/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/130718.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, July 18, 2013, Vol. 17, No. 197 Headlines 710 LONG RIDGE: Nursing Homes Win New Union Concessions 845 N SAN VICENTE: Petitioning Creditors Balk at Motion to Dismiss 845 N SAN VICENTE: N.C. Dylan Substitutes James Bryce as Counsel AGFEED INDUSTRIES: To Sell Majority of Businesses for $79-Mil. AGFEED USA: Meeting to Form Creditors' Panel on July 23 AGFEED USA: Voluntary Chapter 11 Case Summary ALLIANT HOLDINGS: S&P Affirms 'B-' Counterparty Credit Rating AMERICAN AIRLINES: Wants to Set Ceiling for Disputed Claims AMERICAN AIRLINES: Wins Approval of Deal With San Francisco AMERICAN AIRLINES: Has Green Light to Sell Condo Units in Miami AMERICAN AIRLINES: Nashville Airport Settlement Approved AMERICAN AIRLINES: Proposes Sale, Leaseback of 6 Boeing Planes AMERICAN COMMERCE: Incurs $48,000 Net Loss in First Quarter AMERICAN REALTY: Case Conversion Hearing Continued Until Aug. 22 AMERISTAR CASINOS: S&P Affirms 'BB-' CCR; Outlook Stable ARCHDIOCESE OF MILWAUKEE: Few Sex Abuse Victims Get Large Sums ARCHDIOCESE OF MILWAUKEE: Wins Approval to Extend Debt Maturity ARCHDIOCESE OF MILWAUKEE: Creditors Panel Balks at Bid for FCR ATP OIL: To Sell Hydrocarbon Production Payment for $15 Mil. ATP OIL: Gets Interim Approval to Sell Deepwater Assets ATP OIL: Obtains Interim Order Authorizing Use of Cash Collateral BAKERSFIELD GROVE: Dismissal Hearing Set for Aug. 15 BCBG MAX: S&P Lowers Corp. Credit Rating 'CCC-'; Outlook Negative BEAR STEARNS: Can Pursue Claim vs. Insurers, Says NY High Court BEAR STEARNS: Settles Homebanc Adversary Lawsuit for $3MM BEAR STEARNS: JPMorgan Wins Round in Dexia SA's Suit BELLE FOODS: Section 341(a) Meeting Set for Aug. 13 BELLE FOODS: Has Interim Access to Lenders' Cash Until July 22 BERGENFIELD SENIOR: Hearing on Bid Procedures on July 29 BERNARD L MADOFF: 2nd Circ. Won't Revive Feeder Fund Suit BLUE SPRINGS: Still Awaiting Exit Loans; Plan Date Moved Again BLYTH INC: S&P Withdraws 'B+' Corp. Credit & Sr. Unsec. Ratings CAPITOL BANCORP: Bidding Procedures for Sale of Units' Stock OK'd CAROLINA BEER: S&P Assigns 'B-' Rating to $120MM Sr. Secured Notes CAROLINA BEVERAGE: Moody's Assigns 'B3' CFR; Outlook Stable CASH STORE: Faces Class Action in Quebec Over Internal Controls CHASSIX INC: Moody's Assigns 'B3' CFR, Stable Outlook COOPER-BOOTH: Can Employ Barney Snyder as Special Counsel COOPER-BOOTH: Panel Retains Klehr Harrison as Counsel CORELOGIC INC: Moody's Rates New $1.15-Billion Debt 'Ba1' DETROIT, MI: Willing to Lift Restraining Order in Syncora Suit DETROIT, MI: Creditors Get New Worry in Alabama Fee Ruling DETROIT, MI: Pension Funds File Lawsuit to Block Bankruptcy EAGLE RECYCLING: Cohnreznick LLP Approved as Financial Advisors EAGLE RECYCLING: Saiber LLC Approved as Bankruptcy Counsel EAGLE RECYCLING: Scarinci Hollenbeck Okayed as Regulatory Counsel EASTMAN KODAK: Gets Moody's B3 CFR After Emerging From Bankruptcy EDISON MISSION: Tyche Dispute to Stay in Bankruptcy ENDICOTT INTERCONNECT: Arranging Sale to Minority Shareholder EVERGREEN OIL: Schedules Aug. 14 Confirmation Hearing EVERGREEN OIL: U.S. Trustee Adds Robinson Oil to Committee EXCEL MARITIME: Plan Disclosure Hearing Set for Sept. 30 FERRAIOLO CONSTRUCTION: Committee Objects to Disclosure Statement FERRAIOLO CONSTRUCTION: Hiring Hichar & Luca as Accountants FIRST STREET: Court Okays Compromise with Lenders, Choo FRANKLIN PIERCE: S&P Lowers Rating on Debt to 'B'; Outlook Stable GETTY PETROLEUM: Enters Into Settlement Agreement with Lukoil GGW BRANDS: Trustee Deal Reduces Wynn's $31MM Claims GIM CHANNELVIEW: S&P Assigns 'BB-' Rating to $375-Mil. Loan GMX RESOURCES: Creditors Raise Make-Whole Question With Twist GRAND CHINA SHIPPING: 2nd Cir. Vacates Ruling in Blue Whale Rift GREAT PLAINS EXPLORATION: Creditor Wants Case Converted to Ch. 7 GREAT PLAINS EXPLORATION: Settles DEO's Plan Disclosures Objection GROVES IN LINCOLN: Creditors Voting on 63% Liquidating Plan GULF STATE STEEL: 11th Circ. Upholds Nucor Win in Antitrust Suit HARBOR FREIGHT: S&P Rates New $1 Billion Secured Loan 'B+' HARBOR FREIGHT: Moody's Assigns B1 Rating to $1-Bil. Term Loan JACKSONVILLE BANCORP: Second Amendment to 10MM Shares Prospectus JB MILWAUKEE: Voluntary Chapter 11 Case Summary JEFFERSON COUNTY: Selects Citigroup to Underwrite New Sewer Bonds K-V PHARMACEUTICAL: Gets Judge's Nod to Collect Ch. 11 Plan Votes LEAP WIRELESS: Moody's Mulls Ratings Upgrade Following AT&T Deal LEAP WIRELESS: S&P Puts 'B-' CCR on Creditwatch Positive LEHMAN BROTHERS: Parent Still Disputes With LBI on Bankhaus Deal LEHMAN BROTHERS: SIPA Trustee Defends LB Bankhaus Deal LEHMAN BROTHERS: RFWSD Ink Deal to Assume Pre-Inclusion Agreements LEHMAN BROTHERS: Liberty Funds Reach Deal to Amend Claims LEHMAN BROTHERS: Says Contract Allows for $6.5BB Archstone Sale MEDIMPACT HOLDINGS: Moody's Hikes CFR to B3 After Acquisitions MEDIMPACT HOLDINGS: S&P Assigns 'B-' CCR; Outlook Stable MERCANTILE BANCORP: Sec. 341(a) Creditors' Meeting Set for Aug. 6 MERCANTILE BANCORP: Seeks Extension of Deadline to File Schedules METRO ENTERPRISES: Case Summary & 4 Unsecured Creditors MIDCONTINENT COMM.: S&P Assigns 'BB-' Rating to $475MM Facility MIDTOWN SCOUTS: U.S. Trustee Unable to Form Committee MIDTOWN SCOUTS: Has Final Approval for DIP Funding MONITOR COMPANY: Seeks Conversion to Chapter 7 MONITOR COMPANY: Seeks Conversion to Chapter 7 MSR RESORT: Slams Five Mile's Objection to $2MM DIP Loan MUSCLEPHARM CORP: Amends 1.7 Million Shares Resale Prospectus NATIONAL HOLDINGS: Registers 24 Million Common Shares NEXT 1 INTERACTIVE: Delays Form 10-Q for May 31 Quarter NNN PARKWAY: WBCMT 2007-C31 Seeks to Dismiss Case NOVA CHEMICALS: Fitch Rates Proposed $500MM Notes 'BB+' NOVA CHEMICALS: $500MM Sr. Notes Issue Gets Moody's Ba2 Rating NOVA CHEMICALS: S&P Assigns 'BB+' Rating to $500MM 10-Yr. Notes OCALA FUNDING: Liquidation Plan Declared Effective OCD LLC: Wants Plan Filing Period Extended Until Nov. 7 OCEAN 4660: Court Permits DOJ Watchdog to Appoint Ch. 11 Trustee ONCURE HOLDINGS: Hearing on Bid Procedures Motion Set for July 24 ORCHARD SUPPLY: Judge Approves Loan Over Creditor Opposition PETROGLOBE INC: ATB Demands Repayment of Outstanding Indebtedness PINETREE CAPITAL: Has Until Sept. 13 to Obtain Default Waiver PINNACLE ENTERTAINMENT: Fitch to Rate New $2.6BB Secured Debt BB+ PINNACLE ENTERTAINMENT: Moody's Rates $1-Bil. Revolver 'Ba2' PINNACLE ENTERTAINMENT: S&P Assigns BB+ Rating to $2.6BB Facility REFCO INC: Sues Cantor Over $8MM Stake in Drained Tech Assets RESIDENTIAL CAPITAL: Outline & Summary of Chapter 11 Plan RESIDENTIAL CAPITAL: To Seek Approval of Plan Outline in August RESIDENTIAL CAPITAL: Wants Removal Period Extended to Oct. 31 RESIDENTIAL CAPITAL: Redwood Wants GMACM to Give Up Docs RESIDENTIAL CAPITAL: FHFA Suit Sent Back to District Court ROTECH HEALTHCARE: Plan Confirmation Hearing Set for Aug. 20 SAAB AUTOMOBILE: Judge Approves Liquidation Plan for U.S. Arm SANMINA CORP: Fitch Raises Issuer Default Rating to 'BB-' SAPPHIRE POWER: S&P Assigns 'B+' Rating to $280MM Sr. Facilities SHILO INN: Disclosure Statement Hearing to Be Held on March 20 SIMON WORLDWIDE: Amends Registration Agreement with Overseas Toys SMART ONLINE: Issues $230,000 Additional Convertible Note SUPERIOR PLUS: DBRS Confirms 'BB' Issuer Rating TALLGRASS ENERGY: Obtains Creditor Protection Under CCAA TELKONET INC: Stockholders Approve Executive Compensation TEMPLE UNIVERSITY: Moody's Cuts Ratings to Ba2, Outlook Negative THQ INC: Gets Ch. 11 Plan Confirmed And $4MM Tattoo Claim Pared TLO LLC: Risk-Mitigation Provider Nails $2 Million Loan TOMMY THOMPSON: Receiver Wants Bankruptcy Case Tossed UC HOLDINGS: S&P Assigns 'B' Rating to $325MM Senior Secured Notes USA BROADMOOR: Wins Okay to Access Wells Fargo Cash Collateral USA BROADMOOR: Gets Final OK to Employ Stichter Riedel as Counsel VIVARO CORP: Hires Gabriel Del Virginia to Pursue Avoidance Suits VOICES OF FAITH: Agreed to Restructure FCR Debt, Case Dismissed VPR OPERATING: Gets Final Approval to Use Cash Collateral VPR OPERATING: Committee Can Retain Brown McCarroll as Counsel VPR OPERATING: Denies Hiring of Global Hunter as Financial Advisor VPR OPERATING: Patterson Approved as Restructuring Officer WASHINGTON MUTUAL: Court Narrows Suit v. Ex-Retail Banking Head WATERSTONE AT PANAMA: Lenox Mortgage Seeks to Dismiss Case * Butner Attack on Eighth Circuit's Benn Is Rebuffed * Appeals Court Judge Disallows Stripping Off Lien in Chapter 7 * Citigroup's Toxic Asset Unit Costs Jump to $1.25 Billion * National Credit Default Rates Hit Post-Recession Low in June * NY Judge to Rule if WTC Developer Can Seek Damages from Airlines * Fitch: Commodity Price Dips Pose Risk for Mining, Metals and E&P * Fitch Says U.S. State Pension Funded Ratios Continue to Decline * 9th Cir. Appoints Laurel E. Davis as D. Nev. Bankruptcy Judge * Recent Small-Dollar & Individual Chapter 11 Filings ********* 710 LONG RIDGE: Nursing Homes Win New Union Concessions ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that five Connecticut nursing homes managed by HealthBridge Management LLC have a three-month extension of interim modifications granted by the bankruptcy court allowing changes in union wages and benefits. According to the report, U.S. Bankruptcy Judge Donald Steckroth in Newark, New Jersey, allowed HealthBridge to cut wages and benefits temporarily after the Chapter 11 filing in February. In a 12-page opinion on July 15, Judge Steckroth said there's "no doubt" he has the right to extend the temporary wage concessions a third time, until Oct. 11. Judge Steckroth said another three months of concessions aggregating $1.57 million are "essential" to the continued operation of the business. Were wages to snap back to prebankruptcy levels, there would be a default in the loan agreement and liquidation of the business. The report notes that the creditors' committee supported continuation of involuntary union contract concessions. The union and the National Labor Relations Board were opposed, although neither offered witness in opposition to what Judge Steckroth called "unimpeached testimony" from the company about continuing need for concessions. The union argued that the business improved and there was no longer a need for concessions. The report relates that Judge Steckroth said the company can use the next three months to negotiate with the union and formulate a reorganization plan. HealthBridge said union contracts were causing unsustainable losses of $1.3 million a month. About 710 Long Ridge 710 Long Ridge Road Operating Company II, LLC and four affiliates own sub-acute and long-term nursing care facilities for the elderly in Connecticut. The facilities, which are managed by HealthBridge Management LLC, are Long Ridge of Stamford, Newington Health Care Center, Westport Health Care Center, West River Health Care Center, and Danbury Health Care Center. 710 Long Ridge and its affiliates sought Chapter 11 protection (Bankr. D.N.J. Case Nos. 13-13653 to 13-13657) on Feb. 24, 2013 to modify their collective bargaining agreements with the New England Health Care Employees Union, District 1199, SEIU. The Debtors owe $18.9 million to M&T Bank and $7.99 million on loans from the U.S. Department of Housing and Urban Development Federal Housing Administration. Michael D. Sirota, Esq., at Cole, Schotz, Meisel, Forman & Leonard, serve as counsel to the Debtors. Logan & Company, Inc. is the claims and notice agent. Alvarez & Marsal Healthcare Industry Group, LLC, is the financial advisor. Porzio, Bromberg & Newman, P.C., represents the Official Committee of Unsecured Creditors. The Committee tapped to retain EisnerAmper LLP as accountant. 845 N SAN VICENTE: Petitioning Creditors Balk at Motion to Dismiss ------------------------------------------------------------------ Petitioning creditors, through Gail Higgins, Esq., at Higgins Law Firm, objects to 845 San Vicente Boulevard LLC's motion to dismiss the involuntary case. Ms. Higgins asserts that: 1. Paula Schneider, the alleged representative, is not a legitimate member of the LLC and thus has no standing to be filing the motion; 2. the Debtor representative has not established cause to dismiss the case; and 3. dismissal or conversion is not in the best interests of creditors. Three alleged creditors of 845 N. San Vicente Blvd, LLC, filed an involuntary Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-18771) for 845 N. San Vicente on April 3, 2013. The petitioners are Tom Loisch, with a claim of $42,000; John B. Dunning, owed $42,000; and Christopher Williams, owed $35,000. The Chapter 11 case has been reassigned to Bankruptcy Judge Richard M. Neiter for all further proceedings. Judge Peter Carroll was originally assigned to the case. 845 N SAN VICENTE: N.C. Dylan Substitutes James Bryce as Counsel ---------------------------------------------------------------- 845 San Vicente Boulevard, LLC, notified the U.S. Bankruptcy Court for the Central District of California that N.C. Dylan Willoughby, Esq., Esq., at Antoni Albus LLP, substitutes James Bryce Clark, Esq., at O'Connor Cochran LLP as counsel. Three alleged creditors of 845 N. San Vicente Blvd, LLC, filed an involuntary Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-18771) for 845 N. San Vicente on April 3, 2013. The petitioners are Tom Loisch, with a claim of $42,000; John B. Dunning, owed $42,000; and Christopher Williams, owed $35,000. The Chapter 11 case has been reassigned to Bankruptcy Judge Richard M. Neiter for all further proceedings. Judge Peter Carroll was originally assigned to the case. AGFEED INDUSTRIES: To Sell Majority of Businesses for $79-Mil. -------------------------------------------------------------- AgFeed Industries, Inc., and its affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-11761) on July 15, 2013. Also on that date, the Company had entered into an asset purchase agreement whereby the Company will sell most of its subsidiaries to The Maschhoffs, LLC, for cash proceeds of $79 million. The Company's operations in Oklahoma is not included in the sale. The transaction will be subject to Bankruptcy Court approval. The Company is continuing to actively pursue competing offers for the sale of its businesses, including the Company's Chinese subsidiaries and assets as well as the remaining assets, primarily comprised of sow farm operations in Oklahoma. In the event the Agreement is terminated for specified reasons, including if the Company accepts a higher or better offer from a competing bidder in the auction, the Company will be required to pay the Maschhoffs a break-up fee in an amount equal to $2,370,000 and reimburse the Maschhoffs for its reasonable and documented actual out-of-pocket expenses up to $790,000. Business Development Asia LLC and BDA Advisors Inc. serve as the Company's financial advisors. Prior to the bankruptcy filing, the Company entered into Key Executive Employment and Incentive Agreements with its interim chief financial officer and chief accounting officer. The Key Employee Agreements provide that the executive officers will receive payment upon consummation of a sale transaction. A copy of the Sale Agreement is available for free at: http://is.gd/f1Xvk9 About Agfeed Industries NASDAQ Global Market Listed AgFeed Industries is an international agribusiness with operations in the U.S. and China. AgFeed has two business lines: animal nutrition in premix, concentrates and complete feeds and hog production. In the U.S., AgFeed's hog production unit, M2P2, is a market leader in setting new standards for production efficiency and productivity. AgFeed believes the transfer of these processes, procedures and techniques will allow its new Western-style Chinese hog production units to set new standards for production in China. China is the world's largest pork market consuming 50 percent of global production and over 62 percent of total protein consumed in China is pork. Hog production in China currently enjoys income tax free status. AGFEED USA: Meeting to Form Creditors' Panel on July 23 ------------------------------------------------------- Roberta A. DeAngelis, United States Trustee for Region 3, will hold an organizational meeting on July 23, 2013 at 10:00 a.m. in the bankruptcy case of AgFeed USA, LLC, et al. The meeting will be held at: J. Caleb Boggs Federal Building 844 King Street, Room 5209 Wilmington DE 19801 The sole purpose of the meeting will be to form a committee or committees of unsecured creditors in the Debtors' case. The organizational meeting is not the meeting of creditors pursuant to Section 341 of the Bankruptcy Code. A representative of the Debtor, however, may attend the Organizational Meeting, and provide background information regarding the bankruptcy cases. To increase participation in the Chapter 11 proceeding, Section 1102 of the Bankruptcy Code requires that the United States Trustee appoint a committee of unsecured creditors as soon as practicable. The Committee ordinarily consists of the persons, willing to serve, that hold the seven largest unsecured claims against the debtor of the kinds represented on the committee. Section 1103 of the Bankruptcy Code provides that the Committee may consult with the debtor, investigate the debtor and its business operations and participate in the formulation of a plan of reorganization. The Committee may also perform other services as are in the interests of the unsecured creditors whom it represents. About Agfeed Industries AgFeed Industries, formerly known as M2 P2, LLC, is an international agribusiness with operations in the U.S. and China. AgFeed has two business lines: animal nutrition in premix, concentrates and complete feeds and hog production. In the U.S., AgFeed's hog production unit, M2P2, is a market leader in setting new standards for production efficiency and productivity. AgFeed believes the transfer of these processes, procedures and techniques will allow its new Western-style Chinese hog production units to set new standards for production in China. China is the world's largest pork market consuming 50% of global production and over 62% of total protein consumed in China is pork. Hog production in China currently enjoys income tax free status. AgFeed Industries, Inc., and its affiliates filed voluntary petitions under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 13-11761) on July 15, 2013, with a deal to sell most of its subsidiaries to The Maschhoffs, LLC, for cash proceeds of $79 million, absent higher and better offers. AGFEED USA: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor-entities filing separate Chapter 11 petitions Debtor Case No. ------ -------- AgFeed USA, LLC 13-bk-11761 510 South 17th Street Suite 104 Ames, IA 50010 aka M2 P2, LLC AgFeed Industries, Inc. 13-bk-11762 TS Finishing, LLC 13-bk-11763 New York Finishing, LLC 13-bk-11764 Pork Technologies, L.C. 13-bk-11765 New Colony Farms, LLC 13-bk-11766 Heritage Farms, LLC 13-bk-11767 Heritage Land, LLC 13-bk-11768 Genetics Operating, LLC 13-bk-11769 M2P2 Facilities, LLC 13-bk-11770 MGM, LLC 13-bk-11771 M2P2 General Operations, LLC 13-bk-11772 New Colony Land Company, LLC 13-bk-11773 M2P2 AF JV, LLC 13-bk-11774 Midwest Finishing, LLC 13-bk-11775 Genetics Land, LLC 13-bk-11776 Chapter 11 Petition Date: July 15, 2013 Court: U.S. Bankruptcy Court District of Delaware Bankruptcy Judge: Hon. Brendan Linehan Shannon (Involvement of Judge Christopher S. Sontchi Terminated) Debtors' Counsel: Donald J. Bowman, Jr. Robert S. Brady, Esq. YOUNG, CONAWAY, STARGATT & TAYLOR 1000 North King Street Wilmington, DE 19801 Tel: 302-571-6600 Fax : 302-571-1253 Debtors' Financial Advisor: BDA Advisors Inc. Debtors' Claims & Noticing Agent: BMC GROUP, INC Estimated Assets: $100 million to $500 million Estimated Liabilities: $50 million to $100 million The petition was signed by Keith A. Maib, AgFeed's chief restructuring officer. ALLIANT HOLDINGS: S&P Affirms 'B-' Counterparty Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services said that it affirmed all of its ratings on Alliant Holdings I LLC (Alliant), including its 'B-' long-term counterparty credit rating. At the same time, S&P revised the outlook to positive from stable. "The rating action is in response to Alliant's maintenance of its enhanced competitive position and favorable operating performance, resulting in consistently strong organic revenue growth and stable EBITDA margins," said Standard & Poor's credit analyst Ying Chan. The outlook revision also reflects S&P's belief that the company will be able to de-lever its capital structure through earnings growth and debt pay-down. In December 2012, Alliant was acquired by private equity firm, Kolhberg Kravis Roberts & Co. (KKR) in a leveraged buyout transaction that resulted in financial leverage (bank debt + operating leases + earn-outs + self-insurance) of 7.8x as of Dec. 31, 2012. This ratio improved to 7.6x as of March 31, 2013, and S&P believes that Alliant is on track to reduce financial leverage further to approximately 7x during the next 12 months through earnings growth and debt pay-down. S&P's rating on Alliant is based on the company's fair business risk profile (BRP) and very aggressive financial risk profile (FRP), as defined by S&P's criteria. The fair BRP reflects Alliant's participation in a highly competitive and fragmented middle-market industry, its enhanced competitive position attributed to its specialty operations and employee benefits segment, and its good growth strategy. As a result of these attributes, the company produced peer-leading organic growth of 8.8% and healthy EBITDA margins of 30.6% for first-quarter 2013. Alliant is a regional U.S. insurance broker, focused on the specialty middle-market segment. The company is the 12th largest insurance broker in the nation, with revenues of $506 million for the year ended Dec. 31, 2012 (source: Business Insurance), and provides property casualty and employee benefits products and services to its clients. The company was founded in 1925. The positive outlook reflects S&P's expectation that Alliant will be able to maintain its enhanced competitive position and favorable operating performance trends. S&P expects continued strong demand for Alliant's specialty and employee benefits products and services, combined with recent and prospective growth initiatives, to produce peer-leading organic revenue growth of 5%- 10%. EBITDA margins will remain stable at 25%-30% in 2013 and improve modestly in 2014 due to growth strategies that will translate into increased profitability. S&P could revise the outlook to stable or lower the rating during the next 12 months if leverage and coverage deteriorate due to a decline in earnings or if management takes a more aggressive approach to financial policy through additional debt financing for acquisitions or reinvestment in the business above a level appropriate for the rating. This would occur if Alliant produces financial leverage of more than 8x and EBITDA fixed-charge coverage of less than 2x on a sustained basis. S&P could raise the rating on Alliant during the next 12 months if the company can maintain its favorable revenue and earnings performance trends and reduce financial leverage to approximately 7x or less. AMERICAN AIRLINES: Wants to Set Ceiling for Disputed Claims ----------------------------------------------------------- AMR Corp. and its debtor affiliates seek approval from Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York to establish the maximum amount of disputed single-dip general unsecured claims that will be used for determining disputed claims reserve under their Chapter 11 reorganization plan. The Debtors seek to establish the disputed claims reserve utilizing an aggregate maximum amount of $331 million of disputed single-dip general unsecured claims. This amount includes a reserve for single-dip general unsecured claims that may have been erroneously disallowed, and a reserve for damages from the rejection of contracts, according to a court filing. The amount provides for a cushion of about $220 million above AMR Corp.'s estimate of the aggregate allowed amount of disputed single-dip general unsecured claims. Based on review and analysis, AMR believes that the actual aggregate ultimate allowed amount of those claims won't exceed $331 million, and more probably, that the ultimate allowed amount of those claims won't exceed $113 million, according to a court filing. "This cushion will more than amply allow for unforeseen contingencies in the claims resolution process," said AMR lawyer, Stephen Karotkin, Esq., at Weil Gotshal & Manges LLP, in New York. The disputed single-dip general unsecured claims for which the reserve is being established consist of approximately 1,000 claims, which include intellectual property and employee claims. The claims are listed at: http://bankrupt.com/misc/AMR_DisputedSingleDipGUCI.pdf http://bankrupt.com/misc/AMR_DisputedSingleDipGUCII.pdf In connection with their request to establish the maximum amount of disputed claims, the Debtors also asked for court approval to implement procedures for the creation and administration of the disputed claims reserve. A copy of the proposed order detailing the procedures can be accessed for free at http://is.gd/FLmGrC A court hearing is scheduled for July 25. Objections are due by July 18. 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: Wins Approval of Deal With San Francisco ----------------------------------------------------------- The U.S. Bankruptcy Court in Manhattan approved a deal that would resolve issues related to American Airlines Inc.'s contracts with the City and County of San Francisco. American Airlines entered into various contracts with the city in connection with its use of the San Francisco International Airport. Under the deal, the city agreed to withdraw its claims against American Airlines in exchange for the assumption of their contracts by the airline, and payment of more than $1.03 million to cure the airline's default under the contracts. The agreement also requires the airline to replace its current surety bond with the city with a surety bond in the amount of $3,861,387 as security deposit under the contracts. A copy of the agreement is available for free at http://is.gd/gJCNHo 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: Has Green Light to Sell Condo Units in Miami --------------------------------------------------------------- AMR Corp. received the green light from the U.S. Bankruptcy Court in Manhattan to sell condominium units owned by its regional carrier. American Airlines Inc. owns 16 units at 1600 Ponce Office Condominium, a 13-storey condominium complex located in Coral Gables, Florida. One of the units is currently subject to a sales contract, under which the carrier agreed to sell the property to a certain Joan Fereira for $646,500. American Airlines plans to sell the other units on terms substantially similar to those contained in the Fereira agreement. 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: Nashville Airport Settlement Approved -------------------------------------------------------- Judge Sean Lane approved a settlement between AMR Corp.'s regional carriers and the Metropolitan Nashville Airport Authority. The agreement requires American Airlines Inc. and American Eagle Airlines Inc. will assume their respective contracts with MNAA, as revised, and pay the cure amount owed under the original contracts. American Airlines and Eagle owes the airport authority $83,706 and $52,824, respectively. In return, MNAA agreed to withdraw its unsecured claims against the carriers, including an $18.72 million claim against American Airlines. As part of the settlement, American Airlines will also take over another lease contract with the airport authority, and assign it to BNA Fuel Company LLC. The contract dated October 1, 1985 allowed the carrier to lease an area of the Nashville International Airport where a fuel storage and distribution facility is located. 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: Proposes Sale, Leaseback of 6 Boeing Planes -------------------------------------------------------------- AMR Corp. filed a motion seeking court approval to implement a sale and simultaneous leaseback of up to six Boeing 737-823 planes with Next Generation Aircraft Purchase Ltd. and AerCap Ireland Ltd. The Boeing planes are scheduled to be delivered to American Airlines Inc. between November 2013 and May 2014. AMR did not disclose the purchase price for the aircraft in the motion, which it filed under seal to protect confidential information. A court hearing is scheduled for July 25. Objections are due by July 18. In a related development, AMR received the go-signal from Judge Sean Lane to implement a sale and simultaneous leaseback of eight Boeing 737-823 planes with SMBC Aviation Capital Ltd. The Boeing planes are scheduled to be delivered to American Airlines Inc. between July 2013 and December 2014. 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 COMMERCE: Incurs $48,000 Net Loss in First Quarter ----------------------------------------------------------- American Commerce Solutions, Inc., filed with the U.S. Securities and Exchange Commission its quarterly report on Form 10-Q disclosing a net loss of $48,123 on $677,085 of net sales for the three months ended May 31, 2013, as compared with net income of $83,637 on $652,946 of net sales for the same period a year ago. As of May 31, 2013, the Company had $5.06 million in total assets, $4.21 million in total liabilities and $856,013 in total stockholders' equity. "The Company has incurred substantial operating losses since inception and has provided approximately $1,319 of cash in operations for the three months ended May 31, 2013. Additionally, the Company is in default on several notes payable. These factors raise substantial doubt about the Company's ability to continue as a going concern," according to the Company's filing. A copy of the Form 10-Q is available for free at: http://is.gd/bq4nDb About American Commerce American Commerce Solutions, Inc., headquartered in Bartow, Florida, is primarily a holding company with one wholly owned subsidiary; International Machine and Welding, Inc., is engaged in the machining and fabrication of parts used in heavy industry, and parts sales and service for heavy construction equipment. American Commerce incurred a net loss available to common stockholders of $5,791 on $2.35 million of net sales for the year ended Feb. 28, 2013, as compared with net income available to common stockholders of $25,962 on $2.44 million of net sales for the year ended Feb. 29, 2012. Messineo & Co., CPAs LLC, in Clearwater, Florida, issued a "going concern" qualification on the consolidated financial statements for the fiscal year ended Feb. 28, 2013. The independent auditors noted that the Company has recurring losses and negative cash flows from operating activities, a working capital deficit, and a stockholders' deficit. These conditions raise substantial doubt about its ability to continue as a going concern. AMERICAN REALTY: Case Conversion Hearing Continued Until Aug. 22 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas rescheduled to Aug. 22, 2013, at 9 a.m., the hearing to consider the motion to convert case to Chapter 7, or, in the alternative, to appoint chapter 11 trustee, or an examiner. The Debtor, in its response to the motion, stated cause for the motion to convert case does not exist; a trustee is not in the best interest of creditors; and an examiner should not be appointed. As reported by the Troubled Company Reporter on May 30, 2013, Bank of New York Mellon is successor to Bank of New York - Global Corporate Trust, as trustee for the Registered Certificate Holders of Commercial Capital Access One, Inc., Commercial Mortgage Bonds, Series 3 acting through Berkadia Commercial Mortgage, LLC, its special servicer a creditor. BoNY Mellon notes that so-called Atlantic Parties, creditors of the Debtor, had filed a motion to dismiss case as a bad faith filing based on the Debtor's inability to reorganize, fraud, incompetence, dishonesty, and gross mismanagement. According to the Bank, while the Trust agrees that the Atlantic Parties' motion to dismiss establishes "cause" for relief, the Trust does not believe that it is in the best interest of the estate or the Debtor's other creditors to dismiss the case. Rather, the Trust requests that the Court order the appointment of a chapter 11 trustee, and the appointment of an examiner. Keith M. Aurzada, Esq., and John C. Leininger, Esq. -- keith.aurzada@bryancave.com and john.leininger@bryancave.com -- at Bryan Cave LLP, represent the Bank. About American Realty Trust Dallas, Texas-based American Realty Trust, Inc., is a subsidiary of the real estate giant American Realty Investors Inc. Coping with a $73 million legal judgment from an apartment purchase that collapsed more than a decade ago, American Realty Trust, Inc., filed for Chapter 11 protection (Bankr. D. Nev. Case No. 12-10883) in Las Vegas on Jan. 26, 2012. The case was later dismissed on Aug. 1, 2012, by Judge Mike K. Nakagawa. Creditors David M. Clapper, Atlantic XIII, LLC, and Atlantic Midwest, LLC -- Clapper Parties -- sought the dismissal, citing, among other things, the Debtor has been stripped off of its assets prepetition and its ownership structure changed 10 days before the bankruptcy filing in an admitted effort to avoid disclosures to the Securities and Exchange Commission. American Realty Trust then filed for Chapter 11 protection (Bankr. N.D. Ga. Case No. 12-71453) on Aug. 29, 2012, with Bankruptcy Judge Barbara Ellis-Monro presiding over the case. The case was later transferred from Atlanta to Dallas (Bankr. N.D. Tex. Case No. 13-30891) effective Feb. 22, 2013, at the behest of the Clapper Parties. The Clapper Parties, who won a $72 million judgment against the Debtor, again has sought to move the case to Forth Worth and reassign the case to Judge Russell Nelms on grounds that Judge Nelms has experience with the parties and the issues raised in the dismissal motion filed by the Atlantic Parties. The Debtor has scheduled assets totaling $79,954,551, comprised of (i) real property valued at $87,884; (ii) equity interests in affiliated entities of an unknown value; and (iii) litigation claims valued at $79,866,667. The Debtor has scheduled liabilities totaling $85,347,587.95, comprised of: (i) $10,437.73 in unsecured priority tax claims; and (ii) unsecured non-priority claims of $85,336,886.61 (of which at least $77,164,701.14 are contested litigation claims against the Debtor). Gerrit M. Pronske, Esq., at Pronske & Patel, P.C., represents the Debtor in its restructuring effort. AMERISTAR CASINOS: S&P Affirms 'BB-' CCR; Outlook Stable -------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'BB-' corporate credit ratings, on both Pinnacle Entertainment Inc. and Ameristar Casinos Inc. S&P removed all ratings from CreditWatch where they were placed with negative implications on Dec. 21, 2012. The rating outlook is stable. The ratings affirmation follows a similar action on Pinnacle Entertainment Inc. earlier. It reflects S&P's view that although leverage will weaken to above 6x pro forma for the acquisition financing for the combined Ameristar and Pinnacle entity, the company will be able to improve leverage to under 6x by 2014 and to 5.5x in 2015 through the use of asset sale proceeds from Pinnacle's Lumiere Place casino and Ameristar Lake Charles and free operating cash flow to repay debt. The planned divestiture of the partially completed Ameristar Lake Charles development substantially reduces the amount of capital expenditures next year, which will meaningfully improve the company's free operating cash flow generation available for debt repayment in 2014. S&P had previously expected the combined entity to generate negative free operating cash flow through 2014 as Ameristar Lake Charles was completed, precluding any meaningful deleveraging until 2015. Under S&P's operating performance and cash flow assumptions, it now expects leverage for the consolidated entity to improve to below 6x in 2014 and to 5.5x in 2015, and it expects coverage to be in the mid- to high-2x area. ARCHDIOCESE OF MILWAUKEE: Few Sex Abuse Victims Get Large Sums -------------------------------------------------------------- Most of the $30 million the Archdiocese of Milwaukee paid out through mid-2012 went to victim settlements and therapy but the bulk of it went to just a few victims while hundreds of others received no compensation at all, according to an Associated Press analysis of the released documents. The documents support victims' claims that Wisconsin for many years was among the more difficult states for them to get compensation, AP said. The main reason was a 1995 ruling by the Wisconsin Supreme Court that made it almost impossible to hold the church responsible for its priests' actions, the report pointed out. The court said the church was protected from negligence lawsuits by the First Amendment. No longer afraid of litigation, the archdiocese established a no-settlement policy that lasted until the national clergy abuse scandal erupted in 2002, the news agency reported. The records also support victims' claims that few settlements were made before 1995, almost none were paid after the Supreme Court ruling and, even once mediation began in 2003, the archdiocese gave victims little room to negotiate, according to the report. The largest settlement paid to victims assigned to the Milwaukee archdiocese, nearly $16.7 million in 2006, went to 10 people in California. It is among the largest per-victim awards in the U.S., the report said, citing data from BishopAccountability.org, which tracks clergy abuse cases. In contrast, the public records show the typical payment to a victim in Wisconsin has been $50,000, according to the report. Eighteen of the 88 settlements included in the documents were reached before the 1995 ruling. The amounts range from $2,000 to $675,000, and it's not clear why some victims received more than others who suffered similar abuse, the report said. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ARCHDIOCESE OF MILWAUKEE: Wins Approval to Extend Debt Maturity --------------------------------------------------------------- The Archdiocese of Milwaukee won approval from Judge Susan Kelley of the United States Bankruptcy Court for the Eastern District of Wisconsin (Milwaukee) of its agreement with Park Bank to extend the maturity of its debt. Under the deal, both sides agreed to extend the maturity date to June 30, 2014, or the effective date of the archdiocese's Chapter 11 reorganization plan while maintaining the current non- default loan interest rate of 5.25%. The agreement would help the Archdiocese avoid litigation and immediate payment of $4.65 million, which it owes to Park Bank, according to court filings. Prior to its bankruptcy, the Archdiocese established a $6 million term credit facility with Park Bank. The archdiocese issued its $6 million promissory note to evidence the debt, and granted a mortgage on a Milwaukee real property to secure the debt. De Sales Preparatory Seminary Inc. guaranteed the Archdiocese's obligations to Park Bank and, to secure its guaranty, granted a mortgage and assignment of leases on real property located in St. Francis, Wisconsin. During the pendency of its bankruptcy case, the Archdiocese has only paid accrued interest on its debt to Park Bank. When the Archdiocese's note matured on Dec. 31, 2012, Park Bank had the contractual right to demand immediate payment of the entire note balance. Park Bank deferred exercise of this right and allowed the Archdiocese to continue to pay interest only on the unpaid balance of the note at maturity. To maintain the status of the loan as a performing loan, it is important to Park Bank to extend the maturity of its loan to the archdiocese and document the extension, the archdiocese's lawyers, Daryl Diesing, Esq., Bruce G. Arnold, Esq., and Francis H. LoCoco, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, argued in court papers. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ARCHDIOCESE OF MILWAUKEE: Creditors Panel Balks at Bid for FCR -------------------------------------------------------------- The official committee of unsecured creditors is blocking efforts by the Archdiocese of Milwaukee to get court approval of its application to appoint a legal representative for sex abuse victims who may file claims against the archdiocese. The Archdiocese filed the application on May 29 asking the Judge Susan Kelley of the United States Bankruptcy Court for the Eastern District of Wisconsin (Milwaukee) to appoint Deloitte Financial Advisory Services as legal representative. The archdiocese said the services to be provided by the firm, which include estimating the size of and determining the proper treatment of future claims, would help the archdiocese prepare a more feasible Chapter 11 plan. In a court filing, the committee argued the application is "premature" because the archdiocese has not yet proposed a reorganization plan, which, the committee, said would be "unconfirmable" in light of the archdiocese's administrative insolvency or illiquidity. The committee further argued the class of creditors described by the archdiocese in its application cannot be estimated by a legal representative for future claimants. The committee also expressed concern that the appointment of a legal representative would deprive future claimants of due process because of the archdiocese's failure to give adequate publication notice. "The assertion that a future claims representative is necessary for a more feasible plan is impossible for anyone to evaluate," the committee said, adding that the archdiocese has never presented the committee with anything resembling a term sheet for a reorganization plan. About Archdiocese of Milwaukee The Diocese of Milwaukee was established on Nov. 28, 1843, and was elevated to an Archdiocese on Feb. 12, 1875, by Pope Pius IX. The region served by the Archdiocese consists of 4,758 square miles in southeast Wisconsin which includes counties Dodge, Fond du Lac, Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Walworth, Washington and Waukesha. There are 657,519 registered Catholics in the Region. The Catholic Archdiocese of Milwaukee, in Wisconsin, filed for Chapter 11 bankruptcy protection (Bankr. E.D. Wis. Case No. 11-20059) on Jan. 4, 2011, to address claims over sexual abuse by priests on minors. The Archdiocese became at least the eighth Roman Catholic diocese in the U.S. to file for bankruptcy to settle claims from current and former parishioners who say they were sexually molested by priests. Daryl L. Diesing, Esq., at Whyte Hirschboeck Dudek S.C., in Milwaukee, Wisconsin, serves as the Archdiocese's counsel. The Official Committee of Unsecured Creditors in the bankruptcy case has retained Pachulski Stang Ziehl & Jones LLP as its counsel, and Howard, Solochek & Weber, S.C., as its local counsel. The Archdiocese estimated assets and debts of $10 million to $50 million in its Chapter 11 petition. (Catholic Church Bankruptcy News; Bankruptcy Creditors' Service, Inc., http://bankrupt.com/newsstand/or 215/945-7000) ATP OIL: To Sell Hydrocarbon Production Payment for $15 Mil. ------------------------------------------------------------ ATP Oil & Gas Corporation continues to face significant liquidity challenges with respect to its day-to-day operations. Absent an immediate infusion of funds sufficient to maintain a positive cash balance and continue its operation, the Debtor will run out of cash before it is able to successfully close the sale of its assets -- which is presently expected to occur in late August -- and the material benefits of the sale that the Court has found to be in the best interests of the estate and its various stakeholders would likely be lost, relates Charles S. Kelley, Esq., at Mayer Brown LLP. Despite its best efforts to seek various alternative sources for interim funding, and in light of the Debtor's present financial circumstances and related challenges, the only viable option presented to the Debtor to obtain the immediate infusion of cash needed to continue its operations through closing was the proposal by certain of the DIP Lenders to purchase a hydrocarbon production payment from the Debtor pursuant to the terms of a Production Production Payment Agreement -- and a related Conveyance of Production Payment -- in exchange for the immediate payment of $15 million to the Debtor, notes Mr. Kelly. Although certain terms of the Production Payment Agreement remain the subject of ongoing negotiation, the material terms of are the Production Payment Agreement are: * In exchange for its receipt of the Purchase Price, the Debtor will assign to each Buyer party an undivided interest in its pro rata share of a production payment which will consist of a variable undivided percentage interest in and to certain hydrocarbons produced, saved or sold from the Subject Interests and result in such Buyer's receipt of certain Distribution Amounts. * Consistent with the purpose for which the Debtor requires these funds (i.e., to meet the budgetary shortfalls necessary to reach a closing of the sale), the Debtor has agreed (and the Agreement expressly provides that) the $15 million payable to the Debtor thereunder will be used for general corporate purposes and solely in accordance with the budget through August 30, 2013 approved in connection with the Interim Cash Collateral Order. * Upon the Court's approval, the closing of the transactions contemplated by the Production Payment Agreement and related transaction documents will occur as soon as practicable thereafter and the Purchase Price will be immediately available to the Debtor for use in the ordinary course of its business and in accordance with the approved budget. The Debtor, hence, asks the Court to enter an order authorizing it to immediately enter into the transactions contemplated by the Production Payment Agreement and consummate the transactions contemplated as soon as practicable. These parties filed objections and reservation of rights with respect to the Debtor's Production Payment Motion: * Statoil USA E&P Inc. represented by Michael D. Rubenstein -- mdrubenstein@liskow.com -- and Joseph P. Hebert -- jphebert@liskow.com -- at LISKOW & LEWIS * Nexen Petroleum Offshore U.S.A. Inc. represented by Briana L. Cioni, Cliff I. Taylor, Jacob L. Newton, at STUTZMAN, BROMBERG, ESSERMAN & PLIFKA A PROFESSIONAL CORPORATION * Hornbeck Offshore Services, LLC and Odyssea Marine, Inc. represented by Robin B. Cheatham and Scott R. Cheatham at Adams and Reese LLP * Macquarie Investments LLC and Macquarie Americas Corp. represented by Louis M. Phillips -- lphillips@gordonarata.com -- and Courtney S. Lauer -- clauer@gordonarata.com -- at GORDON, ARATA, MCCOLLAM, DUPLANTIS & EAGAN, LLC * NGP Capital Resources Company represented by Rhett G. Campbell -- Rhett.Campbell@tklaw.com -- Tye C. Hancock -- Tye.Hancock@tklaw.com -- Mitchell E. Ayer -- Mitchell.Ayer@tklaw.com -- at THOMPSON & KNIGHT LLP * BP Exploration & Production, Inc. and BP America Production Company represented by Philip G. Eisenberg, W. Steven Bryant, Brooke B. Chadeayne * Cameron International Corporation represented by William B. Harris at DORE LAW GROUP,P.C. * Greystar Corporation represented by Tony L. Draper ? tdraper@wwmlawyers.com -- Charles B. Walther ? bwalther@wwmlawyers.com * Schlumberger Technology Corporation, M-I, L.L.C., Smith International, Inc., Wireline Control Services, LLC, Nabors Offshore Corporation, Canrig Drilling Technology, Ltd., Supreme Service & Specialty Co., Inc., Harvey Gulf International Marine, LLC, Hornbeck Offshore Services, LLC, Expeditors & Production Services, Inc., EPS Cargo Handlers Company, EPS Logistics Company, Barry Graham Oil Service, L.L.C., Gulf Offshore Logistics, L.L.C., Martin Holdings, L.L.C., C-Port/Stone, L.L.C., Offshore Service Vessels, L.L.C., Warrior Energy Services Corporation, Fastorq, L.L.C., Stabil Drill Specialties, L.L.C., Workstrings International, L.L.C., Superior Energy Services, L.L.C. d/b/a Superior Completion Services, International Marine, LLC, Champion Technologies, Inc., Offshore Energy Services, Inc., Frank's Casing Crew and Rental Tools, Inc., BEE MAR, L.L.C., Era Helicopters, L.L.C., Greystar Corporation and Bluewater Industries, L.P. (collectively, the Statutory Lien Objectors) represented by Phil F. Snow -- philsnow@snowspencelaw.com -- Kenneth Green -- kgreen@snowspencelaw.com -- at SNOW SPENCE GREEN LLP, and Robin B. Cheatham -- robin.cheatham@arlaw.com -- at ADAMS AND REESE LLP, S. Ault Hootsell III -- hootsela@phelps.com -- Brian D. Wallace -- wallaceb@phelps.com -- Allen C. Miller -- millera@phelps.com -- at PHELPS DUNBAR LLP, Benjamin W. Kadden -- bkadden@lawla.com -- Stewart F. Peck -- speck@lawla.com -- Christopher T. Caplinger -- ccaplinger@lawla.com -- Joseph P. Briggett -- jbriggett@lawla.com -- at LUGENBUHL, WHEATON, PECK, RANKIN & HUBBARD, Michael D. Rubenstein -- mdrubenstein@liskow.com -- at LISKOW & LEWIS, Stephen L. Williamson, at MONTGOMERY BARNETT, LLP, Tony L. Draper ? tdraper@wwmlawyers.com -- at WALKER WILCOX MATOUSEK, LLP Elizabeth M. Guffy -- eguffy@burlesonllp.com -- at BURLESON LLP Frederick D. Hyman and Joshua M. Grenard at Mayer Brown LLP also represents the Debtor as counsel. A copy of a notice of filing of a Revised Production Payment Agreement and related proposed order may be accessed for free at http://is.gd/qqaGQo The matter will come before the Court today, July 18, 2013, at 1:30 p.m., for approval. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. ATP OIL: Gets Interim Approval to Sell Deepwater Assets ------------------------------------------------------- ATP Oil & Gas Corporation obtained interim court approval of its motion to sell substantially all of its Deepwater Property Assets, free and clear of claims and liens to Credit Suisse AG, and the assumption and assignment of certain executory contracts and unexpired leases, at an initial sale hearing held on June 20-21, 2013. Judge Marvin Isgur held that the Purchased assets will not include (a) any assets of the Debtor in Israel, including but not limited to interests in the Shimshon and Daniel Licenses and any contracts relating thereto; (b) any assets of the Debtor's subsidiaries in Israel and the Netherlands, including but not limited to interests in the Shimshon and Daniel Licenses and any contracts relating thereto; and (c) any interest of the Debtor in its subsidiaries in Israel and the Netherlands. Final Approval of the Sale will be considered by the Court at an evidentiary hearing to be scheduled by the Debtor on Notice to all interested parties. At the Final Sale Hearing, the Court will consider evidence relating to the approval of the Purchaser. Judge Isgur held that the final order approving the sale will be consistent with the proposed order, which reflects all rulings made by the Court at the Initial Sale Hearing. A full-text copy of the Interim Sale Order and proposed Final Sale Order may be accessed for free at http://is.gd/DuqqMV About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. ATP OIL: Obtains Interim Order Authorizing Use of Cash Collateral ----------------------------------------------------------------- ATP Oil & Gas Corporation sought and obtained court approval of its third emergency motion asking for further authority to use Cash Collateral. Judge Marvin Isgur granted the request on an interim basis saying approval of the motion on a final basis will be considered on the same date that the Court considers final approval of the sale pursuant to the Asset Purchase Agreement executed by and between the Debtor and Credit Suisse AG, as administrative and collateral agent under the DIP Credit Agreement that was approved by the Court on an interim basis in June. The Debtor is authorized to use Cash Collateral pursuant to a budget for the period beginning June 21, 2013 subject to and consistent with the terms and conditions of the previous DIP orders entered by the Court. "This Order, and the use of Cash Collateral authorized by this Order, is subject to the protections granted (whether granted to the DIP Lenders, the Second Lien Indenture Trustee, the Second Lien holders or other lien holders or any other person) in the Interim DIP Order, the Final DIP Order, the Amendment No. 2 Order, the Amendment No. 3 Order, the First Interim Cash Collateral Order and the Second Interim Cash Collateral Order," ruled Judge Isgur. A full-text copy of the Interim Order and Budget may be accessed for free at http://is.gd/DMGt4T Prior to the Court's entry of its Interim Order, H.B. Rentals, L.C. filed a limited response and reservation of rights with respect to the Debtor's Third Emergency Motion. The Debtor and H.B. are parties to a Work Order No. MSA-05-049-010, under which H.B. agreed to furnish all labor, supervision, equipment, work facilities and materials necessary to rig up and down equipment for temporary living quarters for the Debtor's East Cameron Block 299 and West Cameron Block 557 P&A Work. According to H.B., a total of $206,415.00 presently remains due and owing by the Debtor for work performed after the Petition Date under the Work Order. H.B. says it does not object to the Motion, but reserves its rights to seek relief at a future time should the Existing Post-Petition Balance not be paid in the near future or the Debtor does not satisfy any future administrative expense claims associated with materials, services and labor provided by H.B. to ATP in connection with the Work Order. Attorneys for H.B. Rentals are Stewart F. Peck -- speck@lawla.com -- Christopher T. Caplinger -- ccaplinger@lawla.com -- Benjamin W. Kadden -- bkadden@lawla.com -- and Joseph P. Briggett -- jbriggett@lawla.com -- at Lugenbuhl, Wheaton, Peck, Rankin & Hubbard. About ATP Oil Houston, Tex.-based ATP Oil & Gas Corporation is an international offshore oil and gas development and production company focused in the Gulf of Mexico, Mediterranean Sea and North Sea. ATP Oil & Gas filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 12-36187) on Aug. 17, 2012. Attorneys at Mayer Brown LLP, serve as bankruptcy counsel. Munsch Hardt Kopf & Harr, P.C., is the conflicts counsel. Motley Rice LLC and Fayard & Honeycutt, APC serve as special counsel. Opportune LLP is the financial advisor and Jefferies & Company is the investment banker. Kurtzman Carson Consultants LLC is the claims and notice agent. ATP disclosed assets of $3.6 billion and $3.5 billion of liabilities as of March 31, 2012. Debt includes $365 million on a first-lien loan where Credit Suisse AG serves as agent. There is $1.5 billion on second-lien notes with Bank of New York Mellon Trust Co. as agent. ATP's other debt includes $35 million on convertible notes and $23.4 million owing to third parties for their shares of production revenue. Trade suppliers have claims for $147 million, ATP said in a court filing. An official committee of unsecured creditors has been appointed in the case. Evan R. Fleck, Esq., at Milbank, Tweed, Hadley & McCloy, in New York, represents the Creditors Committee as counsel. A 7-member panel of equity security holders has also been appointed in the case. Kyung S. Lee, Esq., and Charles M. Rubio, Esq. of Diamond McCarthy LLP, in Houston, Texas, serve as counsel to the Equity Committee. ATP is seeking court approval to sell substantially all of its Deepwater Assets and Shelf Property Assets. BAKERSFIELD GROVE: Dismissal Hearing Set for Aug. 15 ---------------------------------------------------- Bakersfield Grove Limited, LLC, is seeking dismissal of its Chapter 11 case. A hearing on the motion to dismiss is set for Aug. 15, 2013 at 10:30 a.m. at Courtroom 5A, 411 W Fourth St. Brea, California-based Bakersfield Grove Limited, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-13157) on March 12, 2012. The Debtor, a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B), has property located at Panama Lane, in Bakersfield, California. Judge Erithe A. Smith presides over the case. Kathy Bazoian Phelps, Esq., at Danning, Gill, Diamond & Kollitz, LLP. The petition was signed by Robert M. Clark, president of managing member. Steven M. Speier, the receiver of the Debtor's assets, is represented by Jeffrey B. Gardner, Esq., and Laurie Chavez, Esq., at Barry, Gardner & Kincannon. BCBG MAX: S&P Lowers Corp. Credit Rating 'CCC-'; Outlook Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its corporate credit rating on Vernon, Calif.