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/raid1/www/Hosts/bankrupt/TCR_Public/130621.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 21, 2013, Vol. 17, No. 170 Headlines AK STEEL: Moody's Assigns 'B1' Rating to $30MM Debt Add-On AK STEEL: S&P Retains 'BB-' Rating on 8.75% Senior Secured Notes ALIXPARTNERS LLP: S&P Assigns 'B+' Rating to $825M Credit Facility ALL SMILES DENTAL: Seeks Lawsuit Over Spurned Suitor's $4M Claim ALLIED SYSTEM: Wins $33.5MM Replacement Loan Over Yucaipa Protest AMERICAN AIRLINES: Antitrust Clearance Unlikely Before Aug. 15 AMERICANWEST BANCORPORATION: Cappello to Reimburse $2.1MM in Fees APPLIED MINERALS: Has MOU for Distribution Agreement with Mitsui APOLLO MEDICAL: Launches Maverick Medical Group in Los Angeles ARCAPITA BANK: BNY Balks at Committee Pursuit of Arcsukuk Claims ATLAS DELAWARE: S&P Assigns 'B' CCR; Outlook Negative AZTECH RENTALS: Files for Chapter 22 in San Antonio B-G & G INVESTORS: Case Summary & 14 Unsecured Creditors BALLENGER CONSTRUCTION: Unsecureds May Get Nothing BANK OF THE CAROLINAS: Shareholders Elect Nine Directors BASHAS' INC: Court Rejects Kubicek Bid to Reinstate Suit BELVEDERE LLC: Fray's Grant Project Placed in Bankruptcy BERNARD L MADOFF: Court Sets Up Hurdle for Asset-Freeze Hearings BEST UNION: Court to Convene Confirmation Hearing on June 26 BEST UNION: Court OKs Hiring of Robert Chang as Accountant BIOSCRIP INC: Moody's Assigns B2 Rating to New $150MM Term Loan BIOSCRIP INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable BLUE COAT: S&P Lowers CCR to 'B' & Rates $40MM Facility 'B+' BOOMERANG SYSTEMS: Obtains $4.7 Million Funding Commitment BUILDERS GROUP: Proposes G.A. Carlo-Altieri as Counsel BVG AUTO: Case Summary & 13 Unsecured Creditors BVC PARTNERS: Section 341(a) Meeting Set on July 15 CASH STORE: Amends Fiscal 2012 Annual Report CELOTEX CORP: No Asbestos Indemnification for Company CHINA PRECISION: Receives Non-Compliance Notice From NASDAQ COLLINS AND WALTON: Officer Facing Pension Fund Suit COMARCO INC: Annual Shareholders' Meeting Set on Aug. 22 COMMERCIAL CAPITAL: U.S. Trustee Objects to Disclosure Statement CONCORD CAMERA: Board OKs $0.07 Apiece Liquidating Distribution CONGOLEUM CORP: Integrity Not Required to Pay Claims D & L ENERGY: Pushes for Sale of Wells, Drilling Rights DIGERATI TECHNOLOGIES: Sec. 341 Creditors' Meeting Set for July 18 DIGERATI TECHNOLOGIES: Submits List of Top Unsecured Creditors DISH NETWORK: Moody's Ratings Still on Review Despite Sprint Deal DISH NETWORK: S&P Affirms 'BB-' CCR & Removes From CreditWatch DOGWOOD PROPERTIES: Disclosure Statement Hearing Set for July 17 EASTMAN KODAK: Enters Into Exit Financing Package Agreement EASTMAN KODAK: Amends Plan to Pay Second-Lien Notes in Full EASTMAN KODAK: Court Approves Settlement with U.K. Pension Plan EASTMAN KODAK: Partners with NY on Eastman Business Park ELBIT IMAGING: Adjusts Plan of Arrangement Over Expert Opinion ELEPHANT TALK: Has Until Aug. 31 to Regain NYSE Compliance EXIDE TECHNOLOGIES: Amends Fiscal 2013 Form 10-K EXIDE TECHNOLOGIES: Has Diverse Creditors' Committee EXIDE TECHNOLOGIES: Lowenstein Sandler to Represent Creditors EXIDE TECHNOLOGIES: DIP Agent's Fee Letter Filed Under Seal FINJAN HOLDINGS: Star Bird Held 6.5% Equity Stake at June 3 FLINTKOTE COMPANY: Case Re-Assigned to Judge Mary F. Walrath FREESEAS INC: Receives Non-Compliance Notice From NASDAQ GENERAL STEEL: Incurs $231.9 Million Net Loss in 2012 GLOBAL BRASS: Moody's Affirms B2 CFR; Changes Outlook to Stable GMX RESOURCES: Directors T.J. Boismier and Mike Cook Resign GREYSTONE LOGISTICS: Files Schedule 13E-3 with SEC GROUP HEALTH: Fitch Affirms 'BB+' Issuer Default Rating HASH LANE: Business as Usual for Lakeridge Golf Course HELICOS BIOSCIENCES: Court Approves IP License Agreements HIGH MAINTENANCE: Involuntary Chapter 11 Case Summary HJ HEINZ: Moody's Downgrades Debt Instrument Ratings After LBO IDEARC INC: Verizon Scores Complete Victory Over Creditors ILLINOIS VALLEY: Case Summary & 20 Largest Unsecured Creditors INOVA TECHNOLOGY: Investors' Ownership Unchanged After Split INTEGRITY INSURANCE: Not Required to Pay Congoleum Claims INTERSTATE BAKERIES: Premium Food Must Return $235K IXI MOBILE: SEC Revokes Registration of Securities JAMES RIVER: Moody's Caa2 CFR Unchanged Following Exchange Offer JEFFERSON COUNTY: Proposed Financing Too Costly LIGHTSQUARED INC: Lenders Balk at Violations of 'Exclusivity' Deal LONE PINE: Gets Notice of Failure to Satisfy NYSE Listing Standard LOU PEARLMAN: Trustee Doesn't Have Backstreet's Back on Claims MARKETING WORLDWIDE: Suspending Filing of Reports with SEC MARMC TRANSPORTATION: lTC Electrical's Claim Allowed METEX MFG: Can Participate in The Home Insurance Proceeding MILAGRO OIL: Exchange Offer Expiration Extended Until Aug. 30 MORGANS HOTEL: Stockholders Elect Seven Directors MOORE FREIGHT: Has Until July 25 to File Ch. 11 Plan MOSS FAMILY: May Use Cash Collateral Thru Aug. 30 MPF HOLDING: Preference Suit Against Mustang Dismissed MPG OFFICE: Sells U.S. Bank Tower & Westlawn Garage for $367.5MM MUNICIPAL MORTGAGE: Extends Forbearance with Merill Until Aug. 1 MUSCLEPHARM CORP: Has 1.7 Million Common Shares Resale Prospectus NATIONAL ENVELOPE: Proposes Richards Layton as Counsel NATIONAL ENVELOPE: Proposes Epiq as Administrative Advisor NATIONAL ENVELOPE: Wants Aug. 9 Extension for Schedules NATIONAL ENVELOPE: Proposes PwC as Financial Advisor NATIONAL TELEREP: Case Summary & 20 Largest Unsecured Creditors NAVISTAR INTERNATIONAL: Rights Agreement to Expire by Aug. 31 NEXSTAR BROADCASTING: Moody's Rates Proposed Debt Facility 'Ba3' NORTEL NETWORKS: Announces Closure of Share Transfer Registers NORTH TEXAS HOUSING: S&P Removes 'BB+' Rating From CreditWatch Neg OLIN CORP: S&P Raises Corp. Credit Rating to 'BB+'; Outlook Stable ONCURE HOLDINGS: Section 341(a) Meeting Scheduled for Aug. 2 ORCHARD SUPPLY: Bankruptcy Court Approves First Day Motions ORCHARD SUPPLY: Says Equity Holders Out of the Money ORECK CORP: Posts $5M Deficit During Last Three Weeks of May PARKLAND II: Updated Case Summary & Creditors' Lists PATHEON INC: S&P Revises Outlook to Stable & Affirms 'B+' CCR PATRIOT COAL: Knighthead, Aurelius Negotiate Funding Plan PATRIOT COAL: Can Employ Greenberg Traurig as Spl. Lit. Counsel PENSON WORLDWIDE: Obtains Court Rulings; To Reject More Contracts PENSON WORLDWIDE: Files Amended Schedules of Assets and Debts PENSON WORLDWIDE: D&O Expense Reimbursement Sought PREMIER INVESTMENTS: Case Summary & 7 Unsecured Creditors PREMIER NW: Default Judgment Granted In Favor of Franchisor PURIFIED RENEWABLE: Ethanol Plant Goes Up for Auction Aug. 8 QUALITY DISTRIBUTION: Enters Into New $17.5MM Term Loan Facility RADIENT PHARMACEUTICALS: Final Agreement with UNI Pharma READER'S DIGEST: Affiliate Seeks More Time to File Ch. 11 Plan REFCO INC: Mayer Brown Settles Claims It Aided $1.5B Fraud REVSTONE INDUSTRIES: Creditor Wants 'Exclusivity' Deal Unsealed RITE AID: Plans to Offer $400 Million Senior Notes Due 2021 RITE AID: New $810MM Sr. Guaranteed Notes Get Moody's Caa2 Rating ROOFING SUPPLY: High Leverage Prompts Moody's to Cut CFR to 'B3' SCOOTER STORE: Committee Can Employ CBIZ as Financial Advisors SCOOTER STORE: Can Hire AP Services' Young as CRO SEA HORSE REALTY: Allowed Limited Disbursements Pending Appeal SEQUENOM INC: EVP Strategic Planning to Work Part-Time SOUND SHORE: U.S. Attorney Objects to $33-Mil. DIP Loan SPARKS TOURISM: Moody's Affirms 'B2' Rating on Series A Bonds SPIRIT REALTY: Declares Cash Dividend for the Second Quarter STABLEWOOD SPRINGS: Resort to Emerge From Chapter 11 STRATUS MEDIA: $1.3 Million Notes Converted to 22.5MM Shares SWEISS PETROL: Case Summary & 20 Largest Unsecured Creditors TRANSDIGM INC: S&P Lowers Corp. Credit Rating to B; Outlook Stable TRENDSET INFORMATION: AFS Buys Biz for $1.14 Million UNIGENE LABORATORIES: Victory Park Sells Collateral to Lenders UNIVERSALLY CORRECT: Case Summary & 20 Largest Unsecured Creditors USEC INC: Gets Add'l $20MM Funding From Government for AC Project VALEANT PHARMACEUTICALS: S&P Lowers Corp. Credit Rating to 'BB-' VALEANT PHARMACEUTICALS: Moody's Rates New Sr. Unsec. Notes 'B1' VIGGLE INC: Hits 3 Million Registered Users VITESSE SEMICONDUCTOR: Columbia Pacific Holds 9.8% Equity Stake VISUALANT INC: Closes $5 Million in Equity Funding VISUALANT INC: Ronald Erickson Held 9.6% Equity Stake at June 14 VUZIX CORP: Offering $5 Million Common Shares and Warrants WALTER ENERGY: Moody's Retains B2 Corp. Family Rating WAVE SYSTEMS: Amends 1.8-Mil. Class A Shares Resale Prospectus WEST CORP: S&P Raises CCR to 'BB-' & Removes from CreditWatch WESTMORELAND COAL: Imminent Danger Order Lifted at Rosebud Mine WITTENBERG UNIVERSITY: Moody's Lowers Rating Two Notches to 'B1' WSG CHARLOTTESVILLE: Managers Liable to $2.48MM Lehman Debt Z TRIM HOLDINGS: Files Copy of Investor Presentation ZHONE TECHNOLOGIES: Gets NASDAQ Delisting Determination Letter * New York State Announces Plan to Help Cash-Strapped Cities * Monitor Finds Lenders Failing Terms of Settlement * SEC Says It Will Seek Admission of Wrongdoing More Often * Mortgage-Bond Auction Failures Reach Most in 2013 as Prices Drop * Lawyer Claims Wells Fargo Sold Risky Program as Safe * Owner-Vacated Properties Represent 20% of Foreclosures * BOOK REVIEW: The Oil Business in Latin America: The Early Years ********* AK STEEL: Moody's Assigns 'B1' Rating to $30MM Debt Add-On ---------------------------------------------------------- Moody's Investors Service assigned a B1 rating to AK Steel's $30 million add-on to its 8.750% senior secured notes due 2018. The add-on, being done through a private offering, will have the same terms as the existing notes and will be treated as a single series. All other ratings are unchanged. The outlook is negative Ratings Rationale: AK Steel's B2 corporate family rating reflects the weak debt protection metrics and increased leverage evidenced by the company as challenging conditions in the US steel industry continue to negatively impact the level of operating improvement that can be achieved and sustained. The rating captures our expectation that given the headwinds facing the industry and slowing economic fundamentals, performance in 2013 will not be materially improved over 2012 levels, which themselves were below 2011 levels. The rating also captures our expectation that the company's cost position challenges will ease somewhat over the next several quarters given the declines that have been seen in iron ore and coking coal prices, although this improvement is unlikely to make a material change given continued price challenges. However, the rating also considers AK Steel's position as a mid- tier steel producer. The company's business mix including a meaningful level of value added products, including coated, electrical and stainless products, as well as its strong contract position are supporting factors in the rating. Nonetheless, given an EBIT/interest ratio of 0.2x and debt/EBITDA ratio of 10.7x for the twelve months ended March 31, 2013 (using Moody's standard adjustments), the corporate family rating is weakly positioned at the B2 rating. The negative outlook reflects our view that industry risks continue to the downside. Should hot rolled prices and utilization levels fall much below current run rates or appear sustainable at only about $600/ton and 70% respectively, the company's financial profile would deteriorate further. The principal methodology used in this rating was the Global Steel Industry Methodology published in October 2012. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in West Chester, Ohio, AK Steel produces flat-rolled carbon steels, including coated, cold-rolled and hot-rolled products, as well as specialty stainless and electrical steels. Revenues for the twelve months ended March 31, 2013 were $5.8 billion. AK STEEL: S&P Retains 'BB-' Rating on 8.75% Senior Secured Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services said that its 'BB-' issue-level rating on AK Steel Corp.'s 8.75% senior secured notes due 2018 is unchanged following the company's proposed $30 illion add-on. The recovery rating is '1', indicating S&P's expectation very high (90%-100%) recovery in the event of a payment default. The incremental proceeds will be used for general corporate purposes. The 'B' corporate credit rating reflects the combination of the company's "weak" business risk profile and "highly leveraged" financial risk profile. AK Steel has good market positions in a number of value-added steel products, exposure to the currently favorable automotive market, and "strong" liquidity. The company has a somewhat higher value-added product mix than many of its peers, as less than 20% of its shipments come from commodity steel products. Still, its relatively small size, high fixed costs as an integrated steelmaker, limited diversity with exposure to cyclical end markets, significant legacy costs, and very weak credit measures offset these strengths. RATINGS LIST AK Steel Holding Corp. Corporate Credit Rating B/Stable/-- AK Steel Corp. Senior Secured Debt BB- Recovery Rating 1 ALIXPARTNERS LLP: S&P Assigns 'B+' Rating to $825M Credit Facility ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned AlixPartners LLP's proposed $750 million term loan B due 2020 and $75 million revolving credit facility due 2018 its 'B+' issue-level rating (at the same level as the corporate credit rating), with a recovery rating of '3', indicating S&P's expectation for meaningful (50%-70%) recovery for lenders in the event of a payment default. At the same time, S&P assigned the company's proposed $250 million second-lien term loan due 2021 a 'B-' issue-level rating (two notches below the corporate credit rating), with a recovery rating of '6', indicating S&P's expectation for negligible (0%-10%) recovery for lenders in the event of a payment default. All existing ratings are unchanged. The outlook is stable. The company will use proceeds from the issuance to refinance existing debt and to fund a $191 million special dividend to shareholders. Pro forma for the debt issuance, adjusted debt leverage increases to 6.4x from 5.3x actual as of March 31, 2013. S&P's threshold leverage for the current 'B+' corporate credit rating remains at 6.5x. Under S&P's base-case scenario, it has assumed that AlixPartners will experience low- to mid-single-digit percentage growth over the next two years as growth in international and other practices compensates for slower growth or potential declines in the restructuring practice. This scenario would result in debt leverage decreasing to the low-6x area by the end of 2013. Still, the transaction raises leverage to just below S&P's leverage threshold for the rating. As a result, any additional leveraging transactions or unexpected operational weakness over the near term would prompt S&P to consider revising its rating outlook to negative or lowering the rating. S&P continues to view the financial risk profile as "highly leveraged," reflecting adjusted leverage of 6.4x and the company's small to midsize revenue and cash flow base, which opens the possibility of meaningful swings in leverage during a period of fluctuating demand. S&P characterizes the company's business profile as "fair" (based on its criteria), because it faces keen competition for consulting services and some exposure to business cycles. AlixPartners' turnaround and restructuring practice provides a degree of counter-cyclicality. The rating and outlook are predicated on leverage reduction from the current level of 6.4x over the near term. This reflects S&P's expectation that AlixPartners will continue to experience moderate overall growth over the next 12-18 months. S&P could lower the rating to 'B' if the demand for restructuring services declines and AlixPartners is unable to expand other practices to offset the decline, resulting in debt leverage exceeding 6.5x on a prolonged basis and normalized discretionary cash flow declining to approach breakeven. S&P could also lower the rating if the company were to take on any additional debt leverage from current levels. Given the company's high debt leverage and private equity ownership, S&P is unlikely to raise the rating on AlixPartners over the medium term because of its concerns regarding the company's financial policy, as evidenced by the proposed transaction. RATINGS LIST AlixPartners LLP Corporate Credit Rating B+/Stable/-- New Rating AlixPartners LLP $750M term loan B due 2020 B+ Recovery Rating 3 $75M revolving credit facility due 2018 B+ Recovery Rating 3 $250M second-lien term loan due 2021 B- Recovery Rating 6 ALL SMILES DENTAL: Seeks Lawsuit Over Spurned Suitor's $4M Claim ---------------------------------------------------------------- Marie Beaudette writing for Dow Jones' DBR Small Cap reports that Texas dental chain All Smiles Dental Center Inc. is asking a bankruptcy judge to consider STX Healthcare Management Services Inc.'s $4 million claim stemming from a failed sale deal as part of lawsuit in its Chapter 11 case. About All Smiles Dental Center All Smiles Dental Center, Inc., and an affiliate sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 12-32924) in their hometown in Dallas, Texas. All Smiles Dental Center is a dental practice management service organization supporting 33 dental and orthodontic practices within Texas. The practices are at 22 different physical locations spanning the Dallas, Fort Worth, and Houston metropolitan areas. All Smiles Dental Professionals, P.C. ("PC") employs the clinical staff and provides all dental and orthodontic services at these practices. Richard J. Malouf, D.D.S. founded All Smiles in 2002. In June 2010, ASDC Holdings, LLC acquired 80% of the outstanding equity interest in All Smiles. Dr. Malouf resigned from the board as of April 19, 2012. All Smiles tapped Kane Russell Coleman & Logan PC as attorney, and Turn Works LLC and Neil Minihane as consultant. ALLIED SYSTEM: Wins $33.5MM Replacement Loan Over Yucaipa Protest ----------------------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that a Delaware bankruptcy judge approved a $33.5 million replacement post- petition loan and sale plan for Allied Systems Holdings Inc. over the objection of original lender Yucaipa Cos. Ltd., which had argued that the terms gave the replacement private equity lenders too much leverage. According to the report, Yucaipa had put forward alternative proposals hours before oral arguments over the matter began Wednesday, but U.S. Bankruptcy Judge Christopher S. Sontchi gave the nod to the replacement debtor-in-possession financing facility from Black Diamond Capital Management LLC and Spectrum Investment Partners. About Allied Systems BDCM Opportunity Fund II, LP, Spectrum Investment Partners LP, and Black Diamond CLO 2005-1 Adviser L.L.C., filed involuntary petitions for Allied Systems Holdings Inc. and Allied Systems Ltd. (Bankr. D. Del. Case Nos. 12-11564 and 12-11565) on May 17, 2012. The signatories of the involuntary petitions assert claims of at least $52.8 million for loan defaults by the two companies. Allied Systems, through its subsidiaries, provides logistics, distribution, and transportation services for the automotive industry in North America. Allied Holdings Inc. previously filed for chapter 11 protection (Bankr. N.D. Ga. Case Nos. 05-12515 through 05-12537) on July 31, 2005. Jeffrey W. Kelley, Esq., at Troutman Sanders, LLP, represented the Debtors in the 2005 case. Allied won confirmation of a reorganization plan and emerged from bankruptcy in May 2007 with $265 million in first-lien debt and $50 million in second- lien debt. The petitioning creditors said Allied has defaulted on payments of $57.4 million on the first lien debt and $9.6 million on the second. They hold $47.9 million, or about 20% of the first-lien debt, and about $5 million, or 17%, of the second-lien obligation. They are represented by Adam G. Landis, Esq., and Kerri K. Mumford, Esq., at Landis Rath & Cobb LLP; and Adam C. Harris, Esq., and Robert J. Ward, Esq., at Schulte Roth & Zabel LLP. Allied Systems Holdings Inc. formally put itself and 18 subsidiaries into bankruptcy reorganization June 10, 2012, following the filing of the involuntary Chapter 11 petition. The Company is being advised by the law firms of Troutman Sanders, Gowling Lafleur Henderson, and Richards Layton & Finger. The bankruptcy court process does not include captive insurance company Haul Insurance Limited or any of the Company's Mexican or Bermudan subsidiaries. The Company also announced that it intends to seek foreign recognition of its Chapter 11 cases in Canada. An official committee of unsecured creditors has been appointed in the case. The Committee consists of Pension Benefit Guaranty Corporation, Central States Pension Fund, Teamsters National Automobile Transporters Industry Negotiating Committee, and General Motors LLC. The Committee is represented by Sidley Austin LLP. Yucaipa Cos. has 55 percent of the senior debt and took the position it had the right to control actions the indenture trustee would take on behalf of debt holders. The state court ruled in March 2013 that the loan documents didn't allow Yucaipa to vote. In March, the bankruptcy court also gave the official creditors' committee authority to sue Yucaipa. The suit includes claims that the debt held by Yucaipa should be treated as equity or subordinated so everyone else is paid before the Los Angelesbased owner. The judge is allowing Black Diamond to participate in the lawsuit against Yucaipa and Allied directors. AMERICAN AIRLINES: Antitrust Clearance Unlikely Before Aug. 15 -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that AMR Corp. and US Airways Group Inc. aren't likely to receive government antitrust clearance for their merger until after AMR, the parent of American Airlines Inc., holds a confirmation hearing on Aug. 15 for approval of the reorganization plan. Diane Bartz, writing for Reuters, reported that two U.S. lawmakers with antitrust oversight have urged the Obama administration to carefully review a planned merger of American Airlines and US Airways Group to ensure that it will not lead to higher prices for air travelers. Senior executives for US Airways and American Airlines told a Senate subcommittee that they shouldn't have to divest aircraft slots as part of their planned $11 billion merger, while lawmakers and others expressed concerns about overconsolidation at Reagan National Airport and labor unrest among US Airways pilots, according to a report by Jake Simpson of BankruptcyLaw360. According to Reuters, Senator Amy Klobuchar, who chairs the Senate Judiciary Committee's antitrust subcommittee, and Mike Lee, the top Republican on the panel, said the deal would mean the top four U.S. airlines would control nearly 90 percent of the U.S. market, the report said. The pair acknowledged in the letter that there could be efficiencies associated with the deal but also noted concern that flight costs could go up or customer service could deteriorate, the report added. "We anticipate that your analysis will include, as it should, a careful examination of whether divestiture of slots at Reagan National (Airport) is necessary to ensure that consumers continue to benefit from robust competition at this airport," the lawmakers added, the Reuters report cited. According to the Law360 report, the Senate Subcommittee on Aviation Operations, Safety and Security hearing included American Airlines general counsel Gary Kennedy and US Airways CEO Douglas Parker. 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). AMERICANWEST BANCORPORATION: Cappello to Reimburse $2.1MM in Fees ----------------------------------------------------------------- Bankruptcy Judge Patricia C. Williams issued a Report and Recommendation granting, in part, and denying, in part, AmericanWest Bank's Motion for Award of Attorney's Fees in the case, CAPPELLO CAPITAL CORP., Plaintiff(s), v. AMERICANWEST BANK, et al., Defendant(s), DC No. 11-CV-0449-LRS, No. 10-06097-PCW11, Adversary No. 11-80323-PCW (Bankr. E.D. Wash.). AmericanWest Bank seeks reimbursement of attorney's fees and expenses through 2012 of $4,204,470. The components of that request are fees and expenses paid to the law firm of Davis Wright Tremaine, counsel for AmericanWest Bank, in the amount of $2,257,345, and fees and expenses paid to the law firm for co- defendant Sandler O'Neill and Partners, LP in the amount of $1,183,816. The latter were paid pursuant to AmericanWest Bank's duty to defend and indemnify Sandler from claims such as those brought by Cappello Capital Corporation. AmericanWest also paid $364,203 to Orange Legal, the professional document search and retention firm, which assisted in the document production related to the lawsuit. Also included is interest from the date each attorney's fee invoice was paid through February 21, 2013, at the rate of 10% per annum, which totals $399,104. AmericanWest also seeks to increase the amount of the reimbursement requested from Cappello to the extent additional fees and expenses were and are incurred after these dates. According to Judge Williams, AmericanWest is entitled to obtain reimbursement of its attorney's fees and costs from plaintiff. The defendant is the prevailing party, the contract does not limit or cap the award of fees, and the fees are reasonable with certain exceptions. Judge Williams says the portion of the fees incurred by Sandler and paid by AmericanWest ($1,183,816.45) does not qualify for reimbursement. Nor do any legal fees qualify which represent representation of Starbuck and SKBHC, which is estimated to be $338,601.80. The request for costs of $364,203.90 paid to Orange Legal is recoverable from plaintiff, but must be reduced to reflect that some of the Orange Legal services were provided on behalf of SKBHC or Starbuck for a reduction of $54,630.59. The judge says the contract between plaintiff and defendant did not provide for accrual of interest until a determination was made that fees could be recovered and the amount of the recovery was determined. Once those determinations are made, the fees are awarded and interest begins to accrue at 10%. The following calculations evidence the conclusions set forth in the report and recommendation: Attorney's Fee Request $4,204,470.29 Disallowed Sandler Fees $1,183,816.45 Disallowed Starbuck/SKBHC Fees $338,601.80 Disallowed Orange Legal Costs $54,630.59 Disallowed Interest through 2/21/13 $399,104.58 Disallowed Westlaw Charges $103,169.00 Disallowed Second Adversary Fees $20,000.00 Disallowed Re: Automatic Stay $2,000.00 Disallowed Re: Erroneous Entries/Mistakes $1,000.00 ------------- TOTAL FEES & EXPENSES AWARDED: $2,102,147.87 The case is currently before the District Court. On March 29, District Judge Lonny R. Suko referred AmericanWest Bank's Motion for Award of Attorney's Fees to the Bankruptcy Court. A copy of Judge Williams' June 17, 2013 Report And Recommendation is available at http://is.gd/3hyBGffrom Leagle.com. About AmericanWest Bancorporation Headquartered in Spokane, Washington, AmericanWest Bancorporation (OTC BB: AWBC) -- http://www.awbank.net/-- was a bank holding company whose principal subsidiary was AmericanWest Bank, which included Far West Bank in Utah operating as an integrated division of AmericanWest Bank. AmericanWest Bank was a community bank with 58 financial centers located in Washington, Northern Idaho and Utah. AmericanWest Bancorporation filed for Chapter 11 protection (Bankr. E.D. Wash. Case No. 10-06097) on Oct. 28, 2010. The banking subsidiary was not included in the Chapter 11 filing. Christopher M. Alston, Esq., and Dillon E. Jackson, Esq., at Foster Pepper Shefelman PLLC, in Seattle, Washington, serve as bankruptcy counsel. G. Larry Engel, Esq., at Morrison & Foerster LLP, also serves as counsel. The Debtor estimated assets of $1 million to $10 million and debts of $10 million to $50 million in its Chapter 11 petition. AmericanWest Bancorporation's estimates exclude its banking unit's assets and debts. In its Form 10-Q filed with the Securities and Exchange Commission before the Petition Date, AmericanWest Bancorporation reported consolidated assets -- including its bank unit's -- of $1.536 billion and consolidated debts of $1.538 billion as of Sept. 30, 2010. In December 2010, AmericanWest completed the sale of all outstanding shares of AmericanWest Bank to a wholly owned subsidiary of SKBHC Holdings LLC, in a transaction approved by the U.S. Bankruptcy Court. The bank subsidiary was sold to SKBHC Holdings Inc. for $6.5 million cash. APPLIED MINERALS: Has MOU for Distribution Agreement with Mitsui ---------------------------------------------------------------- Applied Minerals, Inc., has entered into a Memorandum of Understanding to form an agreement with Mitsui Plastics, Inc., to market, sell, and distribute its DragoniteTM Halloysite Clay and Iron Oxide globally. Mitsui Plastics, Inc., utilizes an extensive international sales force and infrastructure to serve the worldwide plastics market through the distribution of a full range of plastics and plastic additives, modifiers, and advanced materials. The agreement contemplated by the MOU includes a distribution agreement covering South and Central America, Europe, Middle East, Africa, and Asia and an agency agreement covering North America. The distribution and agency agreements will be on a non-exclusive basis and will include Halloysite Clay and Iron Oxide products under Applied Minerals' branding. Andre Zeitoun, CEO of Applied Minerals commented, "We are proud that our Dragonite Halloysite Clay and Iron Oxide products have been chosen by Mitsui Plastics' marketing, sales, and distribution business. We believe this contemplated agreement will help accelerate the penetration of our products into several of our target markets." Mr. Zeitoun continued, "In particular, we are optimistic about penetrating the $5.4 billion global flame retardant market for which we continue to see strong interest and demand for Dragonite as a mineral-based alternative to current brominated offerings. We look forward to teaming up with a first- class global distributor like Mitsui Plastics and are excited for the opportunity that lies ahead." About Applied Minerals New York City-based Applied Minerals, Inc. (OTC BB: AMNL) is a leading global producer of halloysite clay used in the development of advanced polymer, catalytic, environmental remediation, and controlled release applications. The Company operates the Dragon Mine located in Juab County, Utah, the only commercial source of halloysite clay in the western hemisphere. Halloysite is an aluminosilicate clay that forms naturally occurring nanotubes. The Company reported a net loss attributable to the Company of $7.48 million in 2011, a net loss attributable to the Company of $4.76 million in 2010, and a net loss attributable to the Company of $6.76 million in 2009. The Company's balance sheet at March 31, 2013, showed $10.52 million in total assets, $2.75 million in total liabilities, and $7.77 million in total stockholders' equity. Going Concern The Company has incurred material recurring losses from operations. At March 31, 2012, the Company had a total accumulated deficit of approximately $43,084,500. For the three months ended March 31, 2012, and 2011, the Company sustained net losses from exploration stage before discontinued operations of approximately $4,056,700 and $1,695,100, respectively. The Company said that these factors indicate that it may be unable to continue as a going concern for a reasonable period of time. The Company's continuation as a going concern is contingent upon its ability to generate revenue and cash flow to meet its obligations on a timely basis and management's ability to raise financing or dispose of certain non-core assets as required. If successful, this will mitigate the factors that raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning At Dec. 31, 2011, and 2010, the Company had accumulated deficits of $39,183,632 and $31,543,411, respectively, in addition to limited cash and unprofitable operations. For the year ended Dec. 31, 2011, and 2010, the Company sustained net losses before discontinued operations of $7,476,864 and $4,891,525, respectively. As of March 15, 2012, the Company has not commercialized the Dragon Mine and has had to rely on cash flow generated from the sale of stock and convertible debt to fund its operations. If the Company is unable to fund its operations through the commercialization of the Dragon Mine, the sale of equity or debt or a combination of both, it may have to file bankruptcy. APOLLO MEDICAL: Launches Maverick Medical Group in Los Angeles -------------------------------------------------------------- Apollo Medical Holdings, Inc., has launched a new operating unit, Maverick Medical Group, an Independent Physician Association serving Medicare, Dual Eligible, Commercial and Medi-Cal patients residing in the Greater Los Angeles area. "The launch of Maverick IPA is both a logical and strategic complement to our existing businesses. Maverick enables ApolloMed to more fully capture value from our hospitalists' high quality, cost effective performance, as well as to leverage the growing ApolloMed ACO care community," stated Warren Hosseinion, M.D., chief executive officer of ApolloMed. Maverick is an equity-sharing IPA providing physicians with the support to meet the challenges inherent in the operation of individual physician practices. Maverick operates under full and professional risk contracts with health plans through its network of over 150 Primary Care Physicians and Specialist physicians. Maverick offers its physician partners a full complement of provider benefits, including: * IPA equity ownership with no buy-in required * Competitive monthly capitation payments * Opportunities to participate on the IPA Board and Committees * Access to all financial reporting, ensuring optimal transparency * Positioned for the Dual-Eligible Pilot Program in Los Angeles County Maverick has succeeded in contracting for Medicare Advantage, Special Needs, Commercial and Medi-Cal HMOs serving the Greater Los Angeles market. Committed to delivering superior coordinated care and a positive patient-physician experience, Maverick will provide its members with direct access to Specialists; transportation for its senior members; a dedicated, toll-free "Senior Line" answered by a live person; comprehensive health and wellness education and preventative care scheduling assistance; multi-lingual/multi-cultural customer service representatives; multiple laboratory draw centers and urgent care centers; and access to local contracted hospitals. Q1 2014 Results Apollo Medical reported a net loss of $849,115 on $2.44 million of net revenues for the three months ended April 30, 2013, as compared with a net loss of $157,356 on $1.63 million of net revenues for the same period during the prior year. As of April 30, 2013, the Company had $3.38 million in total assets, $4.32 million in total liabilities and $934,919 total stockholders' deficit. ApolloMed CEO Warren Hosseinion, M.D. stated, "Our strong revenue growth in the first fiscal quarter points to the success we continue to achieve in executing our growth strategies and tactical expansion initiatives - all of which are centered on establishing ApolloMed as a top-tier performing integrated healthcare company in the rapidly evolving healthcare industry." Continuing, he added, "With Accountable Care Organizations expected to play a significant role in reshaping how care is delivered in this country, ApolloMed ACO is hard at work developing innovative, coordinated care models that best leverage the noted hospitalist experience and expertise and the strength and depth of our newly launched Independent Physician Association, Maverick Medical Group. We believe fiscal 2014 will indeed prove to be a banner year for ApolloMed and based on our performance, thus far, we're off to a very good start." A copy of the press release is available for free at: http://is.gd/hVHzP2 Correction The Company has amended its prior report on Form 8-K to correct an inadvertent error that was contained in Item 5.02 of the original filing. The Original Filing incorrectly noted that Mr. David Schmidt was entitled to receive a grant of 400,000 restricted shares of the Company's common stock for his Board service; whereas, Mr. Schmidt is entitled to receive a grant of options to acquire 400,000 common shares of the Company's common stock. About Apollo Medical Glendale, Calif.-based Apollo Medical Holdings, Inc., provides hospitalist services in the Greater Los Angeles, California area. Hospitalist medicine is organized around the admission and care of patients in an inpatient facility such as a hospital or skilled nursing facility and is focused on providing, managing and coordinating the care of hospitalized patients. Kabani & Company, Inc., in Los Angeles, California, issued a "going concern qualification on the consolidated financial statements for the fiscal year ended Jan. 31, 2013. The independent auditors noted that the Company had a loss from operations of $2,078,487 for the year ended Jan. 31, 2013, and had an accumulated deficit of $11,022,272 as of Jan. 31, 2013. These factors raise substantial doubt about the Company's ability to continue as a going concern. Apollo Medical reported a net loss of $8.90 million on $7.77 million of net revenues for the year ended Jan. 31, 2013, as compared with a net loss of $720,346 on $5.11 million of net revenues for the year ended Jan. 31, 2012. As of April 30, 2013, the Company had $3.38 million in total assets, $4.32 million in total liabilities and a $934,919 total stockholders' deficit. ARCAPITA BANK: BNY Balks at Committee Pursuit of Arcsukuk Claims ---------------------------------------------------------------- BNY Mellon Corporate Trustee Services Ltd., as delegate on behalf of Arcsukuk (2011-1) Limited, objects to a motion of the Official Committee of Unsecured Creditors for leave, standing and authority to prosecute certain claims on behalf of the Debtors' estates against three banks and trustees Arcsukuk (2011-1) Limited and BNY Mellon. BNY Mellon says the Committee fails to demonstrate that the avoidance actions against three banks -- Al Baraka Islamic Bank, Tadhamon Capital, and Bahrain Islamic Bank -- and the trustees is in the "best interest of the estate". BNY says that the Committee also fails to demonstrate that its pursuit of the avoidance actions is necessary and beneficial to the fair and efficient resolution of the bankruptcy proceedings. BNY Mellon relates that the Committee's prosecution of these claims would be "wasteful and inefficient" because all of the information relevant to these claims is in the Reorganized Debtors' possession. BNY Mellon also points out that under the Debtors' confirmed Chapter 11 plan, the reorganized Debtors will have the right to evaluate and prosecute the Arcsukuk claims to the extent preserved. As reported in the TCR on June 5, 2013, the Committee in justifying pursuit of the claims, says the estates may recover more than $33 million on account of the Placement Claims, may reduce the estates' liabilities by up to $100 million in connection with the Arcsukuk Claims, and may recover more than $1.2 million on account of the preference claim. "The costs that the Committee will likely incur in litigating the Claims are relatively minor by comparison," the Committee avers. A copy of the motion is available at: http://bankrupt.com/misc/arcapita.doc1197.pdf About Arcapita Bank Arcapita Bank B.S.C., also known as First Islamic Investment Bank B.S.C., along with affiliates, filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 12-11076) in Manhattan on March 19, 2012. The Debtors said they do not have the liquidity necessary to repay a US$1.1 billion syndicated unsecured facility when it comes due on March 28, 2012. Falcon Gas Storage Company, Inc., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-11790) on April 30, 2012. Falcon Gas is an indirect wholly owned subsidiary of Arcapita that previously owned the natural gas storage business NorTex Gas Storage Company LLC. In early 2010, Alinda Natural Gas Storage I, L.P. (n/k/a Tide Natural Gas Storage I, L.P.), Alinda Natural Gas Storage II, L.P. (n/k/a Tide Natural Gas Storage II, L.P.) acquired the stock of NorTex from Falcon Gas for $515 million. Arcapita guaranteed certain of Falcon Gas' obligations under the NorTex Purchase Agreement. The Debtors tapped Gibson, Dunn & Crutcher LLP as bankruptcy counsel, Linklaters LLP as corporate counsel, Towers & Hamlins LLP as international counsel on Bahrain matters, Hatim S Zu'bi & Partners as Bahrain counsel, KPMG LLP as accountants, Rothschild Inc. and financial advisor, and GCG Inc. as notice and claims agent. Milbank, Tweed, Hadley & McCloy LLP represents the Official Committee of Unsecured Creditors. Houlihan Lokey Capital, Inc., serves as its financial advisor and investment banker. Founded in 1996, Arcapita is a global manager of Shari'ah- compliant alternative investments and operates as an investment bank. Arcapita is not a domestic bank licensed in the United States. Arcapita is headquartered in Bahrain and is regulated under an Islamic wholesale banking license issued by the Central Bank of Bahrain. The Arcapita Group employs 268 people and has offices in Atlanta, London, Hong Kong and Singapore in addition to its Bahrain headquarters. The Arcapita Group's principal activities include investing on its own account and providing investment opportunities to third-party investors in conformity with Islamic Shari'ah rules and principles. The Arcapita Group had roughly US$7 billion in assets under management. On a consolidated basis, the Arcapita Group owns assets valued at roughly US$3.06 billion and has liabilities of roughly US$2.55 billion. The Debtors owe US$96.7 million under two secured facilities made available by Standard Chartered Bank. Arcapita explored out-of-court restructuring scenarios but was unable to achieve 100% lender consent required to effectuate the terms of an out-of-court restructuring. Subsequent to the Chapter 11 filing, Arcapita Investment Holdings Limited, a wholly owned Debtor subsidiary of Arcapita in the Cayman Islands, issued a summons seeking ancillary relief from the Grand Court of the Cayman Islands with a view to facilitating the Chapter 11 cases. AIHL sought the appointment of Zolfo Cooper as provisional liquidator. As reported in the TCR on Jun 19, 2013, the Bankruptcy Court for the Southern District of New York entered its Findings of Fact, Conclusions of Law, and Order confirming the Second Amended Joint Chapter 11 Plan of Reorganization of Arcapita Bank B.S.C.(c) and Related Debtors with respect to teach Debtor other than Falcon Gas Storage Company, Inc. A copy of the Confirmed Second Amended Joint Plan (With First Technical Modifications) is available at: http://bankrupt.com/misc/arcapita.doc1265.pdf ATLAS DELAWARE: S&P Assigns 'B' CCR; Outlook Negative ----------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B' corporate credit rating to Atlas Delaware Merger Sub Inc. The outlook is negative. At the same time, S&P assigned a 'B' issue-level rating to the company's proposed $320 million first-lien term loan due 2020 and $40 million revolving credit facility due 2018. The '3' recovery rating indicates S&P's expectation for meaningful (50% to 70%) recovery in the event of payment default. S&P also assigned a 'CCC+' issue-level rating to the company's proposed $165 million second-lien term loan due 2021. The '6' recovery rating indicates S&P's expectation for negligible (0% to 10%) recovery in the event of payment default. Following the completion of the transaction, S&P intends to transition the new ratings to Triple Point Group Holdings Inc., the borrower following the acquisition, and S&P anticipates withdrawing the corporate credit rating on Triple Point Technology Inc. and the issue-level and recovery ratings on its credit facilities, which will be repaid. "The ratings on Atlas reflect our view of the company's 'highly leveraged' financial risk profile with leverage of more than 8x pro forma for the proposed transaction [but excluding management's anticipated cost savings], and its 'weak' business risk profile with relatively low recurring maintenance and subscription revenue, a concentrated customer base, and reliance on large perpetual license sales," said Standard & Poor's credit analyst Christian Frank. Its leading market position and track record partially offset these factors. S&P anticipates that continued revenue growth through 2014, with stable mid-30% EBITDA margins, is likely to result in leverage of less than 7x. Triple Point provides commodity management software solutions to a wide range of end markets, from agriculture, consumer products, energy, and mining, to financial services and commodity trading. The company's software provides end-to-end functionality in the procurement, processing, transporting, and risk management of a wide range of commodities applicable to its end markets. It sells perpetual licenses based on commodity types, functionality, and seats, and it generates new license sales from existing customers as they expand the breadth of commodities they manage with the company's software, come to require new capabilities within existing commodities, or add new users. The negative outlook reflects S&P's view of the company's high leverage relative to its business risk profile, which incorporates low contractually recurring revenue and meaningful customer concentration. S&P could lower the rating if a decline in perpetual license sales resulting from reduced investment spending by customers or increased competition, or the loss of a key customer, preclude the company from de-leveraging. S&P could revise the outlook to stable during the next 12 months if continued license growth and cost cutting result in leverage approaching 7x with prospects for continued de-leveraging. AZTECH RENTALS: Files for Chapter 22 in San Antonio --------------------------------------------------- Patrick Danner, writing for San Antonio Express-News, reports that Aztech Rentals of San Antonio Inc., which rents backhoes, forklifts, excavators, generators and other equipment, filed for Chapter 11 bankruptcy on June 17, disclosing about $1 million to $10 million in both assets and debts. This is Aztech's second Chapter 11 filing. The report says the bankruptcy petition incorrectly listed Aztec Rentals of San Antonio Inc. as the debtor; company President Douglas Raney said the correct name is Aztech Rentals of San Antonio Inc. He said the company opened in 1967 and employs about 20 people. "I have no intentions of going anywhere," Mr. Raney said, according to the report. "I'm sorry that I had to do this. It was just one of those things; we just couldn't work it out" with the company's lender. Aztech first filed for bankruptcy (Bankr. W.D. Tex. Case No. 11-51824) on May 26, 2011, estimating $1 million to $10 million in both assets and debts. Bankruptcy Judge Leif M. Clark presided over the 2011 case. J. Todd Malaise, Esq. -- notices@malaiselawfirm.com -- at Malaise Law Firm, served as counsel to the 2011 debtor. The 2011 petition was signed by Douglas H. Raney, president. B-G & G INVESTORS: Case Summary & 14 Unsecured Creditors -------------------------------------------------------- Debtor: B-G & G Investors I, LLC 763 Monet Drive, Suite A-103 Baton Rouge, LA 70806 Bankruptcy Case No.: 13-10828 Chapter 11 Petition Date: June 18, 2013 Court: United States Bankruptcy Court Middle District of Louisiana (Baton Rouge) Judge: Douglas D. Dodd Debtor's Counsel: Noel Steffes Melancon, Esq. William E. Steffes, Esq. STEFFES, VINGIELLO & MCKENZIE, LLC 13702 Coursey Blvd., Building 3 Baton Rouge, LA 70817 Tel: (225) 751-1751 Fax: (225) 751-1998 E-mail: nsteffes@steffeslaw.com bsteffes@steffeslaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its largest unsecured creditors is available for free at http://bankrupt.com/misc/lamb13-10828.pdf The petition was signed by Howard Gyler, manager. BALLENGER CONSTRUCTION: Unsecureds May Get Nothing -------------------------------------------------- Katy Stech, writing for Dow Jones Newswires, relates that Ballenger Construction Co.'s attorneys said in a liquidation report filed with the bankruptcy court earlier this month that the $9.6 million in proceeds from the auction of the company's assets in April plus other amounts will help pay off a $16 million debt to Frost Bank. The rest of the company's debts, including $24 million owed to unsecured creditors, may go unpaid at the end of the case. Ms. Stech notes that Ballenger had $112 million worth of work left to finish for Texas's Department of Transportation before its collapse, according to an engineering trade publication. Bonding companies eventually took over some of its construction projects, court papers said. About Ballenger Construction Ballenger Construction Co., filed for Chapter 11 bankruptcy protection (Bankr. S.D. Tex. 12-20645) on Dec. 7, 2012, in Corpus Christi, listing under $50,000 in assets and $10 million to $50 million in liabilities. Judge Richard S. Schmidt oversees the case. The Debtor is represented by Roderick Glen Ayers, Jr., Esq., at Langley Banack Inc. as counsel. A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/txsb12-20645.pdf The petition was signed by Joe C. Ballenger Jr./Joe C. Ballinger Sr., president/CEO. BANK OF THE CAROLINAS: Shareholders Elect Nine Directors -------------------------------------------------------- Bank of the Carolinas Corporation held its annual meeting of shareholders on June 13, 2013, at which the shareholders elected Jerry W. Anderson, Alan M. Bailey, John A. Drye, John W. Googe, Henry H. Land, Grady L. McClamrock, Jr., Lynne Scott Safrit, Francis W. Slate and Stephen R. Talbert as directors. The shareholders ratified a resolution endorsing and approving compensation paid or provided to the Company's executive officers and the Company's executive compensation policies and practices, and ratified the appointment of Turlington and Company, L.L.P., as the Company's independent accountants for 2013. About Bank of the Carolinas Mocksville, North Carolina-based Bank of the Carolinas Corporation was formed in 2006 to serve as a holding company for Bank of the Carolinas. The Bank's primary market area is in the Piedmont region of North Carolina. Bank of the Carolinas disclosed a net loss available to common stockholders of $5.53 million in 2012, a net loss available to common stockholders of $29.18 million in 2011 and a net loss available to common stockholders of $3.56 million in 2010. The Company's balance sheet at March 31, 2013, showed $432.18 million in total assets, $422.91 million in total liabilities and $9.26 million in total stockholders' equity. Turlington and Company, LLP, in Lexington, North Carolina, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring credit losses that have eroded certain regulatory capital ratios. As of Dec. 31, 2012, the Company is considered undercapitalized based on their regulatory capital level. This raises substantial doubt about the Company's ability to continue as a going concern. BASHAS' INC: Court Rejects Kubicek Bid to Reinstate Suit -------------------------------------------------------- Senior District Judge Frederick J. Martone declined the motion for reconsideration filed by Robert Kubicek Architects & Associates, Inc., of the order dismissing the firm's lawsuit against Bashas' Inc. The dismissal order was reported in the May 14 edition of the Troubled Company Reporter. In that ruling, the Court held that Kubicek had failed to state a claim against Bashas' for either direct or contributory copyright infringement. Kubicek has again complained that it was unable to plead with more particularity because it had an inadequate opportunity to conduct discovery. It now asserts that it has obtained "newly discovered evidence" in the trial against The Bosely Group, Kubicek v. Bosely, CV-11-2112-PHX-DGC, putting it "in a position for the first time to plead with substantial detail the particulars of Bashas' infringing activities." The Court notes this "newly discovered" evidence allegedly came to light during the Bosely trial, almost a month before the ruling on Bashas' motion to dismiss. Yet Kubicek never sought to amend its response to the motion before the Court. Second, this "new" evidence still does not identify when the allegedly infringing actions occurred -- an essential element in this case given that Bashas' liability is limited to post-petition conduct. Third, the so-called new evidence was obtained from "knowledgeable former employees of Bashas' and Mr. Bosley himself," but there is no allegation that Kubicek was somehow prevented from timely obtaining this information. Kubicek has been aggressively pursuing these claims against Bashas' and Bosely for years. Evidence sufficient to support its claims would have been discovered with the exercise of reasonable diligence, the Court said. The case is, Robert Kubicek Architects & Associates, Inc. Plaintiff, v. Bashas' Inc., Defendant, Nos. CV 12-01497-PHX-FJM, BK 09-16050-JMM, Adv. No. 12-AP-0226-JMM (D. Ariz.). A copy of the Court's June 17, 2013 Order is available at http://is.gd/FGdmT4from Leagle.com. Robert Kubicek Architects & Associates Incorporated is represented by: Christopher Ryan Chicoine, Esq. Darrell Lamar Hawkins, Esq. Philip R. Rupprecht, Esq. AIKEN SCHENK HAWKINS & RICCIARDI PC 2390 E. Camelback Rd., Suite 400 Phoenix, AZ 85016 Tel: 602-248-8203 E-mail: dlh@ashrlaw.com prr@ashrlaw.com - and - Richard K. Walker, Esq. Charles W. Jirauch, Esq. WALKER & PESKIND PLLC 16100 N. 71st Street, Suite 140 Scottsdale, AZ 85254 Bashas' Incorporated is represented by Andrew Abraham, Esq. Ralph D. Harris, Esq. BURCH & CRACCHIOLO PA E-mail: aabraham@bcattorneys.com rharris@bcattorneys.com - and - Cassandra Blythe Meynard, Esq. Isaac Daniel Rothschild, Esq. Michael William McGrath, Esq. MESCH CLARK & ROTHSCHILD PC 259 N. Meyer Ave. Tucson, AZ 85701-1090 Tel: (520) 624-8886 Fax: (520) 798-1037 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. BELVEDERE LLC: Fray's Grant Project Placed in Bankruptcy -------------------------------------------------------- Belvedere, LLC, in Charlottesville, Virginia, filed for Chapter 11 bankruptcy (Bankr. W.D. Va. Case No. 13-61207) on June 6, 2013, estimating $1 million to $10 million in both assets and debts. Douglas E. Little, Esq., in Charlottesville, serves as the Debtor's counsel. The petition was signed by Charles W. Hurt, manager. A list of the Company's largest unsecured creditors filed with the petition is available at http://bankrupt.com/misc/vawb13-61207.pdf Nate Delesline III, writing for The Daily Progress, reports that Belvedere LLC sought bankruptcy protection for the Fray's Grant development. Mr. Hurt, Belvedere LLC's manager, is one of Albemarle County's most prominent developers and landowners. The report relates the bankruptcy filing postponed a foreclosure auction of 21 lots in the Albemarle County subdivision. The parcels slated for sale at auction included 13 estate sites of 20 to 45 acres, and smaller sites that range from 2 to 4 acres. The report notes court documents show Sonabank and Hampton Roads Bankshares hold secured claims in the project. Hampton Roads Bankshares has a claim of about $4.33 million. Sonabank has a claim of about $2.3 million. Four other local creditors hold unsecured claims that range from about $500 to $3,800 for landscaping work and legal fees. BERNARD L MADOFF: Court Sets Up Hurdle for Asset-Freeze Hearings ---------------------------------------------------------------- Max Stendahl of BankruptcyLaw360 reported that the Second Circuit ruled that criminal defendants must show they have insufficient assets to hire counsel of choice before being awarded a pretrial hearing to recover frozen assets for that purpose, denying a Bernard Madoff associate's bid for such a hearing. According to the report, a three-judge panel clarified the Second Circuit's landmark 1991 decision in United States v. Monsanto. That case held that a criminal defendant who wishes to use frozen assets to hire counsel of choice is entitled to a pretrial hearing, the report related. About Bernard L. Madoff Bernard L. Madoff Investment Securities LLC and Bernard L. Madoff orchestrated the largest Ponzi scheme in history, with losses topping US$50 billion. On Dec. 15, 2008, the Honorable Louis A. Stanton of the U.S. District Court for the Southern District of New York granted the application of the Securities Investor Protection Corporation for a decree adjudicating that the customers of BLMIS are in need of the protection afforded by the Securities Investor Protection Act of 1970. The District Court's Protective Order (i) appointed Irving H. Picard, Esq., as trustee for the liquidation of BLMIS, (ii) appointed Baker & Hostetler LLP as his counsel, and (iii) removed the SIPA Liquidation proceeding to the Bankruptcy Court (Bankr. S.D.N.Y. Adv. Pro. No. 08-01789) (Lifland, J.). Mr. Picard has retained AlixPartners LLP as claims agent. On April 13, 2009, former BLMIS clients filed an involuntary Chapter 7 bankruptcy petition against Bernard Madoff (Bankr. S.D.N.Y. 09-11893). The case is before Hon. Burton Lifland. The petitioning creditors -- Blumenthal & Associates Florida General Partnership, Martin Rappaport Charitable Remainder Unitrust, Martin Rappaport, Marc Cherno, and Steven Morganstern -- assert US$64 million in claims against Mr. Madoff based on the balances contained in the last statements they got from BLMIS. On April 14, 2009, Grant Thornton UK LLP as receiver placed Madoff Securities International Limited in London under bankruptcy protection pursuant to Chapter 15 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. 