Herman Billung, President Golden Ocean Management AS Bryggegata 3 PO Box 2005-Vika Oslo, No 0125 International Freight Systems may be reached at: Ron Chamberlain, President International Freight Systems Inc. 18900 County Road 42 CANADA Tilbury, ON N0P 3L0 Opta Minerals Inc. may be reached at: Jeffrey Vanacore, Esq. PERKINS COIE LLP 30 Rockefeller Plaza, 22nd Floor New York, NY 10112 - and - Edward Kok Opta Minerals, Inc. 810 Sherman Avenue Coeur d'Alene, ID 83814 PCL (Shipping) Pte. Ltd. may be reached at: George Chalos Chalos & Co., P.C. 55 Hamilton Avenue New York, NY 11771 Transport Sales and Service may be reached at: Timothy Reardon, Esq. Nadler Nadler & Burdman Company, LPA 6550 Seville Drive, Suite B Canfield, OH 44406 United Bulk Carriers may be reached at: James Saville, Jr. Hill Rivkins LLP 45 Broadway, Suite 1500 New York, NY 10006 Veitsch-Radex America Inc. may be reached at: Eric Monzo, Esq. MORRIS JAMES LLP PO Box 2306, 500 Delaware Ave Suite 1500 Wilmington, DE 19899 - and - Richard Parks, Esq. Pietragallo Gordon Alfano Bosick & Raspanti, LlP 7 West State Street, Suite 100 Sharon, PA 16146 About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owned Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12-11661) on May 31, 2012. Bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion. As of the bankruptcy filing, the Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. Kramer Levin Naftalis & Frankel LLP represents the Official Committee of Unsecured Creditors. Huron Consulting Services LLC serves as the Committee's financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. CJ Betters Enterprises Inc. paid $16 million for the Ohio plant. RHODE ISLAND: Moody's May Cut Ratings on 38 Studios Debt Default ---------------------------------------------------------------- Annie Linskey, writing for Bloomberg News, reports Rhode Island may have its credit grade cut by Moody's Investors Service after lawmakers debated defaulting on $75 million in debt that brought a company started by former Boston Red Sox pitcher Curt Schilling to Providence. According to the report, Moody's rates the state's general- obligation debt Aa2, its third highest score. A change would affect $2.1 billion in securities, Moody's said in a statement this week. Bloomberg relates that Rhode Island's debt tied to 38 Studios LLC, Mr. Schilling's company, was cut two steps to Baa1 from A2 by Moody's, citing a potential for default next year. The Rhode Island Economic Development Corp. sold the bonds in 2010 to provide an incentive for Mr. Schilling to move his video-game company from Massachusetts. The bonds were backed by a state "moral obligation pledge," Moody's has said. Moody's added that a state reserve fund won't be able to cover interest payments due in May 2014 without additional money provided under the forthcoming budget. According to the report, Moody's said its analysts are focused on the results of budget deliberations during the next few weeks. "Failure to appropriate funds to pay debt service on 38 Studios or any other appropriation-dependent debt which would likely have a multi-notch impact," the company said. Governor Lincoln Chafee, 60, included a $2.5 million payment on the debt in his spending plan for fiscal 2014, which begins July 1, Bloomberg relates, citing the Providence Journal. In debating the plan, lawmakers considered whether to default on the 38 Studios obligations. "I am confident that we will continue to honor our obligations," Gov. Chafee said in a statement. "We want to send a clear message to the investment community that Rhode Island is a place that will make the difficult but necessary decisions for the long-term health of our state. I believe that the General Assembly will do the right thing to protect the reputation and borrowing ability of Rhode Island." RHYTHM AND HUES: Settles Dispute With JS Communications ------------------------------------------------------- The Hon. Neil W. Bason of the U.S. Bankruptcy Court for the Central District of California entered an order approving the stipulation settling the dispute regarding the request of JS Communications, Co. Ltd., for payment of a break-up fee in connection with the sale of substantially all of Rhythm & Hues, Inc. JS, the Official Committee of Unsecured Creditors, and the Debtor stipulated and agreed that JS will be entitled to an allowed break-up fee in the amount of $300,000. On March 7, 2013, the Debtor entered into a non-binding letter of intent with JS, pursuant to which JS proposed to purchase substantially all of the Debtor's assets as a stalking horse bidder and JS, as stalking horse bidder, would be entitled to a break-up fee of $425,000 upon the consummation of the sale to a buyer other than JS that paid at least $525,000 in cash above the purchase price contemplated. The Bid Procedures were approved by the Court on March 13, 2013. As reported by the TCR on April 10, 2013, the Debtor closed a transaction with Parana Studios affiliate 34x118 HOLDINGS, LLC, on April 8. The Buyer paid the Debtor $1.2 million in cash, and assumed a number of liabilities, including the outstanding obligations under the DIP loan. The Debtor and the Committee filed an objection to JS's break-up fee, asserting that a break-up fee is triggered and becomes due to JS only by an increase in the cash component of the winning bid and that the cash increment under the winning bid of the Buyer was not adequate to do so. JS contested the assertions and stated, "The convenant of the winning bidder to pay cure fees that JS would not pay under the LOI and to leave cash assets with the estate that JS asserts it would have acquired under the LOI constitute cash increments triggering the break-up fee under the terms of the Bid Procedures Order, and that in any event the Bankruptcy Court might under the circumstances consider non-cash increases in value of the winning bid as entitling JS to the payment of a break-up fee." The Committee and the Debtor contested these assertions. Evan M. Jones, Esq., at O'Melveny & Myers LLP, the counsel for JS, stated that the Objections are based on the technical question of whether the winning bid met the requirements to trigger the payment of a break-up fee to JS, and are not based on any failure by JS to perform under its LOI in good faith. "The parties recognized that litigation of the disputes will be costly and the results uncertain and, therefore, after negotiations, the parties have reached an agreement with respect to the dispute. JS has agreed that any payment due to it can be paid to O'Melveny & Myers LLP," Ms. Jones stated. JS is also represented by Ana Acevedo, Esq., at O'Melveny & Myers. The Committee is represented by Gary E. Klausner, Esq., and Eric D. Goldberg, Esq., at Stutman, Treister & Glatt Professional Corporation. The Debtor is represented by Brian L. Davidoff, Esq., C. John M. Melissinos, Esq., and Courtney E. Pozmantier, Esq., at Greenberg Glusker Fields Claman & Machtinger LLP. About Rhythm and Hues Rhythm and Hues, Inc., aka Rhythm and Hues Studios Inc., filed its Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-13775) in Los Angeles on Feb. 13, 2013, estimating assets ranging from $10 million to $50 million and liabilities ranging from $50 million to $100 million. Judge Neil W. Bason oversees the case. Brian L. Davidoff, Esq., C. John M Melissinos, Esq., and Claire E. Shin, Esq., at Greenberg Glusker, serve as the Debtor's counsel. Houlihan Lokey Capital Inc., serves as investment banker. The petition was signed by John Patrick Hughes, president and CFO. R&H provided visual effects and animation for more than 150 feature films and has received Academy Awards for Babe and the Golden Compass, an Academy Award nomination for The Chronicles of Narnia and Life of Pi. R&H owned a 135,000 square-foot facility in El Segundo, California, and had more than 460 employees. Key clients Universal City Studios LLC and Twentieth Century Fox, a division of Twentieth Century Fox Film Corporation, provided DIP financing. They are represented by Jones Day's Richard L. Wynne, Esq., and Lori Sinanyan, Esq. The Official Committee of Unsecured Creditors tapped Stutman, Treister & Glatt Professional Corporation as its counsel. As reported by the Troubled Company Reporter on May 16, 2013, the Debtor sought court authorization from to change its corporate name to AWTR Liquidation, Inc. RHYTHM AND HUES: Hires O'Connor Davies as Bankruptcy Accountants ---------------------------------------------------------------- Rhythm and Hues, Inc. asks the Bankruptcy Court for permission to employ O'Connor Davies, LLP as general bankruptcy accountants. The firm will provide various services, including: a. Preparing the Debtor's federal consolidated and California corporate income tax returns for 2012 and 2013 and such other years as may be required; b. Working with the IRS on the on-going audit, and assisting the Debtor with the resolution of the proof of claim filed by the IRS in connection therewith; and c. Preparing a federal net operating loss carryback refund claim for the Debtor. The firm's rates are: Professional Position Hourly Rate ------------ -------- ----------- Dean M. Hottle II Partner $410 Tim Desmond Partner $400 Patrick Halloran Partner $350 Erika Prakasam Manager $290 Matt Corona Manager $280 Dean M. Hottle II attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Rhythm and Hues Rhythm and Hues, Inc., aka Rhythm and Hues Studios Inc., filed its Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-13775) in Los Angeles on Feb. 13, 2013, estimating assets ranging from $10 million to $50 million and liabilities ranging from $50 million to $100 million. Judge Neil W. Bason oversees the case. Brian L. Davidoff, Esq., C. John M Melissinos, Esq., and Claire E. Shin, Esq., at Greenberg Glusker, serve as the Debtor's counsel. Houlihan Lokey Capital Inc., serves as investment banker. The petition was signed by John Patrick Hughes, president and CFO. R&H provided visual effects and animation for more than 150 feature films and has received Academy Awards for Babe and the Golden Compass, an Academy Award nomination for The Chronicles of Narnia and Life of Pi. R&H owned a 135,000 square-foot facility in El Segundo, California, and had more than 460 employees. Key clients Universal City Studios LLC and Twentieth Century Fox, a division of Twentieth Century Fox Film Corporation, provided DIP financing. They are represented by Jones Day's Richard L. Wynne, Esq., and Lori Sinanyan, Esq. The Official Committee of Unsecured Creditors tapped Stutman, Treister & Glatt Professional Corporation as its counsel. At the end of March 2013, the Debtor sold the business to 34x118 Holdings Inc., an affiliate of competitor Prana Studios Inc. The buyer agreed to pay $1.2 million cash, take over payment of the loan financing the Chapter 11 effort, pay defaults on contracts going along with the sale, and assume liabilities to employees for as much as $5 million. On May 24, 2013, the Debtor obtained Court permission to change its corporate name to AWTR Liquidation, Inc. RHYTHM AND HUES: Plan Outline Deadline Extended to July 31 ---------------------------------------------------------- The deadline for Rhythm and Hues, Inc., now known as AWTR Liquidation, Inc., to file a plan of reorganization has been extended from June 11, 2013 to July 31, 2013. A further case status conference will be held on July 2, 2013 at 1:00 p.m. About Rhythm and Hues Rhythm and Hues, Inc., aka Rhythm and Hues Studios Inc., filed its Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-13775) in Los Angeles on Feb. 13, 2013, estimating assets ranging from $10 million to $50 million and liabilities ranging from $50 million to $100 million. Judge Neil W. Bason oversees the case. Brian L. Davidoff, Esq., C. John M Melissinos, Esq., and Claire E. Shin, Esq., at Greenberg Glusker, serve as the Debtor's counsel. Houlihan Lokey Capital Inc., serves as investment banker. The petition was signed by John Patrick Hughes, president and CFO. R&H provided visual effects and animation for more than 150 feature films and has received Academy Awards for Babe and the Golden Compass, an Academy Award nomination for The Chronicles of Narnia and Life of Pi. R&H owned a 135,000 square-foot facility in El Segundo, California, and had more than 460 employees. Key clients Universal City Studios LLC and Twentieth Century Fox, a division of Twentieth Century Fox Film Corporation, provided DIP financing. They are represented by Jones Day's Richard L. Wynne, Esq., and Lori Sinanyan, Esq. The Official Committee of Unsecured Creditors tapped Stutman, Treister & Glatt Professional Corporation as its counsel. At the end of March 2013, the Debtor sold the business to 34x118 Holdings Inc., an affiliate of competitor Prana Studios Inc. The buyer agreed to pay $1.2 million cash, take over payment of the loan financing the Chapter 11 effort, pay defaults on contracts going along with the sale, and assume liabilities to employees for as much as $5 million. On May 24, 2013, the Debtor obtained Court permission to change its corporate name to AWTR Liquidation, Inc. RITE AID: S&P Assigns 'CCC' Rating to $400MM Sr. Unsecured Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned a 'CCC' issue- level rating and '6' recovery rating to Rite Aid Corp.'s $400 million senior unsecured notes due 2021. S&P rates the proposed unsecured notes two notches below the company's 'B-' corporate credit rating. The outlook is stable. Rite Aid intends to use the net proceeds from the notes to refinance a portion its existing $810 million 9.5% unsecured notes due 2017. The ratings on Rite Aid reflect its "weak" business risk profile and "highly leveraged" financial risk profile. S&P based the business risk profile on the company's competitive disadvantage and weak profitability relative to its peers, CVS Caremark and Walgreen Co. (which S&P rates 'BBB+' and 'BBB', respectively) because of its higher cost structure and under-investment in its store base. Still, Rite Aid achieved significant improvement in profitability in fiscal 2013 due to the higher margin contribution from a strong generic drug pipeline, increased prescription volume from the ExpressScript/Walgreen dispute, and the progress of its loyalty and merchandising programs. S&P expects Rite Aid's financial risk profile to remain highly leveraged due to its significant debt burden. Rite Aid achieved good improvement in credit protection measures in fiscal 2013 due to higher profitability and S&P expects credit measures to remain near current levels in the mid-7x area in fiscal 2014. S&P expects Rite Aid to generate positive free cash flow and maintain substantial availability under its $1.795 billion revolving credit facility. RATINGS LIST Rite Aid Corp. Corporate Credit Rating B-/Stable/-- New Rating Rite Aid Corp. $400M senior unsecured notes due 2021 CCC Recovery rating 6 RIVER CANYON: District Court Declines to Stay Confirmation Hearing ------------------------------------------------------------------ The confirmation hearing on River Canyon Real Estate Investments, LLC's Chapter 11 reorganization plan will proceed this week after Senior District Judge John L. Kane in Colorado denied the request of United Water & Sanitation District to stay the confirmation hearing pending the Sanitation District's appeal from certain bankruptcy court orders. The Sanitation District has lodged an appeal before the District Court challenging certain pre-confirmation hearing real property valuation orders issued by the bankruptcy court. The Sanitation District contends the bankruptcy court's valuation orders are final and appealable, and argues the bankruptcy judge decision to adopt a particular method for valuing the real property lots at issue was erroneous and substantially reduces the value of its claim. The bankruptcy court has already denied a request by the Sanitation District to stay the confirmation hearing, rejecting its contention that the valuation orders are final and appealable and finding insufficient grounds to allow United to proceed interlocutorily. "I find the bankruptcy court's reasoning sound. There are many moving parts to the confirmation inquiry, and the entirety of [the Sanitation District's] appeal will be moot if the Debtor's plan is rejected or if the Douglas Country District Court issues rulings impacting [the Sanitation District's] standing to pursue its claim as a 'special district' under C.R.S. Sec. 32-1-101 et seq. I am unpersuaded that the authorities relied on by [the Sanitation District] warrant tying up the proceedings below so that a potentially secured creditor may proceed to retry an evidentiary issue thoughtfully handled below by the bankruptcy court," Judge Kane said. Judge Kane denied the Debtor's Motion to Dismiss Appeal, but briefing on the merits of the appeal shall remain stayed unless and until the Debtor's Chapter 11 Plan is confirmed. The parties are directed file a Status Report informing the District Court of the status or results of the confirmation proceedings on or before June 24, 2013. A copy of Judge Kane's June 12 Order is available at http://is.gd/42P5hLfrom Leagle.com. United Water & Sanitation District is represented by: Bart B. Burnett, Esq. Kevin Scott Neiman, Esq. Robert Michael Horowitz, Esq. HOROWITZ & BURNETT, P.C. E-mail: bburnett@hblegal.net kneiman@hblegal.net bhorowitz@hblegal.net River Canyon Real Estate Investments, LLC, is represented by: David Vincent Wadsworth, II, Esq. David Jarom Warner, Esq. Harvey Sender, Esq. SENDER WASSERMAN WADSWORTH, P.C. E-mail: dwadsworth@sww-legal.com dwarner@sww-legal.com hsender@sww-legal.com About River Canyon River Canyon Real Estate Investments, LLC, is the developer of the Ravenna residential real estate project in Douglas County, Colorado and the owner of The Golf Club at Ravenna, among other assets. River Canyon filed a Chapter 11 petition (Bankr. D. Colo. Case No. 12-20763) on May 23, 2012, in Denver as part of its settlement negotiations with lender Beal Bank Nevada, and to preserve the value of its assets. At Beal Bank's behest, Cordes & Company was named, effective Oct. 15, 2010, as receiver for the 643-acre real estate development with golf course in Douglas County, Colorado. The Debtor disclosed assets of $19.7 million and liabilities of $45.3 million in its schedules. The property and golf course are estimated to be worth $11 million, and secures a $45 million debt. Judge Elizabeth E. Brown presides over the case. The Debtor is represented by Sender & Wasserman, P.C., as its Chapter 11 counsel. Alan Klein, Glenn Jacks, Dan Hudick, and Bill Hudick own most of the Debtor. Mr. Jacks, which has a 12.8% membership interest, signed the Chapter 11 petition. Richard A. Wieland, the U.S. Trustee for Region 19, was unable to form an official committee of unsecured creditors because an insufficient number of persons holding unsecured claims against the Debtor have expressed interest in serving on a committee. The U.S. Trustee reserves the right to appoint such a committee should interest develop among the creditors. ROTECH HEALTHCARE: Creditors Have Until July 12 to File Claims -------------------------------------------------------------- Rotech Healthcare Inc., et al., sought and obtained an order from the U.S. Bankruptcy Court for the District of Delaware establishing July 12, 2013, at 5:00 p.m. (prevailing Eastern Time) as the deadline by which each person or entity, other than governmental units, must file a proof of claim based on prepetition claims against the Debtors. Governmental units have until Oct. 7, 2013, at 5:00 p.m. (prevailing Eastern Time) by which to file proofs of claim. 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. 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. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTECH HEALTHCARE: Creditors Committee Has OK to Retain Buchanan ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of Rotech Healthcare Inc., et al., obtained authority from the U.S. Bankruptcy Court for the District of Delaware to retain Buchanan Ingersoll & Rooney PC as its local Delaware counsel, nunc pro tunc to April 18, 2013. The hourly rates of Buchanan Ingersoll personnel are: Mary F. Caloway, shareholder $570 Kathleen A. Murphy, associate $320 Tammy R. Rogers, paralegal $155 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. 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. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTECH HEALTHCARE: Has Court OK to Employ Deloitte as Auditor ------------------------------------------------------------- Rotech Healthcare Inc., and its debtor affiliates, obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ Deloitte Tax LLP as tax service providers and Deloitte & Touche LLP as independent auditors. 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. 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. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTECH HEALTHCARE: Creditors Panel Can Hire Grant Thornton ---------------------------------------------------------- The Official Committee of Unsecured Creditors received authority from the U.S. Bankruptcy Court for the District of Delaware to retain Grant Thornton LLP as financial advisors. Grant Thornton will, among other things: -- assist the Committee in the analysis of the current financial position of the Debtors; -- attend and advise at meeting/calls with the Committee and its counsel and representatives of the Debtor and other parties; and -- assist and advise the Committee in its analysis of the Debtors' hypothetical liquidation analyses under various scenarios. The hourly rates of Grant Thornton's personnel are: Partner/Principal/Managing Director $625 - $695 Senior Manager/Director $525 - $610 Manager $410 - $465 Senior Associate $290 - $360 Paraprofessional $75 - $175 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. 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. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTECH HEALTHCARE: Objects to Proposed Moelis Retention ------------------------------------------------------- BankruptcyData reported that Rotech Healthcare filed with the U.S. Bankruptcy Court supplemental objection to the official committee of equity security holders' motion to retain Moelis & Company as financial advisor. Rotech Healthcare states that the Revised Engagement Letter is inconsistent with this Court's ruling at the June 13, 2013 hearing by conditioning Moelis' engagement on an 11 U.S.C. Sec. 328(a) retention. Compensation provided under terms and conditions of employment approved under Sec. 328(a) may only be altered 'if such terms and conditions prove to have been improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions.' This is in direct contravention of the Court's reservation of rights with respect to awarding Equity Committee's professionals less fees if they do not add value to the estate or if the fees are objectionable pursuant to Section 330. In fact, by insisting on Section 328(a) retention, the Equity Committee and Moelis intentionally attempt to undermine the Court's ruling, and that alone is cause to deny Moelis' retention." 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. 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. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTECH HEALTHCARE: Equity Holders Lose Bid to Hire Moelis --------------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that the equity committee in the Rotech Healthcare Inc. Chapter 11 case lost a bid to hire Moelis & Co. LLC as its financial adviser, when a Delaware bankruptcy judge said Moelis' fee was too expensive for a creditor not believed to be getting any recovery. According to the report, U.S. Bankruptcy Judge Peter J. Walsh said that Moelis' proposed fee of $125,000 per month, plus an additional transaction fee if a sale or restructuring provided a recovery for the committee, was not justified. 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. 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. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. ROTHSTEIN ROSENFELDT: Trustee Wants Investors' Evidence Excluded ---------------------------------------------------------------- Carolina Bolado of BankruptcyLaw360 reported that the trustee overseeing the liquidation of Ponzi schemer Scott Rothstein's law firm asked a Florida bankruptcy court to exclude evidence from investors objecting to a provision in the exit plan that bars suits against TD Bank NA. According to the report, Rothstein Rosenfeldt Adler PA trustee Herbert Stettin said the evidence and expert testimony that investors are planning to provide "amounts to little more than rank speculation" and will be irrelevant to the court's analysis of a bar order that would extinguish investors' rights to sue TD Bank. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- was suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on Jan. 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case is represented by Michael Goldberg, Esq., at Akerman Senterfitt. SABANA DEL PALMAR: FDIC-R Has Green Light to Foreclose ------------------------------------------------------ Bankruptcy Judge Enrique S. Lamoutte granted the Federal Deposit Insurance Corporation, as receiver for Westernbank Puerto Rico, relief from the automatic stay in the Chapter 11 case of Sabana Del Palmar, Inc., allowing FDIC-R to enforce its loan documents against the Debtor including, without limitation, a foreclosure of the Debtor's property. Judge Lamoutte said FDIC-R has proven there is no equity in the Debtor's Property and the Debtor has failed to prove that it can successfully reorganize in a reasonable amount of time. A copy of the Court's May 29, 2013 Opinion and Order is available at http://is.gd/mZWuFjfrom Leagle.com. In a separate ruling also on May 29, Judge Lamoutte denied Sabana del Palmar's Motion for Turnover of Property, and granted FDIC-R's motion to excuse turnover. A copy of the Court's May 29, 2013 Opinion and Order is available at http://is.gd/Efx3hQfrom Leagle.com. FDIC-R's expert established that the Property is currently valued at $9,920,000 for purposes of the Motion for Relief. The Debtor financed the construction and development of the Property with financing obtained from Westernbank with the loans that constitute the outstanding debt that is the subject of FDIC-R's proof of claims. On April 30, 2010, the Puerto Rico Commissioner of Financial Institutions closed Westernbank and the FDIC-R was appointed receiver of Westernbank. On March 15, 2012, the FDIC-R filed a Complaint in the U.S. District Court for the District of Puerto Rico seeking to enforce its loan documents against the Debtor including, without limitation, a foreclosure of the Property. On July 3, 2012, at the behest of FDIC-R, the District Court appointed a receiver over the Debtor's Property. When it filed for bankruptcy, the Debtor owed FDIC-R $32,070,760 on a loan secured by, inter alia, a first priority mortgage lien on the Property -- First Loan -- and an additional $8,698,961 on a loan secured by an additional lien in, inter alia, the Property -- Second Loan. The balance owed takes into consideration roughly $27,000,000 paid by the debtor towards the construction loan. FDIC-R is a first-priority secured creditor and that its liens in the Property are perfected. The Debtor submitted a sketch of a plan of reorganization wherein Debtor proposes to sell the unsold units of the Property over a three-year period. The Debtor's Sketch of Plan involves managing the Property and apportioning a percentage of the proceeds of the sales of the units of the Property to unsecured creditors. Further, the Sketch of Plan is contingent on the Debtor obtaining post-petition financing and giving super-priority status to the proposed lender. About Sabana Del Palmar Sabana Del Palmar, Inc., is a real estate company formed in 1996 for the purpose of purchasing real property and constructing 150 residential units for marketing and resale to third parties in a development located in Bayamon, Puerto Rico, known as Mirabella Village & Club. The Property consists of the 69 remaining unsold units (150 were constructed, and 81 were subsequently sold). Of the remaining 69 units, 19 have been approved by the Court for sale. However, the sales had not closed. Sabana Del Palmar is a corporation wholly-owned by Gulfcoast Irrevocable Trust IV. It has no employees. Michael Scarfia, Sr., is the sole officer of Sabana Del Palmar and the sole trustee and beneficiary of Trust IV. Mr. Scarfia is an experienced real estate developer. Sabana Del Palmar, dba Mirabella Village & Club, filed for Chapter 11 bankruptcy (Bankr. D.P.R. Case No. 12-06177) on Aug. 5, 2012. Carmen D. Conde Torres, Esq., at C.Conde & Assoc., serves as the Debtor's counsel. In its petition, the Debtor scheduled assets of US$262,415 and liabilities of US$49,594,964. 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/prb12-06177.pdf The petition was signed by Mr. Scarfia as president. SAN DIEGO HOSPICE: Government Files $112 Million Claim ------------------------------------------------------ Paul Sisson, writing for U-T San Diego, reports that the federal government said Monday the San Diego Hospice owed it $112 million for "false claims for payment" in 2009 and 2010. According to the report, the claim, which dwarfs all the others in the bankruptcy case, had been anticipated since late 2012, when the hospice's chief executive officer, Kathleen Pacurar, publicly acknowledged problems with Medicare billings that led to the hospice's liquidation. According to the report, Sam Maizel, the attorney who represents the hospice's creditors in the bankruptcy case, said Tuesday that he would like to know more about how the government arrived at $112 million. "We're certainly going to investigate the basis for the (Centers for Medicare & Medicaid) claim. It provides no evidence of how they've calculated the amount they've asserted," Mr. Maizel said. He is with Pachulski Stang Ziehl & Jones. The report notes the government's $112 million claim would raise the projected unsecured claims in the case to between $150 million and $159 million. A liquidation plan filed in May states that the bankruptcy trust expects to have about $13.5 million to disburse once all sales are final and all commissions are paid. If creditors approve the plan, an estimated $5.5 million to $6.1 million would be used to pay 100 percent of administrative and priority claims including about $1.7 million in lawyers' fees and $1.2 million in unpaid employee leave and other reimbursements. That would leave between $7.3 million and $7.9 million to pay the estimated $124 million to $128 million in unsecured requests. According to the report, Mr. Maizel said the amount will be paid on a pro-rata basis. Given that the CMS claim represents 90 percent of the unsecured claims, that would mean the federal government is entitled to 90 percent of the remaining money. According to the report, the liquidation plan states that creditors have asked CMS to split its claim into two parts. The government, under the proposal, would receive an unsecured claim equal to the total amount of all other unsecured claims. For example, if the creditors approve a total of $12 million in unsecured claims, then the government would also get $12 million, creating a total pool of $24 million. This arrangement would give the government a 50-50, rather than a 90-10 split of the remaining cash. The report relates Mr. Maizel said he did not take the government's claim as a rejection of the 50-50 proposal. "I believe we are still negotiating," he said. About San Diego Hospice & Palliative Care San Diego Hospice & Palliative Care Corporation filed a Chapter 11 petition (Bankr. S.D. Cal. Case No. 13-01179) in San Diego on Feb. 4, 2013. The Debtor is the operator of the San Diego Hospice and The Institute for Palliative Medicine, one of the largest community-owned, not-for-profit hospices in the country. The Debtor scheduled $20,369,007 in total assets and $14,888,058 in total liabilities. Even before the bankruptcy filing, the Debtor has been under a federal investigation, focusing whether it allowed patients to stay in the program even when their diagnosis changed. The Debtor said that it will meet with government agencies to address their concerns, explore partnerships with other health care organizations, and work to restructure and resize San Diego Hospice. The Debtor said it has encouraged Scripps Health, the region's largest provider of health care services, to enter the hospice business. Procopio, Cory, Hargreaves & Savitch LLP serves as counsel to the Debtor. On April 30, 2013, San Diego Hospice received Court authority to sell its unused 24-bed hospice facility to Scripps Health for $16.55 million. Scripps made the opening bid of $10.7 million at the auction that took place before the sale-approval hearing. The other bidder was Sharp Healthcare. The sale is also subject to approval by regulators in California. In May 2013, San Diego Hospice and its creditors' committee jointly filed a liquidating Chapter 11 plan and an explanatory disclosure statement. There will be a June 27 hearing in U.S. Bankruptcy Court in San Diego for approval of disclosure materials telling unsecured creditors with claims from $12 million to $16 million why their recovery may range from nothing to 43 percent. SBM CERTIFICATE: SEC Wants Chapter 11 Trustee --------------------------------------------- The Securities and Exchange Commission has filed a motion asking the Bankruptcy Court to enter an order directing the appointment of a chapter 11 trustee in the bankruptcy case of SBM Certificate Company, et al. The Debtors filed their Chapter 11 bankruptcy petitions the last day they were to otherwise respond to the Commission's motion seeking, among other relief, the immediate appointment of a receiver in a matter pending against them in the United States District Court for the District of Maryland, Greenbelt Division. SEC v. SBMIC, et al., 06-cv-866-DKC (U.S. Dist. Md. Chasanow, CJ). The Debtors, on March 2, 2012, were held in civil contempt by Chief Judge Chasanow for engaging in acts of misappropriation of company assets, self-dealing and deliberate violations of a lawful judgment entered against them. SEC v. SBM Inv. Certificates, Inc., et al., 2012 WL 706999 (Mar. 2, 2012 D. Md.). On March 22, 2013, the Commission moved, among other things, for the immediate appointment of a receiver because evidence emerged that Debtors had engaged in further acts of misconduct and had utterly failed to comply with a final consent judgment. "The Commission maintains that the grounds for its motion seeking the appointment of a receiver before Chief Judge Chasanow also justify the immediate appointment of a Chapter 11 trustee in these bankruptcy proceedings. The Debtors, through their management, are grossly unfit to continue managing these Debtors. To preserve the assets of these bankruptcy estates, this Court should appoint a Chapter 11 trustee," says Alan S. Maza, counsel to the SEC. The Commission recounts that the Debtors, without admitting or denying liability, consented to entry of a Final Consent Judgment in SEC v. SBMIC, et al., 06-cv-866-DKC, which ordered them, among other things, to retain an independent consultant, repay investors with principal and interest, and perform various undertakings designed to protect investor/creditors. Over 2,000 investors/creditors, mostly individuals who have invested less than $10,000, own approximately $33 million in Debtors' face- amount certificates. According to the Commission, the Final Consent Judgment offered a construct for Debtors to come into compliance with the law and resume the payment of interest and principal to these small investor/creditors or liquidate and return whatever assets remained. However, in implementing the Final Consent Judgment, Debtors repeatedly demonstrated contemptuous conduct, utterly failed to comply with applicable law, squandered corporate and investor/creditor assets, and diverted funds for the personal benefit of its Chairman and Chief Executive Officer Eric M. Westbury. The Debtors, Mr. Westbury and Geneva Capital Partners, LLC, which is a company Mr. Westbury owns and controls with his wife, without admitting or denying liability, also consented to entry of an Administrative Order of the Commission finding that Debtors willfully violated Section 28 of the Investment Company Act of 1940, and that Debtors, Mr. Westbury and Geneva willfully violated the anti-fraud provisions of the federal securities laws. The Commission's Administrative Order censured Mr. Westbury, ordered him to pay a civil penalty of $130,000 and ordered Debtors, Mr. Westbury and Geneva to cease and desist from committing or causing any violations and any future violations of the anti-fraud provisions of the federal securities laws. Mr. Westbury signed his consent and then refused to pay even the first installment of his $130,000 civil penalty and, as a result, the Commission became his largest creditor. It was by virtue of the Commission's status as a creditor that it learned that Mr. Westbury and his wife Victoria, within the past two years, filed four Chapter 13 bankruptcies and that, in the course of these bankruptcy proceedings, revealed acts of misappropriation, self- dealing and gross mismanagement by Mr. Westbury on behalf of Debtors. Accordingly, the Commission seeks the immediate appointment of a Chapter 11 Trustee to preserve any remaining assets and to insure the protection of the interests of the Debtors' estates. The SEC is represented by: Alan S. Maza Alistaire Bambach Division Bankruptcy Counsel U.S. Securities and Exchange Commission 3 World Financial Center New York, NY 10281 Telephone: 212-336-1100 E-mail: mazaa@sec.gov About SBM Certificate SBM Certificate Company filed a bare-bones Chapter 11 petition (Bankr. D. Md. Case No. 13-17282) in Greenbelt, Maryland, on April 26, 2013. Eric W. Westbury, Sr., signed the petition as director. Lawrence A. Katz, Esq., at Leach Travell Britt PC, in Tysons Corner, Virginia, serves as counsel to the Debtors. Silver Spring-based SBM disclosed $28.7 million in assets and $49.4 million in liabilities as of Dec. 31, 2012. SCOOTER STORE: Numotion Offers Service to Ex-Alliance Customers --------------------------------------------------------------- Numotion on June 18 disclosed that it has become apparent that a great many past clients of Alliance Seating and Mobility, a subsidiary company of The Scooter Store, are now unable to access timely repair. This appears to be due to the ongoing bankruptcy proceedings and a dramatic reduction of field service employees. Unfortunately a great many of these clients are complex mobility users with significant disabilities, who depend on their wheelchairs for daily activities. These clients are full time wheelchair users and are at grave risk should their wheelchairs fail and they cannot find a provider willing and able to offer service and repairs. Numotion has made the decision to provide access to repairs for any client owned wheelchair to all former customers of Alliance Seating and Mobility. Paul Bergantino, Numotion CEO stated, "While we recognize the payment risk we feel that the customer's wellbeing is paramount and we will work hard to fill the void left by Alliance. Our concern is with these clients and we will do what we can to see that they remain safe and independent." For those in need of service please contact your local Numotion office. Please visit Numotion.com or call our National Customer Care Center at 800-500-9150. About Numotion Formed by the merger of ATG Rehab and United Seating & Mobility, Numotion -- http://www.Numotion.com-- aims to be the most responsive and innovative provider of custom wheelchairs to do business with. With more than 2,000 employees, over 120 locations nationwide and accredited nationally by ACHC, Numotion remains committed to a strong local focus. About The Scooter Store The Scooter Store is a supplier of power mobility solutions, including power wheelchairs, scooters, lifts, ramps, and accessories. The Scooter Store's products and services provide today's seniors and disabled persons potential alternatives to living in nursing homes or other care facilities. Headquartered in New Braunfels, Texas, the Scooter Store has a nationwide network of distribution centers that service products owned or leased by the Company's customers. It has 57 distribution centers in 41 states. Scooter Store Holdings Inc., and 71 affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10904) in Wilmington. The closely held company listed assets of less than $10 million and debt of more than $50 million. Affiliates of private equity firm Sun Capital Partners, based in Boca Raton, Florida, purchased a majority voting interest in the debtors in 2011. Scooter Store is 66.8 percent owned by Sun Capital Partners Inc., owed $40 million on a third lien. In addition to Sun's debt and $25 million on a second lien owing to Crystal Financial LLC, there is a $25 million first-lien revolving credit owing to CIT Healthcare LLC as agent. Crystal is providing $10 million in financing for bankruptcy. SEA TRAIL: Chinese Investor Wins Auction With $8.5MM Offer ---------------------------------------------------------- Jason Gonzales, writing for StarNews Online, reports that The Sea Trail Golf Resort and Conference Center was sold Tuesday for $8.5 million to a Chinese investor, identified only as Mr. Pan, during a bankruptcy auction, according to a press release from Tryon Capital Ventures, a company representing Mr. Pan's company. The sale will be finalized in mid-July. According to the report, Mr. Pan is a successful investor from China and enlisted Tryon Ventures to help with the purchase, according to the release. He is described as an industrialist in China who has considerable real estate holdings in his country. "This is Mr. Pan's first investment in the U.S. and he is excited about the opportunity to re-vitalize Sea Trail as an outstanding resort and conference center," said Pete Coker, a