-based BCBG Max Azria Group Inc. to 'CCC-' from 'CCC'. The outlook is negative. At the same time, S&P lowered the ratings on the company's $230 million first-lien term loan to 'CCC-' from 'CCC'. The '3' recovery rating remains unchanged. "The ratings on BCBG primarily reflect our view of the increasing likelihood that the company will enter into a restructuring," said credit analyst Helena Song. "Published reports have indicated a possible debt for equity swap, which we would likely view as a default. We believe this is the result of the company's weakened earnings and significant near-term maturities as its amended first-lien and second-lien term loan are due in the next several months." "The negative outlook reflects the high likelihood for a restructuring within the next six months. We would likely lower the debt ratings to 'CC' when the company announces a restructuring or similar distressed debt exchange. We would likely lower the corporate credit rating to 'SD' and the issue- level rating on the company's $230 million term loan to 'D' when the restructuring takes place. Once any restructuring is completed, we would expect to review our rating on the company under the new capital structure," S&P added. BEAR STEARNS: Can Pursue Claim vs. Insurers, Says NY High Court --------------------------------------------------------------- Marlene Kennedy at Courthouse News Service reported that Bear Stearns can press its insurers to recover millions of dollars in costs associated with securities law violations, New York's highest court ruled. The one-time broker-dealer, now part of J.P. Morgan, faced investigation by the U.S. Securities and Exchange Commission in 2003 for trading practices that favored certain customers -- primarily large hedge funds -- in buying and selling mutual fund shares. The practices, known as late trading and market timing, earned big profits for some clients at the expense of others. When the SEC notified Bear Stearns that it would seek $720 million in sanctions for wilful violations of securities law, the company objected, claiming no role in the mutual fund transactions -- other than clearing them -- and no share of the profits that resulted. Bear Stearns then proposed its own settlement, without admitting or denying the agency's findings. Under that settlement, which the SEC adopted in 2006, Bear Stearns agreed to pay $160 million as disgorgement -- return of ill-gotten gains -- and $90 million in civil penalties. The money created a $250 million fund to compensate mutual fund investors whom Bear Stearns allegedly harmed. At the same time, Bear Stearns also spent $14 million settling a number of private class-action lawsuits brought by mutual funds. It calculated the cost of defending those lawsuits and the SEC action at $40 million. Bear Stearns then turned to its insurers to cover the disgorgement, private settlement and defense costs as losses. When prime insurer Vigilant Insurance Co. and six excess carriers denied the claim, J.P. Morgan Securities -- the name Bear Stearns took after its 2008 acquisition -- sued for breach of contract in New York County Supreme Court. Though a judge refused to dismiss the action against the insurers, the Appellate Division's First Judicial Department in Manhattan held that, as a matter of public policy, Bear Stearns could not seek to recoup the $160 million disgorgement. But the Court of Appeals, New York's highest court, reinstated the Bear Stearns complaint June 11, 2013, saying the insurers were not entitled to a dismissal of the coverage claim. "Although we certainly do not condone the late trading and market timing activities described in the SEC order, the insurers have not met their heavy burden of establishing, as a matter of law on their CPLR 3211 dismissal motions, that Bear Stearns is barred from pursuing insurance coverage under its policies," Judge Victoria Graffeo wrote for the mostly unanimous court. The opinion notes that insurance contracts, like other agreements, "will ordinarily be enforced as written" without anyone passing judgment on their substance. But insurance contracts have "public policy exceptions" that prohibit indemnification for punitive damage awards and for conduct intended to cause injury, according to the ruling. The court rejected the claim that Bear Stearns triggered the latter exception by willfully violating securities laws, as the SEC had found. "But the public policy exception for intentionally harmful conduct is a narrow one, under which it must be established not only that the insured acted intentionally but, further, that it acted with the intent to harm or injure others," Graffeo wrote. "The SEC order, while undoubtedly finding Bear Stearns' numerous securities laws violations to be willful, does not conclusively demonstrate that Bear Stearns also had the requisite intent to cause harm," she added. The insurers also claimed on public policy grounds that Bear Stearns should not recover any portion of the $160 million disgorgement. The opinion notes that other courts have held that the return of ill-gotten gains does not constitute a "loss" or "damages" within the meaning of insurance policies. "Bear Stearns does not disagree with these principles," Graffeo wrote, "but urges that they do not prohibit coverage here since the bulk of the disgorgement payment -- approximately $140 million -- represented the improper profits acquired by third party hedge fund customers, not revenue that Bear Stearns itself pocketed. "Put differently, Bear Stearns alleges that much of the payment, although labelled disgorgement by the SEC, did not actually represent the disgorgement of its own profits," she added. But "the SEC order does not establish that the $160 million disgorgement payment was predicated on moneys that Bear Stearns itself improperly earned as a result of its securities violations," according to the ruling. "Consequently, at this early juncture, we conclude that the insurers are not entitled to dismissal of Bear Stearns' insurance claims related to the SEC disgorgement payment," Graffeo added. Judges Susan Read, Robert Smith, Eugene Pigott and Jenny Rivera joined the lead opinion. Chief Judge Jonathan Lippman and Judge Sheila Abdus-Salaam took no part in the decision. John Gross, Esq. -- jgross@proskauer.com -- of Proskauer Rose in New York argued for J.P. Morgan Securities. Joseph G. Finnerty III, Esq. -- joseph.finnertyIII@dlapiper.com -- of DLA Piper LLP (US) in New York represented Vigilant. Two of the excess carriers also had counsel: Michael Gioia, Esq. -- mgioia@lcbf.com -- of Landman Corsi Ballaine & Ford in New York for American Alternative Insurance Corp., and Edward Kirk, Esq. -- edward.kirk@clydeco.us -- of Clyde & Co. US in New York for Certain Underwriters at Lloyd's London. The American Insurance Association submitted an amicus curiae brief. 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. BEAR STEARNS: Settles Homebanc Adversary Lawsuit for $3MM --------------------------------------------------------- Stewart Bishop of BankruptcyLaw360 reported that the Chapter 7 trustee for HomeBanc Mortgage Corp. asked a Delaware bankruptcy judge to approve a $3.25 million settlement of a $100 million adversary proceeding it asserted against Bear Stearns & Co. Inc. over securities repurchase agreements between Bear Stearns and HomeBanc. According to the report, the trustee, George L. Miller, said following a split January ruling on cross-motions for summary judgment, the parties reached a settlement agreement on the HomeBanc's remaining cross-claims, Bear Stearns' cross claim and set-off claims, with Miller retaining his right to appeal the decision. About HomeBanc Headquartered in Atlanta, Georgia, HomeBanc Mortgage Corporation -- http://www.homebanc.com/-- was a mortgage banking company focused on originating primarily prime purchase money residential mortgage loans in the Southeast United States. HomeBanc Mortgage together with five affiliates filed for chapter 11 protection on Aug. 9, 2007 (Bankr. D. Del. Case Nos. 07-11079 through 07-11084). Joel A. Waite, Esq., at Young, Conaway, Stargatt & Taylor was selected by the Debtors to represent them in these cases. The Official Committee of Unsecured Creditors selected the firm Otterbourg, Steindler, Houston and Rosen, P.C. as its counsel. The Debtors' financial condition as of June 30, 2007, showed total assets of $5.1 billion and total liabilities of $4.9 billion. HomeBanc filed a joint consolidated liquidating plan and accompanying disclosure statement, dated April 30, 2008, but failed to obtain confirmation of that plan. HomeBanc subsequently moved for conversion of its cases to Chapter 7, which was granted by the Court, effective Feb. 24, 2009. 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. BEAR STEARNS: JPMorgan Wins Round in Dexia SA's Suit ---------------------------------------------------- David McLaughlin, writing for Bloomberg News, reported that JPMorgan Chase & Co., the biggest U.S. bank, defeated most of a lawsuit brought by Dexia SA over about $1.6 billion in mortgage- backed securities it bought before the financial crisis. U.S. District Judge Jed Rakoff in Manhattan narrowed the case to five securitization deals from 65 at issue in a complaint brought by Dexia, according to an order filed on April 4, Bloomberg related. Bloomberg further related that Dexia, based in Brussels, sued JPMorgan in 2012 along with the Bear Stearns and Washington Mutual businesses JPMorgan acquired, accusing the lender of "egregious fraud" in the sale of mortgage bonds. Dexia claimed loans backing securities purchased between 2005 and 2007 were riskier than promised. Dexia unit FSA Asset Management LLC said in court papers that JPMorgan received reports from independent mortgage-loan underwriters showing that 20 percent to 80 percent of the loans in samples used for testing didn't meet the underwriting guidelines, including fraudulent home appraisals or missing documentation, according to Bloomberg. "Rather than disclose these known defects to FSAM, defendants bought and sold massive quantities of defective loans," FSAM said, Bloomberg cited. "Defendants secretly overrode the independent loan underwriters' determinations, creating a final, sanitized version." Rakoff, Bloomberg added, granted part of JPMorgan's motion for a pre-trial ruling known as summary judgment. The judge dismissed claims brought by Dexia and said FSAM can pursue claims related to five securitizations. The case is Dexia SA v. Bear Stearns & Co., 12-cv-04761. U.S. District Court, Southern District of New York (Manhattan). 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. BELLE FOODS: Section 341(a) Meeting Set for Aug. 13 --------------------------------------------------- A meeting of creditors in the bankruptcy case of Belle Foods LLC will be held on Aug. 13, 2013, at 1:00 p.m. This is the first meeting of creditors required under Section 341(a) of the Bankruptcy Code in all bankruptcy cases. All creditors are invited, but not required, to attend. This meeting of creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. About Belle Foods Belle Foods LLC bought 57 stores from Southern Family Markets LLC in 2012, and put the business into Chapter 11 reorganization (Bankr. N.D. Ala. Case No. 13-81963) on July 1, 2013, in Decatur, Alabama. The chain is owned by a father and son who purchased the operation with a $4 million secured term loan and $24 million revolving credit from the seller. The stores are in Florida, Georgia, Alabama and Mississippi. The petition shows assets and debt both for more than $10 million. C&S Wholesale Grocers Inc. is owed about $6 million on secured and unsecured debt. Belle Foods owes another $8 million to trade suppliers, according to a court filing. D, Christopher Carson, Esq., Brent W. Dorner, Esq., and Marc P. Solomon, Esq., at Burr & Forman, LLP, represent the Debtor as counsel. BELLE FOODS: Has Interim Access to Lenders' Cash Until July 22 -------------------------------------------------------------- On July 12, 2013, the U.S. Bankruptcy Court for the Northern District of Alabama entered an Agreed Second Interim Order authorizing Belle Foods, LLC, to use cash collateral of Secured Lenders C&S Wholesale Grocers, Inc., and Southern Family Markets, LLC, through and until 5:00 p.m. on Monday, July 22, 2013, pursuant to a budget. As of the Petition Date, the Debtor was indebted to the Secured Lenders in an amount not less than $34,609,449, secured by substantially all of the Debtor's assets, including cash collateral. All cash collected by the Debtor during the Second Interim Period in excess of the cash needs set forth in the Budget will be delivered by wire to the Secured Lender on July 22, 2013, by 4:00 p.m. As adequate protection for the diminution in value of their interests in the collateral, including cash collateral, the Secured Lenders are granted security interests and replacement liens upon all property of the Debtor (except for causes of actions under Chapter 5 of the Bankruptcy Code). The Secured Lenders are also granted an allowed superpriority administrative expense claim pursuant to Bankruptcy Code section 507(b), subject and subordinate to a carve-out for the payment of accrued and unpaid allowed professional fees and expenses of Debtor's professionals to the extent of any existing retainers currently held by any such professionals, and to the extent of any line items in the Second Interim Budget for any professional fees. A copy of the Second Agreed Interim Order is available at: http://bankrupt.com/misc/bellefoods.doc108.pdf About Belle Foods Belle Foods, LLC, bought 57 stores from Southern Family Markets LLC in 2012, and put the business into Chapter 11 reorganization (Bankr. N.D. Ala. Case No. 13-81963) on July 1, 2013, in Decatur, Alabama. The chain is owned by a father and son who purchased the operation with a $4 million secured term loan and $24 million revolving credit from the seller. The stores are in Florida, Georgia, Alabama and Mississippi. The petition shows assets and debt both for more than $10 million. C&S Wholesale Grocers Inc. is owed about $6 million on secured and unsecured debt. Belle Foods owes another $8 million to trade suppliers, according to a court filing. D, Christopher Carson, Esq., Brent W. Dorner, Esq., and Marc P. Solomon, Esq., at Burr & Forman, LLP, represent the Debtor as counsel. BERGENFIELD SENIOR: Hearing on Bid Procedures on July 29 -------------------------------------------------------- Bergenfield Senior Housing, LLC, asks the U.S. Bankruptcy Court for the District of New Jersey to enter an order approving bid procedures for the sale of substantially all of the Debtor's assets. Written objections to the motion must be filed by July 22, 2013. The hearing on the motion is scheduled to be held on July 29, 2013, at 10:00 a.m. The motion was filed by: Aaron S. Applebaum, Esq. Barry D. Kleban, Esq. McELROY, DEUTSCH, MULVANEY & CARPENTER, LLC Three Gateway Center 100 Mulberry Street Newark, NJ 07102 Tel: (302) 300-4515 Fax: (302) 654-4031 E-mail: aaplebaum@mdmc-law.com About Bergenfield Senior Housing Bergenfield Senior Housing, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D.N.J. Case No. 13-19703) in Newark, New Jersey, on May 2, 2013. Nicholas Rotonda signed the petition as member/manager. Judge Morris Stern presides over the case. Aaron Solomon Applebaum, Esq., and Barry D. Kleban, Esq., at McElroy, Deutsch, Mulvaney & Carpenter, LLP, represent the Debtor as counsel. In its schedules, the Debtor disclosed $14,061,100 in assets and $19,957,026 in liabilities as of the Petition Date. The Bergenfield, New Jersey-based debtor is a single asset real estate under 11 U.S.C. Sec. 101(51B) and said total assets and debts exceed $10 million. The Debtor operates and wholly owns a 90-unit residential apartment building located at 47 Legion Drive, Bergenfield, New Jersey. The Debtor's primary secured creditor is Boiling Springs Savings Bank. The Debtor is indebted to Boiling Springs on account of two promissory notes, both of which are secured by mortgages on the Property. Boiling Springs' first-position mortgage secures indebtedness in the total amount of $12.02 million and the second- position mortgage secures indebtedness of $575,000. BERNARD L MADOFF: 2nd Circ. Won't Revive Feeder Fund Suit --------------------------------------------------------- Stewart Bishop of BankruptcyLaw360 reported that the Second Circuit on Tuesday upheld the dismissal of a class action against an investment firm that forwarded assets to feeder funds of Bernard L. Madoff Securities LLC, finding the suit failed to identify any material misrepresentation or omission by the firm that would constitute fraud. According to the report, a three-judge panel for the appeals court held that fraud claims alleged by investor David B. Newman and affiliates against Family Management Corp., its top executives and others fall flat. 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. BLUE SPRINGS: Still Awaiting Exit Loans; Plan Date Moved Again -------------------------------------------------------------- A Notice of Third Extension of Effective Date of Blue Springs Ford Sales, Inc.'s confirmed Amended Plan of Reorganization has been filed by the Debtor, which extends the Effective Date of the Plan until July 22, 2013. According to papers filed with the U.S. Bankruptcy Court for the Western District of Missouri, the Debtors are awaiting exit financing documents from Bank Midwest who has stated they will provide them to the Debtor this week. As reported in the Troubled Company Reporter on June 20, 2013, the Court confirmed the Amended Plan on June 10 after determining that the Plan satisfies the confirmation requirements under Section 1129 of the Bankruptcy Code. The Plan contemplates the Debtor continuing its business operations without significant change and retaining its existing management. Under the Plan: * Creditors holding allowed administrative expense claims and creditors holding allowed priority tax claims will be paid in full. * Secured creditors holding allowed secured claims will be paid in full according to their existing loan documents, except for modifying various maturity dates and, in some cases, interest rates, to "fit" with Reorganized Debtor's anticipated financial condition for the balance of those loans. * Holders of general unsecured trade creditor claims will be paid in full and receive cash, with interest accruing at the Applicable Post-Judgment interest rate, in equal quarterly payments commencing on the Distribution Date and continuing on the Periodic Distribution Dates until the two year anniversary of the Effective Date. * Holders of general unsecured tort claims, which remain disputed and unliquidated, will receive cash, with interest accruing at the Application Post-Judgment Interest rate in equal quarterly payments commencing on the Distribution Date and continuing on the Periodic Distribution Dates until the second anniversary of the Effective Date in the total amount of $50,000. * Holders of allowed general unsecured gift card/coupon claims will receive a gift card in the face amount of their allowed claim. The gift card must be redeemed by June 1, 2014. The gift card will be non-transferrable. * Holders of general unsecured insider claims will receive cash with interest accruing at the Applicable Post-Judgment Interest Rate in equal quarterly interest-only payments commencing 12 months from the Distribution Date and continuing on the Periodic Distribution Dates until the 10th anniversary of the Confirmation Date. * Holders of equity securities in the Debtor will retain their equity securities in the Reorganized Debtor. Blue Springs Ford Blue Springs Ford Sales, Inc. -- http://www.bluespringsford.com/ -- is a Ford dealer, serving Blue Springs in Missouri. A jury verdict assessing actual damages of $171,500 and punitive damages in the amount of $1.75 million (54 times the actual damages) prompted Blue Springs Ford to seek Chapter 11 protection. The judgment was on account of a suit filed by a customer in Circuit Court of Jackson County, Missouri, under a variety of legal claims, including, but not limited to, the company's alleged failure to adequately disclose a full detailed vehicle history report in connection with a sale of a used Ford. Blue Springs Ford filed a Chapter 11 petition (Bankr. D. Del. Case No. 12-10982) on March 21, 2012, listing $10 million to $50 million in assets and debts. The Debtor is represented by Michael M. Tamburini, Esq., James E. Bird, Esq., and Andrew J. Nazar, Esq., at Polsinelli PC, in Kansas City, Missouri. Donlin Recano & Company Inc. serves as the Debtor's claims agent. Eric L. Johnson, Esq., at Spencer Fane Britt & Browne, in Kansas City, Mo., represents the Debtor as special conflicts counsel, Delaware Bankruptcy Judge Mary F. Walrath in a March 28 order transferred the case's venue following an oral motion by the judgment, creditors Kimberly and Michael von David, at a March 23 hearing. The case was transferred to the U.S. Bankruptcy Court Western District of Missouri Court (Case No. 12-41176) and assigned to the Hon. Jerry W. Venters. BLYTH INC: S&P Withdraws 'B+' Corp. Credit & Sr. Unsec. Ratings ---------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its ratings on Blyth Inc., including its 'B+' corporate credit and senior unsecured issue-level ratings. Blyth is a Connecticut-based designer and marketer of scented and unscented candles, seasonal decorations, household convenience items, personalized gifts, and weight management products. S&P withdrew all of its ratings after Blyth repaid the remaining balance on its $100 million 5.5% senior notes due 2013 with proceeds from a $50 million 6.0% senior notes offering (unrated) and available funds. CAPITOL BANCORP: Bidding Procedures for Sale of Units' Stock OK'd ----------------------------------------------------------------- BankruptcyData reported that the U.S. Bankruptcy Court approved Capitol Bancorp's motion for an order approving the (A) model form of purchase agreement and omnibus bidding procedures and (B) form and manner of notice of (i) sale of stock in subsidiary banks and certain other assets and (ii) assumption and assignment of certain executory contracts and granting related relief. According to the report, this order approves the initial minimum overbid requirement, the possibility of a stalking horse bidder fee and bidding increments of no less than $100,000. The order asserts, "Under the circumstances, and particularly in light of the extensive prior marketing of the Banks and the Other Purchased Assets, the model Purchase Agreement and the Bidding Procedures constitute a reasonable, sufficient, adequate, and proper means to pursue the Sale(s) of the Banks and the Other Purchased Assets." As previously reported, "The Debtors request authority to distribute proceeds of the sale(s) into an escrow account to be disbursed to one or more of the Debtors' under- capitalized subsidiary banks, if and as may be required by the Federal Deposit Insurance Corporation." 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. CAROLINA BEER: S&P Assigns 'B-' Rating to $120MM Sr. Secured Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Mooresville, N.C.-based Carolina Beer & Beverage Holdings LLC. The outlook is positive. In addition, S&P assigned its 'B-' issue-level rating to Carolina Beverage Group LLC's proposed $120 million senior secured notes due 2018, issued under Rule 144A without registration rights. The recovery rating is '4', indicating S&P's expectation for average (30% to 50%) recovery in the event of a payment default. S&P do not rate the company's proposed new $25 million five-year revolving credit facility. For analytical purposes, S&P views Carolina Beer & Beverage Group LLC and its wholly owned operating subsidiary, Carolina Beverage Group LLC, as one economic entity. "The ratings on Carolina reflect our opinion that the company's business risk profile is "vulnerable" and financial risk profile is "highly leveraged." Key credit factors in our business risk assessment include the company's narrow business focus, small size, as well as customer, geographic, and manufacturing concentration, and the risks associated with pursuing a rapid growth policy. "We believe the company is highly dependent on demand for energy drinks, a category that has recently experienced negative publicity, which may result in increased regulation and reduced demand," said Standard & Poor's credit analyst Jean Stout. Standard & Poor's views Carolina's financial risk profile as highly leveraged. "It is our opinion that the company's financial policy is aggressive, reflecting its controlling ownership by a financial sponsor and its relatively high level of debt, including the debt financing the shareholder distribution," said Ms. Stout. (Carolina is a private company and does not publish financial statements publicly.) The outlook on Carolina is positive. The company has grown rapidly during the past one to two years. S&P could raise the rating one notch to 'B' if the company expands its revenue and customer base, generates positive free cash flow annually (despite ongoing reinvestment in its business, including opening the second manufacturing facility), and reduces leverage to a level commensurate with a higher rating. CAROLINA BEVERAGE: Moody's Assigns 'B3' CFR; Outlook Stable ----------------------------------------------------------- Moody's Investors Service assigned a B3 first time Corporate Family Rating to Carolina Beverage Group, LLC and a Caa1 (LGD 4, 62%) rating to its proposed $120 million bond issuance. The outlook is stable. Proceeds from the bond offering will be used to refinance debt and fund a large cash distribution to stockholders including the private equity sponsor, SunTx Capital Partners. The notes will be secured by a second lien on substantially all of CBG's and the guarantors' assets. Each existing and future subsidiary will guarantee the notes and the credit facility. The notes' collateral and guarantees will be contractually subordinated to a new $25 million revolving credit facility (unrated). Ratings Rationale: CBG's B3 corporate family rating reflects its small scale as a beverage co-packer with approximately $100 million revenue in fiscal year 2012, and significant customer concentration as the company's top two customers accounted for approximately 90% of CBG's sales. Magnifying the customer concentration risk, the energy drink category has been subject to ongoing negative press and lawsuits alleging that energy drinks pose a major health risk. The B3 rating further reflects the company's current limited geographic diversity, capacity constraints, relatively high financial leverage following a large sponsor dividend, and high capital spending required to build out a new manufacturing plant in Fort Worth, Texas. The increase in capital spending immediately following the large sponsor dividend will weaken liquidity and will delay the company's ability to de-lever. However the expansion will also improve the company's geographic diversification and help alleviate capacity constraints which should support revenue growth The B3 rating is supported by the company's strong profit margins and its solid position in the high-growth energy drink category in North America. Additionally, competitive barriers to entry are significant because CBG's numerous types of filling technologies and twenty plus types of container formats and sizes support the unique bottling and fill demands of its customers. The company's top two customers would likely incur material restructuring costs if they terminated their relationship with CBG. While capacity remains a challenge due to fast paced demand growth, the new Texas manufacturing facility has the potential to more than double CBG's case volume capacity. The company's liquidity profile is adequate. Moody's expects that CBG will have sufficient cash flow over the next twelve months to meet its basic cash needs including working capital and maintenance capital expenditures. However, internal cash flow will not necessarily be sufficient to meet these needs in each quarter. Furthermore, CBG will need to rely on its $25 million revolving credit facility to meet the capital spending needs required to build out the new Texas manufacturing plant. The stable outlook reflects Moody's expectation that CBG's small scale and high customer concentration will limit upward rating momentum for some time. However, Moody's expects that credit metrics will improve after the plant expansion and that debt to EBITDA, which is around five times pro forma for the transaction, will decline to the mid-four times range in the next twelve-to- eighteen months. The rating may be upgraded if the company gains greater scale, as well as greater customer and geographic diversification. An upgrade would also require CBG to sustain positive free cash flow and de-lever such that debt/EBITDA is sustained below 4.0 times and EBIT to interest exceeds 2.0 times. A downgrade could occur if operating performance deteriorates such that sales growth weakens materially, free cash flow is negative, debt to EBITDA is sustained materially above 5.5 times, or EBIT to interest approaches one times. Aggressive shareholder returns, debt-financed acquisitions, a loss of a key customer, or weakened liquidity could also lead to a downgrade. The following ratings were assigned: Corporate family rating at B3 Probability of default rating at B3-PD Secured second lien notes at Caa1 (LGD-4, 62%) Carolina Beverage Group, LLC is a leading manufacturer of specialty and functional beverages in North America. Its two largest customers constitute approximately 90% of CBG's volume. The principal methodology used in this rating was the Global Soft Beverage Industry published in May 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CASH STORE: Faces Class Action in Quebec Over Internal Controls --------------------------------------------------------------- The Cash Store Financial Services Inc. on July 16 disclosed that a proposed class action proceeding has been commenced in Quebec against the Company and certain of its present and former directors and officers. The claim is substantially similar to the recently announced proposed class action proceedings in New York, Alberta and Ontario and the previously disclosed complaint filed by Globis Capital Partners L.P. The plaintiffs allege, among other things, that the Company made misrepresentations during the period from November 24, 2010 to May 24, 2013 regarding the Company's internal controls and financial reporting and the third-party loan portfolio acquisition. The Company plans to defend itself vigorously against what it believes are unfounded allegations. The Company acknowledges that substantially similar class actions may continue to be commenced in Alberta, Ontario, New York and Quebec, as well as other jurisdictions. To the extent that such substantially similar proceedings are commenced, the Company will provide disclosure in its quarterly and annual filings. About Cash Store Financial Headquartered in Edmonton, Alberta, The Cash Store Financial is the only lender and broker of short-term advances and provider of other financial services in Canada that is listed on the Toronto Stock Exchange (TSX: CSF). Cash Store Financial also trades on the New York Stock Exchange (NYSE: CSFS). Cash Store Financial operates 512 branches across Canada under the banners "Cash Store Financial" and "Instaloans". Cash Store Financial also operates 25 branches in the United Kingdom. Cash Store Financial is a Canadian corporation that is not affiliated with Cottonwood Financial Ltd. or the outlets Cottonwood Financial Ltd. operates in the United States under the name "Cash Store". Cash Store Financial does not do business under the name "Cash Store" in the United States and does not own or provide any consumer lending services in the United States. Cash Store Financial employs approximately 1,900 associates. * * * As reported in the Feb. 8, 2013 edition of the TCR, Standard & Poor's Ratings Services lowered its issuer credit rating on Cash Store Financial (CSF) to 'CCC+' from 'B-'. The outlook is negative. "The downgrades follow a proposal by the payday loan registrar in Ontario to revoke CSF's payday lending licenses and CSF's announcement that it has discontinued its payday loan product in the region," said Standard & Poor's credit analyst Igor Koyfman. The company's businesses in Ontario, which account for approximately one-third of its store count, will begin offering a new line of credit product to its customers. S&P believes this is to offset the loss of its payday lending product; however, this is a relatively new product, and S&P believes that it will be challenging for the company to replace its lost earnings from the payday loan product. S&P also believes that the registrar's proposal could lead to similar actions in other territories," the Company said. As reported by the TCR on May 22, 2013, Moody's Investors Service downgraded the Corporate Family Rating and senior unsecured debt rating of Cash Store Financial Services to Caa1 from B3 and assigned a negative outlook. According to Moody's, CSFS remains unprofitable on both the pretax and net income lines and prospects for return to profitability are unclear. CHASSIX INC: Moody's Assigns 'B3' CFR, Stable Outlook ----------------------------------------------------- Moody's Investors Service assigned ratings to Chassix, Inc. Corporate Family Rating at B3, and Probability of Default Rating at B3-PD. Chassix is a newly formed intermediate holding company which comprises the operations of Diversified Machine Inc. and Concord International, Inc. The existing ratings of DMI and its parent UC Holdings, Inc. (CFR at B3) are unaffected by the action. In a related action, Moody's assigned a B3 rating to the new $325 million senior secured note to be issued by Chassix. The rating outlook is stable. The new note will be used to refinance existing debt at DMI and Concord (the old debt facilities), pay related fees and expenses, and provide a small amount of cash on hand. Following successful completion of the refinancing transaction, the ratings of UC Holdings, Inc. and DMI will be withdrawn. DMI and Concord manufacture, cast, machine and assemble fully- engineered chassis and powertrain components and modules for leading automotive OEMs and Tier 1 suppliers. Affiliates of Platinum Equity Advisors, LLC are the equity sponsors of the company. The following ratings were assigned: Chassix, Inc. Corporate Family Rating, B3; Probability of Default, B3- PD; B3 (LGD4, 56%) to the $325 million senior secured note. The following ratings are unchanged. UC Holdings, Inc. Corporate Family Rating, B3; Probability of Default, B3-PD; Diversified Machine, Inc. (with Concord International, Inc. and certain other UC Holdings, Inc. subsidiaries as co-borrowers): B3 (LGD4, 53%) to the $237 million senior secured term loan facility. The ratings for UC Holdings and Diversified Machine, Inc. will be withdrawn upon completion of the refinancing. Ratings Rationale: Chassix's B3 CFR reflects the company's high leverage and weak operating performance as management continues its efforts to correct underperforming operations and integrate the Concord facilities which were acquired in 2012. Chassix has initiated a number of restructuring and integration initiatives, but the full financial benefit of these actions has not been realized in reported results. Even after backing out certain one-time costs and considering the benefits of anticipated synergies, Moody's believes that Chassix's EBITA margin was in the low single digit range for the LTM period ended March 31, 2013. Supporting an improvement in Chassix's operating performance over the intermediate-term is Moody's expectation of continued growth in North American automotive demand and the realization of further benefits from restructuring actions. The current refinancing also is expected to provide the company with additional operating flexibility through the paydown of outstandings under the asset base revolving credit facility. The stable rating outlook continues to reflect Moody's expectation that stronger profitability consistent with the assigned rating will be supported by the realization of restructuring and integration initiatives combined with improved availability under the asset based revolving credit facility. Chassix is anticipated to have an adequate liquidity profile over the next twelve months supported by the $115 million asset based revolving credit facility (which is expected to increase to $125 million in connection with the recapitalization) and cash on hand. Following the company's balance sheet recapitalization, borrowings under the asset based revolver are expected to be repaid, supporting borrowing base availability, estimated to be about $112 million as of March 31, 2013. The financial covenants under the revolving credit facility are a springing fixed charge coverage ratio of 1.0x when availability falls below the greater of 10% of commitments or $7.5 million for five consecutive days. The senior secured note will not have financial maintenance covenants. Moody's believes Chassix's ongoing efforts to improve operating inefficiencies and drive synergies between the DMI and Concord operations will result in a modest use of cash over the near-term. Yet, the company's cash balances and credit availability are expected to support operating flexibility. The rating outlook could improve if Chassix successfully demonstrates that the manufacturing issues at certain DMI facilities have been cured and the implementation of synergy programs result in improving profit margins while generating positive free cash flow. A positive rating action could result if, absent pro forma adjustments, EBITA margin improves above 6% on an LTM basis, debt/EBITDA is sustained below 4x, and EBIT/Interest approaches 2x. The outlook or rating could be lowered if Chassix's cost improvement actions do not demonstrate a return of operating performance where EBITA margins are approaching 5%, if North American automotive demand deteriorates resulting in the expectation that EBITA/interest will be sustained below 1.5x or Debt/EBITDA will be sustained above 5x, or a deterioration in liquidity. The principal methodology used in this rating was the Global Automotive Supplier Industry Methodology published in May 2013. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Chassix, Inc. is the parent holding company for the combined operations of Diversified Machine, Inc. and Concord International, Inc. DMI and Concord manufacture, cast, machine and assemble fully-engineered chassis and powertrain components and modules for leading automotive OEMs and Tier 1 suppliers. Chassix, Inc. is a wholly-owned subsidiary of affiliates of Platinum Equity Advisors, LLC. COOPER-BOOTH: Can Employ Barney Snyder as Special Counsel --------------------------------------------------------- Cooper-Booth Wholesale Company, L.P., sought and obtained approval from the U.S. Bankruptcy Court to employ Barley Snyder as special counsel. The Debtor requires Barley to be employed postpetition as special collection counsel to take any and all steps necessary to collect receivables owed to the Debtor's estate. As of the petition date, the firm is owed the approximate amount of $417 on account of prepetition legal services. On or within 90 days of the Petition Date, Barley received no payment from the Debtor. Any and all compensation to be paid to Barley for services rendered on the Debtor's behalf shall be fixed by application to the bankruptcy court in accordance with the administrative order establishing procedures for allowance and payment of interim compensation and reimbursement of expenses to professionals dated May 23, 2013. Barry Margolis attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The application was submitted by general bankruptcy counsel Robert w. Seitzer, Esq., at Maschmeyer Karalis P.C. About Cooper-Booth Wholesale Cooper-Booth Wholesale Company, L.P. and two affiliates sought Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 13-14519) in Philadelphia on May 21, 2013, after the U.S. government seized the Company's bank accounts to recover payments made by a large customer caught smuggling Virginia-stamped cigarettes into New York. Serving the mid-Atlantic region, Cooper is one of the top 20 convenience store wholesalers in the country. Cooper supplies cigarettes, snacks, beverages and other food items from Hershey's, Lellogg's, Bic, and Mars to convenience stores. Cooper has been in the wholesale distribution business since 1865 when the Booth Tobacco Company was incorporated in Lancaster, Pennsylvania. The Company has been family owned and operated for three generations. Aris J. Karalis, Esq., and Robert W. Seitzer, Esq., at Maschmeyer Karalis, P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Executive Sounding Board Associates, Inc., is the financial advisor. Blank Rome LLP represents the Debtor in negotiations with federal agencies concerning the seizure warrant. Cooper Booth estimated assets of at least $50 million and liabilities of at least $10 million as of the bankruptcy filing. As of the Petition Date, the Debtors' total consolidated funded senior debt obligations were approximately $10.7 million and consisted of, among other things, $7.72 million owing on a revolving line of credit facility, $2.83 million owing on a line of credit for the purchase of equipment, and $166,000 due on a corporate VISA Card. PNC Bank asserts that a letter of credit facility is secured by all personal property owned by Wholesale. Unsecured trade payables totaled $22.8 million as of May 21, 2013. COOPER-BOOTH: Panel Retains Klehr Harrison as Counsel ----------------------------------------------------- The Official Committee of Unsecured Creditors of Cooper-Booth Wholesale Company, L.P., sought and obtained permission from the U.S. Bankruptcy Court to retain Klehr Harrison Harvey Branzburg LLP as counsel nunc pro tunc to June 4, 2013. The Committee says the firm's services are necessary to enable the Committee to assess and monitor efforts of the Debtors and their professional advisors to maximize the value of the Debtors' estates. Klehr Harrison has agreed with the Committee to bill at its normal hourly rates: Partners $360 to $710 Of Counsel $325 to $455 Associates $230 to $425 Paralegals $150 to $300 The principal attorneys at Klehr Harrison designated to represent the Committee will charge at these rates: Morton R. Branzburg (partner 37 years experience) $650 Richard M. Beck (partner 23 years experience) $550 Margaret M. Manning (associate 12 years experience) $375 Morton R. Branzburg, Esq., a partner at the firm, attests that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Cooper-Booth Wholesale Cooper-Booth Wholesale Company, L.P. and two affiliates sought Chapter 11 protection (Bankr. E.D. Pa. Lead Case No. 13-14519) in Philadelphia on May 21, 2013, after the U.S. government seized the Company's bank accounts to recover payments made by a large customer caught smuggling Virginia-stamped cigarettes into New York. Serving the mid-Atlantic region, Cooper is one of the top 20 convenience store wholesalers in the country. Cooper supplies cigarettes, snacks, beverages and other food items from Hershey's, Lellogg's, Bic, and Mars to convenience stores. Cooper has been in the wholesale distribution business since 1865 when the Booth Tobacco Company was incorporated in Lancaster, Pennsylvania. The Company has been family owned and operated for three generations. Aris J. Karalis, Esq., and Robert W. Seitzer, Esq., at Maschmeyer Karalis, P.C., in Philadelphia, serve as the Debtors' bankruptcy counsel. Executive Sounding Board Associates, Inc., is the financial advisor. Blank Rome LLP represents the Debtor in negotiations with federal agencies concerning the seizure warrant. Cooper Booth estimated assets of at least $50 million and liabilities of at least $10 million as of the bankruptcy filing. As of the Petition Date, the Debtors' total consolidated funded senior debt obligations were approximately $10.7 million and consisted of, among other things, $7.72 million owing on a revolving line of credit facility, $2.83 million owing on a line of credit for the purchase of equipment, and $166,000 due on a corporate VISA Card. PNC Bank asserts that a letter of credit facility is secured by all personal property owned by Wholesale. Unsecured trade payables totaled $22.8 million as of May 21, 2013. CORELOGIC INC: Moody's Rates New $1.15-Billion Debt 'Ba1' --------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to CoreLogic, Inc.'s proposed $600 million senior secured Term Loan A due 2018 and $550 million revolving credit facility due 2018. Moody's also revised the senior unsecured notes rating to B1 from Ba3 and the speculative grade liquidity rating to SGL-2 from SGL-1. All other ratings, including the Ba2 corporate family rating, remain unchanged. The outlook is maintained at stable. The proceeds from the new debt will be used primarily to fund the acquisition of the Marshall and Swift/Boeckh (MSB) and DataQuick businesses from Decision Insight Information Group (combined purchase price of $661 million) and to repay over $325 million of existing bank debt. The Baa3 ratings on the existing revolver and term loan will be withdrawn upon closing of the financing transaction. Ratings Rationale: CoreLogic's Ba2 CFR reflects Moody's expectation that adjusted debt to EBITDA will drop to below 3 times by the end of 2014. The stable outlook considers Moody's view that CoreLogic's profits and cash flows will remain steady (e.g., annual free cash flow above $250 million) through 2014 and that financial policies will be disciplined until the acquisitions are well integrated. Despite the potential for a 20 to 30% decline in 2014 mortgage originations due to waning refinancing activity, Moody's expects CoreLogic to continue to improve its overall operating performance from the growth of data analytics (e.g., risk and fraud analytics) and ongoing market share shifts from in-house processors. The lowering of the senior unsecured notes rating reflects the higher relative proportion of senior secured debt in the capital structure given the proposed refinancing of the credit facilities (incremental secured debt of about $650 million upon close of the transaction). The SGL-2 rating incorporates the impact of increased acquisition spending on cash balances and revolver usage. Moody's expects cash to drop to around $100 million while revolver usage will increase to $375 million pro forma for the close of the acquisitions. The ratings could be upgraded if CoreLogic demonstrates organic revenue and earnings growth while improving leverage such that free cash flow to debt exceeds 20%, debt to EBITDA improves to the low 2 times level, and operating margins are sustained at over 20%. The ratings could be downgraded if CoreLogic experiences a decline in profitability, if adjusted debt to EBITDA exceeds mid 3x, or Moody's expects free cash flow to debt to decrease to less than 10% for an extended period of time. Ratings assigned: Revolving credit facility -- Ba1 (LGD 2, 27%) Term Loan A -- Ba1 (LGD 2, 27%) Ratings revised: Senior Notes due 2021 -- B1 from Ba3 (LGD 5, 86% from LGD 5, 80%) Speculative Grade Liquidity Rating -- SGL-2 from SGL-1 Ratings to be withdrawn: Senior Secured Revolving Credit Facility -- Baa3 (LGD 2, 20%) Senior Secured Term Loan -- Baa3 (LGD 2, 20%) Ratings unchanged: Corporate Family Rating -- Ba2 Probability of Default Rating -- Ba2-PD The rating outlook is stable. The principal methodology used in this rating was the Global Business & Consumer Service Industry Rating Methodology published in October 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. CoreLogic, Inc., with over $1.6 billion of projected annual revenues, is a leading provider of property and mortgage data and analytics products and solutions. The company provides mortgage risk tools and other analytical products; property and credit information; and outsourcing solutions for lenders. DETROIT, MI: Willing to Lift Restraining Order in Syncora Suit -------------------------------------------------------------- Hilary Russ, writing for Reuters, reported that the nearly bankrupt city of Detroit disclosed in a court filing on Monday that it agreed to dissolve a court order blocking bond insurer Syncora Guarantee from limiting the city's access to millions of dollars of monthly casino tax revenue. According to the report, the insolvent city sued Syncora earlier this month after the insurer allegedly told U.S. Bank, which controls the casino funds that were used as collateral in negotiations with creditors, not to release up to $11 million a month to Detroit, the suit claims. The city won a temporary restraining order that barred Syncora from interfering with Detroit's access to the revenue, the report said. Detroit and its state-appointed emergency manager, Kevyn Orr, notified Syncora on Friday that they were willing to lift the order, according to Monday's court filing, the report related. That same day, the city reached in principal "an important settlement" with unidentified creditors that is expected to be executed later on Monday, the city's court filing said, the report added. DETROIT, MI: Creditors Get New Worry in Alabama Fee Ruling ---------------------------------------------------------- Steven Church, writing for Bloomberg News, reported that Detroit bondholders may have a new worry after a judge ruled that Jefferson County, Alabama, could have paid legal bills for its bankruptcy from cash that was going to pay warrant holders owed $3 billion. According to the report, the ruling should concern bond investors whose revenue was previously protected from use by municipalities, said R. Dale Ginter, a bankruptcy lawyer at Downey Brand LLP in Sacramento, California. It may force those bondholders to reconsider waging an extensive legal fight to protect their interests, said Mr. Ginter, who represented retirees in the bankruptcy of Vallejo, California. "It puts a lot of leverage in favor of the debtor," Mr. Ginter said, the report cited. "It puts bondholders in the position of paying for both sides of their litigation." The ruling could apply to any municipal bankruptcy with debt being paid by pledged revenues such as parking fees, airport lease payments or water and sewer charges, Mr. Ginter said, the report related. Detroit is in talks to get bondholders and current and former city workers to accept $2 billion in exchange for wiping out the $11.5 billion they may be owed. Kevyn Orr, Detroit's emergency financial manager, said he may put the city into bankruptcy if they can't strike a deal. Detroit has about $5.4 billion worth of water and sewer bonds that Orr has said would be paid in full under the city's reorganization proposal, the report said. Orr, 55, is aware of the Alabama ruling and has no plans to dip into water and sewer funds to pay legal fees, Bill Nowling, his spokesman, said in an e-mail last week. DETROIT, MI: Pension Funds File Lawsuit to Block Bankruptcy ----------------------------------------------------------- The General Retirement System of the City of Detroit and the Police and Fire Retirement System of the City of Detroit on July 17 disclosed that they have initiated a civil action against City of Detroit Emergency Manager Kevyn Orr and Governor Rick Snyder in the Ingham County Circuit Court, Lansing, Michigan. In the suit, the Retirement Systems challenge the authority of the Emergency Manager and the Governor to authorize bankruptcy proceedings for the City of Detroit that would in any way impair the accrued financial benefits of the Retirement Systems' plan participants and beneficiaries, said benefits being protected by Article IX, Section 24 of the Michigan Constitution of 1963. By allowing any such impairment, the lawsuit asserts that the Emergency Manager and the Governor would be in violation of their respective oaths of office, which, pursuant to Article XI, Section 1 of Michigan's Constitution, require them to support and uphold the Michigan Constitution. The Retirement Systems remain fully committed to working cooperatively with the Emergency Manager in his efforts to address the financial condition of the City and have fully cooperated with the Emergency Manager and his team of professionals to date. However, the Trustees of the Retirement Systems are charged by law to make decisions and take appropriate actions that are solely in the best interests of the plan beneficiaries. The protections of Article IX, Section 24 of the Michigan Constitution represent the express will of the people of the State of Michigan and these protections cannot be subverted by a bankruptcy filing. "The recent statements regarding an imminent bankruptcy filing, as well as the filing approximately one week ago in Ingham County Circuit Court of similar claims, prompted the Retirement Systems to take more immediate action," said Ron King, a Clark Hill attorney representing both of the Retirement Systems. The Retirement Systems have asked the Court for a declaratory judgment that would prevent either the Emergency Manager or the Governor from taking any action which would contravene the protections of Article IX, section 24 of the Michigan Constitution. EAGLE RECYCLING: Cohnreznick LLP Approved as Financial Advisors --------------------------------------------------------------- The U.S. Bankruptcy Court authorized Eagle Recycling Systems to employ CohnReznick LLP as financial advisors. As reported by the Troubled Company Reporter on May 15, 2013, CohnReznick LLP is expected to among other things, provide these services: a) gain an understanding of the Debtors' corporate structure, related parties and status of books and records and reporting systems; b) assist the Debtors in the preparation of short and long term projections (Balance Sheet, Profit and Loss and Cash Flows) through analysis of historical financial statements and financial information, inquiries to management and analysis of historical information including the reasonableness of projected margins, accounts payable and expense levels, if necessary; and c) assist the Debtors in the preparation of a 13-week cash flow forecast and budget, and other similar financial documents or presentations as this case progresses. CohnReznick received a total retainer of $40,000 on account of such services from the Debtors during the prepetition period. CohnReznick billed the Debtors $21,249 for contemporaneous services rendered and disbursements and other charges incurred pre-petition (all in accordance with the terms and conditions of the Debtors' pre-petition engagement letter with CohnReznick dated April 14, 2013), leaving a balance of $18,751 to be utilized as a retainer for professional services rendered and charged and disbursements incurred by CohnReznick on the Debtors' behalf after the Petition Date. The firm attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Eagle Recycling Systems Eagle Recycling Systems and affiliate Lieze Associates Inc. sought Chapter 11 bankruptcy protection (Bankr. D.N.J. Case Nos. 13-18412 and 13-18413) on April 19, 2013, in Newark, New