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/raid1/www/Hosts/bankrupt/TCR_Public/130715.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 15, 2013, Vol. 17, No. 194 Headlines 250 AZ: Hiring David Knapper as Special Counsel 250 AZ: Wants to Add 2 TIC Entities as Members 250 AZ: Taps Robert Rubin as Ohio Counsel 900 LINDEN BLOCK: Voluntary Chapter 11 Case Summary ACTIVECARE INC: Intends to Remove "Going Concern" by 2014 AEMETIS INC: CEO Held 18% Equity Stake at April 18 AFFYMAX INC: BlackRock Stake Down to 0.53% as of June 28 ALLY FINANCIAL: DBRS Raises Issuer & LT Debt Ratings to 'BB' AMERICA WEST RESOURCES: Coal Mine Case Is Dismissed AMERICAN AIRLINES: US Airways Shareholders Approve Merger AMERICAN AIRLINES: New Bill Would Help Union Workers AMERICAN EQUITY: Fitch to Rate $400MM Unsecured Notes 'BB' AMERIGO ENERGY: Updates Shareholders on Recent Developments AMPAL-AMERICAN: Trustee Says CEO Must Be Included In Bankruptcy API TECHNOLOGIES: Swings to $7.5 Million Net Income in Q2 API TECHNOLOGIES: Posts $7.5 Million Net Income in Fiscal Q2 ATLAS ENERGY: Moody's Assigns B3 Rating to New $240MM Term Loan ATLAS ENERGY: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable ATP OIL & GAS: Lenders Given Interim Approval to Purchase Assets AVANTAIR INC: Austin Marxe Owns 29.5% of Shares as of June 28 BANNING COMMUNITY: Fitch Affirms 'BB+' Tax Allocation Bonds Rating BBX CAPITAL: Stockholders Elect Five Directors BCBG MAX AZRIA: Guggenheim to Acquire Controlling Stake BEAR STEARNS: Fund Liquidators Sue Credit-Rating Firms BELLISIO FOODS: S&P Rates $345MM Sr. Secured Credit Facilities 'B' BERNARD L. MADOFF: 'Lackluster' Art Collection to be Auctioned BEST BUY: Fitch Assigns 'BB-' Rating to $500MM Unsecured Notes BIOVEST INT'L: Implements Plan, Lenders Take Over Ownership BIRDSALL SERVICES: Trustee Seeks Liquidation Under Ch. 7 BLOCKBUSTER INC: Weil's Expenses Draw Objection From Trustee BLUE BUFFALO: S&P Raises Sr. Secured Debt Rating From 'B+' BONDS.COM GROUP: Kazazian Held 10.5% Equity Stake at June 25 BRADFORD HOLDINGS: Case Summary & 2 Unsecured Creditors CABLEVISION SYSTEMS: Fitch Affirms 'BB-' Issuer Default Rating CAESARS ENTERTAINMENT: Bank Debt Trades at 10% Off CAFE CNN: Case Summary & 17 Largest Unsecured Creditors CAPITOL BANCORP: Committee Objects to Investment Banker Employment CENGAGE LEARNING: Hiring Approvals Sought CHAMPION INDUSTRIES: Unit Sells Newspaper Operations for $10MM COACH AMERICA: Settles Bridgestone's $1MM Tire Claim COUDERT BROTHERS: Jones Day, Dechert Deny They Owe Partner Profits DENTAL CARE: A.M. Best Affirms 'B' Financial Strength Rating DETROIT, MI: City Workers, Retirees Push Back on Pensions E-DEBIT GLOBAL: Deploys "E-Debit/Winsoft" E-Payment Platform EAST COAST BROKERS: Gerard McHale Named Chapter 11 Trustee EAST COAST BROKERS: Ch.11 Trustee Taps Own Firm as Accountant EAST COAST BROKERS: Trustee Hires Berger Singerman as Counsel EASTMAN KODAK: Shareholders Renew Bid for Equity Committee EASTMAN KODAK: STWB Opposes Kodak's Bid to Estimate Claims ELBIT IMAGING: Bank Hapoalim Reserves Rights Under Default Notice ENDEAVOUR INTERNATIONAL: Rochelle Production Starts September ENDICOTT INTERCONNECT: Seeks Ch. 11 After $100MM Loss EQUIPMENT ACQUISITION: Court to Dismiss Suits v. 11 Banks EVEN ST PRODUCTIONS: Fires Back at Sly Stone's Former Manager EVERGREEN OIL: Court Okays Buxbaum HCS as Financial Advisor EVERGREEN OIL: Can Hire Greenspan as Insurance Consultant EVERGREEN OIL: Hein & Assoc. Okayed as Accountant, Tax Consultant EVERGREEN OIL: Panel Can Hire Mirman Bubman as Bankruptcy Counsel EXCEL MARITIME: Robertson Maritime Seeks Expedited Discovery EXIDE TECHNOLOGIES: BlackRock Holds Less Than 1% Equity Stake FINJAN HOLDINGS: Inks Employment Agreements with President & CFO FIRST FINANCIAL: Rob Whartenby Joins as Chief Credit Officer FIVE RIVERS PETROLEUM: Court Won't Reinstate Automatic Stay FORMATECH INC: Bank Has Superior Claims Over Cellceutix FREESEAS INC: Issues 1.4MM Add'l Settlement Shares to Hanover FREESEAS INC: Agrees to Sell $10.5 Million Debt to Hanover GARLOCK SEALING: Parties Disagree on Asbestos Claims GELTECH SOLUTIONS: Borrows $1 Million From Major Shareholder GLYECO INC: To Buy GSS's Glycol Recycling Business in Maryland GREAT PLATTE: River Archway Museum Proposes Chapter 11 Plan HANDY HARDWARE: Has July 25 Hearing to Confirm Exit Plan HERCULES OFFSHORE: Completes Issuance of $400 Million Sr. Notes HERON LAKE: Neal Greenberg is Interim Chief Financial Officer HOSPITAL DE DAMAS: Employees' Claim for Christmas Bonus Rejected IDERA PHARMACEUTICALS: Appoints James Geraghty as Chairman INTELLICELL BIOSCIENCES: Issues Add'l 7 Million Shares to Hanover INVESTORS LENDING: McCallar Firm Wins Fees Battle Over Committee ISTAR FINANCIAL: Moody's Changes Outlook on Ratings to Positive K-V PHARMACEUTICAL: 6th Amended Plan Filed KIT DIGITAL: Equity Committee Urges 'No' Vote on Plan KLEEN ENERGY: Fitch Affirms 'BB' Term Loan Ratings, Outlook Neg LANCER MANAGEMENT: 11th Cir. Tosses Members' Bid for Legal Fees LDK SOLAR: Shareholders Re-Elect Four Directors LIGHTSQUARED INC: To Proceed to Trial over Ergen Trades LIGHTSQUARED INC: Status Conference Postponed MACCO PROPERTIES: July 17 Hearing on Plan Outline Stricken MARIAH RE: Wants $100MM Back After 'Falsified' Storm Report MERRIMACK PHARMACEUTICALS: To Offer $125 Million of Securities METEX MFG: Can Employ Rath Young as Local Counsel MIDTOWN SCOUTS: Taps Hawash Meade as Special Litigation Counsel MONITRONICS INTERNATIONAL: Moody's Affirms Ba3 Rating on New Debt MONITRONICS INTERNATIONAL: S&P Affirms 'B' CCR; Outlook Stable MORGUARD REAL ESTATE: DBRS Confirms 'BB' Issuer Rating MOUNTAIN PROVINCE: Gahcho Kue Inks Impact Benefit Agreement MPG OFFICE: Settles Lawsuits Re Brookfield Acquisition Proposal MSI CORPORATION: Can Employ McGuireWoods LLP as Counsel MSI CORPORATION: Files Amended List of Top Unsecured Creditors MSR RESORT: Five Mile Says Bidding Plan Wastes IP Assets NAVISTAR INTERNATIONAL: BNY Owned 35% Preferred Shares at June 30 NEOMEDIA TECHNOLOGIES: B. Liben Had 9.9% Equity Stake at June 27 NEW TRIDENT: S&P Assigns 'B' CCR & Rates $415MM Facility 'B' NEWLEAD HOLDINGS: Supreme Court OKs Settlement with Hanover NEWLEAD HOLDINGS: Hanover Held 9.9% Equity Stake at July 9 NMP-GROUP: Enters Ch. 11 After $51-Mil. Court Loss NORTHLAND RESOURCES: Creditors Approve Reorganization Plan NUMIRA BIOSCIENCES: Case Summary & 20 Largest Unsecured Creditors NORTH LAS VEGAS, NV: Moody's Lowers GOLT Bond Rating to 'Ba1' OHIO COUNTY, KY: Moody's Cuts $83MM Revenue Bonds Rating to Ba2 OLD SECOND: To Release Second Quarter Results on July 24 OP-TECH ENVIRONMENTAL: NRC US Amends Tender Offer Statement ORMET CORP: Says Ohio Utility Deal Not A Contract OTELCO INC: Corrects Report on Committee Composition PACIFIC GOLD: Transfers Ownership of Project W claims PARKWAY PROPERTIES: Court Terminates Stay, Dismisses Ch. 11 Case PASKOR LLC: Case Summary & 6 Unsecured Creditors PENSON WORLDWIDE: Agreement with SunGard Gets Court Approval PLAYLOGIC ENTERTAINMENT: Fails to Legally Change Company Name POSITIVEID CORP: Amends Several Agreements with VeriTeQ POST HOLDINGS: Moody's Cuts CFR to B1 Following $350MM Debt Offer POST HOLDINGS: S&P Revises Outlook to Neg. & Affirms 'B+' CCR QUANTUM FUEL: Pays in Full Outstanding Balance Under Bridge Notes RADICAL BUNNY: 9th Circ. Nixes Execs' Appeal in SEC Suit RADIOSHACK CORP: Affirms "Strong" Balance Sheet READER'S DIGEST: Files Plan Focusing on North American Business RG STEEL: Wins Approval to Settle Dispute Over Sparrows Point Sale ROCKWELL MEDICAL: Results From Efficacy Study of SFP ROGERS BANCSHARES: Case Summary & 4 Unsecured Creditors ROTHSTEIN ROSENFELDT: Exit Plan OK'd After Settlement With Victims ROYAL HOLDINGS: Moody's Assigns 'B3' Corp. Family Rating ROYAL HOLDINGS: S&P Assigns 'B' CCR; Outlook Stable SAN BERNARDINO, CA: Bond Creditors Support City's Ch. 9 Case SBARRO LLC: S&P Lowers Corp. Credit Rating to 'CCC+'; Outlook Neg. SHAD HANNA'S: Bankr. Ct. Narrows Suit Over Farmers Insurance Claim SOUTH FLORIDA SOD: Files for Ch. 11 After Housing Recession SPRINT NEXTEL: Fitch Affirms 'B+' Issuer Default Rating STANADYNE CORP: S&P Lowers Corporate Credit Rating to 'CCC' STEADY ROCKIN: Case Summary & 20 Largest Unsecured Creditors STOCKTON, CA: Sales Tax Measure to Go on Ballot TELETOUCH COMMUNICATIONS: Exits Wholesale Distribution Business THERMOENERGY CORP: Moody Replaces Grant Thornton as Accountants THINKFILM LLC: Creditor Suit vs. Bergstein Stays in Bankr. Court THQ INC: Int'l Units Fight Plan Reclassifying $107MM Claims TLO LLC: Hires Ahearn Jasco as Accountants TLO LLC: Taps Akerman Senterfitt as Corporate Counsel TOLEDO-LUCAS COUNTY PORT: Fitch Affirms 'BB' Rating on $67MM Bonds TOOTIE PIE: Chapter 11 Petition Filed TOUSA INC: Seeks to Establish Disputed Claims Reserve TRADER CORP: Moody's Changes Outlook to Negative & Keeps B3 CFR TRIBUNE CO: To Separate Broadcasting, Publishing Businesses TRUCEPT INC: Suspending Filing of Reports with SEC US SILICA: New $425MM Sr. Debt Facility Gets Moody's B1 Rating USIC HOLDINGS: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable VICTORY ENERGY: Appoints Marcum LLP as New Accountants VIVARO CORPORATION: Plan Filing Exclusivity Extended to Sept. 30 WAVE SYSTEMS: To Present Plan to Regain Nasdaq Compliance WON & SUN: Case Summary & 2 Unsecured Creditors WORLDWIDE ENERGY: Case Summary & 19 Largest Unsecured Creditors ZALE CORP: CCB to Provide Credit Cards to Zale US Customers * Consumer Bureau to Sanction Banks Over Collection Methods * DOJ: Bernanke Does Not Need to Testify in AIG Bailout Suit * European Bank Resolution Plan Sets Up Fight With Germany * Foreclosure Squeeze Crimps Las Vegas Real Estate Market * Fitch: Higher Rates Could Dent Mortgage Earnings of U.S. Banks * J.P. Morgan Review Finds Errors in Debt-Collection Lawsuits * Newedge Fined for Lax Oversight of Manipulative Trades * Moody's Says Interest Rate Hike Means More Risks for Insurers * Moody's Notes Rise in Global SGDL Rate in Second Quarter * Regulators Say Dodd-Frank Rulemaking Nearing Finish Line * Regulators Seek Stiffer Bank Rules on Capital * SEC Lifts 80-Year-Old Ban on Advertising by Hedge Funds * U.S. Banks Seen Freezing Payouts Under Harsh Leverage Rule * Without Pension Deal, Ill. Governor Withholds Lawmakers' Pay * S&P Applies Revised Insurance Criteria to 22 Insurance Groups * Consumer Wins $1,600 Judgment While Lawyer Gets $78,000 in Fees * Former Judge Raymond T. Lyons Joins Fox Rothschild's NJ Office * Paul J. Schoff Joins Eckert Seamans' Philadelphia Office * BOND PRICING -- For Week From July 8 to 12, 2013 ********* 250 AZ: Hiring David Knapper as Special Counsel ----------------------------------------------- 250 AZ, LLC, sought and obtained approval from the U.S. Bankruptcy Court for the District of Arizona to employ David L. Knapper and the Law Offices of David L. Knapper as special counsel. Mr. Knapper will, among other things: a. advise the Debtor and assist Breen Olson & Trenton, LLP, the Debtor's main counsel, with respect to testimony, documents and arguments to be presented at evidentiary hearings; b. advise the Debtor and assist Breen Olson & Trenton with respect to evidentiary and strategic matters; and c. appear and assist in conducting the hearings on behalf of the Debtor as one of its attorneys. The Debtor selected Mr. Knapper, a sole proprietor, doing business as Law Offices of David L. Knapper, to assist in preparing and conducting all evidentiary hearings beginning June 19, 2013, and possibly additional dates in which related issues maybe continued. Mr. Knapper will charge the Debtor an hourly rate of $250. He is requesting an initial retainer of $30,000, but reserves the right to apply for payment of fees exceeding the retainer. The retainer will not come from any secured creditor's cash collateral. To the best of the Debtor's knowledge, Mr. Knapper is a "disinterested person" as that term is defined within Section 101(14) of the Bankruptcy Code. About 250 AZ, LLC 250 AZ, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 13-00851) in Tucson, Arizona, on Jan. 22, 2013. In its schedules, the Debtor disclosed $25 million in assets and $70.8 million in liabilities. 250 AZ owns an 84.70818% tenant in common interest in a 29-story office building located at 250 East Fifth Street, in Cincinnati, Ohio. The Debtor is represented by Dennis M. Breen, III, Esq., at Breen Olson & Trenton, LLP. The U.S. Trustee said an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against the company have expressed interest in serving on a committee. 250 AZ: Wants to Add 2 TIC Entities as Members ---------------------------------------------- 250 AZ, L.L.C., filed a motion with the Bankruptcy Court seeking approval to add two new tenants-in-common entities, namely TIC 31 and TIC 38, as additional members of the Debtor. In November and December 2012, 31 of the TIC Members executed a Bill of Sale and General Assignment by which they transferred to 250 AZ, LLC, all of their interest in the property located at 250 East Fifth Street, Cincinnati, Ohio, known as the Chiquita Center, to Debtor. The interest of the 31 TIC Members transferred to the Debtor consisted of 84.70818% of the ownership of the property. On June 4, 2013, TIC 31, whose sole member is the Atlantic Vue Towers, Inc., a Florida Corporation, with Edwin C. Bliss as the President, executed a Bill of Sale and General Assignment by which it transferred to 250 AZ, LLC, all of its interest in the property, which consisted of 4.6220% of the property located at 250 East Fifth Street, Cincinnati, Ohio, known as the Chiquita Center, to Debtor. On June 6, 2013, TIC 38, whose sole member is the Seacrest Apartments of Miami Beach, Inc., a Florida Corporation, with Ted Bliss as the President, executed a Bill of Sale and General Assignment by which it transferred to 250 AZ, LLC, all of its interest in the property, which consisted of 0.99821% of the property located at 250 East Fifth Street, Cincinnati, Ohio, known as the Chiquita Center, to Debtor. On June 4, 2013, TIC 31 paid the sum of $11,972 to Debtor's counsel's Trust account to pay its pro-rata share of the costs and expenses to date. On June 14, 2013, TIC 38 paid the sum of $2,586 to the Debtor's counsel's Trust account to pay its pro-rata share of the costs and expenses to date. With the addition of TIC 31's interest and TIC 38's interest in the Chiquita Center, Debtor will hold a total interest of 90.32839% in the Chiquita Center. Dennis M. Breen, III, Esq., at Breen, Olson & Trenton, LLP, counsel to the Debtor, says that it is in the best interest of Debtor and its bankruptcy estate, that the Court approve the addition of TIC 31 and TIC 38 as additional Members of the Debtor, thereby increasing the percentage of ownership of Debtor in the Chiquita Center to 90.32839%, and reducing the interest of the other non-member holders of the Chiquita Center to 9.67161% when allowing Debtor to operate in a more orderly and cohesive fashion for the benefit of a greater percentage of ownership interest in the building. About 250 AZ, LLC 250 AZ, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 13-00851) in Tucson, Arizona, on Jan. 22, 2013. In its schedules, the Debtor disclosed $25 million in assets and $70.8 million in liabilities. 250 AZ owns an 84.70818% tenant in common interest in a 29-story office building located at 250 East Fifth Street, in Cincinnati, Ohio. The Debtor is represented by Dennis M. Breen, III, Esq., at Breen Olson & Trenton, LLP. The U.S. Trustee said an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against the company have expressed interest in serving on a committee. 250 AZ: Taps Robert Rubin as Ohio Counsel ----------------------------------------- 250 AZ, LLC, asks the U.S. Bankruptcy Court for the District of Arizona for permission to employ Robert S. Rubin, Esq., an attorney with Cohen, Todd, Kite & Stanford, LLC, as the Debtor's Ohio counsel. The Debtor needs Cohen Todd to represent it in leasing matters and in litigation involving a property known as the "Chiquita Center," located at 250 East Fifth Street, in Cincinnati. Mr. Rubin attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The current hourly rates for the Cohen Todd attorneys who are likely to work on leasing and litigation matters range from $200 to $350 per hour. About 250 AZ, LLC 250 AZ, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 13-00851) in Tucson, Arizona, on Jan. 22, 2013. In its schedules, the Debtor disclosed $25 million in assets and $70.8 million in liabilities. 250 AZ owns an 84.70818% tenant in common interest in a 29-story office building located at 250 East Fifth Street, in Cincinnati, Ohio. The Debtor is represented by Dennis M. Breen, III, Esq., at Breen Olson & Trenton, LLP. The U.S. Trustee said an official committee of unsecured creditors has not been appointed because an insufficient number of persons holding unsecured claims against the company have expressed interest in serving on a committee. 900 LINDEN BLOCK: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: 900 Linden Block Development, LLC 236 West Portal Ave., Suite 413 San Francisco, CA 94127 Bankruptcy Case No.: 13-31550 Chapter 11 Petition Date: July 5, 2013 Court: United States Bankruptcy Court Northern District of California (San Francisco) Judge: Hannah L. Blumenstiel Debtor's Counsel: John F. Klopfenstein, Esq. LAW OFFICES OF JOHN KLOPFENSTEIN 9 Gabilan St, #6 Salinas, CA 93901 Tel: (831) 751-3947 Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Debtor did not file a list of its largest unsecured creditors together with its petition. The petition was signed by Koray Ergur, managing member. ACTIVECARE INC: Intends to Remove "Going Concern" by 2014 --------------------------------------------------------- Activecare, Inc., posted a corporate presentation on its Web site, which discussed, among other things, the Company's financial plan. The Company plans to raise $2.8 million in capital by December 2013 and to obtain EBITDA breakeven by September quarter. The Company also intends to remove the "going concern" qualification in its consolidated financial statements and show financial strength in 2014. The Company expects that by December of 2015, the price of the Company's common stock will be $27 per share. A copy of the presentation is available for free at http://is.gd/WDRTyh About ActiveCare South West Valley City, Utah-based ActiveCare, Inc., is organized into three business segments based primarily on the nature of the Company's products. The Stains and Reagents segment is engaged in the business of manufacturing and marketing medical diagnostic stains, solutions and related equipment to hospitals and medical testing labs. The CareServices segment is engaged in the business of developing, distributing and marketing mobile health monitoring and concierge services to distributors and customers. The Chronic Illness Monitoring segment is primarily engaged in the monitoring of diabetic patients on a real time basis. The Company's business plan is to develop and market products for monitoring the health of and providing assistance to mobile and homebound seniors and the chronically ill, including those who may require a personal assistant to check on them during the day to ensure their safety and well being. ActiveCare incurred a net loss of $12.36 million for the year ended Sept. 30, 2012, compared with a net loss of $7.89 million during the prior year. The Company's balance sheet at March 31, 2013, showed $10.95 million in total assets, $17.78 million in total liabilities and a $6.82 million total stockholders' deficit. Hansen, Barnett & Maxwell, P.C., in Salt Lake City, Utah, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012, citing recurring operating losses and an accumulated deficit which conditions raise substantial doubt about the Company's ability to continue as a going concern. AEMETIS INC: CEO Held 18% Equity Stake at April 18 -------------------------------------------------- In a Schedule 13D filing with the U.S. Securities and Exchange Commission, Eric A. McAfee and McAfee Capital, LLC, disclosed that as of April 18, 2013, they beneficially owned 34,515,473 shares of common stock of Aemetis, Inc., representing 18 percent of the shares outstanding. Mr. McAfee is the sole member of McAfee Capital and chief executive officer and chairman of the Board of Aemetis. On April 18, 2013, the Aemetis was provided with an Agreement for Satisfaction of Note by Share and Note Issuance of the Cagan Revolving Line of Credit held with Mr. Cagan on behalf of four note holders, of which McAfee Capital was a 62.35 percent holder. The Satisfaction of Note converted the remaining outstanding principal, interest and fees eligible for conversion into common stock of the the Company. Pursuant to this conversion into common equity, McAfee Capital was issued 1,171,536 shares of common stock of Aemetis. On May 9, 2013, McAfee Capital sold an aggregate of 222,222 shares of its common stock of the Company in a private transaction for an average of $0.45 per share. A copy of the regulatory filing is available for free at: http://is.gd/wXwmtf About Aemetis Cupertino, Calif.-based Aemetis, Inc., is an international renewable fuels and specialty chemical company focused on the production of advanced fuels and chemicals and the acquisition, development and commercialization of innovative technologies that replace traditional petroleum-based products and convert first- generation ethanol and biodiesel plants into advanced biorefineries. McGladrey LLP, in Des Moines, Iowa, expressed substantial doubt about Aemetis, Inc.'s ability to continue as a going concern following the annual results for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and its cash flows from operations are not sufficient to cover debt service requirements. The Company reported a net loss of $4.3 million on $189.0 million of revenues in 2012, compared with a net loss of $18.3 million on $141.9 million of revenues in 2011. The Company's balance sheet at March 31, 2013, showed $94.76 million in total assets, $98.14 million in total liabilities and a $3.37 million total stockholders' deficit. AFFYMAX INC: BlackRock Stake Down to 0.53% as of June 28 -------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that, as of June 28, 2013, it beneficially owned 198,928 shares of common stock of Affymax Inc. representing 0.53 percent of the shares outstanding. A copy of the regulatory filing is available at: http://is.gd/Mmtbrq About Affymax Affymax, Inc. (Nasdaq: AFFY) is a biopharmaceutical company based in Palo Alto, California. In March 2012, the U.S. Food and Drug Administration approved the Company's first and only product, OMONTYS(R) (peginesatide) Injection for the treatment of anemia due to chronic kidney disease in adult patients on dialysis. OMONTYS is a synthetic, peptide-based erythropoiesis stimulating agent, or ESA, designed to stimulate production of red blood cells and has been the only once-monthly ESA available to the adult dialysis patient population in the U.S. The Company co- commercialized OMONTYS with its collaboration partner, Takeda Pharmaceutical Company Limited, or Takeda during 2012 until February 2013, when the Company and Takeda announced a nationwide voluntary recall of OMONTYS as a result of safety concerns. The Company's balance sheet at March 31, 2013, showed $66.7 million in total assets, $81.5 million in total liabilities, and a stockholders' deficit of $14.8 million. ALLY FINANCIAL: DBRS Raises Issuer & LT Debt Ratings to 'BB' ------------------------------------------------------------ DBRS, Inc. has upgraded the Issuer and Long-Term Debt ratings of Ally Financial Inc. to BB from BB (low). Concurrently, DBRS has confirmed the R-4 Short-Term Instruments rating. The trend on all ratings is Stable. This action removes the ratings from Under Review with Positive Implications, where they were placed on June 7, 2013. Today's action follows the Company's announcement that the bankruptcy court has approved the planned settlement agreement between Ally, the bankruptcy estate of its former subsidiary Residential Capital, LLC (ResCap) estate, and with ResCap's creditors. As discussed in its press release on June 7, 2013, the upgrade reflects DBRS's view that the comprehensive plan support agreement is an overall positive for Ally. The plan includes the release of all claims between Ally and ResCap, including representation and warranty claims that reside with ResCap, as well as all claims held by third parties related to ResCap and that could be brought against Ally, including securitization related claims. In return, Ally will contribute $1.95 billion to the ResCap bankruptcy estate, as well as the first $150 million from insurance proceeds the Company expects to receive from releases in connection with the plan. DBRS notes that on June 13, 2013, the bankruptcy court approved the full repayment of the $1.13 billion owed to Ally by ResCap under existing credit facilities. DBRS considers the settlement as removing substantial uncertainty from Ally's credit profile and allowing management to focus on the core auto finance business. Further, this action considers the notable transformation of the Ally business model to a dealer-centric model. Indeed, in 1Q13 just 16% of Ally's originations were subvented by GM or Chrysler compared to 58% in 2009. Ratings are also supported by the improving earnings power of the core business, which generated pre-tax income, excluding repositioning items, of $207 million in 1Q13. Risk management capabilities have been strengthened and the Company maintains solid servicing capabilities, which is evidenced in recent credit performance. Improving liquidity and funding underpinned by a growing deposit franchise were also factored into the current ratings. The Stable trend reflects DBRS's expectations that earnings will continue to improve as the economy gradually recovers with corresponding growth in earning assets. Ratings could be positively influenced by further improvement in earnings generation underpinned by further diversification of origination volumes, and improved quality of capital. DBRS comments that Ally has stated that it intends to address the remaining Mandatory Convertible Preferred Shares (MCPs) held by the U.S. Treasury, subject to regulatory approval, which DBRS would view favorably and as another step to recovery. Moreover, DBRS expects Ally to continue to expand its deposit base while accessing wholesale funding markets at reasonable costs. While DBRS anticipates some normalization in asset quality metrics from cyclical lows, ratings could be negatively pressured should credit costs exceed DBRS's tolerance levels or result in the erosion of capital. Further, any material weakening in the franchise evidenced by sustained decline in origination volumes and revenue would be viewed negatively. DBRS has also replaced the Commercial Paper Rating of Ally and its subsidiary with a more encompassing Short-Term Instruments rating. Please note this action does not impact the rating level of R-4 with a Stable trend. AMERICA WEST RESOURCES: Coal Mine Case Is Dismissed --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Chapter 11 reorganization of America West Resources Inc. was dismissed at the behest of Las Vegas Bankruptcy Judge Bruce A. Markell, who is leaving the bench this week to become the Jeffrey Stoops Professor of Law at Florida State University. According to the report, America West owns a small coal mine in Helper, Utah. Although it attempted to sell the entire operation, it was only able to sell the mining equipment for $1.25 million. The report notes that no one wanted the mine itself. After Judge Markell raised the question of whether the case should be dismissed or converted to liquidation in Chapter 7, the company consented to dismissal. Before the case was formally dismissed, Judge Markell made sure professional fees were paid from sale proceeds. About America West Based in Salt Lake City, Utah, America West Resources Inc. is a domestic coal producer engaged in the mining of clean and compliant (low-sulfur) coal. The majority of the Company's coal is sold to utility companies for use in the generation of electricity. America West Resources and three affiliates sought Chapter 11 protection (Bankr. D. Nev. Case Nos. 13-50201 to 13-50204) on Feb. 1, 2013, in Reno, Nevada. Nevada Bankruptcy Judge Bruce A. Markell on Feb. 5, 2013, entered an order transferring the bankruptcy case from Reno to Las Vegas. America West disclosed assets of $18.3 million and liabilities of $35.5 million as of Dec. 31, 2012. America West has tapped the law firm of Flaster/Greenberg P.C. as reorganization counsel; the Law Office of Illyssa I. Fogel as local counsel; and consulting firm CFCC Partners, LLC, as financial advisor. The mine emerged from a prior bankruptcy reorganization in late 2008. America West made a $2.25 million contribution to finance emergence from bankruptcy by the mine's direct owner Hidden Splendor Resources Inc. (Case No. 07-bk-51378) in the same court. AMERICAN AIRLINES: US Airways Shareholders Approve Merger --------------------------------------------------------- US Airways Group, Inc. LCC on July 12 disclosed that its shareholders approved the merger agreement with AMR Corporation, the parent company of American Airlines, Inc. The merger agreement was approved by the affirmative vote of the holders of a majority of the outstanding shares of US Airways stock, which represented over 99% of the votes cast by US Airways shareholders on the proposal. Of the 132,788,060 shares voted, 132,273,780 shares voted in favor of the proposal; 257,757 shares voted against; and 256,523 abstained. Shareholders also approved other proposals related to the merger. Doug Parker, chairman and CEO of US Airways, and incoming CEO of the combined company, said, "We are pleased that our shareholders overwhelmingly supported our merger with American Airlines. This approval is a major milestone on our path to completing the merger, and we continue to make excellent progress overall thanks to the focused efforts of the dedicated representatives from both companies. By bringing together two highly complementary networks and generating significant revenue synergies, the new American Airlines will deliver enhanced value for its shareholders. I want to thank our shareholders, our customers and our more than 100,000 dedicated employees for their support throughout this process and look forward to moving forward as an even stronger airline." As previously disclosed, AMR and US Airways agreed to combine to create the new American Airlines, a premier global carrier. Headquartered in Dallas-Fort Worth, the new American Airlines will become a highly competitive alternative for consumers to other global carriers and is expected to offer more than 6,700 daily flights to 336 destinations in 56 countries. The combined airline will offer customers more choices and increased service across a larger worldwide network and through an enhanced oneworld(R) Alliance. Together, American Airlines and US Airways are expected to operate a mainline fleet of almost 950 aircraft and employ more than 100,000 team members worldwide. The merger is subject to regulatory approvals, other customary closing conditions and confirmation of AMR's Plan of Reorganization by the U.S. Bankruptcy Court for the Southern District of New York. The companies continue to expect to complete the combination in the third quarter of 2013. About US Airways US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,100 flights per day and serves 198 communities in the U.S., Canada, Mexico, Europe, the Middle East, the Caribbean, Central and South America. The airline employs more than 32,000 aviation professionals worldwide, operates the world's largest fleet of Airbus aircraft and is a member of the Star Alliance network, which offers its customers more than 21,900 daily flights to 1,328 airports in 195 countries. Together with its US Airways Express partners, the airline serves approximately 80 million passengers each year and operates hubs in Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. In April 2013, AMR filed a Chapter 11 plan of reorganization that will carry out the merger. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. The hearing before the Court to consider confirmation of the Plan is scheduled for Aug. 15, 2013. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 AMERICAN AIRLINES: New Bill Would Help Union Workers ---------------------------------------------------- Jacqueline Palank, writing for The Wall Street Journal, reported that lawmakers recently introduced legislation that would allow American Airlines pilots, flight attendants and other union workers to defer taxes on the equity they'll receive at the conclusion of the airline's Chapter 11 restructuring. According to the report, Rep. Michael G. Grimm (R., N.Y.) is sponsoring the bipartisan bill, H.R. 2591. The legislation would push out existing deadlines under federal aviation law to ensure that the union workers can take advantage of the tax deferral that has helped other airline employees in prior bankruptcy cases. American Airlines parent AMR Corp. wants to exit Chapter 11 protection through a merger with US Airways Group Inc. AMR is proposing to give its labor unions, unsecured creditors and current shareholders 72% of the new common stock in the merged airline, which would keep the American name. The payment plan remains subject to bankruptcy-court approval, while the merger is now under antitrust review. Captain Keith Wilson, the president of American's pilots union, said that the bill represents "basic fairness" in light of the concessions the unions agreed to during AMR's restructuring, the report said. "The equity stake we will receive is designed in part to mitigate the pension losses we have sustained in American Airlines' Chapter 11 bankruptcy," he said in a statement, the report cited. "We are hopeful that lawmakers will move to prevent a serious inequity by approving this legislation promptly." About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. AMR, previously the world's largest airline prior to mergers by other airlines, is the last of the so-called U.S. legacy airlines to seek court protection from creditors. Weil, Gotshal & Manges LLP serves as bankruptcy counsel to the Debtors. Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, are on board as special counsel. Rothschild Inc., is the financial advisor. Garden City Group Inc. is the claims and notice agent. Jack Butler, Esq., John Lyons, Esq., Felecia Perlman, Esq., and Jay Goffman, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP serve as counsel to the Official Committee of Unsecured Creditors in AMR's chapter 11 proceedings. Togut, Segal & Segal LLP is the co-counsel for conflicts and other matters; Moelis & Company LLC is the investment banker, and Mesirow Financial Consulting, LLC, is the financial advisor. The Retiree Committee is represented by Jenner & Block LLP's Catherine L. Steege, Esq., Charles B. Sklarsky, Esq., and Marc B. Hankin, Esq. AMR and US Airways Group, Inc., on Feb. 14, 2013, announced a definitive merger agreement under which the companies will combine to create a premier global carrier, which will have an implied combined equity value of approximately $11 billion. The deal is subject to clearance by U.S. and foreign regulators and by the bankruptcy judge overseeing AMR's bankruptcy case. In April 2013, AMR filed a Chapter 11 plan of reorganization that will carry out the merger. By distributing stock in the merged airlines, the plan is designed to pay all creditors in full, with interest. The hearing before the Court to consider confirmation of the Plan is scheduled for Aug. 15, 2013. Bankruptcy Creditors' Service, Inc., publishes AMERICAN AIRLINES BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by AMR Corp. and its affiliates. (http://bankrupt.com/newsstand/or 215/945-7000 AMERICAN EQUITY: Fitch to Rate $400MM Unsecured Notes 'BB' ---------------------------------------------------------- Fitch Ratings has assigned an expected rating of 'BB' to American Equity Investment Life Holding Company's (AEL) proposed issuance of $400 million of senior unsecured notes due 2021. AEL's Long- term Issuer Default Rating is unaffected by this rating action. Fitch affirmed the ratings of AEL and its insurance operating subsidiaries with a Stable Outlook on April 12, 2013. Key Rating Drivers Fitch expects the majority of proceeds from the issuance to be used to fund the redemption of a portion of existing debt on the company's balance sheet. Issuance of the new senior debt is not expected to result in an increase in AEL's financial leverage ratio to a level above Fitch's rating trigger of 50%. The company's financial leverage was approximately 36% at March 30, 2013. AEL's recent financial performance has been in line with Fitch's expectations for the company's current ratings. AEL is headquartered in West Des Moines, Iowa and reported total GAAP assets of $36.9 billion and equity of $1.7 billion at March 31, 2013. AEILIC, the main operating subsidiary of AEL, is also headquartered in West Des Moines and had statutory capital and surplus of $1.7 billion at March 31, 2013. Rating Sensitivities The key rating triggers that could result in an upgrade include: -- Enhanced capitalization with risk-based capital (RBC) above 350% on a sustained basis. The key rating triggers that could result in a downgrade include: -- A reduction in capitalization with RBC below 300%; -- A sustained deterioration in operating results such that interest coverage is below 3x; -- Significant increase in lapse/surrender rates; -- Inability to maintain sufficient parent company liquidity to fund any potential forced repurchase of outstanding notes payable; -- Unexpected spike in credit related impairments; -- Financial leverage above 50%. The key rating triggers that could result in a narrowing of notching between the IDR of AEL and the Insurer Financial Strength (IFS) of AEILIC include: -- A sustainable decline in financial leverage below 30%; -- Sustained GAAP EBIT-based interest coverage above 8x. Fitch expects to assign the following rating: American Equity Investment Life Holding Company -- $400 million senior unsecured notes due 2021 'BB'. AMERIGO ENERGY: Updates Shareholders on Recent Developments ----------------------------------------------------------- A month ago Amerigo Energy, Inc., announced the launch of its new Web site http://www.AmerigoHoldings.com/and the hiring of Monarch Media, LLC, as its investor relations company. Along with that, Company's management has been diligently working to increase shareholder value. Here are some milestones the Company has reached in the last 30 days: * New distribution contract for Le FLAV Straight Up, throughout Illinois * Further negotiations with strategic partners, domestic and international for Le FLAV Spirits * Acquisition of 900,000 shares of previously issued stock to be returned to Treasury The Company is working on multiple strategic partnerships for the Le FLAV brand both on the domestic and international level, as well as through other channels that would all provide diverse benefit to the company. While it is pre-mature to announce any specifics, the Company is excited about the coming quarter and next six months. Jason Griffith, chief executive officer of Amerigo Energy also noted the re-acquisition of 900,000 shares of common stock and return to treasury stock. "We have been having conversations regarding the 900,000 shares for quite some time and during the last quarter we were able to secure the acquisition of these shares." Griffith continued, "We are committed to maintaining the viability of the capitalization structure of the company." The Company said existing shareholders have already begun to benefit from the hiring of Monarch Media. According to the Company, this addition to the team allows a more fluid line of communication between the company and its current and future shareholders. The Company is currently evaluating other key alliances and strategies for the company to continue to build shareholder value. About Amerigo Henderson, Nevada-based Amerigo Energy, Inc., is aggressively looking for potential oil leases to acquire as well as businesses which will fit with the Company's strategy. Its wholly-owned subsidiary, Amerigo, Inc., incorporated in Nevada on Jan. 11, 2008, holds minimal assets, including oil lease interests. The Company's balance sheet at March 31, 2013, showed $2.3 million in total assets, $2.5 million in total liabilities, and a stockholders' deficit of $244,148. "As a result of Amerigo Energy's deficiency in working capital at Dec. 31, 2012, and other factors, Amerigo Energy's auditors have stated in their report that there is substantial doubt about Amerigo Energy's ability to continue as a going concern. In addition, Amerigo Energy's cash position is inadequate to pay the costs associated with its operations. No assurance can be given that any debt or equity financing, if and when required, will be available." AMPAL-AMERICAN: Trustee Says CEO Must Be Included In Bankruptcy --------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that the Chapter 7 trustee overseeing Ampal-American Israel Corp.'s wind-down urged a New York bankruptcy judge to include the energy investment company's CEO as part of the bankruptcy entity so he can obtain "critical" information from him about Ampal's finances. According to the report, Trustee Alex Spizz of Nachamie Spizz Cohen & Serchuk PC said in a court filing that Yosef A. Maiman, the sole remaining director of the company and majority shareholder, has access to documents that are essential to Spizz's ability to properly calculate the company's assets. About Ampal-American Ampal-American Israel Corporation -- http://www.ampal.com/-- acquired interests primarily in businesses located in Israel or that are Israel-related. Ampal-American filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-13689) on Aug. 29, 2012, to restructure the Company's Series A, Series B and Series C debentures. Bankruptcy Judge Stuart M. Bernstein presides over the case. Ampal-American sought bankruptcy protection in the U.S. because bankruptcy laws in Israel would lead to the Company's liquidation. Michelle McMahon, Esq., at Bryan Cave LLP, serves as the Debtor's counsel. Houlihan Lokey serves as investment banker. The petition was signed by Irit Eluz, chief financial officer, senior vice president. The Company scheduled $290,664,095 in total assets and $349,413,858 in total liabilities. A three-member official committee of unsecured creditors is represented by Brown Rudnick as counsel. API TECHNOLOGIES: Swings to $7.5 Million Net Income in Q2 --------------------------------------------------------- API Technologies Corp. filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing net income of $7.47 million on $68.10 million of net revenue for the three months ended May 31, 2013, as compared with a net loss of $109.50 million on $72.24 million of net revenue for the same period a year ago. For the six months ended May 31, 2013, the Company incurred a net loss of $6.95 million on $129.11 million of net revenue, as compared with a net loss of $108.73 million on $136.50 million of net revenue for the same period during the prior year. As of May 31, 2013, the Company had $336.30 million in total assets, $179.79 million in total liabilities, $25.47 million in redeemable preferred stock and $131.03 million in shareholders' equity. A copy of the Form 10-Q is available for free at: http://is.gd/7wexeY About API Technologies Corp. API Technologies designs, develops and manufactures electronic systems, subsystems, RF and secure solutions for technically demanding defense, aerospace and commercial applications. API Technologies' customers include many leading Fortune 500 companies. API Technologies trades on the NASDAQ under the symbol ATNY. For further information, please visit the Company Web site at www.apitech.com. For the 12 months ended Nov. 30, 2012, the Company reported a net loss of $148.70 million, as compared with a net loss of $17.32 million during the prior year. * * * As reported by the TCR on Feb. 14, 2013, Moody's Investors Service has withdrawn all ratings of API Technologies Corp., including its Caa1 Corporate Family Rating and negative outlook due to the repayment of all rated debt. On Feb. 6, 2013, API Technologies Corp. completed a refinancing of its previously outstanding rated bank debt. All ratings of API have been withdrawn since the company has no rated debt outstanding. In the Feb. 22, 2013, edition of the TCR, Standard & Poor's Ratings Services said that it lowered its corporate credit rating on API Technologies Corp. to 'B-' from 'B'. "The downgrade reflects weaker-than-expected credit metrics resulting from less-than-expected improvements in operating performance and higher debt, including a modest increase from the recent refinancing," said Standard & Poor's credit analyst Chris Mooney. API TECHNOLOGIES: Posts $7.5 Million Net Income in Fiscal Q2 ------------------------------------------------------------ API Technologies Corp. reported net income of $7.47 million on $68.10 million of net revenue for the three months ended May 31, 2013, as compared with a net loss of $109.50 million on $72.24 million of net revenue for the same period during the prior year. For the six months ended May 31, 2013, the Company reported a net loss of $6.95 million on $129.11 million of net revenue, as compared with a net loss of $108.73 million on $136.50 million of net revenue for the same period a year ago. As of may 31, 2013, the Company had $336.30 million in total assets, $179.79 million in total liabilities, $25.47 million in redeemable preferred stock, and $131.03 million in shareholders' equity. "This quarter we delivered growth in revenue, bookings, and profitability. At the same time, we drove two divestitures that were part of the previously announced and on-going strategic review, which primarily contributed to the reduction of our term debt by $75.9 million," said Bel Lazar, president and chief executive officer of API Technologies Corp. "Through a combined emphasis on top line growth, new product introductions, and operational efficiencies, we are successfully executing on our strategy to deliver short and long-term value to our customers and shareholders alike." A copy of the press release is available for free at: http://is.gd/l2SGj8 About API Technologies Corp. API Technologies designs, develops and manufactures electronic systems, subsystems, RF and secure solutions for technically demanding defense, aerospace and commercial applications. API Technologies' customers include many leading Fortune 500 companies. API Technologies trades on the NASDAQ under the symbol ATNY. For further information, please visit the Company Web site at www.apitech.com. For the 12 months ended Nov. 30, 2012, the Company reported a net loss of $148.70 million, as compared with a net loss of $17.32 million during the prior year. * * * As reported by the TCR on Feb. 14, 2013, Moody's Investors Service has withdrawn all ratings of API Technologies Corp., including its Caa1 Corporate Family Rating and negative outlook due to the repayment of all rated debt. On Feb. 6, 2013, API Technologies Corp. completed a refinancing of its previously outstanding rated bank debt. All ratings of API have been withdrawn since the company has no rated debt outstanding. In the Feb. 22, 2013, edition of the TCR, Standard & Poor's Ratings Services said that it lowered its corporate credit rating on API Technologies Corp. to 'B-' from 'B'. "The downgrade reflects weaker-than-expected credit metrics resulting from less-than-expected improvements in operating performance and higher debt, including a modest increase from the recent refinancing," said Standard & Poor's credit analyst Chris Mooney. ATLAS ENERGY: Moody's Assigns B3 Rating to New $240MM Term Loan --------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to Atlas Energy, L.P. including, a B3 rating to its proposed $240 million six-year senior secured Term Loan B, a B3 Corporate Family Rating, a B3-PD Probability of Default Rating and a SGL-2 Speculative Grade Liquidity Rating. The rating outlook is stable. Term loan proceeds will be used to repay existing revolving credit facility borrowings, to buy preferred shares issued by Atlas Resource Partners, L.P., and to cover the purchase price of certain natural gas assets in the Arkoma basin from EP Energy. ATLS is a publicly-traded Master Limited Partnerships whose principal assets consist of equity ownership interests in two independent MLPs - ARP (B2, stable) and Atlas Pipeline Partners, L.P. (APL, B1 stable) that provide almost all of ATLS' cash flows in the form of distribution payments. In addition to owning 37% and 6% Limited Partnership interests in ARP and APL, respectively, ATLS also controls ARP and APL through 100% ownership of their General Partners and owns all of the Incentive Distribution Rights in them. Issuer: Atlas Energy, L.P. Assignments: Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Speculative Grade Liquidity Rating, Assigned SGL-2 $240M Senior Secured Bank Credit Facility, Assigned B3 $240M Senior Secured Bank Credit Facility, Assigned a range of LGD4, 50 % Ratings Rationale: ATLS' B3 CFR reflects the underlying credit quality of ARP and APL, the strategic importance of these MLPs and their stable cash flows for ATLS' debt service and distributions and its diversified exposure to the midstream and upstream segments and across multiple U.S. basins. The rating also considers the structural subordination of ATLS' cash flows and its own MLP structure that imposes a heavy distribution burden, hinders absolute debt reduction and requires timely capital market access. ATLS has no meaningful assets other than its equity interests in ARP and APL and the partnership essentially functions as a pass-through vehicle that pays out all of its distribution income to unitholders. The Arkoma assets, which ATLS is acquiring for about $67 million, will generate $9-$10 million of EBITDA representing only 6% of ATLS' annual cash flows. ATLS is rated two notches below APL and one notch below ARP because of structural subordination. The LP and GP distribution streams to ATLS are residual cash flows after operating expenses and debt service payments have been satisfied at ARP and APL. There is no contractual guarantee from APL or ARP to ATLS, and hence, if one of the MLPs were to default, ATLS' equity interest in that entity would become worthless. While Moody's acknowledges the significant value in ATLS' equity interests and the low probability of joint-default by ARP and APL, given that more than 65% of ATLS' 2013 cash flows will originate from the B2 rated ARP, ATLS is rated below ARP reflecting its subordinated status, significant debt burden and small tangible asset value. The term loan facility is rated B3, the same as the B3 CFR under Moody's Loss Given Default Methodology, because ATLS has only one class of debt in its capital structure. The term loan ranks pari passu with the partnership's $50 million borrowing base revolving credit facility and they share the same collateral pool. Both facilities are secured by substantially all of ATLS' assets, including its ownership interests in ARP and APL and at least 80% PV-10 value of its proved reserves. The interest burden that ATLS has to service is small (~$18 million annually) relative to its distribution earnings. With the recent Cardinal and TEAK acquisitions by APL and the oil and gas asset acquisition by ARP, ATLS's combined share of LP and GP distributions could exceed $100 million in 2013. However, a significant portion of that distribution stream will have to be supported by IDR payments requiring strong operational and commercial execution by APL and ARP. ATLS' proforma standalone leverage of 2.5x appears favorable. However, on a fully consolidated basis, ATLS's leverage is very high and will be around 5x at the end of 2013. While leverage increased considerably at the underlying MLPs in the first half of 2013, Moody's expects credit metrics to improve through 2014 as acquisitions are fully integrated and utilized. More debt-financed acquisitions could derail the deleveraging goal. The sustainability and growth in ATLS' distribution income are highly contingent on ARP and APL's ability to execute and thrive in their respective industries. ATLS' management team is committed to financing growth at ARP and APL in a prudent manner. Since 2011, both MLPs have issued significant equity while making large acquisitions and successfully raised debt and equity capital in a timely manner. Based on ATLS should have good liquidity through mid-2014. Proforma for the $240 million term loan issue and revolver repayment, the company will have about $50 million of cash on hand and full availability under a $50 million committed borrowing base revolving credit facility. The term loan agreement allows for an incremental $25 million of borrowings if certain conditions are met, which can provide additional liquidity, if needed. There is a leverage covenant (maximum debt/EBITDA of 4.5x) in the term loan agreement, which ATLS should be able to able to meet comfortably. ATLS could be upgraded if one or both of ARP and APL are upgraded; however, over the near term, ATLS' ratings will have greater correlation with ARP's ratings given two-thirds of its distribution earnings will come from ARP. An upgrade is also possible if ATLS' leverage is reduced below 1x provided APL and ARP's ratings hold at or above the levels. The ratings would come under downward pressure if ATLS's standalone leverage (distributions received/debt) remains above 3x over an extended period or distributions are funded with debt causing the distribution coverage ratio to fall below 1x. The principal methodology used in this rating was the Global Midstream Energy Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Atlas Energy, L.P. is a Delaware incorporated Master Limited Partnership. ATLAS ENERGY: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable ----------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to Philadelphia-based Atlas Energy L.P. The outlook is stable. At the same time, S&P assigned its 'B' issue rating to Atlas Energy L.P.'s proposed $240 million senior secured term loan due 2019. S&P also assigned a '3' recovery rating to the term loan, indicating its expectation of meaningful (30% to 50%) recovery in the event of a payment default. The rating action follows Atlas Energy L.P.'s announcement that it plans to enter into a $240 million secured term loan. The company will use proceeds from the transaction to fund repayment of existing debts, to fund the purchase of natural gas producing assets, to make an equity contribution to E&P subsidiary Atlas Resource Partners L.P. (ARP), and for general corporate purposes. Atlas and ARP entered into agreements with EP Energy to acquire E&P properties with total proved reserves of 466 billion cubic feet equivalent of natural gas. Atlas will acquire about 45 million cubic feet equivalent of proved reserves for $67 million as part of the transaction. The stable outlook reflects S&P's expectation that Atlas' leverage will remain moderate, providing a mitigant to the risks that are associated with the E&P and natural gas gathering and processing businesses, and the MLP structure. "We would consider a downgrade if Atlas faced constrained liquidity, if stand-alone debt to EBITDA increased to 4x without a clear path to reduction, or if the credit quality of the company's subsidiaries deteriorated. We could consider raising Atlas' rating if the ratings of its subsidiaries improved," said Standard & Poor's credit analyst Ben Tsocanos. ATP OIL & GAS: Lenders Given Interim Approval to Purchase Assets ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that ATP Oil & Gas Corp. secured the signature of the bankruptcy judge on a July 9 order giving interim approval to sell offshore oil and gas properties to secured lenders largely in exchange for $580 million of the $792.5 million in debt they hold. According to the report, the total value of the transaction is more than $1.2 billion, taking into consideration liabilities the lenders assume such as plugging wells, ATP's bankruptcy lawyer Charles S. Kelley from Mayer Brown LLP in Houston said in an interview. Bankruptcy Judge Marvin Isgur in Houston was unable to give final approval for the sale because the lenders haven't yet formed the company to take ownership and thus were unable to make the required showing of the ability to operate the properties as required by law. Following a later hearing where the lenders will establish adequate assurance of performance, Judge Isgur will sign a second order giving final approval for the sale. The report notes that the transfer of title to the lenders is scheduled for late August. The lenders are providing $55 million cash to pay creditors with liens on the assets ahead of the lenders' claims. ATP was compelled to sell the assets following violations of covenants in the loan agreement financing the Chapter 11 reorganization begun in August. About ATP Oil Houston, Texas-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. AVANTAIR INC: Austin Marxe Owns 29.5% of Shares as of June 28 ------------------------------------------------------------- In an amended Schedule 13D filing with the U.S. Securities and Exchange Commission, Austin W. Marxe and David M. Greenhouse disclosed that, as of June 28, 2013, they beneficially owned 14,556,087 shares of common stock of Avantair, Inc., representing 29.5 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/chTipH About Avantair Inc. Headquartered in Clearwater, Fla., Avantair, Inc. (OTC BB: AAIR) -- http://www.avantair.com/-- sells fractional ownership interests in, and flight hour card usage of, professionally piloted aircraft for personal and business use, and the management of its aircraft fleet. According to AvData, Avantair is the fifth largest company in the North American fractional aircraft industry. Avantair also operates fixed flight based operations (FBO) in Camarillo, California and in Caldwell, New Jersey. Through these FBOs and its headquarters in Clearwater, Florida, Avantair provides aircraft maintenance, concierge and other services to its customers as well as to the Avantair fleet. For the nine months ended March 31, 2013, the Company incurred a net loss attributable to common stockholders of $11.56 million on $113.02 million of total operating revenue, as compared with a net loss attributable to common stockholders of $5.43 million on $131.51 million of total operating revenue for the same period a year ago. As of March 31, 2013, the Company had $78.25 million in total assets, $125.11 million in total liabilities, $14.86 million in series A convertible preferred stock, and a $61.72 million total stockholders' deficit. "If we cannot generate the required revenues and gross margin to achieve profitability or obtain additional capital on acceptable terms, we will need to substantially revise our business plan in order to continue operations and an investor could suffer the loss of a significant portion or all of his investment in our Company. The factors described herein raise substantial doubt about our ability to continue as a going concern," according to the Company's quarterly report for the period ended March 31, 2013. BANNING COMMUNITY: Fitch Affirms 'BB+' Tax Allocation Bonds Rating ------------------------------------------------------------------ Fitch Ratings has affirmed the following tax allocation bonds (TABs) for Banning Community Redevelopment Agency, CA (the RDA): -- $29.4 million TABs, series 2007 (Merged