managing director at Tryon Capital Ventures, in the release, the report says. "We look forward to assisting with the transition to new ownership and working with his team to bring renewed life to this award-winning Sunset Beach golf resort community." As reported by the Troubled Company Reporter, Sea Trail had a $6 million stalking horse offer from Cienda Management LLC. The resort was once listed at more than $34 million. The Bankruptcy Administrator for the Eastern District of North Carolina has a pending motion seeking dismissal of the case. The Bankruptcy Administrator said the Debtor has the inability to effectuate substantial consummation of a confirmed plan. The Court entered an order confirming the Debtor's First Amended Plan of Reorganization on Oct. 23, 2012, and entered an amended order confirming the Plan on Dec. 3, 2012. The Plan Effective Date is contingent upon a sale of the assets. A hearing on the Motion to Dismiss has been continued to July 11. About Sea Trail Corporation Sunset Beach, North Carolina-based Sea Trail Corporation owns and operates the Sea Trail Golf Resort and Conference Center. The Debtor's business operations are comprised of three operating divisions, including the golf division, the convention and resort division, and the real estate division. Sea Trail filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-07370) on Sept. 27, 2011, in Wilson, North Carolina. The Debtor reported $34,222,281 in assets and $22,174,201 in liabilities as of the Chapter 11 filing. Stubbs & Perdue P.A. is the Debtors' attorney. McIntyre, Paradis, Wood & Company CPA's PLLC is the Debtor's accountants. The Finley Group, Inc., is the Debtor's financial consultant. Sea Trail Corporation's official committee of unsecured creditors retained J.M. Cook and his firm, J.M. Cook, P.A., as counsel. SEVEN COUNTIES: Proofs of Claim Due Aug. 8 ------------------------------------------ The last day for persons and entities to file proofs of claim asserting prepetition claims against Seven Counties Services, Inc., is Aug. 8, 2013. About Seven Counties Seven Counties Services Inc., a not-for-profit behavioural services provider from Louisville, Kentucky, filed for Chapter 11 protection (Bankr. W.D. Ky. Case No. 13-31442) in the hometown on April 4, 2013. The petition was signed by Anthony M. Zipple as president/CEO. The Debtor scheduled assets of $45,603,716 and scheduled liabilities of $232,598,880. Seiller Waterman LLC serves as the Debtor's counsel. Judge Joan A. Lloyd presides over the case. The agency generates more than $100 million a year in revenue and employs a staff of 1,400 providing services at 21 locations and 120 schools and community centers. SEVEN COUNTIES: Appointment of Patient Care Ombudsman Waived ------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Kentucky, Louisville Division, granted Seven Counties Services, Inc.'s motion to waive the appointment of a patient care ombudsman in the Chapter 11 case. Bankruptcy Judge Joan A. Lloyd held that a patient care ombudsman is not necessary in the case. About Seven Counties Seven Counties Services Inc., a not-for-profit behavioural services provider from Louisville, Kentucky, filed for Chapter 11 protection (Bankr. W.D. Ky. Case No. 13-31442) in the hometown on April 4, 2013. The petition was signed by Anthony M. Zipple as president/CEO. The Debtor scheduled assets of $45,603,716 and scheduled liabilities of $232,598,880. Seiller Waterman LLC serves as the Debtor's counsel. Judge Joan A. Lloyd presides over the case. The agency generates more than $100 million a year in revenue and employs a staff of 1,400 providing services at 21 locations and 120 schools and community centers. SEVEN COUNTIES: Court DQs Lloyd & McDaniel as KERS' Counsel ----------------------------------------------------------- For reasons stated in open court, the U.S. Bankruptcy Court for the Western District of Kentucky, Louisville Division, granted Seven Counties Services, Inc.'s motion to disqualify Lloyd & McDaniel, PLC, as counsel for Kentucky Retirement Systems and Kentucky Employee Retirement System. About Seven Counties Seven Counties Services Inc., a not-for-profit behavioural services provider from Louisville, Kentucky, filed for Chapter 11 protection (Bankr. W.D. Ky. Case No. 13-31442) in the hometown on April 4, 2013. The petition was signed by Anthony M. Zipple as president/CEO. The Debtor scheduled assets of $45,603,716 and scheduled liabilities of $232,598,880. Seiller Waterman LLC serves as the Debtor's counsel. Judge Joan A. Lloyd presides over the case. The agency generates more than $100 million a year in revenue and employs a staff of 1,400 providing services at 21 locations and 120 schools and community centers. SPECIALTY PRODUCTS: Wants $1-Bil. Asbestos Appeal in 3rd Circ. -------------------------------------------------------------- Jamie Santo of BankruptcyLaw360 reported that Specialty Products Holding Corp. sought permission to go directly to the Third Circuit with its appeal of a Delaware bankruptcy court's decision pegging its asbestos-related liability at $1.1 billion, saying a quick resolution of the issue has implications for its case and others. According to the report, U.S. Bankruptcy Judge Judith K. Fitzgerald issued an opinion May 20 estimating Specialty Products' current and future liability for asbestos-related mesothelioma claims at $1.1 billion, a figure that eclipsed its various projections by hundreds of millions of dollars. About Specialty Products Cleveland, Ohio-based Specialty Products Holdings Corp., aka RPM, Inc., is a wholly owned subsidiary of RPM International Inc. The Company is the holding company parent of Bondex International, Inc., and the direct or indirect parent of certain additional domestic and foreign subsidiaries. The Company claims to be a leading manufacturer, distributor and seller of various specialty chemical product lines, including exterior insulating finishing systems, powder coatings, fluorescent colorants and pigments, cleaning and protection products, fuel additives, wood treatments and coatings and sealants, in both the industrial and consumer markets. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 10-11780) on May 31, 2010. Gregory M. Gordon, Esq., Dan B. Prieto, Esq., and Robert J. Jud, Esq., at Jones Day, serve as bankruptcy counsel. Daniel J. DeFranceschi, Esq., and Zachary I. Shapiro, Esq., at Richards Layton & Finger, serve as co- counsel. Logan and Company is the Company's claims and notice agent. The Company estimated its assets and debts at $100 million to $500 million. The Company's affiliate, Bondex International, Inc., filed a separate Chapter 11 petition on May 31, 2010 (Case No. 10-11779), estimating its assets and debts at $100 million to $500 million. SUGARLEAF TIMBER: Wants to Use Farm Credit's Cash Collateral ------------------------------------------------------------ Sugarleaf Timber, LLC, seeks permission from the U.S. Bankruptcy Court for the Middle District of Florida to use the proceeds of a Master Hunting Lease, which constitutes cash collateral subject to the liens of Farm Credit of North Florida, ACA, as agent/nominee for itself and its wholly owned subsidiary, Farm Credit of North Florida, FLCA. The Debtor owns approximately 7,060 acres of real property in Southeast Clay County, Florida, with frontage on US Highway 17, Warner Road, Leno Road and Sungarden Road. The Property is subject to one or more liens of Farm Credit. The Debtor holds $109,816.22 of Hunting Lease Proceeds representing two years of rental income the Debtor has received from NRPS during the pendency of this case. Robert D. Wilcox, Esq., at Brennan, Manna & Diamond, PL, the attorney for the Debtor, says that the Debtor anticipates receiving an additional annual payment of approximately $50,000 on Oct. 1, 2013. Both the lease proceeds that the Debtor holds and the anticipated future payment are subject to the liens of Farm Credit and constitute cash collateral. Mr. Wilcox states that in anticipation of future demand for industrial and residential land, the Debtor wants to further enhance the amount of industrial and residential development permitted on the Property. The Debtor, according to Mr. Wilcox, wants to use the Cash Collateral to pay for the services of England-Thims & Miller, Inc., to continue the process of transitioning the Property from a timber plantation to a mixed-use project in order to maximize the value of the Property for the benefit of the Debtor's creditors and its estate. Mr. Wilcox says that Farm Credit would be adequately protected with regard to its interest in the Cash Collateral because (i) the Property's current value substantially exceeds the amount of the Debtor's debt to Farm Credit, and (ii) the Development Services will materially enhance the value of the Property, which will increase the already substantial equity cushion between the Property's value ($30.33 million to $38.84 million) and the amount of the Debtor's debt to Farm Credit (approximately $24 million). About Sugarleaf Timber Sugarleaf Timber, LLC, in Jacksonville, Florida, is in the business of purchasing, developing, and reselling real property in Northeast Florida. The Company filed for Chapter 11 bankruptcy (Bankr. M.D. Fla. Case No. 11-03352) on May 8, 2011. Chief Bankruptcy Judge Paul M. Glenn presides over the case. Robert D. Wilcox, Esq., at Brennan, Manna & Diamond, P.L., in Jacksonville, Fla., serves as the Debtor's bankruptcy counsel. In its schedules, the Debtor disclosed assets of $31,016,486 and liabilities of $26,781,079. The petition was signed by Victoria D. Towers, manager of Diversified Investments of Jacksonville LLC, which serves as manager to the Debtor. The Debtor's plan that was filed in October 2011 provides for the delivery of a portion of the Debtor's properties which are subject to Farm Credit's liens, which delivery the Debtor asserts will provide the "indubitable equivalent" of Farm Credit's secured claim. Management of the reorganized Debtor will remain the same after the bankruptcy exit. Counsel for Farm Credit has opposed the Plan, citing that the Plan is a partial "dirt for debt" plan seeking to force Farm Credit to receive a portion of its real property in full satisfaction of approximately $27,400,000 in secured claims while the Debtor retains approximately 622 acres of real property collateral which Farm Credit is forced to release under the Plan. An Official Committee of Unsecured Creditors has not been appointed. Additionally, no trustee or examiner has been appointed. SUPERMEDIA INC: Verizon Finishes Off Creditor Suit Over Spinoff --------------------------------------------------------------- Jess Davis of BankruptcyLaw360 reported that Verizon Communications Inc. defeated a $9 billion fraudulent transfer suit that targeted its spinoff of the former Idearc Inc., when a Texas federal judge ruled that the bankrupt phone directory company's creditors couldn't prove that Verizon had intended for the spinoff to fail. According to the report, U.S. District Judge Joe A. Fish said Idearc creditors, represented by litigation trustee U.S. Bank NA, didn't show enough direct or circumstantial evidence that Verizon had fraudulent intent when it spun off its phone book unit. The case is U.S. Bank National Association v. Verizon Communications Inc et al., Case No. 3:10-cv-01842(N.D. Tex.). About SuperMedia Headquartered in D/FW Airport, Texas, SuperMedia Inc., formerly known as Idearc, Inc., is a yellow pages directory publisher in the United States. Its portfolio includes the Superpages directories, Superpages.com, digital local search resource on both desktop and mobile devices, the Superpages.com network, which is a digital syndication network, and its Superpages direct mailers. SuperMedia is the official publisher of Verizon, FairPoint and Frontier print directories in the markets in which these companies are the incumbent local telephone exchange carriers. Idearc was spun off from Verizon Communications, Inc., in 2006. At Dec. 31, 2012, SuperMedia had approximately 3,200 employees, of which approximately 950 or 30% were represented by unions. SuperMedia and three affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-10545) on March 18, 2013, to effectuate a merger of equals with Dex One Corp. SuperMedia disclosed total assets of $1.4 billion and total debt of $1.9 billion. Morgan Stanley & Co. LLC is acting as financial advisors to SuperMedia, and Cleary Gottlieb Steen & Hamilton LLP and Young Conaway Stargatt & Taylor, LLP are acting as its legal counsel. Fulbright & Jaworski L.L.P is special counsel. Chilmark Partners Is acting as financial advisor to SuperMedia's board of directors. Epiq Systems serves as claims agent. This is also SuperMedia's second stint in Chapter 11. Idearc and its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 09-31828) in March 2009 and emerged from bankruptcy in December 2009, reducing debt from more than $9 billion to $2.75 billion. T SORRENTO: Has OK to Hire Deverick to Appraise Real Property ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has granted T Sorrento, Inc., permission to employ Deverick & Associates, Inc., as appraiser. As reported by the Troubled Company Reporter on May 31, 2013, the Debtor owns several parcels of real property. The parcels are separately grouped together and referred to as "Casino", "Stanley", "McKinney Ranch", and the "Irving Property". Casino and Stanley were financed through RMR Investment, Inc. with the participation of RMR's advisor, West Orient Investment, Inc., who are the two active parties in the case. The Debtor requires the assistance of a real property appraiser for purposes of valuing the Debtor's property. About T Sorrento Clark, Nevada-based T Sorrento, Inc., is a wholly owned subsidiary of Transcontinental Realty Investors, Inc., a Nevada corporation. T Sorrento filed for a Chapter 11 petition (Bankr. D. Nev. Case No. 12-13907) in Las Vegas on April 2, 2012. At the behest of RMR Investments, Inc., the Nevada Bankruptcy Court transferred the venue of the case to the Northern District of Texas, Dallas Division, as the Debtor's principal office and principal place of business are located in Dallas and the mailing address for each of the Debtor's officers is also located in Dallas, Texas. The case was transferred to the Northern District of Texas by a June 27, 2012 court order. Dallas Bankruptcy Judge Barbara J. Houser oversees the case. T Sorrento disclosed assets of $17.4 million and debts of $5.4 million in its schedules. The Debtor's Schedule A states it owns six lots (about 30 acres) at "Mira Lago" in Farmers Branch, two lots (24 acres) at Valley Branch Circle in Farmers Branch, 5.7 acres in McKinney and less than an acre in Irving. The total value of the real property is stated as $17,442,754. The Debtor has no personal property. The Debtor disclosed it has secured debt held by two entities totaling $5,121,368. Property taxes owed total $90,000. Six unsecured creditors are owed a total of $235,203. Lender RMR Investments is represented by Mark E. Andrews, Esq., and Stephen K. Lecholop II, Esq., at Cox Smith Matthews Incorporated. T SORRENTO: May Hire Dohmeyer to Testify on Interest Rates ---------------------------------------------------------- T Sorrento, Inc., has obtained authorization from the U.S. Bankruptcy Court for the Northern District of Texas to employ Dohmeyer Valuation Corp. to testify as to valuation and appropriate interest rates for purposes of the Debtor's Chapter 11 Plan. As reported by the Troubled Company Reporter on May 31, 2013, Robert M. Dohmeyer of DVC will be primarily responsible for assisting the Debtor in the matter. About T Sorrento Clark, Nevada-based T Sorrento, Inc., is a wholly owned subsidiary of Transcontinental Realty Investors, Inc., a Nevada corporation. T Sorrento filed for a Chapter 11 petition (Bankr. D. Nev. Case No. 12-13907) in Las Vegas on April 2, 2012. At the behest of RMR Investments, Inc., the Nevada Bankruptcy Court transferred the venue of the case to the Northern District of Texas, Dallas Division, as the Debtor's principal office and principal place of business are located in Dallas and the mailing address for each of the Debtor's officers is also located in Dallas, Texas. The case was transferred to the Northern District of Texas by a June 27, 2012 court order. Dallas Bankruptcy Judge Barbara J. Houser oversees the case. T Sorrento disclosed assets of $17.4 million and debts of $5.4 million in its schedules. The Debtor's Schedule A states it owns six lots (about 30 acres) at "Mira Lago" in Farmers Branch, two lots (24 acres) at Valley Branch Circle in Farmers Branch, 5.7 acres in McKinney and less than an acre in Irving. The total value of the real property is stated as $17,442,754. The Debtor has no personal property. The Debtor disclosed it has secured debt held by two entities totaling $5,121,368. Property taxes owed total $90,000. Six unsecured creditors are owed a total of $235,203. Lender RMR Investments is represented by Mark E. Andrews, Esq., and Stephen K. Lecholop II, Esq., at Cox Smith Matthews Incorporated. T SORRENTO: Files Second Amended Plan, Modifies Claims Treatment ---------------------------------------------------------------- T Sorrento, Inc., and Transcontinental Realty Investors, Inc., filed a Second Amended Chapter 11 Plan on June 10, 2013, to, among other things, modify the treatment of claims classified under the Plan. The amount of the allowed Class 2 (Allowed Secured Claim of RMR Casino) will be determined by the Bankruptcy Court at the confirmation hearing. Within 30 days of the effective date of the Plan, the Debtor will execute and deliver a deed of trust to RMR Casino, the McKinney Ranch, and 2400 Walton Walker as security for the Debtor's obligations and RMR will execute and deliver a release of its lien on Stanley that serves as security for its secured claim. If the Court confirms the Plan with the proposed injunctions, the Allowed Class 2 Claim and the Allowed Class 3 Claim (Secured Claim of RMR - Stanley) will each accrue interest after confirmation at the annual rate of 10.00%, with interest paid monthly on the first day of each month at 6.00% during the first year, 6.50% during the second year, 7.00% during the third year, and 8.00% during the fourth and fifth years. If the Court confirms the Plan without the proposed injunctions, the Allowed Class 2 Claim and the Allowed Class 3 Claim will each accrue interest after confirmation at the annual rate of 4.25% using simple interest, with interest paid monthly. The Plan also provides that it does not operate to enlarge, reduce or modify the liability of any other individual or entity other than the Debtor, including specifically Prime Income Asset Management, Inc., Transcontinental Realty, and Basic Capital Management, Inc. A full-text copy of the Second Amended Plan, dated June 10, 2013, is available for free at: http://bankrupt.com/misc/TSORRENTOplan0610.pdf Hudson M. Jobe, Esq., at Quilling, Selander, Lownds, Winslett & Moser, P.C., in Dallas, Texas, represents the Debtor. C. Gregory Shamoun, Esq., and Dennis M. Holmgren, Esq., at Shamoun & Norman LLP, in Dallas, Texas, represent Transcontinental Realty. TOMSTEN INC: Has Court's Nod to Hire Baker Tilly as Accountant -------------------------------------------------------------- Tomsten, Inc., doing business as Archiver's, sought and obtained authorization from the Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota to employ the firm of Baker Tilly Virchow Krause, LLP, as accountant during the case, specifically relating to tax advice, the preparation of tax returns and a limited-scope audit on the Debtor's 401(k) plan. Baker Tilly will: (i) prepare and sign as preparer the Federal Corporation return for the client for the tax year beginning Jan. 1, 2012, through Dec. 29, 2012; (ii) prepare and sign the Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, City of Louisville KY, Michigan, Minnesota, Missouri, Kansas City MO, Nebraska, North Carolina, City of Columbus OH, City of Fairlawn OH, City of North Olmsted, OH, Tennessee, Texas, Utah, and Wisconsin state returns; (iii) perform a limited-scope audit of the financial statements of the plan at Dec. 31, 2012, and for the year then ended. Baker Tilly will be paid hourly rates of $125 to $375 for its services. John Lindell, a partner at Baker Tilly, attested to the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Tomsten Hennepin, Minnesota-based Tomsten, Inc., doing business as Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million as of the Chapter 11 filing. The Debtor has tapped Jann Olsten, Esq., and the law firm of Ravich Meyer Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F. Kishel presides over the case. TOMSTEN INC: U.S. Trustee Forms Five-Member Committee ----------------------------------------------------- Daniel M. McDermott, U.S. Trustee for Region 12, appointed five members to the official committee of unsecured creditors in the Chapter 11 case of Tomsten, Inc., doing business as Archiver's. The Creditors Committee members are: 1. American Crafts 1140 N 1430 W Orem, UT 84057 Attn: Dave Mitchell Tel: (801) 226-0747 ext. 221 2. Doodlebug Design 3630 W. California Avenue Salt Lake City, UT 84104 Attn: John Bishop Tel: (801) 952-0555 3. National Spinning Co., Inc/Hampton Art 1212 Avenue of the Americas Suite 1901 New York, NY 10036 Attn: Sandy Berger Tel: (212) 382-6478 4. GGP 110 North Wacker Drive Chicago, IL 60606 Attn: Julie Minnick Bowden Tel: (312) 960-2707 5. 