Jersey. Judge Rosemary Gambardella oversees the case. The Debtors have tapped CohnReznick LLP as financial advisors; and Vincent F. Papalia, Esq., at Saiber, LLC as counsel. The petition was signed by Jeffrey Marangi, authorized agent. The Debtor disclosed $7,683,092 in assets and $13,155,098 in liabilities as of the Chapter 11 filing. No committee has been appointed in the Chapter 11 cases. EAGLE RECYCLING: Saiber LLC Approved as Bankruptcy Counsel ---------------------------------------------------------- The U.S. Bankruptcy Court authorized Eagle Recycling Systems to employ Saiber LLC as counsel. As reported by the Troubled Company Reporter on May 15, 2013, Saiber commenced performing legal services for the Debtors in connection with the filing of the chapter 11 case in February 2013, and received a $50,000 retainer from Eagle Recycling in March 2013. On April 8 and 18, 2013, the total sum of $40,389 was applied against the initial retainer for prepetition services performed on behalf of the Debtors. Also on April 18, Saiber received an additional retainer of $50,000, plus $2,426 for filing fees ($1,213 each of the Debtors' respective Chapter 11 petitions), from Eagle Recycling. Saiber is currently holding $59,611 as retainer, which includes the remaining balance of $9,611 from the initial $50,000 retainer ($50,000 - $40,389 = $9,611), plus the $50,000 additional retainer received on April 18, 2013. This amount is held by Saiber in its attorney trust account as a retainer to be applied, subject to Court approval, to fees and expenses incurred subsequent to the Petition Date. The firm attests it is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Eagle Recycling Systems Eagle Recycling Systems and affiliate Lieze Associates Inc. sought Chapter 11 bankruptcy protection (Bankr. D.N.J. Case Nos. 13-18412 and 13-18413) on April 19, 2013, in Newark, New Jersey. Judge Rosemary Gambardella oversees the case. The Debtors have tapped CohnReznick LLP as financial advisors; and Vincent F. Papalia, Esq., at Saiber, LLC as counsel. The petition was signed by Jeffrey Marangi, authorized agent. The Debtor disclosed $7,683,092 in assets and $13,155,098 in liabilities as of the Chapter 11 filing. No committee has been appointed in the Chapter 11 cases. EAGLE RECYCLING: Scarinci Hollenbeck Okayed as Regulatory Counsel ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey authorized Eagle Recycling Systems, Inc. et al., to employ Scarinci Hollenbeck, LLC, as special counsel to perform regulatory and corporate legal services. According to the Debtors, for the last two years Scarinci Hollenback represented the Debtors in various matters involving the New Jersey Department of Environmental Protection, the United States Environmental protection Agency, the U.S. Occupational Safety and Health Administration, the Hudson County Regional Health Department and the Township of North Bergen in matters relating to the permitting and licensure necessary to operate the Solid Waste Transfer and Materials Recovery Facility (MRF), including obtaining the required Air permit for the MRF. To the best of the Debtors' knowledge, Scarinci Hollenback has no adverse interest. It is noted that Scarinci Hollenback was owed $65,195 on account of prepetition services. Scarinci received $42,427 prepetition. It also received a $30,000 retainer on April 16, 2013. About Eagle Recycling Systems Eagle Recycling Systems and affiliate Lieze Associates Inc. sought Chapter 11 bankruptcy protection (Bankr. D.N.J. Case Nos. 13-18412 and 13-18413) on April 19, 2013, in Newark, New Jersey. Judge Rosemary Gambardella oversees the case. The Debtors have tapped CohnReznick LLP as financial advisors; and Vincent F. Papalia, Esq., at Saiber, LLC as counsel. The petition was signed by Jeffrey Marangi, authorized agent. The Debtor disclosed $7,683,092 in assets and $13,155,098 in liabilities as of the Chapter 11 filing. No committee has been appointed in the Chapter 11 cases. EASTMAN KODAK: Gets Moody's B3 CFR After Emerging From Bankruptcy ----------------------------------------------------------------- Moody's Investors Service assigned a B3 Corporate Family Rating and B3-PD Probability of Default Rating to Eastman Kodak Company. Concurrently, Moody's assigned a B1 rating to the company's proposed $420 million first lien senior secured term loan and a B3 rating to the company's proposed $275 million second lien senior secured term loan. Proceeds from the term loans and the new $200 million asset-based liquidity ("ABL") revolving credit facility (unrated) are expected to be used to refinance the company's existing debtor-in- possession ("DIP") facilities and pay related expenses upon emergence from bankruptcy expected later this quarter. The rating outlook is stable. Moody's also assigned a SGL-2 liquidity assessment to the company indicating good liquidity. The following ratings have been assigned subject to the review of final documentation: Corporate Family Rating of B3 Probability of Default Rating of B3-PD $420 million first lien senior secured term loan B1 (LGD2-24%) $275 million second lien senior secured term loan B3 (LGD3-44%) Short Term Liquidity - SGL-2 The rating outlook is stable Ratings Rationale: The primary businesses of the reorganized Kodak will focus on serving customers in the commercial imaging and printing industries, while the Personalized Imaging and Document Imaging units are to be sold to Kodak's UK pension trustee as part of the Chapter 11 restructuring. Moody's believes that Kodak's reorganization around its core commercial imaging and printing businesses provide it with the most promising opportunity to resume revenue growth. However, the company's turnaround may be hampered if the new products and services do not replace the revenue and cash flow contribution of Kodak's end of life entertainment imaging and consumer ink-jet businesses. The uncertainty about the near-term outlook is clouded by the long-term challenges facing the company's major customers amid the ongoing decline of printed materials. Although the company improved its debt capital structure, as the Chapter 11 process eliminated about $3 billion of Kodak's pre-bankruptcy liabilities (including pension underfundings), there is limited visibility in whether the company has sufficiently stabilized its operations and cut expenses as part of its bankruptcy reorganization to stem further weakening of its financial condition. Moody's estimates Kodak's adjusted debt/EBITDA leverage to be about 9.7x immediately post-emergence, but that figure could drop over the next few years, as the surviving net pension liabilities fall away and the company further reduces its lease commitments. Moody's expects that Kodak will maintain a good liquidity profile during the next 12 to 18 months supported by high cash balances ($1.2 billion at March 31, 2013, although the substantial portion is outside of the US), modest cash flow from operations ("CFO"), the expectation that working capital swings will be managed prudently, and lack of near term debt maturities. The company will exit Chapter 11 with a $200 million ABL revolver. Moody's does not expect the ABL to be drawn, but expects it to be largely used to support the company's letters of credit issuance over time. Further, Moody's believes covenant headroom to the proposed covenants in the ABL revolving facility will be sufficient. The B1 rating on the proposed $420 million first lien senior secured term loan reflects both the overall probability of default of the company, to which Moody's assigns a Probability of Default Rating of B3-PD, and a loss given default of (LGD 2, 24%). The rating reflects its first priority lien on all property and assets (excluding current assets) and a second priority lien on all current assets securing Kodak's $200 million ABL revolver. The B3 rating on the proposed $275 million second lien senior secured term loan reflects its second priority lien on all property and assets (excluding current assets) and a third priority lien on all current assets securing the ABL. Further, the term loans benefit from upstream guarantees of the borrower's present and future direct and indirect domestic subsidiaries and pledge of stock of international subsidiaries. The ratings assigned to the instruments are one notch lower than the output of Moody's Loss Given Default Model. This is because using the expected post- emergence pension fund obligation provides rating uplift to the secured debt, and Moody's expects the company's pension obligation will decline substantially from a combination of plan assets growing faster than pension liabilities, as well as the likely increase in the discount rate used to calculate the liabilities. The stable outlook reflects Moody's expectation that Kodak's operating performance will improve modestly following its emergence from bankruptcy despite the prospect for further revenue declines in 2013. To be upgraded, Kodak will need to generate revenue growth, with healthy conversion to free cash flow, and demonstrate propensity for further deleveraging such that adjusted debt/EBITDA falls below 5.5 times on a consistent basis and that EBIT margins are sustained above 4%. Kodak's ratings could be downgraded if further execution of its turnaround plan is not successful, its new product initiatives do not gain traction resulting in further deterioration in revenue and profitability, leading to persistent negative free cash flow, EBIT margins fail to be sustained above 2%, or debt-to-EBITDA exceeds 6.5 times. The principal methodology used in this rating was Global Technology Hardware 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. Eastman Kodak Company, based in Rochester, NY, provides printing and imaging technology products and services to commercial printing, digital printing, packaging and entertainment imaging markets. EDISON MISSION: Tyche Dispute to Stay in Bankruptcy --------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that power producer Edison Mission Energy persuaded the bankruptcy court in Chicago to decide a dispute with Tyche Power Partners LLC over the 2002 purchase of the Brooklyn Navy Yard cogeneration project. When the $42 million sale was completed, $23.3 million was set aside in an escrow to cover liability that EME might have to Tyche for violation of representations in the sale agreement. At present, about $4 million remains in escrow. The report notes Tyche claims there were misrepresentations about state use taxes allowing it to draw on the escrow account. After filing for Chapter 11 reorganization in December, EME sued Tyche to recover the escrow, contending there is no liability. U.S. Bankruptcy Judge Jacqueline P. Cox wrote an eight-page opinion concluding that the dispute must remain in bankruptcy court because Tyche filed a claim. She said the Tyche claim to the escrow should be resolved in bankruptcy court like every other claim in the case. The report notes Tyche had wanted Cox to force Santa Ana, California-based EME into a lawsuit in New York state court over the escrow account. About Edison Mission Santa Ana, California-based Edison Mission Energy is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME also engages in hedging and energy trading activities in power markets through its subsidiary Edison Mission Marketing & Trading, Inc. EME was formed in 1986 and is an indirect subsidiary of Edison International. Edison International also owns Southern California Edison Company, one of the largest electric utilities in the United States. EME and its affiliates sought Chapter 11 protection (Bankr. N.D. Ill. Lead Case No. 12-49219) on Dec. 17, 2012. EME has reached an agreement with the holders of a majority of EME's $3.7 billion of outstanding public indebtedness and its parent company, Edison International EIX, that, pursuant to a plan of reorganization and pending court approval, would transition Edison International's equity interest to EME's creditors, retire existing public debt and enhance EME's access to liquidity. The Company's balance sheet at Sept. 30, 2012, showed $8.17 billion in total assets, $6.68 billion in total liabilities and $1.48 billion in total equity. In its schedules, Edison Mission Energy disclosed total assets of assets of $5,721,559,170 and total liabilities of $6,202,215,094 as of the Petition Date. Kirkland & Ellis LLP is serving as legal counsel to EME, Perella Weinberg Partners, LP is acting as financial advisor and McKinsey Recovery & Transformation Services U.S., LLC is acting as restructuring advisor. GCG, Inc., is the claims and notice agent. An official committee of unsecured creditors has been appointed in the case and is represented by the law firms Akin Gump and Perkins Coie. The Committee also has tapped Blackstone Advisory Partners as investment banker and FTI Consulting as financial advisor. EME said it doesn't plan to emerge from Chapter 11 until December 2014 to receive benefits from a tax-sharing agreement with parent Edison International Inc. ENDICOTT INTERCONNECT: Arranging Sale to Minority Shareholder ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Endicott Interconnect Technologies Inc., a producer of printed circuit boards and advanced flip chips, submitted papers July 15 setting up an auction where the business will be sold for $250,000 cash absent a better offer. According to the report, the purchase offer comes from a company owned by minority shareholder James T. Matthews. In addition to the cash, he will assume a $6.1 million secured term loan of which he is already the owner. There is about $10 million owing on two other secured loans. There will be a hearing on July 25 in U.S. Bankruptcy Court in Utica, New York, for approval of sale procedures. The company wants competing bids by Aug. 15, followed by an Aug. 19 auction and a hearing on Aug. 20 for approval of sale. The report notes that on filing for Chapter 11 protection, Endicott said it needed to sell before cash runs out by the end of September. About Endicott Endicott Interconnect Technologies Inc., filed a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 13-bk-61156) in Utica, New York on July 10, 2013, to sell the business before cash runs out by the end of September. Based in Endicott, New York, and formed in 2002, EIT is the successor to the microelectronics division of IBM Corp. The products are used in aerospace, defense and medication applications, among others. The company sought Chapter 11 bankruptcy protection after suffering $100 million in operating losses in the last four years. In addition to $16 million in secured claims, trade suppliers are owed $34 million. There is another $32 million owing for loans made by shareholders. The company said the book value of property is $36 million. EVERGREEN OIL: Schedules Aug. 14 Confirmation Hearing ----------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Evergreen Oil Inc., a waste oil collector and re- refiner, won bankruptcy court approval last week for a disclosure statement explaining a reorganization plan whereby Clean Harbors Inc. will buy the business unless outbid at auction. According to the report, creditors can now vote on the plan. The confirmation hearing for approval of the plan will take place on Aug. 14 in U.S. Bankruptcy Court in Santa Ana, California. Unless outbid, Clean Harbors will pay $60 million plus the value of accounts receivable, estimated to be $4.5 million. Evergreen creditors will retain lawsuits to provide additional funds for distribution. The report notes that the plan entails distributing sale proceeds and other assets in the order of priority called for in bankruptcy law. The secured lender with first call on proceeds is Guggenheim Corporate Funding LLC, as agent, owed $66.2 million. Unsecured creditors have no guaranteed recovery. The papers say they will receive what's left, if anything, after creditors with higher priority are paid, including Guggenheim. Plan Support Agreement Evergreen Oil, Inc., and Evergreen Environmental Holdings, Inc., ask the U.S. Bankruptcy Court for the Central District of California to enter an order authorizing the Debtors and other parties thereto to enter into a Plan Support Agreement. Briefly, the Plan Agreement provides for Clean Harbors, Inc., or its designee to sponsor the Joint Plan of Reorganization dated June 19, 2013, filed by the Debtors to, among other things, consummate the sale of EEHI's stock in EOI to Clean Harbors or to a successful overbidder and implement the financial restructuring of the Debtors' indebtedness and other obligations in accordance with the terms set forth in the Plan Agreement. The cash and other consideration to be paid by Clean Harbors (or a successful overbidder) for the acquisition of the Evergreen Stock (the "Buyer Payment") will be used to pay EOI's creditors in accordance with the terms of the Plan. As evidenced by the Plan Agreement, the Debtors, Clean Harbors and Guggenheim Corporate Funding, LLC, individually and as administrative agent for the Lenders have agreed upon the material terms the Plan. Pursuant to the Plan Agreement, among other things, the Debtors are required to obtain entry of a Court order approving the Plan Agreement on or before July 11, 2013 (or such later date as may be acceptable to each of Clean Harbors and Guggenheim in each of their respective sole discretion). Furthermore, the Plan Agreement obligates the Debtors to obtain an order approving the Disclosure Statement on or before July 11, 2013 (or such later date as may be acceptable to each of Clean Harbors and Guggenheim in each of their respective sole discretion) as well as an order confirming the Plan on or before Aug. 15, 2013 (or such later date as may be acceptable to each of Clean Harbors and Guggenheim in each of their respective sole discretion). A copy of the Plan Agreement is available at: http://bankrupt.com/misc/evergreenoil.doc178.pdf As reported in the TCR on July 16, 2013, Evergreen Environmental Holdings and Evergreen Oil filed with the U.S. Bankruptcy Court for the Central District of California on July 12, 2013, a Second Amended Disclosure Statement describing the Debtors' Second Amended Joint Plan of Reorganization dated July 11, 2013. The Plan Confirmation Hearing will take place on Aug. 14, 2013, at 10:00 a.m. The Voting Deadline is 5:00 p.m. on July 31, 2013. Objections to the confirmation of the Plan must be filed with the Court by July 31, 2013. Pursuant to the Second Amended Plan, the Debtors' primary creditor Guggenheim Corporate Funding, owed $66,242,734, will receive Cash from available funds up to the amount of the allowed lenders' secured claim. To the extent available funds are insufficient to pay the allowed lenders' secured claim in full, Guggenheim will retain its Lien on the assets, and will receive any proceeds of such assets received by the Debtors on account thereof until the allowed lenders' secured claim is paid in full. Each holder of an Allowed Class 7 General Unsecured Claims will receive its pro rata share of the Creditor Fund, if any, remaining after the payment of Allowed Class 4 Mechanics' Lien Claims, Allowed Class 5 Other Secured Claims, and Allowed Class 6 Priority Non-Tax Claims, on the later of (1) the Effective Date and (2) the date upon which such claim becomes an Allowed Class 7 Allowed General Unsecured Claim by Final Order of the Bankruptcy Court in an amount equal to such Allowed Class 7 General Unsecured Claim. On the Effective Date, all of the Allowed Interests in EEHI will be canceled and the holders of Allowed Interests in EEHI will neither receive nor retain any property on account of such Interests. The Buyer, in exchange for the Buyer Payment, will receive the Evergreen Stock upon the Effective Date from EEHI. The Evergreen Stock will not be cancelled, and all rights associated with the Evergreen Stock will not be altered in any way by the Plan. EEHI, as the seller of the Evergreen Stock, will not receive any of the Buyer Payment or any other consideration on account of its Interests. A copy of the Second Amended Disclosure Statement is available at: http://bankrupt.com/misc/evergreenoil.doc250.pdf Disclosure Objections Prior to the hearing on the Disclosure Statement, the Official Committee of Unsecured Creditors and Bank of the West lodged objections to the adequacy of the information in the Disclosure Statement. The Committee cited: 1. There is insufficient information regarding the value of Evergreen's various assets, the proposed allocation of the sale price among those assets and the potential marshaling issues pertaining thereto. 2. In view of the fact that the Plan includes a provision for termination of the Committee upon confirmation, creditors are entitled to know who will be looking out for their interests post- confirmation and how their interests will continue to be protected. 3. Alternatives to the Plan are inadequately described. 4. The Disclosure Statement contains no provision for investigation or prosecution of potential avoiding power claims under Chapter 5 of the Bankruptcy Code. 5. There is no information relating to insider claims. Insiders Evergreen Holdings and Chemical Engineering Partners' purported claims, in the respective amounts of $8.27 million and $583 are treated under the Plan as allowed general unsecured claims without objection. The Committee believes unsecured creditors are entitled to more detailed information why these substantial claims are entitled to be treated on a parity with trade debt and why potential objections thereto might not be appropriate. 6. There is no mention of the fire loss claim in the Disclosure statement, let alone a discussion of the likelihood of any recovery on this potential substantial claim. There is also no information provided as to the large tax refund Evergreen has previously disclosed that it anticipates receiving. Bank of the West, a secured creditor of Evergreen Oil, pursuant to a prepetition letter of credit issued by BOTW in the face amount of $4,951,113, also objected to the Disclosure Statement saying that the Debtor has not accurately described its unique position as a secured creditor of the Debtor, and has not adequately described its treatment under the Plan. Counsel for the Committee can be reached at: Alan I. Nahmias, Esq. Russell H. Rapoport, Esq. MIRMAN, BUBMAN & NAHMIAS, LLP 21860 Burbank Boulevard, Suite 360 Woodland Hills, CA 91367 Tel: (818) 451-4600 Fax: (818) 451-4620 Counsel for Bank of the West can be reached at: William B. Freeman, Esq. Jennifer K. Brooks, Esq. KATTEN MUCHIN ROSENMAN LLP 515 S. Flower Street, Suite 1000 Los Angeles, CA 90071-2212 Tel: (213) 788-7445 Fax: (213) 788-7380 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: U.S. Trustee Adds Robinson Oil to Committee ---------------------------------------------------------- U.S. Trustee Peter C. Anderson notified the Bankruptcy Court that Evergreen Oil Inc.'s Committee of Creditors Holding Unsecured Claims has been amended to remove Versa Engineering & Technology, Inc. and to add Robinson Oil Corp. The five-member Creditors Committee now consists of: 1. Petroleum Insulation, Inc. Attn: Stephen Louis 110 Corporate Place Vallejo, CA 94590 Tel: (707) 644-7455 OR Rebecca Lessley, Esq. 215 N. Marengo Ave., 3rd Fl. Pasadena, CA 91101 Tel: (626) 578-1983 2. Telstar Instruments Attn: Stephen F. White 955 Martin Ave. Santa Clara, CA 95050 Tel:(408) 327-4312 3. Mashburn Transportation Services, Inc. Attn: Michael Mashburn PO Box 66 Taft, CA 93268 Tel: (661) 763-5724 4. People Core, Inc. Attn: Edward Topollewski Kline & Topolewski, PC 1601 Market St., #2600 Philadelphia, PA 19103 Tel: (201) 805-6498 5. Robinson Oil Corp. Attn: Stephen F. White 955 Martin Ave. Santa Clara, CA 95050 Tel: (408) 327-4312 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: Plan Disclosure Hearing Set for Sept. 30 -------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Excel Maritime Carriers Ltd., the operator of 38 dry- bulk vessels, filed a Chapter 11 plan on July 15 to implement a reorganization worked out before a July 1 bankruptcy filing. According to the report, technically speaking, the plan will give ownership to secured lenders owed $771 million, although the lenders will allow current owner Gabriel Panayotides to keep control, at least initially. Unsecured creditors with claims totaling $163 million will receive a $5 million, eight percent note for a predicted recovery of 3 percent. Holders of $150 million in unsecured convertible notes make up the bulk of the unsecured-claim pool. The report notes that unsecured creditors are to receive the note only if the class votes in favor of the plan. An ad hoc group among holders of the convertible notes already said the plan is "inappropriate and unconfirmable." They oppose the idea of allowing Panayotides to have the exclusive right to "buy back" the Athens-based company while giving a "nominal distribution" to unsecured creditors. Excel filed an explanatory disclosure statement to explain the plan. If the bankruptcy court in Manhattan approves disclosure materials at a Sept. 30 hearing, secured and unsecured creditors can begin voting on the plan. The report relates that trade suppliers owed $16.5 million will be paid in full in the ordinary course of business to avoid having the vessels seized, the company previously said. In addition to the stock, the plan gives secured lenders new restructured secured notes for $771 million. Outside the plan, the lenders will allow Mr. Panayotides to buy 60 percent of the stock from them for a $10 million unsecured note and the turnover to the company of a $20 million escrow account. He will have the right to buy another 15 percent by March 2015 for $20 million. If he doesn't buy the additional stock, the lenders' equity ownership will rise to 75 percent. Mr. Panayotides will control a majority of the board initially. If he doesn't buy the additional stock, he loses control. If he purchases the additional stock, the new notes will mature in 2018. Otherwise, they mature a year earlier. The report discloses that Excel believes the company's enterprise value ranges from $575 million to $625 million, with a midpoint of $600 million. The midpoint value is how the disclosure statement arrives at a 77 percent recovery for secured creditors. According to the disclosure statement, the new stock going to the lenders has "option value only." 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. FERRAIOLO CONSTRUCTION: Committee Objects to Disclosure Statement ----------------------------------------------------------------- The Official Committee of Unsecured Creditors of Ferraiolo Construction, Inc., objects to the approval of the disclosure statement describing the Debtor's Plan of Reorganization dated June 7, 2013. The Committee says the Disclosure Statement's deficiencies prevent a hypothetical investor typical of the holders of claims in this case from making an informed judgment about the Plan: 1. The method of calculating BOM's deficiency claim is contrary to the Code [Disclosure Statement, p. 15]. Without properly calculating BOM's deficiency claim, the balance of the unsecured creditors are not "clearly and succinctly inform[ed about] . . . what [they are] going to get, when [they are] going to get it, and what contingencies there are to getting [their] distribution." See In re Ferretti, 128 B.R. 16, 19 (Bankr. D. N.H. 1991). 2. The Disclosure Statement provides only that "the Debtor shall issue new shares in the Debtor for 100% ownership of the Debtor to one or more persons, in exchange for new value." [Disclosure Statement, p. 22] (emphasis supplied). Regardless of BOM's commitment to vote in favor of the Plan pursuant to the Plan Support Agreement, the Debtor should describe with precision the source, amount, and proposed use of the "new value," along with the process it intends to employ to satisfy LaSalle [Bank of Am. Nat. Trust & Sav. Ass'n v. 203 N. LaSalle St. P'ship, 526 U.S. 434 (1999). 3. The Disclosure Statement describes a Plan which improperly classifies BOM's deficiency claim together with the claims of the general unsecured creditors, despite BOM having guarantees from insiders for its debt. 4. The Disclosure Statement does not properly determine if the current Plan serves the best interests of general unsecured creditors by, inter alia, failing to explain why the Debtor considers the value of the Chapter 5 causes of actions and the claims against shareholders to be of "de minimis" value [Disclosure Statement, p. 13] and taking questionable deductions. 5. The Disclosure Statement provides that the Debtor may assume or reject executory contracts after the confirmation date of the Plan. The Debtor should modify the Plan and Disclosure Statement to reflect the requirement of Section 365(d)(2) that executory contracts must be assumed or rejected "before the confirmation of a plan." Further, the Committee says the Disclosure Statement also fails to provide "adequate information" as required by 11 U.S.C. Sec. 1125. The Committee objection was filed by: Nathaniel R. Hull, Esq. VERRILL DANA LLP One Portland Square P.O. Box 586 Portland, ME 04112-0586 Tel: (207) 774-4000 Fax: (207) 774-7499 E-mail: nhull@verrilldana.com bankr@verrilldana.com Bank of Maine's Limited Objection The Bank of Maine objects, on a limited basis, to the approval of the Disclosure Statement. The Bank noted that the Disclosure Statement describes the Plan Support Agreement in considerable detail, but such description is incomplete in one material respect. The Disclosure Statement does not reveal that the Debtor has breached the Plan Support Agreement as it relates to certain funds being held by a surety as collateral. According to the Bank, with respect to those funds, the Plan Support Agreement provides that "[w]ithin three (3) days after the entry of an order approving the [Plan Support Agreement], [the Debtor] shall cause $187,000 to be transferred into the Bonding Escrow Account." The Bankruptcy Court entered an order approving the Plan Support Agreement on May 2, 2013. Nearly two months later, as of July 1, 2013, the Debtor had not caused $187,000 to be transferred into the Bonding Escrow Account. Thus, the Debtor is in default of the Plan Support Agreement and creditors being asked to vote on the Plan should be told of that fact. Counsel for the Bank of Maine can be reached at: Michael A. Fagone, Esq. BERNSTEIN SHUR 100 Middle Street, PO Box 9729 Portland, ME 04104-5029 Tel: (207) 774-1200 E-mail: mfagone@bernsteinshur.com - and - Jay S. Geller, Esq. LAW OFFICE OF JAY S. GELLER One Monument Way, Suite 200 Portland, ME 04101 Tel: (207) 899-1477 E-mail: jgeller@maine.rr.com As reported in the TCR on July 1, 2013, the U.S. Bankruptcy Court for the District of Maine will convene a hearing on July 18, 2013, at 10 a.m., to consider the adequacy of the Disclosure Statement explaining Ferraiolo Construction's Plan of Reorganization dated June 7, 2013. Objections, if any are due July 8. According to the Disclosure Statement, the Plan provides for the settlement and satisfaction by the Debtor of all Classes of Claims identified in the Plan in the amounts and over the timeframes. The thrust of the Debtor's plan is a reorganization around a streamlined business model that sheds unprofitable business assets and retains core assets and business] lines. To achieve the goal, and to satisfy its prepetition creditors, the Debtor will be liquidating certain assets at an auction, and using the proceeds of the auction to fund payments to both secured and unsecured creditors. The property to be sold at the auction includes a variety of rolling stock, i.e. trucks, equipment, mixers, etc., all of which is identified, in detail. In addition to the satisfaction and restructuring of the Debtor's debts and obligations, the Debtor's Plan will permit the continued employment of approximately 35 employees in the greater Rockland area of Maine. While Rockland is generally a prosperous area, the Debtor believes that jobs in the construction industry are an important component of the local economy and provide not only a valuable service for the mid-coast area but also offer a career path other than in the service-sector. Further, the Debtor, as reorganized, will expend over $3 million per year, much of it in the local economy, to purchase materials and supplies from some local vendors and to pay salaries for local employees. A copy of the Disclosure Statement is available for free at http://bankrupt.com/misc/FERRAIOLO_CONSTRUCTION_ds.pdf About Ferraiolo Construction Headquartered in Rockland, Maine, Ferraiolo Construction Inc., fka Ferraiolo Precast, Inc., Ferraiolo Corp., and Ferraiolo Real Estate Company, Inc., is a corporation engaged in the businesses of road construction and commercial construction site work, sale of asphalt and concrete products, and related businesses. It owns multiple parcels of real estate as well as machinery and equipment, that it uses to manufacture gravel, precast concrete forms and other items utilized in the construction business. It became the successor by merger with two affiliates, Ferraiolo Precast, Inc., and Ferraiolo Corp., each of which was engaged in a unified and integrated business enterprise with the Debtor. The Debtor filed for Chapter 11 protection (Bankr. D. Maine Case No. 13-10164) on March 13, 2013, in Bangor, Maine, after the Bank of Maine sent notices telling the Debtor's customers to send their payments to the bank. In its Petition, the Debtor estimated $10 million to $50 million in assets and $10 million to $50 million in debts. Judge Louis H. Kornreich presides over the case. Andrew Helman, Esq., David C. Johnson, Esq., and George J. Marcus, Esq., at Marcus, Clegg & Mistretta, P.A., serve as bankruptcy counsel for the Debtor. The petition was signed by John Ferraiolo, president and treasurer. Nathaniel R. Hull, Esq., Roger A. Clement, Jr., Esq., and Christopher S. Lockman, Esq., at Verrill Dana, LLP, represent the official Committee of Unsecured Creditors. FERRAIOLO CONSTRUCTION: Hiring Hichar & Luca as Accountants ----------------------------------------------------------- Ferraiolo Construction, Inc., asks the U.S. Bankruptcy Court for the District of Maine for authorization to employ Hichar & Luca, Inc., and Thomas F. Huchar, C.P.A., M.S.T., to provide accounting services to the Debtor. The professional services Hichar is to render include, without limitation, the following: a. Preparation of the Debtor's 2012 state and federal tax returns, in addition to any other filings necessary to the Debtor; b. Preparation of a review of the Debtor's 2012 financial statements; and c. Advising Debtor and bankruptcy counsel on tax and accounting procedures and strategies that will best benefit the Debtor and the estate. To the best of the Debtor's knowledge, Hichar is a "disinterested person" at that term is defined in Section 101(14) of the Bankruptcy Code. As compensation for its services, Hichar will be charging a total fee of $21,000: $12,000 for preparation of the Debtor's 2012 federal and state tax returns and $9,000 to conduct the review of the Debtor's financial statements. The application was submitted by: George J. Marcus, Esq. Jennie L. Clegg, Esq. David C. Johnson, Esq. Andrew C. Helman, Esq. MARCUS, CLEGG & MISTRETTA, P.A. One Canal Plaza, Suite 600 Portland, ME 04101 Tel: (207) 828-8000 Attorneys for the Debtor About Ferraiolo Construction Headquartered in Rockland, Maine, Ferraiolo Construction Inc., fka Ferraiolo Precast, Inc., Ferraiolo Corp., and Ferraiolo Real Estate Company, Inc., is a corporation engaged in the businesses of road construction and commercial construction site work, sale of asphalt and concrete products, and related businesses. It owns multiple parcels of real estate as well as machinery and equipment, that it uses to manufacture gravel, precast concrete forms and other items utilized in the construction business. It became the successor by merger with two affiliates, Ferraiolo Precast, Inc., and Ferraiolo Corp., each of which was engaged in a unified and integrated business enterprise with the Debtor. The Debtor filed for Chapter 11 protection (Bankr. D. Maine Case No. 13-10164) on March 13, 2013, in Bangor, Maine, after the Bank of Maine sent notices telling the Debtor's customers to send their payments to the bank. In its Petition, the Debtor estimated $10 million to $50 million in assets and $10 million to $50 million in debts. Judge Louis H. Kornreich presides over the case. Attorneys at Marcus, Clegg & Mistretta, P.A., serve as bankruptcy counsel for the Debtor. The petition was signed by John Ferraiolo, president and treasurer. Nathaniel R. Hull, Esq., Roger A. Clement, Jr., Esq., and Christopher S. Lockman, Esq., at Verrill Dana, LLP, represent the official Committee of Unsecured Creditors. FIRST STREET: Court Okays Compromise with Lenders, Choo ------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California entered on June 6, 2013, an order granting the motion to approve compromise of controversy and for conditional dismissal of First Street Holdings NV, LLC, et al.'s cases. The court approved: -- The Lender Parties Settlement Agreement: The Settlement Agreement and General Release between MS Mission Holdings, LLC, JP Capital, LLC, and Peninsula Towers, LLC , on the one hand, and Debtors Sixty-Two First Street, LLC, 78 First Street, LLC, 88 First Street, LLC, 518 Mission Street, LLC, and First/Jessie, LLC, First Street Holdings, LLC and Lydian SF Holdings, LLC , as well as non-debtors H. David Choo, Lydian, LLC, a Colorado limited liability company, Lydian II, LLC, a Colorado limited liability company, Anna Choo Chung as the trustee of the H. David Choo Irrevocable Trust dated December 20, 2005, the Aeolian Trust dated January 6, 2003, the Hyesung Choo Irrevocable Trust dated December 20, 2005, and Marcus Heights, LLC, a California limited liability company, on the other hand. -- The Omnibus Agreement: The Omnibus Release and Assignment Agreement between FM Owner LLC, on the one hand, and the Debtors, H. David Choo, and Marcus Heights, on the other hand. -- Choo Agreement: the Separate Agreement between FM Owner LLC, on the one hand, and H. David Choo, on the other hand. All transactions contemplated by or under the agreements are approved, and the Debtors, H. David Choo, and all related entities (including, but not limited to, Marcus Heights) are authorized and directed to execute and deliver any further documents and instruments as may be reasonably required to consummate those transactions. A copy of the order is available at: http://bankrupt.com/misc/firststreet.doc317.pdf About First Street Holdings NV First Street Holdings NV, LLC, and Lydian SF Holdings, LLC, filed for Chapter 11 bankruptcy (Bankr. N.D. Calif. Case Nos. 11-49300 and 11-49301) on Aug. 30, 2011, before Judge Roger L. Efremsky. Debtor-affiliates 78 First Street, LLC, 88 First Street LLC, 518 Mission, LLC, First/Jessie LLC, JP Capital, LLC, Peninsula Towers LLC, and Sixty-Two First Street LLC (Bankr. N.D. Calif. Case Nos. 11-70224, 11-70228,, 11-70229, 11-70231, 11-70232, 11-70233 and 11-70234) filed for Chapter 11 bankruptcy on Sept. 23, 2011. The Law Office of Julian Bach represents the Debtors as Chapter 11 counsel. Robert G. Harris, Esq., and Wendy W. Smith, Esq., at Binder & Malter, LLP represent the Debtors as Special Appellate Counsel. The Law Offices of Michael Brooks Carroll is special litigation counsel for certain debtors in adversary proceeding and related pending federal appeal. Colliers Parrish International Inc. serves as appraiser to value certain real properties and other assets held by the Debtors. The cases are jointly administered under Lead Case No. 11-49300. Investor David Choo is associated with CMR Capital, LLC, the manager of the Debtors. Debtors First Street Holdings NV, LLC, Lydian SF Holdings, LLC, 78 First Street, LLC, 88 First Street, LLC, 518 Mission, LLC, First/Jessie, LLC, Sixty-two First Street, LLC, Peninsula Towers, LLC, and JP Capital, LLC; and David Choo, individually, filed a combined joint plan and disclosure statement with the Bankruptcy Court. The Joint Plan, dated Nov. 29, 2011, provided for the payment of all of their secured, administrative, priority and general unsecured claims in full. Interests in the Debtors would be retained without modification. In December 2011, the bankruptcy court held that the First Street Parties had not proven that they had a reasonable possibility of an effective reorganization within a reasonable time. The court noted the proposed plan likely qualified as a negative amortization plan, which would be difficult to confirm under the best of circumstances. The court also noted that the Properties as of the time of the hearing did not generate enough monthly rents to pay monthly operating expenses and property taxes. The court also doubted that the First Street Parties could raise sufficient plan funding, as they had proposed, by renting out additional available space in the buildings on the Properties. FRANKLIN PIERCE: S&P Lowers Rating on Debt to 'B'; Outlook Stable ------------------------------------------------------------------ Standard & Poor's Rating Services said it lowered by three notches, to 'B' from 'BB' its rating on New Hampshire Health & Educational Facilities Authority's debt, issued for Franklin Pierce University (FPU). The outlook is stable. "The multinotch downgrade reflects the university's poor financials, weakened enrollment profile, increased discounting, and very small endowment, which have placed a significant amount of stress on the university over the past few years leaving limited flexibility to withstand any adverse changes," said Standard & Poor's credit analyst Margaret McNamara. The rating action also reflects the university's heavy reliance on a line of credit for cash flow which is on a six-month renewal cycle, a one- time 32% draw on the endowment to fund capital needs in fiscal 2012, which stresses the university's already-slim liquidity, and management's indication that it may violate the net assets-to-debt ratio in fiscal 2013. The rating reflects the university's: -- Very low expendable resources, equal to 14.9% of operating expenses and 20.1% of debt; -- Two years of operating deficits on a generally accepted accounting principles basis, with the expectation for a similar deficit in fiscal 2013; -- Weak demand and enrollment profile with several years of declining headcount, although the fall 2012 freshmen class increased after tuition discounting; -- Significant debt ($49 million) relative to endowment (about $6.4 million); -- Limited financial flexibility given the high level of dependence on tuition and fees and fixed operating costs; and -- Long-term reliance on working capital notes for seasonal cash flow. Rating factors that offset the university's credit weaknesses include: -- A manageable debt burden at 4.4%; and -- A sizable increase in freshmen applications in fall 2012, coupled with a growing freshmen class and management's expectation for continued improvement for fall 2013. FPU, founded in 1962, is a small, private, coeducational, nonsectarian university. FPU's curriculum is a blend of traditional liberal arts, pre-professional studies, and teacher preparation programs. GETTY PETROLEUM: Enters Into Settlement Agreement with Lukoil ------------------------------------------------------------- Getty Realty Corp. on July 17 disclosed that the parties in the adversary proceeding brought in the United States Bankruptcy Court, Southern District of New York, by the Getty Petroleum Marketing Inc. Trust, as Plaintiff, against Lukoil Americas Corporation, Lukoil North America LLC, OAO Lukoil, and certain directors and officers of Getty Petroleum Marketing Inc., as Defendants, based on claims, among others, of fraudulent conveyance and breach of the fiduciary duties, have agreed upon a settlement. The terms of the settlement include a release of the Defendants from the claims alleged by the Plaintiff in its complaint and a collective payment by or on behalf of the Defendants to the Plaintiff of $93 million. As previously disclosed by the Company, pursuant to a litigation funding agreement between the Company and the GPMI Liquidating Trust, the Company has been funding the Plaintiff's prosecution costs for the Lukoil Lawsuit, as well as certain expenses incurred by the GPMI Liquidating Trust in connection with the wind-down of its estate. The Litigation Funding Agreement provides that the Company is entitled to receive proceeds from the successful prosecution of the Lukoil Lawsuit (including by way of settlement) in an amount equal to the sum of (i) all funds advanced for wind- down costs and expert witness and consultant fees plus interest on such advances; (ii) the greater of all funds advanced for legal fees and expenses relating to the prosecution of the litigation plus interest on such advances or 24% of the gross proceeds from the settlement; and (iii) reimbursement of certain additional legal fees incurred by Getty in connection with the Litigation Funding Agreement. In addition to its claims under the Litigation Funding Agreement, the Company also has an unrecovered balance on its priority administrative claim plus accrued interest thereon and a significant unsecured claim for which it will receive its pro rata share of any remaining proceeds of the settlement that are distributed to unsecured creditors. The $93 million settlement payment to the GPMI estate is conditioned, among other things, on approval by the Bankruptcy Court and may be subject to objections by creditors or other parties in interest. A hearing to consider the settlement and any objections thereto has been scheduled for July 29, 2013. The Bankruptcy Court's decision as to the settlement is anticipated to be rendered soon after the hearing. If the Bankruptcy Court approves the settlement, the Company would realize initial cash proceeds from the settlement aggregating approximately $32 million, based on the return under the Litigation Funding Agreement and payment of its remaining priority administrative claim, plus additional distributions the Company may receive from the GPMI estate for its pro-rata share of the remainder of the settlement amount available to satisfy unsecured claims. About Getty Petroleum A remnant of J. Paul Getty's oil empire, Getty Petroleum Marketing markets gasoline, hydraulic fluids, and lubricating oils through a network of gas stations owned and operated by franchise holders. A former subsidiary of Russian oil giant LUKOIL, the company operates in the Mid-Atlantic and Northeastern US states. Getty Petroleum Marketing's primary asset is the more than 800 gas stations in the Mid-Atlantic states which are located on properties owned by Getty Realty. After scaling back the company's operations to cut debt, in 2011 LUKOIL sold Getty Petroleum Marketing to investment firm Cambridge Petroleum Holding for an undisclosed price. Getty Petroleum and three affiliates filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case Nos. 11-15606 to 11-15609) on Dec. 5, 2011. Judge Shelley C. Chapman presides over the case. Loring I. Fenton, Esq., John H. Bae, Esq., Kaitlin R. Walsh, Esq., and Michael J. Schrader, Esq., at Greenberg Traurig, LLP, in New York, N.Y., serve as the Debtors' counsel. Ross, Rosenthal & Company, LLP, serves as accountants for the Debtors. Getty Petroleum Marketing, Inc., disclosed $46.6 million in assets and $316.8 million in liabilities as of the Petition Date. The petition was signed by Bjorn Q. Aaserod, chief executive officer and chairman of the board. The Official Committee of Unsecured Creditors is represented by Wilmer Cutler Pickering Hale and Dorr LLP. Alvarez & Marsal North America, LLC, serves as the Committee's financial advisors. GGW BRANDS: Trustee Deal Reduces Wynn's $31MM Claims ---------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that the trustee overseeing the bankruptcy of the company that produces "Girls Gone Wild" videos secured a settlement Monday with casino giant Steve Wynn that will reduce his $31 million in claims against the estate by 10 percent. According to the report, GGW Brands LLC trustee R. Todd Neilson said in court papers that the deal will allow the company, known for its adult videos capturing the raunchy adventures of college- aged women on their spring breaks, to avoid expensive litigation with Wynn. About GGW Brands Santa Monica, California-based GGW Brands, LLC, the company behind the "Gils Gone Wild" video, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-15130) on Feb. 27, 2013. Judge Sandra R. Klein oversees the case. The company is represented by the Law Offices of Robert M. Yaspan. The company disclosed $0 to $50,000 in estimated assets and $10 million to $50 million in estimated liabilities in its petition. Affiliates GGW Events LLC, GGW Direct LLC and GGW Magazine LLC also sought Chapter 11 protection. In April 2013, R. Todd Neilson, an ex-FBI agent, was appointed as Chapter 11 Trustee to take over the companies. Mr. Neilson has investigated failed solar-power company Solyndra and was involved in the Mike Tyson and Death Row Records bankruptcy cases. GGW Marketing, LLC, GGW Brands' affiliate, filed a voluntary Chapter 11 petition on May 22, 2013, before the United States Bankruptcy Court Central District Of California (Los Angeles). The case is assigned Case No.: 13-23452. Martin R. Barash, Esq., and Matthew Heyn, Esq., at Klee, Tuchin, Bogdanoff and Stern, LLP, in Los Angeles, California, represent GGW Marketing. GIM CHANNELVIEW: S&P Assigns 'BB-' Rating to $375-Mil. Loan ----------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB-' rating to GIM Channelview Cogeneration LLC's (Channelview) senior secured $375 million term loan B due 2020 and senior secured $45 million revolving credit facility due 2018. The ratings are based on final transaction documentation. S&P also assigned a recovery rating of '1' to both debt issues. Channelview is a limited-purpose entity issuing project finance debt that owns an 856 megawatt (MW) natural gas-fired power plant in southeast Texas. The project used the debt proceeds to retire project debt and provide an equity distribution to the owners, Global Infrastructure Partners and Fortistar. The 'BB-' rating primarily reflects risks related to volatile merchant power prices, aggressive debt leverage and refinancing risk. These weaknesses are partially offset by an advantageous competitive position in the Houston Ship Channel, where S&P expects power demand to grow and power prices to be favorable, albeit volatile. In addition, Channelview maintains a contract to sell steam to Equistar Chemicals L.P., a subsidiary of yondellBasell NV. The steam contract constitutes a competitive advantage by enabling the plant to reduce its effective heat rate. Between 13% and 25% of the plant's generated power is contracted out to Shell Energy North America and EDF Trading North America or the next four years, which provides some cash flow visibility. "The stable outlook reflects our expectations of moderate debt repayment over the loan's tenor due to improving, albeit likely volatile, power market conditions in ERCOT," said Standard & Poor's credit analyst Terry Pratt. S&P would consider a negative ratings action if it expected debt service coverage to fall sustainably below 1.5x or if forecast refinancing risk increased to more than $200 per kW. Such a scenario would most likely happen due to lower merchant power revenues or unanticipated operational difficulties. A positive outlook would require superior financial performance than S&P currently expects on a sustained basis with debt service coverage consistently more than 3.5x and higher confidence that refinancing risk will likely be minimal in 2020. GMX RESOURCES: Creditors Raise Make-Whole Question With Twist ------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that GMX Resources Inc., an oil and gas exploration and production company, is giving U.S. Bankruptcy Judge Sarah A. Hall in Oklahoma City an opportunity to rule on a novel issue arising from a so-called make-whole premium owing on senior secured debt. According to the report, a make-whole premium is intended to compensate a lender for early repayment of debt when interest rates have fallen and the principal would be invested for a lower return. A make-whole premium is the subject of an appeal soon to be decided by the U.S. Court of Appeals in New York involving AMR Corp., the parent of American Airlines Inc. The report notes that in the GMX case, the issue is different because the loan documents say the premium comes due as a result of the Chapter 11 reorganization that began in April. The official creditors' committee objected, saying the premium is barred under several theories of bankruptcy law. The lenders filed their papers and argued that the premium is permissible under New York law and therefore must be upheld in bankruptcy. The report relates that they argue that the premium doesn't represent a penalty or unmatured interest that might be precluded by bankruptcy law. The committee is contending that the premium is blocked by the so-called ipso facto clause in bankruptcy law that prevents a loss of rights simply as a result of filing bankruptcy. The committee will file its last round of papers on July 17. Judge Hall will hold a hearing on Aug. 1. The Oklahoma City-based company filed for Chapter 11 protection in early April after negotiating a debt-swap agreement with secured lenders. The report says that there will be an auction on Aug. 28. The hearing to approve the sale will take place Sept. 10. GMX said it can't propose a plan until the results of auction are known. About GMX Resources GMX Resources Inc. -- http://www.gmxresources.com/-- is an independent natural gas production company headquartered in Oklahoma City, Oklahoma. GMXR has 53 producing wells in Texas & Louisiana, 24 proved developed non-producing reservoirs, 48 proved undeveloped locations and several hundred other development locations. GMXR has 9,000 net acres on the Sabine Uplift of East Texas. GMXR has 7 producing wells in New Mexico. The Company's strategy is to significantly increase production, revenues and reinvest in increasing production. GMXR's goal is to grow and build shareholder value every day. The Company reported net losses of $206.44 million in 2011, $138.29 million in 2010, and $181.08 million in 2009. GMX Resources filed a Chapter 11 petition in its hometown (Bankr. W.D. Okla. Case No. 13-11456) on April 1, 2013, so secured lenders can buy the business in exchange for $324.3 million in first-lien notes. GMX missed a payment due in March 2013 on $51.5 million in second- lien notes. Other principal liabilities include $48.3 million in unsecured convertible senior notes. The DIP financing provided by senior noteholders requires court approval of a sale within 75 days following approval of sale procedures. The lenders and principal senior noteholders include Chatham Asset Management LLC, GSO Capital Partners, Omega Advisors Inc. and Whitebox Advisors LLC. The Official Committee of Unsecured Creditors tapped Winston & Strawn LLP as its counsel. GRAND CHINA SHIPPING: 2nd Cir. Vacates Ruling in Blue Whale Rift ---------------------------------------------------------------- A three-judge panel of the U.S. Court of Appeals for the Second Circuit vacated and remanded an order of the district court in an admiralty law dispute arising from a distinctly international transaction: a Chinese company contracted to transport goods from Brazil to China aboard a Liberian vessel. The Appeals Court noted that the existence of so many foreign interests yields an inherently federal choice-of-law question -- one the appeals court resolves via application of maritime conflicts-of-law principles. Blue Whale Corporation, a foreign company, entered into a charter party (a maritime contract) with Grand China Shipping Development Company, Ltd., a Chinese company, on May 25, 2011. The