Downtown and Midway Redevelopment Project), at 'BB+'. The Rating Outlook is Stable. SECURITY The bonds are secured by tax increment collected within the sole project area, net of a 20% low-moderate housing set-aside, county charges, and various other statutory senior pass-through payments. KEY RATING DRIVERS TIGHT DEBT SERVICE COVERAGE: The below investment grade rating largely reflects tight debt service coverage levels and vulnerability to further assessed valuation (AV) declines. A very small drop in AV could take coverage below 1.00 times (x) maximum annual debt service (MADS) and increase the likelihood of a draw on the cash-funded debt service reserve fund (DSRF). PRESSURED TAX BASE: The Stable Outlook reflects Fitch's assessment that the large, somewhat mature project area with good taxpayer diversification is poised for long-term growth despite near-term pressure following a 23% AV decline over the past four years and outstanding appeals. County projections for 2% annual growth in AV for fiscal 2014 and beyond appear somewhat reasonable as the county's real estate market continues to recover. MIXED SOCIO-ECONOMIC CHARACTERISTICS: The local economy is characterized by a high but declining unemployment rate, low income levels on a per capita basis, and an above-average individual poverty rate. SATISFACTORY AB 1X 26 IMPLEMENTATION: The city has been recognized as a successor agency (SA) to the redevelopment agency. The rating incorporates the expectation that the SA will continue its satisfactory implementation of AB 1X 26 (dissolution legislation) procedures. Several recognized obligation payment schedules (ROPS) have been approved by the oversight board, county, and state, and the SA has received timely and sufficient payments to cover revenue bond debt service for fiscal years 2012-2014. HOUSING REVENUE AVAILABILITY: The city, as SA, retains access to housing set-aside revenues no longer restricted to this purpose following the dissolution of redevelopment. Fitch's methodology conservatively excludes such revenues from debt service coverage calculations, as they are not pledged to debt service payment on non-housing TABs. However, they appear to be available to the SA should it require them for such purposes. RATING SENSITIVITIES COVERAGE CHANGES: The rating is highly sensitive to shifts in AV given the tight coverage levels. While Fitch considers the prospects for AV stabilization and/or slow expansion to be reasonable given the generally improving county real estate market, an unexpected AV decline could bring annual debt service coverage to below 1.00x and trigger a draw on the DSRF. The 'BB+' rating could withstand a marginal draw on the DSRF but would likely be downgraded if revenue performance caused further draws on, and/or inability to replenish, the DSRF. CREDIT PROFILE The city of Banning is located in western Riverside County, 84 miles east of downtown Los Angeles and 23 miles west of Palm Springs, situated on the major I-10 distribution route. The merged project area is large at 3,283 acres and makes up a significant part of the city, encompassing 22% of the city's land area and 35% of its population of almost 30,000. Riverside County's socioeconomic characteristics are somewhat mixed. Per capita money income is below-average while the individual poverty rate is above-average. However, median household income is above- average when compared to the national rate. While the city stands to benefit from the return to growth in some of the region's employment sectors, the county's unemployment rate remained a high 9.6% in April 2013 (down from 11.6% a year prior). TAX BASE VULNERABILITY The project area's historical AV growth was extremely high. This was primarily due to a large amount of new development and price increases spurred by the city's relative affordability and accessibility to major surrounding employment centers. However, the recession substantially lowered property prices and slowed new development, causing AV to drop by 23% and incremental valuation (IV) to fall sharply by 31% during fiscal years 2010 and 2013. The rate of AV decline slowed to a minimal 0.5% in fiscal 2013, suggesting the property market has reached bottom. The county is projecting a 2% annual increase in fiscal 2014 and outyears. Such a projection appears reasonable in light of countywide economic improvement. However, for the project area, AV growth will more likely result from increasing valuations on existing properties than new development since little new construction is currently slated. Increasing existing properties' valuations could add impetus to appeals which in fiscal 2012 resulted in an AV loss of $4.7 million, approximately 1% of the project area's AV. The tax base is somewhat mature, with a fiscal 2013 IV to base year AV ratio of 206% (down from a peak 299% in fiscal 2009). Due to AV declines, fiscal 2012 total tax increment revenues declined approximately 7% from fiscal 2011. The bulk of the project area's property is secured (88.3%) and this secured property is well diversified (66% commercial, 32% residential, and 2% vacant). Taxpayer concentration is low, with the top 10 taxpayers representing only 19% of fiscal 2013 IV. POTENTIAL DEBT SERVICE COVERAGE PRESSURE The majority of the SA's debt is its 2003 and 2007 parity TABs, which amortize very slowly. Debt service coverage on the existing parity TABs has shrunk to low levels with recent AV declines. Fiscal 2013 ADS coverage is 1.08x without subordinated pass- through payments. This is down from 1.47x in fiscal 2010 when AV started to decline. MADS occurs in fiscal years 2016 and 2017 and MADS coverage is projected to be only 1.05x in fiscal 2014. Debt service payments decline slightly each year thereafter through fiscal 2029 when the 2003 TABs finally mature, followed by much lower annual debt service payments through fiscal 2038 when the 2007 TABs finally mature. Fitch is concerned that even minor weakening of the property market would negatively affect debt service coverage. Taking into account the current rate of successful appeals, it would only take another 2% AV decline to reduce MADS coverage to below 1.00x. This assumes that subordinated pass-through payments are not made. A draw on the cash-funded DSRF remains a possibility over the near term. However, excess housing set-aside revenue, while not factored into the rating, could be made available by the SA to plug debt service shortfalls. SATISFACTORY AB 1X 26 IMPLEMENTATION The SA has successfully completed the July through December 2013 ROPS approval process with the state Department of Finance (DOF). The SA has received a Finding of Completion letter from DOF, acknowledging the successful completion of two due diligence reviews. BBX CAPITAL: Stockholders Elect Five Directors ---------------------------------------------- The annual meeting of shareholders BBX Capital Corporation was held on July 9, 2013, at which the shareholders: (a) elected five directors, each for a term expiring at the Company's 2014 Annual Meeting of Shareholders, namely: (1) Norman H. Becker, (2) Steven M. Coldren, (3) Willis N. Holcombe, (4) Jarett S. Levan and Anthony P. Segreto; (b) approved the compensation of the Company's "named executive officers"; and (c) indicated "Every Three Years" as the desired frequency of future advisory votes on Executive Compensation. Based on these results, and consistent with the recommendation of the Company's Board of Directors that future shareholder advisory votes on "named executive officer" compensation be conducted every three years, the Company will conduct future shareholder advisory votes on "named executive officer" every three years. About BBX Capital BBX Capital (NYSE: BBX), formerly known as BankAtlantic Bancorp,is a diversified investment and asset management company. The business of BBX Capital includes real estate ownership, direct acquisition and joint venture equity in real estate, specialty finance, and the acquisition of controlling and non controlling investments in operating businesses. BBX Capital disclosing net income of $235.76 million in 2012, a net loss of $28.74 million ncome in 2011 and a net loss of $143.25 million in 2010. The Company's balance sheet at March 31, 2013, showed $432.48 million in total assets, $198.13 million in total liabilities and $234.35 million in total stockholders' equity. * * * As reported by the TCR on March 1, 2011, Fitch has affirmed its current Issuer Default Ratings for BankAtlantic Bancorp and its main subsidiary, BankAtlantic FSB at 'CC'/'C' following the announcement regarding the regulatory order with the Office of Thrift Supervision. BankAtlantic has announced that it has entered into a Cease and Desist Order with the OTS at both the bank and holding company level. The regulatory order includes increased regulatory capital requirements, limits to the size of the balance sheet, no new commercial real estate lending and improvements to its credit risk and administration areas. Furthermore, the holding company must also submit a capital plan to maintain and enhance its capital position. BCBG MAX AZRIA: Guggenheim to Acquire Controlling Stake ------------------------------------------------------- The Wall Street Journal's Suzanne Kapner and Emily Glazer report that fashion designer Max Azria is in the final stages of hammering out a deal that will ease his company's $685 million debt load but likely will cost him control of the fashion house he took a quarter-century to build. WSJ relates that people familiar with the discussions said the talks are likely to leave investment firm Guggenheim Partners LLC with a controlling interest in BCBG Max Azria Group Inc. Mr. Azria is expected to stay on in an advisory role, perhaps as chairman. An agreement could be reached in coming weeks, the people said. The WSJ report notes closely held BCBG has hired investment bank Blackstone Group LP and law firm Skadden, Arps, Slate, Meagher & Flom LLP to advise the clothing company on its restructuring. The report relates about a third of BCBG's debt comes due in each of three years beginning in 2014, according to Standard & Poor's. The report says Guggenheim holds about $475 million of the company's debt. It is being advised by law firm Weil, Gotshal & Manges LLP. The report also notes people familiar with the situation said BCBG has been on the block since at least last year and held talks with private-equity firms TPG and Sycamore Partners this year. In June 2012, S&P lowered its corporate credit rating on Vernon, Calif.-based BCBG Max Azria Group Inc. to 'CCC' from 'CCC+'. The outlook is negative. S&P at that time also lowered the ratings on the company's $230 million first-lien term loan to 'CCC' from 'CCC+'. "The ratings on BCBG reflect Standard & Poor's view of the company's 'weak' liquidity, as we believe the company breached financial covenants for the fourth quarter of fiscal 2011 because of weaker-than-previously-expected operating performance," said S&P's credit analyst Helena Song. "However, we expect its revenue base and operating performance to stabilize somewhat in fiscal 2012, as the company has completed its exit from the mass market and the retail environment gradually improves." "As a result, we believe that it is more likely for the company to receive a covenant amendment than to enter into bankruptcy in the next six months," S&P said. BEAR STEARNS: Fund Liquidators Sue Credit-Rating Firms ------------------------------------------------------ Jeannette Neumann, writing for The Wall Street Journal, reported that the collapse of two Bear Stearns Cos. hedge funds almost six years ago was one of the precipitating events of the global financial crisis. The fight over who was to blame rages on. Liquidators for the two hedge funds sued the three major credit- rating firms in New York State Supreme Court for allegedly misrepresenting their independence and the accuracy of their ratings, seeking $1.12 billion in damages, the report said, citing a court filing. According to the report, the filing related to the ratings appears to be timed to beat the statute of limitations for fraud cases in New York state, which is six years, say lawyers uninvolved in the case. The rating firms -- Standard & Poor's Ratings Services, Moody's Investors Service and Fitch Ratings -- began their en masse downgrades of hundreds of securities backed by mortgages in July 2007. The liquidators allege the rating firms "intentionally and knowingly misrepresented information concerning their independence, the accuracy of their ratings, the quality of their models, and the extent of their surveillance" on securities known as collateralized-debt obligations and residential-mortgage-backed securities, the report said. The liquidators for the funds and their lawyers didn't return repeated requests for comment, WSJ noted. About Bear Stearns New York City-based The Bear Stearns Companies Inc. (NYSE: BSC) -- http://www.bearstearns.com/-- was a leading financial services firm serving governments, corporations, institutions and individuals worldwide. The investment bank collapsed in 2008 and was sold in a distressed sale to JPMorgan Chase in a transaction backed by the U.S. government. Grand Cayman, Cayman Islands-based Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd. and Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd. were open-ended investment companies, which sought high income and capital appreciation relative to the London Interbank Offered Rate, and designed for long-term investors. On July 30, 2007, the Funds filed winding up petitions under the Companies Law of the Cayman Islands. Simon Lovell Clayton Whicker and Kristen Beighton at KPMG were appointed joint liquidators. The joint liquidators filed for Chapter 15 petitions before the U.S. Bankruptcy Court for the Southern District of New York the next day. On August 30, 2007, the Honorable Burton R. Lifland denied the Funds protection under Chapter 15 of the Bankruptcy Code. BELLISIO FOODS: S&P Rates $345MM Sr. Secured Credit Facilities 'B' ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Minneapolis-based Bellisio Foods Inc. At the same time, S&P assigned its 'B' issue-level ratings to the company's proposed new $345 million senior secured credit facilities and assigned a '3' recovery rating, indicating S&P's expectation for meaningful (50% to 70%) recovery in the event of a payment default. "The ratings reflect our view of Bellisio's 'highly leveraged' financial risk profile and 'vulnerable' business risk profile," said Standard & Poor's credit analyst Bea Chiem. S&P understands that the term loan proceeds will be used to refinance the company's existing $170 million term loan ($153.3 million outstanding as of April 21, 2013) and to fund certain fees and expenses. The delayed draw proceeds will be used to fund the purchase of Overhill Farms for $84.8 million and to refinance the company's $52 million mezzanine loan and $8 million incremental mezzanine financing in December 2013 when prepayment premiums are expected to be lower; the remaining delayed draw proceeds of up to $20 million may be used for future acquisitions. The outlook remains stable, reflecting S&P's expectation that Bellisio will sustain adequate liquidity, continue to generate positive free cash flow, and maintain leverage at or below 5x (including $35 million of Class A membership interests as debt). BERNARD L. MADOFF: 'Lackluster' Art Collection to be Auctioned -------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Bernard Madoff's "lackluster" art collection will be sold at auctions later this year. Artists whose works are being sold include Jasper Johns, Roy Lichtenstein, Andy Warhol and Henri Matisse. Sotheby's will sell most of the art. Stair Galleries will sell posters, carpets and some decorative items. The report discloses that the auctions will be conducted under authority of the U.S. Bankruptcy Court where Madoff's personal bankruptcy was combined with the liquidation of his firm, Bernard L. Madoff Investment Securities Inc. 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 BUY: Fitch Assigns 'BB-' Rating to $500MM Unsecured Notes -------------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB-' to Best Buy Co., Inc's (Best Buy) new 5% $500 million five-year senior unsecured notes. The Rating Outlook is Negative. Proceeds will be used to refinance the 6.75% $500 million notes maturing July 2013 and for general corporate purposes. Key Rating Drivers The ratings reflect Fitch's expectation that top line and EBITDA will remain under pressure through 2013. Fitch believes that, despite having dominant market shares in many categories, it could be difficult and expensive for Best Buy to retain its current market share as price-conscious consumers gravitate toward the lowest prices within the online and brick and mortar channels. Business Model Risk: Best Buy has been struggling to defend its share against the onslaught of competitive pressure from e-tailers and discounters. Moreover, the online channel has grown faster, and taken share away from, the bricks and mortar channel. As such, Best Buy has seen negative comparable store sales (comps) for the past six of eight quarters, while EBITDA declined 20% in 2012 and 38% in the first quarter of 2013 (excluding discontinued operations related to Best Buy Europe). Pricing Investments Hamper Margins: Best Buy is perceived to be priced higher than its competition. As a result, the retailer implemented a price-matching program beginning in the 2012 holiday season, and is investing in sharper prices. Fitch expects Best Buy will have to continue to invest in sharper prices to maintain share over the intermediate term. However, it is unlikely that volumes will increase enough to offset the lower pricing in the near term, as it takes time for consumer perceptions to change. Thus, sales and gross profit are expected to remain under pressure in the coming 12-18 months. Leverage Expected to Increase: Fitch expects EBITDA to be around $1.7 billion in 2013, versus $2.4 billion in 2012 and $3 billion in 2011 (excluding Best Buy Europe). As a result, adjusted debt/EBITDAR is expected to increase to the mid-3.5x range in 2013. Fitch currently expects leverage could creep up to the 4.0x range in 2014 on continued price investments, unless volume begins to pick up meaningfully. Liquidity Not a Present Concern: Best Buy had $908 million in cash as of May 4, 2013 and full availability under its $2 billion domestic credit facilities. Free cash flow (after dividends) excluding material working capital swings is expected to be around $300 million in 2013. However, adverse swings in working capital compared to last year could leave Best Buy in a cash neutral position on Fitch's EBITDA projections in 2013. Rating Sensitivities Negative Rating Action: A downgrade could be caused by the following factors, individually or collectively: worse-than- expected sales declines in the mid-single-digit range versus Fitch's low single-digit-range projections; gross margin declines similar to first-quarter levels of 190 bps, without any significant offset from cost savings, thereby putting further pressure on EBITDA; or adjusted leverage above the low-4x range. Positive Rating Action: Fitch would need to see stabilization in comps trends and EBITDA that are sustainable in order to revise Best Buy's Outlook to Stable. Fitch has assigned the following rating: -- $500 million five-year senior unsecured notes 'BB-'. Fitch rates Best Buy as follows: -- Long-term IDR 'BB-'; -- Bank credit facilities 'BB-'; -- Senior unsecured 'BB-'. The Rating Outlook is Negative. BIOVEST INT'L: Implements Plan, Lenders Take Over Ownership ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Biovest International Inc. implemented the Chapter 11 reorganization plan on July 9 that the bankruptcy court in Tampa, Florida, approved by signing a confirmation order on June 28. According to the report, the plan gave ownership of the company to secured lenders. In confirming the plan, U.S. Bankruptcy Judge K. Rodney May in Tampa, Florida, turned aside objections from the official shareholders' committee and from the U.S. Trustee. The equity committee filed an appeal. The report notes that it remains to be seen whether the appeal survives consummation of the plan. Under a theory known as equitable mootness, appeals from plan approvals are often dismissed because the appellate court believes it would be impossible or impracticable to unwind a multitude of transactions and distributions made when a plan is consummated. Lenders Corps Real LLC and Laurus/Valens Funds bought the business in exchange for $44 million in debt. About Biovest International Biovest International, Inc. -- http://www.biovest.com/-- is an emerging leader in the field of active personalized immunotherapies. In collaboration with the National Cancer Institute, Biovest has developed a patient-specific, cancer vaccine, BiovaxID(R), with three clinical trials completed, including a Phase III study, demonstrating evidence of safety and efficacy for the treatment of indolent follicular non-Hodgkin's lymphoma. Headquartered in Tampa, Florida, with its bio-manufacturing facility based in Minneapolis, Minnesota, Biovest is publicly- traded on the OTCQB(TM) Market with the stock-ticker symbol "BVTI", and is a majority-owned subsidiary of Accentia Biopharmaceuticals, Inc. (OTCQB: "ABPI"). Biovest, along with its subsidiaries, Biovax, Inc., AutovaxID, Inc., Biolender, LLC, and Biolender II, LLC, filed for Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Case No. 08-17796) on Nov. 10, 2008. Biovest emerged from Chapter 11 protection, and its reorganization plan became effective, on Nov. 17, 2010. Biovest International Inc., filed a petition for Chapter 11 reorganization (Bankr. M.D. Fla. Case No. 13-02892) on March 6, 2013, in Tampa, Florida. The new bankruptcy case was accompanied by a proposed reorganization plan supported by secured lenders owed about $38.5 million. Total debt is $44.9 million, with assets listed in a court filing as being valued at $4.7 million. About $5.4 million is owing to unsecured creditors, according to a court paper. BIRDSALL SERVICES: Trustee Seeks Liquidation Under Ch. 7 -------------------------------------------------------- Linda Chiem of BankruptcyLaw360 reported that bankrupt engineering firm Birdsall Services Group Inc., which recently pled guilty to criminal charges that it masked corporate campaign contributions to be eligible for government contracts, asked the New Jersey bankruptcy court to convert from Chapter 11 to Chapter 7. According to the report, Birdsall's court-appointed trustee Edwin H. Stier filed a motion seeking an order to convert the company's Chapter 11 bankruptcy reorganization to Chapter 7 to allow for liquidation, saying the $5.6 million sale of Birdsall's assets to California engineering firm Partner Assessment Corp. closed in June. About Birdsall Services Birdsall Services Group Inc., an engineering firm from Eatontown, New Jersey, filed for Chapter 11 protection (Bankr. D.N.J. Case No. 13-16743) on March 29, 2013, when the state attorney general indicted the business and obtained a court order seizing the assets. Birdsall was accused by the state of violating laws prohibiting so-called pay-to-play, where businesses make political contributions in return for government contracts. The state charged that the company arranged for individuals to make contributions and then reimbursed the employees. A company officer pleaded guilty last year to making political contributions disguised to appear as though made by individuals. The Chapter 11 petition filed in Trenton, New Jersey, disclosed assets of $41.6 million and liabilities totaling $27 million. Debt includes $3.6 million owing to a bank on a secured claim and $2.4 million in payables to trade suppliers. In April 2013, Birdsall reached a $3.6 million settlement that ended New Jersey's opposition to the company's bankruptcy and resolves the state's lawsuit aiming to seize Birdsall's assets. As part of the settlement, Edwin Stier, a member of Stier Anderson, was appointed as Chapter 11 trustee for Birdsall. BLOCKBUSTER INC: Weil's Expenses Draw Objection From Trustee ------------------------------------------------------------ Stewart Bishop of BankruptcyLaw360 reported that The U.S. trustee overseeing the bankruptcy of Blockbuster Inc. lodged an objection to Weil Gotshal & Manges LLP's bid for reimbursement of certain out-of-pocket expenses, taking issue with hours billed for timekeepers and other costs. According to the report, U.S. Trustee Tracy Hope Davis said she has identified several time entries by "transitionary timekeepers" who worked on the bankruptcy through May 2013, but Weil's expense application fails to explain why the service of these timekeepers was necessary and benefited the estate. About Blockbuster Inc. Blockbuster Inc., the movie rental chain with a library of more than 125,000 titles, along with 12 U.S. affiliates, initiated Chapter 11 bankruptcy proceedings with a pre-arranged reorganization plan in Manhattan (Bankr. S.D.N.Y. Case No. 10-14997) on Sept. 23, 2010. It disclosed assets of $1 billion and debts of $1.4 billion at the time of the filing. Martin A. Sosland, Esq., and Stephen Karotkin, Esq., at Weil, Gotshal & Manges, serve as counsel to the U.S. Debtors. Rothschild Inc. is the financial advisor. Alvarez & Marsal is the restructuring advisor with A&M managing director Jeffery J. Stegenga as chief restructuring officer. Kurtzman Carson Consultants LLC is the claims and notice agent. The Official Committee of Unsecured Creditors retained Cooley LLP as its counsel. In April 2011, Blockbuster conducted a bankruptcy court-sanctioned auction for all the assets. Dish Network Corp. won with an offer having a gross value of $320 million. The Debtor changed its name from Blockbuster Inc. to BB Liquidating Inc. after Dish purchased all assets, including the trade name. BLUE BUFFALO: S&P Raises Sr. Secured Debt Rating From 'B+' ---------------------------------------------------------- Standard & Poor's Ratings Services raised its rating on Blue Buffalo Co. Ltd. by one notch to 'B+' from 'B' and assigned a stable outlook. At the same time, S&P raised its senior secured debt rating for Blue Buffalo to 'BB' from 'B+', and revised its recovery rating to '1' from '2', indicating its expectation of very high (90-100%) recovery in the event of a payment default, given the company's increased EBITDA levels. "Blue Buffalo's financial risk profile has improved, and we expect the company to maintain adjusted leverage below 3x and a ratio of adjusted funds from operations to debt of about 20% through year- end 2013, while maintaining adequate liquidity," said Standard & Poor's credit analyst Jeffrey Burian. "Despite ongoing reinvestment in its business, the company is likely to sustain its improved operating performance and high margins, while continuing to increase its cash flow." "Our ratings on Blue Buffalo reflect our view that the company's financial risk profile is "aggressive" and its business risk profile is "vulnerable." Key credit factors in our business risk assessment include its narrow product focus; customer, supplier, geographic, and brand name concentration; and the company's small size relative to its financially stronger and larger competitors within its broader industry sector. We also considered Blue Buffalo's good market position and participation in the faster- growing natural segment of the U.S. pet food industry, as well as the somewhat nondiscretionary and recession-resistant nature of pet food," S&P added. S&P's assessment of Blue Buffalo's aggressive financial risk profile reflects the company's declining leverage yet very aggressive financial policy relating to its controlling ownership by a financial sponsor. BONDS.COM GROUP: Kazazian Held 10.5% Equity Stake at June 25 ------------------------------------------------------------ In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Kazazian Asset Management, LLC, and its affiliates disclosed that, as of June 25, 2013, they beneficially owned 28,571 shares of common stock of Bonds.com Group, Inc., representing 10.5 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/sx4JYx About Bonds.com Group Based in Boca Raton, Florida, Bonds.com Group, Inc. (OTC BB: BDCG) -- http://www.bonds.com/-- through its subsidiary Bonds.com, Inc., serves institutional fixed income investors by providing a comprehensive zero subscription fee online trading platform. The Company designed the BondStation and BondStationPro platforms to provide liquidity and competitive pricing to the fragmented Over- The-Counter Fixed Income marketplace. The Company differentiates itself by offering through Bonds.com, Inc., an inventory of more than 35,000 fixed income securities from more than 175 competing sources. Asset classes currently offered on BondStation and BondStationPro, the Company's fixed income trading platforms, include municipal bonds, corporate bonds, agency bonds, certificates of deposit, emerging market debt, structured products and U.S. Treasuries. Bonds.com Group disclosed a net loss of $6.98 million in 2012, as compared with a net loss of $14.45 million in 2011. The Company's balance sheet at March 31, 2013, showed $8.36 million in total assets, $5.75 million in total liabilities and $2.60 million in total stockholders' equity. EisnerAmper LLP, in New york, 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 a working capital deficiency and a stockholders' deficiency that raise substantial doubt about its ability to continue as a going concern. BRADFORD HOLDINGS: Case Summary & 2 Unsecured Creditors ------------------------------------------------------- Debtor: Bradford Holdings LLC 6188 W Edison Ln Bow, WA 98232 Bankruptcy Case No.: 13-16214 Chapter 11 Petition Date: July 5, 2013 Court: United States Bankruptcy Court Western District of Washington (Seattle) Judge: Marc Barreca Debtor's Counsel: Matthew W Anderson, Esq. LAW OFFICES OF MATTHEW W. ANDERSON, PLLC 119 1st Ave S Ste 320 Seattle, WA 98104 Tel: (206) 812-9570 Fax: (888) 293-0775 E-mail: manderson@mwa-law.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its two largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/wawb13-16214.pdf The petition was signed by David Cavanaugh, member/manager. CABLEVISION SYSTEMS: Fitch Affirms 'BB-' Issuer Default Rating -------------------------------------------------------------- Fitch Ratings has affirmed the 'BB-' Issuer Default Rating (IDR) assigned to Cablevision Systems Corporation (CVC) and its wholly owned subsidiary CSC Holdings LLC (CSCH). In addition, Fitch has affirmed specific issue ratings assigned to CVC and CSCH as outlined below. The Rating Outlook for all of CVC and CSCH's ratings has been revised to Negative from Stable. As of March 31, 2013, CVC had approximately $10.1 billion of debt outstanding on a consolidated basis. Key Rating Drivers -- CVC's credit and operating profile weakly position the company within the current rating category. -- The negative rating outlook encompasses a likely delay in expected improvement of CVC's credit profile. -- Fitch's expectation for near term debt reduction supports the current ratings. The Negative Outlook incorporates Fitch's belief that CVC's credit profile will be weakly positioned within the current ratings as the company attempts to offset rising programming and employee compensation costs with price increases and operational efficiency initiatives aimed at accelerating revenue growth and improving EBITDA margins. The low EBITDA margins coupled with higher capital expenditures will hamper the company's ability to deliver positive free cash flow during 2013 and result in leverage that is beyond expectations for the current rating category. Programming cost inflation and higher employee related compensation expense represent a significant and likely permanent shift in CVC's cost structure. Fitch believes that CVC will struggle to offset these incremental costs with price increases and cost initiatives resulting in EBITDA margins that lag its peer group. CVC lacks sufficient pricing power to pass the entire amount of programming costs increases on to its subscriber base, resulting in EBITDA margin pressure. CVC expects double digit programming cost inflation will remain with the company through the balance of 2013 and into 2014. Positively, in addition to pricing initiatives put in place during the first half of 2013, CVC plans to partially offset the cost inflation by driving costs out of other parts of its cost structure through reducing the transaction volume of its business and improve operational efficiencies. These actions are expected to lead to double digit sequential EBITDA growth during the second quarter and enhanced EBITDA margins for the remainder of 2013. Programming costs during first quarter 2013 (1Q'13) increased 12% over the same period last year due primarily to contractual rate increases, higher retransmission consent fees and the incremental programming costs related to the launch of new cable networks such as the NFL Network (3Q'12 launch) and additional foreign language programming. CVC anticipates capital expenditures will remain elevated compared to historical levels during 2013, but overall spending will be lower than 2012. Fitch expects capital expenditure priorities include the expansion of CVC's WI-FI network overlay including along key train routes and stations during 2013. Additionally, the company has upgraded its cable head-ends to facilitate the launch of its DVR Plus service. This service is the company's remote storage or cloud based DVR service. Lastly, the company is in the process of deploying its Optimum Programming Guide to its subscriber base. CVC intends to expand deployment of the guide during the course of 2013. The increased level of investment, while prudent from a competitive standpoint, together with the company's lackluster operating profile will diminish free cash flow generation relative to Fitch's prior expectations. CVC's leverage on a consolidated basis increased to 5.9x during the last 12 month (LTM) period ended March 31, 2013 when adjusted for the sale of Bresnan Broadband Holdings (Bresnan) and storm related costs. Fitch believes CVC management has the intent and capacity to reduce outstanding debt during 2013. Fitch estimates that CVC received approximately $865 million of cash from the Bresnan sale (proceeds after Bresnan debt repayment) and the finial allocation of cash from the Voom litigation settlement. The company has not disclosed the intended use of the cash, but Fitch expects a meaningful portion to be used for debt reduction. Depending on the level of debt reduction Fitch believes CVC's leverage metric can range between 6.5x and 6.0x as of year-end 2013 before strengthening somewhat to range between 5.9x and 5.5x as of year-end 2014. Fitch considers CVC's liquidity position and overall financial flexibility to be adequate given the current rating. The company's liquidity position is supported by cash on hand and available borrowing capacity from CSC Holdings, LLC's (CSCH) $1.5 billion revolver (expires April 2018). All $1.5 billion of borrowing capacity was available from CSCH's revolver as of March 31, 2013. In addition the company's liquidity is boosted by the $800 million of cash received from the sale of Bresnan Cable and the final allocation of the VOOM Litigation Settlement proceeds. During the short term, CVC's financial flexibility is constrained somewhat by management's decision to increase capital spending to improve operations and position the company for long-term success. The increased capital spending along with higher programming and compensation expenses will hamper the company's ability to continue generating free cash flow at a level commensurate with historical levels. Fitch does not expect the company to produce positive free cash flow during 2013 and believes that the company will generate nominal free cash flow (1% free cash flow margin) during 2014. CVC refinanced its credit facility during April 2013 extending its maturity profile and reducing the volume of maturities between 2013 and 2016. Scheduled maturities (excluding collateralized monetization transactions) consist of $32 million during the remainder of 2013, $273 million during 2014 and $183 million in 2015. CVC's conservative posture related to its share repurchase program while maintaining a consistent dividend is positive for the company's credit profile. Share repurchases were curtailed to $188.6 million during 2012 (versus $555.8 million in 2011) and the company did not repurchase any shares during the 1Q'13. As of March 31, 2013, the company had $455.3 million of availability remaining under its stock repurchase program. Rating Sensitivities: Key considerations that can lead to a stabilization of the current ratings include but are not limited to: -- Further strengthening of the company's credit profile and a sustained reduction of leverage to below 5.5x. -- Clear indications that pricing and cost reduction initiatives are producing desired revenue growth acceleration and EBITDA margin expansion. -- Positive free cash flow generation. -- Cablevision demonstrating that its operating profile will not materially decline in the face of competition and the soft economic recovery. Negative ratings actions would likely coincide with: -- The company's inability to realize the expected benefits of its operating strategies and strengthen its operating profile. Specifically, Fitch will be looking for mid-single-digit ARPU growth, cable segment operating margins returning to the mid- to-high 30% range and positive free cash flow generation. -- Fitch's belief that CVC's consolidated leverage will remain above 5.5x in the absence of a clear path to de-lever the company will likely spur a negative rating action. -- The re-initiation of aggressive share repurchases while leverage remains elevated. -- CVC's determination to use cash proceeds from the sale of Bresnan and Voom litigation settlement proceeds for a purpose other than meaningful debt reduction. Fitch has affirmed the following ratings with a Negative Outlook: Cablevision Systems Corporation -- IDR at 'BB-'; -- Senior unsecured debt at 'B-'. CSC Holdings LLC -- IDR at 'BB-'; -- Senior secured credit facility at 'BB+'; -- Senior unsecured debt at 'BB'. CAESARS ENTERTAINMENT: Bank Debt Trades at 10% Off -------------------------------------------------- Participations in a syndicated loan under which Caesars Entertainment Inc., is a borrower traded in the secondary market at 89.61 cents-on-the-dollar during the week ended Friday, July 12, 2013 according to data compiled by LSTA/Thomson Reuters MTM Pricing and reported in The Wall Street Journal. This represents an increase of 1.20 percentage points from the previous week, The Journal relates. Caesars Entertainment Inc. pays 525 basis points above LIBOR to borrow under the facility. The bank loan matures on Jan. 1, 2018. The bank debt carries Moody's B3 rating and Standard & Poor's B- rating. The loan is one of the biggest gainers and losers among 234 widely quoted syndicated loans with five or more bids in secondary trading for the week ended Friday. About Caesars Entertainment Caesars Entertainment Corp., formerly Harrah's Entertainment Inc. -- http://www.caesars.com/-- is one of the world's largest casino companies, with annual revenue of $4.2 billion, 20 properties on three continents, more than 25,000 hotel rooms, two million square feet of casino space and 50,000 employees. Caesars casino resorts operate under the Caesars, Bally's, Flamingo, Grand Casinos, Hilton and Paris brand names. The Company has its corporate headquarters in Las Vegas. Harrah's announced its re-branding to Caesar's on mid-November 2010. The Company incurred a net loss of $1.49 billion on $8.58 billion of net revenues for the year ended Dec. 31, 2012, as compared with a net loss of $666.70 million on $8.57 billion of net revenues during the prior year. The Company incurred a $823.30 million net loss in 2010. The Company's balance sheet at March 31, 2013, showed $27.47 billion in total assets, $28.03 billion in total liabilities, and a $560 million total deficit. * * * Caesars Entertainment carries a 'CCC' long-term issuer default rating, with negative outlook, from Fitch and a 'Caa1' corporate family rating with negative outlook from Moody's Investors Service. As reported in the TCR on Feb. 5, 2013, Moody's lowered the Speculative Grade Liquidity rating of Caesars to SGL-3 from SGL-2, reflecting declining revolver availability and Moody's concerns that Caesars' earnings and cash flow will remain under pressure causing the company's negative cash flow to worsen. In the May 7, 2013, edition of the TCR, Standard & Poor's said that it lowered its corporate credit ratings on Caesars and wholly owned subsidiary Caesars Entertainment Operating Co. (CEOC) to 'CCC+' from 'B-'. "The downgrade reflects weaker-than-expected operating performance in the first quarter, and our view that Caesars' capital structure may be unsustainable over the next two years based on our EBITDA forecast for the company," said Standard & Poor's credit analyst Melissa Long. CAFE CNN: Case Summary & 17 Largest Unsecured Creditors ------------------------------------------------------- Debtor: Cafe CNN Market, Inc. 15408 Northern Blvd, Ste 2A Flushing, NY 11354 Bankruptcy Case No.: 13-44152 Chapter 11 Petition Date: July 5, 2013 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Nancy Hershey Lord Debtor's Counsel: Lawrence F. Morrison, Esq. THE MORRISON LAW OFFICES, P.C. 87 Walker Street Floor 2 New York, NY 10013 Tel: (212) 620-0938 Fax: (646) 390-5095 E-mail: morrlaw@aol.com Estimated Assets: $100,001 to $500,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 17 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/nyeb13-44152.pdf The petition was signed by Lee Hee Yang Pak, president. CAPITOL BANCORP: Committee Objects to Investment Banker Employment ------------------------------------------------------------------ BankruptcyData reported that Capitol Bancorp's official committee of unsecured creditors filed with the U.S. Bankruptcy Court an objection to the motion of River Branch Capital for entry of an order authorizing its employment as investment banker for the Debtors. The committee explains, "By its Motion, River Branch Capital LLC ('River Branch') asks this court to enter an order approving an application filed -- and effectively abandoned -- by the Debtors six months ago. River Branch does not have standing to move for its own retention as investment banker to the Debtors, as the United States Bankruptcy Code (the 'Bankruptcy Code') and the Federal Rules of Bankruptcy Procedure (the 'Bankruptcy Rules') invest that power solely in the Debtors. As an apparent alternative to its actual retention, River Branch seeks allowance as an administrative expense of fees and expenses in the amount of $124,942.00, of which $100,000.00 represents a fee earned entirely for prepetition services to CBC and FCC (who, at that time, were not debtors in bankruptcy proceedings). River Branch has not met its burden of proving that the fees and expenses requested are entitled to administrative expense status under the Bankruptcy Code and Sixth Circuit case law. Fees earned prior to the petition date cannot be granted administrative expense status, and River Branch has not demonstrated that its services benefited the estates. Indeed, at this point, the agreements between River Branch and the Debtors are nothing more than unassumed executory contracts, which cannot be enforced by River Branch, and which have now expired by their own terms. Finally, the Motion is not timely, as River Branch seeks retroactive approval of its employment reaching back approximately eleven months. For all these reasons, the Motion must be denied," the report said, citing court documents. About Capitol Bancorp Capitol Bancorp Ltd. and Financial Commerce Corporation filed voluntary Chapter 11 bankruptcy petitions (Bankr. E.D. Mich. Case Nos. 12-58409 and 12-58406) on Aug. 9, 2012. Capitol Bancorp -- http://www.capitolbancorp.com/-- is a community banking company with a network of individual banks and bank operations in 10 states and total consolidated assets of roughly $2.0 billion as of June 30, 2012. CBC owns roughly 97% of FCC, with a number of CBC affiliates owning the remainder. FCC, in turn, is the holding company for five of the banks in CBC's network. CBC is registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, 12 U.S.C. Sec. 1841, et seq., and trades on the OTCQB under the symbol "CBCR." Lawyers at Honigman Miller Schwartz and Cohn LLP represent the Debtors as counsel. John A. Simon, Esq., at Foley & Lardner LLP, represents the Official Committee of Unsecured Creditors as counsel. In its petition, Capitol Bancorp scheduled $112,634,112 in total assets and $195,644,527 in total liabilities. The petitions were signed by Cristin K. Reid, corporate president. The Company's balance sheet at Sept. 30, 2012, showed $1.749 billion in total assets, $1.891 billion in total liabilities, and a stockholders' deficit of $141.8 million. Prepetition, the Debtor arranged a reorganization plan that was accepted by the requisite majorities of creditors and equity holders in all classes. Problems arose when affiliates of Valstone Partners LLC declined to proceed with a tentative agreement to fund the reorganization by paying $50 million for common and preferred stock while buying $207 million in face amount of defaulted commercial and residential mortgages. CENGAGE LEARNING: Hiring Approvals Sought ----------------------------------------- BankruptcyData reported that Cengage Learning filed with the U.S. Bankruptcy Court motions to retain: -- Kirkland & Ellis and Kirkland & Ellis International (Contact: Jonathan S. Henes) as attorney at these hourly rates: partner at $655 to $1,150, of counsel at $450 to $1,150, associate at $430 to $790 and paraprofessional at $150 to $335; -- Alvarez & Marsal North America (Contact: William C. Kosturos) as restructuring advisor at these hourly rates: for restructuring & general services - managing director at $675 to $875, director at $475 to $675, analyst/associate at $275 to $475; for claims management services - managing director at $650, director at $450 to $550, analyst/consultant at $275 to $390; and -- Lazard Freres & Co. (Contact: David S. Kurtz) as investment banker for a monthly fee of $200,000 and a restructuring fee, payable upon consummation of a restructuring, of $10 million. About Cengage Learning Stamford, Connecticut-based Cengage Learning -- http://www.cengage.com/-- provides innovative teaching, learning and research solutions for the academic, professional and library markets worldwide. Cengage Learning's brands include Brooks/Cole, Course Technology, Delmar, Gale, Heinle, South Western and Wadsworth, among others. Apax Partners LLP bought Cengage in 2007 from Thomson Reuters Corp. in a $7.75 billion transaction. The acquisition was funded in part with $5.6 billion in new debt financing. Cengage Learning Inc. filed a petition for Chapter 11 reorganization (Bankr. S.D.N.Y. Case No. 13-bk-44106) on July 2, 2013, in Brooklyn, New York, after signing an agreement where holders of $2 billion in first-lien debt agree to support a reorganization plan. The plan will eliminate more than $4 billion of $5.8 billion in debt. First-lien lenders who signed the so-called plan-support agreement include funds affiliated with BlackRock Inc., Franklin Mutual Adviser LLC, KKR & Co. and Oaktree Capital Management LP. Second- lien creditors and holders of unsecured notes aren't part of the agreement. The Debtors have tapped Kirkland & Ellis LLP as counsel, Lazard Freres & CO. LLC as financial advisor, Alvarez & Marsal North America, LLC, as restructuring advisor, and Donlin, Recano & Company, Inc., as claims and notice agent. CHAMPION INDUSTRIES: Unit Sells Newspaper Operations for $10MM -------------------------------------------------------------- Champion Industries, Inc.'s wholly owned subsidiary Champion Publishing sold substantially all the assets of its newspaper operations headquartered in Huntington, West Virginia, to HD Media Company, LLC, pursuant to an Asset Purchase Agreement among Champion, Seller and Buyer dated July 12, 2013. This entity includes as an investor Mr. Douglas Reynolds, son of Chairman & CEO Marshall T. Reynolds. Champion's investment advisor had conducted a nationwide marketing process for the sale of the Herald-Dispatch, which resulted in one other current offer. Champion's board of directors, in consultation with its independent advisors, determined that Mr. Douglas Reynolds' offer was the better offer both in terms of price and conditions. The Seller received $10,000,000 or approximately $9,700,000 net of selling commissions and pro-rated taxes. The proceeds of this transaction will be utilized to pay down term debt and the revolving credit line at the discretion of the Administrative Agent. The Agreement contains representations and warranties, covenants and indemnification provisions common to transactions of its nature. About Champion Industries Champion Industries, Inc., is engaged in the commercial printing and office products and furniture supply business in regional markets east of the Mississippi River. The Company also publishes The Herald-Dispatch daily newspaper in Huntington, West Virginia with a total daily and Sunday circulation of approximately 23,000 and 28,000. Arnett Foster Toothman PLLC, in Charleston, West Virginia, expressed substantial doubt about Champion Industries' ability to continue as a going concern following the fiscal 2012 annual results. The independent auditors noted that the Company has suffered recurring losses from operations and has been unable to obtain a longer term financing solution with its lenders. The Company reported a net loss of $22.9 million in fiscal year ended Oct. 31, 2012, compared with a net loss of $4.0 million in fiscal 2011. Champion reported a $3.5 million net loss for the quarter ended Jan. 31 on revenue of $22.6 million. As of April 30, 2013, the Company had $41.96 million in total assets, $47.70 million in total liabilities and a $5.74 million total shareholders' deficit. COACH AMERICA: Settles Bridgestone's $1MM Tire Claim ---------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that in a major step toward closing its Chapter 11 case, the estate of Coach America Inc. settled a dispute with Bridgestone Americas Tire Operations LLC over $1 million for tires Bridgestone says kept the bus company rolling while it was looking to sell. According to the report, under the settlement announced during a hearing in the U.S. Bankruptcy Court for the District of Delaware, Bridgestone will get $400,000 from a nearly $1.2 million sum the estate had set aside in reserve over the dispute. When Judge Kevin Gross of the U.S. Bankruptcy Court for the District of Delaware entered an order dismissing the Chapter 11 cases of the Coach America and its debtor affiliates, a holdback amount is reserved to pay, among other things, the ordinary course trade payables to Bridgestone Americas, incurred by the Debtors between the Petition Date and the closing date of the last sale of the Debtors' assets. About Coach America Coach America -- http://www.coachamerica.com/-- was the largest tour and charter bus operator and the second largest motorcoach service provider in the U.S. Coach America operated the second largest fleet in the U.S. with over 3,000 vehicles, including over 1,600 motorcoaches, primarily under the Coach America, American Coach Lines and Gray Line brands. Coach America Holdings Inc. and its U.S.-based subsidiaries filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 12-10010) on Jan. 3, 2012. Judge Kevin Gross presides over the case. Coach America's investment banker is Rothschild Inc., legal counsel are Lowenstein Sandler PC and Polsinelli Shughart, and its financial advisor is Alvarez & Marsal North America LLC. BMC Group Inc. serves as the Debtors' notice, claims and balloting agent. Coach America disclosed $274 million in assets and $402 million in liabilities as of Nov. 30, 2011. Liabilities include $318.7 million owing on first-lien debt with JPMorgan Chase Bank NA as agent. Second-lien debt, with Bank of New York Mellon Corp. as agent, is $30.5 million. Attorneys for JPMorgan, as Prepetition First Lien Agent and DIP Agent, are Brian M. Resnick, Esq., at Davis Polk & Wardwell LLP; and Mark D. Collins, Esq., at Richards, Layton & Finger, P.A. In February 2012, Coach America named Laura Hendricks, the company's vice president for business development, as its new chief executive. Judge Kevin Gross, in June 2013, entered an order dismissing the Chapter 11 cases of Coach Am Group Holdings Corp., et al. COUDERT BROTHERS: Jones Day, Dechert Deny They Owe Partner Profits ------------------------------------------------------------------ Kurt Orzeck of BankruptcyLaw360 reported that Jones Day and Dechert LLP told the Second Circuit they didn't owe Coudert Brothers LLP any profits for handling client matters pending on the bankrupt firm's dissolution date, because New York state law doesn't give Coudert property rights over the matters. According to the report, while Coudert's former partners worked on the unfinished matters when they joined Jones Day and Dechert, the matters were no longer Coudert's business, since they were billed on an hourly basis and the clients chose new representation. About Coudert Brothers Coudert Brothers LLP was an international law firm specializing in complex cross-border transactions and dispute resolution. The firm had operations in Australia and China. Coudert filed for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 06-12226) on Sept. 22, 2006. John E. Jureller, Jr., Esq., and Tracy L. Klestadt, Esq., at Klestadt & Winters, LLP, represented the Debtor in its restructuring efforts. Brian F. Moore, Esq., and David J. Adler, Esq., at McCarter & English, LLP, represented the Official Committee of Unsecured Creditors. Coudert scheduled total assets of $30.0 million and total debts of $18.3 million as of the Petition Date. The Bankruptcy Court in August 2008 signed an order confirming Coudert's chapter 11 plan. The Plan contemplated on paying 39% to unsecured creditors with $26 million in claims. DENTAL CARE: A.M. Best Affirms 'B' Financial Strength Rating ------------------------------------------------------------ A.M. Best Co. has upgraded the issuer credit rating (ICR) to "bb+" from "bb" and affirmed the financial strength rating of B (Fair) of Dental Care Plus, Inc. (DCP) (Cincinnati, OH). The outlook for both ratings is positive. The ICR upgrade reflects DCP's positive operating performance and improved capitalization. DCP reported favorable underwriting net income in 2012, reflecting the company's highest historical operating performance. Risk-adjusted capital scores improved noticeably in 2012 as a result of favorable earnings and moderate premium revenue increases over the last two years. Furthermore, DCP's capitalization also improved in 2012, due to the significant amount of accreted earnings and a capital contribution of $300,000. Offsetting these positive rating factors is the highly competitive business environment in which DCP operates, where both local and national multiline insurers vie for the profitable dental business. DCP's business is concentrated in Ohio. However, the company has made strides to improve the quality of its membership mix and to increase market penetration in the surrounding states of Indiana and Kentucky, where it holds operating licenses. Efforts to diversify product designs and to strengthen its information and technology infrastructure are also well on the way. DCP is hedging its exposure to small group membership depletion by developing individual dental products and entering into relationships with other like-minded provider systems. DCP also has lent its expertise to various organizations instrumental in the formation of policies for health exchanges, which forms the basis for the new health care reform business environment. Key rating drivers that could lead to positive rating actions for DCP include continued favorable trends in revenues and earnings, capital growth and improvement in the loss ratio. Key factors that could lead to negative rating actions include loss of membership, unfavorable operating performance or weakened risk- adjusted capital. DETROIT, MI: City Workers, Retirees Push Back on Pensions --------------------------------------------------------- Reuters reported that with the threat of a city bankruptcy looming, Detroit city workers and retirees are pushing back against the state-appointed emergency manager, filing lawsuits to limit his options and refusing to accept demands to keep details of their discussions secret. According to the report, one lawsuit, filed in Ingham County Circuit Court in the state capital Lansing, seeks to stop Governor Rick Snyder from allowing the emergency manager, Kevyn Orr, to file Chapter 9 municipal bankruptcy. That lawsuit claims Orr's plan to significantly cut vested pensions would violate strong protections in the Michigan constitution for retirement benefits of public-sector workers. A second Detroit employee lawsuit challenges the 2012 Michigan law that created the emergency manager position, the report related. In his June 14 proposal to creditors, Orr listed pensions as unsecured debt of the city, the report recalled. Payment on pensions, retiree healthcare and $641 million of general obligation bonds all would be made from the city's proceeds from $2 billion of notes Orr plans to sell as part of his restructuring plan. The plan, if enacted, would be expected to result in significant cuts in pension payments, the report said. Although the city currently lists $643.7 million in unfunded pension liabilities, Orr in his report said the number is closer to $3.5 billion if "more realistic assumptions" are taken into account. E-DEBIT GLOBAL: Deploys "E-Debit/Winsoft" E-Payment Platform ------------------------------------------------------------ E-Debit Global Corporation announced the deployment of the E- Debit/Winsoft Electronic Payment Software Platform "In furtherance to guidance issued at our last shareholder meeting and the Corporation's recently announced reorganization of holdings across the subsidiary spectrum, we are well underway in the process of maximizing the value of our current subsidiary assets in order to further those substantial business and corporate platforms which the Corporation has developed over the past seven years," advises Doug Mac Donald, the Corporation's president and CEO. "Our most recent announcements of our financial and operational partnering effort has allowed for the expansion and growth of our subsidiary business operations which allows for the Corporation to move back to our originating business model which was and will now continue to be the supplying of value added investment and management support needed to build and grow the great opportunities which we believe meet or will exceed our expectations within the financial services business segment. Our strength has been our ability to supply or bring this support to our current subsidiaries and then hand over the ongoing daily business operations to a motivated ownership and management group while retaining a continual equity and revenue position for the Corporation's participation in the development of the business operations. With the recent partner participation of electronic payment and card product systems developer, Winsoft Technology Solutions Inc. we have the technology partner which is necessary to build on the payment platform which the Corporation's E-Debit International Inc. subsidiary has been developing and allows for the expansion of the E-Debit card product program and our other gift platforms which we have held in development during the past several years. Since our partnership announcement on May 31, 2013 we are pleased to announce the deployment of our joint venture e-debit electronic payment software platform to facilitate acceptance of the "e- debit" brand debit card with our wholly owned switch operations Westsphere Systems Inc. There has been a major market transition occurring in the historical debit and credit card market place, and with chip based EMV introduction into the VISA, MasterCard and Canadian Interac networks our joint venture electronic payment platform has given E-Debit the opportunity to maximize the value of our participation within this business segment. The significance of this development will be substantial to the Corporation and will be immediately felt," added Mr. Mac Donald. About E-Debit Global Calgary, Canada-based E-Debit Global Corporation's primary business is the sale and operation of cash vending (ATM) and point of sale (POS) machines in Canada. As reported in the TCR on April 23, 2012, Schumacher & Associates, Inc., in Littleton, Colorado, expressed substantial doubt about E- Debit Global's ability to continue as a going concern, citing the Company's net losses for the years ended Dec. 31, 2012, and 2011, and working capital and stockholders' deficits at Dec. 31, 2012, and 2011. The Company's balance sheet at March 31, 2013, showed US$1.2 million in total assets, US$3.4 million in total liabilities, and a stockholders' deficit of US$2.2 million. EAST COAST BROKERS: Gerard McHale Named Chapter 11 Trustee ---------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida has approved the appointment of a chapter 11 trustee for East Coast Brokers & Packers, Inc., et al. On June 20, 2013, the U.S. Trustee appointed Gerard A. McHale, Jr. to serve as Chapter 11 trustee, and upon application by the U.S. Trustee, on June 21, the appointment was approved by the Court. With the appointment of a Chapter 11 trustee, the Court on July 2 entered an order ruling that a separate request by the U.S. Trustee for a Chapter 11 trustee or dismissal is "denied as moot." The judge also ruled that the motion filed by MLIC Asset Holdings LLC and MLIC CB Holdings LLC to terminate the Debtor's exclusivity and the Debtor's motion to extend its deadline to file a plan are "denied as moot." The MLIC entities had asked the Bankruptcy Court to appoint a Chapter 11 trustee, or, in the alternative, dismiss the Debtors' Chapter 11 cases. According to the MLIC entities, the Debtors, among other things, had mishandled the potential rents from employees, failed to pay taxes, failed to maintain insurance, has inadequate security regarding the Debtors' personal and real property, and delayed the filing of schedules and reports required under the Bankruptcy Code. About East Coast Brokers East Coast Brokers & Packers, Inc., along with four related entities, sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 13-02894) in Tampa, Florida, on March 6, 2013. East Coast Brokers & Packers disclosed $12,663,307 in assets and $75,181,975 in liabilities as of the Chapter 11 filing. Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, serves as counsel to the Debtors. EAST COAST BROKERS: Ch.11 Trustee Taps Own Firm as Accountant ------------------------------------------------------------- Gerard A. McHale, Jr., the duly appointed and acting Chapter 11 Trustee for East Coast Brokers & Packers, Inc., et al., asks the Bankruptcy Court for permission to employ his own firm, Gerard A. McHale, Jr., P.A., as accountants. The firm will, among other things, provide these services: a. review of all financial information prepared by Debtors or their accountants, including, but not limited to a review of all of the Debtors' financial information as of the date of the Petition Date, the Debtors' assets and liabilities, and their secured and unsecured creditors; b. review and analysis of the organizational structure of and financial interrelationships among the Debtors and their affiliates and insiders, including a review of the books of such companies or persons as may be requested; and c. review and analysis of transfers to and from the Debtors to third parties, both pre-petition and post-petition. McHale PA has agreed to perform those services at the ordinary and usual hourly billing rates of its members who will perform services in this matter. McHale PA will incur out-of-pocket disbursements in the rendition of the services for which it shall seek reimbursement. The Trustee says that McHale PA neither holds nor represents any interest adverse to the estates in the matters upon which it is to be employed, is a "disinterested person" as that term is defined by 11 U.S.C. Sec. 101 (14) and 327(a) and (d), and its employment would be in the best interests of the estates and their creditors. About East Coast Brokers East Coast Brokers & Packers, Inc., along with four related entities, sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 13-02894) in Tampa, Florida, on March 6, 2013. East Coast Brokers & Packers disclosed $12,663,307 in assets and $75,181,975 in liabilities as of the Chapter 11 filing. Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, serves as counsel to the Debtors. In June 2013, the bankruptcy court approved the appointment of Gerard A. McHale, Jr. to serve as Chapter 11 trustee. MLIC Asset Holdings LLC and MLIC CB Holdings LLC asked the Bankruptcy Court to appoint a Chapter 11 trustee, or, in the alternative, dismiss the Debtors' Chapter 11 cases. According to the MLIC entities, the Debtors, among other things had mishandled the potential rents from employees, failed to pay taxes, failed to maintain insurance, has inadequate security regarding the Debtors' personal and real property, and delayed the filing of schedules and reports required under the Bankruptcy Code. EAST COAST BROKERS: Trustee Hires Berger Singerman as Counsel ------------------------------------------------------------- Gerard A. McHale, Jr., the duly appointed and acting Chapter 11 Trustee in the bankruptcy cases of East Coast Brokers & Packers, Inc., et al., asks the Bankruptcy Court for permission to employ Berger Singerman LLP as counsel. Berger Singerman will, among other things, consult with the Trustee concerning the administration of these cases, to investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors, and assist the Trustee in other financial matters. The current hourly rates for professionals at Berger Singerman are: Professional Rates ----------- ------ Attorneys $250 to $625 of-counsel $225 associate $495 legal assistants $75 to $210 paralegals $75 to $210 The hourly rate of Jordi Guso and Brian G. Rich, the shareholders who will be principally responsible for the firm's representation of the Chapter 11 Trustee, are $595 and $545, respectively. Mr. Rich attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Jordi Guso, Esq. Brian G. Rich, Esq. BERGER SINGERMAN LLP 1450 Brickell Avenue, Suite 1900 Miami, FL 33131 Tel: (305) 755-9500 Fax: (305) 714-4340 - and - 125 S. Gadsden Street, Suite 300 Tallahassee, FL 32301 Tel: (850) 561-3010 Fax: (850) 561-3013 E-mal: jguso@bergersingerman.com brich@bergersingerman.com About East Coast Brokers East Coast Brokers & Packers, Inc., along with four related entities, sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 13-02894) in Tampa, Florida, on March 6, 2013. East Coast Brokers & Packers disclosed $12,663,307 in assets and $75,181,975 in liabilities as of the Chapter 11 filing. Scott A. Stichter, Esq., at Stichter, Riedel, Blain & Prosser, in Tampa, serves as counsel to the Debtors. In June 2013, the bankruptcy court approved the appointment of Gerard A. McHale, Jr. to serve as Chapter 11 trustee. MLIC Asset Holdings LLC and MLIC CB Holdings LLC asked the Bankruptcy Court to appoint a Chapter 11 trustee, or, in the alternative, dismiss the Debtors' Chapter 11 cases. According to the MLIC entities, the Debtors, among other things had mishandled the potential rents from employees, failed to pay taxes, failed to maintain insurance, has inadequate security regarding the Debtors' personal and real property, and delayed the filing of schedules and reports required under the Bankruptcy Code. EASTMAN KODAK: Shareholders Renew Bid for Equity Committee ---------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that an Eastman Kodak Co. shareholder renewed an attempt to appoint an official equity committee in the fallen photography company's bankruptcy case, arguing that common shareholders have been unfairly cast aside in Kodak's restructuring efforts. According to the report, Ahsan Zia of Tinton Falls, N.J., on behalf of himself and other noninsider shareholders, argued in a court filing that U.S. Bankruptcy Judge Allan L. Gropper should reconsider his previous denial of an equity committee, saying the interests of the shareholders have not been adequately represented throughout the bankruptcy proceedings. 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: STWB Opposes Kodak's Bid to Estimate Claims ---------------------------------------------------------- STWB Inc. is blocking efforts by Eastman Kodak Co. to get court approval to estimate certain claims for purposes of voting on its Chapter 11 reorganization plan. Kodak filed a motion on June 28 to allow each of the claims of STWB and 15 other creditors in the amount of $1 solely for voting purposes. Kodak said the amounts asserted by the creditors do not accurately represent the potential liability of the company for those claims. In a July 10 filing, STWB argued the motion contravenes the claim allowance process under U.S. bankruptcy law, and would deprive the company of its rights without due process if granted by the bankruptcy court. According to STWB, Kodak could file an objection if it wanted to pursue a "good faith" dispute to the claims. "Kodak presumably has not done so because an objection would entitle STWB to meaningful discovery, a full evidentiary hearing and other due process rights," STWB said, adding that an objection would also provide it with the option of requesting a legitimate estimation hearing. STWB, one of Kodak's largest unsecured creditors, asserts a $250 million claim against the company. Meanwhile, Papst Licensing GmbH & Co. KG and Profectus Technology Inc. said they do not oppose the estimation of their claims for voting purposes. Both companies, however, suggested that a provision be added to the proposed order that would protect their rights with respect to future proceedings concerning their unsecured claims against Kodak. Papst Licensing asserts a $699.251 million claim while Profectus asserts a $3 million claim, which stems from a patent infringement lawsuit it filed against Kodak. The lawsuit was automatically halted by Kodak's bankruptcy filing in January 2012. 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: Bank Hapoalim Reserves Rights Under Default Notice ----------------------------------------------------------------- The Bank Hapoalim B.M. has notified Elbit Imaging Ltd. that it intends to reserve all of its rights under the acceleration notice it provided to the Company on June 5, 2013, and that any plan of arrangement of the Company's outstanding unsecured financial debt will not derogate from those rights. On June 5, 2013, Elbit Imaging received a letter from Bank Hapoalim demanding repayment within seven days of the outstanding balance of approximately $58.15 million due primarily under the loans made by the Bank to the Company, without prejudicing its right under any other loan facility to which the Company is a party as a guarantor or otherwise. The Bank stated that it was taking this action in light of the Company's alleged breaches under the Loans, including, inter alia, non-payment to the Bank on March 31, 2013, of approximately $14.5 million, failure to satisfy certain financial covenants under the Loans, adverse change in the financial status of the Company etc. In addition, the Bank has stated that it had offset a deposit in the amount of approximately $7.9 million in the Bank's accounts against the Loans. Elbit Imaging asked the Court to issue a temporary restraining order against the Bank prohibiting the Bank from taking any action in accordance with the acceleration notice. Rather than grant the Company's motion ex parte, the Court ordered the Bank, the Official Receiver and the Legal Advisor to the Government of the State of Israel to respond to the Company's motion no later than June 17, 2013, and ordered the Company to file its primary claim by that date. 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." ENDEAVOUR INTERNATIONAL: Rochelle Production Starts September ------------------------------------------------------------- Endeavour International Corporation furnished these information discussed in the Company's conference call held on July 10, 2013: * At the Rochelle field located in the UK sector of the North Sea, the W-1 well has been successfully drilled, completed and flow tested. The final pipe spool pieces have been installed connecting the well to the subsea pipeline infrastructure to the Scott platform. The field is ready to produce. * The owners of the Scott platform will commence a shutdown period starting on July 11, 2013. The shutdown period is expected to last six to eight weeks to complete the planned work program. Due to the timing of this shutdown, first production at the Rochelle field is now expected in September 2013. About Endeavour International Houston-based Endeavour International Corporation (NYSE: END) (LSE: ENDV) is an oil and gas exploration and production company focused on the acquisition, exploration and development of energy reserves in the North Sea and the United States. For the year ended Dec. 31, 2012, the Company incurred a net loss of $126.22 million, as compared with a net loss of $130.99 million during the prior year. The Company's balance sheet at March 31, 2013, showed $1.50 billion in total assets, $1.36 billion in total liabilities, $43.70 million in series C preferred stock, and $90.30 million in total stockholders' equity. * * * As reported by the TCR on March 5, 2013, Moody's Investors Service downgraded Endeavour International Corporation's Corporate Family Rating to Caa3 from Caa1. Endeavour's Caa3 CFR reflects its weak liquidity, small production and proved reserve scale, geographic concentration and the uncertainties regarding its future performance given the inherent execution risks related to its offshore North Sea operations for a company of its size. In the Feb. 22, 2013, edition of the TCR, Standard & Poor's Ratings Services lowered its corporate credit rating on Houston, Texas-based Endeavour International Corp. (Endeavour) to 'CCC+' from 'B-'. The rating action reflects S&P's expectation that Endeavour could have insufficient liquidity to meet its needs due to the delay in production from its Rochelle development. ENDICOTT INTERCONNECT: Seeks Ch. 11 After $100MM Loss ----------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that an Endicott, N.Y.-based electronics packaging supplier that catered to IBM Corp. and the U.S. Department of Defense sought Chapter 11 bankruptcy protection after suffering $100 million in operating losses in the last four years. According to the report, Endicott Interconnect Technologies Inc. said in court documents that its revenues have dropped from a high of $414 million in 2008 to less than an estimated $100 million for 2013 thanks to increased competition and reduced contract opportunities with the federal government as a result of the sequestration. EQUIPMENT ACQUISITION: Court to Dismiss Suits v. 11 Banks --------------------------------------------------------- Bankruptcy Judge Timothy A. Barnes said he would dismiss the second amended version of complaints filed separately by William A. Brandt, Jr., solely in his capacity as Plan Administrator for Equipment Acquisition Resources, Inc., against 11 financial institutions. The defendants are: 1. American Bank, FSB, Adv No. 11-02200 2. The CIT Group/Equipment Financing, Inc., Adv No. 11-02203 3. IBM Credit, LLC, Adv No. 11-02227 4. KLC Financial, LLC, et al., Adv No. 11-02222 5. Leasing One Corporation, Adv. No. 11-02224 6. Pentech Financial Services, Inc., Adv No. 11-02231 7. People's Capital and Leasing Corporation, Adv No. 11-02233 8. PlainsCapital Leasing, LLC, Adv No. 11-02236 9. Suntrust Leasing Corporation, Adv No. 11-02201 10. TD Banknorth Leasing Corporation, Adv No. 11-02582 11. U.S. Bancorp, Inc., et al., Adv No. 11-02196 Filed in October 2012, the Second Amended Complaints allege avoidance and fraudulent conveyance claims against the defendants. On review of the second round of motions to dismiss the Complaints, Judge Barnes is unconvinced that the plaintiff was able to address succinctly the badges of fraud allegedly applicable in the Complaints. The Plaintiff was given until July 6, 2013, to amend the complaints to satisfy F.R.C.P. Rule 9(b), otherwise the Second Amended Complaints were to be dismissed July 8. A sample of Judge Barnes' identical Memorandum Decision dated June 6, 2013 is available at http://is.gd/cUjnOb About Equipment Acquisition Palatine, Illinois-based Equipment Acquisition Resources, Inc., operated in the semiconductor equipment sales and servicing industry. It was designed to operate as a refurbisher of special machinery, a manufacturer of high-end technology parts, and a process developer for the manufacture of high-technology parts. The bulk of EAR's stated revenue derived from refurbishing and selling high-tech machinery; it was set up to purchase high-tech equipment near the end of its useful life at prices that were low relative to the cost of new units, and then refurbish using a propriety process the equipment for sale to end-users at substantial gross margins. EaR engaged in a massive fraud from 2005 to 2009. That fraud included, but was not limited to, selling semiconductor equipment at inflated prices, leasing the equipment back, misrepresenting the value of the equipment, and pledging certain pieces of equipment multiple times to various creditors to secure financing. It owned 2,000 pieces of semiconductor manufacturing equipment. First Premier Capital LLC, claiming to be owed $20 million, alleged that the scheme has cost creditors up to $175 million. EAR filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 09-39937) on Oct. 23, 2009. Barry A. Chatz, Esq., at Arnstein & Lehr LLP, served as the Company's counsel. The Company estimated $10 million to $50 million in assets and $100 million to $500 million in liabilities in its petition. Unsecured creditors were owed about $102 million. EVEN ST PRODUCTIONS: Fires Back at Sly Stone's Former Manager ------------------------------------------------------------- Lance Duroni of BankruptcyLaw360 reported that the two companies placed into bankruptcy by Sly Stone's former manager accused the funk legend of "shotgun style" litigation that drained their resources and put Stone in a position to wrest control of the rights to his music on the cheap. According to the report, last month, Stone, whose real name is Sylvester Stewart, moved to dismiss the bankruptcy cases of Even Street Productions Ltd. and Majoken Inc., owned by his former manager Jerry Goldstein. Sly Stone, et al., are represented by: David J. Richardson, Esq. Laura L. Buchanan, Esq. RICHARDSON BUCHANAN PC 2301 Hyperion Avenue, Ste. A Los Angeles, CA 90027 Tel: 323-686-5400 Fax: 323-686-5403 E-mail: djr@richardsonbuchanan.com llb@richardsonbuchanan.com Even St. Productions Ltd. and Majoken, Inc. sought Chapter 11 protection (Bankr. C.D. Cal. Case Nos. 13-24363 and 13-24389) on May 31, 2013, in Los Angeles. Krikor J. Meshefejian, Esq., and David L. Neale, Esq., at Levene Neale Bender Rankin & Brill, LLP, serve as counsel to the Debtor. Even St. and Majoken each estimated assets and debts of $1 million to $10 million. EVERGREEN OIL: Court Okays Buxbaum HCS as Financial Advisor ----------------------------------------------------------- Evergreen Oil, Inc., obtained authority from the U.S. Bankruptcy Court for the Central District of California to employ Buxbaum HCS, LLC, as financial advisor. As reported by the Troubled Company Reporter on June 4, 2013, the Debtors, with the assistance of their proposed exclusive investment banker, Cappello Capital Corp., intend to market and sell EEHI's stock in EOI, or, subject to certain conditions, all or substantially all of EOI's operating assets to a qualified buyer. The proceeds of the sale of EEHI's stock in EOI will then be used to repay EOI's creditors. Buxbaum will, among other things: a. assist the Debtors with the preparation of their schedules of assets and liabilities and statements of financial affairs; b. prepare financial reports and other documents required by the Office of the U.S. Trustee, including, without limitation, monthly operating reports and disbursement reports; and c. assist the Debtors and their staff in compiling due diligence materials in connection with the marketing and sale of the assets; The Debtors proposes to pay Buxbaum a postpetition "evergreen" retainer of $25,000, which will be maintained during the period that Buxbaum is providing services to the Debtors and their estates. The Debtors will also make weekly payments to Buxbaum for services rendered during the preceeding week(s), in accordance with the budget approved by the DIP Lender and the Court. Buxbaum will be permitted to draw down from the retainer to pay for services rendered to the Debtors. The firm's Anthony Fidaleo and Clegg Porter will be the professionals primarily responsible for providing financial advisory services to the Debtors. The hourly rate for both Mr. Fidaleo and Mr. Porter is $175. About Evergreen Oil Headquartered in Irvine, California, with facilities located in Newark and Carson, California, Evergreen Oil Inc. is one of the largest waste oil collectors in California, and the only oil re-refining operation in California. Founded in 1984, EOI is also a major provider of hazardous waste services, offering customers across California a full range of environmental services to handle all of their waste management needs. Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Case Nos. 13-13163 and 13-13168) on April 9, 2013, in Santa Ana California. The Debtors have tapped Levene, Neale, Bender, Yoo & Brill L.L.P. as bankruptcy counsel; Jeffer, Mangels Butler & Mitchell L.L.P. as special corporate counsel effective; and Cappello Capital Corp. as exclusive investment banker. The Debtors each estimated assets and debts of $50 million to $100 million. EVERGREEN OIL: Can Hire Greenspan as Insurance Consultant --------------------------------------------------------- Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc., sought and obtained approval from the U.S. Bankruptcy Court for the Central District of California to employ Greenspan Adjusters International as insurance consultant. Greenspan will advise and assist the Debtors in the measurement and documentation of the Debtors' loss resulting from a fire which occurred at the Debtors' facility located at 6880 Smith Avenue, Newark, California on March 29, 2011, and to present the Debtors' claim(s) to the Debtors' insurance companies and/or others for loss and damages resulting from such fire. Greenspan will be paid a contingency fee equal to 6% of the amount paid by the Debtors' insurance companies, or otherwise recovered, plus such necessary expenses as approved by the Debtors. The Debtors will pay the contingency fee to Greenspan on all monies received, including advance payments, when actually received by the Debtors. Gary Johnson, co-President of Greenspan, assures the Court that Buxbaum is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About Evergreen Oil Headquartered in Irvine, California, with facilities located in Newark and Carson, California, Evergreen Oil Inc. is one of the largest waste oil collectors in California, and the only oil re-refining operation in California. Founded in 1984, EOI is also a major provider of hazardous waste services, offering customers across California a full range of environmental services to handle all of their waste management needs. Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Case Nos. 13-13163 and 13-13168) on April 9, 2013, in Santa Ana California. The Debtors have tapped Levene, Neale, Bender, Yoo & Brill L.L.P. as bankruptcy counsel; Jeffer, Mangels Butler & Mitchell L.L.P. as special corporate counsel effective; and Cappello Capital Corp. as exclusive investment banker. The Debtors each estimated assets and debts of $50 million to $100 million. EVERGREEN OIL: Hein & Assoc. Okayed as Accountant, Tax Consultant ----------------------------------------------------------------- The U.S. Bankruptcy Court authorized Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc. to employ Hein & Associates L.L.P. as accountant and tax consultant. As reported by the Troubled Company Reporter on May 30, 2013, the firm, will among other things, provide these services: a. assist the Debtors with the ongoing audit conducted by the Internal Revenue Service for the Debtors' tax return(s) for the fiscal year ending on September 30, 2010; b. prepare the Debtors' federal, state and local income and franchises tax returns with supporting schedules for the fiscal year ending on September 30, 2012; and c. provide tax and accounting consultation services related to the sale of the assets. The Debtors will be providing Hein a post-petition retainer of $10,000. Hein has not received any payment for its post-petition fees and expenses. Hein has not received any lien or other interest in property of the Debtors or of a third party to secure payment of Hein's fees or expenses. The firm attests that it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Evergreen Oil Headquartered in Irvine, California, with facilities located in Newark and Carson, California, Evergreen Oil Inc. is one of the largest waste oil collectors in California, and the only oil re-refining operation in California. Founded in 1984, EOI is also a major provider of hazardous waste services, offering customers across California a full range of environmental services to handle all of their waste management needs. Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Case Nos. 13-13163 and 13-13168) on April 9, 2013, in Santa Ana California. The Debtors have tapped Levene, Neale, Bender, Yoo & Brill L.L.P. as bankruptcy counsel; Jeffer, Mangels Butler & Mitchell L.L.P. as special corporate counsel effective; and Cappello Capital Corp. as exclusive investment banker. The Debtors each estimated assets and debts of $50 million to $100 million. EVERGREEN OIL: Panel Can Hire Mirman Bubman as Bankruptcy Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California authorized the Official Committee of Unsecured Creditors of Evergreen Oil, Inc. to employ Mirman Bubman & Nahmias LLC as general bankruptcy counsel. As reported by the Troubled Company Reporter on May 30, 2013, the attorneys designated to represent the Committee and their current standard hourly rates are: Professional Rates ------------ ----- Alan I. Nahmias $495/hr Russel H. Rapoport $495/hr Alan I. Nahmias, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Evergreen Oil Headquartered in Irvine, California, with facilities located in Newark and Carson, California, Evergreen Oil Inc. is one of the largest waste oil collectors in California, and the only oil re-refining operation in California. Founded in 1984, EOI is also a major provider of hazardous waste services, offering customers across California a full range of environmental services to handle all of their waste management needs. Evergreen Oil and its parent, Evergreen Environmental Holdings, Inc., sought Chapter 11 protection (Bankr. C.D. Cal. Case Nos. 13-13163 and 13-13168) on April 9, 2013, in Santa Ana California. The Debtors have tapped Levene, Neale, Bender, Yoo & Brill L.L.P. as bankruptcy counsel; Jeffer, Mangels Butler & Mitchell L.L.P. as special corporate counsel effective; and Cappello Capital Corp. as exclusive investment banker. The Debtors each estimated assets and debts of $50 million to $100 million. EXCEL MARITIME: Robertson Maritime Seeks Expedited Discovery ------------------------------------------------------------ BankruptcyData reported that Robertson Maritime Investors (Robertson) filed with the U.S. Bankruptcy Court an emergency motion for entry of an order expediting discovery in connection with Excel Maritime Carriers' Disclosure Statement. Robertson explains, "Robertson's objections to the First Day Motions created a contested matter. At the first day hearings, counsel for Robertson asked for expedited discovery surrounding on the recent transfer of 71% of the interests of Christine Shipco. Counsel for the Debtors explained that they would not play 'Hide the Ball.' A formal request for production was served July 3, 2013. One week has passed since the first day hearing, but nothing has been produced. A meet-and-confer has not yet resulted in a resolution, but the parties will continue to confer in good faith. Because this is a 'fast track' case, Robertson requests that the Court order the Debtors to produce information responsive to the Request for Production on an expedited basis -- within 6 days, with a corporate representative deposition 6 days after production," the report said, citing court documents. About Excel Maritime Based in Athens, Greece, Excel Maritime Carriers Ltd. -- http://www.excelmaritime.com/-- is an owner and operator of dry bulk carriers and a provider of worldwide seaborne transportation services for dry bulk cargoes, such as iron ore, coal and grains, as well as bauxite, fertilizers and steel products. Excel owns a fleet of 40 vessels and, together with 7 Panamax vessels under bareboat charters, operates 47 vessels (5 Capesize, 14 Kamsarmax, 21 Panamax, 2 Supramax and 5 Handymax vessels) with a total carrying capacity of approximately 3.9 million DWT. Excel Class A common shares have been listed since Sept. 15, 2005, on the New York Stock Exchange (NYSE) under the symbol EXM and, prior to that date, were listed on the American Stock Exchange (AMEX) since 1998. The company blamed financial problems on low charter rates. The balance sheet for December 2011 had assets of $2.72 billion and liabilities totaling $1.16 billion. Excel owes $771 million to secured lenders with liens on almost all assets. There is $150 million owing on 1.875 percent unsecured convertible notes. Excel Maritime, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-bk- 23060) on July 1, 2013, in New York after signing an agreement where secured lenders owed $771 million support a reorganization plan filed alongside the petition. Excel, which sought bankruptcy with a number of affiliates, has tapped Skadden, Arps, Slate, Meagher & Flom LLP, as counsel; Miller Buckfire & Co. LLC, as investment banker; and Global Maritime Partners Inc., as financial advisor. EXIDE TECHNOLOGIES: BlackRock Holds Less Than 1% Equity Stake ------------------------------------------------------------- In an amended Schedule 13G filing with the U.S. Securities and Exchange Commission, BlackRock, Inc., disclosed that, as of June 28, 2013, it beneficially owned 59,447 shares of common stock Exide Technologies representing 0.08 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/2DyACu 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. FINJAN HOLDINGS: Inks Employment Agreements with President & CFO ---------------------------------------------------------------- Finjan Holdings, Inc., and Philip Hartstein entered into an employment agreement, pursuant to which Mr. Hartstein serves as the Company's president. Mr. Hartstein will receive a base salary of $300,000 per year. In addition, Mr. Hartstein is eligible to receive a discretionary bonus at the end of every four month period of his employment term, based on Mr. Hartstein's performance and the overall progress of the Company, in an aggregate amount of up to $75,000 per year. The Employment Agreement was effective as of July 1, 2013. Either the Company or Mr. Hartstein may terminate the Employment Agreement at any time upon 90 days prior written notice. The Hartstein Employment Agreement superseded a consulting agreement between Finjan, Inc., a wholly-owned subsidiary of the Company, and Mr. Hartstein that provided for substantially the same compensation as described above. The consulting agreement between Finjan and Mr. Hartstein ceased to be effective upon the entry into the Hartstein Employment Agreement. On July 8, 2013, the Company and Shimon Steinmetz entered into an employment agreement pursuant to which Mr. Steinmetz serves as the Company's chief financial officer. Mr. Steinmetz will receive a base salary of $200,000 per year. In addition, pursuant to the Steinmetz Employment Agreement, Mr. Steinmetz is eligible to receive a discretionary bonus at the end of each calendar year during his employment term, based on Mr. Steinmetz's performance and the overall progress of the Company, in an aggregate amount of up to $50,000 per year. The Steinmetz Employment Agreement was effective as of July 1, 2013. Either the Company or Mr. Steinmetz may terminate the Steinmetz Employment Agreement at any time upon 90 days prior written notice. The Steinmetz Employment Agreement superseded a consulting agreement between Finjan, Inc., a wholly- owned subsidiary of the Company, and Mr. Steinmetz that provided for substantially the same compensation. The consulting agreement between Finjan, Inc., and Mr. Steinmetz ceased to be effective upon the entry into the Steinmetz Employment Agreement. 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. FIRST FINANCIAL: Rob Whartenby Joins as Chief Credit Officer ------------------------------------------------------------ First Financial Service Corporation announced an addition to the senior leadership of the Company and its subsidiary, First Federal Savings Bank of Elizabethtown. Robert Whartenby has joined the Company and the Bank and will become the Bank's Executive Vice President and Chief Credit Officer when the appointment is approved by the Federal Deposit Insurance Corporation. Mr. Whartenby joins the Company with 30 years of experience in the financial services industry. "First Federal Savings Bank has a great tradition of serving its customers and community," commented Mr. Whartenby. "I am excited about the opportunity to contribute to the success of the organization serving the customers and community while building shareholder value." Prior to joining First Financial Service Corporation, Mr. Whartenby held several leadership roles with First Tennessee Bank N.A., most recently developing and managing the Syndicated Credit department. He was responsible for strengthening the credit and lending functions of First Tennessee's Correspondent Lending Group and leading the transformation of its Commercial Credit Review into an effective, independent risk management function. Mr. Whartenby also has managed acquisitions, division turnarounds, government receivables and contract financing, private client mortgage lending, as well as global corporate equipment leasing during his time with G.E. Capital, Wells Fargo Bank, and BNY Mellon Asset Management. Mr. Whartenby holds a bachelor's degree in Economics from Rhodes College in Memphis, an MBA from Boston University, and has a Six Sigma Green Belt Certification. "We are pleased to have Mr. Whartenby join our team of associates," commented President Greg Schreacke. "His experience, talent, background and skills will help us as we move forward in building a strong credit structure and supporting our growth and portfolio diversification." Robert Critchfield, who has served as Chief Credit Officer of the Bank since February 2012, has retired effective July 12, 2013. About First Financial Elizabethtown, Kentucky-based First Financial Service Corporation is the parent bank holding company of First Federal Savings Bank of Elizabethtown, which was chartered in 1923. The Bank serves six contiguous counties encompassing central Kentucky and the Louisville metropolitan area, through its 17 full-service banking centers and a commercial private banking center. In its 2012 Consent Order, the Bank agreed to achieve and maintain a Tier 1 capital ratio of 9.0 percent and a total risk-based capital ratio of 12.0 percent by June 30, 2012. "At December 31, 2012, the Bank's Tier 1 capital ratio was 6.53% and the total risk-based capital ratio was 12.21%. We notified the bank regulatory agencies that one of the two capital ratios would not be achieved and are continuing our efforts to meet and maintain the required regulatory capital levels and all of the other consent order issues for the Bank," the Company said in its annual report for the year ended Dec. 31, 2012. First Financial disclosed a net loss attributable to common shareholders of $9.44 million in 2012, a net loss attributable to common shareholders of $24.21 million in 2011 and a net loss attributable to common shareholders of $10.45 million in 2010. The Company's balance sheet at Dec. 31, 2012, showed $1 billion in total assets, $962.69 million in total liabilities and $44.37 million in total stockholders' equity. Crowe Horwath LLP, in Louisville, Kentucky, said in its report on the consolidated financial statements for the year ended Dec. 31, 2012, "[T]he Company has recently incurred substantial losses, largely as a result of elevated provisions for loan losses and other credit related costs. In addition, both the Company and its bank subsidiary, First Federal Savings Bank, are under regulatory enforcement orders issued by their primary regulators. First Federal Savings Bank is not in compliance with its regulatory enforcement order which requires, among other things, increased minimum regulatory capital ratios. First Federal Savings Bank's continued non-compliance with its regulatory enforcement order may result in additional adverse regulatory action." FIVE RIVERS PETROLEUM: Court Won't Reinstate Automatic Stay ----------------------------------------------------------- Bankruptcy Judge Jeffery A. Deller dismissed a complaint filed by Five Rivers Petroleum, LLC, to re-impose the automatic stay. A copy of the Court's July 9, 2013 Memorandum Opinion is available at http://is.gd/Oam78wfrom Leagle.com. The Bankruptcy Court issued an order dated August 15, 2012, that sustained Community Bank's objection to the disclosure statement explaining the Debtor's reorganization plan, and granted the bank conditional relief from the automatic stay. The August 15 order set forth milestones for the Debtor to achieve, including obtaining confirmation of an amended plan no later than 120 days from the date of the Order. Fastforward to Feb. 22, 2013, the Court issued a memorandum opinion and accompanying order sustaining Community Bank's objection to the Debtor's Amended Plan and denying confirmation of the revised Plan. The Court found that the Debtor did not demonstrate that the Plan was feasible, and ordered the Debtor to appear at a rule hearing to show cause as to why the case should not be converted to a chapter 7 liquidation proceeding. On March 25, 2013, the Debtor filed a status report setting forth various proposed amendments to the Plan, and requesting a 45-day continuance of the rule hearing to allow the Debtor to file an amended disclosure statement and plan of reorganization. The Court continued the hearing to May 14, 2013. On March 27, the Debtor filed a motion to vacate or modify the August 15 Order and initiated an adversary proceeding by filing a complaint to re-impose the stay. Save for minimal and largely unrecognizable differences in formatting, the Motion to Vacate and the Complaint are mirror images of each other. The Debtor acknowledges its failure to adhere to the deadlines set forth in the August 15 Order, noting that as of the time of filing the Complaint, "the Debtor was not able to obtain confirmation of the Amended Chapter 11 Plan." However, the Debtor asserts that it "has tendered all the adequate protection payments for September 2012, October 2012, November 2012, December 2012, January 2013, February 2013, and March 2013 as required by" the August 15 Order, all of which Community Bank has accepted. The Debtor also notes that "[a]s of March 26, [2013], Community Bank has not declared a default or filed an affidavit of [d]efault, as required by paragraph 3 of the August 15, 2012 Order." However, Community Bank did file an affidavit of default on April 1, 2013, asserting therein that the "Debtor has plainly failed to confirm its Amended Plan by a date no later than 120 days from the Order," and that as a consequence, "pursuant to the terms and conditions of the Order, the automatic stay is lifted without further notice or hearing upon filing of the instant Affidavit of Default." Community Bank filed a response to the Debtor's Motion to Vacate on April 23, 2013, asserting that the Debtor's proposed changes to its plan of reorganization, if made, would still result in an unfeasible plan. On April 29, 2013, Community Bank filed its motion to dismiss, arguing that the Complaint failed to state a claim under either 11 U.S.C. Sec. 105 or Fed. R. Civ. P. 60, and that Count I of the Complaint should be dismissed as duplicative of the Motion to Vacate. In another ruling also issued July 9, Judge Deller said, "The fact is that the Debtor did not propose its best plan from the outset. Rather, it proposed a minimal plan that was fraught with risk for creditors. Having assumed that risk, the Debtor cannot complain at this hour about the fact that its plan was not confirmed and the consequences of the same." The judge also said, "Furthermore, the Debtor argues that '[t]he Court should re-impose the stay to further the purposes of the Bankruptcy Code and permit a Debtor who has the ability to reorganize the opportunity to prosecute a viable Plan of Reorganization.' . . . The Court notes that the original stay accomplished this purpose and provided the Debtor with the opportunity to present a viable plan of reorganization. Again, after the Order was entered requiring confirmation of a feasible plan within 120 days of the date of the Order, the Debtor chose to not put forth its best plan possible. The Debtor could have presented a more feasible plan, as evidenced by their current proposed Plan revisions. The 'changed circumstances' that the Debtor points to are not 'new,' and no facts have been presented which suggest the plan the Debtor wishes to now put forth could not have been put forth originally. The Court therefore finds that the Debtor's request to re-impose the stay is without merit." The Debtor is indebted to Community Bank in connection with three loans made pursuant to promissory notes and security agreements executed therewith, specifically a loan in the amount of $380,072 made on December 30, 2005, a loan in the amount of $100,000 made on March 6, 2008, and a loan in the amount of $212,800 made on March 23, 2009. Community Bank asserts that the Debtor is further indebted pursuant to a commercial guaranty dated December 30, 2005, a modification and mortgage extension agreement dated March 9, 2011, and a forbearance agreement dated August 2011. Pursuant to the security agreements, Community Bank has a security interest in all of the Debtor's personal property, including accounts, inventory, and proceeds thereof. Five Rivers Petroleum, LLC, is a limited liability company operating a truck stop in Claysville, Pennsylvania. Five Rivers filed its voluntary chapter 11 bankruptcy petition (Bankr. W.D. Pa. Case No. 11-25202) on Aug. 18, 2011. Judge Jeffery A. Deller oversees the case. The Law Offices of Michael J. Henny serves as the Debtor's counsel. In its petition, the Debtor estimated $500,001 to $1 million in assets, and $1 million to $10 million in debts. A list of the Company's 19 largest unsecured creditors filed together with the petition is available for free at http://bankrupt.com/misc/pawb11-25202.pdf The petition was signed by Rajeet Sanahu, managing member. FORMATECH INC: Bank Has Superior Claims Over Cellceutix ------------------------------------------------------- Bankruptcy Judge Melvin S. Hoffman on July 9 ruled that Sovereign Bank's interest in the Cellceutix Corporation stock issued to debtor Formatech Inc. as part of the debtor's drug manufacturing and related payment agreements with Cellceutix -- or now the proceeds from the sale of the stock -- is superior to Cellceutix's interest even if Cellceutix succeeds on its rescission claims against Formatech's Chapter 7 trustee. On March 17, 2010, Formatech and Cellceutix entered into a Clinical Materials Contract Aseptic Fill Manufacturing Agreement pursuant to which Formatech was to provide various services, including manufacturing a drug developed by Cellceutix called Kevetrin for use in clinical trials. On March 1, 2011, Formatech and Cellceutix entered into an Alternative Payment Structure Agreement pursuant to which Formatech received cash and 184,375 shares of unregistered Cellceutix stock, evidenced by a stock certificate dated May 27, 2011, in payment for certain of the services Formatech rendered or was to render to Cellceutix under the Manufacturing and Project Agreements. Between 2005 and February 2011, Formatech borrowed funds from Sovereign Bank and in return granted Sovereign Bank a security interest in all of Formatech's assets. Cellceutix does not dispute that among Sovereign Bank's collateral is "investment property," namely its stock certificates, nor does it dispute that Soveriegn Bank properly filed forms UCC-1 and UCC-3 regarding its collateral. Sovereign Bank filed a proof of claim asserting a secured claim against the bankruptcy estate in the amount of $1,108,992.04 as of the bankruptcy petition date. After applying payments received from the post-petition sale of other collateral Sovereign Bank now holds a secured claim of approximately $140,000. Formatech filed a Chapter 11 petition (Bankr. D. Mass. Case No. 11-43424) on Aug. 12, 2011 in Worcester, Massachusetts. Barry C. Richmond, Esq. at Law Office of Barry C. Richmond, in Worcester, served as counsel to the Debtor. The Debtor estimated up to $1 million in assets and up to $10 million in liabilities. The petition was signed by Indu S. Javeri, president. The chapter 11 case was converted to chapter 7 on Feb. 2, 2012, and David M. Nickless was appointed the chapter 7 trustee. Mr. Nickless is with Nickless, Phillips and O'Connor. On March 30, 2012, the trustee filed a motion for authority to sell the Cellceutix stock. Sovereign Bank objected to the sale motion to protect its secured claim as the sale was to be free and clear of its asserted lien. On April 23, 2012, Cellceutix commenced an adversary proceeding against the Chapter 7 trustee by filing a three-count complaint seeking damages and rescission of the APS Agreement based upon breach of contract, presumably of the Manufacturing Agreement (count I), violations of MASS. GEN. LAWS ch. 93A (count II) and fraud and misrepresentation in connection with the APS Agreement (count III). On the same day Cellceutix also filed in the main case both a proof of claim asserting a claim in the amount of $337,000 based on the counts asserted in the adversary proceeding and an objection to the trustee's sale motion on the grounds that the shares were not property of the estate. The chapter 7 trustee has sought dismissal of Cellceutix's three- count complaint or, alternately, summary judgment in his favor. The Court denied that request in Tuesday's ruling. The lawsuit is, CELLCEUTIX CORPORATON Plaintiff, v. DAVID M. NICKLESS, CHAPTER 7 TRUSTEE, Defendant, and SOVEREIGN BANK, N.A. Intervenor/Defendant, SOVEREIGN BANK, N.A. Intervenor/ Crossclaimant, v. DAVID M. NICKLESS, CHAPTER 7, TRUSTEE Defendant, Adv. Proc. No. 12-4041 (Bankr. D. Mass.). A copy of the Court's July 9, 2013 Memorandum of Decision is available at http://is.gd/z3tXPnfrom Leagle.com. Joseph P. Evans, Esq., at Curley & Curley, P.C., in Boston, represents Cellceutix Corporation. Bertin C. Emmons, Esq., in Salem, NH, represents intervenor, Sovereign Bank, N.A. FREESEAS INC: Issues 1.4MM Add'l Settlement Shares to Hanover ------------------------------------------------------------- Freeseas, Inc., issued and delivered to Hanover Holdings I, LLC, on July 10, 2013, an aggregate of 918,000 additional settlement Shares, and on July 11, 2013, the Company issued and delivered to Hanover an additional 490,000 additional settlement shares, in each case pursuant to the terms of the Settlement Agreement approved by the Supreme Court of the State of New York, County of New York. On June 25, 2013, the Supreme Court entered an order approving, among other things, the stipulation of settlement between FreeSeas and Hanover, in the matter entitled Hanover Holdings I, LLC v. FreeSeas Inc., Case No. 651950/2013. Hanover commenced the Action against the Company on May 31, 2013, to recover an aggregate of $5,331,011 of past-due accounts payable of the Company, plus fees and costs. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on June 25, 2013. Pursuant to the terms of the Settlement Agreement approved by the Order, on June 26, 2013, the Company issued and delivered to Hanover 890,000 shares of the Company's common stock, $0.001 par value, and on July 2, 2013, the Company issued and delivered to Hanover 550,000 Additional Settlement Shares. A copy of the Form 6-K is available for free at: http://is.gd/IxD5DA 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. FREESEAS INC: Agrees to Sell $10.5 Million Debt to Hanover ---------------------------------------------------------- FreeSeas Inc. on July 12 said it has entered into a Debt Purchase and Settlement Agreement with Deutsche Bank Nederland N.V., Hanover Holdings I., LLC, and the Company's wholly-owned subsidiaries: Adventure Two S.A., Adventure Three S.A., Adventure Seven S.A. and Adventure Eleven S.A. Pursuant to the terms of the Agreement, Hanover has agreed to purchase US$10,500,000 of outstanding indebtedness owed by the Company to Deutsche Bank, out of a total outstanding amount owed of US$29,958,205, subject to the satisfaction of a number of conditions. Upon payment in full of the purchase amount of $10,500,000 by Hanover to Deutsche Bank in accordance with the terms and conditions of the Agreement, the remaining outstanding indebtedness of the Company and its subsidiaries to Deutsche Bank will be forgiven, and the mortgages of both of its two security vessels will be discharged. The Agreement does not become effective until Hanover deposits in escrow an amount of US$2,500,000 plus all reasonably incurred legal fees and expenses and the parties enter into an escrow agreement. In the event that the funds are not deposited or the escrow agreement is not entered into within 20 trading days, the Agreement dissolves immediately. In addition, the Agreement will automatically terminate upon the occurrence of certain events set forth in the Agreement. Mr. Ion G. Varouxakis, chairman, president and chief executive officer of the Company made the following comments: "After a prolonged period of tortured uncertainty, we are particularly pleased to enter into this Agreement, which will remove approximately USD 30 million of secured debt from our books. In conjunction with action taken since the beginning of the year, the majority of our trade debt and a third of our bank debt will have been exchanged for equity upon completion of this Agreement. This development shall, we hope, accelerate our discussions with our other Lenders for a similar realistic relief and a continued support of our efforts. Most importantly, under the extremely adverse circumstances we have been facing, we firmly believe this development is optimal for our shareholders for whom we are striving to extract maximum value; it also is the least onerous for our lending partners." Mr. Varouxakis added: "We would like to thank Deutsche Bank for their frank cooperation and realistic vision, our remaining banking partners, as well as our numerous trade and business partners who have provided us with their invaluable support and their dedicated patience throughout this long period." Mr. Alexandros Mylonas, chief financial officer of the Company, added: "Since the beginning of the year we have already swapped USD 4.8 million of trade debt into equity. This time, the significance of this transaction on our balance sheet is substantial. Upon completion of this Agreement, our total bank debt is expected to be reduced from approximately USD 89.2 million on December 31, 2012 to USD 59.7 million, two of our vessels will be debt free, and USD 1 million in interest charges are expected to be reduced per year. We also expect to post significant one- off gains from the USD 19.5 million debt forgiveness. Based upon our improved balance sheet after this transaction, we intend to seek funding for additional working capital in order to weather the adverse conditions still present in our industry." Mr. Joshua Sason, founder and chief executive officer of Magna Group, noted: "We approach this transaction and the work we've done with the management of FreeSeas with great pride, and view the agreement with Deutsche Bank as a significant milestone in the restructuring and advancement of the company. The expected material reduction in debt, release of two vessels from mortgage encumbrance upon full payment of the settlement amount and annual interest expense savings should enable FreeSeas to be in a substantially stronger business position." A copy of the Debt Purchase and Settlement Agreement is available for free at http://is.gd/pnr1hF 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. GARLOCK SEALING: Parties Disagree on Asbestos Claims ---------------------------------------------------- Starting July 22, the U.S. Bankruptcy Court in Charlotte, N.C., will preside over a trial that seeks to resolve a crucial issue: how much, if anything, Garlock Sealing Technologies LLC owes individuals who have been or will be diagnosed with mesothelioma. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Garlock Sealing and the official representatives of claimants disagree by a factor of 10-to-1 about the company's liability for present and future asbestos claims. Garlock is a subsidiary of EnPro Industries Inc. So EnPro can retain ownership, Garlock proposed a Chapter 11 plan paying claimants in full. EnPro isn't in bankruptcy. The report notes that to prove the plan is feasible, Garlock will proffer Dr. Charles E. Bates as its expert witness. He pegs Garlock's liability at $125 million. Investors may be buying into Garlock's arguments because EnPro's stock made a record closing high July 10. The expert witness for existing asbestos claimants comes up with an estimate of $1.265 billion. The expert for future claimants projects the claims at $1.292 billion. The report relates that the future claimants told the court how Mr. Bates' methodology was rejected in May by U.S. Bankruptcy Judge Judith K. Fitzgerald in the reorganization of Specialty Products Holding Corp. and Bondex International Inc. Dr. Bates failed to persuade Judge Fitzgerald that the company had no actual liability and therefore the history of settlements should be disregarded in calculating claims to be handled in a Chapter 11 plan. The report says that Garlock is arguing to U.S. Bankruptcy Judge George R. Hodges in Charlotte that the company "has little or no responsibility for the claims that have been and will be asserted against it." Garlock believes the "vast majority" of claimants can't produce enough evidence to be entitled to a jury trial "on the issue of causation." Garlock said it filed bankruptcy "not because it has significant liability." Rather, the company sought out the bankruptcy court "because it could not obtain a fair and efficient adjudication of its liability in the tort system after 2000," Garlock said in a pretrial brief. Garlock says it has proposed a plan funded by $270 million, "more than double the less than $125 million for which" it could be held liable. The report discloses that the claimants say their estimates are based on Garlock's "claim resolution history." They say the $125 million is "less than what Garlock actually paid in any two years between 2006 and 2010." $125-Million in Liabilities Jacqueline Palank, writing for Dow Jones Daily Bankruptcy Review, reported that Garlock Sealing will argue at an upcoming trial that it owes no more than $125 million in asbestos liabilities, though personal-injury claimants say that number is closer to $1.3 billion. Thousands of people have alleged that their exposure to asbestos in Garlock's gaskets, conveyor belts and other products caused the rare and deadly cancer, the report said. Because it can be several decades after exposure before mesothelioma develops, more personal-injury claims could be filed in the future. In a pretrial brief filed this week, Garlock said it will argue that "it has little or no responsibility" for the claims, the report related. It said the claimants can't prove that its products caused their cancer. "This estimation trial will be a search for truth. And in truth, Garlock bears little if any responsibility for claimants' mesotheliomas," the company said, the report cited. About Garlock Sealing Headquartered in Palmyra, New York, Garlock Sealing Technologies LLC is a unit of EnPro Industries, Inc. (NYSE: NPO). For more than a century, Garlock has been helping customers efficiently seal the toughest process fluids in the most demanding applications. On June 5, 2010, Garlock filed a voluntary Chapter 11 petition (Bankr. W.D.N.C. Case No. 10-31607) in Charlotte, North Carolina, to establish a trust to resolve all current and future asbestos claims against Garlock under Section 524(g) of the U.S. Bankruptcy Code. The Debtor estimated $500 million to $1 billion in assets and up to $500 million in debts as of the Petition Date. Affiliates The Anchor Packing Company and Garrison Litigation Management Group, Ltd., also filed for bankruptcy. Albert F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represents the Debtor in their Chapter 11 effort. Garland S. Cassada, Esq., at Robinson Bradshaw & Hinson, serves as counsel for asbestos matters. The Official Committee of Asbestos Personal Injury Claimants in the Chapter 11 cases is represented by Travis W. Moon, Esq., at Hamilton Moon Stephens Steele & Martin, PLLC, in Charlotte, NC, Elihu Inselbuch, Esq., at Caplin & Drysdale, Chartered, in New York, and Trevor W. Swett III, Esq., Leslie M. Kelleher, Esq., and Jeanna Rickards Koski, Esq., in Washington, D.C. 20005. Joseph W. Grier, III, the Court-appointed legal representative for future asbestos claimants, has retained A. Cotten Wright, Esq., at Grier Furr & Crisp, PA, and Richard H. Wyron, Esq., and Jonathan P. Guy, Esq., at Orrick, Herrington & Sutcliffe LLP, as his co- counsel. About 124,000 asbestos claims are pending against Garlock in state and federal courts across the country. The Company says majority of pending asbestos actions against it is stale and dormant -- almost 110,000 or 88% were filed more than four years ago and more than 44,000 or 35% were filed more than 10 years ago. Garlock said in the Disclosure Statement that all asbestos claims must be paid in full. Full payment enables the plan to allow continued ownership by parent EnPro Industries Inc. The Plan will create a trust to fund payment to present and future asbestos claimants. For currently existing claims, the trust will have insurance proceeds plus cash from Garlock together with a promise from EnPro to provide up to $30 million over time. For future claims, the trust will receive $60 million from Garlock plus a secured promise by Garlock to supply an additional $140 million. The promise will be secured by 51% of Garlock's stock. GELTECH SOLUTIONS: Borrows $1 Million From Major Shareholder ------------------------------------------------------------ Michael Reger, the principal shareholder of GelTech Solutions, Inc., lent the Company $1,000,000. In connection with this loan, the Company issued Mr. Reger a $1,000,000 note convertible at $1.00 per share due July 11, 2018, and 500,000 five-year warrants exercisable at a $1.30 per share. The Note bears an annual interest rate of 7.5 percent. About GelTech Jupiter, Fla.