3L Corporation 111 Marquardt Drive Wheeling, IL 60090 Attn: Tom Vasko Tel: (847) 808-6071 Dave Mitchell of American Crafts is hereby designated as Acting Chairperson of the Committee pending selection by the Committee members of a permanent Chairperson. About Tomsten Hennepin, Minnesota-based Tomsten, Inc., doing business as Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million as of the Chapter 11 filing. The Debtor has tapped Jann Olsten, Esq., and the law firm of Ravich Meyer Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F. Kishel presides over the case. TOMSTEN INC: Committee May Hire CBIZ Accounting as Fin'l Advisor ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of Tomsten, Inc., doing business as Archiver's, sought and obtained permission from the Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota to retain CBIZ Accounting, Tax and Advisory of New York, LLC, as financial advisor, retroactive to May 13, 2013. CBIZ Accounting will, among other things: a. assist the Committee in its evaluation of the Debtor's postpetition cash flow and other projections and budgets prepared by the Debtor or its financial advisors; b. monitor the Debtor's activities regarding cash expenditures and general business operations subsequent to the filing of the petition under Chapter 11, as well as assist the Committee in its review of monthly operating reports; c. assist the Committee with any investigation into the pre- petition acts, conduct, property, liabilities and financial condition of the Debtor, its management, or creditors, including the operation of the Debtor's businesses, as instructed by the Committee; d. analyze transactions with creditors, insiders, related and affiliated companies, subsequent and prior to the date of the filing of the petition under Chapter 11, as instructed by the Committee; and e. if applicable, provide financial analysis related to any prospective DIP financing, including advising the Committee concerning such matters. CBIZ Accounting will be paid at these hourly rates: Directors & Managing Directors $410-$595 Managers & Senior Managers $310-$410 Staff $170-$310 Charles M. Berk, Managing Director of CBIZ Accounting, attested to the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Berk can be reached at: Charles Berk Managing Director 1065 Avenue of the Americas New York, NY 10018 Tel: (212) 790-5883 Fax: (212) 790-5909 E-mail: cberk@cbiz.com About Tomsten Hennepin, Minnesota-based Tomsten, Inc., doing business as Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million as of the Chapter 11 filing. The Debtor has tapped Jann Olsten, Esq., and the law firm of Ravich Meyer Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F. Kishel presides over the case. TOMSTEN INC: Committee Taps Faegre Baker Daniels as Counsel ----------------------------------------------------------- The Official Committee of Unsecured Creditors of Tomsten, Inc., doing business as Archiver's, asks for permission from the Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota to retain Faegre Baker Daniels LLP as counsel, retroactive to May 13, 2013. Faegre Baker will, among other things, assist the Committee in its investigation of the acts, conduct, assets, liabilities and financial condition of the Debtors, the operation of the Debtor's business and any other matter relevant to this case, at these hourly rates: a. Stephen Mertz, Partner $605 b. Jay Jaffe, Partner $550 c. Wendy Ponader, Counsel $435 d. Colin Dougherty, Associate $315 e. Kayla Britton, Associate $260 f. Sarah Herendeen, Paralegal $230 Stephen M. Mertz, Esq., a partner at Faegre Baker, attested to the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Faegre Baker can be reached at: Stephen M. Mertz Colin F. Dougherty FAEGRE BAKER DANIELS LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402-3901 Tel: (612) 766-7000 Fax: (612) 766-1600 E-mail: stephen.mertz@faegrebd.com colin.dougherty@faegrebd.com - and - Jay Jaffe Wendy W. Ponader Kayla D. Britton FAEGRE BAKER DANIELS LLP 600 E. 96th Street, Suite 600 Indianapolis, IN 46240 Tel: (317) 569-4687 Fax: (317) 237-8587 E-mail: jay.jaffe@faegrebd.com wendy.ponader@faegrebd.com kayla.britton@faegrebd.com About Tomsten Hennepin, Minnesota-based Tomsten, Inc., doing business as Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million as of the Chapter 11 filing. The Debtor has tapped Jann Olsten, Esq., and the law firm of Ravich Meyer Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F. Kishel presides over the case. TOMSTEN INC: Has OK to Hire Leonard Street as Corporate Counsel -------------------------------------------------------------- Tomsten, Inc., doing business as Archiver's, sought and obtained permission from the Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota to employ Steven M. Rubin and the law firm of Leonard Street and Deinard to represent the Debtor in connection with Debtor's corporate matters. Leonard Street has been representing the Debtor for over 15 years. As a result, they have a detailed knowledge of the corporate affairs of the Debtor. The Debtor assured the Court that the engagement of Leonard Street would not duplicate the services to be rendered by Ravich Meyer Kirkman McGrath Nauman & Tansey and would result in substantial efficiencies and attorney fee savings. The range of billing rates for the attorneys who may work on the matter is $380 to $495 and for legal assistants the rate is $235. Steven M. Rubin, Esq., a shareholder in Leonard Street, attested to the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Rubin can be reached at: Leonard Street and Deinard 150 South Fifth Street, Suite 2300 Minneapolis, MN 55402 Tel: (612) 335-1786 Fax: (612) 335-1657 E-mail: steve.rubin@leonard.com About Tomsten Hennepin, Minnesota-based Tomsten, Inc., doing business as Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million as of the Chapter 11 filing. The Debtor has tapped Jann Olsten, Esq., and the law firm of Ravich Meyer Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F. Kishel presides over the case. TOMSTEN INC: May Hire Lighthouse Management as Fin'l Consultant -------------------------------------------------------------- Tomsten, Inc., doing business as Archiver's, sought and obtained authorization from the Hon. Gregory F. Kishel of the U.S. Bankruptcy Court for the District of Minnesota to employ Lighthouse Management Group, Inc., as financial consultant. Lighthouse Management will, among other things, advise the management in the development of a strategic plan of reorganization, and assist the management in negotiations with all creditor groups. Hourly rates for Lighthouse Management employees range from $350 for James Bartholomew and lesser rates for associates as needed. James Bartholomew, the President of Lighthouse Management, attested to the Court that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Bartholomew can be reached at: Lighthouse Management Group, Inc. 3900 Northwoods Drive, Suite 215 Arden Hills, MN 55112 Direct: (651) 323-2257 Business: (651) 439-5119 Cell: (612) 860-9523 Fax: (651) 204-0036 E-mail: jbartholomew@lighthousemanagement.com About Tomsten Hennepin, Minnesota-based Tomsten, Inc., doing business as Archiver's, filed a bare-bones Chapter 11 petition (Bankr. D. Minn. Case No. 13-42153) in Minneapolis on April 29, 2013. The Debtor estimated assets of at least $10 million and liabilities of at least $1 million as of the Chapter 11 filing. The Debtor has tapped Jann Olsten, Esq., and the law firm of Ravich Meyer Kirkman McGrath Nauman & Tansey as counsel. Judge Gregory F. Kishel presides over the case. TOUSA INC: Bankruptcy Watchdog Balks at Liquidation Plan ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Tousa Inc. faces little opposition at the June 20 hearing for approval of disclosure materials accompanying the former homebuilder's Chapter 11 plan more than five years in the making. Bloomberg News relates that the plan, filed in mid-May, has recoveries ranging from 58 percent for senior noteholders to 5 percent for creditors with general unsecured claims. According to Bloomberg News, apart from a pair of homeowners complaining about problems with homes they purchased, there was a dearth of objections to the disclosure statement, except for the U.S. Trustee, who laid out more than a dozen alleged shortcomings. Most could be cured by adding language to the document. The Bloomberg report notes that the Justice Department's bankruptcy watchdog wants the disclosure materials to better explain why senior noteholders recover 10 times more than general unsecured creditors. The U.S. Trustee also wants Tousa to trim the third-party releases and indemnifications for professionals. Eric Hornbeck of BankruptcyLaw360 reported that the U.S. Trustee's Office complains that the Plan documents are too vague about a number of issues, such as the payment of professional fees, including for the trustee himself. Once the disclosure statement is approved, creditors can begin voting on the plan in advance of a confirmation hearing in August. The plan was the result of a decision in May 2012 by the U.S. Court of Appeals in Atlanta finding banks received fraudulent transfers exceeding $400 million. According to Bankruptcy Law360, Guy G. Gebhardt, the acting U.S. trustee for the region that includes Florida, said that the proposed liquidation plan's disclosure statement glosses over too many details that would be lost on investors who, unlike Tousa and its creditors committee, haven't been mired in litigation and mediation. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case No. 08-10928). Richard M. Cieri, Esq., M. Natasha Labovitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in New York, N.Y.; and Paul S. Singerman, Esq., at Berger Singerman, in Miami, Fla., represent the Debtors in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. The official committee of unsecured creditors has filed a proposed chapter 11 liquidating plan for Tousa. However, the committee said it would no longer pursue approval of its liquidation plan because of the pending appeal of its fraudulent transfer case in the U.S. Court of Appeals for the Eleventh Circuit. A district court in February 2011 held that the bankruptcy judge was wrong in ruling that lenders who were paid off received fraudulent transfers when Tousa gave liens on subsidiaries' properties to bail out and refinance a joint venture. Daniel H. Golden, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, N.Y., represent the creditors committee. Tousa and the official committee of unsecured creditors has filed a proposed chapter 11 liquidating plan following a settlement between the Debtor and creditors and other settlements crafted by mediator Peter L. Borowitz. The settlement was made after a May 2012 U.S. Court of Appeals in Atlanta decision that found that banks received fraudulent transfers exceeding $400 million. Tousa intends to have a confirmation hearing for the Plan in August. TPO HESS: Testing Bang Offer at July 17 Auction ----------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that commercial and educational printer D.B. Hess Corp. and affiliate The Press of Ohio Inc. will hold an auction July 17 to determine if the $19.3 million offer from Bang Printing of Ohio Inc. represents the best bid for the business. According to the report, the bankruptcy court in Delaware approved auction and sale procedures on June 17. Competing bids are due July 10. The hearing for sale approval is set for July 24. The bankruptcy court also gave final approval for a $20 million loan provided by General Electric Capital Corp. as the lenders' agent. At the outset of bankruptcy, the Kent, Ohio-based company owed GECC $13.4 million on a revolving credit. About TPO Hess Commercial and educational printer TPO Hess Holdings Inc., D.B. Hess Co., The Press of Ohio and other affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 13-11327) on May 22, 2013, to seek approval of a liquidation plan that contemplates the sale of the business to Bang Printing of Ohio Inc., absent higher and better offers. D.B. Hess was founded 1797 in Woodstock, Illinois. D.B. Hess and its affiliates are now leading provider of print, related services, and technology. Hess ranks among the top 50 U.S. printers and has become one of the industry's most respected low- to-medium volume producers of commercial and educational materials. Hess Holdings, the ultimate parent, was formed after Wellspring Capital Management LLC and certain co-investors acquired D.B. Hess and The Press of Ohio in 2006. The proposed purchaser, Bang Printing Of Ohio, Inc., is represented by Leonard, Street And Deinard. The Debtors have tapped Young Conaway Stargatt & Taylor, LLP, and Paul Weiss Rifkind Wharton Garrison, LLP, as counsel, Epiq Bankruptcy Solutions as claims and noticing agent, and Houlihan Lokey as financial advisor. Holders of $74 million in second-lien notes had already unanimously accepted the plan where they would receive $1.5 million, or a 2 percent recovery. First-lien debt of $11.9 million is to be paid in full. Unsecured creditors with $20 million in claims didn't vote on the plan because they are to receive nothing. The bankruptcy court scheduled a July 24 confirmation hearing for approval of the plan. TRANSDIGM INC: Dividend Payout Triggers Moody's Downgrade Review ---------------------------------------------------------------- Moody's Investors Service has placed all of the ratings of TransDigm Inc., including its B1 corporate family rating and B1-PD probability of default rating, on review for possible downgrade following TDG's announcement that it is considering paying a $1- $1.8 billion special dividend. TDG is also seeking an amendment to its senior secured credit facilities to allow for the special dividend, increase its term loan facility by $700 million, and change certain covenant ratios in the facilities. In addition to the incremental term loans, TDG may seek to raise $700 million of new subordinated debt to fund the special dividend. The company's liquidity profile remains very good as indicated by the SGL-1 Speculative Grade Liquidity Rating. The following ratings have been placed on review: B1 Corporate family rating; B1-PD Probability of default rating; Ba2 (LGD2, 24%) on the $310 million first lien revolving credit facility due 2018; Ba2 (LGD2, 24%)on the $500 million first lien term loan B due 2017; Ba2 (LGD2, 24%) on the $1.7 billion first lien term loan C due 2020; B3 (LGD5, 80%) on the $1.6 billion senior subordinated notes due 2018; and B3 (LGD5, 80%) on the $550 million senior subordinated notes due 2018. The following rating was affirmed: SGL-1 speculative grade liquidity rating Ratings Rationale: Moody's review will likely be concluded over the next week as details around the contemplated special dividend and related financing are clarified. The review will result in a downgrade of the CFR to B2 from B1 if the company were to execute a special dividend in the range currently being contemplated by the company ($1.0-$1.8 billion). A decision not to proceed with the proposed transaction or cancellation of the special dividend currently being considered could result in a ratings confirmation. A downgrade of TDG's ratings to B2 would reflect Moody's view that TDG's willingness to leverage its balance sheet to accommodate a special dividend of this size reflects financial policies and credit metrics that are no longer consistent with the B1 rating category. The special dividend being considered would elevate leverage to between 6.4x and 6.9x, on a Moody's adjusted basis. TDG has never taken leverage to over 6.5x before and has never raised it above 6.0x to solely to fund a dividend suggesting a shift in financial policy to an even more aggressive stance. The dividend being contemplated, coupled with the November 2012 dividend, would represent approximately 4.0x-6.0x its trailing twelve month free cash flows before dividends. Instrument ratings on the new and existing senior secured and subordinated debt instruments will be dependent on both the CFR and the ultimate mix of debt between classes. A one-notch downgrade of the CFR will likely result in similar downgrades to the ratings of both senior secured and subordinated debt. The principal methodology used in this rating was the Global Aerospace and Defense Methodology published in June 2010. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. TransDigm Inc., headquartered in Cleveland, Ohio, is a manufacturer of engineered aerospace components for commercial airlines, aircraft maintenance facilities, original equipment manufacturers and various agencies of the US Government. TransDigm Inc. is the wholly-owned subsidiary of TransDigm Group Incorporated. Revenues for the last 12 month period ending March 31, 2012 were approximately $2 billion. TRIBUNE CO: Could Owe $500MM in Taxes on Cubs, Newsday Deals ------------------------------------------------------------ Lance Duroni of BankruptcyLaw360 reported that six months after escaping bankruptcy, media giant Tribune Co. revealed that it could owe upward of $500 million in taxes stemming from its long- closed sales of the Chicago Cubs and the Newsday newspaper. According to the report, the Internal Revenue Service is proposing a $190 million tax assessment and a $38 million "accuracy-related penalty" against Tribune, along with $17 million in interest, for the May 2008 deal in which Cablevision Systems Corp. scooped up most of Newsday Media Group for $650 million. About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors listed $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP served as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP served as the Committee's financial advisor. Landis Rath Moelis & Company served as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represented the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending four years of reorganization. The reorganization allowed a group of banks and hedge funds, including Oaktree Capital Management and JPMorgan Chase & Co., to take over the media company. UNITED PROTECTION: Lack of Funding Prompts Bankruptcy Filing ------------------------------------------------------------ United Protection Security Group Inc. and United Protection Services Inc. became officially bankrupt on June 10, 2013, by operation of the Canada Bankruptcy and Insolvency Act. The Trustee in Bankruptcy is Meyers Norris Penny LLP. The bankruptcy followed after the Companies' U.S. based lender issued a default notice and immediately stopped all funding on May 29, 2013. This action made it impossible for the Companies to carry on business in the ordinary course or arrange for an orderly sale or disposition of the business. The Companies filed for protection under the Bankruptcy and Insolvency Act on May 31, 2013. During the ensuing days, a major competitor stepped in and took over most of the Companies' large accounts, ensuring service continuity and, in most cases, continued employment of the Companies' security guards. However, many security guards have not been paid by the Companies. During this period the Companies were unable to successfully negotiate any interim financing or reorganization proposal and was not able to complete its proposal under the insolvency legislation, leading to it officially becoming bankrupt. One of the first tasks of MNP is to work with all unpaid employees and file applications for financial assistance under the Wage Earner Protection Program, known as the "WEPP". The direct cause of the Companies failure was the lack of funding by its lender. It appears that the lender imposed a series of questionable and possibly unjustified charges on the Companies' credit facility during the first part of this year, which had the effect of rapidly reducing the Companies' available credit margining, which in turn led to first one, and then a second default on the Companies semi-monthly filing and remittances to the Canada Revenue Agency for payroll deductions. Those defaults led to the lender issuing its default notice and freezing the Companies' funds and incoming revenues. Former management of the Companies will consider what next steps, if any, may be taken regarding this conduct. UNITEK GLOBAL: Standstill Period Extended Until June 30 ------------------------------------------------------- UniTek Global Services, Inc., has entered into further amendments to its previously-disclosed forbearance agreements with the Company's lenders under its Term and Revolving Credit Agreements. The amendments further extend, through June 30, 2013, the termination of