09-16751). The Chapter 15 case was later transferred to Manhattan. In June 2009, Judge Lifland approved the consolidation of the Madoff SIPA proceedings and the bankruptcy case. Judge Denny Chin of the U.S. District Court for the Southern District of New York on June 29, 2009, sentenced Mr. Madoff to 150 years of life imprisonment for defrauding investors in United States v. Madoff, No. 09-CR-213 (S.D.N.Y.). Mr. Picard has made three distributions, paying more than half of smaller claims in full and satisfying just over 50 percent of larger customer claims totaling more than $17 billion. BEST UNION: Court to Convene Confirmation Hearing on June 26 ------------------------------------------------------------ An evidentiary hearing on the confirmation of Best Union LLC's Plan of Reorganization will be held on June 26, 2013, at 9:30 a.m. at courtroom 1468 in Los Angeles before the Hon. Peter Carroll. Objections to Plan were to be filed so as to be received no later than June 12, 2013. The voting deadline on the Plan was also June 12. The Court approved the Disclosure Statement as containing "adequate information" on May 16, 2013. The Debtor filed an amended version of the Disclosure Statement before the Court entered its ruling. A full-text copy of the Amended Disclosure Statement dated May 15, 2013, is available for free at: http://bankrupt.com/misc/BESTUNION_AmdDSMay15.pdf As reported by The Troubled Company Reporter on May 2, 2013, the Plan provides that the secured claims of Bank of China, SPCP Group V, LLC, will be paid in full and the lenders will retain their liens securing the debts until the debts are paid or the West Covina Property is sold. General unsecured claims will be paid 100%. About The Best Union West Covina, California-based, The Best Union LLC, owns properties in West Covina and Fresno, California. Bank of China and SPCP Group V, LLC, have secured claims of $5.888 million and $2.255 million, respectively. The West Covina property generated income of $752,000 last year. The Fresno property generated income of $251,000 in 2011. The Company filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-32503) on June 28, 2012. Bankruptcy Judge Peter Carroll presides over the case. Mufthiha Sabaratnam, Esq., at Sabaratnam and Associates represents the Debtor in its restructuring effort. The Debtor has scheduled assets of $11,431,364, and scheduled liabilities of $9,195,179. The petition was signed by James Lee, manager. BEST UNION: Court OKs Hiring of Robert Chang as Accountant ---------------------------------------------------------- The Best Union LLC obtained bankruptcy court permission to employ Robert Chang of Robert Chang Accountancy Corporation as its accountant. As reported by The Troubled Company Reporter on May 6, 2013, Robert Chang is expected to (1) prepare income tax returns, quarterly payroll tax returns; (2) provide other book keeping services as needed; and (3) pepare other accounting documents necessary for the debtor-in-possession. According to papers filed by the Debtor in court, the average compensation listed every month is approximately $375 (the amounts were taken from the Debtor's monthly operating reports). About The Best Union West Covina, California-based, The Best Union LLC, owns properties in West Covina and Fresno, California. Bank of China and SPCP Group V, LLC, have secured claims of $5.888 million and $2.255 million, respectively. The West Covina property generated income of $752,000 last year. The Fresno property generated income of $251,000 in 2011. The Company filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 12-32503) on June 28, 2012. Bankruptcy Judge Peter Carroll presides over the case. Mufthiha Sabaratnam, Esq., at Sabaratnam and Associates represents the Debtor in its restructuring effort. The Debtor has scheduled assets of $11,431,364, and scheduled liabilities of $9,195,179. The petition was signed by James Lee, manager. BIOSCRIP INC: Moody's Assigns B2 Rating to New $150MM Term Loan --------------------------------------------------------------- Moody's Investors Service assigned a B2 (LGD 4, 52%) rating to BioScrip, Inc.'s proposed $150 million senior secured delayed draw term loan B. Moody's understands that proceeds from the offering, in addition to existing cash on hand, will be used to finance the acquisition of the home infusion business of CarePoint Partners Holdings, LLC, for a total purchase consideration of $223 million, including an upfront cash payment of $213 million and a delayed $10 million liability to be paid after one year. On a pro forma basis for the acquisition of CarePoint and related synergies, Moody's estimates pro forma adjusted debt to EBITDA will increase to approximately 5.8 times from approximately 5.2 times for the twelve months ended March 31, 2013. Moody's pro forma calculation of adjusted leverage already includes adjustments for the full year impact of the InfuScience and HomeChoice acquisitions and related synergies, and an adjustment for the estimated impact of Hurricane Sandy on fourth quarter results. Based in Cincinnati, Ohio, CarePoint, a provider of home and alternate-site infusion therapy for patients with complex, acute and chronic conditions. CarePoint is expected to generate approximately $160 million in annual revenue, has 28 sites of service across nine states within the East coast and Gulf coast regions. Moody's expects the acquisition to further expand BioScrip's infusion footprint and have a favorable impact on the company's operating margins given CarePoint's mix of higher-margin infusion therapy products. BioScrip also expects to realize the value of a future tax benefit which the company estimates at $45 million as a result of the CarePoint acquisition, yielding a net purchase price of $178 million. Following is a summary of Moody's rating actions. Ratings assigned: BioScrip, Inc.: $150 million proposed senior secured delayed draw term loan B, B2 (LGD 4, 52%) Ratings unchanged: Corporate Family Rating, B2 Probability of Default Rating, B2-PD Speculative Grade Liquidity Rating, SGL-2 $75 million proposed senior secured revolving credit facility due 2018, B2 (LGD 4, 52%) $250 million proposed senior secured term loan B due 2020, B2 (LGD 4, 52%) The rating outlook is stable. The ratings are subject to review of final documentation. Ratings Rationale: BioScrip's B2 Corporate Family Rating reflects the company's relatively high financial leverage, aggressive acquisition growth strategy, and small absolute size based on revenue and earnings. The ratings also reflect the portion of BioScrip's revenue derived from Medicare, Medicaid and other government-sponsored healthcare programs, representing roughly one-third of BioScrip's revenue base. However, despite the company's small absolute size, the ratings are supported by BioScrip's solid scale and market position within the highly fragmented market for home infusion services, as well as the potential for significantly improved gross and operating margins over the near to intermediate-term. However, while Moody's expects the company to realize additional earnings from acquisitions and the opening of new infusion pharmacies, the company's future acquisition strategy and tolerance for additional financial leverage remains uncertain. The rating reflects our expectation that the company will maintain a disciplined growth strategy and financial policy, supported by the company's public equity offering in April 2013. The stable rating outlook incorporates Moody's expectation that the company will maintain a disciplined growth strategy and financial policy. The stable outlook also reflects Moody's expectation that BioScrip will achieve margin expansion as a result of savings from eliminating cost redundancies and focusing on higher margin businesses. The ratings could be downgraded if financial policies become more aggressive or if liquidity deteriorates. From a financial metrics perspective, the ratings could be downgraded if adjusted debt to EBITDA approaches 6 times or if free cash flow turns negative on a sustained basis. Failure to close the proposed refinancing would likely result in a downgrade. The ratings could be upgraded if the company achieves margin expansion and EBITDA growth alongside a disciplined growth strategy and financial policy. Given the company's small size, business model focused primarily on the infusion and home health businesses, and significant proportion of revenue derived directly from Medicare, Medicaid and other government-sponsored programs, Moody's would need to see financial leverage (debt to EBITDA) below 4.0 times and free cash flow to debt above 8% for an upgrade to be considered. The principal methodology used in this rating was the Global Healthcare Service Providers published in December 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Elmsford, New York, BioScrip, Inc. is a national provider of home infusion, home healthcare and pharmacy benefit management ("PBM") services. The company's clinical management programs and services provide access to prescription medications and home health services for patients with chronic and acute healthcare conditions, including gastrointestinal abnormalities, infectious diseases, cancer, pain management, multiple sclerosis, organ transplants, bleeding disorders, rheumatoid arthritis, immune deficiencies and heart failure. As of May 9, 2013, BioScrip had a total of 90 locations in 27 states, encompassing 32 home nursing locations and 58 home infusion locations, including two contract affiliated infusion pharmacies. For the twelve months ended March 31, 2013, BioScrip generated total revenues of approximately $706 million. BIOSCRIP INC: S&P Affirms 'B' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Rating Services said it affirmed its 'B' corporate credit rating on BioScrip Inc. The outlook is stable. The affirmation reflects S&P's belief that CarePoint complements BioScrip's existing base business and will contribute EBITDA to offset some of the debt increase, keeping BioScrip's debt-to- EBITDA ratio between 5x and 6x in 2014. S&P also affirmed its 'B' issue-level rating on the company's senior secured credit facilities. The recovery rating of '3', indicating expectations for meaningful (50% to 70%) recovery in the event of a payment default, remains unchanged. "The ratings on BioScrip Inc. continue to reflect its "highly leveraged" financial risk profile and "weak" business risk profile following the acquisition of CarePoint. Our assessment of BioScrip's financial risk reflects its acquisitive past and highly leveraged capital structure, including a debt-to-EBITDA ratio that we expect to remain above 5x," said credit analyst John Babcock. "The key credit factors we considered in our business risk assessment include the company's narrow business focus and limited barriers to entry. The company's improved scale and competitive position from its recent acquisitions offset these factors." S&P's stable rating outlook reflects its expectation that BioScrip's debt-to-EBITDA ratio will remain above 5x for the next two years. Additionally, while S&P expects the company to generate about $30 million in free cash flow in 2013, it do not expect the cash to be used for debt reduction. Instead S&P believes the company will continue to invest in growth initiatives. S&P would consider an upgrade if the company achieves an improved financial risk profile, including a debt-to-EBITDA ratio maintained below 5x. S&P estimates this could occur if it grows revenues in the double digits and its EBITDA margin expands more than 200 bps from its current projections. However, S&P believes this is more likely to occur if it allocates cash flow to pay down debt rather than for acquisitions and other growth initiatives. S&P believes a lowering of the company's speculative-grade rating is unlikely in the year ahead, given BioScrip's plan to invest in higher-margin businesses than those divested. However, S&P would consider a downgrade if it were to trigger its springing net leverage covenant and its covenant cushion falls below 10%. S&P estimates this could occur if its EBITDA margin contracts more than 200 bps from our projections. BLUE COAT: S&P Lowers CCR to 'B' & Rates $40MM Facility 'B+' ------------------------------------------------------------ Standard & Poor's Ratings Services lowered its corporate credit rating on Sunnyvale, Calif.-based Blue Coat Systems Inc. to 'B' from 'B+'. The outlook is stable. In addition, S&P assigned a 'B+' issue rating and '2' recovery rating to the company's $40 million senior secured revolving credit facility (undrawn at closing) and $700 million first-lien term loan. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery for lenders in the event of payment default. S&P also assigned a 'CCC+' issue rating with a recovery rating of '6' to the company's $330 million second-lien term loan. The '6' recovery rating indicates S&P's expectation for negligible (0% to 10%) recovery for lenders in the event of payment default. S&P expects the company to use the proceeds from the facilities to refinance existing $700 million first-lien term loan, to pay $322 million dividend to shareholders and to pay the transaction's fees and expenses. The transaction will result in an increase in pro forma leverage to approximately 6.6x from 4.5x as of January 2013. The downgrade is based on the increase in pro form leverage following the transaction. "The rating reflects Blue Coat's 'weak' business risk profile, incorporating its relatively narrow product focus and competitive industry, and what we view as a 'highly leveraged' financial risk profile," said Standard & Poor's credit analyst Katarzyna Nolan. Blue Coat's significant level of recurring revenue, growing addressable markets, and stable cash flow generation partially offset these factors. The stable rating outlook on Blue Coat is based on Standard & Poor's Ratings Services' expectation that the company will maintain consistent profitability, supported by its diverse and recurring revenue base. S&P may lower the rating if leverage is sustained above the low-7x area, as a result of acquisition integration challenges, increased competition, or additional debt-financed dividends or acquisitions. An upgrade in the near term is unlikely, given the company's highly leveraged financial profile and its ownership structure that is likely to preclude sustained leverage reduction, as indicated by the current transaction. BOOMERANG SYSTEMS: Obtains $4.7 Million Funding Commitment ---------------------------------------------------------- Boomerang Systems, Inc., and its wholly-owned subsidiaries Boomerang Sub, Inc., Boomerang USA Corp. and Boomerang MP Holdings Inc., entered into a Loan and Security Agreement dated as of June 6, 2013, with certain lenders. Pursuant to the Loan Agreement, the lenders committed to fund $4,750,000 principal amount of loans to the Borrowers. The Loan Agreement contemplates that the aggregate principal amount of borrowings may be increased to $10 million through commitments from additional lenders who subsequently become a party to the Loan Agreement. The Notes bear interest at the rate of 15 percent per annum, payable upon maturity. The maturity date of the Notes is May 31, 2016, subject to earlier prepayment upon acceleration of the occurrence of an event of default; provided further that the Company may prepay the Notes at any time without penalty. Simultaneously with entering into the Loan Agreement, the Company (i) amended the Automated Parking Design and Purchase Agreement dated Oct. 19, 2012, by and between the Company and BrickellHouse Holdings, LLC, pursuant to which the purchase price to BHH was increased by approximately $2 million and (ii) the Company and BHH entered into a marketing agreement pursuant to which the Company agreed to pay BHH royalties based upon future sales of automated parking solutions through the Company's Robotic Valet Systems, in an aggregate amount up to $2 million. A copy of the Form 8-K is available for free at: http://is.gd/TqvLRr About Boomerang Systems Headquartered in Morristown, New Jersey, Boomerang Systems, Inc. (Pink Sheets: BMER) through its wholly owned subsidiary, Boomerang Utah, is engaged in the design, development, and marketing of automated racking and retrieval systems for automobile parking and automated racking and retrieval of containerized self-storage units. Boomerang incurred a net loss of $17.42 million for the fiscal year ended Sept. 30, 2012, compared with a net loss of $19.10 million during the prior year. The Company's balance sheet at March 31, 2013, showed $4.46 million in total assets, $23.19 million in total liabilities and a $18.73 million total stockholders' deficit. Bankruptcy Warning "Our operations may not generate sufficient cash to enable us to service our debt. If we were to fail to make any required payment under the notes and agreements governing our indebtedness or fail to comply with the covenants contained in the notes and agreements, we would be in default. Our debt holders would have the ability to require that we immediately pay all outstanding indebtedness. If the debt holders were to require immediate payment, we might not have sufficient assets to satisfy our obligations under the notes or our other indebtedness. In such event, we could be forced to seek protection under bankruptcy laws, which could have a material adverse effect on our existing contracts and our ability to procure new contracts as well as our ability to recruit and/or retain employees. Accordingly, a default could have a significant adverse effect on the market value and marketability of our common stock," the Company said in its annual report for the year ended Sept. 30, 2012. BUILDERS GROUP: Proposes G.A. Carlo-Altieri as Counsel ------------------------------------------------------ Builders Group & Development Corp. asks the bankruptcy court to for approval to employ G.A. Carlo-Altieri & Associates as counsel. The Debtor says it is not sufficiently familiar with the law to be able to plan and conduct the Chapter 11 proceedings without legal counsel. The Debtor has agreed to pay a $20,000 retainer. The firm will bill on the basis of $280 per hour, plus expenses, for work performed by Gerardo A. Carlo, Esq.; $260 per hour, plus expenses, for work performed by Kendra K. Loomis, Esq.; $200 per hour, plus expenses for work performed by other associates; and $100 per hour for paralegal time. The Debtor believes that the firm is a disinterested person as defined in 11 U.S.C. Sec. 101(14). About Builders Group 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. BVG AUTO: Case Summary & 13 Unsecured Creditors ----------------------------------------------- Debtor: BVG Auto Center, Ltd. 6040 E Main St, No 466 Mesa, AZ 85205 Bankruptcy Case No.: 13-10401 Chapter 11 Petition Date: June 18, 2013 Court: United States Bankruptcy Court District of Arizona (Phoenix) Judge: Randolph J. Haines Debtor's Counsel: Kelly G. Black, Esq. KELLY G. BLACK, PLC 1152 E Greenway St, Ste 4 Mesa, AZ 85203-4360 Tel: (480) 639-6719 Fax: (480) 639-6819 E-mail: kgb@kellygblacklaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company?s 13 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/azb13-10401.pdf The petition was signed by Milivoje Djordjevich, president. BVC PARTNERS: Section 341(a) Meeting Set on July 15 --------------------------------------------------- A meeting of creditors in the bankruptcy case of BVC Partners I, LLC, will be held on July 15, 2013, at 1:00 p.m. at Orlando, FL (687) Suite 1203B, George C. Young Courthouse, 400 West Washington Street. Creditors have until Oct. 15, 2013, to submit their proofs of claim. 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. BVC Partners I, LLC, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-07396) on June 14, 2013. Sham Maharaj signed the petition as managing member. The Debtor estimated assets and debts of at least $10 million. Jeffrey Ainsworth, Esq., at Law Office of Robert B. Branson, P.A., serves as the Debtor's counsel. CASH STORE: Amends Fiscal 2012 Annual Report -------------------------------------------- The Cash Store Financial Services Inc.'s audited consolidated financial statements for the year ended Sept. 30, 2012, have been amended and restated to correct for an error resulting from the misunderstanding of the settlement terms and conditions of the March 5, 2004, British Columbia Class Action claim, which resulted in the application of an accounting principle to measure and record the liability as at Sept. 30, 2010, and subsequent reporting periods, that was not appropriate in the circumstances. In addition, the Company has made revisions to correct certain minor typographical errors in various sections of the Annual Report. As restated, the Company reported a net loss and comprehensive loss of $43.52 million on $187.41 million of revenue for the year ended Sept. 30, 2012, as compared with a net loss of $43.08 million as originally reported. The Company's restated balance sheet at Sept. 30, 2012, showed $202.44 million in total assets, $168.92 million in total liabilities and $33.51 million shareholders' equity. A copy of the amended Form 20-F is available for free at: http://is.gd/FGLW7v About Cash Store Financial Headquartered in Edmonton, Alberta, The Cash Store Financial is the only lender and broker of short-term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store Financial operates 512 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 25 branches in the United Kingdom. Cash Store Financial is a Canadian corporation that is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States. Cash Store Financial employs approximately 1,900 associates. * * * As reported in the Feb. 8, 2013 edition of the TCR, Standard & Poor's Ratings Services lowered its issuer credit rating on Cash Store Financial (CSF) to 'CCC+' from 'B-'. The outlook is negative. "The downgrades follow a proposal by the payday loan registrar in Ontario to revoke CSF's payday lending licenses and CSF's announcement that it has discontinued its payday loan product in the region," said Standard & Poor's credit analyst Igor Koyfman. The company's businesses in Ontario, which account for approximately one-third of its store count, will begin offering a new line of credit product to its customers. S&P believes this is to offset the loss of its payday lending product; however, this is a relatively new product, and S&P believes that it will be challenging for the company to replace its lost earnings from the payday loan product. S&P also believes that the registrar's proposal could lead to similar actions in other territories. As reported by the TCR on May 22, 2013, Moody's Investors Service downgraded the Corporate Family Rating and senior unsecured debt rating of Cash Store Financial Services to Caa1 from B3 and assigned a negative outlook. According to Moody's, CSFS remains unprofitable on both the pretax and net income lines and prospects for return to profitability are unclear. CELOTEX CORP: No Asbestos Indemnification for Company ----------------------------------------------------- Joshua Alston of BankruptcyLaw360 reported that the New Jersey Supreme Court ruled that a defunct insurance company could not be held responsible for a $5 million policy it had issued to a manufacturer of building products containing asbestos, saying the matter had already been decided in other venues. According to the report, New Jersey's high court ruled in favor of the now-bankrupt Integrity Insurance Co., which issued a $5 million excess insurance policy to the also-bankrupt Celotex Corp., which once manufactured building and roofing materials containing asbestos. Celotex's product spawned thousands of product liability claims, the report said. About Celotex Corp. The Celotex Corporation manufactured, marketed, and distributed building products. Carey Canada Inc. mined asbestos until it ceased operations in 1986. Celotex and Carey Canada sought chapter 11 protection (Bankr. M.D. Fla. Case No. 90-10016) on Oct. 12, 1990. At the time of the filing, Celotex and Carey Canada had been named as defendants in thousands of lawsuits filed by Asbestos Personal Injury Claimants, and in hundreds of lawsuits filed by Asbestos Property Damage Claimants. On Dec. 6, 1996, the Bankruptcy Court entered an Order Confirming the Modified Joint Plan of Reorganization for Celotex and Carey Canada. A principal feature of the confirmed Plan was the creation of the Asbestos Settlement Trust under 11 U.S.C. Sec. 524(g) "to address, liquidate, resolve, and disallow or allow and pay Asbestos Claims, which will operate in accordance with the Asbestos Claims Resolution Procedures." CHINA PRECISION: Receives Non-Compliance Notice From NASDAQ ----------------------------------------------------------- China Precision Steel, Inc., on June 11, 2013, received a deficiency letter from Listing Qualifications Staff at NASDAQ indicating that the Company no longer complies with the independent director and audit committee composition requirements set forth in the NASDAQ's Listing Rule 5605. Specifically, NASDAQ Listing Rule 5605(b)(1) requires that a majority of the Company's Board be comprised of independent members and NASDAQ Listing Rule 5605(c)(2) requires that the Company's Audit Committee be comprised of at least three independent members. The Company received a deficiency letter from Listing Qualifications Staff at The NASDAQ Stock Market due to the resignations of Che Kin Lui and Daniel Carlson as members of the board of directors of the Company, effective Aug. 8, 2012, and Oct. 9, 2012, respectively. Further, David P. Wong resigned as a member of the Board and as Chairman of the Audit Committee, effective May 9, 2013, and on May 9, 2013, the Board approved by unanimous written consent the appointment of Li Jian Lin as a member of the Board and as Chairman of the Audit Committee of the Company, effective July 1, 2013. As a result, and notwithstanding Mr. Li's pending appointment, the Board currently consists of one independent member of the Board and Audit Committee. The letter sets forth that NASDAQ, pursuant to its discretionary authority set forth in Listing Rule 5101, has shortened the period for the Company to submit the Company's plan to regain compliance to June 18, 2013. If the plan is accepted, NASDAQ will grant an extension up to 180 days from the date of the letter to evidence compliance. The Company is in the process of preparing that plan, for submission to NASDAQ prior to the extended deadline of June 25, 2013, in order to regain compliance with the NASDAQ independence requirements. About China Precision China Precision Steel Inc. is a niche precision steel processing company principally engaged in the production and sale of high precision cold-rolled steel products and provides value added services such as heat treatment and cutting medium and high carbon hot-rolled steel strips. China Precision Steel's high precision, ultra-thin, high strength (7.5 mm to 0.05 mm) cold- rolled steel products are mainly used in the production of automotive components, food packaging materials, saw blades and textile needles. The Company primarily sells to manufacturers in the People's Republic of China as well as overseas markets such as Nigeria, Thailand, Indonesia and the Philippines. China Precision Steel was incorporated in 2002 and is headquartered in Sheung Wan, Hong Kong. China Precision reported a net loss of $16.94 million for the year ended June 30, 2012, compared with net income of $256,950 during the prior fiscal year. Moore Stephens, in Hong Kong, issued a "going concern" qualification on the consolidated financial statement for the year ended June 30, 2012. The independent auditors noted that the Company has suffered a very significant loss in the year ended June 30, 2012, and defaulted on interest and principal repayments of bank borrowings that raise substantial doubt about its ability to continue as a going concern. For the nine months ended March 31, 2013, the Company incurred a net loss of $28.59 million on $22.68 million of sales revenues, as compared with a net loss of $7.93 million on $105.32 million of sales revenues for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $163.25 million in total assets, $70.61 million in total liabilities, all current, and $92.63 million in total stockholders' equity. COLLINS AND WALTON: Officer Facing Pension Fund Suit ---------------------------------------------------- Sheet Metal Workers' National Pension Fund, Sheet Metal Occupational Health Institute Trust, International Training Institute for the Sheet Metal and Air Conditioning Industry, and National Energy Management Institute Committee for the Sheet Metal and Air Conditioning Industry filed a lawsuit pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1132, seeking an accounting and restitution from Collins and Walton Plumbing and Heating Contractors, Inc., and Jason C. Crane, president of Collins and Walton. Prior to the filing of the lawsuit, Collins and Walton sought Chapter 11 bankruptcy protection. Accordingly, the lawsuit, and all other judicial proceedings are stayed pending the resolution of the bankruptcy petition. In a June 17 Decision and Order available at http://is.gd/U4CImS from Leagle.com, District Judge Michael A. Telesca granted the Plaintiffs' request to sever the claims against the bankrupt corporation, Collins and Walton, from the action, pursuant to Rule 21 of the Federal Rules of Civil Procedure, so they may proceed with their claims against Mr. Crane, as he is not a party to the bankruptcy petition, and therefore, he is not entitled to the protection provided by the automatic stay. The Plaintiffs contend that the claims against Mr. Crane as an individual are distinct from those against Collins and Walton and that severing Collins and Walton would facilitate the prompt resolution of the separate claims against Mr. Crane. The case is SHEET METAL WORKERS' NATIONAL PENSION FUND, ET AL., Plaintiffs, v. COLLINS AND WALTON PLUMBING AND HEATING CONTRACTORS, INC., AND JASON C. CRANE Defendant, No. 12-CV-6611 (W.D. N.Y.). The Plaintiffs are represented by Jeffrey S. Dubin, Esq. Collins and Walton Plumbing and Heating Contractors, Inc., in Elmira, New York, filed for Chapter 11 bankruptcy (Bankr. W.D. N.Y. Case No. 12-21501) on Sept. 17, 2012, listing under $10 million in assets and debts. Judge Paul R. Warren oversees the case. C. Bruce Lawrence, Esq., at Boylan, Code LLP -- cblawrence@boylancode.com -- serves as the Debtor's counsel. A list of the Company's 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/nywb12-21501.pdf The petition was signed by Jason C. Crane, president. COMARCO INC: Annual Shareholders' Meeting Set on Aug. 22 -------------------------------------------------------- The board of directors of Comarco, Inc., set Aug. 22, 2013, as the date of its annual meeting of shareholders and the close of business on July 2, 2013, as the record date for determining the shareholders entitled to receive notice of and entitled to vote at the 2013 annual meeting of shareholders. The Company will separately send notice and proxy materials to shareholders of record. Because the date of the Company's 2013 annual meeting is more than 30 days before the one-year anniversary of the Company's 2012 annual meeting, the Company informed its shareholders of the revised deadlines for the submission of shareholder proposals and director nominees for consideration at our 2013 annual meeting. Proposals by shareholders and submissions by shareholders of director nominees for consideration at the 2013 annual meeting should be submitted in writing to the Company's Corporate Secretary at: Comarco, Inc. Attn: Corporate Secretary 25541 Commercentre Drive, Suite 250 Lake Forest, CA 92630. For all proposals and nominations by shareholders to be timely, regardless of whether the proposals or nominations are intended for inclusion in the proxy statement for the 2013 annual meeting, a shareholder's notice must be delivered to, or mailed and received by, the Company's Corporate Secretary on or before the Company's close of business on June 28, 2013. Any shareholder proposal or nomination delivered or received after the close of business on June 28, 2013, will be untimely and will not be properly brought before the 2013 annual meeting. Proposals by shareholders and submissions by shareholders of director nominees must also comply with the procedures set forth in the Company's Bylaws and, if intended for inclusion in the proxy statement, Rule 14a-8 under the Securities Exchange Act of 1934, as amended. About Comarco Inc. Based in Lake Forest, California, Comarco, Inc. (OTC: CMRO) -- http://www.comarco.com/-- is a provider of innovative, patented mobile power solutions that can be used to power and charge notebook computers, mobile phones, and many other rechargeable mobile devices with a single device. Comarco disclosed a net loss of $5.59 million on $6.33 million of revenue for the year ended Jan. 31, 2013, as compared with a net loss of $5.31 million on $8.06 million of revenue for the year ended Jan. 31, 2012. As of April 30, 2013, the Company had $3.86 million in total assets, $11.05 million in total liabilities and a $7.19 million total shareholders' deficit. Squar, Milner, Peterson, Miranda & Williamson, LLP, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses and negative cashflow from operations, has negative working capital and uncertainties surrounding the Company's ability to raise additional funds. These factors, among others, raise substantial doubt about its ability to continue as a going concern. COMMERCIAL CAPITAL: U.S. Trustee Objects to Disclosure Statement ---------------------------------------------------------------- The U.S. Trustee objects to the disclosure statement explaining Commercial Capital, Inc.'s Plan of Liquidation, complaining that the disclosures do not provide adequate information of a kind, and in sufficient detail, to enable a reasonable investor to make an informed decision about the Plan as required by Section 1125 of the Bankruptcy Code. Specifically, the U.S. Trustee notes that the Plan and Disclosure Statement contemplate that James T. Markus, Esq., will continue to manage the reorganized debtor and implement the terms of the Plan following confirmation but complains that the Plan and Disclosure Statement did not make it clear that, following confirmation, Mr. Markus will no longing be serving as the Chapter 11 Trustee, but instead will be serving as a plan trustee under the terms of the Plan. Moreover, the U.S. Trustee suggests that the Plan and Disclosure Statement should contain a mechanism for plan trustee succession in the event Mr. Markus resigns, dies, or is otherwise unable to fulfill his duties under the Plan. The U.S. Trustee further suggests that the Disclosure Statement and Plan should describe the extent to which the plan trustee will maintain a bond post-confirmation. If bonding continues, the new bond should be in favor of the beneficiaries under the Plan, conditioned on the plan trustee's faithful performance of duties imposed under the Plan, the U.S. Trustee asserts. Alan K. Motes, Esq. -- Alan.Motes@usdoj.gov -- is trial attorney for the U.S. Trustee. About Commercial Capital Greenwood Village, Colorado-based Commercial Capital, Inc. -- http://www.commercialcapitalinc.com/-- and its affiliate, CCI Funding I, LLC, are commercial real estate lenders and investment partners engaging in short-term commercial mortgage. Commercial Capital and CCI Funding filed separate petitions for Chapter 11 protection on April 22, 2009, and April 24, 2009, respectively (Bankr. D. Colo. Lead Case No. 09-17238). Robert Padjen, Esq., at Laufer and Padjen LLC, assisted Commercial Capital in its restructuring efforts. In its bankruptcy petition, Commercial Capital estimated between $100 million and $500 million in assets, and between $50 million and $100 million in debts. CCI Funding estimated between $100 million and $500 million each in assets and debts. In June 2009, an official committee of unsecured creditors was appointed in the CCI case. James T. Markus is the duly appointed Chapter 11 trustee for CCI. He is represented by: MARKUS WILLIAMS YOUNG & ZIMMERMANN LLC 1700 Lincoln Street, Suite 4000 Denver, CO 80203 Telephone: (303) 830-0800 Facsimile: (303) 830-0809 CONCORD CAMERA: Board OKs $0.07 Apiece Liquidating Distribution --------------------------------------------------------------- Concord Camera Corp's board of directors approved a liquidating distribution of $0.07 per share to the shareholders of record at the close of business on May 11, 2009, in accordance with the company's Plan of Dissolution and Liquidation. In accordance with the Plan of Liquidation, the Company's stock transfer books were closed at the close of business on May 11, 2009, and no transfers of its common stock were recorded after that time. The Company currently anticipates that payment of the liquidating distribution will be made in June 2013 and shareholders of record on the Record Date will receive a communication from the Company's stock transfer agent in June regarding the distribution. The timing and amounts of any future distributions, if any, will be determined by the Company's Board of Directors in accordance with the Plan of Liquidation. There can be no assurance that there will be any future distributions. About Concord Camera Headquartered in Hollywood, Florida, Concord Camera Corp. (NASDAQ:LENS) -- http://www.concord-camera.com/-- through its subsidiaries, provides easy-to-use 35mm single-use and traditional film cameras. Concord markets and sells its cameras on a private- label basis and under the POLAROID and POLAROID FUNSHOOTER brands through in-house sales and marketing personnel and independent sales representatives. The POLAROID trademark is owned by Polaroid Corporation and is used by Concord under license from Polaroid. CONGOLEUM CORP: Integrity Not Required to Pay Claims ---------------------------------------------------- Integrity Insurance Company issued policies to Congoleum Corporation. Congoleum submitted timely proofs of claim for which it sought coverage under the policies. The liquidator of Integrity Insurance, relying on In the Matter of the Liquidation of Integrity Insurance Co., 193 N.J. 86 (2007), issued seven notices of determination (NODs) disallowing the incurred but not reported claims for insufficient supporting documentation, failure to document the exhaustion of limits of coverage of the underlying policy to the Integrity policy, and allowance of contingent claims is prohibited by New Jersey statute. As a result of the approval of Congoleum's bankruptcy plan of reorganization, effective July 1, 2010, The Congoleum Plan Trust, is the successor-in-interest to the policies Integrity issued to Congoleum. The Trust timely filed an objection to the NODs. The liquidator declined to amend his decision and submitted the Trust's objection to the special master for consideration. In a February 25, 2011 written determination, the special master upheld the liquidator's decision. The special master determined that Congoleum's claims could not be allowed because they were not "absolute claims" as defined by Integrity Insurance's Amended Liquidation Closing Plan. The special master rejected Congoleum's contention that its claims were third-party claims allowable under N.J.S.A. 17:30C-28(b), stating that the statute is inapplicable to the case at hand. The Trust appealed to the liquidation court. In an April 29, 2011 order and written opinion, the court confirmed the special master's determination. The court noted that pursuant to the Amended LCP, a claim would only be considered if it became absolute on or before June 30, 2009. The court found that the special master had properly determined that Congoleum did not submit absolute claims as defined in the Amended LCP and determined in In the Matter of the Liquidation of Integrity Insurance Co. The court held: "Congoleum Corporation's claims still do not have fixed liability and have not been settled or adjudicated." The court rejected Congoleum's argument that its bankruptcy should be considered in evaluating the claims. The court also agreed that N.J.S.A. 17:30C-28(b) did not apply because Congoleum's claims were not third-party claims. On appeal, Congoleum raises the same arguments as those raised and decided in Commissioner of Insurance of the State of New Jersey v. Integrity Insurance Co./W.R. Grace & Co., (W.R. Grace), No. A- 2505-10 (App. Div. Jan. 11, 2012) (slip op. 16 to 25), certif. denied, 211 N.J. 607 (2012). For reasons expressed in W.R. Grace, the Superior Court of New Jersey, Appellate Division, in a June 17, 2013 decision, denied the appeal raised by the Appellant and held that: "We reject the Trust's argument that this case differs from W.R. Grace because here, the Trust is only seeking approval for claims that were identified, processed and settled prior to the bar date. A claim is not an 'absolute claim' unless 'liability and value has been fixed by actual payment by the Claimant or by judgment of a court of law' before the June 30, 2009 bar date. Although some claims may have been identified and processed before the bar date, liability and value were not fixed by actual payment before that date because Congoleum was in bankruptcy and the bankruptcy court did not approve Congoleum's reorganization plan, which included the settlements, until July 1, 2010." The case is IN THE MATTER OF THE LIQUIDATION OF INTEGRITY INSURANCE COMPANY, NO. A-5273-10T1 (N.J. Super. App. Div.). A full-text copy of the Decision is available at http://is.gd/fiIMth from Leagle.com. Robert M. Horkovich, Esq. -- rhorkovich@andersonkill.com -- and Robert Y. Chung, Esq. -- rchung@andersonkill.com -- at Anderson Kill & Olick, P.C., argued the cause for appellant The Congoleum Plan Trust. David M. Freeman, Esq., and John D. Gagnon, Esq., at Mazie Slater Katz & Freeman, LLC, argued the cause for respondent Thomas B. Considine, Commissioner of Banking and Insurance of the State of New Jersey in his capacity as Liquidator of Integrity Insurance Company. D & L ENERGY: Pushes for Sale of Wells, Drilling Rights ------------------------------------------------------- Katy Stech writing for Dow Jones' DBR Small Cap reports that the wife of D&L Energy Inc. former principal Ben Lupo, who put her in control of the natural-gas drilling company earlier this year in the middle of a pollution scandal, is pushing the company's new leaders to quickly sell its 580 oil and gas wells to pay off the Ohio business's debts. About D&L Energy D & L Energy has been involved in a number of joint ventures and limited partnerships that drill, own, and operate conventional oil and gas wells throughout Northeast Ohio and Northwest Pennsylvania. D&L has also been involved in the drilling, construction, operation and ownership of saltwater injection wells in the State of Ohio. D&L has also been involved in marketing and selling the "deep rights" to its oil and gas leases. In early 2013, the then-principal of D&L, Ben Lupo, was accused of violating the U.S. Clean Water Act by allegedly instructing agents/employees of a separate entity to dump waste water in an improper manner. As a result of Mr. Lupo's alleged actions, the Debtors were forced to incur substantial clean up costs. D & L Energy, based in Youngstown, Ohio, and affiliate Petroflow, Inc., filed for Chapter 11 bankruptcy (Bankr. N.D. Ohio Lead Case No. 13-40813) on April 16, 2013. Judge Kay Woods oversees the case. Kathryn A. Belfance, Esq., at Roderick Linton Belfance, LLP, serves as the Debtors' counsel, and Walter Haverfield, LLP, is the environmental counsel. The Debtor disclosed $41,015,677 in assets and $6,185,158 in liabilities as of the Chapter 11 filing. Daniel M. McDermott, U.S. Trustee for Region 9, appointed seven creditors to serve in the Official Committee of Unsecured Creditors. The Committee tapped Squire Sanders (US) LLP as its legal counsel, and BBP Partners LLC as it financial advisors. DIGERATI TECHNOLOGIES: Sec. 341 Creditors' Meeting Set for July 18 ------------------------------------------------------------------ The U.S. Trustee for Region will convene a meeting of creditors pursuant to 11 U.S.C. 341(a) in the Chapter 11 case of Digerati Technologies, Inc. on July 18, 2013, at 1:30 p.m. at Houston, 515 Rusk Suite 3401. Proofs of Claim are due by Oct. 16, 2013. About Digerati Technologies Digerati Technologies, Inc., filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 13-33264) in Houston, on May 30, 2013. Digerati Technologies, Inc. -- http://www.digerati-inc.com-- is a provider of cloud communication services. The Stafford, Texas- based company said its principal assets are subsidiaries with operations in Fairview, Montana; Williams County, North Dakota; and San Antonio, Texas. The Debtor disclosed $60 million in assets and $62.5 million in liabilities as of May 29, 2013. Bankruptcy Judge Jeff Bohm oversees the case. Digerati is represented by Edward L. Rothberg, Esq., at Hoover Slovacek, LLP, in Houston. DIGERATI TECHNOLOGIES: Submits List of Top Unsecured Creditors -------------------------------------------------------------- Digerati Technologies, Inc. submitted a list identifying its top 20 unsecured creditors. Creditors with the three largest claims are: Entity Nature of Claim Claim Amount ------ --------------- ------------ ATV Texas Ventures II, LLC $476,736 5050 Richardson Ave Suite 319 Houston, Texas Dr. Alfonso Torres Roqueni $407,658 Blvd. Miguel Avilla Camacho No. 184 Piso Colonia Lomas de San Isidro Mexico City, Mexico Thermo Credit, LLC $255,450 639 Layola Avenue Suite 2555 New Orleans, LA 70113 A copy of the creditors' list is available for free at: http://bankrupt.com/misc/DIGERATI_TECHNOLOGIES_creditors_list.pdf About Digerati Technologies Digerati Technologies, Inc., filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 13-33264) in Houston, on May 30, 2013. Digerati Technologies, Inc. -- http://www.digerati-inc.com-- is a provider of cloud communication services. The Stafford, Texas- based company said its principal assets are subsidiaries with operations in Fairview, Montana; Williams County, North Dakota; and San Antonio, Texas. The Debtor disclosed $60 million in assets and $62.5 million in liabilities as of May 29, 2013. Bankruptcy Judge Jeff Bohm oversees the case. Digerati is represented by Edward L. Rothberg, Esq., at Hoover Slovacek, LLP, in Houston. DISH NETWORK: Moody's Ratings Still on Review Despite Sprint Deal ----------------------------------------------------------------- Moody's Investors Service said that DISH Network Corporation's wholly owned subsidiary, DISH DBS Corporation's ("DISH DBS") Ba3 Corporate Family Rating (CFR) and related debt instrument ratings remain on review for possible downgrade, following the company's announced update on its proposal to merge with Sprint Nextel Corporation ("Sprint"; B1 CFR, under review). As DISH management has stated in a filing that "Sprint prematurely terminated our due diligence process and accepted extreme deal protections", and such revisions "made it impracticable for DISH to submit a revised offer by the June 18th deadline imposed by Sprint", Moody's believes that while DISH could still play the spoiler and resurface with another bid, at this juncture, DISH appears to have pulled back from pursuing a merger with Sprint. As the likelihood of such a transaction diminishes from when Moody's first put the company on review for downgrade in April 2013, this could lessen the severity of downward rating pressure on the company. However, the review will consider what other strategies DISH may pursue to develop a wireless broadband product, such as making a bid for another wireless company. It will also consider how successful DISH will be in its continued pursuit of a material stake in and a wireless partnership with Clearwire Communications LLC ("Clearwire"; Caa2 CFR on review for possible upgrade), and if successful, what the company may need to contribute to a potential joint venture in terms of additional spectrum or capital. In its most recent bid to Clearwire made on May 29, 2013, DISH committed up to $800 million in funding to support the build out of Clearwire's wireless network, and will pay $4.40 per share for Clearwire's outstanding common stock which would amount to over $1.6 billion for the minimum 25% stake required, and more if it is able to acquire a greater stake. Moody's also anticipates that the company will redeem the $2.5 billion in senior unsecured notes raised in May 2013 using cash from the established escrow account, in the event the Sprint merger does not occur by the escrow end date. Moody's would need to understand the magnitude as well as planned use of DISH's residual cash after these transactions, before concluding the review for downgrade on DISH's ratings. DISH is the third largest pay television provider in the United States, operating satellite services with approximately 14.1 million subscribers as of 3/31/2013. DISH NETWORK: S&P Affirms 'BB-' CCR & Removes From CreditWatch -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings on Englewood, Co.