-based GelTech Solutions. Inc., is a Delaware corporation organized in 2006. The Company markets four products: (1) FireIce(R), a water soluble fire retardant used to protect firefighters, structures and wildlands; (2) Soil2O(R) 'Dust Control', its new application which is used for dust mitigation in the aggregate, road construction, mining, as well as, other industries that deal with daily dust control issues; (3) Soil2O(R), a product which reduces the use of water and is primarily marketed to golf courses, commercial landscapers and the agriculture market; and (4) FireIce(R) Home Defense Unit, a system for applying FireIce(R) to structures to protect them from wildfires. "As of December 31, 2012, the Company had a working capital deficit, an accumulated deficit and stockholders' deficit of $1,339,923, $26,011,370 and $2,655,057, respectively, and incurred losses from operations of $3,211,484 for the six months ended December 31, 2012 and used cash from operations of $1,994,491 during the six months ended December 31, 2012. In addition, the Company has not yet generated revenue sufficient to support ongoing operations. These factors raise substantial doubt regarding the Company's ability to continue as a going concern." For the nine months ended March 31, 2013, the Company incurred a net loss of $4.06 million on $206,880 of sales, as compared with a net loss of $4.04 million on $304,361 of sales for the same period a year ago. The Company's balance sheet at March 31, 2013, showed $1.47 million in total assets, $3.31 million in total liabilities and a $1.83 million total stockholders' deficit. GLYECO INC: To Buy GSS's Glycol Recycling Business in Maryland -------------------------------------------------------------- GlyEco, Inc., entered into a preliminary agreement with GSS Automotive Recycling, Inc., to purchase GSS's glycol recycling business located in Landover, MD. Pursuant to the Preliminary Agreement, the Company has agreed to purchase from GSS, and GSS has agreed to sell to the Company, GSS's business and all of its assets, free and clear of any encumbrances. The Company will provide $400,000 in cash to be delivered upon the closing of the transaction and 460,000 shares of the Company's unregistered common stock, $0.0001 par value per share, of which 200,000 shares will be held in escrow for a period of one year to secure the representations and warranties made by GSS relating to the business. GSS will provide a net working capital of $50,000 upon the closing of the transaction. The parties intend the Preliminary Agreement to create a binding obligation. The terms are agreed upon in anticipation of the completion of a more definitive Asset Purchase Agreement, which will supersede and replace the Preliminary Agreement. If, despite the best efforts of the parties to negotiate, an Asset Purchase Agreement is not entered into by Oct. 1, 2013, either party may terminate the Preliminary Agreement. The terms are subject to change contingent upon an audit of GSS's business by GlyEco. GSS has agreed to assist GlyEco in its performance of such a due diligence investigation of the business and to provide the Company with reasonable access to its books, records, and other information pertaining to the business. About GlyEco, Inc. Phoenix, Ariz.-based GlyEco, Inc., is a green chemistry company formed to roll-out its proprietary and patent pending glycol recycling technology that transforms waste glycols, a hazardous material, into profitable green products. Glyeco, Inc., disclosed a net loss of $1.86 million on $1.26 million of net sales for the year ended Dec. 31, 2012, as compared with a net loss of $592,171 on $824,289 of net sales for the year ended Dec. 31, 2011. The Company's balance sheet at March 31, 2013, showed $9.16 million in total assets, $2.63 million in total liabilities and $6.53 million in total stockholders' equity. Jorgensen & Co., in Lehi, UT, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has not yet achieved profitable operations and is dependent on its ability to raise capital from stockholders or other sources and other factors to sustain operations. These factors, among other matters, raise substantial doubt that the Company will be able to continue as a going concern. GREAT PLATTE: River Archway Museum Proposes Chapter 11 Plan ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Great Platte River Road Archway, a tourist attraction spanning Interstate 80 near Kearney, Nebraska, proposed a Chapter 11 plan offering bondholders $50,000 to pay off $20 million in debt. The report notes that the museum filed a reorganization plan offering $50,000 cash in full satisfaction of the $20 million in bonds. For $100,000 in unsecured claims, the plan is offering another $50,000. Featuring 89,000 blades of grass in dioramas with 24 life sized cast figures, the museum depicts pioneers heading west across Nebraska. According to the report, the museum has pledges from donors willing to contribute $132,000 if the reorganization plan is implemented. Objections to the explanatory disclosure statement are due July 23. About Great Platte The Great Platte River Road Memorial Foundation owns the Platte River Road Archway, an eight-story tall museum that was built in 2000 with $60 million in industrial revenue bonds. The museum is 129 miles (208 kilometers) west of Lincoln, Nebraska, and 317 miles east of Cheyenne, Wyoming. Admission is $12 for adults and between $8 and $5 for children. The attraction never generated enough income to cover operating expenses and debt service. The first default occurred in 2002 when the outstanding amount on the bonds was reduced to $22 million. Great Platte River sought Chapter 11 protection (Bankr. D. Neb. Case No. 13-40411) on March 6, 2013. T. Randall Wright, Esq., at Baird Holm, LLP, in Omaha, Nebraska. The Debtor estimated assets of $100,001 to $500,000 and debts of $10 million to $50 million. HANDY HARDWARE: Has July 25 Hearing to Confirm Exit Plan -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware will convene a hearing commencing July 25, 2013, at 1 p.m., to consider the confirmation of Handy Hardware Wholesale, Inc.'s Chapter 11 Plan. Objections, if any, are due July 22. The Court has entered an order approving the Second Amended Disclosure Statement in support of the Second Amended Plan of Reorganization. A hearing on any Rule 3018 motion will be heard on July 18, at 11:30 a.m. Objections, if any, are due July 17. Ballots accepting or rejecting the Plan are due July 18, at 5 p.m. Ballots must be submitted to the Debtor's claims agent: 1. via second class or regular mail: Donlin Recano & Company, Inc. Re: Handy Hardware Wholesale, Inc. P.O. Box 2054, Murray Hill Station New York, NY 10156 2: via overnight courier or hand delivery: Donlin, Recano & Company, Inc. Re: Handy Hardware Wholesale, Inc. 419 Park Avenue South, Suite 1206 New York, NY 10016 Any objection to the cure notice must be filed by July 22, at 4 p.m. If a cure objection is not resolved, the Court will determine the amount of any disputed cure amount at the hearing scheduled for July 25, at 1 p.m. As reported by the Troubled Company Reporter, the Plan will hand ownership of the Debtor to Littlejohn Management Holdings in return for a $4 million contribution to cover wind-down costs for the estate and pay unsecured creditors on a pro-rated basis. The Plan proposes to pay or roll over working capital financing from first-lien lender Wells Fargo Bank NA. Capital One Bank USA NA, with liens on warehouses in Houston and Meridian, Mississippi, will receive title to both facilities and lease the Houston property back to the purchaser. The Mississippi warehouse was closed. Capital One is owed $25.8 million. The Plan says unsecured creditors will have allowed claims of $35 million to $56 million, and are projected to recoup 8 percent to 12 percent. For unsecured creditors, a significant feature the Plan is the waiver of claims to sue for preferences, or payments received with 90 days of bankruptcy. Equity interests in the Debtor will be extinguished. About Handy Hardware Handy Hardware Wholesale, Inc., filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-10060) on Jan. 11, 2013. Handy Hardware is engaged in the business of buying goods from vendors and selling those goods at a discounted price to its members for sale in their retail stores. Handy Hardware, which has 300 employees, is operating on a cooperative basis and is completely member-owned, with over 1,000 members. The Debtor's warehouse facilities are located in Houston, Texas, and in Meridian, Mississippi. Trucking services are provided by Averitt Express, Inc., and Trans Power Corp. Its members operate 1,300 retail stores, home centers, and lumber yards. The members are located in 14 states throughout the U.S. as well as in Mexico, South America, and Puerto Rico. Bankruptcy Judge Mary F. Walrath oversees the case. William P. Bowden at Ashby & Geddes, P.A., serve as the Debtor's counsel. MCA Financial serves as financial advisor. Donlin Recano serves as claims and noticing agent. The Debtor disclosed $79,169,106 in assets and $77,605,085 plus an unknown in liabilities as of the Chapter 11 filing. A seven-member official committee of unsecured creditors has been appointed in the case. Gellert Scali Busenkell & Brown, LLC represents the Committee. Wells Fargo is providing a $30 million revolving credit to finance operations in Chapter 11. HERCULES OFFSHORE: Completes Issuance of $400 Million Sr. Notes --------------------------------------------------------------- Hercules Offshore, Inc., successfully completed the issuance and sale of $400,000,000 aggregate principal amount of 8.750 percent Senior Notes due 2021. The Company's obligations under the Notes are jointly and severally, fully and unconditionally guaranteed, on a senior unsecured basis, by each of the Company's current and future domestic restricted subsidiaries that incur or guarantee indebtedness under a credit facility, including the Company's existing revolving credit facility. The Company received net proceeds from the Notes offering of approximately $393 million, after deducting the initial purchasers' discount and estimated offering expenses. The Company is using the net proceeds, together with cash on hand (including the proceeds of approximately $104 million the Company expects to receive from the sales of its inland barge rigs, domestic liftboats and related assets), to fund its acquisitions of Discovery shares and the final payment of $333.9 million due for Discovery Triumph and Discovery Resilience. The Notes and the Guarantees were issued pursuant to an indenture, dated July 8, 2013, by and between the Issuers and U.S. Bank National Association, as trustee. The Notes accrue interest from July 8, 2013, at a rate of 8.750 percent per year. Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year, beginning Jan. 15, 2014. The Notes mature on July 15, 2021. The Company, at its option, may redeem all or part of the Notes, at any time prior to July 15, 2017, at a price equal to 100 percent of the aggregate principal amount of the Notes to be redeemed, plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, the applicable redemption date. Additional information is available for free at: http://is.gd/mOE7QW About Hercules Offshore Hercules Offshore Inc. (NASDAQ: HERO) -- http://www.herculesoffshore.com/-- provides shallow-water drilling and marine services to the oil and natural gas exploration and production industry in the United States, Gulf of Mexico and internationally. The Company provides these services to integrated energy companies, independent oil and natural gas operators and national oil companies. The Company operates in six business segments: Domestic Offshore, International Offshore, Inland, Domestic Liftboats, International Liftboats and Delta Towing. Hercules incurred a net loss of $127 million in 2012, a net loss of $76.12 million in 2011, and a net loss of $134.59 million in 2010. The Company's balance sheet at March 31, 2013, showed $2 billion in total assets, $1.08 billion in total liabilities and $919.58 million in stockholders' equity. * * * The Troubled Company Reporter said on April 11, 2013, that Moody's Investors Service upgraded Hercules Offshore, Inc.'s Corporate Family Rating to B2 from B3. Hercules' B2 CFR is supported by its improved cash flow and lower leverage on the back of increased drilling activity and higher day-rates in the Gulf of Mexico (GOM) As reported by the TCR on Nov. 6, 2012, Standard & Poor's Ratings Services raised its corporate credit rating on Houston-based Hercules Offshore Inc. to 'B' from 'B-'. "The upgrade reflects the improving market conditions in the Gulf of Mexico and our expectations that Hercules' fleet will continue to benefit," said Standard & Poor's credit analyst Stephen Scovotti. HERON LAKE: Neal Greenberg is Interim Chief Financial Officer ------------------------------------------------------------- Heron Lake BioEnergy, LLC, entered into a letter agreement with CFO Systems, LLC, pursuant to which CFO Systems will provide financial and consulting services to the Company typical of the those needed for the CFO role at a rate of $150 per hour of CFO time and $75 per hour of staff time. Either party may terminate the Letter Agreement upon 30 days' written notice. The Company made a deposit of $3,000 to be applied against future invoices under the Letter Agreement. In connection with the Letter Agreement, Neal Greenberg, age 58, agreed to serve as the Company's Interim Chief Financial Officer effective July 8, 2013. Michael L. Mattison resigned as the Company's Chief Financial Officer on July 5, 2013. Mr. Greenberg has been a director of CFO Systems since July 2012. Prior to joining CFO Systems, he served as the Director of Operations of MedWellRx from August 2011 to June 2012, served as the Controller of Jet Linx, LLC, from July 2010 to August 2011, and was the Director of Financial Reporting as a full-time consultant for American Gramaphone from July 2003 to July 2010. Mr. Greenberg has more than 30 years of financial and operations experience specializing in the manufacturing, healthcare, communications and advertising industries. Through CFO Systems, he works closely with clients to improve operational efficiency, develop strategic plans, improve balance sheet management and strengthen board relations. Mr. Greenberg's experience with other ethanol facilities includes SEC XBRL tagging, management of the Form 10-Q and Form 10-K filing process, building a forecast model, and refining the management financial reporting process. A copy of the Letter Agreement is available for free at: http://is.gd/mll4DT About Heron Lake Heron Lake BioEnergy, LLC, operated a dry mill, coal fired ethanol plant in Heron Lake, Minnesota. After completing a conversion in November 2011, the Company is now a natural gas fired ethanol plant. Its subsidiary, HLBE Pipeline Company, LLC, owns 73 percent of Agrinatural Gas, LLC, the pipeline company formed to construct, own, and operate a natural gas pipeline that provides natural gas to the Company's ethanol production facility through a connection with the natural gas pipeline facilities of Northern Border Pipeline Company in Cottonwood County, Minnesota. Its subsidiary, Lakefield Farmers Elevator, LLC, has grain facilities at Lakefield and Wilder, Minnesota. At nameplate, the Company's ethanol plant has the capacity to process approximately 18.0 million bushels of corn each year, producing approximately 50 million gallons per year of fuel-grade ethanol and approximately 160,000 tons of distillers' grains with soluble. In its report on the Company's financial statements for the fiscal year ended Oct. 31, 2012, Boulay, Heutmaker, Zibell & Co. P.L.L.P., in Minneapolis, Minnesota, expressed substantial doubt about Heron Lake BioEnergy's ability to continue as a going concern. The independent auditors noted that the Company has incurred losses due to difficult market conditions and the impairment of long-lived assets. "The Company is out of compliance with its master loan agreement and is operating under a forbearance agreement whereby the Company agreed to sell substantially all of its assets." The Company reported a net loss of $32.35 million for the year ended Oct. 31, 2012, as compared with net income of $543,017 for the year ended Oct. 31, 2011. As of April 30, 2013, the Company had $59.78 million in total assets, $44.05 million in total liabilities and $15.72 million in total members' equity. Bankruptcy Warning At Jan. 31, 2013, the Company's total indebtedness to AgStar was approximately $41.1 million. All of the Company's assets and real property are subject to security interests and mortgages in favor of AgStar as security for the obligations of the master loan agreement. The Company's failure to pay any required installment of principal or interest or any other amounts payable under the Company's Term Loan or Term Revolving Loan or the Company's failure to perform or observe any covenant under the Sixth Amended and Restated Master Loan Agreement would result in an event of default, entitling AgStar to accelerate and declare due all amounts outstanding under the Company's Term Loan and its Term Revolving Loan. "Upon the occurrence of any one or more Events of Default, as defined under the Sixth Amended and Restated Forbearance Agreement, including failure to observe any of the financial or affirmative covenants..., AgStar may accelerate all of our indebtedness and may seize the assets that secure our indebtedness, causing us to lose control of our business. We may also be forced to sell our assets, restructure our indebtedness, submit to foreclosure proceedings, cease operations or seek bankruptcy or reorganization protection." HOSPITAL DE DAMAS: Employees' Claim for Christmas Bonus Rejected ---------------------------------------------------------------- At the behest of Hospital de Damas, Inc., Bankruptcy Judge Edward A. Godoy disallowed proofs of claim 95 and 98 seeking payment of 2009 and 2008 Christmas bonuses filed by certain union members who were or are also employees of the Ponce, Puerto Rico-based hospital. A copy of Judge Godoy's July 9, 2013 Opinion and Order is available at http://is.gd/0yA5lWfrom Leagle.com. About Hospital de Damas Ponce, Puerto Rico-based Hospital de Damas, Inc., has operated a general acute care hospital, providing critical care, general medical and skilled nursing services. The Debtor is a wholly owned subsidiary of Fundacion Damas Inc. The Company filed for Chapter 11 bankruptcy protection (Bankr. D. P.R. Case No. 10-08844) on Sept. 24, 2010. According to its schedules, the Debtor disclosed US$24,017,166 in total assets and US$21,267,263 in total liabilities. Attorneys at Charles A. Cuprill, P.S.C., in San Juan, Puerto Rico, represent the Debtor as counsel. Jorge P. Sala Law Offices serves as the Debtor's labor law special counsel, assisted by special counsel Fiddler, Gonzalez & Rodriguez, P.S.C. Attorneys at Kilpatrick Townsend & Stockton LLP, in Atlanta, Ga., represent the Official Committee of Unsecured Creditors as counsel. IDERA PHARMACEUTICALS: Appoints James Geraghty as Chairman ---------------------------------------------------------- Idera Pharmaceuticals, Inc., has appointed James Geraghty to serve as a member of the Board of Directors and also as its Chairman. Mr. Geraghty has held a wide range of leadership positions during a 20-year career at Genzyme Corporation, including substantial experience overseeing product development, commercial launches, and strategic transactions. Mr. Geraghty also served as a Senior Vice President of Sanofi SA following its acquisition of Genzyme, and recently took on a role as an Entrepreneur-in-Residence at Third Rock Ventures. "It is my great pleasure to welcome Jim to Idera at this transformative period. We believe that the recently announced results of our clinical trials with Toll-like Receptor (TLR) antagonist drug candidates provide proof-of-concept for TLR antagonism as a novel approach to the treatment of psoriasis and potentially other autoimmune and inflammatory diseases," said Dr. Sudhir Agrawal, chief executive officer of Idera. "I believe that the addition of Jim and his extensive experience comes at an ideal moment, and we look forward to his guidance and contributions as we advance our programs toward later stage development." "Idera has established a clear leadership position in TLR research, and has generated very promising development candidates. I believe these candidates are poised to make important contributions to patients with serious diseases, and look forward to working with the entire Idera team to bring these TLR candidates through clinical development and to market," said Mr. James Geraghty. James Geraghty is a life sciences industry leader. Currently an Entrepreneur-in-Residence at Third Rock Ventures, Jim served as Senior Vice President, North America Strategy and Business Development at Sanofi, where he was a member of the Office of the CEO. Prior to Sanofi's acquisition Jim spent 20 years at Genzyme Corporation, most recently as Senior Vice President, and helped Genzyme introduce rare disease therapies around the world. His roles included President of Genzyme Europe, where he oversaw several new product launches, and General Manager of Genzyme's cardiovascular business, where he guided the development of a recently approved antisense product. He also led strategic transactions that brought important new products into Genzyme, as well as divestitures valued at over $1 billion. He was previously Chairman, President and CEO of Genzyme Transgenics Corporation (later GTC Biotherapeutics), which he founded and took public. Jim served as co-chair of the executive committee for BIO 2007, was for a number of years a member of the board of Bluebird Bio, and continues to serve on the board of Bio Ventures for Global Health (BVGH). A graduate of the Yale Law School, he has published articles in the Yale Law Journal, Health Affairs and elsewhere. He holds an MS from the University of Pennsylvania and a BA from Georgetown University. In accordance with the Company's director compensation program, Mr. Geraghty will receive an annual cash retainer of $35,000 for service on the Board of Directors, which is payable quarterly in arrears. The Company's director compensation program includes a stock-for-fees policy, under which Mr. Geraghty has the right to elect, on a quarterly basis, to receive Common Stock of the Company in lieu of the cash fees. In addition, upon his election to the Board of Directors, Mr. Geraghty was granted an option to purchase 450,000 shares of the Company's Common Stock at an exercise price of $0.71 per share. About Idera Pharmaceuticals Cambridge, Massachusetts-based Idera Pharmaceuticals, Inc., is a clinical stage biotechnology company engaged in the discovery and development of novel synthetic DNA- and RNA-based drug candidates that are designed to modulate immune responses mediated through Toll-like Receptors, or TLRs. The Company has two drug candidates, IMO-3100, a TLR7 and TLR9 antagonist, and IMO-8400, a TLR7, TLR8, and TLR9 antagonist, in clinical development for the treatment of autoimmune and inflammatory diseases. In the auditors' report on the consolidated financial statements for the year ended Dec. 31, 2012, Ernst & Young LLP, in Boston, Mass., expressed substantial doubt about Idera's ability to continue as a going concern, citing recurring losses and negative cash flows from operations and the necessity to raise additional capital or alternative means of financial support, or both, prior to Dec. 31, 2013, in order to continue to fund its operations. The Company reported a net loss of $19.2 million on $51,000 of revenue in 2012, compared with a net loss of $23.8 million on $53,000 of revenue in 2011. Revenue in 2012 and 2011 consisted of reimbursement by licensees of costs associated with patent maintenance. The Company's balance sheet at March 31, 2013, showed $6.81 million in total assets, $4.10 million in total liabilities, $5.92 million in series D redeemable convertible preferred stock, and a $3.21 million total stockholders' deficit. INTELLICELL BIOSCIENCES: Issues Add'l 7 Million Shares to Hanover ----------------------------------------------------------------- Intellicell Biosciences, Inc., on July 12, 2013, delivered to Hanover Holdings I, LLC, another 7,000,000 additional settlement shares pursuant to the terms of the Settlement Agreement approved by the Supreme Court of the State of New York, County of New York, on May 21, 2013. The Supreme Court approved, among other things, the settlement between Intellicell and Hanover in the matter entitled Hanover Holdings I, LLC v. Intellicell Biosciences, Inc., Case No. 651709/2013. Hanover commenced the Action against the Company on May 10, 2013, to recover an aggregate of $706,765 of past-due accounts payable of the Company, plus fees and costs. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on May 21, 2013. On May 23, 2013, the Company issued and delivered to Hanover 8,500,000 shares of the Company's common stock, $0.001 par value. On June 17, 2013, the Company issued and delivered to Hanover 5,550,000 Additional Settlement Shares, on June 19, 2013, the Company issued and delivered to Hanover 4,300,000 Additional Settlement Shares, and on July 2, 2013, the Company issued and delivered to Hanover 6,250,000 Additional Settlement Shares, in each case pursuant to the terms of the Settlement Agreement approved by the Order. A copy of the Form 8-K is available for free at: http://is.gd/AfT6gn About Intellicell Biosciences Intellicell BioSciences, Inc., headquartered in New York, N.Y., was formed on Aug. 13, 2010, under the name "Regen Biosciences, Inc." as a pioneering regenerative medicine company to develop and commercialize regenerative medical technologies in large markets with unmet clinical needs. On Feb. 17, 2011, the company changed its name from "Regen Biosciences, Inc." to "IntelliCell BioSciences Inc". To date, IntelliCell has developed proprietary technologies that allow for the efficient and reproducible separation of stromal vascular fraction (branded "IntelliCell(TM)") containing adipose stem cells that can be performed in tissue processing centers and in doctors' offices. The Company has incurred losses since inception resulting in an accumulated deficit of $43,079,590 and a working capital deficit of $3,811,024 as of March 31, 2012, respectively. However, if the non-cash expense related to the Company's change in fair value of derivative liability and stock based compensation is excluded then the accumulated deficit amounted to $4,121,538. Further losses are anticipated in the continued development of its business, raising substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at Sept. 30, 2012, showed $4.15 million in total assets, $7.31 million in total liabilities and a $3.16 million total stockholders' deficit. INVESTORS LENDING: McCallar Firm Wins Fees Battle Over Committee ---------------------------------------------------------------- Bankruptcy Judge Lamar W. Davis, Jr., granted McCallar Law Firm's Application for Attorneys' Fees for its work as counsel to the Official Committee of Unsecured Creditors in the Chapter 11 case of Investors Lending Group, LLC, less a $2,500 agreed upon reduction. The Committee objected to the Fee Application. The Law Firm requested interim compensation of $74,032.12 in total, comprised of attorneys' fees in the amount of $67,279.75 and expenses in the amount of $6,752.37. The compensation requested was for services rendered from the period of August 8, 2012, through March 20, 2013. The Committee requested a reduction in the amount of fees by $16,440. The principal basis for the Committee's objection is duplication of effort. The Law Firm has already offered to reduce the bill by $2,500.00, which it contends more than accounts for a blended rate reduction requested by the Committee. In addition, the Law Firm notes that at the outset it had agreed to a rate lower than its typical rate for this type of case and waived charges for services it rendered prior to Oct. 25, 2011. According to Judge Davis, "While it is clear here that services were billed for two attorneys' legal work at the same time, the duplicated time was not excessive and appeared to maximize efficiency. The Law Firm reduced its typical fees and later agreed to an additional $2,500.00 reduction in compensation. Even if the Committee's objection were sustained, the Law Firm's prior concessions adequately address the Committee's requested fee reduction. As such, the Law Firm has acted in a way which meets the salutary goal of counsel exercising billing judgment in setting fees." No other objections to the Fee Application were raised, and the Court previously entered an Order Approving Attorneys' Fees and Expenses of $57,592.12, the amount of fees and expenses not in dispute. A copy of the Court's July 8, 2013 Opinion and Order is available at http://is.gd/0wL7YRfrom Leagle.com. About Investors Lending Based in Savannah, Georgia, Investors Lending Group LLC filed for Chapter 11 (Bankr. S.D. Ga. Case No. 11-41963) on Sept. 21, 2011. Judge Lamar W. Davis Jr. presides over the case. James L. Drake, Jr. P.C., acts as counsel to the Debtor. In its amended schedules, the Debtor disclosed $14,197,900 in assets and $19,133,903 in liabilities. The petition was signed by Isaac L. Rabhan, CEO/assistant manager. C. James McCallar, Jr., Esq., and Tiffany E. Caron, Esq., at McCallar Law Firm, in Savannah, Georgia, represent the Official Committee of Unsecured Creditors. The Debtor and the Committee filed a Joint Plan of Reorganization. Bank of the Ozarks objected to confirmation of the Plan. The Plan proposed to surrender seven of twelve of BTO's collateralized properties, and BTO contended that such a surrender would not provide it with the indubitable equivalent of its claim. After an evidentiary hearing on Dec. 11, 2012, the Court ruled that the Plan would be confirmed if the Debtor and the Committee amended the Plan to surrender to BTO properties worth $810,000 in value (based on the values set forth in the approved Disclosure Statement). The Debtor and the Committee amended the Plan in accordance with the Court's ruling, and the Plan was confirmed on Jan. 29, 2013. Pursuant to the Plan, the Committee has assumed control of the reorganized Debtor. ISTAR FINANCIAL: Moody's Changes Outlook on Ratings to Positive --------------------------------------------------------------- Moody's Investors Service affirmed iStar Financial's February 2013 senior secured credit facilities at B1, March 2013 senior secured credit facility Tranche A-1 at Ba3 and Tranche A-2 at B1, corporate family rating at B2, senior unsecured debt rating at B3 and preferred stock rating at Caa2. The rating outlook was revised to positive from stable. Ratings Rationale: The rating action is based on iStar's strengthened credit profile and efforts to re-establish and grow its real estate finance business. Leverage (debt as a percentage of total equity, accumulated depreciation and general loan loss reserves) has improved to 2.4X as of 1Q13 versus 3.0X at 1Q12. SFI has also made significant progress in extending its debt maturity schedule and its liquidity profile is solid over the near term. After repaying all of its 2013 debt maturities, the REIT has only $305 million maturing through 2015. Moody's notes that iStar has successfully tapped the capital markets, raising approximately $1.3 billion in unsecured debt, convertible debt and preferred stock since the 4Q12. Offsetting these strengths are weak earnings metrics. Specifically, fixed charge coverage remains below 1.0X. Moody's expects fixed charge coverage will improve in 2014 as non- performing loans continue to decrease and iStar's operating properties slowly stabilize. The positive rating outlook reflects iStar's strengthened credit metrics with the expectation that fixed charge coverage will grow to 1.1X in 2014. The outlook also reflects Moody's expectation that iStar will successfully grow its real estate finance business, maintain adequate liquidity and continue to stabilize its existing operating portfolio. Moreover, Moody's expects SFI to operate with leverage in the 2.0x to 2.5x range over the intermediate term and that SFI will continue to successfully tap the capital markets to address its funding needs. Moody's indicated that an upgrade would be predicated on fixed charge coverage of over 1.1X (on a sustained basis), positive momentum in its re-established lending program, good liquidity coverage with demonstrated access to multiple capital markets and continued declines in non-performing assets. A return to stable outlook could occur if resolutions to its non- performing assets stall, fixed charge coverage remains at or below 1.0X on a sustained basis, and stabilizing its operating portfolio proves to be challenging. In addition, should SFI lending program fail to gain reasonable traction (accounting for market conditions), the outlook could be returned to stable. Negative rating pressure could result should the REIT fail to achieve resolutions of its non-performing assets at or above the current carrying value and fixed charge coverage remaining below 1.0X. Any liquidity challenges or covenant breaches could lead to a downgrade. The following ratings were affirmed with a positive outlook: iStar Financial Inc. -- February 2013 senior secured credit facility at B1, March 2012 senior secured credit facility Tranche A-1 at Ba3 and Tranche A-2 at B1; corporate family rating at B2; senior unsecured debt at B3; senior debt shelf at (P) B3; subordinated debt shelf at (P)Caa2; preferred stock at Caa2; and preferred stock shelf at (P)Caa2. Moody's last rating action with respect to iStar Financial Inc. was on October 4, 2012 when Moody's assigned a B1 senior secured rating to iStar's October 2012 senior secured facility. Moody's simultaneously upgraded iStar's March 2012 senior secured facility Tranche A-1 rating to Ba3 from B1, the March 2012 Tranche A-2 rating to B1 from B2, the corporate family rating to B2 from B3, and senior unsecured debt to B3 from Caa1. These rating actions followed the announcement that iStar planned to raise $1.8 billion in a new senior secured credit facility which refinanced the 2011 senior secured credit facility. As a result, the 2011 senior secured credit facility ratings were withdrawn. The rating outlook was stable. iStar Financial, Inc.'s ratings were assigned by evaluating factors that Moody's considers relevant to the credit profile of the issuer, such as the company's (i) business risk and competitive position compared with others within the industry; (ii) capital structure and financial risk; (iii) projected performance over the near to intermediate term; and (iv) management's track record and tolerance for risk. Moody's compared these attributes against other issuers both within and outside iStar Financial, Inc.'s core industry and believes iStar Financial, Inc.'s ratings are comparable to those of other issuers with similar credit risk. iStar Financial Inc. [NYSE: SFI] is a finance and investment company focused on the commercial real estate industry. iStar provides custom-tailored investment capital to high-end private and corporate owners of real estate and invests directly across a range of real estate sectors. iStar Financial, which is taxed as a REIT, is headquartered in New York City, and had total assets of $6.1 billion as of March 31, 2013. K-V PHARMACEUTICAL: 6th Amended Plan Filed ------------------------------------------ BankruptcyData reported that K-V Pharmaceutical filed with the U.S. Bankruptcy Court a Sixth Amended Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, "The Plan provides for meaningful recoveries to the Debtors' various constituents and will substantially de-lever the Debtors' capital structure by discharging hundreds of millions of dollars of prepetition debt, thereby providing the Debtors with greater financial flexibility. In addition, under the Plan, the Debtors will retain Makena, their most valuable asset, as well as each of their other pharmaceutical products, ensuring that the Debtors will continue to operate as a going concern upon emergence from bankruptcy. For these reasons and others, the Debtors believe that confirmation of the Plan is in the best interests of their estates and creditors," the report said, citing court documents. About K-V Pharmaceutical K-V Pharmaceutical Company (NYSE: KVa/KVb) -- http://www.kvpharmaceutical.com/-- is a fully integrated specialty pharmaceutical company that develops, manufactures, markets, and acquires technology-distinguished branded and generic/non-branded prescription pharmaceutical products. The Company markets its technology distinguished products through ETHEX Corporation, a subsidiary that competes with branded products, and Ther-Rx Corporation, the company's branded drug subsidiary. K-V Pharmaceutical Company and certain domestic subsidiaries on Aug. 4, 2012, filed voluntary Chapter 11 petitions (Bankr. S.D.N.Y. Lead Case No. 12-13346, under K-V Discovery Solutions Inc.) to restructure their financial obligations. K-V employed Willkie Farr & Gallagher LLP as bankruptcy counsel, Williams & Connolly LLP as special litigation counsel, and SNR Denton as special litigation counsel. In addition, K-V tapped Jefferies & Co., Inc., as financial advisor and investment banker. Epiq Bankruptcy Solutions LLC is the claims and notice agent. The U.S. Trustee appointed five members to serve in the Official Committee of Unsecured Creditors. Kristopher M. Hansen, Esq., Erez E. Gilad, Esq., and Matthew G. Garofalo, Esq., at Stroock & Stroock & Lavan LLP, represent the Creditors Committee. Weil, Gotshal & Manges LLP's Robert J. Lemons, Esq., and Lori R. Fife, Esq., represent an Ad Hoc Senior Noteholders Group. KIT DIGITAL: Equity Committee Urges 'No' Vote on Plan ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Kit Digital Inc. official stockholders' committee is urging shareholders to vote against the reorganization plan coming to court for approval at an Aug. 15 confirmation hearing. According to the report, the plan is sponsored by some of the company's current shareholders. Court-approved disclosure materials say the plan might pay unsecured creditors in full on their claims ranging between $11.5 million and $14.85 million in the aggregate. The equity committee said that the plan has "disadvantageous treatment of the debtor's equity security holders other than the insider-led plan-sponsor group." The report notes that rejecting the plan "is likely to lead to opportunities to maximize equity security holders' return," the group says in a letter being sent to shareholders. Previously, the equity committee said it found "at least two qualified bidders" offering proposals more attractive than the reorganization plan where a group of shareholders including the company's chief executive will buy the software developer for digital video management. The report relates that it remains to be seen whether the official creditors' committee likewise urges the judge not to approve the plan. The creditors' committee previously said the plan might end up paying only 40 percent to its constituency, not full payment as the company said earlier in the case. The creditors retained the ability to object to the plan for violating the absolute priority rule because shareholders could retain ownership without a guarantee of full payment to creditors. The report says that Kit filed for Chapter 11 reorganization in late April after working out the plan in advance. Three existing shareholders are offering to pay $25 million for 89.3 percent of the stock. They are Prescott Group Capital Management, JEC Capital Partners, and Stichting Bewaarder Ratio Capital Partners. The report discloses that according to an ad hoc group of other stockholders, JEC is a private-equity investor affiliated with Kit's chief executive officer. The $3 million loan financing the Chapter 11 effort would convert into the other 10.7 percent of the stock, under the company's plan. About KIT digital New York-based KIT digital Inc. -- http://www.kitd.com/-- is a video management software and services company. KIT digital services nearly 2,500 clients in 50+ countries including some of the world's biggest brands, such as Airbus, The Associated Press, AT&T, BBC, BSkyB, Disney-ABC, Google, HP, MTV, News Corp, Sky Deutschland, Sky Italia, Telecom Argentina, Telecom Italia, Telefonica, Universal Studios, Verizon, Vodafone VRT and Volkswagen. KIT digital filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 13-11298) in Manhattan on April 25, 2013. The Debtor disclosed $310,206,684 in assets and $23,011,940 in liabilities. KIT's operating subsidiaries, including Ioko 365, Polymedia, Kewego, Multicast and Megahertz are not included in the Chapter 11 filing. Jennifer Feldsher, Esq., and Anna Rozin, Esq., at Bracewell & Giuliani LLP, in New York, serve as counsel to the Debtor. American Legal Claims Services LLC is the claims and noticing agent and the administrative agent. KLEEN ENERGY: Fitch Affirms 'BB' Term Loan Ratings, Outlook Neg --------------------------------------------------------------- Fitch Ratings has affirmed the 'BB' rating on Kleen Energy Systems, LLC's $435 million ($308 million outstanding) term loan A due 2018 and $295 million ($279 million outstanding) term loan B due 2024. The Rating Outlook is Negative. Key Rating Drivers -- Fixed price agreements: Kleen's revenues are initially derived from fixed-price tolling and capacity agreements with investment-grade counterparties, partially mitigating price risks through 2017. Once the tolling agreement expires, a scheduled step-down in debt service should moderate Kleen's energy price exposure during the merchant period. Capacity payments should provide additional revenue support over the long term. Revenue Risk: Midrange -- Lack of operational history: Kleen has not yet established a stable cost profile or demonstrated a pattern of consistent operating performance. Fitch anticipates that actual costs will exceed original projections by a wide margin, heightening the potential impact of operational underperformance going forward. Kleen must meet target availability and heat rate requirements to avoid contractual penalties and maximize revenues. Favorably, Kleen benefits from commercially proven, reliable technology operated and maintained by experienced O&M providers. Operation Risk: Weaker -- Minimal supply risk: The tolling agreement provides strong protection against fuel price risk through 2017, though the project is exposed to replacement power costs in the event of a forced outage. Kleen is exposed to margin risks during the merchant period but is not dependent on market-based revenues, as capacity payments alone should be sufficient to meet debt service requirements. Volumetric risks are minimal, as the project is situated in a highly liquid and competitive natural gas market. Supply Risk: Midrange -- Mitigated refinancing risk: Fitch believes it is likely that Kleen will fully prepay the term loan A balloon payment prior to maturity. The supplemental amortization mechanism relies upon contracted revenues during the tolling period, and catch- up provisions provide some protection against temporary interruptions in cash flow. Kleen's debt structure otherwise incorporates standard terms and conditions with adequate liquidity provisions. Debt Structure: Midrange -- Weakened financial profile: Fitch-projected debt service coverage ratios (DSCRs) range between 1.25x and 1.35x during the tolling period under a Fitch rating case that considers a combination of low availability, technical underperformance, and further increases to a deteriorating cost profile. The rating is not constrained by financial performance during the merchant period, primarily due to declining debt service relative to higher projected revenues. Rating Sensitivities -- Cost stability: Consistent demonstration of a stable cost profile would be consistent with the rating, while further increases in costs would heighten the project's vulnerability to operating event risks. -- Operating performance shortfall: Persistently low availability or an accelerated degradation in heat rates would reduce revenue and potentially subject the project to contractual penalties. -- Inability to refinance: In the event that an outstanding balance remains on the term loan A at maturity, market conditions and/or project-specific factors could prevent Kleen from refinancing. Security The collateral includes a first-priority security interest in the ownership interests in Kleen, all real and personal property, including Kleen's rights under the project documents, the project accounts, and all revenues. Credit Update Kleen's recent financial performance generally met Fitch's revised base case projections, which incorporate a combination of lower revenues and higher O&M costs that exceed the sponsor's original projections by an estimated 50% to 60%. Fitch estimates Kleen's DSCR at 1.41x for 2012, exceeding Fitch's 1.35x forecast by a small margin. Kleen has generated sufficient excess cash flow to pay cumulative supplemental amortization payments of $28.5 million on the term loan A, as originally projected. The Negative Outlook reflects the potential for additional volatility in Kleen's cost structure as the project continues its effort to establish a stable operating profile. Fitch will reassess the stability of the project's cost structure once Kleen completes another full year of operations. Regional Greenhouse Gas Initiative expenses in 2013 may exceed the cost incurred in 2012, as allowance prices have risen to more than twice the floor price. The Connecticut Gross Receipts Tax may increase as well, depending upon the price of natural gas and the level of dispatch. Kleen's operational metrics are consistent with original projections, and both availability and heat rates have generally exceeded contractual thresholds. The capacity factor averaged 75% and Kleen achieved availability of 98.64% in 2012. Year-to-date availability through May 2013 fell to 91.5% due to a week-long forced outage in January after the facility experienced fuel oil leaks. The issue was permanently resolved at the expense of Siemens, which performs major maintenance under a long-term services agreement. Kleen incurred approximately $4 million of market-based replacement power charges as a result of the forced outage. Fitch estimates that the outage will have a negative impact of 0.05x on the 2013 DSCR. Revenues otherwise remain subject to the capacity price dispute with Connecticut Light and Power (Fitch IDR 'BBB+' with a Stable Outlook) and variability in nodal pricing differentials under the tolling agreement. Kleen is a special-purpose company created to own and operate the project, which consists of a 620-megawatt combined-cycle electric generating facility located near Middletown, CT. Kleen sells capacity under a 15-year agreement with CL&P. Exelon Generation Company (ExGen, Fitch IDR 'BBB+' with a Stable Outlook) purchases the facility's energy output under a seven-year tolling agreement. Exelon Corp. Fitch IDR 'BBB+' with a Stable Outlook), ExGen's parent, has partially guaranteed ExGen's contractual obligations. LANCER MANAGEMENT: 11th Cir. Tosses Members' Bid for Legal Fees --------------------------------------------------------------- The United States Court of Appeals, Eleventh Circuit, affirmed the denial of the respective motions of John Bendall, Jr., and Martin Garvey for award of attorney's fees and costs stemming from a civil enforcement action initiated by the Securities and Exchange Commission for violations of federal securities laws. Messrs. Bendall and Garvey proceeded pro se in their appeal. On July 8, 2003, the SEC commenced an enforcement action in federal court against Michael Lauer, Lancer Management Group, LLC, and Lancer Management Group II, LLC, as well as several hedge funds that these parties managed including Lancer Offshore, Inc. ("Offshore"); Lancer Partners L.P. ("Partners"); OmniFund, Ltd. ("OmniFund"); LSPV, Inc. ("LSPV"); and LSPV, LLC ("Partners LSPV"), alleging multiple counts of federal securities fraud dating back to March 2000. Mr. Garvey maintained a 10% interest in Lancer, was the manager of Partners, and handled many functions for Lancer, Lancer II, and the various investment funds. Mr. Bendall was a member of the Board of Directors of Offshore and OmniFund. On July 10, 2003, the district court entered an order appointing Marty Steinberg, a Miami attorney, as Receiver, for Lancer, Lancer II, Offshore, OmniFund, LSPV, and Partners LSPV. The Receiver was tasked to, among other things, take immediate possession of all property and assets belonging to any of the Entities, investigate the Entities' financial affairs, and make or authorize payments and disbursements from the Entities' funds and assets. Mr. Bendall acknowledged in his motion for fees that he began accruing legal fees related to his role as director of Offshore and OmniFund as early as Sept. 24, 2003. Mr. Garvey similarly began incurring legal fees related to similar suits as early as July 18, 2003. On Jan. 8, 2004, the district court entered a case management order, upon motion by the Receiver, indicating that "[a]ll persons or entities with claims or demands against any Receivership Entity must present their claims to the Receiver in accordance with this Order." The district court specifically noted that the claims bar date was April 1, 2004. The district court directed the Receiver to provide notice of the claims bar date, either via mail or publication notice, on or before Jan. 23, 2004. Mr. Bendall filed a motion seeking the award of attorney's fees and costs on Nov. 18, 2011, and Mr. Garvey filed a counseled motion for attorney's fees and costs on March 1, 2012. They argued they were entitled to indemnification from the Receivership Entities for attorney's fees and costs based on provisions of Offshore's Articles of Association and Private Placement Memorandum. Mr. Garvey argued he was entitled to reimbursement of $564,112 incurred while defending himself against related civil and criminal charges between 2003 and 2009. Mr. Bendall argued he was entitled to reimbursement of $51,719 incurred while defending himself in two related civil lawsuits. The district court denied both motions, concluding that Messrs. Garvey and Bendall were not entitled to indemnification because they failed to file a proof of claim, contingent or otherwise, by the claims bar date. On appeal, Messrs. Garvey and Bendall argue that the district court erred by denying their motions for attorney's fees and costs, based on the fact that they failed to file a proof of claim by the court-ordered claims bar date of April 1, 2004. They maintain that, because they were legally covered by explicit contractual indemnification provisions, they were entitled to reimbursement of their attorney's fees and costs incurred in connection with Lancer-related litigation as a matter of law. They also counter that the claims bar date did not apply to them because they were not investors or creditors of any of the Receivership Entities, and the indemnification provisions did not contain bar dates. The Eleventh Circuit held that Messrs. Garvey and Bendall possessed a contingent claim for attorney's fees and legal costs under the indemnification provisions contained in Offshore's Articles of Association and PPM prior to the expiration of the claims bar date. Because they were clearly "persons" attempting to assert a "claim" against the Receivership Entities, they were bound by the district court's case management order and, as such, were required to file proofs of claim prior to the claims bar date. The appellate case is, JOHN W. BENDALL, JR., MARTIN GARVEY, Interested Parties-Appellants, v. LANCER MANAGEMENT GROUP, LLC, LANCER MANAGEMENT GROUP II, LLC, et al., Defendants-Appellees, No. 12-16068 (11th Cir.). A copy of the Eleventh Circuit's per curiam decision dated July 9, 2013, is available at http://is.gd/FsJIAT from Leagle.com. LDK SOLAR: Shareholders Re-Elect Four Directors ----------------------------------------------- LDK Solar Co., Ltd., held its annual general meeting on July 10, 2013, at the Company's office in Hong Kong, at which the shareholders approved: (a) the adoption of the 2012 annual report; (b) the adoption of the 2013 stock incentive plan; and (c) the re-election of directors, Peng Xiaofeng (chairman of the board), Liu Zhibin (non-executive director), Liu Xuezhi (non-executive director) and Liang Junwu (independent director). The total number of members of the board of directors of LDK Solar remains at 11. KPMG was re-appointed as LDK Solar's outside auditors for the fiscal year 2013. Shareholders did not approve the issue of warrants in connection with the settlement of an investor's holdings of LDK Solar's 4.75 percent convertible senior notes due April 2013. There were an aggregate of 79,264,399 shares represented in person or by proxy throughout the duration of the meeting, including shares underlying American depositary shares. About LDK Solar LDK Solar Co., Ltd. -- http://www.ldksolar.com-- based in Hi- Tech Industrial Park, Xinyu City, Jiangxi Province, People's Republic of China, is a vertically integrated manufacturer of photovoltaic products, including high-quality and low-cost polysilicon, solar wafers, cells, modules, systems, power projects and solutions. LDK Solar was incorporated in the Cayman Islands on May 1, 2006, by LDK New Energy, a British Virgin Islands company wholly owned by Xiaofeng Peng, LDK's founder, chairman and chief executive officer, to acquire all of the equity interests in Jiangxi LDK Solar from Suzhou Liouxin Industry Co., Ltd., and Liouxin Industrial Limited. LDK Solar Co disclosed a net loss of $1.05 billion on $862.88 million of net sales for the year ended Dec. 31, 2012, as compared with a net loss of $608.95 million on $2.15 billion of net sales for the year ended Dec. 31, 2011. As of March 31, 2013, the Company had $4.99 billion in total assets, $5.29 billion in total liabilities, $356.60 million in redeemable non-controlling interests and a $660.58 million total deficit. KPMG, in Hong Kong, China, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Group has a net working capital deficit and a deficit in total equity as of Dec. 31, 2012, and is restricted from incurring additional indebtedness as it has not met a financial covenant ratio as defined in the indenture governing the RMB-denominated US$-settled senior notes. These conditions raise substantial doubt about the Group's ability to continue as a going concern. LIGHTSQUARED INC: To Proceed to Trial over Ergen Trades ------------------------------------------------------- Reuters reported that bankrupt wireless communications firm Lightsquared Inc plans to go to trial with its lenders over whether Dish Network chairman Charles Ergen's acquisition of big chunks of its loan debt violated an agreement pertaining to how LightSquared can restructure. According to the report, the trial, announced by LightSquared and its lenders after the sides said they could not resolve the dispute consensually, escalates a battle between Ergen and Phil Falcone, head of LightSquared owner Harbinger Capital, over control of the company. The dispute centers on a February agreement between LightSquared and an informal committee of some of its lenders governing certain aspects of LightSquared's restructuring, the report said. Key provisions of the deal have been kept private by the parties. According to court papers filed in the U.S. Bankruptcy Court in Manhattan, the deal hinged on the lender committee being LightSquared's largest creditor constituency, which ceased to be the case once Ergen began buying up large chunks of the debt, thus voiding the deal, LightSquared has argued, the report further related. Ergen has countered that no breach occurred because he eventually joined the committee, the report said. 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. LIGHTSQUARED INC: Status Conference Postponed --------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that LightSquared Inc. was scheduled to have a status conference July 10 in bankruptcy court regarding a dispute where secured lenders charge the company with improperly disregarding a purchase offer from Dish Networks Corp. at a price that would pay creditors in full. According to the report, the status hearing was canceled. Sometimes, contending parties in bankruptcy cases postpone hearings when negotiations are in progress that might result in settlement. The report discloses that barring settlement, there is to be a July 16 hearing where the bankruptcy court will sort out the dispute and decide whether either side violated an agreement giving LightSquared more time to file a reorganization plan. 