the standstill periods contained in the original April 30, 2013, Forbearance Agreements. The amendments are subject to extension in certain circumstances. In connection with the extensions, the Company paid in full the interest payment that was due on May 29, 2013, under the Term Credit Agreement. The Company also announced that during this forbearance period, it will continue its exploration of refinancing alternatives for its indebtedness, assisted by Miller Buckfire & Co., a leading New York-based investment banking and capital markets firm. "We are grateful to our lenders for their ongoing support of the Company and willingness to cooperate with us as we continue to work closely with Miller Buckfire to evaluate potential refinancing alternatives," said Rocky Romanella, chief executive officer of UniTek Global Services. "I have great confidence in the ability of our team and our outside advisors to help us complete this process so that we can focus on the execution of our growth strategy." Update on 2012 Financial Results UniTek also is continuing its work to complete the Company's financial statements for 2012 and the restated financial information for prior periods. In addition to the financial statements that the Company previously announced it would be restating, the Company will also be restating its financial information for the second fiscal quarter ended July 2, 2011. As with its other announced restatements, this restatement is related to the Company's previously reported revenue recognition issues. The Company has also revised its previously announced preliminary estimates for its 2012 revenue, adjusted EBITDA(1) and net loss to approximately $437.0 million - $441.0 million, $38.0 million - $41.0 million and $(55.6) million - $(49.0) million respectively. The changes from previously issued estimates in revenue and adjusted EBITDA principally result from the efforts of the Company's financial and accounting staff, following the initial April 12, 2013, announcement, to prepare the restated financial statements including its assessment of Pinnacle Wireless division contracts. The Company expects to recognize a portion of the revenue and adjusted EBITDA related to these contracts in 2013 and subsequent periods. The preliminary estimate of net loss for 2012 excludes potential charges that may result from the Company's review of the carrying value of the goodwill, identified intangible assets and contingent consideration recorded in connection with the 2011 acquisition of the assets of Pinnacle Wireless, Inc., and Current Flow Technologies Corporation. The Company plans to issue its 2012 financial statements and its restated financial information for previous periods, including the second quarter of 2011, as promptly as practicable. Mr. Romanella added, "We are committed to completing the financial statement preparation process as expeditiously as reasonably possible. While we recognize the importance of providing the full year 2012 and first quarter 2013 financial information as soon as practicable, we are taking a disciplined approach to the preparation of our financial statements to ensure that, once complete, we can put this matter completely behind us. The downward revision in our preliminary 2012 results is largely related to timing of revenue recognized under certain Pinnacle Wireless division contracts. While the revenue and adjusted EBITDA related to these contracts could not be recognized in 2012, some of it has been recognized in 2013, and we anticipate that an additional portion will be recognized in future periods, reinforcing our belief that UniTek's underlying business remains strong. While the last several months have been challenging for our Company, the level of service we provide has remained constant and we are as committed as ever to being a value-added service partner for our customers. I am confident that we can emerge from the issues of the past few months as a much stronger company." Other Matters The Company continues to consider its rights and remedies with respect to payments previously made under the March 30, 2011 Asset Purchase Agreement with Pinnacle Wireless, Inc., and Current Flow Technologies Corporation. About UniTek Global UniTek Global Services, Inc., based in Blue Bell, Pennsylvania, provides fulfillment and infrastructure services to media and telecommunication companies in the United States and Canada. As reported by the TCR on June 11, 2013, Standard & Poor's Ratings Services lowered its corporate credit rating on Blue Bell, Pa.- based UniTek Global Services Inc. to 'D' from 'CCC'. "The downgrade follows UniTek's announcement that it did not make a scheduled interest payment on May 29, 2013, on its senior secured term loan due 2018, which we consider to be a default under our timeliness of payments criteria," said Standard & Poor's credit analyst Michael Weinstein. In the June 11, 2013, edition of the TCR, Moody's Investors Service lowered UniTek Global Services, Inc.'s probability of default and corporate family ratings to Ca-PD/LD and Ca, respectively. The Ca corporate family rating reflects UniTek's missed interest payment on the term loan which is considered a default under Moody's definition, the heightened possibility of another default event, continued delays in the filing of restated financials including the last two audits, management turnover, the potential loss of the company's largest customer and other business and legal risks stemming from issues at the company's Pinnacle subsidiary. VELATEL GLOBAL: Incurs $6.8 Million Net Loss in First Quarter ------------------------------------------------------------- Velatel Global Communications, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $6.83 million on $1.42 million of revenue for the three months ended March 31, 2013, as compared with a net loss of $1.87 million on $0 of revenue for the same period a year ago. As of March 31, 2013, the Company had $15.77 million in total assets, $62.25 million in total liabilities and a $46.48 million total deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/fRrug9 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. See http://www.velatel.com/ Velatel Global incurred a net loss of $45.60 million on $1.87 million of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $21.79 million on $0 of revenue for the year ended Dec. 31, 2011. Kabani & Company, Inc., 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 viability is dependent upon its ability to obtain future financing and the success of its future operations. The Company has incurred a net loss of $45,601,292 for the year ended Dec. 31, 2012, cumulative losses of $298,347,524 since inception, a negative working capital of $34,972,850 and a stockholders' deficiency of $36,566,868. These factors raise substantial doubt as to the Company's ability to continue as a going concern. VERTIS HOLDINGS: Plan Filing Deadline Extended Until Aug. 6 ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware extended until Aug. 6, 2013, the period within which Vertis Holdings, Inc., et al., have exclusive right to file a plan of reorganization and until Oct. 7, 2013, the period within which the Debtors have exclusive right to solicit acceptances of that plan. Vertis Holdings Inc. -- http://www.thefuturevertis.com/-- provides advertising services in a variety of print media, including newspaper inserts such as magazines and supplements. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanley Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. On Jan. 16, 2013, Quad/Graphics completed the acquisition of Vertis Holdings for a net purchase price of $170 million. This assumes the purchase price of $267 million less the payment of $97 million for current assets that are in excess of normalized working capital requirements. VERTIS HOLDINGS: Has Authority to Employ GA Keen as Broker ---------------------------------------------------------- Vertis Holdings, Inc., et al., obtained authority from the U.S. Bankruptcy Court for the District of Delaware to employ GA Keen Realty Advisors as real estate broker and consultant to provide real marketing and related consulting services for a fee of 4-1/2% of gross proceeds and 4% of the proceeds related to the Stevensville, Ontario location only. Vertis and its affiliates (Bankr. D. Del. Lead Case No. 12-12821), returned to Chapter 11 bankruptcy on Oct. 10, 2012, this time to sell the business to Quad/Graphics, Inc., for $258.5 million, subject to higher and better offers in an auction. As of Aug. 31, 2012, the Debtors' unaudited consolidated financial statements reflected assets of approximately $837.8 million and liabilities of approximately $814.0 million. Bankruptcy Judge Christopher Sontchi presides over the 2012 case. Vertis is advised by Perella Weinberg Partners, Alvarez & Marsal, and Cadwalader, Wickersham & Taft LLP. Quad/Graphics is advised by Blackstone Advisory Partners, Arnold & Porter LLP and Foley & Lardner LLP, special counsel for antitrust advice. Kurtzman Carson Consultants LLC is the Debtors' claims agent. Quad/Graphics is a global provider of print and related multichannel solutions for consumer magazines, special interest publications, catalogs, retail inserts/circulars, direct mail, books, directories, and commercial and specialty products, including in-store signage. Headquartered in Sussex, Wis. (just west of Milwaukee), the Company has approximately 22,000 full-time equivalent employees working from more than 50 print-production facilities as well as other support locations throughout North America, Latin America and Europe. Vertis first filed for bankruptcy (Bankr. D. Del. Case No. 08-11460) on July 15, 2008, to complete a merger with American Color Graphics. ACG also commenced separate bankruptcy proceedings. In August 2008, Vertis emerged from bankruptcy, completing the merger. Vertis against filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 10-16170) on Nov. 17, 2010. The Debtor estimated its assets and debts of more than $1 billion. Affiliates also filed separate Chapter 11 petitions -- American Color Graphics, Inc. (Bankr. S.D.N.Y. Case No. 10-16169), Vertis Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16170), Vertis, Inc. (Bankr. S.D.N.Y. Case No. 10-16171), ACG Holdings, Inc. (Bankr. S.D.N.Y. Case No. 10-16172), Webcraft, LLC (Bankr. S.D.N.Y. Case No. 10-16173), and Webcraft Chemicals, LLC (Bankr. S.D.N.Y. Case No. 10-16174). The bankruptcy court approved the prepackaged Chapter 11 plan on Dec. 16, 2010, and Vertis consummated the plan on Dec. 21. The plan reduced Vertis' debt by more than $700 million or 60%. GE Capital Corporation, which serves as DIP Agent and Prepetition Agent, is represented in the 2012 case by lawyers at Winston & Strawn LLP. Morgan Stanley Senior Funding Inc., the agent under the prepetition term loan, and as term loan collateral agent, is represented by lawyers at White & Case LLP, and Milbank Tweed Hadley & McCloy LLP. On Jan. 16, 2013, Quad/Graphics completed the acquisition of Vertis Holdings for a net purchase price of $170 million. This assumes the purchase price of $267 million less the payment of $97 million for current assets that are in excess of normalized working capital requirements. VINTAGE CONDOMINIUM: Bank Wants Chapter 11 Trustee Appointed ------------------------------------------------------------ Parkway Bank & Trust Company, a secured creditor of Vintage Condominium Development, LLC, filed a supplement to its pending motion to excuse turnover of assets by Jodi Sheahan, the receiver; and is asking the Bankruptcy Court to appoint a Chapter 11 trustee for the Debtor. According to Parkway, the Court has invited the bank to file a motion to appoint Chapter 11 trustee and further supplement the excusal motion with any further grounds for either the appointment of a trustee or the excusal of turnover by the receiver from the turnover requirements. The Court also set an evidentiary hearing on the excusal motion and the trustee motion for July 1, 2013, at 1:00 p.m. Parkway notes that, among other things: 1. the Debtor has not yet provided Parkway with basic financial documents, including bank statements, relating to the Debtor's operation of its business in 2013, despite agreeing to do so at the time of the preliminary hearing; 2. although the receiver did return control of the physical structure owned by the Debtor, the receiver did not give up the right to receive future rents or maintain possession of previously collected rents vested in her per the order appointing receiver; and 3. it appears as though the Debtor's principal, John Lupypciw, converted a substantial amount of Parkway's cash collateral resulting from rents received by the Debtor in February, March and April 2013. Parkway, which holds a claim in excess of $12 million; and Orange RE, a creditor holding an unsecured claim of approximately $19 million, made clear at the preliminary hearing on the excusal motion that they believe the interests of creditors will be better served by excusing the receiver from compliance with the requirements of 11 U.S.C. Section 543(b). About Vintage Condominiums Vintage Condominiums 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, 2013, three weeks after the state court appointed a receiver at the behest of the secured lender. The Vintage Condominiums complex has 107 units, approximately two of which have been purchased by third-party buyers and approximately 105 of which are currently owned by Vintage. The lender Parkway Bank & Trust Co., owed $12.3 million, had a receiver appointed after giving notice of default on April 12, 2013. The Debtor disclosed $12,511,600 in assets and $23,956,587 in liabilities as of the Chapter 11 filing. Ronald J. Ellett, Esq., at Ellett Law Offices, P.C., serves as counsel to the Debtor. Christopher R. Kaup, J. Daryl Dorsey, at Tiffany & Bosco P.A. represent the creditor Parkway Bank & Trust Company. VINTAGE CONDOMINIUM: Ronald Ellett Okayed as Bankruptcy Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona authorized Vintage Condominiums Development LLC to employ Ronald J. Ellett and Ellett Law Offices, P.C., as counsel. As reported by the Troubled Company Reporter on May 28, 2013, the Debtor will employ the firm on an hourly basis, which fee will be ultimately determined by the Bankruptcy Court. The firm will not seek compensation for tasks properly performed by the Debtor without the assistance of counsel. About Vintage Condominiums Vintage Condominiums 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, 2013, three weeks after the state court appointed a receiver at the behest of the secured lender. The Vintage Condominiums complex has 107 units, approximately two of which have been purchased by third-party buyers and approximately 105 of which are currently owned by Vintage. The lender Parkway Bank & Trust Co., owed $12.3 million, had a receiver appointed after giving notice of default on April 12, 2013. The Debtor disclosed $12,511,600 in assets and $23,956,587 in liabilities as of the Chapter 11 filing. Ronald J. Ellett, Esq., at Ellett Law Offices, P.C., serves as counsel to the Debtor. Christopher R. Kaup, J. Daryl Dorsey, at Tiffany & Bosco P.A. represent the creditor Parkway Bank & Trust Company. VYSTAR CORP: Incurs $2.7 Million Net Loss in 2012 ------------------------------------------------- Vystar Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $2.74 million on $540,168 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $3.60 million on $347,250 of revenue during the prior year. As of Dec. 31, 2012, the Company had $1.19 million in total assets, $2.94 million in total liabilities and a $1.74 million total stockholders' deficit. Habif, Arogeti & Wynne, LLP, in Atlanta, Georgia, 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 recurring losses from operations, capital deficit, and limited capital resources raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "There can be no assurances that the Company will be able to achieve its projected level of revenue in 2013 and beyond. If the Company is unable to achieve its projected revenue and is not able to obtain alternate additional financing of equity or debt, the Company would need to significantly curtail or reorient its operations during 2013, which could have a material adverse effect on the Company's ability to achieve its business objectives and as a result may require the Company to file for bankruptcy or cease operations. " A copy of the Form 10-K is available for free at: http://is.gd/53omAZ About Vystar Corp Duluth, Ga.-based Vystar Corporation is the creator and exclusive owner of the innovative technology to produce Vytex(R) Natural Rubber Latex. This technology reduces antigenic protein in natural rubber latex products to virtually undetectable levels in both liquid NRL and finished latex products. W.R. GRACE: 3rd Circuit Hears Arguments on Postpetition Interest ---------------------------------------------------------------- Before a packed courtroom in Philadelphia with more 100 people sitting in the gallery, lining the walls, and standing outside watching a video broadcast from inside the courtroom, The Honorable Thomas L. Ambro, D. Michael Fisher and Kent A. Jordan welcomed the parties to present oral arguments before the United States Court of Appeals for the Third Circuit about how much W.R. Grace should pay its bank lenders on account of post-petition interest. Moses Silverman, Esq., at Paul, Weiss, Rifkind, Wharton & Garrison LLP, in New York, advised the Court that the Bank Lenders' claim on account of post-petition interest grows by about $160,000 per day. As a result, the $180,000,000 amount owed when the Bank Lenders filed their Opening Broef in late-Nov. 2012 has now grown to $199,000,000. Mr. Silverman further advised the Court that the Debtors' market capitalization is now approximately $6.3 billion. The question before the Court is simple, Mr. Silverman said. Can shareholders keep $6.3 billion when the Bank Lenders aren't being paid what they're owed? The Bank Lenders say they can't, and a $199 million check will solve the problem. Judge Fisher probed the Bank Lenders' fair and equitable argument. Mr. Silverman directed the Court to In re PPI Enterprises (U.S.), Inc., 324 F.3d 197 (3rd Cir. 2003), as for the proposition that the Third Circuit has already settled that as a matter of law a fair and equitable plan must pay a solvent debtor's creditors contractual post-petition interest. W.R. Grace's plan doesn't, Judge Fitzgerald shouldn't have approved the plan, and Judge Buckwalter shouldn't have affirmed the plan. Judge Fisher complimented Mr. Silverman's articulate cherry-picking of that decision, but expressed his skepticism that PPI says everything the Bank Lenders want it to say. Mr. Silverman confirmed that if the Third Circuit determines that the Bank Lenders are unimpaired by the Plan, there's nothing more to talk about and their appeal fails. Judge Ambro asked why there was never any finding in the Bankruptcy Court about Grace's solvency. Mr. Silverman repeated his argument that a $6.4 billion market capitalization is proof of solvency. Judge Ambro asked his question again. Mr. Silverman said that the Debtors said it was impossible to make a solvency determination. Judge Jordan suggested that a solvency determination is critical in this case to analyze the Bank Lenders' appeal. Judge Ambro asked what evidence the Bank Lenders presented in the Bankruptcy Court about Grace's solvency. Mr. Silverman said he didn't know, but that it doesn't matter because (i) lenders don't have the burden of proving a debtor's solvency and (ii) Grace's $6.4 billion market capitalization proves that Grace is solvent. Judge Fisher chimed in, asking about what evidence the Bank Lenders submitted in the Bankruptcy Court to support their confirmation objection. Mr. Silverman repeated his two-pronged argument. Judge Jordan obtained clarification from Mr. Silverman that the Bank Lenders assert it was Judge Fitzgerald's duty to observe that Grace is solvent and insist that the Bank Lenders be paid in full in accordance with the terms of their loan documents. Judge Fisher waded into the topic about the various agreements during the plan negotiation period about a reduced interest rate. Mr. Silverman made it clear that the Bank Lenders didn't sign off of any of those agreements, and J.P. Morgan's agreements on behalf of the Creditors' Committee explicitly did not bind J.P. Morgan or any other Bank Lender. Judge Ambro questioned whether the company's repeated public statements over at least a two-year period, to which the Bank Lenders never objected (even in a one sentence letter), should estop the Bank Lenders at this juncture. John Donley, Esq., at Kirkland & Ellis LLP in Chicago, representing W.R. Grace, reminded the Court that Judge Fitzgerald convened ten days of hearings in the Bankruptcy Court that spanned over many months for the purposes of determining (x) the aggregate value of Grace's asbestos-related liability and (y) Grace's solvency or insolvency based on that valuation. That hearing ended when simultaneous plan negotiations culminated in the Plan now before the Court. Mr. Donley reminded the Court that estimates of the Debtors' asbestos-related liability were all over the map, and the Asbestos Claimants' Committee was intent on proving that Grace was insolvent and that the Bank Lenders should not recover their principal, much less any post-petition interest. The Plan Proponents' Plan crafted in those dark days of Grace's chapter 11 proceedings compromises every claim and nobody got everything they would have liked. Judge Ambro asked when increases in the value of a debtor's estate should be taken into account in plan negotiations. Mr. Donley returned to talking about the dark days of Grace's chapter 11 proceedings when the Debtors' market capitalization was as low as $60 million. Mr. Donley reminded the Court that Pamela Zilly, the Debtors' financial expert, opined that W.R. Grace's enterprise value in a chapter 7 liquidation might be as low as $2 billion and that a chapter 7 trustee would have the impossible task of defending 300,000 asbestos personal injury jury trials. But, Judge Jordan observed, that's not Grace's story. W.R. Grace's chapter 11 restructuring is a remarkable success. Judge Ambro asked Mr. Donley what harm would come from paying the Bank Lenders the additional $200 million they're owed. Mr. Donley said he understands the allure but doesn't like the precedent it might set. Judge Jordan asked whether the Court should direct that the asbestos claims estimation and solvency hearing be restarted and completed, and Judge Jordan's suggestion prompted an immediate collective groan in the courtroom gallery. No, Mr. Donley responded, pointing out that the only thing assuring Grace's solvency -- and delivering the value called for in the Plan to every stakeholder in Grace's case -- is the deal that was struck that underpins the Plan. If it weren't for the Plan before the Court, the Asbestos Claimants' Committee would again be arguing that Grace is hopelessly insolvent. Nobody wants that, Mr. Donley stressed. Mr. Silverman advised the Court that the Bank Lenders presented Judge Fitzgerald with evidence of the Debtors' positive market capitalization to prove the Debtors' solvency at the time of the confirmation hearing. Mr. Silverman suggested to the Court that the Plan Proponents should have entered into separate agreements with the Bank Lenders when the Plan was crafted. Mr. Silverman told the Court that the Bank Lenders had no mechanism to object to the other constituencies' negotiations prior to the confirmation hearing. Judge Ambro directed that a transcript be prepared and that the Plan Proponents and the Bank Lenders share that cost equally, said that the matter will be taken under advisement, and gave no hint about when the Third Circuit may issue its ruling. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. David T. Austern, the legal representative of future asbestos personal injury claimants, is represented by Orrick Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). W.R. GRACE: Future Claims Representative Taps Orrick as Counsel --------------------------------------------------------------- Roger Frankel, the court-appointed legal representative for future W.R. Grace claimants, filed an application to hire Orrick Herrington & Sutcliffe LLP as his counsel. Mr. Frankel seeks the employment of Orrick in connection with his appointment as legal representative for victims of asbestos exposure who may file claims against the company. Orrick will provide legal advice to Mr. Frankel concerning his duties as legal representative, prepare court papers on his behalf, and represent him at court hearings or other proceedings. The firm will also advise him concerning Grace's Chapter 11 reorganization plan, or any other plans that may be proposed in connection with the appeal of the court orders confirming the company's restructuring plan. The FCR said Orrick is "well suited" to assist Mr. Frankel since the firm has worked closely with David Austern, who served as legal representative for the future claimants since 2004. Mr. Austern died early last month. Orrick will be paid on an hourly basis and will be reimbursed for work-related expenses. The hourly rates of its U.S.-based professionals range from $695 to $1,095 for partners, $600 to $950 for senior counsel, $355 to $675 for associates, and $160 to $315 for legal assistants. The firm does not hold or represent interest adverse to Grace or its estate, according to a declaration filed by Richard Wyron, Esq., a partner at Orrick. A court hearing to consider approval of the application is scheduled for July 29. Objections are due by July 12. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. Roger Frankel serves as legal representative for victims of asbestos exposure who may file claims against W.R. Grace. Mr. Frankel, a partner at Orrick Herrington & Sutcliffe LLP, replaces David Austern, who was appointed to that role in 2004. Mr. Frankel has served as legal counsel for Mr. Austern who passed away in May 2013. Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). W.R. GRACE: FCR Proposes Phillips as Co-Counsel ----------------------------------------------- Roger Frankel, the court-appointed legal representative for future W.R. Grace claimants, seeks a court order authorizing the employment of Phillips Goldman & Spence, P.A. as his Delaware co-counsel. Phillips will assist Orrick Herrington & Sutcliffe LLP, the firm tapped by Mr. Frankel to be his primary legal counsel, in preparing court papers in connection with W.R. Grace & Co.'s bankruptcy case. The firm will also provide legal advice to Mr. Frankel concerning his duties, and advise him concerning the company's Chapter 11 reorganization plan or any other plan that may be proposed. The company will pay Phillips for its services on an hourly basis and will reimburse the firm for its work-related expenses. The firm's current hourly rates are as follows: Professionals Hourly Rates ------------- ------------ Senior Partners $495 Junior Partners $435 Associates $305 - $375 Legal Assistants $165 John Phillips Jr., Esq., a partner at Phillips, said in a declaration that his firm does not hold or represent any interest adverse to Grace or its estate. A court hearing is set for July 29. Objections are due by July 12. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. Roger Frankel serves as legal representative for victims of asbestos exposure who may file claims against W.R. Grace. Mr. Frankel, a partner at Orrick Herrington & Sutcliffe LLP, replaces David Austern, who was appointed to that role in 2004. Mr. Frankel has served as legal counsel for Mr. Austern who passed away in May 2013. Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). W.R. GRACE: FCR Engages Lincoln Partners as Financial Adviser ------------------------------------------------------------- Roger Frankel, the court-appointed legal representative for future W.R. Grace claimants, seeks court approval to retain Lincoln Partners Advisors LLC as his financial adviser. Lincoln will assist the legal representative in reviewing the conduct and financial condition of W.R. Grace & Co. The firm will also advise Mr. Frankel concerning the company's Chapter 11 reorganization plan or any other plan, and evaluate the financial effect of the implementation of that plan to the assets or securities of the company. The firm will receive a cash fee of up to $75,000 per month, payable monthly in arrears, and will be reimbursed for work- related expenses. Lincoln does not hold or represent interest adverse to Grace or its estate, according to a declaration filed by its managing director, Joseph Radecki Jr. Mr. Radecki has previously provided financial advice to David Austern, former legal representative of the future claimants, according to court filings. A court hearing is set for July 29. Objections are due by July 12. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. Roger Frankel serves as legal representative for victims of asbestos exposure who may file claims against W.R. Grace. Mr. Frankel, a partner at Orrick Herrington & Sutcliffe LLP, replaces David Austern, who was appointed to that role in 2004. Mr. Frankel has served as legal counsel for Mr. Austern who passed away in May 2013. Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). W.R. GRACE: National Aluminum Inks Agreement to Settle Claims ------------------------------------------------------------- W.R. Grace & Co. signed an agreement to settle the claim of National Aluminum Corporation. Under the deal, National Aluminum can assert a general unsecured non-priority claim of $63,921 against Grace for environmental response costs associated with its facility in Maceo, Kentucky. The agreement also provides that National Aluminum is entitled to receive payment under Grace's Chapter 11 reorganization plan, or any other plan confirmed in its bankruptcy case. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. Roger Frankel serves as legal representative for victims of asbestos exposure who may file claims against W.R. Grace. Mr. Frankel, a partner at Orrick Herrington & Sutcliffe LLP, replaces David Austern, who was appointed to that role in 2004. Mr. Frankel has served as legal counsel for Mr. Austern who passed away in May 2013. Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). W.R. GRACE: Chapter 11 Case Re-Assigned to Judge Carey ------------------------------------------------------ The Chapter 11 cases of W.R. Grace & Co. and its debtor affiliates are re-assigned to Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware following Judge Judith Fitzgerald's retirement. About W.R. Grace Headquartered in Columbia, Maryland, W.R. Grace & Co. (NYSE:GRA) -- http://www.grace.com/-- supplies catalysts and silica products, especially construction chemicals and building materials, and container products globally. The company and its debtor-affiliates filed for chapter 11 protection on April 2, 2001 (Bankr. D. Del. Case No. 01-01139). David M. Bernick, P.C., Esq., at Kirkland & Ellis, LLP, and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP, represent the Debtors in their restructuring efforts. The Debtors hired Blackstone Group, L.P., for financial advice. PricewaterhouseCoopers LLP is the Debtors' accountant. Stroock & Stroock & Lavan, LLP, and Duane Morris, LLP, represent the Official Committee of Unsecured Creditors. The Creditors Committee tapped Capstone Corporate Recovery LLC for financial advice. Roger Frankel serves as legal representative for victims of asbestos exposure who may file claims against W.R. Grace. Mr. Frankel, a partner at Orrick Herrington & Sutcliffe LLP, replaces David Austern, who was appointed to that role in 2004. Mr. Frankel has served as legal counsel for Mr. Austern who passed away in May 2013. Herrington & Sutcliffe LLP and Phillips Goldman & Spence, PA. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, and Marla R. Eskin, Esq., at Campbell & Levine, LLC, represent the Official Committee of Asbestos Personal Injury Claimants. The Asbestos Committee of Property Damage Claimants tapped Scott Baena, Esq., and Jay M. Sakalo, Esq., at Bilzin Sumberg Baena Price & Axelrod, LLP, to represent it. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel, LLP, represents the Official Committee of Equity Security Holders. W.R. Grace obtained confirmation of a plan co-proposed with the Official Committee of Asbestos Personal Injury Claimants, the Official Committee of Equity Security Holders, and the Asbestos Future Claimants Representative. The Chapter 11 plan is built around an April 2008 settlement for all present and future asbestos personal injury claims, and a subsequent settlement for asbestos property damage claims. Implementation of the Plan has been held up by appeals in District Court from various parties, including a group of prepetition bank lenders and the Official Committee of Unsecured Creditors. District Judge Ronald Buckwalter on Jan. 31, 2012, entered an order affirming the bankruptcy court's confirmation of the Plan. Bankruptcy Judge Judith Fitzgerald had approved the Plan on Jan. 31, 2011. The plan can't be implemented because pre-bankruptcy secured bank lenders filed an appeal currently pending in the U.S. Court of Appeals in Philadelphia. Bankruptcy Creditors' Service, Inc., publishes W.R. Grace Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by W.R. Grace, W.R. Grace Co. - Conn. and their affiliates. (http://bankrupt.com/newsstand/or 215/945-7000). W25 LLC: Obtains Confirmation of Third Amended Reorganization Plan ------------------------------------------------------------------ Bankruptcy Judge Stuart Bernstein confirmed the Third Amended Disclosure Plan of Reorganization on June 3, 2013. The Third Amended Plan was filed on May 20, 2013, and was revised shortly before the Court entered a confirmation order. The Revised 3rd Amended Plan generally provides that a commercial real property located at 119 West 25th Street, in New York, owned by the Debtor will be sold at a private sale. The Premises will be transferred to the purchaser, subject to the existing mortgage of LL 25 Penny, LLC. The Revised Plan also provides that each holder of a Class 2 general unsecured claim will receive its allowed claim, with interest at any contract rate agreed to by the parties. Payment will be made from a $500,000 reserve. To the extent this amount is not sufficient to make all payments, payments will be made from the $10,000,000 payment to be paid to the Debtor as part of the consideration of the asset sale. A full-text copy of the Revised Third Amended Plan of Reorganization is available for free at: http://bankrupt.com/misc/W25_3rdAmdPlanJune03.pdf In line with the Confirmation Order, the Court prohibits the Debtor from filing another Chapter 11 case for a period of 180 days from the entry of the confirmation order. The Debtor is also required to file all required reports through the entry of a final decree. Fred S. Kantrow, Esq., of the Law Offices of Avrum J. Rosen, PLLC, in New York, represents the Debtor. About W25 LLC W25 LLC filed a bare-bones Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-14526) in Manhattan on Nov. 6, 2012. Avrum J. Rosen, Esq., at The Law Offices of Avrum J. Rosen, PLLC, in Huntington, New York, serves as counsel. The Debtor disclosed $44,001,000 in assets and $48,756,419 in liabilities as of the Chapter 11 filing. No official committee of unsecured creditors has been appointed in the case. WFO INC: Wins Court OK to Hire Parr Recovery as Recovery Agent -------------------------------------------------------------- Alfred T. Giuliano, Chapter 11 Trustee for the estate of WJO, Inc., sought and obtained bankruptcy court permission to hire Parr Recovery Inc. as recovery agent to affect the re-issuance of certain unnegotiated checks. After the Petition Date, Parr located three checks in the amounts of $18,227, $6,665, and $1,437, issued to the Debtor that have not been negotiated. The Unnegotiated Checks are lying dormant and were allegedly issued by a governmental agency with the ability to reissue them upon proper presentation. The Trustee proposes to pay Parr on a contingency fee basis of 10% of the funds collected out of which Parr will pay all associated expenses. To the best of the Trustee's knowledge, Parr has no connection with the Debtor, creditors or any other parties-in-interest. Robert W. Seitzer, Esq., and Aris J. Karalis, Esq., of Maschmeyer Karalis P.C., represent the Chapter 11 Trustee. About WJO Inc. Bristol, Pennsylvania-based WJO, Inc., operates six family practices located in Newtown, Bristol, Bensalem, Bustleton, South Philadelphia, and Bethlehem, Pennsylvania and consists of Board Certified Osteopathic Physicians specializing in Family Medicine. Prior to the petition date, and to allow the Company to restructure effectively, HyperOx Inc., HyperOx I, LP, HyperOx III, LP, and East Coast TMR, Inc., were merged into WJO. WJO filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 10-19894) on Nov. 15, 2010. The Debtor disclosed $19,923,802 in assets and $6,805,255 in liabilities as of the Chapter 11 filing. Holly Elizabeth Smith, Esq., and Thomas Daniel Bielli, Esq., at Ciardi Ciardi & Astin, P.C., serve as the Debtor's bankruptcy counsel. Pond Lehocky Stern Giordano serves as the Debtor's special counsel to represent it in worker's compensation proceedings pertaining to the Therapeutic Magnetic Resonance treatments. Patrick Yun serves as the Debtor's financial advisor. Attorneys at Keifer & Tsarouhis LLP serve as counsel to the official committee of unsecured creditors. ParenteBeard LLC serves as the Committee's accountant and financial advisor. The United States Trustee has appointed David Knowlton as patient care ombudsman in the case. The Ombudsman is represented in the case by Karen Lee Turner, Esq., at Eckert Seamans Cherin & Mellott, LLC, as counsel. Tristate Capital Bank, the cash collateral lender, is represented in the case by lawyers at Benesch Friedlander Coplan & Aronoff LLP. On July 3, 2012, Roberta A. DeAngelis, U.S. Trustee for Region 3, obtained permission from the Hon. Jean K. Fitzsimon of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to appoint Alfred T. Giuliano as Chapter 11 trustee of the bankruptcy estate of WJO, Inc. Maschmeyer Karalis P.C. serves as the Chapter 11 Trustee's general bankruptcy counsel. WINDSORMEADE OF WILLIAMSBURG: Plan of Reorganization Effective -------------------------------------------------------------- Virginia United Methodist Homes of Williamsburg, Inc., notified the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division, that the Effective Date of its Plan of Reorganization occurred on May 31, 2013. The notice was filed by Robert S. Westermann, Esq., and Sheila deLa Cruz, Esq., at Hirschler Fleischer, P.C., in Richmond, Virginia; and Thomas R. Califano, Esq., George B. South III, Esq., and Sarah E. Castle, Esq., at DLA Piper LLP (US), in New York, on behalf of the Debtor. About WindsorMeade of Williamsburg Virginia United Methodist Homes of Williamsburg, Inc., doing business as WindsorMeade of Williamsburg, filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 13-31098) on March 1, 2013. WindsorMeade of Williamsburg is a continuing care retirement community located on a 105 acre parcel of real property leased by sponsor Virginia United Methodist Homes Inc. The facility includes 181 independent living units with an 80% occupancy rate, 14 assisted living apartments with 65% occupancy and 12 skilled nursing beds with 75% occupancy. DLA Piper LLP (US) and Hirschler Fleischer, P.C. serve as counsel to the Debtor. Deloitte Financial Advisory Services LLP serves as financial advisor. McGuire Woods LLP is special bond counsel. BMC Group Inc. is the claims agent. The prepetition lender, UMB Bank, NA, is represented by Christian & Barton, LLP. The Debtor estimated assets and debts of $100 million to $500 million. ZELIENOPLE INVESTMENT: Involuntary Chapter 11 Case Summary ---------------------------------------------------------- Alleged Debtor: Zelienople Investment Corporation 1506 Mars-Evans City Road Evans City, PA 16033 Case Number: 13-22522 Involuntary Chapter 11 Petition Date: June 13, 2013 Court: Western District of Pennsylvania (Pittsburgh) Petitioners' Counsel: Robert O. Lampl, Esq. 960 Penn Avenue, Suite 1200 Pittsburgh, PA 15222 Tel: (412) 392-0330 Fax: (412) 392-0335 E-mail: rol@lampllaw.com Creditors who signed the petition: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Marburger Farm Dairy Loan $561,367 1506 Mars-Evans City Rd Evans City, PA 16033 Patricia Marburger Loan $44,503 113 Crestview Drive Evans City, PA 16033 James Marburger Loans $74,503 113 Crestview Drive Evans City, PA 16033 Amy Creeks Wages $89 McKim Street Zelienople, PA 16063 Tabitha Mesko Wages $303 115 Bellian Drive Fombell, PA 16123 Hope Gebhardt Wages $172 103 Hazen Avenue Ellwood City, PA 16117 Raymond Robinson Wages $164 316 W. Grandview Ave Apt. 2 Zelienople, PA 16063 Kimberly McCormick Wages $17 490 Baker Road Freedom, PA 15042 Jessica Main Wages $934 733 Portersville Road Ellwood City, PA 16117 Emily Eller Wages $277 374 Zehner School Road Zelienople, PA 16063 ZIA SHADOWS: Dist. Ct. Rules on Las Cruces Summary Judgment Bid --------------------------------------------------------------- In the lawsuit ZIA SHADOWS, L.L.C., et al., v. CITY OF LAS CRUCES, NEW MEXICO, et al., Case NO. 09-CV-0909 MV/WPL, District Judge Martha Vasquez granted the Defendants' Motion for Summary Judgment with respect to Plaintiffs' procedural due process, substantive due process, and equal protection claims but denied the Motion as to the Plaintiffs' First Amendment retaliation claims. Zia Shadows purchased a real estate property in 1998 in Las Cruces with the intent of building a manufactured home community. The Plaintiffs filed the lawsuit, arguing that the Defendants acted arbitrarily and capriciously in delaying the approval of Plaintiffs' development plan, in denial of Plaintiffs' constitutional rights to due