-based satellite TV provider DISH Network Corp., including its 'BB-' corporate credit rating. S&P removed the ratings from CreditWatch, where it placed them with negative implications on April 13, 2013. The rating outlook is negative. "The CreditWatch removal reflects less likelihood of a near-term downgrade, although ratings could still be pressured based on potential future investments or acquisitions related to DISH's wireless strategy," said Standard & Poor's credit analyst Michael Altberg. The rating affirmation follow DISH's announcement that it will not submit a revised bid for Sprint, and will instead concentrate on its $4.40 per share tender offer for Clearwire Corp. Assuming the company redeems its recent issuance of $2.6 billion of senior notes that were contingent on the Sprint acquisition, pro forma fully adjusted debt to EBITDA could decline to the mid-to-high 4x area under our base-case forecast for 2013, from approximately 6.1x as of March 31, 2013. Cash balances would still be over $9 billion, providing flexibility to pursue a 25% or greater stake in Clearwire without raising further capital. Still, S&P believes that leverage will remain high for the rating over the intermediate term, and could spike well over 5x due to additional network investments or potential acquisitions related to DISH's wireless initiatives. In S&P's opinion, while a minority stake in Clearwire could enable DISH to negotiate a spectrum sharing agreement, further network investments in Clearwire, as well as its own network build-out, would be likely. Alternative scenarios could include potential acquisitions of or partnerships with other wireless providers, all of which carry uncertainty regarding funding needs. The negative rating outlook reflects the potential for a downgrade if future wireless-related investments or acquisitions cause leverage to increase to above 5x for a sustained period. The 5x leverage threshold reflects S&P's current view of the company's fair business risk profile, which could change longer term depending on the prospects of its wireless strategy. Over the near term, however, S&P would not expect a positive revision in the company's business risk profile given its mature core video business, as well as its view that any future wireless product offering would require meaningful additional investments, and be subject to significant execution risk. An outlook revision to stable, which S&P believes is unlikely over the near term regardless of the outcome on Clearwire, would require greater confidence that the company could pursue a wireless strategy while maintaining adequate liquidity and leverage below 5x. Additionally, such a scenario would incorporate relatively stable performance in its pay-TV business. DOGWOOD PROPERTIES: Disclosure Statement Hearing Set for July 17 ---------------------------------------------------------------- Judge Jennie D. Latta of the U.S. Bankruptcy Court for the Western District of Tennessee will convene a hearing to consider the adequacy of the disclosure statement explaining Dogwood Properties, G.P.'s Chapter 11 Plan on July 17, 2013, at 10:00 a.m. Objections to the disclosure statement are due July 10. The Plan provides that the Debtor continue operating under existing management. Brad Rainey, individually, will remain the president of the Debtor. The Debtor's property will be managed by Reed & Associates and members of the Debtor's staff. The Plan provides that claims will be paid from future operations and the collection of rents. A full-text copy of the Disclosure Statement, dated June 10, 2013, is available for free at: http://bankrupt.com/misc/DOGWOODds0610.pdf Sycamore Bank, a secured creditor, objects to the Disclosure Statement, complaining that it does not adequately address the repayment of the Sycamore debt and the financial protection used in the Plan is not properly reflected to show a reasonable confirmation of a feasible Chapter 11 Plan. Russell W. Savory, Esq., at Gotten, Wilson, Savory & Beard, PLLC, in Memphis, Tennessee, represents the Debtor. Eric L. Sappenfield, Esq., in Southaven, Mississippi, represents Sycamore Bank. 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. EASTMAN KODAK: Enters Into Exit Financing Package Agreement ----------------------------------------------------------- Eastman Kodak Company on June 20 disclosed that it has reached agreements with leading financial institutions J.P. Morgan, Bank of America Merrill Lynch, and Barclays to arrange new post- emergence credit facilities of up to $895 million. Affiliates of J.P. Morgan, Barclays and Bank of America Merrill Lynch will serve as Joint Lead Arrangers for senior secured term loans of up to $695 million. In addition to this term financing, affiliates of Bank of America Merrill Lynch, Barclays and J.P. Morgan will act as Joint Lead Arrangers for a new senior secured asset-based revolving credit facility of up to $200 million, and have committed to provide $130 million of this facility, subject to the satisfaction of certain conditions. This comprehensive financing package will enable Kodak, at emergence, to repay its secured creditors under the current senior and junior Debtor-in-Possession loan facilities, finance its exit from Chapter 11, and meet the company's post-emergence working capital and liquidity needs. The proposed term loan financing is expected to provide the company with more favorable terms compared to the existing rollover exit financing commitment. "The new financing, combined with other recent significant milestones in our restructuring -- including the rights offering, Amended Plan of Reorganization, and Eastman Business Park settlement -- will position Kodak for a bright long-term future," said Antonio M. Perez, Kodak's Chairman and Chief Executive Officer. The financing agreements are subject to conditions, including, among others, approval by the Bankruptcy Court, completion of definitive financing documentation, and a successful syndication in the loan markets. Kodak also will file an Amended Disclosure Statement with the Bankruptcy Court in the coming days, which will include, among other things, provisions pertaining to the previously announced Rights Offering Agreement and financing agreements. The Disclosure Statement is subject to approval by the Court. 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. EASTMAN KODAK: Amends Plan to Pay Second-Lien Notes in Full ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Eastman Kodak Co. changed course by filing a revised Chapter 11 reorganization plan on June 18 where holders of the remaining $375 million in second-lien notes will no longer be given 85 percent of the new stock, for projected full payment. According to the report, instead, noteholders will be paid off in cash, with funds provided by a backstopped $406 million equity- rights offering for 85 percent of equity in the reorganized business. In return for a 5 percent commitment fee, GSO Capital Partners LP, BlueMountain Capital Inc., George Karfunkel, United Equities Group and Contrarian Capital agree to purchase any of the stock not taken by creditors. In a statement June 18 and companion filings in the U.S. Bankruptcy Court in New York, Kodak said the rights offering will be made available to "general unsecured creditors." The report notes that Kodak said it will file a revised disclosure statement "as soon as practicable" in advance of the June 25 approval hearing. At the same hearing, Kodak will be asking the court to approve a commitment agreement for the rights offering. According to the report, the revised plan allows second-lien noteholders to vote on the offer for payment of principal and interest in cash, at the non-default rate. If noteholders accept, they will receive $20 million in lieu of their claims for a make- whole premium, or additional payment in return for early repayment of the debt. If noteholders reject, the validity of their claims will be determined by the court. The report relates that the purchase price for the stock under the offering is $11.94 for each of 34 million shares. The official creditors' committee supports the offering, according to Kodak. The company expects to emerge from bankruptcy within 90 days. The agreement contains a so-called no-shop clause where Kodak can't look for a better offer although the company can accept an unsolicited proposal. The report says that in the revised plan, 6 million shares, or 15 percent of the new stock, is for unsecured creditors with $2.7 billion in claims and retirees who have a $635 million claim from the loss of retirement benefits. 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. EASTMAN KODAK: Court Approves Settlement with U.K. Pension Plan --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York on June 20 approved Kodak's previously announced comprehensive settlement agreement with the U.K. Kodak Pension Plan (KPP), the company's largest single creditor with respect to its Chapter 11 Plan of Reorganization. In approving the agreement, the Court described it as "a critical step forward in Kodak's effort to consummate its Plan of Reorganization." With the agreement, announced on April 29, Kodak's Personalized Imaging (PI) and Document Imaging (DI) businesses will be spun off under the ownership of KPP. "We have been working in close cooperation with KPP to achieve a smooth transition for our PI and DI employees and customers to a new owner -- one who clearly recognizes the value of these businesses and intends to help them grow and succeed," said Antonio M. Perez, Kodak Chairman and Chief Executive Officer. "We look forward now to completing our reorganization and emerging as a company focused on Commercial Imaging." Steven Ross, Independent Chairman of the Kodak Pension Plan, said, "I am delighted that the court has approved the settlement involving the transfer of the PI and DI businesses to KPP. This is by far the best option available for KPP, which is acquiring two profitable businesses that will provide substantial ongoing income to the fund. The income that these two businesses generate will enable KPP to remain outside of the Pension Protection Fund (PPF) and to offer our members a new pension plan that will provide all of them with better benefits than they would have received in the PPF. I am pleased to say that the feedback the Trustees are receiving from members at presentations currently being held around the UK is highly encouraging. I look forward to working alongside the management and staff of the PI and DI businesses - who have remained loyal and focused during this process -- as we build a firm future for them and for our members." The consummation of the KPP settlement is expected to occur after confirmation of the company's Plan of Reorganization. Earlier this week, Kodak proposed rights offerings, an agreement with New York State on Eastman Business Park, and the engagement of arrangers for new financing, all key steps toward the confirmation of the company's Plan of Reorganization and emergence. Not a Sub Rosa Plan Eastman Kodak Co. on Wednesday defended its proposed deal with its U.K. pension fund to settle the biggest unsecured claim in the company's bankruptcy case. In a June 19 filing, Kodak lashed back at STWB Inc. and 14 other companies whose objections have not been resolved by the revisions made earlier by Kodak to the proposed order approving the settlement. Kodak denied STWB's claim that the settlement is a sub rosa plan that would deprive creditors of a "meaningful" vote on the company's Chapter 11 reorganization plan. According to Kodak, the proposed deal would resolve a major hurdle to the company's emergence from bankruptcy but it doesn't dictate the terms of the plan. The company also said the terms of recoveries by other stakeholders are set forth in the plan, which needs approval by those stakeholders. "The KPP global settlement in no way short circuits the requirements of Chapter 11 for confirmation of a reorganization plan," Kodak said. It asked U.S. Bankruptcy Judge Allan Gropper to overrule the objection by STWB, which asserts a $250 million claim against the company. Kodak also asked to overrule the objections of tech firms and other companies, which are not yet satisfied with the additional language inserted in the company's proposed order protecting their rights under their license agreements. The company said each licensee is already "adequately protected" by the preservation of its interests under the proposed order, and that the proposed form of order previously filed by Nikon Corp. is no longer necessary. Kodak's official committee of unsecured creditors expressed support for court approval of the settlement. "Absent the KPP global settlement, the pension plan may seek to enforce its primary claim against the sponsor of the pension plan, Kodak Limited, which is the debtors' primary UK subsidiary and is of critical value to Kodak's global operations," the committee said. Meanwhile, the proposed settlement drew flak from D.L. Peterson Trust and PHH Vehicle Management Services, LLC. Both said they oppose any proposed assumption or rejection of their lease agreement with Kodak. In 2008, Kodak signed an agreement which let the company lease vehicles from D.L. Peterson and PHH Vehicle for its business operations. 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. EASTMAN KODAK: Partners with NY on Eastman Business Park -------------------------------------------------------- Eastman Kodak Company and the State of New York have agreed on a partnership, subject to Bankruptcy Court approval, to drive several key initiatives at Eastman Business Park (EBP) in an effort to enhance regional economic development opportunities at the site, considered by Governor Andrew M. Cuomo's Finger Lakes Regional Economic Development Council to be the area's number one development priority. As one major component, the State and Kodak have reached an agreement to establish a $49 million environmental trust for EBP, Kodak's primary manufacturing site for more than a century, which has developed into one of the country's largest, most diverse industrial and technology parks. Under the agreement, which is subject to Court approval and the satisfaction of certain conditions, the trust would ensure continued environmental oversight, while addressing environmental obligations into the future -- including an extension of the current protections for the site that Kodak has in place with the New York State Department of Environmental Conservation (DEC). The creation of the trust fund would also help drive further strategic economic development initiatives at this multi-use, multi-tenant campus -- and would fairly settle legacy environmental claims under Kodak's recently-filed Plan of Reorganization. "[Wednes]day's agreement with Kodak on the future of Eastman Business Park is great news for the community of Rochester," Governor Cuomo said. "Under this agreement, which addresses environmental, operations and management concerns, we are insuring that EBP will remain a major and stable economic driver in the City, growing existing businesses, attracting new investments and creating jobs for the entire Finger Lakes region. I thank all the stakeholders for coming together for a compromise that works for New Yorkers." "These important activities all combine to provide the right answer at the right time, serving the public and community interests in protecting the environment and strengthening economic development initiatives, while also facilitating Kodak's emergence from Chapter 11," said Antonio M. Perez, Kodak Chairman and Chief Executive Officer. "Reaching this agreement helps ensure that Eastman Business Park can fulfill its potential for being an engine of regional economic development." In parallel with the development of the trust, the previously- announced sale of Kodak's utility infrastructure to Recycled Energy Development (RED) is also targeted for completion promptly after approval of the agreement by the Court. RED will acquire the comprehensive EBP utilities infrastructure and continue to supply electricity, steam, water, refrigeration, compressed air, and nitrogen, as well as treat wastewater for EBP. Tenants and property owners, including Kodak, will continue to enjoy reliable and economical utility services -- another critical step in the collective efforts to revitalize the Park. Kodak's ongoing commitment to EBP will be an important driver to those future development plans, with the company maintaining substantial space and operations at EBP. This includes a variety of advanced manufacturing operations, in addition to the Kodak Technical Center, the company's largest worldwide center for advanced-technology research and development. Eastman Business Park is now home to 6,000 employees working for Kodak and approximately 40 tenants and property owners. A growing number of companies in the energy storage, functional film and biomaterials space are choosing to locate to EBP, due to the unique blend of infrastructure, innovation and skilled workforce capabilities that exist on site. About Eastman Business Park Eastman Business Park -- http://www.eastmanbusinesspark.com-- is a unique, multi-use advanced manufacturing and research center in Rochester, N.Y. This 1,200 acre campus encompasses over 100 buildings, 2.5 million square feet of space, and over 50 miles of integrated roads and rail. Often referred to as a 'city within a city,' EBP possesses a self-generated utility infrastructure, plus bench top to prototype analytical tools and equipment supporting the acceleration to commercialization of clean technology products in the materials science space. 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 $635 million claim from the loss of retirement benefits. ELBIT IMAGING: Adjusts Plan of Arrangement Over Expert Opinion -------------------------------------------------------------- Elbit Imaging Ltd. said that following the receipt of the opinion of Roni Alroy, CPA, the Court-appointed expert and in light of the Expert Opinion, its board of directors has resolved to make adjustments to the original plan of arrangement filed by the Company with the Tel Aviv District Court and to file an amended plan of arrangement. The adjustments to the Original Plan of Arrangement include the following: * The Company would issue two series of new notes in the aggregate principal amount of NIS 500 million (approximately US$ 136 million), rather than issue one series of new notes in the aggregate principal amount of NIS 300 million pursuant to the Original Plan of Arrangement. The first series of New Notes would be in the aggregate principal amount of NIS 400 million (approximately US$ 109 million), repayable in a single payment at the end of six years from the date of issuance, and secured by a first ranking floating charge on all property and assets of the Company. The second series of New Notes would be in the aggregate principal amount of NIS 100 million (approximately US$ 27 million), repayable in a single payment at the end of eight years from the date of issuance, and secured by a second ranking floating charge on all property and assets of the Company. Both series of the New Notes would bear interest at the rate of 6 percent per annum and would not be linked to the consumer price index. Interest on the first series of New Notes would be payable in cash on a semi-annual basis, while interest on the second series of New Notes would be payable on the final maturity date, subject to prepayment in the sole discretion of the Company. The liens securing the New Notes would be subject to customary exceptions. In addition, at any time during the term of either series of the New Notes, the Company may create a senior lien in order to refinance the Company's outstanding indebtedness to Bank Hapoalim B.M. * The Company would issue to its unsecured financial creditors, in exchange for the remaining debt in excess of said NIS 500 million (approximately US$ 136 million), ordinary shares representing, immediately following that issuance, 90 percent of the Company's outstanding share capital on a fully diluted basis (excluding certain options as described in the Original Plan of Arrangement), rather than ordinary shares representing 86 percent of the Company's outstanding share capital on a fully diluted basis pursuant to the Original Plan of Arrangement. This number of ordinary shares to be issued as part of the Amended Plan of Arrangement was determined after taking into account the adjustments described herein and an analysis prepared for the Company by Fahn Kahne & Co. - Grant Thornton Israel. The Company has filed the full Hebrew-language analysis on the Web site of the Israel Securities Authority and will prepare and post a full English translation of the analysis on the Company's Web site at www.elbitimaging.com as soon as possible. * Mordechay Zisser, the Company's chief executive officer, executive president and member of the Company's board of directors (who is also an indirect controlling shareholder of the Company), would not be included in the proposed release from potential liability and claims provided to the Company's other officers and directors, without derogating from any right, including his existing rights of indemnification and insurance coverage. The provisions in the Original Plan of Arrangement regarding the right to unilaterally terminate existing transactions between the Company or a company under the Company's control and Mr. Zisser or any entity under his control or in which Mr. Zisser or any entity under his control have a personal interest will not be included in the Amended Plan of Arrangement. * The Amended Plan of Arrangement accepts and incorporates the Court-appointed expert's recommendation in regards to the Company's holdings in Elbit Medical Technologies Ltd., which provides that the new corporate organs of the Company, as appointed after the closing of the Plan of Arrangement, should be assigned the task of examining the issue of realization of the shares of Elbit Medical, and if it will be practicable to benefit from a significant short term economic profit from the realization (whether by means of distribution or in some other way), then the aforesaid realization should be considered. The Company wishes to negotiate with the Bank in an attempt to reach an agreement pursuant to which the Bank would join the Amended Plan of Arrangement as a party and the parties will amend the terms of the Company's current outstanding indebtedness to the Bank in the amount of approximately US$58 million (approximately NIS 213 million) in exchange for ordinary shares of the Company and warrants to purchase ordinary shares of the Company to be issued to the Bank. It is emphasized, however, that the Amended Plan of Arrangement is not contingent upon a restructuring of the Bank's debt and may be pursued also on the basis of the current terms of the loan (assuming the Bank will not pursue the immediate repayment thereof). In the event that the parties cannot reach an agreement and the Bank continues to demand immediate repayment of the outstanding indebtedness owed to it by the Company (as described in the Company's announcements dated June 6, 2013, and June 12, 2013), the Company will seek other financing sources to repay the outstanding indebtedness owed to the Bank. Meanwhile, Elbit Imaging has placed an Investor Relations Presentation relating to its restructure of corporate debt on the Company's Web site at: www.elbitimaging.com under: "Investor Relations - Company, Presentation". About Elbit Imaging Tel-Aviv, Israel-based Elbit Imaging Ltd. (TASE, NASDAQ: EMITF) hold investments in real estate and medical companies. The Company, through its subsidiaries, also develops shopping and entertainment centers in Central Europe and invests in and manages hotels. Elbit Imaging disclosed a loss of NIS455.50 million on NIS671.08 million of total revenues for the year ended Dec. 31, 2012, as compared with a loss of NIS247.02 million on NIS586.90 million of total revenues for the year ended Dec. 31, 2011. The Company's balance sheet at Dec. 31, 2012, showed NIS7.09 billion in total assets, NIS5.67 billion in total liabilities, NIS309.60 million in equity to holders of the Company and NIS1.11 billion in noncontrolling interest. Brightman Almagor Zohar & Co., in Tel-Aviv, Israel, expressed substantial doubt about Elbit Imaging's ability to continue as a going concern following the financial results for the year ended Dec. 31, 2012. The Certified Public Accountants noted that in the period commencing Feb. 1, 2013, through Feb. 1, 2014, the Company is to repay its debenture holders NIS 599 million (principal and interest). "Said amount includes NIS 82 million originally payable on Feb. 21, 2013, that its repayment was suspended following a resolution of the Company's Board of Directors. The Company's Board also resolved to suspend any interest payments relating to all the Company's debentures. In addition, as of Dec. 31, 2012, the Company failed to comply with certain financial covenants relating to bank loans in the total amount as of such date of NIS 290 million. "These matters raise substantial doubt about the Company's ability to continue as a going concern." ELEPHANT TALK: Has Until Aug. 31 to Regain NYSE Compliance ---------------------------------------------------------- Elephant Talk Communications Corp. said that, on June 13, 2013, the NYSE MKT notified the Company that it made a reasonable demonstration of its ability to regain compliance with the continued listing requirements of the Exchange. The Exchange notified the Company that while it is not in compliance with the continued listing standards of the Exchange, its listing is being continued pursuant to an extension. Specifically, the period in which the Company may regain compliance in accordance with Section 1003(a)(iv) of the Company Guide of the NYSE MKT has been extended to Aug. 31, 2013. The Company received notice from NYSE MKT Staff dated May 17, 2013, indicating that the Company was below one of the Exchange's continued listing standards set forth in Section 1003(a)(iv), which applies if a listed company has sustained losses in relation to its overall operations or its existing financial resources, or its financial condition has become so impaired that it is questionable, in the opinion of the Exchange, as to whether the listed company will be able to continue its operations or meet its obligations as they mature. During the extension period, the Company will be subject to periodic review by the Staff of the Exchange. The failure by the Company to make progress consistent with the accepted plan or to regain compliance with the continued listing standards by the end of the extension period could result in the Company being delisted from the Exchange. "The notice that the Exchange has accepted Elephant Talk's plan to regain compliance comes in conjunction with the Company's plan to raise $12 million in equity funding and the $1.5 million of funding the Company received in May," stated Steven van der Velden, Chairman and CEO of Elephant Talk. "With these important developments, the Company is better-positioned for future progress and growth." About Elephant Talk Lutz, Fla.-based Elephant Talk Communications, Inc. (OTC BB: ETAK) -- http://www.elephanttalk.com/-- is an international provider of business software and services to the telecommunications and financial services industry. Elephant Talk disclosed a net loss attributable to the Company of $23.13 million in 2012, a net loss attributable to the Company of $25.31 million in 2011 and a net loss attributable to the Company of $92.48 million in 2010. The Company's balance sheet at March 31, 2013, showed $34.47 million in total assets, $18.29 million in total liabilities, and $16.18 million in total stockholders' equity. BDO USA, LLP, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations has an accumulated deficit of $203.3 million and continues to generate negative cash flows that raise substantial doubt about its ability to continue as a going concern. EXIDE TECHNOLOGIES: Amends Fiscal 2013 Form 10-K ------------------------------------------------ Exide Technologies has amended its annual report on Form 10-K for the fiscal year ended March 31, 2013, to furnish the certifications of the chief executive officer and chief financial officer required by Section 906 of the Sarbanes-Oxley Act of 2002 and Item 601(b)(32) of Regulation S-K, which were accidentally omitted from the 10-K. No other changes have been made to the 10-K, and the amendment has not been updated to reflect events occurring subsequent to the filing of the 10-K. A copy of the amended Form 10-K is available for free at http://is.gd/KuvmuG 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. EXIDE TECHNOLOGIES: Has Diverse Creditors' Committee ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Exide Technologies has an official creditors' committee with seven members. The U.S. Trustee in Delaware formed a committee including the United Steelworkers union, the Pension Benefit Guaranty Corp. and indenture trustee U.S. Bank NA. Three trade suppliers and a fund affiliated with Esopus Creek Advisors round out the panel. The committee selected Lowenstein Sandler PC to serve as its legal counsel, the Roseland, New Jersey-based firm said in an e-mail. 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. In the 2013 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 TECHNOLOGIES: Lowenstein Sandler to Represent Creditors ------------------------------------------------------------- Lowenstein Sandler LLP was selected as creditor's counsel in the bankruptcy proceeding for Exide Technologies which filed Chapter 11 protection on June 10, 2013, with $1.8 billion in liabilities. 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. EXIDE TECHNOLOGIES: DIP Agent's Fee Letter Filed Under Seal ----------------------------------------------------------- Exide Technologies sought and obtained an order (i) authorizing the filing under seal of the fee letter, dated as of June 7, 2013, signed with JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC, and (ii) directing the fee letter to be made available only to the U.S. Trustee and the advisors to any statutory committee on a strictly confidential and "professionals' eyes only" basis. The Debtor explained that the public disclosure of the confidential and proprietary information in the Fee Letter has the potential to harm JPMorgan Chase's business as DIP Agent and to impair the DIP Agent's ability to syndicate the DIP facilities in the future. JPMorgan Chase Bank and prepetition noteholders are providing DIP financing comprised of: (i) a first-out superpriority, secured, asset-based revolving credit facility in the principal amount of $225,000,000; and (ii) a second-out superpriority, multiple-draw secured term loan facility in an aggregate principal amount of $275,000,000. The Honorable Judge Kevin J. Carey has authorized the Company to access up to $395 million of the DIP Financing Facility -- the full $225 million of the ABL revolving credit facility and $170 million of the term loan facility. A hearing is slated for July 11, 2013 at 10:00 a.m., when Judge Carey will consider whether to grant final approval of the DIP loans and allow the Debtor to access the remaining $105 million. Objections are due July 3. 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. In the 2013 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. FINJAN HOLDINGS: Star Bird Held 6.5% Equity Stake at June 3 ----------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Star Bird Holdings Limited and its affiliates disclosed that, as of June 3, 2013, they beneficially owned 17,543,187 shares of common stock of Finjan Holdings, Inc., representing 6.54 percent of the shares outstanding. A copy of the regulatory filing is available at http://is.gd/3QcESh About Finjan Finjan is a leading online security and technology company which owns a portfolio of patents, related to software that proactively detects malicious code and thereby protects end-users from identity and data theft, spyware, malware, phishing, trojans and other online threats. Founded in 1997, Finjan is one of the first companies to develop and patent technology and software that is capable of detecting previously unknown and emerging threats on a real-time, behavior-based basis, in contrast to signature-based methods of intercepting only known threats to computers, which were previously standard in the online security industry. Converted Organics disclosed a net loss of $8.42 million in 2012, as compared with a net loss of $17.98 million in 2011. The Company's balance sheet at March 31, 2013, showed $2.66 million in total assets, $5.19 million in total liabilities, and a $2.53 million total stockholders' deficit. Moody, Famiglietti & Andronico, LLP, in Tewksbury, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012, citing recurring losses and negative cash flows from operations and an accumulated deficit that raises substantial doubt about the Company's ability to continue as a going concern. FLINTKOTE COMPANY: Case Re-Assigned to Judge Mary F. Walrath ------------------------------------------------------------ The Chapter 11 case of The Flintkote Company is re-assigned to Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware in line with the recent retirement of former Bankruptcy Judge Judith Fiztgerald. About The Flintkote Company Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. Flintkote Mines Limited is a subsidiary of Flintkote Company and is engaged in the mining of base-precious metals. The Flintkote Company filed for Chapter 11 protection (Bankr. D. Del. Case No. 04-11300) on April 30, 2004. Flintkote Mines Limited filed for Chapter 11 relief (Bankr. D. Del. Case No. 04-12440) on Aug. 25, 2004. Kevin T. Lantry, Esq., Jeffrey E. Bjork, Esq., Dennis M. Twomey, Esq., Jeremy E. Rosenthal, Esq., and Christina M. Craige, Esq., at Sidley Austin, LLP, in Los Angeles; James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones LLP, in Wilmington, Del., represent the Debtors in their restructuring efforts. Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, N.Y.; Peter Van N. Lockwood, Esq., Ronald E. Reinsel, Esq., at Caplin & Drysdale, Chartered, in Washington, D.C.; and Philip E. Milch, Esq., at Campbell & Levine, LLC, in Wilmington, Del., represent the Asbestos Claimants Committee as counsel. When Flintkote Company filed for protection from its creditors, it estimated more than $100 million each in assets and debts. When Flintkote Mines Limited filed for protection from its creditors, it estimated assets of $1 million to $50 million, and debts of more than $100 million. FREESEAS INC: Receives Non-Compliance Notice From NASDAQ -------------------------------------------------------- FreeSeas Inc. received a letter from The NASDAQ Stock Market, notifying the Company that for the last 30 consecutive business days, the closing bid price of the Company's common stock has been below $1.00 per share, the minimum closing bid price required by the continued listing requirements of NASDAQ set forth in Listing Rule 5450(a)(1). In accordance with Listing Rule 5810(c)(3)(A), the Company has 180 calendar days, or until Dec. 16, 2013, to regain compliance with the Rule. To regain compliance, the closing bid price of the Company's common stock must be at least $1.00 per share for a minimum of 10 consecutive business days during the Compliance Period. The NASDAQ notification has no effect at this time on the listing of the Company's common stock on the NASDAQ Capital Market. If the Company does not regain compliance by Dec. 16, 2013, NASDAQ will provide written notification to the Company that its common stock may be delisted. The Company may, however, be eligible for an additional grace period of 180 calendar days if it satisfies the continued listing requirement for market value of publicly held shares and all other initial listing standards (with the exception of the Bid Price Rule) for listing on the NASDAQ Capital Market, and submits a timely notification to NASDAQ of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split of the shares of its Common Stock, if necessary. The Company may also appeal NASDAQ's delisting determination to a NASDAQ Hearings Panel. There is no assurance as to the price at which the Company's common stock will trade. The Company intends to actively monitor the bid price for its common stock during the Compliance Period, and if the common stock continues to trade below the minimum bid price required for continued listing, the Company's board of directors will consider its options to regain compliance with the continued listing requirements. About FreeSeas Inc. Headquartered in Athens, Greece, FreeSeas Inc., formerly known as Adventure Holdings S.A., was incorporated in the Marshall Islands on April 23, 2004, for the purpose of being the ultimate holding company of ship-owning companies. The management of FreeSeas' vessels is performed by Free Bulkers S.A., a Marshall Islands company that is controlled by Ion G. Varouxakis, the Company's Chairman, President and CEO, and one of the Company's principal shareholders. The Company's fleet consists of six Handysize vessels and one Handymax vessel that carry a variety of drybulk commodities, including iron ore, grain and coal, which are referred to as "major bulks," as well as bauxite, phosphate, fertilizers, steel products, cement, sugar and rice, or "minor bulks." As of Oct. 12, 2012, the aggregate dwt of the Company's operational fleet is approximately 197,200 dwt and the average age of its fleet is 15 years. Freeseas disclosed a net loss of US$30.88 million in 2012, a net loss of US$88.19 million in 2011, and a net loss of US$21.82 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed US$114.35 million in total assets, $106.55 million in total liabilities and US$7.80 million in total shareholders' equity. RBSM LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred recurring operating losses and has a working capital deficiency. In addition, the Company has failed to meet scheduled payment obligations under its loan facilities and has not complied with certain covenants included in its loan agreements. It has also failed to make required payments to Deutsche Bank Nederland as agreed to in its Sept. 7, 2012, amended and restated facility agreement and received notices of default from First Business Bank. Furthermore, the vast majority of the Company's assets are considered to be highly illiquid and if the Company were forced to liquidate, the amount realized by the Company could be substantially lower that the carrying value of these assets. These conditions among others raise substantial doubt about the Company's ability to continue as a going concern. GENERAL STEEL: Incurs $231.9 Million Net Loss in 2012 ----------------------------------------------------- General Steel Holdings, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K disclosing a net loss of $231.93 million on $1.96 billion of sales for the year ended Dec. 31, 2012, as compared with a net loss of $283.29 million on $2.45 billion of sales for the year ended Dec. 31, 2011. As of Dec. 31, 2012, the Company had $2.65 billion in total assets, $3.08 billion in total liabilities and a $436 million total deficiency. A copy of the Form 10-K is available for free at: http://is.gd/hid9p5 3rd Quarter Results In a separate Form 10-Q filing, the Company reported a net loss of $66.21 million on $711.42 million of total sales for the three months ended Sept. 30, 2012, as compared with a net loss of $22.33 million on $998.16 million of total sales for the same period a year ago. For the nine months ended Sept. 30, 2012, the Company had a net loss of $164.09 million on $2.14 billion of total sales, as compared with a net loss of $71.49 million on $2.77 billion of total sales for the same period during the prior year. As of Sept. 30, 2012, the Company had $2.60 billion in total assets, $2.97 billion in total liabilities and a $368.27 million total deficiency. A copy of the Form 10-Q is available for free at: http://is.gd/JklJNa About General Steel Holdings General Steel Holdings, Inc., headquartered in Beijing, China, produces a variety of steel products including rebar, high-speed wire and spiral-weld pipe. The Company has operations in China's Shaanxi and Guangdong provinces, Inner Mongolia Autonomous Region and Tianjin municipality with seven million metric tons of crude steel production capacity under management. For more information, please visit www.gshi-steel.com. GLOBAL BRASS: Moody's Affirms B2 CFR; Changes Outlook to Stable --------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Global Brass and Copper, Inc., including the Corporate Family Rating at B2, but changed the outlook to stable from positive. Moody's also assigned a Speculative Grade Liquidity rating of SGL-3. The stabilization of the outlook reflects Moody's expectation that demand for GBC's copper and brass products will be less robust than originally anticipated due the modest pace of economic growth in North America. As a result the company's margins, cash generation and debt protection measures are unlikely to support a higher rating. Moody's also notes that the company's aggressive distributions to shareholders will contribute to leverage remaining high. The following ratings/assessments were affected by this action: Corporate Family Rating affirmed at B2; Probability Default Rating affirmed at B2-PD; and, Senior secured notes due 2019 affirmed at B3 (LGD4, 68%). Speculative grade liquidity rating of SGL-3 is assigned Ratings Rationale: GBC's B2 Corporate Family Rating reflects the cyclicality of the company's end markets, as well as its exposure to volatility in metals prices. Although the company's "balanced book" approach to managing its inventory dampens the impact of fluctuations in raw materials prices, GBC remains highly sensitive to declines in sales volumes. Recent operating performance is less robust than Moody's expected due to reduced demand, resulting in credit metrics that do not support a higher rating at this time. The rating also takes into consideration GBC's leveraged capital structure and its ability to generate significant levels of earnings, and hence, free cash flow relative to its debt service requirements and debt outstanding. Moody's forecasts interest coverage -- measured as EBITA-to-interest expense -- remaining below 2.5 times, and free cash flow-to-debt below 5.0% over the next 12 months. Debt-to-book capitalization will remain elevated at close to 80% (all ratios incorporate Moody's standard adjustments). However, Moody's recognizes the company's broad range of products and its end market diversification as strengths. GBC manufactures an extensive array of brass and copper products that are sold into a wide range of end markets including defense, automotive, building and households, machinery and transportation and electronics. Also, availability under GBC's $200 million asset- based revolving credit facility is substantial, providing the company financial flexibility to meet seasonal working capital needs and capital expenditures, and also to support potential growth opportunities. The change in rating outlook to stable from positive reflects our view that GBC's key debt credit metrics will remain below levels previously identified as those that could result in positive rating actions. Also, by opting to apply 100% of the company's IPO proceeds to pay a dividend, KPS Capital Partners, GBC's majority owner, missed an opportunity to reduce balance sheet debt and improve credit metrics to levels that could have supported higher ratings. The SGL-3 speculative grade liquidity rating reflects our view that GBC will maintain an adequate liquidity profile over the next 12 months, as Moody's forecasts the company will need to rely on its revolving credit facility to fund seasonal working capital needs. The company's principal liquidity source is its largely undrawn $200 million asset-based revolving credit facility, which was fully collateralized with approximately $175 million of remaining availability as of March 31, 2013. There are no material debt maturities during the coming twelve months and the company's free cash generation should be modestly positive after capital expenditures and working capital requirements. Positive rating actions are possible once GBC operating performance improves such that EBITA-to-interest expense is sustained above 3.0 times and free cash flow-to-debt sustained above 7.5% (all ratios incorporate Moody's standard adjustments). A better liquidity profile would support positive rating actions as well. A rating downgrade could be triggered by an unexpected decline in GBC's end markets or performance falling below our expectations. EBITA-to-interest expense remaining below 2.0 times and free cash flow-to-debt sustained below 2.5% for an extended period of time (all ratios incorporate Moody's standard adjustments) could pressure the ratings. Deterioration in the company's liquidity profile could negatively impact the ratings as well. The principal methodology used in this rating was the Global Manufacturing Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Global Brass and Copper, Inc., headquartered in Schaumburg, IL, is North America's leading manufacturer and distributor of copper and brass products, operating through three businesses - Olin Brass, Chase Brass, and A.J. Oster. KPS Capital Partners, through its affiliates, is the majority owner of GBC. Revenues for the twelve months through March 31, 2013 totaled about $1.7 billion. GMX RESOURCES: Directors T.J. Boismier and Mike Cook Resign ----------------------------------------------------------- T. J. Boismier and Michael G. Cook notified GMX Resources Inc. of their resignations from the Company's Board of Directors by separate resignation letters, effective as of June 13, 2013. About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. GMX Resources filed a Chapter 11 petition in its hometown (Bankr. W.D. Okla. Case No. 13-11456) on April 1, 2013, so secured lenders can buy the business in exchange for $324.3 million in first-lien notes. GMX missed a payment due in March 2013 on $51.5 million in second- lien notes. Other principal liabilities include $48.3 million in unsecured convertible senior notes. The DIP financing provided by senior noteholders requires court approval of a sale within 75 days following approval of sale procedures. The lenders and principal senior noteholders include Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors Inc. and Whitebox Advisors LLC. The Official Committee of Unsecured Creditors tapped Winston & Strawn LLP as its counsel. GREYSTONE LOGISTICS: Files Schedule 13E-3 with SEC -------------------------------------------------- Greystone Logistics, Inc., on June 18, 2013, filed with the U.S. Securities and Exchange Commission a Schedule 13E-3 to report a going private transaction. The Schedule 13E-3 was filed jointly by the Company, Warren F. Kruger, Robert B. Rosene, Jr., Larry J. LeBarre and William W. Rahhal. Concurrently with the filing of the Schedule 13E-3, the Company also filed a proxy statement pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended. A copy of the regulatory filing is available for free at: http://is.gd/VTsuUz About Greystone Logistics Tulsa, Okla.