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. MACCO PROPERTIES: July 17 Hearing on Plan Outline Stricken ---------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Oklahoma entered an order modifying the scheduling order and notice of hearing in relation to the Chapter 11 Plan for Macco Properties, et al. The order provides that the deadline for Jennifer Price, the Plan Proponent, to file and serve a further amended plan of reorganization and disclosure statement is modified to be the 10th day after the closing of the Chapter 11 trustee's pending sale of the Debtor's bankruptcy estate's membership interests in SEP Riverpark Plaza Apartments, LLC and JU Villa Del Mar Apartments, LLC. All other filing deadlines stated in the Court's order of May 16, 2013, are stricken, subject to re-setting upon proper application. The currently scheduled hearing -- July 17 -- to consider the adequacy of an Amended Disclosure Statement is stricken, subject to re-setting upon proper application. Interested party has Jennifer Price requested that the July 17 hearing date be stricken because the existing schedule was premised upon the expectation that the Chapter 11 trustee would complete the sale of the Debtor's membership interests in SEP Riverpark Plaza Apartments, LLC and JU Villa Del Mar Apartments, LLC. On May 31, the parties to the membership sale agreed to extend the closing date of the membership sale to a date not later than June 20. About Macco Properties Oklahoma City, Oklahoma-based Macco Properties, Inc., is a property management company that is the sole or controlling member and/or manager of numerous multi-family residential rental units in Oklahoma City, Oklahoma, Wichita, Kansas, and Dallas, Texas, and several and commercial business properties in Oklahoma City, Oklahoma, and Holbrook, Arizona. Macco Properties filed for Chapter 11 bankruptcy protection (Bankr. W.D. Okla. Case No. 10-16682) on Nov. 2, 2010. The Debtor disclosed $50,823,581 in total assets, and $4,323,034 in total liabilities. Affiliated entities also sought bankruptcy protection: NV Brooks Apartm ents, LLC (10-16503); JU Villa Del Mar Apartments, LLC and (10-16842); and SEP Riverpark Plaza, LLC (10-16832). SEP Riverpark Plaza owns or controls The Riverpark Apartments, a multi-family apartment complex located in Wichita, Kansas. Receivership Services Corp., a division of the Martens Cos., serves as property manager for the six Wichita apartment complexes caught up in the bankruptcy of Macco Properties of Oklahoma City. On May 31, 2011, an Order was entered appointing Michael E. Deeba as the Chapter 11 Trustee for Macco Properties. He is represented by Christopher T. Stein, of counsel to the firm of Bellingham & Loyd, P.C. Grubb & Ellis/Martens Commercial Group LLC acts as the Chapter 11 Trustee's exclusive listing broker/realtor for properties. The Official Unsecured Creditors' Committee is represented by Ruston C. Welch, at Welch Law Firm, P.C., in Oklahoma City. MARIAH RE: Wants $100MM Back After 'Falsified' Storm Report ----------------------------------------------------------- Bibeka Shrestha of BankruptcyLaw360 reported that the liquidators of Mariah Re Ltd. have launched a $100 million suit against American Family Mutual Insurance Co., ISO Services Inc. and AIR Worldwide Corp. in New York federal court, claiming a doctored report let American Family score more reinsurance than it was owed for a severe April 2011 storm. According to the report, Mariah, a special purpose vehicle created to provide reinsurance to American Family for severe weather- related losses, filed a complaint July 3, accusing the companies of flagrantly violating basic agreements. The case is Mariah Re Ltd. (In Liquidation) v. American Family Mutual Insurance Company et al., Case No. 1:13-cv-04657 (S.D.N.Y.) before Judge Richard J. Sullivan. Messrs. Geoffrey Varga and Jess Shakespeare of Kinetic Partners were appointed as new liquidators of Mariah Re. The Liquidators can be reached at: Geoffrey Varga Jess Shakespeare KINETIC PARTNERS (CAYMAN) LIMITED The Harbour Centre, 42 North Church Street P.O. Box 10387, Grand Cayman KY1-1004 Cayman Islands MERRIMACK PHARMACEUTICALS: To Offer $125 Million of Securities -------------------------------------------------------------- Merrimack Pharmaceuticals, Inc., intends to offer, subject to market and other conditions, $50 million of its common stock and $75 million in aggregate principal amount of its convertible senior notes due 2020 in concurrent underwritten public offerings pursuant to Merrimack's effective Registration Statement on Form S-3. Merrimack expects to grant the underwriters in the common stock offering an option, exercisable for 30 days, to purchase up to an additional $7.5 million of its common stock and to grant the underwriters in the Notes offering an option, exercisable for 30 days, to purchase up to an additional $11.25 million in aggregate principal amount of the Notes. The interest rate, conversion rate, conversion price and other terms of the Notes offered in the Notes offering and the public offering price of the shares of common stock offered in the common stock offering will be determined by negotiations between Merrimack and the underwriters in the respective offerings. Merrimack expects to use the net proceeds from both offerings to complete the clinical development of, seek marketing approval for and fund pre-approval commercial efforts for MM-398 for the treatment of patients with metastatic pancreatic cancer whose cancer has progressed on treatment with the chemotherapy drug gemcitabine, to partially fund the clinical development of other clinical stage product candidates (including MM-398 for indications other than pancreatic cancer), to fund pre-clinical and research and development efforts and for other general corporate purposes. J. P. Morgan Securities LLC and BofA Merrill Lynch are acting as joint book-running managers of these proposed offerings. Cowen and Company, LLC, is acting as lead manager of the proposed common stock offering and co-manager of the proposed Notes offering. Oppenheimer & Co. Inc., Guggenheim Securities, LLC, and Brean Capital, LLC, are acting as co-managers of the proposed common stock offering. The common stock offering and the Notes offering will be conducted as separate public offerings by means of separate prospectus supplements filed as part of the Registration Statement. The common stock offering is not contingent upon the completion of the Notes offering, and the Notes offering is not contingent upon the completion of the common stock offering. About Merrimack Cambridge, Mass.-based Merrimack Pharmaceuticals, Inc., a biopharmaceutical company discovering, developing and preparing to commercialize innovative medicines consisting of novel therapeutics paired with companion diagnostics. The Company's initial focus is in the field of oncology. The Company has five programs in clinical development. In it most advanced program, the Company is conducting a pivotal Phase 3 clinical trial. Merrimack Pharmaceuticals disclosed a net loss of $91.75 million in 2012, following a net loss of $79.67 million in 2011. The Company incurred a $50.15 million net loss in 2010. The Company's balance sheet at March 31, 2013, showed $127.32 million in total assets, $159.46 million in total liabilities, a $32.06 million total stockholders' deficit, and a $73,000 non-controlling deficit. METEX MFG: Can Employ Rath Young as Local Counsel ------------------------------------------------- Metex Mfg. Corporation sought and obtained approval from the Bankruptcy Court to employ Rath, Young & Pignatelli, P.C. as local counsel to assist in the Debtor's intervention in liquidation proceedings of The Home Insurance Company in New Hampshire, nunc pro tunc to June 6, 2013. Steven J. Lauwers, Esq., attests that Rath Young is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Compensation and reimbursement of expenses to Rath Young are capped at $50,000 in any single year. 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. MIDTOWN SCOUTS: Taps Hawash Meade as Special Litigation Counsel --------------------------------------------------------------- Midtown Scouts Square Property, LP, and Midtown Scouts Square, LLC, sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of Texas to employ D. John Neese, Jr., Esq., at Hawash Meade Gaston Neese & Cicack LLP as special litigation counsel. The Debtors sought to retain the firm to provide the Debtors with legal advice and services with respect to assisting, advising, investigating, and prosecuting certain claims through trial and appeal for the Debtors in the case styled Richey Family Limited Partnership, Ltd., et al., v. Midtown Scouts Square Property, LP, et al., which was pending in the before the 268th Judicial District Court, Fort Bend County, Texas, subsequently been removed to this court and assigned Adversary Proceeding No. 13-03108, including prosecuting any Motion to Estimate Claim of the Richey Family Limited Partnership, et al., pursuant to 11 U.S.C. Section 502(c) (collectively, the "Richey Litigation"). The hourly rates of Special Counsel for Adversary No. 13-03108 and the Richey Litigation are: Professional Rates ------------ ----- D. John Neese, Jr. $375.00 Andrew K. Meade $375.00 Associates $200.00 Paralegals/Legal Assistants $75.00 D. John Neese, Jr., will be designated as attorney-in-charge and will be responsible for the representation. About Midtown Scouts Square Midtown Scouts Square Property, LP, and affiliate Midtown Scouts Square, LLC, own two commercial properties located in Midtown Houston, Texas. The first property is a mixed use 36,000 squarefoot two-story office/restaurant building originally constructed in 1975, while the second property is a 104,000-square foot eight-storey parking garage with ground floor retail space, both in Bagby Street, in Houston. The two entities sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 13-32920) on May 9, 2013. The petitions were signed by Erich Mundinger as president of general partner. Judge Karen K. Brown presides over the case. MSS Property estimated assets and debts of at least $10 million. Hoover Slovacek, LLP, serves as the Debtor's counsel. MONITRONICS INTERNATIONAL: Moody's Affirms Ba3 Rating on New Debt ----------------------------------------------------------------- Moody's Investors Service affirmed the Ba3 rating on the proposed upsized $225 million first lien revolver and $916 million term loan offered by Monitronics International, Inc. Additionally, a Caa1 rating was assigned to the proposed $150 million add-on to the senior unsecured notes due 2020. Moody's affirmed Monitronics' B2 Corporate Family Rating and maintained the stable ratings outlook. Proceeds from the incremental term loan and notes, along with an intercompany loan and an equity contribution from parent Ascent Capital Group, Inc., will be used to finance the acquisition of Security Networks, LLC and repay approximately $20 million of borrowings on the revolver. The $508 million purchase price represents about a 58x multiple of estimated recurring monthly revenue of $8.8 million at August 31, 2013. Ratings assigned (and Loss Given Default assessments): Proposed $150 million senior unsecured notes due April 2020, Caa1 (LGD5, 81%) Ratings affirmed (and Loss Given Default assessments): $225 million (upsized from $150 million) first lien revolver due December 2017, Ba3 (LGD2, to 29% from 32%) $916 million (upsized from $691 million) first lien term loan due March 2018, Ba3 (LGD2, to 29% from 32%) $410 million senior unsecured notes due April 2020, Caa1 (LGD5, to 81% from 86%) Corporate Family Rating, B2 Probability of Default Rating, B2-PD Speculative Grade Liquidity Rating, SGL-3 All ratings are contingent upon closing of the transaction and Moody's review of final documentation. Ratings Rationale: "The acquisition of Security Networks will boost Monitronics share in the growing residential alarm monitoring market and expand its dealer network, a key component to growth," stated Moody's analyst Suzanne Wingo. Although financial leverage will rise initially, Moody's expects Monitronics to use cash generation for incremental subscriber accounts. The upsized revolver will provide greater capacity to further grow the business. The B2 CFR reflects Moody's expectation for a de-leveraging of debt / RMR to the 35-37x range over the next 12-18 months as Monitronics grows RMR by about 10% annually. At closing and at the end of 2013, Moody's estimates that debt / RMR will be between 38- 39x, which is weaker than B2-rated competitors Protection One and Vivint (APX Group). Subscriber contracts provide steady and predictable revenue streams, subject to expectations for attrition rates. Like its competitors, Monitronics must spend a significant amount annually to replace customers lost to attrition. However, Moody's estimates that free cash flow would be positive in a steady state customer- acquisition scenario. The dealer sales model provides a partly variable cost structure and greater flexibility. The residential alarm monitoring industry is highly fragmented with low barriers to entry and is seeing heightened competition from cable and telecommunication providers entering the market in an attempt to sell additional services to existing customers. Secular changes in technology and consumer preferences provide a longer-term threat. The stable outlook reflects Moody's expectation that Monitronics will successfully integrate Security Networks while continuing to grow RMR by about 10% annually on a pro forma basis, using cash and the revolver to fund purchases of new subscriber contracts from dealers. While not expected in the near term, the ratings could be upgraded if Monitronics sustains debt / RMR below 30x and free cash flow (before growth spending) to debt above 10% while maintaining a good liquidity profile. Conversely, the ratings could be downgraded if debt / RMR is sustained above 38x, attrition rates or dealer multiples increase materially, liquidity deteriorates, or free cash flow (before growth spending) approaches breakeven. The principal methodology used in this rating was Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Headquartered in Dallas, Monitronics is owned by Ascent Capital Group, Inc. (ticker: ASCMA). Pro forma for the acquisition, Monitronics will provide monitored home security alarm services to more than 1 million residential and commercial customers. MONITRONICS INTERNATIONAL: S&P Affirms 'B' CCR; Outlook Stable -------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on Dallas, Texas-based Monitronics International Inc. The outlook is stable. S&P also affirmed its 'B' issue rating on the company's $913.8 million first-lien term loan (this amount includes the new $225 add-on) and $225 million revolver (includes the new $75 million commitment). The recovery rating remains '3', indicating S&P's expectation for meaningful (50% to 70%) recovery for lenders in the event of payment default. In addition, S&P affirmed its 'CCC+' issue-level rating on the company's $560 million senior unsecured notes (this amount includes the new $150 million add-on). The recovery rating on this debt is unchanged at '6', indicating S&P's expectation for negligible (0% to 6%) recovery for lenders in the event of payment default. The company is using the new debt proceeds, as well as funds downstreamed from Ascent, to acquire Security Networks, to repay $19.9 million of the outstanding revolver, and to pay the transaction's fees and expenses. Pro forma for the transaction, Standard & Poor's adjusted debt to adjusted last quarter ended March 31, 2013, annualized EBITDA will increase to approximately 8.6x from 7.2x. However, S&P expects that leverage will decline to the low-8.0x area by the end of fiscal 2014, largely through EBITDA growth. "The rating on Monitronics reflects the company's 'highly leveraged' financial risk profile [as defined in our criteria], its reliance on debt to fund anticipated growth, and its 'weak' business risk profile [under our criteria], which reflects its second-tier position in the highly fragmented industry it participates in," said Standard & Poor's credit analyst Katarzyna Nolan. These factors are partially offset by a highly recurring and rapidly growing revenue base. Monitronics uses the dealer origination model to acquire new customer accounts. Under this model, the company purchases accounts from a network of independent dealers instead of creating the accounts internally. This results in a lower and more flexible cost structure, but also in higher customer creation costs than for internally created accounts. Free cash flow is also lower because account acquisition expenses are reflected on the cash flow statement. Since the industry attrition rate is about 10% to 14% annually, significant customer acquisitions are necessary just to maintain level operating cash flow and subscriber base. The stable rating outlook reflects S&P's expectation that the company will achieve improved credit metrics over the next year through revenue and EBITDA growth. An upgrade in the near term is unlikely, given the company's highly leveraged financial profile and S&P's view that it will continue using debt to finance growth rather than to repay debt. S&P could lower the rating if the company's operating performance deteriorates due to acquisition integration issues or increased competition. S&P could also lower the rating if a spike in attrition makes additional customer account acquisitions necessary, and consequently, leads to a deterioration in cash flow and liquidity such that the covenant cushion is below 15% on a sustained basis or leverage doesn't track toward the low-8x area over the next year as expected. MORGUARD REAL ESTATE: DBRS Confirms 'BB' Issuer Rating ------------------------------------------------------ DBRS has confirmed the Issuer Rating of Morguard Real Estate Investment Trust (Morguard or the Trust) at BB (high) with a Stable trend. The confirmation acknowledges Morguard's steady growth in operating income and enhanced geographic diversification in Western Canada achieved through the Trust's recent acquisitions, while reflecting the fact that the Trust continues to have considerable property concentration and a relatively small portfolio, both of which are limiting factors for rating improvement. The Stable trend reflects DBRS's expectation that operating income growth will remain consistent in the near to medium term and also incorporates the potential for moderately higher financial leverage that may be incurred with the refinancing of upcoming debt maturities in 2013. The rating reflects Morguard's: (1) stable core of retail properties and government-leased office buildings, (2) consistent occupancy in the mid-90% range, (3) asset type diversification and (4) good financial credit metrics for the rating category. However, the rating is limited by the Trust's: (1) above-average property concentration, (2) relatively small portfolio, (3) exposure to Hudson's Bay Company and Sears Canada Inc. and (4) high level of secured debt as a proportion of total debt. For the 12-month period ended March 31, 2013, Morguard achieved mid-single digit growth in operating income, mainly as a result of incremental cash flow contributions from property acquisitions in 2012 and the latter part of 2011. Morguard's portfolio maintains solid occupancy levels (96% as at Q1 2013) based on the stability of the Trust's core enclosed shopping centres and government office tenancies. Morguard's same-portfolio net operating income growth was a respectable 3.4% for the quarter, benefiting from higher rental rates primarily in the Central Canada segment of the portfolio. In terms of financial profile, Morguard funded its 2012 property acquisitions primarily with debt, while coverage metrics remained conservative mainly due to higher operating income. The Stable rating outlook reflects DBRS's expectation that Morguard will continue to achieve reasonable growth in operating income, predominately from its acquisition of a 100% interest in Penn West Plaza (a Class A office property located in the central business district of downtown Calgary) in Q4 2012. This property is 100% leased to Penn West Petroleum Ltd. under a 12-year lease term, which should enhance cash flow stability going forward. In terms of financial profile, DBRS expects Morguard to incur moderately higher financial leverage when it refinances upcoming debt maturities, particularly the $170.7 million of first mortgage bonds secured by St. Laurent Centre due on December 31, 2013. DBRS expects any incremental portion of proceeds from prospective debt refinancing would be used to repay short-term debt (credit facilities and the revolver from Morguard Corporation) and fund opportunistic acquisitions. That said, DBRS expects that any increase in financial leverage would remain commensurate with the current rating category (i.e., EBITDA interest coverage should remain above 2.30 times). Morguard could experience a negative rating action if it delivers materially weaker-than-expected operating and earnings performance, and/or EBITDA interest coverage below 2.30 times on a sustained basis. On the other hand, a positive rating action would likely be the result of a material increase in portfolio size, improved property and geographic diversification and/or a decrease in financial leverage that results in EBITDA interest coverage above 3.00 times on sustained basis. MOUNTAIN PROVINCE: Gahcho Kue Inks Impact Benefit Agreement ----------------------------------------------------------- De Beers, as operator of the Gahcho Kue Project, has entered into an Impact Benefit Agreement with the North Slave Metis Alliance for the proposed Gahcho Kue Mine. The agreement sets in place a framework for De Beers and the North Slave Metis Alliance to optimize the participation of the North Slave Metis Alliance in the Gahcho Kue Mine through employment, business opportunities, training and development, and financial benefits. "This is the first Impact Benefit Agreement to be concluded for the proposed Gahcho Kue Mine," said Glen Koropchuk, chief operating officer. "The two negotiating teams worked hard and efficiently to complete this agreement, which is mutually beneficial and builds on the strong relationship already established. It incorporates the shared learning we have from our experience working together over the years at the Snap Lake Mine, which is also operated by De Beers. The negotiation of further impact benefit agreements is continuing." "This is a good day for the North Slave Metis Alliance," said Bill Enge, president. "The life of mine Impact Benefit Agreement that we signed with De Beers for the proposed Gahcho Kue diamond mine ensures the North Slave M�tis people will benefit from this development. We're looking forward to working with and strengthening our relationship with De Beers. They have a great track record of working with us with respect to their Snap Lake diamond mine and we have every reason to believe their Gahcho Kue mine track record will be matched." The Gahcho Kue diamond mine will have a mine life of approximately eleven years, will employ up to 700 people during construction and approximately 400 people during operations. It will produce on average 4.5 million carats annually over its mine life. About Mountain Province Headquartered in Toronto, Canada, Mountain Province Diamonds Inc. (TSX: MPV, NYSE AMEX: MDM) -- http://www.mountainprovince.com/-- is a Canadian resource company in the process of permitting and developing a diamond deposit known as the "Gahcho Kue Project" located in the Northwest Territories of Canada. The Company's primary asset is its 49% interest in the Gahcho Kue Project. Mountain Province disclosed a net loss of C$3.33 million for the year ended Dec. 31, 2012, a net loss of C$11.53 million in 2011, and a net loss of C$14.53 million in 2010. "The Company's primary mineral asset is in the exploration and evaluation stage and, as a result, the Company has no source of revenues. In each of the years December 31, 2012, 2011 and 2010, the Company incurred losses, and had negative cash flows from operating activities, and will be required to obtain additional sources of financing to complete its business plans going into the future. Although the Company had working capital of $46,653,539 at December 31, 2012, including $47,693,693 of cash and cash equivalents and short-term investments, the Company has insufficient capital to finance its operations and the Company?s costs of the Gahcho Kue Project (Note 7) over the next 12 months. The Company is currently investigating various sources of additional funding to increase the cash balances required for ongoing operations over the foreseeable future. These additional sources include, but are not limited to, share offerings, private placements, credit and debt facilities, as well as the exercise of outstanding options. However, there is no certainty that the Company will be able to obtain financing from any of those sources. These conditions indicate the existence of a material uncertainty that results in substantial doubt as to the Company's ability to continue as a going concern," according to the Company's annual report for the period ended Dec. 31, 2012. MPG OFFICE: Settles Lawsuits Re Brookfield Acquisition Proposal --------------------------------------------------------------- MPG Office Trust, Inc., and other named defendants have entered into a memorandum of understanding with plaintiffs' counsel in connection with the previously consolidated putative common stockholder class action lawsuits filed in Maryland and California state court in connection with the proposed acquisition of MPG by Brookfield Office Properties Inc. Under the terms of the MOU, MPG will: (i) provide additional disclosures in an amendment to its proxy statement on July 10, 2013; (ii) amend the Agreement and Plan of Merger between MPG and certain affiliates of BPO to permit the Company to release third parties currently subject to confidentiality agreements with the Company from any standstill restrictions contained in those agreements; and (iii) file a current report on Form 8-K with respect to those additional disclosures, the MOU and the Merger Agreement amendment. The MOU reflects the parties' agreement in principle to resolve the allegations by settling the common stockholder plaintiffs' actions against MPG and other defendants in connection with the Merger Agreement and provides a release and settlement by the purported class of MPG's common stockholders of all claims against MPG and other defendants and their affiliates and agents in connection with the Merger Agreement. On July 10, 2013, in connection with the MOU, MPG entered into an amendment to the Merger Agreement that amends the standstill provisions of the Merger Agreement to permit MPG to release third parties currently subject to confidentiality agreements with MPG from any standstill restrictions contained in such agreements. Accordingly, the Company has waived all standstill restrictions contained in those third party confidentiality agreements. The MOU and settlement are contingent upon, among other things, approval of the Superior Court of the State of California in Los Angeles County, further definitive documentation and consummation of the merger as set forth in the Merger Agreement. In the event that the MOU is not approved and those conditions are not satisfied, the Company will continue to vigorously defend these actions. 2nd Amendment to Plan of Merger MPG Office Trust, Inc., MPG Office, L.P., Brookfield DTLA Holdings LLC, Brookfield DTLA Fund Office Trust Investor Inc., Brookfield DTLA Fund Office Trust Inc., and Brookfield DTLA Fund Properties LLC, entered into a Second Amendment to Agreement and Plan of Merger to that certain Agreement and Plan of Merger, dated as of April 24, 2013, which provides for the merger of the Company with and into REIT Merger Sub, with REIT Merger Sub surviving the REIT Merger, and a merger of Partnership Merger Sub with and into the Partnership, with the Partnership surviving the Partnership Merger. The Amendment amends the Merger Agreement to permit the Company to release third parties currently subject to confidentiality agreements with the Company from any standstill or similar provision contained in such agreements. A copy of the Amendment is available for free at http://is.gd/ea9I9L 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." MSI CORPORATION: Can Employ McGuireWoods LLP as Counsel ------------------------------------------------------- MSI Corporation sought and obtained permission from the Bankruptcy Court to employ McGuireWoods LLP as counsel. McGuireWoods' current customary hourly rates for individuals expected to participate in the Chapter 11 cases range from $235 to $625. Michael J. Roeschenthaler, Esq., attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Counsel for the Debtor can be reached at: Michael J. Roeschenthaler, Esq. Scott E. Schuster, Esq. 625 Liberty Avenue, 23rd Floor Pittsburgh, PA 15222 Tel: (412) 667-6000 Fax: (412) 667-6050 E-mail: mroeschenthaler@mcguirewoods.com sschuster@mcguirewoods.com MSI Corporation filed a bare-bones Chapter 11 petition (Bankr. W.D. Pa. Case No. 13-22457) in Pittsburgh on June 7, 2013. The Vandergrift, Pennsylvania-based company estimated at least $10 million in assets and less than $10 million in liabilities. MSI CORPORATION: Files Amended List of Top Unsecured Creditors -------------------------------------------------------------- MSI Corporation submitted to the Bankruptcy Court an amended list that identifies its top 20 unsecured creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Euler Hermes Collections Attn: Dennis Brown Huston debt $270,230.11 600 South 7th Street Louisville, KY 40203 Dynamark Security Centers Trade debt 32,617.76 6622 Jefferson Road Corpus Christi, TX 78413 D&S Industrial Contracting Trade debt 27,040.00 4200 Casteel Drive Coraopolis, PA 15108 H&K Equipment Company Fork Lifts 22,038.30 4200 Casteel Drive Coraopolis, PA 15108 Production Abrasives, Inc. Trade debt 19,740.00 46 Sheesley Way P.O. Box 60 Hamilton, PA 15744 Peoples Natural Gas 16,197.84 P.O. Box 644760 Pittsburgh, PA 15264 Ellison Industrial Controls Trade debt 11,071.90 19 State Street Belle Vernon, PA 15012 Stenger, Bies & Company, 7,886.37 Inc. 1910 Cochran Road Suite 726 Pittsburgh, PA 15220 ParenteBeard LLC professional 6,552.00 20 Stanwix Street Services rendered Suite 800 Pittsburgh, PA 15222 Smith Tool & Supply Production supplies 4,067.91 67 Tool Lane New Bethlehem, PA 16242 First Insurance Funding Trade debt 3,267.06 Corp. P.O. Box 64468 Chicago, IL 60666 Solideal Industrial Tire Trade debt 2,243.27 5 Acee Drive Natrona Heights, PA 15065 Erie Bearings Company Machinery repairs 2,182.76 P.O. Box 10307 Erie, PA 16514 R.L. Holliday Company, Inc. Production 1,782.00 525 McNeilly Road supplies Pittsburgh, PA 15226 MSC Industrial Suppy Co. Production 1,670.79 Inc. & Safety Supplies Dept. CH 0075 Palatine, IL 60055-0075 Cintas Corporation 961.15 P.O. Box 625737 Cincinnati, OH 45262 ENI USA, Inc. Trade debt 935.56 P.O. Box 7247-7028 Philadelphia, PA 19170 McCutcheon Enterprises, 679.00 Inc. P.O. Box 2339 Pittsburgh, PA 15230 Direct Reimbursement P.O. Box 292455 Trade debt 130.30 Dayton, OH 45429 Flow International Corporation 2.01 23500 64th Avenue South Kent, WA 98032 MSI Corporation filed a bare-bones Chapter 11 petition (Bankr. W.D. Pa. Case No. 13-22457) in Pittsburgh on June 7, 2013. The Vandergrift, Pennsylvania-based company estimated at least $10 million in assets and less than $10 million in liabilities. MSR RESORT: Five Mile Says Bidding Plan Wastes IP Assets -------------------------------------------------------- Stewart Bishop of BankruptcyLaw360 reported that Five Mile Capital Partners LLC lodged a blistering objection to proposed bidding procedures for intellectual property assets of Paulson & Co.'s bankrupt real estate investment trust MSR Hotels & Resorts Inc., saying the REIT's plan is a recipe for wasting its assets. According to the report, the alternative investment fund, which labels itself as one of MSR's largest creditors, said MSR's bidding procedures would limit the abilities of the debtor and potential bidder to put MSR's intellectual property assets to their best and most valuable use. In a separate report, Maria Chutchian of BankruptcyLaw360 said that Paulson & Co.'s real estate investment trust MSR Hotels slammed Five Mile Capital's bid to convert MSR's bankruptcy to a Chapter 7 case, saying the fund is getting in the way of its efforts to sell intellectual property assets. The REIT's objection comes a week after Five Mile petitioned a New York bankruptcy judge to convert the Chapter 11 case or to appoint a trustee based on its belief that MSR's management is conflicted. About MSR Hotels MSR Hotels & Resorts, Inc., returned to Chapter 11 by filing a voluntary bankruptcy petition (Bankr. S.D.N.Y. Case No. 13-11512) on May 8, 2013 in Manhattan. MSR Hotels & Resorts, formerly known as CNL Hospitality Properties, Inc., and as CNL Hotels & Resorts, Inc., listed $500,001 to $1 million in assets, and $50 million to $100 million in liabilities in its petition. Paul M. Basta, Esq., at Kirkland & Ellis, LLP, represents the Debtor. MSR Resorts sought Chapter 11 bankruptcy to thwart a lawsuit by lender Five Mile Capital Partners that claims it is owed tens of millions of dollars related to the recent sale of several luxury resorts. MSR Hotels will seek to sell its remaining assets and wind down. MSR Hotels, formerly known as CNL Hotels & Resorts Inc., owned a portfolio of eight luxury hotels with over 5,500 guest rooms. On Jan. 28, 2011, CNL-AB LLC acquired the equity interests in the portfolio through a foreclosure proceeding. CNL-AB LLC is a joint venture consisting of affiliates of Paulson & Co. Inc., a joint venture affiliated with Winthrop Realty Trust, and affiliates of Capital Trust, Inc. Morgan Stanley's CNL Hotels & Resorts Inc. owned the resorts before the Jan. 28 foreclosure. Following the acquisition, five of the resorts with mortgage debt scheduled to mature on Feb. 1, 2011, were sent to Chapter 11 bankruptcy by the Paulson and Winthrop joint venture affiliates. Then known as MSR Resort Golf Course LLC, the company and its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 11-10372) in Manhattan on Feb. 1, 2011. The resorts subject to the 2011 filings were Grand Wailea Resort and Spa, Arizona Biltmore Resort and Spa, La Quinta Resort and Club and PGA West, Doral Golf Resort and Spa, and Claremont Resort and Spa. In the 2011 petitions, the five resorts had $2.2 billion in assets and $1.9 billion in debt as of Nov. 30, 2010. In its 2011 schedules, MSR Resort disclosed $59,399,666 in total assets and $1,013,213,968 in total liabilities. In the 2011 bankruptcy, James H.M. Sprayregen, P.C., Esq., Paul M. Basta, Esq., Edward O. Sassower, Esq., and Chad J. Husnick, Esq., at Kirkland & Ellis, LLP, served as the Debtors' bankruptcy counsel. Houlihan Lokey Capital, Inc., acted as the Debtors' financial advisor. Kurtzman Carson Consultants LLC acted as the Debtors' claims agent. The Official Committee of Unsecured Creditors in the 2011 case was represented by Martin G. Bunin, Esq., and Craig E. Freeman, Esq., at Alston & Bird LLP, in New York. In March 2012, the Debtors won Court approval to sell the Doral Golf Resort to Trump Endeavor 12 LLC, an affiliate of Donald Trump's Trump Organization LLC, for $150 million. An auction was held in February that year but no other bids were received. The 2011 Debtors won approval of a bankruptcy-exit plan in February this year. That plan was predicated on the sale of the remaining four resorts by the Government of Singapore Investment Corp. -- the world's eighth-largest sovereign wealth fund, according to the Sovereign Wealth Fund Institute -- for $1.5 billion. U.S. Bankruptcy Judge Sean Lane, who oversaw the 2011 cases, overruled Plan objections by the U.S. Internal Revenue Service and investor Five Mile. The IRS and Five Mile alleged that the sale created a tax liability of as much as $331 million that may not be paid. Bloomberg News reported that the exit plan provides for repayment of 96% of secured debt and 100% of general unsecured debt. Five Mile stood to lose about $58 million, including investments by pension funds and other parties, David Friedman, Esq., a lawyer for Five Mile, said during the Plan approval hearing, according to Bloomberg. That Plan was declared effective on Feb. 28, 2013. On April 9, 2013, Five Mile sued Paulson & Co. executives and MSR Hotels in New York state court, alleging they (i) mishandled the company's intellectual property and other assets in a bankruptcy sale, and failed to get the best price for the assets, and (ii) owe Five Mile $58.7 million on a loan. According to a Reuters report, Five Mile seeks $58.7 million representing sums owed, including interest and costs, plus at least $100 million for breach of fiduciary duty, gross negligence and corporate waste. NAVISTAR INTERNATIONAL: BNY Owned 35% Preferred Shares at June 30 ----------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, The Bank of New York Mellon Corporation and BNY Mellon, National Association, disclosed that, as of June 30, 2013, they beneficially owned 45,000 preferred stock of Navistar International Corporation representing 35.6 percent of the shares outstanding. A copy of the regulatory filing is available at: http://is.gd/3eXZPk 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. NEOMEDIA TECHNOLOGIES: B. Liben Had 9.9% Equity Stake at June 27 ---------------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Barry Liben disclosed that as of June 27, 2013, he beneficially owned 444,444,444 shares of common stock of NeoMedia Technologies, Inc., representing 9.9 percent of the shares outstanding. A copy of the regulatory filing is available for free at http://is.gd/gYAISf About NeoMedia Technologies Atlanta, Ga.-based NeoMedia Technologies provides mobile barcode scanning solutions. The Company's technology allows mobile devices with cameras to read 1D and 2D barcodes and provide "one click" access to mobile content. The Company reported a net loss of $849,000 in 2011, compared with net income of $35.09 million in 2010. The Company's balance sheet at March 31, 2013, showed $5.23 million in total assets, $62.51 million in total liabilities, all current, $5.18 million in convertible preferred stock and a $62.46 million total shareholders' deficit. After auditing the 2011 results, Kingery & Crouse, P.A, in Tampa, FL, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has suffered recurring losses from operations and has ongoing requirements for additional capital investment. NEW TRIDENT: S&P Assigns 'B' CCR & Rates $415MM Facility 'B' ------------------------------------------------------------ Standard & Poor's Ratings Services said it assigned its 'B' corporate credit rating to Sparks, Md.-based New Trident Holdcorp Inc. Upon closing of the transaction, S&P will withdraw its 'B' corporate credit rating on Trident USA Health Services LLC. At the same time, S&P assigned its 'B' issue-level rating to New Trident Holdcorp Inc.'s (coissued by FCT Hospice LLC and Trident Clinical Services Holdings Inc. $415 million senior secured first- lien credit facility with a recovery rating of '3', indicating S&P's expectation for meaningful (50%-70%) recovery of principal in the event of payment default. S&P also assigned its 'CCC+' issue-level rating to its $155 million senior secured second-lien term loan with a recovery rating of '6', indicating S&P's expectation for negligible (0%-10%) recovery in the event of payment default. S&P intends to withdraw the ratings on MX USA Inc. and Kan-Di-Ki LLC at closing. "The ratings on New Trident Holdcorp Inc. reflect its "highly leveraged" financial risk profile, highlighted by our expectation that its debt-to-EBITDA ratio will remain above 5x. It also incorporates our belief that the company will pursue a more aggressive financial policy, including the potential for dividends," said credit analyst John Babcock. "The company's "weak" business risk profile is characterized by its aggressive roll-up strategy, reimbursement risk from Medicare, and the highly competitive and fragmented nature of the industry in which it operates. We acknowledge that the Life Choice acquisition diversifies its service offerings and further improves its position at skilled nursing facilities, but we believe the overall impact on its business risk profile is minimal." S&P's stable rating outlook reflects its expectation that growth strategies will absorb available cash flow and limit debt reduction. As a result, S&P anticipates that its debt-to-EBITDA ratio will remain above 5x. S&P would consider a lower rating if the company's EBITDA margin declines by more than 300 bps, leading to neutral cash flow and a covenant cushion below 10%. In such a scenario, S&P believes the company would have a limited ability to make required debt amortization payments and refinance, if necessary. An upgrade would be predicated on sustainably lower debt leverage, including a debt-to-EBITDA ratio near 4.5x. S&P estimates this would likely occur if the company reduces its debt burden by $250 million or if its EBITDA expands by about $40 million. S&P sees either scenario as unlikely given limited free cash flow available to reduce debt and margin pressures. NEWLEAD HOLDINGS: Supreme Court OKs Settlement with Hanover ----------------------------------------------------------- The Supreme Court of the State of New York, County of New York, on July 9, 2013, approved a settlement agreement between NewLead Holdings Ltd., and Hanover Holdings I, LLC, in the matter entitled Hanover Holdings I, LLC v. NewLead Holdings Ltd., Case No. 155723/2013. Hanover commenced the Action against the Company on June 21, 2013, to recover an aggregate of $7,205,547 of past-due accounts payable of the Company, which Hanover had purchased from certain vendors of the Company pursuant to the terms of separate receivable purchase agreements between Hanover and each of those vendors, plus fees and costs. The Assigned Accounts relate to certain legal, insurance, broker, bunker, consulting and other services and supplies provided by certain vendors of the Company. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on July 9, 2013. Pursuant to the terms of the Settlement Agreement approved by the Order, on July 10, 2013, the Company issued and delivered to Hanover 61,000,000 shares of the Company's common stock, $0.01 par value. Giving effect to that issuance, the Settlement Shares represent approximately 9.92 percent of the total number of shares of Common Stock presently outstanding. A complete copy of the Form 8-K is available for free at: http://is.gd/IVB4QD About NewLead Holdings Ltd. NewLead Holdings Ltd. -- http://www.newleadholdings.com-- is an international, vertically integrated shipping company that owns and manages product tankers and dry bulk vessels. NewLead currently controls 22 vessels, including six double-hull product tankers and 16 dry bulk vessels of which two are newbuildings. N ewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. PricewaterhouseCoopers S.A. in Athens, Greece, said in a May 15, 2012, audit report NewLead Holdings Ltd. has incurred a net loss, has negative cash flows from operations, negative working capital, an accumulated deficit and has defaulted under its credit facility agreements resulting in all of its debt being reclassified to current liabilities. These raise substantial doubt about its ability to continue as a going concern, PwC said. Newlead Holdings's balance sheet balance sheet at June 30, 2012, showed US$111.28 million in total assets, US$299.37 million in total liabilities and a US$188.08 million total shareholders' deficit. NEWLEAD HOLDINGS: Hanover Held 9.9% Equity Stake at July 9 ---------------------------------------------------------- In a Schedule 13G filing with the U.S. Securities and Exchange Commission, Hanover Holdings I, LLC, and Joshua Sason disclosed that, as of July 9, 2013, they beneficially owned 61,000,000 shares of common stock of Newlead Holdings Ltd. representing 9.92 percent of the shares outstanding. Mr. Sason is the Chief Executive Officer of Hanover and owns all of the membership interests in Hanover. The 61,000,000 shares of common stock owned directly by Hanover were acquired by Hanover pursuant to an order entered by the Supreme Court of the State of New York, County of New York, approving, among other things, the settlement agreement between Newlead Holdings and Hanover in the matter entitled Hanover Holdings I, LLC v. NewLead Holdings Ltd., Case No. 155723/2013. Hanover commenced the Action against the Company on June 21, 2013, to recover an aggregate of $7,205,547 of past-due accounts payable of the Company, which Hanover had purchased from certain vendors of the Company pursuant to the terms of separate receivable purchase agreements between Hanover and each of those vendors, plus fees and costs. The Order provides for the full and final settlement of the Claim and the Action. The Settlement Agreement became effective and binding upon the Company and Hanover upon execution of the Order by the Court on July 9, 2013. A copy of the regulatory filing is available for free at: http://is.gd/qMnzlU About NewLead Holdings Ltd. NewLead Holdings Ltd. -- http://www.newleadholdings.com-- is an international, vertically integrated shipping company that owns and manages product tankers and dry bulk vessels. NewLead currently controls 22 vessels, including six double-hull product tankers and 16 dry bulk vessels of which two are newbuildings. N ewLead's common shares are traded under the symbol "NEWL" on the NASDAQ Global Select Market. PricewaterhouseCoopers S.A. in Athens, Greece, said in a May 15, 2012, audit report NewLead Holdings Ltd. has incurred a net loss, has negative cash flows from operations, negative working capital, an accumulated deficit and has defaulted under its credit facility agreements resulting in all of its debt being reclassified to current liabilities. These raise substantial doubt about its ability to continue as a going concern, PwC said. Newlead Holdings's balance sheet balance sheet at June 30, 2012, showed US$111.28 million in total assets, US$299.37 million in total liabilities and a US$188.08 million total shareholders' deficit. NMP-GROUP: Enters Ch. 11 After $51-Mil. Court Loss -------------------------------------------------- Beth Winegarner of BankruptcyLaw360 reported that real estate company NMP-Group LLC filed for Chapter 11 in New York federal bankruptcy court, less than a month after a New York state court granted an investor's foreclosure motion for a Madison Avenue property the company planned to develop and found the investor was owed $51 million. According to the report, NMP's brief Chapter 11 filing lists liabilities of $50 million to $100 million and nearly 30 creditors, including 172 Madison LLC, the partnership behind plans to develop the property at Madison Avenue and East 33rd Street. NORTHLAND RESOURCES: Creditors Approve Reorganization Plan ---------------------------------------------------------- Peter Pernlof, Acting CEO and COO of Northland Resources S.A., disclosed that the Lulea District Court approved on July 12 the reorganization plan for the Company's Swedish subsidiaries. As previously disclosed, the Lulea District Court held composition proceedings on July 12 in connection with the reorganization of companies Northland Resources AB (publ), Northland Sweden AB and Northland Logistics AB. During the proceedings the companies' creditors approved the terms of the proposed composition. The District Court held in accordance with this and approved the reorganization plan and composition. Norwegian subsidiary Northland Logistics AS is not going through formal reorganization, but has previously agreed with all of its creditors on a payment plan identical to that of the other subsidiaries. [Fri]day's decision by the Lulea District Court becomes legally binding in three weeks. The next step will then be the court's decision on terminating the reorganization. "[Fri]day's decision is another important step on the path to normalcy for Northland. This is good news for all of our employees, and also good news for the region," Mr. Pernlof said. About Northland Headquartered in Luxembourg, Northland Resources S.A. is a producer of iron ore concentrate, with a portfolio of production, development and exploration mines and projects in northern Sweden and Finland. The first construction phase of the Kaunisvaara project is complete and production ramp-up started in November 2012. The Company expects to produce high-grade, high-quality magnetite iron concentrate in Kaunisvaara, Sweden, where the Company expects to exploit two magnetite iron ore deposits, Tapuli and Sahavaara. Northland has entered into off-take contracts with three partners for the entire production from the Kaunisvaara project over the next seven to ten years. The Company is also preparing a Definitive Feasibility Study for its Hannukainen Iron Oxide Copper Gold project in Kolari, northern Finland and for the Pellivuoma deposit, which is located 15 km from the Kaunisvaara processing plant. * * * As reported by the Troubled Company Reporter-Europe on April 1, 2013, Moody's Investors Service affirmed the Caa3 corporate family rating and bond rating of Northland Resources AB. Concurrently, Moody's has applied the 'limited default' ('/LD') indicator to the company's Ca-PD probability of default rating (PDR), to reflect the recently missed interest payment on its outstanding notes, which the rating agency considers a default according to its definition of default. As a result, Moody's PDR for Northland has been affirmed at Ca-PD/LD. In addition, the outlook on all ratings remains negative. NUMIRA BIOSCIENCES: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Numira Biosciences Inc. fka Visual Influence, Inc. 560 Arapeen Drive, Suite 250 Salt Lake City, UT 84108 Bankruptcy Case No.: 13-27663 Chapter 11 Petition Date: July 6, 2013 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Judge: Joel T. Marker Debtor's Counsel: Matthew M. Boley, Esq. PARSONS KINGHORN HARRIS 111 E. Broadway, 11th Floor Salt Lake City, UT 84111 Tel: (801) 363-4300 Fax: (801) 363-4378 E-mail: mmb@pkhlawyers.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors is available for free at http://bankrupt.com/misc/utb13-27663.pdf The petition was signed by Harold Widlansky, executive vice president. NORTH LAS VEGAS, NV: Moody's Lowers GOLT Bond Rating to 'Ba1' ------------------------------------------------------------- Moody's Investors Service has downgraded the City of North Las Vegas, Nevada's general obligation limited tax bond rating to Ba1 from Baa2 and revised the rating outlook to stable. The bonds are secured by the city's full faith and credit pledge, subject to Nevada's statutory and constitutional limitations on overlapping levy rates for ad valorem taxes. Rating Rationale: The downgrade to Ba1 reflects the city's persistent and substantial operating challenges. Its weak financial position and strenuous tensions with labor groups resulted in declaration of a state of emergency for fiscal 2014, marking the second such declaration in two years. The city also remains reliant on outsized transfers from its water and sewer enterprises to support its general fund and correct substantial budgetary imbalances. Slow and uneven recovery in both the metro area's tourism dependent economy and still weak property values continue to weigh on the city's tax revenues, which remain well below pre-recession levels. Lastly, the city's direct debt burden remains elevated but the bulk of GOLT debt service is supported directly by pledged resources from the water and sewer enterprises. The stable outlook reflects Moody's expectation that the city's financial performance will remain challenged over the near to medium terms, though the city effectively adopted ongoing expenditure adjustments through politically difficult measures. In particular, the city thus far has successfully used emergency powers to impose compensation reductions on certain labor groups. Also, liquidity from the water and sewer enterprises is declining due to increased operating costs and near-term capital needs, but continues to fund a substantial majority of annual GOLT debt service, as intended. Lastly, the metro area's economy is experiencing a nascent recovery and the city's tax base is projected to stabilize in 2014. Strengths: - Participation in the greater Las Vegas metro economy - Still large tax base despite substantial declines - Declarations of emergency provide some expenditure relief for operations Challenges: - Continued budgetary imbalance exacerbated by weakness in tax revenues - Declining liquidity from water and sewer enterprises available to support the general fund - Litigation risk surrounding concessions imposed on labor unions What Could Make The Rating Go Up - Restoration of structural fiscal balance - No longer rely on outsized PILOT from utilities to support general operations - General fund reserves improve toward levels consistent with higher-rated peers - Sustainable improvement in the city's tax base and the greater metro economy What Could Make The Rating Go Down - Obstructive litigation against use of the city's emergency powers - Continued deterioration of the city's fiscal position - Available liquidity in water and sewer enterprises declines more quickly than anticipated The principal methodology used in this rating was General Obligation Bonds Issued by US Local Governments published April 2013. OHIO COUNTY, KY: Moody's Cuts $83MM Revenue Bonds Rating to Ba2 --------------------------------------------------------------- Moody's Investors Service downgraded the senior secured rating of $83.3 million of County of Ohio, Kentucky Pollution Control Refunding Revenue Bonds (Big Rivers Electric Corporation Project; cusip number 677288AG7) to Ba2 from Ba1, concluding the review for downgrade which commenced on February 6, 2013. The rating outlook is negative. "The downgrade of the rating for the pollution control refunding revenue bonds previously issued by the county on behalf of Big Rivers Electric Corporation (BREC) reflects heightened credit risk for BREC as it moves closer to the dates when it will need to be more dependent on rate increases and other mitigation strategies to compensate for the anticipated significant loss of load from two aluminum smelters" said Kevin Rose, Vice President-Senior Analyst. "Moody's expects depressed margins for off-system sales in the MISO market to persist, thus limiting the effectiveness of marketing excess power as part of BREC's load concentration mitigation strategy", Rose added. As reported in prior BREC related research, Alcan Corporation announced on January 31, 2013 that its subsidiary, Alcan Primary Products Corporation (Rio Tinto Alcan) is proceeding with plans to terminate its power contract with BREC. This announcement followed the August 20, 2012 announcement by Century Aluminum Company (Century) that its subsidiary, Century Aluminum of Kentucky is taking a similar action. At the time of the announcements, both owners cited that operations at the Sebree smelter and the Hawesville smelter, respectively, were not economically viable with current contract power rates and under current market conditions. On a combined basis, one of BREC's three member- owners, Kenergy Corp., has been serving the two aluminum smelters comprising roughly two-thirds of BREC's annual energy sales and accounting for just under 60% of its system demand and in excess of 60% of annual revenues. Revenues which BREC has been receiving from base energy charges paid by the smelters will end on August 20, 2013 in the case of Century's Hawesville smelter and on January 31, 2014 in the case of the former Rio Tinto Alcan's Sebring smelter now owned by Century since June 3, 2013. While initial expectations contemplated the prospect that both smelters could cease operations upon expiration of their respective power contracts, recent developments bode well for the smelters to continue operating, while purchasing power on the wholesale market. Effective June 3, 2013, Century completed a transaction with Rio Tinto Alcan to acquire substantially all the assets of the Sebree aluminum smelter. This deal followed Century's definitive agreement with BREC and Kenergy that, subject to various regulatory approvals, will allow Century to continue operating its Hawesville smelter by purchasing electricity on the open market. Under the agreement, Moody's expects that Kenergy will arrange for the energy purchases at wholesale market prices and Century will pay the market price and agree to pay additional amounts to cover any incremental costs incurred by BREC and Kenergy to accommodate Century's desire to purchase energy on the market for the Hawesville smelter. Moody's understands that Century believes that this framework can serve as a model for a similar arrangement for the Sebree smelter once its current termination period expires on January 31, 2014. When compared to the alternative scenario of having both smelters permanently shut down, Moody's views this outcome as being acceptable particularly since BREC and Kenergy will be reimbursed for the incremental costs to purchase power at wholesale market prices for the smelters. That said, loss of the smelter load will negatively impact revenues and BREC has pursued a variety of mitigation strategies to address an anticipated $115 million revenue shortfall. On January 15, 2013, BREC filed a rate case with the Kentucky Public Service Commission (KPSC) seeking approval for a $74.5 million rate increase. The rate filing primarily covered the impending load loss from Century when the notice period expires (of the $74.5 million, $23.7 million is allocated to Alcan), as well as additional amounts for declining margins from off system sales and other cost pressures. This request was subsequently modified downward to $68.6 million due to the subsequent issuance of orders from the KPSC to recognize cost savings achieved subsequent to the rate case filing date. BREC is among the few electric generation and transmission cooperatives subject to rate regulation, which Moody's views as a negative rating consideration among G&T cooperatives as it can sometimes pose challenges in implementing timely rate increases. The January rate case is in its final stages; BREC now awaits a final rate order from the KPSC and is requesting that new rates become effective August 20, 2013. If the case is not decided by then, BREC would be permitted under state statute to implement the rate increase, subject to refund, pending a final KPSC decision in the rate case. The rating action incorporates a reasonable outcome to the rate case decision. On June 28, 2013, BREC filed another rate case proceeding, seeking KPSC approval for its rate strategy to address load loss when the former Alcan (Sebree smelter) notice period expires on January 31, 2014. Importantly and a key rating consideration are the plans to accelerate use of the economic reserve and rural economic reserve accounts in the amount of $70.4 million to offset this second rate increase which goes into effect on February 1, 2014. The accelerated use of the reserve accounts would effectively neutralize any additional non-smelter customer rate impact from this second rate case filing until August 2014 for large industrial (non-smelter) customers and April 2015 for rural (residential) customers. Under this approach, BREC hopes to delay further non-smelter customer rate shock as it implements other load concentration mitigation strategies. Included in the $70.4 million rate increase is Alcan's $23.7 million share of the $68.6 million rate increase included in the rate case filing made January 15, 2013. These strategies, some of which are already being implemented, include entering into long-term bilateral sales arrangements, temporarily idling generation and reducing staff, making short- term off system sales, participating in the capacity markets, and selling generating assets. In that vein, BREC recently announced that it would specifically consider the sale of its 417-MW D.B. Wilson and 443-MW K.C. Coleman coal-fired plants. At the same time, BREC has responded to requests for proposals to sell power from these plants to other energy providers and awaits further developments related to those responses. Longer term opportunities may arise for sales of electricity, depending on economic development activity in its service territory. Should a transaction, either an outright sale or a long-term power arrangement for all capacity involving both Wilson and Coleman occur, BREC's total owned/available capacity would reduce to 584 MW from 1,444 MW. BREC also has rights to about 197 MW of coal- fired capacity from Henderson Municipal Power and Light Station Two and about 178 MW of contracted hydro capacity from Southeastern Power Administration. In terms of liquidity considerations, BREC addressed what had been its most pressing near term obligation by using a portion of its existing cash on May 31, 2013 to repay a $58.8 million tax-exempt debt maturity which was scheduled for June 1, 2013. Following the debt repayment, BREC reports its cash balance is approximately $100 million (which includes $27 million designated for capital expenditures) and its debt maturities over the next eight quarters are largely comprised of scheduled amortizations of long-term debt to be paid at a rate of roughly $5.5 million per quarter. Moody's understands that BREC has taken steps to maintain its external liquidity as it is in final stage negotiations with National Rural Utilities Cooperative Finance Corp. (NRUCFC) for a senior secured loan to fund an estimated $60 million of KPSC approved environmental related capital expenditures over the next two years. Moody's understands that this multi-year loan, which is premised on BREC receiving a favorable order from the KPSC in the rate case filed January 15, 2013, would serve as a bridge to long- term senior secured financing under the U.S. Department of Agriculture's Rural Utilities Service (RUS) loan program. BREC is also finalizing negotiations to amend and extend its $50 million unsecured revolver with NRUCFC, which currently expires in July 2014. Subject to completing the negotiations with NRUCFC and approval from the KPSC, the new revolver is expected to convert to a secured facility, permit access to funding despite impending smelter-related load loss, and extend the term to July 2017. Extension of this facility is an important liquidity milestone since Moody's understands that BREC terminated its $50 million CoBank facility, which was scheduled to expire in July 2017. The existing cash on hand and the anticipated extension of the $50 million revolver with NRUCFC, along with the $60 million three- year senior secured term loan with NRUCFC for environmental capital expenditures will supplement the cooperative's internally generated cash flow going forward. BREC's rating outlook is negative, due to the uncertainty around the cooperative's success in implementing mitigating strategies, the most critical one being the rate requests pending before the KPSC. In light of the negative outlook, BREC's rating is not likely to be upgraded in the near term. Significant support from the KPSC in the pending rate filings and successful results through other load concentration mitigation strategies would be credit positive and help to stabilize BREC's rating outlook. Alternatively, there are a variety of factors that could cause us to take further negative rating action, including inability to obtain adequate regulatory support in pending rate filings and delays in shoring up external liquidity. Since Moody's expects limited opportunities to earn margins on off-system sales in the MISO markets over the next 24 months, inability to find other profitable energy and capacity sales opportunities would also be credit negative. Furthermore, if full and timely recovery of environmental compliance costs does not occur as anticipated under the KPSC approved environmental cost recovery mechanism that would add downward rating pressure, especially if such amounts increase substantially from currently anticipated levels. The principal methodology used in this rating was U.S. Electric Generation & Transmission Cooperatives published in April 2013. Big Rivers Electric Corporation is an electric generation and transmission cooperative headquartered in Henderson, Kentucky and owned by its three member system distribution cooperatives -- Jackson Purchase Energy Corporation; Kenergy Corp; and Meade County Rural Electric Cooperative Corporation. These member system cooperatives provide retail electric power and energy to approximately 113,000 residential, commercial, and industrial customers in 22 Western Kentucky counties. OLD SECOND: To Release Second Quarter Results on July 24 -------------------------------------------------------- Old Second Bancorp, Inc., will release financial results for the second quarter of 2013 after the market closes on July 24, 2013. The Company will also host an earnings call on Thursday, July 25, 2013, at 11:00 a.m. Eastern Time (10:00 a.m. Central Time). Investors may listen to the Company's earnings call via telephone by dialing 877-407-8035. Investors should call in to the dial-in number set forth above at least 10 minutes prior to the scheduled start of the call. A replay of the earnings call will be available until 12:00 p.m. Eastern Time (11:00 a.m. Central Time) on Aug. 8, 2013, by dialing 877-660-6853, using Conference ID #: 417795. About Old Second Old Second Bancorp, Inc., is a financial services company with its main headquarters located in Aurora, Illinois. The Company is the holding company of Old Second National Bank, a national banking organization headquartered in Aurora, Illinois and provides commercial and retail banking services, as well as a full complement of trust and wealth management services. The Company has offices located in Cook, Kane, Kendall, DeKalb, DuPage, LaSalle and Will counties in Illinois. Old Second reported a net loss available to common stockholders of $5.05 million in 2012, as compared with a net loss available to common stockholders of $11.22 million in 2011. The Company's balance sheet at March 31, 2013, showed $1.95 billion in total assets, $1.87 billion in total liabilities and $75.85 million in total stockholders' equity. OP-TECH ENVIRONMENTAL: NRC US Amends Tender Offer Statement ----------------------------------------------------------- NRC US Holding Company, LLC, through its wholly-owned subsidiary, has amended its tender offer statement on Schedule TO relating to its offer to purchase all outstanding shares of common stock, par value $0.01 per share, of OP-TECH Environmental Services, Inc., at a price of $0.116 per Share. Among other amendments, the title of Section 9 of the Offer to Purchase was revised to be "Certain Information Concerning Purchaser, NRC and JFL." The first paragraph of the response to the first question, "Who is offering to buy my securities?", in the "Summary Term Sheet" of the Offer to Purchase is hereby deleted in its entirety and replaced with the following: "Our name is NRC Merger Sub, Inc. We are a Delaware corporation formed solely for the purpose of making this tender offer for all of the outstanding Shares and subsequently merging with and into Op-Tech. We are a wholly-owned subsidiary of NRC US Holding Company, LLC, a Delaware limited liability company. NRC US Holding Company, LLC receives management services from J.F. Lehman & Company, Inc., a Delaware corporation and leading middle-market private equity firm. See 'Introduction' to this Offer to Purchase and Section 9--'Certain Information Concerning Purchaser, NRC and JFL.'" A copy of the Amended Schedule TO is available for free at: http://is.gd/RjlxoG About OP-TECh Environmental East Syracuse, N.Y.