process, equal protection, and free speech. The City moved for summary judgment on all of Plaintiffs' claims. A copy of Judge Vasquez's June 3, 2013 Order is available at http://is.gd/uGvwlYfrom Leagle.com. Zia Shadows filed for Chapter 11 bankruptcy on Nov. 8, 2004. Cindy Rhodes Victor, Esq. -- info@victorfirm.com -- of The Victor Firm, PLLC; and Kevin Hammar, Esq., of Aldridge, Grammer & Hammer P.A., serve as attorneys for Zia Shadows. William L. Lutz, Esq., and David P. Lutz, Esq., of Martin, Lutz, Roggow & Eubanks, P.C., serve as attorneys for the City of Las Cruces. * AmeriBid to Auction Brick Commercial Building on July 9 --------------------------------------------------------- AmeriBid LLC on June 18 announced the owner ordered liquidation auction of a 25,060+/-sf Brick Commercial Building on Minnesota Avenue. "This is a great central business district location in close proximity to the Wyandotte County Courthouse," comments Don Gabriel, Regional Director and Broker for AmeriBid. "It would be an ideal public agency setting." The property will be auctioned on-site at 626 Minnesota Avenue, Kansas City, KS at 11:00am CDT on Tuesday, July 9, 2013. The sturdy brick and stone building is located in the municipal district of Kansas City, Kansas. It was built in 1950 and consists of 25,060+/- sf of commercial space, which underwent a full renovation in 1992. The building features three floors and a fully finished basement, with restrooms, an elevator and staircases serving each level. It has a sprinkler system and 8 foot ceilings. It could be used for one tenant or divided into multiple spaces -- the decision is left to the discretion of the buyer. The property is situated on a 0.158+/- acre lot and has paid parking available on the east of the building. The property is zoned Central Business District and allows for a variety of commercial uses in order to encourage a broad range of businesses in the downtown area. It is located between 6th and 7th Street on Minnesota Avenue, a major thoroughfare in Kansas City and is within a short distance to the Wyandotte County Courthouse, making it a perfect location for a variety of uses. The Kansas City International Airport is just 13 miles away. The Kansas City metro area spans across both the Kansas and Missouri borders and is comprised of approximately two million people. In 2012, KansasForbes magazine for its arts culture, various fountains, upscale shopping areas and local cuisine featuring barbeque as a notable area specialty. A 10% Buyer's Premium applies. A 1.5% Broker Participation is offered, subject to Auction Company guidelines. Property inspection dates and times are available on our website. To receive more details and complete terms, please visit www.ameribid.com or call 877-895-7077. You may also contact Don Gabriel directly at 913-708-0688 or dongabriel@ameribid.com Headquartered in Tulsa, Okla., AmeriBid is the premier global real estate auction leader specializing in the sale of commercial and residential real estate, land properties and other assets for lenders, servicers, receivers, bankruptcy attorneys, estates, private owners, investment companies and local, state and federal government agencies. * JPMorgan to Begin Disclosing Daily Liquid Assets in Money Funds ----------------------------------------------------------------- Kirsten Grind, writing for The Wall Street Journal, reported that J.P. Morgan Chase & Co.'s asset-management division will begin disclosing to investors the amount of liquid assets held in its U.S. money-market-mutual funds each day on its website, the company said. Investors will be able to view each fund's percentage of assets that are liquid on a daily and weekly basis, a move J.P. Morgan is making to increase transparency in its funds, according to a company release, the report related. Currently, the daily and weekly liquidity levels of money market funds are not disclosed to either the Securities and Exchange Commission or the public. J.P. Morgan says the change will take effect June 18. The decision follows moves by money managers like J.P. Morgan, Goldman Sachs Group Inc. and BlackRock Inc. earlier this year to begin disclosing the values of their funds daily to investors rather than monthly, the report noted. The transparency of money-market funds is one of the issues the SEC is hoping to tackle as part of recently proposed new rules regulating the $2.6 trillion industry, the report pointed out. The funds' liquidity has been an issue since the 2008 financial crisis when one large money-market fund "broke the buck" by falling under the $1 net asset value that money funds seek to maintain, according to the report. The fund had invested in the debt of Lehman Brothers Holdings Inc. When the investment bank filed for bankruptcy, fund managers struggled to sell off the debt as investors pulled their money from the fund. The federal government was forced to step in and backstop all money funds. J.P. Morgan is the second-largest money-market fund company nationwide, with $230.7 billion of assets under management, behind Fidelity Investments, according to Crane Data LLC, a research firm, the report related. * Suit Claims BofA Gave Bonuses to Foreclose on Clients ------------------------------------------------------- Hugh Son & David McLaughlin, writing for Bloomberg News, reported that Bank of America Corp., the second-biggest U.S. lender, rewarded staff with cash bonuses and gift cards for meeting quotas tied to sending distressed homeowners into foreclosure, former employees said in court documents. According to the report, mortgage workers falsified records and were told to delay U.S. loan-assistance applications by requesting paperwork that the Charlotte, North Carolina-based bank had already received, according to statements from ex-employees filed last week in federal court in Boston. The lender improperly disqualified applicants to the Home Affordable Modification Program, or HAMP, according to a May 23 statement from Simone Gordon, a loss-mitigation specialist who left the company in 2012. "We were regularly drilled that it was our job to maximize fees for the bank by fostering and extending delay of the HAMP modification process by any means we could," Gordon said, the report related. Managers instructed staff to "delay modifications by telling homeowners who called in that their documents were ?under review,' when in fact, there had been no review," she said. Bank of America, which has spent more than $45 billion to settle claims tied to its 2008 takeover of Countrywide Financial Corp., is being sued by homeowners who didn't receive permanent loan modifications after making payments under trial programs, according to court papers, the report further related. Statements from seven former loan employees were included in a filing last week as part of plaintiffs' attempt to gain class-action status. The lender has denied the allegations. * Wells Fargo Faces New Minnesota Securities-Lending Trial ---------------------------------------------------------- Margaret Cronin Fisk & Beth Hawkins, writing for Bloomberg News, reported that Wells Fargo & Co. faces a second Minnesota trial over claims by institutional investors that the bank marketed a risky securities-lending program as safe and cost them millions of dollars in losses. According to the report, the case is one of at least five in Minnesota against Wells Fargo over its securities lending. Wells Fargo lost the first to go to trial in 2010, when a state court jury awarded Minnesota Workers' Compensation Reinsurance Association and three charitable foundations about $30 million, a judgment that was upheld on appeal. Wells Fargo is scheduled for a third trial on the same claims from different plaintiffs in September, brought as a class action, or group lawsuit on behalf of about 100 institutional investors, the report said. Two other cases are also pending in federal court, including one by Minnesota Life Insurance Co. seeking $40 million in damages. The trial set to begin on June 17 before U.S. District Judge Donovan W. Frank in St. Paul covers allegations from Blue Cross Blue Shield of Minnesota, the El Paso County Retirement Plan and 10 other nonprofit groups seeking unspecified millions of dollars in losses plus punitive damages, the report added. The suits have been brought in Minnesota, where the Wells Fargo securities- lending program was located. Wells Fargo engaged in "systematic, intentional and unlawful conduct -- including breaches of fiduciary duty, breaches of contract, and fraud -- in a multibillion-dollar securities-lending program," lawyers for the plaintiffs said in the complaint, the report related The case is Blue Cross Blue Shield of Minnesota v. Wells Fargo Bank, 11-cv-02529, U.S. District Court, District of Minnesota (St. Paul). * Moody's Notes Declining Rate of Student Loan Defaults ------------------------------------------------------- The private student loan default rate index will continue to fall year over year in 2013 with the pace of improvement continuing in the teens, as it has in the last four quarters, says Moody's Investors Service in its first-quarter performance report on the sector. The default rate index of non-federally guaranteed student loans in 2013 will still be higher than pre-recession levels, according to "Private (Non-Guaranteed) Student Loan Performance Improves Across All Measures." Though still high by historical standards, the unemployment rate, and the key driver of student loan defaults, has been improving and is likely to stay between 7.0% and 8.0% in 2013. "A decline in unemployment means borrowers will be better able to repay their loans; however, high student loan debt and lower earnings will continue to make repayment difficult," said Moody's AVP-Analyst Stephanie Fustar, author of the report. The default rate index for first-quarter 2013 was 4.0%, down considerably from 5.0% in first-quarter 2012. The year-over-year decline of more than 18% marks the fourth consecutive quarter of sizeable year-over-year improvement. The rate is still about 50% higher than pre-recession levels, but is an improvement from prior quarters, when it was about twice as high. The 90-plus delinquency rate index was 2.4% in first-quarter 2013, down slightly from the same period in 2012. "Ninety-plus delinquencies will continue to decline slowly, as they have since peaking in mid-2009," says Moody's Fustar. The PSL Indices track more than ten years of credit performance data on 71 private student loan securitizations that Moody's rates, representing approximately $40 billion in outstanding pool balance. * Moody's Outlook on NA and EMEA Chemical Sectors is Negative ------------------------------------------------------------- Moody Investors Service's outlook for the North American and EMEA chemical industry remains negative, based on the ratings agency's depressed economic forecast for Europe, uncertainty around China's growth rate and the modest pace of economic recovery in the US. "The North American and EMEA chemical industry will continue to be pressured primarily by poor industrial activity in Europe," says Vice President -- Senior Analyst James Wilkins in the new report, "European Weakness and Uncertain Demand from Asia Keep Chemicals in Doldrums." "Sales volumes declined for many European chemical firms in the second half of 2012, with disappointing financial results in early 2013 a reflection of the region's contracting GDP and industrial production," Wilkins says. Moody's projects that economic recovery will begin to take hold in Europe in the second half of this year, but the firm does not foresee a large increase in demand for chemicals there over the next 12 to 18 months. In addition, much depends on the strength of China's economy, since China accounts for a large portion of global growth and has supported the North American and EMEA chemical industry in recent years. Moody's expects stable growth in China, Wilkins says, but demand for chemicals has not broadly reflected the country's recent economic growth statistics. Meanwhile, over the next year or so modest economic growth and low natural gas feedstock prices will support sales and margins for North American chemical producers, continuing to allow them to export to Latin America and Asia. Low natural gas prices in North America will benefit producers of ethylene, methanol and ammonia. Higher agricultural production and low natural gas prices will boost North American producers of nitrogen-based fertilizers and methanol, according to the report. Chemicals sold in certain non- cyclical end markets such as food, beverages, medical products and personal care, should also continue to perform well through this year and next, the report says. * 'Naked' Liens Don't Open IRAs to Creditors: 6th Circ. ------------------------------------------------------- Stewart Bishop of BankruptcyLaw360 reported that the Sixth Circuit reversed lower courts' rulings that found a bankrupt man's retirement account was fair game for creditors after he signed a lien agreement with Merrill Lynch, ruling that a "naked lien," stripped of any connection to a credit transaction, doesn't disqualify a retirement plan from exempt status. According to the report, in a published opinion, a three-judge panel for the appeals court reversed rulings from bankruptcy and district courts that found James Daley impermissibly used a $66,000 Merrill Lynch IRA to extend himself credit. * Supreme Court Takes Law Case; 2 Cases Could Join Next Week ------------------------------------------------------------ Does a bankruptcy court have power to take away property an individual bankrupt otherwise would be entitled to retain, to make up for losses resulting from the bankrupt's bad behavior? That's a question the U.S. Supreme Court will answer by granting an appeal this week to resolve a split among the federal appeals courts, according to a report by Bill Rochelle, the bankruptcy columnist for Bloomberg News. According to the report, the Supreme Court is scheduled to decide next week if it will hear two other bankruptcy cases in the term beginning in October. The case the Supreme Court decided June 17 to hear a case involving an individual bankrupt named Stephen Law who owned a home worth $360,000. There was a concededly valid first mortgage for $150,000 and a $160,000 second mortgage the bankruptcy court eventually held to be a fiction invented by Mr. Law to protect value in the property for himself beyond the $75,000 homestead exemption permitted by California law. The report recounts that the U.S. Ninth Circuit Court of Appeals in San Francisco wrote a two-page opinion two years ago this month upholding the bankruptcy court and allowing the trustee to surcharge the otherwise exempt home to recover expenses unnecessarily incurred in litigating with Mr. Law over the fictional mortgage. In Mr. Law's situation, the Ninth Circuit followed its own 2004 ruling in a case named Latman finding equitable power to surcharge exempt property. In 2008, the U.S. Court of Appeals in Denver created split of circuit by reaching the opposite conclusion in a case called Scrivner. The report relates that in August 2012 the U.S. Court of Appeals in Boston, in an opinion written by former Supreme Court Justice David Souter, issued a ruling in agreement with the Ninth Circuit's Latman and Law decisions. Representing himself, Mr. Law sought review in the Supreme Court. After filing his first brief, Matthew Hellman, a former law clerk for Souter, took on Mr. Law's case pro bono and filed additional papers asking the high court to grant an appeal. A partner with Jenner & Block LLP in Washington, Mr. Hellman was successful in persuading the court to hear the case. Before deciding whether to take the case, the Supreme Court sought the opinion of the U.S. Solicitor General. The Justice Department's lawyers in the Supreme Court filed a brief concluding that the case was correctly decided in the Ninth Circuit because it was consistent with the Supreme Court's opinion in a 2007 case called Marrama regarding the "remedial authority" of bankruptcy courts under Section 105(a) of the Bankruptcy Code. Mr. Hellman said in an interview that the Law case should be argued in the Supreme Court around December. The report shares that there is irony in Mr. Hellman's serving as Mr. Law's counsel because he will be taking a position contrary to the ruling by his former boss Souter in the First Circuit opinion last year. The Ninth Circuit's opinion isn't without critics. In the intermediate appeal before the Ninth Circuit Bankruptcy Appellate Panel, Bankruptcy Judge Bruce Markell wrote a concurring opinion where he questioned whether Latman "remains good policy." He said the result may not be correct "in the absence of any specific statutory authority." The report relays that depending on how the Supreme Court writes its opinion, the Law case could shed light on the propriety of a mechanism sometimes used in Chapter 11 reorganizations of large companies for giving unsecured creditors a recovery when they otherwise would have none. In some cases, creditors' committees reach settlements with secured lenders where a trust is created and funded by the lender, with the funds earmarked exclusively for unsecured creditors while bypassing the ordinary priority rules. If the Supreme Court decides that Law was correctly decided, Chapter 11 creditors' trusts can point to the Supreme Court as authority for sometimes disregarding the statutory distribution scheme. The Supreme Court is currently scheduled to announce on June 24 whether it will grant an appeal in a case where the lower courts are split on the question of whether someone can waive the right for certain types of state-law claims to be decided only by life-tenured federal district judges. That case is called Executive Benefits Insurance Agency v. Arkinson. The report discloses that also next week the Supreme Court will rule on whether Pfizer Inc. can appeal an unfavorable ruling from U.S. Court of Appeals in Manhattan. The appeals court concluded that Pfizer wasn't entitled to complete protection from asbestos claims under the umbrella of Chapter 11 case of its non-operating subsidiary Quigley Company Inc. The Solicitor General told the high court that the Pfizer case was correctly decided and recommended against granting an appeal. The Law case in the Supreme Court is Law v. Siegel, 12-5196, U.S. Supreme Court (Washington). * Suit Tries Creative Approach Against Fannie and Freddie Bailout ----------------------------------------------------------------- Stephen J. Lubben, writing for The New York Times' DealBook, reported that shareholders of Fannie Mae and Freddie Mac, the two government-sponsored enterprises bailed out by the government, have some hubris. According to the report, like some shareholders of the American International Group, the Fannie and Freddie shareholders have stooped to lawsuits as a way of trying to garner millions from the same government that rescued the entities. As was the case with the A.I.G. shareholders who have sued, they ought to know better. In the case involving Fannie and Freddie, the shareholders acknowledge that the government takeover of the two entities likely saved Western civilization, but they still blame the government for bailing the two entities out, the report said. Maybe that's a bit of an oversimplification, but it has a kernel of truth, the report noted. The thrust of the argument in the lawsuit is that during the financial crisis, the government first enacted a new conservatorship process for the government-sponsored enterprises, put those enterprises into that process and finally provided lots of new money to the two at a senior level in the capital structure (relative to the old shareholders) to keep the companies afloat, the report pointed out. * New York State May Tighten Rein on Banking Consultants -------------------------------------------------------- Jessica Silver-Greenberg and Ben Protess, writing for The New York Times' DealBook, reported that New York State's top financial regulator is preparing to crack down on the consulting firms that banks hire to navigate legal problems like money laundering and wrongful foreclosures, according to people briefed on the plans. According to the report, in an attempt to force change upon a sector that operates with scant supervision and produces mixed results, Benjamin M. Lawsky, New York's superintendent of financial services, plans to use an obscure state banking law to rein in banks' use of consultants, these people said. Among the aggressive moves under consideration, Mr. Lawsky is said to be weighing whether to ban temporarily at least one firm with a poor track record from advising banks chartered in New York, the report related. His office is also considering a new code of conduct for consultants, the people briefed on the plan said. The state regulator's plan is the latest threat to the multibillion-dollar consulting industry, which has already come under fire in Washington as it has evolved into something of a