-based Greystone Logistics, Inc. (OTC BB: GLGI.OB - News) -- http://www.greystonelogistics.com/-- manufactures and sells plastic pallets through its wholly owned subsidiary, Greystone Manufacturing, LLC. Greystone sells its pallets through direct sales and a network of independent contractor distributors. Greystone also sells its pallets and pallet leasing services to certain large customers direct through its President, Senior Vice President of Sales and Marketing and other employees. Greystone reported net income of $2.49 million for the year ended May 31, 2012, compared with a net loss of $847,204 during the prior fiscal year. For the nine months ended Feb. 28, 2013, the Company reported net income of $1.27 million on $16.70 million of sales, as compared with net income of $914,939 on $16.87 million of sales for the nine months ended Feb. 29, 2012. The Company's balance sheet at Feb. 28, 2013, showed $12.71 million in total assets, $18.15 million in total liabilities and a $5.44 million total deficit. GROUP HEALTH: Fitch Affirms 'BB+' Issuer Default Rating ------------------------------------------------------- Fitch Ratings has affirmed Group Health Cooperative's (GHC) and subsidiary Group Health Options, Inc.'s (GHO) (collectively Group Health) Insurer Financial Strength (IFS) ratings at 'BBB-'. Fitch has also affirmed the ratings on senior secured bonds issued by the Washington Health Care Facilities Authority (WHCFA) on behalf of Group Health at 'BBB-'. The Rating Outlooks are Stable. Key Rating Drivers Group Health's ratings continue to reflect the company's strong market position in Washington, leverage and capitalization metrics that are consistent with or better than Fitch's 'BBB' rating category guidelines, and support for the company's various obligations provided by its high-quality investment portfolio. The ratings also reflect the impact of the company's geographically concentrated membership and operating profile, comparatively small size and scale benefits, and weak long-term financial results. Based on 2012 direct premiums, Group Health is the largest health insurance and managed care-company in Washington. The company's membership consists primarily of employer-group business but also includes meaningful contributions from Medicare (principally Medicare Advantage) and individual products. Group Health's market position is bolstered by its vertically integrated health care delivery system which includes both employee care providers and care providers provided by an independent medical group that contracts exclusively with Group Health. These care providers deliver health care services at 26 primary and specialty care facilities owned and operated by GHC. Group Health has developed urgent care facilities in areas of concentrated health plan membership to facilitate providing care in a lower cost setting. However, Fitch's view is that expenses need to be better managed for the company to achieve positive ratings momentum. Group Health's large market share in Washington results in a concentrated geographic footprint, which exposes the company to overall economic and competitive conditions in the state. Fitch notes that this market concentration also enables Group Health to more effectively manage utilization management with its provider network. GHC's key capitalization metrics are generally consistent with or better than 'BBB' rating category median guidelines and Fitch views the company's premium and asset leverage to be comparably low. The company's year-end 2012 NAIC risk-based capital (RBC) and premiums-to-surplus ratios were 208% and 5.2x respectively. GHC's year-end 2012 debt-to-EBITDA ratio was 3.1x while its Financial Leverage Ratio was 19%. Group Health's 2008-2012 financial results were weak as the company struggled to cope with operational issues that resulted from its gradual expansion outside its traditional strength HMO plan. The company's 2008-2012 average EBITDA-to-revenue and average net return on average capital ratios were 1.42% (0.1%) respectively. In an effort to improve its financial performance, Group Health implemented a study in the fourth quarter 2012 of its internal processes and expense structure. In connection with this study, the company anticipates re-designing many of its processes and eliminating a significant number of full-time equivalent positions. Group Health estimates the annual expense savings from this headcount reduction at $200 million-$220 million by the end of 2013. The company generated strong first quarter 2013 (1Q'13) financial results as higher premium rates and a decline in expenses, particularly in medical expenses incurred for external delivery services, generated EBITDA-to-revenue and net annualized return on average capital ratios of 11.8% and 13.8% respectively. Both of these metrics are significantly higher than Fitch's 'BBB'/'BB' rating category median guidelines. At March 31, 2013, Group Health had obligations to the Washington Health Care Facilities Authority (WHCFA) totaling approximately $140 million. The WHCFA in turn has issued a like amount of senior amortizing bonds, secured by a security interest in Group Health's gross receivables and liens on certain Group Health real estate assets and equipment. Group Health's annual coupon and amortization payments are relatively modest at $12 million per year through 2019. EBITDA-based interest coverage ratios, excluding the impact of an interest rate swap contract Group Health has entered into that reduces the company's interest rate expense during periods of declining interest rates, was 4.9x in 2012 and averaged 7.3x from 2008 through 2012. RATING SENSITIVITES Key rating triggers that could lead to an upgrade include run- rate: -- EBITDA/revenue margins approximating 5%; -- Net income/average capital ratios approximating 5%; -- Debt-to-EBITDA ratios and debt-to-capital ratios that are less than 3.0x and 20%; respectively; -- EBITDA-based interest coverage ratios that exceed 7x. Key rating triggers that could lead to a downgrade include run- rate: -- EBITDA/revenue margins that are less than 3%; -- Net income/average capital ratios that are less than 3%; -- NAIC RBC ratios (company action level basis) below 200%; -- Debt-to-EBITDA ratios and debt-to-capital ratios greater than 3.0x and 35%, respectively; -- Loss of key contracts that contribute significantly to membership. Fitch has affirmed the following ratings: -- $99.7 million series 2006 revenue bonds issued by the Washington Health Care Facilities Authority on behalf of Group Health Cooperative at 'BBB-'; -- $45 million series 2001 revenue bonds issued by the Washington Health Care Facilities Authority on behalf of Group Health Cooperative at 'BBB-'; -- Group Health Cooperative - IFS at 'BBB-'; -- Group Health Cooperative - IDR at 'BB+'; -- Group Health Options, Inc. - IFS at 'BBB-'. HASH LANE: Business as Usual for Lakeridge Golf Course ------------------------------------------------------ Hash Lane Holdings, LLC, dba Lakeridge Golf Course, in Reno, Nevada, filed for Chapter 11 bankruptcy (Bankr. D. Nev. Case No. 13-51138) on June 6, 2013. An affiliate, Club Lakeridge Inc., also filed a separate petition (Case No. 13-51140). The Law Offices of Alan R. Smith, Esq., serves as the Debtors' counsel. According to RGJ.com, the 18-hole golf course remains open. Head pro Gary Bradford referred questions to Hash Lane Holdings LLC principle Byron Topol, adding, "The golf course does well. . . . It's pretty much business as normal." RGJ.com says messages left with Mr. Topol and Reno attorney Alan R. Smith were not returned. Hash Lane disclosed $5,206,026 in assets and liabilities of $6,299,064. Club Lakeridge has assets of $1,000,250 and liabilities of $2,143,778. Northern Nevada Business Weekly reports Hash Lane Holdings owes nearly $6 million in mortgage loans from Heritage Bank of Nevada. The petitions were signed by Byron Topol and Nathan L. Topol, managing member and president. A copy of Hash Lane Holdings' list of its 20 largest unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb13-51138.pdf A copy of Club Lakeridge's list of six unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nvb13-51140.pdf HELICOS BIOSCIENCES: Court Approves IP License Agreements --------------------------------------------------------- GenomeWeb.com reports that the bankruptcy court has approved Helicos' IP license deals with Illumina, Life Tech, Fluidigm, and Complete Genomics. Negotiations are ongoing with Roche. About Helicos BioSciences Helicos BioSciences Corporation is a publicly traded life science company headquartered in Cambridge, Massachusetts focused on genetic analysis technologies for the research, drug discovery and diagnostic markets. The firm's Helicos Genetic Analysis Platform was the first DNA sequencing instrument to operate by imaging individual DNA molecules. Helicos was co-founded in 2003 by life science entrepreneur Stanley Lapidus, Stephen Quake, and Noubar Afeyan with investments from Atlas Venture, Flagship Ventures, Highland Capital Partners, MPM Capital, and Versant Ventures. Since inception in 2003, revenue aggregated $13.3 million. For six months ended June 30, revenue of $1.13 million resulted in a net loss of $1.38 million. Helicos Biosciences filed a Chapter 11 petition (Bankr. D. Mass. Case No. 12-19091) in Boston on Nov. 15, 2012. The Debtor estimated assets of at least $1 million and liabilities of at least $10 million. HIGH MAINTENANCE: Involuntary Chapter 11 Case Summary ----------------------------------------------------- Alleged Debtor: High Maintenance Broadcasting, LLC 600 Leopard Street, Suite 1924 Corpus Christi, TX 78473 Case Number: 13-20270 Involuntary Chapter 11 Petition Date: June 17, 2013 Court: Southern District of Texas (Corpus Christi) Judge: Richard S. Schmidt Petitioner's Counsel: Ronald A. Simank, Esq. SCHAUER & SIMANK 615 Upper N Broadway, Ste 2000 Corpus Christi, TX 78401-0781 Tel: (361) 884-2800 Fax: (361) 884-2822 E-mail: rsimank@cctxlaw.com High Maintenance Broadcasting, LLC's petitioners: Petitioner Nature of Claim Claim Amount ---------- --------------- ------------ Robert Behar Promissory Note $2,302,528 14450 Commerce Way Miami Lakes, FL 33016 Estrella Behar Promissory Note $2,248,742 18911 Collins AVe #1807 Sunny Isles Beach, FL 33160 Leibowitz Family Promissory Note $428,604 Broadcasting, LLC 4400 Biscayne Blvd. Miami, FL 33137 Pedro Dupouy Guaranty $70,593 815 NW 57th Ave. #206 Miami, FL 33126 Latin Capital Guaranty $759,722 Ventures, LLC 14450 Commerce Way Miami Lakes, FL 33016 Pan Atlantic Bank & Guaranty $974,162 Trust, Ltd. Whitepark House White Park Rd St. Michael Barbados Sumit Enterprises, LLC Promissory Note $107,571 14450 Commerce Way Miami Lakes, FL 33016 Jose Rodriguez Promissory Note $53,785 1020 Nautica Dr. Weston, FL 33327 Leon Perez Promissory Note $53,785 20201 E. Country Dr. #607 Aventura, FL 33180 Jays Four, LLC Promissory Note $235,312 445 Park Ave. Suite 1502 New York, NY 10022 Benjamin J. Jesselson Promissory Note $117,656 12/18/80 Trust 445 Park Ave. Suite 1502 New York, NY 10022 Jesselson Grandchildren Promissory Note $235,312 12/18/80 Trust 445 Park Ave. Suite 1502 New York, NY 10022 Joseph Kavana Guaranty $512,644 19495 Biscayne Blvd. Suite 702 Aventura, FL 33180 Sawicki Family Guaranty $168,080 Ltd Partnership 4036 Island Estates Dr. Aventura, FL 33160 Shpilberg Mgmt Guaranty $58,828 Associates, LLC 20155 NE 38 Court #901 Aventura, FL 33180 Saby Behar Rev Promissory Note $147,070 Trust 2/15/99 Amend 1911 NE 118th Rd N. Miami, FL 33181 Morris Bailey Guaranty $336,160 150 Broadway New York, NY 10058 HJ HEINZ: Moody's Downgrades Debt Instrument Ratings After LBO -------------------------------------------------------------- Moody's Investors Service has affirmed the Ba3 Corporate Family Rating and Ba3-PD Probability of Default Rating of H.J. Heinz Company ("Heinz", formerly Hawk Acquisition Sub, Inc.) and correspondingly lowered the company's debt instrument ratings following the completion of Moody's review of the leveraged acquisition of Heinz by an investor group that was completed on June 7, 2013. Moody's has also withdrawn provisional ratings of Hawk Acquisition Sub. Inc., which no longer exists as a separate entity following the transaction. Debt instruments previously issued by Hawk Acquisition Sub, Inc. are now direct obligations of Heinz. This action concludes Moody's review of ratings of H.J. Heinz Company and subsidiaries that began on February 14, 2013 following the company's announcement that it had agreed to be acquired by Berkshire Hathaway and 3G Capital in an LBO transaction valued at $28 billion. The rating outlook is stable. Ratings Rationale: Heinz's Ba3 Corporate Family Rating reflects high financial leverage at closing of the LBO transaction with approximately 6.7 times debt/EBITDA on a reported basis and about 10.4 times debt/EBITDA including as debt $8 billion of holding company preferred stock. Cash flow metrics are weakened by high interest expense and at least $720 million of dividends that Moody's assumes will be upstreamed annually to service the 9% parent company preferred stock issued to Berkshire as part of the financing. Moody's takes into consideration Heinz's strong global franchise and its attractive future growth opportunities in emerging markets such as Brazil, Russia, and Indonesia where the company has expanded profitably in recent years. In addition, Moody's expects that new and ongoing cost savings initiatives under the new ownership will be a key driver of earnings growth and financial deleveraging. "The ratings reflect our assumption that over the next two years, Heinz's new senior management will be focused on quickly deleveraging through a combination of earnings growth and debt repayment," commented Brian Weddington a Moody's Senior Credit Officer. "By the end of year three, the company should be able to simplify and lower the cost of its capital structure, which includes $8 billion of high coupon preferred stock and about $13 billion of secured debt instruments," added Weddington. H.J. Heinz Company, Inc. (formerly Hawk Acquisition Sub, Inc.) Ratings Affirmed: - Corporate Family Rating at Ba3; - Probability of Default Rating at Ba3-PD. Rating Revised to (P)B2 from (P)Baa2: - Senior unsecured debt shelf Debt issued by Hawk Acquisition Sub, Inc. prior to merging into H.J. Heinz Company: Ratings Revised to Ba2 (LGD 3 / 30%) from (P)Ba2: - $2.00 billion senior secured first-lien bank revolving credit facility expiring June 2018; - $2.95 billion senior secured first-lien bank Term Loan 1 due June 2019; - $6.55 billion senior secured first-lien bank Term Loan 2 due June 2020. Ratings Affirmed: - $3.10 billion of 4.25% senior secured second-lien notes due October 2020 at B1 (LGD 5 / 77%). Debt outstanding at H.J. Heinz Company and subsidiaries prior to merger with Hawk Acquisition Sub, Inc.: Ratings Downgraded to B2 (LGD 6 / 94%) from Baa2: - $235 million of 6.375% senior unsecured debentures due July 2028; - $500 million of 5.350% senior unsecured notes due July 2013; - $119 million of 6.049% Dealer Remarketable Securities due December 2020; - $58 million of 2.000% senior unsecured notes due September 2016; - $18 million of 1.500% senior unsecured notes due March 2017; - $34 million of 3.125% senior unsecured notes due September 2021; - $6 million of 2.850% senior unsecured notes due March 2022; - $6.5 million of variable rate Industrial Revenue Bonds (FL) due November 2026; - 1.5 million of 8.375% Pollution Control Revenue Bonds (PA) due May 2015; - $1.4 million of 8.500% Industrial Revenue Bonds (MI) due December 2015; - $1.86 million of 7.160% Tax Increment Bonds (PA) due December 2019. H.J. Heinz Finance Company - $437 million of 6.750% senior unsecured guaranteed notes due March 2032; - $931 million of 7.125% senior unsecured guaranteed notes due August 2039. H.J. Heinz Finance UK Plc - $196 million of 6.250% guaranteed British pound notes due February 2030 (granted second-lien security interest). Rating Downgraded to B2 from Ba1 and Loss Given Default Rating Assigned at LGD 6 / 97%: H.J. Heinz Finance Company - $350 million of 8% mandatorily redeemable preferred stock due July 2013. Rating Withdrawn: - Commercial paper at Prime-2. The rating outlook is stable. Hawk Acquisition Sub, Inc. (merged into H.J. Heinz Company): Ratings Withdrawn: - Proposed senior unsecured debt at (P)B2. On June 7, 2013 Hawk Acquisition Sub merged with and into H.J. Heinz Company with Heinz being the surviving company. Prior to the merger, Hawk Acquisition Sub, Inc. was a wholly-owned subsidiary of Hawk Acquisition Holding Corporation that was formed solely for the purpose of acquiring Heinz. Upon the closing of the merger, Heinz became a wholly-owned subsidiary of Hawk Acquisition Holding Corporation, which is equally controlled by Berkshire Hathaway and 3G Capital. Hawk Acquisition Sub no longer exists as a separate entity. The Heinz ratings could be downgraded if Heinz is unlikely to reduce debt/EBITDA below 6 times within 18-24 months, especially if deleveraging is hampered by deteriorating operating performance or future aggressive financial strategies. The ratings are not likely to be upgraded in the near-term; but over time, if the Heinz is able to significantly reduce leverage, simplify its capital structure, and adopt a more conservative financial policy, the ratings could be upgraded. Headquartered in Pittsburgh, PA, H.J. Heinz Company is a leading marketer and producer of branded foods in ketchup, condiments, sauces, meals, soups, snacks and infant foods. Key brands include Heinz(R) Ketchup, sauces, soups, beans, pasta and infant foods, Ore-Ida(R) French Fries and roasted potatoes, Smart Ones(R) meals and Plasmon(R) baby food. For the last twelve month period ended January 2013, Heinz generated sales of approximately $11.7 billion. Heinz operates in over 200 countries and employs 32,000 people worldwide. 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. IDEARC INC: Verizon Scores Complete Victory Over Creditors ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Verizon Communications Inc. won a complete victory this week when a federal district judge in Dallas threw out the remainder of a $9.8 billion lawsuit begun almost three years ago by creditors of Idearc Inc. The report recounts that Idearc implemented a reorganization plan in January 2010 mostly worked out before the Chapter 11 filing in March 2009. Reducing debt from $9 billion to $2.75 billion, the plan created a trust that filed the lawsuit in Dallas. In January, U.S. District Judge A. Joe Fish ruled after a nonjury trial that Idearc was solvent and worth $12 billion when spun off. Given solvency, the judge told both sides to file papers explaining why the entire suit should or shouldn't be dismissed. The Idearc creditors' committee responded in mid-March with papers contending that the company was never properly formed, thus making Verizon liable for the debt. According to the report, Judge Fish in his 22-page opinion dismissed the entire suit. He said the finding of solvency was fatal to claims known as constructive fraudulent transfer, where transactions can be set aside if made for inadequate consideration when a company is insolvent. Judge Fish similarly dismissed claims for actual intent to hinder, delay or defraud creditors. He said any circumstantial evidence of fraudulent intent was "negated" by his conclusion that Dallas-based Idearc was solvent and worth $12 billion at the time of the spinoff. The report relates that the judge also failed to go along with technical theories that a dividend was illegal because Idearc never had more than one director when there should have been three. Judge Fish said he was unable to find "any case in which a court found that a solvent corporation's dividend was illegal solely because of a technical violation." The report shares that this week's dismissal of the suit gives creditors the right to appeal. Although setting aside a judge's finding of fact about solvency is difficult, the creditors can now raise on appeal the question of whether they were entitled to a jury trial. Earlier in the case, Judge Fish ruled that there was no right to a jury trial. A Verizon spokesman, Bill Kula, said Fish's ruling was a "resounding rejection of the litigation trust's baseless allegations against Verizon." Lawyers for the Idearc creditors from Haynes & Boone LLP didn't respond to a message seeking comment. About Idearc Inc. Headquartered in D/FW Airport, Texas, Idearc, Inc., now known as SuperMedia Inc., is the second largest U.S. yellow pages publisher. Idearc was spun off from Verizon Communications, Inc. Idearc and its affiliates filed for Chapter 11 protection (Bankr. N.D. Tex. Lead Case No. 09-31828) on March 31, 2009. The Debtors' financial condition as of Dec. 31, 2008, showed total assets of $1,815,000,000 and total debts of $9,515,000,000. Toby L. Gerber, Esq., at Fulbright & Jaworski, LLP, represented the Debtors in their restructuring efforts. The Debtors tapped Moelis & Company as their investment banker; Kurtzman Carson Consultants LLC as their claims agent. William T. Neary, the United States Trustee for Region 6, appointed six creditors to serve on the official committee of unsecured creditors. The Committee selected Mark Milbank, Tweed, Hadley & McCloy LLP, as counsel, and Haynes and Boone, LLP, co- counsel. Idearc completed its debt restructuring and its plan of reorganization became effective as of Dec. 31, 2009. In connection with its emergence from bankruptcy, Idearc changed its name to SuperMedia Inc. Under its reorganization, Idearc reduced its total debt from more than $9 billion to $2.75 billion of secured bank debt. Less than two years since leaving bankruptcy protection, SuperMedia remains in quandary. Early in October 2011, Moody's Investors Service slashed its corporate family rating for SuperMedia to Caa1 from B3 prior. The downgrade reflects Moody's belief that revenues will continue to decline at a double digit rate for the foreseeable future, leading to a steady decline in free cash flow. SuperMedia's sales were down 17% for the second quarter of 2011 in a generally improving advertising sector. Moody's ratings outlook for SuperMedia remains negative. While SuperMedia is attempting to transition the business away from its reliance on print advertising through development of online and mobile directory service applications, Moody's is increasingly concerned that the company will not be able to make this change quickly enough to stabilize the revenue base over the intermediate term. Further, the high fixed cost nature of SuperMedia's business could lead to steep margin compression, notwithstanding continued aggressive cost management. ILLINOIS VALLEY: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Illinois Valley Millworks, Inc. 1605 Division Street Mendota, IL 61342 Bankruptcy Case No.: 13-25057 Chapter 11 Petition Date: June 18, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Donald R. Cassling Debtor's Counsel: Richard G. Larsen, Esq. KLEIN STODDARD BUCK & LEWIS LLC 2045 Aberdeen Court Sycamore, IL 60178 Tel: (815) 748-0380 Fax: (815) 748-4030 E-mail: rlarsen@kleinstoddard.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company?s 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ilnb13-25057.pdf The petition was signed by Keith Miller. INOVA TECHNOLOGY: Investors' Ownership Unchanged After Split ------------------------------------------------------------ Inova Technology, Inc., said that each shareholder's percentage ownership interest in the company and the proportional voting power remains unchanged after the reverse stock split, except for minor changes and adjustments resulting from rounding up of fractional interests. The rights and privileges of the holders of the Company's common stock are unaffected by the reverse stock split. The board of directors of Inova Technology authorized a 100 to one reverse split of all outstanding common shares and a corresponding decrease in the Company's authorized common stock pursuant to Section 78.209 of the Nevada Revised Statutes. Each 100 shares will now be worth 1 share. Section 78.209 provides that the board of directors of a Nevada corporation can authorize a forward or reverse split of capital stock without the consent of shareholders if such action is taken in conjunction with a corresponding proportional increase or decrease in authorized capital stock. The Company filed a Certificate of Change with the Secretary of State of Nevada. The reverse stock split became effective upon FINRA approval on June 17, 2013. Effective at the same time as the reverse stock split, the authorized shares of the Company's common stock will be proportionately decreased from 2,000,000,000 shares to 20,000,000 shares. As of the Record Date, the Company had issued and outstanding 307,950,619 shares of common stock, par value $0.001 per share. After the stock split, the Company will have 3,079,506 shares issued and outstanding. The par per share will remain unchanged. The Stock Split is intended to increase the price per share of the Company's Common Stock. The Board of Directors believes that the price of the Common Stock is too low to attract investors in the stock. In order to proportionally raise the per share price of the Common Stock by reducing the number of shares of the Common Stock outstanding, the Board of Directors believes that it is in the best interests of the Company's stockholders to implement a stock split. The Company's Common Stock is quoted on the Over- the-Counter Bulletin Board under the symbol "INVA" and the last reported closing price of the Common Stock on June 13, 2013, was $0.001 per share. About Inova Technology Based in Las Vegas, Nevada, Inova Technology, Inc. (OTC BB: INVA) -- http://www.inovatechnology.com/-- through its subsidiaries, provides information technology (IT) consulting services in the United States. It also manufactures radio frequency identification (RFID) equipment; and provides computer network solutions. The company was formerly known as Edgetech Services Inc. and changed its name to Inova Technology, Inc., in 2007. The Company reported a net loss of $1.24 million for the year ended April 30, 2012, compared with a net loss of $3.35 million during the prior year. The Company's balance sheet at Jan. 31, 2013, showed $6.26 million in total assets, $20.73 million in total liabilities and a $14.46 million total stockholders' deficit. MaloneBailey, LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended April 30, 2012. The independent auditors noted that Inova incurred losses from operations for the years ended April 30, 2012, and 2011 and has a working capital deficit as of April 30, 2012, which raise substantial doubt about Inova's ability to continue as a going concern. INTEGRITY INSURANCE: Not Required to Pay Congoleum Claims --------------------------------------------------------- Integrity Insurance Company issued policies to Congoleum Corporation. Congoleum submitted timely proofs of claim for which it sought coverage under the policies. The liquidator of Integrity Insurance, relying on In the Matter of the Liquidation of Integrity Insurance Co., 193 N.J. 86 (2007), issued seven notices of determination (NODs) disallowing the incurred but not reported claims for insufficient supporting documentation, failure to document the exhaustion of limits of coverage of the underlying policy to the Integrity policy, and allowance of contingent claims is prohibited by New Jersey statute. As a result of the approval of Congoleum's bankruptcy plan of reorganization, effective July 1, 2010, The Congoleum Plan Trust, is the successor-in-interest to the policies Integrity issued to Congoleum. The Trust timely filed an objection to the NODs. The liquidator declined to amend his decision and submitted the Trust's objection to the special master for consideration. In a February 25, 2011 written determination, the special master upheld the liquidator's decision. The special master determined that Congoleum's claims could not be allowed because they were not "absolute claims" as defined by Integrity Insurance's Amended Liquidation Closing Plan. The special master rejected Congoleum's contention that its claims were third-party claims allowable under N.J.S.A. 17:30C-28(b), stating that the statute is inapplicable to the case at hand. The Trust appealed to the liquidation court. In an April 29, 2011 order and written opinion, the court confirmed the special master's determination. The court noted that pursuant to the Amended LCP, a claim would only be considered if it became absolute on or before June 30, 2009. The court found that the special master had properly determined that Congoleum did not submit absolute claims as defined in the Amended LCP and determined in In the Matter of the Liquidation of Integrity Insurance Co. The court held: "Congoleum Corporation's claims still do not have fixed liability and have not been settled or adjudicated." The court rejected Congoleum's argument that its bankruptcy should be considered in evaluating the claims. The court also agreed that N.J.S.A. 17:30C-28(b) did not apply because Congoleum's claims were not third-party claims. On appeal, Congoleum raises the same arguments as those raised and decided in Commissioner of Insurance of the State of New Jersey v. Integrity Insurance Co./W.R. Grace & Co., (W.R. Grace), No. A- 2505-10 (App. Div. Jan. 11, 2012) (slip op. 16 to 25), certif. denied, 211 N.J. 607 (2012). For reasons expressed in W.R. Grace, the Superior Court of New Jersey, Appellate Division, in a June 17, 2013 decision, denied the appeal raised by the Appellant and held that: "We reject the Trust's argument that this case differs from W.R. Grace because here, the Trust is only seeking approval for claims that were identified, processed and settled prior to the bar date. A claim is not an 'absolute claim' unless 'liability and value has been fixed by actual payment by the Claimant or by judgment of a court of law' before the June 30, 2009 bar date. Although some claims may have been identified and processed before the bar date, liability and value were not fixed by actual payment before that date because Congoleum was in bankruptcy and the bankruptcy court did not approve Congoleum's reorganization plan, which included the settlements, until July 1, 2010." The case is IN THE MATTER OF THE LIQUIDATION OF INTEGRITY INSURANCE COMPANY, NO. A-5273-10T1 (N.J. Super. App. Div.). A full-text copy of the Decision is available at http://is.gd/fiIMth from Leagle.com. Robert M. Horkovich, Esq. -- rhorkovich@andersonkill.com -- and Robert Y. Chung, Esq. -- rchung@andersonkill.com -- at Anderson Kill & Olick, P.C., argued the cause for appellant The Congoleum Plan Trust. David M. Freeman, Esq., and John D. Gagnon, Esq., at Mazie Slater Katz & Freeman, LLC, argued the cause for respondent Thomas B. Considine, Commissioner of Banking and Insurance of the State of New Jersey in his capacity as Liquidator of Integrity Insurance Company. INTERSTATE BAKERIES: Premium Food Must Return $235K --------------------------------------------------- Bankruptcy Judge Cynthia A. Norton ruled that $234,880 of the $412,240 that Interstate Bakeries Corporation transferred to Premium Food Sales, Inc., within the 90-day period prior to Interstate's 2004 bankruptcy are avoidable as a preference under 11 U.S.C. Sec. 547(b). The Court said that during the Preference Period, Premium provided new value to the Debtor of $177,360. Accordingly, the Court entered judgment against Premium in the amount of $234,880. The case is, US BANK NATIONAL ASSOCIATION, in its capacity as Trustee of the IBC CREDITOR'S TRUST, Plaintiffs, v. Petro Commercial Services Inc., et al., Defendants, Original Adversary Proceeding No. 06-04191, Bifurcated Adversary Proceeding No. 09-04205 (Bankr. E.D. Mo.). A copy of Judge Norton's June 17, 2013 Memorandum Opinion and Order is available at http://is.gd/mWqzDtfrom Leagle.com. US Bank National Association, in its capacity as trustee of the IBC Creditors' Trust, appeared by and through its counsel, Andrew J. Nazar, Esq., and Brendan L. McPherson, Esq. -- anazar@polsinelli.com and bmcpherson@polsinelli.com -- at Polsinelli Shughart PC, and in person through W. Terrence Brown, a member of the Trust's Trust Advisory Board. Premium appeared by and through its counsel, Jeannie M. Bobrink, Esq., and James F. Freeman, Esq. -- jfreeman@swansonmidgley.com -- at Swanson Midgley, LLC and by telephone through Donald Couture, its principal, with Irvin Schein, Esq., Premium's Canadian counsel. About Hostess Brands Hostess Brands Inc. -- known for iconic brands such as Butternut, Ding Dongs, Dolly Madison, Drake's, Home Pride, Ho Hos, Hostess, Merita, Nature's Pride, Twinkies and Wonder -- sought Chapter 11 bankruptcy protection early morning on Jan. 11, 2011 (Bankr. S.D.N.Y. Case Nos. 12-22051 through 12-22056) in White Plains, New York. Founded in 1930, the Irving, Texas-based company operated 36 bakeries, 565 distribution centers and 570 outlets in 49 states at the time of the filing. It disclosed assets of $982 million and liabilities of $1.43 billion as of the petition date. The bankruptcy filing was made two years after predecessors Interstate Bakeries Corp. and its affiliates emerged from bankruptcy (Bankr. W.D. Mo. Case No. 04-45814). In the new Chapter 11 case, Hostess hired Jones Day as bankruptcy counsel; Stinson Morrison Hecker LLP as general corporate counsel and conflicts counsel; Perella Weinberg Partners LP as investment bankers, FTI Consulting, Inc. to provide an interim treasurer and additional personnel for the Debtors, and Kurtzman Carson Consultants LLC as administrative agent. Matthew Feldman, Esq., at Willkie Farr & Gallagher, and Harry Wilson, the head of turnaround and restructuring firm MAEVA Advisors, represent the Teamsters union. Attorneys for The Bakery, Confectionery, Tobacco Workers and Grain Millers International Union and Bakery & Confectionery Union & Industry International Pension Fund are Jeffrey R. Freund, Esq., at Bredhoff & Kaiser, P.L.L.C.; and Ancela R. Nastasi, Esq., David A. Rosenzweig, Esq., and Camisha L. Simmons, Esq., at Fulbright & Jaworski L.L.P. The official committee of unsecured creditors selected New York law firm Kramer Levin Naftalis & Frankel LLP as its counsel. Tom Mayer and Ken Eckstein head the legal team for the committee. Hostess Brands in mid-November 2012 opted to pursue the orderly wind down of its business and sale of its assets after the Bakery, Confectionery, Tobacco and Grain Millers Union (BCTGM) commenced a nationwide strike. The Debtor failed to reach an agreement with BCTGM on contract changes. Hostess Brands said it intends to retain approximately 3,200 employees to assist with the initial phase of the wind down. Employee headcount is expected to decrease by 94% within the first 16 weeks of the wind down. The entire process is expected to be completed in one year. Hostess received court approval for sales raising about $800 million. Apollo Global Management LLC and C. Dean Metropoulos & Co. bought the snack cake business for $410 million. Flowers Foods Inc. took most of the bread business, including the Wonder bread brand for $360 million. Neither of the sales attracted competitive bidding. After an auction with competitive bidding, Mexican baker Grupo Bimbo SAB was given a green light to buy the Beefsteak rye bread business for $31.9 million. IXI MOBILE: SEC Revokes Registration of Securities -------------------------------------------------- The Securities and Exchange Commission has revoked the registration of the securities of IXI Mobile, Inc., based on the Company's repeated failure to file required periodic reports. The Company has not filed its periodic reports after the quarterly period ended June 30, 2008. About IXI Mobile Headquartered in Belmont, California, IXI Mobile Inc. (OTC BB: IXMO.0B) -- http://www.ixi.com/-- provides devices and hosted services to mobile operators, mobile virtual network operators, and Internet service providers in a number of international markets. Research and development activities are conducted primarily in its facilities in Israel and Romania. IXI Mobile Inc.'s consolidated balance sheet at June 30, 2008, showed $29,504,000 in total assets, $40,856,000 in total liabilities, and $11,352,000 in stockholders' deficit. IXI Mobile has yet to file its financial reports for 2009 and 2010. JAMES RIVER: Moody's Caa2 CFR Unchanged Following Exchange Offer ---------------------------------------------------------------- Moody's Investors Service said that James River Coal Company's offer to exchange certain convertible notes is credit positive, but does not impact the company's ratings or outlook at present. James River Coal Company currently operates over 30 mines across eight coal mining complexes in Central Appalachia and the Illinois Basin. Headquartered in Richmond, Va., the company generated about $1.1 billion in revenue for the twelve months ended March 31, 2013. On May 22, 2013, Moody's downgraded James River's Corporate Family Rating to Caa2 from Caa1 and the company's Senior Unsecured Notes due 2019 to Caa2 from B3. Moody's also affirmed the SGL-3 Speculative Grade Liquidity Rating. JEFFERSON COUNTY: Proposed Financing Too Costly ----------------------------------------------- Kelly Nolan and Katy Stech, writing for Dow Jones Newswires, report that some observers call terms of Jefferson County, Alabama's new debt onerous. Jefferson'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. According to Dow Jones, 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. 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. Dow Jones' Nolan and Stech, in an articled available at http://is.gd/EZQztbfrom The Wall Street Journal, relate that 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. That is perhaps billions more than they would pay under a plan whose payments would be more evenly distributed, said a potential investor. According to Dow Jones, some observers wonder if the county will be able to meet the obligations stacked up in later years. "It's future taxpayers that bear the risk of the higher payments down the road," said Richard Ciccarone of McDonnell Investment Management, the report notes. McDonnell purchases municipal bonds and oversees an $8 billion portfolio of them. The report relates the new debt is needed to complete an agreement signed this spring between Jefferson County officials and investors holding $3.1 billion of debt linked to the sewage-system upgrade. The deal, which helps the Alabama county put behind it the largest municipal bankruptcy in terms of debt outstanding in U.S. history, came after hedge funds and other creditors forgave $1.2 billion of sewer debt. The new bonds would refinance much of the remaining debt. The county filed for Chapter 9 bankruptcy protection in November 2011. According to the report, Jefferson County's proposal to sell the debt could be formally approved by a judge as early as November. If the plan is allowed to proceed, the debt is likely to be sold to investors as early as then. In addition to the capital- appreciation debt, the $1.9 billion package includes $1.42 billion of bonds that pay interest periodically, according to county documents. Jefferson County has the option to buy back some of the bonds after 10 years. 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. LIGHTSQUARED INC: Lenders Balk at Violations of 'Exclusivity' Deal ------------------------------------------------------------------ A group of lenders filed a motion to enforce Judge Shelley Chapman's Feb. 13 order, which extended the deadline for the company to file a Chapter 11 plan and solicit votes from creditors. The move comes after LightSquared allegedly refused to withdraw the letter it sent to the lenders group last month or acknowledge its court-ordered obligations under a stipulation they executed, which was incorporated into the Feb. 13 order. On May 20, LightSquared sent a letter to the lenders, informing them about the termination of its obligations under the Feb. 13 order and alleging that the group was no longer the largest holder of pre-bankruptcy obligations. The group's lawyer, Glenn Kurtz, Esq., at White & Case LLP, in New York, said the company refused to withdraw the letter although the termination condition wasn't satisfied when the letter was issued. SP Special Opportunities LLC, the company that LightSquared claimed held more pre-bankruptcy obligations, has also joined the lenders group, according to Mr. Kurtz. As reported on Feb. 18, 2013 by TCR, LightSquared and the lenders group signed a stipulation to further extend the company's exclusive right to file a plan, which bars creditors from filing rival plans and maintains the company's control over its restructuring. The agreement provides that the exclusivity will end once and for all on July 15. In return for the exclusivity extension to July, the interest rate on the loan rises to 12.5% and maturity is extended to Dec. 31. In addition, the agreement precludes LightSquared from filing a plan without consent from the lenders, unless the plan pays the debt in full when the plan is implemented. Secured claims more senior in priority also must be paid in full, absent consent. Mr. Kurtz can be reached at: WHITE & CASE LLP 1155 Avenue of the Americas New York, NY 10036 gkurtz@whitecase.com No Negotiations with Dish Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a group of secured lenders holding $1.38 billion in debt of LightSquared Inc. claim that the Debtor violated an agreement extending exclusive plan-filing rights until July 15 by failing to engage Dish Networks Corp. in negotiation after receiving a $2 billion cash offer. Joseph Checkler writing for Dow Jones' DBR Small Cap reports that LightSquared's biggest lender group says the company is trying to avoid the terms of a recent settlement and still hasn't met with Dish Network Corp. Chairman Charlie Ergen in the five weeks since he offered to pay $2 billion for some of its assets. According to the Bloomberg report, the ad hoc lender group said the company is "continuing to stall these cases for the benefit of the debtors' majority shareholder," Harbinger Capital Partners LLC. The lenders said the Dish offer would suffice to pay secured creditors in full. According to the ad hoc group, LightSquared should have set up an auction process immediately. The Bloomberg report notes that the lenders want the bankruptcy judge in New York to declare the company in default of an agreement to extend exclusive plan-filing rights. Exactly how LightSquared may have violated the agreement is unclear because critical parts of the financing paying off LightSquared's debt in full. Full payment would enable Philip Falcone's Harbinger to retain ownership. The report discloses that existing lenders have been contending with Harbinger over control of LightSquared's Chapter 11 reorganization. According to the BankruptcyLaw360 report, the ad hoc group of lenders, who hold about $1.4 billion of LightSquared's debt, requested that the judge schedule an emergency hearing to force the wireless spectrum owner to adhere to the terms of the settlement. About LightSquared Inc. LightSquared Inc. and 19 of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. S.D.N.Y. Lead Case No. 12-12080) on May 14, 2012, to resolve regulatory issues that have prevented it from building its coast-to-coast integrated satellite 4G wireless network. LightSquared had invested more than $4 billion to deploy an integrated satellite-terrestrial network. In February 2012, however, the U.S. Federal Communications Commission told LightSquared the agency would revoke a license to build out the network as it would interfere with global positioning systems used by the military and various industries. In March 2012, the Company's partner, Sprint, canceled a master services agreement. LightSquared's lenders deemed the termination of the Sprint agreement would trigger cross-defaults under LightSquared's prepetition credit agreements. LightSquared and its prepetition lenders attempted to negotiate a global restructuring that would provide LightSquared with liquidity and runway necessary to resolve its issues with the FCC. Despite working diligently and in good faith, however, LightSquared and the lenders were not able to consummate a global restructuring on terms acceptable to all interested parties. Lawyers at Milbank, Tweed, Hadley & McCloy LLP serve as counsel to the Debtors. Alvarez & Marsal North America, LLC, is the financial advisor. Kurtzman Carson Consultants LLC serves as claims and notice agent. LONE PINE: Gets Notice of Failure to Satisfy NYSE Listing Standard ------------------------------------------------------------------ Lone Pine Resources Inc. on June 19 disclosed that the Company has received a notice of failure to satisfy an additional New York Stock Exchange continued listing standard because the Company's average global market capitalization was less than US$75 million over a consecutive 30 trading-day period. Under applicable NYSE procedures, the Company has 45 days from the receipt of the notice to submit a plan to the NYSE to demonstrate its ability to achieve compliance with the continued listing standards within 18 months. The Company intends to submit a plan that will demonstrate its ability to regain compliance with the continued listing standards within the required time frame. However, there can be no assurance that the Company's plan will be accepted by the NYSE or that the Company will be able to achieve compliance with the NYSE's continued listing standards within the required time frame, at which time the Company may become subject to suspension and delisting proceedings. The Company previously disclosed on May 28, 2013 that the NYSE notified the Company that it was not in compliance with the NYSE's continued listing standard related to maintaining a consecutive 30 trading-day average closing price for its common stock at or above US$1.00 per share. The Company's common stock continues to trade on the NYSE, but the NYSE will continue to transmit the Company's trading symbol with a ".BC" indicator until the Company is in compliance with all NYSE continued listing standards. The Company's common stock also continues to trade on the Toronto Stock Exchange under the symbol "LPR," and that listing is not affected by the receipt of the NYSE notification. In addition, the Company's U.S. Securities and Exchange Commission and Canadian securities regulatory authority reporting requirements are not affected by the receipt of the NYSE notification. Lone Pine is a Calgary, Alberta-based exploration and production company with about 7,000 boe of daily production and proved developed and total proved reserves of 20 million and 31 million boe, respectively. * * * As reported by the Troubled Company Reporter on May 30, 2013, Moody's Investors Service downgraded Lone Pine Resources Inc.'s Corporate Family Rating and Probability of Default Rating to Caa3/Caa3-PD from Caa1/Caa1-PD. The $200 million senior unsecured notes rating was downgraded to Ca from Caa1. The Speculative Grade Liquidity of SGL-4 was affirmed. Moody's said the rating outlook remains negative. LOU PEARLMAN: Trustee Doesn't Have Backstreet's Back on Claims -------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that the trustee overseeing the bankruptcy case of boy band giant and Ponzi schemer Lou Pearlman challenged $3.5 million in legal fees and related costs that the Backstreet Boys are seeking against their former manager. According to the report, the long-running boy band -- which is celebrating its 20th anniversary this year -- submitted two unsecured, nonpriority claims against Pearlman's estate in 2007 seeking indemnification of legal fees and settlement costs they paid in civil litigation involving Pearlman and his label Trans Continental Records Inc. between 2000 and 2005. About Louis Pearlman & Trans Continental Louis J. Pearlman started Trans Continental Records, which managed boy bands such as the Backstreet Boys, 'N Sync, O-Town, Lyte Funky Ones (LFO), Take 5, Natural and US5. Other artists on the Trans Continental's label included Aaron Carter, Jordan Knight, C Note, and Smilez & Southstar. Mr. Pearlman also owned Orlando, Florida- based Trans Continental Airlines, Inc. -- http://www.t-con.com/-- which provided charter flight services to numerous destinations in the U.S. and the Caribbean. On March 1, 2007, creditors Tatonka Capital Corporation, First National Bank & Trust Co. of Williston, and American Bank of St. Paul, and Integra Bank filed an involuntary chapter 11 petition against Mr. Pearlman and his company, Trans Continental Airlines, Inc. (Bankr. M.D. Fla. Case Nos. 07-00761 and 07-00762). The creditors disclosed an aggregate of more than $40 million in claims. Soneet R. Kapila was appointed as the Chapter 11 trustee to oversee Mr. Pearlman's estate. He is represented by Denise D. Dell-Powell, Esq., and Jill E. Kelso, Esq., at Akerman Senterfitt, and Gregory M. Garno, Esq., and Paul J. Battista, Esq., at Genovese Joblove & Battista PA. The related cases incorporate a classic Ponzi scheme of roughly $500 million and transactions intertwined in over 100 related entities, according to Kapila & Company. The number of investors and loss victims exceeds 1,400 and the case involves investigation of off-shore assets. Fletcher Peacock, Esq., served as Mr. Pearlman's legal counsel. Tatonka Capital is represented by Derek F. Meek, Esq., and Robert B. Rubin, Esq., at Burr & Forman LLP, and Richard B Webber, II, Esq., Zimmerman Kiser & Sutcliffe PA. First national Bank is represented by Raymond V. Miller, Esq., at Gunster Yoakley & Stewart PA, and Richard P. Olson, Esq., at Olson & Burns PC. American Bank of St. Paul is represented by William P. Wassweiler, Esq., at Rider Bennett LLP. Integra bank is represented by Lawrence E. Rifken, Esq., at McGuire Woods LLP. The Official Committee of Unsecured Creditors of Trans Continental is represented by Robert J. Feinstein, Esq. at Pachulski Stang Ziehl & Jones LLP. The debtors in the jointly administered cases are: Louis J. Pearlman; Louis J. Pearlman Enterprises, Inc.; Louis J. Pearlman Enterprises, LLC; TC Leasing, LLC; Trans Continental Airlines, Inc., Trans Continental Aviation, Inc.; Trans Continental Management, Inc.; Trans Continental Publishing, Inc.; Trans Continental Records, Inc.; Trans Continental Studios, Inc.; and Trans Continental Television Productions, Inc. In addition, a related corporation, F.F. Station, LLC, filed a separate voluntary Chapter 11 case on Feb. 20, 2007 (Bankr. M.D. Fla. Case No. 07-575); however, the case is not jointly administered with the cases of the other Debtors. MARKETING WORLDWIDE: Suspending Filing of Reports with SEC ---------------------------------------------------------- Marketing Worldwide Corporation filed a Form 15 with the U.S. Securities and Exchange Commission to voluntarily terminate the registration of its common stock. As of June 18, 2013, there were only 100 holders of the common shares. As a result of the filing, the Company is suspending its obligation to file reports with the SEC. About Marketing Worldwide Based in