-based OP-TECH Environmental Services, Inc., provides comprehensive environmental and industrial cleaning and decontamination services predominately in New York, New England, Pennsylvania, New Jersey, and Ohio. Dannible & McKee, LLP, in their audit report, dated May 14, 2013, for the fiscal year ended Dec. 31, 2012, expressed substantial doubt about OP-TECH Environmental's ability to continue as a going concern. The independent auditors noted that the Company has negative working capital and a stockholders' deficit at Dec. 31, 2012, and caused violations of the Company's financing agreements. The Company reported net income of $1.0 million on $32.3 million of revenues in 2012, compared with a net loss of $7.5 million on $30.7 million of revenues in 2011. The Company's balance sheet at March 31, 2013, showed $8.99 million in total assets, $12.79 million in total liabilities and a $3.79 million shareholders' deficit. ORMET CORP: Says Ohio Utility Deal Not A Contract ------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that bankrupt aluminum smelter Ormet Corp. argued that the Ohio utility trying to block the company from altering its power agreement before transferring it to a private-equity buyer is off base because the deal is not actually a contract, but a state-mandated arrangement. The report said that, according to a motion filed in court, rather than simply transfer the utility agreement to private-equity buyer Wayzata Investment Partners LLC, Ormet is seeking to modify what it says was a regulatory order from the Public Utilities Commission of Ohio. Ohio Power Co., doing business as AEP Ohio, launched a suit in Delaware bankruptcy court seeking to block Ormet's bid to have a state commission modify its power agreement before transferring it to its private equity buyer. Ohio Power sought a preliminary injunction stopping Ormet from going forward with a bid to have the Public Utilities Commission of Ohio amend its energy agreement until the Delaware court rules on AEP's May 8 objection to the contract's assignment and assumption. About Ormet Corp. Aluminum producer Ormet Corporation, along with affiliates, filed for Chapter 11 protection (Bankr. D. Del. Case No. 13-10334) on Feb. 25, 2013, with a deal to sell the business to a portfolio company owned by private investment funds managed by Wayzata Investment Partners LLC. Headquartered in Wheeling, West Virginia, Ormet -- http://www.ormet.com/-- is a fully integrated aluminum manufacturer, providing primary metal, extrusion and thixotropic billet, foil and flat rolled sheet and other products. Ormet disclosed assets of $406.8 million and liabilities totaling $416 million. Secured debt of about $180 million includes $139.5 million on a secured term loan and $39.3 million on a revolving credit. Attorneys at Dinsmore & Shohl LLP and Morris, Nichols, Arsht & Tunnell LLP serve as counsel to the Debtors. Kurtzman Carson Consultants is the claims and notice agent. Evercore's Lloyd Sprung and Paul Billyard serve as investment bankers to the Debtor. OTELCO INC: Corrects Report on Committee Composition ---------------------------------------------------- Otelco Inc. filed with the Securities and Exchange Commission an amended report to correct a clerical error contained in the second paragraph of the original Form 8-K relating to the composition of the Nominating and Corporate Governance Committee of the Company's Board of Directors. On June 18, 2013, Stephen P. McCall and Andrew Meyers ceased to be members of the Nominating and Corporate Governance Committee of the Board of Directors of the Company and Norman C. Frost and Howard J. Haug were appointed to the Nominating and Corporate Governance Committee, joining Gary L. Sugarman, with Mr. Sugarman as chair. About Otelco Inc. Oneonta, Alabama-based Otelco Inc. operates eleven rural local exchange carriers ("RLECs") serving subscribers in north central Alabama, central Maine, western Massachusetts, central Missouri, western Vermont and southern West Virginia. On March 24, 2013, the Company and each of its direct and indirect subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13- 10593) in order to effectuate their prepackaged Chapter 11 plan of reorganization -- a plan that already has been accepted by 100% of the Company's senior lenders, as well as holders of over 96% in dollar amount of Otelco's senior subordinated notes who cast ballots. Otelco's restructuring plan will strengthen the Company by deleveraging its balance sheet and reducing its overall indebtedness by approximately $135 million. The Company's restructuring counsel is Willkie Farr & Gallagher LLP and its financial advisor is Evercore Partners. The restructuring counsel for the administrative agent for the senior lenders is King & Spalding LLP and its financial advisor is FTI Consulting. PACIFIC GOLD: Transfers Ownership of Project W claims ----------------------------------------------------- Pilot Mountain Resources Inc., a subsidiary of Pacific Gold Corp., and Pilot Metals agreed to an early exercise of the option to purchase the Project W claims. Ownership of the Project W claims has now been transferred to Pilot Metals, subject to a security interest retained by Pilot Mountain until the full purchase price is paid. As part of the decision to exercise the purchase option, the purchaser of the claims, Pilot Metals, agreed to amend the purchase terms to accelerate the ownership of and payment for the claims from three payments of $500,000 each due in September 2013, 2014 and 2015 to two payments, the first paid on July 5, 2013, in the amount of $350,000 and a second payment of $850,000 due on March 31, 2014. About Pacific Gold Las Vegas, Nev.-based Pacific Gold Corp. is engaged in the identification, acquisition, and development of prospects believed to have gold mineralization. Pacific Gold through its subsidiaries currently owns claims, property and leases in Nevada and Colorado. Pacific Gold diclosed a net loss of $16.62 million in 2012, as compared with a net loss of $1.38 million in 2011. The Company's balance sheet at March 31, 2013, showed $1.42 million in total assets, $4.63 million in total liabilities and a $3.20 million total stockholders' deficit. Silberstein Ungar, PLLC, in Bingham Farms, Michigan, 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 losses from operations, has negative working capital and is in need of additional capital to grow its operations so that it can become profitable. These factors raise substantial doubt about the Company's ability to continue as a going concern. PARKWAY PROPERTIES: Court Terminates Stay, Dismisses Ch. 11 Case --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Alabama has entered an order terminating the automatic stay to allow Lenox Mortgage XIX, LLC, to enforce its lien and dismissing the Chapter 11 case of Parkway Properties, LLC. As reported in the TCR on June 27, 2013, secured creditor and party-in-interest Lenox Mortgage XIX LLC asks the Bankruptcy Court for relief from the automatic stay; or, in the alternative, dismissal of Parkway Properties, LLC's bankruptcy case; and turnover of cash collateral. According to Lenox, the Plan of Reorganization filed on May 22, 2013, in the Debtor's case violates the absolute priority rule, is not feasible and is unconfirmable pursuant to Section 1129(a)(11) of the Bankruptcy Code. About Parkway Properties Parkway Properties, LLC, filed a Chapter 11 petition (Bankr. M.D. Ala. Case No. 13-30461) on Feb. 22, 2013. The petition was signed by Joe B. Crosby as manager. Judge Dwight H. Williams, Jr., presides over the case. The Debtor's scheduled assets were $11,255,845 and scheduled liabilities were $9,222,364. The Debtor is represented by Lorren B. Jackson, Esq., at Wilson & Jackson, LLC, in Montgomery, Alabama. Judge Dwight H. Williams, Jr., conditionally approved the disclosure statement for plan of reorganization and scheduled July 8, 2013, at 10:30 a.m., as the hearing on the final approval of the disclosure statement and on confirmation of the plan. Parkway Properties, LLC, proposed a plan of reorganization that will pay $36,603 to creditors on a monthly basis until all debts are paid in full. The Bankruptcy Administrator recommended that no unsecured creditors' committee be appointed in the case. Matthew W. Grill, Esq., represents creditor Lenox Mortgage XIX LLC. PASKOR LLC: Case Summary & 6 Unsecured Creditors ------------------------------------------------ Debtor: Paskor, LLC 13607 Sheepshead Court Clarksville, MD 21029 Bankruptcy Case No.: 13-21529 Chapter 11 Petition Date: July 5, 2013 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: James F. Schneider Debtor's Counsel: J. Michael Broumas, Esq. BROUMAS LAW GROUP LLC 8370 Court Avenue, Suite 203 Ellicott City, MD 21043 Tel: (410) 523-8100 Fax: (443) 836-9163 E-mail: michael@broumas.com Scheduled Assets: $2,200,200 Scheduled Liabilities: $731,358 A copy of the Company's list of its top unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/mdb13-21529.pdf The petition was signed by Michael Korangy, managing member. PENSON WORLDWIDE: Agreement with SunGard Gets Court Approval ------------------------------------------------------------ Judge Peter J. Walsh of the U.S. Bankruptcy Court for the District of Delaware ruled that Penson Worldwide, Inc., and its affiliated debtors are authorized to enter into an agreement with SunGard Financial Systems LLC, which provides, among other things, that on the effective date of the Settlement, the SunGard Claims will be fully and finally allowed for all purposes as a general unsecured claim against Penson Financial Services, Inc. in the aggregate amount of $16 million, which will be classified and treated with other General Unsecured Claims against PFSI. The Court also issued various orders in the Debtors' Chapter 11 cases holding that: * under the order permitting the Debtors' current and former directors, officers and employees to seek reimbursement of advancement of defense costs from the Debtors' insurance providers, the budget for: -- Faegre Baker Daniels, LLP and Murphy & McGonigle, LLP from the D&O Insurers, in connection with these firms' representation of the Debtors is increased to $450,000. -- Brownstein Hiatt Farber Schreck, LLP, Clyde Snow and Sessions P.C., Hamil/Hecht LLC, Haynes and Boon, LLP, Hogan Lovells US LLP, Holland & Hart LLP, Husch Blackwell LLP, K&L Gates LLP, Karen Cook PLLC, Morrison & Foerster LLP, and SNR Denton US LLP is increased to $2,511,427. A notice of amendment to counsel list pursuant to the Advancement Order may be accessed for free at http://is.gd/pStJoQ * pursuant to the order authorizing the Debtors to employ Akin Gump Strauss Hauer & Feld LLP as their Special litigation counsel, the amount of Insured Defense Costs paid to Akin Hump would not exceed $1,635,000. * the Debtors' 3 contracts with Internap and 1 contract with AT&T are deemed rejected, nunc pro tunc to June 12, 2013. * the Debtors' bid to reject their executory contract with NYSE Market, Inc. is granted, nunc pro tunc to May 22, 2013. * Adamba Imports International Inc.'s motion to file under seal his motion for allowance of his claim or to file a late proof of claim is granted. * the motion of Grace Financial Group LLC to lift the automatic Stay is granted, and that upon the earlier of an (i) entry of an order confirming a plan in the Chapter 11 case of Penson Financial Services Inc., and (ii) July 31, 2013, the automatic stay and any injunction that may be imposed by the Plan and Confirmation Order will be modified and lifted to permit continuation and prosecution of the FINRA Arbitration Proceeding against PFSI to final award, including any appeal. Meanwhile, Andrzej Abraszewski filed a motion asking the court to allow his claim saying he was a known creditor who was not served with notice of the Bar Date or, alternatively, to allow him to file a late proof of claim in the Debtors' Chapter 11 cases. He says his loss was made know to Penson through FINRA proceedings, and their participation in those proceedings. Mr. Abraszewski is represented by Scott J. Leonhardt -- leonhardt@teamrosner.com -- at The Rosner Law Group LLC. 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. PLAYLOGIC ENTERTAINMENT: Fails to Legally Change Company Name ------------------------------------------------------------- Playlogic Entertainment, Inc., said that the actions required to change its name to Donar Ventures, Inc., were never completed, therefore, the Company's name was never legally changed. It was reported that the Company's Board of Directors had decided to change the Company's name to Donar Ventures and no longer use the name Playlogic Entertainment, Inc., and that the Company had started the process to change the name. However, the actions required to legally change the Company's name were never taken. About Playlogic Entertainment Playlogic Entertainment, Inc. (Nasdaq OTC: PLGC.OB) -- http://www.playlogicgames.com/-- is an independent worldwide publisher of digital entertainment software for consoles, PCs, handhelds, mobile devices, and other digital media platforms. Playlogic publishes and distributes products throughout all available channels, both online and offline. Playlogic is headquartered in New York City and in Amsterdam, the Netherlands. The Company's balance sheet at March 31, 2010, showed $14.1 million in assets and $16.5 million of liabilities, for a stockholders' deficit of $2.4 million. As of March 31, 2010, the Company has an accumulated deficit of approximately $82.8 million. In July 2010 Playlogic Entertainment voluntary requested a delay of payments, 'surseance van betaling', the Dutch equivalent of Chapter 11, for its subsidiary Playlogic International N.V and wholly owned subsidiary Playlogic Game Factory B.V. Tough market conditions, late payments by large customers and the delays in projects have forced the company to seek protection under the Dutch bankruptcy laws. POSITIVEID CORP: Amends Several Agreements with VeriTeQ ------------------------------------------------------- PositiveID Corporation entered into a letter agreement with VeriTeQ Acquisition Corporation to amend certain terms of several agreements between the parties. The Letter Agreement amended certain terms of the Shared Services Agreement entered into between PositiveID and VeriTeQ on Jan. 11, 2012, as amended; the Asset Purchase Agreement entered into on Aug. 28, 2012, as amended; and the Secured Promissory Note dated Jan. 11, 2012. The Letter Agreement defines the conditions of termination of the SSA, including payment of the approximate $290,000 owed from VeriTeQ to PositiveID, the elimination of minimum royalties payable to PositiveID under the APA, as well as certain remedies if VeriTeQ fails to meet certain sales levels, and to amend the Note, which has a current balance of $228,000, to include a conversion feature under which the Note may be repaid, at VeriTeQ's option, in equity in lieu of cash. Director Quits The Company accepted the resignation of Mr. Barry M. Edelstein from its Board of Directors on July 8, 2013. Mr. Edelstein has joined the Board of Digital Angel Corporation. On July 8, 2013, prior to the share exchange agreement between Digital Angel Corporation and VeriTeQ, Mr. William J. Caragol, the Company's Chairman and Chief Executive Officer, agreed to resign from the Board of VeriTeQ effective with the share exchange agreement between Digital Angel Corporation and VeriTeQ. The Company does not plan to increase the size of its Board from the current four members. Mr. Edelstein's resignation from the Company was not related to a disagreement with the Company or its Board of Directors. About PositiveID Delray Beach, Fla.-based PositiveID Corporation has historically developed, marketed and sold RFID systems used for the identification of people in the healthcare market. Beginning in early 2011, the Company has focused its strategy on the growth of its HealthID business, including the continued development of its GlucoChip, its Easy Check breath glucose detection device, its iglucose wireless communication system, and potential strategic acquisition opportunities of businesses that are complementary to its HealthID business. PositiveID incurred a net loss of $7.99 million on $0 of revenue for the year ended Dec. 31, 2012, as compared with a net loss of $16.48 million on $0 of revenue for the year ended Dec. 31, 2011. The Company's balance sheet at March 31, 2013, showed $2.39 million in total assets, $6.78 million in total liabilities and a $4.39 million total stockholders' deficit. EisnerAmper 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 at Dec. 31, 2012, the Company has a working capital deficiency and an accumulated deficit. Additionally, the Company has incurred operating losses since its inception and expects operating losses to continue during 2013. These conditions raise substantial doubt about its ability to continue as a going concern. POST HOLDINGS: Moody's Cuts CFR to B1 Following $350MM Debt Offer ----------------------------------------------------------------- Moody's Investors Service, Inc. downgraded the Corporate Family Rating of Post Holding, Inc. to B1 from Ba3 in response to the launch of a $350 million senior unsecured debt offering. Moody's also lowered the company's Probability of Default Rating to B1-PD from Ba3-PD, its senior secured debt rating to Ba1 from Baa3 and the company's Speculative Grade Liquidity rating to SGL-3 from SGL-2. The proposed senior unsecured notes being offered are assigned a B1 rating and the rating on existing senior unsecured debt is affirmed at B1. Finally, Moody's revised the rating outlook to stable from negative. The proposed $350 million tack-on note offering will expand the size of Post's existing 7.375% senior unsecured notes due 2022 to $1,375 million face value from $1,025 million. The proceeds from the issuance will be added to cash balances at closing and could be used to fund future acquisitions. The long-term ratings downgrades primarily reflect the increased leverage that will result from the proposed debt issuance and uncertainty about how the new note proceeds will be used. The downgrade of the Speculative Grade Liquidity rating reflects the company's announcement that it intends to terminate its $175 million senior secured revolving credit facility on or before July 18, 2013, which will eliminate its only meaningful source of committed external liquidity. Post expects to enter into new credit facilities in the future. Rating Rationale: Post's B1 CFR reflects weak cereal category growth trends, the company's second-tier competitive position against the leading branded ready-to-eat (RTE) cereal makers, Post's soft core operating performance in recent years, and its limited product diversification and pricing power. The rating also reflects the company's recent adoption of an aggressive acquisition strategy that has caused financial leverage to increase rather than decline as anticipated by Moody's following the company's 2012 spin-off from Ralcorp Holdings. Post's credit profile is supported by its reduced but still strong operating margins, cash flows, and brand equities of its core RTE cereal brands, and reflect the attractive growth prospects of recently acquired brands within the faster growing natural and organic segments. The SGL-3 rating reflects ample internal sources of liquidity -- including $550 million of cash balances upon the completion of the offering and free cash flow of at least $65 million over the next 12 months by Moody's estimates -- balanced against no committed sources of external liquidity. Post Holdings, Inc. Ratings downgraded: Corporate Family Rating to B1 from Ba3; Probability of Default Rating to B1-PD from Ba3-PD; $175 million senior secured revolving credit facility to Ba1 (LGD-1, 2%) from Baa3 (LGD-1, 2%) to be withdrawn upon termination; Speculative Grade Liquidity rating to SGL-3 from SGL-2. Ratings assigned: Proposed $350 million of incremental 7.375% senior unsecured notes due 2022 at B1 (LGD 4, 56%); Ratings affirmed (LGD assessments revised): $1,025 million of 7.375% senior unsecured notes due 2022 at B1; LGD revised to (LGD-4, 56%) from (LGD-4, 60%); Outlook is revised to stable from negative. Acquisitions have come earlier than Moody's previously had anticipated following the spin-off from Ralcorp in early 2012. "We expected that acquisitions would eventually be an important element of Post's long-term growth strategy, but that the company would first stabilize its core RTE-cereal operating performance," commented Brian Weddington, a Moody's Senior Credit Officer. While the company has strengthened its product offerings and stemmed market share losses, the RTE cereal category continues to decline as consumers turn to other breakfast meal choices such as yogurts and snack bars. In addition, Post's operating profit has fallen by over 400 bps since 2011 (to 15.0% from 19.5%) due to higher operating costs as a standalone company, new product launch costs and increased brand spending. Meanwhile, the company has completed two pre-funded leveraged acquisitions over the past six months including the cereal, granola and snacks business of Hearthside Food Solutions in May 2013 for $158 million. The debt offering suggests more acquisitions to come. "While acquisitions have helped Post to diversify its portfolio toward faster growing categories, they also have added financial leverage and operational risk at a time when the company is still struggling to stabilize its core ready-to-eat (RTE) cereal business," added Weddington Moody's estimates that proforma for the proposed $350 million note offering, debt/EBITDA will rise to over 6.5 times from about 5.0 times currently, which is high for the B1 rating category. High cash balances, approximately $550 million at closing, will support Post's liquidity profile. However, Moody's assumes that most of the cash will eventually be used to fund future acquisitions that will reduce its liquidity cushion but add incremental EBITDA. A rating downgrade could result if debt/EBITDA is sustained above 6.5 times or if the company fails to generate free cash flow. A rating upgrade is unlikely before the company's core RTE cereal business has stabilized; however, the ratings could eventually be upgraded if Post is able to sustain debt/EBITDA below 5.0 times. The principal methodology used in this rating was the Global Packaged Goods published in June 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Post Holdings, based in St. Louis Missouri, is a leading manufacturer of branded ready-to-eat cereals that are sold in the United States and Canada. Post is the third largest seller of RTE cereals in the U.S. behind Kellogg and General Mills with an approximate 10% market share by Moody's estimate. The company's key brands include Honey Bunches of Oats, Pebbles, Great Grains, Grape-Nuts, Shredded Wheat, Raisin Bran, Peace, Golden Temple and Erewhon. For the last twelve months ended March 2013, Post generated sales of approximately $1 billion. POST HOLDINGS: S&P Revises Outlook to Neg. & Affirms 'B+' CCR ------------------------------------------------------------- Standard & Poor's Ratings Services said that it revised its outlook on St. Louis-based Post Holdings Inc. to negative from stable. S&P affirmed all ratings on the company, including its 'B+' corporate credit rating. "The outlook revision reflects our view of Post's increased debt leverage and our revision of the company's financial risk profile to 'highly leveraged' from 'aggressive,'" said Standard & Poor's credit analyst Bea Chiem. S&P estimates that Post's pro forma debt leverage will increase to about 6.6x for the 12 months ended March 31, 2013, as compared with 5.6x before the additional $350 million of new debt. S&P had expected Post to reduce leverage under 5x to maintain its current ratings and outlook. S&P believes that Post could deleverage closer to 5x if it makes an accretive acquisition or repays debt within the next 12 months. QUANTUM FUEL: Pays in Full Outstanding Balance Under Bridge Notes ----------------------------------------------------------------- Quantum Fuel Systems Technologies Worldwide, Inc., repaid in full the outstanding balance due under the bridge promissory notes issued by the Company on Jan. 24, 2013. The repayment on July 1, 2013, resulted in a savings to the Company of $175,000. Pursuant to the terms of the common stock purchase warrants issued to the purchasers of the Bridge Notes, the exercise price of those Warrants was adjusted from $1.00 per share to $0.71 per share upon repayment of the Bridge Notes. No further adjustments to the exercise price of the Warrants are required to be made in the future other than adjustments pursuant to customary anti-dilution provisions. About Quantum Fuel Lake Forest, Calif.-based Quantum Fuel Systems Technologies Worldwide, Inc. (Nasdaq: QTWW) develops and produces advanced vehicle propulsion systems, fuel storage technologies, and alternative fuel vehicles. Quantum's portfolio of technologies includes electronic and software controls, hybrid electric drive systems, natural gas and hydrogen storage and metering systems and other alternative fuel technologies and solutions that enable fuel efficient, low emission, natural gas, hybrid, plug-in hybrid electric and fuel cell vehicles. Quantum Fuel disclosed a net loss attributable to stockholders of $30.91 million in 2012 and a net loss attributable to common stockholders of $38.49 million in 2011. The Company's balance sheet at March 31, 2013, showed $58.40 million in total assets, $49.77 million in total liabilities and $8.62 million in total stockholders' equity. Haskell & White LLP, in Irvine, California, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company does not have sufficient existing sources of liquidity to operate its business and service its debt obligations for a period of at least twelve months. These conditions, along with the Company's working capital deficit and recurring operating losses, raise substantial doubt about the Company's ability to continue as a going concern. RADICAL BUNNY: 9th Circ. Nixes Execs' Appeal in SEC Suit -------------------------------------------------------- Kurt Orzeck of BankruptcyLaw360 reported that the Ninth Circuit denied an appeal by managing members of bankrupt Radical Bunny LLC accused of funneling more than $189 million to also-bankrupt Mortgages Ltd., ruling that the managers didn't prove they were trading commercial notes instead of securities. According to the report, the appellate court agreed with an Arizona federal court that the four managers falsely represented to investors holding 900 accounts in 20 states that their loan investments were collateralized and secured, even after their attorneys allegedly told them that wasn't the case. About Radical Bunny On Oct. 8, 2008, three investors -- Cathy Baker of Chandler; Laing Kandel of Brooklyn, New York; and Steven Friedberg -- filed an involuntary petition under Chapter 7 of the Bankruptcy Code against Radical Bunny LLC in the U.S. Bankruptcy Court for the District of Arizona. Carlos M. Arboleda, Esq. -- arboledac@abfirm.com -- at Arboleda Brechner, in Phoenix, Arizona, represents the petitioning creditors. On Oct. 20, 2008, the bankruptcy judge entered an order converting the case to Chapter 11 (Bankr. D. Ariz. Case No. 08-13884). The Debtor's estate is currently controlled by a trustee, G. Grant Lyon. Judge Charles G. Case II presides over the case. Mr. Lyon, as the Chapter 11 trustee, is represented by: Jordan A. Kroop, Esq. Shelton L. Freeman, Esq. Thomas j. Salerno, Esq. SQUIRE, SANDERS & DEMPSEY (US) LLP 1 E Washington St #2700 Phoenix, AZ 85004 Tel: (602) 528-4024 Fax: (602) 253-8129 E-mail: jkroop@ssd.com tsalerno@ssd.com RADIOSHACK CORP: Affirms "Strong" Balance Sheet ----------------------------------------------- RadioShack Corporation on Friday disclosed that it continues to have a strong balance sheet with total liquidity of $820 million at the end of the first quarter. RadioShack acknowledged that, like many companies, it has discussions with investment banks from time to time to help the Company evaluate ways to further strengthen its balance sheet and manage it efficiently. "That has been the sole focus of these discussions. As we noted on our last earnings call, we are focused on executing our turnaround and serving our customers," said the Company, which issued the statement in response to recent media reports involving it. The Wall Street Journal's Emily Glazer, Ann Zimmerman and Serena Ng report that shares of RadioShack rose 11% Friday to $2.92. They had dropped sharply Thursday, July 13, when the trade publication Debtwire said the retailer was looking to hire a financial adviser to help fix its balance sheet. The shares have lost roughly 90% of their value over the past three years. The company, which had annual sales of $4.3 billion, sports a market cap of $291 million. WSJ says the $820 million consists of available cash and borrowings at the end of March. WSJ also relates RadioShack has had discussions with advisers at Morgan Stanley and Centerview Partners, according to people familiar with the matter. The company is hoping to raise money ahead of the fall, when it will be stocking up on inventory for the holiday shopping season, the people said. WSJ reports that a RadioShack spokeswoman said the Company wouldn't discuss bank names or financing, and expects "only normal inventory build" leading into the holiday season. About Radioshack Corporation RadioShack (NYSE: RSH) -- -- http://www.radioshackcorporation.com -- is a national retailer of innovative mobile technology products and services, as well as products related to personal and home technology and power supply needs. RadioShack's retail network includes more than 4,300 company-operated stores in the United States, 270 company-operated stores in Mexico, and approximately 1,000 dealer and other outlets worldwide. READER'S DIGEST: Files Plan Focusing on North American Business --------------------------------------------------------------- Saabira Chaudhuri, writing for Dow Jones Newswires, reported that Reader's Digest Association Inc. unveiled a restructuring plan to focus on its North American print and digital business, as it prepares to emerge from bankruptcy protection. "We have rethought our business practices and shed legacy industry conventions that were no longer good for our business or our customers so that we can redirect our resources towards making better, more compelling and relevant products," Chief Executive Robert E. Guth said, the report cited. According to the report, the parent of Reader's Digest magazine, founded 91 years ago under a speakeasy in the Greenwich Village section of New York, said it will shed circulation that doesn't contribute to the magazine's profitability and will eliminate unprofitable subscription offers. It plans to introduce a more profitable subscription pricing structure but said it will stabilize prices for existing customers. It will eliminate what it called the "price confusion" around subscription pricing for its products. The company also will increase the proportion of direct-to- publisher sources and limit the use of agent-sold subscriptions, the report said. Reader's Digest also said it will lower its rate base guarantee for advertisers to three million. "The conventional rate base math in the publishing business that involves using costly agents to sell less profitable subscriptions is an equation that no longer makes sense for RDA," said Mr. Guth, the report added. 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. The plan in the new Chapter 11 case provides that 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. RG STEEL: Wins Approval to Settle Dispute Over Sparrows Point Sale ------------------------------------------------------------------ U.S. Bankruptcy Judge Kevin Carey approved an agreement that will resolve RG Steel's dispute with Baltimore County over the sale of its Sparrows Point assets in Maryland. Under the deal, Baltimore County will receive $102,858 as payment for the unpaid portion of its tax claim against the steel maker. The agreement can be accessed for free at http://is.gd/GtMwtu RG Steel previously paid more than $3.3 million to Baltimore County, which holds a lien on the Sparrows Point properties for real estate and personal property taxes. Baltimore County asserts more than $3.4 million. RG Steel sold its assets related to its former facility in Baltimore County in accordance with the bankruptcy court's Aug. 15, 2012 order, which required the steel maker to set aside an amount from the proceeds of the sale for payment of liens or claims on the Sparrows Point properties. About RG Steel RG Steel LLC -- http://www.rg-steel.com/-- is the United States' fourth-largest flat-rolled steel producer with annual steelmaking capacity of 7.5 million tons. It was formed in March 2011 following the purchase of three steel facilities located in Sparrows Point, Maryland; Wheeling, West Virginia and Warren, Ohio, from entities related to Severstal US Holdings LLC. RG Steel also owns finishing facilities in Yorkville and Martins Ferry, Ohio. It also owned Wheeling Corrugating Company and has a 50% ownership in Mountain State Carbon and Ohio Coatings Company. RG Steel along with affiliates, including WP Steel Venture LLC, sought bankruptcy protection (Bankr. D. Del. Lead Case No. 12- 11661) on May 31, 2012. Bankruptcy was precipitated by liquidity shortfall and a dispute with Mountain State Carbon, LLC, and a Severstal affiliate, that restricted the shipment of coke used in the steel production process. The Debtors estimated assets and debts in excess of $1 billion. As of the bankruptcy filing, the Debtors owe (i) $440 million, including $16.9 million in outstanding letters of credit, to senior lenders led by Wells Fargo Capital Finance, LLC, as administrative agent, (ii) $218.7 million to junior lenders, led by Cerberus Business Finance, LLC, as agent, (iii) $130.5 million on account of a subordinated promissory note issued by majority owner The Renco Group, Inc., and (iv) $100 million on a secured promissory note issued by Severstal. Judge Kevin J. Carey presides over the case. The Debtors are represented in the case by Robert J. Dehney, Esq., and Erin R. Fay, Esq., at Morris, Nichols, Arsht & Tunnell LLP, and Matthew A. Feldman, Esq., Shaunna D. Jones, Esq., Weston T. Eguchi, Esq., at Willkie Farr & Gallagher LLP, represent the Debtors. Conway MacKenzie, Inc., serves as the Debtors' financial advisor and The Seaport Group serves as lead investment banker. Donald MacKenzie of Conway MacKenzie, Inc., as CRO. Kurtzman Carson Consultants LLC is the claims and notice agent. Wells Fargo Capital Finance LLC, as Administrative Agent, is represented by Jonathan N. Helfat, Esq., and Daniel F. Fiorillo, Esq., at Otterbourg, Steindler, Houston & Rosen, P.C.; and Laura Davis Jones, Esq., and Timothy P. Cairns, Esq., at Pachuiski Stang Ziehi & Jones LLP. Renco Group is represented by lawyers at Cadwalader, Wickersham & Taft LLP. Kramer Levin Naftalis & Frankel LLP represents the Official Committee of Unsecured Creditors. Huron Consulting Services LLC serves as the Committee's financial advisor. The Debtor has sold off the principal plants. The sale of the Wheeling Corrugating division to Nucor Corp. brought in $7 million. That plant in Sparrows Point, Maryland, fetched the highest price, $72.5 million. CJ Betters Enterprises Inc. paid $16 million for the Ohio plant. ROCKWELL MEDICAL: Results From Efficacy Study of SFP ---------------------------------------------------- Rockwell Medical announced successful top-line results from the long-term CRUISE-1 Phase 3 efficacy study of SFP. SFP is the Company's late-stage investigational iron-delivery drug for the treatment of iron deficiency in chronic kidney disease patients receiving hemodialysis. In the Phase 3 efficacy study, SFP met the primary endpoint, demonstrating a statistically significant mean change in hemoglobin from baseline to End-of-Treatment. Additionally, SFP met key secondary endpoints, including maintenance of hemoglobin, maintenance of reticulocyte hemoglobin, and increase in serum iron pre-to-post treatment without an increase in ferritin. This long-term study is the first of two identical Phase 3 efficacy studies to provide clinical data required for the Company to file a New Drug Application (NDA) with the U.S. FDA. Rob Chioini, founder, chairman and CEO of Rockwell Medical stated, "We are thrilled with the successful results of this CRUISE-1 efficacy study. In addition to demonstrating statistical significance and meeting the primary efficacy endpoint, the data show that in place of IV iron, SFP is a safe and effective iron replacement therapy that consistently maintains hemoglobin levels without increasing iron stores. These successful results, coupled with the recent positive PRIME study data demonstrating SFP's ability to significantly reduce ESA use, support our belief that SFP will set a new paradigm in iron therapy treatment for hemodialysis patients. We believe SFP is positioned to become the new standard of care in iron therapy. We anticipate confirmatory and successful results from the CRUISE-2 trial, which is nearing completion." A copy of the press release is available for free at: http://is.gd/ePQHUa About Rockwell Rockwell Medical, Inc. (Nasdaq: RMTI), headquartered in Wixom, Michigan, is a fully-integrated biopharmaceutical company targeting end-stage renal disease ("ESRD") and chronic kidney disease ("CKD") with innovative products and services for the treatment of iron deficiency, secondary hyperparathyroidism and hemodialysis (also referred to as "HD" or "dialysis"). Rockwell's lead investigational drug is in late stage clinical development for iron therapy treatment in CKD-HD patients. It is called Soluble Ferric Pyrophosphate ("SFP"). SFP delivers iron to the bone marrow in a non-invasive, physiologic manner to hemodialysis patients via dialysate during their regular dialysis treatment. In its report on the consolidated financial statements for the year ended Dec. 31, 2012, Plante & Moran, PLLC, in Clinton Township, Michigan, expressed substantial doubt about Rockwell Medical's ability to continue as a going concern, citing the Company's recurring losses from operations, negative working capital, and insufficient liquidity. The Company reported a net loss of $54.0 million on $49.8 million of sales in 2012, compared with a net loss of $21.4 million on $49.0 million of sales in 2011. The Company's balance sheet at March 31, 2013, showed $18 million in total assets, $28.5 million in total current liabilities, and a stockholders' deficit of $10.5 million. ROGERS BANCSHARES: Case Summary & 4 Unsecured Creditors ------------------------------------------------------- Debtor: Rogers Bancshares, Inc. 425 W. Capitol Ave., 14th Floor Little Rock, AR 72201 Bankruptcy Case No.: 13-13838 Chapter 11 Petition Date: July 5, 2013 Court: United States Bankruptcy Court Eastern District of Arkansas (Little Rock) Judge: James G. Mixon Debtor's Counsel: Samuel M. Stricklin, Esq. BRACEWELL & GIULIANI, LLP 1445 Ross Avenue, Suite 3800 Dallas, TX 75201 Tel: (214) 758-1095 Fax: (214) 758-8395 E-mail: sam.stricklin@bgllp.com Estimated Assets: $10,000,001 to $50,000,000 Estimated Debts: $10,000,001 to $50,000,000 The petition was signed by Susan F. Smith, secretary. Debtor's List of Its Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Rogers Capital Trust III TruPS $25,774,000 The Bank of New York Mellon Trust Co., N.A. Attn: David J. Morganti, 525 William Penn Place 7th Floor Pittsburg, PA 15219 Rogers Statutory Trust II TruPS $10,310,000 U.S. Bank Corporate Trust Services, Attn: David Canfield, 190 South Lasalle Street Chicago, IL 60603 Rogers Statutory Trust I TruPS $5,155,000 U.S. Bank National Association, Attn: Corporate Trust Services-Rogers Bancshares Statutory Trust I, One Federal Street, 3rd Floor, Boston, MA 02110 United States Treasury Notice Only Department ROTHSTEIN ROSENFELDT: Exit Plan OK'd After Settlement With Victims ------------------------------------------------------------------ Carolina Bolado of BankruptcyLaw360 reported that a Florida bankruptcy judge confirmed the Chapter 11 liquidation plan of Ponzi schemer Scott Rothstein's law firm after objections from victims of the $1.2 billion scheme were resolved in a $54 million settlement with TD Bank NA. According to the report, U.S. Bankruptcy Judge Raymond Ray approved the amended liquidation plan, which some creditors had opposed because a provision of the centerpiece $72 million deal between the Rothstein Rosenfeldt Adler PA estate and TD Bank barred suits against the bank over its alleged role in the scheme. About Rothstein Rosenfeldt Scott Rothstein, co-founder of law firm Rothstein Rosenfeldt Adler PA -- http://www.rra-law.com/-- was suspected of running a $1.2 billion Ponzi scheme. U.S. authorities claimed in a civil forfeiture lawsuit filed Nov. 9, 2009, that Mr. Rothstein, the firm's former chief executive officer, sold investments in non- existent legal settlements. Mr. Rothstein pleaded guilty to five counts of conspiracy and wire fraud on Jan. 27, 2010. Creditors of Rothstein Rosenfeldt Adler signed a petition sending the Florida law firm to bankruptcy (Bankr. S.D. Fla. Case No. 09-34791). The petitioners include Bonnie Barnett, who says she lost $500,000 in legal settlement investments; Aran Development, Inc., which said it lost $345,000 in investments; and trade creditor Universal Legal, identified as a recruitment firm, which said it is owed $7,800. The creditors alleged being owed money invested in lawsuit settlements. Herbert M. Stettin, the state-court appointed receiver for Rothstein Rosenfeldt, was officially carried over as the Chapter 11 trustee in the involuntary bankruptcy case. On June 10, 2010, Mr. Rothstein was sentenced to 50 years in prison. The official committee of unsecured creditors appointed in the case is represented by Michael Goldberg, Esq., at Akerman Senterfitt. ROYAL HOLDINGS: Moody's Assigns 'B3' Corp. Family Rating -------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating (CFR) to Royal Holdings Inc. In addition, Moody's assigned ratings to the debt of Royal's subsidiary, Royal Adhesives and Sealants LLC; a B1 on the first lien 5-year $350 million term loan and $40 million revolving credit facility, and a Caa2 rating on the 5.5- year $154 million second lien term loan. Moody's also assigned a Speculative Grade Liquidity rating of SGL-3. Proceeds from the transaction are expected to be used to refinance Royal's existing debt, fund the acquisition of ADCO Global, Inc. (ADCO) and for fees and expenses. The acquisition is expected to close in the third quarter of 2013. The outlook is stable. These rating are subject to receipt of final documentation. "The acquisition of ADCO more than doubles the company's size but is being entirely financed with debt," stated John Rogers, Senior Vice President at Moody's. "Management expects that synergies from the deal along with organic growth to quickly bring down leverage to more sustainable levels." Ratings assigned: Royal Holdings Inc. Corporate family rating -- B3 Probability of default rating -- Caa1-PD Outlook -- Stable Speculative grade liquidity rating of SGL-3 Royal Adhesives and Sealants LLC 5-year $350 million Sr Sec 1st Lien Term Loan B -- B1 (LGD2, 20%) 5-year $40 million Sr Sec 1st Lien Revolving Credit Facility -- B1 (LGD2, 20%) 5.5-year $154 million Sr Sec 2nd Lien Term Loan B -- Caa2 (LGD4, 67%) Outlook -- Stable Ratings Rationale: Royal's B3 CFR reflects elevated leverage, a high level of integration risk due to the size of the ADCO acquisition, lack of meaningful cash equity (estimated at $50-60 million), potential for further acquisitions, weak cash flow generation in 2012 at both companies and limited quarterly financial information. The specialty nature of Royal's products, potential for synergies (cross-selling synergies should be meaningful over time), low capital intensity, relatively strong margins, large and diverse product and customer base, and an improving US construction market all provide support for the B3 rating. Pro forma for ADCO and other prior acquisitions but excluding synergies, Debt/EBITDA is roughly 7.5x and Retained Cash Flow/Debt is about 8%. Management expects roughly $7.3 million of synergies within one year and EBITDA to rise to $94 million in 2014, which would greatly reduce leverage and likely cause Moody's to raise the CFR by one notch to B2. If the company fails to generate EBITDA of over $70 million, Moody's could lower the company's CFR to Caa1. Royal, with the addition of ADCO, sells a broad array of adhesives and sealants into a wide variety of end markets. It also has a broad variety of chemistries and know-how in rubber polyurethane, polysulfide, acrylic, epoxies, UV cure and others. Its main end markets include transportation, roofing, insulated glass, flooring & carpet and printing & packaging. Adhesives and sealants businesses are very leveragable as they tend to generate good, specialty margins and outsized level of free cash flow due to low capital spending. Royal was almost exclusively a North American business, while about 44% of ADCO's sales are in Europe and 17% are in Asia and Latin America. Post-acquisition, the company will generate approximately $525 million in 2013 pro-forma revenue and have a balanced portfolio with roughly 55% of revenues coming from adhesives and 45% coming from sealants and only 24% of sales to Europe. Royal has an adequate liquidity profile primarily supported by its $40 million cash flow revolver, which is expected to be undrawn at the close of the financing. Moody's anticipates that the company will generate positive free cash flow over the next 12-18 months and that capital expenditures will be below $15 million per year. The first lien term loan facility is expected to have a 50% free cash flow sweep mechanism. Each of the first lien facilities and the second lien facility will contain a total net leverage ratio covenant that will provide at least a 30% cushion relative to projected financial performance (with the covenant for the second lien facility set back by 0.5x of leverage from that of the first lien facilities). The company is expected to also have access to an $70 million accordion facility, which would support additional acquisitions. There is also an equity cure option that would allow the company to avoid a violation of the financial covenant in the event that financial performance is weaker than projected. The B1 rating on the first lien term loan reflects its priority in the capital structure, as well as a more traditional financial covenant package. The Caa2 rating on the second lien reflects its subordination to the much larger first lien term loan and the limited asset value of the collateral package. Both of the term loans are guaranteed by the parent company and all domestic subsidiaries and the collateral package includes all the assets of the domestic subsidiaries. The principal methodology used in this rating was the Global Chemical Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Royal Holding Inc. is the holding company of Royal Adhesives and Sealants LLC, a producer of specialty adhesives and sealants sold into a number of construction, paper, plastic, transportation, and assembly-related end markets. It is owned by an affiliate of Arsenal Capital Partners, and has pro forma revenues of roughly $525 million. ROYAL HOLDINGS: S&P Assigns 'B' CCR; Outlook Stable --------------------------------------------------- Standard & Poor's Rating Services said it assigned its 'B' corporate credit rating to Royal Holdings Inc. The outlook is stable. At the same time, based on preliminary terms and conditions, S&P assigned a 'B' issue-level rating (same as the corporate credit rating)and a recovery rating of '3' to the proposed $390 million first-lien senior secured facility under which the co-borrowers will be Royal Adhesive and Sealants LLC, ADCO Global Inc., and ADCO Products Inc. The facility consists of a $40 million revolving credit facility due 2018 and a $350 million first-lien term loan due 2018. S&P also assigned a 'CCC+' rating (two notches below the corporate credit rating) and a recovery rating of '6' to the $154 million second-lien term loan due 2019 for the same co-borrowers. Royal plans to use the new credit facilities to acquire ADCO and refinance existing debt. "The ratings on Royal reflect our assessment of its business risk profile as "weak" and its financial risk profile as "highly leveraged". We assess its management and strategy as fair," said credit analyst Pranay Sonalkar. The outlook is stable. S&P expects the company to achieve and maintain satisfactory operating profitability and generate sufficient free cash flow to support a financial profile consistent with the ratings. S&P also expects the company will maintain its very aggressive financial policy and pursue modest- sized acquisitions and longer term, shareholder rewards. S&P's expectations at the current rating include free operating cash flow generation of at least $5 million, sufficient availability under its revolver and leverage under 7x. S&P could lower ratings if operating challenges following the loss of several contracts materially decreases free cash flow generation to under $5 million, increases leverage to over 7x, or if the company's liquidity position deteriorates. This could happen if the company's revenues were to decline 5% and EBITDA margins were to decline 100 bps. Given the company's very aggressive financial policy, S&P views an upgrade over the next year as unlikely. SAN BERNARDINO, CA: Bond Creditors Support City's Ch. 9 Case ------------------------------------------------------------ Jamie Santo of BankruptcyLaw360 reported that a group of bondholders and bond insurers asked a California bankruptcy judge to let San Bernardino, Calif., continue with its Chapter 9 case, siding with the insolvent city in a fight against creditors who contend it is ineligible for federal protection. According to the report, Ambac Assurance Co., Erste Europ�ische Pfandbrief-und Kommunalkreditbank AG and Wells Fargo NA combined to second San Bernardino's request for U.S. Bankruptcy Judge Meredith A. Jury to rule that the city qualifies for court protection. About San Bernardino, Calif. San Bernardino, California, filed an emergency petition for municipal bankruptcy under Chapter 9 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 12-28006) on Aug. 1, 2012. San Bernardino, a city of about 210,000 residents roughly 65 miles (104 km) east of Los Angeles, estimated assets and debts of more than $1 billion in the bare-bones bankruptcy petition. The city council voted on July 10, 2012, to file for bankruptcy. The move lets San Bernardino bypass state-required mediation with creditors and proceed directly to U.S. Bankruptcy Court. The city is represented that Paul R. Glassman, Esq., at Stradling Yocca Carlson & Rauth. San Bernardino joined two other California cities in bankruptcy: Stockton, an agricultural center of 292,000 east of San Francisco, and Mammoth Lakes, a mountain resort town of 8,200 south of Yosemite National Park. SBARRO LLC: S&P Lowers Corp. Credit Rating to 'CCC+'; Outlook Neg. ------------------------------------------------------------------ Standard & Poor's Ratings Services said it lowered its corporate credit rating on Melville, N.Y.-based Sbarro LLC to 'CCC+' from 'B-'. The outlook is negative. At the same time, S&P lowered its issue-level rating on Sbarro Intermediate Holdings Inc.'s $62.3 million first-out term facility to 'B-' from 'B+' and revised the recovery rating on this debt to '2' from '1'. The '2' recovery rating indicates substantial (70%-90%) recovery of principal in the event of a default. Concurrently, S&P lowered the issue-level rating on Sbarro Intermediate Holdings Inc.'s $75 million second-out term facility to 'CCC-' from 'CCC+' and revised the recovery rating on this debt to '6' from '5'. The '6' recovery rating indicates negligible (0%-10%) recovery of principal in the event of a default. "Our rating action reflects our belief that the company's financial burden is unsustainable in the long term, absent favorable business, financial, and economic conditions, and that its liquidity position will continue to deteriorate over the next year," said credit analyst Mariola Borysiak. "We now view Sbarro's liquidity as "less than adequate"." The rating outlook is negative and incorporates S&P's belief that performance will continue to deteriorate and lead to credit protection measures weakening further and liquidity erosion. S&P believes the company depends on favorable business, financial, and economic conditions to meet its financial commitments. S&P could lower the rating if it believed the company could default on its debt obligations in the next 12 months or seek a financial restructuring. Triggers for a downgrade would include increasing cash losses that necessitated further term loan drawdowns. Although unlikely in the next 12 months, a positive rating action would be predicated on improving profitability such that total debt to EBITDA improves toward 6x. Under this scenario, EBITDA would have to increase by nearly 50% from March 31, 2013, levels, assuming modest increase in debt due to accruing interest. SHAD HANNA'S: Bankr. Ct. Narrows Suit Over Farmers Insurance Claim ------------------------------------------------------------------ Bankruptcy Judge Carlota M. Bohm granted a motion to dismiss an adversary proceeding to the extent it seeks a finding that the Chapter 7 trustee for debtor Shad Hanna's East, Inc., failed to state a claim for statutory conversion of a $350,000 check against First National Bank. However, the judge clarified, First National Bank is not dismissed from the Adversary Proceeding as the Complaint alleges statutory conversion of two other checks which were not challenged by First National Bank. The Debtor filed a voluntary Chapter 11 petition (Case No. 09-20088-CMB, Bankr. Utah) and operated a restaurant, Shad Hanna's Memories Cafe, for 19 months. On Oct. 14, 2013, the case was converted to Chapter 7 and a trustee was appointed. In the Adversary Complaint, the Trustee is seeking damages of $559,040, plus pre-judgment and post-judgment interest. The Trustee is seeking to recover checks, totally approximately $500,000, issued by The Farmers Fire Insurance Company for a property damage claim by the Debtor. The damage was reported caused by a fire to the restaurant building. The checks were said to be endorsed by Barbara Hanna, president and treasurer of the Debtor, and made payable to Daniel S. Soom. Mr. Soom is an attorney who is said to have represented the Debtor in the property damage claim. The adversary complaint is CHARLES O. ZEBLEY, JR., Plaintiff, v. BARBARA HANNA, ROBERT A. HANNA, JR., DANIEL S. SOOM, M&T BANK CORPORATION, ROBERT A. HANNA, JR., Defendants; DANIEL S. SOOM, Cross-Claimant, v. BARBARA HANNA and ROBERT A. HANNA, JR., Cross Defendants; M&T BANK CORPORATION, Third Party Plaintiff, v. FIRST NATIONAL BANK OF PENNSYLVANIA, Third Party Defendant, Adv. No. 12-02235-CMB. A copy of Judge Bohm's June 6, 2013 Memorandum Opinion is available at http://is.gd/QJvkTNfrom Leagle.com. SOUTH FLORIDA SOD: Files for Ch. 11 After Housing Recession ----------------------------------------------------------- South Florida Sod Inc., a sod farmer, filed for Chapter 11 protection (Bankr. M.D. Fla. Case No. 13-bk-08466) on July 9, 2013, in Orlando, Florida. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the Debtor said that sod farming has been hard hit by the housing recession. According to the report, the Debtor said it could sell 40 to 50 truckloads of sod a day during the height of the housing boom. Currently, the Avon Park, Florida-based business says it is selling none. The company owns 13 properties in Florida and three other states. Secured debt totals $23.5 million, not including a $1.6 million judgment. The report discloses that the company intends on selling a 5,777- acre property in Sarasota County, Florida, with a claimed value of $20 million or more. The property is currently used for cattle and timber. There is $2.6 million in undisputed, unsecured debt, according to a court filing. SPRINT NEXTEL: Fitch Affirms 'B+' Issuer Default Rating ------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Rating (IDR) and long-term debt ratings of Sprint Nextel Corporation and its subsidiaries (together, Sprint). In addition, Fitch has removed Sprint and its subsidiaries from Rating Watch Positive, and assigned them a Stable Outlook. Key Rating Drivers The rating affirmation reflects Fitch's view that Sprint's current legal, operational and strategic ties to Softbank do not warrant additional notching support at this time based on Fitch's parent and subsidiary rating linkage criteria. Thus Sprint's IDR is based on its stand-alone credit profile and does not benefit from an uplift in ratings. The two companies do not share legal or operational ties for common treasury or integrated operations. Softbank's decision to divert $3 billion in cash from Sprint to shareholders reflects a concern with Softbank demonstrating an appropriate level of tangible support to Sprint's credit profile in order to link the ratings. A greater indication of future financial support and strategic importance to Sprint by Softbank would provide a linkage to the ratings and for notching lift to Sprint's IDR. Weak Financial Profile, Credit Metrics Fitch expects Sprint's financial profile to remain weak through 2014 due to the significant cash deficit during the next two years and the associated debt borrowing that will increase leverage. Sprint estimated this deficit at approximately $10 billion in its June 2013 proxy filing driven by $16 billion in capital investment to keep pace with growing industry demand and the competitive environment. Fitch believes the cumulative $28 billion in capital spending the next four years also reflects the underinvestment in Sprint's network and the need to accelerate the deployment of capital to improve Sprint's competitive position. Additionally, DISH's pursuit of Sprint and Clearwire had a negative impact on Sprint's available liquidity for other strategic initiatives of $4.7 billion. Looking forward, as Sprint leverages it cost reduction efforts, substantial margin expansion should occur in the 2014 and 2015 timeframe. Cost reduction efforts could drive up to $2 billion in savings. The improved cash generation when coupled with reduced capital investment should allow for the company to strengthen its financial profile, including the potential to generate free cash flow by 2015. Leverage is expected to approach 5.5x by the end of 2013 before declining in 2014. Operational Trends Sprint also faces material execution risk across the numerous strategic objectives that the company is pursuing. Fitch remains concerned with Sprint platform gross additions trends that when adjusted for Nextel subscriber recapture, declined in excess of 20% for the past four quarters. Consequently, postpaid revenue growth declined to 0% year-over-year for the first quarter 2013 compared to a peak growth of 6% during late 2011 to mid-2012. During this time, Sprint prioritized its marketing spend for the recapture of its iDEN subscribers and Verizon Wireless took share by leveraging its 4G LTE leadership position across its national footprint. As such, Sprint will need to reinvigorate growth in light of this increased competitive activity. The accelerated network investment to improve capacity, data bandwidth and customer experience is a key strategic component of Sprint plans. The company hopes the improved network when combined with its differentiated unlimited plan and Softbank's expertise will increase its share of industry gross additions. Fitch believes Verizon and AT&T Wireless are currently much better positioned to leverage their scale, capital investment, subscriber bases and spectrum portfolios to capture additional share and future growth, particularly through the share data plans. These plans will likely result in even stickier subscribers as consumers attach more devices, creating further barriers to churn. Consequently, Sprint's challenge is magnified, as industry postpaid and prepaid additions are expected to contract further as the industry matures. Additional avenues for incremental revenue growth include mobile broadband/tablet devices and machine-to- machine opportunities. Spectrum Softbank's cash infusion materially strengthened Sprint's flexibility to pursue key consolidation and spectrum opportunities. Fitch views Clearwire's network and spectrum assets as integral to Sprint's long-term evolution (LTE) plans to deploy high-band spectrum in high-capacity areas, particularly within the urban cores under Sprint's control. This strengthens Sprint's long-term competitive position and ability to offer a differentiated unlimited wireless broadband plan versus its national peers. Given Sprint's deep 2.5 GHz spectrum position and unbalanced spectrum portfolio, Fitch believes Sprint could pursue opportunities to swap/sell 2.5 GHz spectrum and increase its holdings of other spectrum bands including the sub 1 GHz band through the 600 MHz broadcast auction. This would enhance Sprint's financial flexibility and allow for an expanded 2.5 GHz device ecosystem. Sprint and DISH could also find themselves at odds again as the FCC finalizes its plan to auction the PCS H-block in late 2013, or more likely in 2014. This spectrum is particularly attractive to each because it is adjacent to Sprint's existing spectrum and strategic to DISH's AWS-4 spectrum holdings. An H-block auction in the 2014 timeframe could increase Sprint's expected deficit if the company participates in the auction. Liquidity, Maturities & Financial Covenants Sprint's liquidity position is supported by $7.8 billion of cash and $2.1 billion borrowing capacity under a revolving credit facility. Softbank will contribute an additional $1.9 billion of cash at closing. Sprint closed a new five-year $3 billion credit agreement earlier this year. As of March 31, 2013, approximately $925 million in letters of credit were outstanding. Sprint also maintains a second tranche of a $500 million vendor financing facility that became available for borrowing on April 1, 2013. Fitch expects Sprint will maintain at least $2 billion of cash going forward to maintain adequate liquidity for its strategic plans. As such, given the high cash requirements to fund the operating deficit related to the capital investment, the Clearwire acquisition and potential spectrum auction, Fitch expects Sprint will substantially increase debt during the next year. Debt refinancing and redemptions have significantly reduced Sprint's maturity profile (excluding Clearwire) from previous years. During the next four years, $356 million, $292 million, $611 million and $2,111 million comes due, respectively. Sprint will consider opportunities to refinance Clearwire's high-coupon debt. Clearwire has $2.95 billion of 12% first-priority secured notes due December 2015. The secured notes currently have optional redemption rights at 106%. This will reduce to 103% in December 2013. The $500 million 12% second priority notes are due in 2017 with optional redemption rights beginning December 2014 at 106%. The $300 million 14.75% first priority secured notes mature in the fourth quarter of 2016 and contain a make-whole premium, thus limiting refinancing options. Financial covenants with the new credit facility have significant cushion against the expected leverage increase with current total leverage ratio not to exceed 6.25 through June 30, 2014. As of March 31, 2013, the leverage ratio was 4.25. The unsecured credit facilities at Sprint benefit from upstream unsecured guarantees from all material subsidiaries. The credit agreement allows carve-outs for indebtedness composed of unsecured guarantees that are expressly subordinated to the credit facility. The unsecured junior guaranteed debt is senior to the unsecured notes at Sprint Nextel and Sprint Capital Corporation. The unsecured senior notes at these entities are not supported by an upstream guarantee from the operating subsidiaries. The $1 billion vendor financing facility is jointly and severally borrowed by all of the Sprint subsidiaries that guarantee the Sprint credit facility, Export Development Canada loan and junior guaranteed notes. The facility additionally benefits from a parent guarantee and first priority lien on certain network equipment. This places the vendor facility structurally ahead of the unsecured notes. SENSITIVITY/RATING DRIVERS Positive: Future developments that may, individually or collectively, lead to a positive rating action include: -- Execution on cost reduction opportunities leading to expansion in operating EBITDA margins approaching 20%; -- Improvement in cash generation such that FCF prospects for the year are approaching breakeven to positive; -- Improved FFO interest coverage approaching 4x; -- Improved FFO adjusted leverage approaching 4x; -- Improvement in postpaid churn by at least 10-20 basis points; -- Positive trends in gross addition share. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Lack of an expected turn-around in FCF generation with persistent negative trends; -- Aggressive spectrum purchases that would increase leverage over 5.5x on a sustained basis; -- Postpaid subscriber trends materially weaken; -- Gross addition share gains fail to materialize; -- Additional material acquisitions. Fitch affirms the ratings of Sprint Nextel and its subsidiaries as follows: Sprint Nextel Corporation; -- IDR at 'B+'; -- Junior guaranteed unsecured notes at 'BB/RR2'; -- Senior unsecured notes at 'B+/RR4'. Sprint Capital Corporation; -- IDR at 'B+'; -- Senior unsecured notes at 'B+/RR4'. Fitch has assigned the following rating: Sprint Nextel Corporation; -- $3 billion senior unsecured credit facility 'BB/RR2'. Fitch has withdrawn the following ratings. Nextel Communications Inc. (Nextel); -- IDR 'B+.' Sprint Nextel Corporation; -- $2.2 billion senior unsecured credit facility at 'BB/RR2'. STANADYNE CORP: S&P Lowers Corporate Credit Rating to 'CCC' ----------------------------------------------------------- Standard & Poor's Ratings Services said that it lowered its ratings on Stanadyne Corp. and its parent, Stanadyne Holdings Inc., including the corporate credit ratings to 'CCC' from 'CCC+'. The outlook is negative. "The downgrade reflects our view that Stanadyne's refinancing risks have increased. The company's first-quarter results were weak, and we believe that its key end markets, such as agricultural equipment, have not improved significantly. As a result, we expect that Stanadyne will make less progress improving its credit measures than we had previously anticipated. We believe that the adjusted debt to EBITDA will likely remain at more than 8x this year (it was more than 10x at the end of the first quarter) and improvements will be subject to either a successful execution of the new high pressure gasoline pump the company is supplying to General Motors Co. or end-market improvement," S&P said. "In addition, we will continue to monitor the company's ability to pay dividends to service notes at the parent company, Stanadyne Holdings Stanadyne's ability to upstream dividends to its parent is governed by a restricted payment basket that depends on Stanadyne Corp.'s net income generation, and we are uncertain whether the company will generate sufficient profit to service the parent's notes. However, Stanadyne's private-equity owner (Kohlberg & Co.) has advised the company that it will provide financial assistance of up to $8 million to Stanadyne Holdings for interest payments due through February 2014," S&P noted. The outlook is negative. "Standard & Poor's believes that Stanadyne will face difficulty refinancing its 2014 maturities unless its operating performance improves significantly and prospects for continued improvement exist," said Standard & Poor's credit analyst Dan Picciotto. S&P could lower the ratings on Stanadyne and its parent if Stanadyne's refinancing risks increase further because credit measures remain very weak and its free cash flow is negative, or if basket restrictions constrain its ability to service Stanadyne Holdings' notes and the owner does not appear likely to provide financial support. S&P could raise the ratings if Stanadyne appears likely to meet its financial obligations in full by refinancing its capital structure. STEADY ROCKIN: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Steady Rockin Transport Inc. 4660 Hiram Lithia Springs Road Powder Springs, GA 30127 Bankruptcy Case No.: 13-64929 Chapter 11 Petition Date: July 6, 2013 Court: United States Bankruptcy Court Northern District of Georgia (Atlanta) Debtor's Counsel: Paul Reece Marr, Esq. PAUL REECE MARR, P.C. 300 Galleria Parkway, N.W., Suite 960 Atlanta, GA 30339 Tel: (770) 984-2255 Fax: (770) 984-0044 E-mail: paul@paulmarr.com Estimated Assets: $0 to $50,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 20 largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/ganb13-64929.pdf The petition was signed by Shonnard O. Reid, chief executive officer. STOCKTON, CA: Sales Tax Measure to Go on Ballot ----------------------------------------------- Jim Christie, writing for Reuters, reported that Stockton, California's city council voted to put a measure increasing the city's sales tax on the November ballot to raise revenue to help the city exit from bankruptcy and to increase spending on public safety. According to the report, the vote came more than a year after the city of roughly 300,000 residents in California's Central Valley became the biggest U.S. city to file for bankruptcy protection from its creditors. If Stockton's voters approve the measure, it would go into effect next April and lift their sales tax to 9 percent from 8.25 percent to raise more than $300 million over 10 years, according to City Manager Bob Deis' office, the report said. Roughly a third of the new revenue would go to help Stockton exit from bankruptcy and the rest would go to public safety programs and to hire 120 new police officers, the report related. "This is a win-win for everybody," said City Council member Michael Tubbs before the council's vote, the report added. About Stockton, Cal. The City of Stockton, California, filed a Chapter 9 petition (Bankr. E.D. Cal. Case No. 12-32118) in Sacramento on June 28, 2012, becoming the largest city to seek creditor protection in U.S. history. The city was forced to file for bankruptcy after talks with bondholders and labor unions failed. Stockton estimated more than $1 billion in assets and in excess of $500 million in liabilities. The city, with a population of about 300,000, identified the California Public Employees Retirement System as the largest unsecured creditor with a claim of $147.5 million for unfunded pension costs. In second place is Wells Fargo Bank NA as trustee for $124.3 million in pension obligation bonds. The list of largest creditors includes $119.2 million owing on four other series of bonds. The city is being represented by Marc A. Levinson, Esq., and John W. Killeen, Esq., at Orrick, Herrington & Sutcliffe LLP. The petition was signed by Robert Deis, city manager. Mr. Levinson also represented the city of Vallejo, Cal. in its 2008 bankruptcy. Vallejo filed for protection under Chapter 9 (Bankr. E.D. Cal. Case No. 08-26813) on May 23, 2008, estimating $500 million to $1 billion in assets and $100 million to $500 million in debts in its petition. In August 2011, Vallejo was given green light to exit the municipal reorganization. The Vallejo Chapter 9 plan restructures $50 million of publicly held debt secured by leases on public buildings. Although the Plan doesn't affect pensions, it adjusts the claims and benefits of current and former city employees. Bankruptcy Judge Michael McManus released Vallejo from bankruptcy on Nov. 1, 2011. The bankruptcy judge on April 1, 2013, ruled that the city of Stockton is eligible for municipal bankruptcy in Chapter 9. TELETOUCH COMMUNICATIONS: Exits Wholesale Distribution Business --------------------------------------------------------------- Teletouch Communications, Inc., has decided to quit its wholesale distribution business as a result of the Company's inability to sustain further losses. The Company decided to exit this line of business effective as of June 7, 2013. The Company incurred approximately $33,000 of severance costs related to the exit efforts. During its 4th quarter of fiscal year 2012, the Company determined to concentrate its efforts on growing its wholesale distribution business to offset the declining revenues and loss of operating margins in its cellular business. Over the past 12 months, the Company has attempted to address the lagging sales and margin figures through more direct involvement by the Company's senior management team with the manufacturers, potential customers and wholesale division personnel. However, these additional efforts have not shown to be successful and the Company sustained significant losses in its efforts to grow this segment of its business. Through the nine-month period ended Feb. 28, 2013, the wholesale business has incurred an operating loss of $697,000 and these losses have continued through the 4th quarter ended May 31, 2013, due to increasingly low sales. As a consequence of the Company's losses from sustaining the wholesale distribution operations, the Company is now experiencing significant liquidity challenges. Furthermore, the Company has been and remains unable to meet its consolidated financial projections that were made to its senior lender, DCP, Teletouch Lender, LLC, and, DCP has been notified that the Company failed to meet its financial covenants under the DCP Loan Agreement. The remaining cellular operations of the business are continuing to decline, as anticipated, so the Company is currently evaluating its options to improve its liquidity, including, without limitation, further cost reduction plans as well as capital raising opportunities. Pursuant to the DCP Loan Agreement, the Company is required to provide a plan that is acceptable to DCP. In the absence of that plan or in the event DCP does not accept that plan when presented, DCP could seek to avail itself of remedies under the DCP Loan Agreement, including, among others, foreclosing on the assets of the Company or by directing the Company to liquidate substantially all of its assets in an orderly manner to satisfy this debt. DCP Revolving Facility On Feb. 8, 2013, the Company entered into a Loan and Security Agreement with DCP, Teletouch Lender, LLC, a New York based private lender. Under the terms of the DCP Loan Agreement, the Company had the ability to borrow up to $6 million under the DCP Loan Agreement's revolving credit facility. The term of the loan initially matures on Jan. 31, 2015, and may be extended for an additional year at the Company's sole election. On June 15, 2013, the Company also may be deemed to have triggered a non-payment default provision under the DCP Loan Agreement when the loan amount was overadvanced, as the term is defined under the DCP Loan Agreement. The overadvancement in the amount of approximately $164,000 resulted in the Company not having sufficient cash on hand to repay the principal obligations due and payable under the DCP Loan Agreement within 48 hours, which default was then cured on June 19, 2013, by adding additional assets to the borrowing base thereby remedying the alleged event of default. However, on June 24, 2013 the Company again became overadvanced under the DCP Loan Agreement and this situation continued through the remainder of the month of June 2013 and is continuing through the date of this Current Report. On July 8, 2013, the Company received a demand from DCP to make a $300,000 payment against the overadvance. Following this repayment, the Company is left with less than $200,000 of cash remaining in its operating accounts. DCP has continued to reserve all rights available to it under the DCP Loan Agreement and as of the date of this filing has not acted on its right to take control of all of the Company's cash while the overadvance continues. DCP has communicated to the Company that it was in the process of formally noticing the Company of the default under the DCP Loan Agreement and will continue to evaluate its intent to continue funding the overadvance to allow the Company to continue to operate. As of July 10, 2013, that notice from DCP has not been received and to the best of the Company's knowledge, DCP has not commenced any other actions against the Company at this time. Real Estate Loans As previously disclosed, the Company's real estate loan agreements with East West Bank and Jardine Capital Corporation, with the outstanding balances of approximately $1,984,400 and $525,900 as of the date of this filing, respectively, initially matured on May 3, 2012. Subsequently, Jardine Capital Corporation has granted several extensions of the maturity of the loan balance and has recently granted another extension of the maturity of the loan through May 31, 2013, for a 1 percent extension fee (approximately $5,350) with no changes in the terms under the original agreement. Prior to the May 31, 2013, maturity of the Jardine Bank debt, the Company requested another loan extension, but as of the date hereof, no such extension has been granted. On May 23, 2013, the Company amended its previously disclosed loan agreement with East West Bank to extend the maturity date under from Feb. 3, 2013, to Aug. 31, 2013. In consideration of such extension, the Company made a principal payment in the amount of $50,000 and an extension fee of $5,159. The Company is investigating refinancing opportunities of the real estate subject to the foregoing loan agreements. If the real estate that is subject of the above-referenced real estate loan agreements is sold, the Company may receive sufficient proceeds to pay the balance due on all of its current real estate debt. However, that the Company can provide no assurance it will be successful in securing new real estate financing, or that the proceeds of the sale or the real estate will be sufficient to pay the outstanding indebtedness secured thereby, or that Jardine Bank will extend the current maturity date of the loan or that any such extensions will allow a sufficient amount of time for the Company to secure the new real estate financing. A complete copy of the Form 8-K is available for free at: http://is.gd/WBb7Gd About Teletouch Teletouch Communications, Inc., offers a comprehensive suite of wireless telecommunications solutions, including cellular, two-way radio, GPS-telemetry and wireless messaging. Teletouch is an authorized provider of AT&T (NYSE: T) products and services (voice, data and entertainment) to consumers, businesses and government agencies, as well as an operator of its own two-way radio network in Texas. Recently, Teletouch entered into national agency and distribution agreements with Sprint (NYSE: S) and Clearwire (NASDAQ: CLWR), providers of advanced 4G cellular network services. Teletouch operates a chain of 26 retail and agent stores under the "Teletouch" and "Hawk Electronics" brands, in conjunction with its direct sales force, customer care (call) centers and various retail eCommerce Web sites including: http://www.hawkelectronics.com/and http://www.hawkexpress.com/ Through its wholly-owned subsidiary, Progressive Concepts, Inc., Teletouch operates a national distribution business, PCI Wholesale, primarily serving large cellular carrier agents and rural carriers, as well as auto dealers and smaller consumer electronics retailers, with product sales and support available through http://www.pciwholesale.com/and http://www.pcidropship.com/among other B2B oriented Web sites. BDO USA, LLP, in Houston, Texas, issued a "going concern" qualification on the consolidated financial statement for the year ended May 31, 2012. The independent auditors noted that the Company has increasing working capital deficits, significant current debt service obligations, a net capital deficiency along with current and predicted net operating losses and negative cash flows which raise substantial doubt about its ability to continue as a going concern. For the nine months ended Feb. 28, 2013, the Company incurred a net loss of $622,000 on $14.94 million of total operating revenues, as compared with net income of $4 million on $19.02 million of total operating revenues for the nine months ended Feb. 29, 2012. The Company's balance sheet at Feb. 28, 2013, showed $10.38 million in total assets, $16.91 million in total liabilities and a $6.53 million total shareholders' deficit. THERMOENERGY CORP: Moody Replaces Grant Thornton as Accountants --------------------------------------------------------------- The Audit Committee of ThermoEnergy Corporation's Board of Directors voted to dismiss Grant Thornton LLP as the Company's independent registered public accounting firm and, on the same day, engaged Moody, Famiglietti & Andronico, LLP, as the Company's new independent registered public accounting firm. Grant Thornton had been appointed as the Company's independent registered public accounting firm on Dec. 1, 2011. Grant Thornton's reports on the Company's consolidated financial statements for the years ended Dec. 31, 2012, and 2011 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except for emphasis of matter paragraphs which discussed substantial doubt regarding the Company's ability to continue as a going concern. The dismissal was not a result of any disagreement with the accounting firm. During the fiscal years ended Dec. 31, 2012, and 2011 and during the interim period from Jan. 1, 2013, through July 12, 2013, neither the Company nor anyone acting on its behalf consulted MFA regarding the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and MFA did not provide either a written report or oral advice to the Company that was a factor considered by the Company in reaching a decision as to any accounting, auditing, or financial reporting issue. About ThermoEnergy Corporation Little Rock, Ark.-based ThermoEnergy Corporation is a clean technologies company engaged in the worldwide development of advanced municipal and industrial wastewater treatment systems and carbon reducing clean energy technologies. The Company incurred a net loss of $7.38 million for the year ended Dec. 31, 2012, as compared with a net loss of $17.38 million on $5.58 million of revenue in 2011. The Company's balance sheet at March 31, 2013, showed $5.93 million in total assets, $17.46 million in total liabilities and a $11.52 million total stockholders' deficiency. Grant Thornton LLP, in Westborough, Massachusetts, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company incurred a net loss of $7,382,000 during the year ended Dec. 31, 2012, and, as of that date, the Company's current liabilities exceeded its current assets by $7,094,000 and its total liabilities exceeded its total assets by $10,611,000. These conditions, among other factors, raise substantial doubt about the Company's ability to continue as a going concern. THINKFILM LLC: Creditor Suit vs. Bergstein Stays in Bankr. Court ---------------------------------------------------------------- Lance Duroni of BankruptcyLaw360 reported that a California federal judge refused to withdraw from bankruptcy court a lawsuit accusing film financier David Bergstein and his former partner, Miramax Films co-owner Ron Tutor, of dodging the creditors of Bergstein's bankrupt company. According to the report, U.S. District Judge Philip S. Gutierrez rejected Bergstein and Tutor's bid to remove the case to the district court, saying removal would be an "inefficient use of judicial resources" because the bankruptcy judge is already familiar with the case and the adversary suit is just one of many in R2D2's bankruptcy case. About Thinkfilm LLC CapCo Group LLC and four other companies controlled by David Bergstein are part of a wider network of entities that distribute and finance films. Among the approximately 1,300 films they have the rights to are "Boondock Saints" and "The Wedding Planner." Several creditors filed for involuntary Chapter 11 bankruptcy against the companies on March 17, 2010 -- CT-1 Holdings LLC (Bankr. C.D. Calif. Case No. 10-19927); CapCo Group, LLC (Bankr. C.D. Calif. Case No. 10-19929); Capitol Films Development LLC (Bankr. C.D. Calif. Case No. 10-19938); R2D2, LLC (Bankr. C.D. Calif. Case No. 10-19924); and ThinkFilm LLC (Bankr. C.D. Calif. Case No. 10-19912). Judge Barry Russell presides over the cases. The Petitioners are represented by David L. Neale, Esq., at Levene Neale Bender Rankin & Brill LLP. Judge Barry Russell formally declared David Bergstein's ThinkFilm LLC and Capitol Films Development bankrupt on Oct. 5, 2010. Mr. Bergstein is being sued for tens of millions of dollars by nearly 30 creditors -- including advertisers, publicists and the Writers Guild West. Five Bergstein controlled companies have been named in the suit. THQ INC: Int'l Units Fight Plan Reclassifying $107MM Claims ----------------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that foreign subsidiaries of bankrupt THQ Inc. protested the defunct video game maker's plan to classify their $107 million in claims in a way that makes it unlikely they'll be paid, arguing that they need the money for wind-downs and liquidations of their own. According to the report, the subsidiaries -- THQ units in France, Germany, Italy, Spain and the United Kingdom -- along with a Swiss holding company filed their objection in the U.S. Bankruptcy Court for the District of Delaware. About THQ Inc. THQ Inc. (NASDAQ: THQI) -- http://www.thq.com/-- was a worldwide developer and publisher of interactive entertainment software. The Company developed its products for all popular game systems, personal computers, wireless devices and the Internet. Headquartered in Los Angeles, California, THQ sold product through its network of offices located throughout North America and Europe. THQ Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 12-13398) on Dec. 19, 2012. Michael R. Nestor, M. Blake Cleary and Jaime Luton Chapman at Ypung Conaway Stargatt & Taylor, LLP; and Oscar Garza at Gibson, Dunn & Crutcher LLP represent the Debtors. FTI Consulting and Centerview Partners LLC are the financial advisors. Kurtzman Carson Consultants is the claims and notice agent. Before the bankruptcy, Clearlake signed a contract to buy Agoura THQ for a price said to be worth $60 million. After a 22-hour auction with 10 bidders, the top offers brought a combined $72 million from several buyers who will split up the company. Judge Walrath approved the sales in January. Some of the assets didn't sell, including properties the company said could be worth about $29 million. Roberta A. DeAngelis, U.S. Trustee for Region 3, appointed five persons to serve in the Official Committee of Unsecured Creditors. The Committee tapped Houlihan Lokey Capital as its financial advisor and investment banker, Landis Rath & Cobb as co-counsel and Andrews Kurth as counsel. TLO LLC: Hires Ahearn Jasco as Accountants ------------------------------------------ TLO LLC seeks permission from the U.S. Bankruptcy Court for the Southern District of Florida to employ Frank E. Jaumot, CPA, and Ahearn, Jasco + Company, P.A., as its accountants. The firm will, among other things: a. prepare required yearly Federal and State Income Tax Returns with supporting schedules; b. prepare compilations of the Debtor-In-Possession's books as needed; c. assist Debtor in preparation of its Plan, Disclosure Statement and other work appropriate to this Chapter 11 proceeding; and d. assist in the preparation of the "Debtor's Chapter 11 Monthly Operating Report". Mr. Jaumot and AJC have agreed to accept compensation on an hourly basis at its standard billing rates ranging from $125 to $455 per hour based on the individuals in the firm providing services, for preparation and filing of the required yearly Federal and State Income Tax Returns and other consulting and accounting matters, plus necessary and actual expenses from the bankruptcy estate pursuant to the provisions of the Bankruptcy Code. A court hearing to consider approval of the application is scheduled for July 16. About TLO LLC TLO LLC, a provider of risk-mitigation services, filed a petition for Chapter 11 reorganization (Bankr. S.D. Fla. Case No. 13-bk20853) on May 9, 2013, in West Palm Beach, Florida, near the company's headquarters in Boca Raton. The petition was signed by E. Desiree Asher as CEO. Judge Paul G. Hyman, Jr., presides over the case. Furr & Cohen serves as the Debtor's counsel. The Debtor disclosed assets of $46.6 million and liabilities of $109.9 million, including $93.4 million in secured claims. The principal lender is Technology Investors Inc., owed $89 million. TII is owned by the estate of Hank Asher, the company's primary owner who died this year. There is $4.6 million secured by computer equipment. TLO LLC: Taps Akerman Senterfitt as Corporate Counsel ----------------------------------------------------- TLO LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ David Ristaino and the law firm of Akerman Senterfitt as corporate special counsel. The firm will, among other things, act as general corporate counsel on an as needed basis during the day to day operations of the Debtor's existing business and review employment contracts, asset sale agreements, and any other contract implicated by the Debtor's continued operation. The hourly rates for attorneys at Akerman who may work on the Debtor's case, range from $190 to $600. David Ristaino will be the Akerman attorney principally working on this matter, and his hourly rate is $480. To the best of the Debtor's knowledge, neither David Ristaino nor Akerman have any undisclosed connection with the creditors or other parities in interest or their respective attorneys. Neither David Ristaino nor Akerman represent any interest adverse to the Debtor. A court hearing to consider approval of the application is scheduled for July 16. About TLO LLC TLO LLC, a provider of risk-mitigation services, filed a petition for Chapter 11 reorganization (Bankr. S.D. Fla. Case No. 13-bk20853) on May 9, 2013, in West Palm Beach, Florida, near the company's headquarters in Boca Raton. The petition was signed by E. Desiree Asher as CEO. Judge Paul G. Hyman, Jr., presides over the case. Furr & Cohen serves as the Debtor's counsel. The Debtor disclosed assets of $46.6 million and liabilities of $109.9 million, including $93.4 million in secured claims. The principal lender is Technology Investors Inc., owed $89 million. TII is owned by the estate of Hank Asher, the company's primary owner who died this year. There is $4.6 million secured by computer equipment. TOLEDO-LUCAS COUNTY PORT: Fitch Affirms 'BB' Rating on $67MM Bonds ------------------------------------------------------------------ Fitch Ratings has affirmed the 'BB' rating on the $67.7 million Toledo-Lucas County Port Authority, OH (Crocker Park Public Improvement Project) special assessment revenue bonds, series 2003. The Rating Outlook is Stable. SECURITY The bonds are special limited obligations payable by the issuer from special assessments levied on the assessment property by the city of Westlake. A debt service reserve fund equal to maximum annual debt service (excluding the final maturity) is fully funded through a guaranteed investment contract. KEY RATING DRIVERS SINGLE-PAYOR RISK: Pledged special assessments are payable from a single payor on property comprising a small, highly concentrated geographic area. IMPROVING BUT STILL WEAK PROJECT CASH-FLOWS: Despite high occupancy rates, the project does not generate cash-flow sufficient to cover mortgage payments. Project cash-flows improved from very weak levels and in fiscal 2012 covered the substantial mortgage payment by 0.9x, up from about 0.57x in 2011. PROJECT OBLIGATIONS CURRENT: The project generates enough coverage for property taxes and special assessments. While coverage of mortgage payments is insufficient, both special assessments (which support the bonds) and mortgage payments have been kept current. LIEN SUPERIOR TO MORTGAGE OBLIGATION: Special assessment payments, equal to at least annual debt service through final bond maturity regardless of the assessed value of property, are on parity with property taxes and are senior to the sizable mortgage payments. HIGH LEVERAGE: Fitch-estimated loan-to-value has moderated from very high levels to a still elevated 1.1:1. This combined with the cash-flow shortfall underscores Fitch's concerns about the developer's continued willingness and ability to continue to make special assessment payments, although Fitch notes that coverage trends are positive. RATING SENSITIVITIES FAILURE TO PAY PROPERTY OBLIGATIONS: Failure to pay special assessments or the subordinate mortgage payments on time could cause a downgrade. CONTINUED COVERAGE EROSION: Continued lack of sum sufficient cash- flow coverage of mortgage payments could put further downward pressure on the rating. MORTGAGE WITH SPECIAL SERVICER: Placement of the mortgage with a special servicer would indicate severe stress, but could ultimately be a stabilizing factor at a lower rating level. LACK OF SUFFICIENT OR TIMELY INFORMATION: The inability to receive information pertinent to the rating of these obligations by Fitch on a timely basis could result in a change or withdrawal of the rating. CREDIT PROFILE SINGLE-PAYOR RISK The bonds are secured by special assessments payable by a single payor, Crocker Park, LLC (the developer/owner), an affiliate of Robert L. Stark Enterprises. The special assessment property is within an established retail area, Crocker Park, in affluent Westlake, Ohio (rated 'AAA' by Fitch). The area has complementary retailers, office and residential units and retains a competitive position in the region. The assessment property is composed of the retail portion of Crocker Park with over 630,000 square feet of retail space anchored by several major retailers, in addition to office space and residential properties. MATURE PROJECT WITH HIGH OCCUPANCY RATES All phases of the development anticipated at the time of the bond financing have been completed. Occupancy rates recently have been quite strong, ranging from 92% to 100%. Development continues in areas adjacent to the assessment property. Plans for construction of a new headquarters for American Greetings, expected to result in the addition of 1,500 jobs, should further strengthen consumer demand at the mall. The development generates cash-flow insufficient to support large mortgage payments, after payment of special assessments, despite the high occupancy rates. Mortgage coverage improved to 0.89x in 2012 after sinking to 0.57x in 2011 from 0.75x in 2010; however, the developer is current on mortgage payments. LIEN SUPERIOR TO MORTGAGE OBLIGATION The special assessments are on parity with real estate taxes and are senior to an outstanding mortgage on the property. Special assessments were authorized in aggregate maximum annual installments of $6 million for the term of the bonds and are levied annually in an amount sufficient to pay annual debt service. Fitch remains concerned about the current or any future owner's incentive to continue to make special assessment payments, given the high overall loan-to-value ratio of 1.1:1, using Fitch's conservative stressed value of the entire development. STRUCTURAL PROTECTIONS Fitch derives some comfort from the superiority of the lien to those of larger obligations; however, the weak coverage of the mortgage obligation introduces risk of payment disruption should the loan go into foreclosure. Fitch believes the presence of a master servicer (and the addition of a special servicer, if necessary) as part of the mortgage trust securitization may prove to be a stabilizing factor, should the trust have sufficient resources and choose to provide liquidity to bridge any payment interruption during a work-out. The 'BB' rating does not assume any such external support from the trust. For additional information, see 'Fitch Ratings Downgrades Five Classes of BSCMST 2005 - PWR10; Removes One Class from Watch Negative,' March 1, 2013, available at www.fitchratings.com. TOOTIE PIE: Chapter 11 Petition Filed ------------------------------------- Tootie Pie Company, which manufactures, markets and sells handmade, fully-baked high quality pies, filed for Chapter 11 protection (Bankr. W.D. Tex. Case No. 13-51808). The Company is represented by Ronald J. Smeberg of The Smeberg Law Firm. BankruptcyData reported that the Company announced that Don L. Merrill, Jr. has agreed to resign his previous positions as president/C.E.O. and interim C.F.O. of the Company, although he will remain as a director, the report related. Leslie E. Doss, a director of the Company, was appointed by the board and agreed to fill those positions on an interim basis. Tootie Pie Company also announced that it has been locked out by the landlord from two of its Tootie Pie Company Gourmet Cafe Texas-based locations and is "currently investigating the possibility of attempting to re-enter and continue operation at these two locations," the report added. TOUSA INC: Seeks to Establish Disputed Claims Reserve ----------------------------------------------------- BankruptcyData reported that TOUSA and its official committee of unsecured creditors filed with the U.S. Bankruptcy Court a joint motion for entry of an order, pursuant to Bankruptcy Code Sections 105(a), 502(c) and 1142, for an order establishing a disputed claims reserve in connection with the Company's Amended Joint Plan of Liquidation. The motion explains, "The Parties propose to set the Disputed Claims Reserve Amount at $6,686,579 in Cash on account of Allowed Administrative Claims, Allowed Priority Claims and Allowed General Unsecured Claims plus, with respect to Allowed General Unsecured Claims, a corresponding amount of Liquidation Trust Interests, to the extent applicable, which will provide protection to holders of Disputed Claims against the possibility that the Debtors' aggregate estimates are too low, while still allowing distributions to be made to the holders of Allowed Claims as of the Effective Date in a fair and timely fashion. During the pendency of these cases, the Debtors have expunged or altered more than 5,155 claims, totaling a reduction of more than $1.1 billion, and have resolved or will resolve more than $5.5 billion in Claims pursuant to the Plan. The significant percentage of Claims objected to and resolved demonstrates the Parties' ability to properly and accurately estimate the Claims against the Debtors' estates. Accordingly, the Court can and should rely on the Parties' estimate of the ultimate Allowed amount of Claims against the Debtors for purposes of establishing the Disputed Claims Reserve, as contemplated by the Plan," the report said, citing court documents. About TOUSA Inc. Headquartered in Hollywood, Florida, TOUSA, Inc. (Pink Sheets: TOUS) -- http://www.tousa.com/-- fka Technical Olympic U.S.A. Inc., dba Technical U.S.A., Inc., Engle Homes, Newmark Homes L.P., TOUSA Homes Inc. and Newmark Homes Corp. is a leading homebuilder in the United States, operating in various metropolitan markets in 10 states located in four major geographic regions: Florida, the Mid-Atlantic, Texas, and the West. The Debtor and its debtor-affiliates filed for separate Chapter 11 protection on Jan. 29, 2008 (Bankr. S.D. Fla. Case No. 08-10928). Richard M. Cieri, Esq., M. Natasha Labovitz, Esq., and Joshua A. Sussberg, Esq., at Kirkland & Ellis LLP, in New York, N.Y.; and Paul S. Singerman, Esq., at Berger Singerman, in Miami, Fla., represent the Debtors in their restructuring efforts. Lazard Freres & Co. LLC is the Debtors' investment banker. Ernst & Young LLP is the Debtors' independent auditor and tax services provider. Kurtzman Carson Consultants LLC acts as the Debtors' Notice, Claims & Balloting Agent. TOUSA's direct subsidiary, Beacon Hill at Mountain's Edge LLC dba Eagle Homes, filed for Chapter 11 Protection on July 30, 2008 (Bankr. S.D. Fla. Case No. 08-20746). It estimated assets and debts of $1 million to $10 million in its Chapter 11 petition. The official committee of unsecured creditors has filed a proposed chapter 11 liquidating plan for Tousa. However, the committee said it would no longer pursue approval of its liquidation plan because of the pending appeal of its fraudulent transfer case in the U.S. Court of Appeals for the Eleventh Circuit. A district court in February 2011 held that the bankruptcy judge was wrong in ruling that lenders who were paid off received fraudulent transfers when Tousa gave liens on subsidiaries' properties to bail out and refinance a joint venture. Daniel H. Golden, Esq., and Philip C. Dublin, Esq., at Akin Gump Strauss Hauer & Feld LLP, in New York, N.Y., represent the creditors committee. Tousa and the official committee of unsecured creditors has filed a proposed chapter 11 liquidating plan following a settlement between the Debtor and creditors and other settlements crafted by mediator Peter L. Borowitz. The settlement was made after a May 2012 U.S. Court of Appeals in Atlanta decision that found that banks received fraudulent transfers exceeding $400 million. Tousa intends to have a confirmation hearing for the Plan in August. TRADER CORP: Moody's Changes Outlook to Negative & Keeps B3 CFR --------------------------------------------------------------- Moody's Investors Service affirmed Trader Corporation's B3 corporate family rating, B3-PD probability of default rating, Ba3 senior secured revolving facility rating, B3 senior secured notes rating and SGL-3 speculative grade liquidity rating, and changed the company's ratings outlook to negative from stable. "The outlook change to negative reflects weaker top line growth expectations as digital revenue is not expanding sufficiently to compensate for the decline in print-based revenue," says Peter Adu, Moody's lead analyst for Trader. "As a result, Trader's profitability is not likely to improve and leverage is expected to remain around 8x through the next 12 to 18 months, which is not supportive of the B3 CFR," Adu added. Affirmations: Issuer: Trader Corporation Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Speculative Grade Liquidity Rating, Affirmed SGL-3 Senior Secured Bank Credit Facility, Affirmed Ba3, LGD1, 1% Senior Secured Regular Bond/Debenture, Affirmed B3, LGD3, 48% (from LGD3, 44%) Outlook Actions: Issuer: Trader Corporation Outlook, Changed To Negative from Stable Ratings Rationale: Trader's B3 CFR primarily reflects its high leverage (adjusted Debt/EBITDA of 7.7x at Q1/13) and substantial business risk resulting from its declining revenue trend as it transitions to a fully digital platform. While legacy print-based revenues continue to decline due to changing technology and consumer preferences, and is now less than 10% of revenue, digital sales have not expanded fast enough to sustain the company's top line or EBITDA. Also, there is limited forward visibility to the digital platform's growth potential in Canada due to soft economic conditions and rising competition. The rating benefits from the company's well recognized brand in Canada, subscription-based recurring revenue and good EBITDA margins. Moody's expects top line growth to remain weak and leverage to be maintained around 8x through the next 12 to 18 months. Trader's liquidity is adequate as evidenced by the SGL-3 rating. This is supported by access to a $30 million committed revolving credit facility due 2016, expectations for cash balances in excess of $10 million through the next 4 to 6 quarters, and lack of meaningful debt maturity until the revolver matures. Moody's expects free cash flow generation to be slightly negative to breakeven for the next 4 to 6 quarters. Trader is subject to total leverage and interest coverage covenants and Moody's expects cushion to be maintained above 10% even after step downs occur for the leverage covenant starting in Q4/13. The rating outlook is negative because of Trader's declining revenue and profitability which may cause leverage to remain at a level that is higher than appropriate for the B3 CFR. Trader's rating would be downgraded should its liquidity position deteriorate. Downward rating pressure could also arise if Trader sustains adjusted Debt/ EBITDA above 8x and (EBITDA- CapEx)/Interest Expense below 1x. Upward rating action could be considered should Trader sustain adjusted Debt/ EBITDA towards 5.5x and (EBITDA-CapEx)/Interest Expense above 1.5x. The principal methodology used in this rating was the Global Publishing Industry Methodology 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. Trader Corporation is a provider of advertising and digital marketing services for Canadian automotive dealers. Revenue for the last twelve months ended March 31, 2013 was $150 million. The company is headquartered in Toronto, Ontario, Canada and is owned by Apax Partners L.P. TRIBUNE CO: To Separate Broadcasting, Publishing Businesses ----------------------------------------------------------- Reuters reported that Tribune Co. will separate its publishing business from its more-profitable broadcast division, it said on Wednesday, following the path taken by Time Warner and News Corp. According to the report, media companies have been shedding their print assets to allow a greater focus on their faster-growing broadcast businesses. Tribune plans a tax-free spinoff of its eight newspapers, which include the Los Angeles Times and Chicago Tribune, the report said. The new company, Tribune Publishing Co., will have its own board and senior management team. The broadcast company, which will retain the Tribune name, will include its 42 local TV stations, superstation WGN America, an equity stake in the TV Food Network, and digital and real estate assets, the report related. "Each will be a stronger company when separated from the other," Tribune Chief Executive Officer Peter Liguori wrote in memo to employees," the report cited. "(The spinoff) will also allow us to maintain flexibility as we continue considering all our strategic alternatives for maximizing shareholder value." About Tribune Co. Chicago, Illinois-based Tribune Co. -- http://www.tribune.com/-- and 110 of its affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 08-13141) on Dec. 8, 2008. The Debtors proposed Sidley Austin LLP as their counsel; Cole, Schotz, Meisel, Forman & Leonard, PA, as Delaware counsel; Lazard Ltd. and Alvarez & Marsal North America LLC as financial advisors; and Epiq Bankruptcy Solutions LLC as claims agent. As of Dec. 8, 2008, the Debtors listed $7,604,195,000 in total assets and $12,972,541,148 in total debts. Chadbourne & Parke LLP and Landis Rath LLP served as co-counsel to the Official Committee of Unsecured Creditors. AlixPartners LLP served as the Committee's financial advisor. Landis Rath Moelis & Company served as the Committee's investment banker. Thomas G. Macauley, Esq., at Zuckerman Spaeder LLP, in Wilmington, Delaware, represented the Committee in connection with the lawsuit filed against former officers and shareholders for the 2007 LBO of Tribune. Protracted negotiations and mediation efforts and numerous proposed plans of reorganization filed by Tribune Co. and competing creditor groups delayed Tribune's emergence from bankruptcy. Many of the disputes among creditors center on the 2007 leveraged buyout fraudulence conveyance claims, the resolution of which is a key issue in the bankruptcy case. Judge Kevin J. Carey issued an order dated July 13, 2012, overruling objections to the confirmation of Tribune Co. and its debtor affiliates' Plan of Reorganization. In November 2012, Tribune received approval from the Federal Communications Commission to transfer media licenses, one of the hurdles to implementing the reorganization plan. Aurelius Capital Management LP failed in halting implementation of the plan pending appeal. Tribune Co. exited Chapter 11 protection Dec. 31, 2012, ending four years of reorganization. The reorganization allowed a group of banks and hedge funds, including Oaktree Capital Management and JPMorgan Chase & Co., to take over the media company. TRUCEPT INC: Suspending Filing of Reports with SEC -------------------------------------------------- Trucept Inc. filed a Form 15 with the U.S. Securities and Exchange Commission to voluntarily terminate the registration of its common stock, par value $0.001, under Section 12(g) of the Securities Exchange Act of 1934. As of July 10, 2013, there were approximatley 410 holders of the common shares. As a result of the Form 15 filing, the Company is suspending its obligations to file reports with the SEC. About Trucept Inc. Trucept Inc. provides staffing and employment services, relieving its clients from many of the day-to-day tasks that may detract their core business operations , such as payroll processing, human resources support, workers' compensation insurance, safety programs, employee benefits, and other administrative and aftermarket services predominantly related to staffing. The company also operates the Solvis brand of nurse staffing in both Michigan and California. Trucept Inc. disclosed a net loss of $7.85 million in 2012, as compared with a net loss of $8.12 million in 2011. The Company's balance sheet at Dec. 31, 2012, showed $8.17 million in total assets, $22.93 million in total liabilities and a $14.75 million total stockholders' deficit. PMB Helin Donovan, LLP, in Dallas, Texas, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has sustained recurring losses from operations and has an accumulated deficit of approximately $22 million at Dec. 31, 2012. These factors raise substantial doubt about the Company's ability to continue as a going concern. US SILICA: New $425MM Sr. Debt Facility Gets Moody's B1 Rating -------------------------------------------------------------- Moody's Investors Service changed U.S. Silica, Inc.'s outlook to positive from stable and assigned a B1 rating to the company's proposed $425 million senior secured credit facility and a speculative grade liquidity rating of SGL-2. Moody's affirmed US Silica's B1 corporate family rating and its B2-PD probability of default rating since the company will have only first lien bank debt after the proposed refinancing is completed. The proceeds from the proposed credit facility will be used to repay the outstanding balance under the existing credit facilities, and for general corporate purposes including internal growth initiatives, acquisitions, dividends and share repurchases. The following actions were taken: Proposed $425 million senior secured credit facility, assigned B1 (LGD3, 30%); Corporate family rating, affirmed at B1; Probability of default rating, affirmed at B2-PD; Speculative grade liquidity rating, assigned at SGL-2. Ratings Rationale: The change in US Silica's outlook to positive is based on the company's significantly stronger operating performance, substantial improvements in leverage and interest coverage, reduced ownership position of a major shareholder and Moody's expectation that continued stability in the hydraulic fracturing (fracking) industry will continue to support strong operating cash flow generation. U.S. Silica has almost doubled its revenues over the past three years due to rising demand for frac sand along with the pursuit of strategic growth initiatives and acquisitions. At the same time, the company has achieved a substantial expansion in EBITDA margins, which have increased by more than 650 basis points to approximately 36.6% on a Moody's adjusted basis. The strong operating performance has enabled the company to generate enough cash to pursue strategic growth initiatives, pay shareholder dividends and still reduce its leverage ratios while raising its interest coverage ratio. Silica's debt to book capitalization declined to 57% at year-end 2012 from 65% in the prior year while Debt/EBITDA declined to 2.3x from 3.8x and its interest coverage ratio (EBIT/Interest Expense) rose to 6.1x from 2.8x. In addition, the company's private equity ownership (Golden Gate Capital) has been reduced to 33% from 78% over the past 18 months due to an initial public offering in January 2012 and two secondary offerings in the first half of 2013. Moody's views this as a credit positive since it is likely to reduce the incentive to pursue shareholder friendly actions. U.S. Silica's B1 corporate family rating reflects its limited size, lack of free cash flow, reliance on a single commodity product, exposure to cyclical end markets and reliance on the hydraulic fracturing industry for the majority of its revenue and operating income. Its credit profile is supported by the company's significantly improved operating results, modest debt leverage, strong interest coverage, high profit margins and solid market position in the growing frac-sand industry. The company's credit profile also benefits from its position as the second-largest producer of industrial silica in the United States, its extensive proven and probable reserves, strategically located quarries and production facilities, developed logistical network and long- standing customer relationships. Moody's assigned a B1 rating to the proposed senior secured credit facility, which is on par with the B1 corporate family rating since the credit facility accounts for 100% of the debt in the company's capital structure. The credit facility is comprised of a $50 million revolving credit facility due 2018 and a $375 million term loan due 2020. These credit facilities are secured by a first priority lien on all existing and after-acquired assets of the borrower and guarantors. The B2-PD probability of default rating is one notch lower than the corporate family rating to reflect the higher (65%) recovery rate utilized in Moody's loss-given-default methodology for companies that rely primarily on first-lien bank loans. Historical recovery studies indicate that corporate capital structures comprised solely of bank debt have higher recovery values than those that utilize a combination of bank debt and other debt instruments. US Silica's speculative grade liquidity rating of SGL-2 reflects the company's good liquidity position and Moody's expectation they will begin to generate positive free cash flow over the next 12 to 18 months. The company is expected to have pro forma liquidity of approximately $200 million, consisting of about $150 million in cash and an undrawn $50 million revolver when the proposed refinancing is complete. The company has generated negative free cash flow over the past several years due to shareholder dividends and capital investments in raw sand plants, resin coated product facilities and transloading terminals. Moody's expects Silica to continue to pursue growth initiatives and to pay a quarterly dividend, but anticipates the company could begin to generate modest free cash flow as capital investments decline from an elevated level and cash flow from operations increases along with improved operating results. The positive outlook presumes that market conditions remain relatively stable and the company carefully balances its leverage and other credit metrics with its growth strategies. The ratings could experience upward pressure if the company continues to build greater scale and diversity, generates positive free cash flow, sustains EBITDA margins above 30% and reduces its adjusted debt-to-book capitalization below 55%. The ratings would be considered for a downgrade in the event that EBITDA margins deteriorate significantly; the company more aggressively pursues growth or shareholder friendly initiatives, or experiences deteriorating operating results that lead to adjusted debt-to-EBITDA rising above 4.0x, EBIT/Interest declining below 2.5x or significantly reduced liquidity. 