shadow regulator of Wall Street, according to the report. In recent months, consulting firms have been faulted with inadequately handling several prominent bank regulatory problems. In a review of millions of home foreclosures nationwide, for example, consultants racked up more than $2 billion in fees while struggling to complete the assignment. In other cases, consulting firms have been accused of either underestimating the amount of tainted money routed through a bank or even enabling banks to escape regulatory scrutiny for wrongdoing. The consulting industry, which includes some of the world's largest accounting firms, has long defended the quality and independence of its work, the report noted. * Banks Balk at New Rules for Small Loans ----------------------------------------- Robin Sidel and Alan Zibel, writing for The Wall Street Journal, reported that large banks are pushing back against regulators' plans to toughen rules on short-term, high-interest consumer loans. According to the report, Wells Fargo & Co., the largest bank to offer "deposit-advance loans," has told regulators that it will discontinue the loans if plans for tougher rules are completed, according to comments filed last month with the Office of the Comptroller of the Currency. The report related that the proposal "will force Wells Fargo to discontinue the Direct Deposit Advance Service, leaving many customers only more expensive alternatives," Wells wrote in a comment letter submitted to the OCC on May 30. U.S. Bancorp of Minneapolis and Regions Financial Corp. of Birmingham, Ala., also have told regulators that the proposed new rules would increase the costs and complexity of offering such loans, the report said. They also say the proposals would cut the availability of credit to consumers. The proposed rules "will limit the bank's ability to provide deposit-advance products to most customers," U.S. Bancorp wrote in comments submitted to the OCC, the report further related. * Refinancings Plunge as Bond Yields Rise ----------------------------------------- Nick Timiraos and Andrew R. Johnson, writing for The Wall Street Journal, reported that surprise spike in mortgage rates threatens to halt a refinancing boom that has delivered strong profits for U.S. banks over the past two years. The average rate on a 30-year mortgage rose to 4.15% last week, a 14-month high and up sharply from 3.59% in early May, according to the Mortgage Bankers Association, the report related. A separate survey released by Freddie Mac said the rate this week was at 3.98%, up from 3.35% last month. Refinancing applications last week were down 36% from the first week of May, before rates began climbing, according to the bankers association, the report said. Lenders have been predicting that refinancing would taper off, "what wasn't anticipated was that this move in rates would happen so quickly," said Bose George, a mortgage-finance company analyst with Keefe, Bruyette & Woods, the report added. While a falloff in refinancing business could cut into record profits lenders have enjoyed from the activity, a rise in short- term interest rates could see banks earning higher yields on various types of loans, from mortgages to commercial real estate, the report related. * More Than $100B in Private Equity Trapped in "Zombie Funds" ------------------------------------------------------------- Reuters reported that private equity firms are sitting on $116 billion of assets trapped in so-called zombie funds that lie dormant but still rake in fees from investors, research showed on Thursday. Almost 1,200 private equity funds can be classed as "zombie" -- poor-performing funds that have been retained beyond their planned life span and whose managers have little hope of raising more money -- according to data from industry tracker Preqin, the report related. Despite the funds being inactive, general partners -- those managing the funds -- still collect management fees from investors, the report said. U.S. regulator the Securities and Exchange Commission is investigating the use of these essentially inactive funds, which critics say drain money from pension funds and other investors that would otherwise be available to reinvest or return to clients, the report related. It is part of a wider SEC probe into the private equity industry as a whole. Hedge funds, asset managers and other alternative investment vehicles have also recently come under increased scrutiny in both Europe and the U.S. as the public and regulatory backlash since the 2008 financial crisis spreads beyond the banking industry, the report noted. * Mintz Levin Bankruptcy Attorneys Among Recommended by Legal 500 ----------------------------------------------------------------- The Legal 500 United States has recognized Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. as a leading firm in the 2013 edition. The annual editorial guide recommended six Mintz Levin practice areas and eleven of the firm's attorneys. Mintz Levin was recommended in the following practice areas: -- Finance - Municipal Bankruptcy -- Industry Focus - Healthcare: Life Sciences -- Industry Focus - Healthcare: Service Providers -- Labor and Employment - Immigration -- Mergers, Acquisitions and Buyouts - M&A: Middle-Market (sub- $500m) -- Mergers, Acquisitions and Buyouts - Venture Capital and Emerging Companies The Legal 500 United States also recognized Mintz Levin attorneys as leaders in their areas of practice. William W. Kannel, a Member of the firm's Bankruptcy, Restructuring & Commercial Law Section, was named to the guide's "Leading Lawyers" list, the highest ranking for individual lawyers, for Finance - Municipal Bankruptcy. Susan J. Cohen, Chair of Mintz Levin's Immigration Section was selected for inclusion on the "Leading Lawyers" list for Labor and Employment - Immigration. Additionally, The Legal 500 United States recommended the following Mintz Levin attorneys: -- Ivor R. Elrifi (industry focus - healthcare:Life Sciences) -- Michael S. Gardener (Finance - Municipal Bankruptcy) -- Lewis J. Geffen (Mergers, Acquisitions and Buyouts - Venture Capital and Emerging Companies) -- Douglas Hauer (Labor and Employment - Immigration) -- Ann-Ellen Hornidge (Finance - Municipal Bankruptcy) -- Richard H. Moche (Finance - Municipal Bankruptcy) -- Scott A. Samuels (industry focus - healthcare:Life Sciences) -- Adrienne K. Walker (Finance - Municipal Bankruptcy) -- William T. Whelan (industry focus - healthcare:Life Sciences) The Legal 500 is an independent guide that surveys and interviews more than 250,000 corporate counsel globally each year. The Legal 500 United States is the only guide to recommend firms on a national basis, and in 2013, recommended just 311 firms. Both firms and individuals are recommended purely on merit. * PwC Expands U.S. Business Recovery Services --------------------------------------------- PwC US on June 3 disclosed that John Bittner and Bill Fasel have joined the firm?s U.S. Deals practice as partner and managing director, respectively, within the firm?s Business Recovery Services (BRS) group. Both Messrs. Bittner and Fasel bring extensive management consulting, financial restructuring and deal experience to the firm. ?As organizations seek to capitalize on the current economic climate and rapid market changes, we are continuing to invest in our business recovery services team in order to help organizations in challenging financial situations make the right business decisions from strategy through execution,? said Perry Mandarino, principal and PwC?s U.S. Business Recovery Services leader. ?As our restructuring practice continues to grow, we strive to strengthen our team with seasoned professionals like John and Bill who can help our clients quickly identify problems, develop viable solutions and implement them with sensitivity and precision.? Based in Dallas, Mr. Bittner brings PwC extensive experience in providing financial, operational and strategic services to distressed and underperforming corporations and their stakeholders, specifically in the construction, manufacturing, energy and retail industries. Prior to joining PwC, Mr. Bittner was a partner in Grant Thornton?s Corporate Advisory and Restructuring Services group. He also held senior level positions at Mesirow Financial Consulting and KPMG. Prior to that, Mr. Bittner served as a managing director with PwC?s BRS practice in Houston. His broad skill set adds significant capabilities to PwC?s BRS group, having established restructuring practices for professional services firms in both Houston and Dallas. He is a graduate of Texas A&M University and received his MBA from University of Michigan. Mr. Bittner is a Certified Public Accountant in Texas and a Certified Insolvency and Restructuring Advisor. Mr. Fasel joins PwC as a managing director in the Chicago office. He has over 23 years of financial advisory experience providing a unique blend of business development, strategic planning, corporate finance and restructuring expertise to multinational and middle-market clients worldwide. Mr. Fasel previously served as director and Midwest practice leader for Deloitte?s Corporate Restructuring Group, where he advised clients across industries on a range of financial advisory and distressed M&A services, including business strategy development, turnaround initiatives, liquidity management, and facilitating M&A transactions in bankruptcy proceedings and out-of-court restructurings. Prior to Deloitte, Mr. Fasel held managing director roles at various consulting firms, including Mesirow Financial Consulting and BBK Ltd. Additionally, his experience includes corporate development, investor relations and strategic planning roles with Aon Corporation and Vlasic Foods, as well as corporate finance positions with Lehman Brothers and First Chicago. Mr. Fasel received a BBA from University of Michigan and an MBA from the Kellogg School of Management at Northwestern University. PwC's Business Recovery Services practice is a leading advisor to stakeholders during complex financial restructurings, bankruptcies and turnaround situations. With its focus on broad advisory, complex financial services and crisis management, PwC provides strategic, operational and financial alternatives to preserve and restore the performance and value of businesses. With the power of its professionals around the world, PwC delivers specific industry and technical expertise with its hands-on, solutions driven approach. PwC?s Deals practitioners help corporate and private equity executives navigate transactions to increase value and returns. In today's increasingly daunting economic and regulatory environment, PwC's experienced M&A specialists assist clients on a range of transactions from smaller and mid-sized deals to the most complex transactions, including domestic and cross-border acquisitions, divestitures and spin-offs, capital events such as IPOs and debt offerings, and bankruptcies and other business reorganizations. PwC helps clients with strategic planning around their growth and investment agendas and advise on business-wide risks and value drivers in their transactions for more empowered negotiations, decision-making and execution. PwC helps clients expedite their deals, reduce their risks, capture and deliver value to their stakeholders and quickly return to business as usual. PwC's local and global deal strength is derived from over 1,400 deal professionals in 21 cities in the U.S. and over 9,800 deal professionals across a global network of firms in 75 countries. In addition, PwC's network firm PwC Corporate Finance provides investment banking services within the U.S. About the PwC Network PwC firms help organizations and individuals create the value they?re looking for. PwC is a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality in assurance, tax and advisory services. * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Sergei Bagaev Bankr. C.D. Calif. Case No. 13-13889 Chapter 11 Petition filed June 7, 2013 In re Lynndol Stalder Bankr. M.D. Fla. Case No. 13-07141 Chapter 11 Petition filed June 7, 2013 In re Bradley Winston Bankr. S.D. Fla. Case No. 13-23619 Chapter 11 Petition filed June 7, 2013 In re Brand for Less Inc. dba Brands for Less Bankr. D. Md. Case No. 13-19901 Chapter 11 Petition filed June 7, 2013 See http://bankrupt.com/misc/mdb13-19901p.pdf See http://bankrupt.com/misc/mdb13-19901c.pdf represented by: Steven H. Greenfeld, Esq. COHEN, BALDINGER & GREENFELD, LLC In re Walls Limousine Service, Inc. Bankr. N.D. Miss. Case No. 13-12358 Chapter 11 Petition filed June 7, 2013 See http://bankrupt.com/misc/msnb13-12358.pdf represented by: Robert Gambrell, Esq. GAMBRELL & ASSOCIATES, PLLC E-mail: rg@ms-bankruptcy.com In re Alicyon Corp. Bankr. E.D.N.Y. Case No. 13-73064 Chapter 11 Petition filed June 7, 2013 See http://bankrupt.com/misc/nyeb13-73064.pdf represented by: Joseph J. Fontanetta, Esq. In re W. Byrd Bankr. E.D.N.C. Case No. 13-03674 Chapter 11 Petition filed June 7, 2013 In re Stambaugh Family Trust, a Trust Bankr. M.D. Pa. Case No. 13-03041 Chapter 11 Petition filed June 7, 2013 See http://bankrupt.com/misc/pamb13-03041p.pdf See http://bankrupt.com/misc/pamb13-03041c.pdf represented by: Robert E. Chernicoff, Esq. CUNNINGHAM AND CHERNICOFF, P.C. E-mail: rec@cclawpc.com In re Sheila Martinez Infante Bankr. D. P.R. Case No. 13-04730 Chapter 11 Petition filed June 7, 2013 In re Steve?s Clean Cars, Inc. Bankr. W.D. Tex. Case No. 13-60545 Chapter 11 Petition filed June 7, 2013 See http://bankrupt.com/misc/txwb13-60545.pdf represented by: Troy J. Wilson, Esq. In re Redwater Associates, Inc. Bankr. W.D. Wash. Case No. 13-43798 Chapter 11 Petition filed June 7, 2013 See http://bankrupt.com/misc/wawb13-43798.pdf represented by: Jason Anderson, Esq. In re Delta Cummings Bankr. D. Ariz. Case No. 13-09868 Chapter 11 Petition filed June 10, 2013 In re Don Wilkinson Bankr. C.D. Calif. Case No. 13-15021 Chapter 11 Petition filed June 10, 2013 In re Jerry Austin Bankr. C.D. Calif. Case No. 13-20186 Chapter 11 Petition filed June 10, 2013 In re Luis Romero Bankr. C.D. Calif. Case No. 13-25222 Chapter 11 Petition filed June 10, 2013 In re Elisa Chieffo Bankr. N.D. Calif. Case No. 13-11157 Chapter 11 Petition filed June 10, 2013 In re Edward Crochet Bankr. E.D. La. Case No. 13-11603 Chapter 11 Petition filed June 10, 2013 In re Sandy Crochet Bankr. E.D. La. Case No. 13-11603 Chapter 11 Petition filed June 10, 2013 In re Norell Falcon-Ochoa Bankr. D. Nev. Case No. 13-15070 Chapter 11 Petition filed June 10, 2013 In re Guru Enterprises Inc. fdba Harmandir Enterprises Bankr. D. Nev. Case No. 13-15084 Chapter 11 Petition filed June 10, 2013 See http://bankrupt.com/misc/nvb13-15084.pdf represented by: Nedda Ghandi, Esq. GHANDI LAW OFFICES E-mail: nedda@ghandilaw.com In re Nasscond, Inc. Bankr. E.D.N.Y. Case No. 13-73107 Chapter 11 Petition filed June 10, 2013 See http://bankrupt.com/misc/nyeb13-73107.pdf In re Rondaxe Properties, LLC Bankr. W.D.N.Y. Case No. 13-20914 Chapter 11 Petition filed June 10, 2013 See http://bankrupt.com/misc/nywb13-20914.pdf represented by: David H. Ealy, Esq. TREVETT CRISTO SALZER & ANDOLINA, P.C. E-mail: dealy@trevettlaw.com In re New Hope Christian Church Bankr. E.D.N.C. Case No. 13-03691 Chapter 11 Petition filed June 10, 2013 See http://bankrupt.com/misc/nceb13-03691.pdf represented by: Florence A. Bowens, Esq. E-mail: fbowenslaw@aol.com In re MCK Corporation dba Tourangeau fdba Tourangeau Nor Wes Corporation Bankr. D. Ore. Case No. 13-33701 Chapter 11 Petition filed June 10, 2013 See http://bankrupt.com/misc/orb13-33701.pdf represented by: Timothy J. Conway, Esq. TONKON TORP, LLP In re Glynis Diaz Ocasio Bankr. D. P.R. Case No. 13-04789 Chapter 11 Petition filed June 10, 2013 In re H. Dilworth Bankr. E.D. Wis. Case No. 13-28043 Chapter 11 Petition filed June 10, 2013 In re 8241 Pinnacle, LLC Bankr. D. Ariz. Case No. 13-10027 Chapter 11 Petition filed June 12, 2013 See http://bankrupt.com/misc/azb13-10027.pdf represented by: Richard William Hundley, Esq. BERENS, KOZUB & KLOBERDANZ, PLC E-mail: rhundley@bkl-az.com In re RL Managment Group, LLC Bankr. E.D. Mich. Case No. 13-51849 Chapter 11 Petition filed June 12, 2013 See http://bankrupt.com/misc/mieb13-51849p.pdf See http://bankrupt.com/misc/mieb13-51849c.pdf represented by: Donald C. Darnell, Esq. DARNELL, PLLC E-mail: dondarnell@darnell-law.com In re NAFCO USA, LLC Bankr. D. Nev. Case No. 13-51183 Chapter 11 Petition filed June 12, 2013 See http://bankrupt.com/misc/nvb13-51183.pdf represented by: Jeffrey L. Hartman, Esq. HARTMAN & HARTMAN E-mail: notices@bankruptcyreno.com In re Precise Strike, LLC. Bankr. W.D. Pa. Case No. 13-22500 Chapter 11 Petition filed June 12, 2013 See http://bankrupt.com/misc/pawb13-22500.pdf represented by: Lawrence C. Bolla, Esq. QUINN BUSECK LEEMHUIS TOOHEY & KROTO, INC. E-mail: lbolla@quinnfirm.com In re Duke Investments, LLC Bankr. W.D. Pa. Case No. 13-22509 Chapter 11 Petition filed June 12, 2013 See http://bankrupt.com/misc/pawb13-22509.pdf represented by: Richard R. Tarantine, Esq. TARANTINE & ASSOCIATES, P.C. E-mail: rrt@tarantinelaw.com In re Terry Anderson Bankr. E.D. Tenn. Case No. 13-32201 Chapter 11 Petition filed June 12, 2013 In re Lynne Lewis Bankr. W.D. Wash. Case No. 13-43896 Chapter 11 Petition filed June 12, 2013 In re Eric Tabor Bankr. D. Ariz. Case No. 13-10232 Chapter 11 Petition filed June 13, 2013 In re Sachidanand Sinha Bankr. C.D. Calif. Case No. 13-15086 Chapter 11 Petition filed June 13, 2013 In re Bieberle Enterprises Inc. Bankr. M.D. Fla. Case No. 13-07304 Chapter 11 Petition filed June 13, 2013 Filed pro se In re Leslie McClain Bankr. M.D. Fla. Case No. 13-3667 Chapter 11 Petition filed June 13, 2013 In re BTN Corporation, Successor in Interest to Branton Insulations, Inc. fka Branton Insulations, Inc. fka Sea-Foam, Inc. fka Seville, Inc. Bankr. E.D. La. Case No. 13-11656 Chapter 11 Petition filed June 13, 2013 See http://bankrupt.com/misc/laeb13-11656.pdf represented by: Robert L. Marrero, Esq. Robert Marrero, LLC E-mail: marrero1035@bellsouth.net In re Mazie Holland Bankr. D. Md. Case No. 13-20148 Chapter 11 Petition filed June 13, 2013 In re Stephen Lewis Bankr. D. Nev. Case No. 13-15200 Chapter 11 Petition filed June 13, 2013 In re P&W Plus Services Inc Bankr. E.D.N.Y. Case No. 13-73167 Chapter 11 Petition filed June 13, 2013 See http://bankrupt.com/misc/nyeb13-73167.pdf represented by: Abraham Hoschander, Esq. In re Waldemar Lopez Matos Bankr. D.P.R. Case No. 13-4887 Chapter 11 Petition filed June 13, 2013 In re Ratcliffe-Baker Investment Company LLC Bankr. W.D. Wash. Case No. 13-15539 Chapter 11 Petition filed June 13, 2013 See http://bankrupt.com/misc/wawb13-15539.pdf represented by: Larry B. Feinstein, Esq. Vortman & Feinstein E-mail: feinstein2010@gmail.com In re Tariq Rana Bankr. D. Ariz. Case No. 13-10308 Chapter 11 Petition filed June 14, 2013 In re Hayward Corporation Bankr. C.D. Calif. Case No. 13-14034 Chapter 11 Petition filed June 14, 2013 See http://bankrupt.com/misc/cacb13-14034.pdf represented by: Vahid Naziri, Esq. ABBASI & ASSOCIATES, P.C. E-mail: matthew@anhlegal.com In re Stefano Marrero Bankr. C.D. Calif. Case No. 13-15139 Chapter 11 Petition filed June 14, 2013 In re Shyhshine Chen Bankr. C.D. Calif. Case No. 13-25674 Chapter 11 Petition filed June 14, 2013 In re Rotini, Inc. dba Ristorante Piccolo Bankr. D. D.C. Case No. 13-00380 Chapter 11 Petition filed June 14, 2013 See http://bankrupt.com/misc/dcb13-00380.pdf represented by: Steven H. Greenfeld, Esq. COHEN, BALDINGER & GREENFELD, LLC E-mail: steveng@cohenbaldinger.com In re Pezzo Forte, Inc. Bankr. D. D.C. Case No. 13-00381 Chapter 11 Petition filed June 14, 2013 See http://bankrupt.com/misc/dcb13-00381p.pdf See http://bankrupt.com/misc/dcb13-00381c.pdf represented by: Steven H. Greenfeld, Esq. COHEN, BALDINGER & GREENFELD, LLC E-mail: steveng@cohenbaldinger.com In re Nicholas Demint Bankr. M.D. Fla. Case No. 13-07889 Chapter 11 Petition filed June 14, 2013 In re Henry Mascagni Bankr. N.D. Miss. Case No. 13-12452 Chapter 11 Petition filed June 14, 2013 In re Pasquale Iuele Bankr. D. N.J. Case No. 13-23271 Chapter 11 Petition filed June 14, 2013 In re Bruce Graeber Bankr. E.D.N.Y. Case No. 13-43654 Chapter 11 Petition filed June 14, 2013 In re William Kostun Bankr. N.D.N.Y. Case No. 13-11540 Chapter 11 Petition filed June 14, 2013 In re William Day Bankr. D. Ore. Case No. 13-62313 Chapter 11 Petition filed June 14, 2013 In re Carl Avers Bankr. W.D. Pa. Case No. 13-10765 Chapter 11 Petition filed June 14, 2013 In re Tomas Javariz Nieves Bankr. D. P.R. Case No. 13-04942 Chapter 11 Petition filed June 14, 2013 In re Richard Lunsford Bankr. W.D. Tenn. Case No. 13-11513 Chapter 11 Petition filed June 14, 2013 In re Michael Ratcliffe Bankr. W.D. Wash. Case No. 13-15556 Chapter 11 Petition filed June 14, 2013 In re Robert Rubin Bankr. E.D.N.Y. Case No. 13-73193 Chapter 11 Petition filed June 16, 2013 In re Luke Zouvas Bankr. S.D. Calif. Case No. 13-6250 Chapter 11 Petition filed June 16, 2013 ********* 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 ***