Howell, Michigan, Marketing Worldwide Corporation operates through the holding company structure and conducts its business operations through its wholly owned subsidiaries Colortek, Inc., and Marketing Worldwide, LLC. Marketing Worldwide, LLC, is a complete design, manufacturer and fulfillment business providing accessories for the customization of vehicles and delivers its products to large global automobile manufacturers and certain Vehicle Processing Centers primarily in North America. MWW operates in a 23,000 square foot leased building in Howell Michigan. Colortek, Inc., is a Class A Original Equipment painting facility and operates in a 46,000 square foot owned building in Baroda, which is in South Western Michigan. MWW invested approximately $2 million into this paint facility and expects the majority of its future growth to come from this business. RBSM, LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has generated negative cash flows from operating activities, experienced recurring net operating losses, is in default of certain loan covenants, and is dependent on securing additional equity and debt financing to support its business efforts which factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at March 31, 2013, showed $1.15 million in total assets, $10.01 million in total liabilities and a $8.85 million total deficiency. MARMC TRANSPORTATION: lTC Electrical's Claim Allowed ---------------------------------------------------- Bankruptcy Judge Peter J. McNiff overruled MarMc Transportation, Inc.'s objection and allowed lTC Electrical Technologies' claim pursuant to a June 17 opinion available at http://is.gd/qoDYNg from Leagle.com. Judge McNiff said lTC provided copies of invoices that support the claim amount. The claim amount was not contested by MarMc. The court's review of the invoices and proof of claim reflect that one payment was credited to the invoice balance corresponding to the claim amount of $26,243.66. lTC carried its burden by providing evidence of the validity of the amount. About MarMc Transportation MarMc Transportation, Inc.'s principal business activity and purpose was moving oil drilling rigs and relocating to and from drilling and well sites. At its height, MarMc showed gross annual income of $16,199,506 (2008) and had 74 employees on its payroll. Headquartered in Mills, Wyoming, MarMc filed for Chapter 11 bankruptcy protection (Bankr. D. Wyo. Case No. 10-20653) on June 3, 2010, amid cash flow problems and management void that caused it to default on various financial obligations. Stephen R. Winship, Esq., at Winship & Winship, PC, assists the Company in its restructuring effort. MarMc estimated $10 million to $50 million in assets and up to $10 million in debts in its Chapter 11 petition. The U.S. Trustee has not appointed an unsecured creditors' committee in the Debtor's case. MarMc, through various sales approved by the Bankruptcy Court, has sold almost all of its personal property, which sales resulted in total proceeds of over $8,200,000. MarMc also has sold a parcel of real property for $640,000. A portion of the sale proceeds have satisfied the lien claims of Wells Fargo Equipment Finance, Inc. (except for its attorney fees estimated at no more than $25,000). Additionally, $995,000 was paid, from the sale proceeds, against the remaining real estate mortgage held by Wells Faro Bank. As reported by the Troubled Company Reporter on May 31, 2012, the Bankruptcy Court denied confirmation of the second amended plan of reorganization filed by MarMc, after objections lodged by Dave Sundem and Marcille Sundem, Summit Electric, Kruse Energy Equipment and the United States Trustee. METEX MFG: Can Participate in The Home Insurance Proceeding ----------------------------------------------------------- Judge Burton R. Lifland of the U.S. Bankruptcy Court for the Southern District of New York authorized Metex Mfg. Corporation to use estate assets to seek intervention and participate in a disputed claims proceeding for the purpose of protecting their interest in certain insurance policies issued by The Home Insurance Company that provide coverage for asbestos personal injury claims against Kentile Floors, Inc. Kentile has coverage under five umbrella insurance policies issued by The Home. Each of The Home Policies has a $5 million limit, excess of five now exhausted $1 million primary policies, bringing the total aggregate limits of The Home Policies to $25 million. The Home Policies provide coverage for Kentile asbestos personal injury claims. In 2003, The Home became, and remains, the subject of a liquidation proceeding in the Merrimack County Superior Court, State of New Hampshire. Roger A. Sevigny, the Commissioner of the Insurance for the State of New Hampshire, was appointed by the Superior Court as the liquidator for The Home. On June 10, 2004, Metex filed a timely proof of claim in The Home Liquidation Proceeding seeking insurance coverage for, inter alia, the asbestos personal injury claims that have been made against Kentile. The Debtor relates that there is a pending claims dispute in The Home Liquidation Proceeding, which could result to the impairment of the limits of The Home Policies and, therefore, result in a dollar for dollar reduction in the amount that will be paid by to the Debtor. About Metex Great Neck, New York-based Metex Mfg. Corporation, formerly known as Kentile Floors, Inc., started business in the late 1800's as a manufacturer of cork tile, and thereafter progressed to making composite tile for commercial and residential use. Metex filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 12-14554) on Nov. 9, 2012. The petition was signed by Anthony J. Miceli, president. The Debtor estimated its assets and debts at $100 million to $500 million. Judge Burton R. Lifland presides over the case. Affiliate Kentile Floors, Inc., filed a separate Chapter 11 petition (Bankr. S.D.N.Y. Case No. 92-46466) on Nov. 20, 1992. MILAGRO OIL: Exchange Offer Expiration Extended Until Aug. 30 ------------------------------------------------------------- Milagro Oil & Gas, Inc., Vanquish Energy, LLC, and Vanquish Finance, Inc., have extended the Expiration Date to 5:00 pm, New York City time, on Aug. 30, 2013, for their private exchange offer to exchange any and all of Milagro's outstanding 10.500 percent Senior Secured Second Lien Notes due 2016 issued under the Indenture dated as of May 11, 2010, among Milagro, the guarantors party thereto and Wells Fargo Bank, N.A., as Trustee, for either (i) Class A Units of Vanquish and 10.500 percent Senior Secured Second Lien Notes due 2017 of the Issuers or (ii) cash for up to a maximum of $65 million aggregate principal amount of the Old Notes, all on the terms and subject to the conditions as set forth in a confidential offering circular and consent solicitation statement. In connection with the Exchange Offer, Milagro is soliciting consents from holders of the Existing Notes to certain proposed amendments to the Indenture. The Issuers did not extend withdrawal rights and, pursuant to the terms of the Exchange Offer, previously tendered Old Notes may not be validly withdrawn and Consents may not be validly revoked. The complete terms and conditions of the Exchange Offer and Consent Solicitation are described in the Offering Circular, copies of which may be obtained by eligible holders by contacting D.F. King & Co., Inc., the information agent, at 48 Wall Street, 22nd Floor, New York, New York 10005, (212) 269-5550 (collect) or (800) 290-6427 (toll free), or milagro@dfking.com. About Milagro Oil Milagro Oil & Gas, Inc., is an independent energy company based in Houston, Texas that is engaged in the acquisition, development, exploitation, and production of oil and natural gas. The Company's historic geographic focus has been along the onshore Gulf Coast area, primarily in Texas, Louisiana, and Mississippi. The Company operates a significant portfolio of oil and natural gas producing properties and mineral interests in this region and has expanded its footprint through the acquisition and development of additional producing or prospective properties in North Texas and Western Oklahoma. Milagro Oil disclosed a net loss of $33.39 million in 2012, a net loss of $23.57 million in 2011 and a net loss of $70.58 million in 2010. Deloitte & Touche LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company is not in compliance with certain covenants of its 2011 Credit Facility, and all of the Company's debt is classified within current liabilities as of Dec. 31, 2012. The Company's violation of its debt covenants, combined with its financing needs and negative working capital position, raise substantial doubt about its ability to continue as a going concern. The Company's balance sheet at March 31, 2013, showed $496.49 million in total assets, $461.55 million in total liabilities, $235.97 million in redeemable series A preferred stock, and a $201.03 million total stockholders' deficit. Bankruptcy Warning "The Company is currently exploring a range of alternatives to reduce indebtedness to the extent necessary to be in compliance with the maximum leverage ratio. Alternatives that were considered include using cash flow from operations or issuances of equity and debt securities, reimbursements of prior leasing and seismic costs by third parties who participate in our projects, and the sale of interests in projects and properties. As another alternative, the Company has recently launched a private exchange offering to exchange a portion of the Notes for equity, cash and new notes. If the conditions to the Exchange Offer are not achieved, the Company will be unable to consummate the restructuring. As a result, the lenders under the 2011 Credit Facility may accelerate their debt, which would also cause a default and acceleration of the debt under the Notes, all of which will have a material adverse effect on our liquidity, business and financial condition and may result in the Company's bankruptcy or the bankruptcy of its subsidiaries." * * * As reported by the TCR on May 24, 2013, Standard & Poor's Ratings Services said it lowered its corporate credit rating on Houston- based Milagro Oil & Gas Inc. to 'CC' from 'CCC-'. "We lowered the corporate credit and senior unsecured ratings to 'CC' to reflect the potential for a selective default on Milagro's $250 million 10.5% senior secured notes due 2016, due to certain aspects of the company's exchange offer that would constitute a distressed exchange under our criteria," said Standard & Poor's credit analyst Christine Besset. MORGANS HOTEL: Stockholders Elect Seven Directors ------------------------------------------------- Morgans Hotel Group Co. held its reconvened 2013 annual meeting of stockholders on June 14, 2013, at which the stockholders: (1) elected seven nominees as directors for one-year terms expiring at the Company's 2014 Annual Meeting of Stockholders: John D. Dougherty, Jason T. Kalisman, Mahmood Khimji, Jonathan Langer, Andrea L. Olshan, Michael E. Olshan and Parag Vora; (2) ratified the appointment of BDO USA, LLP, as the Company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2013; (3) did not approve, by an advisory vote, the compensation paid to the Company's named executive officers; and (4) approved the stockholder proposal presented by OTK to repeal any provision of the Company's By-laws in effect as of the 2013 Annual Meeting that was not effective as of March 15, 2013. Since there were no amendments to the Company's By-Laws between March 15, 2013, and the 2013 Annual Meeting of Stockholders, this proposal has no effect on the Company's By-Laws. Meanwhile, the indenture governing the Company's 2.375 percent Senior Subordinated Convertible Notes due 2014 provides that upon the occurrence of a Change of Control in certain circumstances, the holders of the Notes have the right to require the Company to purchase their Notes at a price and during the period specified in the Indenture. Prior to the 2013 Annual Meeting, a majority of the Continuing Directors adopted a resolution approving the nomination of OTK's nominees for election to the Board at the 2013 Annual Meeting solely for the purpose of assuring that OTK's nominees constitute Continuing Directors under the Indenture. That action ensured that the election of OTK's nominees at the 2013 Annual Meeting did not constitute a Change of Control. About Morgans Hotel Group Based in New York, Morgans Hotel Group Co. (Nasdaq: MHGC) -- http://www.morganshotelgroup.com/-- is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. The Company incurred a net loss attributable to common stockholders of $66.81 million in 2012, a net loss attributable to common stockholders of $95.34 million in 2011, and a net loss attributable to common stockholders of $89.96 million in 2010. The Company's balance sheet at March 31, 2013, showed $583.62 million in total assets, $731.82 million in total liabilities, $6.32 million in redeemable noncontrolling interest of discontinued operations and a $154.52 million total deficit. MOORE FREIGHT: Has Until July 25 to File Ch. 11 Plan ---------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee, Nashville Division, extended the exclusive period during which Moore Freight Service, Inc. and G.R.E.A.T. Logistics, Inc., have the sole right to file a plan of reorganization until July 25, 2013, and the exclusive period during which the Debtors have the sole right to confirm a plan of reorganization until Sept. 23. Barbara D. Holmes, Esq., Glenn B. Rose, Esq., and Craig V. Gabbert, Esq., at Harwell Howard Hyne Gabbert & Manner, P.C., in Nashville, Tennessee, represent the Debtors. About Moore Freight Service and G.R.E.A.T. Logistics Moore Freight Service, Inc. and G.R.E.A.T. Logistics Inc. sought Chapter 11 protection (Bankr. M.D. Tenn. Case Nos. 12-08921 and 12-08923) in Nashville on Sept. 28, 2012. Moore Freight is a freight service company specializing in flat gas transportation. Founded in 2001, Moore is the largest commercial flat glass logistics firm in the U.S. It operates in the U.S., Canada and Mexico. GLI does not have any operations other than the limited, occasional freight brokerage services currently provided to Moore Freight. Bankruptcy Judge Keith M. Lundin oversees the cases. Attorneys at Harwell Howard Hyne Gabbert & Manner PC serve as counsel. LTC Advisory Services LLC serves as the Debtor's financial advisors. Moore Freight estimated assets and debts of $10 million to $50 million. CEO Dan R. Moore signed the petitions. Counsel for the Debtor's pre-bankruptcy and DIP lender, Marquette Transportation Finance, Inc., are Linda W. Knight, Esq., at Gullett, Sanford, Robinson & Martin, PLLC; and Thomas J. Lallier, Esq., at Foley & Mansfield PLLP. MOSS FAMILY: May Use Cash Collateral Thru Aug. 30 ------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Indiana entered a fifth interim order allowing Moss Family Limited Partnership, et al., to access cash collateral through Aug. 30, 2013. The Court entered its ruling on May 20, 2013, with the understanding that lender Fifth Third Bank has not yet approved the proposed 2013 proposed budget presented by the Debtor, but has allowed the Debtors to operate under the 2013 Budget while the parties discuss their issues. All of the Lender's rights are reserved and preserved regarding the 2013 Budget. All other terms of the Second Interim Order remain in full force and effect. A further hearing on the use of cash collateral has been scheduled for Aug. 6, 2013, at 10:30 a.m. South Bend time. About Moss Family Moss Family Limited Partnership and Beachwalk, L.P., filed Chapter 11 petitions (Bankr. N.D. Ind. Case Nos. 12-32540 and 12-32541) on July 17, 2012. Judge Harry C. Dees, Jr., presides over the case. Daniel Freeland, Esq., at Daniel L. Freeland & Associates, P.C., represents the Debtors. Moss Family disclosed $6,609,576 in assets and $6,299,851 in liabilities as of the Chapter 11 filing. MPF HOLDING: Preference Suit Against Mustang Dismissed ------------------------------------------------------ Bankruptcy Judge Jeff Bohm dismissed the adversary proceeding Jeff Compton, Litigation Trustee of the MPF Litigation Trust, brought to recover alleged preferential payments made to defendant Mustang Engineering Ltd. Mustang filed a renewed motion to dismiss, which alleges that (1) the debtor assumed and assigned its contract with Mustang pursuant to section 365 of the Bankruptcy Code, and thus is barred as a matter of law from now pursuing a preference action against Mustang; and (2) even if the debtor did not assume and assign its contract with Mustang, the preference action was, nevertheless, released pursuant to the debtors' confirmed reorganization plan. Judge Bohm agrees with Mustang and held that the Litigation Trustee lacks standing to bring this preference avoidance action. On May 8, 2007, Mustang, as subcontractor, entered into an agreement with Dragados Offshore, S.A., as contractor, whereby Mustang agreed to provide engineering and design work related to the construction of a floating vessel capable of drilling, producing, storing, and offloading oil, gas, and other minerals. On June 13, 2008, Mustang, Dragados Offshore, S.A., and MPF Corp. Ltd. entered into a novation agreement related to the Original Contract whereby MPF agreed to replace Dragados Offshore as contractor. On Sept. 23, 2010, the Litigation Trustee initiated the adversary proceeding, alleging the receipt of avoidable preferences by Mustang in the amount of "not less than" $4,359,322. The case is Jeff Compton, Litigation Trustee of the MPF Litigation Trust, Plaintiff, v. Mustang Engineering Ltd., Defendant, Adv. Proc. No. 10-03477 (Bankr. S.D. Tex.). A copy of Judge Bohm's June 18, 2013 Memorandum Opinion is available at http://is.gd/q1xBWgfrom Leagle.com. About MPF Corp. Bermuda-based MPF Corp. Ltd. -- http://www.mpf-corp.com/-- engaged in deep water oil and gas exploration. The Company was established on April 25, 2006. The company and debtor-affiliate MPF Holding US LLC filed separate petitions for Chapter 11 relief on Sept. 24, 2008 (Bankr. S.D. Tex. Case Nos. 08-36086 and 08-36084). MPF-01 followed on Sept. 25, 2008. D. Bobbitt Noel, Jr., Esq. at Vinson & Elkins LLP, represented the Debtors as counsel. MPF estimated assets and debts of $100 million to $500 million in its Chapter 11 petition. The Bermuda Proceedings and the Chapter 11 cases in the U.S. ran as parallel proceedings. On June 16, 2010, the Court entered an order approving the Debtors' amended disclosure statement and confirming the Debtors' amended joint plan of reorganization. The Plan was declared effective August 9, 2010. The Plan provided for the sale of the acquired assets to Cosco Dalian Shipyard Co. Ltd., MPF's largest vendor, pursuant to the assignment and purchase agreement. The essential terms of the agreement includes: a) a cash payment of $104,000,000 to MPF and MPF-01 on the closing date, in full; b) assumption of certain liabilities; and c) release MPF-01 from its obligation to pay the cure amount under a contract with Cosco. The Plan allows for the appointment of a litigation trustee to oversee and administer a post-confirmation litigation trust. The purpose of the trust is to liquidate claims to pay allowed unsecured claims pursuant to the Plan. MPG OFFICE: Sells U.S. Bank Tower & Westlawn Garage for $367.5MM ---------------------------------------------------------------- MPG Office Trust, Inc., completed the sale of US Bank Tower and the Westlawn Garage, each located in Downtown Los Angeles, CA, to Beringia Central LLC, an indirect wholly owned subsidiary of Overseas Union Enterprise Limited. The purchase price was $367.5 million. Pursuant to recently negotiated agreements with the unaffiliated Operating Partnership unit holders, the tax protection on this asset expired on June 17, 2013. Net proceeds from the transaction were approximately $103 million and will be available for general corporate purposes. About MPG Office Trust MPG Office Trust, Inc., fka Maguire Properties Inc. -- http://www.mpgoffice.com/-- owns and operates Class A office properties in the Los Angeles central business district and is primarily focused on owning and operating high-quality office properties in the Southern California market. MPG Office Trust is a full-service real estate company with substantial in-house expertise and resources in property management, marketing, leasing, acquisitions, development and financing. For the year ended Dec. 31, 2012, the Company reported net income of $396.11 million, as compared with net income of $98.22 million on $234.96 million of total revenue during the prior year. The Company's balance sheet at March 31, 2013, showed $1.45 billion in total assets, $1.98 billion in total liabilities, and a $530.56 million total deficit. In its Form 10-K filing with the Securities and Exchange Commission for the fiscal year ended Dec. 31, 2012, the Company said it is working to address challenges to its liquidity position, particularly debt maturities, leasing costs and capital expenditures. The Company said, "We do not currently have committed sources of cash adequate to fund all of our potential needs, including our 2013 debt maturities. If we are unable to raise additional capital or sell assets, we may face challenges in repaying, extending or refinancing our existing debt on favorable terms or at all, and we may be forced to give back assets to the relevant mortgage lenders. While we believe that access to future sources of significant cash will be challenging, we believe that we will have access to some of the liquidity sources identified above and that those sources will be sufficient to meet our near- term liquidity needs." On March 11, 2013, the Company entered into an agreement to sell US Bank Tower and the Westlawn off-site parking garage. The transaction is expected to close June 28, 2013, subject to customary closing conditions. The net proceeds from the transaction are expected to be roughly $103 million, a portion of which may potentially be used to make loan re-balancing payments on the Company's upcoming 2013 debt maturities at KPMG Tower and 777 Tower. Roughly $898 million of the company's debt matures in 2013. "Our ability to access the capital markets to raise capital is highly uncertain. Our substantial indebtedness may prevent us from being able to raise debt financing on acceptable terms or at all. We believe we are unlikely to be able to raise equity capital in the capital markets," the Company said. "Future sources of significant cash are essential to our liquidity and financial position, and if we are unable to generate adequate cash from these sources we will have liquidity-related problems and will be exposed to material risks. In addition, our inability to secure adequate sources of liquidity could lead to our eventual insolvency." MUNICIPAL MORTGAGE: Extends Forbearance with Merill Until Aug. 1 ---------------------------------------------------------------- Municipal Mortgage & Equity, LLC, and its affiliates, on June 17, 2013, entered into an amendment to their forbearance agreement with Merrill Lynch Capital Services, Inc., and Merrill Lynch, Pierce, Fenner & Smith Incorporated. The amendment (i) extends the term of the Forbearance Period from the earlier of June 30, 2013, or satisfaction of the Forbearance Release Terms to the earlier of Aug. 1, 2013, or satisfaction of the Forbearance Release Terms, and (ii) extends the collateral posting requirement set forth in Section 3(e)(vi) of the forbearance agreement from June 29, 2013, to July 30, 2013. At an annual shareholder meeting held on June 18, 2013, the Company announced that based on management estimates, rising interest rates so far this quarter have generated mark-to-market losses on the Company's fixed rate multifamily performing bonds. Those losses have ranged as high as $10 million, but at June 14, 2013, were less than that based on the Company's standard valuation models. Because interest rates continue to be volatile and because of potential valuation changes in bonds that are valued based on the value of the underlying real estate, the value of the bond portfolio is subject to further change, either up or down, by quarter-end. A copy of the Amended Forbearance Agreement is available at: http://is.gd/lbAy0s About Municipal Mortgage Baltimore, Md.-based Municipal Mortgage & Equity, LLC (Pink Sheets: MMAB) -- http://www.munimae.com/-- was organized in 1996 as a Delaware limited liability company and is classified as a partnership for federal income tax purposes. When the Company became a publicly traded company in 1996, it was primarily engaged in originating, investing in and servicing tax- exempt mortgage revenue bonds issued by state and local government authorities to finance affordable multifamily housing developments. Since then, the Company made several acquisitions that significantly expanded its business. However, in 2008, due to the financial crisis, the Company began contracting its business. The Company has sold, liquidated or closed down all of its different businesses except for its bond investing activities and certain assets and residual interests related to the businesses and assets that the Company sold due to its liquidity issues. The Company has a majority position in International Housing Solutions S.a.r.l., a partnership that was formed to promote and invest in affordable housing in overseas markets. In addition, at Dec. 31, 2010, the Company has an unfunded equity commitment of $5.1 million, or 2.67% of total committed capital with respect to its role as the general partner to the South Africa Workforce Housing Fund SA I ("SA Fund"). The SA Fund was formed to invest directly or indirectly in housing development projects and housing sector companies in South Africa. A portion of the funding of SA Fund is participating debt provided by the United States Overseas Private Investment Corporation, a federal government entity, and the remainder is equity primarily invested by institutional and large private investors. The Company expects to continue this business. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, KPMG LLP, in Baltimore, Maryland, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has been negatively impacted by the deterioration of the capital markets and has liquidity issues which have resulted in the Company having to sell assets and work with its creditors to restructure or extend its debt arrangements. The Company's balance sheet at March 31, 2013, showed $1.79 billion in total assets, $1.07 billion in total liabilities and $725.06 million in total equity. MUSCLEPHARM CORP: Has 1.7 Million Common Shares Resale Prospectus ----------------------------------------------------------------- MusclePharm Corporation registerd with the Securities and Exchange Commission an aggregate of 1,740,691 shares of common stock, $0.001 par value per share, for resale by Alder Capital Partners I, LP, The Feinberg Family Trust, Melachdavid Inc, et al., of which 703,236 were issued to them in the March 2013 Private Placement, 100,000 shares were issued in a May 2013 Private Placement, 150,000 were issued in a June 2013 Private Placement and an aggregate of 787,455 of which were issued pursuant to three consulting agreements. The Selling Shareholders will receive all of the net proceeds from the offering of their shares. The Company's common stock is presently quoted on the OTCBB under the symbol "MSLP.OB". On June 11, 2013, the last reported sale price for the Company's common stock on the OTC QB was $10.74 per share. A copy of the Form S-1 registration statement is available at: http://is.gd/RKlteV About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life- style company that develops and manufactures a full line of National Science Foundation approved nutritional supplements that are 100% free of banned substances. MusclePharm is sold in over 120 countries and available in over 5,000 U.S. retail outlets, including GNC and Vitamin Shoppe. MusclePharm products are also sold in over 100 online stores, including bodybuilding.com, Amazon.com and Vitacost.com. The Company reported a net loss of $23.28 million in 2011, compared with a net loss of $19.56 million in 2010. The Company's balance sheet at March 31, 2013, showed $20.53 million in total assets, $13.31 million in total liabilities and $7.22 million in total stockholders' equity. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $23,280,950 and net cash used in operations of $5,801,761 for the year ended Dec. 31, 2011; and has a working capital deficit of $13,693,267, and a stockholders' deficit of $12,971,212 at Dec. 31, 2011. NATIONAL ENVELOPE: Proposes Richards Layton as Counsel ------------------------------------------------------ NE OPCO, Inc., and NEV Credit Holdings, Inc., seek approval to employ Richards, Layton & Finger, P.A., as their bankruptcy counsel under an evergreen retainer, nunc pro tunc to June 10, 2013. The principal professionals and paraprofessionals designated to represent the Debtors and their current standard hourly rates are: Professional Hourly Rate ------------ ----------- Mark D. Collins $775 John H. Knight $675 Paul N. Heath $600 Michael J. Merchant $600 Robert C. Maddox $375 Tyler D. Semmelman $375 William A. Romanowicz $250 Rebecca Speaker $215 Prior to the Petition Date, the Debtors paid Richards Layton a total retainer of $450,000. About National Envelope National Envelope is the largest privately-help manufacturer of envelopes in North America. Headquartered in Frisco, Texas, National Envelope has eight plants and 15 percent of the envelope market. Revenue of $427 million in 2012 resulted in a $60.1 million net loss, continuing an unbroken string of losses since 2007. NE OPCO, Inc., doing business as National Envelope, along with affiliate NEV Credit Holdings, Inc., filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-11483) on June 10, 2013. The company disclosed liabilities including $148.4 million in secured debt, with $37.5 million owing on a revolving credit and $15.6 million on a secured term loan. There is a $55.7 million second-lien debt 82 percent held by a Gores Group LLC affiliate. National Envelope, then known as NEC Holdings Corp., first sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. The business was bought by Gores Group LLC for $208 million in a bankruptcy sale. National Envelope, through NE OPCO, has returned to bankruptcy to pursue a plan of reorganization or sell the assets as a going concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a sale of the business with publicly traded competitor Cenveo Inc. In the new Chapter 11 case, the company has tapped the law firm Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP as financial adviser, and Epiq Bankruptcy Solutions as claims and notice agent. The Gores Group is represented by Weil, Gotshal and Manges LLP and Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht & Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition senior agent, is represented by Goldberg Kohn Ltd and DLA Piper. NATIONAL ENVELOPE: Proposes Epiq as Administrative Advisor ---------------------------------------------------------- NE OPCO, Inc., and NEV Credit Holdings, Inc., ask the bankruptcy court for approval to employ Epiq Systems as administrative advisor, nunc pro tunc to the Petition Date. As administrative advisor, Epiq will, among other things, gather data in conjunction with the preparation of the schedules of assets and liabilities, assist the Debtors in managing the claims reconciliation and objection process, and provide balloting and solicitation services. The Debtors paid Epiq a retainer of $15,000. The Debtors earlier sought approval to employ Epiq as claims agent. For its role as claims agent and administrative advisor, Epiq will charge the Debtors at these rates: Position Hourly Rate -------- ----------- Clerical $35 to $50 Case Manager $60 to $95 IT/ Programming $80 to $150 Senior Case Manager $100 to $140 Consultant $120 to $170 Senior Consultant $175 to $225 Senior Managing Consultant $230 to $270 Communication Counselor $250 to $295 For its noticing services, Epiq will charge $50 per 1,000 e-mails, and $0.10 per page for facsimile noticing. For database maintenance, the firm will charge $0.10 per record per month, with fees for the first three months waived. For-online claim filing services, Epiq will charge $600 per 100 claims filed. For its solicitation and balloting services, Epiq will charge $325 per hour for work provided by the executive vice president and the standard hourly rates for other associates. About National Envelope National Envelope is the largest privately-help manufacturer of envelopes in North America. Headquartered in Frisco, Texas, National Envelope has eight plants and 15 percent of the envelope market. Revenue of $427 million in 2012 resulted in a $60.1 million net loss, continuing an unbroken string of losses since 2007. NE OPCO, Inc., doing business as National Envelope, along with affiliate NEV Credit Holdings, Inc., filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-11483) on June 10, 2013. The company disclosed liabilities including $148.4 million in secured debt, with $37.5 million owing on a revolving credit and $15.6 million on a secured term loan. There is a $55.7 million second-lien debt 82 percent held by a Gores Group LLC affiliate. National Envelope, then known as NEC Holdings Corp., first sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. The business was bought by Gores Group LLC for $208 million in a bankruptcy sale. National Envelope, through NE OPCO, has returned to bankruptcy to pursue a plan of reorganization or sell the assets as a going concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a sale of the business with publicly traded competitor Cenveo Inc. In the new Chapter 11 case, the company has tapped the law firm Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP as financial adviser, and Epiq Bankruptcy Solutions as claims and notice agent. The Gores Group is represented by Weil, Gotshal and Manges LLP and Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht & Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition senior agent, is represented by Goldberg Kohn Ltd and DLA Piper. NATIONAL ENVELOPE: Wants Aug. 9 Extension for Schedules ------------------------------------------------------- NE OPCO, Inc., and NEV Credit Holdings, Inc., ask the Court to extend their deadline to file their schedules of assets and liabilities, statement of financial affairs and schedules of executory contracts by 30 days, through and including Aug. 9, 2013. The Debtors' employees and professional advisors are working diligently and expeditiously to prepare the schedules. But the Debtors cite, among other things, the sale process that will require the time and attention of the Debtors' management, employees, and advisors. About National Envelope National Envelope is the largest privately-help manufacturer of envelopes in North America. Headquartered in Frisco, Texas, National Envelope has eight plants and 15 percent of the envelope market. Revenue of $427 million in 2012 resulted in a $60.1 million net loss, continuing an unbroken string of losses since 2007. NE OPCO, Inc., doing business as National Envelope, along with affiliate NEV Credit Holdings, Inc., filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-11483) on June 10, 2013. The company disclosed liabilities including $148.4 million in secured debt, with $37.5 million owing on a revolving credit and $15.6 million on a secured term loan. There is a $55.7 million second-lien debt 82 percent held by a Gores Group LLC affiliate. National Envelope, then known as NEC Holdings Corp., first sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. The business was bought by Gores Group LLC for $208 million in a bankruptcy sale. National Envelope, through NE OPCO, has returned to bankruptcy to pursue a plan of reorganization or sell the assets as a going concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a sale of the business with publicly traded competitor Cenveo Inc. In the new Chapter 11 case, the company has tapped the law firm Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP as financial adviser, and Epiq Bankruptcy Solutions as claims and notice agent. The Gores Group is represented by Weil, Gotshal and Manges LLP and Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht & Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition senior agent, is represented by Goldberg Kohn Ltd and DLA Piper. NATIONAL ENVELOPE: Proposes PwC as Financial Advisor ---------------------------------------------------- NE OPCO, Inc., and NEV Credit Holdings, Inc., ask the bankruptcy court for approval to employ PricewaterhouseCoopers LLP as financial advisor, nunc pro tunc to the Petition Date. PwC will assist the Debtors in discussions with various creditors, lenders and investors, as the case may be, and will assist in the continued marketing and sale of the Debtors' assets. As compensation for its financial advisory services, PwC will receive: * payment of fees and expenses based upon these hourly rates: Professional Level Range ------------------ ----- Partners/Principal $700 to $800 Director/ Senior Manager $500 to $600 Manager $400 to $500 Senior Associate $300 to $400 Associate $200 to $300 Para-professional Staff $110 to $150 * reimbursement for reasonable out-of-pocket expenses. Prepetition, PwC received payment of $400,000 for fees and expenses incurred or expected to be incurred. PwC anticipates that $5,000 to $10,000 was unpaid but the firm will waive any rights of collection against these services. PwC will also waive a $30,000 claim for prepetition auditing services. About National Envelope National Envelope is the largest privately-help manufacturer of envelopes in North America. Headquartered in Frisco, Texas, National Envelope has eight plants and 15 percent of the envelope market. Revenue of $427 million in 2012 resulted in a $60.1 million net loss, continuing an unbroken string of losses since 2007. NE OPCO, Inc., doing business as National Envelope, along with affiliate NEV Credit Holdings, Inc., filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-11483) on June 10, 2013. The company disclosed liabilities including $148.4 million in secured debt, with $37.5 million owing on a revolving credit and $15.6 million on a secured term loan. There is a $55.7 million second-lien debt 82 percent held by a Gores Group LLC affiliate. National Envelope, then known as NEC Holdings Corp., first sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 10-11890) on June 10, 2010. The business was bought by Gores Group LLC for $208 million in a bankruptcy sale. National Envelope, through NE OPCO, has returned to bankruptcy to pursue a plan of reorganization or sell the assets as a going concern via 11 U.S.C. Sec. 363. The Debtor plans to facilitate a sale of the business with publicly traded competitor Cenveo Inc. In the new Chapter 11 case, the company has tapped the law firm Richards, Layton & Finger as counsel, PricewaterhouseCoopers LLP as financial adviser, and Epiq Bankruptcy Solutions as claims and notice agent. The Gores Group is represented by Weil, Gotshal and Manges LLP and Lowenstein Landler LLP. Salus Capital Partners, the DIP agent, is represented by Choate, Hall & Stewart LLP and Morris Nichols Arsht & Tunnell LLP. Wells Fargo Capital Finance, LLC, the prepetition senior agent, is represented by Goldberg Kohn Ltd and DLA Piper. NATIONAL TELEREP: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: National Telerep Marketing Systems, Ltd. dba National Advertisers Accounting 201 West Prospect Mount Prospect, IL 60056 Bankruptcy Case No.: 13-25077 Chapter 11 Petition Date: June 18, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Janet S. Baer Debtor's Counsel: William J Factor, Esq. THE LAW OFFICE OF WILLIAM J. FACTOR, LTD 1363 Shermer Road, Suite 224 Northbrook, IL 60062 Tel: (847) 239-7248 Fax: (847) 574-8233 E-mail: wfactor@wfactorlaw.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company?s 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ilnb13-25077.pdf The petition was signed by David Dini, president. NAVISTAR INTERNATIONAL: Rights Agreement to Expire by Aug. 31 ------------------------------------------------------------- Navistar International Corporation and Computershare Shareowner Services LLC, as Rights Agent under the Rights Agreement, dated as of June 19, 2012, entered into Amendment No. 4 to the Rights Agreement. The Amendment No. 4 amends and restates Section 7(a) of the Rights Agreement in order to extend the expiration date of the Rights Agreement from June 18, 2013, to Aug. 31, 2013. A copy of the Amendment No.4 is available for free at http://is.gd/CwAJi1 About Navistar International Navistar International Corporation (NYSE: NAV) -- http://www.Navistar.com/-- is a holding company whose subsidiaries and affiliates subsidiaries produce International(R) brand commercial and military trucks, MaxxForce(R) brand diesel engines, IC Bus(TM) brand school and commercial buses, Monaco RV brands of recreational vehicles, and Workhorse(R) brand chassis for motor homes and step vans. It also is a private-label designer and manufacturer of diesel engines for the pickup truck, van and SUV markets. The Company also provides truck and diesel engine parts and service. Another affiliate offers financing services. Navistar incurred a net loss attributable to the Company of $3.01 billion for the year ended Oct. 31, 2012, compared with net income attributable to the Company of $1.72 billion during the prior year. As of April 30, 2013, the Company had $8.72 billion in total assets, $12.36 billion in total liabilities and a $3.64 billion total stockholders' deficit. * * * In the Aug. 3, 2012, edition of the TCR, Moody's Investors Service lowered Navistar International Corporation's Corporate Family Rating (CFR), Probability of Default Rating (PDR), and senior note rating to B2 from B1. The downgrade of Navistar's ratings reflects the significant challenges the company will face during the next eighteen months in re-establishing the profitability and competitiveness of its US and Canadian truck operations in light of the failure to achieve EPA certification of its EGR emissions technology, the significant reductions in military revenues and substantially higher engine warranty reserves. As reported by the TCR on June 19, 2013, Standard & Poor's Ratings Services said it lowered its long-term corporate credit rating on Illinois-based truckmaker Navistar International Corp. (NAV) to 'B-' from 'B'. The rating downgrades reflect S&P's negative reassessment of NAV's business risk profile to "vulnerable" from "weak". As reported by the TCR on Jan. 24, 2013, Fitch Ratings has affirmed the Issuer Default Ratings (IDR) for Navistar International Corporation and Navistar Financial Corporation at 'CCC' and removed the Negative Outlook on the ratings. The removal reflects Fitch's view that immediate concerns about liquidity have lessened, although liquidity remains an important rating consideration as NAV implements its selective catalytic reduction (SCR) engine strategy. Other rating concerns are already incorporated in the 'CCC' rating. NEXSTAR BROADCASTING: Moody's Rates Proposed Debt Facility 'Ba3' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to the proposed first lien credit facility of Nexstar Broadcasting, Inc. The company plans to use proceeds primarily to fund the acquisition of Communications Corporation of America and White Knight Broadcasting (CCA). Moody's also affirmed Nexstar's B2 corporate family rating and adjusted other instrument ratings and LGD point estimates as shown. Nexstar Broadcasting, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Speculative Grade Liquidity Rating, Affirmed SGL-2 8.875% Second Lien Bonds, Affirmed B3, LGD adjusted to LGD5, 71% from LGD4, 65% 6.875% Senior Unsecured Bonds, Affirmed Caa1, LGD6, 91% Senior Secured First Lien Term Loans, Assigned Ba3, LGD2, 24% Senior Secured First Lien Credit Facility, Downgraded to Ba3, LGD2, 24% from Ba2, LGD2, 19% Outlook, Remains Positive Rocky Creek Communications, Inc. Senior Secured First Lien Term Loan, Assigned Ba3, LGD2, 24% Outlook, Positive Ratings Rationale: Moody's estimates that the debt-funded transaction will increase Nexstar's leverage to approximately 5.5 times debt-to-EBITDA on a two year average basis from approximately 5 times as of the twelve months ended March 31 (two year average, pro forma for recent acquisitions and related financing). Incorporating expected synergies would reduce two year average leverage to about 5.2 times debt-to-EBITDA, and Moody's expects the company to achieve these synergies within the first year of the acquisition. The incremental debt will likely delay debt reduction and slow the trajectory to lower leverage. However, Moody's continues to believe the company could achieve sustained two year average leverage below 4.75 times debt-to-EBITDA, the trigger laid out for an upgrade, by the end of 2014, supporting the positive outlook. Furthermore, the acquisition expands the company's scale and enhances geographic diversification, with the addition of nineteen television stations and seven associated digital sub-channels in ten markets, seven of which are new markets. The combination also creates two new duopolies and adds five duopolies, supporting continued strong EBITDA margins. Moody's assigned a Ba3 to the proposed first lien term loans of Nexstar and Rocky Creek Communications, Inc. (Rocky Creek), a newly created borrowing entity holding the licenses for two of the acquired stations. The Rocky Creek term loan will have guarantees from Nexstar, but Rocky Creek will not guarantee the Nexstar loans. However, given the modest size of the Rocky Creek term loan (less than $20 million) and the modest amount of cash flow the two stations generate relative to overall Nexstar cash flow, Moody's ranks the Nexstar debt and the Rocky Creek debt pari passu in our waterfall of liabilities. Moody's also lowered the rating on Nexstar's existing first lien credit facility to Ba3 from Ba2 due to the increase in first lien debt, which now comprises a larger portion of the overall liability structure. Nexstar's B2 corporate family rating incorporates its high, albeit improved, leverage, which poses challenges for managing a business vulnerable to advertising spending cycles. However, Moody's anticipates synergies related to the proposed acquisitions, continued expansion of retransmission and e-Media related cash flow (even after rising payments to the networks) and modest growth in core advertising revenue, together with some debt repayment, will facilitate an improvement in the credit profile. Geographic and network diversity diminishes vulnerability to regional economic downturns and to the success of content of any particular network, but the company remains susceptible to economic conditions and faces continued competition for advertising dollars related to media fragmentation. Good liquidity also supports the rating, particularly important given the need to integrate acquisitions, though Moody's considers synergies achievable at modest cost and with low operational risk. The positive outlook reflects the potential for an upgrade to B1 based on continued improvement in the credit profile from the combination of ongoing core EBITDA growth on a two-year average basis, debt reduction and accretive acquisitions. Moody's would consider an upgrade based on expectations for sustained two-year leverage below 4.75 times debt-to-EBITDA, sustained positive free cash flow-to-debt in the high single-digit percent range, and continued modest growth in core advertising revenue and expansion of the e-Media business. An upgrade would also require maintenance of good liquidity. The outlook could revert to stable based on expectations for sustained two-year leverage remaining above 5 times debt-to- EBITDA, whether due to weak ad demand, operational challenges or debt funded dividends or acquisitions. Moody's would consider a downgrade based on expectations for sustained two-year average debt-to-EBITDA above 6 times and free cash flow-to-debt below 3%. Deterioration of the liquidity profile could also trigger a downgrade. The principal methodology used in this rating was the Global Broadcast and Advertising Related Industries 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. Based in Irving, Texas, Nexstar owns, operates, programs or provides sales and other services to 72 television stations in 41 markets. The expected acquisition of CCA stations will expand its operation to 91 television stations in 48 markets with estimated two year average revenue of about $600 million. NORTEL NETWORKS: Announces Closure of Share Transfer Registers -------------------------------------------------------------- Nortel(i) Networks Corporation and Nortel Networks Limited on June 20 disclosed that, effective as of 5:00 p.m. (E.S.T.) on June 28, 2013 (the Effective Time), the share transfer registers for NNC's common shares and NNL's preferred shares will be closed, as described in the attached notice. Consequently, after the Effective Time Nortel will no longer accept or register transfers of NNC common shares and NNL preferred shares. In addition, as of the Effective Time, Computershare Trust Company of Canada will cease acting as registrar and transfer agent of NNC's common shares and NNL's preferred shares. This action is being taken as a result of the determination by Ernst & Young Inc., the court- appointed monitor in Nortel's creditor protection proceedings under the Companies' Creditors Arrangement Act (CCAA), that the costs of maintaining the share transfer registers and continuing transfer agency services can no longer be justified having regard to the current stage of the CCAA proceedings, the discontinuance of financial reporting by NNC and NNL and the cease trade orders issued by various Canadian securities regulatory authorities as a consequence thereof, and the previously disclosed view that equity holders of NNC and NNL are expected to receive no value for their shares and such shares will ultimately be cancelled in the CCAA proceedings. About Nortel Networks Headquartered in Ontario, Canada, Nortel Networks Corporation and its various affiliated entities provided next-generation technologies, for both service provider and enterprise networks, support multimedia and business-critical applications. Nortel did business in more than 150 countries around the world. Nortel Networks Limited was the principal direct operating subsidiary of Nortel Networks Corporation. On Jan. 14, 2009, Nortel Networks Inc.'s ultimate corporate parent Nortel Networks Corporation, NNI's direct corporate parent Nortel Networks Limited and certain of their Canadian affiliates commenced a proceeding with the Ontario Superior Court of Justice under the Companies' Creditors Arrangement Act (Canada) seeking relief from their creditors. Ernst & Young was appointed to serve as monitor and foreign representative of the Canadian Nortel Group. That same day, the Monitor sought recognition of the CCAA Proceedings in U.S. Bankruptcy Court (Bankr. D. Del. Case No. 09-10164) under Chapter 15 of the U.S. Bankruptcy Code. That same day, NNI and certain of its affiliated U.S. entities filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 09-10138). In addition, the High Court of England and Wales placed 19 of NNI's European affiliates into administration under the control of individuals from Ernst & Young LLP. Other Nortel affiliates have commenced and in the future may commence additional creditor protection, insolvency and dissolution proceedings around the world. On May 28, 2009, at the request of administrators, the Commercial Court of Versailles, France, ordered the commencement of secondary proceedings in respect of Nortel Networks S.A. On June 8, 2009, Nortel Networks UK Limited filed petitions in U.S. Bankruptcy Court for recognition of the English Proceedings as foreign main proceedings under Chapter 15. U.S. Bankruptcy Judge Kevin Gross presides over the Chapter 11 and 15 cases. Mary Caloway, Esq., and Peter James Duhig, Esq., at Buchanan Ingersoll & Rooney PC, in Wilmington, Delaware, serves as Chapter 15 petitioner's counsel. In the Chapter 11 case, James L. Bromley, Esq., at Cleary Gottlieb Steen & Hamilton, LLP, in New York, serves as the U.S. Debtors' general bankruptcy counsel; Derek C. Abbott, Esq., at Morris Nichols Arsht & Tunnell LLP, in Wilmington, serves as Delaware counsel. The Chapter 11 Debtors' other professionals are Lazard Freres & Co. LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims and notice agent. The United States Trustee appointed an Official Committee of Unsecured Creditors in respect of the U.S. Debtors. An ad hoc group of bondholders also was organized. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, and Christopher M. Samis, Esq., at Richards, Layton & Finger, P.A., in Wilmington, Delaware, represent the Official Committee of Unsecured Creditors. An Official Committee of Retired Employees and the Official Committee of Long-Term Disability Participants tapped Alvarez & Marsal Healthcare Industry Group as financial advisor. The Retiree Committee is represented by McCarter & English LLP as Delaware counsel, and Togut Segal & Segal serves as the Retiree Committee. The Committee retained Alvarez & Marsal Healthcare Industry Group as financial advisor, and Kurtzman Carson Consultants LLC as its communications agent. Several entities, particularly, Nortel Government Solutions Incorporated and Nortel Networks (CALA) Inc., have material operations and are not part of the bankruptcy proceedings. As of Sept. 30, 2008, Nortel Networks Corp. reported consolidated assets of $11.6 billion and consolidated liabilities of $11.8 billion. The Nortel Companies' U.S. businesses are primarily conducted through Nortel Networks Inc., which is the parent of majority of the U.S. Nortel Companies. As of Sept. 30, 2008, NNI had assets of about $9 billion and liabilities of $3.2 billion, which do not include NNI's guarantee of some or all of the Nortel Companies' about $4.2 billion of unsecured public debt. Since the commencement of the various insolvency proceedings, Nortel has sold its business units and other assets to various purchasers. Nortel has collected roughly $9 billion for distribution to creditors. Of the total, $4.5 billion came from the sale of Nortel's patent portfolio to Rockstar Bidco, a consortium consisting of Apple Inc., EMC Corporation, Telefonaktiebolaget LM Ericsson, Microsoft Corp., Research In Motion Limited, and Sony Corporation. The consortium defeated a $900 million stalking horse bid by Google Inc. at an auction. The deal closed in July 2011. Nortel has filed a proposed plan of liquidation in the U.S. Bankruptcy Court. The Plan generally provides for full payment on secured claims with other distributions going in accordance with the priorities in bankruptcy law. NORTH TEXAS HOUSING: S&P Removes 'BB+' Rating From CreditWatch Neg ------------------------------------------------------------------ Standard & Poor's Ratings Services removed from CreditWatch with negative implications its 'BB+' long-term rating on North Texas Housing Finance Corp.'s single-family mortgage revenue bonds, series 1984, and simultaneously lowered that rating to 'CCC' from 'BB+'. The liabilities consist of capital accumulator bonds, which are primarily secured by a pool of single-family mortgage loans. The outlook is negative. S&P placed this issue on CreditWatch with negative implications earlier this year based on a lack of information sufficient to complete its review despite multiple attempts to obtain the information from various parties. Subsequently, S&P received such information and were thus able to complete its review. "This downgrade is necessitated by the issue's low and deteriorating asset-liability parity, which will, in our opinion, impair the payment of principal and interest on the bonds at maturity," said Standard & Poor's credit analyst Adam Cray. As of April 30, 2013, S&P has calculated parity for this issue of 92%. Consequently, upon bond maturity in 2016, funds will likely be insufficient to cover 100% of the par outstanding. Moreover, parity is deteriorating over time. As S&P has noted in previous articles, the rate at which the bonds are accreting in value is greater than the interest rates on the investments constituting the issue's assets, thus depleting parity as the bonds approach maturity. As this occurs, S&P may lower the rating on the bonds to reflect significant increases in credit risk. OLIN CORP: S&P Raises Corp. Credit Rating to 'BB+'; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services said it raised its corporate credit rating on Olin Corp. to 'BB+' from 'BB'. The outlook is stable. At the same time, S&P raised its issue-level ratings on the company's unsecured debt to 'BB+' from 'BB-' and revised its recovery ratings to '4' from '5'. The '4' recovery rating indicates S&P's expectation of average (30% to 50%) recovery in the event of payment default. "The upgrade reflects our expectation that Olin's operating performance will continue to improve gradually, supported by strength in the company's Winchester ammunition business and the growth of the company's bleach and aqueous hydrochloric acid sales within the chlor-alkali business," said Standard & Poor's credit analyst Seamus Ryan. "We also expect growth in these businesses to partially mitigate the impact of the volatility of the company's core chlor-alkali business over time," he added. The ratings on Olin reflect S&P's view of the company's established market positions in the chlor-alkali industry, good profitability, and "strong" liquidity. S&P also bases its ratings on its belief that management will continue to be financially prudent in terms of growth spending and use of debt leverage. However, the company is also subject to cyclicality stemming from its large chlor-alkali operations. S&P characterizes Olin's business risk profile as "fair" and its financial risk profile as "intermediate." The stable outlook reflects S&P's expectation that Olin's operating results will improve gradually over the next year to support strong liquidity and financial metrics appropriate for the ratings. S&P also expects that management will maintain prudent financial policies that will support credit quality. S&P could lower the ratings if revenue, pro forma for the K.A. Steel acquisition, declines by at least 5% and EBITDA margins decline by over 300 basis points over the next year, leading to FFO to debt below 25%, with no near-term prospects for improvement. Such a scenario could occur if weak caustic soda and chlorine demand causes ECU pricing to fall, and the growth of Olin's bleach and HCl sales falters. S&P could also the lower ratings if the company increases debt to fund acquisitions or growth spending without offsetting improvements to the business risk profile. Because of Olin's concentration in the cyclical commodity chlor- alkali industry, S&P views a higher rating as less likely over the next year. To consider higher ratings, S&P would expect the company to commit to maintaining a more conservative financial profile to offset this cyclicality. S&P could also consider higher ratings if the company significantly diversifies its earnings into more stable business lines. ONCURE HOLDINGS: Section 341(a) Meeting Scheduled for Aug. 2 ------------------------------------------------------------ David L. Buchbinder, Esq., a trial attorney with the Office of the United States Trustee in Wilmington, Delaware, sent a notice to the Court that a meeting of creditors in the bankruptcy case of OnCure Holdings, Inc., will be held on Aug. 2, 2013, 11:00 a.m. 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 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. Bradford C. Burkett signed the petition as CEO. On the Petition Date, the Debtors disclosed total assets of $179,327,000 and total debts of $250,379,000. 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: Bankruptcy Court Approves First Day Motions ----------------------------------------------------------- Orchard Supply Hardware Stores on June 19 disclosed that the U.S. Bankruptcy Court for the District of Delaware has approved all of the First Day Motions related to its voluntary Chapter 11 process initiated June 17, 2013. These motions collectively will enable the Company to continue operating its business as usual as it completes its Chapter 11 case. Among the approved motions, the Court granted Orchard access to $177 million in debtor in-possession financing from Wells Fargo Bank, the Company's existing ABL lender, and its Term Loan Lenders. This financing, in addition to Orchard's ongoing cash flow, will ensure the Company is able to continue meeting its financial obligations throughout the Chapter 11 case. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that late June 18, the company gave the bankruptcy judge in Delaware papers for formal approval of interim financing. The papers were modified to incorporate comments from June 18 hearing. Orchard Supply sought interim approval of a $124.3 million loan, increasing to $164.3 million at a final financing hearing. The Court also approved motions giving Orchard authority to, among other things, pay employee wages and benefits as usual throughout the Chapter 11 process, including health and medical benefits, paid time off, expense reimbursement and other incentive programs as well as maintain its Club Orchard customer rewards program, continue coupons and promotions, honor its gift cards and otherwise serve its customers as usual. Additionally, Orchard was granted approval to accept bids from companies to manage store closing sales for an initial eight stores, with potential additional stores to be determined as the Chapter 11 process continues. "The motions approved [Wednes]day will help ensure we continue to operate our business as usual and uphold our commitments to all of our stakeholders while we work to achieve our financial objectives," said Mark Baker, Orchard President and Chief Executive Officer. "This is a very important milestone in the Chapter 11 process, and we thank the Court for its careful consideration of our requests. We are confident that Orchard is on the right path for long-term success through the actions we are taking with our business and certain stores. We are grateful for the support we have received from our lenders, associates, customers and supplier partners as we work to achieve a sustainable capital structure for our business." Orchard previously announced June 17, 2013, that it has reached an agreement through which Lowe's Companies, Inc. will acquire the majority of its assets for $205 million in cash, plus the assumption of payables owed to nearly all of Orchard's supplier partners. To facilitate the sale and restructure its balance sheet, Orchard filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware. The agreement with Lowe's comprises the initial stalking horse bid in the Court-supervised auction process under Section 363 of the Bankruptcy Code. Under the terms of the agreement, Orchard will operate as a separate, standalone business at the completion of the sale process, retaining its brand, management team and associates. The Company also will benefit from the financial stability of its new corporate parent which, combined with the benefits of its balance sheet restructuring, will allow Orchard to continue its repositioning and growth strategy. Liquidators Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Orchard Supply Hardware Stores Corp. received approval to hold an auction to select liquidators who will conduct going-out-of-business sales at as many as 30 of the 91 hardware stores. As reported in the June 19 edition of the TCR, Orchard Supply has sought approval to implement store closing sales for eight underperforming stores. The agency agreement with the liquidators contains a put option that allows the Debtors to identify up to 22 additional stores to be included in the closing sales. The Debtors selected a joint venture comprised of Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC, to act as the stalking horse liquidator. But the deal with Hilco and Gordon is subject to higher and better offers. The Debtors will entertain other offers on these terms: -- Deadline for initial bids is on June 25, 2013 at 4:00 p.m. -- Offers must provide for a minimum of a 74 percent guaranty percentage. -- An auction will be conducted on June 27 at 10:00 a.m. -- A sale hearing will be conducted on June 28. 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. Orchard Supply has signed a deal to sell at least 60 of 91 stores to Lowe's Companies, Inc., absent higher and better offers. 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: Says Equity Holders Out of the Money ---------------------------------------------------- Orchard Supply Hardware Stores on June 19 said has noticed high trading volume in Orchard's Class A Common Stock and Series A Preferred Stock following its filing of Chapter 11 with the U.S. Bankruptcy Court on June 17, 2013. Stockholders of a company in Chapter 11 generally receive value only if all claims of the company's secured and unsecured creditors are fully satisfied. In this case, Orchard's management strongly believes that it is highly unlikely all such claims will be fully satisfied. Accordingly, it is expected that the Company's equity holders will experience a complete loss of their investment as a result of Orchard's Chapter 11 bankruptcy proceedings. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that until Orchard Supply popped the bubble June 19, the company's stock was beginning to look like it would retain value seldom seen among bankrupt companies. According to the report, before the hardware-store chain filed for Chapter 11 reorganization on June 17, the common stock had been trading for about $2 or less from mid-April until the end of May, when it rose to $3.73 on June 3 in trading on the Nasdaq Stock Market. The stock fell back to $1.88 on June 14, the last trading day before Orchard Supply's bankruptcy filing in Delaware. The first day in bankruptcy was a victory for stockholders, when the stock gained 12 percent, closing at $2.11. Although there was an 18 percent sell-off on June 18, the stock nonetheless ended the day at $1.73. Before the markets opened June 19, Orchard Supply issued the press release that said it was "highly unlikely" creditors could be paid in full, meaning that "equity holders will experience a complete loss of their investment." According to the report, the stock reacted to the announcement by opening sharply lower, reaching an intraday low of 61 cents at 12:20 p.m., and closing at 71 cents, a 59 percent loss on the day. Offers for unsecured claims indicate that full payment might not be so far-fetched. Claim buyers are offering 90 cents on the dollar for general unsecured claims, according to Joe Sarachek, a managing director of special situations at CRT Special Investments LLC. The report notes that the company is resolving a lawsuit that could have been more expensive to defend than to settle. Several workers sued in state court accusing the company of violating California wage and hour laws. The company agreed to pay $800,000 to end the suit. There will be a hearing in bankruptcy court on July 15 to approve the settlement, worked out in December. 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. ORECK CORP: Posts $5M Deficit During Last Three Weeks of May ------------------------------------------------------------ G. Chambers Williams III, writing for The Tennessean, reports that Oreck Corp. posted a nearly $5 million cash flow deficit during the last three weeks of May, after filing for Chapter 11 bankruptcy protection. According to the report, Bill Norton, the Nashville attorney representing Oreck in the Chapter 11 case, said the deficit was related more to the bankruptcy itself than the company's overall profitability. "When a company enters bankruptcy, suppliers start requiring that prepayments be made, which can be a real drain on cash because you have to pay for something you haven't received yet," he said, according to the report. "It's also often common that companies will resist making payments to a company in bankruptcy until they know what's going on." The report relates Mr. Norton said Oreck has begun seeing better results in June. "Things have turned around a bit because people have begun to make payments," he said. About Oreck Corp. Oreck Corporation and eight affiliates sought Chapter 11 protection (Bankr. M.D. Tenn. Lead Case No. 13-04006) in Nashville, Tennessee on May 6, 2013, with plans to sell the business as a going concern. Oreck has been in the business of manufacturing, marketing and selling vacuum cleaners and related products since the late 1960s. The corporate offices are located in Nashville, and the manufacturing and call center is located in Cookeville, Tennessee. Oreck has 70 employees in Nashville, 250 employees at its plant in Cookeville and 325 employees operating 96 company-owned and managed retail stores. The Debtor estimated at least $10 million in assets and liabilities as of the Chapter 11 filing. Bradley Arant Boult Cummings LLP serves as counsel to the Debtor. BMC Group Inc. is the claims and notice agent. The U.S. Trustee appointed six creditors to the Official Committee of Unsecured Creditors. Oreck is seeking to sell itself at an auction on July 8. Members of the founding Oreck family, through the entity Oreck Acquisition Holdings LLC, have submitted a bid of about $23 million to take the company out of bankruptcy. Competing bids are due July 1. PARKLAND II: Updated Case Summary & Creditors' Lists ---------------------------------------------------- Lead Debtor: Parkland II 3217 West Potomac Chicago, IL 60651 Bankruptcy Case No.: 13-25121 Chapter 11 Petition Date: June 18, 2013 Court: United States Bankruptcy Court Northern District of Illinois (Chicago) Judge: Janet S. Baer Debtor's Counsel: Michael V. Ohlman, Esq. GUNDERSON & THARP, LLC 308 West Erie, Suite 300 Chicago, IL 60654 Tel: (312) 626-2275 E-mail: mvohlman@ohlmanlaw.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 Affiliate that simultaneously filed separate Chapter 11 petition: Debtor Case No. ------ -------- Parkland III, LLC 13-25125 Assets: $100,001 to $500,000 Debts: $1,000,001 to $10,000,000 The petitions were signed by James Brettner, president. A. A copy of Parkland II's list of its seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb13-25121.pdf B. A copy of Parkland III, LLC's list of its seven largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/ilnb13-25125.pdf PATHEON INC: S&P Revises Outlook to Stable & Affirms 'B+' CCR ------------------------------------------------------------- Standard & Poor's Ratings Services said it revised its outlook on pharmaceutical contract services provider Patheon Inc. to stable from negative. S&P affirmed its 'B+' corporate credit rating and 'B+' issue-level rating on Patheon's senior secured credit facilities. The outlook revision follows five quarters of year- over-year EBITDA margin improvement, signaling that the restructuring actions taken last year have yielded sustainable results. "We view Patheon's financial risk profile as "aggressive", reflecting pro forma leverage of around 4.6x and FFO to total debt that we expect to be around 15% in 2013 (excluding one-time charges associated with the first-quarter Banner acquisitions and debt refinancing)," said credit analyst Shannan Murphy. "It also reflects our view that Patheon is likely to pursue further debt- funded acquisitions to grow the business. We assess Patheon's business risk as "weak", reflecting Patheon's relatively short track record in improving operations and our view that the contract manufacturing organization (CMO) industry is capital intensive, highly fragmented, and competitive." "Our rating outlook is stable, reflecting our expectation that Patheon will sustain leverage in the mid-4x range and that FFO to total debt will be in the mid- to high-teens on a normalized basis. We could lower the rating if leverage increases above 5x for a sustained period of time. In our view, this could occur if the company is significantly more acquisitive than we currently expect. Assuming a 10x multiple on acquired EBITDA, we believe that the current rating could support about $300 million in debt financed acquisitions," S&P added. "We could raise the rating if the company is able to sustain leverage below 4x and improve FFO to total debt to above 20%. In our view, this could occur if Patheon is able to raise EBITDA margins about 200 bps to around 16%. While we believe that Patheon could achieve these metrics within the next year, a higher rating would also require us to believe that the company is committed to maintaining these leverage levels, and that any acquisitions would not meaningfully increase leverage," S&P noted. PATRIOT COAL: Knighthead, Aurelius Negotiate Funding Plan --------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Patriot Coal Corp. is negotiating for Knighthead Capital Management LLC and Aurelius Capital Management LP to provide seed money for a Chapter 11 reorganization by agreeing to purchase hundreds of millions of dollars of securities not snapped up by creditors in a rights offering. According to the report, the coal producer scheduled a July 16 hearing for approval to pay expenses and fees incurred by Knighthead and Aurelius during negotiations. Between them, the two investors have 54 percent of Patriot's senior notes and about 10 percent of the convertible notes. Papers filed on June 18 with the U.S. Bankruptcy Court in St. Louis didn't provide details on the rights offering or the reorganization plan. Mr. Rochelle notes that whether a company survives to be reorganized is yet to be seen. The mine workers union said its members will take a strike vote this month in protest against wage and benefit concessions the bankruptcy judge authorized Patriot to implement. Although bankruptcy law gives the judge power to reduce wages and benefits, it doesn't allow the court to enjoin workers from striking. 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. PATRIOT COAL: Can Employ Greenberg Traurig as Spl. Lit. Counsel --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Missouri has granted Patriot Coal Corporation, et al., authorization to employ Greenberg Trauring, LLP, as special litigation counsel, nunc pro tunc to May 1, 2013. As reported in the TCR on May 29, 2013, Greenberg Traurig will render, among others, these professional services: a. prepare, on behalf of the Debtors, all necessary and appropriate motions, proposed orders, other pleadings, notices and other documents in connection with certain federal black lung litigation; b. advise and assist the Debtors in connection with any settlements concerning the federal black lung litigation; and c. perform all other necessary or appropriate legal services. To the best of the Debtors' knowledge, information and belief, other than in connection with these chapter 11 cases and in prior representations of the Debtors, Greenberg Traurig does not represent or hold any interest adverse to the Debtors or to the estates with respect to the Retained Matters on which Greenberg Traurig is to be employed, except for de minimis amounts owed by the Debtors for prepetition services rendered by Greenberg Traurig totaling approximately $58,251. The range of hourly rates for any Greenberg Traurig professional working on any federal black lung litigation matter for the Debtors is $305 per hour, or less. 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. PENSON WORLDWIDE: Obtains Court Rulings; To Reject More Contracts ----------------------------------------------------------------- Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware entered a flurry of rulings on June 11, 2013, in Penson Worldwide, Inc., and its affiliated debtors' Chapter 11 cases, ruling that: -- the requirements of Section 345 (b) of the Bankruptcy Code and the U.S. Trustee's Operating Guidelines for Chapter 11 cases are waived on a further interim basis, through and including June 12, 2013, such that the Debtors are permitted to maintain their deposits in their Bank Accounts in accordance with their existing deposit practices. -- the exclusive plan filing period for each Debtor is extended through and including July 12, 2013, and the exclusive solicitation period for each Debtor is extended through and including September 9, 2013, pursuant to Section 1121 (d) of the Bankruptcy Code. -- the motion of Adamba Imports International, Inc. for relief from the automatic stay to permit continuation, prosecution and commencement, of its FINRA Arbitration against the Debtors is granted. Adamba's motion to file its motion under seal is also approved. If the Confirmation Order is not entered within 60 days, the Claimant will have the option to have its motion heard on the next available omnibus hearing date. -- the Debtors' Second Omnibus (Substantive) Objection to claims is sustained. Disputed Claims are disallowed in their entirety, while others were disallowed in part. The hearing on the Objection is continued until July 10, 2013, 9:30 a.m. with respect to Claim No. 147 and 152 filed by Christopher K. Hehmeyer; Claim Nos. 183, 184 and 186-189 filed by Steven J. Rosendberg, Esq.; and Claim No. 28 filed by Thomson Reuters (Markets), LLC). -- Regions Equipment Finance Corporation's motion for relief from the Automatic Stay and for Adequate Protection, in which Regions seek (a) stay relief with respect to the Equipment or (b) adequate protection payments to the extent the Debtor wants to retain the Equipment, is granted. The Stay is terminated so as to permit Regions to exercise all available rights and remedies with respect to Regions' interest in the Equipment, including but not limited to retrieving the Equipment and foreclosing upon the Equipment. Upon exercising their foreclosure rights, Regions will promptly reduce the amount of their claim to account for the value of the Equipment recovered by regions or proceeds obtained from the sale of any Equipment to a third-party. The Court further entered a separate order on June 19, 2013, deeming Adamba Imports' Claim No. $1,149,431.44 as timely filed against Penson Financial Services, Inc., plus a claim in an unliquidated amount for other compensatory damages. No party will object on the Claims on the basis that these are tardily filed. In other matters, the Debtors have filed a motion seeking the court's authority to reject three executory contracts with Internap (V10414) and one contract with AT&T, nunc pro tunc to June 12, 2013, saying the Contracts are not a source of potential value for the estates or creditors, and continued expense in maintaining the Contracts and attempting to market the Contracts would likely outweigh any consideration to be received from assignees of the Contracts. A hearing on the motion will be held on July 10, 2013, at 9:30 a.m. Parties have until June 26, 2013, at 4:00 p.m., to file objections. Penson is represented by Kenneth J. Enos, Esq., Pauline K. Morgan, Esq., Ryan M. Bartley, Esq., Ashley E. Markow, Esq., of Young Conaway Stargatt & Taylor, LLP, and Andrew N. Rosenberg, Esq., and Oksana Lashko, Esq., of Paul, Weiss, Rifkind, Wharton & Garrison LLP. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PENSON WORLDWIDE: Files Amended Schedules of Assets and Debts ------------------------------------------------------------- Penson Worldwide, Inc., and its affiliated debtors filed notices of amendment to their schedules of assets and liabilities. Full-text copies of the notices filed by: -- Penson World Inc. to amend its Schedule F may be accessed for free at http://bankrupt.com/misc/PensonWW_Amended_SchedF.pdf -- Nexa Technologies Inc. to amend its Schedule F may be accessed for free at http://bankrupt.com/misc/Nexa_Amended_SchedF.pdf -- Penson Financial Services Inc. to amend its Schedules B and F may be accessed for free at: http://bankrupt.com/misc/PFSI_Amended_SchedB.pdf http://bankrupt.com/misc/PFSI_Amended_SchedF.pdf -- Penson Futures to amend its Schedule F may be accessed for free At http://bankrupt.com/misc/PensonFutures_Amended_SchedF.pdf Penson is represented by Kenneth J. Enos, Esq., Pauline K. Morgan, Esq., Ryan M. Bartley, Esq., Ashley E. Markow, Esq., of Young Conaway Stargatt & Taylor, LLP, and Andrew N. Rosenberg, Esq., and Oksana Lashko, Esq., of Paul, Weiss, Rifkind, Wharton & Garrison LLP. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PENSON WORLDWIDE: D&O Expense Reimbursement Sought -------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved Penson Worldwide's motion for an order permitting the Company's current and former directors, officers and employees to seek reimbursement and advancement of defense costs from the Debtors' insurance providers. As previously reported, "The Debtors have made these undertakings to ensure that current and former employees are adequately represented in connection with the Investigations, and the Debtors believe they may be prejudiced in the Investigations if their current and former employees do not have the benefit of representation in connection with providing testimony to the Regulators," the report said, citing court documents. About Penson Worldwide Plano, Texas-based Penson Worldwide Inc. and its affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 13-10061) on Jan. 11, 2013. Founded in 1995, Penson Worldwide is provider of a range of critical securities and futures processing infrastructure products and services to the global financial services industry. The company's products and services include securities and futures clearing and execution, financing and cash management technology and other related offerings, and it provides tools and services to support trading in multiple markets, asset classes and currencies. Penson was one of the top two clearing brokers overall in the United States. Its foreign-based subsidiaries were some of the largest independent clearing brokers in Canada and Australia and the second largest independent clearing broker in the United Kingdom as of Dec. 31, 2010. In 2012, the company sold its futures division to Knight Capital Group Inc. and its broker-deal subsidiary to Apex Clearing Corp. But the company was unable to successfully streamline is business after the asset sales. Attorneys at Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors. Kurtzman Carson Consultants LLC is the claims and notice agent. The U.S. Trustee for Region 3 appointed three members to the Official Committee of Unsecured Creditors: (i) Schonfeld Group Holdings LLC; (ii) SunGard Financial Systems LLC; and (iii) Wells Fargo Bank, N.A., as Indenture Trustee. The Committee selected Hahn & Hessen LLP and Cousins Chipman & Brown, LLP to serve as its co-counsel, and Capstone Advisory Group, LLC, as its financial advisor. Kurtzman Carson Consultants LLC serves as its information agent. The company estimated $100 million to $500 million in assets and liabilities in its Chapter 11 petition. The last publicly filed financial statements as of June 30 showed assets of $1.17 billion and liabilities totaling $1.227 billion. PREMIER INVESTMENTS: Case Summary & 7 Unsecured Creditors --------------------------------------------------------- Debtor: Premier Investments, Inc. 10136 Sandy Marsh Lane Orlando, FL 32832 Bankruptcy Case No.: 13-07502 Chapter 11 Petition Date: June 18, 2013 Court: United States Bankruptcy Court Middle District of Florida (Orlando) Judge: Cynthia C. Jackson Debtor's Counsel: Justin M. Luna, Esq. LATHAM, SHUKER, EDEN & BEAUDINE, LLP P.O. Box 3353 Orlando, FL 32802-3353 Tel: (407) 481-5800 Fax: (407) 481-5801 E-mail: bknotice@lseblaw.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A list of the Company?s seven largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/flmb13-7502.pdf The petition was signed by Kamlesh Vadher, president. PREMIER NW: Default Judgment Granted In Favor of Franchisor ----------------------------------------------------------- District Judge Richard W. Story granted the Plaintiffs' Motion for Default Judgment in the civil action Holiday Hospitality Franchising, LLC, et al. v. Premier NW Investment Hotels, LLC, et al., Case No. 1:12-CV-3608-RWS (N.D. Ga.). Filed in October 2012, the action alleges that Premier breached its obligations under a license agreement by failing to (i) pay fees due and owing to HHFL, and (ii) cease use of Plaintiffs' HOLIDAY INN(R) marks in connection with its continued provision of hotel services. Premier and HHFL are parties to a license agreement dated December 1998 that authorized Premier to operate a HOLIDAY INN EXPRESS(R) Hotel and Suites in Vancouver, Washington. The Agreement terminated in December 2010. On review, the District Court finds that default judgment is appropriate in the case. "Plaintiffs are entitled to judgment in their favor on each of the claims. However, a hearing on remedies is appropriate before entry of judgment. At the hearing, the Court will determine the appropriate amount of damages and attorney's fees to which to Plaintiffs are entitled. The Court will also determine injunctive relief that is appropriate," Judge Story said. The Plaintiffs are ordered to file a statement of damages and a statement of attorney's fees without delay. A copy of Judge Story's May 24, 2013 Order is available at http://is.gd/3VPdTifrom Leagle.com. Premier NW Investment Hotels, LLC filed for bankruptcy on March 3, 2011, in connection with its ownership and operation of its hotel. The case was dismissed on Dec. 8, 2011 due to Premier's unauthorized use of cash collateral. On Jan. 11, 2013, Premier filed a second bankruptcy petition, which was also dismissed on Feb. 8, 2013 on the determination that Premier fild the bankruptcy in bad faith. That bankruptcy case was closed on March 4, 2013. Plaintiffs Holiday Hospitality Franchising, LLC and Six Continents Hotels, Inc. are represented by James White Faris, VI, Esq., Michael W. Tyler, Esq., and Robert Edward Buckley, Esq. of Kilpatrick Townsend & Stockton, LLP. Defendants Premier NW Investment Hotels, L.L.C. and Michael Defrees are represented by Robert M. Ward, Esq. PURIFIED RENEWABLE: Ethanol Plant Goes Up for Auction Aug. 8 ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that a non-operating ethanol plant in Buffalo Lake, Minnesota, will be sold at auction on Aug. 8. The bankruptcy court approved sale procedures with bids due initially by July 31. A hearing to approve the sale will take place Aug. 13. No buyer is yet under contract. The report notes that secured lender West Ventures LLC, owed $17.8 million on a first-lien debt, is entitled to bid for the plant using debt rather than cash. The plant is capable of producing 18 million gallons a year. However, it hasn't operated since 2010. It's being held in a so- called cold-idle condition. About Purified Renewable Energy Purified Renewable Energy filed a Chapter 11 petition (Bankr. D. Minn. Case No. 13-41446) on March 25, 2013. Clinton E. Cutler, Esq., at Fredrikson & Byron, P.A., in Minneapolis, serves as counsel. The Debtor estimated at least $1 million in assets and at least $10 million in liabilities. Purified Renewable sought bankruptcy protection three days after its ethanol plant in Buffalo Lake, Minnesota, shut down. The current owners exercised an option in November to buy the facility from a cooperative named Minnesota Energy. QUALITY DISTRIBUTION: Enters Into New $17.5MM Term Loan Facility ---------------------------------------------------------------- Quality Distribution, Inc.'s wholly owned subsidiaries, Quality Distribution, LLC, and QD Capital Corporation, have issued notice that they will redeem $22.5 million in aggregate principal amount of their 9.875 percent Second-Priority Senior Notes due 2018 on July 15, 2013. The redemption price for the 2018 Notes will be equal to 100 percent of the aggregate redemption amount of $22.5 million (plus accrued but unpaid interest up to the Redemption Date) plus a 3.0 percent premium. Net proceeds from the Term Loan Facility, plus borrowings under QD LLC's existing revolving ABL credit facility or cash on hand, will fund the redemption. In connection with this activity, Quality also announced that QD LLC's existing Credit Agreement has been amended to provide for a new $17.5 million term loan facility. Funding of the Term Loan Facility will coincide with the note redemption. "This attractively-priced Term Loan Facility provides us with incremental borrowing capacity, thereby allowing us to opportunistically reduce some of our higher cost debt earlier than expected, while maintaining our solid liquidity position," commented Joe Troy, executive vice president and chief financial officer. "We remain committed to reducing leverage with our free cash flow and will continue to evaluate options to enhance shareholder value." Additional information is available for free at: http://is.gd/xElnoh About Quality Distribution Quality Distribution, LLC, and its parent holding company, Quality Distribution, Inc., are headquartered in Tampa, Florida. The company is a transporter of bulk liquid and dry bulk chemicals. The company's 2010 revenues are approximately $686 million. Apollo Management, L.P., owns roughly 30% of the common stock of Quality Distribution, Inc. Quality Distribution reported net income of $50.07 million for the year ended Dec. 31, 2012, as compared with net income of $23.43 million in 2011. The Company's balance sheet at March 31, 2013, showed $510.52 million in total assets, $521.63 million in total liabilities, and a $11.11 million total shareholders' deficit. Bankruptcy Warning According to the Company's annual report for the period ended Dec. 31, 2012, the Company had consolidated indebtedness and capital lease obligations, including current maturities, of $418.8 million as of Dec. 31, 2012. The Company must make regular payments under the ABL Facility and its capital leases and semi- annual interest payments under its 2018 Notes. The Company's 2018 Notes issued in the quarter ended Dec. 31, 2010, carry high fixed rates of interest. In addition, interest on amounts borrowed under the Company's ABL Facility is variable and will increase as market rates of interest increase. The Company does not presently hedge against the risk of rising interest rates. The Company's higher interest expense may reduce its future profitability. The Company's future higher interest expense and future redemption obligations could have other important consequences with respect to the Company's ability to manage its business successfully, including the following: * it may make it more difficult for the Company to satisfy its obligations for its indebtedness, and any failure to comply with these obligations could result in an event of default; * it will reduce the availability of the Company's cash flow to fund working capital, capital expenditures and other business activities; * it increases the Company's vulnerability to adverse economic and industry conditions; * it limits the Company's flexibility in planning for, or reacting to, changes in the Company's business and the industry in which the Company operates; * it may make the Company more vulnerable to further downturns in its business or the economy; and * it limits the Company's ability to exploit business opportunities. The ABL Facility matures August 2016. However, the maturity date of the ABL Facility may be accelerated if the Company defaults on its obligations. "If the maturity of the ABL Facility and/or such other debt is accelerated, we may not have sufficient cash on hand to repay the ABL Facility and/or such other debt or be able to refinance the ABL Facility and/or such other debt on acceptable terms, or at all. The failure to repay or refinance the ABL Facility and/or such other debt at maturity would have a material adverse effect on our business and financial condition, would cause substantial liquidity problems and may result in the bankruptcy of us and/or our subsidiaries. Any actual or potential bankruptcy or liquidity crisis may materially harm our relationships with our customers, suppliers and independent affiliates." RADIENT PHARMACEUTICALS: Final Agreement with UNI Pharma -------------------------------------------------------- Radient Pharmaceuticals Corporation previously disclosed its entry into a 5-year license agreement between AMDL Diagnostics, Inc., a division within the Company, and Uni Pharma Co., Ltd. a Taipei Taiwan limited liability company, that provides UNI with a 5-year exclusive license to RXPC's Onko-Sure(R) (formerly called DR-70 cancer blood test kits), procedures, analyses, data, know how, manufacturing, manufacturing processes, components, trademarks and intellectual property. The initial report inaccurately disclosed that UNI only has exclusive license rights in Taiwan; however, the final agreement provides UNI with exclusive rights to the license in all of the following territories: Taiwan ROC, China PRC, Hong Kong, Malaysia, Singapore, Indonesia, Thailand, Japan, India, Turkey Australia and New Zealand. A copy of final version of the agreement is available at: http://is.gd/ntz7Mt About Radient Pharmaceuticals Tustin, Calif.-based Radient Pharmaceuticals Corporation is engaged in the research, development, manufacturing, sale and marketing of its Onko-Sure(R) test kit, which is a proprietary in- vitro diagnostic (or IVD) cancer test. The Company markets its Onko-Sure(R) test kits in the United States, Canada, Chile, Europe, India, Korea, Japan, Taiwan, Vietnam and other markets throughout the world. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, KMJ Corbin & Company LLP, in Costa Mesa, California, expressed substantial doubt about Radient's ability to continue as a going concern. The independent auditors noted that the Company has incurred significant operating losses, had negative cash flows from operations in 2011 and 2010, and has a working capital deficit of approximately $49.8 million at Dec. 31, 2011. The Company reported a net loss of $86.19 million in 2011, compared with a net loss of $85.71 million in 2010. The Company's balance sheet at Dec. 31, 2011, showed $1.18 million in total assets, $50.87 million in total current liabilities, and a stockholders' deficit of $49.69 million. Bankruptcy Warning "The committee of our three independent directors continues to assess whether the Company has any other options to remain in business. Due to the shortage of working capital, we were unable to pay premiums associated with our Directors and Officers insurance. As a consequence, on June 25, 2012, we were informed by two members of our Board of Directors of their resignation. As a result, we have only one independent Director serving on our Board at this time. Although our remaining sales team continues to work towards completing pending and future sales of our Onko- Sure test kit, if these sales are not completed and we do not otherwise raise additional funds in the immediate future, it is likely that we will be forced to cease all operations and might seek protection from our creditors under the United States bankruptcy laws," the Company said in its annual report for the year ended Dec. 31, 2011. READER'S DIGEST: Affiliate Seeks More Time to File Ch. 11 Plan -------------------------------------------------------------- Direct Entertainment Media Group, Inc., a debtor affiliate of RDA Holding Co., asks the U.S. Bankruptcy Court for the Southern District of New York to extend the deadline within which it has exclusive right to file a plan until July 17, 2013, and the deadline within which it has exclusive right to solicit acceptances of that plan until Sept. 16. According to the DEMG, the additional time would be used to finalize the terms of a plan for the "Reorganization Plan Debtors," since many of the creditors hold claims against all of the Debtors and the treatment of those creditors' claims in the Reorganization Plan Debtors' plan impacts their treatment in any DEMG plan. The "Reorganization Plan Debtors" are all Debtors, excluding DEMG. DEMG also tells the Court that the additional time will be used to reach an agreement with its principal creditor, the Federal Trade Commission, regarding the allowance and treatment of its claim, and reach an agreement with the Reorganization Plan Debtors regarding the allowance and treatment of their intercompany claims. A hearing on the request will be held on June 28, 2013, at 10:00 a.m. (Eastern Time). Objections are due June 26. DEMG's motion was filed by Barry N. Seidel, Esq., Katie L. Weinstein, Esq., and Evan J. Zucker, Esq., at Dickstein Shapiro LLP, in New York. About Reader's Digest Reader's Digest is a global media and direct marketing company that educates, entertains and connects consumers around the world with products and services from trusted brands. For more than 90 years, the flagship brand and the world's most read magazine, Reader's Digest, has simplified and enriched consumers' lives by discovering and expertly selecting the most interesting ideas, stories, experiences and products in health, home, family, food, finance and humor. RDA Holding Co. and 30 affiliates (Bankr. S.D.N.Y. Lead Case No. 13-22233) filed for Chapter 11 protection on Feb. 17, 2013, with an agreement with major stakeholders for a pre-negotiated chapter 11 restructuring. Under the plan, the Debtor will issue the new stock to holders of senior secured notes. RDA Holding Co. listed total assets of $1,118,400,000 and total liabilities of $1,184,500,000 as of the Petition Date. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Evercore Group LLC is the investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. Reader's Digest, together with its 47 affiliates, first sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 09-23529) Aug. 24, 2009 and exited bankruptcy Feb. 19, 2010. Under the Plan, holders of allowed general unsecured claims in such sub-class will receive their pro rata share of the GUC distribution; holders of allowed general unsecured claims of Reader's Digest will also receive their pro rata share of the RDA GUC distribution and the senior noteholder deficiency claims in such sub-class will be deemed waived solely for purposes of participating in the GUC distribution and the RDA GUC distribution. The Official Committee of Unsecured Creditors is represented by Otterbourg, Steindler, Houston & Rosen, P.C. The Committee tapped Alvarez & Marsal North America, LLC, as financial advisors. REFCO INC: Mayer Brown Settles Claims It Aided $1.5B Fraud ---------------------------------------------------------- Max Stendahl of BankruptcyLaw360 reported that Mayer Brown LLP has agreed to pay an undisclosed amount to Refco Inc.'s bankruptcy trustee to settle claims the law firm aided a $1.5 billion fraud scheme that produced a flurry of criminal convictions, the parties said in a Second Circuit filing. According to the report, Refco trustee Marc S. Kirschner claims Mayer Brown, as primary counsel for Refco until its 2005 collapse, knew about and affirmatively aided a fraud against foreign exchange customers, but a New York federal judge tossed the claims in December 2010. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc., and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. REVSTONE INDUSTRIES: Creditor Wants 'Exclusivity' Deal Unsealed --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Comvest Capital II LP said in court filing this week that Revstone Industries LLC should be forced to make public disclosure of an agreement whereby the creditors' committee dropped a demand for appointment of a Chapter 11 trustee to take over the a maker of truck-engine parts. The report recounts that in response to Revstone's motion for an expansion of the exclusive right to propose a Chapter 11 plan, the bankruptcy judge in Delaware signed an order in mid-May providing that the committee can file a plan of its own only if Revstone didn't comply with specified "milestones." What they are is unknown because the settlement is under seal. According to the report, Comvest, a creditor, will appear at a June 26 hearing seeking to get the agreement unsealed, except for the milestones governing the sale of assets. Because the arrangement was a settlement, the reasons for the settlement should have been laid out and subject to court approval, Comvest argues. If there is no violation of the milestones, Revstone's exclusivity would be extended to July 31. The report notes that similarly, the creditors' reasons for having a trustee were never revealed because the papers were filed under seal. About Revstone Industries, Greenwood Forgings, & US Tool & Engineering Lexington, Kentucky-based Revstone Industries LLC, a maker of truck parts, filed for Chapter 11 bankruptcy (Bankr. D. Del. Case No. 12-13262) on Dec. 3, 2012. Judge Brendan Linehan Shannon oversees the case. In its petition, Revstone estimated under $50 million in assets and debts. Affiliate Spara LLC filed its Chapter 11 petition (Bankr. D. Del. Case No. 12-13263) on Dec. 3, 2012. Lexington-based Greenwood Forgings, LLC (Bankr. D. Del. Case No. 13-10027) and US Tool & Engineering LLC (Bankr. D. Del. Case No. 13-10028) filed separate Chapter 11 petitions on Jan. 7, 2013. Judge Shannon also oversees the cases. A motion for joint administration of the cases has been filed. Duane David Werb, Esq., at Werb & Sullivan, serves as bankruptcy counsel to Greenwood and US Tool. Greenwood estimated $1 million to $10 million in assets and $10 million to $50 million in debts. US Tool & Engineering estimated under $1 million in assets and $1 million to $10 million in debts. The petitions were signed by George S. Homeister, chairman. RITE AID: Plans to Offer $400 Million Senior Notes Due 2021 ----------------------------------------------------------- Rite Aid Corporation intends to offer $400 million aggregate principal amount of a new series of senior notes due 2021. The Notes will be unsecured, unsubordinated obligations of Rite Aid Corporation and will be guaranteed by substantially all of Rite Aid's subsidiaries. Rite Aid intends to use the net proceeds of the offering of the Notes, together with available cash or borrowings under Rite Aid's revolving credit facility, to redeem a corresponding amount of its outstanding 9.5 percent senior notes due 2017. Rite Aid's results of operations, including net income and earnings per share, and guidance could be affected by fees, expenses and charges related to the refinancing transactions. About Rite Aid Corp. Drugstore chain Rite Aid Corporation (NYSE: RAD) -- http://www.riteaid.com/-- based in Camp Hill, Pennsylvania, is one of the nation's leading drugstore chains with 4,626 stores in 31 states and the District of Columbia. Rite Aid disclosed net income of $118.10 million on $25.39 billion of revenue for the year ended March 2, 2013, as compared with a net loss of $368.57 million on $26.12 billion of revenue for the year ended March 2, 2012. The Company's balance sheet at March 2, 2013, showed $7.07 billion in total assets, $9.53 billion in total liabilities and a $2.45 billion total stockholders' deficit. * * * As reported by the TCR on March 1, 2013, Moody's Investors Service upgraded Rite Aid Corporation's Corporate Family Rating to B3 from Caa1 and Probability of Default Rating to B3-PD from Caa1-PD. At the same time, the Speculative Grade Liquidity rating was revised to SGL-2 from SGL-3. This rating action concludes the review for upgrade initiated on Feb. 4, 2013. Rite Aid carries a 'B-' corporate credit rating from Standard & Poor's Ratings Services. RITE AID: New $810MM Sr. Guaranteed Notes Get Moody's Caa2 Rating ----------------------------------------------------------------- Moody's Investors Service assigned a Caa2 to Rite Aid Corporation's proposed $810 million senior unsecured guaranteed notes due 2021. All other existing ratings are affirmed, including Rite Aid's B3 Corporate Family Rating. The proceeds from the proposed notes will be used to repay in full Rite Aid's $810 million 9.5% notes due 2017. Moody's views this refinancing as a credit positive event as it will reduce Rite Aid's annualized interest expense going forward which will improve interest coverage. The refinancing will also benefit Rite Aid's debt maturity profile. The following rating is assigned and subject to the successful closing of the transaction and review of final documentation: Proposed $810 million guaranteed senior unsecured notes at Caa2 (LGD 5, 81%) The following ratings are affirmed: Corporate Family Rating at B3 Probability of Default Rating at B3-PD $650 million 8% senior secured first lien notes due 2020 at B1 (LGD 2, 25%) $1.795 billion asset based revolving credit facility due 2018 at B1 (LGD 2, 25%) $1.161 Tranche 6 first lien term loan due 2020 at B1 (LGD 2, 25%) $500 million second lien term loan due 2021 at B3 (LGD 4, 56%) $470 million second lien term loan due 2020 at B3 (LGD 4, 56%) Guaranteed senior unsecured notes at Caa2 (LGD 5, 81%) Unguaranteed senior unsecured notes at Caa2 (LGD 6, 95%) Speculative Grade Liquidity rating at SGL-2 The following ratings will be withdrawn upon the closing of the transaction and their repayment in full: 9.5% guaranteed senior unsecured notes due 2017 at Caa2 (LGD 5, 82%) Ratings Rationale: Rite Aid's B3 Corporate Family Rating reflects its high leverage with debt to EBITDA likely remaining above 7.0 times over the next twelve months and weak interest coverage with EBITA to interest expense of 1.3 times. The rating also reflects Rite Aid's mid-tier competitive position as the fourth largest drug store chain in the U.S. Positive ratings consideration is given to Rite Aid's good liquidity, its large revenue base, and the solid opportunities of the prescription drug industry. The stable outlook acknowledges Rite Aid's high level of debt and that Moody's expects Rite Aid's operating income to modestly contract in 2013 due the reversal of LIFO credit to its cost of goods sold in 2012 resulting in credit metrics remaining at levels indicative of a B3 rating. While not anticipated in the near term, ratings could be lowered if Rite Aid experiences a decline in earnings such that EBITA to interest expense is likely to remain below 1.0 times or should free cash flow become persistently negative. An upgrade would require Rite Aid's operating performance to further improve or absolute debt levels to fall such that it demonstrates that it can maintain debt to EBITDA below 7.0 times and EBITA to interest expense above 1.25 times. In addition, a higher rating would require Rite Aid to maintain at least adequate liquidity. 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. Rite Aid Corporation, headquartered in Camp Hill, Pennsylvania, operates over 4,600 drug stores in 31 states and the District of Columbia. Revenues are about $26 billion. ROOFING SUPPLY: High Leverage Prompts Moody's to Cut CFR to 'B3' ---------------------------------------------------------------- Moody's Investors Service downgraded the corporate family rating of Roofing Supply Group, LLC, a national distributor of roofing products and related building materials, to B3 from B2 and its probability of default rating to B3-PD from B2-PD. These rating actions result from our view that key debt leverage metrics will remain elevated, warranting the lower rating. In a related rating action, Moody's lowered the rating of the company's senior secured term loan to B3 from B2, and its senior unsecured notes to Caa1 from B3. The rating outlook is stable. The following rating actions were taken: Corporate Family Rating downgraded to B3 from B2; Probability of Default Rating downgraded to B3-PD from B2-PD; Senior secured term loan due 2019 lowered to B3 (LGD4, 51%) from B2 (LGD4, 51%); and, Senior unsecured notes due 2020 lowered to Caa1 (LGD5, 74%) from B3 (LGD5, 73%). Ratings Rationale: The downgrade of RSG's corporate family rating to B3 from B2 results from debt leverage credit metrics being higher than previously anticipated. Operating performance is below our expectations from when Moody's rated RSG in May 2012, at which time Clayton, Dubilier & Rice, LLC acquired RSG. Operating margins over the past few quarters have contracted due to higher product costs, lower than anticipated volumes, and a product shift towards commercial roofing from residential roofing products. Commercial roofing products are normally lower margin items than the margins for residential roofing products. Reduced storm activity in 1Q13 relative to the year prior adversely impacted operating performance as well. Also, Moody's anticipated permanent balance sheet debt reduction beyond minimum term loan amortization, which has not occurred nor is likely to take place in any meaningful amounts. Despite the prospect of some operating improvement, Moody's projects adjusted debt-to-EBITDA will remain elevated and is likely to exceed 6.5 times over the next 12 months. This is higher than the level previous identified as a trigger for downward ratings pressure. Debt-to-book capitalization will exceed 75%, and the company has significant amount of negative tangible net worth. Also, Moody's believes RSG will have difficulty generating large levels of retained cash flow relative to its debt, resulting in retained cash flow-to-debt remaining below 5% over our time horizon (all ratios incorporate Moody's adjustments). These key credit metrics are characteristic of lower rated entities. Providing some offset to its leveraged capital structure and resulting fragile cash flow metrics is our view that the roofing products sector is a source of strength within the building products industry. In most cases, projects related to roof repair or replacement, the main driver of RSG's revenues, are considered non-discretionary. Also, RSG's good liquidity profile characterized by significant availability under the company's asset-based revolver is a key credit strength. Although the $175 million revolving credit facility is used largely for seasonal working capital needs in the first half of year, Moody's believes that revolver availability will remain high relative to the size of RSG's revenue base. RSG will use free cash flow to pay down these borrowings, especially in its fourth fiscal quarter when free cash flow generation is the strongest. The stable rating outlook reflects our view that RSG's solid liquidity profile and lack of near-term maturities beyond term loan amortization give it the financial resources to support growth prospects for roofing material despite its leveraged capital structure. The lowering of the RSG's senior secured term loan to B3 from B2, and its senior unsecured notes to Caa1 from B3 results from the downgrade of the company's corporate family rating. Moody's does not expect positive rating actions for RSG over the near term primarily due to the company's elevated debt leverage. However, if RSG were to improve operating performance and reduce debt using free cash flow such that debt-to-EBITDA falls below 4.5 times and retained cash flow-to-debt nears 10% (all ratios include Moody's adjustments), then the ratings may be considered for an upgrade. Negative rating actions could occur if RSG's operating performance deteriorates or is below our expectations such that debt-to-EBITDA approaches 7.0 times or retained cash flow-to-debt remains below 5.0% (all ratios include Moody's adjustments). Excessive usage of the revolving credit facility, deterioration in the company's liquidity profile or dividends could pressure the ratings as well. The principal methodology used in this rating was the Global Distribution & Supply Chain Services Industry 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. Roofing Supply Group, LLC ("RSG"), headquartered in Dallas, TX, is a national distributor of roofing products and related building materials supplying roofing contractors, home builders, and retailers. Clayton, Dubilier & Rice, LLC through its respective affiliates is the primary owner of RSG. Revenues for the 12 months through March 31, 2013 totaled about $0.9 billion. SCOOTER STORE: Committee Can Employ CBIZ as Financial Advisors -------------------------------------------------------------- The Official Committee of Unsecured Creditors of The Scooter Store Holdings, Inc., et al., sought and obtained permission from the bankruptcy court to retain CBIZ Acounting, Tax and Advisory of New York, LLC, CBIZ Valuation Group, LLC and CBIZ Mergers & Acquisition Group Inc. as their financial advisors. Among other things, CBIZ will be expected to analyze the financial operations of the Debtors and the financial ramifications of any proposed transactions for which the Debtors may seek court approval. CBIZ's professionals charge at these standard hourly rates: Directors and Managing Directors $410 to $595 Managers and Senior Managers $310 to $410 Senior Associates and Staff $130 to $310 CBIZ will also seek reimbursement of necessary and actual expenses incurred in rendering services to the Committee. Charles Beck of CBIZ assures Judge Peter Walsh that his firm represents no interest adverse to the Committee, the Debtors, and their estates on the matters upon which it is to be engaged. 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. SCOOTER STORE: Can Hire AP Services' Young as CRO ------------------------------------------------- Scooter Store Holdings, Inc., et al., sought and obtained approval from the U.S. Bankruptcy Court to employ AP Services LLC to provide interim management and restructuring services and designate Lawrence E. Young as Chief Restructuring Officer to the Debtors. APS has agreed to provide temporary staff to assist Mr. Young and the Debtors in their restructuring efforts. Mr. Young and the temporary staff will, among other things, provide these services: a. provide overall leadership to the restructuring process, including working with a wide range of stakeholder groups, together with the Debtors' senior management; b. work with the Debtors and their team to further identify and implement both short-term and long-term liquidity generating initiatives; and c. assist the Debtors' management in developing a restructuring strategy. The firm's rates are: Lawrence Young $960 Richard Abbey $745 Richard Whitlock $695 Michelle Ross $850 Michelle Repko $695 The Debtor attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. 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. The company 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 HORSE REALTY: Allowed Limited Disbursements Pending Appeal -------------------------------------------------------------- Bankruptcy Judge J. Rich Leonard granted the request of CitiMortgage, Inc., successor-in-interest to Lehman Brothers Bank, FSB, for a stay pending its appeal of the Court's orders entered on Feb. 1, 2013 and May 2, 2013, in the lawsuit, SEA HORSE REALTY & CONSTRUCTION, INC., PLAINTIFF, v. CITIMORTGAGE, INC., SUCCESSOR- IN-INTEREST TO LEHMAN BROTHERS BANK, FSB, DEFENDANT, Adv. Proc. No. 11-00377-8-JRL (Bankr. E.D.N.C.). Sea Horse commenced the adversary proceeding in 2011 against the defendant, seeking a determination that the deed of trust held by the defendant and the proof of claim arising therefrom in the amount of $1,785,986 were invalid. The deed of trust was executed by Rickard B. Mercer, Sea Horse's president and sole shareholder, in favor of Lehman Brothers and encumbered real property located at 10007 Old Oregon Inlet Road, Nags Head, North Carolina. The mistake that has plagued this transaction and formed the dispute between the parties is that the real property encumbered by the deed of trust is owned by Sea Horse, not Mr. Mercer. On February 1, 2013, the Bankruptcy Court entered an order allowing Sea Horse's motion for summary judgment with respect to the defendant's first, second, third, fourth, fifth and seventh counterclaims, concluding that each was barred by the three-year statute of limitations under N.C. Gen. Stat. Sec. 1-52(9). Thereafter, the defendant filed a motion for reconsideration, requesting the court's prior order allowing Sea Horse's motion for summary judgment be reconsidered based on the availability of new evidence and to correct clear errors of law or fact upon which it was based. On May 1, 2013, the Bankruptcy Court entered an order denying the defendant's motion for reconsideration because it "failed to supply the court with newly discovered evidence or demonstrate a clear error of law warranting the extraordinary remedy it s[ought]." (Troubled Company Reporter, May 6, 2013) On May 16, 2013, the defendant filed its notice of appeal and the motion for stay pending appeal. Sea Horse has objected to the stay motion. Sea Horse asked the bankruptcy court to deny the defendant's motion for a stay pending appeal or, in the alternative, allow Sea Horse to disburse a portion of the proceeds to pay certain classes of claims in accordance with its confirmed plan of reorganization. Citi seeks a stay to prevent the distribution of the $1.4 million in proceeds received from the sale of the real property, which are currently being held in the trust account of Sea Horse's counsel pending the outcome of the adversary proceeding. Citi avers that these proceeds are the only assets available to it in the event it ultimately prevails on appeal. To avoid any prejudice, the defendant does not object to the payment of the sole remaining unsecured creditor's claim in the amount of $10,632.54 and administrative expenses incurred by Sea Horse's counsel in amounts to be approved by the court, on the condition that the disbursements do not prejudice any arguments or defenses raised in the adversary proceeding or on appeal. Judge Leonard said Citi has demonstrated an arguable likelihood of success on the merits, given that the court resolved a statute of limitations issue on summary judgment, and the threat of irreparable harm if the proceeds are disbursed during the pendency of the appeal. According to Judge Leonard, Sea Horse is permitted to disburse a portion of the funds held in its counsel's trust account to pay the remaining unsecured creditor and administrative expenses approved by the court. The balance of the funds will remain in the trust account of plaintiff's counsel pending the outcome of the appeal. A copy of Judge Leonard's June 17, 2013 Order is available at http://is.gd/f5DldPfrom Leagle.com. Kill Devil Hills, North Carolina-based Sea Horse filed filed a voluntary Chapter 11 petition (Bankr. E.D.N.C. Case No. 11-07223) on Sept. 21, 2011. Judge J. Rich Leonard oversees the case. George M. Oliver, Esq., at Oliver Friesen Cheek, PLLC, served as the Debtor's counsel. In its petition, the Debtor scheduled $1,782,650 in assets and $3,075,537 in debts. The petition was signed by Rickard B. Mercer, president. Mr. Mercer was also a debtor in a Chapter 11 case (Bankr. E.D.N.C. 09-04088) filed May 18, 2009. SEQUENOM INC: EVP Strategic Planning to Work Part-Time ------------------------------------------------------ Ronald M. Lindsay, Sequenom, Inc.'s Executive Vice President, Strategic Planning, informed the Company that he intends to transition to part-time employment with the Company, effective Aug. 1, 2013. The Company and Dr. Lindsay currently expect that he will reduce his time commitment by fifty percent. As a part- time employee, Dr. Lindsay will receive a pro-rated portion of his $358,000 base salary. No other changes to Dr. Lindsay's employment status or compensation arrangement are being made in connection with his transition to part-time employment. About Sequenom Sequenom, Inc. (NASDAQ: SQNM) -- http://www.sequenom.com/-- is a life sciences company committed to improving healthcare through revolutionary genetic analysis solutions. Sequenom develops innovative technology, products and diagnostic tests that target and serve discovery and clinical research, and molecular diagnostics markets. The company was founded in 1994 and is headquartered in San Diego, California. Sequenom disclosed a net loss of $117.02 million in 2012, a net loss of $74.13 million in 2011 and a net loss of $120.84 million in 2010. The Company's balance sheet at March 31, 2013, showed $227.99 million in total assets, $205.58 million in total liabilities, and $22.41 million in total stockholders' equity. SOUND SHORE: U.S. Attorney Objects to $33-Mil. DIP Loan ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Manhattan U.S. Attorney said in a filing that when the Sound Shore Medical Center of Westchester and affiliates Mt. Vernon Hospital Inc. and Howe Avenue Nursing Home receive final approval for a $33 million bankruptcy loan, the court cannot immunize the lenders from liability to the Internal Revenue Service and environmental regulators. According to the report, the government pointed to a provision in the proposed loan approval order saying the lenders can have no liability to the IRS or environmental regulators arising from decisions they make in the future about allowing advances under the loan. The government took the position that it's "impossible for the court or anyone else to determine whether such future acts would create liability under applicable non-bankruptcy law." The report notes that the U.S. attorney also relied on the federal Anti-Injunction Act, which prohibits any court from preventing the assessment or collection of a tax. The final hearing on financing is scheduled for June 25. The report relates that separately, the hospital wants the court at an Aug. 2 hearing to approve continued payments under a pre- bankruptcy settlement with New York state regarding $2.2 million in overpayments by Medicaid for providing care to indigent patients. When bankruptcy intervened, $1.4 million remained for payment. Because the state can cut off Medicaid reimbursement if future payments aren't made, the hospital is seeking authority to continue paying $67,600 a month until the settlement is completed. According to the report, June 25 is also the date for a hearing in bankruptcy court in White Plains, New York, to fix auction procedures testing whether there's a better offer than Montefiore Medical Center's $54 million proposal to buy the not-for-profit facilities. About Sound Shore Medical Sound Shore Medical Center of Westchester, Mount Vernon Hospital Inc., Howe Avenue Nursing Home and related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 13-22840) on May 29, 2013, in White Plains, New York. The Debtors are the largest "safety net" providers for Southern Westchester County in New York. Affiliated with New York Medical College, Sound Shore is a not-for-profit 242-bed, community based- teaching hospital located in New Rochelle, New York. Mountain Vernon Hospital is a voluntary, not-for-profit 176-bed hospital located in Mount Vernon, New York. Howe Avenue Nursing Home is a 150-bed, comprehensive facility. The Debtors tapped Garfunkel Wild, P.C. as counsel; Alvarez & Marsal Healthcare Industry Group, LLC, as financial advisors; and GCG Inc., as claims agent. Montefiore, the proposed purchaser of the assets, is represented by Togut, Segal & Segal LLP. Sound Shore disclosed assets of $159.6 million and liabilities totaling $200 million. Liabilities include a $16.2 million revolving credit and a $5.8 million term loan with Midcap Financial LLC. There is $9 million in mortgages with Sun Life Assurance Co. of Canada (US) and $11.5 million owing to the New York State Dormitory Authority. Revenue of $241.8 million in 2012 resulted in an operating loss of $16.4 million. SPARKS TOURISM: Moody's Affirms 'B2' Rating on Series A Bonds ------------------------------------------------------------- Moody's Investors Service has affirmed the B2 rating on Sparks Tourism Improvement District No.1 (Legends at Sparks Marina), Nevada's Senior Sales Tax Anticipation Revenue Bonds, Series A issued in 2008. The rating outlook was revised to positive from stable. The bonds are secured by a senior lien pledge of 75% of sales tax revenues generated within the district through fiscal 2028, net of an administration fee of 1.75%. The bonds are 20-year fixed rate obligations scheduled to mature on June 15, 2028. Rating Rationale The B2 rating reflects Moody's view that, absent additional revenue growth, the bonds are projected to default in 2027. However, recent improvement in pledged sales tax receipts results in full payment of annual debt service over the near- to medium- term without draws on the reserve fund, despite a still tepid local economy. Nevertheless, absent additional revenue growth, escalating debt service will lead to draws on the reserve fund beginning in 2022 followed by a projected default on December 15, 2027. The projected default comes three years later than previously expected due to recent improvement in pledged revenues. Importantly, pledged sales tax revenues are subject to potential statutory impairment and also sunset in 2028 with scheduled maturity of the bonds, limiting potential recovery for bondholders post-default. The positive outlook reflects Moody's expectation that the current level of pledged receipts will fully cover annual debt service through the medium-term without draws on the reserve fund, which is an improvement relative to our view a year ago. Longer-term, the combination of already weak coverage and escalating debt service necessitates additional growth in pledged revenues to fully fund debt service. Near-term rating factors will include assessment of regional economic indicators and the performance of the retail project itself on monthly sales tax collections. Longer-term rating factors will include Reno's economic trajectory and the project's ability to retain existing tenants while also securing additional commercial development. These factors will contribute to Moody's assessment of future sales tax collections, the likelihood and timing of default, and the subsequent recovery for bondholders if default occurs. Strengths - Project area has favorable location along Interstate 80, proximate to Lake Tahoe and northern California - Pledged receipts improving with addition of Lowe's store since 2012, and slow economic recovery - Satisfactory legal provisions Challenges - High taxpayer concentration in a very limited project area - Escalating annual debt service requirements - Vulnerable to additional retail store closings if cyclical pressures arise - Project only partially completed, especially compared to initial development plans What Could Make The Rating Go Up - Sustained trend of higher pledged receipts leading to improvements in peak debt service coverage - Further commercial expansion within the project area, including completion of Phase II projects - Unexpected support from the City of Sparks in the form of additional revenues or favorable debt restructuring What Could Make The Rating Go Down - Weakened pledged receipts, especially in the near-term - Depletion of the reserve fund faster than currently estimated - Adverse changes in the project's tenant mix The principal methodology used in this rating was U.S. Public Finance Special Tax Methodology, published in March 2012. SPIRIT REALTY: Declares Cash Dividend for the Second Quarter ------------------------------------------------------------ Spirit Realty Capital, Inc.'s Board of Directors has declared a $0.3125 per share cash dividend on its common stock for the second quarter of 2013. The dividend equates to an annualized rate of $1.25 per share and will be paid on July 16, 2013, to stockholders of record on June 28, 2013. About Spirit Realty Spirit Finance Corporation (now known as Spirit Realty Capital, Inc.) headquartered in Phoenix, Arizona, is a REIT that acquires single-tenant, operationally essential real estate throughout United States to be leased on a long-term, triple-net basis to retail, distribution and service-oriented companies. The Company incurred a net loss of $76.23 million in 2012, a net loss of $63.86 million in 2011, and a net loss of $86.53 million net loss in 2010. The Company's balance sheet at Dec. 31, 2012, showed $3.24 billion in total assets, $1.99 billion in total liabilities and $1.25 billion in total stockholders' equity. * * * As reported by the TCR on Jan. 30, 2013, Standard & Poor's Ratings Services placed its 'B' corporate credit rating on Spirit Realty Capital Inc. (Spirit) on CreditWatch with positive implications. "The CreditWatch placement follows the announcement that Spirit will merge with Cole Credit Property Trust II (unrated), a nontraded REIT, in a stock-for-stock exchange," said credit analyst Elizabeth Campbell. "The merged company, which will retain the name Spirit, will become the second-largest publicly traded triple-net-lease REIT in the U.S. with a pro forma enterprise value of approximately $7.1 billion." As reported by the TCR on April 19, 2013, Moody's Investors Service withdrew its Caa1 corporate family rating for Spirit Realty Capital. Moody's has withdrawn the rating for business reasons. STABLEWOOD SPRINGS: Resort to Emerge From Chapter 11 ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Stablewood Springs Resort LP, a 140-acre development in the Texas hill country near Hunt, received a confirmation order signed this week by a U.S. bankruptcy judge in San Antonio approving a Chapter 11 reorganization plan. According to the report, the plan restructures secured debt and gives $35,000 cash to holders of unsecured claims, for a recovery of about 5 percent. The plan was funded with a $5 million loan, including financing for the Chapter 11 case. The plan was designed for the owner to maintain control. About Stablewood Springs Resort Stablewood Springs Resort, LP, owner of a high-end resort destination encompassing 140 acres of a 543-acre private ranch in the Texas hill country near Hunt, filed a bare-bones Chapter 11 petition (Bankr. W.D. Tex. Case No. 12-53887) in San Antonio on Dec. 17, 2012. The Debtor disclosed assets of $11.15 million and liabilities of $22.8 million as of Nov. 30, 2012. Liabilities include $10.4 million in secured debt and $9.3 million of disputed secured debt. STRATUS MEDIA: $1.3 Million Notes Converted to 22.5MM Shares ------------------------------------------------------------ Stratus Media Group, Inc., entered into Debt Conversion Agreements with two holders of the Company's promissory notes pursuant to which the holders converted promissory notes with an aggregate amount of $1,349,999 into an aggregate of 22,499,984 shares of the Company's Common Stock. Effective May 29, 2013, the Company entered into Series E Preferred Stock Conversion and Warrant Agreements with all of the holders of the Company's Series E Preferred Stock and associated warrants pursuant to which the holders agreed to convert their shares of Series E Preferred Stock into an aggregate of 157,500,000 shares of the Company's Common Stock and to exercise warrants which will result in the issuance of an aggregate of 102,326,388 shares of the Company's Common Stock. About Stratus Media Santa Barbara, Calif.-based Stratus Media Group, Inc., is an owner, operator and marketer of live sports and entertainment events. Subject to the availability of capital, the Company intends to aggregate a large number of complementary live sports and entertainment events across North America and internationally. Stratus Media disclosed a net loss of $6.84 million on $374,542 of total revenues for the year ended Dec. 31, 2012, as compared with a net loss of $23.63 million on $570,476 of total revenues for the year ended Dec. 31, 2011. The Company's balance sheet at Dec. 31, 2012, showed $2.44 million in total assets, $20.85 million in total liabilities, all current, and a $18.40 million total shareholders' deficit. Goldman Kurland and Mohidin LLP, in Encino, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that Stratus Media has suffered recurring losses and has negative cash flow from operations which conditions raise substantial doubt as to the ability of the Company to continue as a going concern. SWEISS PETROL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Sweiss Petrol, Inc. dba Reseda Mobil 18056 Saticoy St. Reseda, CA 91335 Bankruptcy Case No.: 13-14093 Chapter 11 Petition Date: June 18, 2013 Court: United States Bankruptcy Court Central District of California (San Fernando Valley) Judge: Alan M. Ahart Debtor's Counsel: Steven R. Fox, Esq. LAW OFFICES OF STEVEN R. FOX 17835 Ventura Blvd Ste 306 Encino, CA 91316 Tel: (818) 774-3545 Fax: (818) 774-3707 E-mail: emails@foxlaw.com Scheduled Assets: $1,731,325 Scheduled Liabilities: $2,367,410 A list of the Company?s 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/cacb13-14093.pdf The petition was signed by Sami Sweiss, president. TRANSDIGM INC: S&P Lowers Corp. Credit Rating to B; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its ratings on TransDigm Inc., including lowering the corporate credit rating to 'B' from 'B+'. The outlook on TransDigm is stable. At the same time, S&P assigned a 'B+' issue rating and a '2' recovery rating to the proposed $700 million first-lien term loan. The '2' recovery rating indicates S&P's expectation of substantial (70%- 90%) recovery in the event of payment default. S&P also assigned a 'CCC+' rating and a '6' recovery rating to the new subordinated notes due 2021. A '6' recovery rating indicates S&P's expectation of negligible (0%-10%) recovery in the event of payment default. "The downgrade reflects our expectation that leverage will continue to fluctuate as the company completes acquisitions and pays special dividends and subsequently de-levers," said credit analyst Tatiana Kleiman. However, the range of leverage will likely be higher than in the past due to what S&P believes is a shift to a more aggressive financial policy. On June 18, 2013, TransDigm announced plans to pay a $1 billion to $1.8 billion debt-financed dividend. The debt will include a new $700 million, seven-year senior secured first-lien term loan and a potential addition of $700 million of new subordinated debt. However, the company is amending the credit facility to allow for up to an $1.8 billion dividend. This follows a $664 million debt-financed dividend in November 2012. The additional debt results in a material deterioration in credit ratios and suggests a shift toward a more aggressive financial policy with a larger appetite for leverage. The company has stated publicly that it would continue to take shareholder- friendly actions and has often referred to itself as having a "private equity-like model." Pro forma adjusted debt to EBITDA could increase to about 7x from 5.2x in the trailing twelve months ended March 31, 2013. The company also recently announced the acquisitions of Arkwin Industries ($286 million) and Aerosonic Corp. ($39 million), which just recently closed. "Historically, strong earnings growth, due to EBITDA margins higher than 45%, and solid cash generation has enabled TransDigm to de-lever rapidly after acquisitions or dividends, allowing the credit metrics to recover quickly to levels deemed appropriate for the previous rating. However, recent actions have suggested that the company is increasing its appetite for leverage, and we now expect debt to EBITDA to range from 5.5x to 6.5x compared to historical levels of 4.5x-5.5x. We believe that the company will continue to take shareholder-friendly actions and make acquisitions in the future, thus maintaining leverage at these higher levels. Although we already assess the company's financial policy as "very aggressive," we believe that the company will likely maintain credit measures that no longer support the previous rating, pursuing large debt-financed dividends in the absence of sufficient acquisition targets. We view TransDigm's business risk profile as "fair," stemming from its participation in the cyclical and competitive commercial aerospace industry. Its efficient operations, very high profit margins, well- established positions in niche markets for highly engineered aircraft components, and good product diversity partially offset this," S&P said. "The outlook is stable. Although we expect improving commercial aerospace conditions and earnings from acquisitions to allow the company to partially restore credit measures from elevated post- dividend levels, we believe that the company's shift toward a more aggressive financial policy and increased appetite for leverage will result in higher-than-average debt to EBITDA levels of around 5.5x to 6.5x. We could lower the ratings if total debt to EBITDA rises higher than 7x for a sustained period because of increased debt to fund acquisitions or shareholder rewards, particularly if changing business conditions or weakness in the market prompts us to lower the company's business risk profile to "weak" from "fair." We do not anticipate raising the ratings over the next year unless management commits to a less aggressive financial policy and debt to EBITDA remains less than 5x," S&P added. TRENDSET INFORMATION: AFS Buys Biz for $1.14 Million ---------------------------------------------------- Bill Poovey, writing for GSA Business, reports that AFS has acquired Trendset Information Systems for $1.14 million in the Section 363 sale. The report relates AFS spokesman Brian Barker said Trendset's 86 employees will be retained. Mr. Barker said AFS is actively speaking to customers and "trying to create some stability there." The report notes a company statement said Trendset, a provider of freight audit and payment services, will be renamed and reorganized as a subsidiary of AFS. AFS said it plans to add new management. The report recounts Trendset's Chapter 11 bankruptcy followed an involuntary bankruptcy petition filed April 15 on behalf of three shippers, Husqvarna Professional Products Inc., of Charlotte, N.C.; Legrand North America Inc., of West Hartford, Conn.; and DH Business Services LLC of Washington, D.C. The attorney for the shippers did not return a telephone message seeking comment Monday. The report also notes former Trendset employee Julie Greene Tucker of Greer was sentenced in April to 33 months in prison after pleading in November to federal charges that a prosecutor said stemmed from Ms. Tucker embezzling money from her employer to support a lavish lifestyle. Her husband, former U.S. Department of Homeland Security employee James "Dean" Tucker, also pleaded guilty and was sentenced to eight months of house arrest. The report relates AFS has said Trendset managed more than $10 billion in freight spend globally in 2012. UNIGENE LABORATORIES: Victory Park Sells Collateral to Lenders -------------------------------------------------------------- Victory Park Management, LLC, as administrative agent and collateral agent under the Financing Agreement dated as of March 16, 2010, held a public auction for the sale of all of the remaining personal property and assets pledged as collateral under the Financing Agreement (other than assets relating to Oral PTH 1- 31) of Unigene Laboratories, Inc., that secured approximately $42.9 million in senior secured notes issued to affiliates of the Agent by the Company as of that date. The lenders, as the holders of the senior secured notes, made a credit bid of $5 million and, at the conclusion of the public auction, were deemed the highest bidder for the assets. On June 11, 2013, the assets were acquired by Victory Park Credit Opportunities, L.P., Victory Park Credit Opportunities Intermediate Fund, L.P., VPC Fund II, L.P., and VPC Intermediate Fund II (Cayman), L.P., in exchange for the satisfaction and discharge of $5 million outstanding under the senior secured notes. On that date, Victory Park Management, in its capacity as the administrative agent and collateral agent for each of the Lenders, executed and delivered a bill of sale pursuant to which it sold to the Lenders, the Assets. Effective June 11, 2013, the senior secured promissory notes were reissued to reflect the current amounts outstanding as a result of the credit bid. Mr. Richard Levy has been the Managing Principal and founder of Victory Park Capital since September 2007. Pursuant to the Financing Agreement, in March 2010 Mr. Levy became a member of the Company's Board of Directors, Chairman of the Board and a member of the Company's Nominating and Corporate Governance Committee. In addition, the Company agreed that until such time as (i) the aggregate principal amount outstanding under the senior secured convertible notes issued to Victory Park is less than $5 million and (ii) Victory Park beneficially owns less than 20 percent of the issued and outstanding shares of the Company's common stock, the Company's Nominating and Corporate Governance Committee will take all actions reasonably necessary to recommend the nomination of, and the Board of Directors of the Company will nominate for re-election to the Board of Directors, Mr. Levy. Each of the Agent and the Lenders is an affiliate of Mr. Levy. A copy of the Form 8-K is available for free at: http://is.gd/WZ5xbY About Unigene Unigene Laboratories, Inc. OTCBB: UGNE) -- http://www.unigene.com/ -- is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs. Unigene disclosed a net loss of $34.28 million on $9.43 million of total revenue for the year ended Dec. 31, 2012, as compared with a net loss of $7.09 million on $20.50 million of total revenue during the prior year. The Company incurred a $32.53 million net loss in 2010. The Company's balance sheet at Dec. 31, 2012, showed $11.31 million in total assets, $110.05 million in total liabilities and a $98.73 million total stockholders' deficit. Grant Thornton LLP, in New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred a net loss of $34,286,000 during the year ended Dec. 31, 2012, and, as of that date, has an accumulated deficit of approximately $216,627,000 and the Company's total liabilities exceeded total assets by $98,740,000. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "We had cash flow deficits from operations of $3,177,000 for the year ended December 31, 2012, $6,766,000 for the year ended December 31, 2011 and $1,669,000 for the year ended December 31, 2010. Our cash and cash equivalents totaled approximately $3,813,000 on December 31, 2012. Based upon management's projections, we believe our current cash will only be sufficient to support our current operations through approximately March 31, 2013. Therefore, we need additional sources of cash in order to maintain all or a portion of our operations. We may be unable to raise, on acceptable terms, if at all, the substantial capital resources necessary to conduct our operations. If we are unable to raise the required capital, we may be forced to close our facilities and cease our operations. If we are unable to resolve outstanding creditor claims, we may have no other alternative than to seek protection under available bankruptcy laws. Even if we are able to raise additional capital, we will likely be required to limit some or all of our research and development programs and related operations, curtail development of our product candidates and our corporate function responsible for reviewing license opportunities for our technologies." UNIVERSALLY CORRECT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Universally Correct Technology LLC, a New Mexico limited liability company aka Unicor LLC aka Unicor 1615 Broadway Blvd. N.E. Albuquerque, NM 87102 Bankruptcy Case No.: 13-12061 Chapter 11 Petition Date: June 18, 2013 Court: United States Bankruptcy Court New Mexico (Albuquerque) Judge: David T. Thuma Debtor's Counsel: William F. Davis, Esq. WILLIAM F. DAVIS & ASSOCIATES, P.C. 6709 Academy NE, Suite A Albuquerque, NM 87109 Tel: (505) 243-6129 Fax: (505) 247-3185 E-mail: daviswf@nmbankruptcy.com Scheduled Assets: $562,081 Scheduled Liabilities: $1,023,531 A copy of the list of 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/nmb13-12061.pdf The petition was signed by Gary M. Sanchez, managing member. USEC INC: Gets Add'l $20MM Funding From Government for AC Project ----------------------------------------------------------------- USEC Inc. and its subsidiary American Centrifuge Demonstration, LLC, entered into Amendment No. 005 to the cooperative agreement dated June 12, 2012, with the U.S. Department of Energy for the research, development and demonstration program for the American Centrifuge project. The amendment amends the cooperative agreement to provide for additional government obligated funds of $20 million, bringing total government obligated funding to $197.8 million through July 31, 2013. The milestones and performance indicators under the RD&D program were not changed by the Amendment and to date USEC has satisfied five of nine milestones and three of five performance indicators. The cooperative agreement provides funding for a cost-share RD&D program for the American Centrifuge project to enhance the technical and financial readiness of the centrifuge technology for commercialization. The cooperative agreement provides for 80 percent DOE and 20 percent USEC cost sharing for work performed during the period June 1, 2012, through Dec. 31, 2013, with a total estimated cost of $350 million. DOE's total contribution would be up to $280 million and USEC's contribution would be up to $70 million. DOE's contribution is incrementally funded. The cooperative agreement, as previously amended, provided DOE funding of $177.8 million. The Amendment increases the obligated DOE funding to $197.8 million and allowable costs for the RD&D program to $247.2 million through July 31, 2013. USEC is providing cost sharing equal to 20 percent of those allowable costs or $49.4 million through July 31, 2013. USEC's 20 percent contribution includes investments made by USEC commencing June 1, 2012. DOE's remaining cost share under the RD&D program of $82.2 million is conditioned upon USEC continuing to meet all milestones and deliverables on schedule, USEC continuing to demonstrate to DOE's satisfaction its ability to meet future milestones, and the availability of appropriations or other sources of consideration and therefore there is no assurance that this additional funding will be made available. Of this $82.2 million of remaining DOE cost-share funding, the Full-Year Continuing Appropriations Act, 2013, enacted in March 2013, provided additional appropriated funding that is expected to fund the RD&D program activities through Sept. 30, 2013 (the end of the government fiscal year). USEC will continue to work with Congress and the administration to obtain the remaining approximately $48 million of DOE cost-share needed to fund the RD&D program through December 2013 and complete the program. The Company, or its subsidiaries, is also a party to a number of other agreements or arrangements with the U.S. government. About USEC Inc. Headquartered in Bethesda, Maryland, USEC Inc. (NYSE: USU) -- http://www.usec.com/-- supplies enriched uranium fuel for commercial nuclear power plants. USEC disclosed a net loss of $1.20 billion in 2012, as compared with a net loss of $491.1 million in 2011. The Company's balance sheet at March 31, 2013, showed $1.52 billion in total assets, $1.99 billion in total liabilities, and a $469.6 million stockholders' deficit. PricewaterhouseCoopers LLP, in McLean, Virginia, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has reported net losses and a stockholders' deficit at Dec. 31, 2012, and is engaged with its advisors and certain stakeholders on alternatives for a possible restructuring of its balance sheet, which raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "A delisting of our common stock by the NYSE and the failure of our common stock to be listed on another national exchange could have significant adverse consequences. A delisting would likely have a negative effect on the price of our common stock and would impair stockholders' ability to sell or purchase our common stock. As of December 31, 2012, we had $530 million of convertible notes outstanding. A 'fundamental change' is triggered under the terms of our convertible notes if our shares of common stock are not listed for trading on any of the NYSE, the American Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market. Our receipt of a NYSE continued listing standards notification described above did not trigger a fundamental change. If a fundamental change occurs under the convertible notes, the holders of the notes can require us to repurchase the notes in full for cash. We do not have adequate cash to repurchase the notes. In addition, the occurrence of a fundamental change under the convertible notes that permits the holders of the convertible notes to require a repurchase for cash is an event of default under our credit facility. Accordingly, the exercise of remedies by holders of our convertible notes or lenders under our credit facility as a result of a delisting would have a material adverse effect on our liquidity and financial condition and could require us to file for bankruptcy protection," according to the Company's annual report for the year ended Dec. 31, 2012. * * * USEC Inc. carries 'Caa1' corporate and probability of default ratings, with "developing" outlook, from Moody's. As reported by the TCR on Aug. 17, 2012, Standard & Poor's Ratings Services lowered its ratings on USEC Inc., including the corporate credit rating to 'CCC' from 'CCC+'. "The downgrade reflects our assessment of USEC's long-term viability after the company publicly stated that it will be difficult to continue enrichment operations at the Paducah Gaseous Diffusion Plant after a one-year multiparty agreement to extend operations expires in May 2013," said Standard & Poor's credit analyst Maurice S. Austin. VALEANT PHARMACEUTICALS: S&P Lowers Corp. Credit Rating to 'BB-' ---------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Valeant Pharmaceuticals International Inc. to 'BB-' from 'BB' and removed it, and all of its other ratings on the company, from CreditWatch negative, where S&P placed them on May 28, 2013. The outlook is stable. At the same time, S&P is lowering its existing senior secured issue-level ratings to 'BB' from 'BBB-' and assigning a 'BB' issue-level rating to the proposed $4.050 billion of term loans. S&P revised the recovery rating to '2', indicating its expectation of substantial (70%-90%) recovery in the event of payment default, from '1'. S&P is also lowering its existing senior unsecured issue-level rating to 'B' from 'BB-' and assigning a 'B' issue- level rating to the proposed $3.225 billion senior unsecured notes. S&P revised the recovery rating to '6', indicating its expectation of negligible (0-10%) recovery in the event of payment default, from '5'. S&P lowered the corporate credit rating to 'BB-' primarily to reflect its view that Valeant's financial risk will be more characteristic of its highly leveraged profile, despite its belief that the business risk has improved with the broader business provided by B&L. The highly leveraged financial risk profile reflects a financial policy that is more aggressive than S&P previously factored into the rating, Valeant's capacity, but not willingness, to reduce debt, and its belief that additional acquisitions will disrupt the trajectory of deleveraging. "The addition of B&L, which had a satisfactory business risk profile on standalone basis, to Valeant's already diversified business was the primary consideration in our revision of Valeant's business risk to "satisfactory" from "fair"," said credit analyst Michael Berrian. "Initial pro forma leverage of 5.7x and a financial policy that is more aggressive than we previously thought contribute to our assessment of Valeant's financial risk as "highly leveraged". Liquidity remains "adequate" given the use of free cash flow to fund its aggressive growth strategy." The stable outlook reflects S&P's expectation that organic revenue growth of 6% and its expectation that the company can achieve at least $400 million of cost synergies, would cause S&P-calculated leverage to decline to at least 4.8x over the next year. It also incorporates an expectation of continued acquisition activity such that leverage is likely to return to levels over 5x. S&P could lower the rating if the company's continued aggressive financial policy results in another debt-funded acquisition over the next 12 months that sustains S&P-calculated adjusted leverage at 6x or more. S&P could also lower the rating in the unlikely scenario that synergies are less than it expects. This could stem from integration issues and result in leverage also being sustained at more than 6x. S&P could raise the rating if Valeant's adopts a less aggressive financial policy and the company demonstrates a commitment to sustained debt reduction. Commensurate with this would be credit metrics that are comfortably within the range of an aggressive financial risk profile and maintained at that level for a minimum of four quarters. This would be evidenced by the absence of debt- funded acquisitions or achievement of sufficient cash flows that the company's growth strategy could be funded internally. VALEANT PHARMACEUTICALS: Moody's Rates New Sr. Unsec. Notes 'B1' ---------------------------------------------------------------- Moody's Investors Service assigned a rating of B1 (LGD5, 76%) to the new senior unsecured note offering of Valeant Pharmaceuticals International, Inc. Moody's also assigned a rating of Ba1 (LGD2, 20%) to Valeant's incremental senior secured Term Loan A and Term Loan B. There are no changes to Valeant's existing ratings including the Ba3 Corporate Family Rating, the Ba3-PD Probability of Default rating, the SGL-1 Speculative Grade Liquidity Rating, the Ba1 senior secured rating and the B1 senior unsecured rating, although Moody's is revising LGD point estimates on the existing debt instruments. The rating outlook is negative. Proceeds of the new debt instruments together with a recent equity offering are to be used in Valeant's acquisition of Bausch & Lomb. Ratings assigned: Valeant Pharmaceuticals International, Inc.: Ba1 (LGD2, 20%) senior secured incremental Term Loan A Ba1 (LGD2, 20%) senior unsecured incremental Term