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. Based in Frederick, Maryland, U.S. Silica operates 15 silica mining and processing facilities and is the second-largest producer of industrial silica sand in North America. The company holds approximately 306 million metric tons of reserves, including 143 million tons of API spec frac sand and mostly serves the oil & gas, glass, building products and chemicals sectors. In the twelve months ended March 31, 2013, the company generated revenue of $462 million. USIC HOLDINGS: S&P Assigns 'B' Corp. Credit Rating; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services said that it assigned its 'B' corporate credit rating to USIC Holdings Inc. The rating outlook is stable. S&P also assigned its 'B' issue-level rating to USIC's proposed $505 million first-lien senior secured credit facility, which consists of a $75 million revolver (unfunded at close) and a $430 million term loan. S&P assigned its '3' recovery rating to the first-lien debt, indicating its expectation of meaningful (50%-70%) recovery for lenders in the event of a payment default. S&P also assigned its 'CCC+' issue-level rating to USIC's proposed $165 million second-lien senior secured credit facility and a recovery rating of '6', indicating its expectation of negligible (0%-10%) recovery for lenders in the event of a payment default. "We intend to withdraw the 'B+' corporate credit rating on United States Infrastructure Corp. (which Leonard Green Partners L.P. is acquiring) and the 'BB-' rating on its existing rated debt once the proposed financing is complete because all existing debt will have been refinanced," said Standard & Poor's credit analyst Nishit Madlani. The ratings on USIC reflect S&P's view of the company's "weak" business risk profile and "highly leveraged" financial risk profile. The business risk profile assessment reflects USIC's high customer concentration and limited end-market diversity, albeit with a meaningful market share in a legally mandated, niche service. S&P's financial risk profile assessment reflects its expectation that leverage will remain well above 6.0x over the next two years, although with positive free operating cash flow (FOCF) generation. S&P assumes that the company will benefit from a slow but steady recovery in end-markets that require its line-locating services. Cost synergies from its prior acquisition of Consolidated Utility Services Inc. (CUS) have been better than S&P's original estimates. This should enable the company to achieve an EBITDA margin approaching 18% and reduce leverage (total debt to EBITDA) to 6.5x or less in 2014. The company participates in the niche $1.9 billion market for utility line-locating services in the U.S. and Canada, its targeted end-markets. In about half of the market, utilities locate and mark their own lines. The utility companies outsource the remaining business, mainly to two principal players (USIC and Dycom Industries Inc.), and S&P expects a somewhat favorable trend towards outsourcing over the foreseeable future to support secular growth prospects for USIC. S&P's rating outlook on USIC is stable. "We expect that the company will benefit from low- to mid-single-digit revenue growth in locates driven by a rebound in construction spending coupled with continued modest market share gains over the next 12 months," said Mr. Madlani. "We also expect leverage to improve to about 6.0x by the end of 2014." "We could lower our rating on USIC if it appears that free cash flow would likely remain flat or negative and if liquidity becomes constrained as a result of a higher-than-expected draw on the company's proposed revolver. Alternatively, we would consider a downgrade if leverage were to remain higher than 7.0x on a sustained basis potentially due to a combination of a lack of significant improvement in EBITDA margins and larger-than- anticipated dividend or acquisition-related outflows. This could occur as a result of weaker-than-anticipated operating performance from elevated fuel prices, weather-related disruptions (which can periodically halt or slow construction and, hence, demand for USIC's services) or aggressive bidding from competitors. In particular, EBITDA margins would need to decline to less than 15%, assuming no increase in debt levels, for this to occur," S&P noted. Alternatively, S&P would consider a one-notch upgrade if the company is able to reduce leverage to 5x with FOCF to debt sustainably approaching 8%-10%, possibly as a result of larger- than-expected revenue growth from new maintenance contracts, and continued margin improvement on higher density. For this to occur, EBITDA would need to increase more than 20% from S&P's current estimates, assuming stable debt levels. S&P views this as unlikely during the next 12 months. VICTORY ENERGY: Appoints Marcum LLP as New Accountants ------------------------------------------------------ Victory Energy Corporation appointed Marcum LLP as the Company's new independent registered public accountants for the year ended Dec. 31, 2012. During the Company's two most recently completed fiscal years and through July 9, 2013, the date of the Company's engagement of Marcum, the Company did not consult with Marcum regarding (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's financial statements, and neither a written report was provided to the Company nor oral advice was provided by Marcum that Marcum concluded was an important factor considered by the Company in reaching a decision as to accounting, auditing or financial reporting issues, or (ii) any matter that was either the subject of a disagreement. The appointment of Marcum follows the resignation on June 27, 2013, of WilsonMorgan LLP which merged with Marcum on July 1, 2013. About Victory Energy Austin, Texas-based Victory Energy Corporation is engaged in the exploration, acquisition, development and exploitation of domestic oil and gas properties. Current operations are primarily located onshore in Texas, New Mexico and Oklahoma. In the auditors' report accompanying the financial statements for year ended Dec. 31, 2011, WilsonMorgan LLP, in Irvine, California, expressed substantial doubt about Victory Energy's ability to continue as a going concern. The independent auditors noted that the Company has experienced recurring losses since inception and has an accumulated deficit. The Company reported a net loss of $3.95 million on $305,180 of revenues for 2011, compared with a net loss of $432,713 on $385,889 of revenues for 2010. The Company's balance sheet at Sept. 30, 2012, showed $1.69 million in total assets, $259,886 in total liabilities and $1.43 million in total stockholders' equity. VIVARO CORPORATION: Plan Filing Exclusivity Extended to Sept. 30 ---------------------------------------------------------------- Vivaro Corp sought and obtained an extension until Sept. 30, 2013, of the exclusive period to propose a Chapter 11 plan and disclosure statement, and until Nov. 30 of the period to solicit acceptances of that plan. In February 2013, Next Angel LLC, a joint venture between Angel Telecom (Angel), Next Communications, Inc. and Marcatel Telecommunications, LLC, acquired substantially all of the assets of Vivaro Corporation and certain of its affiliates out of Vivaro's bankruptcy. The Debtors, in close consultation with the statutory committee of unsecured creditors, have continued the task of transitioning their business to the purchaser pursuant to the terms of a transition services agreement. Now that the sale has been consummated, the Debtors are focused on the monetization of the remaining assets. There are numerous valuable assets remaining with the Debtors' estates following the asset sale (the "Remaining Assets") including half of the net proceeds of a $2.35 million note (the "Unidos Note"), accounts receivable litigation with claims totaling approximately $16.5 million (the "A/R Litigations"), and avoidance actions, including a total of $51.5 million in potentially preferential transfers made in the 90 days prior to the Petition Date and approximately $34 million in transfers made while the Debtors were insolvent (the "Avoidance Actions"). Attorneys for the Debtor can be reached at: John R. Goldman, Esq. Frederick E. Schmidt, Jr., Esq. Justin B. Singer, Esq. HERRICK, FEINSTEIN LLP 2 Park Avenue New York, NY 10016 Tel: (212) 592-1400 Fax; (212) 592-1500 E-mail: jgoldman@henick.com eschmidt@herrick.com isinger@herrick.com About Vivaro Corp. Vivaro Corp., which specializes in the sale of international calling cards in the U.S., filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 12-13810) on Sept. 5, 2012, together with six other related companies, including Kare Distribution Inc. The Debtor is represented by Frederick E. Schmidt, Esq., at Hanh V. Huynh, Esq., at Herrick, Feinstein LLP. Garden City Group Inc. is the claims and notice agent. A five-member official committee of unsecured creditors has been appointed in the case. WAVE SYSTEMS: To Present Plan to Regain Nasdaq Compliance --------------------------------------------------------- Wave Systems Corp., on July 9, 2013, received a notification from Nasdaq indicating that the Company had not regained compliance with the Bid Price Rule. The Company would have been in compliance with the Bid Price Rule if at any time prior to July 8, 2013, the bid price for the Class A Common Stock closed at $1.00 per share or above for a minimum of 10 consecutive business days. The Company received notification from the Listing Qualifications Department of The Nasdaq Stock Market on July 13, 2012, indicating that the Company's Class A common stock, par value $.01 per share, was subject to potential delisting from The Nasdaq Capital Market because for a period of 30 consecutive business days, the bid price of the Company's Class A Common Stock had closed below the minimum $1.00 per share requirement for continued inclusion under Nasdaq Marketplace Rule 5550(a)(2). In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company was provided 180 calendar days, or until Jan. 10, 2013, to regain compliance. Subsequently, on Jan. 10, 2013, the Company was provided an additional 180 calendar day compliance period, or until July 8, 2013, to demonstrate compliance. The Company intends to request a hearing before a Nasdaq Hearing Panel, will present a plan to regain compliance with the Bid Price Rule and will request that the Panel allow the Company additional time to regain compliance. The Company's Class A Common Stock will continue to be listed and registered on The Nasdaq Capital Market pending the determination of the Panel. If the Company does not regain compliance with the Bid Price Rule and otherwise meet all of the other continued listing requirements of The Nasdaq Capital Market prior to the determination of the Panel, and the Panel declines to grant the Company's request for continued listing on The Nasdaq Capital Market, trading of the Company's Class A Common Stock will be suspended and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company's securities from listing and registration on The Nasdaq Capital Market. While the Company intends to present a viable plan to regain compliance, there can be no assurance that the Panel will grant the Company's request for continued listing on the Nasdaq Capital Market, or that the Company's plans to exercise diligent efforts to maintain the listing of its Class A Common Stock on Nasdaq will be successful. If the Company's Class A Common Stock ceases to be listed for trading on the Nasdaq Capital Market, the Company expects that its Class A Common Stock would be traded on the OTC Bulletin Board. The level of trading activity of the Company's Class A Common Stock may decline if it is no longer listed on the NASDAQ Capital Market. If the Company's Class A Common Stock ceases to be listed for trading on the NASDAQ Capital Market for any reason it may harm the Company's stock price, increase the volatility of the Company's stock price and make it more difficult for holders of the Company's Class A Common Stock to sell their shares. A failure to be listed on the NASDAQ Capital Market may also make it more difficult for the Company to raise additional capital required to operate the Company's business on favorable terms, if at all. 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. WON & SUN: Case Summary & 2 Unsecured Creditors ----------------------------------------------- Debtor: Won & Sun, Inc. dba Quest Fitness 10045 Baltimore National Pike Suite A11 Ellicott City, MD 21042 Bankruptcy Case No.: 13-21505 Chapter 11 Petition Date: July 5, 2013 Court: United States Bankruptcy Court District of Maryland (Baltimore) Judge: Nancy V. Alquist Debtor's Counsel: Ronald J. Drescher, Esq. DRESCHER & ASSOCIATES 4 Reservoir Circle, Suite 107 Baltimore, MD 21208 Tel: (410)484-9000 E-mail: ecfdrescherlaw@gmail.com Estimated Assets: $500,001 to $1,000,000 Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its largest unsecured creditors, filed together with the petition, is available for free at http://bankrupt.com/misc/mdb13-21505.pdf The petition was signed by Chang S. Lee, president. WORLDWIDE ENERGY: Case Summary & 19 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Worldwide Energy & Manufacturing USA Inc 6754 West Hinsdale Avenue Littleton, CO 80128-4515 Bankruptcy Case No.: 13-21577 Chapter 11 Petition Date: July 5, 2013 Court: United States Bankruptcy Court District of Colorado (Denver) Judge: Michael E. Romero Debtor's Counsel: Lee M. Kutner, Esq. KUTNER MILLER BRINEN, P.C. 303 E. 17th Ave., Ste. 500 Denver, CO 80203 Tel: (303) 832-2400 E-mail: lmk@kutnerlaw.com Estimated Assets: not indicated Estimated Debts: $1,000,001 to $10,000,000 A copy of the Company's list of its 19 largest unsecured creditors is available for free at http://bankrupt.com/misc/cob13-21577.pdf The petition was signed by John Ballard, chairman of the board and CFO. ZALE CORP: CCB to Provide Credit Cards to Zale US Customers ----------------------------------------------------------- Two subsidiaries of Zale Corporation entered into a Private Label Credit Card Program Agreement with Comenity Capital Bank, a wholly-owned subsidiary of Alliance Data Systems Corporation. Under terms of the ADS Agreement, the private label card program will commence on Oct. 1, 2015, following expiration on Sept. 30, 2015, of a similar agreement with Citibank (South Dakota), N.A. In connection with the ADS Agreement, on July 9, 2013, Zale provided written notice of non-renewal to Citibank. Pursuant to the ADS Agreement, beginning on Oct. 1, 2015, but possibly sooner, CCB will have the exclusive right, subject to certain special program participation provisions, to provide branded credit cards to customers of Zale in the United States. Under the ADS Agreement, CCB will have the sole discretion to approve any credit application, and has agreed to use commercially reasonable efforts to meet certain performance metrics. The ADS Agreement provides for Zale to pay CCB merchant fees associated with credit sales made under the agreement. Beginning in Fiscal 2014, CCB will provide Zale with certain marketing, analytical and technical services designed to enhance revenues and will participate in the special program provisions authorized under the Citibank Agreement. In addition, Zale will receive a commencement payment of $38 million in July 2013 from CCB. The commencement payment will be amortized over the term of the ADS Agreement as a reduction of merchant fees beginning on the commencement date of the program. The ADS Agreement has an initial term through the later of the seventh anniversary of the ADS Program Commencement Date or Oct. 1, 2022, and automatically renews for successive two-year periods after the initial term in the absence of written notice by either party of non-renewal. Under the ADS Agreement, if CCB meets certain performance metrics within the first three years of the program, CCB will have a 60-day option following the end of the third year of the program to extend the initial term by an additional two years. The ADS Agreement can be terminated by either party upon certain breaches by the other party. Following any termination, the ADS Agreement entitles Zale to purchase the credit card portfolio. In the event Zale elects not to purchase the credit card portfolio, during the 24 month period following termination, Zale will be required to either comply with certain non-competition provisions or pay CCB certain monthly fees until the earlier of the end of the non-competition period or the liquidation of the portfolio. About Zale Corporation Based in Dallas, Texas, Zale Corporation (NYSE: ZLC) -- http://www.zalecorp.com/-- is a specialty retailer of diamonds and other jewelry products in North America, operating approximately 1,900 retail locations throughout the United States, Canada and Puerto Rico, as well as online. Zale Corporation's brands include Zales Jewelers, Zales Outlet, Gordon's Jewelers, Peoples Jewellers, Mappins Jewellers and Piercing Pagoda. Zale also operates online at http://www.zales.com/, http://www.zalesoutlet.com/, http://www.gordonsjewelers.com/and http://www.pagoda.com/ Zale Corp. incurred a net loss of $27.31 million for the year ended July 31, 2012, a net loss of $112.30 million for the year ended July 31, 2011, and a net loss of $93.67 million for the year ended July 31, 2010. For the nine months ended April 30, 2013, the Company reported net earnings of $17.99 million. The Company's balance sheet at April 30, 2013, showed $1.24 billion in total assets, $1.04 billion in total liabilities and $197.91 million in stockholders' investment. * Consumer Bureau to Sanction Banks Over Collection Methods ----------------------------------------------------------- Carter Dougherty, writing for Bloomberg Law, reported that banks supervised by the Consumer Financial Protection Bureau now face penalties if they mistreat consumers while collecting debts, the U.S. agency said. According to the report, the new policy, part of a crackdown on debt-collection practices the agency announced last year, will plug a gap in federal anti-harassment law that generally excluded creditors who collected debt themselves, rather than hiring third parties to do the work. "It doesn't matter who is collecting the debt -- unfair, deceptive or abusive practices are illegal," Richard Cordray, the CFPB director, said in an e-mailed statement, the report related. The Fair Debt Collection Practices Act has since 1977 protected consumers against mistreatment from companies that buy debts from the original creditors, and from third-party vendors, the report said. It doesn't usually cover companies collecting on loans they made themselves, Cordray said. JPMorgan Chase & Co., the biggest U.S. bank, said in May it expected to face enforcement action over how it pursues consumers with bad debt, the report added. The Office of the Comptroller of the Currency, the U.S. regulator for national banks, is probing U.S. lenders' debt-collection practices, and may force JPMorgan to identify borrowers that should be compensated for past abuses, the Wall Street Journal reported, citing a person familiar with the New York-based bank's conversations with regulators. * DOJ: Bernanke Does Not Need to Testify in AIG Bailout Suit ------------------------------------------------------------ Tom Schoenberg, writing for Bloomberg News, reported that U.S. Federal Reserve Chairman Ben Bernanke shouldn't be compelled to testify in Maurice "Hank" Greenberg's lawsuit over the government's bailout of American International Group Inc. (AIG), the Justice Department said. According to the report, Starr International Co., Greenberg's closely held investment firm and an AIG shareholder, hasn't shown the "extraordinary circumstances" needed to warrant the testimony because information on Bernanke's role in the 2008 bailout can be obtained from other sources, the U.S. argued in a filing in the U.S. Court of Federal Claims in Washington. "As a general rule, high-ranking government officials are not subject to depositions regarding the reasons for taking official actions," Brian Mizoguchi, a Justice Department lawyer, wrote in the filing on July 9, the report related. Starr sued the government for $25 billion in 2011, the report recalled. Greenberg called the assumption of 80 percent of the AIG's stock by the Federal Reserve Bank of New York in September 2008 a taking of property in violation of shareholders' constitutional rights to due process and equal protection of the law. The AIG board on Jan. 9 declined to join the suit, saying it was unlikely to succeed and risked harming the company's reputation after the bailout, the report further recalled. A trial has been set for Sept. 29, 2014. A related case brought by Starr against the New York Fed was dismissed in November by a judge in New York. * European Bank Resolution Plan Sets Up Fight With Germany ---------------------------------------------------------- Evan Weinberger of BankruptcyLaw360 reported that the European Commission proposed creating a single entity for winding down failed eurozone banks, setting up a clash with Germany, the most powerful country using the euro as currency. According to the report, under the single resolution mechanism proposed Wednesday, the European Central Bank would take the lead in determining when a bank within the group of countries that use the euro as their currency needs to be dismantled and then supervise the process of winding down the financial institution in conjunction with national authorities. * Foreclosure Squeeze Crimps Las Vegas Real Estate Market --------------------------------------------------------- Nick Timiraos, writing for The Wall Street Journal, reported that in a city dotted with tens of thousands of vacant houses, Jericho Guarin figured it would be easy to buy his first home. But nearly a year after beginning a search late last summer, he has come up dry. "It has been a nightmare," says the 37-year-old U.S. Air Force officer, the report cited. "There are plenty of empty houses, but they're just not for sale." Indeed, it is a lopsided equation, WSJ noted. The number of available homes has plunged here after a sweeping state law subjected lenders to stiff new foreclosure rules and penalties. With banks exercising caution, many homeowners?including those seriously delinquent on their loans?have been allowed to remain in place. As a result, there is little on the market at a time when first-time buyers and real-estate speculators are anxious to tap both cheap prices and low-interest mortgages. Many real-estate agents, home builders and consumer advocates argue that the law, intended to remedy foreclosure-processing abuses, has backfired, the report said. Some owners who are behind on payments aren't maintaining their homes as banks refrain from eviction proceedings. The perverse outcome: Inventory shortages have spurred new developments despite a glut of properties stuck in foreclosure limbo. "The people hurt most by this law are the middle class," says Steve Hawks, a real-estate agent in Henderson, Nev., the report said. He refers to the phenomenon wrought by the foreclosure measure, Assembly Bill 284, as the "A.B. 284 bubble." * Fitch: Higher Rates Could Dent Mortgage Earnings of U.S. Banks ---------------------------------------------------------------- Higher interest rates could dampen the purchase-driven market and dent the earnings of U.S. banks with a strong presence in mortgage originations, according to Fitch Ratings. The Mortgage Bankers Association Wednesday said interest rates on fixed 30-year mortgages rose to average 4.68% in the week ended July 5. That's the ninth consecutive weekly rise and the highest rate in almost two years (July 2011). "We expect mortgage volumes will continue to fall, as many borrowers have already refinanced their homes or are still unable to refinance because of depressed housing values, though Fitch would note that this is partially offset by rising home prices. Additionally, a shift in the mix of mortgage originations from refinancing toward new purchase loans could offset some volume pressure in coming quarters, especially if the housing market recovers at a somewhat faster pace," Fitch says. "For some banks, mortgage banking has accounted for as much as 20% of non-interest income and nearly 8% to 10% of net revenue. A mortgage banking decline of as much as 50% due to higher interest rates and refinancing burnout could represent a 4% revenue decline for regional banks, a significant drop that we believe would need to be offset to keep revenue at least level. Bank earnings from large mortgage players such as JP Morgan Chase, Wells Fargo and U.S. Bancorp have been boosted over the last several quarters by strong mortgage banking income due largely to the high volume of refinancings amid generationally low mortgage rates. Fitch did not expect this level of mortgage banking to persist, and with refinancings dwindling and mortgage rates moving higher Fitch believes bank earnings could be impacted over the next few quarters. Total mortgage originations are forecast to decline 26.5% in 2014 to $1.053 trillion, according to the MBA. The decrease will likely be attributable to a significant drop in refinance originations outweighing a substantial increase in purchase originations. For perspective, there were $2,430 billion in mortgage originations in 2007, according to Inside Mortgage Finance. (Lenders originated 10.4 million mortgages in 2007, down 25% from 2006.) Mortgage originations totaled $1,500 billion in 2008; $1,840 billion in 2009; $1,630 billion in 2010; $1,470 billion in 2011 and $1,905 billion in 2012, up 29.6%. The MBA is forecasting $597 billion in purchase originations and $835 billion in refinance originations in 2013. * J.P. Morgan Review Finds Errors in Debt-Collection Lawsuits ------------------------------------------------------------- Dan Fitzpatrick, writing for The Wall Street Journal, reported that as a top regulator prepares to slap J.P. Morgan Chase & Co. for mistakes that were made while collecting old debts, an internal review shows that errors occurred as the bank sued its credit-card users for the delinquent amounts. According to the report, the bank studied roughly 1,000 lawsuits and found mistakes in 9% of the cases, said people familiar with the review. "Any rate above zero is high," said one person familiar with the bank's conversations with regulators, the report cited. The errors ranged from inaccurate interest and fees applied by outside law firms to a "small number of instances" in which lawsuits listed higher balances than the amounts owed by borrowers, according to an internal document reviewed by The Wall Street Journal. In certain cases sworn documents were signed without knowledge of their accuracy, according to the document. The bank concluded the mistakes it found were "mostly small" and "had a minimal" impact on customers, according to the document. "We have no reason to doubt" that the principal amounts J.P. Morgan Chase sought to collect were accurate, the document said. * Newedge Fined for Lax Oversight of Manipulative Trades -------------------------------------------------------- Scott Patterson and Jacob Bunge, writing for The Wall Street Journal, reported that Wall Street's stock-market cops slapped a New York brokerage firm with a record fine for failing to stop computer-driven trading clients who sought to manipulate U.S. markets for nearly four years. According to the report, the Financial Industry Regulatory Authority and several stock-exchange regulators fined Newedge USA LLC $9.5 million for lax oversight of the trading firms from early 2008 to late 2011, according to a regulatory filing and documents reviewed by The Wall Street Journal. The sanctions come as regulators step up scrutiny of computer- driven trading amid worries that it is enabling market manipulation that could pose risks to the financial system and damage investor confidence, the report related. Regulators have fined several trading firms for manipulative activities over the past year, and expect to bring more such cases in the near future, according to people familiar with the matter. Newedge allowed the questionable behavior -- some of which was executed by day-trading firms -- to persist despite numerous red flags, including concerns raised by employees, an independent consultant, exchanges and regulators, the filing and documents show, the report added. Regulators said Newedge's failure to track client orders over the four-year period "caused considerable systemic risk to the marketplace," according to a settlement document reviewed by the Journal. Newedge "turned a blind eye toward a lot of red flags," said Thomas Gira, head of market regulation for Finra, in an interview, the report said. "It was really unbridled access into the marketplace that some of these customers had." * Moody's Says Interest Rate Hike Means More Risks for Insurers --------------------------------------------------------------- The recent rise in interest rates has highlighted a key risk for US property and casualty insurance companies, says Moody's Investors Service in its new special comment "P&C Insurance Interest Rate Challenges: Capital Volatility If Rates Keep Moving Up, Lackluster Returns If Rates Stay Low." The P&C insurance sector holds about $900 billion of bonds, which leaves it highly exposed to fixed income market developments, notes Moody's. "In the current environment, P&C companies face investment risk regardless of interest rate direction," said Paul Bauer, Vice President -- Senior Credit Officer and author of the report. "If rates continue moving up, which we believe is the more likely scenario; companies will face capital volatility as bond prices decline. If rates stay low, or resume their long term downward trend, earnings will be pressured by weak investment income." Moody's expects that for each 100 basis point rise in interest rates, the value of bonds held by the industry will decline by about $40 billion, or about 7% of industry capital. A sudden rate spike of 300 basis points in the next 12 to 18 months could mean unrealized losses of roughly $120 billion, or 20% of policyholder's surplus. In addition, on an individual company basis, for each 100 basis point rise in rates, Moody's expects market losses of 2% to 7% on company fixed income investment portfolios, or the equivalent of 5% to 15% of GAAP shareholders' equity. Rising interest rates combined with higher than expected claims inflation could be especially problematic for P&C insurance companies given that lower asset valuations would be accompanied by increases in loss reserve liabilities, says the rating agency. However, the risk of market value declines is moderated by strong liquidity at insurance operating companies, the industry practice of holding bonds long term, and the unlikely need to liquidate investment portfolios, notes Moody's. Moody's also said that, conversely, continued low rates would be a challenge for the P&C industry's profitability given the difficulty of generating investment income in a low yield environment. If yields were to return to the low levels seen in the first quarter of 2013 and remain there for several years, Moody's said the industry would face a decline in its total investment income of about $3 billion annually over the next five years. * Moody's Notes Rise in Global SGDL Rate in Second Quarter ---------------------------------------------------------- The trailing 12-month global speculative-grade default rate finished the second quarter of 2013 at 2.8%, up from 2.5% in the first quarter but down from 3.1% in the same period last year, Moody's Investors Service says in its latest monthly default report. The latest default rate is extremely close to Moody's year-ago prediction of 2.9%. In the US, the speculative-grade default rate edged lower, to 2.9% in the second quarter from 3.0% in the first. A year ago, the US default rate was 3.3%. In Europe, the default rate rose to 3.4% in the second quarter from 2.1% in the first, and stood at 3.6% this time last year. Based on its forecasting model, Moody's expects the global speculative-grade default rate to rise to 3.2% by the end of this year, before falling to 2.7% by the end of the second quarter next year. "Defaults remain stable, but are expected to increase slightly," notes Albert Metz, Managing Director of Moody's Credit Policy Research. "Easy liquidity has of course kept the default rate low for some time. If funding becomes tighter we would expect an increase in the incidence of default." Of the 19 defaults among Moody's-rated corporate debt issuers in the second quarter, 11 were from North America and four from Europe, with the remainder from Latin America. For the year to date, the default tally is 40, the same as that for the first half of 2012. By dollar volume, the global speculative-grade bond default rate ended the second quarter at 1.8%, up from 1.4% the prior quarter. A year ago, the comparable rate was 2.1%. In the US, the dollar-weighted speculative-grade bond default rate held steady, at 1.3%, from the first to the second quarter. In Europe, the rate more than doubled, to 3.5% from 1.6%, during the same period. At this time last year, the dollar-weighted bond default rate stood at 1.6% in the US and at 3.9% in Europe. Across industries, Moody's continues to expect default rates to be highest in the Media: Advertising, Printing & Publishing sector in the US and the Hotel, Gaming & Leisure sector in Europe 12 months down the road. Moody's distressed index, which measures the percentage of high- yield issuers whose debt is trading at distressed levels, came in at 9.1% in the second quarter compared with 8.8% in the first. At this time last year, the index was a noticeably higher 19.5%. In the leveraged loan market, a total of four Moody's-rated companies defaulted on their loans in the second quarter, with two of these in June. The US leveraged loan default rate ended the second quarter at 2.3%, down from 3.0% in the first, while a year ago it stood at 2.6%. * Regulators Say Dodd-Frank Rulemaking Nearing Finish Line ---------------------------------------------------------- Evan Weinberger of BankruptcyLaw360 reported that fresh off finalizing rules requiring banks to increase their capital levels, federal banking regulators said that they expect to wrap up the bulk of their rulemaking required under the Dodd-Frank Act by the end of the year. According to the report, in an appearance before the Senate Banking Committee to discuss the progress of Dodd-Frank rulemaking, top officials from the U.S. Department of the Treasury, the Federal Reserve, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency said that they were moving steadily toward completing the rulemaking. * Regulators Seek Stiffer Bank Rules on Capital ----------------------------------------------- Peter Eavis, writing for The New York Times' DealBook, reported that confronted with large and complex banks, financial regulators have spent years drafting rules that are just as complicated. According to the report, on July 9, though, regulators signaled that the byzantine approach was inadequate. In a significant shift, the Federal Deposit Insurance Corporation, along with the Federal Reserve and the Office of the Comptroller of the Currency, proposed stricter banking rules that aim for simplicity. The agencies' move is part of their continuing efforts to strengthen the financial system and prevent situations where taxpayer-financed bailouts might be required, the report said. The latest regulations focus squarely on capital, the financial cushion that banks have to hold to absorb potential losses, the report further related. In theory, a bank with higher levels of capital is more likely to weather shocks and less likely to need government aid in a crisis. The proposed rules would raise a crucial requirement for capital held by the largest banks. "This will increase the overall financial stability of the system," said Thomas M. Hoenig, vice chairman of the F.D.I.C., the report added. "This is an advantage to the banks over the long run, and to the economy. I am confident of that." * SEC Lifts 80-Year-Old Ban on Advertising by Hedge Funds --------------------------------------------------------- Sarah N. Lynch, writing for Reuters, reported that U.S. regulators on Wednesday lifted an 80-year-old ban on advertising by hedge funds, private equity firms and other companies, paving the way for asset managers to reach a new swath of investors through television and the Internet. According to the report, the Securities and Exchange Commission's new rule lifts a general advertising ban on private securities deals that critics said was outdated in an era where companies frequently take to Twitter and Facebook to make announcements. Although large players like private equity firms Bain Capital and Blackstone Group LP could take advantage of the chance to use television ad campaigns, lawyers and regulators said they expect smaller funds with fewer resources to test the new rule first, the report said. "The lifting of the ban on general solicitation will prove to be transformative," said Barry Silbert, the head of the online private marketplace SecondMarket, the report cited. He said his company has already developed a general solicitation product that will help issuers handle the regulatory requirements, the report added. * U.S. Banks Seen Freezing Payouts Under Harsh Leverage Rule ------------------------------------------------------------ Yalman Onaran & Jesse Hamilton, writing for Bloomberg News, reported that the biggest U.S. banks, after years of building equity, may continue hoarding profits instead of boosting dividends as they face stricter capital rules than foreign competitors. According to the report, the eight largest firms, including JPMorgan Chase & Co. and Morgan Stanley, would need to retain capital equal to at least 5 percent of assets, while their banking units would have to hold a minimum of 6 percent, U.S. regulators proposed yesterday. The international equivalent, ignoring the riskiness of assets, is 3 percent. The banks have until 2018 to fully comply. The report said the U.S. plan goes beyond rules approved by the Basel Committee on Banking Supervision to prevent a repeat of the 2008 crisis, which almost destroyed the financial system. The changes would make lenders fund more assets with capital that can absorb losses instead of using borrowed money. Bankers say this could trigger asset sales and hurt their ability to lend, hamstringing the nation's economic recovery. "The higher requirement for bank subsidiaries does have significance for the shareholders of their parent companies," said Frederick Cannon, director of research at Keefe, Bruyette & Woods Inc., the report cited. The units would have to retain earnings at least temporarily to comply, which would prevent holding companies from distributing dividends as most profit comes from those units, he said. * Without Pension Deal, Ill. Governor Withholds Lawmakers' Pay -------------------------------------------------------------- Mark Peters, writing for The Wall Street Journal, reported that Illinois Gov. Pat Quinn cut off pay to lawmakers, saying he will withhold their checks until they address the worst pension crisis among U.S. states. According to the report, the suspension of pay is the most dramatic move by Mr. Quinn to prod legislators to confront a shortfall in the pension system for government employees that is approaching $100 billion. The Democratic governor has been at odds with the House and Senate, which both have large Democratic majorities, as lawmakers ignore repeated deadlines he has set. "This is an emergency. This is a crisis," Mr. Quinn said, the report said. "Every day there is a new excuse." The suspension of pay would hit lawmakers at the end of the month when paychecks are issued, the report related. Illinois lawmakers make $67,836 annually, with those in leadership positions collecting additional stipends. Mr. Quinn suspended pay through a line-item veto, so legislators could overturn his decision. The legislature has been debating an overhaul of the state pension system for more than two years, but it hasn't sent Mr. Quinn a bill, the report further related. The House and Senate are deadlocked over competing plans that rely on cuts in employee and retiree benefits for state workers, teachers and other government employees. A bipartisan committee was set up last month to reach a compromise, with Mr. Quinn calling on its members to reach an agreement by Tuesday. * S&P Applies Revised Insurance Criteria to 22 Insurance Groups --------------------------------------------------------------- Standard & Poor's Ratings Services said that it reviewed its ratings on 22 insurance groups by applying its new ratings criteria for insurers, which were published on May 7, 2013. S&P will publish individual analytical reports on the insurance groups identified below, including a list of ratings on affiliated entities, as well as the ratings by debt type -- senior, subordinated, junior subordinated, and preferred stock. RATINGS LIST (All ratings are affirmed, except where a "from" rating is indicated.) To From Western & Southern Financial Group Inc. Counterparty Credit Rating A+/Stable/-- AA-/Negative/-- Western and Southern Life Insurance Co. Columbus Life Insurance Co. Western-Southern Life Assurance Co. Integrity Life Insurance Co. National Integrity Life Insurance Co. Counterparty Credit Rating AA/Stable/-- AA+/Negative/-- Financial Strength Rating AA/Stable/-- AA+/Negative/-- Lafayette Life Insurance Co. Financial Strength Rating AA/Stable/-- AA+/Negative/-- Ohio National Financial Services Inc. Counterparty Credit Rating A-/Stable/-- A/Negative/-- Ohio National Life Insurance Co. Ohio National Life Assurance Corp. Counterparty Credit Rating AA-/Stable/-- AA/Negative/-- Financial Strength Rating AA-/Stable/-- AA/Negative/-- OneAmerica Financial Partners Inc. Counterparty Credit Rating A-/Stable/-- American United Life Insurance Co. Counterparty Credit Rating AA-/Stable/-- Financial Strength Rating AA-/Stable/-- State Life Insurance Co. Financial Strength Rating AA-/Stable/-- Minnesota Life Insurance Co. Securian Life Insurance Co. Counterparty Credit Rating A+/Stable/-- Financial Strength Rating A+/Stable/-- Mutual of Omaha Insurance Co. Companion Life Insurance Co. (NY) United World Life Insurance Co. Counterparty Credit Rating A+/Stable/-- Financial Strength Rating A+/Stable/-- United of Omaha Life Insurance Co. Counterparty Credit Rating A+/Stable/A-1+ Financial Strength Rating A+/Stable/A-1+ Midland National Life Insurance Co. North American Co. for Life & Health Insurance Counterparty Credit Rating A+/Stable/-- Financial Strength Rating A+/Stable/-- Independence Life & Annuity Co. Counterparty Credit Rating BBB+/Stable/-- Financial Strength Rating BBB+/Stable/-- Sun Life Assurance Co. of Canada (U.S.) Sun Life Insurance & Annuity Co. of New York Counterparty Credit Rating BBB/Developing/-- Financial Strength Rating BBB/Developing/-- Acacia Life Insurance Co. Ameritas Life Insurance Corp. Ameritas Life Insurance Corp of New York Union Central Life Insurance Co. Counterparty Credit Rating A+/Stable/-- Financial Strength Rating A+/Stable/-- Industrial Alliance Insurance and Financial Services Inc. Counterparty Credit Rating A+/Stable/-- Financial Strength Rating A+/Stable/-- Old Republic International Corp. Counterparty Credit Rating BBB+/Negative/-- Bituminous Casualty Corp. Bituminous Fire & Marine Insurance Co. Great West Casualty Co. Old Republic General Insurance Corp. Old Republic Insurance Co. Old Republic Lloyds of Texas Old Republic Surety Co. Old Republic Union Insurance Co. Counterparty Credit Rating A+/Stable/-- Financial Strength Rating A+/Stable/-- To From Selective Insurance Group Inc. Counterparty Credit Rating BBB-/Stable/-- BBB/Negative/-- Selective Insurance Co. of America Selective Insurance Co. of NY Selective Insurance Co. of South Carolina Selective Insurance Co. of the Southeast Selective Way Insurance Co. Counterparty Credit Rating A-/Stable/-- A/Negative/-- Financial Strength Rating A-/Stable/-- A/Negative/-- HealthPartners Inc. Group Health Plan Inc. Counterparty Credit Rating A-/Stable/-- Financial Strength Rating A-/Stable/-- Excellus Health Plan Inc. Counterparty Credit Rating A-/Stable/-- Financial Strength Rating A-/Stable/-- MedAmerica Insurance Co. MedAmerica Insurance Co. of Florida MedAmerica Insurance Co. of New York Financial Strength Rating A-/Stable/-- Triple-S Salud Inc. Counterparty Credit Rating BBB+/Stable/-- Financial Strength Rating BBB+/Stable/-- Group Health Cooperative Group Health Options Inc. Counterparty Credit Rating BB+/Negative/-- Financial Strength Rating BB+/Negative/-- Blue Cross & Blue Shield of Rhode Island Inc. Counterparty Credit Rating BBB-/Stable/-- Financial Strength Rating BBB-/Stable/-- RLI Corp. Counterparty Credit Rating BBB+/Stable/-- Mt. Hawley Insurance Co. RLI Insurance Co. Counterparty Credit Rating A+/Stable/-- Financial Strength Rating A+/Stable/-- W.R. Berkley Corp. Counterparty Credit Rating BBB+/Stable/-- Berkley Insurance Co. Gemini Insurance Co. Key Risk Insurance Co. Midwest Employers Casualty Co. Preferred Employers Insurance Co. Riverport Insurance Co. StarNet Insurance Co. Berkley Regional Specialty Ins Co. Berkley Regional Insurance Co. Union Standard Lloyds W.R. Berkley Insurance (Europe) Ltd. Acadia Insurance Co. Berkley National Insurance Co. Continental Western Insurance Co. Firemen's Insurance Co. of Washington DC Tri State Insurance Co. of MN Union Insurance Co. Admiral Indemnity Co. Admiral Insurance Co. Clermont Ins Co. Carolina Casualty Insurance Co. Great Divide Insurance Co. Nautilus Insurance Co. Counterparty Credit Rating A+/Stable/-- Financial Strength Rating A+/Stable/-- ACUITY a Mutual Insurance Co. Counterparty Credit Rating A+/Stable/-- Financial Strength Rating A+/Stable/-- To From Ironshore Inc. Ironshore Holdings (U.S.) Inc. Counterparty Credit Rating BBB-/Positive/-- BBB- /Stable/-- White Mountains Insurance Group Ltd. Counterparty Credit Rating BBB/Stable/-- OneBeacon Insurance Group Ltd. OneBeacon U.S. Holdings Inc. Counterparty Credit Rating BBB-/Stable/-- Atlantic Specialty Insurance Co. Homeland Insurance Co. of New York Counterparty Credit Rating A-/Stable/-- Financial Strength Rating A-/Stable/-- Sirius International Group Ltd. Counterparty Credit Rating BBB/Stable/-- Sirius International Insurance Corp. Sirius America Insurance Co. Counterparty Credit Rating A-/Stable/-- Financial Strength Rating A-/Stable/-- To From Navigators Group Inc. Counterparty Credit Rating BBB/Stable/-- BBB/Negative/-- Navigators Insurance Co. Navigators Specialty Insurance Co. Counterparty Credit Rating A/Stable/-- A/Negative/-- Financial Strength Rating A/Stable/-- A/Negative/-- * Consumer Wins $1,600 Judgment While Lawyer Gets $78,000 in Fees ----------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that when a consumer in California wins a judgment against a retailer for employing deceptive or fraudulent practices in violation of state law, the consumer is entitled to have his or her attorneys' fees paid if the retailer files bankruptcy. According to the report, after a used auto dealership went out of business, the proprietor filed bankruptcy. A consumer filed suit in bankruptcy court alleging the proprietor violated California consumer protection laws. The consumer won. The bankruptcy judge awarded the consumer $1,600 in actual damages and $78,000 in attorneys' fees, along with a determination that the debt wasn't discharged and would survive bankruptcy. The report discloses that the auto dealer appealed, contending the attorneys' fees awarded under California law were disproportionate to actual damages. The Bankruptcy Appellate Panel for the Ninth Circuit rejected the argument in an opinion on July 8. California consumer protection law calls for awarding attorneys' fees to a consumer who sues successfully. The panel said state law contains no "requirement that the fees be proportional." The case is Galindo v. Whited (In re Galindo), 12-1272, 9th U.S. Circuit Bankruptcy Appellate Panel (San Francisco). * Former Judge Raymond T. Lyons Joins Fox Rothschild's NJ Office ---------------------------------------------------------------- Fox Rothschild LLP is honored to welcome retired U.S. Bankruptcy Judge for the District of New Jersey Raymond T. Lyons, who joins the firm as counsel in the Princeton office effective July 1. "Judge Lyons is recognized and renowned for his significant and breakthrough mediation work in bankruptcy cases. His steadfast dedication to helping effect amicable resolutions in highly complex cases is lauded by both the business community and the bankruptcy bar," said Douglas J. Zeltt, managing partner of the firm's Princeton office. "We are truly honored to have him join our team and provide his strategic insight in bankruptcy mediation to the benefit of Fox clients." With more than a decade of judicial service, Lyons is highly regarded for his mediation services in bankruptcy and financial restructuring cases before the U.S. Bankruptcy Court in the District of Delaware. At Fox, Lyons will devote his efforts to assisting clients in mediation and alternative dispute resolution. Among his most well-known and significant mediations is the Chapter 11 case filed by bank holding company Washington Mutual, Inc. following the largest bank failure in history. The mediation, which was covered by major news outlets across the country, led to a bankruptcy exit plan valued at $7 billion and spawned mediation with additional groups of claimants. Lyons was lauded in the official court transcript for his dedication and commitment to effecting an agreeable resolution to the benefit of all parties involved in the matter. Prior to his appointment to the bench in 1999, Lyons spearheaded the bankruptcy department of a major New Jersey law firm, primarily representing secured lenders and other creditors in corporate Chapter 11 cases. During the economic downturn and banking crisis of the late 1980s and early 1990s, he represented the Resolution Trust Corporation and the Federal Deposit Insurance Corporation (FDIC) in bankruptcy matters and commercial litigation. An active participant in bar activities, Lyons is former chair of the New Jersey State Bar Association Pro Bono Services Committee. In 1999, he received the New Jersey State Bar Association's Legislative Services Award for his work in spearheading the passage of a law providing counsel to indigent children and parents in guardianship and parental rights proceedings. In 1997, he was recognized by Legal Services of New Jersey with the Equal Justice Award for his role as chair of the NJSBA Bankruptcy Law Section's Pro Bono Bankruptcy Committee. Lyons was also an adjunct professor at his alma mater, Seton Hall University School of Law, for a significant period of time, teaching courses on banking law and legal writing. Lyons received his LL.M. in Taxation from New York University School of Law in 1981, his J.D. from Seton Hall University School of Law in 1973 and his B.A. in Mathematics from Lehigh University in 1970. Mr. Lyons may be reached at: Raymond T. Lyons, Esq. FOX ROTHSCHILD LLP Princeton Pike Corporate Center 997 Lenox Drive, Building 3 Lawrenceville, NJ 08648-2311 Tel: (609) 844-3031 E-mail: rlyons@foxrothschild.com * Paul J. Schoff Joins Eckert Seamans' Philadelphia Office ---------------------------------------------------------- Paul J. Schoff has joined the Philadelphia, Pennsylvania office of Eckert Seamans Cherin & Mellott, LLC as a Member in the Bankruptcy, Business Counseling, Environmental, Real Estate, Corporate and Financial Transaction Groups. Prior to joining the firm, Schoff was the founding member of his own firm. Paul also previously served as a Law Clerk to Pennsylvania Commonwealth Court Judge Madaline Palladino. Schoff has successfully negotiated the first Consent Order and Agreement for a Special Industrial Area under Pennsylvania's Brownfield Law (also known as "Act 2") and represented the Unsecured Creditors' Committee in Molded Acoustical Products, Inc., Chapter 11 case which established "course of performance" defense in Third Circuit. Schoff concentrates his practice in the areas of debtor-creditor relationships, real estate, environmental, asset protection planning and business counseling. Schoff earned his J.D. from the University Of Pittsburgh School Of Law, where he was the Notes and Comments Editor for their Journal Law Review, and he earned his B.S. from Carnegie Mellon University. Mr. Schoff may be reached at: Paul J. Schoff, Esq. ECKERT SEAMANS CHERIN & MELLOTT, LLC Two Liberty Place 50 South 16th Street, 22nd Floor Philadelphia, PA 19102 Tel: (215) 851-8506 Fax: (215) 851-8383 E-mail: pschoff@eckertseamans.com For more information contact: Allysn G. Hurley Director of Marketing E-mail: ahurley@eckertseamans.com * BOND PRICING -- For Week From July 8 to 12, 2013 -------------------------------------------------- Issuer Name Ticker Coupon Bid Price Maturity Date ----------- ------ ------ --------- ------------- AES Eastern Energy LP AES 9.000 1.750 1/2/2017 AES Eastern Energy LP AES 9.670 4.125 1/2/2029 AGY Holding Corp AGYH 11.000 53.000 11/15/2014 ATP Oil & Gas Corp ATPG 11.875 1.270 5/1/2015 ATP Oil & Gas Corp ATPG 11.875 1.000 5/1/2015 ATP Oil & Gas Corp ATPG 11.875 1.000 5/1/2015 Affinion Group Holdings Inc AFFINI 11.625 46.928 11/15/2015 Alion Science & Technology Corp ALISCI 10.250 61.805 2/1/2015 Alliance One International Inc AOI 10.000 101.000 7/15/2016 Ally Financial Inc ALLY 6.250 99.586 7/15/2013 Ambac Financial Group Inc/Old ABK 6.150 15.200 2/7/2087 Best Buy Co Inc BBY 7.250 99.250 7/15/2013 Buffalo Thunder Development Authority BUFLO 9.375 31.875 12/15/2014 Cengage Learning Acquisitions Inc TLACQ 10.500 20.750 1/15/2015 Cengage Learning Acquisitions Inc TLACQ 12.000 16.250 6/30/2019 Cengage Learning Acquisitions Inc TLACQ 10.500 20.750 1/15/2015 Champion Enterprises Inc CHB 2.750 0.375 11/1/2037 Dole Food Co Inc DOLE 8.750 99.681 7/15/2013 Dynegy Roseton LLC / Dynegy Danskammer LLC Pass Through Trust Series B DYN 7.670 4.500 11/8/2016 EI du Pont de Nemours & Co DD 5.000 100.671 7/15/2013 Eastman Kodak Co EK 7.000 9.250 4/1/2017 Eastman Kodak Co EK 9.200 8.663 6/1/2021 Eastman Kodak Co EK 9.950 8.715 7/1/2018 Energy Conversion Devices Inc ENER 3.000 7.875 6/15/2013 FairPoint Communications Inc/Old FRP 13.125 1.000 4/2/2018 FiberTower Corp FTWR 9.000 8.750 1/1/2016 GMX Resources Inc GMXR 9.000 13.000 3/2/2018 GMX Resources Inc GMXR 4.500 6.063 5/1/2015 Gasco Energy Inc GSXN 5.500 17.000 10/5/2015 Geokinetics Holdings USA Inc GEOK 9.750 51.750 12/15/2014 HP Enterprise Services LLC HPQ 3.875 94.525 7/15/2023 James River Coal Co JRCC 4.500 39.500 12/1/2015 LBI Media Inc LBIMED 8.500 30.000 8/1/2017 Lehman Brothers Holdings Inc LEH 1.000 21.000 3/29/2014 Lehman Brothers Holdings Inc LEH 1.250 21.000 2/6/2014 Lehman Brothers Holdings Inc LEH 1.000 21.000 8/17/2014 Lehman Brothers Holdings Inc LEH 0.250 21.000 12/12/2013 Lehman Brothers Holdings Inc LEH 0.250 21.000 1/26/2014 Lehman Brothers Holdings Inc LEH 1.000 21.000 8/17/2014 Motors Liquidation Co MTLQQ 6.750 0.375 5/1/2028 OnCure Holdings Inc ONCJ 11.750 44.500 5/15/2017 PMI Group Inc/The PMI 6.000 26.000 9/15/2016 Penson Worldwide Inc PNSN 12.500 24.250 5/15/2017 Penson Worldwide Inc PNSN 8.000 8.750 6/1/2014 Penson Worldwide Inc PNSN 12.500 24.250 5/15/2017 Platinum Energy Solutions Inc PLATEN 14.250 57.850 3/1/2015 Powerwave Technologies Inc PWAV 1.875 1.125 11/15/2024 Powerwave Technologies Inc PWAV 1.875 1.125 11/15/2024 RadioShack Corp RSH 2.500 94.030 8/1/2013 Residential Capital LLC RESCAP 6.875 30.500 6/30/2015 Savient Pharmaceuticals Inc SVNT 4.750 15.000 2/1/2018 School Specialty Inc SCHS 3.750 40.000 11/30/2026 Springleaf Finance Corp AMGFIN 6.750 99.600 7/15/2013 THQ Inc THQI 5.000 50.500 8/15/2014 TMST Inc THMR 8.000 9.500 5/15/2013 Terrestar Networks Inc TSTR 6.500 10.000 6/15/2014 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15.000 26.000 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 6.000 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 11.200 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.500 12.500 11/1/2016 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 15.000 24.250 4/1/2021 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.250 9.000 11/1/2015 Texas Competitive Electric Holdings Co LLC / TCEH Finance Inc TXU 10.500 8.375 11/1/2016 USEC Inc USU 3.000 23.755 10/1/2014 United States Treasury Inflation Indexed Bonds - When Issued WITII 0.500 81.487 7/15/2023 Verso Paper Holdings LLC / Verso Paper Inc VRS 11.375 51.728 8/1/2016 WCI Communities Inc/Old WCI 4.000 0.375 8/5/2023 Western Express Inc WSTEXP 12.500 66.250 4/15/2015 Western Express Inc WSTEXP 12.500 66.250 4/15/2015 Windstream Corp WIN 8.125 98.000 8/1/2013 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers" public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com/ On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors" Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Ronald C. Sy, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2013. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000 or Nina Novak at 202-241-8200. *** End of Transmission ***