charter party provided for transport of 250,000 metric tons of iron ore from Brazil to China aboard a Blue Whale vessel registered in the republic of Liberia. The contract purportedly required Grand China to pay 98% of the total freight costs to Blue Whale within seven days of loading the iron ore; allegedly, Grand China failed to make this payment. Blue Whale therefore held the vessel and its contents until Grand China satisfied the claimed debt, resulting in more than $1 million in damages borne by Blue Whale. Blue Whale commenced arbitration against Grand China in London pursuant to the charter party's clause specifying that "[a]ny disputes arising under the Contract," if not settled amicably, "shall be referred to arbitration in London [with] British law to apply." The arbitration is ongoing. On March 26, 2012, Blue Whale filed a complaint in the United States District Court for the Southern District of New York seeking to attach property belonging to Grand China's alleged alter ego, HNA Group Company, Ltd., also a Chinese company, in anticipation of a future arbitration award against Grand China. Rule B of the Supplemental Rules for Certain Admiralty and Maritime Claims ("Rule B") allows plaintiffs to seek an attachment of "defendant's tangible or intangible personal property -- up to the amount sued for -- in the hands of garnishees named in the process," "[i]f a defendant is not found within the district" at the time the complaint is filed. FED. R. CIV. P. SUPP. R. B(1)(a). Blue Whale alleged that Grand China and HNA "are in fact a single business enterprise" and that the district court should allow Blue Whale to pierce the corporate veil to reach in-district HNA assets of approximately $1.3 million. On May 17, 2012, the district court (Nathan, J.) issued an order authorizing attachment of HNA's holdings in third-party Pacific American Corporation -- a privately-held direct subsidiary of HNA based in New York -- in an amount up to roughly $1.3 million. HNA subsequently moved to vacate the district court's maritime attachment order under Rule E(4)(f), which provides that a person claiming interest in attached property "shall be entitled to a prompt hearing at which the plaintiff shall be required to show why the arrest or attachment should not be vacated." FED. R. CIV. P. SUPP. R. E(4)(f). Under Rule B, attachment is only appropriate if, inter alia, the plaintiff has a valid prima facie admiralty claim against the defendant. Neither party disputed that Blue Whale had alleged a claim sounding in admiralty and that the court had maritime jurisdiction. However, the parties disagreed over what substantive body of law controlled whether Blue Whale had alleged a valid prima facie claim to pierce the corporate veil. HNA argued that English law governed pursuant to the charter party's choice-of-law provision and that Blue Whale had failed to allege sufficient facts to support a prima facie alter-ego claim. In response, Blue Whale argued that federal common law controlled the inquiry because Rule B is procedural in nature and, in addition, because "it is well-settled that 'federal courts sitting in admiralty must apply federal common law when examining corporate identity.'" The district court separately analyzed the two elements required for Blue Whale's claim: (1) whether the claim sounded in admiralty; and (2) whether the claim was prima facie valid. First, the court held that whether Blue Whale adequately pled an admiralty claim was a procedural question governed by federal maritime law because it related to the court's subject matter jurisdiction (a point not disputed by the parties). The court therefore exercised maritime jurisdiction over the claim. Second, the district court held that the substantive question of whether Blue Whale had pled a valid prima facie alter-ego claim was controlled by English law pursuant to the contractual choice-of- law provision. Under English law, the court concluded that Blue Whale had not alleged an adequate prima facie claim to pierce the corporate veil, and therefore vacated the attachment. Supported by Amicus Curiae White Rosebay Shipping S.A., Blue Whale appeals from the district court's Jan. 11, 2013 order vacating the prior Rule B maritime attachment order against HNA. According to the appeals court, the relevant "transaction" in this case is not Grand China's alleged failure to comply with the charter party -- it is Blue Whale's claim to pierce the corporate veil. The district court in this Rule B action is charged only with determining whether Blue Whale stated a prima facie valid alter-ego claim against HNA in furtherance of its motion to attach HNA's property in New York. Accordingly, the appeals court said, United States law has the strongest "points of contact" with this claim by virtue of the location of HNA's property, Blue Whale's corresponding choice of forum and the unavailability of an alternative forum, and the absence of a dominant foreign choice of law. "On a final note, we recognize the value of simplifying the judicial process required for Rule B attachments and Rule E motions to vacate when feasible. . . . this does not excise the judicial obligation to apply the governing substantive law to assess the prima facie validity of a Rule B admiralty claim when challenged in a Rule E proceeding. But here, for the reasons discussed, we identify federal common law as the proper substantive body of law to govern Blue Whale's alter-ego claim against HNA. This follows from the ideas underpinning the Lauritzen choice-of-law analysis and from our aim of ensuring uniformity in admiralty law whenever possible. Accordingly, we vacate the district court's order and remand for reconsideration of the prima facie validity of Blue Whale's Rule B alter-ego claim under federal common law." The case is, BLUE WHALE CORPORATION, Plaintiff-Appellant, v. GRAND CHINA SHIPPING DEVELOPMENT CO., LTD, AKA SHANGHAI GRAND CHINA SHIPPING DEVELOPMENT CO., LTD., GRAND CHINA LOGISTICS HOLDING (GROUP) COMPANY LIMITED, HNA GROUP CO. LTD., Defendants-Appellees, Docket No. 13-0192-cv (2nd Cir.). A copy of the appeals court's July 16, 2013 decision is available at http://is.gd/gCa3oYfrom Leagle.com. George M. Chalos, Esq., Katherine N. Christodoulatos, Esq., Briton P. Sparkman, Esq. -- gmc@chaloslaw.com -- at Chalos & Co., P.C., in Oyster Bay, N.Y., for Plaintiff-Appellant. Thomas H. Belknap, Jr., Esq., and W. Cameron Beard, Esq. -- TBelknap@BlankRome.com -- at Blank Rome LLP, in New York, for Defendants-Appellees. Michael J. Frevola, Esq., Christopher R. Nolan, Esq., and Warren E. Gluck, Esq., at Holland & Knight LLP, in New York, for Amicus Curiae White Rosebay Shipping S.A. GREAT PLAINS EXPLORATION: Creditor Wants Case Converted to Ch. 7 ---------------------------------------------------------------- Wells Fargo Equipment Finance, Inc., asks Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania to convert the Chapter 11 case of Great Plains Exploration, LLC, to one under Chapter 7 of the Bankruptcy Code. Scott Schuster, Esq., at McGuireWoods LLP, in Pittsburgh, Pennsylvania, asserts that Wells Fargo, the Debtor's second largest creditor, for several months has been content to "stand on the sidelines" and let the Debtor make its best efforts to reorganize. According to Mr. Schuster, the Debtor has had more than adequate opportunity to restructure its business operations and present a viable plan of reorganization. It has failed to do so, thus the Court should convert the Debtor's bankruptcy case to a Chapter 7 proceeding, he asserts. A hearing on the motion will be held on July 25, 2013, at 10:00 AM. Responses are due July 18. About John D. Oil, Great Plains Exploration and Oz Gas Mentor, Ohio-based John D. Oil & Gas Co., is in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. The Company has 58 producing wells. The Company also has one self storage facility located in Painesville, Ohio. The self-storage facility is operated through a partnership agreement between Liberty Self-Stor Ltd. and the Company. John D. Oil's affiliated entities -- Oz Gas, LTD. and Great Plains Exploration LLC -- filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11, 2012. Two days later, John D. Oil filed its own Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063). On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A., dba Charter One, a receiver was appointed for all three corporate Debtors, in the United States District Court for the Northern District of Ohio at case No. 11-cv-2089-CAB. District Judge Christopher A. Boyko issued an order appointing Mark E. Dottore as receiver. The Receivership Order was appealed to the Sixth Circuit Court of Appeals on Dec. 19, 2011 and the appeal is currently pending. Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. John D. Oil's balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. The petitions were signed by Richard M. Osborne, CEO. The United States Trustee said a committee under 11 U.S.C. Sec. 1102 has not been appointed because no unsecured creditor responded to the U.S. Trustee's communication for service on the committee. GREAT PLAINS EXPLORATION: Settles DEO's Plan Disclosures Objection ------------------------------------------------------------------ Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania approved a stipulation resolving East Ohio Gas Company d/b/a Dominion East Ohio's objection to the disclosure statement explaining Great Plains Exploration, LLC's First Amended Plan. The Debtor and DEO agreed that the Debtor will assume the contract with DEO and all existing arrearages and defaults will be cured pursuant to Section 365 of the Bankruptcy Code in accordance with the Plan. Failure to cure the existing arrearages and defaults will constitute a default under the Contract and will give rise to a claim against the Debtor. Judge Agresti will continue the hearing to consider the adequacy of the disclosure statement to Aug. 8, 2013, at 09:30 AM. Robert S. Bernstein, Esq., and Joshua C. Lewis, Esq., at BERNSTEIN-BURKLEY, P.C., in Pittsburgh, Pennsylvania, for the Debtor. Matthew A. Salerno, Esq., and John A. Polinko, Esq., at McDONALD HOPKINS LLC, in Cleveland, Ohio; and Elizabeth L. Slaby, Esq., at CLARK HILL THORP REED, in Pittsburgh, Pennsylvania, for DEO. About John D. Oil, Great Plains Exploration and Oz Gas Mentor, Ohio-based John D. Oil & Gas Co., is in the business of acquiring, exploring, developing, and producing oil and natural gas in Northeast Ohio. The Company has 58 producing wells. The Company also has one self storage facility located in Painesville, Ohio. The self-storage facility is operated through a partnership agreement between Liberty Self-Stor Ltd. and the Company. John D. Oil's affiliated entities -- Oz Gas, LTD. and Great Plains Exploration LLC -- filed voluntary Chapter 11 petitions (Bankr. W.D. Pa. Case Nos. 12-10057 and 12-10058) on Jan. 11, 2012. Two days later, John D. Oil filed its own Chapter 11 petition (Bankr. W.D. Pa. Case No. 12-10063). On Nov. 21, 2011, at the request of the lender RBS Citizens, N.A., dba Charter One, a receiver was appointed for all three corporate Debtors, in the United States District Court for the Northern District of Ohio at case No. 11-cv-2089-CAB. District Judge Christopher A. Boyko issued an order appointing Mark E. Dottore as receiver. The Receivership Order was appealed to the Sixth Circuit Court of Appeals on Dec. 19, 2011 and the appeal is currently pending. Judge Thomas P. Agresti oversees the Chapter 11 cases. Robert S. Bernstein, Esq., at Bernstein Law Firm P.C., serves as counsel to the Debtors. Each of Great Plains and Oz Gas estimated $10 million to $50 million in assets and debts. John D. Oil's balance sheet at Sept. 30, 2011, showed $8.12 million in total assets, $12.92 million in total liabilities and a $4.79 million total deficit. The petitions were signed by Richard M. Osborne, CEO. The United States Trustee said a committee under 11 U.S.C. Sec. 1102 has not been appointed because no unsecured creditor responded to the U.S. Trustee's communication for service on the committee. GROVES IN LINCOLN: Creditors Voting on 63% Liquidating Plan ----------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that creditors of the Groves are voting on the liquidating Chapter 11 plan proposed by the independent living facility in Lincoln, Massachusetts. There will be a confirmation hearing on Aug. 20 for approval of the plan. According to the report, the facility was sold in June to an affiliate of Benchmark Assisted Living LLC under a contract worth as much as $35 million. The sale will generate a 48 percent to 63 percent recovery for holders of $88.4 million in Massachusetts Development Finance Agency bonds sold in 2009 to finance the project. The recovery will differ depending on which series of bonds someone owns. Disclosure materials explaining the plan were approved late last week by the bankruptcy court in Boston. The report notes that Wellesley, Massachusetts-based Benchmark paid $30 million cash plus another $5 million if approval is given to build an assisted living facility on the campus. If the contingent payment is not made, the bondholders' recovery will be 44 percent to 57 percent. General unsecured creditors with $68,000 in claims will recover 50 percent. The company said at the initiation of bankruptcy that the sale should result in a 51 percent recovery for bondholders. About Groves in Lincoln The Groves in Lincoln Inc., along with affiliate The Apartments of the Grove Inc., sought Chapter 11 protection (Bankr. D. Mass. Case No. 13-11329) in Boston on March 11, 2013. David C. Turner signed the petition as president and CEO. Groves is a Massachusetts not-for-profit corporation organized in 2006 for the purpose of developing and operating a senior independent living facility in Lincoln, Massachusetts to be known as The Groves in Lincoln. This facility now consists of 168 independent living units on a 34-acre campus with a mix of apartments, cottages, and related common areas including community center, dining rooms, lounges, barbershop/beauty salon, library, fitness center and pool. Groves has 26 full-time employees and 22 part-time employees as of the bankruptcy filing. The Debtors tapped Murtha Cullina LLP as counsel, Verdolino & Lowey, P.C. as accountants and financial advisors, and RBC Capital Markets LLC as investment banker. GULF STATE STEEL: 11th Circ. Upholds Nucor Win in Antitrust Suit ---------------------------------------------------------------- Ama Sarfo of BankruptcyLaw360 reported that the Eleventh Circuit on Monday said a lower court properly tossed a suit alleging steel producer Nucor Corp. violated antitrust laws by outbidding Gulf States Reorganization Group Inc. in a bankruptcy auction, saying GSRG didn't prove Nucor could actually monopolize the market. According to the report, the circuit court said that GSRG, which sought to purchase the assets of now-shuttered Gulf States Steel Inc., failed to show that Nucor, which produces black hot rolled coil steel, effectively cornered the market. Gadsden, Alabama-based Gulf States, Inc., filed for Chapter 11 in July 1999. HARBOR FREIGHT: S&P Rates New $1 Billion Secured Loan 'B+' ---------------------------------------------------------- Standard & Poor's Ratings Services said it affirmed its 'B+' corporate credit rating on Calabasas, Calif.-based tool and equipment retailer Harbor Freight Tools U.S. Inc. The outlook is stable. In addition, S&P assigned a 'B+' issue-level rating (the same as the corporate credit rating) to the proposed $1 billion senior secured term loan, which will replace the existing $750 million term loan. S&P's '4' recovery rating on the proposed facility indicates its expectation for average recovery (30% to 50%) in the event of a payment default. The recently refinanced $500 million ABL revolving credit facility is unrated and is being partly drawn to pay the proposed dividend. "Harbor Freight Tools' proposed debt-financed dividend falls in line with our expectations for the company to periodically increase leverage to the 4x-area for a debt-financed dividend and then manage leverage down through growth and profitability to the low 3x-area," said credit analyst Nalini Saxena. "As a point of reference, the company's LTM debt/EBITDA was 3.1x as of the fiscal third quarter (ended April 30) following a steady reduction based on new store development and increased sales, versus 4.0x leverage at the end of fiscal 2012 following a dividend payout. We assume the 4x-area is the leverage level which the company will periodically reach as it funds debt-financed dividends, based on its track record in recent years. We believe the company's good operating performance trends will continue." The stable outlook reflects S&P's expectation that financial policy will remain very aggressive and will continue a cycle of debt issuance, dividend payouts, and subsequent leverage reduction through growth and profitability. S&P expects the company to manage leverage below 4x in order to retain sufficient prospects for access to capital markets to continue its practice of periodic large dividend payouts. S&P also expects operating performance to remain solid, with consistent growth fueled by new store development and relatively stable margins resulting from vertical integration. S&P could lower the rating if financial policy were to lead to larger than anticipated debt-financed dividends such that leverage increases to the 5x-area. Following the proposed transaction, at the current EBITDA level, this would require approximately $350 million of additional debt. Another scenario for leverage to increase to the 5x-area would involve pressures on growth and profitability trends in addition to new debt--for example, a 10% EBITDA decline that is perhaps due to increased competition along with $150 million in additional debt. Although unlikely at this time, S&P could consider an upgrade if it believed the company's financial policies were to moderate such that debt repayment would take a priority over dividends. In this scenario, credit measures would improve such that leverage would be sustained below 3x. This could occur if HFT repays $450 million of debt at current operating performance levels. Another scenario for leverage to decrease below 3x would involve improvements to operating performance perhaps due to higher than anticipated response to new store openings such that EBITDA increases 20% and the company reduces debt by $200 million following the proposed transaction. HARBOR FREIGHT: Moody's Assigns B1 Rating to $1-Bil. Term Loan -------------------------------------------------------------- Moody's Investors Service rated Harbor Freight Tools USA, Inc. proposed $1 billion senior secured term loan B1. In addition, the Corporate Family Rating and Probability of Default Rating of Ba3 and Ba3-PD were affirmed. Proceeds from the new senior secured term loan will be used to refinance approximately $744 million of existing debt and the balance, together with borrowings under its revolving credit facility and excess cash held by the company, will be used to fund a dividend to HFT's shareholders. The rating outlook remains stable. The proposed transaction will temporarily increase HFT leverage such that Moody's estimates debt to EBITDA at July 31, 2013 will be 4.7 times. The affirmation of the Ba3 Corporate Family Rating with a stable outlook acknowledges the continued strength in HFT's operating performance including its cash flow generation which will allow HFT to quickly reduce leverage. The affirmation reflects Moody's expectations that debt to EBITDA will fall back below the 4.5 times downward rating trigger over the next twelve months due to a combination of debt repayment and earnings growth. The following rating is assigned subject to receipt of final documentation: $1.0 billion term loan due 2019 at B1 (LGD 4, 64%) The following ratings are affirmed: Corporate Family Rating at Ba3 Probability of Default Rating at Ba3-PD The following ratings will be withdrawn upon the closing of the transaction and their repayment in full: $750 million Sr. Secured term loan at B1 (LGD 4, 62%) Ratings Rationale: HFT's Ba3 Corporate Family Rating reflects its long term track record of paying sizable debt financed dividends to its shareholders. This has resulted in HFT having about a ten year history of periodically increasing its debt levels and then subsequently deleveraging from debt repayments and earnings growth. HFT's Ba3 Corporate Family Rating is supported by its unique niche in providing value priced tools and equipment, strong operating performance track record, and further opportunities for continued store expansion. In addition, HFT's direct sourcing strategy drives high EBIT margins and healthy cumulative free cash flow. Value priced retailers, such as HFT, remain well positioned in the current economic environment and will maintain share gains realized during the most recent recession. Also, the rating reflects HFT's small size relative to the larger home improvement retailers, as well as its narrow product niche Positive ratings consideration is also given to HFT's good liquidity, which is supported by, adequate levels of cash on hand, healthy free cash flow, and a $500 million ABL. Although the facility size is ample, Moody's expects approximately $300 million to be drawn over the next twelve to eighteen months. In addition HFT has no near term maturities until 2018 when the asset based revolving credit facility is due. The stable outlook considers HFT's track record of meeting earnings expectations and its history of debt financed dividends as well as its ability to quickly deleverage through debt repayment and earnings growth. The stable outlook also acknowledges an expectation that new store expansion will be measured and consistent with historical levels. In view of the company's track record of debt financed dividends, Moody's believes an upgrade in the near term is unlikely. Longer term, an upgrade would require greater comfort that HFT financial policy will remain balanced and prudent. At the same time, the company would need to maintain moderate financial leverage with debt to EBITDA sustained below 4.0 times. Ratings could be downgraded should operating performance falter or should HFT undertake further debt financed dividends that resulted in a sustained increase in leverage. Quantitatively, ratings could be downgraded if Moody's expected the company to sustain debt to EBITDA above 4.5 times. The principal methodology used in this rating was the Global Retail Industry Methodology published in June 2011. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. Privately-held, Harbor Freight Tools USA, Inc., headquartered in Calabasas, California, sells value priced tools and equipment through over 400 stores in 45 states as well as through the internet and catalogues. Revenues are about $2.3 billion. JACKSONVILLE BANCORP: Second Amendment to 10MM Shares Prospectus ---------------------------------------------------------------- Jacksonville Bancorp, Inc., is distributing nontransferable subscription rights to purchase shares of the Company's common stock exercisable for up to an aggregate of 10 million shares. The Company has amended the registration statement to delay its effective date until the Company files a further amendment which specifically states that the Registration Statement will thereafter become effective or until the Registration Statement becomes effective as the Commission may determine. Each whole subscription right will entitle a holder of the Company's common stock, to purchase [ ] shares of common stock, at a subscription price of $0.50 per share. The subscription price is the same price, on an as-converted basis, at which the Company effected its December 2012 private placement of 50,000 shares of the Company's Series A Preferred Stock. The offerees and purchasers of the Series A Preferred Stock in the Private Placement have waived their rights to participate in this rights offering and will not be receiving any subscription rights. The subscription rights will expire if they are not exercised by 5:00 p.m., New York time, on [ ], 2013, unless the Company extends the rights offering period. Concurrently with the rights offering, shares of common stock offered by this prospectus that remain unsubscribed for in the rights offering will be offered for sale to the public through Hovde Group, LLC, who the Company has engaged to act as its financial advisor and sales agent in the public offering. The Company's common stock is listed on the Nasdaq Stock Market under the symbol "JAXB." On July 15, 2013, the last reported sale price of the Company's common stock on the Nasdaq Stock Market was $0.49 per share. A copy of the Amendment No.2 to the Form S-1 prospectus is available for free at http://is.gd/QMl6NP About Jacksonville Bancorp Jacksonville Bancorp, Inc., a bank holding company, is the parent of The Jacksonville Bank, a Florida state-chartered bank focusing on the Northeast Florida market with approximately $583 million in assets and eight full-service branches in Jacksonville, Duval County, Florida, as well as the Company's virtual branch. The Jacksonville Bank opened for business on May 28, 1999, and provides a variety of community banking services to businesses and individuals in Jacksonville, Florida. Jacksonville Bancorp disclosed a net loss of $43.04 million in 2012, a net loss of $24.05 million in 2011 and a $11.44 million net loss in 2010. The Company's balance sheet at March 31, 2013, showed $520.89 million in total assets, $487.47 million in total liabilities and $33.42 million in total shareholders' equity. "Both Bancorp and the Bank must meet regulatory capital requirements and maintain sufficient capital and liquidity and our regulators may modify and adjust such requirements in the future. The Bank's Board of Directors has agreed to a Memorandum of Understanding (the "2012 MoU") with the FDIC and the OFR for the Bank to maintain a total risk-based capital ratio of 12.00% and a Tier 1 leverage ratio of 8.00%. As of December 31, 2012, the Bank was well capitalized for regulatory purposes and met the capital requirements of the 2012 MoU. If noncompliance or other events cause the Bank to become subject to formal enforcement action, the FDIC could determine that the Bank is no longer "adequately capitalized" for regulatory purposes. Failure to remain adequately capitalized for regulatory purposes could affect customer confidence, our ability to grow, our costs of funds and FDIC insurance costs, our ability to make distributions on our trust preferred securities, and our business, results of operation, liquidity and financial condition, generally," according to the Company's annual report for the year ended Dec. 31, 2012. JB MILWAUKEE: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: JB Milwaukee Avenue, LLC 2241 W. Howard Street Chicago, IL 60645 Tel: (312) 372-8703 Bankruptcy Case No.: 13-27773 Chapter 11 Petition Date: July 10, 2013 Court: U.S. Bankruptcy Court Northern District of Illinois (Chicago) Judge: Jacqueline P. Cox Debtor's Counsel: Linda Spak, Esq. SPAK & ASSOC. 6938 N. Kenton Lincolnwood, IL 60712 Tel: (312) 372-8703 Fax: (773) 338-4956 E-mail: attorneyspak@yahoo.com Estimated Assets: $1,000,001 to $10,000,000 Estimated Debts: $1,000,001 to $10,000,000 The Company did not file a list of creditors together with its petition. The petition was signed by Jason Ding, partner. JEFFERSON COUNTY: Selects Citigroup to Underwrite New Sewer Bonds ----------------------------------------------------------------- Jefferson County, Alabama selected Citigroup Inc. to manage an underwriting of new sewer bonds generating $1.963 billion to cover the $1.835 billion earmarked to pay off existing sewer bondholders at a discount under the county's Chapter 9 municipal debt- adjustment plan. Reuters reports that the county also selected Public Resources Advisory Group to act as financial adviser for the sewer warrants deal. Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that there will be an Aug. 6 hearing to consider the adequacy of explanatory disclosure materials which, if approved, will allow creditors to vote on the plan. Approval of the plan shouldn't be much in doubt. Bloomberg relates that the Plan was the product of a settlement supported by holders of more than 75 percent of the $3.2 billion in sewer debt at the core of the county's financial problems. Sewer bondholders will receive 65 percent in cash. If they waive claims against JPMorgan Chase & Co. and bond insurers, they receive 80 percent in cash. The county's plan filed on June 30 still must be confirmed by a federal judge but contains agreements with the biggest Wall Street creditors, such as JPMorgan Chase, that include losses of as much as 70 cents on the dollar, the Reuters report related. The defaults and losses imposed on bondholders are on a scale not seen since the 1930s and are likely to translate into pricier borrowing by the county for decades, portfolio managers and analysts have said, according to the report. The county's sewer debt is rated Ca with a negative outlook by Moody's Investors Service. About Jefferson County Jefferson County has its seat in Birmingham, Alabama. It has a population of 660,000. Jefferson County filed a bankruptcy petition under Chapter 9 (Bankr. N.D. Ala. Case No. 11-05736) on Nov. 9, 2011, after an agreement among elected officials and investors to refinance $3.1 billion in sewer bonds fell apart. John S. Young Jr. LLC was appointed as receiver by Alabama Circuit Court Judge Albert Johnson in September 2010. Jefferson County's bankruptcy represents the largest municipal debt adjustment of all time. The county said that long-term debt is $4.23 billion, including about $3.1 billion in defaulted sewer bonds where the debt holders can look only to the sewer system for payment. The county said it would use the bankruptcy court to put a value on the sewer system, in the process fixing the amount bondholders should be paid through Chapter 9. Judge Thomas B. Bennett presides over the Chapter 9 case. Lawyers at Bradley ArantBoult Cummings LLP and Klee, Tuchin, Bogdanoff& Stern LLP, led by Kenneth Klee, represent the Debtor as counsel. Kurtzman Carson Consultants LLC serves as claims and noticing agent. Jefferson estimated more than $1 billion in assets. The petition was signed by David Carrington, president. The bankruptcy judge in January 2012 ruled that the state court- appointed receiver for the sewer system largely lost control as a result of the bankruptcy. Before deciding whether Jefferson County is eligible for Chapter 9, the bankruptcy judge will allow the Alabama Supreme Court to decide whether sewer warrants are the equivalent of "funding or refunding bonds" required under state law before a municipality can be in bankruptcy. U.S. District Judge Thomas B. Bennett ruled in March 2012 that Jefferson County is eligible under state law to pursue a debt restructuring under Chapter 9. Holders of more than $3 billion in defaulted sewer debt had challenged the county's right to be in Chapter 9. In June 2013, the county reached settlement with holders of 78 percent of the $3.1 billion in sewer debt at the core of the county's financial problems. The bondholders will be paid $1.84 billion through a refinancing, according to a term sheet. The settlement calls for JPMorgan Chase & Co., the owner of $1.22 billion in bonds, to make the largest concessions so other bondholder will recover more. K-V PHARMACEUTICAL: Gets Judge's Nod to Collect Ch. 11 Plan Votes ----------------------------------------------------------------- Maria Chutchian of BankruptcyLaw360 reported that K-V Pharmaceutical Co. can now begin soliciting creditor votes for its Chapter 11 restructuring plan after receiving the go-ahead from a New York bankruptcy judge Tuesday and months of bouncing back and forth between two competing groups of interested investors. According to the report, U.S. Bankruptcy Judge Allan L. Gropper approved the women's health care company's disclosure statement, which will allow creditors to vote on the plan. All objections to the disclosure statement were either withdrawn or resolved before Tuesday's court hearing, the report said. 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. LEAP WIRELESS: Moody's Mulls Ratings Upgrade Following AT&T Deal ---------------------------------------------------------------- Moody's Investors Service has placed all ratings of Leap Wireless International, Inc., including its B3 Corporate Family Rating, on review for upgrade following the July 12 announcement that the company has entered into a definitive agreement with AT&T Inc. that contemplates AT&T acquiring Leap for $15 per share in cash, for an approximate total cost of $1.2 billion. The transaction is expected to close in six to nine months, pending Leap shareholder approval and regulatory approvals. Owners of approximately 29.8% of Leap's outstanding shares have already entered into an agreement to vote in favor of the transaction. Moody's has taken the following rating actions: Issuer: Cricket Communications, Inc. On Review for Possible Upgrade: $400M Senior Secured Bank Credit Facility, Placed on Review for Possible Upgrade, currently Ba3 $1425M Senior Secured Bank Credit Facility, Placed on Review for Possible Upgrade, currently Ba3 $1600M 7.75% Senior Unsecured Regular Bond/Debenture, Placed on Review for Possible Upgrade, currently Caa1 Outlook Actions: Outlook, Changed To Rating under Review from Stable Issuer: Leap Wireless International, Inc. On Review for Possible Upgrade: Probability of Default Rating, Placed on Review for Possible Upgrade, currently B3-PD Corporate Family Rating, Placed on Review for Possible Upgrade, currently B3 $250M 4.5% Senior Unsecured Conv./Exch. Bond/Debenture, Placed on Review for Possible Upgrade, currently Caa1 Outlook Actions: Outlook, Changed To Rating under Review from Stable Ratings Rationale: Leap gains from the transaction due to the relative strength of AT&T, which has investment-grade credit ratings and greater access to capital. The transaction also provides Leap customers access to AT&T's nationwide LTE network. Leap's current 3G network covers approximately 96 million POPs across 35 states, and the company's LTE network covers approximately 21 million POPs. The combined company will have the scale, spectrum and an enhanced smartphone lineup to better compete against other U.S. wireless carriers operating in the low-cost prepaid segment. The review of Leap's ratings will focus on AT&T's plans with regard to the existing Leap debt and the post-close capital structure of Leap. The principal methodology used in rating this was the Global Telecommunications Industry Methodology published in December 2010. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. LEAP WIRELESS: S&P Puts 'B-' CCR on Creditwatch Positive -------------------------------------------------------- Standard & Poor's Ratings Services placed its 'B-' corporate credit rating on Leap Wireless International Inc. on CreditWatch with positive implications. At the same time, S&P placed the 'B+' issue-level on subsidiary Cricket Communications Inc.'s secured credit facilities and the 'CCC+' issue-level rating on Cricket's unsecured notes on CreditWatch with positive implications; the recovery rating on the credit facilities remains '1' and the recovery rating on the unsecured notes remains '5'. In addition, S&P placed the 'CCC' issue-level rating on Leap's convertible debt on CreditWatch positive; the recovery rating remains '6'. The change-of-control provisions in the credit facilities agreement and the Cricket notes indenture are not triggered as a result of this transaction, while the convertible debt is only subject to a put option at the discretion of the holders. The CreditWatch placement follows AT&T's announcement that it will acquire Leap for $1.2 billion. We would expect to raise its corporate credit rating on Leap and the rating on Cricket's secured and unsecured notes and Leap's convertible notes to that of AT&T after the transaction closes because it would consider Leap's assets to be core to AT&T's wireless strategy, which includes expansion of its prepaid business and additional coverage for fourth generation (4G) services under the Long-Term Evolution (LTE) standard. "The CreditWatch placement indicates our view that we would raise the ratings on Leap and its subsidiary to those of AT&T upon successful completion of the acquisition, which is subject to FCC and DOJ review, and which we expect will close in six to nine months," said Standard & Poor's credit analyst Catherine Cosentino. LEHMAN BROTHERS: Parent Still Disputes With LBI on Bankhaus Deal ---------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that reorganized Lehman Brothers Holdings Inc. was slated to tangle in bankruptcy court July 17 with James Giddens, the trustee liquidating the Lehman brokerage subsidiary, and with the liquidator for the German affiliate Lehman Brothers Bankhaus AG. According to the report, the hearing is for approval of a settlement where Mr. Giddens proposes giving the German affiliate an approved unsecured claim for $550 million. The Lehman parent is opposed, having previously said the settlement is "grossly inflated and unjustified." The report notes that first disclosed in November, the settlement then was for $600 million. It was reduced by $50 million after the Lehman parent brought to light payments reducing the German's liquidator's claim that was originally $1.35 billion. If approved by the judge, the Lehman brokerage trustee will waive a $105,000 claim against the German affiliate. The disagreement surrounds the value of securities underlying repurchase agreements. The Lehman parent believes the German liquidator's valuation is inflated. The report relates that in response, Mr. Giddens filed papers late last week showing that leveraged-loan indexes come up with a value between $400 million and $600 million. The trustee also says the settlement is midway between the $287 million he proposed and the $810 million sought by the German liquidators. If the court doesn't disapprove the settlement outright, the Lehman parent wants the judge to delay the hearing and allow time for investigation into the valuation of the so-called repo securities. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: SIPA Trustee Defends LB Bankhaus Deal ------------------------------------------------------ The trustee of Lehman Brothers Holdings Inc.'s brokerage asked Judge James Peck to overrule the company's objection to the proposed deal that would cut Lehman Brothers Bankhaus AG's $1.35 billion claim against the brokerage by almost half. LBHI is objecting to the total amount that Lehman Bankhaus would get from the settlement, saying it is "grossly inflated and unjustified." Under the deal, Lehman Bankhaus agreed to further reduce its claim from $1.35 billion to $550 million. The company previously agreed to get $600 million from the settlement. James Giddens, the trustee appointed to liquidate Lehman Brothers Inc., argued that the settlement amount of $550 million is the "approximate midpoint" between two opposing valuations of the claim -- the $810 million as estimated by Lehman Bankhaus and $287 million as estimated by the holdings company. "It is a reasonable midpoint of the two extremes, and well within the trustee's estimated value of the claim," Mr. Giddens said in a court filing. "It is thus firmly within the reasonable range of possible outcomes." Lehman's objection to the proposed deal also drew flak from Dr. Michael Frege, Lehman Bankhaus' administrator. "[Lehman] asks this court to disregard the settlement even though in the absence of a settlement, the litigation would be exceedingly complex and risky for LBI's creditors," the administrator said. A court hearing to consider approval of the settlement was scheduled for July 17. Dr. Michael Frege is represented by: D. Farrington Yates, Esq. DENTONS US LLP 1221 Avenue of the Americas New York, NY 10020 Tel: (212) 768-6700 Fax: (212) 768-6800 Email: farrington.yates@dentons.com - and - Patrick Maxcy, Esq. Christopher Soper, Esq. DENTONS US LLP 233 South Wacker Drive, Suite 7800 Chicago, IL 60606 Tel: (312) 876-8000 Fax: (312) 876-7934 Email: patrick.maxcy@dentons.com christopher.soper@dentons.com About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: RFWSD Ink Deal to Assume Pre-Inclusion Agreements ------------------------------------------------------------------ Lehman Brothers Holdings Inc. signed an agreement, which calls for withdrawal of claims filed by Roaring Fork Water and Sanitation District against the company's subsidiary. Under the deal, Roaring Fork agreed to drop its claims against LB Rose Ranch LLC in exchange for the assumption of their pre- inclusion agreements by the Lehman subsidiary pursuant to its Chapter 11 plan. The agreement is available for free at http://is.gd/yC9M6X Roaring Fork Water is represented by: Lawrence R. Green, Esq. BALCOMB & GREEN, PC 818 Colorado Ave. Glenwood Springs, CO 81601 Tel: (970) 945-6546 Fax: (970) 945-8902 About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: Liberty Funds Reach Deal to Amend Claims --------------------------------------------------------- Lehman Brothers Holdings Inc. signed an agreement, which calls for the amendment of claims filed by a group of funds led by LibertyView Funds L.P. Under the deal, both sides agreed to the amendment of the claims by withdrawing portions of those claims that assert a liability or seek a recovery related to the so-called "best claims" asserted by the funds against Lehman's European unit. A copy of the agreement is available for free at http://is.gd/vL8y1G LibertyView Funds is represented by: Michael Etkin, Esq. Scott Cargill, Esq. LOWENSTEIN SANDLER PC 1251 Avenue of the Americas New York, NY 10020 Tel: (212) 262-6700 Fax: (212) 262-7402 Email: metkin@lowenstein.com scargill@lowenstein.com About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. LEHMAN BROTHERS: Says Contract Allows for $6.5BB Archstone Sale --------------------------------------------------------------- Stewart Bishop of BankruptcyLaw360 reported that Lehman Brothers Holdings Inc. urged a New York state judge to throw out a suit brought by a minority investor objecting to the defunct company's mammoth $6.5 billion sale of apartment owner Archstone Enterprise LP, arguing it was contractually justified in making the deal. According to the report, appearing for oral arguments in a Manhattan courtroom, a Lehman attorney told New York Supreme Court Justice Marcy S. Friedman that the language is under the limited partnership agreement Lehman has with plaintiff Cambridge Capital Real Estate Investments LLC covering the investment in Archstone. Lehman sold Archstone in a $6.5 billion cash and stock deal to Sam Zell's Equity Residential and AvalonBay Communities Inc. The sale will provide Lehman with additional funds to pay creditors and gives its estate a stake in those companies. Under the deal, the company will receive nearly $2.69 billion in cash plus 34.5 million shares of Equity Residential's stock and 14.9 million shares of AvalonBay's stock that are worth about $3.8 billion combined. Lehman will have a 13.2% stake in AvalonBay and 9.8% stake in the other company after the deal. Equity Residential will acquire about 60% of Archstone's assets and liabilities. The other buyer will acquire about 40%. Equity Residential is selling 19 million shares in a public offering to fund the deal, which could include up to 2.9 million additional shares for overallotments. AvalonBay plans to sell 14.5 million shares, plus 2.2 million for overallotments. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers filed for Chapter 11 bankruptcy Sept. 15, 2008 (Bankr. S.D.N.Y. Case No. 08-13555). Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases are handled by Judge James M. Peck. Harvey R. Miller, Esq., Richard P. Krasnow, Esq., Lori R. Fife, Esq., Shai Y. Waisman, Esq., and Jacqueline Marcus, Esq., at Weil, Gotshal & Manges, LLP, in New York, represent Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, serve as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., is the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens has been appointed as trustee for the SIPA liquidation of the business of LBI. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. Lehman emerged from bankruptcy protection on March 6, 2012, more than three years after it filed the largest bankruptcy in U.S. history. The Chapter 11 plan for the Lehman companies other than the broker was confirmed in December 2011. Lehman made its first payment of $22.5 billion to creditors in April 2012 and a second payment of $10.2 billion on Oct. 1. A third distribution is set for around March 30, 2013. The brokerage is yet to make a first distribution to non-customers. Bankruptcy Creditors' Service, Inc., publishes Lehman Brothers Bankruptcy News. The newsletter tracks the Chapter 11 proceeding undertaken by Lehman Brothers Holdings, Inc., and other insolvency and bankruptcy proceedings undertaken by its affiliates. MEDIMPACT HOLDINGS: Moody's Hikes CFR to B3 After Acquisitions -------------------------------------------------------------- Moody's Investors Service upgraded MedImpact Holdings, Inc.'s Corporate Family Rating to B3 from Caa1 and its Probability of Default rating to B3-PD from Caa1-PD. At the same time, the company's senior secured notes were raised to Caa2 from Caa3. The rating outlook is stable. This rating action incorporates MedImpact's announced plans to acquire Medical Security Card Company, LLC and Apex Affinity, Inc., both offering discount drug card services to retailers and other customers. In addition, this action considers the company's bondholder consent solicitation to raise another $160 million in secured notes to help fund these transactions. Ratings upgraded: MedImpact Holdings, Inc. CFR to B3 from Caa1 PDR to B3-PD from Caa1-PD Senior secured notes to Caa2 (LGD5, 80%) from Caa3 (LGD5, 88%) Rating affirmed: Speculative grade liquidity rating at SGL-3 Ratings Rationale: The rating upgrade reflects Moody's expectation that the company will see steady financial performance, aided by recent contract wins, and will delever over the next 12 to 18 months. Furthermore, the proposed acquisitions will enhance the company's product lines and provide opportunities to realize cost and revenue synergies. Pro-forma for the acquisitions, the company's debt/EBITDA will rise from about 4.9 times to about 5.4 times based on financial results for the twelve months ended March 31, 2013. Moody's expects leverage to moderate, absent any additional large acquisitions, dropping to 5.0 times or below by the end of 2014. The B3 CFR reflects very high leverage, a small revenue base, cash flow that is dependent on working capital benefits, and aggressive financial practices stemming from a highly concentrated ownership structure. The ratings also consider MedImpact's position as a niche pharmacy benefit manager (PBM) that serves mid-sized customers, including hospital systems, regional managed care organizations and state Medicaid health plans. Recent new contract wins and renewals should help support top-line growth and adequate liquidity. MedImpact does not purchase drugs or own mail-order fulfillment or specialty services, and often provides administrative services, such as adjudication of claims to its customers. While the ratings reflect Moody's belief that leverage will moderate as EBITDA improves, there is the potential that the company will pursue additional large debt-financed acquisitions in order to improve scale. The stable outlook reflects Moody's expectation that the company will continue to generate positive free cash flow and adequate liquidity, aided by good retention rates and new customer contracts. If MedImpact realizes improved sales and profitability so that debt/EBITDA is sustained below 4.0 times, the ratings could be upgraded. In addition, Moody's would need to see RCF/debt that is sustained well above 10%. This further assumes that management demonstrates a commitment to more conservative financial practices. If operating results (associated with loss of members or pricing constraints) deteriorate, the ratings could be downgraded. A need to borrow for additional large acquisitions or to address payable needs or weakened liquidity could also result in a rating downgrade. Debt/EBITDA sustained above 5.0 times could also result in a ratings downgrade. The company's SGL-3 reflects its adequate liquidity profile, characterized by volatile working capital swings, which may require draws on MedImpact's modest sized, though currently undrawn, ABL revolver. While the ABL is backed by allowable receivables, other assets - including real estate and those related to aviation - secure the notes payable and therefore are not available as an alternate liquidity source. The senior secured notes are secured by equity, providing limited protection for bondholders. In addition, the presence of sizeable payables, along with the $20 million ABL revolver at the operating company and the secured notes payable at various restricted subsidiaries, result in the senior notes being rated two notches below the CFR. The principal methodology used in this rating was the Global Distribution & Supply Chain Services published in November 2011. Other methodologies used include Loss Given Default for Speculative-Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. MedImpact Healthcare Systems, Inc., a wholly-owned operating subsidiary of MedImpact Holdings, Inc., is a Pharmacy Management (PBM) headquartered in San Diego, California. MEDIMPACT HOLDINGS: S&P Assigns 'B-' CCR; Outlook Stable --------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'B-' corporate credit rating to San Diego, Calif.-based MedImpact Holdings Inc. S&P's rating outlook is stable. S&P assigned its 'B-' issue rating to MedImpact's $390 million senior secured notes, with a '3' recovery rating, indicating S&P's expectation for meaningful (50% to 70%) recovery of principal for senior secured lenders in the event of payment default. The company currently has $230 million of notes in place and raised the incremental $160 million to fund pending acquisitions. "Our rating on MedImpact Holdings Inc. reflects our assessment of the company's "weak" business risk profile and its "highly leveraged" financial risk profile. Our rating also incorporates a weak management and governance score, primarily due to the lack of oversight from a truly independent board and past investments in noncore activities utilizing the company's discretionary cash flow," said credit analyst John Bluemke. "MedImpact's primary operation consists of a PBM business, but also includes real estate, aviation, and other private investments. The PBM business has been segregated for lending purposes, although S&P bases its conclusions on the consolidated entity." The outlook on MedImpact is stable reflecting S&P's anticipation that weaker cash flow measures will offset modest deleveraging . S&P could raise the rating if the company increased cash flow such that FFO/debt was above 15% and S&P believed it would stay there, while also remaining leveraged at below 5.0x. This could occur if EBITDA margins improved by approximately 200 bps above S&P's base case assumption. Still, given S&P's management and governance assessment, and the presence of noncore operations, it is not likely to view improved credit measures as permanent. While unlikely, S&P could lower the rating if EBITDA margins declined by more than 400 bps, likely combined with a working capital reversal. Such a scenario would result in cash flow deficits and impair liquidity, consequently putting into question the company's ability to meet maturing debt obligations over the next three years. MERCANTILE BANCORP: Sec. 341(a) Creditors' Meeting Set for Aug. 6 ----------------------------------------------------------------- The U.S. Trustee for Region 3 will hold a meeting of creditors of Mercantile Bancorp, Inc., pursuant to Section 341(a) of the Bankruptcy Code on Aug. 6, 2013, at 10:30 a.m., at the J. Caleb Boggs Federal Building, at 844 King Street, Room 5209, in Wilmington, Delaware. This is the first meeting of creditors under Section 341(a) of the Bankruptcy Code. The meeting offers creditors a one-time opportunity to examine the Debtors' representative under oath about the Debtors' financial affairs and operations that would be of interest to the general body of creditors. Attendance by the Debtor's creditors at the meeting is welcome, but not required. The meeting may be continued and concluded at a later date specified in a notice filed with the U.S. Bankruptcy Court for the District of Delaware. About Mercantile Bancorp Mercantile Bancorp -- http://www.mercbanx.com/-- is a Quincy, Illinois-based bank holding company with wholly owned subsidiaries consisting of one bank in Illinois and one each in Kansas and Florida, where the Company conducts full-service commercial and consumer banking business, engages in mortgage banking, trust services and asset management, and provides other financial services and products. The Company also operated Mercantile Bank branch offices in Missouri and Indiana. On Aug. 10, 2011, the Illinois Division of Banking released a Consent Order that Mercantile Bank, the Federal Deposit Insurance Corporation, and the Division entered into as of July 28, 2011. Under the Order, Mercantile Bank will cease operating with all money transmitters and currency businesses providing brokerage, sale or exchange of non-United States currency for deposit customers. Furthermore, Mercantile Bank may not enter into a new line of business without the prior written consent of the FDIC and the Division. Mercantile Bancorp filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-11634) on June 27, 2013. The petition shows assets and debt both exceeding $50 million. Liabilities include $61.9 million owing on junior subordinated debentures. Mercantile stopped paying interest on the debentures in 2009, since then running up $14 million in unpaid interest. Stuart M. Brown, Esq. -- stuart.brown@dlapiper.com -- at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq. -- richard.chesley@dlapiper.com -- Kimberly D. Newmarch, Esq. -- kim.newmarch@dlapiper.com -- and Aaron M. Paushter, Esq. -- aaron.paushter@dlapiper.com -- at DLA Piper LLP (US), in Chicago, Illinois, are proposed attorneys for the Debtor. MERCANTILE BANCORP: Seeks Extension of Deadline to File Schedules ----------------------------------------------------------------- Mercantile Bancorp, Inc., asks Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware to further extend the time within which it must file its schedules of assets and liabilities and statement of financial affairs through and including July 31, 2013. According to the Debtor, it needs the additional time because it is unable to complete its Schedules and Statement within 14 days of its Petition Date because of the complexity of its financial affairs and the time that must be spent to prepare information for potential alternate bidders. About Mercantile Bancorp Mercantile Bancorp -- http://www.mercbanx.com/-- is a Quincy, Illinois-based bank holding company with wholly owned subsidiaries consisting of one bank in Illinois and one each in Kansas and Florida, where the Company conducts full-service commercial and consumer banking business, engages in mortgage banking, trust services and asset management, and provides other financial services and products. The Company also operated Mercantile Bank branch offices in Missouri and Indiana. On Aug. 10, 2011, the Illinois Division of Banking released a Consent Order that Mercantile Bank, the Federal Deposit Insurance Corporation, and the Division entered into as of July 28, 2011. Under the Order, Mercantile Bank will cease operating with all money transmitters and currency businesses providing brokerage, sale or exchange of non-United States currency for deposit customers. Furthermore, Mercantile Bank may not enter into a new line of business without the prior written consent of the FDIC and the Division. Mercantile Bancorp filed a Chapter 11 petition (Bankr. D. Del. Case No. 13-11634) on June 27, 2013. The petition shows assets and debt both exceeding $50 million. Liabilities include $61.9 million owing on junior subordinated debentures. Mercantile stopped paying interest on the debentures in 2009, since then running up $14 million in unpaid interest. Stuart M. Brown, Esq. -- stuart.brown@dlapiper.com -- at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq. -- richard.chesley@dlapiper.com -- Kimberly D. Newmarch, Esq. -- kim.newmarch@dlapiper.com -- and Aaron M. Paushter, Esq. -- aaron.paushter@dlapiper.com -- at DLA Piper LLP (US), in Chicago, Illinois, are proposed attorneys for the Debtor. METRO ENTERPRISES: Case Summary & 4 Unsecured Creditors ------------------------------------------------------- Debtor: Metro Enterprises, LLC 645 Lefferts Avenue, Suite 2J Brooklyn, NY 11203 Bankruptcy Case No.: 13-44213 Chapter 11 Petition Date: July 10, 2013 Court: U.S. Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Nancy Hershey Lord Debtor's Counsel: Joel M. Shafferman, Esq. SHAFFERMAN & FELDMAN, LLP 18 East 41st Street, Suite 1201 New York, NY 10017 Tel: (212) 509-1802 Fax: (212) 509-1831 E-mail: joel@shafeldlaw.com Scheduled Assets: $0 Scheduled Liabilities: $1,289,990 A copy of the Company's list of its four unsecured creditors filed with the petition is available for free at: http://bankrupt.com/misc/nyeb13-44213.pdf The petition was signed by Reuven Komarovsky, member. MIDCONTINENT COMM.: S&P Assigns 'BB-' Rating to $475MM Facility --------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB-' issue-level rating and '2' recovery rating to Minneapolis-based incumbent cable provider Midcontinent Communications' proposed $475 million senior secured credit facility, which will consist of a $125 million revolving credit facility due 2018, a $125 million term loan A due 2018, and a $225 million term loan B due 2020. The '2' recovery rating indicates S&P's expectation for substantial (70% to 90%) recovery in the event of payment default. In addition, S&P assigned a 'B-' issue-level rating and '6' recovery rating to the company's proposed $250 million of senior unsecured notes due 2021 to be issued by Midcontinent Communications and co-borrower Midcontinent Finance Corp. under Rule 144A without registration rights. The '6' recovery rating indicates S&P's expectation for negligible (0% to 10%) recovery in the event of payment default. At the same time, S&P affirmed its 'B+' corporate credit rating. The outlook is stable. The company will use proceeds from the term loans and new notes, along with $7 million of cash, to repay the existing $219 million term loan A, the $381 million term loan B, and pay about $7 million of related fees and expenses. "While the transaction allows the company to extend its debt maturities and does not affect leverage, which is about 3.9x on a pro forma basis, these factors are not sufficient to warrant a change in our financial risk assessment, which we view as 'highly leveraged' under our criteria," said Standard & Poor's credit analyst Allyn Arden. Credit measures are good relative to S&P's financial risk assessment, although the potential dissolution of Midcontinent's partnership with Comcast Corp. could ultimately lead to significantly higher leverage. Both companies have the mutual option to sell their stakes to the other owner starting in October 2014 and every two years thereafter. A key credit risk is that if Comcast elects to sell its stake, leverage could increase to around 6x or more, depending on the valuation. S&P's base-case scenario also includes the following assumptions: -- Total revenue increases around 7% in 2013 and 4% to 5% over the next couple of years. -- Modest basic video subscriber growth in 2013, though video customers decline at a 2% to 3% annual rate thereafter due to competitive pressures from cable overbuilders and satellite TV as well as maturing product conditions. -- HSD subscribers increase around 5% to 6% in 2013 and 3% to 4% in the following years. -- Telephone customers decline around 1% to 2% as growth in commercial subscribers is more than offset by a decline in residential customers, primarily due to wireless substitution. -- The EBITDA margin declines to the mid-30% area longer term from about 38.5% in 2012 due to rising programming expense. -- Capital expenditures of about $70 million to $75 million annually. -- About $30 million of discretionary cash flow in 2013 with limited amounts thereafter due to higher tax distributions to the partnership. In addition to the highly leveraged financial risk profile, S&P views Midcontinent's business risk profile as "satisfactory". Key business risk factors include the company's small scale and low system densities; mature revenue growth prospects for basic video services; and competitive pressures from satellite TV providers, incumbent phone companies, and cable overbuilders. These business risk factors are somewhat overshadowed by its position as a dominant provider of pay-TV services, its programming and equipment purchasing agreement with Comcast, and solid profitability. The outlook is stable. S&P expects Midcontinent to benefit from solid growth in advanced video and HSD services in the near term and competitive dynamics in its territories to remain favorable relative to other larger incumbent cable operators. S&P could raise the ratings if leverage remained below 5x on a sustained basis. However, upgrade prospects are constrained by financial policy considerations, particularly related to the buy/sell provision with Comcast, which S&P believes could result in higher leverage. A dissolution of the partnership would hurt Midcontinent's margins since it benefits from purchasing programming and equipment at Comcast rates. If this event were to occur and was coupled with increased competitive pressures and higher churn, resulting in leverage rising above 7x, S&P could lower the ratings. MIDTOWN SCOUTS: U.S. Trustee Unable to Form Committee ----------------------------------------------------- The United States Trustee said that an official committee under 11 U.S.C. Sec. 1102 has not been appointed in the bankruptcy case of Midtown Scouts Square Property, LP, and affiliate Midtown Scouts Square, LLC. The United States Trustee has attempted to solicit creditors interested in serving on the Unsecured Creditors Committee from the 20 largest unsecured creditors. After excluding governmental units, secured creditors and insiders, the U.S. Trustee has been unable to receive sufficient interest in serving on the Committee, in order to appoint a proper Committee. The U.S. Trustee reserves the right to appoint such a committee should interest developed among the creditors. 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-square- foot two-storey 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. MIDTOWN SCOUTS: Has Final Approval for DIP Funding -------------------------------------------------- Midtown Scouts Square Property, LP, et al., obtained final approval from the U.S. Bankruptcy Court to use cash collateral and incur $1 million of DIP financing. Midtown Scouts owns two commercial properties located in Midtown Houston, Texas. The first property is a mixed use 36,000 square- foot two-story office/restaurant building originally constructed in 1975, while the second property is a 104,000 square foot eight- story parking garage with ground floor retail space, both in Bagby Street, in Houston. Rental income from the two properties is currently insufficient to fund operations. The Debtor's motion discloses that the Debtor's limited partner will provide an unsecured DIP financing of up to $1 million to cover the projected shortfall of funds. The DIP financing will be allowed as an administrative expense pursuant to 11 U.S.C. Sec. 503(b)(1). The DIP financing will bear interest of 7% per annum and will mature on Dec. 31, 2013. The DIP lender is Atul Lucky Chopra, M.D., according to the promissory note. The Bank of Houston and Mercantile Capital Corp are granted replacement liens on all of the Debtor's accounts receivable and rents acquired after the bankruptcy filing. The Debtor is required to make monthly payments of principal and interest of $30,300 to Bank of Houston until June 4, 2015, to pay off loans used to renovate the building and build the parking garage. The Debtor owes Mercantile $3.35 million in principal for loans provided for the renovation of the office building. Midtown Scouts Square Property, LP, and an affiliate, 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 Debtors' counsel. MONITOR COMPANY: Seeks Conversion to Chapter 7 ---------------------------------------------- MCG Limited Partnership, f/k/a Monitor Company Group, and its debtor affiliates, the Official Committee of Unsecured Creditors, and Caltius Partners IV, LP, jointly ask the U.S. Bankruptcy Court for the District of Delaware to convert the Chapter 11 cases to cases under Chapter 7 of the Bankruptcy Code. To recall, the Debtors sold substantially all of their assets to Deloitte Consulting LLP and DSCH Limited. The Sale closed in January. Pursuant to the terms of the Sale, the Debtors and the Buyer entered into a Transition Services Agreement, which required the Debtors to undertake certain obligations to assist in the Sale and the transition of the assets to the Buyer from the Debtors. The Debtors' obligations under the TSA expired as of June 30, 2013, and the Buyer's obligations to provide certain services to the Debtors under the TSA expired July 15, 2013. The parties believe that the most effective and efficient administration of the bankruptcy cases will be pursuant to Chapter 7. Caltius has agreed to certain carve-outs from proceeds of the Sale for payment of Chapter 11 and other administrative expenses. Specifically, the Carve-Out consists of: -- the Pre-Sale Carve-Out, which includes amounts necessary to permit the payment of accrued and unpaid professional fees and disbursements that are ultimately allowed by an order of the Bankruptcy Court incurred by the Debtors and the Creditors' Committee prior to and including Jan. 11, 2013; -- the payment of accrued and unpaid administrative expenses incurred by the Debtors in the ordinary course of their business prior to the closing of the Sale, in an amount not to exceed $1.950 million; -- the payment of accrued and unpaid professional fees and disbursements incurred by the Debtors and the Committee, the fee auditor, and Epiq Systems, Inc., prior to and including the date of conversion of the bankruptcy cases; -- Chapter 7 expenses in an amount not to exceed $50,000; -- the payment of all fees pursuant to Section 1930 of Title 28 of the U.S. Code; -- $2.3 million for payment of any and all amounts required to avoid liability of natural persons due to those persons' control or oversight of the Debtors or otherwise as responsible persons or persons with day-to-day management or control; -- $1.0 million for the payment of reasonable professional and other fees and expenses incurred in connection with the calculation and payment of Trust Fund Obligations and estate tax filings; and -- $4.363 million to be used in an manner consistent with the extended Wind Down Budget. As a result of engagement of the Debtors' employees in responding to an audit by the Internal Revenue Service related to the 2011 tax year, certain work by the Debtors' employees in preparation for filing 2012 and 2013 tax returns has not been completed and is expected to be completed after conversion of the bankruptcy cases. Certain obligations under the Deloitte Asset Purchase Agreement, including the preparation and filing of 2012 and 2013 tax returns and the transfers of certain investment partnerships, have also not been completed. The Debtors have asked an additional commitment from Caltius beyond the Carve Out to cover certain post-conversion expenses related to the preparation of the Debtors' 2012 and 2013 tax returns. Caltius has asserted that sufficient funds already exist in the Carve Out for that purpose. However, Caltius has agreed to work in good faith with the Debtors to make amendments to the Carve Out with respect to post- conversion costs to prepare the Debtors' 2012 and 2013 tax returns that are necessary and mutually agreeable. The Parties ask that these cases be converted after payment of fees and expenses allowed pursuant to fee applications for the quarter ended March 31, 2013 scheduled for hearing on Aug. 5, 2013. The Parties further ask that the Court schedule a filing deadline, objection deadline and hearing date for the submission and allowance of final Chapter 11 fee applications for professionals for the Debtors and the Committee. A hearing on the motion will be held on Aug. 5, 2013, at 10:00 a.m. (ET). Objections are due July 29. David B. Stratton, Esq., James C. Carignan, Esq., and John H. Schanne II, Esq., at PEPPER HAMILTON LLP, in Wilmington, Delaware; D. Ross Martin, Esq., James M. Wilton, Esq., and Jonathan P. Reisman, Esq., at ROPES & GRAY LLP, in Boston, Massachusetts; and Adam J. Goldstein, Esq., at ROPES & GRAY LLP, in New York, for the Debtors. Norman L. Pernick, Esq., at COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A., in Wilmington, Delaware; and Warren A. Usatine, Esq., and Ryan T. Jareck, Esq., at COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A., in Hackensack, New Jersey; and Michael D. Warner, Esq., at COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A., in Fort Worth, Texas, for the Creditors' Committee. Jeremy W. Ryan, Esq., and Ryan M. Murphy, Esq., at POTTER ANDERSON & CORROON LLP, in Wilmington, Delaware; and John P. Sieger, Esq., and Peter A. Siddiqui, Esq., at KATTEN MUCHIN ROSENMAN LLP, in Chicago, Illinois, for Caltius. About Monitor Company Monitor Company Group LP -- http://www.monitor.com/-- is a global consulting firm with 1,200 personnel in offices across 17 countries worldwide. Founded in 1983 by six entrepreneurs, and headquartered in Cambridge, Massachusetts, Monitor advises for- profit, sovereign, and non-profit clients on growing their businesses and economies and furthering their charitable purposes. Monitor and several affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 12-13042 to 12-13062) on Nov. 7, 2012. Judge Hon. Christopher S. Sontchi presides over the case. Pepper Hamilton LLP and Ropes & Gray LLP serve as the Debtors' counsel. The financial advisor is Carl Marks Advisory Group LLC. Epiq Bankruptcy Solutions, LLC is the claims and noticing agent. The petitions were signed by Bansi Nagji, president. Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the Committee of Unsecured Creditors as counsel. Bank of America is represented in the case by Jinsoo Kim, Esq., and Timothy Graulich, Esq., at Davis Polk & Wardwell LLP; and Mark D. Collins, Esq., at Richards Layton & Finger PA. J. Gregory Milmoe, Esq., and Shana A. Elberg, Esq., at Skadden Arps Slate Meagher & Flom LLP in New York; and Mark Chehi, Esq., and Christopher DiVirgilio, Esq., at Skadden Arps in Delaware, represent Deloitte Consulting LLP. Caltius Partners IV LP; Caltius Partners Executive IV, LP; and CP IV Pass-Through (Monitor) LP are represented by John Sieger, Esq., at Katten Muchin Rosenman LLP. Monitor's consolidated unaudited financial statements as of June 30, 2012, which include the assets and liabilities of non- Debtor foreign subsidiaries, reflected total assets of roughly $202 million (including $93 million in current assets) and total liabilities of roughly $200 million. Monitor filed for bankruptcy to sell substantially all of their businesses and assets to Deloitte Consulting LLP, a Delaware registered limited liability partnership and DCSH Limited, a UK company limited by shares, subject to higher or otherwise better offers. The base purchase price set forth in the Stalking Horse Agreement is $116.2 million, plus (i) assumption of certain liabilities and (ii) certain cure costs for assumed contracts. The Stalking Horse Agreement provides for the Stalking Horse Bidder to receive a combined breakup fee and expense reimbursement of $4 million. The Debtors held an auction on Nov. 28, 2012, at the offices of the Sellers' counsel, Ropes & Gray LLP in New York. In mid- January 2013, Judge Sontchi allowed the Debtors to sell its assets to Deloitte Consulting for $116.2 million. MONITOR COMPANY: Seeks Conversion to Chapter 7 ---------------------------------------------- MCG Limited Partnership, f/k/a Monitor Company Group, and its debtor affiliates, the Official Committee of Unsecured Creditors, and Caltius Partners IV, LP, jointly ask the U.S. Bankruptcy Court for the District of Delaware to convert the Chapter 11 cases to cases under Chapter 7 of the Bankruptcy Code. To recall, the Debtors sold substantially all of their assets to Deloitte Consulting LLP and DSCH Limited. The Sale closed in January. Pursuant to the terms of the Sale, the Debtors and the Buyer entered into a Transition Services Agreement, which required the Debtors to undertake certain obligations to assist in the Sale and the transition of the assets to the Buyer from the Debtors. The Debtors' obligations under the TSA expired as of June 30, 2013, and the Buyer's obligations to provide certain services to the Debtors under the TSA expired July 15, 2013. The parties believe that the most effective and efficient administration of the bankruptcy cases will be pursuant to Chapter 7. Caltius has agreed to certain carve-outs from proceeds of the Sale for payment of Chapter 11 and other administrative expenses. Specifically, the Carve-Out consists of: -- the Pre-Sale Carve-Out, which includes amounts necessary to permit the payment of accrued and unpaid professional fees and disbursements that are ultimately allowed by an order of the Bankruptcy Court incurred by the Debtors and the Creditors' Committee prior to and including Jan. 11, 2013; -- the payment of accrued and unpaid administrative expenses incurred by the Debtors in the ordinary course of their business prior to the closing of the Sale, in an amount not to exceed $1.950 million; -- the payment of accrued and unpaid professional fees and disbursements incurred by the Debtors and the Committee, the fee auditor, and Epiq Systems, Inc., prior to and including the date of conversion of the bankruptcy cases; -- Chapter 7 expenses in an amount not to exceed $50,000; -- the payment of all fees pursuant to Section 1930 of Title 28 of the U.S. Code; -- $2.3 million for payment of any and all amounts required to avoid liability of natural persons due to those persons' control or oversight of the Debtors or otherwise as responsible persons or persons with day-to-day management or control; -- $1.0 million for the payment of reasonable professional and other fees and expenses incurred in connection with the calculation and payment of Trust Fund Obligations and estate tax filings; and -- $4.363 million to be used in an manner consistent with the extended Wind Down Budget. As a result of engagement of the Debtors' employees in responding to an audit by the Internal Revenue Service related to the 2011 tax year, certain work by the Debtors' employees in preparation for filing 2012 and 2013 tax returns has not been completed and is expected to be completed after conversion of the bankruptcy cases. Certain obligations under the Deloitte Asset Purchase Agreement, including the preparation and filing of 2012 and 2013 tax returns and the transfers of certain investment partnerships, have also not been completed. The Debtors have asked an additional commitment from Caltius beyond the Carve Out to cover certain post-conversion expenses related to the preparation of the Debtors' 2012 and 2013 tax returns. Caltius has asserted that sufficient funds already exist in the Carve Out for that purpose. However, Caltius has agreed to work in good faith with the Debtors to make amendments to the Carve Out with respect to post- conversion costs to prepare the Debtors' 2012 and 2013 tax returns that are necessary and mutually agreeable. The Parties ask that these cases be converted after payment of fees and expenses allowed pursuant to fee applications for the quarter ended March 31, 2013 scheduled for hearing on Aug. 5, 2013. The Parties further ask that the Court schedule a filing deadline, objection deadline and hearing date for the submission and allowance of final Chapter 11 fee applications for professionals for the Debtors and the Committee. A hearing on the motion will be held on Aug. 5, 2013, at 10:00 a.m. (ET). Objections are due July 29. David B. Stratton, Esq., James C. Carignan, Esq., and John H. Schanne II, Esq., at PEPPER HAMILTON LLP, in Wilmington, Delaware; D. Ross Martin, Esq., James M. Wilton, Esq., and Jonathan P. Reisman, Esq., at ROPES & GRAY LLP, in Boston, Massachusetts; and Adam J. Goldstein, Esq., at ROPES & GRAY LLP, in New York, for the Debtors. Norman L. Pernick, Esq., at COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A., in Wilmington, Delaware; and Warren A. Usatine, Esq., and Ryan T. Jareck, Esq., at COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A., in Hackensack, New Jersey; and Michael D. Warner, Esq., at COLE, SCHOTZ, MEISEL, FORMAN & LEONARD, P.A., in Fort Worth, Texas, for the Creditors' Committee. Jeremy W. Ryan, Esq., and Ryan M. Murphy, Esq., at POTTER ANDERSON & CORROON LLP, in Wilmington, Delaware; and John P. Sieger, Esq., and Peter A. Siddiqui, Esq., at KATTEN MUCHIN ROSENMAN LLP, in Chicago, Illinois, for Caltius. About Monitor Company Monitor Company Group LP -- http://www.monitor.com/-- is a global consulting firm with 1,200 personnel in offices across 17 countries worldwide. Founded in 1983 by six entrepreneurs, and headquartered in Cambridge, Massachusetts, Monitor advises for- profit, sovereign, and non-profit clients on growing their businesses and economies and furthering their charitable purposes. Monitor and several affiliates filed for Chapter 11 bankruptcy (Bankr. D. Del. Case Nos. 12-13042 to 12-13062) on Nov. 7, 2012. Judge Hon. Christopher S. Sontchi presides over the case. Pepper Hamilton LLP and Ropes & Gray LLP serve as the Debtors' counsel. The financial advisor is Carl Marks Advisory Group LLC. Epiq Bankruptcy Solutions, LLC is the claims and noticing agent. The petitions were signed by Bansi Nagji, president. Cole, Schotz, Meisel, Forman & Leonard, P.A., represents the Committee of Unsecured Creditors as counsel. Bank of America is represented in the case by Jinsoo Kim, Esq., and Timothy Graulich, Esq., at Davis Polk & Wardwell LLP; and Mark D. Collins, Esq., at Richards Layton & Finger PA. J. Gregory Milmoe, Esq., and Shana A. Elberg, Esq., at Skadden Arps Slate Meagher & Flom LLP in New York; and Mark Chehi, Esq., and Christopher DiVirgilio, Esq., at Skadden Arps in Delaware, represent Deloitte Consulting LLP. Caltius Partners IV LP; Caltius Partners Executive IV, LP; and CP IV Pass-Through (Monitor) LP are represented by John Sieger, Esq., at Katten Muchin Rosenman LLP. Monitor's consolidated unaudited financial statements as of June 30, 2012, which include the assets and liabilities of non- Debtor foreign subsidiaries, reflected total assets of roughly $202 million (including $93 million in current assets) and total liabilities of roughly $200 million. Monitor filed for bankruptcy to sell substantially all of their businesses and assets to Deloitte Consulting LLP, a Delaware registered limited liability partnership and DCSH Limited, a UK company limited by shares, subject to higher or otherwise better offers. The base purchase price set forth in the Stalking Horse Agreement is $116.2 million, plus (i) assumption of certain liabilities and (ii) certain cure costs for assumed contracts. The Stalking Horse Agreement provides for the Stalking Horse Bidder to receive a combined breakup fee and expense reimbursement of $4 million. The Debtors held an auction on Nov. 28, 2012, at the offices of the Sellers' counsel, Ropes & Gray LLP in New York. In mid- January 2013, Judge Sontchi allowed the Debtors to sell its assets to Deloitte Consulting for $116.2 million. MSR RESORT: Slams Five Mile's Objection to $2MM DIP Loan -------------------------------------------------------- Kathryn Brenzel of BankruptcyLaw360 reported that Paulson & Co.'s bankrupt real estate investment trust MSR Hotels & Resorts Inc. on Monday urged a New York federal judge to approve $2 million in post-petition financing against objections raised by Five Mile Capital Partners LLC, arguing that the financing is its only avenue for covering its bankruptcy bills. According to the report, the REIT fired back against Five Mile's arguments that debtor-in-position financing was unnecessary and shifted control of MSR's Chapter 11 proceedings to its lender, claiming that the facility is the best and only way MSR can continue to operate. 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. MUSCLEPHARM CORP: Amends 1.7 Million Shares Resale Prospectus ------------------------------------------------------------- MusclePharm Corporation has filed with the U.S. Securities and Exchange Commission a first amendment to the Form S-1 relating to the registration of 1.74 million shares of common stock, $0.001 par value per share, of the Company for resale by Alder Capital Partners I, LP, The Feinberg Family Trust, Christopher F. Egan 2002 Living Trust, et al., of which 703,236 were issued to them in the March 2013 Private Placement, 100,000 shares were issued in a May 2013 Private Placement, 150,000 were issued in a June 2013 Private Placement and an aggregate of 787,455 of which were issued pursuant to three consulting agreements. The Selling Shareholders will receive all of the net proceeds from the offering of their shares. The Company's common stock is presently quoted on the OTCBB under the symbol "MSLP.OB". On July 9, 2013, the last reported sale price for the Company's common stock on the OTC BB was $10.85 per share. A copy of the amended prospectus is availabale for free at: http://is.gd/VC7jYZ About MusclePharm Headquartered in Denver, Colorado, MusclePharm Corporation (OTC BB: MSLP) -- http://www.muslepharm.com/-- is a healthy life- style company that develops and manufactures a full line of National Science Foundation approved nutritional supplements that are 100 percent free of banned substances. MusclePharm is sold in over 120 countries and available in over 5,000 U.S. retail outlets, including GNC and Vitamin Shoppe. MusclePharm products are also sold in over 100 online stores, including bodybuilding.com, Amazon.com and Vitacost.com. The Company reported a net loss of $23.28 million in 2011, compared with a net loss of $19.56 million in 2010. The Company's balance sheet at March 31, 2013, showed $20.53 million in total assets, $13.31 million in total liabilities and $7.22 million in total stockholders' equity. In the auditors' report accompanying the consolidated financial statements for the year ended Dec. 31, 2011, Berman & Company, P.A., in Boca Raton, Florida, expressed substantial doubt about the Company's ability to continue as a going concern. The independent auditors noted that the Company has a net loss of $23,280,950 and net cash used in operations of $5,801,761 for the year ended Dec. 31, 2011; and has a working capital deficit of $13,693,267, and a stockholders' deficit of $12,971,212 at Dec. 31, 2011. NATIONAL HOLDINGS: Registers 24 Million Common Shares ----------------------------------------------------- National Holdings Corporation filed a Form S-4 registration statement with the U.S. Securities and Exchange Commission to register 24 million shares of common stock at a proposed maximum aggregate offering price of $7.2 million. On June 20, 2013, National and Gilman Ciocia, Inc., entered into an Agreement and Plan of Merger by and among National, Gilman and National Acquisition Corp., and a wholly-owned subsidiary of National or "Merger Sub". In the proposed merger, Merger Sub will be merged with and into Gilman, so that Gilman will become a wholly-owned subsidiary of National. If the merger is completed: * National stockholders will continue to own their existing shares of National common stock, par value $0.02 per share; * all of the outstanding shares of Gilman common stock, par value $0.01 per share, outstanding as of the effective time of the merger will be exchanged for a total of up to 24,000,000 shares of National common stock, par value $0.02 per share, which equates to an exchange ratio of 0.248843451 shares of National common stock for each share of Gilman common stock, subject to adjustment; * National wll issue five-year options to purchase 1,750,000 shares of National common stock to certain employees and independent contractors of Gilman at an exercise price of $0.50 per share; * National will pay off up to $5,400,000 of outstanding indebtedness of Gilman which shall exclude any capital leases, leasehold improvements, insurance premium financing and financing of the AT&T equipment lease of Gilman or its subsidiaries; and * the board of directors of National will be increased from nine members to 11 members and two persons nominated by the board of directors of Gilman and reasonably acceptable to National will be elected as Class I members of the board of directors of National and National will nominate such persons for election at the next election of Class I directors of National. If the merger agreement is completed, Gilman will survive the merger as a wholly-owned subsidiary of National and will still be named Gilman Ciocia, Inc., after the merger and all Gilman stockholders will become stockholders of National. The merger is subject to the approval of Gilman stockholders. National's common stock is quoted on the OTC Bulletin Board under the symbol "NHLD." On July 11, 2013, the closing, high and low price for National common stock reported was $0.30 per share, $0.30 and $0.30, respectively. On July 11, 2013, National had 89,016,988 shares of common stock outstanding. Gilman's common stock is quoted on the OTC Bulletin Board under the symbol "GTAX." On July 11, 2013, the closing, high and low price for Gilman common stock reported was $0.06, $0.06 and $0.06, respectively. On July 11, 2013, Gilman had 96,446,179 shares of common stock outstanding. A copy of the Form S-4 is available for free at: http://is.gd/4Q4peP About National Holdings New York, N.Y.-based National Holdings Corporation is a financial services organization, operating primarily through its wholly owned subsidiaries, National Securities Corporation, Finance Investments, Inc., and EquityStation, Inc. The Broker-Dealer Subsidiaries conduct a national securities brokerage business through their main offices in New York, New York, Boca Raton, Florida, and Seattle, Washington. The Company incurred a net loss of $1.93 million for the year ended Sept. 30, 2012, compared with a net loss of $4.71 million during the prior year. The Company's balance sheet at March 31, 2013, showed $23.85 million in total assets, $12.88 million in total liabilities and $10.97 million in total stockholders' equity. Sherb & Co., LLP, in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Sept. 30, 2012. The independent auditors noted that the Company has incurred significant losses and has a working capital deficit as of Sept. 30, 2012, that raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "Our independent public accounting firm has issued an opinion on our consolidated financial statements that states that the consolidated financial statements were prepared assuming we will continue as a going concern and further states that our recurring losses from operations, stockholders' deficit and inability to generate sufficient cash flow to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern. Our future is dependent on our ability to sustain profitability and obtain additional financing. If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. Bankruptcy Code." NEXT 1 INTERACTIVE: Delays Form 10-Q for May 31 Quarter ------------------------------------------------------- Next 1 Interactive, Inc., informed the U.S. Securities and Exchange Commission that it will be delayed in the filing of its quarterly report on Form 10-Q for the period ended May 31, 2013. The delay was due to the Company's failure to obtain all information prior to filing date, complete the required financial statements, and complete management's discussion and analysis of those financial statements by July 15, 2013. About Next 1 Interactive Weston, Fla.-based Next 1 Interactive, Inc., is the parent company of RRTV Network (formerly Resort & Residence TV), Next Trip -- its travel division, and Next One Realty -- its real estate division. The Company is positioning itself to emerge as a multi revenue stream "Next Generation" media-company, representing the convergence of TV, mobile devices and the Internet by providing multiple platform dynamics for interactivity on TV, Video On Demand (VOD) and web solutions. The Company has worked with multiple distributors beta testing its platforms as part of its roll out of TV programming and VOD Networks. The list of multi- system operators the Company has worked with includes Comcast, Cox, Time Warner and Direct TV. At present the Company operates the Home Tour Network through its minority owned/joint venture real estate partner -- RealBiz Media. As of July 17, 2012, the Home Tour Network features over 4,300 home listings in four cities on the Cox Communications network. Next 1 Interactive disclosed a net loss attributable to the Company of $4.19 million on $987,115 of total revenues for the year ended Feb. 28, 2013, as compared with a net loss attributable to the Company of $13.65 million on $1.29 million of total revenues for the year ended Feb. 29, 2012. As of Feb. 28, 2013, the Company had $4.58 million in total assets, $13.70 million in total liabilities and a $9.11 million total stockholders' deficit. D'Arelli Pruzansky, P.A., in Boca Raton, Florida, issued a "going concern" qualification on the consolidated financial statements for the year ended Feb. 28, 2013. The independent auditors noted that the Company has incurred losses of $4,233,102 for the year ended Feb. 28, 2013, and the Company had an accumulated deficit of $71,193,862 and a working capital deficit of $13,371,094 at Feb. 28, 2013. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Bankruptcy Warning "If we continue to experience liquidity issues and are unable to generate revenue, we may be unable to repay our outstanding debt when due and may be forced to seek protection under the federal bankruptcy laws," according to the Company's annual report for the year ended Feb. 28, 2013. NNN PARKWAY: WBCMT 2007-C31 Seeks to Dismiss Case ------------------------------------------------- WBCMT 2007-C31 Amberpark Office Limited Partnership is asking the U.S. Bankruptcy Court to dismiss the chapter 11 case of NNN Parkway 400 26, LLC. The motion will be heard before the Honorable Theodor C. Albert on Aug. 7, 2013 at 10:00 a.m. in Courtroom 5B, United States Bankruptcy Court, 411 West Fourth Street, Suite 6135, in Santa Ana, California. The Debtor owns an undivided 2.31% tenant in common interest in real and personal commercial property commonly known as "Parkway 400" located at 11720 and 11800 Amber Park Drive, Alpharetta, Fulton County, Georgia. As of the Petition Date, there were approximately 35 non-debtor tenant in common owners that comprised the remaining tenant in common interests in the Property. Lender WBCMT 2007-C31 says this single asset case real estate case is a classic "bad faith" filing and should be dismissed. The Debtor, in concert with the non-debtor TICs and its real estate "consultant," filed this chapter 11 proceeding as a strategy to halt the Lender's valid, non-judicial foreclosure of its lien and to force Lender to negotiate away its contracted-for rights. According to the Lender, since the Petition Date, the Debtor has done nothing to advance the reorganization of the Debtor's business, demonstrating that the sole reason for filing this case was to delay the Lender's foreclosure. The Debtor's inaction, however, is not surprising, as there is nothing to reorganize, and, even if there were, the Debtor has no ability to reorganize it. Before the Petition Date, the Debtor and the Non-Debtor TICs organized as passive-investor tenants-in-common to take advantage of certain tax regulations. Now that their investment has failed, they are attempting to shift the risk of their disappointing investment and failed strategy to Lender. WBCMT notes that the TIC arrangement was purposefully structured as a passive investment vehicle. The Debtor is a mere holding company with no employees, no historical or current business operations and no current cash flow that does not constitute Lender's cash collateral. The Debtor has no typical ownership rights in the Property. The Debtor, WBCMT notes, does not have the right to possess the Property, to manage the Property, or even to determine who will manage the Property. The Debtor has no rights to any of the rents from the Property -- its sole right is to receive any profits from the Property after payment of operating expenses and debt service, and only if an event of default has not occurred. And although the Debtor owns only a 2.31% interest in the Property, it is jointly and severally liable for the entire amount of the Loan, which had an outstanding balance as of the Petition Date of approximately $32 million. The Lender also points out that there is no equity in the Property and the Debtor has no source of income to pay the administrative costs of this bankruptcy case, let alone to fund a reorganization. The Debtor's lack of assets, business operations and lack of cash flow has rendered this case administratively insolvent from the beginning. Finally, this bankruptcy filing was part and product of a scheme orchestrated by Breakwater to improperly use the protections of the Bankruptcy Code for the benefit of non-debtor entities, WBCMT tells the Court. Attorneys for WBCMT 2007-C31 can be reached at: Charles R. Gibbs, Esq. Marty L. Brimmage, Jr., Esq. Eric C. Seitz, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP 1700 Pacific Avenue, Suite 4100 Dallas, TX 75201 Tel: 214-969-2800 Fax: 214-969-4343 - and - Christina M. Padien, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP 2029 Century Park East, Suite 2400 Los Angeles, CA 90067 Tel: 310-229-1000 Fax: 310-229-1001 About NNN Parkway 400 NNN Parkway 400 26, LLC, filed a bare-bones Chapter 11 petition (Bankr. C.D. Cal. Case No. 12-24593) in Santa Ana, California, on Dec. 31, 2012. According to the docket, the schedules of assets and liabilities, the statement of financial affairs and other incomplete filings are due Jan. 14, 2013. Dana Point, California-based NNN Parkway estimated assets and debts of $10 million to $50 million. The Law Office of Christine E. Baur and David A. Lee, Esq., at Weiland, Golden, Smiley, Wang Ekvall & Strok, LLP, represent the Debtor. NOVA CHEMICALS: Fitch Rates Proposed $500MM Notes 'BB+' ------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to NOVA Chemicals Corporation's (NOVA) proposed $500 million note issuance with a tenor of 10 years. The Rating Outlook is Stable. Notes The notes will be senior unsecured obligations of NOVA and will rank equally with most of the company's $715 million of debt outstanding at March 31, 2013. NOVA plans to use a portion of the proceeds to fund its tender offer and consent solicitation for any and all of its $350 million 8 3/8% 2016 notes. Any remaining proceeds will be used for general corporate purposes. On June 5, 2013, Fitch upgraded NOVA's Issuer Default Rating (IDR), unsecured bank credit facilities, and senior unsecured notes to 'BB+' from 'BB' and its secured credit facility to 'BBB-' from 'BB+'. Key Rating Drivers NOVA's ratings are based on its continued strong operating performance and its substantial debt paydown since 2011. NOVA benefits from robust demand and tight supply in its core Olefins/Polyolefins segment, which mainly produces ethylene and polyethylene. The resulting favorable supply environment coupled with low costs for light feedstock has resulted in high operating profits and margins. In the latest 12 months (LTM) period ended March 31, 2013, NOVA had operating EBITDA of approximately $1.2 billion, corresponding to a margin of 23.5%, based on $5 billion of revenues. The company's performance resulted in significant LTM free cash flow (FCF) of $525 million, based on $966 million of cash flow from operations, $360 million of capital expenditures and $75 million of capital distributions. However, Fitch does not anticipate NOVA will continue generating FCF. In April, NOVA increased its distribution to $150 million. The company also is ramping its cap ex spend to accomplish its NOVA 2020 strategy. Fitch expects NOVA to produce negative FCF in 2013, 2014 and 2015 as the company's spend for planned projects and cash distributions outpace cash from operations. In the October 2012, NOVA repaid its $400 million floating rate notes due 2013 at par. In March, it repaid its $100 million 2025 notes. Repayment and stronger operating performance reduced the company's gross balance sheet debt to EBITDA leverage to 0.6x. Total balance sheet debt has fallen to $715 million at March 31, 2013 from $1.7 billion at Dec. 31, 2011. The strengthening of the company's credit profile partially mitigates the key ratings constraints, the price volatilities and the demand and supply cyclicality of commodity chemicals. Prices for the company's commodity products sold to third party customers (ethylene, polyethylene, polystyrene and by-products) are volatile as they follow the cyclicality of the industry, which is not only influenced by the economic demand cycle but also by the industry's supply dynamics. Typically, capacity additions come in very sizeable increments and are often executed by multiple industry participants at the same time. After these additions have come online, it often takes several years to absorb the resulting supply glut. Based on current announcements, North American ethylene production could see up to 10 million metric tons of additional annual capacity coming online by 2019. If fully completed, these additions would correspond to approximately 37% of U.S. capacity according ICIS and would have the potential to reverse the currently favorable environment. NOVA is planning on expanding its ethylene production capacity as well as building downstream facilities. It recently announced board approval of a third LLDPE reactor at Joffre with capital spend totaling $1 billion. NOVA has minimal short-term debt maturities, but in November 2014 the 8 5/8% 2019s are callable at 104.31. The company's only significant maturities are the $350 million notes due 2016, for which the company is tendering, the $350 million notes due 2019, and the proposed $500 million notes due 2023. The Stable Rating Outlook is based on Fitch's expectation that the favorable ethylene and polyethylene industry dynamics in North America will be sustained for the next few years. Costs for light feedstock are expected to remain low and, despite the announced capacity additions, ethylene and ethylene derivative supplies should remain tight. Fitch expects that NOVA will continue to generate meaningful profits and operating cash flows in the near and intermediate term as the announced capacity additions will come online only gradually and over an extended period of time. NOVA has robust liquidity that will enable the company to fund working capital and capital expenditure requirements and to withstand less favorable industry conditions, if a reversal of the positive dynamics were to occur. At March 31, 2013, NOVA had liquidity of $1.05 billion, consisting of $499 million cash on- hand and $546 million available under its syndicated and bilateral credit facilities. NOVA's main $425 million senior secured credit facility, which matures in December 2016, is governed by a senior debt-to-cash- flow covenant of max 3x and a debt-to- capitalization covenant of max 60%. NOVA was in compliance with these covenants at March 31, 2013. Fitch expects the company to remain in compliance throughout the lifetime of the facility. The facility is secured by the net book value of assets in Canada, including NOVA's interest in the Joffre, Alberta chemical complex and the Corunna, Ontario facility. The value of the collateral justifies the one notch rating differential over the IDR and the senior unsecured debt and investment grade rating. In addition, NOVA has $140 million senior unsecured bilateral revolving credit facilities, which are not governed by the financial covenants described above. Of these facilities, $40 million expires in September 2013 and $100 million in September 2015. Additional liquidity comes from the company's $225 million fully available A/R securitization programs, which is governed by the same set of financial covenants as the $425 million secured facility, and a $125 million bilateral LC facility with $80 million outstanding. The rating also incorporates potential upside from a series of agreements and memorandums of understanding with energy and pipeline companies to enhance the availability of cost-competitive light feedstock at NOVA's production facilities. In fiscal 2012, NOVA ran its main Joffre, Alberta production complex below nameplate capacity due to limited availability of ethane, which was derived from natural gas flow to the U.S. from Canada. Alternative supply from sources ranging from North Dakota to Canadian oil sand upgrade facilities for the Joffre, Alberta complex and to the Marcellus Shale Basin for the Corunna, Ontario facility, will come online beginning in 2013. The anticipated incremental supply of light feedstock will allow NOVA to operate its facilities at full capacity during periods of peak demand for its olefins and polyolefins products. Rating Sensitivities Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Meaningful progress in capital spending plans with limited need to add to debt levels; -- Hard credit support from IPIC. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- A sustained return of adverse economic conditions and excess capacity for the chemical industry leading to weak sales and profits; -- A sharp erosion of the company's feedstock advantage resulting in higher debt funding during the capex buildout period; -- Expectations for prolonged meaningful negative FCF leading to debt levels where leverage is sustained around 3.0x on a total debt to EBITDA basis through the cycle; -- Substantially increased distributions to IPIC funded by debt. Fitch rates NOVA as follows: -- Long-term IDR at 'BB+'; -- Senior secured revolving credit facility at 'BBB-'; -- Senior unsecured revolving credit facilities at 'BB+'; -- Senior unsecured notes at 'BB+'. The Rating Outlook is Stable. NOVA CHEMICALS: $500MM Sr. Notes Issue Gets Moody's Ba2 Rating -------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to Nova Chemicals Corporation's $500 million senior unsecured notes due 2023. Proceeds from the notes will be used to repay its senior notes due 2016 and for general corporate purposes. The rating on NOVA's 2016 notes will be withdrawn upon completion of the transaction. The outlook is stable. Ratings assigned for NOVA Chemicals Corporation: $500 million senior unsecured notes due 2023 at Ba2 (LGD4, 56%) "NOVA's performance continues to be excellent, rebounding nicely in the first quarter of 2013 after a somewhat weaker second half of 2012," stated John Rogers, Senior Vice President at Moody's. "We expect that credit metrics to remain strong due the feedstock advantage at Joffe and expectation for the conversion of the Corunna facility to ethane from the Marcellus Shale in the second half of 2013." Ratings Rationale: The Ba2 rating on the new notes reflects their junior position in the capital structure relative to the company's $425 million secured credit facility. NOVA's Ba1 Corporate Family Rating reflects its stand-alone credit profile of Ba3 and the assumption of support from IPIC, which provides two notches of rating uplift. NOVA's stand-alone credit profile primarily reflects its limited operational, geographic and product diversity, as well as the inherent volatility in global petrochemical prices. However, its credit metrics will likely remain very strong due to low feedstock prices at its Joffre facility. NOVA's Joffre facility typically generates 80-90% of the company's operating profit and EBITDA. NOVA has announced several projects that should greatly improve its production volumes and financial performance - increasing the availability of feedstock to Joffre site and converting its Corunna facility to lighter feedstocks. The company expects that the Corunna facility will begin consuming ethane from the Marcellus Shale basin in the second half of 2013, with the project reaching full completion in early 2014. The rating outlook is stable. However, once the Corunna facility has been converted to ethane and becomes a greater contributor to earnings, Moody's would likely raise the ratings to investment grade. There is limited downside risk to the rating at the current time. However, if feedstock prices rise such that the company no longer maintains a feedstock advantage relative to other global producers or if IPIC fails to provide support for the company in the event of financial stress, Moody's would lower the rating. NOVA's SGL-2 Speculative Grade Liquidity Rating reflects its cash balances ($499 million as of March 31, 2013), the expectation of significant cash flow in 2013 despite heavy capital spending, substantial utilization of its accounts receivable program and minimal use of its secured and unsecured revolvers. Moody's expects that the company will be more than capable of covering its capital expenditure and working capital needs through 2013. The principal methodology used in this rating was Global Chemical Industry 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. Nova Chemicals Company, headquartered in Calgary, Alberta, Canada, is a leading producer of ethylene and polyethylene. NOVA reported revenues of $5 billion for the year ended March 31, 2013. In July 2009, Nova was purchased by the International Petroleum Investment Company. IPIC is wholly owned by the Government of Abu Dhabi. Its mandate is to invest in the hydrocarbon sector outside the Emirate of Abu Dhabi and is rated Aa3 by Moody's. NOVA CHEMICALS: S&P Assigns 'BB+' Rating to $500MM 10-Yr. Notes --------------------------------------------------------------- Standard & Poor's Ratings Services said it assigned its 'BB+' issue-level rating, and '3' recovery rating, to Calgary, Alta.