Loan B B1 (LGD5, 76%) senior unsecured notes due 2021 and 2023 LGD point estimate changes: Senior secured revolving credit facility and term loans to Ba1 (LGD2, 20%) from Ba1 (LGD2, 16%) Senior unsecured notes of Valeant Pharmaceutical s International to B1 (LGD5, 76%) from B1 (LGD5, 73%) "Valeant's acquisition of Bausch & Lomb will bring significant scale, diversity, synergies and cash flow accretion," stated Michael Levesque, Moody's Senior Vice President. "However, pro forma leverage exceeds management's previously communicated target of 4.0 times even with unrealized synergies, and aggressive financial policies and a rapid acquisition pace are reflected in the negative rating outlook," continued Levesque. Ratings Rationale: Valeant's Ba3 Corporate Family Rating reflects its high pro forma leverage in excess of 4.5 times, as well as the risks associated with Valeant's aggressive acquisition strategy including integration risks and rapid capital structure changes. Pro forma leverage includes estimated acquisition synergies, but the company's rapid pace of acquisitions makes it difficult to ascertain a true run-rate of pro forma EBITDA. Although some acquisitions have been focused in dermatology and eyecare, other acquisitions have lacked such focus. The Bausch acquisition also takes Valeant into new product areas including surgical devices where the company does not have expertise. The ratings remain supported by Valeant's good size and scale, a high level of product and geographic diversity, and the lack of any major patent cliffs relative to other pharmaceutical companies. Good free cash flow will continue, although acquisitions will remain a use of cash flow. The rating outlook is negative, primarily reflecting Valeant's leverage that is high for the Ba3 rating, its aggressive acquisition strategy, and the risks associated with integrating multiple large companies at once. Valeant's ratings could be downgraded if Moody's believes that debt/EBITDA (with credit for reasonable synergies) will be sustained materially above 4.0 times or if other risk factors emerge, such as litigation. Leverage inconsistent with the Ba3 rating could be created if Valeant continues to increase its pro forma leverage, or if acquisition synergies do not materialize. Although not expected, Valeant's ratings could be upgraded if Moody's believes that debt/EBITDA will be sustained below 3.5 times while maintaining good organic growth rates. The principal methodology used in this rating was the Global Pharmaceutical Industry Methodology 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. Headquartered in Montreal, Quebec, Valeant Pharmaceuticals International, Inc. [NYSE: VRX] is a global specialty pharmaceutical company with expertise in dermatology, eyecare, as well as branded generic products. In 2012 Valeant reported net revenues of approximately $3.5 billion. VIGGLE INC: Hits 3 Million Registered Users ------------------------------------------- Viggle has reached a new milestone with Vigglers having checked into TV shows more than 250 million times. The announcement comes on the heels of the company reaching three million registered users since its launch, adding more than 400,000 registered users in May. Viggle continues to see a steady rise in its monthly active users. From March to April, numbers grew from 601,457 to 667,907, an increase of more than 11 percent. During May, monthly active users surged by 26 percent, to 838,189. Overall, 29 percent of registered Vigglers were active in May. Monthly active users are users that have logged into the Viggle app at any time during the month. Additionally, the number of verified check-ins per month continues to climb while average time spent in the app remains significant. During the month of May, Viggle had a total of 24,932,949 check- ins, the largest number during a single month in the Company's history. By June 10, users' average time spent in the app since launch was an astounding 68 minutes and 40 seconds per session. "Our efforts to enhance users' television viewing experience through Viggle's unique audio verified check-in and reward system is resonating with the marketplace and engaging current and new Vigglers," said Greg Consiglio, Viggle President and COO. "The company's rise in registered users, now three million strong with 250 million check-ins since launch, demonstrates our users' desire to accumulate points and earn tangible rewards." Viggle continues to introduce more TV experience rewards in addition to the ones currently available in the app's catalog to users who redeem with Viggle's increasingly popular points. Recently, the company presented one loyal user with a trip to "The Voice" finale. From the app's launch through June 10, Vigglers have redeemed 1,824,043 rewards with a retail value to consumers of $13 million. Rewards are earned by checking in to TV shows using the free Viggle app, available in the App Store or from Google Play. The Viggle app listens to what is on TV and users get Viggle points for every minute watched. Members can accumulate even more points for engaging in real-time experiences and participating in brand advertising while watching their favorite shows and sporting events. About Viggle New York City-based Viggle Inc. is a loyalty marketing company. The Company has developed a loyalty program for television that gives people real rewards for checking into the television shows they are watching on most mobile operating system. Viggle users can redeem their points in the app's rewards catalog for items such as movie tickets, music, or gift cards. As reported in the TCR on Oct. 22, 2012, BDO USA, LLP, in New York City, expressed substantial doubt about Viggle's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and at June 30, 2012, has deficiencies in working capital and equity. VITESSE SEMICONDUCTOR: Columbia Pacific Holds 9.8% Equity Stake --------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Columbia Pacific Opportunity Fund, L.P., and its affiliates disclosed that, as of June 18, 2013, they beneficially owned 3,698,214 shares of common stock of Vitesse Semiconductor Corporation representing 9.82 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/0MvENP About Vitesse Based in Camarillo, California, Vitesse Semiconductor Corporation (Pink Sheets: VTSS.PK) -- http://www.vitesse.com/-- designs, develops and markets a diverse portfolio of semiconductor solutions for Carrier and Enterprise networks worldwide. In October 2009, Vitesse completed a debt restructuring transaction that resulted in the conversion of 96.7% of the Company's 2024 Debentures into a combination of cash, common stock, Series B Preferred Stock and 2014 Debentures. With respect to the remaining 3.3% of the 2024 Debentures, Vitesse settled its obligations in cash. Additionally, Vitesse repaid $5.0 million of its $30.0 million Senior Term Loan, the terms of which were amended as part of the debt restructuring transactions. Vitesse incurred a net loss of $1.11 million in 2012, a net loss of $14.81 million in 2011, and a net loss of $20.05 million in 2010. The Company's balance sheet at March 31, 2013, showed $68.85 million in total assets, $80.96 million in total liabilities and a $12.10 million total stockholders' deficit. VISUALANT INC: Closes $5 Million in Equity Funding -------------------------------------------------- Visualant, Inc., has closed equity funding in excess of $5,000,000 led by Special Situations Technology Fund. Ron Erickson, Visualant Founder and CEO stated, "We are very pleased to announce the close of this funding. With this funding we have strengthened our balance sheet, completed the purchase of our TransTech subsidiary, and obtained working capital to support the rapid movement of our ChromaID technology into the marketplace. We are pleased to have assembled a strong investor group, led by Special Situations Technology Fund, complemented by other leading microcap institutional investors and participation by members of the Visualant management team. The Company will file its 8K with the terms and conditions in the next few days as per regulatory guidelines." In anticipation of the special meeting of the Company's stockholders, the Company has received commitments from 54 percent of its stockholders to approve an increase in the number of the Company's authorized shares of common stock from 200,000,000 to no less than 500,000,000. A copy of the Form 8-K is available for free at: http://is.gd/BYe0oD About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant incurred a net loss of $2.72 million for the year ended Sept. 30, 2012, compared with a net loss of $2.39 million for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $4.14 million in total assets, $5.53 million in total liabilities, a $1.42 million total stockholders' deficit and $40,133 in noncontrolling interest. PMB Helin Donovan, LLP, in Nov. 10, 2012, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has sustained a net loss from operations and has an accumulated deficit since inception which raise substantial doubt about the Company's ability to continue as a going concern. VISUALANT INC: Ronald Erickson Held 9.6% Equity Stake at June 14 ---------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Ronald P. Erickson disclosed that, as of June 14, 2013, he beneficially owned 27,328,373 shares of common stock of Visualant, Inc., representing 9.6 percent of the shares outstanding. Mr. Erickson previously reported beneficial ownership of 10,103,573 common shares or 8.6 percent equity stake as of Jan. 29, 2013. A copy of the amended regulatory filing is available for free at http://is.gd/x2n0ch About Visualant Inc. Seattle, Wash.-based Visualant, Inc., was incorporated under the laws of the State of Nevada on Oct. 8, 1998. The Company develops low-cost, high speed, light-based security and quality control solutions for use in homeland security, anti- counterfeiting, forgery/fraud prevention, brand protection and process control applications. Visualant incurred a net loss of $2.72 million for the year ended Sept. 30, 2012, compared with a net loss of $2.39 million for the same period during the prior year. The Company's balance sheet at March 31, 2013, showed $4.14 million in total assets, $5.53 million in total liabilities, a $1.42 million total stockholders' deficit and $40,133 in noncontrolling interest. PMB Helin Donovan, LLP, in Nov. 10, 2012, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has sustained a net loss from operations and has an accumulated deficit since inception which raise substantial doubt about the Company's ability to continue as a going concern. VUZIX CORP: Offering $5 Million Common Shares and Warrants ---------------------------------------------------------- Vuzix Corporation is offering approximately $5 million worth of common stock and warrants. The Company expects to use the net proceeds received from this offering to complete commercialization of the Company's waveguide, smart glasses and HD display engine technologies, and for working capital and general corporate purposes. The sole bookrunner of the offering is Aegis Capital Corp. A copy of the free writing prospectus is available at: http://is.gd/dPJ5A9 About Vuzix Corp. Rochester, New York-based Vuzix Corporation (TSX-V: VZX) OTC BB: VUZI) -- http://www.vuzix.com/-- is a supplier of Video Eyewear products in the defense, consumer and media & entertainment markets. Vuzix reported net income of $322,840 on $3.22 million of total sales for the year ended Dec. 31, 2012, as compared with a net loss of $3.87 million on $4.82 million of total sales during the prior year. The Company's balance sheet at March 31, 2013, showed $3.08 million in total assets, $10.14 million in total liabilities and a $7.05 million total stockholders' deficit. EFP Rotenberg, LLP, in Rochester, New York, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has incurred substantial losses from operations in recent years. In addition, the Company is dependent on its various debt and compensation agreements to fund its working capital needs. The Company was not in compliance with its financial covenants under a senior secured debt holder and had other debts past due in some cases. These conditions raise substantial doubt about its ability to continue as a going concern. Bankruptcy Warning "We have engaged an investment banking firm to assist us with respect to a planned public stock offering of up to $15,000,000. Our future viability is dependent on our ability to execute these plans successfully. If we fail to do so for any reason, we would not have adequate liquidity to fund our operations, would not be able to continue as a going concern and could be forced to seek relief through a filing under U.S. Bankruptcy Code." WALTER ENERGY: Moody's Retains B2 Corp. Family Rating ----------------------------------------------------- Moody's Investors Service downgraded Walter Energy Inc.'s Speculative Grade Liquidity Rating to SGL-4 from SGL-3. The reduction in the short-term liquidity rating follows the company's decision to step away from its planned refinancing transaction, which would have provided greater financial flexibility than the existing structure. Moody's now believes that the company will need to obtain covenant relief by the third quarter of 2013. Moody's also withdrew the ratings assigned to the proposed senior secured credit facilities on June 5, 2013. All other long-term ratings, including the B2 Corporate Family Rating, are unchanged. The rating outlook remains negative. Issuer: Walter Energy, Inc. Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 $350 million Senior Secured Revolving Credit Facility, rating withdrawn due to cancellation of transaction $1200 million Senior Secured Term Loan B, rating withdrawn due to cancellation of transaction Moody's expects continued headwinds pressuring the metallurgical coal industry and metallurgical coal prices will weigh on Walter's operating performance despite improvements to the company's cost structure and balance sheet in recent quarters. Market conditions continue to weaken appreciably with mounting evidence that benchmark pricing for low-volatility coking coal will fall back in the third quarter after modest improvement in the second quarter. Expectations for tepid demand in the global steel industry suggest additional rationalization of met coal capacity may be necessary to improve pricing in the near-term. While some domestic and international producers have announced additional rationalization of production in recent weeks, the net impact on the global market is modest and the anticipated supply/demand environment is not likely to support meaningful price increases for at least the next few quarters. Amid these unfavorable industry conditions, Moody's believes Walter's operating performance will weaken on a year-over-year basis through at least the third quarter of 2013 with adjusted leverage moving over 10 times (Debt/EBITDA) and bank-defined net senior secured leverage moving over the 5.5 times level required to maintain covenant compliance. Walter will need to amend these covenants to maintain orderly access to its revolving credit facility. These factors drive the reduction of the short-term liquidity rating to SGL-4 from SGL-3, and in the absence of an improvement in financial flexibility in the very near term could result in further downgrades of the company's long-term credit ratings. Moody's could also lower the B3 senior unsecured ratings to Caa1 if the company does not complete a senior unsecured debt offering in the very near term. Ratings Rationale: The B2 CFR is constrained primarily by uncertainty regarding the company's liquidity arrangements, high absolute debt relative to anticipated production levels, exposure to cyclical metallurgical coal prices, and reliance on a few key mines for the majority of earnings and cash flow. The potential to generate strong earnings and cash flow on a mid-cycle basis supports the rating. The negative outlook reflects concerns that the company could burn cash absent improved market conditions for metallurgical coal and that it may not maintain covenant compliance. Moody's could downgrade the rating if Walter does not improve financial flexibility in the very near term, with further deterioration in coal market conditions, or substantive cash burn. Upward rating momentum is limited at present, but stabilization of the outlook could occur if the company demonstrates an ability to maintain at least breakeven cash flow, reduces leverage to below 10 times, and improves its liquidity position. An upgrade likely would require expectations for interest coverage sustained above 1.5 times, leverage sustained below 6 times, and sufficient cash flow to facilitate meaningful debt reduction. The principal methodology used in this rating was the Global Mining Industry published in May 2009. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Walter Energy, Inc., headquartered in Birmingham, Alabama, is primarily a metallurgical coal producer which also produces metallurgical coke, steam and industrial coal, and natural gas. The company acquired met coal producer Western Coal Corporation in April 2011. WAVE SYSTEMS: Amends 1.8-Mil. Class A Shares Resale Prospectus -------------------------------------------------------------- Wave Systems Corp. has amended its registration statement relating to the resale of up to 1,204,820 shares of Wave's Class A common stock, par value $0.01 per share, and up to 602,410 shares of Wave's Class A common stock, par value $0.01 per share, issuable upon the exercise of warrants, by Cranshire Capital Master Fund, Ltd., and Anson Investments Master Fund, LP. The Company will not receive any proceeds from the sale of these shares of Class A common stock by the selling stockholders. Wave's Class A common stock is traded on the Nasdaq Capital Market under the symbol "WAVX." The last reported sale price of the Company's Class A common stock on the Nasdaq Capital Market on June 14, 2013, was $0.43 per share. A copy of the amended Form S-3 is available for free at: http://is.gd/EDwq1Z About Wave Systems Lee, Massachusetts-based Wave Systems Corp. (NASDAQ: WAVX) -- http://www.wave.com/-- develops, produces and markets products for hardware-based digital security, including security applications and services that are complementary to and work with the specifications of the Trusted Computing Group, an industry standards organization comprised of computer and device manufacturers, software vendors and other computing products manufacturers. KPMG LLP, in Boston Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that Wave Systems Corp. has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. For the 12 months ended Dec. 31, 2012, the Company incurred a net loss of $33.96 million, as compared with a net loss of $10.79 million in 2011. The Company's balance sheet at March 31, 2013, showed $10.77 million in total assets, $22.19 million in total liabilities and a $11.42 million total stockholders' deficit. WEST CORP: S&P Raises CCR to 'BB-' & Removes from CreditWatch ------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on Omaha, Neb.-based business process outsourcer West Corp. to 'BB-' from 'B+' and removed it from CreditWatch, where S&P placed the rating with positive implications on March 19, 2013, following the company's announcement that it was raising about $500 million through an initial public offering to repay debt. S&P also removed all other ratings from CreditWatch. At the same time, S&P raised the issue-level rating on the company's secured term loans due 2016 and 2018 to 'BB' (one notch higher than the 'BB-' corporate credit rating on the company) from 'B+', and revised the recovery rating to '2' from '3', indicating S&P's expectation for substantial (70% to 90%) recovery for the lenders in the event of a payment default. S&P also withdrew its issue-level ratings on the company's subordinated notes. The upgrade reflects Standard & Poor's view that lower debt leverage and a less aggressive financial policy will strengthen the company's financial profile. In S&P's view, the rating on West Corp. reflects S&P's expectation that leverage will remain relatively high, in the 4x to 5x area over the intermediate term, as the company will operate under a less aggressive financial policy and continues its acquisition-oriented growth strategy. This expectation underscores S&P's assessment of West Corp.'s financial risk profile as "aggressive" (based on S&P's criteria). West Corp. has been an active acquirer of automated services companies as it seeks to expand its presence in higher-margin areas. S&P views the company's business risk profile as "fair," based on its good EBITDA margin and revenue stability. S&P believes these dynamics will result in West achieving low- to mid- single-digit percentage revenue and EBITDA growth, on average, over the intermediate term, with slightly lower leverage. West is a business process outsourcer of conferencing services, public safety services, automated alerts, notifications services, and agent-based and automated call center services, with operations in the U.S., the U.K., and many other countries. The company has a good EBITDA margin and competitive position in the fragmented, highly competitive market for communication services. West competes with larger peers with significant offshore operations, and often with clients' in-house staff. The market for conferencing services also is competitive, despite higher margins. West strives to increase call volume and reduce costs to offset steadily declining pricing, which it has generally accomplished. This trade-off will likely hurt its EBITDA margin over time. Nonetheless, S&P believes longer-term trends generally will continue to favor outsourcers such as West, as companies continue outsourcing noncore functions to extract operating efficiencies. WESTMORELAND COAL: Imminent Danger Order Lifted at Rosebud Mine --------------------------------------------------------------- Western Energy Company, a subsidiary of Westmoreland Coal Company, received an imminent danger order under section 107(a) of the Federal Mine Safety and Health Act of 1977 at its Rosebud Mine in Colstrip, Montana. The order alleged that a miner was working under a lifted load when he entered the drop radius of a length of drill steel that was being hoisted into the drill by a crane. One end of the drill steel was touching the ground while the other end was held by the crane. The order was subsequently terminated on June 12, 2013, when the miner was removed from the fall radius of the drill steel and the drill steel was lowered back to the ground. No injuries occurred as a result of the cited condition. About Westmoreland Coal Colorado Springs, Colo.-based Westmoreland Coal Company (NYSE AMEX: WLB) -- http://www.westmoreland.com/-- is the oldest independent coal company in the United States. The Company's coal operations include coal mining in the Powder River Basin in Montana and lignite mining operations in Montana, North Dakota and Texas. Its power operations include ownership of the two-unit ROVA coal-fired power plant in North Carolina. Westmoreland Coal incurred a net loss of $13.66 million in 2012, a net loss of $36.87 million in 2011, and a net loss of $3.17 million in 2010. The Company's balance sheet at March 31, 2013, showed $943.01 million in total assets, $1.22 billion in total liabilities and a $286.53 million total deficit. * * * As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Englewood, Co.-based Westmoreland Coal Co. (WLB). to 'B-' from 'CCC+'. "The upgrade reflects our view that WLB is less vulnerable to default after successfully negotiating less restrictive covenant requirements for an unrated $110 million term loan due 2018," said credit analyst Gayle Bowerman. "Our assessment of WLB's business risk profile as 'vulnerable' and financial risk profile as 'highly leveraged' are unchanged. We also revised our liquidity score to 'adequate' based on the covenant relief and additional liquidity provided under the company's new $20 million asset-based loan (ABL) facility from 'less than adequate'." Westmoreland Coal carries a Caa1 corporate family rating from Moody's Investors Service. WITTENBERG UNIVERSITY: Moody's Lowers Rating Two Notches to 'B1' ---------------------------------------------------------------- Moody's Investors Service has downgraded Wittenberg University's, OH (Wittenberg or university) rating to B1 from Ba2. The rating action affects $36.5 million of rated debt issued through the Ohio Higher Educational Facility Commission. The rating outlook is negative. Rating Rationale: The downgrade to B1 with a negative outlook is driven by deeply structurally imbalanced operating performance, weakening balance sheet and liquidity, and a fragile market position. The B1 rating also incorporates relatively healthy donor support and commitment from a new management team to balance the operating budget by FY 2017. The negative outlook at the lower rating level reflects stagnant projected operating revenues for FY 2013 and weakened liquidity. Challenges - Diminished monthly liquidity declining 27% to $17.8 million from $24.3 million in FY 2011, reflecting a continued spend down of cash to support operations and debt service payments. Moody's expects liquidity to remain thin due to structural operating deficits. - A recent history of deep operating deficits and negative cash flow. In FY 2012, the three-year average operating margin weakened to a deficit of 11.9% with a negative 1.6% cash flow margin leading to a very weak debt service coverage ratio of negative 0.2 times, as calculated by Moody's. Operating cash flow margins are projected to turn positive in FY 2013, driven primarily by substantial cuts in spending. - Stagnant enrollment growth and aggressive tuition discounting as a result of stiff competition within the State of Ohio. The freshman discount rate was 54.2% for fall 2012 and is not expected to improve for the incoming fall 2013 class, continuing to hamper net tuition revenue growth and is a particular credit challenge given a high (80%) reliance on student charges. - Frail balance sheet with expendable financial resources of negative $0.4 million cushioning debt and operations a negative 0.01 times and negative 0.01 times, respectively in FY 2012. Expendable financial resources are depressed by a post-retirement health liability of $12.5 million - Relatively high debt burden, with debt-to-revenues of 0.83 times at fiscal year-end 2012 (FYE 2012). The increasing average age of plant of over 21.5 years indicates likely needed future campus investments. The university added modest bridge financing for several capital improvement initiatives which have been partially repaid through gift revenues. There are no future borrowing plans. - Aggressive endowment investment portfolio compared to colleges and universities of similar size with relatively high exposure to private equity and hedge funds within the rated group. The university had $17.8 million in monthly liquidity as of FYE 2012, which is low in light of the university's reliance on endowment revenues to support operations and debt service payments. Strengths - Multi-year expense reductions in FY 2012 and FY 2013 in response to limited revenue growth are projected to improve operating performance in FY 2013. - Total financial resources remain relatively healthy for the rating category at $85.3 million in FY 2012, though donor restrictions currently limit the ability of financial resources to offset debt and operations. Total financial resources cushioned direct debt by 1.75 times and operations 1.26 times in FY 2012. An estimated $74.7 million, or 87% of total financial resources, remains permanently restricted as of FY 2012. - Sustained philanthropic support, with three-year average annual gift revenues of $5.8 million from FY 2010-FY 2012 and expect that fundraising will improve, as Wittenberg raises funds for capital improvements and to grow the endowment. - New president, who started in July 2012, is working with management and the board to improve Wittenberg's financial position. The board has recruited or replaced other key management positions, implemented new strategic and operational initiatives and detailed internal performance measurement standards. Outlook Wittenberg University's negative outlook anticipates weak performance over the next 12-24 months as the university's board and management continues to grapple with decreased revenue projections and continued liquidity pressures. What Could Make the Rating Go Up? Unlikely at this time, given the negative outlook. Over a longer period of time, upward rating pressure would be driven by sustained improvement in operations, resulting in consistent coverage of debt service, coupled with improved liquidity and stable enrollment and net tuition trends What Could Make the Rating Go Down? Further reduction in liquidity; continued operating deficits, inability to at least stabilize enrollment or tuition revenue; additional borrowing. A further downgrade could result in a rating differentiation for the Series 1999 and 2005 bonds with a debt service reserve fund and the rating on the Series 2001 bonds that do not benefit from a debt service reserve fund. The principal methodology used in this rating was U.S. Not-for- Profit Private and Public Higher Education published in August 2011. WSG CHARLOTTESVILLE: Managers Liable to $2.48MM Lehman Debt ----------------------------------------------------------- LBCMT 2007-C3 SEMINOLE TRAIL, LLC, Plaintiff, v. ERIC D. SHEPPARD and PHILIP WOLMAN, Defendants, Civil Action No. 3:12CV00025 (D. W.D. Va.), asserts that Messrs. Sheppard and Wolman are personally liable for the entire $2,480,000 commercial mortgage loan that WSG Charlottesville LLC obtained from Lehman Brothers Bank, FSB, in 2007. The loan is evidenced by a promissory note signed by Mr. Wolman, and secured in part by a deed of trust on certain property in Albemarle County, Virginia, which was signed by Mr. Sheppard. Messrs. Sheppard and Wolman also executed a Guaranty of Recourse Obligations of Borrower. Messrs. Sheppard and Wolman are managers of WSG Charlottesville, one of several corporations they set up for the development of retail shopping centers throughout the Commonwealth of Virginia. The Guaranty and other documents evidencing and securing the loan were ultimately assigned to Seminole Trail. WSG Charlottesville defaulted on the debt and on May 1, 2012, filed a voluntary Chapter 11 petition (Bankr. E.D. Va. Case No. 12-12785). In a June 17, 2013 Memorandum Opinion available at http://is.gd/gl1cqvfrom Leagle.com, Chief District Judge Glen E. Conrad granted Seminole Trail summary judgment, holding that the defendants are liable for the amount due and owing under the Guaranty in the amount of $3,444,770, as of April 11, 2012, with per diem interest accruing at a rate of $642.29 until paid. WSG Charlottesville, LLC, based in Miami, Florida, filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 12-12785) on May 1, 2012. Lawrence Allen Katz, Esq. -- lkatz@ltblaw.com -- at Leach Travell Britt PC, serves as the Debtor's counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and debts. A list of the Company's 11 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/vaeb12-12785.pdf The petition was signed by Eric D. Sheppard, executive and operating manager. The bankruptcy filing was made at the last-minute, according to a Daily Progress report, to postpone a planned foreclosure auction sale of the Charlottesville Center, a small Albemarle County, Va., shopping center drawn into a Florida-based Ponzi scheme. The Charlottesville Center was set to go to auction on the county courthouse steps at 11:30 a.m. on May 1, 2012. The bankruptcy petition was filed in bankruptcy court in Alexandria, Va., 20 minutes before the auction was set to begin. The report says about six prospective bidders who showed up for the sale were turned away. WSG Charlottesville is owned by Florida residents Eric D. and Jennifer L. Sheppard. The Daily Progress reported that the Albemarle and Loudoun properties are part of a forced bankruptcy in Florida in which the Sheppards are accused of benefiting from money lent to Capitol Investments USA, a company created by convicted Ponzi schemer Nevin Shapiro. Z TRIM HOLDINGS: Files Copy of Investor Presentation ---------------------------------------------------- Z Trim Holdings, Inc., will present to members of the investment community as part of a road show program. A copy of the investor presentation entitled "A Global Food and Industrial Ingredients Technology Company" to be used on the road show is available at: http://is.gd/ohcelT About Z Trim Mundelein, Ill.-based Z Trim Holdings, Inc., is a functional food ingredient company which provides custom product solutions that help answer the food industry's problems. Z Trim's revolutionary technology provides value-added ingredients across virtually all food industry categories. Z Trim's all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration, and add binding capacity -- all without degrading the taste and texture of the final food products. Z Trim Holdings disclosed a net loss of $9.58 million in 2012 following a net loss of $6.94 million in 2011. The Company's balance sheet at March 31, 2013, showed $5.60 million in total assets, $8.85 million in total liabilities and a $3.25 million total stockholders' deficit. M&K CPAS, PLLC, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company had a working capital deficit and reoccurring losses as of Dec. 31, 2012. These conditions raise substantial doubt about its ability to continue as a going concern. ZHONE TECHNOLOGIES: Gets NASDAQ Delisting Determination Letter -------------------------------------------------------------- Zhone Technologies, Inc., on June 19 disclosed that on June 18, 2013, Zhone received a Staff Delisting Determination letter from the Listing Qualifications Staff of The NASDAQ Stock Market LLC notifying the Company that it had not regained compliance with the $1.00 minimum bid price requirement for continued listing on The NASDAQ Capital Market, as set forth in Listing Rule 5550(a)(2), and that, as a result, the Company's securities would be subject to delisting unless the Company timely requests a hearing before the NASDAQ Listing Qualifications Panel. The Company intends to timely request a hearing before the Panel, at which the Company will present its plan to regain compliance with the minimum bid price requirement, including via the implementation of a reverse stock split if necessary. While the Company is diligently working to regain compliance, there can be no assurance that the Panel will grant the Company's request for continued listing. About Zhone Technologies Zhone Technologies, Inc. is a provider of IP multi-service access solutions, serving more than 750 of the world's most innovative network operators. Zhone is headquartered in California and its products are manufactured in the USA in a facility that is emission, waste-water and CFC free. * New York State Announces Plan to Help Cash-Strapped Cities ------------------------------------------------------------ Edith Honan, writing for Reuters, reported that New York state lawmakers announced plans to create a financial restructuring board and binding arbitration process to help struggling municipalities manage their finances. According to the report, the legislation, which will be taken up by the state legislature soon, is designed to shore up fiscally distressed communities with shrinking tax bases and high expenses. "Localities across the state are facing a growing financial crisis of soaring retirement costs while their populations stagnate and property values drop," said New York Governor Andrew Cuomo, announcing the deal with the majority leaders in both houses of the state legislature, the report related. "The only options for struggling municipalities cannot be bankruptcy or being subject to a financial control board." The governor did not indicate which cities and towns would likely take part in the new program, the report said. The board would be charged with making recommendations on improving fiscal stability, management and the delivery of public services to municipalities that request its help, the report further related. The board would be able give communities up to $5 million to make the changes. * Monitor Finds Lenders Failing Terms of Settlement --------------------------------------------------- Shaila Dewan, writing for The New York Times, reported that the nation's five biggest mortgage lenders have largely satisfied their financial obligations under last year's $25 billion settlement over mortgage abuses, helping hundreds of thousands of families keep their homes. But four of the five have yet to meet their commitment to end the maze of frustrations that borrowers must navigate to modify their loans, according to a report by the settlement's independent monitor. According to the report, the most common failure involved a requirement that borrowers be notified in a timely manner of any documents missing from their applications. Banks also failed to meet strict timelines for approving applications. The settlement requires that borrowers be notified of missing documents within five days and given 30 days to supply the missing paperwork and that decisions be rendered at most 30 days after an application is completed. "I think what you see is there's still a communication problem," said Joseph A. Smith Jr., the monitor, the report related. "If there's a unifying feature, it's that the servicers who failed these things are not yet communicating effectively." The mortgage settlement came after the housing crash led to a wave of foreclosures across the country and after widespread improprieties in mortgage lending and in the foreclosure process were uncovered, the report noted. The banks report their own performance on 29 loan servicing criteria, and their findings are then tested in a random sampling by outside consultants overseen by the monitor, the report said. * SEC Says It Will Seek Admission of Wrongdoing More Often ---------------------------------------------------------- Dave Michaels, writing for Bloomberg News, reported that the U.S. Securities and Exchange Commission will seek more admissions of wrongdoing from defendants as a condition of settling enforcement cases, the agency's chairman said. According to the report, SEC Chairman Mary Jo White said the change in policy would probably apply to cases in which investors were significantly harmed and the alleged fraud was egregious. The former federal prosecutor said last month she was reviewing the practice of settling cases without requiring defendants to admit misconduct. "We are going to in certain cases be seeking admissions going forward," White said at a Wall Street Journal CFO Network event in Washington, the report related. "To some degree, it can turn on how much harm has been done to investors, how egregious is the fraud. So I think you will see going forward some change in that space." The SEC's practice of settling cases without requiring admissions has been criticized by lawmakers, consumer groups and jurists including U.S. District Court Judge Jed Rakoff, who in November 2011 rejected a proposed $285 million settlement with Citigroup Inc., the report noted. Rakoff cited the public interest in learning the truth about SEC allegations that Citigroup misled investors in a $1 billion collateralized debt obligation linked to risky mortgages, the report said. In 2009, Rakoff rejected a $33 million agreement between the SEC and Bank of America Corp. * Mortgage-Bond Auction Failures Reach Most in 2013 as Prices Drop ------------------------------------------------------------------ Jody Shenn, writing for Bloomberg News, reported that U.S. home- loan bonds without government backing are failing to trade at investor auctions at the fastest pace this year as prices tumble after a rally. According to the report, the share of non-agency bonds reported by dealers as not trading after being included in widely marketed auctions rose to 44 percent in the first half of June, up from 18 percent last month, according to data from New York-based Empirasign Strategies LLC, which tracks the information. A total of $9.5 billion of the debt was offered, about the same pace as in the first four months this year, after $32.3 billion in all of May. Typical prices for senior securities backed by option adjustable- rate mortgages dropped to 68 cents on the dollar last week from 74 cents a month earlier, as concern that the Federal Reserve will curb its bond buying roils financial markets, Barclays Plc data show, the report said. Such declines are slowing trading as potential buyers offer bids that sellers consider too low, and Wall Street banks fail to take up the slack. "The Street is long from a lot of customer sales in the last six weeks, and the move down in price has had an impact on their ability to provide liquidity," Scott Buchta, head of fixed-income strategy at New York-based brokerage Brean Capital LLC, said in a telephone interview with Bloomberg. Potential buyers are being "much more opportunistic," while some sellers are trying to "execute at yesterday's levels." Others are seeking bids simply to gauge current prices, he said. * Lawyer Claims Wells Fargo Sold Risky Program as Safe ------------------------------------------------------ Margaret Cronin Fisk & Beth Hawkins, writing for Bloomberg News, reported that Wells Fargo & Co. marketed a risky securities- lending program as safe and cost institutional investors millions of dollars in losses, a lawyer said at the start of trial. "Securities lending was represented by Wells Fargo to be a minimal or no-risk investment," Mike Ciresi, a lawyer for Blue Cross Blue Shield of Minnesota and 11 other plaintiffs, said in his opening statement in federal court in St. Paul, the report related. According to the report, the case is one of at least five against Wells Fargo over its securities lending. The suits were brought in Minnesota, where Wells Fargo's securities-lending program was located. The San Francisco-based bank 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. That judgment was upheld on appeal. Wells Fargo is scheduled for a third trial on the same claims from different plaintiffs in September, brought on behalf of a class 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 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 reimbursement of losses plus punitive damages, the report related. A jury of eight women and four men was selected. * Owner-Vacated Properties Represent 20% of Foreclosures -------------------------------------------------------- RealtyTrac(R) on June 20 released a report showing that as of June owners had vacated 167,680 foreclosure properties nationwide, representing 20 percent of all U.S. properties in the foreclosure process. These owner-vacated foreclosures are in addition to 544,274 bank-owned homes nationwide that have been foreclosed on but not sold to a third party. In addition more than 650,000 homes in the foreclosure process have not been vacated by the homeowner but are likely to end up as short sales, foreclosure auction sales or bank-owned sales in the future, bringing total foreclosure-related inventory on RealtyTrac to nearly 1.4 million. High-level findings from the report -- Of the total 167,680 vacant foreclosure properties nationwide, Florida documented the most by far of any state, with 55,503, accounting for 33 percent of the national total. Illinois posted the second highest total (17,672), followed by California (9,802), Ohio (9,723), and New York (9,173). -- States where the percentage of owner-vacated foreclosures was above the national average of 20 percent included Indiana (32 percent), Oregon (28 percent), Nevada (28 percent), Washington (27 percent), and Georgia (27 percent). -- Chicago documented the most owner-vacated foreclosures of any metro area nationwide, with 14,717, representing 17 percent of all properties in foreclosure, followed by Miami (13,901), New York (10,074), Tampa-St. Petersburg-Clearwater (9,998), and Orlando (5,569). -- Florida accounted for 85 of the top 100 zip codes in terms of total owner-vacated foreclosures, led by zip code 34668 in the Tampa-St. Petersburg-Clearwater metropolitan statistical area. -- Vacancy rates were higher on lower-end foreclosures: 29 percent on homes valued below $50,000 and 25 percent on homes valued between $50,000 and $100,000. Meanwhile 12 percent of homes valued $1 million or more were vacant. -- Among the five servicers involved in the national mortgage settlement, Bank of America and GMAC (Ally) had the highest percentage of owner-vacated foreclosures, with 23 percent, followed by Chase with 21 percent and Wells Fargo and Citi tied with 20 percent. "Somewhat ironically, efforts to slow the slide of the housing market in previous years are now hampering a smooth recovery by holding back inventory of homes that almost certainly must sell in the future but are not yet listed for sale," said Daren Blomquist, vice president at RealtyTrac. "This includes homes in foreclosure that have been vacated by the homeowner, which account for one in every five U.S. properties actively in the foreclosure process, as well as more than half a million bank-owned homes. "Efforts to prevent unnecessary foreclosures and mitigate their impact on home values have resulted in a foreclosure process that takes an average of 477 days nationwide, and more than two years in some states -- which is holding many of these must-sell properties off the market," Mr. Blomquist continued. "Even if all these homes flooded the market simultaneously they would likely not cause the once-feared double dip in prices given supply constraints from non-distressed sellers and stronger demand. Given these market dynamics, it's not surprising to see that Florida, Illinois and New Jersey -- states with three of the four longest foreclosure timelines -- have all had laws take effect in the last six months that speed up the foreclosure process on vacant properties. These laws should help provide some extra supply and possibly help reduce the threat of another housing price bubble forming in these markets." "The eventual release of these properties will be welcome In the market," said Emmett Laffey, CEO of Laffey Fine Homes, covering Long Island and the five boroughs in New York City. "Buyer appetite for foreclosed properties is at an all-time high. Investors will continue to swarm at below-market deals." Report Methodology RealtyTrac compared its address-level data of properties actively in the foreclosure process (in default or scheduled for foreclosure auction) with data from the U.S. Postal Service indicating whether a home has been vacated by the homeowner. About RealtyTrac Inc. RealtyTrac -- http://www.realtytrac.com-- is a supplier of U.S. real estate data, with more than 1.5 million active default, foreclosure auction and bank-owned properties, and more than 1 million active for-sale listings on its website, which also provides essential housing information for more than 100 million homes nationwide. This information includes property characteristics, tax assessor records, bankruptcy status and sales history, along with 20 categories of key housing-related facts provided by RealtyTrac's wholly-owned subsidiary, Homefacts(R). RealtyTrac's foreclosure reports and other housing data are relied on by the Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and consumers, to help evaluate housing trends and make informed decisions about real estate. * BOOK REVIEW: The Oil Business in Latin America: The Early Years ----------------------------------------------------------------- Author: John D. Wirth Ed. Publisher: Beard Books Softcover: 282 pages List price: $34.95 Review by Gail Owens Hoelscher Buy a copy for yourself and one for a colleague on-line at http://is.gd/DvFouR This book grew out of a 1981 meeting of the American Historical Society. It highlights the origin and evolution of the state- owned petroleum companies in Argentina, Mexico, Brazil, and Venezuela. Argentina was the first country ever to nationalize its petroleum industry, and soon it was the norm worldwide, with the notable exception of the United States. John Wirth calls this phenomenon "perhaps in our century the oldest and most celebrated of confrontations between powerful private entities and the state." The book consists of five case studies and a conclusion, as follows: * Jersey Standard and the Politics of Latin American Oil Production, 1911-30 (Jonathan C. Brown) * YPF: The Formative Years of Latin America's Pioneer State Oil Company, 1922-39 (Carl E. Solberg) * Setting the Brazilian Agenda, 1936-39 (John Wirth) * Pemex: The Trajectory of National Oil Policy (Esperanza Duran) * The Politics of Energy in Venezuela (Edwin Lieuwen) * The State Companies: A Public Policy Perspective (Alfred H. Saulniers) The authors assess the conditions at the time they were writing, and relate them back to the critical formative years for each of the companies under review. They also examine the four interconnecting roles of a state-run oil industry and distinguish them from those of a private company. First, is the entrepreneurial role of control, management, and exploitation of a nation's oil resources. Second, is production for the private industrial sector at attractive prices. Third, is the integration of plans for military, financial, and development programs into the overall industrial policy planning process. Finally, in some countries is the promotion of social development by subsidizing energy for consumers and by promoting the government's ideas of social and labor policy and labor relations. The author's approach is "conceptual and policy oriented rather than narrative," but they provide a fascinating look at the politics and development of the region. Mr. Brown provides a concise history of the early years of the Standard Oil group and the effects of its 1911 dissolution on its Latin American operations, as well as power struggles with competitors and governments that eventually nationalized most of its activities. Mr. Solberg covers the many years of internal conflict over oil policy in Argentina and YPF's lack of monopoly control over all sectors of the oil industry. Mr. Wirth describes the politics and individuals behind the privatization of Brazil's oil industry leading to the creation of Petrobras in 1953. Mr. Duran notes the wrangling between provinces and central government in the evolution of Pemex, and in other Latin American countries. Mr. Lieuwin discusses the mixed blessing that oil has proven for Venezuela., creating a lopsided economy dependent on the ups and downs of international markets. Mr. Saunders concludes that many of the then-current problems of the state oil companies were rooted in their early and checkered histories." Indeed, he says, "the problems of the past have endured not because the public petroleum companies behaved like the public enterprises they are; they have endured because governments, as public owners, have abdicated their responsibilities to the companies." John D. Wirth is Gildred Professor of Latin American Studies at Standford University. ********* 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 ***