- based NOVA Chemicals Corp.'s (NOVA) proposed US$500 million 10- year senior unsecured notes due 2023. The '3' recovery rating indicates S&P's expectation of meaningful (50%-70%) recovery for noteholders in the event of a default. The corporate credit rating on NOVA is 'BB+'. The notes are senior unsecured obligations of NOVA and will rank equally with all existing and future senior debt and rank junior to all existing and future secured debt. S&P understands that net proceeds from the notes will be used to repay the company's existing US$350 million 8.375% senior notes due 2016 (including related fees and expenses), with the remaining net proceeds being used for general corporate purposes. "The ratings on NOVA reflect what we view as the company's fair business risk profile and intermediate financial risk profile, as well as one notch of lift to recognize parental support from NOVA's parent, International Petroleum Investment Co.," said Standard & Poor's credit analyst David Fisher. S&P's "fair" business risk profile on NOVA primarily reflects the company's favorable competitive position in its core olefins/polyolefins business, somewhat offset by the cyclical and competitive operating environment in the commodity chemicals sector in which NOVA operates. S&P views NOVA's financial risk profile as "intermediate". While current credit metrics are stronger than those typically indicative of an intermediate financial risk profile, S&P's assessment reflects its view that adjusted debt may increase from current levels as the company invests in projects under its NOVA 2020 strategy. In addition, given the volatile nature of commodity chemicals, S&P tends to view leverage and EBITDA generation on a through-the-cycle basis, based on the average EBITDA in the past five years. RATINGS LIST NOVA Chemicals Corp. Corporate credit rating BB+/Stable/-- Rating Assigned Senior unsecured US$500 million 10-year notes BB+ Recovery rating 3 OCALA FUNDING: Liquidation Plan Declared Effective -------------------------------------------------- Ocala Funding, LLC, notified the U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, that all conditions precedent to the Effective Date of the Chapter 11 Plan of Liquidation have been satisfied, and that the Effective Date occurred on July 1, 2013. The notice was filed by Edward J. Peterson, III, Esq., Russell M. Blain, Esq., at Stichter, Riedel, Blain & Prosser, P.A., in Tampa, Florida; and Jeff J. Marwil, Esq., Paul V. Possinger, Esq., Jeremy T. Stillings, Esq., at Proskauer Rose LLP, in Tampa, Florida, on behalf of the Debtor. About Ocala Funding Orange, Florida-based Ocala Funding, LLC, a funding vehicle once controlled by mortgage lender Taylor Bean & Whitaker Mortgage Corp., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 12-04524) in Jacksonville on July 10, 2012. Ocala Funding used to be the largest originator and servicer of residential loans. Ocala was created by Taylor Bean to purchase loans originated by TBW and selling the loans to third parties, Freddie Mac. In furtherance of this structure Ocala raised money from noteholders Deutsche Bank AG and BNP Paribas Mortgage Corp. and other financial institutions, as secured lenders through sales of asset-backed commercial paper. Ocala disclosed $1,747,749,787 in assets and $2,650,569,181 in liabilities as of the Chapter 11 filing. Taylor Bean was forced to file for Chapter 11 relief (Bankr. M.D. Fla. Case No. 09-07047) on Aug. 24, 2009, amid allegations of fraud by Taylor Bean's former CEO Lee Farkas and other employees. Mr. Farkas is now serving a 30-year prison term for 14 counts of conspiracy and fraud for being the mastermind of a $2.9 billion bank fraud. Mr. Farkas allegedly directed the sale of more than $1.5 billion in fake mortgage assets to Colonial Bank and misappropriated more than $1.5 billion from Ocala. TBW's bankruptcy also caused the demise of Colonial Bank, which for years was TBW's primary bank. TBW and its joint debtor-affiliates confirmed their Second Amended Joint Plan of Liquidation on July 21, 2011, and the TBW Plan became effective on Aug. 10, 2011. The TBW Plan established the TBW Plan Trust to marshal and distribute all remaining assets of TBW. Neil F. Lauria, as CRO for TBW and trustee of the TBW Plan Trust, signed the Chapter 11 petition of Ocala. Ocala holds 252 mortgage loans with an unpaid balance of $42.3 million as of May 31, 2012. The Debtor also holds five "real estate owned" properties resulting from foreclosures. The Debtor also holds $22.4 million in proceeds of mortgage loans previously owned by it that are on deposit in an account in the Debtor's name at Regions Bank. It also has an interest in $75 million in cash, consisting of proceeds of mortgage loans previously owned by the Debtor, that are in an account maintained by Bank of America, N.A. as prepetition indenture trustee for the benefit of the Noteholders. The Debtor also holds a claim in the current amount of $1.6 billion against the estate of TBW. The largest unsecured creditors include the Federal Deposit Insurance Corp., owed $898,873,958; and Cadwalader, Wickersham & Taft LLP, owed $1,632,385. Judge Jerry A. Funk presides over Ocala's case. Proskauer Rose LLP and Stichter, Riedel, Blain & Prosser, serve as Ocala's counsel. Neil F. Lauria at Navigant Capital Advisors, LLC, serves as the Debtor's Chief Restructuring Officer. OCD LLC: Wants Plan Filing Period Extended Until Nov. 7 ------------------------------------------------------- OCD, LLC, asks the U.S. Bankruptcy Court for the Southern District of New York to extend its exclusive periods to file a Chapter 11 plan and obtain acceptances of a plan through and including Nov. 7, 2013, and Jan. 6, 2014, respectively. According to the Debtor, it is not appropriate for it to consider the formulation and filing of a plan until after motions scheduled to be heard before the Court on July 26, 2013, are heard and determined. Thus, only then will the Debtor be in the position to formulate and filed its plan of reorganization and to seek its acceptance. The subject motions slated for a July 26 hearing are: 1. FTL Lorian, LLC's motion to vacate the automatic stay under 11 U.S.C. Section 362(d)(1) and (2); 2. FTL's motion to authorize the receiver to retain possession of the property (ECF Docket No. 41); and 3. The Debtor's motion seeking the approval of for debtor-in- possession financing pursuant to 11 U.S.C. Section 364. About OCD, LLC OCD, LLC, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 13-22416) on March 12, 2013. Charles E. Dewey, Jr., signed the petition as managing member. Judge Robert D. Drain presides over the case. The Debtor disclosed $28,014,340 in assets and $17,021,500 in liabilities as of the Chapter 11 filing. Jeffrey A. Reich, Esq., and Lawrence R. Reich, Esq., at Reich Reich & Reich, P.C., in White Plains, N.Y., represents the Debtor as counsel. OCEAN 4660: Court Permits DOJ Watchdog to Appoint Ch. 11 Trustee ---------------------------------------------------------------- Guy G. Gebhart, the U.S. Trustee for Region 12, the U.S. Department of Justice watchdog, sought and obtained authority from Judge John K. Olson of the U.S. Bankruptcy Court for the Southern District of Florida to appoint a trustee in the Chapter 11 case of Ocean 4660, LLC. The U.S. Trustee sought authority to appoint a Chapter 11 trustee, arguing, among other things, that there is gross management where the chief restructuring officer employed in the Chapter 11 case failed to immediately seek turnover of the Debtor's assets from former management when it first learned that the Debtor did not have a bank account and revenues received from its operation were not being remitted to the Debtor. Moreover, the U.S. Trustee points out that, because Rick Barreca, the CRO, was engaged the Debtor's sole shareholder, Hanna Polselli and her husband, and Mr. Barreca reports to Ms. Polselli, there has been, in fact, no change in the management of the Debtor. The U.S. Trustee also notes that Mr. Barreca has a prior existing relationship with the Polsellis, which results to conflicts of interest. Mr. Barreca's employment as CRO also drew objections from secured creditor Comerica Bank, which complained that the Debtor sought approval of the CRO employment under the controversial Section 363(b)(1) of the Bankruptcy Code, presumably to avoid having to satisfy the disinterestedness requirements of Section 327. Comerica also complained that Mr. Barreca fails to even satisfy the requirements of Section 363 as has no prior CRO experience and is not associated with a company that has any CRO or relevant bankruptcy or turnaround experience. Comerica Bank also sought for the appointment of a Chapter 11 Trustee. The U.S. Trustee also informed the Court that, until further notice, it will not appoint a committee of creditors pursuant to Section 1102 of the Bankruptcy Code. Jose A. Casal, Esq. -- jose.casal@hklaw.com -- and Joaquin J. Alemany, Esq. -- joaquin.alemany@hklaw.com -- at HOLLAND & KNIGHT LLP, in Miami, Florida, represent Comerica Bank. About Ocean 4660 Ocean 4660, LLC, owner of a beachfront property operated as the Lauderdale Beachside Hotel in Lauderdale-by-the-Sea, Florida, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 13-23165) in its hometown on June 2, 2013. Rick Barreca signed the petition as chief restructuring officer. Judge John K. Olson presides over the case. John H. Genovese, Esq., at Genovese Joblove & Battista, P.A., serves as the Debtor's counsel. RKJ Hotel Management, LLC, serves as hotel manager and RKJ's Rick Barreca has been tapped as the chief restructuring officer. The Lauderdale Beachside Hotel features a beach-front location, two five-story interior corridor buildings (east and west), 147 guest rooms, a beach front tiki bar and grill, a large adjoining restaurant and commercial kitchen space and on-site parking. The restaurant space and the tiki bar and grill are unoccupied. The occupancy rates have generally been between 40 percent and 70 percent occupancy. Room rates are $40 to $80 per night. The Company disclosed $15,762,871 in assets and $16,587,678 in liabilities as of the Chapter 11 filing. ONCURE HOLDINGS: Hearing on Bid Procedures Motion Set for July 24 ----------------------------------------------------------------- The hearing to consider the approval of the Motion for Order: (A) Establishing Bidding Procedures for the Sale of All or Substantially All of Oncure Holdings, Inc.'s Purchased Assets or New Stock Pursuant to a Chapter 11 Plan; (B) Approving Certain Stalking Horse Protections; (C) Authorizing and Scheduling a Date and Time for Auction Pursuant to Such Procedures; and (D) Granting Certain Related Relief, is scheduled for July 24, 2013, at 11:00 a.m. As reported in the TCR on June 26, 2013, Radiation Therapy Services Holdings Inc. was revealed to be the $125 million mystery bidder for private equity-owned OnCure Holdings, Inc. OnCure in a June 24 statement disclosed that it has entered into an investment agreement with Radiation Therapy Services, under which RTS has agreed to acquire OnCure for approximately $125 million, including $42.5 million in cash (plus covering certain expenses and subject to certain working capital adjustments) and up to $82.5 million in assumed debt. In addition, OnCure's secured noteholders have executed a restructuring support agreement outlining their commitment to support the transaction with RTS. With the execution of the investment agreement, RTS has agreed to be the lead bidder in a sale process to take place during the Chapter 11 cases. If RTS's bid is successful and receives Bankruptcy Court approval, the acquisition will be completed through OnCure's Chapter 11 plan of reorganization, which is expected to occur prior to the end of October 2013. About OnCure Holdings Headquartered in Englewood, Colorado, OnCure Holdings, Inc. -- http://www.oncure.com/-- provides management services and facilities to oncology physician groups throughout the country. OnCure Holdings and its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Case Nos. 13-11540 to 13-11562) in Wilmington on June 14, 2013. Bradford C. Burkett signed the petition as CEO. Judge Kevin Gross presides over the cases. On the Petition Date, the Debtors disclosed total assets of $179,327,000 and total debts of $250,379,000. There's at least $15 million owing on a first-lien term loan facility, as well as $210 million on prepetition secured notes. Paul E. Harner, Esq., Annemarie V. Reilly, Esq., Keith A. Simon, Esq., and Aaron M. Singer, Esq., at Latham & Watkins LLP, in New York, serve as the Debtors' lead bankruptcy counsel. Daniel J. DeFranceschi, Esq., Paul Noble Heath, Esq., William A. Romanowicz, Esq., Tyler D. Semmelman, Esq., and Zachary I. Shapiro, Esq., at Richards, Layton & Finger P.A., in Wilmington, Delaware, serve as the Debtors' local Delaware counsel. Kurtzman Carson Consultants is the claims and notice agent. Match Point Partners LLC provides management services to OnCure. Jefferies LLC serves as Financial Advisor and Investment Banker to the Debtors. The Debtors have signed a deal to sell the business to Radiation Therapy Services Holdings Inc. for $125 million, absent higher and better offers. RTS's offer comprises $42.5 million in cash (plus covering certain expenses and subject to certain working capital adjustments) and up to $82.5 million in assumed debt. Secured noteholders are supporting the RTS deal. Millstein & Co., Kirkland & Ellis LLP, Alvarez & Marsal and Deloitte advised Radiation Therapy in connection with the transaction. Promptly before the bankruptcy filing, the Debtors entered into a restructuring support agreement with the members of an ad hoc committee of its secured notes, constituting 100% of the lenders under the first lien term loan credit agreement and approximately 73% of the secured notes, pursuant to which they have agreed to support a stand-alone restructuring of the Debtors, subject to an auction process for a sale of substantially all of the Debtors' assets or the equity of the reorganized Debtors pursuant to a Chapter 11 plan. ORCHARD SUPPLY: Judge Approves Loan Over Creditor Opposition ------------------------------------------------------------ Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Orchard Supply Hardware Stores Corp. persuaded the Delaware bankruptcy judge at a hearing July 15 to approve $176 million in secured loans to finance the liquidating Chapter 11 case begun on June 17. According to the report, the official committee representing unsecured creditors opposed the financing, saying the chain of 91 hardware stores has positive cash flow, "significant unencumbered assets," and no need for the financing. There will be an auction for Orchard's business on Aug. 14. Assuming no bidding from other prospective buyers, competitor Lowe's Companies Inc. will buy 60 stores for $205 million under a contract signed before bankruptcy. Orchard is already closing eight stores in going-out-of-business sales. It has the right before July 31 to have the liquidator close other locations under the same terms. About Orchard Supply San Jose, Calif.-based Orchard Supply Hardware Stores Corporation operates neighborhood hardware and garden stores focused on paint, repair and the backyard. It was spun off from Sears Holdings Corp. in 2012. Orchard Supply and two affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 13-11565) on June 16 to facilitate a restructuring of the company's balance sheet and a sale of its assets for $205 million in cash to Lowe's Companies, Inc., absent higher and better offers. In addition to the $205 million cash, Lowe's has agreed to assume payables owed to nearly all of Orchard's supplier partners. Bankruptcy Judge Christopher S. Sontchi oversees the case. Michael W. Fox signed the petitions as senior vice president and general counsel. The Debtors disclosed total assets of $441,028,000 and total debts of $480,144,000. Stuart M. Brown, Esq., at DLA Piper LLP (US), in Wilmington, Delaware; and Richard A. Chesley, Esq., Chun I. Jang, Esq., and Daniel M. Simon, Esq., at DLA Piper LLP (US), in Chicago, Illinois, are the Debtors' counsel. Moelis & Company LLC serves as the Debtors' investment banker. FTI Consulting, Inc., serves as the Debtors' financial advisors. A&G Realty Partners, LLC, serves as the Debtors' real estate advisors. BMC Group Inc. is the Debtors' claims and noticing agent. PETROGLOBE INC: ATB Demands Repayment of Outstanding Indebtedness ----------------------------------------------------------------- PetroGlobe Inc. on July 17 disclosed that its lender, Alberta Treasury Branches, has made demand upon PetroGlobe for payment in full of its outstanding indebtedness in the aggregate amount of approximately $1.8 million plus accrued interest, costs and fees by the close of business on July 25, 2013. In addition, ATB has provided PetroGlobe with a Notice of Intention to Enforce Security pursuant to subsection 244(1) of the Bankruptcy and Insolvency Act (Canada). Management of PetroGlobe is working with its lender to come up with a plan to repay the indebtedness under the facility, which plan may include the sale of assets or corporate restructurings. If the Company is unable to satisfy the repayment requirement or enter into adequate forbearance arrangements with its lender, the lender may take realization remedies against the Company, or the Company may be forced to seek creditor protection or voluntary receivership in order to resolve the demand. There is a risk that the Company's assets may not be sufficient to satisfy the demand plus the costs associated with a realization or liquidation in respect thereof. PetroGlobe Inc. -- http://www.petroglobe.com-- is an upstream energy company active in the exploration and production of oil and natural gas in Alberta. PetroGlobe is engaged in the business of exploring, developing and producing oil and natural gas directly in Alberta, Canada. The Company's properties include Pembina Cardium light oil, Pembina Edmonton Sands natural gas, Red Earth Slave Point light oil and Sawtooth oil in the Grand Forks/Taber area of southern Alberta. PINETREE CAPITAL: Has Until Sept. 13 to Obtain Default Waiver ------------------------------------------------------------- Pinetree Capital Ltd. on July 16 disclosed that further to its July 12, 2013 press release, Equity Financial Trust Company, as trustee under the convertible debenture indenture dated May 17, 2011, as supplemented by the first supplemental indenture dated December 11, 2012, in each case, between the company and Equity Financial, which govern Pinetree's 8% convertible unsecured subordinated debentures due May 31, 2016, has given notice to Pinetree pursuant to the Indenture that the company is in default of the debt covenant which prohibits Pinetree's debt-to-assets ratio from exceeding 33% as at the end of each month. As at June 30, 2013, Pinetree's debt-to-assets ratio was 36%. In accordance with the Indenture, Pinetree is required to cure or obtain a waiver for the default by September 13, 2013. Failure to obtain a waiver or to cure will constitute an event of default under the Indenture. Pinetree will continue to monitor its debt ratio, which currently remains at a similar level to the June figure, and will consider the alternatives available to the company to cure the default or obtain a waiver of the default from the holders of the Debentures. About Pinetree Pinetree Capital Ltd. (TSX:PNP) was incorporated under the laws of the Province of Ontario. Pinetree is a diversified investment and venture capital firm focused on the small cap market. Pinetree's investments are primarily in the resources sector: Precious Metals, Base Metals, Oil and Gas, Potash, Lithium and Rare Earths, Uranium and Coal. PINNACLE ENTERTAINMENT: Fitch to Rate New $2.6BB Secured Debt BB+ ----------------------------------------------------------------- Fitch Ratings expects to rate Pinnacle Entertainment, Inc.'s (Pinnacle) proposed $2.6 billion senior secured credit facility 'BB+/RR1' and up to $800 million in new senior unsecured notes 'BB-/RR3'. Fitch also takes the following rating actions on Pinnacle: -- Issuer Default Rating (IDR) upgraded to 'B+' from 'B'; -- Existing senior secured credit facility upgraded to 'BB+/RR1' from 'BB/RR1'; -- Existing senior unsecured notes affirmed at 'BB-'; Recovery Rating (RR) revised to 'RR3' from 'RR2'; -- Subordinated unsecured notes affirmed at 'B-'; RR revised to 'RR6' from 'RR5'. The Rating Outlook is revised from Positive to Stable and the Rating Watch Negative on Pinnacle's unsecured senior and subordinated notes is removed. Fitch also expects to assign a 'BB-/RR3' to Ameristar Casino's (Ameristar) existing 7.5% senior unsecured notes being assumed by Pinnacle once the acquisition closes. The credit facility will include a $1 billion revolver and a $1.6 billion term loan. The proceeds from the credit facility and the new notes will be used to pay a $959 million cash consideration to Ameristar's shareholders, refinance $450 million of Pinnacle's 8.625% senior unsecured notes due 2017, repay approximately $1.2 billion outstanding on Ameristar's and Pinnacle's existing facilities and pay transaction costs. The acquisition is expected to close this quarter. Ameristar's 7.5% notes will be assumed by Pinnacle and Ameristar's operating subsidiaries will be guarantors of Pinnacle's debt. Rationale for IDR Upgrade The upgrade of the IDR to 'B+' reflects Pinnacle's improved business risk profile as a result of the Ameristar acquisition. Specifically, the merged company will be significantly more diversified with casino operations in 12 distinct markets and seven jurisdictions. No market will account for more than 21% of the company's pro forma property EBITDA. This compares to Pinnacle's current concentrations in Lake Charles, LA and St. Louis markets which account for 37% and 32% of the total EBITDA, respectively. The upgrade also takes into account Pinnacle's improved FCF profile as a result of the Ameristar acquisition and the wind-down of Pinnacle's development pipeline, which will be accelerated with the sale of Ameristar's Lake Charles project. Fitch forecasts run- rate FCF pro forma for the acquisition at around $300 million or $225 million once Pinnacle exhausts its net operating losses (NOLs) and becomes a federal tax payer around 2016. The improvement in the operating profile along with a healthy pro forma FCF profile largely offset Fitch's concern over the expected increase in Pinnacle's leverage pro forma for the acquisition financing. Fitch calculates Pinnacle's leverage pro forma for the acquisition roughly in the 6.25x-6.50x range, up from 5.1x as of March 31, 2013. The pro forma range takes into account conservative assumptions regarding the sale of Lumiere and the Lake Charles project, acquisition synergies and a full year of L'Auberge Baton Rouge operations. The pro forma leverage range is slightly high relative to Pinnacle's 'B+' IDR; however, Fitch expects Pinnacle to use its FCF to paydown debt and leverage to decline close to or below 6.0x by the end of 2014. Fitch forecasts leverage of 5.6x at year-end 2015 and 5.1x at year-end 2016. Pinnacle's publicly stated target leverage range has been 3.5x-5.0x. More recently the company has expressed a longer-term goal of getting to below 4x. Pinnacle will start generating substantial FCF as the company's development pipeline begins to wind-down. With the Lake Charles development being sold, Pinnacle's last project will be the VLT facility at River Downs, which will be complete by first-half 2014. Fitch expects the new credit facility to have a 50% excess cash flow sweep provision and the company has publicly stated its intention to use cash flow to deleverage its balance sheet. Fitch views the pending sale of the Lake Charles project and the successful covenant amendment/waiver consent from Ameristar noteholders favorably. On a standalone basis, Pinnacle was on track for an upgrade to 'B+' earlier this year, but the upgrade was delayed due to the additional leverage expected from the acquisition. Today's upgrade is supported by the lower pro forma leverage from the asset sales and the combined restricted groups. Fitch estimates that the sale of the Lake Charles project will reduce pro forma leverage down by approximately 0.2x-0.4x (see below for additional benefits from the sales). The consent agreement allows Pinnacle to combine Ameristar into its credit group, giving Pinnacle unencumbered access to Ameristar's cash flow. Free Cash Flow Fitch calculates Pinnacle's run rate FCF in the range of approximately $280 million to $330 million. This incorporates the following: -- $285 million of Pinnacle's LTM EBITDA after cash based corporate expenses plus; -- $348 million of Ameristar's LTM EBITDA after cash based corporate expenses plus; -- $15 million - $25 million of EBITDA to account for further ramp up at L'Auberge Baton Rouge (assumes $25 million - $35 million run rate EBITDA) plus; -- $40 million of synergies estimated by Pinnacle, which Fitch thinks is achievable minus; -- $34 million of EBITDA lost due to the sale of Lumiere Place minus; -- $10 million in state level income tax minus; -- $240 million - $260 million in interest expense minus; -- $80 million - $100 million in maintenance capital expenditures. Pinnacle estimates that it will not have to pay federal income taxes at least through 2015 due to its accumulated net operating losses (NOL). Once the NOLs are exhausted, Fitch estimates that Pinnacle's federal taxes owed will be in the ballpark of $75 million per year based on the same set of assumptions outlined above. EBITDA Forecast Fitch built a fair degree of conservatism into its EBITDA and FCF projections to account for variability related to general weakness in the regional gaming markets as well as new competition in Lake Charles, Bossier City and southern Indiana markets. Fitch's base case projection estimates that the combined company's same-store EBITDA will grow at a compounded growth rate of negative 2.9% from 2013 to 2016. Specifically Fitch makes the following assumptions: -- Belterra's EBITDA will decline roughly 30% cumulatively through mid-2015 due to cannibalization from Horseshoe Cincinnati and River Downs; -- L'Auberge Lake Charles' EBITDA will decline 25% in 2015; -- Boomtown Bossier City's EBITDA will decline about 17% cumulatively between mid-2013 and mid-2014. These declines will be partially offset by the opening of River Downs in first-half 2014, further ramp up at Baton Rouge and Fitch's expectation of low-single digit EBITDA growth at the properties not being impacted by new competition. Fitch's base case EBITDA forecast for River Downs is $35 million relative to the Scioto Downs in Columbus, OH, which is generating approximately $45 million - $50 million in EBITDA but operates in a less saturated market. Liquidity Pinnacle will have a healthy pro forma liquidity profile with $613 million available on its $1 billion revolver based on the company's latest disclosure. Pinnacle may draw on its revolver to fund Ameristar's Lake Charles project prior to the project's sale closing. The revolver might also be utilized for the completion of River City phase II and the construction of River Downs, although the combined company's FCF should be able to cover the associated costs. Pro forma for the refinancing of Pinnacle's 8.625% senior notes maturing 2017, the earliest maturity will be 2018 when the new revolver becomes due. The discretionary FCF is expected to remain well above $200 million. The last project in Pinnacle's development pipeline is River Downs, which will be complete in the first-half 2014. Pinnacle has another $201.5 million to spend on River Downs as of March 31, 2013. Antitrust Related Dispositions Pinnacle reached an agreement in principal with FTC, which involves the disposition of Pinnacle's Lumiere Place and Ameristar's Lake Charles development. Fitch views the dispositions favorably because: -- The sale proceeds will be used to repay debt with the sale of Lumiere Place likely to be deleveraging; -- Near-term liquidity and balance sheet strength will improve as Pinnacle will not need to draw on the revolver to fund the Lake Charles project (approximately $330 million - $350 million left to fund as of June 30, 3013); -- Exposure to gaming legalization in Texas will be reduced. Fitch estimates that a reasonable range for the combined sale proceeds is $320 million - $520 million. This assumes a sale multiple of 5.5x-7.5x for Lumiere and that Pinnacle recoups 50%- 100% of the amount invested in Lake Charles development through mid-August. In its base case forecast, Fitch uses $420 million, the mid-point of the range. Transaction Ratings The downward revision of the RRs on Pinnacle's unsecured debt reflects increased amount of secured debt in the capital structure pro forma for Ameristar acquisition. The initial credit facility capacity of $2.6 billion will be around 4x the combined company's EBITDA, up from Pinnacle's current 2.6x. However, Fitch expects the credit facility capacity relative to EBITDA to decline to 3.0x to 3.5x range after the paydown of the term loans using the Lake Charles and St. Louis asset sale proceeds as well as adjusting EBITDA for the acquisition synergies and full year of Baton Rouge operations. Pinnacle is restricted to 3.5x capacity on its credit facility per Ameristar note covenants. Ameristar notes remain mature in 2021 and are not callable until April 2015. Pinnacle's subordinated notes restrict senior debt incurrence to 2.5x EBITDA. However, since most of the pro forma senior debt will be incurred using the subordinated notes' acquisition debt carveout there will be ample remaining capacity on the 2.5x senior debt carveout. (The 2.5x covenant measures senior indebtedness that was incurred using the 2.5x carveout, not total senior indebtedness outstanding). The 'RR3' Recovery Rating on the senior notes corresponds to Fitch's recovery estimation in an event of default in the 51%-70% range for senior noteholders. This is down from the premerger expectation of greater than 91%. Fitch estimates full recovery for the credit facility and no recovery for the subordinated notes. Rating Sensitivities At the current 'B+' IDR and with leverage initially above 6x, Fitch expects no further positive rating actions for Pinnacle in the near term. However, with the increase in size and diversification that will result from the Ameristar acquisition, Pinnacle's operating profile can support a 'BB' category IDR at or below 5x leverage. Fitch expects Pinnacle to reach or get close to 5x leverage within a two to three year timeframe. The 'B+' IDR takes into account Fitch's expectation that Pinnacle will be able to get to or below 6x leverage quickly or approximately within one year of the acquisition closing. Leverage persisting above 6.0x for a longer period of time due to operating deterioration, additional debt incurrence to acquire assets or an undertaking a major new development may put pressure on the 'B+' IDR, likely in the form an Outlook revision to Negative. A sale of the St. Louis and Lake Charles assets at values that are substantially lower than what Fitch has factored into its base case assumptions may also pressure the ratings. PINNACLE ENTERTAINMENT: Moody's Rates $1-Bil. Revolver 'Ba2' ------------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to Pinnacle Entertainment, Inc.'s proposed $1 billion 5-year senior secured revolver and $1.6 billion 7-year senior secured term loan, and a B2 rating to the company's proposed $800 million senior unsecured notes with an 8 to 10 year maturity. Moody's also affirmed Pinnacle's existing ratings including the company's B1 Corporate Family Rating. The rating outlook remains stable. Pinnacle intends to use the proceeds of the new senior secured credit facility and senior unsecured notes to finance the aggregate cash consideration for its pending acquisition of Ameristar, refinance its existing credit facilities, pay related transaction fees and expenses, redeem its existing 8.625% senior notes due 2017 and provide working capital and funds for general corporate purposes after the acquisition. If the acquisition of Ameristar Casinos is not consummated, Pinnacle does not expect to enter into the new term loan and revolving credit facility. The following ratings are affirmed: Corporate Family Rating at B1 Probability of Default Rating at B1-PD The following ratings are affirmed with point estimates updated: $410 million revolver expiring 2016 at Ba1 (LGD 2, 15%) $319 million term loan B due 2019 at Ba1 (LGD 2, 15%) $450 million 8.625% senior unsecured notes due 2017 at B1 (LGD 4, 51%) $350 million 8.75% senior subordinated notes due 2020 at B3 (LGD 5, 84%) $250 million 7.75% senior subordinated notes due 2022 at B3 (LGD 5, 84%) New ratings assigned: $1 billion 5-year revolver at Ba2 (LGD 2, 22%) $1.6 billion 7-year term loan at Ba2 (LGD 2, 22%) $800 million senior unsecured notes at B2 (LGD 5, 72%) The affirmation of Pinnacle's B1 Corporate Family Rating incorporates the benefits and risks associated with the company's pending acquisition of Ameristar Casinos, Inc. (B1 stable). Risks include high pro forma leverage and the highly discretionary nature of consumer spending on gaming related activities. Benefits include the increased scale, cash flow and geographic diversification that Pinnacle will obtain along with merger related synergies. On December 20, 2012, Pinnacle agreed to acquire Ameristar Casinos, Inc. in an all cash transaction valued at $26.50 per Ameristar share or total consideration of $2.9 billion including assumed debt. The transaction is expected to close in the third quarter of 2013. The Ba2 assigned to the proposed revolver and term loan, 2-notches higher than Pinnacle's Corporate Family Rating, considers the secured nature and senior position of the credit facility relative to the substantial amount of unsecured and senior subordinated debt that will rank junior to it in the pro forma capital structure. As part of the transaction, Pinnacle will assume Ameristar's $1.04 billion outstanding senior unsecured notes due 2021. The B2 assigned to the proposed senior unsecured secured notes, one notch lower than Pinnacle's B1 Corporate Family Rating, considers the substantial amount of senior secured debt that will rank ahead of it in the pro forma capital structure. Moody's expects to withdraw the ratings on Pinnacle's existing revolver (Ba1), term loan (Ba1), and 8.625% senior unsecured notes (B1) as these debt issues will be entirely refinanced and no longer exist once the transaction closes. When the transaction closes, Moody's also expects that Pinnacle's existing senior subordinated notes -- these notes will be assumed in full as part of the transaction and remain in Pinnacle's pro forma capital structure -- will remain B3. Additionally, Moody's expects to raise Ameristar's $1.04 billion outstanding senior unsecured debt, currently rated B3, to B2 as this assumed senior unsecured debt will be included in the pro forma capital structure and will rank pari passu to Pinnacle's proposed senior unsecured notes rated B2. Ratings Rationale: Pinnacle's B1 Corporate Family Rating considers the company's high pro forma leverage as a result of its pending acquisition of Ameristar - pro forma debt/EBITDA is over 6.5 times - and Moody's opinion that US consumers will continue to limit their spending on discretionary forms of entertainment such as gaming. The B1 Corporate Family Rating also considers Pinnacle's plans to sell Ameristar's casino hotel development project in Lake Charles, LA and Pinnacle's Lumiere Place Casino in St. Louis, MO as part of an agreement with the Federal Trade Commission with proceeds expected to largely be applied to debt reduction. Positive rating consideration is given to the benefits of the Ameristar acquisition, particularly with respect to increased scale and geographic diversification that will occur once the transaction closes. Pro forma for the acquisition, Pinnacle will double its size in terms of net revenue to about $2.4 billion, and become one of the larger and most geographically diversified U.S. regional gaming companies. Also supporting the B1 Corporate Family Rating is Moody's expectation that Pinnacle will proactively reduce its debt/EBITDA to at or below 5.5 times by the end of fiscal 2014 as the company benefits from the merger related synergies and asset dispositions. The stable rating outlook is based on Moody's expectation that Pinnacle will proactively reduce its debt/EBITDA to at or below 5.5 times by the end of fiscal 2014 as the company benefits from the EBITDA contribution and free cash flow improvement. This improvement is expected to come from merger related synergies and cost savings as well as several casino developments and projects including Pinnacle's Baton Rouge casino that opened in September 2012. A higher Corporate Family Rating would likely require that Pinnacle achieve and maintain debt/EBITDA at or below 4.0 times. Ratings could be lowered if it appears that the company will not be able to unable to maintain debt/EBITDA below 5.5 times by the end of fiscal 2014 Pinnacle owns and operates seven casinos, located in Louisiana, Missouri, and Indiana, and a racetrack in Ohio. In addition, Pinnacle is redeveloping River Downs in Cincinnati, Ohio into a gaming entertainment facility, owns an approximate 24% equity stake in Asian Coast Development (Canada) Ltd. (ACDL), an international development and real estate company currently developing Vietnam's first large-scale integrated resort on the Ho Tram Strip, and holds a majority interest in the racing license owner, as well as a management contract, for Retama Park Racetrack outside of San Antonio, Texas. The company generated about $1.2 billion of net revenue for the latest 12 month period ended March 31, 2013. Ameristar Casinos, Inc. owns and operates eight casino properties in seven markets. The company's portfolio of casinos are located in St. Louis, MO, Kansas City, MO, Council Bluffs, IA, Denver, CO, Vicksburg, MS and the Chicagoland area. The company also owns several casinos in Nevada. Ameristar generated about $1.2 billion of net revenue for the latest 12-month period ended March 31, 2013. The principal methodology used in this rating was the Global Gaming Industry Methodology published in December 2009. Other methodologies used include Loss Given Default for Speculative- Grade Non-Financial Companies in the U.S., Canada and EMEA published in June 2009. PINNACLE ENTERTAINMENT: S&P Assigns BB+ Rating to $2.6BB Facility ----------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its ratings, including the 'BB-' corporate credit ratings, on both Pinnacle Entertainment Inc. and Ameristar Casinos Inc. S&P removed all ratings from CreditWatch, where they were placed with negative implications on Dec. 21, 2012. The rating outlook is stable. At the same time, S&P assigned Pinnacle Entertainment's proposed $2.6 billion senior secured credit facility an issue-level rating of 'BB+', with a recovery rating of '1', indicating S&P's expectation for very high (90% to 100%) recovery for lenders in the event of a payment default. The proposed facility consists of a $1 billion senior secured revolving credit facility due 2018 and $1.6 billion senior secured term loan due 2020. The ratings remain subject to S&P's receipt and review of final documentation. The company expects to use the proceeds, along with those from a planned $800 million senior unsecured notes issuance (which S&P expects to rate once the offering is commenced), to finance the aggregate cash consideration for its pending acquisition of Ameristar Casinos Inc., to refinance its existing credit facilities and redeem its existing 8.625% senior notes due 2017, to pay transaction fees and expenses, and to provide working capital and funds for general corporate purposes after the acquisition. The company expects to complete the acquisition in the third quarter of 2013, subject to receiving required gaming regulatory approvals and reaching definitive agreement with the FTC on a consent order. "The rating affirmation reflects our view that, although leverage will weaken to above 6x pro forma for the acquisition financing for the combined entity, Pinnacle will be able to improve leverage to under 6x by 2014 through the use of asset sale proceeds from Lumiere Place and Ameristar Lake Charles and free operating cash flow to repay debt. The planned divestiture of the partially completed Ameristar Lake Charles development substantially reduces the amount of capital expenditures next year, which will meaningfully improve the company's free operating cash flow generation available for debt repayment in 2014. We had previously expected the combined entity would generate negative free operating cash flow through 2014 as Ameristar Lake Charles was completed, precluding any meaningful deleveraging until 2015," S&P said. REFCO INC: Sues Cantor Over $8MM Stake in Drained Tech Assets ------------------------------------------------------------- Kathryn Brenzel of BankruptcyLaw360 reported that the bankruptcy estate of Refco Inc. has launched a suit in New York federal court alleging Cantor Fitzgerald LP cheated it out of profits netted from gambling technology produced by the company's shuttered subsidiaries, alleging that it was never compensated for an $8 million investment. Refco provided $8 million in 2002 in exchange for a 10 percent stake in Cantor Fitzgerald's subsidiary Cantor Index Holdings, according to the complaint, which was filed in March but unsealed Monday, the report said. About Refco Inc. Headquartered in New York, Refco Inc. -- http://www.refco.com/-- was a diversified financial services organization with operations in 14 countries and an extensive global institutional and retail client base. Refco's worldwide subsidiaries were members of principal U.S. and international exchanges, and were among the most active members of futures exchanges in Chicago, New York, London and Singapore. Refco was also a major broker of cash market products, including foreign exchange, foreign exchange options, government securities, domestic and international equities, emerging market debt, and OTC financial and commodity products. Refco was one of the largest global clearing firms for derivatives. The Company had operations in Bermuda. The Company and 23 of its affiliates filed for Chapter 11 protection on October 17, 2005 (Bankr. S.D.N.Y. Case No. 05-60006). J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP, represented the Debtors in their restructuring efforts. Milbank, Tweed, Hadley & McCloy LLP, represented the Official Committee of Unsecured Creditors. Refco reported US$16.5 billion in assets and US$16.8 billion in debts to the Bankruptcy Court on the first day of its Chapter 11 cases. The Court confirmed the Modified Joint Chapter 11 Plan of Refco Inc. and certain of its Direct and Indirect Subsidiaries, including Refco Capital Markets, Ltd., and Refco F/X Associates, LLC, on December 15, 2006. That Plan became effective on Dec. 26, 2006. Pursuant to the plan, RJM, LLC, was named plan administrator to reorganized Refco, Inc., and its affiliates, and Marc S. Kirschner as plan administrator to Refco Capital Markets, Ltd. RESIDENTIAL CAPITAL: Outline & Summary of Chapter 11 Plan --------------------------------------------------------- Residential Capital, LLC, its debtor affiliates, and the Official Committee of Unsecured Creditors appointed in their Chapter 11 cases filed with the U.S. Bankruptcy Court for the Southern District of New York a joint Chapter 11 plan and accompanying disclosure statement incorporating the plan support agreement the Court recently approved. The PSA was entered into among the Debtors; the Debtors' indirect parent, Ally Financial Inc.; the Creditors' Committee; and certain consenting claimants. Under the PSA, Ally will contribute $2.1 billion to fund the Chapter 11 Plan. Ally's contribution is composed of $1.950 billion in cash on the effective date of the plan and the first $150 million it receives for any Directors and Officers or Errors and Omissions claims it pursues against its insurance carriers. The Plan will also be funded with net proceeds from the Debtors' asset sales and the assets remaining in the Debtors' estate. In exchange for its contribution, Ally will be granted releases by the Debtors and certain third parties. The Ally Contribution will be paid to the Debtors' estates in accordance with the Plan and will be allocated by the Plan Proponents, as follows: Entity Allocation ------ ---------- ResCap Debtors $782.7 million GMACM Debtors $462.3 million RFC Debtors $462.3 million Private Securities Claims Trust $235.0 million Borrower Claims Trust $57.6 million NJ Carpenters Claims Distribution $100.0 million ResCap Debtors are Residential Capital, LLC, GMAC Residential Holding Company, LLC, and GMAC-RFC Holding Company, LLC. GMACM Debtors are GMAC Residential Holding Company; ditech, LLC; ETS of Virginia, Inc.; ETS of Washington, Inc.; Executive Trustee Services, LLC; GMAC Mortgage USA Corporation; GMAC RH Settlement Services, LLC; GMACM Borrower LLC; GMACM REO LLC; GMACR Mortgage Products, LLC; Home Connects Lending Services, LLC; Ladue Associates, Inc.; Passive Asset Transactions, LLC; PATI A, LLC; PATI B, LLC; PATI Real Estate Holdings, LLC; Residential Consumer Services of Alabama, LLC; Residential Consumer Services of Ohio, LLC; Residential Consumer Services of Texas, LLC; Residential Consumer Services, LLC; and Residential Mortgage Real Estate Holdings, LLC. RFC Debtors are GMAC-RFC Holding Company, LLC; DOA Holding Properties, LLC; DOA Properties IX (Lots-Other), LLC; EPRE LLC; Equity Investment I, LLC; GMAC Model Home Finance I, LLC; HFN REO SUB II, LLC; Homecomings Financial Real Estate Holdings, LLC; Homecomings Financial, LLC; RAHI A, LLC; RAHI B, LLC; RAHI Real Estate Holdings, LLC; RCSFJV2004, LLC; Residential Accredit Loans, Inc.; Residential Asset Mortgage Products, Inc.; Residential Asset Securities Corporation; Residential Funding Mortgage Exchange, LLC; Residential Funding Mortgage Securities I, Inc.; Residential Funding Mortgage Securities II, Inc.; Residential Funding Real Estate Holdings, LLC; RFC-GSAP Servicer Advance, LLC; RFC Asset Holdings II, LLC; RFC Asset Management, LLC; RFC Borrower LLC; RFC Construction Funding, LLC; RFC REO LLC; and RFC SFJV-2002, LLC. Administrative Claims will be allocated among the ResCap Debtors, the GMACM Debtors and the RFC Debtors in accordance with the PSA. Of the projected Administrative Claims of $1.086 billion, $836.3 million will be allocated to the GMACM Debtors, and $249.8 million will be allocated to the RFC Debtors. Any variation in the amount of the Administrative Claims above or below $1.086 billion will be borne or realized by a liquidating trust to be established under the Plan. After the Effective Date, beneficial interests in the Liquidating Trust, in the form of liquidating trust units, will be issued by the Liquidating Trust to holders of Unsecured Claims (other than Borrower Claims and the NJ Carpenters Claims) against the ResCap Debtors, the GMACM Debtors, and the RFC Debtors that are Allowed as of as of the initial unit distribution record date, and to the Private Securities Claims Trust. The total number of Units to be initially issued and outstanding, including the Units to be held in the Disputed Claims Reserve as set forth below, will be $100 million. The Units issuable pursuant to the Plan will be allocated among the Private Securities Claims Trust and the holders of Claims against the respective Debtor Groups by adjusting the starting issuance percentages according to the following: ResCap Debtors $780.2 million 31.7% GMACM Debtors $626.0 million 25.4% RFC Debtors $820.8 million 33.3% Private Securities Claims Trust $235.0 million 9.5% -------------- ----- Total $2.462 billion 100.00% Classification and Treatment of Claims The Plan provides for the payment in full of all administrative, secured, and priority claims, including the Junior Secured Notes Claim. The Plan provides for the following classification and treatment of claims against the ResCap Debtors: Estimated Estimated Estimated Allowed Chapter 7 Recovery Class Type of Claim Amount Recovery Under Plan ----- ------------- --------- --------- ----------- R-1 Other Priority Claims N/A N/A N/A Treatment: Unimpaired R-2 Other Secured Claims $0.01MM 100.0% 100.0% Treatment: Unimpaired R-3 Junior Secured Notes $2.223B 71.4% 100.0% Claims - 77.1% Treatment: Impaired/Unimpaired R-4 ResCap Unsecured Claims $2.146B 0.1% 36.3% Treatment: Impaired - 0.1% R-5 Borrower Claims N/A N/A N/A Treatment: Impaired R-6 Private Securities Claims N/A N/A N/A Treatment: Impaired R-7 NJ Carpenters Claims N/A N/A N/A Treatment: Impaired R-8 General Unsecured $0.30MM 0.1% 36.3% Convenience Claims - 0.1% Treatment: Impaired R-9 Intercompany Balances N/A N/A N/A Treatment: Impaired R-10 Equity Interests N/A N/A N/A Treatment: Impaired R-11 FHFA Claims N/A N/A N/A Treatment: Impaired R-12 Revolving Credit N/A N/A N/A Facility Claims Treatment: Impaired The Plan provides for the following classification and treatment of claims against the GMACM Debtors: Estimated Estimated Estimated Allowed Chapter 7 Recovery Class Type of Claim Amount Recovery Under Plan ----- ------------- --------- --------- ----------- GS-1 Other Priority Claims $0.13MM 100.0% 100.0% Treatment: Unimpaired GS-2 Other Secured Claims $0.04MM 100.0% 100.0% Treatment: Unimpaired GS-3 Junior Secured $2.223B 71.4% 100.0% Notes Claims - 77.1% Treatment: Impaired/ Unimpaired GS-4 GMACM Unsecured Claims $2.077B 6.7% 30.1% Treatment: Impaired - 8.6% GS-5 Borrower Claims $88.57MM 6.7% 30.1% Treatment: Impaired - 8.6% GS -6 Private Securities N/A 0.0% N/A Claims - 6.7% Treatment: Impaired GS-7 General Unsecured $2.50MM 6.7% 30.1% Convenience Claims - 8.6% Treatment: Impaired GS-8 Intercompany Balances N/A N/A N/A Treatment: Impaired GS-9 Equity Interests N/A N/A N/A Treatment: Impaired GS-10 Revolving Credit N/A N/A N/A Facility Claims Treatment: Impaired The Plan provides for the following classification and treatment of claims against the RFC Debtors: Estimated Estimated Estimated Allowed Chapter 7 Recovery Class Type of Claim Amount Recovery Under Plan ----- ------------- --------- --------- ----------- RS-1 Other Priority Claims $0.01MM 100.0% 100.0% Treatment: Unimpaired RS-2 Other Secured Claims $0.01MM 100.0% 100.0% Treatment: Unimpaired RS-3 Junior Secured $2.223B 71.4% 100.0% Notes Claims - 77.1% Treatment: Impaired/ Unimpaired RS-4 RFC Unsecured Claims $9.158B 2.9% 9.0% Treatment: Impaired - 3.6% RS-5 Borrower Claims $333.09MM 2.9% 9.0% Treatment: Impaired - 3.6% RS-6 Private Securities N/A 0.0% N/A Claims - 2.9% Treatment: Impaired RS-7 NJ Carpenters Claims N/A 0.0% N/A Treatment: Impaired - 2.9% RS-8 General Unsecured $0.70MM 2.9% 9.0% Convenience Claims - 3.6% Treatment: Impaired RS-9 Intercompany Balances N/A N/A N/A Treatment: Impaired RS-10 Equity Interests N/A N/A N/A Treatment: Impaired RS-11 FHFA Claims N/A N/A N/A Treatment: Impaired RS-12 Revolving Credit N/A N/A N/A Facility Claims Treatment: Impaired RMBS Trustees Settlement The Plan incorporates a settlement of the size, allocation, and priority of all of the claims asserted by the trustees of residential mortgage-backed securities arising from more than 1,000 RMBS Trusts, including mortgage loan repurchase claims relating to breach of origination or sale representations and warranties, cure claims, and servicing-related claims, which comprise the largest disputed claims against the Debtors' Estates, as well as approval of the RMBS Settlement, which was the subject of substantial litigation in the Chapter 11 Cases. The entry of a Confirmation Order will constitute approval of the Allowed amount of the RMBS Trust Claims as non-subordinated Unsecured Claims, subject only to the Allowed Fee Claim, in the aggregate amounts of (i) $209.8 million against the GMACM Debtors; (ii) $7.091 billion against the RFC Debtors; and (iii) $0 against the ResCap Debtors. On account of the Allowed RMBS Trust Claims, the RMBS Claims Trust will receive (i) its Pro Rata Share of the GMACM Debtors Unit Distribution and (ii) its Pro Rata Share of the RFC Debtors Unit Distribution; provided, however, 5.7% of the Allowed RMBS Trust Claims, including the Units to be distributed on account thereof will be directly allocated to counsel for institutional investors, without conveyance to the RMBS Claims Trust, the RMBS Trustees, or the RMBS Trusts, as the Allowed Fee Claim. Monoline Insurers Settlement The Plan also incorporates a settlement of the allowance, allocation, and priority of the claims of certain monoline insurers, including MBIA Insurance Corporation and Financial Guaranty Insurance Corporation, eliminating the need for complex and uncertain litigation concerning the scope and nature of the claims held by these entities and the potential subordination of such claims, separate and apart from the litigation concerning the claims of the RMBS Trusts. Entry of the Confirmation Order, pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure and Section 1123, will constitute approval of the allowed nonsubordinated general unsecured claims held by MBIA in the amount of $719 million against the ResCap Debtors, $1.450 billion against the GMACM Debtors, and $1.450 billion against the RFC Debtors. On account of the Allowed General Unsecured Claims, MBIA will receive (i) its Pro Rata Share of the GMACM Debtors Unit Distribution, (ii) its Pro Rata Share of the RFC Debtors Unit Distribution, and (iii) its Pro Rata Share of the ResCap Debtors Unit Distribution, as applicable. As a condition precedent to Plan Consummation, the Bankruptcy Court and the FGIC Rehabilitation Court each will have approved, by no later than Aug. 19, 2013, the FGIC Settlement Agreement, which governs the amount and priority of the General Unsecured Claims held by FGIC. Entry of an order pursuant to Rule 9019 will constitute approval, among other things, of the minimum Allowed non-subordinated General Unsecured Claim. Entry of the Confirmation Order will constitute approval of Allowed non-subordinated General Unsecured Claims held by FGIC in the amount of $337.5 million against the ResCap Debtors, $181.5 million against the GMACM Debtors, and $415.0 million against the RFC Debtors. On account of those Allowed General Unsecured Claims, FGIC will receive (i) its Pro Rata Share of the GMACM Debtors Unit Distribution, (ii) its Pro Rata Share of the RFC Debtors Unit Distribution, and (iii) its Pro Rata Share of the ResCap Debtors Unit Distribution, as applicable. Private Securities Claims Settlement The Plan provides for a settlement of tens of billions of dollars of Private Securities Claims against the Debtors, including claims involving Ally, arising from their structuring, sponsoring, underwriting, and sale of RMBS, eliminating litigation concerning such as the validity and value of these claims and their potential subordination pursuant to Section 510. The settlement of the Private Securities Claims is implemented through the establishment of a Private Securities Claims Trust, which will settle and administer distributions to holders of Allowed Private Securities Claims in accordance with the procedures and methodology set forth in the Private Securities Claims Trust Agreement. Entry of the Confirmation Order will constitute approval of the settlement of the Allowed Claim amounts for voting purposes of each of the Settling Private Securities Claimants as follows: AIG Asset Management (U.S.), LLC $1.168 billion Allstate Insurance Company $140 million Massachusetts Mutual Life Insurance Company $218 million Prudential Insurance Company of America $227 million The Settling Private Securities Claimants will also have settled claim amounts against the Private Securities Claims Trust for distribution purposes, which amounts shall be set forth in the Private Securities Claims Trust Agreement. Borrower Claims Trust A Borrower Claims Trust will be established. The Trust will set a floor of available assets for distributions to Borrowers and provides streamlined procedures for holders of Allowed Borrower Claims to receive distributions in accordance with the procedures and methodology set forth in the Borrower Claims Trust Agreement. The amounts distributed to the holders of Borrower Claims through the Borrower Claims Trust are in addition to approximately $230 million to be paid by the Debtors for the benefit of Borrowers through a settlement of the Debtors' foreclosure file review obligations under the Consent Order. On or as soon as practicable after the Effective Date, the Liquidating Trust will fund the Borrower Claims Trust with $57.6 million in Cash. Resolution of Wilmington Trust's $1B Claim The $1.003 billion in claims held by Wilmington Trust, National Association, as senior unsecured notes indenture trustee, is resolved under the Plan. NJ Carpenters Class Claims Settlement The Plan incorporates a settlement of the Allowed Claim amount and distribution to the members of the class in the class action entitled New Jersey Carpenters Health Fund, et al. v. Residential Capital, LLC, et al., Civ. No. 08-8781(HB), pending in the U.S. District Court for the Southern District of New York. The NJ Carpenters Class Settlement is subject to the approval of both the Bankruptcy Court and the District Court. The PSA Parties have agreed to settle the NJ Carpenters Claims in exchange for payment to the class of $100,000,000 under the Chapter 11 Plan. A full-text copy of the Plan, dated July 3, 2013, is available for free at http://bankrupt.com/misc/RESCAP_plan0703.pdf A full-text copy of the Disclosure Statement, dated July 4, 2013, is available for free at: http://bankrupt.com/misc/RESCAP_ds0704.pdf The Plan and Disclosure Statement were filed by Gary S. Lee, Esq., Lorenzo Marinuzzi, Esq., Todd M. Goren, Esq., Jennifer L. Marines, Esq., at Morrison & Foerster LLP, in New York, on behalf of the Debtors; and Kenneth H. Eckstein, Esq., Douglas H. Mannal, Esq., Stephen D. Zide, Esq., and Rachael L. Ringer, Esq., at Kramer Levin Naftalis & Frankel LLP, in New York, on behalf of the Creditors' Committee. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: To Seek Approval of Plan Outline in August --------------------------------------------------------------- Residential Capital LLC and its affiliates and the Official Committee of Unsecured Creditors ask Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York to approve the disclosure statement explaining the Joint Chapter 11 Plan as providing "adequate information" within the meaning of Section 1125(a) of the Bankruptcy Code. Section 1125(a)(1) defines "adequate information" as: "[I]nformation of a kind, and in sufficient detail, as far as is reasonably practicable in light of the nature and history of the debtor and the condition of the debtor's books and records . . . that would enable such a hypothetical investor of the relevant class to make an informed judgment about the plan . . . [I]n determining whether a disclosure statement provides adequate information, the court shall consider the complexity of the case, the benefit of additional information to creditors and other parties in interest, and the cost of providing additional information. . . ." Gary S. Lee, Esq., at Morrison & Foerster LLP, in New York, asserts that the Disclosure Statement contains "adequate information" that would enable a hypothetical investor to make an informed judgment about the Plan because it includes, among other things: (a) a discussion about the compromises reflected in the Plan including the basis for the Plan releases and the factual predicates relating thereto, a description of the settlement of the claims asserted by the residential mortgage-backed securities trusts and claims of MBIA Insurance Corporation and Financial Guaranty Insurance Corporation that will be settled pursuant to the Plan, the establishment of a Borrower Claims Trust, which sets a floor of available assets for distributions to borrowers, the settlement of the Private Securities Claims through the establishment of a Private Securities Claims Trust, and the treatment of the Junior Secured Noteholders under the Plan; (b) a discussion of the history of the Debtors and the events leading up to the filing of the Chapter 11 Cases; (c) a summary of the developments during the Chapter 11 Cases, including the successful mediation sessions that led to entry into the Plan Support Agreement, as well as a summary of the Chapter 11 Examiner's findings and conclusions; and (d) a summary of the Plan, including the treatment of claims and interests, the solicitation procedures, and the tax consequences. Proposed Plan Confirmation Schedule The Plan Proponents also ask the Court to approve the following proposed Plan confirmation schedule: Date Event ---- ----- Aug. 5, 2013 Deadline for Objections to Disclosure Statement Aug. 16, 2013 Deadline for Replies to Disclosure Statement Objections Aug. 16, 2013 Voting Record Date Aug. 21, 2013 Disclosure Statement Hearing Date Aug. 29, 2013 Solicitation Deadline Aug. 29, 2013 Deadline to Publish Confirmation Hearing Notice Sept. 10, 2013 Deadline for Objections to Claims for Voting Purposes Sept. 20, 2013 Deadline for Filing Temporary Allowance Request Motions Oct. 1, 2013 Deadline for Objections to Temporary Allowance Request Motions Oct. 1, 2013 Deadline to File Plan Supplement Oct. 3, 2013 Deadline for Replies to Objections to Temporary Allowance Request Motions Oct. 9, 2013 Deadline for Entry of Order Granting Temporary Allowance Request Motions Oct. 10, 2013 Deadline for Objections to Confirmation of the Plan Oct. 10, 2013 Voting Deadline Oct. 25, 2013 Voting Certification Deadline Oct. 30, 2013 Deadline for Replies to Objections to Confirmation of Plan Nov. 6, 2013 Confirmation Hearing at 10:00 a.m. Claimants who have timely filed proofs of claim or have been scheduled by the Debtors and are classified in the Plan in the following classes of Claims are entitled to vote: R-3, R-4, R- 5, R-6, R-7, R-8, R-12, GS-3, GS-4, GS-5, GS-6, GS-7, GS-10, RS-3, RS-4, RS-5, RS-6, RS-7, RS-8, and RS-12. The following classes of Claims and Equity Interests are not entitled to vote: R-1, R-2, R-9, R-10, R-11, GS-1, GS-2, GS-8, GS- 9, RS-1, RS-2, RS-9, RS-10, and RS-11. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Wants Removal Period Extended to Oct. 31 ------------------------------------------------------------- Residential Capital LLC and its affiliates ask the Bankruptcy Court to extend the time within which they are permitted to file notices of removal of civil actions to the later of (a) Oct. 31, 2013, or (b) should the Court enter an order terminating the automatic stay as to a particular Civil Action, for that Civil Action, 30 days after the entry of the order terminating the automatic stay, without prejudice to the Debtors to seek further extensions. According to Gary S. Lee, Esq., at Morrison & Foerster LLP, in New York, since the Petition Date, the Debtors have expended significant time and effort on a multitude of matters, including, among others (i) litigating dozens of contested matters; (ii) engaging in substantial discovery and briefing in connection with the proposed settlement with the residential mortgage-backed securities trusts; (iii) the ongoing review and reconciliation of more than 6,860 claims filed against their estates; (iv) participating in the Chapter 11 Examiner's investigation involving multiple witness interviews and voluminous document productions; (iv) successfully conducting auctions for the sales of their mortgage loan origination and servicing platform and legacy loan portfolio and the prompt closing of these transactions, which yielded more than $4 billion for the Debtors' estates and creditors; (vi) plan mediation under the auspices of the court- approved mediator; and (vii) negotiations with creditor constituents, resulting in approval of the Plan Support Agreement. Due to the urgent need to focus on these critical activities, the Debtors and their professionals have not had a sufficient opportunity to analyze the merits of the Civil Actions and the desirability of removing them to the appropriate bankruptcy court or district court, Mr. Lee states. Thus, the Debtors are continuing to review their files and records and undertaking an analysis of the relevant court documents to determine whether the Debtors' estates would benefit from the removal of any of the thousands of Civil Actions pending in courts throughout the country. Further extending the Debtors' period to file notices of removal will provide the Debtors with adequate time to conduct the review and to evaluate the pending litigation matters within the larger context of the Chapter 11 cases, Mr. Lee adds. The Court was slated to hear the motion at a hearing for July 10. Lorenzo Marinuzzi, Esq., and Norman S. Rosenbaum, Esq., at Morrison & Foerster LLP, in New York, also represent the Debtors. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: Redwood Wants GMACM to Give Up Docs -------------------------------------------------------- Redwood Recovery Services, LLC, and Elevenhome Limited, ask the U.S. Bankruptcy Court for the Southern District of New York to compel Debtor GMAC Mortgage, LLC, to produce certain documents. Redwood and Elevenhome also ask the Court to require a representative of GMACM to appear and testify under oath at an examination under Rule 2004 of the Federal Rules of Bankruptcy Procedure. Redwood and Elevenhome hold judgments aggregating more than $17 million against American Residential Equities, LLC, and American Residential Equities LIII, LLC, an entity that is ARE's alter ego. ARE in turn has asserted substantial claims and commenced an adversary proceeding against Debtor GMACM, alleging, among other things, that GMACM holds property of ARE. Redwood and Elevenhome have sought information about their judgment, but to date, due to ARE's lack of cooperation and insufficient disclosures, Redwood and Elevenhome have very little information, Alan Halperin, Esq. -- ahalperin@halperinlaw.net -- at Halperin Battaglia Raicht, LLP, in New York, tells the Court. For that reason, Redwood and Elevenhome seek discovery from GMACM relating to ARE's assets. Redwood and Elevenhome are also represented by Donna H. Lieberman, Esq. -- dlieberman@halperinlaw.net -- at HALPERIN BATTAGLIA RAICHT, LLP, in New York, and Thomas R. Lehman, Esq. -- TRL@lklsg.com -- and Jennifar M. Hill, Esq. -- JMH@lklsg.com -- at LEVINE KELLOGG LEHMAN SCHNEIDER + GROSSMAN LLP, in Miami, Florida. About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). RESIDENTIAL CAPITAL: FHFA Suit Sent Back to District Court ---------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that Residential Capital LLC won what might only be an interim skirmish in a quest to get a federal district court to halt a lawsuit by the Federal Housing Finance Agency against parent Ally Financial Inc. and some of its affiliates. According to the report, the eventual outcome of the suit is important because the agency isn't part of the global settlement to be implemented through New York-based ResCap's pending Chapter 11 reorganization plan. In its role as conservator of Freddie Mac, the agency sued ResCap, Ally and affiliates alleging there were false and misleading statements in documents related to residential mortgage-backed securities that Freddie Mac purchased. The report notes that after ResCap filed for bankruptcy, the agency dropped ResCap from the suit. ResCap was Ally's mortgage- servicing unit. ResCap started a lawsuit in bankruptcy court contending that continuing to sue Detroit-based Ally and other non-bankrupt affiliates was still a violation of bankruptcy's automatic stay. Contained in Section 362 of the Bankruptcy Code, the stay automatically halts lawsuits against bankrupt companies. The report relates that U.S. District Judge Denise Cote took the suit out of bankruptcy court. One week later, in July 2012, she ruled that the lawsuit against Ally and non-bankrupt affiliates couldn't be halted because they weren't in Chapter 11. ResCap appealed. The U.S. Court of Appeals in Manhattan heard argument on June 12 and issued an unsigned, five-page opinion July 16 sending the matter back to Judge Cote for further findings. In an important pronouncement of law, the appeals court said the "automatic stay may apply" to non-bankrupt affiliates "in some limited circumstances." There has been continuing controversy over the question of whether the stay can protect non-bankrupt affiliates or company executives from being sued. The controversy remains because July 16 opinion lays down no bright-line rules. The report discloses that the appeals court said the stay would apply if the agency's suit would have "immediate adverse economic consequences" on ResCap. The appeals court told Cote to make "explicit findings" of fact on the question of whether continuation of the suit against non-bankrupt affiliates would have immediate adverse consequences for ResCap. Whether Cote will allow the suit to proceed isn't immediately clear because circumstances have changed from one year ago. While the appeal was winding its way to the appeals court, ResCap reached a global settlement with creditors and filed a Chapter 11 reorganization plan with disclosure materials coming to court for approval on Aug. 21. The cornerstone of the plan is the $2.1 billion Ally will pay for a release of claims that could be brought by ResCap creditors. The picture is complicated because ResCap's plan and the waiver of claims don't stop suits against Ally by the FHFA or the Federal Deposit Insurance Corp. The appeal is Residential Capital LLC v. Federal Housing Finance Agency, 12-3342, U.S. Court of Appeals for the Second Circuit (Manhattan). The agency case in district court is Residential Capital LLC v. Federal Housing Finance Agency, 12-05116, U.S. District Court, Southern District New York (Manhattan). About Residential Capital Residential Capital LLC, the unprofitable mortgage subsidiary of Ally Financial Inc., filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 12-12020) on May 14, 2012. Neither Ally Financial nor Ally Bank is included in the bankruptcy filings. ResCap, one of the country's largest mortgage originators and servicers, was sent to Chapter 11 with 50 subsidiaries amid "continuing industry challenges, rising litigation costs and claims, and regulatory uncertainty," according to a company statement. ResCap disclosed $15.68 billion in assets and $15.28 billion in liabilities as of March 31, 2012. Centerview Partners LLC and FTI Consulting are acting as financial advisers to ResCap. Morrison & Foerster LLP is acting as legal adviser to ResCap. Curtis, Mallet-Prevost, Colt & Mosle LLP is the conflicts counsel. Rubenstein Associates, Inc., is the public relations consultants to the Company in the Chapter 11 case. Morrison Cohen LLP is advising ResCap's independent directors. Kurtzman Carson Consultants LLP is the claims and notice agent. Ray C. Schrock, Esq., at Kirkland & Ellis LLP, in New York, serves as counsel to Ally Financial. ResCap sold most of the businesses for a combined $4.5 billion. The Bankruptcy Court in November 2012 approved ResCap's sale of its mortgage servicing and origination platform assets to Ocwen Loan Servicing, LLC and Walter Investment Management Corporation for $3 billion; and its portfolio of roughly 50,000 whole loans to Berkshire Hathaway for $1.5 billion. Bankruptcy Creditors' Service, Inc., publishes RESIDENTIAL CAPITAL BANKRUPTCY NEWS. The newsletter tracks the Chapter 11 proceeding undertaken by affiliates of Residential Capital LLC and its affiliates (http://bankrupt.com/newsstand/or 215/945-7000). ROTECH HEALTHCARE: Plan Confirmation Hearing Set for Aug. 20 ------------------------------------------------------------ By order dated June 14, 2013, the U.S. Bankruptcy Court for the District of Delaware approved the Disclosure Statement for Rotech Healthcare Inc., et al.'s Second Amended Joint Chapter 11 Plan. A hearing to consider confirmation of the Plan will be held before Judge Peter J. Walsh on Aug. 20, 2013 at 10:00 a.m. (prevailing Eastern Time). All votes to accept or reject the Plan must be actually received by the Debtors' voting and solicitation agent, Epiq Bankruptcy Solutions, LLC, no later than Aug. 8, 2013, unless the time is extended. Objections and responses to confirmation of the Plan must be in writing and filed on or before Aug. 8. James L. Patton, Jr., Esq., Robert S. Brady, Esq., Joseph M. Barry, Esq., and Travis G. Buchanan, Esq., at YOUNG CONAWAY STARGATT & TAYLOR, LLP, in Wilmington, Delaware; and Martin J. Bienenstock, Esq., Geoffrey T. Raicht, Esq., and Vincent Indelicato, Esq., at PROSKAUER ROSE LLP, in New York, represent the Debtors. About Rotech Healthcare Based in Orlando, Florida, Rotech Healthcare Inc. (NASDAQ: ROHI) -- http://www.rotech.com/-- provides home medical equipment and related products and services in the United States, with a comprehensive offering of respiratory therapy and durable home medical equipment and related services. The company provides equipment and services in 48 states through approximately 500 operating centers located primarily in non-urban markets. The Company reported a net loss of $14.76 million in 2011, a net loss of $4.20 million in 2010, and a net loss of $21.08 million in 2009. The Company's balance sheet at Sept. 30, 2012, showed $255.76 million in total assets, $601.98 million in total liabilities, and a $346.22 million total stockholders' deficiency. On April 8, 2013, Rotech Healthcare and 114 subsidiary companies filed petitions seeking relief under chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 13-10741) to implement a pre- arranged plan negotiated with secured lenders. Attorneys at Proskauer Rose LLP, and Young, Conaway, Stargatt & Taylor serve as counsel to the Debtors; Foley & Lardner LLP is the healthcare regulatory counsel; Akin Gump Strauss Hauer & Feld LLP is the special healthcare regulatory counsel; Barclays Capital Inc. is the financial advisor; Alix Partners, LLP is the restructuring advisor; and Epiq Bankruptcy Solutions LLC is the claims agent. Prepetition term loan lender and DIP lender Silver Point Capital and other consenting noteholders are represented by Wachtell, Lipton, Rosen & Katz, and Richards Layton & Finger PA. The U.S. Trustee at the end of April appointed an official committee of equity holders. Members include Alden Global Recovery Master Fund LP, Varana Capital Master LP, Wynnefield Partners Small Cap Value LP I, Bastogne Capital Partners, LP, and Kenneth S. Grossman P.C. Pension Plan. The plan is supported by holders of a majority of the first- and second-lien secured notes. The $290 million in 10.5 percent second-lien notes are to be exchanged for the new equity. Trade suppliers are to be paid in full, if they agree to continue providing credit. The existing $23.5 million term loan would be paid in full, and the $230 million in 10.75 percent first-lien notes will be amended. The Official Committee of Unsecured Creditors tapped Otterbourg, Steindler, Houston & Rosen, P.C., as counsel; Buchanan Ingersoll & Rooney PC as Delaware counsel; and Grant Thornton LLP as financial advisor. SAAB AUTOMOBILE: Judge Approves Liquidation Plan for U.S. Arm ------------------------------------------------------------- Patrick Fitzgerald writing for Dow Jones' DBR Small Cap reports that the U.S. arm of Saab Automobile AB won approval of its Chapter 11 liquidation plan, marking the end of the road for Swedish auto maker's bankruptcy proceedings. About Saab Automobile Saab Automobile AB is a Swedish car manufacturer owned by Dutch automobile manufacturer Swedish Automobile NV, formerly Spyker Cars NV. Saab halted production in March 2011 when it ran out of cash to pay its component providers. On Dec. 19, 2011, Saab Automobile AB, Saab Automobile Tools AB and Saab Powertain AB filed for bankruptcy after running out of cash. Some of Saab's assets were sold to National Electric Vehicle Sweden AB, a Chinese-Japanese backed start-up that plans to make an electric car using Saab Automobile's former factory, tools and designs. On Jan. 30, 2012, more than 40 U.S.-based Saab dealerships filed an involuntary Chapter 11 petition for Saab Cars North America, Inc. (Bankr. D. Del. Case No. 12-10344). The petitioners, represented by Wilk Auslander LLP, assert claims totaling US$1.2 million on account of "unpaid warranty and incentive reimbursement and related obligations" or "parts and warranty reimbursement." Leonard A. Bellavia, Esq., at Bellavia Gentile & Associates, in New York, signed the Chapter 11 petition on behalf of the dealers. The dealers want the vehicle inventory and the parts business to be sold, free of liens from Ally Financial Inc. and Caterpillar Inc., and "to have an appropriate forum to address the claims of the dealers," Leonard A. Bellavia said in an e-mail to Bloomberg News. Saab Cars N.A. is the U.S. sales and distribution unit of Swedish car maker Saab Automobile AB. Saab Cars N.A. named in December an outside administrator, McTevia & Associates, to run the company as part of a plan to avoid immediate liquidation following its parent company's bankruptcy filing. On Feb. 24, 2012, the Court granted Saab Cars NA relief under Chapter 11 of the Bankruptcy Code. Donlin, Recano & Company, Inc., was retained as claims and noticing agent to Saab Cars NA in the Chapter 11 case. On March 9, 2012, the U.S. Trustee formed an official Committee of Unsecured Creditors and appointed these members: Peter Mueller Inc., IFS Vehicle Distributors, Countryside Volkwagen, Saab of North Olmstead, Saab of Bedford, Whitcomb Motors Inc., and Delaware Motor Sales, Inc. The Committee tapped Wilk Auslander LLP as general bankruptcy counsel, and Polsinelli Shughart as its Delaware counsel. SANMINA CORP: Fitch Raises Issuer Default Rating to 'BB-' --------------------------------------------------------- Fitch Ratings has upgraded the Issuer Default Rating (IDR) for Sanmina Corporation to 'BB-' from 'B+'. Ratings for the senior secured bank facility and senior unsecured notes have been affirmed at 'BB+' and 'BB-' respectively. The Rating Outlook is Stable. Key Rating Drivers The upgrade of the IDR to 'BB-' reflects the following: Sanmina has significantly reduced debt over the past 15 months from $1.24 billion in December 2011 to $744 million as of March 2013. While the business continues to experience headwinds, margin performance has been steady, cash flow generation has been positive and management remains committed to deleveraging. Debt to EBITDA has declined from 3.6x to 2.6x over the same period. Total debt of $744 million is roughly equal to working capital at this point which Fitch views as providing reasonable comfort to debt holders should revenue continue to decline at the company. Sanmina has been successful in generating cash from reduced working capital over the past several years and using the proceeds to reduce debt, in lieu of any material share repurchases. Fitch believes that in the case of continued business declines, the company would likely further reduce debt to maintain what is now a reasonably conservative capital structure. Expectations are for continued volatility in the business but for Sanmina to benefit from renewed growth in its key market segments. The ratings and Stable Outlook reflect the following considerations: -- Fitch believes leading EMS providers, such as Sanmina, are strategic to the business operations and strategy of their customers given their role in product design consultation, component sourcing, manufacturing, fulfillment logistics, and repair/reverse logistics. -- Fitch believes Sanmina's service portfolio and cost basis is well suited for certain markets but the company has trailed its larger competitors in overall revenue growth over the past several years. Much of that relative underperformance can be attributed to high-volume, low-mix business that is outside of Sanmina's core focus. A key consideration going forward is whether Sanmina can grow consistently and profitably in the markets for which it is well positioned and maintain its focus on those markets over the long-run. Rating strengths include: -- Fitch's belief that Sanmina's focus on complex, low-volume manufacturing services, its expertise in the components space and other vertical integration capabilities should enable the company to compete effectively in certain markets and generate a reasonable return on invested capital; -- Sanmina's exposure and potential growth in non-traditional market segments such as defense, industrial and medical could provide greater diversification to the business over time and reduce historically high revenue volatility; -- A reasonably conservative balance sheet with expectations for further deleveraging and no debt financed share repurchases or acquisitions; and -- Sanmina is well diversified geographically and in its end- markets while it also remains one of the largest global EMS providers in the industry. Ratings concerns include: -- An intensely competitive environment which pressures profitability across the industry; -- The company's challenged performance at various times over the past five-plus years which has led to weaker than expected margin levels in an industry with minimal room for operational shortfalls; -- A high degree of vertically integrated operations (components represent 20% of revenue) which, while typically a driver of higher margins in growth periods, presents additional challenges for management execution and higher fixed costs; -- Modest segment concentration with roughly 48% of revenue coming from the highly cyclical networking and communications segment; -- A highly working capital intensive business that may be a drain on liquidity in periods of growth, although it tends to provide some measure of liquidity during business downturns. -- Customer concentration risk with Sanmina's top 10 customers representing roughly 50% of revenue. As of March 31, 2013, liquidity was solid with $412 million in cash and $177 million available under a $300 million senior secured asset backed lending facility expiring March 2017. Sanmina also has $184 million of short-term borrowing facilities at various foreign subsidiaries, under which $59.9 million was outstanding. This includes a $100 million unsecured working capital loan facility at one of the company's Chinese subsidiaries. These facilities expire at various dates through the second quarter of 2015. As of March 31, 2013, total debt outstanding was $744 million consisting principally of the following: -- $100 million outstanding under the company's $300 million senior secured asset backed lending facility expiring March 2017; -- $40 million loan secured by the company's corporate campus; -- $500 million of 7% senior unsecured notes due May 2019; and -- $60 million outstanding under various foreign subsidiaries' short-term borrowing facilities. Rating Sensitivities Positive: Future developments that may, individually or collectively, lead to positive rating action include: -- Absent a complete elimination of debt, positive rating action is not likely in the foreseeable future. Negative: Future developments that may, individually or collectively, lead to negative rating action include: -- Leverage in excess of roughly 3x, or debt materially in excess of net working capital; or -- Use of cash from reduced working capital during periods of revenue declines for shareholder friendly actions or acquisitions. Fitch has upgraded the following ratings for Sanmina: -- IDR to 'BB-' from 'B+'. Fitch has affirmed the following ratings for Sanmina: -- $300 million senior secured asset backed lending facility expiring March 2017 at 'BB+'; and -- $500 million 7% senior unsecured notes due May 2019 at 'BB-'. The recovery ratings for the senior secured and senior unsecured debt are no longer applicable following the upgrade of the IDR. The Rating Outlook is Stable. SAPPHIRE POWER: S&P Assigns 'B+' Rating to $280MM Sr. Facilities ----------------------------------------------------------------- Standard & Poor's Ratings Services said that it assigned its 'B+' project rating to Sapphire Power Finance LLC's $280 million senior secured facilities, consisting of a $250 million term loan B due in July 2018, and a $30 million revolving credit facility due in July 2018. At the same time, S&P assigned its '1' recovery rating, indicating "very high" (90% to 100%) recovery under its default scenario. The outlook on the debt issue ratings is stable. "Sapphire used net proceeds to pay a $54 million dividend to sponsors and refinance its preexisting senior secured facilities; a $185 million term loan maturing in 2018, which has $182 million outstanding; and a $25 million revolving facility maturing in 2016, with about $8 million currently drawn," said Standard & Poor's credit analyst Nora Pickens. A fund managed by Riverstone Holdings indirectly owns 100% of Sapphire. There is no project debt at the plant level, and thus, all plant cash flow services Sapphire debt. In addition, lenders benefit from a 100% cash flow sweep. The stable outlook reflects S&P's expectation of good operations and stability of cash flows resulting from a fixed-capacity market through May 2017 and the project's hedging activities through 2016, along with liquidity to address typical operational problems with these types of assets. "Factors that could lead to a downgrade include our expectation that debt at maturity increases beyond $350 per kW or if debt service coverage ratios steadily decline below levels appropriate for the 'B+' rating, in the 1x to 1.1x range. This would likely result from poor operational performance, higher operating and maintenance costs, or a widening disconnect between the heat rate call option provisions and actual performance. Conversely, we could raise the rating if we see and expect Sapphire to demonstrate sound operational performance and if it materially reduces debt at maturity, to about $100 to $150 per kW or so," S&P said. SHILO INN: Disclosure Statement Hearing to Be Held on March 20 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California, has slated the disclosure statement hearing in the Chapter 11 case of Shilo Inn, Twin Falls, LLC, for March 20, 2014, at 1:30 p.m. About Shilo Inn, Twin Falls Shilo Inn, Twin Falls, LLC, and six affiliates filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 13-21601) on May 1, 2013. Judge Vincent P. Zurzolo presides over the case. Shilo Inn, Twin Falls estimated assets of at least $10 million and debts of at least $1 million. Shilo Inn, Twin Falls; Shilo Inn, Nampa Blvd, LLC; Shilo Inn, Newberg, LLC; Shilo Inn, Seaside East, LLC, Shilo Inn, Moses Lake, Inc.; and Shilo Inn, Rose Garden, LLC each operates and owns a hotel. California Bank and Trust is the primary, senior secured lender for each of the Debtors. The Debtors sought Chapter 11 protection after CBT on May 1, 2013, filed for receiverships in district court. John-Patrick M, Fritz, Esq., and David B. Golubchik, Esq., at Levene Neale Bender Rankin, et al., in Los Angeles, represent Shilo Inn, Twin Falls, LLC, as counsel. SIMON WORLDWIDE: Amends Registration Agreement with Overseas Toys ----------------------------------------------------------------- Simon Worldwide, Inc., on July 15, 2013, entered into the First Amendment to the Registration Rights Agreement, dated Nov. 10, 1999, by and between the Company and Overseas Toys, L.P. The Amendment amends the Agreement to include within the definition of "Registrable Securities": (1) shares of the Company's common stock, par value $0.01 per share, purchased by Overseas Toys in a tender offer further described in the Tender Offer Statement on Schedule TO filed by Overseas Toys with the Securities and Exchange Commission on Nov. 1, 2010; and (2) any shares of common stock purchased by Overseas Toys in the rights offering further described in the Registration Statement on Form S-1, File No. 333-189020, filed by the Company with the SEC on May 31, 2013. Overseas Toys is the direct beneficial owner of 41,763,668 shares of the Company's Common Stock, representing approximately 82.5 percent of the Company's outstanding Common Stock. Multi- Accounts, LLC, is the general partner of Overseas Toys. OA3, LLC, a California limited liability company is the managing member of Multi-Accounts. Ronald W. Burkle, an individual, controls OA3. A copy of the Amended Registration Rights Agreement is available for free at http://is.gd/XcDiq2 Overseas to Exercise All Rights Overseas Toys has indicated that it intends to exercise all of the rights issued to it under the pro rata basic subscription right and to subscribe for the maximum additional shares pursuant to the over-subscription privilege that it would be entitled to purchase. Assuming no other holders exercise their rights in this offering, and that Overseas Toys exercises its basic and over-subscription privileges in full as indicated, after giving effect to this offering, Overseas Toys would own approximately 88.1 percent of the Company's common stock. The Company is currently controlled by Overseas Toys, L.P. Overseas Toys beneficially owns 41,763,668 shares of the Company's common stock, which represents approximately 82.5 percent of the outstanding shares. The Company is distributing, at no charge, to holders of record of the Company's common stock, nontransferable subscription rights to purchase an aggregate of up to 23,854,680 shares of the Company's common stock for an aggregate subscription price of $5,009,482. Each whole subscription right will entitle a holder of record of the Company's common stock, to purchase 0.471 shares of the Company's common stock at a subscription price of $0.21 per whole share. The per share subscription price was determined by the Company's board of directors, and represents a premium of 162.5 percent to the last reported sales price of the Company's common stock on the Over-The-Counter QB, as of May 30, 2013, the last trading day prior to the filing of the Company's initial registration statement with respect to this subscription rights offering. Assuming the subscription rights offering is completed, the Company intends to use $3,500,000 of the proceeds of the subscription rights offering to make a scheduled capital contribution to the Company's majority-owned subsidiary, Three Lions Entertainment, LLC. Shares of the Company's common stock are quoted on the OTCQB under the symbol "SWWI." As of May 30, 2013, the last reported sales price of the Company's common stock on the OTCQB was $0.08 per share. A copy of the amended Form S-1 prospectus is available at; http://is.gd/iHSMse About Simon Worldwide Based in Los Angeles, Simon Worldwide, Inc. (OTC: SWWI) no longer has any operating business. Prior to August 2001, the Company operated as a multi-national full-service promotional marketing company, specializing in the design and development of high-impact promotional products and sales promotions. At Dec. 31, 2009, the Company held an investment in Yucaipa AEC Associates, LLC, a limited liability company that is controlled by the Yucaipa Companies, a Los Angeles, California based investment firm. Yucaipa AEC in turn principally held an investment in the common stock of Source Interlink Companies, a direct-to-retail magazine distribution and fulfillment company in North America, and a provider of magazine information and front-end management services for retailers and a publisher of approximately 75 magazine titles. Yucaipa AEC held this investment in Source until April 28, 2009, when Source filed a pre-packaged plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. Simon Worldwide disclosed a net loss of $1.52 million on $0 revenue for the year ended Dec. 31, 2012, as compared with a net loss of $1.97 million on $0 revenue in 2011. The Company's balance sheet at March 31, 2013, showed $7.17 million in total assets, $98,000 in total liabilities, all current, and $7.07 million in total stockholders' equity. SMART ONLINE: Issues $230,000 Additional Convertible Note --------------------------------------------------------- Smart Online, Inc., sold an additional convertible secured subordinated note due Nov. 14, 2016, in the principal amount of $230,000, to a current noteholder upon substantially the same terms and conditions as the Company's previously issued notes. As with the Existing Notes, the Company is not permitted to prepay the New Note without approval of the holders of at least a majority of the aggregate principal amount of the Notes then outstanding. The Company plans to use the proceeds to meet ongoing working capital and capital spending requirements. Effective July 1, 2013, the Company amended its Amended and Restated Certificate of Incorporation to change its name from Smart Online, Inc., to MobileSmith, Inc. In anticipation of this name change, the Company's trading symbol on the OTCBB was changed to "MOST" effective May 28, 2013. About Smart Online Durham, North Carolina-based Smart Online, Inc., develops and markets a full range of mobile application software products and services that are delivered via a SaaS/PaaS model. The Company also provides Web site and mobile consulting services to not-for- profit organizations and businesses. Smart Online disclosed a net loss of $4.39 million in 2012, as compared with a net loss of $3.54 million in 2011. The Company's balance sheet at March 31, 2013, showed $1.24 million in total assets, $29.82 million in total liabilities, and a $28.57 million total stockholders' deficit. Cherry Bekaert LLP, in Raleigh, North Carolina, issued a "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has suffered recurring losses from operations and has a working capital deficiency as of Dec. 31, 2012, which conditions raise substantial doubt about the Company's ability to continue as a going concern. SUPERIOR PLUS: DBRS Confirms 'BB' Issuer Rating ----------------------------------------------- DBRS has confirmed the Issuer Rating on Superior Plus LP (SP-LP or the Company) at BB (high) and the ratings of the Senior Secured Notes and Senior Unsecured Debentures issued by SP-LP at BB (high) and BB (low), respectively. All trends are Stable. Pursuant to DBRS Recovery Ratings for Non-Investment Grade Corporate Issuers methodology, the recovery ratings of RR3 and RR6 on the above- noted securities are confirmed. SP-LP is a 99.9%-owned subsidiary of Superior Plus Corporation (SP-Corp), which is listed in the Toronto Stock Exchange. As SP-Corp has no other operating business, SP-LP's business cash flow is used to support all consolidated debt. Hence, we have assessed the consolidated financial metrics and liquidity in determining Superior's financial risk profile. SP-LP's ratings reflect the leading market positions and steady cash flows from its Canadian propane distribution business in the Energy Services (ES) division and Specialty Chemicals (SC) production. The ratings also take into account SP-Corp's deleveraging effort and the resulting improvement in financial metrics in the past two years and DBRS's expectation that the improvement will continue until it reaches and maintains its internal leverage targets. These strengths were somewhat offset by a number of business challenges facing the Company. They include (1) limited near-term demand growth potential in both ES and Construction Product (CPD) division, (2) earnings exposure to various exogenous factors not within the Company's control (such as winter temperatures and natural gas prices in ES, electricity costs in SC production) and (3) exposure of its sodium chlorate business to pulp mill production. SP-LP's business has been challenged since the recession in 2009 when performances of the companies it acquired to expand its geographic reach and customer base in the U.S. were below expectation, while demand for propane and heating oil were affected by unusually warm winters and demand for sodium chlorate in the SC division was affected by a decline in production in the pulp and paper industry. These headwinds, together with the significant debt burden used to finance the acquisitions, resulted in SP-Corp's consolidated financial metrics being materially weaker than those expected for the Company's ratings at the end of 2011. Following the appointment of the new CEO, Mr. Luc Desjardin, in November 2011, and a subsequent strategic review of the businesses, SP-Corp has refocused its efforts on deleveraging its balance sheets and on a set of initiatives under its "Destination 2015" business plan aimed at reducing inefficiencies in business operations, improving customer focus to reduce attrition, exploring cross-selling opportunities and improving supply chain management to reduce working capital requirements. While the initiatives are a work in progress and are likely to generate tangible results over the next two to three years, the deleveraging efforts have been well under way. Through a reduction in credit facility drawdown, partial redemption of senior secured notes and convertible debentures since the end of 2011, SP-LP has reduced its total debt by $342 million as of March 31, 2013, and the reduction was funded through an equity issuance of $138 million in Q1 2013, operating cash flow and reduction in working capital during the period. As a result, SP-Corp's financial metrics improved materially and are now consistent with those expected for the ratings, with adjusted cash flow-to-debt of 19% for last 12 months ended March 31, 2013, compared to 13% in 2011, and adjusted debt-to-EBITDA of 4.0 times (x) from 5.3x in 2011. Management has publicly stated its intention to continue deleveraging until SP-Corp reaches its target of lowering its unadjusted total debt-to-EBITDA to the low end of the 3.0x to 3.5x range (3.7x at March 31, 2013) and maintain that in the medium term. SP-Corp's liquidity remains acceptable for the ratings. It relies substantially on the $570 million credit facility ($339 million available as at March 31, 2013, and recently extended by one year to mature in June 2016) and its annual operating cash flow of about $200 million for liquidity. This is more than adequate to cover the projected capital expenditure and its reduced dividend level and allow further deleveraging as planned. DBRS recognizes that SP-Corp is currently objecting to a Notice of Reassessment of its 2009 and 2010 taxation years by Canada Revenue Agency (CRA) and intends to object similar reassessments for subsequent years expected to be received from CRA. While the issue remains unresolved, SP-Corp is required to pay CRA 50% of the contested tax amounts (estimated to add up to $26.5 million for taxable years between 2009 and 2013) upon receipt of reassessments expected between April 2013 and Q3 2013. The amounts are refundable in the event that the issue is resolved in SP-Corp's favour. DBRS has not factored the financial impact of such payments to SP-LP's ratings because of the uncertainty regarding the outcome and its timing. SP-LP's overall business risk profile remains supported by its leading market position in Canadian propane distribution and sodium chlorate production and by the diversity provided by other businesses, which reduce its dependence on the North American markets and to specific customer segments. Although prices of the distributed products could fluctuate, the Company typically earns a fixed-dollar margin over product and transportation costs in ES's propane and refined fuel distribution business, while a material proportion of SC's sodium chlorate sales are covered by contractual arrangements. The increasing contribution of chloralkali products in the SC division should improve business diversity and reduce the division exposure to the pulp and paper industry. Business volumes in the ES and SC divisions have been steady, albeit slow growing, in the long term, although short-term volume decline could occur in the event of warm winter temperature for ES and periods of low production in pulp industry affecting sodium chlorate demand. Electricity costs, which account for 70% to 85% of sodium chlorate variable production costs could also directly affect SC's profit margin. Although normalized temperature in the past winter, recent improved pulp production and low electricity prices have been helpful to Superior's results, these conditions are not within the Company's control and there is no assurance that they will persist. DBRS considers the business risk profile of the Company's much smaller CPD business materially weaker than those of the other segments. The CPD market is fragmented with intense competition, largely based on price, service and customer relationship, with a generally low barrier to entry. Demand is also cyclical and dependent upon general economic conditions and housing starts. Despite recent improvement in U.S. housing starts, commercial and industrial sectors remain weak and the Canadian residential market is slowing down. As such, demand conditions remain uncertain and CPD's future profitability will largely depend on its ability to improve its cost efficiency and supply chain management. DBRS believes that a material increase of the higher-risk CPD business, while currently not expected, could weaken Superior's overall business risk profile and pressure the ratings. The Stable trend on the ratings reflect DBRS's view that, while the SP-Corp's financial metrics have already improved to levels consistent with the rating, it will take a sustained management effort and more time before they return to levels supportive of a low-investment-grade financial risk profile. On the other hand, given management's concrete deleveraging effort to date and its stated target, DBRS believes that the likelihood of deterioration in financial metrics and business risk profile that warrant a rating downgrade is now materially reduced. We also expect industry fundamentals, SP-LP's business mix and overall business risk profile to remain largely unchanged in the medium term. TALLGRASS ENERGY: Obtains Creditor Protection Under CCAA -------------------------------------------------------- Tallgrass Energy Corp. on July 17 disclosed that, after careful consideration of all available alternatives, the Board of Directors of TEC determined that it was in the best interests of all of its stakeholders to seek creditor protection under the Companies' Creditors Arrangement Act (Canada). The Company filed its application for protection under the CCAA and has obtained an interim stay of proceedings from its creditors until July 24, 2013 pursuant to an order of the Alberta Court of Queen's Bench. The CCAA application of TEC was adjourned until Thursday July 24, 2013 when its secured lenders will also be bringing an application to appoint a receiver over the property and assets of TEC which will be heard concurrently with the Company's CCAA application. The Interim Stay has been put in place by the Court in order to allow the Company to stabilize its affairs until a hearing on the merits of its CCAA application can be held. The Company is entitled by the terms of the Interim Stay to manage its day to day affairs. The Interim Stay also provides that, among other things, during the Stay Period: 1. No proceedings may be commenced against the Company or its property; 2. All rights and remedies of any person are stayed and suspended and shall not be commenced or proceeded with except with leave of the Court; 3. No person shall accelerate, suspend, discontinue, fail to honor, alter, interfere with, repudiate, terminate or cease to perform any right, renewal right, contract, agreement, license or permit in favor of or held by the Company; 4. All persons are obligated to continue to provide services under agreements currently in place with the Company and are restrained from discontinuing, altering, interfering with, suspending or terminating the supply of such goods or services as may be required by the Company or exercise any other remedy provided under such agreements or arrangements; and 5. No proceedings may be commenced or continued against any of the former, current or future directors or officers of the Company with respect to any claim against directors or officers that arose before the date of the Order. Recently, TEC has been hampered by liquidity challenges due to a number of market driven and production issues associated with its assets, details of which will soon be available. The Interim Stay stays creditors and others from enforcing rights against TEC. TEC will issue a further press release on or before July 24, 2013 which will provide an update. While under the Interim Stay, the Board of Directors maintains its usual role and management of TEC remains responsible for the day- to-day operations of the company. Managing the relationships with TEC's counterparties through the recent uncertainty has absorbed considerable staff resources. At the current time, Management and the Board of Directors are actively focusing on obtaining CCAA protection so that it can develop an effective Plan of Arrangement or Compromise to fulfill the requirements of CCAA protection. Every effort will be made to ensure that all stakeholders in TEC are kept informed of developments affecting TEC as they occur. Tallgrass is continuing to work with a lending group interested in refinancing the Company's debt instruments and providing working capital to fund the Company's exploration activities and capital program. This process is evolving but there is no assurance that funding will be secured. Additionally, the Company sold two properties in its Central Alberta land package for aggregate proceeds of $223,000. These proceeds have been used to pay down the $12 million operating loan facility which is now reduced by this same amount. Headquartered in Calgary, Tallgrass Energy Corp., formerly Anglo Canadian Oil Corp. -- http://www.tallgrassenergy.ca-- is a junior oil and gas company engaged in the exploration, development and exploitation of oil and gas reserves in Western Canada. Anglo has a land position in the oil rich Nordegg Member formation, comprising 269 sections (172,160 acres) in and around the Grande Prairie region of North Western Alberta. Anglo holds a 100% interest in this dominant position. In March 2011, Anglo secured 34,456 net hectares of lands principally targeting the Duvernay and Beaverhill Lake oil prone formations in Central Alberta. Anglo produces heavy oil from its 20 section (12,800) 100% interest in a Bakken play in South West Saskatchewan. Its properties include Nordegg Play and Bakken Play. Effective December 31, 2012, Anglo and Tallgrass Energy Corp. (Tallgrass) completed a plan of arrangement (the Arrangement) the amalgamation of Anglo and Tallgrass. The resulting amalgamated company continue under the name Tallgrass Energy Corp. TELKONET INC: Stockholders Approve Executive Compensation --------------------------------------------------------- Telkonet, Inc., continued its annual meeting of stockholders on July 12, 2013, at which the stockholders: (a) elected William H. Davis, Jason L. Tienor, Glenn A. Garland and Tim S. Ledwick as directors to serve for the ensuing year and until their successors are elected; (b) approved, on an advisory basis, the compensation of the Company's named executive officers; and (c) indicated "every year" as the desired frequency of future advisory vote on executive compensation. About Telkonet Milwaukee, Wisconsin-based Telkonet, Inc., is a clean technology company that develops and manufactures proprietary energy efficiency and smart grid networking technology. Telkonet disclosed net income of $390,080 on $12.75 million of total net revenue for the year ended Dec. 31, 2012, as compared with a net loss of $1.90 million on $11.18 million of total net revenue during the prior year. Baker Tilly Virchow Krause, LLP, in Milwaukee, Wisconsin, issued "going concern" qualification on the consolidated financial statements for the year ended Dec. 31, 2012. The independent auditors noted that the Company has a history of operating losses and negative cash flows from operations, and an accumulated deficit of $117,954,116 that raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at March 31, 2013, showed $14.56 million in total assets, $5.36 million in total liabilities, $3.43 million in total redeemable preferred stock, and $5.75 million in total stockholders' equity. TEMPLE UNIVERSITY: Moody's Cuts Ratings to Ba2, Outlook Negative ---------------------------------------------------------------- Moody's Investors Service has downgraded to Ba2 from Ba1 the ratings of Temple University Health System. The rating outlook is negative at the lower rating level. The rating action affects approximately $525 million of rated debt issued through the Hospitals and Higher Education Facilities Authority of Philadelphia. Rating Rationale The downgrade to Ba2 rating from Ba1 is based on the expectation that operating losses will be significant in FY 2013, reflecting a material negative variance from budgeted expectations provided by management. The Ba2 also reflects ongoing challenges of a weak fundamental credit profile, including challenging demographics, highly leveraged balance sheet and operating profile and increasing dependence on supplemental Commonwealth funding. If unmitigated such challenges could suggest a rating level several notches below the current Ba2 rating level. However, TUH's rating heavily incorporates Temple's important role as a safety net provider for the City of Philadelphia as substantiated by material and increasing funding from the Commonwealth and, the System's position as the academic medical center for Aa3-rated Temple University (TU), which is the sole corporate member of TUHS. The rating pressures are somewhat tempered by recent success in physician recruitment that has translated into stable volumes after a multi-year decline, at a time when volumes nationally are declining and essentiality in the market place. Also TUHS's sizable operating base and affiliation with Fox Chase Cancer Center, a National Cancer Institute Comprehensive Cancer Center, provide a platform for future clinical expansion into quaternary level oncology. The revision in the rating outlook to negative from stable reflects ongoing pressure on operating performance and thin operating cash flow that, if not reversed, will reduce cash reserves weakening the fundamental profile further. Challenges - Multiple year trend of significant, and growing, operating losses, in spite of significant and growing supplemental funding from the Commonwealth; TUHS reported operating losses of $14.9 million (-1.5%) in FY 2011, $24.2 million (-2.4%) in FY 2012 and $58.6 million (-5.9%) through nine months of FY 2013; performance in FYE 2013 reflects a material variance from budget - Concerns that cash balances will trend downwards as cash-flow from operations in FY 2013 will fall short of comprehensive funding needs including capital expenditures and pension; management's expectation that 2014 performance will also be weaker than represented at the time of the last debt issuance suggesting downward pressure on cash and investments as cash- flow will be stressed to meet needed capital investment - Financial profile for period ending March 31, 2013 translates into weak leverage measures as reflected by cash-to-debt of 63% and thin peak debt service coverage of 0.9 times - Extremely high mix of Medicaid (41.6% of gross inpatient and outpatient revenue at FYE 2012) and indigent-related revenue streams. TUHS is also increasingly dependent on State funding and appropriations to support operations due to the disproportionate mix of indigent-related revenues. - A weaker economy in Pennsylvania and the Philadelphia area has affected area-wide volumes. The Commonwealth in general is confronted with a long trend of below-average economic and population growth - Competition within the Philadelphia market, particularly for tertiary and quaternary clinical services, continues to intensify Strengths - Essential role as a safety net provider to Southeastern Pennsylvania, with an indispensability quotient in the City of Philadelphia; tangible willingness on the part of the Commonwealth to leverage available resources in support of TUHS as evidenced by a long history of stable or growing supplemental payments from the Commonwealth; total supplemental Commonwealth funding is expected to increase in FY 2013 - Turn-around initiatives are well articulated and have included or will include continued physician recruitment, a large scale restructuring of most support services as well as clinical processes, workforce reductions, revenue cycle initiatives (collections, coding, documentation), operations improvements (efficiencies, supplies), physician led clinical process redesign, and market development including strategic clinical recruitments. - Position as the academic medical center for Aa3-rated Temple University. Though the University has given no indication of explicit financial support for bond payments, Moody's believes that the Health System's importance to the University's mission and strategies with the School of Medicine and research emphasis provides for some of the lift of an otherwise well below investment grade financial profile - Affiliation with the Fox Chase Cancer Center, a clinically renowned institution - Still adequate absolute balance sheet resources, with $337.3 million of unrestricted cash and investments equating to approximately 92 days cash as of March 31, 2013. Investments are heavily oriented toward cash and fixed income investments (80%). - All fixed rate debt structure, and a modest, but growing, pension liability (approximately $38 million at FYE 2012); management reports no additional borrowing plans at this time Outlook The revision in the rating outlook to negative from stable reflects ongoing pressure on operating performance and thin operating cash flow that, if not reversed, will reduce cash reserves weakening the fundamental profile further. What could change the rating -- UP Given the negative rating outlook an upgrade in the near term is unlikely. Over the longer term: a sustained improvement in operating cash flow driven by internal operational improvement and not growth in supplemental payments; growth in revenue that has resulted from clinical activities; build of balance sheet cushion relative to debt and operations; continued growth in demand, market share and acuity of services What could change the rating -- DOWN Deeper operating losses; deterioration of cash; inability to grow revenues and increase cash flow from core operations; increase in debt; disintegration of current relationship with TU; reduction in support from the Commonwealth that is not met with core operational improvement at the clinical enterprises; erosion of market share Methodology The principal methodology used in this rating was Not-for-Profit Healthcare Rating Methodology published in March 2012. THQ INC: Gets Ch. 11 Plan Confirmed And $4MM Tattoo Claim Pared --------------------------------------------------------------- Matt Chiappardi of BankruptcyLaw360 reported that a Delaware bankruptcy judge gave the go-ahead to defunct video game maker THQ Inc.'s Chapter 11 liquidation plan Tuesday, but ruled the estate is not on the hook for the full amount, originally $4 million, of a tattoo copyright infringement claim regarding its Ultimate Fighting Championship titles. According to the report, U.S. Bankruptcy Judge Mary F. Walrath confirmed the plan after hearing that THQ had resolved the vast majority of objections, many of which were related to individual claims. 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: Risk-Mitigation Provider Nails $2 Million Loan ------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that TLO LLC received final approval this week for a $2 million secured loan supplied by the deceased founder's daughters. According to the report, the loan will bear interest at 9 percent. With consent from the secured lender Technology Investors Inc., the bankruptcy loan will come ahead of existing debt. Boca Raton, Florida-based TLO listed assets of $46.6 million and debt totaling $109.9 million, including $93.4 million in secured claims. The report notes that principal lender TII was owed $89 million at the outset of bankruptcy. 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. 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. Robert C Furr, Esq., and Alvin S. Goldstein, Esq. at Furr & Cohen serve 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. Paul J. Battista, Esq., and Mariaelena Gayo-Guitian, Esq., at Genovese, Joblove & Battista, P.A., represent the Official Committee of Unsecured Creditors as counsel. TOMMY THOMPSON: Receiver Wants Bankruptcy Case Tossed ----------------------------------------------------- Patrick Fitzgerald, writing for The Wall Street Journal, reported that the court-appointed receiver now in charge of Tommy Thompson's deep-sea exploration companies wants a bankruptcy judge to sink the fugitive treasure hunter's bankruptcy case. WSJ recalled that Mr. Thompson is the engineer and undersea explorer who in the 1980s found the wreck of the SS Central America, a U.S. mail steamer that went down off the North Carolina coast in 1857 with 18 tons of gold. Within a few years, Mr. Thompson, 60, had recovered more than three tons of gold, silver and other treasures, estimated to be worth at least $100 million. He's been fighting with former partners and investors ever since. The report further recalled that in May an Ohio judge ordered the receiver to take over Thompson's companies, Columbus Exploration LLC and Recovery LP. Now that receiver, Ira Kane, intends to ask Judge Peter Walsh of the U.S. Bankruptcy Court in Wilmington to dismiss the case. A hearing is scheduled for Aug. 5. Mr. Thompson's companies ended up in bankruptcy court after group of creditors filed an involuntary bankruptcy petition against them in Delaware, the report said. But an investor group that had long been sparring with Mr. Thompson claimed Columbus Exploration's lawyer, Rick Robol, orchestrated the bankruptcy in an effort to prevent the receivership, a charge Mr. Robol has denied. Mr. Robol said in an email that the creditors expect to meet with the receiver next week this week, after which they'll be able to respond to his bid to dismiss the case. Since bringing up more than three tons of treasure from 8,500 feet below the Atlantic, Mr. Thompson's fortunes have faltered, the report noted. There have been no further explorations or recoveries since the late 1980s. He's also on the lam, WSJ said. Mr. Thompson, who'd allegedly been living in Florida, disappeared with his assistant, Alison Antekeier, last year after an Ohio judge in a separate case issued an order for his arrest. He remains at large. UC HOLDINGS: S&P Assigns 'B' Rating to $325MM Senior Secured Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'B' corporate credit rating on UC Holdings Inc. At the same time, S&P assigned its 'B' issue rating and '4' recovery rating to the proposed $325 million senior secured notes to be issued by Chassix Inc. A '4' recovery rating indicates S&P's expectation of average (30%-50%) recovery in the event of payment default. All ratings are subject to a review of final documentation. S&P intends to withdraw the 'B' issue-level rating on the $216.4 million senior secured term loan A (with DMI SMW Holding Corp., Diversified Machine Inc. [DMI], Concord International Inc., and certain of their subsidiaries as borrowers) once the proposed financing is complete because all existing debt will have been refinanced. "The ratings on UC reflect our view of the company's "highly leveraged" financial risk profile and "vulnerable" business risk profile," said credit analyst Nishit Madlani. The stable outlook reflects S&P's expectation that UC's leverage, pro forma for the transaction, will be about 4.8x at the transaction's close (based on EBITDA for the 12 months ended March 31, 2013), but will improve to 4.3x or less over the next 12 months. The financial risk assessment also reflects S&P's expectation for negative FOCF in 2013, mostly due to integration-related costs and higher year- over-year capital expenditures. The integration-related costs are a result of the December 2012 integration of DMI and Concord International Inc. (SMW) under private-equity sponsor Platinum Equity Advisors LLC (Platinum), which owned both DMI and SMW prior to the integration. The "highly leveraged" financial risk profile reflects S&P's belief that the company's the financial policy will remain aggressive given the potential that the company may eventually distribute dividends to owners rather than reduce debt. For the rating, S&P expects UC to maintain FOCF/debt in the low-single digits and a leverage ratio of 3.5x-4x over the next two years, including S&P's adjustments (primarily the operating leases' present value). S&P do not expect UC to generate free cash flow until 2014, given the operational issues at certain plants and the company's need to make investments in new capacity to meet somewhat higher volumes. The "vulnerable" business risk assessment reflects the combined entity's concentrated customer mix and limited geographic diversity amid multiple industry risks that automotive suppliers face, including volatile demand, high fixed costs, intense competition, and severe pricing pressures, which are only partially offset by our expectation that North American production will continue to rise. DMI has been facing operational issues at its important iron foundry in Columbus, Ga., as a result of what S&P assumes was underinvestment in prior years--before Platinum assumed ownership. This led to higher-than-expected operating costs because of excess labor, significant downtime related to equipment, maintenance, and upgrades at the plant. Despite the operational issues and the ongoing execution risk involved in managing new launches over the next few quarters, S&P assumes in its base case that the company's implemented plan and additional investments to improve plant efficiency and increase capacity will lead to some margin improvement in the second half of 2013 and into 2014. Over the longer term, S&P assumes margins will improve mostly as a result of capacity consolidation, improved purchasing scale, and larger in-house production capabilities as a result of vertical integration. Still, S&P considers UC's margins sensitive to future demand given its high operating leverage. Synergy-related costs connected to the integration of various functional areas of the stand-alone entities could be near-term headwinds for margins. UC's business risk profile considers the company's concentrated customer base to be a significant risk. Geographic diversity is also limited compared to some of its similarly rated peers because most of UC's revenues are in North America, and S&P expects this to be the case in the near future. More than three-fourths of UC's revenues tie directly or indirectly to the U.S. automakers' domestic operations. These companies are currently all profitable following multiyear restructurings, but they have varying track records. Although vehicle production has recently increased amid the ongoing slow recovery in U.S. auto demand, future production could be volatile given the weak economic outlook. Separately, S&P believes any significant market share losses for Ford Motor Co. (BB+/Positive/--), General Motors Co. (BB+/Stable/--), or Chrysler Group LLC (B+/Positive/--) would hurt UC. "We believe UC has a sizeable market share in its main segments and has the potential to improve this over the longer term, given its full-service capabilities across casting and machining for aluminum and iron. However, we believe that the market is still fragmented. Some competitors are the in-house operations of larger companies or automakers, while others are smaller and more vulnerable. UC's contracts with its customers appear to provide a reasonable buffer against raw-material cost increases. This is critical because volatile raw-material costs hurt certain acquired operations under the previous owners," S&P noted. Also, UC has no pension or postretirement health care obligations, and its relationship with union representation appears manageable, in our view. Other positives include a balanced end-market mix in terms of global program sourcing on cars and light trucks, and the potential to leverage from the trend toward aluminum-related sourcing from some large customers. Although S&P believes UC has acquired some competitive technologies and capabilities at attractive prices, S&P do not expect the company to have any significant pricing leverage with its larger and more powerful customer base. The stable rating outlook reflects S&P's expectation that UC's leverage, pro forma for the transaction, would improve to 4.3x or less over the next year. S&P also assumes the company will not generate FOCF until 2014. S&P could raise the ratings over the next year if the company sustainably turns around recent inefficiencies in some of its plants, with increasing prospects for achieving low-double-digit EBITDA margins. This could prompt S&P to revise its business risk profile to "weak" from "vulnerable." For an upgrade, S&P would also expect the company to sustain the ratio of FOCF to debt in the mid- to high-single digits and maintain a financial policy commensurate with the leverage ratio in the 3.5x-4.0x range. This could lead S&P to revise the financial risk profile to "aggressive" from "highly leveraged." "We could lower the ratings if weaker-than-expected operating performance led to adjusted leverage of well above 5x, with a reduction in liquidity and increased prospects for negative FOCF even in 2014. This could occur if the company increases borrowings under its ABL facility for meaningfully higher-than- anticipated investments to upgrade certain facilities and to fund product launch-related costs, further weakening its liquidity. This could also occur if it appears unlikely that EBITDA margins would improve to our base case in 2014, and revenue growth and working capital performance are less favorable than we expect," S&P said. Privately held UC does not disclose financial results. USA BROADMOOR: Wins Okay to Access Wells Fargo Cash Collateral -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, according to USA Broadmoor LLC's case docket, authorized the use of cash collateral which creditor Wells Fargo Bank Minnesota NA asserts an interest. The Debtor is authorized to proceeds generated by the lease or rental of apartments units (cash collateral) to pay operating expenses so long as any individual expense category does not exceed the amount in the budget by more that 15 percent in any month, provided that the Debtor may not exceed the entire amount for any month in the budget. The Debtor will not be authorized to pay any management fees absent further order of the Court. Wells Fargo serves as trustee for the Registered Holders of GMAC Commercial Mortgage Securities Inc., Mortgage Pass-Through Certificates, series 2002-c3, by and through its special servicer CWCapital Asset Management LLC. As adequate protection from any diminution in value of the lender's collateral, the Trust is granted a replacement lien against the Debtor's cash collateral to the same extent, validity, and priority as existed as of the Petition Date. About USA Broadmoor, LLC USA Broadmoor, LLC, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-04880) on April 16, 2013. The petition was signed by Hugh L. Caraway, chief executive officer of Internacional Realty, Inc., member. The Debtor estimated assets and debts of at least $10 million, respectively. Judge Michael G. Williamson presides over the case. The Debtor is represented Amy Denton Harris, Esq. at Stichter Riedel Blain & Prosser, P.A. USA BROADMOOR: Gets Final OK to Employ Stichter Riedel as Counsel ----------------------------------------------------------------- The Hon. Michael G. Williamson of the U.S. Bankruptcy Court for the Middle District of Florida authorized USA Broadmoor, LLC to employ Stichter, Riedel, Blain & Prosser, P.A. as counsel. USA Broadmoor, LLC, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 13-04880) on April 16, 2013. The petition was signed by Hugh L. Caraway, chief executive officer of Internacional Realty, Inc., member. The Debtor estimated assets and debts of at least $10 million, respectively. Judge Michael G. Williamson presides over the case. The Debtor is represented Amy Denton Harris, Esq. at Stichter Riedel Blain & Prosser, P.A. VIVARO CORP: Hires Gabriel Del Virginia to Pursue Avoidance Suits ----------------------------------------------------------------- Vivaro Corp. et al., ask the U.S. Bankruptcy Court for approval to employ Gabriel Del Virginia as special counsel to investigate and prosecute the avoidance actions, including any all services required to prosecute and settle avoidance actions. GDV has agreed to receive compensation on a contingency basis which recoveries will be limited to: (x) 22.50% of any recovery from the actions settled or resolved before trial and (y) 33% of any amounts recovered after trial to judgment. Where the settlement of an avoidance action involves the waiver of a claim against one of the Debtors the value of such waiver attributed to the general unsecured claims should be 1% for the purposes of GDV's fees. GDV attests he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The attorney can be reached at: Gabriel Del Virginia Esq. 880 Third Avenue, 13th Floor, New York, NY 10022. Tel: 212-371-5471 Fax: 212-371-0460 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. VOICES OF FAITH: Agreed to Restructure FCR Debt, Case Dismissed --------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Georgia dismissed the Chapter 11 case of Voices of Faith Ministries, Inc. The Debtor and Foundation Capital Resources, Inc., reached an agreement to restructure the Debtor's outstanding obligations to FCR. The agreement provides for, among other things: -- the dismissal of the Debtor's action and implement the restructuring agreement that will allow the Debtor to expeditiously emerge from bankruptcy and ameliorate any negative impact that the pendency of the bankruptcy has had on the Debtor's ability to grow its congregation, and thus its income from tithes and offerings; and -- the Debtor to avoid the cost and expense of the confirmation process if the parties are unable to consensually implement the restructuring agreement; -- the Debtor to reduce its debt service to FCR, thus providing Debtor with additional cash flow to sustain its ministries and repay its secured and unsecured creditors. FCR is represented by John A. Thomson, Jr., Esq., at Womble Carlyle Sandridge & Rice, LLP. About Voices of Faith Ministries, Inc. Voices of Faith Ministries, Inc., is a Georgia non-profit corporation that operates a Christian faith church known as Voices of Faith Ministries. It has 10,000 attending members and five locations. The Debtor's properties consist of seven buildings and two parcels of vacant land located in Georgia and Louisiana. Based in Stone Mountain, Georgia, Voices of Faith filed for Chapter 11 bankruptcy (Bankr. N.D. Ga. Case No. 11-85028) on Dec. 5, 2011. The petition was signed by Gary Hawkins, Sr., CEO. The Debtor has hired Moore Law Group LLC (John A. Moore) and Geiger Law LLC as co-bankruptcy counsel. VPR OPERATING: Gets Final Approval to Use Cash Collateral --------------------------------------------------------- The Hon. Tony M. Davis of the U.S. Bankruptcy Court for the Western District of Texas authorized, on a final basis, VPR Operating, LLC, et al. to (i) obtain up to an aggregate amount of $2,500,000 in postpetition financing from Delfinco, LP and Victory Park Credit Opportunities, LP, and Victory Park Management, LLC, as administrative and collateral agent; and (ii) use cash collateral. The Debtors acknowledge and agree that, as of the Petition Date, the aggregate amount of no less than $83,356,939 was due and owing in respect of loans and other financial accommodations made by the Prepetition Lenders pursuant to the Prepetition Debt Documents. The Debtors would use the loan and the cash collateral to continue the operations of their businesses. As adequate protection from any diminution in value of the lender's collateral, the Debtors will grant the prepetition agent replacement liens and superpriority administrative expense claims status, subject to carve out on certain expenses. About VPR Operating VPR Operating, LLC, and three related entities sought Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 13-10599) in Austin on March 29, 2013. Brian John Smith, Esq., at Patton Boggs LLP, serves as the Debtor's counsel. Judge Craig A. Gargotta presides over the case. The Debtor disclosed $13,400,000 in assets and $11,119,045 in liabilities as of the Chapter 11 filing. Privately owned VPR is an oil and gas company focused on acquiring and developing assets in the domestic onshore basins of the United States. It has 53 producing wells, which generate revenue of approximately $375,000 per month on average after royalty payments. VPR was founded in 2008, and maintains producing oil and gas properties in Oklahoma and New Mexico. The U.S. Trustee appointed five entities to an official committee of creditors. Kell C. Mercer at Brown McCarroll, L.L.P. represents the Official Committee of Creditors. VPR OPERATING: Committee Can Retain Brown McCarroll as Counsel -------------------------------------------------------------- The Hon. Tony M. Davis of the U.S. Bankruptcy Court for the Western District of Texas authorized the Official Committee of Unsecured Creditors in the Chapter 11 cases of VPR Operating, LLC, et al. to retain Brown McCarroll, LLP as its counsel. As reported by the Troubled Company Reporter on June 17, 2013, the hourly rates of the firm's personnel are: Stephen W. Lemmon $550 Kell C. Mercer $450 Associates $225 - $450 Paraprofessionals $95 - $200 To the best of the Committee's knowledge, Brown McCarroll is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About VPR Operating VPR Operating, LLC, and three related entities sought Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 13-10599) in Austin on March 29, 2013. Brian John Smith, Esq., at Patton Boggs LLP, serves as the Debtor's counsel. Judge Craig A. Gargotta presides over the case. The Debtor disclosed $13,400,000 in assets and $11,119,045 in liabilities as of the Chapter 11 filing. Privately owned VPR is an oil and gas company focused on acquiring and developing assets in the domestic onshore basins of the United States. It has 53 producing wells, which generate revenue of approximately $375,000 per month on average after royalty payments. VPR was founded in 2008, and maintains producing oil and gas properties in Oklahoma and New Mexico. The U.S. Trustee appointed five entities to an official committee of creditors. Kell C. Mercer, Esq., at Brown McCarroll, L.L.P. represents the Official Committee of Creditors. VPR OPERATING: Denies Hiring of Global Hunter as Financial Advisor ------------------------------------------------------------------ The Hon. Tony M. Davis of the U.S. Bankruptcy Court for the Western District of Texas denied VPR Operating, LLC, et al.'s motion to employ Global Hunter Securities LLC as financial advisors and investment banker. As reported by the Troubled Company Reporter on June 17, 2013, prior to the commencement of their proceedings, the Debtors were working with a different investment bank, Evercore Partners, to assist them in evaluating potential restructuring alternatives. In the course of evaluating the postpetition retention of an investment banker, the Debtors sought proposals from several investment banking firms (including Evercore) with experience in both oil and gas and bankruptcy transactions. After weighing the proposals and conducting interviews with certain of the investment banking teams, the Debtors determined that Global Hunter had the most experience and presented the best overall value for the estates. Global Hunter was to, among other things: a. review and analyze the Debtors' businesses and financial projections; b. evaluate the Debtors' strategic and financial alternatives; c. assist the Debtors in evaluating, structuring, negotiating and implementing potential restructuring transactions; and d. assist the Debtors in preparing descriptive materials to be provided to parties that may participate in potential restructuring transactions. The Debtors agreed to pay Global Hunter: a. an initial advisory fee of $65,000, payable upon Court approval of Global Hunter's employment; b. upon the closing of a M&A Transaction, a M&A fee equal to two and a half percent of the aggregate consideration received in connection with such M&A Transaction, payable at the closing of such M&A Transaction. If the M&A transaction involves multiple sales of portions of the Debtors' assets, the M&A Fee for any one sale will be the greater of (i) two and a half percent of the aggregate consideration for such sale; or (ii) $200,000; provided, however, that if three or more sales are consummated, the total amount of M&A Fees payable will be capped at the greater of (x) two and a half percent of the aggregate consideration for all such sales, or (y) $600,000 for all of the M&A Transactions consummated; c. a new capital fee equal to three percent for any unsecured or junior debt, one percent for any senior secured debt and six percent for any equity or convertible securities, all computed as a percentage of the gross cash proceeds raised in the case of equity, or the principal amount raised in the case of debt; d. in the case of any other transaction or recapitalization, whether specifically described or not, including, but not limited to, a "credit bid" by secured lenders, a minimum fee in the amount of $400,000; provided, however, that the Minimum Fee would only be payable if the M&A Fee or New Capital Fee were not otherwise earned and payable; and e. reimbursement of all reasonable, out-of-pocket expenses in an amount not to exceed $100,000 in the aggregate. The Debtors will also provide Global Hunter with a $25,000 advance against expenses subject to reimbursement under the Engagement Agreement. To the best of the Debtor's knowledge, Global Hunter is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. About VPR Operating VPR Operating, LLC, and three related entities sought Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 13-10599) in Austin on March 29, 2013. Brian John Smith, Esq., at Patton Boggs LLP, serves as the Debtor's counsel. Judge Craig A. Gargotta presides over the case. The Debtor disclosed $13,400,000 in assets and $11,119,045 in liabilities as of the Chapter 11 filing. Privately owned VPR is an oil and gas company focused on acquiring and developing assets in the domestic onshore basins of the United States. It has 53 producing wells, which generate revenue of approximately $375,000 per month on average after royalty payments. VPR was founded in 2008, and maintains producing oil and gas properties in Oklahoma and New Mexico. The U.S. Trustee appointed five entities to an official committee of creditors. Kell C. Mercer, Esq., at Brown McCarroll, L.L.P. represents the Official Committee of Creditors. VPR OPERATING: Patterson Approved as Restructuring Officer ---------------------------------------------------------- The Hon. Tony M. Davis of the U.S. Bankruptcy Court for the Western District of Texas signed off on an agreed order authorizing the employment of William Patterson as chief restructuring officer for VPR Operating, LLC, et al. The agreement was entered with the Official Committee of Creditors to resolve the motion filed on April 30, 2013, which sought for the appointment of a Chapter 11 trustee. The agreement also provides that the board of directors, managing members, or other applicable managing entity (governing board) of the Debtors to vest the CRO with the powers to investigate, oversee, manage and direct the acts, conduct, assets, liabilities, and financials. In a separate filing, the Committee notified the Court that it is withdrawing its motion to appoint Chapter 11 trustee. In seeking appointment of a trustee, the Committee stated that (i) Robert Pullen, president and C.E.O. of the Debtors, has defrauded investors, participated in forging documents, and committed actual fraud, breached fiduciary duties, and caused willful and malicious injury to property; and (ii) the Debtors and their alleged secured creditors/owners are attempting to put into place DIP Financing under which the Debtors are virtually assured to default. The Committee asserted that a trustee will protect the interests of the estate. The CRO will, among other things: a) manage the day-to-day operations of the Debtors; b) serve as the principal contact for the Debtors' creditors, and, subject to Court approval (if applicable), negotiate with, and enter into agreements and settlements with the Debtors' creditors; c) prepare any reports required to be filed with the Court or produced to the Debtors' lenders, and the Committee. The CRO and additional staff will be compensated on a monthly basis at the lesser of (i) the hourly rate for the CRO or additional staff (not to exceed $350 per hour) multiplied by the number of hours expended by the CRO and the additional staff during such month, or (ii) $25,000. About VPR Operating VPR Operating, LLC, and three related entities sought Chapter 11 protection (Bankr. W.D. Tex. Lead Case No. 13-10599) in Austin on March 29, 2013. Brian John Smith, Esq., at Patton Boggs LLP, serves as the Debtor's counsel. Judge Craig A. Gargotta presides over the case. The Debtor disclosed $13,400,000 in assets and $11,119,045 in liabilities as of the Chapter 11 filing. Privately owned VPR is an oil and gas company focused on acquiring and developing assets in the domestic onshore basins of the United States. It has 53 producing wells, which generate revenue of approximately $375,000 per month on average after royalty payments. VPR was founded in 2008, and maintains producing oil and gas properties in Oklahoma and New Mexico. The U.S. Trustee appointed five entities to an official committee of creditors. The Committee tapped Brown McCarroll LLP as its counsel. WASHINGTON MUTUAL: Court Narrows Suit v. Ex-Retail Banking Head --------------------------------------------------------------- Bankruptcy Judge Mary F. Walrath granted, in part, and denied, in part, the motion of James Corcoran, a former president of retail banking for Washington Mutual Inc., to dismiss the complaint filed by the Official Committee of Unsecured Creditors of Washington Mutual, for failure to state a claim on which relief can be granted. The Committee and the Debtors entered into a stipulation approved by the Court, which authorized the Committee to bring certain causes of action on behalf of the Debtors' estates. On Sept. 24, 2010, the Committee commenced the adversary proceeding against Mr. Corcoran to avoid a transfer Mr. Corcoran had received pursuant to his Severance Agreement with WMI in the amount of $2,211,210, within 90 days of the Petition Date. The Complaint seeks to avoid the Transfer as preferential under 11 U.S.C. section 547 (Count 1) and as fraudulent under section 548 (Count 2) and section 544(b) utilizing Washington state law (Count 3). The Complaint also seeks to recover the Transfer under section 550 (Count 4) and to disallow any claim by Corcoran against the Debtors under section 502(d) (Count 5). The case is, OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF WASHINGTON MUTUAL, INC., ET AL., ON BEHALF OF CHAPTER 11 ESTATES OF WASHINGTON MUTUAL, INC., ET AL., Plaintiff, v. JAMES CORCORAN, Defendant, Adv. Proc. No. 10-53158 (Bankr. D. Del.). A copy of the Court's July 16, 2013 Memorandum Opinion is available at http://is.gd/97DFJufrom Leagle.com. About Washington Mutual Based in Seattle, Washington, Washington Mutual Inc. -- http://www.wamu.com/-- was the holding company for Washington Mutual Bank as well as numerous non-bank subsidiaries. Washington Mutual Bank was taken over on Sept. 25, 2008, by U.S. government regulators. The next day, WaMu and its affiliate, WMI Investment Corp., filed separate petitions for Chapter 11 relief (Bankr. D. Del. 08-12229 and 08-12228, respectively). WaMu owns 100% of the equity in WMI Investment. When WaMu filed for protection from its creditors, it disclosed assets of $32,896,605,516 and debts of $8,167,022,695. WMI Investment estimated assets of $500 million to $1 billion with zero debts. WaMu is represented by Brian Rosen, Esq., at Weil, Gotshal & Manges LLP in New York City; Mark D. Collins, Esq., at Richards, Layton & Finger P.A. in Wilmington, Del.; and Peter Calamari, Esq., and David Elsberg, Esq., at Quinn Emanuel Urquhart Oliver & Hedges, LLP. The Debtor tapped Valuation Research Corporation as valuation service provider for certain assets. Fred S. Hodara, Esq., at Akin Gump Strauss Hauer & Fled LLP in New York, and David B. Stratton, Esq., at Pepper Hamilton LLP in Wilmington, Del., represent the Official Committee of Unsecured Creditors. Stephen D. Susman, Esq., at Susman Godfrey LLP and William P. Bowden, Esq., at Ashby & Geddes, P.A., represent the Equity Committee. The official committee of equity security holders also tapped BDO USA as its tax advisor. Stacey R. Friedman, Esq., at Sullivan & Cromwell LLP and Adam G. Landis, Esq., at Landis Rath & Cobb LLP in Wilmington, Del., represent JPMorgan Chase, which acquired the WaMu bank unit's assets prior to the Petition Date. Records filed Jan. 24, 2012, say that Washington Mutual Inc., former owner of the biggest U.S. bank to fail, has spent $232.8 million on bankruptcy professionals since filing its Chapter 11case in September 2008. In March 2012, the Debtors' Seventh Amended Joint Plan of Affiliated, as modified, and as confirmed by order, dated Feb. 23, 2012, became effective, marking the successful completion of the chapter 11 restructuring process. The Plan is based on a global settlement that removed opposition to the reorganization and remedy defects the judge identified in September. The plan is designed to distribute $7 billion. Under the reorganization plan, WaMu established a liquidating trust to make distributions to parties-in-interest on account of their allowed claims. WATERSTONE AT PANAMA: Lenox Mortgage Seeks to Dismiss Case ---------------------------------------------------------- Lenox Mortgage XVIII LLC filed a motion with the U.S. Bankruptcy Court seeking to dismiss the Chapter 11 case of Waterstone at Panama City Apartments, LLC. Lenox, which asserts a secured claim of at least $25.05 million, contends dismissal of the bankruptcy case is justified. Lenox argues that: a. There exists substantial or continuing loss to or diminution of the Debtor's real estate, including without limitation, on the basis Debtor lacks sufficient cash flow for normal required maintenance and capital expenditures. b. There is the absence of any reasonable likelihood of any rehabilitation of Debtor, including, without limitation, on the basis that Debtor lacks sufficient capital or cash flow to maintain normal operations and to fund any Chapter 11 plan. c. The Debtor's filing of this bankruptcy case was not authorized under applicable law or by the directors of The Tapestry Group, Inc., the sole member of Debtor. The Statement and Resolutions Adopted Regarding Authority to Sign and File Petition alleges that Edward E. Wilczewski is the interim President of Tapestry; however, there are no effective corporate resolutions and/or consents from Tapestry granting EW the authority to sign the Debtor's bankruptcy petition and related filings. d. The Debtor has failed to satisfy reporting requirements established by the Bankruptcy Code. In particular, part 4 of Debtor's statement of financial affairs filed herein fails to identify a lawsuit filed by Springbrook Apartments, Ltd. against the Debtor and Tapestry. In its lawsuit, Springbrook Apartments, Ltd. asserted several causes of action against the defendants, including breach of contract, fraud, negligent misrepresentation, money had and received, conversion, statutory fraud and fraudulent transfer, constructive trust, and alter ego. e. The filing or prosecution by Debtor of its bankruptcy petition has occurred in bad faith. A hearing on the motion is scheduled for Aug. 5, 2013 at 9:00 a.m. at Omaha Courtroom-Telephonic Hearing. Objections due by July 26. Affidavit evidences are due by July 31. Attorneys for the creditors can be reached at: Steven C. Turner, Esq. Thomas O. Ashby, Esq. Brandon R. Tomjack, Esq. BAIRD HOLM LLP 1700 Farnam Street Suite 1500 Omaha, NE 68102-2068 Tel: 402-344-0500 Fax: 402-344-0588 E-mail: sturner@bairdholm.com tashby@bairdholm.com btomjack@bairdholm.com Omaha, Nebraska-based Waterstone at Panama City Apartments, LLC filed for Chapter 11 protection (Bankr. D. Neb. Case No. 13-80751) on April 9, 2013. Bankruptcy Judge Timothy J. Mahoney presides over the case. William L. Biggs, Jr., Esq., at Gross & Welch, P.C., L.L.O., represents the Debtor in its restructuring efforts. The Debtor disclosed $26,159,064 in assets and $26,120,989 in liabilities as of the Chapter 11 filing. The petition was signed by Edward E. Wilczewski, manager. * Butner Attack on Eighth Circuit's Benn Is Rebuffed ---------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals in St. Louis declined an invitation to find a loophole in Section 522 of the U.S. Bankruptcy Code and ruled that when states opt out of federal exemptions, their citizens may exclude property from the reach of creditors only if specified in state law. According to the report, a bankrupt Missouri couple had a personal injury claim arising from an auto accident. The claim was unliquidated, meaning they hadn't yet won a judgment or settlement. They listed the claim as exempt, and the trustee objected. The bankruptcy court upheld the trustee, ruling that the claim wasn't among the types of property listed as exempt in Missouri state law. The Bankruptcy Appellate Panel upheld the bankruptcy court. The report notes that the couple appealed again, only to lose once more in the U.S. Court of Appeals for the Eighth Circuit in St. Louis on July 12. The couple argued for a narrow interpretation of a 2007 circuit court opinion in a case called Benn, saying that tax refunds aren't specifically exempted in Missouri law and therefore aren't exempted in bankruptcy. The couple claimed that Benn is contrary to the U.S. Supreme Court's 1997 Butner decision prescribing that interests in property are determined by state, not federal, law. The couple pointed to how Missouri courts hold that personal-injury claims can't be attached by creditors. The report relates that they contended that if bankruptcy trustees can take over personal injury claims, a bankruptcy trustee can recover more than a creditor outside of bankruptcy. U.S. Circuit Judge C. Arlen Beam disagreed and followed Benn. He said Butner held that federal courts could depart from state-law property rules when "some federal interest requires a different result." The report discloses that Judge Beam said there was a sufficient federal interest for allowing a trustee "more remedies than another Missouri creditor." The case is Abdul-Rahim v. LaBarge (In re Abdul-Rahim), 12-3448, U.S. Court of Appeals for the Eighth Circuit (St. Louis). * Appeals Court Judge Disallows Stripping Off Lien in Chapter 7 --------------------------------------------------------------- Bill Rochelle, the bankruptcy columnist for Bloomberg News, reports that the U.S. Court of Appeals for the Seventh Circuit in Chicago declined to let people in Chapter 7 bankruptcy strip off a subordinated mortgage where the value of the property is less than the first mortgage. According to the report, U.S. Circuit Judge Richard A. Posner in Chicago wrote an opinion on July 11 acknowledging that a so-called underwater subordinate mortgage can be stripped off if the individuals were in Chapter 13. To strip off the subordinate mortgage, Judge Posner said, "they would have had to file for bankruptcy under Chapter 13 rather than Chapter 7." The report notes that currently, the debate in bankruptcy circles is whether individuals can strip off an underwater, subordinate mortgage through so-called Chapter 20, where the bankrupt files first in Chapter 7 and later in Chapter 13. The case is Palomar v. First American Bank, 12-3492, U.S. Court of Appeals for the Seventh Circuit (Chicago). * Citigroup's Toxic Asset Unit Costs Jump to $1.25 Billion ---------------------------------------------------------- Donal Griffin, writing for Bloomberg News, reported that Citigroup Inc. (C), the third-biggest U.S. bank by assets, said first-half costs at a unit holding some of the lender's most toxic loans and securities multiplied by almost 10 times from a year ago on higher legal expenses. The Special Asset Pool's operating expenses climbed to $1.25 billion for the first six months of the year from $129 million in the same period last year, the report said, citing figures on the New York-based bank's website. That's more than double the unit's $619 million in total costs for 2012 and 2011 combined. Swelling expenses in the unit, one of three that house distressed and unwanted assets in the Citi Holdings division, point to the continuing legal costs facing Chief Executive Officer Michael Corbat, the report related. Total expenses rose 1 percent to $24.4 billion even as Corbat cuts thousands of jobs and sells businesses in an effort to make the bank more efficient. "One of the legacy issues that we've got is continuing litigation coming out of our business in Holdings," Chief Financial Officer John Gerspach, 59, said on a conference call with reporters, the report cited. "We continue to put aside legal reserves to cover our potential exposures there." While Gerspach declined to comment on what's producing the spike in legal costs, he said "it's fair to assume" that private-label securitization remains one of the bank's "legacy issues," the report said. Private-label mortgage-backed securities aren't guaranteed by government-sponsored enterprises such as Fannie Mae or Freddie Mac, the report added. Investors can force banks to repurchase the underlying mortgages if they are faulty. * National Credit Default Rates Hit Post-Recession Low in June -------------------------------------------------------------- Data through June 2013, released on July 16 by S&P Dow Jones Indices and Experian for the S&P/Experian Consumer Credit Default Indices, a comprehensive measure of changes in consumer credit defaults, showed decrease in national default rates during the month. Both national composite and the first mortgage default rates hit new post-recession lows. The national composite was 1.34% in June, down from 1.42% in May. The first mortgage was 1.23% in June, down from 1.31% posted last month. The second mortgage posted 0.54% in June, the lowest rate in the history of the index. It was down from 0.60% posted in May. The bank card rate was 3.41% in June vs. 3.63% in May. The auto loan default rate hit a new low in June posting 1.00%; it was marginally down from its 1.04% May level. "Consumers' financial condition continues to improve," says David M. Blitzer, Managing Director and Chairman of the Index Committee for S&P Dow Jones Indices. "Across all categories default rates are falling. The first mortgage hit a new post-recession low of 1.23% in June. Bank card default rate was 3.41%, 22 basis points down from last month. The second mortgage and auto loan default rates hit new lows of 0.54% and 1.00% since the indices began in 2004. All loan types remain below their respective levels a year ago. "Two of the five cities, New York and Miami, saw decreased default rates in June. New York dropped 61 basis points and Miami was down 13 basis points this month. Miami was at a post-recession low of 1.75%. Chicago, Dallas and Los Angeles were slightly up by four, seven and eight basis points respectively. All five cities have default rates at or less than 1.75% and remain below default rates they posted a year ago, in June 2012." The table below summarizes the June 2013 results for the S&P/Experian Credit Default Indices. These data are not seasonally adjusted and are not subject to revision. S&P/Experian Consumer Credit Default Indices National Indices Index June 2013 May 2013 June 2012 Index Level Index Level Index Level Composite 1.34 1.42 1.52 First Mortgage 1.23 1.31 1.41 Second Mortgage 0.54 0.60 0.73 Bank Card 3.41 3.63 3.97 Auto Loans 1.00 1.04 1.04 Source: S&P/Experian Consumer Credit Default Indices Data through June 2013 The table below provides the S&P/Experian Consumer Default Composite Indices for the five MSAs: Metropolitan June 2013 May 2013 June 2012 Statistical Area Index Level Index Level Index Level New York 1.43 2.04 1.64 Chicago 1.59 1.55 1.84 Dallas 0.92 0.85 0.87 Los Angeles 1.53 1.45 1.60 Miami 1.75 1.88 2.44 Source: S&P/Experian Consumer Credit Default Indices Data through June 2013 About S&P Dow Jones Indices S&P Dow Jones Indices LLC -- http://www.spdji.com-- is a part of McGraw Hill Financial. It is the world's largest, global resource for index-based concepts, data and research. Home to iconic financial market indicators, such as the S&P 500(R) and the Dow Jones Industrial Average(TM), S&P Dow Jones Indices LLC has over 115 years of experience constructing innovative and transparent solutions that fulfill the needs of investors. More assets are invested in products based upon our indices than any other provider in the world. With over 830,000 indices covering a wide range of asset classes across the globe, S&P Dow Jones Indices LLC defines the way investors measure and trade the markets. About Experian Experian -- http://www.experianplc.com-- is a global information services company, providing data and analytical tools to clients around the world. The Group helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft. Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2013 was US$4.7 billion. Experian employs approximately 17,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; California, US; and Sao Paulo, Brazil. * NY Judge to Rule if WTC Developer Can Seek Damages from Airlines ------------------------------------------------------------------ Bernard Vaughan, writing for Reuters, reported that a federal judge is days away from deciding if New York developer Larry Silverstein can recover as much as $3.5 billion from airlines for damages to the World Trade Center on Sept. 11, 2001, on top of more than $4 billion he has received from insurers. According to the report, U.S. District Judge Alvin Hellerstein started a three-day trial on Monday in which he will decide how much of the insurance payments should offset the damages Silverstein is seeking from the airlines. These include United Airlines, now United Continental Holdings Inc, American Airlines and American's parent, AMR Corp. Roger Podesta, a lawyer for the airlines, argued that Silverstein's insurers have already paid him for the same losses he is seeking from the airlines, the report said. The insurance payments and the claims against the airlines are "for the same category of loss," Podesta said in opening arguments in a packed courtroom in federal court in New York, the report related. But Rich Williamson, a lawyer representing Silverstein's World Trade Center Properties, said the airlines' argument "defies reality," the report added. The cases are World Trade Center Properties LLC, et al. v. United Airlines Inc; World Trade Center Properties LLC, et al. V. American Airlines Inc, et al, v. American Airlines Inc et all, U.S. District Court, Southern District of New York, Nos 08-3719 and 08-3722. * Fitch: Commodity Price Dips Pose Risk for Mining, Metals and E&P ------------------------------------------------------------------ Further drops in commodity prices pose potential risks for credit quality in the global metals and mining and the energy and power (E&P) sector in different ways, according to Fitch Ratings. "We rate metals & mining and energy companies through the cycle, so a scenario of lower commodity prices is not expected to result in downgrades on its own. However, the fact that issuers in energy and metals have shown up as recent equity laggards may create additional risks for bondholders, particularly in an environment of declining commodity prices," Fitch says. Companies in the metals and mining industry have limited flexibility to adjust near-term capex to respond to sharp additional price declines in metals prices. Despite shareholder pressure arising from weak returns, there may be less risk from shareholder activists given the historical lack of LBO or corporate raider activity in this sector. The reverse is true in energy as the threat of activist pressure remains high. At the same time, there appears to be significant room to cut high capex budgets. A preferred value creation technique among energy companies over the last two years - the MLP spin-off - may be less attractive going forward given the recent sharp rise in Treasury yields and the fact that so many assets have already been spun off. Fundamentals for commodities vary on an individual basis. The metals & mining complex on average has been hit by significant price weakness recently, driven by the combination of a slowdown in emerging market demand (in particular, China's projected growth), improved supply and weakness in developed market demand. As of the end of June, this had resulted in a year-over-year decline of 12.5% across a basket of metals, with current pricing well below its three and five year averages at -20.2% and -13.4%, respectively. By contrast, a basket of energy commodities has done relatively well over the same period, underpinned by the strong performance in global crude oil (with WTI and Brent recently in the $95/barrel and $103/barrel ranges), as well as a modest recovery in natural gas from the trough levels of the last few years. As of the end of June, energy prices remained modestly above their three and five year averages. * Fitch Says U.S. State Pension Funded Ratios Continue to Decline ----------------------------------------------------------------- The reported funded ratios for most major U.S. statewide plans continue to decline, although the rate of the decline is slowing, according to a new Fitch Ratings report. Factors contributing to the ongoing erosion include continued absorption of market value losses from the 2008-2009 recession and the lower investment return assumptions implemented by many plans. 'Pensions remain a growing pressure for numerous states' budgets. Nearly all states are pursuing reform and remain well-positioned to address these burdens. While the positive effects of reform for most are decades away, a proactive approach to managing pension challenges is a credit positive,' said Douglas Offerman, senior director in Fitch's states group. The burden of states' debt and unfunded pensions range widely. The median burden of debt and unfunded pensions measures 7% of personal income, but ranges from 1.8% to 24.8%. With most pension systems using asset smoothing - frequently five years - to recognize actual investment value changes relative to assumed returns, many are still absorbing the deep, recessionary losses of the 2008-2009 recession. Investment performance in 2012 was relatively flat for most plans and well below their investment return assumptions, adding to downward pressure on actuarial funded ratios. Investment performance has been stronger more recently. Plans with a June 30 valuation date can expect to record gains well above their investment return assumptions when they report 2013 valuations. More than one-half of major statewide plans lowered their investment return assumptions since the downturn, a positive step. Fitch believes that investment return assumptions at 8% or higher are unrealistic. * 9th Cir. Appoints Laurel E. Davis as D. Nev. Bankruptcy Judge --------------------------------------------------------------- The Ninth Circuit Court of Appeals appointed Bankruptcy Judge Laurel E. Davis to a fourteen-year term of office in the District of Nevada, effective July 12, 2013, (vice, Markell). Honorable Laurel Elizabeth Davis United States Bankruptcy Court United States Foley Building 300 Las Vegas Boulevard South Las Vegas, NV 89101 Telephone: (702) 527-7030 Fax: (702) 527-7035 Judicial Assistant Jeanann Janisse Telephone: (702) 527-7031 Law Clerk Jimmy Dahu Telephone: (702) 527-7034 Effective August 8, 2013 Term Expiration: July 11, 2027 * Recent Small-Dollar & Individual Chapter 11 Filings ----------------------------------------------------- In re Jack Tsai Bankr. C.D. Cal. Case No. 13-27391 Chapter 11 Petition filed July 5, 2013 In re Norman Andreini Bankr. E.D. Cal. Case No. 13-29019 Chapter 11 Petition filed July 5, 2013 In re Glass Properties, LLC Bankr. D. Conn. Case No. 13-31289 Chapter 11 Petition filed July 5, 2013 See http://bankrupt.com/misc/ctb13-31289.pdf represented by: Carl T. Gulliver, Esq. COAN LEWENDON GULLIVER & MILTENBERGER E-mail: cgulliver@coanlewendon.com In re John Huguenard Bankr. M.D. Fla. Case No. 13-08348 Chapter 11 Petition filed July 5, 2013 In re Barbara Zeifer Bankr. S.D.N.Y. Case No. 13-12228 Chapter 11 Petition filed July 5, 2013 In re Foundation Land Services, LLC Bankr. S.D.N.Y. Case No. 13-36572 Chapter 11 Petition filed July 5, 2013 See http://bankrupt.com/misc/nysb13-36572.pdf represented by: Joshua N. Bleichman, Esq. BLEICHMAN & KLEIN E-mail: bleichmanklein@yahoo.com In re William Hollifield Bankr. M.D. Tenn. Case No. 13-05849 Chapter 11 Petition filed July 5, 2013 In re Oracle Control Systems, Inc. Bankr. D. Ariz. Case No. 13-11620 Chapter 11 Petition filed July 6, 2013 See http://bankrupt.com/misc/azb13-11620.pdf represented by: Clifford B. Altfeld, Esq. Altfeld & Battaile P.C. E-mail: cbaltfeld@abazlaw.com In re Asper, Inc. Bankr. S.D. Cal. Case No. 13-06947 Chapter 11 Petition filed July 7, 2013 See http://bankrupt.com/misc/casb13-6947.pdf represented by: Vincent W. Davis, Esq. Law Offices of Vincent Davis & Assoc E-mail: v.davis@vincentwdavis.com In re Transgender Health Empowerment, Inc. dba THE, Inc Bankr. D.D.C. Case No. 13-00420 Chapter 11 Petition filed July 7, 2013 See http://bankrupt.com/misc/dcb13-00420.pdf represented by: Richard L. Gilman, Esq. Gilman & Edwards, LLC E-mail: goodlawyers@gilmanedwards.com In re Global Economic Empowerment LLC Bankr. C.D. Cal. Case No. 13-15806 Chapter 11 Petition filed July 8, 2013 See http://bankrupt.com/misc/cacb13-15806.pdf Filed pro se In re Richard Lieu Bankr. C.D. Cal. Case No. 13-15803 Chapter 11 Petition filed July 8, 2013 In re Kera Oakland Bankr. N.D. Cal. Case No. 13-43885 Chapter 11 Petition filed July 8, 2013 In re ARC of Daytona, LLC Bankr. M.D. Fla. Case No. 13-04205 Chapter 11 Petition filed July 8, 2013 See http://bankrupt.com/misc/flmb13-4205.pdf represented by: Ronald Cutler, Esq. Ronald Cutler PA E-mail: ronaldcutlerpa@bellsouth.net In re Henri Erkelens Bankr. M.D. Fla. Case No. 13-4191 Chapter 11 Petition filed July 8, 2013 In re Lloyd Taylor Bankr. S.D. Fla. Case No. 13-26063 Chapter 11 Petition filed July 8, 2013 In re Robert Olsen Bankr. N.D. Ill. Case No. 13-27464 Chapter 11 Petition filed July 8, 2013 In re Caputo Tollgate Restaurant, LLC Bankr. S.D.N.Y. Case No. 13-23128 Chapter 11 Petition filed July 8, 2013 See http://bankrupt.com/misc/nysb13-23128.pdf represented by: Anne J. Penachio, Esq. Penachio Malara LLP E-mail: apenachio@pmlawllp.com In re Tidewater Minerals Corporation Bankr. S.D. Tex. Case No. 13-20317 Chapter 11 Petition filed July 8, 2013 See http://bankrupt.com/misc/txsb13-20317.pdf represented by: William Arthur Whittle, Esq. E-mail: ecf@whittlelawfirm.com In re Cedar Valley Store, LLC Bankr. D. Utah Case No. 13-27698 Chapter 11 Petition filed July 8, 2013 See http://bankrupt.com/misc/utb13-27698p.pdf See http://bankrupt.com/misc/utb13-27698c.pdf represented by: Steven James Park, Esq. 1LAW E-mail: jim@1law.com In re Teresa Jordan Bankr. C.D. Cal. Case No. 13-27600 Chapter 11 Petition filed July 9, 2013 In re Kasaine World Delivery Services, Inc. Bankr. N.D. Cal. Case No. 13-11344 Chapter 11 Petition filed July 9, 2013 See http://bankrupt.com/misc/canb13-11344.pdf represented by: Steven M. Olson, Esq. LAW OFFICES OF STEVEN M. OLSON E-mail: smo@smolsonlaw.com In re Robert 49 McCready, Sr. Bankr. D. Colo. Case No. 13-21741 Chapter 11 Petition filed July 9, 2013 In re McDowell and Ariail, Inc. Bankr. M.D. Fla. Case No. 13-04211 Chapter 11 Petition filed July 9, 2013 See http://bankrupt.com/misc/flmb13-04211.pdf represented by: Taylor J. King, Esq. LAW OFFICES OF MICKLER & MICKLER E-mail: court@planlaw.com In re Kathleen McCarthy Bankr. M.D. Fla. Case No. 13-04223 Chapter 11 Petition filed July 9, 2013 In re Karen Lennon Bankr. N.D. Ill. Case No. 13-27598 Chapter 11 Petition filed July 9, 2013 In re Lucretia Freeman-Buster Bankr. D. Md. Case No. 13-21651 Chapter 11 Petition filed July 9, 2013 In re Morris Buster Bankr. D. Md. Case No. 13-21651 Chapter 11 Petition filed July 9, 2013 In re Odoi Associates, Inc. Bankr. D. Md. Case No. 13-21652 Chapter 11 Petition filed July 9, 2013 See http://bankrupt.com/misc/mdb13-21652p.pdf See http://bankrupt.com/misc/mdb13-21652c.pdf represented by: Andrew Ndubisi Ucheomumu, Esq. THE UCHEOMUMU LAW GROUP, LLC E-mail: andrew@ucheomumulaw.com In re CSK, Inc. Bankr. D. Md. Case No. 13-21654 Chapter 11 Petition filed July 9, 2013 See http://bankrupt.com/misc/mdb13-21654.pdf represented by: John Shin, Esq. SHIN LAW GROUP E-mail: john@shinlegal.com In re Melanie Milasinovich Bankr. D. N.M. Case No. 13-12294 Chapter 11 Petition filed July 9, 2013 In re Juan Prado Nicasio Bankr. D. P.R. Case No. 13-05619 Chapter 11 Petition filed July 9, 2013 In re Michael Buchanan Bankr. W.D. Tenn. Case No. 13-11739 Chapter 11 Petition filed July 9, 2013 In re Jordanelle Residential Investment, LLC Bankr. D. Utah Case No. 13-27780 Chapter 11 Petition filed July 9, 2013 See http://bankrupt.com/misc/utb13-27780p.pdf See http://bankrupt.com/misc/utb13-27780c.pdf represented by: Knute A. Rife, Esq. RIFE LAW OFFICE E-mail: KARife@RifeLegal.com In re Charles Baker Bankr. E.D. Va. Case No. 13-13156 Chapter 11 Petition filed July 9, 2013 In re Debra Laseter Bankr. D. Ariz. Case No. 13-11890 Chapter 11 Petition filed July 11, 2013 In re Gershwin Blyden Bankr. S.D. Fla. Case No. 13-26404 Chapter 11 Petition filed July 11, 2013 In re DKM Holding LLC Bankr. N.D. Ill. Case No. 13-27926 Chapter 11 Petition filed July 11, 2013 See http://bankrupt.com/misc/ilnb13-27926.pdf represented by: Michael V. Ohlman, Esq. MICHAEL V. OHLMAN, P.C. E-mail: mvohlman@ohlmanlaw.com In re IB Agriculture, Inc. dba Monty Northwest Bankr. D. Mont. Case No. 13-60967 Chapter 11 Petition filed July 11, 2013 See http://bankrupt.com/misc/mtb13-60967.pdf represented by: Jon R. Binney, Esq. BINNEY LAW FIRM, P.C. E-mail: jon@binneylaw.com In re R & D Group, Inc. Bankr. D. Nebr. Case No. 13-81492 Chapter 11 Petition filed July 11, 2013 See http://bankrupt.com/misc/neb13-81492.pdf represented by: James W. Crampton, Esq. E-mail: jwcrampton@hotmail.com In re John Hathaway Bankr. D. Nev. Case No. 13-16043 Chapter 11 Petition filed July 11, 2013 In re Valladolid, LLC Bankr. D. Nev. Case No. 13-16077 Chapter 11 Petition filed July 11, 2013 See http://bankrupt.com/misc/nvb13-16077.pdf Filed as Pro Se In re Mendozea LLC Bankr. D. N.J. Case No. 13-25163 Chapter 11 Petition filed July 11, 2013 See http://bankrupt.com/misc/njb13-25163.pdf represented by: Stuart D. Gavzy, Esq. E-mail: stuart.gavzy@gmail.com In re Central Asset Management, Inc. dba TDC Construction Bankr. W.D. Okla. Case No. 13-13141 Chapter 11 Petition filed July 11, 2013 See http://bankrupt.com/misc/okwb13-13141.pdf represented by: Gary D. Hammond, Esq. MITCHELL & HAMMOND E-mail: gary@okatty.com In re Charlesdale Associates, Inc. Bankr. M.D. Tenn. Case No. 13-04279 Chapter 11 Petition filed July 11, 2013 See http://bankrupt.com/misc/flmb13-04279.pdf represented by: Armistead W. Ellis, Jr., Esq. ARMISTEAD W. ELLIS, JR., P.A. E-mail: Pleadings.EllisLaw@gmail.com In re Mark Lucas Bankr. M.D. Tenn. Case No. 13-05977 Chapter 11 Petition filed July 11, 2013 In re Kenny Ellison Bankr. M.D. Tenn. Case No. 13-05993 Chapter 11 Petition filed July 11, 2013 In re John Hathaway Bankr. E.D. Tex. Case No. 13-60543 Chapter 11 Petition filed July 11, 2013 In re Carlos Desir Bankr. W.D. Tex. Case No. 13-31138 Chapter 11 Petition filed July 11, 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 ***